Abstract
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.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Acemoglu D, Aghion P, Bursztyn L, Hemous D (2010) The environment and directed technical change. Working Paper, April 28
Akerlof GA, Dickens WT (1982) The economic consequences of cognitive dissonance. Am Econ Rev 72(3):307–319
Allcott H, Mullainathan S (2010) Behavior and energy policy. Science 327(5970):1204–1205
Bar-Eli M, Azar OH, Ritov I, Keidar-Levin Y, Schein G (2007) Action bias among elite soccer goalkeepers: the case of penalty kicks. J Econ Psychol 28(5):606–621
Barrett S (2007) Why cooperate? Oxford University Press, Oxford
Berger A, Brown C, Kousky C, Zeckhauser R (2011) The challenge of degraded environments: how common biases impair effective policy. Risk Anal. doi:10.1111/j.1539-6924.2010.01477.x
Center for Research on Environmental Decisions (CRED) (2009) The psychology of climate change csommunication: a guide for scientists, journalists, educators, political aides, and the interested public. Columbia University, New York
Environmental Defense Fund (EDF) (2009) Turn toward climate safety. (http://www.edf.org/documents/10483_Turn_Toward_Safety.pdf)
European Climate Foundation (ECF) (2010) Roadmap (2050) (www.roadmap2050.eu)
Festinger L (1957) A theory of cognitive dissonance. Stanford University Press
Hardin G (1968) Tragedy of the commons. Science 162(3859):1243–1248
Hatfield-Dodds S, Morrison M (2010) Confusing opportunity costs, losses and forgone gains: assessing the effect of communication bias on support for climate change policy in the United States and Australia. CCEP Working Paper 9.10, Centre for Climate Economics & Policy, Australian National University
Jaffe A, Newell R, Stavins R (2005) A tale of two market failures: technology and environmental policy. Ecol Econ 54:164–174
Kahneman D, Tversky A (1972) Subjective probability: a judgment of representativeness. Cogn Psychol 3(3):430–454
Kahneman D, Tversky A (1979) Prospect theory: an analysis of decision under risk. Econometrica 47(2):263–292
Kahneman D, Knetsch JL, Thaler RH (1990) Experimental tests of the endowment effect and the coase theorem. J Polit Econ 98(6):1325–1348
Kemeny J, (Comission Chair) et al. (1979) The need for change: the legacy of Three Mile Island. Report of the President’s Commission on the Accident at Three Mile Island
Kousky C, Cooke R (2009) The unholy trinity: fat tails, tail dependence, and micro-correlations. RFF Working Paper 09–36
Krosnick JA (2010) The climate majority. New York Times op-ed, June 8
Leiserowitz A (2004) Before and after the day after tomorrow: a U.S. study of climate change risk perception. Environment 46(9):22–37
Leiserowitz A (2005) The international impact of the day after tomorrow. Environment 47(3):41–44
Lenton TM (2007) Tipping elements in the Earth’s climate system. PNAS 105(6):1786–1793
McKinsey (2010) Unlocking energy efficiency in the U.S. economy. (www.mckinsey.com/usenergyefficiency)
Munger CT (2005) The psychology of human misjudgment. (Combined selections of three of Charles Munger’s talks). (http://files.arunbansal.com/pdf/mungermisjudgment.pdf)
Murray BC, Newell RG, Pizer WA (2008) Balancing cost and emissions certainty: an allowance reserve for cap-and-trade. Rev Environ Econ Policy. doi:10.1093/reep/ren016
Oppenheimer M, Todorov A (2006) Global warming: the psychology of long term risk. Clim Change 77:1–6
Patt A, Zeckhauser R (2000) Action bias and environmental decisions. J Risk Uncertain 21(1):45–72
Pigou AC (1912) Wealth and welfare. Macmillan Company, London
Pooley E (2010) The climate war: true believers, power brokers, and the fight to save the earth. Hyperion, New York
Raihani N, Aitken D (2011) Uncertainty, rationality and cooperation in the context of climate change. Clim Change. doi:10.1007/s10584-010-0014-4
Sterman JD (2008) Risk communication on climate: mental models and mass balance. Science 322:532–533
Stern N (2007) Stern review report on the economics of climate change. Cambridge University Press, Cambridge
Sterner T (2009) In defense of sensible economics. In: Touffut J-P (ed) Changing climate, changing economy. Edward Elgar, Cournot Centre for Economic Studies
Summers L, Zeckhauser R (2008) Policymaking for posterity. J Risk Uncertain 37(2):115–140
Sunstein CR (2007) Worst-case scenarios. Harvard University Press, Cambridge
Sunstein CR, Zeckhauser R (2011) Overreaction to fearsome risks. Environ Resour Econ 48(3):435–449
Tversky A, Kahneman D (1974) Judgments under uncertainty: heuristics and biases. Science 185(4157):1124–1131
Weber E (2006) Experience-based and description-based perceptions of long-term risk: why global warming does not scare us (yet). Clim Change 77:103–120
Weinstein ND (1980) Unrealistic optimism about future life events. J Pers Soc Psychol 39(5):806–820
Weitzman ML (2009) On modeling and interpreting the economics of catastrophic climate change. Rev Econ Stat 91(1):1–19
Weitzman ML (2010) GHG Targets as insurance against catastrophic climate damages. Working Paper, June 3, 2010
Yohe G, Tol R (2007) Precaution and a dismal theorem: implications for climate policy and climate research. Working Paper FNU-145. Research unit Sustainability and Global Change, Hamburg University, Hamburg
Zeckhauser R, Viscusi KW (1990) Risk within reason. Science 248(4955):559–564
Author information
Authors and Affiliations
Corresponding author
Additional information
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.
Rights and permissions
About this article
Cite this article
Wagner, G., Zeckhauser, R.J. Climate policy: hard problem, soft thinking. Climatic Change 110, 507–521 (2012). https://doi.org/10.1007/s10584-011-0067-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10584-011-0067-z