Climate Change Incentives Are Out of Whack
Note: The following blog post is an opinion piece authored by an Edmonton based member of the Global Shapers Community. This blog post does not necessarily represent the opinions, values, or mandates of the Global Shapers Community as a whole.
“Show me the incentives and I'll show you the outcome." – Charlie Munger
I think we all can agree that humans are horrible savers and planners. We are also terrible at sacrificing today for something deep into the future. Just look at the Canadian household debt ratio.
Human evolution has twisted our perceptions (overweighting losses to gains). But (for similar evolutionary reasons) we also overweight the present relative to the future and we prefer certain gains to uncertain ones.
· Cookie today > next week
· High calorie diets this week > Healthy strong body next year
· High standard of living and consistent wealth growth > Our environment
We want our iPhone and gas-guzzling luxury SUV, but we also appear to care about the climate policies of our political parties. In addressing climate change, the costs are unfortunately heavily front-loaded and relatively certain; the gains are in the future and less certain. In short, our brains are wired for a long time ago and a place far, far away. The human race isn't going to “react” or “project our feelings” out of this dire climate situation, in my humble opinion.
Some assumptions I've made:
· Climate Change is real and fast approaching
· Human progress and economic growth are integral to global stability
· India, Africa, South America and Asia aren't going to stop industrializing so our planet “survives”
SO! Why is bad stuff stickier and why are we the way that we are?
Dr. John Cacioppo of Ohio State University showed respondents pictures with positive (Ferrari), neutral (hairdryer), and negative (dead bird) valences and recorded the electrical activity in the brain for each of the stimuli. He found that the more negative the stimulus, the more electrical activity generated by the cerebral cortex. Our brains work overtime to hang on to bad information for a very specific reason:
· Good things are nice but not life or death
· Mistakes can be deadly
This also shows itself in marriages. Marriages in which there are equal parts negative and positive interactions are doomed to fail because of the brains tendency to weigh negative events more heavily than positive events. The magic number for this seems to be 5:1.
The lesson in this:
Humans are wired to survive, not thrive, and our body/mind is programmed to overemphasize fear. Creating a life of meaning requires short-circuiting this fear-first response and taking appropriate risk in life, markets and business. In order for us to care about something so long-term detrimental today (our environment) and to sacrifice now is to go against everything we evolved to become.
So how can we realign global incentives so that our human nature, developing nations, and our environment can all survive and thrive?
How can we have our cake and eat it too?
We have to, because it's the only way this is going to work.
- Joel Shackleton, Global Shapers Community Edmonton Hub
Dated October 1, 2019