Report From Dubai

Universe in 2009 / by Lionel Beehner /

Last November, the World Economic Forum convened thought leaders and heads of industry to discuss the state of the world. Seed followed up to ask where we go from here.

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GEOPOLITICS AND GLOBAL GOVERNANCE
Terrorism, Proliferation, and WMD
Islamist terrorism, nuclear proliferation, and energy security all remain atop policymakers’ foreign-policy agendas. But how to address these threats — whether through intelligence, law enforcement, military force, or diplomacy — varies from country to country. Were a nuclear or biological 9/11 to occur today, there is no clear plan of action. The potential for a mass-casualty terrorist attack remains alarmingly high, analysts say, but coordinated preparations are still lacking. A different framework is needed, one that identifies weaknesses — i.e., breakdown of control over nuclear materials and technology — but that also identifies motivations (ideological, religious, or otherwise), and opportunities for terrorists, like power grids and water systems.

On the nuclear front, the council endorses the goal of a nuclear-weapons-free world, which includes doing away with the first use of nuclear weapons and drawing down existing stockpiles. The council also suggests stiffer penalties for withdrawing from nonproliferation treaties (i.e., sanctions, blocking access to technology-transfer knowledge), as well as strengthening the verification powers of the nuclear watchdog agency, the IAEA. Technological innovation, including improved nuclear forensics and proliferationresistant facilities, may help mitigate the risks of a WMD attack. Emphasizing the peaceful use of nuclear technology to the next generation of nuclear engineers is also important. Joint programs are already in place in Russia to shift Soviet-era scientists into civilian jobs.

Participants didn’t advocate global government but rather greater global governance. Many agree that the current system is broken: “We need new thinking, not new tinkering.” 

Deterring nuclear terrorism will ultimately require preventing states from passing fissile material to nonstate actors, whose concept of deterrence differs from states’ because there is little to no consequence of retaliation. That may require stricter enforcement mechanisms to deter states — which presumably have a monopoly on the means to acquire nuclear weapons — from supplying a proxy group with fissile material. In effect, the supplier will be treated as the attacker. But what about those cases in which a state unwittingly supplies nuclear technology to a nonstate actor or is a victim of theft? Does negligence justify retaliation? If so, what are the consequences? This is what Robert Gallucci of Georgetown University’s Edmund A. Walsh School of Foreign Service calls “expanded deterrence,” adding that “this is not an activity where bluffing should be encouraged.”

There is spirited disagreement within the nonproliferation community over whether to revamp the rulebook on nuclear proliferation, namely the NPT and its safeguard agreements, or to scrap the regime entirely. Some propose creating a nuclear fuel bank, while others suggest more intrusive inspections. But there is a consensus behind addressing the motivation and intent of terrorists and adopting a so-called “5-P strategy” that focuses on protection, policing, political understanding, polity building, and psychology. Biological terrorism received slightly less attention from the council, but members agreed it poses similar challenges. Countering the threat, the panel concluded, requires a downstream response from public health and emergency management teams and greater coordination between these groups and national security agencies.

Energy Security
As oil prices hit record highs, reserves are depleted, and energy demand from new players like India and China soars, energy security has become a more immediate concern. Energy security, defined as ensuring a reliable supply of energy but at affordable prices and low social costs, is not the same thing as energy independence. The solution to energy independence has many facets: demand reduction, conservation and more efficient use of resources, supply diversification (wind, solar, nuclear). Most experts agree that for the foreseeable future, carbon-heavy fossil fuels will continue to make up the bulk of the world’s energy supply, but their uneven geographic distribution will inevitably create flashpoints of energy insecurity. Energy security is linked with other issues, including food and water security, but also the environment, economic development, and demographic shifts. Indeed, higher energy prices raise production costs and retard economic growth. And demand for energy-efficient appliances and cleaner transportation is motivated by a global push to reduce carbon emissions. “The world’s population is expanding so dramatically — if we don’t provide people with clean energy solutions, it won’t matter what the US does,” says Jay Keasling, professor of chemical and bioengineering at UC Berkeley.

Building more power plants is not enough, says Peter Corsell, CEO of Gridpoint, a “clean tech company.” At the summit, he called for a smarter electric grid, while others stressed the need to develop wind, solar, clean-coal technologies, and other low-carbon power sources in order to decarbonize the future economy. On the nuclear front, the question of how to handle spent nuclear fuel is a hotly debated topic. One recommendation to create a multilateral nuclear fuel cycle is to develop a major public-private partnership as a model for storing, monitoring, and leasing — as opposed to selling — nuclear fuel. Others suggest a more efficient international system between producers and consumers of energy, one that invests more in energy research and new technologies, sets universal pricing of carbon, and promotes collective management of strategic oil reserves.

Global Governance
If we hope to make progress in addressing all of the world’s security challenges, greater coordination across national borders and stronger international rules of law are imperative. Participants did not advocate global government per se but rather greater global governance. Many agree that the current system is broken. “Tinkering will not work,” says Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy in Singapore. “We need new thinking, not new tinkering.” Specifically, he says Western powers need to give up their privileges on world bodies, because most rising powers are non-Western. Then there’s the prickly issue of countries clinging to sovereignty. “At least on a temporary basis, we don’t have a global government, so how you do this while maintaining sovereignty is not an easy task,” says VivaKi’s David Kenny. “The G-20 is a start, but it needs rebalancing and more support for the developing world.”

SOCIETY & HEALTH
Diversity
Because of demographic trends, greater migration, and aging societies, countries are becoming more, not less, diverse. But that diversity — ethnic, religious, cultural — poses challenges within some societies. Economic imbalances and social inequalities have become magnified thanks to globalization, which often leads to more protectionism and backlashes against immigration. On a more micro level, diversity is rare at the executive or boardroom level, testing the belief that we live in meritocracies. Even the very notion of “diversity” is a predominantly Western construct and differs considerably among emerging economies.

There is a school of thought that “diversity” as a term has outlived its utility, given its connotation with phrases like “affirmative action.” Instead, greater focus should fall on managing human capital in businesses and society rather than checking off quota boxes. That is, we need to develop human potential and tap into the creativity of all peoples, not for the sake of diversity but for the sake of progress. But how does one measure progress? The OECD’s Enrico Giovannini challenged the 20th-century notion that progress coincides with GDP growth. “Despite high levels of economic growth in many countries,” he says, “many experts believe we are no more satisfied with our life than we were 50 years ago.”

“Traditionally, when the economy goes bad, everyone cuts down on science and R&D. The message from this forum was that new knowledge and innovation are the way out of this crisis.”

There is a growing consensus that we share a moral imperative to develop the potential of every human being and tap into the creativity of all peoples, that true diversity requires greater participation from every country in the worlds of science, technology, and business. As Dennis Thompson of Harvard University’s Kennedy School of Government notes, “We cannot begin to meet the large challenges that globalization poses without including the voices of those who have been excluded.” Linda Rottenberg, CEO of Endeavor, a nonprofit for entrepreneurs, adds, “In a time when the problems of the world are more globalized and interconnected, we have to look for great ideas not only from Silicon Valley but anywhere around the world, whether from Cairo or Johannesburg. The US no longer has a monopoly on good ideas.”

ENVIRONMENT & SUSTAINABILITY
Alternative Energies
Is the current pace of human development sustainable? The signs over the past year have not been encouraging. The rising costs of food and fuel are a warning sign of the potentially devastating impacts of scarcity. Put simply, soaring populations mean that the demand for resources is outpacing supply. And while great advances have been made since the oil shocks of the 1970s and the alternative energy sector has grown by leaps and bounds, the bulk of energy consumption — some 93 percent — still comes from the usual dirty suspects: coal, oil, and natural gas.

The consensus among the council is for a paradigm shift for both developed and developing worlds. For the former, a shift toward renewable energy resources and greater energy efficiency is a must. For the latter, low-carbon and off-grid solutions are increasingly important, but they also must be inexpensive, low maintenance, and accessible to indigenous people. To achieve this paradigm shift, governments across the board need to adopt long-term carbon-pricing mechanisms. And targets need to be more ambitious: Alternative energy — the preferable term in Dubai was “sustainable energy” — should meet half the world’s energy needs by 2050. The problem is the obvious barriers to entry due to powerful special interests and substantial subsidies lavished on entrenched energy providers.

Then, of course, there is the global financial crisis. When credit dries up, sustainable energy takes a backseat and projects get delayed. “When governments are busy propping up banks, there’s less money around to do things like invest in alternative energy,” says UC Berkeley’s Keasling. That said, the crisis may be just the shock governments need to shift their mentality from one of abundant energy resources to one of scarcity. That can inspire long-term thinking toward more sustainable business models and spur efficiency and innovation. “Sustainability is now being reframed as a question of innovation and R&D for companies, not as simply a nice thing to do for the environment,” says Hannah Jones, vice president of corporate responsibility at Nike. “People are beginning to see that a carbon-free economy could unlock economic growth and be a generator of new jobs.” As such, an infusion of private and public capital may be in the offing. On the private side, investors may view the sustainable energy industry as a longterm hedge against volatile energy prices. On the public side, Keynesian stimulus packages may be passed by governments to get through the global recession, which would help infrastructure projects related to sustainable energy, such as smarter energy grids.

Climate Change
Perhaps the biggest question of all is what to do about climate change. Conservation is not enough. Individual governments should be thinking long term when formulating energy plans to curb carbon emissions. At the international level, participants hoped a successor to the Kyoto Protocol would be etched out at the upcoming Copenhagen summit, which includes both wealthy and poor nations. Orville Schell, director of the Asia Society’s Center on US-China Relations, says it is crucial for China and the United States, which together account for half the world’s carbon emissions, to be part of whatever agreement emerges. In addition, he suggests that the two countries do R&D together, create carbon-free zones, and conduct joint experiments in carbon capture and sequestration. On a more macro scale, lending institutions such as the IMF or World Bank could also level the playing field for sustainable energy. Yet David Victor, director of the Program on Energy and Sustainable Development at Stanford University, warns that integrating climate change within the WTO, which could use its bully pulpit of trade sanctions to enforce climate obligations, might only anger emerging markets and disrupt trade.

Climate change requires urgent action but also a global solution. That is easier said than done, of course. “It is this mutant creature with a thousand legs all on backward trying to move in one direction,” says Schell. Even as the science on the issue has gained acceptance, there is still no clear direction on how to reduce carbon emissions among both states and nonstate actors without sacrificing economic gains. Global emissions, it is agreed, must drop 50 to 85 percent by 2050 if average global temperatures are not to rise 2 degrees Celsius above pre-industrial levels. But how do you reach that goal, when emissions from the developing world are rapidly growing to keep pace with development, when deforestation in poorer countries continues to account for 20 percent of global emissions, and when failed trade talks mean a slower transfer of cleaner technologies to developing countries?

Also, there remains a yawning gulf between Washington and Brussels on the urgency of climate change, says David MacKay, a professor of natural philosophy at Cambridge University. “The meaning of ‘strong’ action is still very different in these two dialects,” he says. Europeans favor a rapid turnaround, with immediate development of non-fossil fuel energy technology, whereas Washington favors some reductions in fossil fuel use, but endorses their continued use over the next half century. “The North American view,” he says, “was partly motivated by the need to have ‘any agreement rather than none,’ which leads to a willingness to make agreements that, according to the climate scientists, are probably inadequate.” 

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