Welcome to Plugging the Gap (my email newsletter about Covid-19 and its economics). In case you don’t know me, I’m an economist and professor at the University of Toronto. I have written lots of books including, most recently, on Covid-19. You can follow me on Twitter (@joshgans) or subscribe to this email newsletter here. (I am also part of the CDL Rapid Screening Consortium. The views expressed here are my own and should not be taken as representing organisations I work for.)
This week Brisbane went into a three-day lockdown. These lockdowns aren’t the, “pretty please stay home” lockdowns like we have in Toronto. They are the, you’ll be fined and arrested types. These are relatively easy to do when they are of short duration but last year Melbourne did a three-month stint of being confined to quarters. Of course, in the case this week, it was all triggered by 3-4 cases of community transmission.
Australia is in the half of the world that have managed Covid-19 well and so been relatively free of both health and economic costs. And since they worked out they could do that, they have done that. The flip-side of that was that the government did not feel the urgency to spend big when it came to vaccination. So Australia pitters along; something that has frustrated my economist friends there who want to see Australia reopened to the world as soon as possible and for the cycle of periodic lockdowns ends. In my mind, when I think about the shortage of vaccines around the world, it doesn’t trouble me that countries that have low to zero prevalence of Covid-19, aren’t getting doses as quickly as other countries. But we are all entitled to be frustrated these days.
Australia and countries like it face a bigger issue, however. Covid-19 is likely to be endemic. Vaccines will protect but there is a big difference between 100% protection and less. Not everyone can be vaccinated for health reasons. This is the reason why we worry about anti-vaxxers. I care less about their own choice to risk their own lives by not being vaccinated than the harm they do to others that do not have a choice. As Zeynep Tufecki wrote this week,
Herd immunity is sometimes treated as a binary threshold: We’re all safe once we cross it, and all unsafe before that. In reality, herd immunity isn’t a switch that provides individual protection, just a dynamic that makes it hard for epidemics to sustain themselves in a population over the long term. Even if 75 percent of the country has some level of immunity because of vaccination or past infection, the remaining 25 percent remains just as susceptible, individually, to getting infected. And while herd levels of immunity will eventually significantly drive down the number of infections, this may not happen without the epidemic greatly “overshooting”—infecting people beyond the levels required for achieving herd immunity, somewhat like a fire burning at full force even though it is just about to run out of fuel.
The point is there is no time where things are safe. In economics terms, there is no possibility that Australia’s investment in Covid-Zero translates to long-term Covid-Zero without the same restrictions that kept it there in the first place. If restrictions are lifted, even with widespread vaccination, the virus will get in.
Australia has a number of challenges with respect to vaccination. Vaccine hesitancy is a thing — much as many can’t understand it. What is more, is that it tracks risk. The higher the private benefits of being vaccinated — which is driven by population prevalence — the lower is vaccine hesitancy. You can put in place vaccine passports to boost those private benefits but there are limits. You can require vaccinations to cross national borders but if they are not 100% effective cases will come through. Australia’s quarantine policies mimic a “vaccine to cross” policy and they haven’t kept the country free of lockdowns to manage Covid.
This means that if Australia and other countries believe that they can wait until the world is vaccinated but then reopen in a way that does not have restrictions (including periodic lockdowns) while maintaining Covid-Zero, they are dreaming. The new variants mean that R0 (the reproduction rate of the virus sans restrictions) is double vintage Covid meaning that those countries sit on a tinder box. (And that is assuming there are no vaccine-resistant variants). The future for Australia is that the virus does get in and it does cause harm and they end up at the same endemic point as the other half of the world that didn’t manage Covid. To be sure, if every country had done what Australia had done we would have been free of this thing. But they didn’t and now Australia is in a pickle.
There needs to be a plan for this and there is no option that doesn’t come with a shock and a realisation that Covid-Zero is an impossibility. Once that plan is in place, Australia can reopen and at the same time, have the experience of Covid-19 in the population and all of the health consequences that brings.
The key to both speeding up when that plan itself runs its course and how long it takes is to have a much better vaccine strategy. This involves being able to vaccinate as much of the population as possible and doing something more drastic regarding vaccine hesitancy than having key politicians show themselves getting a shot. It is a really heavy lift. If it is not done, Australia will either drag on in isolation with those vaccinated frustrated with those who are not or it will reopen and have to suffer the health costs of Covid-19 in other to convince people to get a shot. This is an awful dilemma for countries who have done the right thing in managing the vaccine and it is imposed on them by countries who haven’t. But that doesn’t make it any less real.