Daniel Davies’ insights about predictions can unlock the climate change debate

Summary: Here are three powerful insights by Daniel Davies about predictions by experts. He used them to predict the outcome of the Iraq War. This post applies them to the public policy debate about climate change; you can use them to provide insights on other intractable problems.  This is another in a series about validating the case for public policy action to fight climate change.


Daniel Davies is a London-based analyst and stockbroker; he writes at his blog and the Leftist website Crooked Timber. Here he explains how he was able to accurately predict the disastrous outcome of our invasion of Iraq (different entirely from the theory-based predictions of those using history and 4GW). It is well-worth reading in full. His insights have great power and apply to many business and public policy issues — such as climate change. Excerpt…

… Here’s a few of the ones I learned {at business school} which I considered relevant to judging the advisability of the Second Iraq War.

Good ideas do not need lots of lies told about them in order to gain public acceptance.

I was first made aware of this during an accounting class. …

Fibbers’ forecasts are worthless.

Case after miserable case after bloody case we went through, I tell you, all of which had this moral. … If you have doubts about the integrity of a forecaster, you can’t use their forecasts at all. Not even as a “starting point”. …

Daniel Davies

The Vital Importance of Audit.

Emphasised over and over again. Brealey & Myers on Corporate Finance has a section on this, in which they remind callow students that like backing-up one’s computer files, this is a lesson that everyone seems to have to learn the hard way.

Basically, it’s been shown time and again and again; companies which do not audit completed projects in order to see how accurate the original projections were, tend to get exactly the forecasts and projects that they deserve. Companies which have a culture where there are no consequences for making dishonest forecasts, get the projects they deserve. Companies which allocate blank cheques to management teams with a proven record of failure and mendacity, get what they deserve.

There are two distinct insights here. The first concerns our personal reasoning. The second concerns the information processing systems built by organizations. Both are essential flaws in our society that help make modern propaganda so effective.

5 Waves of Trust
From Stephen Covey’s “The Speed of Trust: The One Thing That Changes Everything“.

(1)  The importance of credibility

“Yet in our world everybody thinks of changing humanity, and nobody thinks of changing himself.”
— Leo Tolstoy, “Three Methods Of Reform” (1900).

Both Left and Right in America have learned that their followers lack skepticism; they’ll happily believe stories so long as they fit their world view — stories that are ideologically pleasing, with proper roles for the good and bad guys. Without skepticism, credibility is too cheaply earned.

Each side clearly sees this behavior in their foes, but not in themselves (i.e., fact-checking has become a partisan game). For example, countless posts at Crooked Timber document the Right’s denial of reality (as have I). Do any document the Left’s similar misrepresentation of climate science? Here are some examples of climate activists exaggerating, misrepresenting, or outright denying known climate science.

Perhaps the Left’s most outrageous propaganda is their denial of what climate scientists call the “pause” or “hiatus” in the two centuries of global warming (most or all since 1950 caused by us, per the IPCC’s AR5). Scores of papers (see the links and abstracts) mark scientists’ progress through recognition of the phenomenon, analysis of its possible causes, and predictions of when it will end. Leftists work to keep their flock ignorant of this research. For examples see these articles by Joe Romm at ThinkProgress and Phil Plait at Slate.

“… first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye.” (Matthew 7:5).


(2)  Warning about systems that lack strong audits

Trust can trump Uncertainty.”
Presentation by Leonard A Smith (Prof of Statistics, LSE), 6 February 2014.

The public policy debate about climate change rests almost entirely on the forecast of computer models. Forecasts of models are inherently impossible to prove; even robust testing is difficult. Furthermore the frequent misuse of models gives us reason for skepticism. Such as the bogus credit models that proved collateralized debt obligation securities (packages of mortgages, even subprime ones) were of investment grade, those making the obviously false claim that 30 thousand species go extinct every year, and the misrepresentations of the UN’s probabilistic forecast of 11 billion people by 2100.

Hindcasting is the basis given for trusting the climate models used by the IPCC, the basis given for making public policy decisions having multi-trillion dollar effects on the world economy– perhaps even changing the nature of our economic system (as urged by Pope Francis and Naomi Klein).

Unfortunately the large literature about model validation says that hindcasting is inadequate when using the historical data with which the model was designed (e.g., for parametrization) for validation. Worse, it has failed to convince a majority of Americans despite a 27 year-long-campaign (since James Hansen’s Senate testimony), with climate change consistently ranking near or at the bottom of the public’s major policy concerns (e.g., Gallup). Rightly so, since neither the models nor their predictions have been audited by outside experts (i.e., an unaffiliated team of experts in climate, physics, software, etc).

For more about the challenge of validating climate models…

Where do we go from here?

How unprepared are we? “We don’t even plan for the past.”
— Steven Mosher (member of Berkeley Earth; bio here), a comment posted at Climate Etc.

The public policy debate has become gridlocked, giving us some choices. We can listen to the two sides bicker for another 27 years (by which time the weather will have given the answer), or we can seek ways to restart the policy debate.

Karl Popper believed that predictions were the gold standard for testing scientific theories. The public also believes this. Countless films and TV shows focus on the triumphal moment when a test proves a scientists’ prediction . Climate scientists can run such tests today for global surface temperatures. This would provide the equivalent of an audit and produce evidence about models predictive power superior than anything shown so far.

Any new approach probably will be denounced by Left or Right — or both. Let’s try new approaches, even if we have to color outside the lines.

Clear vision

For More Information

Please like us on Facebook, follow us on Twitter. For more information see The keys to understanding climate change, My posts about climate change. , and especially these…

  1. How we broke the climate change debates. Lessons learned for the future.
  2. A new response to climate change that can help the GOP win in 2016.
  3. Climate scientists can restart the climate change debate – & win.

34 thoughts on “Daniel Davies’ insights about predictions can unlock the climate change debate”

    1. Restless,

      As the folks at AA say, insanity is repeating the same behavior while expecting a different response. For 27 years climate activists (and activist climate scientists) have used the same tropes — as Elsner uses in their interview. All severe weather is climate change, except for those (e.g., cold snaps) that are just weather. Localized events show climate change, except when they’re just weather. Data mining of the vast body of climate numbers to find those that show “extremes”, ignoring the context such as larger trends (e.g., in large land-falling N. America hurricanes, number of severe US tornadoes). Etc, etc.

      Climate scientists like Profess Elsner have bet the credibility of their field on arrival of substantial and adverse climate change soon (5 years? 10?). If it does not come, their misrepresentations of science might have severe consequences.

  1. Interesting. Not really news. Just like your Engagement Graph, we didn’t just suddenly over the last fifty years stop engaging. And it won’t just suddenly turn around in the next five or ten years.
    Remind us, where exactly did Galileo die in the middle 1600’s? “We can do better…”? Maybe. But likely, we will not. How much did this Star Wars thingee gross so far?

    1. Breton,

      I have no idea what you are attempting to say. As for your predictions, you appear to have an idée fixe similar to that of the other doomers who are so active in the comments. Resistant to facts or history. Chaff in the public discourse.

      “how much did Star War gross so far?”

      Absurdly irrelevant. Perhaps you should fess up to your error about the “US not making anything”. It would be the first baby step to learning.

  2. Of course you do not understand. Your entire Blog is all about your views. Even using your own Graphs in a discussion of your prediction or exhortations, never stops you. How many years did your Engagement Graph represent? Huh? We can do better? Sure …over what period of time? When and where did Galileo die? And why? Wiki, sir. Doomers? Ha, try some serious repudiation rather than such typical cliches?!

    You and your financial outer party types are one of the main impediments to serious discovery for a little country like the USA. Blame it on the proletarians. Please.

  3. FM

    Frequently the GCC debate graces the pages of your most prestigious blog. And though most of the posts on this site are highly informative; I’m afraid the posts on this particular issue leave one wanting. Is the climate changing? Are the changes due to human activity? It would seem as if the whole debate is but an effort to dissuade readers from an issue that may be of greater importance. We are a planet 7 billion strong and growing (people I mean). Each nation struggling to elevate themselves to a status that will allow for the industrialization and technological advancement that will allow them to compete in an ever growing global economy. Thus meaning…in short…to create jobs that produce both the crap materialistic consumers are convinced enrich their lives, and the incomes necessary to purchase this crap.

    Each technologically advancing process finding ever more efficient ways to roll out cell phones, computers, flat screen t.v’s, dolls, transformers, lego’s, refrigerators that last a fraction of the time they did 50 years ago as can also be said about washers, dryers, vacuum cleaners, furniture in all shapes sizes colors; and each of these products requiring a bit of our earth resources to produce. It would seem that GCC is a G-d send, so what if we muck up the oceans and air a bit with are wasteful, consumer enriched lives, the result of this activity might be the solution to greater isuues.

    As the climate becomes less stable agriculture will become less reliable, less food, less people, less waste, less people needing jobs, heathcare, protection from guns and the terrorists toting them because though there will still be plenty of guns there will be less people toting them. Problems solved.

    I think the deniers of this issue might be working for the greater good of all humanity.

    1. KA,

      I don’t understand your comment. At all.

      “Is the climate changing? Are the changes due to human activity?”

      Are you kidding? Everybody in this debate — excerpt the flat-earthers — knows that the climate has always been changing, and that humanity’s activities have reshaped the land surface and are (on a far smaller scale) affecting the atmosphere (thru emissions of gas and aerosols).

      You have given a long rebuttal that does not match anything said on this website.

    2. Point in first comment simple, (I will attempt to simplify this response as not to confuse you). Argument for or against GCC as it happens on this site are rarely informative whether you are “denier” or “alarmist”.

      Is our planets climate changing? YES and YES anyone who studies climate knows this just look at geological data for the last Million years or so, it’s fascinating. In fact the Holocene interglacial has provided the most stable weather conditions when compared to other known interglacial periods. Is human activity playing a role in changing climate? That is the question that seems a bit more difficult to answer and has in mainstream media become a popular meme for the purpose of increasing audience.

      Along about the 5th grade we begin to learn atmospheric composition and what purpose each atmospheric compound plays. CO2 ensures that solar radiation doesn’t simply bounce of the earths surface and back into space. There for, the more CO2 the more solar radiation being kept in…the warmer the planet. Easy enough. Clear cutting forests also plays a role as trees consume CO2…again this is elementary level science…no Cornell professors needed here.

      So YES human emissions can cause the planet to warm and YES other activities can contribute to it. The question is how much how fast. This is what the models are being used for not to answer “weather” or not.

      I was not posing that question expecting a response as, clearly, I am not a flat earther and understand the issue. My point was that YES the climate is changing…worrying and arguing about why may distract from greater issues like what does it mean and how will it effect people? Agriculturally or crop fail percents rising is an issue.

      Then being a bit facetious, I said that our irresponsible, wasteful behaviors may not be much of an issue as it is one that will solve it’s self in time…meaning less people…which to many, overpopulation is the root of the issue.

      1. KA,

        “Is our planets climate changing?”

        The posts here are somewhat dogmatic defenses of the IPCC and major climate agencies. The evidence cited here is almost exclusively from them and the peer-reviewed literature. You cite nothing showing otherwise, because there is nothing here saying otherwise.

        Yes, the climate is changing. To name one aspect, the world has been warming for the past 2 centuries, with over half of the warming since 1950 caused by us (the headline finding of AR5). I have explained how this works in hundreds of posts (none of which you appear to have read). That you imply otherwise is a despicable lie.

        I expect an apology.

    3. http://climate.nasa.gov/evidence/ Not sure if NASA can be counted as an authority on this matter, but they make good arguments mostly using complete graphs and scientific data. This data is then compiled into articles that are mostly straight forward not seeking to bait readers with cheeky titles and misleading summaries. Despite being a fairly unknown organization I find their information to be…well…informative. Check it out

      1. KA,

        Why is that a rational rebuttal? I have quoted NASA — and the IPCC and NOAA — as authorities in hundreds of posts. I have never said that there is no climate change, or no anthropogenic climate change. You continued assertions to that are odd, and of course quite false.

    4. I have tried to read your numerous posts on this topic…but I’m afraid those are minutes of my life I will never get back…I apologize.

      1. KA,

        “I have tried to read your numerous posts on this topic”

        That is your defense for falsehoods about what I’ve said in the hundreds of posts quoting the IPCC and major climate agencies? You can’t give the slightest evidence supporting your slander?

        You are a troll and so banned.

  4. For the comment about things not lasting. Many of the things we use today did not exist at all in the past. Quality is far higher, and more efficient today than in the past. The descendants of Malthus have devolved into misanthropes.
    As to the standards of prediction based on character and ethics, skeptics of the climate consensus have been calling for real audits, and accountability for the hypesters of panic for quite awhile.
    As to the idea that running models proven to be failures as a method of audit of those profiting from the models socially and financially: You have to be kidding.

    1. Edward,

      “As to the standards of prediction based on character and ethics, skeptics of the climate consensus have been calling for real audits, and accountability for the hypesters of panic for quite awhile.”

      Some skeptics, yes.

      “As to the idea that running models proven to be failures as a method of audit of those profiting from the models socially and financially: You have to be kidding.”

      That’s wrong in many ways. To name just three:
      (1) Models’ skill is not binary: fail/success.
      (2) Models have not been proven to be failures, even to the limited extent they’ve been tested.
      (3) Testing and audits need to be done by those unaffiliated with the project.

  5. So we agree on the main points it seems. Skeptics have been calling for meaningful audits. Not like the ones performed after climategate. Are there skeptics who have not wanted meaningful audits? Perhaps a better point to discuss is the one about the lack of cliamte consensus supporters calling for meaningful audits and reviews. Instead we see leaders invoking “flat earth societies” as excuse to ignore reasonable questions.

    Models are not binary- they fail because they offer no predictive power over many years. In the climate community there is active and successful resistance to outside audits and reviews.
    Davis makes the point clearly: Bad people will not make good business.

    1. Edward,

      “Are there skeptics who have not wanted meaningful audits?”

      Lots. See the reactions to my posts calling for them at WUWT and elsewhere. Dismiss the whole concept, for various reasons. Usually because they have the TRUTH – conspiracies, ice ages coming, role of the sun, etc.

      “Perhaps a better point to discuss is the one about the lack of cliamte consensus supporters calling for meaningful audits and reviews.”

      Most such “supporters” believe scientists have all the necessary answers, and lack understanding of the relevant processes and history.

      More interesting is this: why would scientists with evidence about a global catastrophe fail to make every effort to validate their results and so convince decision-makers? They would certainly be given the resources to do so (the cost w/b what the F-35 program burns in a week or so). We can only guess. Perhaps they are getting money and fame without the bother of outside review (always painful and risky). No one with authority has challenged them.

      They appear to be acting in self-interest at the cost of their stated goal of saving the planet. That’s the best confirmation possible imo that they don’t believe their claims. It’s not strong confirmation, but people’s internal lives are inscrutable.

      “Instead we see leaders invoking “flat earth societies” as excuse to ignore reasonable questions.”

      Yes. Rebuttal by mischaracterizing the question is their most often used response. They obivously believe it is effective, but imo has cost them much support. My conversations with climate scientists have made me much more skeptical of their work. As a group (i.e., not applying to each individual) I’d rate them with used car salespeople in credibility. It’s a matter of the system, not individuals.

      “Models are not binary- they fail because they offer no predictive power over many years.”

      That’s quite false. There is a large literature on validation of models. They pass many easy tests, and short-term temps are within their (wide) range of outcomes. They have not been sujected to rigorous testing (e.g., out of sample hindtesting, testing using past data from after their creation date). Worse, even accurate forecasting of warming does not satisfy Popper’s criteria of a “risky prediction”. That’s a serious problem, since extraordinary claims (the world is at risk & we need to spend trillions) require extraordinary proof.

  6. It would help the discussion if we could locate a few younger Freeman Dysons, who points out, among other things, that the climate models which focus on atmospheric fluid dynamics do a great job of increasing understanding of behavior of the atmosphere, but miss the boat because the replace a (missing) understanding of the contribution of the biosphere to the atmosphere with a hodg-podge of fudge factors and guesstimates. He’s in favor of research to uncover this missing understanding, but not taking economically drastic steps based on false narratives about the level of understanding that has already been achieved.

    significant excerpt:
    – – – – – – – – – – – – – – –
    Thirty years ago, there was a sort of a political split between the Oak Ridge community, which included biology, and people who were doing these fluid dynamics models, which don’t include biology. They got the lion’s share of money and attention. And since then, this group of pure modeling experts has become dominant.

    I got out of the field then. I didn’t like the way it was going. It left me with a bad taste.

    Syukuro Manabe, right here in Princeton, was the first person who did climate models with enhanced carbon dioxide and they were excellent models. And he used to say very firmly that these models are very good tools for understanding climate, but they are not good tools for predicting climate. I think that’s absolutely right. They are models, but they don’t pretend to be the real world. They are purely fluid dynamics. You can learn a lot from them, but you cannot learn what’s going to happen 10 years from now.

    What’s wrong with the models. I mean, I haven’t examined them in detail, (but) I know roughly what’s in them. And the basic problem is that in the case of climate, very small structures, like clouds, dominate. And you cannot model them in any realistic way. They are far too small and too diverse.

    So they say, ‘We represent cloudiness by a parameter,’ but I call it a fudge factor. So then you have a formula, which tells you if you have so much cloudiness and so much humidity, and so much temperature, and so much pressure, what will be the result… But if you are using it for a different climate, when you have twice as much carbon dioxide, there is no guarantee that that’s right. There is no way to test it.

    We know that plants do react very strongly to enhanced carbon dioxide. At Oak Ridge, they did lots of experiments with enhanced carbon dioxide and it has a drastic effect on plants because it is the main food source for the plants… So if you change the carbon dioxide drastically by a factor of two, the whole behavior of the plant is different. Anyway, that’s so typical of the things they ignore. They are totally missing the biological side, which is probably more than half of the real system.

    e360: Do you think it’s because they don’t consider it important, or they just don’t know how to model it?

    Dyson: Well, both. I mean it’s a fact that they don’t know how to model it. And the question is, how does it happen that they end up believing their models? But I have seen that happen in many fields. You sit in front of a computer screen for 10 years and you start to think of your model as being real. It is also true that the whole livelihood of all these people depends on people being scared. Really, just psychologically, it would be very difficult for them to come out and say, “Don’t worry, there isn’t a problem.” It’s sort of natural, since their whole life depends on it being a problem. I don’t say that they’re dishonest. But I think it’s just a normal human reaction. It’s true of the military also. They always magnify the threat. Not because they are dishonest; they really believe that there is a threat and it is their job to take care of it. I think it’s the same as the climate community, that they do in a way have a tremendous vested interest in the problem being taken more seriously than it is.

    1. desierasmus,

      Thank you for the interesting cite, by the always-brilliant Dyson. The use of computer models has long been of interest to me, given their problematic history in my field (finance). Brad DeLong posted a provocative and relevant comment at his website today. If I get the time to research it, I’ll write a post. Here’s an excerpt…

      Are models properly idea-generating machines, in which you start from what you think is the case and use the model-building process to generate new insights? Or are models merely filing systems–ways of organizing your beliefs, and whenever you find that your model is leading you to a surprising conclusion that you find distasteful the proper response is to ignore the model, or to tweak it to make the distasteful conclusion go away?

      Both can be effectively critiqued. Models-as-discovery-mechanisms suffer from the Polya-Robertson problem: It involves replacing what he calls “plausible reasoning”, where models are there to assist thinking, with what he calls “demonstrative reasoning”. in which the model itself becomes the object of analysis. The box that is the model is well described but, as Dennis Robertson warned,there is no reason to think that the box contains anything real. Models-as-filing-systems are often used like a drunk uses a lamp post: more for support than illumination.

      In the real world, it is, of course, the case that models are both: both filing systems and discovery mechanisms. Coherent and productive thought is, as the late John Rawls used to say, always a process of reflective equilibrium–in which the trinity of assumptions, modes of reasoning, and conclusions are all three revised and adjusted under the requirement of coherence until a maximum level of comfort with all three is reached. The question is always one of balance.

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  10. I’ve been in the exploration and production side of oil and gas for over 35 years. I’ve worked for multi-national and start-up junior companies and near-criminal private investors. What I’ve seen is exactly what is discussed here.

    The desire to review forecasts vs result is non-existent in my business, even though it is a business completely dependent on forecasts involving risk assessments. Not just commodity prices and cost expectations but outcomes of exploration and development projects. We called them “post-martens” and they were universally disallowed. I forced a comparison between forecast and outcome for 3 months in monthly meetings, to demonstrate what we already knew, that there was a consistent problem with budgeting and expectation. After only 3 months the President told his staff to stop. Guess why.

    The problem? The problem is that the lifestyle of those at the top is not dependent on outcome as it is for the rank-and-file. This is obviously the case in the military and leads to disasters on an unimaginable scale that litter our recent history. In the business world the large salaries, bonuses and perks flow regardless of the year being good or bad. Downsizing hits the workers much earlier and harder than the bosses. Even bankruptcy is “good” for those at the top, as they have termination and equivalent contracts that pay out multiple-year salaries (and bonuses).

    Forecasting will never improve will the outcome is immaterial to those making the forecasts. There is an implicit – sometimes explicit – bias towards optimism while supports the alleged brilliance of the leadership. The optimism does not need to be large. In a situation where the outcome is dependent on a connected series of variables, a 15% bias in each leads, very quickly, to a doubled expectation of outcome.

    Bias is not neutral. Bias does not lead to a balanced set of positives and negatives, but a drive in one direction. The bias always supports the ambitions of the top. No bank employee will survive by suggesting the next 12 months will result in the stock dropping by 30%, just as no general will survive by insisting the General Staff will cause their army to be annilaated (think Von Paulus and Stalingrad).

    A rising tide is credited to the insight of those at the top. A collapse – the bank stock falling 30% – is blamed on unforeseeable events. “Nobody” in town saw it coming.

    Individual clarity is all that stands between us and bad forecasts, but individuals have little to no power. In town here (Calgary) there is an Institute that puts out regular oil-price scenarios. It is highly regarded and its reports inform the quarterly and annual reports of companies large and small. It has NEVER been right. Every time it produces an extension of the recent past and then an uptick to even happier days. There is absolutely no repercussions for a job badly done.

    Again, it comes back to the outcome having no impact on the forecasters. Those who count either get their promised rewards anyway, or already “have enough”. I recall one President who gambled his company because he wanted not $15million, which he was offered, but $40 million, which was the average-plus of his buddies from Harvard. Another was offered $82 million, rejected it and 18 months later settled for $26 million – and expressly said the employees were to get nothing out of the sale, because, after all, he’d already given them a good income.

    Accountability. Sensitivity to outcome. That is what is missing. If our business leaders, generals and various advisors were vulnerable to the downside as they are improved by the upside, we would have more cautious, more well thought out programs. We wouldn’t have had the housing-mortgage disaster of several years ago. We might not have a “deal” with Iran right now, either. We would insist that models more reflect the progress of reality, and arrive at the COP21 meeting in Paris with different background briefing documents.

    But – in the absence of a remarkable social shift that leads to the recall of elected officials and the removal of company directors and excecutives of public companies for mismanagement on a regular basis – that ain’t likely to happen. Those with power have the deck stacked in their favour. The mass of the people – those effected by bad forecasts (and, hence, proposals) – simply don’t count.

    1. Doug,

      Thank you for this fascinating and provocative comment. I have seen the same thing in my business (working for global investment banks). As you note, it is commonplace in the military — which should be the ultimate in reality-based organizations.

      As for the reasons and solutions, I agree completely on all points.

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