EXCERPT: 'Hot, Flat, and Crowded,' by Thomas L. Friedman

Indeed, when you look at them side by side, the parallels between what has been happening in the Market and what is happening in Mother Nature are eerie. In both realms, what used to be once-in-a-century events—unusually powerful storms, heat waves, or global financial crises—are now happening with greater and greater frequency, with greater and greater virulence, and the costs of the cleanups are going higher and higher. In both realms industries that benefited from the underpricing of risks—whether they are credit-default swaps or carbon emissions—quietly lobbied the political authorities to keep loosening regulations so they could continue to reap large private gains at the expense of the greater public good. In both realms, companies and lobbyists funded and diffused "research" that muddied the waters and confused the public about the real dangers that were building up as a result of this widespread underpricing of risks. Eventually, even the terminology merged: We began to speak about "predatory lending" and "financial tsunamis" and "financial perfect storms" and "market meltdowns." Finally, just as a few farsighted financial experts warned us that the market could experience an extreme meltdown—one much worse than the models predicted—if we continued inflating the credit bubble, so a few farsighted scientists have been warning us about the same thing happening to the natural world if we continue inflating the carbon bubble.

"AIG and other companies like them failed because they discounted to zero the very small, remote risk of simultaneous defaults in their investment or insurance portfolios," noted Reid Detchon, the vice president for energy and climate, at the United Nations Foundation. "The risk in fact was probably less than 1 percent, perhaps a great deal less—but it happened nonetheless. We are acting like AIG in our approach to climate change. We are weighing the risks and benefits of action on the assumption that climate change will unfold predictably as temperatures rise. In doing so, we are discounting to zero two risks—the risk of a much greater increase in temperature than we now anticipate and the risk of a non-linear response by the climate system at some point along the way." A nonlinear response means radical change—a sudden drying up of the Amazon, for instance, due to a chain of unpredicted and unpredictable developments in the climate system. "Yet these risks—unlike the AIG case—are not small and remote," added Detchon. "The risk of a catastrophic increase in temperature is more like 50 percent than 5 percent if we follow a business-as-usual course. The risk of a non-linear response is simply unknowable—but we do know that the planet has experienced sudden shifts in the past."

It is for all these reasons that we absolutely must take our planet's warning heart attack seriously. There is no longer a "normal" for us to go back to. That "normal" high energy and high-nature-consuming diet is what got us here. Mother Nature and the Market hit the wall because our normal became excessive and unsustainable.

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