Betting With Catastrophe Bonds

Betting on climate carries some risk for realists, not so much losing the bet but if, as  here and others there, a bunny bets that global temperature will increase, perhaps that is not a bet an ethical hare would care to win.

Bets do have their virtues because as Steve Schneider put it

On the one hand, as scientists we are ethically bound to the scientific method, in effect promising to tell the truth, the whole truth, and nothing but — which means that we must include all the doubts, the caveats, the ifs, ands, and buts.

and you can get tied up in knots trying to convince others that that last detail is not very likely.  The virtue of bets is they simplify things

On the other hand, we are not just scientists but human beings as well. And like most people we'd like to see the world a better place . . .

and win a few bucks.  Bill Foster, the only physicist in the US Congress put it another way

On the campaign trail, I learned that there is a long list of neurons that you have to deaden to convert a scientist's brain in to a politician's.  When you speak with voters, you must lead with conclusions rather than complex analysis of underlying evidence -- something that is very unnatural to a scientist. 

and even some of the most obdurate denialists recognize this virtue of bets, for example  Gosslein from the No Tricks Zone

If the 2011/20 decade averages to be warmer than 2001/10, then I will concede that the earth is indeed warming. But if the next decade turns out to be cooler or the same, then you will have to concede that the theory that CO2 is driving the climate is bunk. We can work out the details in the days and weeks ahead.

That, as Eli would say, looks like a losing bet

Now in some cases the losers bets pay to charity and in other cases, some bunnies simply are looking for a counter party and not finding any takers.

An interesting presentation at this year's AGU was by Mark Roulston from Winton Capital, a hedge fund that plans to set up a climate betting market in 2018 (not open to US inhabitants) in order to take advantage of the wisdom of crowds (they are familiar perhaps with the results of elections in the US and UK, maybe not).

 The initial market will allow bets to be placed on the atmospheric concentration of carbon dioxide and the global mean temperature anomaly. It will thus produce implied forecasts of carbon dioxide concentration as well as global temperatures. If the initial market is successful, additional markets could be added which target other climate variables, such as regional temperatures or sea-level rise. These markets could be sponsored by organizations that are interested in predictions of the specific climate variables.

If Eli plays the IPCC chalk and wins, that leaves neither Eli nor the world in a good place.  So what could one do.

While thinking about the issue the Bunny came across Catastrophe Bonds, a high risk high interest investment where the issuer pays the buyer interest, but if catastrophe strikes the buyers don't get their capital back.  For example, the New York has issued catastrophe bonds to cover flooding in the subway tunnels, and there are lots of them in Florida covering hurricane damage.

Well, that is an investment for Roger P Jr, and he would have done well for the last seven years or so, and lost his shirt last, but what about Eli

Eli has an idea, a catastrophe bond market where the interest is split according to climate outcomes.  When a catastrophe occurs part of the capital is used for relief.  These bonds could be issued by governments, or perhaps organizations such as the World Bank which has issued catastrophe bonds covering hurricane and earthquake damage in Mexico.  The bonds could specify whether the capital would be used for amelioration, adaptation, conservation, substitution or mitigation.

A new ethical playground for financial engineering                         

Taxpayers know that's not rain falling on their heads - any lessons for climate communications?

I've been interested in how poorly the Republicans have done in lying to the voters about the tax bill.

Public opinion on GOP tax bill clearly still in flux. Averaging across recent polls, however, only about 30% of Americans support the GOP plan. This is lower than any major legislation passed in last three decades & only barely higher than support for failed GOP health care bill. pic.twitter.com/xKEKQQCRJv

— Chris Warshaw (@cwarshaw) November 17, 2017

After all, most people will get a tax cut in the short term, with the tax increases and service cuts to come later. Why aren't they happy?

Politico thinks it's about relative deprivation - nobody likes being deprived relative to others, and the blatant skewing of this bill for the undeserving rich has lit a fire. Then DJW at LGM responds:

Of course for all this to work, the public needs to view the tax bill as primarily about upward redistribution. It is, of course, but getting that message through to the general public in a hyper-polarized information environment is itself quite remarkable; I’m a skeptic about the value of messaging, but the Democrats clearly did an impressive job here. But good, disciplined messaging alone shouldn’t be enough to break through the partisan divide....

One theory (I have little confidence I’m right about this; I’m just thinking out loud here): since 2009, we’ve moved further into what’s clearly an era of overwhelmingly negative polarization....In an election, you can mobilize your side effectively because it’s us vs. them; when pursuing a policy initiative, it’s us vs. nothing/status quo, which is harder to demonize, and draws greater attention to what you’re actually doing. If this is right, in a weird way high negative polarization makes the politics of elections worse–uglier and less substantive–but may make some features of politics outside of elections better–since voters are less in thrall of their preferred party, they take a closer look at what they’re trying to do. The fundamentally unpopular features of the Republicans’ plans was harder to hide behind the partisan veil.

Interesting theory. If right, then we'd expect more resistance to denialist policies as the public nominally on the Republican side becomes willing to evaluate climate denial more objectively when Republicans are in power. Doesn't provide a lot of guidance for climate communication in terms of what to do, however - losing elections in order to win public opinion isn't a way to get things done.

I'll just add that Democratic consistency over the years has helped - the Ds say for years, correctly, that Republican tax cuts are biased for the rich. So an especially bad tax cut by an exceptionally unpopular president and Congress gets slaughtered in public opinion (with the donor class crying their way to the bank).

Anyway, consistent messaging about denialist Republicans could also help blunt their lies.

Fire Fire Burning Bright, How Many Acres Burned Last Night

Nick Stokes has extended the discussion on the number of forest acres burned in the US, which basically started in nothing is happening twitter and various blogs that deny climate change is upon us, with the appearance of the graph to the left trying to disprove concern about the current California blazes.  To be straightforward about it Nick don't believe the left hand side of the figure, and he quotes from the US Historical Statistics table which comments

"The source publication also presents information by regions and States on areas needing protection, areas protected and unprotected, and areas burned on both protected and unprotected forest land by type of ownership, and size of fires on protected areas. No field organizations are available to report fires on unprotected areas and the statistics for these areas are generally the best estimates available."

Eli is not going to exactly defend this either, but he will stick by the point he was trying to make that 1900 Galveston hurricane has damn all to do with deaths caused by hurricanes today especially with improved building codes, weather satellites and more.  Since forest fire fighting in the US really took hold in the middle 1930s when the federal government got serious about it the left hand side of the figures have not very much to do with the right hand side

However, Eli did come up with a way to look at this, by examining the number of acres burnt per fire.  One of the interesting things in the above graph which the Bunny did not comment on at the time was the surge about 1980 and the increased variability after that.  Nick points to the National Interagency Fire Center data which covers the period after 1960.  The data in the 1960 to 1970 period is the same as from the Historical Statistics.  The NIFC table at the bottom states that

The National Interagency Coordination Center at NIFC compiles annual wildland fire statistics for federal and state agencies. This information is provided through Situation Reports, which have been in use for several decades. Prior to 1983, sources of these figures are not known, or cannot be confirmed, and were not derived from the current situation reporting process. As a result the figures above prior to 1983 shouldn’t be compared to later data. 

Which explains that step, but it is not a huge one and it is an increase.  Using the data in the Historical Statistics of the United States one can compare the number of acres burnt per fire (apologies, were this an NSF grant Eli would be ethically and contractually bound to use hectares, but it is not) burnt on protected Federal, State and private lands compared to those burnt on unprotected lands about which Nick and others have great doubts.  In this picture the red line represents the number of acres burnt per fire on unprotected lands vs the blue line which is the number of acres burnt per fire on the protected lands.  The ratio is greater than 5 to 1. 

 For a further internal consistency check one can look at the total number of fires in the protected and unprotected categories bearing in mind that the amount of forested area in the US has essentially remained constant.  The number of fires remains roughly constant at 150 to 200K between 1926 and 1955 after which it declines to about 100K. 

The graph to the right shows that essentially all land is protected by 1970 because there are few fires ther, moreover from the graph immediately above by ~ 1940 burning in protected land had reached either a constant level or was slowly declining.  The National Interagency Fire Center table (see first two figures) shows that from about 1980 the amount of forest burnt has increased and the average size of each fire has increased.

Of course, since western and eastern US forests are very different beasts, we now need to look at data from both sides of the continent.

So What Climate Change Stories Would Sir Philip Sidney Tell

We here at Rabett Run might ask what Renaissance Literary Theory has to add to climate communications and, as it might occur, to the AGU Fall Meeting.  Turns out more than a bit.  While literary critics have the habit of not using Power Point presentations at their talk and writing out their talks (which has the advantage that they can be published immediately on Medium and elsewhere ), there is important content.  Dr. Genevieve Guenther talked in the Public Affairs session of the AGU meeting on the recommendations of Sir Philip Sidney, an Elizabethan poet, critic and soldier, for climate communication.

In @DoctorVive 's words, Sydney argues that 

. . . literature should be the most celebrated of all the human arts because it best teaches us how we should live. Sidney claims that teaching, by which he means the conveying of information, should not just impart knowledge, but serve to move people to what he calls the “ethic and politic consideration, with the end of well-doing and not of well-knowing only.” Indeed, Sidney thinks this moving is “well nigh the cause and the effect of teaching. For who will be taught, if he be not moved with desire to be taught? And what … good doth that teaching bring forth if it moveth one [not] to do that which it doth teach? For as Aristotle saith, it is not gnosis but praxis must be the fruit. And how praxis [can] be without being moved to practice, it is no hard matter to consider”

But, of course that leaves open what stories we should tell.  Just about all the discussions of climate communication have been operational.  Should there just be recitations of facts, inoculations, MOOCs, should only like proselytize to like to preserve cultural cognition?  Should there be more blockbuster films "showing women who look like Wonder Woman putting solar panels on their roofs? Well, not exactly -- or at least not only" as Doctor Vive says.

What would Sidney say?  Climate change as a tragedy as written by David Wallace Wells has limited appeal.  Why struggle in the second act when all die at the conclusion (Eli knows, yeah there was a line or two of hope at then end, but it basically was an environmental "On the Beach").  Should it be comedy, well no. . To quote again the message in a comedic framing would aim

not to scare people, but connect with them over shared values; next, show how climate change mitigation upholds those values; and, finally, end your message with hope. Thinking about this from a literary critical perspective, I wonder whether ending on a note of hope -- saying, for example, “but we can solve this crisis: we have the technology!” or “but there’s good news, the price of solar has dropped X percent in the past Y years” -- is actually to end your message with a comedic resolution, which is to say a relief of tension, a sort of exhale -- a “whew!,” if you will -- denaturing the driving irresolution that sustains ongoing action.

 In other words, it's all going to be fine at the end so why struggle. 

Which pretty much leaves the epic as the best form.  As Genevive points out, in an epic there is a heroic figure who struggles, motivates people who struggle and they all triumph at the end.  An epic is a journey, with a glowing conclusion of which all are proud. 

Go read the long form.

Been Looking For This To Happen

A minor amount of buzz happened a little over a month ago with headlines around California Assemblymember Phil Ting announcing he'd introduce a bill to ban the sale of new gas engine cars in 2040. China, France, India, Netherlands, and UK have similar plans with varying deadlines. Cal Gov Jerry Brown has asked why China can do this and California hasn't.

So one legislator saying he'll introduce a bill is a far cry from something actually happening. Still, he's on at least one of the relevant legislative committees, Committee on Utilities and Energy. We'll learn more when he actually has a bill. Even if it doesn't succeed, this could be the start.

This Newsweek article says that new gas cars from after 2040 won't be allowed to register in California, so if you buy a new one somewhere else and move here, you'll have to sell your car. That will affect their value outside California. After a few years, it'll be a lot harder to find places selling gas. It wouldn't make much sense to buy a gas car in California a few years before the deadline.

I think this is politically feasible in California, home of Tesla and with an actual acceptance of climate change science. I'm glad to see Phil Ting push this forward, but there are a lot of ambitious Democratic politicians who could show their vision by supporting this. And what about you, Jerry Brown?

What might even be possible is something sooner than 2040. Even 2035 would start to redirect long-term R&D planning by car manufacturers in the near future.

Forest Fires Burning Bright

As the fires burn in California the Dunning Krugar Prior crowd on Twitter, Curry and other places are featuring a graph showing the number of acres burned in the US

Now Eli has been busy pointing out that this is, as one might say, another example of the Pielke Paradox, you know the one where a certain wanna be sports columnist points out that if you divide hurricane damages by GDP why nothing happened.  Of course this neglects the fact that some of that GDP was invested into weather satellites, large computers for weather prediction, and hardening buildings in hurricane prone places.  

So Eli decided to put some labels on that graph, but before doing so he though that it would be useful to look at a couple of things. First at amount of forest land in the US which turns out to be pretty steady since 1920, about 750 million acres out of a total of 2,261.  If anything the amount of forest has increased from 721 to 766.  Next as a marker of the effort put into forest fire fighting, to look not at the forest area burnt but at the number of acres burnt (sorry you hectare fans) per fire as a mark of forest fire fighting.  

The observant will note the sharp decline at 1933 when out of work folk were given a government job in the Civilian Conservation Corp, a significant part of which was to fight forest fires, plant trees and more.  They also got health care, which turned out to be important when WWII broke out and healthy people were needed to fight Nazis and assorted fascists.

After the pause forest fire fighting became more professionalized with more and better equipment and the decline continues until about 1980.  Of course, everybunny knows that temperature anomalies started to rise at that point so that today the question is not so much whether warming contributed to the rise in the number of acres burnt but how much.  There has been considerable discussion about the how much including sessions at the just ended AGU Fall Meeting.

So what would Eli say about that 2017 one fifth of record on the first graph?  Nonsense would be the nice word, deceptive nonsense a bit more correct, and criminally deceptive bulls hit comes to mind.

The Marginal Cost of Electricity

There has been, of course a lot of Clacking and Jacobsoning about and there are also long running issues about whether nuclear energy is needed or not.  Willard has pretty well disposed of the Breakdown nuclear guys, but they do have something of a point, which perhaps Eli can illuminate with a little model.  FWIW the discussions about fossil fuels, wind, solar and hydro and nuclear often come down to the levelized cost of electricity (LCOE), which basically is what a watt or a megwatt or whateverwatt costs, and on that basis today, wind is the cheapest.

But that does not capture the complete picture because of intermittency, not that nuclear and coal plant don't go off line now and again, so Eli would suggest a second metric, the marginal cost of electricity.  As Enron taught California in the early part of the century, the marginal cost can be a lot higher than the levelized cost, which really is the cost of the first watt.

So here is a simple model.  Start with the maximum possible supply, call it M, then see what happens if the % useage is u.  To keep this simple let the MCE = 1/(M-u) which is not unreasonable.  If M=u you have a short in the market and the price zooms.  Looking at three case M = 150%, 125% and 100% you get a useful model

A bunny could do even more useful things with this model by increasing the cost as a function of maximum power for any sort of mix you want.  You can diddle with scaling, etc but the take home is that as long as costs scale linearly with capacity you don't want to skate close to the edge.

"Believe the women" and Bayesian Priors

This is where I'll likely get schooled by someone who truly understands Bayesian stats, unlike my lawyer understanding, and that's okay. I think a statistical framework to the debate of "who do you believe" would be a useful contribution.

The prevailing feminist position is to believe the women when they accuse men of sexual harassment or assault. The reason for this position depends on the individual feminist but for many is derived from feminist ideology that not everyone else shares. When a non-feminist sees this and thinks why should I simply believe the woman instead of the man, and sees a reasoning based on ideology of female oppression the person doesn't agree with, then the non-feminist dismisses the argument as non-scientific (add a varying mix of bias to this as well). That's where you get the silly, anti-"Believe all women" backlash that the NYTimes enabled.

"'Believe All Women' Isn't a Thing" says Katie McDonough, and she has a point. I'd like to see any link to any feminist actually saying believe all women in spite of contrary evidence. (There's one exception where many feminists come close to saying that - in one-on-one conversation with women or girls that come to a friend or especially a counselor with an accusation of harassment or assault. It's appropriate in that case to not be impartial or fair because your role is to help her, so an almost-but-not-quite immovable belief in what she says is fine.*)

So what about the rest of us, considering the issue of who to believe as a general concept or a particular allegation you hear about? If we accept that we live in a world of probabilities and incomplete information rather than certainty, then we have options. Some non-feminists say why should we believe the woman rather than the man when we don't know either of them? The answer would be that we do have information in the media about not-powerful women accusing powerful men of harassment and assault, and it seems in the vast majority of cases they are telling the truth.

So that's your prior - believe the woman. More information can adjust your assessment of that particular allegation, or I suppose more information in general can adjust your prior. What seems to be happening now with the flood we're seeing is the prior is getting strengthened.



*Importing this attitude from college crisis counseling centers to college disciplinary proceedings is a huge mistake, however, and people are now realizing this. I'll stand up for lawyers, including feminist lawyers, for pushing on the issue of appropriate process.

Republican tax travesty does limited damage to renewables but more of a problem for EVs

Just one small example of what an undemocratic, corporate lobbyist semi-controlled (i.e. not even the lobbyists really know what's happening) clusterfreak the Senate tax bill is that it's not clear whether it removed the $7,500 tax credit for EVs so that billionaires wouldn't have to pay estate taxes on their "family farms". The Republicans took the worst that the Democrats did in terms of violating procedural norms and then cranked it up to 11, for the worst possible motives and outcomes.

Regarding the revocation of the EV tax credit, the revocation was in the House version, also in the original Senate version, then removed, then added back, and now it's not clear. There's a similar attack on tax benefits for renewable power. No reductions of tax benefits for fossil fuels, of course, let alone consideration of the subsidy fossil fuels get to pollute the air and cause climate change.

Regarding the effect on renewable power, the process for solar and wind becoming cheaper than fossil fuels is so far along that the Republicans can't stop it. EVs are another story - they'll still triumph eventually, but the market is in its infancy yet and crippling the American EV market would really slow things down. California and other blue states will do their best in response, but we need non-idiotic federal policies.

Might seem worthless to point this out now, but here's a quote for Republican Senator Jeff Flake's book, Conscience of a Conservative:

What happens if there is a tax bill which isn't getting any Democratic support, will we stand up and say no, we've got to be bipartisan, we've got to work for it and pick up the necessary votes? Or will we scrap the rules? I will not support any such effort to harm the Senate. It is a line I cannot cross.

Maybe this tax bill can still be stopped, and it could use Senator Flake's help.

As for the broader economic issue of whether tax cuts for the rich make everyone better off, try the lesson from Kansas.


UDATE:  just an interesting related discussion on how fast EVs will take over the market. The anti-EV guy seems to feel incentives and subsidies are somehow unfair and don't count, ignoring how they affect everything besides EVs. I'm sure he would've said the same thing about replacing leaded gas back in the 1970s. His concession that autonomous vehicles change the game is interesting though. I'm presuming the reason is that you maximize usage for autonomous fleets, and the ops and maintenance costs of EVs win out then.