Global Themes

On Globalization & Venture Capital

Why do I feel a chill when people talk of global warming?

Amidst all the brouhaha about how the IPCC (Intergovernmental Panel on Climate Change) report submitted to the UN has proven that global warming is man-made (or more accurately, there is a 90% likelihood that human activity is behind global warming), comes a refreshing voice of scepticism in the form of Ross McKitrick.

Ross is not a head-in-the-sand, oil-guzzling, live-like-no-tomorrow consumer of fossil fuels but a respected Professor of Economics and one of the Expert Reviewers who contributed to the report.

The article hints at data and research that may have been ignored or overlooked while making the case for global warming and climate change. If that is really the case, at the very least, it is shameful and doesn’t help us understand (or deal with) climate change at all…

At worst, it risks creating a “monster” out of a problem which in reality may actually be more manageable and tractable.

I am no fan of burning coal – at the same time, I find it hard to reconcile the pressing need for development and the inevitable rise in energy consumption as India and China develop apace…

To deny them the fruits of development will be counter-productive…and creating a bogeyman would not help either.

I thought that Ross was a lone voice in the climate change wilderness but apparently not.

On Pg 16 of their latest issue (19th Feb ’07), BusinessWeek asked three experts for their response to the IPCC findings. Here is what they said:

The report had nothing to lead me to change my view that global warming cannot, at this stage be distinguished from natural, unforced internal variability. These ‘certainties’ are bogus” – Richard Lindzen, Alfred P Sloan Professor of Meteorology, Massachusetts Institute of Technology

“Saying that humans have a significant role in the warming is like saying there’s gambling in Las Vegas. What can you do about it? A lot of politically possible solutions will do less than nothing” – Patrick Michaels, Environmental Sciences Professor, University of Virginia

“Yes, humans have caused the earth to be slightly warmer, but much less that the report says. Many natural forces are not accounted for. I’d make a big bet that in the next 5 to 10 years the globe will start to cool” – William Gray, Emeritus Professor, Atmospheric Science, Colorado State University.

As for me, I will keep my faith in human ingenuity rather than worrying about the glaciers melting tomorrow.

Isn’t it time to focus on some real issues such as sanitation, clean water, malnutrition? (See Is the sky really going to fall tomorrow?)

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Below are some excerpts from Ross McKitrick’s article in Newsweek (emphasis mine):

“…The IPCC Web site claims an impressive number of participants: 450 lead authors, 800 contributors and 2,500 expert reviewers (of which I was one). But it would be a mistake to assume all these experts endorse everything in summary, including its bottom-line assessment: “Most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.”

Many disagree with the conclusion itself or the claimed level of certainty, but the fact is, we were never asked.

Nor can readers check how well the summary reflects the underlying science….

…This is a curious and disconcerting aspect of IPCC procedures: it needs a couple of months to revise a detailed report prepared by hundreds of scientists, to ensure it agrees with a brief summary drafted by a few dozen scientists and edited by hundreds of bureaucrats and politicians.

To be sure, the IPCC does an impressive job of mobilizing experts to produce a report it hopes will be of service to the world. No one should trivialize this achievement. But let’s not make the error of allowing a glossy summary to trivialize the complexities and uncertainties in climate change…

After all, if the issues were so simple, you wouldn’t need 3,700 experts to write the report. It is a paradox that some of the strongest claims of unanimity in science are made on a subject involving some of the deepest intellectual disagreements and uncertainties.

…scientists use computer models to approximate how the countless processes affecting the climate might behave over time. The IPCC report explains many important limitations of these models: the summary ignores them.

The report fails to achieve balance in other places. For instance, in its 2001 report, the IPCC effectively denied the view that the Earth’s climate had cycled through warming and cooling for 10 centuries prior to today’s warming.

…I am skeptical of this claim, based on a lot of research—including some high-level expert reviews last year—that showed the data did not support the IPCC claim. The 2007 report admits problems in this earlier view, but goes on to claim that climate is likely the warmest in 1300 years—precisely what the data don’t support.

The IPCC also denies that its estimate of rising temperatures, based on weather data collected in ground-level stations around the world, is affected by warming biases due to land-use change, urbanization and the sudden closure of half the world’s monitoring stations in the early 1990s. I am skeptical of their position, based on work I and others have done showing correlations between these influences and temperature trends.

The IPCC leaders have a point of view. Think of their report as the case for the prosecution. Maybe this time the district attorney is right. Maybe not: that is why we need to hear from the defense as well.”

February 17th, 2007 Posted by | Development Issues, Emerging Markets | 8 comments

8 Comments »

  1. Shantanu, very interesting. Complex issues need complete definition before they can be tackled. And neither side is apolitical – which is a common issue and a problem in almost all matters that are crying out for policy solutions (consider it major surgery, sorry to change the legal metaphor) and not small individual steps (Band-aid?).

    My PhD supervisor Dr David Reiner contributed to the Stern report recently. If you wish to discuss this with him sometime, I shall only be too pleased to make an introduction. Thanks.

    Comment by Shefaly Yogendra | February 18, 2007

  2. What is making me uneasy is the usual problem with complex issues making it into the general media, i.e. that suddenly evidence becomes overly simplified and that taking a stance becomes binary. It’s like abortion in the US, you can only be pro-life or pro-choice, never mind being pro-choice but considering late abortions inappropriate. But I digress. Even the Al Gore arguments (the strongest being the CO2 concentration measures, which are undoubtedly completely above the very long term natural norm) rely somewhat on boogey-man arguments (such as the flawed thermosaline theory whereby the Gulfstream might stop and bring a new glacial era to Europe).

    However there are a number of arguments in your post that I disagree with:
    – Who is talking about denying India and China the right to grow ? Growth is not incompatible with better use of energy (in fact it could become a competitive edge) and learning from past mistakes is a duty we all have, so these countries can to a certain extent avoid contributing to the problem.
    – Who is talking about turning China into a bogeyman ? Sure I have seen the press, but it is up to us to make sure the so-called developed countries (the US primus inter paris) take ownership of their contribution.
    – It is completely wrong to place global warming as a lesser or greater issue than malnutrition or sanitation, suggesting we should focus on certain issues first. If global warming is as much of a threat as is made out to be, it is going to have fairly dramatic impact on your other issues e.g. sanitation (imagine the Shangai plains under water).
    – You need to think “option theory” to take global warming properly into account. If the world is wrong about the threat of global warming, it will have worked hard and probably negatively impacted GDP growth to stave off a problem that did not materialise. In the process it will have made itself more energy efficient which is probably no bad thing. If the world is right, then potentially cataclysmic developments and extreme loss of biodiversity await us. Would you rather act or not act ?
    – But here is my primary problem with all this: Do you need to wait to see evidence of climate change to act upon it ? Does the central bank of the US wait for inflation to rise before it tightens its monetary policy ? Of course not, it looks at tightness in the labor market. We have some very leading indicators of a fundamental change in climate, and I for one am not willing to wait for the actual temperatures to rise.

    Comment by Fred Destin | February 19, 2007

  3. Fred, thanks for the comment. Some more thoughts:
    Re. point 1, what I said was not anyone denying India and China the right to grow but my difficulty in reconciling their development needs (and demand for energy) with the “evidence” of global warming. I did not say this is “incompatible” merely “difficult”.
    Re. 2, you seem to be agreeing with me.
    Re. point 3, I do believe that in a world of finite resources and constraints, we need priorities and some issues take priority over others (just as in real life). I have lived in India and what may seem like a non-issue to citizens in the developed world (such as sanitation) is a very real issue in developing countries and kills more people than one may imagine. Yes, “global warming” if it happens, will have a significant impact, but again, we cannot do everything at once.
    Re. point 4, I think thats a good way to start thinking about this..the challenge as you will agree – is in “pricing” the option!
    Re. point 5, as I said before, to me it is a matter of priorities and my concern is that there are some real “here-and-now” issues that may be overlooked amidst all the talk of global warming.

    Comment by Shantanu | February 19, 2007

  4. I’m a firm opponent of “kicking away the ladder”, and wouldn’t begrudge developing nations of their chance at creating a more affluent society. However, I would caution that getting too attached to historical models of success are likely to result in less than optimal models of development.

    One example – does it make sense to build out universal landline access in a country that does not have a fully developed telephone grid given the alternative technologies at our disposal? The problem is worst with infrastructure, which for most developed nations is built upon decades if not centuries of incremental advances, most of which are required to be compatible with the legacy system. Going further, does a country which does not have a postal system in place require that infrastructure now given the alternative models to offer analogous services?

    An out of the box approach may result in much better and cheaper systems. An advantage resulting from coming late to the party. The clean slate and the technological advances in the intervening period may result in a vastly superior architecture if only people (and interests) weren’t wedded to historical models of success.

    Anyway, whilst acknowledging the intense debate within “academic” circles, it does get a bit tedious when the same old “experts” are trotted out by the media as “shattering” the “consensus” of academic opinion. Academics (on both sides of the argument) of this day and age do not live in ivory towers immune from the power of money or fame, and some of those same old experts quoted by the article have long standing accusations of financial connections with industries which do not want to acknowledge global warming. Certainly I would like to see more disclosures of interest in the academic sector, as well as the media. Of course, regardless, the sceptics may be correct. But is it better to err on the side of caution or excess? I think it is very dangerous to assume that the ecosystem is a linear system. Its sheer complexity would indicate it is more likely to be in a fortuitous (for us inhabitants) narrow band of stability, from which any deviation has long term impacts which are not readily controlable beyond a critical point. When Prof Gray refuses to take a bet on the direction of global climate change because it will only play out beyond his lifetime, it seems indicative of a more general outlook on life, one which clearly doesn’t have much value placed on what may go on after his own life has ended, which would be compatible with refusing to be subject to restrictions on his way of life. Who cares what happens after I’m dead, right?

    Comment by shin | February 20, 2007

  5. I am enjoying this debate ! Please post more on topics that people really care about 🙂 For the developed world there is a broader debate about whether growth is the ultimate measure of success these days and whether it is even desirable in the long-term. The problem is that our impact on the environment, whether talking about water or global warming, is now happening on a scale that is comparable to that of the planet itself. So in a closed system where you are having a measurable impact on finite resources (and these do not replenish in the way we have assumed that they do) the optimisation of human welfare needs to happen under an additional set of constraints, which is the sustainable management of resources. That makes all of this a global geopolitical problem, who resolution is unfortunately incredibly tainted by national economic interest (oil foremost).

    Comment by Fred Destin | February 20, 2007

  6. Well said, Shin and Fred…thanks for enriching the discussion…

    Comment by Shantanu | February 21, 2007

  7. …The global warming movement is the first manifestation of secular, apocalyptic religion which idealizes science as God yet eschews logic and scientific method…

    Comment by Anon | February 28, 2007

  8. Came across this just now:
    “An ‘Inconvenient’ Rebuttal to Al Gore’s Global Warming Claims” http://www.foxnews.com/story/0,2933,256798,00.html

    From a Fox news report:
    The British TV station Channel Four is coming out with a scientific rebuttal to Al Gore’s “An Inconvenient Truth.”

    “The Great Global Warming Swindle” features experts in climatology, meteorology and other disciplines — from such places as MIT and NASA. The film disputes the link between carbon dioxide levels and global temperatures.

    The program is aired today (Mar 8)…sadly I missed it 🙁

    Comment by Shantanu Bhagwat | March 7, 2007

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