Uncertainty, Lags and Nonlinearity: Challenges to Governance in a Turbulent World

Global financial, climate, energy, and food challenges exhibit similar characteristics - all emerge from systems exhibiting high levels of uncertainty, countless unknown unknowns, time lags, threshold effects, occasional chaotic behavior, and sometimes synchronized systemic failure (as we're now seeing in the financial system). In such systemic environments, standard "management" approaches to public policy and governance are severely handicapped. Specifically, systems with lots of uncertainty and inertia are notoriously hard to control: manager cannot effectively predict the system's future behavior, and they cannot quickly correct behavior they do not like. In the case of climate change, by the time policymakers find out that the climate dice have rolled against humankind, inertia could make conventional responses like carbon taxes and wind power inadequate. Planning humankind's response around what scientists currently think is the most likely outcome is therefore reckless. While we can hope for the best, we must lay plans to navigate the worst.