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It is assumed that more education leads to better understanding of complex systems. Some researchers, however, find indications that simple mechanisms like stocks and flows are not well understood even by people who have passed higher education. In this paper, we test people’s understanding of complex systems with the widely studied stock-and-flow (SF) tasks. SF tasks assess people’s understanding of the interplay between stocks and flows. We investigate SF failure of domain experts and novices in different knowledge domains. In particular, we compare performance on the original study’s bathtub task with the square wave pattern with two alternative cover stories from the engineering and business domains on different groups of business and engineering students from different semesters. Further, we show that, while engineering students perform better than business students, with progressing in higher education, students may lose the capability of dealing with simple SF tasks. We thus find hints on déformation professionelle in higher education.
Small Island Developing States (SIDS) face tension between economic growth and environmental impact. Tourism fuels growth, but the resulting solid waste and other pollutants threaten the SIDS’ natural beauty, quality of life for residents, attractiveness to tourists, and economic success. We assess the tension between tourism-driven economic growth and environmental degradation from a limits-to-growth perspective, developing a generic system dynamics model of the problem using 38 years of data from the Maldives to estimate parameters and Monte-Carlo methods to assess the sensitivity of results to uncertainty. We contrast development paths for the next three decades under three sets of policies focusing on promoting growth, managing tourism demand–supply balance, and improving waste management. Findings are counterintuitive; policies focused on better waste management alone are self defeating, because they increase tourism, growth and waste generation, undermining attractiveness and growth later. Policies that limit tourism demand improve economic and environmental health.
Science-based analysis for climate action: how HSBC Bank uses the En-ROADS climate policy simulation
(2021)
In 2018, the Intergovernmental Panel on Climate Change (IPCC, 2018) found that rapid decarbonization and net negative greenhouse gas (GHG) emissions by mid-century are required to "hold the increase in global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C," as stipulated by the Paris Agreement (UNFCCC, 2015, p. 2). Meeting these goals reduces physical climate-related risks from, for example, sea-level rise, ocean acidification, extreme weather, water shortages, declining crop yields, and other impacts. These impacts threaten our economy, security, health, and lives.
At the same time, policies to mitigate these harms by rapidly reducing GHG emissions can create transition risks for businesses - for example, stranded assets and loss of market value for fossil fuel producers and firms dependent on fossil energy (Carney, 2019). Rapid decarbonization requires an unprecedented energy transition (IEA, 2021a) driven by and affecting economic players including businesses, asset managers, and investors in all sectors and all countries (Kriegler et al., 2014).
However, GHG emissions are not falling rapidly enough to meet the goals of the Paris Agreement (Holz et al., 2018). The UNFCCC, 2021 found that the emissions reductions pledged by all nations as of early 2021 "fall far short of what is required, demonstrating the need for Parties to further strengthen their mitigation commitments under the Paris Agreement" (2021, p. 5). Businesses are faring no better. Despite high-profile calls to action from influential firms such as BlackRock (Fink, 2018, 2021), corporate action to meet climate goals has thus far fallen short (e.g. the Right, 2019 analysis of the German DAX 30 companies' emissions targets by NGO "right."). Instead of implementing climate strategies that might mitigate the risks, managers are often caught up in "firefighting" and capability traps that erode the resources needed for ambitious climate action (Sterman, 2015). Firms may also exaggerate environmental accomplishments, leading to greenwashing (Lyon and Maxwell, 2011); implement policies that are vague, rely on unproven offsets, or are not climate neutral (e.g. Sterman et al., 2018); or simply take no action at all (Delmas and Burbano, 2011; Sterman, 2015).
Adding to the confusion are difficulties evaluating the effectiveness of different climate policies. Misperceptions include wait-and-see approaches (Dutt and Gonzalez, 2012; Sterman, 2008), underestimating time delays and ignoring the unintended consequences of policies (Sterman, 2008), and beliefs in "silver bullet" solutions (Gilbert, 2009; Kriegler et al., 2013; Shackley and Dütschke, 2012). These beliefs arise in part because the climate–energy system is a high-dimensional dynamic system characterized by long time delays, multiple feedback loops, and nonlinearities (Sterman, 2011), while even simple systems are difficult for people to understand (Booth Sweeney and Sterman, 2000; Cronin et al., 2009; Kapmeier et al., 2017). Although senior executives might receive briefings on climate change, simply providing more information does not necessarily lead to more effective action (Pearce et al., 2015; Sterman, 2011).
Alternatively, interactive approaches to learning about climate change and policies to mitigate it can trigger climate action (Creutzig and Kapmeier, 2020). Decision-makers require tools and methods grounded in science that enable them to learn for themselves how a low-carbon economy can be achieved and how climate policies condition physical and transition risks. The system dynamics climate–energy simulation En-ROADS (Energy-Rapid Overview and Decision Support; Jones et al., 2019b), codeveloped by the climate think-tank Climate Interactive and the MIT Sloan Sustainability Initiative, provides such a tool.
Here we show how En-ROADS helps HSBC Bank U.S.A., the American subsidiary of U.K.-based multinational financial services company HSBC Holdings plc, focus its global sustainability strategy on activities with higher impact and relevance, communicate and implement the strategy, understand transition risks, and better align the strategy with global climate goals. We show how the versatility and interactivity of En-ROADS increases its reach throughout the organization. Finally, we discuss challenges and lessons learned that may be helpful to other organizations.
Kopainsky et al., (2020) examines intended and unintended transition effects of the Swiss food system on the system's structure and the environment. Kopainsky et al.'s research refers to studies on and is embedded in research streams in global health (Jamison et al., 2013) and sustainable food systems (Willett et al., 2019). It also addresses many of Steffen et al.'s (2015) planetary boundaries, the United Nations' (2015) sustainability goals (SDGs), and potentially could address how they are interrelated, following Randers et al. (2019). It is furthermore embedded in research on natural and human systems, particularly in the intertwined business, supply and demand, governance, ecological and health feedback loops (Swinburn et al., 2019). This feedback view enhances understanding and assessment of drivers towards improving human and ecological health and mitigating climate change.
Why are organizations and markets slow to transform toward sustainability despite the abundant well-recognized opportunities it provides? An important subset of the phenomena this question addresses involves decision-makers recognizing the existence of opportunities but failing to undertake ambitious, effective, sufficient, or timely action. Building on existing research on capability traps, market formation, and managing sustainability, we focus on the forces con-straining organizations from developing the capabilities and market infrastructures required for sustainability transformations. We characterize types of sustainability initiatives and, using causal loop diagramming, visualize structures that enable and constrain how organizations can navigate individually and collectively worse-before-better dynamics resulting from uncertain,nonlinear, and delayed returns. Being under day-to-day pressures and deeply intertwined within their environment, organizational actors find it difficult to recognize, undertake, maintain, and coordinate necessary efforts internally and externally. We discuss research implications and directions for future research on avoiding these traps and accelerating sustainability transformations.