World Peace Bonds: setting the scene

I'm writing a book about World Peace Bonds - the application of the Social Policy Bond concept to war and political violence. This is my draft introduction to the book. 

Market incentives to end war: World Peace Bonds

We are, understandably, not quite rational about war. We regard its opposite, peace, as an ideal: as unattainable as it is desirable; something to be worshipped from afar, and something that will never actually happen. War appears to many of us, as it did to the ancient Greeks, to be part of the natural order of things.

This book is different. It assumes nothing about either the inevitability of conflict, or its causes. It will take as its starting point only the reality of conflict. It will not assume that the idealists and ideologues, the politicians, the generals, and the men of religion are the best people to bring peace to the world, but neither will it assume that none of them have any contribution to make. It will propose not a single solution to the horror of violent political conflict, but rather a way of encouraging people to explore an array of diverse, adaptive solutions. We do not need to know the exact nature of these solutions in advance, but we can put in place a mechanism that will encourage and reward people for finding them. Conflict Reduction Bonds ae a new financial instrument designed, in effect, to contract out to whoever is most capable, the achievement of lasting world peace. They aim to bridge the gap between humanity’s undoubted flare and genius and the seemingly remote ideal of a world without war.

In the single year 2024 war directly killed 161 000 people;[1] about 0.27 percent of all world deaths. But this understates the potential for catastrophe: while fewer people have died in conflicts in recent decades than in most of the 20th century, three-quarters of all war deaths since 1800 happened in World Wars 1 and 2, and 90% in the biggest ten wars, which is why the downward trend in war deaths cannot be relied on to continue. As well, raw figures massively understate the suffering wars cause. Indirectly, armed political conflict kills many more.[2] In the 1990s 3.6 million people, most of them civilians, were killed in conflict.[3] In the entire 20th century, an estimated 191 million people lost their lives directly or indirectly as a result of conflict—and well over half of them were civilians.[4]  This amounts to about one in 22, or 4.5 per cent of all human deaths during that century. (Rough calculations suggest that this is a higher proportion of deaths attributable to conflict than in the 19th century.[5])

And, of course, war also maims and sickens people. It destroys social fabrics and coping mechanisms. As well, resources devoted to the military or to peacekeeping are unavailable for life-enhancing sectors of the world economy. World military expenditure rose to $2718 billion in 2024, meaning that spending has increased every year for a full decade, going up by 37 per cent between 2015 and 2024. Average military expenditure as a share of government expenditure rose to 7.1 per cent in 2024 and world military spending per person was the highest since 1990, at $334.[6] War traumatises non-combatants, and fear of war, fed by the endless accounts of war worldwide, adds to people’s anxiety, however distant they may be from current conflict. The possibility of war leads to underinvestment of people and resources in places that sorely need them. It accelerates the migration of blighted countries’ best and brightest to stable countries, governed by law.

Meanwhile the potential for violent political conflict, represented by nuclear weapons proliferation, is increasing. in January 2025, about 9614 were in military stockpiles for potential use. An estimated 3912 of those warheads were deployed with missiles and aircraft and the rest were in central storage. Around 2100 of the deployed warheads were kept in a state of high operational alert on ballistic missiles.[7] ‘The era of reductions in the number of nuclear weapons in the world, which had lasted since the end of the cold war, is coming to an end,’ said Hans M. Kristensen, Associate Senior Fellow with SIPRI’s Weapons of Mass Destruction Programme and Director of the Nuclear Information Project at the Federation of American Scientists (FAS). ‘Instead, we see a clear trend of growing nuclear arsenals, sharpened nuclear rhetoric and the abandonment of arms control agreements.’ Economic growth, the dissemination of current technology, and research into new technology will mean that access to weapons of mass destruction will widen still further. Now it is not only nation states, but also well-funded and well-organised terrorist groups that have the capability to acquire and use, for example, atomic or chemical weapons. The need for new solutions to violent political conflict, as urgent as it is today, is fast becoming an absolute necessity.

War therefore is a major social, health and economic problem. It’s not our only problem, of course. For instance, the World Health Organisation estimates that in 2023 there were around 263 million acute cases of malaria resulting in 600 000 deaths.[8] Of all humankind’s many troubles, however, war is perhaps the most disheartening because it is not a natural disaster or an unavoidable ‘Act of God’; its casualties result from human beings’ deliberate use of force on one another.

It is worth briefly pointing out why world peace is a worthwhile goal. Essentially it is because the costs of conflict almost always outweigh the ‘benefits’. These costs and benefits are to be interpreted broadly; they include, in no particular order, the humanitarian, social, economic, environmental and distributional impacts of violent political conflict. But there are benefits too, and they are not limited to those that flow directly from military spending. They also include the freedoms won from tyrannies deposed by conflict. There are instances, such as the war to defeat Hitler, where the benefits of waging a successful war are almost universally thought to outweigh the very grievous costs. It is arguable that any means of reducing conflict should not discourage wars that generate such net benefits. But it would also be far better to avoid the circumstances that precipitated ‘necessary’ or ‘just’ wars on violent regimes ever arising in the first place. These invariably comprise the use of force on populations either within or outside the regimes’ borders. Ending war, permanently, then does not mean only the temporary cessation of violence: the goal should be the sustained achievement of world peace.

Most people need no convincing that violent political conflict adds to the burden of human misery. These include especially the countless millions currently caught up in hostilities, who would like nothing more than to live their lives undisturbed by conflict. As well, it is safe to assume that a large proportion of those in governments, religious bodies, non-governmental organisations (NGOs), and other positions of authority also prefer peace to conflict. Tragically though, there are many in positions of power or influence who are half-hearted about peace; others who feel threatened by it, and others who, for whatever reason, actively promote violence. Conflict often serves the ends of a minority of actors, who may profit from instability and violence within a country that often precedes inter-state conflict.[9] This book will take as it as axiomatic that any ‘benefits’ arising from violent political conflict enjoyed those who foment violence are heavily outweighed by the costs imposed on the far more numerous victims.

This book is entirely focussed on that desired outcome. It will introduce a means of rewarding successful achievement of world peace, rather than activities that are supposedly aimed at achieving this goal. It will describe and explain a new financial instrument, World Peace Bonds aimed at stimulating an array of adaptive ways of ending war, each appropriate to the highly variable circumstances of particular conflicts.

Definitions of conflict are crucial, and will be discussed in more detail below. But, in general, ‘violent political conflict’ refers both to wars between different states and to domestic political conflict, while ‘peace-building’ and ‘conflict reduction’ or ‘conflict minimisation’ can be taken as synonymous.

[1] Uppsala Conflict Data Program, https://ucdp.uu.se/year/2024, sighted 3 July 2025.

[2] Civil wars kill and maim people-long after the shooting stops, Ghobarah H., Huth P., Russett B. (Draft 29 Aug 2001). Center for Basic Research in the Social Sciences. One statistical assessment, based on a cross sectional analysis, indicates that the total disability-adjusted life years lost in 1999 owing to the indirect effects of military conflicts occurring between 1991 and 1997 was about the same as the number lost owing to the direct effects of all wars in 1999.

[3] Saferworld, UK http://saferworld.org.uk.

[4] World Report on Violence and Health, World Health Organization, September 2002.

[5] For a list of compilations of violent conflicts, see Violent Conflicts 1400 A.D. to the Present in Different Regions of the World, Peter Brecke, The Sam Nunn School of International Affairs, Georgia Institute of Technology Atlanta, GA, United States, http://www.inta.gatech.edu/peter.html.

[6] SIPRI Fact sheet April 2025, https://www.sipri.org/sites/default/files/2025-04/2504_fs_milex_2024.pdf.

[7] SIPRI, 16 June 2025, https://www.sipri.org/media/press-release/2025/nuclear-risks-grow-new-arms-race-looms-new-sipri-yearbook-out-now

[8] World Health Organisation, Global Health Observatory, https://www.who.int/data/gho/data/themes/malaria (sighted July 2025).

[9]  “Rivalry, Instability, and the Probability of International Conflict.” Daxecker, Ursula E.Conflict Management and Peace Science 28, no. 5 (2011): 543–65. http://www.jstor.org/stable/26275345.

Cesspits are also stable: how to bring about peace in the Middle East

Aljazeera reports:  

[German] Chancellor Friedrich Merz urged both Israel and Iran to avoid any “further escalation”. Both sides should refrain from steps that could “destabilise the entire region,” said Merz... 

Australia said it was “alarmed by the escalation between Israel and Iran”. “This risks further destabilising a region that is already volatile. We call on all parties to refrain from actions and rhetoric that will further exacerbate tensions,” said Foreign Minister Penny Wong. How the world is reacting to Israel attacks on Iran nuclear, military sites, Aljazeera.com, 13 June 2025 

One great advantage of a Social Policy Bond regime is that it would oblige us to choose real, meaningful goals. Cesspits are generally stable, but a social environment as stable a cesspit is hardly aspirational.  

 

 

 

 

 

Ahh, stability: a cesspit in New Zealand 

 

I'm convinced that, for most of us, a stable Middle East is not a goal. A peaceful, prosperous, enlightened Middle East would surely be a more desirable goal for the vast majority of the region's population, but getting there will mean change. Instability is a necessary condition for movement towards our goal, but it's not sufficient. It needs to be guided and that is where a Middle East Peace Bond regime could help. 

Now peace in the Middle East - a lasting, warm peace - might seem an outlandish goal, and so it is if we take a short-term view. But a regime would have as its goal a peace sustained for, say four decades. How to achieve that? No single approach will work by itself. My suggestion is that we put in place incentives to research, experiment and implement the most promising of a range of diverse approaches, always with the ultimate goal of a lasting peace in mind. 

While robust definitions of 'peace' will need to be thought through, a long-term peace means more than the absence of war. We could issue Middle East Peace bonds redeemable only when there had been no significant numbers of people in the region killed, injured or forced to flee their homes during our four decades. That would necessitate not just the minimisation of casualties, but elimination of the threat of such casualties: only a warm peace would bring that about, circumventing the need for a definition of such a concept. 

Middle East Peace Bonds would be an application of the Social Policy Bond concept. They would, in effect, contract out the achievement of long-term peace to those who are most efficient at bringing it about. Bondholders have incentives explore and implement new, more diverse options than are currently being undertaken, and they could divert funding into the most promising of these. They would have more latitude for action than existing - failing - efforts undertaken by governments. For example, bondholders could subsidise intermarriage between members of different religious or territorial communities. They could sponsor school exchange visits, sports matches or the broadcasting of peaceful propaganda. They could arrange for the most virulent warlords and preachers of hate to take one-way, first-class journeys to luxurious holidays in remote resorts with limited access to communication facilities. There are well-meaning and hard-working bodies working today in imaginative and helpful ways (see here for example), but they lack resources: bond regime would channel funds into the most promising of these bodies. 

Whatever holders of bonds targeting war and terrorism do, they will have successes and failures. But they will also have incentives to terminate projects that are failing and to refine and replicate their successes - to be efficient, in other words. Government has no such direct incentive. It cannot offer direct financial rewards for success, and its talent pool is limited, partly for that reason. It has a short-term focus, too often resorting to military action, and it would get into trouble if it advocated things like intermarriage, or sponsored sybaritic retirement for the region's warmongers. Its actions tend to be one-size-fits-all, slow to adapt and advocated mainly because they have been done before, rather than because of their putated efficiency: government will always prefer tried, tested and failed solutions to innovative, promising, and successful initiatives that entail relinquishing some of their powers. 

The field of conflict is one area where the private sector can and should be given the chance to operate more freely. Sadly, it is largely private, short-term incentives - to arms dealers and fanatics - that keep conflict going. A well-funded bond regime would redress the balance. 

Under a Middle East Peace Bond regime, government could still play a role in defining our peace goal and raising some of the revenue for its achievement, but I am more convinced now that the private sector will have to take the initiative. That could mean a combination of NGOs, interested corporations, philanthropists and ordinary citizens. Probably all of these, with perhaps some neutral governments, would be needed to raise sufficient funding. The goal of long-term, warm peace, would benefit tens of millions and if that means making the current iteration of the region less stable than a cesspit, then so be it. 

Blundering toward catastrophe

 Gillian Tett interviews Rafael Grossi, head of the International Atomic Energy Agency: 

...Russia's full-scale invasion of Ukraine has put civilian nuclear plants in the line of fire; meanwhile Vladimir Putin has repeatedly threatened to use nuclear weapons. "This is worrying because it normalises this," Grossi admits with masterly understatement. "In the past, this was quite taboo, but now people talk about tactical nuclear weapons like something which could be contained or permissible." Grossi also faces a nuclear-armed North Korea, rising tensions between India and Pakistan, both nuclear powers, and his "biggest preoccupation": Iran. Lunch with the FT, 'Financial Times', 7 June 2025

The taboo against threatening the use of nuclear weapons has been broken.  It now appears inevitable that, unless we are determined to establish long-term nuclear peace, the taboo against their use will also break. There are few incentives not to threaten use of nuclear weapons, and plenty of incentive to acquire them. We need to offer meaningful and effective incentives for people to do everything they can to deter the acquisition and use of nuclear weapons.     

For many of our social goals, one difficulty is reliably monitoring progress toward their achievement. That certainly applies to the Social Policy Bond concept - but not in the case of nuclear peace. Use of a nuclear weapon that kills, say, more than 500 people, or that creates a serious electromagnetic pulse, is something that we could unequivocally detect. There are other reasons why maintaining nuclear peace would be an ideal goal for the Social Policy Bond concept:

•     existing initiatives don't seem to be working,
•     the goal is long term, and
•     the goal is likely to require a multiplicity of diverse, adaptive approaches. 

There are bodies, including the IAEA, that are working toward nuclear peace either as their main activity or indirectly, but they are typically short of resources and - relatedly - have little financial incentive to succeed. 

Given that a nuclear conflict is one of the worst scenarios imaginable, dwarfing even our serious, urgent social and environmental problems, it's worth exploring new approaches to nuclear peace. I don't know a way out of any impending nuclear conflict, but what I can propose is that we offer incentives for people to find such ways. Rather than leave everything to the politicians, ideologues, military men and the war-gamers, or even the well-meaning, dedicated professionals at bodies such as the IAEA, we could encourage the issuing of Nuclear Peace Bonds that would be redeemed only when there has been a sustained period of nuclear peace. Backers would contribute to the funds for redemption of the bonds, which would occur only when nuclear peace, defined as, say, the absence of a nuclear detonation that kills more than 500 people (or a serious electromagnetic pulse) has been sustained for three decades. The bonds could be backed and issued by any combination of governments, international organisations, non-governmental organisations and philanthropists, and their funds could be swelled by contributions from the public.

Nuclear Peace Bonds could run in parallel with existing efforts. Indeed, it's likely to channel more resources into those existing bodies whose activities are most promising. It would also encourage new approaches, the precise nature of which we cannot and need not know in advance.

A Nuclear Peace Bond regime would reward those who achieve peace, whoever they are and however they do so. It’s an admittedly novel approach, but the relevant question is 'what is the alternative?'. The Doomsday Clock is currently at 89 seconds to midnight. 

Vortices of bureaucracy: the masonic model

A fascinating article about the United Nations confirms my thinking that any long-lasting conventional organisation, be it public- or private-sector, gradually loses sight of its initial mission, such that its over-arching goal becomes self-perpetuation: 

Over the past eight decades, the United Nations has expanded to encompass an alphabet soup of humanitarian agencies and subsidiary organs with colossal, overlapping ambitions, supported by layers and layers of middle managers. There are endless commissions and centers and conferences and committees, departments and offices and institutes and forums tangled up in abstruse rules and regulations and tasked with eliminating world hunger, sheltering displaced people, adjudicating international disputes, solving climate change, facilitating trade, reducing poverty, and much, much more. UNICEF, the World Health Organization, the International Monetary Fund: all are part of the United Nations. There is a Counter-Terrorism Committee and an Office of Counter-Terrorism; a Department of Peace Operations and a Department of Political and Peacebuilding Affairs. The organization has become so unwieldy that even its most well-meaning workers describe being caught in a culture of toxic inefficiency, hamstrung by problems of accountability, organization, and funding. “The U.N. is a vortex of bureaucracy,” Anadil Hossain, a former senior adviser at the U.N. Refugee Agency, told me. “Something needs to change. It’s embarrassing.”
...

Nondiplomatic employees told me that working at the United Nations had a way of changing them, too, by draining them of motivation. Good work, I heard again and again, was never rewarded, and bad work never punished. “The culture is really, really shocking,” said Salil Shetty, who directed the U.N. Millennium Campaign from 2003 to 2010. “It’s not based on performance and all that. It’s: How do you keep the bosses happy?” Amanda Chicago Lewis,  Wishful thinking, 'Harpers', dated June 2025

I think we need to disaggregate the ostensible aims of organisations like the UN from their other, more human functions. Very often, the two conflict. I'll explain:

I recognize the need of all humans to engage with each other, to discuss, argue, sing or dance together, to share our hopes, to be in fellowship with people who have a similar world view, to identify with symbols, ritual, hierarchy, a clan or tribe or an organisation; above all: to belong. So, while we might have expected that the economic and social shambles that was Marxism would expire with the old Soviet Union, it survives in China and elsewhere, not as an economic system, but as an extraordinarily potent ideology about an economic system. Freudian psychoanalysis, though discredited as a therapy, survives as a cult revolving around the life and work of Sigmund Freud.¹ There is not a single proven example of a visit to Earth by an alien spacecraft – yet opinion polls consistently show that more than half of adult Americans believe in such an event.² Members of such organisations may have some belief in their ostensible aims or underlying ideology but those fellowship benefits of belonging to a body of like-minded people are at least as important. 

The 'rightness' of such belonging, the elation and joy that come with satisfying a genuine human need, can lead participants in organisations to fail to see the organisation's malign effect on outsiders. Gareth Gore, in an interview, explains the origins and subsequent history of Opus Dei: 

The organization was founded by a Spanish Catholic priest, Josemaria Escrivá, in the 1930s in pre-civil war Spain, when society was deeply divided. He was born in northern Spain in 1902. The best way of getting a really good education in those days was by joining the church, joining the seminary. That really opened up your options. So he went to the seminary and he became a priest, but his passion really was law. For a long time he considered just leaving the priesthood entirely. He applied for various jobs.

But then one day, while he was on retreat, he had what he called a vision from God. He said that God had effectively spoken to him and given him the outlines of this new organization. He’d received this vision from God of how ordinary Catholics could better serve God in their ordinary lives.

... In the early 1930s, Spain was on the brink of civil war. The country is deeply divided. The workers have risen up against the monarchy. They’re demanding new rights for themselves. And—critically for this story—they’re beginning to turn their backs on the church.

And Escrivá, as a priest, as a conservative man, he’s appalled by this. He starts believing all of these conspiracy theories. He blames it on the communists, on the Bolsheviks, on the Jews and the Masons. And this organization that he’d founded just a few years earlier, on this quite benign philosophy of serving God through striving for perfection in your daily lives, begins to take on this sinister and deeply political hue. Gareth Gore, Opus Dei, embezzlement, and human trafficking, ARC, 21 January 2025

'How can this organisation', well-meaning, hardworking employees ask, 'which is so necessary to my well-being, possibly be corrupt, corrupting or destructive to society?' And so begins the movement away from its stated ideals and towards the enshrinement of self-perpetuation as its primary goal.

I think we'd all be better off by explicitly dividing the roles, such that we have the new type of organisation solely devoted to achieving our social goals, and other organisations that explicitly put our other human needs first. The ostensible reasons for our polarized, dysfunctional politics, are not so much about our goals, but about the ways we think they shall be best achieved. We could instead debate social and environmental outcomes, about which there is more consensus and more objectivity. My suggestion is that, in setting up a Social Policy Bond regime that would target our long-term social goals, explicitly and unwaveringly, we'd bring new organisations into being; organisations whose structure, composition and all activities would be subordinate to their targeted goal. I have written about this new sort of organisation here. This new type of organisation would, I believe, be the most efficient way of achieving our goals but because its composition would be fluid, its structure protean, and many of its activities short lived, would fail to satisfy our need for fellowship and belonging. 

To complement such loose collections of capabilities as these organisations would embody, I think we'd see more organisations solely devoted to satisfying our fellowship needs, with perhaps some occasional overspill into charitable works. These fellowship bodies could retain the name, symbols, buildings and initial membership of organisations, like the United Nations, that have failed in their ostensible aims, yet still fulfil their fellowship functions. 

There is a precedent, and it is the world of Freemasons. Some groups of working or 'operative' stonemasons began to allow non-masons into the guilds. Operative masonic lodges raised money by charging the gentry for admission to their "mysteries".  (See here.) The guilds and mysteries persisted after the great British and European cathedrals had been built. Operative masons declined in number; 'speculative' masons took over, and today there are around six million freemasons worldwide.

Could the governments of the United Nations, or members of Opus Dei or our politicians and everyone else with a vested interest in the power-structures to which they belong and from which they derive inspiration be persuaded to give up their dysfunctional organisations and divisive politics, and become 'speculative' policymakers? Social Policy Bonds would take on their current duties, while 'masonic' versions of the UN etc would fulfil their need for fellowship, ritual and hierarchy.

I think everyone - politicians and public - would be happier if our failing 'operative' organisations were nudged toward the 'speculative' role, and the real work of achieving our more vital and mundane social and environmental goals were, in effect, contracted out to motivated investors in Social Policy Bonds. 

References:

¹ See, for example, Final Analysis, by Jeffrey Masson, Harper Collins, 1990. 

² For the flying saucer myth, it will always be January 1950, Robert R Young, 'Skeptical Inquirer', volume 18, number 5, Fall 1994. 

Climate change: “The silence of these writers is dreadfully expressive”

Concluding his thorough and, to my mind, convincing argument against the findings of several researchers into the economics of climate change, David Barker writes: 

We are forced by this pattern of errors to consider the possibility that some of the body of research I have critiqued is less than honest. It appears to be the result of bias—implicit collaboration of authors, reviewers and editors to promote socially and politically acceptable ideas leading to conformity and suppression of alternative ideas. Additional evidence of bias in academia can be found in surveys of literature on the effect of climate change on the economy. Two recent surveys ... discuss hundreds of papers, including the papers I critiqued, but neither of them cite my critiques. In the 2020s, it is impossible that the authors of survey pieces like these would have been unaware of my work. The authors also knew that my critiques have not been answered. The irresponsibility of failing to provide a balanced review of the literature in these articles can only be explained by ideological bias. Reflection after five papers about climate change, David Barker, 'Econ Journal Watch', March 2025

I'm not sure which comes first: ideology or competition for funding or recognition. Either way, there are incentives in the academic world to be dishonest. When there's too much dishonesty or ideological bias (see here, for instance) then we see what we are experiencing now: a backlash against the entire scientific enterprise. 

My position on climate change doesn't rely on knowing whether it's actually happening or what's causing it. In that sense, it transcends ideology. We need to decide what aspects of the climate we want to target. Especially, we need to decide whether to focus its adverse impacts on human, animal and plant life, or to target such physical variables as area of sea ice, temperature, or some combination. Under a Climate Stability Bond regime, we could target an wide array of variables, each of which would have to fall within a stipulated range for a period of decades before the bonds would be redeemed. Investors in the bonds would have incentives to prioritise the efficiency with which research (along with all the other necessary steps) will help achieve our climate change goal, rather than the ideology or status of the relevant scientists, and to do so continually.

I've written copiously about climate change on this blog (here and here, for example) and there are links to my longer pieces on Climate Stability Bonds on my main website.

EVs and air pollution

Society and the environment are complicated. There are vast numbers of variables, feedback loops, and time lags, all of which make our current systems of regulation ineffective. Here's the Economist writing about electric road vehicles (EVs):

In addition to being less well regulated than exhaust fumes, non-exhaust particles are also less well studied. That is changing. One study published in February ... found that some brake-pad dust seems to be more damaging to dish-grown human lung cells than diesel-fume particles. This was in part because of its higher levels of copper, which can damage cells and DNA. Though exact figures are elusive, scientists estimate that EVs produce more of these non-exhaust particles than other cars. This is because their batteries make them heavier, causing them to generate more friction. Electric vehicles also cause air pollution, the 'Economist', 11 April 2025

Our knowledge of complex scientific relationships is always going to be incomplete and, most likely expanding. Failing to recognise that, leads to the sort of disastrous regulation that, in the UK, stimulated diesel consumption:

In 2001, the then Chancellor Gordon Brown introduced a new system of car tax aimed at protecting the environment. In actual reality it fostered a popular move towards highly polluting diesel cars - a trend which according to some experts has been associated with thousands of premature deaths a year.  Why officials in Labour government pushed 'dash for diesel', Martin Rosenbaum, bbc.co.uk, 16 November 2017

Our politicians need to resist the temptation to latch on to some relationship that they think they understand and regulate accordingly. The fact is that we simply don't know whether, for instance, EVs are better for the environment, just as Gordon Brown didn't really know whether diesel or petrol is worse for the environment. 

This is where Social Policy Bonds could help. The scientific facts change, along with our understanding of those facts. We need policies that can respond effectively to those changes. Current policymaking cannot handle the complex relationships that characterise the environment, nor can they take account of our expanding knowledge about those relationships.

Social Policy Bonds would take a different approach. Rather than focus on the means of achieving, in this example, a reduction in air pollution, they would reward the achievement of reduced air pollution. Doing so would generate incentives for bondholders to bring it about at least cost. They might well carry out life-cycle analyses in their attempt to do so. But they would do so on a continuing basis, investigating and even financing the research they deem necessary to reduce air pollution as quickly and cheaply as possible. They would both stimulate and respond to increased knowledge of scientific relationships and technical advances.

As important, though, is that a Social Policy Bond regime would compel clarity over society's real goals. In this case, we'd have to answer the question: is reducing fossil fuel use an end in itself, or a means to other ends? And if the latter, what are those ends? Let's say those ends include, inter alia, improving air quality. Now, is improving air quality an end in itself, or is it the effects that air pollution has on human, plant and animal life that we really want to be targeting? And, if the latter, why not target these ends directly? There might be good reasons, involving the costs of monitoring, for targeting indirect means of achieving our goals, but we do need to keep our goals clearly in mind. Those goals, unlike the focus of today's regulatory environment, would have a long-term focus. There'd also be more agreement about them - and hence more buy-in from the public - than there is about the supposed means of achieving them. 

For more about applications of the Social Policy Bond concept to the environment, please see here.

Translation doesn't need grammar; policy solutions don't need root causes.

An excerpt from a letter published in the Financial Times:

Translation is one of the many positive revolutions brought about by artificial intelligence, but, surprisingly it has gone largely unnoticed. While machine translation has made constant but slow progress since the first Georgetown-IBM experiment in 1954 the shift by Google by 2016 from structural rule-based systems relying on grammatical structures to statistical models and neural machine translation was a major breakthrough. Automated translation now takes into account the context to solve the ambiguity of some words or phrases, and to grasp the tone as well as the style in order to find the right vocabulary and the most suited idiomatic forms. Being trained on vast datasets, it is also very unlikely that it will get stuck on a rare or technical expression that a human translator will in turn struggle to find in a paperback dictionary. How AI is overcoming Europe's language barriers, Philippe Huberdeau, 'Financial Times', 30 April 2025

To me, this has application in the world of policy. Our current policymaking system relies on being able to trace the causes of our social problems, to do so continously, and then to try to deal with them. This identification-based model works well when cause and effect can be reliably identified, and don't change much over time, nor differ much over space.

In today's complex societies, it isn't good enough. There are too many variables; and feedback loops mean that implementation of policies changes how people and systems respond. The current model cannot address such complexities, so we get fossilised policies that also tend to be one-size-fits-all. 

I don't propose that we try to use AI techniques to solve policymaking goals such as reducing crime, improving health or, at the global level, eliminating war. Trying to condense all of human history into the context according to which effective policies could be made is impossible. Reducing the human experience into terms that machines can understand can't be done. Partly because it's too great, partly because it's too subjective and partly because it keeps expanding. 

But what we can learn from the application of AI to language translation is that we don't need to fully understand everything about how a language works - its grammar - to translate it effectively. And this is where the Social Policy Bond concept, with its focus on outcomes, enters the picture. Investors in the bonds don't necessarily need to identify and deal with any supposed 'root causes' of crime, war or any of our other social or environmental pathologies in order to address them effectively. Trying to do so would be a Herculean task and so can readily be invoked as an excuse to do nothing. What we can do, and what a Social Policy Bond regime would do, is give incentives to investors to look for the best ways of solving our problems on a continuous bases. That might, in some cases, mean looking for root causes. But it might simply mean researching, trialling and refining many diverse potential solutions and adopting those that are most promising - constantly. Achieving our social goals requires diverse, adaptive approaches. The current policymaking system delivers neither. 

For more on this theme see here and here.

Why we should target environmental outcomes

'Don't overlook the many benefits of plastics', writes the Economist:

Plastic packaging prevents perishable foodstuffs from spoiling, making possible global trade in meat, fish, fruit and vegetables. It enables essentials like rice, cooking oil and powdered milk to be stored and distributed safely and cheaply. A one-litre plastic bottle weighs 5% as much as a glass one; plastic packaging thus reduces shipping costs and emissions. ... When properly managed and well monitored, [landfill] is far less environmentally ruinous than often portrayed, and can be simpler and more effective than poorly executed recycling. Don't overlook the many benefits of plastics, the 'Economist', dated 19 April 2025

The sort of life-cycle analysis required to establish the environmental benefits or otherwise of shifts in our behaviour are bedevilled by boundary issues, measurement difficulties and the difficulty of weighting one type of environmental impact against another. They are better than blandly assuming that rail is ‘better’ than air travel, that solar power is better than coal-fired power stations, but for the making of robust policy they would need to be continually reassessed in the light of our ever-expanding knowledge of the environment and our ever-changing environmental priorities. Government policy cannot be so responsive: if government did use life-cycle analysis with the aim of altering our behaviour, it would probably do so on the basis of a one-time, necessarily limited, and (probably) subjective assessment of environmental costs and benefits. It’s not good enough, but even worse would be what we largely have now: government environmental policy based on corporate interests, media stories and the launching of visually appealing initiatives that look good but otherwise achieve nothing.

Social Policy Bonds would take a different approach. They would subordinate environmental policy to society's  desired environmental outcomes. Say we wish to reduce our use of plastics. A Social Policy Bond issue that rewarded achievement of such a reduction would generate incentives for bondholders to bring it about at least cost. They might well carry out life-cycle analyses in their attempt to do so. But there is an important difference between the way do they would conduct their research and the way government would do so: bondholders have incentives to achieve their goal efficiently. This is likely to mean responding to - and stimulating - increased knowledge of scientific relationships and technical advances.

A single environmental goal, such as reduction in use of plastics will necessarily require diverse, adaptive responses. These are precisely the sort of responses that government does very badly. Government can and should articulate society’s environmental goals, and can help pay for their achievement: in the democratic countries it performs these functions quite well. But most of our environmental goals require complete and responsive understanding of complex relationships, and actually achieving such goals requires continuous, well-informed and impartial decisions to be made about the allocation of scarce resources. For that purpose, Social Policy Bonds, with their incentives to achieve targeted outcomes efficiently would, I believe, be far better than the current ways in which environmental policy is formulated.

For more about Social Policy Bonds please see here. For applying the Social Policy Bond idea to environmental problems, see here. 

Climate change: I don't need to know

I don't know whether the climate is changing. Most of the essays, books, articles, I read do make me believe that anthropogenic greenhouse gas emissions are causing the climate to break down. But then I see papers like this, and I realise I just don't know:

The anthropogenic CO₂-Global Warming hypothesis, as articulated by the Intergovernmental Panel on Climate Change (IPCC) and supported by researchers such as Mann, Schmidt, and Hausfather, lacks robust empirical support when subjected to rigorous scrutiny. This analysis integrates unadjusted observational data and recent peer-reviewed studies to demonstrate that the assertion of human CO₂ emissions as the primary driver of climate variability since 1750 is not substantiated. Instead, natural processes—including temperature feedbacks, solar variability, and oceanic dynamics—provide a more consistent explanation for observed trends. A Critical Reassessment of the Anthropogenic CO₂-Global Warming Hypothesis, Grok 3 beta1, Jonathan Cohler et al, 'Science of Climate Change, vol 5.1 (2025)

Judging by the absence of any meaningful attempts to reduce greenhouse gas emissions, it seems that governments don't know either, or they regard climate change as a low priority for themselves or their citizens. What, then, is the best approach when confronted with what might turn out to be a hugely important and urgent problem - but might not? Our current policymaking systems require that we have a good idea as to the likely impact of a problem, and that we then take measures to reduce that impact. But climate change isn't like that. We just don't know enough to take actual (as against performative) measures to deal with it. Too many of us are unconvinced of the need to do anything and, for many of us, it's against our interests to believe anything to the contrary. 

One of the reasons I advocate applying the Social Policy Bond concept to the climate is that we can confront this lack of certainty by, in effect, contracting out the risk to those prepared to take it on. Let's assume that governments collectively decide to back Climate Stability Bonds; that is, to put up funds for redemption of the bonds once our climate goals have been achieved and sustained for a period, of, say 40 years. If the consensus of the market for the bonds is that the climate is unlikely to change very much, then the bonds would sell for a quite high price. The governments would not lose much by redeeming the bonds, as the bonds would not appreciate very much. But if the market believes climate change is happening and that therefore climate stability will be difficult to achieve, investors will attach a low value to the bonds when they are issued. Bond purchasers would stand to make large sums if they help bring about climate stability.

The crucial point is that under a Climate Stability Bond regime it would not be up to governments, the United Nations, or any panel of experts to make a one-time only assessment of the seriousness of climate change. Under a bond regime it would be the market that would be highly motivated to inform itself about all aspects of climate change, because it stands to gain most if they get it right. And investors in the bonds would be so motivated on a continuous basis, as the market for the bonds would be constantly generating opportunities for gain to successful gatherers and interpreters of the flow of data about climate change.

A Climate Stability Bond regime would thereby bring onside the skeptics, or those who are just reluctant to pay large upfront costs for an uncertain gain. It would contract out not only the achievement of climate stability, but also the assessment of how serious a problem it is. The costs of a poor assessment would be borne by investors in the bonds, rather than taxpayers. Action to bring about climate stability – significant action rather than what we've seen so far – would, I believe, therefore be more forthcoming.

I've written in depth about Climate Stability Bonds on this blog and on my main site there there are links to other essays here. The same reasoning applies to other potentially devastating events to which we just cannot assign a probability; nuclear war for example, and I propose a similar application of the Social Policy Bond idea to address that and conflict in general: links are here.