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Battle of the unintended consequences (or, unintended battle of the consequences?)

Melissa Lafsky writes in Freakonomics discusses how biofuels, which have been proposed as an environmentally-friendly alternative energy source, have been estimated to create more pollution than drilling for more oil. And then, of course, climate change is itself a huge unintended consequence of industrialization. I just have a couple of comments.

1. Alex Tabarrok wrote:

The law of unintended consequences is what happens when a simple system tries to regulate a complex system. The political system is simple, it operates with limited information (rational ignorance), short time horizons, low feedback, and poor and misaligned incentives. Society in contrast is a complex, evolving, high-feedback, incentive-driven system. When a simple system tries to regulate a complex system you often get unintended consequences.

I like this description but it doesn’t quite fit either of the examples here. To start with, climate change was an unanticipated consequence of industrialization. But industrialization was not designed to regulate the climate (schemes such as cloud-seeding aside). So maybe Alex’s paragraph is more of a description of perverse unintended consequences.

To take the other example: Yes, biofuels were proposed to regulate climate change, so the first half of Alex’s description works. But the second part isn’t quite appropriate, because the unintended consequences were discovered in advance. According to the quoted report, “Prior analyses made an accounting error.” So in this case it doesn’t sound like a problem in anticipating feedback.

2. This brings me to my second point, which is that the problem seems to have been discovered before the massive shift to biofuels actually happened, so the problem “for the next 93 years” won’t really happen. According to the article, “scientists [are] already calling for government reform on biofuel policies.” So this is more of an anticipated than an actual unintended consequence.

3. Unintended consequences are interesting, but the law of unintended consequences isn’t always so useful in telling us what we should do, since in this case the problem that we’re trying to combat is itself an unintended consequence. I don’t really know what to do with this. These discussions often seem to give the implicit recommendation to do nothing, but I’m not quite sure what “doing nothing” would mean. Reduce fossil fuel consumption to 18th-century levels? Freeze consumption at exactly the current levels? Invade Brazil so that they can’t implement biofuels policies? Any policy, even the default (whatever that is) might have unintended consequences. I think that’s the best message to take from these discussions: that all policies should be examined carefully. But we knew that already, right? I’m not trying to pick on the Freakonomics people here; I’m just trying to figure out where this is all going.

P.S. More here and here.

4 Comments

  1. Leonardo Nunes says:

    The brazilian incentives won't generate this unintended consequence because, according to one of the Nature's articles, the only biofuel that actually reduces carbon emission is the brazilian sugar cane based one. I don't agree with Amazon deforestation but by increasing the brazilian biofuel production the brazilian government will reduce carbon emission.

  2. Bob O'H says:

    Isn't the recommendation to "do more research"? And also to monitor the situation? In Europe, we're now talking about monitoring of GMO releases, because of the unintended consequences problem (or "unknown unknowns" to steal a phrase from your former defence secretary. Who probably would have invaded Brasil, if he had believed in climate change).

    There's an interesting article in PLoS Biology about unintended consequences and cougar conservation. Changes in hunting patterns in Washington (state!) had increased the reports of cougar attacks, and it had been assumed that this was because of an increase in the population size. In reality, the population was still dropping, but the behaviour had changed.

    Bob

  3. derek says:

    Biofuels are an example of things getting mixed up, where half the time they're being advertised as an alternative to fossil fuels when the latter run out (true) and the other half as an alternative to removing fossil fuels from the ground to prevent climate change.

    But what's the connection between using biofuels and not drilling for oil? There seems to be no such connection. Same with nuclear power plants: nobody has explained to me how building nuclear plants naturally stops the drilling for oil and digging for coal.

  4. ZBicyclist says:

    Alex Tabarrok's definition is a limited one that seems political — a bit of hidden libertarianism there? — and doesn't work well in practice

    It's not required that it be a SIMPLE system REGULATING a complex one. Andrew's example of industrialization (complex) affecting climate change (which industrialization wasn't "regulating" in the ordinary sense of that term) is a good one.

    I liked my definition of the law of unintended consequences better (posted on the Jan 22 thread) and still do: "the proposition that [MOST] every undertaking, however well-intentioned, is generally accompanied by [GENERALLY] unforeseen repercussions that CAN overshadow the principal endeavor."