Risk Insights
October 7, 2020

2020: A Year of Disasters. Managing Interconnected Risk

The wildfires in the West and Hurricane Delta aiming toward the Gulf Coast this week. COVID-19’s grip still choking health care systems and economies. Political fighting and conspiracy theories run amok. All are timely reminders of a more interconnected world. And all are timely reminders of how human society has increased the risk of large-scale disasters. From health care to infrastructure, to national security, systems designed to keep us safe have also heightened the potential for catastrophe. The constant pressure of climate change, geopolitical conflict, and our tendency to ignore what is hard to grasp exacerbates potential dangers. RANE spoke with Jeffrey Schlegelmilch, Director of the National Center for Disaster Preparedness at the Earth Institute to talk about interconnected risk and resilience and how careful planning can help avert or mitigate disaster.

ON SAFETY AND SECURITY, says Schmelgelmilch, “I began to see this is where human development, where our activities are contributing to both the overarching threat and the underlying vulnerability. So these areas are biothreats, including pandemics, climate change, critical infrastructure failure, cybersecurity, and cyber threats and nuclear conflict. The way that we’re living, the way that we’re interconnected as a globe, the way we’re encroaching on agricultural areas and ecological systems like we never have been before, are all increasing the opportunities for diseases to jump the species barrier and then spread throughout the world in a very short period of time.”

ON POLITICS: “Take preparedness funding. “There was no relationship between the level of preparedness funding and disaster prevention and rewarding politicians. So then you have to ask yourself, why would a politician put their neck on the line for preparedness? If their incentive structure, the ultimate incentive, is how voters behave at the ballot box. When we look at transactions in terms of relating to climate change, if you’re competing in a global environment and there are entire nations out there and entire industries that you’re competing with that are not spending the extra money to reduce greenhouse gas emissions, how can you survive in that environment? And so within, like whether it’s the cost of doing business, the individual transactions we engage in, or the political transactions that our elected officials engage within, there’s an incentive structure that guides them towards certain decisions.”

ON RESILIENCE: “I think we’re seeing that play out right now in an extreme. There’s a rewarding of just extreme statements. There’s a rewarding of conspiracy theories. There’s a lot of clicks for online advertisers for news sites that have very provocative headlines. And all of these things are currents that are running against the direction we need to be headed in to build resilience. And I think in recognizing that we can start to deconstruct them and we can start to say, how can we better balance these incentive structures? How can we better bake the value of resilience into those transactions, be they individual, business or political or something else.”

ON CLIMATE CHANGE: “When we talk about climate change, we’re looking at a myriad of different impacts from some places experiencing more flooding, more rainfall, potentially more storms, certainly more severe storms, some places getting drier, less access to water, increased wildfires. We’re already seeing echoes of this in the west of the United States, in parts of Europe and other parts of the world. We’re seeing cities on the brink of running out of water, all this leading to greater instability in certain regions where some regions may be completely uninhabitable over the next century. How does that play into states that are weakened for a variety of other governance reasons? What does that do to food supplies when the temperate regions that are dependent upon for certain agricultural products start to shift? As well as broader economic considerations of the coastal real estate market, how is that going to be affected by increased flooding and rising sea levels?”

ON MARKETS: “There are all sorts of markets and conditions and status quo that are about to be thrown out of balance. And if we don’t have a plan for that, we’re going to be reacting to it and the reaction to these, when the disasters occur is going to be at a much larger scale than anything in recent memory. That brings us into critical infrastructure and so much of what we do rests on crumbling infrastructure. So we’re seeing this increased strain on our infrastructure, and it’s great to cut ribbons and debut the latest project, but it’s very much more difficult to fund it as well as to get a myriad of stakeholders into building infrastructure that’s designed for technologies that haven’t even been developed yet.

And we’ve seen some patterns of major accidents or major disruptions as a result of our decaying infrastructure that could be forecasting larger disasters to come as well as a combination of infrastructure failure with these other disasters.”

ON CYBER THREATS: “With cybersecurity, everything from nation states, stealing secrets and corporate espionage, they call, I believe there’s a quote in there on the cyber espionage from China being one of the largest transfers of wealth in modern history, as well as criminal enterprises seeking to make a profit.

And as a new tool in asymmetric warfare where our local election systems are on the front lines, the doomsday scenario isn’t necessarily a cyber terrorist destroying a dam or shutting down a power grid, although that’s in play as well, but to erode trust in democratic institutions. They don’t need to change the results of an election and probably a hacker couldn’t because these systems are so decentralized, but they can make you feel like your vote didn’t count. They can change registration rolls that when you show up to the polls, they don’t have you there. And this, in an environment of increased polarization and distrust that’s being fomented by those seeking higher office, sets the stage for out-sized impacts as a result of it.”

ON GEOPOLITICAL THREATS: “And then finally, with nuclear conflict. There’s some actors out there and we’re hearing North Korea make some noise and stuff, but how worried should we really be? And then I talked with a historian, Alex Wallerstein at the Stevens Institute in New Jersey, really to learn that actually the potential for use of nuclear weapons is probably greater than it’s ever been in history, yet at the same time, the consequences of the use of those weapons is completely different than in the heyday of the cold war when you had the U.S. and the Soviet Union with enough missiles pointed at each other to destroy the world many times over, and any other nuclear power was largely aligned with either one or the other.

And so there’s a much more unstable dynamic, but also a much more survivable scenario should nuclear weapons be used as well as cascading impacts. But then of course, across all of these are these, what are these cutting threats and vulnerabilities? Why is it that these threats and vulnerabilities are allowed to fester and persist and grow as in large part due to these kind of incomplete and reactionary approaches to disaster management rather than forward looking and really valuing some more cross-cutting investments, building our systems to adapt to uncertainty, funding our research to be more cross-disciplinary and include perspectives from different groups. As well as taking a hard look at how the incentives for the way we do business today may actually be silently growing these threats and vulnerabilities. Because they failed to adequately price in the value of resilience building, until it gets to a point where it’s a mega disaster of proportions that leaves folks to say, nobody could have seen this coming.”

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