· "I am shocked, shocked to find that gambling is going on in here," the police chief told Humphrey Bogart in Casablanca (1942)[1].
· "No one could have conceivably imagined suicide bombers burrowing into our society and them emerging all on the same day to fly their aircraft--fly US aircraft into buildings full of innocent people and show no remorse," President Bush said five days after the attacks[2].
· "Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief," Alan Greenspan told the U.S. Congress during the meltdown of 2008.
There are various reasons for shocked disbelief. For the fictional police chief, it was humorous hypocrisy (as he spoke, the croupier was handing over his winnings). For President Bush,
it could have been a failure of imagination (though since a 1994 Air France hijacking aimed at the Eiffel Tower, such possibilities had been a hot topic). Perhaps, given how he had ignored his own counter-terrorism experts, he was hoping to deflect criticism about how he had failed to protect and defend the United States. But why should a Federal Reserve chairman have found a bank meltdown unthinkable?
The Reaganesque ideology about the magic of the marketplace and the evils of government intervention was Alan Greenspan channeling Ayn Rand. Greenspan firmly believed that the financial industry could regulate itself because of the banker’s self-interest in minimizing risk to their company (and their shares of stock). Layer this atop the conventional wisdom about the pricing seesaw of supply and demand, and you’d think that market collapses wouldn’t occur without a big push from the outside, such as pandemic disease or war. For internal reasons, market crashes ought not to happen. Yet, ever since the tulip mania of 1637, bubbles just keep popping, knocking down both fools and innocent bystanders.
The gold standard for understanding stability and free-fall is encountered in the first few weeks of freshman physics. It starts with a balanced seesaw (a scale) but soon you get to things that move, such as pendulums and falling apples. When you lean back too far in a chair, a tipping point is passed and a simple blackboard diagram shows you how to prevent it, as you see in one of those bottom-weighted toys that automatically rights itself after a playful dog knocks it over. The economists have analogous examples but they still have difficulty with cycling, free-fall, and stimulating a recovery.
One reason is skittishness, because even if the government gives banks the money to loan, or the consumer money to spend, their instincts are to hoard it against a further downside. (Fortunately, government spending can get the job done more quickly.)
Another difficulty is reaction time, as when a new government bureaucracy first has to be invented before distributing the bailout billions. Just as it takes at least a quarter-second to hit the brakes after seeing the child run in front of you, even a successful stimulation of the economy may take more than a year to gain traction. In the meantime, what will prevent a run on the bank, foreclosures, job loss, bankruptcy, and much anxiety? Such knock-on effects were spread out over a few years following the 1929 market crash. These days, everything is faster—except the reaction time—and a financial folly in one country can now infect the world: Fail Locally, Collapse Globally.
Now that the prospect of another Great Depression has concentrated our minds, consider how all this affects our climate threat (and talk about a slow reaction time: this is the 50th anniversary of the first big warnings). The magic of the marketplace in carbon credits is being touted as the appropriate response.
In the last fifty years, we’ve seen killer heat waves, a big step up in droughts, and a tenfold increase in floods and fires. The cause of both ocean acidification and global warming is primarily fossil fuel CO2 emissions—yet eliminating the cause will not eliminate the problem. It may surprise you to learn that no amount of emissions reductions will keep climate from getting worse. It’s literally a derivatives problem: what counts is the amount of excess carbon in the air, but emissions are merely its time derivative: they’re talking about reducing the rate at which carbon is added, not about reducing the accumulation.
Until we start taking carbon out of circulation in a big way, climate problems will only get worse—perhaps suddenly.
For example, we are already well into the danger zone for "Burn Locally, Crash Globally." The Amazon rain forest could burn down as it was threatening to do in 1998 and 2005. In 1998, the Southeast Asian rain forest got into drought trouble at the same time, thanks to the big El Niño. The loss of both would boost the excess carbon in the air by half, causing an abrupt climate shift globally. On top of that, the loss of leaves would mean that the annual bump up in atmospheric carbon could increase by half, creating a deadly spiral even without an emissions increase.
Our failure to engage on abrupt climate change has an sobering resemblance to what Alan Greenspan said when asked about preventing a housing bubble from collapsing. He answered that he never anticipated home prices could fall so much. "I did not forecast a significant decline because we had never had a significant decline in prices," he said. In short, if the seesaw has never broken before, why take precautions?
But for climate, the risk concerns the biggest vulnerabilities of all: a mass extinction of species and a collapse of civilization. An abrupt climate shift would cause wave after wave of climate refugees. We could suffer a human population crash featuring famine, pestilence, war, and genocide. Our ability to back out of this danger zone depends on quickly sinking massive amounts of biomass every year.
How do we succeed should resource wars begin, shattering international cooperation? How do we act effectively if world economies can be weakened so easily? It looks to me that we must rush to fix the climate problem before civilization becomes too weak to act effectively.
William H. Calvin is a professor at the University of Washington in Seattle and author of "Global Fever: How to Treat Climate Change" from the University of Chicago Press (2008).
wcalvin@u.washington.edu
http://WilliamCalvin.org
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[1] http://en.wikiquote.org/...
Rick: How can you close me up? On what grounds?
Renault: I'm shocked, shocked to find that there is gambling going on here!
Croupier: Your winnings, sir.
Renault: Oh, thank you very much.
[2] Transcript of ABC News Special Report (September 16, 2001 3:21 PM ET) at http://www.lexisnexis.com/... .