Resilience and COP26
After four days the COP26 Summit meeting does not appear to be achieving concrete results. Here is what the November 3rd edition of the Guardian newspaper said,
. . . the US was clearly piqued at how little the relentless diplomacy of John Kerry, Biden’s climate envoy, had done to extract deeper emissions cuts from leading carbon polluters. Neither Russia’s Vladimir Putin nor China’s Xi Jinping, who both offered barely improved new targets at the talks, traveled to Glasgow. Biden’s frustration bubbled over as he prepared to depart on Tuesday.
“The fact that China is trying assert a new role in the world as a world leader, not showing up? Come on,” Biden said. “It’s just a gigantic issue and they’ve walked away. How do you do that and claim to have any leadership now? Same with Putin in Russia: his tundra is burning. Literally his tundra is burning. He has serious, serious climate problems and he’s mum on his willingness to do anything.”
But it’s not just China and Russia; the failure of the U.S. to pass meaningful climate change legislation is an equally important sign of the lack of progress.
In yesterday’s post, Climate Lessons from Virginia, we suggested that governments are faced with a dilemma: any serious attempt to cut emissions requires that ordinary people take a cut in their standard of living. But any politician who suggests such a course of action will face stiff resistance at home. It is not a good way to get re-elected. In that post we therefore suggested that leadership may have to come from commercial companies who are willing to take a risk on investing in new technologies so that they can establish market leadership.
Government leaders face another challenge/opportunity that seems not to have been addressed so far at COP26, and that is to do with the supply chain problems that the world is currently experiencing. Freight shipments are being held up at all stages: shipping, rail, road and final delivery to stores and consumers.
It is likely that the situation will return to close to the old normal in coming months. Nevertheless, these supply chain disruptions are probably not a temporary phenomenon. We are likely heading to a transformation in the world’s economy. We will be moving from “lean and mean” to “resilient, adaptable and local”. Companies will reorganize so as to:
Have multiple suppliers of the materials that they need.
Those suppliers will be in different locations and nations.
They will choose local suppliers and shorter supply chains;
Ditto for the companies’ customers. There will be more of them, and they will be located in different places.
Inventories of supplies, intermediate products and final products will be increased — there will be more warehousing.
Internal processes and manufacturing systems will be more flexible and will include more redundancy.
They will sacrifice efficiency for resilience.
There is a lot to unpack here; we will discuss these issues in future posts. Suffice to say that, as far as we can tell, this restructuring of the world’s economy is not being discussed at COP26. Yet it is likely to have a profound effect on greenhouse gas emissions and climate change.