Sunday, 23 November 2014

Climate change: it's not about believing. It's about risk management

There are a few things we know. And a few things we don't know. This applies to many domains in life, including climate change.

This is what we know about climate change:

1. The amount of CO2 in the atmosphere has increased exponentially since the beginning of the industrial revolution in 1760. This is man-made

2. The world's average temperature has risen with the increase of CO2 in the atmosphere. There is a clear and strong correlation between the two

Then there are a few things we don't know:

A. Is correlation also causation? From a pure static point of view, yes: we know that everything else being constant, the increase in CO2's concentration in the atmosphere strengthens the greenhouse effect and leads to a rise in average temperatures. From a dynamic point of view, we don't know with absolute certainty. And the reason is that we don't fully understand how the different gases in the atmosphere, and the different parts of the complex climate system, interact with each other. Is the atmosphere, the climate system as a whole, able to adapt to CO2's concentration increase and offset it? Does the atmosphere have an embedded bail-out mechanism that will prevent a dangerous rise in global temperatures in response to an increase in CO2 concentration in the atmosphere and rescue us all from the potential adverse consequences?

B. How comes that CO2's concentration in the atmosphere has continued to increase exponentially over the past 15 years while global temperatures remained flat?

Source: IPCC Fifth Assessment Synthesis Report, October 2014

The latter could lead us to think that standard climate models are flawed and we don't need to worry about climate change and CO2 emissions after all. Then again, absence of evidence doesn't mean that there is evidence of absence. It may just be the case that for some reason, that we don't fully understand yet, the climate system has been able to offset temporarily the increase in CO2 emissions. However, as CO2's concentration in the atmosphere continues to increase the "offset mechanism" may just break down at some point and a reversion to the trend of rising temperatures occur.

Where does all this leave us? There is no absolute certainty that there is man-made climate change, but there is a non-negligible probability that it is occurring. No negligible probability means a high enough probability for the US' National Academy of Sciences and the UK's Royal Society to claim in February 2014 that with near certainty man-made climate change is happening (here the link). They can be both wrong but since there is no one out there with more knowledge and authority to make such a claim than these two institutions (sorry guys, but this is not an ideological discussion), this means that we are facing a risk management problem. And that we can end up making two types of mistakes: we can assume that there is man-made climate change and then there isn't (error type I) or we can assume that there isn't man-made climate change and then there is (error type II). Which of the two errors would have the most devastating consequences for humanity?

If we commit error type I, we will end up spending money unnecessarily in accelerating the development of renewable energy technologies; more energetically efficient buildings, cars and electronic devices; more integrated and efficient mass transport systems - all with the aim to bring annual CO2 emissions down and towards a path consistent (at least 67% probability) with a 2°C average rise in global temperatures by 2100 relative to the 1850-1900 average (the maximum temperature increase climate scientists tend to agree is consistent with a very limited adverse impact on the environment). If we start to tackle the problem right now, it will cost us 1% to 4% of annual global GDP by 2050 (according to IPCC's 2014 Report). It will be an inefficient use of resources, sure. But it is not that we will get nothing in return. We will: better quality of air, less polluted rivers, less noisy traffic, cleaner and greener cities. A more beautiful world. There are worse ways to squander money (by the way, given that the world economy is growing, and has the potential to continue to grow, at 3.5% - 4% annually, it means that we would need to wait until 2051 to be as rich as without pursuing a "green agenda" we would already be in.....2050)

If we commit error type II, we will end up facing more frequent and severe floodings, draughts, loss of biodiversity and valuable ecosystems, shortages of potable water and food, disease outbreaks, mass migration of populations and related border conflicts, political instability, possibly wars. This may even be just a tail risk. But it is one with massive negative consequences. And the cost of hedging against it is low.

We can further argue, as Richard Tol from Sussex University does, that global warming's positive consequences over the past century have actually more than offset the negative ones: more deaths due to heat waves were more than offset by less deaths due to cold waves; the increase in atmospheric concentration of CO2, which is a powerful fertiliser, has increased global agricultural yields. And the positive effects are likely to continue to offset the negative ones for the coming decades, as long as the global temperature doesn't increase by more than 2°C, or even 3°C, relative to the 1850-1900 average, which on current trends (ignoring the last 15 years potential outlier) shouldn't happen before 2080 anyway (more than a 50% chance). Then again, even if all this was true what would be the geographic distributional effects of it? We would have a higher global agricultural production as part of Siberia's territory became highly productive agricultural land. But at the same time part of Africa and Southern Europe's agricultural land would become less fertile. Do we really want to become dependent on food from "good global citizen" Russia? It may even happen that by 2080 Russia does become an exemplary global citizen. Or not. Furthermore, what will we do after 2080 if global temperatures are then 3% above the 1850-1900 average? And rising.

The sensible conclusion can only be one: we can discuss if we should allocate scarce resources to mitigate a potentially dangerous rise in global temperatures by cutting CO2 emissions or simply to adapt to its consequences (a la Bjorn Lomborg, which basically means to help poor countries getting much richer). Or a combination of both. We can, and should, also discuss if the best way to cut CO2 emissions is by attributing massive long-term subsidies to operators of inefficient renewable energy technology (I think it's not). Doing nothing however is clearly not an option.

Will we do what is needed? Yes, we will.

Because young generations count. And because a backward looking crystal ball says so.

No matter what University campus one visits today, there is no more popular and engaging topic among students then climate change. And there is an almost unanimous view that something needs to be done to mitigate it and adapt to its consequences. These boys and girls may be too young today to have a saying in world affairs. But excessive youth is a problem that time solves. They will be the future leaders of the world. And make it happen.

Then there is the German backward looking crystal ball. In the 1980s the green party entered the German parliament. They were considered outsiders and fringe. However, by making the green topic popular they forced the traditional parties to include it in their agendas. The "greenest" German Bundesland today is arguably Bavaria - it is also the most politically conservative. Since its 2011 federal state elections, the second most conservative, Badden-W├╝rttemberg, is run by a government coalition led by party - following massive public protests about the environmental impact of a railway project that the incumbent government at the time, led by the conservative party (CDU) in power since 1953, didn't address effectively. What does this tell us? In the XXI century, citizens do care about green. And governments can't afford to ignore it.

So, dear worries about climate change: chill out. Youth counts. Beauty counts. Green is about to become mainstream.

Everything is under control.

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