On Budget Deficits and CO2 Binges and Wise Investments Here's a post, once again, on the human habit of kicking the can down the road -- sometimes very different cans, depending on the person and the problem at hand. On Facebook (you can follow my output here), I posted the following excerpt from Tom Friedman's latest column, "The Market and Mother Nature": I am struck by how many liberals insist on reducing carbon emissions immediately, but, on the deficit, say there is no urgency because no interest rates rises are in sight. And I am struck by how many conservatives insist we must reduce the deficit immediately, but, on climate, say there is no urgency because, so far, temperature rise has been slight. David South, a Facebook friend with a strong libertarian bent, posted two comments that, taken together, are worth considering: I am struck by how many liberals insist on reducing carbon emissions immediately but continue to travel and talk and travel and talk. So easy to talk the talk and even easier to see they don't walk the walk. ...And I am struck by how many conservatives insist we must reduce the deficit immediately, but many Republicans continue to vote in favor of pork for their states and districts. As individuals and communities, wherever we sit on the curve from libertarian to liberal -- or individualist to communitarian, as social scientists put it -- people seem to have a hard time developing the discipline required to address risks in which the worst outcomes lie far down the road, and to avoid behavior that suits present needs even if it raises risks of hitting a wall. This is why I keep reposting a reader's 2008 comment about our "blah, blah, blah.. bang" approach to such problems. But there are signs we might be able to develop what Stewart Brand calls "Whole Earth Discipline." I recommend that you read a somewhat relevant post by the economist Robert Keyfitz on the Seeking Alpha blog: "Sense And Nonsense About Climate Change. What Do Investors Need To Know? The piece is mainly advice for investors on how to integrate knowledge of global warming science and policy trends into investment choices. The post includes some oversimplified descriptions of what scientists agree on about global warming, but has fascinating sections on behavioral science relevant to both financial investing and environmental risk response. Here's one conclusion: Climate change skepticism is rooted more in psychology than ecology, and as a result, skeptics and believers tend to talk past each other. Of course, liberal-egalitarian-communitarian males are no less prone to cognitive biases and group-think than conservative-hierarchical-individualistic ones. However, they have science on their side. Skeptics would do well to recognize that while they busy themselves with fearless attacks on the scientific consensus, the rest of the world is moving on. As Finucane et al. 2000 puts it bluntly, "Attempts to re-align risk perceptions according to the white male view of the world are likely to be unsuccessful." Fortunately, conservative-hierarchical-individualistic investors are not condemned to remain skeptical forever, but can flip the switch from what Daniel Kahneman calls "fast" to "slow" thinking (Kahneman 2011). Lighting up new areas of the brain takes an effort, but should pay off over time in better investment returns. I sent Keyfitz's post to some behavioral researchers. Here's the first reply, from Riley E. Dunlap, a professor of sociology at Oklahoma State University (cited here previously): While I may not be unbiased, since the author draws upon work Aaron McCright and I have done, I think this is a very insightful use and extension of social science research that is packaged in a manner that is likely to be effective in reaching a crucial audience -- presumably a heavily conservative, white male one. It follows the advice of many climate change communication experts by framing climate change in a manner that appeals to the interests and values of the intended audience, while cleverly challenging them to confront their possible ideological blinders. I applaud Keyfitz, and will be curious to see the reaction to his piece. I'll take this opportunity to share a link to a new article on the "conservative white male effect" (CWME) that McCright and I have in press. It extends our earlier article cited by Keyfitz that focuses on climate change by examining a broader range of environmental problems. A reviewer who was a stickler for terminology kept us from using "environmental risk," arguing that our dependent variable was not a classic "risk perception" question, but nonetheless we are able to demonstrate a CWME on "worry" about a wide range of environmental problems. Aaron M. McCright & Riley E. Dunlap (2012): Bringing ideology in: the conservative white male effect on worry about environmental problems in the USA, Journal of Risk Research, DOI:10.1080/13669877.2012.726242