Climate storytelling, climate science, and climate fairy tales

Programming note: Apologies for the late running of this article – Tony was enraptured by the Olympics on Sunday

When scientific principles are applied in a careful, methodical way, we know they work.  Indeed, the vast bulk of human progress can be attributed to the application of the scientific method.  This truism applies as much to the social sciences, like economics and finance, as it does to the physical, so-called “hard” sciences.

We also know that climate change is an existential, urgent problem that may require us to prioritize speed over purity of method.  

Put it this way – when faced with a ticking time bomb you may have to cut the red wire, even though it may detonate the device.  Taking the action gives you a chance of salvation; inaction guarantees that you will be blown to smithereens.  In the case of climate change, we know time is short but we don’t know how short.  The climate bomb, in contrast to the more literal variety, does not have a visible countdown timer.

This concept, which is known as the “precautionary principle”, can be used to justify a range of actions that may help to address global warming, even if we’re not entirely sure that the actions will succeed.  I generally support this concept, but the threshold of plausibility really should be defined more clearly.  If someone suggests that drinking the Kool Aid will fix global warming, you should remain skeptical even if you support the basic tenets of precaution.  

The precautionary principle has also been invoked to validate a form of inquiry that dilutes the scientific method.  “We’d love to have the luxury of waiting for the data to be right before stating our conclusions, but the climate clock is ticking and time’s a-wastin’.  Prioritizing speed over sanctimony, here’s a list of all the corners we cut in deriving our results.”   

This idea came into stark relief for me in the past week when I was pointed to Fiedler, Wood, Grose and Pitman (2024), recently published in the journal Accounting and Finance.  The paper advocates a “storyline” based approach to risk assessment that “emphasise(s) plausibility over probability.”