Climate Science vs. Macroeconomics

Climate change is much in the news. My view of climate science is that it shares a lot of the same problems as orthodox macroeconomics. Common features include:

1. Use of computer models in which there are a variety of parameter choices that can be used to fit historical data. There is no single model that is thought to represent truth. Instead, forecasts are made using a “consensus” of several models.

2. High causal density.

3. Some question about the use of aggregate data. Macro talks about “the” wage rate or “the” capital stock or “the” unemployment rate or “the” price level, but the divergencies and disparities are much more significant. Similarly, climate science talks about “the” average global temperature, when variations across seasons and locations is enormous.

Some differences include:

1. Macroeconomics clearly has some intrinsic political survival value. The Fed wants to be as powerful as it can be, so it sponsors a lot of research that deals with the importance of monetary policy. Politicians want excuses to run deficits, so Keynesian macro is attractive to them. Climate science has less intrinsic political value. Politicians do not really want to undertake the policies that would be needed to reduce carbon dioxide emissions.

2. Keynesian macroeconomics notoriously contradicts what one would predict using microeconomic models that otherwise work well. Climate science has more reliable “microfoundations” in greenhouse gas theory, although the fact that carbon dioxide is a relatively minor greenhouse gas (compared with water vapor, for example) is rarely mentioned in the press.

3. The proponents of Keynesian economics, while they might seem a bit dogmatic to someone like me, are not out to suppress those who disagree. The vast majority of them are charitable enough to acknowledge that there are reasonable doubts about the subject. Of all macroeconomists, I can think of only one who regularly hurls snarling, ad hominem insults at those who disagree. The others stick to arguing substance. Proponents of climate change theory routinely derogate skeptics.

I am a macroeconomics skeptic. I think that my background in the subject is deep enough that my reasons for skepticism are legitimate. See, for example, my memoirs of a would-be macroeconomist.

I am a climate science skeptic, but not based on a similarly deep background. I just look at the superficial similarities with macroeconomics and infer that skepticism is warranted. It is plausible to me that the climate “consensus” is way off. However, it could be off in either direction–maybe the temperature increase will be faster and sharper than the consensus forecast.

When it comes to the differences between macro and climate science, points (1) and (2) favor climate science. However, point (3) leans against climate science. Good ideas are persuasive. If you need to excommunicate unbelievers, you are dealing in religion, not science.

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45 Responses to Climate Science vs. Macroeconomics

  1. Andrew' says:

    Scott Adams gave me the words to articulate the oroblem. It is not an arms-length, good faith debate. It is a pure persuasion play.

    • Andrew' says:

      Ironically, the first question is “so what?” And the irony is they started with the answer: statist policies. Almost any issue would have sufficed. But they like using “science” because it disenfranchises the opposition in a way that seems beyond reproach.

      • nate says:

        I don’t get the appeal of Scott Adams at all. He’s obviously intelligent, but most of his posts lately are just non-falsifiable/testable rationalizations of whatever Trump happens to do. Just a bunch of mumbo jumbo about persuasion, etc. In my experience, many of Scott Adams fans are like this too. A few weeks ago I posted a question in the comments on his blog, “what would Trump have to do to get you to stop supporting him?”

        The first two answers: “stop being himself” and “appoint Pelosi VP and resign”. Seems to be the general theme.

        Coincidentally, note this this general approach with climate scientists, who are actually making testable predictions, which is in part how they’ve arrived to the conclusion they’re at today, namely: human caused climate change is definitely happening.

        • Andrew' says:

          They are making testable predictions that have worked out?

          The appeal of Scott Adams is the exact same as the appeal of Trump: they are the only ones we have.

          • Andrew' says:

            Oh, and you do understand that the debate has almost nothing to do with whether agw us happening, right?

          • Nate says:

            “…they are the only ones we have.” As Arnold would say, that’s a religion.

            Apologies for veering off the topic of this post, but:

            You’re right, Scott Adams did ostensibly predict a Trump win when very few other people thought it would happen, which should count for something. But, looking back, it appears these were pretty hedged. For example:


            Adams predicts a “Trump landslide win”, but goes on to say it’s really “for the sake of entertainment” and that it won’t really happen unless at least one of 8 big events happens to turn thing. Arguably, NONE of these things happened (though maybe the Comey letter would count as 6, a surprise revelation about Clinton no one saw coming).

            Also Adams is certainly fallible, even when it comes to Trump. Note how he predicted Trump would win the Iowa caucuses (he didn’t), then suggested the voting was rigged when he didn’t. Hard to give too much credit for making falsifiable predictions when you won’t accept the result if they’re falsified.

            BTW, interested in hearing what it would take for you to stop supporting Trump?

  2. R Richard Schweitzer says:

    “Consensus” of conjectures, no matter on what based, how broad, nor by whom held, is not a substitute for the empirical analysis required for scientific affirmation or refutation

    • Weir says:

      If science teachers could be brought around to understand the scientific way of thinking, that’d be a start.

  3. Nick Rowe says:

    Good post.

    What does “high causal density” mean? (Lots of things affect lots of other things?)

    I think macroeconomists have better data. Most of the time, business cycles are big enough (compared to micro “noise”) that we can usually agree whether or not the economy is in recession, or whether inflation has increased. And we have multiple countries, so can compare different policies over history. They only have one world and one anthro global warming to look at.

    • Rick Hull says:

      See Jim Manzi’s “Uncontrolled” for an in depth look at how causal density can make some problems intractable.

    • Andrew' says:

      I always want to post the time chart of the Fed Funds rate. Maybe they have no effect on the collective delusion of money, but they think they do and they raised rates right through the housing crash.

      Now give lesser people the keys to the climate/economy.

      • Andrew' says:

        I have never gotten anone to comment on the Fed Funds rate vis-a-vis the housing bubble/crash. My streak continues.

        • EMichael says:

          I am not sure whether I have posted my thought in here regarding Fed rates and the bubble, but I will repeat it.

          The Fed rate had absolutely nothing to do with the housing bubble.

          You cannot watch the Fed rate increase by 300% in a year or so while the bubble kept exploding and conclude the Fed rate was a factor at all.

          Similarly, you cannot correlate the low rates of the beginning oughts being the birth of the bubble when we watched zero for years and years not causing a bubble.

          Correlation is not causation, but lack of correlation is a lack of causation.

  4. Philo says:

    “Politicians do not really want to undertake the policies that would be needed to reduce carbon dioxide emissions.” They don’t care about the specific policies; they just love the concomitant increase in political power–their power (and that of like-minded people).

  5. B.B. says:

    “If you need to excommunicate unbelievers, you are dealing in religion, not science.”

    It seems common these days to insult something by comparing it “religion.”

    I look at the history of the 20th century. I look at how Christianity or Buddhism or Judaism treated its critics. Then I look at anti-religious ideologies which claim to be scientific: Marxism, Fascism, Nazism, Freudianism, Social Darwinism, scientific racism. Pardon me for observing this, but religion comes out relatively well. It is those wearing the mask of science who don’t do well.

    When secular progressives attack “heretics” on climate change or Keynesian economics, don’t accuse them of religion.

  6. MNels says:

    I have noticed that within the climate community, the meteorologists tend to be the most skeptical of “macro” model-based consensus. They realize that it is difficult enough forecasting weather patterns beyond a few days due to our chaotic atmosphere, though the models they use are pretty good. They seem to represent the micro economist position.

  7. RohanV says:

    It occurs to me that there are really two types of environmental crises. The first type is fairly narrow in scope, and the proposed remedies are also narrow. The hole in the ozone layer is a good example. The scope was specific, and the ultimate solution to ban CFCs was narrow. And it looks like it has worked. Many efforts to help specific endangered species are similar.

    The second type of crisis is an overarching “the world will end unless we completely change our behavior”. And the proposed solution is quite vast and generally amounts to “produce less of everything”. Here I’m thinking of Malthusian overpopulation, the ice age scare in the 1970s, and now global warming/climate change.

    The track record of the first type is fairly good, and I think I’m generally supportive of these campaigns. But the track record of the second is really terrible. The predictions never pan out, despite the sound and fury raised in the public eye.

  8. nate says:

    I get being skeptical of climate models and their projections about future, though it seems like they should generally be unbiased.

    I also get being skeptical about climate change literally being the end of the world. We’ve heard this story before re: overpopulation etc (the book The Bet by Paul Sabin is a good overview of this). And I think people view the world statically and underestimate humanity/the price system’s ability to adapt to the new constraints we might face.

    And I especially get being skeptical about our/other governments being able to do anything effective to reduce GHG emissions. We’re talking about reducing the rate at which we add emissions, current emissions and whatever else we add will remain for thousands of years.

    But I don’t get people who actively deny climate change is happening. You don’t need to rely on projections of climate models, just look at the arctic sea ice, which is declining rapidly by multiple metrics. Obviously that involves some modeling/guesswork too, but I doubt it’s anything near as complicated as climate projections.

    Would be interested in hearing other thoughts on this.

    • Fielding says:

      So what?

      If, as you say,
      * We can’t model future climate evolution, and
      * We don’t know the long-term impact of any given climate outcome, and
      * We can’t impact it since China/India would overwhelm any US action
      There’s no practical action I could or should take based on “climate change is happening.” So it has no relevance to my life.

      So it’s all grants and virtue signaling signifying nothing.

      BTW, I’m old enough to remember the global cooling scare of the 70s. So it’s hard to get worked up by “global cooling” then “global warming” then “climate change.” Based on future projections in my lifetime we can’t even get the sign of the change right consistently.

      • nate says:

        What kind of an attitude is that? Why are you commenting then? Why even do anything? Someday the earth will fall into the sun and in the meantime humans probably don’t even have free will. There’s a lot of things we do/talk about that have “no practical action”.

        I agree with you that the discussion re: taking action (and most of the actual action) on climate change is mostly virtue signaling signifying nothing. But even if you think the chances humanity and its governments will be able to effectively do anything about climate change is 0, that doesn’t at all mean it’s not real or that it’s a total random guess about how it’ll unfold.

        • Fielding says:

          Hey, you asked for other thoughts.

          Why even do anything? Because there are other things I can do that do have an impact my life. I even half-ass follow things that have no impact on my life, like physics (particle and astro), because I find them interesting. Climate change? Not so much.

          As for whether it’s real, it fails on multiple heuristics:
          (1) Changing storyline (my prior comment)
          (2) Reliance on complex models. Like Arnold, I have experience with working with complex models of the type he mentions in #1 (different industry). I’m equally skeptical of anything that relies on them entirely.
          (3) Lack of intellectual honesty. Many years ago, someone took pictures of one of the temp sites at different points in time and showed that what had been a field was now a parking lot with an AC blowing on the temp system. The response, they took down the addresses of the temp sites. That is not the reaction of someone interested in truth or science.
          (4) Warped incentives. The current incentive structure benefits researchers and policymakers whipping up concern. More grants, more meetings in nice places, more regulations. There’s no benefit in saying ‘this isn’t a problem’ and lots of folks who’s rice bowls would get broken if the funding train slowed.
          (5) Hypocrisy. Al Gore’s house, Decaprio’s boats and planes, the fact that the concerned climate researchers all fly to their tropical meetings instead of videocon. Reynold’s Law. “I’ll start believing it’s a problem when the people who are telling me it’s a problem start acting like it’s a problem”

          So, based on those heuristics I think humanity is at greater risk of a zombie apocalypse than a climate catastrophe. And if we do have one it will be due to changes in solar output, not anything humans are doing.

        • Fielding says:

          Incidentally, “so what” is an incredibly powerful separator. Try it. It’s magic.

      • EMichael says:

        Really, really depressing.

        You people should just take your beliefs and go to this site and research them. Then see if you can find any science that refutes this site.

        But this global cooling nonsense takes the cake.

        “So in fact, the large majority of climate research in the 1970s predicted the Earth would warm as a consequence of CO2. Rather than climate science predicting cooling, the opposite is the case. Most interesting about Peterson’s paper is not the debunking of an already well debunked skeptic argument but a succinct history of climate science over the 20th century, describing how scientists from different fields gradually pieced together their diverse findings into a more unified picture of how climate operates. A must read paper.”

        • Fielding says:

          Read it. Interesting take. Since I wasn’t even 10 yet in the 70s I just remember the Newsweek cover and various news presentations. It was sort of a background scare when compared to imminent global thermonuclear war. Not going to look at the actual paper, not interested in investing the time because…

          Here’s the problem. Due to the demonstrated lack of intellectual honesty of the climate change proponents (my #3 above, behavior of Michael Mann and the East Anglia crowd, etc… not to mention the other heuristics) I’d have to go back to original data and do a ton of research to convince myself there’s a problem. And, consistent with the link you provided, the reality is likely to be uncertain, hedged, and dependent on how you look at it. Not something that justifies billions of dollars in economic intervention or days of my personal free time.

          So when the climate researchers are all so terrified they start holding all conferences via videocon to avoid the CO2 increase, get back to me.

          Until then, in the immortal words of Lord Scrumptious: Too late. Had your chance. Muffed it.

          • EMichael says:

            Did you read it?

            Notice no response backed up by any scientist. And then the absolute bs about the hacked emails, which imbeciles, not to mention every scientific body in the entire world, long ago concluded there was nothing there.


            You need to take the blinkers off.

    • Weir says:

      Arctic sea ice is declining. Antarctic sea ice is increasing.

      Also, even the IPCC acknowledges what it calls “the observed recent warming hiatus, defined as the reduction in GMST trend during 1998-2012 as compared to the trend during 1951-2012″ and that “the observed global-mean surface temperature (GMST) has shown a much smaller increasing linear trend over the past 15 years than over the past 30 to 60 years” and that “the GMST trend over 1998-2012 is estimated to be around one-third to one-half of the trend over 1951-2012.”

      • EMichael says:

        Nice little cherry picked quote.

        Ever give a thought to reading the rest of it?


      • Nate says:

        Weir, re: the IPCC. “So what?”, Fielding would say. The trend is still increasing. My point was that: (1) whether the world is warming, (2) the accuracy of climate models (especially forward looking ones), and (3) whether governments/humanity will be able to reduce greenhouse gas emissions (or whether it’s even a good idea) are all separate things.

        If we’re arguing about (1), your quote doesn’t support your argument (though the ice cap thing does, will have to read more about it).

    • Andrew' says:

      Where are those people?

      Are they the half of Trump voters who are deplorably racist?

      • Fielding says:

        I’m part of the half of Trump voters with 140+ IQs, multiple advanced degrees, decades of experience in multiple industries, and extensive experience operating at the boundary between science and business.

        As for your ad hominem, I don’t care.

        • Andrew' says:

          It was sarcasm ;)

          The point is there are a tiny number of actual racists just like there is a tiny number of people who deny any possibility that humans are impacting our environment.

          To claim that the end result is because of the racists or the tiny fraction of human impact deniers is silly and is purely a persuasion play of painting an entire group with attributes attributed to a very small fraction of them.

          • Fielding says:

            My bad. Sarcasm tuner clearly needs calibrating. Or I need a beer. Or I should embrace the dealing power of and.

          • EMichael says:

            A tiny number of racists?


            No Dem has won the white vote since the Civil Rights Act.

            Think of whom they voted for, and why.

  9. Corey says:

    I think we err if we talk about “Climate Science” as a monolithic thing. There are aspects of the science that are long established, and not just by the current climate cabal. I was a physics major and computing global sea level rise based on changes in ppm of CO2 and blackbody radiation is a basic homework problem. It’s pure math with basic physical laws in equation form. When a “skeptic” says CO2 is “plant food” and tries to shrug off the basic physics of the situation, they are a crank, and we should treat them as such.

    But the political takeover of climate “science” has led to the absorption of many, many unproven axes to grind. There’s almost no evidence (nor consensus) that hurricanes will be stronger, and almost no reliable models showing exactly when and where on earth rainfall / soil productivity / etc., will increase or decrease. A healthy skepticism of the specifics of what global warming will do is warranted, and translates into a veto on many “remedies” floating around.

    This changes things from science to politics. Leftists who want to increase state power rope skeptics of the second type in with the first, and that is the problem.

    I think it’s possible to (as I do) believe the core framework of greenhouse gas emissions and overall warming is real, while believing that we should wait and see what remedies are really required, and the total cost-benefit of each. IE: there is no question that rising CO2 levels are going to change temperatures, but there is not enough evidence to say that reducing those emissions is the right choice, on net, on epochal timescales. We know something is happening but we don’t know enough to force human progress to slow as we further empower corrupt governments to fix it.

    • Fielding says:

      Another physics major here. Don’t forget it’s not just physics. Chemical and biological feedback systems are at play.

      The punchline to my favorite physics joke is: the physicist said, ‘first assume the horse is a perfect sphere.’

      • Corey says:

        I always heard it as “assume a spherical cow”. I think that homework problem actually started with “assume a spherical blackbody of radius xxx meters”.

    • Weir says:

      Just pointing out that CO2 literally is plant food. People pump CO2 into their greenhouses because it works. Saying out loud that it’s plant food isn’t proof that the person saying it is a crank. Even a crank can say something that is literally true.

      And this is another long established aspect of climate science: The Medieval Warm Period. There are people who currently deny its existence, and they can try to hide its existence with some creative jiggery-pokery, but it’s established. It’s settled.

    • Andrew' says:

      I’ll stop calling all the global warming people uniformly hysterical when they stop labeling all of us as science deniers. In other words, never.

      It is so obviously ridiculous to claim that siding with one of the most tenuous of back allies of science makes you pro-science and anybody else is anti-science, but that is where we are and I can’t figure out how to untie that Gordian knot of effective persuasion.

      So, I have no other option but to pick a side and make hay.

  10. Lord says:

    I welcome real information and honest debate, but while this is continuously ongoing in science, that is not what one encounters in politics. The despicable feature here is politicizing the science. Yes, the science is uncertain, the future is uncertain, but that doesn’t mean it can be disregarded and dismissed. Everyone is entitled to an opinion and they are worth what you pay for them. It doesn’t mean anyone’s opinion is the equal of any other. It does mean if you have a different opinion, you have a duty to justify it, to identify why you hold it, and what would make you change it. If you can’t do this, you are just doing what you accuse your opponents of doing, politicizing it because you are uncomfortable with its implications. Skepticism is welcome, but self skepticism even more so. Is your skepticism just telling you what you want to believe or is it leading you to doubt your own position? Skepticism is often the most certain of our beliefs, leading us to discount anything that doesn’t fit our worldview or wishes. People like to hide their beliefs under skepticism to avoid having to defend or face them. They claim it avoid having to change their opinion or what they must do. Are you using uncertainty to avoid action and change or are you using it to advance preparation?

    • Lord says:

      Ed Dolan has a good article on why libertarians should support carbon taxes. The question everyone should ask themselves is what if they are wrong?

      • Fielding says:

        Sorry, that sounds a lot like ‘your skepticism of my argument is due your unwillingness to face the unhappy implications of the fact that you’re wrong’

        …I’m skeptical.

        A skeptical reaction to a weak argument seems reasonable to me.

        • Lord says:

          Then you miss the point. That’s the problem. It isn’t about what fools believe, their opinions or the arguments they make. It isn’t about what they like or prefer, their status, or their taxes. It’s about life on earth.

      • Andrew' says:


        Libertarians invented carbon taxes.

        • Andrew' says:

          I’ll do you one better.

          I’ll make them workable and rational for you. Create an options market based on betting on the CO2 levels.

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