Nomadic survival

Although you ultimately set out a positive view, Nomad Century paints quite a dystopian picture of how the climate crisis might play out. Could you give an overview of the disruption that climate change could inflict on communities, habitats and society?

I work with scientists at the UK Met Office to map what we expect in terms of extreme events. I call these events the Four Horsemen of the Anthropocene. They are the risk factors for human habitability: heat, fire, flood and drought. Drought, which threatens agriculture, mainly results from heat – which also kills people directly. Hot air holds more humidity and ensuing floods and fire damage economies affecting people’s livelihoods as well as their lives.

As large portions of the world become increasingly unliveable, the more liveable parts will be mainly towards the north. We will therefore see a migration not just of people but also of capital investments, infrastructure expertise, resources, agricultural production and industrial production. Everything will start shifting north. Climate migration is currently mainly within countries. Increasingly, it will occur across borders, regions and continents.

We often talk about climate change in terms of mitigation and adaptation. You are hopeful we can adapt as a species by drawing on some of our primal nomadic tendencies. Could you elaborate?

Yes, we need to mitigate, and we need to avoid making things worse. That requires much faster decarbonization: not just of our energy systems but of our agricultural systems and the way we use land.

We need to be pragmatic too. That involves various types of adaptation, one of which is moving people in a managed way before it becomes a disaster. Once you are evacuating people, that is a failure of management. We should target people at the age when they move. Typically, that is between their late teens and early 30s. They move for education, work, apprenticeships, training, curiosity or love. And they also go because everybody else is going – which makes it a network-forming time too.

I think that we need to be talking about that and directing our infrastructure, investments and industrial strategies towards safer places. That will include turning towns into cities, expanding existing cities and building entirely new ones.
 

You talk extensively in the book about the opportunity to fill key strategic industrial gaps relating to climate and nature-based solutions. Can migrants help plug some of these gaps?

Absolutely. People move for work, and they generally move to where the work is. So I don't think that's a problem. But we need a better steer from our leaders. Recently, there has been far too much of the 1990s principle that you just leave it up to the markets. I think we do need bigger government. We need to face up to the fact that we need to move people in a managed way. There hasn’t been a single industrial transition, and certainly not an energy transition, without considerable investment and direction from the state.

What role do you see the private sector playing?

The private sector wants certainty on government direction on all of this. They don't want flipflopping on policies. They don't want to invest in solar only to discover that the government's decided to re-subsidize gas. Why would they invest?

The same goes for immigration. I’ve spoken to many leaders of industry who want migrants and certainty in their workforce planning decisions. They also want better skilling and training programs for existing and new populations because it is difficult and expensive for them to make investments in these new areas. And they want regulatory certainty too. Standardization between nations is so important, not just regionally but globally. It helps with modularization of our energy value chains, which brings down costs and increases production.

Our readers make capital-allocation decisions and are thinking about risks and opportunities. What do they need to know?

With decarbonization, we have gone through a tipping point. Energy will be produced from renewables and, eventually, entirely from non-carbon sources. How quickly that happens is still to be decided. But it means that investing in fossil-fuel dependents is much riskier and may not bring you long-term rewards.

There is huge opportunity in many of these nascent technologies – from biotech for food and material production to new ways of generating and storing energy to new grid infrastructure. But there are risks, of course. Not all of these initiatives will become massive money-spinners, so the public sector needs to be involved to mitigate some of the risks. However, there is value in investing in things that actually benefit humanity.

Some pension funds now take the view that while their duty is to provide a pension, there is no point in providing a pension in a world that is not worth living in.

I think that is very valid. For some reason, we can be embarrassed about that kind of value system – perhaps because of increasing secularisation. These kind of values should transcend any belief system. We should know what is right and feel satisfaction from spending our lives productively. Otherwise, we are just making money for other people. A climate-ridden, unequal, unjust world is a scarier place, and that risk is not just to our personal safety but also to our wealth.

Changing our mindsets around migration obviously requires a massive shift. And people with certain political leanings might be more open to it than others. How do you see that challenge?

We are living at this quite unusual time where the narrative around migration has been directed and dominated by populist accounts. We had Brexit in Britain, which was a helpful stepping stone for Trump. And we have also seen the rise of populism across the EU and around the world.

The populist narrative hasn't changed. It's a denial of the complexity of everything and a distillation of all society’s problems into simple slogans – and when that fails, the demonization of marginalized minoritized groups, most obviously powerless immigrants.
 

Could you expand on how this denial of complexity through populism leads to the marginalization of these groups?

Yes: immigrants are blamed for policy failures. If there is a housing shortage or people have to wait longer for medical care, that is supposedly because of immigration. But if you drill down into it, the problem’s quite often the state’s failure to provide enough housing for the existing population, let alone increased populations.

The point is that the populist narrative doesn’t help the economy. Most economies need greater immigration. Indeed, one study showed that US counties with larger levels of immigration experienced an increase of 57% in manufacturing output per capita, up to 58% increase in agricultural farm values, and even 20% higher average incomes and educational attainment.¹ Another concluded that immigration to the US between 1990 and 2007 boosted the average wage by USD 1500.²

A large part of our success as this globalized, industrialized species is the fact that we move around cooperatively and create these melting-point fusions of technologies and ideas. That’s the origin of cities. They, and universities and all centres of excellence, are entirely built on immigration.

We are also living at a time when most northern countries are suffering this huge demographic decline; we are not having enough babies to support our ageing populations. How do you reverse that? You can try paying women to have more babies, but it doesn't work. The only thing that does work is immigration. This doesn't mean that immigration is problem-free. You need to invest in it and treat it like any other investment. A social investment is also required. Part of this is investing in projects that help with language skills and cultural learning – not just for immigrants, but also for the existing population.
 

Better planning is a big message from the book, whether it is from government or indeed from investors. So when they are investing in physical assets, how should investors think about their location?

That is really important – looking at the future demography and climate safety of the place that you are investing in. Some places are literally becoming uninsurable because the insurance industry recognizes that they are too much of a risk – as in parts of California, Florida and Europe. This creates obligations whether lending or investing. We need to be pragmatic on decisions on where to abandon and where to adapt and grow. Climate moves businesses to places of growth with increasing workforce and increasing vibrancy of community and innovating.

When investing in assets, you also need to make sure they are fit for the new conditions we are living in. You cannot make investment decisions without considering the drastically transformed environment of a few decades to come – the physical environment, the biological and ecological environment, but also the human environment.

There is much research on buildings and infrastructure in terms of how you protect them against physical climate risk. But the human element is a fascinating new dimension.

It’s crucial even if your particular business is not affected. Let’s say the area’s economy is based on agriculture and that agriculture is declining or has gone due to climate change. Either people will be too poor to keep other businesses going or they will start moving away. And then the community enters a death spiral. Very few businesses can survive in a town that’s depopulating and dying.

We saw that with the Rust Belt. It is now reversing to some extent, but with coal and the coal-mining towns, that kind of death doesn’t just affect coal miners. It is much bigger.

In these situations, investors have a decision to make. You might decide that it is a good place to be because you can offer an alternative industry. That could be a great opportunity if you can invest in the necessary transfer of skills. Or you might recognize that it is not appropriate because of the changing environment – and that the place should be left to die. These are the decisions that people need to wake up to. We are living in very volatile times.

Land use is a massive part of the climate crisis and the energy transition. How does our relationship with land need to change?

This is key, and something not picked up on very often. Choice around land use is crucial because many of the equations – whether it is biofuels or rewilding or food – are choices that must be made over the same acreage.

As we look to make single pieces of land do more, one solution lies in the energy transition. Once we ramp up renewable energy production – everything from solar and wind to deep geothermal – we can use marginal or desert land to do all sorts of things, including agriculture and power generation.

And a beautiful aspect of this is much of this land is in very poor places, so some of the world’s poorest people should benefit. But we need strategies, policies and regulations to ensure this doesn't become yet another colonial exploitation.