Military, Investors, Insurers, Planners and Spooks Handle Unknown-Unknowns With Risk Management

Way back on February 12, 2002 United States Secretary of Defense, Donald Rumsfeld introduced most of us to what has become the gold standard of Risk Management when he said, "There are known knowns; there are things we know that we know.
There are known unknowns; that is to say, there are things that we now know we don't know.
But there are also unknown unknowns – there are things we do not know we don't know.”

Almost all events and projects involve some degree of uncertainty. Risk management is the primary focus of the global military and security agencies as well as the multi trillion dollar insurance and investment industries and those planning any size of event or project. None of their systems are not designed to thwart this type of uncertainty, they can only act to thwart known risks. They all know there are unknown unknowns, they know a black swan event is absolutely guaranteed to occur, but not when.

When investment managers and project planners attend conferences they always listen to lectures that contain practical recommendations on including unknown unknowns into probabilistic cost and schedule risk. They are always advised to have higher capital cushions than their models and formulas otherwise recommend. Investment managers and project planners are schooled to take precautions.

Likewise insurance corporations aren't altruists; they're capitalists, they play hardball economics based on risk analysis, not save-the-polar-bears stuff. They know that a rise in extreme weather means a fall in their profits. Insurance corporations understand risk – which is why they have become increasingly proactive on prevention and adaption strategies toward climate change, in terms of both underwriting and investment.

The Insurance Bureau of Canada believes that adaptation and mitigation are the most cost effective means of addressing severe weather events caused by climate change siting the Stern Report which says that "each tonne of C02 causes damages of at least $85 but can be cut at a cost of $25/tonne."   And Ernst & Young – not known for having to peel bark from their sweater vests after intensive treehugging sessions – named climate change the number one risk to the insurance industry. These corporations don't know care what the unknowable exact causes behind extreme weather events are, they just know it's costing them dearly and are taking precautions to protect their precious profits.

Cities and countries all around the globe are adopting risk management strategies in an attempt to find ways to cope with the climate change unknowns in their futures.

But no group takes risk management prevention more seriously than the military industrial complex [MIC] including their ubiquitous spooks. Scientific American recently suggested that we: "Google US military and climate change to become informed about how our armed forces assess the climate risks." For instance, a few months ago U.S. Adm. Samuel Locklear, the top threat assessment officer in the Pacific, said that climate change “is probably the most likely thing that is going to happen . . . that will cripple the security environment, probably more likely than the other scenarios we all often talk about.”

Security, that eye of the beholder, fear amplified, Rorschach test of a concept, is where our current headlines and this look at global climate change's unknown unknowns converge. Fear of those unknowns and the reaction of us folks is why Western security agencies have developed such an unprecedented capacity to spy on their own domestic populations. This viewpoint that citizens are potential enemies that must be policed by the state is linked to the last decade of increased surveillance that concentrates on the risk of civil unrest at home triggered by catastrophic events linked to climate change, energy shocks or economic crisis - or all three.

Just last month, unilateral changes to US military laws formally granted the Pentagon extraordinary powers to intervene in a domestic "emergency" or "civil disturbance": The Pentagon knows that environmental, economic and other crises could provoke widespread public anger toward government and corporations in coming years.

The US is far from alone in their paranoid secret targeting of environmental protesters. It was recently revealed that UK environment activists had been routinely categorised as "domestic extremists" targeting "national infrastructure" as part of a wider strategy tracking protest groups and protesters.

As for Canada, Stephen Leahy says, "Police and security agencies describe green groups' protests and petitions as 'forms of attack'. In a Canadian Senate committee on national security and defence meeting Richard Fadden, the director of CSIS said they are more worried about domestic terrorism, acknowledging that the vast majority of its spying is done within Canada. The CSIS Energy and National Security Program hosted a luncheon last year to discuss risk management responses to climate security threats. In response to the question: "How much climate uncertainty are you willing to accept?" CSIS acknowledged that they:
Aim to mitigate to stay below a 2°C increase;
Build and budget for resilience to a 3–4°C increase;
Contingency plan for capability to respond to 5–7°C increase.

CSIS and all of the other 'security' agencies are tight lipped about their plans for black swan event contingencies  Do they have them? Of course they do [and theories abound as to the draconian depths they dive to]. Tomorrow we'll talk about a few of the gorilla sized unknown-unknowns of science in general and where some of our environment's gorillas might be hiding in plain sight of us all.