Like everyone else I am shocked and horrified by the Ukraine crisis and have great sympathy and admiration for the people in the Ukraine and their inspirational president. However, you can read about this elsewhere by people who have much greater expertise than me.

In this article, I want to talk about emerging global risks, something that I do claim some expertise on as I lecture in the subject, and how the Ukraine crisis has manifested one of these risks.

A few years ago, Martin Weitzman, the late Harvard economics professor, came up with a framework for thinking about how much resources it would be justifiable to dedicate to addressing climate change. Along with colleagues, I developed a similar framework which we called Risk of Ruin.

Within climate science, there is a probabilistic range of distributions of scenarios and impacts. At the end of the range there are a number of low probability very high impact events; ones where you have possible cascading positive feedback loops which could end up with catastrophic consequences – leading to very high temperature increases or rapid sea level rises, or both, which could render most of the planet uninhabitable.

These scenarios might be unlikely, but their probability is not zero, and they are also hard to model, so it’s almost impossible to estimate what the probability of them occurring is or what the impact will be. Yet the damage caused by them is going to be unbounded – in other words, you could almost think of it as infinite.

The way you put a value on a risk is to multiply an estimate of the damage caused by the risk occurring by the probability of it happening. We argued that in the case of catastrophic, runaway climate change, the potential damage was unbounded, so if you would have to effectively give it an arbitrarily large value. So even if the probability that this occurs is small, the value of this would also be very large.

From a risk management perspective, the uncertainty around the probability and the damage means that it is prudent to assume the worst. Our conclusion was that, when thinking about climate change, it is these worst case scenarios that we should be worrying about, and there was pretty much no limit on the resources that we should spend on averting these high impact low probability impacts.

The Ukraine crisis reminded me about this framework, which though developed for climate, was applied in different context.

I have no idea what will happen in the Ukraine crisis and its aftermath, but it has manifested an emerging global risk – which is potentially catastrophic.

Vladimir Putin’s self-determined presidential term is for another 15 years, which is until he is 84. He has effectively been in charge of Russia for 23 years already.

A 2009 paper by David Owen and Jonathan Davidson identified a psychological condition they termed “hubris syndrome”. This is an acquired personality disorder caused by a leader being in power for too long. To quote from the paper:

“Hubris syndrome was formulated as a pattern of behaviour in a person who:

(i) sees the world as a place for self-glorification through the use of power;

(ii) has a tendency to take action primarily to enhance personal image;

(iii) shows disproportionate concern for image and presentation;

(iv) exhibits messianic zeal and exaltation in speech;

(v) conflates self with nation or organization;

(vi) uses the royal ‘we’ in conversation;

(vii) shows excessive self-confidence;

(viii) manifestly has contempt for others;

(ix) shows accountability only to a higher court (history or God);

(x) displays unshakeable belief that they will be vindicated in that court;

(xi) loses contact with reality;

(xii) resorts to restlessness, recklessness and impulsive actions;

(xiii) allows moral rectitude to obviate consideration of practicality, cost or outcome; and

(xiv) displays incompetence with disregard for nuts and bolts of policy making.”

Added to this, there is the risk that anyone faces of mental decline or dementia as one hits their 80s.

Many commentators have argued that in Putin’s decision to invade Ukraine, pronouncements over this invasion, and reports of meetings with other world leaders, plus his strange behaviour regarding isolation – and the effects of this extreme isolation – indicate that he is already displaying severe mental disorder.

I don’t feel qualified to comment on this, but suffice it to say that these claims are credible and there is a very high likelihood that he will display increasingly irrational and erratic behaviour over the next 15 years. This would be entirely in line with all of the other aging dictators that one can think of (like Mugabe, Louis XIV, Chairman Mao, etc), or even elected leaders who have been in power too long (like Margaret Thatcher, Tony Blair).

And also, just because the leader is unhinged, it does not mean they cannot cling onto power indefinitely (eg again Mao and Mugabe). Unlike these previous leaders, though, Putin has the world’s largest arsenal of nuclear weapons.

I have no idea how the Ukraine crisis will pan out, but we are about to witness what Putin is prepared to do circa 2022, which will demonstrate that he has zero moral compunctions.

Getting back to that arsenal of nuclear weapons – they can easily destroy the planet – the upper bound on the damage function is effectively infinite. What is the probability that an increasingly irrational Putin will use them over the next 15 years? I have no idea, but the probability is non-zero, and may even be quite high.

Ever since the hydrogen bomb was invented there has been the risk of a planet-destroying nuclear war. This risk is of a different order as previously there have been institutional restraints on the powers with access to potentially planet destroying nuclear arsenals. 

Even so, the resources “we” (the West, USA, etc) would be justified in spending on this task is unlimited. To put it in context: NATO countries’ combined military budget is over $1trillion, nearly as much as Russia’s GDP. The risk management outcome that we need is to end Putin’s ability to use Russia’s nuclear arsenal – and to make sure that this ability lands in more secure hands.

This is indeed a non-trivial task. But you can do a lot with $1trillion per year.