Why Can’t We Pivot for Climate Change? Understanding the Traps of Climate Change Inaction.
By Mulyadi Robin, Associate Dean, Australian Institute of Business.
By Kirti Mishra, Assistant Professor, Indian Institute of Management.
Despite being labelled one of the greatest challenges facing humanity, the global response towards climate change has been relatively slow, to say the least. To complicate things further, recent Australian-based evidence suggests that organizational actors have normalized the challenges by converting the issue into the “mundane and comfortable concerns of business as usual” over a ten-year period.
When comparing this to the current responses triggered by the COVID-19 pandemic, the differences cannot be starker. Governments scrambled to lock down their borders despite knowing the potential impact on national economies, businesses quickly pivoted and tried to find their new normal, and while the sceptics and deniers are still present – they remain a minority. Yet, on the other hand, despite unequivocal calls to move away from a fossil-fuel regime towards a renewables-based regime, renewable energy consumption grew by a meagre 1 per cent in 2017–18 and renewables only accounted for 24 percent of electricity generated in Australia in 2019.
This leads us to the question – despite having heard the alarms raised for over two decades regarding climate change, why is it that businesses can’t seem to pivot for climate change?
To answer this question, we turn to the field of social-ecological systems and draw from the concept of adaptive cycles. Specifically, we look at recently published research which explored the lack of transformation in the Australian energy sector in response to climate change.
According to the adaptive cycle framework, organizations transform and reconstruct in response to changes in their internal and external environments by continuously repeating the four phases of growth/exploitation, conservation, creative destruction/collapse, and reorganisation.
Organizations that successfully overcome the crisis (i.e. pivoting during COVID-19) and demonstrate resilience are those which can navigate all four stages and reorient themselves. Throughout this process, crisis gradually makes way for opportunity as the organization finds and implements new ways to thrive by means of innovation, while organizational members draw on various knowledge systems and experiences to effectively manage and lead.
This marks the initiation of the new cycle and transformation into a more desired state characterised by new structure, function and feedback pathways. However, the two traps of rigidity and scarcity can inhibit the organization’s ability to transform and respond to crises. In particular, the very presence of these traps has led to climate change inaction within the Australian Energy Sector.
Australia’s emissions were highest on record last year, driven by an increase in emissions from the electricity sector, which rose to their highest levels in two years. So, what are these traps, and how can we draw from lessons learnt through the global response to COVID-19 to drive a positive response for climate change?
In organizations, a rigidity trap is created when members of organizations and their institutions become highly interdependent, interconnected, and inflexible such that there is a concentration of power and influence and reduction in organisational creativity and perpetuation of the status quo. On the other hand, a scarcity trap occurs when the organization is unable to mobilise enough resources to support the creative exploration of new possibilities.
This problem is further compounded when considering that a response towards climate change requires an ecosystem response. The current research revealed that the impediments to climate change action are largely due to rigidity and scarcity traps across three levels: micro (organisation), meso (industry), and macro (government). The presence of the rigidity traps reinforces the status quo of the existing fossil fuel regime, inhibits technical, structural, and economic changes. The scarcity traps limit the resources required for developing new renewable technologies to facilitate the transition to a renewable energy future. These result in negative resilience, where the current system persists and continues to have negative impacts.
Research on rigidity and scarcity traps highlight that while they are not easy to overcome, it does require us thinking differently about the key drivers required to create positive resilience. Ignoring these traps will result in a vicious circle being created, and just like our current response to COVID-19, we need to ensure that there is a synergy between different actors within the social-ecological system. At the organizational level, competencies, resources, and cultural changes can help traverse rigidity and scarcity traps. However, these alone are not enough. We need to ensure that our overall response is interconnected, including changing individual attitudes, business practices, and government policies. Only then, will we see positive changes.