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9 October 2008

The disaster we have yet to face

Jacques Attali finds disturbing similarities between the financial tsunami and the climate crisis we

By Jacques Attali

A good chess player plays several moves in advance. Today, it is important to anticipate the path of the current financial crisis and ensure that what has begun does not become even more brutal in 20 years’ time.

But it is even more important to ask ourselves what the economic crisis reveals about our ability to control all our tsunamis, financial and otherwise. Foremost is the worst imaginable tsunami: an uncontrollable disruption of climate leading to panic and instability of the kind we are currently experiencing.

For the stakes of such a climate crisis are high. The current financial tsunami will, at worst, provoke a major recession, whereas a climatic tsunami will, at worst, destroy humanity. Am I exaggerating? No. First, the data: the cost of the ecological impact of CO2 emissions from countries in the Northern Hemisphere from these “toxic products” – to employ a phrase that has been used to describe financial derivatives – has been put at $3trn, perhaps more than the losses that will arise from the financial crisis. This ecological impact will only grow, and with it the effect on temperatures, on oceans, on glaciers, on storms.

If climate instability accelerates as quickly as the financial crisis has unfurled, if we discover, as in the case of the economy, that not only is there no pilot in the aeroplane, but there is not even a pilot’s cabin, then at a certain point the trends could become irreversible. We could even find ourselves in a situation where the global increases in temperature are final and where no human action can prevent the poles from melting, the deserts from growing, the sea level from rising, or hurricanes from becoming more numerous and more powerful.

Then, species of animals would disappear, life under the sea would become almost impossible, hundreds of millions of people would be forced to move, to flee deserts and coastlines, without knowing where to go. The temperature could rise so high, beyond the 4, 6, 8 degrees of which the most pessimistic hypotheses currently speak, that vast areas of the planet would become uninhabitable. Natural phenomena could disturb underwater deposits, leading to a huge release of methane into the atmosphere, asphyxiating humanity. Even the best-informed and richest would be unable to act or find refuge.

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It would then be too late to lament that we hadn’t listened to those who warned us, or to regret not having acted when there was still time. It would be too late to regret not having taken modest, sustainable measures that would have been enough to reverse the trends and to inaugurate a formidable period of growth based on simple available technologies that would have helped us to reduce greenhouse-gas emissions.

It may be an extreme hypothesis. But it is no more extreme than the hypothesis made by many economic experts in recent years, that a sub-prime crisis would lead to a general loss of control over financial derivatives – toxic or not – and to the total breakdown of interbank lending; to the weakening of hedge funds, of businesses, of nations and to the huge, lasting and uncontrollable global depression that now threatens.

In both cases, we find ourselves confronted by collective intelligence. Market economics is a sort of golem, or clay creature, without intent, capable of benefiting humanity, but also of destroying everything in its path because it has no concept of ethics. As with every golem, now may be the time to engage our brains, and our sense of good and evil in order to master it, before it escapes us.

Jacques Attali is a former president of the European Bank for Reconstruction and Development

Translated by Daniel Trilling