About this Blog

This blog (originally named Climate and Risk) was partially inspired by a paper (here) entitled ‘Mitigate, Adapt or Suffer’ by the leading climate scientist Lonnie Thompson. That article argued that the majority of scientists working in the field “are now convinced that global warming poses a clear and present danger to civilization”.

(Within the non-fringe scientific community, the acceptance of climate change is now almost universal. Accordingly, this blog takes the reality of climate change as a given; the truly interesting questions are “how fast is it happening and how bad will it get?”)

As an ex-hedge fund manager, equities analyst and economist steeped in a neo-classical analytical tradition that sees progress as almost a certainty, the science behind climate change came as something of a shock. Lonnie Thompson and others are advancing a cogent argument that all our economic and social relations could be destroyed if we let the global climate change drastically.

Climate change is therefore the kind of risk that every thinking adult should understand: the worst outcomes are seeing a steadily increasing probability of coming about, and the pay-offs associated with these outcomes are horrible. Unfortunately, due to the complexity of the problem and the fact that it undermines expected life paths, most people choose to remain ignorant of the risk of climate change.

At the same time, global warming prediction is something of a Gordian knot as it does not just rest on the physical sciences (for example in terms of temperature rise in response to a higher concentration of green house gases), but also the geopolitics and societal challenges posed by emission mitigation and climate change adaption.

The latter soft sciences, in turn, are highly influenced by the looming problem of resource constraints (energy among them) and the degree to which technology can help us transcend such problems. The feedback loops among these variables are complex and could evolve in a number of different ways. Peak oil could blunt global growth and therefore put a brake on carbon emissions, or it could lead to the accelerated use of dirtier sources of energy production such as tar sands or coal that exacerbate global warming.

Meanwhile, technology could present us with a non-carbon source of energy that puts an early stop to climate change or it could undermine existing economic institutions and thus prevent mitigation or adaption. Moreover, technological progress is deeply entwined with economic growth. Technology-led productivity gains have been the bedrock of global economic growth since the industrial revolution, lifting billions out of poverty. Should such productivity gains decelerate (and there are tentative signs that this is happening), we will have far less future wealth available to transcend the climate change and resource challenges that we face.

This blog aims to help people quantify, interpret and respond to the risks posed by global warming, resource scarcity and technological change to their way of life. Critically, while humans are not well designed to deal with longer-term time horizons, they are capable of such forward-looking thought (think of education and insurance). My hope is that individuals will consider the risks to themselves and their families from the possibility that future climate, resource availability and the fruits of technological progress could evolve in a manner quite dissimilar to the recent past.

Unlike the hardcore of active climate skeptics, the majority of people I meet are passive skeptics or deniers; that is, they deny the importance of climate change to the future of themselves and their families through choosing to remain uniformed about the issue. At the same time, only a small minority consider the potential impact to their lives should economic growth cease, or access to cheap food and energy evaporate. But choosing to remain ignorant of climate change, resource constraints and technological change is a very short-sighted decision to make (especially if you have a family).

This blog is not an extension of “doomer porn” and does not see an imminent collapse of civilisation. However, it does view itself as an antidote to the irrational belief that technology will solve all problems and economic growth is all but guaranteed—the type of sentiments that still underpin the mainstream media and were elegantly extolled in Matt Ridley’s recent book “The Rational Optimist”. Unfortunately, the facts as conveyed in the form of price and volume are telling us something negative is going on. In short,we face a new world of risk.

Critically, this blog is neither anti-capitalist nor anti-market as are some blogs sympathetic to the environment. While climate change is probably the single largest market failure ever, this is not a reason for scrapping markets (just for regulating them more wisely).

With two advanced degrees in Economics and Business, a CFA and long-term experience as an economist, analyst and hedge fund manger (and a past winner of the EuroHedge Japanese Equity Hedge Fund Manager of the Year Award for my sins), I hope this blog will also take a somewhat different tack to the many excellent blogs that address global warming, resource constraints and technology from a scientific standpoint. The blog starts from the premise that to manage risk we must actively understand what risks we face.

Finally, optimism and happiness are not always linked. Indeed, misplaced optimism can fade into recklessness and later remorse. A rational pessimist may be quite content, having adapted well in advance to what life is going to throw at him or her. Forewarned is forearmed.

Justin Bowles, Oxford, U.K.

11 responses to “About this Blog

  1. Your original thought for a Blog title: ‘Mitigate, Adapt or Suffer’ is a good one. My first book was going to be ‘Adapt or Die’. My publisher said that is too gloomy. It became:
    Adapt and Thrive: The Sustainable Revolution
    Upbeat titles are all very well but warm words will only take us so far, we need to gather a group of capable people to take action….

    • Yes, it’s tough thinking how to engage with those who are aware of climate change, but who think it is a low priority in their lives. The problem here is that by the time climate change becomes a high priority in people’s lives (or those of their kids) there will be little that can be done about it. I think, though, that the insurance industry has some lessons to give here on how to educate people over long-tailed, distant horizon risks.

  2. I would have thought opinions about the reality of climate change are irrelevant. It’s like arguing that war is a bad. Through-out history mankind has thought this, although war has persisted.
    While the supporters of climate change seem to take glee in every aspect of extreme weather being attributed to mankinds over indulgence of fossil fuels. The deniers are like a person walking towards storm cloud with-out an umbrella.
    I have no doubt that climate change will occur but I cannot see any way to stop this happening so any long term strategy has to be about coping with the reality of the situation.

    • Well opinions do matter since they impact on policy (just look at the stance of the Republican US presidential candidates on climate change-they basically reflect grass roots opinion among Republican party activists).

      As to not being able to do anything, well this is a choice. The global community did manage to tackle the problem of CFCs and the ozone hole. Admittedly, the question of greenhouse gases and climate change is at a whole higher level of complexity, but it is solvable — just would change the way we live a little bit.

      • Speaking of the ozone hole, that’s a case in point: the pubilc — those that don’t confuse ‘ozone’ with ‘carbon dioxide’ — believes that ‘we solved the ozone hole problem. The reality is that the hole is growing again because of the changes to the atmosphere induced by global warming.

  3. Dear Justin, having discovered your blog (via a link in a comment at realclimate.org) and spent the best part of 2 days reading the whole thing, I just wanted to say thank you for your efforts. The breadth and the detail are terrific and your point of view seems to me spot on and rarely found elsewhere. Is this a full-time project for you?

    Since you like data, can I suggest that you look into world investment in renewable energy minus investment in fossil fuels? I have only ever seen this charted once (unfortunately I forget where). It should be a long-leading indicator of future carbon output. It has never yet gone positive. It nearly did, a few years ago, but turned strongly negative again, probably due to investment in ‘unconventional’ oil and gas.

    Keep up the good work!

    • Thanks for your kind comments.

      I do other stuff apart from the blog. I hope to spend half my time on macro, top-down issues (such as this blog), and half on micro, local issues. The latter includes working on community energy projects with the Transition Network and other organisations.

      On the micro side, given that my background is economics/finance, I hope I can complement work done by those with a more scientific/engineering background (so I can help put business plans together, negotiate funding and so on).

      On the macro side, I aim to communicate ideas that come out of more specialist areas, like realclimate.org, to a more general audience. Also I want to be a bit of a bridge: the types of people who read The Wall Street Journal, The Economist and The Financial Times usually wouldn’t be seen dead attending a Transition Town meeting, while many sustainability movement people often view folk from the financial world with a certain amount of suspicion.

      But with climate change and resource depletion problems deepening, people from all walks of life will end up confronting the same life changing issues.

  4. Thanks for including a link to my blog in your blogroll.

  5. Or ‘Peak Oil’ could result in the use of cleaner hydrocarbon fuels such as natural gas as opposed to the coal, and heavier hydrocarbons you mentioned in the article. Natural gas is our best transition fuel while we work our way to alternatives, and the natural gas will prevent the ‘blunting of global growth’ which you cited. Peak/cheap oil is real, but with technology the unconventional hydrocarbons (shale oils, and gas) are coming down in costs — thus making them a semi-unconventional fuel source. Regardless, the move away from coal is happening here in the U.S. More natural gas was used to produce electric this year than coal in our country. The faster we move away from coal the better. We have the natural gas to replace coal for a few decades, but not for hundreds of years. Plus LNG has dropped drastically in price due to the drop in crude oil. Regards.

  6. Reading your blog, and added it to my blogroll.

    I noticed the link to Professor Thompson’s paper above is dead. I would recommend this link instead.


    • Thanks for flagging the broken link. I’ve found a replacement for the original article. I’ve kept that one because it was such an important article in my own personal journey to understanding the threat from climate change, and Lonnie Thompson’s heartfelt appeal for the world to respond had a major impact on my thinking. But will check out your link regardless. Thanks

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