What else could go wrong? Risks to prepare for.

After the extreme drought, bushfires and, the health and economic catastrophe of COVID-19, could there be another disaster soon? It is not impossible and Australia should be preparing for it.
There is a saying that bad luck comes in threes, although it is arguable that the drought, bushfires, and the pandemic were not caused just by bad luck. What could the next calamity be? There are several candidates.
One possibility is a large-scale terrorist attack, perhaps timed to wreak the most damage while we are distracted by our other challenges. It is to be hoped that anti-terrorist surveillance is still operating without reduced resources.
Another pandemic can’t be ruled out. There have been three corona virus outbreaks in the last 20 years. As well as COVID-19 there was SARS and MERS. Even if severe disease pandemics strike every 50 years on average, there is still a 2% chance of one in 2021.
Solar flares are a hazard for electronic communications. The last major disruption was the Carrington event in 1859, in the days of the telegraph. A huge solar flare followed by a large coronal mass ejection struck Earth induced huge currents into wires causing extensive and costly damage. Lesser events struck in 1903, 1921 and in 1989, the latter causing a huge blackout in Canada. In 2012, there was an event of similar magnitude to the 1859 Carrington event which passed through Earth’s orbit – fortunately, the planet was in a different quadrant of its orbit. A repeat of the Carrington event today would severely disrupt all forms of communication, power transmission, GPS and other navigation, and damage pipelines. The recovery time has been estimated at four to 10 years and the cost at up to $2 trillion in the first year. The likelihood of a major flare direct hit may be one per 200 years, or a 0.5% chance in 2021.
Since 2000 there have been three incidents of flight disruptions due to volcanic ash clouds. Airlines are struggling to survive the COVID-19 pandemic and another major blow soon could be fatal for many of them. Much more severe eruptions occur at the rate of one per 100 to 200 years which are capable of disrupting air travel globally. Such eruptions occurred in Iceland in 1783 in Iceland and in 1815 in Indonesia. Less frequently, mega eruptions can severely cool the planet for several years leading to huge numbers of deaths by starvation and freezing. The likelihood of a major eruption may be one per 200 years, or a 0.5% chance in 2021. The likelihood of a mega eruption is perhaps one per 50,000 years.
In 1908, a large comet or asteroid caused a major explosion over Siberia (the Tunguska event). The energy released was up to 1,000 times greater than the atomic bomb dropped on Hiroshima in 1945. Fortunately the area was sparsely populated, but such an impact on a major city would be catastrophic on an unprecedented scale. The likelihood may be one per 1,000 years.
The individual likelihoods are small, but they occur independently and so the cumulative risk is higher – perhaps there is a 4% likelihood that one of them will occur in 2021.
Since 2000 some of the localised catastrophes that have occurred include:
• Hurricane Katrina which devastated New Orleans in August 2005, with the loss of over 1,800 lives;
• The Boxing Day 2005 great earthquake in Sumatra and the resulting tsunami, with the loss of over 200,000 lives;
• The March 2011 great earthquake in Japan and the resulting tsunami, with the loss of 16,000 lives and the destruction of a nuclear power plant which could have had even more widespread consequences;
• The European heatwave of summer 2003, which killed over 70,000.

There is a wide range of other events which are possible and which could cause economic and physical damage.
The World Economic Forum develops an annual global risks report. There 2020 report, developed during September and October 2019 has extreme weather, climate action failure, biodiversity loss, and natural disasters as the most likely large impact risks. These are followed by human-made environmental disasters, cyber attacks, and water crises. Infectious disease was listed as a low risk with moderate impact – yet it happened with major impact on lives lost and economic output.
Government and business planners should develop scenarios to cope with such rare but devastating events and rehearse their strategies.
What else could go wrong? What about increasing civil unrest in the US and elsewhere, or an escalation of trade wars? Or a failure of economic policy given the pandemic, record low interest rates, and increased government debt?

 

Much government planning is based on the assumption that future generations will be more wealthy than today’s. On that assumption, action on threats such as climate change are postponed. The base assumption has been looking doubtful since the GFC and even more so in the year of the pandemic.
Maybe our luck will improve in 2021 and beyond – but don’t count on it. We cannot afford complacency and procrastination.
Charlie Nelson