“What’s the collective noun for black swans?” asked an Oxford academic on Twitter last week as gas prices hit record highs. “An apocalypse,” came the quick-fire reply.
Black Swan events, or what disaster planners call “long-tail” risks, are not supposed to come all at once. We think of them as isolated events that happen only once every hundred years or so. If we plan for them at all, we tend to deal with them one at a time.
Yet in the past year, the world has faced a multitude of “historic” shocks amid the worst pandemic since 1918. Locally, we face severe disruptions not just of gas and CO2 supplies, but of the labour and fuel needed to operate supermarkets, factories and farms.
In mid-summer, Britain was hit with a “level 3” extreme heat warning and a low-pressure system stalled across central Europe, bringing “once-in-a-millennium” flooding to countries including Germany, France and Belgium. At the same time, the wildfire season sparked blazes in North America “larger than in previous history”.
There have also been near misses. In January, it transpires, we may have been closer to nuclear war than at any time since the Cuban missile crisis of 1962.
According to Peril, a new book by Washington Post reporters Bob Woodward and Robert Costa, America’s highest-ranking general twice called his Chinese counterpart in the final months of the Donald Trump administration to reassure him that the President had no plans to attack China, and that the US was not collapsing, according to The New York Times.
“Things may look unsteady,” General Mark Milley told General Li Zuocheng on January 8, two days after Mr Trump’s supporters stormed the Capitol Building. “But that’s the nature of democracy, General Li. We are 100 percent steady. Everything’s fine.”
No sooner had the General put the phone down, he convened a meeting with top US commanders to remind them that the procedures for launching a nuclear strike called for his involvement, and could not simply be ordered by the President.
‘Black Swan blindness’
So how has it come to this? Why are so many Black Swan events coming at once? And what does it say about the UK’s emergency planning that we were not ready for them?
Professor Bent Flyvbjerg, a fellow of St Anne’s College, Oxford and an expert on power and rationality in decision making, said we are all prone to “Black Swan blindness”. He says: “Our brains are not well suited for detecting extreme risks.”
Because we focus on the here and now and tend to discount the future, “your biggest risk is you”.
According to Prof Flyvbjerg, a key step in planning for Black Swan events is to embrace the fact they are not predictable. You can count on some, such as pandemics and earthquakes, happening at some point. But others will emerge completely out of the blue.
He compared a risk planner who does not see this to a casino owner who thinks he has everything covered: “The law of large numbers, that’s what works in a casino; you always know what the average winning score is going to be. And that’s why the casino can make money.
“But that’s not the Black Swan. That is what is predictable. A Black Swan event for the casino might be an earthquake that makes the building crumble. It’s random. That’s the difference.”
Prof Flyvbjerg and others say Black Swans are becoming more frequent as the world becomes more complex and interconnected. And, he adds, “the walls are coming down between natural and human systems, with humans impacting nature at a global scale for the first time in history”.
Regressing to the tail
Worse, Black Swan events “regress to the tail” – meaning that no matter how extreme a Black Swan event is, a more extreme one will eventually occur.
The fact the sea wall at the Fukushima nuclear power station was only built high enough to protect against the previous worst tsunami is a classic example of planners not really understanding the maths of long tail risks, said Prof Flyvbjerg. By the same token, Covid-19 will not be the worst pandemic we ever face.
As well as fooling themselves they have everything covered in their risk registers, planners also commonly make the mistake of “letting down one’s guard because a risk has not materialised for a while”, said Prof Flyvbjerg.
The disbandment in July 2019, just five months before Covid hit, of the UK National Security Committee’s subcommittee on “threats, hazards, risks and contingencies” is a strong example of this and was noted by the Joint Parliamentary Committee on the National Security Strategy last week.
“We are seriously concerned by the apparent downgrading of risk management in central government. Risk management across government is loose, unstructured, and lacking in central oversight and accountability at both the ministerial and official level,” said the cross party committee in a scathing new report.
Building a new resilience strategy
There are signs ministers realise the UK’s disaster planning is inadequate. Next week, a consultation led by the Cabinet Office to draw up a new “National Resilience Strategy” will close, after gathering evidence from experts across the field.
“I think they recognise things need to improve – the problem is there isn’t a simple cheap answer to this. You have got to recognise that we have to move from a ‘just in time’ economy to a ‘just in case’ economy,” said Lord Harris of Haringey, the Labour peer and resilience specialist.
Lord Harris joked that Black Swans were not the only risk Whitehall planners struggle with. There are Black Jellyfish with multiple tentacles which “go on longer than you expect and have a nasty sting in the tail”. Plus Black Elephants, “the thing nobody wants to talk about”, he says.
Lord Harris added that there is a domino effect with extreme events that is not properly accounted for: “There are 38 risks in the latest National Risk Register, but they are all in siloes. What isn’t recognised is that one will trigger another.
“There’s a cascading effect – no power means petrol pumps don’t work; ATMs don’t work, people run out of money.”
Experts stress that Black Swan events can and must be planned for, despite their apparent randomness. Indeed, their impact is so great, the investment needed to protect against them is proportionally tiny, they say.
“Prudent decision makers will not count on luck... when faced with risks that follow the law of regression to the tail,” Prof Flyvbjerg wrote. “Instead, decision makers will want to do two things: (a) ‘cut the tail’, to reduce risk by mitigation, and (b) practice the precautionary principle.”
A lesson from the Baltic states
No country has escaped the pandemic unscathed, but some have done better than others. Prof Flyvbjerg pointed to places such as Denmark and Norway which locked down early.
Lord Harris agrees and suggests that a country’s position in the world helps shape its preparedness, saying: “Baltic countries take [contingency planning] very seriously because they feel they are subject to an existential threat from Russia.”
Dr Filippa Lentzos, a senior lecturer in science and international security at King’s College London, added that the UK’s National Risk Register needs reform.
“If we look back over how well it’s highlighted risks, it’s very responsive – it’s not in advance of the fact, it’s always behind what’s happened,” she said.
She points to a system known as SciFutures, which has been used by Nato and involves fiction writers trying to better imagine future risks: “I think this sort of exercise is exactly what’s needed, a different perspective, because we’re so quickly locked into thought bubbles.”
The problem with political short-termism
“Political short-termism” is a key problem of government risk scanning, added Sam Hilton, a researcher at the Centre for the Study of Existential Risk at the University of Cambridge.
Policy makers are also better at considering some risks than others. Mr Hilton said:
“Someone working in counterterrorism told me that if a government prepared for a pandemic with the same level of detail that they do in counterterrorism, we would have handled the whole situation a lot better. There’s a bias towards what’s knowable and expected.”
Dr Toby Ord, senior research fellow at the Future of Humanity Institute, University of Oxford, added that government time frames are too short.
“One key way to improve the register would be to extend its time horizons beyond the current two-year outlook, and for it to give greater weight to risks that are less likely than, say, flooding, but much more devastating were they to actually occur.
“As Covid-19 has shown, the unfamiliar is not the same as the improbable, and we need to be prepared.”
By Paul Nuki,GLOBAL HEALTH SECURITY EDITOR, LONDON; Jennifer Rigby; Sarah Newey; Anne Gulland and Dominic Nicholls
Comments