The cover of the December 5 issue of The Economist read "Stopping climate change". Which of course can’t happen. The climate will change, and there is nothing mankind can do about it – or that we ought to do about it. Climate changes all the time for reasons that we only sort of understand. Trying to interfere with normal changes in our climate could cause problems greater than anything we can imagine from global warming.
But of course, that is not what The Economist was talking about, nor is it what the world leaders who are meeting in Copenhagen mean, either. What they are worried about is climate change caused by man, especially climate change caused by putting more and more carbon dioxide into the air. (Note: "Climate change" is the new name for what used to be called "global warming". Global warming worked as name until, in the last few years, average temperatures stopped going up.)
For years we have been told that all of the carbon dioxide that is going into the air is causing temperatures to rise, and that we are reaching a point where we need to do something or the earth will be in big trouble. The collapse of the real estate bubble put a lot of people under water financially. Climate change, we are told, will put a lot of people under water literally.
But several weeks ago there was a big brouhaha over a large number of either stolen or leaked e-mails from the Climate Research Unit at the University of East Anglia in England. (Actually, there was a big brouhaha on some parts of the Internet; it was not that big in most of the mainstream media.) Some people felt that the stolen/leaked e-mails showed scientists at East Anglia threatening to prevent people who disagreed with them from publishing, talking about using statistical "tricks" to "hide the decline" in temperatures that did not fit their theories, etc.
Those who believe in climate change jumped to East Anglia’s defense: The problem is still real. The solution is still the same. The stolen e-mails were quoted out of context. Other databases give you the same information.
There is a logic to the idea that putting more CO2 into the atmosphere will cause things to warm up. As I understand things, that is what basic science tells us. And if the increase in CO2 was the only thing that affected the climate, if it was the only variable, the answer would be clear. But CO2 is not the only thing. There are lots of things that affect climate. To figure out what a big increase in CO2 is going to do to temperatures in the future, you have to know a lot of things. You have to know all of the other things that affect temperatures, too. You have to know how they are going to change in the future, also. As CO2 levels go up, what happens to these other things? Are they pushing temperatures up, too? If so, are they pushing temperatures up because CO2 levels are going up or are they going up independently, for some other reason? Or, alternatively, as CO2 levels go up, are these other things pushing temperatures in the opposite direction? And if so, are they pushing temperatures down independently of CO2 levels or are they pushing temperatures down in a reaction to CO2 levels pushing temperatures up?
In order to figure out what is going to happen in the future, you have to come up with a model (which is whole bunch of formulas all tied together). This model will tell you, for example, what will happen to global temperatures if CO2 levels go up by X or what will happen if they go up by 2X. It is the models that are the key to all of the predictions that are made about climate change.
Which raises a big question. Because while we can all understand the simple scientific explanation of why an increase in CO2 in the atmosphere would cause temperatures to go up if CO2 was the only variable, I do not know how many experts really understand all of the intricacies of the models and formulas that are used to predict the consequences of increased levels of CO2 in the atmosphere.
The stolen/leaked e-mails from East Anglia may be more interesting, but what would be more useful would be an analysis of the models and formulas used by the scientists of East Anglia. Think about models in other areas. According to the Obama administration, their economic model told them that, if Congress did not pass the stimulus last February/March, unemployment would go to 9%, but if the stimulus was passed, unemployment would peak at only 8%. Oops. Something went wrong there.
Similarly, AIG had fancy financial models that told them how to calculate risk and protect themselves in all kinds of market situations. Banks had a model developed back in the 1990s called the "value at risk" or VaR model which told them how risky their portfolios were.* Oops again. Warren Buffet may have said it best, at least with respect to financial models, when he said, "Beware of geeks bearing formulas."
This is my concern with the arguments about climate change. It’s not just the proponents we are supposed to believe. It’s their models and formulas that we have to trust, and we have no way to test them. We have no way to know if the models are really considering everything or whether the formulas are set up properly so that everything works together even approximately right.
But the risk is too high, we are told. We can’t take a chance. We have to act. No, that is not the proper conclusion. The proper conclusion is that we can’t take a chance on spending all this money on something that could be a waste, especially when there are real things we can do today that would make people’s lives better now.
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* See L. Gordon Crovitz, "The 1% Panic," The Wall Street Journal, October 13, 2008, and "Behind AIG’s Fall, Risk Models Failed to Pass Real-World Test," The Wall Street Journal, November 3, 2008.
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