Some crises are more equal than others

Food for thought from The Australia Institute:

Have you ever wondered why, more than 15 years after the world’s leaders gathered in Rio and agreed to tackle climate change urgently, there always seems to be some other ‘crisis’ that is more pressing?

In recent weeks, we have watched the spectacle of the US Congress drafting a $700 billion bail-out package in a matter of days. When the bill was defeated in its original form it spread consternation from Wall Street to the Australian Parliament. Didn’t the Congress understand this was a crisis? Didn’t they understand this was a time for action rather than perfection?

The most interesting thing about the worldwide approach to bailing out the financial system is how pragmatic policy-makers have been. No one, from the US Treasury Secretary to Kevin Rudd, will put their hand on their heart and say they understand the full nature and extent of the problem.

Nor will they look the voters in the eye and declare that, after spending trillions of dollars to bail out banks, they are certain that the problem will be solved. On the contrary—when it comes to the world of finance, we all have to accept just how complex the systems are. We can’t really expect certainty, and we can’t really guarantee success. Rather, we all just have to comfort ourselves with the thought that it would be irresponsible to sit back and do nothing. It is, it seems, self-evident that we shou ld at least try.

But not, apparently, when it comes to climate change. Even though most of our bankers can’t explain the risks associated with the derivatives they have purchased over the years, our climate scientists are expected to be able to predict the weather to a high degree of accuracy in 70 years’ time.

Even though economists can’t predict the rate of GDP growth, inflation or the exchange rate next month, those determined to do nothing about climate change demand certainty about what the price of emissions permits will be in 20 years’ time.

The current financial crisis was unforseen by the major governments of the world. The cost of the bailouts combined with the flow-on economic effects are likely to dwarf the estimated costs of tackling climate change, yet there is little talk of abolishing private banking because of its potential to cause harm to the economy.

In the last month, trillions of dollars have been found. New regulations have been introduced. And countries have all committed to work collectively in the pursuit of a common goal. Unfortunately, none of this effort has been aimed at reducing greenhouse gas emissions; it has been aimed at something far more important—sustaining the banking system as we know it.

How are our perceptions of crises shaped? What factors make one more worthy of "emergency action" than another? Obviously, some of these factors include quite rational considerations such as the extent and likelihood of the threat and the projected cost of averting it, but what about irrational factors?

For all the damage they are both already doing, it is more accurate to consider both climate change and the credit crunch as potential rather than actual crises, since in both cases, there is far worse threatened as a result of inaction (though exactly what that "far worse" would be in the case of the credit crisis has yet to become widely publicised; instead, in most discussions of the issue the threat is kept fairly general).

Perhaps we can add other threats to this list: a nuclear terrorist attack (or simply a nuclear war); peak oil; a global pandemic; and so on. There are, at all times, a wide variety of potential threats to civilisation as we know it, though they differ considerably in scope, likelihood, cause and cost of possible solutions. Yet how are we to face the presence of such threats? I am not asking "how do you cope personally?", but how do we live together with them hanging over our heads? What effect do these threats over tomorrow have on our ability to pursue the common good today?
If you hadn't guessed, this post and the previous one are further attempts to try to articulate some of the questions I am interested in for my research. From these, I need to narrow down a more specific one.