<blockquote>From the Dep’t of Irony: Oxford University Student Union bans free speech magazine because it is ‘offensive’ [<a href="http://www.telegraph.co.uk/education/universityeducation/11904376/Oxford-University-Student-Union-bans-free-speech-magazine-because-it-is-offensive.html" rel="nofollow">link</a>] …
Jacob Williams told VERSA: “There is nothing offensive about healthy debate. To ban us from promoting it on the grounds that people might be offended proves everything the free speech movement has been saying. No offence OUSU, but you just shot yourself in the foot.”</blockquote>
Healthy debate is <i>supposed to be offensive</i>, but those taking offence and behave accordingly in public, are losers automatically. That's what <b>free speech</b> is about.
Comment on Week in review – science edition by Berényi Péter
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Comment on Week in review – energy and policy edition by Stephen Segrest
Per Senator Grassley -- <b>Nuclear Power subsidies</b>: (1) Investment or Production Tax Credit; (2) Catastrophic Insurance (Price Anderson); (3) Caps on construction costs for new projects; (4) Special break on decommissioning cost; (5) DOE Loan Guarantees; (6) U.S. Export/Import Bank; (7) $74 billion in Federal R&D since 1950.
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Comment on The uncertainty of climate sensitivity and its implication for the Paris negotiations by davideisenstadt
If our knowledge of ECS and TCR have grown by “many orders of magnitude” (that means at least three, implying a growth in our level of knowledge by a factor of at least 1000), dont you think that we would have been able to narrow our uncertainty regarding the actual value of those two phenomena just a tiny bit from our earliest estimates?
That we haven’t calls your assertion into question.
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Comment on The uncertainty of climate sensitivity and its implication for the Paris negotiations by -1=e^iπ
“Why? Surely the long term real interest rates over the past 300 years should be a good reality check on what to expect for the next 300 years.”
Why would it? Would the average birth rates over the past 300 years be a good prediction for the birth rates over the next 300 years?
Or maybe there is a general downward trend.
If population growth rates are expected to decrease, real GDP per capita growth is expected to decrease and life expectancy is expected to increase (although this isn’t in Nordhaus’ model) then those are all reasons to expect a decreasing interest rate over time.
“I believe these is far too low for making policy decisions on what is clearly an extremely high risk investment with enormous consequences”
Not mitigating has risks. Mitigation has risks. But these risks are quite different in nature than the risk that, say, a person who was lent money defaults on their debt. Uncertainty does need to be taken into account, but adding an arbitrary risk premium does not do this.
Also, as was pointed out in the Arrow et al. paper, uncertainty in the future can cause the certainty equivalent discount rate to decrease over time.
“Why? That’s a statement of your belief.”
Values are roughly 5% initially (which is roughly the current long term real interest rate) and decreases gradually over time (which is to be expected).
“It’s the same as if an engineer or geologist or brain surgeon uses their specialist terms while talking to a lay audience. Even if you tried here it would be no help. It’s too much.”
Out of curiosity, what is your background?
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Comment on The uncertainty of climate sensitivity and its implication for the Paris negotiations by -1=e^iπ
“Here are two reports on the Equity Risk Premium for Australia”
That’s not really that relevant to the discussion since there is no reason to add a risk premium to the IAM.
“CO2 pricing is high risk because it has negligible probability of succeeding.”
How is it a risk if countries can take the position that they will only perform mitigation if all countries make an agreement?
“A higher risk premium would be required for investments in GHG abatement”
The risk is of a different nature than the risk of someone defaulting on a loan.
I think you are sort of falling into the same trap as many alarmists. Many alarmists will try to use an unnecessarily low discount rate in the name of risk aversion just to be ‘on the safe side’. You are sort of doing the same thing but in the other direction. Fiddling with the discount rate is not the best way to be risk averse. If you want to be risk averse, choose a coefficient of relative risk aversion and then take into account all sources of uncertainty when maximizing expected social welfare.
…I doubt this conversation will be able to make much more progress since you probably don’t know what I mean by expected social welfare. Maybe you should wait for me to make a guest blog. But I’ll summarize the key points I’m trying to make (though I doubt you will agree with them yet):
– You want to use a the rate of social time preference rather than the real interest rate when trying to maximize social welfare, since your social welfare function considers inequality and the economy is growing.
– Adding an arbitrary risk premium to the discount rate is not the appropriate way to take into account uncertainty in this kind of analysis.
– Interest rates are expected to decline gradually over the next century since real GDP per capita growth is expected to decline and population growth rates are expected to decline.
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Comment on The uncertainty of climate sensitivity and its implication for the Paris negotiations by Peter Lang
-1=e^
“Why? Surely the long term real interest rates over the past 300 years should be a good reality check on what to expect for the next 300 years.”
Why would it? Would the average birth rates over the past 300 years be a good prediction for the birth rates over the next 300 years?
Or maybe there is a general downward trend.
If that’s the best you can do to answer my question and support your beliefs I am now convinced you have no answer.
You are believing you can look into your crystal ball and choose the future discount rate better than by looking at the what’s happened in the past. Well, sorry, but that is not persuasive.
A better analogy you could have used is investment advisors who reckon they pick the future better than simply using historical data as the best guide. However, evidence shows that 2/3 of investment gurus perform worse than the market over the long term.
Therefore, if your conviction about future discount rates is unsupported by the long term historical rates, then I do not accept your beliefs.
I’ve pretty well given up on this discussion. I am not persuaded by your statements of what you believe. It’s going nowhere. I am going to bed. If you can’t answer my questions I may not respond any further.
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Comment on The uncertainty of climate sensitivity and its implication for the Paris negotiations by Peter Lang
Lots of unsupported assertions. Discount rate is WACC and risk premium above long term interest rates is one of the inputs.
This is going nowhere. It’s a waste of time.
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Comment on The uncertainty of climate sensitivity and its implication for the Paris negotiations by Peter Lang
I’ll leave this on a more positive note. I thank you for your many comments and apologise for getting frustrated. I assume you are an economist and understand the terms you are using. I understand you accept that the estimated discount rate Nordhaus uses for the next 300 years is about right. I am not persuaded. I don’t believe it is close to being valid for making policy decisions for best assignment of scarce resources.
So, lets set this aside.
Can you tell me if you have reviewed the posts I wrote and especially can you say if you have found any significant error in the red line on the chart here or in the way I’ve plotted all lines (i.e. by period instead of cumulative out to 2300 as is the commonly done to support the carbon pricing arguments. If you have found significant errors can you please explain them clearly for a non economist.
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Comment on Week in review – energy and policy edition by bedeverethewise
Maybe you should say yet to be invented non-fossil-based technology would be the only way around it.
When faced with a need for new non-fossil-based technology, some people get in the lab and start inventing. Other people pass laws that that require someone else to invent something that doesn’t yet exist. Sometimes they set up tax schemes where billions of dollars trickle through their fingers as they control who gets what.
I think the inventors are the most important ones, but I’m biased, I work in pharmaceuticals, inventing new medicines. And I interact with people who work on new energy technology (fracking, nat gas, wind turbines, EV batteries, fuel cells, etc.). My opinion is the government entities that try to control what we do generally slow us down, not speed us up.
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Comment on Week in review – energy and policy edition by rhhardin
Homes and businesses should be heated by laptops working on math problems. There’s no excuse for resistance heating. Use the energy for something before turning it into heat.
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Comment on Week in review – science edition by JCH
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Comment on Week in review – science edition by JCH
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Comment on Conflicts of interest in climate science. Part II by dougbadgero
Regarding the finding with respect to students, how can we be surprised. Society has taught them to distrust all flows of money to anything. Maybe they should learn some critical thinking skills. No source of funding can ever prove, or disprove, anything.
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Comment on Conflicts of interest in climate science. Part II by JCH
You do not know anything has been captured. Check your throat for a hook, line, and sinker.
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Comment on A perspective on uncertainty and climate science by Steven Mosher
No Karl’s Most recent work ACTUALLY COOLS the Long term trend.
it raises thr trend during the pause, but the LONGEST TREND is cooled.
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Comment on Week in review – science edition by Vaughan Pratt
<i>E=mc² is an equivalence law not a conservation law.</i>
You missed the (well-known) point. E=mc² required conservation of energy to be restated as conservation of energy plus mass, with the factor of c² giving the scaling needed to convert from kilograms.
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Comment on Conflicts of interest in climate science. Part II by beththeserf
Test
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Comment on Conflicts of interest in climate science. Part II by beththeserf
Ubiquitous arrows and one – way streets,
high way, low way, mis-nomered freeway,
‘go right,’ ‘go left,’ ‘look up,’ ‘look down,.’
and when I come to a fork in the road,
may I, like Frost, take the road less traveled,
would I dare, and could I dare,
when the arrow says ‘no?’ And
would we, like lemmings take the leap
off the cliff – if the arrow says ‘go?’ And
shall we all, at that last great summons
that makes us rather bear those ills we have
than fly to others that we know not of,
standing before the elevators dark portal,
obey the requirement to step in,
go up
… or go down.
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Comment on Conflicts of interest in climate science. Part II by rhhardin
The chapter “Administrative Encirclement” in John Gall’s _Systemantics_ is an amusing and telling tale of what happens to the research department in any institution.
There are many updates to the original book but no doubt the chapter remains.
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Comment on Conflicts of interest in climate science. Part II by magmacc
Or maybe it’s the generally poor quality of research carried out by contrarians (the ones that even try, that is) that puts funding agencies and reviewers off, assuming that the claims of Dr. Curry’s anonymous Scientist X are both truthful and being relayed accurately. Call me a skeptic on those last points.
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