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Energy Transition

Save the Future

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Franziska Gaupp

Franziska Gaupp

20 min read

27.12.2020

SAVE THE FUTURE

a long-termism experiment

It is widely understood today that the current economic paradigms of growth and industrialisation need to shift towards a more inclusive and sustainable way of thinking. We need a new system that addresses growing inequalities in society, accounts for negative externalities, such as environmental pollution, and that explores new types of governance, for example through empowering citizens in decision making.

A key component in this transition is a shift from valuing short-term gains and profits towards long-term thinking that includes the next generations’ wellbeing, too. In 2019, EIT Climate-KIC, Europe’s leading climate innovation initiative, launched a series of new large-scale projects, so-called ‘Deep Demonstrations’, to explore systems innovation for a greener, net-zero future. The portfolio of interventions includes education, citizen engagement, finance, policy and other levers of change that catalyse fast decarbonisation. Out of the eight Deep Demonstrations currently in operation, one is called the Long-termism project. In it, eleven expert partners focus on changing mindsets and explore ways to stimulate long-term thinking. To foster long-term oriented behaviours, mindsets, and action, they are trying to answer a set of questions. For example: ‘What new types of governance and rule-setting are needed to redesign institutional structures?’, ‘Can frontier technological prototypes be used to redefine our notions of value?’, ‘How can we use the power of collective movements to democratise rulemaking?’ and ‘In what way can data transparency and capacity building empower individuals?’.

Enabling collective action and opening new democratic spaces can create a groundswell of pressure for change. One way of doing this is through social and economic experimentations, for example in the form of social simulations. Social Simulations combine game elements with systems analysis, role playing, and simulation techniques. This way, they allow players to experience hypothetical events and scenarios. In this blog post, I introduce SAVE THE FUTURE. It is a simulation that seeks ways to transform the financial system by exploring alternative notions of value. For example, it employs ‘green tokens’ as a complementary currency. The simulation was developed for EIT Climate-KIC’s Long-termism project and has been tested and further improved by project partners and volunteers.

Alternative currencies for long-term thinking

Our current monetary system systematically encourages unsustainable behaviour patterns and threatens social and environmental sustainability. Because bank-debt money carries interest, the discounting of future costs and incomes inevitably leads to short-term thinking, as Bernard Litaer explains in the Club of Rome – EU Chapter report on money and sustainability. The process of compound interest (interest on interest) imposes exponential growth on the economy, which is, by necessity, unsustainable in a finite world. Furthermore, the set-up of our current financial system fosters wealth concentration and an increase in inequality. We need to re-think and shift the discourse around ‘money’. We need to empower individuals to recognize the current monetary system as a systemic cause for short-termism, inequality, and unsustainability. One popular, practical solution to this problem is complementing the prevailing monetary monopoly with a ‘monetary ecosystem’. The information and communication revolution that we are experiencing today, with innovations like the blockchain technology, can help us in this. Because they are open-source, such technologies prove it is possible to create pressure for change by enabling pioneers to take collective action and create alternative designs. ‘Emerging democratic socio-ecological money system(s) empower individuals by offering mechanisms for adequate resource allocation and behaviour change aligned with incentives.’ says Dr. Marcus Dapp, a cryptoeconomics expert at ETH Zurich and one of our Long-termism project partners. Although such a solution profoundly challenges the dominant fiat currency system, it can grow independently through addressing daily challenges faced by communities. For instance, it could adjust resource allocation to local needs. Over time, it could become a self-sustaining, resilient, less manipulable network of digital money and assets.

Within the Long-termism Deep Demonstration, the Centre for Systems Solutions developed the policy simulation SAVE THE FUTURE as a tool for testing various institutional and policy solutions that could be combined into an alternative, more sustainable and long-term focused financial system. The simulation is set in a stylized world, where players (divided into government, investors, and entrepreneurs) make choices about industrial investments, international trade, social development, and environmental management. In the process, they try to balance their own short-term goals with such long-term consequences for their country and surrounding lands as water pollution or wasteland creation. The simulation introduces new economic ideas, such as alternative currencies, to explore if and how they would shape the economic choices of participants.

Stock market in the Save the Future simulation

Stock market in the Save the Future simulation

Implementing a ‘green currency’

SAVE THE FUTURE includes two countries, Kenorland and Vespugia. The countries have a conventional currency but can introduce, through their government players, a green, alternative one. The alternative currency design in the simulation is inspired by existing complementary currencies, such as the ECO, which mobilise resources in order to reduce climate change impact and support sustainable behaviour. The green currency is a token currency, complementary to the conventional one. Its goal is to shift the players’ behaviour towards more sustainable actions, such as wasteland regeneration. The green currency in SAVE THE FUTURE is implemented by the national government and can be compared to an environmental tax or a green subsidy. The government player is able to raise and decrease the costs and benefits of certain actions that are or need to be paid for in green currency. The alternative green currency is tied to the country’s currency in a ratio of 1:1. In any operation where alternative currency is allowed, the system first tries to use this alternative currency and in the second step complement it with the regular currency. Actions that generate green currency, which is then paid out to players, include wasteland regeneration, closing a pollution facility, starting a clean tech facility, or investing in R&D in clean technologies. Actions that lead to the removal of green currency tokens from the players business accounts are pollution, GHG emissions, natural area removals. Each entity (businesses, investors, or government) has an additional account for the new, green currency. The government can decide on its own whether to accept taxes in the alternative currency. Likewise, each organization (businesses and investors) can decide whether to accept payments in the alternative currency. To give players the opportunity to experience the value of alternative currencies, the game is divided into two periods: In the first part, there is only one currency. As entrepreneurs build facilities, pollution increases, wastelands spread, water gets contaminated, and wellbeing in the cities decreases. Then, the game is paused, and all players are called into a ‘town hall meeting’ on Zoom to discuss the current economic and environmental situation. The game moderators reveal the option to introduce an alternative, green currency. The players decide if the government should introduce it. In the second part of the simulation, players can experience how the introduction of a green currency changes the economy and the behaviour of the players.

The simulations conducted so far show that people take greater care of wastelands after the green currency, which enables profiting from environmental restoration, is introduced. The simulations revealed clearly that alternative currencies and their design do influence our behaviour in a desired way. We should take advantage of this discovery and use money and the financial system to help us transition towards a net-zero emission future.

energy-transition-game

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Michał Pająk

Michał Pająk

10 min read

12.09.2019

The future starts now 

experiencing scenarios for energy transition through a social simulation

In many countries worldwide, the topic of energy transition seems to be highly charged. The array of challenges connected to this process embraces a clash of worldviews, controversies over the efficiency of existing technologies, legitimacy and quality of planned and implemented policies, disputes over the \”right\” energy mix as well as other complex economic and social issues. Yet, the transition will inevitably have to be introduced soon, and both the process and the time framework of the change are the key to success. To add to this heated discussion and to suggest a way forward, the Centre for Systems Solutions, in collaboration with Wuppertal Institute and Thema1, has developed the Energy Transition Game.

The reality of simulation

The activity can be described as a social simulation—a type of face-to-face serious game for a large group of people that engages them in mock negotiation, confrontation and decision-making. In this particular case, participants step into the shoes of ministries, energy producers, technology startups, energy providers, and NGOs. Thrust into the harsh reality of the energy transformation, they don’t only have to deal with the associated technical complexity but also learn to manage complicated relations between each other\’s conflicting ideas and agendas. 

What they discover, wading through a seemingly endless list of emergencies to address, is that transformation is not a lonely business and, to lead it successfully, they have to step out of their silos and start working together. This revelation does not come instantly, of course. At the beginning many players are motivated mostly by personal gains. For example, in the initial rounds, energy producers often show no interest in the natural environment protection, investing in facilities that can ensure them stable profits rather than relying on uncertain sun- or wind-dependant energy sources. Such an attitude usually meets with severe public censure. NGOs’ representatives call for financial sanctions against such practices and demand more sustainable solutions being introduced. However, green technologies proposed by technology start-ups are often counter-effective, as they still depend on outdated infrastructure. This, in turn, has to be addressed by the government that – as you may suspect – doesn’t have enough budget to modernize it. So what is their strategy? Raising energy prices! And this is how the vicious circle continues.

Looking for solutions

With its lively dynamics, The Energy Transition Game gives room for collective problem solving and testing available options with their associated impacts on economy, ecology or society. The in-game world’s mechanisms mirror the most important features of our real world, making it easier for players to draw meaningful conclusions that may be furthered applied to solve real, not only simulated, challenges. For example, when played by policy-makers, it may help them anticipate potential trade-offs and delineate possible mitigation measures. How? By simply experiencing them, either through the games’ mechanics or through other participants’ feedback. Unlike in real life, however, such testing is safe and not linked to any fatal repercussions. It may thus serve to chart a desired course of action and prepare for plausible stumbling blocks. For this purpose, the Energy Transition Game has been successfully used at  multiple workshops organized, among others, with Estonian Ministry of Environment, German Environment Ministry, Wuppertal Institute, Climate-KIC, Systems Innovation Lab.

Green technologies proposed by technology start-ups are often counter-effective, as they still depend on outdated infrastructur. On the picture: a card representing prosumer solar energy production.
Green technologies proposed by technology start-ups are often counter-effective, as they still depend on outdated infrastructur. On the picture: a card representing prosumer solar energy production.

Real experience from simulated realities

Although the simulation was designed to depict the problem of energy transition, it can also be used in other contexts. For example to address technical and social aspects of complex processes, such as multilateral agreements or coordination of joint initiatives where stakeholders of different backgrounds and values meet, etc. The Energy Transition Game encourages \’out-of-the-box\’ thinking, negotiation and mediation skills. By and large, it is a great tool to display problems and dilemmas emerging from complex, coupled systems that encompass environmental, social, economic and technical elements and interactions between them.

energy-transition

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Amanda Anthony

Amanda Anthony

20 min read

08.04.2019

What Macron Would Do Differently If He Could Go Back In Time

It’s May 2017. We see an elated Emmanuel Macron, celebrating his presidential victory, his platform focused on making the government more efficient and including green initiatives aimed at helping France reduce its dependency on nuclear and fossil fuels. In his acceptance speech, he says he understands the “rage, anxiety and doubt” simmering in the country and that he plans to use his five years healing the divisions.

It’s November 2018. Thousands of people line the streets in Paris and beyond wearing “yellow vests”, protesting the proposed rise in the diesel fuel tax. They claim that his policies make it hard to live in France. They claim he is out of touch with the struggles of workers.

Even though many protestors support energy transition, the simple framing and brute implementation of the tax on diesel simply did not take into account all the tradeoffs that come with moving to renewable energy, nor did it examine the emotional effects of yet another policy being imposed upon an already burdened populace.

Thousands of people line the streets in Paris and beyond wearing “yellow vests”, protesting the proposed rise in the diesel fuel tax. Video by: Wall Street Journal.

Wishing for a do-over

Macron must be wishing he could go back in time and do it over. It is, of course, too late for that – he is currently relegated to crisis management and image rebuilding. However, the idea of “looking into the future” is something he should consider before taking up the issue of carbon taxes and other climate change policies again. 

This isn’t some kind of “Minority Report” fantasy: It is a fruitful time for immersive, forward-looking approaches to problem-solving. From Henry Mintzberg’s work on “seeing first” and “doing first” in strategy development, to Stuart Darcy’s experiential futures and Richard Duke and Jac Guert’s policy exercises, we now have less linear and more active ways of exploring the future before it comes. Among these strategies is the use of social simulation, aka policy or serious games.

Each well-intentioned idea has a number of different possible outcomes based on both the decisions made and the decision makers. On the photo: media news representing outcomes of various decisions made by players during the Energy Transition Game workshop.

Energy Transition Game

Each well-intentioned idea has a number of different possible outcomes based on both the decisions made and the decision makers. On the photo: media news representing outcomes of various decisions made by players during the Energy Transition Game workshop.

Using social simulation to see the future

Social simulation helps players bring their ideas of the future to life. As they adopt roles and implement their solutions, they begin to “see” how creativity is necessary for addressing so-called “wicked problems.” They feel ownership of their decisions and the results in a way that the more linear thought exercises of traditional scenario planning do not enable. 

Players who have used Energy Transition Game, our social simulation on the transition to low-emission energy sources, often come in with a determination – like Macron – to take action. For many, it’s a very logical process: implement the tax, reduce carbon emissions, success! 

What they often do not realize is that each well-intentioned idea has a number of different possible outcomes based on both the decisions made and the decision makers. Making consumers bear the real cost of energy production, including pollution mitigation, may work as planned. Alternatively, the policy may be implemented too quickly and clumsily, and be followed by protests, opposition and a significant decline in public support. There may be even 100 other possible results, based on who is at the table, whose views are considered, when and how fast decisions are made and many other factors. 

That is why the critical moment for using simulation or other types of experiential scenarios is well before policy implementation, as Margaret Thatcher learned with her “Working for Patients” idea.

Social simulation in practice

In the famous  “Rubber Windmill” simulation, the would-be policy administrators challenged themselves to come up with and “implement” a number of possible future scenarios to reform Britain’s National Health Service. By role-playing several potential situations, they hoped to identify traps, blind spots and other challenges and prepare accordingly. What the simulation showed was that the reforms as initially proposed were unfeasible, sending its proponents back to the drawing board. 

Where else could simulation have been useful? For starters: Managing the Flint, Michigan, water crisis, Brexit, or the 2015 European refugee crisis. If policymakers had stepped back from politicking and invested the time in exploring the future through simulation, they may have been able to take better decisions.

The social simulation would help policymakers and others with a stake in SDG implementation travel 40-50 years ahead in time and see the interplay of their decisions on the whole ecosystem – not just the effects within their borders. On the picture: mobile version of The World’s Future game.

The World\'s Future

The social simulation would help policymakers and others with a stake in SDG implementation travel 40-50 years ahead in time and see the interplay of their decisions on the whole ecosystem – not just the effects within their borders. On the picture: mobile version of The World’s Future game.

Time-traveling to The World’s Future

Going forward, other leaders should put their ideas and assumptions about the potential crises of tomorrow into practice using immersive exercises. A particularly good example of this concerns the Sustainable Development Goals, which are built on a complex system with many interconnections. Using The World’s Future would help policymakers and others with a stake in SDG implementation travel 40-50 years ahead in time and see the interplay of their decisions on the whole ecosystem – not just the effects within their borders. 

As momentum gathers around ideas like the Green New Deal and debate continues on migration policy, discussions are taking place about how the as-yet-undefined specifics of goals, strategy, and implementation should look. If we are serious about achieving sustainability and if advocates want their policies to stick, they must be able to find a level of consensus on goals, somehow reconciling diverse worldviews. Incorporating social simulation in their planning would enable them to “see” many possible outcomes and more confidently and creatively shape the future.

water-energy-nexus

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Aleksandra Solińska-Nowak

Aleksandra Solińska-Nowak

20 min read

17.07.2018

Understanding The Nexus Approach

The nexus approach

The Latin term „nexus” refers to the act of binding something together. The concept was first mentioned in the context of resource management in 1980s, especially in connection with the UN University Food-Energy Nexus programme. It was not until the Bonn2011 Nexus Conference, however, that the nexus approach gained relevant prominence. Guided by the principle of integrating management and governance across sectors and scales, the conference argued that the nexus approach can improve water, energy and food security, at the same time supporting the transition to a green economy, which is expected to increase resource efficiency and provide greater policy coherence. 

The need for a more integrated, holistic approach both to the resource management and to the global policy in general became even more undisputable with the adaptation of the Sustainable Development Goals (SDGs) in 2015. To simultaneously address the 17 major priorities, ranging from poverty and hunger alleviation, gender equality, industry development to sustainable production and environment protection, we are all required to recognize the interrelatedness and interdependence of these, partially overlapping or competing, goals, and to grasp the complex net of interactions, trade-offs and synergies that they create. Advancing towards a more stable and sustainable future depends thus on the “nexus thinking” or “systems thinking” that, instead of just looking at individual components and short-term quantitative outcomes, recognizes feedbacks and connections, and promotes concerted action and cooperation on a global scale across sectors, time and space. 


From time to time a woman in black approaches each department, passing them a thick pile of documents. Upon her arrival, the group discussions become even more stormy. It means that a new problem or request has been submitted by the society. Departments’ heads are scanning the documents quickly, trying to prioritize issues the group has to address. The time is running, members of the groups seem to be far from reaching a consensus, and a stream of new issues is still flowing. Suddenly, a collective sigh of relief may be heard – the water department voted for a policy unanimously. The head of the department leaves to pass their proposal to the council. Just in time! Almost simultaneously, a moderator rings a bell and asks the buzzing crowd for attention.

Why do we need the nexus approach

A range of socio-ecological processes, such as population growth, economic development and urbanization have contributed to an overall change in the way land and natural resources are exploited, processed and consumed. Growing demand and unsustainable management have increased man’s ecological footprint and caused modification or degradation of the natural resource base in many areas of the world. The situation is further exacerbated by pollution and human-driven climate change, which results in uncertainty and less reliable food and water supplies due to e.g. intense extreme events (such as droughts or floods). Such pressures may in long-term drive social-ecological systems across critical thresholds, leading to irreversible water, energy and food crises. To avoid this situation and align with the Sustainable Development Goals, we need a shift towards improved resource efficiency, demand management and more sustainable consumption patterns. 

The nexus approach can guide a transition to sustainability, by reducing negative impacts within the system and producing gains that outweigh the costs connected with investing in better policy and “greener” technology. Based on a better understanding of the interdependence of water, energy and food, this integrated approach identifies multilateral beneficial solutions to resource management (e.g. water and waste recycling, investing in green infrastructure or renewable sources of energy) and provide way to  meet the needs of the present without compromising the ability of future generations to meet their own needs.

Like most “serious” games, does not rely on rivalry or single goal completion but presents the array of challenges and opposing interests that the players have to face to determine their own priorities.

Nexus Game

Like most “serious” games, does not rely on rivalry or single goal completion but presents the array of challenges and opposing interests that the players have to face to determine their own priorities.

Messy business

While the benefits of a nexus approach for individuals and societies are unquestionable, little is known how to advance this approach, especially in a multi-stakeholder environments. Global challenges that involve many diversified groups of stakeholders taking decisions under uncertainty, require collaboration on many different levels. The complex nature of socio-ecological system is characterized by messiness, with many processes happening at the same time. Without a proper understanding of the variables, policymakers may solve one problem but unintentionally generate another one, as illustrated, e.g. by the misconceptions connected with the renewable sources of energy. Many people may think that because the renewables cannot generally be over-exploited or depleted, they do not involve any negative impacts. Meanwhile, overdependence on them may highly interfere with other nexus sectors. For example biofuels, and to some extent hydropower, demand more water per unit of energy produced compared to fossil fuels. They also involve a risk of negative energy gains. For instance, corn grown in the US for energy purposes may require more calories of input than it eventually produces. As a consequence, unless integrated in multi-use systems, biofuels may actually compete with food production for water, potentially decreasing the resilience of food production systems.

Many attempts to identify an optimal path towards sustainability fail due to over-reliance on hard data and inadequate appreciation of the diversity of ways decisions are made. People often erroneously assume that their choices stem from rationality. Meanwhile, we are never equipped with perfect information on the situation and are prone to show bias, rely on misconceptions and our individual understanding of the issue, and favor short-term gains rather than longstanding solutions. Add to it differences in human values or interest and uncertainty that underlies our future, and the complexity of collaborative decision-making becomes evident. There is myriad of perspectives the sustainability transformation may be approached and no one “optimal” answer to it exists. This raises the question: How to advance a socially accepted solution? The solution that is agreed upon by the majority of stakeholders and offers possibilities to address all the nexus sectors and their complex interactions?

The Nexus Game offers a possibility to explore the dynamics of transboundary resource management. The game setting contains two countries sharing a river basin and thus facing interlinked challenges of water, energy and food production and consumption. By assuming the roles of the prime ministers, water ministers, energy ministers or agriculture ministers, the players enter into inter-government and international negotiations in order to meet the growing people’s demands and at the same time achieve sustainable development in both countries.

Social simulation to explore the nexus approach

There are many ways the complexity of water-energy-food nexus may be explored, however the best option is always to actively engage the stakeholders. Activities that enable people to collaboratively explore alternative scenarios offer space for creativity required to discover brand new paths, and enable the participants to understand competing interests and worldviews, which is a starting point for negotiating a consensus. In this context social simulations are gaining recognition, as a tool for triggering involvement and increasing public awareness on many serious issues. Simulating the reality of socio-ecological dilemmas, they help “players” immerse in their roles and gradually discover the complex landscape of problems, responsibilities and opportunities. 

The Nexus Game is a good example, as it offers a possibility to explore the dynamics of transboundary resource management. The game setting contains two countries sharing a river basin and thus facing interlinked challenges of water, energy and food production and consumption. By assuming the roles of the prime ministers, water ministers, energy ministers or agriculture ministers, the players enter into inter-government and international negotiations in order to meet the growing people’s demands and at the same time achieve sustainable development in both countries. Their task is not easy, taking into consideration the interlinked pressures, such as the unpredictable rainfall (resulting in floods or droughts) and the shrinking natural and monetary resources. The decisions they make receive almost immediate feedback, as e.g. erroneous distribution of water tokens negatively affects power generation or agriculture production. Consequently, throughout the game, the participants may discover a number of dependencies existing across and within water, energy and food systems and learn that sustainable resource management requires forward looking and making difficult choices between meeting current needs and investing in developments technologies that may positively affect their countries’ production and consumption trends. 

As noticed by Mochizuki et al. (2018), one of the significant characteristics of the game is that the players observe not only the benefits but also trade-offs connected with reducing resource use and transition to low-emission options. For example, an improved coal power plant burns coal at a higher temperature, reducing coal input and GHG emissions but increasing water footprint. A micro-hydroelectric plant, on the other hand, although cleaner, depends highly on water availability and may be ineffective in times of drought. By highlighting these inevitable “costs” that have to be born, the players are able not only to gain a more holistic perception of the system, but also understand the dilemmas of policy-making under uncertainty.

The Nexus Game, like most “serious” games, does not rely on rivalry or single goal completion but presents the array of challenges and opposing interests that the players have to face to determine their own priorities. While exploring the simulated world, the participants soon become aware of the need to communicate and collaborate.The two countries are highly dependant on the river their share, therefore individual and common interests blurry, creating a space for negotiations and compromises. All ministers are given partial authority and may focus solely on their sectors. However, if they don’t decide to cooperate within and and across the boundaries of their country, serious problems emerge in all nexus sectors. “I have learned that energy, agriculture, water ministers must collaborate with each other to better decision making. They are interdependent systems,” as one of the players summarized the experience.

The simulation, developed in collaboration with the International Institute for Applied Systems Analysis (IIASA) in cooperation with the Sustainable Energy for All initiative, has been played, i.a., with the participants of the Dresden Nexus Conference, the employees of the African Development Bank in Abidjan (Ivory Coast) and water and energy professionals in Johannesburg (South Africa) and Cairo (Egypt). Many valuable insights and reflections emerged during these sessions, as most of the players agreed that the Nexus Game offers a playful, participatory and hands-on experience, which allowed them to learn from each other, view their opinions and gain a better understanding of the nexus approach to resource management. One of the participants of the Egyptian session admitted, for example, that the immersion in the simulated world helped him “see the big picture and evaluate situations objectively not subjectively, from a different perspective that usual”. Greater empathy, perspective-taking as well as the ability to perceive global challenges not as individual obstacles but as part of the bigger system, are among most appreciated lessons drawn by the Nexus players. Another Egyptian participant stated, for example, that via exploring the game’s world, he “learned how water is the propeller of development in every field, like food production, energy, and how it affects the pollution.” All these comments confirm our belief that social simulations are powerful tools to be explored while developing long-term strategies and policies, and may definitely support sustainable practices that will ultimately lead to a more fair, stable, inclusive and satisfied societies living  in harmony with Nature.

References

Hoff, Holger. 2011. Understanding the NEXUS. Background Paper for the Bonn2011 Conference: The Water, Energy and Food Security Nexus. Stockholm: Stockholm Environment Institute.;

Mochizuki J., Magnuszewski P., Linnerooth-Bayer J. (2018) Games for Aiding Stakeholder Deliberation on Nexus Policy Issues. In: Hülsmann S., Ardakanian R. (eds) Managing Water, Soil and Waste Resources to Achieve Sustainable Development Goals. Springer, Cham