The keystone to the deal concerns the capacity of South Africa to finance the rapid scaling of renewables generation through a German-style feed in tariff that pays a premium on green energy produced and fed into the grid. What a great way to get private citizens and commercial investors to cough up money for the equipment…only problem is the cost. Even Germany is beginning to groan at the cost to the public purse. According to one estimate, “In 2008, the tariff’s estimated cost was 3.2 billion euros, or $5 billion. This amounts to less than two-tenths of 1 percent of the German economy, hardly a significant price tag to encourage a technology that delivers 15 percent of the nation’s electricity. Furthermore, the cost is spread across the entire ratepayer base. In 2007, the added cost per household was 3 to 4 euros per month, about the price of a latte”.

For South Africa, the cost to the tax payer (or spread across all consumers) is manageable at low levels of renewables, including the current target of 4% of the total mix by 2013. But to catalyze industrial development and jobs, and to deliver enough ‘green’ to exporters, will take 10-15%, and rather fast, say by 2020. At this scale, it is just not practical to finance this domestically…hence the problem.

One possible solution, and the topic of the work that i am involved in with Associates Maya Forstater and Saliem Fakir on behalf of the South African Government, is to cut a deal with key governments making international climate financing commitments to subsidise the feed in tariff rather than pay for projects. Whilst the feasibility study is a work in progress, initial estimates suggest that the implied cost by carbon ton abated might be as little as US$10, closer to the cost per ton of avoiding deforestation than the much higher costs normally estimated for promoting most renewables at this stage in the game.

Work-in-progress, certainly, but progressing quickly, so watch this space as it develops…

Not really, the ultimate loser is once again the UK, its leading politicians which ingloriously sought to cover it up in the spirit of good inter-cultural relations with the Middle East. In truth it beggars belief, that first Mr Blair and then Mr Brown, both who liberally evoke their religious fervor and moral rectitude, could choose to suppress what seemed obvious to us all, that dirty deeds had been committed and needed to be surfaced and penalised according to the law, or at least as close as one can come to that these days. Anwar Ibrahim, in an earlier role as President of AccountAbility, wrote personally to the now Prime Minister pleading with him to take the high ground on this issue as he entered office, citing the ‘ethical north’, a political opportunity, but also an opportunity for the US to regain its stature in international benchmarking of good practice. Sadly there appeared to be no one at home at Number 10, and the advance met with stony silence…imagine how much better this would seem and be if Mr Brown had acted then.

And why do I say once again. Well, what with MPs’ heading for the courts over their liberal attitudes towards expenses, and the murky world of calls to war against Iraq in the spotlight, it is hard not to see a pattern of all-too-visible moral collapse. In fact, the pay-off of Mr Blair seeking at all costs to maintain the UK’s standing in the world has achieved, in a nutshell and as fast as they take to fall to the ground, exactly the opposite.

Thank goodness it just doesn’t matter to anyone much, least of all the citizens of that fair isle who are just trying to sort out their lives, their livelihoods and their families’ security in the face of that more legal transgression by the financial industry, egged on by, yup, you guessed it, those Anglo-Saxon politicians from the UK and the US.

Davos is a spectacle to behold, always threatening to reflect our worst Darwinian inclinations. Copenhagen, on the other hand, was meant to reflect humans at their best, open to collaboration for the public good. And yes, you have guessed it (you smart, cosmopolitan blog readers), life has its way of inverting the expected. Copenhagen actually demonstrated humans’ capacity to be petty, narrow-minded, and deeply tribal. far from being focused on the public good, it was focused on the private gain of vested interests largely not in the room, whether they were businesses, parochial politicians or even short-sighted populations of citizens who should have known better.

And Davos…well it is what it says on the tin, in one moment abstracted from any sense of reality, at another exhibiting the human ego at its most profoundly revolting. Yet it somehow unlocks the participants’ passion, innovation and a will to imagine and take risks. In muddling up the public good with private gain, it evokes much of what is amazing about our species and without doubt explains how we have survived to date (for better and worse). It is in Davos that investors in green technology have the stage,

yes aching for public subsidy if they can get it, but in truth knowing that they will fund the low carbon economy if it is going to happen. It is in Davos that the Chinese business community schmoozes with Western Governments and vice versa. It is on these snowy hills that more irreverent potential is discussed than could be dreamed of in any formal multilateral procedure.

Yes, a Managing Director of the World Bank was right when she reminded us at Davos that the farmers we were discussing were not in the room. And who knows what complex political equation Strauss Kahn from the IMF was making when he supported Soros’s proposal to unlock capital to fund climate management. And it is slightly crazy making when Sarkozy proposes to rewrite the rules of capitalism (better than his Italian counterpart though), and it makes you wonder when Davos declared itself ‘green‘ on the back of a half-hearted labelling of carbon-spewing, attending SUVs. But frankly such weaknesses are chicken-feed when compared to the cynical nonsense that stalked the corridors of the Bella Center in Copenhagen just weeks before.

You may well despair, and I might join you for an accompanying drink when you do, but Davos is more about our future than Copenhagen will ever be in bringing more of the right people to the table, and providing more opportunities for the deal making that is needed to safeguard our children and theirs in turn. We can bemoan the elitism, the false dawns too often announced and then neglected forever more, and the fly-in humbug of much that is said and neither meant nor even heard. But through this there is an authenticity in the demonstration of real power, truly extraordinary wealth, unbelievable innovators (for whatever reason and end), and a will to grasp the world as it is and shape it into the future. The tens of thousands leaving Copenhagen were angry, burnt out, and deeply exhausted. Those leaving Davos will be tired, often confused, but in the main better informed, connected and able and willing to act.

Have I drunk the Davos Kool Aid for too long to have any remaining sense? Well maybe, self-diagnosis is not humankind’s speciality, far from it, and I am no exception to the rule. Certainly Davos exhibits in technicolor more than it resolves what I called in an earlier blog this week sustainability’s very own Valley of Death, in a nutshell our ’struggle to innovate at scale in a timely way in addressing the world’s toughest problems‘. But its more likely that the solutions lie lurking beneath the canapes at Davos than the decrepit cheese sandwiches of Copenhagen if only because the folks in the former are actually treated with respect, treat each other in the main with respect, and have a will to live rather than just survive.

Billions of words, quite literally, will be spoken and even on occasion heard about these all-important topics. But are they an ‘all-sorts’ collection, or do they provide the backdrop to an X-ray of our current needs and options.

It is less than 600 hours since we passed into this second decade of the new millennium, and we are already struggling to keep up with momentary events. We have witnessed yet another horror in Haiti and, despite the inevitable shortfalls, a clear show of all that is good in our international community, compassion and response. And we have seen the spectacle of American democracy punish Obama through the ballot box, which could drive him to embrace a more populist economics, and an unseemly parochial politics, as witnessed already in Clinton’s pronouncement on internet freedom in support of Google’s tangle with the Chinese. And on that topic, we have seen China emerge from Copenhagen in a very different frame of mind, less inclined to pursue its designed humility of recent decades, and more willing to exercise their muscle by laying down the law, certainly their own, and increasingly the international rules of the game.

Davos 2010 is framed in no small part by the results of our collective efforts since its predecessor. Davos in January 2009 was a conversation about two fundamental needs, to drive economic recovery through strong fiscal stimulus and a guided, rescued financial sector, and to secure a strong global climate deal in Copenhagen.

Positively, the global economy did not crash and appears now to be on the mend, largely because of China’s economic resilience and our collective fiscal stimulus. Also, the financial sector did not crash, and much of it is now emerging from its own Y2K in rude health, indeed some would say too rude by half. The good news is that the greatest recession in history has, we hope, done its worst, and we are alive to tell the tale.

Copenhagen was a mess, and the outcome less than most desired or, for climate deniers and carbon profiteers, feared. Positively, however, low carbon economics did move into the mainstream. There is no doubt that China, India and Brazil understand that if their time has indeed come it will have to be a ‘low carbon moment’, and they are readying themselves, more than most of the North Atlantic incumbents, to win in this arena come what may.

The ultimate fall-out from the events of 2009 is yet to come. On the economy, the West has now acquired a debt hangover of almost unimaginable proportions that could go down in history as the pivot on which global economics finally swung east and southwards. On climate, it seems we are heading for a 3-4 degree centigrade increase in global temperatures, a cause for huge concern unless the emerging scandals around the IPCC wrongly convince us all that it was all a self-serving fuss about nothing. Crucial is how we pick up the pieces of last year’s exhausting melodrama, which brings us to the topic of governance.

The last 12 months has deprived us of any remaining trust in our collective ability to do the right thing or to get it right in practice. Yes, we saved the bankers from their own folly, but once rescued they have returned to their old ways. And yes, the huge fiscal stimulus did help, but in so doing we have mortgaged our children’s futures, and done nothing to prevent a rerun of the housing and consumer booms that helped to cause the problem in the first place. And on climate, we must hope that self-interested national economics drives us along a low carbon growth pathway because the fractured international relations emerging from Copenhagen will not provide the framework for more conscious collective action in the future.

Davos 2010 should be about reinventing global governance. Our experience of Doha (remember Doha?) and Copenhagen (remember this even if you want to forget it) say it as it is – our way of handling international affairs is simply bust. We have to fix our approach to climate and trade, but also a ton of other cross-border stuff from energy security to arms proliferation and terrorism. The UN, frankly, hardly passes the ‘laugh test’ these days, the G8 is well past its sell-by date and the G20, MEF and now BASIC remain at this stage immature manifestations of our governance problems rather than emergent approaches to solving them.

To give due where it is warranted, the WEF has recognised that the real agenda is about global governance in launching a major initiative at Davos 2009 entitled the ‘Global Redesign Initiative’. This was the frame for its Dubai-hosted ‘Global Agenda Councils’ meeting last November, and in fact will be softly humming (hovering up knowledge and insights) in the background throughout the predictably chaotic discussions on the Magic Mountain this month.

Global governance is of course not just about what happens globally, in fact quite the reverse. We must all be concerned that the US courts appear intent on strengthening the corporate lobby, just as deepening restrictions in China reinforce unhelpful, populist nationalism. National developments profoundly impact our capacity to build effective international governance.

Crucially, we have to face up the intimate relationship between effective global governance, and enabling corporate governance. Despite brave attempts (by collective initiatives like CERES and private initiatives such as the Al Gore-Chaired Generation Investment Management, our efforts to balance the public good with private rights have been less then effective. In the main, they have been undermined by the narrow, Anglo-Saxon fiduciary approach that privileges private shareholders whose representatives, fund managers, have in the main little interest in the real economy let alone our future. Let us not forget that it is the corporate community in the US, driven by short-termism embedded in their interpretation of fiduciary accountability, that more than any other driver has undermined that nation’s capacity to act with others internationally on climate change.

Climate change and financial regulation, definite topics for Davos 2010, need to be seen as two sides of the same coin, and that coin can be best understood as being about economic not ‘global’ or even national governance per se. Our greatest challenge in addressing climate change is to channel finances into low carbon growth and development. Although we might well need some lubricating public funds for this, the overwhelming proportion needs to come from private sources, as Project Catalyst and others have pointed out. The greatest impediment to such an investment in our very survival is the short-termism of the bulk of the international investment community that leads them to discount the value of a future economy and so rationalise their unwillingness to invest our funds according to our undoubted needs.

Economic ownership must be part of the global governance agenda, and not just because of the unruly behaviour of Messrs Putin and Chavez. ‘Corporate responsibility’ has squeezed some additional public value from today’s dominant economic model, certainly. And public policies can make a difference when they can get to the statute books and be effectively implemented, probably more so in China today than in the US and maybe even Europe. But its not enough, and in the cases of climate and capital markets, way too little too late. Yet today’s re-emerging force of public ownership, through sovereign wealth funds, state-owned enterprises, public-private partnerships and renationalisation, remains a desperately immature alternative that will not contribute to a new social contract without more open minds, serious design innovation and effective political engagement. We do not want to go backwards towards a 20^th Century model of public ownership. But today’s approach will not do, and we need to build new forms of capital ownership and stewardship that secure the public interest and private rights at an historic time that requires unprecedented innovation in governance and economy.

Davos 2010 should be about global governance, with a focus on its national and corporate underpinnings. It should see Copenhagen for what it was, not a disaster but the clearest possible signal of the need for radical change in how we organise our affairs. Similarly, financial regulation should not be seen as an organ of retribution, but a more fundamental move to reassess the nature of capital ownership and how associated power is exercised. Resurging public ownership and the up-swelling of all forms of public-private partnerships should be welcomed as the most important experimentation in organising our economic affairs since Hayek’s disciples won the ideological battle of the 1970s and thereby changed our lives and our understanding of ourselves.

Hours to go before we can tick off the millennium’s first decade. A proliferation of learned and witty articles reflecting backwards and predicting forwards grace the pages of every media portal. Much has happened in this opening decade, in fact so much that it is hard to know where to start or how to judge what history will find important. Al Queda has become a household name, but will it’s dark record and call to arms even be remembered in another decade. Surely history will score high the US’s invasion of Afghanistan and Iraq, or will this be overshadowed by the longer-term implications of the cat and mouse game with Iran over its nuclear programme and Israel’s steady drift beyond the pale. Or will such politics prove trivial in the face of  the amazing developments in biology and genetics that could mark out the decade’s contribution.

Tomorrow’s history is a fickle judge, both in what it chooses and what or who’s story it picks to tell the tale.

One lens through which history can be viewed or predicted is that of leadership, who we have applauded and for what. And we do make some curious choices. Jut take a look at the list of the most important 100 leaders offered by Time Magazine. Time chose for its man of the year in 2004 George W. Bush “For sticking to his guns (literally and figuratively), for reshaping the rules of politics to fit his ten-gallon-hat leadership style and for persuading a majority of voters that he deserved to be in the White House for another four years”. And after a smarter moment in selecting Bono and the philanthropic Gates-duo, Time continued its tilt towards (our) madness by selecting, in 2007 Vladamir Putin as person of the year, arguing his importance rather than his likability or ethics. Europe meanwhile finally succeeded where would-be continental presidents from Napoleon to Hitler had failed (by the way, Times chose Adolf as man of the year in 1938) in annointing Belgian Prime Minister Herman Van Rompuy as the first “president of Europe”. And in 2008, Times annointed Mr Obama as man of the year, slipping in just a month before the American people decided on the same guy as their next president, and barely a year before he was awarded the Nobel Prize for Peace for his plans, potential or at least aspirations for making a difference.

Now the Nobel Prize list for the decade looks very different from Time magazine’s, which is rather parochial in tending towards choosing Americans and the world’s more obvious, generally fairly machismo, leaders. Nevertheless, three out of ten peace prize winners over the last decade were (deservedly but still wildly disproportionately) from the US, Jimmy Carter, Al Gore and of course Barak, with non-US folks including some other really great choices such as Kofi Annan (2001) and Mohammad Yunus (2006).

Kofi Annan is also a member of another important leadership group, The Elders, self-described as “an independent group of eminent global leaders, brought together by Nelson Mandela, who offer their collective influence and experience to support peace building, help address major causes of human suffering and promote the shared interests of humanity”. I must say, despite the rather cliche name, this is an extraordinary group of people, who in fact are far more than ‘thinkers’ as amazing, risk-taking ‘doers’, including Aung San Suu Kyi, Ela Bhatt, and Mary Robinson.

Juxtaposed to the Elders self-effacing manner are this generation’s business leaders. Business leaders, especially those running global corporations, have become international statesman and stateswomen, shaping culture, economy and politics, and making life and death decisions over the fate of communities in the name of, and with legal accountability to, their shareholders. Whether history will recognise them, some have provided real leadership over this decade, such as Anita Roddick, the ground-breaking founder of The Body Shop, Ratan Tata, Lord John Browne, and more recently Jeff Immelt. Despite these and other exceptions, history will mark this decade as a low point in peoples’ trust of its business leaders. An opinion poll in the US (the home of business where distaste for governments pervades) revealed for one of the first times greater trust for politicians than business leaders. And perhaps not surprisingly. Whilst not fairly all tarred with the same brush of arrogance and greed, Lloyd Blankfein, Goldman Sachs’ Chairman and Chief Executive, somehow captured their untimely self-image by declaring his and his colleagues huge bonuses as being a legitimate reward for doing ‘god’s work‘. By any financial measure save for the returns to illicit trade in drugs, arms and people, executives from the financial sector have certainly led us forward over the last decade. The Wall Street Journal, in an unusually sheepish article, predicted bonus payouts in the U.K. financial sector to rise to US$9.82 billion) in 2009 up 50% from a year earlier but, it hastened to point out, well below the 2007 peak.

Social entrepreneurship has emerged in the last decade as the touchstone of ‘true leadership’, blending Schumpeter’s animal spirit of entrepreneurs with the saintly aspirations more traditionally associated with the tranquility of priesthood. Wangari Maarthai, awarded the Nobel Prize for Peace in 2004, would figure high on many lists of this decade’s social entrepreneurs. But the vast majority of such folks are unsung heroes, often vilified and persecuted by their own communities, or simply ignored and buried by history’s short-sighted authors. Bill Drayton, the Founder and President of Ashoka, is the single most important source of this narrative and its explosion onto the world’s stage, and is responsible for surfacing many of tomorrow’s unsung heroes whose success might be improved through validation today. But many others have nurtured and validated this leadership model, including the powerful Latin American network, Avina Foundation, founded by the Swiss billionaire, Stephan Schmidheiny.

The 18th December 2009 in Copenhagen was meant to be the decade’s, and some would say, history’s greatest leadership moment. On that day, the world’s political leaders, watched in their every move by civil, labour and business leaders, gathered to agree on a collective pathway to manage climate in humanity’s common interest. Instead, they demonstrated their, or perhaps more aptly our, inability to handle the complexity of the moment. Whilst we might blame some of the individual leaders who participated in this sorrowful spectacle, history will take a more structural view of the driving forces behind this Babylonian nightmare.

Most of all, perhaps, history will mark the Copenhagen event, and indeed this decade, as the moment when we moved into a period of truly multi-polar leadership. The evolving significance of the G20, the Major Economies Forum on Climate and Energy, newly-minted power configurations such as the BASIC nations, and venues such as the World Economic Forum, all point to a period of turmoil where who governs, how and with what legitimacy and impacts is up for grabs. The global climate deal process was the perfect storm that outed this emergent pattern, but certainly did not cause it, and cannot be understood at all as a stand alone experience.

History is likely to view this, and perhaps the next few decades, as a chaotic, transition period. New global actors seeking to define their leadership roles individually and collectively, and how best to play them out. Existing political institutions and ideological assumptions and norms will creak and groan under the pressure, and in some instances fracture and collapse. Experimentation in new governance approaches will proliferate, with the difference between state and non-state variants becoming increasingly blurred and perhaps even irrelevant.

Personal leadership over this period will become a vital element in guiding and stabilising the ‘Great Transition‘, all the more so as the legitimacy of institutions are increasingly questioned, and the sanctity of political norms about individual and collective rights are placed under enormous, and in some instances fatal, pressure. Looking back on this decade’s celebrated leadership, I can only hope that next decade’s leaders will find ways to blend the wisdom and mobilising forces of the Elders with the brutal power of the likes of Messrs Putin and Blankfein and the will to invent and innovate of Mr Drayton’s social entrepreneurs.

Tomorrow’s history is rarely created by extraordinary moments, it is merely punctuated by them.

Copenhagen will be seen as a failure of vision, leadership, and compassion. The Copenhagen Accord, ‘noted’ in extra time at COP15, will be stuck with the Sudanese’s naming as a “suicide pact”. And President’s Obama, Hu and many others, however they speak to their domestic constituencies, will have been party to this failed attempt to strike an ambitious deal.

Tomorrow’s history, i suspect, will profoundly disagree with this finger pointing diagnosis.

Studied history will point to Copenhagen as the last serious attempt to use 20th century techniques to arrange our 21st century affairs. Seeking consensus between 193 sovereign states through a zero-sum negotiation process was always going to be a fool’s errand. It failed because it handed exclusive rights to national governments, leaving 99% of the energy of business, civil society, cities, and the youth (just to same a few) as frustrated bystanders (see them in my Walk through Babylon). It failed because it sought to secure a “one for all, and all for one” consensus, unworkable even in the relatively simple world of trade. It failed, finally, because of its use of old style negotiation techniques where we have learnt so much from the “deliberative” approaches of communities and business in envisioning change and creating unlikely pathways to achieving it.

For Copenhagen to serve us well, we must learn from it.

It has failed because our global commons can no longer be managed by top-down, government-led, compliance focused, publicly-funded agreements between nations. Presidents and prime ministers, along with legions of negotiators, have been complicit in this by playing, frankly, their well-defined allotted roles in appealing to their domestic political constituencies (accountability) and in seeking re-election (whether in democracies or not). Who can blame folks for doing what we ask them to do, even if in the last hours we demand that they shift gear and behave as if they were chosen to lead in saving the global commons (which they were decidedly not).

Two things need to, and can happen now.

The first of course is to deal with climate with the right people where the action is. Whilst not wishing to trivialize today’s pain, we can deal with climate more effectively by catalyzing ambitious national action leveraged with international co-operation. We can get a better global deal, but only once nation’s have whetted their appetite for low carbon growth and development through action, not theory. This is not, as i have repeatedly argued, downgrading expectations, but upgrading them by leveraging where the real energy for change lies, and then uploading the results into a far smarter global deal going forward ( see my Revising Plan A).

Second concerns our global governance arrangements. Reforming global governance has been an esoteric topic for many years pursued by policy analysts, academics and international bureaucrats offering unintelligible diagnostics and incremental and largely technocratic recommendations. Copenhagen, and its potentially ghastly implications, makes this obscurity unacceptable. In the last two decades we have in fact already invented far more effective ways to do business internationally, from how we do global health through public private partnerships to building the hadron collider in CERN (it works now, but the amazing thing about it is how the global scientific and political community made it happen, not merely that it is ‘about the origins of everything’). We do not need another Commission made up of those who have presided over our failing global institutions, we need fresh blood and urgency in surfacing today’s institutional innovations and working out how to make these work in practice.

COP15’s real legacy.

Coming back, then, to climate. We should surely be disappointed by the final deal. But we are now poised to have to invent an alternative pathway in moving forward. John Maynard Keynes, the most extraordinary 20th century economist, argued that ‘our challenge is not to invent new ideas, but rather to let go of old ones’. Well, if he was right, and i suspect he was, then COP15’s greatest contribution to the public good may be to bury, once and for all, our outmoded ways of doing global governance. Such an achievement, whilst sad to contemplate today, may turn out in tomorrow’s history to be an extraodinarily important legacy that served us and our children well in decades to come.