It’s almost surreal that the explanation of climate change, its far-reaching consequences and the warning of the lack of action as well as the foresight on the reluctance to switch from fossil fuels is so cogently made in 1985 before the US Congress.
And today, we still have what we have happening in the US. Meanwhile, other developing countries are massively adopting green energy, unlocking the opportunities and growth which comes from the energy transition.
The economic downsides of displacing the traditional, carbon-intensive activities were huge in 1985, but compared to the manner we allowed the activities to have expanded till today, humanity seemed like it’s dancing towards the edge of the cliff.
The modern, capitalist, market economy is powered by demand. Demand for products, goods and services. And what drives these demand? Some would like to say, marketing, advertising. But more fundamentally, social comparison, desire for affliation/connection.
So the idea of market competition gets turned on demand itself. In other words, the seller turns to the buyer and say, “He’s got this, so you have got to get it.” This mechanism is so widespread and so completely ignored by economics that at a macro-level, it overturns more fundamental notions of allocative efficiency. The fact that demand is in itself premised upon the actions and long-term strategies of supply, makes the equilibrium in the market impossible to pin down.
There is no long term convergent points and what development has come to be is simply the ability for supply to generate more and more of its own demand.
The first makes assumptions explicit. The second hides the assumptions and takes them for granted.
In my work as a strategy consultant, I make extensive use of scenarios, and often we might not consider the likelihood of scenarios while constructing them. It matters because it helps us to immerse ourselves into a reality such that our construction of the reality is not affected by how likely we think it would be. It is more important to be able to extensively work our the implications of our assumptions at that stage.
Only after the scenario modelling is complete, it makes sense to step back and examine the assumptions, perform sensitivity analysis and consider how the outcomes are sensitive to some of the assumptions.
And then what? Then we consider likelihoods of those assumptions manifesting.
When is it good for something to be structured and when is it good for it not to be? It’s not entirely clear. I think humans do enjoy a bit of both. At some level, the world is structured but it is also messy and complex. There is land and sea, forests and deserts. But there are also ecosystems and lots of freedom to roam within the realms you find yourself in.
What happens when an environment is too structured? Problem solving becomes playing games, more about figuring out the rules and toying with it than to really deal with problems at hand. This is how the big companies develop more bloat and bureacracy with politics.
And what if the environment lacks structure?Outcomes become less reliable. The randomness can create uncertainty and encourage inefficiency. Yet at the same time it can build resilience.
What do you want for yourself? For your kids? For your staff? How would you structure it?
It begs the question if a company or a brand’s identity is meant to hang around and if so, what kind of values should persist as it grows. Or as the market changes. The idea that Google can quietly push out something and slap a Beta sticker to insulate themselves is attractive when their market share is still not exactly dominant in a new space they are trying to enter. Moreover, the pool of audience they had targeted; the ones who would try something new or be eager to take the tech guinea pig role might no longer be enough to feed the company’s need for growth and scale.
So certain aspects of the company changes and one could say the identity is forgotten but it could also mean they have allowed it to be forsaken in order to pursue something else.
The question is what defines the company’s identity? Is it a way of doing things? That’d be too dynamic. Is it the targeted group of customer it serves? Then it’s growth is constrained to the size of that group. Or the pursuit of the company? But surely the world changes and that pursuit gets altered.
In any case Google is long past their “original identity”; and practically all of those dimensions I mentioned above have changed for them. It is up to them to tell the story of their identity’s evolution and redefine what they really want to keep or discard.
Reducing carbon emissions is about doing less things. But our culture and economy is not used to that. Maybe that’s why it is easier to sell the idea that we must do more new things or different things.
New actions from various parties in the economy requires new forms of coordination. We are not familiar with all that and neither are we familiar with the roles, actions and expectations.
In some sense the talents who used to do this sort of work would have come from those with public policy background but because of the manner the economy and talent flows have evolved in the past few decades, these people now come from everywhere.
For those in research, it is knowledge that catalyses actions. For those in politics it is the voice from the people. And for businesses, it would tend to be what constitutes opportunity, these various pockets of objectives, desired outcomes and tools need to be laid out and strung together.
What are negative prices in the market? When you don’t want something and have to pay someone to take it. But why can’t you just “dispose” it somehow? Or “leave it there”? Maybe there are regulations in place. Or maybe there isn’t a place that you can and want to “leave it”
Carbon prices are negative prices; you need to pay someone to take it away. By creating regulations to prevent people from just “leaving it there (in the atmosphere)”, you push the cost of disposal to the polluters and set out the signals and momentum necessary to rewire the system.
Free market doesn’t emerge spontaneously; it requires regulation, boundaries and legal mechanisms to enforce rules, especially explicit ones. Implicit rules are also necessary to keep things together. Question is if we are willing to create a system intellectual property and enforce rights to spark innovation, why aren’t we doing so for climate change?
I wrote about finding talents; but what do you do after finding them? Do you leverage them? Do you beat them into conforming with the system and structures you’ve created? The use of talents is more important than finding them because you’re not going to keep them if you think that the transaction is just about remuneration in exchange for them applying their abilities to your problems.
Conditions need to be created to leverage on our talents better and that can come from remuneration but it also involves the structure of work, processes and the environment created by managers and prevailing cultures.
If you don’t have them, then finding talents might be a waste of time and resources.
There will be a time cuts come when excesses are deemed to have gone overboard. This applies to overstocking, overhiring, and having the wrong structure to deal with a problem. At some point, what is deemed as a correction occurs. Question is how did things get derailed or misaligned? Why do we not know? Should we think something is amiss when governance mistakes can be buffered by growth?
Maybe something to think about as we go through a period of layoffs, cuts and sense of rising prices and real rates trying to make a comeback. As we manage the cuts that has taken place, it would be useful to ask ourselves to what extent do we want to enable growth irresponsibly.
Fast and mindless growth can hurt twice. First when they forsake and leave some behind. Second when they end up with cutbacks that might leave some folks worse off than if it hadn’t happened.
What constitutes waste for you? Is it when you decide something is useless for you? Or when you throw out something? Where you dispose of them matters because it defines where it goes and it determines what happen to the materials or matter and if it is classified as waste. The overall psyche of our current populace is mostly driven by the out of sight, out of mind approach to waste.
We could change the very idea of waste so that there is better recognition of the value of the material. This helps reduce the waste and encourage reusing.
Or we can make it way easier to recycle. But recycling will have to be different from disposal. And the recycling activity needs to be valued differently.
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