Climate Management 101 — 1. A portfolio of approaches and solutions.

May 4th, 2007 <-- by Richard Rood -->

Climate Management 101 — 1. A portfolio of approaches and solutions.

When I worked at NASA most of the scientists had the following statement in their position description, “Solving complex problems with no known solutions.” I’m sure that most of us just looked at this as a set of words contrived in the distance past by human resources. Ultimately I ended up a manager, and by my nature, a student of management. This is first of a series of blogs that consider the “climate change problem” as the management of a complex problem with no known solution.

At the beginning of addressing such a problem, it is important to take an inventory of what you know, and to separate what you know from what you believe and what you think should happen. In the inventory of what you know it is necessary to identify the external factors or communities that are related to or have a vested interest in your problem. For climate change, these externalities would include, for example, energy, public health, and religion. It is also useful to place your problem into the set of similar scale problems, for example, control and treatment of AIDS. This leads to the identification of a system of strongly and weakly interrelated problems, which are each to their own, also complex systems.

After this first step, there are a number of aspects of the problem that become evident. First, there is likely no solution. There are a number of paths that are a productive way to start, but none of those ways scale or extend to the problem as a whole. Therefore to fall into the trap of advocating, for instance, renewable energy portfolios, adherence to Kyoto, or a carbon tax as the solution to the climate problem reduces the solution set too far. It does not recognize the complexity of the system or the diversity of the communities that have vested interests in the problem. A reduction to arguments of advocacy for particular approaches to the climate problem is often seen in both the press and political discussions. Advocacy for these approaches and the fact that these approaches do not scale or extend to a solution of the climate problem contributes to the volatility of the climate change problem, and hence, to the inability to converge towards solutions. The discussion becomes polarized between the advocates and those who can, rightly, point out the deficiencies of a particular approach. The role of important approaches is diminished. Hence, what is required is a portfolio of approaches, which will lead to a portfolio of policy and practices which will comprise the solution set for the sustained management of the climate.

Second, there is a short-term and long-term part of the paths to the solution set. Some policy and practices that may not be part of the long-term solution set may be essential ingredients in short-term approaches. For example, carbon taxes and a carbon market are often posed as competing approaches to control the emission of carbon dioxide into the atmosphere. A carbon market requires valuation of carbon dioxide emissions, valuation of efficiency, and choices in both fuels and abatement techniques. If the market is to be viable, then the costs of expenditures in efficiency need to scale to the cost between different fuels and abatement techniques and to the cost of a share of carbon. Since these market elements do not currently exist, in the short term a carbon tax or tax credit could, for instance, give meaningful valuation to efficiency or make the choice of renewable energy more attractive. Hence, rather than competing approaches, a tax or tax credit plays a role in a developing carbon market.

An important paper in the past couple of years is Pacala and Socolow, which appeared in Science in 2004. This paper and a body of work that follows recognize both the initial transient phase of the problem as well as the need for a portfolio of approaches to the problem. There are meaningful short-term ways that address the perceived urgency of the climate change problem, and there are multiple choices which provide the flexibility that allows the participation of many communities. Further, a subset of approaches is free enough of controversy that people will recognize the value of their implementation. The proposals of Pacala and Socolow give an excellent strategy that starts to address the climate change problem; however, they do not stand as a solution and require integration with many other elements of the problem, including policy, as well as sustained management towards the long-term solution set.

Princeton University Press Release of Pacala and Socolow

Others in this series:

Climate Management 101 – 1
Climate Management 101 – 2
Climate Management 101 – 3
Climate Management 101 – 4

6 Responses to “Climate Management 101 — 1. A portfolio of approaches and solutions.”

  1. Tim Colman Says:

    Dude! You had me at portfolio of approaches. Thanks for the concise writing. I am going to follow up on the Pacala & Socolow papers.

    I run a small business in Seattle– and would welcome the chance to develop a carbon tax regime as a way toward building value for markets.

    In the end we are all dead. I just want to say that I get optimistic about problem solving capacity when I stumble onto a blog entry like this one.

    best fishes,

    Timothy Colman

  2. Paul Higgins Says:

    [Response:This comment is based on an e-mail exchange between Ricky and I. We thought it would be good to put up and that it might trigger more comments. phiggins]

    This does a nice job of laying out the importance of a portfolio approach for dealing with climate change. I’m not sure that I’d say that there is no known solution for climate change, though.

    Some options that we have may end up working very well depending on how the future unfolds. We just can’t be sure. For example, doing nothing would be a great solution if we get very lucky and climate changes are modest and the impacts mostly beneficial (I should emphasize that, while I think this remains possible, I believe it is both one of the lowest probability outcomes and a poor risk management strategy). Alternatively, a gradually escalating price on carbon may solve, in a sense, the climate change problem provided that major efficiency gains and new innovations end up being easier to deploy than expected (I’m more optimistic here).

    I think your point is really that we can’t be guaranteed that any single policy option will solve the problem. Better still that our best chance to find the most effective path to a solution involves a portfolio approach and a recognition that we’re very likely going to have to continuously manage the portfolio as we learn. Some pieces of the portfolio may be in place for the long term (a price on climate pollution, perhaps) but other components of the portfolio may shift and change as we see what works most effectively and as we learn more and more about climate impacts. These are extremely important considerations, in my view.

    Another way to interpret the “no known solution” claim is that any solution will create other problems. These may be more desirable (or less), but ought not be overlooked. For example, policies to reduce emissions may help deal with climate change but create new problems for heavy emitters. If this is the intent, then I agree that there is likely not, nor likely ever to be, a perfect solution to the climate change problem. Even then, however, it’s worth realizing that we’re currently implementing a “solution” and that even imperfect alternatives may be relative improvements.

    I’m looking forward to more on the topic.

  3. Daublin Says:

    Doing nothing right now is also an improvement, if the cost of reacting to changes as they occur happens to turn out less than the cost of trying to prevent them and/or trying to react in advance but mis-planning due to not understanding exactly how things are going to go. This seems likely to me to be the case, if the only problem is that the earth gets a little warmer on average. In such a case, we have found no better system than to mimick our own ecosystems and learn by trial and error. Trial and error is, of course, impossible when we try to plan a hundred years in advance.

    The issue that might merit action today is to address disasters like you see in Gore’s movie. There is a fascinating question, there! However, such disasters are not addressed by emissions reduction, not at the levels that are practical. Emissions reduction does not stop the level of CO2 from going up much higher, but instead only delays the time it takes to get there. If there is truly a disastrous level of CO2 that we are in danger of reaching, then we had better do something other than just reduce emissions. We had better stop emitting (at great cost to humanity), or we had figure out a way to survive the blow.

    Emissions reduction, in short, is both short-sighted and narrow-minded. If that’s where your attention is, then I wonder if you are really serious about addressing climate change. To state the obvious, many people are only interested in emissions reduction due to its political aspects, e.g. as an excuse to complain about China. Surely no one in the present company fits that description, but we should all be aware that this is the political environment we are working in.

  4. Richard Rood Says:

    [This is a response to Paul Higgins’ above, and comes from our exchange.] I chose to say that there is “likely no solution,” knowing that it is open to many interpretations. Some can take it as a reason to do nothing. My reason is: it is natural for people to look to find “the solution.” It is natural to feel the need to do something on a personal level. These strong natural, individual drives extend to society as a whole. I am alarmed that in so many instances the US discussion converges quickly to transportation, cars, and CAFE Standards. It is my experience that once someone attaches themselves to such a solution, the maintained effort that is truly required to address the problem falls to the wayside. It is a matter of, perhaps, comfort in complex lives in a complex world. It is important to think of a portfolio of actions, and that this portfolio will change with time. If there is a solution, then it is dynamic, not static.

  5. bonnie2405 Says:

    Hi Richard,

    As a someone with no background education in climate, this article gave a good construction toward how I should manage the information around the climate management.
    Perhaps you have more suggestion what reading I should read to get a better understanding around the climate management and perhaps around emission trading?

    Thanks a lot.

  6. Risk Management Says:

    The risk associated with doing nothing far outweighs the risk of action, even if the action is slight. I have begun to study the concept of climate change in great detail in the hopes of being educated enough about the topic to help people to assess the risks of doing nothing. I want to be able to provide it to them in a classic risk and risk management approach that regular people can graps and hopefully react to. This blog is a great place for people to start – thanks.

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