You don’t always need proof that a threat exists in order to take action.
You don’t need to know everything, you just need to know enough to get moving.
In behavioural economics the common human bias towards doing nothing is called the “status quo bias”.
Faced with a difficult decision in the midst of uncertainty, people prefer to delay. And while non-action may sometimes make sense, the logical fallacy with the status quo bias is that a choice to do nothing is still a decision, and inaction can often be the most risky and costly choice of all.
One example of an existential threat faced by humanity is climate change.
Scientists first proposed the existence of human induced climate change some time during the 19th century, but it wasn’t until the late 20th century (a hundred years later) that scientists started to form a consensus view that greenhouse gases have been involved in most climate changes throughout history, and that human emissions are causing serious global warming.
If scientific predictions are borne out, then climate change could have serious effects including rising sea levels which threaten coastal cities, increasing incidence and severity of floods and droughts that threaten the food supply, and increasing levels of species extinction.
Despite the clear message coming from the scientific community (97% of climate scientists agree), and the significant damage that climate change could cause, policy makers and business people are slow to act.
The Kyoto Protocol, which was an international agreement that committed the governments of member nations to set binding emission reduction targets, was signed in 1997. However, it didn’t enter into force until 2005 and was never even ratified by the United States. Almost two decades later governments and business people continue to move slowly.
The problem is caused in part by what economists call “the tragedy of the commons”. Since each nation benefits directly in the short run from tax revenues derived from industries that emit CO2 emissions, and since the cost of environmental degradation will be borne by everyone and only in the long run, there is a strong short term incentive for each nation to pollute too much.
The other part of the problem though, which economists rarely talk about, is lack of leadership.
If we agree on balance that human induced climate change is a reality, and that the risks could be severe, then it logically follows that we will need to live in a much more carbon constained future; a future in which energy can be generated through clean technology which doesn’t produce CO2 and which doesn’t continue to put the global climate at risk.
Fortunately, there are a small number of leaders like Elon Musk (CEO of Tesla Motors and Solar City) who are pursuing new technologies with the goal of driving us forwards into a cleaner future.
Hopefully companies like Shell and others will start to take some action too.
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