The Climate Casino, by William Nordhaus

This is a book that surprised me. I was looking for example of a good overview of marginal approaches to climate change and simplified thinking in relation to extreme risk. But found some very solid arguments and ideas for more transformative approaches.

This was unexpected as Nordhaus has an agenda in this book that I do not fully understand. In some ways it looks as if Nordhaus wants to position himself as a moderate academic that accept the science, but also distance himself from people he thinks are to radical for the political thinking in the US. It is as if he wants to translate the science to republicans in the US who thinks the bible is more important than the scientific process and findings among climate scientists.

For large parts of the book that makes him simplify things in ways that are interesting, not for an understanding of climate change, but for those of us who do not experience people who question evolution and basic physical science on a daily bases.

Still from an extreme climate risk perspective (>6C warming) there are arguments and graphs included that makes this a very interesting book. I actually do not think Nordhaus himself intended his book to be interesting form that perspective, but due to the way he honestly argues with basic economic theory he highlight a number of issues that are very interesting.

For example, in the book he writes about thresholds and how they define almost everything. He also discuss, and use, the concept infinity (although I would argue that this is one of the areas where he is making a few key mistakes; see if you agree when you reed it. Hint, it is about shifting perspective from science to rhetoric then mixing them up) when analysing the long-term consequences.

Still, I agree with - what I see as - his two main arguments in the risk area:

1. That cost benefit assessment can help us to invest in a strategic way so that future generations can get it better (under the condition that future generations will still exist and that the pricing is approximately right. Neither of these are obviously true in mainstream economics when it comes to climate change)

2. That thresholds easily become what defines what kind of action that is needed, as the costs at a threshold are magnitudes larger than anything else in the equations. It’s also worth noting that such a defining threshold for action happens long before an “infinite impact”, i.e. an impact that threatens all human life.

Where I think he fails, is to discuss these two paradigms in relation to climate change. If ignoring thresholds and the need for dramatic changes is something that is necessary to reach consensus in the US he should clearly explain that the actions we will take is not related to what is needed. Hence, there might be a price attached to ensuring a broader agreement among US policy makers today. Such an agreement is obviously important, but it would be very interesting if Nordhaus wrote a book where he focused on an educated audience that accept the science, he’s got a sharp intellect to could help move low probability high impact aspects up the agenda. This would probably also be a more important long-term contribution.

How to find cost-efficient solutions where signifiant transitions are needed and there are multiple possible development paths are important economic challenges where people like Nordhaus are needed.

Business as usual is over, by Hans Hassle

This is a very low profile, and short, book that also is very radical. It is the kind of book where you know that history could turn this either into a classic, or an almost irrelevant footnote. I hope it will be a classic as it explores new innovative ways forward for entrepreneurs who see beyond tools and focus on results. Exactly the kind of innovations that are needed if we are to move beyond incremental improvements in our current systems.

What is interesting, and unusual, is that the personal parts of the book are actually relevant for the overall story about how business could/should look in the future. Too often the personal parts feels as if they are added to make the book fit in with the mainstream populism, or are used in order for the author to tell people how clever/empathic/linked/etc he/she is.

It is both a story about a persona journey and the birth of an idea for how the best of idealism and strategic thinking can be brought together in a new way and create a companization, a hybrid between a company and a non-profit organization. The book both covers the ideas behind this new entity as well as the story of the actual implementation.

The fact that the book that the book hardly mentions that Plantagon, the company Hans is running right now, probably is the leading companies/organizations in the area of urban agriculture just shows how important Hans think the idea behind his ideas about companization is.

Regardless if you are interested in ways to save the planet, new ways to organize society, or “just” want to be inspired by a person who turns visions into practical results, this book is for you.

The Zero Marginal Cost Society, by Jeremy Rifkin

This is a book I really wanted to like. Both because I like Rifkin, his ethics and what much of what he has done, but also as I think the theme of the book is both very interesting and important.

The idea with a “near zero marginal cost society” is an interesting one, but I do not understand why Rifkin writes a book that is confusing the issue rather than helping make sense of the complex situation we face.

If we look at the different phenomenon that Rifkin discusses as “near zero” they are all interesting, but they are very different and only one category, with very few example, could be called close to zero marginal cost (if we ignore the cost of building and maintaining the ICT infrastructure). By confusing very different categories Rifkin is not helping provide a better understanding of the challenges we face. Perhaps he was hoping to contribute to a broader shift in how we approach cost in the digital age, but with such

I have seen others do similar mistakes as Rifkin, and below are four main categories that I use as a starting point during lectures to help provide a basic understanding regarding some of the key aspects of the digital economy.

1. (Close to) Zero marginal cost This is when a service can be provided for 1 person or 9 billion without any change in cost (for the provider): Software/information, books, movies. images and music belongs to this category (e.g. Operating systems, e-books, mkv-files, jpg-files, etc basically everything provided by Piratebay . It is important to understand that some of the goods in this category (like software) require significant investments. Too many people confuse zero marginal cost with zero cost. The question of how such goods should be priced is interesting and many might be goods that should be provided through taxes and then turned into digital public goods in key areas (education, health, science, etc. classical music).

These goods are interesting as many of them do not can be shared without loosing their value, the value actually increase as more people use them (from Skype to music)

This is basically data that can be copied.

2. Optimal use This is when limited additional use can be seen as zero marginal cost (if the existing use is profitable). This is when people share cars, tools, rooms (e.g. Air bnb, sharedearth, Zipcar). The “low” cost in these cases are not really low or zero, they are just a result of suboptimal use of our resources today. The fact that individual car ownership result in a situation when the car is often used less than 4% of the time does not really make the use of the additional 96% free. The fact that connectivity allows us to use products more optimal is very good, but it is only when we approach the challenges from a service perspective (in the case of the car “mobility”) that we can identify really smart solutions.

Optimal use is therefore in many cases just better use of fundamentally unsustainable solitudes, from extremely inefficient fossil SUVs that are part of car sharing schemes, to enormous inefficient apartments that are part of airbnb or similar schemes.

3. Low/zero running cost This is when the fuel/material used is zero or close to zero. Solar power, wind power, hydro power (almost nuclear power) belong to this category. These kinds of solutions have been part of society since the dawn of civilization, from windmills to water pumps.

These are fundamentally different from category 1, as these goods are not possible to share in the same way, if I use solar power it is less power left for you to use. When I read an e-book it does not affect your possibility to read it (if anything it increase the value of your reading it as we can discuss the book).

If the bulk of the cost belongs to the upfront investment for the construction of the goods, or to the running cost has noting to do with a zero marginal cost in the long run. It is the total cost of ownership that is interesting. There are challenges, from physiological/personal financial that tend to make people buy cheaper goods with higher running costs, to institutional when some companies roll over running costs to end-users. Still these challenges are not really related to the other zero cost aspects above.

E.g. the challenges with solar today is that most depend on materials that are limited in a way that do not allow them to be scaled up so that 9 billion can use them. They also require a lot of investments, not only to build them, but to connect them and maintain them in the current system. A simplistic “zero marginal cost” approach run the risk of hiding these important challenges.

This group of solutions must always be assessed through a LCA for natural resource use and actual costs of ownership.

4. Low production cost There are also a number of products where the value is due to research (or branding/marketing) not the actual production cost. Many medicines belong in this category, but also much of the luxury market where people pay for advertisement (like designer shoes, clothing, make-up).

For the “unnecessary” goods there are some positive environmental aspects as people pay a lot of money for very little material. Still the overall focus on citizens as consumers probably results in an overall negative impact (as these goods tend to promote short-tem thinking and limited empathy)

For necessary goods, like medicine, there are a number of interesting initiatives trying to explore how those in need can get access to medicines they need. E.g. http://healthimpactfund.org/ that is interesting as it also help focus on actual gains from the medicines.

In summary: Although I tend to disagree with much of the content in the book I still think this is a book that could be read as it covers many of the new trends and ideas that are often ignored. Also Jeremy has the heart in the right place so the discussions are interesting. I would recommend readers to approach the book like a bookmark collection from an interesting person who has found a lot of good pages on the web rather than a book with a coherent idea (or with any references to actual first hand research). I hope that the fact that almost all of the references are articles on the web is not an indication of a shallow thinking behind the book, but rather an attempt to provide easy read articles (although I think such books should have references to actual research).

I guess my conclusion is that this book could have been distributed as a 5000 words article and the weblinks downloadable as a package.

The Engines of God, by Jack McDevitt

A science fiction that addresses the Fermi paradox in an innovative way is always a welcome contribution to my reading list. This book had two things that I liked. First, how it describes a situation where we knew that there is life in the universe, but we are too late. To get to know a future where we are traveling around ruins of earlier civilizations is an interesting angle. Second, how a society grapples with a catastrophic challenge that will happen in a thousand years, but were actions probably is needed now in order to avoid the catastrophe (and to make things more interesting the probability for humanity managing the challenge is low based on existing data). The parallel to climate change is obvious, but the setting is so different that it feels fresh. The fact that we do not understand the threat and the book never reveals it is also interesting. We are so used to stories when we get the answer in the end (or more correct before the end when it comes to this kind of threat). The actual mechanism in this case is not the most important, especially as no explanation is provided (at least not in this book). What I find clever and interesting is how mankind would react (and get used to) a universe filled with civilizations that are dead and not understanding a threat to human existence. Adding to this a countdown clock (that gives us 1000 years or more) and we have a very interesting situation.

It’s not great literature, but enough interesting ideas to make it a good read.