Only human, after all

Emmanuel Macron’s problems are more with presentation than policy

But he can still save his presidency

IT IS A long way down from Mount Olympus. Last year Emmanuel Macron strode into power with a mandate to reform France. This week France looked unreformable. The streets of Paris have been littered with burned-out cars and glass from smashed shop windows. Parts of the countryside are paralysed, as protesters in high-visibility yellow jackets obstruct roads and blockade fuel depots. Policy U-turns are making Mr Macron look as weak as all his recent predecessors who tried to change this most stubborn of nations. The man who once promised a “Jupiterian” presidency is looking decidedly mortal.

Mr Macron’s election in May 2017 seemed to herald new optimism about France, Europe and the world. Young, intelligent and bubbling with ideas to make France more open, dynamic and fiscally sober, he gave an eloquent rebuttal to the drawbridge-up nostalgia of Brexit Britain, Donald Trump’s America and the autocracies of eastern Europe. The hope for a broad renewal of the radical centre came to rest on his shoulders.

When this new party, a band of political newcomers powered by social media, won a thumping parliamentary majority, the Macron revolution seemed unstoppable. He swiftly passed long-needed reforms to make the labour market more flexible, working with moderate unions and facing down obstreperous ones. His education reforms offered smaller classes in poor areas and greater citizens’ control over training. The budget was knocked into shape, meeting the Maastricht deficit limit of 3% of GDP for the first time since 2007.

Yet along the way, Mr Macron forgot that a French president is neither a god nor a monarch but merely a politician in a democracy that requires the constant forging of consent. His hauteur has led to a series of individually small but cumulatively destructive missteps—scolding a teenager for calling him “Manu” instead of “Monsieur le Président”, summoning parliament to be lectured at the palace of Versailles, talking of “people who are nothing”.

Mr Macron also seems to have forgotten that, in the first round of last year’s election, 48% of voters were so unhappy that they backed extremists: Marine Le Pen on the nationalist right, Jean-Luc Mélenchon on the left and half-a-dozen less charismatic radicals. Those voters have not gone away. So it was unwise of the new president to antagonise the left-behind carelessly. One of his first moves was to slash taxes on wealth. The old wealth tax was inefficient, incentive-sapping and often avoided. But its removal should have gone side-by-side with more help for the hard-up. Likewise, his tax rises on diesel are a sound green policy, but he should have paid more attention to the people they hurt most—struggling rural folk who need to drive to work. The most damaging label that has stuck to the former banker is that he is “the president of the rich”.

Many French people believe this, which is perhaps why around 75% say they support the gilets jaunes protesters. Like Mr Macron’s election campaign, the protesters are organised via social media. Unlike it, they are leaderless and lack a coherent agenda, so they are almost impossible to negotiate with. The clashes already look to be the worst since les évènements of 1968.

Mr Macron will now be banking that his decision, on December 5th, to cancel the diesel tax rises “for the year of 2019”, will take the heat out of the conflict. This seems unlikely; for a start, the protests have in part now been hijacked by thuggish extremists with an interest in the violent overthrow of capitalism. Many of even the moderate gilets jaunes are demanding Mr Macron’s resignation, or a new parliament. And an earlier diesel tax rise which went into effect last January, has not (yet) been reversed.

Only human after all

The government’s reaction could backfire horribly. It may not be enough to draw the sting from the protests. But, by giving ground at all, it may show that Mr Macron can be pushed around by mobs on the streets, thus encouraging more mobs to form. There is pressure on Mr Macron to bring back the wealth tax; and further reform now looks much less likely than it did. Yet there is plenty of hard work still to do; the next overdue project that Mr Macron plans to tackle is France’s unaffordable pension system.

Does all this mean that have-your-cake-and-eat-it populism must triumph, and that reformers will always be thwarted? It is depressingly easy to conclude so. Mr Trump has won the support of his base by offering Americans tax cuts that are not affordable in the long term. In Italy the all-populist ruling coalition promises to lower the pension age that a more prudent predecessor raised, while also offering deep tax cuts. Even Vladimir Putin did not have the courage to face down Russian pensioners this year.

All is not lost for Mr Macron. He could help himself in several ways. First, he should demonstrate where his priorities lie. It will be expensive, but some form of earned-income tax credit is needed: a proper wage subsidy for the low-paid that enhances their incentive to work, rather than draw the dole. (One exists already, but it is too small. Mr Macron has promised to beef it up, but only slowly.) That should have gone hand in hand with scrapping the wealth tax. Second, he and his government need to do more to promote and explain the good things they have already done but which are underappreciated—such as the investment in apprenticeships, or the moves that will make it more likely that businesses will hire young people on long-term contracts. The unemployment rate is down by half a percentage point, though still much too high at 9.1%.

And third, Mr Macron himself needs to change. His notion that the French want their president to be aloof and Jupiterian is misguided. As our chart shows, the most popular French president of recent times was the least remote—Jacques Chirac, a beer-swilling, heavy-smoking mec with a twinkle in his eye. In an age where populists will do and say anything, a politician who cannot persuade ordinary people that he or she understands them, likes them and wants to help them will struggle to get anything done. It will not take superhuman powers to reform France—just the very human ones of patience, persuasion and humility.

Markets predictions: 2019 to bring new level of uncertainty

Strategists give their forecasts on what could happen to equities, gold, cash and securities

Robin Wigglesworth

Markets appear to be entering a new, more uncertain phase

Danish physicist and Nobel laureate Niels Bohr famously quipped that “prediction is very difficult, especially if it’s about the future”. But as 2018 enters its final stretch, Wall Street’s analysts are once again dusting off their crystal balls and attempting to map out what the coming year will look like.

An always tricky task is now nearly impossible. Economists and analysts are actually reasonably good at getting the general direction correct, but awful at anticipating turning points. And as 2018 showed — with virtually every major asset class heading for a loss — markets appear to be entering a new, more uncertain phase. Is 2019 the year when the post-crisis bull run falls completely apart?

“All good things eventually come to an end. But when? Answering this question represents the fundamental 2019 investment challenge for portfolio managers,” David Kostin, chief US equity strategist at Goldman Sachs, wrote in his annual outlook.

Big picture: the median forecast of strategists polled by Bloomberg indicates the US economy will grow 2.6 per cent in 2019, while the S&P 500 will end the year at 3,090 points, with the 10-year Treasury yield at 3.44 per cent. Pretty much everyone expects the dollar to weaken next year, as the Fed interest rate cycle peaks.

But diving into the details of the outlook reports, there are some more interesting predictions. Here are some of them.

Return of the bear

Most analysts, even bearish ones such as Morgan Stanley’s Mike Wilson, think the S&P 500 will end 2019 higher than its current level. But Société Générale’s 2,400-point end-2019 prediction — and for a recession by the first half of 2020 — stands out as the most negative one by far.

It implies another 10 per cent drop from the current level, which would mean a bear market for US equities (typically defined as a 20 per cent drop from the recent high). “We expect a more restrictive monetary policy to push equity valuations lower, while political gridlock and trade tensions will likely be a source of volatility,” SocGen said in its outlook, fittingly illustrated by a waving grizzly bear.

But SocGen is also gloomy on European equities — eyeing another 8 per cent drop to take the Euro Stoxx 50 into a bear market — thinks Japanese equities will tread water and forecasts that the FTSE 100 will tumble by another 14 per cent.

Gold regains its glitter?

Gold bugs have had a frustrating year, as a splurge of Treasury issuance has failed to shake faith in the greenback, and a the strong economy and the Fed’s rate increases have sucked in money from abroad. This has led gold to shed almost 5 per cent of its dollar value in 2018 to trade at about $1,240 per troy ounce.

But both JPMorgan and Bank of America reckon a renaissance is coming, as the US central bank slows its rate increases and financing the US deficit becomes more challenging. BofA sees gold appreciating a modest 5 per cent, but JPMorgan predicts a juicier 15 per cent return, “as US real rates peak and focus turns to financing the US’s twin deficits when the Fed cycle is near an end”.

Inflation in the nation

Most analysts expect US inflation to stay subdued in 2019. The core “personal consumption expenditures” price index — the Fed’s preferred inflation measure — is expected to tick up from 1.9 per cent to 2.1 per cent next year, but some strategists fret that this is complacent.

Macquarie expects core PCE to accelerate a touch faster, to 2.2 per cent in 2019, and warns that even this may be too low an estimate, given the danger of tariff costs being passed on to consumers, a weaker dollar, rising natural gas prices, spendthrift fiscal policy and the labour market reaching a “pinch point” that causes wages to shoot higher.

Given how sensitive financial markets have proven to any hint of accelerating inflation this year, this could be the still-unlikely but most dangerous risk to watch in 2019.

A value renaissance?

Cheap, stolid “value” stocks have been left in the dust by racier “growth” stocks since the financial crisis, but Morgan Stanley reckons that 2019 will see “a major leadership change occurring from growth to value which could be more long-lasting than most appreciate”, pointing to their relatively low prices and how growth stocks are more sensitive to higher bond yields.

After a long bout of underperformance, which by some measures stretches back decades, this is an out-of-consensus call by Morgan Stanley’s analysts. As they noted in a follow-up report: “While pushback wasn’t overwhelming, clients didn’t exactly embrace our views, with the least support for value over growth and international stocks outperforming the US.”

Securitised shocker

The alphabet soup of securitised bonds has done fairly well in 2018, especially products such as collateralised loan obligations and floating-rate asset-backed securities, which benefit from rising Fed interest rates.

However, BofA reckons that the poor performance of “agency” mortgage-backed securities created by Fannie Mae or Freddie Mac — which have faced headwinds from the Fed shedding MBS from its balance sheet — could be a “harbinger of what’s to come in other securitised sectors in 2019”.

“Chances are good that 2019 ultimately sees a major blowout in securitised products spreads,” the bank’s analysts wrote in their outlook. “The key driving factors we see are macro in nature: continued monetary policy tightening, in the form of rate hikes and accelerated balance sheet wind down, further trade war escalation, fading fiscal stimulus and slowing home price growth due to affordability constraints.”

King Cash

Cash has been one of 2018’s surprise performers, with the returns from Treasury bills beating broad bonds and equity and commodity indices — an exceptionally unusual occurrence. Many investors point out that this happening two years in a row is almost unheard of, but JPMorgan warns that they should gird themselves for disappointment once again.

JPMorgan’s chief cross-asset strategist John Normand sees returns of plus or minus 1 per cent for most asset classes, but thinks rising US interest rates will mean that cash will return 2.8 per cent in 2019. Goldman Sachs predicts cash returns will hit 3 per cent. Rate increases from all developed country central banks will also lift global cash returns from zero in 2018 to 1 per cent next year, JPMorgan forecasts.

However, that will weigh heavily on developed market bonds, and inflict another 2.4 per cent loss on investors. That would be the first consecutive yearly loss for bonds since modern bond benchmarks began in the early 1970s.

Size matters

Smaller US company stocks have been pummelled lately, tumbling more than 15 per cent since their summer high to underperform the “large-cap” S&P 500, despite being in theory more immune to any deepening trade wars.

Deutsche Bank’s chief US strategist Binky Chadha reckons this is way overdone, pointing out that small-caps are now pricing in a sharp US economic slowdown and are unusually cheap compared with large-caps. Given the relative positioning — traders are now net short the Russell 2000 small-caps index but long the S&P 500 — he recommends investors look for opportunities there instead.

Tracing the Origins of Venezuela’s Crisis

By Allison Fedirka

Just over a month from now, on Jan. 10, Nicolas Maduro is scheduled to be sworn in again as president of Venezuela. The occasion won’t be without controversy – some 50 countries failed to recognize the elections in May that set Maduro up for another term in office – raising familiar questions about his government’s staying power. For the past year, Maduro’s administration has appeared to be hanging on by a thread, and Venezuela’s various crises show no sign of abating.
It is, by now, an all too familiar story, that of the country’s seemingly inexorable slide deeper and deeper into chaos. Low oil prices are the scapegoat most commonly assigned to the country’s recent decline. The narrative explains how the economy can now be on the brink of collapse after flourishing for years under high oil prices, but it fails to account for all of Venezuela’s problems. The price of oil does little to explain, for example, the degradation of the country’s institutions, the tenacity of its despotic leadership or the lack of a united opposition despite the public’s resounding rejection of the government. To understand these phenomena, one must first understand the structural design that has been in place since the earliest days of modern Venezuela’s existence. The centralized power, military presence, weak institutions and economic overreliance on commodities that characterize current government are not unique to it. Rather, they are rooted in Venezuela’s colonial past and early years of independence. This Deep Dive examines the interplay between these factors that has dictated the behaviors and actions of governments past and present.
A Strongman’s Game
Venezuela’s precedent for totalitarian rule long predates Maduro or his predecessor, Hugo Chavez. In fact, in its nearly two centuries of existence, Venezuela has functioned as a modern, Western-style democracy for only 40 years, from 1959-1999. (Though Chavez won power in democratic elections in 1998, his presidency brought a decisive end to the period of democracy.) More often, the country has operated under a strong central government led by a single individual empowered through a patronage network, an idea that traces back to the caudillo system in the colonial period.
Caudillos were affluent men who owned or oversaw production on land and rejected Spanish rule. Because they were too few in number to fight on their own, they used their elite social status to enlist the help of the lower classes, whom they organized and led as militias against Spanish troops. The tradition continued even after Venezuela won its war for independence. Without their Spanish overlords or a reliable national government to provide security, local landowners established patronage systems and local fighting forces, which they used to seize control of assets, such as customs houses, and territory. The most successful caudillos became generals in their militias and could project power beyond their region to compete on a national level.
The caudillo system reinforced the need for a strong centralized government in Venezuela and gave rise to the dozen or so revolutions in the country’s history. The constant jostling for ascendancy made the caudillos in power, and those aspiring to it, vulnerable to attack. At the same time, the system’s emphasis on regionalism made it difficult for leaders in one area to secure buy-in elsewhere in the country. Maintaining power required a firm hand. Still, schisms and shifts in allegiance were common, and when an opposition group wanted to challenge the government for power, a revolution broke out. Strongmen rulers rose and fell in this way, for much of the country’s history. (A push for decentralized power among the caudillos led to civil war in the mid-19th century, followed by a brief period of federalism in the 1860s.) Even Venezuela’s first attempts at democracy began with an uprising, known as the October Revolution of 1945. Chavez’s Bolivarian Revolution in 1999 built on this tradition – and today Maduro draws on that legacy through his rhetoric and invocations of the now-idolized late president.
Institutional Deficiencies
With this kind of turnover in the government, Venezuela has struggled to build firm and enduring institutions. Many dictators have managed it during their tenures, but usually by exerting strong influence over government institutions, which, as a result, were not accountable to the public. Furthermore, these institutions typically have lasted only as long as the government that put them in place. It became the norm in Venezuela that a revolution or major political transition would usher in a new constitution engineered by the new administration to suit its aims. Since independence, the country has had 27 different constitutions, the most recent of which came about in 1999, under Chavez. What institutions have emerged in Venezuela have rarely had a chance to take root, much less flourish.
Part of the challenge is the patronage system that has underpinned nearly all of Venezuela’s rulers, from the caudillos to Maduro. Throughout Venezuela’s history, leaders have incentivized loyalty among their constituents and officials by offering them various rewards. The practice has made corruption a rampant problem in the country. It has also made organizing political movements around issues difficult, since people are accustomed to looking not for the candidates who best represent their beliefs or concerns but for those who can give them the best deals. In the latter half of the 20th century, those deals centered on agrarian reform, public works in poor urban neighborhoods and military funding. Maduro has adapted to Venezuela’s current economic difficulties by offering followers preferential access to food and U.S. dollars and by allowing pro-government armed groups to operate in the country. The trouble, of course, is that if government revenue drops off and the country’s leaders don’t have enough money to subsidize their supporters, their fortunes can quickly turn.
Hooked on Commodities
And in Venezuela, government income depends largely on commodities prices – its economy has centered on commodities exports from the very start. Colonies like Venezuela served two purposes for the Spanish crown: to provide raw materials to feed nascent industry back home and to buy up Spain’s finished goods. To ensure that its needs were served, Spain restricted colonial trade, first limiting the colonies to trade with only Spain and then permitting them to trade with one another as well. So it was that coffee, cacao, sugar, tobacco and leather became the mainstays of Venezuela’s economy.
The pattern continued even after Venezuela won its independence, only with new trade partners. The United Kingdom and other European powers, eager to hasten the Spanish Empire’s decline, had funded Venezuela’s efforts against Spain, offered it flexible financing to promote economic recovery in the conflict’s aftermath, and opened trade with Venezuela. But the basis of their trade was the same exchange of raw materials for finished goods that Venezuela had had with Spain. In addition, the foreign financial assistance put Venezuela into debt, which continued to grow because of servicing costs and rollovers, along with the country’s attempts to modernize its agricultural sector. When commodity prices dropped – particularly for coffee as Brazil increased production – they set off Venezuela’s first major debt crisis in 1903. The discovery of oil reserves in the country a decade or so later alleviated its debt problem and gave Caracas a robust new source of revenue. In other words, the government found a new commodity to hitch the economy to.
Commodity price fluctuations have plagued Venezuela ever since, causing recurring debt crises. When oil prices are low, the government borrows to cover its costs; then in more prosperous times, it devotes much of its revenue to paying down its debts and fortifying its pillars of support. (During an oil boom in the 1970s, for example, Caracas focused its public spending on educational programs related to the oil industry.) This leaves the government with little money to invest in developing other areas of the economy, thereby perpetuating the cycle.
The combination of low commodity prices and mounting debt has been the downfall of numerous administrations over the years. Commodity dependence makes any government vulnerable to market forces beyond its control. But that goes double for the Venezuelan government, since it derives much of its legitimacy from the patronage system. A crash in coffee prices in the 1830s and 1840s brought down the administration of President Jose Antonio Paez, a hero of Venezuela’s war for independence. A similar fate befell President Rafael Caldera in the 1990s, when lower oil prices and higher debt levels sapped the popular support that had won him a second term in office, paving the way for Chavez’s rise to power. And today, Maduro – who assumed the presidency in 2013, just a year before global oil prices tanked – finds himself in the same position. Languishing oil prices, coupled with high debt, will eventually be his undoing.

Defending the Government
In the meantime, Maduro is drawing on his ties with the military to maintain his grip on power – a time-honored tradition among Venezuela’s leaders. The bond between the country’s government and military, like its commodity dependency, also goes back to colonial times. Having conquered local forces and rival powers for control of Venezuela, Spain crafted a military-centric administrative structure for the territory to defend it and its resources against the many foreign competitors in the surrounding area. High-ranking generals took control of the territory in 1777, when Venezuela gained autonomy as a captaincy, and, after independence, the military continued to play a prominent role in the country. Most caudillos had at one time been commanding officers in the armed forces. Since then, plenty of leaders have turned to the military to help keep or restore order. Gen. Juan Vicente Gomez Chacon, for instance, depended on security forces to suppress the roughly 20 armed domestic rebellions he faced while in power. President Romulo Betancourt, likewise, had to rely on the military to repel attacks from leftist guerrilla groups even during Venezuela’s democratic phase. And Chavez came to power after a career in the military.
Though Maduro never served in the military, he has aligned himself with it and stayed close to it. He selected Vladimir Padrino Lopez, an officer loyal to Chavez, as his defense minister on taking office and has made sure to share the spoils of power with the security forces to ensure its support for his government. Over the course of his administration, Maduro has extended the military’s reach by giving it prominent roles in areas such as the energy sector and food distribution programs. He also has turned a blind eye to its illicit activities, including drug trafficking. In return, Maduro has used the military’s intelligence branch to imprison opposition leaders and suspected dissidents among the security forces. If the president’s favor hasn’t been enough to eliminate dissent in the armed forces, it has at least kept the military largely invested in the Maduro administration’s survival.
What Comes Next
Even so, the end of Maduro’s tenure is inevitable. Geopolitics tells us that, based on the forces and realities the president is up against, his days are numbered – at this point, even a sudden spike in oil prices wouldn’t necessarily save him. When and how his government meets its end is harder to say, but history may serve as a guide. Venezuela’s past is replete with examples of fallen governments and the many causes of their demise.
Civilian-military coups have spurred government transitions on multiple occasions. Indeed, in 2017, brewing dissent in the security forces prompted the government to crack down on military personnel who broke rank. But Venezuela’s opposition is too divided to overthrow the government, despite its efforts to unify, thanks to infighting and institutional defeats. Each party in the opposition, like any other coalition, has its own views on the government’s ideal end state and is reluctant to subjugate them to those of another group. The daylight between conservative and liberal factions in the opposition has led to power vacuums and political chaos in the wake of even successful coups, such as the ouster of the Monagas brothers in 1858. The opposition in contemporary Venezuela, moreover, has struggled to wrest power from Maduro under better circumstances – like when it won a majority in the National Assembly in late 2015. (Parliament, after all, is only one of five branches of Venezuela’s government, and the rest are still firmly under the president’s control.) Having run itself ragged with public protests and fruitless dialogue with Maduro and his supporters, the opposition took a break over the past year to regroup. It’s expected to resume its protests in January, and if it pulls together, it may yet be able to push for a democratic transition.

Otherwise, any number of contingencies could bring Maduro down. Someone could seize power while he’s out of the country, for example, though the president’s several recent trips abroad suggest he’s not sweating that possibility. Direct foreign intervention also seems unlikely. And while Colombia and the United States will continue to increase pressure on the Venezuelan government through sanctions, doing so probably won’t be enough to cause its collapse, unless they take direct aim at state oil company Petroleos de Venezuela. Instead, the eventual power transition in Caracas is liable to be a domestically driven affair. There is even the possibility that the current administration eventually comes around to orchestrate its exit and set the stage for a new government, as longtime Spanish dictator Francisco Franco did before his death and as the Brazilian military junta did before ceding power in 1986.

When a new government does take over in Venezuela, it will have its work cut out. The next administration will need to rebuild from the ground up, a task that may prove an opportunity to break the patterns that have shaped Venezuela’s government for most of its history. That it spent four decades as a democracy – the result of various political factions uniting to overthrow an authoritarian government and to rule instead by coalition – suggests Venezuela is not predestined for dictatorship. Breaking old habits and establishing new ones isn’t easy, but neither is it impossible, as countries such as South Korea, which managed to industrialize its economy decades after major Western countries had done so, can attest.

Institutions wax and wane over time. Even those that seemed infallible at one point in history, like the English monarchy or the Argentine military, invariably give way to others. These processes take time and effort, of course, and just as many countries fail at them as succeed. Nevertheless, these are the big pictures issues that will help determine Venezuela’s future.

sábado, diciembre 15, 2018



Is Fake News Here to Stay?

Experience from European elections suggests that investigative journalism and alerting the public in advance can help inoculate voters against disinformation campaigns. But the battle with fake news is likely to remain a cat-and-mouse game between its purveyors and the companies whose platforms they exploit.

Joseph S. Nye

computer hacker

CAMBRIDGE – The term “fake news” has become an epithet that US President Donald Trump attaches to any unfavorable story. But it is also an analytical term that describes deliberate disinformation presented in the form of a conventional news report.

The problem is not completely novel. In 1925, Harper’s Magazine published an article about the dangers of “fake news.” But today two-thirds of American adults get some of their news from social media, which rest on a business model that lends itself to outside manipulation and where algorithms can easily be gamed for profit or malign purposes.

Whether amateur, criminal, or governmental, many organizations – both domestic and foreign – are skilled at reverse engineering how tech platforms parse information. To give Russia credit, it was one of the first governments to understand how to weaponize social media and to use America’s own companies against it.

Overwhelmed with the sheer volume of information available online, people find it difficult to know what to focus on. Attention, rather than information, becomes the scarce resource to capture. Big data and artificial intelligence allow micro-targeting of communication so that the information people receive is limited to a “filter bubble” of the like-minded.

The “free” services offered by social media are based on a profit model in which users’ information and attention are actually the products, which are sold to advertisers. Algorithms are designed to learn what keeps users engaged so that they can be served more ads and produce more revenue.

Emotions such as outrage stimulate engagement, and news that is outrageous but false has been shown to engage more viewers than accurate news. One study found that such falsehoods on Twitter were 70% more likely to be retweeted than accurate news. Likewise, a study of demonstrations in Germany earlier this year found that YouTube’s algorithm systematically directed users toward extremist content because that was where the “clicks” and revenue were greatest. Fact checking by conventional news media is often unable to keep up, and sometimes can even be counterproductive by drawing more attention to the falsehood.

By its nature, the social-media profit model can be weaponized by states and non-state actors alike. Recently, Facebook has been under heavy criticism for its cavalier record on protecting users’ privacy. CEO Mark Zuckerberg admitted that in 2016, Facebook was “not prepared for the coordinated information operations we regularly face.” The company had, however, “learned a lot since then and have developed sophisticated systems that combine technology and people to prevent election interference on our services.”

Such efforts include automated programs to find and remove fake accounts; featuring Facebook pages that spread disinformation less prominently than in the past; issuing a transparency report on the number of false accounts removed; verifying the nationality of those who place political advertisements; hiring 10,000 additional people to work on security; and improving coordination with law enforcement and other companies to address suspicious activity. But the problem is not solved.

An arms race will continue between the social media companies and the states and non-state actors who invest in ways to exploit their systems. Technological solutions like artificial intelligence are not a silver bullet. Because it is often more sensational and outrageous, fake news travels farther and faster than real news. False information on Twitter is retweeted by many more people and far more rapidly than true information, and repeating it, even in a fact-checking context, may increase an individual’s likelihood of accepting it as true.

In preparing for the 2016 US presidential election, the Internet Research Agency in St. Petersburg, Russia, spent more than a year creating dozens of social media accounts masquerading as local American news outlets. Sometimes the reports favored a candidate, but often they were designed simply to give an impression of chaos and disgust with democracy, and to suppress voter turnout.

When Congress passed the Communications Decency Act in 1996, then-infant social media companies were treated as neutral telecoms providers that enabled customers to interact with one other. But this model is clearly outdated. Under political pressure, the major companies have begun to police their networks more carefully and take down obvious fakes, including those propagated by botnets.

But imposing limits on free speech, protected by the First Amendment of the US Constitution, raises difficult practical problems. While machines and non-US actors have no First Amendment rights (and private companies are not bound by the First Amendment in any case), abhorrent domestic groups and individuals do, and they can serve as intermediaries for foreign influencers.

In any case, the damage done by foreign actors may be less than the damage we do to ourselves. The problem of fake news and foreign impersonation of real news sources is difficult to resolve because it involves trade-offs among our important values. The social media companies, wary of coming under attack for censorship, want to avoid regulation by legislators who criticize them for both sins of omission and commission.

Experience from European elections suggests that investigative journalism and alerting the public in advance can help inoculate voters against disinformation campaigns. But the battle with fake news is likely to remain a cat-and-mouse game between its purveyors and the companies whose platforms they exploit. It will become part of the background noise of elections everywhere. Constant vigilance will be the price of protecting our democracies.

Joseph S. Nye, Jr., is a professor at Harvard University and author of Is the American Century Over?

Addressing the Inevitable

Preparations Begin for the Climate Change Deluge

Global sea levels are rising steadily as a result of climate change and the IPCC believes the deluge has already begun. What will it mean for humankind? And what changes will this bring to our coasts and our way of life? By DER SPIEGEL Staff

Flooding on St. Mark's Square in Venice Oct. 30

   Flooding on St. Mark's Square in Venice Oct 30 /

A few weeks ago, Ioane Teitiota, a resident of the island nation of Kiribati, climbed into a fishing boat with six other men for a trip to visit relatives in London, Paris and Poland. The passage took eight days, and when they arrived, London, Paris and Poland were virtually empty.

The three settlements on Kiribati's eastern atoll Kiritimati were once given those names by the British explorer James Cook. And now, London, Paris and Poland are halfway submerged. The strip of land has become so narrow that waves rolling in from one side crash into the sea on the other.

The dikes, the mangrove breakwaters and the cement walls weren't enough, leading the residents to abandon their homes to the ocean. London, Paris and Poland have gone under.

The country that Teitiota calls home has a population of around 110,000 people who are spread across 32 atolls and an island, small dots in the vast blue ocean that are distributed across an area as large as India. The country's average altitude isn't even 2 meters above sea level.

Fourteen-thousand kilometers away from Teitiota's fishing boat, on the other side of the world, London, Paris and Gdansk are located safely and securely above sea level. It is a completely different world. There is, in fact, only one thing connecting Europe's coastal cities with the Pacific atoll of Kiritimati.

The sea.

There is only one of them. It is the same water in Miami, Shanghai or the North Sea island of Hallig Hooge. And the sea is rising. Nobody knows for sure how quickly or how high the ocean level might ultimately become. But rise it will.

On Monday, the United Nations Climate Change Conference began in the Polish city of Katowice, the focus of which is the implementation of the Paris Agreement -- following a summer of possibly record-breaking droughts and extreme hurricanes.

Three years ago, the international community agreed in Paris to limit the average global temperature increase to significantly below 2 degrees Celsius relative to pre-industrial levels. But the deluge has already begun. And it won't go away after 150 days like the one in the Bible. This one is here to stay.

It will take millennia for the polar ice caps to completely disappear, and perhaps they never will. But the fact that the sheet of ice covering Greenland is melting and the ice sheets of Antarctica are shifting, their edges breaking off more quickly: All of that can already be measured today.

There is a point of no return for the climate, and that point already lies behind us. The carbon dioxide is already in the atmosphere and it will remain there for longer than human civilization exists. And it will continue to warm the Earth's climate.

It is all really quite simple and follows the laws of physics: Water expands when it warms. Since industrialization, the Earth has warmed by about 1 degree Celsius, with the pace of warming having increased over the last several decades. Without an immediate and significant reduction in greenhouse gas emissions, NASA calculations indicate that an average temperature rise of 1.5 degrees Celsius will have been reached by the middle of this century. A further increase to 3 degrees above pre-industrial temperatures, according to a report compiled by the German Advisory Council on Global Change, would result in sea levels rising by 5 meters (16.5 feet), though it might take hundreds of years for that level to be reached. The uncertainties inherent in such calculations are, of course, significant. But determined action taken by the international community would render such uncertainties superfluous.

Every coastline is in danger of flooding, whether in Kiribati, Manhattan, Dhaka or Rotterdam. We are all, if you will, in the same boat.

     New York Submerged

Memories of vast floods are deeply embedded in human memory. For the Mesopotamians, floods were a punishment, an apocalypse that would swallow up all that was impure. Christians transformed the flood into a kind of global baptism, a vision of hope: Noah didn't sit around bemoaning his fate, he grabbed his tools and started preparing.

Building an Ark

That's what this text is about. Around the world, coastal residents, municipal authorities, urbanists, insurance underwriters and port engineers are hard at work building an ark. They are evaluating such concepts as floating homes and salt-resistant seeds, intelligent dikes and porous roads.

They are wondering whether it really makes sense that a quarter of the 100 busiest airports in the world are fewer than 10 meters above sea level. In Indonesia, they are making plans to move the capital city while the residents of Micronesia are buying land to ensure that they don't disappear. All are looking for ways to escape the water.

But what do we actually know today? What do we expect to happen and when? Who will be hit hardest? What can, what must, be done now? Is it sufficient to rely on technical solutions or do we have to radically change our approach?

A team of eight DER SPIEGEL reporters traveled to New Orleans and Bangladesh, to Venice and the Dutch island of Texel, and to Ioane Teitiota in the Pacific. Not to document the end of the world, but to emulate Noah's dove and its search for an olive branch. To search for models, initiatives, experiments and, ultimately, hope.

South Tarawa (Kiribati), 2 meters above sea level

Wearing nothing but shorts, Ioane Teitiota is lugging sandbags on the beach to stop the water that threatens his life and his country. He heaves them on top of each other, one after the other, constructing a wall together with tree-trunks and leaves in the hopes of protecting all he has from the ocean.

His home is a shack made of boards and bamboo, built in the shadow of a trio of screw pines. His wife, Angua Erika, sits out front in the sand wearing shell earrings and a Coca Cola T-shirt. She sings as she feeds the pigs.

It was once a paradise, says Teitiota, but the sea is angry, as though it has been bewitched. "It forces us to starve, to go thirsty and, in the end, to drown."

He's talking about the contaminated farmland and contaminated drinking water, and of the diseases that are spreading. Behind his home, he points into the stone well which provided them with fresh water for years -- but which now, with the seawater seeping ever further into the groundwater, is nothing but a salty puddle.

He points up into the breadfruit trees and to the palm orchards, from which they used to harvest large, sumptuous nuts, nourishing themselves from the copra, the coconut meat, inside. Now, for kilometer after kilometer along the coast, the leaves in the treetops are brown and dead.

Once he has finished building the protective wall, Teitiota kneels in the sand. He looks to the turquoise lagoon and says a quiet prayer, imploring God to spare his homeland for a bit longer, to keep the great flood away. His hands folded before him, he prays that before the water buries everything, his family might find shelter elsewhere.

Teitiota doesn't know for sure why the water surrounding the island he lives on keeps coming closer, nor has he calculated how much of his beach disappears under the waves each year. He doesn't know how much time he has left before Tarawa sinks beneath the waves for good.

But he has a plan.

Potsdam, 94 meters above sea level

The Potsdam Institute for Climate Impact Research (PIK) can be found on Telegraph Mountain, a terminal moraine deposited here in the last ice age. The institute is one of the world's leading climate change research centers and the way the brick building, with its trio of domes, perches on the hilltop is reminiscent of a spaceship that has just landed. Or perhaps an ark.

It's the right place to go to learn what the future holds. Researchers from PIK have been warning of the consequences of global warming since 1992. They have advised the German government and provided expertise to the European Commission and other national governments. They are part of international boards, panels and working groups.

Their voices are heard. And, sometimes, they are even listened to.

Currently, around 200 climate researchers show up every morning, most of them by bicycle, to switch on their computers and begin producing models, projections and concepts. They write code and draft scenarios highlighting the fragility of our societies and the interconnectedness of global systems. And they come up with possible solutions. Through the half-open office doors, you can see young scientists at their computers and the only clue to the region they are focusing on is provided by a photo on display or the occasional screen saver flitting across the screens: the Ganges Delta, the Amundsen Sea or deep in the granite of Svalbard.

     Miami Submerged

Stefan Rahmstorf was one of the lead authors for the 2007 iteration of the Intergovernmental Panel on Climate Change, which won the Nobel Peace Prize that year. As a professor of physics of the oceans, he has become well-known in Germany and abroad, making frequent appearances at conferences and in the news, interviewed whenever yet another storm washes away yet another bit of the North Sea island of Sylt.

'The Preservation of Human Civilization Is at Stake'

In a quiet yet confident voice, Rahmstorf speaks of the end of the world as we know it. "The preservation of human civilization is at stake, that is true," he says.

Like most of his colleagues, Stefan Rahmstorf's world is one of comparisons: The curves become ever steeper, the amplitudes ever higher, the deviations from the norm ever more extreme.

"Unusually high ... systematic developments ... increasing numbers of extreme weather events:" Such are the phrases repeated over and over again in his presentations. The curves on his slides spike upward from left to right like the profit projections of an asset manager. It is the fever chart of the global climate.

DER SPIEGEL: How high will sea levels rise?

Rahmstorf: In the last 100 years, we have seen a rise of 20 centimeters. We will see that repeat in the next 20 or 30 years. If we quickly limit warming, we could escape in the end with an increase of half a meter. The current U.S. climate report, though, identifies 1 meter as the midrange scenario and 2 meters as the high end.

DER SPIEGEL: What does it depend on?

Rahmstorf: Whether the Paris Agreement is adhered to and average global warming is limited to significantly below 2 degrees Celsius.

DER SPIEGEL: That's not likely.

Rahmstorf: And it depends on how the ice sheet in Antarctica behaves.

DER SPIEGEL: Rather precariously.

Rahmstorf: And it depends on where on the globe you live, on the respective currents and winds. Even if the ocean is essentially the same one everywhere, the same can't be said of land. In some places, the ground is rising, as in Scandinavia, while in others, it is sinking, like along the southern Atlantic coast in the U.S. or along the North Sea.

DER SPIEGEL: What's the big deal with a couple of decimeters more or less?

Rahmstorf: Even just a couple-centimeter rise in the global sea level increases the risks associated with extreme weather events and makes storm surges and hurricanes more dangerous. Just ask the residents of Bangladesh.

Subhdia (Bangladesh), 6 meters above sea level

Rising sea levels don't present an insoluble problem for wealthy countries that can afford to protect their coastlines like the Netherlands and Germany. But Bangladesh is anything but prosperous. It is home to twice as many people as Germany crammed into a space that isn't even half as large. Two-thirds of the country is just a few meters above sea level and the majority of the population lives on the coast.

In the capital city of Dhaka, the ground is paved over in many areas so that water can no longer run off and the drainage system is often clogged up with plastic bags. Additionally, ground water levels are falling, which has meant that the already low-lying city is sinking even further.

When monsoon rains bloat the rivers, up to a quarter of the country floods. And when a dam breaks, villages can remain under water for years at a time. Some schoolchildren in the country have gotten used to wading home through chest-high water with their backpacks on their heads.

The farmers and fishermen make their living from and with the floods and have learned to tell the difference between good ones and bad ones. Good floods water the fields, but bad floods have become more frequent, washing away bridges and houses while driving away humans and animals. The frequency and intensity of flooding in the country will continue to increase. Last year, around 150 people died during the monsoon, with many millions suffering the effects.

When the sea level rises, entire regions could be submerged in 30 years and food production may collapse, forcing millions of people to emigrate.

Dhaka is now home to the International Center for Climate Change and Development, an institute that has begun to advise farmers to raise ducks instead of chickens, to farm fish instead of rice and to collect rainwater because fresh water is becoming scarcer. Years ago, researchers already began developing rice hybrids that can flourish in salt water.

 London Submerged

In the last several years, the country has built more than 2,000 protective shelters along with thousands of kilometers of new dikes. There are floating gardens, hospitals on boats and homes on stilts. Already, Bangladeshis in many areas of the country have long since begun living their lives in the upper floors of their homes because the ground floor is underwater.

Subhdia is located near the coast in the country's southwest, and thus in one of the most danger-prone regions of Bangladesh. Houses on stilts with roofs of straw line the shores. A woman wades through the water dragging a net behind her. Her name is Shulota Mandol, a small, roundish woman with a broad smile. She says she is now 47, the exact same age as her country -- and just as experienced when it comes to dealing with storm surges.

During the monsoon, she says, they hang their pots and rice from the ceiling and elevate the fireplace. They ram bamboo rods into the mud and build bridges, she says, adding that she can't remember a time when she wasn't wet. On one occasion, a storm cracked her house in two; on another, a cyclone took away all the family's possessions. Two years later, a wave -- taller than a man -- rolled through the village and the storm surge took away her house. And then? "Then we rebuilt it, but out of wood this time." Many of the hopes harbored by climate policy experts rest on the resilience of people like Mandol.

Two years ago, though, the Bangladeshi government had an idea along with a bit of money and it commissioned the aid organization Adams to carry out an experiment. They began pumping sediment out of the river and onto the banks, thus reducing the water level.

Since then, Mandol's home and the surrounding villages are all 1 meter higher. When it rains, the water flows off downhill. The chicken coop is on stilts and the outhouse on a block of cement.

Mandol is now able to plant bananas, whereas the trees used to just rot. The temple next to the house is also now elevated. Mandol has sacrificed part of her most valuable possession to her god: a dry bit of land.


Anders Levermann is a climate physicist at the Potsdam Institute and he also teaches at Columbia University. The illustrations that go along with this article are primarily based on his calculations.

DER SPIEGEL: A sea level rise of several meters: Is that what is awaiting us?

Levermann: That's what will happen if we continue on as we have been. But even then, it will only come in a few hundred years. Ultimately, after all, the sea level rise is a question of scale.

DER SPIEGEL: That sounds comforting.

Levermann: But we're talking here about oceans, enormous volumes of water. There is a vast amount of stagnancy involved and stagnancy is slow. Just imagine a sloth. But stagnancy combined with immensity, that is more like a boulder rolling downhill. It starts moving, accelerates, and then it can no longer be stopped. The amount of greenhouse gases we now emit within just a few decades will determine sea levels for many centuries.

DER SPIEGEL: For how long have you known that?

Levermann: In theory, for quite some time. But then there was that Monday in May 2014. That was a shock for me. I just sat there for a half-hour.

On that day, two studies appeared independently of each other about the West Antarctic. One of them had to do with a model while the other presented new measurements. The results were consistent with each other: "Today, we present observational evidence that the (ice sheet) has gone into irreversible retreat," said Eric Rignot of the NASA Jet Propulsion Laboratory and the main author of one of the studies at a press conference. "It has reached the point of no return."

The Potsdam Institute was able to add an important detail.

Levermann: There is no natural stabilization mechanism. The glaciologists had suspected that West Antarctica could destabilize. It was a theoretical possibility. But then these measurements indicated that we had likely already passed beyond that tipping point. For us, it was a holy-shit moment.

Bremerhaven (Germany), 2 meters above sea level

The West Antarctic is ground zero for the rising sea level. As early as the 1970s, the glaciologist John Mercer had warned about the Antarctic ice sheet breaking off. Back then, though, few took him seriously. Today, we know that Mercer's concerns were accurate.

In Germany, the Alfred Wegener Institute for Polar and Marine Research is responsible for studying Antarctica and operates Germany's southernmost workplace, a research station on stilts called Neumayer III. The work done there is coordinated in a building complex in the port of Bremerhaven, located on Germany's North Sea coast. The dikes in Bremerhaven were recently enlarged, which is a direct consequence of what is happening 8,000 nautical miles away in Antarctica -- the same phenomenon that led Ioane Teitiota to construct a wall of sandbags at his island home in the South Pacific. It all has to do with West Antarctica, one of the perhaps decisive motors driving the rise in ocean levels -- one that feels far away, but which has effects close to home.

The glaciologist Angelika Humbert is at home in West Antarctica in a manner of speaking, though she is more familiar with the details of the modeled version than the realities of the continent itself. She got her start in quantum physics, but now her focus is on masses of ice measured in the gigatons. Humbert explains how the planet's ice began shifting and what that has to do with the dike out in front of her institute and how it will soon begin affecting the around 600 million people in the world who live in coastal areas.

Osaka Submerged

It is helpful to imagine West Antarctica as being like a bowl, with the ice inside measuring up to 3 kilometers thick and the bowl's lowest point lying below sea level. The entire bowl is tipped: Inland, the edge of the bowl juts up in the form of a mountain range. But on the other side, the edge doesn't even rise above the surface of the sea. The Circumpolar Current forces relatively warm, salt-rich water over the submerged edge of the bowl, which eats away at the underside of the ice sheet. Pieces of ice break off and float away. More ice flows in from the other side of the bowl.

Until 2012, Antarctica would lose around 76 billion tons of ice per year, roughly twice the volume of Lake Constance. Since then, though, according to a recent report in the magazine Nature, this process has accelerated to 219 billion tons. That means that the ice from Antarctica is responsible for around a quarter of the global rise in the sea level. If the West Antarctic ice sheet were to collapse completely, it would translate into a global rise in ocean levels of more than 3 meters. "The fascinating question is how long it would take for that to happen and whether it would happen completely," says Humbert. "We won't have the 3 meters is 50 years, probably not even in 200 years. But that is the potential that is there."

The speed of these processes is particularly worrisome. "The glaciologists of the 1950s and 60s could never have imagined such a dynamic," Humbert says. "At the Jakobshavn Glacier in Greenland, the speed has tripled, from 5 kilometers per year to 17. That is extremely fast for glaciologists. And the acceleration has taken place within just a few years."

Humbert says she was shocked by her last flight over Greenland: "The loss of ice mass in Greenland has now reached the northeast. You fly over and all you see is a graveyard of icebergs." Last year, a 265-square-kilometer (102-square-mile) iceberg broke off from the Pine Island Glacier in Antarctica and floated out into the Amundsen Sea. Sea levels didn't rise as a consequence because the ice had already been lying on the water. But the glacier could no longer play the role of parking brake for the masses of ice further inland. West Antarctica has begun shifting, and it is a process that cannot be stopped any time soon. "The only thing that can be done is slow it down," says Humbert.


DER SPIEGEL: Humans start something, the dynamic intensifies and at some point, physics takes over.

Rahmstorf: Those are the tipping points. Here at the institute, we have identified around 10 of them.

DER SPIEGEL: For example?

Rahmstorf: The measurable deceleration of the Gulf Stream is one of them, as is the thawing of the permafrost in Siberia. Fellow researchers at the Alfred Wegener Institute have now discovered that rising ocean levels intensify the erosion of permafrost there. Which then releases methane and carbon dioxide.

DER SPIEGEL: Which then warms the planet.

Rahmstorf: It is a self-reinforcing process and can hardly be stopped.

Munich (Germany), 510 meters above sea level

In the insurance industry, natural catastrophes are referred to as "Nat Cats." And for the last 30 years, geophysicist Ernst Rauch has been keeping track of them for the insurance company Munich Re. Something really out of the ordinary has to happen to surprise him. Something like Hurricane Sandy.

When Hurricane Sandy finally left New York behind on the evening of Oct. 30, 2012, everything had changed. Large parts of Manhattan were flooded, subway tunnels were underwater and even the construction site of the 9/11 museum was hit. The power was out, the trains stopped running and Wall Street suspended trading.

A number of factors came together to magnify the storm's destructive power: its sheer strength, the rather unconventional path it followed, the powerful wind front that hit the coast perpendicularly, and a phase of the moon that intensified the storm surge.

But the calamity only reached the dimensions that it did because the sea level had risen over the past decades. At Battery Park on the southern tip of Manhattan, for example, it had risen around 35 centimeters in 93 years, with the trend accelerating. Flood protection was not prepared.

Sandy was a key moment for Ernst Rauch and others in his profession. The deluge had arrived, and it had to be priced in.

Reinsurance companies are the ones that insure insurance companies. They are needed when the risks are so great that they need to be distributed across several sets of shoulders. Last year was the most expensive one yet for insurance companies, with around $135 billion needed to pay for the damage caused in 2017 by such natural catastrophes as hurricanes Harvey, Irma and Maria. The three most expensive years in the industry's history have all occurred in the last 13 years.

Climate change isn't entirely responsible. More people than ever before are living in at-risk areas and their possessions have increased in value. Pointing to the climate, though, does make it easier to convince customers to pay higher premiums. Rauch heads up a team of around 30 scientists who work for the company around the world. Their job is first and foremost that of calculating as precisely as possible the chances that a catastrophe might take place. But secondly, they must put a price tag on the damage that catastrophe might cause. And thirdly, an appropriate premium must be calculated.

For all three of those tasks, there is NATHAN, the Natural Hazards Assessment Network, a digital platform that is constantly fed with information relevant for the climate. NATHAN makes it possible to better identify natural risks -- for every address around the world, down to a precision of 30 meters.

If, for example, you type in "New York, Battery Park," a wide, blue stripe appears around the southern tip of Manhattan showing the area that will likely be underwater in 100 years. The table next to it shows the "Risk Scores," which indicate the likelihood of flooding. The Risk Score for Battery Park is 38 out of 100. By way of comparison, not far from the French Quarter in New Orleans, which was hit hard by Hurricane Katrina in 2005, the Risk Score is 78.


A woman recently called PIK. She wanted to know if she should buy a piece of property in the Berlin suburb of Spandau and said she wasn't sure because of the rising sea level. You hear such crazy things, she said.

And it's true. There are now so many projections, scenarios and counterscenarios that some people haven't been able to keep up. But the UN Intergovernmental Panel on Climate Change (IPCC) is a good place to start for an overview of what is known, what can be known and what should be done as a consequence.

Anders Levermann is one of the 17 scientists belonging to the IPCC's Working Group I, which is responsible for the chapter on oceans and sea level. The IPCC, which is coordinated out of Geneva (390 meters above sea level) is a unique, global effort comparable at most to the Human Genome Project, which mapped the human gene sequence. It is a kind of think tank that issues regular reports on climate change and outlines the current state of knowledge with the greatest possible degree of transparency and with the goal of identifying practical consequences. Currently, IPCC scientists are working on the sixth report, which is being written by 220 leading authors from 60 different countries.

Levermann: First, you write down everything that should appear in the report -- with lots of placeholders because science isn't yet at the level we want to deliver. This "Zero Order Draft" is then sent around to colleagues and commented on. After that, a "First Order Draft" is written, already including graphics.

DER SPIEGEL: Who is allowed to comment?

Levermann: Every scientist can download it and comment. The authors must respond to every comment and each response is made public.

DER SPIEGEL: That must translate to hundreds of comments per chapter.

Levermann: Up to 10,000, yeah. It is a time consuming and stressful process. After that, the "Second Order Draft" is made public, on which anyone can comment.

DER SPIEGEL: And then?

Levermann: In the end, a synopsis of two to three dozen pages is produced, the "Summary for Policymakers." It is reviewed by politicians sentence by sentence, word by word, to make sure that all governments can sign it in the end. No politician, though, can change the actual report.

Part Two
Which Places Do We Want to Protect, and Which Ones Aren't Worth the Trouble?

New York City (USA), 10 meters above sea level

"Sandy" was the kind of storm that doesn't come around very often. In New York City alone, 43 people died, and 90,000 buildings were flooded. The storm caused almost $20 billion in damage.

Once the winds died down and the water receded, the city held crisis meetings, set up working groups and forged ambitious plans. The city council reviewed the flood zone system and changed the building code -- and there was even talk of spending hundreds of millions on flood protection measures. But little has really changed. Indeed, New York is an example of how difficult it is to prepare for something that is improbable and unpredictable.

There are a number of ambitious plans that are still waiting to be implemented. They include an 8-kilometer long storm-surge barrier, the Outer Harbor Gateway, which is to seal off the entirety of New York Bay from the Atlantic. A wall through the sea.

That is the lesson taught by New York: Don't wait for help from the city. Don't merely assume that a major, overarching solution will be found.

Instead, it is up to residents themselves to consider how they can consume less energy at home and produce less CO2. How they can commute in an environmentally friendly way, by bicycle or ferry. How to reduce the burden on the power grid at the local level. And how the city can arm itself against the next flood.

Because the next flood will come. The unprotected regions of the U.S. East Coast are already flooded almost every second day, according to measurements taken by the oceanography authority NOAA. New York City is facing an even greater threat than Miami or Fort Lauderdale.

The Climate Central research group has calculated that in New York alone, almost a half-million people live in an immediate danger zone that could be completely flooded by 2050.

Two of New York's most striking skyscrapers are located just south of the United Nations headquarters, where they rise diagonally into the sky. The copper-clad twin towers with 41 and 48 floors respectively, incline toward each other and are connected at a height of 90 meters by a skybridge.

The towers were still in the planning stages when "Sandy" struck, though the lot had already been excavated to a depth of three meters. The hurricane transformed it into a lake within just a couple of hours. "When we first saw it, you could paddle across in a canoe," recalls Simon Koster, one of the engineers involved. "That's when we knew we had to change our plans."

The solutions might seem obvious, but they are also unusual. In the case of the crooked skyscrapers, the foundation was dug down to a depth of 15 meters and the subterranean floors were sealed. Instead of the emergency power generators that would have been installed here in the past, the below-ground levels are now home to a multistory parking lot that can be sealed off with steel gates.

The building's emergency backup system is located at a safe distance from the water, at a height of 160 meters. The penthouse aerie is filled with five generators, and the walls and windows are lined with banks of electrical switchgear. The 400-kilowatt generators are powered by natural and can supply both towers with electricity without having to tap into the municipal grid.

Each of the 760 apartments inside the building is self-sufficient. The refrigerators will remain running no matter what happens as will a single electrical socket in each apartment. As long as they have food and their smartphones still work, residents don't really need to worry about what happens outside their double-glazed windows.


For centuries, the first thing that came to people's minds in Germany when the water rose was to pour "another scoop of sand on the dike." Today, these barriers are billion-euro miracles of engineering, but the idea behind them is the same.

Levermann: A lot of things are possible. The question is: Which places do we want to protect, and which ones aren't worth the trouble?

DER SPIEGEL: In other words?

Levermann: The Copacabana, Rio de Janeiro's city beach, cannot be protected -- it's too open. Or Miami. The city is built on porous ground, so dikes like the ones you have in Holland won't help much there.

DER SPIEGEL: What about New Orleans, which Hurricane Katrina flooded within just a couple of hours in 2005?

Levermann: New Orleans, with its location in the Mississippi Delta, isn't really suitable for settlement.

DER SPIEGEL: One of the largest and most powerful pumping stations, the Gulf Intracoastal Waterway West Closure Complex, was built there for around $1 billion. An enormous lock gate and 11 pumps, with over 5,000 horsepower each, are operated with diesel. The idea is for the facility to slow down storm surges coming inward from the sea in time, while simultaneously pumping rainwater in the opposite direction.

Levermann: A lot of things can be done with money. Above all, though, the facility is a monument to American optimism. Of course, it's easier to rely on engineers than to learn to live differently.

Venice (Italy), 1 meter above sea level

That is a lesson that humankind is going to have to learn: We won't be able to protect everything. So, what do we give up? Are the Maldives worth the effort? Or the German island of Hallig Hooge in the North Sea? And who gets to decide?

Nowhere is this question as urgent as it is in Venice, and nowhere should it be as easy to answer. In fact, in the watery city of Venice, it quickly becomes clear how difficult it can be to be reasonable, even in a situation where there is both plenty of money and no shortage of good ideas.

Covering just 7 square kilometers that are crisscrossed by 182 canals and connected by 435 bridges, Venice likely has the world's densest concentration of cultural treasures. The place is a miracle in many respects, but unfortunately a damp one given that the city was built at water level and is sinking steadily.

The Venetians are used to flooding. The lagoon swells dozens of times each year, usually by 80 to 100 centimeters, in what Italians call "acqua alta," high water. In an acqua alta of 100 centimeters, St. Mark's Square is covered with 20-centimeter deep water and people are forced to walk around the city in Wellingtons. Rats can be seen scaling Renaissance facades.

Venice is to be preserved for posterity. And in 1989, water engineers came up with a solution. It is called MO.S.E. The "Modulo Sperimentale Elettromeccanico," a barrier for the entire lagoon.

Each of the lagoon's three openings to the Adriatic is to be equipped with floating barriers, 78 in total. When the sea is calm, the barriers will lie on the sea floor; but when the tide gets higher than 110 centimeters, they will be raised.

At the time of the project's planning, the engineers still assumed a global sea level rise of 20 centimeters. Construction began in 2003 and it is still ongoing today. Nobody knows when the flood gates will become operational though the year 2022 is the latest prediction.

At the Biblioteca Marciana on St. Mark's Square, one of Italy's oldest libraries, they have drawn up an emergency plan and established a department for prevention and restauration. The library, built in the 16th century directly on the water between the Doge's Palace and Giradini Reali, was inundated once before in the great flood of 1966.

Silvia Pugliese is the conservator responsible and she heads the prevention department. The library's most valuable holdings are now housed on the second floor, five meters above where they were back in the 1960s. They include more than 900,000 books, maps and manuscripts, including the will of native Venetian Marco Polo, a Homer edition dating from the 11th century and medieval bibles with jewel-studded covers.

Biblioteca Marciana's emergency plan isn't an evacuation plan, because nobody seriously expects Venice to sink into the sea. "MO.S.E. will hold," says Pugliese.

And what happens if MO.S.E. does hold, but the lagoon degenerates into a cesspool because the water can no longer circulate?

"In Venice," Pugliese says, "decisions have always been made in favor of culture. Not for the benefit of the environment."

The Hague (Netherlands), 1 meter above sea level

If the Netherlands were to be submitted today as a construction project, it would surely never get a permit. At least not in the Netherlands. Half of the country is less than a meter above sea level, a quarter is below, and Rotterdam, the second most important city after Amsterdam was built in a huge delta, where the Rhine, Meuse and Waal rivers flow into the North Sea.

Wim Kuijken is the Delta Commissioner. He was born two months before "de Ramp," as they called Holland's great flood. During the night from Jan. 31 to Feb. 1, 1953, a spring tide converged with a nasty storm to create a disastrous scenario not unlike Hurricane Sandy in New York. Eighty-nine dikes failed and 1,835 people died.

The calamity taught the country two things. First, you have to protect yourself against the sea to the extent possible. And second, there is no such thing as absolute protection against the sea. It is more powerful than humanity and it always will be.

Delta Commissioner Kuijken says that the Netherlands is one of the world's countries most vulnerable to climate change. At the same time, Kuijken says, the Netherlands is safer than most others because people know how vulnerable their country is. And they're prepared to pay for protection.

Nearly 10 years ago, the Dutch government approved 1 billion euros in annual flood-protection spending for the "Delta Program." Dunes are constantly being widened, dikes reinforced, and beaches expanded. What makes the Dutch approach revolutionary is that it is based on both technology and imagination. Roofs are being planted with vegetation and lawns are laid out so that the cities function like sponges when the water does come. In the village of Kinderdijk, a multistory parking lot is being built inside a dike, combining urban and spatial planning with design and aesthetics. They are rethinking their relationship with the sea and nature. The point is no longer to fight the water, but to live with it. Parking garages are built to act as reservoirs during floods and public spaces turn into water retention basins. It is an effective combination of experience, wisdom and money.

The more they do, the more clearly the Dutch see that the knowledge of how to live with water also presents business opportunities.

To get a better idea of the transformations that have become necessary, it helps to take a short walk through Rotterdam with Piet Dircke. He has spent the past 25 years working for Arcadis, a provider of engineering services and project management. The company employs 27,000 people around the world and Dircke has the nice-sounding title of "Global Leader -- Water Management." It's his job to sell Dutch solutions outside the Netherlands, and the market is as big as the problem. The megaports of Asia, in particular, are at risk, including Shanghai, Mumbai and Osaka.

Arcadis signed a framework agreement with the city of New Orleans in 2004, coincidentally just one day before Hurricane Katrina got going. As soon as the city government was able to get back to work, it commissioned Arcadis with the task of making New Orleans "hurricane-proof." It was the Dutch who built the world's largest pumping station that Anders Levermann had told us about in Potsdam. As part of the project, plans were drawn up for hundreds of kilometers of dikes, five storm protection dams and huge flood gates. As many as 350 people were working on 65 different projects simultaneously at the Arcadis office in New Orleans.

Dircke refers to it as "playing the orange card." It is a reference to Holland's national color.

Texel (Netherlands), 2 meters above sea level

Marc van Rijsselberghe is one of the people looking for solutions. In Den Hoorn, the southernmost village on the North Sea island of Texel, van Rijsselberghe sets a plate of tomatoes on the table. For the past few years, he has been experimenting with growing plants in salty soil. He uses saltwater to irrigate various crops growing on open fields and in greenhouses -- tomatoes, strawberries, carrots, lettuce, potatoes and others. He's trying to figure out how much salt plants can bear. If sea levels rise and the groundwater becomes contaminated, then agriculture will also have to adapt. The plate with the tomato wedges is part of his strategy. Van Rijsselberghe, who knows the skepticism and stubbornness of many farmers and politicians, relies on numbers and taste as well as reason and emotion.

Already, 1.5 billion hectares worldwide are affected by salinization, he says, with another three hectares added each minute. It is estimated that crop losses attributed to salinization are at $27 billion annually. As such, van Rijsselberghe says, we have to learn how to produce more while using less water.

When van Rijsselberghe first grew interested in agriculture, there was a generally accepted limit to the salt content of water: 1.7 deciSiemens per meter. Beyond that, it was thought, plants die.

At this point, van Rijsselberghe pushes the plate with the pieces of tomato across the table. They were irrigated with water that has considerably higher concentrations of salt than 1.7 deciSiemens. And the tomatoes actually do taste a little sweet -- at least they're not as salty as one might expect. "I believe that the sea has more power and vitality than we think," he says.

"Come with me to the balcony," hollers Peter van Wingerden, who has rented a factory floor on the northern edge of the Rotterdam harbor for his project. In a few weeks, van Wingerden's floating farm is to open here in the Merwehaven, with 40 cows, perhaps even 55, housed in an automated glass show farm that will be three stories tall and firmly anchored to the harbor bed.

From the balcony, van Wingerden points to the warehouse on the other side where the kiwis that are shipped to Rottterdam are stored. They are then loaded onto trucks and driven to Italy, where they are peeled and sliced. The truck then returns to the Netherlands.

Is it possible, van Wingerden asks, that this form of consumption makes no sense? That we need to rethink things in a world where water levels are rising and land is becoming scarce? The deluge forces us to think in terms of cycles and partnerships.

In addition to grass, van Wingerden's cows are also to be fed with brewery residues along with waste from restaurants or from local grain mills. The football club Feyenoord plans to supply the grass clippings from its seven club stadiums, which it will trade for dairy products from Wingerden's floating farm.

The cows are to be milked by robots, and they will also be used to collect urine and manure. Van Wingerden wants to squeeze the water out of the dung and then filter the salt out of the water. He then plans to sell the salt as fertilizer and then direct the water back into the Meuse River.

Perhaps the fact that large parts of the Netherlands are already below sea level is an advantage. Perhaps is focuses the mind. Because people who live five meters below sea level tend to have a different view of our rising oceans than those who live half a meter above sea level.

"Let's expand the world into the water," Van Wingerden shouts from the balcony. "Let's embrace the water! Let's stop fighting it and use it instead. We owe a lot to the water."


Ottmar Edenhofer is the chief economist at the Potsdam Institute for Climate Impact Research and a former Jesuit priest. It's the kind of background that can be helpful when probing humanity's most pressing questions. Questions like what is right? What should be done? How do you protect as much as possible in an unequal and imperfect world?

DER SPIEGEL: You recently became one of PIK's two directors. What are the most urgent tasks we face today?

Edenhofer: Of course, we have to raise the dikes, relocate roads and shift to a more resilient agriculture. But that's not enough. The man-made destabilization of our climate is a fundamental problem. And we need to act accordingly.

DER SPIEGEL: What do you mean by that in concrete terms?

Edenhofer: We need to put a price on carbon dioxide emissions. This would make CO2-free technology cheaper. Fossil fuels would become more expensive.

DER SPIEGEL: Do you believe that higher taxes, whatever the reason, are politically viable?

Edenhofer: Carbon dioxide pricing would generate revenues that could be used to lower taxes and reduce national debt, for example. People are quite ready for it. You just have to make clear what is happening with the money.

South Tarawa (Kiribati), 2 meters above sea level

Ioane Teitiota -- this citizen of one of the flattest and most remote countries on Earth, one that could hardly be located any further from the scientists in Potsdam -- has a plan. He wants the world to know what is coming its way. Not just the flooding, but also the people and nations that will be forced to flee from climate change.

From his bamboo hut, Teitiota has sued the United Nations. He is seeking to become the first person ever to be declared a climate refugee.

He has sought asylum in New Zealand and is now seeking it worldwide because it is becoming difficult to live in his homeland, with the sea now seeping into the groundwater and the only things hanging from the palm trees are dead leaves.

Thus far, the people fleeing from Kiribati have not been recognized as refugees by any country in the world. The Geneva Conventions offers protection only to those who are persecuted on the grounds of their race, religion, nationality or political convictions. The Supreme Court of New Zealand ultimately ruled that none of those things apply in Teitiota's case.

But Teitiota refuses to give up. He wants the UN to amend its 1951 convention to include the term "climate refugee." He knows full well that his case, focusing as it does on a major issue to which no country in the world has provided a binding answer, is running up against a legal loophole in international law. Yet it is a question that will only become more pressing in the future: Do people fleeing from droughts or floods have the same right to protection as those escaping wars or persecution?

At the 2017 UN World Climate Conference in Bonn, where Kiribati's former president also spoke, UN experts estimated that 20 million people are already fleeing heat, drought, storms or floods. A World Bank study has warned that this figure could reach more than 140 million by 2050.

They are the inhabitants of the islands in the Pacific -- Kiribati, Tuvalu, Samoa, Nauru, the Solomon Islands and the Marshall Islands -- who contribute the least to global warming and yet their lives are already threatened by increasingly violent cyclones.

Just like the inhabitants of the three atoll settlements London, Paris and Poland. They fled to South Tarawa like tens of thousands of others from all parts of the archipelago. The capital of Kiribati is already one of the most densely populated cities in the world. Close to 5,000 people live within one square kilometer, almost as many as in Hong Kong, only without running water or apartments in skyscrapers. The population of Kiribati is growing, even as the amount of inhabitable land is shrinking.

Three years ago, the government of Kiribati purchased 25 square kilometers of land on an island in Fiji, a distant neighbor, for the equivalent of 6.5 million euros. It's intended as land for refuge -- the kind of promised land Ioane Teitiota has been asking God for every day. The country is already using that land to cultivate grains and coconut palms to secure food supplies for its people. According to the country's plan, most inhabitants are to be resettled on the foreign island by 2040.

The name given by the Kiribati government for its emigration program is "migration with dignity," which the country's new president feels is nicer than the word "flight."

Teitiota is standing at his beach again in front of the wall of sandbags as the sun sets on the ocean's horizon. "There must be enough room someplace in the world," he says. The sea now lies calmly in front of him, as if it has been stretched until smooth. God willing, he says, he'd even go to Germany.

By Uwe Buse, Hauke Goos, Laura Höflinger, Alexander Jung, Timofey Neshitov, Marc Pitzke, Claas Relotius and Alexander Smoltczyk