Report from The Institute for the Future - Ten-Year Forecast Retreat

The Retreat

[27 April, 2010] I've spent the last two days at the Institute for the Future's Ten-Year Forecast retreat in Sausalito, CA. The attendance list for the retreat reads like a who's who of corporations (and a number of vice presidents from those companies), but includes governmental officials from all over the world who have a hand in strategic planning. There were a few of us academics as well. [Note: I wish I could name some of these companies but due to the fact that companies consider their strategic planning to be proprietary if I told you I would be obliged to shoot you. Take my word for it, these were some biggies!]

My role was to report on the energy picture (which was linked with the carbon issues in climate change). I was asked to be provocative, which I found easy to do after just having read David Korowicz's Tipping Point paper [here (pdf) and on The Oil Drum [here (html in a series in reverse order)]. This started with a set of lightning rounds, five minutes to frame the issues and provoke thinking. That was followed by breakout sessions where those of us who gave the lightning rounds led group discussions about our particular issues. The covered issues were: The Carbon Economy (my piece), Cities in Transition, The Water Ecology, Adaptive Power, and Molecular Identity. The Institute staff had developed a number of scenarios for the future related to signals (signs of change) that they have been tracking on a global basis. The scenarios included Growth (what we ordinarily think of as BAU), Constraint (more or less self-regulation of society), Collapse (a theme often voiced here!), and Transition (essentially adaptation and mitigation in all of the issue areas). The genius behind what the Institute staff did to relate all of these was to generate potentials for actions by adding a third dimension to the discussion in the form of motivations: Happiness, Resilience, and Legacy. The whole meeting became a group exercise in identifying actions in these three dimensions and at least hinting at the system interrelationships.

You might be interested to know that my breakout session ended up being the largest subgroup, with about 25% of the participants, indicating that I had been successful in provoking interest and that many of the participants were indeed very interested in energy issues. Carbon took a back seat. Concern for finding ways to reduce CO₂ emissions seemed a lot less immediate compared to peak oil and peak net energy.

My lightening round presentation can be found here (powerpoint). I had to get the message across in just three slides and the words that went with them. Unlike most presentations on peak oil, where you start out with the bad news and then try to lift spirits with some kind of good news at the end (raise hopes?) I chose the Clint Eastwood movie "The Good, the Bad, and the Ugly", saving the worst to last. I wanted the audience to be nervous at the end!

The Good News

I was prepared for what I assumed would be the typical blow back from a crowd who I presupposed were committed to profits, growth, and the whole western capitalism ideology. As I watched the group gather for my breakout session, I grew nervous. The size of the growing group led me to think I might be in for a real show down.

As the questions started to come in, I realized that nothing could be further from the truth. The overwhelming sentiment seemed to be one of grasping the principles followed by concern for the implications. I had told them that society would soon run out of energy to keep the kind of consumer-oriented, high powered economy going and they were acknowledging that they basically got it. Incidentally, one of the client companies is one of the world's largest cruise ship enterprises. Another is a major ground delivery service company. Fuel is an important issue to them as you might imagine.

Companies like these are concerned with international business and profits from sales all over the world. Governments are concerned with revenues that they get from taxes on incomes of companies and individuals. All have developed their revenue generation models based on cheap energy, so my message was not welcome. But it was also not rejected (actually there was an investment banking representative who was a bit dismissive, telling me his analysts had assured him there would be no problem until 2030 to 2050). Instead the prevailing attitude was one of "OK, so what can we do to plan for this"?"

Of course there were the usual questions about alternative energies replacing fossil fuels; I didn't raise their hopes with my answers to that. There was some discussion about natural gas filling the demand vs. supply gap for fuel; I explained some of the important caveats on the developments of natural gas wells. But by and large there seemed to be an overall sense of acceptance of the predicament. I even saw a number of heads nodding in agreement when I explained how the financial crisis of 2008 to the present was triggered by the oil price spike and that the bubbles that existed had been driven by the growing gap between real wealth and paper (phony) wealth based on declining net energy flows vs. gambling on our future ability to pay back all the debt we'd been creating trying to keep BAU afloat. I think most of them got it.

So the good news for me was that so many high level executives, thought leaders in major companies, and governmental officials charged with thinking about the future were open to the possibility that the collapse scenario (of the economy as we know it) would be brought about by the decline in net energy flow. Of course this was a small group compared with the number of companies still out there, presumably planning on futures based on growth and increased profits because they think the world will just go on as it has forevermore. These people were presumably at the retreat because they already understood that the world was changing in fundamental ways and they were looking at the Institute to help decipher the signs.

Confirmed Impressions

For the balance of the day, yesterday, and this morning, I had several opportunities to confirm my first impressions as during breaks, at a wine reception, and at meals many people came up to me to thank me for being so direct and blunt about the future challenge. A number of executives engaged me in extended conversations with respect to their companies and what a decline in fuels or net energy would mean for their long-term operations. I don't remember ever collecting so many business cards at one event as I did over the last two days — cards proffered on me by executives who expressed an interest in knowing more.

During another, more free-form breakout session, a number of us had a very frank discussion about the problems with capitalism and profit motives and how the culture of corporations is at direct odds with achieving a sustainable future. I was amazed to hear these executives express what I consider extraordinarily enlightened understanding of the fundamental problems. Of course, those same executives are hard pressed to go before their boards and state as much. There is still a very long way to go.

Nevertheless, this experience was heartening. I came prepared to be booed and have rotten tomatoes thrown my way. Instead we saw contemplative consideration of the issues. Kathi Vian, Director of the Ten-Year Forecast program, told me that she had been amazed at the reception that these executives and minister representatives had expressed for the basic ideas in the forecast (esp. even considering Collapse). She contrasted the attitudes with those of the last retreat when most people were more optimistic about the future. They had convinced themselves that some technological solution to carbon pollution would be found and a vigorous carbon trade market would solve all problems. She had been anticipating some push back to the way the current forecast had been framed. Instead, she too was gratified to see the openness that participants had for discussing potentially devastating topics. Of course, the purpose for discussing these issues was to seek pathways through the map of challenges to achieve happiness, resilience, and legacy. People were eager to explore those pathways. The purpose of these retreats is to consider solutions to problems. People are still motivated to thrive and find meaning in their activities. No one is motivated to watch a society collapse into chaos or a dark ages.

What It May Mean

I don't want to read anything more into this one experience than is warranted. There were about 100 people at this retreat, an admittedly small sample. Even though they represent some real powerhouse companies it is but a minuscule fraction of the total of capitalist institutions and their governmental enablers. Bob Johansen, Distinguished Fellow of the Institute expressed the reality that the people who come to these futuristic sessions more largely represent "soft power" rather than the "hard power" associated with marketing and finance, let alone the executive control, of their companies. A lot depends on these folk's influence on those centers of hard power.

However, I do think it significant that Kathi's comment and my surprise experience may at least point to something of a beginning of a trend. There is a growing awareness among those who are committed to the conventional capitalist model (including growth), at least in name, and who are thinking more seriously about the future, and who have noticed that the environment has somehow fundamentally changed, have become open to conversations that suggest that an end to the capitalistic system is at hand! I suppose for those of us who have been trying to communicate the need to rethink everything (to Question Everything) this is a cause for hope. We may yet be successful in our attempts to communicate with some.

I am pretty sure that given the motivations of the participants, the message of declining net energy as a new experience for humanity is still not completely absorbed. The implications of declining energy has still not been completely grasped. But there is a nose under the tent! People are aware that something is not quite right with the world and are becoming open to understanding what is wrong and why. That is, I think, hopeful.

Comments

[Chris23]

Excellent review, George. Thanks so much for joining us this past weekend! I really enjoyed having a chance to talk with you about the future of energy and I look forward to more opportunities.

I too am amazed at the level of receptivity and reality presented by so many major interests. Some of the comments from stakeholders were profound realizations of the paradox that big business is in right now, admitting that their business models are based on consumption yet their authenticity is increasingly moving towards understanding that they actually need to educate their customers to consume less! All in all, a fine reminder that all corporations are ultimately comprised of individuals will very real concerns.

[Shoudaknown]

Great that you found them so ready to listen! I'm wondering, did anyone bring up how both familiar human managed and natural growth systems change directions of development and stabilize at the peak of their vitality by maturing? That's not the usually discussed option, and distinctly available it seems, maybe even a necessary precedent to the more commonly discussed objectives. The economic version was first raised in one of JM Keynes's 'off beat' proposals. There are some conceptual hurdles that my having extensively studied the theory and examples of might be of help to others for understanding it.

[Shoudaknown]

Oh, yea, the other question. Was there any talk of the societal ROI + and - equation, and the energy balance between energy producing and energy consuming sectors?? To keep energy at a reasonable price we BOTH to maintain a HIGH enough EROI for energy producing and a LOW enough SROI for the energy consuming overhead costs for running the form of society we adopt.

Those two seem to be on diverging tracks, for example, with endemically growing energy consuming sectors like healthcare... and a list of other things. So, I guess the question is, is anyone else trying to formalize the whole energy budget model Charlie roughed out rudimentarily in his EROI sustainability paper, taking into account the issues I raised in "Profiting from scarcity" and other writings?

[Paleowham]

This is the best news I've heard in a long time.
Were there any representatives of government there?
Do some of these managers talk with 'hard' power managers?
You're doing great things, and I thank you most sincerely.

[Molly Radke]

Fascinating post, and even an encouraging one, in the sense that"they" are starting to "get it." Really appreciate your thoughtful posts, as those of us, out here among the "great unwashed," need a little access to the "upper worlds" of thought and decision making. Thanks.

[Robin Datta]

Thank you for the work you are doing for humanity. Voices of wisdom have cried out in the past. Those included Malthus, Hubbert, Meadows and even those with authority (Jimmy Carter, in the "Moral Equivalent of War" speech). They had been ignored. The time to pay the Piper is perilously close.

The opening that you have gained is to be commended.

[Jason]

How nice to be asked to be challenging! If they were getting the difference between real and paper wealth than I can only say, Great job. "Still not completely absorbed"... sure, that's one good way to say it.

Hey, did you see that William Irwin Thompson is advocating a third governmental chamber composed purely of intellectuals, scientists, artists and philosophers? (Or something like that) -- "Catastrophist Governance and the Need for a Tricameral Legislature", see http://www.williamirwinthompson.org/blog.html

[George Mobus]

Chris,

I was very impressed with the whole event. I think you and Kathi's whole team are to be congratulated for putting together a pretty comprehensive layout of scenario generation in a way that could be thought provoking and yet graspable in the short time we had.

I am still working on internalizing some of the other information that I got.

Started reading Raj Patel's book, "The Value of Nothing". Extremely stimulating.

[George Mobus]

Shouldaknown (Phil),

...did anyone bring up how both familiar human managed and natural growth systems change directions of development and stabilize at the peak of their vitality by maturing?

There was scattered talk of that nature. In one short breakout session we discussed some aspects of how the human economic system might come to more closely resemble living organisms in the sense that they stop growing an settle into a maintenance mode.

Also, one of the scenarios presented was called "constraint", dealing with how to achieve some form of prosperity while living within our means with respect to the issues of carbon (energy), water, etc. The very fact that collapse and constraint scenarios were on the table indicates a growing awareness that these may be legitimate paradigms for the economy of the not-too-distant future.

Was there any talk of the societal ROI + and - equation, and the energy balance between energy producing and energy consuming sectors??

Not exactly. I did mention EROI and David Murphy's paper on net Hubbert was in the information package provided by IFTF. Readers who may want to follow up should check out Phil's blog, Explorations (Synapse9) linked in the blog roll on the left.

George

[George Mobus]

Paleowham,

There were government-aligned people from other countries for certain. I did not meet anyone from the US. But as you well know most of the governing types in this country are much less concerned about the future and more about the next election cycle. Pity.

As for the "soft" power people talking to the "hard", my impression was that several of them (the ones I talked with) do have the ears of the decision makers. My sense is that just about everyone in the business world is realizing that there is something very fundamental that has changed and they are not falling back on the typical blame-it-on-the-business-cycle excuse. They are sensing that there is something else amiss.

It is possible, if there is time for these things to work out, that once businesses grasp what is happening they will compel government to take notice.

But as I say, if we have time.

George

George

[George Mobus]

Hi Molly.

Thank you for the kind words.

I rather strongly suspect that, in the end, it will be the local organizing at the grass roots that will do most to help us transition to whatever the future will bring with lesser pain. Help wash those "great unwashed"!

The big international companies will soon be faced with very difficult decisions about how to proceed into the future. As always they will start with seeing what their customers are doing. If they see localization starting to take hold (while fuel prices continue to rise) I suspect they will follow suit in some appropriate way. These people are smart. Their only misguidance has been because they, like everyone else, have been embedded in a cultural milieu of expanding energy supplies making growth possible. As the growth paradigm dissolves in a contracting energy milieu I think, now, some of them, perhaps many of them, will work to adapt. My biggest fear is that the "unwashed", but spoiled masses will respond with anger rather than adaptation. If they fail to recognize that the old economy is not coming back and that there is nothing any government can do to stimulate it back permanently, then how will they react? It is so easy to try to find someone to blame and take out our anger on them (e.g. bankers). I think neuropsychology will become one of the most important areas to focus on to understand how we humans will behave in a permanent energy contraction scenario.

George

[George Mobus]

Hi Robin.

Thanks for juxtaposing me with that pantheon of seers! But I think all of us who are starting from having read and grasped their works are, hopefully, advancing understanding at least incrementally. Thanks for your continuing contributions in comments here. They are much appreciated.

George

[George Mobus]

Hi Jason,

I've pulled up the link and bookmarked it. Looks interesting. Thanks.

George

[knowledge is power]

Raj Patel is being used as a mouthpiece for maitreya. Don't be fooled by any of these smooth talking liars.

[George Mobus]

KIP,

Fooled?

Even if he is representing a religious belief in a savior, I'm not sure what that has to do with anything. Does it bias his observations of our poor intuitions about value? You might want to expand your assertion before I will take it seriously.

George