This article is part of the Futures Forecasting series. We’ve asked experts to identify crucial trends – from a shortlist of categories – that will influence national security out to 2035 and how those trends might intersect in a future scenario.

In this article, which explores the future of globalisation, Richard Yetsenga concludes that facing the existential challenges of climate change, national governments will reorient to address the challenge in a cooperative and concerted manner.

Key trends

1Economics and Identity: Increasing inequality within national populations will make the social contract between governments and citizens increasingly fragile

Global inequality between countries has improved dramatically over the last few decades as poverty has declined, and the middle class has grown. Within countries, however, inequality has generally worsened. Combined with trends such as the automation of manufacturing jobs and the rise of social media, inequality has already caused shifts in voter behaviour in many countries, leading to the election of populists and nationalists. However, these leaders have by-and-large failed to address inequality problems.

The COVID-19 pandemic will exacerbate the trend of inequality. Across most countries, the poor have suffered disproportionately from the virus – and lock-down measures to contain it. Loss of employment due to the pandemic has disproportionately impacted the young, and will be most acutely felt by the poorest. The challenge of balancing families and working from home is disproportionately affecting women, as are job losses in services industries which are typically dominated by women. Rates of infection and death have disproportionately impacted ethnic minorities and those living in areas with higher levels of air pollution. Conversely, many economic recovery policy responses, particularly in advanced economies, have disproportionately benefitted holders of financial assets, who are often older and wealthier.

2Black Elephant: Impacts of climate change will become more severe and observable, leading to stronger calls for climate action from diverse interest groups

Manifestations of climate change have become more obvious in recent times. Antarctica’s record highest monthly temperature was set in January 2020, 2019 was Australia’s hottest and driest year on record, and 25 July 2019 was the hottest recorded day in the UK. For Australia, the catastrophic Black Summer bushfire season increased the salience and urgency of addressing climate change in public discourse and national security debates.

But concern about climate change will arguably explode as a result of COVID-19. Scientists have been warning of the link between climate change and pandemics for some time. The COVID-19 crisis can, therefore, be framed as a climate crisis.

As of 2020, there is limited concerted, collective action by national governments from both the developed and developing world to reduce the amount of carbon in the atmosphere. Given this, citizens and businesses are likely to suffer the consequences of more strategic shocks that relate to climate. COVID-19 is a stark instance of how damaging it can be when the natural environment behaves in a way we are not accustomed to. Climate protest movements, already rising in frequency and participation, could become even more mainstream and influential as 2035 approaches.

3Sovereignty: Lack of leadership by national governments in the face of existential global challenges will prove unsustainable

National governments are struggling to find ways to address ‘problems without borders’, with significant costs to the environment, global stability and their own citizens’ economic wellbeing and health. Different nations have adopted very strongly-held, competing visions of the world and their place in it. As of 2020, we are seeing a trend towards a ‘G-Zero world’ – that is, a world with a global leadership vacuum, and where coordinating bodies like the G20 and G7 are losing relevance.

China and the US and their respective allies see themselves as strategic competitors and find it increasingly difficult to cooperate on shared challenges. Responsibility for the source of COVID-19 has widened pre-existing cracks into crevasses. In 1985, Ronald Reagan asked Mikhail Gorbachev whether Soviet Russia would come to the United States’ aid if it was attacked by aliens. Gorbachev’s response was “no doubt about it”. Reagan responded “we too”. An alien lifeform has attacked, and the great powers have decided to battle the aliens as well as each other.

While this response could be a cause for pessimism, it is also a stark demonstration of the need for renewed cooperation. It will drive increased demand for leadership and collective action from across and within societies.

2035 future forecast

Staring down the risk of mutually assured climate-destruction, and increasingly dissatisfied populations, by 2035 the world will experience a reorientation. National governments will set aside goals and beliefs previously held to be non-negotiable to respond to the global crisis in a more cooperative manner.

In the near-term, humankind is likely to continue down a path which risks mutually assured climate-destruction. Solutions to the trends identified in this post – from climate change to pandemic preparedness – require global cooperation and alignment of objectives. Additionally, near-term reactions to economic inequality, such as experiments with nationalism and populism, are tending to exacerbate the global leadership vacuum, making meaningful action to address climate change even more difficult

As this near-term path is ultimately unsustainable, a reorientation in the next 15 years is likely. The timing and manner are open questions. It might be driven by citizen protest or business efforts, or a realisation by national governments that they cannot maintain power and legitimacy without delivering public goods to citizens. Increasingly, middle and smaller powers are forming coalitions of the willing in an attempt to find agreement. As the costs to these countries of climate inaction rise, they are likely to play a higher-profile role in driving change.

However, cooperation may not be entirely fair, and there will be winners and losers. There will be a ‘prisoners’ dilemma’ in play. Players will need to set aside some national priorities and interests and instead choose to pursue a higher common purpose to ensure the wellbeing of their citizens and economies. But the costs and gains of climate action will not necessarily be shared. The past decade has been challenging for many smaller economies as they navigate the tension between their legacy diplomatic and security relationships, and their deepening economic relationship with China. These countries in particular will need to deftly manage relationships with big players to ensure their populations do not disproportionately bear the costs of climate action.

There is no guarantee that cooperation will extend beyond averting climate crisis, the most pressing challenge. In the interim, international engagement, approaches to foreign investment, foreign aid, and the sources of future prosperity are now seemingly inextricably interlinked. Decisions in one area increasingly have implications for the others. Recognising the requirement to co-operate on climate, however, could spark a recognition of the gains from cooperation more generally.

Richard Yetsenga

Chief Economist and Head of Research
ANZ

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