Pascal's Wager on Global Warming?
Katherine Mangu-Ward | May 17, 2007, 12:19pm
Jack and Suzy Welch's column in Business Week suggests that corporations should make a Pascal's Wager-like call on global warming:
We believe that, whether the impact of global warming ends up being mild or sever, companies have to adopt a “here it comes” mind-set and mount a well-reasoned plan. Any other response would be bad business.
Our reasoning is hardly original. It’s the same as Pascal’s Wager. Back in 1670, basically using game theory, the French philosopher argued that it was a better bet to believe in God because the expected value of believing is always greater than the expected value of not believing.
The same goes for global warming. If you accept it as reality, adapting your strategy and practices, your plants will use less energy and emit fewer effluents. Your packaging will be more biodegradable, and your new products will be able to capture any markets created by severe weather effects. Yes, global warming may not be as damaging as some predict, and you might have invested more than you needed, but it’s just as Pascal said: Given all the possible outcomes, the upside of being ready and prepared for a “fearsome event” surely beats the alternative.
This sounds to me like a tarted up version of the precautionary principle, which counsels extreme caution in the face of possible (environmental) threats.
Ron Bailey takes on the precautionary principle, and looks at the possible costs of "investing more than you needed."
Environmentalists often liken technology and economic growth to a car careening down a foggy road. They suggest that it would be better if we slowed before we crashed into a wall hidden in the fog. The Precautionary Principle, its champions believe, "would serve as a `speed bump' in the development of technologies and enterprises."
Unfortunately, these principles and tenets may sound sensible to many people, especially those who live in societies already replete with technology. These people already have their centrally heated house in the woods; they already enjoy the freedom from want, disease, and ignorance that technology can provide. They may think they can afford the luxury of ultimate precaution. But there are billions of people who still yearn to have their lives transformed. For them, the Precautionary Principle represents not a speed bump but a wall.
Of course, the threat is far more serious when taken by state actors. If corporations take a global warming Pascal's Wager too far, they'll just lose out to competitors and life will go on.
Via Freakonomics blog
MattXIV | May 17, 2007, 2:40pm | #
DanT/MikeB,
Ok.
Problems with the wager itself:
First, the idea of an infite positive or negative utility doesn't actually make sense conceptually. Scalar utility values are a fiction used to make economic modeling practical. Preferences are actually a set of preference relations between a finite number of states. This normally doesn't matter in economic modeling, as the finite states are close enough that the can be treated as a curve, but it should not be taken as a literal quantity. Even assuming utility is a scalar, there is no reason to perclude the values that a human can experience wouldn't have a finite upper bound.
Second, Pascal erroneously assumes that there is only one set of beliefs to be rejected or denied. The existence of several well-established mutually exclusive belief systems with Heaven/Hell consequences means that the expected values will once again depend on the probability of any given belief being true. An since in addition to established religions, there are an infinite number of possible belief sets with Heaven/Hell consequences, the expected value cannot be evaluated, since the term multipling the infinite utility term is 1/infinity (for the sum of Pn for n 1 to inf to equal 1, each event must have an infinitely small probability). It is impossible to tell the value of inf/inf, so unless the number of belief sets under consideration can be bounded, the expression cannot be evaluated.
Third, the premise is flawed because belief cannot be chosen. An omniscient deity will know if you're just going through the motions, so the belief has to be sincere, which it can't be unless you would have believed it in absence of the Wager's argument.
Practical problems with the wager's prescriptive aspects:
Pascal's wager wouldn't just show that you should believe in God, it would also shows that anything that has a non-zero probability of increasing your chances to go to Heaven over Hell will infinitely increase your expected utility. Hence, you should try to die as soon as possible (suicide would be percluded in most Christian versions of the wager, but you can always smoke cigs, eat poorly, not exercise, and drive a motorcycle without a helmet), only suscribe to religious beliefs that hold that non-believers are going to Hell, and engage in any concievable action regardless of personal cost that is theoretically possible of currying favor with the devine.
Neu Mejican | May 21, 2007, 1:41pm | #
"Tease you for your attempts to turn this into dick-waving ego trip, sure. I am sorry if that's dismayed you, but that's just not a game I'm interested in playing with you."
Dismayed is not an emotion I have felt in any of our discussions. And no dick waving attempts occurred from my end. Not my problem if you see wagging naughty bits in the white spaces... ;^)
And just to be complete in stating my position.
When you say
"resist the urges to tinker and impose proposed solutions and let people more informed (and more specifically informed) than legislators address solve their own problems."
and
"keep the government out of the way so the best green practices can win out."
"trying to get the government to "create positive changes" in an adaptive, dynamic market is a remarkably clumsy, blunt instrument"
You seem to ignore the current context which includes government using its blunt force in the market to encourage certain goals. Opposition to government involvement in the market is one thing, but policy discussions need to be about how to change the status quo since the status quo is clearly maladaptive. Government action can involve releasing restrictions just as readily as it can mean imposing them. When I discuss government action I include actions with both positive and negative valence.
As for you more specific points.
"Having bureacrats run ad campaigns and whatnot to tell businesses how they should do things will be useless at best."
Not true at all.
Technology transfer programs such as those run by Sandia Labs (a fed. research lab) have been very successful. Businesses will seek out this information, but may not always have access to it so that it can be implemented. This is the kind of task that government can facilitate.
http://www.federallabs.org/education/
"This is the sort of wannabe-command-economy stuff that demands extreme reluctance. At this point, I'm happy to oppose such efforts."
This proposal is made in light of the fact that tax incentives - command economy stuff is part of the status quo...if it is going to be part of the game anyway (it is), then changing the priorities to address GW makes sense to me. Whether the game as currently played is optimal in theory is another discussion.