Displaying items by tag: kunich
Saturday, 13 August 2011 19:31

A Prudent Approach to Climate Change

I. INTRODUCTION

John Kunich, an accomplished poker player as well as a distinguished environmental scholar, compares climate change policy to a gamble. Indeed, in the title of his recent book, he asserts that it is the "biggest gamble of all time." See John Charles Kunich, Betting the Earth: How We Can Still Win the Biggest Gamble of All Time (2010). The metaphor is apt. Despite years of research, a great deal of uncertainty exists about the central issues posed by climate change: How large is the threat? How imminent is it? How much can the world do to reduce the dangers? At what cost? Because of these uncertainties, any effort to address climate change will inevitably be a gamble. And the stakes are enormous. If nothing is done about climate change, the planet may face environmental catastrophe. If governments intervene aggressively, attempting to eliminate virtually all greenhouse gas emissions, the result is likely to be massive unemployment.

Kunich's solution to this monumental gamble, however, is disappointing. He does not recommend taking any steps to address climate change. One may search his book in vain for a single strategy he thinks ought to be adopted to reduce the adverse effects of climate change. His article in this journal is similarly devoid of affirmative recommendations. See John Charles Kunich, Open-Eyes Environmentalism, 1 Seattle J. Envtl L.121 (2011). Rather, he counsels caution: when the nation considers what steps it ought to take, it should err on the side of doing too little rather than doing too much. He recasts the familiar errors of decision theory as Type P errors—errors from being too passive—and Type R errors—errors from being too restless—and asserts that in dealing with climate change, Type P errors are superior:

Type P errors tend to be the preferable form of risk in situations very much like what we find in the climate change matrix—very high cost of betting/intervening, low or dubious chance of success from getting involved, and significant doubt as to the existence of a genuine and serious threat. Kunich, supra note 1, at 342.

His article also recommends a hands-off approach, suggesting the government address climate change only as a last resort:

Many concerns caution us to place climate change in the "last resort" category. A combination of the uncertain efficacy of corrective measures, questions about the extent and imminence of harm resulting from the unaltered status quo, and immense expenditures and opportunity costs associated with intervention makes Type P errors the rational preference. Kunich, supra note 2, at 130.

This position rests, in essence, on two judgments—the costs of intervention are very high while the benefits of action are highly uncertain. Both judgments may be correct, but they strike me as too pessimistic. There are certainly steps the government could take that are not extremely expensive, and some of them seem to have a reasonable prospect of producing significant benefits. In other words, there may be cost-effective ways to address climate change—policies that are likely to reduce the risk of an environmental catastrophe without devastating the economy. Despite the costs and uncertainties involved, despite the size of the gamble, there may be a prudent approach to climate change. In this article, I outline one.

I begin, in Part II, by emphasizing something that Kunich fully acknowledges—the worst-case climate change scenario is truly catastrophic. If climate change is allowed to proceed without any mitigation efforts, the results could be calamitous. While the probability of such a disaster may not be high, it is not zero. There is a real risk of enormous harm to the world, its people, and its species. Given the gravity of the consequences, the implication is clear: if the governments of the world can identify policies that would reduce the risk of such a catastrophe at acceptable cost, they should pursue them.

In Part III, I consider what those policies might be. I look initially at the costs of government intervention, noting that the United States and much of the world have just emerged from a major recession and the prospects for rapid growth in employment and output in most countries remain poor. As a result, immediate, dramatic action to combat climate change would be unwise. Humanity should not, as Kunich puts it, make an "all in" bet to combat global warming; the costs to the world's economies would be too great. At the same time, in light of the risk of a catastrophe, it is far from clear that nothing should be done. In second portion of Part III, I look at the principal forms of governmental response to climate change and suggest two policies that seem likely to be cost effective: (1) limits on greenhouse gas emissions that are initially modest but gradually escalate, and (2) government support for clean energy research and development.

In Part IV, I address whether developed nations should adopt these policies (particularly the first) if China and other rapidly developing countries refuse to follow. China, India, and other emerging economies already account for a large share of greenhouse gas emissions, and these countries have expressed reluctance to take steps that would inhibit their economic growth, at least until they reach a level of development comparable to nations like the United States. Here again, Kunich is correct: the participation of these countries is sufficiently important, both to the prospects of mitigating climate change and to the United States' ability to compete in global markets, that developed nations should not take major steps without commitments from these countries. But there are diplomatic tools that can be used to encourage participation, and some may be particularly effective in inducing China and other rapidly developing nations to act.

II. THE SEVERITY OF THE THREAT

There is little doubt that the world is warming. In a recent article in the prestigious journal Nature, Quirin Schiermeier notes that "the most recent decade was the warmest on record." Quirin Schiermeier, The Real Holes in Climate Science, 463 Nature 284, 286 (2010). He also points out that the "current rate of warming is in all likelihood unique in the history of humankind." Id. To be sure, there is no definitive evidence that humans have contributed to this alarming rise in temperatures. Average world temperatures have risen before only to fall later, and these cycles occurred long before industrialization began injecting large quantities of greenhouse gases into the atmosphere. Is it possible that the globe is simply experiencing another cycle in the world's weather? Schiermeier is doubtful. He states that there is a substantial support for the fundamental conclusion that humans are warming the climate, specifically "the extreme rate of the twentieth-century temperature changes and the inability of climate models to simulate such warming without including the role of greenhouse-gas pollution." Id. at 284; see also id. at 286 ("Records of thermometer measurements over the past 150 years show a sharp temperature rise during recent decades that cannot be explained by any natural pattern.").

As Kunich emphasizes, not everyone agrees that humans have played a significant role in global warming. Nor is it certain that rising temperatures, if left unchecked for decades, would cause devastating damage to the environment and its inhabitants. There is widespread agreement, however, that climate change poses a major threat to the world. In the very title of his book, Kunich characterizes the policy decision as "Betting the Earth." See Kunich, supra note 1. His article calls climate change a "mega-magnitude" challenge that involves the "fate and survival of our planet." Kunich, supra note 2, at 122. He states: "Challenges facing the environment today are literally Earth-shaking in their magnitude, with the potential to affect the entire planet for hundreds of years to come, and beyond." Id. at 121.

Peter Singer, a prominent bioethicist at Princeton, concurs. Debating Bjorn Lomborg in The Wall Street Journal, Singer cited a World Health Organization study that found global warming has already resulted in more than a hundred thousand fatalities annually:

According to the World Health Organization, the rise in temperature that occurred between the 1970s and 2004 is causing an additional 140,000 deaths every year (roughly equivalent to causing, every week, as many deaths as occurred in the terrorist attacks of Sept. 11, 2001). The major killers are climate-sensitive diseases such as malaria, dengue and diarrhea, which is more common when there is a lack of safe water. Malnutrition resulting from crops that fail because of high temperatures or low rainfall is also responsible for many deaths. Peter Singer, Editorial, Does Helping the Planet Hurt the Poor? No, if the West Makes Sacrifices, Wall St. J., Jan. 22, 2011, http://online.wsj.com/article/SB10001424052748703779704576074333552233782.html. The counterpoint article is Bjørn EtLomborg, Editorial, Does Helping the Planet Hurt the Poor? Yes, if We Listen to Green Extremists, Wall St. J., Jan. 22, 2011, http://online.wsj.com/article/SB10001424052748703779704576074360837994874.html.

Singer also described the best known threat from global warming: rising sea levels, which would flood coastal areas, displace millions of people, and make it harder for them to obtain the fresh water they need. Singer wrote:

Fertile, densely settled delta regions in Egypt, Bangladesh, India and Vietnam are at risk from rising sea levels ... In 2007 the UN's Intergovernmental Panel on Climate Change found that a temperature rise in the range of 2 to 2.4 degrees Celsius by 2080 would put stress on water resources used by 1.2 billion people. Rising sea levels would expose, each year, an additional 16 million people to coastal flooding. A temperature rise limited to two degrees by 2080 now seems about the best we can hope for, and recently there have been alarming indications that sea level rises could be much greater than the IPCC anticipated. Singer, supra note 11.

These adverse consequences are especially troubling because they would disproportionately affect some of the most vulnerable populations on earth. Climate change, in other words, not only places the environment at risk, it also threatens to worsen the plight of the worst off, increasing economic inequality. Moreover, a warming globe will likely produce more severe storms and raise the probability of famine, two trends that could have dire consequences for many people. Finally, as Kunich notes, climate change could lead to the extinction of numerous species.

In the worst-case scenario, in short, climate change would have extreme consequences for the planet and its inhabitants—killing, dislocating, sickening, starving, or otherwise harming millions of people and extinguishing thousands of species. Although the likelihood of this scenario is unclear, it would be devastating if it occurs. On this issue, Kunich and Singer agree. In Singer's words, there is a "very real risk that climate change will turn out to be a disaster on an unprecedented scale." Id.

If nothing is done about climate change, in other words, the world would court a whirlwind. It would not be prudent to incur such a risk unless there were no cost-effective ways to mitigate it. Fortunately, that does not appear to be the case. At least two forms of governmental action, and perhaps several more, may reduce the adverse effects of climate change without incurring unacceptable costs.

III. COST-EFFECTIVE GOVERNMENT ACTION

Kunich argues that, above all else, the United States should not take drastic action to combat global warming. The nation should not make an "all in" bet, committing a large proportion of its scarce resources to stopping climate change. While Kunich may feel that no governmental action would be cost-effective, a judgment that is questionable, I agree with him that dramatic action does not make sense at the present time. The macroeconomic context is highly unfavorable to major governmental intervention.

The United States is slowly emerging from the Great Recession, one of the most serious financial crises in the nation's history and the worst since the Great Depression. The crisis led to a huge government bailout of the finance sector, a substantial drop in national output, and a large increase in unemployment. Two years into the recovery, unemployment remains high, with the ranks of the long-term unemployed larger than at any time since the 1930s. Economic growth is halting and painfully slow. Further, the federal government is incurring budget deficits that are unprecedented in absolute magnitude and proportionally higher than at any other time since World War II. In the next few years, moreover, the nation is unlikely to see a major improvement on any of these fronts. Although economic growth is likely to pick up, unemployment is likely to fall, and the deficit is likely to be reduced, no serious forecast predicts a sharp, sustained rebound in any of these areas.

At the present time, then, a ban on most greenhouse gas emissions would be unwise. Such a draconian restriction on traditional energy use would seriously harm a fragile and slow-growing economy and swell the ranks of the unemployed. While a ban would reduce the likelihood of an environmental catastrophe, the probability of such a disaster does not seem to be so high that it would be prudent to throw the economy into reverse, multiplying job losses, depressing income and wealth, and widening the government deficit. The prudent path lies somewhere between doing absolutely nothing about climate change and doing everything possible.

Some form of limited government intervention, in short, is the most the nation can handle at the present time. Indeed, with control of the government split between Republicans and Democrats, that is the most that can be accomplished politically as well. Moreover, since any climate change decision is fraught with uncertainty, any future policy should adhere, to the extent possible, to the following principles, all of which are useful in making decisions under uncertainty. First, the government should diversify its approaches. That is, an attack on the problem should come on multiple fronts rather than relying exclusively on a single approach. Second, the government should experiment. It should see how each policy works and then adjust the policy and/or the resources devoted to it accordingly. Finally, the government should seek ancillary benefits. That is, in selecting approaches, priority should be given to those that will achieve other goals. Thus, even if a policy ends up having relatively little impact on global warming, it will have positive effects in other areas.

The most promising approaches to climate change fall into three broad categories: (1) limits on greenhouse gas emissions; (2) adaptation; and, (3) clean energy research and development.

A. Limits on Greenhouse Gas Emissions

Congress could limit greenhouse gas emissions in a variety of ways. It could put a ceiling on them, it could combine ceilings with tradable emission permits (cap and trade), it could impose a tax on emissions, or it could direct the Environmental Protection Agency (EPA) to regulate them through the Clean Air Act. These methods differ in how easily they may be administered and how cost-effective they may be. In a longer article, I would compare them and evaluate their relative desirability; in this article, I will address a broader issue: How severe should the limits be? Whatever method Congress chooses, how far should the government go in attempting to reduce greenhouse gas emissions?

One prominent proposal would limit emissions to such an extent that the global mean temperature does not rise more than two degrees Celsius by the end of this century. This approach would not preserve the environmental status quo, but it would forestall more alarming temperature increases. It would also be quite costly. Studies of the issue have concluded that emissions limits of this magnitude would result in a reduction of approximately 1–2 percent in total economic output. While this sacrifice does not seem large in percentage terms, it is substantial in absolute terms. In a $15 trillion economy, a 1–2 percent reduction in GDP would mean $150-300 billion in lost output each year, a difference large enough to provide health insurance to 10–20 million families. This figure is based on the average cost to provide a U.S. household with health insurance, a figure around $14,000 a year and rising. See Press Release, Kaiser Family Foundation, Family Health Premiums Rise 3 Percent to $13,770 in 2010, But Workers' Share Jumps 14 Percent as Firms Shift Cost Burden (Sept. 2, 2010), http://www.kff.org/insurance/090210nr.cfm. A reduction in output of that magnitude could also increase unemployment by 1–2 million people. This follows from "Okun's Law," a rule of thumb developed by Arthur Okun that relates changes in unemployment to changes in Gross Domestic Product (GDP). It suggests that a percentage point decline in GDP is roughly associated with a percentage point increase in unemployment. At present, the national unemployment rate is 9.1 percent, the labor force consists of approximately 150 million people, and there are more than 13 million people unemployed. As a ballpark estimate, therefore, a decline in GDP of 1-2 percent would increase unemployment by at least 1-2 million people. Economic and employment data is compiled and published by the U.S. Dept. of Labor, Bureau of Labor Statistics. See Bureau of Labor Statistics, Employment Situation, http://www.bls.gov/news.release/empsit.toc.htm (last visited June 13, 2011).

These are large costs, and it is probably not sensible to incur them in the short run, given the state of the economy and the uncertainties about the size, impact, and reversibility of global warming that Kunich has described. It seems prudent to begin with modest measures, then increase them over time, particularly if experience (and growing knowledge of climate change) suggests that increases are in order.

Michael Porter, one of the world's leading authorities on business strategy, and Daniel Esty, a former EPA official and current environmental law professor at Yale, recommend such an approach. They propose "an emissions charge of $5 per ton of greenhouse gases beginning in 2012, rising to $100 per ton by 2032." Daniel C. Esty & Michael E. Porter, Pain at the Pump? We Need More, New York Times, Apr. 28, 2011, at A25, available at http://www.nytimes.com/2011/04/28/opinion/28esty.html. They note that the "low initial charge, starting next year, would make the short-term burden on consumers and businesses almost negligible." Id. They also stress that their proposal would have numerous ancillary benefits. Imposing a price on carbon would reduce the U.S. trade deficit because less oil would be imported. For the same reason, fewer dollars would flow to violent fundamentalists in oil-rich nations, enhancing national security. The carbon charge would also curtail air pollution by decreasing the combustion of fossil fuels. And the federal deficit is likely to be reduced because of the additional tax revenue generated by the carbon charge. Finally, their proposal would stimulate innovation:

In the longer term, the prospect of a steadily rising emissions charge would focus the private sector's attention on energy-saving and carbon-reducing innovation. The calculus for investments would immediately change. Anyone pursuing an energy-consuming project, like a power plant, would factor in the rising long-term charge into their choice of technology ... Entrepreneurial spirit would be unleashed in companies from multinational enterprises to back-of-the-garage inventors. Esty& Porter, supra note 16. In a recent column, Thomas L. Friedman cited similar ancillary benefits in making the case for a tax on carbon emissions. See Thomas L. Friedman, Bibi and Barak, New York Times, May 18, 2011, at A19, available at http://www.nytimes.com/2011/05/18/opinion/18friedman.html ("We are going to have to raise taxes. Why not a carbon tax that also reduces energy consumption, drives innovation, cleans the air and reduces our dependence on the Middle East?").

Even this proposal may be too ambitious. It is not clear that emission charges should escalate as rapidly as Porter and Esty propose; given the current state of the economy, a more moderate rate of increase may be preferable. But whether the cost increase is rapid or gradual, it makes sense to create a fixed schedule so as to make investment planning easier. Without a reliable schedule, entrepreneurs and businesses would have a more difficult time estimating the future cost of carbon-based energy and thus a harder time calculating whether clean-energy projects would be financially worthwhile. To stimulate innovation, in short, a fixed schedule is desirable, even though it would commit the government for a period of time to prescribed emission limits, reducing the government's ability to experiment and adjust.

B. Adaptation

Emission limits are intended to curb the extent of future climate change. Adaptation strategies are designed to help people cope with the effects of climate change that is likely to occur whatever emission limits are adopted. For example, governments can provide food, water, and relocation assistance to residents whose lands are likely to flooded by rising sea levels. At the present time, however, relatively few people need such assistance. While residents may need shelter and other help after a hurricane or tornado, such emergency relief is largely available through existing government and humanitarian sources.

To be sure, climate change may increase the frequency and intensity of such storms, as well as exacerbate the incidence of drought and famine, but predicting in advance which countries are likely to be most affected is difficult. As one scientist observed, "Our current climate models are just not up to informed decision-making at the resolution of most countries." See Schiermeier, supra note 5, at 285. At this time, then, it seems premature to commit large amounts of additional resources to adaptation assistance. The United States may need to make such commitments in the future, but other climate change strategies are more pressing in the short term.

C. Clean Energy Research and Development

The ideal solution to climate change is the development of new forms of energy generation that are both cheap and clean. These technological breakthroughs would use few resources to produce power and would emit no greenhouse gases or pollutants. Moreover, they could take any form: they could be a radically different type of energy from anything available now, or they could be a dramatic improvement on an existing source of power generation, like wind or solar.

The allure of such a prize motivates many people to recommend clean energy research and development. Esty and Porter, for example, advocate escalating charges on greenhouse gas emissions in part because they would make it more profitable for businesses and entrepreneurs to engage in clean energy research and development. As they note, a price on carbon would also give consumers as well as producers an increasingly powerful incentive to switch to whatever new, less carbon-intensive technologies are developed. For the same reasons, Friedman recommends a tax on carbon emissions. See Friedman, supra note 18. Likewise, Bjorn Lomborg supports increased research and development, though he believes governments should fund it directly rather than stimulate it through emissions taxes, which he believes would prove too harmful to economic growth. Lomborg is quite willing, however, to commit substantial funds to research and development, declaring: "[W]e should spend about $100 billion a year on research and development to make green energy cheaper and more widely available." Lomborg, supra note 11. Singer also endorses the "need for more investment in research and development," whether it is funded directly by the government or stimulated by some type of emission limit. Singer, supra note 11 ("Such investment could be funded by a carbon tax or, under a cap-and-trade scheme, by the sale of quotas to emit carbon. Either of these methods of putting a price on carbon would in itself create further economic incentive for the development of green energy.").

Government-sponsored research and development is not without problems. The government would have to choose which projects to fund, and decisions made by government agencies are more likely to be politically motivated and less likely to be commercially sound than decisions made by entrepreneurs with an economic interest in success. See Esty & Porter, supra note 16 ("Experience in fields like information technology and telecommunications suggests that creating demand for innovation is far more effective than subsidizing company-specific research projects or providing incentives for particular technologies. Governments just aren't good at picking winners; witness the billions wasted on corn-based ethanol subsidies."). But government-funded research has historically led to spectacular successes (e.g., the Internet, GPS), and much of it has probably been more useful than wasteful. Moreover, unlike limits on carbon emissions, government-sponsored research is likely to have an entirely stimulative effect on the economy.

In short, a prudent approach to climate change should consist of two elements: (1) substantial government funding for clean energy research and development, and (2) limits on greenhouse gas emissions that begin at a modest level but gradually escalate in accord with a predetermined schedule. As noted earlier, there are many types of emission limits. I favor taxes over ceilings because the former are easier to calculate and administer, and send clearer signals to other businesses. But the choice among types is not critical. As Singer indicated, any type of limit will put a price on greenhouse gas emissions. Moreover, ceilings are likely to be easier to enact than new taxes. Even this moderate program, however, is unlikely to be adopted if China, India, and other rapidly developing countries refuse to participate.

IV. CHINA AND OTHER RAPIDLY DEVELOPING COUNTRIES

The developing countries have a sympathetic argument for refusing to take major steps to limit greenhouse gas emissions. The United States and other developed countries have historically been the world's largest source of greenhouse gas emissions. For years, they poured large quantities of greenhouse gases into the atmosphere as their economies expanded and their citizens attained an increasingly high standard of living. Why shouldn't China, India, and other developing countries be allowed to do the same thing until their citizens achieve a comparable level of prosperity?

The answer is simple: no major emitter of greenhouse gases is likely to limit its emission unless other major emitters do so as well. The United States and Europe may devote substantial funds to research and development, but the international community is unlikely to adopt material and binding restrictions on greenhouse gas emissions unless China and India make comparable commitments.

Neither the U.S. nor the EU will allow themselves to be placed at a competitive disadvantage relative to these countries. Moreover, the adverse effects of climate change are unlikely to be reduced substantially unless all the major emitters act together; greenhouse gas emissions and climate change do not respect national boundaries. As a result, the developed countries and the leading developing nations are engaged in what Kunich calls "the longest and highest-stakes game of 'Chicken' in history, with all key players daring the others to move first." See Kunich, supra note 2, at 131. ("The United States never even ratified the Kyoto Protocol because of concerns that its economy would be placed at a major disadvantage compared to its burgeoning competitive rivals, including [greenhouse gas] giants such as China and India. The United States' inertia is complemented by the reluctance of such emerging/developing economic powers to accept restrictions on their own emissions that could disrupt their progress before reaching a level of prosperity, quality of life, and social stability similar to that of the United States.").

Unless this collective action problem is solved, the world is unlikely to do anything important about climate change until a calamity occurs. China may take some actions that are grounded in its own interests, like imposing penalties on inefficient power plants, since those actions reduce its own air pollution and lower its own energy costs. But China is unlikely to curb greenhouse gas emissions in a much more substantial way, unless other large emitters do at least as much. To move forward, therefore, the United States and the European Union should agree on a program they would implement if China, India, and other rapidly developing nations agree to follow, and then use diplomatic and other tools to bring these countries into line. For instance, the U.S. and EU could offer increased economic cooperation and investment as a reward for participation. In addition, they could threaten to impose trade sanctions if China, India, and other major developing nations do not adopt comparable emissions limits. To be sure, trade sanctions may provoke a trade war, which could lead to worldwide reductions in employment, output, and economic growth. But to end the game of Chicken and reduce the risk of an environmental catastrophe, the threat of a major economic disruption may be needed.

V. CONCLUSION

A prudent approach to climate change would not ignore the problem. The risks of inaction are too significant. If the world fails to take steps to avert global warming and simply waits to see what transpires, future generations may witness a human and environmental disaster of the first magnitude. At the same time, it would be unwise to impose major, immediate curbs on greenhouse gas emissions, given the uncertainties that pervade this area and the precarious state of most economies. A prudent approach to climate change would consist of moderate steps that have a reasonable chance of being cost effective.

In this article, I suggest two: (1) substantial government funding for clean energy research and development, and (2) limits on greenhouse gas emissions that are initially modest but gradually escalate in accord with a predetermined schedule. Both steps would move the economy away from traditional, carbon-based sources of energy and toward technologies that would have fewer adverse effects on the world's climate. The increase in funding for R&D would simulate innovation directly; the emissions limits would do so indirectly, making it more costly for producers and consumers to use older, more carbon-intensive technologies and more advantageous to develop cleaner alternatives. Both policies, moreover, could be expanded or accelerated if the risks of climate change appear greater or more likely than they do now.

If this program is in fact sensible, it will be easier to persuade China, India, and other emerging economies to adopt something comparable. And if more than persuasion is required, there are diplomatic and other tools available, including the threat of trade sanctions if these countries insist on free riding on the climate change efforts of the developed world.

Kunich is right: climate change policy is a gamble. But since we are "betting the earth," it is a game we should not sit out.

 

Professor of Law and Associate Dean for Strategic Planning and Mission, Seattle University School of Law; Editor, Research in Law and Economics: A Journal of Policy; Senior Fellow, American Antitrust Institute. Many people have helped me understand the issues involved in climate change, including Victor Flatt, John Kunich, Marcus Lee, Catherine O'Neill, Alec Osenbach, and Leah Peterson. I am grateful to them all. I also appreciate the research assistance that staff members of this journal have provided.

Published in Latest Articles
Saturday, 13 August 2011 19:19

Open-Eyes Environmentalism

INTRODUCTION: BETTING THE EARTH

Our biggest decisions must be made with our eyes open to as much information as possible. The concept is so obvious that it feels ridiculous even to state it explicitly. When we have much at stake, it only makes sense that we would want all our senses and all our resources working for us. Life-changing or even life-and-death decisions do not belong in the care of wild guesses, unfounded assumptions, or arrogant refusal to consider the facts. As a poker player, before I go all in and jam my chips toward the middle of the table, I like to look at my cards, both of them. It is not a superstition; it is simply logical.

We all know this, at least on an intellectual level, yet sometimes we make major life choices foolishly, either without regard to rationality or in direct conflict with it. When we disregard logic and reason, acting blindly on the basis of raw emotion, unquestioned assumptions, unexamined bias, or unhinged instinct, we and our loved ones often pay a terrible price in the form of heartbreak and personal tragedy.

The need for sound, logical decisions, supported by evidence and thoroughly analyzed, is infinitely greater when we move from the personal level to the global scale. Challenges facing the environment today are literally earth shaking in their magnitude, with the potential to affect the entire planet for hundreds of years to come. Unfortunately, we are, collectively, either ignoring these questions or attempting to answer them in the midnight dark with our eyes clenched closed covered by thick blindfolds. As a law professor, lawyer, and erstwhile law student, I know from long, excruciating personal experience how much time and energy we in the legal profession devote to the most minuscule and obscure fine points of law and policy. We are keenly aware of the overarching impact the decision of what rules of law to adopt and their application can have on our individual lives and on our society as a whole. How then, when the fate of the planet is at stake, could the most vital global decision-making be relegated to a level of carelessness more appropriate for a flip of a penny?

My thesis, seemingly unremarkable yet oft neglected, is that issues on this colossal scale require that we keep both eyes open as we look at them closely. We should be honest about the stakes and odds of the gamble, and recognize that our own bounded rationality may skew how we approach these issues. Logic tools such as my World WagerA decisional device I have developed. It was originally named the Hotspots Wager because it was tailored specially to address the uncertainties associated with the potential for a modern mass extinction localized in the world's key biodiversity hotspots habitats. However, the same general method can be adapted to fit the issue of global climate change, transboundary air pollution, population pressures, or any other scenario in which we must make a tough environmental choice, with a lot at stake, without the benefit of air-tight underlying factual certitude on one or more relevant factors. Therefore, we can acknowledge this tool's fundamental flexibility and, in its more generalized form, give it the new name of "World Wager." and its accompanying decision matrix can help us decide the environmental issues upon which we should take a "might as well" stance and, alternatively, those which we should entrust to caution and take drastic actions only as a "last resort." More specifically, in the context of climate change, the decision matrix shows that it would be irrational to make exorbitant and economically damaging changes to our societies and economies unless absolutely undeniable evidence of near-imminent disaster proves that this is our only hope. When mega-magnitude challenges such as the fate and survival of our planet demand our best bet, can we afford to blindly push all in?

THE PROBLEM OF BOUNDED RATIONALITY

The way we deal with environmental issues, or fail to deal with them, could determine the future to an extent that is difficult to overstate. Is anthropogenic climate change a formidable threat that demands swift and massive intervention by the world's largest emitters of greenhouse gasses (GHGs)? Is a modern mass extinction in progress that calls for a major reworking of biodiversity conservation law and policy? These are among the most momentous questions that people have ever faced, in any culture, at any point in history. Unfortunately, our millennia-ingrained, reflexive response instincts to sudden threats, pinned against a background of the subtle and gradual nature of typical environmental challenges, stand in the way of our ability to address these fundamental issues.

Our lengthy history as a species has hard-wired us to be alert for sudden, clear, immediate dangers. In the wild, predators for hundreds of generations stalked our ancestors as potential prey, looking for opportunities to pounce. Our distant forebears had to be constantly on the lookout for the first signs of the next attack. There was no prolonged lag time between the sharp sound of a cracking twig and the lethal charge, and no room for leisurely human rumination over the various possible interpretations of the intruder's intentions. Life's cruel reality demanded a reflexive, not reflective, approach.

Our prototypical threat response—the classic primal fight-or-flight reaction to danger—evolved in that savage context, and so we became adept at watching for and reacting to the breed of obvious, fast moving, imminently deadly threat typified by our ancestral predators. For better or for worse, we have inherited that predisposition through generations of conditioning, and have been doing a very poor job of adapting to changed or changing circumstances. The problem with this is that our modern environmental hazards bear no resemblance to a bear, unless maybe it is one we stumbled upon while it was half-hibernating. Today, we have to grapple with threats of a vastly different nature. This is not the fight we were born to tackle.

Climate change and mass extinction are the complete opposite of the fight-or-flight imminent threats we are adapted to detect and confront. Unlike lions or wolves, these "environmental predators" of today are excruciatingly subtle, slow moving, incremental, and hard to see.Michael H. Glantz, Creeping Environmental Problems, Prototype Training Workshop on Water Affairs, Hanoi, Vietnam (Dec.4–7, 2006), proceedings available at http://ccb.colorado.edu/waf/docs/document.pdf. Gradual, creeping dangers are nothing like the roaring, sharp-fanged carnivores that hunted our forebears. They can take hundreds or even thousands of years to work their baleful damage, and the evidence before our eyes on any given day looks quite unremarkable. This is a textbook case of calamity masquerading as calm. Temperatures fluctuate, weather behaves much the way we are accustomed to, the ocean levels seem about normal, and instances of melting or spreading of ice cover are subject to varying interpretation. Likewise, the official International Union for Conservation of Nature list of recently extinct species remains quite short, and rarely grows, dwarfed by the ever-expanding roster of more than 1.7 million identified living species in the world today.Press Release, Int'l Union for Conservation of Nature, Extinction Crisis Continues Apace, (Apr. 1, 2011) http://iucn.org/about/work/programmes/species/red_list/?4143/Extinction-crisis-continues-apace. The press release states that seventy-nine of the world's 5,490 mammal species are "Extinct or Extinct in the Wild." There is life, and even exotic life, all around us. The zoos are full of spectacular charismatic megafauna. Is this a mass extinction? Where is the irrefutable dramatic evidence we are so hardwired to expect?

Despite the appearance of normality, there is considerable legitimate scientific evidence on the issues of both past and present climate change and mass extinction. This evidence, however, is of a decidedly different form. As explained in my latest book, Betting the Earth: How We Can Still Win the Biggest Gamble of All Time, these phenomena are now, and have always been, gradual and incremental in their progress and impact.John Charles Kunich, Betting The Earth: How We Can Still Win The Biggest Gamble Of All Time (2010). Even historic mass extinctions like the K-T extinction spasm that wiped out the dinosaurs, although begun by a catastrophic asteroid strike, took thousands of years to inflict the vast bulk of its damage. The extinction was touched off by a single sudden Mesoamerican impact from outer space, but it was the slow-moving systemic aftershocks (increased volcanic activity and earthquakes, widespread fires, and planet-wide climate change induced by large amounts of smoke, dust, sulfur, and particulate matter added to the atmosphere) that destroyed most species far from the initial collision point. These impacts took centuries to manifest, in complete contrast to the abrupt, mostly localized, precipitating trigger event. The same is true for climate change, even when considering the most extreme examples from our planet's history. It is a gradual, insidious, easy-to-miss predator, as different from a spectacular and immediate crisis as an intestinal parasite is different from a lion, but not necessarily any less deadly in the final analysis.

When an environmental challenge is subtle and gradual, there is inevitably conflicting evidence, making avoidance of the problem all too easy. Depending on where we look and what types of evidence we credit or reject, we can arrive at very different conclusions as to the reality, the dimensions, the imminence, and the probability of harm. Moreover, there are gaps in our information, gray areas in our predictions, and question marks where we instinctively look for exclamation points. These gaps are variables and unknowns relevant to our decision making, and yet unfortunately may never be fully resolved.

Most people respond in one of two ways to subtle, gradual problems such as biodiversity loss or climate change. Many of us ignore them entirely, as if they did not exist at all, rather like disregarding our own weight gain, chronic fatigue, or even the early warning signals of cancer. We pay no attention to those ambiguous little symptoms and hope they will just go away or at least will not amount to any cause for alarm. In the alternative, if we are persuaded that the threats are genuine, we tend to exaggerate both the magnitude and the immediacy of the dangers in an attempt to shock our complacent friends (and our personal doctors) out of their deluded slumber. Well intentioned but misguided, we might inflate and distort the hazards in a type of propaganda campaign, making them appear to be the type of sudden, dramatic, short-fuse crises people are preconditioned to pay attention to and confront. Neither approach—neglect nor manipulation—is likely to earn us admission into the Rational Decision Makers' Hall of Fame.

A complex network of interlaced issues, facts, and gaps in information encompass our climate change and mass extinction dilemmas. Many of us are ignoring, or are ignorant of, the problems and are content to busy ourselves with myriad other things that appear to be more interesting, immediate, or important to our own lives. The rest of us are mostly confident we already know what we need to know, we understand what needs to be done, and that everyone else should listen to us and follow our lead. Regardless of our position, those who do not agree with us are ill informed at best and malevolent at worst.

This sad situation is a classic, thoroughly time-tested recipe for making awful decisions. Why are we doing this to ourselves and to our posterity? Why are we making fool's bets with our planet and squandering the opportunity to marshal vast informational resources to do all we can to choose wisely for the earth's future? Have we all somehow conspired to preserve our guesswork in as uneducated and deliberately ignorant a state as possible? As exemplified by the recent "Climategate" scandal,See Robert Mendick, Climategate: University of East Anglia U-Turn in Climate Change Row, Telegraph (London), Nov. 28, 2009, http://www.telegraph.co.uk/earth/copenhagen-climate-change-confe/6678469/Climategate-University-of-East-Anglia-U-turn-in-climate-change-row.html.the world's leaders and citizens alike again are throwing away the chance to get it right on these colossal questions.

I do not pretend to know all the answers to these crucial questions facing our world. I only know that we must frame our questions correctly and be open to a logical, rational, and probability based assessment of all credible and relevant evidence, regardless of its source or implications. The sad truth is that some of the deadliest dangers in life, on both an individual and a global scale, sneak up on us stealthily instead of kicking in our front door, and this does not automatically render them any less real or any less lethal. These issues are far too important to trust to chance, unsupported assumption, or uneducated guesswork. If we try to gain a quick victory in the debate and skip to the happy ending by pretending the evidence is overwhelmingly on our side, without acknowledging any significant gaps or contradictions, we ultimately damage our own cause when the truth is revealed and we are exposed in our willingness to cry wolf, even endangered ones. Only a fair, honest assessment of all the facts, weaknesses and holes included, gives us a reasonable chance to get the right answer while at the same time persuading other fair-minded people.

Therefore, instead of expending substantial energy and resources debating whether we should follow the "hurry we must do everything we can" approach or the "it is all a bunch of lies" approach to vital environmental issues, we should focus our attention on analyzing the available, if incomplete, evidence to help our decision makers make momentous decisions that result in the best bet. When you are gambling with what you absolutely cannot afford to lose, you want every light on, every distraction shut out, and a careful analysis of expert advice from the best possible minds.

ANALYTICAL TOOLS AND THE WORLD WAGER DECISION MATRIX

How do we deal with the unknowns—those gaps in our required, essential information—so central to making the right judgments yet so persistently unclear? A methodical approach that uses the best and most sophisticated tools available from the discipline of Decision Analysis can help us make the correct decisions on such complex, subtle, nuanced, and glacier-paced issues even where there are variables that should be considered but yet remain maddeningly and even permanently elusive to definitive clarification. To that end, I have proposed a variation of Pascal's WagerPascal's Wager is the argument that man should wager that God exists, and live in the mode that such existence dictates, despite the impossibility of determining such existence through the use of reason. Pascal's Wager was groundbreaking as it had chartered new territory in probability theory and marked the first formal use of decision theory. Pascal's Wager is a framework for formulating a wise decision concerning a momentous matter when there are some major unknowns relevant to the equation. See Alan Hájek, Pascal's Wager, Stanford Encyclopedia of Philosophy, (Apr. 1, 2010, 5:27 PM), http://plato.stanford.edu/entries/pascal-wager/. and the accompanying Decision Matrix to handle this daunting task—a separate version for each of the two most daunting contemporary environmental issues: climate change and mass extinction.Kunich, supra note 4 at 127–210. The Climate Change WagerId. at 213–23. and the Biodiversity WagerId. at 207–10. were derived from key insights in decision theory, including breakthroughs from intellectual titans such as Blaise Pascal, Kurt Gödel, and Edward Lorenz.

The main purpose of these tools is simple enough. They are designed, like Pascal's Wager itself, to enable us to make rational decisions on momentous, life-and-death matters, even when there are some key unresolvable unknowns relevant to making the correct choice. They equip us to place boundaries on the gaps in our evidence and to use reason to work through the upside and downside potential outcomes of our various options. Like a global game of Deal or No Deal or "the lady or the tiger," our modern environmental dilemmas are forcing us to make the hardest of hard choices, in the foggy midst and mist of unending uncertainty. The Wagers and their Decision Matrices offer a solution that empowers us to make rational cost-benefit and best-case or worst-case analysis of the vast problems.

These methods are, at their core, a device for methodically and logically dealing with uncertainties and gaps in the key evidence, with full acknowledgement of pertinent probabilities. When all the permutations and combinations of possible but unknowable values of each variable tend to lead to the conclusion that we have more to gain and less to lose by selecting one option, and less to gain but more to lose from the alternatives, these tools allow us to realize this important reality and incorporate it into our decision making. This is a crucial contribution, as it provides a way for us to place the unknowns in a box and limit them to a manageable, confined space with which we can deal reasonably. By building boundaries around the fog and containing it, we have a better shot at making our judgments in clear air.

The Wagers and Decision Matrices assist us in distinguishing between situations in which being proactive should be our default option (Type R errors) and those in which we should tend to err on the side of caution (Type P errors). I introduced these two variations on the familiar scientific taxonomy of Type I (false positive)Id. at 329–35. and Type II (false negative)Id. errorsA simple hypothetical example of a man being screened for prostate cancer can help illustrate the concept of these two types of errors. Statisticians approach it like this: Begin with the null hypothesis, that the patient does not have prostate cancer; the alternative hypothesis is that cancer is present. If the null hypothesis is rejected when it is in fact true (the patient tests positive for cancer when the patient is well), this is a Type I error or "false positive." If the null hypothesis is not rejected when it is in fact false (the patient tests negative when the patient's prostate is cancerous), this is a Type II error or "false negative".in Betting the Earth. Type R mistakes are sins of commission, or failures related to aggressiveness. "R" stands for restless, and represents a preference for being proactive—for striking out swinging rather than with the bat on your shoulder.Kunich, supra note 4 at 335–44. Conversely, Type P errors are sins of omission, or mistakes that follow from inaction. "P" stands for passive, and reflects a predilection for standing pat, erring on the side of maintaining the status quo, and making no major change unless called for by clear and potent reasons.Id.

Neither Type R nor Type P errors are generally better or worse than the other under all circumstances. The effect of either hinges on the specific situation in an acutely context-dependent way. The variety of mistakes we should be more willing to accept when making decisions related to combating environmental problems such as mass extinction and climate change will vary based on the factors associated with the type of activity under consideration.Id. at 207–223.To state the matter in the simplest possible terms, everything turns on whether we are in a "might as well" or a "last resort" situation.

My Wagers look at all the possible permutations and combinations of the actual (but impossible to ascertain) values for each relevant variable.To use the climate wager as an example, say if we decide not to launch a major greenhouse gas control worldwide campaign, when the true amount of further abnormal temperature rise in future if left unchecked is high, the true extent of net harm from future temperature rise if left unchecked is high, and the true degree of human ability to shift climate adequately by design is high, the result of decision would be a first order grave error.

On the other hand, if we decide to launch a major greenhouse gas control worldwide campaign when indications of the three factors are low, then the result of decision would be a very costly insurance. See Id. at 221. Then they let us compare what would happen under each of those situations if we decide to make one choice or another. Even though we cannot know the true value of each unknown, we can grasp whether we have more to gain and less to lose by making one choice, or vice versa. They allow us to distinguish between situations in which it would be "penny wise and pound foolish" not to intervene (my "might as well" category) and those where we might "act in haste and repent at leisure" by taking needless actions (the "last resort" syndrome). As in Pascal's original wager, reason would suggest that we select the option that offers us the most benefit and the least risk for the lowest cost. To accomplish this, we must first determine the best and worst that could happen under all applicable alternatives and sets of circumstances. This is what the Wagers do.

Here is an example of this form of decision analysis to which most of us can relate. Whether we own a house or rent an apartment, we have some type of dwelling where we keep most our property and refer to as home. Each year, we need to decide whether to pay for fire insurance on our home and property. If we take on this decision rationally, our choice will turn on several factors, including the cost of the insurance premiums, the replacement value of what we own, the probability that our home will be destroyed by fire in the next year, and what we would have to sacrifice either to pay the premiums or to replace our lost property ourselves. We can define each of these factors fairly well if we do a little checking. The one thing we cannot know for certain in advance is whether our home will in fact be burned down during the year just ahead. But if we use a variant of Pascal's Wager, as I have done for Climate Change and Biodiversity, we can incorporate that uncertainty and still make a reasoned decision.

If the premiums cost very little compared to our available resources, are much less than the value of what we stand to lose if there is a fire and we have no insurance, and we are persuaded that the insurance would actually pay off if we needed to make a claim, we are in a "might as well" situation. Even if there is a low (but not zero) probability of a fire hitting our home in the next year, it makes sense to spend the small amount of money to insure against what would be a far larger loss. But if the premiums are so expensive that we would have to make deep, life-changing sacrifices in order to pay them, or are not significantly less than the value of the property we own, or we are not confident the insurance would even pay off if we had to file a claim, then we are in a "last resort" situation. We still might find it prudent to buy the insurance, but it is a difficult and close call to be selected if it is essentially the only chance we have. Our "last resort" scenario is very different from the "might as well" scenario.

The "might as well" and "last resort" situations relate to Type R and Type P errors. In those sets of conditions that fit into the "might as well" mold, we should prefer to make Type R errors when we are in doubt as to what to do. It costs so little and could save us so much, we might as well be aggressive and proactive, and err on the side of taking the precaution, even if the probability that we will end up needing to avail ourselves of the protection is very low (but not zero). Despite that we cannot definitively know in advance the real situation or the value of each unknown or variable, our rational analysis tells us that it is generally better to pay for the insurance under "might as well" circumstances. Conversely, in "last resort" situations our default option should be to commit Type P errors. Not that we ever want to make errors, but in the face of uncertainty in "last resort" scenarios we usually should be conservative and cautious in our actions. This is so because we must give up so much to take the precaution, making very large, actual, immediate and long-term sacrifices for the possibility of averting a somewhat larger loss, that we should only exercise this option as a last resort, if all else fails.

I think we intuitively know the distinction between "might as well" and "last resort" situations, and the relationship between them and a reasoned preference for either Type R or Type P errors. Even if we have never actually thought about it in explicit terms, this resonates with us because at some level of ratiocination we have made this sort of judgment call many times in our own life experiences. We easily distinguish between circumstances in which it costs us only $300 per year to reliably insure our life's considerable accumulation of property and those in which we would have to pay $20,000 a year for uncertain protection. Much like Supreme Court Justice Potter Stewart once wrote in a rather different context,See Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., Concurring). we know a "might as well" scenario when we see it, and we understand that a willingness to tolerate a preponderance of Type R errors comes with that territory. Likewise, we know a "last resort" situation when we see it, and we understand that Type P errors should be our default option there.

ADDRESSING CLIMATE CHANGE: TECHNOLOGICAL ADVANCEMENT AND ITS COMMERCIALIZATION MAY BE THE ONLY SOLUTION TO PROBLEMS FACING INTERNATIONAL COOPERATION

Many concerns caution us to place climate change in the "last resort" category. A combination of the uncertain efficacy of corrective measures, questions about the extent and imminence of harm resulting from the unaltered status quo, and immense expenditures and opportunity costs associated with intervention makes Type P errors the rational preference. This is so because the profound, multi-faceted, fundamental transformations necessitated by climate intervention are well beyond the level of expense and life-altering consequences associated with any ordinary form of life, health, or home insurance.

If we insist on adhering to the insurance analogy, engaging in climate intervention tactics would perhaps be most similar to an attempt to buy life insurance when we already have clear symptoms of a nearly incurable condition at an advanced age. When you try to buy life insurance with one foot in the grave it likely is not even available, and if it is, the price is enormously higher than if you were young and healthy. You would probably have to sell your car, mortgage your house, and make other major sacrifices to be able to afford the astronomical premiums. Similarly, instead of being fairly easy, painless, routine, affordable and accompanied by tangible positive side effects, the interventionist option under the climate issue is extremely difficult and expensive on several levels, requiring multiple core-shifting reworkings of the pillars of modern society.

Through a messy and haphazard jumble of actions and inactions, the world has collectively stumbled toward this same conclusion. The United States never ratified the Kyoto ProtocolThe Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change (UNFCCC). The major feature of the Kyoto Protocol is that it sets binding targets for 37 industrialized countries and the European community for reducing GHG emissions. These reductions amount to an average of five percent below 1990 levels over the period 2008-2012. See http://unfccc.int/kyoto_protocol/items/2830.php. because of concerns that its economy would be placed at a major disadvantage compared to its burgeoning competitive rivals, including GHG giants such as China and India. The United States' inertia is complemented by the reluctance of such developing economic powers to accept restrictions on their own emissions that could disrupt their progress towards achieving a level of prosperity, quality of life, and social stability similar to that of the United States. It is the longest and highest-stakes game of "Chicken" in history, with all key players daring the others to move first.

The difficulty of finding a core of shared interests to unite the world's nations on environmental issues can also be observed in the obstacles we face cobbling together international cooperation to create a successor to the Kyoto Protocol. As of this writing, the Kyoto Protocol will expire in less than two years. There is no international agreement ready to replace Kyoto. In fact, the most recent two Conferences of the PartiesUNFCCC parties meet annually in Conferences of the Parties (COPs). Both COP 15 in Copenhagen and COP 16 in Cancun failed to a binding agreement for long-term action. See http://unfccc.int/files/meetings/cop_15/application/pdf/cop15_cph_auv.pdf. have come nowhere near to producing a successor. If the Kyoto Protocol expires with nothing to stand in its stead, it will be because the major GHG producers have concluded that it is not worth it, all things considered. Very different economic and social circumstances, risks from rising ocean levels, per capita emissions, aggregate emissions, and technological capacity have combined to render further agreement on climate change action extremely elusive.

Fortunately, this is where the real value of the Climate Change Wager and Decision Matrix presents itself. By framing the issue and its component parts in an easily examined context, these tools enable us to focus on the few elements of the problem over which we have any control. The Decision Matrix shows us that it would be irrational to make exorbitant and economically damaging changes to our societies and economies unless undeniable evidence of near-imminent disaster proves that this is our only hope. This points us in the right direction. If we are to engage on the issue of anthropogenic climate change, we must either make intervention much less costly (or, even better, lucrative) or sweep away the scientific uncertainties that undermine our sense of urgency and approaching danger. That is what it would take to transform the issue of climate change intervention from a Type P "last resort" situation to a Type R "might as well."

We have a very bad record of making deep and painful sacrifices absent impossible-to-miss signs of impending doom. Frankly, unless we make the scientific and technological breakthroughs necessary to take the weight of the world off our shoulders by making a response to climate change economically advantageous, it will be politically impossible to generate adequate support for climate change intervention. This political impasse could change if the costs were not so onerous, or if it were actually economically beneficial to do something meaningful about GHG emissions while still maintaining a competitive and productive economy, nation by nation.

Technological advancements in energy production and usage might make reduction in greenhouse gas emissions much less costly, or even profitable. When people can "do well by doing good," the built-in incentives provide ample inducement for action with no attendant need for government to coerce anyone. The search for economically viable and efficient low-carbon, low-pollution sources of power can supply its own reward, even if motivated largely by the hunger for profits instead of noble altruism. Self-interest, in terms of economic gain, is a very potent motive force, often more powerful than even fear of punishment, and we would do well to try to harness it.All forms of energy are expensive, but as time progresses renewable energy generally gets cheaper, while fossil fuels generally become more expensive. There has been a continuing trend in commercialization of renewable energy. Global revenues for solar photovoltaic, wind power, and biofuels expanded from $76 billion in 2007 to $115 billion in 2008. New global investments in clean energy technologies—including venture capital, project finance, public markets, and research and development—expanded by 4.7 percent from $148 billion in 2007 to $155 billion in 2008. Globally, there are an estimated 3 million direct jobs in renewable energy industries, with about half of them in the biofuels industry. Joel Makower et al., Clean Energy Trends 2009, 1–4, available at http://www.cleanedge.com/reports/pdf/Trends2009.pdf.If we can shift the corrective action from onerous to prosperous, our climate change decision flips from "last resort" to "might as well" and we can eagerly embrace the minor Type R errors as a mere cost of doing good business.

The only other change that could conceivably move the big emitters to make huge sacrifices would be a quantum leap in scientific knowledge that irrefutably and incontrovertibly provides proof that the world will suffer vast catastrophes, and soon, unless action is taken now. Past experience tells us that international cooperation is likely only when such undeniable evidence of imminent disaster hits the world in its collective face. However, we are nowhere near that level of unmistakable certitude with regard to climate change today, and even specialists in the scientific community disagree vehemently about the nature, degree, and timing of any widespread effects of rising GHG levels. When the scientists themselves cannot agree, the politicians of the world are guaranteed not to intervene, but instead will keep their feet firmly on the brake, with the vehicle in park and the parking brake on for good measure. Politically, deep sacrifice is the ultimate "last resort" option and can only be implemented under circumstances of the clearest and most cataclysmic clear and present danger.

An eyes open approach to environmentalism must acknowledge these and other practical realities, including a few of the less noble but nonetheless widespread human traits such as selfishness, obstinacy, impatience, and shortsightedness. Since top-down, command-and-control regulation is not currently solving the climate change problem at its source (emission of GHGs from fossil fuel energy sources like coal and oil), a more incentives-based strategy might yield innovative solutions. These could include market-based countermeasures to mitigate some of the harms, such as rising ocean levels, that may flow from climate change.

However, although new, GHG-free sources of energy could eventually address the emissions problem, these can only supplement but not supplant fossil fuels if they depend on heavy government subsidies or regulatory mandates for their market share. Every form of alternative energy has its own problems, and coercion via subsidies and mandates is no substitute for self-advancement as an inducement to working through the difficulties. All variants of wind, solar, nuclear, geothermal, hydrogen, fusion, tidal, and other low-emission energy candidates for the replacement of fossil fuels will ultimately have to out-compete the GHG-laden sources, fair and square, or self-interest will trump good intensions every time. But we are not there yet. In fact, much effort is still being exerted in the other direction, i.e., an attempt to force a solution to fit, through imposition of legal mandates.

JUDICIAL ACTIVISM IN THE FACE OF CONGRESSIONAL INACTION

In the absence of either a workable, enforceable international agreement or unilateral legislative action, the legal power has shifted to the executive branch (specifically its administrative agency regulatory components), with an assist from the judiciary—at least in the United States. The U.S. Supreme Court's landmark decision in Massachusetts v. EPA empowered the Environmental Protection Agency to decide whether it should regulate certain GHGs under the Clean Air Act.549 U.S. 497 (2007).The EPA, in turn, issued both an "endangerment" determination and a "cause or contribute" determination. Together, these findings essentially mandate that the EPA treat GHGs as "regulated pollutants" within the Clean Air Act's far-reaching terms. Potentially, this gives the EPA immense power to regulate many thousands of sources of GHGs never before governed by the Clean Air Act, including requirements for Title V permits, New Source Reviews, Best Available Technology mandates, and other provisions. But with gasses like carbon dioxide and methane naturally occurring in large quantities, the Clean Air Act approach appears to be a poor fit,See Nathan Richardson, Greenhouse Gas Regulation under the Clean Air Act: Does Chevron Set the EPA Free? 29 Stan. Envtl. L.J. 283 (2010). tailored as it is to small-quantity gasses like carbon monoxide, sulfur dioxide, and ozone.

The power vacuum left by the failure of the legislative process, domestically and internationally, has left the door open to the Massachusetts v. EPA brand of legal action. A new Congress with greater Republican representation may try to remove this unilateral regulatory authority from the EPA, while the Democratic leadership attempts to let the regulators handle the situation without the need for new legislation. But this legal scramble that threatens to send the United States' GHG policy careening toward chaos could have been averted—and still might be averted—if decision makers consider all the facts and uncertainties within a rational and probabilistic framework. The Climate Change Wager and Decision Matrix can inject a dose of much-needed logic and objectivity if we are willing to step back and try a new approach. It might not be too late. The alternative is a politics-dominated status quo where most of us have one or both of our eyes tightly closed to inconvenient facts.

CLOSING OBSERVATIONS

I chose the title of this article in order to highlight an alternative to the widespread and self-destructive practice of formulating our most Earthshaking environmental decisions with our eyes closed to the discomfiting nuances of reality. Of course, I do not claim in any way to eliminate risk from the equation. It cannot be done, in environmental law and policy or in any other enterprise involving life. Nevertheless, risk and uncertainty do not vanish just because we close our eyes and pretend they do not exist. What I do claim is this: like any good poker player, we have a better chance of winning if we get our chips into the middle of the table "with the best of it," i.e., with the probabilities in our favor. The element of risk is ever-present, but the best players learn how to leverage risk: how to use it, together with all they do and do not know, to gain an advantage. This only works if we keep our eyes and our mind open to absorb and analytically process as much of the available pertinent information as possible.

This requires a great deal of sustained hard work, attention to minute and nuanced detail, and patience, together with a resolute determination to maximize our resourcefulness and ingenuity. In poker, this includes looking carefully at our own cards, the other cards on the table, past tendencies, the amount of chips at risk, available to wager, and available to be won, and the relevant probabilities of various contingencies. It is fundamentally no different when we are betting the Earth. I created my decisional tools because I learned that we are not leveraging risk in making the weightiest decisions in the world; on the contrary, we are either blindly ignoring risk or lying about it to make the most audacious, and even reckless, all-in bluffs.

We can read a shelf of books devoted to global warming and endangered species, and come away from the experience more confused than we were before. Many books and law review articles, irrespective of whether they are environmentally activist or skeptical, oversimplify and omit key aspects of these momentous issues while depicting dissenting opinions as mere caricatures at best. There is far too little genuine debate or engagement on the issues, the gaps, the odds, and the actual evidence. As a result, our biggest environmental legal and policy judgments are treated like matters of religious dogma, to be accepted unquestioningly as articles of faith and shielded from genuine open-minded examination. With that as our paradigm, we cannot expect to make the correct decisions more often than we would through random chance.

We can and should avail ourselves of the most powerful tools of decision analysis when making these life-and-death judgment calls. With the planet at stake, we need to do a better job dealing with risk and making uncertainty, cost-benefit ratios, and probability work for us instead of against us. The thought experiment exercise offered by my Wagers and Decision Matrices can be helpful as an aid to cutting through the Gordian Knot of convoluted issues and distracters tangled all around our contemporary environmental dilemmas.

Some of the greatest minds in all history have given us these mechanisms, designed for the biggest of big picture issues. Pascal knew how to recognize a pivotal question, and he created a means for making wise choices involving them. We owe it to ourselves and to future generations to do the same. We must open our eyes and deal with all the circumstances, including the reality that while some of the most momentous sentences end with an exclamation point, others end with a question mark.

 

John Charles Kunich is a Fulbright Senior Specialist and Professor of Law. He recently served at the Indian Law Institute in New Delhi, India, where he taught a course on international environmental law. He is the author of seven books and numerous law review articles, primarily in the field of environmental and natural resources law. He sincerely thanks his wife, Marcia K. Vigil, and their daughters, Christie Kunich and Julie-Kate Kunich, for their love and support.

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