Four New Horsemen of an Apocalypse? Solar Flares, Super-volcanoes, Pandemics, and Artificial Intelligence

If economists have largely failed to predict or prevent the Global Financial Crisis in 2008, and the more disastrous economic collapse associated with the pandemic of 2020, what else is the profession missing? This is the question that motivates this survey. Specifically, we want to highlight four catastrophic risks – i.e., risks that can potentially result in global catastrophes of a much larger magnitude than either of the 2008 or 2020 events. The four risks we examine here are: Space weather and solar flares, super-volcanic eruptions, high-mortality pandemics, and misaligned artificial intelligence. All four have a non-trivial probability of occurring and all four can lead to a catastrophe, possibly not very different from human extinction. Inevitably, and fortunately, these catastrophic events have not yet occurred, so the literature investigating them is by necessity more speculative and less grounded in empirical observations. Nevertheless, that does not make these risks any less real. This survey is motivated by the belief that economists can and should be thinking about these risks more systematically, so that we can devise the appropriate ways to prevent them or ameliorate their potential impacts.

A Fate Worse Than Warming? Stratospheric Aerosol Injection and Global Catastrophic Risk

Injecting particles into atmosphere to reflect sunlight, stratospheric aerosol injection (SAI), represents a potential technological solution to the threat of climate change. But could the cure be worse than the disease? Understanding low probability, yet plausible, high-impact cases is critical to prudent climate risk management and SAI deliberation. But analyses of such high impact outcomes are lacking in SAI research. This paper helps resolve this gap by investigating SAI's contributions to global catastrophic risk. We split SAI's contributions to catastrophic risk into four interrelated dimensions:1. Acting as a direct catastrophic risk through potentially unforeseen ecological blowback.2. Interacting with other globally catastrophic hazards like nuclear war.3. Exacerbating systemic risk (risks that cascade and amplify across different systems);4. Acting as a latent risk (risk that is dormant but can later be triggered).The potential for major unforeseen environmental consequences seems highly unlikely but is ultimately unknown. SAI plausibly interacts with other catastrophic calamities, most notably by potentially exacerbating the impacts of nuclear war or an extreme space weather event. SAI could contribute to systemic risk by introducing stressors into critical systems such as agriculture. SAI's systemic stressors, and risks of systemic cascades and synchronous failures, are highly understudied. SAI deployment more tightly couples different ecological, economic, and political systems. This creates a precarious condition of latent risk, the largest cause for concern. Thicker SAI masking extreme warming could create a planetary Sword of Damocles. That is, if SAI were removed but underlying greenhouse gas concentrations not reduced, there would be extreme warming in a very short timeframe. Sufficiently large global shocks could force SAI termination and trigger SAI's latent risk, compounding disasters and catastrophic risks. Across all these dimensions, the specific SAI deployment, and associated governance, is critical. A well-coordinated use of a small amount of SAI would incur negligible risks, but this is an optimistic scenario. Conversely, larger use of SAI used in an uncoordinated manner poses many potential dangers. We cannot equivocally determine whether SAI will be worse than warming. For now, a heavy reliance on SAI seems an imprudent policy response.

The Fight for Climate after COVID-19

The catastrophic risks of pandemics and climate change carry deep uncertainty as to when they will occur, how they will unfold, and how much damage they will do. The most important question is how these risks can be faced to minimize them most. This book draws on the troubled and uneven COVID-19 experience to illustrate the critical need to ramp up resilience rapidly and effectively on a global scale. It exposes parallels between the underutilized measures that governments should have taken to contain the spread of COVID-19—such as early action, cross-border planning, and bolstering emergency preparation—and the steps leaders can take now to mitigate the impacts of climate change. Through practical analyses of current policy and thoughtful guidance for successful climate adaptation, the book reveals that, just as society has transformed itself to meet the challenge of coronavirus, so too will the thinking and policies need to be adapted to combat the ever-increasing threat of climate change.

Four Global Catastrophic Risks – A Personal View

Global catastrophic risks (GCRs) affect a larger than hemispheric area and produce death tolls of many millions and/or economic losses greater than several trillion USD. Here I explore the biophysical, social-economic, demographic and cultural strands of four global catastrophic risks – sea level rise, a VEI 7 eruption, a pandemic, and a geomagnetic storm – one human-exacerbated at the least, one geological, one biological in large part, and one from space. Durations of these biophysical events range from a day or two to more than 100 years and the hazards associated range from none to numerous. Each of the risks has an average return period of no more than a few hundred years and lie within a range where many regulators ordinarily demand efforts in the case of less extreme events at enhancing resilience. Losses produced by GCRs and other natural hazards are usually assessed in terms of human mortality or dollars but many less tangible losses are at least as significant. Despite the varying durations, biophysical characteristics, and the wide array of potential consequences, the aftermath at global (and at more granular scales) can be summarised by one of four potential futures. While this assessment considers the present and the near future (the Anthropocene), much of this appraisal applies also to global catastrophic risks in the Early Holocene.

Catastrophic Risks Management via Livelihood Diversification From Flood-prone Areas of Punjab, Pakistan

Agricultural lower productivity regardless of significant agricultural policy measures is considered major issue in mostly developing countries like Pakistan. These policies first and foremost focused on-farm development whereas the rich aspect of off-farm diversification is mostly overlooked. In mitigating climate change unpleasant impacts and dipping hunger, small farmers’ livelihood diversification performs considerable role. This study aimed to investigate the diversification of livelihood to managing catastrophic risks in rural farmers of Punjab, Pakistan. This research work used the data of 398 flood prone households from two higher risk flood prone districts of Punjab and employed logistic regression model for empirical estimation of the study. In managing catastrophic risks, majority of respondents almost 57% put into practice off-farm diversification of livelihood strategies whereas 44.5% adopted on-farm livelihood diversification strategies. Empirical estimates of logistic model illustrated as demographic, socioeconomic, risk perception and institutional characteristics considerably affect the farmers’ preference of diversification of livelihood. Results also highlighted the accessibility of inadequate labour force, poor roads and market infrastructure, be short of credit access, inadequate institutional support, restricted training and skills, limited natural resources and climate uncertainties and risks are some significant constraints in adopting the livelihood diversification in the study area. This research work advocated the necessitate for forcefully adoption the policies of climate change such as getting better services access, focus training initiatives, improved infrastructure and increasing institutional assistance. State based adoption of accurate policy measures and suitable deliberation so as to promote livelihood diversification as a part of enhancing national jobs to get better numerous livelihoods and save lives, as small farmers’ livelihood possibly will improve.

Pandemic Crisis: Malaysian Takāful Market

With the progressive number of COVID-19 cases, this pandemic has adversely impacted the Takāful market in different forms containing liquidity impact, financial market volatility and solvency capital. This study describes the Malaysian takāful and insurance market throughout the COVID-19 crisis as well as its response to alleviate the burden faced by policyholders/ certificate holders of life insurance and family takāful plans from the economic and Sharīʽah point of views. Qualitative approach is applied in this study to collect information, documents and data accordingly concerning to the topic discussed. The data will be explored using qualitative content, narrative, and discourse analysis to deliver its results and discussion. By understanding the precarious scenario of the Malaysian takāful and insurance market during the COVID-19 pandemic, we can further enhance the support to the regulator who has taken the initiative to direct the insurance and takāful industry to initiate adequate response to facilitate policyholders/ certificate holders during the outbreaks and decide what the best way forward would be as aligned with Maqāṣid al-Sharīʽah. This will ensure its positive impact in the Takāful market, not only to nurture sustainability in our ecosystem, stabilize the socio-economic but to safeguard policyholders/certificate holders accordingly so they could withstand pre, present and post pernicious outbreaks and pandemics. This study inspires Takāful practitioners, policyholders/ certificate holders, academicians, and the society to recognise the importance of takaful industry and it’s preventive measures to avoid takāful loss in this swift spread of COVID-19 comprising catastrophic reserves by takāful operators to mitigate adverse catastrophic risks to human life, and building a more humanising takāful which is in tandem with Maqāṣid al-Sharīʽah that attracts more potential policyholders/ certificate holders.