In 2008, I had a chat with the internationally famous Egyptian-American economist Mohamed Al-Erian on one of his visits to Cairo soon after the publication of his influential book When Markets Collide: Investment Strategies for the Age of Global Economic Change.
It was summer, the weather was hot, and the collapse of the US investment bank Lehman Brothers and the international financial crisis were just around the corner. As a public servant then, I was curious to know which way the financial markets were heading. What were the alternatives for economic policymakers and what should they prioritise?
Al-Erian took up pen and paper and drew a grid with two columns and two rows. The left-hand column he headed “Urgent” and the right-hand column “Not urgent.” The two rows below he labelled “Essential” and “Not essential”. This yielded four decision-making quadrants: “Urgent and essential,” “Not urgent but essential,” “Urgent but not essential,” and “Not urgent and not essential.” We then proceeded to fill them in.
To illustrate how the grid worked, let’s take the example of a person who gets hit by a car while running to catch a train. Obviously, calling an ambulance to save his life would be an urgent and essential decision. Once the first-aid workers arrived and it was possible to ascertain the victim’s condition, it would be essential to contact the guy’s family, but this would not be as urgent as saving his life. What was urgent but no longer essential for the victim was his need to catch the train, interrupted by the urgency of treating his wounds. Into the fourth quadrant – of neither urgent nor essential – we might include the decisions of passersby not to call paramedics but rather to take lurid pictures of the victim and post them on social-networking sites.
We live in a world of extreme flux in which the first quadrant is packed with urgent and essential items. Wise decision-makers try to address them appropriately. However, there are also those who out of ignorance or negligence rank them lower down the scale, with the result that precious time is lost and opportunities wasted to remedy the problems or to minimise their costs.
Several crises have converged in recent times, beginning with the Covid-19 pandemic. The disease and its repercussions continue to wreak havoc on human lives and well-being. It will take societies a long time to pay off debts that have accumulated as a result of the pandemic on top of the mountains of private and public debt that they had built up earlier during the fat years of excessive borrowing fed by a wave of low interest rates.
More recently, the tragic war in Ukraine has struck against a backdrop of mounting turmoil in the global order and rising geopolitical tensions between established and emergent world powers. The war and its economic fallout have hit amidst mounting complaints of rising prices due to the inability of supply chains to meet the sudden rise in demand for goods and commodities. As a result, after high hopes of a rapid post-pandemic recovery, we find ourselves staring at the highest inflation rates in four decades.
Economic growth and employment rates have plunged. Stock markets are extremely volatile, registering sharp declines that have wiped out years of gains in a matter of weeks, regardless of whether the gains were solid or artificially induced through injections of liquidity or wildcat speculation.
Returning to the grid, the difficulty for decision-makers is not so much due to a failure to categorise something as urgent or essential. Such things tend to force themselves on us, unless our vision is somehow blurred by misinformation or an inclination to underestimate dangers. The problem is that so many essential demands come at once, and decision-makers are often at a loss as to how to prioritise them.
For example, they might put off dealing with something that is both urgent and essential and focus instead on a matter that is urgent but not essential or prioritise something that should not be ranked as either urgent or essential. One of the reasons this might occur is incomplete knowledge, whether due to insufficient data, incorrect information, or a lack of expertise. Another reason may have to do with ideological biases that inhibit timely and scientifically informed responses to a crisis before it ranges out of control.
The dangerous consequences of ignoring climate change are a case in point. The succession of recent crises from the pandemic to inflation, stagnation, mounting debt and the war in Ukraine have not made climate change any less perilous. Fighting it is as urgent and essential as ever, and the solutions are still available because the money, knowledge, and technologies exist to reduce greenhouse-gas emissions and bring global temperatures down to no more than 1.5 degrees Celsius higher than they were before the Industrial Revolution.
But implementing such solutions requires huge amounts of funding, integrated policies, and institutions able to implement them effectively.
The 27th Conference of the Parties to the UN Framework Convention on Climate Change (COP27) takes place in Sharm El-Sheikh in November – an excellent choice of venue in view of this country’s ancient civilisation, its Arab culture and African roots, its influence among developing nations, and its network of friendly relations across the Mediterranean and throughout the world. The COP27 Conference will also build on expertise from previous meetings that brought together world leaders, representatives from the private sector, civil society, youth activists, and various international organisations and institutions.
As Climate Champion, I propose that the COP27 considers five priorities for action:
The holistic approach: The Conference participants should formulate and adopt an integrated approach to action on climate change. They should support handling climate-change challenges within the framework of sustainable development, the foremost goal of which is the elimination of poverty. This holistic approach necessitates striking a balance between climate-change mitigation measures (reducing harmful emissions) and climate-change adaptation measures (changing behaviours and systems) so as to ensure that policies are effectively and equitably applied.
IMPLEMENTATION: Based on the goals of the 2015 Paris Agreement on Climate Change and the outputs of previous summits, the top priority of the meeting in Sharm El-Sheikh will be to focus on the need for governments, financial institutions, the private sector, and international organisations to implement commitments. As we know, such parties have vied with each other in making pledges, but fulfilment rates have fallen considerably short of expectations. The urgency of this cannot be overstated in the light of scientific reports showing that climate change is accelerating at a faster rate than previously thought.
immense finance: Climate action needs immense finance. The $100 billion a year pledge made by the developed nations at the Copenhagen Summit in 2009 has not been met in any year since then. Yet, even double this sum would not be enough to fill the gap in funding for just one point on the agenda: the provision of clean energy. Private-sector participation in funding investment in climate action is of the essence due to the high levels of debt that place limits on the resources governments can allocate for research, innovation, and development. The participants at the COP27 meeting should agree on rules and priorities for funding climate action after 2025.
regional cooperation: The COP27 meeting should also promote regional cooperation and transcend national boundaries, as is necessary in any case for several mitigation and adaptation projects. A single country, especially one with a small economy, does not have the resources to go it alone. Cooperation between the UN’s five economic commissions offers great opportunities for major interregional partnerships that would draw on the more than $130 billion in pledges, by GFANZ initiative, and convert them into investment flows.
localisation: Lastly, COP27 should focus on localising climate action projects and integrating them with sustainable development programmes in a manner that is consistent with the UN Sustainable Development Goals and averts urban-rural or centre-periphery disparities and ensures effective and equitable implementation.
*An Arabic version of this article appeared on Wednesday in Asharq Al-Awsat.
*A version of this article appears in print in the 19 May, 2022 edition of Al-Ahram Weekly.