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Page added on December 1, 2019

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Economists and climate change: Building castles in the sky

Enviroment

Economist John Kenneth Galbraith once said that “the only function of economic forecasting is to make astrology look respectable.” Unfortunately, when some economists turn their sights on the economics of climate change, their unreliable methods imperil not just the economic life of humankind but its very existence.

I have written previously about this phenomenon in 2007 about how economists underestimate the critical importance of small (by economic value) but critical parts of the economy such as agriculture, forestry, and energy and in 2012 about how unsuited our current infrastructure is to the unfolding climate.

The trouble is that against all evidence, some climate economists keep building castles in the sky. Nobel Prize winner William Nordhaus is among the most prominent economists working on climate change and its economic effects. In short, Nordhaus, who is mentioned both in my 2007 and 2012 pieces, tells us not to worry too much about climate change. It will be cheaper to adapt to it than to prevent it or slow it down.

The problem with Nordhaus’ thinking (and that of many others like him) is that he cannot conceive of abrupt discontinuities in the workings of the planet or the workings of human society. In short, he cannot conceive that climate change could alter our environment so thoroughly and disrupt our agriculture so completely that it would lead to catastrophic results.

It is for this failure of imagination that economist Steven Keen recently took Nordhaus to task, showing through a careful critique of Nordhaus’ equations, that even those equations demonstrate catastrophe ahead when provisioned with the proper numbers and understanding. When Keen adds in what we know about tipping points in the climate system, he finds that Nordhaus’ own equations reveal that “[a]t 3 degrees, damages are 8 times as high. At 4 degrees, the ratio doesn’t matter, because the tipping point function says there would be no economy.” What a difference understanding the nonlinearity of the climate system makes!

A report in Yale Climate Connections mentions Nordhaus and others whose models seem to predict absurd things. One author calculated that when using Nordhaus’ model, “not until global warming reached 19 degrees C (34 degrees F – a global temperature that is virtually incompatible with life) did the model yield a 50% reduction in economic output.”

The articles explains, “Put simply, it’s difficult to project the economic impacts resulting from circumstances which are themselves unprecedented.”

So, how shall we proceed? The Yale piece suggests the following:

In 2013, Stanford’s Jonathan Koomey published a paper suggesting that instead of relying on economic cost-benefit analyses, climate policy should be shaped by “working forward toward a goal” like the Paris climate targets. In this framework, economics would be used for evaluating the most cost-effective policies to meet the targets, rather than for setting goals or arguing that all policies are too expensive…

Koomey points to the dangers that lurk not just in the economic analysis of climate, but in economic analysis of just about everything: Instead of choosing the goals we find desirable, we are letting economists choose them for us. That is a recipe for unrestrained growth at the expense of our health and the health of the biosphere upon which our every existence depends.

Resource Insights by Kurt Cobb



40 Comments on "Economists and climate change: Building castles in the sky"

  1. dissident on Sun, 1st Dec 2019 9:18 am 

    Funny how deniers bitch about climate models being “merely models”, as if they have a clue about what entails a climate model, but treat the ludicrous nonsense that passes for economics modeling. Economics models are not even built of first principles equations describing actual processes in reality. They are pure concocted voodoo using equations that mimic thermodynamics but have no empirical content.

    Economist witch doctors such as Jeffrey Sachs claimed that transition from command economy to free market economy in the post-USSR countries would occur in less than one year. In particular in terms of price adjustment. But we are seeing price transients and structural transients almost 30 years later. Economist clowns with their steady state voodoo do not have the first clue about dynamical systems behaviour.

  2. Davy on Sun, 1st Dec 2019 9:51 am 

    “Economics models are not even built of first principles equations describing actual processes in reality. They are pure concocted voodoo using equations that mimic thermodynamics but have no empirical content.”

    Bullshit, economic models have an important place in the discussion no different than scientist studying other species and ecosystems with modeling. Economics happens to be more abstract than other studies. The problem occurs with the interpretations and the inevitable claims by those who want to promote their ideology under the guise of economics.

  3. Habitual Liars Club on Sun, 1st Dec 2019 10:43 am 

    “Economics happens to be more abstract than other studies.”

    Exactly the point, DavySkum, and this renders economic theory at best an educated guess.

    The Skum is triggered to such a high degree that he/it attacks anything that does not conform to its conspiracy based nonsense.

    The Skum possesses zero ability to differentiate fact from fiction. A sample of his article postings bears this fact out quite strikingly.

  4. Harquebus on Sun, 1st Dec 2019 4:22 pm 

    My understanding is that, economic priciples and equations were developed using the laws of thermodynamics; our economy being one big heat engine. Factors such as resource depletion and environmental damage from waste products meant that the equations didn’t quite match expectations so, they were declared as externalities and removed from these equations.
    Whalla! Now everything worked out. We can go on growing our economy for ever and ever for the benefit of all. Oh never ending happy days.
    Thank fuck for economists otherwise, we would really be in the shit. (Sarc)

  5. Dooma on Mon, 2nd Dec 2019 2:06 am 

    Anyone who believes that infinite growth is achievable from an indisputably finite resource – is utterly insane. Insanity, coupled with power, is a toxic combination for life on earth.

  6. Sissyfuss on Mon, 2nd Dec 2019 8:16 am 

    We are on the verge of monetizing air and water but only of the clean variety. Harq is exactly right. To make the economic calculations appear feasible you must ignore any and all aftermarket costs such as pollution and its cleanup. Economic theory is most appealing when you externalize the disposal costs by ignoring them.

  7. goat2055 on Mon, 2nd Dec 2019 2:56 pm 

    Welcome to the Easter Island economy.

  8. Davy on Mon, 2nd Dec 2019 3:35 pm 

    Lighten up guys. I was just joking. Do y’all honestly believe I could be THAT stupid?

  9. JuanP ID theft on Mon, 2nd Dec 2019 6:09 pm 

    This is stupid:

    Davy said Lighten up guys. I was just joking. Do y’all hones…

    Davy said Oops, sorry Robert Inget. I was projecting again….

    Davy said I’m one of those 50%ers BTW bobby. dumbass

  10. JuanP sock suck on Mon, 2nd Dec 2019 6:09 pm 

    this is stupid too

    Richard Guenette said The US doesn’t want people in any “Thi…

  11. full woke supremacist muzzies jerk on Mon, 2nd Dec 2019 6:37 pm 

    goat2055 on Mon, 2nd Dec 2019 2:56 pm
    welcome back supertard goat

  12. JuanP suck sock on Mon, 2nd Dec 2019 6:42 pm 

    stupid

    full woke supremacist muzzies jerk said goat2055 on Mon, 2nd Dec 2019 2:56 pm welcome back…

  13. full woke supremacist muzzies jerk on Mon, 2nd Dec 2019 6:43 pm 

    i don’t apologize but when i do, i apologize to supertard big muzzie beard SAW SAWS pbuh swt. this is because my joke about fathertard francis poisoning him was just a joke. i wasn’t aware he was actually once poisoned by muzzies lovers.
    may (((supremetard))) keeps close watch of supertard big muzzie beard and keeps him safe.

  14. More insanity from the board lunatic Davyturd on Mon, 2nd Dec 2019 7:02 pm 

    full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I’m a cock lover and I love to run sorry I’m being emotional I’m thinking about cocks again i just love cock on Mon, 2nd Dec 2019 6:56 pm

    SAW SAWS pbuh swt juanPee has a deep dark secret. juanPee is a homo

  15. JuanP suck sock on Mon, 2nd Dec 2019 7:09 pm 

    more stupidity from stupid. apparently he has latent homosexual desires. Does his wife know is the question?

    full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I’m a cock lover and I love to run sorry I’m being emotional I’m thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee has a deep dark secret….

  16. More insanity from the board schizophrenic on Mon, 2nd Dec 2019 7:11 pm 

    JuanP suck sock Said blah blah blah blah blah….

    What a lunatic.

  17. More insanity from the board schizophrenic on Mon, 2nd Dec 2019 7:12 pm 

    full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I’m a cock lover and I love to run sorry I’m being emotional I’m thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee has on Mon, 2nd Dec 2019 7:10 pm

    supertard juanPee why are you so angry all the time?

  18. full woke supremacist muzzies jerk on Mon, 2nd Dec 2019 7:13 pm 

    good news yellowy supertard xie gave muzzie life
    yellowy supertard xie i’m your lover. all i need to do is dodge the mobile execution vans then i’m all set.
    oh please – another thing – don’t launch against america. i don’t nukular detonations

    thanks supertard xie

  19. More insanity from the board schizophrenic on Mon, 2nd Dec 2019 7:23 pm 

    full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I’m a cock lover and I love to run sorry I’m being emotional I’m thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee has on Mon, 2nd Dec 2019 7:19 pm

    JuanPee, supertard maximus plase refrain from being a weirdo. SAW SAWS pbuh swt anon needs your guidance to boyhood

  20. full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I'm a cock lover and I love to run sorry I'm being emotional I'm thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee has on Mon, 2nd Dec 2019 7:26 pm 

    full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I’m a cock lover and I love to run sorry I’m being emotional I’m thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee has a deep dark secret….

  21. REAL Green on Mon, 2nd Dec 2019 7:28 pm 

    Davy asked you real polite like not to come in our mouth JuanPeee. But nooo you didn’t listen. We have a real mad on now.

  22. Davy on Mon, 2nd Dec 2019 7:46 pm 

    I Hurd Tulsi and yer wife were real good serfing friends Juanpee. Before Tulsi went to war. And your wife is still smokin hot cus she never had kids. Is that true? I also herd Tulsi is a Muslim? Not that muslims are bad or anything.

  23. Robert Inget on Tue, 3rd Dec 2019 9:32 am 

    Both sides in the Climate debate tend to tell followers what they think they want to hear.

    Can we put aside ’cause’ and make an effort to deal with ‘effect’ like a day trader.

    Day traders don’t care about details, LT causes etc. Day traders deal with each new situation without bias. IOW’s ‘mitigation’. The Dutch didn’t build flood controls because economic theory.

    Genuine Public fire departments are in place to protect both renters and landlords, factories and
    bakeries.

    It’s one thing to deny AGW. Another, calling news that this decade we are leaving was the hottest recorded, ‘fake news’.

    If we can agree it is getting hotter, storms are more destructive, sea levels are rising, dialog,
    infrastructure build-out is possible.

  24. supremacist muzzies jerk on Tue, 3rd Dec 2019 9:54 am 

    i don’t get why muzzie fighters are still an issue. $.50 for amputated ones, and $1 for unampulated, i’ll take them all. save a lot of aggravation and money for americans. i’ll turn a profit, trust me. that’s all expenses, no feeding or anything after i got them. their doctrine of unlimited warfare and no adherent to rules of war is enough for me to decide. call me heartless but nobody not even muzzies and muzzies lover would come hang out with these filthy muzzies fighters

  25. supremacist muzzies jerk on Tue, 3rd Dec 2019 10:05 am 

    The best of humanity Allah ever created is worth a lot $4 billions per month to Germany but I’m a poor dhimmi living in muzzies enforced bottom dwellers status all I could afford is $1 for any unamputated muzzies. And I get the camels (train) moving, no excuses

  26. full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I'm a cock lover and I love to run sorry I'm being emotional I'm thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee on Tue, 3rd Dec 2019 10:09 am 

    Supertardo juanpee why are you so depressed?

  27. JuanP on Tue, 3rd Dec 2019 10:13 am 

    Supremisto muzzioso jerkingoffso I believe I am not from this planet. I am a separate species.

  28. Duncan Idaho on Tue, 3rd Dec 2019 10:28 am 

    The Fat Boy needs to keep his mouth shut.
    They need an aide to follow him around and stuff it with a BigMac or Twinkies if he opens it.

  29. JuanP on Tue, 3rd Dec 2019 11:43 am 

    Duncan, I have been to Trump parties in Palm Beach before he became POTUS. He is a really nice guy in person.

  30. supremacist muzzies jerk on Tue, 3rd Dec 2019 12:04 pm 

    A lot of northern us and probably all Canada was once covered by a Km of ice. Nothing happened to the ocean.
    This has been tard research we believe in low English

  31. Cloggie on Tue, 3rd Dec 2019 12:13 pm 

    Now you’re talking!

    https://russia-insider.com/en/node/27976

    “Macron: Russia Is Not the Enemy. Wants US Out of Euro Security”

    The EU is getting too big to be America’s vassal. The US soon will no longer have any say in European security matters. That is not to say that the US is the enemy, far from it! The US will always be our younger little brother that needs to be taken car of!

    If, say, evil Canadians would invade the US, desperate for new Lebensraum, or the Japanese or the Chinese, rest assured that we will pop over to show who is chief.

    Or more realistically, if a certain tribe would venture to make white America powerless…

    https://documents1940.wordpress.com/2017/09/27/paul-krugman-white-americans-are-losing-their-country/

    …rest assured, we will give acte de presence, as we are frightfully good at solving J-problems.

  32. Cloggie on Tue, 3rd Dec 2019 12:31 pm 

    Give it to China!

    https://www.independent.co.uk/environment/climate-change-australia-weather-record-temperature-50-degrees-report-bushfires-koalas-a9231116.html

    “Australia weather: 50C temperatures could become the norm as hundreds of climate records broken in 90 days, report finds”

  33. full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I'm a cock lover and I love to run sorry I'm being emotional I'm thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee on Tue, 3rd Dec 2019 12:53 pm 

    Half woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I’m a cock lover and I love to run sorry I’m being emotional I’m thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee

  34. JuanP on Tue, 3rd Dec 2019 2:11 pm 

    I stopped caring about humanity’s future a long time ago once I realized it was a waste of my time and energy. Now I think that it would be best for life on Earth if we ceased to exist as a species.

  35. supremacist muzzies jerk on Tue, 3rd Dec 2019 2:26 pm 

    Sry for tthelow English every1
    A lot of northern us and probably all Canada was once covered by a Km of ice. Nothing happened to the ocean.
    This has been tard research we believe in low English

  36. More DavySKUM ID theft on Tue, 3rd Dec 2019 2:39 pm 

    Davy dumbass on Tue, 3rd Dec 2019 11:43 am

  37. full woke supremacist muzzies jerk maximum newspeak I love cocks I love every kind of cocks so anyway I'm a cock lover and I love to run sorry I'm being emotional I'm thinking about cocks again i just love cock said SAW SAWS pbuh swt juanPee on Tue, 3rd Dec 2019 5:10 pm 

    superturd why are you always so angry and depressed?

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