The Dangerous Emotional Side of Risk
“One of the most anticipated collapses on the high street” was how one retail analyst described the demise of Mothercare UK last week. The risk of collapse had been staring Mothercare UK in the face for a long time: high impact – high likelihood, and no doubt glaring red on their risk map; and yet they appeared to do little or nothing serious about it. It was as if they understood the consequence intellectually, but could not engage with it emotionally, it was too awful.
In 1943, the Americans were presented with clear evidence of the Nazi holocaust by the Polish resistance. Whilst not refuting the evidence, one senior American judge said that he just could not bring himself to believe it.
People may identify a catastrophic risk that is becoming more and more likely, but continue regardless because they fail to make an emotional connection with the consequence, and it remains something that is somehow unreal.
Just over an hour into this October’s Treasury Select Committee Meeting of MPs, the Bank of England governor, Mark Carney, commented that the price and value of companies today are all consistent with a global rise in temperature north of 4C compared to the pre-industrial era. To put it another way, the share prices (a view of future profitability) of say, Exxon and BP, indicate that nobody believes we are transitioning off fossil fuels anytime soon.
So despite all the international statements of intent, the pricing of the Market suggests that catastrophic warming will happen, unless quite drastic policies are implemented very soon by all the major economies. And yet this stunning piece of information appeared to go over the heads of the committee members, and reporting of it was confined to the inside pages of a couple of newspapers. Perhaps the consequence is just too awful.
Data Sources: The Guardian newspaper, The Financial Times newspaper, We are the Weather – Jonathan Safran Foer, parliamentlive.tv