By Garvin Jabusch.
For many young people, climate change fosters a downpour of dread, flooding their mental landscapes with anxious uncertainty. Far beyond physical threats, the realities of our warming world shape how millennials and Generation Z think, feel, and visualize their futures. This unfolding climate crisis erodes youth’s emotional resilience. Their minds strain to reinforce psychological defenses against distress over the gathering environmental storm. Feeling they wield few empowering resources beyond passion and small voices struggling to cut through the din, society’s youth shoulder immense pressure. They have taken on the soul-wearying role of psychological bulwark builders in the face of climate change’s overwhelming stresses. Young people often perceive themselves as alone on the front lines, erecting fragile mental dams against escalating tides of worry and despair that threaten to drown their hopes for brighter futures. Facing climate anxiety with inadequate coping mechanisms, many youths’ sense of fortitude becomes fatigued and risk of buckling grows. In other words, the unfolding climate crisis poses exponential emotional threats and uncertainty that actively break down psychological resilience in younger demographics.
To help Generation Z, we must confront how our warming planet floods their worrying minds, erodes resiliency, and prompts urgent calls for action. But in the end, mere calls for action won’t cut it; our youth need to see concrete, good faith progress in defusing the climate emergency. Antidepressants aren’t going to stop the heating.
Insights Reshaping My Perspective
Recently at the Reuters’ ESG Investment North America 2023 conference, I gained a sobering view on the youth mental health crisis from Danish Munirat, an expert co-panelist. On the topic of mental health issues among Gen Z, I was predisposed to fall back on the narrative that the mendacious algorithms of social media are the primary culprits, as indeed to a large degree they are. “Social media has been catastrophic for American happiness, especially among young people, especially among young women,” is how happiness expert Arthur C. Brooks put it on Peter Attia’s podcast. While the prevalent narrative points to social media’s dopamine-distorting effects, Danish instead illuminated the burden of “climate anxiety” plaguing Generation Z. His insights resonated, and what I have learned from my subsequent reading and learning clearly crystallizes climate change’s outsized impact in driving the mental health challenges now confronting society’s youth.
The Phenomenon is Real
You don’t have to do much homework to find evidence of the climate crisis affecting mental health. According to reporting from the BBC, “Search queries in English around “climate anxiety” in the first 10 months of 2023 are 27 times higher than the same period in 2017.” And information from Google Trends shows that searches related to climate anxiety have increased dramatically. One important paper in the prestigious English medical journal The Lancet is unambiguous in its findings:
According to our study, children and young people in countries around the world report climate anxiety and other distressing emotions and thoughts about climate change that impact their daily lives. This distress was associated with beliefs about inadequate governmental response and feelings of betrayal. A large proportion of children and young people around the world report emotional distress and a wide range of painful, complex emotions (sad, afraid, angry, powerless, helpless, guilty, ashamed, despair, hurt, grief, and depressed). Similarly, large numbers report experiencing some functional impact and have pessimistic beliefs about the future (people have failed to care for the planet; the future is frightening; humanity is doomed; they won’t have access to the same opportunities their parents had; things they value will be destroyed; security is threatened; and they are hesitant to have children). These results reinforce findings of earlier empirical research and expand on previous findings by showing the extensive, global nature of this distress, as well as its impact on functioning.
Climate anxiety is severe enough that is it having an “impact on functioning.” Younger people feel betrayed by their leaders and policymakers who have refused to mount an adequate response to an obvious crisis. Note that in the below chart from the Lancet paper, people in every country surveyed feel more betrayed than reassured by their government with respect to climate (note, the surveys were representative of entire populations, not just youth):
And why shouldn’t people feel betrayed? The real world keeps building new coal plants, new gas fired plants, exploring for more fossil fuels, and making more internal combustion engine cars; climate world talks and holds conferences. Investors, including most ESG investors, keep buying fossil fuels, fossil fired power plants, and internal combustion engine makers, locking the world into more decades of this destructive pattern.
In 2023, the signs that the world is plunging further into the climate crisis were everywhere: increased frequency and destructiveness of extreme weather events like hurricanes, floods, and heat waves causing loss of human life and economic damage; accelerating polar ice sheet and glacier melt leading to faster sea level rise that threatens coastal areas and small island nations; expansion of heat and drought and water insecurity creating climate migration and geopolitical tensions; Amazon rainforest and other crucial carbon sinks continuing to get closer to irreversible tipping points; existential threats to biodiversity with accelerating species extinctions across land and oceans due to ecosystem changes; lack of decisive policy action and emissions reductions by major corporations and high-emission countries failing to reach climate goals set in Paris Agreement; ever increasing extraction and burning of coal and natural gas. The world’s best performing IPO in 2023 so far is a new coal stock. Bloomberg reports that “The amount of bank financing going to mining coal, the dirtiest fossil fuel of them all, remains at surprisingly high levels.”
The list of indicators that the causes of the climate crisis are still accelerating is long, and could take up dozens of pages in this post. But you get the point: so far civilization is a dollar short and a day late in fixing the climate crisis. Worse, we’re still allowing its causes to accelerate.
Meanwhile, July and August 2023 with the hottest months ever recorded, and September 2023 was a full 1.8 c above pre-industrial temperatures (see image below of a Tweet from climate scientist Zeke Hausfather), and extreme weather events are occurring all over the globe. And emissions keep rising, in spite of all the paper pledges and agreements signed by Nations and corporations, usually represented by a baby boomer.
Gen Z is Doing What it Can
On his podcast “Stay tuned with Preet”, former US Attorney for the Southern District of New York Preet Bharara discussed the landmark climate case Rikki Held v. Montana, a case brought by 16 Montana youth, who argued that the state’s energy policies violate their constitutional right to a clean environment. One of the plaintiffs, identified by Bharara as Grace, explained what stress the climate crisis is inflicting on our youth: “I see the things that I stand to lose already beginning to change. I have this kind of perpetual fear of loss…I have so much frustration that this is a problem I’m even having to think about, that this is a problem that wasn’t solved 50 years ago. I also have frustration that the burden of solving this problem is being put on my shoulders.”
In their MDPI paper “Psychological and Emotional Responses to Climate Change among Young People Worldwide: Differences Associated with Gender, Age, and Country,” Clayton et. al. found “Even in countries like Finland that have not yet experienced major physical impacts of climate change, for example, the indirect impacts are so strong that many young people reported some hesitation to have children. Given this evidence of a strong emotional response to climate change, research needs to further examine the impacts on young people and on their plans for the future, and ways to reduce the distress that young people are feeling.”
IPCC, perhaps becoming weary of timid warnings embedded deeper in their documents, have moved the urgency right into the title of their latest publication, Emissions Gap Report 2023: Broken Record – Temperatures hit new highs, yet world fails to cut emissions (again). The paper’s abstract says that “the world is heading for a temperature rise far above the Paris Agreement goals unless countries deliver more than they have promised.” And yet, so far, nations have delivered much less than they have promised.
This disconnect between crisis and action, papered over both intentionally and unintentionally by seemingly endless but unenforced and unenforceable commitments is causing a mental health crisis. Of course it is. Reality on the ground is not being met, cannot be met, by greenwash, and everyone knows it. The climate related mental health crisis emerges from this cognitive shearing.
Perhaps it’s no coincidence that the youth who refuse to give into despair and instead try to work for change are among most influential and well-known activists of our time.
It is not hard to imagine ways to reduce distress. Today, the world runs primarily on fossil fuels that are already causing crises and that left unchecked will bring about some level of collapse. None of this will change until people see authentic effort, followed by tangible results. These are the obvious keys. No one is falling for the never-met pledges of the COP agreements anymore; we need to see something real that we can believe in.
If COP Agreements and ESG Investing Have Failed Gen Z, What Next?
So where do tangible results come from? The only thing demonstrated to work, so far, is capital flows; economic change comes from investment. If anything is true in economics, it is that tomorrow’s production function emerges from today’s investments. And today, as a global civilization, we are still investing more in fossil fuels than into renewable energies and replacements for petrochemicals. This is the mathematics of disaster, as it leaves us locked into the same destructive economy we have been living in for the last century or so.
Why are we locked into this destructive investment pattern? First, Al Gore is right when he points out that we have been deceived, by enormously rich and fathomlessly powerful interested parties, to believe that there really is no problem, or if there is, it’s not fossil fuels’ fault (watch the video at the link, seriously).
Second, and just as critically, is the attitude of the world’s largest investors, and their out-of-date ideas about risk. For example, I recently listened to a podcast conversation between the Chief Corporate Governance Officer of Norway’s sovereign wealth fund, Carine Smith-Ihenacho, and climate finance expert Michael Liebreich. Liebreich pressed her on several occasions to explain the funds asset allocation priorities with respect to climate, and she effortlessly deflected, at one point saying, “if you look at climate change, and how to address it, it’s not going to be solved by investors like us.” Please note that the Norwegian sovereign wealth fund is considered one of the most climate-progressive large pools of capital in this world. If they still believe diversification requires portfolio exposure to oil and gas, that shows the entrenched nature of legacy risk-management tools. With this as context, it becomes clear why emissions are continuing to rise, even now, in the obvious face of crisis. Seriously, how do we expect young people to react with anything other than disbelief when they hear Smith-Ihenacho’s comments, and see headlines like “Big Oil has a place in ESG funds, says Deutsche Bank CIO”?
As the Economist rightly opines, “A net-zero world needs new markets and institutions.” To that I would add that one of those institutions needs to be new theories of portfolio management, ones not hell bent on indexing, or in the case of active management, low tracking error with the index. The moment a portfolio manager serves two masters, one of the two masters will get the shaft. Most asset managers serve shareholders through promises to manage risk by never deviating too far from index returns: Investors get shanked with a poor climate solution. This is where ESG has failed; it serves the wrong master, and so capital continues to be lavished on the causes of our biggest problems, essentially ensuring those problems will continue to get worse. Here again, the world’s youth observe all of this, and they just can’t reconcile that the grownups in charge of it all refuse to change systems in the face of the obvious urgency of the problem. More cognitive frission, more mental health problems.
The scale of the crisis is underappreciated. Professor Scott Galloway recently provided the following context on his weekly podcast No Mercy/No Malice: “Between 2007 and 2021, the suicide rate among Americans age 10 to 24 rose from 6.8 per 100k to 11. This is the tragic tip of an iceberg; the teen mental health crisis Jonathan Haidt predicted a decade ago. Since 2011, the share of high school students reporting “persistent feelings of sadness or hopelessness” has risen from 28% to 42%. A recent study of rising suicide rates found that “the increase in the prevalence of depression among young people during the 2010s was so large, it could explain nearly all the increase in suicide mortality among those under 25.” Take a pause. What’s the point of any of this if 50% more of our children feel hopeless?”
And of course, the kids are correct, we are in far more danger right now than most people realize. all the climate harms we’ve locked in through decades of expensively procured inaction are present. The polycrisis needs poly-solutions, and those can only come from money going to the fixes.
So, the youth mental health crisis is in part down to the fact that young people are simply losing hope. And still, even at this late hour, we have the power to change that. It all depends on what economic systems we build – read: invest in – from here.
If “the purpose of a system is what it does,” then today, investment management serves to perpetuate the fossil fuels economy. But the other side of that coin is that if asset management can redefine how it thinks about risk, and prioritize climate above industry diversification or volatility, it equally has the power to halt the climate crisis, in a way that would be far more effective than diplomacy or policy. If we can change how investing works, we can change the future, and the kids will start feeling a lot better.
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