Ideas and predictions over the last five years – a check in
October 17, 2023
A review of some of the thinking from this blog and updates
Key takeaways
- Good, diverse and material ideas across the last five years
- I am lean towards pessimism which means that I am right about things not happening but I want to move towards a cautious optimism where I am right about things that are a positive step even if it is not perfect- ‘Pessimists are usually right and optimists are usually wrong but all the great changes have been accomplished by optimists.’
- I was most wrong about ‘change from within’ type trends (i.e. internal pressure in organisations leading to changes) – that has been a good learning curve for me. I don’t seek to work within organisation to change it for the better but pick the right time to be a trusted external advisor.
- Predictions need to be more time bound even if it is just a guess – locking in a time enables a greater assessment of the speed
- All the ideas have led to paid work – by looking at an emerging topic and finding the key questions, I am able to take those clients to be paid to assess them – predictions are a revenue generator for me.
- There are more ideas so I will do this again in a couple of years.
Ideas and predictions
| Post | Summary | Update | How does that change how I make predictions? |
|---|---|---|---|
| Ethics in an automated world | High value place for people who are able to reason and subject decisions to ethical treatment. What we are likely to pay more for is the next part of the decision process – the judgement. Judgement is a separate element – it is the ‘should we or shouldn’t we’. It is not the ‘90% of cases treated with this method recover fully’ but ‘in this particular case, is it a good idea?’ | AI ethicists are the ESG workforce of AI development – paid a moderate salary to put an ethical face on AI development. Look at the experience job description of the Microsoft AI ethicist: – MBA and communications background – a warm body for panels, research presentation and marketing Now Microsoft has fired the entire AI ethics and safety team. | This prediction was a classic ‘change the world from inside’ delusion. It is not that ethicists are not necessary or better for society as whole. It is is that they are not able to provide workable solution for companies. The AI ethics principles add up to nothing compared to the commercial imperative. Currently AI ethics has no teeth, and this is because ethics is being used in place of regulation. Ethics is being asked to do something it was never designed to do. AI ethical frameworks can set normative ideals but lack the mechanisms to enforce compliance with these values and principles. Interestingly, my own work has expanded to ‘thinking more broadly about systems of oppression and more narrowly about accuracy and auditing‘ when it comes to systems of decision making (automated or not) |
| Questions for Public Ownership of Renewable Energy in Queensland | Call for government ownership of renewable energy driven by: – opportunity for long term reduction in prices (based on historical changes) – likely reduction of dividends but worth it if electricity prices fall for consumers – low cost of debt incentivising government ownership | In September 2022, Queensland Government announced major plan to develop energy infrastructure including – pumped hydro assets – transmission lines These major pieces of infrastructure facilities major renewable energy expansion, some of which will be built by the Queensland Government. | I was partly right that the Queensland Government would step into key infrastructure areas (pumped hydro for storage and transmission lines). I had been thinking more of wind and solar (which some projects are being developed). What does it mean to be partly right? – I thought that it would be move back to significant ownership of generation assets but really it is the shovels approach to the transition – generation asset development has actually fallen in Australia in Q1 2023 So it may be that the prediction comes true later |
| In climate change, correlation can be scarier than causation | Undiscovered correlation is part of what makes a ‘fat tail’ event such that the likelihood of an low probability, extreme impact event is higher than anticipated because correlation makes a series of events happen almost simultaneously. | The interconnectedness of events is only one part of the nature of climate impacts. Although there is a view that drought (or floods or bushfires) can happen at the same time. Is that the nature of global climate reporting or actual correlation? The fact that events happen at the same time in different places does not, in itself, lead to outsized impact. The impact is a function of the event plus the resilience in place and people’s ability to weather/adapt. I don’t see a ‘fat tail’ but why would I be the one to find it? | Again, it is focusing on the impact. Willing it to be bigger so that we can feel greater urgency to mitigate. The actual amount of urgency will depend on the impact but also on the mitigation and adaptation in place (perhaps resilience). A correlated set of events can also just be a coincidence. Is foreseeing a coincidence in the future as form of prediction? |
| Who wants to be an ESG analyst? | ESG positions are a grab bag of responsibilities that are difficult to achieve while other investment roles are tightly defined. The large amount of work and ambiguity of outcomes leads to burnout. | Corporate social responsibility (CSR) and environment, social, governance (ESG) professionals are “under intense pressure to produce results in a charged environment, often with fewer resources and continuing post-pandemic challenges.” The survey found that 86 percent of respondents indicated increased demands, with 61 percent reporting longer hours, 50 percent reporting burnout, and 19 percent reporting mental health concerns. | Sadly, I have been correct about the unsustainable nature of ESG roles in companies and investment firms. I know this from my own consulting work. This burnout may also partly explain the churn rate – The 2023 hedge fund ESG talent tracker, published by AMObserver, found that 42.6% of ESG portfolio managers, ESG heads, traders, and investment analysts leave their role in a three year period. |
| Quasi-circular economy or <1%, >60%, >80% | First illusion is that recycling on its own could play a key role in the conservation of deposits and in the reduction of primary consumption environmental impacts, whereas it is almost useless in the absence of any slowing down of total material consumption growth. Second illusion is that an effort to reduce waste generation would lead automatically to slowing down material growth, whereas it is just as prone to having the perverse effect of increasing material accumulation. Policy should also focus on building markets for recycled goods because just having recycling targets doesn’t build the market so recyclers aren’t able to monetize their outpuy. | This paper foretold all of the major recycling disasters in the last five years. It is such a good paper and so succinctly set out. Basically, until the observations and recommendations of this paper are grappled with, there is no circular economy. | I am proud of reading and engaging with the paper in this post. It continues to be useful and predictive. |
| Ethical creep | Ethical creep (my phrase) is the slow moving process that characterizes how most frauds and disasters, in a Shakespearean fashion, start from very small ethical breach, snowballing into something far larger. | Ethical creep is an ongoing question for every industry and person. What starts as a ‘grey area’ action provides the momentum to slip into illegal behaviour. Corruption remains the top issue facing corporate Australia, followed by company tax avoidance, misleading and deceptive advertising, bullying in the workplace and discrimination. Environmental responsibility ranks seventh on the list. Treatment of suppliers ranked as the lowest priority. | It was not a prediction but a refined sense of the causality. Ethical creep dispels the myth that major ethical issues arise out of nowhere. In fact, they are more like bacteria, starting very small and multiplying over time. The trick is go hard on compliance and surveillance at the earliest stage. |
| Impact investing is reliant on social enterprise | Impact investing relies on social enterprises as the operational vehicle. Growing impact investing has to grow social enterprises. It is doubtful that social enterprises can accommodate this growth as they are currently constructed so impact investors will be forced to comprise on quality, quantity or speed. | Impact investing has not delivered to date. Many of the social enterprises in developing nations just rehash existing technologies, funded in part by large investment groups. Social enterprises just act a cheaper provider. Or they are commercial operations that leverage impact capital but are unable to self-fund when the capital is spent. A search for ‘what is the greatest impact investing success’ does not even bring positive news stories The fifth result in News is called ‘The Social Impact Investment Mirage‘ Enough said. | I was right to consider the operational vehicle as the choke point, not convincing investors to settle for potential lower market returns. Investors have lots of reasons to invest that go beyond matching or beating the market. The nature of the model is that social enterprise, poorly constructed/imagined carries the bag for the failure, not the investor. |
| AI tells you what it suspects you want to hear | Examining training-data driven AI suggests that humans will not need to be historically accurate (broadly ‘what has come before’ in their decision marking. AI will ensure that history is included. In reality, humans will focus on all of the decisions that are not related to ‘what has come before’. | Difficult to say but if a action has been done before (i.e. code written, sentence created, book authored, image created, instructions recorded), it will be included in an AI’s decision making. We are not subject to the whims of memory. What are the decisions outside of that scope? That is worth asking. | I was right but I didn’t have an answer to ‘so what will we do?’ What decisions will be left over? This ain’t it. |
| Post-MBA and being consequential | An MBA attitude asks ‘what do I have to do to be consequential?’ I have lived that life, thinking in those terms. No more. I am now focuses on being useful. | It has proved to be a mental health godsend. I have a much clearer framework for action. I go where I am useful. The rest is out of my control. | This prediction was a gift. |
| It’s not EVs that get ya, it’s the efficiency standards | Focus on EV demand reducing oil demand is a small slice. Efficiency standards are where oil demand steadily falls. | Vehicle efficiency standards remain the main game. Efficiency standards drive down oil demand, reduce emissions and incentivize uptake of EVs. Poor news that Australian Government has refused, to date, to release a new efficiency standard. | The drumbeat of tighter standards, with associated fines, has seemed more effective in reducing oil demand then the ‘consumer-led, consumption transition with small subsidies’ approach. |
| Economic vs. seismic activity | Earthquake activity should impact property prices. It has an impact but not uniformly. Seismic activity impacts lower quality housing stock. | It is the same for flooding. In the immediate aftermath of inland flooding, the average price of property in a postcode entirely inundated is 24.9% lower. Such discounts are however short-lived; property affected by inland flooding typically recovers after 5 years and in just 4 years for coastal properties. The time for price recovery differs markedly for properties in different price-quartiles. For properties affected by coastal flooding in the highest price-quartile, the property price discount disappears after only 1 year whereas for properties in the lowest price-quartile the discount remains statistically significant for up to 6–7 years. | Good for my brain. Started with an idea about Californian house price and earthquakes, finished with a direct link to the flood economics work that I am doing. |
| National rivalry and non-cooperation is a climate response killer | The worst condition for achieving effective climate response (keeping below 2 degrees) is international non-cooperation and national rivalry. | It appears we are not experiencing the worst condition (international non-cooperation). But emissions are still rising but a slower rate. We are more likely to be on the SSP 2 – Middle of the Road or SSP 4 – Inequality. Both are more positive than non-cooperation or fossil fuel centric scenarios. The difference is that Middle of the Road has slower progress on mitigation but more broad based while inequality is developed-country focused. | Again, I err on the side of pessismism . The implication is that I pick the worst scenarios to be worried about when it is never as bad or as good as I think. “All I ask is one thing, and I’m asking this particularly of young people: please don’t be cynical. I hate cynicism, for the record, it’s my least favorite quality and it doesn’t lead anywhere. Nobody in life gets exactly what they thought they were going to get. But if you work really hard and you’re kind, amazing things will happen.” |
| Australia: Land of many carbon prices | Australia currently lacks a national carbon price, but multiple implicit and sectoral carbon prices exist. | The post was more interested in seeing what arbitrage opportunities might exist. It doesn’t try to create an opportunity or talk about the actual goal – reducing emissions. | Focus on the goal of the schemes. Finding the underground tunnels between schemes to make profit is not what I am about but finding the underground schemes to understand where the outcomes can be strengthened is. |
| Overseas experience – steepening your future career trajectory | Earning an MBA from NYU emphasized long-term career benefits over immediate opportunities. Returning Australians, including those with overseas experience, often face job market challenges such as demotions and pay cuts. However, while initial re-entry may be challenging, overseas stints offer invaluable industry insights, global networks, and resilience, positioning individuals for a steeper career trajectory in the long run | Looking around, I don’t have much to measure this on. Perhaps that is the problem with this prediction. I didn’t set measurable targets – what does success look like. My journey has been more about diversification of interests and moving from sphere to the next. I also wonder about the role of humility, that the trajectory is a function of knowing what NOT to say. | Predictions like this need specific targets and timeframes. How would I actually have measured a late but steeper trajectory? Rate of change in earnings in post-MBA career? Increase in non-wage benefits (flexibility, missions selection, work/life balance?) |
| Hydrogen in Queensland: blended hydrogen target not $19 million for industry | Despite the Queensland Government’s claim to prioritize the hydrogen economy, they’ve only allocated $19 million over four years for its development. In contrast, the unbuilt Adani coal mine has been promised substantial royalty discounts. For the hydrogen economy to thrive internationally, significant investments are needed, especially in areas where there’s an established market and proven technology, like blended hydrogen for existing gas customers. | This was right. The amount ($19millon) was too little and the impact has been tiny. We are inching to a working hydrogen industry but production subsidies/targets are now recognised as the driving force. (Inflation Reducation Act). | It was the right but it missed the larger picture of a carbon tax. The easiest, cleanest way to decarbonise. |
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