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Greetings from Stanford University.
I'm Bill Barnett, professor at
the Stanford Doerr School
of Sustainability and Stanford
Graduate School of Business.
>> I'm Ingrid Ackerman,
an undergraduate in the School
of Engineering.
>> And we have with us here today
Professor Marshall Burke from
the Stanford Doerr School of
Sustainability.
Welcome Marshall.
>> Hey guys, thanks a lot
for having me.
Good to be here.
>> Absolutely, and this last
weekend, we were fortunate to
have Marshall and his colleague,
our colleague, Solomon Xiong,
who co-chaired a conference hosted
by our global environmental policy
department at the Stanford Doerr
School of Sustainability.
And we're really excited to have
you here, Marshall,
to talk about the conference.
>> Sure, and I want to start by
thanking you all, really for
driving these conferences and
being the organizing principle
around which we could have these
amazing conferences.
This one, to me,
was a huge success.
So the overarching principle is
really thinking broadly about what
we can do about climate change.
And one way to think about it is
there are two extremes.
One is mitigation,
we can fully get our act together,
we can have seamless,
cheap cost-effective mitigation,
climate change goes away,
problem solved, boom.
That's one end of the extreme.
The other end of the screen extreme
is we don't do anything.
Suffering, right?
The world warms 4 or 5 degrees,
people throughout the world
including here in California suffer
dramatically, right?
Two ends of the extreme.
We're not going to be on either one
of those ends, we're going to
be somewhere in between.
But how close we are to suffering
depends on how well we can mitigate
it and we are going to make some
progress on mitigation.
This is actually pretty
well-studied.
It's not going to warm 4 degrees.
It's likely going to warm maybe 2
degrees or 2.5 degrees but that's
still a lot, that's a lot more
warming than we've seen so far.
So how do we avoid suffering?
Well, sitting between mitigation
and suffering is adaptation,
is figuring out how we adapt to the
warming that we're going to see.
And so this conference was
really organized around adaptation.
We called it Preparing for
a Changing Climate,
meaning the climate is changing and
we need to prepare for it.
We're not going to be able to fully
mitigate our way out of this mess
so how are we going to adapt.
And we brought together researchers
who are really at the forefront of
studying that using historical data
to understand how have we adapted
in the past and
what can that tell us about how
we might adapt in the future.
>> I'm curious how you study
adaption.
Do you mind discussing how
the scientists at the conference
presented their work?
Was it mostly looking backwards and
how we've adapted in the past or
projecting expected changes into
the future and
modeling how we will have to adapt?
>> Yeah, great question.
It's really doing both.
Often as social scientists, we
want to try to learn from history.
We're going to use data from
California or from the US or
from different parts of the world
to understand how human behavior,
human choices have changed in
the past in response to
climatic change.
And I want to highlight that we've
already seen a lot of climatic
change.
So we might be expecting 2 to 3
degrees Celsius, total warming from
climate change, as I mentioned.
We've already seen almost a degree
and a half, right?
So we have seen a lot of warming.
And the question is if we're going
to adapt,
then we should have already seen
evidence of that adaptation.
We've had a lot of opportunity to
do so, right?
And so our goal is then first
to look backwards to study, okay,
have we availed ourselves of
this opportunity, have we actually
been able to adapt individually,
societally, in the business world,
right?
In the public sector and- >> What
do you find on that?
>> So our conference
was organized exactly around this.
And what we've seen so
far in the academic literature and
in the research community, I would
say, is a dearth, a total lack of
good empirical work on adaptation.
Really most of the attention
has been on mitigation and
much less has been on adaptation.
This was then our effort to try to,
mainly among the economics
community, but we also got
political scientists and
some data scientists, who's doing
good empirical work on adaptation.
Who can say something about how
we have been adapting?
And again,
there aren't that many papers, and
I think this conference represented
a lot of the new literature and
a lot of the new excitement and
young research energy
that's going into this.
So what did we learn?
I have at least a few sort of
themes.
So the way we organized
the conference was
loosely around different themes.
So one is around migration, another
is around coastal adaptation,
one session directly studied firms.
So how are firms in various
settings adapting?
Some studied insurance markets,
things like that.
So let me start maybe on the firm
side.
And here I would say there's both
some good news and
then maybe some less good news.
And really, we shouldn't think of
firms just acting in a vacuum.
We should think of them as acting
in the policy environment, right?
And so how do firms and
policy choices interact?
So there was one nice paper that
showed, so it turns out on really
hot days or during heat waves, you
get a lot of workplace injuries.
People fall off ladders,
they drive cars into things, they
poke themselves with sharp objects,
a lot of workplace injuries.
And these are actually really
well-documented and you can see
substantial increases in workplace
injuries on really hot days.
Okay, California recognized this
and passed a law that said, okay,
we need to take this seriously, and
workers in exposed industries need
to be given time
to take breaks when it's hot.
We need to give them access to
water, basically,
a chance to cool off, right?
This law was passed in the
mid-2000s, and what the researchers
were able to study is how this
affected infirm behavior, right?
And what they found is it actually
had a huge impact,
a huge benefit on really hot days.
So the effect of a really hot day
on workplace injuries went down
substantially after this
law, right?
So firms responded to
the regulation in
a way that really improved worker
safety in California.
Okay, so that's a good news bet.
Maybe less good news depending on
your perspective is the other thing
that firms did is they actually
started substituting capital for
labor.
They learned that labor, humans
are sensitive to extreme heat in
the way that machines are not.
And so what you were able
to observe after this regulation is
many of these firms started to
mechanize.
They hired fewer workers and
they put in more machines.
Machines are less sensitive
to heat.
So is that good or bad?
That is a kind of firm adaptation.
It is mechanization, right?
And that has effects in
the labor market
that we might be worried about.
>> That is so interesting, so
I can imagine generalizing that.
We think about the way that our
companies organize as being in some
ideal state,
especially folks in economics often
think of that as a, but that ideal
state looks like it might
be different in a warming world.
>> 100%, that's exactly right.
Firms are going to
have to adapt as well and
sometimes have to adapt quickly.
One other good example was a very
nice study of the insurance
industry in California and
how they're dealing with wildfires.
So this is private insurers.
And really what the study found is
that insurers are really struggling
to figure out how to price
wildfire risk.
So if you live in California or
in the West, you know that wildfire
risk is driven largely by a warming
climate and
is changing just dramatically.
We've seen just in the last five
years remarkable uptick in
wildfire activity.
Okay, we think of insurance as
a frontline adaptation measure or
policy, right?
We need to be able to insure
ourselves against these disasters.
The risk of wildfires changing so
quickly, that is very hard to price
this risk.
And so you find firms with wildly
different models or
expectations about what the prices
should look like.
And then a lot of firms that
are really offering policies at
the wrong price, either too high
a price and then no one could
get insurance or to lower price and
they're left holding the bag.
So the insurance industry around
wildfire in California is really,
I would say,
right now struggling to adapt to
this rapidly changing climate.
>> That's really incredible because
when you think about it, count as
studying California the good news
there ought to be that we have
reasonably well-developed markets
for financial instruments such as
insurance.
What does that mean for the world?
Of course, we see wildfire risk
increasing worldwide because of
climate change.
>> Yeah, it's a great question.
So to us, and again,
going back to the conference,
a couple of papers nicely
highlighted the important role that
the public sector can play in
helping the private sector adapt.
So one area is in the role
of information provision.
So thinking about wildfires.
The government has done this for
a long time for floods, right?
We provide flood maps,
we tell insurance markets where
floods are likely to happen and
are not likely to happen.
And these have been central
in ensuring floods for
decades now in the US.
We do not do that for fires,
and the government could.
We could come up with
a public model of fire risk and
that could help price insurance.
We had two other papers in
the conference that looked at
the role of government forecasting,
weather forecasting, and
how beneficial that has been.
So one really nice paper showed
that improvements in forecasting
dramatically reduce the number of
car accidents during the winter,
right?
So if you know a winter storm is
coming, you can plan,
you can reroute,
you can go a different day.
And after these forecasts got
really good, car accidents went
down dramatically.
So again, highlighting the role of
the public provision of information
in improving individual
decision-making firm
decision-making.
>> What if we pivot to coastal
engineering?
I'm curious what the discussion was
like in that regard,
especially given how much sea level
rise will influence the large
population centers on coasts.
>> Yeah, great question.
So we had two excellent papers,
thinking about flood risk,
one in the coastal setting and
one sort of in an inland setting.
Both of these have to do with
governments making decisions about
how much to invest in protection.
So in the coastal setting,
it's building sea walls,
along rivers, it's building levies.
And these papers actually came to
pretty different conclusions.
So the coastal paper suggested that
these investments actually look
pretty good.
You put up a sea wall,
you actually raise property prices.
You can see property prices go up
behind the seawall because people
are rightly inferring that
they're now protected.
These don't help when you get
the really,
really bad hurricane Sandys, right,
the terrible hurricanes.
But what they help a lot with is
the smaller stuff that you get,
the daytime flooding,
the smaller floods.
And so in a cost-benefit setting,
the benefits seem to substantially
exceed the costs in these
investments.
The folks who are studying levies
actually found the opposite.
They found that, yeah,
if you're behind the levy,
that's really good.
But what happens with the levy is
you just push the water
elsewhere, right?
So you don't get flooding
behind the levy,
but you get flooding upstream,
you get flooding downstream, and
those negative spillovers actually
outweighed the positive benefits
once you accounted for the cost.
So the cost-benefit calculation,
at least in that setting
looked pretty different.
So I would say a mixed picture on
the effectiveness or
the cost-effectiveness of these
government interventions >> So
far it seems like the main lens
taken at the conferences is purely
economic.
I'm wondering if there's any
interdisciplinary analysis of some
of these different levers that we
can use to adapt to climate change.
For example, sea walls, there's an
example close by in the bay where I
know a seawall has been proposed in
a really wealthy community, but
there's a lower-income community
right next door where the water
will be diverted to.
And of course,
it's an economic problem, but
it's a bit broader than that.
Was there any discussion along
these lines?
Yeah, it's a great question.
So speaking as an economist, often,
we only invite economist to our
conference, but
we tried to be careful here, we
invited some political scientists.
And I would say their,
and actually, we invited some
political scientists.
We had an amazing lunch talk from
a legal scholar who talked about
climate litigation.
And how the sort of empirical work
that was being presented at our
conference could be useful for
climate litigation, which actually
comes back to a lot of these
environmental justice questions
that you're talking about.
Some of these are now being
litigated in courts.
And often, they really just don't
have the empirical evidence
to support litigation.
And we had Jessica Wentz from
Columbia who really sort of laid
out the sort of evidence they need
to pass mustering courts and make
these sort of lawsuits successful.
We also have political scientists.
I would say one of the most
interesting talks was a lot of
what political scientists do as you
know, or some of them survey
public opinion on different things.
So we have a lot of survey evidence
from the US on how people
think about climate change.
We have very little evidence from
other parts of the world.
And so they presented for
the first time this data set they
put together looking at climate
attitudes towards both mitigation
and adaptation in many of the poor
low-lying parts of the world,
which was totally fascinating.
>> I'm interested to read that one.
And back on this issue of
the lawsuits, if I understand
right, the importance of these
lawsuits is not only to settle
a particular case in a way that
would be more fair for the victims,
but then also to change the risk
calculations for future decisions.
And was there much discussion of
that?
>> There was in Jessica's talk.
Many of these cases are still quite
new and are working their way
through the courts right now.
She highlighted again how,
not flimsy, but how I would say not
fully worked out the evidence bases
on making these links.
So Moraine County sues Exxon Mobil
for damages from climate change,
from sea level rise that they're
going to have to adapt to, right?
So how do we directly link
Exxon Mobil and the emissions from
Exxon Mobil and all the oil they
dug up and then sold to us, right,
that we put in our cars.
So how do we link that to
damages suffered by Moraine County?
So this is a question broadly
linked to the broader discussion of
loss and damage so
what is the responsibility of large
emitters or emitting countries to
places where damage has occurred?
We had actually hoped to get many
more papers on that in this
conference, and we didn't.
It's such a new and emerging area
of research that actually we sort
of lack the empirical evidence.
So we would love to rerun this
conference in the year and
get a lot of papers on exactly
that topic.
They just don't yet exist.
>> Well, absolutely,
we'll be looking forward to you
re-running it in a year, Marshall.
I wanted to follow up on that new
and unusual research you mentioned
regarding public opinion about
climate change around the world.
Is the rest of the world
as polarized as the United States
appears to be?
>> The rest of the world, at least
from the evidence that we saw, and
this was presented by Meadow
Miltenberger at UCSB, the rest of
the world seems less polarized.
So their data collection was
focused largely on
lower-middle-income islands and
low-lying areas that were likely to
be immediately under threat from
climate change.
And the focus
there is less on mitigation.
These folks did not cause
the problem, so they're not
polarized about mitigation at all.
They rightly blame most of the
wealthy world for the emissions.
It was really about adaptation, and
what funding to adaptation should
look like.
And should it be managed by local
communities or local governments,
or should it be managed by external
actors?
One of the most fascinating things
to me from these findings was
dramatic support for
adaptation money.
Number one, to be large, which is
important, but number two, to not
be managed by local entities.
A lot of these people were
distrustful of their own
communities or own governments in
terms of being able to make good
investments and adaptation.
They wanted these to be managed by
international institutions,
the external community.
So they wanted the money to come in
but they wanted it to be managed
from what they thought to be
responsible actors external to
their own country, which to me was
actually pretty surprising.
>> That's interesting.
This past summer, I did research in
Palau and conducted a lot of social
interviews regarding climate change
adaptation and if people would
trust the government to handle
funds coming in to address climate
change and definitely notice some
of those same themes.
>> Okay, yeah, then fully
consistent with what Meadow showed.
It wasn't universal, some wanted
local control but others, I think,
yeah, wanted what they perceive
to be the rigor of external control
>> Yeah, I found somewhat of
distrust in the government for
handling the funds but definitely,
the local communities would want to
be involved in the adaptation plans
because at the end of the day,
it is their land, their water,
their environment that will
be impacted by these challenges.
>> That sounds exactly right.
I think that's highly consistent
with what Meadow presented in
the conference.
>> Well, Marshall,
we're going to bring it to a close,
but before we do, any other
reflections on the conference?
It was really exciting for
Saloner and
I to see the amount of excitement
in this area on the research front.
This is still sort of a research
frontier.
Again, as compared to studying
climate mitigation, we know a lot
less about adaptation.
The point of this conference was to
try to bring together folks
who are looking at it.
And again,
if we can run it in the future,
we can then sort of endogenously
promote research in this area.
Having Stanford as a leader in this
area I think would be really great.
A lot of young research talent
really excited on these questions,
and so to me, the conference was
really energizing.
>> We absolutely will run this
one again next year.
Marshall, thanks so much for
your good work.
Thank you, Ingrid, and to all of
you listening, until next time.
>> The Stanford Initiative on
Business and Environmental
Sustainability podcast series is
sponsored by the Stanford Graduate
School of Business and the Stanford
Doerr School of Sustainability.
Music by Charged Particles,
that's Caleb Hutzler, Mike Rock,
and John Krosnick.
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