THE BLOG

System Crises Is the New Normal

03/22/2013 01:52 pm ET | Updated May 22, 2013

The financial crisis wasn't an isolated event, but a manifestation of a new normal. A new normal characterized by extreme turbulence and an unprecedented connectivity between different global crises (economic crisis, climate crisis, food crisis, resource crisis, etc.).

The global economy exceeds the planetary boundaries, resource prices are rising, unemployment rates are record high and social instability and inequality is growing in many countries. At the same time, the solutions to these crises need to be approached in a new manner. The 19th -and 20th-century model of thinking, where one problem is solved individually, is grossly outdated given the connectedness of the current challenges.

It no longer makes sense to tackle unemployment by increasing the demand of goods, if the production of goods causes climate changes, pollution and higher resource prices. However, if the transition to a greener economy is to succeed, a new way of thinking is needed in order to address the connectedness of the different crises.

System crises, in short, is the new normal.

The need for addressing these crises in a systematic approach has long been stressed by the World Economic Forum, the World Bank and the OECD, but the financial crisis has had the secondary consequence that the climate change agenda has experienced strong headwind. The political momentum for speeding the transition to a fossil free economy has come to a grinding halt.

However, a new movement of young Europeans, initiated by Danish students, is now putting pressure on European politicians to tackle these crises in a systemic matter. The movement, Transition Now, met with the EU Climate Commissioner, Connie Hedegaard, earlier today to discuss the road to a sustainable future and the policy recommendations the movement has drafted.

Helene Søgaard, spokesperson from the Transition Now movement, says:

"The European nations must adapt to the realities of the 21st century. We urgently need decisive action in order to deal with the serious environmental and social challenges facing our society. Politicians seem to be preoccupied with firefighting short-term economic problems to tackle longer-term challenges thus forgetting the bigger picture. Our job is to simply to remind them to tackle these crises in an intelligent and systematic way instead of the usual one-problem-at-a-time approach."

And the policy proposals put forward by the Transition Now movement resonated with Connie Hedegaard. Hedegaard, who stressed that politicians do play a key role in the transition towards a more sustainable future said:

"Honestly: We do not have to wait for more reports to do the right thing. What we need now is progress. Progress on our common journey to a world with a stable climate and equitable access to sustainable development. Our people expect it. Our economies need it. Our planet craves it."

Hedegaard noted that the EU has cut greenhouse gas emissions by almost 18 percent from 1990 levels while at the same time increasing the EU's GDP by 48 percent, and said:

"Governments must govern when it's required. And I speak not as one of those 'European socialists' but as a politician from the center-right of the spectrum. I've seen what strong policy action can achieve in my own country, Denmark. At the time of the OPEC oil embargo in the early 1970s we imported 99 percent of our oil. It was an expensive lesson in the risks of being dependent on others for our energy supplies -- and we have learned from it. Energy independence became the goal of successive governments and we introduced a whole battery of regulatory measures to achieve it. Innovative companies responded by providing solutions and Denmark rapidly became a pioneer in wind power. Our policy goals drove the development of a world-class industry."


Transition Now: The recommendations

Among the proposals of the Transition Now movement is:

An ecological tax reform. This would consist of increased taxation on environmentally damaging activities and decreased taxes on labor. Higher taxes on pollution and resource consumption will increase the incentives for resource efficiency, innovation and technological development, while lower tax on work will increase employment.

Creating incentives for the pension funds to make sustainable investments. Pension funds possess huge assets, which should be invested in long-term projects within sustainable energy and sustainable construction. By changing the focus from short-term profits to long-term investments, the pension assets can be invested in sustainable projects.

"Use again and again and again." An initiative that aims at stopping the throw away society and consumer culture of today, and promote a transition to a circular economy, where resources are recycled in closed circuits, and products are designed to last as long as possible. Examples of ways to support this development are to rent instead of to own, a drastically expanded deposit system and increased tariffs on resources and packaging.

Transformation of European agriculture. Agricultural practices need to move towards sustainable biological principles based on circuits, where nutrients stay in the system, the use of chemicals is stopped and the fossil energy is taken out of production. Agriculture must be seen as a caretaker of nature. The monoculture of today, dominated by fodder cultivation for meat production, must give way to more diverse forms of production, respecting the climate and focusing on national food security.

Experiments with work sharing. Here a shortening of the workweek could create new jobs on the basis of existing production. Work sharing has been criticized for weakening competitiveness. A shorter workweek can increase quality of life for the individual, the family and local communities by allowing further engagement in leisure and community activities.