The Linear And The Exponential  

John Quiggin has a post on the dwindling bands of climate "delusionists" and their "Radical scepticism".

For a long time, I’ve used the term “delusionist” rather than “sceptic” to describe those who reject mainstream science on global warming. In general, the term “sceptic” is inappropriate for the vast majority of this group, since their position is hardly ever based on a willingness to look sceptically at evidence without reliance on a preconceived views. The gullibility with which so many delusionists parrot the latest talking points (”Hockey stick broken!”, “Global warming on Mars”, Warming stopped in 1998″ and so on) is clearly incompatible with any kind of scepticism. And, given the volume of evidence that has accumulated on the issue, only an adherent of some very strong form of scepticism could reasonably remain undecided. Such a sceptic has now appeared in the form of Adam Shand, a Channel 9 journalist who said, in a recent Sunday program on global warming “it’s only an assumption” that summer is warmer than winter. I imagine he gets great prices on ski holidays, by going in January!

Of course, once you’ve gone this far in scepticism, why not go the whole hog? Radical scepticism provides the perfect argument for rejecting action to mitigate global warming - if we have no reason to believe in the existence of the external world, then trashing it can’t be a problem, can it?

One skeptic of sorts is Freeman Dyson, though he makes more sophisticated arguments around the cost and methods of mitigation than the average anti-global warming loon ranting about broken hockey sticks.

Freeman had an interesting review of a pair of books about climate change (Nordhaus' "A Question of Balance: Weighing the Options on Global Warming Policies" and Zedillo's Global Warming: Looking Beyond Kyoto) recently in The New York Review Of Books - The Question of Global Warming. Its is a long article worth reading in its entirety.

I begin this review with a prologue, describing the measurements that transformed global warming from a vague theoretical speculation into a precise observational science.

There is a famous graph showing the fraction of carbon dioxide in the atmosphere as it varies month by month and year by year (see the graph). It gives us our firmest and most accurate evidence of effects of human activities on our global environment. The graph is generally known as the Keeling graph because it summarizes the lifework of Charles David Keeling, a professor at the Scripps Institution of Oceanography in La Jolla, California. Keeling measured the carbon dioxide abundance in the atmosphere for forty-seven years, from 1958 until his death in 2005. He designed and built the instruments that made accurate measurements possible. He began making his measurements near the summit of the dormant volcano Mauna Loa on the big island of Hawaii.

He chose this place for his observatory because the ambient air is far from any continent and is uncontaminated by local human activities or vegetation. The measurements have continued after Keeling's death, and show an unbroken record of rising carbon dioxide abundance extending over fifty years. The graph has two obvious and conspicuous features. First, a steady increase of carbon dioxide with time, beginning at 315 parts per million in 1958 and reaching 385 parts per million in 2008. Second, a regular wiggle showing a yearly cycle of growth and decline of carbon dioxide levels. The maximum happens each year in the Northern Hemisphere spring, the minimum in the Northern Hemisphere fall. The difference between maximum and minimum each year is about six parts per million. ...

When we put together the evidence from the wiggles and the distribution of vegetation over the earth, it turns out that about 8 percent of the carbon dioxide in the atmosphere is absorbed by vegetation and returned to the atmosphere every year. This means that the average lifetime of a molecule of carbon dioxide in the atmosphere, before it is captured by vegetation and afterward released, is about twelve years. This fact, that the exchange of carbon between atmosphere and vegetation is rapid, is of fundamental importance to the long-range future of global warming, as will become clear in what follows. Neither of the books under review mentions it. ...

Nordhaus's book is not for the casual reader. It is full of graphs and tables of numbers, with an occasional equation to show how the numbers are related. The graphs and tables show how the world economy reacts to the various policy options. To understand these graphs and tables, readers should be familiar with financial statements and compound interest, but they do not need to be experts in economic theory. Anyone who knows enough mathematics to balance a checkbook or complete an income tax return should be able to understand the numbers.

For the benefit of those who are mathematically illiterate or uninterested in numerical details, Nordhaus has put a nonmathematical chapter at the beginning with the title "Summary for the Concerned Citizen." This first chapter contains an admirably clear summary of his results and their practical consequences, digested so as to be read by busy politicians and ordinary people who may vote the politicians into office. He believes that the most important concern of any policy that aims to address climate change should be how to set the most efficient "carbon price," which he defines as "the market price or penalty that would be paid by those who use fossil fuels and thereby generate CO2 emissions." He writes:

Whether someone is serious about tackling the global-warming problem can be readily gauged by listening to what he or she says about the carbon price. Suppose you hear a public figure who speaks eloquently of the perils of global warming and proposes that the nation should move urgently to slow climate change. Suppose that person proposes regulating the fuel efficiency of cars, or requiring high-efficiency lightbulbs, or subsidizing ethanol, or providing research support for solar power—but nowhere does the proposal raise the price of carbon. You should conclude that the proposal is not really serious and does not recognize the central economic message about how to slow climate change. To a first approximation, raising the price of carbon is a necessary and sufficient step for tackling global warming. The rest is at best rhetoric and may actually be harmful in inducing economic inefficiencies.

If this chapter were widely read, the public understanding of global warming and possible responses to it would be greatly improved. ...

Nordhaus examines five kinds of global-warming policy, with many runs of DICE for each kind. The first kind is business-as-usual, with no restriction of carbon dioxide emissions—in which case, he estimates damages to the environment amounting to some $23 trillion in current dollars by the year 2100. The second kind is the "optimal policy," judged by Nordhaus to be the most cost-effective, with a worldwide tax on carbon emissions adjusted each year to give the maximum aggregate economic gain as calculated by DICE. The third kind is the Kyoto Protocol, in operation since 2005 with 175 participating countries, imposing fixed limits to the emissions of economically developed countries only. Nordhaus tests various versions of the Kyoto Protocol, with or without the participation of the United States.

The fourth kind of policy is labeled "ambitious" proposals, with two versions which Nordhaus calls "Stern" and "Gore." "Stern" is the policy advocated by Sir Nicholas Stern in the Stern Review, an economic analysis of global-warming policy sponsored by the British government.[*] "Stern" imposes draconian limits on emissions, similar to the Kyoto limits but much stronger. "Gore" is a policy advocated by Al Gore, with emissions reduced drastically but gradually, the reductions reaching 90 percent of current levels before the year 2050. The fifth and last kind is called "low-cost backstop," a policy based on a hypothetical low-cost technology for removing carbon dioxide from the atmosphere, or for producing energy without carbon dioxide emission, assuming that such a technology will become available at some specified future date. According to Nordhaus, this technology might include "low-cost solar power, geothermal energy, some nonintrusive climatic engineering, or genetically engineered carbon-eating trees." ...

The main deficiency of Nordhaus's book is that he does not discuss the details of the "low-cost backstop" that might provide a climate policy vastly more profitable than his optimum policy. He avoids this subject because he is an economist and not a scientist. He does not wish to question the pronouncements of the Intergovernmental Panel on Climate Change, a group of hundreds of scientists officially appointed by the United Nations to give scientific advice to governments. The Intergovernmental Panel considers the science of climate change to be settled, and does not believe in low-cost backstops. Concerning the possible candidates for a low-cost backstop technology he mentions in the sentence I previously quoted—for example, "low-cost solar power"—Nordhaus has little to say. He writes that "no such technology presently exists, and we can only speculate on it." The "low-cost backstop" policy is displayed in his tables as an abstract possibility without any details. It is nowhere emphasized as a practical solution to the problem of climate change.

At this point I return to the Keeling graph, which demonstrates the strong coupling between atmosphere and plants. The wiggles in the graph show us that every carbon dioxide molecule in the atmosphere is incorporated in a plant within a time of the order of twelve years. Therefore, if we can control what the plants do with the carbon, the fate of the carbon in the atmosphere is in our hands. That is what Nordhaus meant when he mentioned "genetically engineered carbon-eating trees" as a low-cost backstop to global warming. The science and technology of genetic engineering are not yet ripe for large-scale use. We do not understand the language of the genome well enough to read and write it fluently. But the science is advancing rapidly, and the technology of reading and writing genomes is advancing even more rapidly. I consider it likely that we shall have "genetically engineered carbon-eating trees" within twenty years, and almost certainly within fifty years.

Carbon-eating trees could convert most of the carbon that they absorb from the atmosphere into some chemically stable form and bury it underground. Or they could convert the carbon into liquid fuels and other useful chemicals. Biotechnology is enormously powerful, capable of burying or transforming any molecule of carbon dioxide that comes into its grasp. Keeling's wiggles prove that a big fraction of the carbon dioxide in the atmosphere comes within the grasp of biotechnology every decade. If one quarter of the world's forests were replanted with carbon-eating varieties of the same species, the forests would be preserved as ecological resources and as habitats for wildlife, and the carbon dioxide in the atmosphere would be reduced by half in about fifty years.

It is likely that biotechnology will dominate our lives and our economic activities during the second half of the twenty-first century, just as computer technology dominated our lives and our economy during the second half of the twentieth. Biotechnology could be a great equalizer, spreading wealth over the world wherever there is land and air and water and sunlight. This has nothing to do with the misguided efforts that are now being made to reduce carbon emissions by growing corn and converting it into ethanol fuel. The ethanol program fails to reduce emissions and incidentally hurts poor people all over the world by raising the price of food. After we have mastered biotechnology, the rules of the climate game will be radically changed. In a world economy based on biotechnology, some low-cost and environmentally benign backstop to carbon emissions is likely to become a reality.

Kevin Kelly has a review of Dyson's review up at The Long Now Foundation, looking at how exponential change can alter the "is it cheaper/better to take action now or later" question - Where the Linear Crosses the Exponential. Again, its worth reading the whole piece.

Dyson has penned the best description of the new global religion, an emergent religion few others have noticed. I think he is 100% correct about this:

There is a worldwide secular religion which we may call environmentalism, holding that we are stewards of the earth, that despoiling the planet with waste products of our luxurious living is a sin, and that the path of righteousness is to live as frugally as possible. The ethics of environmentalism are being taught to children in kindergartens, schools, and colleges all over the world. Environmentalism has replaced socialism as the leading secular religion. And the ethics of environmentalism are fundamentally sound. Scientists and economists can agree with Buddhist monks and Christian activists that ruthless destruction of natural habitats is evil and careful preservation of birds and butterflies is good. The worldwide community of environmentalists—most of whom are not scientists—holds the moral high ground, and is guiding human societies toward a hopeful future. Environmentalism, as a religion of hope and respect for nature, is here to stay. This is a religion that we can all share, whether or not we believe that global warming is harmful.

Most importantly, and the reason why his essay is noteworthy for long term thinking, Dyson explains in brilliant clarity one of the key riddles for generational thinking: how much of a “penalty” today should this generation pay in order to ensure prosperity in the future? Here’s Dyson on the riddle:

If we can save M dollars of damage caused by climate change in the year 2110 by spending one dollar on reducing emissions in the year 2010, how large must M be to make the spending worthwhile? Or, as economists might put it, how much can future losses from climate change be diminished or “discounted” by money invested in reducing emissions now?

This is called the “future discount.” Any long-term project must confront this calculation.

The conventional answer given by economists to this question is to say that M must be larger than the expected return in 2110 if the 2010 dollar were invested in the world economy for a hundred years at an average rate of compound interest. For example, the value of one dollar invested at an average interest rate of 4 percent for a period of one hundred years would be 54 dollars; this would be the future value of one dollar in one hundred years’ time. Therefore, for every dollar spent now on a particular strategy to fight global warming, the investment must reduce the damage caused by warming by an amount that exceeds 54 dollars in one hundred years’ time to accrue a positive economic benefit to society. If a strategy of a tax on carbon emissions results in a return of only 44 dollars per dollar invested, the benefits of adopting the strategy will be outweighed by the costs of paying for it. But if the strategy produces a return of 64 dollars per dollar invested, the advantages are clear. The question then is how well different strategies of dealing with global warming succeed in producing long-term benefits that outweigh their present costs.

The choice of discount rate for the future is the most important decision for anyone making long-range plans. The discount rate is the assumed annual percentage loss in present value of a future dollar as it moves further into the future.

...

There are a number of ways to recast the same quandary. Is it okay to burn a lot of coal right now if it will lift millions out of poverty today, instead of burning less coal now and postponing poverty alleviation for later? Will prosperity/pollution today deliver more to future generations or will environmental health/poverty today deliver more? If you were to be born of a future generation, what would you want? To be born into poverty or to be born into a clean world?

Shouldn’t we pass on both, prosperity and health? Sure, that is the goal. But what Dyson’s explanation of the future discount makes clear, there will always be a tradeoff. Almost by definition we cannot absolutely satisfy both the present generation and future generations. The needs of each — present and future — may overlap but they don’t coincide.

There is a very definite time preference for individuals. Almost without exception a person would prefer to have $1,000 today rather than $1,000 in fifty years from now. But if you make the choice between $1,000 today and $30,000 fifty years from now, the two vie for preference. That difference between those two amounts — present and future — drives what we call interest — the amount of money someone will pay to have something now. Some people will pay too much for current rewards, and may get stuck in a position of never being able to pay off their interest. So the rate of interest and the discount rate for the future need to be set wisely.

Societies also seem to have a time preference. All things being equal they would like to have prosperity now rather than later. How much are they willing to pay to have their reward now? Would they pay the price of dirty air, and climate change, and long-term debt in order to gain prosperity right now? They may, and they may also be willing to pay too much. The “interest” rate for immediate prosperity might be something that no future generation could every repay.

Furthermore, the push of technology accentuates the weirdness of the future discount. In some projects delay vastly increases the cost in the future. Waiting to maintain infrastructure such as roads and bridges means it requires ever more money to upgrade them as decay breeds decay. Neglect can be self-accelerating so it becomes almost impossibly expensive to repair what is seriously neglected. On the other hand, take Moore’s Law. If computers are half as cheap and twice as fast every year into the future, then it makes sense to delay some very computational challenges. Many biologists suggested it made the most economical sense to delay sequencing the human genome. You could wait a few years for the technology to evolve and then once it was cheap it would overtake the quick start as the efficiency and speed doubled each year. Thus it would be cheaper and faster to wait.

All extropic systems — economy, nature and technology — are governed by self-accelerating feedback cycles. Like compounding interest, or virtuous circles, they are powered by increasing returns. Success breeds success. There is a long tail of incremental build up and then as they keep doubling every cycle, they explode out of invisibility into significance. Extropic systems can also collapse in the same self-accelerating way, one subtraction triggering many other subtractions, so in a vicious cycle the whole system implodes. Our view of the future is warped and blinded by these exponential curves.

But while progress runs on exponential curves, our individual lives proceed in a linear fashion. We live day by day by day. While we might think time flies as we age, it really trickles out steadily. Today will always be more valuable than some day in the future, in large part because we have no guarantee we’ll get that extra day. Ditto for civilizations. In linear time, the future is a loss. But because human minds and societies can improve things over time, and compound that improvement in virtuous circles, the future in this dimension is a gain. Therefore long-term thinking entails the confluence of the linear and the exponential. The linear march of our time intersects the cascading rise and fall of numerous self-amplifying exponential forces. Generations, too, proceed in a linear sequence. They advance steadily one after another while pushed by the compounding cycles of exponential change.

Balancing that point where the linear crosses the exponential is what long-term thinking should be about. For each generation and for each issue that equation of intersection will be different. Sometimes the immediate needs of the now will dominate, and the discount rate will favor the present. For example, the chronic use of childhood vaccines and antibiotics may prove to have long-term downsides, but their value to present generations is so great that we agree to send the cost to the future. Descending generations will have to pay the price — or to solve the problem by inventing better medicines using exponentially better knowledge and resources. Other times future generations will be so enhanced by the later exponential growth begun in a small immediate gain that we raise the discount rate. For example the yield in educating girls in any society is so great, so amplified and compounded in so many ways, over so many generations, that it is worth an awful lot to pay its costs now — even stiff costs in the face of cultural resistance and low immediate yields. Here the cost point is shifted to the present.

A timeline of where we expect these cost/benefit/risk-thresholds to fall in each sector of our civilization, or a field map of places we can see where our linear lives cross exponential change — either would be very handy to have.