Arnold Kling  

Environmentalist Forecasting Model

Collective vs. Individual Bene... Income Redistribution Proposal...

My view of environmentalists is that they use the fixed-coefficients production function for long-term forecasting. Thus, they ignore substitution and technological change. Ronald Bailey reviews the many mistaken predictions based on this methodology. For example,

For the first Earth Day in 1970, Ehrlich, in an article entitled "Eco-Catastrophe" in The Progressive magazine, offered a scenario in which four billion people would starve to death between 1980 and 1989, 65 million of whom would be Americans.

Bailey concludes,

as biologists and ecologists, they tend to think that human beings are merely more clever herds of deer. When deer run out of their sustenance, they die. When human beings begin to run out, they turn their brains and their social institutions to producing more.

For Discussion. Which pessimistic environmentalist predictions have come the closest to being fulfilled?

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The author at Knowledge Problem in a related article titled FIXED PROPORTIONS AND ENVIRONMENTAL PROJECTIONS writes:
    A final set of recommendations ... today Ron Bailey of Reason is testifying before a Congressional hearing on "The Impact of Science on Public Policy". His testimony is available at the Reason magazine website, and indicates some general tendencies tha... [Tracked on February 4, 2004 6:36 PM]
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dsquared writes:

Most obviously, the prevalence of DDT-resistant malaria mosquitoes as a result of the frivolous use of DDT as an agricultural pesticide. Superbugs in general.

Eric Krieg writes:

But DDT is still a good example of environmentalism gone wrong. While indiscriminant use of DDT has awful effects, mostly because of the long lived nature of the molecule and bioacumulation, that doesn't mean that an outright worldwide ban on DDT use makes sense.

Because of its long lived nature, spraying the interior of a home with DDT will kill mosquitos for over 6 months. No other current generation insecticied can do the same thing, because they are specially enginnered to break down into less harmful chemicals after a short lenght of time.

DDT is cheap, and it works. It needs to be used in a smart way to make sure that its significant side effects don't cause more harm than good. But that makes it no different than any other chemical, man made or otherwise.

Lawrance George Lux writes:

The answer is Chernobyl. Environmentalists have always claimed nuclear accidents were subject to the same Accident rate as all industrial activity, possibly delayed because of use of extreme care. Still, there has been Three-Mile Island, and the daily risk of the Romanian nuclear plants. We have yet to see a nuclear cloud over a Population center. lgl

Eric Krieg writes:

>>We have yet to see a nuclear cloud over a Population center.

And that's the point, isn't it? Nuke-you-lehr power plants are not anywhere near as dangerous as the enviro-weenies would have you believe.

Even Chernobyl took some gross incompetance on the part of the Russians to blow up. And, once again, the death and destruction unleashed by Chernobyl was at the low end of what was predicted by the "experts".

The west was always orders of magnitude more safety conscious that the Russians were. And these days, companies with nuclear power plants are even more safety and quality conscious.

There is no perfectly safe source of energy. Every form of power has its risks. More people have been killed by natural gas pipeline explosions than nuclear power, for example.

Bernard Yomtov writes:

"Even Chernobyl took some gross incompetance on the part of the Russians to blow up. "

I agree with you that nuclear power has gotten something of an unfair rap, Eric, but let's not assume that there's not plenty of gross incompetence, and general corruption, to go around. Would you want Ken Lay managing a nuclear plant if he thought he could make a buck by cutting corners on safety? Have you been following the McWane Foundry story?

I think that human factors and anti-regulation frenzy give plenty of reason to be concerned about nuclear plants. I trust the technology. I'm not sure I trust the managers.

Tilak writes:

What about changes to the weather? Ok - we haven't had any major disasters yet, but the weather is changing in frightening ways around the world, I think it helps to be a bit paranoid about weather...

gogol13 writes:

"Science can tell us what may be problems, but it can't tell us what to do about them."

"[H]ave patience, the scientific process and peer review will eventually point us to the truth."

huh? there's an obvious fallacy in mr. bailey's, um, reasoning.

also he neglects to take into account changes in behaviour *because* of dire predictions. being a perennial cassandra doesn't necessarily make one wrong. the proper question is how much worse off we would be if warnings aren't heeded. an economist should understand this variation on opportunity cost.

for example the save the whales people were predicting that whales would be extinct before too long. it seems bailey would point at their hubris and say "aha! they were wrong! do not listen to their lies. pay them no heed." well, ronald, the proper framework of analysis for evaluating their performance is not only in pointing out the innacuracy of their predictions, but why? if in this case it's because there was a moratorium on whaling, then that hardly discredits predictions that went awry.

other examples.

environmentalists: "the ozone layer surrounding the earth will be depleted because of CFC's! OMG!"

ronald reasoning: "no it hasn't! see? they said it would, but look at what *actually* happened. it's still there. all their breathless hyperbole was for nought, stupid scientists. the market has taken care of it. i hereby proclaim their concerns dismissed."

[fails to mention CFC ban.]

environmentalists: "overuse of aral sea waters will result in environmental catastrophe!"

*aral sea environmental catastrophe*

ronald reasoning: *whistles*

so i'm not very impressed by the quality of advise mr. bailey gave to congress. and if that's a representative sample of the testimony they receive, i'd be very afraid. unless you like your fish mercury laced. mmmmmmm, mercury.

Eric Krieg writes:

>>all their breathless hyperbole was for nought, stupid scientists.

Maybe, maybe not.

I have trouble with "scientists" making "breathless hyperbole". There is nothing "breathless" about science. Science is a process of rational analysis, the assembling of facts that can be used to make narrow conclusions.

When so called scientists take narrow conclusions and make broad, societywide policy recomendations, I have a problem, if for no other reason than that they have gone beyond their area of expertise.

For example, an atmospheric scientist has no economic policy experience, and is really unqualified to tell us to ban CFCs outright. He can tell us that his research shows that CFCs are leading to ozone loss, and can have an opinion as to what should be done about it. But his expertise in atmospheric science lends no more weight to his policy opinion than, say, my (crackpot) opinion.

I also think that there is a lot more conflict of interest in science than the scientists themselves would lead you to believe. The way to get more government grants is to scream and yell that a crisis is at hand.

Eric Krieg writes:

>>mmmmmmm, mercury

Here is another example of scare mongering. It is not entirely clear from research that the mercury in fish is of a type that, when it bioaccumulates in humans, does harm.

Mercury in fish is not necessarily bad. And while it would be nice if it weren't there, it isn't at all clear that the money needed to clean up that mercury wouldn't be better spent elsewhere.

That mercury comes from coal power plants. Like I said before, if you aren't going to get your power from nuclear, or now coal, then where are you going to get it from?

The answer seems to be natural gas, but that itself is hardly as riskless energy source. We could be placing more lives at risk by swtiching to natural gas than if we switched from coal and nuclear.

Boonton writes:

Arnold presents a good issue, environmental forecasts do not take into account the ability of humans to make substitutions. There's a flip side to this problem, often the cost projections of environmental proposals do not take dynamicism into account either.

Over on Asymetrical Info I got into a long discussion over the costs of reducing CO2 emissions. Basically the cost of cutting CO2, say 10%, was computed by looking at GDP today versus GDP of the year when CO2 emissions were 10% lower and calling the difference the cost.

I argued that this is absurd. If for some reason we felt we had to reduce CO2 emission to the level it was in 1980 then one way to do it would be to roll back the clock to 1980. That would indeed cost the difference in GDP between 1980 and today. But that would be the absolute worst way to do it, which means that other methods (i.e. tradable credits, targetted taxes etc.) would have to cost less.

I suggest the response to Arnold's post should be:

1. What 'doomsday' predictions were never based on hard science to begin with?

2. What 'doomsday' predictions were averted by real policy changes?

3. What predictions were averted by market forces that were not included in the models that generated the original predictions?

4. What predictions were averted by unexpected events (aka good luck)?

Eric Krieg writes:

B, you have 4 excellent questions. I don't think ANYONE knows answers to ANY of the questions, at least definatively. I would say #1 applies to most catastrophic predictions that did not come to pass, but that is just my politics talking, not based on any hard evidence.

Maybe #4 happens more often than I realize. Dumb luck explains a lot of things (the light bulb, Bill Clinton's presidency, etc.)

Boonton writes:

This gets to the point of how we should plan. I have a plan for will look a lot like today. My plans for the next year or two look a lot like the past year or two. I understand I will have unexpected events but I make an assumption that my life will follow the pattern it has followed in the recent past even though I know it will probably surprise me.

It would be foolish for me to live my life as if I will win the lottery in June or be in total poverty and ill health by September. How should environmentalists build their models then? Is it reasonable to demand that they insert a 'Human genius will solve this problem' variable into their equations?

Eric Krieg writes:

>>Is it reasonable to demand that they insert a 'Human genius will solve this problem' variable into their equations?

Interesting idea. For predictions based on computer models, it might be possible to include a rate of technological change as one of the assumptions.

Boonton writes:

Wouldn't this defeat the point of a model? Take the Federal Budget. The CBO makes projections based on current policy and does not make assumptions about policy changes...even if they are likely to happen like reforming the Alternative Minimum Tax. IMO the model should give you a good idea where you are heading so you decide if you want to change course..

Eric Krieg writes:

>>IMO the model should give you a good idea where you are heading so you decide if you want to change course..

But that's how you get ridiculous models that lead to scaremongering.

It's like the CBO projecting that in 2040, 54% of GDP will go to elderly entitlements. That's absurd, based on a straightline projection. Entitlements will be reformed before that ever comes to pass.

Lee A. writes:

“Which pessimistic environmentalist predictions have come the closest to being fulfilled?”

Reductions in available fresh water and living topsoil, airborne pollution on every square inch of terrestrial surface, entry into the human food chain of heavy metals and industrial chemicals untested for long-term or synergetic effects, reduction in size of old-growth forests and other original ecosystems, loss of wild species in the remainder due to fragmentation of habitat disallowing replenishment of population, crashing of fish stocks worldwide, acceleration of weather extremes signalling possible approach of a climate discontinuity, corporate control of politics to jigger cost-benefit and risk analyses, etc. etc... All predicted in the Seventies and Eighties.

It might generate a much shorter list to ask, putting aside the timeframes which environmentalists generally did get wrong (and which Bailey is still harping upon, to less and less avail, except to the chowderheads in Congress), which of their predictions are NOT likely to come true.

I will not go into Bailey’s analysis of species extinction rates, which continues an absolute intellectual scandal now grown tiresome. It is disreputable, and in relying upon him you do yourself damage. Read the last dozen articles on the subject in both Science and Nature to get the real story. The idea that it will not harm the survival of humans is most likely true, scientifically trivial, and an enormous religious tragedy. Never mind that God gave dominion over the beasts to man in Chapter One. In Chapter Three, he threw us out, and put a guard at the Gate.

The reliance upon substitution and technological change reveals the economist’s ignorance of scale effects. Mere allocation and distribution will not always suffice cover the analysis. It is entirely possible for our accelerating numbers to outpace creative response to shortages. Any first-year student in population biology understands this. The unexpected slow growth in the present job market gives us a current tiny taste of what will come.

The idea that creativity is or remains linear to population growth is an unexamined canard promulgated by Julian Simon. If it were true, there would be about eight Leonardos walking around, six Shakespeares, three or four Beethovens, maybe two Einsteins. Not! Creativity appears to have little to do with numbers. You can give more people more chainsaws, but they will only cut down more old-growth forests.

As for the absolute predictability of all of this, cool your jets! No complex adaptive (i.e., living) system in the history of science has been successfully predicted, and certainly not on a repeatable basis. Economists can’t even get their own maco model going strong, and it may never be likely. Even with an easier non-living system, Newton thought the three-body problem deterministically intractable, and so it remains without special assumptions. So, perfect deduction of the environmental disaster now in ignition may be impossible. But we can still use induction--check your John Stuart Mill--and a little common sense, as your mother knew.

Eric Krieg writes:

Lee, some of the things you listed (fish stocks come to mind) could be addressed with economic policy, not new technology. Its a "tragedy of the commons" issue, as are many pollution issues. Ditto old growth forests and species extinction. Assigning defensible property rights could solve the problem.

Economic growth in and of itself could solve a few of your problems. Most of those old growth forests are being lost in third world countries. To survive, they exploit the only thing they have, their trees. If they were industrializing, the pressure on the land to provide a living would vanish.

Lee A. writes:

Some of the things might be addressed with economic policy. But you should try wrangling with the fishing industry. Other things ought be addressed with simple criminal laws, to save the rest of us a lot of transaction costs, and consonant with the many results in experimental economics that altruism works, as long as everyone is on the same page. The tragedy of the commons demonstrates that much of the commons should be considered as a public good, and take it out of the market system. The literature shows no evidence that assigning property rights will end exploitation of a public good, such as an old growth forest. Indeed both theory and evidence show the opposite. Indeed the Bush Administration is allowing cutting in the Tongass! These people should use their God-given entrepreneurial creativity to find another way to make a buck. Also, trade policies ignore and accelerate the terrible tragedies of oldgrowth clearcutting elsewhere in the world. People lived throughout history without the destruction now going on. Blaming it solely on population pressure is a misconstruction from theory. The evidence is that economic growth solves some environmental problems, and exascerbates others. A large reality is corporate rapacity, hiding behind selective microeconomics.

The question was, which environmentalist predictions have come the closest to being fulfilled. The answer is, almost all of them--if you allow for the fact that the time frames were way off, due to the fact that complex systems are mathematically nearly intractable.

Eric Krieg writes:

Lee, what is distasteful to me about environmentalists is the CERTAINTY to which they believe their claims.

When they are wrong, they are like some religious cult that mis-predicted the end of the world. "Well, we were off about the timing, but the end is still coming".

In truth, there is a probability of anythng happening. No different than with environmental catastrophe. I would be more impressed with environmentalists if they were more straightforward about the statisticl likelihood of their predictions. Then we could move forward with a cost/ benefit analysis of remedial action.

I suspect that my process is a little too... rational... for the average enviro.

Also, the enviros themselves are against certain remediation. Fish stocks could be improved by, say, fertilizing the areas around fish breeding grounds, or by creating more of them artificially (which you do using concrete blocks on the sea floor).

I think assigning property rights to fishing grounds is a lot easier than you let on, especially these days with satellite imaging and GPS. I'm not completely versed on the issue, but I believe that I have read that New Zealand has had success with this approach.

Lee A. writes:

Eric, no doubt you're right that many environmentalists have taken the cloak of religious certitude, much as the economists did on the topic of rational self-interest.

The problem is I think one of having experience with the theories and realities of complex adaptive systems. There is little meaning to the phrase "statistical likelihood" with most, perhaps all, of these systems. They have so many connections, they are essentially incalculate. So if things are going one way, it is a good guess that it will continue.

This is because complex systems follow path dependence (as we each do in our own lives everyday, without stopping to calculate the probabilities), so the past is something of the prologue.

If you talk to community biologists (i.e. ecologists), they are frightened about what is happening. They actually study how soil, plants, animals, and biogeochemicals interact.

And by the way, they see that most of the species extinctions have occured on land where the property rights had been long ago assigned! The subject and practice of economics, for its many great achievements, has done us a disfavor in this regard. Its answer to incalculate complex systems is to disregard all the connections that aren't about human wealth-getting.

The problem isn't rationality, it's rationality restricted to deductive reasoning only, for policy purposes. But no one actually runs his or her life this way.

The worst depredations upon the environment, give or take a few, have all been inflicted in the last twenty-five years--the duration in which markets have gotten freer in the U.S., and the population explosion globally has been regarded a surmountable triviality. Most people do not know that there are 90% less songbirds everywhere than there were a hundred years ago, nor do they have the memory that half of that decline has taken place in twenty-five years. It is continuing. The blindness is almost breathtaking.

Eric Krieg writes:

>>The blindness is almost breathtaking.

I don't believe it. Count me as one of the blind.

I mean, maybe you are talking globally. But if you are focusing the US in your description of environmental degredation over the last 25 years, you couldn't be more wrong. The data on things like air and water quality don't bear that out.

I think that is why most people are "blind". They just don't see the environmental degredation in their daily lives.

The nice thing about predctions is that, eventually, the time frame in question comes to pass. We shall see if the enviros or the economists are right.

Lee A. writes:

Air and water quality have improved over the last 35 or so years almost entirely due to command and control policies, with penalties. And that’s only point-source air pollution--non-point source is worse. Meanwhile almost all rivers, lakes and streams are still polluted--do not drink from them!

Pollution permit trading has had mixed results so far. It has reduced point-source pollution and increased allocative efficiency, but monitoring and enforcements costs are the same or higher, dirty plants become more concentrated, market power can prevent entry of cleaner plants, and the whole system is controlled by corporations with an incentive to fraud, politically aided and abetted by the government.

For example: Bush has RELAXED the standard on mercury emissions, which bioconcentrate in aquatic life (high levels are now found in almost all fish and seafood, which testing, by the way, is as paltry as mad-cow testing. Be careful what you eat--it probably has NOT been tested!) Meanwhile the EPA and the Journal of Pediatrics both released studies this week showing the present mercury levels put one in six children at immediate risk for irreversible brain damage, to some degree, and lack of control of heart-rate.

Of course mercury in the air is invisible, so people just don’t see the degradation. And they just don’t know that childhood autism rates have been skyrocketing. (Ask any doctor.) And learning disabilities. And allergies to chemicals. And asthma...

Perhaps someone will say, “But mercury just hasn’t been connected to these things, so it must be something else, so we have to wait for the risk analyses (run by corporate scientists sworn to non-disclosure), and anyhow I feel just fine!...” And once again economists will prove their own worth by calculating allocative efficiency by disregarding the unknowns and unknowables.

Or perhaps not. Vernon Smith got the economics Nobel last year by the introduction of “ecological rationality” into the discussion. It’s about 35 years too late, but still... Perhaps the economists will be right after all, once they study ecology!

Eric Krieg writes:

>>Air and water quality have improved over the last 35 or so years almost entirely due to command and control policies, with penalties.

Air and water quality have improved because industry has done two things.

1) become more efficient (and thus, pollute less).

2) move the really dirty stuff offshore

As for Mercury, it is a misnomer to even talk about it. It isn't "mercury" in the environment. It is a compound of mercury. It could be methylmercury, ethylmercury, or perhaps some other type that I am not familiar with. Many bioaccumulate, but they have much different effects on humans.

Again, it is this kind of misinformation that is spewed about by the enviros that makes me suspicious of them. Quite frankly, I believe the economists because they are much more straightforward and much more rational.

Just because something is happening (autism, compounds of mercury in the environment) does not mean that there is any link. To assume so is unscientific.

With that said, I am perfectly prepared to do something about mercury compounds in the environment: massively expand the nuclear energy industry in this country so that coal plants are completely phased out.

Oh yeah, you enviros are against nuclear too. Pffft!

Lee A. writes:

Eric, you appear to confuse allocative and technological efficiency. But it doesn't matter--NEITHER of them NECESSARILY leads to less pollution! That was compelled by a society-wide mandate.

Meanwhile the idea that science should distinguish the different compounds of mercury and their effects is of course true. But the idea that science MUST BE RESTRICTED to rational analysis to make “narrow conclusions” is NONSENSE--you should study the science of complex systems! That study is quite large and advanced. (It is the place where part of economics itself must go.) That will lead you to, among other things, the precautionary principle. And you will find out that, among other things, it need not lead to economic or technical inefficiency.

With that said, I was happy to see Bush recently provide funding for more FUSION research. I think nuclear fusion is absolutely the way to go. Fission for me is a nonstarter---unless the federal government removed the ridiculously low cap on liability. Which would probably, by throwing it to the free market, prevent any more fission plants from being built!

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