"He's a snake in the grass, I tell ya guys; he may look dumb but that's just a disguise; he's a mastermind in the ways of espionage." Charlie Daniels, "Uneasy Rider" Elinor Ostrom: Another Nobel Laureate jumps the climate shark (Proceed at Own Risk) - TT's Lost in Tokyo

Elinor Ostrom: Another Nobel Laureate jumps the climate shark (Proceed at Own Risk)

On December 16, Spiegel Online ran the following interview with Elinor Ostrom, whose 2009 Nobel prize in economics (shared with Oliver Williamson), was widely applauded by Austrian economists (and whose work I have referred to any number of time previously).

Der Spiegel asked some good questions, and Ostrom provided interesting responses, though thoughtful readers of course are left asking for more.

I`ve tweaked the formatting, added my own emphasis, and interspersed a few bracketed comments of my own:


Nobel Laureate Elinor Ostrom

'Climate Rules Set from the Top Are Not Enough`

The world is gathered in Copenhagen in an effort to reach an agreement to slow global warming. Elinor Ostrom, winner of this year's Nobel prize for economics, spoke with SPIEGEL ONLINE about shared ownership, local action and why we can't sit around waiting for politicians to act.


SPIEGEL ONLINE: The Copenhagen summit is about setting new global rules for how we treat the Earth. But are people willing to change their personal lives accordingly?

Elinor Ostrom: Under the right circumstances, people are willing to accept additional efforts and costs. It all depends on trust in the fact that others will also act. Humans have the capacity to engage and see that their own long-term future is harmed if they don't change their lifestyles. Under the right circumstances they understand: It's not me against you. It's all of us against ourselves, if we don't act. So trust really is the most important resource.

[The multi-decade, global trust-building exercise has made a great deal of progress, despite being hampered by gamesmanship, domestic rent-seeking, partisan mistrust, legitimate worries about abuse of government, and the difficulty we all face in actually agreeing there might be a problem (as opposed to a big scam/mass delusion).]

SPIEGEL ONLINE: How can we generate enough trust so that we all act in concert?

Ostrom: Rules set from the top are not enough. Successful communities often have a few common design principles -- monitoring and sanctioning of the participants, for example. They also have conflict resolution mechanisms in place and the people have some authority to make their own rules. Under those circumstances humans can develop some trust in each other -- faith that if they take a costly action that benefits everybody in the long run, others will also invest.

[Yes, but does "community"-level action scale? How do we make a "community" with billions of people we have little interaction with? Is Ostrom suggesting we need more global-level "grassroots" community-building, in addition to leader-level trust-building?]

SPIEGEL ONLINE: Why is it less effective if governments establish strict rules from the top down?

Ostrom: Because people will not identify with it. My research has shown that forests managed by local communities are in a far better state than state-run parks, where locals feel left out and officials can be bribed. Let us imagine, we live in a village and have all agreed that none of us is going to be in the forest on Saturday or Sunday, so that we can give the forest time to recreate. If I then see you in the forest when you're not supposed to be, I will probably yell at you. If only the state is in charge, I will just walk on past.

[Now she`s talking; libertarians and a host of others almost completely reject even climate "science" out of a reflexive but understandable concern that climate "policy" is or will be sufficiently corrupt as to vitiate any intended/purported gains. The same is true with many on environmentalists and others on the left, who feel that powerful corporate insiders will make climate policy ineffective.]

SPIEGEL ONLINE: In your research, you focused on local and regional levels. What makes you think that your solutions would work for the entire planet as well?

Ostrom: Indeed, the global scale is a challenge. Building that kind of knowledge between the different parties is tricky. We need our global leaders to take some of the decisions on a very big level. Here at the summit, those guys are talking to each other and gaining some trust because they meet face to face. But then they go home -- and that's when the real action starts.

[It`s tricky, but much progress has been made; even Sen. Robert "Coal" Byrd is signalling that coal states need to change, and China abd India both concede change is needed - though naturally they make an equity argument that they have a right to catch up with out per capita CO2 emissons (which are four times theirs).]

SPIEGEL ONLINE: Can money help to build trust between developing nations and industrialized nations?

Ostrom: Maybe, and it is hard to see a climate deal without serious financial commitments. But at the same time, I am very worried and nervous about corruption. If we pour money into a country in which the corruption level is very high, we would be kidding ourselves not to think that some of it will end up in the wrong pockets. At first, a lot of the proposals on the table sound great. But four to six years later, you have a lot of politicians who have money in Swiss bank accounts. What we need are tight rules and controls to ensure that the billions that might be put on the table here are used correctly.

[Ostrom is absolutely right, if understated - perhaps most "development" aid has been disastrous. Still, it might make sense for some aid money to go to climate adaptation projects, and to allow offsets for preserving tropical forests - if the money goes to indigenous peoples, and not corrupt governments.]

SPIEGEL ONLINE: In other words, an anti-corruption task force -- like the one that exists in Indonesia -- might be the best environmental protection agency?

Ostrom: Absolutely! If you look at the role corruption plays in giving away forests to big corporations and in looking away if forest protection rules are broken, you will see that bribery is one of the main contributors to environmental destruction.

[A fruitful focus by libertarians and conservatives might be on simply helping to bolster law and order - including the property rights of locals - in developing nations.]

SPIEGEL ONLINE: Is it possible to save the climate with a single treaty?

Ostrom: One treaty will not solve the problem entirely. This is why I propose a so-called polycentric approach to tackling climate change. We need all levels of human society to work on this to be effective in the long run. Cities, villages, communities and networks of people have been neglected as players.

[I`m not sure I agree with Otrom here; there has been plenty of action on climate on individual, local, corporate and state levels, thanks in no small part to the stifling of climate policy at federal levels under the GWB/Cheney administrations. While such "thousand points of light" efforts may be bolstering mutual trust at various levels around the world, federal and international policy coordination is still needed, fraught with rent-seeking problems though it may be, ]

SPIEGEL ONLINE: What happens if there is no agreement?

Ostrom: We need to get away from the idea that there is only one solution on the global scale. There are many, many levels in between. So we need to take action on smaller levels. If the politicians do not agree in Copenhagen, I would like to embarrass the hell out of them by getting some agreements going where people are doing something -- essentially saying: "We are tired of waiting for you." The city of Freiburg is a very good place to see what that actually means.

[Politicians don`t embarrasss so easily; rather they see opportunities to jump on and use band wagons to bolster their own careers and to steer favors to rent-seekers.]

SPIEGEL ONLINE: Why Freiburg of all places?

Ostrom: I spend quite a bit of time in Germany and I'm very impressed by some of the local action I see. Local action cannot do it fully, but just think about all the bicycle-paths that they have built there. That is a case where the action of individuals is reducing emissions. At the same time it is a very healthy thing. On Sundays everybody is going to the woods and has a good time on their bikes -- and not in their cars. It's good for your health and for the environment. So everyone should ask himself: Why don't I bike to work and leave the damn car at home or get rid of it entirely?

SPIEGEL ONLINE: Still, such a decentralized approach sounds painfully slow. We need rapid action if we wish to limit global warming to 2 degrees Celsius.

Ostrom: If we sit here and twiddle our thumbs and wait for these guys up there to make a decision -- that is what I would call painfully slow. Should we just blame the politicians? I am not saying that we can solve it entirely, but we can make significant steps. To some extent we can challenge them. Everyone can contact foolish politicians like some US Congressmen who oppose climate change action by e-mail or phone and let them know that they are acting irresponsibly.

[Unfortunately, Ostrom doesn`t address how we figure out how to trust our own government, and how to mitigate/manage the problem of rent-seeking. But I`ve tried to note the types of policies that libertarians cand - and should - support here. Some Austrians might even want to consider the root cause of rampant renk-seeking and fights over the wheel - the corporate risk-shifting juggernaut that has its genesis in the grant of limited liability]

SPIEGEL ONLINE: Why is the US so reluctant to fight climate change?

Ostrom: In the economic emergency we are experiencing, some people think that we cannot afford it. I think it is the other way around, if we don't act now we will run into even greater economic problems in the future. And of course we still have the bad legacy of our previous president, George W. Bush. For eight years, the White House didn't consider the issue to be important. We did not have American leaders who understood that there is a scientific foundation. Obama has a much higher chance of understanding the science. But even for him it is just damn tough.

[It`s  even more complicated, obviously. The Bush administrtion actually DID work on building trust with China and India, supported the IPCC science process, etc. But they were also rather naked catering to coal and other fossil feul interests, while making political hay by labelling all concerned scare-mongering socialists. Not only is it extremely difficult to coordinate this issue globally, it`s also difficult politicaly to tell Americans that fossil-fuel-based energy is underpriced, to seek to undo public utility monopolies, or to address the favors to dirty coal in the Clean Air Act, or to streamline nuclear power licensing.]

SPIEGEL ONLINE: Worries about climate change have slowly resulted in people seeing the Earth's atmosphere as a common good that we all must protect. Where is the next challenge?

Ostrom: The oceans! They are being threatened to an ever greater degree. It is a disaster, a very difficult situation. The fish resources are overexploited and waste, including CO2, is dumped in huge quantities into the ocean. The law of the sea has not been effective at all. A lot of fishing ships act like roving bandits. That's why better ocean governance is one of the top priorities for safeguarding the future.

Interview conducted by Christoph Seidler and Christian Schwägerl

I would be remiss if I did not point out that Ostrom recently elucidated her views on climate policy in much greater length in a paper that she prepared at the behest of the World Bank. Yes, Ostrom`s trying to give the Beast indigestion - from the Inside. 

Here`s the extract of her paper,  "A Polycentric Approach for Coping with Climate Change":

Abstract: This paper proposes an alternative approach to addressing the complex problems of climate change caused by greenhouse gas emissions. The author, who won the 2009 Nobel Prize in Economic Sciences, argues that single policies adopted only at a global scale are unlikely to generate sufficient trust among citizens and firms so that collective action can take place in a comprehensive and transparent manner that will effectively reduce global warming. Furthermore, simply recommending a single governmental unit to solve global collective action problems is inherently weak because of free-rider problems. For example, the Carbon Development Mechanism (CDM) can be ‘gamed' in ways that hike up prices of natural resources and in some cases can lead to further natural resource exploitation. Some flaws are also noticeable in the Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD) program. Both the CDM and REDD are vulnerable to the free-rider problem. As an alternative, the paper proposes a polycentric approach at various levels with active oversight of local, regional, and national stakeholders. Efforts to reduce global greenhouse gas emissions are a classic collective action problem that is best addressed at multiple scales and levels. Given the slowness and conflict involved in achieving a global solution to climate change, recognizing the potential for building a more effective way of reducing green house gas emissions at multiple levels is an important step forward. A polycentric approach has the main advantage of encouraging experimental efforts at multiple levels, leading to the development of methods for assessing the benefits and costs of particular strategies adopted in one type of ecosystem and compared to results obtained in other ecosystems. Building a strong commitment to find ways of reducing individual emissions is an important element for coping with this problem, and having others also take responsibility can be more effectively undertaken in small- to medium-scale governance units that are linked together through information networks and monitoring at all levels. This paper was prepared as a background paper for the 2010 World Development Report on Climate Change.

I left this earlier comment on the paper at the blog of libertarian-leaning water economist David Zetland:

TokyoTom said...

David, I saw this elsewhere and read through this,but count me unimpressed. It`s basically a recounting of what we already know - that there are formidable barriers to reaching coordinated global decisions on climate policies, that local, regional and efforts are proceeding and will be needed in any event, both in mitigation and adaptation.

Nothing about whether local, regional and national efforts scale to the size of the problem.

Published Sat, Dec 19 2009 1:50 AM by TokyoTom