You Can’t Trust ‘Climate Economics’

Governments, banks and other institutions have based policies on models unconnected to reality

By Roger Pielke Jr. Excerpts:

"Nature in December retracted one of the most influential climate economics papers of the past decade. The paper, by Maximilian Kotz, Anders Levermann and Leonie Wenz, claimed that unmitigated climate change would cost the global economy $38 trillion a year (in 2005 international dollars) by midcentury." 

"The authors acknowledged that its errors were “too substantial” for a correction."

"The retraction, however, isn’t a one-off. It revealed a crack that runs much deeper into the foundation of climate research."

"Can researchers actually measure how climate affects the economy from the historical record?"

"no"

"Federal agencies . . . estimate the “social cost of carbon” when assessing the costs and benefits of proposed environmental policies. This framework has shaped regulations governing appliance standards, pipeline permitting and vehicle emissions."

"the method underlying this subfield of economics can’t do what researchers claim it can. The problem . . . is that the statistical procedure strips out nearly everything that would allow researchers to identify a climate signal, then mistakes the residual noise for that signal. Lumping together countries with similar average temperatures but entirely different institutions, histories and natural resources and then calculating a single damage relationship for all of them doesn’t work; it describes the average but fails to describe a single real place on earth accurately."

"there’s no way out of this methodological predicament; the future effects of climate change are irreducibly uncertain"

"researchers built many of their climate projections on the back of a hypothetical standardized scenario called Representative Concentration Pathway 8.5—a vision of the future which required coal consumption to quintuple by 2100 based on assumptions about future energy use. Those assumptions have already diverged sharply from actual energy trends, and we know today that the scenario is implausibly extreme."

"many scientists continue to emphasize RCP8.5 in climate research"

"Projections of flood damage, heat mortality, agricultural disruption and wildfire risk have rested on an implausible baseline that describes an imaginary, modeled future."

"An insurance company modified a hurricane loss data set by starting from my team’s carefully collected data. Many of those modifications have no documentation and no basis in research."

"papers that have used the corrupted data set remain in the literature today."