Context- where we find ourselves.
Humanity is faced with a unique opportunity to re-imagine some of our basic systems of trade, movement, resource distribution, production and consumption that underpin our economies globally. And then we may meet and exceed agreed sustainable development goals.
We must radically adopt new systems if we are to avoid further collapse and triggering tipping points beyond what we may recover.
Digitisation, machine capabilities and value channel transparency offer insights to options available.
In a state of global emergency with increasing risks of collapse across multiple systems, the most radical thing to do is nothing, or little or to iterate existing practice and hope for miracles or some breakthrough technological solution.
The problem is with us and how we behave, not in response to emergencies but in preparation for known future shocks.
We may seize this opportunity to pivot our economies towards meeting and exceeding agreed sustainable development goals or we may miss this brief window for change and continue to extract value, exhaust natural resources and systems and to heat the planet. We will not be offered a more opportune window for coordinated global action.
We have multitude pathways of change to existing systems that will lead us to less impact, but the risks remain high.
Democratic governments by their nature are laggards in adopting the necessary technology, systems change or climate action. Additionally government ideologies, motives and cultures differ where business competitive interests bridge geo-political borders and multiple regulatory frameworks and invariably respond to consumer demand.
The pandemic and pause in social and economic activity, allows us a moment to imagine new possibilities, new opportunities and avenues for action in what matters most to most of us; quiet enjoyment, privacy, agency and hope.
Meeting our Paris commitments and exceeding sustainable development goals calls for action; imagination, courage and leadership put to practice. This may be found first with individuals and then business before government. Individuals first making demands on supply and business response will lead the economic transition within governance systems supporting and accelerating this critical transition.
Governments rarely lead in a digitally connected globally flat economy without conflicts of interests clouding and delaying the making of decisions on existential threats. This irony creates delay but also competition; the race to the top is one of reduction; growth metrics become downward and outward.
Principles of economy - how we manage.
The economy is how we manage our constructed environment on this planet.
Time and space relate to planet Earth.
Timing and place relate to Humanity.
Everything has a life-cycle; inputs, events and outcomes over time.
There are hierarchies against which inputs, activity and outcomes may be formed and regulated.
There are boundaries; limits and finites within which these life-cycles and hierarchies exist in place.
These elements and others determine how we manage our constructed environment; our home on this planet.
Economy is about how we manage our home.
To date economies have evolved in, around and through societies over the last number of thousands of years concerned with price, and little or no definition or accurate metrics, counting or measurement of cost. Limits of resources are breeched and ecosystems degraded through the consequences and waste of exploitation; over production, over consumption and loss of value. The definition and relationships of price, cost and value are fundamental to how we design our economy
If we are to address some of the threats that we face, we must count what is important and not externalise costs.
We can imagine that this is our greatest era as humans on planet Earth. The place and timing to act is here and now.
Evolve or design. A choice
Today we are faced with a choice; to continue to evolve our economy or to design one for a future of abundance, perpetuity and resilience. Because our natural resources, the primary elements of products and services are traded globally, our economy and how we count these resources like-relevant regardless of location or jurisdiction. Metrics common across jurisdictions, designed to apply to what is globally common will help determine how we meet our agreed sustainable development goals. The elements; lifecycles, hierarchies and boundaries are different for everyone everywhere but the measure of impact and outcome must be common and understood by the commoner. The human consumer, be they private, or representing business or government, has a right and responsibility to understand the impact and consequence, the cost, implication and consequences of their procurement choices.
We must now initiate the design of our economies with common metrics that consider and count the environmental and social costs so that they we are informed if we choose to be and that we may choose to reduce these impacts.
The challenge. Economic growth
Growth in all the worlds economies is possible today only through the principal of externalities or inputs that are not accounted for or costed. Despite many and varied attempts to bring these externalities into the production-consumption equation, progress is slow and unlikely to meet agreed sustainable development goals. Additionally fragmentation, competition, credibility, engagement, adoption and practice together with cultural and idealogical differences mean lack of cohesion across these multiple response pathways further delays progress.
For the most part change proposals, top down or demands from below on government for change, result in resistance from both sides.
The evolved economy relies on push-production, externalities and waste for growth and is forcing us over boundaries towards further heating, inequality and species loss.
A designed economy, based on pull-utilisation that counts natural and social inputs, will lead us away from waste and systems collapse, towards regeneration of the natural systems we have drawn on to date.
A coherent pathway to meet and exceed agreed sustainable development goals is possible through business incentives that scale as public awareness and procurement demand grows.
Suggestion. A switch
If we switch the measure of production to utilisation in our growth based economic models (GDP; production-price supply for GDU; consumption-cost demand), and switch the metric of price to cost ($ to outcome), latent value may be released throughout production, trade and consumption lifecycles allowing growth in the utilisation of products and delivery of services (less resource consumption equates to higher value retention). This will incentivise design, utilisation, retention and cycling of resources; the circular economy in pursuit of resource utilisation, longevity and zero waste.
Consumption-cost demand metrics (vs production-price supply) will require less government involvement and regulation and so require lower costs, taxes or delay. Competitive market motives will drive production, design, resource distribution, trade and utilisation which will free up resources to meet growing demands from growing populations with lower cost/impact on our natural systems and greater social outcomes that meet needs, expectations and aspirations.
Risk. Human agency.
Species are being lost today with cultures, stories, songlines and dreams for our future. People and places are being lost to the rising heat and the sea. Our greatest risk is that we delay action any further. These common threats call for common responses. Action is delayed through fragmentation and competition amongst those calling for change.
Imagine an alternative or counter economy that enables competitive cycles towards, through and beyond zero emissions and in so doing, more equitably distributes resources and opportunity? Agency, the freedom of informed choice and clarity of cost, may be socialised like a virus amongst communities and through business value chains to initiate meaningful action. To avoid fragmented approaches and present a unified response, new economies need new currency.
Today we may choose to design our economies to manage our home, our place on planet Earth. Or we may choose not to. A new currency, the mechanism of exchange, must account for social and natural inputs that to date
have been considered externalities. Circular, doughnut, regenerative economies need a common currency.