Green Moral Hazards

By Gernot Wagner & Daniel Zizzamia

mor·al haz·ard [ˈmôrəl ˈhazərd, noun]

Lack of incentive to guard against risk where one is protected from its consequences.

The formal definition of “moral hazards” applies squarely to insurance. Health insurance is a classic example, and one where moral hazards are pervasive. Equating moral hazards with “moral failings,” they are often used by some on the political right as arguments against government-provided health care.

Environmentalists have their own form of moral hazards, typically applied to new technologies fixing problems without the need for deeper structural and behavioral reforms: band-aid solutions in the form of “technofixes.”

The principle is the same: Cushioning risky behavior – too much carbon pollution, say – leads to more such behavior. In that light, both solar geoengineering (or solar radiation management, SRM) and perhaps especially carbon dioxide removal (CDR) might be the ultimate technofix.

While moral hazard may, in fact, be a misnomer for what’s perhaps better described as “mitigation deterrence,” the catchiness of the phrase has made this framing impossible to ignore. Moral hazard’s malleability and tendency to encapsulate incredible complexities makes it unhelpful as a guide for policy. Still, there is good reason to dig deeper and query its origins within the environmental movement.

The technofix critique has a deeply-seated prehistory throughout the environmental movement that set the stage for the present broadly skeptical response to geoengineering. We wrote a lengthy historical analysis attempting to shine some light onto green moral hazards and their key role in the past 130 years of U.S. environmental history. We hope that doing so provides some much-needed context for current climate policy discussions, in particularly around geoengineering.

Environmentalism's Deep Moral Hazard Roots

Moral-hazard-style arguments are ubiquitous in environmental thinking. Exact definitions differ, but they are often applied as a rejection of anything that falls short of a “green revolution,” and not in the sense of increasing crop production by means of fertilizers or even genetically modified organisms (GMOs), themselves technofixes. These examples also show the complexities involved. GMOs, to go to the extreme, are surely technological solutions to fundamental problems of food production – including the use of too much fertilizer and pesticides. Despite some legitimate concerns, GMOs also surely increase crop yield, feeding more people. Without debating the merits and demerits of GMOs – and without discussing whether not using GMOs (or, for that matter, geoengineering) may in themselves present a form of moral hazard – moral hazard arguments surrounding GMOs often includes wrestling with the moral core of environmentalism – pure nature – to make a political statement about the world.

The American tendency toward technofixes to social problems and its embrace of technocracy can be traced at least as far back as the Progressive Era. At the highest levels of government, Progressive reformers favored utilitarianism and technocracy. They embraced the utopian promises of technocrats and scientific managers proposed centuries before by Sir Francis Bacon.

One of the first places where experts applied their knowledge to a pervasive environmental problem was in the cities. Progressive Era cities were a terrible mess where it was difficult to disentangle human and environmental problems. The white male sanitary engineer arose out of the squalor of the cities to save urbanites from their waste.

Others saw through this technofaith of their day. Women, laborers, and minorities, who were relegated to the fringes of society where many of the benefits of industrial society were absent and the consequences more acute, worked to establish grassroots organizations to cope with environmental injustices.

Urban pollution, the techno-devastation of WWI, and the rise of the Technocracy Movement in the 1920s laid the ground work for the clash between technologists and environmentalists that was to come, but it was the atomic bomb that acted as the flash point for mainstream America’s techno-anxiety. Some techno-optimists considered the atomic bomb a tool to master nature. To many, the bomb inspired fear, in particular fear of scientists and engineers developing a technology that could destroy life on Earth as we know it. It is within this context that modern environmentalism was born – and with it the deeply seated fear of technofixes.

(Solar) Geoengineering and Moral Hazard

Fast forward to today, and to (solar) geoengineering. There is no doubt that geoengineering discussions enter highly contested moral territory. In short, “there are problems in human and social life with no good solutions,” as Zygmunt Bauman laments.

For one, SRM is no “solution.” While CDR directly addresses the root cause of the problem – excess atmospheric carbon dioxide – SRM only does so indirectly. Meanwhile, either form of geoengineering conjures legitimate images of technofixes.

The core question then to many is whether any kind of technofix that sustains fossil-fueled capitalism and the status quo can be considered “green.” This is the central concern underlying most common critiques of so-called technofixes. The weight of the past two hundred years of U.S. environmental history complicates these critiques and grants them authority in environmental discourse.

The politics of power are wrapped up in defining, delimiting, and legislating the environment and the technologies that modify it. Therefore, there’s no easy fix here. The real task then is in broadening and demystifying the conversation. That implies rapid, deliberate education of both various publics and those involved in the policy process – and yes, it includes education about moral hazard itself. Anything else will surely shortchange both climate policy discourse and decision-making

Gernot Wagner is faculty at New York University and the co-author of “Climate Shock.” Prior to NYU, he was the founding executive director of Harvard’s Solar Geoengineering Research Program, where Daniel Zizzamia was a postdoctoral fellow. Together they wrote “Green Moral Hazards,” on which this blog is based.

This post was first published on C2G's blog.