Economics, Portfolio Optimization, and Technical Analysis
Joined: 28 Dec 2005
|Posted: Mon Aug 03, 2015 10:02 am Post subject: Climate Change
Given there’s no scientific evidence humans have a significant effect on global warming, it seems, the goal is to whip up a mass hysteria to justify government control of the energy industry and the subsequent high prices.
Prof. Perry is not what I would consider an econ professor. My understanding is that he teaches business finance, which isn’t quite the same thing as macroeconomics or econometrics. It’s like saying a dentist is a doctor in the same way that a heart surgeon is a doctor. Kind of a difference.
The legitimate scientific argument is not whether global warming is real or a hoax, but rather what is the carbon limit. Some say it’s 350ppm. Others say 450ppm. Some say we have two generations to get our act together while others say we have less than a generation. Those are legitimate arguments about genuinely uncertain parameters. What is not legitimate is an outright denial of manmade global warming.
Prof. Perry has a Ph.D in economics. So, he must know something about macroeconomics or econometrics.
And, CO2 levels were much higher in the past before humans existed:
Jurassic (period) – Wikipedia
See box on right. The mean CO2 level is estimated to be 1,950 PPM.
Peak Trader Yes, everyone knows that CO2 levels have been much higher at certain points in earth’s history. We all know that. But back then there were forces in play that tended to keep temperatures from running away. For example, the sun put out less energy, the earth today is very slightly closer to the sun than it was tens of millions of years ago, the earth’s tilt varies, the land masses were consolidated causing different ocean currents, etc. What concerns folks at NOAA is that most of those forces that kept the earth’s temperatures from running away and turning Earth into Venus are no longer in play. The temperature/CO2 balance is a knife edge thing. In the past it was higher temperatures that released CO2, so CO2 concentrations lagged temperature. That’s not the case today. Today it’s the CO2 concentrations that are increasing the temperatures, so we can’t count on the same self-correcting forces that kept things in equilibrium tens of millions of years ago. The difference between 3 parts in 10 thousand and 2 parts in 10 thousand is the difference between an habitable earth and a frozen earth. We should be equally worried about the difference between 3 parts in 10 thousand and 4 or 5 parts in ten thousand.
2slugbaits, so you’re saying, because of changes in the sun’s energy output, changes in the earth’s distance to the sun, changes in the earth’s tilt, different ocean currents, etc., when CO2 levels rise again to pre-human levels, temperatures will run away and the earth is doomed.
If you believe humans have a significant or lasting effect on CO2 levels, then we’re lucky the use of fossil fuels, for a few hundred years, happened to take place when CO2 levels are near a historic low.
It should be noted, the emergence of abundant and cheap energy from fossil fuels has raised living standards and extended life spans substantially.
I heard, the most generous estimate of the EPA plan to reduce carbon in the atmosphere would cost tens of trillions of dollars and result in a reduction of the earth’s temperature by 15/1,000th of a degree by the year 2,100.
We should get rid of all energy subsidies and taxes, to promote economic growth and raise government tax revenue, along with reducing the costs of regulations in the energy industry.
Can you please cite a source for “tens of trillions of dollars”?
EPA estimates costs at $4.3 – $8.8 billion per year, depending on the scenario and discount rate. My back-of-the-envelope conversion to the NPV of this as a perpetual flow cost at discount rates of 3% and 7% gives a range of costs of $61 billion (=$4.3b/7%) to $293 billion (=$8.8b/3%). Source: Tables 8-1 and 8-3 of http://www2.epa.gov/sites/production/files/2014-06/documents/20140602ria-clean-power-plan.pdf
The economists hired by the coal industry give higher estimates, unsurprisingly. They put the NPV of costs between $366 billion to $479 billion. Of course, industry has historically tended to overstate compliance costs, so this should really be considered an upper bound. Source: Figure ES-2 of http://americaspower.org/sites/default/files/NERA_CPP%20Report_Final_Oct%202014.pdf
Even industry’s estimates put NPV costs under $0.5 trillion. Not sure where you got $10 trillion from.
I can’t comment on the effect on temperature as I am not an atmospheric scientist, but EPA estimated climate benefits on the order of $5 billion per year to $50 billion per year, plus non-climate benefits of $17 billion to $52 billion per year due to public health benefits from reductions in PM2.5, ozone, SO2, and NOx. (Again, the ranges represent different scenarios and discount rates). Based on this, it seems that the rule likely has a positive NPV even if you ignore the impact on earth temperatures.
And if you don’t believe EPA’s benefit numbers, use the coal industry’s estimates of emissions reductions: 456 to 825 million metric tons reduced per year, on average, from 2017-2031 (source: same document above, Table ES-1). Using the $48 social cost of carbon for 2025 (source: https://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf) gives annual benefits on the order of $22 billion to $40 billion (48*456 b, 48*825 b). (Of course the $48 is in is in 2007 dollars. Adjusting to 2015 dollars it would be $25 bilion to $46 billion. This is similar to the annualized costs estimated by industry, suggesting costs roughly on par with benefits, of course before accounting for the non-climate benefits mentioned above.
I heard those numbers on the radio, which may be an exaggeration.
Here’s what Cato says:
“The EPA’s regulations seek to limit carbon dioxide emissions from electricity production in the year 2030 to a level 30 percent below what they were in 2005. It is worth noting that power plant CO2 emissions already dropped by about 15% from 2005 to 2012, largely, because of market forces which favor less-CO2-emitting natural gas over coal as the fuel of choice for producing electricity.
The rise in projected future temperature rise that is averted by the proposed EPA restrictions of carbon dioxide emissions from existing power plants is less than 0.02°C between now and the end of the century assuming the IPCC’s middle-of-the-road future emissions scenario.”
If these regulations slow annual real GDP growth slightly, real GDP will be much lower in the year 2,100.
If we had these type of regulations a hundred years ago, there would’ve been some benefits, but they would’ve been tiny compared to the costs.
It was only because fossil fuels boosted national income substantially, that we could afford more and more regulations.
And, too many regulations, or more regulations in an overregulated economy, does more harm than good.
The European Foundation has released a dossier of 100 reasons that Global Warming is natural:
* There is “no real scientific proof” that the current warming is caused by the rise of greenhouse gases from man’s activity.
2) Man-made carbon dioxide emissions throughout human history constitute less than 0.00022 percent of the total naturally emitted from the mantle of the earth during geological history.
3) Warmer periods of the Earth’s history came around 800 years before rises in CO2 levels.
* After World War II, there was a huge surge in recorded CO2 emissions but global temperatures fell for four decades after 1940.
* Throughout the Earth’s history, temperatures have often been warmer than now and CO2 levels have often been higher – more than ten times as high.
6) Significant changes in climate have continually occurred throughout geologic time.
7) The 0.7C increase in the average global temperature over the last hundred years is entirely consistent with well-established, long-term, natural climate trends.
The IPCC theory is driven by just 60 scientists and favourable reviewers not the 4,000 usually cited.
9) Leaked e-mails from British climate scientists – in a scandal known as “Climate-gate” - suggest that that has been manipulated to exaggerate global warming
10) A large body of scientific research suggests that the sun is responsible for the greater share of climate change during the past hundred years.
11) Politicians and activiists claim rising sea levels are a direct cause of global warming but sea levels rates have been increasing steadily since the last ice age 10,000 ago
12) Philip Stott, Emeritus Professor of Biogeography at the School of Oriental and African Studies in London says climate change is too complicated to be caused by just one factor, whether CO2 or clouds
13) Peter Lilley MP said last month that “fewer people in Britain than in any other country believe in the importance of global warming. That is despite the fact that our Government and our political class—predominantly—are more committed to it than their counterparts in any other country in the world”.
14) In pursuit of the global warming rhetoric, wind farms will do very little to nothing to reduce CO2 emissions
15) Professor Plimer, Professor of Geology and Earth Sciences at the University of Adelaide, stated that the idea of taking a single trace gas in the atmosphere, accusing it and finding it guilty of total responsibility for climate change, is an “absurdity”
16) A Harvard University astrophysicist and geophysicist, Willie Soon, said he is “embarrassed and puzzled” by the shallow science in papers that support the proposition that the earth faces a climate crisis caused by global warming.
17) The science of what determines the earth’s temperature is in fact far from settled or understood.
* Despite activist concerns over CO2 levels, CO2 is a minor greenhouse gas, unlike water vapour which is tied to climate concerns, and which we can’t even pretend to control
* A petition by scientists trying to tell the world that the political and media portrayal of global warming is false was put forward in the Heidelberg Appeal in 1992. Today, more than 4,000 signatories, including 72 Nobel Prize winners, from 106 countries have signed it.
20) It is claimed the average global temperature increased at a dangerously fast rate in the 20th century but the recent rate of average global temperature rise has been between 1 and 2 degrees C per century - within natural rates
21) Professor Zbigniew Jaworowski, Chairman of the Scientific Council of the Central Laboratory for Radiological Protection in Warsaw, Poland says the earth’s temperature has more to do with cloud cover and water vapor than CO2 concentration in the atmosphere.
22) There is strong evidence from solar studies which suggests that the Earth’s current temperature stasis will be followed by climatic cooling over the next few decades
* It is myth that receding glaciers are proof of global warming as glaciers have been receding and growing cyclically for many centuries
24) It is a falsehood that the earth’s poles are warming because that is natural variation and while the western Arctic may be getting somewhat warmer we also see that the Eastern Arctic and Greenland are getting colder
25) The IPCC claims climate driven “impacts on biodiversity are significant and of key relevance” but those claims are simply not supported by scientific research
26) The IPCC threat of climate change to the world’s species does not make sense as wild species are at least one million years old, which means they have all been through hundreds of climate cycles
27) Research goes strongly against claims that CO2-induced global warming would cause catastrophic disintegration of the Greenland and Antarctic Ice Sheets.
2 Despite activist concerns over CO2 levels, rising CO2 levels are our best hope of raising crop yields to feed an ever-growing population
29) The biggest climate change ever experienced on earth took place around 700 million years ago
30) The slight increase in temperature which has been observed since 1900 is entirely consistent with well-established, long-term natural climate cycles
31) Despite activist concerns over CO2 levels, rising CO2 levels of some so-called “greenhouse gases” may be contributing to higher oxygen levels and global cooling, not warming
32) Accurate satellite, balloon and mountain top observations made over the last three decades have not shown any significant change in the long term rate of increase in global temperatures
* Today’s CO2 concentration of around 385 ppm is very low compared to most of the earth’s history – we actually live in a carbon-deficient atmosphere
* It is a myth that CO2 is the most common greenhouse gas because greenhouse gases form about 3% of the atmosphere by volume, and CO2 constitutes about 0.037% of the atmosphere
* It is a myth that computer models verify that CO2 increases will cause significant global warming because computer models can be made to “verify” anything
36) There is no scientific or statistical evidence whatsoever that global warming will cause more storms and other weather extremes
37) One statement deleted from a UN report in 1996 stated that “none of the studies cited above has shown clear evidence that we can attribute the observed climate changes to increases in greenhouse gases”
3 The world “warmed” by 0.07 +/- 0.07 degrees C from 1999 to 2008, not the 0.20 degrees C expected by the IPCC
39) The Intergovernmental Panel on Climate Change says “it is likely that future tropical cyclones (typhoons and hurricanes) will become more intense” but there has been no increase in the intensity or frequency of tropical cyclones globally
* Rising CO2 levels in the atmosphere can be shown not only to have a negligible effect on the Earth’s many ecosystems, but in some cases to be a positive help to many organisms
* Researchers who compare and contrast climate change impact on civilizations found warm periods are beneficial to mankind and cold periods harmful
42) The Met Office asserts we are in the hottest decade since records began but this is precisely what the world should expect if the climate is cyclical
43) Rising CO2 levels increase plant growth and make plants more resistant to drought and pests
44) The historical increase in the air’s CO2 content has improved human nutrition by raising crop yields during the past 150 years
45) The increase of the air’s CO2 content has probably helped lengthen human lifespans since the beginning of the Industrial Revolution
* The IPCC alleges that “climate change currently contributes to the global burden of disease and premature deaths” but the evidence shows that higher temperatures and rising CO2 levels has helped global populations
47) In May of 2004, the Russian Academy of Sciences published a report concluding that the Kyoto Protocol has no scientific grounding at all.
* The “Climate-gate” scandal pointed to a expensive public campaign of disinformation and the denigration of scientists who opposed the belief that CO2 emissions were causing climate change
49) The head of Britain’s climate change watchdog has predicted households will need to spend up to £15,000 on a full energy efficiency makeover if the Government is to meet its ambitious targets for cutting carbon emissions.
50) Wind power is unlikely to be the answer to our energy needs. The wind power industry argues that there are “no direct subsidies” but it involves a total subsidy of as much as £60 per MWh which falls directly on electricity consumers. This burden will grow in line with attempts to achieve Wind power targets, according to a recent OFGEM report.
51) Wind farms are not an efficient way to produce energy. The British Wind Energy Association (BWEA) accepts a figure of 75 per cent back-up power is required.
52) Global temperatures are below the low end of IPCC predictions not at “at the top end of IPCC estimates”
53) Climate alarmists have raised the concern over acidification of the oceans but Tom Segalstad from Oslo University in Norway , and others, have noted that the composition of ocean water – including CO2, calcium, and water – can act as a buffering agent in the acidification of the oceans.
54) The UN’s IPCC computer models of human-caused global warming predict the emergence of a “hotspot” in the upper troposphere over the tropics. Former researcher in the Australian Department of Climate Change, David Evans, said there is no evidence of such a hotspot
55) The argument that climate change is a of result of global warming caused by human activity is the argument of flat Earthers.
56) The manner in which US President Barack Obama sidestepped Congress to order emission cuts shows how undemocratic and irrational the entire international decision-making process has become with regards to emission-target setting.
57) William Kininmonth, a former head of the National Climate Centre and a consultant to the World Meteorological Organisation, wrote “the likely extent of global temperature rise from a doubling of CO2 is less than 1C. Such warming is well within the envelope of variation experienced during the past 10,000 years and insignificant in the context of glacial cycles during the past million years, when Earth has been predominantly very cold and covered by extensive ice sheets.”
5 Canada has shown the world targets derived from the existing Kyoto commitments were always unrealistic and did not work for the country.
59) In the lead up to the Copenhagen summit, David Davis MP said of previous climate summits, at Rio de Janeiro in 1992 and Kyoto in 1997 that many had promised greater cuts, but “neither happened”, but we are continuing along the same lines.
60) The UK ’s environmental policy has a long-term price tag of about £55 billion, before taking into account the impact on its economic growth.
61) The UN’s panel on climate change warned that Himalayan glaciers could melt to a fifth of current levels by 2035. J. Graham Cogley a professor at Ontario Trent University, claims this inaccurate stating the UN authors got the date from an earlier report wrong by more than 300 years.
62) Under existing Kyoto obligations the EU has attempted to claim success, while actually increasing emissions by 13 per cent, according to Lord Lawson. In addition the EU has pursued this scheme by purchasing “offsets” from countries such as China paying them billions of dollars to destroy atmospheric pollutants, such as CFC-23, which were manufactured purely in order to be destroyed.
63) It is claimed that the average global temperature was relatively unchanging in pre-industrial times but sky-rocketed since 1900, and will increase by several degrees more over the next 100 years according to Penn State University researcher Michael Mann. There is no convincing empirical evidence that past climate was unchanging, nor that 20th century changes in average global temperature were unusual or unnatural.
64) Michael Mann of Penn State University has actually shown that the Medieval Warm Period and the Little Ice Age did in fact exist, which contrasts with his earlier work which produced the “hockey stick graph” which showed a constant temperature over the past thousand years or so followed by a recent dramatic upturn.
65) The globe’s current approach to climate change in which major industrialised countries agree to nonsensical targets for their CO2 emissions by a given date, as it has been under the Kyoto system, is very expensive.
66) The “Climate-gate” scandal revealed that a scientific team had emailed one another about using a “trick” for the sake of concealing a “decline” in temperatures when looking at the history of the Earth’s temperature.
67) Global temperatures have not risen in any statistically-significant sense for 15 years and have actually been falling for nine years. The “Climate-gate” scandal revealed a scientific team had expressed dismay at the fact global warming was contrary to their predictions and admitted their inability to explain it was “a travesty”.
6 The IPCC predicts that a warmer planet will lead to more extreme weather, including drought, flooding, storms, snow, and wildfires. But over the last century, during which the IPCC claims the world experienced more rapid warming than any time in the past two millennia, the world did not experience significantly greater trends in any of these extreme weather events.
69) In explaining the average temperature standstill we are currently experiencing, the Met Office Hadley Centre ran a series of computer climate predictions and found in many of the computer runs there were decade-long standstills but none for 15 years – so it expects global warming to resume swiftly.
70) Richard Lindzen, Professor of Atmospheric Sciences at Massachusetts Institute of Technology, wrote: “The notion of a static, unchanging climate is foreign to the history of the Earth or any other planet with a fluid envelope. Such hysteria (over global warming) simply represents the scientific illiteracy of much of the public, the susceptibility of the public to the substitution of repetition for truth.”
71) Despite the 1997 Kyoto Protocol’s status as the flagship of the fight against climate change it has been a failure.
72) The first phase of the EU’s Emissions Trading Scheme (ETS), which ran from 2005 to 2007 was a failure. Huge over-allocation of permits to pollute led to a collapse in the price of carbon from €33 to just €0.20 per tonne meaning the system did not reduce emissions at all.
73) The EU trading scheme, to manage carbon emissions has completely failed and actually allows European businesses to duck out of making their emissions reductions at home by offsetting, which means paying for cuts to be made overseas instead.
74) To date “cap and trade” carbon markets have done almost nothing to reduce emissions.
75) In the United States , the cap-and-trade is an approach designed to control carbon emissions and will impose huge costs upon American citizens via a carbon tax on all goods and services produced in the United States. The average family of four can expect to pay an additional $1700, or £1,043, more each year. It is predicted that the United States will lose more than 2 million jobs as the result of cap-and-trade schemes.
76) Dr Roy Spencer, a principal research scientist at the University of Alabama in Huntsville, has indicated that out of the 21 climate models tracked by the IPCC the differences in warming exhibited by those models is mostly the result of different strengths of positive cloud feedback – and that increasing CO2 is insufficient to explain global-average warming in the last 50 to 100 years.
77) Why should politicians devote our scarce resources in a globally competitive world to a false and ill-defined problem, while ignoring the real problems the entire planet faces, such as: poverty, hunger, disease or terrorism.
7 A proper analysis of ice core records from the past 650,000 years demonstrates that temperature increases have come before, and not resulted from, increases in CO2 by hundreds of years.
79) Since the cause of global warming is mostly natural, then there is in actual fact very little we can do about it. (We are still not able to control the sun).
80) A substantial number of the panel of 2,500 climate scientists on the United Nation’s International Panel on Climate Change, which created a statement on scientific unanimity on climate change and man-made global warming, were found to have serious concerns.
81) The UK’s Met Office has been forced this year to re-examine 160 years of temperature data after admitting that public confidence in the science on man-made global warming has been shattered by revelations about the data.
82) Politicians and activists push for renewable energy sources such as wind turbines under the rhetoric of climate change, but it is essentially about money – under the system of Renewable Obligations. Much of the money is paid for by consumers in electricity bills. It amounts to £1 billion a year.
83) The “Climate-gate” scandal revealed that a scientific team had tampered with their own data so as to conceal inconsistencies and errors.
84) The “Climate-gate” scandal revealed that a scientific team had campaigned for the removal of a learned journal’s editor, solely because he did not share their willingness to debase science for political purposes.
85) Ice-core data clearly show that temperatures change centuries before concentrations of atmospheric CO2 change. Thus, there appears to be little evidence for insisting that changes in concentrations of CO2 are the cause of past temperature and climate change.
86) There are no experimentally verified processes explaining how CO2 concentrations can fall in a few centuries without falling temperatures – in fact it is changing temperatures which cause changes in CO2 concentrations, which is consistent with experiments that show CO2 is the atmospheric gas most readily absorbed by water.
87) The Government’s Renewable Energy Strategy contains a massive increase in electricity generation by wind power costing around £4 billion a year over the next twenty years. The benefits will be only £4 to £5 billion overall (not per annum). So costs will outnumber benefits by a range of between eleven and seventeen times.
8 Whilst CO2 levels have indeed changed for various reasons, human and otherwise, just as they have throughout history, the CO2 content of the atmosphere has increased since the beginning of the industrial revolution, and the growth rate has now been constant for the past 25 years.
89) It is a myth that CO2 is a pollutant, because nitrogen forms 80% of our atmosphere and human beings could not live in 100% nitrogen either: CO2 is no more a pollutant than nitrogen is and CO2 is essential to life.
90) Politicians and climate activists make claims to rising sea levels but certain members in the IPCC chose an area to measure in Hong Kong that is subsiding. They used the record reading of 2.3 mm per year rise of sea level.
91) The accepted global average temperature statistics used by the Intergovernmental Panel on Climate Change show that no ground-based warming has occurred since 1998.
92) If one factors in non-greenhouse influences such as El Nino events and large volcanic eruptions, lower atmosphere satellite-based temperature measurements show little, if any, global warming since 1979, a period over which atmospheric CO2 has increased by 55 ppm (17 per cent).
93) US President Barack Obama pledged to cut emissions by 2050 to equal those of 1910 when there were 92 million Americans. In 2050, there will be 420 million Americans, so Obama’s promise means that emissions per head will be approximately what they were in 1875. It simply will not happen.
94) The European Union has already agreed to cut emissions by 20 percent to 2020, compared with 1990 levels, and is willing to increase the target to 30 percent. However, these are unachievable and the EU has already massively failed with its Emissions Trading Scheme (ETS), as EU emissions actually rose by 0.8 percent from 2005 to 2006 and are known to be well above the Kyoto goal.
95) Australia has stated it wants to slash greenhouse emissions by up to 25 percent below 2000 levels by 2020, but the pledges were so unpopular that the country’s Senate has voted against the carbon trading Bill, and the Opposition’s Party leader has now been ousted by a climate change sceptic.
96) Canada plans to reduce emissions by 20 percent compared with 2006 levels by 2020, representing approximately a 3 percent cut from 1990 levels but it simultaneously defends its Alberta tar sands emissions and its record as one of the world’s highest per-capita emissions setters.
97) India plans to reduce the ratio of emissions to production by 20-25 percent compared with 2005 levels by 2020, but all Government officials insist that since India has to grow for its development and poverty alleviation, it has to emit, because the economy is driven by carbon.
9 The Leipzig Declaration in 1996, was signed by 110 scientists who said: “We – along with many of our fellow citizens – are apprehensive about the climate treaty conference scheduled for Kyoto, Japan, in December 1997” and “based on all the evidence available to us, we cannot subscribe to the politically inspired world view that envisages climate catastrophes and calls for hasty actions.”
99) A US Oregon Petition Project stated “We urge the United States government to reject the global warming agreement that was written in Kyoto, Japan in December, 1997, and any other similar proposals. The proposed limits on greenhouse gases would harm the environment, hinder the advance of science and technology, and damage the health and welfare of mankind. There is no convincing scientific evidence that human release of CO2, methane, or other greenhouse gasses is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate.”
100) A report by the Nongovernmental International Panel on Climate Change concluded “We find no support for the IPCC’s claim that climate observations during the twentieth century are either unprecedented or provide evidence of an anthropogenic effect on climate.”
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