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The wicked problems of pandemics and climate change

Risk & Analytics|Environmental|Insurance Consulting and Technology|Reinsurance|Climate Quantified
Climate Risk and Resilience|COVID 19 Coronavirus|Insurer Solutions|

By Geoffrey Saville | June 3, 2020

There is great potential to take the lessons from the current pandemic and apply them to wicked problems such as climate change.

Right now, the world is investing the majority of its time and effort in tackling COVID-19 and the resulting economic hardships. The challenges we face are local and global. This virus doesn’t care for politics or power, but our responses and varied levels of resilience have caused the spread of its impacts to be uneven across different countries and sections of society. Certain socioeconomic groups have taken a larger hit than others, and our responses often have been forced to make trade-offs based on poor quality, ambiguous or absent data leading to difficulty in communication and development of effective policy.

Remarkably similar to the challenge of action on climate change in fact. So, as we fight to bounce back from the pandemic, we have the opportunity to learn from the experience and accelerate our progress in tackling climate change to build a more resilient society, more able to manage complex and interconnected risks all levels of society and industry. The current pandemic is, like climate change, a megatrend, both in terms of impacts on human society and the environment, and in the scale and complexity of the possible responses needed. Climate change truly spans and connects environmental, social and governance (ESG) aspects of managing a company, and touches all aspects of national and international policy. As ESG evolves1 to go beyond the world of corporate social responsibility, and becomes a framework for addressing complex and intractable risks, beyond the scope of any individual or single entity, these global issues can be reviewed and managed in a holistic sense through deeper analytical understanding of the many facets of risk management.

The wicked problem

The physical sciences and numerical modelling of the chaotic climate system seem relatively well-behaved compared to the intractable problems of trying to control the spread of a novel and deadly pathogen such as this Coronavirus, or understanding societal climate-related risks well enough to influence policy on reducing carbon dioxide (CO2) emissions. These issues can be described as “wicked problems”2, a term discussed in the journal "Management Science", in the late 1960’s having been coined by Professor Horst Rittel, and which has been used in the context of climate change a number of times since3,4.

Wicked problems are characterised by deep scientific complexity, varied levels of consensus on specific aspects, economic uncertainty around the trade-offs involved, a lack of agreement on efficacy of mitigation and adaptation policies, and profound conflicts in values between different interests. Therefore, solutions to these problems cannot be met while meeting the needs of all parties involved. Just as pandemics will take opportunities to spread, regardless of the political party in power or international agreements in place, climate change doesn’t care for international boundaries, but a significant difference is that it will never be solved by the development of a vaccine. As Mark Carney, former governor of the Bank of England, recently stated in a policy exchange with Malcolm Turnbull, former Prime Minister of Australia, “we can’t self-isolate from climate change”5.

So, in an ever-changing world, where society must meet these challenges head-on in the theatre of our interconnected geopolitical arena6, we must devise new ways to build resilience through evidence-based decision-making; to measure, to share and then to manage. Risk is not distributed evenly, so different responses to complex challenges like pandemics or the threat-multiplier of climate change, must be viewed in the global context of megatrends such as urbanisation, growing populations, demographic changes, environmental degradation, and technological change, while being made relevant to individual behavioural choices and business or policy decision-making.

Living in these challenging times is difficult, but the learning opportunities are priceless, and can provide insights on how we can tame7 these “wicked problems”. There is never a single solution, no panacea, no silver bullet, but we can make informed decisions and share experiences to help us plan and build resilience for future challenges.

Parallels and lessons

It’s important to draw parallels between our understanding of climate change and pandemics. Taking a scientific point of view, the fundamental scientific basis of how the climate system works is well understood and, equally, our biological understanding of virus transmission and how the human body fights the effects of viruses is also grounded in robust and well-tested science. But while the scientific understanding steadily improves, society changes.

This coronavirus has shone a light on the scale of the societal vulnerability to such threats, and the interconnected nature of our responses and the range of different impacts. The slowly evolving geopolitical landscape, together with an evolving epidemiological risk, shares similarities to how climate change is potentially shifting the distribution of severe weather events, like tropical cyclones and floods, towards the extremes. Meanwhile we also continue to increase our exposure through building on flood plains or living near coasts, with developing countries, in particular, becoming increasingly vulnerable to amplified threats linked to climate change.

Another parallel lies in the timescales involved in both the onset of the problems and the responses they elicit. The current pandemic crisis represents a specific and immediate threat that has forced an acute response; a response that has been made increasingly difficult over the decades due to changing background vulnerability of the world’s socioeconomic infrastructure. The increasing population, changing demographics, urban crowding and a dynamic geopolitical landscape make managing pandemic risk hugely challenging, in the same way that these megatrends are all amplifying factors for climate risks.

Chronic climate risks from the effects of temperature increases and sea level rise have been amplifying steadily over many years, and while the developed world may well have capacity to adapt, our environment and ecosystems and more vulnerable communities do not. Mitigating the degree to which the world will warm by reducing greenhouse gas emissions permanently remains the most equitable option for the global community. Climate change also exhibits acute impacts. Immediate effects can be seen in new extremes of weather which can now be attributed to anthropogenic climate change to varying extents8. By understanding the relationships between acute impacts and chronic risks that develop over time, and the urgency in the responses they generate, we can better justify long-term mitigation strategies, and plan to adapt to the more acute changes we are already locked into and will require specific and immediate responses.

Investment in climate resilience is often discounted compared to opportunity costs and is not seen until a negative consequence of a preventable event occurs. Carbon pricing, through metrics like the Social Cost of Carbon9 (and other greenhouse gases), can try to quantify the future costs and benefits to society at large of emitting one tonne of carbon into the atmosphere and underpin appropriate carbon taxes to even out the benefits accrued by burning fossil fuels across those who stand to lose out through no action of their own. Climate change and the recovery process from the impacts of future pandemics present us with opportunities to mitigate the risks by taking preventative action and accelerating the transition to renewables and low carbon industries. Alternatively we can do nothing and be forced to adapt to greater negative impacts in the future. Either way, these wickedly complex problems will not be reduced unless there is action on global, national and individual scales, as these challenges are too big to address alone and require collaboration from all sectors of society, at national and local levels.

Informed decision-making

The biggest uncertainty in the level of global warming we will see in the future, and how well we will respond to future pandemics, is quite frankly, us. We do not know what exact combination of environmental, socioeconomic or political drivers will emerge in the longer time horizons required to meet CO2 emission reduction targets, such as the UK Government’s commitments to be net zero by 205010. This is why we use scenarios to play out the potential pathways society can take.

The Intergovernmental Panel on Climate Change (IPCC) Representative Concentration Pathways (RCPs)11 are summary representations of future worlds created using different sets of policy, growth, land use and technological assumptions to project future atmospheric concentrations of CO2. These projected concentration pathways are then fed into climate models from the world’s leading scientific organisations to understand the levels of warming and associated impacts on the environment that we can expect. While these scenarios are an aggregation of many narratives, they are based on social and economic science to provide a context for the choices we can make today and their expected results on our future climate.

These tools are also being used by the finance and corporate sectors to guide stress tests for chief risk officers to understand the potential range of outcomes on physical assets, business operations, supply chains or investment portfolios (for example via the Task Force on Climate-related Financial Disclosures12, or the Bank of England Prudential Regulation Authority’s Biennial Exploratory Scenarios13). These scenarios include estimates of future populations and demographic changes, different policies on carbon pricing and incentivisation for renewable energy, as well as different rates of increases of energy demand by developing nations, all of which give an invaluable and consistent framing through which governments and industries can build narratives for strategic planning, whatever the future holds.

A Petri dish for climate action

These scenarios can help set the parameters within which we will need to operate and identify those variables we can influence, as we undergo the transition to a zero-carbon economy, to attempt to keep the planet within safe operating limits14. The disruption caused by the pandemic can also serve as a real-time experiment for what it will take for society to reach zero or negative carbon emissions.

Links between the pandemic and the effects of global action to slow its spread on the environment are plain to see and will be studied for years to come. We’ve seen skies clear of contrails from reduced air traffic, heard anecdotal reports on reduced human pressures on wildlife15, and benefitted from cleaner urban environments16. But these are transient benefits, which will stay with us only so long as human activity is reduced.

A recent study17 found that global CO2 emissions were down by 17% during the peak of the pandemic. Annually, that’s only 4% to 7% lower than last year, depending on how long strict lockdown measures last for much of the globe. This is the biggest dip in carbon emissions since World War II, but it also gives a sense of scale on what is required to reduce our emissions to net-zero and shows that individual action from social distancing and reduced business activity is simply not enough. Our societal infrastructure has not yet made the transition to a zero-carbon economy, and so this represents limited progress. Reductions will have to come from greater behavioural changes from individuals, and significantly from industry, and energy demand and production.

When we leave lockdown, economic activity will resume and will likely be stimulated by government incentives to get people back to work and help businesses recover lost earnings. The environment will once again bear the effects of our return to normal, as greenhouse gas emissions and pollution tick back up to comparable pre-pandemic levels. From a climate change perspective, while a temporary dip in emissions is a positive thing, its effects will hardly be felt in the long term.

The reason18 is that CO2 stays in the atmosphere for much longer than other greenhouse gases (such as nitrous oxide and methane) and air pollutants such as dust or soot. Methane for example is a powerful greenhouse gas, but only resides in the atmosphere for around a decade, so action can be taken to reduce its impact with relatively fast results. CO2 is removed by a number of physical processes but most of them are much slower than the chemical reaction that breaks down methane. Much of the CO2 released dissolves in the oceans over a couple of decades to centuries, but this process has its limits and increasing CO2 transfer into the oceans results in increasing acidity which can harm marine ecosystems.

The rest of the CO2 takes many hundreds of thousands of years to be removed from the atmosphere through rock formation and chemical weathering. This means that most of the carbon we burn and release into in the atmosphere now will remain there for a very long time. So the reductions in emissions we have seen recently will have little effect on global warming and climate change, unless such reductions can be maintained and encouraged further.

Potential for change

There is great potential to take the lessons from the current pandemic and apply them to other wicked problems such as climate change. Some changes may happen organically, as business travel may be reduced after new remote working and video conference has been forced to become normal practice, and perhaps the brief glimpse at a cleaner environmental and clearer air may encourage greater behavioural change from the general public.

But while the world continues to respond and adapt to the pandemic crisis, the need for global collaboration and scientific understanding to support evidence-based decision making and strategy planning are clear paths towards creating a more resilient future, regardless of the challenges we will face.

How can Willis Towers Watson help?

At Willis Towers Watson, we are deeply engaged with leading scientific institutions around the world through our Willis Research Network19 to better understand the science behind risks posed by the climate change20 and pandemics, and their impacts on society. And all the while, we are working with our clients21 and also international initiatives in the public sector to develop new ways to understand, measure and manage risks in the complex world we inhabit22.

Climate QuantifiedTM is our company-wide response to the needs of our clients to address climate risks. Climate Quantified leverages our deep weather and climate analytical experience, our extensive academic network and institutional investor relationships, and our broad multi-disciplinary expertise and capabilities into a fully integrated service offering, to support informed decision making on climate risk.

























Head of Weather and Climate Risks Research




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