, Volume 110, Issue 3-4, pp 507-521
Date: 10 May 2011

Climate policy: hard problem, soft thinking

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Climate change is more uncertain, more global, and more long-term than most issues facing humanity. This trifecta makes a policy response that encompasses scientific correctness, public awareness, economic efficiency, and governmental effectiveness particularly difficult. Economic and psychological instincts impede rational thought. Elected officials, who cater to and foster voters’ misguided beliefs, compound the soft thinking that results. Beliefs must change before unequivocal symptoms appear and humanity experiences the climate-change equivalent of a life-altering heart attack. Sadly, it may well take dramatic loss to jolt the collective conscience toward serious action. In the long run, the only solution is a bottom-up demand leading to policies that appropriately price carbon and technological innovation, and that promote ethical shifts toward a world in which low-carbon, high-efficiency living is the norm. In the short term, however, popular will is unlikely to drive serious action on the issue. Policy makers can and must try to overcome inherent psychological barriers and create pockets of certainty that link benefits of climate policy to local, immediate payoffs. It will take high-level scientific and political leadership to redirect currently misguided market forces toward a positive outcome.

For helpful comments, we thank Hunt Allcott, Richard N. Andrews, Scott Barrett, Matthew Bunn, Miriam Chaum, Peter Edidin, Nathaniel O. Keohane, Carolyn Kousky, Ruben Lubowski, Laura Malick, Thomas P. Olson, Michael Oppenheimer, Benjamin Orlove, Sam Pearsall, Christopher Robert, and participants in a decision-sciences workshop at the Environmental Defense Fund and the Columbia Climate Change Policy seminar. We also thank Lily Kelly and Jared Schor for excellent research assistance.