Side by side images en:User:Ittiz created to show what Mars might look like at various stages while being terraformed in vertical alignment. The horizontal alignment is here: en:Image:MarsTransition.jpg http://commons.wikimedia.org/w/index.php?title=Image:MarsTransitionV.jpg&oldid=11571800. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

Terraforming was a concept I first remember coming across in Star Trek 2: The Wrath of Khan in 1982 when “The Genesis Device”, and its effect on a dead planet, was described as “matter is reorganised with life-generating results”. The astronomer Carl Sagan had previously proposed the planetary engineering of Venus in 1961 and Mars in 1973. Martyn J. Fogg subsequently started publishing articles on terraforming in 1985 before publishing Terraforming: Engineering Planetary Environments in 1995. Fogg defined planetary engineering as using technology to change the global properties of a planet (he called this geoengineering if Earth was the planet in question). Terraforming he defined as planetary engineering which was specifically directed at enhancing the capacity of a planet to support life as we know it.

There are still advocates of terraforming as a project that humans should be actively working towards. Others suggest, that unless Earth is going to be unavoidably uninhabitable, it is likely to be our best bet as a future home for all but a relatively tiny number (Kim Stanley Robinson’s novel Aurora is the most memorable advocate for this position in my view, which takes us on a gruelling exploration of a terraforming expedition over several generations which then allows us to view Earth afresh with alien eyes).

What is clear is that we are not currently terraforming Earth in Fogg’s sense, as most of our planetary engineering (what we call the global economy) appears to be specifically directed at reducing the capacity of Earth to support life as we know it. We are terraforming in reverse.

Terraforming is an example of an idea you might get to as a result of very long-term thinking (there is a nice article about this in Vox, with views from Roman Kznaric, Nick Beckstead, Hilary Greaves and William MacAskill included) – I tend towards the Kznaric view that we cannot predict the knock-on effects of technological shifts in 200 or 300 years, but we know we’ll still need to breathe air and drink water, so working to prevent climate change and pandemics is very likely to be really good for us today, the near future and the long-run future too.

The danger of discussion of the very long-term is that it can create the idea that nothing we do over the next few years matters. However as we have pushed up to and beyond planetary capacity in so many areas now and have developed a global economy with planetary engineering capabilities of unprecedented power, this is no longer true if it ever was. What seems obvious to me is that we mustn’t make decisions now which lock in damage to planetary life-supporting capacity for generations to come, such as the “carbon bombs” described by George Monbiot here.

Terraforming in reverse is not the direction to choose, whichever generation we belong to.

For those of you totally immersed in the daily to and fro of the finance industry, this post about Stuart Kirk will probably seem a little late in the day. For those of you who are not, let me explain briefly what I am talking about today!

Stuart Kirk was Global Head of Responsible Investments at HSBC Asset Management. On 19 May 2022 he gave a talk at the FT Live Moral Money Summit Europe conference with the provocative title of Why investors need not worry about climate risk. Stuart’s talk was a real crowd splitter. Many called for his dismissal (HSBC subsequently suspended him), others regarded his talk as a missed opportunity and full of things which were not true, while others have regarded his stance as speaking truth to power.

However what interests me most about all of the column inches devoted to the affair is what he has not been criticised for and what this tells us about financial markets.

What Stuart said was structured around the following 12 statements:

  1. Unsubstantiated, shrill, partisan, self-serving, apocalyptic warnings are ALWAYS wrong.
  2. As the warnings became ever graver, the more asset prices INCREASED in value.
  3. One of only three explanations can explain the impending end of the world and higher risk asset prices:
    1. Climate risk is negligible.
    2. Climate risk is already in the price.
    3. All investors are wrong.
  4. Even by the UN IPCC own numbers, climate change will have a negligible effect on the world economy – A (large) temperature rise of 3.6 degrees by 2100 means a loss of 2.6 per cent o global GDP. Let’s assume 5%.
  5. Adaption is cheap and effective: climate related costs relative to GDP and mortality rates are down.
  6. Perhaps the biggest error of thinking with climate risk is confusing volumes and values – Plenty of things happen between a volume disruption and a move in asset values.
  7. Climate “winners” and losers” can create value. Climate “winners” and “losers” can destroy value.
  8. The difference between volumes and value is regularly made clear in markets.
  9. Even if climate risk isn’t negligible, it’s too far into the future to matter for most companies.
  10. To make climate change appear like a significant threat, scaremongers are torturing their models.
  11. It’s easy to show that climate change is an investment risk if you engineer a bond market collapse.
  12. Climate change isn’t a long-run risk just like wars, energy crises, pandemics, financial crises and so on (with the graphs shown above to supposedly prove this point).

Can you spot the pattern here? All of these statements are about the map that Stuart is standing in (think of Joey standing in his map to orientate himself in Friends). It is a complicated map of asset prices and charts and reports written by lots of other people standing in the map with Stuart, but it is still just a map. And the map is the territory as far as Stuart is concerned. If something does not appear in his map, it is not worth worrying about. And climate risk is struggling to make it into his map. In Stuart’s view, this is a problem for climate risk, and the people “torturing” their models to make climate risk appear significant and piling him up with regulatory reporting responsibilities are very annoying.

But of course this take is completely upside down. This is not a problem for climate risk. Rather climate risk is a problem for us and the fact that it does not appear in our models unless we torture them (which I am sure is true) means that we have the wrong models. Because the scientific consensus about the consequences of climate change on our current trajectory of between 3 and 4 degrees warming are (amongst others from Mark Lynas’ Six Degrees: Our Future on a Hotter Planet):

Africa […] split between the north which will see a recovery of rainfall and the south which becomes drier […] beyond human adaptation.
Indian monsoon rains will fail. The Himalayan glaciers providing the waters of the Indus, Ganges and Brahmaputra, the Mekong, Yangtze and Yellow rivers [will decrease] by up to 90%.
The Amazonian rain forest basin will dry out completely. In Brazil, Venezuela, Columbia, East Peru and Bolivia life will become increasingly difficult due to wild fires which will cause intense air pollution and searing heat. The smoke will blot out the sun. Drought will be permanent in the sub-tropics and Central America.
Australia will become the world’s driest nation.
In the US Gulf of Mexico high sea temperatures will drive 180+ mph winds. Houston will be vulnerable to flooding by 2045. Galveston will be inundated. Many plant species will become extinct as they will be unable to adapt to such a sudden change in climate.
The [IPCC] in its 2007 report concluded that all major planetary granaries will require adaptive measures at 2.5° temperature rise regardless of precipitation rates.[and] food prices [will] soar. Population transfers will be bigger than anything ever seen in the history of mankind. [The feedback effects from the] Amazon rain forests dry[ing] out and wild fires develop[ing] [will lead] to those fires [releasing] more CO2, global warming [intensifying] as a result, vegetation and soil begin[ning] to release CO2 rather than absorb[ing] it, all of which could push the 3° scenario to a 4°-5.5° [one].

Much of the discussion about the talk was that Stuart was speaking out bravely and that HSBC had only suspended him to silence inconvenient truths, that he had been silenced by “extreme environmental ideology“. I have no idea about all of the reasons why HSBC suspended Stuart other than their official statements, but it seems clear to me that many people in the finance industry agree with what he said. This suggests to me an extreme ideology of its own of resolutely refusing to look out of the window.

In Kim Stanley Robinson’s excellent New York 2140, global sea levels have risen by 50 feet. Everyone lives in tower blocks connected by sky bridges which occasionally topple into the canals which were once streets. I used to think that money markets would not survive events like this, but Robinson posits what I believe is a more likely future scenario. The Intertidal Property Pricing Index is developed instead, carefully constructed to be reasonably stable despite the instability of the actual real estate being valued, and people bet on it. And soon everyone is fixated on what this index is saying daily rather than the buildings collapsing around them.

This is exactly what our finance sector will do of course, there will be money to be made out of such activities after all. And so expectations that they will, in any way, be a leader out of the climate emergency are, in my view, unrealistic.

We will however need the finance industry to facilitate aspects of how we transform our economies over the next 10 to 20 years. And this will involve much more of the regulation which annoys Stuart and others so much.

Source: Wikimedia Commons: Shattered right-hand side mirror on a 5-series BMW in Durham, North Carolina by Ildar Sagdejev. Cropped by Nick Foster

It starts in 2025 with a description of a horrific heatwave in India which will stay with me for a very long time. As well it should as, in the book, it kills 20 million people. In response, India send thousands of aircraft up to 60,000 feet to spray aerosol particulates of sulphur dioxide into the stratosphere, in defiance of the international conventions banning such activities, to deflect some of the solar radiation with the aim of reducing the probability of future heatwaves for a period. By how much or for how long or with what other consequences is unknown.

As we build up to COP26 in Glasgow in November this year, in the book we start with the results of COP29 in Bogota, where the organisation which would come to be known as The Ministry for the Future (and the title of the book by Kim Stanley Robinson) was set up “to advocate for the world’s future generations of citizens, whose rights, as defined in the Universal Declaration of Human Rights, are as valid as our own. This new Subsidiary Body is furthermore charged with defending all living creatures present and future who cannot speak for themselves, by promoting their legal standing and physical protection.”

The Indian crisis happens a few months later. The new head of this body, Mary Murphy, is briefly held captive by, Frank, one of the survivors of the heatwave in her own flat in Zurich (the book also feels like a love letter to Zurich) and challenged to do more:

It’s not enough. Your efforts aren’t slowing the damage fast enough. They aren’t creating fixes fast enough. You can see that, because everyone can see it. Things don’t change, we’re still on track for a mass extinction event, we’re in the extinctions already. That’s what I mean by not enough. So why don’t you do something more?

This has a profound impact on Mary, who keeps in touch with Frank and his troubled suffering life throughout the book. It also leans her towards effectively endorsing the involvement of her No 2 in “black” operations to ensure certain people are “scared away from burning carbon”.

Indeed the book is suffused with eco-terrorism. Technological progress has partly displaced the state monopoly of violence, with drone technology in particular meaning that no aircraft or ship or surface navy is safe from a well-enough organised group by the end of the book. People stop flying when aircraft start being shot down regularly, and those that still do fly use carbon-negative airships, where solar panels generate more power than the ships use. Davos attendees get taken hostage and given a compulsory seminar at one point. Tax havens become obsolete when all money becomes digital and tracked.

Mary’s interactions with central bankers are probably the closest this book ever comes to comedy. In the first, she tries to argue for a “carbon coin”, a digital currency which would be paid out to organisations and people who could prove they had removed carbon from the environment. This would be the incentive to work alongside the carbon taxes. The contemptuous response from the Federal Reserve and others at first is “not our purview”, however by the end they are on board with this and many of the other ideas developed along the way.

There are so many ideas in this book, far too many to cover them all here: some of them familiar to me from economics (carbon quantitative easing, Jevons’ Paradox, Modern Monetary Theory, Gini Coefficient – these each get a short chapter among many other ideas and interspersed with riddles) and others not so. The Indian techno fix is the first of many: some successful, like sucking out the meltwater under glaciers to slow them sliding into the ocean and others not so, like the billionaire wanting to refreeze the oceans. Russia dyes parts of the Arctic yellow to reflect more sunlight back. Huge areas of land are rewilded.

What strikes me most is that the arguments we tend to have here and now about which course to take (Freud’s phrase is quoted here in the book – “the narcissism of small differences”) seem largely moot in this one imagined near-future: all of them are tried there – it’s not techno-fixes or de-carbonisation of transport and heating, it’s both. It’s not carbon QE or re-wilding, it’s both. If something doesn’t work, it’s abandoned. By far the most important determinant of which of the IPCC future scenarios we end up on seems to be how quickly we start. Economists come in for particular ridicule there – whatever course of action is planned, they can find one group who thinks it will have one effect, one who think it will have the opposite effect and one which thinks it will make no difference at all. The difference is that the economists are no longer guiding policy there, but facilitating and post hoc rationalising it.

There is a wartime feel to the book throughout, with people doing what they feel needs to be done in desperate circumstances. The choices are all different levels of bad, but bad is almost incalculably better than worst. And the overall impression is of a world changing rapidly, with one of its herd animals belatedly getting into better balance with the others. Even at 560 odd pages the impressions are inevitably just that – one chapter is just a list of different organisations working on aspects of the climate emergency in different countries, described as about 1% of the total number active. It is like the shards of a smashed wing mirror picking out details from the vanishing world behind. I have never wanted to apply the word polymesmeric (which I first saw on the cover of Catch 22 by Joseph Heller) to a book as much as I have to this one.

The hoped-for outcome of all of this? In one conversation this is described as a “success made of failures” or a “cobbling-together from less-than-satisfactory parts”, which I think sums it up nicely.

And I definitely want to visit Zurich one day. Probably by airship.

 

Brian Aldiss told me a story the other week (at the Birmingham Science Fiction Group, where he is an honorary president) about Margaret Thatcher and her attitude towards science fiction. Kingsley Amis had been invited to a party at Downing Street and had decided to take along an inscribed copy of his latest book Russian Hide and Seek. Mrs Thatcher, a little suspicious about what she was being handed, had apparently asked what it was about.

Amis had explained that it was set in the future when the UK had been under Russian occupation for 50 years.

“Can’t you do any better than that?” the Prime Minister is reported to have said. “Get yourself another crystal ball.”

Aldiss recounted this story as he felt it illustrated how Mrs Thatcher totally misunderstood what science fiction was about. It was not about prediction of the future, but for people who “liked the disorientation” (the essence of science fiction in Aldiss’s view) of portraying an unfamiliar landscape and trying to work out what would hold true under different circumstances.

It seems to me that this is also what being an actuary is about. Actuaries are not about prediction either, but they are prepared to embrace the disorientation of asking what ifs and exploring maybes, and, by so doing, try to quantify what different currently unfamiliar landscapes might look like.

Science fiction has many forms but two main camps politically: the camp which believes a more enlightened form of society is possible (although what that means might vary considerably between different campers); and the camp which doesn’t but instead believes that all we can hope to do is survive a remorseless universe governed by nothing more than the laws of physics and evolutionary biology.

I think actuaries may have leaned more towards the second of these world views, particularly in fulfilling their statutory roles in recent years. We have worked within the remorseless universe of regulators and assumed that increasingly complex systems will make us safer in a Darwinian financial world. However the group think this has inevitably promoted has made us all less safe. As a result, we have heard many voices in the discussions about the financial crisis, including many what ifs and maybes, but few of these voices have been actuaries’. To quote Bob Godfrey (admittedly he was talking about animation at the time), the professionals are in a rut and the amateurs aren’t good enough.

Actuaries need to put themselves about as much as the amateurs do. Sometimes that will be uncomfortable. Sometimes we may look a little foolish for a while. But in my view it is the only way we are going to contribute meaningfully to the construction of a better society. And we might even produce some decent science fiction in the process.