Many social systems favour a short term approach. In government and in business, as well as in many other areas, if we are to address some of the most pressing challenges we face then we will need to adjust to taking the long term view.
Tackling topics such as climate change requires a willingness to invest now for long term benefit, and an ability to transform threats into opportunities. Whilst progress is being made, strong political and business leadership is still required to ensure long-term needs do not fall foul of short term gain.
The choice between thinking in the long or short term applies to all aspects of our lives – in politics, economics, business and personal relationships. The definition of what is short or long term can vary widely according to the situation. For a small business starting out, its short term plans might be simply finding monthly work in order to keep paying the bills, while an established business would consider increasing its annual turnover as short term and have a 20 year long term plan. Alternatively, one could consider the current generation to be short term and future generations to be long term. In general, short term thinking provides benefit now, sometimes to the detriment of the future, while long term thinking provides future benefit but carries a short term cost.
Addressing Climate Change clearly requires long term thinking. However this leads to short term cost increase in return for potential future benefit. So should we bear the costs now in order to reduce the cost impact in the future, or simply ignore the matter and worry about the costs later? Perhaps by then we’ll be long gone and someone else will deal with them. Recent unusual weather events in the UK and elsewhere are an indication of the potential impact of climate change and its cost. Given the likely spend on flood defences and other mitigation measures, it clearly makes sense to also invest in CO2 emissions reduction.
Many of society’s systems favour short term thinking and generally put community interests far behind commercial interests. Staff are incentivised on annual bonuses linked to annual performance. Shareholders seek short term gain. Nothing is built to last, and “planned obsolescence” is actively encouraged, with software updates quickly become too advanced for the old hardware. Psychological obsolescence uses marketing to attempt to wear the product out in the consumers mind, convincing consumers that they need the newest model. This practice increases profits, but also increases pollution from waste and production. It is not sustainable and encourages short-term thinking.
Politicians could be viewed as being particularly susceptible to short term thinking. However idealistic they may be in setting out to benefit and improve their country or constituency, in order to do that they must get elected, and sometimes re-elected. Some politicians would consider getting re-elected their main priority above all else. Regular elections encourage short-term policy making in order to maintain popularity, to the detriment of long term investment in infrastructure and industries required for a sustainable future. Furthermore ministerial reshuffles ensure that the leadership of government departments change on a regular basis and continuity of direction is left in the hands of the senior civil servants. Hardly conducive to visionary long term thinking.
The core values underlying long-termism are responsibility and selflessness, and there are countless examples of people behaving in these ways, acting responsibly with patience and willpower. Planting trees for the future is a perfect example of long term thinking. There is a Greek proverb that says “A society grows great when old men plant trees whose shade they know they will never sit in”. The Caledonian forest of the Cairngorm National Park has been steadily felled since the Neolithic period 2000 years ago for timber and fuel, clearing for agriculture, and overgrazing by deer and sheep. Scots pine is a keystone species in the Caledonian forest ecosystem and usually live up to 300 years, however one tree takes less than a day to fell. Since 1989, Trees for Life has created 4,000 hectares of new Caledonian forest by planting over 1 million trees and this work is ongoing, aiming to restore native woodlands to an area of over 155,000 hectares.
During the 1930s, the prairies of the USA were dust. This agricultural devastation, which intensified the Great Depression, was caused by poor agricultural practices and severe short-term thinking during times of drought. As the drought progressed, farmers continued to plough and plant despite nothing growing, and as the crops and grasses that protected the topsoil disappeared, soon the soil was gone too as wind whipped clouds of exposed dust away. However this disaster led to President Roosevelt ordering a massive windbreak of trees to be planted from Canada to Texas, and education of farmers in soil conservation and anti-erosion techniques began. Ultimately some good came from this tragic combination of climate and human error and neglect, however society as well as the global and national economy had to suffer for over a decade before emerging on the other side.
A rather obvious connection can be drawn between the dustbowls of the ’30s and climate crises that are occurring today and in the past few months. Australia is burning up in the hottest year on record, whilst the UK is washing away in 163% more rainfall than the 1961-1990 average. Additionally, Argentina had one of its worst heat waves in late December, while parts of Brazil were struck by floods and landslides following record rainfall. It is not possible to say with complete confidence that these individual severe weather events are a result of climate change. However the strengthening trends are undeniable and impossible to ignore. The International Panel on Climate Change (IPCC) has stated that since 1950 the Earth has warmed by about 0.7°C. Unfortunately it seems that, just as in the case of the US dust bowls, the situation must become dire before governments and investors choose to make any progressive efforts to solve the problem.
Long term thinking in terms of energy policy will take commitment and dedication – to nuclear, or renewables like solar, wind and wave power, or to Carbon Capture and Storage (CCS) technology to reduce our emissions while we transition away from the use of hydrocarbons. UN climate chief Christiana Figueres has called for investments in clean energy to triple to $1 trillion a year by 2030 if we are to limit the global temperature increase to 2°C. [Business Risks from Emissions Limits].
Business leaders and investors have a great deal of power when it comes to initiating change. Whether it be money or knowledge that truly is power, then these are the people that have a large amount of both! The Investor Network on Climate Risk (INCR) is a network of 100 institutional investors representing more than $11 trillion in assets, aiming to mobilize investor leaders to address climate and other key sustainability risks, while building low-carbon investment opportunities. In business it is easy to stay conservative and risk averse, avoiding change that could put a dent in your profits. However if seen from a different perspective, threats can become opportunities, and problems open doors to new and innovative solutions. Necessity is indeed the mother of invention!
Simply put, short term thinking is easy, while long term thinking is difficult. It seems obvious – to live and do business sustainably we must combat short termism and work for the future. It may be a struggle against politics, technology and even human nature, but it must be done.
This article was written by Jen Hickling.