an injunction should not be granted as, though "dressed up" as a claim in contract, the real complaint was one of defamation.Eli senses a David Irving moment in the offing and people willing to help Chis step off the cliff.
The authors looked for, and found a dissolved oxygen anomaly consistent with the methane being food for a bacteria bloom and also found the methylotrophic bacteria who were snacking on the free food. Moreover, as anyone who feeds birds could tell you, the nature of the bacterial colony changed from June, when there were no methylotrophs, to mid August after the food had been laid out. A simple model (from the paper shown to the right) shows how the methylophiles moved in. There are, as usual some complications, but that is the basic picture.Previous arguments have been forwarded for the massive release of CH4 from the marine sub-seafloor in the geologic past. An open issue is the fate of released CH4 and whether it enters the atmosphere, is oxidized in the ocean, or some combination of both processes. Our work suggests by analogy that large-scale CH4 release to the deep ocean from gas hydrates or other natural sources may foster a rapid methanotrophic response leading to complete oxidation of CH4 to CO2 within a matter of months. Thus, aerobic methanotrophic bacterial communities may act as a dynamic biofilter that responds rapidly to large-scale CH4 inputs into the deep ocean.The important caveats are that the release happen at depth into a fairly cold region where the methane dissolves rather than bubbling to the surface and that it is not large enough to saturate the solubility.
HO is generated by photolysis of ozone yielding an excited state singlet oxygen atom which reacts with water vapor to form OH. It then reacts with pretty much any volatile organic compound, EXCEPT CFCs and fluorocarbons (which is why they are problematic from the atmospheric point of view), which eventually degrade to CO2 and H2O. Previous work monitoring methyl chloroform [CH3CCl3] and [CO] found an interannual variability of 7-9%.
and the news is, why yes, it is constant after 1998, from which Montzka, et al. conclude that the interannual variability is small, about 2.3 ± 1.5% between 1998–2007. They believe that previous measurements were in error because of uncertainties in the amounts that were put into the atmosphere. The lag is probably related to the mixing time in the atmosphere, the time needed to mix the methyl cholorform completely and wipe out any gradients. [UPDATE: Clearly shown by the difference between the northern and southern hemisphere values up to ~1998.] There are the usual caveats, but taking Willis Eschenbach's advice, Eli simply says that the oxidative capacity of the atmosphere is constant.
At the conclusion of his Revelle Medal acceptance speech Pieter Tans well captures the ethical need for those who study atmospheric carbon contamination to speak outAs climate scientists we now find ourselves in the situation that our subject is widely understood to be so relevant to society that many powerful interest groups feel threatened. Thus, we are facing a well-organized and well-funded campaign attacking our science and our integrity, spreading confusion and disinformation. This is not surprising, as mitigating climate change goes to the core of our energy supply system and the broader economic system. Human-made climate change demonstrates that we cannot continue business as usual. Should we ignore the deliberate lies and manipulations we face and stick purely with the science, hoping that sound judgment and compassion will eventually prevail? We are scientists, but we are also citizens. It is our civic responsibility to redouble our efforts to convey to the public clearly the urgency and the essence of the climate change problem. The kind of world we leave to our children and grandchildren depends on it. It will have to be a world that has as one of its guiding principles a Sanskrit prayer that was used as a dedication in the above mentioned 1972 book: “Oh Mother Earth, ocean-girdled and mountain-breasted, pardon me for trampling on you.”Earlier at Climate Science Watch and Climate Progress, but IEHO they both buried the lead. This is but the latest instance of a distinguished scientist concluding that he can no longer stay hidden on the sideline but has a moral responsibility to speak out in public. It is a signal failure of the denialists that they have created the backlash. But they can't help themselves, the poor dears. It is also, as Ethon pointed out, a stick in the eye for the Honest Broker.
The pattern of antiscientific tactics by the merchants of doubt is often constant across many different topics, the authors write. Frequently, personal attacks against individual scientists are used in lieu of addressing the substance of their conclusions. cherry picking of single outliers to counter well supported general results is common. The elevation of caricatures of the real science as straw men to knock over is ubiquitous.elegantly nailing Judith Curry to a exploding Italian flag without naming her
But one of the strongest methods to deflect attention away from what the science has actually concluded is to find ways to exaggerate the mount of uncertainty. since there is always uncertainty in science - scientists work at the boundary between known and unknown - any strongly supported result can be politically "countered" by reference to uncertainty in an assumption, a piece of data, or an experimental procedure regardless of how well characterized that uncertainty is or how robust the original result. This tactic implicitly constructs the logical fallacy of suggesting that because we do not know everything, we therefore know nothing.For some time, Eli has been screaming that teh science denial lives in a funhouse of cards, while the coherence of science provides strong support for its conclusions.
Denialism is reduced to throwing spaghetti against the wall and hoping that something sticks which leads to claiming that every one of a set of mutually contradictory papers are just wonderful.In painting a picture of the world, a scientists look for support and contributions from many observations, not just a single point. As Gavin points out any single point has an uncertainty, which is why wise Rabetts look at the entire structure. While the so called statistical "gold standard" of two standard deviations is often invoked as being dispositive, experience tells us that it alone is neither necessary nor sufficient. First, there is that other 5%, which though small is not zero, and has hidden some real dross. Second, a statistical result without theoretical underpinning is number gathering. It is an alert to the bunny brigade to generate new experimental and laboratory work to test the numerology. Third, there are the twp cherry picking effects, direct (someone in love with their new toy) and indirect (journals love to publish bombshells)
l increase mean anything at all?At a casual meal on the weekend, I met a couple in town from Iqualit. The capital of Canada's northern Inuit territory of Nunavut is located on Frobisher Bay in southern Baffin Island.
They told me that when they left home in mid-December, the ice on Frobisher Bay was not frozen. I almost coughed up my food; that can't be possibly be typical for December.
OUR topics this morning are global warming, evolution and feathers. Let's start with the warming. Despite a frenzied last-minute drive involving snowstorms in Europe and the eastern United States, planet Earth failed to save itself from another last-place finish in 2010: once again, it was the least cold year on record. . .and ending with
By itself, as we always say, one hot year doesn't prove anything. The fact that every one of the twelve hottest years on record has come since 1997 is a little harder to wave away. 2010 was also the wettest year ever, corresponding to the expectation that higher heat means more water vapour. . . . It is of course possible that global warming plateaued this year; it's also possible that it plateaued this morning. One can always hope! For now, though, this is the basic shape of things:
As to why George Will buys this stuff, I have no explanation. Maybe, in the internet age, we're all effectively getting our memories wiped every week or two, and it's as if we don't remember the sequence of events; everything is presented simultaneously. Or maybe we selectively wipe our own memories of the sequence of events when they threaten to prove inconvenient to our interests or our ideological predispositions.Ta
For the concern trolls out there, the snark (mostly at the end when everyone gets impatient) is shown in red. Avert your eyes. More seriously as Andy Dessler says, this is an example of how scientists communicate with each other. It can get rough in the tea room, something that the stolen UEA emails showed and which led to a huge amount of tutt-tutting.
To keep things clear Eli has added siggies where the actual Emails did not have them.
-------------------------------
SPENCER Email to Dessler 11 December 2010:
In retrospect, my questioning of the timing has distracted from the central science issues, and was a bad move on my part. My apologies to Andy.
-Roy
-------------------------------
ER NOTE: This correspondence was copied to about 25 people, scientists, bloggers, journalists and various thereofs.
--------------------------------
SPENCER Email to Dessler 11 December 2010:
...but I stand by my assertion that Andy’s paper is a step backwards for science. I would debate him or anyone else on this issue in a public or professional forum at any time.
I would be happy to submit a response to Science if I thought it had “a snowball’s chance”, but many of us have learned over the years that the editorial process there is quite biased on the subject of anthropogenic global warming.
BTW, I have stopped corresponding with Andy after he made public our e-mail exchange without asking me.
Roy Spencer
---------------------------------------
DESSLER Email to Spencer 11 December 2010:
Roy-
I certainly accept your apology.
…but I stand by my assertion that Andy’s paper is a step backwards for science. I would debate him or anyone else on this issue in a public or professional forum at any time.
I ACCEPT! Let’s start immediately. Since you’re willing to do this essentially anywhere and anytime, I say we do this via e-mail. And since you want this to be public, I pledge to post the entirety of all of our e-mail correspondence on a blog that everyone can read (and since you also have copies of our correspondence, you’ll also be free to post it).
If you accept (and I don’t see how you can refuse given your statement above), then you can begin by answering this e-mail I sent to you yesterday:
Hi Roy-
I wanted to follow up on our interesting discussion. My main question involves your theory of cause-and-effect for an ENSO. During our first e-mails it seemed you were saying it was caused by clouds, but then things seemed to change. Could you send me a short summary of what’s driving the temperature changes during those cycles?
Thanks!
I look forward to a renewed and energetic discussion of these issues. After all, this is how science is supposed to operate.
And to the reporters on this e-mail, I hope you all see that the mainstream science community is pushing to engage the skeptics. I hope Roy shows that skeptics are similarly willing to engage.
Regards,
Andy Dessler
--------------------------------------
SPENCER Email to Dessler 13 December 2010:
Andy:
Sorry about the late reply…I wanted to get to the office to look at some IPCC model output that might help shed light on this.
So, since you want to talk about ENSO, let’s do that.
Of all the IPCC AR4 climate models, the one that has the best match to observed sea surface temperatures (SST) related to ENSO is CNRM-CM3 (see Fig. 8.13 from the IPCC AR4 Report).
Figure 8.13. Maximum entropy power spectra of surface air temperature averaged over the NINO3 region (i.e., 5°N to 5°S, 150°W to 90° W) for (a) the MMD at the PCMDI and (b) the CMIP2 models. Note the differing scales on the vertical axes and that ECMWF reanalysis in (b) refers to the European Centre for Medium Range Weather Forecasts (ECMWF) 15-year reanalysis (ERA15) as in (a). The vertical lines correspond to periods of two and seven years. The power spectra from the reanalyses and for SST from the Hadley Centre Sea Ice and Sea Surface Temperature (HadISST) version 1.1 data set are given by the series of solid, dashed and dotted black curves. Adapted from AchutaRao and Sperber (2006).
The first attached plot shows 20 years (1980-2000) of monthly anomalies in global radiative flux and surface temperature from that model’s 20th Century runs:
[PLOT OF CNRM-CM3 TIME SERIES}
A scatter plot of the data is next:
[CNRM-CM3 SCATTER PLOT]
See the spirals? Thats due to radiative forcing of SSTs. How do we know? Because there are only two possibilities: radiative changes (directly or indirectly) causing temperature changes, or temperature changes (directly or indirectly) causing radiative changes (by definition, feedback). The reason the spirals appear is that the radiative forcing is proportional to the CHANGE of temperature with time…not the temperature directly. Feedback is essentially instantaneous with the current radiative state of the armosphere and surface.
This is shown in the following lag correlation plot for the entire 20th Century:
[LAG CORRELATION PLOT]
That atmsopheric circulation changes alone can cause ENSO-typ behavior was also demonstrated by this paper in GRL, The Slab Ocean El Nino.
AGAIN I want to emphasize…the evidence for the direction of causation is whether a lag exists or not.
The NEXT question is to what extent this de-correlated behavior affects the regression slope…this was a subject of our 2010 JGR paper. All I know so far is that, on average, it biases the regression slope toward zero (which could be misinterpreted as a borderline unstable climate system).
-Roy
----------------------------------------------
DESSLER Email to Spencer 14 December 2010:
Roy-
Thanks for your message … I knew you couldn’t stay mad at me 
Before I get into the details of the correlation, I’d like to get one thing straight: you’re arguing that the warming during an El Nino is caused by radiative heating by clouds. Right?
Once you confirm that, we can move on with the discussion. If you’re not saying that, then I’m confused by your message — in that case, I’d appreciate it if you could please explain the role of clouds in driving surface temperatures variations during ENSO.
Thanks!
Andrew Dessler
----------------------------------------
SPENCER Email to Dessler 15 December 2010:
Andy:
Feedbacks and forcings involve *temperature* changes, not abstract concepts like “El Nino”. Thus, your question is a bit of a red herring.
What I *AM* saying is that the time-evolving nature of the temperature and radiative flux anomalies is consistent with a significant, non-feedback cloud-induced temperature change. That is what the phase space analysis reveals.
Now, what all of this might mean for how El Nino & La Nina evolve over time is an interesting question, I agree,…I’m just trying to make sure we don’t lose sight of the quantitative evidence. Whether the evidence I am talking about necessarily implies a non-feedback role for clouds in how El Nino and La Nina evolve over time, that is a separate question.
-Roy
--------------------------------------------
DESSLER Email to Spencer 18 December 2010:
Roy-
Thanks for your response. I would have gotten back sooner, but I was at the AGU meeting.
What I *AM* saying is that the time-evolving nature of the temperature and radiative flux anomalies is consistent with a significant, non-feedback cloud-induced temperature change. That is what the phase space analysis reveals.
The problem here is that correlation is not causality: if I beat a drum during an eclipse, the Sun will return 100% of the time. You could claim that the time-evolving nature of the drum beating and return of the sun is consistent with a causal mechanism, and you’d be right. It is indeed consistent. But it’s also wrong — we both know that the drum does not make the Sun return.
The existence of a correlation does not mean that there is a causal link — so we cannot conclude that the correlation you’ve identified tells us anything about the role of clouds in generating ENSO surface temperature changes.
Rather, we have to look at the energy budget of an ENSO event. Those data contradict the idea that clouds are important in ENSO: analyses of the heat budget of ENSO (e.g., Trenberth et al., 2010: Relationships between tropical sea surface temperatures and top-of-atmosphere radiation. Geophys. Res. Lett., 37, L03702, doi:10.1029/2009GL042314 and references therein) don’t show a role for clouds.
In fact, the original Cane and Zebiak model of ENSO does not really even have clouds in it
So my question to you is whether there exists any physical evidence (beyond just the correlation) that clouds play any role at all in generating ENSO temperature variations?
Thanks!
Andrew Dessler
---------------------------------------------
SPENCER Email to Dessler 20 December 2010:
Andy:
OK, I think now you are raising the possibility that what I am calling a “non-feedback radiative forcing” was at some previous time itself a feedback upon temperature. If that were the case, then there would be a lagged correlation, and you would then need to do your feedback parameter diagnosis at some time lag between the radiative flux and temperature data…not simultaneously. This is what Lindzen has been trying to get published, and is another way of getting a feedback estimate.
But it is not what you did in your Science paper. When I do it with the same 10-year CERES dataset you used, I get a very different result…outside the range of most if not all climate models.
-Roy
----------------------------------------
DESSLER Email to Spencer 21 December 2010:
Roy-
Let me be clear: I am not “raising any possibilities” here. What I am trying to do is get you to articulate YOUR THEORY of ENSO causality. I’ve been trying to do this since our initial e-mail and trying to get a straight answer is beginning to feel like eating jello with chopsticks.
So let’s get back to the issue at hand: Do you have any physical evidence that clouds are playing a significant role in causing temperature variations during ENSO (besides the correlation, which (I think) we agree does not prove causality)? If so, what is it? If not, do you concede that I have the correct direction of causality in my paper?
After we resolve this, we can start talking about lags, etc.
Thanks again for your willingness to engage in discussions on this issue!
Andrew Dessler
------------------------------------------------
SPENCER Email to Dessler 22 December 2010
Andy:
How can you insist I answer a question, the answer to which would not refute (or prove) what we demonstrated in Spencer & Braswell (2010 JGR) anyway?
You can ask me, “Do you still beat your wife?”, and I’m not going to answer yes or no to that one either.
Remember, it is not me, but YOU who is claiming our results necessarily imply that clouds are part of the forcing of ENSO-related temperature changes…and you might well be right. If so, congratulations on your finding.
And I would say this interpretation IS entirely reasonable: that a change in the trade winds associated with the initiation of El Nino causes a change in cloud cover, which then is part of the forcing of El Nino-related temperature changes. THAT sounds entirely reasonable to me, and is consistent with the evidence we presented.
But that does NOT mean “clouds cause El Nino”.
Don’t confuse qualitative statements like these with what we showed QUANTITATIVELY in Spencer & Braswell, which was a simple statement of the CONSERVATION OF ENERGY:
The satellite data show radiative imbalances causing temperature changes with time.
That’s just a statement of the 1st Law of Thermodynamics. Are you claiming the 1st Law didn’t apply during 2000-2010?
Maybe YOU should answer THAT question before we continue the discussion.
But if you continue to insist on me answering “yes or no” to a question that is not relevant to what we are debating, I suggest we end this now.
-Roy
--------------------------------------
DESSLER Email to the list 26 December 2010:
For those not following closely, let me recap the argument that Roy and I are having. In my research paper, I showed that the energy trapped by clouds increases as the surface temperature increases, and concluded that there is a positive cloud feedback acting. Roy objected to this saying that clouds are actually causing the surface temperature change, so I have cause and effect backwards. My response to this is that the temperature variations over the last 10 years are primarily driven by ENSO, and we know that ENSO is not caused by clouds.
This is the crux of our disagreement. In his last e-mail to me, Roy said, “The satellite data show radiative imbalances causing temperature changes with time” and “Our analysis shows that non-feedback cloud variations do cause large amounts of temperature variability during the satellite data period in question.”
But neither of Roy’s claims seem correct to me. I do not think he’s actually demonstrated that clouds are causing temperature changes.
To resolve this, I pose the following question to Roy: can you summarize for everyone on this list the evidence that clouds are affecting surface temperature over the last ten years. And can we quantify how much are clouds affecting the surface temperature? Are they responsible for 1% of the variance, or 99% of the variance, etc.?
And to show you that I am willing to answer your questions, I will answer the question you posed to me in your last e-mail: “Are you claiming the 1st Law didn’t apply during 2000-2010? Maybe YOU should answer THAT question before we continue the discussion.” The answer is that I do not dispute that the first law applies. I agree that energy is always conserved.
Happy holidays.
Thanks!
Andrew Dessler
---------------------------------------
SPENCER Email to Dessler 30 December 2010:
OK, let me see if I can briefly summarize my side of this…
The evidence that clouds cause a substantial portion of the temperature changes during the ten-year period in question is twofold:
(1) the temperature changes tend to lag the radiative flux changes, something that is revealed by “connecting the dots” in the scatterplots of radiative flux-vs-temperature, and
(2) this lagged behavior strongly decorrelates the temperature-versus-radiative flux variations (as is seen in Andy’s, and virtually all previously published, scatter plots of this type).
This poorly-correlated behavior is consistent with the short-term behavior of most if not all of the AR4 climate models, and was mimicked by our simple forcing-feedback model, both of which we published in JGR earlier this year.
In contrast, feedback (temperature causing cloud changes, which is what Andy believes is going on) is much closer to simultaneous, which would lead to strongly correlated data (which is seldom observed…except on month-to-month time scales).
Our JGR paper also demonstrated that this decorrelation was not simply due to noisy data…”connecting the dots” (phase space plots) shows looping and spiral patterns, rather than the zig-zag patterns one gets with random noise.
In the big picture, what the satellite data suggest is a sort of meandering of the climate system through varying states of radiative IMbalance, with the temperature changes always trying to play catch-up with the radiative flux changes, …but then the atmospheric circulation causes another change in cloudiness, and the temperature then has to slowly respond to that, too, …etc. Radiative equilibrium is never actually reached.
Regarding Andy’s question of just what percentage of all of the variability is due to “forcing” versus “feedback” is still an open question. All I know is that the “forcing” so strongly decorrelates that data that doing linear regression to get a feedback estimate is going to result in a regression slope approaching zero, which is then commonly misinterpreted as strongly positive feedback.
(We also showed in our JGR paper that short satellite periods of record can even lead to a bias in the direction of NEGATIVE feedback…but this is much less likely than a bias in the direction of positive feedback.)
-Roy
--------------------------
Dessler e-mail to Spencer 3 January 2011
Roy-
Happy new year!
Thanks for your response. I do think we are making progress now.
In your last message, you confirm that the only evidence supporting your hypothesis is the observed correlation between surface temperature and cloud radiative forcing as well as what you refer to as "decorrelation" of the data.
Because of the complexity of the Earth, there are always multiple hypotheses for every correlation. For the observed correlations you note, I have a competing hypothesis which I think explains the data better than yours.
Here is mine: the heating the surface is caused by energy stored in the ocean. This drives changes in atmospheric circulation, which change clouds. Clouds play a very small role in the surface energy budget during ENSO.
There are several strong pieces of evidence that support my point of view:
Spencer e-mail to Dessler 7 January 2011
The peak correlation of the satellite data in the plot was 0.68, at 11 months lag. At zero lag, the correlation is only 0.27. (What was the correlation of the data you showed in Fig. 2 of your Science paper? I did not see one listed.)Dessler e-mail to Spencer 10 January 2011
Lindzen e-mail to Dessler 11 January 2011Dessler e-mail to Lindzen on 14 January 2011Spencer e-mail to Dessler on 14 January 2011Lindzen e-mail to Dessler 14 January 2011Dessler e-mail to Spencer on 17 January 2011Dessler e-mail to Lindzen on 17 January 2011Lindzen e-mail to Dessler on 17 January 2011Dessler e-mail to Lindzen 19 January 2011Lindzen e-mail to Dessler 19 January 2011Dick-
It seems that your argument about time scales interfering with feedback calculations is predicated on clouds causing climate change (i.e., clouds acting as a non-feedback radiative forcing).
I had previously asked you if you had any evidence that clouds were actually causing temperature variations over the last 10 years, and you dodged it.Changes over a ten year period are irrelevant. That changes in clouds must cause changes in temperature is simply basic physics.
Andy Revkin e-mail to the list 19 January 2011Dessler e-mail to Revkin 19 January 2011Lindzen e-mail to Dessler 20 January 2011Spencer e-mail to Revkin 20 January 2011Dessler e-mail to Lindzen 20 January 2011Dessler e-mail to Spencer 20 January 2011Spencer e-mail to Dessler 20 January 2011"I see now why you can't get your work on this published in peer-reviewed journals":)
Lindzen e-mail to Dessler 20 January 2011
Capillary action and adhesion are things that always gets mentioned at the start of Gen Chem II, with the standard picture, and maybe even Eli brings a narrow tube in to show how water colored with laser dye gets pulled up and accompanied by the standard eye rolling in the audience. The physical reason for this is that the water has a stronger attraction for the surface of the tube than for itself, so it "attaches" and pulls itself.Brian Baird (D-WV) - We're going to start with the basics: why the ocean is acidifying, why we think the climate will change. i don't think we've made the case for the basic phsics and chemistry of these two phenomina and presented the evidence that it is happening
Bob Inglis (R-SC): i would encourage the scientists to come to these hearings with great glee, to show the data that they have discovered and to present it in a winning way. . . If they come with an attitude of defensiveness then it will support those who say "This is a bunch of hooey and we don't need to spend any money on it."
How to describe the loss of biodiversity has become an issue here at Rabett Run, and Eli would like to offer a few thoughts. The FUND model, and most of the bunnies are looking at whimper like loss, loss of a percentage of species over time. The back and forth revolves around how to value this loss, but more concerning and more immediate is the bang model, rapid loss of a few, or even one key species. In climate speak, a large explosive volcano, an ozone hole as it were rather than a thinning of the ozone layer.* Wright, S.J. and Muller-Landau, H.C. (2006) The future of tropical forest species. Biotropica 38, 287—301 (pdf)Google Scholar provides an enhanced reading list
* Wright, S.J. and Muller-Landau, H.C. (2006) The uncertain future of tropical forest species. Biotropica 38, 443—445 (pdf)Blogs:
* Brook, B.W. et al. (2006) Momentum drives the crash: mass extinction in the tropics. Biotropica 38, 302—305 (pdf)
* Gardner, T.A. et al. Predicting the uncertain future of tropical forest species in a data vacuum. Biotropica 39 25-30 (pdf)
* Laurance, W.F. (2006) Have we overstated the tropical biodiversity crisis?. TRENDS in Ecology and Evolution 22 65-70(pdf)
---------------------I am impressed to hear that the GDP/capita in developed world will be $400K ... those people will be *rich*.
18/1/11 12:04 AM
[Ayres & Warr still make me nervous that the ~3% discount rates come from a century of cheap fossil fuels, and while I've asked often, no one has yet to give me a a clear reason why the discount rate should overall be positive for 2100. it would be awfully nice of the part of economics that seems to want to be physics had cosnervations laws and similar things to help reality checks.]
Marlowe J asks " more stuff on climate policy/economics please.-------------------------
Glad to Marlowe
Boy oh Boy, is this a beehive of stupidity or what.
John Mashey says:
[Ayres & Warr still make me nervous that the ~3% discount rates come from a century of cheap fossil fuels, and while I've asked often, no one has yet to give me a a clear reason why the discount rate should overall be positive for 2100. it would be awfully nice of the part of economics that seems to want to be physics had cosnervations laws and similar things to help reality checks.]
I mean this in the nicest possible way. I can’t believe after reading the Mash’s comment how he could have possibly been senior technology scientist at a technology company. But I remind myself that it went into chap 11 and feel more at peace.
Mash, you total economics ignoramus, what the hell has discount rate have to do with (your words) “heap fossil fuels”? What the damn hell is going though you mind when you said:
“Ayres & Warr still make me nervous that the ~3% discount rates come from a century of cheap fossil fuels”
For crying out loud.
He then asks possibly the stupidest rhetorical question I have ever seen on a blog let alone a blog post trying to attack an economist. He asks himself why should a discount rate that should logically give value to present goods over future ones be positive. The Mash reasons it should be negative! Negative! FFS
This can only leave me with one option, which is to request a loan from the Mash.
Mash, please give me $100,000 today only on condition you pay me 3% a year for 100 years. I take it that’s a deal.
The Mash then has the audacity to suggest reality check.
I can’t believe Eli has allowed that comment to go through without deletion or perhaps even banning him for not being ummmmm, up to scratch. At the very least Eli should ask the Mash to lift his game/ or perhaps we forgive him for being a Californian. 18/1/11 7:22 AM
Anonymous -- "How can a case be made to take from the poor (present generation) to give to the rich (future generations), "-----------------------
Ask any parent or grandparent.
Your little comment is emotive and doesn't make any sense as to why we should take from the poor to give to the rich.18/1/11 9:01 AM
In fact, if you really thought about your comment some more instead of emotive babble you would realize that the actors in your example are the richer (parents and grand parents) giving to the poorer (the kids).It in no way negates the point I made and in fact supports it.
J Bowers, Anonymous: a better example would be a soldier dying in combat, or a dissident rotting in jail, so his children may be free.---------------------------
Sometimes the bell just tolls.
-----------------------------Please, somebody convince me that the discount rate to 2100AD is positive....
18/1/11 5:07 PM
And will the various anonymice prove they can read and follow Eli's clear admonition:
"Dear Anonymous,
Some of the regulars here are having trouble telling the anonymice apart. Please add some distinguishing name to your comment such as Mickey, Minnie, Mighty, or Fred."
Please pick a pseudonym and at least stick with it for a discussion, otherwise my motto is:
IUOUI = Ignore Unsupported Opinions of Unidentifiable Individuals
Perhaps Eli can send more anonymous posts to the Rabett Hole, which might be considered the 11th circle...
----------------------"Please, somebody convince me that the discount rate to 2100AD is positive...."
18/1/11 5:16 PM
How can we convince you the earth is flat, Mash.
Here, this may convince you.
Lend me 1,000,000 and pay me 3% for doing so. If you don't agree to the deal which I'm happy to offer security double the value you're simply a bullshit artist.
When do we sign up Mash?
----------------------------John Mashey, I'm deadly freaking serious, man.
18/1/11 5:52 PM
If you think we should use a negative discount rate I am prepared to borrow any amount of money you can offer me and I will give you double security. I'll even throw in a small NYC apartment as part of the security to sweeten it up. (Not in Crooklyn of course).
And you pay me 3% for the privilege.
Best anon.
-----------------------This is a truly bizarre debate...
18/1/11 6:35 PM
If people believe in negative natural interest rates, they are beyond hope and in turn anti economics and anti conservationist – they are intellectual dropkicks. They are discounting time value of money entirely. In fact, the message is to consume as much as humanly possibly right now, and not give two craps about the environment.
-----------------------------Anon, yes, negative discount and interest rates exist. On the monetary side, Switzerland has on occasion offered negative interest rates to discourage foreign investment in SF. Folks bought anyhow because of the perceived safety of the investment.
18/1/11 8:40 PM
Real interest rates can easily be negative if inflation is higher than the interest rate.
In both cases it ain't pretty, but it does happen.
A discount rate reflecting economic growth, assumes that the economy grows. The proper discount rate for 1928 - 1935 would be what? Berry, berry negative. Worse even for the period after Rome fell. The argument for a positive rate is that historically over the past century and a half (with brief periods of contraction) the global economy has grown, but there are sadly exceptions such as Somalia, where a negative discount rate would apply.
So no Virginia, there is no guarantee. Social interest rates are a whole other entire ball of wax.
"Anon, yes, negative discount and interest rates exist. On the monetary side, Switzerland has on occasion offered negative interest rates to discourage foreign investment in SF. Folks bought anyhow because of the perceived safety of the investment. "
It was a technical abberation caused by the structure of Bretton Woods when money was pouring into Switzerland across the border. The Swiss were using that regulation to dissuade this form of portfolio capital flows. It wasn't market driven, as the exchange rate was fixed and was also a regulatory imposition.
Finally Eli, you are basically referring to short term interests and certainly there was never any attempt to change the 100 year time preference e en in switizerland, as you're implying.
Yes, there there negative real rates that show up at times and there were also negative long bond rates when interest rates and reserve requirements were controlled by the Fed under Regulation Q, but that was placed back in the draw in 1978(ish) when the Fed abolished interest rate controls.
"....but there are sadly exceptions such as Somalia, where a negative discount rate would apply".
Not true.
You are actually suggesting that you could find someone that would happily give you local currency as a loan and would also happily pay you interest to get that money back in the future.
I challenge you to offer up proof. 18/1/11 9:21 PM
---------------------------There is no such thing as negative natural interest rates. The payoff decision criteria for lenders is not symmetrical. Furthermore, in cases of recession where there isn't a liquidity crisis, financial institutions still demand positive real returns, as do less senior creditors, who demand a higher positive rate, with or without recession.
18/1/11 9:54 PM
"Social" discount rates ought to reflect the market real rate of capital costs. Like actual discount rates. They are meant to represent the value of capital investment forgone. Otherwise they represent nothing and you also begin to engage in double counting.
It is simply amazing we have so called conservationists believing in a price signal which would tell us all to consume everything now and ignore the consequences.
"The argument for a positive rate is that historically over the past century and a half (with brief periods of contraction) the global economy has grown..."
No. That is just part of it. Furthermore, the current century should have a higher growth rate than the 1900s, as the trend and antecedents suggest.
------------------------There is no such thing as negative natural interest rates. The payoff decision criteria for lenders is not symmetrical. Furthermore, in cases of recession where there isn't a liquidity crisis, financial institutions still demand positive real returns, as do less senior creditors, who demand a higher positive rate, with or without recession.
18/1/11 9:54 PM
"Social" discount rates ought to reflect the market real rate of capital costs. Like actual discount rates. They are meant to represent the value of capital investment forgone. Otherwise they represent nothing and you also begin to engage in double counting.
It is simply amazing we have so called conservationists believing in a price signal which would tell us all to consume everything now and ignore the consequences.
"The argument for a positive rate is that historically over the past century and a half (with brief periods of contraction) the global economy has grown..."
No. That is just part of it. Furthermore, the current century should have a higher growth rate than the 1900s, as the trend and antecedents suggest.
Shorter anon (who is now repeating Tol worshiping claims made by Fred Knell):
18/1/11 10:46 PM
"Its is good economics to lose 20% of GDP in order to preserve 1% of GDP."
Try harder Fred, you might convince yourself.
------------------Stern was more of less suggesting we use 1% of
18/1/11 11:23 PM
> the growth rate to mitigate. ... as the growth
> rate trajectory falls to 3.5% growth rate
Nope. Not "more or less", not at all. Read the Executive Summary page xiii.
Resource cost estimates suggest that an upper bound for the expected annual cost of emissions reductions consistent with a trajectory leading to stabilisation at 550ppm CO2e is likely to be around 1% of GDP by 2050.
There is no reason this 1% should be taken off the growth rate. That is your choice. It could be taken off consumption instead, in which case by 2100, the available GGDP would be $3,152 trillion - 1% = $3,120.5 trillion, well over the alternative of $2,522 trillion.
I hope this is unsophisticated enough ;-)
-------------------------------Vermeer Says:
18/1/11 11:36 PM
You can take 1% off consumption LOl.
How do exactly do that when consumption is 60% off GDP. How do you mange removing 1% a year off the rate of consumption without lowering living standards? And who gets it?
Your comment isn't unsophisticated it's dumb. It's about as stupid as Mashey suggesting we apply negative time preference rates.
------------------------I've see John Mashey do this before, and it's fun to watch. Plant some simple idea, lean back, and watch crazy creeping out of their nooks...
18/1/11 11:42 PM
Negative GDP growth rates produce negative discount rates naturally; any "economist" not grasping this should go demand their tuition fees back. A simple example is the following.
We are writing the year 2060AD, the economy is stagnating, teetering on the brink of collapse. Inflation is running 10% per annum, and no productive investments can be found promising even as much as 1%.
One John Mashey Jr. has $1000,000 that he doesn't know what to do with. Out of the blue comes one Anomymous Jr, offering to borrow the money and pay 1% per annum for doing so, with impeccable securities. Mashey Jr. of course takes him up on the offer -- 1% isn't great, but it beats keeping it under your mattress.
Now the point is, that the real interest rate that Mashey Jr. sees, is -9%. This is the proper discount rate to consider. Simple!
Martin V Says:---------------------------
"There is no reason this 1% should be taken off the growth rate. That is your choice. It could be taken off consumption instead, in which case by 2100, the available GGDP would be $3,152 trillion - 1% = $3,120.5 trillion, well over the alternative of $2,522 trillion."
The 1% GGDP is the cost of mitigation. That’s a reasonable estimate how much big government directed mitigation would cost as a baseline figure that can be expressed any way you want but it has a dollar amount and the accepted norm on how to express it is over GGDP.
No mater how this is spun and dried the cost of mitigation is 1% of GGDP. If you wish to base the measure on Global consumption rates the cost will simply be a function of the consumption component of GGDP. There’s no getting around it, Hercules.
--------------------------> How do exactly do that when consumption
18/1/11 11:51 PM
> is 60% off GDP.
Well, you take 1% off so it becomes 59% of GDP.
> How do you mange removing 1% a year off the rate of consumption
Not 1% a year. 1% period, every year anew, off that year's consumption -- there is no such thing as a "rate of consumption". Read the fscking report... perhaps after brushing up on your English reading comprehension.
-------------------There’s no getting around it, Hercules.
18/1/11 11:58 PM
Sigh, someone else with reading comprehension issues. Use the formula Luke: the 1% is 1% of GGDP. Taken off the consumption part of GGDP. Rather than eating up the seed grains, so to speak, which most farmers will tell you is not a good idea.
-----------------------------------"I've see John Mashey do this before, and it's fun to watch. Plant some simple idea, lean back, and watch crazy creeping out of their nooks..."
19/1/11 12:15 AM
If it’s as stupid as the idea he would lend me money and pay interest to the borrower. If he really did that people would end up laughing at the economic illiterate. No wonder you like his scrawls.
"“Negative GDP growth rates produce negative discount rates naturally; any "economist" not grasping this should go demand their tuition fees back. A simple example is the following.
We are writing the year 2060AD, the economy is stagnating, teetering on the brink of collapse. Inflation is running 10% per annum, and no productive investments can be found promising even as much as 1%.”"
This isn’t time preference, you moron. You’re discussing economic events.
"One John Mashey Jr. has $1000,000 that he doesn't know what to do with. Out of the blue comes one Anomymous Jr, offering to borrow the money and pay 1% per annum for doing so, with impeccable securities. Mashey Jr. of course takes him up on the offer -- 1% isn't great, but it beats keeping it under your mattress."
No, that’s not what the Mash has said. The Mashster suggested negative time preference. In other words he would lend money now and pay the borrower for the privilege. If you think that is a good idea, you’re stupider than he is.
"Now the point is, that the real interest rate that Mashey Jr. sees, is -9%. This is the proper discount rate to consider. Simple!"
What’s is simple is seeing a liberal arts grad from a so so college pretend he understands econometrics and in your case even basic economics for that matter.
Martin: yes, it is simple, and having talked about the effect of energy on GDP/capita with Ayres (a very sharp guy) over dinner, I get nervous. By coincidence, here's an Economics blog post from a few days ago, on Oil shocks and economic recessions. As Hamilton (UCSD Econ Prof) writes:----------------------------------
"Every recession (with one exception) was preceded by an increase in oil prices, and every oil market disruption (with one exception) was followed by an economic recession."
Anon is very much in the style of Fred Knell, as in 19/1/11 12:32 AM
Richard Tol said...
------------------------------------@Martin, Anonymous
19/1/11 12:19 AM
Stern's estimate of the cost of emission reduction should be read as follows: GDP in 2050 with climate policy is 99% of GDP in 2050 without climate policy.
Roughly, that means that both consumption and investment are 1% lower. It does NOT mean that the growth rate of the economy is 1 percent-point lower.
------------------------If the estimate of large scale mitigate cost is 1% a year of GGDP then it doesn't really matter where that 1% is lifted from if it's also compounding at the annual sum of compounding GDP. It changes nothing.
19/1/11 12:37 AM
As far as Stern explanation goes.. he's playing semantics. 1% of consumption and investment is 1% of GDP. How he can pretend to remove
government + (exports- imports) is rank nonsense. Who is Stern trying to kid as you can't remove mitigation costs from G or Ex - Im in a full blown mitigation environment.
Definition:
GDP = consumption +investment + govt (ex- imp).
-------------------------Richard:
If the estimate of large scale mitigate cost is 1% a year of GGDP then it doesn't really matter where that 1% is lifted from if it's also compounding at the annual sum of compounding GDP. It changes nothing.
As far as Stern explanation goes.. he's playing semantics. 1% of consumption and investment is 1% of GDP. How he can pretend to remove
government + (exports- imports) is rank nonsense. Who is Stern trying to kid as you can't remove mitigation costs from G or Ex - Im in a full blown mitigation environment.
Definition:
GDP = consumption +investment + govt (ex- imp).
19/1/11 12:37 AM
--------------------------Anon (aka Fred Knell Or Frustrated potty mouth):
19/1/11 1:00 AM
Let me repeat using Tol's terms (with slight improvment):
Sterns 2006 finding: GDP in 2050 with climate policy is 99% of GDP in 2050 without climate change.
And GDP in 2050 without climate policy is 80-95% of GDP in 2050 without climate change.
Sorry that keep getting things wrong Fred. I can see where your frustration arises.
----------------------------BTW Fred, it was sweet of you to give us this line:
""I'm a ignorant dick".I can't try harder with you, jakerman, as you're too stupid to understand."
But even sweeter that you did so just to get this smack down from your idol:
"It does NOT mean that the growth rate of the economy is 1 percent-point lower."
19/1/11 1:15 AM
--------------------------Jerkerman:
19/1/11 1:23 AM
I'm not Fred, so stop it with the blind punches. If you don't like him, Fred has to be a good guy.
Do you even understand what you're saying? I don't think so.
Okay, His Lordship (stern) says:
1. There is minimal climate change damage in 2050. 1%.
2. The bulk of the damage will be felt beyond that and by 2050 the world will experience AGW damage of around 15 to 20% of GGDP.
3. Other current mitigation estimates are 1% of GGDP from now on.
I used roughly these parameters in my earlier comment, so what's your point? Do you think that by wasting pixels it will somehow raise my estimates of your comments. No they won't primarily because you're a fool, and ELI aside, this thread has attracted a large number of economic illiterates and fools.
I blame it on the liberal arts colleges.
Are you Californian too, because Mash is.
---------------------------"It does NOT mean that the growth rate of the economy is 1 percent-point lower.""
19/1/11 1:31 AM
No, Tol doesn't because he's being professional and exacting with what His Lordhship (Stern) said.
But if you see above I understood exactly what Tol is doing/saying and I explain it without the niceties, as I don't believe His Lordship deserves any.
Anyone who says (like his Lordship) that there will be AGW damage/mitigation effects on consumption and Investment which make up the bulk of GDP but avoids the effects on G + (ex -Im) is a bullshit artist.
----------------------------------Anon (aka Fred Knell) I can see why you'd want to distance your Fred persona from your comments in this thread, and the last thing I'm goinng to do is take your word for it. Compare your claims and language and Tol worship in this thread to yours over at Deltoid.
19/1/11 2:10 AM
While it matters little little to me I think you are Fred Knell.
Fred continues:
"I used roughly these parameters in my earlier comment, so what's your point?"
That you got it wrong, when you based your argument on this false premise:
"Stern was more of [sic] less suggesting we use 1% of the growth rate to mitigate." And then you took this further to make more false claims. And you made your error delicious by telling those who corrected you that they were "stupid" and "ignorant dicks".
Just to be annoying: say that mitigation will indeed cost 1% of GDP each and every year.------------------------------------
In the UK that's £14 billion (1% of the £1,400 billion economy).
We already pay £14 billion (and a lot more in fact) in mitigation, higher energy prices, pigou taxes etc.
Thus the UK has solved climate change.
Or, as an alternative, Stern's insistence that mitigation will only cost 1% of GDP per annum is incorrect.
And here's the problem: those arguing that the UK must do much more are, by so arguing, insisting that Stern's cost estimates are wrong.
19/1/11 3:49 AM
Martin Vermeer said...
----------------------------Roughly, that means that both consumption and investment are 1% lower.
19/1/11 4:01 AM
Richard, indeed. And doing the sums for that, it means that the rate of GGDP growth will also be 1% lower: 0.99*4.5 = 4.455% per annum. And GGDP will be
60 trillion * (1.04455)^90 = 3032 trillion
instead of 3152 trillion. A 4% shortfall.
----------------------No, Neil Craig always uses his own name, and uses different words.
19/1/11 4:06 AM
There seems to be some problem here - Tim is saying we're already paying 14 billion cost for AGW mitigation, whereas I was under the impression mitigation was a matter of spending that 14 billion on a new energy production system, better housing, sea walls and suchlike.
---------------------------Tim writes;
19/1/11 4:19 AM
"Thus the UK has solved climate change."
Slightly premature Tim. You need to keep mitigating, its not even 2050 yet.
Also, Sterns 2006 figures were pre AR4 and dependent on strong early global action. Although the UK rolled up its sleeves working towards pulling its weight, laggards like Australia and USA etc dragged the chain.
Strong early global action described by Stern in 2006 is not looking likely for a few years. In 2008 (post AR4) Stern recognized higher rate of emissions and up graded the costs of mitigation to 2% of GDP, but also recognized the higher risks associate with our higher emissions rate.
-----------------------------Martin V:
19/1/11 4:23 AM
You seem to have a serious problem with rudimentary math.
The expression of 1% of GDP is just that it's an expression or a short-handed way of saying it will cost $6 trillion from a global economy that produces $60 trillion of GDP.
So each year the economy grows either 3.5% of 4.5% both those sums operate off the new compounded base, so it doesn't matter if it is expressed at a reduction off the growth rate, the consumption rate or the cost of beer ratio. What matters is the amount it represents.
Do you understand that now, you ignoramus?
There's nothing worse than liberal arts majors skulking around trying to sound all knowledgeable about these things except IT majors. Stick to the Iliad and let the grown ups speak.
----------------------------------Wow! Troll cleanup, aisle 1. All I know is that anyone who can say, "Ecology is for an innumerate pretending they are doing science when it's nothing of the sort these days," is an ignorant ass of monumental proportions. Ecology is one of the toughest of the sciences. I've been a physicist for 30 years. I'm no lightweight when it comes to bringing order to complicated studies. And yet I am astounded at the way ecologists manage to make sense out of their discipline. Sure there are bad ecological studies, but hey, G&T got published, too! There is a lot of very good work being done.
19/1/11 6:04 AM
Our troll has contributed jack so far. He's given no evidence of being numerate himself, and his ejaculations are unworthy of any serious debate.
Back on topic. How can you do a study of mitigation before you have managed to bound the risk?
--------------------------Dilbert:
19/1/11 6:19 AM
If you think ecology hasn't been hijacked and is now a course in extremist environmental propaganda then it would lead me to think you're a pretty miserable physicist because you know or understand jack shit.
"How can you do a study of mitigation before you have managed to bound the risk?"
Easy. For a physicist to ask that question astonishes me.
We take an average of predictions of people in that specific field and then try to work for there with a cool headed approach (not like Stern who also took the effects of climate change on gender inequality into account). Pleazzzee.
Reasonable estimates of heavy handed top-down mitigation are around 1% of GGDP (and even that would be an under estimate as it wouldn't be taking into account the graft, corruption and rent seeking that would be going on like we've found in Europe since they introduced their abortion of a cap and trade.
My personal estimate? 2% of GDP for 100 years of growth getting hidden in a much lower growth trajectory.
------------------------------On discount rates, let us amend the proposed deal. You can borrow up to $100 for any amount of time and will be paid 3% per year. Unfortunately, we will have to drop you into an airtight tank and the money you are borrowing is the money that would have gone for oxygen for the tank and the price of oxygen goes up by the second. We will be happy to buy the oxygen as soon as you pay us back the money and throw in however much additional we must pay for oxygen. If you survive, we'll be happy to refund the amount you've earned in interest. We look forward to your reply.
19/1/11 6:22 AM
-------------------------------Anonymous, At the risk of stating the obvious, if you have not bounded risk, then how do you know that the money you spend to mitigate risk will not be wiped out by the unbounded risk you haven't bothered to consider. This is absolutely basic. Anyone who has ever worked on mission assurance or even properly considered an investment portfolio ought to know this.
19/1/11 6:26 AM
-------------------------------Dilbert:
19/1/11 6:32 AM
You astonish me. You boast about your qualifications as though physics is supposed to impress me to no end (It doesn't really). You now try and beef up Mash's economic illiteracy by posting gibberish on the site in troll like way.
The Mash said that he would like to see a negative time preference being used for mitigation. If the Mash prefers negative time preference I am happy to take a loan of any amount and I will offer him 100% security while he pays me 3% interest each year.
You don't even seem to understand the argument yet you're asking for people to be thrown off the thread? You're a clown.
---------------------------“if you have not bounded risk, then how do you know that the money you spend to mitigate risk will not be wiped out by the unbounded risk you haven't bothered to consider.”
19/1/11 6:41 AM
You can’t know, as we’ve never had any experience in assessing this form of risk before. Therefore we can only work with estimates of risk and find where the mean is on the curve and account for size of variance.
"This is absolutely basic".
Well actually it's not.
"Anyone who has ever worked on mission assurance or even properly considered an investment portfolio ought to know this".
Not true. There are volatility calculations one can perform on a portfolio and VAR. But you cannot insure for black swan events or can only do so by taking off risk from the portfolio. In terms mitigation that would basically mean de-industrializing.
Again, you astonish me with your last comment.
----------------------------Anonym-Ass,
19/1/11 6:42 AM
OK, we'll put you down for an "utterly clueless" when it comes to risk mitigation. If you care to learn, here is the procedure you go through for any risk mitigation:
1)Understand the risk
2)Bound the risk
3)Mitigate the risk
Without a bound on the risk, it is impossible to say whether 1)you are overpaying to mitigate the risk or 2)any amount you invest to mitigate risk will be wiped out when unanticipated risk swamps your investment.
This is precisely what happens in an insurance company when they do not take into account the thick tails of the risk in coverage or an investment. Perhaps you could tell us exactly what portion of it you don't understand.
--------------------------------------"First, I think I've been pretty substantive and on topic throughout the discussion. I certainly think it is a reasonable to question how you can discuss mitigation before you've bounded risk even for the known uncertainties (and Tol has not)."
19/1/11 9:07 AM
I nicely explained to you before that the only thing one can do with this is to set up a risk table supported by the risks in temps rise (scientists claims and therefore deriving the mean).
We have no real history of being able to make any other assessment of the risk, as there's been no previous experience. This is why it is different to insurance risk, as firms there are able to interpolate some historical data in what they insure.
You figure out the cost of mitigation up the prob curve and determine optimum.
At this stage if you look up at my claim earlier there is no case for top heavy mitigation efforts as the cost does not warrant a wealth transfer.
"And John's question is quite relevant. If climate change decreases ROI in the future, then the discount rate could well be negative--that is money spent now could significantly increase return down the road."
You're an ass. Time preference cannot be negative.
"Put another way: Would the discount rate for strengthening levies in New Orleans in 2000 have been positive or negative?"
There would never have been a discount rate figured out for such a thing by itself as it would form part of something else.. What an economist would do is prepare an cost benefit analysis while a discount rate would have have a part of the overall study. Time preference would have been positive.
You really don't understand this stuff, do you?
---------------------------a_ray_in_dilbert_space said...
19/1/11 9:20 AM
And John's question is quite relevant. If climate change decreases ROI in the future, then the discount rate could well be negative--that is money spent now could significantly increase return down the road.
Actually, that wasn't my argument. My argument is that GDP/capita is fairly strongly related to energy*efficiency/capita (at least up to a point), and that the general idea that people will be 14X richer in 2100AD might be in jeopardy given Peak Oil+Gas.
Put another way, fossil = energy capital; it might be good to ivnest more of it into asserts that produce energy income, for when the capital is much less. Silicon Valley companies usually learn that if you have a a hot product, you'd better be investing some ofthe profits into R&D for the next one, rather than just partying.
-----------------------------------"And John's question is quite relevant. If climate change decreases ROI in the future, then the discount rate could well be negative--that is money spent now could significantly increase return down the road."
19/1/11 9:27 AM
Jeez lord.
Time preference would NOT be negative in such an example. it would look like a firms cap ex. They are cap spending, expecting capture higher future returns than what is available. They would apply a positive discount rate, not negative.
You people need to understand the basics.
Have to go, enjoy yourselves no doubt at my expense and I will return later this afternoon to explain exactly what a firm would do and correct the "stupidities" that would no doubt show up.
---------------------------------OK, I can see we have to go back to really basic ideas for our anonymous clownshoe.
19/1/11 9:29 AM
OK, consider two possible scenarios. 1)Money invested now in mitigation cannot be invested in other profitable activity. This situation yields a positive discount rate. However, it presumes that there are other investments that will yield a profit. 2)If we do not invest in mitigation now, we damage the economy to the extent that positive ROI is not possible. In this case, the discount rate is negative. If we do not mitigate,all future investments yield lower returns. That really isn't so hard, is it?
The latter situation is quite possible in the case of climate change. Why? BECAUSE YOU HAVEN'T BOUNDED THE FRICKIN RISK!
Look, Clownshoe, I would consider a scenario in which 99% of species on the planet die to be one in which economic opportunities are seriously degraded. Richard, by his own admission, cannot rule that out.
We have been arguing about settled science for 20 years. We should have done something 20 years ago, and would have except for assclowns like you.