This paper explores these issues and ways that paradigms and concepts are shifting – providing new strategies, models, academic approaches and new institutions and enterprises in public, private and civic sectors worldwide.
Humans are changing Earth systems in many ways: from changing its climate, atmosphere, acidifying oceans, pollution affecting human and biodiversity health. Our still-multiplying 7.5 billion population may reach 10 billion by 2050 and now consumes almost 40% of the planet’s biological production (photosynthesis). Our new era of human global intervention has been termed the Age of the Anthropocene best illustrated (Figure 1) by the space junk orbiting our planet and causing many collisions with still-functioning satellites relaying our information and observing Earth’s daily change processes in real time. The billions that need to be spent to clear this space junk is a good illustration of faulty paradigms in economics and management models. Yet humans have capabilities to effect positive restoration of their damage: for example since the UN Montreal Protocol of 1997, the Earths’ ozone layer is now recovering (“Atmospheric Healing,” 2014).
Computer models are still uncertain about the timing and extent of human effects on Earth’s climate and biosphere – as well as the projected growth of human populations. One computer model shows that empowering the world’s women with solar energy for lighting and cooking while providing micro-financing could result in 3 billion avoided births (Khosla, 2009). The shift to low-carbon technologies is accelerating as Ethical Markets reports in our Green Transition Scoreboard® with $5.7 trillion now invested in green sectors worldwide (Henderson, Sanquiche & Nash, 2014).
The IT Digital Age and pervasive automation of ever more sectors of industrial societies provides many opportunities: citizen participation, MOOCS, innovation, collaborative economy, small businesses, NGOs, sharing-caring, planetary awareness. There are many new challenges: fewer jobs, low wages, inequality, restructuring economy, managing the epochal shift from atoms to bits. Broadly shared goals: knowledge-rich, inclusive, equitable green economy designed on Life’s Principles and Earth Systems Science, were agreed in Brazil at the UN Summit – Rio+20 in Rio de Janeiro. The UN Climate Summit in New York, September 2014, was met with 400,000 citizens demanding progress, with similar public demonstrations in many cities around the world.
Human societies are experiencing an accelerating shift from the fossil-fueled Industrial Era of the past 300 years to the Information Age powered by the IT revolution and based on more scientific knowledge and harvesting renewable energy from the daily free photons from the Sun. In The Politics of the Solar Age (1981 1988), I described the great transition of societies from the fossil-fueled Industrial Era to the information-rich Solar Age. My firsthand experience of this great global transition was as a science policy advisor at the US Office of Technology Assessment Advisory Council, the National Academy of Engineering and the National Science Foundation from 1974 until 1980. I learned that if the USA had subsidized efficiency, solar and renewables, at the same level that it subsidized coal, oil, gas and nuclear, the USA would have been powered 100% by renewable energy by the mid-1970s. The chief reasons for the perpetuation of the earlier, inefficient industrial processes and fossilized sectors were due to the increasingly powerful, entrenched corporations and financial interests. For example, in Korea’s chaebol structure, there are risks these companies which dominate the Korean economy face with sudden restructuring due to internal conflicts, captive boards, lack of transparency, governance, as fully discussed in Corporate Sustainability 2013 Korea. These issues are present in most countries, in many forms. These diverse, global, powerful industrial groups’ influence and money which capture politicians and regulators are abetted by narrow economic theories which still allow external costs to the environment and societies to be ignored in business and government accounting models. Independent research groups, including Global Financial Integrity, Tax Justice, BankTrack, Transparency International, AccountAbility, RepRisk, Social Accountability International, now hold these large corporations accountable with reports in media. These drive UN agencies and others including the OECD and chambers of commerce to greater efforts.
The economics profession itself became too powerful, dominating academia and leading to devaluing of other disciplines and research vital to a fuller understanding of national development. An example of this has been the dominance of money-based indicators and GDP, now being corrected by broader measures (Figure 2 Moving to Correct GDPs). Narrow, special interest policies such as those of economists of the University of Chicago, emanated from the USA and distorted the development of many countries in Latin America, leading to coups of democratically elected leaders such as Salvador Allende in Chile and others documented by economist John Perkins in Confessions of an Economic Hit Man (2005). Korean economist Ha-Joon Chang documents in Bad Samaritans (2008) how the domestic policies of many countries were perverted by neoclassical economic ideologies at the World Bank, the IMF and other agencies.
The turning point in the energy transition occurred in 2012 as I documented in Mapping the Global Transition to the Solar Age (2014). Climate change realities became accepted by scientific evidence by 191 member countries at the UN Rio+20 Summit in Brazil. At the same time, the carbon trading regime set up in Kyoto in 1998, influenced by economists and global financiers, failed to reduce CO2 emissions and led to the “blame game” at the UN-FCCC Summit in Copenhagen in 2009. Ethical Markets Media released its first Green Transition Scoreboard® (GTS) showing that already since 2007, private investors had over $1.5 trillion in growing green sector companies. This was aimed to show the reality already occurring of the shift to the next energy basis of human progress as the renewable, knowledge-rich, green economies of the Solar Age (Figure 3 Annual Solar Irradiation). Beyond arguing about carbon emissions, all countries could actually agree on the need to accelerate the shift by investing in low-carbon technologies, and our GTS showed that the private sector was leading the way. Governments began responding at the Rio+20 summit and pledged to phase out their subsidies of fossil fuels which total almost $500 billion annually. However, these subsidies are protected by powerful producers, and when cuts are made to consumers they can cause hardships to the poor and often result in protests and demonstrations.
The incumbent industries and their political allies fought back to keep their subsidies and their politicians in power. Abetted by the global financial sector and its huge investments in oil, gas, coal and nuclear, money poured into electoral politics in many countries, worst in the USA with the 2010 Supreme Court Citizens United decision which opened the floodgates. Regulatory capture was reinforced by cognitive capture by economics and the theory-induced blindness it caused among politicians, academia, mass media and misleading of public opinion with advertising. Control of media and news content by the over $500 billion spent annually worldwide by advertisers has led to the phenomenon of “mediocracies”, e.g., media is predominant over whatever form of government (Henderson, 1996, e-book 2008). Meanwhile, the energy transition similar to earlier shifts from wood, waterwheels, windmills to whale oil, coal and petroleum was occurring at Seven System Levels (Figure 4). The information revolution and the Solar Age are simply the next phases of human evolution.