Resources for a sustainable future

20/5/2009 Guardian Comment Most governments in the developed world were elected on platforms that promised aggressive policies on greenhouse gas emissions.The reality has not matched the commitments made. The reasons for this are multitudinous and no one should ever underestimate the difficulties of weaning advanced societies off the use of cheap and convenient access to fossil fuels. But in addition to the standard reasons for slow progress we can see a large number of obstacles that spring from human psychology. In particular, some of the resistance to aggressive action on climate seems to spring from mental attitudes that may have helped us survive as a species in the past. Perhaps politicians intuitively recognise the existence of these barriers. So they continue to say that climate change is the most important problem facing humanity at the same time as adding new runways to the local airport or sanctioning the development of new coal-fired power stations.
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I see two groups of reasons why action on climate change is not as fast or as effective as the scientific consensus suggests is as necessary. First, although we are constantly fed with information on the severity of the threat, at some subconscious level most people believe that climate change is not dangerous. Second, the desire to protect future generations – and current generations who live far from us – is much less well entrenched in human thinking than we piously assume. ‘What has posterity ever done for us?’ The phrase may now be ridiculed, but it contains a worrying truth.
1) Perceiving Danger
a) Optimism bias
Human beings seem to have a psychological predisposition towards believing matters will eventually turn out well. The phrase ‘optimism bias’ is sometimes used to describe this phenomenon. We see this in many different circumstances. In the planning of a new construction project, for example, the costs are routinely underestimated. The UK Department for Transport website says that ‘there is a demonstrated, systematic, tendency for project appraisers to be overly optimistic and that to redress this tendency appraisers should make explicit, empirically based adjustments to the estimates of a project’s costs, benefits, and duration.’

In the case of climate change, we may unconsciously have a similar bias. Although the results from scientific work seem increasingly worrying, many of us may be saying at the back of our minds that the concerns are exaggerated. Inherent optimism may have helped our ancestors and ourselves cope with present adversity and future threats. It does not help us deal with a long-distant and highly uncertain set of risks from rising temperatures and changing climate patterns.

b) Central estimate bias
Humans tend systematically to over-estimate the tightness of the distribution of likely outcomes (loosely speaking, they wrongly guess the width of the ‘bell curve’). Ask an individual a question on a subject about which they know little and then request an estimate of the probability that his or her answer is nearly right. People will routinely be far more certain than they should be. Examples might be a question that asked how many species there are on the planet or the number of books published a year. People don’t generally know the answer but will nevertheless be far more confident than they should be about the general correctness of their estimate.

This phenomenon helps us to be usefully decisive. Rather than endlessly discussing which way to go to hunt, perhaps our ancestors found it useful to have an exaggerated certainty. This phenomenon allows leaders to get groups to engage in purposeful action. Unfortunately this human attribute is not helpful when it comes to climate change. The world faces a high degree of uncertainty about the impacts of warming, with a very wide distribution of possible outcomes. We may experience 1.5 degrees of temperature rise or it may be four times that level. Humankind can probably cope with the smaller number but the larger figure will make most of the globe uninhabitable. Similarly, the Siberian permafrost may melt, causing an outpouring of methane that rapidly destabilises the world climate. Or it may not. It is the width of bell curve of outcomes that should worry us, but we naturally tend to compress the range of outcomes into a much tighter range than is justified.

The books about climate change from Nigel Lawson and Bjørn Lomborg are particularly good examples of this. Having been sceptics about the existence and then the severity of climate change, both authors write with excessive certainty that the eventual temperature rise is going to be about 2 degrees. The overconfidence is their way of getting us all to underestimate the risks of unpredicted climatic change.

c) Problems dealing with a high noise-to-signal ratio
We are much more aware of weather than we are of climate. In countries like the UK, the variability of the weather is high. It can be sunny and 25 degrees one day and rainy and 15 degrees on the next. This variability (or ‘noise’) tends to drown out the underlying ‘signal’ (changes in the climate). A coldish 2008/9 winter in the US may be connected with recent opinion poll evidence that shows increasing numbers of people thinking that the potential effects of climate change are exaggerated. People in countries with a lot of weather can always find data that supports whatever opinion that they happen to have on climate change. This is unsurprising: survival in past centuries depended more on the weather in the crop growing season than it did on the climate.

It may be no accident that countries with less weather and more climate seem to have smaller percentages of their population denying the existence of climate change. The rapid spread of deserts in eastern China is obvious, and perhaps is correlated with polls showing the Chinese are among the most worried by the effects of climatic change.

d) Assumption of exaggeration in those trying to persuade us
Scientists are increasingly seen as salespeople trying to ‘sell’ their research findings. Correctly or otherwise, ordinary people seem to believe that the conclusions in scientific papers are biased by the need to impress the journalists that cover the topic, who then amplify the results in order to attract attention from their readers. The general population tends to discount the findings, presuming them to be exaggerated and distorted by the need to show increasingly bad outcomes. A cynical citizenry may also believe that striking results are more likely to get the authors future research funding.

I think it is probable that pressure from the press does slightly distort scientific research and, being human, scientists may sometimes amplify their concerns in order to attract attention. But the huge majority of climate change work is carefully designed and robust. Most people in the general population don’t know that the process of peer review will tend to dampen, not exaggerate, the upsetting implications of a new piece of research.

e) An underlying faith in smoothly adjusting and self-correcting processes
The latter half of the twentieth century bought a profound change in the way that people in developed countries saw their world. Effective markets meant that prices generally quietly and unobtrusively adjusted supply and demand so that crises of availability became rare. Although there are good counter-examples, such as the severe depletion of Atlantic fish stocks, markets have been generally very good at dealing with temporary disruptions. For example, it’s possible that a smaller percentage of people have starved to death in the last generation than for any comparable period in the last thousand years. We may have partly lost the ability to comprehend the risk of sudden and unpredictable environmental collapse. Perhaps our pre-industrial ancestors would have understood the threat from catastrophic climate change much better than we can.

Until the recent implosion of large parts of the banking system, trade and financial flows seemed superb at avoiding the awful effects of natural disasters and other extreme events. We have gradually lost the sense that food or raw material shortages can get worse and worse. So an escalating and near-irreversible climate change threat – a classic ‘commons’ problem, like the over-fishing of many of the world’s seas – is not fully comprehended by the modern mind-set. The liberal capitalism of the last twenty years has been so successful that we have become blind to potential threats from environmental collapse. The examples of such crises in the past – from Easter Island through to soil degradation in the US in the Dust Bowl years – are now ignored.

The dominance of what might be called the economist’s model of the world is under threat from the deepening recession. The invisible hand is now looking a little arthritic. But for the last thirty years it has provided the standard ideological framework in Anglo-Saxon economies. We are, in the words of Keynes, all the slaves of some defunct economist. Whether we like to acknowledge it or not, the way we think still owes much to Milton Friedman and his friends. The discontinuities, non-linearities and tipping points of climate change will require us to reprogramme our minds. It will take many years. I remember intellectuals like Keith Joseph acting as the nuclei around which free-market liberalism began to form in the mid-seventies. One looks in vain for similar cells of green philosophers or economists now.

f) The lack of an observable enemy
CO2 is invisible, largely innocuous except for its absorption of certain frequencies of infra-red radiation, and it is a natural part of the carbon cycle. It sustains living systems and helps maintain the planet at a habitable temperature. These are not the usual characteristics of an environmental enemy. Depletion of the ozone layer was an easier problem to address. A small number of manufacturers were making CFCs for a limited number of uses and the effects on the stratosphere were clear to even the sceptics of the day. It was possible to begin the process of phasing out their use without too many obstacles because the enemy was obvious.

Human societies have always sought to identify enemies, whether it be racial minorities, foreigners with different ideologies, or people who simply don’t fit in. But with CO2, the opponent is not easy to locate. We all produce carbon dioxide and greenhouse gases are not only invisible, which makes the problem difficult to see, but they are also all pervasive. We do not even know how to start battling the opponent – some say we should ban leisure flying, others suggest we need to stop burning coal, increase forest cover, or turn down the thermostat. Compared to the usual cry of ‘repel the barbarians’, this doesn’t make for effective warfare on CO2. The lack of progress on greenhouse gas reduction has unnerved many activists, who now devote far too much attention to fighting among themselves rather than leading the charge against the shared enemy.

g) Unknown unknowns
Donald Rumsfeld’s contribution to world history will be dominated by his disastrous actions before and after the Iraq War. But the useful restatement of the idea of ‘unknown unknowns’ will merit a footnote in his Wikipedia entry. Getting people to accept even the possible existence of unknown unknowns in climate science or in other fields is difficult. It was always thus. Perhaps the more successful of our ancestors found it was generally not useful for us to worry too much about the things we don’t even know we don’t know. Many global warming scientists intuitively understand this. Although they should be telling us that they really don’t understand many aspects of the climate system, they fear that the admission of any ignorance will reduce their credibility. They tend to give us an exaggerated impression of the certainty with which we understand things or, more correctly, know what we don’t know.

2) Valuing the future
These seven different aspects of the way we comprehend the climate change danger are all inter-linked. How much do we really value the welfare of future generations, or, indeed, the living standards of the people already affected by climate change in the tropics?

a) Getting rich is a better way of protecting your own descendants
Effective human societies have developed systems for profiting from individual selfishness and combining this characteristic with laws and regulation, as well as a limited reliance on unselfish generosity. It is not through benevolence, said Adam Smith, that bakers provided us with our bread. Although altruism is a substantial component of individual moral systems, this generosity tends to be restricted to our families and those around us. Protecting the world for our grandchildren’s generation is often said to the primary reason for doing something about climate change. But, being realistic, most of us have very little interest in doing something for individuals yet unborn in countries of which we know little.

Famously, of course, we are more interested in ensuring the prosperity of our genetic descendants than the world in general. We do appear to be concerned for our own grandchildren, and society smiles benignly on this devotion. How do we individually look after our own descendants in the future climate crises? Is it through lobbying parliaments for real actions to reduce emissions? Or recycling all our plastic? No. The uncomfortable fact is that we are better advised to accumulate as much wealth as possible – even if it means using large amounts of fossil fuel – and then bequeathing our descendants enough money to avoid some of the impacts of global warming. Particularly in countries with weak commitment to collective action to fight social problems, such as the UK and the US, we will see the rich head for the high ground to give their children homes that will not be flooded. The important conclusion is, I think, that it is very difficult to achieve the determination to value the lives of people remote from us in time and place with the same intensity that we value our families and friends.

b) High discount rates
Non-economists may not have picked up the strongly felt dispute between Stern and the economics establishment about how we should value the future. Simplifying the respective positions, Stern said that a person today is worth the same as a person in the future. Therefore if we had to make financial sacrifices today to gain a reduction in the costs of climate change tomorrow, we should not put an interest rate on the money we ‘lend’ the future just because it falls on people who are not ourselves.

This is all very well for society as a whole. But individuals generally discount heavily. Until the present financial distortions, many people would generally be happy to borrow from their future income stream (by getting a personal loan for example and paying it back over five years) at vastly higher interest rates. This gives us one of the most difficult problems in climate change policy-making: why should people who as individuals have high discount rates (as evidenced by their willingness to borrow from their future at usurious interest) vote in a government that wants to lend to the future either at no interest (Stern) or about 3% a year (other economists). When humankind – rich and poor – has such a strong preference for present-day consumption, how can we make the necessary investments in low-carbon energy that will take decades to pay back?

c) Confidence in collective action
Let’s assume we can get round the first two problems in this section – the lack of real interest in remote people in time or place and the individual’s high discount rate. We still have a huge issue to face. For climate change policies to work, they have to be pursued for generations on end. The rich seams of coal underneath our feet will have to stay unburnt for ever for our climate change mitigation policies to work, even though the fuel is cheap to extract and burn. If we sacrifice our standard of living today by, for example, agreeing to the development of expensive offshore wind power, what reason do we really have to believe that future generations won’t ignore our generosity and simply revert to fossil fuels? Many of us will have doubts about the continuing commitment of people in the future. Trust in the sensible actions of people in a hundred years’ time to continue our sacrifices productively will not be widespread.
Capitalist and quasi-capitalist societies like China have productively used selfish individualism to bring about economic progress. As is now well known, this appears to have brought about a widespread decline in what is loosely called ‘trust’. By trust, we seem to mean faith that others will hold to promises and reciprocate generosity. Unfortunately it therefore seems that liberal individualism may well have made long-term collective action (where we need to trust in the sacrifices of generations to come) less rather than more likely.

d) Hope in correlation and causation?
I often find the picture I have tried to paint a deeply depressing one. Action on climate change seems to me to run counter to many of the most powerful currents in liberal societies around the world, particularly those run or guided by economists. No doubt they think they are being helpful, but their relentless focus on financial costs and benefits disrupts the gradual building up of a social consensus on what to do about climate change.

If I had to guess whether humankind could possibly ever agree to take substantive action on climate change if the worst effects only really began in a hundred years’ time, I would be pessimistic. We would have to rely not on economics or even traditional moral arguments, which have all the weaknesses I have tried to identify above, but on what is essentially a religious faith – a view that respect for the Earth demands that we allow it to stay largely as it is. There’s no doubt that this is an important force in human thinking, even among people without conventional theism. After all, we do all seem to care a lot about a few thousand polar bears of no direct economic value. But I strongly doubt whether the quasi-religious strand in our thinking is powerful enough to get us to take the really radical actions that we need.

The lessons from the near-breakdown of the financial system are unpalatably obvious. Many people knew that the potential for catastrophe was high:
  In a recent paper Andrew Haldane, the Bank of England’s executive director for   financial stability, showed how little banks understood of the risks they were supposed   to manage. He ascribes these failures to ‘disaster myopia’ (the tendency to   underestimate risks), a lack of awareness of ‘network externalities’ (spillovers from   one institution to the others) and ‘misaligned incentives’ (the upside to employees and   the downside to shareholders and taxpayers). (Martin Wolf, ‘Seeds of its own   destruction’, Financial Times, 8 March 2009)

These three systemic problems mirror many of the problems I have been talking about in this article. The threat of climate change seems to be producing disaster myopia at least as great as in the City of London even as the edifice of risk grew increasingly unstable. The misalignment of incentives is equally clear. For each one of us it is supremely rational to use as much fossil fuel energy as we can. The impact will be felt not by us but by future generations who have no voice in our decisions. For the ‘network externalities’ read possible tipping points that rapidly amplify warming trends. For global warming alarmists – still a minority of climate scientists but gradually increasing in number – the financial breakdown is a perfect rehearsal for what might happen to our climate.

I don’t want to end on a pessimistic note. Paradoxically, the primary reason for hope is that the deleterious impacts of climate change are already apparently visible. Drought in China, Australia, Spain, and the western US may or may not be due to global warming. But humankind has another important psychological flaw – a tendency to think that coincident events are causally related. People will often believe that today’s extreme weather events are caused by climate change. This is very useful to those who push for concerted action soon. You are much more likely to argue for change if you believe that you can already see the possible effect on your family. Increasingly severe fires in the western US may have more to do with forest management practices than climate change, but politicians can use these disasters to impel faster changes in policy. The earlier the symptoms of global warming begin to affect powerful and rich individuals in the prosperous countries of the world, the more likely we are to see real action. The cynic might almost hope for some nasty disasters as soon as possible. Without them, we seem to be unlikely to see any meaningful political action while there is still time.

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