Bounded rationality in climate change policy development

We are already committed to a certain degree of climate change beyond that already observed, even if atmospheric greenhouse gas concentrations were stabilized today. Our vulnerability to the impacts of climate change is increasing for reasons not associated with emissions, including social exclusion, unsustainable development and economic inequities. It is inevitable, then, that damaging and even catastrophic impacts will continue to occur regardless of efforts to mitigate emissions. In this context, it is worth being explicit in defining our goal: to clarify and secure the common interest in the face of climate change, present and future. Stabilization and reduction of concentrations is one means; making adaptations to inevitable impacts is another.

Adaptation to reduce vulnerability typically arises from a perceived threat to existing values, a perceived window of opportunity, or both – rather than a change in the values, or preferred outcomes, themselves. Meanwhile, the quest for mandatory targets and timetables for reductions in greenhouse emissions has not risen above politics on a scientific and technical foundation. In both cases, political will is an important limiting factor.

At a deeper level, understanding this limitation may be grounded in the behavioral model of bounded rationality. The most basic constraint on our capacity to find better strategies arises from our highly simplified internal representations of the external real-world situation. The direct corollary of this constraint is that the focus of attention in a community or institution is typically structured by an formalized division of labor – in public safety, education, or finance, for example – that are separable or nearly so from other areas. But the allocation of attention in this way is subject to disruption by exogenous events such as natural disasters. A solution to disruption is feedback to correct for unexpected or incorrectly predicted events. The behavioral model of bounded rationality emphasizes feedback over predictions. Thus, when the more realistic assumption of bounded rationality is taken into account, the problem of responding to climate change can change from choosing the right course of action to finding a way of determining, very approximately, where a good course of action lies.