This post is Part III of Richard Tol's look at Chapter 11 of the IPCC AR4 WGIII. Part I is here. Part II is here.Richard Tol is a research professor at ESRI in Ireland, one of the top 175 economists in the world and a contributor to the work of the Intergovernmental Panel on Climate Change (IPCC), where his work is widely cited. In this guest post, the third of a series, Richard takes a look at parts of the IPCC AR4 Working Group III, which has largely escaped scrutiny in recent months. In this Part III he discusses "cherry-picked results" and "misleading" tables.
Please have a look at Richard's full discussion below. If you have questions or criticisms of Richard's analysis please submit them in the comments, I am sure that Richard will be happy to engage.
Selective Results in the SPM of IPCC AR4 WGIII
Table SPM.4 summarizes the costs of emission reduction in 2030. The title comes with a footnote: “GDP reduction would increase over time in most models after 2030”. Deep cuts in emissions would come after 2030, and the real costs of emission reduction would therefore be felt later. The cost estimates in Table SPM.4 are low by construction, not because emission reduction is cheap.
Table SPM.6 shows the costs of emission reduction in 2050. This table does not warn that the bulk of emission reduction and its costs will be in the second half of the century. There is no table on the costs of emission reduction in 2100.
Tables SPM.4 and SPM.6 show the reduction in economic growth for three alternative targets, averaged over a number of studies. For 2050 (SPM.6), the results are a loss of economic growth of 0.05% per year if greenhouse concentrations are stabilized between 590-710 ppm CO2eq; and 0.10% if the target is between 535-590 ppm CO2eq. That is, costs double if the target becomes considerably more stringent. However, the economy slows down by 0.12% per year if the target is between 445 and 535 ppm CO2eq. Although the target becomes substantially more stringent, costs increase by only a little bit!
This is an amazing result. The models assessed by the IPCC all have that abatement costs grow and accelerate as targets become more stringent. Typically, doubling the rate of emission reduction would lead to a quadrupling of costs. The cost curve in SPM.6 (and SPM.4) bends the wrong way: Incremental costs fall as policy become stricter.
This was not picked up by the referees of the SPM because neither Table SPM.4 nor Table SPM.6 appeared in the drafts circulated for comment.
This travesty is partly explained in footnote g: “The number of studies that report GDP results is relatively small and they generally use low baselines.”
Table SPM.5 specifies the numbers: 118 studies estimated the costs of stabilizing atmospheric concentrations between 590 and 710 ppm CO2eq; 21 between 535 and 590 ppm CO2eq; and 24 between 445 and 535 CO2eq.
There are a large number of models that estimate the costs of emission reduction. Some have high costs, and others have low costs. Modelers self-censor their results, or are censored by referees and editors. If a relatively lenient target implies already relatively high costs, then there is no reason to show the results for more stringent targets. More stringent targets would lead to unacceptably high costs. Why waste journal pages on unrealistic scenarios?
This implies that only the “cheap models” ran the most stringent scenarios. The “expensive models” did not report the results, did not try to run these scenarios, or tried and failed. Clarke et al. (2009) investigate this matter, as do Tavoni and Tol (2009).
Furthermore, footnote g reveals that even the “cheap models” could only meet the most stringent targets if the no-policy scenario has benignly low emissions to start with.
In other words, the numbers in Tables SPM.4 and SPM.6 cannot and should not be compared to one another. The results for the relatively lenient targets are representative for the literature. The results for the relatively stringent targets suffer from selection bias.
Tables SPM.4 and SPM.6 cherry-pick results. These tables are misleading.
28 comments:
Dr. Tol, thank you for stepping forward. How does this happen with a robust peer-review process?
-1-Craig
These things are unlikely to happen when the peer-review process is robust; and when they do, there'd be an erratum soon after publication.
Richard:
You have more faith in the likelihood of a robust peer review process than I believe is warranted by the empirical evidence. See http://www.americanscientist.org/science/pub/everything-is-dangerous-a-controversy
Hi Richard,
You write, "Furthermore, footnote g reveals that even the “cheap models” could only meet the most stringent targets if the no-policy scenario has benignly low emissions to start with."
This problem could be solved if the IPCC moved to a more scientifically justifiable way of predicting future emissions. Rather than having a bunch of scenarios that go every which way, the IPCC could come up with a probability distribution for emissions over the course of the century. That is, the IPCC should estimate the most likely emissions of CO2 each year throughout the 21st century for the "no policy" option.
For example, suppose the A1B scenario was chosen as the "most likely" (50% probability of being too high, 50% probability of being too low, in every year). Then the emission reduction costs would be calculated off the A1B emissions, unless otherwise stated.
The plausibility some of the emissions scenario's in table 1.7 in Chapter 1 of WG3 seems implausible to me. Specifically A1F1,A2 and A1B.
The WEO projects a 45% increase in fossil fuel usage between now and 2030, Exxon-Mobil projects a 35% increase. Which puts us in the A1T/B1/B2 scenario's.
http://www.ipcc.ch/pdf/assessment-report/ar4/wg3/ar4-wg3-chapter1.pdf
Richard, thank you for your analysis. This is really where we need to be focusing the debate and having some pretty open and honest discussions. If this were a movie, this would be the part where the salesman (or politician, or kid trying to pull a fast one on his parents, etc.) mumbles quickly under his breath while coughing or pretending his/her phone signal is breaking up ;-).
-4-MarkBahner
I agree that scenarios should be probabilistic. The powers that have monopolised the IPCC scenarios disagree.
In a recent speech Vaclav makes a much simpler and more convincing argument, because it is so simple:
"In its model simulations, the IPCC suggests that – because of higher temperatures – the world GDP in the year 2100 will be 2.9% lower than without any warming. I repeat, only 2.9% if we do nothing and let the warming – predicted by the IPCC – continue. The same models suggest that the GDP per capita in the developed countries will be eight times higher than now and in the developing countries about five times higher than that of the developed world today.
These figures are not mine, these are the figures of the leading exponents of the global warming doctrine. The question must be therefore raised: should we drastically limit CO2 emissions today by 20, 30, 50, or 80% and, thereby, abandon our way of life for the sake of such a small effect considering that the future generations will be far better off than we are today? My answer is that 2.9% of the future GDP is a minor loss."
Does he have his facts right? Maybe someone else can comment.
A1B seems wildly optimistic (or pessimistic depending on your point of view) about future energy use. It has natural gas use at 135 trillion cu.ft./year in 2010 and 274 in 2030. The EIA puts it at 112 in 2010 and 152 in 2030. Oil is at 94 Mbbl/day in 2010 (which isn't likely) and 107 in 2030. The 2030 number is the same as the EIA estimate, but the EIA estimate includes 13.4 Mbbl/day of unconventional (tar sands, shale, gas-to-liquid, coal-to-liquid, biofuels and extra heavy oil) liquid fuels in 2030. So conventional production would have to be 93.6 Mbbl/day in 2030. The price of oil is going to have to go way above $80/bbl in current dollars to have any hope of producing at that level.
"I agree that scenarios should be probabilistic. The powers that have monopolised the IPCC scenarios disagree."
I have previously pointed out that if Science magazine published the 2001 Wigley and Raper paper, "Interpretation of High Projections for Global-Mean Warming," then Science should also be willing to publish a follow-up paper that improves on Wigley and Raper's crude (and obviously false) assumption that each scenario had equal probability of occurrence.
http://www.sciencemag.org/cgi/content/abstract/293/5529/451
That is, Science should be willing to publish such a paper if Science is interested in science.
P.S. It would be curious how (or *if*) the IPCC would refer to such a paper in their fifth assessment report, since it would clearly be an improvement on the bogus scenario analysis system. My guess is that the IPCC would not mention the paper, or would simply mention it but not change their scenario analysis system at all.
I wonder Richard, are the powers that monopolise the IPCC scenarios still confused about the difference between market exchange rates and purchasing power parity when comparing real quantities (like emissions)? That assume convergence will lift Africa out of its current economic malaise with hitherto unheard of growth rates (and consequent emissions growth)?
Consistent with Dr. Tol's 'what the he??' findings on the economics there is this bit of news on Antarctic sea ice: http://www.masterresource.org/2010/03/yet-another-incorrect-ipcc-assessment-antarctic-sea-ice-increase
== "Somehow, the IPCC specialists assessed away a plethora of evidence showing that the sea ice around Antarctica has been significantly increasing—a behavior that runs counter to climate model projections of sea ice declines—and instead documented only a slight, statistically insignificant rise.
How did this happen? The evidence suggests that IPCC authors were either being territorial in defending and promoting their own work in lieu of other equally legitimate (and ultimately more correct) findings, were being guided by IPCC brass to produce a specific IPCC point-of-view, or both.
The handling of Antarctic sea ice is, unfortunately, not an isolated incident in the IPCC reports, but is simply one of many examples in which portions of the peer-reviewed scientific literature were cast aside, or ignored, so that a particular point of view—the preconceived IPCC point of view—could be either maintained or forwarded." ==
Skippy said... 11
"That assume convergence will lift Africa out of its current economic malaise with hitherto unheard of growth rates (and consequent emissions growth)?"
The Kyoto Protocol was an attempt to cap CO2 emissions in the industrialized world.
If you cap CO2 emissions then you have to cap steel production and almost all of your energy intensive industries.
The only way for those industries to prosper is to move someplace without caps. China now produces more steel then the US,EU,Japan and Russia combined.
Luke Lea (8) asks, regarding the Vaclav Klaus analysis: "Does he have his facts right? Maybe someone else can comment."
Indur Goklany has written on this subject. Goklany's work essentially confirms what Havel is saying: the people of 2100 will be much better off than we are today, even if the world is 4 degrees Celsius warmer:
http://masterresource.org/?p=1966
I've written on economic growth in the 21st century. It's likely to be much higher than the IPCC predicts:
http://markbahner.typepad.com/random_thoughts/2004/09/second_thoughts.html
-8-Luke
My take is here: http://ideas.repec.org/p/esr/wpaper/wp255.html (since published in Journal of Economic Perspectives)
Klaus' 2.9% is in the right ballpark. Klaus' conclusion is also correct. You need to go to extraordinary lenghts to justify stringent emission reduction soon with a cost-benefit analysis.
That has been known since Nordhaus' 1991 paper in the Economic Journal. There are a good few papers that try but fail to knock over Nordhaus' basic conclusion, but the IPCC has yet to highlight this robust result.
Richard Tol said... 15
"You need to go to extraordinary lenghts to justify stringent emission reduction soon with a cost-benefit analysis."
What if one costs in costs of conflicts due to resource scarcity?
I would note from recent news that the British have gotten themselves into a shouting match with the Argentinians over the Falklands. Something about royalties from oil. The Ukraine, with one of the larger piles of coal in Europe seems a bit politically wobbly and the Middle East has been in a near constant state of conflict for 30+ years.
-16-Harry
Prediction: This paper will be ignored by the IPCC in the Fifth Assessment Report.
http://www.springerlink.com/content/e78581pv740rx500/?p=28375a9adee84580918a57ce891985a0&pi=0
Richard,
"You need to go to extraordinary lenghts to justify stringent emission reduction soon with a cost-benefit analysis."
"fail to knock over Nordhaus' basic conclusion, but the IPCC has yet to highlight this robust result."
Would you agree that in the 20 years or so since Nordhaus's paper that you reference, a general consensus has emerged within the discipline that 'traditional' CBA's are ill-equipped to provide 'robust' results wrt to climate change? In particular, that there is no universally accepted ways to establish key parameters that have profound impacts on the results (e.g. intra and intergenerational equity, risk aversion, valuation of non-market goods, etc.).
Based on your writings, I suspect you're more of a traditionalist than Ackerman, for example, but I'd be interested in hearing how you think climate change economics as a whole can usefully and honestly communicate with policy makers and the general public given the profoundly normative/subjective choices that are inherent to these types of analyses.
Personally, I think communication in most cases would be better off (and more honest) if one simply reflected on the sign and the magnitude of the cost/benefit results as that would more accurately reflect the true nature of one's confidence in the analysis.
17 Tol,
Great paper. I enjoyed reading it, not least since I am a "Human ecologist" (the study of the interaction of nature and society) in a department of "International relations".
I can see at least 2 reasons to why IPCC might ignore the paper. First, Political reasons, second, it doesn´t fit the IPCC structure, since IPCC separate nature (WG1 and WG2) from humans (WG3). Your paper integrates nature and humans in both time and space.
Why do you think IPCC will ignore it?
-18-Marlowe
See http://www.economics-ejournal.org/economics/journalarticles/2009-24/view
We can get any result we want if we do away with democracy and appoint a philosopher-queen.
If, on the other hand, we respect people's preferences, CBA would favour a modest climate policy.
Richard,
Whose preferences are you respecting exactly? People in the North who won't die of cold or people in the south who will die from heat. In your work you seem to favour the former :).
If CBA were as cut and dry as you seem to suggest then why is there such a large range in the literature about the social cost of carbon (e.g. 0-$300)?
IMO the issue is not one of the IPCC cherry picking one set of results over another. It's that the there are so many uncertainties and normative assumptions that are used in these models (including FUND) as to make the results virtually meaningless beyond describing the sign and relative magnitude of the cost/benefit.
a form of intellectual masturbation if you will.
Fyi,
Readers who are interested in a fairly accessible discussion about integrated assessement models may want to take a look here:
http://www.pewclimate.org/docUploads/mastrandrea-calculating-benefits-climate-policy-12-22-09.pdf
"The same models suggest that the GDP per capita in the developed countries will be eight times higher [in 2100] than now and in the developing countries about five times higher than that of the developed world today."
The only way this is possible is when humankind conquers other planets. Where will all the resources come from to make all of this possible? Ten billion people enjoying the current Western lifestyle and standard of living? You have got to be kidding me.
The main problem in my opinion with all of these economic projections wrt AGW is that all of them are based on the mantra of GDP measurements. The core of the neoclassical economic doctrine that has been dominating economic thinking for many decades now, is that economic growth is infinite, whereas it is actually this thinking that is causing all the problems, from financial bubbles to resource depletion, and from ecological degradation to social unrest.
WGIII is a joke because current economic thinking is actually wishful thinking that is totally separated from the biophysical reality and the laws of thermodynamics. Endless, exponential growth is not possible in a finite system, period. Things that keep growing endlessly and exponentially, end up killing their host, like cancer.
Nothing will be solved as long as the neoclassical economic theory retains its monopoly (talking about a 'monopolised power'). A sustainable society will never come about, if this root problem is not tackled. WGIII is only about one of the symptoms (AGW) of this root problem. The IPCC WGIII and policy debate in general should be about transforming economic thinking and thus work towards a sustainable society, not about how to 'green' our overconsumption.
The global(ized) economy and social structures will collapse a long time before 2100 if the religion of 'economic growth is infinite' remains the dominant force in our societies. Wait a minute, maybe that's the solution. Keep buying stuff you don't need, preferably with borrowed money, everyone!
So there, I've said it. ;-)
"The only way this is possible is when humankind conquers other planets. Where will all the resources come from to make all of this possible? Ten billion people enjoying the current Western lifestyle and standard of living? You have got to be kidding me."
Resources don't make countries rich. If resources made countries rich, Russia, Iraq, Iran, etc. would be rich.
Free human minds make countries rich. That's why Japan, Hong Kong, and Singapore are rich. That's also why economic growth in the 21st century is likely to dwarf economic growth in the 20th century, as computers equal and then surpass the human mind in capability:
http://markbahner.typepad.com/random_thoughts/2005/11/why_economic_gr.html
Mark, thanks for the link. I hope you're right!
Mark, I've read your link and I'm pleased to see that you agree humankind would have to go out into space and enlarge the 'finity' of its system in order to keep growing. I base that on this quote of yours:
I would like to see Mars terraformed so that it is possible for humans and other life from earth to live there in the same comfort as they can here on earth. That would require diverting hundreds or thousands of comets to create oceans. Which would require fusion rockets. Maybe it would be even be good to have a (fusion-powered) artificial sun revolving around Mars. Suppose 1 million people on Earth share my desire. Well, if each of us had $2 billion, and was willing to give $1 billion to get our desire of a terraformed Mars put in place, we would have 1 billion x 1 million = $1 QUADRILLION dollars to carry out that desire.
That just sounds... fantastic.
"Mark, I've read your link and I'm pleased to see that you agree humankind would have to go out into space and enlarge the 'finity' of its system in order to keep growing."
No, that is 180 degrees opposite to what I think.
Very few people even think about what wealth is. Wealth is not "things". Bill Gates has a net worth of $60 billion. My net worth is about 100,000 times less than that. That doesn't mean Bill Gates consumes 100,000 times more "things" than I do.
Wealth is essentially a measure of how much one is able to do what one wants. For example, Bill Gates doesn't have to work 9 to 5 to get by. I do. If Bill Gates becomes seriously ill, and has $1 million in medical bills, it means nothing to him from a monetary standpoint. But such a bill would be greater than my net worth. Similarly, if Bill Gates wants to get world-class radial keratotomy surgery to improve his eyesight to 20/20 or better, and it costs $10,000, that means nothing to him. To me, it's more than twice what my car cost.
Since wealth is really just a measure of whether a person can do what he or she wants, economic growth can be entirely de-coupled from materials. There is no need to go outside earth in order for the wealth of every person on earth to be equal to the wealth of Bill Gates.
"Well, if each of us had $2 billion, and was willing to give $1 billion to get our desire of a terraformed Mars put in place, we would have 1 billion x 1 million = $1 QUADRILLION dollars to carry out that desire."
"That just sounds... fantastic."
Yes, it sounds unbelievable. But consider this: in 1826, Thomas Jefferson and John Adams both died. That's 184 years ago. What would they have said if you'd shown them a 50+ inch LCD TV, with video footage of the NYC skyline and streets (including at night), the subways, and JFK airport?
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