Anthony Giddens at the Hay Festival

Author / academic superstar Anthony Giddens offers a light review of the Hay Festival, focusing on climate change.

His review in the Guardian summarises the core message of his latest book:

The vast majority of the public, in virtually all such countries, express worries about climate change, but for the most part it does not touch their everyday lives at all. We have to deal with what I call Giddens’ paradox. Climate change is about avoiding or minimising abstract, largely future, risk. It is not visible in people’s everyday lives and most simply filter it out from their day-to-day concerns. The paradox lies in the fact that if we wait until it does becomes visible – in the shape of disasters that can be unequivocally attributed to climate change – it will by definition be too late to control it.

Valuing future risk is the core of the climate change economics and policy debate.  Unfortunately human beings are inherently rubbish at it.

Study after study has shown how people consistently prefer $100 now instead of a 10% chance of  $1000 tomorrow (indicating a bias towards taking action for positive reward now), but would prefer to a 10% chance of paying $1000 tomorrow instead of paying $100 today.

What’s the difference?  The odds of gain or loss are the same in both cases.  Traditional economic value holds the value of both propositions to be the same.  Yet people, don’t chose them both with the same frequency.  With our amazing ability to think about the future, we value money in hand now more than money in hand tomorrow, even if the payoff might be much, much greater.  We also value less pain now, even if that might mean a lot more pain in the future as well.

This paradox, known as risk aversion in economics and cognitive psychology, sums up Giddens’ point.  The odds are we won’t act on climate change until it is already too late.

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