The impasse on climate change is as clogged up as our petrol-packed roads

Boris Johnson is usually a superb communicator. But after the last few days of the G20 and Cop26, he is not currently on his best of form.

First of all, we have the farce of world leaders first gathering in Rome and then flying to Glasgow. For a summit on climate change and curbing emissions. Don’t do as I do, just jolly well do as I say.

More seriously, the Prime Minister has warned us that it is now “one minute to midnight” in the race to prevent global heating from surpassing a critical threshold.

A perfectly reasonable response to this, especially if no major agreement is reached at Cop26, is a shrug of the shoulders. If China and India are not playing ball, and we are so close to a point where nothing can be done, why bother?

In fact, there already is a Doomsday Clock which has been ticking since 1947. Developed by atomic scientists, it was originally meant to show the risks of a nuclear war.

As you would imagine, its movements get a lot of publicity. The clock was set at seven minutes to midnight from the outset and despite its constant proximity to the witching hour, there has never been a huge surge of public opinion demanding the scrapping of nuclear weapons. Behaviour has hardly been influenced by it at all.

We can conclude that scientists are not very effective at getting people to change their ways. They are good at science, but not in understanding human behaviour and psychology.

Lord Stern – he of the famous Stern report on climate change – has recently complained that, in the context of climate change, people are not behaving well at all.  

Specifically, they are giving too much weight to the here-and-now. They are paying far too little attention to the wellbeing of those who will be living in the distant future.

We should make sacrifices now to benefit those who may not even have yet been born. This dichotomy was the premise of the Queen’s intervention at the conference, as well. She said: “What leaders do for their countries today is government and politics, but what they do for the people of tomorrow, that is statesmanship.

But there is a fundamental flaw: this idealised way of how humans ought to behave runs directly contrary to how they behave in the real world. It is the key test for Boris Johnson as he stands at the podium and demands change: people say they care about climate change, they just won’t do anything about it, let alone pay for it out of their own pocket.

A key development in economics over the past twenty years or so has been a new perspective on how people value costs and benefits today compared to those in the future.

Economists have known for a very long time that individuals give more weight to the present than they do to the future. A cost of, say, £100 incurred today has to generate a benefit of more than £100 in the future to make it worthwhile.

The scientific advance goes under the forbidding title of “hyperbolic discounting”.  In practice, it means that people attach even more value to costs and benefits now compared to the future than economists used to think they did.

The concept has strong empirical support. The seemingly esoteric theoretical concept poses fundamental problems for politicians confronting climate change.  

To do anything, costs have to be incurred now.  And voters do not attach much real weight to benefits which might be generated years into the future.

As published in City AM Wednesday 3rd November 2021
Paul Ormerod
Image: Flickr

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Alex O’Byrne, Associate at Volterra, is an experienced economic consultant specialising in economic, health and social impact, economic strategy, project appraisal and socio-economic planning matters.

Alex has led the socio-economic and health assessments of some of the most high profile developments across the UK, including Battersea Power Station, Olympia London, London Resort, MSG Sphere and Westfield. He has significant experience inputting to EIAs and s106 discussions as well as drafting economic statements, employment and skills strategies and affordable workspace strategies.

Alex is also experienced at economic appraisal for infrastructure. He was project manager of the economic appraisal for the City Centre to Mangere Light Rail in Auckland. He also led the economic and financial appraisals of the third tranche of the Transport Access Program for Transport for New South Wales, in which Alex developed and employed innovative methodological approaches to better capture benefits for individuals with reduced mobility.

He is interested in the limitations of current appraisal methodologies and ways of improving economic and health analysis to ensure it is accessible to as many people as possible. To this end, Alex recognises the importance of transparent and simple to understand analysis and ensuring all work is supported by a robust narrative.

Alex holds a BSc (Hons) in Economics from the University of Manchester and he was a member of the first cohort of the Mayor’s Infrastructure Young Professionals Panel.


Senior Partner

t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.