MIT: The economic cost of increased temperatures

(This is not from Lindzen I’d like to see one titled “the economic cost of colder temperatures”, particularly on Agricultural effects) Study: Warming episodes hurt poor countries and limit long-term growth.

CAMBRIDGE, Mass. — Even temporary rises in local temperatures significantly damage long-term economic growth in the world’s developing nations, according to a new study co-authored by an MIT economist.

Looking at weather data over the last half-century, the study finds that every 1-degree-Celsius increase in a poor country, over the course of a given year, reduces its economic growth by about 1.3 percentage points. However, this only applies to the world’s developing nations; wealthier countries do not appear to be affected by the variations in temperature.

“Higher temperatures lead to substantially lower economic growth in poor countries,” says Ben Olken, a professor of economics at MIT, who helped conduct the research. And while it’s relatively straightforward to see how droughts and hot weather might hurt agriculture, the study indicates that hot spells have much wider economic effects.

“What we’re suggesting is that it’s much broader than [agriculture],” Olken adds. “It affects investment, political stability and industrial output.”

Varied effects on economies

The paper, “Temperature Shocks and Economic Growth: Evidence from the Last Half Century,” was published this summer in the American Economic Journal: Macroeconomics. Along with Olken, the authors are Melissa Dell PhD ’12, of Harvard University, who was a PhD candidate in MIT’s Department of Economics when the paper was produced, and Ben Jones PhD ’03, an economist at Northwestern University.

The study first gained public attention as a working paper in 2008. It collects temperature and economic-output data for each country in the world, in every year from 1950 through 2003, and analyzes the relationship between them. “We couldn’t believe no one had done it before, but we weren’t really sure we’d find anything at all,” Olken says.

By looking at economic data by type of activity, not just aggregate output, the researchers concluded there are a variety of “channels” through which weather shocks hurt economic production — by slowing down workers, commerce, and perhaps even capital investment.

“If you think about people working in factories on a 105-degree day with no air conditioning, you can see how it makes a difference,” Olken says.

One consequence of this, borne out in the data, is that the higher temperatures in a given year affect not only a country’s economic activity at the time, but its growth prospects far into the future; by the numbers, growth lagged following hot years.

To see why, Olken suggests, first think of a dry year for vegetables in your backyard garden: The bad weather would hurt the plants, but if the weather is reasonable the following year, the backyard crop would return to its normal level. Now contrast that with problems that affect, say, industrial and technological development, and capital investment; temperature shocks limiting those activities can compound over time.

“If you think about economic growth, you build on where you were last year,” Olken explains. For longer-term industrial or technological projects, he adds, “If it’s that kind of activity that’s lost, then it affects the country’s long-run growth rate, [and it’s] not a one-off hit.”

Political change in the weather

Olken, Dell and Jones also integrated data about forms of government into the study, and found that temperature shocks are associated with an increase in political instability. A 1-degree-Celsius rise in a given year, they found, raises the probability of “irregular leader transitions,” such as coups, by 3.1 percentage points in poor countries. In turn, the authors write, “poor economic performance and political instability are likely mutually reinforcing.”

Olivier Deschenes, an economist at the University of California at Santa Barbara, calls the study “an important finding because most of the prior research on the economic impacts of climate change have focused on a few sectors of the economy, predominantly the agricultural sector.” By contrast, he notes, the broader finding of the current paper matters “because the growth rate is a key measure of the economic success of a nation and the standard of living of its population.”

Deschenes, who also conducts research on the economic and health effects of temperature changes, suggests that the “next step” for scholars “is to identify adaptation strategies that can moderate the negative impacts of global climate change in the coming decades.”

As Olken observes, the study does not try to account for all the possible problems that could be generated by long-term climate change, such as rising oceans, floods or increased storms. Still, he adds, the paper does suggest some general points about the economic impact of a warming atmosphere. It is vital, he says, to “think about the heterogeneity of the impact between the poor and rich countries” when leaders and policymakers map out the problems the world may confront in the future.

“The impacts of these things are going to be worse for the countries that have the least ability to adapt to it,” he adds. “[We] want to think that through for the implications for future inequality. It’s a double whammy.”

Written by: Peter Dizikes, MIT News Office

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126 Responses to MIT: The economic cost of increased temperatures

  1. Eve Stevens says:

    “If you think about people working in factories on a 105-degree day with no air conditioning, you can see how it makes a difference,” Olken says.”

    All the more reason to have cheap reliable electricity. Having expensive unreliable electricity does not make the temperature decrease.

  2. Resourceguy says:

    Beware of adaptation strategies such as UN-orchastrated wealth transfer schemes and carbon market reallocations of wealth and industry. see Maldives

  3. David Schofield says:

    “A 1-degree-Celsius rise in a given year, they found, raises the probability of “irregular leader transitions,” such as coups, by 3.1 percentage points in poor countries.”

    I am calling BS on this one for a start. Impossible to draw a causation from this.

  4. Gore Vidal was right: “The United States of Amnesia.”

    “He who joyfully marches to music in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would surely suffice.”
    Albert Einstein

  5. David Schofield says:

    “If you think about people working in factories on a 105-degree day with no air conditioning, you can see how it makes a difference,” Olken says.

    As opposed to the dramatically increased output when it is only 104?

  6. Owen in Ga says:

    Hogwash. There are millions of things that go into the workings of an economy and temperature changes in the tenths of degrees doesn’t even figure into it. They may have found a correlation, but I’ll bet the statistical model presupposed the conclusion then found it. Causation is probably not even indicated, but I won’t waste my time reading the whole paper, the press release pretty much discredited it as poppycock.

    I’d worry we are going to have a period of cold and fall back into an ice age more than leaving an ice age. Biodiversity has always been greater in climate optimums and the golden ages of the past civilizations all occurred during the warmest periods of the Holocene. They need to look at history, archaeology and geology if they want to see the “economic effects of climate change”!

  7. JinOH says:

    What utter rubbish. That’s it – I want a gubment grant to study the effects of fly farts on the atmosphere. My results would have about the same impact as this kind of nonsense.

  8. epolvi says:

    It is quite obvious from this study that, since we can’t change the weather, that the poor countries would benefit mostly from having access to low cost energy to prosper to the conditions we have had benefit from.

  9. Tom B. says:

    So the solution seems obvious, get those third world countries up to first world energy standards. Cheap electricity, inexpensive power, would eliminate the impact they are predicting…

    “this only applies to the world’s developing nations; wealthier countries do not appear to be affected by the variations in temperature.”

    So instead of making power more expensive and difficult to manage, let’s get them up a standard of reliable, inexpensive power. Problem solved!

  10. JamesS says:

    Considering human behavior, I find it highly unlikely that there’s anything like a linear relationship between temperature and economic output. Are the authors really trying to tell us that workers in an un-air-conditioned factory will produce 1.3% less, in general, on a 105 F day than on a 104 F day? Or on an 80 F day than on a 79 F day? Or would the output curve really be relatively flat from say, room temperature to 90 F, then a very steep drop in productivity up to maybe 100 F, then mostly flat again up to where people burst into flames at their workstations?

    How about a similar study in cold? Fifteen degrees above room temperature is 87 F; fifteen degrees below is 57 F. Which would you rather work in?

  11. Dickens Goes Metro says:

    Studies like this fly in the face of common sense. Canada’s growing season has lengthened with warmer temperatures, enabling them to grow more cash crops over larger areas.This results in a boost to GDP. Not to mention reduced heating costs in the winter (assuming that winter months are also warming).

    Climate change of any kind will create winners and losers. The idea that the earth’s climate system has some sort of ideal state is a bunch of BS.

  12. Geoff Alder says:

    I watched an interview with a UK beekeeper on Sky two days back. He was bewailing the miserable summer in that country. His point was that, unless things hot up a bit in the UK, they will have to feed their bees sugar water so as to preserve their hives through the coming winter.

  13. beesaman says:

    So are they claiming the Libyans kicked out Gaddafi because of climate change now?
    Hilarious…

  14. Chris Long says:

    I’ve often wondered whether northern Eurpoean countries have factored rising temperatures into their future CO2 emissions projections. One of the largest uses of energy in this part of the world is heating buildings during the winter, so rising winter temperatures would automatically reduce the countries’ CO2 emissions significantly. If the targets were set with the expectation of such reductions, the recent lack of warming would be quite a blow to the chances of meeting the targets.

    Does anyone know more?

  15. Steve Keohane says:

    Even temporary rises in local temperatures significantly damage long-term economic growth in the world’s developing nations, according to a new study co-authored by an MIT economist.
    Replace ‘rises’ with ‘lowerings’ and it means the same damn thing. How about an early frost, and losing a year of crops, that will have a long-term impact. More anti-climatic, mindless gibberish.

  16. I cannot understand why we pay for such junk research. No one likes to work when it is too hot..gee whiz productivity declines.. no one likes to work when it is too cold… gee whiz productivity declines…and some of those folks just don’t like to work!
    And of course: “The impacts of these things are going to be worse for the countries that have the least ability to adapt to it,” he adds. “[We] want to think that through for the implications for future inequality. It’s a double whammy.”

    Double whammy???

    NASA already did a study on temperature and how it affects productivity in the cockpit. Applicable to any work place…its a no brainer. Sorry I can’t provide the paper. Call your library research desk.

  17. Chuck L says:

    Sorry my BS meter is exploding!! How about a study on the econmic costs of cooler temperatures. I’ll bet it’s wayyyyyyyy higher.

  18. Alan Millar says:

    Usual GW tripe.

    Economic activity, presumably largely driven by agricultural output, reduces for every 1C increase in temperature.

    Let’s see. Let’s choose a different start time. Let’s choose the end of the last glacial period.

    Is he really going to argue that the potential agricutural output of the world has reduced for each 1C increase in temperatures since then? How about from the middle of the Little Ice Age?

    Absolutely ludicrous. Pick a pont, pick your own parameters and keep looking until you see something that appears to confirm your prexisting conclusion.

    That is GW science for you.

    Alan

  19. pat says:

    Given the political nature of these countries, any correlation is possible. It is all statistically meaningless.

  20. wsbriggs says:

    Ah yes, the dismal science, well at least as the Keysians, and econometricians are concerned. Ceteris paribus… but they don’t, not even remotely. Von Mises treatis was called “Human Action” for a reason.

    As the Left continues to try to extinguish the light of knowledge..

  21. D Caldwell says:

    Couple of questions occur to me:
    How accurate is the temp data they are using?
    How were they able to distinguish between the economic effect of temp changes and other factors like political unrest, world economy, cost of energy, etc.

    Not sure I agree that small increases in temp have any economic effect at all. I doubt that factory worker output is any different at 39C than it was at 38C.

  22. DonS says:

    Find ripostes to any economic argument here: http://netec.wustl.edu/JokEc.html

  23. Mike says:

    If proof was needed that that there are simply far too many professors in academia, this would be another fine example.

    If this drivel was paid for by weight, instead of word count, it’s true value could be determined.

  24. Miss Grundy says:

    The American South emerged from its relative economic backwardness only after electrification (in part through Tennessee Valley Authority projects begun during FDR’s presidency) and, later, the widespread adoption of air conditioning. Cheap electricity is equally important to developing nations.

  25. Luther Wu says:

    Since Stalin and Hitler were from cold countries…

  26. tadchem says:

    “Mad dogs and Englishmen go out in the noonday sun.”
    It is well known (but barely documented in the peer-reviewed literature) that warm tropical weather suppresses physical activity. This in turn reduces general economic productivity.
    Perhaps this answer is too simple and obvious to justify further funding: “More research is required to find out …”

  27. kirkmyers says:

    More wasted taxpayer money.

    Most of the world’s great civilizations flourished during periods of warmth and many perished when the climate turned cold. Facts are stubborn things: And the fact is that far more people die from cold temperatures than from warm weather.

    In terms of economic production, it is very difficult for people or communites to produce anything when they can’t feed themselves because cold weather has shortened the growing season and killed their crops and livestock.

    Yes, there are “economic and health effects” caused by temperature changes. And those ill effects are more pronounced during periods of extended cold.

    A warm climate is not mankind’s enemy.

  28. Same observation as others: The proper solution is to help these countries improve their living conditions so the temperature is not such a problem, not to reduce the rest of the world to the poor country’s level.

  29. JJ says:

    Poor countries, esp those from which they derive their bad effects stats, are equatorial. According to ‘global warming’ theory, equatorial countries will warm much less than mid latitude and polar countries. And according to the data, the ‘global warming’ isnt.

    So the countires that would be harmed by warming wouldn’t be warming even if the globe were warming, which it isnt.

    The countries that would be helped by warming would be warming if the globe were warming, but it isn’t.

  30. John Greenfraud says:

    “Higher temperatures lead to substantially lower economic growth in poor countries,”
    This is ’cause and effect’ thinking without proper regard for the complexity of the problem. The results of a temperature increase could have no effect, a negative effect or a beneficial effect.

  31. son of mulder says:

    See http://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_growth_rate_%28latest_year%29

    Most poor countries have such a high economic growth % they won’t notice a 1.3 % loss or gain dependent on whether the temperature goes up or down a degree. Poor old Bhutan as an example will fall from 8.1% to 6.8% if the temperature goes up 1 deg C and to 9.4% if it goes down 1 deg C.

    What a crock!!!

  32. eyesonu says:

    Dear Mr. Economist:

    I would have expected better coming from MIT. But then an economist is not exactly the brightest of the lot. Since there are no certainties required, just spew out BS as deemed appropriate at any given time with any form of supporting theory.

    Anyway, for the ‘bright economist”, consider a temp of 29F as opposed to unprecedented warming to 33F. No ice on the work site to contend with. Process water doesn’t freeze. Workers don’t spend time gathering fuel for heat so are more productive at work. Etc. Etc. Can you figure out that you may be an idiot or does someone need to explain it to you?

  33. SasjaL says:

    Higher temperatures lead to substantially lower economic growth in poor countries, …” says Ben Olken

    – Lower temperatures even worse … Love to see him paying my electrical bills during winter time …

    … from 1950 through 2003, and analyzes the relationship between them. “We couldn’t believe no one had done it before, but we weren’t really sure we’d find anything at all, …” Olken says.

    – Real scientists are not content with just looking in one direction …

    If you think about people working in factories on a 105-degree day with no air conditioning, you can see how it makes a difference, …” Olken says.

    – How about 32-35°F or lower w/o any heating? I would prefer 105°F at any time …

    As Olken observes, …

    – He isn’t very observant …

    This is as biased as the Swedish “gender science”, which don’t qualify as science, as it only takes into account the female perspective, not the male ditto … (leftist wannabe science)

  34. Jim says:

    Complete and utter BS. According to BEST, the earth has warmed 2.5C since 1750 and this has corresponded with a period of exceptional growth and human prosperity!

  35. Matthew W says:

    Didn’t “cold” lead to the French Revolution ?

  36. Joachim Seifert says:

    We have the reverse effect in Germany in winter: Construction industry
    down and transportation problems with ice and snow in the cold…..
    This is part of the game…….
    Adapting to heat is easier: Ice cubes, shower breaks…..
    And last not least: The heat of the day only is from 1 to 6 pm with 40 C/105 F
    Getting up early at 5 for work , then siesta after 2 pm….as in Spain
    …We talk about organizing social life…appropriate coping with
    conditions…..See working in a 105 F heat down in North Mexico:
    Maquilladores factories right to the US border, heat of 105 F is standard
    for several month……At the border town at Laredo, you burn yourself at
    metal door handles…. the tarmac bubbles at Mall parking lots….with closed
    eyes, you can feel the heat radiating iron lamp posts on the sidewalk to a 2
    meter distance……
    …but life goes on normal without whining, as done by the Boston know-it-all
    freeze-bags….
    If heat were an economic setback, then there would not exist a thriving supply
    industry to the US in Northern Mexico….have a look yourself….
    JS

  37. John Doe says:

    http://www.kellogg.northwestern.edu/faculty/jones-ben/htm/climatechange.pdf

    See graphs last page where you can read abreviated names of countries “rich” and “poor”.

    Cherry picked. Big time. Fail.

    No poor countries with temperate climates that can stand to improve by being a little warmer. China comes to mind. Probably more people in China than the total population in the cherry picked list of poor countries.

    Rich countries are cherry picked too. Mexico is a rich country? Really? On average from 1950-2005? Study period ends safely this side of the biggest financial downturn in 80 years. I wonder how the study ends if the so-called rich countries are studied after the financial crisis got wound up in 2007 and continued through today?

    Fail fail fail

  38. Jim says:

    Chris Long wrote:

    I’ve often wondered whether northern Eurpoean countries have factored rising temperatures into their future CO2 emissions projections. One of the largest uses of energy in this part of the world is heating buildings during the winter, so rising winter temperatures would automatically reduce the countries’ CO2 emissions significantly. If the targets were set with the expectation of such reductions, the recent lack of warming would be quite a blow to the chances of meeting the targets.

    Does anyone know more?

    No, they haven’t factored those in because there is no evidence of wintertime warming. The winter of 2011-12 was exceptionally cold in Europe, as were the winters of 2009-10 & 2010-11 in North America.

  39. Pamela Gray says:

    This researcher was aghast that “no one had done it before”? Are you joking????? No one has studied the cost affects of excessive heat and drought? It is a wonder farmers have farms past the initial 5 years in business. Just a wonder I tell ya. Must be just stupid beginners luck if the farm lasts past the first dry summer. And century farms must only be a figment of our imagination.

    WTD research (aka Wasted Tax Dollars). Studying what we already know.

  40. jayhd says:

    We only have to look at one country to show this is nothing but BS. Zimbabwe (Rhodesia) before Mugabe was a food exporter. Zimbabwe with Mugabe is starving. It has nothing to do with weather or climate. It was all due to Mugabe and his policies. And the third world is full of other examples where a regime change, and the regime change only, resulted in severe economic downturns.

    Jay Davis

  41. RiHo08 says:

    I was told so many years ago, that the USA South would rise as an economic powerhouse with the introduction of electricity and its correlate, air conditioning. Air conditioning of buildings for the central cities like Atlanta allowed banking, office work, and industrialization amongst a cheap labor force. Rural electrification, whereby electric horse power was substituted for hand, back and manure producing horse power, reduced the number of rural workers, and their kin migrated to the cities, finding: jobs, education, public health (water and sewer), health care including dentistry & maternity care, and a generally upward mobility.

    Adaptation in the developing world, it seems to me, requires cheap and abundant electricity. Hmmm, where can we find such a miracle?

  42. Michael J says:

    “If you think about people working in factories on a 105-degree day with no air conditioning, you can see how it makes a difference,” Olken says.

    I’m rather sceptical™ that we see much difference in productivity between 104℉ and 105℉

    I’m further concerned about how many existing factories currently operate at 104℉.

    Even if I cast aside my doubts, 1℉ at a rate of 0.1℉ per decade will take 100 years.

    Exactly how badly should we trash the world economy to prevent a 1.3% loss in productivity over a 100 year period?

  43. Mike M says:

    “..the study finds that every 1-degree-Celsius increase in a poor country, over the course of a given year.” First of all, one year is weather not climate so if they are addressing climate change I think 10 years should be a minimum time period to study.

    What region of the world are we talking about for developing countries? Most are in the low latitudes and experience the least change in average temperature either way, (the most is at the poles right?). Show me the low latitude country that has ever seen warming (or cooling) at 10 degrees per decade – …and I’ll EAT IT!

    Where would one find a temperature history of say Guatemala?

  44. Bruce Cobb says:

    What about the economic cost of climate alarmism?

  45. Hector Pascal says:

    I’ll need to control myself here. Have they controlled for kleptocacy? Some parts of Asia have moved forward (despite rising temperatures) since the 1950s. Parts of South America also seem to be doing well recently. My reading is The Rule of Law is a better measure of economic success than temperature.

    I may be wrong, but my feeling is that the poor nations which invest in society do better than those whose leaders loot the economy for personal gain.

  46. Leonard Weinstein says:

    MOST (about 2/3 or more) of the “supposed” average temperature increase in the last 50 years has been attributed to less cool nights and winters, not increased daytime highs. The latest information also tends to support that the increase is even less than previously thought over the last century (from bad long term record adjustments). Thus average daytime highs are, at most a SMALL fraction of 1 C (probably < 0.2 C) hotter recently than average over the last century. This is not exactly a large effect. Further, drought has been shown to be not unusual compared to even droughts in 1980 and 1988, and far less than the 1930's. However, the increased CO2 content has clearly caused better crop outcomes than otherwise, including better drought resistance. Saying that there is a cost of the warming is nonsense.

  47. Peter Ward says:

    On top of the comments already left, something else that comes to mind.

    I wonder whether the study used daytime max temps or the average day/night (high/low) temps? Because the various average temperature records seem to indicate a much faster increase of min temps than max, yet if they’re discussing 105F in a factory it’s obvious that they’re thinking of daytime temps.

    Really you do have to wonder whether any of the peer reviewers stopped to think about this paper at all. But of course the conclusion is just what IPCC needs for its forthcoming AR5 so all thinking must be suspended until further notice. It’s hardly surprising we’ve seen such a spate of flawed pseudoscience being published over the last few weeks — perfect grist for the IPCC mill.

  48. highflight56433 says:

    Matthew W says:
    August 7, 2012 at 9:56 am

    “Didn’t “cold” lead to the French Revolution ?”

    Yep! Eaten’ their own young to stay alive…Donner Pass Syndrome?

  49. Algebra says:

    Major FAIL. Control for latitude and altitude and see what happens.

  50. Leonard

    You will remember that a couple years ago I wrote an article on the history of co2 carried at the air vent. In it I quoted you extensively.

    Having examined Tens of thousands of contemporary observations and hundreds of climate papers I am coming to the conclusion that as temperatures have been higher in the past and lower in the past, all at a supposed 280ppm, we have perhaps reached the limited of the logarithmic curve and sensitivity and adding more co2 will make little difference to temperatures. What do you think?

    Tonyb

  51. Gail Combs says:

    David Schofield says:
    August 7, 2012 at 8:51 am

    “If you think about people working in factories on a 105-degree day with no air conditioning, you can see how it makes a difference,” Olken says.

    As opposed to the dramatically increased output when it is only 104?
    _________________________
    Actually having worked in the south in the chemical industry I found it was the COLD temperatures that were the real problem. The “Plant” was a roof with no walls so heat build up was not a real problem but you darn well better wear those woolies in winter and have a space heater to warm your hands. And yes it got up into the hundreds on occasion. Heck I am further north now and we just had a few days of 102F. You get used to. Just make sure you wear a hat and drink a lot. BTDT and have the shirt

    So What is behind this ‘Study’
    Humans can deal with higher temperatures just fine it is cold that really KILLS as shown in the UK. …no change to the estimates of excess winter deaths (25,700 is the provisional figure for 2010-11, and most recent winters show comparable numbers… from Academics wrangle over fuel poverty and winter deaths

    I guess a possibility of work slowing down from a slight increase in heat is considered much more of a problem than 25,700 extra deaths in the elderly…. But then the UK has no problem killing off its elderly population The Liverpool Care Pathway (LCP) Or the young and the disabled. More on the subjecthere

    It goes along with the philosophy of one of the founders of the Fabian Society. George Bernard Shaw.

    Older people are not workers or consumers of corporate goodies so are expendable to the corporations. They normally do not have large out standing loans so are expendable to banks. They consume tax money instead of providing tax money so are expendable to governments. They are normally too smart to be as easily conned so are expendable to the NGOs. In short they are considered ‘useless eaters’ by just about all blocks of power.

  52. Wolf R. says:

    From reading the PR and abstract I think there is a significant weather vs climate issue in how the results are being spun. The statistical results appear to be based on year-to-year changes in temperature (i.e. weather) and hence would pick up the effects of the occasional extreme heat wave or hot summer (which would show up in the statistics a small change in average annual temperature) on output, political unrest, etc. Such effects could occur with either rising or falling longer-term temperature trends (i.e. climate).

    These temporary changes (effects of “even temporary rises in local temperatures” in the words of the PR) do no necessarily translate into climate change effects. In particular, the adaptation of people, agricultural practices, industry, etc. to an environment that is permanently one degree warmer every day to the year may be quite different than the temporary response to an extreme heat event. E.g. somebody may want to take time off on those days when temperatures of 10 degrees above baseline in the warm season, but not respond at all to a fractional degree change in the baseline. Agricultural trends and industry practice presumably also have much greater adaptability to longer-term trends. As for political volatility, I am guessing that it’s the unusual weather (e.g. the occasional “long hot summer”) that’s the trigger rather than a small change in temperature throughout the year.

  53. mwhite says:

    The cost

    ‘The average household electricity bill would increase from £528 per year at 2010 prices to a range from £730 to £840 in 2020.’

    http://www.dailymail.co.uk/news/article-2184802/Energy-bills-soar-300-year-obsession-wind-power-report-claims.html

    Today prices £840 is $1314

  54. Gary Pearse says:

    I was in Lagos, Nigeria in the mid 60s and the temp was always around 30C (86F). Here are the monthly averages since 1866 and even the variation month to month is only a couple of degrees.

    http://www.worldclimate.com/cgi-bin/data.pl?ref=N06E003+1200+0027105G2

    Also in Sokoto in NW Nigeria, some 400 mi north of Lagos. Hotter and dryer

    http://www.worldclimateguide.co.uk/climateguides/nigeria/sokoto.php

    These temperatures haven’t changed materially in 50 years. They had several military coups, political assassinations and a civil war during my time there. It had nothing to do with the weather.
    I suspect if the good doctor had plotted the same data by latitude it would have obtained a better fit. One of the factors touched upon frequently in comments is that good cheap electricity. Would fix the problem. That and getting rid of the socialist NGO aid people who interfere in every effort at foreign development investment. These groups and the UN are really on safari and don’t want Africans to industrialize.

  55. Bill Norton says:

    Don’t the poorest countries have the least accurate and least complete temperature records? How can such profound conclusions be reached from such weak data?

  56. MikeN says:

    IPCC scenarios for high warming require high economic growth in the developing world. Thus WG2 is making a mistake in saying that high warming would cause devastating impacts in the developing world, because it has not accounted for the economic growth there.

  57. Backasswards. Warmer means longer growing seasons, more rainfall (not less!), more agricultural productivity, and as a consequence more wealth creation.

    What happens to that increased wealth is another thing. Evidently the faculty at MIT prefers Third Worlders to work in windowless factories producing cheap goods for their (the MIT faculty’s) enjoyment. It’s the “small brown children” slave labor lobby. MIT has a few engineers that study ways to improve the human condition, but the vast majority of the faculty are opposed to such and prefer to crack whips on their fellow man.

  58. Kelvin Vaughan says:

    That means when temperatures have risen 80°C they will be broke!

  59. geography lady says:

    Cheap energy will do more for productivity. Cheap energy provides the A/C for better adaptation to the heat. With more productivity, then the rise of the middle class. Witht the rise of the middle class, then better and more stable political governments.

    Many lesser developed countries don’t have much of a stable middle class. The despots don’t want a better educated, middle class. They would lose their “office”.

  60. David L. Hagen says:

    For a dose of reality on the far greater harm caused by cold weather see:
    Neumann, J., S. Lindgrén, 1979: Great Historical Events That Were Significantly Affected by the Weather: 4, The Great Famines in Finland and Estonia, 1695–97. Bull. Amer. Meteor. Soc., 60, 775–787. doi: http://dx.doi.org/10.1175/1520-0477(1979)0602.0.CO;2

    In the years 1694 to early 1697, cold winters and cool and wet springs and autumns led to extreme famine in northern Europe, particularly in Finland, Estonia, and Livonia. It is estimated that in Finland about 25–33% of the population perished (Jutikkala, 1955; Muroma, 1972), and in Estonia-Livonia about 20% (Liiv, 1938). As far as is known the population disasters associated with the famines of the 1690s in France, Italy, and Scotland; 1816–17 in western Europe; 1845–46 in Ireland; and 1867–68, again in Finland; were all notably smaller than those of Finland, Estonia, and Livonia in 1695–97. A reconstruction is attempted of the coarse features of weather conditions in northern Europe in the years preceding the famine.

    See also NIPCC links to Health effects of Temperature – (Hot vs Cold weather).
    e.g., Buntgen, U., Tegel, W., Nicolussi, K., McCormick, M., Frank, D., Trouet, V., Kaplan, J.O., Herzig, F., Heussner, K.-U., Wanner, H., Luterbacher, J. and Esper, J. 2011. 2500 years of European climate variability and human susceptibility. Science 331: 578-582.

    as temperatures declined and the Medial Warm Period gave way to the Little Ice Age, with its onset “likely contributing,” in their words, “to widespread famine across central Europe,” when they say that “unfavorable climate may have even played a role in debilitating the underlying health conditions that contributed to the devastating economic crisis that arose from the second plague pandemic, the Black Death, which reduced the central European population after 1347 C.E. by 40 to 60% (Buntgen et al., 2010; Kaplan et al., 2009; Kausrud et al., 2010).”

  61. Coach Springer says:

    A staff writer for a news agency of an academic institution? Plenty of room for mischief even before combining the opinion-based soft sciences of economics and climate. Way to go, person who gets paid to string together arguments in a way that makes things look important.and clear that aren’t!

    Using economists to control the global thermostat to the perceived benefit of an unreal but usefully emblematic person will produce important results – just not on the global thermostat. And importance is not synomomous with good.

  62. DesertYote says:

    Conflating heat with drought again. Dryer air results in higher local temps. The Sonoran desert was dry and hot during the LIA.

  63. Titan 28 says:

    This is one of the most absurd peer-reviewed pieces of nonsense I’ve ever come across. The idea that a single variable can be responsible for what the authors claim is pereposterous.

  64. Bill Parsons says:

    Mr Olken’s central argument is in the comfortably-long tradition of begging the question. The real issue is not whether mankind has anything at all to do with the world’s temperatures or weather extremes, which are naturally in continuous flux, but, what how can we adapt and provide for those ongoing changes?

    Olken asks,

    “If you think about people working in factories on a 105-degree day with no air conditioning, you can see how it makes a difference.”

    A moment’s reflection about the scurvy logic – that we somehow are causing the conditions that led to the worker’s discomfort – reveal why the nation’s top technical universities are still churning out papers and students inured in AGW-speak.

    Even in the midst of the recent, massive power outage in India, with some 650 million people affected, there were minimal reports of heat-related fatalities (some 35 died in a railroad fire, and perhaps other statistics are forthcoming). The reason for the outage, which has a plausible sollution, should interest Mr. Olken more than another analysis of heat / financial loss:

    What role do weak, corrupt central governments and environmentalist movements have in hampering the provision of cheap, efficient energy to the people who need it the most?

    Indur Goklany, whose excellent articles have been published here for years, has been all over the actuarial statistics regarding hot and cold, and his key finding, over and over, has been this: in a world of (expected and naturally-occuring) weather extremes, greater wealth and less mortality result from heat than from cold.

    “Is a Richer-but-warmer World Better than Poorer-but-cooler Worlds?” Energy & Environment, vol. 18, nos. 7 and 8, pp. 1023-1048 (2007).

    Wealth and Safety: The Amazing Decline in Deaths from Extreme Weather in an Era of Global Warming, 1900–2010, Reason Foundation, Policy Study No. 393, September 2011.

    http://goklany.org/publications.html

  65. Joachim Seifert says:

    “Peers” reviewed means reviewed by the “birds of the same feather”.
    Warmists review warmists, alarmists review alarmists and modelers review
    modelers and all clap each others back….

  66. Joachim Seifert says:

    Someone really gets his PhD with this nonsense?

  67. Joachim Seifert says:

    The study provides legitimation for NOT INVESTING in poor countries,
    because “future climate conditions will obstruct working and living conditions
    in Africa in warmer decades to come…” another anti-African/anti-development
    piece of the arrogant cold Northerners……

  68. gringojay says:

    “Hot & bothered” finally explained by academics is useful for making sense out of how Idi Amin got rousted from Uganda in 1979. Everyone thought it was due to timely brotherly help from Tanzanian forces further south.
    Thanks to academia we now know those Tanzanians just wanted a spell of respite from the heat that rising man made global warming was causing them to get all “hot & bothered” about. Don’t believe me – then look at the BEST study’s charts to see how April 11, 1979 matches up with a rise in CO2 as proof !

  69. Reg Nelson says:

    The Miami Heat won the NBA Championship this year. The signs are everywhere!!!!

  70. Mike Rossander says:

    Yet the Medieval Warming Period, a time in which essentially every place could be classified as a “developing nation” was a period of almost unprecedented growth and economic improvement.

    Sorry but I’m not buying this study. There may be a correlation but there is no hint of causation. I consider it significantly more likely that the political instability and other economic outcomes are related to factors other than climate that have all be changing in the half-century since WWII.

  71. Herders in Mongolia might be very interested in this theory given their livestock losses due unusually cold winter temperatures in recent years – worst since the 1940s. NOT

  72. Smokey says:

    The economic cost of climate alarmism was about $99 Billion in 2009 [lots more $$$ since]. And they have nothing worthwhile to show for it. Nothing.

    On top of that, there is the eco-despoiling of our countryside with 400 foot tall windmills, and converting half our corn crop to fuel at decreased efficiency, and skyrocketing utility bills. Thanks a lot, ‘environmentslists’.

    Bring on the warm weather! Bring on more CO2! Because it’s all good.

  73. Patrick says:

    I guess this explains why the Sunbelt has done so poorly economically compared to the Rustbelt over the last few decades.

  74. stuartlynne says:

    Temperature affects 3rd world economies more than 1st world.

    Shouldn’t the conclusion be to grow 3rd world economies into 1st world ones so that they are not affected?

    And hasn’t cheap energy been shown to be the fastest route from 3rd world to 1st world?

  75. Crito says:

    War, Pestilence, Tribalism, Ignorance, over population, Religion and Politics all trumped by a small increase in temperature. Perhpas we should be rewriting history. Had only Gibbon been aware that the Decline of Rome was actually due to Global Warming, we could have spent more time on much more worthwhile pursuits such as sociology or gender studies.

  76. jknapp says:

    Hasn’t most of the warming been in the winters in northern latitudes? Aren’t most of the poor countries in the tropics where there hasn’t been much warming if any? So the aurhors are saying that when a country in the north warms a bit in winter the productivity of a country near the equator goes down. Yep, that makers sense to me. /sarc

  77. GP Hanner says:

    Try growing any crop when the daytime highs do not hit 70 F.

  78. Doubting Thomas says:

    The last sentence of the abstract sums it up nicely.

    “These findings inform debates over climate’s role in economic development and suggest the possibility of substantial negative impacts of higher temperatures on poor countries.”

    The findings only suggest the possibility of something. They can’t really inform the debate because they only suggest a possibility.

    All the commentary about temperature doing this or temperature doing that, and the silly analogies, are just wild conjecture with no supporting evidence. Adding injury to insult, the paper is hidden behind a pay wall, and the raw data are probably even better hidden.

    dT

  79. Gail Combs says:

    geography lady says:
    August 7, 2012 at 11:49 am
    ….Many lesser developed countries don’t have much of a stable middle class. The despots don’t want a better educated, middle class. They would lose their “office”.
    _________________________
    That is the general idea for ALL countries now a days it seems. Just enough education to be useful in a factory but not enough to think. See Dumbing Down America by Dr. Samuel Blumenfeld. The other move by governments is to install so much regulation a middle class entrepreneurship is impossible and everyone is a lawbreaker so they keep a low profile.

    (Also see Red Tape Rising: A 2011 Mid-Year Report “Many people may think that regulatory costs are a business problem. Indeed, they are, but the costs of regulation are inevitably passed on to consumers in the form of higher prices and limited product choices.”

  80. Gail Combs says:

    George E. Smith had some very good articles on this subject that blows this study out of the water. It is cold that produces famine and the fall of civilizations and it is very well documented. Looks like “inconvienient” history is being rewritten again by the ‘politically connected Academic’™

    Of Time and Temperatures: http://chiefio.wordpress.com/2011/03/03/of-time-and-temperatures/

    Dry China: http://chiefio.wordpress.com/tag/bond-event/

    Intermediate Period Half Bond Events: http://chiefio.wordpress.com/2011/02/22/intermediate-period-half-bond-events/

    8.2 Kiloyear Event and You: http://chiefio.wordpress.com/2011/12/13/8-2-kiloyear-event-and-you/

  81. George E. Smith; says:

    “””””…..Looking at weather data over the last half-century, the study finds that every 1-degree-Celsius increase in a poor country, over the course of a given year, reduces its economic growth by about 1.3 percentage points……”””””

    So tell us; over the last half-century just how many of those 1-degree Celsius increases have been plotted in the course of a given year, in any country; poor or rich. I thought we hadn’t yet seen a single 1-degree increase in the whole time that records have been kept, anywhere on earth, so I’m sure that the statistics of this study’s data must be a total crap shoot.

    So in any one year, just how did they compare the economic growth for the same yea,r same country, both with and without the 1-degree increase during the year.

    Can you do instant re-runs of a year to see what wuold happen if you did it all over again ?

  82. Joachim Seifert says:

    Thanks a lot, Gail, your refs were invaluable….the
    best for years….on economy and spirit of society…Many
    questions now solved….JS, this helped.

  83. Gail Combs says:

    Joachim Seifert says:
    August 7, 2012 at 12:19 pm

    Someone really gets his PhD with this nonsense?
    _____________________
    A certain person got his PhD with a broken Hockey Stick. (If I recall correctly)

    This seems to be the new state of affairs in Post Normal Science.

    NETHERLANDS: Dean may face data fraud charges
    …Stapel, former professor of cognitive social psychology and dean of Tilburg’s school of social and behavioural sciences, fabricated data published in at least 30 scientific publications, inflicting “serious harm” on the reputation and career opportunities of young scientists entrusted to him.

    Some 35 co-authors are implicated in the publications, dating from 2000 to 2006 when he worked at the University of Groningen. In 14 out of 21 PhD theses where Stapel was a supervisor, the theses were written using data that was allegedly fabricated by him….

  84. Bill Parsons says:

    Romney was at the center of this issue recently when he commented that Israelis had succeeded in the Middle East due to their culture. Because the comment implicitly suggested a contrast with Arab cultures, he was branded a racist. I don’t know how well he acquitted himself in rebutting these criticisms, but I tend to agree with his premise, that certain cultures promote attitudes which will prevail in difficult circumstances.

    Richard Landes: Romney Is Right on Culture and the Wealth of Nations
    online.wsj.com/article

    /SB10000872396390443866404577566770697427382.html?mod=googlenews_wsj#articleTabs%3Darticle

    As in other fields of social “science,” economists argue about whether development derives from cultural advantages or from natural ones such as resistance to disease and access to primary resources. Prof. Diamond, whose book focuses on societies’ natural advantages, last week wrote an op-ed in the New York Times emphasizing both culture and nature and trying to draw Prof. Landes in with him.

  85. davidmhoffer says:

    So…. based on this study, the warmist years on record, based on the frequency and magnitude of regime change and poltiical strife ought to have been

    3. 1989 to 1991, fall of the Soviet Union
    2. 1914 to 1918, WW1
    1. 1939 to 1845, WW2

    Oh wait… 1. and 2. were periods of major economic growth….ooops, counter indicator, so it must have been colder rather than warmer? And 3., post fall of the Soviet Union saw the greatest increase in economic activity in eastern Europe and Russia in modern history, suggesting that it must have been cooler then…. ooops it wasn’t, that’s about when temps peaked….

    This is perception management. Anyone who takes a few moments to think it through will see right through this paper. It is aimed at those who read the headline, absorb it, and move on.

  86. Dr Burns says:

    That must place the Inuit as world leaders in economic growth.

  87. Mario Lento says:

    I found an even better correlation… First I wanted to prove that drinking water causes cancer. Then I did a regression analysis and found out that 100% of people who have cancer drank water at some time in their lives. Therefore, the correlation is certain that drinking water must have caused the cancer.

    I did another study that found out, we could reduce the number of deaths of bridge jumpers by getting rid of those pesky things that cross rivers. Imagine the lives we’d save.

    and why not save more lives by getting rid of windows in buildings higher than 1 story…. and while we are at it, let’s get rid of automobiles. They are so dangerous.

  88. Day By Day says:

    Owen in Ga says: Biodiversity has always been greater in climate optimums and the golden ages of the past civilizations all occurred during the warmest periods of the Holocene. They need to look at history, archaeology and geology if they want to see the “economic effects of climate change”!

    kirkmyers says: Most of the world’s great civilizations flourished during periods of warmth and many perished when the climate turned cold. Facts are stubborn things: And the fact is that far more people die from cold temperatures than from warm weather.

    eyesonu says: Anyway, for the ‘bright economist”, consider a temp of 29F as opposed to unprecedented warming to 33F. No ice on the work site to contend with. Process water doesn’t freeze. Workers don’t spend time gathering fuel for heat so are more productive at work. Etc. Etc. Can you figure out that you may be an idiot or does someone need to explain it to you?

    Jim says: Complete and utter BS. According to BEST, the earth has warmed 2.5C since 1750 and this has corresponded with a period of exceptional growth and human prosperity!

    Hey the four of you above have the right info–now get the references and write a position paper and submit it the same journal (or here). It totally destroys their work!

    Bill Parsons: thanks for the Indur Goklany articles–No one has thought to do this before?????

    son of mulder: I followed the links, thanks! really facinating.
    Sad day when Haiti’s GDP growth outranks ours! I did notice tha many countries that have gone the “socialist” route int ehir economies have little to no GDP growth right now. I wonder why?
    Haiti 6.1%
    Kosovo 5.3 %
    Turkmenistan 9.9%
    Mongolia 11.5 %
    United States 1.5 %

    JamesS, this was teh funniest comment yet–I laughed outloud–thanks!
    Or would the output curve really be relatively flat from say, room temperature to 90 F, then a very steep drop in productivity up to maybe 100 F, then mostly flat again up to where people burst into flames at their workstations?

  89. James Hein says:

    @highflight56433

    In Australia, Union members love it when it gets hot (usually above 34.5 C ish) because they get to return to the depot and sit in the air conditioning or if it gets even hotter to go home. One of the largest Unions here has also invested the union super funds heavily into AGW schemes and technologies so another reason to keep it hot and keep the AGW movement alive. This is also one of the reasons that Australia will be the last holdout in this fantasy.

  90. TimTheToolMan says:

    From the paper

    “This paper takes an alternative approach. We first construct temperature and precipitation data for each country and year in the world from 1950 to 2003 and combine this dataset with data on aggregate output. We then examine the historical relationship between changes in a country’s temperature and precipitation and changes in its economic performance. Our main identification strategy uses year-to-year fluctuations in temperature and precipitation to identify their effects.”

    Its a curve fit

    “By examining aggregate outcomes directly, we avoid relying on a priori assumptions about what mechanisms to include and how they might operate, interact, and aggregate.

    Avoid them? They make it sound like this is a plus.

    “By utilizing fluctuations in temperature, we isolate its effects from time-invariant country characteristics. Our approach also allows more nuanced insights.”

    Science is hard and establishing causal relationships is very hard. This paper doesn’t appear to even try.

  91. George E. Smith; says:

    “””””…..Gail Combs says:

    August 7, 2012 at 2:31 pm

    George E. Smith had some very good articles on this subject that blows this study out of the water. It is cold that produces famine and the fall of civilizations and it is very well documented. Looks like “inconvienient” history is being rewritten again by the ‘politically connected Academic’™…..”””””

    Well Gail, I know it is often said that we Smiths have to stand together; but much as I would like to be included in your accolades, I am afraid that E.M. Smith done done this all on his own.

    But thanks for the plug anyhow, I don’t mind catching a little wind spray off Cheifio’s backwash.

    George

  92. Gail Combs says:

    Bill Parsons says:
    August 7, 2012 at 4:18 pm

    Romney was at the center of this issue recently when he commented that Israelis had succeeded in the Middle East due to their culture….
    ______________________
    I agree with him because that society has always had a high regard for learning and it has paid off in dividends in the science, technology and industry they have brought to their land.

    So why in heck is it considered “racist” to acknowledge another people’s ingenuity and energy? The facts speak for themselves and acknowledging them should not have called for abuse by the MSM unless of course it is only the parasites, the gimmes, the conmen, the criminals, the terrorists and destroyers the MSM holds in high esteem.

    Perhaps the worst part of this twisted “morality” on the part of the MSM is if you do not publicly praise what is best in society how will our young know what to strive for and emulate?

  93. RoHa says:

    This sounds like a version of the theory I heard from fellow-student Peggy Tong (an absolutely gorgeous Malaysian girl whom I totally failed to get off with) when I was an undergraduate in the 60’s. She thought that cooler climates not only encouraged greater physical activity, but also mental activity, and that this contributed to the success of countries in the more moderate climes.

    Nice to see that MIT is catching up with Peggy.

  94. MattN says:

    “A 1-degree-Celsius rise in a given year, they found, raises the probability of “irregular leader transitions,” such as coups, by 3.1 percentage points in poor countries.”

    I am calling BS on this one for a start. Impossible to draw a causation from this.”

    I completely agree. Words fail me on how someone can seriously make that leap of logic…just, wow. Political instability has far more to do with the leaders being really bad at their job.

    Holy cow, I’m speakless….

  95. acementhead says:

    eyesonu @ August 7, 2012 at 9:53 am

    That you Alfred?

    Plus one internets to the first to solve my simple puzzle.

    Prediction: eyesonu will not solve it.

  96. Chuck Nolan says:

    Reality check says:
    August 7, 2012 at 9:39 am
    Same observation as others: The proper solution is to help these countries improve their living conditions so the temperature is not such a problem, not to reduce the rest of the world to the poor country’s level.
    —————-
    The problem is the lack of economic growth and cause of their poverty.
    In much of the developing regions there are no property rights and corresponding rule of law.
    If your enemy has a good crop growing, just go burn it up. There is no force able to protect the people and many in power use their position for personal gain.

  97. acementhead says:

    Chuck Nolan @ August 7, 2012 at 7:14 pm

    says

    “In much of the developing regions … many in power use their position for personal gain.”

    In contradistinction with the developed regions such as the USA and UK where nobody in power would dream of using his position for personal gain.

    Congratulations Chuck, top post for unintentional humour that I’ve seen for ages.

  98. Christian Bultmann says:

    With the equator principles in place at most of the big investment banks there is little hope for poor nations to ever see economic growth.

  99. TomT says:

    Based on what I have seen in the movies, MIT knows a lot about cheating at the game 21, but not a lot about honesty.

  100. davidmhoffer says:

    acementhead;
    In contradistinction with the developed regions such as the USA and UK where nobody in power would dream of using his position for personal gain.
    Congratulations Chuck, top post for unintentional humour that I’ve seen for ages.
    >>>>>>>>>>>>>>>>>>>>>

    If you cannot distinguish between a country governed by rule of low, within which there are corrupt individuals who are the exception to the rule, and a country which is ruled by corruption from top to bottom, then your handle is well chosen.

  101. davidmhoffer says:

    low….law…yikes…

  102. Matt says:

    @ davidmhoffer,

    From the perspective of a person who self describes as a conservative leaning libertarian, “The rule of low” seems an apt description of what U.S.A has come to. Very sad, but also very apt.

  103. David Cage says:

    Higher temperatures are the one problem that renewable energy can readily solve. Solar powered cooling unlike solar heating gives higher output at high demand times. Not only that but reviving absorption refrigeration, which was only killed off by clever commercial manipulation and groundless cleverly safety fears, would make solar cooled air conditioning relatively cheap.
    The cost of the disastrous cooling we have here in the UK is far higher than the cost of any remotely plausible amount of temperature rise.

  104. DEEBEE says:

    So beginning with economists in developed countries there will be an additional tax on their income which will go to economists in the developing countries to augument their incomes by 1.3%. Then the discussion should move onto how to recompense the developing country’s economists for all the warming that has occurred.

  105. michael hart says:

    So if we impoverish ourselves first by reducing CO2 emissions, then that would make any warming, for any reason, “worse than we thought”? :)

  106. Gail Combs says:

    Christian Bultmann says:
    August 7, 2012 at 7:55 pm

    With the equator principles in place at most of the big investment banks there is little hope for poor nations to ever see economic growth.
    ____________________________________

    Or anyone else who is not first at the trough slurping up the newly printed fiat money.

    The US dollar is the world reserve currency, when Bernancke (US FED) doubled the money supply in 2008 he swiped wealth from everyone.

    If you wish to understand the economics of today’s world, it is crucial to understand how “Legalized Theft” is accomplished by the world’s Central banks and their partners in crime, the politicians. They use Fractional Reserve Currency and inflation of the money supply. [cue stage left for _jim to defend the bankers]

    Fractional reserve banking under a gold standard, as Mises defined it, is a system of lending wherein a bank issues receipts for money metals supposedly held in reserve, which it does not have in reserve. It therefore issues promises to pay, which are legal liabilities for the bank, yet the bank cannot redeem all of these liabilities on demand…

    Everything in bank legislation is tied to one of two goals: preventing bank runs or bailing out bankrupt banks before the panic spreads [bank run GC] to other banks. That is, everything in banking legislation is geared to the systematic violation of contracts, either before the bank run or after it begins.
    http://www.lewrockwell.com/north/north86.html

    In another words Banking legislation is designed to protect banks from suffering the consequences of their gambling with other people’s wealth. The US Bailout of AIG is an excellent example. (second link with different info. ) The bankers were protected and US homeowners and tax payers LOST BIG TIME.

    Mises stressed the following fact in his theory of money: new money enters an economy at specific points, i.e., through specific voluntary exchanges. New money does not appear magically in equal percentages in all people’s bank accounts or under their mattresses. Money spreads unevenly, and this process has varying effects on individuals, depending on whether they receive early or late access to the new money. This was one of Mises’s original contributions to monetary theory, one that is ignored by all other schools of economic analysis.

    ….It is these losses of the groups that are the last to be reached by the variation in the value of money which ultimately constitute the source of the profits made by the mine owners [with gold or bankers with fiat GC] and the groups most closely connected with them (pp. 208-9). – MISES

    http://www.lewrockwell.com/north/north84.html

    It is interesting that David Rockefeller’s tutor at LSE was none other than F. A. Hayek, Mises student, who won the Nobel Prize for economics the year after Mises’s death.

    … The economists at LSE were much more conservative than the rest of the faculty. In fact, its economists comprised the major center of opposition in England to Keynes and his Cambridge School of interventionist economics.

    My tutor that year was Friedrich von Hayek, the noted Austrian economist who in 1974 would receive the Nobel Prize for the work he had done in the 1920s and 1930s on money, the business cycle, and capital theory. Like Schumpeter, Hayek placed his trust in the market, believing that over time, even with its many imperfections, it provided the most reliable means to distribute resources efficiently and to ensure sound economic growth. Hayek also believed that government should play a critical role as the rule maker and umpire and guarantor of a just and equitable social order, rather than the owner of economic resources or the arbiter of markets.

    Hayek was in his late thirties when I first met him. Indisputably brilliant, he lacked Schumpeter’s spark and charisma… Nevertheless, I found myself largely in agreement with his basic economic philosophy.
    Autobiography of David Rockefeller Memoirs

    Pretty high endorsement for the Austrian School of Economics.

    I suggest reading: Mises on Money: FRACTIONAL RESERVE BANKING

    …The gold standard for centuries kept fractional reserve banking in golden chains. For over a century — indeed, ever since the creation of the privately owned (until 1946) Bank of England in 1694 — central bank policy and government policy have combined to extract physical gold from the owners and transfer it to members of a cartel: bankers. The policy has worked, decade after decade. First, the gold is exchanged for receipts, which are convenient. More receipts are issued than there is gold in reserve. Then, when the bank run begins — always at the outbreak of a major war — the government passes legislation allowing banks to refuse payment of gold during the national emergency.

    Every currency devaluation should be understood as the breaking of contract, Mises argued:…

  107. Mickey Reno says:

    Holy crap. This is what passes for scholarship, these days?

    Maybe we ARE doomed!?

  108. gopal panicker says:

    these are just some idiot economists

  109. beng says:

    ****
    Gail Combs says:
    August 7, 2012 at 5:51 pm

    Bill Parsons says:
    August 7, 2012 at 4:18 pm

    Romney was at the center of this issue recently when he commented that Israelis had succeeded in the Middle East due to their culture….
    ______________________
    I agree with him because that society has always had a high regard for learning and it has paid off in dividends in the science, technology and industry they have brought to their land.

    ****

    Gail, just another example of post-modern “progressive” thinking/culture — success is bad, no one is responsible for themselves, playing the victim or race card, etc, etc, etc. What can one do?

  110. eyesonu says:

    acementhead says:
    August 7, 2012 at 6:34 pm
    That you Alfred?
    Plus one internets to the first to solve my simple puzzle.
    Prediction: eyesonu will not solve it.
    =====================
    Cement/concrete weighs from 68 to 200 lbs/cu ft with 68 being light weight and 200 being dense.

    Is the puzzle to determine that you, “a cement head”, are dense or just a light weight? Adding rocks to your mix would put you in the dense category while expanding clay would create the light weight category. Are you both dense and light weight? Puzzle solved?

  111. eyesonu says:

    Re: acementhead

    Or is the puzzle to try to make any sense of what cement head wrote. That one I could not solve.

  112. JP says:

    “The study first gained public attention as a working paper in 2008. It collects temperature and economic-output data for each country in the world, in every year from 1950 through 2003, and analyzes the relationship between them. ”

    Ah,nothing like a bit of spurious correlations. I’m waiting for the statistical study that correlates roosters crowing and sunrises.

    Here’s a bit of moving the goal posts,

    “One consequence of this, borne out in the data, is that the higher temperatures in a given year affect not only a country’s economic activity at the time,…To see why, Olken suggests, first think of a dry year for vegetables in your backyard garden.” We’re not talking about precip but temps. The UK is having a very cold but very wet summer. My guess is that the hop yields in Kent will be very poor this year.

  113. Gary Pearse says:

    I think African economies require that they retire their militaries. They spend disproportionate amounts on a military that is used only to kill and subdue its own citizens. They don’t tend to have much in the way of all out wars with their neighbors. Of course there will be no retiring of the militaries, because it is those in power who use their militaries against there own people. How proud some of these Sandhurst and other European military school graduates must feel after a day of gunning down people in the market places and neighborhoods. I note they all have campaign ribbons, too and probably there are medals for bravery and that sort of thing handed out.

    I worked in Nigeria in the middle 60s, a couple of years after independence of much of Africa from its colonial administrations. I was a government officer – geologist-in-charge of a branch office of the Geological Survey of Nigeria, still peopled largely by expatriot geologists. My lofty station gave me administration over a messenger with a bicycle (no telephones) a male clerk-typist and myself as the only geologist (or any other official) in the branch. Nevertheless, this brought me invites to lavish parties and commands to attend formal receptions for heads of state (I use the plural deliberately and the term “heads” seems particularly appropriate). I met several heads of state (all military) after a coup that killed the duly elected first prime minister of the country Alhaji Tafawa Balewa, followed by several coups over the course of a year or two. One command was that I attend at the airport at Jos with a phalanx of other dignitaries to meet General Ironsi, President of the Federal Republic and Commander-in-Chief of the Nigerian Forces (I believe he called himself). Also, I was commanded to attend a formal reception that evening for dinner and drinks. This was a scary day, since Ironsi was a catholic Ibo and they had killed the muslim prime minister and assassinated the Sultan of Sokoto (like killing the Pope). The military honor guard was all muslim and they were nervously clicking their safeties off and on their assault rifles both at the airport and surrounding the evening show. While there, I was introduced and being a mining man, he asked me if I could construct bombs in 45 gallon drums that they could drop from a DC3 in case of an insurrection. Well, I could have with dynamite, and I was his employee, but I said there would need to be a device to set it off on impact. He said he would get back to me. Two weeks later in Ibadan, he had his head of state cut off and a new boss came into the picture some month’s later. I was at least temporarily relieved.

    The next day I went to the marketplace to get myself some cigarettes, meat and a few shillingsworth of rice from a cardboard drum that had a label “A gift to the people of Nigeria from Oxfam”. This was the minister of health’s style in distributing the gift. His brother owned a trucking firm and he got the contract to deliver the minister’s rice.

    Ladies, gentlemen and economists, the temperature had nothing to do with any of this.

  114. Jimbo says:

    B.S and a crock of doggy dooo. You really can’t blame the poor climate scientists as funding is abundant and they have to write some piece of garbage to justify their pathetic existence.

    http://wattsupwiththat.com/2011/04/03/the-big-self-parodying-climate-change-blame-list/

  115. Jimbo says:

    During the Roman Warm Period productivity declined and famine was rampant.

    During the Little Ice Age there was a massive boom in agricultural output and food for all.

    It’s simple and clear to understand where these people are coming from. Furthermore, C02 is NOT plant food but a deadly toxin. So deadly that greenhouse growers pump in the poison at 1000ppm in order to kill their crops. It all makes complete sense now.

    (Do I need to put a sarc tag?)

  116. Jimbo says:

    All hope is lost for Africa after the hottest decade on the global record. Oh noes!!!

    Why does the public fund such BS studies trying to link global warming with withering economies??? I repeat, the study is B.S and a crock of horse sh!t

    Seven Of The World’s 10 Fastest-Growing Economies Are African (May 21, 2012)
    Africa, with a population expected to roughly double by mid-century, has become recognized as the world’s fastest growing continent. But the less-told story is of Africa’s economic rise. In the last decade Africa’s overall growth rates have quietly approached those of Asia, and according to projections by the IMF, on average Africa will have the world’s fastest growing economy of any continent over the next five years.

    Seven of the world’s 10 fastest-growing economies are African.

    http://www.businessinsider.com/seven-of-the-worlds-10-fastest-growing-economies-are-african-2012-5

    Further references
    http://www.economist.com/blogs/dailychart/2011/01/daily_chart
    http://www.economist.com/node/21541015

  117. Jimbo says:

    I wonder how the heck some of the warm Asian Tiger economies developed during the period of global warming? From Third World to First World during rising global temperatures. Am I missing something?

  118. Jimbo says:

    Global warming during the ‘hottest’ decade on the record has killed trade with Africa. There is simply no hope left. It’s a terrible shame.

    The Independent – 10 June 2012
    The world is starting to take notice: trade between Africa and the rest of the globe increased by 200 per cent between 2000 and 2011. As well as the usual exports of oil, natural gas and minerals, the sale of African-manufactured goods is also increasing. Over the past ten years, African manufactured output has doubled.
    http://www.independent.co.uk/news/world/africa/economic-growth-stirs-hope-in-africa-7834230.html

    All this disaster and economic calamity during the ‘hottest’ decade on the record. What does global warming really mean for the world’s economies? I’m thinking again about the Asian Tiger economies and their decline during their rise just before the economic global downturn.

    I hope this is my last comment here unless a Warmist wishes to back up this crap study.

  119. u.k.(us) says:

    Jimbo says:

    August 8, 2012 at 4:12 pm

    I wonder how the heck some of the warm Asian Tiger economies developed during the period of global warming? From Third World to First World during rising global temperatures. Am I missing something?
    ======================
    Tigers, they demand attention.

    They can’t be reasoned with.

  120. Joachim Seifert says:

    Gary: The Respectable MIT-warmists found this all has to do with
    over-warming, the guys were over-warmed and all this misery
    happened because they were warmed by an exceeding 1.3 degrees….
    The statistics prove it. Good thing, YOU did not overwarm and that
    you kept COOL. Keep cool man, not keep overwarm….this is the point
    the scientists from MIT make…..

  121. Joachim Seifert says:

    Our lesson is: Keep COOL and do not OVERWARM….

  122. Sam says:

    Some of the criticisms here miss the mark. Just because there isn’t one to one causation (you have coups without bad weather) doesn’t mean something isn’t a causal variable.

    There is a slightly larger problem.
    If you look at the paper’s last page you see which countries are poor and which are rich.

    Rich countries include
    China (5400), Jamacia (5562) Albania (4030) Colombia (7067) Iran (4526) Jordan (4666) Guyana (2994)

    (numbers are per capita and from wiki, World Bank column with all values from between 2009-2011.)

    There are a couple of things to note. First, there are richer “poor” countries like Ecuador (4569). Leaving aside considerations of cherrypicking, it is important to note that the standard for rich is really low.

    If rich is just above 5000, then a good portion of poor countries will move into the rich category before the temperature increases.

    Lets use a simple example, Bangladesh (using Vietnam would be a bit unfair). It is listed at 735 per capita in 2011 by the world bank.

    http://www.thedailystar.net/newDesign/news-details.php?nid=131027
    This lists the country’s current growth at 6% (during a global recession), up from the disappointing 4% in the 1980s.
    http://www.indexmundi.com/bangladesh/population_growth_rate.html
    Pop growth of 1.5

    This means the country’s per capita income will double every 16 years and 3 doublings will move it into the rich category- so it will be fine in 48 years. Essentially all poor countries with decent economic growth will quickly climb up into the “rich” category.

    Summary
    Developing nations will quickly be out of the poor category so this will only be a marginal problem for them. Countries that are suffering from poverty and low growth will be the most affected, mostly because they have little ability to adapt to change. Someone should take a look at how big the temperature effect is on those countries (there should be different reactions to temperature between an economy that is growing (Vietnam) and one that is suffering a civil war (Nepal)).

  123. Sam says:

    I just realized my comment was incomplete. I need to give an example with temperature increase.

    Lets use middle of the road IPCC estimate (4 C, or 1 C every 25 years). 2012-2028- No temperature effect, economy doubles to 1470. 2028-2047 temperature effect of .65, growth rate 3.85 with doubling time of 18.7 economy at 2940 2047-2075 temperature effect of 1.95 growth rate 2.55 doubling time of 28 economy at 5080.

    So it will take Bangladesh 15 more years assuming their per capita growth is a constant 4.5% (it won’t). The faster countries growth or the richer they begin, the smaller the number of years extra it will take. For example if 6% was their per capita growth rate, in normal they would be done by 2048 and long would take until 2052- a difference of just 4 more.

  124. observa says:

    Relax everybody because because the Wizards of Oz are going to save the World single handedly-
    http://www.theaustralian.com.au/business/opinion/australia-will-send-57bn-a-year-overseas-by-2050-treasury-modelling-shows/story-e6frg9k6-1226118430293
    The computer models all show that this time around the thin air derivatives trading will be different and who could possibly argue with computerised trading programs? For the skeptics among you, please note it’s all been rigorously tested with Microsoft, Mac and Android and it all checks out.

  125. Mike Mellor says:

    The data is freely downloadable but to interpret it you need to buy Stata software. Stalemate. I’m too lazy to see if my C++ or Pascal interpreters can read it. Anyone?

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