Davos 2020 and a House on Fire
Last year thousands of heads of government, business leaders, NGO leaders, activists and others attended the World Economic Forum leadership summit at Davos Switzerland in order to discuss solutions for the world’s problems, and were famously told by Greta Thunberg that the house is on fire, and climate change actions are woefully insignificant. One year later, at the 50th Davos summit, Greta and other climate activists have arrived with a unified message: our house is still on fire. Today, on the last day of the summit, let’s review what happened at Davos and understand both how radical a shift this summit was and yet how much work still needs to be done.
The theme of this year's summit was reshaping and reinventing what it means to be a company, in order to create a better kind of capitalism. The Davos 2020 Manifesto outlines for the creation of what’s being deemed as Stakeholder Capitalism, a 50ish year old idea that is finally starting to be taken seriously. In the 1970’s Milton Freidman and the Chicago School of Economics proposed something called Shareholder Capitalism which believed that a corporation’s job was to focus solely on maximizing shareholder profit and nothing else, arguing Adam Smith style ideas that the jobs created, products made, and technologies developed as a byproduct of this process create a net positive for society as a whole. Unfortunately this instead created a very short-term profit focus where environments were destroyed for a single quarter’s gains, products were designed to break down faster, and all sorts of human rights abuses happened.
So the Davos proposal is Stakeholder Capitalism, where the corporation's job is to benefit everyone who has a stake in the company, the workers, the customers, and the shareholders. This way could combine the technological and responsive advantages of a free market society while still directly working to improve the lives of everyone, including environmental concerns. Stakeholder Capitalism is how we get products built to last, production that is respectful of the environment where it is being made, and a circular economy where today’s products don’t end up becoming tomorrow’s pollution.
Averting A Climate Apocalypse
Stakeholder Capitalism is about more than just the climate, but the climate was obviously one of the biggest issues of the summit. The Averting a Climate Apocalypse session was their biggest individual session on the climate, and the one where Greta Thunberg gave her speech. The biggest takeaway from the session was that action is needed right now, not tomorrow, not in some certain amount of years, and that we’re rapidly losing our remaining carbon budget.
Hindou Oumarou Ibrahim of Chad was easily the standout speaker, arguing that indigenous communities around the world are who we need to be turning to for solutions, as by “living in nature” instead of living in communities where nature is a separate concept from daily life, they both are the most immediately affected by climate change and know how to best preserve and protect nature. She argued that while offsetting the destruction being caused by climate change with initiatives such as tree planting is obviously a great thing, we can’t simply replace the environment in one place as we destroy it elsewhere. We need to make protecting the environment a priority, and that includes protecting communities from being destabilized, protecting biodiversity and immediately acting on climate change. Other big ideas from the session include divesting from fossil fuels as fast as possible, taking those divestments and investing that into practical climate change solutions, doing what we can about the climate right now instead of waiting for future technologies to solve the issues, and prioritizing radical levels of carbon transparency in the entirety of production chains.
Our House is Still on Fire
While Davos’s seriousness about climate change is inspiring, the unfortunate truth of climate change is that Greta and other activists are right, the house is still on fire. Despite the Paris Agreements being considered too conservative by many, and despite the worldwide condemnation of President Trump for pulling out of the Paris Agreements, we are simply not on track to meet our under 1.5 degree celsius goals. The fact that 309 private jets were flown to Davos to discuss the climate crisis underscores just how much our actions and our talk are still not in sync. The WEF purchased carbon credits to offset the carbon of all the flights to Davos (not just the private jets) but this still underlies how offsetting alone isn’t the solution, and real changes are always better. And the head of the World Bank choosing not to go to the summit underscores that despite the many powerful people and activists at Davos this week, there still isn't a singular global consensus on what to do about climate change yet. As Greta and other activists made clear in their speeches, the bigger problem about climate change aren’t the people who don’t acknowledge it, but those who do acknowledge the problem but don’t act on it. As they said repeatedly, we can stop the climate crisis, but only if we act decisively, act together, and act now.
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