Friday, February 14, 2003

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When environmentalists pretend they're economists

When journalists have to state what the effects of global warming will be in the future, they rely on the The Intergovernmental Panel on Climate Change (IPCC). The IPCC describes itself as follows:

The role of the IPCC is to assess on a comprehensive, objective, open and transparent basis the scientific, technical and socio-economic information relevant to understanding the scientific basis of risk of human-induced climate change, its potential impacts and options for adaptation and mitigation. The IPCC does not carry out research nor does it monitor climate related data or other relevant parameters. It bases its assessment mainly on peer reviewed and published scientific/technical literature.

In other words, the IPCC is supposed to be a nonpartisan group of experts. They were the ones who concluded in January 2001, based on a plethora of different projections, that "globally averaged mean surface temperature is projected to increase by 1.4 to 5.8°C over the period 1990 to 2100.” Which of course leads to mass media outlets blaring "WORLD TEMPERATURES WILL INCREASE BY UP TO SIX DEGREES BY 2100"

Now it turns out that even the optimistic projections could be too pessimistic. The Economist reports that two distinguished statisticians (Ian Castles, former President of the International Association of Official Statistics, and David Henderson, formerly the OECD's chief economist) have judged the IPCC report to be "technically unsound," which is social-sciencese for "your methodology sucks eggs."

What's unsound? To see the actual critiques, click here, here, here, and here. Let me explain. No, that would take too long -- let me sum up:

1) They used incorrect exchange rates. In calculating the relative distribution and growth of global output, the IPCC relied on market exchange rates rather than purchasing power parity (PPP) rates. Now, in doing this, the IPCC drastically underestimated the actual size of developing country economies by a factor of three.

Why does this matter? By underestimating third world GDP, the panel vastly overestimated the energy intensity of these economies. Since these economies are in fact more efficient -- three to four times more efficient -- than estimated, they generate CO2 emissions at a much lower rate than the IPCC thinks. To quote the statisticians involved, "The practice of using [market] exchange rate conversion is especially inappropriate in relation to projections of physical phenomena such as emissions of greenhouse gases and aerosols." This is because PPP rates better reflect local economic conditions, and therefore are a better base from which to craft predictions about increases in production facilities and infrastructure.

2) The projections vastly overestimate developing country growth. The IPCC vastly overestimated past growth rates and in their extrapolation to the future rely on wildly unrealistic growth figures for the next century. In the IPCC's most environment-friendly scenario, i.e., the one with the lowest economic growth:

the average income of South Africans will have overtaken that of Americans by a very wide margin by the end of the century. In fact America's per capita income will then have been surpassed not only by South Africa's, but also by that of other emerging economic powerhouses, including Algeria, Argentina, Libya, Turkey and North Korea.

One of the statisticians notes that, "The total output of goods and services in South Africa in 2100, according to these downscaled [IPCC] ... scenario projections, will be comparable to that of the entire world in 1990."

To quote South Park, "Dude, that's some pretty f@#&ed-up s*@% there."

3) The IPCC projections for the last ten years can be shown to overestimate carbon dioxide emissions by a factor of two. I'll just quote one of the documents here:

For fossil CO2 emissions, the standardized increase for the decade 1990 to 2000, calculated in the way explained in Box 5-1 was 0.91 GtC, or 15%. The most widely quoted estimate of the actual increase for the nine-year period 1990-99 (that published by the US Department of Energy-sponsored Carbon Dioxide Information Analysis Centre) is 0.35 GtC, or 6%. On average, therefore, the four unadjusted marker scenarios appear to have overstated actual growth in fossil CO2 emissions in the 1990s by a factor of about 2: a surprisingly wide margin having regard to the fact that trends in emissions for the greater part of the decade were already known at the time that the projections were produced. (my italics)

Of course, I'm sure France will simply argue that since the IPCC report is in substantial compliance with known econometric techniques, it's fine the way it is. For the rest of us, it appears that the primary estimates for global warming have been grossly exaggerated.

posted by Dan on 02.14.03 at 04:39 PM


As I recall, the much maligned Lomberg accepts the IPCC estimates--and concludes that, though disaster is coming, the costs of preventing it exceed the costs letting it happen.
If the Castles-Henderson critique is correct, then Lomberg was not skeptical enough of environmentalist assertions.

posted by: Skeptic on 02.14.03 at 04:39 PM [permalink]

South Africa surpass the US? Um, they first need to beat a lot of problems, especially crime - and North Korea as an economic powerhouse surpassing the US? Are they kidding? A lot of places there don't even have grass because people ate it. The farm system is broke, and the whole ecomony has been jammed into a psycho leadership elite and a 1950s era military, which is basically a cult with nuclear weapon technology. Throw in a huge lack of capital to invest or trade with. Yeah, they sure sound like a multinational trade giant in the making.

Actually the super environmentalists should love one thing about North Korea - almost nobody has cars.

PS Good to see MSNBC has Chris Jansing back on the air - What a classy lady!

posted by: David Powell on 02.14.03 at 04:39 PM [permalink]

Your point 3 is misleading. The rate of growth may have been overestimated by a factor of two but what is important for global warming is the actual amount of emissions and 1.15 vrs 1.06 is an overestimate of 8.5% not a factor of two.

posted by: James B. Shearer on 02.14.03 at 04:39 PM [permalink]

Shorter James B. Shearer: Daniel Drezner's summary sucks eggs.

posted by: space on 02.14.03 at 04:39 PM [permalink]

Repeat a 15% growth rate 100 times, and you get a final result of 1,174,313 times the original figure. Repeat a 6% growth rate 100 times, you get 339 times the original figure. That is a difference in GDP of over 3000 times by the end of the century. Use 3%, and you get only 19 times the original figure. The wonders of compound interest.

posted by: rvman on 02.14.03 at 04:39 PM [permalink]


Those growth rates were per decade, not per year.

The point is still valid - accumlating 15% per decade for a century results in a far bigger number than 6% per decade.

The error is a factor of 2 (2.259 if we are counting).

That's still a significant error.

posted by: Phil on 02.14.03 at 04:39 PM [permalink]

The problem with junk science, and the IPCC report is a perfect example of it, is that factual repudiations make no difference to the true believers. Like religion, the global warming believers care not a bit for the science, except insofar as it can be used to bolster their preconceived belief.

Poking holes in the IPCC report will have as much effect on Kyoto true believers as analyses of the Shroud of Turin have had on Christian fundamentalists' belief in God. Even if they accept the specific factual basis of the criticism, they will just seize upon something else, and will never even notice that the shroud had nothing to do with their underlying belief in the first place. It was just a useful story. There are many such.

posted by: Michael Gersh on 02.14.03 at 04:39 PM [permalink]

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