If only it were rocket science

Posted April 23rd, 2008 by Sylvia S Tognetti and filed in Epistemological therapy

Krugman recalls some of the pitfalls of crossing disciplinary boundaries in the Limits to Growth debates that took place in the 1970s, when its author, Jay Forrester, decided to try his hand at economics. The result earned a scathing review from William Nordhaus, for whom Krugman worked as an assistant at the time. He gives an important rule of thumb:

The general rule to remember is that if some discipline seems less developed than your own, it’s probably not because the researchers aren’t as smart as you are, it’s because the subject is harder.)

Kudos to Krugman, and also to Environmental Economics for recognizing that this can go both ways, and that “economists do the same thing to sociologists and political scientists” or “x-ologists.” In fact, Nordhaus himself is among the better known culprits, as discussed in the classic paper by Funtowicz and Ravetz, The worth of a songbird (pdf), revisited by Paul Baer here on PNT in The worth of an ice sheet , with further comments from Jerry here. (Nordhaus’ role in climate science also surfaces in this paper by Naomi Oreskes et al about which I have another post in progress, but in the meantime, see what the Rabett  has to say.]  Long time readers of this blog who have been following the discourse on post-normal science can skip the rest but, a few highlights worth reiterating for everyone else:

F&R made the case that predictions made by Nordhaus in 1991 regarding the costs and benefits of climate change are based on arbitrary guestimates with extremely high uncertainty, e.g., his estimated impact of climate change on farms ranges from -10.6 to +9.7, billion $. This is acknowledged with caveats in the paper, e.g., “we now move from the terra infirma of climate change to the terra incognita of the social and economic impacts of climate change.” However, it is not reflected in his conclusion that “climate change is likely to produce a combination of gains and losses with no strong presumption of substantial net economic damage.” You would think that since the 1990s, knowledge might have progressed. But as Paul Baer points out, even the degree of risk implied by the “flaming arrows” diagram in the Stern report, which suggest that there is little to worry about until the average temperature rises by around 3 degrees C, can be traced back to a survey of Expert Opinion on Climate Change done by Nordhaus in 1994 in which “unsurprisingly, the estimated damage consequences of various temperature scenarios were significantly skewed between economists and natural scientists, as discussed in the original and in Roughgarden, T. and S. H. Schneider (1999).” As Paul also explained:

the specific risks implied by the “flaming arrows” are nowhere quantified directly. Instead, there is a single number calculated for “catastrophic impacts,” based on a probability distribution for the temperature threshold at which the risk begins, and for the “value” (in terms of lost GNP) if the catastrophe occurs. The parameters of this “damage function” are in turn based on an expert survey done by William Nordhaus in 1994. According to Stern (p. 153), “When global mean temperature rises to high levels (an average of 5°C above pre-industrial levels), the chance of large losses in regional GDP in the range of 5 – 20% begins to appear. This chance increases by an average of 10% per ºC rise in global mean temperature beyond 5°C.”

Among his main concluding points:

“catastrophic damage function” doesn’t adequately capture all the reasonable interpretations of the likelihood and value of melting the Greenland ice sheet, to say nothing of other potential “catastrophes.” Thus, it follows that the upper bound on damages for any different stabilization level has not been established. This alone should be enough to conclude that the economic justification for the lower-bound of 450 ppm CO2-e stabilization can’t be robust.

Lest anyone dismiss this as a rant against economics – it is not. I have no problem with economists who recognize the limits of their methodologies, and are clear about this in their conclusions. There are some. To be fair, I’ll end this with a quote from Gregory Bateson, who sees the same pitfall in the entire relationship between science and society:

“I have been playing recently with the idea that the position of the scientific community vis-à-vis nature is comparable to the position of one complex culture in contact with another. In such a culture contact there are various tendencies towards oversimplification. The themes of the other culture which are actually complex patterns tend to be reified, and, especially the modes of interaction tend to become quantitative (money, trade, etc.)”

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