At Large
The Gray Rhinos
Climate change could cause societal and economic crises just as COVID-19 did.
- Tony Kuczinski
- December 2020
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Many people have characterized the outbreak and rapid global spread of COVID-19 as a black swan. The term refers to a rare and highly unpredictable event.
Certainly the world was caught unprepared, but some have argued the pandemic actually falls squarely into the category of “gray rhino.” This term, which may be more apt, describes a highly probable, yet neglected threat. Gray rhinos occur after a series of warnings and visible evidence.
Although most of the public was not aware of predictions from medical experts, over the past decade there have been a significant number of scientists, doctors and policy analysts who expressed concerns about a far-reaching global virus outbreak. If those warnings had been heeded, how much suffering, loss and disruption in 2020 might have been avoided?
Whether the pandemic was predictable prior to 2019 is not the point. There are people in the black swan camp and others in the gray rhino camp. All we can do now is learn from the experience, and try to avoid repeating mistakes when confronting other potential global health disasters.
These lessons can help with another gray rhino staring us in the face. That gray rhino is climate change—and we need to act immediately to avoid a replay (or even worse) of the societal and economic crises that have resulted from the pandemic.
The early warnings are here—recent severe storms, flooding events and the devastating West Coast wildfires are just a few examples. In many cases, long-term prevention strategies have been sidelined in favor of short-term priorities. If vulnerable regions deprioritize long-term strategies, the risks due to extreme weather events will grow.
Although the ramifications of climate change have been apparent for many years, the pandemic has brought to light another level of risk—systemic risk due to globalization. The interconnectedness of the global economy has heightened interdependencies and made the world more vulnerable to systemic risk on many fronts, including climate change. An extreme weather event might lead to supply chain disruption and food and water shortages around the world.
History shows that almost nothing spurs meaningful, long-lasting change as much as a catastrophe. The greatest leaps are often made in the wake of destructive events.
One example is Hurricane Andrew, which hit Florida in 1992. The unprecedented scale and severity of the damage, in part reportedly caused by lax building code enforcement, compelled the state to make broad changes. Building codes were toughened, codes were locally enforced, and planning was modernized.
Since these changes went into effect, Florida has endured several hurricane events, and post-event surveys and claims analysis show that strict building codes significantly reduce the damage to homes and businesses as compared to pre-code structures.
While the pandemic revealed additional vulnerabilities in terms of systemic risks, on the positive side, the collective response of governments, businesses and individuals demonstrated society's willingness to work through the situation. Ideas previously thought to be impossible—like entirely remote workforces—suddenly became possible. Along those same lines, new ways of approaching climate change risk need to become possible.
Climate change calls for coordinated action and information sharing. Insurance companies, governments, businesses and individuals all play important roles in developing resiliency. Working together, these stakeholders can make substantial progress in ensuring the world becomes better prepared for what lies ahead—for both the gray rhinos and the black swans.
