The Two Dips

Are the largest global catastrophes self-inflicted?

AON Hazards 2023

Last night I had a chance to hear Richard “Harry” Harris talk about his experience as one of the rescuers of the Thai soccer team who were trapped in 2018 by seasonal flood waters in the Tham Luang cave system in north Thailand. Harris was the anesthesiologist who developed and implemented the plan to sedate the boys, strap on masks and oxygen tanks, and guide them the more than 2 kilometers underwater through the narrow cave system with no visibility. It is a remarkable story — I highly recommend the National Geographic documentary.

The Thai cave rescue has a happy ending and shows the incredible power of human ingenuity and the power of our shared commitment to each other. It also tells us that in some circumstances, proper expertise is absolutely essential to avoiding tragedy. Without the ragtag collection of spelunkers, medical professionals and technical support teams, without a doubt the boys would not have made it.

Of course, the flip side of this lesson is that in the absence of appropriate expertise, tragedy can result. How to marshal appropriate experts, providing useful advice, which is then considered in decision making is one of the central challenges of the early 21se century.

We have known this for a very long time. As Dennis Mileti and Lori Peek wrote more than 20 years ago:

Human beings, not nature, are the cause of disaster losses, which stem from choices about where and how human development will proceed.

In my lecture today at the 2023 Aon Hazards Conference, I focus on the claim that decisions that we make and do not make are almost always the root cause of the greatest catastrophes of the 21st century. To support this claim, I showed the following figure, which displays global GDP from 1990 to present.

Source: World Bank

You can see that global GDP steadily increased over this period, with the exception of two dips — a smaller one in 2009 associated with the Global Financial Crisis (GFC) and a larger one associated with Covid-19 in 2020. These dips are more than just squiggles on a chart — they reflect significant global catastrophes with impacts far beyond the economic.

Consider:

• The GFC cost the world an estimated $4 trillion;

• As many as 50,000 excess deaths among infants across Africa resulted directly from the GFC;

• Covid-19 has so far resulted in an estimated 25 million excess deaths;

• The pandemic caused more than ~$16 trillion in economic loss.

The precise magnitude of these numbers is less important than the fact that they are huge, with profound consequences across the world, touching almost every person on the planet.

What is notable about these “two dips” is that they both are the result of choices that were made — or more accurately, for almost all of us, choices that were made for us by experts, perhaps with inappropriate expertise or in the absence of effective oversight and governance.

The GFC was caused in large part due to the misapplication of so-called “value-at-risk” modeling. Covid-19 may have resulted from a research-related incident or, alternatively, from poor oversight of infectious animals in a Wuhan wet market — in either case it was poor decision making.

The economic and human impacts of the GFC and Covid-19 dwarf every other catastrophe of the 21st century so far. And when we look more broadly at the catastrophes of the 21st century, we can readily identify poor decision-making and the inappropriate use of expertise as root causes, as shown in the slide below.

Given the roles played by decisions and experts in contributing to the circumstances that resulted in catastrophic outcomes, it is absolutely remarkable — stunning even — that political and scientific leaders around the world are not pounding the table demanding that we better understand how our decision making resulted in recent disasters.

Every time a plane crashes there is an international response activated under a global treaty to understand precisely the causes of that crash and what measures might be put into place to make sure that it never happens again. Why don’t we do this for disasters?

I concluded my talk today with an appeal to the many global leaders in the audience whose professional roles are to assess risks and help the world prepare for them:

We need stronger, more independent institutions where expertise meets decision making

We learned (again) a few weeks ago in the Libyan flood disaster that exposure and vulnerability to loss is often known (by someone) in advance of the disaster. In that case it was failing infrastructure that was not upkept, resulting in dam failures with catastrophic consequences. It was not the lack of knowledge that caused the disaster, but the lack of institutional capacity to turn that knowledge into effective decision making.

Not all catastrophes can be avoided, of course, but with greater attention to on-the-ground exposures and vulnerabilities in the context of risk, we can and should do much better. But that, of course, is a choice.

Thanks for reading! I welcome your comments, questions and challenges. If you are interested in more along the lines of this post see my lectures last fall at Oxford and University College London. THB is made possible because of you. Please like, share and subscribe!