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Classical economics was developed for a stable world, for a world that developed along  Darwinian ecological ways. It was realized that individuals faced some future risks (illnesses, death, accidents, unemployment, etc.). These risks could be dealt with by private insurance companies, which developed accordingly. They could also be dealt with government programs, such as public health systems and public pensions. These programs required higher tax burden and a less individualistic society.
However, there were  “uncertain events” (called “Acts of Gods”) the probability of which could not be quantified statistically. These “uncertain events” were generally ignored, by both the individuals, the private pensions,  and governments. Over the many centuries, countries experienced several of these “uncertain events”, some of them were accompanied by catastrophic consequences.
There disasters included: pandemics, famines, earthquakes, floods, tsunamis, volcanic eruptions, and, in recent centuries, also, industrially-caused disasters. These disasters killed millions  of  people and destroyed much property. Over  recent  decades, there have also been some atomic disasters (especially at Chernobyl, in the former Soviet Union, and at Fukuyama, in Japan). These atomic disasters caused many casualties and enormous property losses.The most damaging of these uncertain events, recorded in history, are described in the book. 
The important point is that these so-called  “Acts of Gods” were events that were not anticipated, so that no preparation was made for their potential coming. They were, often, seen as God’s punishment for the sins of humans. In the distant past, governments did not  have  either the financial resources nor the trained personnel to help deal with the consequences of these disasters,  or to make some preparation for their eventual coming. Today’s governments have more resources available. However, when the Covid 19 pandemic came, in early 2020, there had not been any preparation for its coming, on the part of both rich countries and poor countries and the world was caught totally unprepared.
A general conclusion of the book is: that there has been too much investment in protection against “risky events”, and not enough, or often no preparation, against “uncertain events”.
The distinction  between  “risky  events”  and  “uncertain events” was first made by economist Frank Knight’s, in a 1921 book. In that same year, Keynes had also published a book that dealt with the difficulty of estimating correctly “risky events”. These difficulties have continued to attract attention.
Some insurance companies—such as Swiss Re—have recently attempted to create insurances against some uncertain events, such as “volcanic eruptions”.  However, “uncertain events” continue to be seen as “Acts of God”, and the possibility of their coming continues to be ignored. However in some areas, regulations have been strengthened because of the greater likelihood of some such  events, as earthquake in California and in Tokyo. 
The longer is the time horizon, the greater becomes the possibility that a catastrophic  “uncertain event” will happen. And life expectancy has increased in most countries. There seem to be a human tendency to ignore dangers that are “uncertain”. See the  recent  examples  from  the Boing’s plane crashes,  the collapse of bridges, funiculars, and buildings, and others. In all these cases warnings had been ignored.These may reflect “irrational behavior” on the part of humans that tends to make them optimist when an alternative requires costs. Behavioral economics should study this “irrational” human behavior.
The forthcoming book describes many historical examples of major pandemics : from Athens, 430 BD; from Rome, Antonimus, 290 AD; From Constantinople, The Justinian Flea, 541-542 AD; from all of Europe,  The Black, or Bubonic, Plague, of 1346-1353; and the Spanish Flu of 1918-19. These pandemics seem to have often been linked to climate change, most likely created by major volcanic eruptions that spread ashes in the air.  
There were also major epidemics that were at times locally destructive of human lives, but were more contained space-wise. These epidemics often killed large shares of the populations of some cities. They were connected with various contagious illnesses that spread rapidly (Plagues, Smallpox, Choleras, etc). In more recent centuries the impact of vaccination, antibiotics, and better hygiene reduced but did not eliminate pandemics and epidemics. 
For example, the Thames has become much cleaner than it was in the 19th Century, when it had become a sewer and had led to epidemics.
However, other recent developments, such as the growth of international travel by plane, the greater contacts of humans with animals, tourism to exotic and isolated places, and others, have created conditions that may bring new pandemics in future years, as happened with HIV some years ago,  with Mad Cow Disease, and with Covid 19 in 2020-21.
Recently, a new important but uncertain event has been climate change. Climate change has been attracting increasing attention and concern, but so far little firm agreement among countries’ governments  on what to do about it.  See, for example, the just concluded Glasgow Meeting. The importance of economic growth to individuals and governments will continue to be an obstacle to effective measures to deal with the climate. 
Some concerns about environmental problems  started being expressed 60-70 years ago. Originally, the concerns were directed towards localized problems. These problems were created by the growing population and by the residues that it created, by the industrial revolution, and by the belief in past years that the earth could easily deal with the growing impact of more humans and more activity. Initially, the concerns  were about the impacts of industrial output on rivers and on the air; about that of dams; about that of the led in the gasoline that was then used by cars, and some others. 
In the 1960s, a bestselling book by a marine biologist, “Silent Spring”, called world attention to the deteriorating quality of the water in rivers and springs. The acidification of the Oceans also started to attract attention. In the 1970s “The Club of Rome” became a global environmental movements. Its main concern was the possible exhaustion of needed natural resources, because of continued economic growth and growing population. 
To deal with this potential problem would require a limitation of the rate of growth--a zero growth society--, which was not an attractive prospect at a time when there was still much poverty in the world, and when development economics had become important.
The attraction of economic growth and the role that technology could play in creating alternative sources of needed resources led many to ignore the message that the Club of Rome was sending. The deterioration of the environment continued at a fast pace in the years that followed. More population, more use of fossil fuels and more destructions of forests continued to impact the environment and to reduce biologiocal diversity.
About three decades ago the more general environmental problem, that  of climate change and, especially, of global warming that accompanied it, started to attract wide attention. See the Stern Review, the Gore’s Inconvenient Truth, and others.
The link of global warming to the amount of carbon in the air was increasingly seen by many scientists as the main cause of global warming. The annual world temperature was going up.The use of fossil fuels (coal, oil, gas, methane) was increasingly linked to the amount of carbon in the air, and that carbon stays in the air for a long time.  
There were initial denials by the fossil fuels companies and by their lobbyists and by the countries that produced them. Recently that link has become convincing and the effects of global warming have become increasingly evident and painful. Forest fires have intensified. Storms have become more frequent and more powerful.  Heat-waves have intensified.  Glaciers have been melting.  And the seas have become warmer and their levels have been rising. Recent decades have been increasingly hot, creating enormous economic problems in many countries, and forcing large migration. These problems are likely to intensify in the years to come. Use of green energy produced by the sun, the wind, by waves and other sources has increased.
However, without dramatic and quick changes, to contain the temperature growth, the situation will keep getting worse for many more years to come. There is enough inertia to make the situation increasingly worse, almost regardless of current actions, such as the increasing use of green energy, that may be taken in the next few years. Green energy is increasingly being used, but carbon continues to be added to the air by the continued use of fossils. Abd carbon stays in the air there for a long time. Most proposed solutions and commitments are still many years in the future, 2050 or 2060. They will reduce the addition of carbon in the air but not stop it.
Some experts have been calling for more use of atomic power and  there is hope of getting energy from unusual sources, such as green hydrogen, or tidal waves. All these actions may help, but they may help several years from now, and it may be too late to prevent the situation from getting worse.
For the time being growth in the standards of living of the populations remains an important objective for all countries. People and governments are not likely to be willing to sacrifice that objective for their citizens.
An important problem is that many important “public goods” or “public bads”, including global warming, have become global in character, while policies to deal with those problems have remained the responsibility of national government. There is no world government that can impose the needed painful discipline world wide. International agreements among countries can help but they are likely to continue to be weakened by “free riding” behavior: let other countries carry more weight in the needed adjustment.
We may have lost the fight against damaging global warming, and we should be preparing for worse scenario  through some form of painful adaptation. Without major actions and very soon, not in 20-30 years things may get much worse.The above may be a pessimistic but  realistic prospect. The future is not likely to be as good as the past for many parts of the world. Faith in technical progress may become less strong than it was in the 19th Century.
To deal with the problem will require major changes including major redistribution across countries and major redistribution within countries. 
I am sorry to have to conclude on this pessimistic note.
(About his book “Fragile Futures: The Uncertain  Economics of Disasters, Pandemics and Climate Change”, Cambridge University Press: 2022).
Vito Tazi is former Director, Fiscal Affairs, International Monetary Fund.
The views expressed in the post are those of the authors only. No responsibility for them should be attributed to NIPFP.
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