From the Institute for Energy Research:
…
It is this second class of models, the economic/climate hybrids called Integrated Assessment Models, that Pindyck discusses. Pindyck’s paper is titled, “Climate Change Policy: What Do the Models Tell Us?” Here is his shocking answer, contained in the abstract:
Very little. A plethora of integrated assessment models (IAMs) have been constructed and used to estimate the social cost of carbon (SCC) and evaluate alternative abatement policies. These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g. the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models’ descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading. [Bold added.]
For those unfamiliar with academic prose, such inflammatory language is almost unheard-of, particularly for a politically sensitive topic such as climate change economics. Pindyck is here reaching the exact same conclusion that I gave in my recent testimony before Senator Barbara Boxer and other members of the Senate Environmental and Public Works Committee: The computer models used by the Obama Administration’s Working Group to estimate the so-called “social cost of carbon” should not be the basis of federal policy.
…
“Any Result One Desires”
In my testimony, I said the “economist can produce just about any estimate of the social cost of carbon desired.” Pindyck reaches the same conclusion in his paper when he writes:
And here we see a major problem with IAM-based climate policy analysis: The modeler has a great deal of freedom in choosing functional forms, parameter values, and other inputs, and different choices can give wildly different estimates of the SCC and the optimal amount of abatement. You might think that some input choices are more reasonable or defensible than others, but no, “reasonable” is very much in the eye of the modeler. Thus these models can be used to obtain almost any result one desires. [Pindyck p. 5, bold added.]
…
Full story: http://www.instituteforenergyresearch.org/2013/08/12/scathing-mit-paper-blasts-obamas-climate-models/
The paper is here:
Click to access Climate-Change-Policy-What-Do-the-Models-Tell-Us.pdf
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
Well, yes, but we already knew that.
I would hate to be named – oh never mind.
A warmer world sustains more total life and more diversity of life. Put a shoe in your egg and believe it.
==========
I love the illustration, showing an analog equivalent of the model controls…
” …… but that perception is illusory and misleading.”
So – worse than useless then.
(A statement not a question)
Unfortunately, as an institution, to a very great degree, MIT remains in the tank.
We knew this in the 1960s. We knew this in the 1970s. Somehow in the late 1980s, people decided that computer models were worth a damn. In the 1990s they became gospel. in the 2000s people began to be excommunicated for suggesting that computer models were not the word of god. Now in the 2010s, people are somehow re-discovering that computer models are about as useful as Microsoft Bob.
The Ghost etc..
Exactly the only way to chnage this shocking situation is to kick out Obama with all The climate C@ur momisugly@@ur momisugly as the Australians are about to do with Rudd Gillard etc. The French never fell for it and the Germans are slowly extricating themselves… LOL
IAMs seem to be like Simcity, where you could enter a negative value for depreciation.
They also seem to have built-in “God Mode”.
GlynnMhor says:
August 14, 2013 at 2:36 pm
> I love the illustration, showing an analog equivalent of the model controls…
I hate the illustration – I think it was taken in a hotel room, and hotel per-room heat pumps generally need their filters cleaned (so I do that) and whatever pathetic air exchange port opened. So I do that too. 🙂
At least the LCD TVs don’t need as much attention as the CRTs….
@Martin Clark
I love it – Simcity and God mode.
When your next instalment of research funding depends on your current research coming up with a politically acceptable result, guess what? It does. Constructing Delphic models is actually no different.
Pointman
Excellent. Another paper that basically says “WAKE UP!”
I get a nice warm feeling that all the alarmists, greens, politicians and the like, are currently frozen in a gobsmacked kind of way as they realize the doors have blown inwards, the windows are busted, there are huge gaping holes in the walls, a massive storm waiting for them outside, and their insurance policy has just expired.
Ric, hopefully not one of those “rented by the hour” hotel rooms where somebody’s getting screwed…
The ratepayers and other citizens in this case.
Who cares when it can be used as a political weapon. Trenberth? Schmidt? No honest bone in their bodies.
I guess one could read the paper …
“My criticism of IAMs should not be taken to imply that because we know so little,
nothing should be done about climate change right now, and instead we should wait until
we learn more. Quite the contrary. One can think of a GHG abatement policy as a form of
insurance: society would be paying for a guarantee that a low-probability catastrophe will
not occur (or is less likely). Some have argued that on precautionary grounds, there is a case
for taking the Interagency Working Group’s $21 (or updated $33) number as a rough and
politically acceptable starting point and imposing a carbon tax (or equivalent policy) of that
amount. This would help to establish that there is a social cost of carbon, and that social
cost must be internalized in the prices that consumers and firms pay. (Yes, most economists
already understand this, but politicians and the public are a different matter.) Later, as we
learn more about the true size of the SCC, the carbon tax could be increased or decreased
accordingly.”
http://web.mit.edu/rpindyck/www/Papers/Climate-Change-Policy-What-Do-the-Models-Tell-Us.pdf
Eliza says:
August 14, 2013 at 2:41 pm
“The French never fell for it and the Germans are slowly extricating themselves… LOL”
Germans currently pay about 20 billion Euro a year in subsidies; rising with 25% a year. So about 250 EUR per person and year. A number that is never reported by the media; they are lying by omission. The public has no say in the matter as all Bundestag parties are part of GLOBE and Bilderbergers; and on top of those parties, the unelected EU commission has its way with the protectorates (ex constitutional republics); making 70% of the laws for them.
@Jeremy 2:40pm.
Microsoft Bob!
Ah! Happy days. What a totally awful attempt to “make life easier”, to “make computer use easier for dummies”. Thankfully it was pulled before most of the world saw it.
No more useless than climate science though. I just wish that was pulled as well.
“These models have crucial flaws that make them close to useless as tools for policy analysis”
Delete the words “close to” and I think Pindyck has it nailed.
DirkH says:
August 14, 2013 at 3:12 pm
“Germans currently pay about 20 billion Euro a year in subsidies”
Renewable energy (solar wind biofuel) subsidies, that is; all presumably to “save the climate”.
As an EU citizen you are either stupid or you know you’re a slave of a bunch of malevolent assholes.
@ur momisugly Eliza:
” …. C@ur momisugly@@ur momisugly as the Australians are about to do with Rudd …”
Trouble is, the Coalition’s Direct Action Plan is also c@ur momisugly@@ur momisugly. Just a bit cheaper.
Also, the Coalition has a track record for snatching defeat from the jaws of victory.
For anyone interested:
CLIMATE CHANGE POLICY: WHAT DO THE MODELS TELL US?
http://web.mit.edu/rpindyck/www/Papers/Climate-Change-Policy-What-Do-the-Models-Tell-Us.pdf
Here is the key bit that the Warmists will harp on,
“Mark XR says:
August 14, 2013 at 3:10 pm
I guess one could read the paper …”
Beat me to it.
I don’t often use discounted cash flow models, for the simple reason that the last time I spent several weeks sweating over one, the honest answer it spat out was that the stock was worth somewhere between X and 2X. Which I already knew. The unknowns were massive, because timscales were long and trends over time were uncertain, and the choice of discount rate the icing on the cake,
If you can’t figure out the value of a mining stock, how in God’s name are you going to figure out the value of something where timescales are longer and essentially everything is unknown in form as well as value? Only a swivel-eyed loon (to quote a conservative commenting his grass-roots) would set any store by such drivel. Despair isn’t the half of it….
Well, of course. The models exists to justify the policies, not the other way around. If (when) the models become disagreeable, they are decisively ignored by policymakers. This is not something new and happens across the political landscape systematically.