Jeremy Grantham, one of numerous investment advisors that occasionally like to take to the web and expound their personal political views for an audience with whom their investment acumen has gained them respect, dishes on the global warming debate with a summary of his beliefs (All you need to know about global warming in five minutes).  I can tell you all you need to know about it in one sentence:  It is a religion, not a science.  I’m, of course, not new to this idea.  The late Michael Crichton, a medical doctor turned novelist, unapologetically assailed the science of global warming alarmists as a religion well before I had such a thought in my head.  But Grantham seems to be making the news with his, ahem, “logical analysis” so I’m going to throw his logic right back in his face.  Here goes:

Everything You Need to Know About Global Warming in 5 Minutes

1) The amount of carbon dioxide (CO2) in the atmosphere, after at least several hundred thousand years of remaining within a constant range, started to rise with the advent of the Industrial Revolution.  It has increased by almost 40% and is rising each year.  This is certain and straightforward.

~Indeed, carbon dioxide has been rising in the last couple of hundred years.  The question, though, is its relationship to global temperature.   Which is to say, we need to know what is the causative relationship between carbon dioxide and earth’s climate?  It is often said that correlation does not equal causation.  Yet, without correlation, we can disprove causation.  If we get “A” and “B” together, we can investigate to see if A causes B or if B causes A.  If we do not see A and B together, then we can assume that neither causes the other. 

Carbon dioxide in the atmosphere has been increasing for the last two hundred years.  What do climate temperature records show?  Temperature has fluctuated all over the map.  See, the graphs of temperature fluctuations just since 1979 posted here.  The graphs use global satellite data from the University of Alabama at Huntsville.  The point is–carbon dioxide in the atmosphere has increased, according to observations at Mauna Loa Observatory in Hawaii, steadily every single year.  Temperatures, not so.

2) One of the properties of CO2 is that it creates a greenhouse effect and, all other things being equal, an increase in its concentration in the atmosphere causes the Earth’s temperature to rise.  This is just physics.  (The amount of other greenhouse gases in the atmosphere, such as methane, has also risen steeply since industrialization, which has added to the impact of higher CO2 levels.)

Correlation has not even been established.  Inferring causation is nothing more than idle speculation.  See answer to number one, above.  Throwing in that old modeling rubric of “all other things being equal” hardly saves the day.  Even where all other things are equal, as is never the case regarding a system as dynamic as the climate of the entire earth, we don’t have correlation.  No scientist would accept a situation such as this as evidence for causation.  Always be alert when anyone says something like “this is just physics”.  It will usually be from someone not well-versed in either physics or logic.

3) Several other factors, like changes in solar output, have major influences on climate over millennia, but these effects have been observed and measured.  They alone cannot explain the rise in the global temperature over the past 50 years.

And why can’t they?  Graphing sunspots  to temperature fluctuations yields a fairly tight correlation.  Sunspot activity is highly correlated to increased surface temperatures.  See here.

4) The uncertainties arise when it comes to the interaction between greenhouse gases and other factors in the complicated climate system.  It is impossible to be sure exactly how quickly or how much the temperature will rise.  But, the past can be measured.  The temperature has indeed steadily risen over the past century while greenhouse gas levels have increased.  But the forecasts still range very widely for what will happen in the future, ranging from a small but still potentially harmful rise of 1 to 2 degrees Fahrenheit to a potentially disastrous level of +6 to +10 degrees Fahrenheit within this century.  A warmer atmosphere melts glaciers and ice sheets, and causes global sea levels to rise. A warmer atmosphere also contains more energy and holds more water, changing the global occurrences of storms, floods, and other extreme weather events.

~First, the temperature has not “steadily risen”.  Such a statement just ignores the facts, see the answer to number one, above.  Second, “forecasts range” and “potentially disastrous” are not scientific descriptions of experimental evidence.  They are just idle speculations, more attuned to a mythological, rather than a scientific perspective.  Third, a warmer atmosphere may, or may not contain more water.  Its effect on “extreme weather events” is nothing more than mere speculation.

5) Skeptics argue that this wide range of uncertainty about future temperature changes lowers the need to act: “Why spend money when you’re not certain?”  But since the penalties can rise at an accelerating rate at the tail, a wider range implies a greater risk (and a greater expected value of the costs.)  This is logically and mathematically rigorous and yet is still argued.

~”Since the penalties can arise at an accelerating rate at the tail”  presumes an unproved postulate.  Even if the world is getting warmer, there is no way we can know today what “penalties” may arise from it.  “At the tail” is a particularly obnoxious use of financial jargon which I’m sure Grantham expects will touch the shriveled crocodilian hearts of all his followers.  It alludes to a concept in finance about the risky “tail”–the area of outcomes not modeled by the physicists on Wall Street because their occurrence seems so outlandish as to be unimportant.  Sort of like the “tail” of housing price declines were not figured into the financier’s models when constructing subprime CDO’s.

6) Pascal asks the question: What is the expected value of a very small chance of an infinite loss?  And, he answers, “Infinite.”  In this example, what is the cost of lowering CO2 output and having the long-term effect of increasing CO2 turn out to be nominal?  The cost appears to be equal to foregoing, once in your life, six months’ to one year’s global growth – 2% to 4% or less.  The benefits, even with no warming, include: energy independence from the Middle East; more jobs, since wind and solar power and increased efficiency are more labor-intensive than another coal-fired power plant; less pollution of streams and air; and an early leadership role for the U.S. in industries that will inevitably become important.  Conversely, what are the costs of not acting on prevention when the results turn out to be serious:  costs that may dwarf those for prevention; and probable political destabilization from droughts, famine, mass migrations, and even war.  And, to Pascal’s real point, what might be the cost at the very extreme end of the distribution: Definitely life changing, possibly life threatening.

~This is nothing but logical mumbo-jumbo.  There is no evidence that a)  the costs to ameliorate warming by reducing greenhouse gas emissions is anywhere near the range proffered; b) that the prescriptions would do anything to alleviate the supposed problem.  Further, to say that re-engineering an economy would create jobs is tantamount to saying that bulldozing all the houses and office buildings now in existence would help the construction industry.  Yes, it would, but it would also come at a much greater cost to society than leaving the houses and offices standing and finding something else to do with our spare laborers.  Just ignore what is said anytime someone seriously throws around words like “probable political destabilization” and “possibly life-threatening”.  These are not the words of good, skeptical scientist, but those of speculators and mythologizers.

By the way, Pascal was innately aware of the limits of our abilities:

        For after all what is man in nature? A nothing in relation to infinity, all in relation to nothing, a central point between nothing and all and infinitely far from understanding either. The ends of things and their beginnings are impregnably concealed from him in an impenetrable secret. He is equally incapable of seeing the nothingness out of which he was drawn and the infinite in which he is engulfed.  (From Pascal’s Pensees #72.)

~Does this sound like a man who would not recognize man’s immense hubris in believing that driving an automobile will destroy the cosmic balance of the earth’s climate?

7) The biggest cost of all from global warming is likely to be the accumulated loss of biodiversity.  This features nowhere in economic cost-benefit analysis because, not surprisingly, it is hard to put a price on that which is priceless.

~Is he invoking the Mastercard commercials as authority?  What evidence is cited to show global warming would cause loss of biodiversity?  There was far less biodiversity in North America and Europe about 18,000 years ago, before the last ice age gave way to the present warming trend.  Animals and plants thrive on warmth.  It is very hard for much more than microbes to survive on the surface of a glacier.

8) A special word on the right-leaning think tanks:  As libertarians, they abhor the need for government spending or even governmental leadership, which in their opinion is best left to private enterprise.  In general, this may be an excellent idea. But global warming is a classic tragedy of the commons – seeking your own individual advantage, for once, does not lead to the common good, and the problem desperately needs government leadership and regulation.  Sensing this, these think tanks have allowed their drive for desirable policy to trump science.  Not a good idea.

~The tragedy of the commons is a principle in economics going back to Adam Smith, and it is clearly one that is only resolvable by government fiat.  Tragic commons today include everything from the pollution in the air (that knows no borders) to blue-fin tuna in the sea.  These problems scream for coordinated government solutions.  Unfortunately for Grantham, the world’s climate, though a potentially tragic commons, as yet, is not.  Let’s solve the problems we know, like Chinese factories polluting all the world’s air and Japanese trawlers decimating the stocks of blue-fin tunas.  I’d feel much better if we’d manage the real and immediate tragedies.  Forget global warming.  We don’t even know its real.  But we do know that blue-fin tuna will be fished to death if something is not done.

9) Also, I should make a brief note to my own group – die hard contrarians.  Dear fellow contrarians, I know the majority is usually wrong in the behavioral jungle of the stock market.  And Heaven knows I have seen the soft scientists who lead finance theory attempt to bully their way to a uniform acceptance of the bankrupt theory of rational expectations and market efficiency. But climate warming involves hard science. The two most prestigious bastions of hard science are the National Academy in the U.S. and the Royal Society in the U.K., to which Isaac Newton and the rest of that huge 18th century cohort of brilliant scientists belonged.  The presidents of both societies wrote a note recently, emphasizing the seriousness of the climate problem and that it was man-made.  (See the attachment to last quarter’s Letter.)  Both societies have also made full reports on behalf of their membership stating the same.  Do we believe the whole elite of science is in a conspiracy?  At some point in the development of a scientific truth, contrarians risk becoming flat earthers.

~But you see, there are no scientific truths being developed.  Please don’t cite Isaac Newton’s membership three hundred years ago in a scientific society to give it legitimacy today.  Tell me what the Royal Society and National Academy has done lately, and if all they have done is jump on the alarmist bandwagon, I’d say Sir Newton would be justifiably rolling in his grave.  Rolling out the old comparison of skeptics of global warming as flat-earthers (which, by the way, mankind knew long before Columbus’ voyage to America that the earth was round–we could see it in lunar eclipses) not only has nothing to do with the science, but is really poor argumentation.  Please.  Come up with something more original.

10) Conspiracy theorists claim to believe that global warming is a carefully constructed hoax driven by scientists desperate for … what?  Being needled by nonscientific newspaper reports, by blogs, and by right-wing politicians and think tanks?  Most hard scientists hate themselves or their colleagues for being in the news.  Being a climate scientist spokesman has already become a hindrance to an academic career, including tenure.  I have a much simpler but plausible “conspiracy theory”: that fossil energy companies, driven by the need to protect hundreds of billions of dollars of profi ts, encourage obfuscation of the inconvenient scientifi c results.

~Putting up a straw man such as “conspiracy theorists” dismisses the scientific argument against global warming and makes the debate insoluble.  It is now in the realm of mythology.  The idea that being a scientist supporting global warming is a hindrance to one’s career is laughable.  Scientists make big money by instilling fear and then offering solutions.  Headlines mean money and attention.  Money and attention, goods worth pursuing in themselves, brings accolades amongst the scientific community. 

11) Why are we arguing the issue?  Challenging vested interests as powerful as the oil and coal lobbies was never going to be easy.  Scientists are not naturally aggressive defenders of arguments.  In short, they are conservatives by training:  never, ever risk overstating your ideas.  The skeptics are far, far more determined and expert propagandists to boot.  They are also well funded.  That smoking caused cancer was obfuscated deliberately and effectively for 20 years at a cost of hundreds of thousands of extra deaths.

We know that for certain now, yet those who caused this fatal delay have never been held accountable.  The profits of the oil and coal industry make tobacco’s resources look like a rounding error.  In some notable cases, the obfuscators of global warming actually use the same “experts” as the tobacco industry did!  The obfuscators’ simple and direct motivation –  making money in the near term, which anyone can relate to – combined with their resources and, as it turns out, propaganda talents, have meant that we are arguing the science long after it has been nailed down.  I, for one, admire them for their P.R. skills, while wondering, as always: “Have they no grandchildren?”

~Is there any point in responding logically to this diatribe?  It is the essence of emotion played as reasoned argument.  Scientists are conservative?  Really?  So, they never manipulate data to achieve results that they hoped their experiments would yield?  Forgetting the reality of the e-mail scandal, how many scientists have ever stood before a podium to announce the results of their experiments to say, “We thought our research would reveal “x” problem was caused by “y”, but instead we found that “x” problem didn’t even exist”?

12) Almost no one wants to change.  The long-established status quo is very comfortable, and we are used to its deficiencies.  But for this problem we must change.  This is never easy.

~Not disputable.  It’s simple physics, as Grantham might say, that inertia causes systems to resist change.  But other things cause resistance to change as well.  Such as bogus science that would necessitate upending our whole way of life on the possibility of something bad happening that has not even been proved to exist.

13) Almost everyone wants to hear good news.  They want to believe that dangerous global warming is a hoax.  They, therefore, desperately want to believe the skeptics.  This is a problem for all of us.

~People need fear.  They rather wish to believe that the world is ending unless we do something.  It makes them feel kinship with their fellow earthlings and allows them to marvel at their own importance when they can believe that our collective actions are capable of changing the climate of the whole earth.  Good news doesn’t make headlines.  Fear makes headlines.  During the Cold War, Americans gravitated around the fear of nuclear holocaust.  After it was over, they concocted all sorts of things to provide the fear they crave more than chocolate.  From asteroids to terrorists to, ultimately, global warming alarmism, we have lurched from fear to fear since the end of the Cold War.  Fear is the defining emotion for collective human behavior.   

Postscript
Global warming will be the most important investment issue for the foreseeable future.  But how to make money around this issue in the next few years is not yet clear to me.  In a fast-moving field rife with treacherous politics, there will be many failures.  Marketing a “climate” fund would be much easier than outperforming with it.

~This I can agree with.  Grantham should stick to investment advice, and leave the politics and global warming theologizing to others.

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