[ { "id": "S01", "slug": "trade-bloc-rupture", "title": "Critical trade divides into rival blocs", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "A", "short_title": "Trade bloc rupture", "thematics": [ "economic-security-supply-chains", "resilience-crisis-preparedness" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 3, "rationale": "Every instrument in the scenario was used in 2025: duties above 100 per cent between the United States and China in April and extraterritorial rare earth licensing in October. Each escalation was followed by a truce within weeks, and the widest controls were suspended for a year. A rupture that holds for six months and removes 40 per cent of several inputs at once requires those truces to fail together. That is possible but not the central case." }, "likelihood_10y": { "band": 4, "rationale": "The conditions persist across the decade: processing of rare earths, chip tools and medicine ingredients stays concentrated, export-control regimes are now standing law on both sides and industrial policy is competitive. Ten years spans several political cycles and repeated tests over Taiwan. Both sides have so far retreated when costs became visible, which keeps the rating below band 5." }, "impact_systemic": { "level": 4, "rationale": "IMF staff estimates published in 2023 put the long-run output cost of trade fragmentation between 0.2 and 7 per cent of global GDP, depending on its depth. A 10 per cent fall in trade volume is close to the 2009 fall of about 12 per cent but lasts longer, and input shortages stop production that tariffs alone would only make dearer. That places the event at 2.5 to 5 per cent of global output over five years." }, "impact_national": { "level": 4, "rationale": "The typical highly exposed nation is a trade-dependent manufacturer that buys inputs from one bloc and sells to the other. The 2021 chip shortage and the 2025 magnet and Nexperia stoppages showed that one missing component halts vehicle lines within weeks. Here several inputs are lost for two years, with secondary restrictions and pressure to align. Economic damage and international position reach Severe; essential services continue, so the level is not Catastrophic." }, "confidence": { "level": "medium", "reason": "The instruments and their effects are well documented from 2018 to 2025. The scale assumed, 40 per cent of several inputs lost at once for two years, has no complete precedent, and the panel members differed on likelihood." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "3 years", "warning": "months", "scope": "global", "origin": "adversarial (great power)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "The largest trading powers impose reciprocal tariffs, export controls and investment restrictions covering industrial inputs, advanced chips and digital services. Within six months, suppliers accounting for 40 per cent of global supply of several critical inputs, among them rare earth magnets, chip-making tools and pharmaceutical ingredients, become inaccessible to the opposing bloc. Prices of the affected inputs double and global trade volumes fall 10 per cent over two years. Neutral countries face secondary restrictions and incompatible standards. Substitution takes at least two years. The test is continuity of essential production and the ability to preserve policy autonomy. In its sharpest form, a single dominant supplier halts exports outright.", "narrative": { "dateline": "November 2031", "text": "The measures arrived in sequence between May and October 2029. The first was a tariff round that took average duties on trade between the two largest economies above 60 per cent. The second was a licensing regime for rare earth magnets, gallium and germanium that in practice approved no shipments to the opposing bloc. The third widened chip and chip-tool controls to cover mature process equipment and cloud computing services, and was matched by restrictions on inward and outward investment. By November 2029, suppliers accounting for about 40 per cent of world supply of permanent magnets, several chip-making tools, a class of power semiconductors and a group of antibiotic ingredients could no longer sell across the divide.\n\nManufacturers held between four and ten weeks of stock. Vehicle and electrical equipment plants in Europe, Japan, Korea and Mexico began short-time working in the eighth week. Spot prices for the affected inputs had doubled by the end of the year and contract prices followed at renewal. Health ministries in eleven countries placed three antibiotics under allocation.\n\nCountries outside both blocs were also affected. Firms in South East Asia, India, the Gulf and Latin America that re-exported controlled goods were listed by one side or the other, and two banks lost correspondent accounts. Governments were asked to adopt origin audits and end-user certificates under two rule books that could not both be satisfied. Telecommunications equipment and vehicle software certified under one set of standards were refused approval under the other. Customs clearance times for the affected categories doubled.\n\nTrade diverted where it could. Mines and separation plants outside the dominant supplier raised output and magnet recycling expanded, but the first new processing capacity did not reach volume until the autumn of 2031. Governments released strategic stocks to defence and medical users first. Most had no legal basis for allocating industrial inputs among private firms and wrote one during the shortage.\n\nBy the middle of 2031, world goods trade volume was 10 per cent below its 2028 level. Inflation ran about one and a half percentage points above target in the bloc economies and about three points above target in economies that imported from both. Employment in export sectors fell in the most exposed manufacturing regions. Exemptions were negotiated product by product and each carried a condition on alignment.\n\nGINC's reading at the two-year mark was that outcomes depended less on which side a country stood with than on what it had prepared. Countries that had mapped their dependence by product, held stocks sized to requalification times and kept working customs and licensing administrations lost output for months. Countries that learned of their exposure only when production lines stopped lost output for years, and several gave up policy positions in order to obtain supply." }, "anchors": [ { "shock_id": "us-liberation-day-tariff-package-2025", "date": "2 April 2025", "event": "US 'Liberation Day' tariff package", "what_happened": "A 10 per cent baseline tariff on most imports with higher rates by country. Duties between the United States and China reached 145 and 125 per cent within two weeks, before a truce agreed in Geneva on 12 May cut them for 90 days. The US effective tariff rate rose to its highest level since the 1930s.", "calibrates": "The speed at which reciprocal tariffs can reach prohibitive levels and the pattern of escalation followed by truce that keeps the two-year likelihood at band 3." }, { "shock_id": "china-rare-earth-controls-2025", "date": "4 April and 9 October 2025", "event": "China rare earth export controls", "what_happened": "From 4 April China required licences for exports of seven medium and heavy rare earths and the magnets made from them. Magnet shipments fell sharply in the following two months, and carmakers and suppliers in Europe, the United States and Japan reduced or stopped some lines. On 9 October the regime was extended to products made abroad with Chinese material or technology; the extension was suspended for a year after the 30 October leaders' meeting.", "calibrates": "Export licensing as the instrument that makes supply inaccessible, the weeks of stock that manufacturers hold and the reach of controls into third countries." }, { "shock_id": "china-rare-earth-embargo-on-japan-2010", "date": "September 2010", "event": "China rare earth embargo on Japan", "what_happened": "After a collision near the Senkaku Islands, rare earth shipments from China to Japan stopped for about two months. Prices of several rare earth oxides rose severalfold over the following year. Japan then invested in overseas mines, stockpiles, recycling and substitution, and reduced its dependence on Chinese supply from about 90 per cent to about 60 per cent over the following decade.", "calibrates": "Substitution time. A well-resourced importer needed years, not months, to reduce a concentrated dependence, and did not remove it." }, { "shock_id": "nexperia-export-halt-2025", "date": "October 2025", "event": "Nexperia export halt", "what_happened": "The Netherlands took control of decisions at Nexperia, a Chinese-owned maker of basic automotive chips, under its Goods Availability Act. China then barred exports of Nexperia products from its plants in China, where a large share of the company's output is assembled and tested. Carmakers in Europe, Japan and North America warned of stoppages within weeks and some cut production. Exports resumed in part in November and the Dutch order was suspended.", "calibrates": "The single-supplier halt, the sharpest form of the rupture: a low-value component with one dominant source can stop high-value production within weeks." }, { "shock_id": "us-advanced-chip-export-controls-2022", "date": "7 October 2022", "event": "US advanced chip export controls", "what_happened": "The United States restricted exports to China of advanced computing chips and of the equipment used to make advanced semiconductors, and barred US persons from supporting advanced fabrication there. Japan and the Netherlands adopted aligned controls on chip-making equipment in 2023, and the US rules were widened in 2023 and 2024. China introduced export licensing for gallium and germanium in August 2023.", "calibrates": "The technology side of the rupture: controls that begin with one product class widen by stages, draw in allied suppliers and meet retaliation in materials." }, { "shock_id": "global-financial-crisis-2008", "date": "2008–2009", "event": "Global financial crisis trade collapse", "what_happened": "World merchandise trade volume fell by about 12 per cent in 2009, the largest fall since the Second World War, and recovered most of the loss in 2010 as demand and trade finance returned.", "calibrates": "The scale of the trade fall. The scenario assumes a fall of similar size, 10 per cent, but spread over two years and without a rapid recovery, because the cause is policy and not demand." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "1 year", "severe": "3 years", "extreme": "5 years" }, "onset": { "major": "months", "severe": "months", "extreme": "weeks" }, "warning": { "major": "months", "severe": "months", "extreme": "days" }, "scope": { "major": "regional", "severe": "global", "extreme": "global" }, "origin": { "major": "adversarial (great power)", "severe": "adversarial (great power)", "extreme": "adversarial (great power)" }, "external_support": { "major": "partial", "severe": "partial", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S02)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "current plans executed" }, "recovery_horizon": { "major": "years", "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "Share of global supply of each affected input made inaccessible to the opposing bloc", "default": "40 per cent", "range": "20 to 70", "unit": "per cent of global supply", "note": "Applies to several inputs at once, among them rare earth magnets, chip-making tools, basic semiconductors and pharmaceutical ingredients. Reached within six months." }, { "name": "Price rise of affected inputs", "default": "100 per cent", "range": "50 to 300", "unit": "per cent above the pre-event price", "note": "Spot prices first; contract prices follow at renewal." }, { "name": "Fall in global trade volume", "default": "10 per cent over two years", "range": "5 to 20", "unit": "per cent", "note": "Goods and services, measured against the pre-event level." }, { "name": "Minimum time to substitute lost supply", "default": "2 years", "range": "1 to 5", "unit": "years", "note": "Time for new mines, processing plants and qualified suppliers to reach volume. Longer for chip-making tools." }, { "name": "Secondary restrictions on neutral countries", "default": "partial", "range": "none to full", "unit": null, "note": "Partial means measures against named firms and banks that supply or clear for the opposing bloc. Full, at Extreme, means measures against whole jurisdictions." }, { "name": "Single-supplier halt", "default": "no", "range": "no or yes", "unit": null, "note": "Yes sets one dominant supplier of one input to a complete export halt to all buyers, with onset in days. This is the sharpest form of the event." }, { "name": "Financial services and payment systems included", "default": "no", "range": "no or yes", "unit": null, "note": "Yes at Extreme." } ] }, "transmission": [ "The largest trading powers impose reciprocal tariffs, export licensing and investment restrictions in sequence over six months.", "Suppliers of about 40 per cent of several critical inputs can no longer sell to the opposing bloc; manufacturers run down stocks within weeks.", "Prices of the affected inputs double; plants that cannot requalify alternative suppliers reduce or stop production.", "Secondary restrictions reach firms and banks in neutral countries that supply or clear payments for the opposing bloc.", "Technical standards and certification regimes diverge, so products approved in one bloc are refused in the other.", "Global trade volume falls 10 per cent over two years; export earnings, investment and employment fall in trade-dependent economies.", "Higher import prices raise inflation while output falls, which limits the monetary and fiscal response.", "Supply and exemptions are offered in return for alignment, narrowing the policy autonomy of states that depend on both blocs." ], "loading": [ { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "loss of access to controlled chips, chip-making tools, magnets and materials; incompatible standards" }, { "dimension": "Hard", "domain": "defence-security", "load": "Medium", "channel": "defence production short of magnets and components; friction within alliances over alignment" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Medium", "channel": "ports and customs handle origin audits; grid, telecommunications and transport equipment delayed" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "licensing, customs, sanctions compliance, allocation of scarce inputs and industrial policy under time pressure" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "pressure to align; exemptions traded for policy concessions; diplomatic capacity stretched" }, { "dimension": "Soft", "domain": "human-capital", "load": "Medium", "channel": "export-sector job losses, shortages of medicine ingredients and limits on researcher mobility" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "input shortages stop production; export volumes fall; diversion and requalification costs" }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "inflation with falling output; currency pressure; investment restrictions and loss of correspondent banking" }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "critical mineral export restrictions; delays to energy equipment; commodity price volatility" } ], "stakeholders": { "government": { "exposure": "Dependence on inputs, markets and standards from both blocs; legal powers to allocate scarce inputs; capacity of customs and licensing administrations.", "actions": [ "Map import dependence by product and supplier country for critical inputs", "Hold stocks sized to the time needed to requalify alternative suppliers", "Legislate in advance for the allocation of scarce inputs to essential users" ], "watch": [ "Export licence approval rates for controlled inputs", "Listings of domestic firms and banks under either bloc's restrictions", "Divergence between the blocs in product certification requirements" ], "relevance": 4 }, "technology": { "exposure": "Controlled chips, tools, materials and cloud services; products certified under one bloc's standards.", "actions": [ "Qualify a second supplier in a different jurisdiction for each controlled input", "Design product lines that can be certified under either set of standards", "Hold component stocks above the lead time for requalification" ], "watch": [ "Scope of export controls on chips, tools and computing services", "Lead times and spot prices for magnets and basic semiconductors", "Data localisation and cloud access rules" ], "relevance": 4 }, "investors": { "exposure": "Earnings of manufacturers with supply chains that cross the blocs; currencies and sovereign spreads of trade-dependent economies; assets subject to forced divestment.", "actions": [ "Test portfolios against a 10 per cent fall in trade volume and a doubling of critical input prices", "Identify holdings that rely on a single jurisdiction for a critical input", "Review exposure to forced divestment under investment screening" ], "watch": [ "Tariff and export-control announcements", "Inventory cover reported by vehicle and electronics manufacturers", "Currencies and sovereign spreads of trade-dependent middle powers" ], "relevance": 5 }, "public": { "exposure": "Employment in export manufacturing; prices of vehicles, electronics and appliances; availability of some medicines.", "actions": [ "Local government identifies employers that depend on inputs from the opposing bloc", "Health services plan substitutes for medicines with concentrated ingredient supply", "Media and civil society report shortages and allocation decisions accurately" ], "watch": [ "Short-time working and redundancies in export sectors", "Consumer prices for durable goods", "Medicine shortage notices" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "A principal in the rupture. Depends on the opposing bloc for processed rare earths, magnets and medicine ingredients." }, { "region": "europe", "exposure": "High", "rationale": "Export-dependent manufacturing buys inputs from one bloc and sells to both. Little domestic processing of critical materials." }, { "region": "china", "exposure": "High", "rationale": "A principal in the rupture. Loses access to advanced chips, chip-making tools and its largest export markets." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Assembles for both blocs. Plants in Japan, Korea, Taiwan and ASEAN depend on inputs and tools from each side." }, { "region": "south-asia", "exposure": "Medium", "rationale": "Gains diverted orders, but its pharmaceutical and electronics industries depend on imported ingredients and components." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Energy sales continue to both blocs. Technology purchases, re-export hubs and investment funds face secondary restrictions." }, { "region": "africa", "exposure": "Medium", "rationale": "Mineral exporters gain bargaining power. Importers face higher prices, tied finance and pressure over standards." }, { "region": "latin-america", "exposure": "Medium", "rationale": "Commodity exporters sell to both blocs. Mexico's manufacturing is bound to one, and lithium and copper attract rival offers." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Already under sanctions and reliant on one bloc for technology and markets. Central Asian transit states face secondary restrictions." } ], "indicators": [ { "name": "Average tariff rates on trade between the United States and China", "source": "Peterson Institute for International Economics tariff tracker; Yale Budget Lab", "threshold": "Average rates above 60 per cent in both directions", "cadence": "monthly" }, { "name": "New export-control rules and entity listings", "source": "US Bureau of Industry and Security; China Ministry of Commerce", "threshold": "Controls extended to mature process equipment, basic semiconductors or cloud services", "cadence": "weekly" }, { "name": "Harmful trade and investment interventions in force", "source": "Global Trade Alert", "threshold": null, "cadence": "monthly" }, { "name": "Chinese exports of rare earth magnets, gallium and germanium", "source": "China General Administration of Customs", "threshold": "Monthly shipments below half the level of a year earlier", "cadence": "monthly" }, { "name": "Global Supply Chain Pressure Index", "source": "Federal Reserve Bank of New York", "threshold": "More than two standard deviations above its average", "cadence": "monthly" }, { "name": "Goods Trade Barometer", "source": "WTO", "threshold": "Below 100 for two consecutive readings", "cadence": "quarterly" }, { "name": "Investment screening measures and blocked transactions", "source": "UNCTAD Investment Policy Monitor", "threshold": null, "cadence": "quarterly" } ], "compounds": { "triggers": [ { "id": "S02", "note": "Lost earnings in technology and manufacturing reprice assets; investment restrictions and currency pressure strain funding." }, { "id": "S03", "note": "Less trade between the blocs lowers the economic cost of military confrontation near contested sea routes." }, { "id": "S04", "note": "Rivalry extends to deniable pressure on the infrastructure of states that resist alignment." }, { "id": "S06", "note": "Export controls and bloc restrictions on fertiliser and farm inputs reduce harvests and make food export restrictions more likely." }, { "id": "S09", "note": "Technology rivalry accelerates state quantum programmes and reduces disclosure of progress." }, { "id": "S12", "note": "economies outside the rival blocs open to each other in response" }, { "id": "S13", "note": "The cost of divided trade creates the incentive to negotiate" } ], "triggered_by": [ { "id": "S03", "note": "A regional war involving a major power brings sanctions and export controls between the blocs." }, { "id": "S04", "note": "An infrastructure attack attributed to a rival state brings economic retaliation." }, { "id": "S09", "note": "A demonstrated attack on cryptography brings bans on the adversary's digital services and equipment." }, { "id": "S02", "note": "Governments respond to the recession with tariffs, capital restrictions and preference for domestic suppliers." }, { "id": "S10", "note": "Export restrictions on medical goods harden into lasting trade barriers." }, { "id": "S12", "note": "excluded powers may answer a compact they read as a bloc with restrictions of their own" }, { "id": "S15", "note": "competition for minerals, cells and grid equipment" } ], "amplified_by": [ { "id": "S06", "note": "Food and fertiliser export restrictions add to controls on industrial inputs." }, { "id": "S10", "note": "Export restrictions on medical goods deepen shortages of pharmaceutical ingredients." } ], "triggered_by_other": [], "amplifying_trends": [ "Export controls & economic coercion", "Critical input supplier concentration", "Trade & investment fragmentation", "Economic security policy", "Technical standards competition", "Rare earth processing concentration", "Lithography & chip-tool chokepoints", "Pharmaceutical input concentration" ] }, "open_questions": [ "Whether one record can hold both the division into blocs, with onset in months, and the single-supplier halt, with onset in days, or whether the halt needs its own preset.", "How to score nations that gain orders from diversion. The record treats them as exposed, but some would rise on several capability groups.", "Whether the 40 per cent threshold should be set on global supply, as here, or on each nation's own import share, which differs widely by input.", "Whether financial services and payment systems belong in Standard Severe. They are excluded here and included only at Extreme." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Governments outside the blocs are pressed to **adopt one rule book**. Exemptions are granted product by product, each with a condition on alignment.", "economic": "Prices of the affected inputs double and world trade volume falls **10 per cent** over two years. Inflation is highest in economies that import from both blocs.", "social": "**Export-sector jobs** are lost in manufacturing regions and households lose purchasing power. Some antibiotics are placed under allocation.", "technological": "Chips, chip-making tools, magnets and cloud services need licences that are not issued. **Incompatible standards** leave products approved in one bloc refused in the other.", "legal": "Customs administers origin audits and end-user certificates under two regimes. Most states have **no legal basis for allocating** scarce industrial inputs.", "environmental": "Shortages of magnets and power semiconductors **delay clean-energy equipment**. New mines and processing plants are approved under shortened environmental review." }, "regions": { "north-america": "A principal in the rupture. It controls chip technology but depends on the opposing bloc for **processed rare earths**, magnets and medicine ingredients.", "europe": "Export manufacturing buys inputs from one bloc and sells to both. With **little domestic processing**, vehicle and equipment plants stop within weeks.", "china": "A principal in the rupture. It loses **advanced chips and tools** and its largest export markets, and answers with licensing of materials.", "indo-pacific": "The region **assembles for both blocs**. Plants in Japan, Korea, Taiwan and ASEAN need inputs from one side and tools from the other.", "south-asia": "India and its neighbours gain diverted orders, but pharmaceutical and electronics output depends on **imported ingredients** and components.", "gulf-middle-east": "Energy sales continue to both blocs. Re-export hubs, technology purchases and investment funds face **secondary restrictions**.", "africa": "Mineral exporters gain bargaining power. Importers pay more, and finance and equipment arrive with **conditions on standards**.", "latin-america": "Commodity exporters sell to both blocs. Mexico's manufacturing is bound to one, and lithium and copper attract **rival offers**.", "russia-eurasia": "Russia is already under sanctions and **reliant on one bloc**. Central Asian transit states face secondary restrictions on re-exports." }, "evolution": { "lead_indicators": "Tariffs between the United States and China pass **60 per cent in both directions**. Export controls reach mature chip equipment and Chinese magnet shipments fall by more than half.", "triggers": "The largest trading powers impose **reciprocal tariffs, export licensing and investment restrictions** in sequence over six months. The truces that ended earlier escalations fail together.", "immediate": "Suppliers of 40 per cent of several critical inputs cannot sell across the divide. Manufacturers hold four to ten weeks of stock and **short-time working** begins in the eighth week.", "post_immediate": "Prices of the affected inputs double and some antibiotics are placed under allocation. **Secondary restrictions** reach firms and banks in neutral countries, and exemptions carry conditions on alignment.", "stabilisation": "After two years world goods trade is **10 per cent below** its earlier level. The first new processing capacity reaches volume only then, and inflation stays above target.", "long_term": "Trade stays divided under **two rule books** and incompatible standards. Countries that had not mapped their dependence lose output for years, and several give up policy positions to obtain supply." } }, "history": [ { "edition": 2027, "rank": 1, "L2y": 3, "L10y": 4, "impact_systemic": 4, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Geoeconomic confrontation: narrowed to critical inputs, with the single-supplier cut-off folded in; onset moved from weeks to months, the trade fall set at 10 per cent and both likelihood bands lowered by one." } ], "citation": "GINC (2027). Scenario S01 Critical trade divides into rival blocs, Scenario Library v0.5. scenarios.ginc.org/scenarios/trade-bloc-rupture" }, { "id": "S02", "slug": "global-funding-seizure", "title": "A global funding seizure reaches sovereign balance sheets", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "A", "short_title": "Global funding seizure", "thematics": [ "economic-security-supply-chains", "resilience-crisis-preparedness" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 3, "rationale": "An event meeting this specification in full has occurred once in the past forty years, in 2008. Partial episodes in 2020, 2022 and 2023 were contained within weeks by central bank action. Concentrated technology valuations, leverage outside the banking system and faster deposit movement raise the near-term probability; standing liquidity facilities and higher bank capital lower it. The two-year probability is placed between 1 and 5 per cent." }, "likelihood_10y": { "band": 4, "rationale": "Over ten years the historical frequency of one full event in forty years implies a probability inside the 5 to 25 per cent band. Public debt and interest costs are higher than before 2008, which leaves less room to absorb private losses, and a larger share of credit is held by funds without access to central bank facilities. The band is not raised further because supervisors test banks against paths of this severity." }, "impact_systemic": { "level": 4, "rationale": "After 2008 world output remained several per cent below its earlier trend five years later. This specification sets a smaller equity fall than 2008 and assumes that core government bond and dollar funding markets are kept open, so the loss is placed below that episode: 2.5 to 5 per cent of global output at risk over five years, with structural damage in the nations that lose market access." }, "impact_national": { "level": 4, "rationale": "A highly exposed nation loses market access while paying for bank support and unemployment. Public salaries and benefits are paid late and imports of fuel and medicines are rationed. Ireland's public debt rose from about 25 to about 120 per cent of GDP after it guaranteed its banks; Sri Lanka rationed fuel and medicines within weeks of default. Damage to essential services and output is severe, and recovery takes years." }, "confidence": { "level": "medium", "reason": "Severity is well calibrated by 2008, the euro area crisis and supervisory stress tests. Timing, and the number of governments that lose market access, are uncertain." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "weeks", "duration": "1 year (funding markets impaired for nine months)", "warning": "months (valuation and leverage signals, widely discounted)", "scope": "global", "origin": "accidental (arising inside the financial system)", "external_support": "partial (swap lines and multilateral lending, unevenly available)", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "A sharp repricing of technology and commercial property assets triggers withdrawals from leveraged funds and from bank deposits that can move within hours. Global equities fall 40 per cent, cross-border private lending contracts by 25 per cent and borrowing spreads for vulnerable sovereigns rise by 500 basis points. Funding markets remain impaired for nine months. Several governments lose market access as bank support, unemployment spending and refinancing needs fall due together. The test for a nation is whether it can keep payments and essential services running and allocate losses without turning liquidity support into a public guarantee it cannot afford. The record continues the first-pass global financial crisis and absorbs the sovereign funding crisis as its national face.", "narrative": { "dateline": "November 2029", "text": "The repricing began in the second week of January 2029, when two of the largest listed technology companies cut their capital spending plans for data centres and a group of lenders marked down the office and data-centre loans that had been valued on the earlier plans. Within ten days three private credit funds had suspended redemptions and the banks that financed them were drawing on central bank facilities. Deposits moved faster than in any earlier episode: one mid-sized lender lost a fifth of its deposits in two working days, most of it through mobile applications outside business hours.\n\nBy the end of February global equities were 40 per cent below their peak. The major central banks reopened currency swap lines and bought government bonds to keep core markets working, and those markets held. The stress then moved to weaker borrowers. Cross-border private lending contracted by a quarter over the following two quarters as banks and funds reduced foreign exposures. Trade finance lines were cut for importers in South Asia, Africa and Latin America, and borrowing spreads for the weaker sovereigns rose by 500 basis points.\n\nThe fiscal demands then fell due together. Governments were asked to guarantee bank liabilities, pay for rising unemployment and refinance maturing debt in the same quarter, in markets that would lend only at short maturities. Eight governments lost market access between March and August. Two of them had guaranteed their banking systems in full in the first week and found that the guarantee had moved the doubt from the banks to the state. Four suspended payments on external bonds. Restructuring talks were slow because bondholders, bilateral lenders and commodity traders holding collateral had no common forum.\n\nIn the countries that lost access, the effects reached public services within weeks. Salaries for teachers and health workers were paid late or in part. Importers could not obtain foreign currency for fuel and medicines, and hospitals rationed supplies. Card and transfer systems continued to operate throughout, which limited the damage, but several governments imposed limits on withdrawals and on transfers abroad.\n\nFunding markets remained impaired for nine months. Issuance by investment-grade borrowers resumed in October 2029. By then unemployment in the advanced economies had risen by three percentage points, technology investment had fallen by a third and several large infrastructure projects had lost their financing. Central banks that held large quantities of government debt faced public pressure to hold more.\n\nThe governments that came through with their capability intact had three things in common. They held liquid reserves and long debt maturities at the start. They had resolution regimes that imposed losses on shareholders and creditors before public money was used. They limited liquidity support by amount and by time, and said so in public, so that it was not read as an open guarantee. Those that could not do this spent the following years servicing the cost." }, "anchors": [ { "shock_id": "global-financial-crisis-2008", "date": "2008–2009", "event": "Global financial crisis", "what_happened": "Lehman Brothers failed on 15 September 2008 and interbank and cross-border lending froze. The S&P 500 fell about 57 per cent from its October 2007 peak to March 2009. World merchandise trade volume fell about 12 per cent in 2009 and world output contracted that year. US unemployment peaked at 10 per cent in October 2009.", "calibrates": "The full path: equity fall, funding freeze, contraction of cross-border lending and a recession lasting years. Standard Severe sets a smaller equity fall than 2008 and assumes core markets are kept open." }, { "shock_id": "euro-area-sovereign-debt-crisis-2010", "date": "2010–2012", "event": "Euro area sovereign debt crisis", "what_happened": "Greece, Ireland and Portugal lost market access and entered European Union and IMF lending programmes between May 2010 and May 2011. Ireland had guaranteed most liabilities of its domestic banks in September 2008; its public debt rose from about 25 per cent of GDP in 2007 to about 120 per cent in 2012. Greek output fell by about a quarter between 2008 and 2013.", "calibrates": "The channel this scenario tests: private bank losses assumed by the state, loss of market access and cuts to public services. A blanket guarantee can move the funding problem from the banks to the sovereign." }, { "shock_id": "march-2020-dash-for-cash", "date": "March 2020", "event": "March 2020 dash for cash", "what_happened": "Investors sold government bonds to raise cash and the US Treasury market stopped functioning normally. The Federal Reserve bought more than US$1 trillion of Treasury and mortgage-backed securities within three weeks and reopened swap lines with other central banks. The IMF reported portfolio outflows from emerging markets of about US$100 billion, the largest on record.", "calibrates": "Onset in weeks and the part played by leverage outside banks. Markets recovered quickly because central bank support was very large; the scenario assumes support that is slower and partial outside the core." }, { "shock_id": "svb-and-credit-suisse-2023", "date": "March 2023", "event": "SVB and Credit Suisse", "what_happened": "Depositors withdrew US$42 billion from Silicon Valley Bank on 9 March 2023 and had requested a further US$100 billion for the following day, according to the Federal Reserve's review. US authorities then protected all deposits at the bank. Credit Suisse was sold to UBS on 19 March with state support and about 16 billion Swiss francs of its additional tier 1 bonds were written down.", "calibrates": "Deposit mobility: a run completed in two days, not weeks. It also shows the pressure on authorities to extend protection beyond the insured limit." }, { "shock_id": "uk-gilt-crisis-2022", "date": "September–October 2022", "event": "UK gilt crisis", "what_happened": "After a fiscal statement on 23 September 2022, 30-year gilt yields rose by more than 100 basis points in four days. Leveraged liability-driven investment funds used by pension schemes faced collateral calls and sold gilts. The Bank of England announced temporary purchases of up to £65 billion on 28 September and bought about £19 billion.", "calibrates": "An advanced-economy government bond market can be destabilised within days by leveraged holders outside the banking system. Support limited by amount and by time was sufficient." }, { "shock_id": "sri-lanka-default-2022", "date": "April 2022", "event": "Sri Lanka default", "what_happened": "The government announced a suspension of external debt payments on 12 April 2022, its first default. Foreign currency for imports ran out; fuel, cooking gas and medicines were rationed and there were long daily power cuts. Inflation approached 70 per cent in September 2022 and the president resigned in July. An IMF arrangement of about US$3 billion was approved in March 2023.", "calibrates": "The national face of the scenario for a borrower with low reserves: loss of funding reaches essential services within weeks and restructuring takes years." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "90 days", "severe": "1 year (funding markets impaired for nine months)", "extreme": "3 years" }, "onset": { "major": "weeks", "severe": "weeks", "extreme": "days" }, "warning": { "major": "months", "severe": "months (valuation and leverage signals, widely discounted)", "extreme": "none" }, "scope": { "major": "regional", "severe": "global", "extreme": "global" }, "origin": { "major": "accidental", "severe": "accidental (arising inside the financial system)", "extreme": "accidental" }, "external_support": { "major": "full", "severe": "partial (swap lines and multilateral lending, unevenly available)", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S01)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "current plans executed" }, "recovery_horizon": { "major": "months", "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "Global equity fall, peak to trough", "default": "40 per cent", "range": "25 to 55", "unit": "per cent", "note": "Smaller than the fall of 2007 to 2009; technology shares fall further than the index." }, { "name": "Contraction in cross-border private lending", "default": "25 per cent", "range": "10 to 40", "unit": "per cent over two quarters", "note": "Bank and non-bank lending together, including trade finance." }, { "name": "Rise in vulnerable sovereign borrowing spreads", "default": "500 basis points", "range": "300 to 1,000", "unit": "basis points", "note": "Applied to sovereigns with high refinancing needs or low reserves; core issuers see yields fall or hold." }, { "name": "Period of impaired funding markets", "default": "9 months", "range": "3 to 18", "unit": "months", "note": "Measured to the resumption of normal issuance by investment-grade borrowers." }, { "name": "Governments losing market access", "default": "8", "range": "3 to 20", "unit": "sovereigns", "note": "The specification says 'several'; eight is the working value for Standard Severe." }, { "name": "Deposit outflow at exposed banks", "default": "20 per cent in two working days", "range": "10 to 40", "unit": "per cent of deposits", "note": "Concentrated in uninsured balances held by firms and funds." }, { "name": "Scope of public guarantee", "default": "liquidity support limited by amount and time", "range": "alternative: guarantee of all bank liabilities", "unit": null, "note": "The alternative moves bank losses to the sovereign and is the setting at Standard Extreme." } ] }, "transmission": [ "Technology and commercial property assets reprice sharply; lenders and funds mark down loans and holdings valued on earlier earnings and occupancy assumptions.", "Leveraged funds face collateral calls and redemptions, suspend withdrawals and sell liquid assets, including government bonds.", "Uninsured deposits leave exposed banks within days; banks draw on central bank facilities and lend to each other only against the best collateral.", "Banks and funds reduce foreign exposures; cross-border private lending and trade finance contract and the currencies of borrowing countries depreciate.", "Credit to firms and households contracts; investment falls, unemployment rises and tax revenue declines.", "Governments face bank support, unemployment spending and refinancing in the same period; spreads for vulnerable sovereigns rise by 500 basis points.", "Several governments lose market access; salaries, benefits and imports of fuel and medicines are paid late or rationed.", "Loss allocation is contested; divided creditors slow restructuring and central banks are pressed to finance governments." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "Procurement and readiness spending are deferred under fiscal consolidation; no direct security effect." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Medium", "channel": "Project finance is withdrawn; payment, clearing and settlement systems must operate through the stress." }, { "dimension": "Hard", "domain": "critical-technology", "load": "Medium", "channel": "Venture, private credit and data-centre financing contract; public and corporate research budgets are cut." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Loss allocation, bank resolution, debt management and the payment of salaries and benefits without market access." }, { "dimension": "Soft", "domain": "human-capital", "load": "Medium", "channel": "Unemployment rises; health and education spending is cut or paid late where the state loses funding." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "Disputes over who bears losses reduce trust in institutions; aid and diplomatic budgets fall." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Bank and non-bank funding, sovereign refinancing, reserves, the currency and the cost of public guarantees." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Credit to firms and trade finance contract; demand, investment and employment fall." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Low", "channel": "Commodity demand and prices fall; importers short of foreign currency face fuel shortages." } ], "stakeholders": { "government": { "exposure": "Refinancing needs, contingent liabilities to banks, reserve adequacy and the capacity to keep paying salaries and benefits.", "actions": [ "Test the public balance sheet against bank support, unemployment spending and refinancing falling due together at spreads 500 basis points higher", "Set limits on liquidity support by amount and duration in advance, and complete resolution plans that place losses on shareholders and creditors first", "Lengthen debt maturities, hold liquid reserves and agree swap or precautionary credit lines before they are needed" ], "watch": [ "Gross financing needs due within 12 months", "Bank holdings of domestic government debt", "Share of uninsured deposits and the speed of outflows" ], "relevance": 3 }, "technology": { "exposure": "Dependence on equity, venture and private credit funding for data centres and research; operation of payment and settlement systems.", "actions": [ "Extend funding maturities and reduce reliance on a single lender or fund", "Hold operating cash at more than one institution and within insured or collateralised arrangements", "Test payment, clearing and settlement systems for peak volumes during a run" ], "watch": [ "Redemption terms of private credit funds", "Valuations of data-centre leases and loans", "Capital spending guidance from the largest technology companies" ], "relevance": 3 }, "investors": { "exposure": "Leveraged positions; illiquid property and private credit holdings; bonds of sovereigns with large refinancing needs.", "actions": [ "Apply the scenario path to sovereign, bank and property holdings together and not one portfolio at a time", "Review liquidity terms against the speed at which collateral calls and redemptions can arrive", "Assess sovereign exposures by refinancing need and creditor composition as well as by rating" ], "watch": [ "High-yield and emerging-market sovereign spreads", "Use of central bank liquidity facilities and swap lines", "Redemption suspensions in property and credit funds" ], "relevance": 5 }, "public": { "exposure": "Employment, mortgages, pensions and deposits; in countries that lose market access, public salaries, fuel and medicines.", "actions": [ "Households should know the deposit insurance limit and which accounts it covers", "Local governments should hold operating cash to cover payroll through delayed transfers", "Media and civil society should report who bears losses and on what terms" ], "watch": [ "Unemployment claims", "Mortgage rates and arrears", "Late payment of public salaries and benefits" ], "relevance": 3 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Origin of the technology and property repricing; the largest non-bank sector and the dollar funding markets on which others depend." }, { "region": "europe", "exposure": "High", "rationale": "Banks are exposed to property and to domestic government debt; several members have high debt and limited fiscal room." }, { "region": "china", "exposure": "High", "rationale": "Property losses and local government debt are already large and export demand falls, although capital controls limit outflows." }, { "region": "indo-pacific", "exposure": "Medium", "rationale": "Open capital accounts and export dependence transmit the shock; reserves and current-account surpluses absorb much of it." }, { "region": "south-asia", "exposure": "High", "rationale": "Low reserves, large refinancing needs and dependence on imported fuel paid for in foreign currency." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Sovereign funds take valuation losses and oil revenue falls; reserves cover the exporters but not the importers of the region." }, { "region": "africa", "exposure": "High", "rationale": "International bond market access closes, trade finance is withdrawn and creditor groups are divided." }, { "region": "latin-america", "exposure": "High", "rationale": "Currency depreciation, lower commodity prices and foreign-currency debt arrive together." }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "Commodity revenue falls; Central Asian borrowers are exposed, while Russia is already largely outside Western funding markets." } ], "indicators": [ { "name": "Cyclically adjusted price to earnings ratio for US equities", "source": "Robert Shiller, Yale University, online data", "threshold": "above 35", "cadence": "monthly" }, { "name": "US high-yield corporate bond spread", "source": "ICE BofA US High Yield Index option-adjusted spread, published by the Federal Reserve Bank of St. Louis (FRED)", "threshold": "above 800 basis points", "cadence": "daily" }, { "name": "Emerging-market sovereign bond spreads", "source": "J.P. Morgan EMBI Global Diversified", "threshold": "ten or more sovereigns above 1,000 basis points", "cadence": "daily" }, { "name": "Cross-border bank claims", "source": "BIS locational banking statistics", "threshold": "contraction of more than 10 per cent over four quarters", "cadence": "quarterly" }, { "name": "Commercial bank deposits and borrowings", "source": "Federal Reserve H.8 statistical release", "threshold": null, "cadence": "weekly" }, { "name": "Use of central bank dollar swap lines", "source": "Federal Reserve H.4.1 statistical release", "threshold": "outstanding swaps above US$100 billion", "cadence": "weekly" }, { "name": "Commercial property prices", "source": "BIS commercial property price statistics", "threshold": "fall of more than 20 per cent from peak in two or more major economies", "cadence": "quarterly" }, { "name": "Sovereign gross financing needs", "source": "IMF Fiscal Monitor", "threshold": "above 15 per cent of GDP for an emerging-market borrower", "cadence": "twice a year" } ], "compounds": { "triggers": [ { "id": "S05", "note": "Disputes over loss allocation and spending cuts can produce a contested transfer of power in a nation that has lost market access." }, { "id": "S01", "note": "Governments respond to the recession with tariffs, capital restrictions and preference for domestic suppliers." }, { "id": "S11", "note": "A cluster of sovereign defaults creates the pressure for a common creditor framework." }, { "id": "S13", "note": "Shared financial distress has prompted cooperation between the two before" } ], "triggered_by": [ { "id": "S01", "note": "Loss of critical inputs and export markets reprices exposed equities and credit." }, { "id": "S03", "note": "A war that closes a sea route raises energy prices and risk premia together." }, { "id": "S09", "note": "Loss of confidence in digital signatures interrupts payments and settlement and prompts withdrawals." }, { "id": "S10", "note": "A pandemic stops activity and produces a rush for cash, as in March 2020." }, { "id": "S05", "note": "Only where the nation is a reserve-currency issuer or a major financial centre." }, { "id": "S07", "note": "Only where the core is a global financial centre. Elsewhere the effect is a wider spread for one sovereign." }, { "id": "S08", "note": "Revenue shortfalls, arrears among professional households and a repricing of labour-intensive services firms weaken sovereign and credit positions." }, { "id": "S15", "note": "if hydrocarbon assets and exporter sovereign debt are repriced abruptly" }, { "id": "S19", "note": "longevity revisions add to the pension liabilities of ageing sovereigns; a contributing pressure, not a cause alone" } ], "amplified_by": [ { "id": "S08", "note": "Displacement of professional employment raises household and commercial property defaults." } ], "triggered_by_other": [], "amplifying_trends": [ "Stretched asset valuations", "Non-bank finance growth", "Bank funding & deposit mobility", "Sovereign debt & interest burden", "Sovereign creditor fragmentation", "Capital concentration in AI", "Commercial property repricing", "External liquidity buffer requirements" ] }, "open_questions": [ "Whether one record can serve both the global event and its national face, or whether the single-nation sovereign funding crisis needs its own likelihood as an idiosyncratic event.", "Whether Standard Severe should assume that the major central banks are free to ease, or should carry the inflationary case in which they are not.", "How to treat nations with closed capital accounts, where regional exposure is rated High but the funding channel is weak.", "Whether 'several governments' should be fixed as a number. The record uses eight, which the specification does not state." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "The central dispute is **who bears the losses**: bank creditors, taxpayers or foreign lenders. Governments that guarantee all bank liabilities weaken their own credit.", "economic": "Global equities fall **40 per cent** and cross-border private lending contracts by a quarter. Funding markets stay impaired for nine months.", "social": "Unemployment rises. Where the state loses market access, **public salaries are paid late** and fuel and medicines are rationed.", "technological": "Deposits leave through mobile applications within hours. **Data-centre and venture financing** contracts, while payment and settlement systems must keep operating.", "legal": "**Resolution regimes** and deposit insurance limits decide where losses fall. Divided creditor groups slow sovereign restructuring.", "environmental": "Commodity demand and prices fall. **Clean energy and adaptation projects** lose financing as lenders withdraw from long-dated assets." }, "regions": { "north-america": "**Origin of the repricing** in technology and commercial property. Central bank purchases and swap lines keep core dollar markets working.", "europe": "Banks hold property loans and **domestic government debt**. High-debt members face the widest spreads.", "china": "**Property and local government debt** losses deepen and export demand falls. Capital controls limit outflows.", "indo-pacific": "Open capital accounts transmit the shock, but **reserves and surpluses** absorb much of it.", "south-asia": "**Low reserves** and large refinancing needs. Foreign currency for fuel and medicines runs short.", "gulf-middle-east": "Sovereign funds take valuation losses and oil revenue falls. **Reserves protect the exporters**, not the importers of the region.", "africa": "**Bond market access closes** and trade finance is withdrawn. Divided creditors delay restructuring.", "latin-america": "**Depreciation and lower commodity prices** arrive together and raise the cost of foreign-currency debt.", "russia-eurasia": "**Commodity revenue falls**. Central Asian borrowers are exposed; Russia is largely outside Western funding markets." }, "evolution": { "lead_indicators": "US equities exceed 35 times cyclically adjusted earnings and **commercial property prices** fall more than 20 per cent from peak. High-yield spreads pass 800 basis points.", "triggers": "Large technology companies cut data-centre spending plans and lenders mark down office and data-centre loans. The **repricing of technology and commercial property** starts withdrawals from leveraged funds.", "immediate": "Within ten days private credit funds suspend redemptions and exposed banks lose **a fifth of deposits in two working days**. Global equities fall 40 per cent within weeks.", "post_immediate": "Cross-border private lending contracts by a quarter over two quarters and trade finance is cut. Vulnerable sovereign spreads rise 500 basis points and **eight governments lose market access**.", "stabilisation": "Funding markets stay impaired for **nine months**, until investment-grade issuance resumes. By then unemployment in advanced economies is three percentage points higher and technology investment a third lower.", "long_term": "Governments that guaranteed all bank liabilities spend **years servicing the cost**. Divided creditors slow debt restructuring and central banks are pressed to hold more government debt." } }, "history": [ { "edition": 2027, "rank": 2, "L2y": 3, "L10y": 4, "impact_systemic": 4, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Global financial crisis: the seizure is specified to reach sovereign borrowers and absorbs the first-pass sovereign funding crisis; onset moved from days to weeks, the equity fall set at 40 per cent and each rating lowered by one step." } ], "citation": "GINC (2027). Scenario S02 A global funding seizure reaches sovereign balance sheets, Scenario Library v0.5. scenarios.ginc.org/scenarios/global-funding-seizure" }, { "id": "S03", "slug": "regional-war-spillover", "title": "A regional war closes a globally important sea route", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "B", "short_title": "Regional war spillover", "thematics": [ "economic-security-supply-chains", "climate-energy-resources", "resilience-crisis-preparedness" ], "likelihood_type": "systemic", "likelihood_note": "Likelihood is for any theatre that meets the definition, not for a named strait.", "scores": { "likelihood_2y": { "band": 3, "rationale": "Deep closures have occurred, but the definition also requires six months of conventional warfare with a major power engaged and 90 days at a 70 per cent loss of traffic. The 2026 Hormuz episode came close on traffic; its fighting lasted weeks. Several theatres carry the risk independently, which holds the band at Possible and not Unlikely." }, "likelihood_10y": { "band": 4, "rationale": "Over ten years the test is whether any contested strait sees sustained warfare with a major power engaged. Disputes in the Gulf, the Taiwan Strait, the Red Sea and the Black Sea are unresolved, and long-range strike is now held by regional states and armed groups. Together they place the event in the Likely band. The six-month threshold keeps it below Highly likely." }, "impact_systemic": { "level": 4, "rationale": "Lloyd's range for a conflict that closes major trade routes runs from US$7.8 trillion to US$50 trillion over five years. A six-month war with a 90-day closure, doubled oil and fourfold gas sits above the weighted case and below the extreme one. Damage to export facilities and depleted stocks extend the loss beyond the closure." }, "impact_national": { "level": 4, "rationale": "A typical highly exposed nation rations fuel, funds subsidies and defence together, evacuates nationals and receives displaced people. Security and essential services reach Severe. The level stops short of Catastrophic because the war is bounded: no nuclear use, a ceasefire at six months and a route that reopens. Belligerents and single-route importers may exceed it." }, "confidence": { "level": "medium", "reason": "Traffic, price and insurance paths rest on observed closures in 2022 and 2026. The conduct and length of a war involving a major power, and the scale of displacement, are judgements." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "days", "duration": "90 days (closure; the war lasts six months)", "warning": "days (after months of visible tension)", "scope": "global", "origin": "adversarial (great power and partners)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "years (traffic in months; facilities and stocks in years)" }, "summary": "A regional confrontation becomes six months of conventional warfare involving a major power and its partners. A globally important strait loses 70 per cent of normal commercial traffic for 90 days, followed by six months of partial recovery. Strikes and cyber operations damage nearby ports, energy facilities and communications. At the peak, oil prices are twice and gas prices four times their pre-war level, and war-risk insurance on affected routes triples. Nations must manage defence commitments, evacuation, displaced people and fuel rationing together. The test assumes neither rapid victory nor nuclear escalation. The Strait of Hormuz is the default theatre; other straits are variants.", "narrative": { "dateline": "March 2031", "text": "The confrontation had been building for months, but the war itself began within a week. In early April 2030 an exchange of strikes between a regional state and a major power with forces in the Gulf became a sustained air, missile and naval campaign, and two partner states joined within days. War-risk underwriters withdrew standard cover for the strait on the third day. Owners held ships outside it, and transits fell from about a hundred a day to fewer than thirty, most of them under escort.\n\nThe closure lasted 90 days at that level. Missiles and drones damaged two export terminals, a gas liquefaction plant and a container port. Cyber operations interrupted port systems and a regional telecommunications operator for several days at a time, and satellite navigation was unreliable across the theatre. Crude oil reached twice its pre-war price in the fifth week. Spot gas reached four times its pre-war price in the eighth, when buyers in East Asia, South Asia and Europe were bidding for the same cargoes. War-risk premiums on the affected routes tripled.\n\nGovernments faced several tasks at once. Importing states released emergency stocks in the second week and introduced fuel allocation for industry in the fourth; several then found that their plans assumed a closure of 30 days. States with nationals in the region ran evacuations by air and sea while commercial flights were suspended, and neighbouring countries received displaced people in numbers their reception systems had not planned for. Allied governments were asked for ships, air defence interceptors and basing. Interceptors and precision munitions were used faster than they could be made. Reservists were recalled in the belligerent states and in two of their partners.\n\nThe economic effects reached beyond the energy importers. Fertiliser prices followed gas. Freight rates rose on routes far from the fighting as ships were rerouted and insurers repriced. Central banks tightened policy against inflation that came from supply, and finance ministries funded fuel subsidies and defence orders in the same budget. Low-income importers in Africa and South Asia cut fuel and food purchases as their currencies fell. Exporters outside the theatre earned more, and so did some defence manufacturers.\n\nNeither side won quickly and neither used nuclear weapons. Large-scale operations continued until October 2030, when a ceasefire held. Mine clearance and the return of insurers and crews took longer: traffic through the strait recovered only in part over the following six months and had not returned to its pre-war level by March 2031. The damaged terminals were still under repair and emergency stocks were being rebuilt at higher prices. Munitions stocks were below their pre-war levels in every state that had fought or supplied.\n\nThe states that came through with least loss had more than one supply route, stocks sized for months, tested allocation and evacuation plans and forces able to sustain an escort commitment. The others had plans for a closure or for a war, but not for both together over six months." }, "anchors": [ { "shock_id": "hormuz-closure-2026", "date": "28 February to July 2026", "event": "Strait of Hormuz closure", "what_happened": "After strikes on Iran on 28 February, commercial shipping through the strait effectively halted from early March. War-risk premiums doubled and Brent rose above US$92 on 6 March. The first transits under a ceasefire took place on 8 April. On 2 July traffic stood at 34 transits a day against about 100 before the conflict.", "calibrates": "The traffic loss, the insurance path and the recovery horizon: about five weeks of closure produced four months of disruption. This scenario extends the fighting to six months." }, { "shock_id": "suez-canal-closure-1967", "date": "June 1967 to June 1975", "event": "Closure of the Suez Canal", "what_happened": "Egypt closed the canal at the start of the June 1967 war and it stayed shut until 5 June 1975. Fifteen merchant ships were trapped inside it for the eight years. Traffic between Europe and Asia was rerouted around the Cape of Good Hope.", "calibrates": "A war can close a sea route for far longer than the fighting lasts. Sets the upper bound on duration for the Standard Extreme setting and shows that trade adapts by rerouting at a cost." }, { "shock_id": "iran-iraq-tanker-war-1984", "date": "1984–1988", "event": "Iran–Iraq tanker war", "what_happened": "Iran and Iraq attacked merchant shipping in the Gulf over four years and several hundred vessels were hit. The strait was never closed. From July 1987 the United States Navy escorted reflagged Kuwaiti tankers.", "calibrates": "Sustained warfare beside a strait without closure: the Standard Major setting, and the escort burden that falls on outside navies." }, { "shock_id": "ukraine-2022", "date": "24 February 2022 onward", "event": "Russia's full-scale invasion of Ukraine", "what_happened": "A major power began a conventional war that many expected to be short; it continued for years. Ukraine's Black Sea ports were closed to commercial shipping until a grain corridor opened in July 2022. More than 5 million people had left the country by late April 2022. Artillery and air defence munitions were used faster than supporting states produced them.", "calibrates": "The assumption of no rapid victory, the speed and scale of displacement and the munitions and alliance load of a long conventional war." }, { "shock_id": "russian-gas-cut-off-2022", "date": "2022", "event": "Russian gas cut-off", "what_happened": "Russian pipeline gas deliveries to Europe fell sharply during 2022. The European benchmark gas price peaked near €340 per megawatt hour in August 2022, and European governments allocated hundreds of billions of euros to energy support.", "calibrates": "The gas price multiple and the fiscal cost of household and industrial support. A fourfold rise is within what has been observed." }, { "shock_id": "lloyds-geopolitical-conflict-scenario-2024", "date": "October 2024", "event": "Lloyd's geopolitical conflict scenario", "what_happened": "Lloyd's modelled a conflict that closes major trade routes. The five-year global loss was US$14.5 trillion on a probability-weighted basis, within a range of US$7.8 trillion to US$50 trillion.", "calibrates": "The systemic impact level: this scenario sits above the weighted case and below the extreme one." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "30 days (closure; warfare for two months)", "severe": "90 days (closure; warfare for six months)", "extreme": "1 year (closure; warfare for 18 months)" }, "onset": { "major": "days", "severe": "days", "extreme": "days" }, "warning": { "major": "months", "severe": "days (after months of visible tension)", "extreme": "none" }, "scope": { "major": "regional", "severe": "global", "extreme": "global" }, "origin": { "major": "adversarial (neighbour)", "severe": "adversarial (great power and partners)", "extreme": "adversarial (great power and partners)" }, "external_support": { "major": "full", "severe": "partial", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S04)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "current plans executed" }, "recovery_horizon": { "major": "months", "severe": "years (traffic in months; facilities and stocks in years)", "extreme": "structural" } }, "specific": [ { "name": "Theatre and strait", "default": "Strait of Hormuz and the Gulf", "range": "options: Taiwan Strait and Luzon Strait / Malacca / Bab el-Mandeb and Suez / Turkish Straits / Baltic approaches", "unit": null, "note": "The price path below is calibrated to the default. An East Asian theatre replaces part of the energy loss with a loss of semiconductor and manufactured goods supply." }, { "name": "Duration of conventional warfare", "default": "6", "range": "2 to 18", "unit": "months", "note": "Large-scale operations involving a major power and its partners, ending in a ceasefire and not in a decisive result." }, { "name": "Loss of commercial traffic through the strait", "default": "70", "range": "40 to 100", "unit": "per cent of normal transits", "note": "Insurer withdrawal and owners' decisions account for most of the loss; a declared blockade is not required." }, { "name": "Duration of closure at that loss", "default": "90", "range": "30 to 365", "unit": "days", "note": "Followed by six months of partial recovery (range 2 to 18 months) while mines are cleared and insurers and crews return." }, { "name": "Oil price at the peak", "default": "2", "range": "1.5 to 3", "unit": "multiple of the pre-war price", "note": "Carried over from the first-pass energy supply scenario." }, { "name": "Gas price at the peak", "default": "4", "range": "2 to 6", "unit": "multiple of the pre-war price", "note": "Spot LNG and the benchmarks that follow it. Contracted pipeline gas moves less." }, { "name": "War-risk insurance on affected routes", "default": "3", "range": "1.5 to 10", "unit": "multiple of the pre-war premium", "note": "Where standard cover is withdrawn altogether, traffic depends on state-backed cover or escort." } ] }, "transmission": [ "Strikes begin and war-risk insurers withdraw cover. Commercial transits through the strait fall by 70 per cent within days.", "Crude, LNG and refined product cargoes stop arriving. Oil prices double and gas prices rise fourfold at the peak, with physical shortages for direct importers.", "Strikes and cyber operations damage ports, energy facilities and communications near the theatre, which extends the supply loss beyond the closure.", "Belligerents and allies commit forces, interceptors and munitions faster than industry replaces them. Governments evacuate nationals and receive displaced people.", "Freight and insurance costs rise on all routes. Fertiliser, petrochemical and component supplies tighten and food import costs rise.", "Inflation, subsidies and defence spending widen deficits. Central banks tighten, and the currencies and sovereign spreads of import-dependent states come under pressure.", "Importing governments ration fuel and release reserves. Public tolerance and alliance cohesion weaken as the war passes its third month.", "After a ceasefire, mine clearance, repairs and the return of insurers and crews take six months. Stocks and munitions are rebuilt at higher cost." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "High", "channel": "combat operations, alliance commitments, escort and mine clearance, munitions use above production, evacuation of nationals" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "strike and cyber damage to ports, energy facilities and communications; pipelines, storage and refining flexibility" }, { "dimension": "Hard", "domain": "critical-technology", "load": "Medium", "channel": "navigation interference, cable damage, demand for drone and missile defence, interrupted component shipments" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "fuel rationing, reserve release, evacuation and reception of displaced people run concurrently" }, { "dimension": "Soft", "domain": "human-capital", "load": "Medium", "channel": "casualties, displacement, reservists leaving the workforce, health systems receiving evacuees" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "alliance cohesion, public consent for commitments and rationing, information operations, alignment of non-belligerents" }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "inflation, current account, subsidy and defence spending, sovereign spreads and currency pressure on importers" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "freight and insurance costs, rerouting delays, input shortages, loss of export access" }, { "dimension": "Economic", "domain": "energy-resources", "load": "High", "channel": "crude, LNG and refined product shortfalls; strategic stock drawdown; fertiliser feedstock prices" } ], "stakeholders": { "government": { "exposure": "Alliance commitments, nationals in the theatre, import route concentration, reserve days and munitions stocks", "actions": [ "Write fuel allocation plans for a 90-day closure followed by six months of partial recovery", "Exercise evacuation, reception of displaced people and reserve release as concurrent tasks", "Agree escort, basing and munitions-sharing arrangements with partners before a crisis" ], "watch": [ "Force deployments and reserve call-ups in the theatre", "Daily transits and maritime security incident reports", "Emergency stock days and interceptor inventories" ], "relevance": 5 }, "technology": { "exposure": "Subsea cables, satellite navigation, regional data centres and component shipments routed through the theatre", "actions": [ "Map cable routes, landing stations and suppliers that depend on the theatre", "Secure backup power fuel and alternative routing for critical services", "Prepare for navigation interference and state-linked cyber operations against port and energy systems" ], "watch": [ "Satellite navigation interference reports", "Cable faults and repair-ship availability", "Diesel and component lead times" ], "relevance": 4 }, "investors": { "exposure": "Shipping, insurance, energy, airlines, defence producers and the sovereign debt of energy importers", "actions": [ "Stress portfolios on doubled oil, fourfold gas and tripled war-risk premiums over nine months", "Review war exclusions and accumulation across marine, aviation and political risk lines", "Assess sovereign exposure to importers with low reserves and high fuel subsidy costs" ], "watch": [ "War-risk premiums and changes to listed areas", "Tanker and LNG freight rates", "Sovereign spreads of energy importers" ], "relevance": 5 }, "public": { "exposure": "Fuel prices and availability, household energy bills, relatives in the region and reserve service", "actions": [ "Follow official travel advice and register with consular services when in the region", "Keep household preparedness in line with national guidance", "Rely on official allocation notices and not on unverified reports" ], "watch": [ "Travel advisories", "Pump prices and rationing announcements", "Reserve call-up notices" ], "relevance": 3 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Alliance and partner commitments draw forces and munitions; net energy exports do not shield consumers from world prices." }, { "region": "europe", "exposure": "High", "rationale": "LNG, jet fuel and diesel imports; trade with Asia through Suez; allied obligations and arrivals of displaced people." }, { "region": "china", "exposure": "High", "rationale": "The world's largest crude importer, supplied through Hormuz and Malacca; a belligerent in the East Asian variant." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Japan, Korea and Taiwan import most of their energy by sea; ASEAN straits and allied bases are exposed." }, { "region": "south-asia", "exposure": "High", "rationale": "Crude and LNG imports and remittances from the Gulf depend on the theatre; fiscal buffers are thin." }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "Theatre of the default case: facilities struck, exports stopped, residents and migrant workers displaced." }, { "region": "africa", "exposure": "Medium", "rationale": "Fuel, food and fertiliser import costs rise and East African freight is disrupted; some oil exporters gain." }, { "region": "latin-america", "exposure": "Medium", "rationale": "Distant from the fighting; importers pay more for fuel and fertiliser while oil and grain exporters gain." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Exporters gain on price, but Black Sea and Baltic variants place the region in the theatre and transit routes are disrupted." } ], "indicators": [ { "name": "Daily commercial transits by strait", "source": "IMF PortWatch; Lloyd's List Intelligence", "threshold": "30 per cent below the 12-month average for seven days", "cadence": "daily" }, { "name": "Attacks on and seizures of merchant vessels", "source": "UK Maritime Trade Operations (UKMTO)", "threshold": "three or more incidents in 30 days in one theatre", "cadence": "daily" }, { "name": "War-risk listed areas and premium as a share of hull value", "source": "Lloyd's Market Association Joint War Committee", "threshold": "a new listed area, or premiums at twice the level of 90 days earlier", "cadence": "weekly" }, { "name": "Brent crude and spot LNG benchmark prices", "source": "US Energy Information Administration; ICE", "threshold": "Brent 30 per cent above its 90-day average", "cadence": "daily" }, { "name": "Emergency oil stocks in days of net imports", "source": "International Energy Agency", "threshold": "below 90 days", "cadence": "monthly" }, { "name": "Armed conflict events and cross-border strikes in the theatre", "source": "ACLED", "threshold": "a rise sustained over four weeks", "cadence": "weekly" }, { "name": "Cross-border displacement from the theatre", "source": "UNHCR Operational Data Portal", "threshold": null, "cadence": "weekly" }, { "name": "Force deployments, reserve call-ups and advice to nationals to leave", "source": null, "threshold": "departure advice issued by three or more governments", "cadence": "weekly" } ], "compounds": { "triggers": [ { "id": "S02", "note": "Energy-driven inflation, tighter policy and war spending raise sovereign spreads for importers" }, { "id": "S06", "note": "Fertiliser shortages and freight costs reduce the availability of staple imports" }, { "id": "S01", "note": "Sanctions and export controls between the belligerents' partners harden into blocs" }, { "id": "S04", "note": "A belligerent extends cyber operations and sabotage to the infrastructure of supporting states" }, { "id": "S09", "note": "A major power at war has the strongest reason to use or reveal a concealed capability." }, { "id": "S10", "note": "War and displacement remove surveillance and care, so an emerging pathogen spreads before detection." }, { "id": "S13", "note": "A war that closes a sea route shows both powers the cost of unmanaged escalation" }, { "id": "S14", "note": "A costly closure of a sea route forces the parties and guarantors to negotiate" }, { "id": "S15", "note": "a fuel price shock accelerates the move away from imported hydrocarbons" } ], "triggered_by": [ { "id": "S04", "note": "A campaign below the threshold of war escalates into open warfare" }, { "id": "S01", "note": "Division of trade into blocs removes the commercial restraint on confrontation" }, { "id": "S05", "note": "A disputed transfer of power in a state beside the strait invites intervention" }, { "id": "S06", "note": "Disputes over shared rivers and scarce grain raise the risk of armed confrontation between neighbours; a contributing cause only." } ], "amplified_by": [], "triggered_by_other": [ "An incident at sea or in the air between forces operating in close contact", "The collapse of a ceasefire or of agreed limits on missile and nuclear activity in the region" ], "amplifying_trends": [ "Great-power competition", "Long-range strike proliferation", "Contested maritime access", "Energy import dependence", "Defence industrial base & munitions", "Drone & autonomous warfare", "Asylum & migration system strain", "Strategic stockpiles & reserves" ] }, "open_questions": [ "Whether one record can hold both a Gulf war and a Taiwan Strait war. The second involves two major powers directly and removes semiconductor supply, which the energy price path does not describe.", "The specification gives no figure for displaced people, evacuated nationals or facility damage, so three of the loads rest on judgement and not on a stated parameter.", "One panel member rated national impact at 5. Whether belligerents and single-route importers should be scored apart from the typical highly exposed nation.", "How to treat energy exporters whose revenue stops because they are inside the theatre, as against exporters outside it that gain." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Allied governments are asked for ships, interceptors and basing while **neither side wins quickly**. Alliance cohesion is tested past the third month.", "economic": "**Oil doubles and gas rises fourfold** at the peak. War-risk insurance triples and central banks tighten against supply-driven inflation.", "social": "Governments run **evacuation, reception of displaced people and fuel rationing** together. Reservists are recalled in belligerent and partner states.", "technological": "Drones, missiles and cyber operations damage ports and communications. **Interceptors are used faster than they are made**.", "legal": "**War-risk underwriters withdraw cover** within days. Sanctions, neutrality and freedom of navigation are contested throughout.", "environmental": "Strikes on terminals and tankers put **enclosed waters at risk of oil spills**. Importers burn more coal while gas is short." }, "regions": { "north-america": "**Forces and munitions are committed** under alliance obligations. Net energy exports do not shield consumers from world prices.", "europe": "**LNG, jet fuel and diesel** run short and trade with Asia is rerouted. Allied obligations and displaced people add to the load.", "china": "The **world's largest crude importer** loses Gulf supply, and is a belligerent in the East Asian variant.", "indo-pacific": "Japan, Korea and Taiwan **import most of their energy by sea** and ration industrial users within weeks.", "south-asia": "**Crude, LNG and Gulf remittances** all depend on the theatre, and fiscal buffers are thin.", "gulf-middle-east": "The theatre of the default case: **facilities are struck and exports stop**, and residents and migrant workers are displaced.", "africa": "Rated Medium: **fuel, food and fertiliser costs** rise and East African freight is disrupted, while some oil exporters gain.", "latin-america": "Rated Medium: **distant from the fighting**. Importers pay more for fuel and fertiliser; oil and grain exporters gain.", "russia-eurasia": "Exporters gain on price, but **Black Sea and Baltic variants** place the region in the theatre." }, "evolution": { "lead_indicators": "Forces deploy, reserves are called up and **three or more governments advise nationals to leave**. Attacks on merchant vessels recur and war-risk premiums double within 90 days.", "triggers": "After months of visible tension, an exchange of strikes between a regional state and a major power becomes **sustained conventional warfare** within a week. Partner states join within days.", "immediate": "War-risk underwriters withdraw cover on the third day and **transits fall 70 per cent**. Importing states release emergency stocks in the second week and governments begin evacuating nationals.", "post_immediate": "During the 90-day closure oil reaches **twice and gas four times** its pre-war price. Fuel is allocated to industry, fertiliser and freight costs rise and central banks tighten.", "stabilisation": "A ceasefire holds after six months of war. Traffic **recovers only in part over the following six months** while mines are cleared and insurers and crews return.", "long_term": "Export terminals and emergency stocks take **years to restore**, at higher prices. Munitions stocks remain below pre-war levels in every state that fought or supplied." } }, "history": [ { "edition": 2027, "rank": 3, "L2y": 3, "L10y": 4, "impact_systemic": 4, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Maritime chokepoint closure: the event is now a six-month regional war involving a major power, with the strait closure and the price path of the first-pass Energy supply shock inside it. Likelihood bands lowered from 4 and 5 to 3 and 4, and national impact from 5 to 4." } ], "citation": "GINC (2027). Scenario S03 A regional war closes a globally important sea route, Scenario Library v0.5. scenarios.ginc.org/scenarios/regional-war-spillover" }, { "id": "S04", "slug": "hybrid-coercion", "title": "Hybrid coercion ends in an infrastructure blackout", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "B", "short_title": "Hybrid coercion", "thematics": [ "resilience-crisis-preparedness", "ai-cyber-digital", "information-integrity-social-cohesion" ], "likelihood_type": "idiosyncratic", "likelihood_note": "clustered", "scores": { "likelihood_2y": { "band": 3, "rationale": "The campaign is already observed across the exposed cluster: Baltic cable damage in 2024, drone incursions and airport closures in 2025. The rating is for the full event, which requires a blackout across half of national output. Outside Ukraine no state has yet used concealed access to that effect, although advisories in 2024 confirmed that access was in place. For a nation in the cluster the probability sits in the 1 to 5 per cent band; elsewhere it is lower." }, "likelihood_10y": { "band": 4, "rationale": "Over ten years the conditions accumulate. Access placed in control systems persists for years, grids and telecommunications depend more on remote operation and each unanswered incident lowers the expected cost of the next. Ukraine's grid was attacked by cyber means in 2015 and 2016 and by missile from 2022. For an exposed nation a single activation within a decade falls in the 5 to 25 per cent band." }, "impact_systemic": { "level": 2, "rationale": "The event strikes one nation at a time and the direct output loss is national. Systemic cost arrives through higher insurance and security spending across the exposed cluster, interrupted cross-border cables and interconnectors and weaker deterrence. This is Moderate: band shifts in one domain in a few nations. The level would rise if the target hosted a global financial, cloud or semiconductor hub." }, "impact_national": { "level": 4, "rationale": "Essential services set the level. Areas producing half of national output lose power and communications for 72 hours and services are rationed for 30 days, with payments, water and hospital care degraded. Security and social cohesion are also damaged, because the state is shown unable to protect ordinary life and attribution divides opinion. Physical destruction is limited and services return within months, which holds the rating at Severe and below Catastrophic." }, "confidence": { "level": "medium", "reason": "All three panel members agreed the impact levels and two agreed the likelihood bands. The campaign is well evidenced; activation of concealed access against a state not at war is not." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "weeks", "duration": "1 year (72-hour blackout, then 30 days of rationing)", "warning": "months (the campaign is visible; the peak comes without notice)", "scope": "national", "origin": "adversarial (great power or neighbour)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "years (services restored within months)" }, "summary": "A hostile state conducts a deniable campaign below the threshold of war for 12 months: sabotage of subsea cables and energy assets, cyber intrusions, interference with satellite positioning, drone incursions and information operations. At the peak, reached over weeks, it activates concealed access to power and telecommunications systems. Areas producing half of national output lose reliable power and communications for 72 hours and essential services are rationed for 30 days. Attribution remains contested and threats to crews deter repair. The government must coordinate intelligence, operators and public communication, restore services by manual fallback and resist coercion without escalating before it can show evidence. Conventional invasion is outside this scenario.", "narrative": { "dateline": "June 2030", "text": "The campaign began in March 2029 and no single incident in it was an act of war. A data cable to the islands was cut by a dragging anchor, and the vessel's owner proved to be a company registered six weeks earlier. A fire destroyed a transformer depot; the men charged had been recruited through a messaging application. Satellite positioning failed across the eastern region for days at a time, and aircraft approach procedures, ambulance dispatch and farm machinery guidance failed with it. Drones closed the capital's airport twice in one month. Each incident was investigated and attributed some weeks later, and each attribution was disputed by accounts that had not existed a month before.\n\nOver the same months the security service found foreign access in the networks of two electricity distributors and one mobile operator. It was removed where it was found. It was not found everywhere.\n\nIn the second week of February 2030 the adversary used what remained. Protection settings at eleven transmission substations were changed remotely while control room displays continued to show normal values. Supply failed across the capital and the two industrial provinces, which together produced half of national output. Mobile networks ran on batteries for about four hours. Card payments stopped. Core systems at the mobile operator had been wiped, so restoring power did not restore service.\n\nReliable power and communications returned after 72 hours. Engineers restored the grid by driving to substations and switching by hand, because remote control could not be trusted. Two repair vessels sent to a damaged interconnector turned back after unidentified drones followed them and an anonymous warning reached their insurer. For the next 30 days electricity was supplied on a published rota. Hospitals, water treatment and food distribution were served first and industry worked three days a week. Several hospitals found that their fuel contracts had assumed an outage of 24 hours.\n\nThe government did not name the state responsible for nine days. The intelligence assessment was firm but rested on sources that could not be published, and ministers judged that an accusation without public evidence would divide allies. During those nine days a forged cabinet memorandum circulated which appeared to show that neglected maintenance had caused the outage. A message passed through a third government offered restraint in exchange for withdrawal from a defence agreement. The offer was refused. Allies consulted, issued a statement and sent grid engineers and mobile generation, but agreed no collective measure.\n\nBy May 2030 services were normal. The costs that remained were of a different kind. Two foreign manufacturers deferred planned plants and insurers excluded state-backed sabotage from infrastructure cover. A parliamentary inquiry recorded that no minister had held authority over operators, the intelligence service and public communication at the same time. It also found that households which had kept water, a battery radio and cash managed the 72 hours with little difficulty, and that fewer than one in three had done so." }, "anchors": [ { "shock_id": "ukraine-grid-attacks-2015", "date": "December 2015, December 2016, 2022–2024", "event": "Ukraine grid attacks", "what_happened": "On 23 December 2015 attackers used access gained months earlier to open breakers remotely at three Ukrainian distribution companies. About 225,000 customers lost power for up to six hours and operators restored supply by manual switching. A second attack in December 2016 cut part of Kyiv's supply for about an hour. From 2022 missile and drone strikes on generation and transmission imposed scheduled outages nationwide.", "calibrates": "The only documented cases of a state cutting power through access placed in advance. They show that manual restoration works within hours where it is still possible, and that an outage of 72 hours is well beyond what cyber means alone have yet achieved." }, { "shock_id": "volt-typhoon-advisory-2024", "date": "7 February 2024", "event": "Volt Typhoon advisory", "what_happened": "The US Cybersecurity and Infrastructure Security Agency, the National Security Agency, the Federal Bureau of Investigation and partner agencies reported that a state-sponsored group had compromised the networks of communications, energy, transport and water operators in the United States. They assessed that the purpose was to enable disruption in a crisis and that access had been held in some networks for at least five years.", "calibrates": "Concealed access exists before any crisis and can stay undetected for years. It supports the Medium exposure for North America and the assumption that removal during the campaign is incomplete." }, { "shock_id": "kyivstar-network-attack-2023", "date": "12 December 2023", "event": "Kyivstar network attack", "what_happened": "A destructive attack disabled the core network of Ukraine's largest mobile operator, which served about 24 million subscribers. Mobile and internet services were lost for several days and some air raid warning systems and bank terminals failed with them. Ukraine's security service said the attackers had been inside the network for months.", "calibrates": "The telecommunications half of the peak. Restoring power does not restore a network whose core systems have been wiped, and services that depend on the network fail with it." }, { "shock_id": "baltic-subsea-cable-damage-2024", "date": "17–18 November and 25 December 2024", "event": "Baltic subsea cable damage", "what_happened": "Two telecommunications cables, BCS East-West Interlink and C-Lion1, were damaged in the Baltic within a day of each other. On 25 December the Estlink 2 power cable between Finland and Estonia and several telecommunications cables were damaged, and Finland detained the tanker Eagle S. Estlink 2 was out of service for about six months.", "calibrates": "The campaign phase: damage by commercial vessels with disputed intent, slow legal process and repair of a power interconnector measured in months." }, { "shock_id": "nord-stream-sabotage-2022", "date": "September 2022", "event": "Nord Stream sabotage", "what_happened": "Explosions on 26 September 2022 ruptured three of the four strings of the Nord Stream 1 and Nord Stream 2 gas pipelines in the Baltic. Sweden and Denmark closed their investigations in February 2024 without naming a perpetrator.", "calibrates": "Attribution of sabotage at sea can remain contested for years, which is the condition the scenario sets for the government's response." }, { "shock_id": "iberian-blackout-2025", "date": "28 April 2025", "event": "Iberian blackout", "what_happened": "Spain and Portugal lost power across the peninsula within seconds, affecting tens of millions of people. Mobile networks, card payments and rail services failed during the outage. Most supply was restored within a day. Investigators found a technical cause and no evidence of attack.", "calibrates": "Restart times and the dependence of telecommunications and payments on power in an advanced grid. The scenario's 72 hours is longer because restoration is itself contested." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "90 days", "severe": "1 year (72-hour blackout, then 30 days of rationing)", "extreme": "3 years" }, "onset": { "major": null, "severe": "weeks", "extreme": null }, "warning": { "major": null, "severe": "months (the campaign is visible; the peak comes without notice)", "extreme": null }, "scope": { "major": null, "severe": "national", "extreme": "regional" }, "origin": { "major": null, "severe": "adversarial (great power or neighbour)", "extreme": null }, "external_support": { "major": "full", "severe": "partial", "extreme": "none" }, "concurrency": { "major": null, "severe": "standalone", "extreme": "plus one named scenario (S03)" }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": null }, "recovery_horizon": { "major": "months", "severe": "years (services restored within months)", "extreme": "years" } }, "specific": [ { "name": "Campaign duration", "default": "12 months", "range": "6 to 36", "unit": "months", "note": "From the first attributed incident to the end of rationing." }, { "name": "Vectors active", "default": "5", "range": "3 to 8", "unit": "count", "note": "Cable and energy sabotage, cyber intrusion, positioning interference, drone incursion and information operations at the default." }, { "name": "Share of national output in the blackout area", "default": "50 per cent", "range": "20 to 80", "unit": "per cent of GDP", "note": "Measured by where output is produced, not by population." }, { "name": "Loss of reliable power and communications", "default": "72 hours", "range": "24 hours to 10 days", "unit": "hours", "note": "Ends when supply is stable without manual intervention at each substation." }, { "name": "Rationing of essential services", "default": "30 days", "range": "7 to 90", "unit": "days", "note": "Electricity on a published rota, with hospitals, water and food distribution served first." }, { "name": "Attribution", "default": "contested", "range": "options: established publicly within days / never established", "unit": null, "note": "Contested means the government holds a firm assessment that it cannot support with published evidence." }, { "name": "Kinetic threshold crossed", "default": "no", "range": null, "unit": null, "note": "Yes at Extreme, where the campaign leads to open armed attack." } ] }, "transmission": [ "Sabotage, interference and intrusions degrade cables, energy assets and positioning services piecemeal over 12 months and spread security services across several vectors.", "Slow and contested attribution prevents a proportionate response, and information operations turn each incident into a domestic dispute about the government's competence.", "The adversary activates concealed access in grid and telecommunications control systems; areas producing half of national output lose power and communications for 72 hours.", "Payments, water, fuel distribution and hospital care degrade within hours to days as backup power and battery reserves run out.", "Operators restore supply by manual switching because remote control cannot be trusted; threats to crews and vessels delay physical repair.", "Essential services are rationed for 30 days; industry works reduced hours and logistics slow.", "The adversary attaches demands to restraint; allies consult, but the gap between classified evidence and public proof limits collective action.", "Insurers and investors reprice infrastructure and location risk, and deterrence weakens where the campaign is seen to have gone unanswered." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "High", "channel": "counter-intelligence, cyber defence, maritime and air surveillance, protection of repair crews and key sites" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "grid and telecommunications control systems, subsea cables, interconnectors, backup power, manual restoration" }, { "dimension": "Hard", "domain": "critical-technology", "load": "Medium", "channel": "control-system security, alternatives to satellite positioning and timing, trusted equipment supply" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "attribution, coordination of intelligence, operators and communication, rationing administration, legal powers below the threshold of war" }, { "dimension": "Soft", "domain": "human-capital", "load": "Low", "channel": "strain on emergency and health services; shortage of skilled restoration engineers" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "information integrity, public trust under contested attribution, alliance diplomacy, resistance to coercion" }, { "dimension": "Economic", "domain": "macro-financial", "load": "Low", "channel": "payments interrupted for 72 hours; insurance exclusions and risk premia on infrastructure" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "Medium", "channel": "production stoppages, reduced working weeks under rationing, logistics disruption, deferred foreign investment" }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "sabotage of energy assets and interconnectors; generation and fuel stocks under 30 days of rationing" } ], "stakeholders": { "government": { "exposure": "Protection of subsea and energy assets, speed of attribution, authority over operators in a crisis and legal powers below the threshold of war", "actions": [ "Assign one minister authority over intelligence, operators and public communication for hybrid incidents", "Require operators to exercise manual restoration without remote control every year", "Agree in advance with allies the evidence standard and the responses that follow attribution" ], "watch": [ "Incident counts by vector", "Time from incident to public attribution", "Intrusions found in operators' control systems" ], "relevance": 5 }, "technology": { "exposure": "Grid and telecommunications control systems, subsea cables, data centres and services that depend on satellite positioning and timing", "actions": [ "Separate control networks from corporate networks and test restoration from offline backups", "Hold 72 hours of backup power at core telecommunications sites", "Diversify cable routes and keep an alternative to satellite timing" ], "watch": [ "Advisories on state access to control systems", "Cable faults and repair vessel availability", "Positioning interference reports" ], "relevance": 4 }, "investors": { "exposure": "Utilities, telecommunications operators, insurers and industrial assets in the exposed cluster", "actions": [ "Test portfolios against 72 hours without power and 30 days of rationing", "Review sabotage and war exclusions in infrastructure and business interruption cover", "Assess an operator's restoration plan before financing it" ], "watch": [ "War and sabotage risk listings", "Insurance exclusions for state-backed acts", "Deferred foreign investment in exposed regions" ], "relevance": 2 }, "public": { "exposure": "Loss of power, communications, payments and water for 72 hours, with false information about cause and responsibility", "actions": [ "Keep water, food, medicines, a battery radio and cash for 72 hours", "Know the official broadcast channel that works without mobile networks", "Check claims about the cause against official advisories before sharing them" ], "watch": [ "Official incident advisories", "Published rationing rotas", "Local authority guidance for vulnerable residents" ], "relevance": 3 } }, "regions": [ { "region": "north-america", "exposure": "Medium", "rationale": "Advisories in 2024 confirmed access placed in communications, energy and water operators; distance limits physical sabotage." }, { "region": "europe", "exposure": "High", "rationale": "The most active theatre: Baltic cable damage, drone incursions, airport closures and incendiary parcels, with dense cross-border cables and interconnectors." }, { "region": "china", "exposure": "Low", "rationale": "Low as a target: state control of operators and networks limits a deniable campaign." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Taiwan's subsea cables have been cut repeatedly; Japan, Korea, the Philippines and Australia face maritime coercion and intrusion into operators." }, { "region": "south-asia", "exposure": "Medium", "rationale": "Campaigns below the threshold of war are established between neighbours; grids have little reserve." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Drone and proxy attacks on energy and desalination assets; cable routes are concentrated in the Red Sea." }, { "region": "africa", "exposure": "Low", "rationale": "Few states face a capable state adversary with motive; fragile grids raise the damage where one does." }, { "region": "latin-america", "exposure": "Low", "rationale": "State-directed coercion of this kind is rare in the region." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Ukraine, Moldova, Georgia and Armenia are direct targets; grid attack by cyber means was first used here." } ], "indicators": [ { "name": "Subsea cable and pipeline faults with unexplained cause or attributed to anchor drag", "source": "International Cable Protection Committee", "threshold": "Two or more in one sea basin within 90 days", "cadence": "monthly" }, { "name": "Satellite positioning interference affecting civil aviation", "source": "European Union Aviation Safety Agency safety information bulletins; gpsjam.org", "threshold": "Interference over national territory on more than 10 days in a month", "cadence": "daily" }, { "name": "Advisories on state access placed in the control systems of energy and telecommunications operators", "source": "US Cybersecurity and Infrastructure Security Agency joint advisories; ENISA Threat Landscape", "threshold": "An advisory naming the nation's operators or their equipment suppliers", "cadence": "as issued" }, { "name": "Wide-area grid disturbances without an established technical cause", "source": "ENTSO-E Incident Classification Scale reports; NERC State of Reliability", "threshold": "Any wide-area incident with no technical cause established within 30 days", "cadence": "annual, with incident reports as issued" }, { "name": "Foreign information manipulation timed to infrastructure incidents", "source": "European External Action Service reports on foreign information manipulation and interference threats", "threshold": "Coordinated activity within 48 hours of two successive incidents", "cadence": "quarterly" }, { "name": "Sabotage and arson prosecutions linked to foreign services", "source": null, "threshold": "Three or more in 12 months", "cadence": "quarterly" }, { "name": "Alliance consultations on hybrid incidents", "source": "NATO statements on Article 4 consultations", "threshold": "A consultation requested by the nation or a neighbour", "cadence": "as issued" }, { "name": "War and sabotage risk listings for national waters and infrastructure", "source": "Lloyd's Market Association Joint War Committee listed areas", "threshold": "National waters added to the listed areas", "cadence": "as issued" } ], "compounds": { "triggers": [ { "id": "S05", "note": "contested attribution and forged evidence weaken the government's claim to competence" }, { "id": "S03", "note": "if the kinetic threshold is crossed" }, { "id": "S01", "note": "sanctions and equipment exclusions in response harden bloc division" }, { "id": "S07", "note": "A power and telecommunications blackout during extreme heat or cold turns a manageable event into an emergency in the core." } ], "triggered_by": [ { "id": "S03", "note": "campaign against states that support a belligerent" }, { "id": "S01", "note": "bloc rivalry supplies motive and removes economic restraint" }, { "id": "S09", "note": "forged signatures and decrypted credentials open control systems" }, { "id": "S05", "note": "A divided chain of command and contested attribution lower the cost of a hostile hybrid campaign." }, { "id": "S18", "note": "Concentrated identity and payment systems raise the consequence of concealed access" } ], "amplified_by": [ { "id": "S07", "note": "repair crews and reserves already committed" }, { "id": "S10", "note": "operator and emergency staff absent" } ], "triggered_by_other": [], "amplifying_trends": [ "Hybrid & grey-zone coercion", "State cyber intrusion & prepositioning", "Subsea cable & pipeline dependence", "Critical infrastructure protection", "Electromagnetic spectrum contest", "Foreign information manipulation", "Drone & autonomous warfare", "Whole-of-society resilience" ] }, "open_questions": [ "Whether the likelihood should be published for the exposed cluster and not per nation, since the base rate across the 197 nations understates exposure in Europe, the Indo-Pacific and among Russia's neighbours.", "Whether a 72-hour blackout across half of national output is the right Standard Severe peak, given that no state outside a war has yet experienced activation at that scale.", "Whether an onset of weeks describes the event or only its peak. The record rates the peak; the campaign that precedes it lasts months.", "How to rate a nation that is the author of a campaign and not its target." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "The adversary offers restraint in exchange for a policy concession. Allies consult and send engineers but agree **no collective measure**.", "economic": "Areas producing **half of national output** stop for 72 hours and work reduced hours for 30 days. Insurers exclude state-backed sabotage and investors defer plants.", "social": "A forged document blames neglected maintenance. **Contested attribution** divides opinion on whether the government is failing or exaggerating.", "technological": "**Concealed access** to grid and telecommunications control systems is activated. Engineers restore supply by hand because remote control cannot be trusted.", "legal": "No single incident is an act of war. **Legal powers below that threshold**, over operators, vessels and evidence, decide how quickly the state can act.", "environmental": "Damage falls on **subsea cables and energy assets**. Lasting environmental harm is limited unless pipelines or fuel storage are ruptured." }, "regions": { "north-america": "Rated Medium. Advisories in 2024 confirmed **access placed in advance** in communications, energy and water operators.", "europe": "**The most active theatre**: Baltic cable damage, drone incursions, airport closures and incendiary parcels since 2022.", "china": "Rated **Low as a target**. State control of operators and networks limits the reach of a deniable campaign.", "indo-pacific": "**Taiwan's subsea cables**, Japan, Korea, the Philippines and Australia face coercion at sea and intrusion into operators.", "south-asia": "Rated Medium. Campaigns below the threshold of war are established **between neighbours**, and grids have little reserve.", "gulf-middle-east": "Rated Medium. **Drone and proxy attacks** on energy and desalination assets are the regional form.", "africa": "Rated **Low**. Few states face a capable state adversary with motive, although grids are fragile.", "latin-america": "Rated **Low**. State-directed coercion of this kind is rare in the region.", "russia-eurasia": "**Ukraine, Moldova and Georgia** are direct targets. Grid attack by cyber means was first used at scale in this region." }, "evolution": { "lead_indicators": "Unexplained subsea cable faults recur in one sea basin and **satellite positioning interference** exceeds ten days a month. An advisory names state access in the nation's energy or telecommunications operators.", "triggers": "Late in a 12-month deniable campaign of sabotage, intrusion and interference, the hostile state **activates concealed access** to grid and telecommunications control systems.", "immediate": "Areas producing half of national output lose **power and communications for 72 hours**. Mobile networks last about four hours on batteries, card payments stop and engineers switch substations by hand.", "post_immediate": "Electricity is **rationed for 30 days** and industry works three days a week. Attribution is contested, repair crews are threatened and the adversary offers restraint for a concession.", "stabilisation": "Services are **restored within months**. Allies consult and send grid engineers and mobile generation, but agree no collective measure.", "long_term": "Insurers **exclude state-backed sabotage** from infrastructure cover and foreign manufacturers defer planned plants. Deterrence weakens where the campaign is seen to have gone unanswered." } }, "history": [ { "edition": 2027, "rank": 6, "L2y": 3, "L10y": 4, "impact_systemic": 2, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Hybrid campaign by a hostile state: the infrastructure blackout of the first-pass S12 is folded in as the campaign's peak, onset moves from months to weeks, national impact rises from 3 to 4 and likelihood falls one band at both horizons." } ], "citation": "GINC (2027). Scenario S04 Hybrid coercion ends in an infrastructure blackout, Scenario Library v0.5. scenarios.ginc.org/scenarios/hybrid-coercion" }, { "id": "S05", "slug": "legitimacy-rupture", "title": "A disputed transfer of power breaks effective government", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "B", "short_title": "Legitimacy rupture", "thematics": [ "information-integrity-social-cohesion", "resilience-crisis-preparedness" ], "likelihood_type": "idiosyncratic", "likelihood_note": "Rated for a given nation. The first-pass record counted any government that fell to protest or coup and was rated two bands higher; this record requires six months of competing claims.", "scores": { "likelihood_2y": { "band": 2, "rationale": "The Standard Severe event is demanding: competing claims held for six months, impaired administration for a fifth of the population and a 5 per cent output shortfall. Disputed results are frequent, but most are settled within days or weeks, as in the United States in 2021, Brazil in 2023 and Romania in 2024. Cases meeting the full definition, such as Côte d'Ivoire in 2010 and Bolivia in 2019, number fewer than one a year across 197 nations." }, "likelihood_10y": { "band": 3, "rationale": "Fewer than one qualifying case a year across 197 nations gives a given nation between 1 and 5 per cent over ten years. The rate is not uniform: it clusters where electoral administration is weak, succession rules are unsettled or courts are already contested. Synthetic media and declining institutional trust push the rate upward, but the evidence does not yet support a higher band for the typical nation." }, "impact_systemic": { "level": 1, "rationale": "The event strikes one nation and leaves its physical assets intact. A 5 per cent output shortfall in a typical exposed economy is well under 0.5 per cent of global output over five years. Spillovers reach neighbours, creditors and remittance flows and no further. The rating assumes the nation is not a great power or a reserve-currency issuer." }, "impact_national": { "level": 4, "rationale": "Output runs 5 per cent below path, revenue and essential services fall in areas holding a fifth of the population and security forces obey selectively. Essential services, security and social cohesion are all reached. Level 5 is not reached because infrastructure is undamaged, there is no sustained armed conflict and accepted authority can be restored within one to three years, as in Kenya after 2008." }, "confidence": { "level": "medium", "reason": "All three panel members held the scenario and two agreed on every rating; the third rated each one band higher. The base rate moves with where the six-month threshold is drawn." }, "priority": 8, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "weeks", "duration": "1 year (acute dispute six months)", "warning": "months (the contested date is known in advance)", "scope": "national", "origin": "adversarial (domestic factions, with foreign manipulation)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "A disputed election, succession or constitutional ruling produces competing claims to lawful authority in one nation. Fabricated evidence and coordinated intimidation of officials intensify the dispute. For six months, recurrent protests and selective security-force refusals prevent normal administration in areas containing 20 per cent of the population. Revenue collection and essential service delivery fall, and national output runs 5 per cent below its previous path. Courts and official information become contested instruments. Physical assets are undamaged. The state must restore accepted authority without normalising repression or permanent emergency powers.", "narrative": { "dateline": "October 2031", "text": "The presidential runoff was held on 6 October 2030. The electoral commission announced a margin of 0.8 percentage points on 9 October, after a three-day delay in the count in two provinces. Within hours a video appearing to show ballot papers being loaded into an unmarked vehicle had been viewed 14 million times. Forensic analysts established within two days that it was synthetic. The correction reached about a tenth of that audience. Both candidates declared victory. On 21 October the constitutional court suspended certification pending a review of evidence of foreign-funded online campaigning. The outgoing government treated the order as binding. The declared winner did not.\n\nBy November there were two claimants to the presidency, each citing a lawful basis. Protests recurred weekly in the capital and four provincial cities. Election officials and three judges received coordinated threats, and two regional returning officers resigned. Police commanders in two provinces declined orders to clear occupied administrative buildings. One army garrison stated that it would take instructions only from the court. No unit changed sides and there was no sustained armed confrontation.\n\nNormal administration stopped in provinces containing about 20 per cent of the population. Tax offices and customs posts there closed or remitted to provincial authorities, and national revenue ran 15 per cent below plan between November and March. Teachers and health workers in those provinces were paid late in four of the six months. Clinics reported shortages of basic medicines. The statistics office suspended two releases after both sides challenged its figures, and the central bank set policy without them.\n\nThe currency fell 18 per cent in six weeks. Two bond auctions were cancelled and the government financed itself through short-term bills taken up by domestic banks. Mobile data was restricted on eleven days under an emergency decree that was renewed twice. Firms postponed investment. Permits and contract payments that needed a ministerial signature went unsigned because officials could not establish who was authorised to give it.\n\nA mediated agreement in April 2031 set a rerun under a reconstituted commission, with regional observers and an agreed protocol for testing evidence. The rerun was held in September 2031 and the losing side accepted the result. Output for 2031 was 5 per cent below the path forecast before the vote. The emergency decree lapsed, but three of its provisions on public assembly had been written into ordinary law, and surveys showed that fewer than a third of respondents trusted the commission to run the next election.\n\nRoads, power stations and ministries were undamaged throughout. For six months the state lacked agreement on who was entitled to direct them." }, "anchors": [ { "shock_id": "cote-divoire-post-election-crisis-2010", "date": "November 2010 to April 2011", "event": "Côte d'Ivoire post-election crisis", "what_happened": "After the runoff of 28 November 2010 the electoral commission and the Constitutional Council declared different winners and both candidates were sworn in. The stand-off lasted about four months, with around 3,000 deaths, the closure of commercial banks and a halt to cocoa exports. It ended by force in April 2011. Output contracted by roughly 4 per cent in 2011.", "calibrates": "The closest match to the defining condition: two claimants, each with an institutional basis. It supports the output shortfall of 5 per cent and marks the upper bound, since violence exceeded what Standard Severe assumes." }, { "shock_id": "kenya-post-election-crisis-2007", "date": "December 2007 to February 2008", "event": "Kenya post-election crisis", "what_happened": "The presidential result announced on 30 December 2007 was disputed. Two months of violence followed, in which more than 1,000 people were killed and several hundred thousand displaced. A mediated power-sharing agreement was signed on 28 February 2008. Growth fell from about 7 per cent in 2007 to below 2 per cent in 2008, a year that also included drought and the global downturn.", "calibrates": "The scale of the output loss, the role of outside mediation and the recovery horizon: constitutional reform followed in 2010 and the next election passed without comparable violence." }, { "shock_id": "bolivia-disputed-election-2019", "date": "October to November 2019", "event": "Bolivia disputed election", "what_happened": "The count in the election of 20 October 2019 was disputed after reporting of preliminary results was interrupted. Three weeks of protest followed. Police units in several cities refused orders from 8 November, an audit by the Organisation of American States reported irregularities and the president resigned on 10 November. A fresh election was not held until October 2020.", "calibrates": "Selective security-force refusal as the turning point, reached within three weeks, and the length of the interim: a year passed before an accepted vote." }, { "shock_id": "romanias-annulled-presidential-election-2024", "date": "6 December 2024", "event": "Romania's annulled presidential election", "what_happened": "The Constitutional Court annulled the first round of the presidential election, held on 24 November, two days before the scheduled runoff. It relied on declassified intelligence assessments describing a coordinated online campaign and undeclared campaign financing. The election was rerun in May 2025.", "calibrates": "The court as a contested instrument: a ruling made to protect the vote was read by a large minority as the removal of their choice. Administration continued, which marks the lower bound of the event." }, { "shock_id": "united-states-capitol-2021", "date": "6 January 2021", "event": "United States Capitol", "what_happened": "A crowd entered the Capitol while Congress was counting electoral votes. The count was suspended for several hours and completed in the early hours of 7 January. The transfer of power took place on the constitutional date.", "calibrates": "The advanced-democracy variant. Certification was disrupted for hours, not months, and courts, election officials and security forces held. This is the basis for the Medium exposure of North America." }, { "shock_id": "brasilia-2023", "date": "8 January 2023", "event": "Brasília", "what_happened": "One week after the inauguration, supporters of the defeated candidate entered and damaged the Congress, Supreme Court and presidential palace buildings. Security forces cleared the buildings the same day and more than 1,000 people were detained.", "calibrates": "The effect of security-force compliance. Where the chain of command held, a challenge to the result was contained in a day and did not reach administration or revenue." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "90 days", "severe": "1 year (acute dispute six months)", "extreme": "3 years" }, "onset": { "major": "weeks", "severe": "weeks", "extreme": "days" }, "warning": { "major": "months", "severe": "months (the contested date is known in advance)", "extreme": "days" }, "scope": { "major": "national", "severe": "national", "extreme": "national (with spillover to neighbours)" }, "origin": { "major": null, "severe": "adversarial (domestic factions, with foreign manipulation)", "extreme": "adversarial (a neighbour or great power backs one claimant)" }, "external_support": { "major": "full", "severe": "partial", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S02)" }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": null }, "recovery_horizon": { "major": "months", "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "Trigger", "default": "disputed election", "range": "options: disputed election / succession / constitutional ruling", "unit": null, "note": "The trigger must produce at least two claimants, each citing a lawful basis." }, { "name": "Duration of competing claims", "default": "6 months", "range": "2 to 18", "unit": "months", "note": "Measured from the disputed act to an accepted settlement or rerun date." }, { "name": "Population under impaired administration", "default": "20 per cent", "range": "10 to 40", "unit": "per cent of population", "note": "Areas where national tax, justice and payroll functions do not operate normally." }, { "name": "Output shortfall against the prior path", "default": "5 per cent", "range": "2 to 10", "unit": "per cent of annual GDP", "note": "First full year after the disputed act." }, { "name": "Revenue shortfall during the dispute", "default": "15 per cent below plan", "range": "5 to 30", "unit": "per cent of planned national revenue", "note": "A GINC working assumption; the specification states only that revenue collection falls." }, { "name": "Security-force compliance", "default": "selective refusals", "range": "options: full compliance / selective refusals / open split", "unit": null, "note": "An open split belongs to Standard Extreme." }, { "name": "Fabricated evidence and intimidation", "default": "coordinated, partly foreign", "range": "options: sporadic / coordinated domestic / coordinated, partly foreign", "unit": null, "note": "Covers synthetic media, forged documents and threats against election officials and judges." } ] }, "transmission": [ "A disputed count, succession or ruling produces two claimants, each citing a lawful basis.", "Fabricated evidence spreads faster than verification, while officials and judges face coordinated intimidation.", "Recurrent protest and counter-protest occupy administrative centres in contested areas.", "Security forces obey selectively, so neither claimant can enforce orders across the whole territory.", "Courts, the electoral body and the statistics office lose accepted authority as each side rejects adverse findings.", "Tax collection, payroll and essential services falter in areas holding a fifth of the population.", "Capital leaves, the currency falls and the government loses access to term funding.", "A mediated settlement restores a single authority, with emergency powers and distrust carried forward." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "High", "channel": "Selective refusal of orders splits the chain of command; forces are drawn into internal order." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Medium", "channel": "Assets are undamaged, but occupations, unpaid staff and data restrictions interrupt transport, health and communications services." }, { "dimension": "Hard", "domain": "critical-technology", "load": "Medium", "channel": "Synthetic media, election systems and platform restrictions are contested; verification capacity is tested." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Electoral administration, courts, revenue collection and continuity of government lose accepted authority." }, { "dimension": "Soft", "domain": "human-capital", "load": "Medium", "channel": "Schools and clinics close or go unpaid in contested areas; professionals emigrate." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Official information is disbelieved, polarisation hardens and partners withhold recognition." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Capital flight, currency depreciation, cancelled auctions and a revenue shortfall." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "Medium", "channel": "Investment is postponed; permits, customs and contract payments stall without an authorised signatory." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Low", "channel": "Supply continues; subsidy decisions and resource revenues become objects of the dispute." } ], "stakeholders": { "government": { "exposure": "Electoral administration, courts, security-force chain of command, revenue collection and the credibility of official information.", "actions": [ "Agree before the vote how results are verified, how complaints are heard and by what date.", "Set lawful rules for policing protest and for the limits and expiry of emergency powers.", "Plan payroll, revenue and service continuity for a period without an agreed head of government." ], "watch": [ "Resignations of, and threats against, election officials and judges", "Statements by police and military commanders on whose orders they accept", "Revenue remitted by provincial tax and customs offices" ], "relevance": 5 }, "technology": { "exposure": "Platforms carrying fabricated evidence, operators of election and results systems and telecommunications operators subject to restriction orders.", "actions": [ "Establish provenance checks and rapid verification channels with the electoral body before the vote.", "Secure results transmission and publish polling-station counts in a form that can be audited.", "Define the legal process required before complying with a shutdown or data restriction order." ], "watch": [ "Reach of synthetic media against reach of corrections", "Coordinated inauthentic accounts amplifying either claimant", "Shutdown and throttling orders and their legal basis" ], "relevance": 3 }, "investors": { "exposure": "Sovereign debt, currency, domestic banks holding government paper and firms dependent on permits and public contracts.", "actions": [ "Include a contested transfer of power in sovereign and country risk models around the electoral calendar.", "Test contracts and guarantees against a period in which the lawful signatory is disputed.", "Review exposure to domestic banks that become the residual buyer of government bills." ], "watch": [ "Sovereign spreads and currency moves in the 30 days around a vote", "Auction cancellations and the shift to short-term bills", "Recognition decisions by multilateral lenders and major partners" ], "relevance": 4 }, "public": { "exposure": "Personal safety, the reliability of information and access to pay, health care and schooling in contested areas.", "actions": [ "Rely on published polling-station counts and accredited observer statements, not on unverified footage.", "Local authorities keep clinics, schools and water services operating under either claimant.", "Civil society and media document intimidation and the use of emergency powers." ], "watch": [ "Official results channels and observer statements", "Curfews, assembly restrictions and data shutdowns", "Late payment of public salaries and shortages at clinics" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "Medium", "rationale": "Certification was disrupted in 2021 and polarisation is high, but courts, officials and security forces held." }, { "region": "europe", "exposure": "Medium", "rationale": "Romania's 2024 annulment shows the judicial pathway; administration is generally robust to a disputed result." }, { "region": "china", "exposure": "Low", "rationale": "No electoral transfer; a succession dispute would follow a different pathway from the one specified." }, { "region": "indo-pacific", "exposure": "Medium", "rationale": "Disputed counts and military involvement have precedents in parts of ASEAN and the Pacific; advanced economies are less exposed." }, { "region": "south-asia", "exposure": "High", "rationale": "Bangladesh in 2024 and Nepal in 2025 show rapid loss of authority; disputed elections and politicised courts recur." }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "Succession and constitutional rulings are the likely triggers; several states have armed groups outside the state chain of command." }, { "region": "africa", "exposure": "High", "rationale": "Kenya in 2007 and Côte d'Ivoire in 2010 are the direct precedents; coups have followed disputed mandates." }, { "region": "latin-america", "exposure": "High", "rationale": "Bolivia in 2019 and Venezuela since 2019 show disputed counts leading to rival claims and police refusals." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Disputed counts have brought mass protest and annulment in the region, with open external backing for incumbents or challengers." } ], "indicators": [ { "name": "Protest and riot events, including events involving state forces", "source": "ACLED", "threshold": "Weekly events above three times the trailing 12-month average for four consecutive weeks", "cadence": "weekly" }, { "name": "Clean elections index and election management body autonomy", "source": "V-Dem Institute, Varieties of Democracy dataset", "threshold": "A fall of 0.1 or more on the 0 to 1 scale between annual releases", "cadence": "annual" }, { "name": "Trust in national government", "source": "OECD Survey on Drivers of Trust in Public Institutions; Edelman Trust Barometer", "threshold": "Below 30 per cent with a national vote or succession due within 12 months", "cadence": "annual (Edelman); every two years (OECD)" }, { "name": "Election observation findings on the count and the complaints process", "source": "OSCE Office for Democratic Institutions and Human Rights; regional observer missions", "threshold": "A preliminary statement that declines to confirm the count", "cadence": "each election" }, { "name": "Constraints on government powers and judicial independence", "source": "World Justice Project Rule of Law Index", "threshold": "A decline in two consecutive editions", "cadence": "annual" }, { "name": "Internet shutdowns and platform restrictions", "source": "Access Now, #KeepItOn coalition", "threshold": "Any national or provincial shutdown during an electoral period", "cadence": "annual report, with running updates" }, { "name": "Sovereign spread and exchange rate around the electoral calendar", "source": "J.P. Morgan EMBI Global Diversified; national central bank", "threshold": "Spread widening of 200 basis points within 30 days of a vote", "cadence": "daily" }, { "name": "Takedowns of coordinated inauthentic networks naming the nation", "source": "Meta Adversarial Threat Report", "threshold": null, "cadence": "quarterly" } ], "compounds": { "triggers": [ { "id": "S04", "note": "A divided chain of command and contested attribution lower the cost of a hostile hybrid campaign." }, { "id": "S03", "note": "Only where the nation is strategically placed and neighbours back rival claimants." }, { "id": "S02", "note": "Only where the nation is a reserve-currency issuer or a major financial centre." }, { "id": "S10", "note": "A state without effective government detects and reports an outbreak late." } ], "triggered_by": [ { "id": "S02", "note": "Loss of market access and forced spending cuts precede a contested vote." }, { "id": "S04", "note": "Information operations and intimidation are part of the hostile campaign and can be aimed at a transfer of power." }, { "id": "S06", "note": "Food shortages and unrest over distribution weaken the incumbent's mandate before a vote." }, { "id": "S08", "note": "Abrupt displacement erodes trust in economic opportunity and raises support for rejecting results." }, { "id": "S07", "note": "A relief effort seen as failed or unfair, close to an election or succession, can open a dispute over lawful authority." }, { "id": "S09", "note": "Forged signatures and contested official records feed competing claims to lawful authority." }, { "id": "S10", "note": "Contested emergency measures and postponed votes weaken the lawful authority of governments." }, { "id": "S14", "note": "Factions that reject the terms may dispute a signatory government's authority" }, { "id": "S15", "note": "fiscal retrenchment in hydrocarbon-dependent states" } ], "amplified_by": [ { "id": "S09", "note": "Forged digital signatures make official results and court documents harder to authenticate." }, { "id": "S10", "note": "Postponed votes and emergency health powers extend the period of contested authority." } ], "triggered_by_other": [], "amplifying_trends": [ "Election integrity & interference", "Foreign information manipulation", "Declining institutional trust", "Polarisation & populism", "Civil unrest & protest mobilisation", "Rule of law & judicial independence", "Executive overreach & emergency powers", "Synthetic media & deepfakes" ] }, "open_questions": [ "Whether one Standard Severe definition can serve both advanced democracies, where disputes have so far been settled in days, and states with weak electoral administration.", "How to rate systemic impact when the nation is a great power or a reserve-currency issuer; the level 1 rating assumes it is not.", "Whether the output and revenue shortfalls should be set by income group, given that the evidence rests mainly on Kenya and Côte d'Ivoire.", "Where this scenario ends and S04 begins when foreign manipulation is the main driver of the dispute." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Two claimants each cite a lawful basis. **Competing claims to lawful authority** last six months and security forces obey selectively.", "economic": "The currency falls 18 per cent and two bond auctions are cancelled. Output runs **5 per cent below its previous path**.", "social": "Normal administration stops in areas holding **20 per cent of the population**. Public salaries are paid late and clinics run short of medicines.", "technological": "A synthetic video is viewed 14 million times and **the correction reaches a tenth of that audience**. Mobile data is restricted under emergency decree.", "legal": "One side treats the court's suspension of certification as binding and the other does not. **Emergency provisions pass into ordinary law**.", "environmental": "Physical assets and natural systems are **undamaged**. Permitting and environmental enforcement lapse in areas outside normal administration." }, "regions": { "north-america": "Rated Medium. Certification was disrupted for hours in 2021, but **courts, officials and security forces held**.", "europe": "Rated Medium. Romania's 2024 annulment shows **the judicial pathway**, with administration continuing throughout.", "china": "Rated Low. There is no electoral transfer and a succession dispute would follow **a different pathway**.", "indo-pacific": "Rated Medium. **Disputed counts and military involvement** have precedents in parts of ASEAN and the Pacific.", "south-asia": "Rated High. Bangladesh in 2024 and Nepal in 2025 show **rapid loss of authority** once protest spreads.", "gulf-middle-east": "Rated High. **Succession and constitutional rulings** are the likely triggers, and some states have armed groups outside the state chain of command.", "africa": "Rated High. **Kenya in 2007 and Côte d'Ivoire in 2010** are the direct precedents for rival claims and lost output.", "latin-america": "Rated High. Bolivia in 2019 shows **police refusal of orders** deciding a disputed count within three weeks.", "russia-eurasia": "Rated High. Disputed counts have brought mass protest and annulment, with **open external backing** for one side." }, "evolution": { "lead_indicators": "Trust in national government is below 30 per cent with a vote due within 12 months. Observers **decline to confirm the count** and the sovereign spread widens 200 basis points.", "triggers": "A disputed election, succession or constitutional ruling leaves **two claimants, each citing a lawful basis**. Fabricated evidence spreads faster than its correction.", "immediate": "Within weeks protests recur in the capital and provincial cities. Election officials and judges receive coordinated threats and **police commanders decline orders** in contested provinces.", "post_immediate": "Normal administration stops for **20 per cent of the population**. Revenue runs 15 per cent below plan, public salaries are paid late and the currency falls 18 per cent.", "stabilisation": "A mediated agreement after six months sets a rerun, whose result the losing side accepts within the year. Output that year is **5 per cent below its previous path**.", "long_term": "**Emergency provisions on public assembly** remain in ordinary law. Fewer than a third of respondents trust the electoral commission to run the next election." } }, "history": [ { "edition": 2027, "rank": 8, "L2y": 2, "L10y": 3, "impact_systemic": 1, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Political legitimacy crisis: narrowed to a disputed transfer of power lasting six months, likelihood lowered two bands and each impact one level, infrastructure and industry loads raised to Medium, Gulf and Middle East and Russia and Eurasia raised to High." } ], "citation": "GINC (2027). Scenario S05 A disputed transfer of power breaks effective government, Scenario Library v0.5. scenarios.ginc.org/scenarios/legitimacy-rupture" }, { "id": "S06", "slug": "breadbasket-failure", "title": "Two breadbasket failures trigger a food availability crisis", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "C", "short_title": "Breadbasket failure", "thematics": [ "climate-energy-resources", "economic-security-supply-chains", "resilience-crisis-preparedness" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 3, "rationale": "Shocks with one failing region or one major restricting exporter occurred in 2007–2008, 2010, 2012, 2022 and 2023, about once every three years. None combined a 25 per cent loss of exportable grain in two regions with prices doubled for 18 months. The joint event is rarer than its parts, and the panel places it at 1 to 5 per cent over two years." }, "likelihood_10y": { "band": 4, "rationale": "Warming raises the frequency of extreme heat during grain filling and the chance that droughts in separate regions coincide. Exports of wheat, maize, rice and soya beans remain concentrated in a small number of suppliers, and export restrictions have become a routine response to high prices. Over ten years the panel judges an event of this severity likely, at 5 to 25 per cent." }, "impact_systemic": { "level": 3, "rationale": "Lloyd's puts the probability-weighted loss from a food and water shock at US$5 trillion over five years, close to 1 per cent of global output. This specification sits at the severe end of that range, with prices doubled for 18 months, which places it within 1 to 2.5 per cent. Food is a small share of output in advanced economies, which keeps the global loss below level 4." }, "impact_national": { "level": 4, "rationale": "For a highly exposed importer, a 15 per cent fall in physical availability and doubled prices for 18 months mean rationing, higher child malnutrition, a doubled subsidy bill and reserve losses. In 2007–2008 and 2010–2011 smaller price rises were followed by unrest in importing countries. The panel sets level 4, not 5: the specification is a shortage with recovery within years, not famine or state failure." }, "confidence": { "level": "medium", "reason": "The price and trade mechanisms are well documented from recent episodes. The probability that two regions fail together and the size of the import shortfall rest on climate modelling and judgement." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "1 year (prices doubled for 18 months)", "warning": "months", "scope": "global", "origin": "natural (export restrictions follow)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "Extreme heat and drought cut exportable grain from two major producing regions by 25 per cent in the same season. Export restrictions by other suppliers and a fertiliser shortage prevent rapid substitution. International staple prices double and stay there for 18 months, and physical import availability falls 15 per cent for highly exposed buyers. Water shortages also constrain domestic harvests and power generation in the affected regions. Governments must protect nutrition and farm viability while managing scarce foreign exchange, cross-border water disputes and unrest over food distribution. Exporters that are not affected and holders of usable stocks gain; poor consumers, food importers and water-stressed producers lose.", "narrative": { "dateline": "September 2031", "text": "The losses were confirmed in two stages. In July 2029, after seven weeks of extreme heat during grain filling, crop surveys in the first producing region cut the expected wheat and maize harvest by almost a third. In October the second region, in the other hemisphere, reported that drought had reduced its planted area and yields by a similar margin. Taken together, the grain available for export from the two regions was 25 per cent below the five-year average.\n\nPrices moved before the second report. By November international wheat, maize and rice prices were double their level of a year earlier, and they stayed near that level until the spring of 2031. Eleven governments restricted staple exports within ten weeks of the first report, most by quota or licence and a few by outright ban. Three of them were suppliers with normal harvests. Importers holding contracts found that cargoes were delayed, re-priced or cancelled under force majeure clauses. For the most exposed buyers, delivered volumes over the following year were 15 per cent below requirement.\n\nThe same drought lowered reservoirs. Hydropower output in the affected regions fell by a fifth, irrigation allocations were cut and two governments in a shared basin disputed releases from upstream dams. Gas-fired generation covered part of the gap and raised the cost of nitrogen fertiliser, which several producers had already stopped exporting. Farmers in importing countries applied less in the 2030 season and yields there fell, so the shortage lasted beyond the season in which it began.\n\nGovernments with physical reserves near their cities released them in the first three months. Those whose reserves were financial, or were stored at ports far from consumers, could not turn them into food at the pace required. Bread and rice subsidies that had cost 1 to 2 per cent of GDP doubled. Central banks in importing economies spent reserves defending their currencies as food import bills rose, and nine governments sought emergency balance of payments support. Humanitarian appeals for 2030 were less than half funded.\n\nRationing was introduced in fourteen countries. Where distribution was seen to be fair, it held. Where subsidised grain was diverted or queues were policed by force, protests spread from the capital to provincial towns, and two governments fell during 2030. Acute malnutrition among children under five rose in every low-income importing country that reported data. Herds were slaughtered early in the drought regions, and many small farms did not plant the following season because they could not finance seed and fertiliser.\n\nHarvests recovered in 2031 and prices fell back within months. Stocks did not recover as quickly: the rebuilding of public reserves kept import demand high into 2032. The countries that came through with least damage had held reserves of the right grains near the people who needed them, had transfer systems that could reach households within weeks and had kept enough foreign exchange to buy when others could not." }, "anchors": [ { "shock_id": "world-food-price-crisis-2007", "date": "2007–2008", "event": "World food price crisis", "what_happened": "International rice prices roughly tripled between late 2007 and spring 2008 after India, Vietnam and other exporters restricted sales, although the world rice harvest had not failed. Wheat and maize prices also reached records. Unrest over food prices was reported in more than 30 countries and the prime minister of Haiti was dismissed in April 2008 after food riots.", "calibrates": "Export restrictions and precautionary buying can double or triple a staple price without a large physical loss. It sets the price multiple and shows how quickly a price rise reaches public order in importing countries." }, { "shock_id": "russian-wheat-export-ban-2010", "date": "August 2010 to June 2011", "event": "Russian wheat export ban", "what_happened": "A summer of extreme heat and drought cut Russia's grain harvest by about a third. The government banned grain exports from 15 August 2010 and kept the ban until 1 July 2011. International wheat prices rose by more than half over the summer, and bread prices rose in North African and Middle Eastern importers ahead of the unrest of 2011.", "calibrates": "One heat event in one exporting region, followed by one ban, was enough to move the world wheat price. The specification doubles the number of regions and adds restrictions by suppliers whose harvests were normal." }, { "shock_id": "black-sea-grain-disruption-2022", "date": "February 2022 to July 2023", "event": "Black Sea grain disruption", "what_happened": "Russia and Ukraine had together supplied more than a quarter of world wheat exports. Ukraine's seaports closed in late February 2022 and the FAO Food Price Index reached a record in March 2022. The Black Sea Grain Initiative, agreed on 22 July 2022, moved about 33 million tonnes before it lapsed in July 2023.", "calibrates": "A loss of access to one exporting region, with the grain itself intact, produced a record price index and cancelled cargoes for importers in Africa and the Middle East. It calibrates the fall in physical availability for exposed buyers." }, { "shock_id": "fertiliser-price-spike-2022", "date": "2021–2022", "event": "Fertiliser price spike", "what_happened": "Nitrogen fertiliser prices roughly tripled between 2020 and spring 2022 as European gas prices rose, ammonia plants curtailed output, China and Russia restricted exports and sanctions cut Belarusian potash sales. Farmers in low-income countries reduced application in the following season.", "calibrates": "The route by which a one-season shock lowers the next harvest. It supports the assumption that fertiliser cannot be substituted quickly and that the shortage outlasts the season in which it begins." }, { "shock_id": "india-rice-export-ban-2023", "date": "July 2023", "event": "India rice export ban", "what_happened": "On 20 July 2023 India, which supplied about 40 per cent of world rice trade, prohibited exports of non-basmati white rice to restrain domestic prices after erratic monsoon rains. The FAO All Rice Price Index rose to its highest level in 15 years in the following months.", "calibrates": "A supplier with adequate stocks restricted exports as a precaution. It shows that restrictions by unaffected exporters are a standing feature of the market and not an extreme assumption." }, { "shock_id": "lloyds-food-and-water-shock-scenario-2023", "date": "October 2023", "event": "Lloyd's food and water shock scenario", "what_happened": "Lloyd's and the Cambridge Centre for Risk Studies modelled extreme weather leading to food and water shortages at three severities. The probability-weighted global economic loss was US$5 trillion over five years.", "calibrates": "The systemic impact rating. A loss near 1 per cent of five-year global output for the weighted case places the severe case at level 3." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "1 year (one season)", "severe": "1 year (prices doubled for 18 months)", "extreme": "3 years (two failed seasons)" }, "onset": { "major": "months", "severe": "months", "extreme": "months" }, "warning": { "major": "months", "severe": "months", "extreme": "months" }, "scope": { "major": "global", "severe": "global", "extreme": "global" }, "origin": { "major": "natural", "severe": "natural (export restrictions follow)", "extreme": "natural (export restrictions follow)" }, "external_support": { "major": "partial", "severe": "partial", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S03)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "current plans executed" }, "recovery_horizon": { "major": "months", "severe": "years", "extreme": "years" } }, "specific": [ { "name": "Producing regions failing in one season", "default": "2", "range": "1 to 3", "unit": "regions", "note": "Standard Major uses one region; Standard Extreme uses three." }, { "name": "Fall in exportable grain from the failing regions", "default": "25", "range": "15 to 40", "unit": "per cent below the five-year average", "note": "Wheat, maize and rice taken together." }, { "name": "International staple price multiple", "default": "×2", "range": "×1.5 to ×3", "unit": "multiple of the pre-shock price", "note": "Held for 18 months at the default; the period may be set from 9 to 36 months." }, { "name": "Fall in physical import availability for highly exposed buyers", "default": "15", "range": "5 to 30", "unit": "per cent of normal import volume", "note": "Applies in full at High exposure and is scaled down for other nations." }, { "name": "Traded staple calories under export restriction", "default": "15", "range": "5 to 30", "unit": "per cent of traded calories", "note": "Includes restrictions by suppliers whose own harvests were normal." }, { "name": "Fertiliser application in the following season", "default": "10 per cent below normal", "range": "0 to 25", "unit": "per cent below normal in importing countries", "note": "Carries the shock into a second harvest." }, { "name": "Hydropower output in the affected regions", "default": "20 per cent below normal", "range": "0 to 40", "unit": "per cent below normal", "note": "Stands for the wider water shortage, including irrigation allocations." } ] }, "transmission": [ "Heat and drought in two producing regions cut their exportable wheat, maize and rice by 25 per cent in one season.", "International prices double within months as importers bid for the remaining supply and traders anticipate restrictions.", "Other exporters restrict sales to hold down domestic prices, removing further supply and voiding contracts that importers relied on.", "Physical availability for highly exposed importers falls 15 per cent; reserves held far from consumers or in financial form cannot fill the gap in time.", "Low reservoirs cut irrigation and hydropower in the affected regions; gas demand for power raises fertiliser costs and states sharing a river dispute releases.", "Food import bills and subsidies rise together, draining foreign exchange, widening deficits and passing food price inflation into wages and interest rates.", "Rationing and price rises fall hardest on poor urban households; where distribution is seen as unfair, protest spreads and governments are challenged.", "Lower fertiliser use, slaughtered herds and unplanted small farms reduce the next harvest, while child malnutrition leaves lasting losses in health and schooling." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Medium", "channel": "Cross-border water disputes, guarding of food stores and convoys and armed forces drawn into distribution and public order." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Grain storage, ports, irrigation, water supply and hydropower run short or are in the wrong places." }, { "dimension": "Hard", "domain": "critical-technology", "load": "Medium", "channel": "Crop forecasting, drought-tolerant seed, precision irrigation and digital transfer systems decide how early and how well a nation responds." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Reserve release, rationing, targeted transfers and price policy must work within weeks and be seen as fair." }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "Child malnutrition, maternal health and school attendance worsen; rural livelihoods are lost and workers migrate." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Unrest over prices and distribution, strained relations with exporters and neighbours and contested official figures on stocks." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Import bills and subsidies drain reserves and budgets; food price inflation, currency pressure and requests for emergency financing follow." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Cancelled cargoes, export restrictions, competition for freight and lower farm and food-processing output." }, { "dimension": "Economic", "domain": "energy-resources", "load": "High", "channel": "Water, arable land and fertiliser are the binding constraints; hydropower falls and gas demand rises." } ], "stakeholders": { "government": { "exposure": "Reserve policy by grain and location, the reach of transfer systems, foreign exchange for imports and water-sharing agreements.", "actions": [ "Hold physical reserves of the staples people eat, stored near consumers, with published release rules.", "Link cash and food transfers to local prices so that support rises without a new decision.", "Agree import contracts and water-sharing rules with suppliers and neighbours before a shortage." ], "watch": [ "Stocks-to-use ratios of the major exporters", "Export restrictions announced by other governments", "Reservoir levels and irrigation allocations" ], "relevance": 4 }, "technology": { "exposure": "Crop forecasting, irrigation control, cold chains and the payment systems that carry transfers; water and power for data centres in drought regions.", "actions": [ "Supply governments with yield, soil moisture and stock estimates early enough to act on.", "Keep payment and identity platforms available for emergency transfers at national scale.", "Plan for restricted water and power at facilities in drought-affected basins." ], "watch": [ "Satellite crop condition and soil moisture indices", "Hydropower output and grid notices in affected regions", "Government requests for emergency transfer capacity" ], "relevance": 4 }, "investors": { "exposure": "Sovereign debt of food importers, agricultural commodities, fertiliser producers, food retailers, crop insurers and utilities dependent on hydropower.", "actions": [ "Test portfolios against staple prices doubled for 18 months and a 15 per cent import shortfall.", "Review sovereign exposures by food import bill, reserve cover and subsidy cost.", "Check crop insurance and reinsurance accumulations across the two failing regions." ], "watch": [ "Export restriction announcements", "Reserve cover of food-importing sovereigns", "Fertiliser and natural gas prices" ], "relevance": 5 }, "public": { "exposure": "Food prices and availability, most acutely for poor urban households and for small farmers in drought regions.", "actions": [ "Households: know how the national ration or transfer scheme registers people and where it distributes.", "Local government: map stores, mills and distribution points and plan for orderly, fair queuing.", "Media and civil society: report stock and distribution figures accurately to limit hoarding." ], "watch": [ "Retail prices of bread, rice and cooking oil", "Subsidy, ration and transfer announcements", "Child malnutrition screening results" ], "relevance": 5 } }, "regions": [ { "region": "north-america", "exposure": "Medium", "rationale": "Exporter with secure supply, but a candidate failing region; drought cuts western water and hydropower, and consumer food inflation rises." }, { "region": "europe", "exposure": "Medium", "rationale": "Net cereal exporter with fertiliser tied to imported gas; southern water stress, food inflation and migration pressure from neighbouring importers." }, { "region": "china", "exposure": "High", "rationale": "Largest importer of soya beans and feed grain; northern water stress; large reserves soften the first year but rebuilding them tightens world supply." }, { "region": "indo-pacific", "exposure": "Medium", "rationale": "Rice importers such as the Philippines and Indonesia and import-dependent Pacific islands are exposed; Australia, Thailand and Vietnam export." }, { "region": "south-asia", "exposure": "High", "rationale": "Heat and a weak monsoon cut domestic wheat and rice; Indus, Ganges and Brahmaputra waters are contested; undernutrition is high and fiscal space thin." }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "Most staples are imported and Egypt is among the largest wheat buyers; water is scarce and Nile, Tigris and Euphrates flows are disputed." }, { "region": "africa", "exposure": "High", "rationale": "Import-dependent cities, rain-fed farming, fertiliser dependence, low reserves of grain and foreign exchange and high existing acute food insecurity." }, { "region": "latin-america", "exposure": "Medium", "rationale": "Brazil and Argentina export and may gain or fail; Caribbean and Central American importers and the dry corridor are exposed." }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "Russia and Kazakhstan gain as exporters unless they are a failing region; Central Asian water sharing and importers in the Caucasus are exposed." } ], "indicators": [ { "name": "FAO Food Price Index, cereals sub-index", "source": "FAO", "threshold": "Cereals sub-index 30 per cent above its level a year earlier", "cadence": "monthly" }, { "name": "Stocks-to-use ratios for wheat, maize and rice", "source": "Agricultural Market Information System (AMIS) Market Monitor; USDA World Agricultural Supply and Demand Estimates", "threshold": "Stocks-to-use ratio of the major exporters at or below its lowest level of the past ten years", "cadence": "monthly" }, { "name": "Crop conditions in the main producing regions", "source": "GEOGLAM Crop Monitor for AMIS", "threshold": "Poor or failure conditions reported for two major exporting regions in the same season", "cadence": "monthly" }, { "name": "Food and fertiliser export restrictions in force", "source": "International Food Policy Research Institute (IFPRI) export restrictions tracker", "threshold": "Restrictions covering more than 10 per cent of globally traded calories", "cadence": "weekly" }, { "name": "Fertiliser prices: urea, DAP and potash", "source": "World Bank Commodity Price Data (the Pink Sheet)", "threshold": "Urea at twice its three-year average", "cadence": "monthly" }, { "name": "El Niño and La Niña status and outlook", "source": "NOAA ENSO Diagnostic Discussion", "threshold": "An advisory in force during the growing season of two major producing regions", "cadence": "monthly" }, { "name": "Acute food insecurity classifications", "source": "Integrated Food Security Phase Classification (IPC); Famine Early Warning Systems Network (FEWS NET)", "threshold": "Population in IPC Phase 3 or above rising in three or more regions at once", "cadence": "monthly" }, { "name": "Food import bills of low-income food-deficit countries", "source": "FAO Food Outlook", "threshold": null, "cadence": "twice a year" } ], "compounds": { "triggers": [ { "id": "S05", "note": "Unrest over food prices and distribution weakens accepted authority and can turn a contested succession into a breakdown of administration." }, { "id": "S03", "note": "Disputes over shared rivers and scarce grain raise the risk of armed confrontation between neighbours; a contributing cause only." }, { "id": "S16", "note": "A food availability crisis raises the urgency and financing of seed approval, irrigation and storage programmes." }, { "id": "S07", "note": "The heat and drought behind the breadbasket failures can produce the heat emergency or fire variant in the same season." }, { "id": "S10", "note": "Food scarcity raises vulnerability to infection and increases contact with wildlife and livestock." }, { "id": "S11", "note": "food import bills exhaust the foreign exchange of indebted importers" } ], "triggered_by": [ { "id": "S03", "note": "A closed sea route blocks grain and fertiliser cargoes and raises gas prices, producing the same import shortfall without a harvest failure." }, { "id": "S01", "note": "Export controls and bloc restrictions on fertiliser and farm inputs reduce harvests and make food export restrictions more likely." }, { "id": "S07", "note": "Only where the core is also a major grain-producing or grain-exporting region; the loss then counts as one of the two failures." } ], "amplified_by": [ { "id": "S02", "note": "A funding seizure removes trade finance and market access when importers most need foreign exchange." }, { "id": "S07", "note": "A disaster at a port or storage concentration removes the reserves and handling capacity that the response depends on." }, { "id": "S10", "note": "Workplace absence and movement controls reduce farm labour, port throughput and food distribution." } ], "triggered_by_other": [], "amplifying_trends": [ "Climate change & physical risk", "Freshwater stress & transboundary water", "Agricultural soil degradation", "Staple food export concentration", "Fertiliser supply dependence", "Food storage & cold chains", "Strategic stockpiles & reserves", "Persistent nutritional deprivation" ] }, "open_questions": [ "Whether a 25 per cent fall in exportable grain from two regions is the right Standard Severe level, or whether one failing region with widespread export restrictions produces the same result for importers.", "How to record exporters that gain from higher prices in a downside record that measures loss.", "Whether deliberate restriction of a shared river by an upstream state, which the first-pass record included, now needs a scenario of its own.", "Whether national impact at level 4 understates the outcome for low-income importers already in acute food insecurity, where the first-pass record set level 5." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Governments are judged on **whether distribution is seen to be fair**. Exporters restrict sales to protect domestic consumers and upstream states control releases from shared rivers.", "economic": "Staple prices **double for 18 months**. Import bills and subsidies rise together and drain foreign exchange; exporters with normal harvests and holders of usable stocks gain.", "social": "Poor urban households and small farmers carry the loss. **Child malnutrition rises** in low-income importing countries and rationing tests public order.", "technological": "**Early crop forecasts** and transfer systems that reach households within weeks decide the quality of the response. Drought-tolerant seed and efficient irrigation limit the second-season loss.", "legal": "Export quotas and licences void commercial contracts under **force majeure clauses**. Trade rules permit temporary food export restrictions and many water-sharing treaties lack binding enforcement.", "environmental": "**Extreme heat and drought** strike two regions in one season. Low reservoirs cut irrigation and hydropower, and degraded soils and depleted aquifers slow recovery." }, "regions": { "north-america": "Physical supply is secure. The region is **a candidate failing region**; drought there cuts western water and hydropower and raises food inflation.", "europe": "A net cereal exporter facing **food inflation and costly fertiliser**. Southern water stress and pressure from neighbouring importers add to the load.", "china": "**The largest buyer of soya beans and feed grain**, with water stress in the north. Reserves cover the first year; rebuilding them tightens world supply.", "indo-pacific": "**Rice importers and Pacific islands** are exposed. Australia, Thailand and Vietnam export and gain unless their own harvests fail.", "south-asia": "Heat and a weak monsoon cut **domestic wheat and rice**. Shared rivers are disputed, undernutrition is already high and fiscal space is thin.", "gulf-middle-east": "**Most staples are imported** and water is scarce. Gulf states can outbid other buyers; Egypt, Yemen and the Levant cannot.", "africa": "Import-dependent cities, rain-fed farming and **low reserves of grain and foreign exchange**. Existing acute food insecurity is the highest of any region.", "latin-america": "Brazil and Argentina export and may gain or be a failing region. **Caribbean and Central American importers** carry the exposure.", "russia-eurasia": "**Exporter windfalls** for Russia and Kazakhstan unless they are a failing region. Central Asian water sharing and importers in the Caucasus are exposed." }, "evolution": { "lead_indicators": "**Poor crop conditions in two exporting regions** in one season, exporters' stocks-to-use ratios at ten-year lows and an El Niño or La Niña advisory during both growing seasons.", "triggers": "Extreme heat and drought cut exportable grain from **two major producing regions** by 25 per cent in the same season, measured against the five-year average.", "immediate": "Within months **international staple prices double**. Other exporters restrict sales, some with normal harvests, and contracted cargoes are delayed, re-priced or cancelled.", "post_immediate": "Delivered imports fall **15 per cent below requirement** for exposed buyers. Subsidy bills double, reserves drain, rationing begins and unrest follows where distribution is seen as unfair.", "stabilisation": "Lower fertiliser use carries the shortage into a second harvest. Prices stay doubled **for 18 months**, then fall within months once harvests recover; rebuilding reserves keeps import demand high.", "long_term": "**Child malnutrition leaves lasting losses** in health and schooling. Herds, small farms and public reserves take years to rebuild; degraded soils and depleted aquifers slow the recovery." } }, "history": [ { "edition": 2027, "rank": 4, "L2y": 3, "L10y": 4, "impact_systemic": 3, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Food and water system shock: narrowed to a named event, two producing regions failing in one season; deliberate restriction of a shared river is no longer a route into the scenario; national impact lowered from 5 to 4; loads on strategic infrastructure, critical technology and macro-financial raised." } ], "citation": "GINC (2027). Scenario S06 Two breadbasket failures trigger a food availability crisis, Scenario Library v0.5. scenarios.ginc.org/scenarios/breadbasket-failure" }, { "id": "S07", "slug": "core-disaster", "title": "A major disaster disables the national economic core", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "C", "short_title": "Core disaster", "thematics": [ "climate-energy-resources", "resilience-crisis-preparedness" ], "likelihood_type": "idiosyncratic", "likelihood_note": "The probability that a given nation experiences the Standard Severe event in its principal economic concentration. Risk is clustered in nations with one dominant city on a hazard-exposed site.", "scores": { "likelihood_2y": { "band": 2, "rationale": "Disasters with damage near or above 8 per cent of GDP are recorded a handful of times each decade across 197 nations, mostly in smaller or lower-income states: Haiti 2010, Chile 2010, Thailand 2011 and Nepal 2015 qualify, while the 2023 earthquakes cost Türkiye about 4 per cent. That base rate gives a given nation under 1 per cent in two years. The first-pass rating of band 3 counted any 1-in-100 hazard, not one meeting the damage threshold." }, "likelihood_10y": { "band": 3, "rationale": "The same base rate over ten years gives a given nation a few per cent, inside band 3. Exposure is rising: people and assets continue to concentrate in coastal, riverine and seismic zones, and warming raises the frequency of extreme rainfall, heat and fire weather. Nations with one dominant city on an exposed site sit above the band; large economies with dispersed activity sit below it." }, "impact_systemic": { "level": 1, "rationale": "The event strikes one nation. Even the costliest recorded disasters fall below 0.5 per cent of world output: the Japanese government put direct damage from the 2011 Tōhoku earthquake at about 16.9 trillion yen. Spillovers run through particular supply chains, as with hard disk drives after the 2011 Thailand floods, and fade within about a year. The level would rise only where the core is a global financial or manufacturing hub." }, "impact_national": { "level": 4, "rationale": "Direct damage of 8 per cent of GDP, a tenth of the population affected and a month of essential services below half capacity place economic damage and essential services at Severe. The level is not Catastrophic because the state, the currency and most of the territory continue to function and reconstruction completes in two years. Türkiye in 2023 absorbed damage of about 4 per cent of GDP without losing fiscal control; this event is twice that." }, "confidence": { "level": "medium", "reason": "Hazard science and loss records are mature and the panel members who held the scenario gave identical ratings. The step from a common damage threshold to a frequency for each nation is less certain." }, "priority": 8, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "days", "duration": "30 days (acute phase)", "warning": "days (none for the earthquake variant)", "scope": "national", "origin": "natural", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "years (two-year reconstruction)" }, "summary": "A flood, storm, fire, heat emergency or earthquake strikes the nation's principal economic concentration. The hazard is the one most relevant to that nation, calibrated to a common consequence: 10 per cent of the population affected and direct damage equal to 8 per cent of annual GDP. Key transport, water and health assets in the core operate below half capacity for 30 days. Reconstruction takes two years and insurance covers less than half the loss. The scenario does not impose an identical physical hazard on every nation. It tests evacuation, continuity of essential services and recovery finance. It is the only natural-hazard test among the twenty.", "narrative": { "dateline": "November 2031", "text": "The cyclone made landfall on 14 September 2029, forty kilometres from the capital, at the top of a spring tide. Forecasters had given four days' notice and the evacuation order was issued 36 hours before landfall. About 60 per cent of those ordered to leave did so. The river embankments on the eastern side of the city, last strengthened four decades earlier, were overtopped in three places during the night.\n\nBy the morning of 15 September, water stood in districts that held a tenth of the national population and produced close to a third of national output. The container port closed. The two main rail approaches and the airport access road were cut. Four of the nine water treatment works lost power or were contaminated, and supply to the metropolitan area fell to 40 per cent of normal. Three of the region's largest hospitals evacuated their patients. The others worked on generators, with fuel delivered by the army. Mobile coverage in the flooded districts failed within twelve hours as the batteries at base stations ran down.\n\nThe acute phase lasted a month. For those 30 days, port throughput, piped water and hospital capacity in the capital region stayed below half their normal levels. The central government ran the response from a secondary site because its own operations centre was inside the flood zone. Payment of emergency grants began in the third week, once the civil registry had been restored from a copy held in another city. Households without bank accounts or identity documents waited longer.\n\nThe assessment published in December 2029 put direct damage at 8 per cent of annual GDP. Insurers and the national catastrophe pool covered 38 per cent of the loss. The rest fell on households, small firms, the municipality and the central budget. The government drew its contingent credit line in the first week and its catastrophe bond paid out in November. Together these met less than a fifth of the public reconstruction bill. The remainder was financed by a supplementary budget, reallocated capital spending and new borrowing at a wider spread.\n\nOutput in the quarter after landfall was 5 per cent lower than a year earlier. Exporters that depended on the port lost contracts to suppliers in neighbouring countries and some did not regain them. About 300,000 people were still in temporary housing six months later. Two insurers withdrew flood cover from the low-lying districts in 2030 and mortgage lending there slowed.\n\nReconstruction was declared complete in September 2031, two years after landfall. The embankments were rebuilt to a higher standard and the operations centre was moved. The parliamentary inquiry found that the forecast and the warning had worked. It attributed the scale of the loss to three conditions that had been known beforehand: the state of the eastern defences, the siting of critical facilities inside the flood zone and the absence of finance arranged before the event." }, "anchors": [ { "shock_id": "turkiye-syria-earthquake-2023", "date": "6 February 2023", "event": "Türkiye–Syria earthquake", "what_happened": "Two earthquakes of magnitude 7.8 and 7.5 struck southern Türkiye and northern Syria on the same day. More than 50,000 people died in Türkiye and several thousand in Syria. Eleven Turkish provinces were affected. The World Bank estimated direct physical damage in Türkiye at US$34.2 billion, equivalent to 4 per cent of 2021 GDP.", "calibrates": "A large middle-income economy absorbed damage at half this scenario's threshold, in provinces that were not its economic core. It sets the scale at which building-code enforcement, emergency housing and the fiscal response decide the outcome." }, { "shock_id": "thailand-floods-2011", "date": "July 2011 to January 2012", "event": "Thailand floods", "what_happened": "Flooding along the Chao Phraya basin affected 65 of 77 provinces and inundated seven industrial estates north of Bangkok. More than 800 people died. The World Bank estimated damage and losses at about US$46 billion, most of it in manufacturing. Production of vehicles and hard disk drives was interrupted for months and manufacturers in other countries lost supply.", "calibrates": "The closest recorded case of a natural hazard reaching a nation's industrial core. It calibrates the loss as a share of GDP, the industry and supply channel and the limited, short-lived effect outside the country." }, { "shock_id": "great-hanshin-earthquake-1995", "date": "17 January 1995", "event": "Great Hanshin (Kobe) earthquake", "what_happened": "An earthquake beneath the Kobe area killed more than 6,400 people and destroyed elevated expressways, rail lines and most berths at the port. Damage was put at about US$100 billion, around 2 per cent of Japan's GDP at the time, and only a small share was insured. The port of Kobe, then among the world's busiest container ports, took about two years to restore and did not recover its former rank.", "calibrates": "The two-year reconstruction period and the permanent loss of trade from a damaged hub. It also shows that a high-income nation with strong institutions can carry a low insured share." }, { "shock_id": "pakistan-floods-2022", "date": "June to October 2022", "event": "Pakistan floods", "what_happened": "Monsoon flooding affected about 33 million people and killed more than 1,700. The government-led post-disaster needs assessment put damage at US$14.9 billion, economic losses at US$15.2 billion and reconstruction needs at US$16.3 billion.", "calibrates": "A flood at national scale in a lower-income state with little insurance and limited fiscal space. Reconstruction depended on external pledges, which is the 'partial' external support setting." }, { "shock_id": "los-angeles-wildfires-2025", "date": "January 2025", "event": "Los Angeles wildfires", "what_happened": "The Palisades and Eaton fires destroyed more than 16,000 structures and killed about 30 people. Insured losses were estimated at around US$40 billion, the costliest wildfire event on record for insurers. Several insurers had reduced cover in the affected areas before the fires.", "calibrates": "The fire variant in a high-income core. It marks the upper end of the insured share and shows how the retreat of private cover moves the cost of rebuilding to households and public pools." }, { "shock_id": "valencia-floods-2024", "date": "29 October 2024", "event": "Valencia floods", "what_happened": "Extreme rainfall caused flash floods in the Valencia region of Spain. More than 220 people died. The regional alert to mobile phones was sent after flooding had already begun in several towns.", "calibrates": "Warning time available is not warning received. A high-income state with accurate forecasts lost lives through late alerting, which the evacuation test must capture." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "30 days", "severe": "30 days", "extreme": "90 days" }, "onset": { "major": "days", "severe": "days", "extreme": "days" }, "warning": { "major": "days", "severe": "days (none for the earthquake variant)", "extreme": "none" }, "scope": { "major": "national", "severe": "national", "extreme": "national" }, "origin": { "major": "natural", "severe": "natural", "extreme": "natural" }, "external_support": { "major": "full", "severe": "partial", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S02)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "none (pure exposure)" }, "recovery_horizon": { "major": "months", "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "Hazard type", "default": "the hazard most relevant to the nation's core", "range": "flood, storm, fire, heat emergency or earthquake", "unit": null, "note": "Chosen nation by nation. The consequence, not the physical intensity, is held constant." }, { "name": "Share of population affected", "default": "10", "range": "5 to 25", "unit": "per cent of national population", "note": "Evacuated, displaced, injured or without essential services during the acute phase." }, { "name": "Direct damage", "default": "8", "range": "4 to 20", "unit": "per cent of annual GDP", "note": "Physical damage to buildings, infrastructure and stock. Output losses are additional." }, { "name": "Capacity of key assets in the core", "default": "below 50", "range": "25 to 75", "unit": "per cent of normal capacity", "note": "Applies to transport, water and health assets for the whole of the acute phase." }, { "name": "Acute phase", "default": "30", "range": "14 to 90", "unit": "days", "note": "The period during which key assets remain below the capacity setting." }, { "name": "Reconstruction period", "default": "2", "range": "1 to 5", "unit": "years", "note": "Time to restore damaged assets. Lower-income nations may warrant the upper end." }, { "name": "Insured share of the loss", "default": "40", "range": "5 to 49", "unit": "per cent of direct damage", "note": "Private insurance and public catastrophe pools together. The specification requires less than half." } ] }, "transmission": [ "The hazard strikes the principal economic concentration, affecting 10 per cent of the population and destroying buildings and infrastructure worth 8 per cent of annual GDP.", "Warning, evacuation and building standards determine deaths and injuries. Where alerts arrive late or people do not act on them, casualties rise sharply.", "Transport, water and health assets in the core operate below half capacity for a month. Power and telecommunications outages slow the response.", "Firms in the core stop work. Ports, airports and logistics hubs close and suppliers and customers elsewhere in the country lose inputs and markets.", "Insurance pays less than half the loss. Households, small firms and municipalities carry the rest or wait for public support.", "The central budget funds relief and reconstruction through reallocation and borrowing. Sovereign spreads widen where fiscal space is thin.", "Displacement, interrupted schooling and deferred health care persist through a two-year reconstruction. Some firms and residents do not return.", "Insurers reprice or withdraw cover in the affected districts and an inquiry assigns responsibility, which shapes public confidence in the authorities." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Medium", "channel": "Armed forces divert to search and rescue, logistics and engineering; bases and readiness in the core are degraded." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Transport, water, power, telecommunications and hospitals in the core run below half capacity for a month." }, { "dimension": "Hard", "domain": "critical-technology", "load": "Low", "channel": "Early-warning, geospatial and data facilities are strained; sites in the core depend on backup power." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Evacuation, continuity of government, registration, payments and a two-year reconstruction programme test central and city administration." }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "Deaths, injuries, hospital evacuation, displacement, interrupted schooling and loss of skilled workers from the core." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "Confidence in the authorities depends on the fairness of relief and the findings of the inquiry." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Uninsured losses fall on the budget, banks and households; borrowing rises and insurers reprice or withdraw." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Output stops in the core; port and logistics closures cut exports and break domestic supply chains." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "Generation, fuel distribution and water supply in the core are interrupted; repair depends on imported equipment." } ], "stakeholders": { "government": { "exposure": "Warning and evacuation systems, continuity-of-government sites, flood defences and building-code enforcement, finance arranged before the event and the capacity of city authorities.", "actions": [ "Test evacuation of the core at full scale and publish the compliance rate", "Arrange contingent credit, catastrophe bonds and reserve funds sized to a loss of 8 per cent of GDP", "Move operations centres, registries and backup sites outside the mapped hazard zone" ], "watch": [ "Condition surveys of embankments, dams and drainage", "Insured share of residential and commercial property in the core", "Seasonal forecasts and seismic hazard updates" ], "relevance": 4 }, "technology": { "exposure": "Data centres, exchanges, base stations and cable landing points sited in the core, the delivery of alerts and the duration of backup power.", "actions": [ "Hold recoverable copies of registries and payment systems in a second region", "Extend backup power at base stations and exchanges to at least 72 hours", "Test cell-broadcast alerts against the full population of the core" ], "watch": [ "Hazard maps set against the location of critical sites", "Results of backup power and fuel resupply tests", "Recovery time achieved in failover exercises" ], "relevance": 3 }, "investors": { "exposure": "Property insurers, reinsurers, sovereign and municipal debt, mortgage books, utilities and firms with a single site in the core.", "actions": [ "Screen assets and suppliers for location in the core hazard zone", "Stress sovereign and municipal credit for an uninsured loss of 4 to 5 per cent of GDP", "Reflect the possible withdrawal of insurance cover in property and mortgage valuations" ], "watch": [ "Reinsurance renewal prices and terms", "Insurer exits and the growth of public pools by district", "Sovereign use of contingent credit and catastrophe bonds" ], "relevance": 5 }, "public": { "exposure": "Households and small firms in the hazard zone, above all those without insurance, savings, bank accounts or identity documents.", "actions": [ "Know the evacuation route and the conditions under which to leave", "Keep water, medicines and copies of documents for 72 hours", "Check what the household insurance policy covers and excludes" ], "watch": [ "Official alerts and evacuation orders", "Local hazard maps and the state of defence works", "Changes in the price and availability of home insurance" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Hurricane, wildfire and earthquake exposure meets very high asset values on the Gulf, Atlantic and Pacific coasts; insurers are withdrawing from several markets." }, { "region": "europe", "exposure": "Medium", "rationale": "River floods and heat are the main hazards, with seismic risk in the south-east; activity is dispersed and public backstops are strong." }, { "region": "china", "exposure": "High", "rationale": "Typhoon, flood and earthquake exposure coincides with the delta city clusters that hold a large share of output and exports." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Typhoons and earthquakes strike capital regions directly; in Pacific island states the core is most of the country." }, { "region": "south-asia", "exposure": "High", "rationale": "Monsoon floods, cyclones, extreme heat and Himalayan seismic risk meet dense cities, low insurance cover and limited fiscal space." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Extreme heat and flash floods are rising; Türkiye and Iran carry major seismic risk, while Gulf states hold fiscal buffers." }, { "region": "africa", "exposure": "High", "rationale": "Floods and cyclones strike fast-growing coastal and river cities with thin drainage, low insurance cover and little arranged finance." }, { "region": "latin-america", "exposure": "High", "rationale": "Hurricanes, earthquakes and El Niño floods fall on dominant capital cities; Caribbean states can lose more than a year's output." }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "Central Asian and Caucasus capitals sit on active faults; Russian activity is dispersed, with wildfire and river floods the main hazards." } ], "indicators": [ { "name": "El Niño and La Niña state and seasonal outlook", "source": "WMO El Niño/La Niña Update", "threshold": "El Niño or La Niña conditions declared for the coming season", "cadence": "quarterly" }, { "name": "River flood forecasts for the core basin", "source": "Global Flood Awareness System (GloFAS), Copernicus Emergency Management Service", "threshold": "forecast flow above the 20-year return level", "cadence": "daily" }, { "name": "Coverage of multi-hazard early warning systems", "source": "UNDRR and WMO, Global Status of Multi-Hazard Early Warning Systems", "threshold": "no multi-hazard early warning system reported", "cadence": "annual" }, { "name": "Insured share of natural catastrophe losses", "source": "Swiss Re Institute, sigma", "threshold": "insured share below 40 per cent of national catastrophe losses", "cadence": "annual" }, { "name": "Property catastrophe reinsurance pricing", "source": "Guy Carpenter Global Property Catastrophe Rate-on-Line Index", "threshold": "rise of more than 20 per cent at the January renewal", "cadence": "annual" }, { "name": "Hazard exposure and coping capacity by nation", "source": "INFORM Risk Index, European Commission Joint Research Centre", "threshold": "hazard and exposure score above 6 with lack of coping capacity above 5", "cadence": "twice a year" }, { "name": "Recorded disaster losses relative to GDP", "source": "EM-DAT, Centre for Research on the Epidemiology of Disasters", "threshold": null, "cadence": "continuous" }, { "name": "Seismic hazard at the principal city", "source": "Global Earthquake Model Foundation, Global Seismic Hazard Map", "threshold": null, "cadence": null } ], "compounds": { "triggers": [ { "id": "S05", "note": "A relief effort seen as failed or unfair, close to an election or succession, can open a dispute over lawful authority." }, { "id": "S06", "note": "Only where the core is also a major grain-producing or grain-exporting region; the loss then counts as one of the two failures." }, { "id": "S02", "note": "Only where the core is a global financial centre. Elsewhere the effect is a wider spread for one sovereign." }, { "id": "S18", "note": "Relief payments after a disaster expose paper delivery and create a mandate to replace it" } ], "triggered_by": [ { "id": "S06", "note": "The heat and drought behind the breadbasket failures can produce the heat emergency or fire variant in the same season." }, { "id": "S04", "note": "A power and telecommunications blackout during extreme heat or cold turns a manageable event into an emergency in the core." } ], "amplified_by": [ { "id": "S02", "note": "Closed markets and wider spreads remove the borrowing that funds reconstruction." }, { "id": "S05", "note": "Competing authorities cannot direct evacuation, relief or reconstruction." }, { "id": "S10", "note": "Hospitals already beyond surge capacity cannot take casualties or evacuated patients." } ], "triggered_by_other": [], "amplifying_trends": [ "Climate change & physical risk", "Urban population concentration", "Infrastructure ageing & maintenance backlog", "Insurance retreat & insurability", "Disaster risk finance", "Early-warning coverage", "Dams, reservoirs & flood defence", "Local & city government capacity" ] }, "open_questions": [ "Whether the common calibration should be a damage share of GDP, as specified, or a common return period, given that 8 per cent of GDP implies very different hazard intensities across nations.", "How to treat small island and city states, where the core is most of the country and direct damage can exceed annual GDP.", "Whether a heat emergency, whose deaths are diffuse and whose physical damage is small, fits a specification defined by direct damage and asset capacity.", "Whether a two-year reconstruction period holds for lower-income nations, where recovery from comparable events has taken longer." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "The inquiry asks what was known beforehand. **Accountability for known weaknesses**, more than the hazard itself, decides whether the government keeps public confidence.", "economic": "Direct damage equals **8 per cent of GDP** and insurance covers less than half. The remainder falls on households, small firms, municipalities and the central budget.", "social": "A **tenth of the population** is affected. Households without insurance, bank accounts or identity documents wait longest for housing and payments.", "technological": "Alerts reach phones in time, but **mobile coverage fails** in flooded districts within hours. Registries restored from a second site decide when payments start.", "legal": "**Building codes and land-use rules** set the scale of damage long before the event. Insurers withdraw cover from the worst-affected districts afterwards.", "environmental": "The **locally relevant hazard** is flood, storm, fire, heat or earthquake. Warming raises the frequency of the climate-related variants." }, "regions": { "north-america": "**Insurer withdrawal** is the distinctive exposure. The 2025 Los Angeles wildfires cost insurers around US$40 billion.", "europe": "River floods and heat, with **dispersed activity** limiting the national effect. Valencia in 2024 showed that alerting can still fail.", "china": "Typhoons, floods and earthquakes threaten the **delta city clusters** that carry much of national output and exports.", "indo-pacific": "Typhoons and earthquakes reach capital regions directly. In Pacific island states **the core is the country**.", "south-asia": "Monsoon floods, cyclones, heat and earthquakes meet **low insurance cover**. Pakistan's 2022 floods affected about 33 million people.", "gulf-middle-east": "Heat and flash floods are rising. **Türkiye and Iran** carry the region's seismic risk; Gulf states hold fiscal buffers.", "africa": "Fast-growing coastal and river cities face floods and cyclones with **little arranged finance** and thin drainage.", "latin-america": "Hurricanes, earthquakes and El Niño floods strike dominant capital cities. **Caribbean states** can lose more than a year's output.", "russia-eurasia": "**Central Asian capitals** sit on active faults. Russian activity is dispersed; wildfire and river floods are the main hazards." }, "evolution": { "lead_indicators": "**Forecast river flow above the 20-year return level** in the core basin, El Niño or La Niña declared for the coming season and an insured share below 40 per cent.", "triggers": "A flood, storm, fire, heat emergency or earthquake strikes **the principal economic concentration**. Warning is days at most, and none for the earthquake variant.", "immediate": "A tenth of the population is affected. Transport, water and health assets run **below half capacity for 30 days**, and power and telecommunications outages slow the response.", "post_immediate": "Firms in the core stop work and suppliers elsewhere lose inputs. **Insurance pays less than half** of damage worth 8 per cent of GDP; the budget borrows at wider spreads.", "stabilisation": "**Reconstruction takes two years**. Displacement, interrupted schooling and deferred health care persist throughout, and an inquiry assigns responsibility for weaknesses known beforehand.", "long_term": "Some firms and residents do not return and **lost trade is not fully regained**. Insurers reprice or withdraw cover in the affected districts and mortgage lending there slows." } }, "history": [ { "edition": 2027, "rank": 9, "L2y": 2, "L10y": 3, "impact_systemic": 1, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Catastrophic disaster in the core: the event is now calibrated to a common consequence (10 per cent of the population affected, direct damage of 8 per cent of GDP, key assets below half capacity for a month) instead of a common return period; likelihood and impact each lowered one step; macro-financial and industry loads raised to High." } ], "citation": "GINC (2027). Scenario S07 A major disaster disables the national economic core, Scenario Library v0.5. scenarios.ginc.org/scenarios/core-disaster" }, { "id": "S08", "slug": "ai-labour-shock", "title": "An AI deployment step causes abrupt labour displacement", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "D", "short_title": "AI labour shock", "thematics": [ "ai-cyber-digital", "demographics-human-capital", "economic-security-supply-chains" ], "likelihood_type": "systemic", "likelihood_note": "The rating is for displacement at the stated share and period. Gradual automation of tasks is a trend and is not rated here.", "scores": { "likelihood_2y": { "band": 3, "rationale": "METR measurements show the length of tasks that AI agents complete doubling about every seven months, and employment of young workers in exposed occupations has already fallen. A step that makes whole workflows viable within two years, with displacement on this scale following, would still require reliability, integration and liability barriers to fall together. Earlier general-purpose technologies took far longer to reach payrolls. Possible: 1 to 5 per cent." }, "likelihood_10y": { "band": 4, "rationale": "Over ten years, continued capability gains and falling inference costs make automation of whole workflows plausible. The uncertain part is the pace. Displacement of 10 per cent of employment within three years is much faster than past technological adjustment, and regulation, liability and organisational inertia slow adoption. One panel member rated this horizon Highly likely. The set holds it at Likely: 5 to 25 per cent." }, "impact_systemic": { "level": 3, "rationale": "Global output probably rises, so the rating rests on capability and not on output at risk. Band shifts are expected across human capital, public finance and cohesion in many nations at once. The loss falls on labour income, entry routes into skilled work and employment-linked revenue, and it is concentrated in high-income and services-exporting economies. Economies with small formal services sectors are less exposed. Significant, not Severe." }, "impact_national": { "level": 4, "rationale": "For a highly exposed nation the highest dimensions are economic damage to households and social cohesion. One job in ten is removed or redesigned in three years, graduate entry halves and receipts from income tax and social contributions fall 10 per cent below plan while benefit demand rises. Concentrated displacement in the United States after China joined the WTO depressed local employment for more than a decade. Severe." }, "confidence": { "level": "low", "reason": "The pace of AI capability and adoption is contested, the displacement share is an assumption and no historical event combines rising output with falling employment-linked revenue." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "3 years", "warning": "months", "scope": "global", "origin": "accidental (technological)", "external_support": "none", "policy_response": "current plans executed", "recovery_horizon": "structural" }, "summary": "Reliable, low-cost AI agents make complete administrative and professional workflows commercially viable within a period of months. Over the following three years, employers in highly exposed economies remove or radically redesign jobs equal to 10 per cent of employment. Entry-level recruitment in affected occupations halves before training and benefit systems adapt. Productivity gains accrue mainly to model owners and leading adopters, while employment-linked tax receipts fall 10 per cent below plan. Services exporters lose outsourcing contracts. The test is whether a nation can absorb the displacement without losing its supply of skilled entrants, its public revenue or public trust in economic opportunity.", "narrative": { "dateline": "March 2031", "text": "The step came in the first half of 2028. Within a few months, three providers released agent systems that completed administrative and professional tasks lasting several days, at an error rate below that of a supervised junior employee and at a cost per task that fell by more than half during the year. Until then, firms had used AI to assist staff. From the autumn of 2028 they assigned it whole workflows: claims handling, accounts payable, contract review, first-line customer service, software maintenance and routine reporting.\n\nHeadcount did not fall first. Recruitment did. In the highly exposed economies, graduate and trainee intakes in the affected occupations for 2029 were about half those of 2027. Redundancies followed through 2029 and 2030, as firms redesigned processes around the agents and as slower competitors lost contracts to faster ones. By early 2031, jobs equal to 10 per cent of employment in these economies had been removed or changed so far that the previous holder could not fill them without retraining. About a third of the displaced workers had found work at comparable pay.\n\nOutput rose. Measured productivity in business services grew faster than at any time in two decades, and corporate profits rose with it. The gains were concentrated in the firms that owned the models and in the early adopters. Public revenue moved the other way. By the third year, income tax and social contributions were 10 per cent below budget plans, because those plans had assumed that rising output would bring rising payrolls. Corporate tax receipts increased by less than the payroll shortfall, and part of the profit was booked abroad.\n\nBenefit systems designed for cyclical unemployment met claimants who were qualified, in mid-career and unlikely to be recalled. Public employment services had training places for a small fraction of them, and many courses prepared people for occupations that were themselves contracting. Universities recorded falling applications for law, accountancy and computing degrees. Professional bodies reported that the supervised junior work through which practitioners had qualified no longer existed in sufficient volume.\n\nServices exporters were affected through trade. Clients renegotiated outsourcing contracts for back-office work and software maintenance at lower volumes or took the work back in-house. Export receipts from business services fell in several South Asian and South-East Asian economies, where the sector had been the main source of graduate employment.\n\nSurveys in 2030 recorded a marked fall in the share of young adults who expected to be better off than their parents. Legislatures debated taxes on automated work, restrictions on deployment in regulated professions and wage insurance. Few had legislated by 2031. The nations that held their position had kept entry routes open through funded traineeships, moved the tax base towards profits and consumption, retrained at scale and used the same systems to improve public administration." }, "anchors": [ { "shock_id": "generative-ai-adoption-2023", "date": "2023–2026", "event": "Generative AI adoption", "what_happened": "ChatGPT was reported to have reached about 100 million monthly users within two months of its release in November 2022. A Stanford Digital Economy Lab study of US payroll records, published in August 2025, found a 13 per cent relative fall in employment among workers aged 22 to 25 in the most AI-exposed occupations since late 2022, while employment of older workers in the same occupations held.", "calibrates": "The order of events. Displacement appears first as lower entry-level hiring and not as redundancy, and it is measurable before whole workflows are automated. The scenario scales that early effect up." }, { "shock_id": "metr-time-horizon-measurements-2025", "date": "March 2025 to April 2026", "event": "METR time-horizon measurements", "what_happened": "METR measured the length of software tasks that AI agents complete with 50 per cent reliability and reported in March 2025 that it had doubled about every seven months since 2019.", "calibrates": "The deployment step. If the trend holds, agents reach tasks lasting days within the two-year horizon. The measurements cover software tasks at 50 per cent reliability, which is well short of the reliability that unsupervised commercial use requires." }, { "shock_id": "china-after-wto-accession-2001", "date": "2001–2010", "event": "China after WTO accession", "what_happened": "Research by Autor, Dorn, Hanson and co-authors attributed about one million US manufacturing job losses between 1999 and 2011 to import competition from China and about 2.4 million once linked industries and local demand are counted. Affected local labour markets showed depressed employment and wages for more than a decade.", "calibrates": "Adjustment speed and persistence. A concentrated displacement much smaller than the one assumed here was not absorbed by mobility or retraining within ten years, and it had lasting political effects in the affected areas." }, { "shock_id": "global-financial-crisis-2008", "date": "2008–2009", "event": "Global financial crisis", "what_happened": "US payroll employment fell by about 8.7 million between early 2008 and early 2010 and the unemployment rate reached 10 per cent in October 2009. US federal receipts fell by about 17 per cent in fiscal year 2009. Studies of graduates who enter the labour market in a recession find earnings losses that persist for about ten years.", "calibrates": "The scale of the employment and revenue loss and the lasting cost to cohorts that cannot enter. The difference is that in 2008 output fell and later recovered. Here output rises and the jobs do not return." }, { "shock_id": "tcs-workforce-reduction-2025", "date": "July 2025", "event": "TCS workforce reduction", "what_happened": "Tata Consultancy Services, India's largest IT services exporter, announced that it would reduce its workforce by about 2 per cent, roughly 12,000 roles, mostly in middle and senior grades. The company cited skill mismatch and limited scope for redeployment.", "calibrates": "The trade channel. Services exporters adjust headcount when the delivery model changes, before any fall in client demand. The scenario assumes a reduction several times larger across the sector." }, { "shock_id": "previous-general-purpose-technologies-1990", "date": "1990s–2000s", "event": "Previous general-purpose technologies", "what_happened": "Business computing spread through the 1970s and 1980s without a visible effect on measured productivity, a gap that Robert Solow noted in 1987. US productivity growth rose from the mid-1990s. Electrification of factories earlier took several decades to change output per worker.", "calibrates": "A counter-anchor on speed. Firms have needed many years to reorganise around a new technology. This is the main reason the two-year likelihood is held at Possible." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "3 years", "severe": "3 years", "extreme": "5 years" }, "onset": { "major": "years", "severe": "months", "extreme": "months" }, "warning": { "major": "months", "severe": "months", "extreme": "months" }, "scope": { "major": "global", "severe": "global", "extreme": "global" }, "origin": { "major": "accidental (technological)", "severe": "accidental (technological)", "extreme": "accidental (technological)" }, "external_support": { "major": "none", "severe": "none", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S02)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "current plans executed" }, "recovery_horizon": { "major": "years", "severe": "structural", "extreme": "structural" } }, "specific": [ { "name": "Jobs removed or radically redesigned in highly exposed economies", "default": "10 per cent", "range": "5 to 20", "unit": "per cent of employment", "note": "Major 5, Severe 10, Extreme 20. A redesigned job is one the previous holder cannot fill without retraining." }, { "name": "Period of displacement", "default": "3 years", "range": "2 to 5", "unit": "years", "note": "Measured from the point at which whole workflows become commercially viable." }, { "name": "Fall in entry-level recruitment in affected occupations", "default": "50 per cent", "range": "30 to 70", "unit": "per cent against the pre-shock intake", "note": "Arrives in the first recruitment cycle, before redundancies." }, { "name": "Shortfall in employment-linked tax receipts", "default": "10 per cent", "range": "5 to 15", "unit": "per cent below budget plan in year three", "note": "Income tax and social contributions. Gains in corporate and consumption taxes are not netted off." }, { "name": "Displaced workers re-employed at comparable pay within two years", "default": "one third", "range": "one fifth to one half", "unit": "share of displaced workers", "note": "An assumption. It sets benefit demand and the scale of retraining required." }, { "name": "Fall in business services export receipts for outsourcing economies", "default": "20 per cent", "range": "10 to 40", "unit": "per cent over three years", "note": "An assumption. Applies to nations where computer and business services are a leading export." }, { "name": "Domestic frontier-model capability", "default": "none", "range": "options: none, some, frontier", "unit": null, "note": "Determines whether the productivity gain and the taxable profit arise at home or abroad." } ] }, "transmission": [ "Agent reliability and cost pass the point at which firms can assign whole administrative and professional workflows, not single tasks.", "Employers in exposed occupations halve graduate and trainee intakes in the first recruitment cycle.", "Firms redesign processes around agents. Redundancies follow, and slower firms lose contracts to early adopters.", "Clients renegotiate or withdraw outsourcing contracts, reducing business services exports and graduate employment in exporting economies.", "Income tax and social contributions fall 10 per cent below plan while output and profits rise, partly outside the taxing jurisdiction.", "Benefit and retraining systems built for cyclical unemployment meet qualified claimants who will not be recalled.", "Applications for exposed degrees fall and the supervised junior work that qualifies professionals becomes scarce.", "Expectations of mobility fall among young adults. Demands for taxes and restrictions on automated work divide politics and affect investment." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "Civilian defence staff and contractors are affected; reliance on foreign models is limited to support functions." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Medium", "channel": "Data centre, grid and connectivity capacity determine who can deploy agents at scale." }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Access to frontier models and compute decides who earns the productivity gain and who pays for it." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Tax design, benefit administration, employment services and regulation of automated work are tested together." }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "Entry-level routes close; retraining capacity and graduate skills fall behind the change in tasks." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Lower expected mobility among young and qualified workers weakens trust and sharpens distributional conflict." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Employment-linked receipts fall 10 per cent below plan, the labour share of income falls and benefit spending rises." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Business services exporters lose contracts; adopting firms gain share and market concentration rises." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "Inference demand raises electricity load where data centres cluster." } ], "stakeholders": { "government": { "exposure": "Receipts from income tax and social contributions, benefit and retraining systems, the public sector's own administrative workforce and the regulation of automated work in licensed professions.", "actions": [ "Model revenue by tax line on a 10 per cent displacement over three years with output rising", "Fund traineeships and wage insurance that keep entry routes open in exposed occupations", "Set the capacity of retraining and employment services against the displacement assumed, not against a cyclical downturn" ], "watch": [ "Monthly receipts from income tax and social contributions against forecast", "Graduate and trainee intakes at the largest employers in exposed occupations", "Benefit claims from qualified workers in mid-career" ], "relevance": 3 }, "technology": { "exposure": "Model owners and early adopters gain revenue and market share. They also face liability for agent errors, regulation of deployment and proposals to tax automated work.", "actions": [ "Record agent error rates and human oversight by workflow before removing roles", "Keep a supply of trained junior staff for the supervisory work that agents require", "Prepare for deployment rules and reporting duties in regulated professions" ], "watch": [ "Agent reliability on tasks lasting days and the cost per completed task", "Liability rulings on errors made by automated systems", "Legislative proposals on taxing or restricting automated work" ], "relevance": 4 }, "investors": { "exposure": "Labour-intensive business services, outsourcing firms, private higher education, household credit held by displaced professionals and sovereigns that depend on labour taxation.", "actions": [ "Test portfolios on a 10 per cent employment displacement with output rising and labour income falling", "Review sovereign exposures where income tax and social contributions provide most revenue", "Assess household credit books by borrower occupation" ], "watch": [ "Revenue per employee and headcount guidance at business services firms", "Arrears on mortgages and consumer credit among professional households", "Fiscal forecasts revised for lower payroll growth" ], "relevance": 5 }, "public": { "exposure": "Employment and earnings in administrative and professional occupations, the value of degrees that led to them and the first jobs through which young people enter skilled work.", "actions": [ "Check which tasks in an occupation are already assigned to AI agents before choosing a course or career", "Use retraining entitlements early, while employed", "Ask employers and professional bodies how new entrants will be trained" ], "watch": [ "Entry-level vacancies in the chosen occupation", "Graduate employment and earnings by degree subject", "Changes to benefit and retraining entitlements" ], "relevance": 5 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Home of the leading model owners and early adopters. Large professional services employment and flexible dismissal rules bring fast displacement." }, { "region": "europe", "exposure": "High", "rationale": "High shares of administrative and professional employment, revenue that depends on labour taxation and few domestic frontier providers." }, { "region": "china", "exposure": "High", "rationale": "Domestic models and rapid adoption, with graduate unemployment already high and a large clerical workforce." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Outsourcing in the Philippines and services centres in Singapore and Australia are exposed. Ageing workforces in Japan and Korea soften the effect." }, { "region": "south-asia", "exposure": "High", "rationale": "IT and business process exports are the main source of graduate employment in India and a growing one in its neighbours." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Public sector employment and expatriate professional labour are exposed. Capital for adoption is available and labour taxation is light." }, { "region": "africa", "exposure": "Medium", "rationale": "Small formal services sectors limit direct displacement. Outsourcing centres and the route to services-led growth are at risk." }, { "region": "latin-america", "exposure": "Medium", "rationale": "Nearshore services and urban professional employment are exposed. Large informal sectors limit the measured share." }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "Restricted access to frontier models slows adoption. IT outsourcing and public administration are exposed." } ], "indicators": [ { "name": "Employment of workers aged 22 to 25 in AI-exposed occupations, relative to less exposed occupations", "source": "National labour force surveys; ILOSTAT", "threshold": "Relative fall of more than 20 per cent from the 2022 level", "cadence": "quarterly" }, { "name": "Job postings for entry-level roles in administrative, legal, finance and software occupations", "source": "Indeed Hiring Lab", "threshold": "Down 30 per cent on the 2024 level for two consecutive quarters", "cadence": "monthly" }, { "name": "Length of tasks that AI agents complete reliably", "source": "METR", "threshold": "Time horizon at 50 per cent reliability above one working week", "cadence": "with each major model release" }, { "name": "Price of model inference at a fixed level of capability", "source": "Stanford AI Index", "threshold": null, "cadence": "annual" }, { "name": "Share of firms using AI to produce goods or services", "source": "US Census Bureau Business Trends and Outlook Survey; Eurostat", "threshold": "Above 30 per cent of firms in business services", "cadence": "fortnightly (United States); annual (European Union)" }, { "name": "Receipts from income tax and social contributions against budget forecast", "source": "National finance ministries; OECD Revenue Statistics", "threshold": "Shortfall above 3 per cent in a year when output grows", "cadence": "monthly (national); annual (OECD)" }, { "name": "Labour share of national income", "source": "OECD; ILO", "threshold": "Fall of two percentage points within three years", "cadence": "annual" }, { "name": "Exports of computer and other business services from major outsourcing economies", "source": "WTO and UNCTAD trade in services statistics", "threshold": "Year-on-year fall in two consecutive quarters", "cadence": "quarterly" } ], "compounds": { "triggers": [ { "id": "S05", "note": "Loss of expected mobility among young and qualified workers raises the stakes of a contested transfer of power." }, { "id": "S02", "note": "Revenue shortfalls, arrears among professional households and a repricing of labour-intensive services firms weaken sovereign and credit positions." }, { "id": "S17", "note": "the same step in agent reliability, applied to research" } ], "triggered_by": [ { "id": "S17", "note": "The capability that lets AI systems direct research also completes administrative and professional workflows." }, { "id": "S13", "note": "Relaxed technology restrictions widen access to frontier models and chips and speed deployment." }, { "id": "S15", "note": "Cheaper firm power lowers the cost of inference at scale." }, { "id": "S18", "note": "Automated case handling removes clerical and intermediary work in the adopting state" } ], "amplified_by": [ { "id": "S02", "note": "A funding seizure removes the fiscal room for benefits, wage insurance and retraining." }, { "id": "S01", "note": "Bloc restrictions on models and chips leave some nations with the displacement through trade but not the adoption gain." } ], "triggered_by_other": [], "amplifying_trends": [ "General-purpose AI capability", "AI inference efficiency", "AI & knowledge-work automation", "Frontier model concentration", "Graduate skill mismatch", "Lifelong learning & digital reskilling", "Entrenched opportunity inequality", "Tax base erosion & coordination" ] }, "open_questions": [ "Whether 10 per cent of employment in three years is the right Standard Severe quantity, given that no measured displacement from AI approaches it and the figure is an assumption of the panel.", "How to rate systemic impact for an event that probably raises global output. The current rating rests on capability loss and not on output at risk.", "Whether 'removed or radically redesigned' can be measured consistently across nations, or whether the test should use a narrower quantity such as net employment loss in exposed occupations.", "Whether dependence on foreign model providers, dropped from the first-pass record, should return as a parameter or sit in a separate scenario." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Legislatures debate **taxes on automated work**, limits on deployment in regulated professions and wage insurance. Few have legislated by the third year.", "economic": "Output and profits rise while **employment-linked receipts fall 10 per cent below plan**. Gains accrue to model owners and leading adopters.", "social": "**Entry-level recruitment halves** in affected occupations. Fewer young adults expect to be better off than their parents.", "technological": "Agents complete **whole workflows**, not single tasks, at a cost per task that falls by more than half in a year.", "legal": "**Liability for agent errors** and the rules of licensed professions decide how fast roles can be removed.", "environmental": "**Inference demand** raises electricity load where data centres cluster. The effect is secondary to the labour shock." }, "regions": { "north-america": "Home of the model owners and early adopters. **Fast displacement** follows from large professional services employment and flexible dismissal rules.", "europe": "**Revenue depends on labour taxation** and few frontier providers are domestic, so displacement arrives without most of the profit.", "china": "Domestic models and rapid adoption meet **high graduate unemployment** and a large clerical workforce.", "indo-pacific": "**Outsourcing in the Philippines** and regional services centres are exposed. Ageing workforces in Japan and Korea soften the effect.", "south-asia": "**IT and business process exports** are the main source of graduate employment in India and are renegotiated at lower volumes.", "gulf-middle-east": "Public sector and expatriate professional work are exposed. **Capital for adoption** is available and labour taxation is light.", "africa": "Small formal services sectors limit direct displacement. The **route to services-led growth** is at risk.", "latin-america": "**Nearshore services** and urban professional employment are exposed. Large informal sectors limit the measured share.", "russia-eurasia": "**Restricted access to frontier models** slows adoption. IT outsourcing and public administration are exposed." }, "evolution": { "lead_indicators": "**Entry-level job postings down 30 per cent** on 2024 for two quarters, agent task horizons above one working week and fewer workers aged 22 to 25 in exposed occupations.", "triggers": "Within months, agent reliability and cost pass the point at which firms can assign **whole administrative and professional workflows**, not single tasks.", "immediate": "Recruitment falls before headcount. Employers in exposed occupations **halve graduate and trainee intakes** in the first recruitment cycle.", "post_immediate": "Redundancies follow as firms redesign processes around agents. Clients withdraw outsourcing contracts and **business services export receipts fall 20 per cent** over three years in exporting economies.", "stabilisation": "In exposed economies **one job in ten** is removed or redesigned by year three; a third of displaced workers regain comparable pay. Employment-linked receipts run 10 per cent below plan.", "long_term": "The jobs do not return. **Entry routes into skilled work** narrow as supervised junior work stays scarce, and fewer young adults expect to be better off than their parents." } }, "history": [ { "edition": 2027, "rank": 5, "L2y": 3, "L10y": 4, "impact_systemic": 3, "impact_national": 4, "confidence": "low" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Rapid AI diffusion shock: narrowed to the labour-market face with a stated share of employment and period, onset moved from years to months, the market-concentration and provider-dependence variants removed; ten-year likelihood and systemic impact each lowered by one." } ], "citation": "GINC (2027). Scenario S08 An AI deployment step causes abrupt labour displacement, Scenario Library v0.5. scenarios.ginc.org/scenarios/ai-labour-shock" }, { "id": "S09", "slug": "cryptographic-trust-break", "title": "A cryptographic breakthrough invalidates digital trust", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "D", "short_title": "Cryptographic trust break", "thematics": [ "ai-cyber-digital", "resilience-crisis-preparedness", "information-integrity-social-cohesion" ], "likelihood_type": "systemic", "likelihood_note": "The likelihood is that of an attack that is demonstrated or becomes evident. A capability that exists but is used covertly does not meet the definition until it is discovered.", "scores": { "likelihood_2y": { "band": 1, "rationale": "No publicly known quantum computer is near the scale required. Published resource estimates for breaking 2048-bit RSA fell from about 20 million physical qubits in 2019 to under one million in 2025, but machines disclosed by 2026 hold far fewer, with error correction shown only on small numbers of logical qubits. A two-year event would need a concealed programme several years ahead of every public one. That is not excluded, but there is no evidence for it." }, "likelihood_10y": { "band": 3, "rationale": "Developers' published roadmaps target fault-tolerant machines by about 2030, resource estimates have fallen by more than an order of magnitude in six years and state programmes do not report progress. Against that, engineering at the required scale is unproven, and migration shrinks the vulnerable estate each year. The event needs both a working machine and adversarial use before migration is complete, which places it in the 1 to 5 per cent range." }, "impact_systemic": { "level": 3, "rationale": "Physical networks keep running, so the loss comes from transaction friction, suspended cross-border services, emergency replacement and fraud, not destroyed capacity. Lloyd's puts a major attack on payment systems at US$3.5 trillion over five years. A 12-month migration across finance, government and trade documentation is broader than that case, which supports level 3. No lasting loss of productive capacity is assumed, which holds the rating below level 4." }, "impact_national": { "level": 4, "rationale": "Rated on security and essential services for a highly exposed nation. Archived diplomatic, defence and intelligence traffic must be assumed readable, which cannot be reversed. Digital identity, remote signing and some payment services are restricted for weeks to months; Estonia suspended certificates on about 760,000 identity cards in 2017 for a far narrower flaw. Economic damage alone would rate level 3. The security loss raises the rating to level 4." }, "confidence": { "level": "low", "reason": "There is no precedent for the failure of an entire class of cryptography, state quantum programmes are not observable and the rating was held by one member of the panel." }, "priority": 4, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "days", "duration": "1 year (revocation in 30 days, emergency migration over 12 months)", "warning": "none (the general risk was known; the date was not)", "scope": "global", "origin": "adversarial (great power)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "An adversary demonstrates a practical quantum attack on widely used public-key cryptography (RSA and elliptic-curve algorithms) by decrypting intercepted material and forging selected digital signatures. Within 30 days, governments and financial operators must revoke vulnerable credentials and suspend some cross-border services. Sensitive data collected and stored in earlier years become readable. Emergency migration to post-quantum algorithms takes 12 months because embedded devices and supplier software cannot all be replaced at once. Physical networks keep operating, but confidence in authentication, confidential exchange and the legal validity of digital transactions falls sharply. Symmetric encryption with long keys is assumed to hold.", "narrative": { "dateline": "March 2032", "text": "On 9 March 2031 three foreign ministries received copies of their own diplomatic cables from 2024, in plain text, through an intermediary. Within the week a software update carrying a valid signature from a large operating-system supplier was found on test machines at two central banks. The supplier's signing key had not been stolen. Forensic teams in four countries reached the same conclusion: the private key had been computed from the public one. A state held a quantum computer able to break 2048-bit RSA and 256-bit elliptic-curve keys at a rate of about one key a day, and had chosen to show it.\n\nThe rate mattered. The adversary could not read everything, but no defender could tell which keys it had already taken. Root certificates, code-signing keys and interbank message keys were treated as compromised. In the first 30 days governments and financial operators revoked credentials in order of consequence. Seven national identity schemes suspended remote signing. Several payment systems limited cross-border instructions to counterparties that had already moved to post-quantum algorithms or pre-shared symmetric keys, and correspondent banks reintroduced call-back confirmation and value limits. Electronic bills of lading were refused at a number of ports and paper documents returned.\n\nNothing physical failed. Power, telecommunications and data centres operated throughout. What stopped was the assurance that a message came from its sender, that a record had not been altered and that a signature would stand in court. Courts in several jurisdictions were asked whether contracts signed with revoked algorithms remained valid, and legislatures passed validating acts for documents signed before the disclosure date.\n\nNations that had completed cryptographic inventories and deployed hybrid key exchange on their main systems before 2030 finished the urgent work in about four months. Others found that they did not know where the vulnerable algorithms were. Smart cards, hardware security modules, industrial controllers, vehicles and medical devices held keys that could not be changed remotely, and replacement units were on allocation for most of the year. Specialist engineers were scarce and moved to the employers that paid most. Smaller states depended on a few foreign cloud and certificate suppliers for the timetable of their own recovery.\n\nThe larger loss was retrospective. Traffic intercepted and stored since the 2010s became readable at a pace the adversary chose. Agent identities, negotiating positions, health records and commercial secrets from two decades had to be assumed exposed. Selected disclosures continued through 2031 and were timed to coincide with negotiations and elections. Forged documents carrying valid signatures under the old algorithms circulated beside genuine ones, and official denials had limited effect.\n\nBy March 2032 most critical systems in advanced economies ran on post-quantum algorithms. Long-lived devices and many public registries in lower-income countries did not. The event was not an outage, and continuity plans written for outages did not apply. The capability it tested was knowing where trust was held in each system and being able to replace it in order of consequence." }, "anchors": [ { "shock_id": "diginotar-compromise-2011", "date": "June to September 2011", "event": "DigiNotar compromise", "what_happened": "An intruder issued more than 500 fraudulent certificates from the Dutch certificate authority DigiNotar, including one for google.com that was used to intercept traffic from about 300,000 addresses, almost all in Iran. Browsers removed trust, the Dutch government took over the company's operations because its own services relied on DigiNotar certificates, and the company was declared bankrupt in September 2011.", "calibrates": "The speed at which trust is withdrawn once forgery is shown and the exposure of government services to a single certificate supplier. One authority failed in 2011; the scenario fails the algorithms that every authority uses." }, { "shock_id": "heartbleed-2014", "date": "April 2014", "event": "Heartbleed", "what_happened": "A flaw in the OpenSSL library, disclosed on 7 April 2014, allowed private keys to be read from server memory. Netcraft estimated that about 17 per cent of secure web servers, around half a million, were vulnerable. Operators had to patch, revoke and reissue certificates, and many did so slowly or not at all. The Canada Revenue Agency suspended online services for several days after 900 social insurance numbers were taken.", "calibrates": "Mass revocation and reissue under time pressure, and the tail of systems that are never fixed. Heartbleed needed a software patch; the scenario needs new algorithms and, where keys are fixed in devices, new hardware." }, { "shock_id": "estonian-id-card-suspension-2017", "date": "September to November 2017", "event": "Estonian identity card certificate suspension", "what_happened": "A flaw in the key-generation library of a widely used chip made RSA keys on Estonian identity cards open to factoring in principle. On 3 November 2017 Estonia suspended the certificates of about 760,000 cards and required holders to update them remotely or in person. No theft of identity was reported. Service points were congested for weeks.", "calibrates": "The national impact rating. A state with high digital capability took about two months to manage a flaw in one chip and one credential. The scenario affects every credential type at once and gives no period of private notice." }, { "shock_id": "nist-post-quantum-standards-2024", "date": "13 August 2024", "event": "NIST post-quantum cryptography standards", "what_happened": "The US National Institute of Standards and Technology published its first three post-quantum standards (FIPS 203, 204 and 205), eight years after it called for proposals in 2016. Its draft transition guidance of November 2024 proposes that RSA and elliptic-curve algorithms at the 112-bit security level be deprecated after 2030 and that these algorithm families be disallowed after 2035.", "calibrates": "The planned migration period, which runs to 2035. An event before then meets an incomplete transition, and the scenario compresses the remaining years of planned work into 12 months." }, { "shock_id": "venona-project-1943", "date": "1943–1980", "event": "Venona project", "what_happened": "United States signals intelligence began in 1943 to work on Soviet diplomatic and intelligence cables that had been intercepted and stored. Reuse of one-time pad material allowed about 3,000 messages sent in the 1940s to be read in whole or in part. The work continued until 1980 and identified agents long after the messages were sent.", "calibrates": "The retrospective loss. Stored intercepts keep their intelligence value for decades, so the damage from a cryptographic failure is measured over the archive and not only from the date of the event." }, { "shock_id": "lloyds-cyber-scenario-2023", "date": "October 2023", "event": "Lloyd's cyber scenario", "what_happened": "Lloyd's modelled a major cyber attack on a financial services payment system and put the global loss at US$3.5 trillion over five years.", "calibrates": "The systemic impact rating. The Lloyd's case is a disruption to payments alone; the scenario adds government identity, trade documentation and software supply, without physical outage." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "90 days", "severe": "1 year (revocation in 30 days, emergency migration over 12 months)", "extreme": "3 years" }, "onset": { "major": "weeks", "severe": "days", "extreme": "days" }, "warning": { "major": "months (capability reported before it is used)", "severe": "none (the general risk was known; the date was not)", "extreme": "none" }, "scope": { "major": "global", "severe": "global", "extreme": "global" }, "origin": { "major": "adversarial (great power)", "severe": "adversarial (great power)", "extreme": "adversarial (great power)" }, "external_support": { "major": "full", "severe": "partial", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S04)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "none (pure exposure)" }, "recovery_horizon": { "major": "months", "severe": "years", "extreme": "years" } }, "specific": [ { "name": "Vulnerable share of public-key credentials in use", "default": "60 per cent", "range": "30 to 90", "unit": "per cent of credentials", "note": "Credentials that still rely on RSA or elliptic-curve algorithms with no post-quantum or hybrid alternative deployed. The share falls each year as migration proceeds." }, { "name": "Time to break one key", "default": "1 day", "range": "1 hour to 30 days", "unit": "time for one 2048-bit RSA key", "note": "Decides whether compromise is selective or wholesale. At one day the adversary targets root, code-signing and interbank keys; at one hour bulk decryption of stored traffic becomes practical." }, { "name": "Revocation window", "default": "30 days", "range": "7 to 90", "unit": "days", "note": "Time within which governments and financial operators revoke vulnerable credentials on critical systems." }, { "name": "Emergency migration period", "default": "12 months", "range": "6 to 36", "unit": "months", "note": "Time to move critical systems to post-quantum algorithms. Long-lived devices outside critical systems take longer and are not counted." }, { "name": "Devices that cannot be updated in the field", "default": "25 per cent", "range": "10 to 50", "unit": "per cent of embedded and operational devices holding keys", "note": "Smart cards, hardware security modules, industrial controllers, vehicles and medical devices that need physical replacement." }, { "name": "Depth of readable archive", "default": "15 years", "range": "5 to 25", "unit": "years of stored intercepted traffic", "note": "Period over which an adversary is assumed to have collected and kept encrypted traffic for later decryption." }, { "name": "Cross-border service restriction", "default": "90 days", "range": "30 to 180", "unit": "days", "note": "Period in which some cross-border payment, signing and trade document services are suspended or run under manual confirmation and value limits." } ] }, "transmission": [ "A state shows that it can derive private keys from public keys for RSA and elliptic-curve algorithms, by releasing decrypted intercepts and forging selected signatures.", "Certificate authorities, governments and financial operators treat root, code-signing and interbank keys as compromised and revoke vulnerable credentials within 30 days.", "Services that cannot authenticate counterparties are suspended or restricted: remote signing, some cross-border payments, electronic trade documents and automatic software updates.", "Stored intercepts become readable. Diplomatic, defence, health and commercial records from earlier years must be assumed exposed, and selective disclosure begins.", "Emergency migration competes for scarce engineers, validated modules and replacement hardware. Embedded and operational devices that cannot be updated remotely set the pace.", "Courts and legislatures must rule on documents signed with broken algorithms. Fraud and repudiation claims rise.", "Forged and genuine disclosures circulate together. Confidence in digital records and official statements falls, and manual verification raises transaction costs for a year.", "Dependence on a few foreign suppliers of cloud, certificate and cryptographic services decides the order in which nations recover." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "High", "channel": "Archived classified traffic becomes readable; command, identity and weapon-system authentication must be re-keyed while the adversary observes." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Medium", "channel": "Networks keep running; device authentication, signed firmware, remote control links and payment infrastructure need replacement." }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Cryptographic modules, certificate services and quantum capability decide who migrates independently and who waits for foreign suppliers." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Digital identity, signatures, registries and tax systems lose legal assurance; migration must be directed across agencies and operators." }, { "dimension": "Soft", "domain": "human-capital", "load": "Low", "channel": "Shortage of cryptographic engineers; health and education records exposed." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Disclosed diplomatic traffic, forged official documents and lower public confidence in digital records and official statements." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Payment, settlement and custody authentication; restricted cross-border services; fraud losses and the cost of emergency replacement." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "Medium", "channel": "Electronic trade documents, software supply chains and supplier credentials must be reissued; digital services trade slows." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Low", "channel": "Control-system authentication in grids and pipelines is weakened; operation continues under manual assurance." } ], "stakeholders": { "government": { "exposure": "Archived diplomatic, defence and intelligence traffic; national identity and signature schemes; tax, registry and court systems; the legal standing of documents signed with broken algorithms.", "actions": [ "Complete a cryptographic inventory of critical systems and set the order in which credentials would be revoked", "Deploy hybrid post-quantum key exchange on government networks and re-encrypt long-lived secrets ahead of national deadlines", "Prepare validating legislation and manual fallback procedures for identity, signing and cross-border payments" ], "watch": [ "Demonstrated logical qubit counts and published resource estimates", "Share of government systems reported as migrated against national deadlines", "Advisories on large-scale collection of encrypted traffic" ], "relevance": 5 }, "technology": { "exposure": "Root and code-signing keys, certificate services, cloud key management, hardware security modules and embedded devices that cannot be updated in the field.", "actions": [ "Build systems so that algorithms can be replaced without redesign, and test the replacement", "Move software signing and update channels to post-quantum or hash-based signatures first", "Identify devices that need physical replacement and secure supply of validated modules" ], "watch": [ "Post-quantum share of encrypted web traffic", "Issuance of post-quantum certificates by publicly trusted authorities", "Validation queue for post-quantum cryptographic modules" ], "relevance": 4 }, "investors": { "exposure": "Payment, settlement and custody operators; banks with large legacy estates; issuers whose value rests on confidential data; insurers with cyber and professional liability books.", "actions": [ "Ask portfolio companies for a cryptographic inventory and a dated migration plan", "Test liquidity and operations against 90 days of restricted cross-border settlement", "Review cyber policy wordings for accumulation from a single cryptographic cause" ], "watch": [ "Supervisory statements on quantum readiness in financial infrastructure", "Migration disclosures by systemically important payment and settlement operators", "Exclusions for cryptographic failure in cyber insurance renewals" ], "relevance": 4 }, "public": { "exposure": "Digital identity, online banking and signing; health, tax and messaging records collected in earlier years; reliance on official statements that can no longer be verified digitally.", "actions": [ "Keep paper or offline copies of essential identity, property and financial records", "Use the in-person and assisted channels that authorities designate while credentials are reissued", "Treat leaked or signed documents as unverified until the issuing body confirms them" ], "watch": [ "Notices that identity cards, banking devices or applications must be replaced", "Temporary limits on remote signing and cross-border payments", "Official channels for verifying documents and public statements" ], "relevance": 3 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Largest concentration of cloud, certificate and payment services and extensive archived government traffic; migration capacity is strong and federal deadlines are set." }, { "region": "europe", "exposure": "High", "rationale": "Heavy reliance on qualified electronic signatures and national identity schemes; migration timetables differ between member states." }, { "region": "china", "exposure": "High", "rationale": "A large state and financial estate on public-key systems, including national elliptic-curve algorithms; exposure depends on which power holds the capability." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Advanced digital economies with dense trade documentation and semiconductor supply chains; alliance communications are intelligence targets." }, { "region": "south-asia", "exposure": "Medium", "rationale": "Very large digital identity and payment systems in India; lower digital dependence elsewhere in the region." }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "Financial centres, energy trading and state communications are high-value targets; reliance on foreign security suppliers is high." }, { "region": "africa", "exposure": "Medium", "rationale": "Lower digital dependence, but mobile money and new identity systems use imported cryptography and local migration capacity is thin." }, { "region": "latin-america", "exposure": "Medium", "rationale": "Instant payment systems and digital tax administration are exposed; state archives are a lesser intelligence target." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "State communications and archives are prime intelligence targets; sanctions limit access to replacement hardware and validated modules." } ], "indicators": [ { "name": "Demonstrated error-corrected logical qubits and logical error rates", "source": "Peer-reviewed publications and published roadmaps of quantum hardware developers", "threshold": "100 logical qubits sustaining deep circuits", "cadence": "quarterly" }, { "name": "Published resource estimates for breaking 2048-bit RSA and 256-bit elliptic-curve keys", "source": "arXiv; IACR Cryptology ePrint Archive", "threshold": "under 100,000 physical qubits", "cadence": "as published" }, { "name": "Share of encrypted web traffic using post-quantum key agreement", "source": "Cloudflare Radar", "threshold": "below 50 per cent of requests", "cadence": "monthly" }, { "name": "National migration deadlines and reported progress for critical systems", "source": "NIST transition guidance (IR 8547); UK National Cyber Security Centre migration timelines; European Commission coordinated roadmap", "threshold": "published milestones missed", "cadence": "annual" }, { "name": "Post-quantum certificates in general issuance by publicly trusted authorities", "source": "CA/Browser Forum ballots; Certificate Transparency logs", "threshold": "none in general issuance", "cadence": "quarterly" }, { "name": "Validation queue for post-quantum cryptographic modules", "source": "NIST Cryptographic Module Validation Programme", "threshold": "queue longer than 12 months", "cadence": "quarterly" }, { "name": "Quantum readiness of payment and settlement infrastructure", "source": "Bank for International Settlements (Project Leap reports); G7 Cyber Expert Group statements", "threshold": null, "cadence": "annual" }, { "name": "Official advisories on collection of encrypted traffic for later decryption", "source": "US Cybersecurity and Infrastructure Security Agency; UK National Cyber Security Centre", "threshold": "attributed large-scale collection reported", "cadence": "as issued" } ], "compounds": { "triggers": [ { "id": "S02", "note": "Doubt about settlement and custody authentication could prompt withdrawals and a funding freeze." }, { "id": "S04", "note": "Forged credentials and readable archived traffic give a hostile state concealed access to operators." }, { "id": "S05", "note": "Forged signatures and contested official records feed competing claims to lawful authority." }, { "id": "S01", "note": "Supply of trusted cryptography divides along bloc lines, with incompatible standards and export controls." } ], "triggered_by": [ { "id": "S01", "note": "Technology rivalry accelerates state quantum programmes and reduces disclosure of progress." }, { "id": "S03", "note": "A major power at war has the strongest reason to use or reveal a concealed capability." }, { "id": "S17", "note": "AI-directed research could shorten the path to fault-tolerant hardware or to better algorithms." } ], "amplified_by": [ { "id": "S18", "note": "Greater reliance on digital identity and payments raises the cost of a trust failure where the platform was not built on post-quantum algorithms." }, { "id": "S04", "note": "A hybrid campaign under way gives the adversary prepared access and a reason to time disclosures." } ], "triggered_by_other": [ "An undisclosed advance in quantum error correction inside a state programme", "A classical mathematical advance against factoring or discrete logarithms, which would have the same effect without a quantum computer" ], "amplifying_trends": [ "Quantum computing", "Post-quantum cryptography transition", "Espionage & insider threat", "Cloud & edge computing", "Digital public infrastructure", "Financial market infrastructure resilience", "Trade & logistics digitalisation", "Technical & occupational skill shortages" ] }, "open_questions": [ "Whether a capability that is used covertly and never demonstrated should be a separate preset, since the damage is then found late and no emergency migration is triggered.", "Whether the time to break one key, which separates selective from wholesale compromise, should be a common slider for this scenario and not a specific parameter.", "How to rate nations with low digital dependence: they lose less on the day, but they hold long-lived imported systems and have little capacity to migrate.", "Whether a systemic rating built on output at risk understates a loss that falls mainly on confidentiality and security, which the accounting does not measure." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "**Archived diplomatic traffic** becomes readable and is disclosed selectively. Forged documents with valid old signatures weaken official denials.", "economic": "Some cross-border payment and signing services are restricted for 90 days. **Emergency migration takes 12 months** and manual verification raises transaction costs.", "social": "Health, tax and messaging records from earlier years must be assumed exposed. **Confidence in digital records** and official statements falls.", "technological": "RSA and elliptic-curve algorithms fail together. **Devices that cannot be updated in the field** set the pace of recovery.", "legal": "Courts must rule on **documents signed with broken algorithms**. Legislatures pass validating acts and repudiation claims rise.", "environmental": "There is no direct environmental effect. **Replacement of embedded devices** adds electronic waste, and energy control systems run under manual assurance." }, "regions": { "north-america": "The **largest concentration of cloud, certificate and payment services**, with extensive archived government traffic and strong migration capacity.", "europe": "Heavy reliance on **qualified electronic signatures** and national identity schemes, with migration timetables that differ between member states.", "china": "A large state and financial estate on public-key systems. Exposure depends on **which power holds the capability**.", "indo-pacific": "Advanced digital economies with dense trade documentation. **Alliance communications** are intelligence targets.", "south-asia": "**Very large identity and payment systems** in India, with lower digital dependence elsewhere in the region.", "gulf-middle-east": "Financial centres, energy trading and state communications are high-value targets, with **high reliance on foreign security suppliers**.", "africa": "Lower digital dependence, but mobile money and new identity systems use **imported cryptography** with thin local migration capacity.", "latin-america": "**Instant payment systems** and digital tax administration are exposed. State archives are a lesser target.", "russia-eurasia": "State archives are prime intelligence targets, and **sanctions limit access** to replacement hardware and validated modules." }, "evolution": { "lead_indicators": "**Resource estimates for breaking 2048-bit RSA** under 100,000 physical qubits, demonstrations of 100 logical qubits sustaining deep circuits and advisories of large-scale collection of encrypted traffic.", "triggers": "A state demonstrates a quantum attack on RSA and elliptic-curve keys by **releasing decrypted intercepts and forging selected signatures**. There is no warning of the date.", "immediate": "Root, code-signing and interbank keys are treated as compromised. Governments and financial operators **revoke vulnerable credentials within 30 days** and suspend remote signing and some cross-border payments.", "post_immediate": "Cross-border services run under manual confirmation and value limits **for 90 days**. Stored intercepts become readable, selective disclosure begins and courts rule on documents signed with broken algorithms.", "stabilisation": "**Emergency migration takes 12 months**, paced by devices that cannot be updated remotely and by scarce engineers. Nations with cryptographic inventories finish urgent work in about four months.", "long_term": "**Fifteen years of archived traffic** must be assumed exposed, which cannot be reversed. Long-lived devices and many registries in lower-income countries remain on the broken algorithms." } }, "history": [ { "edition": 2027, "rank": 10, "L2y": 1, "L10y": 3, "impact_systemic": 3, "impact_national": 4, "confidence": "low" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Entered the Library in the second pass, proposed by the model panel." } ], "citation": "GINC (2027). Scenario S09 A cryptographic breakthrough invalidates digital trust, Scenario Library v0.5. scenarios.ginc.org/scenarios/cryptographic-trust-break" }, { "id": "S10", "slug": "severe-pandemic", "title": "A novel respiratory pathogen exceeds health surge capacity", "version": "0.5.0", "status": "active", "orientation": "downside", "family": "E", "short_title": "Severe pandemic", "thematics": [ "resilience-crisis-preparedness", "demographics-human-capital", "economic-security-supply-chains", "information-integrity-social-cohesion" ], "likelihood_type": "systemic", "likelihood_note": "Rated for a pathogen that meets every Standard Severe condition together. A milder pandemic is more likely than these bands indicate.", "scores": { "likelihood_2y": { "band": 2, "rationale": "The full definition was last met in 1918 and COVID-19 came close: one clear case and one near case in a century. The event requires three conditions together: international spread before reliable detection, a fatality ratio of 0.5 per cent and no vaccine at scale for nine months. Faster sequencing and adaptable vaccine platforms make that combination less frequent than pandemics in general. All three panel members placed it at 0.2 to 1 per cent." }, "likelihood_10y": { "band": 3, "rationale": "Five influenza or coronavirus pandemics have occurred since 1918. Only the first clearly met this infection share and fatality ratio together, with COVID-19 close. Applying the joint conditions over ten years gives 1 to 5 per cent. Circulation of H5N1 in mammals and rising contact between people, livestock and wildlife argue for the upper end of the band. Two panel members rated the event Possible and one Likely." }, "impact_systemic": { "level": 4, "rationale": "COVID-19 reduced global GDP by about 3 per cent in 2020 against forecast growth above 3 per cent, and losses persisted. Lloyd's puts the five-year weighted loss from a human pandemic at US$13.6 trillion and its extreme variant at up to 6.4 per cent of global GDP. A pathogen with more first-year deaths than COVID-19 and 15 per cent peak absence falls between the two, at 2.5 to 5 per cent of five-year global output." }, "impact_national": { "level": 4, "rationale": "In a highly exposed nation about 0.15 per cent of the population dies in the first year and hospital demand reaches twice staffed capacity, so ordinary care is rationed for months. Human welfare and essential services both reach Severe. The rating stops short of Catastrophic because the acute phase is bounded at about a year, physical assets are undamaged and most capability returns within years once vaccines are available at scale." }, "confidence": { "level": "medium", "reason": "The epidemiological parameters are bounded by 1918 and COVID-19. The likelihood bands depend on how the joint conditions are counted, and one panel member rated both impacts a level higher." }, "priority": 8, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "weeks", "duration": "1 year (acute phase; further waves in the second year)", "warning": "days (international spread precedes reliable detection)", "scope": "global", "origin": "natural", "external_support": "none (every nation is affected at once)", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "A novel respiratory pathogen spreads internationally before reliable detection and containment. It infects 30 per cent of the population during the first year, with an infection fatality ratio of 0.5 per cent before effective countermeasures, implying deaths of about 0.15 per cent of the population. Peak hospital demand reaches twice available staffed capacity in highly exposed nations. Effective vaccines are unavailable at scale for nine months and workplace absence reaches 15 per cent at the peak. Governments must sustain ordinary care, essential production and credible communication while allocating scarce treatment. The scenario tests staffed health capacity, access to countermeasures and public trust, not bed counts or written plans.", "narrative": { "dateline": "March 2031", "text": "The first clusters of severe pneumonia were reported in late September 2029. By the time a reliable diagnostic test was in general use in mid-October, the virus had been sequenced from patients in 34 countries on five continents. Containment at the border was no longer available to any government. Early estimates put the infection fatality ratio at 0.5 per cent and the estimate held through the winter.\n\nHospitals in the first affected cities reached the limit of their staffed beds in week six. At the national peaks, demand for hospital care ran at twice staffed capacity in the most exposed nations. The binding constraint was staff, then oxygen. Beds and equipment could be added in weeks; trained nurses could not, and 15 per cent of the workforce was absent at the peak through illness, isolation or care for dependants. Health ministries adopted allocation rules for intensive care that most had drafted and few had exercised. Elective surgery, cancer screening and routine immunisation were suspended for months. Maternity services were kept open by redeploying staff from other wards.\n\nMore than 20 governments restricted exports of protective equipment, medicines and vaccine inputs within the first two months. Nations with regional manufacturing and advance purchase agreements received their first vaccine deliveries in month five, in quantities sufficient only for health workers. Supply at scale began in June 2030, nine months after the first reports, and reached most low-income nations in 2031.\n\nAbsence spread from hospitals to food distribution, freight, water treatment and power operations. No essential network failed outright, but most ran on reduced rosters and deferred maintenance. Schools closed for four months on average, and pupils without a device or a connection at home did not return at the same rate as others. Global output fell 4 per cent in 2030. Governments borrowed to support incomes, and several that had entered the pandemic with high debt and low reserves sought emergency lending within the year.\n\nPublic communication determined how long measures held. Where authorities published their data, stated what was unknown and explained allocation decisions, compliance lasted through the second wave. Where guidance changed without explanation, or contradicted what hospital staff were saying in public, false claims about the origin of the virus and the safety of the vaccine reached a majority of adults and vaccine uptake stalled below 60 per cent.\n\nBy the end of the first year about 30 per cent of the world's population had been infected and more than 12 million people had died. The nations with the smallest losses were not those with the most hospital beds in their plans. They were those that could staff the beds, keep ordinary care and essential production running and retain public belief in what the authorities said." }, "anchors": [ { "shock_id": "covid-19-2020", "date": "2020–2022", "event": "COVID-19", "what_happened": "WHO declared a pandemic on 11 March 2020. Global GDP fell by about 3 per cent in 2020 and WHO estimated 14.9 million excess deaths across 2020 and 2021. Hospitals in the first affected regions exceeded intensive care capacity within weeks. By April 2020 the WTO counted about 80 countries and customs territories restricting exports of medical goods. The first vaccines were authorised in December 2020, about 11 months after the genome was published.", "calibrates": "The Standard Severe path: onset in weeks, hospital overload, export restrictions and a vaccine interval of about a year. This scenario assumes a higher infection share and more deaths in the first year." }, { "shock_id": "1918-influenza", "date": "1918–1919", "event": "1918 influenza", "what_happened": "An H1N1 influenza virus infected an estimated one third of the world's population in successive waves. Deaths are commonly put at about 50 million, with published estimates ranging widely, and mortality was unusually high among adults aged 20 to 40. No vaccine or antiviral treatment existed.", "calibrates": "The upper bound. The infection share matches the 30 per cent assumed here; the fatality ratio was several times higher, which sets Standard Extreme." }, { "shock_id": "vaccine-export-restrictions-2021", "date": "2021", "event": "Vaccine export restrictions", "what_happened": "India suspended most exports of COVID-19 vaccines from late March 2021 during its second wave, interrupting supply to COVAX, which had relied on the Serum Institute of India for a large share of its early doses. The European Union introduced an export authorisation mechanism in January 2021 and Italy used it in March 2021 to block a shipment of about 250,000 doses to Australia. COVAX delivered fewer than half of the 2 billion doses it had targeted for 2021.", "calibrates": "The order of access to countermeasures. Producers serve domestic demand first, so nations without manufacturing wait beyond the nine months assumed here." }, { "shock_id": "exercise-cygnus-2016", "date": "October 2016", "event": "Exercise Cygnus", "what_happened": "A three-day UK government exercise simulated the peak of an influenza pandemic. Its report concluded that the UK's plans, policies and capability were not sufficient to cope with the demands of a severe pandemic, and identified surge capacity in health and social care as a weakness. The report was not published until 2020.", "calibrates": "The gap between written plans and staffed capacity, and the cost of leaving exercise findings unaddressed and undisclosed." }, { "shock_id": "h5n1-in-us-dairy-cattle-2024", "date": "2024–2025", "event": "H5N1 in US dairy cattle", "what_happened": "Highly pathogenic avian influenza H5N1 was confirmed in US dairy cattle in March 2024 and spread to herds in more than a dozen states. Dozens of human cases followed, mostly among farm workers, and the first US death was reported in January 2025. No sustained human-to-human transmission was detected.", "calibrates": "The warning signal behind the likelihood bands: a virus with pandemic potential circulating in mammals in close contact with people, under uneven surveillance." }, { "shock_id": "lloyds-human-pandemic-scenario-2024", "date": "December 2024", "event": "Lloyd's human pandemic scenario", "what_happened": "Lloyd's modelled a human pandemic with a five-year probability-weighted global loss of US$13.6 trillion and a loss of up to 6.4 per cent of global GDP in its extreme variant.", "calibrates": "Systemic impact. Level 4 lies between the weighted estimate and the extreme variant." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "1 year", "severe": "1 year (acute phase; further waves in the second year)", "extreme": "3 years" }, "onset": { "major": "weeks", "severe": "weeks", "extreme": "weeks" }, "warning": { "major": "months", "severe": "days (international spread precedes reliable detection)", "extreme": "none" }, "scope": { "major": "global", "severe": "global", "extreme": "global" }, "origin": { "major": "natural", "severe": "natural", "extreme": "natural" }, "external_support": { "major": "partial", "severe": "none (every nation is affected at once)", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S02)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "current plans executed" }, "recovery_horizon": { "major": "months", "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "Population infected in the first year", "default": "30 per cent", "range": "15 to 50", "unit": "per cent of population", "note": "With the fatality ratio this gives first-year deaths of about 0.15 per cent of the population." }, { "name": "Infection fatality ratio before effective countermeasures", "default": "0.5 per cent", "range": "0.1 to 2.5", "unit": "per cent of infections", "note": "A population average. The age profile is not specified." }, { "name": "Peak hospital demand relative to staffed capacity", "default": "2 times", "range": "1.2 to 4", "unit": "multiple of staffed capacity", "note": "Applies to highly exposed nations. Staffed capacity counts beds with the trained staff to operate them." }, { "name": "Time to effective vaccine at scale", "default": "9 months", "range": "3 to 24", "unit": "months", "note": "Measured from first reports to supply sufficient for general use in producing nations. Nations without manufacturing or purchase agreements wait longer." }, { "name": "Peak workplace absence", "default": "15 per cent", "range": "8 to 30", "unit": "per cent of workforce", "note": "Illness, isolation and care for dependants combined." }, { "name": "Duration of school closure", "default": "4 months", "range": "1 to 10", "unit": "months", "note": "A GINC assumption used for the education channel. The panel did not specify it." }, { "name": "Basic reproduction number", "default": "2.5", "range": "1.5 to 5", "unit": null, "note": "Carried from the first-pass record. Consistent with 30 per cent infected in the first year only where measures and behaviour reduce transmission." } ] }, "transmission": [ "A novel respiratory pathogen spreads internationally through air travel before a reliable diagnostic test is in general use, so containment at the border fails.", "Infections reach 30 per cent of the population in the first year. Hospital demand rises to twice staffed capacity and treatment is allocated by rule.", "Ordinary care is displaced: elective treatment, screening, maternity services and routine immunisation are reduced, adding deaths and illness beyond those caused by the pathogen.", "Workplace absence peaks at 15 per cent, reducing rosters in health, food distribution, freight, utilities and public administration.", "Producer governments restrict exports of protective equipment, medicines and vaccine inputs. Nations without regional manufacturing or purchase agreements wait longest.", "Schools and contact-intensive businesses close. Output and tax receipts fall and governments borrow to support incomes.", "Unexplained changes in guidance and false health claims reduce compliance and vaccine uptake, which lengthens the acute phase.", "After vaccines arrive at scale from month nine, losses persist in learning, treatment backlogs, long-term illness, public debt and trust." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Medium", "channel": "Military medical, logistics and engineering support to civil authorities; reduced force readiness through illness; biosecurity assessment." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Medium", "channel": "Essential networks run on reduced rosters; hospital estate, oxygen supply and digital capacity face peak demand." }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Diagnostics, genomic surveillance, vaccine platforms and therapeutics manufacturing determine the time to countermeasures." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Crisis command, procurement, treatment allocation rules, data publication and continuity of ordinary public services." }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "Hospital demand at twice staffed capacity; deaths, long-term illness, displaced ordinary care and lost schooling." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Credibility of official communication, compliance with measures, false health claims and international cooperation on supply." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Output loss, falling revenue, income support and higher sovereign borrowing; funding stress for states with weak buffers." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Export restrictions on medical goods, concentrated pharmaceutical inputs, freight disruption and labour shortage in production." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Low", "channel": "Demand falls with mobility; operators maintain supply on reduced rosters." } ], "stakeholders": { "government": { "exposure": "Staffed hospital capacity, access to countermeasures, continuity of essential services and the credibility of official communication.", "actions": [ "Plan surge on the staff available, not on bed counts, and exercise treatment allocation rules before they are needed", "Secure countermeasure supply through regional manufacturing, advance purchase agreements and stocks of oxygen and protective equipment", "Publish data and state what is unknown from the first week, with one accountable source of public health guidance" ], "watch": [ "WHO Disease Outbreak News and declarations under the International Health Regulations", "Occupancy of staffed beds and absence among health workers", "Export restrictions on medical goods and vaccine inputs" ], "relevance": 4 }, "technology": { "exposure": "Operation of digital infrastructure at 15 per cent absence, demand for remote work and learning, exchange of health data and the spread of false health claims on platforms.", "actions": [ "Test continuity of network and data centre operations at 15 per cent staff absence", "Make surveillance, laboratory and hospital data systems interoperable before an outbreak", "Agree with health authorities how verified guidance is carried and how false health claims are handled" ], "watch": [ "Time taken to share genomic sequences on public databases", "Network load and outage reports during restrictions", "Circulation of false claims about vaccines and treatments" ], "relevance": 4 }, "investors": { "exposure": "Sovereign debt of nations with weak fiscal buffers, travel and hospitality, commercial property, life and health insurance and supply chains for medical goods.", "actions": [ "Run portfolios against a 12-month pandemic with 15 per cent peak absence and no vaccine at scale for nine months", "Assess sovereign exposure by fiscal headroom and reserve cover, not by pre-event health rankings", "Check portfolio companies for dependence on single-source pharmaceutical inputs and for tested absence plans" ], "watch": [ "Sovereign spreads and requests for IMF emergency financing", "Vaccine trial results and manufacturing capacity announcements", "Mobility and workplace absence data" ], "relevance": 5 }, "public": { "exposure": "Health, access to ordinary care, income, schooling and care for dependants. Exposure is highest for older people, people with chronic illness and households without savings or connectivity.", "actions": [ "Keep a household plan for illness, isolation and the care of dependants", "Follow official health guidance and check claims against published data", "Local government and civil society should identify in advance the people who will need food, medicines and learning support delivered" ], "watch": [ "Official guidance and pressure on local hospitals", "School closure and reopening decisions", "Vaccine eligibility and delivery schedules" ], "relevance": 5 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "High air connectivity and chronic illness prevalence; a strong countermeasure industry is offset by low trust in health authorities and fragmented delivery." }, { "region": "europe", "exposure": "High", "rationale": "Old populations, dense travel links and health workforce shortages; staffed capacity is exceeded early in the first affected cities." }, { "region": "china", "exposure": "High", "rationale": "Dense cities and a large older population; strong manufacturing and control capacity, with a high economic cost from prolonged restrictions." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Dense trade and travel hubs; several states have strong outbreak response, while island and lower-income members depend on imported countermeasures." }, { "region": "south-asia", "exposure": "High", "rationale": "Dense populations with limited staffed beds and oxygen supply; a large vaccine manufacturing base that is subject to export restriction." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Young populations and fiscal resources in the Gulf; exposure through migrant worker housing, mass gatherings and conflict-affected health systems." }, { "region": "africa", "exposure": "High", "rationale": "The fewest health workers per head and late vaccine access; young populations lower fatality, but ordinary care and immunisation are displaced." }, { "region": "latin-america", "exposure": "High", "rationale": "Large informal workforces cannot isolate without income; unequal access to care and limited fiscal room for prolonged support." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Older populations with high chronic illness, uneven regional health capacity and low vaccine confidence." } ], "indicators": [ { "name": "Outbreak notifications and public health emergency declarations", "source": "WHO Disease Outbreak News", "threshold": "Sustained human-to-human transmission of a novel respiratory pathogen reported in two or more WHO regions", "cadence": "as issued" }, { "name": "Avian and swine influenza in mammals and human spillover cases", "source": "World Organisation for Animal Health (WAHIS) and WHO", "threshold": "Clusters of human cases with no recorded animal contact", "cadence": "weekly", "note": "Includes H5N1 herd and human case counts." }, { "name": "Time from sample collection to public release of genomic sequences", "source": "GISAID", "threshold": null, "cadence": "continuous" }, { "name": "Density of doctors, nurses and midwives", "source": "WHO Global Health Observatory (National Health Workforce Accounts)", "threshold": "Below 44.5 per 10,000 population, the WHO reference density", "cadence": "annual" }, { "name": "Core capacity scores under the International Health Regulations", "source": "WHO States Parties Self-Assessment Annual Reporting and Joint External Evaluations", "threshold": null, "cadence": "annual", "note": "COVID-19 outcomes did not follow pre-event capacity rankings; read with trust and workforce measures." }, { "name": "Vaccine manufacturing capacity by region", "source": "WHO Global Vaccine Market Report", "threshold": null, "cadence": "annual" }, { "name": "Export restrictions on medical goods and vaccine inputs", "source": "WTO trade monitoring reports and Global Trade Alert", "threshold": "New restrictions by three or more major producers within one month", "cadence": "as issued" }, { "name": "Public trust in government and health authorities", "source": "Wellcome Global Monitor and OECD Survey on Drivers of Trust in Public Institutions", "threshold": null, "cadence": "periodic" } ], "compounds": { "triggers": [ { "id": "S02", "note": "Output loss and emergency borrowing reprice sovereign debt where buffers are weak." }, { "id": "S05", "note": "Contested emergency measures and postponed votes weaken the lawful authority of governments." }, { "id": "S01", "note": "Export restrictions on medical goods harden into lasting trade barriers." }, { "id": "S11", "note": "a pandemic prompted the 2020 suspension of debt service and could prompt a deeper treatment" }, { "id": "S18", "note": "Emergency transfers during a pandemic force a state to build delivery systems" } ], "triggered_by": [ { "id": "S03", "note": "War and displacement remove surveillance and care, so an emerging pathogen spreads before detection." }, { "id": "S05", "note": "A state without effective government detects and reports an outbreak late." }, { "id": "S06", "note": "Food scarcity raises vulnerability to infection and increases contact with wildlife and livestock." }, { "id": "S17", "note": "only if dual-use access controls fail; a tail risk, not the central case" } ], "amplified_by": [ { "id": "S04", "note": "Power and telecommunications loss during peak hospital demand; hostile information operations against health guidance." }, { "id": "S07", "note": "A disaster in the economic core removes hospital capacity and forces crowded shelter." } ], "triggered_by_other": [], "amplifying_trends": [ "Pathogen emergence pressure", "Health workforce scarcity", "Health system demand imbalance", "Pharmaceutical input concentration", "Conspiracy movements & science denial", "Global health governance", "Public communication in crisis" ] }, "open_questions": [ "Whether the two-year band should be Possible: counting COVID-19 as a full instance of the definition would give an annual rate near 2 per cent, above the range the panel adopted.", "Whether the fatality ratio of 0.5 per cent should carry an age profile, since the same average places different loads on ageing and young nations.", "Whether an accidental or deliberate release should be a separate scenario, since origin changes warning, attribution and the security response.", "How this record should be read with S20, which tests a comparable outbreak met by shared surveillance and a vaccine within 100 days." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Governments allocate scarce treatment and restrict movement at the same time. **Credible communication** determines how long measures hold.", "economic": "Workplace absence peaks at **15 per cent** and contact-intensive sectors close. Governments borrow to support incomes while revenue falls.", "social": "Hospital demand reaches **twice staffed capacity**, so ordinary care is rationed. School closures fall hardest on pupils without connectivity at home.", "technological": "Sequencing is fast but vaccines are unavailable at scale for **nine months**. Manufacturing location sets the order of access.", "legal": "Emergency powers, treatment allocation rules and **export restrictions** on medical goods are adopted within weeks and reviewed only afterwards.", "environmental": "The pathogen emerges through **animal-to-human spillover**. Energy demand and emissions fall temporarily as mobility drops." }, "regions": { "north-america": "A strong countermeasure industry is offset by **low trust in health authorities** and fragmented delivery.", "europe": "Old populations and workforce shortages mean **staffed capacity is exceeded early** in the first affected cities.", "china": "Dense cities and a large older population. Manufacturing depth is set against the **cost of prolonged restrictions**.", "indo-pacific": "Travel hubs spread the pathogen early. Several states have **strong outbreak response**; island states depend on imported countermeasures.", "south-asia": "**Staffed beds and oxygen** are limited for dense populations. Vaccine output is large but subject to export restriction.", "gulf-middle-east": "Young populations and fiscal resources limit losses in the Gulf. **Migrant worker housing** and conflict-affected health systems carry the exposure.", "africa": "The **fewest health workers per head** and the latest vaccine access. Routine immunisation and maternal care are displaced.", "latin-america": "**Informal workers** cannot isolate without income, and fiscal room for prolonged support is limited.", "russia-eurasia": "Older populations with chronic illness, uneven regional capacity and **low vaccine confidence**." }, "evolution": { "lead_indicators": "Clusters of **human cases with no recorded animal contact**, following avian or swine influenza in mammals, then sustained human-to-human transmission reported in two or more WHO regions.", "triggers": "A novel respiratory pathogen **spreads internationally before reliable detection**, so containment at the border fails. Its infection fatality ratio is 0.5 per cent.", "immediate": "Hospitals in the first affected cities reach **the limit of staffed beds in week six**. Producer governments restrict exports of protective equipment, medicines and vaccine inputs within two months.", "post_immediate": "Hospital demand peaks at **twice staffed capacity** and ordinary care is suspended. Workplace absence reaches 15 per cent, schools close for four months and governments borrow to support incomes.", "stabilisation": "**Vaccines arrive at scale from month nine**, later for nations without manufacturing or purchase agreements. Further waves follow in the second year and most capability returns within years.", "long_term": "Losses persist in **learning, treatment backlogs and long-term illness**. Public debt is higher and trust is lower where guidance changed without explanation." } }, "history": [ { "edition": 2027, "rank": 7, "L2y": 2, "L10y": 3, "impact_systemic": 4, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Pandemic with a novel pathogen: infection share, fatality ratio, hospital demand, vaccine interval and absence fixed as parameters; likelihood and impact each lowered one band; border closure removed from the definition." } ], "citation": "GINC (2027). Scenario S10 A novel respiratory pathogen exceeds health surge capacity, Scenario Library v0.5. scenarios.ginc.org/scenarios/severe-pandemic" }, { "id": "S11", "slug": "debt-service-reset", "title": "A creditor agreement releases fiscal capacity", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "A", "short_title": "Debt service reset", "thematics": [ "economic-security-supply-chains", "resilience-crisis-preparedness" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 2, "rationale": "The G20 Common Framework has handled four cases since 2020 and each took years. The Global Sovereign Debt Roundtable has improved process but has not produced binding common terms, and official, Chinese and private creditors still negotiate separately. The 2025 Sevilla Commitment stated intentions without a mechanism. Concluding 25 agreements in 18 months would need a change in creditor coordination that is not in preparation." }, "likelihood_10y": { "band": 3, "rationale": "The Brady Plan came seven years after the 1982 debt crisis began, and the HIPC Initiative followed more than a decade of repeated reschedulings. Debt service burdens in low-income countries are at their highest in decades, and a cluster of defaults could force coordination. A reset on this scale within ten years is possible, but it requires agreement between China, Paris Club members and bondholders." }, "impact_systemic": { "level": 3, "rationale": "The direct sums are small against global output: the external debt service of 25 distressed states is well under 0.5 per cent of global output a year. Level 3 rests on the second criterion: capability band shifts across several domains in at least 25 nations, together with creditor losses and a repricing of frontier sovereign debt that reaches borrowers outside the framework." }, "impact_national": { "level": 4, "rationale": "For a participating state the change is large. Where interest payments exceed spending on health or education, a 40 per cent cut in debt service for five years releases several percentage points of revenue. HIPC recipients raised poverty-reducing spending as debt service fell. Level 4 is reached on essential services, in either direction: the release lasts where budgets and procurement are credible and is dissipated where they are not." }, "confidence": { "level": "medium", "reason": "The precedents are well documented and the three panel members gave identical ratings. The creditor base is more divided than in 1996, and the use of released funds varies widely between states." }, "priority": 8, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "5 years", "warning": "months", "scope": "global (at least 25 states)", "origin": "negotiated (official and private creditors with debtor states)", "external_support": "full (concessional lending for investment only)", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "Official bilateral creditors, including China, and private creditors adopt a common restructuring framework and conclude agreements with at least 25 debt-distressed states within 18 months. External public debt service falls by 40 per cent for five years through maturity extensions, interest reductions and selective principal relief. New concessional lending finances essential investment and may not be used to repay creditors. Participating governments regain room for health, education and infrastructure, but must publish credible budgets and run transparent procurement. Creditors take losses and borrowers outside the framework may pay more to borrow. The test is whether fiscal release becomes durable capability, not renewed borrowing or politically allocated spending.", "distribution": { "gains": [ "At least 25 debt-distressed states that conclude agreements", "Their health, education and infrastructure programmes", "Households and firms that depend on public services and public investment", "Productive investors and exporters selling to recovering economies" ], "loses": [ "Bondholders and official bilateral creditors, who accept losses", "Borrowers outside the framework, which may face higher financing costs", "States that stayed current through spending cuts and receive no relief", "Intermediaries that gained from opaque procurement and undisclosed lending" ] }, "narrative": { "dateline": "November 2031", "text": "The common framework was adopted in March 2030 by the main official bilateral creditors, Chinese state lenders and a committee representing the largest bondholders. It set one sequence for every case: a debt sustainability analysis published within 60 days, a single creditor committee, comparable treatment enforced by a most-favoured-creditor clause and a standstill on payments while terms were agreed. Legislation passed in New York and London the previous year limited what a holdout creditor could recover in court.\n\nBy September 2031, 27 states had concluded agreements. Most were in Africa, with others in South Asia, Latin America and the Caribbean, Central Asia and the Pacific. The terms differed by case but met the same test: external public debt service fell by 40 per cent for five years. Maturities were extended by 12 to 15 years, interest rates were cut and six states received a reduction in principal. Multilateral lenders did not take losses. They committed new concessional loans that could be drawn only against published investment plans and not to repay other creditors.\n\nIn one East African finance ministry, interest payments had taken 31 per cent of revenue in 2029. The 2032 budget put them at 18 per cent. The difference was assigned to clinic staffing, primary school construction and a transmission line that had been suspended since 2027. Each allocation was published by project, and contracts above a set value went through an open tender portal reviewed by the national audit office.\n\nResults were uneven. Rating agencies moved every participant to selective default at signing, and 19 had been upgraded by November 2031. Among the 27, GINC identified nine where capital spending rose and was executed, eleven where the release went mainly to wages and subsidies before elections and seven where arrears and state enterprise losses absorbed most of it. Two governments returned to commercial borrowing within a year at rates above those they had just restructured. One agreement was suspended after an audit found contracts awarded without tender.\n\nCreditors recorded losses. Bondholders accepted a reduction in present value of about 30 per cent on average, and two funds pursued litigation that failed under the new statutes. Chinese state lenders extended maturities on most claims and wrote down few. Borrowers that had not applied reported higher spreads for about a year, as investors priced the possibility that they would apply later. Several governments that had cut spending to stay current said the framework favoured those that had not.\n\nThe five-year period of reduced payments ends in 2036. Whether the participating states can then service the remaining debt depends on what the released funds bought: revenue administration, schools, power and transport links that raise output, or commitments that must be paid for again." }, "anchors": [ { "shock_id": "london-debt-agreement-1953", "date": "February 1953", "event": "London Debt Agreement", "what_happened": "West Germany's pre-war and post-war external debt was cut by about half and repayment was spread over about 30 years, with debt service tied to the country's capacity to earn foreign exchange.", "calibrates": "Relief designed around capacity to pay can support recovery where the debtor has the institutions to use it." }, { "shock_id": "brady-plan-1989", "date": "1989", "event": "Brady Plan", "what_happened": "From 1989, defaulted commercial bank loans to about 18 countries, mainly in Latin America, were exchanged for tradable bonds with reduced principal or interest, partly backed by US Treasury collateral. Mexico was the first case.", "calibrates": "Private creditor participation at scale. It came seven years after the crisis began and needed a choice of instruments to bring banks in." }, { "shock_id": "hipc-initiative-and-mdri-1996", "date": "1996 and 2005", "event": "HIPC Initiative and MDRI", "what_happened": "The HIPC Initiative, launched in 1996 and enhanced in 1999, and the Multilateral Debt Relief Initiative of 2005 delivered relief worth more than US$100 billion to more than 35 low-income countries. Relief was released in stages against a reform record and a poverty reduction strategy.", "calibrates": "The Standard Severe scale and the conditional design. It also marks the limit: several recipients were again at high risk of distress within 15 years." }, { "shock_id": "debt-service-suspension-initiative-2020", "date": "May 2020 to December 2021", "event": "Debt Service Suspension Initiative", "what_happened": "The G20 suspended official bilateral debt service for 48 of 73 eligible countries, deferring about US$13 billion. Private creditors did not take part on comparable terms.", "calibrates": "Official creditors can act within weeks when they agree. A suspension without private participation defers payments and does not reduce them." }, { "shock_id": "g20-common-framework-2020", "date": "2020 onward", "event": "G20 Common Framework", "what_happened": "Chad, Zambia, Ghana and Ethiopia sought treatment. Zambia defaulted in November 2020 and completed its bond exchange in 2024. Each case took years to conclude.", "calibrates": "Counter-anchor on speed: case-by-case negotiation with separate creditor groups is far slower than this scenario requires." }, { "shock_id": "sevilla-commitment-and-jubilee-report-2025", "date": "2025", "event": "Sevilla Commitment and Jubilee report", "what_happened": "The fourth International Conference on Financing for Development adopted the Sevilla Commitment in mid-2025, and a Vatican-backed commission of economists published the Jubilee report calling for faster and deeper debt treatment.", "calibrates": "Current momentum: the intent is stated, but no binding mechanism or creditor coalition has followed." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "3 years", "severe": "5 years", "extreme": "5 years" }, "onset": { "major": "years", "severe": "months", "extreme": "months" }, "warning": { "major": null, "severe": "months", "extreme": null }, "scope": { "major": "regional (about 10 states)", "severe": "global (at least 25 states)", "extreme": "global (about 50 states)" }, "origin": { "major": null, "severe": "negotiated (official and private creditors with debtor states)", "extreme": null }, "external_support": { "major": "partial (no new concessional lending)", "severe": "full (concessional lending for investment only)", "extreme": "full (concessional lending for investment only)" }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": null }, "recovery_horizon": { "major": null, "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "States with concluded agreements", "default": "25", "range": "10 to 50", "unit": "states", "note": "Counted at 18 months from adoption of the framework." }, { "name": "Reduction in external public debt service", "default": "40", "range": "20 to 60", "unit": "per cent", "note": "Against contracted payments, held for five years." }, { "name": "Time to conclude agreements", "default": "18", "range": "12 to 36", "unit": "months", "note": "From adoption of the framework to the last agreement counted." }, { "name": "Creditor participation", "default": "official bilateral, including China, and private", "range": "options: official only / official and private / multilateral lenders also take losses", "unit": null, "note": "Multilateral lenders provide new lending and do not take losses in the default." }, { "name": "Principal relief", "default": "selective, case by case", "range": "options: none / across the board", "unit": null, "note": "Decides how much debt remains when the five-year period ends." }, { "name": "New concessional lending", "default": "1", "range": "0.5 to 2", "unit": "per cent of participating states' combined GDP a year", "note": "Drawn against published investment plans; may not be used to repay creditors." }, { "name": "Conditions on participants", "default": "published budgets and open procurement, independently reviewed", "range": "options: none / full adjustment programme", "unit": null, "note": "The condition under test. With none, the scenario measures release without safeguards." } ] }, "transmission": [ "Official bilateral and private creditors adopt one framework: a single committee per case, a published debt sustainability analysis, comparable treatment and a payment standstill during talks.", "At least 25 distressed states apply and conclude agreements within 18 months. Rating agencies move them to selective default at signing.", "External debt service falls by 40 per cent for five years through longer maturities, lower interest and selective principal relief. Creditors record present-value losses.", "New concessional lending is committed against published investment plans and cannot be used to repay other creditors.", "Governments assign the released funds in published budgets to health, education and infrastructure, with contracts awarded through open procurement.", "Outcomes diverge: states with credible budgets and audit execute investment, while others spend the release on wages, subsidies, arrears or new commercial borrowing.", "Borrowers outside the framework face higher spreads for a period, and states that stayed current contest the fairness of the terms.", "After five years debt service rises again. States that raised revenue and output regain market access on better terms, and the others return to distress." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "Fiscal pressure on security budgets eases; fragility falls where public services recover." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Suspended capital projects restart; delivery depends on project preparation, procurement and maintenance budgets." }, { "dimension": "Hard", "domain": "critical-technology", "load": "Low", "channel": "Imported equipment and digital systems become affordable again; no direct change in technology." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Debt management, budget credibility, procurement and audit decide whether the release is retained." }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "Health and education budgets recover; staffing and delivery systems determine the result." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "Creditor relationships shift; participants and states that stayed current dispute the fairness of the terms." }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Debt service, ratings, reserves and market access all change; creditors record losses." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "Medium", "channel": "Import financing and public contracts recover; domestic suppliers gain where procurement is open." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "Fuel import capacity improves, resource-backed loans are renegotiated and power investment resumes." } ], "stakeholders": { "government": { "exposure": "Debtor governments regain fiscal room under budget and procurement conditions; creditor governments record losses and set the terms.", "actions": [ "Publish all public debt, including collateralised and state enterprise loans, before applying", "Assign the released funds in the budget by programme and project before signing", "Creditor governments: legislate limits on holdout recoveries and require comparable treatment" ], "watch": [ "Creditor committee formation and time to agreement in each case", "Debt service as a share of revenue in participating states", "Budget execution and audit reports after relief" ], "relevance": 3 }, "technology": { "exposure": "Public spending on digital systems, power and connectivity resumes in participating states under open procurement rules.", "actions": [ "Prepare to bid under open tender and published contract rules", "Structure offers to fit concessional investment programmes", "Supply debt recording, budget and procurement systems that make the conditions verifiable" ], "watch": [ "Capital budgets and project pipelines in participating states", "Coverage of procurement portals and contract publication", "Concessional lending commitments for infrastructure" ], "relevance": 3 }, "investors": { "exposure": "Bondholders and lenders take present-value losses on participating sovereigns. Ratings fall to selective default and then recover, and non-participants are repriced.", "actions": [ "Value holdings of distressed sovereigns on the common terms", "Assess each participant's budget and procurement record, since the recovery in ratings depends on it", "Review exposure to borrowers that may apply later" ], "watch": [ "Rating actions on participants and non-participants", "Legislation on holdout creditors in New York and London", "Frontier sovereign bond spreads and new issuance" ], "relevance": 4 }, "public": { "exposure": "Households gain where the release reaches clinics, schools and infrastructure. They gain little where it funds wages before elections or state enterprise losses.", "actions": [ "Civil society: track budget allocations and contract awards against published commitments", "Local government: prepare investment projects that meet the lending conditions", "Media: report how the released funds are spent, not only the agreement" ], "watch": [ "Health and education spending per head after relief", "Published audit findings on the use of released funds", "New public borrowing during the relief period" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "Low", "rationale": "Creditor region with little direct gain; New York law governs many of the bonds." }, { "region": "europe", "exposure": "Low", "rationale": "Paris Club creditors and London-law bonds; losses are small relative to the financial system." }, { "region": "china", "exposure": "Medium", "rationale": "Largest official bilateral creditor; extends maturities, records losses and sets a precedent for future lending." }, { "region": "indo-pacific", "exposure": "Medium", "rationale": "Laos and several Pacific island states are candidates; Japan is a major official creditor." }, { "region": "south-asia", "exposure": "High", "rationale": "Pakistan, Sri Lanka and the Maldives are candidates; the release is large relative to revenue." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Egypt, Jordan and Lebanon as candidate debtors; Gulf states as creditors and depositors." }, { "region": "africa", "exposure": "High", "rationale": "Most participating states; interest bills had exceeded health or education spending in many of them." }, { "region": "latin-america", "exposure": "High", "rationale": "Argentina, Bolivia, Ecuador and several Caribbean states are candidates; bond-heavy debt makes private participation decisive." }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "The Kyrgyz Republic and Tajikistan owe large sums to Chinese lenders; Russia is a bilateral creditor." } ], "indicators": [ { "name": "External public debt service as a share of government revenue", "source": "World Bank International Debt Statistics; IMF World Economic Outlook", "threshold": "above 20 per cent in 25 or more states", "cadence": "annual" }, { "name": "Low-income countries at high risk of or in debt distress", "source": "IMF and World Bank debt sustainability analyses for low-income countries", "threshold": "half or more of rated countries", "cadence": "updated through the year" }, { "name": "Time from application to agreement in restructuring cases", "source": "Paris Club; IMF programme documents", "threshold": "under 12 months in two consecutive cases", "cadence": "per case" }, { "name": "Creditor composition of external public debt", "source": "World Bank International Debt Statistics", "threshold": null, "cadence": "annual" }, { "name": "Net transfers on external debt to low- and middle-income countries", "source": "World Bank International Debt Report", "threshold": "negative for two consecutive years", "cadence": "annual" }, { "name": "Frontier sovereign bond spreads", "source": "J.P. Morgan EMBI Global Diversified", "threshold": "ten or more sovereigns above 1,000 basis points", "cadence": "daily" }, { "name": "Agreed common terms among official and private creditors", "source": "Global Sovereign Debt Roundtable co-chairs' statements", "threshold": "a published term sheet endorsed by all three creditor groups", "cadence": "twice a year" }, { "name": "Budget transparency in candidate states", "source": "International Budget Partnership Open Budget Survey", "threshold": null, "cadence": "every two years" } ], "compounds": { "triggers": [ { "id": "S18", "note": "budget and procurement conditions, with restored capital spending, favour auditable public digital systems" }, { "id": "S16", "note": "fiscal room pays for extension services, seed finance and storage in low-yield regions" }, { "id": "S15", "note": "restored creditworthiness lowers the cost of capital for power projects in participating states" }, { "id": "S19", "note": "recovered health budgets sustain the primary care that preventive treatment needs" }, { "id": "S12", "note": "restored fiscal room lets members fund infrastructure and absorb lost tariff revenue" }, { "id": "S20", "note": "Released fiscal capacity funds health workers, laboratories and cold chain in distressed states." } ], "triggered_by": [ { "id": "S02", "note": "a cluster of sovereigns losing market access forces creditors to coordinate" }, { "id": "S10", "note": "a pandemic prompted the 2020 suspension of debt service and could prompt a deeper treatment" }, { "id": "S06", "note": "food import bills exhaust the foreign exchange of indebted importers" }, { "id": "S13", "note": "Cooperation between the largest official creditors makes a common restructuring framework workable" }, { "id": "S14", "note": "Reconstruction finance brings the debts of conflict-affected states into restructuring talks" }, { "id": "S16", "note": "Lower food import bills and subsidy costs reduce the financing needs of distressed importers and make restructuring terms easier to meet." } ], "amplified_by": [ { "id": "S13", "note": "cooperation between the United States and China makes common creditor terms easier to agree" }, { "id": "S12", "note": "new market access raises the export earnings from which remaining debt is serviced" } ], "triggered_by_other": [], "amplifying_trends": [ "Sovereign creditor fragmentation", "Sovereign debt & interest burden", "Concessional finance scarcity", "Fiscal rules & budget credibility", "Public procurement capability", "Corruption & state capture", "Development finance as influence", "Slow growth & fiscal space" ] }, "open_questions": [ "Whether 25 agreements in 18 months is attainable when the four Common Framework cases each took years, and what change in creditor coordination the specification assumes without stating it.", "How to treat states that stayed current through spending cuts and receive nothing, and whether their higher financing costs are large enough to count as a loss in the test.", "Whether a uniform 40 per cent cut in debt service is the right measure, when the balance between maturity extension and principal relief decides what happens after the fifth year.", "Whether middle-income distressed states belong in the same event as low-income ones, given that the test settings scale the gain by low income." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "**Chinese state lenders accept common terms** alongside other official creditors. States that stayed current through spending cuts say the framework favours those that did not.", "economic": "Debt service **falls 40 per cent for five years**. Participants move to selective default at signing and most are upgraded later; non-participants pay higher spreads for a period.", "social": "Released funds reach clinics and schools **where budgets are credible**. Elsewhere they go to wages and subsidies before elections.", "technological": "The technology load is low. **Debt recording and open tender systems** make the conditions verifiable, and imported equipment becomes affordable again.", "legal": "Statutes in New York and London **limit holdout recoveries**. A most-favoured-creditor clause enforces comparable treatment, and litigation by two funds fails.", "environmental": "**Suspended power and water projects restart** under concessional lending. Resource-backed loans are renegotiated, which reduces pressure to pledge future commodity output." }, "regions": { "north-america": "A creditor region with little direct gain. **New York law** governs many of the bonds, so its legislation decides how holdouts are treated.", "europe": "Official creditors and **London-law bonds** place Europe on the creditor side. Losses are small relative to its financial system.", "china": "The **largest official bilateral creditor** extends maturities on most claims and accepts common terms, which sets a precedent for its future lending.", "indo-pacific": "**Laos and several Pacific island states** are candidates for treatment. Japan is a major official creditor and records losses.", "south-asia": "**Pakistan, Sri Lanka and the Maldives** are candidates. The release is large relative to revenue, and delivery capacity decides the result.", "gulf-middle-east": "Egypt, Jordan and Lebanon are candidate debtors. **Gulf states are creditors and depositors** whose claims must be treated comparably.", "africa": "**Most participating states** are African. Interest bills had exceeded health or education spending in many of them, so the release is largest here.", "latin-america": "**Argentina, Bolivia and Ecuador** are candidates, with several Caribbean states. Bond-heavy debt makes private creditor participation decisive.", "russia-eurasia": "**The Kyrgyz Republic and Tajikistan** owe large sums to Chinese lenders and could qualify. Russia is a bilateral creditor to both." }, "evolution": { "lead_indicators": "Debt service exceeds 20 per cent of revenue in 25 or more states. Two consecutive restructurings close in under 12 months and **all three creditor groups endorse a term sheet**.", "triggers": "Official bilateral creditors, Chinese state lenders and the largest bondholders **adopt one common framework**. Statutes in New York and London already limit what holdout creditors can recover.", "immediate": "At least 25 states conclude agreements **within 18 months**, under a payment standstill. Rating agencies move each to selective default at signing and creditors record present-value losses.", "post_immediate": "Debt service falls 40 per cent and concessional loans fund published investment plans. **Outcomes diverge**: some states execute investment, others fund wages, subsidies and arrears. Non-participants pay higher spreads.", "stabilisation": "Reduced payments hold **for five years**. Most participants are upgraded, spreads on outside borrowers ease after about a year and states that stayed current contest the terms.", "long_term": "After the fifth year debt service rises again. States that raised revenue and output **regain market access on better terms**; the others return to distress." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 2, "L10y": 3, "impact_systemic": 3, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Coordinated sovereign debt reset: at least 25 states within 18 months in place of about 50, debt service cut by 40 per cent in place of half, systemic impact raised to level 3 and the test moved to budget credibility and procurement." } ], "citation": "GINC (2027). Scenario S11 A creditor agreement releases fiscal capacity, Scenario Library v0.5. scenarios.ginc.org/scenarios/debt-service-reset" }, { "id": "S12", "slug": "market-access-opening", "title": "A cross-regional market access compact redirects investment", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "A", "short_title": "Market access opening", "thematics": [ "economic-security-supply-chains", "demographics-human-capital" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 3, "rationale": "Large compacts already operate: the Regional Comprehensive Economic Partnership entered into force in 2022 and the CPTPP admitted the United Kingdom in December 2024. Tariff increases by large importers since 2025 have given other economies a reason to open to each other. A Standard Severe event needs more: advanced and emerging members together, mutual recognition beyond tariffs and entry into force within a year. Few agreements of this breadth have been ratified that quickly." }, "likelihood_10y": { "band": 4, "rationale": "Over ten years the conditions accumulate. Regional agreements have deepened steadily, services and digital trade are growing faster than goods trade and traceability requirements push partners towards mutual recognition. Existing agreements could be linked or enlarged to meet the definition without a negotiation from the start. The main obstacle is domestic consent in protected sectors, which has halted comparable agreements before." }, "impact_systemic": { "level": 3, "rationale": "Level 3 as a gain. With members at about a third of world output, a 20 per cent rise in member trade and a 30 per cent rise in productive investment imply a change of 1 to 2.5 per cent of global output over five years. World Bank modelling of the African Continental Free Trade Area put income gains at 7 per cent by 2035, most of it from trade facilitation and not from tariff removal." }, "impact_national": { "level": 4, "rationale": "Level 4. For a member that qualifies suppliers and connects new plants, the compact brings a step change in investment, formal employment and export capacity; Mexico's goods exports to the United States more than tripled in the decade after 1994. For a closely competing non-member, or a member whose protected sectors cannot adjust, the loss of investment and market share is lasting. The highest dimension reached is economic." }, "confidence": { "level": "medium", "reason": "The effects of past agreements are well measured. The speed assumed here and the scale of investment diversion from non-members have fewer precedents." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "3 years", "warning": "months", "scope": "global", "origin": "negotiated", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "structural" }, "summary": "Large emerging and advanced economies, together about a third of world output, bring a trade and investment compact into force within one year of signature. It removes most tariffs among members and mutually recognises selected services qualifications, digital trade rules and product traceability systems. Over three years member trade rises 20 per cent and productive foreign investment into members 30 per cent, both relative to the prior path. New corridors become commercially viable. Nations must qualify suppliers, expand infrastructure and mobilise workers quickly. Protected incumbents inside the compact lose market share, and non-members face investment diversion and not an automatic share of the gains.", "distribution": { "gains": [ "Competitive exporters in member states that qualify suppliers quickly", "Young workers and holders of recognised qualifications in connected labour markets", "Members with spare port, power and industrial land capacity", "Logistics, standards and digital trade service providers along the new corridors", "Consumers in member states, through lower prices for traded goods" ], "loses": [ "Protected incumbent producers inside the compact", "Non-members that compete directly with members for investment", "Poorer members that lose nurses and engineers to richer partners", "Governments that relied on tariff revenue" ] }, "narrative": { "dateline": "March 2032", "text": "The compact was signed in February 2028 by 31 governments on four continents and entered into force on 1 January 2029, once the minimum number of ratifications had been deposited. Its members accounted for about a third of world output. On the first day, nine tariff lines in ten among them went to zero or began a five-year reduction. The clauses that mattered more took effect over the following year: one rule of origin that let inputs from any member count towards qualifying content; mutual recognition of engineering, nursing and accounting qualifications; common rules on data transfers and electronic documents; and acceptance of each other's product traceability records.\n\nFirms responded before governments did. Within eighteen months, announced factory, logistics and data-centre investment into members ran 30 per cent above its earlier path, and most of it went to a small number of places. A textile and electronics corridor formed between South Asian ports and East African processing zones. Vehicle component makers moved lines from non-member suppliers to member states in South-East Asia and Latin America so that finished vehicles would qualify. By the end of 2031, trade among members was 20 per cent higher than the projection made before the compact.\n\nThe gains followed capability, not membership alone. Members whose standards laboratories were accredited and whose customs systems accepted electronic certificates saw suppliers qualify within months. In others, exporters waited more than a year for test results that buyers would accept, and investment committed to them was reassigned to neighbours. Ports that could not add berths turned vessels away. Two members rationed industrial power connections. Training colleges in the faster-growing corridors could not supply enough technicians, and recognised qualifications allowed nurses and engineers to leave poorer members for richer ones.\n\nThere were losses inside the compact as well. Protected producers of steel, sugar and vehicles in several members lost market share within two years, and three governments used the safeguard clause. Tariff revenue fell in members that had relied on it and two revised their budgets during the year. Capital inflows raised exchange rates in the main recipient economies and made their other exports less competitive.\n\nNon-members did not share in the gains by default. Economies that competed directly with new members for assembly work recorded foreign investment about a tenth below earlier levels, and their exporters faced tariffs that their rivals no longer paid. Six applied to join in 2031. The list of applicants, and the conditions set for them, became the compact's main source of influence over economies outside it." }, "anchors": [ { "shock_id": "regional-comprehensive-economic-partnership-2022", "date": "1 January 2022", "event": "Regional Comprehensive Economic Partnership", "what_happened": "Signed in November 2020, the agreement entered into force on 1 January 2022 for ten of its 15 signatories, which together account for about 30 per cent of world output. A single rule of origin lets inputs from any member count towards qualifying content", "calibrates": "the scale of membership assumed here and the time from signature to entry into force; the rule of origin as the clause that moves supply chains" }, { "shock_id": "african-continental-free-trade-area-2021", "date": "1 January 2021", "event": "African Continental Free Trade Area", "what_happened": "Trading began under an agreement signed by 54 states, but tariff schedules and rules of origin were incomplete. A Guided Trade Initiative began in October 2022 with eight countries. The World Bank estimated income gains of 7 per cent, about US$450 billion, by 2035, most of it from trade facilitation", "calibrates": "the gap between entry into force and usable market access; why customs and standards capacity carry the High loads" }, { "shock_id": "north-american-free-trade-agreement-1994", "date": "1 January 1994", "event": "North American Free Trade Agreement", "what_happened": "The agreement joined an emerging economy to two advanced ones. Mexico's goods exports to the United States more than tripled within a decade and assembly investment concentrated in its northern states. A currency crisis followed in December 1994", "calibrates": "national impact for an emerging member; uneven gains within a member; the macro-financial channel" }, { "shock_id": "eu-eastern-enlargement-2004", "date": "1 May 2004", "event": "European Union enlargement of 2004", "what_happened": "Ten states with about 75 million people joined the single market, with recognition of professional qualifications. The United Kingdom, Ireland and Sweden opened their labour markets at once; other members phased access over up to seven years", "calibrates": "investment into new members, and the movement of skilled workers from poorer to richer members once qualifications are recognised" }, { "shock_id": "china-after-wto-accession-2001", "date": "2001–2010", "event": "China after WTO accession", "what_happened": "Growth averaged about 10 per cent a year and goods exports grew more than fivefold", "calibrates": "the upper bound on the response to secure market access; the effect on incumbent producers elsewhere" }, { "shock_id": "supply-chain-diversification-2018", "date": "2018–2025", "event": "Supply-chain diversification", "what_happened": "Assembly and component production moved from China towards Vietnam, Mexico, India and Indonesia after tariffs and the pandemic. Mexico became the largest source of United States goods imports in 2023", "calibrates": "how quickly productive investment relocates when relative market access changes; the diversion faced by locations outside the preferred set" } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "3 years", "severe": "3 years", "extreme": "5 years" }, "onset": { "major": "years", "severe": "months", "extreme": "months" }, "warning": { "major": "months", "severe": "months", "extreme": "months" }, "scope": { "major": "regional", "severe": "global", "extreme": "global" }, "origin": { "major": "negotiated", "severe": "negotiated", "extreme": "negotiated" }, "external_support": { "major": null, "severe": "partial", "extreme": "none" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario" }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": null }, "recovery_horizon": { "major": "years", "severe": "structural", "extreme": "structural" } }, "specific": [ { "name": "Members' share of world output", "default": "33 per cent", "range": "25 to 50", "unit": "per cent", "note": "Not fixed by the panel specification; set so that the systemic impact reaches level 3" }, { "name": "Time from signature to entry into force", "default": "12 months", "range": "6 to 24", "unit": "months", "note": "Longer at Standard Major" }, { "name": "Rise in trade among members over three years", "default": "20 per cent", "range": "10 to 35", "unit": "per cent", "note": "Relative to the path projected before the compact" }, { "name": "Rise in productive foreign investment into members over three years", "default": "30 per cent", "range": "15 to 50", "unit": "per cent", "note": "Greenfield and expansion investment; excludes mergers and portfolio flows" }, { "name": "Share of tariff lines liberalised among members", "default": "90 per cent", "range": "80 to 97", "unit": "per cent", "note": "Immediate removal or a phased reduction over five years" }, { "name": "Scope of mutual recognition", "default": "selected services qualifications, digital trade rules and product traceability systems", "range": "options: tariffs only / full regulatory recognition", "unit": null, "note": "Tariffs only at Standard Major" }, { "name": "Fall in foreign investment into closely competing non-members", "default": "10 per cent", "range": "5 to 20", "unit": "per cent", "note": "A GINC assumption; the specification states diversion without a figure" } ] }, "transmission": [ "Ratifications reach the threshold and the compact enters into force within a year of signature, removing most tariffs among members.", "A single rule of origin and mutual recognition of qualifications, digital trade rules and traceability systems lower the cost of trading and producing across members.", "Firms redirect productive investment to member locations that can qualify suppliers, and new trade corridors become commercially viable.", "Ports, power, industrial land and standards bodies in recipient members reach capacity; investment moves on to members that can connect it.", "Demand for technicians and recognised professionals rises; young workers enter formal jobs and skilled staff move from poorer to richer members.", "Protected incumbents inside the compact lose market share, tariff revenue falls and governments face safeguard requests and adjustment costs.", "Non-members lose investment and market share to members and apply to join; accession conditions extend the compact's rules." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "customs and border agencies handle higher volumes; little direct call on defence capability" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "ports, power, roads and industrial land limit how much redirected investment a member can take" }, { "dimension": "Hard", "domain": "critical-technology", "load": "Medium", "channel": "traceability systems and digital trade rules; technology absorbed through supplier links" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "customs, standards bodies, permitting and recognition of qualifications must work at the pace of the compact" }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "technical skills, recognised qualifications and the movement of young workers into formal jobs" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "negotiating weight among members; adjustment costs in protected sectors test consent" }, { "dimension": "Economic", "domain": "macro-financial", "load": "Medium", "channel": "capital inflows, exchange-rate pressure and lost tariff revenue need managing" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "supplier qualification, rules of origin and export capacity decide who captures the new corridors" }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "new plants raise industrial power demand; resource exporters gain processing investment" } ], "stakeholders": { "government": { "exposure": "Whether the nation captures redirected investment depends on customs, standards bodies, infrastructure and skills being ready when the compact enters into force. Non-members face diversion.", "actions": [ "Accredit standards laboratories and accept electronic certificates before entry into force", "Add port, power and industrial land capacity on the corridors that become viable", "Fund adjustment for protected sectors and replace lost tariff revenue" ], "watch": [ "Ratification count and the date of entry into force", "Supplier qualification times and use of tariff preferences", "Tariff revenue and requests for safeguard measures" ], "relevance": 3 }, "technology": { "exposure": "Digital trade rules and traceability requirements create demand for interoperable systems. Firms outside the recognised systems lose access.", "actions": [ "Build traceability and electronic documentation to the standards the compact recognises", "Locate data and service operations where the digital trade rules apply", "Train and certify technicians alongside new plants" ], "watch": [ "Adoption of electronic certificates of origin", "Data transfer rules among members", "Technician vacancy rates in corridor economies" ], "relevance": 4 }, "investors": { "exposure": "Productive investment is redirected towards qualifying members, with currency pressure in recipient economies and lower returns on protected incumbents and bypassed non-members.", "actions": [ "Assess members on infrastructure and administrative capacity, not on membership alone", "Test holdings in protected sectors for loss of market share", "Reassess assets in non-members that compete with member locations" ], "watch": [ "Greenfield investment announcements by destination", "Real exchange rates in the main recipient economies", "Accession applications and safeguard actions" ], "relevance": 4 }, "public": { "exposure": "More formal jobs and lower prices where investment arrives; job losses in protected sectors and the departure of nurses and engineers from poorer members.", "actions": [ "Obtain qualifications that the compact recognises", "Use retraining and adjustment support where protected sectors contract", "Hold local authorities to account for housing and services in growing corridor cities" ], "watch": [ "Formal job creation among young workers", "Emigration of health and engineering staff", "Consumer prices for traded goods" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "Medium", "rationale": "Mexico is a candidate member and gains assembly; protected producers in the larger economies face member competition" }, { "region": "europe", "exposure": "Medium", "rationale": "Machinery and services exporters gain access; protected farm and vehicle producers lose share" }, { "region": "china", "exposure": "Medium", "rationale": "Chinese firms invest in member states to qualify under the rule of origin; some assembly moves to member neighbours" }, { "region": "indo-pacific", "exposure": "High", "rationale": "South-East Asian members take redirected component and electronics investment; advanced members supply capital and services" }, { "region": "south-asia", "exposure": "High", "rationale": "Large young workforces and port corridors to East Africa; standards and customs capacity decide the gain" }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Supplier of capital, energy and transhipment to the new corridors" }, { "region": "africa", "exposure": "High", "rationale": "Processing zones and young workforces gain where suppliers qualify; the widest gap between members and bypassed neighbours" }, { "region": "latin-america", "exposure": "High", "rationale": "Component, food-processing and services investment for members; closely competing non-members lose investment" }, { "region": "russia-eurasia", "exposure": "Low", "rationale": "Largely outside the compact; little new investment and some loss of transit trade" } ], "indicators": [ { "name": "Regional trade agreements signed, ratified and notified as in force", "source": "WTO Regional Trade Agreements Database", "threshold": "A compact whose signatories exceed a quarter of world output reaches its ratification threshold", "cadence": "continuous" }, { "name": "Trade-restricting and trade-facilitating measures by large economies", "source": "WTO Trade Monitoring Report", "threshold": null, "cadence": "twice a year" }, { "name": "Greenfield foreign investment announcements by destination", "source": "UNCTAD World Investment Report", "threshold": "Announced investment into prospective members rises 15 per cent above its three-year average", "cadence": "annual" }, { "name": "Restrictions on services trade and recognition of foreign qualifications", "source": "OECD Services Trade Restrictiveness Index", "threshold": null, "cadence": "annual" }, { "name": "Customs, logistics and border performance in prospective members", "source": "World Bank Logistics Performance Index", "threshold": null, "cadence": "periodic" }, { "name": "Applied tariffs among prospective members", "source": "WTO, ITC and UNCTAD World Tariff Profiles", "threshold": null, "cadence": "annual" }, { "name": "Young people not in employment, education or training", "source": "ILO ILOSTAT", "threshold": null, "cadence": "annual" } ], "compounds": { "triggers": [ { "id": "S18", "note": "digital trade and traceability rules push members to adopt interoperable public digital systems" }, { "id": "S01", "note": "excluded powers may answer a compact they read as a bloc with restrictions of their own" }, { "id": "S15", "note": "new industrial load and lower tariffs on equipment bring standardised clean power projects forward" } ], "triggered_by": [ { "id": "S13", "note": "lower barriers between the two largest economies make a broad compact politically possible" }, { "id": "S01", "note": "economies outside the rival blocs open to each other in response" }, { "id": "S11", "note": "restored fiscal room lets members fund infrastructure and absorb lost tariff revenue" }, { "id": "S14", "note": "reliable shipping access makes cross-regional corridors viable" }, { "id": "S16", "note": "Mutual recognition of seed approvals and new farm export corridors give members a working model for wider market access." } ], "amplified_by": [ { "id": "S15", "note": "cheaper firm power lowers production costs at new member sites" }, { "id": "S16", "note": "higher farm output gives agricultural members more to export" } ], "triggered_by_other": [ "A sustained rise in tariffs by a large importer that leads other economies to open to each other" ], "amplifying_trends": [ "Regional trade agreement deepening", "Trade corridor competition", "Foreign investment slowdown & selectivity", "Digital & services trade growth", "Non-tariff compliance & traceability", "Shifting economic weight", "Africa's demographic & economic rise", "Technical & occupational skill shortages" ] }, "open_questions": [ "The specification does not name the members. The regional exposures assume membership concentrated in the Indo-Pacific, South Asia, Africa and Latin America, with partial participation by advanced economies.", "Whether entry into force within one year is credible for a compact of this breadth, when few comparable agreements have been ratified that quickly.", "How to score a non-member: by the investment diverted from it, or as unaffected unless it competes directly with a member.", "Whether the 20 per cent trade and 30 per cent investment effects add to world totals or are largely diverted from non-members." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Six non-members applied to join in 2031. **The conditions set for applicants** became the compact's main source of influence over economies outside it.", "economic": "Member trade ran **20 per cent above** its prior path by 2031 and announced productive investment 30 per cent above. Most of it went to a small number of places.", "social": "Recognised qualifications let **nurses and engineers leave** poorer members for richer ones. Training colleges in the new corridors could not supply enough technicians.", "technological": "Members whose customs systems accepted **electronic certificates** and traceability records saw suppliers qualify within months; others waited more than a year.", "legal": "**One rule of origin** let inputs from any member count towards qualifying content. Three governments used the safeguard clause for protected producers.", "environmental": "Two members **rationed industrial power connections** as new plants arrived. Shared traceability records made the origin of products and inputs auditable across members." }, "regions": { "north-america": "Mexico gains qualifying assembly work as a candidate member. **Protected producers** in the larger economies lose share to member exporters.", "europe": "Machinery and services exporters gain access to growing markets. **Protected farm and vehicle producers** face stronger competition from members.", "china": "Chinese firms **invest inside member states** to qualify under the rule of origin. Some assembly moves to member neighbours.", "indo-pacific": "South-East Asian members take **vehicle component and electronics lines** moved from non-member suppliers. Advanced members supply capital and services.", "south-asia": "Ports on the corridor to East Africa fill. **Standards laboratories and customs** decide which exporters qualify in months and which wait a year.", "gulf-middle-east": "A **supplier of capital, energy and transhipment** to the new corridors between South Asia, Africa and Europe.", "africa": "East African processing zones join a corridor from South Asia. The **widest gap** opens between members that qualify suppliers and neighbours that are bypassed.", "latin-america": "Members gain component and food-processing investment. **Closely competing non-members** record lower investment and face tariffs their rivals no longer pay.", "russia-eurasia": "Largely outside the compact. **Little new investment** arrives and overland transit loses some trade to the new sea corridors." }, "evolution": { "lead_indicators": "A compact whose signatories exceed a quarter of world output **reaches its ratification threshold**. Announced greenfield investment into prospective members rises 15 per cent above its three-year average.", "triggers": "The compact **enters into force within one year of signature** among economies holding about a third of world output. Nine tariff lines in ten go to zero or begin reduction.", "immediate": "Over the first year one rule of origin and mutual recognition of qualifications, digital rules and traceability take effect. **Firms redirect investment** to members that can qualify suppliers.", "post_immediate": "Ports, power and standards bodies in recipient members reach capacity; investment moves on. **Protected incumbents lose market share** within two years; tariff revenue falls and skilled staff leave poorer members.", "stabilisation": "After three years member trade is **20 per cent above its prior path** and productive investment 30 per cent. Closely competing non-members record about a tenth less foreign investment.", "long_term": "The change is structural: new corridors and supplier bases stay in place. Non-members apply to join and **accession conditions extend the compact's rules** to economies outside it." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 3, "L10y": 4, "impact_systemic": 3, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Emerging-market growth breakout: recast from a five-year growth run into a compact that enters into force, with onset shortened to months, non-member diversion made explicit and the macro-financial load lowered to Medium." } ], "citation": "GINC (2027). Scenario S12 A cross-regional market access compact redirects investment, Scenario Library v0.5. scenarios.ginc.org/scenarios/market-access-opening" }, { "id": "S13", "slug": "great-power-detente", "title": "A great-power agreement lowers economic security barriers", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "B", "short_title": "Great-power détente", "thematics": [ "economic-security-supply-chains", "ai-cyber-digital", "resilience-crisis-preparedness" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 1, "rationale": "The October 2025 leaders' meeting suspended selected measures for one year and removed few of them. The Standard Severe event requires most tariffs imposed since 2018 removed, technology restrictions relaxed, monitoring in force and military incident rules agreed, all in one package. The 2020 Phase One agreement, a narrower bargain, left most tariffs in place and missed its purchase targets. No negotiation of this breadth is under way, and technology controls now rest on national security law in both capitals." }, "likelihood_10y": { "band": 3, "rationale": "Rivalries have been stabilised by negotiation before: the United States and China in 1972, and the United States and the Soviet Union in 1972 and 1987. Each followed a crisis or a change of strategic calculation, and none was widely expected two years ahead. Over ten years several leadership transitions and at least one serious military incident are probable. The combination of tariff removal, relaxed controls and monitoring is demanding, which holds the rating at Possible." }, "impact_systemic": { "level": 4, "rationale": "IMF staff estimates published in 2023 put the long-run cost of severe trade fragmentation at up to 7 per cent of global output. The scenario reverses a material part of that cost between the two largest economies and their suppliers. Restricted trade worth at least 1 per cent of global GDP reopens within 18 months, and investment, technology diffusion and lower risk premia add to the direct effect. Shifts are widespread across trade, technology and defence, and some are structural." }, "impact_national": { "level": 4, "rationale": "For a typical highly exposed nation the highest dimensions are economic damage and international position. Economies that gained assembly orders and investment from diversion after 2018, producers financed on tariff protection and allies whose defence planning assumed sustained confrontation each face a change large enough to move capability bands. The two parties and trade-dependent technology users record gains of the same scale. Level 4 marks the size of the change in either direction." }, "confidence": { "level": "low", "reason": "The event has no close precedent between these two powers, output estimates rest on contested fragmentation models and the panel differed on national impact and on two-year likelihood." }, "priority": 4, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "3 years (implementation and first review)", "warning": "months", "scope": "global", "origin": "negotiated (between great powers)", "external_support": "full", "policy_response": "current plans executed", "recovery_horizon": "years (adjustment for protected producers)" }, "summary": "The United States and China implement a monitored agreement that removes most bilateral tariffs imposed since 2018 and relaxes selected technology restrictions, while controls on the most advanced and military-use items remain. Crisis communication and military incident rules reduce the risk of confrontation around Taiwan without resolving sovereignty claims. Within 18 months of entry into force, restricted trade worth at least 1 per cent of global GDP becomes accessible again. Competition continues under clearer rules, and unrelated regional wars are not assumed to end. Nations must revise industrial policy, supplier arrangements and defence planning. Protected producers and economies that gained from trade diversion face immediate adjustment.", "distribution": { "gains": [ "Trade-dependent economies with competitive exporters selling to both markets", "Technology users regaining access to mature chips, processed minerals and equipment", "Consumers and manufacturers in the two parties, through lower import and input prices", "Shipping, insurance and trade finance on Pacific routes", "States near the Taiwan Strait, through a lower risk of military confrontation" ], "loses": [ "Producers financed on tariff protection or on subsidy premised on continued restrictions", "Economies that gained assembly orders and investment from trade diversion after 2018", "Alternative suppliers of rare earths and critical minerals that relied on a security premium", "Middle powers whose leverage came from being sought as partners by both sides", "Allies outside the talks whose security assumptions are revised without them" ] }, "narrative": { "dateline": "June 2031", "text": "The agreement was signed in Geneva in September 2029 and entered into force in January 2030, after fourteen months of talks that began with a near-collision between naval vessels in the Taiwan Strait. It had three parts. The first removed, in four stages over 18 months, about 80 per cent of the bilateral tariffs imposed since 2018. The second replaced blanket export restrictions on mature semiconductors, rare earth materials and commercial software with a published list and a 60-day licensing deadline. Controls on the most advanced chips, on leading-edge chipmaking equipment and on military end uses stayed in place. The third set rules for encounters between military ships and aircraft, opened a staffed crisis line between theatre commands and required notice of large exercises near Taiwan. It did not address sovereignty. Each government restated its existing position in a separate annex.\n\nA joint commission met each quarter and published compliance data. By June 2031 it had recorded two disputes over licensing delays, both settled within the 90-day procedure. Bilateral goods trade was 35 per cent higher than in 2029. Counting inputs and equipment that third-country firms could again sell to both markets, the trade reopened was a little over 1 per cent of global GDP. Container rates on Pacific routes fell and insurers reduced war-risk loadings for the Taiwan Strait.\n\nThe adjustment was immediate for some. Battery, solar module and mature chip plants in North America and Europe that had been financed on a tariff margin reported losses within two quarters, and three governments extended subsidies they had planned to end. Assembly orders that had moved to Vietnam, Mexico, Malaysia and India after 2018 partly returned to direct routes. Export growth in those economies slowed sharply in 2030, although capacity already built stayed in place. Suppliers of rare earths and gallium outside China lost the price premium that had supported new mines.\n\nAllied governments had not been party to the talks. Several in the Indo-Pacific and Europe reviewed defence plans that had assumed a rising risk of confrontation. Most held spending flat in real terms and did not cut it, because wars elsewhere continued and either party could end the agreement on six months' notice. Legislatures in both capitals held hearings on verification. One chamber voted on a motion to suspend the second tariff stage, and the motion failed.\n\nBy the first review, the states that had gained most were those with open trade, competitive exporters and regulators able to revise industrial policy quickly. Those that had lost most had built capacity or diplomatic leverage that depended on the restrictions remaining." }, "anchors": [ { "shock_id": "nixons-visit-to-china-1972", "date": "February 1972", "event": "Nixon's visit to China", "what_happened": "Ended more than two decades without official contact between the United States and the People's Republic of China. The Shanghai Communiqué recorded each side's position on Taiwan without resolving it. Full diplomatic relations followed in January 1979. Allies, including Japan, were given little notice of the opening.", "calibrates": "A rivalry can be stabilised by setting the sovereignty question aside in agreed language. Allies outside the talks adjust afterwards, which is the basis for the High load on influence and cohesion." }, { "shock_id": "incidents-at-sea-agreement-1972", "date": "25 May 1972", "event": "US–Soviet Incidents at Sea Agreement", "what_happened": "The United States and the Soviet Union agreed rules for encounters between their naval ships and aircraft on and over the high seas, including signalling, safe distances and annual review meetings. The agreement stayed in force through later periods of tension.", "calibrates": "Military incident rules can be agreed and kept between rivals without a political settlement. This is the model for the scenario's encounter rules, crisis line and exercise notification." }, { "shock_id": "inf-treaty-1987", "date": "December 1987", "event": "INF Treaty", "what_happened": "The United States and the Soviet Union agreed to eliminate all ground-launched missiles with ranges of 500 to 5,500 kilometres. By June 1991 2,692 missiles had been destroyed under on-site inspection. The United States withdrew from the treaty in 2019.", "calibrates": "Intrusive verification between rivals is feasible, and a verified agreement can still end. Sets the monitoring assumption and the durability parameter." }, { "shock_id": "chinas-wto-accession-2001", "date": "December 2001", "event": "China's WTO accession", "what_happened": "China joined the WTO on 11 December 2001 after committing to tariff cuts and legal changes. Its goods exports rose from about US$266 billion in 2001 to about US$1.58 trillion in 2010.", "calibrates": "The scale and speed of the trade response when market access is secured by rules, and the adjustment cost for import-competing producers elsewhere." }, { "shock_id": "us-china-phase-one-agreement-2020", "date": "15 January 2020", "event": "US–China Phase One agreement", "what_happened": "China committed to buy an additional US$200 billion of United States goods and services over 2020 and 2021. On the Peterson Institute for International Economics count, purchases reached about 58 per cent of the target. Most tariffs imposed since 2018 stayed in place.", "calibrates": "Counter-anchor on likelihood and design. A narrow bargain built on purchase targets, without effective monitoring, did not lower barriers. Standard Severe requires tariff removal and published compliance data." }, { "shock_id": "us-china-leaders-meeting-2025", "date": "30 October 2025", "event": "US–China leaders' meeting", "what_happened": "The two leaders met in Busan. The United States halved its fentanyl-related tariff on Chinese goods to 10 per cent, and China suspended for one year the rare earth export controls it had announced on 9 October.", "calibrates": "Distance from Standard Severe: a one-year suspension of selected measures, with core tariffs, chip controls and military issues left open." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "1 year", "severe": "3 years", "extreme": "5 years" }, "onset": { "major": "years", "severe": "months", "extreme": "months" }, "warning": { "major": null, "severe": "months", "extreme": null }, "scope": { "major": null, "severe": "global", "extreme": null }, "origin": { "major": null, "severe": "negotiated", "extreme": null }, "external_support": { "major": null, "severe": "full", "extreme": null }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": null }, "recovery_horizon": { "major": "months", "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "Share of bilateral tariffs imposed since 2018 that is removed", "default": "80 per cent", "range": "50 to 100", "unit": "per cent", "note": "Measured on the trade-weighted average tariff each party applies to the other's goods." }, { "name": "Restricted trade made accessible within 18 months", "default": "1 per cent of global GDP", "range": "0.5 to 2", "unit": "per cent of global GDP", "note": "Counts bilateral trade and third-country sales of inputs and equipment that the restrictions had blocked." }, { "name": "Technology restrictions relaxed", "default": "mature semiconductors, rare earth materials and commercial software", "range": "options: none / mature semiconductors only / most controls outside military end use", "unit": null, "note": "Controls on the most advanced chips, leading-edge equipment and military end uses remain in every setting." }, { "name": "Implementation period for tariff stages", "default": "18 months", "range": "12 to 36", "unit": "months", "note": "A shorter period raises the adjustment cost for protected producers." }, { "name": "Monitoring arrangement", "default": "joint commission with published quarterly compliance data", "range": "options: declaratory only / joint commission / third-party verification", "unit": null, "note": "The declaratory setting corresponds to the 2020 Phase One design." }, { "name": "Military incident arrangements", "default": "encounter rules, staffed crisis line and exercise notification", "range": "options: crisis line only / encounter rules and crisis line / all three", "unit": null, "note": "Sovereignty claims over Taiwan are unchanged in every setting." }, { "name": "Withdrawal notice", "default": "6 months", "range": "3 to 24", "unit": "months", "note": "Sets how much reversal risk remains in investment and defence planning." } ] }, "transmission": [ "A military incident near Taiwan is contained, and both governments open talks covering trade, technology restrictions and military encounters.", "The agreement enters into force. Bilateral tariffs imposed since 2018 are removed in stages over 18 months and selected technology controls move to a published list.", "Encounter rules, a staffed crisis line and exercise notification lower the assessed risk of confrontation. War-risk insurance loadings and shipping costs fall.", "Direct bilateral trade and third-country sales to both markets recover. Input prices fall for manufacturers and technology users.", "Producers financed on tariff protection and economies that gained diverted orders lose margins, orders and new investment.", "Governments revise industrial policy, subsidy programmes and supplier requirements. Some extend support to protected plants.", "Allies and middle powers review defence plans and alignment as the leverage gained from rivalry declines. Most hold defence spending flat.", "Domestic opponents in both capitals contest verification, and the withdrawal clause keeps reversal risk in investment decisions." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "High", "channel": "Force posture, alliance guarantees and procurement plans are revised as confrontation risk falls and competition continues" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Low", "channel": "Ports and shipping routes carry redirected trade; networks are not placed under new stress" }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Selected chip, mineral and software controls are relaxed; subsidised domestic capacity loses its protected market" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "Medium", "channel": "Industrial policy, licensing and subsidy programmes must be revised within the 18-month schedule" }, { "dimension": "Soft", "domain": "human-capital", "load": "Low", "channel": "Research and student exchange reopen in part; workers in protected plants need redeployment" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Allies and middle powers lose leverage gained from rivalry; domestic opponents contest the agreement" }, { "dimension": "Economic", "domain": "macro-financial", "load": "Medium", "channel": "Import prices and risk premia fall; capital moves away from economies that gained from diversion" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Direct trade recovers; diversion economies and protected producers lose orders and margins" }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "Rare earth and critical mineral licensing eases; alternative mining and processing projects lose their price premium" } ], "stakeholders": { "government": { "exposure": "Industrial policy, export control regimes and defence planning premised on sustained rivalry; alliance commitments discussed without the allies present", "actions": [ "Test each industrial subsidy and tariff-dependent project against bilateral tariffs at their pre-2018 levels", "Seek written assurances on alliance commitments and on consultation before each review date of the agreement", "Prepare adjustment support for regions and workers in protected and diversion-dependent industries" ], "watch": [ "Tariff stage schedules and compliance reports from the joint commission", "Changes to export control lists and licence approval times", "Exercise notifications and reported unsafe military encounters near Taiwan" ], "relevance": 4 }, "technology": { "exposure": "Plants, supplier contracts and product plans designed around export controls and restricted market access", "actions": [ "Model plant economics and supplier contracts with selected controls lifted and tariff margins removed", "Maintain compliance systems for the controls on advanced and military-use items that remain", "Review second-source commitments against the withdrawal clause before cancelling any of them" ], "watch": [ "Published control lists and licence approval times", "Reviews of semiconductor and battery subsidy programmes", "Mutual recognition decisions and participation in standards bodies" ], "relevance": 3 }, "investors": { "exposure": "Holdings in protected manufacturing, diversion economies and alternative mineral supply lose value; shipping, trade finance and exporters to both markets gain", "actions": [ "Test portfolios against tariff removal over 18 months and a withdrawal on six months' notice", "Review assets whose returns depend on tariff protection or on a security price premium", "Reassess sovereign and currency exposure to economies reliant on diverted trade" ], "watch": [ "War-risk insurance loadings for the Taiwan Strait", "Export orders in Vietnam, Mexico, Malaysia and India", "Legislative votes on implementation in either capital" ], "relevance": 4 }, "public": { "exposure": "Lower prices for traded goods; employment at risk in protected plants and in export zones built on diverted trade", "actions": [ "Local governments should identify employers in their area that depend on tariff protection", "Media and civil society should track which commitments are monitored and which results are published", "Workers in exposed industries should take up retraining support when it is offered" ], "watch": [ "Tariff changes on consumer goods", "Announcements of plant closures or subsidy extensions", "Legislative hearings on the agreement" ], "relevance": 3 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "The United States is a party; consumers and exporters gain, while protected plants and Mexico's nearshoring trade lose" }, { "region": "europe", "exposure": "High", "rationale": "Faces renewed Chinese competition without tariff parity, and must review de-risking policy and defence assumptions" }, { "region": "china", "exposure": "High", "rationale": "Party to the agreement; export access and selected technology inputs are restored under monitoring" }, { "region": "indo-pacific", "exposure": "High", "rationale": "Incident risk around Taiwan falls; Vietnam, Malaysia and Thailand lose diverted orders and allies review defence plans" }, { "region": "south-asia", "exposure": "Medium", "rationale": "India loses part of its diversion gain and some leverage; lower input costs offset a share of the loss" }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Stronger trade supports energy demand; there is less room to balance between the two powers" }, { "region": "africa", "exposure": "Medium", "rationale": "Mineral exporters lose the premium from rival bidding; importers gain from lower prices of manufactured goods" }, { "region": "latin-america", "exposure": "Medium", "rationale": "Mexico loses part of its nearshoring advantage; commodity exporters gain from firmer demand in both markets" }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Russia's value to China as a strategic partner falls; Central Asian transit and re-export trade is exposed" } ], "indicators": [ { "name": "Average tariff each party applies to the other's goods", "source": "Peterson Institute for International Economics, US–China tariff tracker; WTO Tariff Profiles", "threshold": "Trade-weighted average below 10 per cent on both sides", "cadence": "Quarterly" }, { "name": "Export control list additions and removals", "source": "US Bureau of Industry and Security, Entity List notices; China Ministry of Commerce announcements", "threshold": "Net removals in two consecutive quarters", "cadence": "Monthly" }, { "name": "Bilateral goods trade between the United States and China", "source": "US Census Bureau; General Administration of Customs of China", "threshold": "Year-on-year growth above 15 per cent for four consecutive quarters", "cadence": "Monthly" }, { "name": "Military-to-military contacts and reported unsafe encounters", "source": "US Department of Defense, annual report on military and security developments involving China", "threshold": null, "cadence": "Annual" }, { "name": "Military aircraft and vessel activity around Taiwan", "source": "Taiwan Ministry of National Defence daily reports", "threshold": "Sustained fall in monthly totals over six months", "cadence": "Daily" }, { "name": "New trade-restricting and trade-liberalising measures by the two parties", "source": "Global Trade Alert", "threshold": "Liberalising measures exceed restricting measures for two consecutive quarters", "cadence": "Monthly" }, { "name": "Foreign direct investment into economies that gained from trade diversion", "source": "UNCTAD World Investment Report", "threshold": null, "cadence": "Annual" }, { "name": "Defence spending plans as a share of GDP", "source": "SIPRI Military Expenditure Database; NATO defence expenditure reports", "threshold": null, "cadence": "Annual" } ], "compounds": { "triggers": [ { "id": "S12", "note": "Lower barriers between the two largest economies make a wider market access compact easier to conclude" }, { "id": "S11", "note": "Cooperation between the largest official creditors makes a common restructuring framework workable" }, { "id": "S14", "note": "External guarantors acting together can support a regional security framework" }, { "id": "S20", "note": "Shared surveillance and data exchange are easier to agree under reduced rivalry" }, { "id": "S08", "note": "Relaxed technology restrictions widen access to frontier models and chips and speed deployment." }, { "id": "S15", "note": "freer trade in modules, cells and grid equipment" }, { "id": "S17", "note": "relaxed technology restrictions widen access to chips and licensed systems" } ], "triggered_by": [ { "id": "S01", "note": "The cost of divided trade creates the incentive to negotiate" }, { "id": "S03", "note": "A war that closes a sea route shows both powers the cost of unmanaged escalation" }, { "id": "S02", "note": "Shared financial distress has prompted cooperation between the two before" } ], "amplified_by": [], "triggered_by_other": [ "A military incident near Taiwan that both governments choose to contain", "A change of leadership or of electoral mandate in either capital" ], "amplifying_trends": [ "Great-power competition", "Tariff barrier normalisation", "Export controls & economic coercion", "Trade & investment fragmentation", "Technical standards competition", "Credibility of external commitments", "Alliance realignment & burden-shifting", "Rearmament & defence spending" ] }, "open_questions": [ "Whether restricted trade worth 1 per cent of global GDP can be reached from bilateral flows alone, or requires counting third-country trade that the controls had blocked.", "Whether an agreement that either party can end at short notice should be rated as a durable change or as a pause.", "How to rate allies and diversion economies, for which the event is a loss, within a record classed as upside.", "Whether the specification should fix which technology restrictions are relaxed, since national impact depends heavily on that list." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Allied governments were not party to the talks. **Sovereignty claims are unchanged** and each legislature contests verification.", "economic": "Restricted trade worth **at least 1 per cent of global GDP** reopens within 18 months. Protected producers and diversion economies lose orders.", "social": "Prices of traded goods ease. **Jobs in protected plants** and in export zones built on diverted trade are at risk.", "technological": "Controls on mature chips, rare earths and commercial software give way to **a published list**. Restrictions on advanced and military-use items remain.", "legal": "A joint commission publishes compliance data and runs a 90-day dispute procedure. **Either party may withdraw** on six months' notice.", "environmental": "Trade in solar modules, batteries and processed minerals reopens, lowering **the cost of clean energy equipment**. Alternative mining projects lose their premium." }, "regions": { "north-america": "The United States is a party. Consumers and exporters gain; **plants financed on a tariff margin** report losses and Mexico's nearshoring trade slows.", "europe": "Renewed Chinese competition arrives **without tariff parity**. Governments review de-risking policy and hold defence spending flat.", "china": "Party to the agreement: **export access is restored** and selected technology inputs return, under quarterly monitoring.", "indo-pacific": "Incident risk around Taiwan falls. **Vietnam, Malaysia and Thailand** lose diverted orders and allies review their defence plans.", "south-asia": "India loses **part of its diversion gain** and some leverage. Cheaper inputs offset a share of the loss.", "gulf-middle-east": "Stronger trade supports energy demand, with **less room to balance** between the two powers.", "africa": "Mineral exporters lose **the premium from rival bidding**. Importers gain from lower prices of manufactured goods.", "latin-america": "**Mexico loses** part of its nearshoring advantage. Commodity exporters gain from firmer demand in both markets.", "russia-eurasia": "Russia's **value to China as a partner** falls. Transit and re-export trade through Central Asia is exposed." }, "evolution": { "lead_indicators": "Liberalising trade measures exceed restricting ones and export control lists record **net removals for two consecutive quarters**. Military activity around Taiwan falls over six months.", "triggers": "A near-collision between naval vessels in the Taiwan Strait is contained and opens fourteen months of talks. **The agreement enters into force**, with sovereignty claims unchanged.", "immediate": "Tariffs are removed in four stages over 18 months and selected technology controls move to a published list. **War-risk loadings and Pacific container rates fall**.", "post_immediate": "Trade worth at least 1 per cent of global GDP reopens. **Protected plants report losses within two quarters** and diversion economies lose orders; some governments extend subsidies.", "stabilisation": "Over three years to the first review, a joint commission publishes compliance data and settles disputes within 90 days. Allies hold defence spending flat; **protected producers adjust over years**.", "long_term": "Competition continues under clearer rules, but **either party can withdraw on six months' notice**. Reversal risk stays in investment and defence planning; capacity built on diverted trade remains." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 1, "L10y": 3, "impact_systemic": 4, "impact_national": 4, "confidence": "low" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Great-power détente and peace dividend: narrowed to a monitored United States and China agreement on tariffs, technology restrictions and military incident rules; the Ukraine settlement and peace dividend were removed and the ratings reset by the model panel." } ], "citation": "GINC (2027). Scenario S13 A great-power agreement lowers economic security barriers, Scenario Library v0.5. scenarios.ginc.org/scenarios/great-power-detente" }, { "id": "S14", "slug": "middle-east-settlement", "title": "A verified Middle East settlement restores access", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "B", "short_title": "Middle East settlement", "thematics": [ "resilience-crisis-preparedness", "climate-energy-resources", "economic-security-supply-chains" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 2, "rationale": "The 2025 Gaza ceasefire and the 2026 US–Iran memorandum show that parties negotiate after costly escalation, and the 2023 Saudi–Iran restoration shows working channels. A Standard Severe settlement needs shipping guarantees, monitored ceasefires, inspections and staged sanctions relief to enter into force together within two years. No framework of that breadth has been concluded in the region. The 2015 nuclear agreement covered one track and took about two years of talks." }, "likelihood_10y": { "band": 3, "rationale": "Settlements in this region have followed wars before: the Egypt–Israel treaty came six years after the 1973 war. Over ten years, leadership change, fiscal pressure on oil-dependent budgets and Gulf states' interest in secure trade routes widen the opening. Against this, the 2015 nuclear agreement lost a principal party within three years. A verified framework across several tracks is possible but not likely." }, "impact_systemic": { "level": 3, "rationale": "About a fifth of world oil consumption and a similar share of liquefied natural gas trade pass through the Strait of Hormuz. Roughly 12 per cent of world trade used the Red Sea route before 2023. Restored access and halved war-risk costs lower energy and freight prices for importers on three continents. The gain is the removal of a premium, with new output concentrated in one region, so it falls short of level 4." }, "impact_national": { "level": 4, "rationale": "For a conflict-affected participant, reconstruction commitments equal to 10 per cent of annual GDP over three years, the return of displaced residents and reopened trade routes change security, essential services and output together. Security is the highest dimension reached. The level is 4 and not 5 because the gain depends on verification and delivery and can be reversed. In Bosnia after 1995 the peace held, but only about half of those displaced had returned nine years later." }, "confidence": { "level": "low", "reason": "Precedents are few and partial. The outcome depends on a small number of leaderships, on guarantors staying committed and on armed groups with an interest in reversal." }, "priority": 8, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "3 years", "warning": "months", "scope": "regional", "origin": "negotiated (regional governments and external guarantors)", "external_support": "full (guarantors and reconstruction donors)", "policy_response": "current plans executed", "recovery_horizon": "years" }, "summary": "Regional governments and external guarantors implement a security framework covering commercial shipping, monitored ceasefires and staged sanctions relief. Inspection arrangements constrain specified missile and nuclear activities without requiring complete political reconciliation. Within 12 months, reliable shipping access returns on the affected routes and war-risk insurance costs halve. Reconstruction commitments reach 10 per cent of the participating conflict-affected economies' combined annual GDP over three years. Nations must deliver verification, public services and the integration of returning residents while managing contested justice and armed groups that resist the settlement. Civilians, returning displaced people and reconstruction investors gain. Armed intermediaries and businesses reliant on conflict premiums lose.", "distribution": { "gains": [ "Civilians in conflict-affected states, through security, restored services and reconstruction", "Displaced people, where services and property rights are restored in their home districts", "Reconstruction investors, contractors and the insurers that cover them", "Energy importers in Asia and Europe, through a lower risk premium on Gulf oil and gas", "Egypt and Red Sea ports, as canal and port traffic returns" ], "loses": [ "Armed groups and intermediaries that earned income from checkpoints, smuggling and protection", "Businesses reliant on conflict premiums: war-risk underwriters, alternative-route operators and sanctions intermediaries", "Higher-cost oil and gas exporters outside the region", "Suppliers of arms and missile defence to the region", "Factions in signatory states that opposed the settlement" ] }, "narrative": { "dateline": "November 2030", "text": "The framework was signed in the spring of 2029 after fourteen months of talks hosted by two Gulf states and attended by four external guarantors. It did not settle borders, recognition or the status of contested territory. It set three things. The first was a guarantee for commercial shipping through the Strait of Hormuz, Bab el-Mandeb and the southern Red Sea, run from a joint maritime coordination centre. The second was a set of monitored ceasefires on four fronts, with observers reporting each month. The third was sanctions relief in five stages, each released by an inspection report on specified missile and nuclear activities.\n\nThe first year was measured in transits and premiums. Container lines returned to the Red Sea route in the fourth month, after two inspection reports and ninety days without an attack on a merchant vessel. By the twelfth month, transits through both straits were within 5 per cent of their pre-conflict average and war-risk insurance costs on the affected routes had fallen by 55 per cent. Freight rates between Asia and Europe fell as voyages shortened by about ten days.\n\nTwo donor conferences produced reconstruction commitments equal to 10 per cent of the participating conflict-affected economies' combined annual GDP, payable over three years. Disbursement ran behind. By the first anniversary, 22 per cent of the first-year tranche had been spent. The constraints were administrative. Property registries had been destroyed or duplicated, procurement offices were short of staff and contractors waited for unexploded ordnance to be cleared. Where municipal governments restored water, electricity and schools, residents returned and stayed. About 2.1 million displaced people went home within eighteen months. In districts without services, a third of them left again within a season.\n\nThe settlement was resisted. Armed groups that had earned revenue from checkpoints, smuggling and protection lost sponsors and income. Some turned to kidnapping and to attacks on reconstruction sites. Two ceasefire lines recorded serious violations. One of them suspended the third stage of sanctions relief for eleven weeks, until inspectors regained access to a missile production site. Courts and truth commissions were contested from the start. Amnesty provisions that kept commanders inside the settlement were opposed by victims' associations, and three governments faced sustained protest over detainees and missing persons.\n\nOutside the region the effects were smaller and uneven. Energy importers in Asia and Europe paid less for crude oil and liquefied natural gas as the risk premium narrowed. Higher-cost oil exporters, operators on the Cape route, war-risk underwriters and suppliers of missile defence lost income. Defence ministries in the region deferred orders but did not cut budgets.\n\nBy late 2030 the framework had passed its first verification cycle. Governments that delivered inspections, services and returns on schedule received most of the private reconstruction investment. Those that did not retained the ceasefire but attracted little investment, and their returning residents were the first to leave again." }, "anchors": [ { "shock_id": "camp-david-accords-and-egypt-israel-treaty-1978", "date": "1978–1979", "event": "Camp David Accords and Egypt–Israel treaty", "what_happened": "The September 1978 accords led to the treaty of March 1979. Israel completed its withdrawal from Sinai in April 1982 and the Multinational Force and Observers has monitored the force limits since then. The treaty has held for more than four decades without full normalisation between the two societies.", "calibrates": "A monitored security arrangement can last without political reconciliation. Durability rests on verification and on the continued commitment of an external guarantor." }, { "shock_id": "iran-nuclear-agreement-2015", "date": "2015–2018", "event": "Iran nuclear agreement", "what_happened": "Agreed in July 2015 and implemented from January 2016. Iran accepted a 3.67 per cent cap on enrichment, a 300 kilogram limit on its stockpile of low-enriched uranium and monitoring by the International Atomic Energy Agency in exchange for sanctions relief. The United States withdrew in May 2018 and reimposed sanctions.", "calibrates": "Counter-anchor on durability. Inspection worked as designed, yet staged relief was reversed within three years by one party's change of policy." }, { "shock_id": "dayton-agreement-1995", "date": "December 1995", "event": "Dayton Agreement", "what_happened": "The agreement ended a war in Bosnia and Herzegovina that killed about 100,000 people and displaced more than 2 million. A NATO-led force of about 60,000 troops enforced it. Donors pledged about US$5.1 billion for a reconstruction programme over 1996–1999. UNHCR recorded the one millionth return in 2004.", "calibrates": "Reconstruction, returns and contested justice under external guarantee. The peace held. Returns took a decade and stayed incomplete, while administration remained dependent on outside supervision." }, { "shock_id": "red-sea-and-bab-el-mandeb-2023", "date": "November 2023–2025", "event": "Red Sea and Bab el-Mandeb", "what_happened": "Attacks on merchant vessels from November 2023 led most large container lines to divert around the Cape of Good Hope. Suez Canal transits fell by about half in early 2024, voyages between Asia and Europe lengthened by 10 to 14 days and war-risk premiums rose from a few hundredths of one per cent of hull value to as much as 1 per cent.", "calibrates": "The value of restored access, and the pace of return. Carriers waited for sustained evidence of safety before resuming the route, which supports a 12-month horizon." }, { "shock_id": "hormuz-closure-and-us-iran-memorandum-2026", "date": "March to June 2026", "event": "Hormuz closure and US–Iran memorandum", "what_happened": "Commercial shipping halted for about five weeks. A ceasefire followed in April and a memorandum on 17 June. Transits were still about a third of normal in July.", "calibrates": "The starting point. A ceasefire and a memorandum did not by themselves restore access; the scenario adds verification, guarantees and staged relief." }, { "shock_id": "saudi-iran-restoration-of-relations-2023", "date": "March 2023", "event": "Saudi–Iran restoration of relations", "what_happened": "Saudi Arabia and Iran agreed in Beijing on 10 March 2023 to restore diplomatic relations, which had been severed since January 2016. Embassies reopened later that year.", "calibrates": "Regional rivals can restore working relations through an outside broker without resolving the conflicts in which they back opposing sides." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "1 year", "severe": "3 years", "extreme": "5 years" }, "onset": { "major": null, "severe": "months", "extreme": null }, "warning": { "major": null, "severe": "months", "extreme": null }, "scope": { "major": null, "severe": "regional", "extreme": null }, "origin": { "major": null, "severe": "negotiated (regional governments and external guarantors)", "extreme": null }, "external_support": { "major": "partial", "severe": "full (guarantors and reconstruction donors)", "extreme": null }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": "best practice" }, "recovery_horizon": { "major": null, "severe": "years", "extreme": "structural" } }, "specific": [ { "name": "Commercial transits on affected routes after 12 months", "default": "95 per cent", "range": "80 to 100", "unit": "per cent of the pre-conflict average", "note": "Measured on the Strait of Hormuz, Bab el-Mandeb and the Suez Canal. This is the test of reliable access." }, { "name": "Fall in war-risk insurance costs within 12 months", "default": "50 per cent", "range": "30 to 80", "unit": "per cent", "note": "Measured against the average of the 12 months before signature, not against the conflict peak." }, { "name": "Reconstruction commitments over three years", "default": "10 per cent", "range": "5 to 20", "unit": "per cent of participating conflict-affected economies' combined annual GDP", "note": "Commitments, not disbursements. The disbursement rate is a separate test of administrative capacity." }, { "name": "Sanctions relief", "default": "staged, each stage released by an inspection report", "range": "options: maritime and humanitarian exemptions only / full relief on signature", "unit": null, "note": "A suspended stage is the main route by which the settlement reverses." }, { "name": "Activities under inspection", "default": "specified missile and nuclear activities", "range": "options: nuclear activities only / nuclear, missile and drone transfers", "unit": null, "note": "The framework constrains named activities. It does not require political reconciliation." }, { "name": "Displaced residents returning within three years", "default": "40 per cent", "range": "20 to 70", "unit": "per cent of those displaced at signature", "note": "Returns depend on restored services, cleared ordnance and settled property claims." }, { "name": "Armed groups outside the settlement", "default": "active in two of four theatres", "range": "options: none active / active in all theatres", "unit": null, "note": "Sets the internal security burden and the risk to reconstruction sites." } ] }, "transmission": [ "Regional governments and external guarantors sign a framework covering commercial shipping, monitored ceasefires and staged sanctions relief. Inspectors begin work on specified missile and nuclear activities.", "Attacks on merchant vessels stop and naval coordination holds. Carriers return to the affected routes and transits approach normal within 12 months.", "War-risk insurance costs halve. Freight rates, voyage times and the risk premium on Gulf oil and liquefied natural gas fall.", "Each verified inspection report releases a stage of sanctions relief, reopening trade, payments and investment with previously sanctioned economies.", "Donors and investors commit reconstruction finance equal to 10 per cent of conflict-affected participants' combined annual GDP over three years. Disbursement depends on administrative capacity.", "Restored water, power, health care and schooling draw displaced residents home. Integration strains housing, property records and local labour markets.", "Armed groups that lose sponsors and revenue resist. Contested amnesties and trials test public consent in each signatory state.", "Importers gain cheaper energy and shorter routes. Higher-cost exporters, alternative-route operators and suppliers of arms lose the conflict premium." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "High", "channel": "Ceasefire monitoring, missile limits, joint maritime security and armed groups that resist the settlement" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Reconstruction of housing, power, water, ports and roads in conflict-affected areas" }, { "dimension": "Hard", "domain": "critical-technology", "load": "Low", "channel": "Remote monitoring and inspection systems; controls on dual-use exports as sanctions ease" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Verification duties, reconstruction procurement, property registries, public services and contested justice" }, { "dimension": "Soft", "domain": "human-capital", "load": "Medium", "channel": "Return and integration of displaced residents; rebuilding of health care and schooling" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Guarantor diplomacy and credibility of commitments; domestic factions opposed to the terms" }, { "dimension": "Economic", "domain": "macro-financial", "load": "Medium", "channel": "Lower sovereign risk premiums, donor inflows, currency recovery and absorption limits" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "Medium", "channel": "Shorter shipping routes, lower freight and insurance costs, reopened trade with sanctioned economies" }, { "dimension": "Economic", "domain": "energy-resources", "load": "High", "channel": "Risk premium on Gulf oil and gas falls; transit through the straits is secured" } ], "stakeholders": { "government": { "exposure": "Verification duties, reconstruction delivery, returns and a share in restored trade routes", "actions": [ "Staff and fund inspection access, ceasefire monitoring and maritime coordination before signature", "Rebuild property registries, procurement offices and municipal services ahead of returns", "Plan budgets for a lower energy risk premium and a staged fall in the defence burden" ], "watch": [ "Inspection reports and stages of sanctions relief released", "Ceasefire violations by theatre", "Reconstruction disbursement against commitments" ], "relevance": 5 }, "technology": { "exposure": "Monitoring and inspection systems, rebuilt power and telecommunications networks and reopened sanctioned markets", "actions": [ "Supply remote monitoring, satellite imagery and tamper-evident sensing for verification", "Plan cable, data and power routes through reopened territory", "Screen sales against the stage of sanctions relief in force" ], "watch": [ "Export licensing decisions for dual-use equipment", "Network reconstruction tenders", "Access for subsea cable repair in the Red Sea" ], "relevance": 3 }, "investors": { "exposure": "Regional sovereigns, reconstruction, shipping and insurers gain; earners of the conflict premium lose", "actions": [ "Reprice regional sovereign and corporate credit on verified milestones, not on signature", "Test energy and shipping holdings on halved war-risk costs and a lower oil risk premium", "Require political-risk cover and clear title before committing reconstruction capital" ], "watch": [ "War-risk premiums and listed areas", "Regional sovereign spreads", "Disbursement rates and contract awards" ], "relevance": 3 }, "public": { "exposure": "Safety, services and return for residents of conflict-affected areas; lower fuel and freight costs for importers", "actions": [ "Register property and identity claims early in the return process", "Use local grievance and transitional justice channels", "Monitor delivery of the services promised to returning districts" ], "watch": [ "Border and crossing openings", "Water, power and school restoration by district", "Amnesty and accountability decisions" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "Low", "rationale": "Acts as a guarantor. Shale producers face a lower oil risk premium." }, { "region": "europe", "exposure": "Medium", "rationale": "Shorter Suez routes and lower oil and gas risk. A reconstruction donor and a source of contractors." }, { "region": "china", "exposure": "Medium", "rationale": "The largest buyer of Gulf crude gains secure supply. Contractors compete for reconstruction work." }, { "region": "indo-pacific", "exposure": "Medium", "rationale": "Japan, Korea and Taiwan depend on Gulf energy routes. ASEAN shippers regain the Suez route." }, { "region": "south-asia", "exposure": "Medium", "rationale": "Gulf energy imports and remittances from Gulf labour markets become more secure. Corridor plans to Europe revive." }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "The parties. Verification, reconstruction, returns and armed resistance all fall here." }, { "region": "africa", "exposure": "Medium", "rationale": "Red Sea and East African ports regain traffic. Horn of Africa states face less spillover from Yemen." }, { "region": "latin-america", "exposure": "Low", "rationale": "Oil exporters lose a share of the price premium. Direct trade exposure is small." }, { "region": "russia-eurasia", "exposure": "Low", "rationale": "Oil exporters lose price support and arms sales. Direct exposure to the settlement is limited." } ], "indicators": [ { "name": "Daily commercial transits through the Strait of Hormuz, Bab el-Mandeb and the Suez Canal", "source": "IMF PortWatch; Suez Canal Authority", "threshold": "Above 90 per cent of the pre-conflict average for 90 consecutive days", "cadence": "weekly" }, { "name": "War-risk premium as a share of hull value on Gulf and Red Sea voyages", "source": "Lloyd's Market Association Joint War Committee listed areas; Lloyd's List", "threshold": "Half the average of the 12 months before signature, or removal of an area from the list", "cadence": "monthly" }, { "name": "Verification reports on specified nuclear activities", "source": "IAEA reports to the Board of Governors", "threshold": "Two consecutive reports confirming inspector access", "cadence": "quarterly" }, { "name": "Sanctions designations removed or suspended", "source": "US Treasury Office of Foreign Assets Control; Official Journal of the European Union; UN Security Council", "threshold": "A stage of relief released on schedule", "cadence": "as issued" }, { "name": "Reconstruction disbursements against commitments", "source": "OECD Creditor Reporting System; UN OCHA Financial Tracking Service", "threshold": "Disbursement above 50 per cent of the annual commitment", "cadence": "quarterly" }, { "name": "Returns of refugees and internally displaced people", "source": "UNHCR; IOM Displacement Tracking Matrix", "threshold": "Net returns positive for two consecutive quarters", "cadence": "monthly" }, { "name": "Ceasefire violations and attacks on reconstruction sites", "source": "ACLED", "threshold": "Recorded events falling for three consecutive months in each theatre", "cadence": "weekly" }, { "name": "Regional military expenditure as a share of GDP", "source": "SIPRI Military Expenditure Database", "threshold": null, "cadence": "annual" } ], "compounds": { "triggers": [ { "id": "S11", "note": "Reconstruction finance brings the debts of conflict-affected states into restructuring talks" }, { "id": "S12", "note": "Secure routes between Asia, the Gulf and Europe make a cross-regional compact easier to conclude" }, { "id": "S05", "note": "Factions that reject the terms may dispute a signatory government's authority" } ], "triggered_by": [ { "id": "S03", "note": "A costly closure of a sea route forces the parties and guarantors to negotiate" }, { "id": "S13", "note": "Lower great-power tension lets external guarantors act together" } ], "amplified_by": [ { "id": "S15", "note": "Lower long-run hydrocarbon rents reduce what the parties contest and raise the value of diversification" } ], "triggered_by_other": [ "Leadership succession in a principal party", "Fiscal exhaustion after a contained regional war" ], "amplifying_trends": [ "Persistent armed conflict", "Contested maritime access", "Private military & proxy forces", "Middle-power diplomatic leverage", "Energy import dependence", "Arms control erosion", "State capacity & delivery", "Migrant integration demands" ] }, "open_questions": [ "Whether a framework that leaves political reconciliation aside is one event or separate maritime, ceasefire and inspection tracks with different likelihoods.", "Whether the reconstruction test should be commitments or disbursements, given the gap between the two in earlier settlements.", "How to score nations whose regional leverage or revenue came from the conflict.", "Whether a settlement that has passed one verification cycle is durable enough to count as having occurred." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "The framework set shipping guarantees, monitored ceasefires and inspections **without settling borders or recognition**. Factions in each signatory state contested it.", "economic": "**War-risk insurance costs halved** within 12 months. Reconstruction commitments reached 10 per cent of conflict-affected participants' combined annual GDP over three years.", "social": "Residents returned and stayed **where services were restored**. Amnesties and trials were contested from the start.", "technological": "Verification relied on **remote monitoring and resident inspectors**. Rebuilt power and telecommunications networks set the pace of return.", "legal": "**Each inspection report released a stage** of sanctions relief. Property claims and accountability for wartime conduct filled the courts.", "environmental": "Shorter voyages cut shipping fuel use. Reconstruction began with **unexploded ordnance, rubble and damaged water systems**." }, "regions": { "north-america": "A guarantor of the framework. **Shale producers** face a lower oil risk premium.", "europe": "**Shorter Suez routes** and lower oil and gas risk. Europe is also a donor and a source of contractors.", "china": "The largest buyer of Gulf crude gains **secure supply**. Its contractors compete for reconstruction work.", "indo-pacific": "Japan, Korea and Taiwan gain **secure energy routes**. ASEAN shippers regain the Suez route.", "south-asia": "**Gulf energy and remittances** become more secure. Corridor plans to Europe revive.", "gulf-middle-east": "**The parties themselves**: verification, reconstruction, returns and armed resistance all fall here.", "africa": "**Red Sea and East African ports** regain traffic. Horn of Africa states face less spillover from Yemen.", "latin-america": "Oil exporters **lose a share of the premium**. Direct trade exposure is small.", "russia-eurasia": "Oil exporters lose **price support and arms sales**. Direct exposure is limited." }, "evolution": { "lead_indicators": "Ceasefire violations fall for three consecutive months in each theatre, **two consecutive inspection reports confirm access** and war-risk premiums on Gulf and Red Sea voyages start to fall.", "triggers": "After fourteen months of talks, regional governments and four external guarantors **sign a security framework** covering shipping guarantees, monitored ceasefires and staged sanctions relief. Borders and recognition stay unsettled.", "immediate": "Attacks on merchant vessels stop and **container lines return to the Red Sea in the fourth month**. Within 12 months transits near normal and war-risk insurance costs halve.", "post_immediate": "Inspection reports release sanctions relief in stages. Reconstruction commitments reach 10 per cent of conflict-affected participants' combined annual GDP but **disbursement runs behind**, and armed groups attack reconstruction sites.", "stabilisation": "About 40 per cent of displaced residents return within three years, staying **where services are restored**. Governments that deliver inspections and services attract private investment; others keep only the ceasefire.", "long_term": "Importers keep cheaper energy and shorter routes; arms suppliers and Cape-route operators lose the conflict premium. **Borders, recognition and accountability stay unresolved**, and a suspended relief stage could reverse it." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 2, "L10y": 3, "impact_systemic": 3, "impact_national": 4, "confidence": "low" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Middle East regional settlement: recast as a verified framework defined by restored shipping access, halved war-risk costs and reconstruction commitments, with trade loading and exposure for South Asia and Russia and Eurasia lowered." } ], "citation": "GINC (2027). Scenario S14 A verified Middle East settlement restores access, Scenario Library v0.5. scenarios.ginc.org/scenarios/middle-east-settlement" }, { "id": "S15", "slug": "clean-power-threshold", "title": "Cheap firm clean power becomes available at scale", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "C", "short_title": "Clean power threshold", "thematics": [ "climate-energy-resources", "economic-security-supply-chains" ], "likelihood_type": "systemic", "likelihood_note": null, "scores": { "likelihood_2y": { "band": 3, "rationale": "Each component is commercial or close to it: battery project costs reached a record low in 2025 and the first commercial enhanced geothermal phase is due on the grid in 2026. The Standard Severe event needs more: independent verification of the combined system at a 40 per cent discount to new fossil plant in several climate zones. Trial periods and construction lead times make that possible within two years but not probable." }, "likelihood_10y": { "band": 4, "rationale": "Solar electricity costs fell by more than 80 per cent in a decade and storage costs are following. Ten years allows several firm clean options to complete commercial trials and reach standard designs. The band is not 5 because the threshold requires reliability and replication across climate zones, and firm clean generation has a much shorter cost record than solar or batteries." }, "impact_systemic": { "level": 4, "rationale": "Electricity is an input to every sector. A 30 per cent fall in industrial power costs in adopting economies, faster electrification and the relocation of energy-intensive investment change output in many nations, while hydrocarbon asset values and exporter revenues are revised down. GINC places the combined change, counting gains and losses, at 2.5 to 5 per cent of global output over five years. Grid constraints keep it below level 5." }, "impact_national": { "level": 4, "rationale": "The highest dimension reached is economic. A hydrocarbon-dependent state faces lower expected revenue, dearer borrowing and written-down reserves; a grid-ready importer gains a lasting cost advantage. Level 4, not 5, because prices and volumes fall over years after expectations move, which leaves time to adjust. The 1986 oil price collapse shows the level reached when the revenue loss is abrupt." }, "confidence": { "level": "medium", "reason": "Component cost trends are well measured. The cost of the combined firm system, the pace of standardised finance and the response of hydrocarbon demand are less certain." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "5 years", "warning": "months", "scope": "global", "origin": "accidental (technological)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "structural" }, "summary": "Independent commercial trials establish that a replicable combination of renewables, storage and firm clean generation supplies reliable electricity at 40 per cent below the cost of new fossil plant across several climate zones. Standardised projects reach financial close within 18 months. Early adopters cut industrial electricity costs by 30 per cent within five years, which accelerates electrification and changes where energy-intensive industry and data centres invest. The gain goes to nations that connect projects, secure materials and reform power markets quickly. Hydrocarbon-dependent revenues weaken as expected long-term demand and asset values are revised down, ahead of the fall in volumes.", "distribution": { "gains": [ "Energy importers with grid capacity: much of Europe, Japan, Korea, India and China", "Industrial locations that can connect new plant within three years", "Energy-intensive industry and data centres, through lower and more stable power costs", "Makers of modules, cells, drilling equipment, transformers and cable", "Producers of copper, lithium, graphite and other transition minerals", "Nations with low electricity access, where the cost of reliable supply falls" ], "loses": [ "Hydrocarbon-dependent states without fiscal buffers or sovereign funds", "Owners of recently built gas and coal plant and of undeveloped reserves", "Coal, oil and gas regions and the workers employed there", "Nations with long connection queues, which lose industry to faster neighbours", "States whose external leverage rested on supplying fuel" ] }, "narrative": { "dateline": "June 2035", "text": "The result that changed investment decisions was published in September 2030. Independent engineers had audited eleven commercial plants in five climate zones over two full years. Each combined solar or wind generation, battery storage and one firm clean source: enhanced geothermal at seven sites, small modular fission at two and long-duration storage at two. All eleven had met a contracted reliability standard of 99.9 per cent of hours at a delivered cost 40 per cent below a new gas or coal plant in the same market. The designs were standard and the audit data were public.\n\nLenders acted on the finding within months. By early 2032 standardised projects were reaching financial close in 18 months or less from first application, and their cost of debt had fallen below that of new thermal plant. Developers ordered the same module, cell and drilling packages in volume. Orders for transformers, cable and rigs exceeded supply within a year, and prices for lithium, copper and graphite rose sharply before new capacity arrived.\n\nThe gain was not distributed by resource. It was distributed by the ability to connect. Nations that had approved transmission corridors, staffed their permitting offices and reformed wholesale markets to pay for firm capacity brought projects into service in three years. Their industrial electricity costs were 30 per cent lower by 2035, and smelters, chemical plants, electrolysers and data centres signed 15-year supply contracts there. Nations with connection queues of five years or more saw the same projects financed and then left waiting. Several curtailed large volumes of midday output while still paying for imported gas in the evening.\n\nImporters of oil and gas recorded lower fuel bills from 2033 as heat, transport and industry electrified faster than planned. Households saw the difference later than industry, because network charges rose to pay for the new lines.\n\nThe loss arrived through expectations before it arrived through volumes. Long-term demand forecasts for oil, gas and coal were revised down in 2031 and again in 2032. Reserves were written down, new field developments were cancelled and the borrowing costs of hydrocarbon-dependent states rose while their export receipts were still close to normal. Producers with low costs and large sovereign funds maintained output and used the interval to diversify. Producers without buffers cut capital spending first, then subsidies and public pay. Three had requested external financing programmes by 2034. Utilities holding recently built gas and coal plant sought compensation for early closure, and coal regions lost employment faster than retraining schemes could absorb.\n\nBy June 2035 the threshold itself was no longer in dispute. The remaining questions were administrative: how quickly a state could approve a line, train electricians and drillers, secure materials and replace a revenue base." }, "anchors": [ { "shock_id": "solar-cost-decline-2010", "date": "2010–2020", "event": "Solar cost decline", "what_happened": "The cost of electricity from utility-scale solar fell by more than 80 per cent in a decade as manufacturing scaled and designs standardised.", "calibrates": "The size of cost reduction that a standard, mass-produced energy technology can deliver in ten years, and the basis for the ten-year likelihood band." }, { "shock_id": "battery-storage-cost-record-2025", "date": "2025", "event": "Battery storage cost record", "what_happened": "The benchmark cost of a four-hour battery project fell 27 per cent in a year to US$78 per MWh, the lowest since tracking began in 2009.", "calibrates": "Storage is the component that turns variable output into dependable supply. The rate of decline supports a combined system priced below new fossil plant." }, { "shock_id": "enhanced-geothermal-at-cape-station-2026", "date": "2026", "event": "Enhanced geothermal at Cape Station", "what_happened": "The first 100 MW phase of the largest enhanced geothermal project was scheduled to deliver power to the grid.", "calibrates": "A firm clean source at commercial scale exists but has no long operating record. The scenario's trials supply the record that lenders require." }, { "shock_id": "pakistan-solar-import-surge-2024", "date": "2024", "event": "Pakistan solar import surge", "what_happened": "Pakistan imported about 17 GW of solar modules in 2024, according to Ember's analysis of Chinese export data, as households and firms responded to high grid tariffs. Grid electricity sales fell and the finances of the distribution companies weakened.", "calibrates": "Onset in months: adoption can outrun planning once a price threshold is crossed, and the incumbent system's revenue weakens before its assets are retired." }, { "shock_id": "us-interconnection-queue-2023", "date": "End of 2023", "event": "US grid interconnection queue", "what_happened": "About 2,600 GW of generation and storage capacity was waiting in US interconnection queues at the end of 2023, more than twice the installed fleet, according to Lawrence Berkeley National Laboratory. Projects completed in 2023 had typically taken about five years from request to operation.", "calibrates": "Connection and permitting, not cost, set the pace of delivery. A nation with a five-year queue captures little of the gain inside the five-year test period." }, { "shock_id": "oil-price-collapse-1986", "date": "1986", "event": "Oil price collapse", "what_happened": "Oil prices fell by more than half within months. Exporter revenues fell with them, which strained Soviet finances and forced spending cuts across producer states.", "calibrates": "The upper bound of the loss for hydrocarbon-dependent states. In this scenario the revision is to expected demand, so the loss arrives more slowly than in 1986." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": null, "severe": "5 years", "extreme": null }, "onset": { "major": "years", "severe": "months", "extreme": null }, "warning": { "major": null, "severe": "months", "extreme": null }, "scope": { "major": "regional", "severe": "global", "extreme": null }, "origin": { "major": null, "severe": "accidental (technological)", "extreme": null }, "external_support": { "major": null, "severe": "partial", "extreme": null }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": null }, "recovery_horizon": { "major": "years", "severe": "structural", "extreme": null } }, "specific": [ { "name": "Cost of firm clean supply relative to new fossil plant", "default": "40 per cent lower", "range": "25 to 55", "unit": "per cent lower", "note": "Delivered cost of the combined system at the stated reliability, compared with a new gas or coal plant in the same market." }, { "name": "Reliability standard met in the trials", "default": "99.9 per cent of hours", "range": "99 to 99.95", "unit": "per cent of hours served", "note": "The threshold is defined by cost and reliability together. A discount without the reliability standard does not meet it." }, { "name": "Climate zones in which the result is replicated", "default": "5", "range": "3 to 8", "unit": "zones", "note": "Sets how many nations can adopt the standard design without local redesign." }, { "name": "Time from application to financial close for a standard project", "default": "18 months", "range": "12 to 36", "unit": "months", "note": null }, { "name": "Fall in industrial electricity cost in early adopters within five years", "default": "30 per cent", "range": "15 to 45", "unit": "per cent", "note": "Smaller than the generation discount because network charges rise to pay for new transmission." }, { "name": "Grid connection lead time in an adopting nation", "default": "3 years", "range": "2 to 7", "unit": "years", "note": "The binding constraint under current plans. Above five years, little of the gain arrives inside the test period." }, { "name": "Downward revision to expected hydrocarbon demand ten years ahead", "default": "20 per cent", "range": "10 to 35", "unit": "per cent of previously expected demand", "note": "Drives the write-down of reserves and the repricing of exporter sovereign debt before volumes fall." } ] }, "transmission": [ "Independent trials verify that standard combined plants deliver reliable power at 40 per cent below the cost of new fossil plant in several climate zones.", "Lenders treat the design as proven. Standardised projects reach financial close within 18 months and their cost of capital falls.", "Orders exceed the supply of transformers, cable, rigs and critical minerals. Equipment and materials prices rise and delivery times lengthen.", "Grid connection, permitting and power market rules determine which nations turn financed projects into delivered power.", "Industrial electricity costs fall 30 per cent in early adopters. Heat, transport and industry electrify faster and energy-intensive investment relocates.", "Expected long-term demand for oil, gas and coal is revised down. Reserves and fossil plant are written down before volumes fall.", "Hydrocarbon-dependent states face dearer borrowing and lower expected revenue. Public spending, subsidies and currency pegs come under strain.", "Fossil regions lose employment and utilities claim compensation, while importers gain a lasting improvement in their terms of trade." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "Fuel chokepoints lose some leverage; fiscal strain in exporter states raises instability risk" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Transmission, storage, interconnection and connection lead times decide who captures the gain" }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Manufacture and deployment of modules, cells, drilling systems, reactors and grid equipment" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Permitting speed, power market reform, revenue diversification and delivery of transition programmes" }, { "dimension": "Soft", "domain": "human-capital", "load": "Medium", "channel": "Shortage of electricians, drillers and grid engineers; displaced workers in fossil regions" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "Exporter leverage declines; regional gains and losses divide opinion within nations" }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Exporter budgets, pegs and sovereign spreads; written-down reserves and plant; lower importer fuel bills" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Energy-intensive industry and data centres relocate to low-cost, connected power" }, { "dimension": "Economic", "domain": "energy-resources", "load": "High", "channel": "Generation mix and price formation change; hydrocarbon demand outlook falls; mineral demand rises" } ], "stakeholders": { "government": { "exposure": "Fiscal dependence on hydrocarbons, or the capacity of grids, permitting offices and power market rules to absorb new plant", "actions": [ "Approve transmission corridors and staff permitting and connection offices ahead of demand", "Reform wholesale power markets so that firm clean capacity is paid for reliability", "Hydrocarbon-dependent states: test the budget against demand 20 per cent lower ten years ahead and bring forward diversification" ], "watch": [ "Audited cost and reliability results from combined clean power plants", "Median grid connection lead time and curtailment rates", "Fiscal break-even oil price against the forward price" ], "relevance": 3 }, "technology": { "exposure": "Power is the main operating input to computing; the siting of data centres and equipment manufacture follows cost and connection time", "actions": [ "Sign long-term supply contracts in locations with firm clean power and short connection times", "Secure transformers, cable, cells and critical minerals under multi-year agreements", "Design loads for flexible demand so that sites can connect earlier" ], "watch": [ "Delivery times for transformers and high-voltage equipment", "Contract prices for round-the-clock clean supply", "Lithium, copper and graphite prices and supply concentration" ], "relevance": 5 }, "investors": { "exposure": "Hydrocarbon reserves and recently built fossil plant; exporter sovereign debt; relocation of heavy industry; a large pipeline of standardised projects", "actions": [ "Test holdings against a 20 per cent downward revision to long-term hydrocarbon demand", "Price exporter sovereign debt on fiscal break-even and the size of buffers", "Assess project pipelines by connection date, not by financial close" ], "watch": [ "Long-term oil, gas and coal demand outlooks", "Reserve write-downs and cancelled field developments", "Cost of debt for standard clean projects against thermal plant" ], "relevance": 5 }, "public": { "exposure": "Lower energy bills after a delay; employment lost in coal, oil and gas regions; new lines and plant built near communities", "actions": [ "Local government: prepare land-use plans and consent procedures for lines and plant", "Training providers: expand courses for electricians, drillers and grid technicians", "Fossil regions: seek transition funding before plants and mines close" ], "watch": [ "Retail tariff reviews and network charges", "Closure dates for local plants and mines", "Transition fund commitments and retraining places" ], "relevance": 3 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Strong demand from data centres and industry; long connection queues limit the gain; shale and oil sands producers lose asset value" }, { "region": "europe", "exposure": "High", "rationale": "Large fuel importer with high industrial power costs; permitting and cross-border transmission decide whether heavy industry stays" }, { "region": "china", "exposure": "High", "rationale": "Largest maker of modules, cells and grid equipment and largest fuel importer; coal provinces carry the adjustment" }, { "region": "indo-pacific", "exposure": "High", "rationale": "Japan, Korea and Taiwan cut fuel import bills; Australia and Indonesia lose coal and gas revenue but hold minerals" }, { "region": "south-asia", "exposure": "High", "rationale": "Lower import bills and faster electrification; weak distribution company finances and grid capacity limit delivery" }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "Expected hydrocarbon revenue is revised down; strong solar resource and capital allow low-cost producers to diversify" }, { "region": "africa", "exposure": "High", "rationale": "Reliable supply becomes affordable where access is lowest; cost of capital constrains delivery; Nigeria, Angola and Algeria lose revenue" }, { "region": "latin-america", "exposure": "High", "rationale": "Copper and lithium exporters gain and hydropower adds firm supply; Venezuela, Ecuador and Colombia lose oil income" }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Budgets depend on oil and gas; lower expected demand raises borrowing costs and reduces the value of pipeline supply" } ], "indicators": [ { "name": "Levelised cost of solar, wind, storage and firm clean power", "source": "IRENA Renewable Power Generation Costs; BloombergNEF; Lazard", "threshold": "Firm clean supply at or below 60 per cent of the cost of new gas plant in three or more markets", "cadence": "annual" }, { "name": "Operating record of enhanced geothermal and advanced fission plants", "source": "US Energy Information Administration plant-level generation data; IAEA Power Reactor Information System", "threshold": "Two years of commercial operation at contracted availability", "cadence": "quarterly" }, { "name": "Grid connection queue volume and lead time", "source": "Lawrence Berkeley National Laboratory, Queued Up; ENTSO-E", "threshold": "Median lead time above five years", "cadence": "annual" }, { "name": "Clean energy investment and cost of capital by region", "source": "IEA World Energy Investment", "threshold": null, "cadence": "annual" }, { "name": "Industrial electricity prices by country", "source": "Eurostat; IEA Energy Prices", "threshold": "Gap of 30 per cent or more between adopting nations and comparable non-adopters", "cadence": "twice a year" }, { "name": "Long-term oil, gas and coal demand outlooks", "source": "IEA World Energy Outlook; OPEC World Oil Outlook", "threshold": "Demand ten years ahead revised down by 10 per cent or more between successive editions", "cadence": "annual" }, { "name": "Fiscal break-even oil price by exporter", "source": "IMF Regional Economic Outlook: Middle East and Central Asia", "threshold": "Break-even above the forward price for three consecutive years", "cadence": "twice a year" }, { "name": "Critical mineral prices and supply concentration", "source": "IEA Global Critical Minerals Outlook; US Geological Survey Mineral Commodity Summaries", "threshold": null, "cadence": "annual" } ], "compounds": { "triggers": [ { "id": "S02", "note": "if hydrocarbon assets and exporter sovereign debt are repriced abruptly" }, { "id": "S05", "note": "fiscal retrenchment in hydrocarbon-dependent states" }, { "id": "S01", "note": "competition for minerals, cells and grid equipment" }, { "id": "S16", "note": "cheaper power for irrigation, desalination and fertiliser" }, { "id": "S08", "note": "Cheaper firm power lowers the cost of inference at scale." } ], "triggered_by": [ { "id": "S17", "note": "gains in materials, drilling and reactor design" }, { "id": "S13", "note": "freer trade in modules, cells and grid equipment" }, { "id": "S03", "note": "a fuel price shock accelerates the move away from imported hydrocarbons" }, { "id": "S11", "note": "restored creditworthiness lowers the cost of capital for power projects in participating states" }, { "id": "S12", "note": "new industrial load and lower tariffs on equipment bring standardised clean power projects forward" } ], "amplified_by": [ { "id": "S11", "note": "fiscal room for grid investment in indebted states" }, { "id": "S12", "note": "common standards and lower tariffs on equipment" } ], "triggered_by_other": [], "amplifying_trends": [ "Enhanced geothermal", "Solar manufacturing cost decline", "Batteries & energy storage", "Grid expansion & demand flexibility", "Hydrocarbon revenue dependence", "Advanced nuclear fission", "Electrification of heat & industry", "Critical minerals supply constraints" ] }, "open_questions": [ "Whether a 40 per cent discount to new fossil plant is the right threshold, or whether the test should be the running cost of existing plant, which is a harder standard.", "Whether an event that takes five years to change costs and revenues is a shock with an onset of months or an accelerated trend with a dated announcement.", "How to rate one scenario in which the typical highly exposed nation may be a grid-ready importer that gains or a hydrocarbon-dependent state that loses.", "Whether the gain is material for a nation whose connection lead time exceeds the five-year test period." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Advantage moves to states that approve lines and plant quickly. **Hydrocarbon-dependent governments lose fiscal room** before export volumes fall and their leverage over importers declines.", "economic": "Industrial electricity costs fall **30 per cent in early adopters** within five years. Energy-intensive investment relocates; reserves and fossil plant are written down.", "social": "Households gain later than industry because network charges rise. **Coal, oil and gas regions lose employment** faster than retraining schemes absorb it.", "technological": "The step is verification, not invention: **standard combined plants pass independent reliability trials** in several climate zones. Transformers, cable, rigs and minerals then run short.", "legal": "**Permitting and connection rules** decide the outcome. Wholesale markets need reform to pay for firm capacity and early plant closures bring compensation claims.", "environmental": "Fossil generation is displaced on cost and **power-sector emissions fall faster than planned**. Mining for lithium, copper and graphite expands, with local land and water costs." }, "regions": { "north-america": "Cheap firm power meets strong demand from data centres and industry. **Connection queues of five years** limit the gain; shale and oil sands producers lose asset value.", "europe": "A large importer gain and lower industrial power costs. **Permitting speed and cross-border transmission** decide whether heavy industry stays.", "china": "The largest maker of modules, cells and grid equipment gains export orders and **its fuel import bill falls**. Coal provinces carry the adjustment.", "indo-pacific": "Japan, Korea and Taiwan cut fuel import bills and ASEAN attracts industry. **Australia and Indonesia lose coal and gas revenue** but hold minerals and sites.", "south-asia": "Lower import bills and faster electrification for India, Pakistan and Bangladesh. **Distribution company finances and grid capacity** limit how much reaches users.", "gulf-middle-east": "**Expected hydrocarbon revenue is revised down**. Low-cost producers with sovereign funds diversify into solar-powered industry; producers without buffers face early fiscal strain.", "africa": "Reliable supply becomes affordable where access is lowest. **Cost of capital and weak utilities** hold back delivery; Nigeria, Angola and Algeria lose revenue.", "latin-america": "Copper and lithium exporters gain from materials demand and hydropower adds firm supply cheaply. **Venezuela, Ecuador and Colombia lose oil income**.", "russia-eurasia": "Budgets rest on oil and gas, so **the loss dominates**. Lower expected demand raises borrowing costs and reduces the value of pipeline supply to neighbours." }, "evolution": { "lead_indicators": "Enhanced geothermal and advanced fission plants complete **two years of commercial operation at contracted availability**. Firm clean supply reaches 60 per cent of new gas plant cost in three markets.", "triggers": "Independent audits of eleven plants in five climate zones confirm 99.9 per cent reliability at **40 per cent below the cost of new fossil plant**. Designs and data are public.", "immediate": "Lenders treat the design as proven within months and standard projects **reach financial close within 18 months**. Orders for transformers, cable, rigs and minerals exceed supply and prices rise.", "post_immediate": "Expected hydrocarbon demand ten years ahead is revised down 20 per cent and **reserves are written down before volumes fall**. Exporters' borrowing costs rise; connection queues delay financed projects.", "stabilisation": "Within five years industrial electricity costs are **30 per cent lower in early adopters**, where projects connect in three years. Energy-intensive industry and data centres relocate; households gain later.", "long_term": "The change is structural. Importers keep a lasting terms-of-trade gain and industry stays where power connected fastest; **exporters without buffers must replace a revenue base** and coal regions lose employment." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 3, "L10y": 4, "impact_systemic": 4, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Energy abundance breakthrough: open-ended abundance replaced by an observable threshold, firm clean power at 40 per cent below new fossil plant; onset moved from years to months; systemic impact raised to 4 and national impact lowered to 4; fusion and a fixed oil price fall removed." } ], "citation": "GINC (2027). Scenario S15 Cheap firm clean power becomes available at scale, Scenario Library v0.5. scenarios.ginc.org/scenarios/clean-power-threshold" }, { "id": "S16", "slug": "water-efficient-food-leap", "title": "A validated farming package raises water-efficient output", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "C", "short_title": "Water-efficient food leap", "thematics": [ "climate-energy-resources", "demographics-human-capital", "economic-security-supply-chains" ], "likelihood_type": "systemic", "likelihood_note": "Likelihood is for the coordinated event as specified: validated trials followed by simultaneous deployment agreements. Gradual diffusion of the same technologies does not meet the definition.", "scores": { "likelihood_2y": { "band": 3, "rationale": "The components exist. Drought-tolerant maize and flood-tolerant rice are in farmers' fields, gene-edited foods are on sale in a few markets and some jurisdictions have created lighter approval routes. The event also needs validated multi-country results and linked seed, finance and extension agreements inside two years. Golden Rice took two decades from prototype to a first approval, which a court then reversed. Possible, at the lower end of the band." }, "likelihood_10y": { "band": 4, "rationale": "Over ten years the constraint moves from science to delivery. The Green Revolution raised Asian cereal yields within about fifteen years and Bt cotton covered most of India's cotton area within a decade of approval. Water stress and repeated food price shocks are raising political demand for the agreements. The band is not higher because the definition requires a coordinated launch and a 15 per cent price fall, not gradual diffusion." }, "impact_systemic": { "level": 3, "rationale": "Agriculture is about 4 per cent of global output, so the direct gain is small in output terms. The level reflects a 15 per cent fall in staple prices, lower food inflation and import bills for many nations, less pressure on stressed river basins and capability shifts across several domains in a large number of low-yield nations. Exporter losses offset part of the gain. Significant, not major." }, "impact_national": { "level": 4, "rationale": "For a low-yield, food-importing nation with a large farm workforce, a 25 per cent rise in staple output changes human welfare, the external balance and rural incomes together. Cereal yields in sub-Saharan Africa are well under half the world average, so the room to rise is large. The same level applies as a loss to a high-cost exporter whose farm sector contracts. The highest dimension reached is human welfare." }, "confidence": { "level": "medium", "reason": "The agronomy is established and the historical anchors are well documented. The simultaneous agreements, the adoption share and the size of the price response are assumptions." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "5 years (four growing seasons of deployment, then consolidation)", "warning": "months (trial results are published before the agreements)", "scope": "global", "origin": "negotiated", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "structural" }, "summary": "Multi-country field trials validate a transferable package of climate-resilient staple varieties, precision irrigation and soil management. Linked agreements on seed approval, smallholder finance and extension start simultaneous deployment across the major low-yield regions. Within four growing seasons, adopting farms raise staple output by 25 per cent and cut water use per tonne by 30 per cent. Improved storage preserves the additional harvest and international staple prices fall 15 per cent. Food importers and adopting farmers gain; high-cost exporters and farmers without access to finance or seed lose relative income. The test for each nation is affordable smallholder adoption without greater land concentration, exclusion from seed access or higher total water withdrawals.", "distribution": { "gains": [ "Smallholders in low-yield regions who obtain seed, credit and advice", "Food-importing nations, through lower import bills and lower food inflation", "Low-income urban households, who spend the largest share of income on staples", "Water-stressed basins where regulators cap withdrawals as efficiency rises", "Suppliers of seed, irrigation equipment, soil testing and storage" ], "loses": [ "High-cost grain exporters and their farmers", "Farmers excluded from finance, seed access or secure tenure", "Owners of cropland in high-cost exporting districts", "Nations whose regulators delay approval and whose farmers buy seed informally", "Traders and intermediaries who depend on post-harvest price swings" ] }, "narrative": { "dateline": "November 2033", "text": "The trial results were published in February 2029. Over three seasons, at 140 sites in 22 countries, a combined package had been tested against local practice: drought-tolerant and heat-tolerant staple varieties, some of them gene-edited, with scheduled low-volume irrigation and a soil protocol of residue retention, targeted nitrogen and reduced tillage. No single component was new. The finding was that the combination transferred. Across maize, rice, wheat and sorghum sites, output per hectare rose by between 18 and 34 per cent and water applied per tonne fell by about a third.\n\nDeployment was negotiated, not left to the market. In July 2029, 31 governments, the principal seed licensors, public breeding institutes and a group of development lenders signed three linked agreements. The first allowed a variety approved by one participating regulator to be registered by the others within 90 days. The second capped trait fees for farms under five hectares and permitted saved seed for the open-pollinated lines. The third financed input credit, irrigation equipment and extension through national banks and co-operatives, with repayment after harvest.\n\nSeed multiplication was the first constraint. In the 2029–2030 season certified seed covered under a tenth of the target area and several governments rationed it by district. By the fourth season the package covered about 40 per cent of staple area in the participating low-yield regions. Adopting farms recorded staple output 25 per cent above their previous average and water use per tonne 30 per cent lower. Hermetic bags, village stores and better drying meant that the additional grain was sold through the year and not all at harvest. International staple prices in 2033 were 15 per cent below their 2028 level in real terms.\n\nResults differed sharply by country. Where land records were reliable, extension staff were in post and credit reached tenant farmers and women, adoption was broad. Where credit required a land title, larger farms adopted first, bought or leased neighbouring plots and took most of the gain; two governments suspended land transfers in irrigated districts in 2032. In several river basins lower water use per tonne did not reduce total withdrawals, because farmers expanded irrigated area until regulators set basin limits. Three participating states delayed approval of the edited varieties after court challenges and their farmers bought seed informally across borders.\n\nFood-importing nations reported lower import bills and lower food inflation by 2032. Grain-exporting regions reported the opposite: lower farm-gate prices, falling cropland values in higher-cost districts and requests for public support. Rice exporters in South-East Asia lost volume to buyers that had moved closer to self-sufficiency. Nutrition surveys in 2033 showed the first measurable falls in child stunting in the districts that adopted earliest. The same surveys showed no change in districts the package had not reached." }, "anchors": [ { "shock_id": "green-revolution-1960", "date": "1960s to 1980s", "event": "Green Revolution", "what_happened": "Semi-dwarf wheat and rice varieties, fertiliser and irrigation more than doubled cereal yields across much of Asia over two to three decades. India's wheat harvest rose from about 12 million tonnes in 1965 to about 20 million in 1970. Gains came first in irrigated districts and to farmers with credit. Groundwater in the main wheat and rice areas was later overdrawn.", "calibrates": "The scale and speed of a yield step delivered as a package of seed, inputs and water. Its two known costs were uneven access and higher water use. This scenario differs by requiring lower water use per tonne." }, { "shock_id": "bt-cotton-in-india-2002", "date": "2002 onward", "event": "Bt cotton in India", "what_happened": "An insect-resistant cotton trait was approved in 2002 and covered more than 90 per cent of India's cotton area within about a decade, almost all of it on small farms. State governments from 2006 and the central government from 2016 capped seed prices and trait fees. The trait licensor contested the controls.", "calibrates": "Smallholders adopt a profitable seed technology within a few seasons once it is approved and stocked. Disputes over trait fees follow adoption and are settled by regulation." }, { "shock_id": "water-efficient-maize-for-africa-2008", "date": "2008 onward", "event": "Water Efficient Maize for Africa", "what_happened": "A public-private partnership launched in 2008 brought together the African Agricultural Technology Foundation, CIMMYT, Monsanto and national research institutes in Kenya, Mozambique, South Africa, Tanzania and Uganda, with philanthropic and US government funding. Drought-tolerant hybrids were licensed royalty-free to local seed companies and reached farmers from 2013. The transgenic versions waited much longer for national approval.", "calibrates": "A royalty-free licensing model for smallholder seed exists and works. It took about five years from launch to first seed sales. Approval timing differed by country and by breeding method." }, { "shock_id": "malawi-farm-input-subsidy-2005", "date": "2005 onward", "event": "Malawi Farm Input Subsidy Programme", "what_happened": "After a failed harvest in 2005, Malawi issued vouchers for subsidised fertiliser and improved maize seed to well over a million smallholder households. Official estimates put the 2006 maize harvest at more than double the 2005 level and the 2007 harvest higher again; good rains contributed and the estimates were later questioned. The programme's cost rose sharply when fertiliser prices spiked in 2008.", "calibrates": "A government can lift national staple output within two seasons by financing inputs for smallholders. The gain is fiscally expensive, depends on the weather and is hard to measure." }, { "shock_id": "purdue-improved-crop-storage-bags-2007", "date": "2007 onward", "event": "Purdue Improved Crop Storage bags", "what_happened": "A project begun in 2007 with philanthropic funding introduced triple-layer hermetic bags for cowpea storage in West and Central Africa, later extended to maize and other grains in other regions. The bags stop insect damage without chemicals, are made by local manufacturers and have sold in the millions.", "calibrates": "The storage part of the package is a low-cost, locally manufactured product with a commercial supply chain. It lets farmers sell after the harvest price trough." }, { "shock_id": "golden-rice-approval-in-the-philippines-2021", "date": "2021–2024", "event": "Golden Rice approval and reversal in the Philippines", "what_happened": "In July 2021 the Philippines became the first country to approve Golden Rice for commercial propagation, more than twenty years after the first prototype was published in 2000. In April 2024 the Court of Appeals revoked the permit, together with that for an insect-resistant aubergine, on safety and monitoring grounds.", "calibrates": "Approval is the slowest step for a new crop trait and can be reversed by a court after it is granted. The scenario's 90-day mutual recognition is a sharp departure from this record." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "3 years", "severe": "5 years", "extreme": "5 years" }, "onset": { "major": "years", "severe": "months", "extreme": "months" }, "warning": { "major": null, "severe": "months", "extreme": null }, "scope": { "major": "regional", "severe": "global", "extreme": "global" }, "origin": { "major": null, "severe": "negotiated", "extreme": null }, "external_support": { "major": "full", "severe": "partial", "extreme": "none" }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": null }, "recovery_horizon": { "major": null, "severe": "structural", "extreme": null } }, "specific": [ { "name": "Rise in staple output on adopting farms", "default": "25 per cent", "range": "10 to 40", "unit": "per cent", "note": "Against each farm's average for the three seasons before adoption." }, { "name": "Fall in water use per tonne of staple output", "default": "30 per cent", "range": "15 to 45", "unit": "per cent", "note": "Water applied per tonne harvested. Total withdrawals may still rise if irrigated area expands." }, { "name": "Time from agreements to full effect", "default": "4 growing seasons", "range": "3 to 8", "unit": "growing seasons", "note": "Two to four years, depending on the number of crops a year." }, { "name": "Share of staple area adopting in deployment regions", "default": "40 per cent", "range": "15 to 60", "unit": "per cent", "note": "Not fixed by the specification. Set by GINC so that the output gain is consistent with the price fall." }, { "name": "Fall in international staple prices", "default": "15 per cent", "range": "5 to 30", "unit": "per cent", "note": "In real terms, against the level before deployment, held for at least two seasons." }, { "name": "Post-harvest loss of staples on adopting farms", "default": "halved", "range": "options: cut by a quarter / halved / cut by three-quarters", "unit": null, "note": "Hermetic storage, drying and village stores. Cold chains matter less for grains than for perishable crops." }, { "name": "Seed access terms for small farms", "default": "capped trait fees; saved seed permitted for open-pollinated lines", "range": "options: commercial terms / capped fees / fully public varieties", "unit": null, "note": "Determines whether adoption is affordable and who is excluded." } ] }, "transmission": [ "Published multi-country trials show that the package of varieties, irrigation scheduling and soil management transfers across crops and climate zones.", "Governments, seed licensors and lenders agree mutual recognition of variety approvals, capped trait fees for small farms and finance for inputs and extension.", "Seed is multiplied and rationed; credit, irrigation equipment and advice reach farmers through banks, co-operatives and extension services.", "Adopting farms raise staple output by a quarter and use about a third less water per tonne; improved storage keeps the additional grain saleable.", "Larger domestic harvests reduce import demand and international staple prices fall 15 per cent.", "Importers' food bills, subsidies and inflation fall; rural incomes and nutrition improve where farmers adopt.", "High-cost exporters lose farm income and cropland value; farmers without credit, seed or secure tenure fall behind and some sell or lease land.", "Where regulators do not cap withdrawals, farmers expand irrigated area and total water use does not fall." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "Lower staple prices reduce food-driven unrest; local land and water disputes need routine policing." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Irrigation delivery, seed multiplication, grain storage and rural roads set the pace of deployment." }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Crop breeding, gene editing, soil sensing and irrigation control must be adapted and maintained locally." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Variety approval, extension, input finance schemes, land records and basin water limits decide who adopts." }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "Nutrition and rural incomes improve; farmers and extension staff need agronomy and water management skills." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "Disputes over seed ownership, land consolidation and exporter farm incomes test rural consent." }, { "dimension": "Economic", "domain": "macro-financial", "load": "Medium", "channel": "Food import bills and inflation fall; adoption finance costs the budget; exporter revenue declines." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Staple trade flows reorder; high-cost exporters lose markets; seed, equipment and storage supply chains expand." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "Water withdrawn per tonne falls; fertiliser and pumping energy demand change with more intensive farming." } ], "stakeholders": { "government": { "exposure": "Food import bills, subsidy budgets, the speed of the seed regulator, land administration and basin water limits", "actions": [ "Join mutual recognition of variety approvals and resource the national regulator to meet its deadline", "Deliver adoption credit without requiring a land title and track uptake by farm size and by sex of farmer", "Set basin withdrawal limits before irrigation efficiency rises and rebuild grain reserves from domestic harvests" ], "watch": [ "Certified seed supply against target area", "Adoption rate by farm size", "Total water withdrawals in irrigated basins" ], "relevance": 3 }, "technology": { "exposure": "Seed, trait licensing, irrigation control, soil sensing and advisory services; dependence on traits held abroad", "actions": [ "Adapt varieties and irrigation schedules to local soils through national breeding institutes", "License traits on capped-fee terms for small farms and publish the terms", "Build local maintenance and spare parts networks for irrigation and storage equipment" ], "watch": [ "Seed sales by variety and farm size", "Trait licence terms and disputes", "Equipment failure rates and repair times" ], "relevance": 5 }, "investors": { "exposure": "Seed, irrigation and storage firms gain; cropland and agribusiness in high-cost exporting regions lose value", "actions": [ "Test cropland and agribusiness holdings against staple prices 15 per cent lower for five years", "Assess smallholder credit portfolios for repayment after harvest and for weather risk", "Price the regulatory risk of land consolidation in deployment regions" ], "watch": [ "Cropland values in exporting regions", "Smallholder loan repayment rates", "Staple price indices and futures prices" ], "relevance": 4 }, "public": { "exposure": "Lower staple prices and better nutrition; loss of land or income for farmers who cannot adopt", "actions": [ "Use co-operatives and farmer groups to buy seed, share equipment and store grain", "Report exclusion from credit, seed or water allocation to local authorities", "Local government: keep land transfer and water allocation records open to inspection" ], "watch": [ "Retail staple prices", "Local land sales and lease terms", "Child nutrition survey results" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "Medium", "rationale": "A major grain exporter: lower prices reduce farm income, while seed, irrigation and analytics firms sell into deployment." }, { "region": "europe", "exposure": "Medium", "rationale": "Consumers gain modestly; high-cost cereal producers lose margin; slower approval of edited varieties limits domestic uptake." }, { "region": "china", "exposure": "High", "rationale": "Water stress on the northern plain, a large smallholder base and strong domestic crop science make uptake fast." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Rice importers gain from larger harvests and lower prices; Thailand, Vietnam and Australia lose export income." }, { "region": "south-asia", "exposure": "High", "rationale": "Groundwater depletion and large smallholder populations make water-efficient output the main gain; pumping subsidies complicate adoption." }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "The most water-scarce region and heavily import-dependent for staples: import bills fall and irrigated output rises within fixed water budgets." }, { "region": "africa", "exposure": "High", "rationale": "The widest yield gap and the largest potential gain; seed systems, rural finance and storage are the weakest links." }, { "region": "latin-america", "exposure": "High", "rationale": "Brazil and Argentina lose export margin; Central American and Andean smallholders gain; the risk of land concentration is highest here." }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "Russia, Ukraine and Kazakhstan lose export income and leverage; irrigated farming in Central Asia gains from water savings." } ], "indicators": [ { "name": "Cereal yields by region", "source": "FAO (FAOSTAT)", "threshold": "Yields in low-yield regions rising more than 5 per cent a year for two consecutive seasons", "cadence": "annual" }, { "name": "FAO Cereal Price Index", "source": "FAO", "threshold": "Index 10 per cent below its average of the previous three years for two consecutive quarters", "cadence": "monthly" }, { "name": "Agricultural water withdrawal and irrigated area", "source": "FAO (AQUASTAT)", "threshold": "Withdrawals flat or falling while irrigated output rises", "cadence": "annual" }, { "name": "Approvals and releases of gene-edited and climate-resilient staple varieties", "source": "ISAAA; national variety registers", "threshold": "The same variety registered in five or more countries within one year", "cadence": "quarterly" }, { "name": "Adoption of improved varieties and practices by smallholders", "source": "World Bank (LSMS-ISA household surveys); CGIAR", "threshold": "Adoption above 20 per cent of staple area in a deployment country", "cadence": "every two to three years" }, { "name": "Rural adults with an account or formal credit", "source": "World Bank (Global Findex)", "threshold": null, "cadence": "every three years" }, { "name": "Distribution of farmland by size of holding", "source": "FAO (World Programme for the Census of Agriculture); national agricultural censuses", "threshold": "Rising share of land in the largest holdings in deployment districts", "cadence": "about every ten years; land registry data where available" }, { "name": "Cropland values in grain-exporting nations", "source": "USDA National Agricultural Statistics Service; national land registries", "threshold": "Cropland values falling for two consecutive years", "cadence": "annual" } ], "compounds": { "triggers": [ { "id": "S11", "note": "Lower food import bills and subsidy costs reduce the financing needs of distressed importers and make restructuring terms easier to meet." }, { "id": "S12", "note": "Mutual recognition of seed approvals and new farm export corridors give members a working model for wider market access." } ], "triggered_by": [ { "id": "S17", "note": "AI-directed research shortens breeding and trait validation." }, { "id": "S15", "note": "Cheap firm power lowers the cost of pumping, drying, storage and nitrogen fertiliser." }, { "id": "S18", "note": "Public digital identity and payments deliver vouchers, credit and advice to smallholders without intermediaries." }, { "id": "S06", "note": "A food availability crisis creates the political mandate for seed approval and financing agreements." }, { "id": "S11", "note": "fiscal room pays for extension services, seed finance and storage in low-yield regions" } ], "amplified_by": [ { "id": "S13", "note": "Lower technology barriers ease cross-border licensing of traits and sensing equipment between the two largest crop science bases." } ], "triggered_by_other": [ "Expiry or pooled licensing of the main gene-editing patents" ], "amplifying_trends": [ "Agricultural technology", "Gene editing & cell therapies", "Freshwater stress & transboundary water", "Agricultural soil degradation", "Food storage & cold chains", "Intellectual property access dependence", "Financial inclusion", "Adaptive regulation" ] }, "open_questions": [ "The 15 per cent price fall depends on the share of staple area that adopts, which the specification leaves open. This record assumes 40 per cent in the deployment regions.", "Whether lower water use per tonne reduces total withdrawals or is offset by expanded irrigated area. It is also open whether that outcome should be a parameter of this scenario.", "How to rate exporting nations whose farm sector contracts: as a national loss at level 4 or as an ordinary terms-of-trade adjustment.", "Whether public and court resistance to gene-edited varieties is a parameter here or a separate event." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Thirty-one governments sign **three linked agreements** on seed approval, finance and extension. Exporting regions ask for farm support.", "economic": "International staple prices fall **15 per cent**. Importers' food bills and inflation fall; high-cost exporters lose farm income.", "social": "Where credit requires a land title, **larger farms adopt first** and take most of the gain. Stunting falls only where the package reached.", "technological": "No component is new. The finding is that **the combination transfers** across crops, soils and climate zones.", "legal": "A variety approved by one regulator is registered by the others **within 90 days**. Trait fees are capped for small farms; three states delay after court challenges.", "environmental": "Water use per tonne falls 30 per cent, but **total withdrawals do not fall** until regulators set basin limits." }, "regions": { "north-america": "A major exporter: **farm-gate prices and cropland values fall** in higher-cost districts, while seed and irrigation firms sell into deployment.", "europe": "Consumers gain modestly. **High-cost cereal producers lose margin** and slower approval of edited varieties limits uptake.", "china": "Water stress on the northern plain and strong domestic crop science make **uptake fast**.", "indo-pacific": "Rice importers move closer to self-sufficiency; **Thailand, Vietnam and Australia** lose export volume.", "south-asia": "Groundwater depletion makes **water per tonne** the main gain. Pumping subsidies weaken the incentive to save.", "gulf-middle-east": "The most water-scarce region: **import bills fall** and irrigated output rises within fixed water budgets.", "africa": "The **widest yield gap** and the largest gain, limited by seed supply, rural credit and storage.", "latin-america": "**Brazil and Argentina** lose export margin. Smallholders in Central America and the Andes gain; land concentration risk is highest.", "russia-eurasia": "Russia, Ukraine and Kazakhstan **lose export income** and leverage. Irrigated farming in Central Asia saves water." }, "evolution": { "lead_indicators": "**The same variety is registered in five or more countries** within a year. Cereal yields in low-yield regions rise more than 5 per cent a year for two seasons.", "triggers": "Trials at 140 sites in 22 countries validate the package. Thirty-one governments, seed licensors and lenders then sign **three linked agreements** on approval, trait fees and finance.", "immediate": "**Seed multiplication is the first constraint.** In the first season certified seed covers under a tenth of the target area and several governments ration it by district.", "post_immediate": "By the fourth season the package covers 40 per cent of staple area. Adopting farms raise output 25 per cent and **international staple prices fall 15 per cent**.", "stabilisation": "Importers' food bills and inflation fall; high-cost exporters lose farm income and cropland value. **Regulators set basin limits** after expanded irrigation keeps total withdrawals from falling.", "long_term": "Staple trade reorders around importers closer to self-sufficiency. **The gain stays where the package reached**: stunting falls in adopting districts, and farmers without credit, seed or tenure fall behind." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 3, "L10y": 4, "impact_systemic": 3, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Agricultural yield revolution: restated as a validated package deployed within four growing seasons, with water use per tonne, storage and smallholder access added; onset moved from years to months, origin to negotiated and L2y from 2 to 3." } ], "citation": "GINC (2027). Scenario S16 A validated farming package raises water-efficient output, Scenario Library v0.5. scenarios.ginc.org/scenarios/water-efficient-food-leap" }, { "id": "S17", "slug": "automated-discovery-step", "title": "AI-directed research produces a reproducible discovery step", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "D", "short_title": "Automated discovery step", "thematics": [ "ai-cyber-digital", "economic-security-supply-chains", "demographics-human-capital" ], "likelihood_type": "systemic", "likelihood_note": "The bands rate the Standard Severe case: a verified discovery step in three scientific fields. The first-pass superintelligence takeoff is carried as the Extreme setting and is not what these bands rate.", "scores": { "likelihood_2y": { "band": 3, "rationale": "Structure prediction and materials screening already run at scale, and one autonomous laboratory has reported synthesising predicted compounds. The scenario requires more: independent reproduction of the whole loop from hypothesis to useful result in three fields, with licensed systems inside a year. In mid-2026 no AI-designed drug had full approval and early automated-laboratory claims were disputed on novelty. A verified step within two years is possible, not likely." }, "likelihood_10y": { "band": 4, "rationale": "The length of tasks AI agents complete has risen steadily, laboratory automation is spreading and the three fields have outputs that can be tested. Ten years allows several model generations and time for replication studies. The band is 4 and not 5 because the definition is demanding: verification in three fields and a halving of development time. Earlier general-purpose technologies took two decades to show in productivity." }, "impact_systemic": { "level": 4, "rationale": "Rated on scale of change. Pharmaceuticals, chemicals, materials and biomanufacturing reprice within five years and the location of discovery moves towards nations with laboratories and compute. The effect on global output inside five years is limited by trials, approval and manufacturing, so level 5 is not reached at Standard Severe. Level 5 applies at the Extreme setting, which carries the superintelligence takeoff." }, "impact_national": { "level": 4, "rationale": "For a highly exposed nation the highest dimension reached is international position. A research base and export sectors built on long development cycles lose standing within a few years where laboratories, evaluators and approval capacity are missing. Security is engaged through dual-use access. Welfare improves where discoveries are captured. The change is large but can be reversed by investment, so level 4." }, "confidence": { "level": "low", "reason": "Single-field precedents exist, but no verified case of the whole loop. The three-field threshold and the 50 per cent figures are specification choices, not observed values." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "3 years", "warning": "months", "scope": "global", "origin": "accidental (technological)", "external_support": "partial (licensed and open systems)", "policy_response": "current plans executed", "recovery_horizon": "structural" }, "summary": "Independent laboratories verify that AI-directed research systems can formulate hypotheses, run automated experiments and produce useful, reproducible results in three commercially important fields: therapeutic candidates, battery and catalyst materials and engineered enzymes. Licensed and open systems become available within a year. For qualifying programmes, the time from target to validated candidate halves and cost per validated candidate falls 50 per cent over three years. General superintelligence is not assumed at Standard Severe; the first-pass takeoff is carried as the Extreme setting. Nations must supply laboratories, compute, skilled evaluators and approval pathways to capture discoveries, while managing dual-use access and concentration of intellectual property.", "distribution": { "gains": [ "Nations with automated laboratories, compute, skilled evaluators and capable regulators", "Owners of verified research systems, proprietary data and laboratory automation", "Patients and industries in fields where validated candidates reach approval", "Research institutions that direct open systems at neglected local priorities" ], "loses": [ "Contract research and screening businesses that sell long development cycles", "Nations with access to the systems but no laboratories or evaluators to use them", "Holders of early-stage pipelines and patent portfolios overtaken by faster programmes", "Jurisdictions whose regulators and patent offices cannot handle the volume and lose first filings" ] }, "narrative": { "dateline": "November 2031", "text": "The verification report was published in February 2029. Eleven laboratories in seven countries, none funded by the developers, had been given the same systems and the same three tasks. In each field the system proposed hypotheses, designed experiments, ran them on automated equipment and revised its plan from the results. The laboratories reproduced a class of antibiotic candidates active against resistant infections, a solid electrolyte that kept its conductivity through 2,000 charge cycles and an enzyme that reduced the energy used in a common chemical step. The report's conclusion was narrow. The systems failed on problems outside the three fields. Within them they worked, and the results could be repeated.\n\nLicences were on sale by the summer and two open versions followed within the year. Access proved to be the smaller constraint. A system could propose 400 candidates in a week; a national laboratory with manual equipment could test 12. By 2031 the programmes that qualified, those with automated laboratories, reliable compute and staff able to judge the output, had halved the time from target to validated candidate and cut the cost per candidate by about the same. Programmes without those things reported little change.\n\nThe effect on business came quickly. Contract research firms that sold screening by the hour lost a third of their orders in two years. Three large pharmaceutical companies wrote down their early-stage pipelines and bought laboratory capacity. Patent offices received filings in volumes they could not examine, and courts in four jurisdictions gave different answers on whether a discovery made by a system could be patented and by whom. Medicines regulators became the limiting step. The agencies that had prepared rolling review and accepted automated evidence cleared candidates into trials a year ahead of the others, and developers moved their first filings to them. Trials themselves took as long as before.\n\nGovernments handled the dual-use problem unevenly. The biological design capability that produced the antibiotics could be directed at harmful agents, and the open versions could not be recalled. Fourteen countries adopted synthesis screening and tiered access rules; others did not. Defence ministries funded materials programmes on the same systems and classified the results.\n\nBy November 2031 the gains were measurable and concentrated. Five jurisdictions held most of the new patents. Countries that had equipped laboratories, trained evaluators and reformed approval pathways before 2029 captured discoveries in their own priorities, including neglected diseases and local crops. Countries that had relied on licences alone bought the products later, at the owners' prices. Research staff moved towards the equipped sites. No system had exceeded human experts across all fields, and the developers reported no self-sustaining acceleration of their own research. The step was a change in the cost of discovery in three fields. What separated nations was the capacity they had built to use it." }, "anchors": [ { "shock_id": "alphafold-protein-structure-prediction-2020", "date": "November 2020 to October 2024", "event": "AlphaFold protein structure prediction", "what_happened": "AlphaFold 2 predicted protein structures at close to experimental accuracy in the CASP14 blind assessment in November 2020. A public database released predictions for more than 200 million proteins in July 2022. Two of its developers shared the 2024 Nobel Prize in Chemistry.", "calibrates": "An AI system solving one defined scientific problem, verified by an independent blind assessment and then opened to all. The scenario requires the same standard of proof for the whole research loop, in three fields." }, { "shock_id": "gnome-and-a-lab-materials-discovery-2023", "date": "November 2023", "event": "GNoME and the A-Lab", "what_happened": "Google DeepMind reported 2.2 million predicted crystal structures, about 380,000 of them judged stable. An autonomous laboratory at Lawrence Berkeley National Laboratory reported synthesising 41 of 58 target compounds in 17 days. Other researchers later disputed how many of the compounds were new.", "calibrates": "Prediction joined to automated experiment in materials, and the reason the specification requires independent verification before the step counts." }, { "shock_id": "erooms-law-2012", "date": "2012", "event": "Eroom's law", "what_happened": "Scannell and co-authors showed that the number of new drugs approved per billion US dollars of research spending, adjusted for inflation, had halved about every nine years since 1950.", "calibrates": "The baseline the scenario reverses. A 50 per cent fall in cost per validated candidate in three years is large against a 60-year trend in the opposite direction." }, { "shock_id": "covid-19-mrna-vaccines-2020", "date": "2020", "event": "COVID-19 mRNA vaccines", "what_happened": "Vaccines were authorised within about 11 months of the pathogen being sequenced, with regulators reviewing data while trials proceeded.", "calibrates": "Approval pathways can be compressed where regulators have prepared. This is the capability that decides which nations capture discoveries." }, { "shock_id": "ai-designed-drug-candidates-2026", "date": "July 2026", "event": "AI-designed drug candidates", "what_happened": "No AI-designed drug had full approval; the most advanced candidate entered a Phase III trial.", "calibrates": "Counter-anchor on speed. Discovery has accelerated ahead of trials and approval, which the Standard Severe case does not assume are shortened." }, { "shock_id": "metr-time-horizon-measurements-2025", "date": "March 2025 to April 2026", "event": "METR time-horizon measurements", "what_happened": "The length of tasks AI agents complete doubled about every seven months, then faster; in April 2026 laboratories reported no dramatic speed-up of their own research.", "calibrates": "Leading indicator for the step, and counter-evidence for the Extreme setting, which requires AI research itself to be automated." } ], "parameters": { "common": { "severity": { "major": "major (one field verified; systems licensed, not open)", "severe": "severe (verified discovery step in three fields; general superintelligence not assumed)", "extreme": "extreme (general superintelligence takeoff: the first-pass record, in which AI systems automate AI research)" }, "duration": { "major": "3 years", "severe": "3 years", "extreme": "3 years" }, "onset": { "major": "years", "severe": "months", "extreme": "months" }, "warning": { "major": "months", "severe": "months", "extreme": "months" }, "scope": { "major": "global", "severe": "global", "extreme": "global" }, "origin": { "major": "accidental (technological)", "severe": "accidental (technological)", "extreme": "accidental (technological)" }, "external_support": { "major": "partial (licensed systems)", "severe": "partial (licensed and open systems)", "extreme": "none (access on the owners' terms)" }, "concurrency": { "major": "standalone", "severe": "standalone", "extreme": "plus one named scenario (S08)" }, "policy_response": { "major": "current plans executed", "severe": "current plans executed", "extreme": "current plans executed" }, "recovery_horizon": { "major": "years", "severe": "structural", "extreme": "structural (irreversible at Extreme)" } }, "specific": [ { "name": "Capability of the leading systems", "default": "automated discovery in defined fields", "range": "options: automated discovery in defined fields / automated AI research / general superintelligence", "unit": null, "note": "General superintelligence is not assumed at Standard Severe. Extreme: the first-pass takeoff, in which systems automate AI research and outperform human experts in every field." }, { "name": "Scientific fields with independently verified automated discovery", "default": "3", "range": "1 to 6", "unit": "fields", "note": "Default fields: therapeutic candidates, battery and catalyst materials and engineered enzymes. Major: 1. Extreme: every field of science and engineering." }, { "name": "Fall in development time for qualifying programmes", "default": "50 per cent", "range": "25 to 75", "unit": "per cent over three years", "note": "Measured from target to validated candidate. Clinical trial and approval time is not assumed to fall. Extreme: research speed-up of tenfold or more." }, { "name": "Fall in cost per validated candidate", "default": "50 per cent", "range": "25 to 80", "unit": "per cent over three years", "note": "Applies to programmes with automated laboratories, compute and skilled evaluators." }, { "name": "Time from verification to licensed and open systems", "default": "12 months", "range": "6 to 36", "unit": "months", "note": "Extreme: time from automated AI researcher to superintelligence, 12 months." }, { "name": "Access for nations that host no developer", "default": "licensed and open systems", "range": "options: licensed only / restricted by export control", "unit": null, "note": "Extreme: paid access on the owners' terms, with open versions withheld." }, { "name": "Binding constraint on capture", "default": "automated laboratories and skilled evaluators", "range": "options: compute and power / approval pathways / access controls", "unit": null, "note": "Extreme: compute and power." } ] }, "transmission": [ "Independent laboratories reproduce AI-directed hypothesis generation and automated experiment in three fields; the result is verified, not claimed.", "Developers license the systems and open versions follow within a year; access spreads faster than the laboratories needed to use it.", "Qualifying programmes halve development time and cost per validated candidate; candidate volume outruns evaluators, trial capacity and approval pathways.", "Value moves to owners of systems, proprietary data and automated laboratories; research businesses built on long development cycles are repriced.", "Patent offices and regulators face volume and new questions of inventorship and evidence; jurisdictions with capable agencies receive first filings and set standards.", "Dual-use results in biology and materials prompt access tiers, synthesis screening and defence research programmes; open versions limit enforcement.", "Research staff and investment move to equipped sites; nations with laboratories, compute and evaluators capture discoveries in their own priorities.", "Nations with licences but no capacity buy products later at the owners' prices, and their research position declines." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "High", "channel": "dual-use biology and materials results; defence research programmes run on the same systems" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "automated laboratories, compute, power and data networks decide who can run qualifying programmes" }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "AI research systems, advanced computing, laboratory robotics, biotechnology and materials capability" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "approval pathways, patent examination, research funding and dual-use access rules" }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "skilled evaluators and researchers; health gains where discoveries are captured" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "standard setting, access agreements and public trust in machine-generated evidence" }, { "dimension": "Economic", "domain": "macro-financial", "load": "Medium", "channel": "repricing of research-intensive assets; public funding for laboratories" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "pharmaceutical, chemical and materials industries repriced; intellectual property concentrates" }, { "dimension": "Economic", "domain": "energy-resources", "load": "Medium", "channel": "electricity for compute and laboratories; new battery and catalyst materials" } ], "stakeholders": { "government": { "exposure": "Research position, approval capacity, dual-use control and the terms on which the nation obtains licensed systems", "actions": [ "Fund automated laboratories and train evaluators before systems are licensed", "Prepare regulators and patent offices for higher volumes and machine-generated evidence", "Set tiered access and synthesis screening rules for dual-use design capability" ], "watch": [ "Independent replication of AI-directed discoveries", "Licence terms and export controls on scientific systems", "Review times at medicines regulators and patent offices" ], "relevance": 5 }, "technology": { "exposure": "System developers and laboratory automation firms gain; compute and data providers must meet research demand and access controls", "actions": [ "Submit systems to independent verification before making commercial claims", "Build misuse screening and access tiers into licensed and open releases", "Secure compute, power and laboratory robotics supply for research customers" ], "watch": [ "Task-horizon and research-automation benchmarks", "Open-weight releases of scientific models", "Rules on model weights and biological design tools" ], "relevance": 5 }, "investors": { "exposure": "Repricing of research-intensive sectors: early-stage pipelines, contract research and patent portfolios lose value while owners of systems and laboratories gain", "actions": [ "Test holdings on halved development time and cost per candidate", "Map portfolio exposure to businesses that sell long development cycles", "Assess patent validity risk where inventorship rules are unsettled" ], "watch": [ "Candidates entering trials from automated programmes", "Write-downs of early-stage pipelines", "Concentration of new patents by owner and jurisdiction" ], "relevance": 4 }, "public": { "exposure": "Earlier access to new medicines and materials where they are approved and affordable; research employment; biosafety", "actions": [ "Ask how public research funding secures access to the resulting products", "Support training in evaluating and checking automated research", "Hold local institutions to biosafety and screening standards" ], "watch": [ "Time from approval to availability in the national health system", "Research and technical hiring", "Reported biosafety incidents and screening coverage" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Home to most system developers and much automated laboratory capacity; gains, patents and the dual-use control problem concentrate here" }, { "region": "europe", "exposure": "High", "rationale": "Deep research base and large pharmaceutical and chemical industries; approval speed decides whether discoveries are captured or filed elsewhere" }, { "region": "china", "exposure": "High", "rationale": "Laboratory scale, state research funding and open-weight models support fast adoption; access to advanced chips sets the pace" }, { "region": "indo-pacific", "exposure": "High", "rationale": "Japan, Korea, Taiwan, Singapore and Australia hold materials, chip and biomanufacturing capacity; much of ASEAN and the Pacific depends on licences" }, { "region": "south-asia", "exposure": "Medium", "rationale": "Contract research and generics face repricing; a large trained workforce can capture gains if automated laboratories are built" }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Capital and power can buy compute and laboratories; skilled evaluators and a domestic research base are scarce outside Israel" }, { "region": "africa", "exposure": "Medium", "rationale": "Large potential gains in neglected diseases and crops; few laboratories or evaluators to direct the systems at local priorities" }, { "region": "latin-america", "exposure": "Medium", "rationale": "Strong public research institutes in a few states; regulatory capacity and funding limit capture elsewhere" }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "Skilled scientists but restricted access to chips and licensed systems; open versions help and defence applications take priority" } ], "indicators": [ { "name": "Independent replication of AI-directed discoveries", "source": null, "threshold": "Whole research loop reproduced by independent laboratories in three fields", "cadence": "as published" }, { "name": "Length of tasks AI agents complete autonomously", "source": "METR", "threshold": null, "cadence": "per model release" }, { "name": "AI-designed drug candidates in Phase II and Phase III trials", "source": "ClinicalTrials.gov, WHO International Clinical Trials Registry Platform", "threshold": "First full regulatory approval of an AI-designed medicine", "cadence": "quarterly" }, { "name": "Novel medicine approvals and review times", "source": "US Food and Drug Administration, European Medicines Agency", "threshold": null, "cadence": "annual" }, { "name": "Frontier compute and data-centre power under construction", "source": "Epoch AI, IEA", "threshold": null, "cadence": "annual" }, { "name": "Open-weight releases of scientific and biological design models", "source": "Stanford HAI AI Index", "threshold": null, "cadence": "annual" }, { "name": "Export controls on chips, model weights and biological design tools", "source": "US Bureau of Industry and Security", "threshold": "Controls extended to scientific research systems", "cadence": "as issued" }, { "name": "Research spending and researchers per million population", "source": "OECD Main Science and Technology Indicators, UNESCO Institute for Statistics", "threshold": null, "cadence": "annual" } ], "compounds": { "triggers": [ { "id": "S08", "note": "the same systems extend from research to professional workflows; certain at the Extreme setting" }, { "id": "S15", "note": "materials discovery for storage and firm clean generation" }, { "id": "S19", "note": "faster and cheaper candidate discovery for metabolic and preventive treatments" }, { "id": "S20", "note": "automated design of diagnostics and countermeasures shortens the response" }, { "id": "S10", "note": "only if dual-use access controls fail; a tail risk, not the central case" }, { "id": "S09", "note": "AI-directed research could shorten the path to fault-tolerant hardware or to better algorithms." }, { "id": "S16", "note": "AI-directed research shortens breeding and trait validation." } ], "triggered_by": [ { "id": "S08", "note": "the same step in agent reliability, applied to research" }, { "id": "S13", "note": "relaxed technology restrictions widen access to chips and licensed systems" } ], "amplified_by": [ { "id": "S01", "note": "bloc controls on chips and systems narrow access and widen the gap between nations" }, { "id": "S15", "note": "cheap firm power eases the compute and laboratory constraint" } ], "triggered_by_other": [], "amplifying_trends": [ "Automated AI research", "AI-accelerated science", "Compute scaling & AI infrastructure", "Open-weight AI diffusion", "Advanced materials", "Synthetic biology & biomanufacturing", "Research & development intensity", "Biosecurity & dual-use biology" ] }, "open_questions": [ "Whether the first-pass superintelligence takeoff, carried here as the Extreme setting, is the same event at higher severity or a different scenario that needs its own record and a paired loss-of-control case.", "Whether halved development time covers discovery up to a validated candidate only, as this record assumes, or also trials and approval, where clinical and regulatory capacity is the constraint.", "Who defines independent verification and by what test, given that early claims of automated discovery have been disputed on novelty.", "Whether a scenario that loads defence and security High through dual-use access belongs on the upside list without a paired misuse case." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Governments compete on laboratories, evaluators and approval pathways. **Fourteen countries adopt tiered access rules** for dual-use design capability; others do not.", "economic": "Qualifying programmes **halve time and cost per validated candidate**. Contract research and early-stage pipelines built on long cycles are written down.", "social": "Patients gain where regulators and health systems can absorb new candidates. **Research staff move to equipped sites**, widening the gap between nations.", "technological": "Eleven independent laboratories reproduce the whole loop in **three fields, not all of science**. Automated laboratories, not access to systems, become the constraint.", "legal": "**Inventorship and evidence rules** diverge across jurisdictions. Patent offices and medicines regulators become the limiting step.", "environmental": "New electrolytes, catalysts and enzymes **reduce energy and material use** in industry, while compute and automated laboratories add electricity demand." }, "regions": { "north-america": "**Home to most system developers** and much automated laboratory capacity. Gains and patents concentrate here first, with the dual-use control problem.", "europe": "A deep research base and large pharmaceutical and chemical industries. **Approval speed** decides whether discoveries are captured or filed elsewhere.", "china": "Laboratory scale, state research funding and open-weight models support fast adoption. **Access to advanced chips** sets the pace.", "indo-pacific": "Japan, Korea, Taiwan, Singapore and Australia hold **materials, chip and biomanufacturing capacity**. Much of ASEAN and the Pacific depends on licences.", "south-asia": "**Contract research and generics** face repricing. A large trained workforce can capture gains if automated laboratories are built.", "gulf-middle-east": "Capital and power can **buy compute and laboratories**. The shortage is skilled evaluators and a domestic research base.", "africa": "Large potential gains in neglected diseases and crops, with **few laboratories or evaluators** to direct the systems at local priorities.", "latin-america": "Strong public research institutes in a few states. **Regulatory capacity and funding** limit capture; most nations buy products later.", "russia-eurasia": "Skilled scientists but **restricted access to chips and licensed systems**. Open versions help and defence applications take priority." }, "evolution": { "lead_indicators": "**Independent laboratories reproduce** AI-directed discoveries. The length of tasks AI agents complete keeps rising and the first AI-designed medicine gains full regulatory approval.", "triggers": "Eleven laboratories in seven countries, none funded by the developers, **reproduce the whole research loop in three fields**: therapeutic candidates, battery and catalyst materials and engineered enzymes.", "immediate": "Licences are on sale within months and **open versions follow within the year**. Access spreads faster than the automated laboratories needed to test what the systems propose.", "post_immediate": "Qualifying programmes **halve time and cost per validated candidate** over three years. Contract research firms lose a third of their orders and early-stage pipelines are written down.", "stabilisation": "**Regulators and patent offices become the limiting step.** Prepared agencies clear candidates into trials a year ahead and receive first filings. Trials take as long as before.", "long_term": "**Five jurisdictions hold most new patents** and research staff move to equipped sites. Nations with licences but no laboratories buy products later, at the owners' prices." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 3, "L10y": 4, "impact_systemic": 4, "impact_national": 4, "confidence": "low" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Superintelligence takeoff: the Standard Severe case is now a verified discovery step in three scientific fields, both impact levels fall from 5 to 4 and the takeoff is carried as the Extreme setting." } ], "citation": "GINC (2027). Scenario S17 AI-directed research produces a reproducible discovery step, Scenario Library v0.5. scenarios.ginc.org/scenarios/automated-discovery-step" }, { "id": "S18", "slug": "public-service-leap", "title": "A public service platform reaches inclusive operation", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "D", "short_title": "Public service leap", "thematics": [ "ai-cyber-digital", "demographics-human-capital", "information-integrity-social-cohesion" ], "likelihood_type": "idiosyncratic", "likelihood_note": "The probability is for a given nation. It is clustered among lower-income and middle-income states that already have wide identity coverage and mobile payment use.", "scores": { "likelihood_2y": { "band": 2, "rationale": "This is the chance that a given nation completes the full Standard Severe switch within two years. Brazil's Pix reached most adults in about two years, but on the payment layer alone. Aadhaar took about six years to pass one billion numbers. Few of the 197 nations have identity, payments and data exchange ready to pass independent tests together. One or two completions in the window is the central expectation, which is the Unlikely band." }, "likelihood_10y": { "band": 3, "rationale": "Over ten years the components are open, low in cost and endorsed: G20 leaders adopted a framework for digital public infrastructure in 2023 and many states are building on open-source platforms. The binding constraints are independent testing, universal assisted access and political tolerance of audit. GINC expects between two and ten nations to meet the full definition in a decade, which is the Possible band." }, "impact_systemic": { "level": 1, "rationale": "Level 1. The event occurs in one nation at a time and the gain is administrative: faster transfers, a narrower tax gap and lower transaction costs. Even in a large adopter this is well under 0.5 per cent of global output over five years, and no capability band shifts are expected outside the adopting state. Payment intermediaries lose income locally, not globally." }, "impact_national": { "level": 4, "rationale": "Level 4, reached on essential services. Benefit delivery time falls 80 per cent, the tax compliance gap narrows by a quarter and 90 per cent of adults can deal with the state remotely, so revenue, inclusion and audit change together. It is not level 5 because the change is reversible: outage, exclusion or misuse of the data can undo the gain, and the structure of the economy is unchanged in the first five years." }, "confidence": { "level": "medium", "reason": "Adoption speeds are well documented for single layers. Evidence on fiscal effects, exclusion rates and the durability of safeguards is thinner and contested." }, "priority": 8, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "3 years (two years to full coverage, then one of contested operation)", "warning": "months", "scope": "national", "origin": "negotiated", "external_support": "partial (open-source components and development finance)", "policy_response": "best practice", "recovery_horizon": "structural" }, "summary": "A government switches its principal payments and administrative services to interoperable public digital systems after independent security and inclusion tests. Within two years, 90 per cent of adults can use identity, payments and consent-based data exchange, with assisted offline access retained for every essential service. Median benefit delivery time falls 80 per cent and the tax compliance gap narrows by a quarter. Procurement and service records become auditable. Citizens and compliant small firms gain access and time. Intermediaries and gatekeepers who drew income from the old process lose it and resist, and poorly represented groups risk exclusion. The test is reliable, rights-respecting operation.", "distribution": { "gains": [ "Households that receive benefits, pensions and refunds in days instead of weeks", "Compliant small firms, which gain time, verified records and access to credit", "Revenue authorities and audit offices", "Adults previously without an account or a usable proof of identity" ], "loses": [ "Agents, brokers and payment handlers whose fee income depended on the old process", "Officials who drew unofficial payments from control of files, licences and contracts", "People the digital route fails: some older adults, minority-language speakers and those without a phone", "Firms and individuals whose under-reported income becomes visible to the revenue authority" ] }, "narrative": { "dateline": "April 2031", "text": "The switch took place on 1 March 2029. Two months earlier the audit office had published the results of the independent tests. The security review had found no unresolved critical faults. The inclusion trial, run across 40 districts, had shown that 96 per cent of adults could complete a payment and a records request, alone or with an assistant. The law had made both reports a condition of the switch.\n\nBy March 2031, 90 per cent of adults had used the identity, payment and data exchange services in the previous quarter. The median time from an approved benefit claim to payment had fallen from 20 days to four. The revenue authority estimated that the tax compliance gap had narrowed by a quarter, mainly because invoices and payments between registered firms were now matched automatically. Every contract above the publication threshold, and every decision on a licence or a benefit, carried a record that the audit office and the applicant could read.\n\nThe gains were contested. About 60,000 licensed agents, form writers and payment handlers lost most of their fee income within a year. Their associations brought two court challenges and organised stoppages at district offices. In three provinces, officials who had controlled land and licence files delayed the transfer of records until the audit office published a list of the offices that had not complied. The new records identified a cartel in road maintenance contracts, and 14 officials were charged.\n\nExclusion was the harder problem. The speech interface performed poorly in two minority languages. Fingerprint authentication failed for older manual workers at four times the national rate. The assisted counters, which the law required in every district, handled 11 per cent of all transactions in the first year and 7 per cent in the second. A proposal in 2030 to close them was withdrawn after the inclusion auditor reported that closure would leave 1.5 million adults without access. The automated eligibility model for housing support was suspended for five months after a review found that it rejected applicants with irregular income at twice the expected rate.\n\nThe system failed in service once. An outage of nine hours in August 2029 stopped online authentication. Pharmacies and benefit offices used the offline procedure and payments were reconciled the next day. In 2030 the interior ministry requested bulk access to payment records. The data protection authority refused and the court upheld the refusal.\n\nTwo neighbouring states that made a similar switch without published tests reported higher enrolment and lower use. GINC's assessment was that the result depended less on the software than on four conditions: tests before the switch, a staffed offline route, records open to audit and a regulator able to refuse the state." }, "anchors": [ { "shock_id": "aadhaar-2009", "date": "2009 onward", "event": "Aadhaar", "what_happened": "India's identity authority was set up in 2009, issued its first number in September 2010, passed one billion numbers in April 2016 and has since issued more than 1.3 billion.", "calibrates": "Identity enrolment at national scale took about six years. The scenario therefore assumes the identity layer largely exists before the two-year switch." }, { "shock_id": "pix-2020", "date": "November 2020", "event": "Pix", "what_happened": "Brazil's central bank launched an instant payment system open to all banks and payment firms. Most adults had used it within two years and it became the country's most used payment method.", "calibrates": "The assumption of 90 per cent coverage in two years on the payment layer, and the loss of transfer fee income by incumbents." }, { "shock_id": "x-road-2001", "date": "2001", "event": "X-Road", "what_happened": "Estonia introduced a data exchange layer through which agencies and firms query each other's registers. Each query is logged and a person can see which bodies have looked at their records.", "calibrates": "Consent-based data exchange and auditable service records as standing infrastructure, sustained for more than two decades." }, { "shock_id": "novissi-cash-transfers-2020", "date": "2020", "event": "Novissi cash transfers", "what_happened": "Togo paid emergency cash transfers to informal workers by mobile money during the pandemic, with registration by phone and payment within days.", "calibrates": "The fall in benefit delivery time that follows when identity and payment systems are connected, in a low-income state." }, { "shock_id": "aadhaar-exclusion-cases-2017", "date": "2017–2019", "event": "Aadhaar exclusion cases", "what_happened": "Researchers and journalists documented denials of subsidised food rations in several Indian states where biometric authentication failed or records had not been linked.", "calibrates": "Counter-anchor: the exclusion that follows where no assisted or offline route exists, and the reason the scenario requires one." }, { "shock_id": "huduma-namba-rulings-2020", "date": "January 2020 and October 2021", "event": "Huduma Namba court rulings", "what_happened": "Kenya's High Court ruled in January 2020 that the national digital identity programme could proceed only with an adequate data protection framework. In October 2021 it found the card roll-out unlawful for want of a data protection impact assessment.", "calibrates": "Counter-anchor: a switch made before legal safeguards and independent assessment are in place can be stopped by the courts." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": null, "severe": "3 years", "extreme": "5 years" }, "onset": { "major": null, "severe": "months", "extreme": null }, "warning": { "major": null, "severe": "months", "extreme": null }, "scope": { "major": null, "severe": "national", "extreme": null }, "origin": { "major": null, "severe": "negotiated", "extreme": null }, "external_support": { "major": null, "severe": "partial", "extreme": null }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "best practice", "extreme": null }, "recovery_horizon": { "major": null, "severe": "structural", "extreme": null } }, "specific": [ { "name": "Adults able to use identity, payments and consent-based data exchange", "default": "90 per cent", "range": "75 to 98", "unit": "per cent of adults", "note": "Measured by successful use within two years of the switch, alone or with assistance, not by enrolment." }, { "name": "Fall in median benefit delivery time", "default": "80 per cent", "range": "50 to 95", "unit": "per cent", "note": "From approved claim to receipt of payment." }, { "name": "Reduction in the tax compliance gap", "default": "25 per cent", "range": "10 to 40", "unit": "per cent of the gap", "note": "The gap between tax due and tax collected, as estimated by the revenue authority." }, { "name": "Time from the switch to full coverage", "default": "2 years", "range": "1 to 4", "unit": "years", "note": "Assumes identity enrolment is largely complete before the switch." }, { "name": "Independent tests before the switch", "default": "security and inclusion tests passed and published", "range": "options: security test only / unpublished / none", "unit": null, "note": "Tests are commissioned outside the operating agency." }, { "name": "Assisted offline access", "default": "retained for every essential service", "range": "options: partial / withdrawn after transition", "unit": null, "note": "Staffed counters and an offline procedure for use during outages." }, { "name": "Records open to audit", "default": "all procurement above the publication threshold and all service decisions", "range": "options: procurement only / internal audit only", "unit": null, "note": null } ] }, "transmission": [ "Independent security and inclusion tests are passed and published, and the government switches its principal payments and administrative services to the public systems.", "Benefits, public salaries, taxes and licences move to the new route, which brings most adults into regular use within months.", "Benefit delivery time falls, and duplicate or fictitious claims are removed as identity and payment records are matched.", "Matched invoices and payments narrow the tax compliance gap, and small firms obtain credit on verified transaction records.", "Procurement and service decisions leave auditable records, which exposes collusion and removes discretion from gatekeepers.", "Displaced intermediaries and officials resist through court challenges, stoppages and delay in transferring records.", "Authentication failures, language gaps and outages fall mainly on poorly represented groups; assisted offline access and redress determine how many are excluded.", "Regulators and courts rule on requests for wider access to personal data, which settles whether public trust in the systems holds." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "Identity records support border and security functions; access by security agencies must be bounded by law" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Identity, payment and data exchange systems become essential infrastructure that must run continuously" }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Authentication, encryption, cyber security and AI case handling must be operated and tested domestically" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Service delivery, revenue administration, procurement audit and redress change together" }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "Digital skills, literacy and language coverage decide who can use the services unaided" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Trust in the state rises or falls with fairness, privacy and the treatment of excluded groups" }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "Tax compliance, benefit leakage, payment costs and access to credit all shift" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "Medium", "channel": "Small firms enter formal commerce; payment agents and form-filling intermediaries lose business" }, { "dimension": "Economic", "domain": "energy-resources", "load": "Low", "channel": "Data centres and access points need continuous power and connectivity" } ], "stakeholders": { "government": { "exposure": "Delivery, revenue and trust improve; outage, exclusion and misuse of data become the state's direct responsibility", "actions": [ "Make published independent security and inclusion tests a legal condition of the switch", "Fund and staff an assisted offline route for every essential service", "Give the data protection authority and the audit office powers and budget before launch" ], "watch": [ "Active use and authentication failure rates by group and district", "Benefit delivery time and the tax compliance gap", "Grievance cases opened and resolved" ], "relevance": 3 }, "technology": { "exposure": "Operators carry a national platform whose failure stops payments and services", "actions": [ "Build on open standards and published interfaces to avoid dependence on one supplier", "Design for outage, low connectivity and users without smartphones", "Test language, speech and biometric performance across population groups before release" ], "watch": [ "Uptime of identity, payment and data exchange services", "Failure rates by language and age group", "Security test findings and time taken to remedy them" ], "relevance": 5 }, "investors": { "exposure": "Payment intermediaries and agents lose fee income; lenders gain verified transaction data and the sovereign gains revenue", "actions": [ "Review holdings exposed to card, remittance and agency fee income in adopting states", "Reassess sovereign revenue projections where the compliance gap narrows", "Price credit to small firms on verified transaction records" ], "watch": [ "Instant payment volumes and fee levels", "Tax revenue as a share of GDP", "Court rulings and legislation affecting the platform" ], "relevance": 4 }, "public": { "exposure": "Faster payments and services for most adults; exclusion for people the digital route fails", "actions": [ "Enrol and learn the assisted and redress routes", "Check the consent record for data shared between agencies", "Report failed authentication and refused services to the oversight body" ], "watch": [ "Outage notices and offline procedures", "Closure or staffing of assisted counters", "Requests by security agencies for access to personal data" ], "relevance": 5 } }, "regions": [ { "region": "north-america", "exposure": "Medium", "rationale": "Federal and state systems are fragmented and private payment networks are entrenched; the gain is real but resistance is strong" }, { "region": "europe", "exposure": "Medium", "rationale": "Most services are already digital; the remaining gain is inclusion and interoperability across borders and agencies" }, { "region": "china", "exposure": "Medium", "rationale": "Payments and services are already digital on platform firms and state systems; independent testing and consent are the gap" }, { "region": "indo-pacific", "exposure": "High", "rationale": "South-East Asian states are linking instant payment systems; archipelagos and Pacific islands gain most from remote access" }, { "region": "south-asia", "exposure": "High", "rationale": "India supplies the model and much of the open software; neighbours with large benefit programmes have the most to gain" }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Gulf states have capital and digital government; elsewhere conflict and weak audit limit the gain" }, { "region": "africa", "exposure": "High", "rationale": "The largest gap between paper delivery and what is possible, with wide mobile money use to build on" }, { "region": "latin-america", "exposure": "High", "rationale": "Brazil's instant payment system is the regional reference; large informal sectors raise both the tax gain and the resistance" }, { "region": "russia-eurasia", "exposure": "Medium", "rationale": "States can build the systems quickly; weak independent oversight makes rights-respecting operation the hardest condition to meet" } ], "indicators": [ { "name": "Adults with a digital identity that can be used to authenticate online", "source": "World Bank ID4D Global Dataset", "threshold": "above 90 per cent of adults", "cadence": "irregular" }, { "name": "Adults who made or received a digital payment in the past year", "source": "World Bank Global Findex Database", "threshold": "above 80 per cent of adults", "cadence": "about every three years" }, { "name": "Online service provision and e-participation scores", "source": "United Nations E-Government Survey", "threshold": null, "cadence": "every two years" }, { "name": "Maturity of core government systems and shared platforms", "source": "World Bank GovTech Maturity Index", "threshold": "entry to the highest maturity group", "cadence": "irregular" }, { "name": "Tax revenue as a share of GDP and published tax gap estimates", "source": "IMF Government Finance Statistics; national revenue authorities", "threshold": "tax gap estimate falling for two consecutive years", "cadence": "annual" }, { "name": "Public contracts published as open data", "source": "Open Contracting Partnership; national procurement portals", "threshold": null, "cadence": "continuous" }, { "name": "Data protection law in force with an independent regulator", "source": "UNCTAD Data Protection and Privacy Legislation Worldwide", "threshold": "law in force before the switch", "cadence": "updated as laws change" }, { "name": "Authentication failure rate and grievance cases by population group", "source": null, "threshold": "failure rate for any group more than twice the national rate", "cadence": "monthly" } ], "compounds": { "triggers": [ { "id": "S08", "note": "Automated case handling removes clerical and intermediary work in the adopting state" }, { "id": "S04", "note": "Concentrated identity and payment systems raise the consequence of concealed access" }, { "id": "S19", "note": "Patient identification, records and payment systems support preventive treatment at scale" }, { "id": "S20", "note": "Identity, consent records and payment systems support targeted vaccination and compensation" }, { "id": "S16", "note": "Public digital identity and payments deliver vouchers, credit and advice to smallholders without intermediaries." } ], "triggered_by": [ { "id": "S11", "note": "Fiscal release tied to transparent procurement and credible budgets finances the switch" }, { "id": "S10", "note": "Emergency transfers during a pandemic force a state to build delivery systems" }, { "id": "S07", "note": "Relief payments after a disaster expose paper delivery and create a mandate to replace it" }, { "id": "S12", "note": "digital trade and traceability rules push members to adopt interoperable public digital systems" }, { "id": "S20", "note": "Vaccination registers and consent records demonstrate interoperable public digital systems in use." } ], "amplified_by": [ { "id": "S12", "note": "Mutual recognition of digital trade rules and traceability rewards interoperable systems" } ], "triggered_by_other": [ "An audit finding or benefit payment scandal that discredits paper delivery", "A regional payment-link agreement that requires interoperable domestic systems" ], "amplifying_trends": [ "Digital public infrastructure", "Public-sector AI adoption", "State capacity & delivery", "Data protection & digital rights", "Algorithmic accountability & bias", "Financial inclusion", "Corruption & state capture", "Digital language representation gaps" ] }, "open_questions": [ "Whether a programme that a government chooses belongs in a library of events, and which date marks the point at which it has occurred.", "Whether 'can use' should be measured by enrolment, by successful use or by an independent survey, since the three give different coverage figures.", "Whether a 25 per cent reduction in the tax compliance gap is achievable within two years, given that the evidence outside value added tax is thin.", "How the national impact level should treat a state in which delivery improves and rights protections weaken at the same time." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Displaced agents and officials who controlled files **resist the transfer of records** through courts and stoppages. The government holds the switch to published tests.", "economic": "The tax compliance gap narrows **by a quarter** and benefit delivery time falls 80 per cent. Intermediaries lose most of their fee income within a year.", "social": "**Assisted offline access** serves the adults the digital route fails: older manual workers, minority-language speakers and people without a phone.", "technological": "Identity, payments and consent-based data exchange run as **interoperable public systems**. Automated eligibility decisions need review before and after deployment.", "legal": "A data protection authority **able to refuse the state**, and a right to redress, decide whether operation respects rights.", "environmental": "Direct environmental effects are small. The systems need **continuous power and connectivity**, so outages from heat, flood or storm test the offline route." }, "regions": { "north-america": "Federal and state systems are fragmented and private payment networks are entrenched. The gain is real but **institutional resistance is strong**.", "europe": "Most services are already digital. The remaining gain is **inclusion and interoperability** across borders and agencies.", "china": "Payments and services already run on platform firms and state systems. The gap is **independent testing and consent**.", "indo-pacific": "South-East Asian states are linking instant payment systems. **Archipelagos and Pacific islands** gain most from remote access and depend most on the offline route.", "south-asia": "**India supplies the model** and much of the open software. Neighbours with large benefit programmes have the most to gain.", "gulf-middle-east": "Gulf states have capital and digital government. Elsewhere in the region **conflict and weak audit** limit the gain.", "africa": "**The largest available gain**, built on wide mobile money use. Identity coverage, connectivity and language coverage are the constraints.", "latin-america": "Brazil's instant payment system is the regional reference. **Large informal sectors** raise both the tax gain and the resistance.", "russia-eurasia": "States can build the systems quickly. **Weak independent oversight** makes rights-respecting operation the condition least likely to be met." }, "evolution": { "lead_indicators": "Digital identity covers above **90 per cent of adults** and digital payments above 80 per cent. A data protection law with an independent regulator is in force.", "triggers": "The audit office publishes **independent security and inclusion tests**, a legal condition of the switch. The government then moves its principal payments and administrative services to public systems.", "immediate": "Benefits, public salaries, taxes and licences move to the new route within months. **Assisted counters handle 11 per cent** of transactions in the first year.", "post_immediate": "Median benefit delivery falls from 20 days to four. About 60,000 agents lose most of their fee income and **resist through courts and stoppages**; officials delay record transfers.", "stabilisation": "Within two years 90 per cent of adults use the services and **the tax compliance gap narrows by a quarter**. A third year of contested operation follows.", "long_term": "Procurement and service decisions leave auditable records; gatekeepers lose discretion. The gain is reversible: it holds while **the offline route stays staffed** and the regulator can refuse the state." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 2, "L10y": 3, "impact_systemic": 1, "impact_national": 4, "confidence": "medium" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Digital public infrastructure leapfrog: the event is now a tested switch to inclusive operation within two years, with likelihood lowered, onset set to months and resistance from displaced intermediaries added." } ], "citation": "GINC (2027). Scenario S18 A public service platform reaches inclusive operation, Scenario Library v0.5. scenarios.ginc.org/scenarios/public-service-leap" }, { "id": "S19", "slug": "chronic-disease-advance", "title": "Affordable preventive treatments reduce chronic illness", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "E", "short_title": "Chronic disease advance", "thematics": [ "demographics-human-capital", "economic-security-supply-chains", "ai-cyber-digital" ], "likelihood_type": "systemic", "likelihood_note": "Likelihood is that of the full event: trial confirmation of the effect and licensing that makes treatment affordable in most regions within two years of the results.", "scores": { "likelihood_2y": { "band": 3, "rationale": "The components exist. The SELECT trial showed a 20 per cent reduction in major cardiovascular events from one medicine in 2023 and polypill trials reported 24 and 34 per cent. Generic semaglutide launched in India in March 2026. The full event also needs confirmatory trials of a low-cost combination and licences covering most regions. Trials of that size rarely report and license within two years, which holds the rating at Possible." }, "likelihood_10y": { "band": 4, "rationale": "Over ten years the main patents on current metabolic medicines lapse in most large markets and outcome trials now in progress report. The precedent from statins, antiretrovirals and hepatitis C antivirals is that effective medicines become cheap within a decade of proof. The uncertain part is a combined effect of 30 per cent with selection by biomarkers, which keeps the rating at Likely and not higher." }, "impact_systemic": { "level": 3, "rationale": "Cardiovascular disease caused about 17.9 million deaths in 2019 on World Health Organization estimates, and more than 500 million adults live with diabetes on International Diabetes Federation estimates. A 30 per cent reduction in complications among treated patients, with 15 per cent fewer avoidable admissions and higher working-age participation, shifts health and labour capability in many nations. The output effect builds slowly and is partly offset by pension costs: Significant, not Major." }, "impact_national": { "level": 4, "rationale": "Scored on human welfare and essential services, the highest dimensions reached. In a highly exposed nation with a heavy cardiometabolic burden and working primary care, heart attacks, strokes, kidney failure and amputations fall by close to a third among treated patients and hospital demand is restructured. Pension and care assumptions are reset. The change is Major but leaves the structure of the economy intact." }, "confidence": { "level": "low", "reason": "Trial evidence supports the effect size, but adherence, uptake and the speed of licensing are uncertain. One panel member rated two-year likelihood a band lower and systemic impact a level higher." }, "priority": 12, "tier": "II", "source": "model-panel-v0.5" }, "scorecard": { "onset": "months", "duration": "5 years", "warning": "months", "scope": "global", "origin": "accidental (scientific and commercial)", "external_support": "partial", "policy_response": "current plans executed", "recovery_horizon": "structural" }, "summary": "Large trials establish that a low-cost combination of metabolic treatments and biomarker-guided prevention reduces major cardiovascular and diabetes complications by 30 per cent among eligible patients. Broad licensing and regional production make treatment affordable in most nations within two years. Health systems that adopt it reduce avoidable hospital admissions by 15 per cent over five years and raise working-age participation. To capture the gain a nation must identify eligible patients, sustain primary care and change payment incentives. Longer healthy lives alter pension and workforce assumptions. Providers that depend on treating preventable complications lose revenue, and populations that primary care does not reach fall further behind.", "distribution": { "gains": [ "People with or at high risk of cardiovascular disease, type 2 diabetes and kidney disease", "Health systems with strong primary care and patient registers", "Employers and public finances, through fewer absences and higher working-age participation", "Generic and regional medicines manufacturers holding licences", "Unpaid carers, most of them women, released from caring for relatives with complications" ], "loses": [ "Hospitals and specialist providers paid by the admission or procedure for preventable complications", "Dialysis operators and suppliers of devices and medicines for late-stage disease", "Originator firms whose branded metabolic medicines lose pricing power", "Pension funds, annuity providers and ageing states that priced on shorter lives", "Populations without access to primary care, who fall further behind" ] }, "narrative": { "dateline": "November 2034", "text": "The two trials reported within six weeks of each other in the spring of 2028. Together they had followed 64,000 adults in 29 countries for four years. Patients selected by a short panel of blood and urine markers and given a daily combination of off-patent and newly licensed metabolic medicines had 30 per cent fewer heart attacks, strokes, cases of kidney failure and amputations than those given usual care. The effect held across income groups and in both sexes.\n\nThe price mattered as much as the result. The rights holders agreed non-exclusive licences covering 140 countries before the end of 2028. By early 2030 manufacturers in India, China, Brazil, Egypt and South Africa were supplying the combination at under US$6 a month. The marker panel ran on equipment that most district laboratories already had.\n\nWhat followed divided nations by their health systems more than by their income. Where primary care held a register of patients and was paid for keeping them well, eligible adults were called in, tested and started on treatment within months. Community health workers and pharmacists did most of the monitoring, supported by decision software. In those systems avoidable admissions for cardiovascular and diabetic complications were 15 per cent lower in 2034 than in 2029, and disability claims among people aged 50 to 64 had fallen. More women were in paid work, in part because fewer were caring for a relative after a stroke.\n\nWhere hospitals were paid by the admission and primary care was thin, the medicines reached pharmacies and went little further. Uptake followed the ability to pay for a consultation. Several middle-income nations recorded a widening gap in cardiovascular deaths between cities and rural districts, and between insured and uninsured workers.\n\nThe fiscal effects arrived in a different order from the health effects. Finance ministries booked lower hospital spending slowly, because beds that emptied were filled from waiting lists. Actuaries moved faster. Mortality tables revised in 2032 added about a year to projected life expectancy at 60 in adopting nations, and pension schemes that had assumed otherwise reported larger deficits. Four governments brought forward legislation on pension age. Dialysis operators and cardiac surgery centres closed capacity, and two listed hospital groups restructured their debt.\n\nBy late 2034 the question put to health ministers had changed. It was no longer whether the treatment worked or what it cost. It was why a neighbouring nation with a lower income had cut its stroke admissions by a fifth while their own had not moved." }, "anchors": [ { "shock_id": "glp-1-medicines-2021", "date": "2021–2026", "event": "GLP-1 medicines", "what_happened": "Demand outran supply for several years at prices beyond most health budgets. The SELECT trial, reported in 2023, found that semaglutide reduced major cardiovascular events by 20 per cent among 17,604 adults with overweight or obesity and established cardiovascular disease. Generic semaglutide launched in India in March 2026.", "calibrates": "One metabolic medicine has already delivered two thirds of the assumed effect. Price and supply, not efficacy, held back scale." }, { "shock_id": "scandinavian-simvastatin-survival-study-1994", "date": "1994", "event": "Scandinavian Simvastatin Survival Study", "what_happened": "A trial of 4,444 patients with coronary heart disease found that simvastatin reduced deaths from all causes by 30 per cent over a median of 5.4 years. Statins later lost patent protection and became some of the most widely prescribed medicines in the world.", "calibrates": "An effect of 30 per cent from a medicine that became cheap has a precedent. Population uptake took about two decades, not two years." }, { "shock_id": "cardiovascular-polypill-trials-2019", "date": "2019–2023", "event": "Cardiovascular polypill trials", "what_happened": "The PolyIran trial of 6,838 adults found in 2019 that a four-drug polypill reduced major cardiovascular events by 34 per cent over five years. The SECURE trial of 2,499 patients after a heart attack found a 24 per cent reduction in 2022. The World Health Organization added polypills to its Model List of Essential Medicines in 2023.", "calibrates": "The assumed effect sits inside trial results for low-cost combinations. Use stayed low after the trials: evidence alone does not produce adoption." }, { "shock_id": "egypt-hepatitis-c-campaign-2018", "date": "2018–2023", "event": "Egypt hepatitis C screening and treatment campaign", "what_happened": "Egypt screened about 50 million adults in seven months from October 2018 and treated about four million people with locally made generic antivirals, at a small fraction of the US launch price of US$84,000 a course. The World Health Organization confirmed in 2023 that Egypt had reached gold tier status on the path to elimination.", "calibrates": "Licensing, local production and mass identification of patients can be completed inside two years by a middle-income state that organises for it." }, { "shock_id": "combination-antiretroviral-therapy-1996", "date": "1996 onward", "event": "Combination antiretroviral therapy", "what_happened": "Combination therapy turned HIV from a fatal condition into a chronic one in high-income nations from 1996. Originator prices stood above US$10,000 per patient per year until an Indian generic manufacturer offered triple therapy at US$350 in 2001. Access in Africa lagged by about a decade.", "calibrates": "The access gap between nations when licensing and regional production come late. The scenario assumes that gap closes within two years." }, { "shock_id": "who-global-report-on-hypertension-2023", "date": "September 2023", "event": "WHO global report on hypertension", "what_happened": "The World Health Organization's first global report on hypertension estimated that about 1.3 billion adults had the condition, that nearly half did not know it and that about one in five had it under control, although effective generic medicines cost little.", "calibrates": "Counter-anchor. Cheap and effective prevention already exists and is not delivered. Identification and primary care, not the medicine, set the size of the gain." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": "3 years", "severe": "5 years", "extreme": "5 years" }, "onset": { "major": "years", "severe": "months", "extreme": "months" }, "warning": { "major": null, "severe": "months", "extreme": null }, "scope": { "major": "regional", "severe": "global", "extreme": "global" }, "origin": { "major": null, "severe": "accidental (scientific and commercial)", "extreme": null }, "external_support": { "major": "none", "severe": "partial", "extreme": "full" }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "current plans executed", "extreme": "best practice" }, "recovery_horizon": { "major": null, "severe": "structural", "extreme": null } }, "specific": [ { "name": "Reduction in major cardiovascular and diabetes complications among eligible treated patients", "default": "30 per cent", "range": "15 to 40", "unit": "per cent", "note": "Relative to usual care, as established by the trials." }, { "name": "Time from trial results to affordable supply in most nations", "default": "2 years", "range": "1 to 6", "unit": "years", "note": "Set by licence terms, regulatory approval and regional production." }, { "name": "Monthly cost of treatment per patient in licensed markets", "default": "US$6", "range": "US$3 to US$30", "unit": "US$ per month", "note": "Medicines and marker testing. Excludes the cost of consultations." }, { "name": "Share of eligible adults identified and on treatment after five years in adopting systems", "default": "60 per cent", "range": "20 to 80", "unit": "per cent", "note": "The main determinant of the national gain. Set by registers, primary care staffing and payment." }, { "name": "Reduction in avoidable hospital admissions in adopting systems over five years", "default": "15 per cent", "range": "5 to 25", "unit": "per cent", "note": null }, { "name": "Share of adults aged 40 and over who are eligible", "default": "25 per cent", "range": "15 to 40", "unit": "per cent", "note": "Depends on the marker thresholds that regulators adopt." }, { "name": "Gain in projected life expectancy at 60 in adopting nations after five years", "default": "1 year", "range": "0.5 to 2", "unit": "years", "note": "Drives the revision of pension, annuity and long-term care liabilities." } ] }, "transmission": [ "Large trials confirm that the combination, given to patients selected by biomarkers, reduces major cardiovascular and diabetes complications by 30 per cent.", "Rights holders grant broad non-exclusive licences. Regional manufacturers enter and the monthly cost falls to a level that public programmes and households can pay.", "Health systems with patient registers and funded primary care identify eligible adults and start treatment. In systems without them, uptake follows the ability to pay.", "Heart attacks, strokes, kidney failure and amputations fall among treated patients. Avoidable admissions fall 15 per cent over five years in adopting systems.", "Fewer people leave work through illness or to give care. Working-age participation and employment-linked revenue rise.", "Hospitals, dialysis operators and suppliers paid for treating complications lose volume. Payment systems that reward admissions slow the shift of budgets to prevention.", "Mortality assumptions are revised. Pension, annuity and long-term care liabilities rise and governments reopen pension age and contribution rules.", "Differences in outcomes between and within nations widen and become a measure of government performance." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Low", "channel": "fitter recruitment pool and fewer medical discharges; no direct effect on force structure" }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "Medium", "channel": "primary care sites, laboratories and medicine distribution carry the roll-out; hospital capacity is repurposed" }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "medicines manufacturing, biomarker diagnostics, clinical decision software and regulatory science" }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "licence terms, procurement, patient registers and payment reform decide whether the gain is captured" }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "healthy life years, working-age participation and the supply of primary care staff" }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "Medium", "channel": "unequal access within nations; licence terms and supply become instruments of health diplomacy" }, { "dimension": "Economic", "domain": "macro-financial", "load": "High", "channel": "lower acute care costs and higher labour supply against larger pension and long-term care liabilities" }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "Medium", "channel": "generic and regional producers gain; branded metabolic medicines and complication-treatment industries contract" }, { "dimension": "Economic", "domain": "energy-resources", "load": "Low", "channel": "modest change in food demand where appetite-reducing treatments are widely used" } ], "stakeholders": { "government": { "exposure": "Health budgets, payment systems, pension rules and the capacity of primary care to find and follow eligible patients", "actions": [ "Secure licences, regulatory approval and supply early, through pooled procurement where the national market is small", "Fund patient registers and pay primary care for patients kept well, not for admissions", "Re-test pension, disability and long-term care projections on revised mortality assumptions" ], "watch": [ "Share of eligible adults identified and on treatment, by district and income group", "Avoidable admissions for diabetes and heart failure", "Licence coverage and the lowest tender price achieved" ], "relevance": 3 }, "technology": { "exposure": "Medicines manufacturers, diagnostics makers and suppliers of clinical decision and monitoring software", "actions": [ "Qualify regional production and marker testing to regulatory standard ahead of demand", "Build decision support that works in clinics with few staff and intermittent connectivity", "Keep exchange of patient data consent-based and auditable" ], "watch": [ "Regulatory approvals of generic combinations and marker panels", "Supply of active pharmaceutical ingredients", "Adherence rates recorded in monitoring systems" ], "relevance": 4 }, "investors": { "exposure": "Pension funds, annuity writers and health insurers repricing longevity and claims; hospital, dialysis and branded medicine revenues in decline; generic producers and primary care operators growing", "actions": [ "Test pension and annuity books against faster mortality improvement at ages 50 to 80", "Review holdings whose revenue depends on admissions and procedures for preventable complications", "Assess sovereign exposure to age-related spending under longer lives" ], "watch": [ "Mortality tables and the pricing of longevity risk transfers", "Licence terms and patent expiry dates", "Payment reform from fee-for-service to capitation or payment for outcomes" ], "relevance": 4 }, "public": { "exposure": "Access to testing and treatment through primary care; longer working lives and later pensions; fewer households providing care after a stroke or amputation", "actions": [ "Take up testing where it is offered and ask which eligibility thresholds apply", "Hold local health services to published uptake and outcome figures", "Plan household finances for a longer working life" ], "watch": [ "Coverage and co-payment decisions", "Pension age proposals", "Differences in uptake between districts and income groups" ], "relevance": 4 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "High obesity and diabetes prevalence and payment by the procedure: a large health gain and a large loss of provider revenue." }, { "region": "europe", "exposure": "High", "rationale": "Strong primary care in many states supports capture; ageing populations make the pension revision large." }, { "region": "china", "exposure": "High", "rationale": "Very large diabetic and hypertensive population, domestic manufacturing and rapid ageing; hospital-centred care has to change." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Japan and Korea face the sharpest longevity pressure; South-East Asian and Pacific states have rising diabetes and uneven primary care." }, { "region": "south-asia", "exposure": "High", "rationale": "Diabetes and heart disease strike early in working life; the generic manufacturing base supplies other regions." }, { "region": "gulf-middle-east", "exposure": "High", "rationale": "Diabetes prevalence is some of the highest in the world; the means to pay exist but care is hospital-centred." }, { "region": "africa", "exposure": "Medium", "rationale": "The burden is rising from a lower base in young populations; thin primary care and diagnostics limit capture." }, { "region": "latin-america", "exposure": "High", "rationale": "High obesity and diabetes, notably in Mexico; segmented health coverage decides who is reached." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "High cardiovascular mortality among working-age men gives a large potential gain; primary care and access are weak." } ], "indicators": [ { "name": "Results of cardiovascular and kidney outcome trials of oral and combination metabolic medicines", "source": "ClinicalTrials.gov; The New England Journal of Medicine; The Lancet", "threshold": "Two independent trials reporting a reduction of 25 per cent or more in major events", "cadence": "As published" }, { "name": "Voluntary licences for metabolic medicines and the countries they cover", "source": "Medicines Patent Pool; company licensing announcements", "threshold": "Non-exclusive licences covering more than 100 countries", "cadence": "As announced" }, { "name": "Lowest monthly price of generic GLP-1 and SGLT2 medicines by country", "source": "PAHO Strategic Fund reference prices; national tender results", "threshold": "Below US$10 a month in most middle-income markets", "cadence": "Annual" }, { "name": "Regulatory approvals of generic and combination metabolic medicines from regional producers", "source": "National regulators, including CDSCO in India, ANVISA in Brazil and SAHPRA in South Africa", "threshold": null, "cadence": "As published" }, { "name": "Listing of combination and metabolic medicines as essential medicines", "source": "WHO Model List of Essential Medicines", "threshold": "Listing of the combination for primary prevention", "cadence": "Every two years" }, { "name": "Share of adults with hypertension and diabetes who are diagnosed, treated and controlled", "source": "WHO Global Health Observatory; NCD Risk Factor Collaboration", "threshold": "Control above 50 per cent of those with the condition", "cadence": "Periodic" }, { "name": "Avoidable hospital admissions for diabetes and congestive heart failure", "source": "OECD Health Statistics", "threshold": "A fall of more than 5 per cent in two years in an adopting system", "cadence": "Annual" }, { "name": "Life expectancy at 60 and the mortality assumptions used by pension schemes", "source": "UN World Population Prospects; Human Mortality Database", "threshold": "Upward revision of half a year or more between editions", "cadence": "Every two years" } ], "compounds": { "triggers": [ { "id": "S20", "note": "licensing practice, regulatory reliance and regional medicines production built here raise readiness for a distributed outbreak response" }, { "id": "S02", "note": "longevity revisions add to the pension liabilities of ageing sovereigns; a contributing pressure, not a cause alone" } ], "triggered_by": [ { "id": "S17", "note": "AI-directed research shortens the development of the combination and of the marker panel" }, { "id": "S18", "note": "identity and consent-based data exchange make patient registers and recall workable at national scale" }, { "id": "S11", "note": "released fiscal capacity lets indebted states fund primary care and procurement" }, { "id": "S20", "note": "Regional production, broad licensing and primary care delivery proven in the outbreak carry over to preventive treatments." } ], "amplified_by": [ { "id": "S08", "note": "the same low-cost AI agents support monitoring and recall where health workers are scarce" } ], "triggered_by_other": [ "Patent expiry of leading metabolic medicines in major markets", "A pooled procurement decision by several large public purchasers" ], "amplifying_trends": [ "Biomarker-guided precision medicine", "AI drug development", "Chronic disease & obesity burden", "Digital & AI-supported care", "Healthy lifespan divergence", "Health workforce scarcity", "Regional medicines manufacturing", "Age-related fiscal liabilities" ] }, "open_questions": [ "Whether an onset of months is right. Trial results and licences arrive within months, but the 15 per cent fall in admissions takes five years: the record may describe a shock followed by a trend.", "How to score a nation where the treatment is licensed and affordable but primary care cannot identify or follow patients: as failing to gain, or as losing ground to its neighbours.", "Whether longer healthy lives count as a load on macro-financial capability or a gain to it, given that pension liabilities and labour supply both rise.", "Africa is rated Medium on present burden and age structure. That may understate exposure where diabetes and hypertension are rising fastest and are mostly undiagnosed." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "Health ministers are judged against neighbours: they are asked **why outcomes differ when the price does not**. Pension age returns to the legislature.", "economic": "Admissions fall and participation rises, but **pension and annuity liabilities are revised up** and providers paid for treating complications lose revenue.", "social": "Treated patients have 30 per cent fewer major complications. **Uptake follows access to primary care**, so gaps within nations widen where care is thin.", "technological": "The advance is a combination of known and new medicines **guided by a low-cost marker panel**, supported by decision software and made by regional producers.", "legal": "**Broad non-exclusive licences** set the price. Regulators must approve the combination, fix eligibility thresholds and permit pharmacists and health workers to monitor patients.", "environmental": "Environmental effects are small. **Food demand shifts modestly** where appetite-reducing treatments are widely used, and new production sites add pharmaceutical effluent to control." }, "regions": { "north-america": "High obesity and diabetes give a large health gain. **Providers paid by the procedure** lose revenue and resist payment reform.", "europe": "Strong primary care in many states supports capture. Ageing populations make the **pension revision large**.", "china": "A very large diabetic and hypertensive population and domestic manufacturing. **Hospital-centred care has to change** as the population ages quickly.", "indo-pacific": "Japan and Korea face the **sharpest longevity pressure**. South-East Asian and Pacific states have rising diabetes and uneven primary care.", "south-asia": "Diabetes and heart disease **strike early in working life**, so the labour gain is large. The generic manufacturing base supplies other regions.", "gulf-middle-east": "Diabetes prevalence is some of the highest in the world. The means to pay exist, but **care is hospital-centred**.", "africa": "The burden is rising from a lower base in young populations. **Thin primary care and diagnostics** limit how much of the gain is captured.", "latin-america": "High obesity and diabetes, notably in Mexico. **Segmented health coverage** decides who is reached and who is not.", "russia-eurasia": "High cardiovascular mortality among **working-age men** gives a large potential gain. Weak primary care and constrained access hold it back." }, "evolution": { "lead_indicators": "**Two independent trials** report major events cut by 25 per cent or more. Non-exclusive licences cover more than 100 countries and generic prices fall below US$10 a month.", "triggers": "Two trials following 64,000 adults in 29 countries show **30 per cent fewer** heart attacks, strokes, cases of kidney failure and amputations among biomarker-selected patients on a low-cost combination.", "immediate": "Rights holders agree non-exclusive licences covering 140 countries within months. Within two years regional manufacturers supply the combination at **under US$6 a month**.", "post_immediate": "Systems with patient registers and funded primary care start eligible adults on treatment within months. Elsewhere **uptake follows the ability to pay** and gaps within nations widen.", "stabilisation": "Over five years adopting systems cut **avoidable admissions by 15 per cent** and working-age participation rises. Dialysis operators and cardiac surgery centres close capacity; hospital savings arrive slowly.", "long_term": "Revised mortality tables add **about a year to projected life expectancy at 60**. Pension deficits grow, governments legislate on pension age and outcome gaps between nations measure government performance." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 3, "L10y": 4, "impact_systemic": 3, "impact_national": 4, "confidence": "low" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Biomedical breakthrough wave: narrowed to low-cost prevention of cardiovascular and metabolic disease, with onset moved from years to months, regional exposure revised and the HIV, malaria and cancer vaccine elements removed." } ], "citation": "GINC (2027). Scenario S19 Affordable preventive treatments reduce chronic illness, Scenario Library v0.5. scenarios.ginc.org/scenarios/chronic-disease-advance" }, { "id": "S20", "slug": "outbreak-defence-succeeds", "title": "A live outbreak proves rapid distributed pandemic defence", "version": "0.5.0", "status": "active", "orientation": "upside", "family": "E", "short_title": "Outbreak defence succeeds", "thematics": [ "resilience-crisis-preparedness", "demographics-human-capital", "economic-security-supply-chains", "information-integrity-social-cohesion" ], "likelihood_type": "systemic", "likelihood_note": "The likelihood is joint: a pathogen with pandemic potential must emerge within the horizon and the response must then succeed end to end.", "scores": { "likelihood_2y": { "band": 2, "rationale": "Two conditions must coincide. Published estimates put the annual probability of a pandemic on the scale of COVID-19 near 2 per cent, so a qualifying outbreak within two years is itself unlikely. The response has never run end to end: the fastest first authorisation on record took about 11 months, the pathogen-sharing annex to the 2025 agreement was left for later negotiation and regional manufacturing is at an early stage. The joint probability sits within 0.2 to 1 per cent." }, "likelihood_10y": { "band": 3, "rationale": "Over ten years the chance of a qualifying outbreak rises to roughly one in five on the same estimates, and platform, surveillance and manufacturing capacity should mature. Success still requires speed, equitable supply and public consent together, and the record of 2020–2022 shows that each can fail separately. Assuming the response succeeds in about one outbreak in six gives a joint probability near 3 per cent, inside the 1 to 5 per cent band." }, "impact_systemic": { "level": 4, "rationale": "Rated as the scale of change against the unmitigated case. The IMF projected the cumulative output loss from COVID-19 at about US$13.8 trillion through 2024, and Lloyd's puts the five-year probability-weighted loss from a human pandemic at US$13.6 trillion. Avoiding most of a loss of that order in participating economies is worth 2.5 to 5 per cent of global output over five years. The gain is not universal: non-participants keep much of the loss." }, "impact_national": { "level": 4, "rationale": "For a highly exposed participating nation the highest dimensions are human welfare and essential services: hospitals stay within staffed capacity, ordinary care and schooling continue and no general lockdown is imposed. Output in several large European economies fell by more than 7 per cent in 2020, and avoiding most of such a loss is a major change. It is not rated transformative because the outbreak still causes deaths, local closures and postponed care." }, "confidence": { "level": "low", "reason": "All three panel members gave the same ratings, but the mechanism has never operated end to end and the likelihood is the product of two uncertain estimates." }, "priority": 8, "tier": "III", "source": "model-panel-v0.5" }, "scorecard": { "onset": "weeks", "duration": "1 year", "warning": "days (first cluster to confirmed novel pathogen)", "scope": "global", "origin": "natural", "external_support": "full (for participating nations)", "policy_response": "best practice", "recovery_horizon": "months" }, "summary": "A novel pathogen with pandemic potential is detected through shared surveillance and triggers a pre-agreed international response. Validated diagnostics reach participating nations within 30 days of sequence sharing and an effective vaccine receives its first authorisation within 100 days. Regional manufacturers supply enough doses to protect priority groups on every continent within six months. Early treatment and targeted vaccination keep staffed hospital demand below surge capacity in participating nations, and none imposes a general lockdown. The outbreak is contained, not prevented. The test is equitable delivery, trusted consent and regulatory coordination. States outside the network receive countermeasures months later and still experience substantial disruption.", "distribution": { "gains": [ "Populations of nations inside the surveillance and supply network", "Health workers and older adults, who are protected first", "Children and students, whose schools stay open", "Travel, services and trade-dependent economies", "Regional manufacturers holding standing capacity contracts" ], "loses": [ "States outside the sharing and allocation network, which lose relative security", "Nations that receive doses but cannot deliver them or secure consent", "Suppliers that depended on scarcity pricing for vaccines, tests and protective equipment" ] }, "narrative": { "dateline": "June 2032", "text": "The first cluster of severe respiratory illness was reported by a provincial hospital on 9 March 2031. The genome was uploaded to the shared sequence database four days later and matched no known human pathogen. Under the protocol agreed in advance, the notice went at the same time to international health authorities, regional disease control agencies and 31 contracted manufacturing sites on six continents. Vaccine candidates on two platforms were designed within a week. Validated diagnostic tests reached reference laboratories in 140 nations by day 27. Trial networks that had been funded between outbreaks enrolled their first volunteers in week three. Wastewater sampling showed the pathogen in 14 countries by week six, and those results set the order in which first doses were allocated. Regulators in the participating nations reviewed a single rolling dossier, and the first authorisation was granted on day 96. Manufacturing had started at risk before authorisation. By the end of month six, regional plants had supplied enough doses for health workers, older adults and other priority groups in every participating nation, about 1.4 billion people. No participating government restricted exports, because no single producer supplied more than a fifth of the total. An existing antiviral, repurposed in the first month, reduced admissions among those treated early. The outbreak was not prevented. About 6 per cent of the population of participating nations was infected in the first year, and staffed hospital demand peaked at about 80 per cent of surge capacity in the cities affected first. Elective care was postponed for several weeks in those cities. Schools closed for two to three weeks in fewer than 20 jurisdictions. No participating nation ordered a general lockdown, and borders stayed open with testing at departure. Forecasts of the loss to world output, made in April 2031 at more than 3 per cent, were revised by December to less than half of one per cent. Outcomes differed between nations, and the differences followed capability. Some participating nations received doses on schedule but lacked the vaccinators and cold chain to deliver them outside the main cities, and coverage of priority groups there was below 40 per cent at six months. In others, supply and delivery were adequate but uptake stayed near half of eligible adults, after organised campaigns alleged that the vaccine had been approved without proper testing. Hospitals in those places exceeded capacity for several weeks. States outside the network fared worst. Those that had not shared samples or joined the allocation arrangement received authorised doses four to six months later, and several imposed prolonged movement restrictions in the interval. Suppliers that had expected scarcity pricing sold at the pre-agreed price, and producers of protective equipment were left with unsold stock. The reviews published in 2032 recorded that vaccine design had taken days and that nearly all the remaining time had gone on trials, regulatory coordination, batch release and delivery. They also recorded that consent and public trust had determined outcomes as much as supply had." }, "anchors": [ { "shock_id": "covid-19-vaccines-2020", "date": "2020", "event": "COVID-19 vaccines", "what_happened": "The SARS-CoV-2 genome was published on 10–11 January 2020. One mRNA candidate was designed within days and entered a first human trial on 16 March 2020. The first emergency authorisation of a vaccine tested in large trials was granted in the United Kingdom on 2 December 2020, about 11 months after the sequence.", "calibrates": "The baseline to improve on. Design took days; trials, review and manufacturing took the remaining months. The scenario requires that interval to fall by about two thirds." }, { "shock_id": "100-days-mission-2021", "date": "2021", "event": "100 Days Mission", "what_happened": "The United Kingdom's G7 presidency proposed, and G7 leaders endorsed in June 2021, a goal of having safe and effective diagnostics, therapeutics and vaccines ready within 100 days of a pandemic threat being identified. CEPI adopted the 100-day vaccine goal in its own strategy.", "calibrates": "The source of the 100-day authorisation threshold at Standard Severe. It is a stated goal, not a demonstrated capability." }, { "shock_id": "who-pandemic-agreement-2025", "date": "20 May 2025", "event": "WHO Pandemic Agreement", "what_happened": "The World Health Assembly adopted the agreement by 124 votes in favour, with 11 abstentions and none against. It covers prevention, surveillance, supply and pathogen access with benefit sharing. The annex setting the detailed rules for pathogen access and benefit sharing was left for further negotiation.", "calibrates": "The governance the scenario depends on. Adoption shows broad agreement in principle; the unfinished annex and incomplete participation show why some states remain outside the network." }, { "shock_id": "mrna-technology-transfer-hub-2021", "date": "2021 onward", "event": "mRNA technology transfer hub", "what_happened": "WHO and partners established a technology transfer hub at Afrigen in Cape Town in 2021. Afrigen produced a laboratory-scale mRNA COVID-19 vaccine candidate in early 2022, and the programme shares the technology with 15 partner manufacturers in low- and middle-income countries.", "calibrates": "The starting point for regional manufacturing. Transfer of know-how has been shown; sustained commercial-scale output on every continent, which the six-month supply threshold requires, has not." }, { "shock_id": "ebola-ring-vaccination-2015", "date": "2015–2019", "event": "Ebola ring vaccination", "what_happened": "A ring vaccination trial in Guinea in 2015 found no Ebola cases, from ten days after vaccination, among contacts vaccinated immediately. The vaccine was used in the 2018–2020 outbreak in the Democratic Republic of the Congo, where more than 300,000 people were vaccinated, and was first licensed in November 2019.", "calibrates": "Targeted vaccination can contain a live outbreak. It also shows the interval without a prepared platform: four years from field trial to licence." }, { "shock_id": "mpox-response-in-africa-2022", "date": "2022–2024", "event": "Mpox response in Africa", "what_happened": "Wealthy nations vaccinated at-risk groups during the 2022 global outbreak, while African countries where mpox had long been endemic received almost no doses. Africa CDC and WHO declared emergencies on 13 and 14 August 2024, and the first donated doses reached the Democratic Republic of the Congo in September 2024.", "calibrates": "The counter-anchor on equitable delivery. An authorised vaccine existed, and supply still reached the most affected region about two years after wealthy nations. The scenario requires the opposite outcome." } ], "parameters": { "common": { "severity": { "major": "major", "severe": "severe", "extreme": "extreme" }, "duration": { "major": null, "severe": "1 year", "extreme": null }, "onset": { "major": null, "severe": "weeks", "extreme": null }, "warning": { "major": null, "severe": "days (first cluster to confirmed novel pathogen)", "extreme": null }, "scope": { "major": "regional", "severe": "global", "extreme": "global" }, "origin": { "major": null, "severe": "natural", "extreme": null }, "external_support": { "major": "partial", "severe": "full (for participating nations)", "extreme": "full" }, "concurrency": { "major": null, "severe": "standalone", "extreme": null }, "policy_response": { "major": null, "severe": "best practice", "extreme": null }, "recovery_horizon": { "major": null, "severe": "months", "extreme": null } }, "specific": [ { "name": "Days from sequence sharing to validated diagnostics in participating nations", "default": "30 days", "range": "14 to 60", "unit": "days", "note": "Validated means independently assessed and available to national reference laboratories." }, { "name": "Days from sequence sharing to first vaccine authorisation", "default": "100 days", "range": "60 to 200", "unit": "days", "note": "Initial or emergency authorisation by a stringent regulator, on efficacy data. The COVID-19 baseline was about 11 months." }, { "name": "Months to priority-group doses on every continent", "default": "6 months", "range": "4 to 12", "unit": "months", "note": "Priority groups are taken as 20 per cent of the population of participating nations: health workers, older adults and the clinically vulnerable." }, { "name": "Peak staffed hospital demand as a share of surge capacity in participating nations", "default": "80 per cent", "range": "60 to 100", "unit": "per cent", "note": "Above 100 per cent the scenario fails and the event is S10." }, { "name": "Nations participating in the surveillance and supply network", "default": "140", "range": "60 to 190", "unit": "nations", "note": "Participation means sharing samples and sequences and accepting the allocation arrangement." }, { "name": "Uptake among priority groups offered vaccination", "default": "75 per cent", "range": "40 to 90", "unit": "per cent", "note": "Set nation by nation in practice; it depends on trust and on consent procedures." }, { "name": "Pathogen severity before countermeasures", "default": "as in S10: infection fatality ratio of 0.5 per cent", "range": "options: milder / more severe", "unit": null, "note": "The specification does not fix severity. The S10 pathogen is assumed so that the two scenarios can be compared." } ] }, "transmission": [ "A novel pathogen emerges. Shared genomic and wastewater surveillance detects it, and sequences and samples are shared within days.", "The pre-agreed response activates: platform vaccine candidates are designed, trial networks enrol and validated diagnostics reach participating nations within 30 days.", "Regulators review a common rolling dossier, manufacturing starts at risk and the first authorisation is granted within 100 days.", "Regional manufacturers on every continent supply priority-group doses within six months under an agreed allocation, which removes the incentive to restrict exports.", "Health workers, cold chains and credible public communication turn supply into consented vaccination, and early treatment reduces hospital admissions.", "Staffed hospital demand stays below surge capacity in participating nations, so ordinary care, schooling, work and trade continue without general lockdowns.", "Nations with weak delivery or low trust capture less of the gain. States outside the network receive countermeasures months later and face prolonged restrictions.", "Scarcity-dependent suppliers lose pricing power, and the standing capacity needs continued financing once the outbreak ends." ], "loading": [ { "dimension": "Hard", "domain": "defence-security", "load": "Medium", "channel": "Military logistics and medical units support delivery; biosecurity and assessment of the pathogen's origin." }, { "dimension": "Hard", "domain": "strategic-infrastructure", "load": "High", "channel": "Laboratories, wastewater sampling, cold chain, hospitals and health data systems carry the response." }, { "dimension": "Hard", "domain": "critical-technology", "load": "High", "channel": "Vaccine platforms, sequencing, diagnostics and biomanufacturing set the speed of the response." }, { "dimension": "Soft", "domain": "government-effectiveness", "load": "High", "channel": "Public health command, regulatory reliance, at-risk procurement and allocation decisions under time pressure." }, { "dimension": "Soft", "domain": "human-capital", "load": "High", "channel": "The health workforce delivers vaccination and early treatment in every district." }, { "dimension": "Soft", "domain": "influence-cohesion", "load": "High", "channel": "Public trust and consent decide uptake; sample and data sharing depend on relations between states." }, { "dimension": "Economic", "domain": "macro-financial", "load": "Medium", "channel": "At-risk purchase financing and standing capacity payments; avoided fiscal and output losses." }, { "dimension": "Economic", "domain": "industry-trade-supply", "load": "High", "channel": "Regional production, open trade in countermeasures and supply of vials, lipids and reagents." }, { "dimension": "Economic", "domain": "energy-resources", "load": "Low", "channel": "Reliable power for cold chain and plants; no material demand shock." } ], "stakeholders": { "government": { "exposure": "Membership of the surveillance and supply network, the speed of regulatory decisions, delivery capacity and public trust decide how much of the gain a nation captures.", "actions": [ "Join pathogen-sharing and allocation arrangements before an outbreak and test them in exercises", "Fund trial networks, laboratories and manufacturing capacity between outbreaks under standing contracts", "Agree regulatory reliance procedures and settle consent, liability and compensation rules in advance" ], "watch": [ "Time from sample collection to sequence sharing", "Regional manufacturing capacity under contract", "Vaccine confidence and uptake among priority groups" ], "relevance": 4 }, "technology": { "exposure": "Platform developers, sequencing laboratories, diagnostics makers and health data operators supply the response and are bound by pre-agreed price and licensing terms.", "actions": [ "Maintain surge capacity and validated processes under standing contracts", "Complete technology transfer to regional manufacturers before an outbreak", "Build data exchange that regulators in several jurisdictions can rely on" ], "watch": [ "Results of platform readiness exercises", "Lead times for lipids, vials, enzymes and reagents", "Batch release times at regional plants" ], "relevance": 5 }, "investors": { "exposure": "Avoided losses in travel, services and sovereign credit; capacity payments to manufacturers; loss of scarcity pricing for some suppliers.", "actions": [ "Value standing capacity contracts as well as outbreak sales", "Assess sovereign and sector exposure by network membership and delivery capacity", "Test holdings in scarcity-dependent suppliers against pre-agreed pricing" ], "watch": [ "Preparedness financing commitments and disbursements", "Terms of advance purchase and capacity reservation agreements", "Travel and services activity in affected regions" ], "relevance": 4 }, "public": { "exposure": "Health, work, schooling and ordinary care continue where vaccination is delivered and accepted; outcomes are worse where it is not.", "actions": [ "Take up vaccination and early treatment when offered, on informed consent", "Use official guidance and local health services as the source of information", "Accept that health workers and priority groups are vaccinated first" ], "watch": [ "Official guidance on eligibility and local closures", "Local hospital capacity reports", "Published safety monitoring results" ], "relevance": 5 } }, "regions": [ { "region": "north-america", "exposure": "High", "rationale": "Platform developers and large manufacturers supply the network; contested trust in health authorities limits uptake." }, { "region": "europe", "exposure": "High", "rationale": "Manufacturing depth and cross-border regulation; ageing populations make the avoided hospital demand large." }, { "region": "china", "exposure": "High", "rationale": "Large manufacturing base and dense cities; the gain depends on timely sharing of samples and data." }, { "region": "indo-pacific", "exposure": "High", "rationale": "Strong surveillance and experience of earlier outbreaks; trade-dependent economies gain from open borders." }, { "region": "south-asia", "exposure": "High", "rationale": "Vaccine production in India supplies several regions; density and thin hospital capacity raise the stakes at home." }, { "region": "gulf-middle-east", "exposure": "Medium", "rationale": "Capital to purchase and small populations; a mobile migrant workforce and mass gatherings test delivery." }, { "region": "africa", "exposure": "High", "rationale": "Regional plants change the supply position; vaccinators and cold chain outside main cities are the constraint." }, { "region": "latin-america", "exposure": "High", "rationale": "Regional producers in Brazil and Argentina reduce import dependence; primary care delivery and trust set the result." }, { "region": "russia-eurasia", "exposure": "High", "rationale": "Domestic vaccine capability but partial participation in sharing arrangements; exclusion delays access for neighbours as well." } ], "indicators": [ { "name": "Days from sample collection to public sequence sharing for novel pathogens", "source": "GISAID", "threshold": "Under 14 days", "cadence": "continuous" }, { "name": "Progress against the 100 Days Mission scorecard for diagnostics, therapeutics and vaccines", "source": "International Pandemic Preparedness Secretariat", "threshold": null, "cadence": "annual" }, { "name": "Vaccine manufacturing capacity and completed technology transfers by region", "source": "CEPI, WHO", "threshold": "Commercial-scale capacity on every continent", "cadence": "annual" }, { "name": "Ratification of the WHO Pandemic Agreement and adoption of its pathogen access and benefit-sharing annex", "source": "WHO", "threshold": "60 ratifications, the number required for entry into force", "cadence": "annual" }, { "name": "Self-assessed International Health Regulations core capacities", "source": "WHO State Party Self-Assessment Annual Reporting", "threshold": null, "cadence": "annual" }, { "name": "Preparedness financing committed and disbursed", "source": "Pandemic Fund", "threshold": null, "cadence": "each funding round" }, { "name": "Doctors, nurses and midwives per 10,000 population", "source": "WHO National Health Workforce Accounts", "threshold": "Below 44.5 per 10,000, the WHO shortage threshold", "cadence": "annual" }, { "name": "Public confidence in vaccines and in health authorities", "source": "Vaccine Confidence Project, Wellcome Global Monitor", "threshold": null, "cadence": "periodic" } ], "compounds": { "triggers": [ { "id": "S19", "note": "Regional production, broad licensing and primary care delivery proven in the outbreak carry over to preventive treatments." }, { "id": "S18", "note": "Vaccination registers and consent records demonstrate interoperable public digital systems in use." } ], "triggered_by": [ { "id": "S17", "note": "Faster candidate design, automated experiments and shorter validation." }, { "id": "S13", "note": "Lower barriers between the largest powers ease sample, data and technology sharing." }, { "id": "S11", "note": "Released fiscal capacity funds health workers, laboratories and cold chain in distressed states." }, { "id": "S18", "note": "Identity and consent-based data exchange support allocation, vaccination records and safety monitoring." }, { "id": "S19", "note": "licensing practice, regulatory reliance and regional medicines production built here raise readiness for a distributed outbreak response" } ], "amplified_by": [ { "id": "S10", "note": "The same class of pathogen. The more severe the pathogen, the larger the gain inside the network and the loss outside it." } ], "triggered_by_other": [ "Natural emergence of a novel pathogen with pandemic potential" ], "amplifying_trends": [ "Adaptable vaccine platforms", "Pathogen emergence pressure", "Global health governance", "Regional medicines manufacturing", "Public communication in crisis", "Adaptive regulation", "Health workforce scarcity", "Conspiracy movements & science denial" ] }, "open_questions": [ "Whether this is a scenario in its own right or the best-practice policy response to S10, and how the two should be run together without counting the same outbreak twice.", "The specification does not fix the severity of the pathogen. The size of the gain depends on it, and this record assumes the S10 pathogen for comparability.", "How to rate a nation that is inside the network but cannot deliver doses or is not believed by its public. Regional exposure does not separate these cases from nations outside the network.", "Whether priority-group supply on every continent within six months is consistent with regional manufacturing capacity as it stands, particularly in Africa." ], "commentary": null, "overview": { "source": "model-panel-v0.5", "lenses": { "political": "The response ran on **a protocol agreed in advance**, not on negotiation during the outbreak. States that had not shared samples or joined the allocation waited four to six months longer.", "economic": "Forecast losses to world output were revised from more than 3 per cent to **less than half of one per cent**. Suppliers expecting scarcity pricing sold at the pre-agreed price.", "social": "Uptake stayed **near half of eligible adults** where campaigns alleged inadequate testing, and hospitals there exceeded capacity. Elsewhere schools closed for two to three weeks in a few jurisdictions.", "technological": "Vaccine design took days and **the first authorisation came on day 96**. Trials, batch release and delivery took nearly all the remaining time.", "legal": "Regulators reviewed **a single rolling dossier**, and agreed allocation rules meant no participating government restricted exports. Consent and liability rules were settled in advance.", "environmental": "The pathogen emerged naturally and was tracked by **wastewater sampling in 14 countries** by week six. The success does not reduce the pressure of emergence." }, "regions": { "north-america": "Platform developers and large manufacturers supply the network. **Public trust decides uptake**, and the gain is smaller where consent is contested.", "europe": "Manufacturing depth and **regulatory reliance across borders** shorten authorisation. Ageing populations make the avoided hospital demand large.", "china": "A large manufacturing base and dense cities. **Timely sharing of samples and data** decides whether it gains inside the network or waits outside it.", "indo-pacific": "Strong surveillance and **experience of earlier outbreaks** support early detection. Trade-dependent economies gain most from open borders.", "south-asia": "**Vaccine production in India** supplies several regions. Density and thin hospital capacity make the avoided surge large at home.", "gulf-middle-east": "Capital to purchase and small populations limit exposure. **A mobile migrant workforce** and mass gatherings are the test of delivery.", "africa": "**Regional plants supply doses on schedule**, which did not happen in 2021. Vaccinators and cold chain outside main cities limit how much is delivered.", "latin-america": "Regional producers in Brazil and Argentina reduce dependence on imports. **Delivery through primary care** and public trust set the result.", "russia-eurasia": "Domestic vaccine capability exists, but **partial participation in sharing arrangements** delays access and raises the cost for neighbours." }, "evolution": { "lead_indicators": "Sequences of novel pathogens are shared **in under 14 days**. Commercial-scale vaccine manufacturing exists on every continent and the pandemic agreement reaches 60 ratifications.", "triggers": "A novel respiratory pathogen emerges naturally. Its genome is shared four days after the first reported cluster, which **activates the pre-agreed international response**.", "immediate": "Validated diagnostics reach participating nations within 30 days and trial networks enrol in week three. **The first vaccine authorisation is granted on day 96**; manufacturing has started at risk.", "post_immediate": "Within six months regional plants supply **priority-group doses on every continent**. Hospital demand peaks at 80 per cent of surge capacity and no participant orders a general lockdown.", "stabilisation": "The outbreak is contained within a year; forecast output loss falls below half of one per cent. **States outside the network** receive doses four to six months later.", "long_term": "Reviews find that **consent and public trust decided outcomes** as much as supply. Scarcity-dependent suppliers lose pricing power and the standing capacity needs continued financing once the outbreak ends." } }, "history": [ { "edition": 2027, "rank": null, "L2y": 2, "L10y": 3, "impact_systemic": 4, "impact_national": 4, "confidence": "low" } ], "changelog": [ { "version": "0.5.0", "date": "2026-10-09", "change": "Rebuilt in the second pass from Hundred-day pandemic defence: likelihood lowered one band at both horizons, thresholds added for diagnostics, six-month supply and hospital capacity, loads for strategic infrastructure, industry and defence raised and the losers named." } ], "citation": "GINC (2027). Scenario S20 A live outbreak proves rapid distributed pandemic defence, Scenario Library v0.5. scenarios.ginc.org/scenarios/outbreak-defence-succeeds" } ]