“Humans are absolutely terrible at making decisions,” Steven Levitt told the crowd of participants today at the Shell-sponsored Energy Summit 2012 in Houston, Texas.
For two days, the Summit brought together leading business and academic thinkers from the fields of renewable and traditional energy, plus food and water policy. Proceedings were held in the farm-to-table Grove restaurant on the Discovery Green, in the heart of downtown Houston, which is sometimes called the “Petro Metro” because of its leading role in the fossil fuel industries.
There was a lot of talk of legacy fuels over the two days, as well as newer alternatives. Levitt, best known for co-writing the blockbuster book Freakonomics with journalist Stephen Dubner, encouraged the industry leaders to take a data-driven approach to thinking about energy and environmental issues.
Levitt won the prestigious John Bates Clark medal in Economics in 2004, and he continues to hold down a professorship at the University of Chicago, despite a busy speaking and consulting schedule. Freakonomics has sold more than 4 million copies, spawned a sequel (SuperFreakonomics), was made into a documentary film, and launched a successful blog and radio series.
Levitt is best known for applying the tools of neoclassical economics to social problems that had been historically ignored by economists. As he said at the Energy Summit, his technique is to examine underlying incentives that guide behavior.
That approach, and crunching lots of data, led him to demonstrate that real estate agents don’t always act in their clients’ best interests, and that the factor that seems to correlate most highly with falling crime in the 1990s is the legalization of abortion in America a few decades earlier (more abortions meant fewer “unwanted” children, which led to fewer criminals).
Levitt told the audience that successful policies need to reflect data and take into account what motivates people. On the former, he said statistics show that drunk walking is eight times more dangerous per mile than drunk driving. On the latter, he said the Endangered Species Act lacks a prohibition on development on habitat during the comment period before a species is granted protection in a given area, allowing some people to despoil sensitive areas.
(Levitt’s co-author, Stephen Dubner, also pointed out that the duo’s research shows most pundits actually aren’t better than a coin toss at predicting the future.)
“A lot of things I write about have made people angry,” Levitt admitted. “I wrote about the link between abortion and crime, I caught Chicago teachers cheating, and I’m not popular in Japan because I wrote about Sumo wrestlers who collude with each other at tournaments. But nothing could have prepared us for what we wrote about global warming.”
In their book SuperFreakonomics, Dubner and Levitt largely dismissed conventional approaches to mitigating climate change like reducing carbon emissions, and instead advanced geoengineering solutions, by which scientists hope to cool the Earth. “I figured I’m not a scientist, but I’ll take the science as given and look at the tradeoffs and externalities,” Levitt said.
“After we wrote about it we were criticized by virtually every person on the planet, except my mom, who stood by me,” Levitt joked.
The authors said they came to the conclusion that getting global cooperation on reducing greenhouse gas emissions was highly unlikely. They also argued, controversially, that it could take $1 trillion a year to stave off global warming by curbing emissions.
Instead, they said governments should put their weight behind geoengineering plans, such as pumping sulfur dioxide into the stratosphere to block solar rays, mimicking the effects of the 1991 Pinatubo volcano eruption. Levitt pointed to a scientist’s proposal that would allegedly provide enough cooling to offset global warming for $200 million a year.
He added that existing sulfur dioxide emissions from coal plants could also be pushed higher up, or that we could send solar-powered dinghies into the seas to spray saltwater into the air. The resulting droplets would form more clouds, which would reduce insolation into the oceans, and therefore cause cooling, the theory goes.
Still, Leavitt admitted that “no one wants to do these things,” because “no one wants to play Mother Nature.”
It’s not hard to see why, given past attempts to introduce invasive species that went awry, or the unintended consequences of DDT and CFCs.
Many environmentalists also blasted Levitt and Dubner for promoting unproven technologies at the expense of what we know works: reducing emissions. They argued that the very idea of a techno-fix could placate the world into inaction and business as usual, or even worse.
Levitt and Dubner now ask what’s so wrong with giving geoengineering research a try, at least so we have something ready if things get really heated. Levitt added, “We had nothing to do with Copenhagen and Kyoto failing completely, that was obvious.”
Setting Aside Morality
The economist admitted that he arrives at his conclusions without giving heed to moral considerations. “My abortion-crime theory is disgusting to everyone, to all sides of the political aisle, but you couldn’t have gotten to that unless you put your revulsion aside,” said Levitt.
“You would never want an economist to run the world, but I think you need one behind the scenes,” he added.
“When Stephen and I approach a problem, we are like children. We walk around knowing nothing about the world, and not seeing the barriers that come with knowing something. Conventional wisdom has obstructed people from seeing it,” he said.
It is that outsider status when it comes to climate change that also so enraged groups like the Union of Concerned Scientists and Greenpeace. (The former wrote SuperFreakonomics “repeats a large number of easily discredited arguments regarding climate science, energy production, and geoengineering.)
Yet, it’s also true that outsiders can sometimes bring fresh ideas.
Can geoengineering save the planet? Perhaps, although it’s far too early to tell, and the amount of research funding is currently puny, in part because of its negative reception thus far.
Levitt and Dubner may not have the answers to everything, but they can suggest that any policies and solutions should be examined with an eye to all available data, and by trying to understand incentives and motives behind behavior. It’s a powerful approach.
Brian Clark Howard is a writer and editor with NationalGeographic.com. He was formerly an editor at The Daily Green and E/The Environmental Magazine and has contributed to many publications, including TheAtlantic.com, FastCompany.com, MailOnline.com, PopularMechanics.com, Yahoo!, MSN and elsewhere. His latest book, with Kevin Shea, is Build Your Own Small Wind Power System.