Models are used by economists and climate scientists alike to create a representation of the real world. From there, various experiments or scenarios are run to inform what may happen as variables change. The accuracy of these models depends upon their fidelity to the reality they are modeling. Climate change is the most complex problem mankind has faced. Many scientific and economically based solutions are being proposed to mitigate and adapt to the crisis. But what happens when the analysis is not complete or the model neglects to include a critical factor found in reality? The following will discuss unintended consequences of one solution to climate change: cap and trade, and one adaptation strategy: geo-engineering.
The “cap” in the cap and trade system is an emissions ceiling set by the government. This ceiling decreases as time passes, to reduce the overall emissions. To decide how much each entity under the cap can pollute, a trading system, similar to the stock market has been devised. Under the currently proposed cap and trade system, the government will initially give away a certain number of permits to pollute. As the ceiling decreases, these permits will gain value and companies can buy and sell these permits depending on need or excess.
As with many economic incentives there are also perverted incentives. This can happen in the ‘offsetting’ concept in the cap and trade policy. An offset of emissions occurs when a company or other entity claims to reduce intended emissions or remove a quantity of greenhouse gas from the atmosphere. Because there is a value to pollution permits then there also exists incentive to fake the offsets and sell the permits. As Wall Street found ways to make money off of collateralized debt obligations, a carbon market with offsets could develop into something very complex and introduce many unknowns into economic models. James Hansen, outspoken NASA scientist turned activist, proposes an approach that might reduce the complexity, and therefore, the possibility of creating perverse incentives.
Occam’s razor concludes that the simplest strategy tends to be the best one. Essentially, by creating a simple strategy or solution, we make the least number of assumptions and introduce the less of the unknown. The global climate is an entity so complex, that to alter just one factor in it can alter the entire thing. The appropriate example here is, of course, how increased greenhouse gases, increase temperatures at the poles which increases ice melt, which raises sea levels, etc. Geo-engineering has become the re-appropriated term for altering the Earth’s land, air and seas to mitigate, solve, and adapt to climate change. Potential approaches include spraying sulfur aerosol in mass quantities into the atmosphere to reduce solar heat gain, constructing a giant disk in space to block the sun, and irrigating the Sahara to grow a forest in order to absorb carbon dioxide.
To see why these are dangerously complex ideas, take irrigating the Sahara as an example a Popular Science blog post:
Of course, there might be a few side effects. For one, sand from the Sahara is carried into the air, across the Atlantic, and deposited in South America. The rich dust that falls from the sky, and the rain storms caused by that dust picking up moisture during it's transoceanic journey both fertilize the Amazon rain forest. No desert, no dust. No dust, no rain forest. During that journey, the dust also feeds a variety of sea life.
Plus, the rain could cause massive swarms of locusts. Currently, wet years in the Sahara trigger serious population spikes of the destructive insects. With a permanent forest and heavy rain every year, Exodus-level clouds of locusts could spread across the entire continent.
And did I mention this would cost $2 trillion a year?
Instead of creating extremely complex, post hoc solutions to maintain our existing way of life, wouldn’t it just be easier to stop the problems at their source? It takes an amount of humility to understand that there are just some things we do not yet completely understand. To drive towards simpler solutions to complex problems is not quixotic; by employing the simper solution we get the job done and reduce the chance for unintended consequences.
A Dispatch by SSC Intern Kang Chang