Posted 19 December 2008

"The problem is that, just like complex financial derivatives, no-one really knows how the world's weather systems interact and evolve with time....Assumptions about continued high oil prices, economic growth and increases in carbon dioxide emissions were made on the understanding that things would broadly go on as they had in the recent past and that any bubbles would slowly deflate rather than burst. All that has been turned on its head by the credit crunch, compounded by the Madoff scandal and doubtless by other skeletons still to come out of their particular cupboards."  - UK Scientific Alliance

 
 

UK  Scientific  Alliance

 19 December 2008

What lessons can we learn from 2008...and how might things develop in 2009?

2008 will be remembered by most people around the world as the year of The Crash. The long period of growth which improved the lives of the great majority (but, unfortunately, still not those of most Africans or significant minorities in other developing regions) seemed unstoppable, but masked a financial system built on foundations of sand. Inevitably, these were washed away, first by the sub-prime mortgage crisis in the USA , and then by waves of equally unwelcome and confidence-sapping news from the banks and hedge funds.

In addition to reinforcing the old maxim "if it seems too good to be true, it probably is" there are two lessons to be learnt from this fiasco. The first is that we should not put undue trust in something we do not understand. In the complex world of financial derivatives, most of the companies selling them did not understand them either, hence the remaining uncertainty about the level of losses banks are exposed to. At the same time, regulators often seemed complacent and to have been asleep at the wheel. The second is that making projections based on current trends will almost certainly give the wrong answer.

These lessons do not just apply to finance and economics, but are equally applicable to many other areas of life, and are particularly true of science. Of course, modern science is too complex for non-specialists to understand the arcane details. But we can expect that professional scientists will only draw conclusions based on sound evidence. Indeed, scientists are notoriously difficult to pin down to straight answers; conclusions are always hedged around with caveats which lay people find difficult to deal with.

But when a certain view becomes dominant and is accepted as received wisdom, the basics of it are rarely questioned. The current state of climate science is a perfect example. Mainstream scientists accept the hypothesis that the increase in atmospheric carbon dioxide in the industrial era is the primary driver of changes in the global climate and that, unchecked, this is likely to lead to a dangerous (to humans and many other species) increase in average temperatures.

If this was now just the basis of academic work, possibly to be replaced by a new paradigm at some point in the future, the general public would care little, nor would they need to. But climate science is way past that stage. The greenhouse gas hypothesis - plausible but with no overwhelming evidence to pick it out from other candidates - underpins a complex modelling exercise which tries to reproduce the way that global climate will develop over the 21st century and beyond.

The problem is that, just like complex financial derivatives, no-one really knows how the world's weather systems interact and evolve with time. Summer Arctic sea ice has been melting to a greater extent in recent years than was the case in the latter half of the 20th century, but is this due primarily to rising average temperatures driven by the additional radiative forcing provided by small increase in carbon dioxide, or to changes in winds and ocean currents, the ultimate drivers of which are not understood? Are patterns of drought and flood reflecting normal long-term cycles, or are they mainly influenced by an increase in the greenhouse effect?  No-one knows for sure.

Even more importantly, climatologists are unable to understand enough about the formation and extent of different types of clouds to say whether they are having a net positive or negative effect on global temperatures. This may sound like a detail, but when a few percent difference in cloud cover can more than compensate for any carbon dioxide-driven temperature increase, it is a key factor. And yet complex computer models are being built on the belief that the world's climate system is sufficiently well understood not just to project its development many years into the future, but also to base on these projections policies which could force major changes to society. A complex model, based on dubious assumptions and poorly understood by those using it: sounds a bit like financial derivatives.

Which brings us to the second point about the dangers of projecting from current knowledge. Assumptions about continued high oil prices, economic growth and increases in carbon dioxide emissions were made on the understanding that things would broadly go on as they had in the recent past and that any bubbles would slowly deflate rather than burst. All that has been turned on its head by the credit crunch, compounded by the Madoff scandal and doubtless by other skeletons still to come out of their particular cupboards.

When it comes to climate, the official message is that temperatures are continuing to rise as models predict, with short-term influences such as La Niña affecting the actual figures year by year. Indeed, much of the media, fed the stories by activist scientists, is still willing to ramp up concerns about the speed of change being even faster than predicted (or, in IPCC-speak, projected). But the reality is that we have now had ten years without a rise in average temperatures. 2008 is being touted as the tenth warmest year on record. While this is factually correct, it is a misleading statistic, since there has been no upward trend in temperature over the last decade.

The IPCC tells us still to expect renewed warming in coming years. Other scientists point to the very quiet phase the Sun is entering, historically correlated with lower than average temperatures. Whatever may turn out to be the case, it is clearly impossible to project climatic changes with any realistic degree of certainty.

Looking forward to 2009, it is however clear that economics will dominate the scene as governments try to boost output and avoid the recession being longer and deeper than necessary. But it is also the year when the world's governments are intending to agree a post-Kyoto agreement on emissions reductions, in Copenhagen next December. And the expectation is that the USA under President Obama will play a leading role in this, alongside the EU, which already regards itself as setting an example for the rest of the world to follow.

Unfortunately (or, if you think the policy direction is misguided, fortunately) economic realities are forcing a throttling back of the commitments and action by many Member States. The same will almost certainly be the case across the Atlantic . No US president will compromise his country's economy for the sake of the goal of climate control. There will doubtless be a face-saving agreement in Copenhagen , or possibly a delay to accommodate the ramping up of American policy under the new presidency.

But it is difficult to see a new international agreement being any more effective than the Kyoto protocol itself. By the time of the Copenhagen summit, provisional 2009 temperature figures will be in. By the time any new agreement comes into force in 2013, several more years of data will have been published. If they continue to show no renewal of the warming trend, it is difficult to see how the political will can be maintained to push through emissions reduction measures.

However, what could and should be done in the face of scientific uncertainty is to fund a major push of research into new technologies for power generation, energy storage and transport motive power. This is a rational no-regrets policy, and a good way to learn from the lessons of 2008.

This is the last Scientific Alliance newsletter for this year. The next one is due on 9th January. We wish all our readers a very happy Christmas and a peaceful and prosperous New Year. If you have not yet thought of a New Year's resolution, you could do worse than try "I need to look at the evidence and make up my own mind".

The Scientific Alliance
St John's Innovation Centre, Cowley Road, Cambridge CB4 0WS
Tel: +44 1223 421242

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