Placing trillion-dollar bets? How much would you pay to shave the odds?

Get used to trillion-dollar figures. Those are the numbers that matter these days. A billion dollars? A drop in the bucket. A million dollars? That’s rapidly becoming a figure for individual household wealth. These days, the world’s gross domestic product (GDP) is some $60 trillion dollars per year, and growing at a 5% annual clip.

What does that mean? It means if you’re 25 years old, by the time you’re my age, the world’s GDP might be $480 trillion. And by the time my grandchildren are my age, and writing their own late 21st-century equivalent of a blog, the world’s GDP could hit one quadrillion dollars.

It means people will no longer be using pennies, or even leaving them in little cups by cash registers.

So, looking ahead, when we start thinking about our big-ticket investments – what we’ll be spending on the infrastructure to ensure an uninterruptible supply of drinkable water; on the agricultural sector that provides our food and fiber; on energy; on IT; on transportation; on protecting the environment, for periods of decades – all these figures will be in the many trillions of dollars. And remember, these huge investments had better be providing a significant return. Otherwise we won’t even squeak by, because we’re increasingly a zero-margin world.

But here’s the reality. For smaller sums, on simpler problems and shorter-term, perhaps running into the millions of dollars over weeks or months, we’re able to calculate returns and risks relatively precisely. In this realm, we’re investing.

By contrast, when it comes to the larger amounts, the trillions of dollars, in more complex arenas and for the longer-term, extending out to decades, we’re almost completely in the dark when it comes to risks and expected rates of return. In this more consequential realm, the realm that matters, we’re speculating, gambling, more than likely frittering money away. That devastating couple of years from late 2008 to 2010; the worst depression since the 1930’s? A hiccup compared with what could lie ahead.

And furthermore, we don’t have much choice about whether to take each gamble. If we want food, water, energy, and shelter for 7-9 billion people, if we want a planet that’s livable as we define that term today, then we have to place these bets, and lots of them, and we’d better be right. We can’t ask the real world to put things on hold for a few decades while we enjoy our virtual world (the world of the industrial revolution), and our newly emerging virtual world within that virtual world, the world of IT.

No, we’re being forced to ante up, to decide when to hold ‘em, and when to fold ‘em, to Nature’s rhythm, and place bets matching Nature’s trillion-dollar stakes.

Perhaps we should be a bit more purposeful about improving our odds, taking a look at Nature’s cards.

What would this look like? Well for one thing – and we’ve addressed this for months – we should be more focused on realizing the societal benefit from the knowledge and understanding about the Earth system that we already possess. And – as we’ve said for months, we’re fortunate to have four powerful tools for such work. The first three? Policy framework(s) for dealing with the Earth as resource, victim, and threat; social networking and IT for creating and sustaining catalytic, viral approaches to problem-solving; and leadership that can make such efforts effective. Today and tomorrow we’re focusing on the fourth tool: a foundation of knowledge and understanding. This knowledge and understanding provides insight as to how the Earth works (the natural sciences), as well as to human strengths and limitations (the social sciences), as both individuals and groups. It is the essential starting point for winning the real world’s poker game.

The good news? Thanks to concerted effort by hundreds of thousands of scientists and engineers over the past century, we have a storehouse of facts and information we didn’t have even a few decades ago. We can see some of the real world’s cards. Moreover, those same scientists and engineers have many more tools, and improvements to existing tools, in mind. All they need to the societal will (as in: you and me, ponying up the funding) to make this potential a reality – to build the satellite systems and other remote sensing instruments of greater diagnostic power and global reach; to tame the petaflop computers to run models that don’t just simulate the Earth’s possible behavior but predict the Earth’s actual behavior; to harness the new science and technology to social benefit as soon as it comes on line. Societal expenditures in this sector aren’t a gamble; they’re an investment, promising a manyfold return.

A few thousand of these natural and social scientists will be convening in Seattle in just a few days, at the AMS Annual Meeting. Remember all that press a week ago about the Consumer Electronics Show in Las Vegas? The new tablets, HDTV’s, laptops, smartphones and more? Seattle’s not Vegas, but AMS Annual Meeting attendees, interested in taking the pulse of the planet, are going to see cool stuff. New satellite sensors and platforms. New ways to squeeze more information out of radars. Decision-support systems that are scary smart. And more is coming on-line every month.

The bad news? That corpus of information, so much greater than we’ve ever known, and all those new tools, aren’t up to the task of addressing today’s needs, let alone the more complex, urgent needs of tomorrow. Nature’s calling our bluff worldwide, with respect to clean air and water, with respect to land use and habitat, with regard to renewable energy, with regard to tornadoes, hurricanes, ice storms, and other hazards, and more. If we are to enjoy any hope of a brighter future – to start winning more gambles than we lose, and winning consistently – we have to get Nature to show more of her hand, and show it sooner. We’ve also got to improve our hand, make a savvier draw.

Game on! Time to ante up the next trillion dollars. Do you feel lucky?

More over the coming days.

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One Response to Placing trillion-dollar bets? How much would you pay to shave the odds?

  1. Pingback: Playing poker against the real world? Definitely lose-lose. | Living on the Real World

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