Environmental Fiscal Reform: looking back in 2015

A look back at what has been happening during the first half of the year in EFR: the economic system’s downsides are revealing themselves as environmental pressures rise. The case for environmental fiscal reform has never been stronger.

Newsletter MARCH 2015 Vol. 1 Issue 2

The environment is sending a bill. We are still paying for the wrong things.

The recent update to Planetary Boundaries (link) underlines that four of nine environmental boundaries have been crossed by human activity. Environmental degradation is affecting economies badly. At the same time, they are performing poorly on equitable distribution and food and housing security. Inclusion, too is becoming a challenge. The term Environmental Fiscal Reform, which first appeared in the early 2000s, appears more frequently amid signs that the economic system itself is coming under pressure. In the run-up to the climate talks in Paris later this year, business leaders and environmentalists alike are asking for serious reforms.

Newsletter JANUARY 2015 Vol. 3 Issue 1

Environmental Fiscal Reform Special Edition

FOR BUSINESS TO SERVE HUMANITY THE POLICY FRAMEWORK THAT SURROUNDS IT MUST BE FIT FOR PURPOSE. CURRENT PERFORMANCE SUGGESTS THAT THE ECONOMIC SYSTEM BADLY NEEDS REFORMING.  IT IS DRIVING HUMAN BEHAVIOUR TO EXTRACT FROM NATURE BEYOND NATURAL LIMITS. IT IS TRANSFERRING WEALTH UPWARDS AND IN GENERAL CREATING A LUSTRELESS SOCIETY. ECONOMIC FISCAL REFORM IS THE TERM BEING USED TO DESCRIBE THE CHANGE.

Signals of blatant dissatisfaction with economic policy and the functioning of the economic system have been increasing recently. The term Environmental Fiscal Reform, which first appeared in the early 2000s, appears more frequently amid signs that the economic system itself is coming under pressure. Fiscal reform is about what governments do with the taxes they collect. The guidance they are given from mainstream economists is seriously under doubt.  In the run-up to the climate talks in Paris later this year, business leaders and environmentalists alike are asking for serious reforms.

This edition of signals produced in cooperation with the Swedish Sustainable Economy Foundation.

Time is running out to design organisations that function in an oil constrained world

THIS TIME, FALLING OIL PRICES ARE NOT AN INVITATION TO PARTY ON CHEAP ENERGY. THEY ARE A SIGNAL TO INCREASE THE PACE OF TRANSITION TO RENEWABLE ENERGY SOCIETY.
Signals: Falling oil prices could be a sign that a recession is on its way. And in a recession it can be hard to find the investment capital to do what needs to be done before the recession eases: invest in the new, renewable economy. Ironic. When times are good, everyone wants to invest in fossil fuels. When times are bad investing in renewables is out of the question. This has to change. And governments and economists want to move the change along with carbon taxes. Whole business models must change. At the right time, of course.

Climate change will force us to ditch old paradigms. Enterprise will go on even if capitalism doesn’t.

REPORTER AND AUTHOR NAOMI KLEIN RELEASES HER BOOK This Changes Everything: Capitalism vs. the Climate NAMING THAT CHERISHED PARADIGMS ARE BREAKING AS CLIMATE CHANGE ADVANCES AND THE PERFORMANCE OF CAPITALISM LOOKS EVER MORE SHODDY AS A WAY TO PROVIDE ESSENTIALS TO HUMANITY
Signals: Sooner or later the things we have been ignoring, brushing under the carpet, get named by brave individuals. Once a voice with enough authority and context gives it a name, it has to be dealt with. Naomi Klein, a brilliant reporter and sharp mind does just this in her new book.As she states clearly: Capitalism, since it was unshackled by the deregulation of the 1980s, has widened the gap between rich and poor. The top 3% held 55% of all wealth last year, up from 45% in 1989. The bottom 90% controlled 24.7% of wealth, according to statistics released this month by the Federal Reserve. The book represents a new wave of signals – bringing leaders, policy makers, thinkers and householders to confront cherished beliefs. 

Searching for ways to reflect on leadership challenges

HOW DO YOU EXPLAIN THE NEED TO ADAPT NOT JUST OUR CORPORATIONS, BUT OUR WAY OF SEEING THINGS? THIS IS THE LEADERSHIP CHALLENGE SIGNALS TAKES ON AS EUROPE TAKES ITS SUMMER VACATIONS.
Signals: Thinking about the way we think was once popular in strategic circles. No so much anymore. However, at least we question our assumptions more, thanks to the rise of great minds like Peter Senge http://executive.mit.edu/faculty/profile/30-peter-senge and Donella Meadows http://www.donellameadows.org/. We need to sit back and reflect. The signals we are seeing tell us that the collision course with nature we are all bound on will be the trainwreck of the century, and the solutions we need to look for are not on the level of changing light bulbs, but in the very way we perceive the world. We need to redefine what we mean by growth, how we see the economy and how we as strategists advise the organisations we work for.

STEPPING ASIDE FROM OUR NORMAL PRACTICE OF OFFERING EVIDENCE FROM THE MEDIA REPORTS, THIS ISSUE REPORTS FROM THE CONFERENCE ON LAND, LIVES AND PEACE RECENTLY HELD IN SWITZERLAND. WE AIM TO DRAW THE ESSENCE FROM THE MANY WORKSHOPS, KEYNOTE SPEECHES AND INFORMAL DIALOGUES THAT MADE UP THIS IN-DEPTH GLOBAL CONFERENCE. WE END WITH A BRIEF ANALYSIS OF CONSEQUENCES FOR STRATEGIC MANAGEMENT.

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Signals: Internationally we are facing a true predicament: the wider community of practice encompassing military, security, food security, land issues and development planning has amassed a huge amount of data and insight into the immediate risks humanity faces. Simple basics like the access to land and looking after land so it can provide food and other basic functions are lacking. At the same time, a deep frustration is expressed by the community in the apparent lack of a collective awareness and ability to address these very practical needs. It is as if we are living in a culture of predicament, standing shocked and scared unable to move.

IT SEEMS LIKE WE ARE DEVELOPING A  CULTURE OF TAKING INCREASINGLY HIGHER RISKS IN THE BUSINESS AND IN PUBLIC SECTORS. SIGNALS  SPECULATES THAT WHAT IS DRIVING THIS TREND IS THE NEED FOR ECONOMIC GROWTH IN A WORLD OF INCREASINGLY SCARCE RESOURCES. WE URGE LEADERS ENSURE THEIR ORGANISATIONS  REMAIN VIGILANT TO AVOID DEVELOPING A CULTURE OF INAPPROPRIATE RISK TAKING. DESPITE THE APPARENT OPENNESS OF INFORMATION VIA THE INTERNET, WE CANNOT RELY ON MEDIA TO BRING A DEBATE OF THESE RISKS TO THE FOREFRONT.

Signals: Large gains in productivity may come from genetic engineering of food crops. But there is a dialogue going on that is questioning if we have the tools to deal with this level of risk taking. The same could be said for fossil fuels. On the one hand huge benefits for mankind but the risks are on a level far higher than the industrializing world has grasped during the last century. The same goes for nuclear power.