In an interview last year, Dr. Elinor Ostrom the recent recipient of the Nobel Prize in Economics, and the first woman to receive prize in economics, offers some tremendous insight. She stresses adaptation over a one-size-fits-all approach and says she doesn’t “think it’s possible just to have a nice little neat optimal plan.” With the climate change conference in Copenhagen coming in December, Elinor Ostrom’s point about international agreements is especially relevant:
Recognizing that this is something that must be done at multiple levels, so what I am concerned about is a lot of people think that the only way to cope with global change is international agreements. And if we sit around and wait for the national leaders of our respective countries to come to an agreement and operationalize it and make it effective, then people along the coast are going to lose their coasts. So, we must be thinking of diverse ways that we can increase the capacity to respond to external change. We can just call it capacity to respond to change.
We don’t need to use the fancy name “resilience.” How do we cope with change? And, the tragedy of Katrina was that three years before that hurricane, there had been a very well specified article showing that among the kinds of storms we could be facing in the next five years, was a storm like Katrina that would have devastating impacts on the coastal area. That was not predicted that it would occur, but it was predicted that it could well occur and nobody took it seriously. And so Katrina showed that federal, state and local authorities in New Orleans were not resilient and did not have an effective plan, and it was a disaster. And I think maybe that experience is making a lot more people think, well, we’d better be a little bit more self-conscious that these things could happen.”
You can listen to the full podcast or read the full transcripts here. What we’re doing by proposing cap and trade or international carbon reduction treaties is exactly what Dr. Ostrom warns against. It’s extremely costly and very ineffective and will do nothing to prepare those communities against natural disasters. It’s the top down, micromanaging approach Ostrom opposes. The Hoover Institution’s David Henderson sums up Ostrom’s and co-recipient Oliver Williamson’s work nicely: “Some have summarized their work by saying that institutions other than free markets often work well. But that statement can mislead you to conclude that government solutions are the answer. Free markets are only a subset of free institutions. A better way to sum up their work is that what Ms. Ostrom and Mr. Willamson really show is that voluntary associations work.”