CORONAVIRUS STATISTICS AND NATIONAL COMPARISONS IN THE PANDEMIC

We have been told repeatedly that it is far too early to compare and assess different national policy responses to the covid-19 pandemic. And the apparent cacophony of slightly different models, all working off slightly different data sets, or slightly different starting assumptions about the behaviour of the virus, appears to confirm that view.

At one level of analysis this will be true. If the virus is going to be with us on a semi-permanent basis, and in the absence of effective vaccines or treatments, it is certainly possible that particular approaches will, post event, prove to have resulted in more or fewer deaths. For example, if the virus were to become more virulent, countries that had allowed, by accident or design, more cases to spread in 2020, may do better in 2021 and later.

Conversely, if a vaccine is developed, then the opposite will be true, and actions that have reduced aggregate infections and deaths to date will have been further vindicated. It is also true that it will be some time before statisticians manage to work around all the confusing factors associated with different data gathering practices and definitions, and are able to use what is generally seen as the most useful indicator – excess deaths.

However there currently appears to be one very simple way of describing a complex reality that, with currently available data, captures a very large part of the variance in numbers of deaths, at least between comparable nations. It is the following simplification, which depends only on the basic concept of exponential growth and decline.

Unchecked, a virus spreads with a basic reproduction ratio known as R₀. For this virus R₀ is currently believed to be at least 3.0 and in the early phases of a national epidemic (less than say 15% infected) this results in an exponential growth of new cases, doubling every few days.  Introducing severe restrictions on person to person contact reduces the ratio below 1.0.  This leads to a rate of decline which is still exponential, but with ratios above 0.5, the rate of decline will be much lower than the previous rate of growth. The shape of the new infections curve will be that of an escarpment, rising like a cliff on one side and falling slowly away on the other.

If we assume that all European societies are sufficiently similar (including in their health systems) that they are likely to have very similar values of R₀ both in the initial unchecked phase and in the restriction phase, then they should end up with a very similar relationship between total excess deaths and the number of infections at the date of lockdown.

This is what the first chart[1] (Financial Times online, 27^th May) appears to show. The number of infections at the lockdown milestone is a very good indicator of total deaths (to date). There are of course plenty of caveats, both on the quality of the numbers and the use of a logarithmic scale which tends to compress variations about the norm. Even so the relationship is strong.

Total population size, and infections as a population percentage, is irrelevant in this context (at least while the percentage is still small). Chile has three times the population of Austria, and Germany more than seven times that of Belgium, but they can reasonably be shown as close together in the chart. The key indicator Is the absolute number. Moreover some larger countries, like Chile and Germany, managed to take the lockdown decision while their absolute number of cases was still small, and a number of Asian countries, not shown here, will have done the same.

The implication is clear. Early decisive action was what counted. Using whatever it takes -  including test, track  and trace – to maintain exponential decline  is crucial. Comparing international, regional or local values of R₀, or the responses of different health systems, will have to wait until we have much fuller information.

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[1] There are of course caveats to this chart. These are not final “end of epidemic” figures. Some of the initial data may be questionable. Estimates of infections at lockdown will be based partly on backcasting from later reported figures. Inclusion of the USA may be particularly inappropriate at this stage. Given the virus reached different parts of the continent at very different dates, and lockdown responses varied considerably in nature and timing between states, the USA appears to show a longer and different shaped trajectory for the disease, and to be significantly further from the point where a final total can be estimated.

SAVING THE PLANET DOES NOT NECESSARILY COST THE EARTH

Beware Fake News  on the economic and other choices we have to make.

There are longstanding debates about the economic costs of moving the world away from its addiction to the fossil fuels that are the prime source of the greenhouse gases causing temperature and climate change. There will be renewed attention to the challenges as the world slowly emerges from the covid-19 pandemic.

There are many elements to this discussion, from estimates of aggregate cost to macro-economic issues of reviving economies through Green investment. Some are discussed in a forthcoming article in the Oxford Review of Economic Policy.[1]   Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?

However, the propaganda battle has also begun, and so have the invented stories. On 7^th May the Financial Times commissioned an exchange of views between Christina Figueres, a former leader of the UN climate secretariat, and Benjamin Zycher of the American Enterprise Institute. Can we tackle both climate change and Covid-19 recovery?

Taxes at $30 for a gallon of petrol? Really?

Zycher, after a fairly conventional if disputable assertion of essential connections between economic growth and energy consumption, claimed that the Intergovernmental Panel on Climate Change (IPCC) advocates carbon taxes for 2030 with a midrange equivalent to $30 per gallon of petrol.

I have always been a natural enthusiast for Twyman’s principle, also attributed to the distinguished statistician, the late Andrew Ehrenburg. The “principle” is that any “interesting” statistic is probably wrong. In other words, if a number looks wrong, then quite likely it is wrong. This one was specially “interesting”; my own familiarity with energy statistics, and energy costs and prices, indicated an order of magnitude error.

If it looks wrong, there’s a good chance it is wrong!

Quite apart from the numbers, the attribution of this statement to the IPCC was intrinsically improbable, as the IPCC does not take policy positions. Its function is to report and summarise the literature of thousands of scientific and other publications, including economic modelling. It tells policymakers what we know and don’t know about the risks related to climate change (a bit like the role of the UK’s SAGE in the current pandemic). Its processes are carefully controlled by national governments, and it emphatically does not “do” policy recommendations, or advocacy.

I decided to do a quick check.  Much of the polemic was based on the supposed extremism, and implied naivety or hostility to humanity, of environmental campaigners, exemplified by “$30 per gallon”. It seemed quite important to understand how the author had come to this number. If the alleged advocacy was not correct, it seemed to be a particularly egregious example of dishonest reporting and misinformation.

First this meant chasing up the citation[2], given as Chapter 2 of the IPCC Special Report: Global Warming of 1.5 ºC. That report also has a Summary for Policymakers. Inspection of that summary did not reveal any mention of carbon taxes or carbon prices. If IPCC were really engaging in advocacy, it is in a summary for policymakers that one would expect to find it. It was not there.

I turned to Chapter 2, which appeared to be where Zycher had extracted his dubious statistic. The chapter consists largely of a technical summary of modelling methods, and hundreds of modelling outputs, all heavily qualified as to assumptions, meaning and interpretation. It does discuss the theoretical impact of carbon prices, but the relevant section, around page 78 of Chapter 2 emphasises the “real world distinction … between implementable and notional [model] carbon prices …” and that any “price … estimated in modelling studies needs to be compared with what is feasible”.

Turning to climate policy discussions, some proposals for more aggressive carbon pricing do indeed favour CO2 prices (or taxes) higher than today’s, typically of $100-200 per tonne. The same section of the IPPC report does identify evidence in support.  “Literature has identified a range of factors … that support [social cost] SCC values above $100.”  But for petrol that would be around 90 cents per gallon, an amount almost lost in the noise, not Zycher’s hysteria-inducing 30 dollars. Focusing on petrol prices in an electric future seems inappropriate but is presumably intended to link back to an everyday price with which most people are familiar.

If anything, environmental campaigners might be concerned that carbon taxes, even at the quite aggressive level suggested above, have so little impact on pump prices to consumers. An amount of 90 cents (or pence) a gallon is less than European governments already levy in tax, and within the range of the normal fluctuations in fuel prices in recent years. It is widely assumed among energy economists that taxing petrol is not a particularly effective instrument for promoting low carbon transport, and that more of the solution lies with electric (or hydrogen) vehicles. A more common financial concern is that governments will be reluctant to face the loss of the fuel tax revenues that stem from petrol and diesel.

Setting up straw men is, I am afraid, a standard tactic for this camp in the climate debate and the wider culture wars. This was a prime example.

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[1] Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change? Cameron Hepburn, Brian O’Callaghan, Nicholas Stern, Joseph Stiglitz and Dimitri Zenghelis. Forthcoming in the Oxford Review of Economic Policy 36(S1).

[2] Chapter 2: Mitigation pathways compatible with 1.5°C in the context of sustainable development. https://report.ipcc.ch/sr15/pdf/sr15_chapter2.pdf .