There is a great post at the Council on Foreign Relations blog where by Michael Levi boils down global climate change in to two overarching unknowns: (1) extent of damage by an accumulation of greenhouse gases, and (2) an uncertainty around which policies, or set of policies, will succeed in reducing emissions. The danger, he writes, is that policies that make drastic, big bets face high risks of failure:

Focusing on particularly disruptive policies because they’re the only ones that have a chance to be “strong enough” to deal with an unexpectedly sensitive climate also raises the odds of political failure, and hence also increases the chances of ultimately being stuck with the status quo. Both of these tendencies tend to shift the distribution of likely climate outcomes toward the extremes: either things end up a lot better than they’re currently on course to turn out, or our prospects don’ [sic] improve much at.

I think this is one reason why we haven’t seen as much action from the Obama administration on climate change as many of thought back in the early months of his presidency. In addition to spending a lot of political capital on health care reform, there are big risks associated with climate change policies. Putting caps in place, or taxes on emissions, if properly designed (like in the case of NOx and SOx for acid rain) can be very effective. The flip side is that the policy could fail, or become largely ineffective (see this recent news article about the EU’s emission trading scheme).

Instead, we have seen international climate change talks evolve from a push for top down caps on emissions to letting individual countries and governments design their own reduction targets (see this previous post). The bets are smaller, but so are the risks (and chances for success, one could say).

P.S. I should make mention that the acid rain example is very different than global climate change. Acid rain is a regional issue stemming from NOx and SOx emissions from industrial plants, unlike global atmospheric carbon and greenhouse gas concentrations. Acid rain policies and impacts were largely regional, whereas climate change policies made domestically can have international effects (see this post for examples).