Bishop Hill For whom the blog Tols
Oct 26, 2011 Climate: WG2 Climate: WG3 Economics Readers will remember the post a couple of days ago about Sir Andy Haines' citation of a new paper by Ackerman and Stanton about the costs of carbon. The paper was much criticised in the comments. This is Frank Ackerman's response. Please could readers try to engage with the arguments rather than piling on.
Is it true that there’s no such thing as bad publicity? If so, we’re in luck. The paper that Elizabeth A. Stanton and I wrote on the social cost of carbon has been discussed by the author of the Bishop Hill blog, and in comments on that blog and on Twitter by Richard Tol.
Bishop Hill cites us as estimating that the social cost of carbon – the monetary value of the present and future damage caused by emitting one ton of carbon dioxide – could be $1,000 or more. Tol calls this estimate “complete nonsense,” and Bishop Hill refers to the increase from the U.S. government’s $21 estimate to $1,000 and higher as “fairly jawdropping.”
Feel free to pick your jaw back up; we never said that the social cost of carbon is $1,000. We did say that the value should reflect important climate uncertainties, and that our modeling of those uncertainties produced a range of possible values from $28 to almost $900 for emissions today, or from $64 to about $1,500 for emissions in 2050.
A wide range of possible values is the only reasonable economic representation of scientific uncertainty about climate outcomes. Since the science says that outcomes are uncertain over a wide range, but catastrophic risks cannot be ruled out, then the corresponding economic evaluation should say that the social cost of carbon (SCC) is uncertain over a wide range, but catastrophically high costs cannot be ruled out. The reduction of the range of potential outcomes to a single, precise value such as $21 (or $1,000) slips in a radical change in the structure of information; it implausibly asserts that economists can find certainty where scientists cannot.
What are the uncertainties we considered? Using William Nordhaus’ DICE model, we examined median vs. 95th percentile climate sensitivity, high vs. low discount rates, and high vs. low estimates of damages at low temperatures, and at high temperatures. The multiple combinations of high/low estimates on four parameters gave us 16 variants of the SCC, spanning that vast range.
Richard Tol, in a comment on Bishop Hill, suggests that his forthcoming literature review of SCC estimates should be used instead of our analysis. In that article, updating his similar, earlier review, he includes 311 estimates, of which 184 (59%) come from his own publications. Those who want a Tol-centric review of the SCC literature should certainly consult his periodic updates, although readers should realize that these articles are self-referential to an extent that is unusual in academic literature reviews.
In debates on Twitter sparked by the Bishop Hill discussion, Tol has raised a number of other complaints. I am accused of having received funding from Friends of the Earth. Guilty as charged. I have also done work funded by the European Commission, various United Nations agencies, national and state governments, and charitable foundations, as well as other environmental NGOs. Tol has, on the other hand, cited obscure legal grounds for failing to reveal anything about his own funding. But really, we should judge one another’s work on the basis of its content, not its funding.
Since the Bishop Hill discussion Tol has tweeted, more than once, his belief that Liz Stanton and I are “mediocre” economists – a very weak substitute for substantive comment on our work. Come on, Richard: hurling hostile epithets at those we disagree with does nothing for the quality of debate.
And Tol has tweeted quite inaccurately about my critique of his FUND model. In an article with another co-author, I found that:
- FUND estimates that the worst economic impact of climate change will be the increased cost of air conditioning
- FUND’s analysis of agriculture assumes a large net benefit from the first several degrees of warming, based entirely on research published in 1996 or earlier (the field has changed dramatically since then)
- Equation A.3 in the agricultural module (see the FUND documentation) of FUND versions 3.5 and earlier contains a serious risk of division by zero, for a plausible (relatively high-probability) value of one of the variables.
FUND version 3.5, containing that software error, was one of three models used in developing the U.S. government’s estimate of the SCC. When I recalculated FUND’s SCC estimate after attempting to correct the divide-by-zero error, the number more than doubled. If you’re interested in this, read my article, and the FUND 3.5 documentation – or if you’re truly fearless, the FUND 3.5 source code.
You won’t be surprised to learn that Tol disagrees. I’m sure you’re about to have a chance to read his response.
Reader Comments (78)
@Richard Tol: I followed the link to the ecomists' ranking and can't find Ackerman or Stanton. What am I doing wrong? Also, is fair to parse "middle rank" as "mediocre"?
@Frank Ackerman: if you take four variables and combine their 95th percentiles in a scenario doesn't that scenario have a 1 in 160,000 probability of occuring? Wouldn't we normally consider that a neglible risk?
It is refreshing that Dr Ackerman believes that funding should not be an issue in assessing a work of scholarship. I quite agree.
It is a pity such an attitude is not more widespread. I for one am certainly sick to death of seeing non consensus scientists smeared and dismissed because of their real or imagined fossil fuel funding.
I am sure Dr Ackerman has always defended sceptical scientists against this type of attack. Hasn't he?
Rich:
That was my immediate thought. But then I remembered that under the precautionary principle, all outcomes can be treated more or less equally since you can estimate the cost of the catastrophe so that the expected values are very comparable!
/s
@Rich
Ackerman's profile is here: http://ideas.repec.org/e/pac18.html He is not ranked among the top 5% on any of the 34 indicators. Ranking is on life time achievement. Ackerman's first paper was published in 1990. Most of the 29999 registered had a career that is shorter than 20 year.
@Philip
Fair enough
It is completely obvious that there mut be a net benefit to humanity by any modest warming that is possible to envision.
Why? It is not 'obvious' to anyone who stops to think about it for a moment. Societies are living in balance with the current climate in their area in terms of prevailing agricultural practices and the resultant economy.
Rapid climate changes are inevitably going to prove disruptive as the need to change the type of crops grown or modify current agricultural practices bring first crop failure then an extra cost burden as the society adapts.
I agree it might in theory be nice if Scotland was a couple of degrees warmer - but Scotland is not the world. And if it means increased heavy rainfall and risk of flooding then I would rather keep the current temperature regime thank you very much.
So - not 'completely obvious' to anyone except you.
In this paper, we ran the model for any parameter. We find a wide range of results, up to a carbon tax of $150,000/tC (that's 60 Sterling per litre of petrol).
Then, we probabilistically constrain the parameters to reflect observations. The difference is three order of magnitude; the decimal point shifts three places to the left.
http://iopscience.iop.org/1748-9326/4/2/024002/pdf/1748-9326_4_2_024002.pdf
That someone receives money from FoE and government & "charitable" bodies which may or may not be government funded fakecharities does not, of itself, disprove anything. But it is a legitimate reason to suspect bias. Ackerman and Stanton must either be unaware that this same argument has often been used to throw suspicion on research funded by the tobacco industry or else they must be publicly on record as having denounced thiose throwing the suspicion. Anything else would be incomopatible with an assumption of honesty rather than hypocrisy.
However when it turns out that ALL those promoting warming alarmism are funded by the state and all sceptics aren't in a world of millions of scientists it becomes a statistical impossibility that this is a coincidence. Or perhaps A & S will be the very first to name a single solitary "scientist" anywhere in the world, who promotes catastrophic warming and isn't so paid for it.
"nice if Scotland was a couple of degrees warmer"
And make it more hospitable? Hoots!
:-)
@Scots Renewables:
I must admit I do not come from a farming background, but it is my understanding that farmers are far more concerned about the impacts of weather than they are about those of climate.
Speaking only of US farmers, they are not a bunch of hayseed's who barely managed to get through high school. You'll find a large number are college graduates, some with graduate degrees, who are extremely knowledgeable, not only about farming, but all of the factors which may impact them. They know the vagaries of weather have far more impact than a changing climate. The "rapid" climate change you refer to is not so rapid that farmers famliar with changing markets, resource costs and the ups and downs of economic cycles are incapable of adjusting.
In other words, the massive disruption to the world's food supply is just another of the many unproven, unsustaintiable claims of the supporters of catastrophic climate change.
mbabbitt
Since one of the basic tenets of the environmental extremists is that we need to do away with "flourishing civilisations" and return to a Dark Age simplicity I would submit that the answer to your question is "yes"!Sounds like Frank Ackerman won't be answering any additional comment. Too bad. I wanted to thank him and his giant error bars for adding another piece to the "Socrates" argument.
As for Scots Renewables "societies in balance" claim, there is plenty of evidence that an indication of under-development for a society is (alongside and not independent from high maternal mortality when giving birth, and high infant mortality up to the age of three) its vulnerability to problems. IOW the more options you have, the more "developed" you are: if you can grow your own food or buy it at one of several grocery stores or large supermarket chains, you're obviously less vulnerable to food shortages than if you can only grow your own food. And if you live in an area that participates to the global economy, you're infinitely less vulnerable to famines (actually, you'll never ever experience one).
And so on and so forth. This reflects itself for example in the the number of hurricane-related deaths in Haiti vs Cuba vs the USA.
Therefore, the idea that we live in "societies [...] in balance with the current climate" is risible and actually quite offensive.
Maurizio:
Well said. So many Chicken Littles, so little falling sky!
If airport security were run the way CAGW believers think, we would be subjected every single time to untold numbers of invasive procedures, with no discernible benefit and plenty of costs in terms of frayed nerves and lost working hours...
....WAIT A MOMENT!!!
RE: Scotts renewables
"Societies are living in balance with the current climate in their area in terms of prevailing agricultural practices and the resultant economy.
Rapid climate changes are inevitably going to prove disruptive as the need to change the type of crops grown or modify current agricultural practices bring first crop failure then an extra cost burden as the society adapts."
This whole idea that society lives in tight balance with the environment, such that a tiny change in climate upsets the whole apple cart is absurd. Look how much the temperature has increased since 1850 - and nothing to do with AGW, yet agricultural productivity has come on leaps and bounds.
As to problems to agriculture caused by some warming of a few degrees - hardly. Agricultural productivity goes up with temperature - ever heard of greenhouses - you know, the real ones with glass in used by gardeners and market growers to boost productivity? Also, ever heard of growers where they boost productivity by increasing the CO2 saturation of the atmosphere to as high as 1,000 ppm? Or take a trip to the tropics - lots of verdant growth. Or perhaps go back in time to warmer periods such as the Carboniferous or Jurassic when temperature and CO2 were higher and the planet lush and green.
On the idea of plants (and animals) having tremendous sensitivity to climate, again this is also absurd. Nothing could be a more catastrophic change than digging up a plant and transporting it to a new climate. And yet plants (and animals) not only survive this huge climate shift but sometimes thrive. Take a look at palm trees growing in Britain. They do pretty well. In fact, most plants thrive like this providing there is sufficient water and the only thing likely to upset foreign/imported plants is frost, as any gardener knows.
The whole argument about climate change, agricultrual production getting worse etc etc is simply irrational and common sense and everyday experience shows it to be so.
When I decided to respond to the discussion of my work on Bishop Hill, I expected that my comments would be met with immediate and extreme disagreement from most respondents. I have to say that I you have collectively lived up to my expectations. I'd like to offer a special thanks to those who stopped and listened, and newly engaged with the substance of what I was saying - I did notice that there were some in the crowd.
To those who have, in one way or another, invited me to start re-debating the entire body of climate science: I've done that, and so have you, one more round won't help. May the best arguments win. As I understand it, many of you have argued that peer review of climate science does not guarantee its accuracy, and have called for re-examination of its contents to see if it makes sense, regardless of peer review status. The argument that I am making relative to Tol's economics is exactly parallel: a model that divides by zero is wrong, whether or not peer reviewers spotted that mistake. A model that relies on obsolete data is obsolete, whether or not peer reviewers approved it without calling for updates. If Tol's technique of counting peer reviewed publications as a measure of professional status is acceptable, then the climate debate is over (and the IPCC scientists have won by a landslide).
Just three specific responses, and then I've got to get back to work:
To the question from Bishop Hill about Andy Haines' misquote of my work: I sent him my blog post, and urged him to read the original paper; he thanked me for the response.
To Richard Tol's statement that the division-by-zero problem in his FUND model occurs in a part of the code that isn't used: it's described in the technical description to FUND as a key part of the calculation of climate impacts in agriculture (equation A.3). And when I made a one-line change in the code to eliminate the division by zero problem, it changed the model's SCC estimate quite substantially. If it was an unused part of the code, changing it wouldn't affect the results.
To the questions about worst cases, why look at the 95th percentile, etc.: it's true that if we were looking at the 95th percentile outcome for four independent variables, the probability of all four happening at once would be vanishingly small. That's not what the four factors considered in our paper represent, however; take a look at the paper. The discount rate is a matter of judgment and assumption; the level of climate damages is a significant unknown, to which no one has attached probabilities. Only one factor is a 95th percentile, namely the higher value for the climate sensitivity parameter.
In general, on worst cases, catastrophism, precaution: if you really believe that there are catastrophic risks at stake, as many people do with terrorism, for instance, then you take extreme precautions. Every airport now searches and x-rays people, to varying levels of rigor and unpleasantness, in order to prevent extremely rare worst-case outcomes, because they are so costly when they occur. Does your climate skepticism extend to airport-screening skepticism? Or does that strike you as a worst case worth worrying about? If you believe that extreme precautions are required in airports, because terrorist risks are real, then you're not really opposed to the precautionary principle, or catastrophism in areas where you recognize threats of catastrophe. You're just disagreeing about whether climate change is such a threat - back to the scientific debate, again. Those who think climate change is as much of a catastrophic threat as terrorism, naturally want to take precautions against it. (Equally naturally, those who don't think climate change is a threat will think that precautionary climate policies are a waste.)
Thanks to Bishop Hill for posting my comments, and thanks to all for listening to a different voice.
- Frank Ackerman
"When I decided to respond to the discussion of my work on Bishop Hill, I expected that my comments would be met with immediate and extreme disagreement from most respondents"
So you deliberately beclowned yourself just to get a reaction. It's so obvious now.
"To Richard Tol's statement that the division-by-zero problem in his FUND model occurs in a part of the code that isn't used: it's described in the technical description to FUND as a key part of the calculation of climate impacts in agriculture (equation A.3). And when I made a one-line change in the code to eliminate the division by zero problem, it changed the model's SCC estimate quite substantially. If it was an unused part of the code, changing it wouldn't affect the results."
I repeat: This affects your results. It does not affect ours.
Put differently: You borrowed our model, abused it, and blame us.
The juxtaposition of my WAIT A MOMENT sarcasm with Frank Ackerman making the same analogy from a completely different point of view, was priceless.
Suffice it to say the same line of reasoning was behind the Iraq war of 2003.
I guess Benjamin Franklin was right.
Frank Ackerman, thanks for commenting and posting. I hope you get some time to come back and discuss some of the more nuanced points about your work, and not about the science of climate change, since I think that should not be a part of the battle except in ranking or assumptions and how it affects percentiles.
Frank@Oct 27, 2011 at 3:27 PM
It is no good coming on here and trotting out the "precautionary principle". You are (actively or passively) advocating policies which will cost hundreds of billions of pounds (and especially disadvantage the poorest & most vulnerable), introducing "solutions" (which don't actually work very well) to "problems" that likely don't exist. The lack of affordable and reliable energy will (in the UK) drive jobs overseas, postpone any recovery from recession and hugely increase living costs and deaths from hypothermia. In the third world, similar policies will dash the hopes of the most vulnerable on the planet. But you obviously feel no need for any 'precaution' there!
It must be wonderful to be so arrogant.
Mr Ackerman has further spread his misinformation:
http://realclimateeconomics.org/wp/archives/1057
http://triplecrisis.com/for-whom-the-blog-tols/
Both are moderated blogs.
@ 'ThinkingScientist'
Your thinking is simplistic in the extreme. When seasons advance and rainfall patterns change crops fail. To talk of greenhouses and increased CO2 in controlled growing conditions is ridiiculous. We are talking about farming in the real world, something you appear to have no experience of.
A huge acreage of paddy fields in Thailand is currently under water. Tell the farmers living on roofs and in boats there at the moment that global warming is good for agriculture and see what they have to say.
Scots Renewables-
"Your thinking is simplistic in the extreme. When seasons advance and rainfall patterns change crops fail. To talk of greenhouses and increased CO2 in controlled growing conditions is ridiiculous. We are talking about farming in the real world, something you appear to have no experience of.
A huge acreage of paddy fields in Thailand is currently under water. Tell the farmers living on roofs and in boats there at the moment that global warming is good for agriculture and see what they have to say."
No what you have failed to do is point to anything that will happen in the future that has not also happened in the past and was not caused by climate change. Pointing to a flood is not proof of climate change, it is only proof that floods have happened, are happening, and will happen in the future regardless of whether there is human caused climate change or not.
All climate change says is that some of those events may happen more often. Would that be completely offset by some other region now being in a less hospitable environment to growing their own crops or less? No one knows. To say that it is only possible for net damages in any cirumstances is to discount many possibilities for many positives.
"low estimates of damages at low temperatures, and at high temperatures"
The basic point of this is that it assumes that under no circumstances will there ever be a net benefit. Could one flood in one area of the world wipe out the gains of increased production from all other areas of the world? You are saying they can, so then you should be able to point to a study that goes over all possible gains and losses and under no possible circumstances EVER will there be a net gain from CO2. As climate models have no regional focus, I would say you could not find such a study, which means you and the study's authors are assuming that there is no potential for gain whereas we are not discounting the possibility of it.
Floods in Thailand - I suspect there are dams that could have been built but were not because WWF now controls the World Bank and does not allow dams to be financed. Certainly the as damaging floods in Queensland in January this year would have been prevented if 16 known proposed dams had not been blocked since 1990 by the Labor-Green alliance there.
Richard Tol said: "Now, now. Very few things are directly observable. Most "observations" are either model or statistical constructs. This is true in physics, in chemistry, in medicine, and in economics."
We have economic, climate and CO2 data coming out of our ears for the last several decades at least. Has an empirical costing of CO2 emissions been made?
If the social cost of carbon is not observable how can we know if we are being taxed at the right level? Anything less than a directly observable cost will be an interpretation of evidence not the evidence itself which makes it a subjective metric not an objective one. The social cost of carbon is then, not the actual cost of carbon emissions but the cost of achieving an arbitrary policy outcome.
Opinions informing policy decisions are not a problem so long as they are honestly labeled as such. The substantial uncertainties, judgments and assumptions are admitted plainly enough. Opinions being bent into 'facts' by politicians and policy advocates *is* a problem and has already begun with this report which is unhelpful.
@Gareth
The social cost of carbon cannot be observed because it is placed in the future. Climate change and its impacts will unfold in a single, uncontrolled experiment.
Life is full of single, uncontrolled experiments. Yet, we make decisions all the time, some small, some big. People get married, for instance, before observing their spouse' character after 3 kids and 20 years of marriage. Universal education and suffrage were introduced without anyone really understanding the implications.
Climate policy is like that. You do not have the luxury of waiting for anything that comes close to a complete understanding of the system.
Richard Tol: I normally agree 100% with everything you say, but I would slightly amend the following: "The social cost of carbon cannot be observed because it is placed in the future. Climate change and its impacts will unfold in a single, uncontrolled experiment".
First, we have enough evidence since Keeling began the Mauna Loa measurements of atmospheric CO2 in 1958 to assess whether the social costs of the accretion thereof since then have been adverse or beneficial. Show me any evidence they have not been beneficial, with more than double the number of people alive now than there were in 1958, with average per capita incomes AND consumption of carbohydrate based foods more than double the levels in 1958 (rising [CO2] is a necessary condition for rising food production - but nowadays there are no academics aware of that concept).
Secondly, although you are one of a tiny handful of climate "scientists" who has done some econometric analysis, even you did not evaluate the roles of BOTH rising atmospheric CO2 and water vapour ([H2O] on food production.
The IPCC (Solomon et al.2007, Stern 2007, Garnaut 2008,2011) all refuse to admit that CO2 and H2O have anything to with food production, and the egregious Muller, Mendelsohn, and Nordhaus (AER 2011) propose that all crop and livestock production should be taxed out of existence because as they allege, the costs of their GHG emissions exceed their value added. We all know that Americans prefer synthetic food to the real thing - and that Yale faculty will say anything to keep their PC students from battering down their doors (luckily their students know nothing of Mendolsohn Nordhaus AER 1994 who showed that warming would actually increase food production in the US, but that was before Obama Holdren et al came to power).
@Tim
We should use whatever data is available to calibrate and estimate our models. However, climate policy seeks to affect the future, not the past, and the future is unobservable. Extrapolation is difficult. For instance, many people worry, rightly or wrongly, about the impact of climate change on malaria. You can look at whatever data you want, but you won't find the recently developed vaccine in there.