Two words, socialism and capitalism, share the top spot in Merriam-Webster’s words of the year. Bigot came in third, just beating democracy in fifth, both of which streaked ahead of eighth place, malarkey.
Scale is the zeitgeist in the world of sustainability. And although it’s not in Merriam-Webster’s top 10, it gets my vote for the most used word of the year. And there is a lot of it about. Our planet entertains more than 7 billion people, we are awash with digital data, our use of energy use has increased from 35 exajoules in 1900 to 550 exajoules in 2010, life expectancy at birth has increased by 21 years since 1950 and almost a billion people watched the opening of the London Olympics.
We are awash with scale, but largely of the wrong kind. The World Bank says if the global community fails to act on climate change we are on track for a 4C temperature rise this century, while Unicef reports that22,000 children under five die each day. And although we have halved global poverty since 1990, China has delivered the bulk of this success, while almost half of sub-Saharan Africa’s population remains in extreme poverty. And while the news that Bloomberg New Energy Financeexpects 2012 cleantech investment to be around $250bn should be celebrated, this is small beer set against the need to invest upwards of $15tn in power generation by 2020.
Scaling is the aim for any self-respecting sustainabilitista. We spend a tonne of time building initiatives intended to go to scale, mostly with a bifocal interest in speed and leverage. Richard Branson’s latest venture,the B Team, launched with Jochen Zeitz, director of French multinational PPR and former chairman of Puma, is dedicated to amplifying initiatives that can hit the high notes, joining the ranks of scale-ambition initiatives such as Bill Clinton’s Clinton Global Initiative.
Speed-to-scale is the mantra of the Danish-led, Global Green Growth Forum, with its focus this year on mega-partnerships designed to scale, including the Water Resources Group chaired by Nestlé’s Peter Braback-Letmathe, UN secretary general Ban Ki Moon’s Sustainable Energy for All initiative, and Qatar’s Global Dry Land Alliance.
The UN’s Rio+20 provided an exhibition centre for many must-get-to-scale initiatives, such as the World Economic Forum-inspired Friends of Rio group made up of leading businesses that want to encourage governments to take action. The World Business Council for Sustainable Development, now under the leadership of ex-TNT head, Peter Bakker, has signalled its intention to come out fighting into the next round and take more risks.
Yet despite these successes, the fact is that we seem capable to do so much at scale, and yet achieve comparatively little when it comes to sustainability. The planet’s two most profitable companies, energy giants Exxon and Gazprom, together earned profits of more than $90bn in 2011. This is three times the total funds all rich countries committed at Copenhagen’s climate talks in 2009 to helping the developing world finance climate adaptation and reduced emissions. And the bailouts following the financial crisis have cost us trillions of dollars, $15tn by one count, well over a hundred times more than it would cost to provide sustainable energy for all, according to the UN.
2012: the year of the unreasonable was the title of my last end-of-year Guardian piece. In the future we need to become ever more unreasonable in our ambitions and actions.
My scaling ambitions for 2013 are defensibly unreasonable: publicly-financed green investment, serious financial market reform and smarter fiscal policies.
Firstly, massive investment in green infrastructure can be advanced through massive, Marshall plan-style public works, financed by historically low borrowing rates and serving the cause of dragging an austerity-dogged north Atlantic economy back on to its feet.
Secondly, getting private investors to play ball is essential, and this can be in part achieved by requiring fund managers acting for institutional investors to price in carbon at a level that would deliver a survivable 2C temperature rise. State-managed investment vehicles, notably sovereign wealth funds and development banks, should demonstrate leadership by moving immediately to pricing carbon into their investment decisions. Building on this, much can be achieved in moving the $250tn financial sector in the right direction by requiring rating agencies to count natural resource use in assessing sovereign and corporate credit worthiness, as would advancing a financial transactions tax for both equities and derivatives transactions.
Fiscal reforms would make a huge difference, thirdly, both on the tax and expenditure sides. Perverse incentives have to be eliminated, both direct fossil-fuel subsidies and the $1tn-plus spent on other subsidies that encourage carbon intensive business. Frankly, we cannot afford these subsidies while people go hungry, and recycled tax dollars can be put to better use.
Public procurement, totalling $4-5tn annually, could serve as a powerful tool for stimulating investment in green growth. Good practice shows the way, but it is indefensible that such a huge volume of public spending continues to finance an unsustainable economy. Accelerating the greening the trillions of dollars annually of procurement by the world’s leading businesses would deliver a game-changing boost to the green economy.
Each of these wishes are game changers, the kind of scale we need. Each one also tops the agendas of a growing number of initiatives and institutions. We are also pretty clear about how this can be done, with well-crafted solutions now available, for example, for the design of an effective financial transaction tax and how to rid the world of fossil-fuel subsidies while protecting the vulnerable from carbon poverty. And finally, we know an immense amount about the resistant incumbents, although paying them off or getting them out of the way is not going to be easy.
Scale in advancing sustainability is the unreasonable challenge we have to meet. Scale-hungry initiatives such as those described above are what is needed. And ensuring such initiatives are aimed at the right targets, such as those on my wish list, is key to success.
Simon Zadek is Senior Fellow of the Global Green Growth Institute, and currently Visiting Scholar at Tsinghua School of Economics and Management. He contributed to the preparation of the Green Investment Report and can be reached at simon@zadek.net and followed at www.zadek.net.