16 March 2019

Link to essay on Environmental Policy Bonds and climate change

My previous post described how we might fold the effects of climate change into goals for Environmental Policy Bonds, so that we could tackle all our urgent, big, environmental challenges, regardless of their cause, in ways that are more likely to generate buy-in than the current intense focus mainly on greenhouse gas emissions. I've written a longer essay on that theme, which is more suitable for people unfamiliar with the Social Policy Bond principle, here.

08 March 2019

Climate change and the environment

Climate change could be tackled in various ways. We could aim to throttle its causes. We could aim to keep the climate, as measured by a wide range of physical, biological and financial indicators stable. Or we could aim instead to target for improvement all aspects of the environment, whether or not their degradation has been caused by climate change.

Policymakers have mostly gone for the first option: to try to reduce greenhouse gas emissions, believing that they are the main driver of climate change. Myself, I've advocated in the past the targeting of an array of indicators, including the impacts of adverse climatic events, but also physical, social and financial measures of climate change.

I'm now more inclined to the third option, and think we should try to solve our environmental problems however they are caused, rather than focus on trying to prevent climate change. My thinking is partly a result of humanity's having done almost nothing actually to stop the climate changing.

 For buy-in we need meaningful outcomes

What’s wrong with targeting greenhouse gas emissions?

  • We don’t really know what’s happening to the climate;
  • We don’t really know why it's happening;
  • We don’t know whether trying to reduce greenhouse gas emissions will solve whatever the problem might be;
  • We do know that targeting greenhouse gas emissions will have large upfront costs, and that any benefits will be way into the future, uncertain and, even on the best advice of the experts, tiny.

Admittedly the science appears to say that greenhouse gas emissions are changing the climate in ways that adversely affect human, plant and animal life, though it’s less convincing about the effects of reducing these emissions. But that’s not really relevant. There’ll be no action taken, and indeed there have been no significant actions taken (see here, here and here), because, in my view, the relationship between greenhouse gas emissions and adverse impacts is too tenuous and abstract to generate buy-in. And buy-in is what we urgently need.

Note that I am not suggesting we don’t target greenhouse gas emissions: only that any decision to do so needs to be made on the basis of whether it’s the most efficient way of achieving our environmental goals.  Professor Jem Bendell paints a cataclysmic picture:
The evidence before us suggests that we are set for disruptive and uncontrollable levels of climate change, bringing starvation, destruction, migration, disease, and war…
>My suggestion is that planetary well-being would be better enhanced by aiming explicitly to reduce such scourges -  starvation, destruction, disease and war, than by targeting, or pretending to target, greenhouse gas emissions. Reduced starvation, disease and war are goals that are less abstract and more meaningful to ordinary people than climate change. By targeting them we’re more likely to generate the buy-in that is essential to bring about changes that will create, at least in the short term, losers. All the evidence tells us that, after many years of exhortation, dire warnings, and extreme climatic events, there’s very little buy-in to the goal of reducing greenhouse gas emissions.

As well as aiming to reduce starvation, disease and war, we could explicitly target also environmental goals that mean something to the non-experts whose buy-in is necessary. These could include reduced air and water pollution, less noise, reduced impacts of adverse climatic events, and reduced loss of biodiversity.

It’s not so difficult: we re-frame and, if necessary, re-orientate policy to meet these goals, rather than a target level of greenhouse gas emissions which is, at best, only a putative means of achieving some of them.

Environmental Policy Bonds

I propose that we reward the sustained achievement of our environmental goals. Further, I propose that we do so in ways that channel market forces – the most efficient way we yet know of allocating society’s scarce resources – into the achievement of our environmental goals. I further suggest that we do this is by nationally or globally backed Environmental Policy Bonds. These could target our biggest environmental challenges, regardless of their supposed source. A bond regime would allow us to target long-term goals, and stimulate research into diverse approaches to solving our problems.

Importantly, the bonds wouldn't dictate how our environmental goals shall be reached. It's quite possible that investors in the bonds will find that targeting greenhouse gas emissions for reduction is the most cost-effective way of solving some of our environmental problems. The crucial distinction between such targeting, and the way emissions are being targeted today, is that bondholders will target emissions only if doing so - at the time and in the areas they decide to do so - is the best way of achieving our goals. They will be making their decisions on the basis of the science (and economics) of the relevant time and place, rather on the fossilised science of today. Their solutions, unlike today's non-solution, will be diverse and adaptive. And - another important difference - the people who look for and implement them will be rewarded only if they are actually successful in improving our environment.

05 March 2019

The metrics of tyranny

In our complex, populous societies we're not going to escape the use of metrics as indicators of social well-being. Social Policy Bonds aim to target targets that are meaningful to ordinary people. They therefore need metrics that are carefully devised, robust, verifiable and, preferably, easy and cheap to monitor. A Social Policy Bond regime, ideally, would use reliable metrics in a considered, coherent manner. There are dangers in taking metrics as ends in themselves, in using them incoherently, and in ways that conflict with people's well-being. Unfortunately, that's the direction in which we're moving. Having read The tyranny of metrics by Jerry Muller I've written about the limitations of metrics. I've also mentioned Campbell's Law. An article in the Economist does much to justify Mr Muller's and my skepticism:
Take the World Bank’s annual comparison of business regulations around the world. One country stood out in its latest ranking: China, which had languished in 78th place the previous year, jumped to 46th. India seemed to have improved, too, rising 23 spots, to 77th. Those remarkable ascents have less to do with the ease of doing business in those places than with their governments’ determination to achieve good grades. Some 40 people work in a Chinese government unit dedicated to improving its World Bank score; perhaps 200 toil in India’s. At least 60 countries have teams that focus on the index. (My emphasis)  Life and society are increasingly governed by numbers, 'The Economist', 23 February
Our societies aren't going to return to the times when policy is made for groups of 150 (see Dunbar's number). It follows that metrics will be the means to determining how well society is doing. Currently our governments rely on a motley array of narrow, short-term, Mickey Mouse micro-targets, including the de facto target of Gross Domestic Product, with their many flaws, some of great consequence. A Social Policy Bond regime, by contrast, would channel people's goals and expertise into answering fundamental questions: what should we target? What are the essential elements of social and environmental well-being? Where do we, as a society, want to be heading? Our obscurantist political systems allow our rulers to duck these questions and distract us all with spurious arguments about ideology, personality, image and sound bites.

The tyranny of metrics metrics of tyranny

It gets worse. In some societies metrics are already explicitly weaponised (from the same article):

In China, for example, Zhima Credit, a popular private service, measures “personal characteristics”, “online behaviour” and “interpersonal relationships”, among other things. A high rating entitles people to a fast-track visa for Singapore.

23 February 2019

Climate change: the people have spoken

Consider the destruction of a rainforest to make room for a palm oil plantation. Or some island jurisdiction changing its tax laws. Or catching a plane from London to New York. All have effects, some of which can be captured by a market, some of which cannot. If globalisation means anything, it means that these effects can have ramifications far beyond the territory in which they take place. 

Many of our actions have impacts on the physical environment, and most of  these aren't captured by the market. Economists call these externalities. The negative impacts of fossil fuel use include air pollution. Even limiting ourselves to the impacts of air pollution, we don't know all the long-term effects. We suspect that they are or will be deleterious to human, animal and plant life. (In net terms, that is: some populations will benefit.)

The problem policymakers face is that the positive externalities of, say, fossil fuel use are upfront and of similarly huge dimensions to the negative. Every plane flight hugely benefits the passengers on board, their pals, the crew, and the others employed by the airline industry ... and then there's the freight. A fraction of these positive impacts, but not all, is captured by the market. At least as compelling are the positive externalities resulting from fossil fuel use in general: the benefits of electricity, heat, air conditioning.

To summarise: the market captures and quantifies some but not all of the impacts of a transaction. It misses a lot of positive and negative impacts. It fails to capture any impacts of anything we do that is not a transaction. All this is to say that fossil fuel use has huge positive impacts as well as negative, and we cannot say whether the negative effects outweigh the positive. The market does not, and cannot help us, because there's no way we can know and weight all the objective impacts accurately, but also because many impacts are subjective and unquantifiable.

Climate change: do we care?

Take climate change. The net negative impacts on human, animal and plant life of climate change – probably better termed climate breakdown – are incalculable and massive. Possibly catastrophic. We are pretty sure, but not certain, that greenhouse gas emissions cause some, maybe much, maybe all, of climate change.

We can, though, be more certain about whether we really care about the threat of climate change. And the answer is a resounding: not really. Lots of conferences, exhortations, subsidies for renewables (though not as many as for fossil fuels - see below), stirring rhetoric and doom-laden prognostications. Some change? Sure, at the margins. But meaningful results? No, no, no.

It's true that our political systems are so corrupted by their proximity to the ultra-rich that the long-term interests of millions of ordinary people count for less than the short-term goals of billionaires. The ultra-rich and their lackeys in and out of government are responsible for some of this: fossil fuel subsidies are estimated to be worth $160-200 billion per annum, and we are pretty indulgent in letting billionaires dictate policy. But that cannot be the complete answer. It's more like a cop-out.

The billionaires people have spoken

The fact is that we have collectively chosen not to do anything significant about climate change. We’ve chosen quality and quantity of life in the short run, over quantity and quality of life in the longer term. We find it easy to do this, in my view, because:

  • 'Climate change' is too abstract. and
  • We focus too intensely on greenhouse gas emissions, whose effects aren't fully known, and whose reduction might or might not do anything significant to bring about a more benign climate at some indefinite future time. 
My suggestion is that rather than address or pretend to address what we suspect, but don't know for certain, and cannot prove, is the principal cause of climate change (greenhouse gases emissions), we should try to deal with environmental depredations, whether or not they they are caused by climate change.

Limiting greenhouse gas emissions isn't happening and isn't going to happen. Even if the billionaires were to switch sides, most of us don't really want it to happen. The costs are upfront, the benefits nebulous and long term. What we want, what we can understand, relate to, and identify with, are reductions in the more tangible environmental pathologies: flood, wildfire and other adverse climatic events, loss of biodiversity, loss of wilderness, pollution of the air and seas. It's not solely an issue of presentation. We are more ready to pay taxes to help human, animals and plant life than we are to do something that might reduce the increase of some measure of global temperature some decades hence.

So I suggest that we divert resources from trying to reduce greenhouse gas emissions to solving other environmental problems, including those caused by climate change.

One way we could do this is by massively backing global Environmental Policy Bonds. These could target our biggest environmental challenges, regardless of their supposed source. The bonds would reward the achievement of verifiable, meaningful environmental outcomes. Examples: cleaner air, cleaner seas, reduced losses of biodiversity and habitat. We could target for reduction those environmental ravages that we now attribute to climate change including species loss and the impacts of adverse climatic events. The way the bonds would work means that investors would work out for themselves at all times, whether or not the best way of dealing with our environmental challenges is to tackle what we think are their root causes.

We need diverse, adaptive approaches. No single, top-down, one-size-fits-all policy will work. Environmental Policy Bonds can encourage the array of diverse, adaptive approaches that we need to begin to solve our environmental problems.

16 February 2019

Why don't we target trust and empathy?

Dr Elliott Barker asks How do we prevent crime?:
It seems incredible to me that as a society we don't publicly advocate those values upon which all harmonious social interaction depend - trust, empathy, and affection. Why shouldn't society - all of us collectively - reinforce our own latent awareness that these values are where it's at, and why shouldn't we do this at least as frequently and effectively as we allow ourselves to be reminded to drink Coca-Cola? How do we prevent crime?, Dr Elliott Barker, 'The Natural Child Project', February
Dr Barker calls for scrutiny of policies affecting infants and toddlers and a recognition that capacities for trust, empathy, and affection are more important than superlative exam results or musical virtuosity. Indeed, achieving such goals can conflict with child rearing practices that produce an adult capable of harmonious, co-operative human existence.

What's this got to do with Social Policy Bonds? Quite a lot, I think, and not just in respect of crime. Social and individual well-being are legitimate targets for government - at least as legitimate as educational achievement. It's entirely plausible that Dr Elliott is correct in that trust, empathy, and affection contribute mightily to well-being but my point is that, under our current system, few of us are motivated to find out whether he is or not, and that even if it could be shown that he is, few are motivated to do anything about it. At the individual level, sure, there are parents who have the time and energy to devote to child-rearing and who share Dr Elliott's insight. But they still have to contend with social forces, heavily influenced by government policy and its de facto targeting of economic growth at the expense of our social and physical environment.

Social well-being, trust, empathy, affection: these are difficult qualities to measure. The effects of their absence, though, are measurable, and politicians try to deal with some of them - especially those that could be televised - with an array of short-term measures: more money for the police, more prescription drugs, decriminalising narcotics, and so on. But they have little inclination to think long term. A Social Policy Bond regime, because the bonds are tradeable, could help in achieving such long term goals as social cohesion and the other contributors to well-being described by Dr Elliott. It could, for instance, target for reduction such pathologies as crime, mental illness, and other effects of social alienation and lack of trust. Our current political systems are inescapably short term, though and they focus on more immediately and readily quantifiable indicators - such as GDP and academic achievement - regardless of the longer-term cost to individuals and society of doing so. As Dr Elliott says:
It seems peculiar in a society in which schooling is mandatory from age 6 to 16 that we turn out graduates who have no preparation for the one job they are almost certain to have - raising children. Surely, before conception is a possibility, boys and girls should appreciate the permanent emotional damage that can result if the emotional needs of a young child are not met.
Dr Elliott is pessimistic about whether we will do anything to avoid such emotional damage. I will leave the last word to him: 
Why won't such preventive measures be taken? There are many factors. In part, it is because we are presently attuned to a shorter time frame politically and psychologically than prevention necessitates. In part we are misled by the excitement and drama of intervention after a problem has occurred. The cops and robbers game for example is the stuff of much of our entertainment. In part it is because today's casualties have greater motivation to lobby for their own immediate needs than for prevention of tomorrows' victims. In part it is because an impossible level of proof is demanded whenever we discuss changes that appear to tamper with our present values. But mostly we just know that such proposed solutions to crime prevention are "naively idealistic."

13 February 2019

Humanity versus vested interests

A correspondent asks me why the Social Policy Bond concept hasn't yet been implemented. A good question, especially as the non-tradeable version (Social Impact Bonds, also known as Pay for Success Bonds, etc) is becoming more widely deployed and much discussed. So...why not Social Policy Bonds?

I suspect part of the answer is that Social Policy Bonds are a threat to existing institutions: politicians, because they would have to relinquish their control over who shall achieve social goals and how they shall be achieved; and government agencies, such as education, police, health departments, because investors in the bonds would subordinate all their funding decisions to efficiency and, in many cases, new organisations and new techniques will be more efficient than existing bodies with their entrenched ways of doing things and fairly limited remits. Just one example: the best way of reducing crime rates in a disadvantaged area might be to subsidise employment there, rather than increase funding for the local police force. Or a cost-effective way of reducing the numbers of people killed or injured in car accidents might be to lay on free mini-cabs or taxis or have teams of dedicated, paid drivers whose sole job would be to ferry people from pubs, bars, nightclubs, home at night. That might be really cost effective but, under our current system, there's nobody to speak up for such a policy, and it would be opposed by vested interests. More dramatically: nobody really want to live under threat of nuclear war, but currently there are no bodies with sufficient influence and motivation to ensure that won't happen. Sure, there are teams of dedicated people in international bodies striving valiantly to reduce conflict but, the resources, including brainpower, just aren't there. Big money has less interest in avoiding nuclear catastrophe than it does in devising imaginative ways of selling dog-food. And why not? It's reacting rationally to the incentives on offer - which (I think) are perverse in that they prioritise the narrow short-term interests of a few corporations (and, arguably, a few dogs) over the survival of millions of human beings.

Another reason for the absence of Social Policy Bonds from the scene could be the hysterical nature of today's politics, where shrieking abuse at the opposition has supplanted making policy to improve society's well-being as the prime activity. So solving social problems is seen as a 'left-wing' goal, and using markets is seen as 'right-wing'. In more enlightened times, you'd think a policy that uses markets to improve social well-being would unite both left and right; but that's not happening. So while I'm partly encouraged by the slow spread of Social Impact Bonds, I'm also concerned that - especially if they become so common as to escape public scrutiny - they will end up serving vested interests at the expense of society as a whole.

For more about Social Policy Bonds see my home page. For my concerns about SIBs see here and here, as well as some previous blog posts.

05 February 2019

Perceptions and reality: no easy answers

A retired MD writes to the American journal Consumer Reports:
AS A RETIRED M.D. (30 years in emergency medicine), I agreed with most of your article about too many tests. However, you forgot to point out one of the big reasons for overtesting: hospital, clinic, and provider “scorecards.” Medicare providers are still being ranked by “patient satisfaction,” which is often driven by whether patients get all the tests they want— even after you explain why they aren’t necessary. Doing an X-ray on every sprained ankle is a classic example in emergency medicine. —Emma K Ledbetter, MD, 'Consumer Reports', March
There's s a genuine problem for policymakers: should we target for improvement only those goals that can be objectively measured, or should we also aim to improve something far more subjective: people's happiness or satisfaction? Ideally there wouldn't be a conflict, but in matters of health there is often a discrepancy between what's actually happening, and what people think or fear is happening. Crime too:
One would imagine that if crime was high, fear of crime would be as well, and alternatively, if crime was low, fear of crime would follow this pattern. What has been found over the years, however, is that crime and fear of crime rarely match up. Fear of crime, Nicole Rader, Oxford Research Encyclopedia, March 2017
In both health and crime, perception and reality aren't easily disentangled. In health, we all know about the placebo effect,whereby an objectively useless pill or procedure does actually improve a patient's condition and his or her perception of that condition. Crime rates might be low, but perceived crime high for a valid reason: people are afraid of, for instance, venturing onto the streets after dark. To add to the confusion: people's perceptions are difficult to measure accurately.

How to deal with perceptions when they might conflict with reality is crucial when trying to formulate policy for anything other than a very small number of people. Take, for example, the question of whether we should incorporate perceptions of crime into an overall crime index that we target for reduction? I'm minded to say no because perceptions can easily be gamed at the expense of objective reality. In today's political climate, it's all too easy to imagine an interested body to work on perceptions - via a massive advertising campaign, perhaps - and doing nothing to reduce crime rates. Similarly with health: we could weight the physically verifiable results of testing, or a placebo, say, more highly than their psychological impacts. (The latter could perhaps be given zero weight, as over-testing and other unnecessary procedures can have negative physiological impacts.) In general, then, perhaps the best approach is to target objectively verifiable indicators and hope that perceptions begin to match them more closely. When it comes to something like our crime example, where people are afraid to walk in the streets because of the fear of being mugged then we'd need to be more creative in coming up with objective targets in addition to goals such as 'reduced number of assaults'.

No easy answers then, to this question that's relevant not only to a Social Policy Bond regime, which relies on targeting explicit, verifiable and meaningful goals, but to any body implementing social policy that uses aggregated data to help formulate policy.

28 January 2019

Hyper-manicured public spaces

Colin Tosh, lecturer in ecology, writes about hyper-manicured public spaces in the UK. He gives examples:
The wildlife value of a particular tree species in cities is often disregarded when a decision is made to remove it. In parks, plant species which are exotic to the UK such as the New Zealand cabbage tree (Cordyline australis) are intentionally planted because no native wildlife can use them, so they are low maintenance. ...

Leaves are swept up immediately before their nutrients can return to the ground and the insects that lay their eggs on them are doomed to certain death. Road verges are cut back to the bone several times each year and the clippings are left lying, minimising their use as a habitat for wild flowers. How hyper-manicured public spaces hurt urban wildlife, Colin Tosh, 'The Conversation', 22 January
Part of the reason is that the wishes of local people conflict with those of the bodies charged with maintaining these spaces:
It doesn’t help that grounds management is often subcontracted to private firms in the UK. In these cases, grounds management is more likely to be insensitive to expert advice as the function is out of the hands of the democratically controlled body and with a private company that needn’t care what the public thinks.
We see this all the time: corporate bodies have goals that conflict with those of ordinary people. Often their goals are short term and narrow. Qualities important to the public fall through the cracks: in this instance, the local environment; more generally the global environment, social cohesion and other things that make up the Commons.

Social Policy Bonds could work quite well in targeting broad, long-term goals, such as the dealing with climate change or its impacts. For local goals, such as the well-being of public spaces, the remedy would appear to be, as indicated by Mr Tosh, ensuring that the bodies responsible are accountable to the people directly affected. Both approaches entail taking ordinary people's long-term goals seriously, and giving a lower priority to the short-term goals of corporate bodies, including government agencies.

Interestingly, even on their own terms, efforts made to satisfy the short-term accountancy-type goals local authorities, fail:
The irony of it all is that measures to improve public areas for wildlife essentially involve less effort overall. All that really needs to be done is to allow public areas to be a little more unkempt, because unkempt areas are what nature likes.
 Again, there is a larger-scale parallel: 
If shareholder primacy theory is correct [ie, that the over-arching goal of corporate managers is to maximise shareholder value] corporations that adopt such strategies should do better and produce higher investor returns than corporations that don’t. Does the evidence confirm this? Surprisingly, the answer to this question is “no.” The Shareholder Value Myth, Lynne A Stout, 'European Financial Review', 30 April 2013
And the reasons are similar and include: the differing goals of the many stakeholders, not all of which are readily quantifiable; and, very often, conflict between long- and short-term objectives. Corporations, of course, are supposed to be in competition with each other, so should be penalised if they fail to meet consumer demand. But, as Jonathan Tepper tells us, competition is now an every more rare feature of today's mixed economy. A Social Policy Bond approach might be the answer, whereby investors form a new sort of organisation and enrich themselves if and only if they help achieve the long-term goals of society as a whole.

17 January 2019

Channelling viciousness

From a letter to the editor of today's Financial Times:
Bernard Mandeville, the 18th century Dutchman who left Rotterdam to live in England, was not only an early modern crossover representative, he also understood the psychological roots of humankind. In his Fable of the Bees he asserts that rationality is not necessarily virtuous. In fact, individuals acting viciously can bring about positive aggregate results such as higher investment, employment and economic growth. Dr Jacob Borheim, Financial Times, 17 January 2019
For sure, the accidental effects of human actions can be beneficial as well as disastrous. Adam Smith's Invisible Hand apodictically generates material wealth. But pursuit of our individual goals can and does create serious social and environmental problems too. A benign, quick-acting, and impartial government can regulate away the worst excesses arising from our pursuit of happiness. But governments aren't quick acting, and rarely are they benign and impartial. In fact, society is now so complex that even such an ideal government couldn't react quickly enough to the negative impacts of economic growth. As well, the world is too small now for the solution of social and environmental problems to be left to chance: with a human population of more than 7 billion, and difficult-to-identify feedback loops and time lags, no single body can anticipate or successfully regulate the world economy's adverse impacts. Yes, 'positive aggregate results' can result from individuals acting in our own interest. They might even be net positive results. But (1) that still implies a lot of negative results and (2) we'd do better to minimise negative results before they occur. 

This is what Social Policy Bonds could do. One of the great advantages of the bond approach is that we can encourage people to achieve social goals without anyone knowing in advance how they will do so. A subset of such goals would be the targeting for reduction of the negative impacts of economic growth however they arise. Investors in the bonds would then have incentives to scrutinise current and proposed private- or public- sector projects with a view to minimising their negative impacts. Taking a broad, long-term, global approach, we could, for example, aim to reduce disasters of any sort, without having to specify how or where they occur.
Under a Social Policy Bond regime, then, people would still be acting rationally and even viciously, but we'd be channelling such behaviour into the pursuit of society's well being. In short: giving greed a chance

08 January 2019

Climate change, war and celibacy

Why do wars happen? Why do crime rates go up and down? The answers to these and other complex social and environmental questions are many and varied. What about climate change? It appears that it is most probably caused by mankind's greenhouse gas emissions. But not definitely - and that uncertainty partly explains why, despite all the conferences, treaties, entreaties, agreements and commitments, our greenhouse gas emissions are at record levels.

I think we face these challenges using outdated thinking. For historical reasons, policymaking is almost entirely a top-down activity. Politicians and public servants see a problem, try to identify its causes, then decide what needs to be done about them. If they aren't certain what needs to be done, either they guess at the causes or ignore the problem. 'Ignoring' takes the usual costly bureaucratic forms: setting up bodies, forming committees, holding meetings, and generating worthy but useless reports and agreements.

The problem is that no single body can identify the causes of such problems as war or crime or even climate change, and then work on them in the ways that used to work on more obvious social and environmental problems. Our biggest and most urgent problems are too diverse, and their causes change to rapidly, for the old ways of making policy to address them adequately.

The question then becomes: do we need to identify a problem's root causes before we try to solve it?

John Michael Greer asks why celibacy fosters the long-term survival of monastic systems:
Perhaps celibacy works because it prevents sexual jealousies from spinning out of control, as they so often do in the hothouse environment of communal living. Perhaps celibacy works because pair bonds between lovers are the most potent source of the private loyalties that so often distract members of communal groups from their loyalty to the project as a whole. Perhaps celibacy works because all that creative energy has to go somewhere — the Shakers birthed an astonishing range of artistic and creative endeavors.... Perhaps it’s some other reason entirely. The point that needs to be kept in mind, though, is that in a monastic setting, celibacy works, and many other ways of managing human sexuality in that setting pretty reliably don’t. The question “does x happen?” is logically distinct from the question “why does x happen?” It’s possible to be utterly correct about the fact that something is the case while being just as utterly clueless about the reasons why it is the case. (My italics.) After Progress, John Michael Greer, 2015
So, do we really need to identify the causes of climate change or war or crime, before we try to eliminate them? I don't think we do (and, incidentally, I don't think we can, definitively).

I suggest that instead of opting, in effect, for inaction by sending people off on a fruitless, never-ending search for 'root causes', we take steps to reward the solution of these complex problems, and let a motivated coalition work out the most efficient ways of solving them, whether or not such ways have anything to do with root causes.

Social Policy Bonds are a way in which we can do this. The bonds would target outcomes, rather than the alleged means of achieving them. Instead of targeting climate change, they would target for reduction the negative impacts of adverse climate events on human, animal and plant life. Instead of trying (or pretending to try) to prevent conflict in Africa or the Middle East, a Social Policy Bond regime would target for reduction the numbers of people killed and made homeless in those regions and reward whoever achieves and sustains such reductions. Complex social and environmental problems require diverse, adaptive approaches for their solution. They don't require that we identify their real or mythical 'root causes' before doing anything. By contracting out the achievement of solutions to a motivated coalition of holders of Social Policy Bonds, we could avoid endless searches for nebulous root causes and instead devote our energies to finding solutions to the problems they create.

For more about my approach to climate change see other posts on this blog, or this essay. For more about my approach to achieving peace, follow this link.

01 January 2019

Social Policy Bonds: the outlook for 2019

After about thirty years in the public arena, how is the Social Policy Bond concept faring? Not that wondrously, to be frank. As far as I'm aware, no Social Policy Bonds as I conceived them have ever been issued. The Financial Times, though, does tell us that more than 100 Social Impact Bonds have been launched across 24 countries, raising $400m. SIBs are a 'lite' version of Social Policy Bonds. The main difference between them and Social Policy Bonds is that they are not tradeable which, in my view, greatly diminishes their scope and opens them up to favouritism, gaming and manipulation. I've had no involvement with SIBs and have written before in this blog (here, for instance), and more definitively here and here, about why I am ambivalent about them.

Nevertheless, via SIBs, the idea of rewarding better performance is making tiny inroads into the public sector; that is, into the achievement of social goals. This feature, so long a feature of the private sector, is now being deployed to help solve social problems, though in very limited circumstances. I'd be more optimistic if this small change were being used to do something other than favour existing bodies in pursuit of narrow goals, but I suppose we should be grateful that there are some steps, however tentative, in the right direction.

Frankly, I don't see much else to be positive about where policymaking is concerned. There's little in the way of constructive dialogue, and much in the way of Manichaean name-calling. Take immigration: it's at least arguable that immigration reduces wages and raises housing costs. It has benefits of courrse, also, but too often people trying to discuss the downsides are dismissed as xenophobes or worse. There's a genuine question too, over whether national governments should put the interests of their own citizens over those of would-be immigrants. But these questions can hardly be raised, such are our rancorous politics. The broader problem is that the determinants of the policies we make are determined primarily by ideology, emotion, personality, televisual footage, and sound-bites.

Anything except outcomes, in short. And that gives me grounds for tentative optimism. Our current ways will self destruct. They are unsustainable. Out of the rubble, it's possible - just - that we shall target and reward the achievement of social and environmental outcomes. I mean long-term outcomes that are meaningful to ordinary people, rather than the narrow short-term goals that characterise corporations, financial traders, billionaires and, these days, politicians. Such a trend is unlikely to begin in the year 2019, but it's possible. If it were to occur, then we might also give priority to achieving our goals cost-effectively. At that point Social Policy Bonds, in their full tradeability, could step onto the stage and at last begin to play their role.