Scientists vs Economists – II

Two opinion pieces in today’s Guardian prompted me to revisit the science vs economics face-off (a thread I began here). For all their successes, there is one thing these two disciplines are equally bad at – predicting the future.

The first opinion piece summarised a scientific paper that concluded that the risks posed by the new Large Hadron Collider should be re-assessed. Apparently the chance of catastrophic black holes forming is not as infinitesimally small as previously thought; a sobering, if not mildly terrifying, thought. The article (written by a consultant for New Scientist, presumably himself a scientist) concludes that:

“Science is not the arbiter of truth. All it can do is offer opinions about the answers to certain questions that we ask of nature. And it reserves the right to  revise those opinions in the light of future discoveries.”

This statement is as relevant to the science of climate change it is to theoretical physics.

As an engineer, I’m very happy to draw upon science’s knowledge of the fundamental things like the the conversion of energy and the behaviour of materials and fluids; but unfortunately most of nature’s processes are far too complex to be encapsulated in a handfull of relatively simple equations. Science, in its current form, cannot provide definite conclusions ahead of time to some of our most important questions.

What I find interesting with this point are the parallels I can see with economics. Despite all the theories and enormous amounts of data, economics is far from being the “arbiter of truth” when it comes to the fate of society. Very few predicted the economic crisis we are in now (prominent exceptions were Black Swan author Nassim Nicholas Taleb and “Dr Doom” Nouriel Roubini). The editorial in today’s Guardian highlights the failure of:

“… an entire class of professional economists who identified the period as the Great Moderation – an unprecedented era of stability, where inflation had been licked and all that was left to do was enjoy gentle growth.”

Sadly, structured disciplines that draw on tried and tested theories are alarmingly deficient in dealing with the problems of our age. One solution for this deficiency, promoted by sustainability advocates, is the Precautionary Principle, or as I prefer to call it, the Don’t Do Anything Unless You Can Be Absolutely Certain That It Isn’t Going To Harm Anything In Any Way Principle (or DDAUYCBACTIIGTHAIAWP for short). To me, DDAUYCBACTIIGTHAIAWP sounds like some form of paranoid paralysis that can be used as an argument against doing anything at all. This very anti-innovation philosophy, when taken to its logical extreme, will simply result in business-as-usual (or, more comically, the end of civilisation and all human life, since everything we do involves some negative impact).

So if this is not the solution, then what is?

A good first step would be to have much more cross-disciplinary cooperation and communication between these two vital disciplines. For example, economists would do well to understand that our society is fundamentally reliant upon the environment – to provide the materials and services on which we base our entire lives, and to accept and process our waste. Absolutely everything our environment provides has limits, some of which we are nearing. Any economic assumption which discounts that – “infinite growth” for example – is dangerously wrong.

Science, for its part, desperately needs to understand the pragmatic realities of economics for it to have any credibility at all. Any predictions of future carbon output should be strongly linked to economic models (imperfect as they may be), and be prescient about the effects of regulations and carbon markets. When the discussion moves to solutions, scientists should be aware of the near impossibility of breaking the stranglehold that fossil fuels have over our society at anywhere near the speed with which they would like.

With the debates and arguments likely to become more frequent over the coming years, the battle lines beween scientists and economists are only going to get sharper. A new spirit of cross-disciplinary thinking is increasingly vital.

Sustainable design for buildings

XCO2 has launched the first in a series of Sustainable Design Knowledge Guides. If you’re interested in how to design buildings for different climates, check it out.

(Apologies for the self promotion)

Scientists vs. Economists – I

Leafing through some back issues of New Scientist recently I stumbled across this excellent special report from October 2008 (How our economy is killing the Earth) that challenges the assumption that limitless growth is a good thing, and looks at the environmental costs of economic growth.

It includes an essay by Herman Daly, one of the strongest voices against the growth dogma in recent times, and a vision of what the world would look like in 2020 with a sustainable, “steady state” economy. This is the essence of the vision:

In our society [of 2020], scientists set the rules. They work out what levels of consumption and emission are sustainable – and if they’re not sure they work out a cautious estimate. Then it’s up to the economists to work out how to achieve those limits, and how to encourage innovation so we extract as much as possible from every scrap of natural resource we use.

I’ll return to the question of whether growth is good or not in future posts. For now I want to pick up on the issue of the roles of scientists and economists in setting the levers of policy.

The vision of society presented in the quote above is an interesting idea, but it reads a little bit too much like a scientist’s wet dream. The obvious problem is getting scientists to agree on anything so important. Despite massive amounts of research and an unprecedented amount of collaboration and peer review, there is still no scientific consensus on the level of atmospheric CO2 we should aim for. A review of recent climate science by the journal Nature found estimates of between 350 and 550 ppm – a big difference when it comes to making policy.

There is a very good reason for such a high level of uncertainty, of course – climate change is a massively complex process, and we may not fully understand it until it is too late. Moreover, the scientific process, by tradition and (perhaps) by necessity, is inherently reductionist; that is, it takes a problem and divides it into smaller and smaller chunks until they reach a size that can be understood and studied in isolation. You then combine all the little bits that you have learned into a coherent model that is, hopefully, a reasonably accurate representation of the whole system.

The problem with complex systems, however, is that the whole can be quite different from the sum of the parts. So even if we understand the sub-processes involved in climate change perfectly (which currently, we don’t), we are still a long way from having a overall model that we can rely on.

So science, in its current form, is limited. Although it can be enormously successful as an explanatory tool, when it comes to predicting the future, it is no more powerful than economics was at predicting the current financial crisis.

Of course that does not mean that we should ignore or disregard the science – far from it. There absolutely must be a better connection between science and policy; economists have claimed a monopoly on policy making for far too long. My point is only that a political system where “scientists set the rules”, as proposed by the New Scientist article, is an interesting idea, but is not likely to be effective, workable, or even desirable.

“So,” you might ask, “what’s your brilliant solution then?”. The truth is I don’t know.