Looking for a way out: Backing away from dangerous climate change

Kate Crowley, University of Tasmania

The Climate Casino: Risk, Uncertainty and Economics for a Warming World William Nordhaus, New Haven, Yale University Press, 2013 (392 pp). ISBN 9780300212648 (paperback) RRP $36.95.

From Precaution to Profit: Contemporary Challenges to Environmental Protection in the Montreal Protocol Brian J. Gareau, New Haven, Yale University Press, 2013 (384 pp). ISBN 780300213157 (paperback) RRP $68.00.

Climate-Challenged Society John S. Dryzek, Richard B. Norgaard and David Schlosberg, Oxford, Oxford University Press, 2013 (192 pp). ISBN 9780199660117 (paperback) RRP $34.00.

Amongst policy researchers, climate change is known as a ‘wicked problem’ (Rittel & Webber 1973). It is complex, persistent and requires changes in multiple dimensions that are difficult to achieve. Wicked problems such as homelessness, poor Indigenous health and obesity tend to be managed rather than solved because they are confronting, contested and difficult to grasp. Climate change is all this and more. It threatens global catastrophe, the inundation of vast swathes of the planet and the health and well-being of the world’s population. The scale of the problem is unimaginable, and, as a policy challenge, it is diabolical (Garnaut 2008, p. xviii). How do we deal with such a ‘super wicked’ problem? If we don’t act now, the cost will be borne by future generations at far greater expense than today and the technology required may not be available or affordable. The longer we delay dealing with climate change, the more problematic it will become and the more socially and economically disruptive any future action will be (Levin et al. 2012).


Because climate change is a problem of our own making, logic suggests that we should be able to do something about it. Economist William Nordhaus, who has been studying global warming for four decades, agrees. He likens it to tackling problem gambling. We chose to enter the ‘Climate Casino’ and to roll the global warming dice, when what we need to do is to turn around and walk out of there. Against the characterisation of climate change as a super wicked problem, Nordhaus’s recent book The Climate Casino: Risk, Uncertainty and Economics for a Warming World offers an alluringly simple antidote, of stark truths for sure, but followed by detailed strategies for change. He sets out three key imperatives: increasing public awareness, pricing not just carbon but all greenhouse-gas emissions, and accelerating the decarbonisation of our economies. Nordhaus does not see climate change as a wicked or super wicked problem. Rather, for him, the problem is carbon pollution, which can be constrained and eventually eliminated through the application of market based logic. He steps the reader through the current minefield of political and policy obstacles as only an economist can.

The Climate Casino opens fairly brutally:

economic growth is producing unintended but perilous changes in the climate and earth systems. These changes will lead to unforeseeable and probably dangerous consequences. We are rolling the climate dice, the outcome will produce surprises, and some of them are likely to be perilous (pp. 3–4).

There is nothing new in Nordhaus’s call for carbon pricing.

And yet the opening chapters on the genesis of climate change point, not to some incomprehensibly complex set of conditions that are generating global warming, but to the burning of fossil (or carbon-based) fuels. Coal, oil and natural gas, the backbone incidentally of energy production in Australia (Department of Industry and Science 2015, p. 11), are the cause of the emission of CO2 or greenhouse gases that then directly cause global warming. It is clear from over 30 years of international negotiations that the global community has recognised this as a major problem, and that it is now finally closer to doing something about it following the United Nations Climate Change Meeting in Paris in 2015 (Harvey 2015). Nordhaus explains why this needs to be sooner rather than later, going over well-trodden ground about the manner in which CO2 emissions persist in the atmosphere and the need to curb emissions sharply to stand a chance of avoiding dangerous global warming. With low income and tropical regions at greatest, most immediate risk of damage from climate impacts, it is obvious why industrialised nations have not been in a hurry to act. There is nothing new in Nordhaus’s call for carbon pricing, but what is new is the urgency, the lack of equivocation that marked his earlier work, and his belief that until we price carbon pollution there will be no incentive to avoid producing it.


If there were immediate economic gains to be made from reducing CO2 emissions, especially for the industrialised nations, then there is no doubt that we would not be still talking about doing it. That is not the case, however, because the economic disruption that would be caused by reducing emissions and shifting to a decarbonised economy would affect everything, everywhere, for all time. As John Dryzek, Richard Norgaard and David Schlosberg observe in their book, Climate-Challenged Society:

The economic stakes could not be higher, calling into question the future of industries such as coal and cars, and leading to deep political conflicts as those whose industries, profits, employment, and lifestyles feel threatened resist the necessary changes (p. 1).

There is much at stake economically and therefore politically in reducing emissions and backing out of the Climate Casino, and that is why industrialised nations and carbon-based economies such as Australia have failed to act. And, what’s more, the confidence that Nordhaus projects that we can nevertheless act on climate change by adopting effective emission reduction policies, is less apparent in the more nuanced Climate-Challenged Society. It is a failure of rationalism, Dryzek, Norgaard and Schlosberg suggest, to assume that science can simply inform effective climate change policy making and see decarbonisation of the economy achieved and the emission of other greenhouse gas emissions brought under control. For a start, once science enters the public domain it proves controversial, and is contested as it has been by sceptics and vested interests in carbon based industrialised economies in particular. Countering Nordhaus’s optimism that simply putting a price on emissions will drive effective emissions reductions, Dryzek and his co-authors see the economics of climate change as more complicated.

There are significant differences between acting on ozone depletion and acting on climate change.

Economists, they argue, are more divided in their responses to climate change than climate scientists. They have differing views on what has more value—industry and its products or the atmosphere it pollutes—and how to judge cost-benefit, especially with respect to weighing up cost-benefit to present generations as opposed to future generations. Economists don’t advocate driving humanity to ruin, they explain, ‘but many seem willing to gamble with the possibility in exchange for the benefits of faster economic development through continuing exploitation of fossil fuels in both the short and long term’ (p. 39). As Nordhaus has argued, albeit in 1990, ‘global warming had both costs and benefits and that the balance of these against the costs of preventing warming was by no means clear’ (cited in , Dryzek, Norgaard and Schlosberg, p. 41). Economic pleas for such ‘studied inaction’, typical of cost-benefit analysis, under-value or neglect environmental, equity and intergenerational issues, and have, until more recently, under-estimated the benefits from CO2 mitigation and over-estimated its costs (p. 48).


In Climate-Challenged Society, but interestingly not in The Climate Casino, Dryzek and colleagues argue that ‘there has only been one global environmental issue where an economic calculation based on scientific understanding seems to have played a role in driving decisive public action’ (p. 39). They are referring to the implementation of the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. Policy researchers, frustrated by the ineffective global efforts to date on reversing the human causes of climate change, often point to this Protocol, which has largely succeeded in its aim of restricting the use of ozone depleting chlorofluorocarbons (CFCs) in fridges, air conditioners and spray cans. How was this possible, and achieved so swiftly, when the problem of ozone pollution, with its resultant ozone ‘holes’, and the problem of carbon emissions with its resultant global warming, are both archetypically wicked, multi-faceted, complex and economically disruptive environmental problems? In the first instance, there are major differences in the scale of the two problems. Entire industrial economies are not powered by CFCs as they are by carbon fuels. Thus, fewer producers were responsible for ozone depletion than are today for carbon pollution, which means that a smaller number of nations negotiated the Montreal Protocol. But there are other differences.

Dryzek and colleagues observe that the breakthrough agreement on the Montreal Protocol was achieved on several fronts simultaneously (pp. 40–41). The rhetorical force of the idea of an ozone hole was hugely significant and broadly accepted, whereas the damage caused by carbon pollution is still widely contested, if not among climate scientists. A reframing of EU interests from opposition to support also facilitated the Montreal Protocol, leading to a harmonisation of national interest and environmental action that has eluded climate change. It was also possible to agree to eliminate CFCs because of the ready availability of more ozone friendly CFC substitutes, the relatively uncontentious uptake of these, and the immediate economic windfall to the DuPont industries in particular. Cost-benefit analysis, therefore, favoured global action, particularly with the costs of inaction depicted as unbearably high in terms of projected premature deaths from cancer in the US alone, with lives lost costed at $US1.3 trillion. Such analysis was unremarkable in comparison to the more complex and varying estimations of the economic costs and benefits and the harms to human health that are attributed to differing climate change scenarios.

Obtaining impartial scientific advice is complicated by economic influences and interests.

It would seem, then, that there are significant differences between acting on ozone depletion and acting on climate change. Dryzek, Norgaard and Schlosberg conclude that the costs of doing nothing about carbon pollution are not as obvious, that climate science and economic analysts are more likely to clash, and that climate change is more confronting of both vested interests and of our entire way of life (pp. 38–42). Brian Gareau is certainly not convinced, in any case, that the Montreal Protocol offers a model that could be scaled up to suit global action on climate change. His meticulous account of the implementation of the Montreal Protocol in From Precaution to Profit: Contemporary Challenges to Environmental Protection in the Montreal Protocol makes for sobering reading. It is not possible to do justice to his compelling study here, other than to observe that it should be required reading in every political, policy and legal course covering global environmental politics. It documents impending environmental destruction fuelled by political and industry self-interest and the almighty economic power and influence of the United States and its major industries to impede global environmental protection. If cost-benefit analysis favoured the establishment of the Montreal Protocol decades ago, it would seem, from reading From Precaution to Profit, to be hampering its implementation today.


Gareau looks past the achievement of the Montreal Protocol to examine circumstances that are facilitating, constraining or undermining its implementation. He finds that the rise of neo-liberalism, partisan influences upon scientific advice, and the lobbying strength of the United States are major obstacles to the phase out of ozone depleting substances (ODS). He establishes that exemptions and black market trading have compromised the core object of the Montreal Protocol, the phasing out of CFCs, and that there are ongoing shortcomings with this agreement. The issue of neo-liberalism is interesting. Gareau finds that in the late 1980s when the Montreal Protocol was agreed, it was possible to argue for global environmental action on the basis of precaution or ecological sustainability. Today the emergence of neo-liberalism as a dominant norm in western capitalist societies has largely freed the state of its social and environmental responsibilities and frustrates the implementation of environmental agreements. There are other impacts, with politics being the most obvious. Elected representatives across ideological divides in the United States in particular, but arguably in Australia as well, now see environmentalism as a marginal or lesser responsibility than competing in the global economy in support of local and national economic interests.

Obtaining impartial scientific advice is complicated by economic influences and interests, national and local, in assessing the impacts on local industries of the phase out of ODS. It has not been possible to get an independent, objective, scientific evaluation of the impact of the highly toxic ODS, methyl bromide (MeBr), that is the subject of Gareau’s book and is used predominantly by the US strawberry industry. The Protocol is failing to control this substance by not minimising the number of exemptions from phase-out that the American government has achieved as a result of its political, economic and trade based power. The implementation failure that he identifies has implications when considering acting globally on climate change. It shows that national economic interests, particularly of the United States, can undermine global environmental agreements. Neo-liberalism is the culprit, Gareau concludes, because the process of turning to market solutions to resolve environmental problems deeply impacts the way scientific knowledge, policy making and environmental governance are formed and acted upon (p. 249). And although the design and implementation of any future climate regime will differ significantly from the Montreal Protocol, they will invariably be similarly impacted and shaped by neo-liberalism.

Each of these books completes yet another critical piece of the climate challenge puzzle.

Climate change is an urgent problem causing global environmental damage. It is incumbent upon researchers to emphasise what can be done about it. But it is also important to recognise where global environmental efforts fail, as Gareau does. What needs to be acknowledged about the Montreal Protocol process, for example, is the limited influence of civil society. Gareau advocates as a remedy more influence for public scientists and global civil society in international treaty processes, which he recognises would be difficult to achieve given the highly institutionalised, exclusive treaty process settings (pp. 223–247). There is broader scope, he argues, as do Nordhaus and Dryzek and his co-authors, for action by global civil society outside treaty negotiations, by citizens of the powerful countries in particular, but also by proactive, independent and empowered scientists. While Nordhaus focuses intently on how to reduce emissions and slow climate change, covering specific strategies, costs, benefits and national and global policies, Dryzek, Norgaard and Schlosberg see the climate challenge as an opportunity for addressing broader social change. They describe the challenges climate change raises, for example, for how our economies should be structured and what they should value. They see climate change as potentially enabling community-based initiatives, inspiring global justice, recasting the expert-lay knowledge dynamic and re-inventing processes of public participation.


Each of these books completes yet another critical piece of the climate challenge puzzle. The Climate Casino is dedicated to backing away from dangerous climate change and transitioning to a decarbonised economy by pricing carbon and implementing harmonised national and international policies. Nordhaus includes seven chapters on the policies and institutions required to slow climate change. He considers alternative actions to reduce carbon pollution (energy efficiency regulations, green technologies, energy taxes, voluntary measures, and research and development) and finds them useful only as supplements to carbon pricing. For quick emissions reduction these ‘ineffective and inefficient’ (p. 261) measures (exemplified in the current Australian government’s Direct Action policy) will not suffice. For understanding the scope and limits of a Post-Kyoto international agreement, Gareau’s From Precaution to Profit is compulsory reading for anyone proposing the virtues of the Montreal Protocol. Gareau also concludes with a set of principles for improved global environmental governance, beginning with rethinking leniency on any demands by the United States, being cognisant of displaced environmental goals, and reincorporating the public interest.

Climate-Challenged Society depicts climate change as a challenge in the broadest sense. It canvasses climate change denial, policy inaction, the limits of economics, and the justice and governance implications of the Anthropocene in which climate change is pushing ecological systems out of their comfort zone (p. 111). Whereas Nordhaus proposes direct emissions reduction action, and Gareau a reorientation away from rampant global neo-liberalism, Dryzek, Norgaard and Schlosberg advocate multiple human endeavours as a means of addressing the multi-faceted challenge of climate change. They argue that existing social, economic and political systems must be reconceptualised into a more ecologically rational earth systems governance that works with rather than dominates nature if we are to transition to an environmentally benign, decarbonised society. Each of these accounts leaves the reader with varying levels of confidence: disquieted and possibly depressed by Gareau, inspired but possibly uncertain by Dryzek and his co-authors, and strangely comforted by Nordhaus, the conservative economist. Nordhaus does not advocate gambling on climate change but throwing away the dice and acting:

Humans are putting the planet in peril. But humans can undo what they are doing. Moreover, this can be achieved at relatively low cost if people accept the realistic threat of global warming, put in place an economic mechanism that penalizes carbon emissions, and take vigorous efforts to develop low-carbon economies. By taking these steps, we can protect and preserve our precious planet (p. 326).

It is in the nature of wicked problems to defy simple solutions.

It is incumbent on authors of texts on climate change, particularly social scientific texts, to point not just to the complexity of the climate problem, and the wickedness or super wickedness that characterises it, but, as Nordhaus does, to what to do about it. Nordhaus has rightly attracted criticism over the decades for his cost-benefit analyses that failed to account for ecological values, but he now advocates, still as a conservative economist and still on the basis of cost-benefit analysis, for urgent climate action. Robert Manne discusses this shift in conservative economic thought with respect to climate change. He notes that former World Bank chief economist Nicholas Stern was accused of sacrificing environmental well-being ‘on the altar of the unquestioned idea of economic growth and supposed political realism’ (Manne 2015, p. 16). And yet, as Manne goes on to note, Lord Stern has recently published Why Are We Waiting: The Logic, Urgency and Promise of Tackling Climate Change (2015), in which he acknowledges accelerating global emissions and the risk of bequeathing dangerous climate change to our children and grandchildren, and calls for a halving of emissions in the developed world. The interest now in many climate circles is in the energy revolution that has begun as a means of achieving just this, and that has been prompted not by political or economic leaders, but in many respects by civil society that is looking for its own way out.


It is in the nature of wicked problems to defy simple solutions, so the carbon pricing response that Nordhaus advocates has proved elusive. Climate policy has indeed been captured by vested interests in many countries, notably in Australia, Canada and the United States, as Levin and colleagues (2012) suggest. Indeed, Australia has distinguished itself as the only country in the world to repeal carbon pricing (Connor 2014) in response to industry pressure. The definition of ‘wicked problem’ does not speak to state failure, market failure or relative influence over decision-making. Neither does it allow for economic triggers, such as the bottom falling out of the coal export market, which may presage action on a contested issue like climate change. The wicked problem definition also obscures the notion of political leadership and failed leadership that has been at the heart of much climate inaction. Action by civil society is a time-honoured remedy to political inaction, as we have seen in global campaigns to divest from fossil fuel markets. So apparently simple solutions can sometimes see results.


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Manne, R. 2015, ‘Diabolical: Why have we failed to address climate change?’, The Monthly, Summer edition 2015–16 [Online], Available: https://www.themonthly.com.au/issue/2015/december/1448888400/robert-manne/diabolical [2016, Mar 3].

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Associate Professor Kate Crowley is Deputy Head, School of Social Sciences, University of Tasmania. She has published widely on environmental policy, green politics and policy, and Australian climate politics and policy. Recent books include Environmental Policy Failure: The Australian Story with Ken Walker (Tilde University Press, 2011) and Policy Analysis in Australia with Brian Head (Policy Press, 2015).