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Wednesday, March 25, 2020

COVID-19 and Climate change: A Convergence of Crises

“Never waste the opportunity offered by a good crisis.”
         -- Niccolò Machiavelli

What appears to be the hallmark of the COVID-19 crisis at the peak of the curve, that place where fatalities are highest, is lack of capacity within the health-care delivery system.

We have seen it in Italy.  We are seeing it in New York.

The Governors of both Oregon and Washington are taking extraordinary measures to prevent this scenario here by constructing temporary care facilities in tents on soccer fields and at the Fairgrounds in Salem.  These needed actions do raise a question.  Why are we so unprepared for situations where emergency care is crucial for survival?

We live in an earthquake subduction zone.  Significant portions of our population reside in Tsunami Inundation Zones.  Every major city in the Willamette Valley is within the impact area of a dormant volcano and an air-quality inversion area. The devastation caused by major forest fires is no longer a distant memory of a prior generation.

Yet in order to address this pandemic, we are forced to build temporary field hospitals.  We do not have sufficient ventilator capacity in the state, and local health-care organizations are seeking volunteers to sew safety masks for providers. The forces that created this situation are neither new nor unique.

In 2006, Lord Nicholas Stern, economist, issued a 700-page report on climate change on behalf of the United Kingdom.  In it he cites that climate change is the result of the greatest market failure in human history. The logic now-a-days is well accepted by most.  If modern managers of most corporations can avoid a cost, they will.  This is not new.  For decades heavy industry discharged toxic chemicals into the air and water of the communities where their factories were located.

Government regulations put an end to the most egregious of these until the current Trump administration defunded enforcement and rewrote these “onerous” requirements.  As a result, communities and workers are less safe today than they were in 2016.

Carbon and other invisible greenhouse gases up until recently have escaped government regulation. Just as market forces would not price the costs of cancer for smokers to cigarette manufacturers or the cost of plastic in the environment to either manufacturers or users, so too, market forces prevent the multi-billion dollar annual price tag of extreme weather events caused by climate change to be paid by carbon emitters.  Instead, it is paid by taxpayers, just as insufficient health-care capacity is being paid for by citizens in the form of fatalities.

The very same economic forces that will not hold accountable those who contribute to climate-change disasters have also failed to put a price on the failure of our health-care system to be prepared for emergency pandemics, floods, earthquakes, volcanic eruptions or forest fires.

“Internalizing externalities,” in economist-speak, is a challenge.  In the King’s English, Lord Stern labeled it “a market failure."

The exact same failure to force those who are creating a public cost to pay for the costs they are creating, while simultaneously allowing the private gain to be retained, created the Great Depression.  FDR understood this and labeled such actors “economic royalists."  He called for “social justice through social action."

When Roosevelt died in 1945, the New Deal wasn’t yet complete.  The Republican Party spent the next 70 years piece-by-piece seeking to undue the public’s ability to control the private accumulation of extreme wealth.  With each regulation undone, the market, as allocator of goods and services, supplanted the democratic vote of “We the People."  Electrical power (public utility districts), health care delivery, prisons and financial services all were monetized as private-wealth accumulation centers rather than as entities designed to meet public needs.

Thus, we find ourselves with converging crises with similar root causes.  If our health-care system was built to meet public needs instead of providing insurance companies and private health-care providers a source of private gain, then unused capacity would be much higher.

In a for-profit model, an unused ICU bed or a dormant ventilator are costs that can be avoided.  Keeping capacity to normal and predicted rates of usage maximizes income while minimizing disaster-response capabilities.  It also destroys any rural health-care structures, since lower rural population density can’t compete with urban profit centers.

The same economic forces, supported by our complex economic mythology that permits carbon to be placed into the environment without costs, also allows profits obtained from “lean” medical-care infrastructure to be distributed to stockholders instead of lying idle as excess capacity during normal times.

We no longer live in normal times.  We have multiple crises occurring simultaneously and with them, a historic opportunity for multi-generational change. We have an opportunity for political consensus similar to the one that drove the New Deal -- but only if we all recognize that business as usual is not only bad public policy but also part of the problem.  Carpe Diem.