Saturday, July 14, 2012

How Will Mountain Climbers Adapt to Climate Change?

The NY Times reports that climbing major mountains has become even more challenging in recent years due to increasingly volatile weather patterns.   How can free markets help mountain climbers to cope with this "new normal"?   It would be a horrible shame if more mountain climbers die because they are not bayesian updaters who recognize that the objective probability of death on a climb has increased.    Life insurance companies would have the right incentive to not issue policies for people who climb or to charge them a much higher premium.  This would signal to the climbers that there are higher risks associated with their old hobby.

UPDATE:   Justin Ross has alerted me that scholars have documented that local government intervention can impede this adjustment process. If local governments, due to eco-tourism reasons, invest in search and rescue teams then the tourists who seek to climb the local hill will continue to show up.  In fact, as Justin discusses it could increase the number of mountain climbers (the lulling effect) to the point where deaths on the mountain increase because of government intervention in "climate proofing" the climb.

Here is his quote:

"You might be interested in the reverse case, for which there was at least some empirical work done on this by JR Clark and Dwight Lee, published in the EEJ:
In their paper, they show that when the community around Mount McKinley started a public rescue operation, it lowered the probability that someone would die from a climbing attempt. Subsequently, the number of climbers increased enough that the number of deaths on the mountain also increased, despite a lowering probability of death.  They frame this in terms of a Laffer curve.
If climbers were sensitive to the probability of being rescued by local government, I would reason that they will respond to gradually declining weather conditions."

In this age of cheap air travel, there are many international eco-tourism possibilities.  For those mountain climbers seeking "risk" and "danger" , they could choose to go ocean diving as their new challenge.   This raises the broad issue of "substitutability".  Intuitively, if a Mercedes lover can't buy such a car anymore, would she be roughly equally happy to buy a BMW or Lexus? If the answer for mountain climbers is that "yes" there are substitute thrills for them to mountain climbing, then capitalism offers the climbers alternatives that are less affected by climate change.

If the Mountain Climbers insist on continuing to go up into the "thin air", then the Mountain's "safe climate days" could be identified and similar to a congestion charge a fee can be charged for climbing the mountain on those safe days.   This charge would reduce congestion on the mountain and could be used to generate enough revenue to invest in rescue helicopters and other protection strategies.   I agree that poor people who love to climb mountains would "suffer" under my pricing plan but do you know any of these folks? I would guess that they are Ph.D. students and they should be in the library anyway.   UPDATE:   Justin's point above should be mentioned again that this could create a moral hazard effect of having more climbers but this could be offset by raising the fee charged to climb the mountain. In the example that Justin gives above, note that the local tax payers (not the mountain climbers) are paying for their own search and rescue.

So, the NY Times has written a whole article about Mountain Climber quality of life but didn't bother to talk about any of these issues.  This blog post offers some insights into why the climate scientists need the social scientists more than they think!

The big point I want my loyal readers to think about is the following.   Yes, climate change is going to rock the boat but for any story the NY Times writes --- capitalism will respond to the challenge. When there are numerous adjustment margins, the total cost of the shock will be small as diverse individuals will choose that path that is best for them (i.e the 3 examples I gave above).  This is the "small ball" of climate change adaptation.   All of this is written down in Climatopolis!