The most convincing argument I found for climate change comes not from scientific journals or long-written books on the climate crisis, but from a book that primarily deals with philosophy, statistics and economics.

The Black Swan: The Impacts of the Highly Improbable, written by Nassim Nicholas Taleb, deals with a class of rare, but highly consequential events; for instance, the banking collapse in 2008, and the 9/11 attack in 2001. Despite Taleb only mentioning briefly about the climate while spending the majority of the book dealing with consequences in economics and finances, his findings are rather alarming with regards to climate change. In breaking down the key ideas of Taleb’s book, I want to address and expand its implications on the climate, and why it demands more action than ever before.

Climate change is an Extremistan event.

First, a distinction between Extremistan and Mediocristan events:

Mediocristan events are events that are mostly predictable. They follow the famous Gaussian bell curve, and wide fluctuations are rarely known. For instance, it is impossible to find someone whose height is above 3 meters, or who weighs more than 500 kilograms. The extremes are not far away from the average. And most people fall within the middle of the curve, the average. So a singular tall person won’t topple over the change in the average height of 100 people. Similarly, a Mediocristan event is one that follows a bell curve, for instance, flipping a fair coin 50 times and chances of you getting 50 heads is 0.5⁵⁰ = 0.0000000000000008. These events are often found in the physical, or biological world, and are in the “safe” zones, where we need not worry about.

Extremistan events are the opposite: there can exist much larger fluctuations, and the impact of one large event can tower over many others. Imagine 99 average people standing in the stadium with Bill Gates. They will be, on average, a billionaire! In this case,

1. The average is not the middle, but at the very end of the curve.
2. One event can be larger than others in many orders of magnitude.
3. This means they can influence others to the extreme that the majority impacts become worthless.

We see this in other social aspects like book sales, scientific journals, or even market fluctuations. They are where the Black Swans reside, both the positive Black Swans (the ability to be richer than Bill Gates!) and negative ones (the market crashing overnight).

Figure 1: Graph on the left is a typical normal distribution, like a Mediocristan event, with most observations in the middle. The graph on the right is a power law distribution, mostly found in Extremistan events, where most observations are on the lower end and very few people on the higher value. Taken from link.

While it’s easy to dismiss the environment as Mediocristan, many environmental events are part of the Extremistan. Life on Earth is generally sustained with the exception of five major extinctions that wipe out 99.9% of organisms that has ever lived on Earth. Wildfires and floods are regular, but once in a while an extreme one can wipe out an entire town, or an entire country. Even the ongoing COVID-19 pandemic result from a mutation, another occurrence of nature changing it up. Our planet, as a complex tangled web of multiple levels of interactions, is full of Extremistan events, where a singular occurrence can balance out millions of other small ones. And that’s not good news for us.

Model predictions are unreliable.

Another problem with the Black Swan is they represent uncertainty — unknown unknown. By definition, we cannot know what that Black Swan is, or when it will come. Thus, no model can come close to predicting any changes that would come to shape our future. Think of the financial crisis in 2008, or the 9/11 attack — almost no one could have predicted such a change. And relying on the past is both unreliable and dangerous.

Taleb illustrates this problem of induction best with the Turkey story. Think of a turkey living in a cage and being fed every day. With each passing day, its confidence that it is living tomorrow will increase. Moreover, its trust for the human will increase. It will continue to rise until something unexpected happened — being killed on Thanksgiving. And believe it or not, we are all turkeys.

Figure 2: The story of a turkey. Taken from link.

What this story illustrates is, the past is not indicative of the future. We can have many instances to prove something true, but all it takes is one instance to prove it wrong. Induction is not reliable. Thus, using past models to predict future performances is not reliable. This means most model predictions have very, very limited predicting capacity.

Taleb mainly focuses on financial prediction models in his book, but I would argue this applies just as much to climate prediction model. Both represent a complex system that is similar to a black box, with many hidden connections and threads that we can never fully detangle. This means past performance is no where indicative of the future, and that is especially true for climate change model. What does this mean?

• Climate models that rely on the past cannot be 100% accurate. It is an estimation, and a poor one, at best.

Current climate models take into account records of climate in the past, and how the climate as a whole has transformed given such temperature change. Most predictions are based on what we know about Earth’s response millions of years ago, when carbon dioxide levels was around the same. However, we are adding carbon dioxide to the air at an unprecedented level, and we are changing the landscapes of the Earth and its species in order of magnitude. Thus, there is high uncertainty that the climate will respond in the same way.

• There might be missing links that cause further changes. We need to be preparing for the worst estimate, and perhaps even more.

All models so far are based on what we have already known about the climate. But there are still many other missing links. For instance, permafrost melting in the Arctic means releasing trapped carbon dioxide in the atmosphere and accelerating global warming further. And this is a positive feedback loop, where the hotter the temperature, the more melting, the more carbon dioxide and the hotter the temperature. Once it is set in motion, it’s hard to go back.

Current climate models, while do account for some forms of carbon cycle feedbacks, have not updated their result with the best model available, thus reducing the actual variations and uncertainty. Not to mention there can still be more feedback loops that scientists have yet to account for.

• Any models that deal with the indirect consequences of climate change are already underestimating their influences, and will continue to do so.

Climate change is tangled in so many aspects of our lives. It is directly responsible for the recent bushfire in Australia, due to drier climate, causing 1,558 homes to be destroyed and 7.9 million acres of forests to be burned. But it is also an indirect cause to the rise of Coronavirus, where death toll is at 200,000 and is on the rise, as higher temperature means pathogens that survive the heat can more easily infect people. Permafrost melting can release microbes that can be deadly towards humans, releasing another wave of disease. How many other missing links have we not identified yet? And how can we be sure that any model at all will be accurate?

The takeaway message here is not to ignore climate scientists. Rather, it is to be aware that perhaps our worst case scenario is not the worst yet, and we are probably underestimating the influences of climate change on all aspects of our lives. And that means we need to react, fast.

There is no Barbell Strategy our way out.

The conclusion most people have from Taleb’s Black Swan is the famous Barbell strategy: play it really, really safe 80–90% of the time, and for the remaining 10–20%, bet on something that can easily expose you to the positive Black Swan. For instance, work in a stable job for most of your days, but spend time on the weekend writing a novel. Or invest 80–90% of your stock in extremely safe treasury bills, and 10–20% to new start-ups with potential for exponential growth and payoff. Have a safety net, and expose yourself to the risks with the biggest payoffs.

Figure 3. The Barbell strategy, in the context of investment. Image taken from link.

But many people are also missing an important caveat. This is in dealing with positive Black Swans. Taleb’s strategy for dealing with negative Black Swan is to avoid them as much as possible. In the context of jobs, it means not to be in the insurance business that deals with extreme events. In the context of government, it means building a robust society that allows for unsustainable things to fail fast, instead of reaching a bubble where it would pop.

And this is what worries me the most. Unlike man-made crises, climate change is literally impossible to avoid. We are going to feel the impacts every step of the way, because we do not have capacity to avoid its consequences. The most we can do, and are trying to do, is to identify as many Black Swans as possible, and to prepare for them. But if we continue to be ignorant, there are looming dangers in every corner. And when a Black Swan hits, the impacts could be in order of magnitude.

Conclusion

2020 saw the novel Coronavirus, and with it the secondary and tertiary effects of borders closing, social distancing, job losses and, ironically, the rise of distrust and hate crime. Some may argue that Coronavirus is not a Black Swan (with warnings in as early as 2015 by major voices like Bill Gates), but it is certain that its secondary and tertiary effects consist of many novelties that we unprepared for. The same goes for climate change. We may be well aware of what 2 degree of warming does to the natural environment, but we are far from certain what it will do to humanity as a whole. And that is concerning.

After all this pessimistic thought, I feel compelled for a call to action. But the truth is I am also not sure, and still figuring out how to deal with this issue effectively. The most practical ways I can think of right now is to:

1. Work in research/government policies/companies dealing with these big, existential issues.
2. Donate to effective charities that are helping with climate change. Reforestation, in particular, has been discovered to have much larger impacts on climate regulations than previously thought. Create robustness in the system.
3. Getting involved with activism and advocacy. Be careful with where you spend your money, your time and your life. Be aware.
4. Enjoy life right now, because if our days are numbered, then we might as well make the best out of it while it lasts.