Getting a Grip on Climate Change
If 97 percent of climate scientists agreeing that climate-warming trends over the past century are due to human activities isn’t compelling data, I don’t know what is. – Sir Richard Branson
How can Impact Funds scale quickly and help transition to a truly sustainable condition for the 21st century and beyond?
How can managers of the permanent capital base –our pensions, insurance and endowments, fulfill their mandate to provide cash flows forever?
There are various questions here that are of fundamental importance, while others are localized and particular about one or another technology or approach, regarding climate change and what can be done.
The fundamental questions have to do with how much can be expected —under reasonable assumptions, to have material impact on both transitioning to a renewables based economy (from a huge carbon bubble) and, to reduce emissions fast enough, to remain in the 2C max of temperature rise.
The fundamental questions have also to do with the financial system, which acts as the fundamental infrastructure piece that aggregates and distributes resources. This system is currently deeply biased in the selection of goals by very short term signposts, leaving the managers of the permanent capital base (apparently) no tools to fulfill their super permanence fiduciary duties.
The only true answer we have at present is that this climate change goal is possible only if the “growth imperative” is abandoned as many models show. It comes down to thermodynamics and the heat we produce and trap in the atmosphere.
The only true answer for the financial system is to develop a private equity model that is not guided by the valuation of “exits”. It comes down to the nexus of real assets and cash flows negotiated in fiduciary conditions, and co-created by doers and long term capital and impact capital investors way before external factors have an accepted price.
But are we ready to do that? And what is the alternative?
Most scenarios show some slowing in the rate of increase of global warming, but as long as a geometric rate of heat increase in the atmosphere is at work, the consequences at the scale we live and operate will take us way past the 2C in the very near future. The dynamics past that point are deemed to be irreversible and catastrophic, right?
The continued reliance on capital markets — that depend on the ability of putting a value on cash flows, make it impossible to build in long term and other cross-linked considerations of high value but which cannot provide a clear indication of price. The dynamics point that all we are able to do is a less aggressive extraction, yet one that inexorably destroys the ‘commons’ — the biosphere, the oceans, life forms, albeit at somewhat slower rates, correct?
We are in the Anthropocene as authentic carbon— and in consequence growth —junkies. We have shown from modest to utter incompetence to act at scale with agility. For the most part, we prefer to leave the future to deal with the future. But what we fail understanding, is that to a large extent that dreaded future is already here.
Brazil, Indonesia, etc continue to massively chop down forests in ways that they are not replaceable. China has blown emissions (Green House Gasses) through the roof, massively offsetting any improvements elsewhere. But this is not without the massive help of the western investors and consumers through their evaluation patterns and consumption habits.
The targets and commitments of nations don’t add up to what is needed. The piecemeal approach is not enough. Business as usual will not cut it.
Sadly but not inevitably, there is a notorious lack of a systemic approach to massively redesign cities, subdivisions, farming and the human needs for energy and materials, which threaten the continuation of life as we know it for biosphere, oceans and all life forms.
What to do?
“The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark.” ― Michelangelo
A “military brand of fiduciary” could be expressed as the absolute trust in a body to address extreme complexity (and often under time pressure) national security matters. But there may or may not be uniting, grassroots alignment, and that makes a huge difference. No war effort has had the massive overall impact on productivity as WWIIhad (no such shared cause has appeared since. )
Can climate change be it?
I don’t think a “war for climate” is a good battle cry — at least not yet. And when it became so, it would likely be far too late. The reinforcing effects of this play out like “boiling frogs” (which Tom Murphy calculates we are doing at a 2.3% per year), and this builds up in the atmosphere at a rate that does not allow common sense to pick it up.
A main issue with the ‘growth’ model -of winners and losers- is that ‘timing of the entry’ , ‘first movers’ , kills all momentum. There is no ‘flow’ in such system; power positions are based on ‘blocking’ and not on doing (“professional doubting” is too easy when there are many options to suggest there may be more to come, better ones, anything but working with what is at hand.)
The lesson of ‘flow’ in contrast, like during WWII, is that anything and everyone works, and that 100X or even 1000X is just simply possible. Analytically, ex-ante, it cannot be proven that the pieces at hand are the right ones, etc., yet in ‘flow’ these simply become. Buckminster Fuller used to speak of the TrimTab — that little bit that can turn the huge inertia, as that factor which can make a difference.
The error we all are prone to make, is in thinking one can “manage” complexity — one runs out of resources quite quickly in this way — even if you have a lot (be it water in Brazil, oil in the Arab world, or even innovation in the USA).
Jaime Lerner, the three-time mayor of Curitiba, also provides us with a huge lesson of what it means to “engage” complexity instead of attempting to manage it, in his model of the continuous charrette, said:
“It is not a question of money. If you want creativity, take one zero off your budget; if you want sustainability, take two zeroes off your budget.”
Let’s Be Ambitious in the Extreme!
Scan. Focus. Impact!
Bryan Johnson asks the right question: “what can be done at the OS level?”
A group of us got together in 2014 with a shared intention to do something about these kinds of systemic questions, and decided to form a new enterprise called Aurora Impact. Our aim is to build on more than three decades of complex cross-sector innovation work, to conduct an ongoing ventures generation process and to create a fiduciary spaces more likely to generate impact at scale.
Aurora Impact is designed to primarily serve: impact-driven cities and regions in search of resilience; enterprise leaders and entrepreneurs creating products and services with systemic impact potential; and, permanent capital base stewards and impact investors with a capacity to invest for long term regeneration and sustainability.
The originators of this process in the 1970s, Matt & Gail Taylor in the U.S., called it the “Worthy Problem Method”. As the number of practitioners of this method grew, in a “Value-Web”, they came to refer to it simply as the “Taylor Method”. Rather than fixate on any “label”, the Taylors stay focused on the work, which must remain organic, adaptive, emergent, and ever evolving, as in nature
The proposition of Aurora Impact is that given a good question:
…whatever pieces it puts into play, these will generate the order of magnitude gains and lower failure rate when doing so, and they likely will have ripple effects that are disproportionate…. and for this to work no new great breakthroughs in invention are needed as a precondition, yet the inductive quality of the process will emerge new answers at scale and with agility.
This is the grit in our story. Let’s construct fiduciary spaces for conducting continuous charrettes that might be applied to de-construct and re-construct the biggest challenge of our time, this whole question about climate change.
Impact
We are currently looking for the right cornerstone investor(s), who share our deep interest in, and strong desire to take action on, these systemic questions. A handful of cornerstone events in 2015 will launch “Sustainability Enterprises” in five countries across four continents, which will enable the exploration of synergies across the nexus of energy-water-food-land-oceans-jobs-cities-finance.
The SoCal Sustainability Enterprise will begin with an event planned for early 2015 in San Francisco. The Sub Saharan Africa Sustainability Enterprise has a planned start at the World Expo in Milan in June 2015 with an impact investment forum. This will coincide with International Widows’ Day, and will explore the scaling possibilities of the Food & Water Awards finalists, together with a number of highly influential entrepreneurs, corporations and investors.
Six locales in development
Los Angeles • Rotterdam • Tampere • Riga • India • Sub Saharan Africa
Contact us (@ contact at auroraimpact.com) to find out more. Become part of the thinkers, doers, funders and stewards to begin…
