Gernot Wagner on how to deal with climate changeby / March 27, 2015 / Leave a comment
Why is it so difficult to get people to worry about climate change? After all, the science is pretty unambiguous—pace the climate change “deniers”. Part of the problem, according to a new book, “Climate Shock,” by the economists Gernot Wagner and Martin L Weitzman, is that while what we know about global warming is bad enough, there are “unknown risks that may yet dwarf all else.”
Wagner, who is lead senior economist at the Environmental Defense Fund in the United States, visited London a couple of weeks ago. I caught up with him while he was here and talked to him about the difficulties of mobilising public opinion around the threats and challenges of climate change.
GW: The big problem, frankly, is speaking the truth and talking about what scientists actually know and what they don’t know, which in many ways is even scarier. Saying the latest science out loud is [often taken to be] akin to catastrophising. That’s the big conundrum: on the one hand, “climate shock” shouldn’t be all that shocking—we’ve known this for quite a while. The problem is finding a way to state the scientific facts in a way that does not turn people off immediately.
JD: So it’s partly a public relations or political challenge then?
It’s more than that. Political, certainly. But it’s also a science communications challenge.
You mentioned scientific uncertainty just now. The book is, among other things, an attempt to deal with the challenge of climate change and the policymaking challenges from an economic perspective. But it’s also, it seems to me, a work of epistemology, almost—it’s a reflection on uncertainty and the implications that uncertainty has for policymaking.
Most books are written about what we know. This book is about what we don’t know. We clearly know enough to act. We’ve known enough to act for years, decades. Now, the more we find out, the more apparent it gets that what we don’t know is in fact potentially much, more worse. Choose you favourite analogy here—Nassim Nicholas Taleb’s “black swans,” Donald Rumsfeld’s “unknown unknowns”. That’s what it’s all about. The things we don’t know will most likely be the things that bite us in the back.
This is one of the things that makes climate change a public policy challenge unlike any other.
Climate change is uniquely long-term. It is uniquely global. It is uniquely irreversible and uniquely uncertain. You could probably identify other policy issues that combine two of those four factors, but none that I know of combines all four like climate change [does].
The global aspect of the problem takes us back to politics, doesn’t it? Because presumably a big problem is the absence of appropriate global institutions that could enforce the kind of policies we need to adopt?
Obviously, this has been haunting us for quite a while in the global climate negotiations process. Yes, a global problem needs a global solution—hence the need for a global government, as it were, to tackle this problem efficiently. Which, of course, by definition doesn’t exist. And the United Nations is an imperfect stand-in. The way climate negotiations work is that 190-odd nations have to agree unanimously, or almost unanimously, on a course of action. And we’ve seen where that leads. Maybe there are other approaches here that we ought to be taking.
Domestic policy action linked up with other countries to add up to something akin to a global policy. Now, 190-odd countries aren’t going to agree overnight. But there are various hopeful signs, such as the US-China deal [on climate change] signed late last year. The two biggest emitters of CO2, the world’s two biggest economy, agreeing on fairly stringent, ambitious but achievable policies together.
You’ve talked quite a bit about uncertainty. How does that uncertainty affect policies of the kind you advocate, such as the pricing of carbon dioxide emissions?
Politically, as soon as you talk about uncertainty, people say, “Wait and see.” When you talk about risk, the immediate reaction is “mitigate!” In this case, the link is very direct here: climate risk immediately leads to carbon mitigation. What uncertainty really does, what a risk really does, is increase the need to have a steeper price on CO2 sooner. The higher the risk the more you want to mitigate. The greater the uncertainty, the higher today’s price on CO2.
One of the questions hovering over the entire book seems to be when attempts, of the kind you’ve just described, to harness market forces cease to become enough and large-scale “geoengineering” becomes the only possible solution.
We’re clearly not saying that geoengineering would be a good thing!
But just to be clear: the technology that could help to lower temperatures and mitigate the effects of climate change is already here?
Crudely, the technology is already here. It’s nature that shows us that the technology works—because of volcanoes. The eruption of Mount Pinatubo [in the Philippines] in 1991 managed to lower global average temperatures by 0.5 degrees centigrade, which at that time meant counteracting the full effects of global average warming. By now, however, we’ve warmed the planet even further—by 0.8 degrees centigrade. But no one in their right mind would propose as the solution, “Oh, we’ve warmed the earth by 0.8 degrees, so let’s just dump Mount Pinatubo-style crap into the stratosphere and get back to where we were.” No one should propose that! We know enough about geoengineering to know that it could in fact work, in the sense of helping to lower average temperatures. We don’t know the full costs. As an economist, looking at this, what I would say is that you ought, at the very least, come up with a proper cost-benefit analysis.
So while we’re doing that cost-benefit analysis of geoengineering, we should be “sticking it to carbon,” as you put it in the book?
The mere talk of geoengineering ought to prompt us to do more on the mitigation front with the pricing of CO2 emissions.
You distinguish your approach—pricing carbon emissions—from the one recommended by Naomi Klein, who talks about “taxing the rich and the filthy”. Why do you think hers is the wrong approach?
She wants to stick it to the man. I want to stick it to CO2! Do I think capitalism is doing just splendidly, and everyone is benefiting from the rising tide? Of course not, there are plenty of problems. But what I would say is, let’s focus on one thing at a time. When it comes to doing something about climate change, then it is [aiming at] the wrong target to say we ought to revamp capitalism as we know it. We may want to do that too, for all sorts of other reasons. And “solving” climate change in the process may well be a side benefit. But I don’t think that focusing on sticking it to the man is the right approach to solving climate change—for one very important reason: it will take new technologies, their invention and deployment, to make a dent in the problem.
Does that mean that only the market can save us?
Properly guided market forces can save us.
“Climate Shock: The Economic Consequences of a Hotter Planet” by Gernot Wagner and Martin Weitzman is published by Princeton University Press (£19.95)