Thursday, July 30, 2009

Bad bets

TPS Clevelander Rob Holub sends along this link, asking conservative anti-global warming folk to put their money where their mouth is. The way I see it is as follows: Anti-global warming supports like to bring up sporadic examples of unexpectedly cool weather and then put forth the conclusion that all of this global warming nonsense is hogwash. The author of the blog post linked above says that those folks are remembering what they want to remember-- thus the bet. If you look at the whole picture, things may not support your position.

For what it's worth, I don't think the question is as much about whether the Earth's temperature is rising as much as whether it's humans that are causing that rise, or any further warming on top of the nature cycle of the Earth. As such, the bet shouldn't be a comparison of current temperatures to historical levels, but a comparison to a trendline estimate of where the Earth is naturally heading anyway. I guess it's not too surprising that no one has taken the bet.

It brings up the larger question: Should one be willing to put up money to lend credence to their positions? MR dealt with the issue a little while back, though I don't know how long ago and can't find the link. I could be convinced either way, though I suppose a staunch conviction in your theory could be offset by an even more staunch adherence to risk aversion.


Justin M Ross said...

If you recall, The Climate Bet:

I would take Rob's point one step further (as I did in the above post). Not only is it silly to say "jeez it is cold out today, what about global warming" it is probably not helpful to think about a global mean temperature, which gw skeptics love to cite in their favor.

My concern primarily revolves around which is the best path to pursue? If we accept that at t+n we will have to face environmental costs, is it better to maximize economic growth to better pay those costs in the future, or to try and face smaller costs in the preceding periods? I can accept either strategy, but I am not as confident that the latter strategy would succeed in the political process over n periods. Are politicians beter at trading long term costs for short term ones, or at making policies that encourage growth? Both are admittedly difficult, but I think the latter is more likely to succeed.

I also would like to point out, that there is more to the environment than sea levels and weather. In many countries they have very immediate, undoubtedly true costs (as opposed to probabilistic ones). We take for granted that we have an environment where the water will not kill us, but that is not true for a lot of places that could use some economic growth.

Justin M Ross said...

P.S. I am all about betting on ideas. Both sides of the GW debate would gain a lot of respect from me if they use their personal portfolios to speculate on future prices.