I’m seeing a lot of wrangling over the recent (15+ year) pause in global average warming…when did it start, is it a full pause, shouldn’t we be taking the longer view, etc.
These are all interesting exercises, but they miss the most important point: the climate models that governments base policy decisions on have failed miserably.
I’ve updated our comparison of 90 climate models versus observations for global average surface temperatures through 2013, and we still see that >95% of the models have over-forecast the warming trend since 1979, whether we use their own surface temperature dataset (HadCRUT4), or our satellite dataset of lower tropospheric temperatures (UAH)…
Whether we are the cause of 100% of the observed warming or not, the conclusion is that global warming isn’t as bad as was predicted. That should have major policy implications…assuming policy is still informed by facts more than emotions and political aspirations.
Even many of the people who are supportive of sounding the global warning alarm, back off from catastrophism. It’s the politicians and the green movement that like to portray catastrophe. …
Global warming, climate change, all these things are just a dream come true for politicians. The opportunities for taxation, for policies, for control, for crony capitalism are just immense…
Judith Curry, climatologist and chair of the School of Earth and Atmospheric Sciences at the Georgia Tech, had a really good talk on Econ Talk about how the models are not just wrong, they are broken. They are built in such a way that they don’t account for some very important information.
And because those models are broken, they’ve made a lot of predictions that have simply not been true.
You should listen to the whole thing if you haven’t already:
The warming numbers most commonly advanced are created by climate computer models built almost entirely by scientists who believe in catastrophic global warming. The rate of warming forecast by these models depends on many assumptions and engineering to replicate a complex world in tractable terms, such as how water vapor and clouds will react to the direct heat added by carbon dioxide or the rate of heat uptake, or absorption, by the oceans.
We might forgive these modelers if their forecasts had not been so consistently and spectacularly wrong. From the beginning of climate modeling in the 1980s, these forecasts have, on average, always overstated the degree to which the Earth is warming compared with what we see in the real climate. …
The modelers insist that they are unlucky because natural temperature variability is masking the real warming. They might be right, but when a batter goes 0 for 10, he’s better off questioning his swing than blaming the umpire.
The models mostly miss warming in the deep atmosphere—from the Earth’s surface to 75,000 feet—which is supposed to be one of the real signals of warming caused by carbon dioxide. Here, the consensus ignores the reality of temperature observations of the deep atmosphere collected by satellites and balloons, which have continually shown less than half of the warming shown in the average model forecasts. …
We should not have a climate-science research program that searches only for ways to confirm prevailing theories, and we should not honor government leaders, such as Secretary Kerry, who attack others for their inconvenient, fact-based views.
Competitive markets with low costs of entry have a characteristic that consumers love and businesses lament: very low profit margins. GE, Philips and Sylvania dominated the U.S. market in incandescents, but they couldn’t convert that dominance into price hikes. Because of light bulb’s low material and manufacturing costs, any big climb in prices would have invited new competitors to undercut the giants — and that new competitor would probably have won a distribution deal with Wal-Mart.
So, simply the threat of competition kept profit margins low on the traditional light bulb — that’s the magic of capitalism. GE and Sylvania searched for higher profits by improving the bulb — think of the GE Soft White bulb. These companies, with their giant research budgets, made advances with halogen, LED and fluorescent technologies, and even high-efficiency incandescents. They sold these bulbs at a much higher prices — but they couldn’t get many customers to buy them for those high prices. That’s the hard part about capitalism — consumers, not manufacturers, get to demand what something is worth.
Capitalism ruining their party, the bulb-makers turned to government. Philips teamed up with NRDC. GE leaned on its huge lobbying army — the largest in the nation — and soon they were able to ban the low-profit-margin bulbs.
The high-tech, high-cost, high-margin bulbs have advantages: They live longer and use much less electricity. In the long run, this can save people money. But depending on your circumstances, these gains might be mitigated or eradicated.
The current replacement for traditional bulbs are compact fluorescents (those curly bulbs). They give off UV rays, contain mercury gas, take a while to get bright and don’t last any longer than regular bulbs if you flip them on and off a lot.
Newer technologies, like LED bulbs, are better than CFLs, and they supposedly last 20 years. But they cost even more. In your office building, they probably make sense. In your house? Well they won’t last two decades in a house full of kids who wrestle with the dog and throw footballs around the living room (maybe Congress should ban domestic wrestling and passing).
There is a middle ground between everyone using traditional bulbs and traditional bulbs being illegal. It’s called free choice: Let people choose if they want more efficient and expensive bulbs. Maybe they’ll chose LEDs for some purposes and cheap bulbs for others.
But consumer choice is no good either for nanny-staters or companies seeking high profit margins.
Technologies often run the course from breakthrough innovation to obsolete. Think of the 8-track, the Model T or Kodachrome film. But the market didn’t kill the traditional light bulb. Government did it, at the request of big business.
The ban is crony capitalism in its most seductive form—when it’s disguised as green.
Major light bulb manufacturers supported the ban from the outset. The profit margin on old-style bulbs was pitifully low, and consumers just weren’t buying the higher-margin efficiency bulbs. New standards were needed, a lobbyist for the National Electrical Manufacturing Association told Congress in 2007, “in order to further educate consumers on the benefits of energy-efficient products.”
So Philips Electronics and other manufacturers joined with environmental groups to push for tighter lighting standards. As the New York Times Magazine explained in 2011, “Philips told its environmental allies it was well positioned to capitalize on the transition to new technologies and wanted to get ahead of an efficiency movement that was gaining momentum abroad and in states like California.” After much negotiation, a classic “bootleggers-and-Baptists” coalition was born. Industry and environmental groups agreed to endorse legislation to [attempt to] increase lighting efficiency by 25 to 30 percent.
Incandescent light bulbs, we’re told, are vastly inferior to the newfangled alternatives available today. The compact fluorescents lamps (CFLs), LEDs, and halogen bulbs are an apparent no-brainer: They last longer and convert much more of their energy into light rather than heat, all while cutting back on your energy bill. (So, of course, the government must stop you from ever making the mistake of choosing the traditional bulbs.)
Except many consumers aren’t buying it. The EPA estimates that, of the four billion light-bulb sockets in United States, more than three billion still hold incandescent bulbs. “By 2014, the traditional incandescent light bulbs… will be virtually obsolete,” claimed a 2007 press release from former Sen. Jeff Bingaman, the ban’s original sponsor. But according to the latest industry data, incandescents still make up nearly 65 percent of all U.S. light-bulb shipments.
Many consumers are turned off by the higher upfront costs of the alternatives. A single 40-watt LED bulb costs $7.50 or more, while a traditional incandescent bulb goes for around 40 cents. Some are finding that the CFLs don’t last nearly as long as their supporters claim—especially if they are switched on and off frequently, or if they are attached to a dimmer switch.
The list of complaints about the “efficient” bulbs goes on: They are often slow to respond, sensitive to high temperatures, and can cast a harsh and unattractive tone. CFLs also contain a small amount of mercury, which requires extensive and careful cleanup when a bulb breaks.
And they may not be saving us much energy after all. The typical U.S. home uses no less energy per capita than it did in the 1970s, despite an onslaught of efficiency standards for everything from refrigerators and televisions to the amount of power consumed when appliances are in “standby mode.” The money saved in the long run by using these appliances is often spent on even more power-sucking gadgets. And if light bulbs cost less to use, why not just leave the lights on longer?
The light-bulb ban is an example of how political coalitions are formed to force regulations on the general public that benefit a few large producers. A recent survey found that six out of every ten Americans are still in the dark about the latest bulb ban. Meanwhile, the dimwitted light-bulb policy just became the law of the land. The lesson here is straightforward: When industry and environmental groups claim that a regulation will solve all problems, consumers beware. It’s probably green cronyism in disguise.
Both theory and history indicate that government management of resources leads to waste and even absurdity. People view traffic jams, water shortages, power outages, deforestation, endangered species, and fishing rules as facts of life. But they are not necessary. On the contrary, they are perversities produced by government management. Private markets are not perfect, but competition and private ownership give the best possible framework for an efficient use of scarce resources.
This column is exceptional.
Social Cost of Carbon | Bob Murphy
If burning fossil fuels produces large net externalities, the sensible way of taking account of them is to include those costs in the price of fuel and let individuals in a market society adjust to them. … [However], global warming on the scale suggested by the IPCC reports, about three degrees Centigrade and a foot or two of sea level rise over a century, is at least as likely to produce net positive effects as net negative, probably more likely. That might not be true if the trend was continued for several more centuries but, given how rapidly technological change is altering the world, I think any predictions more than a century out, probably any predictions even that far out, should be viewed with extreme skepticism.
If burning fossil fuels produces large net externalities, the sensible way of taking account of them is to include those costs in the price of fuel and let individuals in a market society adjust to them. …
[However], global warming on the scale suggested by the IPCC reports, about three degrees Centigrade and a foot or two of sea level rise over a century, is at least as likely to produce net positive effects as net negative, probably more likely. That might not be true if the trend was continued for several more centuries but, given how rapidly technological change is altering the world, I think any predictions more than a century out, probably any predictions even that far out, should be viewed with extreme skepticism.
When there is a profit incentive - either by farming Rhinos or by maintaining a tourist or hunting reserve - an endangered species becomes more secure. This is the same profit motive that kept the bee population strong enough to keep food costs low despite millions upon millions of wild bees dying a few years ago. Counter to the common narrative, private property conserves resources precisely because it becomes in the owners’ best interests to do so.
We find that the San Francisco County [plastic bag] ban is associated with a 46 percent increase in deaths from foodborne illnesses. This implies an increase of 5.5 annual deaths for the county.
"Grocery Bag Bans and Foodborne Illness" study by Jonathan Klick of University of Pennsylvania Law School and the Property and Environment Research Center and Joshua D. Wright of the George Mason University School of Law.
As Bastiat would note: there is the seen and the unseen.
Hey, look - a comic book villain who’s a neo-Malthusian Keynesian, professing the virtues of broken windows.
Federal policies promoting ethanol are inefficient at any time, but they are particularly harmful to consumers in the midst of a severe drought. The EPA’s schedule of minimum targets for ethanol in the nation’s fuel mix, has caused some 40 percent of the nation’s corn harvest to be used for feeding vehicles, not people. Our analysis here is straightforward economics: Paul Krugman himself publicly called for an end to government ethanol support, over a decade ago, when the pressure on food prices wasn’t nearly as intense and we echo his call today.
A recent report from “Connecting the Dots” (an investment publication distributed by Standard Research) shows the startling impact that federal ethanol mandates and subsidies have had on the agricultural sector. We reproduce (with permission) some of the most striking charts below:
Figure 2. Percentage of U.S. Acreage Devoted to Various Crops
As Figure 2 shows, the ethanol mandates (embedded in the Energy Acts of 2005 and 2007) had a significant impact on the decisions of American farmers. Because corn (destined for ethanol) absorbed a much larger fraction of the total acreage, it “crowded out” the farmland available for other crops. Thus, the ethanol mandate contributes to price spikes in wheat, soybeans, and other crops; this isn’t simply an issue of corn.
The effects don’t stop there. Because the price of corn is higher than it otherwise would be (since the mandate gives an artificial demand for corn-based ethanol), the price of cattle feed is driven higher, too. This puts pressure on cattle ranchers, which in turn causes spikes in the price of beef. A similar process occurs for poultry and swine. In short, the massive federal intervention in the corn market ends up rippling throughout the entire food sector.
To get a sense of the size of the distortions introduced into the agricultural markets, look at the value of Illinois farmland—deep in the Corn Belt—with the introduction of the ethanol mandate:
Figure 6. Index of Illinois Farmland Value
Notice that the general collapse of the real estate market didn’t pop the apparent bubble in Illinois farmland; it merely slowed its inflation. By forcing fuel refiners to use far more of a product (corn-based ethanol) than they otherwise would, the federal government gives artificial support to corn prices which in turn bid up farm values in the Corn Belt. As usual, government interventions in one area of the economy cause a cascade of distortions.
[I]f private individuals were to own all the lands and resources, then it would be to the owners’ interest to maximize the present value of each resource. Excessive depletion of the resource would lower its capital value on the market. Against the preservation of the capital value of the resource as a whole, the resource owner balances the income to be presently obtained from its use. The balance is decided, ceteris paribus, by the time preference and the other preferences of the market. If private individuals can only use but not own the land, the balance is destroyed, and the government has provided an impetus to excessive present use. Not only is the announced aim of conservation laws—to aid the future at the expense of the present—illegitimate, and the arguments in favor of it invalid, but compulsory conservation would not achieve even this goal. For the future is already provided for through present saving and investment. Conservation laws will indeed coerce greater investment in natural resources: using other resources to maintain renewable resources and forcing a greater inventory of stock in depletable resources. But total investment is determined by the time preferences of individuals, and these will not have changed. Conservation laws, then, do not really increase total provisions for the future; they merely shift investment from capital goods, buildings, etc., to natural resources. They thereby impose an inefficient and distorted investment pattern on the economy.
[I]f private individuals were to own all the lands and resources, then it would be to the owners’ interest to maximize the present value of each resource. Excessive depletion of the resource would lower its capital value on the market. Against the preservation of the capital value of the resource as a whole, the resource owner balances the income to be presently obtained from its use. The balance is decided, ceteris paribus, by the time preference and the other preferences of the market. If private individuals can only use but not own the land, the balance is destroyed, and the government has provided an impetus to excessive present use.
Not only is the announced aim of conservation laws—to aid the future at the expense of the present—illegitimate, and the arguments in favor of it invalid, but compulsory conservation would not achieve even this goal. For the future is already provided for through present saving and investment. Conservation laws will indeed coerce greater investment in natural resources: using other resources to maintain renewable resources and forcing a greater inventory of stock in depletable resources. But total investment is determined by the time preferences of individuals, and these will not have changed. Conservation laws, then, do not really increase total provisions for the future; they merely shift investment from capital goods, buildings, etc., to natural resources. They thereby impose an inefficient and distorted investment pattern on the economy.
Murray Rothbard, Power & Market
The free market conserves resources.
Most conservationist arguments evince almost no familiarity with economics. Many assume that entrepreneurs have no foresight and would blithely use natural resources only to find themselves some day suddenly without any property. Only the wise, providential State can foresee depletion. The absurdity of this argument is evident when we realize that the present value of the entrepreneur’s land is dependent on the expected future rents from his resources. Even if the entrepreneur himself should be unaccountably ignorant, the market will not be, and its valuation (i.e., the valuation of interested experts with money at stake) will tend to reflect its value accurately. In fact, it is the entrepreneur’s business to forecast, and he is rewarded for correct forecasting by profits. Will entrepreneurs on the market have less foresight than bureaucrats comfortably ensconced in their seizure of the taxpayers’ money?
— Murray Rothbard, Power & Market