41 Responses to Is global warming a black swan?
Is the Japanese nuclear disaster?
Year after year the worriers and fretters would come to me with awful predictions of the outbreak of war. I denied it each time. I was only wrong twice.
-Senior British intelligence official, retiring in 1950 after 47 years of service
One of the defining characteristics of humans is our ability to ignore or downplay facts that would shatter or overturn our world view. At the same time, we tend to favor or selectively recall information that confirms our preconceptions, which is called “confirmation bias.”
I bring that up because, these days, pretty much everything that seems anomalous is called a “Black Swan,” a term popularized by Nassim Nicholas Taleb in writings such as, “The Black Swan: The Impact of the Highly Improbable.”
And so we have both the Washington Post and Foreign Policy writing major pieces on Japan’s “black swan.” But how exactly can a nuclear accident in Japan be a black swan. The Japan Times ran an article whose lead sentence was “Of all the places in all the world where no one in their right mind would build scores of nuclear power plants, Japan would be pretty near the top of the list” back in May 2004 — seven years ago!
The article warns “that Japan has no real nuclear-disaster plan in the event that an earthquake damaged a reactor’s water-cooling system and triggered a reactor meltdown.” It even notes, “there is an extreme danger of an earthquake causing a loss of water coolant in the pools where spent fuel rods are kept.” It was written by “a geoscientist who worked at the Lawrence Livermore Nuclear Weapons Laboratory on the Yucca Mountain Project,” and has this quote:
“I think the situation right now is very scary,” says Katsuhiko Ishibashi, a seismologist and professor at Kobe University. “It’s like a kamikaze terrorist wrapped in bombs just waiting to explode.”
So again, how precisely is the current accident a black swan?
In the first chapter of his book, Taleb writes:
Before the discovery of Australia, people in the old world were convinced that all swans were white, an unassailable belief as it seemed completely confirmed by empirical evidence. The sighting of the first black swan might have been an interesting surprise for a few ornithologists (and others extremely concerned with the coloring of birds), but that is not where the significance of the story lies. It illustrates a severe limitation to our learning from observations or experience and the fragility of our knowledge. One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans….
What we call here a Black Swan (and capitalize it) is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
I stop and summarize the triplet: rarity, extreme impact, and retrospective (though not prospective) predictability.
Ah, you see the sleight of hand. The summary doesn’t match the original definition.
“Rarity” isn’t the same as lying “outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.” Indeed, come to think of it, the fact that “nothing in the past can convincingly point to its possibility” isn’t quite the same as being “outside the realm of regular expectations.”
People often warn of things that lie “outside the realm of regular expectations.” Global warming comes to mind.
If you Google “global warming” and “black swan” you’ll get nearly 2 million results — which is in its own way evidence that global warming isn’t a black swan. Yes, the post at the top of that search is one of the earliest pieces I wrote on CP, “The Black Swan and Global Warming,” back in 2006, when I was young and naive, posting but once a day.
I quoted a Taleb essay that began, “A black swan is an outlier, an event that lies beyond the realm of normal expectations.”
Taleb argues at length that 9/11 was a black swan, stating:
ad a terrorist attack been a conceivable risk on Sept. 10, 2001, it would likely not have happened.
But that is a dubious claim at best. Indeed, even Joel Achenbach in his WashPost piece, “Japan’s ‘black swan': Scientists ponder the unparalleled dangers of unlikely disasters” notes:
People debate what qualifies as a black swan. Most alleged black swans turn out to have obvious precursors and warning signs “” the Sept. 11 attacks included. Nothing comes out of the blue, truly.
Was Pearl Harbor a black swan? Were the oil shocks of the 1970s. In my 1994 book Lean and Clean Management, I write about the strategic planners at Royal Dutch Shell, who anticipated those shocks (see here). As for Pearl Harbor, consider this, from my book:
The Japanese commander of the attack, Mitsuo Fuchida, was quite surprised he had achieved surprise. Before the Russo-Japanese war of 1904, the Japanese Navy had used a surprise attack to destroy the Russian Pacific Fleet at anchor in Port Arthur. Fuchida asked, “Had these Americans never heard of Port Arthur?“
So Pearl Harbor wasn’t a black swan.
The fact is that the events that we are shocked about over and over again weren’t merely “explainable and predictable” after the fact. They were vary often predicted or warned about well in advance by serious people. The powers that be simply chose to ignore the warnings because it didn’t fit their world view.
The Trojan horse was a black swan, if one ignores Cassandra, which, of course, was her fate.
I first had the idea for this piece after posting on Transocean, the company that operated the infamous Deepwater Horizon oil rig, who told its shareholders that it gave its executives multi-million-dollar bonuses based on the company’s “best year in safety performance.” As Interior Secretary Ken Salazar noted, this “complacency” matched the “complacency that created an oil spill that was pouring over 50 thousand barrels of oil into the Gulf of Mexico a day.”
A commenter on that post then directed me to this Crooked Timber post, “With Notably Rare Exceptions,” which starts by quoting Alan Greenspan:
Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.
As Henry at CT then writes:
It’s best not to interpret this as an empirical claim, but a carefully-thought-out bid for Internet immortality. It has the sublime combination of supreme self-confidence and utter cluelessness of previously successful memes … but with added Greenspanny goodness. I tried to think of useful variations on the way in to work this morning – “With notably rare exceptions, Russian Roulette is a fun, safe game for all the family to play,” … but none do proper justice to the magnificence of the original. But then, that’s why we have commenters. Have at it.
With notably rare exceptions, nuclear power is safe. With notably rare exceptions, unrestricted emissions of greenhouse gases are safe.
My point in this quote is that, of course, lots of people warned about the bubble that Greenspan himself helped create. But even now, it appears to have been a black swan for Greenspan.
Global warming obviously is not a black swan. It is an event “outside the realm of regular expectations” but one can’t say “nothing in the past can convincingly point to its possibility”:
- Science: CO2 levels haven’t been this high for 15 million years, when it was 5° to 10°F warmer and seas were 75 to 120 feet higher “” “We have shown that this dramatic rise in sea level is associated with an increase in CO2 levels of about 100 ppm.”
- Nature Geoscience study: Oceans are acidifying 10 times faster today than 55 million years ago when a mass extinction of marine species occurred
In my 2006 post, I argued that rapid polar warming and the potential for a melting of the tundra and massive release of methane was a black swan. I suppose, for 99% of policymakers and the media it is a black swan, but in fact even the worst-case scenario for global warming isn’t technically a black swan:
- Science stunner: On our current emissions path, CO2 levels in 2100 will hit levels last seen when the Earth was 29°F (16°C) hotter
We have been warned as much as one could reasonably expect us to be warned, but we choose to ignore the warnings. In fairness, though, there is a massive fossil-fuel-funded disinformation campaign out there trying to convince us that all swans are in fact white. Would it were so.