One of the great frustrations to the climate science and environmental stewardship research community is that the steady advance of solid scientific consensus about the risks of climate change warrants very little coverage. On the other hand, disasters— mega-story Sandy, heat waves, fires, and drought— get a lot of attention, even if the risk assessment literature shows how hard it is to tie individual extreme events to overall climatic trends.
Perhaps the most popular – and accurate language in common use today – is to highlight how climate trends that destabilize current weather systems is equivalent to “loading the dice” against us, and in favor of costly and potentially catastrophic extreme weather events.
Or, in other words, how can the climate community best follow Chicago Mayor and former White House Chief of Staff Rahm Emanuel’s advice of “not letting a [good] crisis go to waste”?
First, we need to recognize where this much-repeated quote connects to risk analysis and the psychology of reading the headlines. In a classic 1986 piece of research, Paul Slovic, Baruch Fischhoff, and Sarah Lichtenstein found that while people are generally pretty good at estimating damages from risk, we consistently over-emphasize the importance of rare events —such as deaths from super-storm Sandy —and consistently under-emphasize common events, like property damage due to steady beach erosion, or salt-water intrusion into infrastructure.
So how do we use this information? First, the climate science community needs to recognize how fundamental this “sensationalize the extreme and ignore the commonplace” perspective is in public response. Sandy may be just what the climate models forecast will become more common, but that only means that as more storms or droughts hit, the novelty will wear off, even if the costs continue to mount.
Second, there is a need to clarify how much individuals, corporations, and governments stand to lose in this new category of $100 billion disasters, and to make clear that the losses here warrant insurance just as much as do health risks or accidents.
This is the moment to focus on what form of insurance is least cost and of highest value. In our 2000 book, Should We Risk It? a former student, David Hassenzahl and I highlighted a range of cases where we pay for damages from unfamiliar events in ways that cost society the most. A far better strategy is to obtain insurance in ways that generate jobs and businesses.
Right now the European Union, the northeast and mid-Atlantic US states (the RGGI coalition), five Chinese provinces, California, Australia and Korea are all operating under, or on the road to implement carbon pollutions emission pricing. (Related: “California Tackles Climate Change, But Will Others Follow?”) The natural next step would be to note that carbon pricing in each of these jurisdictions is not only unlikely to cause economic hardship, in fact, it offers a means to tax what nobody wants—pollution—and perhaps even to remove taxes or fees on aspects of economic growth. However, this has been tremendously difficult elsewhere in the world. While these “first mover” countries and states play out their carbon pricing experiments, we need to listen to Rahm Emanuel and find motivations to act, for those not willing to lead on pricing externalities.
This “second mover” opportunity is where creative policy-making is vitally needed. In many cases, the benefits of greenhouse gas pollution policies are possible without making the story a battle over carbon politics. For example:
Enable Development Projects for the Global Poor
Development projects are often particularly low-cost carbon abatement opportunities. Under new World Bank President Jim Yong Kim, the global development lender has launched a more aggressive stance to integrate climate change into development.
“We will never end poverty if we don’t tackle climate change. It is one of the single biggest challenges to social justice today,” Kim told reporters on a conference call last Friday. A number of development agencies in economies where carbon prices exist are searching for low-cost carbon opportunities. Among the innovations in local development that chart carbon impacts, are clean cookstoves, sustainable forest certification, and awarding carbon credits for energy efficiency projects (“CO2 to EE”). Identifying these opportunities is a great place to meet multiple goals. (Related: “On Cookstoves, Research Paves the Way to Action,” and “The Solvable Problem of Energy Poverty“)
Design Carbon Investment Accounts for Individuals and Firms
Instead of putting carbon credits into state or federal accounts, an alternative is to place the authority to spend the tax money directly in the hands of the American people (See: “The best way to save the planet? You Decide.” This approach would make a carbon tax more palatable, equitable and efficient at reducing greenhouse gases. The average American would pay roughly $555 a year for all of the carbon used in his or her gasoline, electricity, and home heating.
But this tax money, instead of going to the U.S. Treasury, would be credited into individual “energy savings accounts.” Taxpayers could decide how best to spend the money to reduce carbon emissions, to benefit themselves and the planet. You could use your $555 toward installing solar panels on your roof, cutting your electricity bill to zero. Or you could direct your tax money to a charity that plants fast-growing trees at the equator, or to a private company that would suck up the carbon in the atmosphere and sequester it under the ocean floor. You could pool your “cooling tax” money with your neighbors and build a windmill to supply your town with electricity or a plant to supply you with a non-carbon alternative to gasoline.
Any plan that produces energy without emitting carbon, or gets rid of carbon already in the atmosphere, would qualify. Companies would compete for your business, and more would surely develop to serve the burgeoning clean-energy market.
Both of these are just examples of opportunities that the Emanuel Paradigm opens for debate and trial. Our challenge is to launch as many of these experiments as possible before the moment fades.
Daniel M. Kammen is the Class of 1935 Distinguished Professor of Energy in the Energy and Resources Group and in the Goldman School of Public Policy. He is on the board of advisors to National Geographic’s Great Energy Challenge. Kammen served as the inaugural Chief Technical Specialist for Renewable Energy and Energy Efficiency for the World Bank Group (2010 – 2011), and has served as a lead author for the Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize.