Simply managing our problems is no longer good enough. As population, energy, environmental and economic stresses build in force deep underneath our societies, as our technologies grow more complex and inter-connected, and as events in one place increasingly cause effects that cascade around the planet, major systems failure becomes more likely. But rather than giving up in despair, we must embrace this possibility as an opportunity for revolutionary change. By adapting a perspective mind, a mindset adapted to constant surprise and instability, we can create something new from the unexpected, and something useful from turmoil and crisis. This is the central idea in Thomas Homer Dixon's latest book. We are very pleased to welcome Professor Homer Dixon back to the Bay Area. Professor Homer Dixon is the director of the Trudeau Centre for Peace and Conflict Studies and Professor in the Department of Political Science at the University of Toronto. Born in Victoria, British Columbia, Professor Homer Dixon received his BA in political science from Carlton University, and his PhD from MIT in International Relations and Defense and Arms Control Policy. Following the completion of his graduate work in 1989, he moved to the University of Toronto to lead several research projects studying the links between environmental stress and violence in developing countries. Recently his research has focused on threats to global security in the 21st century and on how societies adapt to complex economic, ecological and technological change. In 2001, we at the council were honored to have Professor Homer Dixon as one of our speakers at our annual conference at Asilomar. And he had a rather hair-raising experience en route to to the conference, which he mentions in his book. Professor Homer Dixon joins us this evening to talk about issues from this newest book, "The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization." Please join me in welcoming Thomas Homer Dixon. Thank you very much, Mary. This is delightful. It's delightful to be with you this evening. This book, "The Upside of Down," is about crisis and creativity, about breakdown and regeneration and renewal. In a sense the book it itself a product of a crisis. In the three years during which I was writing this book, my wife and I produced a book, a baby and a dissertation. And at the end of the book and the baby and the dissertation process, we looked longingly into each other's eyes and said, "We're never going to do that again." Sometimes when things go wrong, though, sometimes when things are pushed to our limit, that's when we achieve our greatest things, our greatest accomplishments. And we know about that actually in this city. I could tell you just a little bit about another crisis, in this case a real catastrophe, that we're all familiar with, and especially the residents of this city. Early in the morning on April the 18th, 1906, an earthquake hit San Francisco. It shattered the city's cast iron water mains, it tipped over coal-burning stoves, it broke natural gas lines, or what was called town gas in those days, it tipped over kerosene lamps, the city was largely constructed of wood and the combination of these fuels, fire, and woods produced the Great San Francisco Fire. By the next day the city was ablaze and within three days, ten square kilometers of the city had been destroyed, hundreds of thousands of people were without food and shelter, there were fears of a pandemic. What most people don't realize, though, is that this calamity created both the motive and the opportunity for enormous creativity, both in this city and beyond. It created the opportunity and the motive for the construction of what turned out to be one of the most important institutions of the 21st century. I'm going to return to this story later in my presentation. But it's important to remember as I go through my talk this evening, this connection between crisis, breakdown, and creativity. Because the thesis of my book is that we are in grave trouble, and when I say "we," I mean the human species. But there's hope precisely because we're in grave trouble. And yet that hope depends very much on what we do now, and in the next few years, next decade perhaps. I divide my analysis in the book into two parts: a diagnosis and a prescription. I think it's really important that we get the diagnosis right before we start thinking about solutions, and my diagnosis leads me to an unusual place that I'll talk about later in my presentation, because I think my prescriptions in some respects are unusual and probably contentious. But let's do the diagnosis for a little while, first. I sort of think of this like an onion, like we're peeling an onion, and we're going to peel away three layers of this onion as we go deeper into the diagnosis. But let's start with the first layer. What is the nature of the crisis that we face as a species? I think that it can be best characterized as resulting from converging and simultaneous stresses that risk overloading our institutions and our society. It's the adaptive capacity of our institutions and societies. Now when we look at the world we tend to compartmentalize our problems, we tend to silo our problems. We think about climate change for awhile, we might think about energy issues for awhile, we might think about the war in Iraq for awhile and we tend not to see the connections between the challenges that we face in societies and species, we tend not to see the whole. And what I try to do in this book is construct an image of the whole, because it turns out that when you look at past examples of the collapse of societies, and that seems to be an issue that's very much on people's minds these days, with for instance Jared Diamond's book Collapse. If you look at past examples of revolutionary situations, the great revolutions in history, the French revolution, the Russian revolutions, more recently the Iranian revolution, these instances of societal collapse or revolution have occurred because of multiple stresses on societies. It's the convergence of multiple stresses that leads to ultimately a kind of overload. I think of this very much in terms of earthquakes, and there's a reason that I start the book with the San Francisco earthquake, because I think the earthquake model or metaphor is actually quite useful for thinking of what's going on in the world. You can think of the various stresses that we're facing as tectonic stresses that are building up under the surface of global society, potential energy is building up within various global systems that can be released, potentially, in a catastrophic way at some point in the future. And I identify 5 tectonic stresses, in particular, that I think are worth close attention. And I'm going to just spend a few sentences on each one this evening because I don't have much time. But each one of these tectonic stresses gets a chapter in the book. The first is demographic stress. Arising from, in particular, differential population growths in the world. Now population issues have been on people's minds for a long time, but I'm not particularly concerned about population size per se. I think though that a particular concern should be the differential population growth, between, especially, rich areas where you're seeing in many cases populations static or declining, and adjacent poor parts of the world where you see populations often growing very quickly. The place where this is most noticeable is of course Europe and it's hinterland. In 1950, Europe had a population that was about twice the size of its hinterland countries. If you take the 25 countries currently in the European Union and you look at the 25 adjacent countries across North Africa all the way out to Pakistan and West Asia, Europe had a population about twice the size of its hinterland. About now, the hinterland has a larger population, but not substantially larger. Europe's population is around 450 million, and the hinterland's population is around 600 million. In 45 years, in 2050, Europe's population will have fallen to 400 million people and will be falling by 2 million people a year, and that's despite projected very substantially immigration into Europe, whereas the hinterland's population will be 1.3 billion people. Three times as large. Now we already see the kinds of stresses that are developing within Europe between indigenous European populations and immigrants, and the subsequent generations of immigrants, and I would expect that these stresses would become much larger. We see the same kind of population imbalances developing in other places in the world where you have differential population growth rates. Again, for example, between Latin America and North America. Canada and the United States. These differentials tend to set up enormous flows of migrants, as for instance we see across North Africa towards Europe and from West Asia towards Europe. The second stress that I talk about in the book is energy scarcity. We're moving into what you might call the post-petroleum. It's hard to say exactly when this is going to happen, but I am largely persuaded by the oil theorists who suggest that we are probably near to, at least within two decades of, a peak in global oil protection. At the moment, we are consuming about four times to five times as much oil on an annual basis as we discover. Peak in discovery was in 1964 and it's declined globally ever since. And we're discovering somewhere between 5 and 7 billion barrels of oil a year, and we are consuming somewhere between 25 and 28 billion barrels a year. That's an unsustainable situation, and sooner or later you can expect that global oil production will start to decline too, because we're essentially using up the capital of oil that people discovered many decades ago. There's an absence of good alternatives. Oil provides 40% of commercial energy supply in the world, and about 98% of transportation energy. It literally runs the world economy, and there are no other sources of energy that are really adequate substitutes. The third tectonic stress that I identify is local and regional environmental damage in developing countries. This is something I've studied for many years, and it relates to land scarcity, crop land scarcity and degradation, water scarcity, and also deforestation in developing countries. Now this is a long story, but in one sentence, these forms of environmental stress in developing countries tend to erode both the economic capacity and the institutional strength of many developing countries, and weaken them in a sense, hollow them out from the inside. The fourth tectonic stress is climate change, and I'm sure that people here are fairly familiar with some of the reasons results, scientific information on climate change. But this is a problem that I think there's really been a tipping point in a sense in the information that has come out of the scientific community in the last year or two on the seriousness of this problem. I think much of the scientific community studying the climate change problem has moved from a position where they think it's a serious problem that deserves attention to recognizing it as a matter of extreme urgency. Why the change? I think it largely relates to the concern that we might be seeing feedbacks kick in, and especially in the Arctic, where you're getting consequences of climate change that are producing warming that re-enforces climate change. So what specialists call positive feedbacks. We're seeing very dramatic results in some places in the Artic, for instance in the Greenland Ice Sheet, which is the second largest ice sheet in the world, is now melting at the rate of about 200 cubic kilometers a year, that rate has doubled in the last five years. The fifth tectonic stress. you'll notice that the first four relate substantially to our troubled relationship with the natural world, between the human species and the natural world, the fifth tectonic stress is purely social and it arises from economic imbalances in our world economy, especially widening gaps between rich and poor people around the planet. And these gaps are not narrowing in absolute terms, in fact they're going to continue to widen even under the most optimistic projections for many many decades, and gaps in income make people angry. It's well established that people are motivated by, and they're concerned about, gaps in absolute income between themselves and others. They pay attention to that kind of thing. Now in addition to these five tectonic stresses, I think that there are two what I would call multipliers that can make the force of these stressors greater, and also make them, make the consequences, ultimately of these stresses much more serious. And these are twofold: one is the increase in connectivity and speed of the movements of material, energy and information around the planet. The increasing density of connections among us, and the increasing speed, especially with which we transfer information. This makes it more likely that we are going to see what you might call cascading failures within tightly coupled systems, and this is where the Asilomar story comes in, because I was on my way to a conference in Asilomar, the World Affairs Council conference in 2001, when I was traveling down a major highway and I can't remember which one it was, but it was a major highway going south in California from San Francisco, and I was in a rented car, and it was a 3-lane highway going south, and I was in the fast lane, going quite fast. Probably at least 70, maybe 80 miles an hour, passing a semi-trailer, and the car's engine failed. And it was bumper to bumper traffic. I had a tailgater right on my tail, there was no space behind the semi-trailer, and there was virtually no space in front of the semi trailer. So I was locked, essentially, in the fast lane. I realized immediately that this was potentially a fatal situation, because I was in the middle of a tightly coupled system, and it was an instantaneous decision that the most important thing I had was my momentum, and so I used my momentum to continue to pass the semi-trailer, squeezed in in front of him, which he didn't like very much, and then moved across successive lanes to get to the shoulder, and eventually bail out of the car. Well, I didn't think too much about it until I got to the conference later and I told everybody the story, that I had a new car and everything, but I didn't really think about the larger implications of it, but I was at a panel discussion at the end of the conference, and it was a heated discussion about the consequences of globalization, and one thing struck me in particular, because at the end of the panel discussion, the fellow sitting beside me was a very wealthy dot com entrepreneur, said just flat out, "The more connectivity in the world, the better." And I thought to myself, "Gee, I'm not sure that's right. I was just about a victim of a highly connected system because traffic traveling at high speed bumper to bumper on a freeway is almost a paradigm example of tightly coupled systems." Car's engine fails, deer runs across the road, all the cars drive into a fogbank, and we see these photographs regularly of 60, 70, 80 car pileups, because there isn't enough buffering capacity in the system for anybody to deal with the consequences of an error or accident. And that's the same kind of challenge that we face I think in the world today, and we see for instance cascading failures of economic system, sometimes of economic crisis, for instance the 97/98 Asian financial crisis spread around the world, we see SARS go from Southern China to Toronto in a week, and we've created a system that's more vulnaerable to these kinds of cascading effects. The other multiplier that is I think particularly important is what you could call a power shift. This is a movement of power down the social hierarchy, from states and large organizations to individuals and sub-groups. This is the power resulting largely from new technologies, especially information technologies. The standard laptop computer now has about as much computational power as was available to the entire American defense department in the 1960s. And it would have filled, at that time, a room about 7x the size of this room. Now it's in a box about four litres in volume. That's an enormous analytical and information gathering capability that individuals have at their disposal now. And that can mean good things for economic productivity. And for social, for civil society. But we also see other kinds of power going down the social hierarchy, especially the power to destroy and kill, and of particular concern here is the possible leaking of weapons of mass destruction, the knowledge about how to make weapons of mass destruction, the materials to make them into terrorist groups. Now these five tectonic stresses and two multipliers, I think, are potentially a lethal mixture, because of the dangers of converge and simultaneity. There are a number of reasons why I think convergence is important, but I'll just identify one right now, and that is I think there may be some occasions where you could get simultaneous crises on several of these stresses at the same time. One area in the world that happens to be particularly vulnerable is Europe, not a place that we often think about as being on our watch list of regions in the world where crises might occur. But think about Europe's situation. I've talked about the demographic imbalance that Europe confronts right now, and the worsening situation in terms of demographics over the next fifty years. Europe is also extremely vulnerable to energy challenges. Europe's North Sea oil and gas reserves are declining quickly now, especially the British parts of the field. In 20 years or so, Europe will import 70% of its energy. It's also particularly vulnerable to climate shocks, because Europe depends, especially its agriculture, on movement of energy in for instance the gulf stream, from the equatorial regions of the Atlantic up to the North Atlantic. You can imagine a situation where simultaneous energy and climate disruption or shocks affected Europe very severely, affected the economy very severely, and produced a serious civil instability within the cities, between migrants and descendents of migrants, and Europeans. So that's the first layer of my diagnosis. I'd like to go through quickly, before I get to the prescriptions, the second and third layers. The second layer really relates to energy issues, and the story here is very simple. It's that I think in the future, we're likely not to have enough high quality energy to sustain the complexity needed to cope with our problems. And I just want to emphasize what I said there. Energy, high quality energy, is essential for the creation of complex technologies and complex institutions, and we use complex technologies and complex institutions to solve our complex problems. And yet at the moment we're going through a major energy transition. And the best way of thinking about this energy transition is in terms of what specialists call energy return on investment, or EROI. This is the amount of energy that you need to get energy. Anytime you produce energy you have to spend a certain amount of energy to get it. In the 1930s, in Texas, in the United States, you got about 100 barrels of oil back for every barrel of oil of energy that you invested to drill for that oil. Now in the United States, the energy return on investment is around 17:1. If you go to Alberta and look at the Tarzans, which is considered, at least by Americans, not necessarily by some Canadians, the fallback energy source for the United States, the energy return on investment is around 4:1. As you decline closer and closer to 1:1, you're using a larger portion of your capital and wealth in your society to generate energy. And you've got less left over to do all the other things you need to do. And yet, and this is the critical point I want to make, our problems are getting harder. Something like climate change is going to require enormous investments of energy in order to cope with it. For a whole variety of reasons, which we discuss in the question period. The third layer of my diagnosis, I really tried to get at the underlying causes of the crisis we face. Which brings us to, I think, the heart of the matter, what are the deep drivers of our crisis or predicament? And this brings me to an analysis of the dynamics of modern capitalism, in particular, what you might call capitalism's growth imperative. It's a curious fact: at a certain pointsay around 15 to 20,000 dollars of income per capita, extra income doesn't make us any happier. And yet we're absolutely obsessed with producing more wealth in our economies, our entire discourse in our political systems and among economists, is all about maintaining growth. Well, why is that? If that actually doesn't make us any happier? In fact, there's a lot of evidence in our world today that in the United States, that happiness may actually be declining. Americans have doubled their per capita income in real terms, in terms of consumption of goods and services in the last 50 years, but there's been a slight decline, on average, of happiness. So why do we insist on maintaining growth? I think the argument, which I'm putting in very short form, goes something like this: economies need to grow to absorb the surplus labor that's created by the constant technological change within economies that unemploy people, that displaces labor. Technological change tends to increase the productivity of labor. So you need fewer people to do a certain job. These people who are unemployed by that technological change have to be absorbed. Otherwise, you're going to have the development of a potentially revolutionary underclass within your economies or also you're going to have what economists will call "demand failure." There won't be sufficient demand within the economy to keep the economy functioning properly. So we need to have growth. In fact, in the United States, you need somewhere between 3% and 5% economic growth a year, just to keep unemployment from falling. The problem is that this growth tends to swamp any improvements in efficiency in our use of energy and materials. The United States has improved the efficiency use of energy about 40% in the last 30 years. Enormous improvements in industries, from steel manufacturing to a client's manufacturing. And yet because the economy has grown faster than those efficiency improvements, the overall output of say carbon dioxide, which is a good measure of our load on the environment, has increased about a fifth in that period of time. So this, I think is a strong argument that we aren't going to be able to tech-fix our way out of environmental problems. That we actually have to, that we can't de-couple economic growth from increasing material consumption and increasing waste output. That we actually have to address the underlying dynamics of modern capitalism. So let me just come to the conclusion of my diagnosis. First of all, we can't predict the future. It's hard to know what all of these stresses are going to do in the future. But I think we can say that the probability of some kind of what specialists would call major system discontinuities, what I refer to in the vernacular as just breakdown, is rising, and perhaps rising fast. The future is going to be a volatile time. So what do we do? And here we turn to prescriptions. Well, the first thing we need to realize is that breakdown isn't the end of the story, in fact it might be just the beginning. And I want to establish a little bit more complexity in our understanding of the future. I think when we think of the future at the moment we sort of think in terms of two possibilities. One is, the future as a lovely prospect where we solve these problems, and we learn to live sustainably with our natural environment, and everything's going to be just fine. And the other is catastrophic collapse, a la Jared Diamond. And those are the only two alternatives. But I think there might be a whole range of possibilities between those two alternatives that we have to start thinking about, because it might be in that middle ground of various forms of breakdown that aren't catastrophic that we actually have the greatest opportunities for reform and creativity. And I say this in part because it turns out from research recently over the last 15 or 20 years, has looked at what specialists call complex adaptive systems, that the most adaptive systems are ones that go through cycles of growth, increasing complexity, over time they become increasingly rigid, they break down, and then the parts that are left over after the breakdown are re-organized and growth starts again and adaptation to a changing environment takes place. So adaptation, according to these models, actually requires some form of breakdown. Now that sounds like a pretty radical idea, but actually it's something that we recognize takes place in market economies all the time. And it's encapsulated by the great Austrian Economist's famous phrase "creative destruction." The idea that companies will grow, they become maladapted to the economic environment, will go bankrupt and be replaced by other companies, sometimes whole economic sectors, as we saw in the dot com implosion. And that it's understood that this creative destruction is the source of the enormous adaptivity of our economies, of our market economies. But when it comes to social and political systems, things don't work like that. In fact, if we talk about say something like, you know, we need a little bit of creative destruction on the political side here, it sounds just a little bit dangerous. Crypto-revolutionary, or something. Instead, what happens is we get locked into a management paradigm. A management paradigm that's incrementalist, and through which complexity steadily increases over time, rigidity increase over time in the system because we tend to add new institutions and systems onto existing ones, because we don't want to challenge underlying economic and political vested interests. Now, a management paradigm is perhaps useful, but we need to start thinking creatively about what we're going to do in that extremely volatile future that I think lies in front of us. A future in which some forms of breakdown are likely to occur. At those moments of breakdown, there is enormous flexibility in the system. I call them moments of contingency. They're opportunities to push a system or a society down one path, as opposed to another path. There's going to be a great deal of fear, anger and frustration in the population. The great poet W.B. Yeats wrote in his famous poem "The Second Coming," that when things fall apart, the worst are full of passionate intensity and the best lack all conviction. What does he mean? I think he's absolutely right, that when there's shocks in a system, when there's crisis and people are scared, extremists quickly seize the political and psychological landscape. They define enemies, they stoke hatreds, and they instigate violence. So this leads me to a twofold prescription for our coming world. The first is that we need to increase our social, economic and technological resilience as much as possible. In all the systems that we depend upon, to lower the chances that as possible. In all the systems that we depend upon, to lower the chances that any kind of serious system discontinuity or breakdown leads us to the catastrophic end of that spectrum that I was talking about before. We need to adopt what Mary referred to as a perspective mind, a concept that I developed in the book, where we recognize the sharp, sometimes hurtful discontinuities are going to be part of our future. We shouldn't be surprised by surprise. But we can keep these discontinuities, these breakdowns, from being catastrophic, by doing a couple of things. One is to increase the level of autonomy of individual units within our system. So, for instance, maybe we should start thinking about producing more energy at the level of urban areas, municipalities, all the way down, potentially, to individual households. In 50 years, we'll look at ariel photographs of our great cities, and we'll look at all those blank roofs and we'll look on that as an enormously wasted resource. Because we could be producing 20%-- and even in Canada, we could be producing 20% of our urban power with solar panels on top of those roofs. We can draw 75% of our space heating energy out of the ground underneath the houses and buildings, even in Canada. To the extent that we, with energy and water and food, and other essential needs, we produce some of those things locally, not all, but at least a portion, then the whole system becomes more resilient. The second way of increasing resilience is to loosen coupling in our systems, so they're less vulnerable to the kind of cascading failures that I almost experienced on the highway in California. This means creating more space within systems for people to have time to make decisions and for people to respond to shocks. Within our economy, it means that maybe we need to start thinking about moving away from things like Just In Time production. When 9/11 happened and the Canadian-American border shut, factories all across Canada shut down almost immediately, because they had no supplies and feedstocks. They had no parts, no raw materials coming in from the United States. This is a peripheral system, this is not a resilient system. The second part of my prescription is where I think my argument becomes potentially most contentious. And that is that we should start thinking about what we're going to do in times of crisis in the future, now. We need to start thinking now. True collaborative, large scale scenario development and planning. Non-extremists, and I will nominate all of us as non-extremists, dividing the world into roughly those two categories. Non-extremists have to solve their collective action problem. When things fall apart, as Yeats said, extremists will know what they want to do. They'll be networked, they'll have resources, and they'll have very clear goals. The rest of us shouldn't be sitting around dithering. This means that we need to build common framing of our problems, think very carefully about what challenges we face, we need to discuss core values so we have some understanding of where we want to go in the future, we need to develop plans for response on a wide variety of contingencies, we need to deal with social capital among ourselves, which means building what political scientists call networks of trusts and reciprocity. Now, we've seen this kind of thing already. In some really remarkable occasions. The Orange Revolution in the Ukraine didn't appear out of thin air, there had been a lot of planning ahead of time, a lot of development of civil society within the Ukraine, some of it's sponsored by George Sorhose, Peter Ackerman and others, planning for the opportunities that might arise in the future to change the society from a democratic. from an authoritarian to a democratic system. This is what I call cata-genesis. It's a neologism, a word that I created that's a combination of the prefix "cata" which means "now," and the ancient Greek word "genesis," of course, birth. This is about rebirth through breakdown. And let me just finish then by returning to the story of San Francisco. Because San Francisco is a great example of a cata-genesis. Not only was the city rebuilt with buildings that were much more robust and able to withstand earthquakes, but its water system was rebuilt too. In fact, I don't know if most people in San Francisco realize, but there's an entire parallel water system in the city that's available for firefighters. It has large reservoirs dispersed around the city, pipes that are less vulnerable to being shattered by earthquakes, and it has about 300 large reservoirs, or cisterns, under intersections across the city, some of them holding up to 100,000 gallons of water. They're marked with a special mark in the middle of the intersection, and if there's an earthquake and the roads are impassable but the local firemen can get to that particular intersection, they pop open the hatch and they throw in a submersible pump and they get on with fighting their fires. That is a resilient system, that in 1907 and 1908, since the San Franciscans were rebuilding the water supply system, they built a resilient system, not a brittle system. But there's another part of the San Francisco story that is very important too. That tells us something about cata-genesis. There was an enormous cost, of course, from the fire, especially. Buildings were insured, and the insurance plans were held by insurance companies, to a large extent, in London. This caused a huge flow of gold out of London into San Francisco, which caused the monetary crisis in London. The Bank of England responded by increasing interest rates and blocking the flow of gold out of England. That, in turn, stimulated an economic crisis in the United States. In fact, one of the sharpest contractions the American economy had ever gone through, in 1907. Financial crisis, which caused a wave of bank failures across the United States. JP Morgan and other bankers intervened in the American economy to try and re-inflate the American economy, pouring tens of millions of dollars into the economy, but it didn't work. For the first time, their interventions weren't sufficient to prevent the crisis. And the result of that sequence of events was eventually the creation of the Federal Reserve system. The American central bank that is probably one of the most important institutions of the modern world, and this was directly attributable to a sequence of events going back to the crisis of the collapse in San Francisco following the earthquake. So I have a conviction that little progress is going to be made until some of our greatest problems that I've discussed here, energy and climate change, for example, until our societies experience major shocks. These shocks, though, can break through denial, and create enormous opportunities for creative change. These moments of contingency, as I call them, following these shocks, will be fleeting, and to seize them, we have to be ready. Thank you.
member. 
