Don Pittis has reported on business for Radio Hong Kong, the BBC and the CBC. “Buy all the polar bears life-jackets,” said CBC commentator Kevin O’Leary, “It would be cheaper.”

Like many of his outrageous comments, it’s always hard to tell how much of what the Dragon’s Den dragon and co-host of the Lang & O’Leary Exchange says is just to maintain his cheeky image. But his smart-alec plan to prevent polar bears from drowning due to global warming gets us quickly to the nub of one of the hardest issues in climate change.

If climate change is so bad, why don't market forces kick in and solve the problem?

To try to understand, it is useful to look at a place where the market acted quickly and efficiently.

Recently the municipal government of my town announced it was raising the price of a ride on the bus and subway system. The little metal tokens that run the automatic entry devices were to become 25 cents more expensive on Jan. 3. But there was no need to wait for the official price rise — the market reaction was immediate. People stood in long lines at wickets and vending machines buying as many of the tokens as they could. Finally, running out of tokens and realizing they were losing millions of dollars in revenue, the Toronto Transit Commission halted token sales.

But before the city reacted, the rush to buy tokens was a perfect market phenomenon:

• It was a safe bet. There was almost no uncertainty over whether the city would withdraw the increase.
• It was imminent. The price rise was coming within a month.
• The return was known. Standing in line would earn you 25 cents per token purchased.
• The impact was close to home. People used subway tokens every day for their ride.
• Everyone was informed that the rise was coming. As well as being a major topic in the media, even non-media consumers could hardly miss the big lineups.

Had the rise in token prices been uncertain; had it been far in the future; had the cost increase been vague and undefined; had people been poorly informed the rise was coming; had it been for some other transit system that people did not use … If any of those things had been true, the market response would have been quite different.

The fascinating thing is that the actual savings were relatively small. Especially after the TTC's interim step of restricting sales to five tokens per person, the return for standing in a line was only $1.25.

Economics of climate change

As a market phenomenon, climate change could hardly be more different.

The impact of global warming is distant. We hear of thinning sea ice and failing glaciers. We hear of rising sea levels increasing flooding in places like Bangladesh. But those things are far away from most of our daily lives.

When it will hit us in a serious way is unknown. Despite the conviction by the huge majority of climate scientists that global warming is real and accelerating, and that humans are creating it, most admit there is real uncertainty over how quickly it will happen and how damaging it will be.

People are very poorly informed. Even if the scientists are as certain as they can be, the message may not be getting through. Sarah Palin makes headlines saying the concept is just a leftist plot. And a media search of the internet shows a widespread view that climate change is bunk perpetrated by a bunch of worry-warts trying to overthrow the free world.

As Desmogblog's James Hoggan and Richard Littlemore say in their book Climate Cover-up, one of the key strategies of companies who would be hurt by climate change was to create uncertainty as to whether it was true. It appears they have been successful. While the release of the climategate emails did nothing to disprove the facts of climate change, blanket media coverage added to a mood of uncertainty.

But climate change is a special case in other ways as well.

Unlike the change in the price of tokens, natural systems are forgiving. Change happens slowly and gradually. At least at first.

The Grand Banks cod population is an interesting example. It was easy to dismiss the warning of fisheries scientists for years because the fishing boats continued to catch lots of fish. Then suddenly, the fish were gone.

Something that affects our entire planet is the ultimate public resource. To save that resource requires a different kind of market, one where the popular will demands our governments act.

One argument is that public ownership of resources is the problem. Called the "tragedy of the commons," the theory says that when no single person owns a natural resource, everyone uses it to destruction. That is because using less provides well-meaning individuals with no benefit. Anything you save will be used up by others.

The parallels with environmental pollution and climate change are obvious.

Some say the solution to the tragedy of the commons is to privatize natural resources. In a previous career studying forestry, I saw this method being tried and not working as well as hoped. That is because of the tyranny of interest rates. Even if you own the land, planting trees is expensive. The money it cost, plus the interest on that money for 100 years waiting for the trees to grow, wouldn't pay for the expected value of the mature trees. It was easy to find more lucrative places to put your money.

But even if privatizing did work in some cases, it is hard to imagine it being a solution in the case of the planet's climate. Could we sell it to Halliburton?

Something that affects our entire planet is the ultimate public resource. To save that resource requires a different kind of market, one where the popular will demands our governments act. This is what is supposed to be going on in Copenhagen. Of course it was also what was supposed to be happening at Kyoto.

We humans seem ill-equipped to solve such future, distant and uncertain crises. Most of us would rather the polar bear was not wiped from this Earth. But what would we be willing to give up to prevent it? What is the price of a polar bear? What is the price of an eternity without polar bears?

I'm afraid that no matter how much we paid for them, life-jackets wouldn't help. But of course polar bears, just like passenger pigeons and dodos before them, are just indicators. It is not the polar bears but the polar bears' world that is dying.

If our governments have the strength and wisdom, they can harness the market.

I just read the book The Road by Cormac McCarthy, a novel (and now film) set in a world where not just the polar bears, but the trees, the birds and most of the humans are gone. It is a mythical anti-utopia that we hope will never happen.

But even travelling part-way down that road creates costs that, if we could see them, if we could feel them up close, if they were as tangible as a 25-cent savings on a subway token, we would do anything to prevent.

Markets are wonderful things. A market is a tool for sharing up scarce resources.

If our governments have the strength and wisdom, they can harness the market. They can change those huge long-term costs into small short-term costs. Costs that are close to home, well-known, of known quantity, certain and immediate.

If they can make global warming more like subway tokens, the miracle of the market will intervene and solve our problems.