A new book about what we don’t know

Roulette wheel. (Image: Wikipedia)

Roulet­te wheel. (Image: Wikipedia)

Most authors of books on eco­nom­ics dis­cuss what we know, but Ger­not Wag­n­er focus­es on what we don’t. Tail events, the Black Swans, the unknown unknowns. The future.

Wagner’s new book, Cli­mate Shock, co-authored with Mar­t­in Weitz­man and soon to be released, dis­cuss­es the unfore­seen effects of human influ­ences on the envi­ron­ment. “Every oth­er book on cli­mate change that I’ve read talks about what we know. This one talks about what we don’t know.”

When cli­mate impacts hit each oth­er like domi­noes, it’s hard to pre­dict all the pos­si­ble out­comes
The book is a con­flu­ence of eco­nom­ics and envi­ron­men­tal issues by two high­ly regard­ed indi­vid­u­als in the field. Wag­n­er is the Lead Senior Econ­o­mist at the Envi­ron­men­tal Defense Fund and is an adjunct pro­fes­sor at Columbia Uni­ver­si­ty. Weitz­man is a Pro­fes­sor of Eco­nom­ics at Har­vard, and has authored numer­ous papers on envi­ron­men­tal eco­nom­ics, among oth­er top­ics. As a stu­dent, Wag­n­er stud­ied with and was a teach­ing assis­tant for Weitz­man, and said how mean­ing­ful it was to write a book with a teacher he admired.

Despite their pres­ti­gious titles and daunt­ing edu­ca­tion­al back­grounds, they aimed to write a book that is acces­si­ble and fun to read for all audi­ences. One chap­ter, 007, is actu­al­ly a screen­play. “You can laugh now about a cou­ple of econ­o­mists writ­ing a screen­play,” said Wag­n­er. “The bur­den is on the sto­ry­teller to explain in plain Eng­lish so that every­body can under­stand.”

So what will the plan­et be like with a three degree Cel­sius tem­per­a­ture increase? What about at six degrees? How much exact­ly will the tem­per­a­ture increase any­way? What are all of the con­se­quences of cli­mate change?

For­tu­nate­ly, we do know poli­cies that work to lessen risk. Swe­den, for instance, already has a high tax on car­bon.
At this point there are no defin­i­tive answers. “No seri­ous sci­en­tist will ven­ture a guess at what six degrees will be like” says Wag­n­er. The plan­et will like­ly not have an equal dis­tri­b­u­tion of tem­per­a­ture increase, but vary depend­ing on lat­i­tude, with more warm­ing at the poles (a dynam­ic that leads to more rapid melt­ing of the ice sheets).

Wag­n­er dis­cussed what he believes to be the inevitabil­i­ty of mov­ing coastal cities, like New York, to high­er ground. [See our relat­ed 2013 inter­view with geo­physi­cist Klaus Jacob.] The cheap sce­nar­io is mov­ing cities over hun­dreds of years, but the expen­sive sce­nar­io would be with­in a span of decades. Up to recent years, New York City was hit by a major storm approx­i­mate­ly every hun­dred years. It was then hit with two “100 year storms” with­in the past few years. “I can’t tell you when the next Sandy-like ‘hun­dred-year storm’ will hit,” said Wag­n­er, “but it won’t take anoth­er hun­dred years.”

The lat­est pro­jec­tions are that in fifty years inten­si­ty of storms will increase, with their coastal effects ampli­fied by a high­er sea lev­el. The range in pro­jec­tions from cli­mate mod­els spreads out the fur­ther in the future one looks, and spans safer out­comes, and more dan­ger­ous out­comes, along an under­ly­ing trend. [See NPCC report for New York’s fore­cast to 2100.] “If we knew for sure, we’d know how to pre­pare. But we don’t. There­in lies the prob­lem.”

Burn­ing fos­sil fuels increas­es green­house gas­es in the atmos­phere and increas­es the heat ener­gy of the cli­mate sys­tem. Stronger storms hit com­mu­ni­ties that had rarely expe­ri­enced extreme weath­er. It may be rea­son­able to begin to guess at how the effect ris­ing sea lev­els will affect have on coastal areas—and “aver­age pre­dic­tions are bad enough.” When the­se reac­tions hit oth­ers like domi­noes, it becomes more dif­fi­cult to say for sure what the out­come will be, but Wag­n­er points out that chances are it’ll be worse.

Climate Shock, Princeton University Press

Cli­mate Shock, Prince­ton Uni­ver­si­ty Press, March 2015

What will be the future weath­er pat­terns of a given area with more intense storms? What kind of crops can grow at each loca­tion? What’s the avail­abil­i­ty of water, and at what qual­i­ty? And we don’t just have to wor­ry about how all of this direct­ly affects humans; there are plen­ty of indi­rect ways the effects of cli­mate change can reach us. How do the­se changes affect birds, insects, plant species? If one species can’t han­dle the new world, what will that mean for the food web, or for the loss of eco­log­i­cal ser­vices? Too many fac­tors are inter­twined to be able to accu­rate­ly pre­dict how events will affect each oth­er.

We clear­ly need to inves­ti­gate the­se ques­tions, but in many ways, that miss­es the point, accord­ing to Wag­n­er. “What we know is already bad enough. There’s only so many times you can say we’re run­ning out of time before we actu­al­ly run out of time.” Instead of pin­point­ing all of the unknown unknowns, we ought to start tak­ing steps to min­i­mize dam­age.

One good anal­o­gy is to com­pare the cli­mate cri­sis to the most recent stock mar­ket crash.” The prob­lem: pri­va­tiz­ing ben­e­fits and social­iz­ing costs. There is, of course, a cru­cial dif­fer­ence. No bailout, no amount of mon­ey, can reset the state of the envi­ron­ment; not with­in our life­times.

Mean­while,  things are look­ing up, slow­ly. Car­bon pol­lu­tion lim­its are slow­ly but sure­ly spread­ing across the globe. Cap and trade poli­cies are being imple­ment­ed; even Chi­na is exper­i­ment­ing with them, and is expect­ed to announce a nation-wide cap-and-trade sys­tem next year. India set a coal tax, and though still depen­dent on coal, is now rapid­ly build­ing solar.

The Euro­pean Union already has in place a cap-and-trade sys­tem for car­bon emis­sions. Swe­den has a $150-per-ton tax on car­bon diox­ide, and – as a result – has a large­ly decar­bonized elec­tric­i­ty sec­tor. “ (See a range of car­bon tax­es in use.) Wag­n­er attrib­ut­es the large­ly decar­bonized Swe­den to the one law of eco­nom­ics: the law of demand. If price goes up, demand goes down.

Cal­i­for­nia, already a lead­er in the US for envi­ron­men­tal ini­tia­tives, caps 85% of all green­house gas­es. In Canada, British Columbia has a suc­cess­ful­ly func­tion­ing car­bon tax. Imple­ment­ing sim­i­lar sys­tems nation­wide would reap large ben­e­fits. “Pol­lu­tion isn’t free, but at the moment we are social­iz­ing those costs. We’d nev­er dream of just dump­ing our garbage on the street. We pay some­one to pick it up. Same here: put the appro­pri­ate price on car­bon pol­lu­tion.”

While nation­al poli­cies yield big­ger results, Wag­n­er encour­ages steps on the indi­vid­u­al lev­el because they cre­ate momen­tum in the right direc­tion. How­ev­er, as an econ­o­mist he does wor­ry about set­ting the right incen­tives. Any­one who has ever been on a diet can under­stand the basics. You go to the gym and have a good work­out, but lat­er you reward your­self with a cook­ie. Because you did the one action, you weren’t too con­cerned about what fol­lowed it. (Columbia’s Cen­ter for Research on Envi­ron­men­tal Deci­sions includes this human quirk in their insight­ful guide to behav­ior change and com­mu­ni­ca­tions, with the name “Sin­gle Action Bias.”)

Wag­n­er wor­ries about peo­ple per­form­ing small actions, like using a ther­mos every­day instead of dis­pos­able cups, and then miss­ing the big pic­ture, like vot­ing for a stronger cli­mate pol­i­cy. “If all the lit­tle things you do every day lead to big­ger action, great. What wor­ries me is that doing those lit­tle things dis­tracts us from doing what’s tru­ly nec­es­sary. In the end, it all comes down to set­ting the right incen­tives.”

Weitzman, left and Wagner (Ph: J Weitzman)

The authors: Weitz­man, left and Wag­n­er (Ph: J Weitz­man)

Local actions to dis­cour­age the use of plas­tic bags are a good exam­ple. “We’ve tried all sorts of things. Nam­ing and sham­ing. Telling kids to recy­cle more. The whole lot. What real­ly did the trick – in places from Ire­land to Wash­ing­ton, DC – was to charge for plas­tic bags. In many ways, it was a nom­i­nal fee, but that has made all the dif­fer­ence.”

Wash­ing­ton DC charges a fee per bag, San Fran­cis­co and Austin have banned them entire­ly. New York has already tak­en impres­sive steps with local ini­tia­tives, Wag­n­er espe­cial­ly not­ed the new bike paths and bik­ing cul­ture in the city, but there is still room for improve­ment. A bag fee could eas­i­ly be put into prac­tice, as well as a no-idling law for deliv­ery trucks to reduce emis­sions.

Wag­n­er him­self very much lives as low impact as he can, but he also knows the lim­i­ta­tions of his actions. On the inside jack­et of his last pri­or book, But Will the Plan­et Notice?, his short and very much to the point bio com­i­cal­ly said: “He doesn’t eat meat, doesn’t dri­ve, and knows full well the futil­i­ty of his per­son­al choic­es.”

By all means, recy­cle, don’t eat meat, lead the most envi­ron­men­tal­ly con­scious life you can,” said Wag­n­er, “But don’t delude your­self. In the end it’s all about set­ting the right incen­tives for the rest of us. That begins with pri­va­tiz­ing ben­e­fits and costs. Set the right price on car­bon emis­sions, and get out of the way. That’s the way to pro­tect our­selves from the worst of the unknowns.”

Pre­view a chap­ter of Cli­mate Shock.

Read a new report on what makes British Columbia’s car­bon tax suc­cess­ful.