Surviving 2022 is a blessing

We survived 2022—a remarkable achievement considering that we had war, inflation, recession, natural disasters, food, and energy shortages all in one year.

Moreover, 2022 world population exceeded eight billion, with another billion in 15 years’ time. By all accounts, this was a year where the burden of human and natural disasters fell mainly on the poor, in terms of both health and wealth. Not surprisingly, anger is erupting in many parts of the world.

Before the survivors count our blessings, we have to contemplate how to survive a warmer future as temperatures continue to rise. The global climate conference COP27 that ended in Egypt last month basically confirmed that without rapid societal transformation, there is no credible path to a 1.5-degree Celsius future. Every fraction of degree change will cause more weather change, bringing droughts, rising seas, storms, and extreme weather that will harm humans and all living things alike.

At the heart of the social transformation debate is money—who will finance the tough complex system transformation? COP27 agreed on a “loss and damage” fund for nations most vulnerable to the climate crisis, but that is only putting salve on deep historical wounds. The planet is still burning whilst the leaders keep on fiddling the numbers.

First they deny it, and now they squabble on who is going to pay for it. For the energy transformation alone, COP27 agreed that “$4 to $6 trillion a year needs to be invested in renewable energy till 2030—including investments in technology and infrastructure—to allow us to reach net zero emissions by 2050.” These numbers do not include that $160 billion to $340 billion annually by 2030 for adapting to climate change.

Not surprisingly, the key word this year for corporate leaders is “resilience.”

It’s a no-brainer that with increasing complexity, adversity, and escalating risk and losses, adaptation, mitigation, and preparing for shocks is a must.

However, nation-states are hamstrung by geopolitical rivalry into collective action traps, which explains why despite huge efforts by multilateral bodies such as the United Nations, academia, and concerned citizens, we cannot get even carbon markets to work.

The business sector has woken up to its social responsibilities, but it will not invest in long-term energy and supply chain transition to net zero without some assistance from the state in terms of regulation and funding.

In short, the consortium of state, business, and international bodies remains trapped by not being able to act because everyone is waiting for the other to act.

This leaves the bottom half of society being simultaneously the victims of climate disaster, and yet, at the same time, the possible saviors if they can mobilize themselves to deal with their local issues that will change the narrative.

Logically speaking, if the masses make themselves resilient, they could compensate for fragility of the concentrated few. But mass movements can only occur if there is a mindset change from the unsustainable status quo.

Despite the pessimistic outlook, my optimism tells me that localized human and natural disasters are forcing mass mindset change at the community level. All politics is ultimately local.

“The Black Swan” author Nassim Taleb argued that conventional thinking ignores small events that have huge impact. To him, resilience is too risk-adverse, whereas the bold opposite of fragility is “antifragility.”

The antifragility logic suggests that the real solution out of climate disaster is less about ideologies such as “democracy versus autocracy,” but more about diversity versus monoculture.

Climate change affects the seven billion poorer people in the world more than the rich one billion. Whilst the rich one billion controls most of the wealth, they will not be “resilient” if, by 2037, the eight billion remains poor and battered by climate disasters, whilst the rich think of migrating into space.

Thus, the rich countries will serve themselves better by being bold to fund the many in the poorer countries to help themselves in diverse experiments to deal with climate warming at their own local areas, rather than grand schemes that only benefit big corporations from big projects.

Winter is already here. To survive the past is always a blessing. Not to act in the face of coming disaster is our perennial curse.

Season’s greetings to all.

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Andrew Sheng is a former chair of the Hong Kong Securities and Futures Commission.