Happy 2021!

The first two installments of What I Read will focus on trends on the social, economic, environmental, humanitarian, technology, and political fronts I will be watching this year.

Robert Frank’s “Under the influence: Putting peer pressure at work” demonstrates that our individual actions on global issues matter because of behavioral contagion and its ripple effects. “Installing solar panels, buying an electric vehicle, or adopting a more climate-friendly diet does not just increase the likelihood of others taking similar steps; it also deepens one’s sense of identity as a climate advocate [p.262].” He shows that behavioral contagion was the most important driver of change behind modifications of smoking habits, acceptance of same sex marriage, and the fall of the former Soviet Union. So he argues that public policies should foster positive behavioral contagion.
On the social front, I will keep watching the growth of citizen-led movements. 2020 saw the power of those dedicated to inclusion and the environment. In 2021, citizens’ assemblies will be gaining traction and going global.

Projections for 2021 global growth by the OECD, IMF, and World Bank range between 4-5.4% contingent on infection containment and fast vaccine rollout. Inequalities and indebtedness deepened by COVID-19 will threaten these prospects beyond 2021. Daniel Mugge also warns that GDP estimates will mislead reconstruction efforts as they do not account for the value of schools, healthcare institutions, “essential” workers, nor non-market household production. Given the lack of action on rethinking GDP as the measure of progress since the 2008 Stiglitz-Sen-Fitoussi Commission, I am not holding my breath for a 2021 breakthrough. Instead, I will be watching at progress in monetizing the social and environmental contributions of businesses as academics, accounting firms, and reporting standard setters advance the corporate impact valuation agenda.  

On the environmental front, I will be looking for more action on climate change on the road to the November COP26. The greening of recovery packages – because they amount to 12% of global GDP – could turn the mid-century net zero targets of 110 countries into concrete action plans. Irrespective of progress, we are heading towards a warming of 2-3C by century end. Accordingly we see a growing securitization of the climate change agenda as evidenced when the Munich Peace Forum held its first climate security session in 2017. End 2020, the Institute for Economics and Peace producing measures of global peacefulness, launched its first Ecological Threat Register. It estimates ecological risks and coping capacities. The first ETR edition shows that 141 countries are exposed to ecological shocks with highest exposure in Afghanistan, Mozambique and Namibia. It also shows that the 19 countries with the highest number of threats count 2.1 billion people and are among the 40 least peaceful nations.

In 2021, I will be looking for the much-awaited WTO Director-General appointment while rooting for Ngozi Okonjo-Iweala who said:  “When it comes to doing my job, I keep my ego in my handbag.”

A good holiday read is Rutger Bregman’s “Humankind: A hopeful history”. His argument is simple: “Most people, deep down, are pretty decent”. One story at a time, he debunks pessimistic views of humans as inherently bad. Bregman is an entertaining writer. He explains history, theory, and philosophy in compact and witty ways. The history of life on earth, for instance, is laid out in two paragraphs and one graph. The book also has weaknesses. Two bothered me. One: a collection of illustrations does not make a theory. Two: I could have done without his simplistic concluding “ten rules to live by”. But overall, the book does the job. It makes the reader think differently about human nature and leaves her more hopeful.  

Systemiq’s “The Paris effect: how the climate agreement is reshaping the global economy” documents how the low carbon economy has expanded since the Paris agreement. To be sure, the problem has not gone away: carbon emissions are rising despite the COVID-induced recession. But solar and wind are the cheapest source of new energy generation, electric vehicles will beat combustion cars in cost and efficiency by 2024, and the alternative protein industry grew by 29% in the past 2 years. Adoption of net-zero targets is spreading across actors and sectors: 20 countries plus the EU; 1,500+ companies worth $12.5 trillion; and institutional investors representing $5 trillion. All those numbers are better than anticipated back in 2015. So for Lord Stern, net zero is the new north star, and for UNSG Guterres, “climate action is the barometer of leadership in today’s world” [5’16”].

Here is a hopeful graph from “Safety and efficacy of BNT162b2 mRNA Covid-19 vaccine”. It shows the Pfizer/BioNTech vaccine efficacy when tested on 43,448 people in 6 countries, half of which receiving a placebo. Results seem to be similar for the Moderna vaccine. My new screen saver.

And a quote from Thomas Friedman’s Op-Ed “Kamala Harris deserves a more important job”: “Harris is too smart and energetic to be just the vice president, a position with few official responsibilities. I’d love to see President-elect Joe Biden give her a more important job: his de facto secretary of rural development, in charge of closing the opportunity gap, the connectivity gap, the learning gap, the start-up gap — and the anger and alienation gap — between rural America and the rest of the country.”