ECONOMICS AND SECURITY 059 ESC 05 E Original: English NAT O   Pa rl i a me n t a ry  As s e mb l y POLICY IMPLICATIONS OF THE RISK SOCIETY DRAFT GENERAL REPORT JOS VAN GENNIP (NETHERLANDS) GENERAL RAPPORTEUR* International Secretariat 22 April 2005 * Until  this  document  has  been  approved  by  the  Economics  and  Security  Committee,  it represents only the views of the Rapporteur. Assembly documents are available on its website, http://www.nato-pa.int
059 ESC 05 E i TABLE OF CONTENTS I. ECONOMIC TRENDS AND THE POLITICS OF RISK ASSESSMENT ................................ 1 II. THE THEORY OF THE RISK SOCIETY-THE WORK OF ULRICH BECK ........................... 3 III. THREATS AND OPPORTUNITIES ASSOCIATED WITH GLOBALIZATION....................... 6 IV. NATURAL RESOURCES ..................................................................................................... 7 V. SCIENCE AND TECHNOLOGY........................................................................................... 8 VI. DEMOGRAPHICS................................................................................................................ 9 VII. ENERGY............................................................................................................................ 10 VIII. DISEASE ........................................................................................................................... 11 IX. TENTATIVE CONCLUSIONS ............................................................................................ 12 X. BIBLIOGRAPHY ................................................................................................................ 15
059 ESC 05 E 1 I. ECONOMIC TRENDS AND THE POLI TICS OF RISK ASSESSMENT 1. This Committee has long argued that the economic dimension of security is too often relegated to the second tier by those engaged in the business of security. This is mistaken for a number of reasons, perhaps most importantly because national wealth is the primary underpinning of national power. But there is a welter of other important links. 2.  Indeed,  economic  trends  can  be  highly  useful  tools  for  those  engaged  in  long-term  strategic planning.    To  take  perhaps  the  most  obvious  contemporary  case,  the  sheer  pace  of  China's current  economic  growth  will  alter  in  fundamental  ways  the  international  system  as  we  know  it.   The implications are broadly based and will affect Western strategic and foreign policy planning, economic strategy and national macro-and micro-economic policies for decades to come. China's competitive challenge will ultimately alter the way Western societies organize their own domestic institutions and even educate their children.  In short, change in Asia could well have an impact on virtually every level of public policy making in the West.   3.  This  is  only  to  illustrate  how  dynamic  economic  phenomena  can  quickly  alter  the  very foundations and assumptions on which foreign policy is predicated. The case is important though because  it  points  to  the  kind  of  dilemma  policy  makers  and  parliamentarians  confront  in  their deliberations.  Those responsible for making policy need not only to consider immediate demands but also whether particular policies are appropriate given longer-term economic trends and risks. 4. In fact, coping with risk represents one of the most complex aspects of national policy-making. Risk itself is an intangible phenomenon. Our understanding of it lies on our capacity to fathom past phenomena and experience and to project lessons learned into a framework for thinking about the future. Doing so is a highly problematic process and is rendered only slightly less so through the use of statistical analysis and probability theory--tools which can help analysts extrapolate relevant data  from  past  experience  in  order  to  provide  a  foundation  for  dealing  with  future  risk  or opportunity.  The  hope  is  that  a  reasonably  clear  picture  of  the  future  emerges  from  past  trends thereby allowing public policy makers to fathom risk and hedge against it, or in strategic terms, to anticipate  potential  challenges  and  begin  to  cope  with  them  before  they  become  explosive.  To continue  with  our  example,  one  might  project  recent  Chinese  economic  growth  rates  into  the future,  and  compare  these  with  projected  Western  economic  growth  rates  to  arrive  at  a  better sense of how global economic power will be distributed in twenty years, and then breakdown the implications,  for  example,  by  looking  at  what  this  means  for  global  energy  markets  and  the  so- called great game of international energy rivalries. 5.  Of  course,  such  straight  line  projections  can  be  highly  misleading,  particularly  if  they  fail  to consider other factors—in our case, China's internal stability, limits to growth imposed by energy supply  constraints,  technological  revolutions  or  unanticipated  natural  disasters.    Still,  simplified models  have  their  use  in  risk  analysis  as  they  can  suggest  how  the  world  might  evolve,  "other things being equal." 6.  Economic  trends,  like  demographic  trends,  are  statistically  relatively  easy  to  capture.    Indeed economic  phenomena  yield  a  wealth  of  computable  data  that  can  be  extraordinarily  useful  in anticipating new challenges.  To take a domestic example, discussions about pension and health care reform in North America and Europe are premised on the confluence of three data sets that in  combination  paint  a  rather  worrisome  portrait  of  what  will  happen  if  reform  is  not  undertaken soon. Those trend lines relate to rates of economic growth, projected government revenues in light of  those  growth  rates,  projected  taxation  rates,  and  the  demographics  of  aging  societies.  The
059 ESC 05 E 2 picture  those  trend  lines  draw  is  so  startling  clear  that  there  can  be  little  debate  about  the shortages that will soon befall national pension and health spending in many Western societies. 7. The future risk to national pension funds is relatively easy to discern because the variables that are  driving  the  looming  crisis  are  already  in  play.  Yet  even  in  this  case,  forging  national  or international  responses  to  the  coming  crisis  is  proving  inordinately  difficult.  In  the  US,  the administration has proposed creating a parallel system of private retirement accounts coupled with massive public borrowing (tax increase have been politically ruled out) to underwrite the transition period  from  a  single  social  security  fund  to  a  mixed  public-private  system.    In  Europe,  the discussions  and  proposals  are  generally  even  more  timid  although  the  demographic  time  bomb there is even more apparent.   8. All this suggests that even with a very clear picture of "risk", democratic societies can be very slow to respond.  Deeply imbedded interests in the status quo invariably resist change. This is less so  for  the  insurance  industry  which  is  far  more  sensitive  to  risk  and  risk  management.    It  is interesting to note how quickly the catastrophic insurance business has broadened its scope from insuring against natural disasters like hurricanes and floods to man-made disasters precipitated by terrorism. At the same time, sophisticated financial innovations like derivative markets are helping further spread risk in order to manage it more efficiently. (Felsted) 9. It is interesting though that one can also cite those paradoxical cases in which potential risk is far  more  amorphous,  and  yet  societies  mobilize  very  quickly  and  efficiently to ward off that risk. Europe's response to genetically modified food might be an example here. The scientific data of health  and  environmental  risk  of Genetically Modified Organisms (GMOs) in some cases seems far   less   compelling   than   does   the   evidence   that   current   national   pension   systems   are unsustainable. Yet the capacity of the GMO risk to mobilize society and its political representatives in Europe represents a startling contrast with the failure to mobilize political action to deal with the pension crisis. 10. On the face of it, this might seem like a totally irrational phenomenon. A near certainty fails to trigger a compelling response while an uncertain one somehow moves to the centre of the political and international trade agenda. There are several possible explanations for this. It is certainly the case that a society's capacity to respond to risks partly corresponds to the correlation of interests engaged in the issue.  Yet other more amorphous factors like culture, tradition and the perceptions these nurture also play a part. Why do Europeans perceive GMOs as so risky while Americans do not? Certainly the fact that American business is playing a leading role in the development of the technology  provides  one  element  of  the  explanation.    The  risk  of  GMO  is  not  only  a  risk  to European  consumers  and  the  environment  but  also  a  risk  to  vested  European  commercial  and agricultural  interests.    In  this  sense,  trumpeting  the  risk  of  GMO's  might  also  be  a  means  of protecting  certain  powerful  interests  in  the  society.  Yet,  it  is  also  the  case  that  Europe  has  a centuries  old  culture  around  food,  one  that  is  not  very  amenable  to  rapid  change.  Anything purporting to offer a revolution in the way food is cultivated or eaten in many European societies will be greeted with a high degree of scepticism if not outright hostility. In the case of the recent GMO debate, consumers rather than governments mobilized most quickly to resist rapid adoption of GMO food. 11. It is also worth noting that some developing countries approach the GMO issue with another set  of  interests  and  needs.  At  least  for  some  developing  countries,  the  prospect  of  a  high  yield vitamin  crop  might  outweigh  potential  risks.  Others,  however,  might  take  their  cue  from  the Europeans,   largely   because   they   sell   in   that   particular   market   and   do   not   want   to   adopt technologies that might jeopardize those markets.   12. The notion of societal risk is thus inherently political. Governments and parliamentarians are constantly  asked  to  engage  in  risk  assessment  and  to  hammer  out  legislation,  regulation  and
059 ESC 05 E 3 policies designed to hedge risk or even eliminate it. On the face of it, this could be understood as an inherently rational process in which all available statistical analysis is used to forge appropriate strategies  to  minimize  or  eliminate  risk.  But  if  things  were  this  simple,  one  might  see  the elimination  of  motorcycles  in  Europe  or  the  eradication  of  gun  permits  in  the  United  States.  As neither  seems  very  likely,  one  has  to  admit  that  an  array  of  other  factors  condition  society's capacity to accept or not to accept risk. 13. Another important factor, of course, is cost. We accept some degree of risk because the cost of eliminating a particular hazard might simply be too high.  It might be possible to manufacture a perfectly  safe  car,  to  take  one  example,  but  the  costs  of  doing  are  commercially  prohibitive. Societies establish car safety regulations with implicit risk/costs trade offs.  We accept some risk both because risk and tragedy for that matter are inevitable in a fallen world, and because the cost of eliminating even preventable risk can be prohibitive. Given those constraints, societies seek to minimize risk as best they can. 14.  Therefore,  risk  is  not  some  objective  or  scientific  concept  that  can  be  routinely  quantified, socially agreed upon and then eliminated or minimized. Coping with risk is culturally conditioned; it is a process shaped both by prevailing interests in a given society and the potential costs of the options.    One  also  often  speaks  of  "risk  perception"  --an  important  concept  in  strategic  military affairs  and  certainly  in  Alliance  politics.  States  respond  to  risk  only  insofar  as  there  is  a  certain correlation of interests and culture dispositions within a given society that helps it to acknowledge the risk and agree upon a course of action to cope with it. Finally, different societies will set the bar at   different   heights—something   t  hat   is   evident   in   the   GMO   controversy   where   European consumers perceive great risk and want to eliminate it, while American consumers see little risk and    if    anything    perceives    commercial    opportunity.    This    paradox    inherently    complicates multilateralizing risk management. II. THE THEORY OF THE RISK SOCIETY-THE WORK OF ULRICH BECK 15.  Globalisation,  mass  production  and  technological  advance  are  fundamentally  changing  the way Western societies fathom and cope with risk. They are, according to some academics, also changing  the  very  nature  of  risk.  Risk  is  increasingly  understood  by  some  sociologists  as  an almost  automatic  result  of  goods  production  and  technological  advance.  Incalculable  risks  are emerging from nuclear, chemical, defence, and genetic sectors and from the generalized use of carbon  based  fuels.  Indeed  industrialization  as  a  whole  is  putting  the  world's  climate  at  risk  of catastrophic change of incalculable cost to human society.  As these risks mount, the institutions designed  to  manage  risk  and  protect  citizens  seem  increasingly  unable  to  do  so.  Threats  have begun to outweigh socially agreed upon safety norms, and there seem to be no rational means to achieve a rebalancing. (Harries-Jones) This phenomenon has been the subject of a new academic line of inquiry in economics, sociology and political science. Ulrich Beck, a German sociologist has played a leading role in developing this new approach. 16. Beck argues that a fundamental change is underway that will dramatically alter the way risk is identified and managed or rather, not managed. In the age of industrialization, nation states had been the primary players in coping with risk.  Progress, certainty and security were understood as mutually reinforcing, and the nation state along with the market played a central role in ensuring all three.  Managing  risk  generated  public  trust  in  the  state,  as  well  as  within  markets,  which  were structured  not  only  to  generate  prosperity  but  also  to  cope  with  risk--an  obligation  perfectly embodied by the insurance industry.
059 ESC 05 E 4 17.  According  to  Beck  and  his  colleagues,  a  new  form  of  modernity  is  now  emerging.  It  is characterized  by  increasing  speed,  ever  more  intense  transnational  interdependence,  and  the emergence  of  economic,  cultural,  political  and  societal  “globalisation”  in  which  the  dividing  lines between  Western  and  non-Western  societies  are  ever  less  valid.    As  the  old  bipolar  order  has retreated,   new   challenges   arising   out   of   technological   change   and   global   integration   are compelling governments and societies to deal not so much with enemies as with risks.  The rapid pace of technological advance coupled with an ever more dense web of global linkages are driving risk in new and largely unforeseen directions. Many of these risks elude national control because they are truly global in character and because they can be the totally unforeseen consequence of rapid innovation and technological change. 18. Indeed, Beck characterizes today's global market as a form of “organized irresponsibility”.  For all  intents  and  purposes  global  governance  does  not  exist,  and  risk  in  this  global  setting  has become  terribly  difficult  to  manage.  This  deficiency,  however,  will  recast  politics,  as  we  know  it. Transborder  politics  rooted  in  local  concerns  but  quickly  moving  to  international  contexts  are increasingly  understood  as  perhaps  the  only  way  to  manage  trans-border  risk,  particularly  as globalisation and technological advance are weakening the autonomy and power of the state. This raises new challenges to global governance, or, as Beck calls it,  “cosmopolitan democracy”. 19. Beck discerns a shifting balance between what were once considered global issues and those typically understood as local challenges.  Increasingly, the latter need to be posed, discussed and resolved  through  transnational  frameworks.  Politics  and  states  have  not  caught  up  with  this imperative,  although  many  non-governmental  actors  have  begun  to  think  and  operate  on  these terms.    Beck  suggests  that  over  time,  we  could  see  a  reinvention  of  politics.  The  creation  of cosmopolitan  parties,  for  example,  might  be  more  adept  at  representing  transnational  interests trans-nationally  as  well  as  nationally  and  locally.    To  some  extent,  this  is  already  beginning  to happen in Europe, but Europe of course, is bound by common institutions and a shared sense of mission. 20.  Beck  suggests  that  risk management will be the central catalyst of transnational politics. He speaks of the emergence of "risk communities"--groups of people united by a shared risk even if divided by borders. In a highly integrated and technologically advanced international order, these risk  communities  are  already  appearing and are increasingly active. These groups are linked by the fact that they are compelled to accept the risks generated through the actions of others. Beck clearly  discerns  a  new  fault  line  in  modern  political  life.  In  the  emerging  global  order,  there  are small groups that produce and profit from risk while many are effectively exposed to risk without gaining   any   discernable   benefit.   The   consequences   and   dangers   of   developed   industrial production are now global, and from this perspective, the "world risk society" reflects forced global socialization arising out of the very dangers that civilization produces. 21. Beck believes that transnational institutions capable of responding to the global scope of these challenges  will  ultimately  be  needed  to cope with global risks. In dealing with new uncertainties, however,  it  is  also  important  to  distinguish  between  risks  that  in  principle  can  be  brought  under control, and those that are beyond the capacity of human institutions to manage. But even drawing this line is not easy. Ecological crisis can be the results of shortcomings in norms and institutions of industrial society, or, it could be intrinsic to the very nature of that society.  The former suggests that  solutions  can  be  found  by  tinkering  with  the  rules  of  the  game,  while  the  latter raises more systemic questions.   22. Beck distinguishes among several types of global environmental threats: 1.   Wealth-driven ecological destruction undertaken to advance the consumer- society (hole in the ozone layer, greenhouse effect etc.);
059 ESC 05 E 5 2.   Poverty  -driven  environmental  destruction  (felling  of  tropical  rainforests,  toxic  waste,  the use of environmentally destructive obsolete technologies); 3.   The potential use of weapons of mass destruction - nuclear, biological and chemical.     23. He argues that it is uniquely difficult to fathom, quantify and manage the interaction between ecological  destruction,  war,  and  the  consequences  of  incomplete modernization.  Tried and true safety calculations now seem inadequate to the catastrophic forms of risk global society presently confronts. Containing damage in the event of dramatic global warming, for example, may well be beyond the capacity of humankind and its institutions.   24. Beck suggests that there are powerful interests arrayed against the construction of new trans- border coalitions to deal with these challenges. Great industrial concerns generate environmental risk,  although  the  costs  are  not  reflected  in  prices  nor  in  contemporary  legal  systems,  while  the public debate often minimizes the extent of real risk, particularly since the interrelationships among various environmental phenomena are not well understood. When these matters are neglected in formal  politics,  extra-parliamentary  forces  and  citizens  groups  are  left  to  take  up  the  challenge. Such groups may have greater flexibility to operate across borders.   25.  Beck  also  concerns  himself  with  how  society  calculates  the  trade-offs  between  industrial production  or  military  activity  and the risk of setting off catastrophic chains of events that evade human control. Mad cow disease might be understood as a representative case where industrial agricultural  processes  helped  trigger  a  disease  that  proved  very  difficult  to  control  once  it  was unleashed.  Control has been made all the more difficult because of international trade. 26.  This  raises  another  question  regarding  the  kinds  of  instruments  that  society  might  use  to manage  risk.  Can  society  devise  the  financial  means  to  hedge  against  mega-risk  or  to  develop policies to mitigate the risk? Or are certain risks simply too great to insure against?  Alternatively, should  one  conceive  of  social  compacts  designed  to  discourage  the  development  of  industrially produced hazards before they can even pose catastrophic risk? 27.  Beck  argues  that  two  contrary  lines  of  historical  development  began  to  converge  in  the  late 20th  century;  a  level  of  security  founded  on  the  perfection  of  techno-bureaucratic  norms  and controls,  and  the  rise  of  historically  new  "mega  hazards",  which  slipped  through  existing  legal, technological,  intellectual  and  political  filters.    Since  the  beginning  of  the  20th century, the social institutions of industrial society have had to account for the historically unprecedented possibility that human kind could engineer the destruction of all life on this planet.  We now live in an age of nuclear,  chemical  and  genetic  technology,  and  this  poses  more  complex  barriers  to  insuring against the worst imaginable cases.  Ultimately there is no institution that would be prepared for the worst imaginable accident. The risk society, he writes, has become the uninsured society. 28.  Rising  hazard  technocracy,  Beck  writes,  undermines  risk  calculation.  Risk  definitions  are inadequate,  and  there  are  no  standard  rules  attributing  causes  and  effects  in  conditions  of  high complexity, integration and contingency.  Modern societies have found it easier to ignore risks they cannot  fathom  than  seek  to  understand  them,  particularly  when  these  are  consequences  of industrial action and production.   29. According to Beck, there are also important time lags in understanding the nature of risk. The hazards to which society is currently exposed may have been produced in another era.  Equally, the risks generated by atomic, genetic and chemical technologies are being handled with concepts derived from early industrial society of the 19th and early 20th centuries. 30.  Another  interesting  dimension  of  mega  risk  is  that  it  does  have  a  "democratic"  character insofar as all are ultimately rendered vulnerable. That said, the poorest in the world are still more vulnerable  and  would  be  the  least  able  to  adapt,  for  example,  to  sudden  changes  in  the
059 ESC 05 E 6 environment.  This  could  lead  to  new  global  divisions  between  risk  winners  and  risk  losers.  Risk conflict or resource war stemming from catastrophic events might emerge as the ultimate form of political conflict. 31. Beck is interested in how these mega risks are altering politics. He foresees the rise of a new kind  of  "life" politics, in which civil society seeks to reassert itself over the risks the global order has generated.  In the words of Beck, the emergence of large scale hazards and "manufactured uncertainties   set   off   a   dynamic   of   cultural   and   political   change   that   undermines   state bureaucracies, challenges the dominance of science and redraws the boundaries and battle lines of  contemporary  politics."    Beck  and  other  risk  theorists  have  suggested  that  global  risks exacerbated by a liberal order cannot be harnessed by the regulatory state. He appeals for a new kind  of  "bottom  up"  politics  capable  of  participating  in  decisions  once  left  to  the  “Western technocracy”. He concludes that civil society driven localism and multilateralism may offer the only means  for  individuals  to  reassert  some  control  over  the  risks  they  are  increasingly  forced  to accept. (Harries-Jones) III. THREATS AND OPPORTUNITIES ASSOCIATED WITH GLOBALIZATION 32. Beck is interested in developing new fields of social and political inquiry as well as offering a strong critique of the liberal global order. He has developed a useful theoretical foundation to study how   risk   is   altering   political   dynamics   in   the   West   and   particularly   in   Europe.      National governments, however, will likely continue to be the primary protagonists for coping with risk; the nation state will accordingly remain a primary means of ordering society even though NGOs and transnational organisations have influence and will continue to change the context in which states operate.  Moreover,  science  should  be  understood  as  offering  a  potential  way  out  of  rather  than simply as a creator of risk. Science itself is a neutral phenomena; humanity provides the context in which it is used. Governance, however, is likely to emerge as a key problem simply because many of  these  risks  cannot  be  adequately  met  given  current  national  frameworks  for  assessing  and coping with them. At the very least, this will alter the way states interact with each other and could indeed  provide  the  foundation  for  renewed  multilateralism.  States  will  also  need  to  forge  new partnerships with the private sector, non-governmental organizations and citizens. 33.  In  any  case,  globalisation  and  technological  revolution  pose  some  of  the  most  compelling challenges  to  the  way  societies  anticipate  and  manage  risk.  The  problem  is  that  as  the  world grows more economically integrated and as technology becomes the very fabric that binds distant countries and cultures together, the points of vulnerability multiply. A number of governments as well  as  independent  commissions  and  academics  are  now  trying  to  anticipate  some  of  these challenges. The remainder of this report will briefly review some of the analysis that shaping long- range government planning. 34. Strategic forecasters increasingly speak of “drivers” —that is those areas of risk that will most likely emerge as important catalysts for long-term strategic change. These include: demographics, natural   resources   and   the   environment,   food   and   agriculture,   science   and   technology,   the evolution of the global economy and globalisation, disease and health, and the way national and international governance copes with these and other risk areas. It is interesting to note that many of these areas have implications for the way we understand and cope with terrorism--one of the primary strategic threats the West currently faces.  
059 ESC 05 E 7 IV. NATURAL RESOURCES 35. This April, the first ever-global inventory of natural resources was published. The Millennium Ecosystem Assessment (MA), underwritten by the UN, the World Bank and the World Resources Institute,  cost  $24  million  to  complete  and  engaged  1300  scientist  working  in  95  countries. According to the assessment, human activity has changed global eco systems more rapidly and profoundly  over  the  past  50  years  than  at  any  other  time  in  human  history.  60%  of  the  planet’s resources  that  support  human  life  such  as  water  are  being  degraded  or  used  in  a  fashion  that cannot  be  sustained  and  by  2032,  more  than  half  of  the  world  could  be  afflicted  by  water shortages.  (OSCE  28  May  2002)This  degradation  is  increasing  the  possibility  of  dramatic  and sudden  environment  change  or  the  disappearance  of  the  world’s  fisheries—something  perhaps foreshadowed by the collapse of Atlantic cod stocks in the early 1990s. 36.  The  most  apparent  changes  to  natural  eco  systems  stem  from  the  conversion  of  natural habitat  to  farmland  and  the  destruction  of  forest.    In  25  countries  most  forests  have  been completely eradicated, and in 29 other countries the area of forested land has fallen by 90%.  The report  also  suggests  that  water  and  fisheries  are  currently  so  degraded  that  they  cannot  even adequately  meet  current  demands-  a  situation  that  will  worsen  without  profound  policy  change. Irrigation has doubled since in 1960 and ground water resources are also seriously strained as a result.  Fertilizer use has exploded and is leading to oxygen depletion in lakes and portions of the ocean  floor.  More  worrisome  still,  is  the  fact  that  these  processes  are  interrelated  sometimes  in ways, which are not fully understood. 37. According to the CIA, by 2015 nearly half of the world's population of 3 billion will live in water stressed countries--most of which are in Africa, the Middle East, South Asia and northern China.   In  developing  countries,  80%  of  water  is  used  in agricultural production. This is not sustainable.   1000  tons  of  water  are  needed  to  produce  a  ton  of  grain.    Water  tables  are  falling  some  times precipitously, in northern China, to take one example, water tables have been falling at a rate of five feet per year.  Indian water tables are falling between 3-10 feet per year.  Such depletion rates cannot be sustained, and water will have to be used more efficiently in many areas of the world. Technological  fixes  may  be  part  of  the  solution.  Some  genetically  modified  plants,  for  example, require less water than normal varieties to bring to harvest. 38. Water shortages also pose potential challenges to security. Nearly one half of the world's land surface  consists  of  river  basins  shared  by  more  than  one  country,  and  more  than  30  nations receive more than one third of their water from outside their own border. Water rights issues have become  an  important  source  of  tensions  in  the  Middle  East,  Central  Asia,  North  America  and elsewhere, and one cannot rule out the possibility that in future, tensions over water rights could escalate in certain regions to military conflict. So far, however, this has not transpired, and so such resource wars are more a potentiality than a reality. (Gleditsch and Urdal) 39. Meanwhile biodiversity poses another serious long-term challenge.  Extinction rates are now a thousand times higher than the norm for evolutionary history, and between 10-30% of the world’s land vertebrates are now under threat.  According to recent models, extinction rates are slated to accelerate in part because of habitat destruction. Again, man-made alterations in one eco-system spill over to other systems. 40.  The  MA  could  do  for  the  crisis  of  global  resources  what  the  Inter  governmental  Panel  on Climate  Change  did  for  global  warming—place  the  risks  with  which  it  deals  at  the  centre  of  the international agenda.  The difference though is that the MA was not ordered by governments, as was  the  study  on  global  warming;  rather  it  is  an  initiative  of  the  scientific  community  itself.  The study  however  provides  important  background  information  for  four  international  environmental
059 ESC 05 E 8 treaties  including  the  UN  Convention  on  Biological  Diversity  and  the  Ramsar  Convention  on Wetlands, (Graham-Rowe and Homes) 41. Rapid industrialization in developing countries, the proliferation of automobiles, rising weather related  insurance  settlements,  and  ever  more  compelling  scientific  evidence  suggest  that  global warming is not only a reality but one that will exact a terrible toll on human habitats.  Before the industrial revolution, carbon concentrations in the atmosphere stood at 275 parts per million. The current  ratio  is  380.  Scientific  models  suggest  that  environmental  catastrophe  will  likely  be triggered  when  the  figure  rises  above  550.    This  is  the  red  line  that  should  not  be  crossed according to many experts. (McKibben) One Pentagon paper on its security implications recently suggested,  "There  is  substantial  evidence  to  indicate  that  significant  global  warming  will  occur during the twenty first century." The paper painted a worse case scenario of resource wars arising out of global warming/cooling catastrophe in key food producing regions. Some defence planners are apparently taking the risk of global warming very seriously, although others do not. (Schwartz and  Randall).  This  particular  paper  concluded  that  alternative  fuels,  greenhouse  gas  emission controls, and conservation efforts might help ameliorate the situation although any solution poses its own set of challenges. 42.  According  to  many  scientists,  the  ratification  of  the Kyoto Protocol in itself will not be nearly sufficient to reverse the trend described above.  The international community will be increasingly pressed  to  take  more  dramatic  measures  as  conditions  worsen,  and  this  will  mean  weaning economies  from  their  utter  dependence  on  carbon-based  fuels,  or  at  least  lowering  their  use through  conservation  and  new  technologies.  Many  scientists  assert  that  global  warming  has already  begun  to  burden  the  global  economy  and  is  intensifying  other  environmental  challenges like water shortages and weather related problems. (McKibben) 43. These problems are already serving as a catalyst to research on non-carbon energy sources including solar, wind, and nuclear energies.  Investment in these technologies is likely to increase as  petroleum  prices  rise  and  both  improved  technology  coupled  with  the  higher  energy  prices could facilitate their mass introduction.  Technology advance in these fields should be one of the pillars of any long-term strategy for coping with environmental risks and balancing these with rising energy  requirements.  But  all  these  technologies  have  their  limitations,  and  none  are  poised  to substitute fully for carbon fuels. V. SCIENCE AND TECHNOLOGY 44. The world is still in the midst of a technological revolution, which is introducing rapid change in computer   and   telecommunications,   material   sciences   as   well   as,   genetic   and   biological engineering. The implications of these scientific revolutions cut across numerous sectors of human activity including military affairs. The effects of these advances are difficult to foresee. Technology can   both   help   resolve   old   problems   while   creating   new   ones.   Global   integration   and   the proliferation  of  information  technology  are  ensuring  that  technology  is  spread  more  widely  and more  quickly.  The  time  lag  between  technological  innovation  and  commercial  adaptation  also appears to be narrowing. Meanwhile these advances are helping forge new links across national borders and between rural and urban centres. These changes, in turn, are eroding the capacity of governments to control information and could well bolster democracy movements in authoritarian countries--a pattern that was evident in Eastern Europe at the end of the Cold War. On the other hand, terrorist groups will also be positioned to avail themselves of these technologies. The risk of cyber crime and terrorism are already understood, but they too point to the risks associated with an  ever  more  integrated  or  networked  global  economy.  (Rees.)  Given  the  mounting  level  of networked  communication  and  information  systems,  the  capacity  of  a  relatively  small  number  of
059 ESC 05 E 9 determined terrorists to inflict catastrophic damage with global implications has increased almost incalculably. This calls for constant vigilance as well as efforts to build in back up redundancies to vulnerable   networks.   Finally   privacy   issues   could  also  become  a  larger  concern  given  the centralization of information and the temptation of governments, businesses and others to use that information in ways that might be antithetical to citizen’s rights to privacy. 45. Genetic sciences will also continue to progress, and startling advances are likely in medicines and  also  in  agriculture.  But  risks  abound  in  these  areas.  Recent  tests  on  herbicide-tolerant  GM rapeseed  and  sugar  beet,  for  example,  found  that  these  new  hybrids  posed  a  greater  threat  to biodiversity than conventional crops, while GM maize actually encourages biodiversity--results that were only known after very extensive testing. (Financial Times, October 17, 2003.) More malicious forms  of  genetic  engineering  are  also  within  the  realm  of  possibility.  In  the  hands  of  millenarian terrorist  movements  or  even  individual  fanatics  these  technologies  could  threaten  vital  eco systems   and   public   health.   There   are   serious   strategic   concerns   about   human   designed pathogens.  Finally,  technological  advance  will  continue  to  pose  moral  and  ethical  dilemmas  as seen in the recent stem cell debate in the United States VI. DEMOGRAPHICS 46.  Since  1961  the  world’s  population  has  doubled.  Although,  food  production  has  more  than doubled  in  that  same  period,  environmental  stress  has  increased  dramatically  as  a  result.   Demographic explosion points to real problems of environmental sustainability and the capacity to produce sufficient wealth to lift an increasing share of the world’s population out of poverty—one of the  fundamental  objectives  of  the  Millennium  Development  Goals.  Indeed,  one  ecologist  who participated in the MA suggested that reducing poverty with such a large population will inevitably place further stress on the environment and thus compromise the capacity for long-term poverty reduction.    This  is  particularly  the  case  in  dry  regions  where  water  shortages  will  likely  impose limits on poverty eradicating economic growth. But even in general terms, generating wealth will almost invariably drive new demands on eco-systems. This could lead to environmental calamities if not properly managed.   47.  The  World's  population  in  2015  will  be  7.2  billion,  up  from  6.1  billion  in  2000.  Ongoing advances  in  health  care  mean  that  people  will  live  longer.    Developing  countries  will  see  the largest increase in population, although some countries may see declines due to pandemics like Aids  and  Malaria  as  well  as  war.    These  broad  population  trends  will  generate  serious  stress in countries  where  political  systems  are  less  robust.  The  developing  world  is  also  undergoing  a massive  migration  from  the  countryside  to  urban  settings.  Urbanization,  in  turn,  is  generating unprecedented pressures on infrastructure and environmental resources that could well generate political and social instability. China, for example has recently experienced a set of environmental protest riots. Large-scale infrastructure investments will be needed to minimize urban chaos and insure reasonable urban standards that protect public health. Finding jobs for young people is also vital  to  achieving  security;  high  unemployment  is  highly  destabilizing  and  can  have  a  range  of knock on effects with international repercussions. 48. Most developing countries will also undergo a significant increase in their working population. This  theoretically  increases  the  potential  for  economic  growth  but  it  can  be  harnessed  only  if  a context for growth and opportunity is created both nationally and internationally. 49. As suggested in the introduction, demographic trends in developed countries are moving in the opposite  direction,  and  this  is  generating  serious  strains  on  pension  and  health  care  systems.   New  social  tensions  and  the  rise  of  more  stark  generational  politics  might  undermine  existing
059 ESC 05 E 10 social contracts that have been so critical to internal stability in Western countries. The pressures on  defence  and  aid  budgets  will  clearly  mount  in  Europe  as  the  budgetary  effects  of  an  aging society  begin  to  become  evident.  New  deals  will  clearly  have  to  be struck, but the transition will likely be politically very difficult. (CIA Report) 50. Divergent demographic trends in the North and the South finally suggest that migration from developing countries to developed countries is likely to continue given wealth disparities and the inevitable need for new workers in aging developed countries. Although the economics here might make sense, the politics of integration are more daunting, and here again, new political and social compacts  will  be  needed  to  mediate  the  social,  political  and  military  tensions  that  will  inevitably arise. VII.    ENERGY 51. Anticipating trends in energy markets is a highly contingent process; critical factors like future demand conditions, new discoveries, energy policy changes, political stability in supply countries, refining  capacity,  weather  patterns,  the  evolution  of  technology  and  energy  efficiency  are  all difficult to anticipate. That said, it is becoming increasingly clear that demand for oil and gas over the next twenty years will be far greater than estimates made several years ago.  The explosive growth  of  China,  India  and  other  Asian  countries  and  their  energy  intensive  development  is effectively   revolutionizing   global   energy   markets.   Forecasters   in   recent   years   have   had   to significantly  adjust  their  assumptions  to  accommodate  shifting  long-term  market  conditions.  The US Department of Energy's (DOE) most recent forecasts suggest that global oil demand will rise from 80 million barrels per day in 2003 to 120 million barrels per day in 2025. OPEC production will rise by 80% in that period while non-OPEC production will increase from 49 to 65 million barrels a day in that same period.  The DOE anticipates in its reference model that oil prices in 2025 will approach  $30  a  barrel  in  2003  prices  or  $52/barrel  in  nominal  prices.  Their  high  price  scenario puts  the  price  at  $48/barrel--a  price  that  could  trigger  significant  activity  in  alternative  energy production. (DOE). Other analysts are forecasting far higher price rises both because of dynamic demand and emerging concerns about supply. 52. Indeed, recent price increases point to highly dynamic demand conditions in parts of the world, which   international   watchdogs   may   have   been   underestimating   (Binks).   Refining   capacity limitations  as  well  as  political  uncertainties  have  also  contributed  to  recent  supply  problems. Chinese  oil  demand  increased  by  11%  in  2003  and  15.6%  in  2004--increases  that  are  certainly helping to tighten the market. (Oil Market Report,  International Energy Agency).  Last  year  alone car demand there rose by 50%. Exploding Chinese demand coincides with still rising demand in the US, the world’s largest oil consumer, and mounting demand in other Asian countries including India. Capacity has simply not kept pace (Binks). The International Energy Agency has indicated that short-term risks to energy security will increase over the coming decade as ever-larger shares of oil and gas comes from political unstable regions. OPEC will likely see a return to its oligopoly powers.  (Keven  Morrison)  Developing  countries  will  account  for  most  of  the  increase  in  future demand,  and  these  countries  will  account  for  nearly  half  of  total  demand  by  2030.  Carbon emissions  will  likely be 60% higher in 2030 than they are today with 2/3 of the increase coming from the developing world.  Western economic trends point to a diminishing ratio of energy use to GDP,  in  part,  because  services  rather  than  energy  intensive  manufacturing  have  become  the engines of growth and because technological innovation has bolstered energy efficiency. Still, the United  has  seen  its  domestic  oil  output  fall  by  40%  in  the  past  30  years,  while  domestic  oil consumption increased by 40%.  Accordingly the share of imports in US consumption rose from 35% to 56% in that same period. Moreover, within the next twenty years, the US will be importing more than a quarter of its natural gas compared with 2% today. All of this suggests that even the
059 ESC 05 E 11 world's most powerful country is burdened with a grave energy vulnerability, and currently lacks a demand side strategy to cope with it – this at a time when the supply side is increasingly out of its control. (Buchan and Hoyos) 53.  There  is  thus  a  range  of  long-term  energy  supply  risks  that  governments  today  need  to consider. Perhaps the most important of these is instability in the Middle East, where authoritarian governments  are  consistently  failing  to  meet  the  expectations  of  restive  and  disenfranchised publics. Mounting demand from developing countries like China also points to the potential for new strategic rivalries over access to energy.  A recent CIA report suggests that that energy suppliers and  demanders  will  link  up  in  new  ways;  eventually,  the  Gulf,  Russia,  and  Central  Asia  will primarily  supply  Asia  consumers  while  Atlantic  producers  will  be  serve  the  European  and  North American markets. (CIA) But how this division of labour might be achieved is not at all clear, and one  can  easily  imagine  an  ever  more  fierce  competition  for  resources  particularly  if  demand growth  begins  to  outstrip  supply  increases.    Finally,  mounting  dependence  on  carbon  energy clearly conditions Western approaches to highly authoritarian regimes that happen to sit on large petroleum or gas reserves. Western countries are perhaps less likely to push for positive political change when they are dependent on these regimes and their elites for energy. But failure to deal with  highly  repressive  regimes  leads  to  a  broad  range  of  other  threats  including  long-term instability. VIII.   DISEASE 54. Population growth and environmental stress are also affecting the speed at which pathogens develop  and  spread.    Today,  half  the  urban  population  of  Africa,  Asia,  Latin  America  and  the Caribbean suffer from diseases associated with inadequate water and sanitation. Deforestation is leading  to  increases  in  malaria  because  water  run-off  is  increasing  swampland  areas  where mosquitoes flourish. Almost 5 million people were infected with HIV in 2004 alone while 3.1 million died  of  AIDS  that  year.  Between  39  and  44  million  people  are  now  infected.  The  pandemic  is spreading in different ways around the world, thus making prevention all the more difficult. Africa today has more than 60% of the world’s HIV infected people while India and China now appear to be on the edge of an explosive expansion in the number of cases. (Fek et. Al) Globalisation and particularly  ever  more  efficient  and  rapid  transportation  links  have  complicated  the  task  of containing epidemics. SARs became a global problem when international travellers helped rapidly spread the disease, gravely complicating efforts to contain it. Health policy makers are now closely monitoring the outbreak of avian flu with this in mind. 55. Go here as well, technology represents something of a two edged sword. On the one hand, breakthroughs  in  medical  research  are  generating  new  treatments  for  serious  diseases.  On  the other  hand,  viral  resistance  to  some  of  these  treatments  suggests  that  nature  has  ways  to circumnavigate human innovation. But science also potentially puts the power of circumnavigation in  hands  of  terrorists  groups  as  well.    The  North-South  divide  in  health  care  will  also  likely  be exacerbated  over  time.    Infectious  disease  will  ultimately  pose  a  greater  problem  for  developing than  developed  countries,  although,  again,  containing  the  spread  of  disease  will  be  difficult.   Expensive treatments will remain a luxury of the richer countries. Tuberculosis, malaria, hepatitis, and  AIDS  will  continue  to  ravage  parts  of  the  developing  world  and  the  fight  against  these diseases  will  consume  important  shares  of  GDP  in  the  worst  of  regions.  Some  countries  will undergo important reduction in life spans as a result.
059 ESC 05 E 12 IX. TENTATIVE CONCLUSIONS 56. States will remain the single most important organizing unit of political economic and security affairs over the coming decade.  But governance will emerge as a major challenge in an ever more global  environment  in  which  decisions  made  beyond  one's  borders  will  have  powerful  local implications.  The ever-freer flow of information, capital, goods, services, and people as well as the rise of global risks will erode the capacity of governments, corporations and individuals to manage risk.  Increased  international  cooperation  on  an  ever-lengthening  list  of  transnational  issues  may prove  to  be  the  only  way  to  reassert  control  over  phenomena  that  might  otherwise  evade  all control. 57. One of the great problems in managing risk is forging broad social agreement about the nature of risk in time to actually manage problems before they become catastrophic. This is particularly difficult  when  one  is  talking  about  enormously  complex  phenomena  involving  many  variables, some of which pertain to core habits of civilization. To take one example, a political consensus on global warming is still not fully achieved even though the scientific community has been united on the nature of this threat for some time. Even when risk is generally understood, however, taking measures to cope with them can be highly contentious, particularly when costs are involved, and invariably,  they  are.  Yet,  a  lack  of  agreement  and delays in  implementation can make risk even more compelling. Proactive rather than reactive policies are clearly needed in order to contain the risk of catastrophe and to lower the long run costs of prevention. It is estimated, for example, that it  will  cost  $32  billion  to  protect  European  coastlines  from  the  effects  of  global  warming  while Tanzania would need $14.6 billion to fend off the effects of a 1 meter rise in the sea level. (Harvey) With numbers like these in mind, politicians need to take environmental science more seriously if they  are  to  exercise  genuine  stewardship  over  a  fragile  planet  and  manage  humanity's  ever mounting  capacity  to  upset  nature's  balance  in  catastrophic  ways.  It  is  no  coincidence  that religious movements in the West are increasingly concerned with the important moral question of global  environmental  stewardship.  Laissez-faire  approaches  to  energy  use  are  failing  because markets have not been structured to account for the real costs of environmental degradation. 58. More comprehensive externality costing, therefore, must become a priority. In other words, the environmental and security costs of consumption need to be better incorporated into pricing.  One recent  estimate  suggested  that  Western  countries  subsidize  fossil  fuel  use  to  the  tune  of  $73 billion.   (Harvey)   At   the   same   time,   new   partnerships   among   governments,   scientists   and economists  must  be  forged  in  order  to  come  to  a  better  understanding  of  the  real  costs  of ecosystem  degradation  and  biodiversity  loss.  Gas  and  oil  prices  should  better  reflect  their environmental  opportunity  costs  as  well  as  the  huge  national  security  costs involved in ensuring the  uninterrupted  flow  of  oil  to  market.  In  many  countries,  gasoline  prices  fail  to  capture  these costs,  and  consumption  patterns  are  consequently  environmentally  hazardous  and,  in  indirect ways,  exacerbate  military  vulnerabilities.  Energy  pricing  should  reflect  these  costs  even  if  they have to be introduced through taxation. Governments should also demand higher fuel efficiency in consumer  vehicles  and  adopt  policies  to  encourage  energy  saving  transport  alternatives.  Such measures can have both enormously beneficial environmental and security effects and can spawn new environmentally friendly industries. (Samulson) 59.  If  countries  can  justify  military  spending  as  a  means  to  achieve  security,  they  should  also consider public support for the development of renewable low polluting energy sources including wind and solar power. Already the wind energy market is doubling every two and a half years and could  be  supplying  as  much  as  12%  of  the  world's  energy  by  2020.  Solar  panels  are  becoming more  efficient  and  less  costly  by  the  year,  and  rising  oil  prices  will  make  them  increasingly competitive. The problem is that their inherent intermittency results in power interruptions, which means that they cannot become anything like the sole source of power for the world. Only critical and indeed unanticipated technological breakthroughs will help the world move away from carbon
059 ESC 05 E 13 based energy.  In the meantime, governments need to support that research while doing all in their power  to  foster energy conservation. (McKibben).  Nuclear power, of course, has some benefits but  it  also  introduces  very  fundamental  risks  as  was  made  clear  in  the  Chernobyl  catastrophe.    They are vulnerable to human error and inviting targets for terrorists. 60. By extension, we need to better understand the benefits that natural habitat accord humanity in order to begin to assign values to these as well. Most economies fail to incorporate into their broad view of the economy the benefits that stewardship of the environment accords. This is why rapid economic change and globalisation seems so at odds with the environmental health of the planet and the real risks that our human economic activity poses to it. It might even be helpful to include such  factors  in  GDP  calculations.  China  may  be  growing  at  9%  a  year  but  its  growth  is  also exacting a huge toll on it environment and generating daunting costs that future generations will have to pay. Shouldn't such enduring and real costs be reflected in any reasonable statement of a country's  current  and  future  prosperity?  The  old  communist  system  was  particularly  notorious  in utterly  ignoring  these  costs  and  the  clean-up  bill  faced  by  new  democracies  is  terribly  daunting. We need to learn from that brutal experience. 61.  Kyoto  has  helped  encourage  the  creation  of  emissions  trading  schemes  that  are  helping  to incorporate “environmental scarcity” costing into normal production costs. Such initiatives needed to  be  broadened  into  other  areas  where  human  activity  is  speeding  the  world  toward  potentially dangerous catastrophic environmental events.  More systematic thinking is also needed to develop the means to generate wealth by preserving rather than destroying eco systems. Welfare and bio- diversity should no longer be seen as being exclusively in conflict. Information sharing on how to best  preserve  environment  while  sustaining  wealth  generation  needs  to  be  further  developed. Along these lines, the recently created public Private Climate Group has provided a model of how governments,   cities,   states,   and   businesses   can   pool   environmental   experience   and   build coalitions of emissions reducers. (Houlder) The trans-Atlantic dispute over Kyoto, however, is also a reminder that seeking to cope with catastrophic threats won’t necessarily unite even close allies. Indeed, if the nature of the risk and the remedy are not agreed, the issue can undermine solidarity. 62.  Water  security  should  be  another  area  of  priority.  Here  local  as  well  as  national  and international efforts are needed to improve water quality and access. Conservation strategies are critical because the current rate of water table depletion is unsustainable. Water conservation and quality should thus remain a key priority of the global development agenda.   63. Some have suggested that one way to reduce risks posed by modern production methods and the science behind it is to impose further controls on science itself.  Generally speaking, it is very difficult to slow scientific advance although safeguards in specific instances are certainly needed.   One  need  only  look  at  the  problem  of  nuclear  weapons  proliferation  to  recognize  the  dangers.   Both  prudence  and  ethics  should  guide  authorities  in  these  areas,  but  clearly  global  dialogue  is needed  before  research  moratoria  are  put  in  place.  Once  a  technology  is  effectively  "out  of  the bottle", it becomes extraordinarily difficult to contain its development over time. The problem is that technology is advancing even more quickly today than at the dawn of the nuclear age. Moreover, most technologies can be used for good or iniquitous purposes, and applications are not always apparent in research phases.    64. This does suggest, however, that in future, scientists themselves will have tremendous implicit power, particularly when working with profoundly powerful new technologies, ill-understood by the public and their leaders, that nevertheless have the potential to run away from their own control. Scientists certainly should not have the final word in those cases where the downside of research outcomes might be global catastrophe. In the words of Martin Rees, Professor of Cosmology and Astrophysics   at   Cambridge   University,   "In   view   of   our   current   scientific   and   technological capabilities,  what  is  the  safest  and  most  responsible  way  to  develop  them  further?  Humanity  is
059 ESC 05 E 14 more  at  risk  than  at  any  earlier  phase  in  its  history,  and  this  is  a  critical  time.  Our  future  as  a species may depend on the choices we make in the next hundred years." (Reese) 65. Risk management requires a deepened dialogue between government and the private sector and  a  recognition  that  preparing  for  one  catastrophic  scenario  can  also  help  cope  with  an unanticipated one. This was case in New York where the financial community had spent millions of dollars building in redundancies in preparation for YK2. The passing of the millennium ultimately proved uneventful as far as information systems were concerned, but the redundancies built in the years running up to 2000 proved enormously useful in the immediate wake of the September 11 attacks.  (Partos)    Such  redundancies  need  to  be  extended  internationally  because  catastrophic risk  itself  does  not  recognize  national  borders.  Along  these  lines,  risk  in  a  global  age  requires global   management   strategies.   Purely   national   approaches   to   matters   like   global   warming, fisheries depletion and epidemic management will invariably fail. The imperative for multilateralism is rising not diminishing. Global governance is increasingly necessary and foundations need to be laid   for   greater   multilateral   dialogue   on   everything   from   shared   environmental   threats   to technology governance. 66. Although many of those currently invoking the emergence of the risk society are doing so to offer a critique of neo-liberalism, one should not discount the role markets can play in mitigating risk. The challenge is that governments need to provide the context in which markets operate, and it  is  up  to  states  to  establish  the  broad  goals  of  risk  reduction  while  allowing  the  markets themselves to take up the cause once the incentives are in place.
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