We were joined by Joerg Tremmel, Editor-in-Chief of the Intergenerational Justice Review, Clare Moriarty, Permanent Secretary at the UK Government’s Department for Environment, Food & Rural Affairs (Defra), and the IFoA’s own Louise Pryor, who is Chair of the Resource and Environment Board. The central question for discussion was how we might bring more long-term thinking into policymaking, to manage risks and uncertainties that transcend generations, and what this would mean for democracy today.
Joerg kicked off by pitting the actuaries in the room against a profession of much longer-term thinkers: geologists. We know actuaries are accustomed to dealing with long-term time horizons, but these pale in comparison with the millennia under consideration by geological epochs. The current buzzword in geological circles is the ‘Anthropocene’. This is the geological timeframe in which some argue we are currently existing, which reflects the relatively recent history of the earth’s ecosystems being significantly impacted by human activity – think mass extinctions of plant and animal species, oceanic pollution and changes to the composition of the atmosphere.
In this new epoch, do we need new political institutions to reflect the lasting impact that the human race is having on the earth, now and into the future? Joerg defined this in terms of the way our political leaders react to changing times:
The difference between a politician and a statesman is that the politician thinks about the next election while the statesman thinks about the next generation. In the Anthropocene, the need for more statesmen is imperative.
The climate is arguably an area where longer-term thinking has been allowed to flourish. In recent years, you could say that climate change has become one of the few ‘mainstream’ long-term risks. For most people in the developed world, at least some of the potential impacts of climate change are well understood, and are increasingly becoming part of the national conversation. And in the developing world some of the consequences of these risks are already showing themselves.
It is no surprise then that we were given a range of examples where Defra, a department focused heavily on the natural environment, already incorporates long-term considerations into its work, and why it feels that much of its work in considering environmental impacts of policy leads to thinking about how decisions might play out over longer time horizons. The Thames 2100 project for example, is based on climate change modelling looking into the next century. And on an international level, the Paris Agreement, while the true impact of which is yet unproven, represents a global effort to make substantive policy changes in the interests of future generations.
Clare Moriarty also provided the example of Patrick McLoughlin MP, who as a junior minster in the Department for Transport in 1989, was involved in the planning for Crossrail, which was only being constructed when he returned to the Department as Secretary of State in 2012. The first travelers on the new Elizabeth Line will be at least one generation on from those who dreamt it up.
So there are some success stories, and examples of policies made with long time horizons in mind. But there is still a basic conundrum which lies at the heart of this decision-making process, which is how to convince the current generation to pay a cost in the short term when the benefits will be realised only by future generations.
All of this will of course be nothing new to actuaries. Understanding the long- term implications of decisions made today is at the heart of actuarial science. And we think these skills could be utilized more broadly by policymakers to help them make better decisions. Louise for example told us
I rarely talk about expected outcomes to my clients – I try talk about possible outcomes, and give some idea of how possible they are. And it’s possible outcomes that policymakers should be thinking about in the context of the long term.
We also discussed a number of ideas for reform, which could help to bring these concepts into decision-making in a more tangible way. The IFoA will be exploring these in more detail throughout 2018. If you have any ideas or want to contribute towards this work please get in touch using Policy@actuaries.org.uk.
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As part of the ARC Webinar Series 2021, this webinar will review the work of the UEA/Aviva research team over the last four years on a major research programme funded by the IFoA’s Actuarial Research Centre.
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