Saving the Globe with Fusion Economics

Glacial melt due to rising temperatures caused by increased carbon trajectories will cause avalanches at high altitudes, flooding downstream, and desertification when the water runs out. Turbulent blizzards, Everest avalanches, and devastating flooding in Kashmir have brought the Himalayas into the global media spotlight this year. Scientists and economists are beginning to grapple with the serious economic and environmental consequences if we fail to reduce global carbon emissions quickly and deeply. The most expensive thing we can do is nothing. A model of fusion economics is required, merging environmental solutions pioneered by grassroots civil society, with the power of business and finance to scale solutions and reduce costs. Responding to the climate change crisis is a global priority and also a business opportunity. The Hindu Kush Himalayan Assessment spearheaded by the International Centre for Integrated Mountain Development (ICIMOD) will arguably be the most complete analysis yet of the threats this delicate region faces. The assessment will offer practical policy recommendations to help government guide businesses in joining the fight against climate change. To address climate change in the Himalayan region, scientists recently gathered for a conference convened by the ICIMOD in Kathmandu. This region has possibly the highest concentration of diverse culture and religion on the planet. If the glaciers melt and water runs out, it would be a formula for disaster. Often called the “third pole” because there is more snow and ice there than anywhere else in the world outside the polar areas. The Himalayas run through Afghanistan, China, and six other countries, all which share tense borders populated by multi-ethnic people. Failure to protect the Himalayas as a shared resource will lead to more avalanches, floods, droughts, and in turn a crisis of food, water and energy security. “The Himalayas support the lives of nearly 4 billion people. Dangerous glacial lakes can flood some areas, while drought from receding glaciers hits others,” explained ICIMOD director general David Molden who is leading the assessment. “The Himalayas are a fragile eco-system most affected by climate change. ”. The problem is down to one word – carbon. Scientists at the conference agreed that current output trajectories predict an increase in global temperatures of 3.7C – 4.8C (38.6F – 40.6F). This would push the planet past what environmentalists call the “tipping point”, when temperatures are too extreme for habitation as we know it. In street speak, humanity is on a fast track toward joining the dinosaurs. The Himalayan consensus response: total carbon output must drop, which means de-carbonisation of the energy supply, or significantly increasing zero and low carbon energy from renewables, nuclear, Carbon Dioxide capture and storage, or bio-energy. Investments in energy efficiency, insulation and recycling systems for water purification and water resource management are also imperative. Despite highly publicized joint declaration at the APEC Summit in Beijing by China and American presidents-Xi Jinping and Barack Obama on combating climate change, neither leader offered any concrete policy path that could engage business to shift toward zero carbon solutions. This is the real problem that must be addressed. Speeches are not enough. It offers a massive opportunity for businesses, and will possibly become the next engine of global growth in the two decades ahead. This is not about hugging trees, but moving markets. An expected knee-jerk reaction of businesses might be that it is not feasible to achieve these goals. The de-carbonisation of energy is practical. But that is the whole point. The analysts have failed to say what the scientists dared to speak: GDP will be minimally affected by mitigation action through replacement energy innovation, while the cost to business of non-action will rise astronomically in the decades ahead. The Himalayan consensus is all about getting businesses to realize that the short-term costs of adopting renewable and efficient energy will be far less than the long term costs of fixing the problem. Expect additional expenses to governments and businesses from a global refugee crisis caused by outward migration from those environmental disaster zones we are now creating. Moreover this global transition offers the financial sector with a potential plethora of new products to re-invigorate capital markets . They knew more clearly than the politicians making vapid speeches within the UN that combating climate change comes down to business, and ultimately the financial sector that drives it. No wonder protesters at United Nations’ Climate Change talks in New York stormed Wall Street. Protest however is not enough. It is time to bring businesses and finances into the equation. That means changing the current mindset and assumptions behind businesses. Himalayan consensus and fusion economics are about convening stakeholders from environmental and social science, grassroots, civil society, business, finance and government, in building pragmatic solutions. Combating climate change through new technologies, infrastructure investments, and financing may prove in the self-interest of business. In fact, these interests have more to gain in working proactively together than viewing each other as being in conflict. It will cut costs, create jobs, and be the next mega-trend.   Actually, they should now be seen as the innovation, research and development teams that can drive the next global growth trend – the de-carbonisation of energy. In the past, business and finance have seen environmental scientists and civil society as “those activists” who block business interests. It all comes down to the power of of changing perspectives. The most expensive thing we can’t afford to do, is nothing. Here are the consequences:

• Damage to property and infrastructure. Sea-level rise, floods, droughts, wildfires and extreme storms that require extensive repair of essential infrastructure such as homes, roads, bridges, railroad tracks, airport runways, power lines, dams, levees and seawalls.
• Lost productivity. Disruptions in daily life related to climate change can mean lost work and school days and harm trade, transportation, agriculture, fisheries, energy production and tourism. Severe rainfall events and snowstorms can delay planting and harvesting, cause power outages, snarl traffic, delay air travel and otherwise make it difficult for people to go about their daily business. Climate-related health risks also reduce productivity, such as when extreme heat curtails construction, or when more potent allergies and more air pollution lead to lost work and school days.
• Mass migration and security threats. Global warming is likely to increase the number of “climate refugees”—people who are forced to leave their homes because of drought, flooding, or other climate-related disasters. Mass movements of people and social disruptions may lead to civil unrest, and might even spur military intervention and other unintended consequences.
• Coping costs. Societies may find ways to prepare for and cope with some climate impacts—provided that we don’t let our carbon emissions continue unabated. However, even a partial accounting of these measures suggests that coping is likely to be more costly steps to reduce carbon emissions thereby reducing associated climate impacts.

For example, farmers might need to irrigate previously rain-fed areas, cool vulnerable livestock, and manage new or more numerous pests. Local and state governments that taker early steps to ensure that houses are more energy efficient, and build early warning systems for heat waves and disasters and add emergency responders are more likely to cope with extreme events. Governments may also have to build seawalls, contain sewer overflows, and strengthen bridges, subways, and other critical components of the transportation system. Rebuilding after disasters strike is likely to prove even more costly than these preventive measures, studies show. And these costs do maybe not include those stemming from lives lost and other irreversible consequences of allowing heat-trapping gases to accumulate unchecked in our atmosphere.

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