Global Warming

Pascal's Wager on Global Warming?

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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