Thursday, January 29, 2009

Uncertainty & irreversibility of climate change

Most commentators on climate change issues recognise the uncertainty attached to specific climatic forecasts. A few denialists even question the AGW hypothesis itself. Fewer scientists have commented on the irreversibility issues associated with AGW. In today's press there are reports on this latter issue - this one interestingly from FOX. Even if the smokesacks stop emitting GGEs the damages in terms of enhanced warming will persist for 1,000 years. The complete report by NOAA scientist Susan Soloman is here.

Economists have done much work analysing policy problems where there is high uncertainty as well as irreversibility. They can be modelled as optimal stopping problems.

Here one could calculate expected damages from climate change and the expected economic costs of dealing with these problems via mitigation and adaptation measures. Then, unless you are an extreme denialist, you would time an intervention to deal decisively with the problem and allocate a certain amount of resources to address the problem based on these expected value calculations.

With irreversibility calculating expected values is inappropriate. Not taking action or taking inadequate action to address the costs of climate change has more serious consequences than taking action inappropriately (too early or with an excessive use of resources) because the costs of climate change persist for very long periods due to irreversibility*. The respective benefits from taking action promptly and intensively are greater than the benefits from holding back on the response somewhat and underinvesting in the response. This asymmetrical loss of benefits provides a case for a prompter and more determined response than would be suggested by using expected values.

In short acting decisively (promptly and with significant public and private investments) to deal with climate change - and beyond levels suggested by replacing random variables by their means - makes sense if uncertainty is coupled with irreversibility. The argument is particularly strong because it does not rely on decision-maker risk aversion. With risk-aversion the argument is, of course, stronger still.

This argument is related to the economic case for managing natural resource assets such as wilderness 'conservatively'. This was originally put forward by Ken Arrow, Anthony Fisher and, in a separate argument, by Claude Henry - I discussed it 20 years ago here.

* There are 'sunk cost' irreversibilities associated with wasted-excessively early investment but these are less long-lived and less significant irreversibilities.

10 comments:

Spiros said...

Harry, environmentalists have talked about the precautionary principle for ages. Isn't this the same thing?

hc said...

PP is really based on something like infinite risk aversion. It is like the minimax principle of classical decision theory. You try to minimise the worst that can happen. I discussed this here. It doesn't work very well if there is a chance the policy might fail since then you incur the cost of the policy plus the environmental damage. The minimax policy will always be to do nothing.

The 'options' approach I outline doesn't involve risk aversion at all. People can want to maximise expected values but they generally shouldn't just replace random variables by their expected values.

The basic idea of the approach is that you act conservatively because not doing so cuts off more options.

conrad said...

I've heard this for years and years -- the French nuclear lobby uses it as an argument in favor of nuclear power. That the carbon life cycle takes hundreds of years is no new discovery -- the fact that people think it just drops out of the sky is all a bit odd and really just general ignorance.

jc said...

harry

What exactly was irreversible that CO2 stays in the air for 1,000 years?

So what? It isn't as though the world has never experienced C02 levels as high as now and even much, much higher with mammals existing at the same time.

this argument is simply catastrophist..

Tim Curtin said...

Oh frabjus day! I refer to the paper by Solomon et al (PNAS this week) which tells us that even if all CO2 emissions cease tomorrow, there will be no global mean surface temperature falls before the year 3000. No need for Kyoto 2 or ETS etc, as they will have nil impact for a thousand years. Global droughts (especially across WA and north-eastern Australia, where the present floods are merely a harbinger of endemic drought for the next 1000 years)and sea level rise are also inevitable even at the existing level of emissions, and are also irreversible for the next millennium even if emissions fall now to zero. As Susan Solomon was chief of AR4 WG1 of the IPCC, this is a tablet from the mountain. Let's eat drink and be merry, for nothing we do will achieve anything before 3000 because of the irreversibility "proved" by Sue. In case any doubt my account, the following is a direct paste from Sue's abstract: "This paper shows that the climate change that takes place due to increases in carbon dioxide concentration is largely irreversible for 1,000 years after emissions stop".

hc said...

What an incredible interpretation Tim. The implication is exactly the opposite - we should act ASAP and decisively to prevent further deterioration. We cannot left emissions proceed for a while and then expect a quick cleanup is possible.

Tim Curtin said...

Harry: the message from Sue Solomon et al is that the present level of CO2 emissions is such that even if reduced to zero tomorrow, the damage is "irreversible". There is nothing we can do, and whatever we might do would have no impact before 3000.

Meantime I would value your comments on my paper on Garnaut as published in Quadrant but rejected by you as ed. of Ec. Papers

Tim Curtin said...

Harry: Further to my last, what is amazing is the total inability of economists like you not to mention PNAS seriatim and Hansen et al to understand either basic accounting or the ex ante and ex post concepts of Keynesian economics. Ex post, after the events, the accounting identity is that (C) Increase in atmos. CO2 equals (E) emissions minus (A) oceanic and terrestrial absorption. Seemingly this is too much for you and Hansen and the whole IPCC mob to be able to grasp. That means you and they have no chance of understanding that ex ante, there are E and A, both independent of each other, which jointly determine C ex post. Amazing but true, 2500 Nobel prize winners are incapable of understanding this, still less Stern and Garnaut. Ignoring A means that net E (=C) is invariably over-estimated by a factor of 2, as evident in Hansen (passim) Garnaut and Stern.

hc said...

Tim, I don't believe that's the case - absorption by the oceans and on earth is taught in secondary schools as part of the carbon cycle. It is so basic to every scientific discussion.

Your claim that we can do nothing because CO2 emissions are irreversible is just wrong. We stop adding further net emissions. It implies a case for action.

Tim Curtin said...

Harry, you said: "absorption by the oceans and on earth is taught in secondary schools as part of the carbon cycle. It is so basic to every scientific discussion". Then why do Hansen et al always get it wrong, since Hansen et Sato et al (PNAS, 2004) down to Hansen et al. in Atmospheric Chemistry & Physics 2008. In the former he claims the airborne fraction (AF) average 60% from 1958, in the latter 58%. He is quite wrong, and should have failed the tests you evidently passed, for in fact the AF was only 40% in 2006-7 (see Marland et al at CDIAC or the Canadell et al Global Carbon Project) and averaged 57.8% from 1959 to 2007 (same sources). There are some who consider a difference of 20% or 18% as trivial, like Bernie Madoff, but the sums are huge in terms of GtC absorbed or not by the global biosphere.

You add that my "claim that we can do nothing because CO2 emissions are irreversible is just wrong. We stop adding further net emissions. It implies a case for action." Really, you can be quite superficial. I did not say what you claim, it was not me but Susan Solomon et al who stated in PNAS this very week that the existing atmospheric level of CO2 is such that even if we reduced emissions to zero tomorrow (rather than by 50% by 2050 as hoped for in Kyoto 2), the adverse climatic effects of this current level are irreversible until 3000. Do check their Equation 3, as that undermines their fatuous argument, however much I personally like the idea that nothing you or I do will have the slighest effect on their already "irreversible" climate change. Do remember that Sue Solomon is not just any old biddy, she is the lead editor of AR4 WG1 and its 2500 Nobel winners.