Oluwakemi Izomo
Final Assignment
(Foresight: Summary)
Decision Making: Introduction
Decision Making Concepts
Decision Making and Climate Change
Decision Making and Adaptation
Hans-Peter Plag
November 24, 2014
Given the speed and magnitude of the complex climate system; deterministic projections
have little practice-relevant value
Abrupt changes are happening (e.g., Arctic sea ice, biodiversity); more likely to come
Abrupt LSL rise could (slowly) develop into a global disaster/X-event
Paradigm shift to overcome normalcy bias:
Instead of “Sea level is stable” (last 6,000 years) assume “Sea level is variable!”
Cumulative LSL equation (CLE) can be used to describe LSL changes
The CLE provides a basis to assess the risk not addressed by
making a choice for a range of LSL trajectories
We need early warning systems; including early warning for LSL
Research on decision-making:
- Psychological: individual decisions within personnel values, preferences and needs
- Cognitive: continuous process in interaction with the environment
- Normative: within logic of decision-making and rationality
Decision-making:
- problem-solving activity, terminated by a satisfactory solution
- reasoning or emotional process which can be rational or irrational.
Daniel Kahneman: Thinking, Fast and Slow (2011): Two systems:
- System 1: Fast, automatic, frequent, emotional, stereotype, subconscious
- System 2: Slow, effortful, infrequent, logical, calculating, conscious
Developed:
- cognitive biases:
- anchoring effect: decisions influenced by irrelevant number
- availability heuristics: events seem more probable if we know examples
- substitution of complex questions by simpler ones
- optimist bias and illusion of control
- planning fallacy: overestimate benefits and underestimate costs
- overconfidence: what you see is all that is there.
Daniel Kahneman: Thinking, Fast and Slow (2011): Two systems:
- System 1: Fast, automatic, frequent, emotional, stereotype, subconscious
- System 2: Slow, effortful, infrequent, logical, calculating, conscious
- Prospect Theory: behavioral economic theory, describes how we choose
between probabilistic alternatives involving risk;
- decision made on loss and gain considerations rather than final outcome;
- describes real-life decisions rather than optimal decisions;
Daniel Kahneman: Thinking, Fast and Slow (2011): Two systems:
- System 1: Fast, automatic, frequent, emotional, stereotype, subconscious
- System 2: Slow, effortful, infrequent, logical, calculating, conscious
- Prospect Theory: behavioral economic theory, describes how we choose
between probabilistic alternatives involving risk;
- decision made on loss and gain considerations rather than final outcome;
- describes real-life decisions rather than optimal decisions;
- reveals loss aversion (we fear losses more than we value gains)
- underlines importance of framing: 90% survival chance versus 10%
mortality
Time and effort as function of scope and
scale of adjustments and adaptation
Ekstrom et al., 2011
Ekstrom et al., 2011
Three main elements:
- system of concern
- actors
- governance and environment
Phases of traditional approach
Ekstrom et al., 2011
Lovelock (and many others):
- Planet is on a run-away path; could reach a warm state
o
(5 C warmer) already in 2050
- Carrying capacity of the planet would be reduced to 1 Billion
- Recommendation: look for the lifeboats
- Science is focused on Type I errors (false positives)
- Society is impacted by this focus
- Type II errors (false negatives) are critical in times of
unsustainability and rapid changes
Plan A: Planning for a (somewhat) predictable future
Social construct of risk and vulnerability:
North Sea countries:
• general perception (based on 2,000 years of cultural heritage): vulnerability to, and risk associated
with storm surges is very high and a national/regional problem;
• approach to extreme events:
there is a 1% chance that the 1 in 10,000 years flood happens in this century.
• Approach to SLR: What is the maximum SLR in the 21st century that cannot be excluded?
United States:
• general perception: vulnerability to, and risk associated with storm surges is more a local problem
and can be addressed ad hoc by (horizontal) evacuation;
• approach to extreme events: there is a 1% chance that the 1 in 100 years flood happens in this year.
• Approach to SLR: What curve should we choose? Definitely not the maximum SLR in the 21st century
that cannot be excluded!
Preparing for surprises
Knowing the “worst case” and facilitate adaptation to
unpredictable future
Paradigm shifts:
• understanding the vulnerabilities and comprehensively assessing the risks
• knowing the worst cases (food, water, heat waves, droughts, storms,
sicknesses, social unrest, wars, ...)
• having early warning (for extreme events and rapid impacts)
• Hampton Roads:
- making room for the water
- a built environment for extreme floods (buildings and services)
Living where it is safe,
working where it is needed
Preparing for surprises
Social construct of risk and vulnerability:
Question: Do we know the risks we have not addressed?
• Fire insurance: we pay for a risk that has a 99.8% chance not to happen.
• Hurricanes and storm surges:
- The Netherlands: pays (a lot: 2.5% of GDP) to reduce a risk that has a 99%
chance not to happen in this century.
- The USA: we here do not pay (a lot) to reduce a risk that has a 66% chance
to happen in this century.
- Norfolk and Virginia Beach: Cost-benefit analysis shows we should be
willing to pay on the order of $100,000,000 each year to reduce this risk
(with many immediate benefits)