Thursday, October 27, 2011
In April 2008 I attended a workshop in Berkeley on climate change. Over dinner I had a discussion with a German climate scientist about the magnitude of the problem. I ventured the idea that it would pale in comparison with a (then hypothetical) financial crisis, looking at the the short to medium term effects. He was vehemently opposed to this idea. In the meantime climate change has receded from the headlines and the financial crisis has taken prime attention. Both issues have several things in common, but there are stark contrasts also.
Let me start with the commonalities. Both the financial crisis and climate change are global and require some kind of global intervention, or at least an intervention by resourceful actors who are in a position to make a difference.
Both could jeopardize the well-being of societies in different parts of the world. Both require enormous amounts of money for their management. Both are wicked problems in the sense that we do not have a solution at hand that will solve the uderlying problem once and for all. But I am jumping ahead already.
What are the differences then?
No one talks about the financial crisis in terms that evoke the end of the planet. 'Saving the economy' and 'saving the planet' are differently positioned in the discourse (although Gordon Brown once famously slipped into saying that he not only saved the banks but also the world -- perhaps not too absurd an idea as it was made out to be, see the various Youtube videos).
But the end of payments in a global economy based on payments would lead to very, very serious problems of civil unrest, hoarding, looting, violence, etc. Politicians instinctively want to avoid this kind of scare mongering. They are probably scared themselves. Rising sea levels, changed weather patterns, more migration and other climate impacts have been cited as harbingers of global catastrophe, and politicians have been eager to espouse the threats in this case (this was the point of contention with my interlocutor if my memory serves me well).
Climate scientists (with the help of some politicians) have put climate change on the agenda. They have also framed it in a specific way and identified solutions which are 'science based'. The financial crisis is remarkable for its absence of scientific expertise which is used to justify specific measures, be they 'parachutes', 'firewalls', 'bazookas' or what not (btw: who coins these metaphors?). Still, there are experts about the global economy and financial markets who advise politicians and pronounce in the media, but nothing comparable to what we see in climate policy. I am not saying this is a good or a bad sign. What I want to emphasize is the fact that politicians try to solve a very serious problem through bargaining and arguing, but largely without using science as a tool to stop debate. No one seems to know what the 'rational course of action' would be. Everyone probably wants the ‘least worst’ of alternative policies, one that incurs the lowest risk. But there is no agreement in economics, for example, about the virtues of trying to save the Euro and propping up credibility of the Eurozone compared to the alternative of letting the Euro go.
The political debate about the future of the Euro that we witness currently is pretty opaque as far as the financial instruments are concerned. Very few people (including myself, but probably also many politicians) understand what exactly goes on within these financial markets and how the proposed solutions will work. Of course there are experts actively seeking to influence decision makers, largely behind closed doors. Bankers are the most active and influential in this. They act out of self interest and our only hope is that the interconnectedness of the global financial markets should prevent them from acting in a short-term, self-interested way. But still this remains a hope.
In comparison, with climate change we have very detailed information available, albeit partly contested. No matter how technical the science is, many citizens can see a link between the working of the economy and the impact on the climate. This is the result of 20 years of public discourse on climate change. Also people who are highly critical of this discourse realize that we are in fact discussing the risks of climate change. However, citizens have not been consulted when it comes to solutions. Neither have they in the case of the financial crisis—but here we did not have a period of public discussion.
The former rogue trader Nick Leeson told BBC Newsnight on Nov 26 (starts at ca 20mins) that the ‘general public needs to empower itself and stop being passive recipients of what the bankers tell them. They need to be part of the equation.’ It is a sign of the times that it takes an inside informant to tell us about the essential weakness of regulations of financial institutions and the leeway any expert trader enjoys. There is no one to control him or her.
So what follows from this comparison? In my view, the limits of science have been highlighted in both cases as has the need for pragmatic, informed decision making. The inclusion of citizens in the process is lacking in both cases. Politicians still think only they can decide on issues of the highest importance. If there is one thing we can learn from the climate change debate it is this: because of the long term impacts we as societies need to be prepared for crises and disruptions. We therefore need to be discursively prepared, without scientists or politicians patronizing us. We need to generate public communication about these issues and keep them going. There is no magic wand to 'solve' either of these problems. We will need to keep talking, researching and doing things about them. By the time the current financial crisis is over, the next will be in the making.