Critical infrastructure disruptions ripple, causing extinction and turning every impact.

Global Challenges – Twelve risks that threaten human civilisation – The case for a new category of risks 89

3.1 Current risks

3.1.5 Global System Collapse

Global system collapse is defined here as either an economic or societal collapse on the global scale. There is no precise definition of a system collapse. The term has been used to describe a broad range of bad economic conditions, ranging from a severe, prolonged depression with high bankruptcy rates and high unemployment, to a breakdown in normal commerce caused by hyperinflation, or even an economically-caused sharp increase in the death rate and perhaps even a decline in population. 310

Often economic collapse is accompanied by social chaos, civil unrest and sometimes a breakdown of law and order. Societal collapse usually refers to the fall or disintegration of human societies, often along with their life support systems. It broadly includes both quite abrupt societal failures typified by collapses, and more extended gradual declines of superpowers. Here only the former is included.

3.1.5.1 Expected impact

The world economic and political system is made up of many actors with many objectives and many links between them. Such intricate, interconnected systems are subject to unexpected system-wide failures due to the structure of the network311 – even if each component of the network is reliable. This gives rise to systemic risk: systemic risk occurs when parts that individually may function well become vulnerable when connected as a system to a self-reinforcing joint risk that can spread from part to part (contagion), potentially affecting the entire system and possibly spilling over to related outside systems.312 Such effects have been observed in such diverse areas as ecology,313 finance314 and critical infrastructure315 (such as power grids). They are characterised by the possibility that a small internal or external disruption could cause a highly non-linear effect,316 including a cascading failure that infects the whole system,317 as in the 2008-2009 financial crisis.

The possibility of collapse becomes more acute when several independent networks depend on each other, as is increasingly the case (water supply, transport, fuel and power stations are strongly coupled, for instance).318 This dependence links social and technological systems as well.319

This trend is likely to be intensified by continuing globalisation,320 while global governance and regulatory mechanisms seem inadequate to address the issue.321 This is possibly because the tension between resilience and efficiency322 can even exacerbate the problem.323

Many triggers could start such a failure cascade, such as the infrastructure damage wrought by a coronal mass ejection,324 an ongoing cyber conflict, or a milder form of some of the risks presented in the rest of the paper. Indeed the main risk factor with global systems collapse is as something which may exacerbate some of the other risks in this paper, or as a trigger. But a simple global systems collapse still poses risks on its own. The productivity of modern societies is largely dependent on the careful matching of different types of capital325 (social, technological, natural...) with each other. If this matching is disrupted, this could trigger a “social collapse” far out of proportion to the initial disruption.326 States and institutions have collapsed in the past for seemingly minor systemic reasons.327 And institutional collapses can create knock-on effects, such as the descent of formerly prosperous states to much more impoverished and destabilising entities.328 Such processes could trigger damage on a large scale if they weaken global political and economic systems to such an extent that secondary effects (such as conflict or starvation) could cause great death and suffering.

3.1.5.2 Probability disaggregation

Five important factors in estimating the probabilities of various impacts:

1. Whether global system collapse will trigger subsequent collapses or fragility in other areas.

2. What the true trade-off is between efficiency and resilience.

3. Whether effective regulation and resilience can be developed.

4. Whether an external disruption will trigger a collapse.

5. Whether an internal event will trigger a collapse.

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1. Increased global coordination and cooperation may allow effective regulatory responses, but it also causes the integration of many different aspects of today’s world, likely increasing systemic risk.

2. Systemic risk is only gradually becoming understood, and further research is needed, especially when it comes to actually reducing systemic risk.

3. Since systemic risk is risk in the entire system, rather than in any individual component of it, only institutions with overall views and effects can tackle it. But regulating systemic risk is a new and uncertain task.

4. Building resilience – the ability of system components to survive shocks – should reduce systemic risk.

5. Fragile systems are often built because they are more efficient than robust systems, and hence more profitable.

6. General mitigation efforts should involve features that are disconnected from the standard system, and thus should remain able to continue being of use if the main system collapses

7. A system collapse could spread to other areas, infecting previously untouched systems (as the subprime mortgage crisis affected the world financial system, economy, and ultimately its political system).

8. The system collapse may lead to increased fragility in areas that it does not directly damage, making them vulnerable to subsequent shocks.

9. A collapse that spread to government institutions would undermine the possibilities of combating the collapse.

10. A natural ecosystem collapse could be a cause or consequence of a collapse in humanity’s institutions.

11. Economic collapse is an obvious and visible way in which system collapse could cause a lot of damage.

12. In order to cause mass casualties, a system collapse would need to cause major disruptions to the world’s political and economic system.

13. If the current world system collapses, there is a risk of casualties through loss of trade, poverty, wars and increased fragility.

14. It is not obvious that the world’s institutions and systems can be put together again after a collapse; they may be stuck in a suboptimal equilibrium.

15. Power grids are often analysed as possible candidates for system collapse, and they are becoming more integrated.

16. The world’s financial systems have already caused a system collapse, and they are still growing more integrated.

17. The world’s economies are also getting integrated, spreading recessions across national boundaries.

18. The world’s political and legal systems are becoming more closely integrated as well. Any risk has not been extensively researched yet, and there remain strong obstacles (mainly at the nation state level) slowing down this form of integration.

19. The politics of the post-system collapse world will be important in formulating an effective response instead of an indifferent or counterproductive one.

20. System collapses can be triggered internally by very small events, without an apparent cause.

21. External disruptions can trigger the collapse of an already fragile system.

22. The trade-off between efficiency and resilience is a key source of fragility in a world economy built around maximising efficiency.

23. Climate change, mass movements of animals and agricultural mono-cultures are interlinking ecosystems with each other and with human institutions.

24. There is a lot of uncertainty about systemic risk, especially in the interactions between different fragilities that would not be sufficient to cause a collapse on their own.