Black Swan World

BERLIN – In today’s global financial crisis, the image of a black swan has become a symbol for the seemingly impossible that somehow occurs, turning the world upside down.

BERLIN – In today’s global financial crisis, the image of a black swan has become a symbol for the seemingly impossible that somehow occurs, turning the world upside down.

This year will afford us ample opportunity to examine the black swans that are already among us, and to prepare for the arrival of even more.

November, for example, marks the 20th anniversary of the fall of the Berlin Wall. The night of November 9, 1989, marked the beginning of the end of the Soviet Union and its empire, and thus also of the bipolar world that had, for five decades, divided Germany and Europe.

A year before, few people considered this world-shaking event even a remote possibility. Yet it happened, and the world changed almost overnight.

After the disappearance of the Soviet Union and the bipolar world order, victorious Western capitalism, under the leadership of the only world power, the United States, reigned supreme in global politics, and even more so in the global economy.

Nothing and no one, it seemed, could stem the global triumph of the market, with its transcendence of all previous limits on wealth – that is, until September 15, 2008, the fateful date when Lehman Brothers went bust and the meltdown of the global financial system began.

While a distraught world is still trying to fathom the consequences of this global crash and to mitigate its impact, the call of the next black swan can already be heard: the global climate disaster.

It seems to be part of human nature willfully to deny the possibility of great crises, or at least to downplay them. “Impossible” or “It won’t be all that bad” are the two magic formulae on which we tend to rely.

And we refuse to learn the lesson of the black swan even when the next one is already visible for all to see! Although the generations alive today have witnessed two completely unexpected crises of epic proportions within the last 20 years, we indulge in a shocking collective repression of a climate disaster with far more serious – and foreseeable – consequences.

But, in fact, by linking the answers to the global climate and economic crises, we can find a way out of both. The solutions to the climate crisis are already well known, the money is available, and so are the technologies, or where they aren’t, they could be developed.

What is lacking is the strategic vision and determined action of the major political players. As for the economic crisis, bailouts and stimulus packages on the order of billions of dollars, euros, yen, or yuan have been planned or implemented to stem the further slide of the global economy.

But, while references to the Great Depression are justified, the lesson of that crisis, and of the New Deal, is that effective programs can at best cushion the fall and bring about stabilization. The real economic recovery – and this is the bad news – came only with WWII and the long Cold War that followed.

Rather than relying on war as an economic mega-project to end today’s recession, the international community should bet on the fight against the climate crisis, because globalization will continue, rapidly increasing the threats to the world’s climate.

In 1929, there were slightly more than two billion people living on the planet; today, there are 6.7 billion, and in 2050 there will be nine billion.

All of them, thanks to globalization and new communication technologies, will strive for the same standard of living, give or take, which will necessarily lead to an overstretched global ecosystem.

The question of whether to use coal or nuclear power is simply no longer apposite: without a breakthrough in renewable energies, global energy demand cannot be met, not to mention the dangers of a new Chernobyl.

Where this will lead the world can be seen even today: China already has the world’s most ambitious scheme for expanding nuclear energy, and every year it builds coal-fired power plants whose electricity output is roughly equivalent to the capacity of the entire British power grid!

So the black swan of the climate crisis is already preparing to land. To fight the climate crisis effectively demands nothing less than a green revolution of the global economy, the mega-project of the twenty-first century.

Only the rich industrial nations of Europe, America, and Japan can afford to pay for the necessary investments in emerging countries.

But this green revolution must be about more than spending money; it must also be about laws and standards, i.e. about political regulation and new technologies, as well as new products and markets, which mean new economic opportunities.

This year, a new global climate agreement will be negotiated in Copenhagen to replace the Kyoto Protocol. This is effectively the last chance to prevent the next black swan from landing.

But we must understand that Copenhagen is also a big chance to revive the global economy. All of the relevant powers of the twenty-first century are represented in the G-20, and they should see the success of Copenhagen as part of their direct responsibility.

This time, unlike at the London G-20 meeting, they should do the job properly – both to protect our climate and to reboot the global economy.

Joschka Fischer, a leading member of Germany’s Green Party for almost 20 years, was Germany’s Foreign Minister and Vice Chancellor from 1998 until 2005.

Copyright: Project Syndicate/Institute of Human Sciences, 2009. www.project-syndicate.org

 

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