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10SYSTEMS THINKING AND PUTTING A PRICE ON CARBON

Systems Thinking is Critical in Developing Solutions to Sustainability Challenges

Systems Thinking is Critical in Developing Solutions to Sustainability Challenges

Economic, social-wellbeing and environmental sustainability actions tend to meet the needs of the external and internal business environment in addition to preserving the capabilities of the future generation to fully meet their needs (Marshall, Coleman and Reason, 2011). Sustainability in business is all about satisfying the needs of the consumers and putting emphasis on social and environmental issues in addition to generating profits in a responsible way. More and more organisations have adapted sustainability practices in their operations. Companies emphasising on sustainability acquire higher competitive advantage and long-term success of the organisation and at the same time they benefit the community and the environment (Marshall, Coleman and Reason, 2011). Traditional models have been used to solve sustainability challenges but it is reported that they are insufficient in solving such issues. Therefore, there is a need for a new way of thinking that can ensure that sustainability challenges are eliminated completely. This essay will critically analyse the role of system thinking in solving sustainability challenges with more emphasis on putting a price on carbon.

From climate change to species extinction, from water pollution to deforestation, the society around us is unsustainable and getting worse by the day. The use of traditional models in solving sustainability challenges have assisted in reducing the effects but have not eliminated the problem (Marshall, Coleman and Reason, 2011). There is a need for a new model that is able to fully eliminate sustainability challenges. Research studies suggest that sustainability challenges can only be solved by the development of system thinking. System thinking can be referred to as the art and science concept of making consistent inferences about behaviour by means of developing a deep understanding of fundamental structure (Hung, 2008). It is the use of proper mental models that view the globe as a complex system with behaviour controlled by its structure.

On the other hand, sustainability is the adoption and incorporation of principles into decision making processes (Marshall, Coleman and Reason, 2011). This concept has the objective of preventing and mitigating undue harm facing the environment and people at any planning stage. There has been a growing need at international and national levels for effective environmental and social sustainability (Bosch et al., 2007). Therefore, it is very necessary to take into consideration systematic ways of minimizing environmental and social negative effects when organisations fulfil their mandates. In the world, everything is connected together to form a complex system. System thinking is important as it assist people understand the structure of the complex ways people live, from physiology to climate change, from marketing to organisational change (Cabrera, Colosi and Lobdell, 2008).

It is important to understand the structure of a system such as the physical elements, institutions, human behaviour and mental models that determines how people perceive the world (Maani and Cavana, 2007). Often than not, people treat problems in isolation by disregarding the networks of feedback which connect people together and to the nature. Sustainability challenges are solved in such a ways that they bring about short-term success but in the long run, the same challenges repeat themselves (Maani and Maharraj, 2004). Avoiding these self-defeating interventions in sustainability needs the consideration of actions with respect to the broader systems whereby everything is embedded. Also, business issues have become more complex as a result of globalisation. Therefore, businesses cannot still use the solutions that worked in the past to solve these issues (Smith, Felderhof and Bosch, 2007). Therefore, the approach of solving sustainability challenges must also be dynamic enough to utilize multiple approaches.

Inherent complexity nature of sustainability challenges limits the ability to observe and interpret and thus limit the ability of policy makers to develop and implement effective strategies and policies to solve them. This can potentially lead to failure (Nguyen et al., 2012). Well-intentioned policies that addressed the symptoms of a challenge lead to short-term benefits that can be overwhelmed by the long-term reaction of the system. It is therefore right to conclude that system thinking is an essential tool required by the decision-makers (Marshall, Coleman and Reason, 2011). The tool give space for the discovery of the root causes of sustainability issues denotes them in a visually instinctive manner, and look for possible leverage ideas for policy implementation. System thinking enables a multi-stakeholder initiative approach and the integration of knowledge that supports broadly shared decisions. Through this tool, initiatives and better policies can potentially be developed, evaluated and implemented and assessed over time (Confino, 2012).

One sustainability challenge that has affected businesses and the world alike is climate change. Climate change has been taking place since the 1950s. The atmosphere has warmed, the sea levels have risen and polar ice has melted. Carbon dioxide gas emission has increased which has been attributed to economic and population growth (Solomon et al., 2009). The effects of carbon dioxide have been detected in the climate system which has been a huge cause of global warming. Climate change has brought about significant effects on natural and human system across the world. Climate change has been observed for many years now and is characterised by decrease in cold temperature, increase in incidence of heavy precipitation and increase in the sea levels (Trabalka and Reichle, 2006). In order to prevent further damage to the environment and the human species, there are several efforts that have been made to prevent further climate change and global warming.

Climate change due to excessive emission of carbon is a wicked problem that needs to be solved effectively. Many interventions have been used which have brought about short-term success. In the long run, the world is still experiencing the same problem (Solomon et al., 2009). Therefore, there is a need to develop an intervention that will take into consideration the complexity nature of climate change. System thinking is effective in doing this. Most of the current efforts to solve climate change target systems of unsustainability instead of the cases (Warrick and Mooney, 2014). For instance, vehicles generate too much carbon dioxide and therefore we focus on the symptom which brings us to solving the issue by raising the efficiency of the new vehicles. However, the resulting reduction in oil demand due to more efficient vehicles leads to lower oil prices which may discourage people from buying efficient vehicles and may affect the economy as a whole (Solomon et al., 2009).

System thinking involves the expansion of our mental models that will assist in identifying the potential for resistance and designing more effective interventions (Jackson, 2003). Putting a price on carbon is able to encourage automotive companies develop more efficient cars and encourage customers to buy these efficient vehicles without any complex regulation. This is able to solve the increasing amount of carbon in the environment without having any impact on the economy. Putting a price on carbon is a measure that has been implemented to solve climate change due to excessive emission of carbon. The government and non-governmental institutions have come together to support carbon pricing in order to minimize emissions (Solomon et al., 2009). Putting a price on carbon assist in shifting the burden for the damage to people responsible and who have the ability to reduce it. Putting a price on carbon is a solution that has been developed as a result of system thinking.

Putting a price on carbon is a solution which gives a chance for polluters to decide whether to discontinue polluting the environment or pay for it (Solomon et al. 2009). Doing this ensures that ensures that the overall environmental goals is attained using the most flexible and cost effective technique. Putting a price on carbon can involve two strategies. The first one is the cap-and –trade system which allows industry sectors with low carbon emission to sell their allowances to industries with high emissions (Warrick and Mooney, 2014). This creates supply and demand for carbon emission allowances which enables a market price for carbon emission to be established. The second one may type the form of carbon tax which is set by defining a tax rate on emissions. The choice of the model to use depends on economic circumstance. Both models ensure that there is reduction of greenhouse emission which has the potential to solve climate change issue (Warrick and Mooney, 2014).

System thinking encourage moving beyond technical solutions. Technology has promised the development of interventions that can create a more sustainable world (Jackson, 2003). Technology often leads to unintended consequences. Innovation is important in realizing the potential of technology. Technology can be made more effective though regulations that create level ground and prevent free riding (Jackson, 2003). System thinking supports the idea of coordination between different parties in finding a way to solve sustainability challenges. It is impossible for one body to be able to overcome sustainability challenges. It is very fundamental to involve different parties in the problem-solving process to ensure success. It is difficult for one organisation to address sustainability challenge (Jackson, 2003).

New relationships with government, local community, non-governmental organisations and other business organisations must be established in order to offer a more stout proficiency pool of resources (Jackson, 2003). For example, in order to solve climate change issues as a result of excessive emission of greenhouse gas, social change is required in the part of different industries as well as people. System thinking give people a chance to recognize the significance of a social system thus changing physical infrastructure only will not create system-wide resilience. It is important to evolve from solving vulnerability challenges to advocating for societal transformation which attempts to collectively develop a long lasting solution to business challenges that promote sustainable growth. Placing a price on carbon advocates for social change and that’s why it has evolved as an effective approach to solving sustainability challenge (Hung, 2008).

An increasing number of organisations and businesses are using system thinking as a tool for solving sustainability challenges and have realized the benefits that come with it (Jackson, 2003). Using system thinking in developing solutions for sustainability challenges is able to ensure huge saving and improve social and environmental quality. It is obvious that system thinking is a powerful tool for solving sustainability challenges but it has remained an abstraction since its use today is limited. The challenge the world is facing is to develop system thinking skills and assist in ensuring the world is a better place (Hung, 2008).

Interventions to solve sustainability challenges take a long time. For instance, carbon dioxide emissions accumulated in the air and causes global warming and climate change. Today, emissions are still high compared to the amount removed (Solomon et al., 2009). Thus, stabilizing the carbon dioxide emission will not necessarily stabilize the climate. Solving climate change requires greenhouse gases emissions to go down radically. What placing a price on carbon do is to ensure that people limit the amount of greenhouse gases emitted into the atmosphere which will eventually lower the emissions (Solomon et al., 2009). This strategy focuses on the long term result rather than short term. System thinking therefore has the potential to bring long term success with regard to sustainability challenges. Therefore, we can say that system thinking is critical in solving sustainability challenges. When sustainability challenges are identified, they deserve a serious thinking in order for their solutions to be developed (Solomon et al., 2009).

In conclusion, sustainability challenges are very complex to solve. The traditional models of solving sustainability challenges focus on the short term success which eventually leads to unintended outcomes. In order to fully solve sustainability challenges, there is need for a new way of thinking. System thinking is a new way of thinking that uses a proper mental model that views the globe as a complex system with behaviour controlled by its structure. System thinking can assist in looking for solutions for climate change. Placing a price on carbon is an imitative that is aimed at reducing the amount of greenhouse gases in the atmosphere. System thinking gives people a chance to recognize the significance of a social system. Placing a price on carbon advocates for social change and that’s why it has evolved as an effective approach to solving sustainability challenge. We can conclude that system thinking is important in looking for solutions for sustainability challenges. Without system thinking, it is impossible to achieve sustainable development success.

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