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Reconfigured Leadership in a Fragmented Decade

Hours to go before we can tick off the millennium’s first decade. A proliferation of learned and witty articles reflecting backwards and predicting forwards grace the pages of every media portal. Much has happened in this opening decade, in fact so much that it is hard to know where to start or how to judge what history will find important. Al Queda has become a household name, but will it’s dark record and call to arms even be remembered in another decade. Surely history will score high the US’s invasion of Afghanistan and Iraq, or will this be overshadowed by the longer-term implications of the cat and mouse game with Iran over its nuclear programme and Israel’s steady drift beyond the pale. Or will such politics prove trivial in the face of  the amazing developments in biology and genetics that could mark out the decade’s contribution.

Tomorrow’s history is a fickle judge, both in what it chooses and what or who’s story it picks to tell the tale.

One lens through which history can be viewed or predicted is that of leadership, who we have applauded and for what. And we do make some curious choices. Jut take a look at the list of the most important 100 leaders offered by Time Magazine. Time chose for its man of the year in 2004 George W. Bush “For sticking to his guns (literally and figuratively), for reshaping the rules of politics to fit his ten-gallon-hat leadership style and for persuading a majority of voters that he deserved to be in the White House for another four years”. And after a smarter moment in selecting Bono and the philanthropic Gates-duo, Time continued its tilt towards (our) madness by selecting, in 2007 Vladamir Putin as person of the year, arguing his importance rather than his likability or ethics. Europe meanwhile finally succeeded where would-be continental presidents from Napoleon to Hitler had failed (by the way, Times chose Adolf as man of the year in 1938) in annointing Belgian Prime Minister Herman Van Rompuy as the first “president of Europe”. And in 2008, Times annointed Mr Obama as man of the year, slipping in just a month before the American people decided on the same guy as their next president, and barely a year before he was awarded the Nobel Prize for Peace for his plans, potential or at least aspirations for making a difference.

Now the Nobel Prize list for the decade looks very different from Time magazine’s, which is rather parochial in tending towards choosing Americans and the world’s more obvious, generally fairly machismo, leaders. Nevertheless, three out of ten peace prize winners over the last decade were (deservedly but still wildly disproportionately) from the US, Jimmy Carter, Al Gore and of course Barak, with non-US folks including some other really great choices such as Kofi Annan (2001) and Mohammad Yunus (2006).

Kofi Annan is also a member of another important leadership group, The Elders, self-described as “an independent group of eminent global leaders, brought together by Nelson Mandela, who offer their collective influence and experience to support peace building, help address major causes of human suffering and promote the shared interests of humanity”. I must say, despite the rather cliche name, this is an extraordinary group of people, who in fact are far more than ‘thinkers’ as amazing, risk-taking ‘doers’, including Aung San Suu Kyi, Ela Bhatt, and Mary Robinson.

Juxtaposed to the Elders self-effacing manner are this generation’s business leaders. Business leaders, especially those running global corporations, have become international statesman and stateswomen, shaping culture, economy and politics, and making life and death decisions over the fate of communities in the name of, and with legal accountability to, their shareholders. Whether history will recognise them, some have provided real leadership over this decade, such as Anita Roddick, the ground-breaking founder of The Body Shop, Ratan Tata, Lord John Browne, and more recently Jeff Immelt. Despite these and other exceptions, history will mark this decade as a low point in peoples’ trust of its business leaders. An opinion poll in the US (the home of business where distaste for governments pervades) revealed for one of the first times greater trust for politicians than business leaders. And perhaps not surprisingly. Whilst not fairly all tarred with the same brush of arrogance and greed, Lloyd Blankfein, Goldman Sachs’ Chairman and Chief Executive, somehow captured their untimely self-image by declaring his and his colleagues huge bonuses as being a legitimate reward for doing ‘god’s work‘. By any financial measure save for the returns to illicit trade in drugs, arms and people, executives from the financial sector have certainly led us forward over the last decade. The Wall Street Journal, in an unusually sheepish article, predicted bonus payouts in the U.K. financial sector to rise to US$9.82 billion) in 2009 up 50% from a year earlier but, it hastened to point out, well below the 2007 peak.

Social entrepreneurship has emerged in the last decade as the touchstone of ‘true leadership’, blending Schumpeter’s animal spirit of entrepreneurs with the saintly aspirations more traditionally associated with the tranquility of priesthood. Wangari Maarthai, awarded the Nobel Prize for Peace in 2004, would figure high on many lists of this decade’s social entrepreneurs. But the vast majority of such folks are unsung heroes, often vilified and persecuted by their own communities, or simply ignored and buried by history’s short-sighted authors. Bill Drayton, the Founder and President of Ashoka, is the single most important source of this narrative and its explosion onto the world’s stage, and is responsible for surfacing many of tomorrow’s unsung heroes whose success might be improved through validation today. But many others have nurtured and validated this leadership model, including the powerful Latin American network, Avina Foundation, founded by the Swiss billionaire, Stephan Schmidheiny.

The 18th December 2009 in Copenhagen was meant to be the decade’s, and some would say, history’s greatest leadership moment. On that day, the world’s political leaders, watched in their every move by civil, labour and business leaders, gathered to agree on a collective pathway to manage climate in humanity’s common interest. Instead, they demonstrated their, or perhaps more aptly our, inability to handle the complexity of the moment. Whilst we might blame some of the individual leaders who participated in this sorrowful spectacle, history will take a more structural view of the driving forces behind this Babylonian nightmare.

Most of all, perhaps, history will mark the Copenhagen event, and indeed this decade, as the moment when we moved into a period of truly multi-polar leadership. The evolving significance of the G20, the Major Economies Forum on Climate and Energy, newly-minted power configurations such as the BASIC nations, and venues such as the World Economic Forum, all point to a period of turmoil where who governs, how and with what legitimacy and impacts is up for grabs. The global climate deal process was the perfect storm that outed this emergent pattern, but certainly did not cause it, and cannot be understood at all as a stand alone experience.

History is likely to view this, and perhaps the next few decades, as a chaotic, transition period. New global actors seeking to define their leadership roles individually and collectively, and how best to play them out. Existing political institutions and ideological assumptions and norms will creak and groan under the pressure, and in some instances fracture and collapse. Experimentation in new governance approaches will proliferate, with the difference between state and non-state variants becoming increasingly blurred and perhaps even irrelevant.

Personal leadership over this period will become a vital element in guiding and stabilising the ‘Great Transition‘, all the more so as the legitimacy of institutions are increasingly questioned, and the sanctity of political norms about individual and collective rights are placed under enormous, and in some instances fatal, pressure. Looking back on this decade’s celebrated leadership, I can only hope that next decade’s leaders will find ways to blend the wisdom and mobilising forces of the Elders with the brutal power of the likes of Messrs Putin and Blankfein and the will to invent and innovate of Mr Drayton’s social entrepreneurs.§

Tomorrow’s History

Tomorrow’s history is rarely created by extraordinary moments, it is merely punctuated by them.

Copenhagen will be seen as a failure of vision, leadership, and compassion. The Copenhagen Accord, ‘noted’ in extra time at COP15, will be stuck with the Sudanese’s naming as a “suicide pact”. And President’s Obama, Hu and many others, however they speak to their domestic constituencies, will have been party to this failed attempt to strike an ambitious deal.

Tomorrow’s history, i suspect, will profoundly disagree with this finger pointing diagnosis.

Studied history will point to Copenhagen as the last serious attempt to use 20th century techniques to arrange our 21st century affairs. Seeking consensus between 193 sovereign states through a zero-sum negotiation process was always going to be a fool’s errand. It failed because it handed exclusive rights to national governments, leaving 99% of the energy of business, civil society, cities, and the youth (just to same a few) as frustrated bystanders (see them in my Walk through Babylon). It failed because it sought to secure a “one for all, and all for one” consensus, unworkable even in the relatively simple world of trade. It failed, finally, because of its use of old style negotiation techniques where we have learnt so much from the “deliberative” approaches of communities and business in envisioning change and creating unlikely pathways to achieving it.

For Copenhagen to serve us well, we must learn from it.

It has failed because our global commons can no longer be managed by top-down, government-led, compliance focused, publicly-funded agreements between nations. Presidents and prime ministers, along with legions of negotiators, have been complicit in this by playing, frankly, their well-defined allotted roles in appealing to their domestic political constituencies (accountability) and in seeking re-election (whether in democracies or not). Who can blame folks for doing what we ask them to do, even if in the last hours we demand that they shift gear and behave as if they were chosen to lead in saving the global commons (which they were decidedly not).

Two things need to, and can happen now.

The first of course is to deal with climate with the right people where the action is. Whilst not wishing to trivialize today’s pain, we can deal with climate more effectively by catalyzing ambitious national action leveraged with international co-operation. We can get a better global deal, but only once nation’s have whetted their appetite for low carbon growth and development through action, not theory. This is not, as i have repeatedly argued, downgrading expectations, but upgrading them by leveraging where the real energy for change lies, and then uploading the results into a far smarter global deal going forward ( see my Revising Plan A).

Second concerns our global governance arrangements. Reforming global governance has been an esoteric topic for many years pursued by policy analysts, academics and international bureaucrats offering unintelligible diagnostics and incremental and largely technocratic recommendations. Copenhagen, and its potentially ghastly implications, makes this obscurity unacceptable. In the last two decades we have in fact already invented far more effective ways to do business internationally, from how we do global health through public private partnerships to building the hadron collider in CERN (it works now, but the amazing thing about it is how the global scientific and political community made it happen, not merely that it is ‘about the origins of everything’). We do not need another Commission made up of those who have presided over our failing global institutions, we need fresh blood and urgency in surfacing today’s institutional innovations and working out how to make these work in practice.

COP15’s real legacy.

Coming back, then, to climate. We should surely be disappointed by the final deal. But we are now poised to have to invent an alternative pathway in moving forward. John Maynard Keynes, the most extraordinary 20th century economist, argued that ‘our challenge is not to invent new ideas, but rather to let go of old ones’. Well, if he was right, and i suspect he was, then COP15’s greatest contribution to the public good may be to bury, once and for all, our outmoded ways of doing global governance. Such an achievement, whilst sad to contemplate today, may turn out in tomorrow’s history to be an extraodinarily important legacy that served us and our children well in decades to come.

Doing the Maths

Contrary to rumor, money does not make the world go around – but making the maths work does help.

Money, at least on the surface, is the blunting edge of the deal. Estimates vary but there is a convergent focus on total incremental costs rising to about US$100-140 billion per year by 2020. Depending on how one draws the line between here and then, the total bill on this basis that is not going to be paid for by private commercial money might be of the order of US$1 trillion. of the course the number could be smaller, especially since China led the way in accepting that it is not going to receive international support for its own incremental costs. Some political leaders have talked about far less: US$10 billion a year from 2010-12 (fast start), US$25 billion a year from 2013-2015, and more or less US$50 billion a year from 2016-2020, or about US$300 billion over this period.

Whilst these are not trivial sums (official development assistance is roughly US$150 billion a year), this round number requires some context. US Treasury Secretary Tim Geithner, estimates, based on IMF predictions, that global lost output as a result of the recession could be in the order of US$3-4 trillion in just one year.

Revealing also is the financing costs of such a sum, around US$5-20 billion a year on average over the period (depending on which number one takes if financed through low-cost sovereign debt. Such a modest sum would be shared between all rich (OECD+) countries whose combined national incomes are running at about US$60 trillion annually.

Put differently, the cost of sustaining our global community as we know and love it is 15-50% of the US$40 billion or so we spend annually on dog and cat food.

On the specific suggestion of sovereign debt as a possible policy pathway, front loading funding for global action through sovereign debt is not a new approach. The International Finance Facility for Immunisation was launched in 2006 through the initiative of the UK Government and supported by France, Italy, Spain, Sweden, Norway and South Africa. It raises finance by issuing bonds in the capital markets and so converts long-term government pledges to support global health goals into immediately available cash resources for the Global Alliance for Vaccines Initiative (GAVI).

Three objections are usually raised against debt-financed approaches, that: (a) the developed world have no appetite because of the debt burden they have already taken on in seeking to spend themselves out of the recession, (b) the low annual numbers are deceptive because the principal still has to be repaid by tomorrow’s tax payers, and, (c) a focus on government-raised funds will place too much power in the hands of inefficient governments in determining the allocation of funds.

These arguments are weak or simply beside the point. On (a), the opposite is in fact true, that the extraordinary levels of debt incurred by developed country governments in the last 18 months makes the amounts we are discussing quite trivial in economic or indeed political terms. On (b), we can and must assume that carbon markets will become more robust over time and generate more revenues, further augmented by the additional taxes coming from successful low carbon growth. In essence, the money is in fact an investment in creating that future, and should not be treated like a deadweight cost funded by debt. The third argument is simply beside the point, not because it is irrelevant (it isn’t), but because we would need to deal with this issue irrespective of where the money came from.

Do the maths, and it is clear that the money can be found, cheaply, now. It is not a ‘pay-off’, but an investment in our future, or if you must the cost of staying on the rails. Sovereign debt is the most cost-efficient way to ensure predictability of needed funds, and can be the source of last resort once any other sources have been exhausted.

Revising Plan A

My piece, ‘Revising Plan A’, published a couple of weeks ago first on OpenDemocracy.net and then on ChinaDialogue.net, has generated some heated responses, covered now on various forums including ChinaDaily.com. With 48 hours to go before the end of the Copenhagen talks, i thought it relevant to offer a couple of reflections based on my original argument and the current situation.

My argument, in a nutshell, was that any top-down multilateral agreement relying for success on sovereign abatement commitments and international public finance funding credibly verified outcomes is doomed to failure. Instead, i argued, we need to rely on the power of national interests, supported where possible by international co-operation. Of the many national interests that might exist, I argued, growth and development comes top on everyone’s list, so ‘low carbon growth and development’ should and will be the touchstone of success in climate management.

Respondents to my argument (which can be read through the linked articles) told me that I should not be so pessimistic, that some international agreements worked, and that national self-interest would not do the job alone (apologies if i have missed the breadth and nuance of the arguments).

Being right is not the point, but getting it right most definitely is.

If Plan A was indeed a conventionally-understood strong deal in Copenhagen, then we have underachieved. If this was the only way to save us from ecological meltdown, then such underachievement is indeed a disaster unfolding. My take is different: first, we will under-achieve in conventionally understood terms (too little legally binding commitment, too little public money); second, we are not doomed if we catalyze self-interested action, raising its timely ambition through international support. India’s solar drive, China’s extensive investments in low carbon growth, Europe’s carbon trading framework, and Brazil’s action on deforestation are all unilateral moves that work better through international co-operation.

My point is not that national, self-interested actions are instead of, but rather than that they are the heartland of real change. Hence the article’s title ‘Revising Plan A’. They might be effectively catalyzed by international action, but they are also in danger of being distracted by them, especially in weaker countries which could end up with yet another generation of rent-seekers rather than wealth creators.

Driving low carbon growth and development does require action on adaptation, which does require public as well as private money, and in some cases international public finance. Technology transfer is not going to be enhanced through a global climate deal, but does have to be facilitated through technology and country(ies) specific deals. Reducing deforestation and land use changes (REDD+) is hugely important, and will benefit from a strong international component, but even here money will flow mainly bilaterally when push comes to shove.

So far from being pessimistic, I am wildly optimistic. The difference is that i am looking somewhere else for my optimism, where real communities, domestic politics, national government actions, and private money rule the day. One last thing: a stronger global deal can be induced through action on the ground. That means that we need a political agreement now that does not ‘freeze’ the deal, then we need 1,000 days of intensive nation-level action to show how this stuff can work at scale. Then we can re-visit the deal and I warrant the appetite for more and stronger will be greater as Chinese, US, European and Indian economic interests converge on not just the logic but the practice of low carbon economics.

Walking in Babylon

Wednesday, and I am inside the Bella Center after a long chilly wait. One of the team has spent the entire night in the plenary accompanying the (last) attempt to develop a text in a consultative way. The place is now looking like a fortress as the world awaits two hurricane arrivals, over a hundred heads of state, and a riot planned for today.

Inside is like a Babylonian nightmare, every language, nationality, religion, creed and age, stalking the aircraft hanger-like corridors. You have to see, feel and if possible smell the place, the toxic extremities of consensual, zero-sum consultation. So for you, an eight minute walk through Babylon in video.

The Negotiators’ Itch

Well, the ‘walk out’ (not formally a walk out because the G77 spokeperson said “we have not walked out, we are firming up our position on the KP,
the KP is our exodus point”) an hour or so ago by G77 negotiators provides a dazzling display of ‘negotiators’ itch’, akin to the itchy trigger finger of someone holding a loaded gun who is feeling frustrated and let down. So they are out, at least for now, just as their political masters begin to arrive in mass. Or at least just as these noble ministers stand for hours in the huge queues outside the Bella Centre that reflect no less than a fit of Danish sense of fairness in not distinguishing between those representing the global voice of vegetarians and the actual ministers who are meant to be inside negotiating.

Scratching the negotiators’ itch has happened on the face of it because of the perceived abandonment of the Kyoto Protocol by wealthy nations as a basis for doing business beyond 2012. And they are right that this is facing a Northern axe, but is that really a smart or even the real reason for walking. History suggests that cumulative frustration leads to walk outs and wars, a fact that is as true for BA facing yet another strike, or us all as these proceedings degenerate by the hour.

There is little money on the table, and certainly nothing that has the number of zeros required (to the right) to do the job on mitigation or adaptation. China has now publicly accepted that it is not a candidate for public financial transfers from wealthy countries (accepting the inevitable, but in rather an elegant and constructive way it has to be said, since they probably could have pulled G77 to walk out just on that point). And the domestic mitigation offers remain stuck decidedly low, at the very best still delivering 5GT too little mitigation in 2020, a seemingly little number but in fact one that would be impossible to claw back beyond 2020 because of the carbon-intense investments that would take place in the next decade without a high carbon price and money to mitigate.

The truth is that there is a deal to be made today, a pathway to COP16 in Mexico that could raise ambitions, and the potential for a ‘review and strengthening’ in 2014 once we are out of the recession and in receipt of the IPCC’s 5th Assessment Report. But the truth also is that the negotiator’s itch has become so irritating that it is being scratched at every opportunity. Indeed, it might be a viral problem in that it is becoming less likely that the 100 or so politicians due ‘to come in out of the cold‘ (for those into old movies) can find a way to ditch the itch and do the right thing.

Blair on Blair

Mr Tony Blair led a high-level session yesterday on forests, which as we all now know provides up to fifth of global opportunities to 2020 for carbon mitigation. Blair is the unquestioned master of messaging, so i sat humbly seeking to read the tea leaves in his eloquent words. That said, there is an Obama-like complexity in his dialectics so that it can be a little tough to derive a straight line from the word to the meaning.

Framing his remarks, Mr Blair made clear that his role was to talk about policy, rather than science, economics or some other polemic. So with that in mind, i think what was he said, roughly speaking, was that ‘one needs to accept that this is tough, and that different folks have different views; that the science is agreed, but there are differing views; that there is common cause, but differing perspectives, and that there is lots that can be achieved in Copenhagen, and yet lots to do from next week‘.

Mr Blair’s erudite remarks were of course in large part correct, being a blend of axiomatic and tautological statements. But such accuracy does not serve what I trust was Mr Blair’s intended purpose, to strengthen the chances of an effective deal rather than prepare us and position key folks for a sadly inadequate deal. Yes, we are all challenged here in this compact Northern capital to get to a deal that works, that passes if you like the ‘laugh test of history‘. Yes, there will be weaknesses in whatever is agreed if anything is agreed. But no, we do not need pacifying at this or any stage by great politicians or fly-by pundits, however well meaning.

We need leadership that instills courage not acceptance, and clarity not obfuscation. We need leaders to call what we have by what it is, and to work hard to establish the bar below which spells disaster and to find ways to stay above it come what may.

So thank you Mr Blair for coming by, and i remain as always in awe at your style. But no thank you for your guidance today and please reconsider your messaging, aptly and uniquely communicated, when you pass by tomorrow.

The Key Number is 14

Fighting through the hot air being vented in Copenhagen to understand the real numbers is an obligation, not just a ‘nice to do’. Project Catalyst, an international policy platform that I have been working with for over 18 months, has produced what I think is simply the best piece that crystallises the data in a document entitled ‘Taking Stock: the Emissions Levels Implied by the Current Proposals for Copenhagen’.

(I will post this document in the next day or so, or contact me at simon@zadek.net) if you are in a hurry).

14GTs is what we have to mitigate by 2020 below ‘business as usual’ to have a 40-60% chance of keeping temperature rises below 2 degrees. This then is the magic number we have to make vanish, below which species disappear and whole eco-systems are predicted to collapse with unknown consequences.

The bottom line is that current proposals, if achieved at the high end, would deliver 9GT of abatement by 2020, whereas what we need is 14GTs less than ‘business as usual’. The low end of existing proposals would only deliver 4GTs less then business as usual by 2020, way off what is needed.

Waiting until later (2020-2030) to get emissions down is not a real option. The analysis shows that the cost of acting in this later period rather than now would be impossibly high given all the high-carbon investments we would have wired in over the next decade by failing to act now. The ‘wait until the technology is better and cheaper’ is a mirage we should not be fooled by.

So remember the number 14 (GTs), the level of credible mitigation commitments that are needed to be able to leave on 19th December with a sense of satisfaction at a job well done. Anything less and we have some explaining to do, notably to our children and grandchildren.

Off to Copenhagen

My second day no longer working for AccountAbility.  Bags packed, off to Geneva airport and to Copenhagen.  Today the piece I have lead authored with Maya and Fernanda and Joao on the Amazon Fund entitled Radical Simplicity in Designing National Climate Institutions Lessons from the Amazon Fund will be released. It provides a serious look at how autonomous public interest organisations, grounded in a collaborative approach, could work in moving us towards ambitious early action that does not get caught up at the international level. The Amazon Fund, although very young, provides the seeds for us to learn how to do this right and quickly.

Also today is released a second piece through Project Catalyst entitled ‘Institutional Design Proposal for Fast Start Funding’. We do need a fast start fund, irrespective of whether it is seen or indeed is a side show to the main financial negotiations. We need to get going quickly and ambitiously. The challenge is not just getting the money, but making it work. This second paper sets out how this might be done, focusing on direct financing, low hurdles, and bilateral agreements framed by common principles, a registry for posting actions and investments and a focus on learning rather than detailed ex-ante assessment.

Both documents will be posted on my new website www.zadek.net in the next day or so or can be obtained from me at simon  “at ” zadek  “dot” net.