The World Economic Forum has just published its Global Risks 2011 report, which suggests that global governance cannot cope with more shocks to the system. We should expect that such shocks will nevertheless be delivered, writes Mallen Baker

The report suggests that risks of particular concerns focus on crime, corruptions and state fragility, water food and energy, and global financial factors.

One of the speakers on launch said: "If business leaders and decision–makers can overcome the behavioural biases towards ... short–term solutions and switch to longer term thinking, then they will have made significant progress ..."

Indeed – but what we fail to acknowledge is that this teetering–on–the–edge condition is the one that we have chosen for the future.

Multiple challenges

We have a world already suffering from climate stress, water stress, and pollution overload. In the face of that existing stress to the ecosystem (you know, our life support system) we are expecting that major chunks of the population are going to begin consuming a lot more and human numbers are going to increase to a dizzying degree.

In other words, we are going to test the carrying capacity of the planet.

Presumably, in the optimistic scenario, we settle into a niche that is just within the limits. We manage to increase food production, develop cleaner energy and recycle materials just enough that we can accommodate all of these wants in a sustainable way.

But the downside of this is that – even if such a state were attainable (because the alternative is more likely, where we go sailing blithely across the threshold and then suffer some fairly brutal corrections imposed upon us by nature) – is that we have chosen to live right on the edge, vulnerable to any new shocks to the system.

Thresholds matter

If you place stress on local ecosystems, they show signs of that stress over time, until you cross a threshold. And then the ecosystem can collapse very quickly. We are proposing to push the stress as far as we think we can get away with it, without really knowing whether – or where – we may find that threshold.

This is the natural consequence of our choice to consume rapaciously and increase human numbers without hindrance.

Indeed, the recent 'World in 2050' report by HSBC said that countries like America and Britain would continue to hold their own in the global economy because of their continuing population growth, whereas those countries with stagnant populations would suffer.

This is the scale of our challenge.

No country with people living in poverty will consent to stay frozen into under–development and poverty.

No country with people living in affluence will persuade those people to consent to reduce their living standards, as currently defined.

No global governance process is going to face up to the logic around human numbers because of the difficult implications of how you would ever introduce public policy to control them.

We have seen in recent times that people can sign up to a short term system believing there is no alternative to the behaviours it requires, regardless of the fact that it is unsustainable.

Herd mentality dangers

Take, for instance, the famous quote from then CEO of Citigroup Chuck Prince who said that so long as the music was playing, you had to dance. Even though when the music stoppped, there would be a big price to pay. This kind of attitude is the norm, not the exception, if you look at how people behave.

There are many elements of our current situation that are reminiscent of the decline of the Roman Empire. They ignored the obvious signs until it was too late as well.

How will this change? Probably through turmoil and conflict. We may just get the licence we need to change direction if we get more highly visible, painful and alarming shocks that raise the awareness of people everywhere that we need to make major changes.

Sad to say, in the absence of such shocks, we lose focus, divide into different sectional interests and start fighting amongst ourselves.

The alternative would be that businesses and governments work together to take the people with them. Don't get me wrong. That would be my preferred option.

But looking at the state of play with some of the most powerful governments in the world at the moment – we are moving backwards not forwards in some very important places.

Those business leaders and other decision makers that do look far enough ahead should be planning for the world where such licence for change is achieved, and should be ready to show leadership when the moment comes again when the potential for change is there.

In the mean time, keep chipping away at the obstacles to change.

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