Atelier WeekNotes w/c 4 Nov 2024

RUNNING THE ATELIER: Consequences of Trump. 0/DETECTING: US election. >Long-term big picture: our past is ending. >Impact on climate might be less than feared (for good & bad reasons). More...

I am writing newsletter of #weeknotes of starting the Atelier of What’s Next (a studio for initiatives at the frontier of generating a better future). For my rationale for starting the Atelier see here.

This week covers:

RUNNING THE ATELIER

• Consequences for the Atelier: no change, parallel tracks, adapt, pause, or stop?

0/DETECTING
Did you notice the US election?

• Long-term big picture: our past is ending.

• Impact on climate might be less than feared (for good and bad reasons)

  • Good reasons: China is more important for what happens next; Clean energy investments are rising fast; and, The US itself has made a huge clean power bet.

  • Bad reasons: We're already on track for far beyond 1.5C warming; and The US has not been a leader on climate action.

• Goodbye DEI and ESG, hello greenhushing and not-woke commercial action.

• It is clear that people felt worse off, and voted out the incumbent; a world-wide trend driven particularly by the recent burst of inflation.

• People voted for someone who has a track record of cruelty, breaking the law and disdaining the US Constitution.

• One time Starmer?

• Knowledge Economy winners and losers: both dangerously out of touch.

• Obama saved the speculators, and we'll pay the price for ever.

How can the Atelier of What's Next be of service to you, and your purposes? We'd love to hear from you. Perhaps you have a challenge or idea to put in the studio. Maybe one of our existing topics appeals to you. What if you love to make new things happen by being part of the studio? Or if you have feedback or comments that would improve this deck. Either click the button below or email davidbent@atelierwhatsnext.org.

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RUNNING THE ATELIER

Consequences of Trump: no change, parallel tracks, adapt, pause, or stop?

Below I have some wider reflections on the Trump victory. Here I will focus on what it means for the Atelier.

The landscape for the work of the Atelier is at least clarified, if not actually changed. On the one hand, the need for initiative 'at the frontier of generating a better world' remains high. If anything, the problems have got bigger.

On the other hand, as the great Rowan Conway (ex-RSA and IIPP) says, “problems are not markets”. The consequence of a Trump victory are likely to be economic drag (as people wait to see if he does all the protectionist stuff he promised), an increase in risk-aversion and funding coming out of the 'woke' sustainability space. From the point of view of the Atelier, there will be fewer funders / clients, and there will be less willingness to spend.

The recent months have seen a bit of bad luck on business development. One significant project (using the coalition building method in the Net Zero Heat Innovation Lab) went from >80% likely for November delivery to <50% likely for Q2 next year. Another project went from active to dead because of personnel changes. Those two would meant I hit my target income from the tax year; now I am significantly short.

Of course, my efforts and attention have been reduced through the year because of a family emergency. I haven't been able to do the funder relationship building that I had intended.

At the same time, my non-Atelier work through other consultancies has dried up. I’m guessing this is partly from a wider slowdown, and also because I am no longer deeply connected into corporate sustainability. There has been a burst of compliance-like initiatives with four letter acronyms. I am not on top of those requirements.

It would be easy to blame only luck, but there is more too it. The funding for the Atelier rests on a series of hypotheses:

1. There is demand for the kind of services and role that Atelier plays. Current evidence: moderate.

2. That demand has financial resources to pay for those services. Current evidence: unclear.

3. The Atelier can reach those budget holders (ie I can get better at marketing and relationship building with the right folks). Current evidence: unclear.

4. The Atelier can be credible and trusted with those budget holders (ie my track record is strong enough). Current evidence: unclear.

Now it might be, with more effort from me, that the hypotheses 2-4 will get more clarity, and that answers will be 'not true' (in which case, move on). Or 'can be true' (in which case, try smarter).

The trouble is that the recent bad luck on business development reduces the time available to really test those hypotheses. The likely wait-and-see attitude of possible funders and clients means I may run out of time before I find out the answers.

Also, I'm doing a lot of 'solo climbing', and that does not seem like a good idea.

What are my options?

A. No change. Keep going as if nothing has happened.

B. Parallel Tracks. Push harder on both Atelier business development and also on non-Atelier consultancy work. Reach out to people for testimonials (to help with credibility). Use those testimonials to reach out to possible funders. Consider an interview series. At the same time, make it clear to folks I've worked with in the past that I am available.

C. Adapt. Change the Atelier's strategy. Maybe have a narrower focus. This would need evidence to guide what the choice is.

D. Pause. Accept that the context is not conducive at the moment, but still believe that the Atelier concept is good-enough and that the context may change. Get an interim role, ideally with some relevance to the Atelier. When that happens, pause the Atelier (probably keeping Exploring What's Next SubStack going).

E. Stop. Accept that the context is not conducive at the moment, and that the Atelier concept is unlikely to cut it at any point. Aim to get a permanent role that is the next phase of my career.

I'm not ready to say E.Stop yet, and I don't think that is justified. The A.No change option seems irresponsible. There is not enough insight to C.Adapt (which could come from the actions in B.Parallel Tracks).

So, that takes me to B. Parallel Tracks and also D. Pause. It is possible to pursue both of those at the same time.

WHAT NEXT

• Pursue B.Parallel Tracks and D.Pause.

• At the risk of being obvious, if any reader has thoughts on this get in touch. Especially if you have a paid-for opportunity you would like to talk to me about.

A prompt card from the International Futures Forum. You can receive these by subscribing here. I received this one on Wednesday, and helped me crystalise this way forward.

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0/DETECTING

Did you notice the US election?

I'm guessing you did. Originally I wrote a very long response on the specifics of the US election. But, if you're interested in that kind of thing then you will have read experts (who I would only be summarising). If you're not interested in that kind of thing, then you don't want that kind of commentary. So, below are wider reflections, avoiding specifics on US politics

Long-term big picture: our past is ending.

In February 2019 I was invited to give a talk to Community Links on 'Our Digital Future: Getting Ready for Everything'. The first substantive section was how 'our past is ending'.

My claim: our society's key assumptions, as embodied in our culture and institutions, are finishing at the same time.

• From mid-1980s: ‘Free markets, guided by technocrats, will solve all problems.’ BUT now widely seen as failed, and return of nationalism, protectionism and/or industrial strategy.

• From mid-20th century: ‘If you have a job then you will have a secure livelihood.’ BUT rise of the precariat, have a job but still cannot heat or feed your family.

• From end of World War 2: ‘American economic and military might will underpin the rules-based global order.’ BUT Trump 1 makes the US an unreliable ally, and the US is turning inwards.

• Since roughly 1750: ‘Cheap fossil fuel will power us forever.’ BUT the renewables revolution.

• Since roughly 1700: ‘The West will always do better than the rest.’ BUT China (and India) are rising, competing powers.

• Since roughly 1600:

  • ‘Nature is indestructible and infinite. We cannot affect it.’ BUT climate emergency and biodiversity crisis.

  • '‘Humans are more capable and more intelligent than anything else.’ BUT the rise of AI.

The very ground on which we walk is changing, and we don't know how or what to. For me, Trump's second election is part of this big, big picture. The move to a multipolar world, with ongoing geopolitical tensions and huge shifts in how we produce and consume -- all of which we barely know how to explore at the moment.

One of the best books on transition is 2016's Journey to Earthland by Paul Raskin of the Great Transition Initiative. You can download the pdf of a mercifully short book here. It has a simple 'taxonomy of the future':

"At the highest level, three broad channels fan out from the unsettled present into the imagined future: worlds of incremental adjustment (Conventional Worlds), worlds of calamitous discontinuity (Barbarization), and worlds of progressive transformation (Great Transitions)."

A two-term Harris might just have made the 'Conventional Worlds' strand possible. Even that would take heroic assumptions about how the Republicans would behave. And also, huge assumptions about the importance of the US to a global transition.

Trump is a clearly an enabler of the 'Barbarization' path. Tariffs and deportation are very much in the direction of Fortress World.

WHAT NEXT

• Within the Great Transition taxonomy, the question for people like me, aiming for a better world and believing that Fortress World is not better, is: how can we give the Great Transitions branch a chance?

• Within my work, as framed by the Depth of Change spectrum, is Deep Transformation still available or should we be focussing on Making Good Ruins?

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Impact on climate might be less than feared (for good and bad reasons)

Good reasons:

1/ China is more important for what happens next. It has the largest emissions, which need abating. It has already made huge clean energy investments and is leading the way on renewables (especially solar) and on electric vehicles. So much so, that it might not be possible for the US or Europe to catch up. They are pursuing an energy transition their own reasons, and are unlikely to be swayed by the US slowing down.

China will be producing so much cheap solar panels, batteries and electric vehicles that these can spillover into the rest of the world (as long as countries don't go protectionist). For instance, Pakistan has undergone an electricity transition in the last 2 years, responding to its own energy crisis by buying lots of cheap stuff from China.

2/ Clean energy investments are rising fast. The amount of renewables worldwide is predicted to grow 2.7 times by 2030, the IEA says it is moving at an "unprecedented rate."

3/ The US itself has made a huge clean power bet. Since the introduction of the Inflation Reduction Act (IRA), $468 billion in private investment has flowed into the US economy, benefitting Republican states four times more than Democratic states. I suspect that IRA will be stripped back (especially of the requirements to involve and benefit local communities) but that the money taps be left on to subsidise corporates and oligarchs investing in clean power.

Bad reasons:

1/ We're already on track for far beyond 1.5C warming. The UNEP Emissions Gap report has the world on track for 2.9C warming by 2100.

CarbonBrief has an estimate that a second Trump term would add an extra 4GtCO2e by 2030, or, "put another way, “negate – twice over – all of the savings from deploying wind, solar and other clean technologies around the world over the past five years”. That is obviously not trivial.

But, if there tipping points between 1.5C and 3C of warming, we were likely to hit those anyway, even if Harris had won. The additional damage of Trump is small compared to all the past emissions from the US.

2/ The US has not been a leader on climate action. Since, roughly, the 1920s, the US has been the innovation engine of the world. Successive technology surges have started there and spread to the rest of the world. It also has the deepest capital markets, able to invest vast amounts of money and create huge amounts of fixed assets.

Over the last 30 years, since Al Gore was Vice President, has the US used its innovation and financial might, combined with its preeminent role in world affairs, to drive climate action? No.

Imagine if the US had taken climate as seriously over the last decades as it took the opportunities of AI over the last 5 years. That UNEP estimate of warming in 2100 would be far lower than 2.9C. But, the US didn't bring its full might to act on climate.

Waiting and hoping for the US to be the white knight on climate has been fool's errand. The Republicans are against it, and they are entrenched -- and would have remained blockers even with a Harris Presidency.

I have a sense of an infinite game between the runaway potential of climate change and the human response, especially the exponential potential of technology deployment. It is not impossible for the human response to get ahead of the climate impacts. But it is not looking likely. Ironically, being pessimistic about catch up will be a self-fulfilling prophesy. So, we need to combine aiming for the best with preparing for the worst.

WHAT NEXT

• Still true that each 0.1C of warming avoided is a good thing. Keep mitigating!

• Adaptation becomes even more important. Especially to tipping points like AMOC collapse, which might be closer than we had believed.

• In a world where many leaders do not feel constrained by the rule of law, and where dangerous warming is becoming more evident, the probability of a rogue geoengineering effort has to have gone up.

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Goodbye DEI and ESG, hello greenhushing and not-woke commercial action.

For the last few years there has been a strong backlash by Republican lawmakers at a State level against 'ESG', the term given to investor action on environment, social and governance issues. I expect Federal laws which make ESG hard to pursue, and the same for Diversity, Equity, and Inclusion (DEI).

Now, I'm not a fan of tickbox ESG, where processes are put in place to be able to disclosure that processes have been put in place. For me, too much ESG efforts have focused on narrow operational optimisation or harm reduction, and too little on creating the industrial revolutions on a deadline that we need (see recent WeekNote on Family Offices and two flavours of systemic investing for more). I had expected the focus of leaders to shift from ESG compliance to those opportunities of transition, as the big shifts became clearer.

But, the ESG tickbox requirements have been useful to get companies started and to draw up the laggards. They will be missed.

The US financial firms will not be prominent players in any kind of sustainability action. Any cross-sector collaborations will dissolve. The ESG teams will be discontinued. (This will affect the job market in The City.)

But the opportunities do not complete disappear. So, companies will still invest in innovations, products and services, where there is a clear commercial rationale, as long as they can avoid being badged as woke.

I expect that, where a company pursues environmental or social targets, they will do so quietly. The reputation risk in the US will be more about being seen to be anti-Trump than of being anti-people. The recent trend of 'greenhushing' will grow.

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Quickly, other reflections.

(The first draft of this section ran to many, many thousands of words...)

It is clear that people felt worse off, and voted out the incumbent; a world-wide trend driven particularly by the recent burst of inflation. Two reflections:

• More inflation shocks are coming, triggered by climate change and/or conflict and/or trade wars and so on. The policy response needs to be stronger on how to protect people from the worst of price rises, including from price gouging. Otherwise incumbents will be in a permanent spin.

• No political party is going to win by promising people will be permanently worse off than what they imagine they should be, even if the reality is that urgent decline in damaging sectors is a requirement of staying away from cascading tipping points. Put another way, no political party is going to win with an explicit programme of Degrowth.

People voted for someone who has a track record of cruelty, breaking the law and disdaining the US Constitution. Somehow, that did not disbar him.

• The Republicans have the Presidency, the Senate (for at least 2 years), likely Congress, plus the Supreme Court (which is now likely to stay right-leaning for the next 20+ years). Plus, the Supreme Court has already decided that the President has immunity from criminal prosecution presumptively extends to all official acts. Difficult to see what checks and balances will survive any lasting efforts to dismantle them.

• But, as Will Jennings puts it on BlueSky, "will the strengthened control of institutions by Trump and Republicans overcome the countervailing forces of public opinion usually faced by incumbents?" What happens to Trump's support if he puts in big tariffs that have huge economic consequences? Does the Latino community stay loyal to Trump when people's parents are getting deported? Will people have a chance to vote again in a way which can turf out an incumbent? What happens when Trump and Musk fallout (as surely must be the base case)?

• As the Ones and Tooze podcast on The Economics of Donald Trump makes clear, there will be huge opportunities for graft. You don't want tariffs on our products? Overpay for a luxury apartment in a Trump development. Maybe then your lobbying will be more successful.

• Strongmen will feel empowered around the world. Despite their nationalist rhetoric, they will look to cooperate, in self-interested ways.

And yet more:

One time Starmer? Given the likely economic disruption of Trump, it is more likely that Starmer only has one term as Prime Minister, especially if Farage has any influence over Trump. Supporting Labour to deliver as ambitious as it can on Net Zero and regional prosperity is crucial, if we are to avoid a Badenoch-Farage victory at the next General Election.

Knowledge Economy winners and losers: both dangerously out of touch. The key gap is between Knowledge Economy winners (professionals, usually graduates, usually in big cities or university towns) and Knowledge Economy losers (usually less educated, and not in big cities). In the US, the professional winners of globalisation are voting Democrat, in the UK Labour. The losers, for the right. Matthew Goodwin has a point about realignment.

People like me shouldn't just say to those who are losing in the knowledge economy: "how dare you feel threatened by the modern world! How dare you have different values!" But all too often that is the message we send to them.

As with Brexit, many people feel left behind economically, left out culturally, and let down politically. And they are right about their lived experience, even if they are not accurate about what will make their lives better.

Two things can be true at the same time:

• The professional class can be dangerously out of touch with the rest of the country (as argued by Noah Smith here).

  AND

• That rest of the country can be dangerously out of touch with the solutions to their problems. Brexit and Trump will not help them.

Obama saved the speculators, and we'll pay the price for ever. In the late 2000s there was the financial crash. In the theories of economic historians like Perez (here) and Polyani (here), a financial crisis is the opportunity to shift the economy from the speculative frenzy of financialisation back to using resources to make peoples lives better, at least for a while.

When Obama became president he chose to save Wall Street, but without putting any constraints on what happened next.

And what happened next was…things pretty much returned to where they had before: Wall Street kept accumulating vast wealth through speculation, and investment did not flow to Main Street.

Populist politics in the US is downstream of that choice (and the rest of the world too).

As Gary Gerstel argues in this episode of Past Present Future, if you're an American with assets in the stock market, you are fully recovered from whatever losses you had by the early 2010s. But if you are an American without assets in the stock market, the losses of the financial crash are catastrophic. That happens under Obama's watch. People noticed that the elites in America were benefiting in ways that ordinary Americans were not.

Obama missed the moment to point financial capital at the real economy. IN retrospect, that was probably the best chance for an fast-paced IT-renewables industrial revolution. When will we get that chance again?