The other day in a somewhat tossed-off post I expressed unease at the influence mainstream economists have on climate policy, particularly within the Obama administration. Elsewhere on the green beat you’ve got people like Chu, who comes out of the science and technology worlds, or Browner, who’s been deeply involved in the mechanics of environmental policy implementation for decades—they are unusual both for their expertise and their ambition around climate and energy. Contrast that to the economic team, which is populated with conventional Rubinites, veterans of the Clinton administration. Their avatar is Larry Summers, who spent Clinton’s term pushing back against Browner on climate policy and who has popped up on green radars thus far mainly as the guy who had a hand in cutting back transit funding in the stimulus package. Geithner is basically cut from the same cloth.
It was with all that in mind that I found the notion of a Treasury Dept.-based climate policy team a less-than-thrilling prospect—my presumption, absent other evidence (and I made it very clear I was just noodling), is that it will be a Summers-esque force for go-slow incrementalism. I probably shouldn’t have used the term "mainstream economists," since that’s rather imprecise, but anyone who’s watched the Obama team take shape knows what I mean.
Anyway, this prompted some substance-free snark over on Common Tragedies, followed by more substance-free snark on Environmental Economics, followed by some substance-free mutual high-fiving in the comments. (This kind of cliquishness will surely help spread the proper respect for the social sciences.)
Still, Adam Stein—a guy who knows how to mix substance and snark in proper proportion—is concerned about what he sees as sporadic and inconsistent attacks on economists from environmental quarters. So this is as good an occasion as any to write a post on that subject I’ve been meaning to write forever. I want to try to get at a few things that bug me about economists the way (some!) economists and economics (often!) tend to manifest themselves in public debates over climate change.
(Important caveats: Joe Romm is great, but I am not in some kind of cabal with him. He does not speak for me, or vice versa. Similarly, I do not speak for Grist. Similarly, I do not speak for Environmentalists. Just me.)
The first irksome thing is well-illustrated by a quote from economist Robert Stavins in Elizabeth Kolbert’s story on green jobs:
"Let’s say I want to have a dinner party. It’s important that I cook dinner, and I’d also like to take a shower before the guests arrive. You might think, Well, it would be really efficient for me to cook dinner in the shower. But it turns out that if I try that I’m not going to get very clean and it’s not going to be a very good dinner. And that is an illustration of the fact that it is not always best to try to address two challenges with what in the policy world we call a single-policy instrument."
This prompted Romm to go off on a somewhat over-the-top and over-broad rant, which in turn prompted substance-free snark at Common Tragedies and Environmental Economics, along with a great deal of mutual high-fiving in comments. (Sigh.) Tim Haab (who thinks I’m an idiot) says ...
... the point is not that we shouldn’t try to meet both goals—good dinner and good shower—but rather, the policy of addressing both at once is STUPID. Determining the best way to make dinner in the shower will result in a bad shower and bad dinner (both outcomes will be suboptimal). There are better ways to reach both goals.
Targeting climate change under the mask of stimulus policy may result in suboptimal stimulus, and targeting stimulus under the mask of climate policy may result in suboptimal climate outcomes.
This is econo-thinking in action, with all the condescension and browbeating those outside the profession have come to know and love (all caps, even). "You will accept my Econ 101 principles or you’re STUPID!"
The ideal, apparently, is: You build a econometric model for climate policy, aiming for optimal outcome (defined as reduction in emissions). Adding multiple goals just complicates the model and leads to suboptimal outcomes. For each discrete goal, you want your distinct model and your distinct optimized outcome. Merging spreadsheets is STUPID.
But this is a completely absurd attitude to carry into the real world, for reasons that can be illustrated by tweaking the absurd analogy that started the whole thing. Say I want to get to the bus stop to catch my bus, and I want to eat breakfast. I could have a much better and more enjoyable breakfast if I sat at my table and took the time to cook eggs alongside my bagel. And I could get to the bus stop faster if I wasn’t trying to eat a bagel while I walked. But in the real world, I have multiple goals and limited time and resources. I’m friggin’ late. Eating a bagel while I walk isn’t the best breakfast or the fastest walk, but it gets both done when otherwise I’d have to sacrifice one or the other. The choice is very frequently suboptimal or nothing at all.
Similarly, in the world of politics there are multiple urgent priorities at any given moment. Attention from policymakers is highly limited. The time available to solve problems is limited. Public support is limited. Money is limited. It would be nice if we could sit back and optimize a policy to create as many jobs as possible, and optimize another policy to reduce emissions as much as possible, and optimize a third policy to reduce economic injustice. But we are not tenured academics, we are harried satisficers. If we can craft a policy that hits all three of those goals—even if any one of the goals could be more optimally achieved by some other pony policy—then we should count ourselves fracking lucky and jump on it.
Into that real-world situation wanders the economist, bad-mouthing our win-win policy in the press, advising policymakers against it because there’s a pony out there waiting. They don’t notice that we never catch the pony.
If economists want to make their assessments based on pure policy merit (as their models indicate it), abstracted from all grubby sociopolitical considerations, fine. They can point out the range of probable effects of various policies based on a range of assumptions. But they don’t just do that. They get involved in politics, weighing in on political questions and advising political decisionmakers. They use their presumed authority, and allow it to be used, to recommend policies not in the abstract but in concrete political contexts. At that point they should no longer be able to hide behind their presumed expertise. When it comes to questions of politics, of competing values, an economist’s judgments carry no more weight than any other citizen’s.
Secondly ... oh screw it. This post is way too long already. I was going to talk about how economists hide value judgments (e.g. discount rate) in their models but present the results as a kind of science, thus relegating anyone who disputes them to the status of fuzzy-headed hippie. Those value judgments ought to be the subject of public debate but too rarely are, allowing economists to basically smuggle their values into the public square under the guise of "expertise."
They also hide highly contestable or outright false assumptions in models. Like Nordhaus, who models climate change damage as a steadily rising linear function when the whole damn point is that we could flip over irreversibly into a discontinuous state at any moment, only nobody knows when, or at what level of atmospheric CO2.
Changing those assumptions, sometimes even slightly, can vastly change the model outcomes. (After all, Stern is just Nordhaus with a different discount rate.)
And then I was going to step back and take note of how economists generally have a horrible historical record of predicting the effects of environmental policies—and generally err on the side of overestimating the costs and underestimating the benefits. (Not to mention how most of them failed to see the greatest economic downturn of the last 50 years coming.) And how the profession never seems to be held accountable for those failures, despite the fact that every environmentalist has to carry Paul Erlich’s stupid fracking bet on their shoulders in perpetuity.
And then I was going to conclude on a conciliatory note, by saying that attacks on the whole discipline of economics are not useful (just like attacks on “environmentalists”). Those voices representing the discipline in the public square at any given moment are not necessarily a representative subset. Critiques generally ought to be more fine-grained, focused on particular schools of thought or analyses. I was going to talk about how there are tons of economists doing great work, challenging some of the assumptions conventional economists bring to bear on these issues. (Say, Daley and the ecological economists; Skip Laitner and the crew at ACEEE; the McKinsey folks.) And about how economists have tons to offer, and how communication between economists and greens ought to be far better than it is, and how I’ve learned a great deal from economists. Hell, I was going to hug somebody.
But then I realized that by this point I’m probably writing to an empty room, so I should just wrap it up.
Top 25 reasons to give a damn about climate change
Feed the world sustainably by 2050? Yes, we can!
Comments
View as Flat
ce1907 Posted 7:45 am
23 Feb 2009
and reporters are worse.
Most reporters are lazy, and poorly informed. They are little better than stenographers.
Half-bright pol staff call reporters and get them to print half-baked quotes ginned up by economists in hock for money or ego or both
in short, process is corrupted and unlikely to be improved. put no hope in good faith or reformed attitudes
figure out the most important thing you need, and find a way to buy it
good luck
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Adam Stein Posted 7:55 am
23 Feb 2009
It's impossible to think about environmental policy without employing economic thinking. Whenever we talk about how, say, agricultural subsidies change the incentives for farmers, thereby affecting the price of commodities, land use patterns, food consumption, etc. -- we're making an economic argument. This is part of the reason I really dislike overbroad rants against capital E economics. You're pretty much waving a giant banner that says "Ignore me!" when you haul off against an entire huge branch of social science. Targeted criticisms, on the other hand, are not just fine -- they're essential.
I also think there's a fundamental disjunction between micro- and macro-economics. Microeconomics, while certainly lending itself to a degree of oversimplification, is still an essential framework for considering how the world works. Macro, on the other hand, is an utterly baffling form of devilry difficult for even informed lay people to understand and also comparatively less settled among experts. Hence the debates over models.
Oh, hell. This is already too long and boring. I'll hit the post button and then consider whether I can work up thoughts in a pithier manner.
www.terrapass.com/blog
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David Roberts Posted 8:05 am
23 Feb 2009
grist.org
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Ted Clayton Posted 9:44 am
23 Feb 2009
It's a break of sorts, that so long as things are bad, the public will be more than normally wary, suspicious, pissed, etc. with economists. And, the economic climate could deteriorate for a long time.
Economists in the modern setting are what in the days of Kings & Queens were called "courtiers". They are essentially a specialized lobby.
Economics is basically a cloaked confidence-game, presently suckin' hind teat.
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biodiversivist Posted 9:54 am
23 Feb 2009
This was a fun read. I see Odograph joined the fray over at EE. Always insightful.
The Wikipedia site about the bets relies heavily on input from a guy named Brian Carnell. Listed twice in the notes, I would describe him as a conservative libertarian anti-abortionist atheist ex-Catholic.
He got his hands on the URL name overpopulation.com many years ago and used it to suck people in to blast the concept of overpopulation. Last time I looked the site had been taken over by religious fruitballs. He hates Ehrlich. Also, much of the info on the wiki site has no citation so don't trust it. Most of the links have also gone dead. The price of metals from 2000 on are missing. They would be a very interesting addition to the graph.
But like I said in another comment, the price of metals goes up and down with demand so Simon got lucky when he won. He could just as easily have lost. If anything the bet exposed the lack of understanding both men had of the concept "peak anything." Until we have found the last of the viable metal ore reserves prices will continue to oscillate.
I see Romm now has a few shout outs on the wikipedia article thanks to some bets he made.
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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Bart Anderson Posted 9:58 am
23 Feb 2009
(Ideology being a set of ideas that underlies and justifies the interests of a particular group.)
The economics that David is talking about is one particular kind of economics.
There have been many schools of economics - Keynes, Marx, ecological economics, etc. Over the last 30 years, alternative points of view have been purged from American economics. The resulting "mainstream" economics is highly suspect when it comes to policy advice, for all the reason that David mentions.
The intellectual bankruptcy of mainstream economics is becoming apparent as the financial system continues to implode.
There is going to be a great deal of anger directed against the economic doctrines that helped get us into this mess.
Hopefully what will emerge will be a better, less ideological version of economics.
Bart
Energy Bulletin
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Pompey Road Posted 11:07 am
23 Feb 2009
If they ever have a constuctive thought or a concensus they may become more relevent. John D. invented the modern corporation, turned a waste product into a more valuable product than he made his first million on. Lived economy of scale and if he did not invent it, it was because he was not an economist and could not come up with a text book name for it. Elastic Demand to him would have been the suspenders that held his pants up.
He never was the man he was made to be in the yellow press and I am not defending his business model in this time. I am just suspicious of the economical theories of people who have never actually been involved in the economy to the extent they never risked their fortune or invested their lives in the actual or the mechanics of it.
The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.
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Pangolin Posted 12:30 pm
23 Feb 2009
I have repeatedly seen economists argue against getting more services for less energy, even less money, because the financing of the transition couldn't be made with current "economic" structures. WTF? It's like we're ignoring physics because it doesn't agree with Grim's Fairy Tales.
If the experiences of the last three months haven't made it clear economists are poor fiction writers when are we going to get it? Why do these people have a voice in how we heat our houses and grow our food?
Could we please find another way of modeling reality that actually works? Could we try physics instead?
Put the Carbon Back
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archigeek Posted 11:44 pm
23 Feb 2009
The mellotron is your friend.
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Chilly Posted 11:54 pm
23 Feb 2009
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Sharon Astyk Posted 1:13 am
24 Feb 2009
Honestly, I don't think that it is possible to address the question of economics simply in terms of fine points of dissension - that is, I think that the discipline has to be itself open to critique and question. And the question of whether economics is a truly scholarly discipline, or a set of assumptions to which one must adhere to participate a la religious faith is perfectly legitimate one.
In fact, most economics more nearly resembles theology than it does science.
Sharon Astyk
Sharon, with dirt under her fingernails.
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Wilderness Terry Posted 1:23 am
24 Feb 2009
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Jon Rynn Posted 1:47 am
24 Feb 2009
In came Keynes with a theoretically consistent model, which saved the economics profession. Now, economists are in a similarly sketchy area, not just because of the financial meltdown, which is bad enough, but also when climate change proves to be much more of an economic problem than most economists predict.
But the main problem with microeconomics for the purposes of this discussion is that it is only supposed to be used for a specific domain of reality: that is, a single industry, in the short-term, in a competitive industry. That is very little help when discussing national problems, much less global, long-term problems.
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amazingdrx Posted 2:02 am
24 Feb 2009
...the whole damn point is that we could flip over irreversibly into a discontinuous state at any moment, only nobody knows when, or at what level of atmospheric CO2.
Ambiguous terminology, namely "discontiuous state" is not helpful. "Linear" was good, now contrast linear with exponential.
Why "nobody knows" is an important point, the IPCC wants to wait until 2014 to add exponwentuial feedback mechanism eveidence like ice melt and tudra methane to the model. That's going to be too late, since we already may have passed the GHG tipping point and not know it yet.
You build a econometric model for climate policy, aiming for optimal outcome (defined as reduction in emissions). Adding multiple goals just complicates the model and leads to suboptimal outcomes. For each discrete goal, you want your distinct model and your distinct optimized outcome. Merging spreadsheets is STUPID.
Why do they insist on "multiple goals" and models? Because for each one there will be a separate "free" market derivative scam, apparently the dream of almost every economist is to design the perfect computer model for hedge fund scamming.
Multiple scams means multiple cash inputs to their institutions and successful careers. One across the board economic stimulus/climate remediation model limits the prestige supply, and they have an endless demand for that commodity.
Determining the best way to make dinner in the shower will result in a bad shower and bad dinner
These are not Seinfeld fans, Kramer did it, hehey.
But seriously...Yes we can! Cook dinner, then have a waste heat collecting system in the oven or stove that heats water for our shower. If a fuel cell is used to get cooking heat, the water for the shower can even be pumped with the electricty from the fuel cell, the waste heat used to cook and heat the water.
Voodoo economics (it's all a quack religion) and actual science do not mix. They don't even seem to understand math principles like exponential change. Could they be turned into Walmart greeters? Would Walmart want economists? Doubtful.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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Pompey Road Posted 2:10 am
24 Feb 2009
I am sure the Bilderburg Group and the Trilateral Commission see's the big picture. Chaos or chance does not meet the requirements for predicting
future markets and no internatioanal banker would rely on this formula.
It is a planned economy but the acedemic economist can only study the economy in real time and make predictions based on older economic models. They are handicapped by not being privy to the meetings of the international banking elite. Well most of them are not members, the one's that are don't publish.
It is no coincidence the number of people from these organizations in the administrations since Jimmy Carters from has risen.
The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.
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amazingdrx Posted 2:28 am
24 Feb 2009
No conspiracy is needed. Industry and "free" trade interests defend the status quo. They fund economists to justify this status quo through think tanks and academia. Economists who aren't "free" traders don't get funded.
It's just that simple. Speaking of apologists for RICO hedge fund mobsters, "Stanke nankie" on capitol hill now. What a hedge fund tool.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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biodiversivist Posted 2:44 am
24 Feb 2009
This baby was cobbled together to explain why humans all over the world began to choose smaller families ...after the fact.
1)Family size will shrink with economic growth, just ignore America's baby boom during massive economic growth and Iran's radical drop in fertility with no economic growth.
2)Family size will increase in a weak economy but ignore the drop in fertility during America's great depression.
Economists saw fertility declines in places with economic growth and decided that poverty reduction is a necessary condition of fertility decline.
Then Iran proved that education and contraception without economic growth will also get fertility decline.
This theory has been used by the Catholic church and anti-abortionists to stifle women's education and contraception programs in favor of failed poverty reduction ideas. Fertility decline and poverty reduction are interlinked. Both should be promoted simultaneously, each assists the other. Nobody knows exactly how to end poverty but voluntary fertility reduction can be achieved with a minimum of expenditure and goes a long way to relieve poverty, or at least keep it from getting worse.
End of rant.
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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ce1907 Posted 2:59 am
24 Feb 2009
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amazingdrx Posted 3:05 am
24 Feb 2009
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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Pompey Road Posted 4:51 am
24 Feb 2009
The terms conspiracy and nut does not automatically explain the work that elite or intelligent individuals pursue in their fields of interest or endeavor. Economics is capital driven and the international bankers that set up Federal Reserves and finance the worlds governments is not conspiracy it is an economic fact. If such individuals do not trust the electorate of representative style governments to make good choices for the future, well it would be completely understandable to me. This could be agreeing with them and admitting that all conspiracy is not necessarily a bad thing and as I go through the membership list of both organizations "the one that has a membership list" there is no way I can classify this group into the nut category. Not to much into the nationalistic and view an economy without boarders but I never in fact said this a bad thing.
I will not do as some and speak to things I know little about and really have not made up my mind that their influence is such a bad thing. I do know they are still there as of 2008 when the sites of their last meeting are common knowledge and meetings are scheduled for 09. They definitely do not fall into the same class as the shooter on the grassy knoll. The deeper one digs and observes how they permeate international banking and the European and North American Governments one could make some casual observations about them but as I am not privy to the secret meetings they indulge in I will reserve judgment. Their stated mission is to influence the worlds economy and even social agenda.
David Rockefeller in his book, " Memoirs" said as much and said he was proud of it. Really when you have forwarded your agenda close to its completion there is no need for as much secrecy. Most people were just turned off early on by the conspiracy nut theory and wrote them off, especially when it come from Barry Goldwater. It really works to their favor when staying under the radar. Most people ignore the impact of the corporate lobby on the decision making process of government. Most are still under the delusion of one man one vote and their representatives making decisions based on the local, state or national will of the people.
When it comes to the electorate making sound decisions on some issues I may be inclined to agree with the international elite. I just lived through 8 years of a bad electorate choice, still can't say I have survived it yet!
The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.
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Pompey Road Posted 5:08 am
24 Feb 2009
Only the bottom and mid level feeders get sheared. Thank god for the irrevocabile trust and Swiss bankers.
The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.
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amazingdrx Posted 3:42 pm
24 Feb 2009
Well no harm in conspiracy theory Pomp, it could be right. I would rather put obvious ecidence upfront. These crooks are not only not apologetic, they are angry if anyone tells them to straighten up.
Obama gave them what for. Maybe he can reregulate.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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