I’m continuously irked by calls for R&D to save us from climate change. Yes, we need it very badly, but it’s no panacea. Without other signals, like a price on carbon, technology isn’t going to do a lot. It’s a one-legged dog. True, we might get lucky with some magic bullet, but I’m not willing to count on that. An effective climate policy needs four legs:
- Prices
- Technology (the landscape of possibilities on which we make decisions)
- Institutional rules and procedures
- Preferences, operating within social networks
When I wrote that list down, it reminded me of Dana Meadows’ list of leverage points in systems. I’m a bit of a heretic, in that I don’t agree with the ordering of the list. In fact, I’m not even sure that it’s possible to come up with a general ordering for nonlinear dynamic systems. Nevertheless, I find it very useful in practice for pondering whether the solutions proposed for a problem are operating at the right level. In the case of climate, I think the reason we don’t have much of 1 through 4 above is that we don’t have much of 4 through 1 below:
Leverage points to intervene in a system (in increasing order of effectiveness)
12. Constants, parameters, numbers (such as subsidies, taxes, standards)
11. The size of buffers and other stabilizing stocks, relative to their flows
10. The structure of material stocks and flows (such as transport network, population age structures)
9. The length of delays, relative to the rate of system changes
8. The strength of negative feedback loops, relative to the effect they are trying to correct against
7. The gain around driving positive feedback loops
6. The structure of information flow (who does and does not have access to what kinds of information)
5. The rules of the system (such as incentives, punishment, constraints)
4. The power to add, change, evolve, or self-organize system structure
3. The goal of the system
2. The mindset or paradigm that the system — its goals, structure, rules, delays, parameters — arises out of
1. The power to transcend paradigms
Most of climate policy and public perception as I see it is operating near #12, trying to preserve economic growth (#7), facilitated by deficiencies in #6 to ignore #9. Integrated Assessment Models focus on prices and technology, largely neglecting a variety of institutional factors that obstruct the response to carbon and energy prices and constrain the adoption of technology. They take preferences as a given and thus neglect the possibility of social change complementing (or driving) technical and institutional change.
The reason we don’t have an effective price on carbon is not that it’s suboptimal to do so. It’s that getting to a price that would actually do something will take a massive paradigm shift – the tail that wags the dog. So, I’ll continue to like #12, but from here on out I’ll be working a lot harder on #6 as a path to #1.
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