Showing posts with label black swan. Show all posts
Showing posts with label black swan. Show all posts

Monday, March 23, 2015

Climate Change: how to make the problem bigger. Lessons from the case of world hunger


Results of a search for "world hunger" using Google Ngram Viewer. Clearly, the perception of hunger as a major world problem is relatively recent: it peaked in the 1980s and it remains well entrenched in our collective consciousness today. Would climate change show the same trajectory in the future? And, if it does, does it mean that the problem can be solved? Or won't we only make problems bigger in the efforts of solving them?



Momentum is clearly building up for climate action, even though denial is still putting up a stiff resistance. So, in a way, things are going well, but is it enough? Do we still have time for significant action against climate change? And if we will engage in such an action, will we take the right decisions?

Normally, the key of the future lies in the past and we can examine our present situation with climate in light of an older problem: world hunger, which went through a path of perception and action which may go in parallel with the climate problem.

Famines have a long history and, in ancient times, they were often perceived as "acts of God." The idea that something could be done against hunger took time to penetrate humankind's consciousness and we can perhaps find a first glimpse with the satirical essay titled "A Modest Proposal" written in 1729 by Jonathan Swift (best known for his "Gulliver's Travels"), where he proposed that the Irish poor should sell their children as food for the rich English. In reading it, you get a feeling of the frustration that Swift felt for the way the problems of Ireland were perceived in his times and, clearly, that hunger was no concern of the elites of the time. One of the results was the slow and ineffective response of the British government to the Irish famines which came in later times, in particular to the great famine of 1845 that killed millions of people.

Perceptions about world hunger changed in mid-20th century and the interest in the problem rose up rapidly and peaked in the 1980s. Afterward, it went down, but remained a clearly visible problem, something that everyone agrees it must be acted upon. Can we hope for a similar evolution of the concept of climate change? If we use google Ngram viewer, we can compare the terms "world hunger" and "climate change" and here is the result:



We should not pay too much attention to the relative magnitude of the curves. What counts is that the "climate change" curve has not yet saturated, but the use of the term is growing rapidly. It may still take some years before the curve reaches a peak, but there may arrive a moment in which the importance of climate change becomes obvious and nobody will deny it any more.

These are good news; but there is a problem. Suppose that the moment comes when everyone agrees that climate change is a big problem and we have to do something about that. Then, will anything be done? Will something be done fast enough? And will the right things be done? On this point, I am afraid that there will be problems. Big problems.

Let's go back to world hunger: most people today seem to agree that it is a success story and that the problem was solved by the so called "green revolution" that is, greatly increasing food production worldwide. It was, surely, a remarkable technological success, but did it solve the problem? Or didn't it just create a rat race between food production and population? In this case, we only made the problem bigger, instead of solving it (a case of the "black swan" trap). And the green revolution is all based on the idea of turning fossil fuels into food. But if population keeps increasing, while the stocks of fossil fuels can only decrease, we are going to have big problems. Actually, enormous problems. We'll never solve the hunger problem if we can't manage to stabilize the human population.

The reaction of humankind to climate change could be the same. Once we finally recognize that it is a problem, we may look for some technological quick fix to solve it and that may only make the problem bigger. Think of the various proposals of climate engineering that involve at spreading reflecting substances in the high atmosphere. If some of these proposals were implemented, then we could keep emitting greenhouse gases without generating atmospheric warming; and we probably would. Then, with emissions going up, we'll need more screening of sunlight, and, with more screening, we would keep emitting. It would be another rat race between emissions and screening. And what if something were to go wrong with the management of solar radiation? Something we didn't predict or we didn't understand? Then we would be in deep, deep trouble (anyone said "black swan"?). We'll never solve the climate problem if we don't manage to stabilize the concentration of greenhouse gases in the atmosphere.

Nobody likes to play the role of the catastrophist but, here, it is clear that we have a gigantic problem. It is not so much a physical or a technological problem, it is that we never developed methods to solve worldwide complex problems; we mostly tend to worsen them. It happens all the time (the political situation in North Africa and Middle East comes to mind as just another example). There have been several attempts to develop new and more effective ways to tackle big problems, such as focussing attention on the leverage points of systems. These methods are true game changers, but will any decision maker pay attention?










Thursday, March 17, 2011

Fukushima: the nuclear martingale


The "martingale"(*) is an old scheme for betting on the roulette game. It is simple, seductive, promising, and a recipe for disaster. The Fukushima catastrophe may be the result of the same way of thinking: a nuclear martingale.


It is unbelievable how many people today still think they can  make money out of a roulette game by using the old "double-up" method, also called "martingale". It works like this: you bet on a 50% event, red/black or odd/even, and you double the wager every time you lose. Eventually, when you win, you recoup your losses and make a small profit. Or, at least, this is the theory.

In practice, the martingale method is a recipe for disaster. At best, with it you will not be better off than with playing numbers at random. But it is worse than that: the martingale gives you a good chance to go broke by seeking to double "one last time." Fortunately for gamers, most casinos have betting limits; casino managers want their customers to lose money but not so much that they will go broke and kill themselves.

The martingale strategy is related to what Nassim Taleb has termed "Black Swan", an improbable but catastrophic event. A black swan event is not just a stroke of bad luck. It is something that you create by a series of wrong choices made with the best of intentions. It is the idea of the martingale: a sort of game of chicken played against the laws of probability. In a sense, you try to scare reality by raising the stakes - such as when you double the wager at the roulette game. But whatever small success you obtain in this way, reality is not easily scared and it comes back with a vengeance in the form of black swan: the bigger and the more catastrophic the more you had tried to avoid it.

Martingale-like schemes are typical, for instance, of the financial world. The subprime mortgage crash that started in 2007 is a good example of this strategy as noted by Nassim Taleb. Many financial schemes may be based on similar ideas. And, in these cases, there are no casino managers who stop people from falling into the martingale trap and go broke.

The Fukushima nuclear disaster may be telling us that there is a similar mechanism at play with technology in general. When we design machinery that is dangerous and prone to failure we try to reduce risks by tight regulations, specifics, and centralised control. Of course, these strategies are expensive and therefore are best implemented over large scales. So, we are raising the stakes by building bigger and more expensive systems in order to hedge the risk of failure. In the case of nuclear energy, the result is the concentration of power production in large plants. That strategy seems to work, within limits: on the average, the safety record of the nuclear industry is not bad. But when something goes wrong with a nuclear plant, it tends to go wrong in a big way, such as with Chernobyl and Fukushima.

So, are we protecting ourselves against small failures at the cost of risking large ones? In such case, we would be playing the martingale on a truly gigantic scale. The problem is not specific with nuclear technology. We tend to hedge risks with all kinds of technologies at the cost of risking catastrophes.

Think of coal as an example. We know that burning coal in power plants carries risks. In addition to local pollution, coal may be a major factor in overheating the whole planet because of the greenhouse effect associated with carbon dioxide (CO2) generated by combustion. Against this risk, we are presently planning a major effort in terms of "carbon capture and sequestration" (CCS) - a technology usually referred to as "Clean Coal." The idea of clean coal is that CO2 can be stored underground in geological reservoirs and therefore prevented from reaching the atmosphere.

We may well be playing the martingale with this idea. Suppose that the carbon capture technology will be used on a large scale and that we end up relying on "clean coal" for a major fraction of the worldwide power production. Then, we will have hedged the risk of climate change by raising the stakes: invested money and resources on a specific technology. Likely, we will have reduced local pollution and the amount of CO2 emitted in the atmosphere. But do we know enough about the physics of the sequestration process to guarantee that the stored CO2 will stay there? ? How can we rule out that we'll get that CO2 back in the atmosphere all together and much sooner than expected?

As a black swan, this one borders the unimaginable. Maybe it is an improbable event; sure, but it would be much more improbable if we were just to stop burning coal.

But we just don't seem to be able to reason that way. We tend to go always for the bigger and the more sophisticated technological solution and that carries enormous risks - maybe in terms of unlikely events, but not impossible ones. We are addicted to technology (as noted by George Mobus) and we don't seem to be able to realise that at some point technology starts showing diminishing returns (as Joseph Tainter has noted).

Maybe this is exactly what we are doing with civilisation: playing the martingale. We are hedging small risks by developing technologies, regulations, laws, and controls, all in order to keep society together. But the risk is the improbable, but eventually unavoidable, total collapse. The biggest black swan of all.


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(*)  In probability theory, the term "Martingale" refers to processes akin to random walks. Its origin is obscure, but a discussion on its meaning can be found here

Who

Ugo Bardi is a member of the Club of Rome, faculty member of the University of Florence, and the author of "Extracted" (Chelsea Green 2014), "The Seneca Effect" (Springer 2017), and Before the Collapse (Springer 2019)