News & Insights Navigating the transition to sustainability amidst new forces, positive and negative Caroline Ashley, Global Director of System Change Programmes at Forum for the Future, examines the emergent positive and negative forces actively shaping the post-COVID-19 reality and reasserts the need for a just transition. ‘Nothing will ever be the same again’. ‘Everything has changed’. We all feel that now. But is it true? More specifically, is the COVID-19 crisis really the great opportunity to ‘build back better’ that we all like to think? I have been pondering this, trying to balance optimism that new possibilities have emerged, pragmatism to ‘never let a good crisis go to waste’, and realism, that entrenched behaviour tends to creep back in. The COVID-19 crisis is certainly not an automatic jolt onto a path for a more sustainable future. Indeed, as Sally Uren outlines in her recent column on corporate leadership, Forum is processing three alternative future trajectories, and some are distinctly gloomy: Disciplined future, where greater control, enabled by tech, is used to maintain public health, security and growth Collapse and compete future, where there is not enough to share, and players retreat to protect their own kind in a zero sum world Transformative future, where planetary health and human wellbeing are prioritised, and where deep change is seen as both possible and necessary. Has the transformative option become more or less attainable due the pandemic? Undoubtedly some new opportunities have emerged. Some doorways have opened, expanding our opportunities to reimagine and then create a better future. Positive forces that have already been readily observed by many others[i] include demonstration that radical change is possible – overturning any assumption that we have to organise ourselves the way we did before; and demonstration that bold government action is possible across poor[ii] and rich countries, at city, state and national level. We have seen unimagined human adaptability to huge disruption, nimble innovations, unusual partnerships, and accelerated new ways of working to mitigate the health crisis and the effects of lockdown – from repurposing of factories, to pop-up community support. Uptake of technology, decrease in travel, and drop in greenhouse gas emissions happened instantly, along with appreciation of clean air, and reflection on our relationship with nature. Separately from COVID but doubtlessly intertwined with the volatility of this era, hope already seems high that the murder of George Floyd is not yet one more in a litany of horrors, but a trigger for deep-rooted change. COVID-19 has already paid costs of transition Another positive force may sound a little callous but is incredibly important: COVID-19 has paid some of the costs of transition to a more sustainable future. Any transition, say from fossil fuels to renewables, or from fast fashion to a more sustainable and circular garment sector, comes with disruption and huge costs of transition. Transition costs are a major impediment to action in normal times. Economic theory might justify a radical new policy - from a utilitarian perspective, total welfare increases. In the world of theory, losers can be compensated, so that all are better off. But politicians and decision-makers living in the real world know that change hurts. Losers usually lose out. Few leaders are willing or able to cope with the costs. Due to COVID-19, some of those costs are already being paid. Workers are displaced, fossil fuel assets are stranded. Carbon heavy businesses are already adjusting to lower demand. The oil sector has to deal with collapsing prices. That means we can invest in new trajectories rather than trying to build back the old. What’s important is to help people and firms make the transition and drive the transition. Reskilling workers becomes essential, as does rewiring of finance, regulation and market mechanisms. Government’s short-term support for people and businesses needs to transition into long-term support that helps them onto new pathways. There is lots to work out, but the opportunity is there. The Economist argues this is a time to ‘seize the moment’ for a low-carbon transition: the pandemic both reveals the size of the challenge ahead and also creates a unique chance to enact government policies that steer the economy away from carbon at a lower financial, social and political cost than might otherwise have been the case. Rock-bottom energy prices make it easier to cut subsidies for fossil fuels and to introduce a tax on carbon. Reframing our economic purpose At a more fundamental level, the immediate reaction to the crisis has challenged assumptions about the purpose of the economy. For decades, we have put workers and natural resources at the service of economic growth. When governments chose to lockdown their economies and prioritise health, and when businesses pivoted their factories, suspended shareholder payments, diverted staff to hygiene measures, or just stopped operations, they too were recognising that business is not just about profit, but helping people survive the virus or economic crisis. No-one wants to build a more human or regenerative economy by perpetuating lockdown. But crisis might, just might, be helping to create the mindset we need for a new type of economy. Negative forces for retrenchment There are negative forces too, which will push us to retrench old ways. It is just as important to be aware of these and to navigate them. Top of my list are: Recession and government debt leading to stringency and austerity: a sense that nothing can be afforded to invest further in change. Alarming poverty and unemployment levels creating a ‘grow at all costs’ mentality, to compensate for lost earnings and tackle the recession. These forces need to be taken seriously. It’s not yet clear what the debt burden will be, or mean, for rich and poor countries. But it’s a fair bet that some will move quickly into austerity. Some governments are already relaxing labour laws or environmental regulations to stimulate business. And new money for ambitious change will be scarce. As Christiana Figueres put it, the $10-20 trillion being spent on economic recovery packages around the world will not be repeated. Millions of people have lost their livelihoods and sunk into poverty. Their needs are huge, urgent and indisputable. Social unrest over exacerbated inequality is unpredictable in its impacts. What’s more, COVID-19 has accelerated the automation of processes and replacement of humans across many sectors. Many old jobs simply won’t be returning. So the need to address under- and unemployment is rightly going to dominate. The issue is whether this demand can be channelled into a new economy, not the old. This reinforces the need to act swiftly for reskilling the workforce, and considering innovative approaches to public works, cash-for-work, cash for biodiversity, women’s empowerment, social protection, universal basic income and a host of measures that can drive an equitable transition to sustainability. Other negative forces relate to critical institutional weaknesses, which have been demonstrated and exacerbated by COVID-19. The retreat to nationalism is seen in physical borders and in mentality – each nation looking after its own. While governments have acted, global governance has been extremely weak, at a time of historic global crisis. Or as former UK Foreign Secretary, David Miliband, put it, grading the G7, G20, and UN, ‘it's D-minus territory for the international political response.” Although there is much that national governments, cities, and localities can do that is radical and inclusive, staying below 1.5 degrees will need global commitments and governance. And staying below with a just transition will most certainly require radical progress in global governance. So this negative trend may be a deal-breaker. Implications In each country, each context, each month, there will be variation in the positive forces that could enable us to reimagine and build a very different future, and the negative forces pushing us to retrench. But all of us interested in accelerating our shift to a more sustainable future need to: Exploit these opportunities to bring others on the journey – welcome those who have had their minds opened by the COVID-19 crisis Further open the new doorways – recognising they may start closing soon Rethink our pathways to sustainability to navigate these new trends. Tap into the positives, but address the negatives. My take so far is that we can be more ambitious in promoting a different type of economy, a wellbeing economy, because that has become so much more real this year. We also have an urgent opportunity to push for a faster transition to low-carbon behaviours that become permanent. But we face a bigger challenge than before in addressing inequality and poverty, so the principles of just transition are more important than ever. [i] For example, positive opportunities and negative forces in South Africa, UK politics, the economy and financial sector, sustainability in Asia, and the overall ‘build back better’ narrative [ii] Examples from South Africa and Kerala The COVID-19 crisis is having a devastating impact – both in terms of lives lost and economic disruption. At Forum for the Future, we believe that it would be tragic to go back to yesterday’s “business-as-usual”; moments of radical disruption like this provide unprecedented opportunities to reinvent the future. We are therefore calling for business, governments, civil society and communities to seize this moment in helping to deliver a more just, sustainable and resilient world. 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