Tag Archives: forecasts

Is our certain fate a coal-burning climate apocalypse? No!

As we approach November’s United Nations Climate Change Conference in Paris climate activists will warn of dismal futures, while others assure us that we need take no action. The IPCC’s Fifth Assessment Report 5 (AR5) provides a context for evaluation of these claims, from the horrific to the panglossian. This looks at the dark side of the range, scenarios possible but perhaps unlikely. {Revised July 20.}

World burning

In AR5 four Representative Concentration Pathways (RCPs) describe scenarios for future emissions, concentrations, and land-use, ending with radiative forcing levels of 2.6, 4.5, 6.0, and 8.5 W/m2 by 2100. Strong mitigation policies result in a low forcing level (RCP2.6). Two medium stabilization scenarios lead to intermediate outcomes: (RCP4.5, RCP6.0).

IPCC's AR5: 4 RCPs

RCP8.5 gets the most attention. It assumes the most population growth (a doubling of Earth’s population to 12 billion), the lowest rate of technology development, slow GDP growth, a massive increase in world poverty, plus high energy use and emissions. (For more about these RCPs see van Vuuren, Detlef P. et al 2011. “The representative concentration pathways: an overview”, Climatic Change 109: 1-2, pp 5-31. Source of these 2 graphics.)

People — from scientists to journalists — often describe RCP8.5 as the baseline scenario (“business as usual”), a future without policy action, resulting in severe climate impacts amidst a nightmarish world — but that’s an inaccurate description. Including such a scenario in AR5 would have been useful.

RCP8.5 shows the result of some extreme trends with little or no mitigation efforts. While conservative planning requires considering such extreme outcomes, journalists seldom discuss its assumptions or likelihood.

RP8.5 assumes population growth at the high end of the current UN probabilistic forecasts: 80% odds of between 9.6 and 12.3 billion people by 2100 (Gerland, P. et al, Science 10 Oct 2014). Most of this growth occurs in Africa, which in turn assumes that Africa can support that many people.

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A leading scientist warns about the climate: “The time for debate has ended. Action is urgently needed.”

Summary: The science establishment is betting its credibility, going all in on extreme climate in preparation for November’s United Nations Climate Change Conference in Paris.  The pretense of professional objectivity has been abandoned. The role of science in our society and the political Left — allies in this project — might depend on the weather of the next few years. Have they weighed the stakes vs. the risks?  {2nd of 2 posts today.}

A Burning World

Today’s astounding example of science at work is this editorial by Marcia McNutt — editor-in-Chief of Science and next President of the National Academy of Sciences — in the July 3 issue of Science: “The beyond-two-degree inferno“. Please read it in full, for you’ll see many more such statements this year. I’ll cite a few of its strange elements.

The coming inferno

“Let’s act now, to save the next generations from the consequences of the beyond-two-degree inferno.”

The title is shocking. Describing the effects of rising CO2 as apocalyptic is a defining trait of climate alarmists, outside the climate science mainstream since there is little support in the IPCC’s Working Group I reports for such dire forecasts.

There is little basis for describing a rise of 2 degrees above temperatures at the preindustrial moment (temperatures fluctuated before industrialization). For details see Samuel Randalls (University College) “History of the 2°C climate target” (WIRES Climate Change, July/Aug 2010). It might not inspire your confidence in the utility of 2°C as a red line.

Large increases in surface temperatures are possible if climate sensitivity is at the high end of current estimates and we burn off almost all the world’s fossil fuel deposits (especially coal) in the 21st century. However, the high end to estimates of the climate’s sensitivity to CO2 has been falling. The latter assumption seems even weaker. It’s only 2015 and the developed nations are already moving away from coal (North American coal consumption peaked in 2005, dropped 21% by 2012 — and continues to fall). Even China, the big coal growth story, intends large-scale replacement of coal-burning plants (forced by their horrific air pollution).

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The 1% are changing America. It’s our move.

Summary: The moment approaches when every American sees that the 1% are taking it away. Then we each make a choice to go with the flow or resist. Here are a few events that show this time is close. I’ve predicted the events leading to this point, but have no idea how we’ll react. Much depends on our choice.

“An experience of profound contempt is necessary in order to grasp our situation, and our capacity for contempt is vanishing.”
— From Allan Bloom’s Closing of the American Mind, chapter on “Values” (1987).

Don't Tread on Me

We’re in the pursuit phase of our battle with the 1%, the quiet coup. Decades of quiet organizing and slow progress (see here & here) — then Reagan began their advance that continues to this day, inexorably accelerating. After breaking down the old order (e.g., unions, campaign finance limits, New Deal era limits on banks) we see them building a New America: dismantling the public-financed colleges (see here and here), shifting the tax burden from the rich to the middle class, and many other changes to core features of America.

The obvious moment of truth will come when events force us to see the systematic nation of these changes. Will we rise to the challenge, or look in the mirror and see cowards? That time approaches. Soon we’ll learn the answer.

(1)  Former NSA & CIA Director Hayden mocks us

This is almost too good to be true. Former CIA and NSA Director Michael Hayden spoke to America’s inner party at the Wall Street Journal’s CFO Conference.

If somebody would come up to me and say “Look, Hayden, here’s the thing: This Snowden thing is going to be a nightmare for you guys for about two years. And when we get all done with it, what you’re going to be required to do is that little 215 program about American telephony metadata — and by the way, you can still have access to it, but you got to go to the court and get access to it from the companies, rather than keep it to yourself” — I go: “And this is it after two years? Cool!”

He was speaking the truth. We deserve to be mocked The USA Freedom Act was mostly cosmetic reform (the NYT agrees). Two years ago I predicted our pitiful response to Snowden’s revelations.

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We passed a dark milestone: more money came out of 401(k)s than went in

Summary: Lost in yesterday’s festival about the latest meeting of America’s central planners (wielding tools that Kings of the pre-modern world would envy) was a small article in the Wall Street Journal announcing that we have passed a small milestone on the road to a harsh future.  {1st of 2 posts today.}

 

America passes an important inflection point

The boomers pass through America like a sheep through a snake. In our wild and crazy younger days we dragged the nation into miniskirts and riots. In our old age into censors on our language and behavior.

Our effect on prices has been equally large. What we buy goes up in price. What we sell goes down. Our long journey into adulthood has put wind into the sails of home and stock prices. Our retirement will turn us into sellers of these assets, with the smaller and poorer generations following unlikely to replace our buying.

The Wall Street Journal reported that we have hit the next milestone on this path, as the decades long tsunami into 401(k) plans turns into a slow ebb tide when people retire, rolling over their 401(k) accounts to IRAs. Although this has little impact on markets, it is another step to the day money begins to flow out of retirement plans. We don’t have long to wait. The bottom 80% of Boomer’s have only small sums saved; many have only small pensions (or none) — and will begin withdrawals immediately after retirement is forced upon them either from disability (white collar cowboys have no idea how quickly bodies wear out from a lifetime of physical work) or inability to find a job.

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Update on 3 battles in the war for control of America: TPP, NSA, & police

Summary:  We’re in the endgame — the pursuit phase of battle — where the 1% employ the power gathered through years of careful planning and work. Hence the number of important conflicts splashing over the front pages. Much depends on their outcomes. I’ve predicted wins for the 1%, as their well-organized and funded political machine defeats our apathy. Here’s the action on 3 of these clashes as of today.

Crystal Ball

Contents

  1. The Trans Pacific Partnership.
  2. Our out-of-control police.
  3. Government surveillance of Americans.
  4. For More Information.

(1)  The Trans Pacific Partnership

Under the cloak of “free trade”, a large secret plan to screw us. Three weeks ago I forecast that it would pass. Today’s vote suggests that I might be wrong, as a bipartisan alliance in the House voted against Obama on a key step in the legislative dance. The vote among Democrats was 40-144 against, among Republicans 86-158 against.

House Democrats delivered a stinging defeat to President Obama’s trade agenda when a vast majority voted to derail legislation designed to help him advance a sweeping deal with 11 Pacific-rim nations.

The House voted 302 to 126 to sink a measure to grant financial aid to displaced workers, fracturing hopes at the White House that the package would smooth the path for Congress to approve a separate bill to grant Obama fast-track authority to complete an accord with 11 other Pacific Rim nations.

“I don’t think you ever nail anything down around here,” Obama told reporters on his way out of the Capitol. “It’s always moving.”

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Put the latest stats in larger context to understand the economy

Summary: Amidst the bursts of enthusiasm about the economy by bulls (boom!) and bears (recession!), the reality continues to be slow growth, and slowly falling forecasts for the future. Only slowly do people come to realize that, as so many sell hope and despair to their audience. This post looks at our economy from the present quarter to the unknown glories ahead. Understanding events requires seeing this broad context.  {1st of 2 posts today.}

Seeing the future

Ron Chapple/Getty Images

Contents

  1. Inventory to sales ratio.
  2. New Homes Sales.
  3. Retail Sales.
  4. Fading hopes for the future.
  5. Beyond secular stagnation.
  6. For More Information.

(1)  Inventory to sales ratio

The total business inventory/sales ratio for April has gotten a lot of attention from the bears, but wrongly. Changes in technology and business practices reduced the rate steadily from 1.55 in 1992 to 1.25 in 2006, when its current range began. Nine years is too short a history to tell us much. Also, this is a lagging indicator. The wholesale inventory/sales ratio tells a similar story. I don’t know why this has increased since the April 2012 low of 1.25. The weakness this year reflects the slowdown early this year. Total business inventory to sales ratio

(2)  New Homes Sales

Due to our obsession with housing as an investment, this indicator receives attention disproportionate to its importance. April new homes sales were flat for the 3rd consecutive month, down 4% from the December post-crash high. It remains a strong although only small part of the economy. Continue reading

Economists show the perils and potential of the coming robot revolution

Summary: History shows that we oddly focus on small changes coming while ignoring the larger one, because they are truly revolutionary and hence difficult to see and understand. So it is with the third industrial revolution, the oddest so far — and likely to be the biggest. This post shows that some of our top economists have begun to describe what’s coming. As usual with power, it’s great news if we manage it well and potentially horrific if we don’t.  We time to get ready. {1st of 2 posts today.}

Julie Hagerty & Leslie Neilsen in "Airplane!" (Paramount Pictures)

The reality will not be funny. Julie Hagerty & Leslie Neilsen in “Airplane!” (Paramount Pictures)

Robots Are Us: Some Economics of Human Replacement

By Jeffrey D. Sachs (Prof Economics, Columbia), Laurence J. Kotlikoff (Prof Economic, Boston U), Seth G. Benzell, and Guillermo LaGarda.
29  March 2015.

Abstract

Will smart machines replace humans like the internal combustion engine replaced horses? If so, can putting people out of work, or at least out of good work, also put the economy out of business? Our model says yes. Under the right conditions, more supply produces, over time, less demand as the smart machines undermine their customer base. Highly tailored skill- and generation-specific redistribution policies can keep smart machines from immiserating humanity. But blunt policies, such as mandating open-source technology, can make matters worse.

Opening

Whether it’s bombing our enemies, steering our planes, fielding our calls, rubbing our backs, vacuuming our floors, driving our taxis, or beating us at Jeopardy, it’s hard to think of hitherto human tasks that smart machines can’t do or won’t soon do. Few smart machines look even remotely human. But they all combine brains and brawn, namely sophisticated code and physical capital. And they all have one ultimate creator – us.

Will human replacement – the production by ourselves of ever better substitutes for ourselves – deliver an economic utopia with smart machines satisfying our every material need? Or will our self-induced redundancy leave us earning too little to purchase the products our smart machines can make? Ironically, smart machines are invaluable for considering what they might do to us and when they might do it.

… Our simulated economy – an overlapping generations model – is bare bones. It features two types of workers consuming two goods for two periods. Yet it admits a large range of dynamic outcomes, some of which are quite unpleasant.

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