5 May 2009 – Thomas Homer-Dixon at the House of Commons “Responding to the converging crises of the 21st century”

Thomas Homer-Dixon talk at the House of Commons
5th May 2009

“Responding to the converging crises of the 21st century”

An audio recording of the original presentation can be found at the Peak Oil Group website:

http://appgopo.org.uk//index.php?option=com_content&task=view&id=50

Most of this talk is contained in his book “The Upside of Down”.

He has a new book just published which is a collection of essays by different authors. It is directed at a Canadian audience but 80% of it is applicable worldwide.

He began by outlining the multiple stresses that the world faces today. He emphasised that these stresses connect to each other and their joint effect may be more than the sum of the individual stresses.

  • Human beings now are a major perturbation to the surface of the earth. It has been estimated that humans move 10 times as much rock and soil than is moved by nature.
  • We are facing an energy transition away from fossil fuels
  • Our world has more complexity and connectivity than ever before, which increases risk of
    breakdown.
  • There is a power shift towards small groups. This can increase risk, as small groups could inflict huge damage if they get access to WMDs. Also it can be positive, eg groups can link up and spread new ideas through the internet.

Societal breakdown can occur when the stress to society becomes greater than its coping capacity. Many studies have been done on revolutions (French, Russian etc). Revolutions tend to occur when the old regime can not cope with stresses it faces.

The stresses that we face now are:

  •  Population growth
  •  Environmental damage
  •  Energy stresses
  •  Climate change
  •  Economic instability and inequality

Because we are reaching the limits of the Earth we will find the limits of what is possible. The 21st century will be the age of nature.

We need to shift our view of the world, from one comprised mainly of MACHINES to one comprised
mainly of COMPLEX SYSTEMS.

An example of a machine is a clock. If we take it apart we can analyse and understand how it works by looking at the parts. If the clock doesn’t work we can trace the fault to one particular part. This is not true for complex systems.

Complex systems have the following characteristics, which machines do not have, he contrasted their
characteristics as follows:

MACHINES                                                               COMPLEX SYSTEMS

Small change causes
small effects                                                              Small changes can cause big effects

Can predict the effect of changes                             Have emergent properties which can’t be predicted

Behaviour moves smoothly                                       May have more than 1 equilibria, may flip from one state to another

We are moving from a world of risk to a world of uncertainty. He mentioned the seminal work by the economist Frank Knight on the difference between risk and uncertainty. He also mentioned Rumsfeld’s “unknown unknowns”, and Clausewitz’s fog of war.

Climate Change

Climate change is developing in a very alarming way. Recently positive feedbacks seem to be developing enormous force and change in the arctic are occurring much faster than expected.

He quoted from James Hansen’s paper “Where should humanity aim” about albedo flip in the arctic i.e. when the arctic sea ice melts it reveals open water which is much darker hence much better at absorbing heat from the sun – this Is positive feedback process.

He showed Michael Mann’s “hockey stick” chart of temperatures, which shows a very pronounced
spike in temperature over the last few years.

He quoted from a recent paper in Science from the start of this year [I think it was the meta study of research on food supply]. It showed how temperature rises reduce crop yields, and that temperature rises predicted by the IPCC would cause a very large drop in food supply.

There are signs that loss of sea ice in the arctic is starting to cause changes in the system of energy and sea circulation that could be the first non-linear change in the climate system. The surface area above the arctic circle is 9% of the planet’s total area. There are signs that the loss of sea ice is causing the Polar cell to get weaker. This is having an effect on the jet stream, as the jet stream flows where the Polar cell and the Ferrel cell meet. Changes in the position of the jet stream affects storm tracks. This may have an effect on the Monsoon.

Food supply

China requires about 450 million tons of grain per year to feed itself. The total world trade in grain is 200m tons per year. If China had to intervene on the world market for 10% of its grain needs then this would be for 25% of the current world grain trade. Imagine what this would do to the price of grain. This could be the galvanic input which finally wakes the world to the potential of climate change.

The wheat growing regions South of Beijing have been growing steadily drier over recent years, and grain output has reduced. This behaviour was predicted by climate models.

Tails of climate response

He talked about the debate between William Nordhaus and Martin Weitzman about what is an appropriate response to climate change. Nordhaus favours a gradual response. Weitzman however points to the tail of the climate sensitivity distributions and argues that the effect from the tail is so large (5+ C warming) that avoiding it should dominate the policy debate. He mentioned the precautionary principle and
Pascal’s wager here.

Energy supply

The 20th century saw enormous changes.

Population grew 4 times from 1.5 billion to 6 billion.

Agricultural yields per hectare grew 4 times.

Energy inputs per hectare grew 80 times!

We now put far more energy into our food production than we get out of it. On a subsistence farm the Energy Return On energy Invested (EROI) is 30 or 40 to 1. For modern agriculture, with huge inputs from fossil fuels, the EROI is about 50:1 negative i.e. 50x as much energy is input as there is energy harvested.

The petrol in a full petrol tank of a standard North American car has the energy content of the equivalent of 2 years of manual labour.

There are arguments about the exact timing of the peak of oil supply – peak oil. H-D didn’t think the exact timing was important enough to discuss it, he just said that the consensus is now that it is within 15 years. What is more important is the decline rate after the peak. If the decline rate is very steep the world will find it very difficult to adjust. In their latest report from November 2008, the IEA have estimated decline rate for existing fields of 6.7%, this is higher than previous estimates.

The EROI of our fuel sources has been steadily dropping. The first oil had an EROI of about 100:1. Modern American oil has an EROI of about 17:1. Aberta tar sands have EROI of 4:1 or less. As EROI falls, more and more energy is used to produce energy. This is a stress multiplier as we have to transition our energy supply out of fossil fuels because of climate change, at the same time we are faced with
reducing EROI.

Climate change and peak oil are linked in a way that many people do not appreciate. Coal still has a very high EROI, about 80:1 (although coal to liquid has EROI of only 2 or 3 to 1). Modern techniques such as mountaintop mining and using very large trucks have increased mining efficiency and hence EROI of coal.

The increase in oil price, driven by demand and decreasing EROI, has in turn driven a switch back to coal over the last few years. Recent emissions trends have been well above the worst case scenario forecast by the IPCC. The 2006 emissions total was about 0.5 billion tons higher than the worst case estimate. Emissions growth rates in the 1990s were around 1.5% per year but during the 2000s emissions growth rates increased to 3.3% per year. The IPCC worst case scenario would lead to tripling of pre-industrial CO2 level by 2100.

Recent research has shown that CO2 is much longer lived than has previously been thought. A proportion, about 20% remains in the atmosphere for over 1,000 years. Also a recent paper has shown that as man-made CO2 is absorbed and the concentration of CO2 slowly declines in the air, this will not cause a cooling effect. This is because as the world warms and the oceans warm, there is a slower rate of heat loss to the oceans. The reduction in oceanic cooling effect offsets the reduction in warming due to decreasing CO2. What this means is that the science now tells us that cutting CO2 back is not good enough, we have to go to zero emissions as fast as possible.

There are many methods by which we can radically cut emissions, a few examples are:

  • Energy efficiency – huge gains are available quickly
  • Underground coal gasification
  • Enhanced geothermal. This is where you drive several kilometres down in order to get
    very high temperatures to generate steam for generation. The energy available
    from this source is essentially limitless. Money invested into enhanced
    geothermal would generate enormous returns. A CDM test was carried out for
    Harvard.

At present 80% of the  world’s energy comes from hydrocarbons. It is unlikely we will be able to change that quickly enough to avoid the need to remove carbon dioxide from the  atmosphere. Atmospheric carbon capture is feasible now. If you have a distributed  source of carbon dioxide pollution e.g. cars running on petroleum, then you should have to build atmospheric carbon capture to capture the waste CO2.

Geoengineering

H-D believes that we now have no choice but to develop geoengineering. We will have to cool the poles to avoid disaster. A few years ago geoengineering was seen as being beyond the pale, now the situation is so desperate that it is being considered.

Questions

There was a long question and answer session, and in fact H-D used several slides that he had not used in his presentation. It was interesting that one of the first questions was about growth. H-D had not mentioned growth in his speech (apart from obliquely in one bullet point at the end) but he had a slide on it that was an interesting take on our attitude to growth.

Q. Shouldn’t we move towards a system of carbon rationing whereby every citizen of the world gets an equal right to pollute?

A. H-D prefers markets to rationing. He thinks that markets are the greatest engine for innovation ever invented. Harnessing the power of markets will be the quickest way to decarbonize.

Q. The questioner said that in his book H-D went further than in his talk, in terms of talking about growth, he quoted from the book. The quote was about the end of economic growth.

A. H-D referred to the bottom of his last slide in which he referred to the end of growth, although in an oblique fashion. He said that the shift away from conventional growth will happen. The world bank economic forecast report from 2006 estimated world economic growth would continue at 2.5-3% per year. This gives a doubling time of around 25 years. On this estimation, in 50 years time the world economy will
be around 4 times as large as it is now. Such exponential growth in a finite world cannot continue, H-D is absolutely certain that we will reach a steady state economy at some time in the 21st century. He isn’t sure about how to get there successfully, he mentioned Herman Daly as having some answers
about how a steady state economy would function.

Given what we know about the environmental impacts of our actions, if an individual behaved in the
way that the world is behaving they would be seen as being mentally handicapped. Most people are living in a fantasy world, disconnected from reality. Eventually reality will catch up with people and the disconnect will disappear.

H-D showed a slide which was a nice summary of our current psychological approach to growth, why
we think about growth as we do.

  1. GROWTH = SOLVENCY
  2. GROWTH = FREEDOM
  3. GROWTH = PEACE

He said that we have internalised these attitudes and he explained why:

  1. We expect to be able to grow our way out of debt. We are seeing this now with the current economic crisis, governments are borrowing massively and expect to be able to grow their economies to pay it off. This is what happened during and after WW2, huge debts were incurred then paid off by economic growth. Governments expect to resolve the pensions crisis in the same way, by growth.
  2. The idea of growth as freedom can be traced back to the Enlightenment and the Renaissance. H-D has a PhD student that has done this. Growth has been seen as progress which gives freedom.
  3. We learned this lesson in the 1930s. The Great Depression caused massive unemployment which caused social unrest and the rise of the Nazis, and led to WW2. Keynes came up with a solution to the problem, which was to pump prime the economy to get it growing again and employ the surplus labour. Modern western economies constantly produce surplus labour from innovation. They need to grow by around 2 to 4% per year in order to produce sufficient demand to soak up the surplus labour produced by innovation.  John-Kenneth Galbraith said that growth is the best lubrication for the friction between
    rich and poor.

The question is, in a world economy that is not growing, how can we justify the fact that much of the world’s population exist on an income of $2 per day? H-D does not yet have an answer to this question!

H-D referred to a book called “The moral argument for economic growth” by Benjamin Friedman, as a good illustration of the conventional economic argument for more growth. He finished his answer by repeating that we will move to a steady state economy.

Q. What about the power of micro-finance to produce development for the poor?

A. H-D said that micro-finance can produce good outcomes. And more generally, small individual actions gradually accumulate over time, until there is a shift. Examples of this are the end of apartite in South Africa and the end of the Soviet Bloc. These events came about after years of small individual actions in the background.

However, micro-finance has the limitation that it cannot be used to fund big capital projects. H-D referred to the cooperative movement as being a useful way forward. The cooperative, not-for-profit ethos may not produce so much incentive for growth.

Q. Isn’t population growth a big part of our problem, should we not address this urgently?

A. Actually population growth is a big success story. In the 1960s and 1970s world population was forecast to peak at around 11 or 12 billion. Now the best estimate for the peak of world population is only 9 billion. Fertility rates have fallen much faster than expected, even in places such as Kenya and Bangladesh which had very high population growth rates, and even in countries which have not been so
successful in becoming richer. That said, at present about 20% of births in the world are unwanted. A big push on contraception could almost immediately reduce that by 10% or so, which would have a material impact.

What is very important to our environmental impact is the way that we are encouraged to see ourselves as “walking appetites”. This comes out of conventional economics with its focus on wants and utility, and it is apparent when we refer to ourselves as consumers. H-D thinks that in order to understand what is happening in the world we need to develop what he calls a “prospective mind”. In order to do this we need 5 perceptual shifts:

                                                From                                     To

  1. SYSTEMS                              Machines                            Complex systems
  2. SELF                                      Consumers                         Problem solvers
  3. VALUES                                 Utilitarian                            Moral and existential
  4. KNOWLEDGE                        Disciplinary                         Integrated
  5. COMMUNITY                         National                              Global

He elaborated on 3, saying that the utilitarian view is the view of ourselves as walking appetites, we need to move away from this towards asking questions such as “what is the good life?” and all the questions that we used to ask when we were children that begin with “why”. He said that at present, if we ask these kinds of questions we are directed towards religion, but religion offers a fixed set of beliefs which discourage further questioning and reasoning. The alternative is that we go to the mall to fill the void of our existential angst.

He elaborated on 4, with a plug for his own University, Waterloo, which he said has very exciting interdisciplinary work going on. He said it is very important not to silo our knowledge, which happens very frequently at present. For example, not many people understand that the reduction in oil EROI is driving the switch to increased coal used.

Q. What about the power of technology for small groups to have a large positive impact, and the power of the transition towns movement?

A. H-D said that he thinks that there is a power shift going on whereby power is moving down to smaller groups. This works both in a positive and negative way. The internet helps small groups link up and disseminate new ideas. Also terrorism and WMD have potential to give small groups enormous power to change the existing order.

Q. Will there be wars in the future over resources such as food and water?

A.  He thinks it unlikely that there will be international wars over resources. However, there will be more internal conflict due to resource depletion. We need to be aware of the danger of producing failed states. Pakistan is an example of a vulnerable state. He thinks they have enough enriched uranium for 60 to 100 atomic weapons. If Pakistan became a failed state this material could be disseminated among terrorist groups.

Q. How do you mobilise small groups to get the changes that are needed?

A. It is difficult because powerful vested interests have a lot of lobbying power because they can mobilise focused economic interests. For example the steel or energy industries. They will focus on capital intensive solutions. On the other hand, distributed solutions produce a diffuse political response.

 Q. To what extent is the current economic crisis the result of oil supply problems?

A. The Brookings Institute carried out an analysis, published about 2 weeks ago, there is a link to it on H-D’s website. They concluded that the proximate cause (not the only cause) of the economic crisis was the run up of energy prices.

H-D again emphasised the importance of the inter-disciplinary view. Not many people understand that oil EROI is driving increased coal use (the Chinese are already building coal to liquid plants).

He noted the work of David Hughes who is an expert on fossil fuel supplies. Hughes thinks that there is not enough accessible fossil fuel in the ground to drive atmospheric carbon dioxide above 500ppm (but H-D doesn’t believe in this analysis).

May 28, 2008 – Some thoughts on economic growth

According to many (for example, see the advertisement by Jeremy Leggett below) peak oil has arrived:

http://www.theoildrum.com/files/20080324%20Time%20&%20Fortune%20mags.pdf

If true, then as Leggett says, “Profound economic dislocation will result. The challenge for human civilization will be how we rebuild post-peak.”. Economic depression and huge social changes could easily result within the next 10 years.

It is puzzling how such a massive problem could have either been overlooked by governments. Many oil people have been talking about peak oil for years – why has there apparently been no planning and preparation for it?

Economic growth increases per capita energy use and accelerates oil depletion. Growth also drives increases in greenhouse gas emissions, which in turn are causing climate change. Either of these problems on their own could be enough to cause economic collapse and ruin. A rational economic strategy would surely put risk reduction as a higher priority than economic growth?

So I’ve been puzzling about why politicians are so fixated on growth when there are so many reasons to pull back. I came across this interview of Dennis Meadows. http://www.euronatur.org/Interview_Dennis_Meadows.dennismeadows_en.0.html
Meadows was one of the authors of Limits to Growth. I print an extract here. The question he was asked was why is it so difficult for people to switch from quantitative to qualitative growth:

“Decision makers who have been extremely successful at producing and managing quantitative growth are the ones who rose to positions of power through corporate and government organizations during the past decades. Now those dominant decision makers do not wish to consider that the situation has made their skills and knowledge less relevant. They deny the need for a shift to qualitative goals. Also we have developed a variety of economic data systems and decision support systems that implicitly take quantitative growth as a goal. So the numbers we focus on automatically lead us to physical expansion.”

I think this goes a long way to explaining why growth is still the number one economic goal, when it no longer makes any sense for so many reasons. It also might explain why peak oil has been ignored by the current generation of leaders. Peak oil doesn’t fit with their worldview, it’s an embarrassment, it puts economic growth into reverse and it renders their strategies ineffective. It’s as if you when driving on the motorway you saw a warning sign to slow down, then put your foot hard on the accelerator.

The book “Limits to Growth: The 30 Year Update” makes the case that exponential growth in a finite system must come to an end. We have reached and overshot the carrying capacity of planet Earth. Because the signal that we have reached the carrying capacity of the Earth is delayed, overshoot of the limits is likely. And because the limits are permanently eroded by the overshoot, collapse becomes likely – of both population and industrial production. So the conclusion is inevitable that continuing to try to grow the economy now is a very bad idea. Doesn’t self-preservation makes a managed retreat, even if only temporary, the only sensible strategy?

I think that working in the insurance industry has perhaps given me a different point of view than many others. Insurance is an area where growth is sometimes a very bad idea. Economic growth now feels about as sensible as growing premium volume when premium rates are going down. Of course people do it anyway even though it doesn’t make sense. There’s a whole fascinating area of psychology to explore there about risk perception, heuristics, decision making under uncertainty, the herd instinct etc.

There is another argument against growth in the Limits to Growth book. Economic growth doesn’t even make sense on narrow financial grounds above a certain level. This is because pollution abatement costs rise non-linearly with percentage abatement – each additional percentage of abatement costs more than the last, with the last few percentage points of abatement being extremely expensive. Climate science now tells us that CO2 cuts have to be extremely deep – at least 80% by 2050, but probably more. Economic growth drives increasing CO2 emissions. There comes a point above which the cost of abatement exceeds the additional wealth generated by the growth.

So I draw the following conclusions:
a) pursuing economic growth now makes no sense from a risk management point of view, a managed retreat is the best strategy
b) it’s no good saying that we must have growth because the economic system depends on it – whether we like it or not peak oil means that growth will stop and go into reverse very soon anyway
c) governments need to plan and manage the downturn
d) so far their risk management has appeared to be non-existent.

May 4, 2008 – Public Meeting on the Climate Change bill – further thoughts

On 22nd April I attended the public meeting which was organised by Friends of the Earth to discuss the climate change bill. FoE have published a webpage with some details on their website
http://www.foe.co.uk/campaigns/climate/news/big_public_meeting.html
There were some interesting comments during the meeting which were not reported and I’ve written about some of these in my previous post on 27th April. In this post I’ve written some thoughts arising out of what was said in the public meeting. Also I look at the large gap which has opened up between the scientific advice, which clearly indicates that we already have a global emergency, and the scale of the government response to date.

Comments on the public meeting
The public meeting was partly encouraging and partly depressing. Most of what was said was fairly predictable. Hilary Benn defended the government’s record in reducing CO2 emissions by 16% since 1990. Steve Webb pointed out that if you add aviation and shipping in to the calculation, the reduction in emissions since 1990 has been just about zero.

I would think that if these guys were running the country then we’d be making more progress. Unfortunately they’re not and as Steve Webb memorably put it, in terms of the power of government departments, DEFRA is a “minnow among wolves”. I’m sure Gordon Brown thinks he is doing a good job by balancing environmental concerns against all the other issues of government. In the real world there is no balance. The laws of physics always win over the laws of economics, something I don’t think Brown takes into account.

The Conservative spokesman, Peter Ainsworth, said a couple of things which surprised me a little. The first was that he said that for the last 200 years since the industrial revolution we have treated the planet as if it was infinite and this has to change. It was great to hear him say that because it demonstrates that he understands the root cause of our problems.

The other slightly surprising comment to hear from a Conservative politician was that when someone in the audience asked about carbon rationing, Ainsworth said that it was “a good idea whose time hadn’t come yet”. The other 2 politicians agreed that the public would not accept carbon rationing yet. I think that it may help if non-politicians, perhaps intellectuals, academics, even celebrities, started saying what needs to be done.

The audience was mainly FoE members and I was a bit disappointed with the questions asked. Several people asked the same question about whether aviation and shipping should be included in the bill (Lib-Dem – yes, Con – after 5 years, Labour – yes but only after international agreement), but no-one asked about whether there should be binding annual targets instead of 5 yearly targets. No-one asked any questions about bio-fuels. No-one asked a question about what happens if the science says we need much bigger reductions in GHG emissions than are currently envisaged.

The target of the climate change bill is explicitly to keep the global temperature rise under 2 degrees Celsius, this was mentioned during the discussion. It is interesting to note that in his book published in January this year, David King (the ex-chief government scientist) has already given up on the 2 degree warming target as being “unrealistic”, because the changes necessary to hit that target are too big and just not politically possible. I am wary about accepting that for the following reason. When the Stern report was published David King recommended a CO2 equivalent stabilization target of 550ppm. He admitted in the Hot Topic book that he was wrong about the 550ppm target and he and now recommends a target of 450ppm. I think there is a good chance that he has picked the wrong target now just as he did back then.

Parallel with reserving for casualty insurance
I want to draw a parallel with a scenario of which I’ve got personal experience. That is a large insurance company setting reserves for casualty business, in a period when claims are increasing rapidly. Quarter by quarter it becomes more obvious that reserves need to be increased. Pressure on management to produce a given profit target constrains the reserve increases to less than is justified by the data. The gap between data and response gets larger and larger over time. Finally the gap becomes so large that action has to be taken, and a one-off reserve strengthening occurs, with a hit to profits. The point is that management may persist in avoiding the necessary reserve strengthening action long past the point when it is clearly necessary to any informed party.

Perhaps some lessons can be learned from the psychology of the reserving situation. Anchoring is probably involved i.e. reserve estimates are dragged towards the current value which slows down the rate of adjustment. Radical action may be postponed if a situation is getting gradually worse rather than suddenly deteriorating.

It strikes me that there are similarities with the situation the world is in now. The data is telling us that a particular course of action is necessary but so far politicians are not making the necessary changes. With every day that passes the gap between data and response gets larger, and it becomes more and more obvious governments are getting it wrong. They are not facing up to reality and are not dealing with the situation and frankly I’m sick of it.

See below for a report on the UK government’s response to climate change from the Benfield UCL Hazard Research Centre, published in 2007. This report shows that unless changes are made the UK Governments plans for GHG reductions are “doomed to failure”. A 30% cut may not be reached until 2050. As far as I’m aware not much has changed since this report.
http://www.channel4.com/news/articles/dispatches/greenwash+executive+summary++report/267708#fold

How much is it worth paying?
In his review of the economics of climate change 18 months ago Nicholas Stern recommended that the world spend 1% of GDP to avoid climate change. Since we could not expect very poor countries to spend much, this surely must mean that he was recommending that rich countries spend more than 1% of GDP?

Recently Stern said that he underestimated the risk from climate change in his review.
http://uk.reuters.com/article/domesticNews/idUKGOR65702120080416?sp=true
Surely a corollary of that is that he now believes it is worth spending more than 1% of world GDP on this problem. How much more? 5%, 10%, 20%? It would be interesting to ask him and find out what he thinks now. Shouldn’t there at least be a public debate about whether it is better to deliberately postpone consumption and redirect and mobilize the economy to fight this problem, rather than wait until an economic collapse is forced on us? No-one seems to want to say the obvious i.e. it is entirely logical that we in the rich world should pay a big slice of our incomes as an insurance premium against catastrophe. That means we will get poorer in the short term but it is a price worth paying.

Since I wrote the above I read an apposite article in Time Magazine, in a special edition devoted the environment; http://www.time.com/time/specials/2007/article/0,28804,1730759_1731383_1731363-1,00.html.
The article suggests that the US economy should be refocused to fight the war against climate change in a way reminiscent of the “overnight conversion of the World War II”. It also suggests spending 2-3% of US GDP on the problem “for some time”. It’s great to see a mainstream publication like Time publishing such an article.

Public Meeting on the Climate Change bill, 22nd April 2008

The meeting was organised by Friends of the Earth and chaired by Anne McElvoy, editor of the Evening Standard. The location was the Friends Meeting House, 173 Euston Road.

Anne McElvoy – Executive Editor of the Evening Standard

Tony Juniper – Director of Friends of the Earth
Hilary Benn – Secretary of State for Environment, Food and Rural Affairs
Peter Ainsworth – Conservative Shadow Secretary of State for Environment, Food and Rural Affairs
Steve Webb – Liberal-Democrat Shadow Secretary of State for Environment, Food and Rural Affairs

This was a public meeting to discuss the Climate Change Bill. The Bill has been through the House of Lords and will be debated be debated in the House of Commons this year.

The format of the public meeting was for each of the four speakers to speak for a maximum of 10 minutes, after which the discussion was opened up to the floor for questions. The FoE website contains some highlights of the discussion.

http://www.foe.co.uk/resource/press_releases/1000_londoners_in_heated_c_23042008.html

Following are some notes I made from the meeting, including some interesting comments which were not reported in the FoE article.

Initial Speeches

Tony Juniper
Nicholas Stern said last week that he did not go far enough in his 2006 review.

http://uk.reuters.com/article/domesticNews/idUKGOR65702120080416?sp=true

International trading should not be a major part of targets for emission reductions. It should be above the targets set.

Hilary Benn
Defended the use of international trading by saying that the Earth does not mind where emission cuts are made.

Global social justice should determine the split of emissions that everyone is allowed to make. The current split of emissions between rich and poor nations is inequitable.

The Labour government has made good progress in that emissions in 2010 are projected to be 16% below the level in 1990, significantly better than the Kyoto target of 10%.

Some people say that if Britain goes first and acts now against climate change this will hurt the economy and put Britain at a disadvantage to those countries that do not act. Similar arguments were made about the slave trade before it was abolished. Yet when Britain was the first to ban slave trading it did not hurt the British economy, but it did encourage other countries to do the same.

Peter Ainsworth
Listed the areas where the Conservatives, in partnership with the Liberal Democrats, strengthened the Climate Change Bill during its passage through the House of Lords:
*Strengthened the climate change committee,
*Added a duty to engage with the public,
*Added a duty to publish the advice that is given to government,
*If government disagrees with the committee it will have to say why
*Added sectoral targets
*Annual reports including an assessment of progress
*An adaptation sub-committee
*A cap on carbon trading of 30% [he admitted that this cap has no scientific basis]
*The PM to be given a pivotal role
*The first clause of the bill was changed to state that the aim of the Act is to restrict the increase in global temperature to less than 2 degrees Celsius above pre-industrial levels.

Targets should be set by scientists not by politicians. No serious observer believes that a 60% cut in emissions by 2050 will be enough.

He finished by attacking the current government’s apparent hypocrisy of making grand speeches about climate changes then ushering in an expansion of Heathrow and other airports, allowing the first new coal fired power station in a generation and allowing a bio-fuels policy that will sacrifice the orang-utan.

Steve Webb
DEFRA is a “minnow among wolves” – a deliberately mixed metaphor! It is a piddling department that is broke and is having to bail out farm payments by cutting back on energy efficiency payments.

The government have produced an energy bill that does not mention energy efficiency!

The Liberal-Democrats proposed that the climate change bill should be amended to specify an 80% cut in emissions by 2050. The Conservatives abstained, hence the Bill still currently has the inadequate 60% target in it.

If aviation and shipping are included in calculations of emissions, then current UK emission levels are the same as in 1990. No progress has been made at all during the last 18 years.

Question and Answer Session
What enforcement mechanisms are envisaged for the climate change act?
There is no legal sanction currently envisaged. Public opinion is the only court to which this bill will be held.

The Conservative former Chancellor of the Exchequer Nigel Lawson has recently published the book “An Appeal to Reason” which dismisses climate change as scare-mongering http://www.timesonline.co.uk/tol/news/politics/article3778985.ece. What is Peter Ainsworth’s response to this?
PA noted the odd fact that a large proportion of British climate change sceptics are part of the Lawson family. He has debated with Lord Lawson and has the following response. “You disagree with 2,500 world class scientists who have devoted their careers to understanding this problem. Are you a scientist? No. End of argument.”

What about carbon rationing as part of the solution?
PA Carbon rationing is a good idea whose time hasn’t come. The public objection to such a measure would make the poll tax riots look like a tea party.
The other politicians agreed that carbon rationing was not yet a viable policy.

TJ The public should be educated a lot more on the benefits of early action on climate change.

Shouldn’t we be consuming and using less “stuff” as part of the solution?
PA replied that he had attended the Johannesberg conference on sustainable development. We must aim for sustainable consumption and live within a finite Earth. We have spent the last 200 years since the industrial revolution behaving as if the World is infinite. We have got to start using less stuff and being smarter about what we do use.

SW “Vote for the Lib-Dems and we will make you use less stuff” is probably a second-term Liberal-Democrat strategy! Using less stuff is the destination, but it is a long route to get there.

TJ We live in a consumer culture. Having more material goods is a sign of status. The government could influence the public by controlling advertising. For example, most car adverts are for cars in the most polluting tax bands E and F, as these expensive luxury cars have larger profit margins. We put health warnings on cigarettes, what about putting health warnings on Porsches.

Nicky Gavron, deputy mayor of London
This was not so much a question as a statement of what London is doing regarding climate change policy. London has a target of a 60% emission reduction by 2025. They are setting up a group of 40 of the biggest polluting cities (the “C40” group) to collaborate on anti-climate change measures.

Shouldn’t aviation and shipping be included in the climate change bill?
SW Agreed. We cannot allow the Secretary of State to decide that aviation and shipping should not be included within the climate change bill.

HB Aviation and shipping must be dealt with by international agreement, because planes and ships have a choice as to where they refuel. If fuel is highly taxed in the UK they will simply re-fuel in other countries with lower fuel tax rates.

11 Feb 2008 – A view on the Stern Review on the Economics of Climate Change

Commentary on the Stern Review
Oliver Bettis
11th February 2008
 
IntroductionThe Stern Review on the economics of climate change moved the debate forward. It rightly placed ethics at the centre of the discussion. However, it has been criticised by some because it went too far in its conclusions and by others because it did not go far enough. I would tend to agree with the second category.

You can read a discussion of criticism of the Stern report in the document below.
http://www.ase.tufts.edu/gdae/Pubs/rp/SternDebateReport.pdf

I read the executive summary of the Stern report when it was published in late 2006. I re-read it in January 2008. On first reading, somehow the risks didn’t quite seem real and I didn’t see any contradictions between the information in the review and the conclusions. Now, after another year of more alarming science and data, and more time for the reality of the situation to sink in, I have a different impression. The degree of risk from severe and irreversible warming, which is clearly spelled out in the review, feels much less remote.

I get a strong impression from a lot of commentators that deep down on an emotional level they don’t believe that the worst case scenarios are credible or they are so far away that we don’t need to worry too much yet. I imagine that that’s probably the position I was in during late 2006, although I had already read a substantial amount about the subject by that time. I have wondered why this should be so. One possible reason is that our perceptions of risk are just not very good for this type of issue (the availability heuristic, discussed elsewhere).

On re-reading the Stern Review summary, I simply don’t think that any reasonable reading of the information in the review can justify the conclusions. Looking at the enormous risks which are quite clearly spelled out, it seems as if Stern had already decided at the outset that the rich world should not take a significant cut in wealth and rich world growth should continue to be unrestrained. I asked a colleague of mine who works on our company ICA to read the review. He also could not understand how Stern can recommend such a high stabilization target for CO2. By aiming for a stabilization target of 500-550 ppm CO2 equivalent we expose ourselves to enormous risk.

On first re-reading my reaction was anger; that was the motivation for writing this commentary. How could Stern presume to judge on our behalf how much we would be prepared to spend to reduce risk of catastrophic warming? Surely that is a political decision for us all? However, on reflection I think that Stern probably said as much as he could, given that he is an economist and was employed by the government to comment on the economics of climate change. He did a good job of spelling out the risks and he moved the debate along. It is incredible that even up to late 2006 the issue of whether it is worthwhile spending a significant amount of money to reduce the risk from the problem had not been settled. I believe that it is now up to others, probably not economists, to draw their own conclusions and quickly move the debate much further.

Stern’s speech in the Yale Symposium in February 2007 shows that he clearly understands the risks from severe climate change. At the bottom of this section I briefly look at the Yale Symposium and re-print a couple of extracts which I think show that these economists do not properly understand the risk. In my other blog I refer to the Harvard based economist Martin Weitzman who suggests that a traditional economic cost-benefit analysis is not the right way to view the problem. Rather a catastrophe insurance view of spending money to avert the worst outcome is more appropriate.

Commentary on specific sections within the Stern Review long executive summary

Page References are to the long executive summary. Text in blue are quotes from the document, the black text are my comments.

Page v
It’s worth showing Figure 2 in full, it is shown at the top of the blog. The bottom section “Risk of rapid climate change and major irreversible impacts” starts at 1.5 degrees of warming. This figure clearly shows that the risk of positive feedbacks and irreversible catastrophic change is well understood.

Page vii
Second line. “Higher temperatures will increase the chance of triggering abrupt and large-scale changes.”

Page x
Fourth paragraph down. The possibility of amplifying positive feedbacks is specifically referred to. However, the estimate of the potential effect of this increased responsiveness is “…based on modelling a limited increase in this responsiveness…”. Why limited?
“…potential scale of the climate response could increase the cost of climate change on the BAU path from 5% to 7% of global consumption, or from 11% to 14% if the non-market impacts described above are included.” Surely the risk from the business as usual path has to be more or less 100% of global consumption? There appears to be an implicit assumption running throughout the review that our global civilization could not collapse.

Fifth paragraph down.
“Third, a disproportionate share of the climate-change burden falls on poor regions of the world. If we weight this unequal burden appropriately, the estimated global cost of climate change at 5-6°C warming could be more than one-quarter higher than without such weights.” Is it really meaningful to talk about the cost of climate change at 5-6 degrees of warming? We would probably be talking about the shattered remnants of humanity.

Page xi
Emissions have been, and continue to be, driven by economic growth; yet stabilisation of greenhouse-gas concentrations in the atmosphere is feasible and consistent with continued growth.

CO2 emissions per head have been strongly correlated with GDP per head. As a result, since 1850, North America and Europe have produced around 70% of all the CO2 emissions due to energy production, while developing countries have accounted for less than one quarter. …

…Stabilisation – at whatever level – requires that annual emissions be brought down to the level that balances the Earth’s natural capacity to remove greenhouse gases from the atmosphere. The longer emissions remain above this level, the higher the final stabilisation level. In the long term, annual global emissions will need to be reduced to below 5 GtCO2e, the level that the earth can absorb without adding to the concentration of GHGs in the atmosphere. This is more than 80% below the absolute level of current annual emissions.

So Stern says that we need a global cut of more than 80% and that in the past and currently, emission growth is driven by economic growth. Is it reasonable to then conclude that we should continue to grow rich world economies without restriction?

This Review has focused on the feasibility and costs of stabilisation of greenhouse gas concentrations in the atmosphere in the range of 450-550ppm CO2e.

Stabilising at or below 550ppm CO2e would require global emissions to peak in the next 10 – 20 years, and then fall at a rate of at least 1 – 3% per year. The range of paths is illustrated in Figure 3. By 2050, global emissions would need to be around 25% below current levels. These cuts will have to be made in the context of a world economy in 2050 that may be 3 – 4 times larger than today – so emissions per unit of GDP would need to be just one quarter of current levels by 2050.

To stabilise at 450ppm CO2e, without overshooting, global emissions would need to peak in the next 10 years and then fall at more than 5% per year, reaching 70% below current levels by 2050.[Three paragraphs above the figure is an 80% reduction below current levels. Need to check the reason for the difference.]

The British government have semi-officially adopted the upper end of Stern’s suggested CO2 stabilization target. In fact, even the lower end of 450 ppm equivalent entails taking on enormous risk. A strong argument could easily be made for the rich world taking on considerable short term financial pain to aim for a low stabilization target. I believe that the longer that one focuses on this problem and thinks about the risks, the more real they appear and the more appealing is the lower emissions target.

Page xv
Stabilisation at 450ppm CO2e is already almost out of reach, given that we are likely to reach this level within ten years and that there are real difficulties of making the sharp reductions required with current and foreseeable technologies. Costs rise significantly as mitigation efforts become more ambitious or sudden. Efforts to reduce emissions rapidly are likely to be very costly.

An important corollary is that there is a high price to delay. Delay in taking action on climate change would make it necessary to accept both more climate change and, eventually, higher mitigation costs. Weak action in the next 10-20 years would put stabilisation even at 550ppm CO2e beyond reach – and this level is already associated with significant risks.

Stabilization at 450ppm CO2e is out of reach if current policies are maintained. If sacrifices are made and the political will is there, perhaps it is still possible to reach this target, if we think it is worth paying the price?

Finally I skip back to page ii, as this is where he places his conclusion:

Page ii
From all of these perspectives, the evidence gathered by the Review leads to a simple conclusion: the benefits of strong, early action considerably outweigh the costs.” [No argument with that and it was a great step forward to hear that conclusion at that time.]

“The evidence shows that ignoring climate change will eventually damage economic growth. Our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes. Tackling climate change is the pro-growth strategy for the longer term, and it can be done in a way that does not cap the aspirations for growth of rich or poor countries. The earlier effective action is taken, the less costly it will be.”

This conclusion is purely an economic point of view – which is of course is to be expected and what was asked for in the remit for the review. It is interesting that the first sentence of the conclusion says that climate change will “…eventually damage economic growth.”. I believe that the focus on economic growth shows how growth has become a fetish.

Economic growth in the developing world means enough food, sanitation, housing, universal schooling, universal healthcare. All of these problems have been more or less solved in the rich world. Yet we continue to believe that maximizing economic growth is the correct policy. Surely risk reduction must now rank as more important than maximizing growth? An example – a moratorium on new coal fired power stations in the rich world might cause power shortages in the short term and constrain growth. But surely this is a price worth paying if it reduces the risk of ruin over a time horizon of a few decades.

Of course, a change in growth assumptions would cause large disruptions, many parts of the economy rely on the assumption of increasing consumption (pension values would of course take a huge hit, pension contributions would have to increase, the economy would have to be carefully steered to avoid collapse). However, during WW2 I imagine that the government was not overly concerned with whether GDP growth was 0% or 2% per year, providing the economy did not collapse and citizens had enough to eat. I imagine that they were more concerned with beating the enemy and ensuring the survival of civilization. I believe that is a more appropriate mindset for the world as it is now.

I believe that an objective reading of the Stern review makes it impossible to reconcile the conclusions with the body of the report. It appears that Stern had at the outset already decided that unconstrained economic growth in both rich and poor countries is such an important objective that it justifies taking huge risks with the climate (perhaps he wanted to go further in his conclusions but at the time he said the maximum that he thought he could get away with without causing a political storm).

I would like to be offered a choice between reduced wealth and accepting the risk of living in a world that is turning into a disaster zone! I believe that in 20 years time, perhaps a lot sooner, people will look back at this time and ask – why didn’t they think it was worth spending more money?

Yale Symposium on the Stern Review
Yale Center for the Study of Globalization
February 2007

Stern was asked to present his findings at Yale in early 2007. He made an opening address which showed that he clearly understands the real risk of catastrophic warming. This was followed by commentary by a series of eminent economists. I give two extracts here:

William Nordhaus, Yale University
Page 73
“Take the extreme-extreme-extreme case of the high-climate scenario with catastrophic and non-market impacts. For this case, the mean losses are less than 1% of world output in 2050 and around 3% in 2100.”. Nordhaus is taking these figures from the Stern review. I have not checked this against the Stern review itself. He then goes on to argue that the present value cost is much less than Stern estimates as Stern uses a discount rate that is too low. He is implicitly accepting the scenario presented i.e. 1% of world output lost by 2050 in an extreme scenario. He finishes his commentary by saying that the case for urgent action is not yet proven. Surely after a close reading of the review the only way to reach that conclusion is to grossly misunderstand the scale of risk?

Commentary by William Cline, Peterson Institute for International Economics
Page 83
“I would argue that if the time horizon is to be extended to infinity, there should not only be more explicit attention to lower damages after 2300 because of partial reversal of global warming, but also that it is important to apply a somewhat higher elasticity of marginal utility than the value of unity used in the Review. All this being said, I would note that with the recent work by Meinshausen and others suggesting that even 2.5°C global warming would be likely to cause dissolution of the Greenland ice sheet and sea level rise of 7 meters on a time scale of 1,000 years, and in view of recent concerns that this melting could occur faster than previously thought, it may indeed make sense to extend the horizon to at least a few hundred years beyond my 300 year horizon – as long as this is done with a somewhat higher elasticity of marginal utility than used in the Stern Review in combination with the near zero rate of pure time preference.” [My emphasis].
When discussing a long term change that would result in sea level rise of 7 meters, I think that a discussion of “marginal utility” and “pure time preference” sounds somewhat ludicrous. The planet would be altered beyond recognition. Even if the world could adapt fully, quickly enough to save lives and maintain our standard of living, we would lose all coastal cities and many land areas. Are we prepared for that eventuality and would we accept it as a price worth paying to maintain our standard of living? I think that these sorts of changes are so beyond our imagination that on some deep level, we don’t really believe they could happen. The comment illustrates the extent to which the economists picture the debate purely in money terms. But of course there are many other aspects to the problem (e.g. loss of political stability, loss of heritage and history, destruction of the natural world). For those of us in the rich world, where our immediate economic needs are met, does it make any sense to put so much importance on increasing wealth?

Feb 5, 2008 – An Actuarial View on Climate Change

This post is a summary of my personal views about climate change. I have tried as far as possible to use actuarial thinking to form opinions based on the science and data. Some comments reflect a degree of frustration with the way our politicians are handling this issue.

A few main points are listed below followed by more in depth discussion:

1. CO2 was not seriously perceived as a potential problem until the post-war economic boom was well underway. By the time the danger was recognized, our society had become addicted to rapid economic growth powered by fossil fuel consumption. The addiction to fossil fuels (as recently admitted by George Bush when he stated that the US is “addicted to oil”) has warped our perception of the issues.

2. Risk is being misperceived on a large scale. There are parallels with other situations familiar to us from an insurance point of view e.g. asbestos. Psychological biases such as the availability heuristic and denial may be partly causing this.

3. There is a danger in continuing to focus on maximizing economic growth instead of switching strategy to minimize risk. A parallel can be drawn with Northern Rock. Rapid and successful growth for years, followed by collapse, arguably caused by a failure to change strategy.

4. The changes needed are so radical that only massive government action can make a real difference. The British government are making all the right sounds but are not taking enough urgent action. Recommendations for personal action should be primarily political – write to your MP, ask for a stronger climate change bill, lobby for more aggressive action, support new laws, taxes and restrictions etc.

5. Massive engineering projects (at huge cost) may be needed to solve the problem. The scale of action needed is huge. There is currently not enough sense of urgency; even the CBI point this out in their recent report on climate change.

Why actuaries may have a good insight into climate change issues
I believe that actuaries should have a better insight into the issues than many others, for several reasons, for example actuaries are used to dealing with tails of distributions. Also actuaries try to base their conclusions upon a clear headed view of the data free of psychological bias, even if it makes them unpopular.

No government of any large country is yet taking this seriously enough. They seem to be content to run massive risks with our future – much larger than any insurance company would consider. I think that at the moment they are locked into thinking in a way that is outdated, always constrained by what is “politically possible”, and they just haven’t thought deeply enough about the issues.

Surely this is now an emergency situation? I believe that things will move quickly now (the accelerated melting of polar sea ice is a signpost, one recent study estimated the North pole could be ice free in the summer by 2013 or even sooner). It will become obvious that this is not a problem for future generations, it will have to be dealt with within the next few years. We will either solve the problem within our lifetimes or we will see it spiral out of control.

I can easily imagine a situation where the carbon sinks start failing badly (for example, from a rapid increase in forest fires and die off of vegetation due to summer drought). The rate of increase of CO2 concentration would accelerate. We would then desperately try to cut back on CO2 emissions. However, if enough positive feedbacks had been triggered, a cutback in anthropogenic greenhouse gas emissions would no longer have much effect. Perhaps the horror of this situation is so great that we don’t really believe it could happen?

Is economics the best way to approach climate change?
As a separate document I have written some comments on the Stern Review on the economics of climate change.
http://oliver-climatechange.blogspot.com/
The commentary attempts to show how Stern’s conclusions do not logically follow from the body of the report.

So far economists have carried out much of the debate about climate change. I would argue that it is not primarily an economic problem, or at least that the problem is with a limitation in conventional economics. Economics is a social science, it studies the interactions of humans with each other. Elements such as pollution are “externalities” and have to be added in to the analysis. The primary issue in this instance is a constraint in the physical world, not an issue relating to the economic interaction between people.

In his review of the economics of climate change, Nicholas Stern said that climate change is the biggest market failure the world has ever seen. Since the primary function of economics is the study of markets, then is it not fair to say that climate change is the biggest failure of conventional economics? Stern does a good job of thinking around the issues and recognizing that this is unlike any other economic problem. He recognizes that the normal tools of economic analysis, such as a discount rate based on the rate of investment return, do not necessarily apply when looking at the fate of the whole planet. I would go further and say that economics is not the right starting point for thinking about the problem.

The fundamental problem is that the exponentially growing world economy is bumping up against the limits of the finite physical world. There is an apposite quote by the philosopher and economist Kenneth Boulding “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist”.

The starting point of any discussion of climate change should be the physical world, based on science. We should first understand the limits of what is possible. Then we should decide how much risk we are prepared to take. Only then do we ask the economists, what is the best and cheapest way to achieve our goals. The sequence then becomes:

1. Decide that we want to preserve the world as far as possible as it is, preserve our food supply and prevent a large rise in sea-level and changes to weather patterns such as the monsoon.

2. Find out what is the maximum level of GHG we can allow to accumulate in the atmosphere before there is an unacceptable level of risk that these objectives will not be met.

3. Determine what are the cuts needed to stabilize at that level.

4. Use the economists to engineer the change in the economy to achieve the objectives. The economists’ role is to find a way to change the economy rapidly enough to reach the goals while avoiding economic or social collapse.

Right now it feels as though the tail is wagging the dog. The discussion is all about the cost of combating climate change. I want to keep the world as it is. I don’t want a different planet. I don’t want an economist telling me this or that target costs too much. If it comes down to a choice between reduced wealth or protecting the climate, then I want to at least have a debate.

Risk vs Growth
In researching this I came across the website of a French energy consultant called Jean-Marc Jancovici. He has some good essays on climate change and energy related issues. I’ve put links to two of them below.

The first article discusses how emissions are linked to GDP growth and whether it is possible to grow an economy while reducing emissions.
http://www.manicore.com/anglais/documentation_a/greenhouse/growth.html

The second essay details what was in the original Club of Rome “Limits to Growth” report, which was released more than 30 years ago. I think it now looks quite prescient.
http://www.manicore.com/anglais/documentation_a/club_rome_a.html

I think it is a fair question to ask, why are governments in the rich world still pulling the “Maximise Growth” levers, when the risk of collapse is so great? Just because maximising growth has been good for us for the last 200 years, doesn’t mean it still is now – the past is no longer a good guide to the future.

Of course, in the developing world economic growth is still hugely beneficial for the population. But in the rich world I believe it has become a fetish. The assumption that growth is good underlies every story about the economy – it’s just not true any more. A recent example; in a newspaper last week there was a headline about the SocGen rogue trader, which said something like “The man who saved the world”. The meaning of the article was that the rogue trader forced the hand of the Federal Reserve to cut interest rates by 0.75%, and thereby averted a recession and “saving” the world economy.

As far as I can see, we are now in a situation where any boost to the world economy increases emissions and therefore increases risk, not decreases it. When the media or politicians talk of risk to the economy they are referring to the risk of increased inflation or unemployment, over a timespan of a few years. The worst case risk from climate change is a permanent change to the Earth, partial or complete economic collapse, massively increased damage from natural disasters, enormous population migrations, and great loss of life etc. When assessing risks, if you focus on the smaller risks and ignore the larger then you’re not really dealing with risk at all.

Northern Rock
I think it’s interesting to look at Northern Rock as an example of a strategy for growth which went wrong. The business model at Northern Rock was for low costs and high growth funded mainly by capital markets. This worked beautifully for many years. Northern Rock grew rapidly and made large profits. Everyone knew that the era of loose money had to end at some point, but it wasn’t clear exactly when the markets would turn or how tight things would get. In the first half of 2007 there were news stories which speculated on the end of loose money. The writing was on the wall. Northern Rock could have switched strategy in the first half of 2007, stopped writing so much new business, expanded its deposit base and sought longer term funding at higher cost. It didn’t do that, it kept with the same strategy of low cost and maximum growth. When the credit markets tightened its funding dried up and shareholders lost almost everything. Maybe a late change in strategy still wouldn’t have saved it, who knows. But it would have stood more of a chance.

Giving up on growth would be disruptive and difficult. But why should we have maximizing growth as an overriding objective? As Stern said, the developing world will feel the effects of climate change first and hardest. Why are we in the rich world not taking some financial pain to help? The message that we may have to make sacrifices in our standard of living in order to reduce the risk from climate change is just not being said.

I think the analogy of wartime is useful. The enemy is climate change and it could destroy our civilization. Until that enemy is beaten, why should we in the rich world care if we are 10 or 20 percent richer or poorer, as long as we still have the necessities of life?

What is the level of risk?
I recently came across a paper by an economist called Martin Weitzman. With regard to climate change he has commented on the lack of focus on social insurance against extreme events. The link below is to his webpage. Within that there is a link to his papers. The one I am referring to is “On modelling and interpreting the economics of catastrophic climate change” – 14 January 2008. (His earlier paper from February 2007 about the Stern Review is also worth reading.)
http://www.economics.harvard.edu/faculty/Weitzman
He has looked at the climate models that went into the IPCC report and tried to quantify the uncertainty in the tails of the climate models. He has estimated ballpark figures for the 5% and 1% probability levels for climate sensitivity. These figures are 11 degrees Celsius and 20 degrees Celsius respectively, in the long term. There is of course no way that anything like our present civilization could withstand warming anywhere near these levels. I have not checked into whether his figures are reasonable, but the conclusions follow even if he is out by several degrees. The current semi-official British government target for greenhouse gas stabilization is the top end of the stabilization target recommended by the Stern Review i.e. 550ppm CO2 equivalent. This is almost a doubling of pre-industrial CO2.

So, if Weitzman’s estimation is roughly correct, it implies that the British government is willing to run at least a 5% risk of ruin (probably much higher) a stunning level of risk. It seems to me that the most likely explanation is not that they have taken a considered decision so far, it is that they just haven’t thought about it deeply enough yet. When they do, surely the stabilization target must be reduced? It makes me wonder what can be done to quickly influence the political debate about emission targets.

Discussion of motivations for action
We may believe that drastic cuts are necessary, but if for public support we depend on compassion for others far away, we may not get very far. However, I don’t think it’s necessary to appeal to altruism, I think pure self interest is enough to make people in favour of radical action. The worst case scenario from runaway climate change is surely that we lose everything, and the industrial revolution turns into an industrial bubble. If people truly understand that there is a real risk of this happening, maybe they would back more radical action?

Contingency planning for high climate sensitivity
Shouldn’t there be more planning going on for the possibility that climate sensitivity is actually in the tail of the models? There is a 50+ year time lag between putting the emissions into the air and the full warming effect. So isn’t it possible that the concentration of CO2 we have already put into the air is enough in itself to cause catastrophic runaway climate change? If that is actually the case then surely we will have to find a way to suck a large amount of GHG out of the atmosphere. In that eventuality, all the talk about stabilizing atmospheric CO2 is not good enough. Shouldn’t we be facing up to this possibility now? If so, then as Weitzman mentions, we may well be forced to use some kind of geo-engineering quick fix such as seeding clouds with sulphate to reflect heat, to buy time for a permanent solution.

At the very minimum our governments are running huge risks. It’s no defence to say that Britain can only act internationally. Britain should be acting first and leading the way. The Climate Change bill is groundbreaking and a great step forward, but the targets in the bill need to reflect the latest science and the government need to back up the words with action and urgency, and they need to communicate that to the British people in a more effective manner.

A long term perspective
From the perspective of 100 years in the future, it is quite conceivable that the entire post-war economic boom could be seen as a monumental mistake. The future generation could look back at the early 21st century and ask why we didn’t we think it worth taking a cut in living standards to save ourselves. Perhaps during the cold war it was excusable to focus on building economies, we were racing to compete against the Soviet bloc and the biggest fear was nuclear annihilation. But surely, since 1990 when the IPCC first reported, allowing greenhouse gases to continue accumulate in the atmosphere was utterly reckless – to the point of being irrational.

In the early 1990’s the rich world could have chosen to adhere to the precautionary principle and focused on emission cuts instead of growth. Perhaps just for about 20 years, until climate science had developed and we had a clearer picture of the safe limits. Instead, (borrowing Al Gore’s words from his Nobel prize acceptance speech) we chose to continue to use the atmosphere as an open sewer.

Our civilization is the first to have the benefit of modern science and modern technology, and therefore perhaps the first to have a clear early warning that our actions could cause catastrophe. We are choosing to ignore the scientists and we carry on with the patterns of behaviour that will destroy us. It looks like a triumph of human instinct over intellect. Perhaps human decision-making processes are just not designed for this kind of problem – the short term always dominates over the long-term? Perhaps the argument for strong action against climate change needs to have more emotion injected into it?

Final thoughts
Maybe we should be getting more angry about this. Given all that we know now from the scientists, isn’t it clear that our political leaders at this time are failing us? In 1940 Winston Churchill promised nothing but blood, sweat and tears in the fight to defeat the Nazis. In the 1990’s and early 21st century we have the “politics of contentment”. It surely will come to be seen as the politics of delusion. Surely the scale of threat we now face is at least as great as that faced in 1940? The environment minister Phil Woolas recently called climate change the latest example of “mutually assured destruction”. Why is it that in 2008, our politicians are not telling us that it may be worth making sacrifices to beat this problem? Why are they still feeding us the reckless nonsense that we can have more cars, more flights and more consumption every year?