WEF, Oxfam, CE, ECB & British Institute of Actuaries document Collapse … Unbearable Interoperability … Blueprint ZERO … World of Wisdom Podcast
Edition 23 | January 2024
Welcome back in 2024, we are just ending the big ‘reports and predictions’ month. Have you already bookmarked your ‘7 things to not miss’ or ‘5 issues to watch out for’ for this year? I am actually on a social media detox for the first half of January. I then let Davos pass, where the haves speak about the have-nots and how AI can help to fill the purses of the consumer barons even more.
I start to pull my thoughts together afterwards. Readers of the Lighthouse Keeper Newsletter know about my way of seeing developments from the collapse-acknowledging perspective, focused on new insights for post-collapse readiness. So, let’s use this first edition of the 2024 Lighthouse Keeper to observe what we see now and to spread some light for some new exciting opportunities to proceed without losing more energy of what can’t be avoided any longer. May it be helpful, as 2024 is the year in which half of the people on this planet are called to vote in their countries. Enjoy the usual run-through!
How the WEF, Oxfam, Circle Economy, the ECB, and the British Institute of Actuaries document Collapse
WEF Global Risk Report
Last week’s Sunday Thought on ‘How risky is the WEF Global Risk Report – wrong perceptions, wrong timelines and wrong priorities’ had a stunning resonance with tens of thousands of views, around 280 likes and about 50 shares. In the meanwhile, as we all know of our polycrisis, in which all is connected, we realize that a set of wicked problems in themselves, are now culminating into a ‘wicked conundrum’ altogether. This got me to the point that I think collapse ‘avoidance’ is a waste of time, given how far we are ‘over the cliff’ and where all I see is the desperate looking out for the biggest parachutes while we fall. I only wished those parachutes would be given to those that really help to make the fall as smooth as possible for all. But that’s not what’s happening.
For me, the WEF Global Risk Report is the first corporate dissonance check of the year, as well as a perception level check. Its presentation gives hints where the biggest gap lies: the differentiation between short-term risk and long-term risk is deeply flawed! It shows most environmental category risks to be on top of the long-term risk list, while they are the reason for many (if not all, if you drill deeper) short-term risks. And as you now saw, the Davos agenda this year was then consequently dominated by AI and wars, not so much about climate, biodiversity and resource disasters.
What should be different from a collapse-acknowledging perspective? I think what’s really necessary as a clustering is the ‘remaining timeline for necessary action.’ And for most environmental risks it is NOW, or better yesterday. But as the past is the past, NOW is all we have. But no, we continue to give in to the illusion of second order urgencies, as ‘first things first’, and that’s always something else than the long-term (environmental) risks.
Another reason is that these short-term risks are ‘weaponized’ by some for their favour in our hyper-competitive world, as Steve Faktor points out. The WEF Global Risk Report is a manifestation of the Collapsology playbook 1:1. It causes delay of tackling root causality, pampers our continued illusion of separation, and describes interdependencies, but real root causality is blurred. The report is an outpouring of ‘anthroposupremacy’ instead of ‘ecolibertarianism’ (terms coined by Jem Bendell in ‘Breaking Together’) … as the whole WEF is! Summing up, long-term risk clustering is nothing but a continued externalization booster, and we all know what that means in a closed system. Exactly, it means collapse!
Oxfam – Inequality Inc. – Report
Also released in Davos was the newest Oxfam Report ‘Inequality Inc.’, in which they state: ‘The world’s five richest men have more than doubled their fortunes from $405 billion to $869 billion since 2020 —at a rate of $14 million per hour— while nearly five billion people have been made poorer. […] If current trends continue, the world will have its first trillionaire within a decade but poverty won’t be eradicated for another 229 years.’ Oxfam’s International interim Executive Director Amitabh Behar commented: ‘We’re witnessing the beginnings of a decade of division, with billions of people shouldering the economic shockwaves of pandemic, inflation and war, while billionaires’ fortunes boom. This inequality is no accident; the billionaire class is ensuring corporations deliver more wealth to them at the expense of everyone else’. […] Runaway corporate and monopoly power is an inequality-generating machine: through squeezing workers, dodging tax, privatizing the state, and spurring climate breakdown, corporations are funneling endless wealth to their ultra-rich owners. But they’re also funneling power, undermining our democracies and our rights. No corporation or individual should have this much power over our economies and our lives —to be clear, nobody should have a billion dollars”.
The report also clearly sheds light on the Global Minority / Global Majority divide: ‘Despite representing just 21 percent of the global population, rich countries in the Global North own 69 percent of global wealth and are home to 74 percent of the world’s billionaire wealth.’
It’s not that anything surprises me here, this is the ongoing manifestation of our current economic system ‘exsanguination’ of humanity for the sake of the monopolistic club of Draculas. Continued colonization of the Global Majority and keeping a bit of privileged lifestyle in the Global North, where the Global Minority still flies to vacation destinies, eats imported food from the other side of the planet, and watches disaster films on their favourite paid online channels.
Where I do struggle with is what Oxfam recommends as solutions. They look at three different players, as they state in the press release:
- ‘Revitalizing the state. A dynamic and effective state is the best bulwark against extreme corporate power. Governments should ensure universal provision of healthcare and education, and explore publicly-delivered goods and public options in sectors from energy to transportation.’
- ‘Reining in corporate power, including by breaking up monopolies and democratizing patent rules. This also means legislating for living wages, capping CEO pay, and new taxes on the super-rich and corporations, including permanent wealth and excess profit taxes. Oxfam estimates that a wealth tax on the world’s millionaires and billionaires could generate $1.8 trillion a year.’
- ‘Reinventing business. Competitive and profitable businesses don’t have to be shackled by shareholder greed. Democratically-owned businesses better equalize the proceeds of business. If just 10 percent of US businesses were employee-owned, this could double the wealth share of the poorest half of the US population, including doubling the average wealth of Black households.’
Phew, so those that are most involved in the problem creation are asked to now solve it all? As long as governments are generally lobbied by strong corporations/industry associations, and shareholders do anything to receive the majority of the gain of the exploitative status quo from the corporates (while the civil society movement is too weak to break out of these colonial and abusive strait jackets), these mentioned solutions sound like devout prayers in a gambling den! Is there really so little fantasy to accept that the existing economic system design will need to be hospiced in order to allow the midwifing of a new just, fair and proportionate approach first? But no, Oxfam wants this all to happen in the existing system they criticise. Not gonna happen!
Circular Gap Report 2024
Also coming out in January every year is the Circular Gap Report, now in its 7th edition. The report clearly states the status quo: ‘The vast majority of extracted materials entering the economy are virgin, with the share of secondary materials declining steadily since the Circularity Gap Report began measuring it: from 9.1% in 2018 to 7.2% just five years later in 2023. Meanwhile, the total amount of materials consumed by the global economy continues to rise: in just the past six years alone we have consumed over half a trillion tonnes of materials—nearly as much as the entirety of the 20th century. These statistics display the cold, hard truth: despite the circular economy reaching ‘megatrend’ status, lofty speeches and targets are not yet translating into on-the-ground actions and measurable impacts. Without bold, urgent action to shift to a circular economy, we’ll miss out on achieving broader social and environmental goals—ranging fromemissions reductions to boosting the use of secondary materials—putting industries and governments at risk of sleepwalking into circular washing and missing out on much-needed impact.’ Phew, does that sound like progress?
Now let’s look at the solutions offers. The report prides itself by saying ‘ In this year’s Report, we shift from exploring the what to the how: exploring the different ways that we need to ‘change the rules of the game’ and create a set of conditions that discourage the overshoot of planetary boundaries and ‘undershoot’ of human development. This process has resulted in us spotlighting 12 of the original 16 solutions, highlighting the country profile that they are most relevant to, as well as placing people at the centre of this story for the first time.’ That sounds promising. ‘To walk the talk, governments and industry must break free of flawed development patterns that continue to fuel industries and practices known to be socially and environmentally exploitative.’ That sounds even better. ‘They can do this by unlocking capital, rolling out bold, contextually-appropriate policies and closing the sustainable and circular skills gap. […] This Report aims to show governments and industry leaders that if they want to turn theory into action and scale an economy that delivers on needs within the safe limits of the planet, they need to dismantle harmful entrenched processes and align enabling elements:
- Create a level policy playing field: Set the ‘rules of the game’ through policies and legal frameworks that incentivise sustainable and circular practices while penalising harmful ones, thereby shaping the nature and scale of economic activities across industries and nations.
- Get the economics right: Adjust fiscal policies and leverage public investment to create true prices and ensure that circular solutions become more valuable instruments and begin to replace linear norms.
- Build circular expertise and skills: Ensure people are skilled and trained to ensure a just transition where opportunities and decent livelihoods are fairly distributed across and within societies.’
Well, now I get the same vibes as with the Oxfam Report. While all of that sounds great as objectives of the ‘where-to’, it does not explain the ‘how-to’! And that involves a proper understanding of the dynamics and road blocks of the polycrisis. My fear is none of that will happen at any scale as long as the current economic system dynamics prevail, and with expected voting outcomes this year towards nationalistic and right-wing outcomes the status quo of the ego-nomy will only lead to more cocooning of the ‘me first’ mindset. As much as I wished for the success of these ‘solutions’, they will be overthrown by the realities of shortage of all sorts of ‘supply’: resource constraints, logistical constraints, price constraints, political constraints, war-related constraints and more hollow mindset constraints. Not gonna happen.
So, the conclusion of the report sounds like a tale from ‘Alice in Wonderland’: ‘A future-proof system must galvanise wellbeing by funnelling materials into industries and practices that lift people up and repair the damage done to the ecosystems upon which we depend, while degrowing harmful ones—especially in higher-income countries. […] To achieve global wellbeing within planetary boundaries, we must prioritise circularity-based development in lower income Build countries, promote circular industrial processes in Grow countries and shift consumption patterns in higher income Shift nations.’ I would agree, if we still had the 40 years that we wasted despite all knowledge, had the political leadership of some of those that were wise enough to stop the Cold War, and the company leaders that were willing to put rightsholders above shareholders and would tell their industry associations that ‘working for the weakest part of their clientele’ is a wellbeing killer for all. But we don’t have them!
ECB – Risks of Misalignment with EU Climate Objectives – Report
A new report by the European Central Bank (ECB), finds that a staggering 90% of European banks have loan books misaligned with global climate goals and the EU’s 2050 climate neutrality target. Although 72 of the 95 banks have made a net zero commitment, 93% of these are not yet aligned with a pathway to achieve this goal.
‘The chart below illustrates that, among the 95 significant institutions analysed, a staggering 90% are found to be misaligned, with varying levels of exposure and misalignment. All of these banks could experience transition risks, primarily in the form of elevated credit risk, as the competitiveness of the corporations to which they provide credit would be reduced, leading to potential credit losses as a result of the higher probability of default. Additionally, seven in ten banks are exposed to elevated legal risk, as they have committed to the Paris Agreement, but their credit portfolio is not aligned with it. Moreover, some of the most misaligned credit portfolios have a relatively high exposure compared with their CET1 capital, suggesting a potential impact on solvency for the credit-issuing institutions.’
British Institute of Actuaries – The Emperor’s New Climate Scenarios – Report
This ECB assessment falls in line with and adds additional reasonings from The British Institute of Faculties & Actuaries(University of Exeter) who just issued an alarming report, ‘The Emperor’s New Climate Scenarios – Limitations and Assumptions of Commonly-Used Climate Change Scenarios in Financial Services’. Here’s a screenshot from the report:
Umair Haque picked up on the research, translating it into the alarming gist of the report: ‘If someone told you HALF of our global economies would be destroyed due to climate change, would you believe them? Well, the research doesn’t lie. We’re on a collision course, and this is a data-driven reality check. New research from a group that’s the antithesis of “alarmists”—The British Institute of Actuaries—just dropped a bombshell. They have zero motives to exaggerate. Their take? We’ve SEVERELY underpriced climate risk. Recall the 2008 financial crisis? Dubbed a ‘Minsky Moment’—a crash where asset values weren’t what they seemed. Now, climate change is steering us toward a “Climate Minsky Moment”. Assets worldwide are OVERvalued because climate risks aren’t properly accounted for. Scenes we’re witnessing—megafires, towns incinerated, Antarctica melting at alarming rates—are events theorized for 2050. Yet, here we are in 2023. Earth’s warning sign: Our current models? Way off. So our current crises were predicted for 2050. We’re living the future. The craziest part is, we’re still relying on economic models see just 2% GDP drop for a 3°C rise. Reality check: we’re at around 1.5°C and the toll is massive. Our modeling needs a serious reboot. In fact, many models assume GDP growth in a “Hothouse Earth” scenario. Widespread crop failures, water scarcity, and town-leveling events somehow lead to growth? The Institute of Actuaries highlights the glaring flaws in such projections. Historically, civilizations can’t bear a 50% GDP loss. The stakes? Our very existence. This isn’t a drill—it’s a clarion call for our age. The real threat of civilizational collapse is closer than we think. Act now, or our future might be history.’
The Sum Of All Parts
These reports and all those mentioned around the State of the Climate in edition 22 of the Lighthouse Keeper leave me with one result: we’ve reached the end phase of collapse. A collapse that slowly started when we crossed the Earth’s capacity in December of 1972. We got push over the cliff and are falling. The struggles we now see is the fight for the biggest parachutes, not allowing we all land on an air cushion. We see the fight that some think they are more equal than others. Some think they’ll still find escape routes, while there are none.
I’ve observed this for many years, I have left the usual circus of ego-nomists, have mourned the developments, went beyond grief and decided to fully spend my energy on those parts of the activity spectrum that will still be needed as ‘post-collapse readiness’. Anything else? I will still be commenting to help debunk what needs to be debunked, and hoping to win the interest of many more for the work that’s necessary to do now in that realisation of collapse.
Interoperability Mapping Tools
Our UNSDPI Training is one of those topics that will be needed, as it documents performance (of all sorts of players on all levels) to stay within carrying capacities. These are measured by putting organizational performance in comparison to allocations, based on thresholds. There’s no other concept to prove System Value Creation. On a monthly basis we train 10-20 experts, just to again and again perceive how the irresistibility of this approach landed with the participants, their testimonials are stunning, see here for training options and those testimonials.
A part of the training is a Standard Setters Deep Dive Gap Analysis. It is debunking ‘Fort Interoperability’, this unbearable creation of a myth that it’ll need 3 standards to say anything about sustainability, while nothing they do delivers. Instead, more and more and more of tables, guidance, comparison sheets and press releases are thrown at all the desperate reporting officers. More than 1.200 pages in total. I think the visual below speaks for itself. Or, for a specific case, my colleague Bill Baue’s ranton the interoperability considerations for Greenhouse Gas Emissions when applying GRI Standards or I?SB Standards.
But what can you do if you are required to report according to the ESRS or the ISSB? During the training we also offer how to use the UNSDPI in an authentic way setting context-based targets, budgets, and derive at policies, strategies and activities in line with the allocations that help to define if the performance stays with carrying capacities, and how transition plans can be set up accordingly. Most importantly, this approach also builds an anti-greenwashing shield, now that we reached the age of litigation. Come and join authentic sustainability reporting, and detox from the toxic brew of Fort Interoperability!
Another post-collapse readiness clarification that’s so urgently needed is an updated vision of the sort of economy that may help preserve whatever remains to be midwifed into life for all. As r3.0, having developed on a set of nine Blueprints in what we called ‘Work Ecosystem Generation 1’ from 2015 -2022, we are now embarking on probably the most important project of our 12 years of existence, we call it ‘Blueprint ZERO – Just Transitions to Regenerative Economies and Cultures.’
Here’s a sneak peak of what that entails: ‘Robust evidence supports the analysis that current predominant human economies and cultures are “violent & unsustainable” (Andreotti 2021) and thus not future-fit. Transforming from the half-century status (Global Footprint Network) of “overshoot & collapse” (Meadows et al 1972) requires paradigm shifts (Kuhn 1962) in both economic system designs and cultural norms (Centola et al 2018). And from an ethical / human rights perspective, it is imperative to apply a Just Transitionapproach.
This project will ideate a Blueprint for regenerative economies and cultures by synthesizing crowdsourced input from experts across a broad spectrum of alternatives to the status quo when it comes to economies & cultures – including regenerative economy & cultures, restorative economy, doughnut economics, indigenous economics & cultures, solidarity economy, ecofeminist economics, ecological economics, degrowth economics, common good economics & culture of the commons, wellbeing economics, decolonial economics & culture, post-development culture & economics, bioregional economics & currency, prosocial economics & cultural evolution, and multicapitalist economics (among many others).
We are inviting a set of working group members and the world’s leading economists with a proven track record of ‘getting it’ to work with us on Blueprint ZERO. The outcome will build the basis of the second generation of r3.0 Blueprints, and – we can always rise to the occasion – governments that will finally be listening. Here’s our call for support and participation.
Another activity that I really look forward to is the first ever r3.0 Transformation Journey Program in Germany, our 8thrunning globally. We have 3 seats left for those interested in a thorough and systemic understanding what collapse and post-collapse readiness means for the individual, for organizations, for regions and industries and portfolios, as well as for economic, ecologic and social system design. We are proud to organize this Program in March and April (2 x 4 days) together with B.A.U.M. e.V. and Greensign in a great surrounding and location in the Harz region. More info needed? See here.
World of Wisdom Podcast
Finishing up this edition of the Lighthouse Keeper, I’ll invite you to Amit Paul’s podcast ‘World of Wisdom’. Seems like I have been guest number 207 ;-). Here’s how Amit described the conversation we had: ‘We spoke of the work r3.0 is doing and about regenerative transformation. We spoke of the evolution of the field of sustainability, what it means to regeneratively redesign, as well as the flaws (and what r3.0 has done to amend them) of the current discourse on sustainability. We also spoke of the topics of post-collapse readiness, the connection between micro and macro, bioregionalism, membranes, boundaries and measurement. This is a rich conversation for beginning to understand what a regenerative economy could contain.’ Here’s how to get to this episode.
In case you missed one or the other Sunday Thought, here are those that got released since the last Lighthouse Keeper:
A Sunday Thought (#75): ‘Calling Emergency’ – and no ambulance available (January 7, 2024)