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  1. #1
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    Default Jeremy Grantham Checks In

    Jeremy Grantham, who has long had investments in Timber and Natural Resources, puts a surprising smackdown on the Global Warming denialist crowd.

    In the updated version of Bailout Nation, I specifically mention the same think tanks slavish devotion to ideology and disproven ideas (EMH, etc.). I find it encouraging Grantham calls them out as well.
    >
    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.

    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.)

    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.

    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, fl oods, and other extreme weather events.

    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.

    6) Pascal asks the question: What is the expected value of a very small chance of an infi nite 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-fi red 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.

    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.

    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.

    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.

    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.

    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 profi ts 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?”

    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.

    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.

    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.

    http://www.ritholtz.com/blog/2010/07...-in-5-minutes/

  2. #2
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    Default Re: Jeremy Grantham Checks In

    All you need to know about investing in the 21 century then is.

    1. Peak-Cheap-Oil
    2. Anthropogenic Global warming
    3. Debt Deflation through default (non-TBTF) and currency devaluation (TBTF)
    4. Soveriegn Bond Market risk due to attempts to sustain what cannot be sustained.
    5. Global population is 6 billion on it's way to 9 billion.

    Any more? I think that about covers it.

  3. #3
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    Default Re: Jeremy Grantham Checks In

    Grantham's "smackdown" might be somewhat more credible if Mr. Grantham had not put literally billions into the pro-AGW crowd.

    Given this mass of money, it is even more amusing that he talks about the 'oil company conspiracy' funding the so-called denialists.

    Case in point: the Grantham Institute for Climate Change

    Founded in 2008 by Jeremy Grantham, it features as its board members:

    1) Fred Krupp - head of the EDF
    2) Carter Roberts - head of the WWF
    3) Lord Stern - of the infamous Stern climate change report

    Are any of these scientists? No, rather they are heads of powerful NGOs.

    But let's look at Grantham's so called 'smackdown' and its details:

    Quote Originally Posted by JG
    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.
    Certainly true, but of course it does leave out the fact that CO2 levels in fact varied widely before this period, as well as throughout geologic history.

    Quote Originally Posted by JG
    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.)
    Certainly also true. But again the devil is in the details: all other things are not equal, and the earth's temperature in the past 1000 year, 100 years, 50 years, 10 years, or whatever time frame you choose does not resemble the CO2 graph in any way, shape or form.

    Quote Originally Posted by JG
    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.
    Except this is untrue. The implicit assumption here is that all possible major natural effects and cycles are understood when in fact this is not correct.

    For one thing, if everything was so well understood then the ability to predict both weather and climate would be far better than it is.

    For another thing, the actual mechanisms of ice ages is still unclear. It is speculated to be solar but in truth is not proven either way. Similarly other periods in geologic history such as the 'Faint Sun' era show that neither sun nor CO2 levels explain enough to present certainty such that such ridiculous statements as the quote above encapsulate.

    Quote Originally Posted by JG
    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, fl oods, and other extreme weather events.
    This is just plain wrong.

    1) Temperatures have not consistently risen in the past century. There have been 4 periods, 2 of which had temperature go up, 2 of which had temperatures go down.

    At present we appear to be in a period where temperatures go down.

    The overall trend is up, but again we're also recovering from an Ice Age in 1650/1750/1850 thus a generalized temperature trend up is itself not necessarily exceptional

    As for the ice sheets and glaciers - there has been ZERO correlation between global mean temperature and melting of either.

    Similarly the 'Inconvenient Truth' and JG's assertions of increased flooding, storm severity, storm incidence, etc etc have been COMPLETELY discredited even amongst the pro-AGW scientific community.

    Every single example held up thus far has been shown to be either due to failure to account for inflation (i.e. more dollars for a given identical house) or population encroachment (people moving to the coasts/flood plains i.e. Queensland) or has been flat out wrong (hurricane energy and incidences have been at near historic lows).

    Quote Originally Posted by JG
    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.
    No, it is not logically and mathematically rigorous when the so called damage projections for AGW are so poor, and equally the predictive powers of said economic as well as temperature models have been so poor, and equally that the costs of avoiding so called CO2 catastrophe are so gigantic.

    This pathetic attempt at an assumptive close is easily destroyed when the actual costs for going 'zero emissions' is taken into account - in 'Climate Change' I've posted a Spiegel article where Germany will have to spend 30% of its entire GDP for the next decade in order to maybe freeze present emissions levels, and that includes extending the life of its present nuclear power plants.

    Quote Originally Posted by JG
    6) Pascal asks the question: What is the expected value of a very small chance of an infi nite 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-fi red 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.
    Pascal referred to an ultimately unprovable afterlife: if the alternative to faith was an eternity in hell or nothing, there is nothing to lose by professing faith. Cost today: minimal. Cost tomorrow: minimal. Cost after death: unknowable but either infinite or zero.

    However for AGW - it has already been seen that the costs TODAY are enormous. The human costs TOMORROW for the poor are even more painful. And those professing the impending doom are materially biased as well as consistently wrong for the past decade plus.

    Quote Originally Posted by JG
    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.
    This is a ridiculous statement. The single greatest threat to biodiversity is human encroachment on wild habitat. AGW has nothing to do with this and in fact detracts from the focus of preserving wild habitat.

    Quote Originally Posted by JG
    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.
    What about the AGW-leaning think tanks? What about the billions spent annually on 'research'? What about all of the examples of so called AGW effects which turn out to be wrong due to original bias on the researchers part - like the worldwide frog death, like the AGW threat to penguins which turns out to be caused by researchers attaching tags?

    Quote Originally Posted by JG
    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.
    Except the hard science seems to be unable to be objective. Is unwilling to let its methods and data be seen by anyone not of the 'faith'. Has a gigantic financial and professional incentive. Has in many cases a clear agenda completely unrelated to the subject at hand (see Hansen, James).

    Quote Originally Posted by JG
    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.
    This is just plain sad. As noted previously, the amount of money spend FOR AGW is hundreds, if not thousands more than that spent by any non-AGW source. And it includes oil companies such as Exxon Mobile's $100 million donation to Stanford in 2002 to study climate change.

    Quote Originally Posted by JG
    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.
    Again, just plain sad. This reads like a prototypical hit piece by a rabid NGO employee - the 'big oil' 'big coal' conspiracy. The 'tobacco company' FUD.

    The reality:

    1) The earth is warming

    2) The amount of warming has been insignificant - an amount far less than the daily, monthly, yearly, decadal, or even century level noise.

    3) The warming may or may not be due to CO2 in part, but there is a plethora of additional candidates including: Little Ice Age recovery (natural), Solar radiation changes (natural), Medium and long term oceanic changes such as the ENSO/El Nino/La Nina/PDO/AMO (natural), human changes to land causing albedo changes (human but not CO2), human changes to water vapor cycles via irrigation/dams (human but not CO2), changes in ecological systems due to farming and 6 billion people (human but not CO2), etc etc.

    4) The assumption made by IPCC is both that all natural causes are understood and quantified, and that all other human impacts are understood and quantified, and therefore CO2 must be the culprit. Yet the IPCC temperature, as well as economic and atmospheric projections, are almost uniformly wrong.

    5) The costs to go zero emissions ASAP are gigantic. They amount to at least 1/3 of global GDP for the next 20 years or more. This level of spending guarantees massive suffering amongst the poorer nations as well as the poor in developed nations.

    6) The numbers of people lining up to take advantage of this spending are enormous - from banks to hedge funds to MNCs like GE, all the way down to 'consultants' charging triple digit hourly fees to assist companies to meet new government regulations associated with climate change.

    There is motive, means, and opportunity for mischief - and the science itself is neither hard, nor has it been right in any sense, nor is it a consensus

  4. #4
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    Default Another Point of View

    Excerpts from:

    Global Warming Causing Carbon Dioxide Increases: A Simple Model

    Published May 11th, 2009 by Roy W. Spencer, Ph. D.


    (Good supporting graphs and equations in the actual article):

    Global warming theory assumes that the increasing carbon dioxide concentration in the atmosphere comes entirely from anthropogenic sources, and it is that CO2 increase which is causing global warming.

    But it is indisputable that the amount of extra CO2 showing up at the monitoring station at Mauna Loa, Hawaii each year (first graph below) is strongly affected by sea surface temperature (SST) variations (second graph below), which are in turn mostly a function of El Nino and La Nina conditions...

    ...So, I keep coming back to the question: If warming of the oceans causes an increase in atmospheric CO2 on a year-to-year basis, is it possible that long-term warming of the oceans (say, due to a natural change in cloud cover) might be causing some portion of the long-term increase in atmospheric CO2?

    I decided to run a simple model in which the change in atmospheric CO2 with time is a function of sea surface temperature anomaly...

    ...There will, of course, be vehement objections to this admittedly simple model. One will be that “we know the atmospheric CO2 increase is manmade because the C13 carbon isotope concentration in the atmosphere is decreasing, which is consistent with a fossil fuel source.” But has been discussed elsewhere, a change in ocean biological activity (or vegetation on land) has a similar signature…so the C13 change is not a unique signature of fossil fuel source.

    My primary purpose in presenting all of this is simply to stimulate debate. Are we really sure that ALL of the atmospheric increase in CO2 is from humanity’s emissions? After all, the natural sources and sinks of CO2 are about 20 times the anthropogenic source, so all it would take is a small imbalance in the natural flows to rival the anthropogenic source. And it is clear that there are natural imbalances of that magnitude on a year-to-year basis, as shown in the first graph.

    What could be causing long-term warming of the oceans? My first choice for a mechanism would be a slight decrease in oceanic cloud cover. There is no way to rule this out observationally because our measurements of global cloud cover over the last 50 to 100 years are nowhere near good enough.

    And just how strenuous and vehement the resulting objections are to what I have presented above will be a good indication of how politicized the science of global warming has become.
    Even if Dr. Spencer is correct and global warming is largely a natural process, there are still enormous social, geo-political, and long-term economic benefits to reducing man-made air pollution. I see only positives to developing more sustainable methods of agriculture, manufacturing, housing and transportation.

  5. #5
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    Default Re: Another Point of View

    Quote Originally Posted by shiny!
    Even if Dr. Spencer is correct and global warming is largely a natural process, there are still enormous social, geo-political, and long-term economic benefits to reducing man-made air pollution. I see only positives to developing more sustainable methods of agriculture, manufacturing, housing and transportation.
    I absolutely agree - there are plenty of good reasons to develop alternative energy as well as reforming agricultural, economic, transportation, and manufacturing status quos.

    However, throwing money at the problem because of some impending boogey man isn't the way to do it.

    I've written a blog posting talking specifically about alternative energy - how it should be done.

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    Default Re: Another Point of View

    Perhaps the real question is, how well equipped is our present political economic system to deal with any significant environmental changes, regardless of the reasons for those changes.

    Will the smart money be on the Mayan/Eastern Island phenomenon?

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    Default Re: Another Point of View

    Quote Originally Posted by don View Post
    Perhaps the real question is, how well equipped is our present political economic system to deal with any significant environmental changes, regardless of the reasons for those changes.
    Our present political system cannot solve the problem because it's become too corrupt and bureaucratic to be nimble and responsive to problems. All government knows how to do now is over-tax and over-regulate.
    Last edited by shiny!; 01-15-11 at 05:04 PM. Reason: added "corrupt"

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