New year, same $#%t?

Why 2021 will be the most important year of our generation, possibly our entire species... and THAT makes it interesting AND exciting.

So between the pandemic, pan European lock downs and of course Brexit on one side, a new president taking office in the USA and vaccines against COVID-19 finally being rolled out on the other, it is easy to lose perspective on the bigger picture. All these things, the positive news, the human tragedy and loss, the anger and the hope felt in in the moment are merely transient. What really matters, and I don't say that lightly given the times we are in, is to preserve our planet for ourselves and those generations that come after us, or in some cases are already growing up around us.

If there is one major insight we should all take away from the pandemic, it is that continuity bias will sooner or later collide with harsh reality, and that reality is more powerful and inescapable than any alternative fact or conspiracy theory could ever hope to be.

We, the people, have work to do, and do it fast we must, we have one decade of radical change left to avert disaster for us and all creatures we share this water laden rock hurtling through space with. And NO boomer, this is not alarmist. This is the sober assessment of petabites, no, make that exabites, worth of scientific data, scientific insight, peer reviewed research and and computational models. Models that are now predicting our environmental parameters with frightening accuracy already.

-- but radical change sounds scary and oh we mustn't damage the economy... The easy retort here would be, what good is an economy if the planet is no longer habitable...?

But that's actually the wrong angle here, because, as it turns out climate change is bad for business, and the capital markets have just started to really factor this in. While COVID-19 related news may have drowned out these fundamental shifts for most people, 2020 was the year when climate preservation started to finally affect asset allocation strategies in a meaningful way. From banks retreating from arctic oil project finance, to GE exiting the coal fired power plant business in favor of going all in on wind energy, to Total leaving the preeminent petrochemical lobbying organization, because it deemed it bad for its business. All these events are, and they are just some out of many examples, have started to move the needle. It is telling that the biggest boom in the American stock market in the past months has been centered around electric vehicle makers, battery developers and alternative energy companies.

So looking forward, into 2021, and the radical changes that lie ahead this decade, the market has already started to price them in, and that's a good thing. It gives confidence that we might be able to do this. Markets are starting to favor what's good for our planet and survival. So if politicians, "encouraged" by us their voters, keep putting helpful regulatory parameters in place, form transnational carbon trading, to firm exit dates from combustion engined personal mobility, to the various green recovery investment programs, then this should amplify market action and sentiment. Policy creates certainty and certainty bolsters investment and investment drives change.

But there is more, the decreasing cost of renewables, also changes a key constraint of economic activity, the cost of energy, from resource based scarcity to mass manufacturing economics.

What is exciting, is this very transition, away from fossil fuels and the resultant liberation from a century old constraint to economic growth, is so powerful and so transformative that few have yet fully grasp just how radical this change will. In that regard it seems similar to our species' trajectory for automation and artificial intelligence (AI). The only difference being, that this energy transition will likely define the rest of this decade and be more "upside heavy", whereas the real impact of AI and next generation automation will only be truly felt in the following two decades after this one.

The pandemic has conclusively demonstrated that massive change can sometimes be forced over night, whether we wanted it or not, that driving change is better than getting run over by it, that ideas and orders that seemed to be set in stone can be shaken up over night, and that human selfishness and selflessness are both greater than we would have believed only a year earlier.

So 2021 will matter more than any other year so far, because we have a choice, we can keep the momentum going, we can accept and use to our advantage, that any old dogma is up for questioning, that science in deed holds a lot of answers, and yet that the human element matters a great deal too. That some of the things we used to bicker about are immaterial, and that if we collectively put our minds to it, great things can happen at real speed. Because the way we use 2021 will undoubtedly define the trajectory of the rest of this decade and in doing so will set us up for success or failure as a species.

This is the a true inflection point, akin to the industrial revolution, only on a much more compressed time-scale. And yes, there will be discomfort and mistakes along the way, but if we keep our eyes on the ultimate prize, survival, then the rewards will far exceed our expectations. Executed well, the ensuing transformation will lift our civilization to the next level, generating wealth, health and tangible economic progress for many more. Will it deliver utopia, no of course not, but inaction or back to business as usual is guaranteed to deliver dystopia, and do so much faster than most can fathom.

This blog will do its small share to help drive things along and speak up for the opportunities that this challenge also holds. Hopefully you, dear reader, will do the same where ever you can.

This is truly a once in a life time opportunity, and it is just too great and good to squander.