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Seven Questions: Planning for a Climate Catastrophe

How do you prepare for disaster when you can’t calculate the odds? With a key climate-change conference wrapping up this week in Bali, Indonesia, esteemed judge and public intellectual Richard Posner says we must confront the possibility of sudden, catastrophic global warming—even if scientists have no idea how likely such a scenario might be.

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Foreign Policy: Youve written a lot about the possibility of sudden, catastrophic warming of the planet. But as youve put it on your blog, [N]o probability, high or low, can be assigned to such a catastrophe. How, then, can policymakers, such as the people who are meeting in Bali this month to work on a successor treaty to the Kyoto Protocol, assess the likelihood that climate change will be faster and more dramatic than previously thought?

Richard Posner: Actually, most decisions we make are not based on measurable probabilities. When you get married, you cant estimate the probability of a divorce. You can look at the general statistics showing that half of all marriages end in divorce, but you cant apply that to your particular situation. So, you go ahead and get married anyway. In other words, the fact that one cant quantify the probability of a catastrophe is no reason to ignore it. We really should do something if we can afford to.

FP: So, youre basically endorsing the precautionary principle?

RP: No. I wouldnt embrace that because thats looking at things a little too broadly. You dont want to say that every time someone says theres a risk of something, prudence requires you to act. The precautionary principle has become associated with European policies that are highly questionable. For example, Europeans are very concerned about genetically altered food. There doesnt seem to be any danger in genetically altered food. Almost all the food we eat is genetically altered by selective breeding by farmers and hybridization of crops. Weve experienced genetic alteration of food for several millennia without ill consequences. But when you look at climate, its a very different picture.

FP: How so?

RP: We have a long history of pretty abrupt climate changes. One I particularly focused on in my book occurred 12,000 years ago, a very dramatic warming. But there have been lesser things. There was a kind of mini-Ice Age in the Middle Ages. So, theres a lot of built-in climate instability. Then when we start dumping huge amounts of carbon dioxide into the atmosphere, rapidly running up the concentration, were playing with fire because were adding a significant human component to the natural fluctuations of climate. The potential consequences are very extreme. So, I think its worth doing something, especially since we get a dividend. What do I mean by a dividend? The principal factor in human-caused carbon emissions is burning fossil fuels. And we have independent reasons for wanting to reduce our consumption of oil, obviously foreign-policy reasons and the instability of the worlds oil supply. So wed get a dividend if we did something about carbon emissions in addition to reducing the likelihood of abrupt global warming.

FP: Large reinsurance companies such as Swiss Re have been among the most vocal advocates in favor of curbing greenhouse gas emissions, and as weve seen in New Orleans, sudden catastrophes can have a devastating effect on local insurance industries. Could we see a broader collapse of the insurance industry as the world becomes more vulnerable to catastrophic storms and disasters due to climate change?

RP: A lot of decisions we make, we make under conditions of radical uncertainty; we can’t estimate a probability. But insurance companies, in order to set a premium, have to be able to estimate a probability. If they suddenly discover that there are catastrophic risks, the probability of which cant be quantified, theyre in a quandary. They dont know what to charge. Reinsurance is a very interesting example because its in the nature of reinsurance that reinsurance companies are insuring the very, very low risks. A good analogy is primary and secondary coverage for homeowners. You could have a homeowners insurance policy for a million dollars but if you wanted to have more protection, you could buy another five million very cheap because the risk that someone will break his head on your stoop and sue you for a zillion dollars is very small, and so the premium is very small. But that kind of secondary coverage only works as long as the risks are really very small because the premiums are geared to very small risks. So, of course reinsurers are very concerned about global warming. And the reinsurance industry is essential to the insurance industry. If you didnt have reinsurance, the insurance companies would be dealing with these long tails of risk on their own. So yes, these catastrophic risks do put insurance under a lot of pressure.

FP: How would you, as a policymaker, decide how many resources to allocate to stopping atmospheric concentration of greenhouse gases at a certain level versus spending your resources on adaptation?

RP: Thats actually the simple part. The hard part is to determine what aggregate investment of resources to make because we dont know the benefits. If you cant estimate the probability of global warming, you cant do a cost/benefit analysis. But once youve decided that the problem is serious, the question of what to do about it is, I think, a lot easier.

FP: Politicians tend to have what you call foreshortened horizons in your book. They dont plan for low probability events that may happen way off in the future, such as catastrophic climate change. Is there any way to get around that problem?

RP: I dont think you can. You have to have a disaster like a 9/11 or a tsunami or a Hurricane Katrina. Then people will pay attention to similar threats, but they wont pay attention to dissimilar threats. So, in a funny way, if you say to people that global warming is a problem and its going to unfold gradually over the course of the century, then forget any effort to try and do anything. If you ask, Could a politician put together a sellable program for dealing with global warming? I think the answer probably is no, but I can imagine it being packaged in a way that would make it a little more plausible. But the politicians dont talk about anything that is actually a national problem. Were a nation of hypochondriacs preoccupied with healthcare and immigrants and so on but when it comes to what I think are fundamental problems, politicians dont talk about them.

FP: What do you worry that scientists and policy analysts are not thinking about when it comes to climate change?

RP: I think the analysts do not give as much weight as I would to the risk of abrupt, catastrophic global warming. Theres more concern than there used to be. Since I wrote my book in 2004, most scientists have decided that the warming is occurring more quickly than they expected. Theyve been shocked by the rapidity of melting in the Arctic. Some people say that climate science is so complex and so indefinite that we really dont know what difference it makes that were dumping all this stuff into the atmosphere. But the opposite inference to draw is that precisely because the climate scientists dont have a good fix on climate, that increases the risk and thats what weve been seeing. The scientists have been surprised by the rapidity of climate change and they could be surprised by a catastrophe.

Richard Posner is a judge on the U.S. Court of Appeals for the Seventh Circuit and the author of Catastrophe: Risk and Response (New York: Oxford University Press USA, 2004).

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