On 6 December 2012, Ecologic Institute and the German environmental publishing house Oekom Verlag co-hosted a Dinner Dialogue with Jorgen Randers in Berlin. Jorgen Randers is a co-author of the Club of Rome "The Limits to Growth" report published in 1972 and a Professor of Climate Strategy at the BI Norwegian Business School. During the dinner dialogue he presented insights from his new book "2052. A Global Forecast for the Next Forty Years".
In 1972, the Club of Rome report concluded that without major socio-economic changes humanity would move beyond the physical capacity of planet Earth in the not too distant future. In his new book Jorgen Randers offers an educated guess on what will happen in the next 40 years from now.
"Humanity hasn't been able to fundamentally tackle the problem of climate change"
The starting point for Jorgen Randers’ argument is that so far humanity has been unable to fundamentally tackle the problem of climate change. The reason for that is not the lack of suitable technology - all the technologies we would need have already been developed. The problem is neither, in Randers’ view, one of cost - the solution to the climate problem would only require a relatively small change in global industrial and economic structures: investing 2 % of world GDP in climate change mitigation would, as estimated by the Stern Report, only have the effect of reaching the same level of welfare between six months and one year later than without such investment. The real problem is, according to Randers, that democratic systems do not produce the decisions necessary to effectively tackle climate change.
Regulatory captures as a main reason for an inneffective climate change- policy
The reason behind this is that Western economies - and an increasing number of economies around the world - are based on a belief in markets. Capitalist markets, however, always favor the least-cost option. This in turn, does not favor clean technologies; they may be cheaper in the long term, but require higher investment, learning costs etc. in the short to medium term. In principle, governments could address these shortcomings through regulation. However, there are only few instances where a democratic majority has decided in favor of such regulation; usually, regulatory capture by interest groups prevents such regulation in the first place or makes sure that policy measure come with so many exemptions that they are ineffective. There are some examples to the contrary; for example, Germany and a few other countries have adopted policies for renewable energy support with a long-term orientation. The EU Commission, for some time, has been able to formulate environmental policies of considerable scope and ambition - although arguably it was able to do so acting in a democratic vacuum. However, these have remained exceptions.
"Climate policy must be removed from day-to-day politics"
On this basis, Randers drew the conclusion that democracies are inherently biased towards short-term fixes, and therefore fundamentally unable to address long-term challenges such as climate change. As a solution, he proposed removing climate policy from day-to-day politics. Instead an independent agency should be set up with a mandate to implement the necessary measures for the low-carbon transformation - much like a central bank or a constitutional court, which are part of the governance system, but independent from day-to-day politics. Of course, establishing such a body would itself be a long-term decision. Randers also suggested that the Intergovernmental Panel on Climate Change (IPCC) could play the proposed role.
A lively discussion between all participants
The presentation was followed by a lively discussion. Some of the issues raised were whether democracies are really geared towards short-termism and unable to implement long-term solutions and whether temporarily and partially disabling democratic mechanisms is politically desirable. Some of the participants questioned whether an agency could play the envisioned role: hierarchic, centralised systems may be effective, but also have a high risk of failure. Also, participants debated the role of bottom-up vs. top-down models in climate mitigation. They largely agreed that bottom-up approaches could have significant positive effects, but only if gaining sufficient overall momentum in the future.
The event was moderated by R. Andreas Kraemer, Director of the Ecologic Institute.