Article written by Corneliu Bodea, CEO of Adrem for the Republic
I will not criticize the way financiers are used to verifying the profitability of an investment using discounted cash flows, calculating the net worth at present and other indicators, but I cannot help but notice the impact that such methods have on the feasibility of projects of particular importance for our future.
I will first refer to some data to set a framework for this point of view. About 80% of the world’s energy consumption at the moment is provided by fossil fuels (oil, coal and natural gas), large generators of greenhouse gases (mainly CO2) that lead to an increase in global temperature with disastrous effects over time, classified as the greatest risk for the extinction of the human species. World leaders, based on the opinions of scientists, have set a target to limit the increase in global temperature to a maximum of +2oC. An extremely difficult goal considering the fact that, in order to achieve it, the CO2 emissions budget available is 600 billion tons, and the emissions in 2020 were about 35 billion tons, which means that in about 17 years it is consumed. Introducing into the equation the effect of new energy efficiency technologies, renewable energy, we still fail to extend this time by more than about 10 years due to the estimated increase in energy consumption during this period. All this means that before 2050, the temperature will increase by more than 2 degrees Celsius.
What will this mean for our descendants? Some of us will still be here to see, others will not! We leave them a heavy legacy, for which they will not be grateful. What is frustrating is that all this time we are proposing projects and calculating feasibilities by discounting the children’s future.
We are in the midst of a pandemic that we have roughly dealt with and during which we have shown a lack of organization and lack of empathy and help, as long as poor countries do not have access to the vaccine, while other countries have vaccinated more than 50% of the population.
We are working intensively on the National Recovery and Resilience Plan and are closely following the internal and European debate. Some would like to fulfill their electoral promises, possibly with tangible effects until the new elections, others would like to establish a new CVM through funding, a mechanism to ensure that we make make-up reforms to look as similar as possible to them. Neither one nor the other has the necessary culture to understand that a pandemic of this magnitude is unlikely in the next 50 years, that the impact of any pandemic on people is clearly lower than the impact that the increase of more than 2oC in temperatures will have economically, socially, sanitary in the next 50 years.
The cycle of political and economic interest remains 4-8 years and it seems that anything beyond this perspective gives headaches to the great strategists. It is clear to me that what haunts us the most dangerous is not the pandemic, but our inability to progress in a system of socio-political-economic organization, an organization that broadens the perspective. What defines a leader is the ability to create and sustain visions that go beyond his life perspective and the period of material interest. Such visions have brought us this far and this is what we currently lack.
The struggle for the resources of the moment still separates us into large blocks of interests, and hiding behind principles and patterns masks our petty interests of the present. A solution, hopefully, may be hidden inside the allergy-ridden, procrastination-dominated Generation Z and Alpha, or in the depths of some particle accelerator. Our optimism is based on the hundreds of thousands of years of existence, on the hundred billion ancestors who lived before us, and our capacity is based on the phenomenal progress we have made in recent decades.
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