In my opinion, public policy on greenhouse warming needs desperately to steer a middle course, which is not yet there, for dealing with possible climate-change disasters. This middle course emphasizes the option value of waiting for better information, takes seriously whether or not possibilities exist for …nding out beforehand that we are on a worst-case trajectory (and knows how much early-warning sensors cost to install), confronts the possible options of undertaking politically-incorrect emergency measures if a worst-case nightmare trajectory happens to materialize, and otherwise attempts constructively to have some kind of a game plan for what might be coming up. The point is to supplement traditional mid-distribution analysis of, and action on, climate change by putting research dollars into early detection of rare disasters and beginning a serious public dialogue about contingency planning for worst-case scenarios akin to the way Americans might debate the pros and cons of an anti-ICBM early warning system. It may well turn out that the option value of waiting for better information about catastrophic tail events is negligible (because early detection is impossible, or it is too expensive, or it comes too late, or because nothing practical can be done about undoing greenhouse warming anyway), but these are conclusions we need to reach empirically, rather than postulating them initially.

Until we start seriously posing and trying to answer tough questions about rare global-warming catastrophes, we will not make real progress in dealing constructively with the nightmare scenarios and we will continue to cope with them inadequately by trying to shoehorn disaster policy into an either-or response category where it won’'t fi…t. The Stern Review has its heart in the right place --- –it is not nice for us to bequeath to our great-great-grandchildren the enormously unsettling uncertainty of a very small, but essentially unknown (and perhaps unknowable), probability of a planet earth that in hindsight we allowed to get wrecked on our watch. However, the Review does not follow through formally on this really unsettling part of the global warming equation –which a generous interpretation of its bad economics might say is the underlying motivation for its overall alarmist tone –except indirectly, by choosing [unrealistic model parameters] in order to reverse-engineer the drastic slowing measures that it intuitively wants to impose on greenhouse gas emissions to neutralize the nightmare scenarios.