Monetizing the Climate Gamble

In his article, IPCC: a gamble on earth system failure, David Spratt, Research Coordinator, Breakthrough National Center for Climate Restoration (Melbourne), says, “The fact that the IPCC incorporates in its core business risks of failure to the Earth system and to human civilization that we would not accept in our own lives raises fundamental questions about the efficacy of the whole IPCC project. If low risks of failure are taken as a starting point, “net zero 2050” becomes not a soundly based policy aim, but an appalling gamble with existential risk.”

“Another fundamental problem is the approach to risk. IPCC carbon budgets regularly include risks of failure (overshooting the target) of 33% or 50%, that is, a one-in-two or one-in-three risk of failure. Thus a 2-degree carbon budget with a 50% chance actually has a 10% risk of ending up with 4 degrees of warming, which is incompatible with the maintenance of human civilization,” Spratt says.

“These are risks of failure that no government or person would agree to in any other aspect of life — whether it be buildings and bridges, safety fences or car seats — where acceptable failure rates are tiny fractions of one per cent. The fact that the IPCC incorporates in its core business risks of failure to the Earth system and to human civilization that we would not accept in our own lives raises fundamental questions about the efficacy of the whole IPCC project,” he warns.

Perhaps it is time for taking a high risk of failure, as in a slim chance of winning a lottery, to produce a real chance of succeeding at saving the Earth system and human civilization.

The largest lottery is the Spanish Christmas Lottery, El Gordo, which was been held since 1812 when it was introduced as a means of raising funds for Spanish troops fighting against Napoleon.

This year El Gordo meted out $2.8 billion in prize money. With a biggest prize of $436,000.

On average, every Spaniard spends about $85 a year on these tickets for a total of about $4 billion in sales.

Americans spent $108 billion on lottery tickets in 2022, about $318 per person, and have only a 1 in 292 million chance of every winning one of the largest jackpots. The largest of which was $2.04 billion won by a Californian on the Powerball in 2022.

According to Princeton University, The 2022 Inflation Reduction Act (IRA), committed nearly $400 billion to mitigating climate change through 2035. Which is 28% of what Americans are likely to spend on lottery tickets over the same time.   

The majority of lottery funds — around 50–60% — goes to the winners. Commissions to sellers account for another 5% of the lottery revenues and about 10% goes toward administrative costs and overhead. So, if all $108 billion of US lottery sales were committed to climate mitigation, this would amount to about $27 billion a year. Or slightly less than was committed by the IRA.

But only  69% of Americans believe global warming is real, and every state has its own ideas about where lottery proceeds should go, plus the outcome of the 2024 Presidential election is a mystery and potentially fraught for the environment.

But about three-quarters of the Asia-Pacific region, about 3 billion people, are fossil fuel price takers, as well as subject to climate risks and would be winners of a climate lottery, the proceeds of which would go to reducing the cost of the energy they consume as well as mitigating climate change. Notwithstanding the fact vast majority of them would never cash a lottery ticket.

In view of the diverse nature of the population of the Asia-Pacific region, a country like Singapore, which is listed as one the top five countries in terms of least corruption might be an ideal host for a lottery that would monetize a climate solution.