It Will Get Darker Before the Dawn - Resilience https://www.resilience.org/stories/2020-05-27/it-will-get-darker-before-the-dawn/
The collapse of the fossil fuel industry – good for climate action but bad for geopolitical stability 10 – has long been understood as a systemic financial risk. The pandemic may have just triggered it 11, leading not just to economic losses but major global power shifts.
The pandemic has highlighted inherent structural weaknesses in some of the worlds largest economies, but none more so than the US. Their weak response to the pandemic combined with inequality will likely tip the US into depression 12 – or worse. Social commentator Umair Haque describes the current state of the US as “A nation in which income, savings, life expectancy, happiness, trust are all in free-fall. This is the stuff of epic social collapse”. I think he’s right. The collapse we’re witnessing will likely lead to violent civil unrest and political chaos – but certainly to ugly polarisation and instability, manufactured trade conflicts, nationalism and protectionism.
Just those two examples, happening on top of the renewable energy and electrified transport revolution already underway, will precipitate massive global shifts in political and economic power – not just from the US to China but more broadly – with far reaching implications 13. As argued by the Bank of America report, it could lead to “….some of the largest shifts in power ever seen in modern economic history.” The US will be an empire in decline, with all the risks that entails.
The only way to avoid them is to force a collective recognition amongst policy makers and the business community as to what this is really about. We have a system problem and unless we address it in a systems way, we will fail.
Will we do so? Or will we launch some token version of a “Green New Deal” programme, add on a slightly stronger social safety net and call it a revolution? Will we use this opportunity – or will we just apply unfocused monetary policy – basically spend lots of money – still deluded that we can restart the economy as it was?
History is brutal teacher on this topic. As we have seen with COVID 19, it’s only when an existential crisis hits – with direct and immediate impact – that we then embark on truly dramatic change. Will this crisis be enough to trigger a broader understanding of, and appropriate reaction to, the greater systemic crisis?
The evidence so far is probably not. Not until things get worse. A lot worse. It may or may not be a synchronised global depression, and it may not be global collapse, but it will be very bad, and it will last for a long time.
first we have to decide to change.
This is about choice, not about our capacity to deliver. Each and every ‘black elephant’ is fixable – if we act in time. We have the technology, the financial capacity, the intellect, the humanity and a visceral instinct to survive. But if I dwell on that potential here, I risk triggering your optimism bias and the opportunity for denial.