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| | So how are we doing? More than 130 countries have made net-zero pledges since Paris. Those nations are collectively responsible for more than 70 percent of current global emissions. That is a diplomatic triumph of sorts. But pledges are no substitute for action. And with warming already above 1 degree C, time is short. |
Time is short—time for accurate thinking.
If you’ve studied the
2015 Paris Agreement, you’ve been delighted by the pledges, promises, and plans originally adopted by 196 countries. It is a legally binding international treaty on climate change to limit global warming. It accounts for several variables and terms; nations that contribute more to greenhouse gas emissions than others and the ability for more minor economic contributors to get help. It defines transparent reporting of progress and open sharing of technologies. It even describes and addresses implementation, progress tracking, and plan reviews and recommendations.1
What is missing? Teeth.
For those with even a bit of
transactional competence, it is easy to see that this agreement, while well-intended (and without question, an international triumph), is unlikely to produce the intended actions within the dates set by the treaty. With the Glasgow Climate Conference looming (
COP 26 UN Climate Change Conference Oct 31-Nov 12), a few vital missing components render the agreement less a contract and more a pledge of goodwill.
Like any business imperative, it’s delusional to confuse pledges with imperatives. Pledges are intentions. A business can move the needle on intentions; trying new approaches and seeing how they work can be a worthwhile endeavor. However, if an approach doesn’t work, you brush it off and move on to another. Business imperatives are critical to success. If the imperative does not succeed, your endeavor won’t succeed. You can’t just brush off a failed imperative; you must answer to your superiors and your shareholders when an imperative does not work.
Missing 1. Pledges are intentions, not contracts
In all transactions, there are eight key exchanges.
See diagram.
There is a massive gap between Intent to Act and Commitment to Act. You can intend to book your vacation, but until you’ve purchased the tickets, you haven’t moved across the chasm from intention into commitment. Most organizational dysfunctions occur when any person or organization confuses the two—or dismisses any of the eight exchanges altogether. While a sound Commitment to Act (aka contract) includes scope of work, consideration, and other terms, they also include the consequence for a breach of contract or failure to perform. While the Paris Agreement does serve as an international treaty, it seems to focus on pledging increasingly ambitious actions without any discernible consequence for non-action or non-compliance.
Missing 2. Consequence of action (or inaction)
Action (and inaction) produces consequences. In business, results are the outcomes of actions taken or not taken. These are expressed as results or consequences (see diagram). One of the fundamental mistakes about most contracts is the promise of results. We can’t promise results; we can only promise action. Think about any results promised in 2020. Did anyone predict a global pandemic? How about changes in the market or the resulting changes to the employment market?
There are way too many variables swaying outcomes to promise them. We can only promise labor, work & action. Unfortunately, we can’t even promise to lower or stop the temperature rise because we can’t possibly account for all the variables that we don’t know we don’t know. Clearly, the goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. The treaty can only promise actions—and if not clearly defined, these are rare to happen (in business or the United Nations).
Anyone making (or accepting as valid) promised outcomes lacks a fundamental truth: you can only promise to act to do that which is in your power to act to do.
Missing 3. Non-compliance adjudication
While the International Court of Justice (the World Court) can settle disputes among states in accordance with international law or give advisory opinions on international legal issues, jurisdiction is often a crucial question for the court in contentious matters. The United Nations Security Council has the power to enact international sanctions or authorize military action, but these seem more related to peacekeeping and security than to asserting treaty compliance. In the case of the Paris Agreement, those overseeing plan reviews make recommendations and don’t adjudicate for non-compliance. Recommendations don’t have the teeth that sanctions do.
The treaty seems to lack any non-compliance consequence except that the absence of action equals catastrophic outcomes. When the United States announced in 2017 that it would cease participation in the treaty, Article 28 didn’t allow the departure without three years’ notice. There was no additional judgment made against the United States (except for heaps of bad press). The Trump administration simply ran out the clock until the day after the 2020 election whereby Biden signed an executive order to formally rejoin on February 19, 2021.
As Yale Environment 360’s Fred Pierce concludes:
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| | So, how should we judge the success or failure of the Glasgow COP? The hosts appear tempted to paint aspiration as victory. They may hope that delegates less versed in the science of climate change will fly home satisfied that they have delivered a “wave” of net-zero pledges for 2050 and “kept 1.5 alive.” For others, an absence of concrete plans for 2030 would make the aspirations look like delusion. |
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| | Almost 30 years ago, at the Earth Summit in Rio, nations agreed to a convention that promised to prevent “dangerous” climate change. The Glasgow COP is the 26th conference of the parties to that treaty. If it can deliver on 1.5 degrees, it will be the most important. But it could be another 30 years before we know for sure. |
Can transactional competence save the day?
If asked to draw a transaction, you’ll likely sketch two stick figures shaking hands while exchanging money for something.
A Transaction Cycle is a map of sequential exchanges that produce a successful, recurrent transaction. Transactions aren’t merely the point of sale (this is what most people get wrong), rather, they are composed of eight exchanges that are fundamental to every aspect of human transaction. Any abridged interpretation (skipping, dismissing, or blindness to a step) is the root of many problems.
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| | In most meetings across the globe, it is the source of a prominent wasteful dysfunction. From a small start-up to the United Nations, we can’t seem to get things done. |
Although it may not seem obvious at first, the truth is, we accept/decline/counter at every exchange in the transaction cycle. Part of what we may be missing (that transactionally competent people don’t) is that when we skip, dismiss, or are blind to a step, we often fail—and then we don’t understand why things ran off the rails. Every conversation, negotiation, discussion, debate, meeting, judgment, rally, or commitment is a series of exchanges where you and I accept/decline/counter what is offered by another. Every corporation, small business, or new start-up is built as a series of exchanges where you and I accept/decline/counter what is offered. Once studied and embodied, the
revelations keep on coming.
Now, more than ever, we need to understand how to transact with competence, because the world cannot solve the climate crisis without it. For some, it may seem that the imperative to act is something to aspire to in the future. However, the pandemic revealed how easily a global issue can disrupt or destroy commerce and turn a bark into a bite.
