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.