You Ought to Have A Look: Examples of Real-world Realities vs. Naïve Thinking

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger. While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best in recent days, along with our color commentary.

In his article “Hot Stuff, Cold Logic” from the January/February 2015 issue of The American Interest, University of Sussex professor of economics Richard Tol takes us through the logical fallacies used to support arguments for aggressive regulation of greenhouse gas emissions from fossil fuel use in the name of mitigating climate change. These range from “if there is a human impact, it must be regulated,” to “future catastrophe awaits.” Tol effectively debunks these claims with historical examples.

Here is a taste:

Just as there is no logical or scientific basis for thinking that climate change is new, there is no self-evident reason to assume that the climate of the past is “better” than the climate of the future. With just as little logic, we might assume that women’s rights, health care, or education were necessarily better in the past. Any such judgment also contradicts Hume’s Law and, perhaps worse, is grounded in a fallacious appeal to nature understood in a very slanted wy. There is no prima facie reason to assume that any given past climate was better than the prospective one. The climate of the 21st century may well be unprecedented in the history of human civilization; the number of people living in countries with free and fair elections is unprecedented, too. So what? “Unprecedented” is not a synonym for “bad.”

Scientist/political scientist Roger Pielke Jr. recently announced that Tol’s article topped his list of the Top 5 Climate Essays of 2014. If Tol’s name seems familiar, recall that back in 2013 he made headlines by withdrawing from the United Nation’s Intergovernmental Panel on Climate Change (IPCC), deriding their irrational negativity. Tol frequently points out (and does so in this essay), that the costs incurred by moderate climate change are equivalent to (or perhaps even less than) the costs associated with trying to mitigate it—a point of view that the IPCC and many others do not want to admit.

While we may not agree with everything in Tol’s most recent analysis, there is a lot of good stuff in the article and you ought to have a look to see why he believes that “politically correct climate change orthodoxy has completely destroyed our ability to think rationally about the environment.”

Along the same lines—that overly simplistic logic leads to incorrect conclusions—is a piece by Georgetown University’s Arik Levinson for the National Bureau of Economic Research. In his study “How Much Energy Do Building Energy Codes Really Save? Evidence from California,” Levinson describes the results of his look into the effect of efficiency standards on residential energy usage.

His findings may be surprising to some. 

Levinson starts by citing the experts:

New building codes will reduce the energy “used in typical buildings by at least 80 percent.”

          - California Energy Commission, 1979. 

 

“New houses in California now use one-fourth of the energy they used 25 years ago.”

          - Tom Friedman in the NY Times, April 13, 2014

He ends with his (quite different) conclusions:

[T]here is very little evidence that homes constructed since California instituted its building energy codes are using less electricity today.

The reason the predictions are overly enthusiastic is that real-world human behavior is much more complex than rather simplistic model assumptions of “everything else being equal.”

Levinson explains the difficulties involved:

It seems like a straightforward empirical question: How much energy has been saved by state and local regulations that require newly constructed homes to meet energy-efficiency building standards? When the codes were first enacted, regulators projected enormous savings—like the 80 percent reductions promised for California’s nation-leading late-1970s building codes. Today, advocates of tightening those standards claim that those initial promises have been realized.

But answering that question requires knowing how much energy would have been used in the absence of the building codes, a far more difficult calculation than is sometimes suggested. We cannot just take engineers’ ex ante estimates of how much less energy a given building will use, because that ignores the ex post response by the building’s occupants. We cannot simply compare energy use by residents of efficient and inefficient buildings because that ignores the selection by people into those buildings in the first place. We cannot easily compare jurisdictions with more and less strict energy-efficient building codes because those jurisdictions presumably chose to enact the codes based on the energy-using characteristics of their residents. These problems—the selection of occupants into efficient homes, the behavioral response to having an efficient home, and the endogeneity of the policies—represent some most difficult problems in empirical microeconomics.

Levinson’s article is a good example of how naïve—but logical sounding—expectations not only can be grossly wrong, but worse, are used to drive policy goals.

Levinson warns:

We should be concerned that a large fraction of our national climate strategy rests on the types of policies that have not delivered on past promises.

Not only is this true of the climate strategy, but also for the justifications for climate policies in the first place.