David R. Henderson  

Bob Murphy's Critique of Bill Nordhaus

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In March, I had a post about William Nordhaus's article in the New York Review of Books, an article in which he responded to claims by 16 scientists who are global warming skeptics. That post gave rise to a lot of good comments.

Today Bob Murphy published an excellent critique of Nordhaus's piece. The whole thing is worth reading. I'll hit some highlights.

1. The last 10 years. Murphy catches Nordhaus in a rhetorical sleight-of-hand. Nordhaus had written:

The first claim [of the 16 scientists] is that the planet is not warming. More precisely, "Perhaps the most inconvenient fact is the lack of global warming for well over 10 years now."

Notice the rhetorical sleight-of-hand: Nordhaus attributes the claim that "the planet is not warming" to his critics, and then at least has the courtesy to follow-up with their actual statement that "the most inconvenient fact is the lack of global warming for well over 10 years now."

Those are different statements. Yes, it's easy to knock down opponents when Nordhaus is allowed to change their position. The 16 signatories to the WSJ piece never claimed that "the planet is not warming," relative to preindustrial times. No, what the 16 signatories to the WSJ piece claimed--and which is true, at least depending on which data set one uses--is that there has been no global warming in well over the last ten years. Indeed, look at Nordhaus' own graph: It shows that the current temperature deviation (of about 0.8 degrees Celsius) is the same value as it was back in the late 1990s. And yet Nordhaus somehow thinks this chart should embarrass his opponents.


By the way, a good editor of Nordhaus's piece would have caught this. Had I edited it, I would have insisted that Nordhaus admit that they're correct. My edit would have looked something like the following: "They're right about the last 10 years. The previous 100 years, though, are a different story. During that time, global temperatures rose by an average of about 0.8 degrees C." I'm guessing, though, that the 16 scientists weren't disputing this.

2. Whether actual global warming has been less than what the models predicted.

Notice what Nordhaus has done: When faced with a skeptic challenge that the climate models predict more warming than has actually occurred, Nordhaus retreated to defending the view that the prevailing suite of climate models explains past temperature movements better when they attribute a sizable impact to human activities, than if these computer models are run with natural influences ("forcings") alone.

These are entirely different claims. The WSJ scientists were not claiming that anthropogenic changes to the atmospheric composition have not given rise to an increase in the global average temperature, but that the increase has been less (considerably so) than that produced by the standard collection of climate models. It should come as little surprise that the climate models do not well capture the actual climate, because the climate is fiendishly complex, incompletely understood, and hence difficult to model. Consequently, it is reckless to go forth with trillion-dollar taxation schemes on the basis of our limited understanding. Until models are able to more accurately replicate the climate behavior of the observable past, it is foolish to think that they will produce reliable climate projections of an uncertain future.


3. Economic damage from global warming.

Nordhaus had written:

The question here is whether emissions of CO2 and other greenhouse gases will cause net damages, now and in the future. This question has been studied extensively. The most recent thorough survey by the leading scholar in this field, Richard Tol, finds a wide range of damages, particularly if warming is greater than 2 degrees Centigrade. Major areas of concern are sea-level rise, more intense hurricanes, losses of species and ecosystems, acidification of the oceans, as well as threats to the natural and cultural heritage of the planet.

But Murphy goes back to Tol's work and, on that basis, writes the following:
As Tol's diagram quite clearly indicates, the consensus of economic studies finds that global warming would be on net beneficial to human welfare, at least through 2C degrees of warming (and this is relative to the current baseline, not to preindustrial times). This is not at all what the innocent reader would have taken away from Nordhaus' description of Tol's findings.

4. The benefits or harm of taxes on carbon.
On this, Murphy quotes an earlier piece he wrote on Nordhaus's DICE model:
The 2007 DICE model contains simulations not just of the baseline (no controls) and the optimal carbon tax scenarios, but of many other policies as well. These calculations show that the dangers of an overly ambitious or inefficiently structured policy can swamp the potential benefits of a perfectly calibrated and efficiently targeted one (that is, the optimal carbon tax scenario). As table 4 indicates, Nordhaus's optimal plan yields net benefits of approximately $3 trillion (consisting of $5 trillion in reduced climatic damages and $2 trillion of abatement costs). Yet some of the other popular proposals have abatement costs that exceed their benefits. The worst is Gore's 2007 proposal to reduce CO2 emissions 90 percent by 2050; DICE 2007 estimated that Gore's plan would make the world more than $21 trillion poorer than it would be if there were no controls on carbon.

Murphy concludes:
Although leading climate economist William Nordhaus tries to cast himself as the messenger of objective science, his attempt to rebut the "global warming skeptics" is itself filled with misleading arguments. The actual situation is that the physical climate models have indeed predicted more warming than has actually occurred, while the economics literature casts serious doubts on the case for immediate government mitigation efforts.

UPDATE: I just noticed that David Friedman wrote a post highlighting Murphy's article. David also pointed out something I had missed. He wrote:
One point Murphy did not make but that is worth noting is that the benefits of climate control, on Nordhaus's own figures, are not very large. The optimal policy--for obvious reasons not likely to occur--is calculated to produce a net benefit of about three trillion dollars. That sounds like a lot of money--until one recognizes that it is spread over the entire world and about ninety years. That makes the annual benefit of the ideal policy about 33 billion dollar a year--roughly one percent of the current U.S. federal budget or one tenth of a percent of current world income.

Which suggests that, with a less ideal and more realistic policy, net costs are likely to be larger than net benefits.


Actually, $33 billion a year is one twentieth of a percent of current world income.


Comments and Sharing





COMMENTS (13 to date)
joshua writes:

Regarding 1, I find it interesting that for the last several years skeptics have been saying "the earth isn't warming anymore" and alarmists have been saying "yes it is, look at the surface temperature record!" but now the alarmist narrative has been shifting to "Ok, no the record doesn't show warming anymore but the heat is hiding in the ocean!" I wonder what will come next.

Bob Murphy writes:

Thanks for the kind words, David. One thing to be careful about: Nordhaus' calculation of net benefits of $3 trillion (for the optimal carbon tax) was a PDV of all future costs and benefits. So I don't think it's right to just divide that number by 90 and call it "benefits per year" the way Friedman did. (I'm going to post this at his blog too.)

I guess to do a benefits/year you'd want to take the $3 trillion figure and ask yourself how much could you consume per year, with a given interest rate, so that the $3 trillion is just depleted after the 90th year. But that's not what Friedman did, I don't think.

Peter writes:

Joshua,
"The heat is hiding in the ocean"
No, along with GHG's, global temps are also affected by factors that display temporary fluctuations but have no long term trend such as solar irradiance, ENSO, and volcanic aerosols. Over the last ten years these have contributed a -.21 deg C/dec (or -.13 depending on which temperature data set is used) effect on our climate. So, we should have experienced a large global cooling event if not for AGW.
This is why scientists always say you cannot make any definitive statement about temperature trends from such a short time frame like the ten year time frame the WSJ "scientists" use. For more info see the "cherry pickers guide to temperature trends" here, and tamino's comments here.

Also, Bob Murphy is a bit wrong when he says temperature has been below climate model predictions. In fact, they are well within the predicted margin of error. In fact scientists do yearly model to data comparisons, you can read the most recent here.

James writes:

Peter,

You write that "Bob Murphy is a bit wrong when he says temperature has been below climate model predictions." This doesn't make him a bit wrong. It either makes him entirely wrong (if temperatures were not below climate model forecasts as he claimed) or entirely right otherwise.

I can appreciate that the observed temperatures have been with the predicted margin of error. Since you probably know more about these models than I, maybe you can answer two questions for me: How much does the expected margin of error of these climate models increase as the forecast horizon increases? How big would the forecast error have to be for the optimal policy response to be no response.

Rufus writes:

"This is why scientists always say you cannot make any definitive statement about temperature trends from such a short time frame like the ten year time frame the WSJ "scientists" use. "

I think the point of this is that the Hockey Stick that has been used as a marketing tool to "prove" global warming is NOT a hockey stick if you include this last decade. And, since the models didn't predict this downturn, then what are they really telling us? If we go back 10 years, were the global warming scientists saying "well, it might go down for this next decade, but after that..." No they weren't.

So, more to the point, the fact that the models can backward predict better than the forward predict should simply be accepted as an inherent limitation of the models. They obviously have the historical data. They don't have the future data and apparently don't do a good job of predicting what that data will be. It is then quite dangerous to set public policy on the basis of these models.

muirgeo writes:

The most amazing thing on the subject of climate change is how market fundamentalist line up on the same side of skepticism. Its clearly analagous to religous fundamentalist lining up against evolution. Climate change needs to be wrong and or marginalized for the ideological to hold on to their beliefs. It is a threat to their beliefs. The fact is climate science is not the fraudulent endvevour they'd like to portray it to be. The biggest professional fraud ever foisted onto civilization is indeed the tenents of of the modern economic professional majority and its strict adherhence to market fundamentalism when histrory, reality snd logic show it clearly to be something that should be relagated to the waste bin of modern thinking. Its clearly nothing more than a ruse and a propaganda tool for entrenched powers to hold their positions. The "professionals" of this discipline no more than modern day vassels or preisst supporting the king or pope. So I laugh when I see these clearly mis-directed true traders of fraud attempting to critic the real scince of climate change.

Dom writes:

Muirgeo:

Considering how often the statement "The world is warming" leads to "We need a statist economy with strict controls and high taxes", it seems that the general thrust of your argument goes the other way. Much -- but not all -- of the literature on climate change is a thinly disguised attempt to enforce the type of economy that its adherents have always wanted.

Urstoff writes:

Peter, Murphy didn't say any such thing. The paper he's quoting (and thus, I assume, Murphy) asserts that the temperature has been below the average of the various models, and that it is trending towards the edge of the confidence interval. Hence the quote "on the verge of failing".

Richard Tol writes:

It's easy to misinterpret Figure 1 from Tol (2009).

Initial warming is indeed likely to be beneficial: CO2 fertilization of crops, reduced spending on heating homes, and fewer cold-related deaths are the main factors.

However, totals do not matter. The incremental impact turns negative around 1.2K. If we were able to control climate, we would warm the planet by 1.2K and stop there. However, the momentum of the climate system and the energy system is such that, if you accept the mainstream view of the workings of the climate, we cannot avoid 1.2K warming, or 2.0K warming for that matter.

The initial benefit is thus a sunk benefit: We will enjoy it regardless of what we do.

Tracy W writes:

muirgeo - to reduce global warming while still maintaining as good as living standards as possible compatible with that goal, we need markets.
It's the Communist countries that had the worst environmental records, and the least-efficient industrial plant. Europe achieved large reductions in greenhouse gas emissions just by closing a bunch of ridiculously-economically-inefficient Communist-era industrial plants.

You also blithely ignore the long history of entrenched powers interfering with markets, to protect their entrenchment, through such factors as monopolies, tariffs, etc.

Shouldn't you do some investigating into reality, before flinging around accusations of professional fraud and religious fundamentalism?

stickman writes:

In addition to Richard Tol's excellent comment above, I have a detailed response to Bob's article here. A summary of sorts here.

Mark Bahner writes:
However, the momentum of the climate system and the energy system is such that, if you accept the mainstream view of the workings of the climate, we cannot avoid 1.2K warming, or 2.0K warming for that matter.

The Remote Signal Systems (RSS) and University of Alabama Huntsville (UAH) analyses of the temperature in the lower troposphere (TLT) warming has been about 0.14 degrees Celsius per decade. If that rate were to continue, it will take almost 90 years to get up to 1.2 degrees Celsius relative to the present. From the Wikipedia satellite temperatures article:

To compare to the trend from the surface temperature record (approximately +0.07 °C/decade over the past century and +0.17 °C/decade since 1979) it is most appropriate to derive trends for the part of the atmosphere nearest the surface, i.e., the lower troposphere. Doing this, through January 2012:

RSS v3.3 finds a trend of +0.137 °C/decade.
UAH v5.4 finds a trend of +0.136°C/decade

Why not wait another 30-40 years, at mininum, to see whether that rate increases, decreases, or remains the same?

Additionally, if it indeed takes ~90 years to warm another 1.2 degrees Celsius, all the economic analyses that base costs and benefits on much faster warming will be seen to be skewed towards benefits.

Mark Bahner writes:

Hi,

Sorry, I don't want to wait for the approval of the Wikipedia quote. Here's what I wrote, minus that quote

However, the momentum of the climate system and the energy system is such that, if you accept the mainstream view of the workings of the climate, we cannot avoid 1.2K warming, or 2.0K warming for that matter.

The Remote Signal Systems (RSS) and University of Alabama Huntsville (UAH) analyses of the temperature in the lower troposphere (TLT) warming has been about 0.14 degrees Celsius per decade. If that rate were to continue, it will take almost 90 years to get up to 1.2 degrees Celsius relative to the present. See the Wikipedia satellite temperatures article.

Why not wait another 30-40 years, at mininum, to see whether that rate increases, decreases, or remains the same?

Additionally, if it indeed takes ~90 years to warm another 1.2 degrees Celsius, all the economic analyses that base costs and benefits on much faster warming will be seen to be skewed towards benefits.

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