Climate Change Futures Market

MGM Grand

Robin Hanson, who has the somewhat idiosyncratic view that pretty much all issues can best be resolved by gambling, thinks the real moral of the East Anglia email fracas is that we need a climate change futures market. Nate Silver likes the idea, too, arguing:

The markets would help to clarify exactly the extent to which there is in fact a consensus about climate change. There is, I believe, an abnormally high degree of disingenuousness within the global warming debate, most of it coming from one side. We would very quickly find out if the skeptics — and for that matter the believers — were willing to put their money where there mouths were.

This idea has some merit, but let’s not get carried away with ourselves. The underlying intuition here is that talk about climate change is cheap, but if we made people put their money where their mouth is we’d force them to speak honestly. The problem is that when coal and oil interests or the Koch family pays people money to mislead people about climate science or clean energy policies they are putting their money where their mouth is. Big money is at stake in this issue, and it could be easily worthwhile for polluters to lose money on a prediction market if that helped undercut support for clean energy legislation.

The problem is that just about any metric you might like becomes contaminated once people know there are large political economy stakes.