Tag Archives: forecasts

Good news for the New Year! Salon explains that the global climate emergency is over.

Summary: During the past two weeks I’ve posted much good news to help you prepare for the New Year. Concluding the series is the best news of all: a solid leftist declares an end to the planetary climate emergency! Solar and wind are replacing fossil fuels at an astonishing pace, sooner even than optimists expected when James Hansen began the climate crusade in 1988.

Good news about the climate

Donald Trump’s “carbon bubble” economy is bound to pop
— the only question is how bad it will be

“Trump’s economic policies are built on many flawed assumptions,
especially a fossil-fuel boom that won’t end well.”
By Paul Rosenberg at Salon, 2 January 2017.

Let’s go directly to the money paragraphs that give us the good news.

“The carbon bubble does exactly the same thing. It’s not just fossil fuel reserves that are overvalued by the bubble, but everything associated with the sector — pipelines, power plants, refineries, etc. …

“The carbon bubble risk is only made worse by the fact that renewable energy costs have dropped dramatically in recent years, and become increasingly competitive. Thus, even if those reserves were not unburnable because of their potential impact on climate change, they will become so for economic reasons in the next few decades. For example, the World Economic Forum’s recently released “Renewable Infrastructure Investment Handbook: A Guide for Institutional Investors” reported:

‘[T]he unsubsidized, levellized cost of electricity (LCOE) for utility scale solar photovoltaic, which was highly uncompetitive only five years ago, has declined at a 20% compounded annual rate, making it not only viable but also more attractive than coal in a wide range of countries. By 2020, solar photovoltaic is projected to have a lower LCOE than coal or natural gas-fired generation throughout the world.’

“Add to this the fact that renewable energy — particularly solar and wind — is a new technology sector, in which large efficiency gains are to be expected. That’s quite unlike the fossil fuel industry, whose costs are increasing because the cheap, easy-to-get fuel has already been burned. By 2030, renewables could well leave fossil fuels in the dust. …

“Paul Rosenberg is a California-based writer/activist, senior editor for Random Lengths News, and a columnist for Al Jazeera English.”

This is the good news of the decade (even if bad news for fossil fuel investors)! For a decade climate activists have warned about the coming apocalypse from RCP8.5, the worst-case scenario in the IPCC’s AR5 report (often misrepresented as “business as usual” despite its unlikely assumptions). Almost all the articles you have read about the horrific effects of climate change assume the RCP8.5 scenario.

To learn about this possible future see “RCP 8.5: A scenario of comparatively high greenhouse gas emissions” by Keywan Riahi et al in Climate Change, November 2011. It describes a hot dirty 21st century, in which coal use increases 5-fold to become the world’s major source of power (it’s a back to the 19thC future) — with the steepest increase coming after 2030. This graph shows energy use by fuel in 2100 for each of the four scenarios in AR5.

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One of the 20th century’s top minds sees a great 21st century for humanity

Summary: As part of our holiday festivities, here’s an article by one of the great intellects of the 20th century.  John Maynard Keynes made seminal contributions in statistics, risk management, and (above all) macroeconomics. Here he looks at our future, seeing things already happening yet about which we remain unaware — with even better news in our future.

Comet 's office of the future

“Economic possibilities for our grandchildren”
by John Maynard Keynes,
The Nation and Athenœum, 11 and 18 October 1930.

 

Today’s economic pessimism

We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterised the nineteenth cen­tury is over; that the rapid improvement in the standard of life is now going to slow down — at any rate in Great Britain; that a decline in prosperity is more likely than an improve­ment in the decade which lies ahead of us.

I believe that this is a wildly mistaken inter­pretation of what is happening to us. We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another.

The increase of technical efficiency has been taking place faster than we can deal with the problem of labour absorption; the improve­ment in the standard of life has been a little too quick; the banking and monetary system of the world has been preventing the rate of interest from falling as fast as equilibrium re­quires. And even so, the waste and confusion which ensue relate to not more than 7½% of the national income; we are muddling away one and sixpence in the £, and have only 18s. 6d., when we might, if we were more sensible, have £1; yet, nevertheless, the 18s. 6d. mounts up to as much as the £1 would have been 5 or 6 years ago.

…The prevailing world depression, the enormous anomaly of unemployment in a world full of wants, the disastrous mistakes we have made, blind us to what is going on under the surface-to the true interpretation of the trend of things. For I predict that both of the two opposed errors of pessimism which now make so much noise in the world will be proved wrong in our own time — the pessimism of the revolutionaries who think that things are so bad that nothing can save us but violent change, and the pessimism of the reactionaries who consider the balance of our economic and social life so precarious that we must risk no experiments.

My purpose in this essay, however, is not to examine the present or the near future, but to disembarrass myself of short views and take wings into the future. What can we reasonably expect the level of our economic life to be a hundred years hence? What are the economic possibilities for our grandchildren?

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The headlines show America being dismantled. It’s time to act, not just watch.

Summary:  We can see our future in today’s news headlines. Unless we become more active, our complacency today will create future astonishment — as we pretend surprise when the inevitable arrives. Here are ugly examples from our increasingly dark news. I recommend anger as a good first step.

Seeing the future

Ron Chapple/Getty Images.

I love the New York Times, so often reporting the news but burying the lede. Today’s fun headline is “BlackRock Reaches a Deal for a Move to Hudson Yards“. The real story tells how New York State gave $25 million in tax credits to the giant financial firm Blackrock. In exchange for Blackrock moves into nicer quarters and keeps 2,672 jobs in Manhattan. Terrorism works! Blackrock also promises to create 700 jobs (but there are no penalties for non-compliance).

Yesterday the NYT told us that “On Campus, Trump Fans Say They Need ‘Safe Spaces’“, which reports about two trends on college campuses. Conservatives say that “their views are not respected.” And threats of terrorism. As the President of the U of MI said, with insane even-handedness:

“…a student walking near campus was threatened with being lighted on fire because she wore a hijab… Some students have also been shouted at and accused of being racist because of their political views.”

We passively read news headlines showing the US political system breaking down, its norms no longer respected by its leaders. Such as “Donald Trump will remain Executive Producer on ‘Celebrity Apprentice’“. How long until President Trump nominates a horse as cabinet secretary?

We doze while the well-coiffed reporters on the TV announce that America is being dismantled and rebuilt as a plutocracy. Oklahoma’s governor sells off its parks (let the peons relax at country clubs!), and pretends not to notice that unregulated fracking is causing increasingly severe earthquakes. In a truly a truly Orwellian touch, Trump appoints a modern version of Mr. Potter (from It’s A Wonderful Life) as his Secretary of Labor: advocates letting inflation erode away the minimum wage and gutting the social safety net, and opposes effective regulation of overtime laws (see the ugly details here).

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What happens to the losers of the public debate about climate change?

Summary: Liberals believed that 2017 would mark a new start for US public policy to manage climate change. Now Conservatives agree, in a different sense. Both are wrong. The weather will determine who will win. The stakes for both sides are large (as are the possible effects on the world). The consequences for the losers will be severe. Just as we are unprepared for climate change (even repeat of past extreme weather), both sides are unprepared for defeat. This is an update and expansion of a post from March.

Cover of "Turning the Tide On Climate Change" by Robert Kandel

Cover of “Turning the Tide On Climate Change” by Robert Kandel (2009).

“The future is not what is coming at us, but what we are headed for.”
— Jean-Marie Guyau in Le Genèse de l’idée du temps, translated by Astragale.

The US public policy debate about climate has run for 28 years, from James Hansen’s famous Senate testimony to Trump’s threat to cut NASA’s climate research. This is one of the largest publicity campaigns in American history. Many people assume that US politics will determine the eventual winner, skeptics or alarmists. I disagree: the weather will determine who wins the public policy debate.

So far the weather has sided with the skeptics, with little of the extreme weather activists predicted. No surge of hurricanes after Katrina (despite the predictions). No sign of the methane monster; little evidence that we have passed the long-predicted tipping points. So, despite the efforts of government agencies, academia, and many ngo’s, the public’s policy priorities have been unaffected (see yesterday’s post). As a result, activists are going thru the 5 stages of grief for their campaign.

Global surface temperatures, flattish for 14 years (except for the 2015-16 El Nino).
October 2016 shows the El Nino spike, but exaggerates the recent flatness.
Warming is concentrated in months of May, June, & July.

NOAA Global temperature anomalies: October

From NOAA. Temperature in October of each year. Reference period is the 20th century.

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To understand the jobs report, see the state of the economy

Summary: The economy is slowing — slowly. September’s weak employment growth fits in this picture.  To see how, look at the current state of the economy — the essential context necessary to make sense of the jobs number. Equally important, this also shows why we are so poorly informed about the economy.  For the scoop about the jobs numbers, see my post at Seeking Alpha.

Fast Snail

Slow growth: the consistent picture during the economic recovery

The average growth rate of real GDP during the seven cycles from 1958 to 2001 was 3.5%/year. GDP grew 1.6%/year during the 2001-2009 cycle (2.8%/yr during the expansion phase). During this expansion GDP grew only 2.1% SAAR (seasonally adjusted annual rate). The full cycle rate will include the recession that ends it pulling the average down even more.

Each of the squiggles on this graph produced excited news stories and research reports. Bulls announced the peaks marked the start of a boom. Bears announced the troughs marked the beginning of the End Times.

Growth of real GDP during the recovery

Looking ahead — on August 3 the Atlanta Fed’s GDPnow model forecast Q3 real GDP of 3.2%. The bulls were euphoric, predicting that the Fed would soon begin to raise rates back to “normal” levels.  Surprise! As the five or so previous episodes of good news, secular stagnation has struck back. The current forecast is 2.2%. It’s called regression to the mean.

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PollyVote gives a reliable forecast about the Election. Prepare for Hillary.

Summary: The polls dominate the election news, but there are better ways to forecasts of its results. Here is one of the best: aggregating the various forecasting models. The results gives us time to prepare for the Clinton administration. See below for links to posts describing what we’ll see.

Prediction: a landslide for Hillary Clinton in the Electoral College

Pollyvote - Electoral Count - 16 Sept 2016

From the PollyVote website

“The PollyVote is based on the principle of combining forecasts. That is, PollyVote combines forecasts from different forecasting methods, the so-called component methods, each of which relies on different data. The PollyVote forecast is calculated by following a two-step approach:

  1. Averaging forecasts within each component method.
  2. Averaging the resulting forecasts across component methods.

“In other words, we use equal weighting of all forecasts within each component method, then equal weighting across these forecasts from different methods. This is the same approach that the PollyVote successfully used to forecast U.S. presidential elections since 2004, and the 2013 German federal election.” {Read the rest here.}

“The PollyVote was launched in 2004 by forecasting expert J. Scott Armstrong and the political scientists Alfred Cuzán and Randy Jones. In 2007, Andreas Graefe joined the project. For more information about the team click here.”

Read about their track record and their publications about the PollyVote project. To learn more see their Frequently Asked Questions page. News stories about PollyVote data are automatically generated by software of the German-based company AX Semantics. Here’s how they do it…

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Nassim Nicholas Taleb warns us about climate change

Summary:  This is the second post looking at statistician Nassim Nicholas Taleb’s insights about “ruin” risks, and what they tell us about climate change. Here we look at his warning about climate change and two factors he ignores: the duration of the climate risk window and the odds of a climate disaster. The danger is real but the stories that we face certain doom are wild exaggerations, which make rational preparation more difficult. The previous post was Nassim Nicholas Taleb looks at the risks threatening humanity.

Cover of "Turning the Tide On Climate Change" by Robert Kandel

Cover of “Turning the Tide On Climate Change” by Robert Kandel (2009).

Yesterday’s post examined a methodology developed by a team including Nassim Nicholas Taleb for identifying “ruin” risks, where the result is non-recoverable for global civilization — or even the biosphere (described in “Mathematical Foundations for the Precautionary Principle“).

They wrote a note applying their method to one of the major risk debates of our time: “Climate models and precautionary measures” in Science and Technology, in press. The authors are brilliant, and it states with unusual clarity common arguments for radical and immediate action to fight climate change. Here’s the core of their analysis (it’s worth reading in full).

“Those who contend that models make accurate predictions argue for specific policies to stem the foreseen damaging effects; those who doubt their accuracy cite a lack of reliable evidence of harm to warrant policy action. These two alternatives are not exhaustive. One can sidestep the “skepticism” of those who question existing climate-models, by framing risk in the most straight-forward possible terms, at the global scale. That is, we should ask ‘what would the correct policy be if we had no reliable models?’

“We have only one planet. This fact radically constrains the kinds of risks that are appropriate to take at a large-scale. Even a risk with a very low probability becomes unacceptable when it affects all of us –– there is no reversing mistakes of that magnitude.

“…While some amount of pollution is inevitable, high quantities of any pollutant put us at a rapidly increasing risk of destabilizing the climate, a system that is integral to the biosphere. Ergo, we should build down CO2 emissions, even regardless of what climate-models tell us.

“…This leads to the following asymmetry in climate policy. The scale of the effect must be demonstrated tube large enough to have impact. Once this is shown, and it has been, the burden of proof of absence of harm icon those who would deny it.”

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