Agenda-Setting Foresight

Political leadership teams and decision-makers face urgent and growing risks to military security. Peter Kingsley explores how exponential rates of technological innovation, geopolitical instability, information asymmetries and global warming are creating extreme systemic risk.

Large-scale, climate finance is critical to cut carbon emissions and regenerate the biosphere. COP26 saw the launch of The Glasgow Financial Alliance for Net Zero, a private sector initiative signed by 450 financial institutions. In contrast, global leaders failed to live up to commitments made to provide US$100 million a year in support of the developing world facing the urgent need to adapt to short-term crises. Policymakers and economists have failed to account for ‘natural capital’. Peter Kingsley explores momentum and the invention gap that pervades finance and all sectors.

Western business remains bullish about China’s economic prospects, confident that the country can maintain its remarkable growth trajectory. This bullishness stands in sharp contrast to the West’s rapidly worsening political relations with China. George Magnus argues that business and politics cannot sing from different hymn books indefinitely. We may escape a new Cold War, but political relations between China and the West will remain fraught. Foreign businesses are not only under-estimating the impact that this will have on their ability to do business in China, but are also ignoring the negative effect of growing authoritarianism and rapid population on Chinese long-term economic prospects.

The chaotic scenes that accompanied the US withdrawal from Afghanistan angered the US foreign policy elite and shocked the American people, who are unaccustomed to seeing their country humiliated.
Mat Burrows argues that the debacle has damaged Joe Biden’s standing, but does not mark a shift to greater US isolationism. Biden has long wanted to reduce US involvement in the Greater Middle East, but is determined to push back against an increasingly assertive China, which is widely seen across the US political spectrum as the greatest test yet of American global leadership and the future of democracy.

There are many contested narratives on climate action. In ‘we have the solutions’, the challenge is to create policy signals in order to give markets confidence, redirect finance and scale existing technologies. The story goes that innovation and exponential growth will follow.

Peter Kingsley argues that this is critical, but not sufficient. There is an ‘invention gap’ that must be filled to hedge against the extreme scenarios surrounding runaway global heating, policy failures and complacency about steep cuts in emissions. The gap is systemic and strategic, cutting across all industry sectors and spanning global governance, policy, regulation, economics and corporate stewardship.

Climate disruption as a result of rising temperatures is already at the outer edge of the worst-case scientific projections. Simon Tilford argues that we could be approaching a ‘tipping point’, when governments will be forced to take urgent action. A wartime scenario is perhaps the closest analogy the kind of environment into which we might be heading. Once on a war footing, governments direct rather than set the rules of the game. In this scenario, the implications for firms and investors would be far-reaching.

We do not have 30 years to reach net zero. Committed emissions of carbon dioxide already take us close to 2 degrees. The transition will have to be squeezed into less time and will hence be more disruptive than commonly assumed, argues Simon Tilford. It implies a bigger role for government and less globalisation, especially of capital but also of trade; a retreat into ‘Walled Gardens’.