What’s the future of trade in a climate crisis?
Climate KIC Chief Executive Officer Kirsten Dunlop addressed the Worshipful Company of World Traders on 25 February 2021 to talk about the future of trade in a warming planet. In a thought-provoking speech, Dunlop asked the business audience: “How could world trade be part of the solution and not the problem – indeed take a leadership position in the field of climate action?”
“Cities and urban civilisation flourish where trade possibilities accumulate; trade connects and relates, enacts our interdependencies, traces human lines and marks across the skin of the planet,” said Dunlop in her introduction, acknowledging the role trade plays in the world we live in. Yet, she pointed out the disconnect between trade and climate action as a first observation for concern.
“We have badly underestimated both the speed and extent of climate change, in particular our analysis has failed to pay sufficient attention to the so-called tipping points of the climate system. Points at which the climate system may change abruptly from one relatively stable state to another which is far less conducive to human development, possibly triggering irreversible, self-sustaining warming,” she reminded the audience of brokers, bankers, accountants and consultants, as well as traders in goods and services. “Our collective action still amounts to denial. We are not yet acting as if we are facing an urgent, life-threatening emergency.”
The crucial need to deeply transform the trade industry
Climate change will disrupt economic patterns as we know them today. In a 2 degrees of global warming future, the business models that rely on today’s conditions and assumptions won’t be sustainable. There is an urgency for the trade industry to adapt, to change the way it operates. But incremental improvements and investment in renewable energy will be far from sufficient. For Dunlop, what we need is “to transform our paradigm for life and for human society – to find a manageable way of living. (…) It comes down to changing our assumption that we can continue to aspire to growth and prosperity in material terms: to consume, to design for obsolescence, to waste… rather than contemplate and act on the alternative – something closer to what is currently called ‘degrowth’.”
In her intervention, Dunlop emphasised the importance of innovating today to make businesses resilient before the disruption happens. This would not only contribute to avoiding the worst climate effects, but also help regenerate our environment, thereby reducing risks and protecting or renewing the supply of resources and value of assets. “Most importantly it offers the opportunity to shape the architecture and the conditions of an alternative global system of human economic activity capable of living within planetary boundaries.”
Dunlop encouraged the audience of trade experts to start allocating resources dedicated to business model resilience and renewal, to compose a portfolio of strategic innovation options, and to engage in a deliberate process of “learning from the experience that each innovation option can provide and working with that insight to generate knowledge and partnerships to enable business transformation.”
She concluded: “Trade is an industry that profits enormously from the mechanics of a high carbon emissions world. In the immediate future, however, that may become less acceptable globally. (…) Now would be the time to act to demonstrate the power of world trade to make a difference.”
Goal 8: Reduce industry emissions