Guest Post by Willis Eschenbach
Driving home today, I heard about a new report from one of those Canadian “we work for the Government but we’re actually really truly independent, honest we are” kind of organizations. It’s called “PAYING THE PRICE: THE ECONOMIC IMPACTS OF CLIMATE CHANGE FOR CANADA.” It is chock full of the usual nonsense about how, in a country plagued by cold Arctic winds and suffering from a short growing season, a couple degrees of warming will be a multi-billion dollar national tragedy. It featured the usual huge numbers, warming will cost multiple tens of billions of dollars per year. (Curiously, there is no mention of any billions in supposed costs from the 20th century warming.)
I got to wondering about how they estimated these huge costs. I mean, were they based on scientific studies, or from actuarial data, or were they estimated from past damages, or were they just extracting the numbers from their fundamental orifices?
The answer, I found out, is “none of the above”. Once again, it’s models all the way down. In this case, it’s a whiz-bang model called Page09. Here’s their diagram of how it all works, from page 37 of the cited report.
Figure 1. Description from the climate report of the model used to estimate the damages from warming temperatures.
Damage functions? I like the sound of that, I never heard of a “damage function”, but then I was born yesterday. So I set out to understand the Page09 damage functions.
In my research I find this:
Within the PAGE09 Model, damage from climate change is modelled firstly as combination of specified damage functions for sea level rise, economic effects and non-economic effects.
In this reference they give the general form of the damage function. I have spread out the right side of the equation to show the two different parts.
Climate change economic and non-economic impacts before adaptation are captured as a proportion of GDP by the climate change damage function. As do all the other main IAMs with the exception of MERGE, damage is defined as a non-linear function (Bosello and Roson, 2007). Welfare impacts (WI) are expressed as a polynomial function of the difference between regional and tolerable temperature levels (RTT) as follows:
WI(t, d, r) = [RTT(t, d, r) / 2,5 ^POW ] * W(d, 0) *[WF(r)/100] * GDP(t, r)
where t corresponds to time, d identifies the damage type (economic, non-economic, sea level rise) and r the region; 2.5 are the °C corresponding to the tolerable increase in temperature due to global warming; POW is the power of the polynomial impact function; W(d, 0) is the impact in the focus region (i.e. EU) at 2.5 °C and WF(r) is the regional weight applied to EU impact to calculate the impact in other world regions. SOURCE
Let me give a stab at translating that into English. First, the left hand side in brackets says take the amount by which the region is warmer than the tolerable range RTT(t,d,r) . Divide that by 2.5, and take that to some power POW. That gives you the damage impact index.
Second, the right hand side just adjusts the damage index calculated on the left hand side, to convert the impact into a dollar value. The important thing to note is that for a given damage type and region, the right hand side is a constant, that is to say it does not vary with T. All the work is done by the left-hand side.
Another reference gives the exact same equation for the damage function, with different symbols:
1.3.2 Model adjustments
At the core of the damage function in PAGE09 is the Equation (5).14
d = alpha * (TACT/TCAL) ^ beta
where d is the damage, alpha is the damage at the calibration temperature, TCAL is the calibration temperature rise, and TACT is the actual temperature rise, beta is the damage exponent.
The calibration temperature is on average 3°C. Therefore, if the actual temperature rise is 3 °C, on average, the damage equals alpha. The damage exponent, beta, becomes more important as temperatures rise above TCAL. In the standard model, beta is entered as triangle (1.5, 2, 3). Therefore, on average, the exponent is 2.167 (slightly above a quadratic), meaning that at twice the calibration temperature (on average, TACT equals 6°C), the damage will be 4.5 times alpha. SOURCE
The damage function graphs out as shown in Figure 2, for various values of the power coefficient POW (also called “beta”) and RTT(t, d, r) (also called “TACT”).
Figure 2. The form of the damage function for the triangular number POW = {1.5, 2, 3}. Note that for a 5° rise the maximum curve (POW = 3) forecasts eight times the damage.
This shows that in all cases used in, damage rises faster than temperature.
There are some odd parts of using this form of a damage function.
First, the one that rises the fastest with increasing warming (POW = 3, green line) starts out the slowest. What would be the physical reason for that?
Second, it assumes that human beings don’t learn. Sure, if there is one year of warmer weather, some farmers will lose money from planting the wrong thing, or at the wrong time. But if the warmer weather continues, the farmers will plant earlier and rejoice that the growing season is longer.
There is also another problem with this kind of analysis. In addition to assuming that farmers are stupid and that damage goes up geometrically as temperatures rise, there is no provision for the benefits of the warming. They pay lip service to the idea of benefits in the report, but I see no serious understanding of the difference between the costs and the benefits of warming for Canada. One difference is that the costs are often short-term (adjustment costs), while the benefits of the warmer climate are often longer lasting.
Again, farming is a good example. The costs to farming of a warming are short-lived. For a few years the farmers would plant something that might not be optimum for the new, warmer climate. But after that, the longer growing season is a benefit forever … how can they not include things like that?
Around the latitude of Canada, the change in average temperature as one goes north is on the order of 2.5° (where damage = 1) for every couple hundred miles. So if you took a Canadian farm and moved it two hundred miles south, do you seriously think that the farmers would suffer huge problems?
The same thing is true of the forests. They claim there will be huge damage to the forests from a few degrees temperature rise … but for many forests in Canada, the same forest exists two hundred miles to the south of a given point … and two hundred miles to the north of that point. That’s a change of FIVE DEGREES, OMG, THE SOUTHERN TREES MUST BE BURNING UP, THEY ARE FIVE DEGREES WARMER THAN THE NORTHERN TREES, COULD BE EIGHT TIMES THE DAMAGE …
I fear I can’t appropriately express my contempt for this kind of grade-school level of thinking about damage impact. If that’s the best a bunch of “damage analysts” can come up with, I’d fire them on the spot.
Always learning, I find out that this family of models are called “IAMS”, for Impact Assessment Models. The most trenchant comment I have found about them comes from the first source cited above, which says (emphasis mine):
An interesting challenge to the methodology of IAMs comes from a series of papers from Weitzman (2009a, 2009b, 2009c). In these papers, he puts forward a number of critiques of the current cost-benefit analysis of climate change, especially the approach embodied in IAMs.
Weitzman’s observations go even further with the elaboration of what is referred to as the ‘dismal theorem’. The idea is basically that under certain conditions, the expected loss from high-consequence, low-probability events can be infinite. In such a situation, standard cost-benefit analysis is therefore no longer an appropriate tool. Weitzman argues that, given the extent of our current understanding, these conditions apply to climate change.
Taking this idea to its limit would suggest that IAMs have little relevance for policy, as the response ought always to be to choose policies that do everything possible to avoid an infinite loss, even if there is only a small probability of such an outcome.
This “dismal theorem” is an extremely important conclusion, and is applicable to a host of the modeling exercises involved with thermal doomsday scenarios.
So Canadians, when they throw this high-cost, low-value modeling exercise in your face, you can just say “Sorry, go hawk your model results somewhere else. IAMS have little relevance for policy”.
Finally, as a businessman, I’ve done a host of cost-benefit studies. I have no problem with a proper historically based cost-benefit analysis of some possible future occurrence or action. However, the “PAYING THE PRICE …” report is nothing of the sort.
My condolences to my northern neighbors, who have their own Kyoto crosses to bear …
w.
PS — The climate models say that the maximum effect of the putative warming will be seen in the extra-tropical winter nights. Is this a problem? I mean, I don’t hear a lot of Canadians saying “Dang, it’s getting way too warm after midnight in February” …
PPS — my favorite argument is that the problem is not the absolute temperature change, it is the speed of the temperature change that is claimed will cause the problems. Yeah, at the much-hyped theoretical future rate of 0.03 degrees of warming per year, watch out when you step on board. If you’re not ready for it, the G forces from suddenly taking on that magnitude of high-speed warming can cause whiplash …
Stephen Rasey says:
October 1, 2011 at 7:45 pm
I’m sorry, Stephen, but I’m going to have to ask for a more solid citation than the “Men’s Journal” to accept that claim. I understand the “die in the winter” part but I’m not buying the minus 50°F. Let me take a look … OK, the University of Colorado sez:
Note that this says nothing about minus fifty, or night-times. It just says a “severe freeze” is necessary to kill them in spring and fall.
Regarding the larger issue, the cyclical epidemics of different species of beetles have been a feature of the western North America forests for as long as there have been such forests. The mountain pine beetles kill the pines. Then the epidemic burns out, or sometimes gets frozen out, and spruce trees grow where the pine was. Then the spruce beetles come in and whack the spruce, and the pines come back, and then the mountain pine beetle’s time comes ’round again …
Or as the National Park Service describes it,
Finally, the timber analysis done by the BE VERY AFRAID Canadian folks doesn’t (AFAIK) include the value from the harvest of beetle-killed timber. There’s an excellent Canadian analysis of that issue here.
Thanks for bringing up the question,
w.
From this media version of this story:
http://www.theglobeandmail.com/report-on-business/economy/economic-costs-of-climate-change-will-be-high-panel-warns/article2183729/
“In the report, the panel urged the federal government to invest in expanding the country’s expertise in the economics of climate-change impacts and adaptation, in research on the costs and benefits of specific adaptation options.”
Give us money or the “damage function” will be high.
Its simple extortion. Judging from the comments on these stories in the Canadian media, nobody but the shrinking number of eager AGW dupes is buying this there anymore, at all. And the government there now, and for at least the next four years, are not AGW dupes.
And with this fine piece of dissection spead across that blogosphere there will be even more eyes rolling. Great job (as usual) Willis.
But, but, but…
These guys are all noble laureates, they must be right:
http://www.timescolonist.com/technology/Nobel+laureate+embarrassed+nation+climate+record/5455680/story.html
I have a buddy who works for the Red Cross, an organization that won the Noble Peace Prize about three times. Guess I get to address him as a “Noble Laureate” next time I see him. At least he deserves the accolade.
Critical piece here is that the Climate Change Roundtable (or whatever the actual name of this farce is) is an organization created by the previous eco-Liberal government back when the Liberal Party Leader had already named his dog “Kyoto”. [No, really, I am not creative enough to make this stuff up.]
That leader of the Liberal Party and the Liberal Party itself went down hard in the last federal election a few months ago. The new, Conservative, government has a lot on its plate and it has not yet gotten ’round to defunding this bunch of eco loonies. But there is no chance at all that anything they have written will be taken seriously at a policy level
As ever, Willis has whacked this particular mole dead…but it was already a dead mole walking.
Dang ,does this mean that Winnipeg could get as scorchingly hot as Fargo, ND in the winter? Ever notice how many northerners winter in Texas and Arizona and Florida and Hawaii? A notable portion of Canada and Alaska and the frosty northern tier of states head south for the winter. A considerably less portion of the Arizona and Texas and Florida folks move to Winnipeg and Saskatoon and Halifax and Whitehorse for the summer.
Sort of makes you wonder if human migration can be modeled as a function of seasonal temperature. Someone could perhaps follow the seasonal travels of those whose homes are RVs.
Do any sentient adults ever get paid to write this stuff?
This brings to my mind Mulroney saying something in his memoir about “seasonal unemployment”. I believe the season causing that unemployment is the cold one.
That “experts” can make such an incredible projection of the effect of warming on Canada is about as telling as can be. Also: “OMG, THE SOUTHERN TREES MUST BE BURNING UP, THEY ARE 5 DEGREES WARMER THAN THE NORTHERN TREES, COULD BE 8 TIMES THE DAMAGE” Quoted for very great justice… I took off my glasses and laughed!
I was offered a wonderful job in Ottawa and would have accepted it but for the fact that the temperature during my visit in mid February was -25 Centigrade during the day. It is really obvious that Canada needs as much “Global warming” as it can get!
“Climate Shock” hit me when I saw the power connections in the company parking lot so you could plug in your sump heater to prevent your engine oil freezing during daylight hours!
Currently I live in Florida. My wife and I plan to move another 1,000 miles south (within 6 degrees of the equator) when we finally retire in 2013. No snow or ice……ever.
Willis Eschenbach says:
October 1, 2011 at 10:22 pm
The real driver of the cycle you describe is fire. The lodgepole pine, the primary poster child for this story, is fire dependent on the long time scale. It can only dominate a landscape with regular stand-destroying fires which simultaneously eliminate their competition and plant new EVEN-AGED pine stands. Without fire spruce wins. And spruce beetles do not kill spruce forests the way pine beetles kill lp pine forests because spruce forests are multi-aged, leaving lots of young spruce while killing off the older ones – still leaving the pines in the shade, unable to grow.
(Other pines are also fire dependent in a less suicidal way – regular fires thin but do not destroy those forests unless but the lodgepole pine is the most dramatic and simplest example… and its late and I’m tired.)
Thus the real driver of the recent mt pine beetle hyper-epidemics is fire suppression, which created so much prime beetle habitat – MATURE even-aged lodgepole pine stands. In the case of British Columbia, the fire history left vast swaths of it and that let the population explode.
No matter how warm winters are, no mt pine beetle habitat, no mt pine beetle epidemic, period.
Blame Smokey the Bear, not AGW. But that wouldn’t be nice, would it?
Jay Currie says:
October 1, 2011 at 10:40 pm
That’s good news, but the problem is that once some quango like this gets whelped, it’s hard to kill.
Ooooh, I like it, “dead mole walking” … it’s a great description of the catastrophic AGW hypothesis.
w.
Forgot to add. The mt pine beetle epidemic in Canada is OVER. It has already killed off almost all of its habitat. Contrary to the wild fearmongers, there is no chance it will spread across the boreal forest because it is host specific and jack pines, the ‘boreal pine,’ is not a viable host.
That is a point all the supposed ‘green’ thinkers seem to conveniently miss on this story. They talk and talk about biodiversity but when there’s an obvious and simple example staring them in the face – different insects are adapted to different trees – their brains seem to freeze… perhaps from the heat.
I know it’s been said already:
Mr Suzuki’s fruit flies never seem to die.
Until the cold Arctic comes home and wipes them out.
’nuff said -(Canadian for he’s embarrassing ) and still works for the CBC
Still feeding people with the same stuff that his fruit flies excrete.
d
every summer when the ground thaws we get a fresh crop of rocks pushed up by the freezing ground last year. Where would the Canadian economy be without this vital crop? Instead we have to settled for exporting $400 billion worth of oil to the US each year.
Even wikipedia understands why peak oil is nonsense:
http://en.wikipedia.org/wiki/Oil_sands
Oil sands may represent as much as two-thirds of the world’s total “liquid” hydrocarbon resource, with at least 1.7 trillion barrels (270×109 m3) in the Canadian Athabasca Oil Sands (assuming a 10% recovery).
In October 2009, the USGS updated the Orinoco oil sands (Venezuela) mean estimated recoverable value to 513 billion barrels (81.6×109 m3), making it “one of the world’s largest recoverable” oil deposits.[16]
Between them, the Canadian and Venezuelan deposits contain about 3.6 trillion barrels (570×109 m3) of recoverable oil, compared to 1.75 trillion barrels (280×109 m3) of conventional oil worldwide, most of it in Saudi Arabia and other Middle-Eastern countries.
Oil sands reserves have only recently been considered to be part of the world’s oil reserves, as higher oil prices and new technology enable them to be profitably extracted and upgraded to usable products. They are often referred to as unconventional oil or crude bitumen, in order to distinguish the bitumen extracted from oil sands from the free-flowing hydrocarbon mixtures known as crude oil traditionally produced from oil wells.
Here is an example of the madness in US oil policy:
Section 526 of the Energy Independence And Security Act prohibits United States government agencies from buying oil produced by processes that produce more greenhouse gas emissions than would traditional petroleum including oil sands.[31][32]
^ Kosich, Dorothy (2008-04-11). “Repeal sought for ban on U.S. Govt. use of CTL, oil shale, tar sands-generated fuel”. Mine Web. Retrieved 2008-05-27.
^ Bloom David I, Waldron Roger, Layton Duane W, Patrick Roger W (2008-03-04). “United States: Energy Independence And Security Act Provision Poses Major Problems For Synthetic And Alternative Fuels”. Retrieved 2008-05-27.
gallopingcamel says:
October 1, 2011 at 10:47 pm
As a man who spent many, many happy years at 6°S (northern solomon islands) and 9°S (guadalcanal, solomon islands) and 17°S (fiji) and 19°S (tonga), I can only envy you your tropical retirement. Prepare to get into waiting, not waiting as something that you complain about, but waiting as an art form, something you do with style …
w.
Here’s Suzuki comparing people to maggots:
RE: Willis Eschenbach says: Oct 1, at 10:22 pm
The point I was making was that alleged increases in minimun very cold temperatures can arguably be linked to “damage” in a damage function. However, such a damage function might increase quickly at low temperatures, but once the damage is done, further rises in temperature have little effect.
Indeed, as you further raise the temperatures, the very same forest will experience much faster growth, resulting in “negative damage” rates. You wind up with a somewhat parabolic damage function(T), concave downward. Sort of a Laffer Curve of Damage.
Scott Brim says:
October 1, 2011 at 6:19 pm
Willis, is it possible that warmer temperatures might accelerate the rate at which Canada’s steel bridges corrode, possibly leading to a series of catastrophic bridge collapses which will ultimately be linked to the mining of tar sands in Alberta?
—-
Well, if it got warmer, the steel bridges might not undergo the glass transition in winter, and that would improve the serviceability of the bridges. As it is, when it gets really cold, the steel in the bridges can turn into a brittle glass-like state. There have been instances of bridges shattering when in this state.
http://en.wikipedia.org/wiki/Ashtabula_River_Railroad_Disaster
http://en.wikipedia.org/wiki/King_Street_Bridge_%28Melbourne%29
http://en.wikipedia.org/wiki/Hoan_Bridge
RE: ferd burple: “Section 526? Yikes!
What does it say about getting energy from burning the Federal Register?
Per Strandberg says: October 1, 2011 at 7:18 pm
Well, as I discovered when I skimmed through this report, yesterday, they claim it was:
This opus, btw, is the fourth in a series of six – all of which have the over-arching (well, left sideways arching, actually) title of “Climate Prosperity”. More at:
Spreading the joy of climate change economic alarmism
For all the late winter/spring storms that delayed so many crops, it’s time to assess what is coming for this winter. We heard geese flying south over NW Calif. today. It’s October 1st.
Forget about CO2 warming, it’s not happening.
Forget about rising sea levels, they’re falling.
Forget about the Arctic Sea Ice melting, it reversed course 1 week before the equinox.
What kind of a winter are we looking at?
Well, at least for now, having a Conservative majority government in Canuckistan will limit the effectiveness of these very strange models. Hopefully, the whole stupid mess will collapse before the next election.
… and we still don’t learn from history.
The Medieval Warming reached temperatures approximately 1 to 1.5 degrees C higher than the present assumed global warming. The crop yields across Ireland, England and Europe, and their market prices, are all a matter of historical record, as they were during the of the Little Ice Age. Where are the comparisons? What were the trends?
Shouldn’t we look back and learn?
Interesting equation raises one question, when the cooling sets in, how much money will we get ?
POW = 3 means we will get a load of money even if the planet turns into a ball of ice. POW = 2 means we will still have taxation and high cost situation. POW = 1 getting money again ? Just look at the cost of the London blizzard last year and send this garbage where it belong. Don’t forget to send the authors the same way to stop the drainage from our well earned money, legally stolen with help from our very intelligent so called leaders.
Well, as a Canadian living in the Capital, I can assure readers here that the tolerable range and speed of temperature variation is at least 60 Centigrade in 6 months. What does THAT do to this illiterate and deceitful damage function? How about a lengthened growing season function, is that a negative damage function?
Fortunately, we have a government that is reducing expenditures on this sort of nonsense, so expect more public bleatings from those with nice secure government office chairs and research funding contracts. Bye-bye la!
Hi Willis
Interesting article.It seems that some academics are completrely unawre that climate has this irritating habit of changing. Here are three examples of when IAMS calculations would have been triggered
This first quote comes from the same year as the start of the GISS records -1880-and puts that data set into better context.
Fom the records of the Canadian Horticulturist monthly of 1880 (page 7).
“I do not know whether or not the climate of Ontario is really becoming permanently milder than formerly, but I do know that for the past 18 years or 20 years we have not experienced the same degree of cold as the seven years preceding.”
http://www.archive.org/stream/canadianhorticu03stcauoft#page/6/mode/2up
“The temperature of the winter season, in northern latitudes, has suffered a material change, and become warmer in modern, than it was in ancient times. … Indeed I know not whether any person, in this age, has ever questioned the fact.” —Noah Webster, 1758-1843 (founder- Webster’s dictionary)
This next excerpt comes from the extensive weather records of Thomas Jefferson; (the warm weather of the early 1700’s has given way to intense cold then another period of warmth)
http://xroads.virginia.edu/~HYPER/JEFFERSON/ch07.html
“A change in our climate however is taking place very sensibly. Both heats and colds are become much more moderate within the memory even of the middle-aged. Snows are less frequent and less deep. They do not often lie, below the mountains, more than one, two, or three days, and very rarely a week. They are remembered to have been formerly frequent, deep, and of long continuance. The elderly inform me the earth used to be covered with snow about three months in every year. The rivers, which then seldom failed to freeze over in the course of the winter, scarcely ever do so now.”
tonyb