06/14/2010 05:12 am ET Updated May 25, 2011

Oven Dial or Light Switch: Carbon Lock-in and Abrupt Climate Change

Well over a decade ago, I became interested in what I termed the "climate policy paradox." On one hand, there is plenty of evidence that climate change is a real and present danger. On the other, there is also evidence of existing solutions that can minimize climate change in a cost effective manner. The U.S. Military, for example, just announced saving Uncle Sam $1.6 billion by cutting climate changing energy and water use. Herein lies the paradox. If such tech fixes exist, are cost effective and help minimize climate change, why aren't they diffusing more rapidly? Furthermore, why aren't government policies to promote them more effective? The answer is "carbon lock-in," which argues that past policy and investment decisions have locked-in our existing energy systems, making them resistant to change. While lock-in isn't permanent, the failure of confabs like the Copenhagen Climate Conference illustrate that policy change will not come quickly. Or will it?

Current politicians are acting as if climate change is a smooth and reversible process. The policy focus is on setting an appropriate temperature increase - currently 2 degrees centigrade - to ward off unwanted changes. It's as if the climate system has an oven thermostat that we can dial up or down as needed. However, scientific discoveries undermine the thermostat model. Ice cores show that the climate is less like an infinitely adjustable dial and more like a light switch that toggles between on and off, hot and cold. Data show eight rapid climate swings in the last 730,000 years, with temperatures shifting from balmy to frigid within a decade. We have only begun to explore the policy implications of this geologic reality.

This sets up a race, pitting the speed at which we can move away from climate changing energy systems against the speed at which climate change occurs. Policy makers using thermostat thinking act as if the oven will heat up gradually and that we can turn the oven dial back whenever we get serious about it. But the possibility of a light switch shift requires new thinking.

For business, abrupt climate change means abrupt policy change is a possibility. In response to rapid change, policy makers will impose immediate policy interventions and abruptly change the rules of the game. From an economic point of view, this is the worst possible outcome. The cost of change increases exponentially as you shorten the timeframe. Economic dislocation is a better term.

The intelligent response to this possibility would be to institute gradual policy changes now that lower the risk of abrupt climate changes and lower the long term economic costs to society. But it's a hard sell. Public understanding of even the old oven-dial model of climate change is limited and public awareness of abrupt light-switch change has barely begun. I just hope the public won't have to see it to believe it.