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How Can We Cope With Deep Climate Uncertainty?

by Michael Levi
October 5, 2012

When you’re faced with a lot of uncertainty that’s difficult or impossible to quantify, your best bet is usually to develop a strategy that’s robust to unknowns, rather than one that tries to optimize outcomes. David Roberts had a great post last week explaining this. (It’s usually the most important frame that I use to think about public policy.) A focus on robustness, though, often runs into its own special challenges. In this post, I want to walk through one of those that’s particularly important in the context of climate change.

The basic problem is that climate policy faces at least two sets of big unknowns. The first concerns the climate itself: How much damage will a given accumulation of greenhouse gases cause? Will damages rise steadily with increasing concentrations – or are there thresholds beyond which impacts will rapidly multiply? In the presence of such unknowns, a push for robustness tends to mean a push for deeper emissions cuts, even if those might turn out to cost more than actual climate sensitivity ultimately justifies.

The second set of unknowns surrounds the relationship between public policy and the energy system. We have little idea of which policies would actually succeed in delivering particular emissions reductions – and no, “capping” emissions doesn’t guarantee any particular outcome.

Combining this source of uncertainty with the first one can quickly run you into trouble. Unknowns at the extremely ugly end of possible climate outcomes tend to drive policy toward big bets on large emissions reductions. But these sorts of bets, which take us the furthest away from past experience, are vulnerable to the biggest unknowns on the policy side. It’s difficult to completely escape this bind.

Let me flesh this out a bit with one example. Worries that climate change could be particularly ugly tend to motivate hostility to anything other than zero-carbon energy. That steers people toward embracing ambitious and expensive policies. But the policies that maximize the odds of massive emissions cuts don’t necessarily maximize the odds of more modest but still substantial ones.

Why? Pushing squarely on an immediate switch to zero-carbon fuels, and incidentally treating all fossil fuels as similar, increases the odds that if a move to zero-carbon energy doesn’t materialize quickly, you’ll be left with coal. Focusing on particularly disruptive policies because they’re the only ones that have a chance to be “strong enough” to deal with an unexpectedly sensitive climate also raises the odds of political failure, and hence also increases the chances of ultimately being stuck with the status quo. Both of these tendencies tend to shift the distribution of likely climate outcomes toward the extremes: either things end up a lot better than they’re currently on course to turn out, or our prospects don’ improve much at.

What should we do when confronted with this sort of conundrum? I have a gut sense of the answer, but am at a loss when it comes to articulating it. I suspect that it will be subject of more than one future post.

Post a Comment 7 Comments

  • Posted by The Sallan Foundation

    YES! “The second set of unknowns surrounds the relationship between public policy and the energy system. We have little idea of which policies would actually succeed in delivering particular emissions reductions – and no, “capping” emissions doesn’t guarantee any particular outcome.”
    But
    NO! “Pushing squarely on an immediate switch to zero-carbon fuels, and incidentally treating all fossil fuels as similar, increases the odds that if a move to zero-carbon energy doesn’t materialize quickly, you’ll be left with coal.”
    WHY? Think this is a straw man. Other potent variables will play into the nuts & bolts of any real world zero-carbon policy. Take just one, time frame. Just one more, success (or not) of energy-efficiency work.

  • Posted by Alan Nogee

    Great post. I’m not as concerned about negatives with pushing all-out on zero-emission resources. It’s important to win what the political market can bear. But agree about not opposing gas, because in addition to the environmental hedge value, it will reduce emissions faster during the inevitable decades-long switch to zero-carbon resources than continuing to burn coal. Most importantly, I agree that insisting on “deep enough” emissions reductions can create resistance that can unnecessarily slow, rather than accelerate, the transition. At the same time, clean energy policies, even when weak, create additional support on the ground (projects, local tax revenues, companies, jobs!) that inherently make the task of strengthening the policies politically easier. It’s most important to get on track early to the transformation that can go deep enough later.

  • Posted by Peter Wilkinson

    Mike, spot on! Perhaps for your next post to answer your conundrum, hop on a QANTAS flight and come see what the battered and bruised Australia has been through as we introduced a carbon tax (it’s coming into summer down here, so bring your swimmers!).

    Yes, we had your two arguments: for and against climate change being anthropogenic; for and against an ‘ambitious’ policy (a carbon tax introduced in July) being part of the solution. Add to that a Prime Minister and Leader of the Opposition who are more pugilists than rounded debaters and for months decision makers were gloves off with extreme views. Those middle-of-the-road people didn’t have a voice.

    But here’s the thing: now that we have a carbon tax, the issue has died down and we’ve moved on (now fighting about deficits, boat people, interest rates), so perhaps you next post will be comparative, on the Australian approach (the crash-or-crash-through argument we had to have) versus another country that has taken a ‘more modest but still substantial’ path.

  • Posted by jim

    Excellent post, Micheal. There’s little doubt in my mind that the vehement demand for a zero-emission alternative, initiated by a small subset of radical leftists, but which has ultimately gained broader appeal on the left, has poisoned the debate in the short term. People that in other circumstances might offer well-considered advice are so panicked about AGW that they’re stuck on worries about “locking in” emissions and therefore unwilling to take the small steps necessary to start the ball rolling. This has been the case for nearly two decades.

    I don’t see a solution coming any time soon.

  • Posted by jonathanikatz

    Be realistic. China and the developing world will continue to increase carbon emission. What the US and Europe do (a few percent per year reduction, perhaps) hardly makes a difference.

    Zero carbon energy (except for nuclear, which only makes electricity) is a utopian fantasy. Honestly priced, it costs several times fossil fuels. No one is willing to pay that price.

    Atmospheric carbon is going to continue to rise. We’ll adapt.

  • Posted by alg0rhythm

    The extreme ugly is a Mad max world. You got children? I’d think you’d avoid that at ALL costs. Carbon tax is a good start, but I think consumer standards on production… outlawing planned obscelesence, and mandating reusable frames is necessary. Insulation as part of housing code, enforced strictly, is the next step, as well as conversion of fuels to zero emission…. natural gas also has severe problems with water pollution, so it is not a solution to expand.

  • Posted by Robin Datta

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