It is time to stop quivering in our boots in pointless fear of the future and just roll up our sleeves and build it.
- Ray Pierrehumbert

Friday, October 31, 2008

Coherence

Eli is going on about incoherence of the denialists . Things Break had a sighting in the comments here recently:
In reading past comments at Dot Earth, or by either Spencer or Christy (I can't remember which), I don't understand where the myth that those who seek to avoid the worst aspects of climate change are callous towards the rights of those in poorer nations comes from.

A few years back, the smear was that we wanted to funnel the hard-earned tax dollars of white Christians to the brown third world as part of a massive Red Conspiracy. I'm curious as to when this newer meme started and why it seems to have taken hold despite it's obvious conflict with the older one.
I have been doing some thinking about how to tell real experts from fake experts. A single sound bite (on a topic on which the listener is inexpert) reveals nothing. You have to look at the whole record of the speaker and the speaker's close allies to determine who is an expert and who is playing one on TV. The "tell" is coherence. The core problem is that people who pay insufficient attention and people who don't themselves understand coherence have influence, especially in a democracy.

Many people don't seem to understand that ideas have to be tested for coherence and have to pass the test. Refusing to do interviews is not a laughing matter; it simply declares immunity from any coherence test at all.

Jane Smiley has a terrifying rumination about the incoherence of the American "conservative" movement here. For what it's worth I don't think it's conservative at all. I'm a dyed in the wool Trudeau Liberal myself, (I'm a Montreal Texan and I ain't fixin' to start changin' now) but I respect and draw upon conservatism that actually conserves things. One of the things it ought to conserve is intellectual rigor.

In the end, Ross Perot's position on just about everything was the right one. "I don't know everything. I'd just get the experts together and have them hash it out. Then I'd figure out how to get it done." The trick is being able to identify the experts. So you have to be able to demonstrate that you yourself understand the coherence test, and the best way to do that is to be coherent.

Changing your mind is one thing; within reason it is a good sign, a sign that you don't operate dogmatically. Saying two things simultaneously that can't possibly both be true is another. Coherence is important because it is the sign of actual thought.

Thursday, October 30, 2008

Consequences for getting it wrong?

Wouldn't it be nice if there were consequences for a journalist garbling a story?

"MIT scientists baffled by global warming theory, contradicts scientific data"

In the pre-Web 2.0 days, this would have gotten no notice, but now it's getting "Dugg" up. The story reads in part:
The two lead authors of a paper published in this week's Geophysical Review Letters, Matthew Rigby and Ronald Prinn, the TEPCO Professor of Atmospheric Chemistry in MIT's Department of Earth, Atmospheric and Planetary Science, state that as a result of the increase, several million tons of new methane is present in the atmosphere.

Methane accounts for roughly one-fifth of greenhouse gases in the atmosphere, though its effect is 25x greater than that of carbon dioxide. Its impact on global warming comes from the reflection of the sun's light back to the Earth (like a greenhouse).
Ah. So what with the 25x greater effect, its effect must be 25 x greater, right? Or should that only be 5x greater, since it's only "one fifth of greenhouse gases". Or should it be 1/5th, because the factor of 25 is already accounted for? (Hint, that last one is closest, but what was that about water vapor?)

Open loop systems fail.

This is what all those free-marketeers, in their narrow little way, are trying to tell us. If journalists get no correction for getting things wrong, they will continue to get things wrong, and the public will continue to be confused. Feeling themselves barraged by streams of contradictory nonsense, what choice to they have but to "go with their gut"?

The throwaway article in an (I suspect) not especially important tech website is getting passed around, based on the reporter's deep understanding and coherent explanation of the story, right? Or perhaps it is because of the conclusion:
One thing does seem very clear, however; science is only beginning to get a handle on the big picture of global warming. Findings like these tell us it's too early to know for sure if man's impact is affecting things at the political cry of "alarming rates." We may simply be going through another natural cycle of warmer and colder times - one that's been observed through a scientific analysis of the Earth to be naturally occuring [sic] for hundreds of thousands of years.
No need to blame that crap on the innocent researchers. Just one more writer writing about something he doesn't know as if he does. Just one more tiny bit of intellectual poison, that's all, just a little bit more. Yummm. Open wide...

Update: Watt's Up runs with it.

Wednesday, October 29, 2008

Public Talk (by me): Ethics of Carbon

I'll be speaking at the Ethical Society of Austin this Sunday, November 2, on "The Ethics of Carbon".

The Ethical Society is a humanistic religious organization dedicated to personal ethics and reason, committed to the idea that each individual has inherent worth and dignity and inspired by the ideal that the supreme aim of human life is working to create a more humane society. I'm an active member of this group.
Coffee and pastries are served at 10:00 a.m. The meeting starts at 10:30 a.m. The location is at the Austin Museum of Art campus at Laguna Gloria, which is at the cul de sac at the very western tip of 35th Street in central Austin (shown as 'Bull Creek Rd' on this Google Map).

After the meeting there is a social hour. This is a time for visitors, friends, and members of ethical culture to get to know each other better. We clump together into smaller groups where we continue to discuss the day's program, catch up with each other's lives, or simply engage in pleasant conversation over a potluck lunch.
What I'm going to talk about is the ethical implications of global warming for our lives, if we assume that what climate scientists are saying is correct. For what it's worth, I do believe what climate scientists say is essentially correct, but defending that is not the point of this platform.

I think there's a lot of misunderstanding of what the global warming situation implies for how we will live in the future. I think it's fundamentally an ethical question, and inescapably a political one as well. It's also complicated. It's both daunting and fascinating.

A crucial point is that we can't solve this as individuals, with "personal virtue" alone. As Al Gore said at his Nobel lecture:

"There is an African proverb that says, "If you want to go quickly, go alone. If you want to go far, go together." We need to go far, quickly. We must abandon the conceit that individual, isolated, private actions are the answer. They can and do help. But they will not take us far enough without collective action."

Of course, collective action often goes wrong, and we can't afford too many mistakes on this scale!

There are two main questions in thinking about global warming; whether the scientific basis of this way of thinking about nature is basically correct is one of them. That gets most of the attention but that's not the topic of this platform. The topic at hand is: presuming it is true, what are the implications, especially the ethical ones? There are a few more inconvenient truths that politicians and the press don't like to mention but that need some attention.

Visitors are welcome, and there will be time for discussion. I'd appreciate an RSVP from anyone coming on account of this blog posting. I've got a few readers in Austin and the I-35 corridor according to the logs that I haven't met. I'd be delighted to make your acquaintance.

Tuesday, October 28, 2008

What's Good for America

It used to be said that what's good for General Motors is good for America, but in those days nobody expected it would come to this: General Motors Acceptance Corporation (GMAC), the people you had your car loan with the last time you bought a GM car (back before that string of Volvos and Toyotas, remember?) is trying to get itself declared a bank so it can get cut in on Mr Bernanke's trillion dollar bank bailout.

This is a silly way to save GM and its jobs. Remember we have two crises on our hands, both caused by economic excesses, operating on different time scales; the one financial and the other environmental.

I've been despairing of making lemonade out of these two lemons, but my good friend Howie Richey has pointed a way out of this thicket. What we should be doing is to tell GM they can't be a bank, but we'll give them a $10 bn contract to develop carbon neutral transportation, please and thanks.

Then maybe what's good for America will be good for General Motors, for a change.

Friday, October 24, 2008

Failure of Networked Systems

This article, "The Failure of Networked Systems", on The Oil Drum explains matters very well.

It is sort of an engineer's twist on the tradeoff between risk and return. Go read it.

It applies both to the immediate financial mess and the even bigger picture reservoirs-and-flows views of the earth system.

What I have to add is this:

The current financial disaster is based on people deluding themselves that they had eliminated risk, when in fact they had coupled risk. The consequence is that small failures were avoided at the expense of big failures.

The whole setup of modern human activity makes a comparable error. There is no such thing as unlimited growth. All growing systems reach limits. The most casual understanding of exponential growth (h/t HR) makes this clear.

Either fuel supply or carbon waste are likely candidates to be the limit we hit first, but there are others. It doesn't matter. The "growth forever" idea is really "growth until it stops". If we base everything we do and everything we think on an assumption of growth, we start to build things in to protect the growth.

Much of government of the past century has been about protecting the growth. Sooner or later it is doomed to fail.

Has this just happened? Has the system reached old-fashioned bubble-popping so emphatically and so hard upon its physical limits that we will be unable to right it? Maybe, but probably not.

The problem is that righting it is not what we need to do. What we need to do is relax.

What we will inevitably try to to is rebuild the tightly coupled growth-dependent system that has spectacular failures built into its whole M.O. Realistically, some of this is unavoidable at this stage, but it's an ill-timed distraction. What we ought to do, instead, is reduce growth dependency and increase redundancy and resilience.

We need to convert to a world where less wealth gets created, and less wealth gets destroyed.

This is the relaxation scenario; it is easier on everybody, but it will take some creativity. In a perceived crisis, can we find the creativity to say, "no, we don't particularly want things to get back to normal"?

Resilience, not growth, is the goal of our time. We need to build a world where time to think and time to enjoy and time to care is valued more, where time to achieve and money to spend is valued less. Say you don't want no diamond rings and I'll be satisfied. Tell me that you want the kind of things that money just can't buy.

Trying to find sustainability in conventional economics at a time of stress is a category error if ever there was one. This mistake has its precedents and they are not encouraging.

Thursday, October 23, 2008

What Color Lining?

Just before we realized just how gobsmackingly stupid the people who manage contemporary financial institutions managed to be, I pointed out the upside of the incipient recession. Simply speaking, the first step to a sustainable system is an average growth rate of zero. Since we don't control growth perfectly, that means that what has heretofore been called "recession" is what we need about half the time (or more, if the growth phases are especially vigorous).

Of course, all of this depends on the question of what it is that is actually growing, a question which is far less trivial than is normally considered. The countereconomists have this part right in a fuzzy sense, with a tautology I = P A T. Unfortunately for the utility of the equation, the "P" is the only term which is really measurable all that well. It's easier to think in terms of dollars and carbon intensity; then the comparable equation is

delta-C = population * income * carbon_intensity

And, alas, the target delta-C is slightly less than zero! Go build an economic model on that!

So although there is something to be said for a gentle slowdown, the greenhouse problem doesn't stop worsening in a recession. It only stops getting worse at an increasing rate!

Anyhow, the idea of a relaxation is necessarily a gentle and calm period in contrast to a period of decay and decline.

It is looking very much like what we have is not a gentle slowdown, though. The great spike in gasoline prices has been followed by a great plummet; we are down about 40% here in Texas in the last six weeks and it wouldn't be surprising to see a pump pricve below $2 soon... This surely represents a great decline in demand. Now, in the grand scheme of things, fewer people driving around great distances for little substantive reason is probably a good thing, but because of how we've set things up, these people will be abruptly overcommitted and somewhat desperate.

So the fact that we need enormous capital investments to manage the infrastructure switchover to whatever it is we are switching to is getting swamped by the the habitual short-term focus that people have become accustomed to. Nobody in power is thinking about wind farms, CO2 pipelines or nuclear plants now. We have jumped right from overwork into panic without passing through relaxation.

So I see the lining, I just don't think it's silver.

We always knew the system was addicted to growth, and that readjusting to a non-growth world would be difficult. What we didn't understand was that the addiction had progressed to the hard stuff, that even a few months of decline would cause chaos to ensue.

Greenies, even responsible and stodgy folk like Gore and Hansen and Pauchari, (yes I most emphatically do mean that, what a world where Gore is cast as a radical!) have been saying everything rides on the next few years. Well, like Greenspan, I fear they have "made a mistake".

Thanks to Mr. Greenspan's little oopsie we have lost a few years if we are lucky. Probably a decade. Governments will have their hands full just keeping the boat afloat and will have almost no power to steer it. I hope I'm wrong, but it sure doesn't look that way.

So now we have to hope nobody remembers the "now or never" rhetoric of the past few years, because if it's now or never, it sure as hell looks like never.

Nope, that lining color isn't silver. Nosiree.

Relaxation, as I should have known, is out of bounds. Times only come in drunk or hung over anymore.

Update: Dear old friend D asks in email what I meant by that last statement. Maybe I should have said times only come in manic and depressed anymore. Is that clearer?

Oops

Aww. It's just a little boo-boo. We still love you Alan.
Alan Greenspan, the former Federal Reserve chairman, told a House panel that he “made a mistake” in trusting that free markets could regulate themselves.

Wednesday, October 22, 2008

Return of the Meme

Election and economic madness hasn't really subsided, but some interesting stuff is coming out on the sustainability front.

I just picked up (in addition to some Python lit) at B&N the following three magazine special issues:

Bulletin of the Atomic Scientists: The future of nuclear energy (academic firewall)
The Humanist: Shades of Green: Environmental alternatives for a post-oil future (mail order)
New Scientist: The Folly of Growth: How our economy is killing the earth (Free! Buy one anyway!)

The last one is especially highly recommended. Buy it while it's still on the newsstand! (Tim Jackson, Herman Daly, David Suzuki, James Speth...)

Hope to have some time to discuss some of these ideas soon.

Also I've started getting press releases! Sorta fun.

In addition to the recent plethora of make-gasoline-from-CO2 nonsense (Invest!) I've finally gotten something of interest:
October 20, 2008 – New York, NY – howyoucansavetheworld.com is a destination for remarkable ideas from today’s most sought-after visionaries, innovators, and thought leaders. These new viewpoints are presented to battle the challenges our society faces today and highlight the effect they have on tomorrow. Today’s focus is the world’s growing pollution problem.

Not everyone can have a car, if we still want a planet”

By Lee Schipper, Former Co-director of EMBARQ, the Center for Sustainable Transportation and the World Resources Institute

In his blog, Schipper warns the world about the effects of transport-produced CO2 emissions.

Getting real stakeholders to the table is the only way to clear the air and reduce CO2 emissions from transport. With the lack of any real initiative at the US National level, engaging the leaders of nations representing close to 3 billion people in Asia may be a more viable strategy since with few exceptions Asia has only started to bury itself in a CO2-intensive development. But time is short. The exceptions – the hopelessly snarled mega-cities of the continent, are attracting more and more people to perennial gridlock. Since so few people in Asian own cars, it may not be too late to change courses.

Howyoucansavetheworld.com is an extension of SCI FI’s public affairs initiative Visions For Tomorrow.
The Visions for Tomorrow stuff is spectacularly lame on the whole but the Howyoucansavetheworld.com spinoff is very promising. (except perhaps for the fact that they didn't invite me to contribute)

This is the second time in two days I've seen the concept of universal automobile ownership challenged in high profile media. Progress?

Update: The zeitgeist is a mysterious beast. TB has had similar thoughts today.

Tuesday, October 21, 2008

Heat

Thanks to a timely tip from Quark Soup, I caught the PBS Frontline broadcast "Heat" at broadcast time.



I must say it was excellent. There was no bristlecone pine nonsense, there was no greenhouse effect physics lesson, there was no Lindzen paranoia. It was just the bottom line. Energy, sustainability, politics, international and intergenerational equity behind everything, and various alternative technologies and their various drawbacks in the foreground.

I also really appreciated the woman with an east coast vernacular pointing out how much local interests dominate over the general good in energy issues; something about West Virgina miners, Michigan autoworkers, Iowa farmers each pursuing their own interests so vigorously and paying so little mind to the needs of the whole country (never mind the world).

Then there was the assertion by a wonderful Indian woman that if India reached an American standard of living the planet would surely be doomed. And Jerry Brown's assertion that while we could solve our problems technically, it is far from clear that we could manage it socially. And Stephen Schneider's calling the growth shibboleth itself into question, ever so gently.

Less positive, but equally striking to me was the efficacy and skill with which corporate spokespeople (notably two women speaking for Exxon in one case and General Motors in another, but also a couple of utility CEOs) so expertly delivered responses to interviews precisely calibrated to maximize shareholder value, with absolutely no other purpose in mind. It was stunningly chilling. T. Boone Pickens (remember, he was an instigator and primary funder of that Swiftboating calumny a few years back) was a breath of fresh air, candor and human decency in that crowd.

A little disappointing that they felt compelled to shy away from quantitative reasoning, but given that constraint, this is really about the clearest painting of the whole messy picture that could be offered at present. (They also steered away from Hubbert's Peak which may be for the best.)

I am glad they stressed electricity more than vehicles, and even mentioned cement before vehicles. It is awfully tedious how so many Americans think this is all about their vehicles.

You can see the whole thing online, which I recommend even to the seasoned participant in energy debates.

Congratulations and thanks to the MacArthur Foundation and the other funding agencies, and especially to producer Martin Smith for a job well done. I think anyone watching this program with an open mind will gain some perspective on the daunting mission we all collectively face.

Friday, October 17, 2008

Followup re Huge Sensitivity Arguments

Regarding the overwrought claims of the climateprediction.net crowd that I discussed recently, my friend Ursa pointed out in conversation that "no intelligent informed person" takes Allen's "disingenuous" press releases seriously. I pointed out that the qualifier begged the question, and that besides, in a democracy, informed intelligent people don't have as much influence as one would like. His reply was interesting. He pointed out that if informed, intelligent people don't resort to the same tactics as the enemies of reason, they lose in the ill-informed less-than-intelligent marketplace of ideas.

A disturbing defense of exaggeration

Remember the Market for Lemons idea?

"When deep quality metrics are unavailable, customers will base their decisions on shallow metrics instead."

So U. argues that Allen et al should be forgiven, because although the sensitivity is not 10 C, the risks are really really bad, so people might as well have a big number to chew on. In an emergency, you might well yell "fire!" in a theatre, say, rather than "significant likelihood of a release of a disabling neurotoxin!" You are lying about the fire but not the emergency, because there isn't time to convey the actual nature of the emergency in such a way that people will act in proportion to their actual risk. You are providing shallow misinformation as a proxy of the valid but inaccessible information.

The idea that this might be necessary is very disturbing to scientists. I believe that politicians live with it constantly. This is part of why the interface between science and policy sucks.

None for me, thanks

I disagree with this idea of tricking people into doing what they would do if they had better understanding, because the credibility of sound reasoning is absolutely crucial. Without a scientific approach that is intact, we can achieve nothing. Anyone deliberately misrepresenting science is not a scientist anymore, whatever his or her job title; and they should lose any claim on such a title instantly.

It's easier when you don't have any skin in the game

Unfortunately the lines aren't always so easy to see. In an uncertain world, people will slide the lines perhaps a bit further than they ought to go. It's hard in practice to know when to go against your institutional interests and when to go along when truth starts to give way to spin.

Wednesday, October 15, 2008

Climate Sensitivity is not the Central Issue

I am totally conventional on the climate sensitivity number and yet I am totally disgruntled about climate modeling.

Climateprediction.net is an effort to run a very large suite of related models rather than putting too much weight on one. Good idea. But they have concluded that the sensitivity can be very high.

I don't believe them, but it really doesn't matter very much.

I don't believe them

I am quite convinced that the Allen et al "climateprediction.net" work is nonsensical. I do not have the clout to win this point, nor do the people who agree with me, or I should rather say, with whom I agree. Even the community, and certainly the press, is putting far too much emphasis on unrealistic scenarios.

Many and probably all of the really scary projection climateprediction.net outcomes are likely based on models that can be a priori rejected on their fidelity to historical climate. Their rejection criteria are too lax and that is all there is behind the alarming results so widely claimed for their experiment.

Much as I believe that the future of climate modeling is in systematic exploration of parameter space rather than in addition of processes to monolithic monster codes, and hence I begin with philosophical agreement with their ideas, their conclusions serve only to to understate and obfuscate the legitimate accomplishments of the climate modeling field. It is my understanding that if they weighted their results by model fidelity to observations the spread would be greatly attenuated.

It Doesn't Matter Much

I am also convinced that in the large matters are much more serious than they are taken to be; an equilibrium atmosphere-ocean mean sensitivity between 2.5 - 3 C per CO2 doubling, which I take to be a fairly reliable estimate (> 50%) on current evidence, is just a number. It's what that number implies on the ground that is the issue, and there it's pretty much anybody's guess.

I believe this latter problem (local impacts) can be usefully if not completely resolved in principle, but I don't believe it will be resolved in practice. This tends to discourage me from persisting in my current efforts. There are far more important questions to address.

Does any of this matter to mitigation policy? We already know that net carbon emission is a bad idea. The mitigation world needs to leave climatology alone.

Does sensitivity matter to adaptation policy? Only indirectly, as a measure of model consensus.

Can we build better models, such that adaptation-relevant projections become reliable? I think so, but I also think we won't make an adequate effort anytime soon. If we just do more of what we have been doing and slap it on bigger machines we will get the same result; not as bad as the climateprediction.net people claim, but not good enough to affect regional scale planning.

The bulk of what people think about ought to be mitigation at the global scale. Places with specific climate vulnerabilities ought to shore up their defenses. Maybe climate science will have something more to say, but for now just think "2.75 C" and move on to what to do about it, please?


Another Scientist Steps Outside the Box



Here's what Andrew Weaver has to say about it:
Stepping into a political fray is almost unheard of for a scientist, especially one of Weaver's stature. As one of the world's pre-eminent climate scientists, he was part of the Nobel Prize-winning Intergovernmental Panel on Climate Change (IPCC) that collates and interprets climate change data for the world's governments and a lead author of its seminal assessment reports.

But so "incensed" is he by what he calls Prime Minister Stephen Harper's war on science and scientists, by the government's questioning of climate change and by the obstructionist positions the Tories have taken on the issue internationally, he felt he had no choice.

"I have historically refused to actually say anything like I've said to you," he continued. "But I recognize that (climate change) is the defining problem for humanity, and I recognize there's only one leader in Canada who's actually dealing with it."

In Keeping Our Cool, Weaver outlines in a comprehensive way what climate change is, why it's real, what causes it and what obstacles politicians and industrial interests place in the way of countering it. Throughout there are diagrams and tables that attempt to present graphically what he admits is an inherently complicated truth.

But this has always been one of Weaver's strengths. Without ever dumbing the issue down, he keeps it as simple and understandable as he can.

He agrees the crux of his book comes down to a single alarming sentence on page 28: "People have simply no idea how serious this issue is."

It's so serious, he said, that unless we reach a point where we stop emitting greenhouse gases entirely, 80 per cent of the world's species will become extinct, and human civilization as we know it will be destroyed, by the end of this century.

"Climate scientists who grapple with this every day ... we see where it's headed. We understand it very well.

"I think the public needs to know, straight in their face, that you can give up on civilization as we know it. This is what I'm trying to get across in the book. Do we actually give a s--- for future generations?"
OK? Let's not quibble about numbers. This isn't about numbers. It is about a simple fact.

We must stop emitting greenhouse gases entirely.

Update Followup musings here.

Friday, October 10, 2008

Holding my Breath

Just like everyone else... Trying to keep my mind on my work, but just wondering what the world will look like in six months.

Everything rides on the resolution of the (US-originated) financial mess in an essentially leaderless time, especially in the US. Great time for an administration with an eye on the exits, huh?

TB points out that TheOilDrum has some good articles. Here are some I'd recommend as you try to figure out this mess.

Resurgence of Risk (Nate Hagens, from '07)

The End of Growth (Richard Heinberg)

This is not a Liquidity Crisis (Herman Daly)

An Email (fictitious) from Bernanke (Mike Shedlock, from '06)

Good places to start aiming your crystal ball.

After all those years of thinking the Great Correction was imminent to find things continuing as passes for "normal" in postmodern times, I had reset my expectations a generation in the future. But it may well be that it's crunch time.

As if anyone reading here couldn't guess, I do hope the dems get quite a lot of power this cycle. They will need it. I have high hopes for the intelligence, competence, seriousness and networking skills of President-Almost-Elect Obama, but the obstacles he faces, including the vicious paranoia being drummed up against him, are formidable. That said, the Democrats are far from blameless here. That One should look up Ms. Brooksley Born. (H/T Luigi)

Steinn S. has some more eye popping bubble popping stuff.

Anyway the upshot seems to be this: people have made huge bets that they expected to win, and others made huge bets based on those bets. BY making a large number of bets they seem to be able to cover there losses, but in fact nobody bothers to actually think about what happens in a down market. This is called "deregulation". It seems to work just fine until it doesn't.

Friday, October 3, 2008

Iceland

As the world suffers a hangover from the financial excesses of the past few years, the tiny island nation of Iceland has a bigger headache than most. The Nordic country was until recently lauded for its rapid generation of wealth despite its small size, as deregulation of domestic financial markets in the 1990s fuelled a stock market boom that underpinned an acquisition spree by cash-rich Icelandic banks and other companies.

...

With a population of just 320,000 people, the remote island nation between Europe and Canada has punched far above its weight in recent years, shifting from its mainstay fishing industry into an international investment force. The Iceland Stock Exchange, or ICEX, was Europe's top-performing market in 1994, leaving Icelandic companies with a large liquidity pool. Kaupthing, Iceland's biggest bank, has doubled in size every year since 1996.
According to one local observer, this is escaping the financial world and into daily life:
They are fighting powers that they are powerless to fight. It's like tackling a storm raging in the sea with a teaspoon.
The main supermarket can't get imported goods because they have no currency. The shops are half empty. One of the store managers has advised people to start hoarding. We're running out of oil. And winter came last night - about a month early.
H/T and sympathy to Steinn SigurĂ°sson, who has his own report; comments there please.
 

Thursday, October 2, 2008

Asking the Right Questions

From Herman Daly's keynote to the AMS workshop on Federal Climate Policy:
However, it is useful to back up a bit and remember an observation by physicist John Wheeler, “We make the world by the questions we ask”. What are the questions asked by the climate models, and what kind of world are they making, and what other questions might we ask that would make other worlds? Could we ask other questions that would make a more tractable world for policy?

The climate models ask whether CO2 emissions will lead to atmospheric concentrations of 450-500 parts per million, and will that raise temperatures by 2 or 3 degrees Celsius, by a certain date, and what will be the likely physical consequences in climate and geography, and in what sequence, and according to what probability distributions, and what will be the damages inflicted by such changes, as well as the costs of abating them, and what are the ratios of the present values of the damage costs compared to abatement expenditures at various discount rates, and which discount rate should we use, and how likely is it that new information learned while we are constructing the model, will invalidate the results? What kind of world is created by such questions? Perhaps a world of such enormous uncertainty and complexity as to paralyze policy. Scientists will disagree on the answers to every one of these empirical questions.

Could we ask a different question that creates a different world? Why not ask, Can we systematically continue to emit increasing amounts of CO2 and other greenhouse gasses into the atmosphere without eventually provoking unacceptable climate changes? Scientists will overwhelmingly agree that the answer is no.

...

To make the point more simply, if you jump out of an airplane you need a crude parachute more than an accurate altimeter.


Go. Read it. He's just getting warmed up.

Update: Thingsbreak points out that you can read the same text with less strain on your eyes and your mouse hand at Grist.

 

Wednesday, October 1, 2008

Post-Equilibrium Economics

Agent-based modeling, a new approach favored by computer science types, is much more likely to prove useful than the general equilibrium modeling of traditional economics precisely because markets are nothing like the models economists traditionally use.

Though computationally intensive at a minimal level, agent models scale much better than the conventional equilibrium models. Conventional models yield publishable results with three or four variables, but become totally intractable at about thirty degrees of freedom. Agent models scale linearly with the number of modeled agents and linearly with the comutational load of each agent's decisions. Thus, they present a vastly more promising application of computation to economics.

So perhaps a reasonably useful theory of economics may emerge just in time to do us some good! Or perhaps, just barely too late...

A story to this effect appears in today's New York Times.
It seems clear that no one really knows what is coming next. Why?

Well, part of the reason is that economists still try to understand markets by using ideas from traditional economics, especially so-called equilibrium theory. This theory views markets as reflecting a balance of forces, and says that market values change only in response to new information — the sudden revelation of problems about a company, for example, or a real change in the housing supply. Markets are otherwise supposed to have no real internal dynamics of their own. Too bad for the theory, things don’t seem to work that way.

As an aside it's nice to see Doyne Farmer's name for the first time in a while in that article. Anyone besides me remember reading The Eudaemonic Pie? A very interesting read to say the least; Farmer is perhaps the most memorable character in the memorable story.