Climate crisis: Be the Indian elephant
The global financial crisis of 2008 endorsed Nassim Taleb’s theory of black swans, high-impact events, the rarity of which makes it difficult to calculate their probability. People tend to ignore the signs until it is too late. Later, Michele Wucker published The Gray Rhino, arguing that many obvious and highly probable threats (grey rhinos) are also disregarded. What do these metaphors teach us about how we respond to the pandemic — and the climate crisis?
As a once-in-a-century occurrence, the Covid-19 pandemic was indeed a black swan. Of course, it is prudent to invest in public health infrastructure. But it is hard to predict the onset or origins of a pandemic of this scale. Over the past year, however, this black swan has metamorphosed into a grey rhino, with second and third waves in many countries, overwhelming health systems, administrative capacity and community resilience. It is no longer unpredictable or low-probability. The appropriate response should be to prepare for the worst, even as we hope for the best.
The pandemic offers four lessons that could inform how we prepare for the climate crisis. First, political borders cannot stop planetary risks. The origins of the virus may have been in China, but no country is immune. Climate risks are no different. Their nature varies by geography: Drier conditions in Southeast Asia and South America, wetter days and more flooding in northern and eastern Europe, more intense hurricanes in the Caribbean and cyclones in South Asia. The systemic risks transcend boundaries — increasing transboundary water stress, falling farm yields in one region impacting food prices elsewhere, spread of vector-borne diseases, or human security concerns, resulting in environmental refugees.
Second, like the pandemic, climate shocks come not at once, but in waves. The probability of climate risks increases with time. A failure of the monsoons in one year compounds when rainfall is below normal for three or four years in a row. Severe heat stress can swamp hospital infrastructure. But it can also undermine electricity grid stability, causing far worse damage to economic activity.
Third, some are more vulnerable than others. Daily wage earners, migrant workers, industrial labour and people with co-morbidities have suffered the most during the pandemic. Vulnerability is a function of exposure to hazards and one’s capacity to adapt. Resilience, by converse, draws on income and wealth, social safety nets, administrative efficiency, and access to timely warnings. In the case of the climate crisis, vulnerability extends beyond communities to large infrastructure.
Fourth, the more dynamic your economy, the more you have to lose. The need to restore economic activity demands that there is also a readiness to respond to pandemic aftershocks. Ignoring the risks can jeopardise economic recovery. Similarly, the climate crisis will impact the world’s engines of growth badly. As Swiss Re estimated recently, the global economy will be 11-14% smaller by mid-century than if there had been no warming at all. Fast-growing Asia should be particularly worried — Gross Domestic Product will be 14.9-20.4% lower. Factoring in the increased the severity of unknown unknowns, 2.6°C of warming by 2050 could make India’s economy 27% smaller than in the no-warming scenario.
These lessons must translate into action. First, create a Climate Risk Commission with statutory authority to analyse and report on climate risks on a periodic basis. Like the finance commission, it must consult with not just climate experts but also state governments, academia, industry, the media and civil society. The commission’s report should be tabled and debated in Parliament.
Second, prepare for climate shocks with decentralised capacity. The national and state disaster management agencies are a start. Similar structures are needed at district levels. Decentralised infrastructure, from distributed power sources, distributed water storage, revamped primary health centres (using off-grid power), or nature-based solutions to reduce coastal floods can greatly boost community resilience.
Third, assess critical vulnerabilities for hard infrastructure. This is not limited to reducing physical losses to power plants, bridges, airports, or telecom infrastructure. India must understand financial risks. The Reserve Bank of India should demand regular reporting of climate risks in the lending portfolios of banks. The Securities and Exchange Board of India must mandate the same from listed companies. There is a need to assess risks to legacy investments in coal, ongoing investments in natural gas, and exposure to supply chain risks for critical minerals needed for low-carbon technologies.
Finally, India needs a restructured economy, which values and monetises the preservation of natural capital, invests in sectors that are both low-carbon and employment-intensive, and creates an ecosystem to stimulate innovation (batteries, green hydrogen, carbon sequestration, regenerative agriculture, sustainable freight and transport, among others).
The tragedy of the pandemic will be aggravated if we do not heed its lessons. Not every crisis needs be a black swan, if we analyse data and anticipate risks. It is worse to ignore the known dangers of grey rhinos. As the climate crisis unfolds, perhaps what is needed is not a swan or a rhino but an Indian elephant, whose long memory can remind us of times when we were unprepared.
Arunabha Ghosh is CEO, Council on Energy, Environment and Water
The views expressed are personal
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