Pascal’s Wager, Gore’s Wages

“- Supposing a tree fell down, Pooh, when we were underneath it?
– Supposing it didn’t, said Pooh after careful thought.”

(The House at Pooh Corner)
photo_639_20080906The Economist in its special report argued that the world needs a new climate treaty as an “insurance policy against a catastrophe that may never happen”. A curious statement, especially in view of the sender.

First, there is little insurance policy against natural disasters; insurers know this and adjust their offer accordingly. Second, any insurance against highly unlikely events does not come cheap (this applies also to any new climate “treaty” but for other reasons).

The debate on warming, as the late Aaron Wildavsky said, is based on the inverse Cassandra rule: every possible disaster scenario ultimately claims orchestra seats, quite apart from its likelihood of materialising. Should this absurd principle come to rule public policy for the environment, Pandora’s Box is wide open (to use another Greek reference).

This means that we are no longer dealing with rationally weighted probabilities; but exclusively with the potentially catastrophic consequences of very unlikely events.

“If sea levels rise by seven meters”, says Al Gore, “then …”. Yes, indeed; the consequences would be huge for the world. But the “if” amounts to a hypothesis with no scientific basis; end of story.

Yes indeed: there is a certain probability that a good-size meteorite will hit the Earth in the next decades. True, governments could decide to build elaborate missile systems to avert potential damages. This has not been done because the cost has been judged too onerous in proportion to the risk involved.

Another quote, using a fantastic “if”:

“If we already had energy and transportation systems that met our needs without using the atmosphere as a waste dump for our carbon dioxide pollution, and I told you that you could be 2% richer, but all you had to do was acidify the oceans and risk killing off coral reefs (…) risk melting the ice-caps (…) would you take all of that environmental risk, just to be 2% richer?”
The author, Ken Caldeira (Carnegie Institution) says that no audience has yet replied yes to his question. Small wonder, because it is the wrong question and therefore a poor trade-off.

photo_9845_20091113

The proper question would be:

“Do you agree to an internationally binding treaty on climate change which would submit the global economy to a ‘world governance’ in charge of reducing CO2 emissions, the outcome of which is unknown?”

This is what Copenhagen is ultimately about.

Photos: freedigitalphotos

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About the Author: Jacob Arfwedson

Jacob Arfwedson first worked on environmental issues with the ICREI (Paris) in the early 1990s (www.icrei.org). He has published extensively on various free market issues, working with some 20 think tanks in Europe and the US for the past 20 years. He received his MA from the Catholic University of Paris before studying at the Catholic University of America (Timbro Capitol Fellowship). His articles have been published by the Wall Street Journal, the Financial Times, le Figaro and AGEFI Switzerland.