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Executive Perspectives

EXECUTIVE PERSPECTIVE: Populism and Nationalism – What Does It Mean For The Climate Agenda?

Georg Kell

09 Jun 2016

A wave of populism and nationalism is currently re-shaping political landscapes on both sides of the Atlantic and around the world. The political will that has sustained an open and rule-based global economy is fracturing in a number of important countries, and the systems that were created after WWII to promote trade and investment based on non-discrimination are being hollowed out. Already regional and bi-lateral agreements are trumping multilateral approaches and trade distortions are on the rise. Nations are turning inward and building walls. What does this mean for the climate agenda?

The bad news is that populists and nationalists reject international cooperation and many of them are in denial about climate change. To the extent that they will increasingly shape national policies, this would mean a real setback for the climate agenda as much needed policy changes – such as carbon pricing and steering incentives towards green growth and investment in low carbon infrastructure – will be delayed or shelved altogether. This could easily cast a dark cloud over the Paris agreement, the successful implementation of which depends critically on voluntary commitments at country level.

Furthermore, those populists and nationalists who are not climate doubters are also bad news for the climate agenda. While they may find it opportune to make the case for climate action to disguise their xenophobia, such as Marine Le Pen who invokes some sort of “ecological patriotism” – presumably believing that the air can be nationalized – they also reject much needed cooperation. They will not hesitate to destroy whatever is left of international cooperation by imposing unilateral measures, irrespective of the damage this may cause. Rejecting cooperation in our interdependent world is not only foolish, it is destructive. Prosperity and progress are built on the pillars of interdependence; on the fundamental recognition that what connects humanity is stronger than what divides us. Turning inward will cost everybody dearly. No village, town or any city could survive and thrive if it were to draw up the bridges. We need open markets so that clean technologies and new progressive ideas can travel fast where needed most.

Anemic economic growth, rising inequality and insufficient provisions to offset the costs of technological change and a surge of refugees in Europe have clearly contributed to this political fragmentation, populism and nationalism. But more systemic forces seem to be at work as well. After all, trust in governments has declined steadily over recent years across the world, as highlighted by the most recent Edelman Trust Barometer. Digital empowerment is not only disrupting industries, it is also bringing about an inversion of authority and influence. The growing divisions within countries and the subsequent inability to enact policies based on reason and evidence has gone hand in hand with a new form of tribalism where people validate and reinforce their own opinions with like-minded peer groups. Social media and the Internet allow us to “construct precisely contoured echo chambers of affirmation that turn conviction into zeal, passion into fury, disagreement with the other side into the demonization of it”, as Frank Bruni put it in a recent article in the New York Times.

Overcoming the current governance crisis is essential for international cooperation and for supporting low carbon growth. However, climate change does not afford us the luxury of waiting for governments to get it right. Clearly, we live now in a “bottom up” world where change is not mandated from the top but where solutions are growing from local efforts and where non-state actors have an opportunity to lead through voluntary actions. Already there are enormously encouraging developments under way with cities, business and investors taking the lead. For example:

  • 17 large cities have already committed to carbon neutrality and many more are planning major efforts to reduce pollution and to invest in low carbon infrastructure.
  • 70 major companies are switching to 100% renewable energy and over 1,000 are putting a price on carbon ahead of regulatory requirements.
  • Nearly 9,000 companies from all continents are integrating sustainability practices into their strategies and operations as part of the UN Global Compact movement.
  • Over 160 companies are setting scientific targets on climate action as part of the UN Global Compact’s Caring for Climate platform.
  • Responsible and climate-related investment is rapidly growing, with over US$20 trillion now invested in socially responsible products. The UN-backed Principles for Responsible Investment (PRI) now has over 1,300 members, and stock exchanges are increasingly demanding disclosure of relevant information as part of their listing requirements.
  • It is now possible for everybody to make sure their money ‘has eyes’ and can be put to good use as new instruments combine sustainability with quantitative approaches for the retail market.

These market-led initiatives have not yet reached a critical mass to change the rules of the game. But they have the potential to do so by encouraging policy makers to be bolder on the climate front and by inspiring fence sitters to join. As evidence is getting stronger that good sustainability performance goes in hand with long-term market success, these movements are bound to grow. To bring them to a tipping point now requires citizens to engage more proactively in three important ways: First, by embracing more sustainable lifestyles and by demanding that the products and services we consume are produced by companies that are serious about reducing emissions and environmental footprints, while also treating their employees well. Second, by ensuring that money is invested not in speculative instruments or unethical practices but rather in sustainable corporations that foster the transformation towards low carbon activities. Third and lastly, by using social media to spread science-based facts and to reject dogmas of hate and divisions.

The race is now on. If businesses and citizens everywhere focus their energies on much needed solutions, then we have a fair chance of winning the race against global warming. And by doing so, we may also contribute to the restoration of the voice of reason on the political stage – thereby creating the conditions we need for good governance. The air we breathe is the ultimate public good, which does not respect national boundaries. We may just discover that the fight against climate change will unite humanity and bring forward the best in us.

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