I’ve finally watched the video of Kevin Anderson’s talk (posted in a comment that I currently can’t find) which was part of the Cambridge Climate Lecture Series. I found it quite uncomfortable. He addressed things that we typically avoid. The possibility that we will have to make substantial changes to our lifestyles and that achieving the 1.5 – 2oC target is incompatible with economic growth. I realise that such arguments are unlikely to succeed in today’s socio-political environment, but I am genuinely concerned that we will do so little now, that we will be being forced to do things, in the future, that – today – we regard as unacceptable.
He addressed how the Integrated Assessment Models (IAMs) were providing carbon budgets that are too optimistic – and, hence, motivating delay – by relying on technology (negative emissions) that is yet unproven. He suggests that 4oC is incompatible with organised global community and should be avoided at all costs (discount rate is irrelevant). He also argued that climate scientists, and other academics, should be setting some kind of example by reducing their own carbon emissions (and also that of their institutions). I’ve always been a bit anti this argument because I don’t think it is their role to do so, but I am starting to come around to it. We are amongst the highest emitters, and we’re also aware of the potential consequences.
Whatever you might think of the above, I still think his talk is worth watching. I couldn’t see anything wrong with the numbers he presented and they don’t paint a particularly optimistic picture. That’s not to say that we can’t do something (I certainly think we can) but it seems increasingly likely that we’ll have to start seriously considering doing things that we’d really rather not do.
...and Then There's Physics 
Another Kevin Anderson video which I surreptitiously recorded whilst hiding amongst a group of climate scientists at Exeter University, pre Paris:
That may have been me, in a private email, which would explain why you can’t find the comment 🙂
If you have time, I would also recommend the 2nd lecture in the series here by Antony Hobley of Carbon Tracker which describes the work Carbon Tracker do on advising the financial investment industry (pension funds etc.) on fossil fuel investments. The lecture is something of an antidote to Anderson’s being considerably more upbeat. Hobley is not, however the most engaging of speakers, but, for me, the material makes up for the lack of fluency.
This series was a memorial to the late Professor David MacKay, however I understand that they are planning to hold another lecture series in 2018.
Phil,
Indeed. I had thought it was a comment, but I’ve just found your email. I’ll have a look at the other talk. I also hadn’t realised that the series was a memorial to David McKay. Seems very appropriate.
I definitely posted a link to this video in a comment some time ago, not sure if it’s my comment you were referring to ? I have been watching Kevin’s videos from 2012 and his message seems on point to me. That aside, here’s another climate scientists leading by example
http://www.yesmagazine.org/issues/life-after-oil/how-far-can-we-get-without-flying-20160211
and Susan Krumdieck, another energy specialist (Kevin Anderson’s forte) points out we need to vastly reduce energy consumption
“There is no way to achieve an energy transition without completely reworking every aspect of our infrastructure, industry and economy to vastly reduce energy demand. ”
http://low-emission-future.blogspot.com.au/2016/05/can-engineers-change-world-energy.html
If it’s not the job of the people who know we have to lower our emisisons significantly, who’s job is it ? If we’re going to transition to a low emsisions lifeystyle, why do we need to wait until someone from government forces us to ?
While this only goes up to 2015, the amount of energy from wind and solar isn’t even visible, it’s so small, this gives some scale to then size of the problem
https://ourworldindata.org/grapher/global-primary-energy-consumption-1800-2015
Elsewhere in the realm of surrealism, OMICS editor and Heartland factotum Arthur VIterito has gone on the warpath against, And Then There’s Physics and, er, people who publish peer reviewed stuff in journals they don’t edit themselves.
T-rev,
Quite possibly. I’ve obviously got myself slightly confused as to where I first saw this 🙂
Russell,
Interesting, I had not realised this.
> should be avoided at all costs (discount rate is irrelevant)
Sounds economically illiterate. Roughly equivalent to “we should believe in magic CO2 removal technology and therefore not worry”. But since it is economics, not science, it passes by your blind spot.
WMC,
I thought that particular claim would get your attention.
Of course. I’m a bad, bad person.
Economics isn’t the best way to measure the significance of action in this case. It isn’t irrelevant, but it is only only factor, and shouldn’t dominate. Cost (and Value) may be calculated in economic terms, but also in social, environmental or other ways. It is helpful to be able to provide a measuring mechanism, but it may not be measuring the most important things.
I guess discount rate may be relevant, but surely the point is that the less we ‘invest’ now, the more we will have to invest soon, and the more radical will have to be the changes, socially or economically. Deferring cost seems to be the path of the PPI, which is always (AFAIK) more expensive in the long-term. It was always a bad idea, and in relation to GW it’s worse.
> I’m a bad, bad person.
No; but everyone has blindspots. You won’t notice them because they are blind spots, so you need someone else to point them out. As, it would seem, do all the other commentators here.
> Economics isn’t the best way to measure the significance of action in this case
Well, it certainly isn’t the *only* way; that’s for sure. That it isn’t the *best* way is surely a value judgement, so you shouldn’t state it definitively; it can only be a personal preference. No?
> discount rate may be relevant, but surely the point is that the less we ‘invest’ now, the more we will have to invest soon
Ah: this is where you go off the rails, taking ATTP with you I strongly suspect. You’re entirely within your rights to say “econ isn’t the only measure”. But you shouldn’t mix that up with “if I re-write econ (which I don’t really understand) in a somewhat muddled way, then…”. That isn’t valid; it is analogous to what the denialists do with the science.
WMC,
My response wasn’t (as I thought was obvious) serious. My desire to have a serious discussion with those who choose to make it personal and who have a (strong?) tendency to interpret things as uncharitably as possible is fairly small.
FWIW, I think your economic denier narrative is rather silly and and seems to pretty much be doing what those who criticise the use of “science denier” claim is being done by those who use it. Technically, “denial” means dismissing something that is regarded as true (a consensus position) not disagreeing with what should be done, given that truth. The other problem is that I don’t even know what consensus position is being denied. Maybe there is a true consensus position in economics that has developed and become apparent, but I certainly haven’t seen a clear explanation of what it actually is.
> Technically, “denial” means dismissing something that is regarded as true (a consensus position) not disagreeing with what should be done, given that truth
Yes, of course. And that’s what I’m saying most-of-you do to economics. Saying, for example, “ignore discount rates” is analogous to “ignore the GHE”.
WMC,
1. I didn’t say this. I pointed out that Kevin Anderson argued this.
2. You may have to explain how ignoring discount rates is equivalent to ignoring the GHE. It seems entirely possible to accept that there will be a future cost and that we can discount that to today and *then* argue that we should essentially ignore this and do something based on a different judgement. In the same way that the science does not tell us what to do, I don’t think that the economics does either. It is closer to policy than the science, but we are as entitled to make decisions that seem at odds with the economic evidence, as we are to make decisions that seem at odds with the scientific evidence. If not, why not just replace all politicians with economists who spend their time doing cost benefit analyses?
There were a few reasons why I highlighted that aspect of his talk. One was because I’ve seen you argue against it before. It’s interesting that there are serious people who do think that “at all costs” is somehow an argument worth making. I’ve also had a private discussion with at least one climate scientist who did say that 4oC would be catastrophic. I realise that isn’t definitive, but it did at least seem consistent with what he said with regards to the views of those who try to study what would happen if we warmed 4oC.
My own view, FWIW, is that I don’t think that we can reliably estimate the cost of 4oC of warming. I’m not arguing against doing so; simply suggesting that cost-benefit type analyses shouldn’t be the primary determinant of what we should do.
@-WC
“Saying, for example, “ignore discount rates” is analogous to “ignore the GHE”.”
Perhaps closer to “ignore climate sensitivity”.
But the claim being made I think is that when the social and financial system breaks down as a result of agricultural collapse or population reduction, economics, with grrrowth and interest rates becomes largely irrelevant.
It may be possible to analyse the Black Death, Rawandian genocide or the Syrian civil war in economic terms, and even apply a discount rate, but the utility of such work is dubious.
> And that’s what I’m saying most-of-you do to economics.
Considering its libertarian tendencies, Our Stoatness ought to thread lightly on that one:
Unless Our Stoatness wishes to argue that Thomas Piketty is an economics denier?
WMC,
“Saying, for example, “ignore discount rates” is analogous to “ignore the GHE”.”
I suppose, ignoring discount rates will mean a discount rate of 0 (or a fairly low value close to 0). The right value of the discount rate has been discussed in the economic literature, but there does not seem to be a consencus upon its value (e.g. Nordhaus vs Stern). I suspect such a consencus is impossible, because determination of the discount rate incorporates a ethical choice.
This issue can not be set asside by refering to empirical discount rates out of another context, because the value of profits in comparison to future ones can normatively differ with the context. In the context of global warming one has to argue why profit now should value more than profits of future people if applying a high discount value. This is different than discount of one’s own future interst in for example money today or tomorrow (which is sometimes empirically sureveyed). In the context of climate change there is a conflicht with moral impartiality. A high discount rate seems to be against this imartiallity obligation except if one opt for moral egoism or particularim in a temporal sense. But this is an ethical choice which should not been hidden.
There are moral arguments for a high discount rate, incorporating that future generations will be weathier, but this is debatable just in the context of high global warming which is potentially catastrophic, which is the choice context at hand.
I am interested in your moral argument to ignore the GHE in comparison.
libertador,
My understanding of Kevin Anderson’s argument is that the impact of 4oC of warming would be so great (incompatible with organised global community) that discount rates become essentially irrelevant, and such an outcome should be avoided at all costs. Of course, if avoiding 4oC would produce utter catastrophe now, then one could justifiably argue that we should simply chance it and hope that the estimates of the impact of 4oC of warming are wrong. However, I suspect that avoiding 4oC of warming is not all that difficult (the INDCs from Paris are leading us towards 3.5C and they don’t seem all that ambitious). If you look at Figure 4 in this Nordhaus paper, the optimal pathway leads to about 3.5oC of warming, so one might argue that we should simply follow this pathway (carbon tax of a few tens of $ now, rising into the future – I thought there was another figure showing this, but I can’t find it).
However, I think that this optimal pathway is only producing some chance (50%, 66% ???) of staying below 3.5oC, so one might argue that a more ambitious pathway should be followed in order to reduce the possibility of much more than 3.5oC of warming.
> I suppose, ignoring discount rates will mean a discount rate of 0
It could also mean that pussyfooting over a specific value for a discount rate is mostly irrelevant.
The problem with discounting is that the way it is applied is often different than the way cutting-edge economists think it should be applied. In my opinion (and those of the cutting-edge economists I know), the “ideal” way to apply the discount rate is to use the Ramsey framework along with probability distribution functions of future GDP paths. There are two important aspects here:
1) the discount rate becomes a function of GDP. If, therefore, you believe that GDP will actually _decrease_ due to future climate change, that can yield negative discount rates. This avoids the apparent paradox that given the most common discount rates in use (say, 3%), we wouldn’t be willing to pay more than Bill Gates’ net worth today to avoid total destruction of the world’s economy in the year 2200.
2) futures with lower GDPs become more heavily weighted over time, so that the certainty-equivalent discount rate drops as you move further into the future. This allows consistency between observed discount rates (based on personal, societal, and industry behaviors) which tend to be higher, and ethical discount rate discussions which suggest that we shouldn’t heavily discount future generations: we can have high near-term discount rates transitioning into low long-term discount rates.
See the discussion in the recent National Academies report on Valuing Climate Damages (on the SCC).
> Thomas Piketty is an economics denier
TP has certainly made major errors leaning in a leftward direction, yes.
> I didn’t say this. I pointed out that Kevin Anderson argued this.
I know you didn’t say it. I didn’t say you did say it. Why are you saying that you didn’t say it when everyone knows that you didn’t say it? It is however something that you picked out from his talk, presumably because it is important.
> Perhaps closer to “ignore climate sensitivity”.
Yes, that’s closer.
> …when the social and financial system breaks down as a result of agricultural collapse or population reduction, economics, with grrrowth and interest rates becomes largely irrelevant…
The (economic) cost of the civil system breaking down entirely would be enormous; as would the death toll. Costs, even passed through discount rates, would show that. So why would you want to ignore them?
> I am interested in your moral argument to ignore the GHE in comparison.
I’ve made no such argument; I don;t understand what you’re asking.
To reply to your other point, not knowing the correct discount rate is no reason to ignore the concept. To return to the analogy with climate sensitivity: what you’re suggesting is analogous to ignoring CS entirely, because you don’t know its exact value.
WMC,
Because this was not obvious from your response.
The suggestion wasn’t that it should be ignored.
> TP has certainly made major errors leaning in a leftward direction, yes.
Res ipsa loquitur.
@WMC;
let me modify that then with a ‘may not be’. You are welcome to explain why I’m wrong or misled about this.
Re my muddled economics, it would help if you offered more. I think I understand discount rates, and KA’s idea seems to be that once we commit past a certain point these don’t capture the problem or contribute to a solution. My idea is that if you factor in other matters which are hard to place a price or cost on, but you are satisfied do have value, then the discount rate gets more heavily loaded (most likely) in favour of more commitment earlier, given that if you slip too far along the catastrophe curve it becomes impossible to miss the crisis point, which means a state change.
Excuse the multiple metaphors.
Seems that TimW’s a money denier:
http://ralphanomics.blogspot.com/2012/07/tim-worstall-does-not-understand-money.html
> Seems that TimW’s a money denier
This place, when talking about economics, is like WUWT when talking about science. And the sad thing is none of you know it, none of you care, you’re happy to just wallow in your errors in a warm comfortable sea of economics ignorance. You’ll all happily back each other up, and none of you will call each other out. Just like the Watties with their “science”.
WMC,
Do you feel better now?
How can we call each other out if we are all equally ignorant? Also, I don’t notice any special clubbishness here, especially in comparison to some places. Are you inclined to propose any particular mechanism for evaluating present against future consequences? Some explanation somewhere would be helpful.
Seems that TimW’s a tax denier:
http://www.taxresearch.org.uk/Blog/2014/05/08/oxfam-know-their-tax-facts-tim-worstall-is-peddling-a-harmful-fantsasy/
Just wait until TimW discovers externalities.
Oh, and speaking of leaning in a leftward direction:
http://www.brusselsblog.co.uk/will-tim-worstall-stick-to-his-principles/
While the luckwarm playbook has been written by ClimateBall players, it borrows a lot from the bleeding heart libertarians playbook written decades before.
And the sad thing is none of you know it, none of you care, you’re happy to just wallow in your errors in a warm comfortable sea of economics ignorance.
[…]
To reply to your other point, not knowing the correct discount rate is no reason to ignore the concept.
Perhaps we could all band together and thank WC for his concerns about people ignoring the concept of discount rate, here at ATTP?
Oh wait, we can’t even do that, as none of us care about our ignorance, and all of us are content to just wallow in our errors.
> http://www.taxresearch.org.uk/Blog/2014/05/08/oxfam-know-their-tax-facts-tim-worstall-is-peddling-a-harmful-fantsasy/
Richard Murphy is an idiot and so is anyone who quotes him. This *is* just like WUWT: people quote spurious “authority” for their foolish claims, and everyone nods along.
I can’t see this progressing in any constructive way, so maybe we can draw this to a close?
> Richard Murphy is an idiot and so is anyone who quotes him.
I actually quoted Claire Godfrey of Oxfam, and did so by quoting a secondary source because I don’t cite Disqus comments.
And I emphasized a quote by Greg Mankiw, who does not exactly lean leftward, unless one accepts TimW’s pigeonholing, in which case more than 97% of the economists lean leftward.
Is Our Stoatness a quote denier?
> I can’t see this progressing in any constructive way […]
It could, if Our Stoatness could at least admit that (1) nobody argues against the existence of discount rates, (2) nobody quoted Richard Murphy, and (3) he’s not the economic guru he pretends to be since he relies quite heavily on TimW’s (IMO naive) musings.
There must be a reason why no country has yet to implement libertarian programmes.
Possibly, but that all seems rather unlikely.
I’ve only just returned from the twilight zone, and I’m fairly sure that I haven’t nodded in here yet.
Have I?
> that all seems rather unlikely.
Of course, since Our Stoatness usually comes here to play gotcha by parsing words without trying to understand them much. Hence why I suggest he at least accepts that he misinterpreted you and KevinA.
Being in a snit carries a risk – being wrong. Being wrong and being in a snit is just unbecoming.
Peter Kalmus is a climate scientist at JPL. He used to work on astrophysics but moved into climate, and after realising what’s going on he and his family changed their lifestyles to cut CO2 emissions by 90%. He doesn’t fly, keeps chickens in his back garden etc and he loves it.
He’s just released a book called “Being the Change: Live Well and Spark a Climate Revolution” and any profits go to climate charities.
I don’t think his actions are morally necessary for scientists though because effective climate action means cutting emissions at a far slower rate than his 90% now, and I don’t think we personally must do more than that. But I respect him as a great example and as proof that the conspiracy theorists are wrong when they accuse climate scientists of not being serious.
(disclosure: I know the guy)
A discount rate is a double edged blade. It assumes a future increase in wealth. If climate change becomes severe enough that it impairs future growth of wealth then is also degrades the discount rate, and if climate change becomes severe enough that it actually shrinks wealth then the discount rate first evaporates, then reverses sign, leaving us unable to pay for delayed mitigation and adaptation.
WC’s comments are rather rich in light of the fact he denies the validity of any data or study that does not support his POV. Over the past couple of years I have passed him links to many papers on various economic topics (EMH, RE, SCC) that show the data disagrees with his opinion. The discount rate is one of those topics.
For instance: The Economic Climate: Establishing Consensus on the Economics of Climate Change,Howard & Sylvan, Selected Paper prepared for presentation at the Agricultural & Applied Economics Association’s 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California
Howard and Sylvan surveyed over 1000 economists working in the topic area and published in top journals. They found “the mean and median of the constant discount rate are 2.25% and 2%, respectively.” Just as important, they found that over half the economists surveyed believed in a declining discount rate and that more than half believed the discount rate should be calibrated using ethical parameters. I guess that ethical part makes SM an economics denier too.
PDF of Howard and Sylvan
[Corrected the link. -Willard]
Speaking of this globalisation/Washington Consensus thing:
https://twitter.com/gabriel_zucman/status/895652025634930692
My main quibble with Anderson is the reliance on outdated scenarios. He is right that some technologies like BECCS are lagging and probably aren’t going to make it. However some technologies, like solar and batteries, are proceeding down well established cost curves and appear to be poised for success. I have a suspicion that replacing the “non-success” technologies with a greater reliance on the “success” technologies in the next round of scenario building would allow for a more positive outlook. I guess we will find out in a couple of years.
It would seem to me that if JPL found a meteor of a size large enough to cause an extinction-level event in an orbit which appears to result in a collision with earth few people would want to debate the cost of the effort needed to change the meteor’s orbit. (Sasha Volokh is one. It now appears that WMC is another.)
The rest of the planet would (I presume) come to the conclusion that taxes should be levied at whatever level needed to finance the effort.
> The rest of the planet would (I presume) come to the conclusion that taxes should be levied at whatever level needed to finance the effort.
The rest of the planet would then be on solid theorical ground:
Click to access a74-pit.pdf
Dear Stoat.
This is the third time this year we are in violent agreement.
I’m sensing a pattern.
anyway.. go long bitcoin
, buy and hodl
“It would seem to me that if JPL found a meteor of a size large enough to cause an extinction-level event in an orbit which appears to result in a collision with earth few people would want to debate the cost of the effort needed to change the meteor’s orbit. (Sasha Volokh is one. It now appears that WMC is another.)”
Of course we would debate it
@-WC
“This place, when talking about economics, is like WUWT when talking about science.”
WUWT when talking about climate science accuse it of being partisan, shaped by ideological political dogma, groupthink and academics, for funding, creating from distorted data, the answers ‘THEY’ want to hear.
Climate science is also dismissed for reliance on computer models with no predictive accuracy. It is framed as a field full of doubt and uncertainty with partisan polarisation and simplifying assumptions that are unrealistic when dealing with a multi-factorial chaotic system.
The dismal science seems a much better candidate for such an indictment than climate science.
I am not interested in the economics of global warming and the sixth great extinction. A concern about economics really seems frivolous in this situation. I won’t argue this with anyone, the argument is simply silly imho.
I believe Kevin Anderson is correct in most of what he says and has been correct for quite some time. He is having little or no impact in public policy, but he is speaking clearly about the problem.
WRT to the question of whether climate scientists should lead with small footprint, I don’t see the point. The evidence is pretty clear that individual or small group action cannot slam the brakes on the emissions and their impact. I personally don’t fly anymore and haven’t since the mid 1990s. I put a fair amount of effort into a small carbon footprint, but mainly because it is a matter or grace and applied philosophy, I do not kid myself that my efforts and those of all who think as I do will have a significant impact on the global situation. I think almost nothing but a general global carbon tax (or economic collapse) can produce much change in our CO2e emissions.
I think that global warming is being better understood now each day because of scientists like KA, but also because the impacts are becoming too difficult to ignore.
I feel really bad for my kids and grandkids.
Thanks for your post and thoughts on Kevin Anderson. I appreciate it.
“WRT to the question of whether climate scientists should lead with small footprint, I don’t see the point. ”
kevin made the point rather clearly
Mosher
“Dear Stoat.
This is the third time this year we are in violent agreement.”
Would actually be nice if someone could explain, in simple terms, what the Stoat is on about? He wanders in, throws around some abuse and calls everyone stupid for not seeing the obvious. What is it people should be seeing?
What are you in agreement about?
“The policy challenge, then, is to pull those damages out of the future and into the present. We need to amplify that distant signal so that it is heard in everyday economic decision-making.”
This amplication is weak with a 5% discount rate. If Anderson is arguing the discount rate should be zero, the amplication is greater. Many people use discounts rates to make decisions. Participate in a no match 401(k)? You are valuing your future spending against your current spending. You do this without assigning a specific discount rate, but a fuzzy one.
Participate in mitigation efforts? You use a fuzzy discount rate.
To assume a zero percent discount rate seems wrong. It’s contrary to what we do.
> It’s contrary to what we do.
We often do hyperbolic discounting:
https://en.wikipedia.org/wiki/Hyperbolic_discounting
That doesn’t mean we should.
Sometimes we do negative discounting:
http://www.tacticalphilanthropy.com/2009/03/negative-discount-rates-peter-singer/
We should do more of that.
Singer should appeal to you, Ragnaar.
Canadian economist Francis Wooley on discount rates:
From her post: What is investment today worth tomorrow? at Worthwhile Canadian Initiative.
http://worthwhile.typepad.com/.a/6a00d83451688169e201bb092eaf65970d-320wi
Moralizing atheists? These are moralizing economists. And most of them agree the discount rate should be calibrated using ethical parameters. This stands opposed to the common Libertarian belief that economics can/should be divorced from morality.
Singer?
I remember him from undergrad class on ordinary language /free will & determinism.
He was the guy who believes in infanticide right?
Nathan,
I don’t really get it either. I think it’s to do how this site is sometimes like WUWT, but I’m not sure. I should add that I’m all that interested in finding out.
The (economic) cost of the civil system breaking down entirely would be enormous; as would the death toll. Costs, even passed through discount rates, would show that. So why would you want to ignore them?
But no one’s saying we should ignore them, the point is surely that because the costs in that scenario are so obvious and enormous that applying a specific monetary value to them isn’t particularly meaningful. The economic argument then becomes about how much it will cost us in the short to medium term to avoid that outcome.
And the economics is only part of the argument. It’s about science (how confident are we that the affects of a 4C increase will create those conditions, and about values – whether we are prepared to pay that cost now for the benefit of people in the future. Kevin’s view is that any cost at all is worth paying, others might disagree but in this context arguing about discount rates is really not that useful.
At risk of straying towards concern trolling, much as I might have distain for the views of commenters at WUWT I’m not sure I’d just wade in accusing them of being climate change deniers who don’t understand the subject, without making substantive arguments why they are wrong and relying on a blogger and journalist to back up my opinions, rather than actual climate scientists.
Although FWIW, TimW is right on the question of private banks creating money in the piece linked to above.
Andrew,
Indeed, and – if anything – Kevin Anderson’s explicit point was that he wanted to avoid economists discounting the future and concluding that we should simply delay doing anything. The more interesting issue – in my view – is his claim that 4oC would be incompatible with organised global community. As I said in an earlier comment, I have heard something consistent with this, privately, from one climate science but I have no real idea if there is merit to what Kevin Anderson suggested (well, other than it being clear that the impacts of a 4oC rise is very likely to be pretty severe).
ATTP,
Yes, Kevin’s argument really rests on that question, and it’s not one which economics can answer. I don’t think we can definitively answer that question, the best we can do is say this is our best estimate and this is how confident we are, and then we have to decide whether we are prepared to take that risk and whether it’s serious enough for us to pay the cost of avoiding or at least minimising it.
Andrew,
Indeed. Maybe Stoat’s argument is that the economic consensus is that we should always cost something and always apply a discount rate. Maybe that is true, but it’s not obvious that this is how people have to make decisions. In some sense, however, Kevin’s argument is essentially this, just pushed to one extreme – his argument (if I understand it) is essentiually that the cost is so large that whatever discount rate you apply (assuming a reasonable range of discount rates) you would conclude that we should pay the cost (now) of avoiding/minimising it. Again, I don’t know if this is the correct conclusion to draw about what would be the consequences of 4oC of warming and it would be interesting to get a better sense of what people actually think the consequences of such warming would be.
> I can’t see this progressing in any constructive way, so maybe we can draw this to a close?
After that, and other stuff, I backed out of this thread (and discussing economics here permanently). If you want to discuss what I mean, you know where I live.
My view as to whether or not it’s likely to be constructive hasn’t really changed. You could always think a little bit about whether or not arguing that the discount rate has become essentially irrelevant is quite the same as ignoring the concept entirely – as you seem to be claiming is being done. On the other hand, feel free to not do so.
Chubbs – Bear in mind that, just like me, Kevin resides in the once Great Britain and not in SoCal.
When do you suppose BECCS will come on stream in sufficient volume? Alternatively is there another “magic bullet” lurking just over the horizon?
Mr. Mosher – If you find yourself in violent agreement with William’s position perhaps you wouldn’t mind explaining it to me very slowly, since I am a bear of remarkably little brain?
“Buy & Hoddle”! Shurely shome mishtake?
ATTP,
I think it’s partly the fact the economic cost would be too great what ever it is, and partly that the cost of a complete breakdown of society can’t be measured in purely economic terms anyway. It’s like me working out the economic cost of my house burning down and my family perishing in the fire at some time in the future and discounting it back to work out if it’s worthwhile for me to buy smoke detectors.
andrew,
Indeed, I agree. As I understand it (and happy to be corrected, if wrong) there is little confidence in the estimates of the cost of something like 4oC of warming.
Nathan.
Hi nice to meet you.
Hi Jim
I enjoy your contributions over at nevens. everyday reading
HODL
http://www.urbandictionary.com/define.php?term=hodl
“Six Degrees” by Mark Lynas will give an idea of what 4°C of warming might be like. Also, studying the early Pliocene will assist. In any case, expect more than 25 meters of sea level rise.
Is that enough to suggest action now, irrespective of the discount rate?
“Nathan.
Hi nice to meet you.”
Ummm yes, we met before. You claimed to know what the Stoatmeister was on about, can you enlighten us?
JIm Hunt – We may never see BECCS in volume. Anderson has shown that wind and solar are ramping up as expected in the RCP scenarios while BECCS and carbon capture are lagging. That will have to be reflected in the next round of scenarios. I am somewhat optimistic because we could do: wind, solar, gas-to-coal switching, conservation, etc. faster than our current trajectory and it wouldn’t cost much to do so (using a reasonable discount rate).
Yes, from what I remember “Six Degrees” paints a pretty bleak picture of a world 4C warmer, and as far as I’m aware is a fair representation of expectations based on the science as it was when the book was written.
> Although FWIW, TimW is right on the question of private banks creating money in the piece linked to above.
I’d rather cast poxes in all houses in the silly episode where TimW deflects the blame for Northern Rock’s fiasco by appealing to ontology, AndrewA:
http://www.futureeconomics.org/2012/08/northern-rock-and-the-bank-of-england/
That ontological question wasn’t that relevant to my point, which was to illustrate how Our Stoatness’ fight for freedom may bias his silly dismissiveness. His failure to parse KevinA’s point or AT’s wording of it just follows the parsomatic tradition. It’s not as if Lucia’s did not prepare us for such ordeal.
But when you’re compelled to cast Thomas Piketty as a denier of economics, it might be time to revisit your overall attitude.
***
You know, this whole “economic denier!” thing reminds me of the time Paul Romer did the same to David Andolfatto:
http://andolfatto.blogspot.com/2015/06/competitive-innovation.html
And then Andolfatto took the time to produce a countermodel to refute Romer’s claim that “no model can have a competitive equilibrium with price-taking behavior and partially excludable nonrival goods.”
What could Romer respond to that after going in a snit? The same as Our Stoatness did. Nothing.
ADD. DavidA has an even stricter conception of money than TimW. I don’t mind much.
@-Chubbs
” I am somewhat optimistic because we could do: wind, solar, gas-to-coal switching, conservation, etc. faster than our current trajectory and it wouldn’t cost much to do so (using a reasonable discount rate).”
I am somewhat pessimistic because we could do: wind, solar, gas-to-coal switching, conservation, etc. faster than our current trajectory, but it would cost lost profits to the fossil fuel industry.
And while some ‘enlightened’ governments are superficially supporting wind, solar etc, many are still giving loans, grants and credit guarantees to fossil fuel companies to build fossil fuelled power stations as ‘Foreign Aid’. A consequence of a long-standing regulatory capture.
http://www.express.co.uk/news/uk/839718/aid-foreign-aid-UK-taxpayer-money-fossil-fuels-renewable-energy
@-angtech
“Basically no matter how important the problem, if the cost is actually totally impractible then that course of action is not a consideration.”
(A summary of the GOP health care plan ?)
Not totally impractical, just less profitable than BAU.
“WRT to the question of whether climate scientists should lead with small footprint, I don’t see the point.”
The point should be obvious.
Restricting it to climate scientists is moot.
What is WMC saying?
We have problems with costs when we try to do things.
These costs are real.
If it was easily affordable and necessary we would all cut down our 10% and grumble away happily.
Then we have pyrrhic economics, we cut down 30% solve climate change but cripple our economy and lifestyle for generations. Still good for the children.
Next we have a 90% cut to solve the problem only we have to force it on people through a rigid belief system. No children left to worry about. No money or economics either.
Basically no matter how important the problem, if the cost is actually totally impractible then that course of action is not a consideration.
I’m probably wrong but might have to go to his site to be told so.
> I’m probably wrong but might have to go to his site to be told so.
It doesn’t matter if all you need is to inject “but the poor!,” Doc.
izen – agree we are not on an optimum path today, but that means we could do better. Key non-fossil technologies: Solar, wind, batteries, electric transportation all look more viable today than when the current RCP strategies were developed despite resistance from vested interests. Deploying these technologies rapidly is starting to align with other non-climate interests in China, India and other key countries. I don’t think progress will be fast enough to avoid significant climate impacts but all out disaster is looking less likely in my opinion vs the situation 5 years ago.
angech – cost alarmist
The following study shows that pussyfooting over discounting may not be caused by a polarization between ecological and economic concerns:
https://www.ncbi.nlm.nih.gov/pubmed/19653793
I got this citation via this other one.
I’m not sure why this is good news: it indicates why people don’t see how they can make money with long term investments.
Culture and social status seem to influence decisions with delay discounting:
http://onlinelibrary.wiley.com/doi/10.1111/jpr.12154/full
That makes me wonder what Japanese economists think about the social cost of carbon.
Discounting the future may not be a testosterone thing:
https://www.ncbi.nlm.nih.gov/pubmed/16891992
What a surprise, seeing the libertarians view their understanding of economics as a series of inviolable physical laws.
I saw this within the economics community for the year and a half that I studied economics. About half the community that I interacted with (game theory / microeconomics) were very clear that the assumptions they made were simplifying assumptions required to make the math work, but that there was lots of fun work to do pushing against the axioms to make them better match the real world.
The other half thought the assumptions were how the world *actually* worked. Disposal was *actually* free. Utility was *actually* linear in money. Etc.
That half made me leave the field.
there is something to seeing demand/fashion as a force akin to wind, it drives certain economic engines, but beyond that simple observation (and an appreciation of the labor theory of value), I know almost nothing about economics. My gap in knowledge of econ is deliberate, it seems to me that economics is simply a pretty ridiculously complicated branch of human philosophy with very little of anything akin to science in the mix.
The cigarette industry benefits from delay discounting:
https://www.ncbi.nlm.nih.gov/pubmed/14744545
Presenting SCC as a probabilistic discounting problem may help.
reference from Digby in comments at Real Climate: article at VisualCarbon.org by the investigative journalist Barry Saxifrage. …delved into the BP Statistical Review of World Energy, June 2017 and deduced some interesting data about global fossil-fuel consumption — data not made explicit at all in the review. The essential results are as follows:
Firstly, for the world consumption of oil-equivalent we have:
7 Gt in 1990
8 Gt in 2000
10 Gt in 2007
11 Gt in 2012
11.4 Gt in 2017
Certainly no sign of any decrease recently.
Secondly, for fossil fuel’s share of global energy we have:
88% in 1990
87% in 1995
86% in 2015
Crunch those numbers and get back to me with the good news.
Scratch your own itch, Small. Scratching mine, we might need many ways to sell discounting rates:
http://onlinelibrary.wiley.com/doi/10.1002/bdm.1876/full
Somehow related:
Manuel pingback:
http://scienceblogs.com/stoat/2017/08/10/economic-denialism/#comment-59910
I find the human behavior analysis interesting, just find economics quite silly when it is used as an excuse for doing little or nothing about the sixth great extinction. Bucky Fuller may have said: we can afford to do anything we have to do. If he never said it, I said it.
Worried about the cost of slamming the brakes on fossil fuel consumption? Ridiculous concern. We can afford to do it because we have to do it. scratching that itch. feels good.
> We can afford to do it because we have to do it.
And we already do:
https://twitter.com/airscottdenning/status/894234779016613888
Following ScottD’s tweeter is good for the soul.
beware of Jevon’s paradox. Yes, it is great to see renewables cost fall, but the thing that has to fall is fossil fuel emissions. I would love to feel optimistic about our situation, but remember this important component:
for the world consumption of oil-equivalent we have:
7 Gt in 1990
8 Gt in 2000
10 Gt in 2007
11 Gt in 2012
11.4 Gt in 2017
All of the feel-good new stories that can be printed are simply fluff unless this number starts going the other direction and fast.
Chubbs said:
Anthony Hobley says (about 30min in, I think)
> beware of Jevon’s paradox. Yes, it is great to see renewables cost fall, but the thing that has to fall is fossil fuel emissions.
I can agree with that. In return, you must admit that if we already take action, it’d be more correct to say we’re not doing enough.
This nuance removes some power from the Lord Lawsons of this world.
They can’t stop the world from moving forward.
Since we may need plastics for a while, their interest groups are here to stay.
Re: my last post. Actually, with regard specifically to BECCS, Carbon tracker do see a role. See here which seems to suggest the proportion of BECCS in the energy mix depends strongly on climate policy (it disappears when climate policy is “weak”)
Willard:
Long time since I was in business school. I had assumed we stopped at a zero percent discount rate, that there were not negative ones. Negative expenses sure. The idea of negative discount rates is acceptable to me.
Discount rates are often determined at the individual level. Payday loans. Stop, don’t do that, it’s foolish. Why should they listen to me? Here’s a whiteboard presentation of why you don’t do that. One of the great failures of tax preparers were refund anticipation loans and I have never offered them. I am pretty sure you don’t have a lot of assets, so give me some more money. What is in the best interest of my clients?
The skeptics are using a high discount rate it seems to me. Lukewarmers not so high but material. If a low discount rate could be imposed on us. One not in favor of impositions, would try to negotiate discount rates agreeable to them.
Willard: Plastics will get very cheap for a bit, but they can’t take up the slack from transportation fuels.
But eventually we’ll start making our plastics from things other than petroleum. We already make some; PLA is largely from corn, for instance.
Assume a negative discount rate in this situation. At value negative X, $1 spent prevents $1.50 of damage. At value negative Y, you prevent $2 of damage.
Now pay for everything. Food spending constant. Medical spending constant. Education spending constant. For this constant spending we get Z. Now compare to mitigation spending. Decide what to buy.
Whether the discount rate is negative X or negative Y matters to the ratio of mitigation spending to constant spending.
The idea of discount rates might be compared to a corporate intermediate term bond. It’s all laid out as a contract. The terms will not change though bankruptcy is possible.
With the climate, it’s not all laid out. Affordable and acceptable nuclear could effectively tear up the terms. Yes, you prevented some warming but this other new thing made the impact of what you did now only worth this small amount and if we had it all over to do again with hindsight, that was a waste of money.
> Plastics will get very cheap for a bit, but they can’t take up the slack from transportation fuels.
Of course. What I’m suggesting is that fossil fuels might still be needed beyond 2100.
After WMC sends willard’s comment to the Stoat Burrow Hole, mt and James Annan try to show him where is stance makes no sense. Which results in this rejoinder from our Stoatness:
LOL
> With the climate, it’s not all laid out.
Exactly. There are risks. Which means you give yourself some margin just in case.
Another way to see negative discount rates is when you’re in a very bad market. It’s better not to extend your positions in it. You get out or yhoddle:
Ragnar,
I know it sounds counter intuitive but the future of electrical power might look more like a mesh network of micro-grids which will favor smaller power plants. We will have to see if the private sector is up to the challenge.
If you have a few minutes check out this analysis.
https://www.greentechmedia.com/articles/read/can-we-make-nuclear-power-great-again
In the podcast they discuss where the modular nuke industry is at. There are a lot of players but the avg. cost of a getting federal approval for just a proof-of-concept demonstration is 500 million and up.
Coincidentally, I just came upon this talk by Dennis Meadows, at about 10 minutes he talks of personal responsibility and provided a small example an example, his closing words were
“if there is a conflict between what you say and what you do, what you do will convey a much stronger message’
I have been thinking more about the idea of climate scientists leading by example by pursuing a very small footprint and I still think it is generally a bad idea. In terms of Willard’s “scratch your own itch” idea, I am completely behind any scientist or human being that decides to pursue a small or negative (good luck) footprint. I do that myself because it does scratch my itch. I enjoy the gardening work, it’s been more than a decade since I pushed a lawn mower anywhere and that feels great, though I admit it is a challenge to keep up with the weeding and gardening.
The real problem that I see with the small carbon shoe scientists is that it suggests to the general population that individuals can effectively address AGW by reducing their individual carbon footprint when the solution, if it exists, is in something much, much larger and profound – an emergency reconstruction of human economy and industry. I think KA’s (and others’) view that civilized human communities/societies will collapse at some point if global warming continues is correct. I have heard the term “regenerative governance” tossed out in a few places and to me, that open-ended term suggests the level of change that is required to address GW and slow the sixth great extinction. I think it is going to be very difficult to persuade thoughtful leaders to throw in with a global regenerative governance idea. Kim Jong and Donald and other more thoughtless leaders will not be persuaded to abdicate their supreme authority for the good of us all.
The IPCC and global climate agreements like Kyoto and Paris are high-minded and they can help us slow the disaster if our species would stop bickering and really embrace this existential struggle, but even these agreements are not sufficient because certain issues like nation-state authority, neoliberal economics, fossil fuel “subsidies” etc. are not on the table. Like small carbon shoe scientists, these are ideas and commitments with good intent, but that cannot gain the traction needed to create the fundamental changes in human activity on the planet. In the US, we might say, uh-oh, we are in a pickle. or that is a tough nut to crack.
I like and am intrigued by the discount discussion. Humans are certainly interesting animals. The solution to our situation lies in a brutally frank discussion of our situation. It’s quite a pickle. It’s like a million ton pickle meteor of unusual size on a collision course with our hometown. Should we mow the lawn one more time before we get pickled? Or should we replace the lawn with an edible landscape and reduce our carbon footprint with more solar panels on the roof and an electric car?
I think no on mowing the lawn. I think yes on the edible landscape etc, but if we want to address the pickle, we will have to talk pickle.
Anybody hearing a lot of discussion about ending global fossil fuel subsidies and committing those funds and more to a transformative global economy based on something that might be described as regenerative governance?
But, by all means, scratch your own itch. Scratching our own itch might be our fundamental purpose in the universe. I use a very pleasant smelling cbd lotion sometimes with the itch. It is fabulous!
Cheers
Mike
> The real problem that I see with the small carbon shoe scientists is that it suggests to the general population that individuals can effectively address AGW by reducing their individual carbon footprint when the solution, if it exists, is in something much, much larger and profound – an emergency reconstruction of human economy and industry.
Indeed. That’s a good time to remind corporations that they chose to be considered moral persons:
http://thecorporation.com/
Everybody should mean every body.
That said, I think that from a public relations perspective, it’s important to recognize that scientists are selling themselves more than they are selling their results. People don’t connect with words, they connect to people. It’s first and foremost about trust:
The Benshi’s going a bit too far – his modulz does not take into account that contrarians are mostly filibustering. Heck, even teh Donald knows he should look like he’s listening:
In any case, I’d start with a very basic principle of storytelling:
SM:
Jim Hunt:
SM:
Willard:
I got lost in the discount-rate weeds a while back, but this ‘hodl’ stuff is worth the price of admission 8^D! Except now I need a new keyboard. Still, a net benefit so far 8^D!
“an emergency reconstruction of human economy and industry”.
I would rather seize the day.
The old ming dynasty had a pretty good run. We value it despite it’s dissapperance.same for the greeks..The Romans the Egyptians. Pretty good runs. Still spectacular.
The cockroaches may outlast us , perhaps superior knowledge isn’t all its cracked up to be evolutionarill speaking.
Still we have had a good run. No point in sweating the details about it ending 100 years from now.
Consider it a better if used by date.
Mosher
you still didn’t explain what it was you were agreeing with
Do you recall what it was the Stoat said that you agreed with?
Nathan,
I suspect it’s the argument that this site is a bad as WUWT when it comes to energy/policy/economics etc. Steven has certainly suggested that before.
aTTP:
If he can’t resolve ‘badness’ more finely than that, he needs more superlative adjectives.
Me:
Hmm, SM’s vocabulary is Manichean, relatively speaking ;^). Maybe he just needs more ordinal points on his ranking scales?
Nathan.
To answer your question.
Yes.
Steve M – given that WMC’s diatribe was all based on an Emily Litella moment (or as mt pointed out -omitting to WTFV) isn’t WMC’s criticism more like the typical WUWT kerfluffle than the actions/reactions of the denizens here?
Cite scientific paper
Misinterpret the results (usually because they didn’t actually RTFP – just skimmed it for some ammo)
Pass off misunderstanding as actual result
Ad hominems for any who disagree.
Kevin, you omitted the last step which is;
Refuse to acknowledge your mistake once the penny finally drops but simply withdraw from the argument. Thus allowing your self-image to remain intact, and allow you to peddle the same false argument at some time in the future.
I don’t think Stoat will stoop so low as to do the last, but it is a common pattern that I see time-again in internet discussions on climate. The world would be a infinitely better place if people acknowledged when they’ve made mistakes; but what’s the betting, for example, that Roberto will eventually just slink away.
FWIW, acknowledging mistakes is good, but I can see scenarios when it becomes difficult (especially if you don’t trust those that you think you need to make the acknowledgement to). It’s maybe more important to learn from them, than to acknowledge them.
Tossers, Tossers Everywhere.
Mosher
Why did you even bother with that reply?
Pingback: Economic denialism? – wmconnolley: scienceblogs.com/stoat archive
Pingback: Economic denialism? – wmconnolley: scienceblogs.com/stoat archive
Pingback: 2017: A year in review | …and Then There's Physics
Pingback: 10% of GDP? | …and Then There's Physics
Pingback: A human extinction denier? | …and Then There's Physics
Pingback: Worst case scenarios, or not? | …and Then There's Physics