Wednesday, February 24, 2010

A Black Box

The IPCC has a Special Committee on Extreme Events and Disasters, which was set up in the spring of 2009. Andy Revkin has the story of my nomination to the committee, along with 30 other U.S. experts. Behind closed doors the IPCC selected 13 of these 31 nominees to serve on their committee. I was not included, despite the fact that I have more relevant publications than any other U.S. nominee (Google scholar) and numerous participants were selected who have no publications in the area of climate change and extreme events. Revkin finds this a bit curious, but was unable to get the IPCC to explain how it made its empanelment decisions.

The IPCC report includes the following focal areas, among others:
Changes in impacts of climate extremes: human systems and ecosystems
    • Role of climate extremes in natural and socioeconomic systems
    • Nature of impacts and relation to hazards
    • Observed trends in system exposure and vulnerability
    • System- and sector-based aspects of vulnerability, exposures, and impacts
    • Regional aspects of vulnerability, exposures, and impacts
    • Costs of climate extremes and disasters
My nomination came about when a colleague asked me in the spring of 2009 if I was participating in the committee. I explained to him that there was no point, as the IPCC would never select me to be included. He said they'd have to select me, if nominated, given my expertise and the IPCC's historical reliance on my work. So we made a bet of a beer, and I was nominated. Obviously, I won the bet and the beer. Since then, a range of colleagues have asked me why I am not participating on the committee.

There is a good case to be made that since I have collaborated in a lot of work in this area, I should not be on the committee, because I would be evaluating my own work. I think that this argument makes sense. However, this has not been a criterion used by the IPCC in its empanelment decisions in the past or on the extremes committee (based on who else was selected). However, having seen the efforts of the IPCC to actively undercut my work in its past reports and more recently via press release, I have my views as to what sort of criteria it employed in deciding the panel's membership;-)

LCCJ à 20kgs

Lccj 2x20kg: 5, 66 (9min)

Had a friend count for me. That was very helpful. STill, I miscalculated the last minutes and thought I had to sprint in order to make 64. I sprinted and felt like dying big - Crossfit-style - and put down the weight. Then I saw that I had almost a minute left. Well, well...:-).

1,000 Jars of Peanut Butter


Drew Page of Paris High School Football recently did SportsLeader very proud. He and some friends of his decided that they wanted to help the people in Haiti. Their solution: Peanut Butter.

Drew took it upon himself to approach local businesses in his hometown of Paris Kentucky and ask them if he could put up a poster and some crates to collect peanut butter for the victims of the earthquake. 7 businesses said go for it. He then went home with his brother and enlisted his help to make posters and gather some stuff to get the job done. After 4 hours they brought the materials to the businesses and less than one month later ... they collected 1,000 jars of peanut butter.

Drew said, "Every night I would pray that the Lord would make this work. He answered my prayers."

Together with his friends from other towns they collected a total of 10,000 jars ... all being delivered to the Red Cross for them to ship to Haiti.

Coaches - sometimes it is easy to get discouraged ... thinking that "my kids just don't get it ..." Well as you can see - Drew got it!

God bless, Lou



Judy Curry on Credibility in Climate Science

Judy Curry, a climate scientist at Georgia Tech, has written a thoughtful essay on credibility in climate science. She has asked that it be discussed on a range of blogs with different perspectives. I am happy to discuss it here. Here is an excerpt:
In their misguided war against the skeptics, the CRU emails reveal that core research values became compromised. Much has been said about the role of the highly politicized environment in providing an extremely difficult environment in which to conduct science that produces a lot of stress for the scientists. There is no question that this environment is not conducive to science and scientists need more support from their institutions in dealing with it. However, there is nothing in this crazy environment that is worth sacrificing your personal or professional integrity. And when your science receives this kind of attention, it means that the science is really important to the public. Therefore scientists need to do everything possible to make sure that they effectively communicate uncertainty, risk, probability and complexity, and provide a context that includes alternative and competing scientific viewpoints. This is an important responsibility that individual scientists and particularly the institutions need to take very seriously.
Please go and read the whole thing, and feel free to come back and discuss here.

phd

Decarbonization of the Colorado Economy

In today's Denver Post, Vincent Carroll has a column that discusses my testimony/presentation last week to the Colorado Air Quality Control Commission. I was invited to testify and to present an analysis of the implications of Colorado's targets and time tables for emissions reductions using the methodology that I have applied previously to policies in Britain, Japan and Australia (and forthcoming in my new book, the rest of the world).

Carroll provides a nice summary of my presentation:
The Colorado Climate Action Plan adopted by Gov. Bill Ritter's administration states that by 2020, "Colorado will reduce greenhouse gas emissions . . . by 20 percent below 2005 levels"; by 2050, the goal is 80 percent. Environmental groups promote these reductions as the minimum of what must be done to forestall calamity, which is why few Democratic politicians are willing to stand up and say, "Sorry, that's just not possible."

To understand why it's not possible, consider testimony presented last week to the Colorado Air Quality Control Commission by Roger Pielke Jr., an environmental sciences professor at CU-Boulder.

Although Pielke believes the "continuing increase in atmospheric concentrations of carbon dioxide could pose large risks," he also insists that the "design of effective policy starts with a realistic view of what the challenges are." Yet for Colorado to reach its 2020 emissions goal, he told the commission — assuming the same rate of increase in energy demand that occurred between 1997 and 2007 — this state would have to conjure up additional clean energy equivalent to 13 nuclear power plants of one gigawatt each. Alternatively, it would have to install the equivalent of more than 11,000 wind turbines in Colorado by 2020 — monster turbines of 2.5 megawatts each — or more than three turbines every day for the next 10 years!

Even that poster project of renewable energy, the Colorado Green Wind Farm near Lamar, boasts just 108 turbines — and they each generate 1.5 megawatts.

Such huge amounts of clean energy are necessary because we're talking about a major reduction in total greenhouse gases — including not only those related to electricity and heating but transportation, too.

It's possible, of course, that growth in energy demand will slow in coming years. But even if you halved growth, you'd still need more than 6,000 wind turbines or seven nuclear plants — neither of which is remotely likely, either.

Pielke doesn't counsel despair. For one thing, advanced economies have been "decarbonizing" for decades in the sense that less and less carbon dioxide is emitted for each $1,000 of gross domestic product; indeed, the annual rate of decarbonization has been about 2 percent for a quarter century. Yet it would have to accelerate to more than 5 percent annually for Colorado to meet its goal. Even hiking the renewable energy standard for electricity, as the legislature is doing, won't appreciably push the needle.

What's needed, Pielke argues, is far greater emphasis nationally on accelerating innovation. As Bill Gates noted last month on his blog, to reach the 80 percent reduction goal by 2050 would mean cutting "emissions from transportation and electrical production in participating countries down to near zero." And to do that, you "clearly need innovation that leads to entirely new approaches to generating power."
The mathematics of decarbonization are not complicated. Under even modest projections of economic growth (i.e., from 2% to 5% per year), Colorado would have to achieve rates of decarbonization of its economy in excess of 5% per year, well above its historical rate of about 2%. But rates of decarbonization is a fairly technical and abstract term lacking any intuitive meaning. So in my presentation to the AQCC I sought to translate what this might imply practically using a more meaningful metric -- the energy produced by nuclear power plant-equivalents or wind turbine-equivalents.

The math here is not complicated either. A 20% reduction in emissions from 2005 levels is about the emissions of 1997. The energy consumed in Colorado in 1997 was about 1.1 quads (quadrillion BTUs). Under an assumption that energy consumption will increase 2010-2020 at the same rate of growth as 1997-2007, this means that Colorado would consume about 2 quads in 2020. To get back to the emissions equivalent with 1.1 quads means coming up with about 0.9 quads of carbon-free energy. If 1 quad is equivalent to 11 GW, then Colorado will need to come up with about 10 GW of new carbon-free energy by 2020. If you want to assume that growth in new energy consumption can be halved -- a really big task given Colorado's expected population growth -- then you'd need about 5 GW of new carbon-free energy. I also presented to the Commissioners a scenario assuming that there is no growth in energy consumption in Colorado from 2007 levels (not going to happen), as a lower bound.

If growth in energy consumption continues at its historical rate (of about 2.6% per year), then this means that to achieve its 2020 emissions reduction target Colorado will need (more than) the equivalent of about 13 1 GW nuclear power plants operating at 75% efficiency. Don't like a nuclear comparison? OK, then this means that Colorado will need the equivalent of more than 11,000 2.5 MW wind turbines operating at 33% efficiency. I have considered none of the practical issues associated with grid integration, intermittency, electricity vs. liquid fuels and so on. This is one reason why I think my analysis errs on the side of underestimating the actual challenge. Remember that there are only about 3,500 days until 2020.

Of course, there are typically thick reports produced by experts with highly complex plans for meeting emissions reductions goals involving changes across the economy (and indeed there are such plans that have been produced for Colorado). However, even though these plans are far more complex than this simple exercise, they are arguably far more difficult to achieve due to their greater complexity. These plans express the challenge differently, but they make meeting challenge of meeting the targets no simpler than the magnitude of the challenge as presented here. Sometimes complexity obscures the obvious. My analysis make make more sense when you realize that we are not really talking about a 20% cut in emissions, but as much as a 45-50% reduction in emissions from levels that might occur in 2020 under plausible scenarios for business as usual. That amount of emissions approaches the carbon dioxide emitted from total energy consumption in Colorado in the mid-1990s.

The math here is not complicated and you can do this sort of analysis yourself. Indeed I encourage people not to take my word for it, but to just do the math. The data is readily available from BEA and EIA, and while it is of course possible to vary assumptions in many ways (e.g., by energy source based on different carbon intensities), the bottom-line result of this analysis -- that it appears unlikely and even impossible for Colorado to meet its 2020 emissions reductions target -- seems pretty robust.

HEROES-John Bogle



When I first started investing and learning about stocks and finance, I was a value investor and trying to emulate Warren Buffett. It did not take me to long to realize that I was not Warren Buffett and neither was anyone else. In my efforts to find a mutual fund to invest in and save myself all the time and trouble researching and buying my own stocks entailed, I learned how few of these mutual funds actually beat the market and how foolish it was to try and pick a winning fund. With more mutual funds than stocks out there, it was going to be about the same as being a stockpicker. I also read Malkiel's A Random Walk Down Wall Street, and I came to the conclusion that beating the market was a fool's errand.

The answer to my problems was passive investing, and one man made that possible for me. That man was John Bogle, the founder of Vanguard and the first one to offer an S&P 500 index fund for investors such as myself. I moved my holdings to index funds, and I have never looked back. It was a good decision.

John Bogle is a rare individual. He is an honest man in SlimeWorld. He calls out his own industry and excoriates it for the exorbitant fees that it charges investors. It is these fees that cause investors to do poorly against the market. It doesn't much to realize that the huge profits financial service firms make are from milking their clients through every fee they can charge. This would be justifiable if these firms actually rendered value for these fees, but they don't. I am glad I have Vanguard.

John Bogle is the best friend the average investor can have. His wisdom is timeless and works. He knows what he is talking about, and Vanguard carries on the legacy of his wisdom.

Collected Bogle Wisdom:

Time is your friend; impulse is your enemy.

If you have trouble imaging a 20% loss in the stock market, you shouldn't be in stocks.

When reward is at its pinnacle, risk is near at hand.

Time is your friend; impulse is your enemy.

The most important thing is for investors to have a realistic idea of what future returns they can look forward to in the stock and bond markets, and not in a day or a week or a month, which is idle and futile, but looking ahead to the next decade and seriously considering what rational expectations might be for market returns.

The stock market's day-to-day is actually a distraction to the business of investing.

Don't assume your retirement provider or money management firm espouses a standard of honesty, full and fair disclosure, or putting its clients' interests first.

Don't try to time your entry.

Mutual funds can make no claim to superiority over the market averages.

Indeed, the evidence is compelling that when decade-long real stock returns are inordinately high by historical standards, returns in subsequent decades are likely to tumble; when past returns are exceptionally low, future returns are apt to rise. What it's all about, it seems, is reversion to the mean.

The boom and the bust were normal—just two more swings in stock returns over the past century. Reversion to the mean is the iron rule of the financial markets.

On balance, the financial system subracts value from society.

The mutual fund industry has been built, in a sense, on witchcraft.

As I have earlier noted, the most important things in life and in business can’t be measured. The trite bromide 'If you can measure it, you can manage it' has been a hindrance in the building a great real-world organization, just as it has been a hindrance in evaluating the real-world economy. It is character, not numbers, that make the world go ‘round. How can we possibly measure the qualities of human existence that give our lives and careers meaning? How about grace, kindness, and integrity? What value do we put on passion, devotion, and trust? How much do cheerfulness, the lilt of a human voice, and a touch of pride add to our lives? Tell me, please, if you can, how to value friendship, cooperation, dedication, and spirit. Categorically, the firm that ignores the intangible qualities that the human beings who are our colleagues bring to their careers will never build a great workforce or a great organization.

There's far too much self-interest. We used to talk about stewardship; now, it's all about salesmanship. It's the triumph of marketing over management. Nobody has joined me in this debate because they simply can't walk the walk. There are billions of dollars at stake. If the industry's whole reason for being is to rake in more and more fees from investors, it's pretty hard to say, "I think we should be more responsive to investors."

They don't like my ideas at all. But I maintain that the point of the mutual fund business is to help shareholders capture their fair share of the market's return.

If we've learned anything from this last decade, it's that costs are the only predictable thing in investing.

It's absurd to think that buy-and-hold is dead. I've made this case many times and I'll make it again. A buy-and-hold group holds 50 percent of every stock in the S&P 500. The other 50 percent is held by those who trade-I call them speculators-who trade among themselves. At the end of a period, the holders will have captured 100 percent of the return while the other group, tossing stocks back and forth, has given away much of the return through fees, fees, and more fees. The simple truth is that long-term investors win as a group and short-term investors lose as a group. It's pretty black and white. The math is on my side.