September 2009
A Wicked Problem
On December 7, the United Nations, government representatives and observers will converge on Copenhagen to find a long-term solution to the problem of climate change under pressure from thousands of politicians, experts and lobbyists. However, my recent conversations with logistics executives find that in these recessionary times, survival in the present, not climate change in the future, is on peoples’ minds.
Understandably, climate change and carbon emissions, has slipped down in corporate priorities. In aviation, there’s been a natural drop in emissions through reduced trade. Copenhagen is shaping up to be a case of politicians trying to look proactive while promising as little as possible. We may be at the climate tipping point, but we’re not at a tipping point in consumer or business behavior.
Climate change is what management boffins call a “wicked” problem – not well understood, unique, innumerable orthogonal solutions and made up of radically different world views – what others might call a mess.
The complexity and uncertainty of climate change makes for chaos and confusion in the short term as solutions are sought. There’s a tendency to oversimplify in order to get a handle on the problem.
Looking past the short-term chaos, there’s something big happening. If climate change is a problem that is to be “solved,” the solution will result in decades of innovation that will result in changes to how we live that is as least as large as going from horse to steam, and from the pre-information age until now. Economist Schumpeter called them “waves of creative destruction” that rely upon entrepreneurial creativity to sustain long-term economic growth.
Climate change is the result of releasing carbon (and greenhouse gases) in the process of producing goods and services that satisfy our human wants and needs. By putting a carbon quota in this equation it’s pretty clear that there must be changes to our human wants and needs, the goods and services produced, and how energy is used.
The inclusion of carbon into business models in a world saturated with information technology and old world energy production can’t possibly be an incremental change to business. What is heading our way is a convergence of energy and technology that will change supply chains end-to-end. We just can’t see it yet because we’re focused on a simple fix that isn’t there because climate change is a wicked problem.
It’s starting with the global accounting of carbon. Even slow starters, like Apple, are counting their carbon. It starts with measurement and all the standards, rules, reporting and regulation that will establish a global information system for carbon. It ends with a global control system for energy.
Old world energies are going to be slowly replaced by new world energies that dovetail nicely with the global carbon (energy) system. Old energies won’t all go away. People still use typewriters. The global energy grid will be tomorrow’s Internet. Energy sources will connect to the grid to supply energy in an “energy cloud.” Smart products will draw energy out of the grid efficiently and only when needed.
The next generation of consumers has been sitting in classrooms learning about the depletion of the planet’s resources for the past ten years. They’re going to have to live differently by choice or necessity. They may not be environmentally smarter, but they will be making different choices about living, working and traveling because their world has been socially constructed differently than ours. Total energy demand will continue to increase because they will want more highly engineered products, forcing new design principles for products that deliver more but consume less.
Production and distribution networks will respond to changes in product design by re-optimizing around new energy minimization constraints that reduce the total carbon in moving goods. Plants will relocate, supply chains will be even more efficient and hybrid transportation solutions and services will fill in the logistics spectrum. Eventually consumption, production and energy usage in the air cargo industry will have to change.
Because it’s early, because it’s chaotic, it is hard to see the depth of the changes ahead. It’s probably best to view Copenhagen as a symbol of a willingness to solve the problem, not a solution. The real solution will be emergent, and creatively destructive.
When was the last time you wrote a letter?
Dr. Paul Forster is the Adjunct Professor, Hong Kong University Business School of Science & Technology and a member of the HongKong Climate Change Business Forum. His current focus includes carbon management in the logistics industry.



