By Maty Nikkhou-O'Brien and Dan O'Brien, Diplosphere
This is a summary of Diplosphere's panel discussion on 'After the Pandemic, Prepare for the Roaring Twenties?', held on 17 February, in Wellington.
Chair: Maty Nikkhou-O'Brien, Founder & Executive Director, Diplosphere
Speakers:
- HE Nina Obermaier, EU Ambassador to New Zealand
- Rt Hon Simon Upton, Parliamentary Commissioner for the Environment
- Kirk Hope, CEO, BusinessNZ
- Pinky Agnew MNZM, VCANZ, Expert on Love
- Prof Tim Naish, Antarctic Research Centre, Victoria University of Wellington
- John Ballingall, Economist, Sense Partners
History does not always repeat itself … or does it?
As Auckland emerged from another lockdown, Diplosphere in Wellington hosted a talk comparing the 1920s to the 2020s. A heterodox levels of analysis was on show with adept panellists' views espousing the science of the climate, a sketch of macroeconomics of the past twelve months, thoughts on the resilience of our institutions as we face compounding shocks, the EU's perspective looking back and forward, a view from New Zealand business, and finally a more human and humane look: how manifestations of our love at weddings, funerals has changed in the pandemic era.
The discussion ebbed from the apocalyptic and flowed to the hopeful. We discussed big ideas but also learnt about facts and equations from economics 101 to climate, such as Y (expenditure)= C + I + G + (X – I), tax = love, life last year = 2020 + X (where X=wedding, funeral, illness, achievement, etc.), and the all important limit of 2 degrees of warming above pre-industrial levels. Speakers recognised similarities yet differences between the 1920s and our erstwhile decade. More than anything, it was a chance to stand back from the mayhem of information overload, and sketch out a big picture.
Nobody knows of course, how things will pan out. But to even canvas some of these points, to hear them uttered for the first time, makes one think and calibrate ones own actions and initiative. To learn that that above infectious diseases and debt crises, the World Economic Forum lists climate action failure, extreme weather, and human environmental damage as the top three risks to the global economy is sobering thought (Ref). We will carve up the talk into three parts, starting with the climate emergency.
Climate change protest in London in 2019
The best-case scenario for our planet is 1-2 degree warming above pre-industrial levels by the end of the century.
What does this mean?
More extreme events but in some ways manageable. However, we have to do a lot of work to get there. Some panellists expressed grave concern in the resilience of our institutions to the whims of body politics to see us through. Because to get to 1-2 degrees (only) of warming, we need to do a lot of work.
We may laugh off planetary-level climate engineering (geo-engineering) at present, but before long policy makers may be needing to decide on radical ideas such as sunlight reflection through giant mirrors in space or artificially reflective clouds. Our best-case scenario is based upon a linear model of climate change, that is, increases in climate inputs like greenhouse gas levels cause proportional warming of the climate.
However, there are tipping points built into our climate system, catastrophic events that warming could unlock: release of gas trapped in the tundra, catastrophic and irreversible loss of Antarctic ice sheets causing sea level rise, retreat of the glaciers in the Hindu Kush, and other events which could have a compound effect on global warming.
We just don't know yet when these inflection points will be reached. We would literally be playing with fire to ignore the signals in front of us and carry on as usual - where warming of 5-6 degrees by the century's end, is the estimate. If that happened the outcome would be truly apocalyptic.
But there is hope within all the doom & gloom, the public discourse on climate change has changed immeasurably, ten years' ago scientists were called out as crackpots when they sounded the warning bell, today, public discourse has switched in their favour. And we know that humanity can act quickly for the common good, as last year showed us: COVID-19 vaccines were developed for in record time.
1920s immunisation
The 1920s saw great advances in vaccine development too (tuberculosis, diphtheria, scarlet fever, tetanus, whooping cough, were all firsts of that decade). As the saying goes, necessity is the mother of invention. And with COVID-19 and the inventiveness of vaccine development, this rang true. The need was clear and present. The need to address human induced climate change is also clear and present.
We have no excuse now not to apply the same urgency to how we look after the climate and wellbeing of our planet and reimagine the future. Yet we remain surprisingly complacent.
To the economy - it is important that we frame the discussion in a NZ context rather than a US-centric narrative, we learnt. The "roaring" 1920s saw real GDP growth of 25% in the US whilst New Zealand "miaowed" with a 7% decline of in real GDP, on the back two recessions. Then, as now, NZ commentators lamented reliance on commodity export single trading partners - the UK, now China. Though there is a big difference - China is the engine of global growth, whilst the UK was not growing at the time.
Prime Minister Jacinda Ardern with Chinese President Xi Jinping.
Without fanfare, it was noted how the role of government in the economy has proportionally increased, with massive fiscal interventions around the world, soaking up economic resources, and government debt will need to repaid at some point. Business investment may benefit from low interest rates however it would be a brave businessperson to place a long-term bet on a roaring economy at present. Household consumption has held through well enough, but surely money printing cannot simply continue without a gain in productivity, lest consumer price inflation hits us.
There are reasons to be optimistic about the economic and business outlook, but it was pointed out, we should not be naïve to think that we come through a massive and coordinated global demand shock complete with unprecedented fiscal and monetary injections that could have ramifications for decades to come, completely unscathed. We are leveraged.
The concept of being leveraged was taken further than just financial leverage. We have mortgaged the natural world a long way - our waterways, atmosphere, land, are all being intensely used, to what consequence? Just as a highly leveraged firm is more prone to shocks, and thus a riskier investment, our societies are more prone to socio-economic shocks when we leverage the natural world.
We were asked to envisage a situation where not only a human health pandemic raged knocking out international tourism is this country, as has happened, but also an animal pathogen hit our primary sector. The multiplication of shocks would place sever strains on institutions and economy. The question of resilience, the multiplication of shocks, and the survival of our institutions, was raised.
The real question of the 2020s may be - will our institutions survive? An allusion was made to the 2nd century Antonine plague which hit Rome at its most globalized apex, not incidentally (NYT Article). Rome was exposed to pathogen risk as a direct consequence of its technologic prowess, scale, trade routes and globalisation (the first recorded contact with Han China and Rome dates from this time).
An engraving by Levasseur after Jules-Elie Delaunay depicts the angel of death at the door during the 165 A.D. plague in Rome.
Parallels were also drawn between the 1920s and 2020s, similarities in astonishing technological innovation (mass media, airlines, vaccine development, mail order businesses all date from the 1920s), but upon closer inspection, differences become apparent. For one the 1919 pandemic killed 40m people in a world population of ~2Bn whilst today 2m have died of Covid-19 from a 9 Bn world population.
It was noted about our general complacency, especially in "Western" countries towards the virus. That we remain complacent on many fronts - especially the climate. We remain ecologically fragile. To tackle this mother of all challenges, global concerted action is needed - our public goods, our institutions, need to be resilient to political winds of change, and remain true to the task at hand.
The real question is - will we have institutions we can trust? Institutions that can manage the risk for us? As has been remarked elsewhere - the action we take over the next ten years will determine the future of humanity for the next 10,000 years.
Further Reading on the climate: