Moving story

Pacific countries face more complex problems than sinking

Other effects of climate change are more urgent, more varied and more unpredictable

“How does a nation survive being swallowed by the sea?” 

So went the tagline for “Anote’s Ark”, a documentary film following Anote Tong, then president of Kiribati, as he toured the world warning that his islands were drowning. 

In 2014, he bought 20 square kilometres of land in Fiji, for Kiribati’s 120,000-odd people to move to as a “last resort”.

“Anote’s Ark” came out in 2018, two years after Mr Tong retired. 

The government that succeeded his was unimpressed. 

“It’s a drama, like a Star Wars film,” says Teburoro Tito, Kiribati’s ambassador to the un. 

“The story is very convincing, but I must say, it’s not true.” 

The land in Fiji is being turned into a commercial farm.

Mr Tito has a point. 

In research published in 2010, Paul Kench, now at the Simon Fraser University in Canada, measured the size of 27 atolls over a period of decades and found that while 14% had shrunk and a couple had disappeared, 43% stayed the same size and another 43% became bigger. 

Many of the ring-shaped coral reefs have been able to adapt to sea-level rise, changing shape as sediment is eroded and pushed around. Tuvalu’s land surface, for instance, increased by 3% between 1971 and 2014 despite a rise in the local sea level of 4mm a year, twice the global average for that period. 

Mr Kench describes Mr Tong’s tale of sinking islands as “largely an emotional narrative”.

Such narratives have their uses. Kiribati, Tuvalu and the Marshall Islands, low-lying archipelagoes deep in the South Pacific (see map), are among the first countries to face the full onslaught of climate change. 

Stories like Mr Tong’s help capture international attention and much-needed funding—seven of the world’s 15 most aid-dependent countries are islands in the Pacific. 

But there are other, more immediate effects of climate change that threaten the lives and livelihoods of the citizens of these countries. 

They are less arresting, harder to explain and, as in the changing shape and size of islands, sometimes counterintuitive. 

But the upshot is the same: the countries may soon become uninhabitable.

Start with the phenomenon of shape-shifting islands. 

The Intergovernmental Panel on Climate Change, a consensus-building body on climate science, warns that the natural adaptation of coastal ecosystems may be only temporary: faster rates of sea-level rise, stronger waves and a growing human population may reduce their capacity to adapt.

That is one risk. 

Another, more urgent one stems from even small rises in the sea level. 

These can cause exceptionally high tides to briefly but entirely inundate the narrow strips of low-lying land that comprise most atolls. 

Such “king tides”, as they are known, are becoming more frequent. 

The saltwater can kill crops such as banana and papaya and seeps into groundwater, making it unfit to drink. 

Desalination plants are pricey and, like all machines, can fail. 

“The islands are not drowning,” says Michael Walsh, a former economic adviser to Kiribati. 

“But, humans and plants alike, they may well die of thirst.”

Changing weather patterns are another factor that could make low-lying islands uninhabitable long before most of them disappear. 

Last year, Cyclone Harold damaged 21,000 houses in Vanuatu. Cyclone Pam in 2015 was one of the strongest ever to hit the South Pacific. 

Cyclones and tsunamis in the region are predicted to become ever more intense.

Many islanders have picked up and moved. 

Some 30,000 Marshallese, or more than a third of the country’s people, have migrated to America, many in the past two decades. 

Yet few cite climate change as the reason for their move. 

The Marshall Islands Climate and Migration Project, a research outfit, notes that the main reasons given are “education, health care, work, and family connections”.

Already poor and dependant on aid, Pacific island countries have been particularly hard hit by covid-19. 

Travel restrictions have decimated the tourism industry and curbed seasonal migration to Australia and New Zealand.

Pacific leaders have ideas to revive their economies. 

Tuvalu makes lots of money from licensing its .tv internet domain (along with Vanuatu, it also sells passports to rich people). 

It now wants to set up an internet banking system and offer more services online. 

There are also ways to keep islands habitable: Kiribati plans to dredge its lagoons and use the sand to raise the surrounding islands higher above the sea. 

Tuvalu has embarked on a land-reclamation project. 

But the spectre of climate change makes it harder to drum up investment for such schemes. 

“I am trying to change the minds of the many people who say, ‘We cannot invest in your country, you’re finished’,” says Kiribati’s Mr Tito.

The depressing long-term solution, as in Mr Tong’s last resort, may be to move. 

The Marshall Islands hopes to renegotiate its post-colonial “Compact of Free Association” with America, which expires in 2023, to ensure a permanent right of residence in the United States for all Marshallese. 

Tuvalu has no such option. 

Maina Talia, a climate activist, thinks that the government should take Fiji up on its offer of a home where Tuvaluans could practise the same culture rather than “be dumped somewhere in Sydney’‘.

Earlier this year, the government of Tuvalu, which until recently insisted that there would be no Plan B, established a new un initiative. 

Its aim is to work with “like-minded countries” to figure out how and where such countries could be relocated, how they could continue to function ex-situ, and whether they could still lay claim to vast exclusive economic zones if their land disappeared under water.

Relocating a country would raise other big questions, too, for both the international system and the way in which people think about statehood. 

“How to prepare to move a nation in dignity, that has never been done before,” says Kamal Amakrane, a migration expert whose ideas helped spark the un initiative. 

He is confident that countries would be able to retain all the elements of statehood, but says that the world needs to start planning now. 

“This is happening,” Mr Amakrane warns. 

“We have 10-15 years to prepare for it.” 

Bluff Of The Year: Fed Threatens To “Get Aggressive” With Inflation


You can summarize the current mood in Washington DC as “Please don’t let this be a return to the 1970s.”

For younger readers, that was a decade in which excessive government spending and money printing combined with inept foreign policy to create the impression that the US was fading into global irrelevance. 

Everyone everywhere dumped their dollars, inflation spiked, interest rates soared and geopolitical chaos of various forms ensued.

And the people who presided over that mess were swept away in the 1980 elections.

This is clearly something to be avoided. 

And yet…our current leaders don’t have the slightest idea how to do that.

Leaving the covid and Afghanistan fiascos aside for the moment, let’s just focus on monetary policy. 

We’ve borrowed way too much money for way too long and run the printing presses flat-out for what seems like forever, yada yada. 

You know the story.

And now, faced with rising inflation of various kinds and the resulting threat of uncontained instability, the Fed is once again trying to talk the world into behaving by promising/threatening to “taper” credit-addicted financial markets off of their beloved monetary heroin.

Yesterday it directed its trial balloon specialist James Bullard to lay down some quite aggressive markers:

Bullard says the Fed has to ‘get going’ on the taper, may need to get aggressive to stop inflation

(CNBC) – St. Louis Federal Reserve President James Bullard said Thursday that the central bank should begin curbing its monthly stimulus efforts soon and have the process wrapped up by the end of March to prevent the U.S. economy from overheating.

Many Fed leaders believe the central bank should reduce the pace of its monthly purchases of $120 billion in Treasury bonds and mortgage-backed securities in a process known as tapering.

Bullard said the Fed’s purchases were appropriate in 2020 to support American business through the Covid-19 pandemic, but they now run the risk of creating bubbles in financial markets and runaway inflation.

“We do have a new framework we did say that we would allow inflation to run above target for some time, but not this much above target,” Bullard said of recent price increases in the U.S. economy.

“So for that reason I think we want to get going on taper. Get the taper finished by the end of the first quarter next year,” he continued. 

“And then we can evaluate what the situation is and we’ll be able to see at that point whether inflation has moderated and if that’s the case we’ll be in great shape. 

If it hasn’t moderated, we’re going to have to be more aggressive to contain inflation.”

Bullard, who spoke with CNBC’s Steve Liesman for an interview that aired on “Squawk Box,” said there’s some evidence that the Fed’s bond-buying blitz has started to create bubbles in the U.S. housing market.

“I think that there is worry that we’re doing more damage than helping with the asset purchases because there is an incipient housing bubble in the U.S. The median house price, at least the number I saw, was approaching $400,000,” he said. 

“We got into a lot of trouble in the mid-2000s by being too complacent about housing prices, so I think we want to be very careful.”

The Fed is of course bluffing, because its dilemma hasn’t changed:

You cannot addict financial markets to a continuous flow of new credit and then just turn off the spigot. 

All the assets that are supported by “greater fool” expectations of new hot money will instantly collapse, blowing up the leveraged speculating community and all who depend on it. 

Which is to say pretty much every equity portfolio manager, home builder, money center bank, pension fund, non-short hedge fund, and Reddit GameStop trader.

In short, the world as we know it implodes like that Miami beachfront condo. 

The only question is whether the markets will stage a pre-taper tantrum or  wait for a bit of actual tightening before going into withdrawal.  

Would-be “Big Short” speculators should note this timing uncertainty when designing their strategies.

Fed prepares for virtual Jackson Hole meeting under cloud of Delta

Scrapping of in-person event underscores risks as central bank debates when to dial back stimulus

Colby Smith in New York

The Kansas City Fed made an eleventh-hour decision to hold the Jackson Hole symposium virtually rather than as an in-person event against the backdrop of the Rocky Mountains © Bloomberg

When the Kansas City branch of the Federal Reserve announced in May that its annual gathering of central bankers would be held as an in-person event against the dramatic backdrop of the Rocky Mountains, it marked a milestone in the US recovery from the depths of the pandemic.

At the time, Covid-19 case counts in the US had plummeted as a nationwide vaccination campaign accelerated, major cities around the country opened back up and Americans flocked to spend savings accumulated during the pandemic on dining out and travelling.

As a speedy return to normal life came tantalisingly into view, economic activity hummed in a way it had not for more than a year. 

Job gains and inflationary pressures were building at a speed that prompted the first of what would later become a chorus of calls for the US central bank to begin assessing when and how it should scale back many of the emergency stimulus measures it rolled out last year. 

Fed chair Jay Powell and New York Fed president John Williams at the Jackson Hole symposium in 2019, the most recent event to be held in person © Reuters

But the Kansas City Fed’s abrupt decision last week to move the Jackson Hole symposium, which is held every August, to a virtual format for the second time in its more than four-decade history underscored the enormity of the risks still confronting the recovery as the more contagious Delta variant spreads. 

The U-turn also accentuated the high-stakes balancing act the Fed must perform as it charts its first policy pivot following a period of extraordinary monetary support, casting an even bigger spotlight on remarks from chair Jay Powell that are scheduled for Friday.

“They just face big, unavoidable uncertainty,” said Bill English, a Yale professor and former director of the Fed’s division of monetary affairs. 

“We don’t know what a recovery from a global pandemic looks like, how long it takes, and the longer-term structural shifts that come out of that.”

A robust economy with precariously high inflation that necessitates a hastier tightening of monetary policy was just as possible a year from now as a recovery that was “partial, incomplete and slow”, English said.

Officials at the central bank are engaged in an extensive debate about the fate of the $120bn monthly asset purchase programme unveiled at the onset of the pandemic. 

The Fed has said it will buy bonds at the same rate until it sees “substantial further progress” on its dual goals of average 2 per cent inflation and maximum employment. 

A growing cohort of central bankers have made the case that the inflation target has already been met and that the Fed should consider a more immediate reduction or “tapering” of its bond-buying programme. 

A choppier labour market recovery marred by worker shortages has unnerved other officials, meaning that Powell’s speech will be carefully dissected for any hints on the potential timing of a pullback.

“It is one of the seminal moments each year where everybody is watching,” said Mark Spindel, chief investment officer at Potomac River Capital, a Washington-based investment firm. 

“There are no immaculate tightenings and now that they’ve admitted they are talking about tapering, they should refine that talk and give us some insight on what they are going to do.”

Powell said last week that it was “not yet clear” whether the recent resurgence in Covid cases would significantly affect the economic trajectory. 

But in a sign of how Delta has rattled even the most strongly held convictions, one of the most ardent supporters of a more aggressive tapering timeline, Robert Kaplan of the Dallas Fed, recently acknowledged the possibility that an adjustment may need to be delayed.

Brian Sack, director of global economics for the DE Shaw group, said he expected the Fed to signal in September its intentions to announce tapering at the November policy meeting, a sequence also predicted by Guido Persichetti, co-head of global Treasuries trading at Barclays. 

The actual taper would probably start in January, Persichetti added.

As the Fed grapples with the tricky task of dialling back its stimulus, policymakers also face mounting questions about whether it can foster a more equitable recovery.

Despite the sharp drop in the unemployment rate last month to 5.4 per cent, there are nearly 6m more out of work than there were in February 2020. 

Low-income workers have suffered disproportionately during the pandemic, with racial minorities bearing an even larger bulk of the burden.

The Fed’s new framework unveiled at last year’s virtual gathering represented a decisive step towards achieving maximum employment, with the central bank committing to tolerate higher periods of inflation to make up for past periods when it undershot its 2 per cent target.

“Traditionally, monetary policymakers have erred on the side of a low-pressure economy because risks of inflation have dominated decisions,” said Karen Dynan, an economics professor at Harvard university, who previously worked at the Treasury department and the Federal Reserve.

“One of the lessons of the late 2010s was that running a high-pressure economy really benefited those at the bottom of the wage distribution . . . the new framework was really a decision to err on [that] side.”

How this new framework works in practice has not yet been tested, however, injecting another source of uncertainty into the outlook just as consumer prices have soared.

“The Fed has indicated that they will wait until inflation is a clear and present danger and will not move as pre-emptively as they have historically,” said Roger Ferguson, former vice-chair of the Fed. 

“Ultimately, they are going to have to risk falling behind the curve, which may call for a more rapid pace of rate increases once they start.” 

For Jean Boivin, former deputy governor of the Bank of Canada, the huge monetary and fiscal response to the Covid crisis presents yet another set of pressing problems that policymakers have not fully grappled with.

One of the big unresolved questions is the extent to which monetary policy can be tightened in the long run given current debt levels, which have soared to new heights following an unprecedented injection of more than $5tn in government stimulus over the past year. 

A rise in US borrowing costs that could accompany an attempt to normalise policy in the face of higher inflation was not a “trivial” matter against this backdrop, Boivin warned.

Financial stability risks were also paramount, he added, made all the more acute by booming asset prices across a broad swath of markets. 

“The taper discussion completely pales in comparison to a discussion of much bigger issues that we’ve been facing for [the past 18 months] and will be for the next couple of years in light of what we are calling a ‘policy revolution’,” said Boivin, now head of the BlackRock Investment Institute. 

Why Vaccination Should be Compulsory

Although the first compulsory seat-belt laws met with strong objections when they were introduced 50 years ago, nobody bothers to complain about such a commonsense rule anymore. In mandating vaccination against COVID-19, governments today can offer the same basic justification for protecting both individuals and society.

Peter Singer

MELBOURNE – I’m writing from Victoria, the Australian state that became, in 1970, the first jurisdiction in the world to make it compulsory to wear a seat belt in a car. 

The legislation was attacked as a violation of individual freedom, but Victorians accepted it because it saved lives. 

Now most of the world has similar legislation. 

I can’t recall when I last heard someone demanding the freedom to drive without wearing a seat belt.

Instead, we are now hearing demands for the freedom to be unvaccinated against the virus that causes COVID-19. Brady Ellison, a member of the United States Olympic archery team, says his decision not to get vaccinated was “one hundred percent a personal choice,” insisting that “anyone that says otherwise is taking away people’s freedoms.”

The oddity, here, is that laws requiring us to wear seat belts really are quite straightforwardly infringing on freedom, whereas laws requiring people to be vaccinated if they are going to be in places where they could infect other people are restricting one kind of freedom in order to protect the freedom of others to go about their business safely.

Don’t misunderstand me. 

I strongly support laws requiring drivers and passengers in cars to wear seat belts. 

In the US, such laws are estimated to have saved approximately 370,000 lives, and to have prevented many more serious injuries. 

Nevertheless, these laws are paternalistic. They coerce us to do something for our own good. 

They violate John Stuart Mill’s famous principle: “the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.” 

The fact that the coercion is for the individual’s own good is “not a sufficient warrant.”

There is a lot to be said for this principle, especially when it is used to oppose laws against victimless acts like homosexual relations between consenting adults or voluntary euthanasia. 

But Mill had more confidence in the ability of members of “civilized” communities to make rational choices about their own interest than we can justifiably have today.

Before seat belts were made compulsory, governments ran campaigns to educate people about the risks of not wearing them. 

These campaigns had some effect, but the number of people who wore seat belts came nowhere near the 90% or more who wear them in the US today (with similar or higher figures in many other countries where not wearing them is an offense).

The reason is that we are not good at protecting ourselves against very small risks of disaster. 

Each time we get into a car, the chance that we will be involved in an accident serious enough to cause injury, if we are not wearing a seat belt, is very small. 

Nevertheless, given the negligible cost of wearing a belt, a reasonable calculation of one’s own interests shows that it is irrational not to wear one. 

Car crash survivors who were injured because they were not wearing seat belts recognize and regret their irrationality – but only when it is too late, as it always is for those who were killed while sitting on their belts.

We are now seeing a very similar situation with vaccination. 

Brytney Cobia recently posted on Facebook the following account of her experiences working as a doctor in Birmingham, Alabama:

“I’m admitting young healthy people to the hospital with very serious COVID infections. 

One of the last things they do before they’re intubated is beg me for the vaccine. 

I hold their hand and tell them that I’m sorry, but it’s too late. 

A few days later when I call time of death, I hug their family members and I tell them the best way to honor their loved one is to go get vaccinated and encourage everyone they know to do the same. 

They cry. 

And they tell me they didn't know. 

They thought it was a hoax. 

They thought it was political. 

They thought because they had a certain blood type or a certain skin color they wouldn’t get as sick. 

They thought it was ‘just the flu.’ 

But they were wrong. 

And they wish they could go back. 

But they can’t.”

The same reason justifies making vaccination against COVID-19 compulsory: otherwise, too many people make decisions that they later regret. 

One would have to be monstrously callous to say: “It’s their own fault, let them die.”

In any case, in the COVID era, making vaccination compulsory doesn’t violate Mill’s “harm to others” principle. 

Unvaccinated Olympic athletes impose risks on others, just as speeding down a busy street does. 

The only “personal choice” Ellison should have had was to get vaccinated or stay at home. 

If the International Olympic Committee had said that only vaccinated athletes can compete, that would have freed thousands of athletes from a heightened risk of infection, and would have justified overriding Ellison’s desire to compete without being vaccinated.

For the same reason, rules announced last month in France and Greece requiring that people going to cinemas, bars, or traveling on a train show proof of vaccination are not a violation of anyone’s freedom. 

This past February, when the Indonesian government became the first to make vaccination mandatory for all adults, the real tragedy was not that it was violating the freedom of its citizens, but that richer countries did not donate the vaccines it needed to implement the law. 

As a result, Indonesia is now the epicenter of the virus and tens of thousands of unvaccinated Indonesians have died.

Peter Singer is Professor of Bioethics at Princeton University and founder of the non-profit organization The Life You Can Save. His books include Animal Liberation, Practical Ethics, The Ethics of What We Eat (with Jim Mason), Rethinking Life and Death, The Point of View of the Universe, co-authored with Katarzyna de Lazari-Radek, The Most Good You Can Do, Famine, Affluence, and Morality, One World Now, Ethics in the Real World, Why Vegan?, and Utilitarianism: A Very Short Introduction, also with Katarzyna de Lazari-Radek. In April, W.W. Norton published his new edition of Apuleius’s The Golden Ass. In 2013, he was named the world's third "most influential contemporary thinker" by the Gottlieb Duttweiler Institute.