After studying the markets a bit I take the radical position that the critical issue for climate is certainty, not actual prices. Now that discussion of a carbon tax, or “carbon disposal fee”, as I like to call it, is quickly gaining ground, there is growing discussion about how to set the level of the tax or fee.
Prices have huge impact in the near term, as we’ve seen with the utilities’ swing to and from natural gas based on the price changes caused by fracking. Seen from our grand-kids’ perspective though, that swing may be just a blip, probably not even noted, unless fracking’s environmental problems are big.
Peoples’ long term investment decisions are much more based on hunch, since the real future cannot be predicted, especially when there’s a major transition coming. Those hunches cause hundreds of billions of dollars to be invested in particular areas—and the infrastructure build by those long-term investments, based on hunches, have huge effects on those living and working 20-50 years later. In the case of climate it’s the difference between using up our fossil fuel reserves and dealing with a 4-6 degree warming, which is where the oil companies expect we’ll go, versus quickly switching to renewables and restoring a healthy climate by 2070, as we’re committed to achieving.
Interestingly, large companies “know” that a price on carbon is coming, as the NY Times article said, yet the uncertainty has most of them still betting that the future will look like our oily past, and who can blame them?
The part of the brain that produces hunches is all past-based, based on myriad sensory input most of which we’re never aware of. But it’s from our past. If the future is going to be different, and our scientific narratives assure us that the world will change radically one way or another, then those hunches from the past will serve us badly.
So how do we shift peoples’ hunches about the future?