When sheer stupidity becomes a governing principle

One of my favorite moments in human history was when Alan Greenspan, the legendary chairman of the Federal Reserve, had to admit in front of a congressional committee that he never really understood how the economy works (you can find the quote and the reference here). BTW, if you are under any illusion that mainstream economists learn from their mistakes, I encourage you to google the word bitcoin. Or read this article by Paul Krugman.

There is no wealth on a dead planet. Cartoon by the brilliant Patrick Chappatte.

Another person who apparently never understood anything is William T. Nordhaus, recipient of the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2018. The point is not that his conclusions about managing climate change were all wrong. The real outrage is that they were based on completely ridiculous assumptions, as pointed about by Professor Steve Keen in a paper appropriately titled “The appallingly bad neoclassical economics of climate change”.

Anyway, it turns out that the reason for why we almost lost the only habitable planet in the known universe is down to a most unfortunate accounting error by mainstream economists. Professor Keen recently gave a short interview with CNBC (‘War’ footing needed to correct economists’ miscalculations on climate change, says professor), which is well worth watching.

I will try to be more polite in my choice of words than professor Keen, but my conclusion is the same: Classical economic theory cannot be applied to climate change, because we are facing a situation where all societal structures could break down. If you believe that I am exaggerating, I encourage you to read “Some Questions of Moral Philosophy” by Hannah Arendt. Her starting point is a quote by Winston Churchill: “Scarcely anything, material or established, which I was brought up to believe was permanent and vital, has lasted. Everything I was sure, or was taught to be sure, was impossible, has happened.” She then points out that “We – at least the older ones among us – have witnessed the total collapse of all established moral standards in public and private life during the 1930s and 40s.” My father was already alive the last time society collapsed. There is no reason to be believe that this could not happen again. As a matter of fact, it is already happening in many parts of the world.

Only if we are prepared to accept the magnitude of the challenges facing us, will we have any chance of responding in an appropriate fashion. Basing our decisions on an already discredited theory does not seem very clever.

Furthermore, I believe that Global Climate Compensation is a realistic proposition for halting climate destruction, ensuring global stability, and alleviating poverty.

Avoiding a Ghastly Future

An open letter to the authors of “Underestimating the Challenges of Avoiding a Ghastly Future” by Corey J. A. Bradshaw et al.

Dear authors:

I would like to thank you for writing this concise and yet comprehensive summary of the challenges we face. The article is mandatory reading for anyone interested humanity having a future, such as everyone having or planning to have children. Given that we only have one planet and human survival depends on it, elementary risk management dictates that we should only consider the worst-case scenarios. Viewed this way, our future does indeed look bleak.

Unfortunately, the conclusions of your paper seem strangely disconnected from the rest of it. We are not going to solve the sustainability crisis by being concerned, analyzing, or talking about it. George Monbiot recently wrote an article about the handling of the COVID-19 pandemic titled “Clueless”. It starts with the following sentence: “Here’s the chilling, remarkable thing that should be inscribed on everyone’s minds: there is no plan.” Unfortunately, the same is true for sustainability in general.

As the German author and journalist Philip Blom recently pointed out, the collective intelligence of humanity corresponds to that of a yeast cell. We gobble up all available resources, thereby destroying our environment, and then we die. The reason is not that humans are stupid and unable to understand what is going on. The problem is that we are trapped in a self-destructive economic system which forces us to act against our own interests.

None of the problems described in your paper can be solved within a global economic system built on competition. The reason is simple: no country is prepared to voluntarily sacrifice its competitiveness to save the environment. Everyone understands this. Some people therefore cling to the absurd idea that sustainable technology will make us more competitive and powerful, thereby eliminating the need for tough political decisions. This is complete malarkey as evidenced by the increase in global military spending. The world seems to be gearing up for the climate and resource wars of the future. And wars are not are not sustainable.

Saving humanity will require a global system which increases the cost of fossil fuel while providing climate justice through redistribution. In such a system, it would be in the national interest of every country to limit its greenhouse gas emissions. Furthermore, the system would also reduce the value of fossil fuel reserves, thereby relieving global tensions.

Fixing the problems you so expertly describe in your paper will be very expensive and is probably not compatible with a growing economy. We need a global system for sharing the costs. A surprisingly simple solution to this problem can be found here: www.global-climate-compensation.org. The idea would work, but it is politically difficult to implement. However, I prefer a politically difficult challenge to a physically impossible one.

We will never accomplish anything by simply pointing out problems. The time has come to use whatever influence we have a scientists and citizens to promote workable solutions. Or as poet laureate Amanda Gorman put it at the inauguration of President Biden:

The new dawn blooms as we free it.
For there is always light,
if only we’re brave enough to see it.
If only we’re brave enough to be it.

Amanda Gorman, The Hill We Climb

Truth is Incontrovertible

United wishes and good will cannot overcome brute facts. Truth is incontrovertible. Panic may resent it. Ignorance may deride it. Malice may distort it. But there it is.

Winston Churchill

Here is an interesting graph from September 2020 to start the new year.

https://climateactiontracker.org/global/cat-emissions-gaps

Obviously, the world is not even close to having an idea about a plan for preventing catastrophic climate change. It is a bit worrying when the two largest emitters of greenhouse gases are either “highly” or “critically” insufficient in meeting their climate protection goals.

There are two reasons for this sad state of affairs:

  1. By sticking to the idea of economic growth, governments have essentially been trying to square the circle by accomplishing something which is physically impossible.
  2. There is no incentive for politicians to admit their own inadequacy. When was the last time you heard about a politician who resigned because he realized that he was not up to the job?

This leaves us in a precarious situation, where the people entrusted with climate policy are either unable or unwilling to do what is required to prevent catastrophic climate change. Instead, they put on a charade of pretending to be concerned to appease the masses. If the last four years have taught us anything, it is that “telling the people the lies they want to hear” can be a successful and dangerous strategy.

The incontrovertible fact is that our current approach to tackling the climate crisis has failed and that the people in charge have no idea what to do next. It is therefore not enough to demand that our politicians do something. We need to tell them what to do!

Global Climate Compensation (GCC) offers a simple solution based on the idea that the people responsible for destroying the climate should pay for the damage done. It will not solve all our problems, but it would be a huge step in the direction. It is also completely risk-free and could be implemented immediately. It is a lot better than doing nothing

I am actively trying to promote GCC. Please let me know if you like the idea and believe that you can help.

The Power of Imagination

The idea with my recent writeup on “Global Climate Compensation” was that it should be thought-provoking and it does indeed seem to have provoked some thoughts. Thanks a lot for the feedback! I truly appreciate both the positive and negative comments because they allow me to improve the argument. Listen and learn!

Patrick Chappatte

The main points of my article were the following:

  • The world currently does not have a realistic plan for preventing catastrophic climate change. The IPCC-scenarios compatible with less than +2.0°C of global warming contain a ridiculous amount of wishful thinking.
  • There are no indications that it will be possible to prevent Climate Armageddon unless we are prepared to drastically lower our consumption of natural resources, which would reduce the size of the economy, requiring negative growth or Degrowth.
  • This will also require a massive transfer of wealth from the rich to the poor. If the economy is not growing, we need to share available resources in an equitable manner.
  • We are rapidly running out of time.
  • Global Climate Compensation offers a realistic path to a more sustainable future if it could be implemented.

The question, for which I do not yet have the answer, is how to make this happen. What I love about the “Sapiens” by Yuval Harari is that he is very frank about the power of myths or imagination:

These imagined orders are inter-subjective, so in order to change them we must simultaneously change the consciousness of billions of people, which is not easy. A change of such magnitude can be accomplished only with the help of a complex organisation, such as a political party, an ideological movement, or a religious cult. However, in order to establish such complex organisations, it’s necessary to convince many strangers to cooperate with one another. And this will happen only if these strangers believe in some shared myths. It follows that in order to change an existing imagined order, we must first believe in an alternative imagined order.

Harari, Yuval Noah. Sapiens: A Brief History of Humankind (p. 118). HarperCollins.

I am convinced that he is right. Detailed planning will be necessary at some point, but we first have to offer a lot of people an appealing vision for the future. We will never be able to mobilize people under the banners of “complex emission trading schemes”, even if they were to work. I have now given many public lectures over the years and had to learn the hard way how to talk to a mixed audience. One of the easiest ideas to convey is that economic growth is incompatible with saving the planet. Pardon the language, but you simply cannot eat more and shit less! Everyone understands this. The vast majority also agrees that climate change is real. The fundamental problem we have is with materialism and inequality. If we continue to define success in terms of material wealth, we will never solve the problem.

On the other hand, there is no political majority for an egalitarian society. Personally, I do not mind people benefitting from talent and hard work. The problem is when they profit from the exploitation of other people and natural resources. Nobody seriously believes that the salary of a hedge fund manager is in any way related to the work he puts in and the profits from an coal company depend almost entirely on its right to destroy nature. Global Climate Compensation would not be a problem for people who work for a living. It is the “non-working rich” who need to rethink.

When people criticize me for not having a finished plan for saving humanity, my usual response is that in this respect I am in very good company. But, as Richard Feynman said, “Questions that cannot be answered are preferable to answers which may not be questioned”. I am working on it, but we have a long and stony road ahead of us.

Global Climate Compensation – Now or Never!

Since the world still does not have a realistic plan for preventing catastrophic climate change, I have decided to develop one myself:

It is a first draft, but it does merit further consideration. Please let me know if you are interested in contributing. You can reach me under info@global-climate-compensation.org.

Patrick Chappatte