Some thoughts on economic growth

According to many (for example, see the advertisement by Jeremy Leggett below) peak oil has arrived:
http://www.theoildrum.com/files/20080324%20Time%20&%20Fortune%20mags.pdf

If true, then as Leggett says, "Profound economic dislocation will result. The challenge for human civilization will be how we rebuild post-peak.". Economic depression and huge social changes could easily result within the next 10 years.

It is puzzling how such a massive problem could have either been overlooked (or perhaps deliberately suppressed) by governments. Many oil people have been talking about peak oil for years – why has there apparently been no planning and preparation for it?

Economic growth increases per capita energy use and accelerates oil depletion. Growth also drives increases in greenhouse gas emissions, which in turn are causing climate change. Either of these problems on their own could be enough to cause economic collapse and ruin. A rational economic strategy would surely put risk reduction as a higher priority than economic growth?

So I've been puzzling about why politicians are so fixated on growth when there are so many reasons to pull back. I came across this interview of Dennis Meadows. http://www.euronatur.org/Interview_Dennis_Meadows.dennismeadows_en.0.html
Meadows was one of the authors of Limits to Growth. I print an extract here. The question he was asked was why is it so difficult for people to switch from quantitative to qualitative growth:

"Decision makers who have been extremely successful at producing and managing quantitative growth are the ones who rose to positions of power through corporate and government organizations during the past decades. Now those dominant decision makers do not wish to consider that the situation has made their skills and knowledge less relevant. They deny the need for a shift to qualitative goals. Also we have developed a variety of economic data systems and decision support systems that implicitly take quantitative growth as a goal. So the numbers we focus on automatically lead us to physical expansion."

I think this goes a long way to explaining why growth is still the number one economic goal, when it no longer makes any sense for so many reasons. It also might explain why peak oil has been ignored by the current generation of leaders. Peak oil doesn’t fit with their worldview, it’s an embarrassment, it puts economic growth into reverse and it makes their strategies look silly. They are leading us full speed into complete disaster, as if driving on the motorway, seeing a warning sign then putting your foot hard on the accelerator.

The book "Limits to Growth: The 30 Year Update" makes the case that exponential growth in a finite system must come to an end. We have reached and overshot the carrying capacity of planet Earth. Because the signal that we have reached the carrying capacity of the Earth is delayed, overshoot of the limits is likely. And because the limits are permanently eroded by the overshoot, collapse becomes likely - of both population and industrial production. So the conclusion is inevitable that continuing to try to grow the economy now is a very bad idea. Doesn’t self-preservation makes a managed retreat, even if only temporary, the only sensible strategy?

I think that working in the insurance industry has perhaps given me a different point of view than many others. Insurance is an area where growth is sometimes a very bad idea. Economic growth now feels about as sensible as growing premium volume when premium rates are going down. Of course people do it anyway even though it doesn’t make sense. There's a whole fascinating area of psychology to explore there about risk perception, heuristics, decision making under uncertainty, the herd instinct etc.

There is another argument against growth in the Limits to Growth book. Economic growth doesn’t even make sense on narrow financial grounds above a certain level. This is because pollution abatement costs rise non-linearly with percentage abatement – each additional percentage of abatement costs more than the last, with the last few percentage points of abatement being extremely expensive. Climate science now tells us that CO2 cuts have to be extremely deep – at least 80% by 2050, but probably more. Economic growth drives increasing CO2 emissions. There comes a point above which the cost of abatement exceeds the additional wealth generated by the growth.

So I draw the following conclusions:
a) pursuing economic growth now makes no sense from a risk management point of view, a managed retreat is the best strategy
b) it’s no good saying that we must have growth because the economic system depends on it – whether we like it or not peak oil means that growth will stop and go into reverse very soon anyway
c) governments need to plan and manage the downturn
d) so far their risk management has appeared to be non-existent.

Public Meeting on the Climate Change bill - further thoughts

On 22nd April I attended the public meeting which was organised by Friends of the Earth to discuss the climate change bill. FoE have published a webpage with some details on their website
http://www.foe.co.uk/campaigns/climate/news/big_public_meeting.html
There were some interesting comments during the meeting which were not reported and I've written about some of these in my previous post on 27th April. In this post I've written some thoughts arising out of what was said in the public meeting. Also I look at the large gap which has opened up between the scientific advice, which clearly indicates that we already have a global emergency, and the scale of the government response to date.

Comments on the public meeting
The public meeting was partly encouraging and partly depressing. Most of what was said was fairly predictable. Hilary Benn defended the government’s record in reducing CO2 emissions by 16% since 1990. Steve Webb pointed out that if you add aviation and shipping in to the calculation, the reduction in emissions since 1990 has been just about zero.

I would think that if these guys were running the country then we’d be making more progress. Unfortunately they’re not and as Steve Webb memorably put it, in terms of the power of government departments, DEFRA is a “minnow among wolves”. I’m sure Gordon Brown thinks he is doing a good job by balancing environmental concerns against all the other issues of government. In the real world there is no balance. The laws of physics always win over the laws of economics, something I don’t think Brown takes into account.

The Conservative spokesman, Peter Ainsworth, said a couple of things which surprised me a little. The first was that he said that for the last 200 years since the industrial revolution we have treated the planet as if it was infinite and this has to change. It was great to hear him say that because it demonstrates that he understands the root cause of our problems.

The other slightly surprising comment to hear from a Conservative politician was that when someone in the audience asked about carbon rationing, Ainsworth said that it was “a good idea whose time hadn’t come yet”. The other 2 politicians agreed that the public would not accept carbon rationing yet. I think that it may help if non-politicians, perhaps intellectuals, academics, even celebrities, started saying what needs to be done.

The audience was mainly FoE members and I was a bit disappointed with the questions asked. Several people asked the same question about whether aviation and shipping should be included in the bill (Lib-Dem - yes, Con - after 5 years, Labour – yes but only after international agreement), but no-one asked about whether there should be binding annual targets instead of 5 yearly targets. No-one asked any questions about bio-fuels. No-one asked a question about what happens if the science says we need much bigger reductions in GHG emissions than are currently envisaged.

The target of the climate change bill is explicitly to keep the global temperature rise under 2 degrees Celsius, this was mentioned during the discussion. It is interesting to note that in his book published in January this year, David King (the ex-chief government scientist) has already given up on the 2 degree warming target as being “unrealistic”, because the changes necessary to hit that target are too big and just not politically possible. I am wary about accepting that for the following reason. When the Stern report was published David King recommended a CO2 equivalent stabilization target of 550ppm. He admitted in the Hot Topic book that he was wrong about the 550ppm target and he and now recommends a target of 450ppm. I think there is a good chance that he has picked the wrong target now just as he did back then.

Parallel with reserving for casualty insurance
I want to draw a parallel with a scenario of which I’ve got personal experience. That is a large insurance company setting reserves for casualty business, in a period when claims are increasing rapidly. Quarter by quarter it becomes more obvious that reserves need to be increased. Pressure on management to produce a given profit target constrains the reserve increases to less than is justified by the data. The gap between data and response gets larger and larger over time. Finally the gap becomes so large that action has to be taken, and a one-off reserve strengthening occurs, with a hit to profits. The point is that management may persist in avoiding the necessary reserve strengthening action long past the point when it is clearly necessary to any informed party.

Perhaps some lessons can be learned from the psychology of the reserving situation. Anchoring is probably involved i.e. reserve estimates are dragged towards the current value which slows down the rate of adjustment. Radical action may be postponed if a situation is getting gradually worse rather than suddenly deteriorating.

It strikes me that there are similarities with the situation the world is in now. The data is telling us that a particular course of action is necessary but so far politicians are not making the necessary changes. With every day that passes the gap between data and response gets larger, and it becomes more and more obvious governments are getting it wrong. They are not facing up to reality and are not dealing with the situation and frankly I’m sick of it.

See below for a report on the UK government’s response to climate change from the Benfield UCL Hazard Research Centre, published in 2007. This report shows that unless changes are made the UK Governments plans for GHG reductions are “doomed to failure”. A 30% cut may not be reached until 2050. As far as I’m aware not much has changed since this report.
http://www.benfieldhrc.org/climate_change/uploads/Greenwash_Report.pdf
http://www.channel4.com/news/articles/dispatches/greenwash+executive+summary++report/267708#fold

How much is it worth paying?
In his review of the economics of climate change 18 months ago Nicholas Stern recommended that the world spend 1% of GDP to avoid climate change. Since we could not expect very poor countries to spend much, this surely must mean that he was recommending that rich countries spend more than 1% of GDP?

Recently Stern admitted that he underestimated the risk from climate change in his review.
http://uk.reuters.com/article/domesticNews/idUKGOR65702120080416?sp=true
Surely a corollary of that is that he now believes it is worth spending more than 1% of world GDP on this problem. How much more? 5%, 10%, 20%? It would be interesting to ask him and find out what he thinks now. Shouldn’t there at least be a public debate about whether it is better to deliberately postpone consumption and redirect and mobilize the economy to fight this problem, rather than wait until an economic collapse is forced on us? No-one seems to want to say the obvious i.e. it is entirely logical that we in the rich world should pay a big slice of our incomes as an insurance premium against catastrophe. That means we will get poorer in the short term but it is a price worth paying.

Since I wrote the above I read an apposite article in Time Magazine, in a special edition devoted the environment; http://www.time.com/time/specials/2007/article/0,28804,1730759_1731383_1731363-1,00.html.
The article suggests that the US economy should be refocused to fight the war against climate change in a way reminiscent of the "overnight conversion of the World War II". It also suggests spending 2-3% of US GDP on the problem "for some time". It's great to see a mainstream publication like Time publishing such an article.

Public Meeting on the Climate Change bill, 22nd April 2008

The meeting was organised by Friends of the Earth and chaired by Anne McElvoy, editor of the Evening Standard. The location was the Friends Meeting House, 173 Euston Road.

Anne McElvoy – Executive Editor of the Evening Standard

Tony Juniper – Director of Friends of the Earth
Hilary Benn – Secretary of State for Environment, Food and Rural Affairs
Peter Ainsworth – Conservative Shadow Secretary of State for Environment, Food and Rural Affairs
Steve Webb – Liberal-Democrat Shadow Secretary of State for Environment, Food and Rural Affairs

This was a public meeting to discuss the Climate Change Bill. The Bill has been through the House of Lords and will be debated be debated in the House of Commons this year.

The format of the public meeting was for each of the four speakers to speak for a maximum of 10 minutes, after which the discussion was opened up to the floor for questions. The FoE website contains some highlights of the discussion. http://www.foe.co.uk/resource/press_releases/1000_londoners_in_heated_c_23042008.html

Following are some notes I made from the meeting, including some interesting comments which were not reported in the FoE article.


Initial Speeches

Tony Juniper
Nicholas Stern said last week that he did not go far enough in his 2006 review. http://uk.reuters.com/article/domesticNews/idUKGOR65702120080416?sp=true

International trading should not be a major part of targets for emission reductions. It should be above the targets set.

Hilary Benn
Defended the use of international trading by saying that the Earth does not mind where emission cuts are made.

Global social justice should determine the split of emissions that everyone is allowed to make. The current split of emissions between rich and poor nations is inequitable.

The Labour government has made good progress in that emissions in 2010 are projected to be 16% below the level in 1990, significantly better than the Kyoto target of 10%.

Some people say that if Britain goes first and acts now against climate change this will hurt the economy and put Britain at a disadvantage to those countries that do not act. Similar arguments were made about the slave trade before it was abolished. Yet when Britain was the first to ban slave trading it did not hurt the British economy, but it did encourage other countries to do the same.

Peter Ainsworth
Listed the areas where the Conservatives, in partnership with the Liberal Democrats, strengthened the Climate Change Bill during its passage through the House of Lords:
*Strengthened the climate change committee,
*Added a duty to engage with the public,
*Added a duty to publish the advice that is given to government,
*If government disagrees with the committee it will have to say why
*Added sectoral targets
*Annual reports including an assessment of progress
*An adaptation sub-committee
*A cap on carbon trading of 30% [he admitted that this cap has no scientific basis]
*The PM to be given a pivotal role
*The first clause of the bill was changed to state that the aim of the Act is to restrict the increase in global temperature to less than 2 degrees Celsius above pre-industrial levels.

Targets should be set by scientists not by politicians. No serious observer believes that a 60% cut in emissions by 2050 will be enough.

He finished by attacking the current government’s apparent hypocrisy of making grand speeches about climate changes then ushering in an expansion of Heathrow and other airports, allowing the first new coal fired power station in a generation and allowing a bio-fuels policy that will sacrifice the orang-utan.

Steve Webb
DEFRA is a “minnow among wolves” - a deliberately mixed metaphor! It is a piddling department that is broke and is having to bail out farm payments by cutting back on energy efficiency payments.

The government have produced an energy bill that does not mention energy efficiency!

The Liberal-Democrats proposed that the climate change bill should be amended to specify an 80% cut in emissions by 2050. The Conservatives abstained, hence the Bill still currently has the inadequate 60% target in it.

If aviation and shipping are included in calculations of emissions, then current UK emission levels are the same as in 1990. No progress has been made at all during the last 18 years.



Question and Answer Session
What enforcement mechanisms are envisaged for the climate change act?
There is no legal sanction currently envisaged. Public opinion is the only court to which this bill will be held.

The Conservative former Chancellor of the Exchequer Nigel Lawson has recently published the book “An Appeal to Reason” which dismisses climate change as scare-mongering http://www.timesonline.co.uk/tol/news/politics/article3778985.ece. What is Peter Ainsworth’s response to this?
PA noted the odd fact that a large proportion of British climate change sceptics are part of the Lawson family. He has debated with Lord Lawson and has the following response. “You disagree with 2,500 world class scientists who have devoted their careers to understanding this problem. Are you a scientist? No. End of argument.”

What about carbon rationing as part of the solution?
PA Carbon rationing is a good idea whose time hasn’t come. The public objection to such a measure would make the poll tax riots look like a tea party.
The other politicians agreed that carbon rationing was not yet a viable policy.

TJ The public should be educated a lot more on the benefits of early action on climate change.

Shouldn’t we be consuming and using less “stuff” as part of the solution?
PA replied that he had attended the Johannesberg conference on sustainable development. We must aim for sustainable consumption and live within a finite Earth. We have spent the last 200 years since the industrial revolution behaving as if the World is infinite. We have got to start using less stuff and being smarter about what we do use.

SW “Vote for the Lib-Dems and we will make you use less stuff” is probably a second-term Liberal-Democrat strategy! Using less stuff is the destination, but it is a long route to get there.

TJ We live in a consumer culture. Having more material goods is a sign of status. The government could influence the public by controlling advertising. For example, most car adverts are for cars in the most polluting tax bands E and F, as these expensive luxury cars have larger profit margins. We put health warnings on cigarettes, what about putting health warnings on Porsches.

Nicky Gavron, deputy mayor of London
This was not so much a question as a statement of what London is doing regarding climate change policy. London has a target of a 60% emission reduction by 2025. They are setting up a group of 40 of the biggest polluting cities (the "C40" group) to collaborate on anti-climate change measures.

Shouldn’t aviation and shipping be included in the climate change bill?
SW Agreed. We cannot allow the Secretary of State to decide that aviation and shipping should not be included within the climate change bill.

HB Aviation and shipping must be dealt with by international agreement, because planes and ships have a choice as to where they refuel. If fuel is highly taxed in the UK they will simply re-fuel in other countries with lower fuel tax rates.

An Actuarial View on Climate Change

This post is a summary of my personal views about climate change. I have tried as far as possible to use actuarial thinking to form opinions based on the science and data. Some comments reflect a degree of frustration with the way our politicians are handling this issue.

A few main points are listed below followed by more in depth discussion:

1. CO2 was not seriously perceived as a potential problem until the post-war economic boom was well underway. By the time the danger was recognized, our society had become addicted to rapid economic growth powered by fossil fuel consumption. The addiction to fossil fuels (as recently admitted by George Bush when he stated that the US is "addicted to oil") has warped our perception of the issues.

2. Risk is being misperceived on a large scale. There are parallels with other situations familiar to us from an insurance point of view e.g. asbestos. Psychological biases such as the availability heuristic and denial may be partly causing this.

3. There is a danger in continuing to focus on maximizing economic growth instead of switching strategy to minimize risk. A parallel can be drawn with Northern Rock. Rapid and successful growth for years, followed by collapse, arguably caused by a failure to change strategy.

4. The changes needed are so radical that only massive government action can make a real difference. The British government are making all the right sounds but are not taking enough urgent action. Recommendations for personal action should be primarily political – write to your MP, ask for a stronger climate change bill, lobby for more aggressive action, support new laws, taxes and restrictions etc.

5. Massive engineering projects (at huge cost) may be needed to solve the problem. The scale of action needed is huge. There is currently not enough sense of urgency; even the CBI point this out in their recent report on climate change.

Why actuaries may have a good insight into climate change issues
I believe that actuaries should have a better insight into the issues than many others, for several reasons, for example actuaries are used to dealing with tails of distributions. Also actuaries try to base their conclusions upon a clear headed view of the data free of psychological bias, even if it makes them unpopular.

No government of any large country is yet taking this seriously enough. They seem to be content to run massive risks with our future – much larger than any insurance company would consider. I think that at the moment they are locked into thinking in a way that is outdated, always constrained by what is “politically possible”, and they just haven’t thought deeply enough about the issues.

Surely this is now an emergency situation? I believe that things will move quickly now (the accelerated melting of polar sea ice is a signpost, one recent study estimated the North pole could be ice free in the summer by 2013 or even sooner). It will become obvious that this is not a problem for future generations, it will have to be dealt with within the next few years. We will either solve the problem within our lifetimes or we will see it spiral out of control.

I can easily imagine a situation where the carbon sinks start failing badly (for example, from a rapid increase in forest fires and die off of vegetation due to summer drought). The rate of increase of CO2 concentration would accelerate. We would then desperately try to cut back on CO2 emissions. However, if enough positive feedbacks had been triggered, a cutback in anthropogenic greenhouse gas emissions would no longer have much effect (there is a good explanation of this by the climate scientist David Wasdell on the Big Picture website). Perhaps the horror of this situation is so great that we don't really believe it could happen?

Is economics the best way to approach climate change?
As a separate document I have written some comments on the Stern Review on the economics of climate change.
http://oliver-climatechange.blogspot.com/
The commentary attempts to show how Stern's conclusions do not logically follow from the body of the report.

So far economists have carried out much of the debate about climate change. I would argue that it is not primarily an economic problem, or at least that the problem is with a limitation in conventional economics. Economics is a social science, it studies the interactions of humans with each other. Elements such as pollution are “externalities” and have to be added in to the analysis. The primary issue in this instance is a constraint in the physical world, not an issue relating to the economic interaction between people.

In his review of the economics of climate change, Nicholas Stern said that climate change is the biggest market failure the world has ever seen. Since the primary function of economics is the study of markets, then is it not fair to say that climate change is the biggest failure of conventional economics? Stern does a good job of thinking around the issues and recognizing that this is unlike any other economic problem. He recognizes that the normal tools of economic analysis, such as a discount rate based on the rate of investment return, do not necessarily apply when looking at the fate of the whole planet. I would go further and say that economics is not the right starting point for thinking about the problem.

The fundamental problem is that the exponentially growing world economy is bumping up against the limits of the finite physical world. There is an apposite quote by the philosopher and economist Kenneth Boulding “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist”.

The starting point of any discussion of climate change should be the physical world, based on science. We should first understand the limits of what is possible. Then we should decide how much risk we are prepared to take. Only then do we ask the economists, what is the best and cheapest way to achieve our goals. The sequence then becomes:

1. Decide that we want to preserve the world as far as possible as it is, preserve our food supply and prevent a large rise in sea-level and changes to weather patterns such as the monsoon.

2. Find out what is the maximum level of GHG we can allow to accumulate in the atmosphere before there is an unacceptable level of risk that these objectives will not be met.

3. Determine what are the cuts needed to stabilize at that level.

4. Use the economists to engineer the change in the economy to achieve the objectives. The economists’ role is to find a way to change the economy rapidly enough to reach the goals while avoiding economic or social collapse.

Right now it feels as though the tail is wagging the dog. The discussion is all about the cost of combating climate change. I want to keep the world as it is. I don’t want a different planet. I don’t want an economist telling me this or that target costs too much. If it comes down to a choice between reduced wealth or protecting the climate, then I want to at least have a debate.

Risk vs Growth
In researching this I came across the website of a French energy consultant called Jean-Marc Jancovici. He has some good essays on climate change and energy related issues. I’ve put links to two of them below.

The first article discusses how emissions are linked to GDP growth and whether it is possible to grow an economy while reducing emissions.
http://www.manicore.com/anglais/documentation_a/greenhouse/growth.html

The second essay details what was in the original Club of Rome “Limits to Growth” report, which was released more than 30 years ago. I think it now looks quite prescient.
http://www.manicore.com/anglais/documentation_a/club_rome_a.html

I think it is a fair question to ask, why are governments in the rich world still pulling the “Maximise Growth” levers, when the risk of collapse is so great? Just because maximising growth has been good for us for the last 200 years, doesn’t mean it still is now – the past is no longer a good guide to the future.

Of course, in the developing world economic growth is still hugely beneficial for the population. But in the rich world I believe it has become a fetish. The assumption that growth is good underlies every story about the economy – it’s just not true any more. A recent example; in a newspaper last week there was a headline about the SocGen rogue trader, which said something like “The man who saved the world”. The meaning of the article was that the rogue trader forced the hand of the Federal Reserve to cut interest rates by 0.75%, and thereby averted a recession and “saving” the world economy.

As far as I can see, we are now in a situation where any boost to the world economy increases emissions and therefore increases risk, not decreases it. When the media or politicians talk of risk to the economy they are referring to the risk of increased inflation or unemployment, over a timespan of a few years. The worst case risk from climate change is a permanent change to the Earth, partial or complete economic collapse, massively increased damage from natural disasters, enormous population migrations, and great loss of life etc. When assessing risks, if you focus on the smaller risks and ignore the larger then you’re not really dealing with risk at all.

Northern Rock
I think it’s interesting to look at Northern Rock as an example of a strategy for growth which went wrong. The business model at Northern Rock was for low costs and high growth funded mainly by capital markets. This worked beautifully for many years. Northern Rock grew rapidly and made large profits. Everyone knew that the era of loose money had to end at some point, but it wasn’t clear exactly when the markets would turn or how tight things would get. In the first half of 2007 there were news stories which speculated on the end of loose money. The writing was on the wall. Northern Rock could have switched strategy in the first half of 2007, stopped writing so much new business, expanded its deposit base and sought longer term funding at higher cost. It didn’t do that, it kept with the same strategy of low cost and maximum growth. When the credit markets tightened its funding dried up and shareholders lost almost everything. Maybe a late change in strategy still wouldn’t have saved it, who knows. But it would have stood more of a chance.

Giving up on growth would be disruptive and difficult. But why should we have maximizing growth as an overriding objective? As Stern said, the developing world will feel the effects of climate change first and hardest. Why are we in the rich world not taking some financial pain to help? The message that we may have to make sacrifices in our standard of living in order to reduce the risk from climate change is just not being said.

I think the analogy of wartime is useful. The enemy is climate change and it could destroy our civilization. Until that enemy is beaten, why should we in the rich world care if we are 10 or 20 percent richer or poorer, as long as we still have the necessities of life?

What is the level of risk?
I recently came across a paper by an economist called Martin Weitzman. With regard to climate change he has commented on the lack of focus on social insurance against extreme events. The link below is to his webpage. Within that there is a link to his papers. The one I am referring to is “On modelling and interpreting the economics of catastrophic climate change” - 14 January 2008. (His earlier paper from February 2007 about the Stern Review is also worth reading.)
http://www.economics.harvard.edu/faculty/Weitzman
He has looked at the climate models that went into the IPCC report and tried to quantify the uncertainty in the tails of the climate models. He has estimated ballpark figures for the 5% and 1% probability levels for climate sensitivity. These figures are 11 degrees Celsius and 20 degrees Celsius respectively, in the long term. There is of course no way that anything like our present civilization could withstand warming anywhere near these levels. I have not checked into whether his figures are reasonable, but the conclusions follow even if he is out by several degrees. The current semi-official British government target for greenhouse gas stabilization is the top end of the stabilization target recommended by the Stern Review i.e. 550ppm CO2 equivalent. This is almost a doubling of pre-industrial CO2.

So, if Weitzman’s estimation is roughly correct, it implies that the British government is willing to run at least a 5% risk of ruin (probably much higher) a stunning level of risk. It seems to me that the most likely explanation is not that they have taken a considered decision so far, it is that they just haven’t thought about it deeply enough yet. When they do, surely the stabilization target must be reduced? It makes me wonder what can be done to quickly influence the political debate about emission targets.

Discussion of motivations for action
We may believe that drastic cuts are necessary, but if for public support we depend on compassion for others far away, we may not get very far. However, I don’t think it’s necessary to appeal to altruism, I think pure self interest is enough to make people in favour of radical action. The worst case scenario from runaway climate change is surely that we lose everything, and the industrial revolution turns into an industrial bubble. If people truly understand that there is a real risk of this happening, maybe they would back more radical action?

Contingency planning for high climate sensitivity
Shouldn’t there be more planning going on for the possibility that climate sensitivity is actually in the tail of the models? There is a 50+ year time lag between putting the emissions into the air and the full warming effect. So isn’t it possible that the concentration of CO2 we have already put into the air is enough in itself to cause catastrophic runaway climate change? If that is actually the case then surely we will have to find a way to suck a large amount of GHG out of the atmosphere. In that eventuality, all the talk about stabilizing atmospheric CO2 is not good enough. Shouldn’t we be facing up to this possibility now? If so, then as Weitzman mentions, we may well be forced to use some kind of geo-engineering quick fix such as seeding clouds with sulphate to reflect heat, to buy time for a permanent solution.

At the very minimum our governments are running huge risks. It’s no defence to say that Britain can only act internationally. Britain should be acting first and leading the way. The Climate Change bill is groundbreaking and a great step forward, but the targets in the bill need to reflect the latest science and the government need to back up the words with action and urgency, and they need to communicate that to the British people in a more effective manner.

A long term perspective
From the perspective of 100 years in the future, it is quite conceivable that the entire post-war economic boom could be seen as a monumental mistake. The future generation could look back at the early 21st century and ask why we didn’t we think it worth taking a cut in living standards to save ourselves. Perhaps during the cold war it was excusable to focus on building economies, we were racing to compete against the Soviet bloc and the biggest fear was nuclear annihilation. But surely, since 1990 when the IPCC first reported, allowing greenhouse gases to continue accumulate in the atmosphere was utterly reckless - to the point of being irrational.

In the early 1990's the rich world could have chosen to adhere to the precautionary principle and focused on emission cuts instead of growth. Perhaps just for about 20 years, until climate science had developed and we had a clearer picture of the safe limits. Instead, (borrowing Al Gore's words from his Nobel prize acceptance speech) we chose to continue to use the atmosphere as an open sewer.

Our civilization is the first to have the benefit of modern science and modern technology, and therefore perhaps the first to have a clear early warning that our actions could cause catastrophe. We are choosing to ignore the scientists and we carry on with the patterns of behaviour that will destroy us. It looks like a triumph of human instinct over intellect. Perhaps human decision-making processes are just not designed for this kind of problem - the short term always dominates over the long-term? Perhaps the argument for strong action against climate change needs to have more emotion injected into it?

Final thoughts
Maybe we should be getting more angry about this. Given all that we know now from the scientists, isn’t it clear that our political leaders at this time are failing us? In 1940 Winston Churchill promised nothing but blood, sweat and tears in the fight to defeat the Nazis. In the 1990’s and early 21st century we have the “politics of contentment”. It surely will come to be seen as the politics of delusion. Surely the scale of threat we now face is at least as great as that faced in 1940? The environment minister Phil Woolas recently called climate change the latest example of “mutually assured destruction”. Why is it that in 2008, our politicians are not telling us that it may be worth making sacrifices to beat this problem? Why are they still feeding us the reckless nonsense that we can have more cars, more flights and more consumption every year?