Is it possible to have sensible policy discussions about climate change?

 

Development of public policy depends to a large extent on sensible public discussion to filter out stupid proposals.  Climate change is no exception. The problem is that instead of having sensible discussions a lot of people just accuse one another of being deniers or alarmists, and use political stunts to advance or defend stupid policies.

It is easy to get the impression that most people can be classed as either deniers or alarmists, but surveys suggest to me that such extremists make up a relatively small proportion of the population of most countries. How many people get classified as deniers and alarmists is obviously influenced by the way these concepts are defined.

It makes sense to classify people as “deniers” if they claim climate change is “not a threat”. A survey by the Pew Research Center conducted in 2018 found that the percentages saying that climate change is not a threat vary substantially among the 26 countries included, from 21% in Nigeria to 3% in France and South Korea. Corresponding numbers were 16% in the U.S., 9% in Australia and 4% in Sweden.

The Pew survey found that in most countries a majority viewed climate change as “a major threat”, but it would be an exaggeration to label all those as alarmists. The people I describe as alarmists tend to say things like: “It is already too late to avoid the worst effects of climate change”. An international poll by YouGov, taken in 2019, found that people who say that vary from 20% of the population in France to 4% in Oman. Corresponding numbers were 10% in the U.S. and Australia, 8% in Sweden, 11% in Britain, and 6% in China.

False alarm

I was prompted to attempt to get a handle on the percentages of deniers and alarmists by my reading Bjorn Lomborg’s latest book, FalseAlarm: How climate change panic costs us trillions, hurts the poor, and fails to fix the planet. Lomborg sees climate change alarmism as a greater problem than denial. He suggests that the arguments of the deniers have been “thoroughly debunked” and approves of media refusing to give space to deniers. His main gripe is that media are “failing to hold climate alarmists to account for their exaggerated claims”.

However, it seems to me that different media outlets have different biases. Some pander to the prejudices of the noisy alarmists among their readers, while others pander to the noisy deniers. Unfortunately, the mass media no longer does much to promote sensible discussion of issues that have become politicized.

Lomborg’s book seems to me to advance a coherent viewpoint that could provide a basis for sensible discussion among people who are not wedded to extreme positions. His main points are as follows:

• Climate change is real. The amount of CO2 in the atmosphere affects global temperature.
• Global warming will have a negative impact on human well-being. Estimates of the likely damage from global warming by 2100 amount to a modest percentage of GDP (about 4%) if allowance is made for adaptation, fertilization (positive impacts of CO2 on crop yields and forest production) and the expanding bullseye effect (the tendency for more people to live in flood prone and fire prone areas).
• If all nations met their promises under the Paris Agreement, that would have only a small impact on global warming.
• With known technology and using the most efficient policy instrument to achieve Paris Agreement targets, the cost involved would be much higher (perhaps 3 times higher) than the expected benefits.
• There is potential for research and development to reduce the cost of green energy alternatives to use of fossil fuels. However, governments are not meeting the commitments they have made to expand relevant R&D activities.
• Carbon taxes and green energy innovation will not obviate the need for adaptation to a warmer climate over coming decades. Adaptation is a less costly option than attempting to reduce CO2 emissions to zero over the next few decades.
• Geo-engineering is worth researching as a backup plan to be used as required, e.g. if the West Antarctic ice sheet starts to melt precipitately.
• People in low-income countries will be better able to cope with the adverse impacts of climate change if they become wealthier. Holland and Bangladesh both have substantial areas of land below sea level, but Holland can afford infrastructure that enables it to cope better. 

 

My overall impression is that Lomborg has made a serious effort to focus discussion on things that are worth discussing. I have some reservations about his views, which I will mention below, but my initial focus is whether the book is generating useful discussion. I have found a couple of reviews by people who could be expected to challenge the argument that Lomborg advances.

Reviews

The first review is by Joseph Stiglitz, a Nobel prize winning economist. Stiglitz’s review was published in the New York Times. Rather than addressing the cost of current policies, Stiglitz appeals to an authority which he seems to view as infallible - an international panel chaired by himself and Lord Nicholas Stern – which apparently “concluded that those goals could be achieved at moderate cost”. I have not been able to find that conclusion in the report of his High-Level Commission, but I can’t claim to have read the document thoroughly. My brief reading left me with the impression that the costs will only be moderate if there is rapid progress in development of green technology. Stiglitz does not acknowledge that Lomborg advocates increased R&D for to promote more rapid development of green technology.

Stiglitz concludes by asserting:

“Lomborg’s work would be downright dangerous if it were to succeed in persuading anyone that there was merit in its arguments”.

Rather than engaging in sensible discussion, Stiglitz seems to me to be intent on using polemics to defend alarmism.

Surprisingly, there has been more sensible review in “The Guardian”. That review is by Bob Ward, who is associated with the Grantham Research Institute on Climate Change at the LSE. Ward combines his review of Lomborg’s book with a review of Michael Shellenberger’s book, Apocalypse Never. Ward’s remarks are somewhat offensive - he labels the authors as “lukewarmers”, promoting a “form of climate change denial”. Nevertheless, he manages to acknowledge that they make legitimate criticisms of alarmism by environmentalists. He agrees that the world should be investing more in helping poor people become more resilient to climate change. He also expresses sympathy for the view that nuclear power has a role to play in creating a zero-carbon energy system.

My reservations

The main problem I see with Lomborg’s argument relates to the use of GDP as a welfare measure. As well as the usual problems in the use of GDP in this way, there is the additional problem that many of the costs of adaptation are counted as making a positive contribution to GDP. For example, infrastructure investment to build walls to hold back rising sea levels is counted as part of GDP. As such adaptation investment comes to represent an increasing share of total investment, it will crowd out other investments that have potential to enhance human well-being.

This line of reasoning reinforces the importance of R&D that has potential to reduce the cost of alternative energy and hence to reduce the cost of mitigation. If it becomes less costly to pursue greater mitigation over the next few decades, that can obviously reduce the combined total of damage and adaptation costs over the longer term.

My other reservation relates to something that is not central to Lomborg’s argument, as outlined above, but is difficult to let pass. It is his endorsement of the proposition that “if everyone does a little, we’ll achieve only a little”. That seems to me to promote unwarranted pessimism about the likelihood of success of the polycentric approach promoted by Elinor Ostrom.

In a paper presented to the World Bank in 2009, Ostrom suggested that rather than wait for national governments to take concerted action, the best way forward was multi-layered action by individuals and firms, as well as by local, state, and national governments. The polycentric approach is messy, but there are hopeful signs emerging that it is developing sufficient momentum to facilitate effective action. The individual actions of environmentally conscious individuals may not add up to much by themselves, but they seem to be inducing an increasing number of firms to modify their behaviour. Some firms are presenting an environmentally friendly image without doing much to back it up, but others seem to be actively planning for a carbon-free future. The announcement last year by the world's largest asset management firm, BlackRock, that it will put climate change at the centre of its investment strategy, seems to me to signify a substantial change in the way the game is being played. If enough firms adopt R&D, innovation and investment strategies based on expectations of a carbon-free future, those expectations will tend to become self-fulfilling.

Bottom line

Lomborg’s book is not likely to persuade many climate change alarmists (or deniers) to modify their views, but it provides a basis for the rest of us to have sensible discussions about policy options.

Is a good person like flowing water?

The question arises from a Lao Tzu quote that I recently stumbled across:

“A person of great virtue is like the flowing water”, Tao Te Ching, Chapter 8.

The passage appeals to me because it seems to accord with my casual observation that good behaviour seems effortless for some people. That may link to Mihaly Csikszentmihalyi's theory of the flow experience where people in high challenge situations are so deeply involved in what they are doing that nothing else seems to matter. The good people I have in mind would not give much thought to judgements that others might make about their behaviour.

I will return to Mihaly Csikszentmihalyi's theory later, but first I want to look for clues about the intuitions that Lao Tzu was hoping to convey. To view the quote in context, I have chosen a translation by Red Pine (Bill Porter) who also provides readers with commentary of sages and other translators. Chapter 8 reads:

“The best are like water

 bringing help to all

 without competing

 choosing what others avoid

 they thus approach the Tao

 dwelling with earth

 thinking with depth

helping with kindness

speaking with honesty

 governing with peace

 working with skill

and moving with time

and because they don’t compete they aren’t maligned.”

 

There is no explicit mention of “flow” in that translation or in the associated commentary, but it still seems consistent with the imagery of flowing water.

In his commentary, Chuck Gullion, the Libertarian Taoist, sums it up:

“It all boils down to being content to simply be yourself. We expend way too much effort comparing and competing with others. Lao Tzu is wanting to show us a better Way. Be like water!”

Red Pine notes that some translators have difficulty in accepting that kindness is the correct word in the line “helping with kindness”, because of Lao Tzu’s professed “disdain for the social virtues”. In An Introduction to Daoist Philosophy (previously discussed here)  Steve Coutinho explains that Lao Tze opposes cultivation of the ethical virtues (including humanity and rightness) on the grounds that cultivation converts the virtues into objects of desire, thus becoming an obstacle to flourishing. Paradoxically, much of the Tao Te Ching presupposes “recognizably ethical values” (pp 64-5).

In Csikszentmihalyi's view, the flow experience requires cultivation. He suggests that the normal condition of the mind is one of informational disorder, with conflicting desires, intentions and thoughts jostling each other in consciousness. Innate talents cannot develop unless a person learns to control attention to get the heart will and mind on the same page. Flow tends to occur when a person faces a clear set of goals that require appropriate responses.

 
Csikszentmihalyi’s perception of good is activity leading to the increase of complexity and order, while evil is analogous to entropy:   

“Good is the creative overcoming of inertia, the energy that leads to the evolution of human consciousness. To act in terms of new principles of organization is always more difficult, and requires more effort and energy. The ability to do so is what has been known as virtue” (Loc 2031/2382).

The idea of evolution toward greater complexity has intellectual appeal, but “creative overcoming” seems far removed from the idea that goodness is like flowing water. Csikszentmihalyi may even be seeking to distance his view of flow from that imagery, because he suggests that the evil which causes pain and suffering usually involves “taking the course of least resistance”, for example acting “in terms of instinct alone”.

Would acceptance of the imagery of goodness as being like flowing water be likely to tempt people to view instinctive “red in tooth and claw” aspects of nature as providing reason to accept that “might is right” in human conduct?

To answer that question, it is helpful to consider the view of Zhuangzi, a Daoist philosopher who followed Lao Tzu. Zhuangzi observed that there must be genuine humanity before there can be genuine understanding of the relationship between what is human and what is natural. Coutinho notes:

“According to Zhuangzi, there is something salvageable about our humanity: it is not pure artifice. There is a central core of genuineness that is natural. When we nurture this genuine humanity, we reconnect with the natural world, become more distanced from the everyday hopes, fears, and anxieties that plague us, and are more tranquil and accepting of all our circumstances” (p 112).

As I see it, cultural evolution has left us with intuitions that it is good to be the kind of person who manages his or her own life wisely in ways that respect the natural rights of others. We greatly admire those who bring out the best in the people they interact with most closely. Our language reflects an understanding that humane conduct is ethical. Cruelty is often described as inhuman. We have come to perceive voluntary cooperation for mutual benefit as good, and predation as bad. It should be easy for us to understand that a spontaneous order evolving from the actions of free individuals is the most natural form of human society.  

In that context, the imagery of a good person being like flowing water may help people to understand that ethical conduct is integral to their human nature. That kind of imagery might help people to set goals that are consistent with their values and to stay on course toward acquiring better habits, perhaps ultimately reaching the point where goodness becomes effortless.

How good is this image of self-actualization?

When you think about Abraham Maslow’s hierarchy of needs, what is the image that appears in your mind? I expect that most people who have some knowledge of the concept would think of a pyramid in which needs are layered one on top of the other, with physiological needs at the bottom and self-actualization needs at the top. If you have no idea what I am talking about, there is no need to worry. Andy Ogden’s sailboat illustration, provided above, is better. That image has been used effectively by Scott Barry Kaufman in Transcend, his recently published book which seeking to update Maslow’s hierarchy.

Kaufman points out that the pyramid image was created by a management consultant rather than by Maslow. He argues that the pyramid “had the unfortunate consequence of reducing Maslow’s rich and nuanced intellectual contributions to a parody and has betrayed the actual spirit of Maslow’s notion of self-actualization as realizing one’s creative potential for humanitarian ends”.

I have read many books aimed at the self-help market, but Transcend has more endorsements by psychologists than any I have previously read. Those praising the book include Martin Seligman, Steven Hayes and Steven Pinker. My inner economist tells me that there must be something wrong with a book preceded by five pages of praise, but I haven’t found much wrong with this one.

Kaufman’s sailboat image captures Maslow’s idea that all needs can be grouped into two main classes, deficiency needs and growth needs. The planks of the boat represent deficiency needs and the sails represents growth (or self-actualization). 

In explaining his metaphor, Kaufman suggests:

“Life isn’t a trek up a summit but a journey to travel through – a vast blue ocean, full of opportunities for new meaning and discovery but also danger and uncertainty”.

The deficiency needs that comprise the boat, safety, connection, and self-esteem work as a dynamic system. Under good conditions they work together toward greater security and stability. Under unfavourable conditions, they can lead toward insecurity and instability, causing people to focus attention on defending themselves.

The growth needs comprising the sails are exploration, love, and purpose. Kaufman suggests that “the drive for exploration is the core motive underlying self-actualization”. It involves the desire to seek out and make sense of novel, challenging and uncertain events. Love and purpose can build on the fundamental need for exploration. Loving is noted to be a powerful force, linked to growth, compassion, coping and authenticity. Purpose is defined as “the need for an overarching aspiration that energizes one’s efforts and provides a central source of meaning and significance in one’s life”.

Kaufman sensibly emphasizes the hazards of attempting to fulfill a need for purpose without working on other areas of growth:

“It is entirely possible to choose a striving that brings out the worst in yourself and others because it is motivated by a desperate, never-ending quest to fill a deficiency in one of the security needs, whether it’s safety, belonging, or self-esteem”.

The need for transcendence is depicted as being in the sky above the sails. Kaufman suggests that transcendence “goes beyond individual growth (and even health and happiness) and allows for the highest levels of unity and harmony within oneself and with the world”. Some further explanation might be helpful for those who, like me, read that and think immediately that they don’t need mystical experiences. The transcending experiences written about are not all mystical. Kaufman notes that transcendence incorporates a “unitary continuum,” of experiences ranging from becoming engrossed in a book, sports performance, or creative activity (what psychologist Mihaly Csikszentmihalyi refers to as the flow experience), to experiencing awe at a beautiful sunset etc, all the way up to the great mystical illumination.

A particularly useful contribution of the book is to make a clear distinction between healthy self-esteem and narcissism. Kaufman points out that narcissism is not just high self-esteem, in the sense of a quiet and sturdy confidence in oneself. Narcissists feel superior; they are arrogant and unwilling to accept criticism.

In writing the book, Kaufman has drawn on Maslow’s unpublished writings to illustrate the range and depth of his thinking. This passage, written by Maslow about 50 years ago, has contemporary relevance:

 “It is … vital to emphasize that a democratic society is rooted in a set of feelings toward other people—feelings like compassion and respect. …  If we did not trust other people, if we did not like them, if we did not pity them, if we did not have brotherly or sisterly feelings for them, then a democratic society would of course be out of the question. Obviously, human history provides many examples to prove this point.”

Readers may have guessed already that I am impressed by Kaufman’s book. In my view he does an excellent job in bringing together many findings of psychologists relating to personal development. I particularly like the imagery in his use of the sailboat metaphor because it recognizes that each individual has prime responsibility for his or her own journey through life.

How is behavioral economics relevant to human flourishing?

The practitioners of behavioral economics have tended to direct their research findings mainly at “choice architects”, including paternalistic governments. For example, in their book, Nudge, Richard Thaler and Cass Sunstein adopt the term “libertarian paternalism” to propose:

“Choice architects can preserve freedom of choice while also nudging people in directions that will improve their lives”.

An example might help to clarify what a nudge involves. If the government were to invest a certain proportion of your income in a superannuation fund on your behalf this would amount to a nudge, rather than a push or a shove, if you were allowed to withdraw the funds at any time to use as you wished. Because of a tendency for people to avoid choices, or to choose default options, such an arrangement would be likely to result in more investment in superannuation than one that relied solely on tax incentives. It would do this without the interference in personal choice that is involved in compulsory superannuation, such as exists in Australia. (That example is taken from my review of Nudge.)

However, if you view human flourishing as an essentially self-directed activity, as I do, you may be sceptical about claims that such nudging can improve your life. Even if the people doing the nudging have your interests at heart, their perception of what will improve your life will not necessarily accord with your own preferences.

In the example provided above, additional transactions costs may be imposed on the person being nudged. For example, investment in superannuation might not be the best option for a young person wanting to save for a deposit on a house. Over the longer term, the value of an investment in a superannuation fund could be expected to rise to a greater extent than cash in the bank, but short term fluctuations in equity prices make superannuation a less suitable vehicle for shorter term saving. Withdrawing funds for a house deposit could result in capital losses being incurred.

Robert Sugden suggests that “something is clearly wrong if economists think that their response to the discovery of mistakes in individual decision-making must take the form of a recommendation about public policy” (The Community of Advantage, p 44). If you want to help individuals to make better decisions it makes more sense to address the information to those individuals rather than to address it to autocrats.  (I have previously discussed The Community of Advantage here, here and here.)

Sugden makes the point that nudgees (people who are nudged) do not always explain their failure to follow expert advice in terms of self-control problems. For example, an obese person who fails to follow expert advice about choosing fruit rather than cake, could explain his choice in a range of different ways that do not involve a self-control problem. If he sees nothing wrong with his choices, he has no reason to want to be nudged by having the fruit placed in a more prominent position in the cafeteria relative to the cake (p 47).

However, if the obese person acknowledges that he has a self-control problem, research findings about the influence of placement of products on consumer purchases might help him to modify his behaviour. His trusted advisers might be able to suggest how he could nudge himself to make better choices. By coincidence, earlier today, I heard a news item indicating that there is a supermarket chain in Australia that refrains from placing confectionary near checkouts. That information could be relevant to a person with an acknowledged self-control problem, who was wanting to avoid impulse purchases of confectionary.

The fact that supermarkets often place confectionary near checkouts illustrates that choice architects may not always have paternalistic motives. It should not be assumed, however, that their motives are exploitive. Supermarkets want loyal customers, so it is not likely to be in their interests to have shoppers end up feeling that they have been manipulated to make unhealthy choices and/or to spend more money than they wanted to spend. It is possible that the placement of the confectionary helps give most shoppers good feelings about their shopping experience. The nudge that one person views as manipulative may be viewed by others as benign, or even as providing a helpful reminder.

As a rule, it is good to be aware how you are being nudged in the choices you make. It is necessary to be aware that you are being nudged, as the first step in making a conscious choice to accept or reject the suggestion involved. Behavioural economics can make a useful contribution in helping to make us aware of how nudges may affect the choices we make.

Sugden suggests that behavioural economists who discover possible mistakes in individual decision-making are in an analogous situation to epidemiologists who discover an apparent causal relationship between some activity and the prevalence of an illness. The epidemiological findings are made available to the public in various ways and begin to influence behaviour prior to any public policy intervention being contemplated (p 43). 

Similarly, happiness researchers who discover that average life satisfaction of various groups is affected by factors such as leisure, or commute times, are providing information that individuals may wish to consider in the choices they make.  Individuals are likely to be affected differently, but rarely so differently that information about others is irrelevant.

Sugden acknowledges that normative economics has almost always been directed toward public decision-makers rather than private individuals, but suggests that “since economists often characterize their discipline as the science of rational choice one might expect them to recognize the potential value of helping individuals to make better decisions in their private lives” (p 43). He notes that Philip Wicksteed, one of the founders of neoclassical economics, presented economics as a study of the “general laws of the administration of resources” and insisted that these laws apply “from end to end of life”. He gave practical advice on how to avoid common mistakes in decision-making. The passage quoted above reflects the role he saw for economists in helping people to make better choices.

Sugden’s view that there is a role for economists in helping individuals to make better choices seems somewhat at variance with the view of James Buchanan. In his article “What should economists do?”, published in 1964, Buchanan argued that the theory of choice should be removed from “its position of eminence in the economist’s thought processes”. He suggested that economists should concentrate their attention on human behaviour in market relationships and other voluntaristic exchange processes, and upon the various institutional arrangements that can arise as a result of this form of activity.

I maintain the view, as previously expressed, that Buchanan is correct in identifying the heartland of economics to be concerned with voluntaristic exchange processes, but that does not rule out the potential for economists to make useful contributions in helping individuals to make better personal choices. It is in the latter context that behavioural economics is most relevant to human flourishing.