Severin Borenstein at UC Berkeley argues against the “try everything” approach to searching for solutions to mitigating greenhouse gas emissions. But he is confusing situations with relatively small incremental consequences (even the California WaterFix is “small” compared to potential climate change impacts.)
Instead, when facing a potentially large catastrophic outcome for which the probability distribution is completely unknown, we need a different analytic approach than a simple cost-benefit analysis based on an “expected” outcome.
- Martin Weitzman and others write about this issue.
- Rob Lempert at Rand Corp writes about “robust decisionmaking” under “deep” uncertainty which best fits the situation.
We need to be looking for what decision pathways lead us to the situations create the most vulnerability, not for which one has the “optimal outcome.” Policymakers and stakeholders looking desperately for any solution intuitively get the notion of robust decisionmaking, but are not receiving much guidance about how to best pursue this alternative approach. Economists need to lead the conversation that changes the current misleading perspective.