Instead Of Pledging To Change The World, Pledge To Change Prediction Markets


In April, Joe Biden pledged to halve US emissions (from their 2005 max) by 2030.

This is nice, but I can't help but remember eg Australia's 2009 Copenhagen summit pledge to decrease emissions 5% by 2020 (in fact, they increased 17%). Or Brazil's pledge at the same summit to cut emissions 38% by 2020 (in fact, they increased 45%). Or Canada's pledge for -20% (they got +1%). I'm not cherry-picking bad actors here, I'm just going through the alphabet (pledges source, outcomes source) . For that matter, what about George W. Bush's pledge to return Americans to the moon by 2020?

All of these pledges have one thing in common - they expire long after the relevant officials are out of power (and in Biden's case, probably dead). As hard as it is to hold politicians accountable in normal situations, it's even worse here. Sure enough, prediction aggregator Metaculus shows that forecasters only give a 15% chance that we reach Biden's emissions target by 2030.

What if instead of pledging anything about emissions, Biden pledged to shift the prediction aggregator?

No, seriously, hear me out. Biden pledges that by the end of his term, Metaculus will predict a 51%+ chance that emissions will be less than half their historic maximum by 2030. If Metaculus gives a lower number than this, we can consider Biden to have failed in his pledge, and we can hold it against him when he tries to get re-elected.

In order to get Metaculus (or some alternative prediction market) to show a 51% chance of meeting emissions targets, Biden would have to pass a credible package of legislation that puts us on the path to achieving that goal, and makes everyone think it’s more likely than not.

Imagine Biden pledges that some prediction market will have a 51% chance of reaching his 2030 emissions target by the time he leaves office. He passes a carbon tax, and the market shoots up from 15% to 30%. Now he knows he’s on the right track, but still has to do more. So he bans a bunch of coal power plants, and it goes up to 45%. He's still not quite there, so he gives big subsidies to solar panels a few days before the campaign season kicks off, the prediction market reaches 51%, and he's able to say he fulfilled his pledge.

Objection: even if Biden does everything right, whoever succeeds him could repeal his plan and ruin everything. So the prediction markets might hesitate to give him a high chance of success even if he had a great plan. One way around this is to use a conditional prediction market - "what’s the probability that emissions will be below X, given that Biden's plan is enacted and stays in place until 2030?" Another way around this is to suck it up, admit that politics is hard, and accept that part of the work of making a global warming plan is figuring out how to prevent your successors from dismantling it.

Second objection: once the prediction becomes a target, aren't a lot of people going to try to distort it in order to make their candidate look good or bad? Probably. This is why we need good prediction markets. If a prediction market is big enough and liquid enough, it should be robust against these kinds of distortion attempts. Suppose that Biden passed some very strong law banning all carbon emissions, and it was obvious that the US would meet and exceed his goals, but the Republicans threw a hundred million dollars into the prediction markets to bring the price of "Biden reaches his goal" down to 1%. Wouldn't you buy lots and lots of shares of this one cent prediction which is virtually guaranteed to pay out a dollar? If yes, that's the mechanism which corrects the market. Mitch Hedberg used to say that “escalators can’t break, they can only become stairs”; in the same way, prediction markets can’t break, they can only give you free money.

(this isn’t true for Metaculus in particular, which doesn’t use real cash and relies on participant honesty plus a complicated algorithm. If the algorithm doesn’t hold up, future pledgers should use a different market.)

Third objection: is this disrupting some important natural part of the political process? If Biden knew people would grade him on his goals, might he just not make them, or make them artificially low? Or is the ability for politicians to avoid accountability some sort of important check on special interests and mob rule? I’m just cynical enough to take these concerns seriously. But I feel like having to worry about them at least beats the status quo, where Biden says a random number, everyone praises him for having set such an ambitious target, and then nobody ever thinks about it again.