Economic impact of energy consumption change caused by global warming

by Peter Lang and Ken Gregory

A new paper ‘Economic impact of energy consumption change caused by global warming’ finds global warming may be beneficial.

In this blog post we reproduce the Abstract, Policy Implications and Conclusions and parts of the Introduction, Results and Discussion. We encourage you to read the entire paper.

Abstract: This paper tests the validity of the FUND model’s energy impact functions, and the hypothesis that global warming of 2 °C or more above pre-industrial times would negatively impact the global economy. Empirical data of energy expenditure and average temperatures of the US states and census divisions are compared with projections using the energy impact functions with non-temperature drivers held constant at their 2010 values. The empirical data indicates that energy expenditure decreases as temperatures increase, suggesting that global warming, by itself, may reduce US energy expenditure and thereby have a positive impact on US economic growth. These findings are then compared with FUND energy impact projections for the world at 3 °C of global warming from 2000. The comparisons suggest that warming, by itself, may reduce global energy consumption. If these findings are correct, and if FUND projections for the non-energy impact sectors are valid, 3 °C of global warming from 2000 would increase global economic growth. In this case, the hypothesis is false and policies to reduce global warming are detrimental to the global economy. We recommend the FUND energy impact functions be modified and recalibrated against best available empirical data. Our analysis and conclusions warrant further investigation.

Introduction

There is a scientific hypothesis and political acceptance that global warming of 2 °C or more above pre-industrial times would have a negative impact on global economic growth. This hypothesis is supported by economic models that rely on impact functions and many assumptions. However, the data needed to calibrate the impact functions is sparse, and the uncertainties in the modelling results are large. The negative overall impact projected by at least one of the main models, Climate Framework for Uncertainty, Negotiation and Distribution (FUND), is mostly due to one impact sector – energy consumption. However, the projected negative impact seems to be at odds with empirical data. If this paper’s findings from the empirical energy consumption data are correct, and if the impact functions for the non-energy sectors are correct, then the overall economic impact of global warming would be beneficial. If true, the implications for climate policy are substantial.

Integrated Assessment Models (IAM) approximately reproduce the projections from the Global Climate Models (GCM) and apply impact functions to estimate the economic impacts of global warming. The impact functions are derived from and calibrated to what the developers assess are the most suitable studies of the impacts. The impact functions require many assumptions, including projections of population, gross domestic product (GDP), per capita income, elasticities and technology progress in energy provision.

Various studies conclude that the impact functions (also called damage functions) used in the IAMs are derived from inadequate empirical data. For instance, Pindyck says “when it comes to the damage function, however, we know almost nothing, so developers of IAMs can do little more than make up functional forms and corresponding parameter values. And that is pretty much what they have done.” According to Kolstad et al., the IAM damage functions “are generated from a remarkable paucity of data and are thus of low reliability”. The National Academies of Sciences, Engineering and Medicine (NAS) says FUND needs further justification for the damage functions, the adaptation assumptions for the different sectors, the regional distribution of damages, and the parametric uncertainties overall. Tol says the impact of climate change has not received sufficient attention; he says “there is either very little solid evidence, no conclusive evidence, or no quantification of welfare impacts”.

NAS  reviews the damage functions of the three main IAMs, discusses alternative approaches, reviews recent literature on damage estimation, and offers recommendations for a new damage module. It says that much of the literature on which the damage functions are based is dated and, in many cases, does not reflect recent advances in the scientific literature. For example, the FUND energy impact parameters are calibrated to reproduce the results of the 1996 papers by Downing et al.  and the income elasticity results of the 1995 paper by Hodgson and Miller.

FUND is one of the three most cited IAMs; Bonen et al., National Research Council and NAS compare them. FUND is the most complex. FUND disaggregates by sixteen world regions and eight main impact sectors (agriculture, forestry, water resources, sea level rise, ecosystems, health, extreme weather, and energy consumption). This enables analysts to conduct sensitivity analyses and to separately test individual impact functions.

Tol  used the national version of FUND3.6 to backcast the economic impact of global warming for these sectors for the 20th century and projected the impacts for the 21st century. Tol fitted the backcast results to observations of 20th century sectoral impacts. Tol  is an important study because it estimates the impacts for the most significant impact sectors, globally and by region. It also estimates the total impact on all sectors.

The bottom panel of Figure 1 suggests that an increase of up to around 4 °C Global Mean Surface Temperature (GMST) above pre-industrial times would be beneficial for the total of all sectors if the projected energy impacts for 2000–2100 are excluded. Energy consumption is projected to have a substantial negative impact during the 21st century; in fact, its negative impact exceeds the total impact of all other sectors, which is positive, from about 2080.

The striking change in trend of the energy impact at the turn of the century inspired this study. The trend was positive as GMST increased by 0.61 °C during the 20th century but FUND projects it will be substantially negative for the 21st century as GMST is projected to increase further. That is, whereas the observations for 1900–2000 show the impacts were positive, FUND projects continued global warming would have negative impacts for the global economy.

Contrary to the FUND energy projection for the period 2000–2100, the US Energy Information Administration (EIA) empirical data appear to indicate that global warming would reduce US energy expenditure and, therefore, contribute positive economic impacts for the USA. The paper infers that the impacts of global warming on the US economy may be indicative of the impacts on the global economy.

If the economic impact of energy is near zero or positive, and if the total of the sectoral projections in Figure 1, other than for energy consumption, is approximately correct, global warming would be beneficial up to around 3 °C relative to 2000, and 4 °C relative to pre-industrial times. The significance of these findings for climate policy is substantial. For instance, policies that aim to reduce global warming would not be economically justifiable. Therefore, the economic impact of energy consumption projected in Tol, and by FUND3.9, warrants investigation if FUND is to be used for policy.

This paper tests the validity of the FUND energy impact functions against US empirical data. It examines EIA data for the USA to investigate whether the impact of global warming on US energy consumption would reduce or increase US economic growth and compares the results with the energy projections. Next it investigates the projections for FUND’s 16 world regions. Lastly, it discusses some policy implications.

Results

Figure 9 compares the projected US energy expenditure impacts against the impacts calculated from the EIA empirical data.

Figure 9: Economic impact of US energy expenditure as functions of GMST change, relative to 2000. Pink solid line is the Julia FUND3.9 projection. Pink dashed line is the projection with non-temperature drivers constant at 2010 values. The orange dashed line is from the EIA data.

Figure 9 shows the projected impacts are substantially negative whereas the EIA data shows they are positive.

Discussion

Figure 15 plots the global economic impacts by sector as a function of GMST change from 2000 to 2100 projected by FUND3.9 with non-temperature drivers included. The total of all impact sectors, and the total excluding energy, are also shown.

Figure 15: FUND3.9 projected global sectoral economic impact of climate change as a function of GMST change from 2000. Total* is of all impact sectors except energy.

With energy impacts excluded, FUND projects the global impacts to be +0.2% of GDP at 3 °C GMST increase from year 2000. With the energy impact functions misspecifications corrected, and all other impacts are as projected, the projected total economic impact may be more positive.

The conclusion that 3 °C of global warming may be beneficial for the global economy depends, in part, on the total of the non-energy impact projections being correct, or more positive. Whether this is the case needs to be tested.

Policy Implications

The economic impact of climate policies is likely to be substantial. It is the sum of the economic impact of the policies and the cost of implementing and maintaining the policies. If global warming is beneficial, as this study indicates may be the case, then the total economic impact is the sum of the forgone benefits of the avoided global warming plus the cost of policies to mitigate warming.

Our analysis suggests that the overall impact of global warming may be positive – that is, it would increase global economic growth. If this is correct, then the positive impacts can be maximised and the negative impacts minimised by increasing wealth, but not by reducing global warming. Tol  concludes that the negative impacts of global warming can be reduced by reducing global warming and/or reducing poverty. However, if global warming is beneficial, then polices aimed at reducing global warming are reducing global economic growth.

According to Lomborg  any reductions in temperature resulting from the Paris Agreement promises would be minimal but at high cost. For example, Lomborg says that all Paris promises 2016–2030 will reduce global temperatures by just 0.05 °C in 2100, and by 0.17 °C if they continue to 2100. He estimates the most likely cost would be $1,848 billion per year in 2030. This is about 2% of projected world GDP in 2030, and this estimate does not include all costs of the climate change industry.

Other studies also indicate that the cost of policies to reduce global warming is high. For example, Climate Change Business Journal  estimates put the climate change industry in 2013 at $1,405 billion, about 1.9% of world GDP. Further, Insurance Journal  says that the ‘climate change industry’ grew at 17–24% annually 2005–2008, 4–6% following the recession, and 15% in 2011. These growth rates are much higher than the growth rate of the world economy implying that, if they continue, which is likely with international protocols, accords and agreements such as Kyoto, Copenhagen and Paris, the cost of climate policies will continue to escalate.

Conclusions

This study tests the validity of the FUND energy impact functions by comparing the projections against empirical space heating and space cooling energy data and temperature data for the USA. Non-temperature drivers are held constant at their 2010 values for comparison with the empirical data. The impact functions are tested at 0° to 3 °C of global warming from 2000.

The analysis finds that, contrary to the FUND projections, global warming of 3 °C relative to 2000 would reduce US energy expenditure and, therefore, would have a positive impact on US economic growth. FUND projects the economic impact to be -0.80% of GDP, whereas our analysis of the EIA data indicates the impact would be +0.07% of GDP. We infer that the impact of global warming on energy consumption may be positive for the regions that produced 82% of the world’s GDP in 2010 and, by inference, may be positive for the global economy.

The significance of these findings for climate policy is substantial. If the FUND sectoral economic impact projections, other than energy, are correct, and the projected economic impact of energy should actually be near zero or positive rather than negative, then global warming of up to around 3 °C relative to 2000, and 4 °C relative to pre-industrial times, would be economically beneficial, not detrimental.

In this case, the hypothesis that global warming would be harmful to the global economy this century may be false, and policies to reduce global warming may not be justified. Not adopting policies to reduce global warming would yield the economic benefits of warming and avoid the economic costs of those policies.

The discrepancy between the impacts projected by FUND and those found from the EIA data may be due to a substantial proportion of the impacts (37% for the US and 67% for the world) being due to non-temperature drivers, not temperature change, and to some incorrect energy impact function parameter values.

We recommend that the FUND energy impact functions be modified and recalibrated against best available empirical data. Further, we recommend that the validity of the non-energy impact functions be tested.

 

161 responses to “Economic impact of energy consumption change caused by global warming

  1. The caption for Fig. 1 seems to have wandered in from somewhere else.

  2. More economic growth may be economically beneficial but ecologically devastating (pollution, biodiversity, etc), which in turn may be an economic boomerang.

    • Luis Gutierrez: You make a substantial overstatement.

      I’m an advocate, as most people are, for protecting the environment of pollution, and certainly maintaining biodiversity. Relative to pollution it should be noted, per EPA, that air quality has continued to improve in the U.S. over the last 50 years.

      Per EPA: Air Quality Improves as America Grows.
      Nationally, concentrations of air pollutants have dropped significantly since 1990:

      Carbon Monoxide (CO) 8-Hour, 77%
      Lead (Pb) 3-Month Average, 80%
      Nitrogen Dioxide (NO2) Annual, 56%
      Nitrogen Dioxide (NO2) 1-Hour, 50%
      Ozone (O3) 8-Hour, 22%
      Particulate Matter 10 microns (PM10) 24-Hour, 34%
      Particulate Matter 2.5 microns (PM2.5) Annual, 41%
      Particulate Matter 2.5 microns (PM2.5) 24-Hour, 40%
      Sulfur Dioxide (SO2) 1-Hour, 88%
      Numerous air toxics have declined with percentages varying by pollutant
      During this same period, the U.S. economy continued to grow, Americans drove more miles and population and energy use increased.

      https://gispub.epa.gov/air/trendsreport/2018/documentation/AirTrends_Flyer.pdf

      The numbers are more dramatic if you reach back to 1970’s, the era for peak pollution for many forms.

      Relative to biodiversity, this is a concerning issue, not so much in developed nations because great strides have been made, and continues, to protect biodiversity; but more so in developing nations (the same for goes for pollution with these nations), as these cultures work to improve their lives. Yet globally developed nations have spearheaded substantial improvements in the stewardship to protect biodiversity, and resources through efficiencies gained from the development of best practices. This engaging essay provides some insight to these improvements, and provides answers to some of the why:
      https://thebreakthrough.org/journal/issue-5/the-return-of-nature

    • Pollution does seem to be less in economically developed countries.
      Further, urbanization seem to be greater in economically developed countries.

      Mao said that morality was a luxury of the rich.
      I don’t know about that, but the environment seems to be a luxury of the rich, and increasing economic development may well be good for the ‘environment’.

  3. Linear thinking on a nonlinear planet. It is all hugely pointless and irrelevant. Skeptics imagine that they can predict climate, hydrology or biology systems evolution and seem to be encouraged in this delusion by the Queen of uncertainty. A perplexing elephant.

    “Many tipping points have been analysed in separate subsystems, both for phenomena of the present-day climate (Bathiany et al., 2016; Lenton, 2011), and for past climates (such as the abrupt cooling of the Younger Dryas, Livina and Lenton, 2007, and the desertification of the Sahel region, Kutzbach et al., 1996). However, less attention has been paid to the interaction between transitions in different subsystems. For example, when the AMOC collapses, precipitation patterns may change such that the equilibrium structure of the vegetation cover in the Amazon rainforest is shifted (Aleina et al., 2013). This may result in another transition, concerned with forest growth or dieback. Another example is the influence of the AMOC on the trade winds (through meridional sea surface temperature gradients), which in turn influence the amplitude of ENSO.” https://www.earth-syst-dynam.net/9/1243/2018/

    “Large shallow-cloud decks, 1000s of km in extent, form over the eastern and central subtropical oceans, reflecting back to space a significant fraction of the incoming solar radiation (10 s of W m−2), much of which would have otherwise been absorbed by the ocean.

    To a first approximation these cloud system dynamics can be considered as an atmospheric analogue to Rayleigh-Bénard (R-B) convection1. Heat from the lower, warmer plate (the ocean) is transferred by convection to the colder one (top of the marine atmospheric boundary layer – MBL). The R-B analogy is far from complete, e.g., because of the non-uniformity of the MBL2,3, cloud and rain formation, feedbacks related to phase transitions and radiative effects. Nevertheless it offers interesting physical intuition into the problem of state selection in marine cellular convection3.” https://www.nature.com/articles/srep02507

    Bistable and nonlinear transitions between closed and open cells cause large variability in the global energy budget. Closed cells persist for longer over cool ocean surfaces before drizzling out to leave open cloud cells. Because these are low level clouds SW changes dominate in a positive feedback to SST. Pacific Ocean Hurst-Kolmogorov dynamics modulate global energy content over decades to millennium.

    “Global mean (a) shortwave (SW) and longwave (LW) and (b) net top-of-atmosphere (TOA) flux anomalies for March 2000–September 2017 from CERES Energy Balanced and Filled (EBAF) Ed4.0. Thin lines denote monthly anomalies, thick lines are 12-month running means. Vertical black bars show the Multivariate ENSO Index (MEI). Anomalies are calculated relative to climatology over the entire period. SW and LW TOA flux anomalies are defined as positive upwards and net TOA flux anomalies are positive downwards.” https://www.mdpi.com/2225-1154/6/3/62/htm

    See Koren 2017 – https://aip.scitation.org/doi/10.1063/1.4973593

    This may be the subsystem most vulnerable to tipping point cascades in the Earth system.

    e.g. https://www.nature.com/articles/s41561-019-0310-1

    • Is your analysis falling into the same uncertainty trap?

      • The difference is that I predict surprises that by the nature of Hurst-Kolmogorov dynamics in geophysical time series – won’t be gradual global warming.

      • Presumes your non-linear systems analysis is accurate. I do not see how that can be proved one-way-or-the other.

      • Proven long ago. FFS if you are going to try to ‘discuss’ science – grow up.

        e.g. https://history.aip.org/climate/rapid.htm

        “In 1951, Harold Edwin Hurst published a paper in the Transactions of the American Society of Civil Engineers (Hurst 1951) that was to become one of the most influential and highly cited papers in the field of scientific hydrology; this was supplemented by two more (but less widely cited) papers: one in the Proceedings of the British Institution of Civil Engineers (Hurst 1956), and one in Nature (Hurst 1957). His unique characterization of long-term variability in Nile flow records and other geophysical time series, based on remarkable scientific insight, and years of painstaking data analysis in pre-computer days (Sutcliffe et al. 2015), revealed that hydrological and other geophysical time series exhibited statistical behaviour that could not be reconciled with the then prevailing theory (Hurst 1951). This finding, which came to be known as the Hurst Phenomenon, intrigued hydrologists and statisticians alike, and a mathematical/statistical framework that could explain it was not to emerge until some 15 years later, even though Kolmogorov (1940) had laid down its mathematical foundation, which however was totally unknown to Hurst and to the hydrological and statistical communities.” https://www.tandfonline.com/doi/full/10.1080/02626667.2015.1125998

      • Robert I Ellison: e.g. https://history.aip.org/climate/rapid.htm

        https://www.tandfonline.com/doi/full/10.1080/02626667.2015.1125998

        Interesting reading, or re-reading as the case may be, but not pertinent to this thread which is about: Supposing that a 3C rise in temperature were to occur, what else might we expect in consequence?

        Skeptics imagine that they can predict climate, hydrology or biology systems evolution and seem to be encouraged in this delusion by the Queen of uncertainty.

        Are you certain that it is “skeptics” who are warning us to be prepared for a 3C rise in temperature?

        The difference is that I predict surprises that by the nature of Hurst-Kolmogorov dynamics in geophysical time series – won’t be gradual global warming.

        It hardly requires any particular mathematical approximations of dynamical climate to predict that some changes will happen without their having been predicted. Recall, you also predicted an unspecified climate change by 2028. Presumably you will be surprised if that does not happen, confirming your prediction of surprises.

    • Not really relevant.

      The current accepted wisdom is that economic costs of warming of to 3C justifes the cost, without addressing what might happen thereafter (e.g. speculation over runaway temperature increases), this study argues the situation is actually reversed, warming makes us better off.

      If you want to make the case that runaway temperatures are just around the corner, by all means make your case, but on this thread?

      I should add that the existence of fractional Gaussian noise in hydrological processes doesn’t prove your case, contrary to your assertion.

      • Not the point at all. The future may be warmer or cooler – but it will certainly be nonlinear and unpredictable Mandelbrot’s fractional gaussian noise is not the point either. Hurst-Kolmogorov dynamics in geophysical time series is. If only you understood what that was.

      • To help you I went looking and find there is an appropriate paper D. Koutsoyiannis, “The Hurst phenomenon and fractional Gaussian noise made easy”. Enjoy.

        “Non-linear” doesn’t imply “unpredictable”, but I repeat, this study (and the earlier body of work) doesn’t depend on how we get to 3C, or what happens thereafter. Your dog is in another fight.

      • Dimitris Koutsoyiannis has been a favorite of mine for a long time. But tell me – which part of ‘surprises’ don’t you understand?

        “Since “panta rhei” was pronounced by Heraclitus, hydrology and the objects it studies, such as rivers and lakes, have offered grounds to observe and understand change and flux. Change occurs on all time scales, from minute to geological, but our limited senses and life span, as well as the short time window of instrumental observations, restrict our perception to the most apparent daily to yearly variations. As a result, our typical modelling practices assume that natural changes are just a short-term “noise” superimposed on the daily and annual cycles in a scene that is static and invariant in the long run. According to this perception, only an exceptional and extraordinary forcing can produce a long-term change. The hydrologist H.E. Hurst, studying the long flow records of the Nile and other geophysical time series, was the first to observe a natural behaviour, named after him, related to multi-scale change, as well as its implications in engineering designs. Essentially, this behaviour manifests that long-term changes are much more frequent and intense than commonly perceived and, simultaneously, that the future states are much more uncertain and unpredictable on long time horizons than implied by standard approaches. Surprisingly, however, the implications of multi-scale change have not been assimilated in geophysical sciences. A change of perspective is thus needed, in which change and uncertainty are essential parts.” https://www.tandfonline.com/doi/full/10.1080/02626667.2013.804626

      • So you’ve caught up on why I referred to fractional Gaussian noise, but not on why this issue is irrelevant to the matter in hand.

      • Fractional Gaussian noise was Mandelbrot’s 1968 stationary statistics involving ‘infinite memory’ as an explanation of Hurst-Kolmogorov stochastic dynamics. But I’m sure that having Googled – if not read – a paper that you know all about it. There is a more modern explanation. And it creates – as Koutsoyiannis said – unpredictability and uncertainty.

        But the much simpler point you don’t get is that there is no basis for making any prediction about future temperature. hydrology or biology at all. Skeptics whine about climate changing, the little ice age, models or early 20th century warming – but here you’d like to hypocritically and perversely hang on to predictability on the basis of CO2 forcing.

      • One last try, and then I’ll leave you to your rivers.

        It doesn’t matter if we get to 3C because your God threw a dice, what this paper says it looks as though we’ll be economically better off, contrary to public opinion.

      • If there is no sound basis for predicting 3 degrees C warming – and geophysical data everywhere shows rapid and dramatic change at all scales – what is the point of pontificating as if it were real? I’ll leave you to your fractional Gaussian nonsense.

      • Robert Ellison wrote:

        The future may be warmer or cooler – but it will certainly be nonlinear and unpredictable

        That is wrong, in the past warm periods followed cold periods and cold periods followed warm periods with a few hundred years in one state and then switching to the other state. What has happened, will happen, and that is predictable. We are warm now, we will have some severe events, but it will take a few hundred years to rebuild sequestered ice and then, not before then, will the oceans cool and end this warm period with more evaporation and rain and snow and sequestering of ice in cold places that will advance and cause colder, later.

      • Robert I Ellison: If there is no sound basis for predicting 3 degrees C warming – and geophysical data everywhere shows rapid and dramatic change at all scales – what is the point of pontificating as if it were real?

        The argument is symmetric: if you can’t reliably predict that a 3C increase can’t happen, then you ought to at least consider what the consequences might be should it in fact happen.

        “Pontificating” is just another example of toxic rhetoric.

    • The world has been cooler and warmer – and transitions are commonly abrupt in geophysical time series. Subsystems such as ice, cloud, dust, vegetation, CO2, AMOC etc. are involved. Triggered by random events or slow changes in insolation or orbits – the subsystems interact in dynamical complexity to produce in practice and in principle unpredictable variability on all scales. Mandelbrot does come into it – it is described as fractal by those in the know.

      “Lorenz was able to show that even for a simple set of nonlinear equations (1.1), the evolution of the solution could be changed by minute perturbations to the initial conditions, in other words, beyond a certain forecast lead time, there is no longer a single, deterministic solution and hence all forecasts must be treated as probabilistic. The fractionally dimensioned space occupied by the trajectories of the solutions of these nonlinear equations became known as the Lorenz attractor (figure 1), which suggests that nonlinear systems, such as the atmosphere, may exhibit regime-like structures that are, although fully deterministic, subject to abrupt and seemingly random change.” https://royalsocietypublishing.org/doi/full/10.1098/rsta.2011.0161

      Not sure when I ‘predicted’ a phase change between fractionally dimensioned state spaces occupied by the Pacific Ocean. Perhaps it has already happened. As for 3 degrees C – pick a number and pontificate? Something both intellectually vacuous and politically incoherent. The climate paradigm has moved on to tipping points

  4. Moot point since we are entering a Little Ice Age on the way to a full blown ice age

  5. This is as rational and well formed as the IPCC negative views of change, and takes a better approach to that ised in the assertive nonsense based on consensual presumption of UN eco fascism. Peter’s direct numerical approach to quantifying the nonsense of solar PV plus pumped storage as a stand alone energy source was very sound, and the lake sizes in Sydney harbours illuminating, as was his pointing out that nuclear can get a lot cheaper once the power stations are in mass production, as with coal and gas. AND ANOTHER THING.

    If 21st Century Science still believes in deterministic physics and observational proof, then Fourier analysis of the actual temperature record must be correct, and three main solar cycles combine to produce the observed change with no monatonic signal that would evidence AGW. “Al we see is cycles”. This closest to reality deterministic and model free approach shows a maximum caused by multiple cycles combining positively in c. 2000, and its cooling from now, then warming, then cooling, as we slip VERY slowly into the neo glacial. POINT Humans do diddly on the scale of natural cyclic planetary and solar effects that all happen too slowly to observe actual global climate change in a human lifetime. Forgeabout it, as Tony Soprano might say. In case you have not seen this elegant piece of 2017 science yet: https://www.youtube.com/watch?v=l-E5y9piHNU

  6. Heating and cooling is only a part of energy expenditure, of course, but the NOAA US Residential Energy Demand Temperature Index sure bears out a decrease of heating/cooling energy with the global warming to date

    ( https://www.ncdc.noaa.gov/societal-impacts/redti/USA )

    • Could also be the impact of more efficient HVAC equipment, as driven by economics; folks wishing to save money.

      • The index is based on so called “degree days” ( temperature difference from 65°F ).

        Doesn’t measure the actual energy expended, but the demand for it.

        As you say, continuing improvement of efficiency have probably decreased actual energy use even more.

    • TE, please explain the relevance for assessing climate change impacts on energy consumption. NOAA describes the REDTI as “a valuable tool for explaining year-to-year fluctuations in energy demand for residential heating and cooling” (https://www.ncdc.noaa.gov/societal-impacts/redti/overview).

      The fine print then seems to suggest that REDTI is not suitable for estimating long-term trends in energy demand: “To determine how well the index captures year-to-year changes in energy demand, the REDTI was correlated with residential energy consumption*** for the period 1980-2000/01. National residential energy consumption values are available from 1973 through the winter of 2001, but because the later half of the 1970’s was a period of dramatic change in energy conservation methods, high energy prices, and changing demand patterns, these years were omitted from the analysis. The effects of an increasing trend in residential energy consumption since 1980 were removed by linearly detrending the energy consumption time series prior to the correlation analysis. Because other factors, such as the effects of generally increasing US temperatures, are also removed from the detrended energy consumption time series, the REDTI was also detrended.”

      • From the above: “Residential energy consumption is known to be highly correlated with heating and cooling degree days.”

        Heating and cooling efficiency, insulation, home size, etc. etc.
        can all change the actual energy expended, presumably downward.

        But the index is of temperature, not energy.

        The index indicates the need for combined Heating/AC has decreased.

  7. Reblogged this on evilincandescentbulb and commented:
    “Carbon dioxide levels have risen inexorably since the 1700s. Yet despite this, climate sensitive indicators of human and environmental wellbeing that carbon dioxide affects directly, such as crop yields, food production, prevalence of hunger, access to cleaner water and biological productivity, and those that it affects indirectly, such as living standards and life expectancies, have improved virtually everywhere. In most areas they have never been higher, nor do they show any sustained signs of reversing.” ~Freeman Dyson

  8. Energy expenditures include power generation infrastructure, especially going for 100% renewables. Consider the following:

    “Providing 100% Energy from Renewable Sources is Impossible”
    By David Wojick

    See: https://www.heartland.org/_template-assets/documents/newsletter-issues/February%202020%20Environment%20and%20Climate%20News.pdf
    Page 21

    Synopsis: The astronomical cost of batteries makes anything even close to 100% renewables economically impossible. At today’s prices, the batteries required to properly back up a wind farm would cost about 250 times as much as the farm itself. So even if the price dropped enormously the cost would still be prohibitive.

    The reason is extreme intermittency, which never gets mentioned in the grand schemes for renewable power. It is common for a wind farm to generate little to no power for an entire week. To supply that missing power from backup batteries is unbelievably expensive, if it can be done at all.

    Details in the article.

  9. To achieve a meaningful estimate of the economic impact of warming, you have to consider the source of the energy you use and factor in, along with the price of the energy (adjusted for the specifics of the energy source), external costs associated with the resource acquisition – such as the cost to human health from atmospheric particulates, the costs of environmental damage, or the military expenses associated with keeping oil flowing.

  10. Nice paper but the question of economic impact of weather-climate is not very relevant. What is far more immediate and real is the question what will be the economic and societal consequences of the draconian policies on fossil fuel use (non-use) that are now being rolled out by governments around the world. These are bad.

    Four horsemen of the apocalypse have been summoned by the global climate policy consensus and they are on the way: economic breakdown, famine, war and death. The world’s most brilliant political minds have identified the single foundation of prosperity, quality of life and survival – cheaply available energy – and scheduled it for termination. Energy that is reliable and cheap will soon be unreliable and very expensive. The car – a huge chunk of our economic structure and mobility – has just been killed. Major economies have now mandated only toy electric cars within 10-15 years. So millions connected with the auto industry will soon lose their jobs. I’ve just ordered a diesel car for our family and it’s the last serious car that we will ever have. After that we’ll be forced to drive around on sewing machines with wheels, at great risk, or just stay at home.

    This new climate fascism is a triumph of Malthusian misanthropy. Energy availability raised the masses from grinding subsistence poverty and feudal enslavement, to independence, prosperity, health and longevity. The elites have always hated this. The Thunberg-elites hunger and thirst for a return of what seems to them the natural status quo – the majority of the population as feudal serfs ties to the land around Thunberg castles working for the Thunberg royalty as peasant farmers, owned by them as in Russian serfdom. That’s where Greta Thunberg and her aristocratic parents and support apparatus are leading us. They want a future looking like the Game of Thrones. Thunbergs inside the castle, us peasants hand-tilling the land outside, fighting and dying in internecine wars.

    As a poet once said, “these are the good old days. Just wait and see.”

    • Thanks Phil. You are correct of course. But these cost are included and captured in the Policy Implications section:

      “The economic impact of climate policies is likely to be substantial. It is the sum of the economic impact of the policies and the cost of implementing and maintaining the policies. If global warming is beneficial, as this study indicates may be the case, then the total economic impact is the sum of the forgone benefits of the avoided global warming plus the cost of policies to mitigate warming.”

  11. Tipping points in the warming phase of change? My scientific arse. HOW? Get you noses out of fancy models of insignificant details? Take a step back and look at the real control in the joined up surface system that is controlled by the 2/3 ocean cover. Water vapour GHE mostly changes the lapse rate to space. But GHE adds no heat to the overall system and is not a major effect compared to this dominant control of insolation by the negative feedback of evaporate cooling, cloud formation and the resulting cloud albedo, with rising SST, currently at a total effect of c.150W/m^2. I recall this was put at 2.6W/m^2 per SST degree by the UAH group? Then there’s the T^4 Stefan Boltzman problem JC reminded me of.

    To help understand real planetary dynamics of the natural control of “runaway” interglacial rise, (0.1 degs/Century), look at the interglacial end of the event, almost flat lined while the cause is still present. By what? Answer is the only available but massive negative feedback of water vapour evaporation increasing exponentially with SST as the oceans warm, a massively greater effect on the overall climate balance that is unaffected or unworried by the lapse rate changing, by H2O GHE or AGW effect we can’t actually detect.

    So no tipping point while covered in oceans in the goldilocks zone. Because the hotter it gets, the harder it gets to get hotter. Right? That’s almost Rumsfeldian.

    Also “Near as hot as it can get” as JC said. It’s -273 C out there and the smart lagging does a great job of keeping it at around 280 with the occasional 8 degree rise until the system control gains enough feedback around the temperature we currently enjoy, maintaining it for a few thousand years as the warming perturbation dies down and we slide back to glacial temperatures while varying up and down a couple degrees of cyclic solar effects and, I suggest, the lesser (than at 100Ka) ocean warming effects of the submarine volcanicity of the 41Ka and 23Ka cycles,. The natural system of the last 3.5M years, through 100Ka and 41Ka ice ages. But that’s only what science observes. Not what people want to believe in the new observation free consensual science.

    1.6 w/m^2 won’t change this, just cause a bit more water vapour feedback to maintain equilibrium through insolation reduction.

    “Read my lips. No tipping point – upwards at least.”

    The oceans have a lot left to give in increasing negative feedback to SST rise. Why would it stop?

    PS BUT if it gets much colder in the glacial phase, and we run out of clouds to lose at the cold end of the range, the oceans start to freeze and their albedo increase, THATS a tipping point. ……. FROZEN!

    I hope I made that simple enough for those fiddling their models while the planet isn’t burning? Analogies getting worse now….. scientific correction welcome. Even a case that denies the obviously stable natural system I describe above, for obvious reasons that real climate science has observed working in fact.

  12. Geoff Sherrington

    Ken & Peter,
    The graph labelled fig. 15 does not seem to balance. For example, at its right end, 3 deg, the negative %GDPs sum to about 1.1 units and the positive to 0.8 units giving a total of minus 0.3 units, not the minus 0.7 shown by the black line intercept. The black line, if incorrect, paints a rather more dismal picture than it should.
    Maybe these units cannot be added, but offhand I can’t think why not. Do they carry relative weights?
    Many of us know that your paper was crying out to be written, but you two have taken up the task, for which you are thanked. Geoff S

    • Hi Geoff,
      The FUND3.9 projected global impacts by sector at +3˚C GMST from 2000 are:
      Agriculture 0.61%
      Storms -0.01%
      Sea Level -0.02%
      Health -0.03%
      Ecosystems -0.16%
      Water -0.17%
      Energy -0.89%
      Total -0.68%
      Total excl Energy 0.21%

      Some lines are almost hidden below others, so you may have missed some.

    • Geoff Sherrington

      Sorry Peter,
      I did indeed fail to see a partially hidden line and missed counting ecosystems in green colour.
      Apologies – I hate wasting your time. Geoff S

  13. Most of the comments on this post so are off-topic. The paper is about testing the validity of the FUND energy impact functions and the economic impact of global warming. It is not about climate change and its causes. HAS’s and Phil Salmon’s comments are relevant and on topic.

    • Yes, Peter, your paper isn’t based on vague projections but established relationships, and how changing temperatures would impact on different areas. It is a good assessment of actual costs and benefits, which is rarely if ever the case in long-term modelling which assumes that in a very uncertain and chaotic field we can correctly determine future paths in various variables. I hope that it has a big impact on policy, particularly in Australia where too many influential people and bodies have accepted the need for very costly and damaging policies which will have no benefit.

  14. It seems to be the same issue. Lewis and Curry used what I call empirical data. Setting up a conflict with the models, or not depending on how you spin it.
    How are we doing economically? Fine. We have first world problems. ‘Solved’ by buying a Telsa and banning plastic bags. If there’s a crisis, I am still waiting for it to show up. What a con.

  15. Peter and Gregory wrote: “According to Lomborg, any reductions in temperature resulting from the Paris Agreement promises would be minimal but at high cost. For example, Lomborg says that all Paris promises 2016–2030 will reduce global temperatures by just 0.05 °C in 2100, and by 0.17 °C if they continue to 2100.”

    If you look carefully at Lomborg’s scenarios, he finds that if all the Paris promises for 2016-2030 were kept AND THEN GRADUALLY REVERTED TO 1990’S BUSINESS-AS-USUAL, this will reduce global temperatures by only 0.05 degC in 2100. See Figure 7 for Lomborg’s absurd optimist and pessimist emissions scenarios for the EU: 2015 emissions already -15% vs 1990 baseline, Paris promise -40% vs 1990, optimistic 2100 scenario rising back to -15% vs 1990, and pessimistic 2100 scenario rising to +20% above 1990. The Paris agreement don’t say anything about emissions after 2030, so Lomborg was free to chose any scenario for post-2030 and assert it is consistent with the Paris promises for 2030. It was absurd for Lomborg to claim that any temperature reduction in 2100 would the result of an agreement lasting only from 2015-2030. See:

    https://www.cccep.ac.uk/wp-content/uploads/2015/12/Working-Paper-218-Ward-2015.pdf

    Lomborg also made dubious post-2030 assumptions for China: emissions for 2050-2100 double emissions in 2015, even though China has said its emission will peak by 2030. Pessimistic US emissions are slightly greater emissions in 2100 than 1990; optimistic 20% less than 1990. And so on.

    In the Supplemental Material (possibly requested by a referee), Lomborg shows reductions in warming for one meaningful scenario: Global CO2 emissions constant at 2016 levels. Result: 1.2 degC less warming by 2100. The Kyoto Accords pledged emissions reductions by developed countries. The Paris Accords promised reduction in emissions growth in developing countries and continuing emissions reductions by developed countries inadequate to offset the growing emissions of developing countries. With population no longer rising and improving technology, the next step might be stabilizing emissions by 2050 and some reduction in the second half of the century. That scenario would be roughly the equivalent of stable 2016 emission for the rest of the century and a reduction of warming of 1.2 degC in 2100. Do I expect nations to keep aspirational commitments such as these? Probably not. Nevertheless, IMO roughly 1 degC less warming, not 0.05 degC, is consistent with the aspirations of the Paris accords.

    https://onlinelibrary.wiley.com/doi/pdf/10.1111/1758-5899.12295

    https://onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1111%2F1758-5899.12295&file=gpol12295-sup-0001-Suppl-

      • Peter: Thanks for the replies. Despite text searching every “28” in the link you provided, I couldn’t find anything relevant to my comment. However, the link to Lomborg’s Congressional testimony helps me make my point more clearly. In short paragraphs 5-10, Lomborg say:

        “If everybody does everything that is promised in Paris, we will cut the equivalent of 56 gigatons of CO2 until 2030. This is incontrovertible. Obviously, you can talk about is it 40, is it 50, might it be 60? …
        Now, let me to show you briefly with the Clean Power Plan … it’ll reduce emissions by 4 gigatons by 2030 and … it will reduce temperatures by 0.0023 degrees Fahrenheit.”

        From 0.0023 degF/4 GtCO2, one can calculate that the MAGICC model Lomborg is using has TCRE of 0.32 K/1000 GtCO2 or 1.2 K/GtC. This value is similar to the IPCC’s central estimate of 1.6 K/GtC and Nic Lewis’s estimate of 1.05 K/GtC discussed in the Climate Etc. post linked below. I find it much easier to think about this subject in terms of TCRE.

        https://judithcurry.com/2018/12/11/climate-sensitivity-to-cumulative-carbon-emissions/

        So a reasonable statement would be that the 56 GtCO2 reduction promised in the Paris INDCs will reduce warming by 0.067 K in 2030, WHEN THOSE COMMITMENTS EXPIRE. It isn’t reasonable to speculate about 2100, especially when the assumptions Lomborg makes are vastly different from the direction the world has taken since 1990. Lomborg is assuming a return to pre-1990 policy. (If the cost of emission reduction is greater than the benefits of emissions reductions, it may make sense for the world to return to pre-1990 policy. In that case, Lomborg should have clearly stated his opinion that emission reductions are not cost-effective and that policymakers therefore will revert to pre-1990 policies and that as a consequence of THAT POLICY CHOICE, the reduction in warming by 2100 will be only 0.05 K.)

        The INDCs tell us nothing about reduced warming in 2100 and Lomborg has no business guessing what will happen – especially when his assumptions are so radically different from the DIRECTION of the Paris accord and not clearly stated.

        For the past half-century, GMST has been rising at a rate of about 0.2 K/decade or about 0.3 K over the 15-year period of the Paris accords. 0.067 K reduction would be a 22% REDUCTION IN WARMING over this period. IMO, this is a fair description of the Paris accords.

        If one wanted to speculate about future, the Paris accords might be considered to point us in the direction of a deceleration in emissions of about 40 GtCO2/decade/decade. We currently emit almost 400 GtCO2/decade. Over the next eight decades, that would amount to a total reduction in emissions of 1.3 GtCO2. Assuming a TCRE of 0.32 K/1000 GtCO2, this would be a reduction of 0.42 K.

  16. Peter and Ken: I’m always confused with I look at graphs of %GDP vs GMST change such as your Figure 9. On the pink curve, the data point 2.3 degC of warming as at -0.5% GDP. Question: If +2.3 degC is reached in 2100 and GDP were growing at a real 1%/yr, does this mean that: (a) warming would have delayed increasing prosperity (GDP growth) by half a year? That seems so trivial. Or does it mean that (b) GDP GROWTH each year will be reduced by 0.5% due to the money being diverted from investment to adaptation?

    • Figure 9 is % change in GDP p.a. versus GMST change from year 2000. At +3C GMST change, the increase in US energy expenditure would reduce GDP by 0.8% GDP p.a. (with not temperature drivers held constant).

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  21. Whoever said it above nailed the question, well asked on a version of the UAH models versus actuals graph.

    Who to believe, the observed measurements from nature, and their analysis using deterministic methods, OR the partial and poorly understood models made up by some weathermen and forced to fit actual data using numerical methods and pre judged cross sensitivity assumptions, not proven laws, that then can’t predict the future for that very reason, because they’re wrong. CO2 sensitivity nearly down to zero now….

    Natural cycles detected in the observations say its getting cooler from 2000, so it probably is. Those “adjustments” must be getting really hard to justify.

    The IPCC will have to find a way to control energy and agriculture based on AGC (Go figure.). Temperatures can go down as well as up.

    Tax renewables, Veganism, organic foods, bicycles?? It really doesn’t matter climate wise, because human effects on the climate are pathetically small and undetectable in observed fact, there are NO monotonic signals in the Fourier analysis of the last 100 years of the natural temperature record. All we see is cycles.

    APART FROM THE ECONOMICS – maximising how we use humanity’s hard won free time and creativity to deploy our increasing surplusses from energy use to best defend humanity against nature. The opposite effect by deliberately damaging our economy by law is a clearly dumb idea. Now humanity is achieving the best times ever, let’s make things much worse by law, based on clearly deceitful cult science?

  22. Interested Observer

    As a student of science, I can confidently say – my favorite part of reading this blog, apart from the science ofcoarse – is reading @RobertEllison and @DAppelle belittle and cast stones at the ‘kids’ who question their superior knowledge and authority. Their replies to the ‘common man’ are always so refreshing, broadening the discussion with every dilemma and in the case of Mr. Appelle, every question.

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  24. Peter, one thing that you left out (which is of prime importance) is the role of central banks. Particularly, the u.s. federal reserve, as you seem to be basing your study on the notion that wherever the u.s. economy goes, the rest of the world will follow (👍). If warming becomes a net negative on economic growth, then central banks will compensate by keeping interest rates lower, thereby stimulating economic growth. If on the other hand, warming, as you say, becomes a positive, then the central banks will raise interest rates to dampen economic growth.
    i think that what we’ve seen over the last decade economically in the states is a microcosm of what i’m saying here. (although, not due to climate change nor policies, but the governing styles of two very different potus) Slow Poke Obama was so inept at instilling consumer confidence that the economy crawled along for most of the decade. He was the benefactor, though, of rock bottom interest rates. So, his ineptitude didn’t exactly cause the ship to tank, but it didn’t set any recovery records either. Conversely, Fast Hand Trump was rather quick to get things jumpstarted. His success soon brought about the wrath of the federal reserve, though, much to his dismay. Things had gotten so bad that the mere spector of trade talks going awry with China gave us the threat of looming recession. (never underestimate the power of a bonehead chairing the fed)…
    Any discussion about the economic impacts of climate change and its policies must take into account the actions of the central bank.

    • afonzarelli,

      Thank you for your comment. However, the scope of the paper is to test the validity of the FUND energy impact functions against empirical data. The paper does not attempt to derive new energy impact functions and it does not test the non-energy impact functions. Given the impacts found from the empirical data we then estimate the economic impact of global warming on energy consumption change and then, accepting the projections for the non energy impact functions, we estimate the economic impact of +3C GMST change.

      • Fair enough…

        i just think FUND is a meaningless model (at least as is), given that the fed would compensate for any losses even if FUND were true. So, the horse is stumbling out of the gate right there. On the whole, this great (green) mess is a comedy of errors with regard to climate science, political science & economics. And the chances are mighty remote that anybody (let alone everybody) on their side has all three of those disciplines, as they relate to climate change, figured out. (and, to that end, junk models like FUND don’t help)…

    • If we are looking at end-century, there is no way we can sensibly foresee the central banks’ posiitons. In general, such long-term predictions are not a good basis for policy. Those Western countries who determine policy to a great extent on the basis of prospective harmful warming are very misguided and not serving their populations well. What will prove to be the major concern or most dangerous development in the next 80 years? No one knows, yet they focus on one possible, distant threat. Non-Western countries give lip service to CAGW and carry on dealing with pressing issues of growth and poverty.

      • … it appeareth that cooling
        of yr buildings cost lesseth
        than heating of yr buildings
        when winter winds biteth
        (‘n food production declineth,)
        In high latitudes, history telleth
        us so , in winter, critters ‘y starveth
        and in pre-industrial times
        we homo sapiens also.

      • If we are looking at end-century, there is no way we can sensibly foresee the central banks’ posiitons

        THE FEDERAL RESERVE:
        CREATING RECESSIONS SINCE 1913

        (some things don’t change)…

  25. Ireneusz Palmowski

    Again a large increase in galactic radiation. There is a minimum of solar activity.

  26. Ireneusz Palmowski

    Forecast Hour:108

  27. Geoff Sherrington

    Thank you Peter. If only the other pair of thread bombers would voluntarily withdraw to a sensible level of commentary.
    Can I support your request that bloggers stick to your clearly defined topic?
    You make a clear case for better estimations. I was looking forward to some practical suggestions from fellow bloggers, not mostly crickets. Geoff S

  28. A ‘perturbed physics’ ensemble showing the ‘evolution of uncertainty’ in a single model subject to minute differences in initial conditions. We can compare that to observational estimates of climate sensitivity. Both neglect internal variability and hydrology and biology barely get a mention in either. And the best Sherrington can do here is say that they are calling for better estimates. 🤣

    Quite apart from making an unsupportable assumption about global warming this century – the post misses the utility of practical responses to ‘grand human challenges’. A multi-gas and aerosol pollutant reduction strategy – CFC’s, nitrous oxides, methane, black carbon and sulfate. Ongoing decreases in carbon intensity and increases in efficiency and productivity. And technical innovation across sectors – energy, transport, industry, residential and agriculture and forestry.

    There are ways to a bright future for the planet, its peoples and its wild places – but these need to emerge bottom up in a broad context of economics and democracy, population, development, technical innovation, land use and the environment.

    And before I get accused of thread bombing again by some motivated denizen with nothing more than paltry complaints and incompetent generic contributions. I made one comment that refuted Peter Lang’s fundamental temperature assumption – so completely on topic unless some halfwit decides that being on topic depends on accepting the explicit assumption on which the whole house of cards is constructed and proceeding on that basis only – with some responses to scientifically inept replies. There are ways to a bright future – but this sort of nonsense is not it.

    • “…the post misses the utility of practical responses to ‘grand human challenges’. A multi-gas and aerosol pollutant reduction strategy – CFC’s, nitrous oxides, methane, black carbon and sulfate. Ongoing decreases in carbon intensity and increases in efficiency and productivity. And technical innovation across sectors – energy, transport, industry, residential and agriculture and forestry.”

      I suppose questions regarding any degree of change is always a relevant one; but aren’t the responses to environmental change (the good kinds) already substantial, demonstrable; say since “Earth Day” was coined in the U.S.? The 50 year trend representing humans getting its environmental act in motion may yet lack desirable metrics for the many who aren’t looking, or are impatient, or…, but the trends are anything but subtle; it cries out for its own choir of prognostication, yet the singers are mostly crickets.

      In the context of climate and measuring ecological improvements, a human life, as precious as it is, represents a fleeting moment to measure against, a mere drip, but for those individuals who think of these things, patience must slog along like an eternity. So there we have it; substantial environmental improvements, and death of the planet all measured within the context of two generations while exponential growth of technology occurs between human meals. Something is missing in the appraisal process.

      I like many of you land use ideas BTW.

      • “Only rich economies can afford environments. … I made a long comment about economics in the last week in review.”

        Stylish platitudes, but lacking; don’t you think a developing nation can bypass innovation and borrow from already sunk costs for advances in technology developed nations have created, say, to plop simple tech like a windmill in a beneficial locale to generate a bit of power for essential needs for a community, bypassing the need entirely to invest in technological innovation? Sure. And probably much more in the way of possibilities in the not too distant future. If they do this, or don’t, is besides the point; corrupt governance serves as an example roadblock to simple advances for certain regions; the corruption in the distribution of financial aid, conflict.

        Your economics argument was lacking too; $100 trillion in global wealth services 150 trillion in global debt. If you believe money can be printed to service the worlds needs, then we simply differ.

      • It seems you haven’t read or understood anything of what I wrote. Increased agricultural productivity, increased downstream processing and access to markets build local economies and global wealth. Economic growth provides resources for solving problems – conserving and restoring ecosystems, better sanitation and safer water, better health and education, updating the diesel fleet and other productive assets to emit less black carbon and reduce the health and environmental impacts, developing better and cheaper ways of producing electricity, replacing cooking with wood and dung with better ways of preparing food thus avoiding respiratory disease and again reducing black carbon emissions. A global program of agricultural soils restoration is the foundation for balancing the human ecology. And you waffle on about printing money when I specifically discuss money supply in the context of the Austrian school of economics?. You are wasting my time.

      • “Increased agricultural productivity, increased downstream processing and access to markets build local economies and global wealth. Economic growth provides resources for solving problems – conserving and restoring ecosystems, better sanitation and safer water, better health and education, updating the diesel fleet and other productive assets to emit less black carbon and reduce the health and environmental impacts, developing better and cheaper ways of producing electricity, replacing cooking with wood and dung with better ways of preparing food thus avoiding respiratory disease and again reducing black carbon emissions. A global program of agricultural soils restoration is the foundation for balancing the human ecology. ”

        I can’t argue with much of what you’re saying here; do you think this is the thrust of what you described in the “100 trillion” post I referenced? The Copenhagen Consensus is essentially a massive transfer of wealth from developed nations, to underdeveloped nations. Many developed nations are already strapped with massive deficits and debt. It’s the stress of this transfer of wealth that I suggest a resultant outcome for, without breaking down all the ramifications implicit in your post. In the U.S. the Fed still has the daunting task of cleaning up its balance sheet post Great Recession. The Copenhagen Consensus is bad news based on the many forms of taxes and punitive measures it would generate. This program would certainly come with a consequential economic impact for developed nations, I don’t believe for the better as you do, far from it.

      • The Copenhagen Consensus is concerned with finding high value uses of committed foreign aid. As you would find out if you read past the opening sentence.

      • The global economy is worth about $100 trillion a year. To put aid and philanthropy into perspective – the total is 0.025% of the global economy. If spent on Copenhagen Consensus smart development goals such expenditure can generate a benefit to cost ratio of more than 15. If spent on the UN Sustainable Development Goals you may as well piss it away on photo opportunities for politicians and celebrities. Either way – it is nowhere near the major path to universal prosperity. Some 3.5 billion people make less than $2 a day. Changing that can only be done by doubling and tripling global production – and doing it as quickly as possible. Optimal economic growth is essential and that requires an understanding and implementation of explicit principles for effective economic governance of free markets.

        Economic growth is the least painful way of settling debt.

      • “Economic growth is the least painful way of settling debt.”

        I agree with that too.

        “The global economy is worth about $100 trillion a year. To put aid and philanthropy into perspective – the total is 0.025% of the global economy. If spent on Copenhagen Consensus smart development goals such expenditure can generate a benefit to cost ratio of more than 15.”

        While The Copenhagen Consensus is a charitable program, we’re talking here about how you would implement it as you described. You were essentially describing a plan for global prosperity, that this plan could only get you some of the way there. The only way you could get to the proposed benefit metric, a cost ratio of more than 15, would be to contribute to all their target programs, and fulfill them as a necessary step for the broader program you loosely described would be needed.

        Based on an estimated global GDP for 2020 of $90 trillion, the .025% total you describe would amount to about $22.5 billion a year (I don’t know where you got the % figure for the total spent a year on philanthropy and aid; the U.S. spent near $20 billion last year for aid alone.) Regardless, it’s unfathomable how $22 billion can cover the yearly program goals for all The Copenhagen Consensus targets. I can’t imagine .25% covering it either, $225 billion a year.

        There’s 3 buckets for expenditures in the program, many laudable, many massively expensive.

        A) PEOPLE
        Lowering child malnutrition by 40%, reducing malaria infection, reduce tuberculosis deaths by 90%; circumcising 90% of HIV-negative men in the 5 worst effected countries; Reduce newborn mortality by 70%; cut early death from chronic disease by 1/3, taxing tobacco/reducing salt intake (how it’s controlled is anyones guess); Make family planning available to everyone; Eliminate violence against women and girls.

        B) PLANET
        Phase out fossil fuel subsidies (people misunderstand this in the US, i.e., the Left will hate not subsidizing low cost heating for the poor, it also provides for strategic petroleum reserves); Halve coral reef loss; Tax pollution damage from energy (should read massive energy inflation on all citizens); Cut indoor air pollution by 20%, another big bill

        C) PROSPERITY
        Reduce trade restrictions through more free trade (doesn’t say anything about fair trade, which is why each person in the developing world earns 1k more yearly by 2030, their goal, essentially this outcome a consequence of taxes on developed nations citizens, direct and indirect, i.e. tariffs or other mechanisms); Improve gender equality in ownership, business and politics; Boost agricultural yield growth by 40% (improved yields is already increasing farm bankruptcies from the commodities crash resultant from glut); Increase girls’ education by two years; Achieve universal primary education in sub-Saharan Africa

        You state, Ellis: ” …it [The Copenhagen Consensus] is nowhere near the major path to universal prosperity. Changing that can only be done by doubling and tripling global production – and doing it as quickly as possible. [you stated this 2-3x] Optimal economic growth is essential and that requires an understanding and implementation of explicit principles for effective economic governance of free markets.”

        “Tripling global production”? Ignore supply and demand principles, flood markets? Capitalism is free markets, it “requires an understanding” of markets to be successful, it has explicit principles that guide operating efficiencies. You go on to mention “governance” of free markets, suggestive of something significant, and currently lacking, something more than the general inefficiencies that come and go within a free market and protective regulations that govern it; more than Copenhagen Consensus can fix by itself to attain prosperity, (as you stated in so many words); prosperity must be governed into existence. A planned society? There’s no mention of corruption, conflict, tyranny or religious zeal in many of these regions that would serve as the proving ground for The Copenhagen Consensus.

        But you embrace The Copenhagen Consensus which is explicit, and that it will require more. The Copenhagen Consensus would necessarily require punitive measures on developed markets, if purposefully implemented in its entirety. You returned to The Copenhagen Consensus again somewhere in the middle; the long and winding path you described essentially distills down to a transfer of wealth, starting with The Copenhagen Consensus, to underdeveloped nations to jump start this plan.

        My point as a response to what you described as the solution for prosperity, is that we can’t afford others prosperity in the way you describe under current global debt loads.

      • “Phase out fossil fuel subsidies (people misunderstand this in the US, i.e., the Left will hate not subsidizing low cost heating for the poor”

        Yes, and it won’t bother the right at all — in fact, they’ll take pride in it.

        How about we stop letting fossil fuel companies pollute for free, killing thousands of people in the process? You good with that?

      • You are making progress – reading beyond the first sentence. And even going off site for a superficial overview. I suggest you might glance now at the underlying research by Nobel Prize winning economists. But – to get back to markets and the creative energy and innovation of free people – I did somewhere in there mention the Heritage Foundation and its explicit criteria for economic freedom.

        Elimination of fossil fuel subsidies – btw – is a G20 policy. But it is not the subsidies of David’s febrile imaginings. Those barely register in developed economies when estimated using realistic definitions of subsidies.

        https://www.iea.org/topics/energy-subsidies

      • No… it was there… a wordpress glitch it seems…

      • “Phase out fossil fuel subsidies (people misunderstand this in the US, i.e., the Left will hate not subsidizing low cost heating for the poor”

        DA: “Yes, and it won’t bother the right at all — in fact, they’ll take pride in it…. how about we stop letting fossil fuel companies pollute for free”

        I think it’s a worthy subsidy, the strategic petroleum reserve also makes a lot of sense. I don’t hear a word from the Right about this particular subsidy; it’s only in the crosshairs of the Lefts inept masses clamoring to squash a subsidy that they don’t have a clue about because of the “image” it portrays of an “evil industry” that happens to be the pulse of any developed economy; it’s all about promoting ideology to non thinkers for power. The MSM doesn’t spare a moment propagandizing the subject, so what’s new there? I posted upthread U.S. metrics on the environment, it’s been getting ever cleaner for 50 years.

        RIE “But – to get back to markets and the creative energy and innovation of free people ”

        The creative energy you describe [mostly representing a euphemism for money] doesn’t come from free people and markets, it comes from a statist planned society. But by all means send them a check, they’ll make sure it’s spent properly, I’m sure.

        While my heart goes out to those billions who are governed by despots, I’m not going to support lining corrupt pockets further. Much of these grand ideas you espouse must first, necessarily, deploy substantial police actions before help can be administered to the truly needy, in many of these cultures. But if you insist, how about we start with Afghanistan? Do you think $225 billion a year will solve just that one nations issues? Besides war costs, a great deal of infrastructure has already been built there using US taxpayer dollars. Has this expenditure released that cultures creative energy or advance innovation of a free people there? The model you describe is a labyrinth of well meaning platitudes covering a money pit.

      • Productivity, entrepreneurialism and innovative solutions to grand human challenges all come from human creative energies released in economic freedom. That’s where money comes from and not the other way around.

        The only way these problems get fixed is when people are free to choose their own paths. But you just don’t seem to get it. 🤣

        https://www.heritage.org/index/

      • Innovation happens when market forces push for it. That doesn’t happen when deniers irresponsibly suppress the free market and instead subsidize uneconomic technologies.

      • I don’t hear a word from the Right about this particular subsidy

        Of course not!!! OMG — you can’t possibly be that dim.

        The EIA’s reported FY2010 renewable energy subsidy of $14.7 B has to be considered in light of the substantial damages to human health and the environment from the use of fossil fuels. The report

        “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use”
        National Research Council, 2010
        http://books.nap.edu/catalog/12794.html

        found the cost from damages due to fossil fuel use to be $120B for 2005 (in 2007 dollars), a number that does not include climate change and that the study’s authors considered a “substantial underestimate.” For electricity generation by coal the external cost was 3.2 cents/kWh ($32/MWh), with damages due to climate change adding another 3 cents/kWh (for CO2e priced at $30/tonne). Transportation costs were a minimum of 1.2 cents/vehicle-mile, with at least another 0.5 cents/VM for climate change. Heat produced by natural gas caused damages calculated to be 11 cents/thousand cubic feet, with $2.10/Kcf in damages to the climate. They found essentially no damage costs from renewables.

      • No one argues with pollutant reduction. We have the technology and it’s vastly less costly than any of the absurd numbers pulled out of the arses of acolytes.

        My original point was that only rich economies can afford environments. Analyse this in the context of cheap energy alternatives to cooking with wood and dung and the impacts of that on public health.

    • Robert I Ellison: I made one comment that refuted Peter Lang’s fundamental temperature assumption – so completely on topic unless some halfwit decides that being on topic depends on accepting the explicit assumption on which the whole house of cards is constructed and proceeding on that basis only – … .

      There is no “proceeding on that basis only” but an examination of one of the possible futures.

      You wrote no “refutation”. One of the “known unknowns” is that the accumulation of CO2 will cause an increase in the radiative forcing that will push (or has pushed) the system beyond a “tipping point” to produce an “abrupt climate change” entailing an additional 2C of warming. I called it a “known unknown”; you have written that there will surely be tipping points in the future but of unpredictable timing, direction, and magnitude — so, on your reasoning, more warming is possible. Some writers think it is a “known known” that we are already past the tipping point and the “abrupt climate change” is underway; they have written and spoken of disasters certain to come unless strong measures are taken immediately. The essay here addresses some of those warnings in more detail and with better balance.

      • An “examination of one of the possible futures.” 🤣 But I note I have not predicted anything but a repeat of the past. As documented in the AIP article Matthew claims to have read – and the references therein. Not connecting the dots seems to be his speciality – so he may have read it.

      • Robert I Ellison: But I note I have not predicted anything but a repeat of the past.

        You have not specified any particular past events, but you have predicted “surprises” and you have cited “abrupt climate changes” of the past. As I have quoted. The possibility of an abrupt mean temperature increase of 3C, occurring now, or an abrupt mean temperature increase of 2C beginning surprisingly soon, is concordant with your writing and the sources that you cite.

        You seem to be unaware of the contradictions among your several posts. Your contradictions and off-topic comments would not matter except that you insult other writers.

      • There are many climate shifts documented in the extensive literature cited. On which basis you surmise that an abrupt climate shift of 2 or 3 degrees C warming is one possible surprise? SMH.

        Notwithstanding your habitual inability to connect the dots – questioning this underlying assumption – based on a mean of opportunistic ensembles – is on topic. And you might note – if you were not so personally invested in contradicting literally everything I say with labored narratives and pejoratives – disparagement from the skeptic peanut gallery. Good faith – in short supply around here – requires impartial application of rules.

      • Robert I Ellison: personally invested in contradicting literally everything I say

        I contradict very little of what you write. But you write a lot.

      • (literally wasn’t meant to be taken literally)

      • Perhaps I should have said virtually every comment. Review the entries under this post alone. He may have missed one or two. Give him time.

      • Your chart does not contain changes in atmo CO2 at anything near the rates being seen today.

      • Groan. Volcanic CO2 with low level MBL stratocumulus step feedback is implicated in the PETM.

      • Rate of CO2 emissions during the PETM were about 1/10th those of today.

      • Absolute values are not known with much precision let alone rates of change. Get some perspective David.

        But the point was abrupt climate change at all scales. Fractal as Tim Palmer describes it. But – from past experience – this is not something you understand at all. But it is the dominant Earth system paradigm. Let me complicate it further just for you.

        https://www.earth-syst-dynam.net/9/1243/2018/

      • Values are known to an order of magnitude.

        Even when you find that inconvenient for your daydreams.

      • RIE has posted an interesting link on “Cascading transitions in the climate system”. However that site has an other interesting paper, here: https://www.earth-syst-dynam.net/11/13/2020/

        From paper: “Paleoclimate data show that the Earth’s climate of the last 2.6 Myr is dominated by cold glaciations; recently (after the Mid-Pleistocene Transition) the durations of these ice ages – with extensive glaciers – have been ∼100 kyr, with warm interglacials with little global ice cover lasting 10–30 kyr (Imbrie et al., 1992). The termination of a glacial period occurs rapidly while the changeover to a glacial period takes tens of thousands of years to be completed, resulting in an interesting asymmetrical shape for which there is yet no consensus on the mechanism(s) (Tziperman and Gildor, 2003).” Note ‘no consensus’.
        And later “While it is mostly agreed that astronomical forcings trigger glacial–interglacial transitions, —-“. The ‘mechanism(s) here are not Milankovitch, but something else and much more frequent. However they can be astronomical forcings because known dates seem to match certain planetary alignments. Thus ruling out localised climate forcing that appear to be only collateral events.

      • Here’s a couple of doyens of climate science – with ideas way beyond David’s habitual climate trivia. I suggest that they are an order of magnitude smarter than David.

      • Robert I Ellison: Review the entries under this post alone.

        It’s a biased sample. Review the larger picture. RIE has written lots of stuff that I have not disputed.

      • It is a random sample – and quite representative. Dispute it as he may. A personal antipathy pursued with labored narratives and persisted with until no one remembers what the point was. 🤣

      • Robert I Ellison: Perhaps I should have said virtually every comment.

        I put on my OCD hat.

        Of your 30+ posts I have responded to 6. This makes #7. That isn’t “virtually every.”

        I apologize if I have miscounted.

      • afonzarelli: (oh, good grief)…

        What I want to know: is “good” mean to be taken literally? How about “grief”.

        OK, stupid joke. But overall I dispute very few of RIE’s assertions. He’s just especially sensitive. He expects to be regarded as Pontiff, infallible because he writes ex cathedra.

      • Robert I. Ellison wrote:
        Here’s a couple of doyens of climate science – with ideas way beyond David’s habitual climate trivia. I suggest that they are an order of magnitude smarter than David.

        Who cares? You said chaos is important. I showed you a graph of a pretty regular oscillation of climate. Point out where chaos was so important in it.

      • Robert I Ellison: And you might note – if you were not so personally invested in contradicting literally everything I say with labored narratives and pejoratives – disparagement from the skeptic peanut gallery.

        Perhaps I should have said virtually every comment.

        You are counting not just comments at the top of threads but responses to a range of people who behave with more or less good faith.

        First it was “literally everything” you write. Then it was “virtually every comment”. Lastly, you admit that I dispute little of what you write.

        If you do regard some other writers as writing with good faith, perhaps you could let us know whom you so regard. Mostly you insult everyone who disagrees with you.

      • Good faith – in short supply around here – requires impartial application of rules. As I said amongst other more substantial contributions. Do you have any point that isn’t just denigration founded in semantics and repeated ad nauseum? Some science or policy perhaps? If not – I suggest that you make the big effort to move on to something a little more interesting for everyone else.

        I note in another context – btw – that Bjorn Lomborg’s Copenhagen Consensus is not about solving all the world’s problems but of finding the best bang for scarce philanthropic bucks.

      • Robert I Ellison: Good faith – in short supply around here – requires impartial application of rules. As I said amongst other more substantial contributions. Do you have any point that isn’t just denigration founded in semantics and repeated ad nauseum?

        You wrote a demonstrably false statement, an accusation in fact. You ought to acknowledge the error and apologize. Everybody makes mistakes; the greater error is to defend them.

      • Potatoes or potato – demonstrable fact or trolling.

      • afonzarelli :(literally wasn’t meant to be taken literally)

        Robert I Ellison: Do you have any point that isn’t just denigration founded in semantics and repeated ad nauseum?

        Potatoes or potato – demonstrable fact or trolling.

        Robert I Ellison does not mean for any word to be taken literally.

      • Actually – this trolling has gone on for so long and with so little substance that that I should not let it stand there.

        And you might note – if you were not so personally invested in contradicting literally everything I say with labored narratives and pejoratives – disparagement from the skeptic peanut gallery. Good faith – in short supply around here – requires impartial application of rules.

        You dispute literally everything I say endlessly with persistent deprecation – and then attempt to dispute this by asserting that you don’t dispute literally every comment. Just most. But the picture emerges – you disagree with everything and so stubbornly, repetitively and disparagingly that the only appropriate response is good grief Charlie Brown. If you spent as much effort on real contributions you might be capable of making some. Maybe not.

      • Robert I Ellison: Notwithstanding your habitual inability to connect the dots –

        One of my persistent themes in the years I have been writing here are the holes (lacunae, cavities, etc) in the published evidence. Of course I can connect dots, and so can anyone, but when we connect them, are the paths veridical? (cf Shakespeare, Henry IV, part I)

        You might not find this substantive, it’s something I referenced a few years ago.”The Stochastic Brusselator: Parametric Noise Destroys Hopf Bifurcation” by L Arnold, G Bleckert, and K. R. Schenk-Hoppe. In Stochastic Dynamics, Edited by H. Crauel and M. Gundlach. Springer, 1992. The so called Brusselator is only one of many dynamical systems, but the article does warn that properties of some dynamic systems (attractors, catastrophes, bifurcations, etc) may not be retained in their stochastic varieties. Since you write so much about dynamical systems and stochastic dynamical systems, you should read more about these complications.

        Also, “Analysis of Chaotic Data” by H. Abarbanel contains a presentation of Takens’ Theorem: any sufficiently smooth dynamical system can be represented to an arbitrary degree of accuracy by a vector autoregressive process.

      • I write so much about physical systems from a perspective of the natural sciences. There – in geophysical series – we find shifting patterns of spatio-temporal chaos and the goal becomes pattern recognition rather than an arbitrary imposition of ideas from temporal chaos.

        e.g. http://www.ds.mpg.de/LFPB/chaos

        I may call it deterministic chaos, Hurst-Kolmogorov dynamics, quasi standing waves or any of a number of equivalent terms – but this is merely shorthand for how geophysical data varies as abrupt shifts between epochs.

        ‘The biggest difficulty comes from the fact that we lost this convenient finite dimensional phase space. That’s why almost nothing transports from temporal chaos to spatio-temporal chaos. There are no attractors, bifurcations and such. The whole mathematical apparatus has to be invented from scratch and it will take decades. To know the state of the system, we must know all the fields at all points – this is an uncountable infinity of dimensions. As the fields are coupled, the system produces quasi standing waves all the time. A quasi standing wave is a spatial pattern that oscillates at the same place repeating the same spatial structures in time. However in spatio-temporal chaos these quasi standing waves are not invariants of the system on the contrary to the attractors which are the invariants of the temporal chaos. They live for a certain time and then change or disappear altogether.

        You can see spatio-temporal chaos if you look at a fast mountain river. There will be vortexes of different sizes at different places at different times. But if you observe patiently, you will notice that there are places where there almost always are vortexes and they almost always have similar sizes – these are the quasi standing waves of the spatio-temporal chaos governing the river. If you perturb the flow, many quasi standing waves may disappear. Or very few. It depends.’ Tomas Milanovic – https://judithcurry.com/2011/02/10/spatio-temporal-chaos/

  29. Afonzarelli (and others),

    I think you (and many others) may have misunderstood key point of the paper. It seems many may not have studied the full paper and are picking some point from the blog post then using it as a basis to make their own point, which in most cases is not relevant to the main point of the paper. Can I urge you to read and analyse the paper carefully.

    The paper is not about central banks, or climate change, or how much GMST may change over any given period. It is not about predictions of future climate change (GCMs do that). The paper is about testing the validity of the FUND energy impact function projections against empirical data. To do this we must use the data required in the FUND energy impact functions. The FUND energy impact functions require data for the parameters listed on pp. 9-10 here: http://www.fund-model.org/files/documentation/Fund-3-9-Scientific-Documentation.pdf

    The Policy Implications section is included to explain the significance of the paper’s findings (assuming they are correct). If the findings are correct and if the FUND projections of the non-energy impact functions are approximately correct or more positive, then there is no valid justification for policies to reduce global warming.

    But, please focus on discussing the testing of the FUND energy impact functions, not the details on the policy implications. If the paper’s finding – that global warming is beneficial – is correct, then the policy implications follow from that. The exact amounts of the benefits of warming and costs of climate polices is not of relevance until the validity of the findings are accepted.

    • I think you (and many others) may have misunderstood key point of the paper.

      Good morning, Peter… What i was trying to do is similar to what Robert articulated above (as only RIE can), but with an economics assumption instead of a temperature assumption:

      . I made one comment that refuted Peter Lang’s fundamental temperature assumption – so completely on topic unless some halfwit decides that being on topic depends on accepting the explicit assumption on which the whole house of cards is constructed and proceeding on that basis only –

      i get that the focus of your paper is narrower than that. i was just attempting to give a broader perspective as regards the implications of monetary policy. This is more in line with what you have written here:

      If the paper’s finding – that global warming is beneficial – is correct, then the policy implications follow from that. The exact amounts of the benefits of warming and costs of climate polices is not of relevance until the validity of the findings are accepted.

      i’m just saying that, given monetary policy, it doesn’t matter whether global warming is beneficial or not. (the federal reserve will compensate for either scenario by keeping the economy on its goldilocks even keel regardless)…

      • afonzarelli there is a very high level description of the FUND model at the home page of their web site, think of this as just testing one of the assumptions. The impact of monetary policy is neither here nor there.

        I would add as an aside that over here in NZ there is a pretty well accepted view that the best monetary policy can do is give price stability, anything else is an illusion i.e. it won’t fix changes to the real economy from external shocks, or for that matter from policy misadventures based on poor assumptions.

      • HAS, i would think that here in the states it’s quite a different prevailing view. Central banks in smaller countries may fit that view, but the economy here is so large that the fed may well make or break wrt anything other than the greatest of shocks. (but, unfortunately, they aren’t concerned with that at all; they’re only worried about inflation) So, what the u.s. federal reserve does here has implications for not only the u.s., but for the whole world.

      • They only difference between the FR and NZ is the full employment target, but I fear I distracted you from reading about the FUND model and the point of this post.

      • They only difference between the FR and NZ is the full employment target…

        The main difference between the two is that what the fed does here in the states affects the economy in New Zealand. (and what nz does has no affect on u.s.) Therefore, you all will be affected by the global economy at large. The u.s. is, in effect, the global economy at large. BTW, what is the NZ full employment target? (i’d be happy to know how low y’all go)

        Don’t worry about me being distracted here. i’m with ellison on that. As long as comments are roughly on topic, to me, they are permissable. i generally don’t sign away my rights when i log on to a blog. i think that peter is asking way to much of commenters here. We can understand his point without stick to his parameters for making comments. (i think this is the first time ever that i’ve seen this sort of thing) That said, i like peter and am very impressed by the level of detail in his paper. i don’t think he should be expecting the same exacting high level of performance from commenters that he himself demonstrates in his paper. (and, hopefully, even though we’re not all spot on, we can all learn a little something from each other’s comments)…

      • I think you mis-read me, the FR has a full employment as well as price stability objective. NZ has limited its RB to price stability on the basis that dual objectives reduce accountability (and sceptisim over what better monetary policy can do for employment beyond price stability). Levels of employment are for the goverments of the day. FWIW the OECD has 2019 NZ unemployment rate at 4%, US at 3.5%.

        In terms of influence I’d just note that the US is only 4th in 2-way trade, behind PRC, Oz & EU. PRC is nearly double US. Viruses may well do for more down here than the FR, despite what the latter might do for global interest rates.

        As for FR/monetary policy being on or off topic, I guess its connected to the extent that both it and this post involve the future performance of the world economy on sets of idealized assumption. But beyond that?

      • i’m assuming that the past is similar to the present. (there are some rumblings that things have changed of late, but i don’t know a whole lot about that) If the u.s. is in a boom, then the world is in a boom with us, though not always. And if we’re in a bust, then so follows the rest of the world (always?). Since the fed literally creates the boom bust cycle in the u.s., the fed literally creates the boom bust cycle in the world. Let me know if i’m off here (and how). Admittedly, the relationship between the u.s. and the rest of the world economically is not too often highlighted in the media. i suppose one has to dig to find it and i’m just not all that interested. (that said, everything that i have come across to date seems to confirm this)

        To your point about the effect of the virus (particularly on n.z.):
        The u.s. federal reserve essentially has our economy at a standstill. Thus, any slight winds (such as the virus) could blow the house of cards down. Were the economy growing at a steady clip, w/o fed interference, any such winds would have little effect. i assume, too, that if the u.s. economy were growing more robustly, then the the winds of change would be much less efficacious in places (such as n.z.) as well. Let me know where i’m going wrong here. i’m always happy to be corrected and learn from others in the process. Were that not the case i’d be just an ordinary dummy. (as is, i’m an extraordinary dummy… 😉)

        fonzie’s rule of thumb (👍) wrt posting is that first comments should be tied to the topic. From there, discussions could go in any direction. As long as moderation (in this case dr. c.) doesn’t step in to correct things, then we can post whatever we damn well please anyway. i think it’s a more spontaneous, dynamic and greater learning experience that way. i personally get a lot out of blogs. i want to get a lot out of blogs. (and i don’t care to let other people’s ticky tacky rules get in the way of what i want)…

      • For a recent commentary on the FR’s global impact see https://www.federalreserve.gov/newsevents/speech/powell20180508a.htm. I note in passing NZ has a floating exchange rate that serves to further dampen the impact of the FR on the domestic economy.

        Also https://www.investopedia.com/articles/stocks/08/monetary-policy.asp looks at the extent of the FR’s domestic impact. In particular have a look at the Para under “Why Does Monetary Policy Matter to the Stock Market?” particularly noting what is generally seen as the drivers of long-term output and employment. This post is talking about the impact on these drivers, at least within the constraints of the FUND model. The quality of monetary policy may impact on the short-term but have little on the long-term.

        For the sake of analysis monetary policy can be reasonably ignored.

    • Peter Lang: The paper is about testing the validity of the FUND energy impact function projections against empirical data.

      If the paper’s finding – that global warming is beneficial – is correct, then the policy implications follow from that.

      good post.

      • Thanks Matthew.

        It’s amazing how few have understood the paper and the message.

      • If the paper’s finding – that global warming is beneficial – is correct, then the policy implications follow from that.

        All that i’ve done, Peter & Matthew, is dispute this statement. The focus of the paper is too narrow and must include analysis of monetary policy for that to be true:

        Any discussion about the economic impacts of climate change and its policies must take into account the actions of the central bank ~ from my intial comment

        If the paper’s finding… …is correct, then it does not stand to reason that the policy implications follow from that.

      • afonzerelli: All that i’ve done, Peter & Matthew, is dispute this statement. The focus of the paper is too narrow and must include analysis of monetary policy for that to be true:

        Do you not think that monetary policy will follow from the results of the analysis?

        i’m just saying that, given monetary policy, it doesn’t matter whether global warming is beneficial or not.

        No. It will matter still whether global warming is beneficial or not.

      • O.K., Matthew, always nice to discuss with you. Let me give you a real world example of what i’m talking about. i gave something similar in my initial comment, but i want to zoom in on it here. Expectations were high when Trump took office wrt the economy. MAGA, jobs(!), unleashing energy(!!), tax cuts(!!!); you name it, he did it. So, what happened? Job creation actually fell slightly with the transition from Obama to Trump. Here’s what happened:

        The fed intervened. So, even though our expections, our modeling if you will, told us that the economy would take off under Trump, reality gave us something else. So, our modeling has to take into account the role of the federal reserve or we end up with a faulty model. Without fed intervention, the unemployment rate would probably be down around 3% and economic growth would be somewhere north of 3%. With it, we got what we got. The same holds true with modeling wrt climate change. If fed action isn’t accounted for, then we get a flawed model. And we end up basing implications for policy on that flawed model. That’s all that i’m saying here. Peter’s paper, as wonderfully done as it is, is not worth the paper that it’s written on without accounting for the federal reserve. (in the exact same way that our expections for trump weren’t worth the paper they were written on either)…

      • afonzerelli: The same holds true with modeling wrt climate change. If fed action isn’t accounted for, then we get a flawed model.

        Under what monetary scenario would reduced fuel costs not be beneficial? Would temperature increases up to 2C not reduce fuel costs?

        It is true that you can’t account for everything, but that does not render the whole paper worthless. Under any monetary scenario, reduced fuel costs would be beneficial.

      • Yes, Matthew, i think that i may have bungled things badly here. But, the important thing to realize is that whatever the economic impacts are, they will be further impacted one way or another by the fed. And that should be incorporated into any economic modeling wrt climate change…

        Yes, i would agree that lower energy costs would result in low inflation in which case the fed would respond by keeping interest rates lower (thereby stimulating economic growth). If that’s the case, then Peter’s finding would result in an even greater economic benefit than stated. On the other hand, if Peter’s stated cost of climate change policies are simply a drag on the economy (without being inflationary), then that would result in less of a liability than he has stated. Obviously, these are just my own opinions. The important take away is that the fed should not be overlooked in a paper such as Peter’s & Ken’s. Who knows what actual surprises we would find with such an analysis (assuming that it could actually be done).

  30. The ‘exact’ benefits and costs follow from the unknowable scope and rapidity of future climate change. Pragmatic policy is decision making under uncertainty – with all that entails.

  31. Geoff Sherrington

    RIE,
    “We are on the way to a bright future.” What has that to do with hard science?
    You can adopt, as I do, as a given “We are in the best of times now, until or unless some despondent, scientifically illiterate malcontents stuff it up.”
    This relegates emotion to insignificance, where it should be for good science. That is the type of good science that disdains essays in which imagined numbers processed by supercomputers, branded as GCMs, are subjected to uncertainty calculations that are expected to be accepted without laughter. Geoff S

    • The actual quote was that there are ways to a bright future. “This pragmatic strategy centers on efforts to accelerate energy innovation, build resilience to extreme weather, and pursue no regrets pollution reduction measures — three efforts that each have their own diverse justifications independent of their benefits for climate mitigation and adaptation.” Sherrington’s grasp of anything – let alone science – misses the point by a wide margin. Too busy with ideological nonsense.

    • The unintended irony is that it is Peter who endorses GCM and not me.

  32. Thank you Peter and Ken.
    FUND may need to include Geo-engineering in it’s model.
    Just in case the wheels fall off and we cross some kind of tipping point everyone knows we will attempt to ‘fix it’ with geo-engineering. To that point NOAA has received $4 million from Congress and permission from the agency to study two emergency—and controversial—methods to cool the Earth if the U.S. and other nations fail to reduce global greenhouse gas emissions…. Two plans are being funded to study aerosol injections to reflect solar radiation.
    https://www.sciencemag.org/news/2020/01/us-geoengineering-research-gets-lift-4-million-congress

    Since this paper focuses on the relationship between energy consumption and future global temperatures the following comment is a bit off topic.
    Personally I think ocean dead zones (caused by oxygen loss, nutrient loading and rising temperatures) will be a tipping point. I will be watching for any cheap and fast solutions to fix this.

    • There are tipping points everywhere in the Earth system – of which climate change is not the most pressing. Two important pressures are nutrient exports from urban development and agriculture – and a loss of 50% of populations of 1000’s of key species across the planet since the 1970’s.

      There are many solutions – from precision farming and water sensitive cities – to reclaiming deserts and restoring savanna, woodland, forests, wetlands and soils.

  33. Few comments have addressed the subject of this post. It seems most commenters have not read the paper or have not understood it. I’ll try and make a very simple summary.

    The key points are:

    1. Empirical data indicates increasing GMST would reduce US energy consumption in the USA up to at least 3C relative to GMST in year 2000.

    2. We infer that increasing GMST would also reduce world energy consumption.

    3. The cause of GMST change and the time scales are irrelevant to this analysis

    4. To test the FUND energy impact functions we must use the data required for these functions. The energy functions, parameters and constants are explained on pp. 9-10 here: http://www.fund-model.org/files/documentation/Fund-3-9-Scientific-Documentation.pdf . Other parameters and constants are no relevant to testing the FUND projections

    5. The Introduction explains that only FUND has individual impact functions for each main impact sector. Therefore, we cannot test the individual impact functions for the other two most widely used and citied IAMs.

    6. If the findings are correct, and if the FUND projection nof the non-energy impact functions are approximately correct in total, it follows that global warming will be beneficial for the global economy

    7. If this is correct, then there is no valid justification for policies to reduce global warming. They are doing great harm to the global economy and therefore to future human well-being.

    Given these points, can I urge readers to read the paper and carefully consider it. Then discuss the analyses and results, keeping strictly to the scope of the paper.

    These are potentially important findings. I suggest it is important to discuss them rationally and objectively.

    Please no more red-herrings, strawman arguments and other diversions from the topic of the paper.

    • 7. If this is correct, then there is no valid justification for policies to reduce global warming. They are doing great harm to the global economy and therefore to future human well-being.

      I think re more precise formulation would be that …

      “if monetary (GDP-based) cost-benefit analysis is chosen as the basis on which to decide on climate policies, then there is no valid justification for policies to reduce global warming.”

      There are plenty of other “bases” that can be chosen on which to justify climate policies, some of them which may be perfectly valid in their own right. Monetary cost-benefit is just one the many possible “bases”.

      • Jenne,

        Thank you for your comment. However, I’d point out the following:

        1. Integrated assessment models (IAM) are used to evaluate benefits and damages of climate change. They compare on the basis of cost benefit assessments

        2. IAMs are used to estimate the social cost of carbon

        3. The only way to compare total costs and benefits of climate change are on the basis of the economics.

        4. If there are other ways to evaluate the total global cost and benefits of climate change and polices to try to mitigate climate change, they are not widely used or excepted.

        If you are interested in the topic, I’d urge you to read the full paper and not just the blog post.

  34. The empirical data indicates that energy expenditure decreases as temperatures increase

    This certainly isn’t true for USA electricity use as a function of USA 48 temperature.

    That plot shows a minimum at around 55 F, rising on both sides of that value.

  35. The empirical data indicates that energy expenditure decreases as temperatures increase, suggesting that global warming, by itself, may reduce US energy expenditure and thereby have a positive impact on US economic growth.

    What about the rest of the world? Do we care about them or not?

    Well, do we?

  36. Peter

    My background is that of a planning engineer for an Australian electricity distribution company (local poles and wires etc.) In my experience, the cost of supply depends on both energy consumption and on peak power demand. The former is relatively independent of temperature as most days have the same sort of range of temperatures and can probably be estimated by some sort of change in average temperature. The problem here is that average demand is insensitive to temperature within a margin of about 6 degrees. Speculating, I suggest that infrastructure is built to passively support an average temperature for the region under consideration. For instance, the demand curve is concave with a pretty flat minimum in Adelaide for peak temperatures between 16 C and 22C. I have no information about other regions.

    Peak power demand is different and things start to get very costly indeed once temperatures start regularly exceeding the expected maximums. Again in Adelaide – three days over 40 C and short term costs explode, a few years of that and significant (costly) reinforcement is required.

    For me the problem is with the temperature data. Any increase in average temperature within the long term, broad, design bounds may or may not increase demand – the data is too noisy to tell. No one sensible is really predicting 5 – 6 degrees within the next 30 or so years, which is what would be required to move to a new level.

    Any prediction in peak temperatures from the models is simply make believe as these depend on so many other things – wind direction (sea breezes etc.), how dry the soil is, the number of trees in the locality . . .

    Also to complicate matters further once local generation becomes significant e.g. solar roof top PV the supply curve completely changes shape and flattens significantly with the uptick not occurring until after 30 C (In Adelaide). I suspect that the trigger temperature varies between regions but I have no evidence of this one way or another.

    Good luck at penetrating the fog, but to misquote “I wouldn’t want to get to there from here”

    Regards
    John

    • john rattray,

      Thank you for your detailed comment and introduction about your background.

      However, I don’t think what you mention is relevant to the analysis presented in the paper: https://www.mdpi.com/1996-1073/12/18/3575/htm . Could I urge you to read the full paper and consider it, then come back to me with your thoughts. Here’s a peak at one figure:

      Figure A2. Residential per capita heating expenditure, at state fuel prices, against temperature.

      Temperatures span the range of US state average temperatures for year 2010. The data points for the 27 states and grouping of smaller states.

      • This figure is for heating only, whereas the paper is for heating and cooling. All cooling energy is electricity.

  37. Pingback: Economic impact of energy consumption change caused by global warming – Moment Reporter

  38. Pingback: Financial have an effect on of calories intake trade led to by way of world warming – All My Daily News

  39. Pingback: Economic impact of energy consumption change caused by global warming – Weather Brat Weather around the world plus

  40. What happened to this standard Moderator’s request for this post:

    Moderation note: As with all guest posts, please keep your comments civil and relevant.

  41. An excellent new (Jan 2020) paper by Dayaratna, McKitrick and Michaels finds that that the FUND Agriculture impact function underestimates the benefits of increasing CO2 emission concentrations on agriculture. It also finds significant issues with the DICE and PAGE IAMs.

    Climate sensitivity, agricultural productivity and the social cost of carbon in FUND

    Abstract
    We explore the implications of recent empirical findings about CO2 fertilization and climate sensitivity on the social cost of carbon (SCC) in the FUND model. New compilations of satellite and experimental evidence suggest larger agricultural productivity gains due to CO2 growth are being experienced than are reflected in FUND parameterization. We also discuss recent studies applying empirical constraints to the probability distribution of equilibrium climate sensitivity and we argue that previous Monte Carlo analyses in IAMs have not adequately reflected the findings of this literature. Updating the distributions of these parameters under varying discount rates is influential on SCC estimates. The lower bound of the social cost of carbon is likely negative and the upper bound is much lower than previously claimed, at least through the mid-twenty-first century. Also the choice of discount rate becomes much less important under the updated parameter distributions.

    Dayaratna, K.D.; McKitrick, R.; Michaels, P.J. Climate sensitivity, agricultural productivity and the social cost of carbon in FUND. Environmental Economics and Policy Studies 2020,
    https://doi.org/10.1007/s10018-020-00263-w

  42. Peter and Ken,
    This is quite an in depth article with strong links. Thank you for the information.
    I am also starting a blog in similar area. Please check it out and let me know your views.
    Link to my blog : https://spd395.wordpress.com/

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