Risk Management Approach Could Motivate Climate Change Action

By Lianne Lefsrud & Renate Meyer

Is it possible that modern society’s bitter political divisions over belief in anthropogenic climate change is distracting decision-makers from the far more practical matter of confronting the risk that it presents, directly or indirectly, to businesses and the economy?

A survey of 1,000 professional engineers and geologists in Alberta suggests this may be so, and that proponents of more decisive action might be more successful – and a lot less frustrated – if they built a consensus around the value of being ahead of the curve if science, weather and politics someday come together to impose drastic regulatory action.

Indeed, despite the current scientific dissension, declining public interest and political intransigence, an opportunity seems to exist to ‘broker’ dissention between these groups.

Consider: Energy companies are concerned about risks to their infrastructure, such as pipelines passing through permafrost. The insurance and reinsurance industry is concerned about exposure to financial risks associated with extreme weather events. The U.S. military is concerned about security risks associated with population displacements, from failed states and terrorism, and the potential escalation of conflicts over resources.

That is to say, they worry about possible outcomes, even if they do not clear the higher bar of certainty that the current debate on the validity of science seems to demand before significant action is taken.

In fact, professional engineers, geoscientists, lawyers, accountants, and corporate officers are all in the business of managing risk. Indeed, engineers have recognized the risks inherent in climate change by revising the Canadian Building Codes.

In 2007, to better understand the broader resistance to acting on climate change, we surveyed engineers and geologists because their professions dominate the oil industry and their views on climate change influence the positions taken by governments, think tanks and environmental groups.

What were the results? Well, they were unambiguous on one issue – over 99 per cent of respondents agree that the climate is changing. On issues involving causes, consequences, and lines of action there was less agreement, which allowed us to categorize the respondents into five different groups.

The first group, dubbed “Kyoto Supporters” (36 per cent of respondents) support the findings of the United Nations International Panel on Climate Change (UNIPCC) and regard scientific knowledge to be conclusive enough to endorse mandatory action. Yet they do not engage in mobilization efforts and do not challenge the expertise of those less inclined to act, preferring to emphasize fraternity and collaboration rather than join the cause for change.

The second group, the “Regulation Activists”, represents only five per cent of respondents. While they are skeptical whether the UNIPCC modelling is accurate, they call for regulation and its enforcement. They demand that government, professionals, and industry realize their responsibility and find answers. Unlike Kyoto Supporters, they take great efforts to mobilize others to support their position.

Against this theoretical coalition totalling 41 per cent who believe action should be taken, the third and fourth groups form an anti-regulation coalition of 34 per cent despite holding different views about the causes of climate change.

The “Natural Fatalists” (only 24 per cent of respondents) are skeptical that climate change is caused by human activity, believe that climate science is fraudulent, that the debate is not settled and that “good science” will eventually overcome the UNIPCC’s “science fiction”. Further, they believe all regulation is ineffective and therefore there is no urgency.

The “Economic Optimizers” (10 per cent of respondents) are not overly concerned with the actual causes of climate change. Rather, their active opposition is based on the high economic cost of intervention which, according to them, will negatively affect competitiveness and jeopardize progress in the Western world.

Both groups downplay the environmental risks associated with climate change and deny the appropriateness of regulation and global agreements.

The last group (17 per cent of respondents) was the “Anthropogenic Fatalists”. While they believe in human-induced climate change in principle, they think the issue is too complex and all existing information is biased. Not surprisingly, they also do not believe that action would be effective.

Our results indicate that those who are more defensive occupy more senior organizational positions and are much closer to decision-making than activists. Over 60 per cent of top oil and gas executives in our sample are “Natural Fatalists” or “Economic Optimizers” while less than 20 per cent are “Kyoto Supporters” or “Regulation Activists”.

The continuing disagreement about the science of climate change, together with the increasing weariness and fatigue about the subject on side of the electorate, is unlikely to increase policy-makers’ inclination to further regulate greenhouse gas emissions in the short term. The Canadian government’s decision in December 2011 to withdraw from the Kyoto Protocol and avoid $14 billion in penalties has shown this quite plainly.

But reframing climate change debate from one about science to one about a risk to be managed has the potential to unite these various groups (except ‘Fatalists’ who seem generally apathetic).  Focusing on the probabilities and consequences of climate change could pull professionals out of this divisive, position-based entrenchment to a shared, interest-based future.

For example, financial risks would resonate with ‘Economic Optimizers’, environmental risks with ‘Kyoto Supporters’ and ‘Regulation Activists’, and regulatory risks with all anti-regulationists.

Even though they are a small minority, “Regulation Activists”, who recommend more actions than any other group, could occupy a key role in creating a ‘tipping point’ in reframing climate change. By using a common enemy – risk – an interest-based coalition may be formed to overcome resistance to responsible policies on climate change.

Lianne Lefsrud is a Doctoral Candidate in Strategic Management and Organization at the University of Alberta. She studies sustainability and the development of energy sources.  Her research examines the role of language to define, value, and shape our conceptions of science, technology, the environment and the associated state and self-regulatory institutions.

Renate Meyer is Professor of Public Management and Governance at WU Vienna, Austria, and Permanent Visiting Professor at Copenhagen Business School, Denmark, at the Department for Organization, and the current chair of the European Group of Organizational Studies (EGOS). Her research interests currently include framing strategies, ambiguity as response to institutional complexity, and new forms of governance in the public sector.

Read the full paper for free online from Organization Studies, published by SAGE.

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