A trade-off that policymakers are constantly having to weigh is whether to act early – even when they don’t have all the information thy need, or wait for more complete information, but then act with a delayed response. This has always been true of policymaking, but it takes on a renewed meaning in the context of climate change and other sustainability-related issues.
The green quadrant is generally infeasible. The red box is likely to be undesirable; it is generally understood that a lack of action is not acceptable. The orange boxes are feasible and are where the choice for policymakers lie. Some policymakers, such as the Bank of England, have explicitly stated that they prefer to act early even with incomplete information. We think that’s sensible. Our view is that if a policymaker waits for more complete information, they might be disappointed; complete information about climate change is likely never to arise.
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