Tag: sunk costs

It Didn’t Work

Have you heard of the bygone’s principle? It’s also known as the sunk cost fallacy. You’ve spent money and/or invested time into something. You use that past investment as justification to continue moving forward – independent of current factors. The problem is that the previous investment is the past. Decision making should be based on the present and future. You made a real estate investment that hasn’t panned out. The smart move might be to dump it, take the loss, and figure out what’s next. It’s all too common to not want to let go and just admit it was a mistake. As humans we tend to focus on the past and as a result, hold on to bad investments, jobs, and relationships far longer than we should. The smart choice if the current or future scenario isn’t right anymore… is to move on.

With that in mind, I had a thought the other day. The US and generally Europe, have decided that the release of carbon dioxide via fossil fuels is enhancing the greenhouse effect and causing global warming. This warming is the cause of seemingly every problem we’re experiencing on the planet and is dooming us to some sort of terrifying apocalypse. Whether that’s true or not is a debate for another day. Let’s assume it’s true for the sake of discussion. With certain destruction of the planet looming, we’ve committed easily trillions of dollars to reduce carbon emissions.

As a society we’ve completely altered our way of life – regulations, limits on how/what factories can manufacture, fundamentally influencing the development of vehicles, and doing everything possible to end the fossil fuel industry. Regardless of thinking that all those things are good or bad, here’s my point… it hasn’t worked.

Think about it. Everything we’ve done for the last thirty-forty years to combat climate change hasn’t changed the amount of the carbon dioxide in the atmosphere one iota. Nadda. Nothing. Zero. We haven’t made the slightest dent. In fact, it keeps increasing at an exponential rate. So why do we keep doubling down, year, after year, after year on expensive strategies that don’t work?

Doesn’t that seem like the perfect example of the sunk cost fallacy to you? We know it hasn’t worked. It continues to not work. But we’ve invested so much… let’s just keep doing more of the same thing that’s not working. Why would we do that? It’s crazy.

I don’t know what the answer is, but banking everything on something that hasn’t modified anything in thirty years seems kind of loco to me. Maybe it’s time to stop the carbon reduction nonsense. Find a different approach. Heck, we can deploy Bill Gate’s idea to blot out the sun to cool the planet. Just kidding, let’s please not do that.

Perhaps we can stop trying to kill the fossil fuel industry and get fuel prices back in check. Maybe we can have incandescent light bulbs again. Heck, we could even kill the carbon offsets Ponzi schemes. Anything would be better than our current path.

It’s been a massive sunk cost. It’s going to sting a bit to abandon it. It’ll be hard to admit it didn’t work. Some egos will be bruised. There will be great gnashing of teeth. But the truth is, we’ve completely failed at controlling atmospheric carbon dioxide. Time to move forward and think differently.