The Psychology of Climate Change and Intervention

Don -

But if it's just an issue of discount rates, shouldn't the two cancel out?

If anything - I think the economic costs of climate change policy are more immediate than the costs of climate change itself. So if you're arguing from a position of "insufficiently fearful of relatively distant threats", as you are here, I'm not sure why that priveleges anti-regulation over pro-regulation.

But the psychology of the discount rate is an important problem to be raised with any intertemporal market choices. So, I would add, is the fact that the institutions that structure private property price the economic consequences of regulation into market decisions already. They don't, however, price the economic consequences of your choices on other people (through climate change) into the market.

Not that any of that gives us an ideal policy - I just don't see how it militates against some sort of proactive policy.

>>They don't, however, price the economic consequences of your choices on other people (through climate change) into the market...Not that any of that gives us an ideal policy - I just don't see how it militates against some sort of proactive policy.<<

This is assuming that anyone's chices are actually having any significant influence on the Earth's climate changes. If these choices are not having a significant influence, why have any policy? It's this whole premise that may make this a non-starter.

Science isn't counseling me about any such thing. I read the journals, and I do so looking at the graphs with an eye for how they've been distorted and manipulated, using cherry-picked data and assumptions of positive feedback for carbon.

No, it's politicians and entrepreneurs who are "counseling" me about the course of action I ought to take. They are operating with a vested interest in obtaining and solidifying power over everyday activity, or leveraging a position in a newly created market for a gas.

LCJ -

May make what a non-starter? The point that militating against regulation isn't justified by consideration of the psychology of discount rates?

About that suppressed report.

As I feel insufficient anxiety about either issue, I must rely on my rational faculty to judge them.

My considered judgment: The AGWCT is bogus as it stands.

>>May make what a non-starter?<<

Needing policy/regulation to curb pollutants.

>>The point that militating against regulation isn't justified by consideration of the psychology of discount rates?<<

Why even discuss the psychology of a discount rate when the 'investment' now [by investment I mean cost - cost of reducing pollutants] won't change a damned thing that nature is already 'planning' on doing?

LCJ -

RE: "Why even discuss the psychology of a discount rate when the 'investment' now [by investment I mean cost - cost of reducing pollutants] won't change a damned thing that nature is already 'planning' on doing?"

Ummmm.... because that was what the post was about and I personally found the discount rate question interesting.

Sam -

It's a shame about the suppression of that report. It shouldn't happen. It's like Bush administration redux. The fact is, even people who are convinced by the climate change evidence have some critiques of the IPCC report. It's important to give a voice to the dissenting opinions. I think it's the fear that the 24 hour news cycle will latch onto a single report and claim it conclusively refutes the administration's policies. It doesn't. Or, to put it more correctly, it's part of a larger discussion where there are also documents supporting the administration's policy. Being secretive is only hurtful in the long run. Government scientists and private scientists should do science - not be beholden to the ideological priorities of either side of the aisle.

Evolution has given us a very sharp tool for judging invisible threats:

A = f[(P * Cr1),(C * Cr2)]

A = Action

P = Probability of threat


Cr1 = Credibility of the source asserting the threat


C = Cost of the threat


Cr2 = Credibility of the source asserting the costs

It's not a perfectly honed formula, but humans have pretty good bullshit detectors, and notwithstanding all the wild-eyed coverage of a sensationalist press, most people severely discount both the likelihood of the threat or its costs.

Kristoff is wrong. We are a species that engages in hugely elaborate rain dance ceremonies and costly monuments to heaven. We have willingly sent off our children to die in foreign lands against aggressors we have never seen. The idea that we couldn't muster an expensive defense against the "end of the world as we know it" is crap. If we believed the press and politicians pushing this crap, we'd spend everything to stop it. Public intellectuals like Kristoff just don't like the idea that their credibility is kind of shot.

DK:

I think the point is that those who press for legislation are not considering the costs of their proposed actions, or at least are rather incapable of doing so well. The result is that they are just as likely to make things worse from a human condition standpoint by making legislation now, and probably more likely to screw things up considering the whole climate change thing is far from settled science.

In other words, when a bad choice is extremely bad and extremely likely, you don't want to rush to a decision without knowing the results.

Eric -

Right, I share that concern. I know that's what it's about. But I think the costs of cap and trade are obvious - much more obvious than the costs of climate change.

Indeed - it's not the misunderstanding of the economic costs of the legislation that is driving the argument. For the most part, people understand and agree about those costs. The side of the ledger that there is huge disagreement on is the economic costs of climate change. So let's not pretend proponents (and I'm not one of them for cap and trade... I don't think... I'm personally a little agnostic right now) are somehow unaware of the costs of the policies.

>>Ummmm.... because that was what the post was about and I personally found the discount rate question interesting.<<

Okay, so let's discuss this comment of yours: They don't, however, price the economic consequences of your choices on other people (through climate change) into the market.

Do we currently know specifically what those future 'consequences of [insert accusatory pronoun here] choices on other people' will be?

What if the costs that we collectively impose on ourselves now would cause future generations to have a harder time adapting to any climate change or life in general (in the absence of significant climate change)?

It appears that it is you that is not pricing the economic consequences of your choices on other people (through hamstringing regulation, stiffling innovation, and lower klivuing standards) into the (temporal) market(s).

LCJ -

Right - we don't know what the consequences are and I don't think I said the magnitude. The higher carbon dioxide and the warmer planet may improve agriculture, and we're already experiencing greater access to oil in the Arctic because of warming to date. These are all positives. But they aren't priced into the market either.

I agree that the costs we impose now will give future generations a harder time - that's why I'm hugely skeptical of cap and trade. I think a carbon tax of some sort is very appropriate - and it doesn't have to be a net drag on the economy (and it can be adjusted easily if it's too burdensome).

It would work like this: tax all energy producers based on the carbon content of their emissions, so higher carbon emitters pay higher taxes. Then rebate the total tax revenue from the tax to all energy producers based on energy output. That way, you internalize the cost of pollution WITHOUT imposing a net cost on the economy.

Or who knows - something like that.

I agree with you - I'm skeptical of cap and trade. But my skepticism doesn't make the markets any better at responding to the externalities that are at the heart of the economics of climate change.

Markets reflect, to some degree, current knowledge of the participants. Those that are long on emotion but short on 'skin in the game' want to collectively advocate to push government into actionb to "do something, anything!" to share their fears and get everyone's skin in the game.

I dislike this approach...strongly. I do not trust the government in this matter (and many others). I do not trust the underlying ideology among the emotional. There are, in my view, reason to question everything and realize that the politics of this issue (and many others) is perverted and potentially as toxic as the pollutants in question.

My ideal 'policy' is to not have policy. Not have Pigovian taxes. To see what the particpants of the market (to include consumers of stuff that gets produced in which pollutants are emitted) figure out as conditions change; to the extent they change, the magnitude they change if they change at all.

It's a shame about the suppression of that report. It shouldn't happen. It's like Bush administration redux.

It's like politics anytime and anywhere.

I guess I am missing your point. The failure to act or to have good regulations governing our financial system has resulted in its collapse. The result has dramatically effected the lives of individuals and pulled down our economy/ the worlds economy.

That's an argument FOR acting on possible threats from man made climate change as opposed to doing nothing. Especially when I can point to a period in which "good regulation" was in effect and the economy hummed along with no such major catastrophes.

The idea that regulation is the biggest threat to the economy just doesn't match the facts. There's always been regulation and the big picture is that our economy/the modern economy/ is the most efficient ever. The problems consistently occur when we back off regulation too much or pass poor or inefficient regulations. The fact that the well regulated banks in Canada are doing just fine is more evidence to the contrary of your claim.

The latest I've heard on the Cap and Trade bill is that it is friendly to Wall Street and even the fossil fuel industry.

They are literally planning to make derivatives and traunces out of the sale of pollution credits. Morgan Stanley and AIG are all excited. The fact is the supreme court has decided that the EPA can regulate CO2 as a pollutant so no real bill needs to be passed. If what I've heard is correct the cap and trade bill takes the control away from the EPA. The bill appears to be a Trojan Horse.

My fellow liberals are in a tizzy over this because it seems more and more that those who claim the Democratic party is no different then the Republicans in their ability to be bought by lobbyist may have a good point. The world is turning into a large corporatacracy that will please neither liberals or conservatives.

We're less likely to pay attention to distant threats simply because they're less likely to come to pass than immediate threats. Much can happen over long expanses of time; for good or ill--to lessen or increase the threat.

My fellow liberals are in a tizzy over this because it seems more and more that those who claim the Democratic party is no different then the Republicans in their ability to be bought by lobbyist may have a good point. The world is turning into a large corporatacracy that will please neither liberals or conservatives.

I guess you had to witness it for yourself.

As I've explained before, all, ALL governments manifest as oligarchies. Even "democracies" manifest this way.

How many ordinary people do you know who have the time and resources to mount viable campaigns against the political class?

Right.

So that leaves management of the political order to those who are wealthy enough to devote their attention to such matters.

If you find that the regulatory regime is lacking, we might suppose there is a reason it is so.

OTH, a regulatory regime presents onerous obstacles to new competition against the "ins" that have become comfortable in their established markets and relationships with the "official" political class.

The real issue with cap and trade isn't whether or not the AGW science is settled or not.

For sake of argument, let's say that AGW is true and happening.

Well great, cap and trade is basically what Kyoto called for, if I recall correctly. I haven't read any analysis of this latest venture, but as I recall for reading analysis of Kyoto, the projected warming was something like 2F over the next century. If everyone who signed on to the accords followed through with them (and no one has because it's impossible to do so with existing technology without stopping all economic growth....which might just be the point? I digress), then the warming would be something like 1.7F. I'm sure I've got the exact numbers wrong, since it's been a long time since I looked at them. But the basic point is true.

So we spend untold TRILLIONS of dollars in outlays and lost growth.......just so we can have a world that's still warming up, just a teensy tiny bit slower.

Well that's just great! Totally worth it! Sign me right up!

Sheesh

The sheer idiocy of this whole notion is incredible.

dK: the legislators don't care about the economic costs of climate regulation. They do not make their money in the open economy, they make their money selling influence and power. Since climate regulation is likely to increase their power and possible favors to sell, they are all for it, and the economic costs be damned.

The environmentalists don't care about the economic costs either, either because they can not fully grasp them (those that favor cap and trade certainly don't given the contradictions they spout) or do not care because they think human society should be reverted back to the time before electricity.

When was the last time you heard an environmentalist say something other than "We should do everything we can to stop climate change!" That is not the slogan of someone who is considering the various costs and benefits.

The sheer idiocy of this whole notion is incredible.

It is not idiocy at all if you look at it from a standpoint of power.

Whip the people up into a frenzy that the world is going to end, then propose a solution that involves controlling every aspect of their lives.


Get the people fearful enough and they'll beg you to take away their freedom.

People are begging for a totalitarian world government to save us from ourselves.

It's not idiocy, it's a brilliant power grab.

The assertion that "science counsels that we should be" very fearful of AGW is false. No scientific consensus of this sort exists.

Daniel occasionally acknowledges the far less foreboding consensus that does exist, i.e. 1) fossil fuel burning was largely responsible for a substantial rise in atmospheric CO2 concentration in the 20th century and 2) this rise seems a likely cause of a portion, possibly most, of a roughly one-half deg C increase in atmospheric temperature during the latter half of the 20th century.

That's it. The Global Warming hysteria is not scientific at all. No credible, scientific case exists for a massive, global regime spending trillions of dollars to try to change the global weather forecast. The hysteria just yet another excuse to impose incredible rents, and if AGW hysteria weren't the excuse, there'd be another.

The failure to act or to have good regulations governing our financial system has resulted in its collapse. The result has dramatically effected the lives of individuals and pulled down our economy/ the worlds economy.

That's an argument FOR acting on possible threats from man made climate change as opposed to doing nothing.

No. Even if you're right about "failure to regulate" causing a financial collapse, this failure tells us nothing about man made climate change or any case for doing anything about it. The two could hardly be less related. What on Earth are you talking about?

The latest I've heard on the Cap and Trade bill is that it is friendly to Wall Street and even the fossil fuel industry.

There's a shocker.

I guess you had to witness it for yourself.

As I've explained before, all, ALL governments manifest as oligarchies. Even "democracies" manifest this way.

How many ordinary people do you know who have the time and resources to mount viable campaigns against the political class?

Right.

Posted by: Sam Grove

I still have hope. A lot of it lies with this internet and the newer medias. But even these are subject to to control by the rulers as in China and Iran. The idea of democracy is for peaceful change but if it fails what else is their but revolt? I seriously fear for possible societal collapse in the near future. To the point that as much as I dislike guns I'm stocking up.

As much as you may be right on thee problem I still don't see you with any realistic solutions. Do you have answers for dealing with living under the rule of multi-national corporations? I see little hope when I see lemmings claiming to be pro-liberty but stating for instance they buy gasoline because they are making "market decisions" and not recognizing their complete dependency on "The Man".

That's it. The Global Warming hysteria is not scientific at all.

Posted by: Martin Brock

Do you understand that this sort of reasoning makes even a real scenario of catastrophic warming unrecognizable or nothing to worry about?

In other worlds if the world was on the verge of a state change of climate what WOULD the evidence for such look like at this point?

One prior expert said something to the effect... to paraphrase... "climate is a sleeping beast and we are poking it with a stick."

Muirgeo,

You disgusting lunatic. You couldn't stay away from the "pathetic" blog of cry babies. Could you, you lying hypocrite?

Martin Brock,

I agree completely with your post that begins:

"The assertion that "science counsels that we should be" very fearful of AGW is false."

It's not idiocy, it's a brilliant power grab.

Posted by: John

You think it's the environmentalist and the politicians who are grabbing power. I think it's the fossil fuel industry who stands to earn trillions more in profits and the power that comes with it by maintaining the status quo . These men have unimaginable wealth and they sit behind the curtain and pull the levers that control not only your life but through the media they control your mind. They've done a good job of convincing people like yourself that you have some sort of market choice when you go to buy an internal combustion machine and fill it with gasoline. They own you, they control you and they even convinced you to defend them a be one of their minions. Your nothing more then an ork for Mordar. THAT'S a perfect power grab.

daniel kuehn: "it's not the misunderstanding of the economic costs of the legislation that is driving the argument. For the most part, people understand and agree about those costs."

Do you think so? Not sure who you mean by "people". Many "greenies" I've talked with have no understanding of economic growth. No way do they understand inefficent resource allocation inherent in government imposed regulations such as cap and trade.

daniel kuehn: "there is huge disagreement on is the economic costs of climate change."

I agree with that part.

Do you ever wonder why wealthy elites like George Soros, Bill Gates, Warren Buffet ( son of a principled libertarian congressman ), tend to be statists? Have you ever met a libertarian billionaire? I am sure if you look really hard you will find one, but based on the rhetoric of the progressive fools, you would think that every one of them is a libertarian.

BTW, Nicholas Kristoff is href="http://hodakvalue.com/blog/?p=316">innumerate.

BTW, Nicholas Kristoff is innumerate.

Muirgeo self contradictions...

Lie # 1

The failure to act or to have good regulations governing our financial system has resulted in its collapse. The result has dramatically effected the lives of individuals and pulled down our economy/ the worlds economy.

Now view it in the light of

Lie # 2

There's always been regulation and the big picture is that our economy/the modern economy/ is the most efficient ever.

If you were the majority stake holder in a fortune 500 company, how likely is it that you will employ a steadfastly principled libertarian, who would never lobby the government, or bribe officials, or wouldn't stop criticizing politicians and bureaucrats, as the CEO of the corporation?

So this scientist, trained to make predictions based on empirical evidence, points out that too many people are insufficiently aware of - and, hence, insufficiently fearful of - those relatively distant and invisible threats posed to an otherwise healthy planet by increased carbon-emitting human activities.

Don't you know that the AGW-debate is "over" and anyone who disputes that is an AGW-denier on par with Holocaust-deniers?

S Andrews: "how likely is it that you will employ a steadfastly principled libertarian ... as the CEO of the corporation?"

You're absolutely correct. A CEO may truly believe in libertarian principles. But he is bound by contract and by law to act in the best interests of the shareholders. If the interests of the shareholders are best served by lobbying government for favors, that's what the CEO is required to do.

The culprit is not the CEO, but rather the politician. The politician is supposed to represent the interests of his constituents. When the politician pursues power and exchanges favors for campaign contributions, he is not usually representing the interests of the voters who elected him.

Do you understand that this sort of reasoning makes even a real scenario of catastrophic warming unrecognizable or nothing to worry about?

No. If you have evidence of a real scenario of catastrophic warming, I'm happy to discuss it with you. Do you have it or not? That's a direct question. I'd like a direct answer.

In other worlds if the world was on the verge of a state change of climate what WOULD the evidence for such look like at this point?

You tell me. I'm not the one asking for trillions of dollars to save the world from catastrophe. The burden of proving the necessity of spending a trillion dollars rests on advocates of the expenditure. Doesn't it?

I'm not asking for evidence of any degree of warming, and I'm not asking for evidence of any likely human influence. Any human influenced warming does not warrant a multi-trillion dollar cost.

One prior expert said something to the effect... to paraphrase... "climate is a sleeping beast and we are poking it with a stick."

That's just meaningless babble. You don't have evidence of catastrophe or looming catastrophe. You have speculation based on extremely questionable modeling of a highly chaotic, dynamic system, and you want to spend trillions of dollars, so you talk about the one while arguing for the other.

Muirgeo self contradictions...

Posted by: S Andrews

There's no contradiction.

The libertarian argues that markets succeed in spite of regulation. The other side argues that good regulation is required for successful markets.

So how to tell who is right? Simply look at history. The 2 periods where regulations where dramatically reduced, the 20's and the present period both resulted in crashes.

We can also look to other country's contemporaneously. Iceland, Argentina, Britain and Ireland all embraced deregulatory policies and are suffering the consequences while France, Germany, Scandinavia and Canada are doing much better.

That's the facts. They fit with my claims while they contradict the libertarians.

If you were right markets would do better and better with less and less regulation. They often do for a bit... then the bubble burst. SHOW ME SOME FRICKING EVIDENCE TO SUPPORT YOUR POSITION. Which country is deregulating more and more and doing better and better. All you can do is point to the isolated city-states of Singapore and China. Not too impressive.

So how to tell who is right? Simply look at history. The 2 periods where regulations where dramatically reduced, the 20's and the present period both resulted in crashes.

You detestable excuse for a man, you couldn't resist the temptation to visit this "Pathetic" blog of "cry babies", Could you? You hypocrite?

What were these dramatic deregulation were introduced recently, you mean Sarbanes-Oxley? Federal law book reduced by how many pages? It's democracy @ work, you don't like it - tough luck! Oh your favorite Glass-Steagall - could you cite equivalent laws in France, Germany or your favorite banking system in Canada?

What were the deregulations in 1920s?

Fastest economic growth ever in history happened in the 1800s, especially in the latter half. It is a fact!

Worst ever crisis in history of the U.S happened on the watch of the "Great Engineer" who wanted to engineer the american economy, and the the one ( during his campaign )who criticized him for being an activist president. It happened after the progressives cartelized the banking system under the supervision of the central authority of the Federal reserve. It is a fact. Unemployment has been much higher than this throughout the 1930s, 1946-1947, 1958, and many times during the 70s and 80s. No business cycles were never outlawed ever in history you jerk.

SHOW ME SOME FRICKING EVIDENCE TO SUPPORT YOUR POSITION.

If you don't like the evidence, then get lost. Why are you visiting the cry babies @ this blog. What's your pupose? Do you heckle your patients in the hospital where you work, you idiot?

SHOW ME SOME FRICKING EVIDENCE TO SUPPORT YOUR POSITION.

You have the gall to come here day after day and post comments without civility, You have the gall to shout @ every one. You have the gall to call this a pathetic blog of cry babies. Don't you have any shame you pathetic loser?

[/facepalm]

"Evolution" seems to have given hacks like Kristof a psychology which tells them to produce BS, pseudo-science & fear of the sort which gives them more power and money.

"Evolution" seems so have given the same psychology to Al Gore.

"We can also look to other country's contemporaneously. Iceland, Argentina, Britain and Ireland all embraced deregulatory policies and are suffering the consequences... "

-muirdog

Are you serious? Argentina? Their leader is a self avowed socialist. She traded their debt to the IMF to Chavez so she wouldn't be "forced" to adopt market policies. Ireland is MUCH better off as a result of their embrace of free markets, EVEN in light of the current economic situation.

You're such an idiot...

You're such an idiot...

Understatement of the millenium.

"Which country is deregulating more and more and doing better and better. All you can do is point to the isolated city-states of Singapore and China."

-muirdog

You've been given the list of countries and the numbers on growth time and time again. The commenters on this blog share an understanding of economics far greater than that of yours and choose to discuss different issues.

If you want to know why economies with limited regulation grow faster and see higher standards of living there are numerous books that could offer you a BASIC understanding of economics. I would suggest "In Defense of Global Capitalism" by Johan Norberg. It's very basic and offers a lot of data.

I would suggest "In Defense of Global Capitalism" by Johan Norberg.

That's asking for too much. You should start with first grade language and math.

Simply brilliant. Very good Professor Boudreax...