Friday, September 01, 2006

But Don’t Forget About the Small Stuff

Readings in Complexity
By J.B. Ruhl
Post 3
September 1, 2006

Dan FarberThis post reviews an article by Jurisdynamics’ own Dan Farber, Probabilities Behaving Badly: Complexity Theory and Environmental Uncertainty, 37 UC Davis L. Rev. 145 (2003), for two purposes. First, it’s a great article and if you have any interest in the subject matter of Jurisdynamics you should read it. Second, it opens the door to some topics I’d like to take up in my next few posts—cumulative impacts, nk systems, and system failure.

Dan has given Jurisdynamics readers a taste of what is found in the article through his series on disasters and explanation of power law properties. The article provides a thorough explanation of power law properties in general, then gets to the practical point that “power laws challenge us to…give up the view of the world as consisting of typical events with infrequent random variations. Instead, we must accept that there is no ‘average’ event. There are simply many small ones, a few larger ones, and occasionally extremely large ones.” Dan then uses this idea to provide fresh perspectives on the three main instruments environmental law has used to plan for and manage against uncertainty and disasters—risk assessment (and cost-benefit analysis), worst case scenario analysis, and the precautionary principle. In each case, of course, the power law property of the complex systems the law is attempting to regulate or manage suggests that we take conservative approaches. In particular, Dan argues, insurance against the “nasty surprises” ought to play a significant role in policy design, such that “when the problem involves broad societal impacts that cannot be easily handled by public or private risk-sharing mechanisms, it is worth making substantial investments to hedge against the possibility of disaster.” Also, as a matter of day-to-day policy implementation, Dan argues that complexity theory and its illumination of power law properties “provides strong arguments for adaptive management, which involves careful monitoring of systems and repeated interventions as they evolve.” Perhaps the most impressive attribute of the article is that it spans a mere 28 pages, but accomplishes more than what is often achieved in the laborious 100-page, 500-footnote law review article so often found in legal scholarship.

But here’s the catch: as important as Dan’s focus on power laws is to disaster management policy, I worry that the focus on disasters in general, which 9/11 and Katrina undoubtedly have amplified in the public mind, will lead us to place too much emphasis on the thin part of the power law curve for purposes of policy design. Many of the most persistent, intractable environmental (and other social) problems are the result of the cumulative impacts of events falling on the thick part of the power law curve—the small stuff, so to speak. And some of what we might characterize as disasters are triggered when the cumulative effects of the small stuff pile up past the tipping point.

A classic example is Gulf Hypoxia—the intense buildup of hypoxic "dead zone"conditions in the Gulf of Mexico resulting from abnormally high discharge of nutrients from the Mississippi River caused not by any “nasty surprise,” but rather by runoff from countless farms, residential lawns, and municipal wastewater plants throughout a watershed covering about 40 percent of the contiguous 48 states. It’s a disaster in the Gulf caused by a lot of small stuff happening upstream.

So, it's important to keep track of both ends of the power law curve--to expect, rather than be surprised by, the appearance of the 1000-pound cat, but also to appreciate that if you gather enough 1-pound cats, they can make a mess of things too. To complement Dan’s coverage of thin-tail disasters, in the next few posts I’ll explore how the small stuff matters too.


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