5 COGNITIVE BIASES IN CLIMATE RISK MANAGEMENT
Our brains use shortcuts to help us make decisions. Sometimes called ‘cognitive biases,’ these shortcuts are essential for making quick decisions such as deciding to swerve to avoid a car accident. However, these automatic judgements can also lead to bad decision- making when we rely too heavily on intuition and use defective reasoning. This infographic series explains 5 common shortcuts, how they play a role in decision-making related to climate risk management, and strategies to outsmart our tendency to use shortcuts.
Roop Singh and Rebeka Ryvola, Red Cross Red Crescent Climate Centre 5 COGNITIVE BIASES IN CLIMATE RISK MANAGEMENT 1 THE PLANNING FALLACY ‘Getting our new car is going to be so easy!’
What is it? What does it look What can you do like in climate risk to outsmart this management? cognitive bias?
The Planning Fallacy is the tendency The Planning Fallacy inevitably Data can be an important ally in to be confident that a future task will shows up in relation to risks that avoiding falling into the Planning proceed as planned, even while may delay the implementation of Fallacy. Reference class forecasting knowing that the vast majority of climate change adaptation and is a method that uses data on past similar tasks have encountered development projects. A drought projects to more accurately predict challenges and have involved adaptation intervention may not the outcomes of future projects, underestimates of the time needed seriously consider or plan for the therefore circumventing errors in for completion. It arises when possibility that drought will occur human judgement. It involves people take on a risky task or during the lifetime of the project, 1. establishing a ‘reference class’ project—setting up an early warning even while understanding the high of similar, past projects, system, delivering food aid, working incidence of drought in the region in conflict-affected areas—confident that prompted the intervention in 2. observing the range of possible of a best case scenario without the first place. This tendency to outcomes, including those that seriously considering the worst ignore seemingly obvious risks occur most often and case scenario. often leads to foreseeable delays 3. comparing the specific project to implementation and may We can see examples of the to the distribution of reference undermine the ability of projects Planning Fallacy throughout history. projects to understand the most ➊ to deliver on key adaptation A belief that current plans are likely outcome outcomes. realistic alongside knowledge that A second method simply entails most previous predictions have ➋ getting a second opinion from been overly optimistic is someone who is not involved with commonplace in large construction the project but who has experience ➌ projects. The Sydney Opera house in implementing similar projects. was originally forecast to be Since it is not ‘their project’, this completed early in 1963 at a cost of ➍ person is more likely to provide an $7 million, but in the end a scaled- ‘outside view’ that more accurately down version opened 10 years later, predicts the costs or the time it will ➎ in 1973, at a cost of $102 million. take to complete a project. 5 COGNITIVE BIASES IN CLIMATE RISK MANAGEMENT 2 THE COMMITMENT HEURISTIC ‘But we have to finish the irrigation system since we’ve invested so much into it!’
What is it? What does it look What can you do like in climate risk to outsmart this management? cognitive bias?
The Commitment Heuristic is the Local-level climate change The Commitment Heuristic can be tendency to continue investing in a adaptation projects are often avoided through putting in place decision even if there is new testing innovative ideas that require systematic decision points, which evidence that suggests that the the ability to ‘fail fast’—that is, by entail reviewing whether an cost of continuing outweighs the abandoning ideas that don’t work investment is still worthwhile. As expected benefit. Investing time, in order to be able to test new part of the decision point, you can energy and resources into a project ideas. The Commitment Heuristic create a checklist of criteria that a can raise people’s confidence in can make it difficult for project must meet in order to still the project itself and can make organisations to truly fail fast be worth investing in. If the project changing course very difficult. In enough so they can test variants of doesn’t meet the criteria, it should part, this occurs because people an idea during a project’s duration. be discontinued. Keep in mind that, tend to have a much stronger This often results in wasted time, while sticking to the checklist may preference for avoiding losses than and commitment to an idea that be difficult, instituting its use as ➊ for acquiring gains. By continuing ultimately doesn’t work. policy (instead of relying on ad hoc the investment, people want to decision-making, which is avoid short-term negative feelings susceptible to mental shortcuts) ➋ associated with stopping a project can help systematically reduce bad in which a significant investment decisions. ➌ was made. Another option is to hand off Buying a used car for $1,000 and decisions on whether to commit ➍ then spending double that amount more resources to a new decision- on repairs in the 12 months maker, such as a colleague or following the purchase is an manager with less stake in the ➎ example of escalating commitment. decision. 5 COGNITIVE BIASES IN CLIMATE RISK MANAGEMENT 3 THE AVAILABILITY HEURISTIC “It will be like the 1997 floods all over again!!”
What is it?
The Availability Heuristic is a mental shortcut whereby we guess the frequency of an event What can you do based on how easily we are able to recall past examples of such an event. We intuitively What does it look like in to outsmart this think the things we remember are more likely climate risk management? cognitive bias? to happen again and are thus more important. In addition, vivid, easily imagined The Availability Heuristic has many When making important but uncommon events are weighted more in implications for climate risk management, decisions about managing our brains, particularly if they are highly particularly through its ability to distort risk climate risks, it’s important to publicised. This can distort risk perception perception. An accurate understanding of rely on data, when it is and may cause people to worry about the risks associated with extreme weather events available, rather than memory wrong risks—those that are statistically unlikely now and in the future is critical to any effort or personal accounts alone. but vividly covered in media rather than those to adequately adapt to climate change. For Data on the occurrence of that are common and not considered example, when people are asked to various climate hazards can newsworthy. evacuate during a hurricane, they are less often be obtained through In East Africa, many people remember the likely to do so if they have no readily the national hydro- 1997–1998 El Niño event, which brought available memory of the last hurricane. This meteorological service. An devastating flooding to many countries in the was the case in 2008 in Texas, when people assessment of how risks will region. People’s homes and livelihoods were refused to evacuate because public change in the future at the destroyed and many people died, resulting in perception was that a Category 2 hurricane regional scale is provided in ➊ trauma for those who lived in the region. like Ike was not dangerous. The hurricane the Intergovernmental Panel When people who experienced the 1997– resulted in 113 deaths in the United States on Climate Change (IPCC) 1998 El Niño event hear that another and $38 billion in damages. assessment reports. ➋ potential El Niño event is forecast, there is a At the organisational level, this mental Furthermore, extreme event tendency to assume the same impacts will shortcut can also come in to play when attribution studies can help arise again. However, scientifically, we know deciding on what risk a climate adaptation quantify the risks of particular ➌ that each El Niño event is different—and, in project should focus on. Assessments extreme events, provide the fact, the increased rainfall can even be a good based on community members’ memories actual frequency of an ➍ thing for some arid regions. In this case, the of risks may be unintentionally biased extreme event and explain Availability Heuristic may lead people and towards recent events, instead of providing how the frequency is governments to over-prepare for a risk that an objective perspective on the risks most expected to change as a ➎ may not actually be as high as perceived. likely to affect people now and in the future. result of climate change. 5 COGNITIVE BIASES IN CLIMATE RISK MANAGEMENT 4 THE OPTIMISM BIAS “I don’t feel old! A quick game won’t hurt.”
What is it? What does it look What can you do like in climate risk to outsmart this management? cognitive bias?
The Optimism Bias occurs when People often exhibit Optimism Bias Optimism Bias can be difficult to people perceive that they are at a during heat waves. Even if they reduce in individuals, but studies lower risk than others of know that heat waves can be find that asking individuals to think experiencing a negative event. deadly, they often don’t think they about themselves relative to other Even if people have information themselves will be affected. For people can help. When individuals about a risk, and that information example, elderly people with were asked to make comparisons says they are at a high risk, they are knowledge of the relationship between themselves and close often overly optimistic and think, between illness and vulnerability to friends, they did not exhibit ‘It’ll never happen to me.’ The the effects of heat do not apply this Optimism Bias when estimating the Optimism Bias is more likely to knowledge to themselves. In a likelihood of a negative event occur if the negative event is 2009 study of elderly people, only occurring. Similar to the Planning perceived as unlikely. If, for a minority of respondents were Fallacy, it is important to take an ➊ example, a person believes that aware that their own medical ‘outside view’ by seeking additional dying of lung cancer is very rare, conditions meant they were perspectives. A good way of doing he or she is more likely to be considered vulnerable to heat, or this is through an exercise called ➋ unrealistically optimistic about that their prescribed medications ‘prospective hindsight’, in which the risks. might increase the risk of adverse you imagine your undertaking has effects during hot weather. This failed and then identify all of the ➌ mental shortcut can also show up at possible ways it could have done the organisational level and is often so. This exercise helps people ➍ linked to the Planning Fallacy, in identify possible risks in their plans which we perceive that ‘our tasks’ that may not come to mind are less likely than ‘other tasks’ to otherwise. ➎ be affected by risk factors. 5 COGNITIVE BIASES IN CLIMATE RISK MANAGEMENT 5 THE SINGLE ACTION BIAS ‘Our magnificent new grove will help solve climate change!’
What is it? What does it look What can you do like in climate risk to outsmart this management? cognitive bias?
The Single Action Bias occurs when In climate change adaptation Acknowledging and being aware individuals take only one action to projects also, it easy to fall prey to of Single Action Bias is an respond to a threat, even when it Single Action Bias by promoting important first step. Another step to provides only incremental risk one intervention to reduce the discourage Single Action Bias is to reduction and may not be the most impact of a particular threat. For change the decision-making effective option. People often take example, a project may focus on environment, thereby making it no further action, presumably developing an early warning easier for people to see the range because the first action succeeded system for floods that are likely to of possible actions and to take in reducing their feeling of worry become more frequent with more than one action. For example, or vulnerability. climate change, but it may not instead of offering one adaptation address other factors that option, as simply a ‘yes or no’ For example, a person may choose contribute to flood impacts. For choice, we can instead offer a to recycle and think they have example, deforestation in a nearby checklist of good options, with ‘done their bit’ to reduce climate region may be contributing to people encouraged to engage in change. At the same time, the increased exposure to flooding. as many as possible. In addition, person may make other choices Local communities may also lack when working with groups, use of a like choosing to fly, eat meat or resources to take appropriate problem/solution tree analysis can drive an SUV—all actions that action based on the early warning help people see the multiple ➊ contribute to climate change. (such as a place to store food to causes and effects of a problem, as protect it from floodwater). In this well as potential solutions. ➋ case, we are failing to address the vulnerability and exposure factors that increase flood risk, even ➌ though we may feel like we’ve done ‘enough’ to manage a particular risk, and the cumulative ➍ result entails no significant increase in the resilience of people to that ➎ particular risk. 5 COGNITIVE BIASES IN CLIMATE RISK MANAGEMENT REFERENCES
Abrahamson, V., Wolf, J., Lorenzoni, I., Gunia, B. C., Sivanathan, N. and Galinsky, Shome, D. and Marx, S. (2009) The Fenn, B., Kovats, S., Wilkinson, P., Adger, A. D. (2009) ‘Vicarious entrapment: your psychology of climate change W. N. and Raine, R. (2009) ‘Perceptions of sunk costs, my escalation of communication: a guide for scientists, heatwave risks to health: interview-based commitment’ Journal of Experimental journalists, educators, political aides, and study of older people in London and Social Psychology 45(6): 1238–1244. the interested public. New York: CRED. Norwich, UK’ Journal of Public Health Available at https://briangunia.files. Available at http://guide.cred.columbia. 31(1): 119–126. Available at https://doi. wordpress.com/2011/10/gunia- edu/pdfs/CREDguide_full-res.pdf org/10.1093/pubmed/fdn102 sivanathan-galinsky-2009.pdf
Buehler, Roger & Griffin, Dale & Ross, Flyvbjerg, B. (2006) ‘From Nobel Prize to Michael. (1994). Exploring the “Planning project management: getting risks right’ Fallacy”: Why People Underestimate Project Management Journal 37(3): 5–15. Their Task Completion Times. Journal of Available at SSRN https://ssrn.com/ Personality and Social Psychology. 67. abstract=2238013 366-381. 10.1037/0022-3514.67.3.366.
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