L.A. Liberty

A Libertarian in Leftywood

Everyone, including environmentalists, has needs more basic than a pristine environment. We don’t worry about the earth until our survival is secure. This is a natural ordering of needs. Yet environmentalists, after meeting their own basic needs, want to force the poor to reverse their preferences and put the earth before their own survival. I don’t think most environmentalists intend this, but it is the inevitable result of using the force of government to enact protection measures. This is neither desirable nor effective in the long run.

You may be able to do great harm to many of the world’s poor in exchange for some government attempt at environmental improvement (more likely to result in special-interest enrichment), but in the long run it is impossible to convince people to subjugate their survival to the perceived needs of their ecosystem. The real promise for environmental improvement is economic growth. Until people are wealthy enough to consider [voluntarily] paying the cost of a cleaner environment, the fight to force their choices is inhumane and ultimately ineffective.

— Isaac M. Morehouse, “Environmental Protection Is a Consumption Good”

One of the most disquieting features of the environmentalist movement is its evident abhorrence of modern technology and its Romanticist back-to-nature philosophy. Technology and civilization are responsible, they say, for crowding, pollution, despoliation of resources, so let us therefore return to unspoiled nature, to Walden Pond, to contemplation in a far-off glade. None of these critics of modern culture and civilization seem to realize that the back-to-nature path would not only mean shuffling off the benefits of civilization, but would also mean starvation and death for the vast bulk of mankind, who are dependent on the capital and the division of labor of the modern industrial market economy. Or are our modern Romantics operating on a death, as opposed to a life, premise? It very much looks that way.

— Murray N. Rothbard, Conservation and the Free Market (via eltigrechico)

If we pay heed to the state-financed scientists who have been found to twist their science to support the political ambitions of their Malthusian pay masters, then we must agree that mankind is doomed in so many ways that the only way out is to reduce our population, our energy consumption, and our standards of living. However, the history of the past two hundred years has proven Malthus and his followers to be dead wrong. Man’s ingenuity combined with a free market consisting of competition, price signals and the motivation of profit will ensure that the peakers remain on the wrong side of history.

— Roger Toutant

Climate Change Policies as a Form of Insurance →

Suppose someone from an insurance company came to you in the year 2050 and said, “We’ve run computer models many thousands of times using all kinds of different assumptions. In the worst-case scenario, a very small fraction of the computer runs—about 1 in 500—has you losing 20% of your income in the year 2100. In order to insure you against this extremely unlikely outcome that will occur in half a century, we want to charge you 3.4% of your income this year.”

Would you want to take that deal? Of course not. The premium is way too high in light of the very low probability and the relative modesty of the “catastrophe.” When someone’s house burns down, that’s a much bigger hit than 20% of annual income. And yet, the premiums for fire insurance are quite reasonable; they’re nowhere near 3.4% of income for most households. Moreover, the threat of your house burning down is immediate: It could happen tomorrow, not just fifty years from now. That’s why people have no problem buying fire insurance for their homes. Yet the situation and numbers aren’t anywhere close to analogous when it comes to climate change policies.

Recognizing that they can no longer make their case on the basis of down-the-middle projections, those favoring massive government intervention in the name of fighting climate change have resorted to focusing on very unlikely but devastating scenarios. In this context, they have likened their preferred government policies as a form of insurance.

However, this analogy fails for several reasons. First, insurance in the marketplace is voluntary; when the government forces people to buy it—as with ObamaCare—then there is indeed a public outcry. Second, actual insurance in the marketplace is based on extensive actuarial data; we have no such understanding with climate change, but instead the outcomes against which we are “insuring” live inside computer projections.

Finally, even taking the insurance analogy head-on, the numbers don’t work. Nobody would take out an insurance policy on the terms of likely payouts and expense of premium that climate change policy offers.

The former drives up costs of producing carbon. This incentivizes firms to reduce their carbon dioxide output, including spurring innovation in making carbon-dioxide become more productive (doing more with less, making that fuel work harder) as well as seeking technological alternatives to carbon production altogether. 

The latter drives up costs of human labor. This incentivizes firms to reduce their salary expenditure, including spurring innovation in making labor become more productive (doing more with less, making that labor work harder) as well as seeking technological alternatives to human labor altogether. 

Generally, the people who support the former tend to support the latter - yet their expectations of each contradict one another.

[T]he “social cost of carbon” is not an objective fact of the world, analogous to the charge on an electron or the boiling point of water. Many analysts and policymakers refer to the “science being settled” and so forth, giving the impression that the SCC is a number that is “out there” in Nature, waiting to be measured by guys in white lab coats.

On the contrary, by its very nature the SCC is an arbitrary number, which is completely malleable in the hands of an analyst who can make it very high, very low, or even negative, simply by adjusting parameters. Precisely because the SCC even at a conceptual level is so vulnerable to manipulation in this fashion, the analysts giving wildly different estimates are not “lying.” …

Generating estimates of the SCC involves using computer models with (arbitrary) simulated damages that go out centuries in the future, and then the analyst must arbitrarily select a discount rate to convert those future damages into present-dollar terms. Because of these ingredients in the estimation process, an analyst can generate just about any “estimate” of the SCC he wants, including a negative one—which would mean carbon dioxide emissions confer third-party benefits on humanity, and (using the Administration’s logic) ought to receive subsidies from the taxpayer.

— Robert Murphy, “On the Dubious Social Cost of Carbon, Part I”

Philosophy Professor Wants To Criminalize Scientific Dissent →

Well, that’s my privilege [to retract previous apocalyptic predictions about climate change]. You see, I’m an independent scientist. I’m not funded by some government department or commercial body or anything like that. If I make a mistake, then I can go public with it. And you have to, because it is only by making mistakes that you can move ahead. …

Take this climate matter everybody is thinking about. They all talk, they pass laws, they do things, as if they knew what was happening. I don’t think anybody really knows what’s happening. They just guess. And a whole group of them meet together and encourage each other’s guesses.

— 

Renowned climate scientist James Lovelock, one of Time magazines 13 leaders and visionaries in their 2007 “Heroes of the Environment.”

The 94 year-old scientist, famous for his Gaia hypothesis that Earth is a self-regulating, single organism, asserts that environmentalism has “become a religion” and does not pay enough attention to facts; he also said that he had been too certain about the rate of global warming in his past book. 

Said Lovelock:

The problem is we don’t know what the climate is doing. We thought we knew 20 years ago. That led to some alarmist books – mine included – because it looked clear-cut, but it hasn’t happened.”

In the American West, Water Is a Political Weapon →

What Other Businesses Can Los Angeles Destroy? What About Trash Haulers? →

smh

A Climate Falsehood You Can Check for Yourself →

David Friedman points us to how data has been grossly - and no doubt deliberately - misrepresented:

One problem in arguments about climate (and many other things) is that most of the information is obtained at second, third, or fourth hand, with the result that what you believe depends largely on what sources of information you trust. One result is that people on either side of the argument can honestly believe that the evidence strongly supports their view. They trust different sources; different sources report different evidence. It is thus particularly interesting when on some point, even a fairly minor one, you can actually check a claim for yourself. I believe I have found an example of such a claim.

Cook et. al. (2013) is the paper, possibly one of two papers, on which the often repeated claim that 97% of climate scientists support global warming is based. Legates et. al. (2013) is a paper which criticizes Cook et. al. (2013). Bedford and Cook (2013) is a response to Legates et. al. All three papers (the last a pre-publication version) are webbed, although Legates et. al. is unfortunately behind a pay wall.

Bedford and Cook (2013) contains the following sentence: “Cook et al. (2013) found that over 97% endorsed the view that the Earth is warming up and human emissions of greenhouse gases are the main cause.”

To check that claim, look at Cook et. al. 2013. Table 2 shows three categories of endorsement of global warming reflected in the abstracts of articles. Category 1, explicit endorsement with quantification, is described as “Explicitly states that humans are the primary cause of recent global warming.” Category 2 is explicit endorsement without quantification. The description, “Explicitly states humans are causing global warming or refers to anthropogenic global warming/climate change as a known fact” is ambiguous, since neither “causing” nor “anthropogenic global warming” specifies how large a part of warming humans are responsible for. But the example for the category is clearer: ‘Emissions of a broad range of greenhouse gases of varying lifetimes contribute to global climate change.’ If human action produces ten percent of warming, it contributes to it, hence category 2, as implied by its label, does not specify how large a fraction of the warming humans are responsible for. Category 3, implicit endorsement, again uses the ambiguous “are causing,” but the example is ‘…carbon sequestration in soil is important for mitigating global climate change,’ which again would be consistent with holding that CO2 was responsible for some but less than half of the warming. It follows that only papers in category 1 imply that “human emissions of greenhouse gases are the main cause.” Authors of papers in categories 2 and 3 might believe that, they might believe that human emissions of greenhouse gases were one cause among several.

Reading down in Cook et. al., we find “To simplify the analysis, ratings were consolidated into three groups: endorsements (including implicit and explicit; categories 1–3 in table 2).” It is that combined group, (“endorse AGW” on Table 4) that the 97.1% figure refers to. Hence that is the number of papers that, according to Cook et. al., implied that humans at least contribute to global warming. The number that imply that humans are the primary cause (category 1) is some smaller percentage which Cook et. al. do not report.

It follows that the sentence I quoted from Bedford and Cook is false. Cook et. al. did not find that “over 97% endorsed the view that the Earth is warming up and human emissions of greenhouse gases are themain cause.” (emphasis mine). Any interested reader can check that it is false by simply comparing the two papers of which Cook is a co-author. John Cook surely knows the contents of his own paper. Hence the sentence in question is a deliberate lie.

That Cook misrepresents the result of his own research does not tell us whether AGW or CAGW is true. It does not tell us if it is true that most climate scientists endorse AGW or CAGW. It is nonetheless interesting, for two related reasons.

In recent online exchanges on climate, I repeatedly encountered the claim that 97% of climate scientists believed humans were the main cause of global warming. That included an exchange with one of the very few reasonable and civil supporters of the CAGW claim that I encountered in the online arguments, where most participants on either side are neither. So far as I know, the paper says nothing that is not true. But it appears designed to encourage the misreading that actually occurred. It does so by lumping together categories 1-3 and reporting only the sum and by repeatedly referring to “the consensus” but never stating clearly what that consensus is. 

The closest it came to defining the consensus is as the “position that humans are causing global warming,” which leaves it unclear whether “causing” means “are one cause of,” “are the chief cause of,” or “are the sole cause of.” To discover that it meant only the former, a reader had to pay sufficiently careful attention to the details of the paper to notice “contribute to” in the example of category 2 in Table 2, which few readers would do. The fact that Cook chose, in a second paper, to misrepresent the result of the first is pretty good evidence that the presentation of his results was deliberately designed to mislead.

There is a second, and more important, reason why all of this matters. Beliefs on either side depend largely on what sources of information you trust. I have now provided unambiguous evidence, evidence that anyone on either side willing to carefully read Cook (2013) and check what it says against what Bedford and Cook claims it says can verify for himself, that John Cook cannot be trusted. The blog Skeptical Science lists John Cook as its maintainer, hence all claims on that blog ought to be viewed with suspicion and accepted only if independently verified. Since, as a prominent supporter of the position that warming is primarily due to humans and a very serious threat, Cook is taken seriously and quoted by other supporters of that position, one should reduce one’s trust in those others as well. Either they too are dishonest or they are over willing to believe false claims that support their position.

The fact that one prominent supporter of a position is dishonest does not prove that the position is wrong. For all I know, there may be people on the other side who could be shown to be dishonest by a similar analysis. But it is a reason why those who support that side because they trust its proponents to tell them the truth should be at least somewhat less willing to do so.

P.S. A commenter has located the data file for Cook et. al. (2013). By his count, the number of articles classified into each category was:

Level 1 = 64
Level 2 = 922
Level 3 = 2910
Level 4 = 7970
Level 5 = 54
Level 6 = 15
Level 7 = 9

The 97% figure was the sum of levels 1-3. Assuming the count is correct—readers can check it for themselves—that 97% breaks down as:

Level 1: 1.6%
Level 2: 23%
Level 3: 72%

Only Level 1 corresponds to “the Earth is warming up and human emissions of greenhouse gases are the main cause.” (emphasis mine) Hence when John Cook attributed that view to 97% on the basis of his Cook et. al. (2013) he was misrepresenting 1.6% as 97%. Adding up his categories 5-7, the levels of rejecting of AGW, we find that more papers explicitly or implicitly rejected the claim that human action was responsible for half or more of warming than accepted it. According to Cook’s own data.

Would anybody now like to claim that lumping levels 1, 2, and 3 together and only reporting the sum was not a deliberate attempt to mislead?

AAAS€' Guide to Climate Alarmism →

On "Social Cost of Carbon" Calculations →

Last summer I testified before a Senate subcommittee on the numerous problems with the estimates issued by the Administration’s Working Group on the Social Cost of Carbon. The Working Group’s estimates of the “social cost of carbon” were artificially inflated because of several modeling decisions that it made. Unfortunately, at the time I could only speculate as to the precise quantitative impact of their decisions, because the Working Group didn’t report the intermediate data that would be needed to tweak their findings.

After my testimony, the Heritage Foundation conducted an independent reproduction of (part) of the Working Group’s results, confirming just how significant its decisions were. At that time, Heritage analysts had re-run William Nordhaus’ “DICE” model—one of three computer programs used by the Working Group—to estimate the social cost of carbon, with different parameters fed into the model. When using a discount rate of 7 percent—a scenario that OMB requires federal agencies to include when performing cost/benefit analyses of proposed regulations—Heritage saw the estimates of the social cost of carbon collapse.

Now, Heritage’s analysts have finished a similar exercise with another one of the three Working Group models, this time using Richard Tol’s “FUND” model. The results here are even more striking: As I speculated in my testimony—and now Heritage has confirmed—using the discount rate of 7 percent actually shows a negative social cost of carbon. What this means is that additional tons of carbon dioxide emitted in the near future cause net spillover benefits on humanity. Following the Administration’s own logic, this particular result would imply the need for government subsidies to oil and coal producers.

The Choice of Discount Rate

To remind readers of the context of Heritage’s findings: OMB issues guidelines for federal agencies when they engage in cost/benefit analyses, to ensure uniformity in the reports and (in principle) to provide policymakers with accurate information. OMB clearly requires that cost/benefit analyses be performed using both a 3 percent and a 7 percent discount rate.[i] Therefore, when federal agencies (such as EPA or DOE) propose a new regulation, they must justify it economically using both rates. If they want to include the benefit of reduced carbon dioxide emissions, then they should plug in the “social cost of carbon” at both a 3 percent and a 7 percent rate.

Yet they can’t do so, because the Working Group neglected to generate a 7 percent estimate. This leads to the absurd situation of federal agencies reporting costs and benefits at a “7 percent” discount rate, then having to put in a footnote that actually those aren’t the right numbers because the relevant social cost of carbon estimates “are not available.”

In my Senate testimony, I speculated that this omission of a 7 percent discount rate was no accident. Because the (alleged) harms of carbon dioxide emissions occur in the distant future, using a higher discount rate will reduce the present value of those projected damages. Had the Working Group done the obviously correct thing by reporting a 7 percent estimate of the “social cost of carbon”—so that federal agencies wouldn’t need to fudge with footnotes when reporting their regulatory analyses at a “7 percent” discount rate—then the public would have gained some insight into just how dubious this whole enterprise was. 

However, I couldn’t say exactly how much the reported social cost of carbon would fall, had the Working Group used a 7 percent figure, because they didn’t save their intermediate results. In other words, outside analysts would have to run the entire computer simulations from scratch, if they wanted to either double check the Administration’s numbers or tweak the inputs to see how much it affected the result.

Heritage Foundation First Ran DICE Model

The Heritage Foundation—especially its programmer Kevin Dayaratna—began work on reproducing the simulations that the Working Group conducted on its three chosen computer models. First the Heritage team chose William Nordhaus’ DICE model. The interested reader can click through to read Heritage’s full report, but in this post I want to focus on the impact of the discount rate. When they plugged in the value of 7 percent, here is what Heritage found:

HeritageDICEModel

Source: http://www.heritage.org/~/media/Images/Reports/2013/11/BG%202860/BGDICEmodelexaminationtable11000.ashx

The table above from Heritage shows just how significant this decision is. For example, in the year 2020, the estimated social cost of carbon using a 3 percent discount rate is about $38/ton of carbon dioxide. In contrast, the SCC in that same year at the 7 percent discount rate falls to about $6/ton, a drop of almost 85 percent. It’s no wonder that the Working Group entirely neglected to report its SCC estimates at the 7 percent rate, or why federal agencies insist on using the 3 percent figure (when reporting cost/benefit results at the “7 percent” rate) even though a closer 5 percent figure is available to them.

Now Heritage Runs FUND Model

But wait, it gets better. The DICE model and the PAGE model are “pessimistic” when it comes to their projections of the impact of global warming on human welfare. In contrast, the FUND model—which was selected, remember, by the Working Group as being representative of the published literature in the field—projects that moderate warming will confer net social (“spillover”) benefits for the next several decades.

In other words, an additional ton of carbon dioxide emitted in the near future would—according to the FUND model—cause the world to get slightly warmer. This additional warmth would pull the stream of net benefits (through the year 2060 or so) slightly forward in time, but it would also pull the more-distant stream of net harms (from around the year 2060 onward) slightly forward in time as well. At a high enough discount rate, the “present discounted value” of this shift could well be positive, meaning that—from our current vantage point—emitting an additional ton of carbon dioxide was a socially beneficial activity that the government ought to be subsidizing. It was the mirror image of the standard argument forpenalizing carbon dioxide emissions.

Heritage’s work has now confirmed the above intuition. In their recent post they outline what the FUND model estimates as the social cost of carbon, using the full range of discount rates as required by existing OMB guidelines:

HeritageSCCTable

Source: http://www.scribd.com/doc/206783768/Social-Cost-of-Carbon-Comment-1arbon-Comment-1-Dayaratna-and-Kreutzer

Notice that in the final column, which shows the estimated SCC using a 7 percent discount rate, the entry is negative at least through the year 2030. In this context, a negative “social cost” is the same thing as a positive “social benefit.” For all the reasons that Americans are told they must accept taxes, subsidies, mandates, and huge public relations campaigns in order to reduce carbon emissions, this result of a negative SCC would flip it all on its head. Following the standard logic, these results would indicate a prima facie argument for increasing carbon emissions, since they generate benefits for third parties that the emitters don’t fully appreciate.

Conclusion

To be clear, the Institute for Energy Research is committed to free-market approaches to energy markets and environmental challenges. I am being quite tongue-in-cheek when raising the possibility of government support for carbon-intensive operations.

My serious point, however, is that the alleged scientific case for cracking down on carbon is quite dubious. Even using one of the three computer models picked by the Obama Administration Working Group, if we run it using one of the discount rates required by OMB guidelines, then oops! Out pops a social benefit of carbon.

Of course, nobody can ever truly know what motivates others, but I am very suspicious that the Working Group consciously chose to ignore the OMB guidelines precisely because they didn’t want the awkwardness of very low SCC estimates floating around. In that embarrassing scenario, suddenly the weakness of the “it’s a consensus” claim would be revealed, and policymakers would see quite clearly how judgments about discount rates—which have nothing directly to do with climate analysis—can literally flip the policy conclusion on carbon from “tax” to “subsidize.”

Despite populist rhetoric to the contrary, there is no more efficient or just mechanism for conservation[1],[2],[3],[4] and allocation of resources[5],[6],[7],[8],[9],[10],[11] than individuals acting freely under private ownership of property, making consensual, peaceful, and mutually beneficial exchanges of scarce resources. No “human sacrifice” required.

Despite populist rhetoric to the contrary, there is no more efficient or just mechanism for conservation[1],[2],[3],[4] and allocation of resources[5],[6],[7],[8],[9],[10],[11] than individuals acting freely under private ownership of property, making consensual, peaceful, and mutually beneficial exchanges of scarce resources. No “human sacrifice” required.

MySpace Tracker