How Can We Cope With Deep Climate Uncertainty?

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.