# Sic Gloria in Transit on Monday

Has it really been so long since there was a post here on the Mule? It would appear so and my only excuse is that I have been busy (isn’t everyone?). Even now, I have not pulled together a post myself but am once again leaning on the contributions of regular author, James Glover.

From pictures of the transit of Mercury you might think that Mercury is really close to the Sun and that is why it is so hot that lead is molten! In actual fact Mercury is about 0.4 Astronomical Units (AUs) from the Sun (Earth is about 1AU) and only receives about a 7 fold increase in sunlight intensity. So it is hot but not that hot. Mercury is about 40 solar diameters from the Sun. If the Sun were a golf ball then Mercury would be about 6 feet away and the Earth about 15 feet away. On Mercury the Sun subtends an arc of 1.4 degrees compared to 0.6 degrees on Earth.

Pictures of the Moon in front of the Earth seem to have the same effect, to me at least, of making it look much closer than it is, whereas in reality the Moon is about 30 Earth diameters away. Roughly the same “size of larger body to distance of smaller one” ratio as Mercury is from the Sun.

This optical effect (modesty prevents me from giving it a name) seems to occur when photographing one astronomical body over another. It can’t be that we are using the relative sizes as a proxy for distance since Mercury/Sun is very small and Moon/Earth is relatively large. Lacking other visual clues, that a terrestrial photograph might provide, my guess is that we use the diameter of the larger body as a proxy for the distance from the smaller one. Mentally substituting  “distance across” for “distance from”. Or maybe it’s just me?

One possible explanation is that there is insufficient information in a 2D photo like this to determine the distance between the objects. But if asked “how far do you think the one in front is from the one behind?” rather than say “I can’t tell”, you choose one of the two pieces of metric information available, or some function of them, such as the average. Perhaps the brain is hardwired to always find an answer, even a wrong one, rather than admit “I don’t know”, “I have no answer” or “I have insufficient information to answer that question, Captain”. That would explain a lot of religion and politics.

# Direct Action

It has been a very long time since there has been a post here on the Stubborn Mule. Even now, I have not started writing again myself but have the benefit of a return of regular guest poster, James Glover.

This is a post to explain the Australian Government’s policy called “Direct Action”. I will spare you the usual political diatribe. So here is how it works. The government has \$3bn to spend on reducing carbon emissions. At a nominal cost of \$15/tonne that could be 200m tonnes of Carbon.

Okay so how does it work? The government conducts a “reverse auction” in which bidders say: “I can reduce carbon emissions by X tonnes at a cost of \$Y per tonne”. You work out what is the biggest reduction for the least cost. You apportion that \$3bn based on the highest amount of carbon reduction. Easy peasy. That \$3bn comes from government spending so ultimately from taxpayers. [Editor’s note: while not directly relevant to the direct action versus trading scheme/tax discussion, I would argue in true Modern Monetary Theory style that the Australian government is not subject to a budget constraint, beyond a self-imposed political one, and funding does not come from tax payers].

As our new PM Malcolm Turnbull says why should you have a problem with this? There is a cost and there is a reduction in carbon emissions. There will always be a cost associated with carbon reduction regardless of the method so what does it matter if this method isn’t quite the same as a Carbon Pricing systems previously advocated by the PM and his Environment Minister Greg Hunt? As long as there is a definite amount, Xm tonnes reduced.

Well here are a few thoughts:

1. if a company is currently making a profit of, say, \$500m a year, producing electricity using coal fired power stations then why would they participate in this process? There is no downside. Maybe.

2. Okay it is a bit more subtle than that. Suppose the difference between the cost of producing electricity using coal or renewables works out at \$15 a tonne. You might reasonably bid at \$16/tonne. In reality there is a large upfront cost of converting. There is a possibility that an alternative energy provider takes that \$15/tonne and uses it to subsidise their electricity cost. That could work. That encourages a coal based provider to move to renewables. But so might a coal based electricity provider at \$14/tonne to undermine them. What we call a “race to the bottom”.

3. It seems to be an argument about who exactly pays for carbon pollution. Well here is the simple answer: you pay. Who else would? And you pay because, well, you use the electricity.

4. There is no easy answer to this. Which approach encourages more electricity providers to move to renewables? That is hard to say. Every solution has its downside. I decided while writing this I don’t actually care who pays. As long as carbon is reduced.

I started out thinking Turnbull was just using the excuse “as long as it works who cares?” but I have moved to the view that it doesn’t matter. All carbon reduction schemes move the cost onto the users (of course). There are many subtleties in this argument. I personally think a Cap and Trade system is the best because in a lot of ways it is more transparent. But in the end, as PM Turnbull says who cares, as long as carbon is reduced. Presumably as long as that is what really happens, eh?

# Bringing Harmony to the Global Warming Debate

For some time now, our regular contributor James Glover been promising me a post with some statistical analysis of historical global temperatures. To many the science of climate change seems inaccessible and the “debate” about climate change can appear to come down to whether you believe a very large group of scientists or a much smaller group of scientists people. Now, with some help from James and a beer coaster, you can form your own view.

How I wish that the title of this article was literally true and not just a play on words relating to the Harmonic Series. Sadly, the naysayers are unlikely to be swayed, but read this post and you too can disprove global warming denialism on the back of a beer coaster!

It is true, I have been promising the Mule a statistical analysis of Global Warming. Not only did I go back and look at the original temperature data but I even downloaded the data and recreated the original “hockey stick” graph. For most people the maths is quite complicated though no more than an undergraduate in statistics would understand. It all works out. As a sort of professional statistician, who believes in Global Warming and Climate Change, I can only reiterate my personal  mantra: there is no joy in being found to be right on global warming.

But before I get onto the beer coaster let me give a very simple explanation for global warming and why the rise in CO2 causes it. Suppose I take two sealed glass boxes. They are identical apart from the fact that one has a higher concentration of CO2. I place them in my garden (let’s call them “greenhouses”) and measure their temperature, under identical conditions of weather and sunshine, over a year. Then the one with more CO2 will have a higher temperature than the one with less. Every day. Why? Well it’s simple: while CO2 is, to us, an “odourless, colourless gas” this is only true in the visible light spectrum. In the infra-red spectrum, the one with more CO2 will be darker. This means it absorbs more infrared radiation and hence has a higher temperature. CO2 is invisible to visible light but, on it’s own, would appear black to infrared radiation.  The same phenomenon explains why black car will heat up more in the sun than a white one. This is basic physics and thermodynamics that was understood in the 19th century when it was discovered that “heat” and “light” were part of the same phenomenon, i.e. electromagnetic radiation.

So why is global warming controversial? Well, while what I said is undeniably true in a pair of simple glass boxes, the earth is more complicated than these boxes. Radiation does not just pass through, it is absorbed, reflected and re-radiated. Still, if it absorbs more radiation than it receives then the temperature will increase. It is not so much the surface temperature itself which causes a problem, but the additional energy that is retained in the climate system. Average global temperatures are just a simple way of trying to measure the overall energy change in the system.

If I covered the glass box containing more CO2 with enough aluminium foil, much of the sunshine would be reflected and it would have a lower temperature than its lower CO2 twin. Something similar happens in the atmosphere. Increasing temperature leads to more water vapour and more clouds. Clouds reflect sunshine and hence there is less radiation to be absorbed by the lower atmosphere and oceans. It’s called a negative feedback system. Maybe that’s enough to prevent global warming? Maybe, clouds are very difficult to model in climate models, and water vapour is itself a greenhouse gas. Increasing temperature also decreases ice at the poles. Less ice (observed) leads to less radiation reflected and more energy absorbed. A positive feedback. It would require a very fine tuning though for the radiation reflected back by increased clouds to exactly counteract the increased absorption of energy due to higher CO2. Possible, but unlikely. Recent models show that CO2 wins out in the end. As I as said, there is no joy to being found right on global warming.

So enough of all that. Make up your own mind. Almost time for the Harmony. Perusing the comments of a recent article on the alleged (and not actually real) “pause” in global warming I came across a comment to the effect that “if you measure enough temperature and rainfall records then somewhere there is bound to be a new record each year”. I am surprised they didn’t invoke the “Law of Large Numbers” which this sort of argument usually does. Actually The Law of Large Numbers is something entirely different, but whatever. So I asked myself, beer coaster and quill at hand, what is the probability that the latest temperature or rainfall is the highest since 1880, or any other year for that matter?

Firstly, you can’t prove anything using statistics. I can toss a coin 100 times and get 100 heads and it doesn’t prove it isn’t a fair coin. Basically we cannot know all the possible set ups for this experiment. Maybe it is a fair coin but a clever laser device adjusts its trajectory each time so it always lands on heads. Maybe aliens are freezing time and reversing the coin if it shows up tails so I only think it landed heads. Can you assign probabilities to these possibilities? I can’t.

All I can do is start with a hypothesis that the coin is fair (equal chance of heads or tails) and ask what is the probability that, despite this, I observed 100 heads in a row. The answer is not zero! It is actually about 10-30. That’s 1 over a big number: 1 followed by 30 zeros. I am pretty sure, but not certain, that it is not a fair coin. But maybe I don’t need to be certain. I might want to put a bet on the next toss being a head. So I pick a small number, say 1%, and say if I think the chance of 100 head is less than 1% then I will put on the bet on the next toss being heads. After 100 tosses the hypothetical probability (if it was a fair coin) is much less than my go-make-a-bet threshold of 1%. I decide to put on the bet. It may then transpire that the aliens watching me bet and controlling the coin, decide to teach me a lesson in statistical hubris and make the next toss tails and I lose. Unlikely, but possible. Statistics doesn’t prove anything. In statistical parlance the “fair coin” hypothesis is called the “Null Hypothesis” and the go-make-a-bet threshold of 1% is called the “Confidence Level”.

Harmony. Almost. What is the probability that if I had a time series (of say global temperature since 1880) that the latest temperature is a new record. For example the average temperature in Australia in 2013 was a new record. The last average global temperature record was in 1998. I think it is trending upwards over time with some randomness attached. But there are all sort of random process which produce trends, some of which are equally likely to have produced a downward trending temperature graph. All I can really do, statistically speaking, is come up with a Null Hypothesis. In this case my Null Hypothesis is that the temperature doesn’t have a trend but is just the result of random chance. There are various technical measures to analyse this, but I have come up with one you can fit on the back of a beer coaster.

So my question is this: if the temperature readings are just i.i.d. random processes (i.i.d. stands for “independent and identically distributed”) and I have taken 134 of these (global temperature measurements 1880-2014) what is the probability the latest one is the maximum of them all? It turns out to be surprisingly easy to answer. If I have 134 random numbers then one of them must be the maximum. Obviously. Since they are iid I have no reason to believe it will be the first, second, third,…, or 134th. It is equally likely to be any one of those 134. So the probability that the 134th is the maximum is 1/134 = 0.75% (as it is equally likely that, say, the 42nd is the maximum). If I have T measurements then the probability that the latest is the maximum is 1/T. So when you hear that the latest global temperature is a maximum, and you don’t believe in global warming, then be surprised. As a corollary if someone says there hasn’t been a new maximum since 1998 then the probability of this still being true, 14 years later, is 1/14 = 7%.

So how many record years do we expect to have seen since 1880? Easy. Just add up the probability of the maximum (up to that point) having occurred in each year since 1880. So that would be H(T) = 1 + 1/2 + 1/3 + … + 1/T. This is known as the Harmonic Series. It is famous in mathematics because it almost, but doesn’t quite converge. For our purposes it can be well approximated by H(T) =0.5772+ ln(T) where ln is the natural logarithm, and 0.5772 is known as the Euler-Mascharoni constant.

So for T=134 we get from this simple beer-coaster sized formula: H(134) = 0.5772+ln(134)= 5.47. (You can calculate this by typing “0.5772+ln(134)” into your Google search box if you don’t have a scientific calculator to hand). In beer coaster terms 5.47 is approximately 6. So, given the Null Hypothesis (which is that there has been no statistically significant upward trend since 1880) how many record breaking years do we expect to have seen? Answer: less than 6. How many have we seen: 22.

Global temperatures* – labelled with successive peaks

If I was a betting man I would bet on global warming. But there will be no joy in being proven right.

James rightly points out that the figure of 22 peak temperatures is well above the 6 you would expect to see under the Null Hypothesis. But just how unlikely is that high number? And, what would the numbers look like if we took a different Null Hypothesis such as a random walk? That will be the topic of another post, coming soon to the Stubborn Mule!

* The global temperature “anomaly” represents the difference between observed temperatures and the average annual temperature between 1971 and 2000. Source: the National Climate Data Center (NCDC) of the National Oceanic and Atmospheric Administration (NOAA).

# Shark season

Summer in Australia comes with cicadas, sunburn and, in the media at least, sharks. So far, I have learned that aerial shark patrols are inefficient (or perhaps not) and that the Western Australian government plans to keep swimmers safe by shooting big sharks.

Sharks are compelling objects of fear, right up there with spiders and snakes in the package of special terrors for visitors to Australia. As good hosts, we are quick to reassure: sharks may be the stuff of nightmares and 70s horror movies, but attacks are rare.

But, exactly how rare is death by shark? Over a Boxing Day lunch, I heard an excellent ‘statistic’, designed to reassure a visiting American. Apparently, more people are killed each year in the US by falling vending machines than are killed by sharks around the world. I was skeptical, but had no data to hand. Later, with the help of Google, I discovered that this statistic is 10 years old and the source? Los Angeles life guards. The tale has, however, become taller over time. Originally, vending machine deaths in the US were compared to shark attack fatalities in the US, not the entire world.

While data on vending machine related deaths are hard to come by, subsequent attempts to validate the story concluded that it was plausible, on the basis that there were two vending machine deaths in 2005 in the US but no fatal shark attacks.

Fun though the vending machine line may be, it is not relevant to Australia and, if you are on the beach contemplating a quick dip, then the risk of a shark attack is certainly higher in the sea than death by vending machine. Local data is in order.

According to the Taronga Zoo Australian Shark Attack File (ASAF):

In the last 50 years, there have been 50 recorded unprovoked fatalities due to shark attack, which averages one per year.

Fatalities have been higher than average over the last couple of years. The ASAF recorded two deaths in 2012 and, although validated figures for 2013 are yet to be published, six deaths have been reported over the last two years, suggesting that fatalities rose further to four this year.

To compare shark fatalities to other causes of mortality, a common scale is useful. My unit of choice is the micromort. A one-in-a-million chance of death corresponds to a micromort of 1.0, a one-in-ten-million chance of death to a micromort of 0.1. Taking the recent average death rate of three per year (more conservative than the longer run average of one), and a population of 23 million in Australia leads to a figure of 0.13 micromorts for the annual risk of death for a randomly chosen Australian.

The most recent data on causes of death published by the Australian Bureau of Statistics (ABS) are for 2009. That year, three people were killed by crocodiles. Sharks are not specifically identified, but any fatal shark attacks would be included among the three deaths due to ‘contact with marine animals’. The chart below illustrates the risk of death associated with a number of ‘external causes’. None of these come close to heart disease, cancer or car accidents. Death by shark ranks well below drowning, even drowning in the bath, as well as below a variety of different types of falls, whether from stairs, cliffs or ladders.

Annual risk of death in Australia (2009 data)*

Of course, you and I are not randomly chosen Australians and our choices change the risks we face. I am far less likely to suffer death by vending machine if I steer clear of the infernal things and I am far less likely to be devoured by a shark if I stay out of the water.

So, care should be taken when interpreting the data in the chart. Drug addicts (or perhaps very serious Hendrix imitators) are far more likely to asphyxiate on their own vomit than summer beach-goers. The fairest point of comparison is drowning in natural waters. At almost 3.5 micromorts, drownings in the sea (or lakes and rivers) is more than 25 times more common than fatal shark attacks. And the risk of both can be reduced by swimming between the flags.

What does that leave us with for conversations with foreign visitors? If you are headed to the beach, the risk of shark attack would be higher than death by vending machine, but it is still very low. The drive there (at 34.3 micromorts) is almost certainly more dangerous.

I will be taking comfort from my own analysis as I am heading to Jervis Bay tomorrow and sharks were sighted there this weekend:

Bendigo Bank Aerial Patrol spotted up to 14 sharks between 50 and 100 metres from shore at various beaches in Jervis Bay. [The] crew estimated the sharks at between 2.5 and 3.5 metres in length at Nelsons, Blenheim, Greenfields, Chinaman’s Beach and Hyams Beaches.

The beaches are un-patrolled, so wish me luck…but I don’t think I’ll need it.

* The figure for ‘Shark attack’ is based on the estimate of three deaths per year rather than the ABS data.

# Action and reaction on climate change

Regular guest contributer James Glover (@zebra) takes a closer look at the Coalitions climate change policy.

Malcolm Turnbull, an Australian MP, did a rare and risky thing last week. He actually broke away from the political spin-cycle and explained some figures underlying the cost of the Coalition’s “Real Action on Climate Change” policy. Naturally he was attacked by both the Labor government, who are having trouble selling their own Carbon Tax policy, and his own party colleagues who were horrified that he didn’t stay “on message”. The Coalition quickly bunkered down under orders from the top to avoid discussing Turnbull’s “outburst”. So what was he saying anyway and why was it so controversial?

To see why we need to explain the difference between the Labor Party and conservative Coalition’s policies. There are really only two broad differences. Both policies recognise that anthropogenic climate change is scientific fact, not speculative political fiction. Both recognise the need for action (ie. spending money) on combating climate change. But where they differ is in how global warming should be reversed and how to raise the money to do so. It is not commonly understood but the real difference between the policies is the former.

The Carbon Tax (or its close relative the CPRS) aims to reduce carbon emissions by making carbon pollution relatively more expensive than cleaner, alternate sources of power (and really it’s all about power generation). In order to do this they need to raise the price of carbon powered energy sufficiently to tip the balance in favour of wind, wave, geothermal, biofuels or solar energy (as explained in a recent post here on the Mule). Of the money raised by the Carbon Tax, about half goes back to subsidising the increased power bills of the less well-off. Of the remainder, most goes to developing cleaner sources of energy at lower cost. As explained in the earlier post, when there is no more carbon pollution then there is no more carbon tax to distribute. So ultimately, unless the cost of alternate energy comes down to the levels currently enjoyed by coal, gas or oil based power, in the long run the less well off will be much less well off.

While the Coalition’s “Real Action on Climate Change” has more than a whiff of policy-on-the-run, it can be presented as a respectable alternative. It says that we should ignore the fruitless and expensive attempt to cheapen alternative power and accept carbon pollution as a fact of life. In order to mitigate the effects of carbon pollution, though, we need to remove it from the atmosphere after the pollution has occurred, not at the source. This will cost money. A lot of money. Australia alone currently produces about 0.2 billion tonnes of carbon (not C02) each year. That’s a cubic block of carbon approximately 500m x 500m x 500m*. Each year. Anybody who thinks sequestration is the answer has to find somewhere to put all that carbon for a start. Or plant several million trees a year. The only hope for this reactive approach to reducing carbon is that some method is found which removes large amounts of carbon from the atmosphere at a relatively small cost: and much smaller than the likely Carbon Tax price of \$20-40 per tonne. While such methods are conjectured, for example spreading iron filings in the ocean to increase carbon uptake by marine organisms, to say they are untested is an understatement. Equally we could allow carbon to increase in the atmosphere but mitigate the effects of global warming by using giant sunlight reflecting shields. Or paint the Sahara Desert white. Hey, stranger things have happened. But at the moment all these methods remain firmly in the province of science fiction.

So what did Malcolm Turnbull actually say that was so exciting to friend and foe alike? Well, using Treasury forecasts of population and economic growth, that 500m carbon cube will have grown to 850m wide by 2050 (650m tonnes) if we do nothing. Assuming we can mitigate the effects of carbon pollution, or pay someone else to do it for us, the cost could be as low as \$15 per tonne or \$18bn per year. Assuming the population has doubled by 2050 that’s about \$500 per person, or an extra \$50 per week on the average household tax bill. Given the extreme rubberiness (definitely not vulcanised rubber) of these figures, that’s pretty much what the Carbon Tax will cost as well. If the initial price of the Carbon Tax is set at \$30 per tonne, then over time this should come down as alternate energy becomes actually cheaper due to technology improvements and economies of scale, not just relatively cheaper. Indeed if the Real Action plan involves buying permits from other countries who have set up some sort of CPRS and use alternate energy sources, then the equilibrium cost of both plans is probably pretty much the same, i.e. \$15 per tonne. The real action policy really only comes out ahead if one of the fanciful ideas for removing carbon en masse, post production, pays off.

Of course the Coalition’s policy has to be funded somehow, and herein lies the second difference between the two. The Coalition’s policy will involve raising taxes, and probably income taxes as opposed to the Carbon Tax favoured by Labor. So any claim on the Coalition’s part (a point made by Mr Turnbull) that the major benefit of their policy is that it won’t raise electricity prices is totally spurious. Both policies will lessen household discretional spending. By the same amount. That’s all voters ultimately care about. Turnbull also claimed that their policy had the advantage that if “climate change is crap” as Tony Abbot famously is purported to have said, then it can all be dismantled without much cost. For that statement alone, sending a dog-whistle to his party’s climate skeptic supporters, Mr Turnbull deserved the public flaying he got, if not for the right reason.

*Note: in the above I have assumed that 1m cubed of carbon weighs 2 tonnes which is the density of graphite. It obviously depends on the form of carbon used. It is intended as an indicative figure only. Though I wish someone would actually build a structure of that size and point out to everyone this is how much carbon a year we are producing

My now traditional annual pilgrimage to the South coast of New South Wales saw the rainiest weather I can remember. While it was nothing on the scale seen in Queensland and Victoria over recent weeks, it did take its toll on some of the wildlife: we saw dozens of dead porcupine puffers washed up on the beach, apparently the victims of an algal bloom triggered by the rains. On the plus side, the lack of sunshine did help me to catch up on a bit of overdue reading, including a review copy of a Beginner’s Guide to R which you can expect to hear more about when I manage to finish writing the review.

I also read two books about climate change, which were very different in style and content.

### Merchants of Doubt

The first was Erik Conway and Naomi Oreskes’ Merchants of Doubt (How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming). The book is not really about climate change per se, but rather the modus operandi of a number of key climate skeptics. In the process it sheds some interesting light on a question I considered here on the blog about a year ago: why does belief or disbelief in the reality of climate change tend to be polarised along political lines? Most of the protagonists in the Merchants of Doubt are scientists, many of whom were physicists involved in the original US nuclear weapons program. The thesis that Conway and Oreskes build is that these scientists were committed anti-Communists and as the Cold War began to thaw, they saw threats to freedom and capitalism in other places, particularly in the environmental movement. That, at least, is the explanation given as to why the same names appear in defence of Ronald Reagan’s “Star Wars” missile defence scheme, in defence of the tobacco industry (first arguing against claims about the health risks of smoking, later about the health risks of second-hand smoke), dismissing the idea of acid rain and finally casting doubt on claims of human-induced climate change.

While I would not expect the book to sway any climate change skeptic, it should at least encourage people to think a bit harder about messengers as well as the message. It certainly prompted me to do just that. When reading the chapter on the second-hand smoke controversy, I immediately thought of an episode of the Penn and Teller’s very entertaining pseudo-science debunking TV series Bullshit*. The episode in question, as I remembered it, did a convincing job of portraying the risks of second-hand smoke (SHS) as dubious at best. Watching it again was eye-opening. Looking past the scathing treatment of the anti-SHS activist, I focused instead on the credentials of the talking heads who were arguing that the science was not settled. The two main experts were Bob Levy from the Cato Institute, a libertarian think-tank, and Dr Elizabeth Whelan, the president of the American Council on Health and Science.

Levy’s voice immediately suggests he is a smoker, which does not, of course, disqualify him from questioning the science of SHS. More intriguing is the fact that the Cato Institute regularly appears as a company of interest in the Merchants of Doubt. Conway and Oreskes draw a number of links between the Cato Institute and both the defence of the tobacco industry and skepticism of global warming, particularly in the person of Steven Milloy who, before joining Cato, worked for a firm whose main claim to fame was to provide lobbying and public-relations support for tobacco giant Phillip Morris.

As for the American Council on Health and Science, it sounds at first like some kind of association of health professionals (which is presumably why Warren chose the name). It is in fact an industry-funded lobby group…sorry, I mean an independent, nonprofit, tax-exempt organisation. Exactly how much of their funding comes from where is now shrouded in mystery, but here are the details as of 1991.

Of course, scrutinising the backgrounds Levy and Whelan does not prove that their claims are wrong. It does, however, raise the question of why Penn and Teller did not interview anyone more independent, perhaps even a scientist, who expressed the same doubts.

### What’s the Worst That Could Happen?

The second book on climate change that the rain helped me to read was Greg Craven’s book What’s the Worst That Could Happen?. I bought this after watching Craven’s amusing, if flawed, video “The Most Terrifying Video You Will Ever See”. Craven, a high-school science teacher in Oregon, has clearly workshopped the issue of climate change extensively with his students and the insight he wants to share in his videos and his book is essentially that the whole problem can be viewed from a game-theoretic perspective. Rather than trying to decide what is true or not (are the skeptics right or are the warmers right?), the important question is should we be acting or not.

Craven’s Global Warming Decision Grid

In his video, Craven uses an action versus outcome “decision grid” to argue that the consequences of not acting in the event that global warming turns out to be true are worse than the consequences of acting (i.e. economic costs) if it turns out to be false. The argument is entertaining, but unfortunately flawed. The problem is that it can be applied to any risk, however remote. As he writes in the book:

Simply insert any wildly speculative and really dangerous-sounding threat into the grid in place of global warming, and you’ll see the grid comes to the same conclusion–that we should do everything possible to stop the threat. Even if it’s something like giant mutant space hamsters (GMSHs).

The book is an attempt to rescue his idea by developing a series of tools to help sift through the arguments for and against climate change without having to actually understand the science. Along the way, he includes an extensive discussion of confirmation bias which I enjoyed as I am fascinated by cognitive biases. Ultimately though, his conclusions rest on an argument from authority. While he makes an excellent case for the important role that authority plays in science, this approach will not win over the skeptics I know: I can already hear their riposte in the form of the establishment’s rejection of Albert Wegener’s theory of continental drift.

Skeptics aside, What’s the Worst That Could Happen? is an extremely accessible book (perhaps even too folksy in its style for some) and is probably best read by those who are not already entrenched in one camp or another and are just sick of the whole shouting match.

* Long-time readers may remember that Bullshit has been mentioned on the blog before in this post about bottled water.

# Polls apart on climate change

Regular Stubborn Mule guest James Glover (@zebra) turns his statistical expertise on some apparently contradictory polls gauging opinions on climate change.

Two polls came out today on the question of whether people believed climate change is real and if so whether it is caused by human activity. The first was a Newspoll published in The Australian and the second was by Essential Media and was commented upon by Essential’s Peter Lewis on ABC’s The Drum. Intriguingly, the Newspoll suggests 73% of Australians believe in climate change with a significant human contribution (so called Anthropogenic Global Warming or AGW). Now The Australian has copped a bit of flak lately for its alleged anti-climate change agenda, but leaving that aside this poll suggests that AGW should be practically a closed book politically as an overwhelming majority believe in it. Essential Media describes themselves as a research tool for progressive political campaigns. Essential’s poll indicates that only 45% of people believe in climate change caused by human activity. In the accepted narrative of such things the results would have been around the other way and the tweetsphere would be apoplectic accusing The Australian and News Corp of once again distorting Newspoll results for their own right-wing political agenda. So what is happening here?

First a note on sampling error. Essential polled 1896 people while Newspoll contacted 1,123 people. For polls where the expected split is approximately 50% a good rule of thumb for margin of error (MoE) is 1/√sample size. In the two polls here this gives MoEs of 2.2% and 3.0% respectively. MoE represents two standard deviations from the sample average so differences of 25% are extremely unlikely (like 10-10 probability unlikely) to be explained by a unfortunate random choice of sample from the general population.

The most likely explanation is that one or both of these polls suffer from an underlying sampling bias. This would be easy enough to generate artificially—just poll people in Newtown if you want to get more people who believe in AGW or in Bob Katter’s seat for the opposite result (is this a little glib? Maybe, but you know I am right). But legitimate pollsters like Essential and Newspoll rely on the rigour of their sampling technique. Especially as every time you publish a controversial result, a large section of the population who disagree with it will accuse you of bias. There are a number of techniques to reduce bias—one is to ask coquestions whose population statistics are well accepted. For example if in your poll you found that 46% of the respondents were female and 54% were male you can readjust the result to reflect the actual population average of 51:49. I assume both polling organisations follow standard methodologies to minimise bias. Often though their actual methodologies are proprietary so question marks remain. A famous political polling agency was well know to always come up with polling results that reflected the political opinions of its founder after “adjustment for bias”.

Some indication that there isn’t an overwhelming bias are some additional questions about voting intention. Here are the results:

Essential Newspoll
Coalition 45% 41%
Labor 38% 34%
Green 11% 14%
Other 6% 11%

I would have to say that the differences in the numbers are on the borderline of being consistent with the MoEs I estimated. In any event the Newspoll which has a higher number believing in AGW has less Coalition voters (though about the same Labor+Green votes). It seems unlikely that the votes for Independents and other alone could account for the 28% difference in the polls on the question of AGW.

So that leaves us with the polls themselves. I have assumed so far that they asked the same questions, but there are major differences. Here are the actual questions and results:

Essential

 Climate change is happening and is caused by human activity 45% We are just witnessing a normal fluctuation in the Earth’s climate 36% Don’t know 19%

Newspoll

 No climate change 18% Climate change solely caused by human activity 18% Climate change partly caused by human activity 55% Climate change not caused by human activity 3% Believe in climate change but don’t know cause 2% Don’t know if climate change is real 5%

Now what appears at first to be a headline difference between the polls is more subtle. It is quite hard (I tried) to map the answers between them exactly to compare the results. For example Essential doesn’t ask if the respondents directly if they don’t believe in climate change at all (18% in Newspoll) so presumably the climate skeptics get lumped under “Don’t know” (19%) which will also include those who believe in climate change but don’t know if it is caused by human activity or don’t know if climate change is real. That Newspoll total of “don’t knows” and skeptics is 23%, a bit higher than Essentials “Don’t know” of 19% but within the MoEs as reflected by the voting intention results.

However we can try to compare the two main results which boil down to “Believe climate change is real and human activity is significantly affecting it” of 73% (Newspoll’s headline result combining “solely” and “partly” caused by human activity) vs Essential’s “Climate change is happening and is caused by human activity” of 45%. The difference appears huge. The only thing I can think to explain this is that when not offered the choice of “solely” vs “partly” caused by human activity the Essential respondents threw their lot in with “caused by a normal fluctuation in the Earth’s climate”. In other words the results are consistent if most people who believe that “climate change is real” but don’t believe it is “solely caused by human activity” believe it is “partly caused by human activity” but mostly due to “natural fluctuations in the Earth’s climate”.

What is clear here is that the wording of polls is important and that both polls failed to tease out the subtle distinctions in people’s views on climate change (though Newspoll did a better job of this than Essential). There are also question marks about the sampling bias as shown in the voting intention results. But the headlines of both polls will superficially look like totally different results. And that is a problem when the results are used to support political rather than scientific views on anthropogenic global warming as fact or fiction.

# Emissions League Tables

Yesterday’s Sydney Morning Herald featured an opinion piece by Rodney Tiffen on Australia’s sluggish response to climate change. Deliberately provocative, the discussion was framed from the outset in the language of competition:

An international competition in self-righteousness would be closely fought. But Australia must be a strong contender.

Tiffen went on to draw on data from the International Energy Agency (IEA), but got his statistics slightly wrong in the process:

If we restrict the analysis to the most populous 130 countries, those with a population of 3.5 million or more, Australia is the world leader. Only a handful of small countries, especially oil producers such as Bahrain, Qatar and Kuwait, have higher per person emissions.

Australians may be disappointed to learn that we do not, in fact, take home the trophy in this competition. Both the United Arab Emirates and the United States have populations over 3.5 million and have higher per capita emissions than Australia at last count (2007). Nevertheless, coming in third place in this competition, Australia certainly punches above its weight, with per capita emissions running at 4.3 times the world average. Furthermore, as the chart below shows, we have been steadily catching up to the United States over the last 40 years. In fact, to give Tiffen the benefit of the doubt, the most recent IEA data is for 2007, so we may well be ahead of the USA by now.

CO2 emissions 1971-2007 (Source: IEA)

The reason Tiffen looks at per capita emissions is to ward off one common argument for inaction on climate change, namely that China and the United States are the only countries that can make a difference. There is no doubt that these two countries dominate the overall production of emissions. Throwing Canada and Mexico in with the United States brings North American emissions to almost one quarter of the world’s total. Add China and almost half the world’s emissions are accounted for.

Total CO2 emissions for 2007 (Source: IEA)

Nevertheless, if the aim is to attempt reductions in world emissions, Tiffen’s focus on per capita emissions is entirely appropriate. No-one would be convinced if the United States viewed its emissions along State lines, thereby arguing that their emissions were not so big by global standards after all (although, this defence would probably not be much use to California). While countries may be actors on the world stage through their political proxies at climate conferences, emissions are ultimately the product of people (both at home and at work) and not countries. Ranking countries by per capita emissions is thus useful as it gives some indication of where emission reductions may be more readily achieved. The chart below shows the top 25 (big and small) countries in terms of per capita emissions.

Top 25 per capita emitters for 2007 (Source: IEA)

Qatar ranks so high on this scale that it compresses the figures for all of the emitters below it, so here is the chart again with a somewhat truncated scale.

Top 25 per capita emitters for 2007 (Source: IEA)

There are certainly some small countries with high rates of carbon emissions per capita, but looking at a larger scale reveals that developed countries are the worst in per capita terms. It is worth noting, though, that Europe is doing better than the rest of the OECD and is also ahead of former members of the Soviet Union.

Per capita emissions by region for 2007 (Source: IEA)

Another useful approach is to consider emissions per dollar of economic output. This serves to highlight “inefficient” emitters, not to shame them but to identify where spending money on the problem is most likely to deliver significant results. It should come as no surprise that a league table of the highest emitters per dollar of gross domestic product (GDP) is a catalogue of troubled and/or small nations. Note that these figures are calculated based on conversion to US dollars using market exchange rates. Using purchasing power parity instead does reorder the list somewhat, but the names are largely the same.

Top 25 emitters by emissions/GDP for 2007 (Source: IEA)

This perspective suggests that when developed countries consider programs to assist developing countries to reduce their emissions, they could reasonably focus on significant but inefficient emitters. The chart below provides a possible target list, showing the 10 worst-performing countries in terms of emissions per dollar of economic output after restricting to countries with emissions of at least 150 million tons of C02 per annum.

Top 10 large emitters by emissions/GDP for 2007 (Source: IEA)

# Who are the big carbon emitters?

Earlier this week, @pureandapplied brought to my attention the emissions data that has been published by the Department of Climate Change in Australia. Their report comprises data for the 2008-09 reporting year provided to the Greenhouse and Energy Data Officer by corporations whose greenhouse gas emissions exceeded 125 kilotonnes*. A few corporations are missing from the list for a number of reasons, including failure to provide their data in time for the report’s publication (a sorry excuse indeed). Nevertheless, the data makes for some interesting reading. As @pureandapplied remarked, for example, Qantas was responsible for more emissions than Shell: those air points are producing a lot of CO2-equivalent emissions!

The data is reported in two categories, “Scope 1” and “Scope 2” emissions. The definitions of the two scopes are as follows:

Scope 1 emissions are the release of greenhouse gases into the atmosphere because of activities at a facility that is controlled by the corporation. An example of this would be gases emitted by burning coal to generate electricity at an electricity production facility (i.e. a power station).

Scope 2 emissions in relation to a facility, are the release of greenhouse gases emitted at a second facility because of the electricity, heating, cooling or steam that is consumed at the facility. An example of this would be greenhouse gases emitted to generate electricity, which is then transmitted to a car factory and used there to power the car factory’s lighting. The greenhouse gas emissions are part of the factory’s scope 2 emissions. It is important to recognise that scope 2 emissions from one facility are part of the scope 1 emissions from another facility.

The report is very careful to note that these two scopes should be used warily. In fact, it warns that the two figures “should not be used individually, or added together” to estimate liabilities under any emissions abatement scheme. That is a red rag to a Mule, so I will indeed look at them individually and added together. The chart below shows the top 25 emitters in the Scope 1 category.

Top 25 Scope 1 Emitters

It should come as no surprise that the big Scope 1 emitters are primarily power generators, although there are a number of mining companies in there, along with Qantas thanks to its burning of jet fuel. Scope 2 tells a somewhat different story.

Top 25 Scope 2 Emitters

Here “poles and wires” make an appearance: Transgrid and the like, move energy from place to place that has been generated elsewhere. So, the Scope 1 emissions are counted by the generator, but the tranmission company wears the Scope 2 emissions. Woolworths manages an impressive fifth place, perhaps thanks to the lights in all of their supermarkets? Wesfarmers, the owners of the Coles supermarket chain, rank higher still.

Finally, here are the top 25 emitters by the combined total of Scope 1 and Scope 2 emissions. Not surprisingly, the generators dominate once more.

Top 25 Scope 1+2 Emitters

Also included in the data is the total amount of energy consumed by each corporation. It is in these numbers that I stumbled upon something of a puzzle. Envestra produced a reasonably sizeable 627,161 tonnes of Scope 2 CO2-equivalent, but had one of the lowest levels of total energy consumption at only 193 GJ. What have they been up to? Guesses are welcome!

* Also included are those corporations holding a reporting transfer certificate.

# No hiding the cost of emissions reduction

In today’s Sydney Morning Herald, Ross Gittins has an opinion piece entitled Mealy-mouthed pollies see voters as a bunch of suckers. In it he argues that politicians are not to be believed when they start talking about taxes: they are more interested in playing issues for their electoral effect than actually saying what they believe about a tax. After all, if Labor really believed all their arguments against the goods and services tax (GST) back in the days of Kim Beazley‘s 2001 “Rollback” campaign, wouldn’t you expect to hear something from the current Labor government about the GST?

Perhaps this goes some way to explain why no politician in Australia is brave enough to enunciate the unavoidable fact that if, as a nation, we want to reduce carbon emissions, there will be a cost.

This is true regardless of whether your scheme of choice be Labor’s proposed emissions trading scheme (ETS), a carbon tax or the latest offering from the coalition, an emissions reduction fund. The reason is simple. The bulk of Australia’s power generation is sourced from coal-burning power-stations and this is because coal is cheaper than any other source, including natural gas, solar, wind or geothermal. Achieving a meaningful reduction in Australia’s carbon emissions will require a gradual phasing out of coal-burning power stations, replacing those reaching the end of their life with generators using more expensive alternative sources. Ultimately someone, somewhere must bear this cost if the shift is to occur.

Some would argue that “the big polluters have to pay”. That is easier said than done: these polluters would want to preserve their profit margins and so in practice any additional costs imposed on power generators and other industrial polluters would be passed directly on to their customers anyway.

Others would prefer to rely on people opting to reduce their own emissions. One avenue for this currently open to Australians is provided by the GreenPower program. Established by Commonwealth Government in 1997, GreenPower allows energy retailers to provide their customers with an accredited “green” option. This allows households and businesses to buy some or all of their power from lower emission generation sources. Needless to say, these options cost more than the standard offering. According to the 2008 GreenPower audit, 947,268 customers were using a GreenPower product, representing around 10% of Australian households. While this may appear at first glance to be an impressive take-up in 10 years, digging into the figures a little deeper gives a different picture. For many of the retailers, close to 90% of the retail customers have elected to buy the cheapest GreenPower product which only sources 10% of the householder’s power from alternative sources. For businesses the number using the 10% option is even higher. So, relying on customer choice alone, the GreenPower program has only resulted in a shift to lower emission sources of about 1 or 2%.

Both emission trading schemes and carbon taxes aim to provide a far bigger shift by closing the price gap between cheap but carbon-intensive power sources and the more expensive alternatives. Economically the key difference between a tax and a trading scheme is that the cost of carbon imposed by a tax is fixed by the government, while the price imposed by a trading scheme would vary with supply and demand.

Most economists are attracted to trading schemes, pointing out that the problem with a tax aimed at reducing emissions is that you do not know how high to set the tax to get a desired reduction in emissions. While government can progressively tweak the tax to get to the target, it still requires significant guesswork. In contrast, under a trading scheme, the emissions target can be set in advance and then an appropriate number of “emissions permits” are issued (at which point, some environmentalists get queasy at the thought of providing business with the right to pollute, but that is an emotional distraction). These permits can be bought and sold, so any polluters unable to reduce their emissions to the level of the number of permits they have can purchase additional permits from others who can achieve greater reductions. In the process, the price should automatically adjust (thanks to the famous–or infamous–invisible hand of markets) to a level that achieves the desired reduction target. Any emissions not backed by permits are subject to punitive financial penalties set at a sufficiently high level to make the purchase of permits preferable.

For carbon taxes the price is known in advance, but the amount of reduction achieved is unknown. For a trading scheme, the reduction is known in advance, but the price is not.

That is the theory at least. In practice, both approaches have enormous practical complexities, not least the challenges of monitoring compliance. Furthermore, the trading scheme proposed by the Labor government, known as the Carbon Pollution Reduction Scheme (CPRS), is not quite as pure a trading model as economists would like since it comes with a price cap. This means that, while the market is allowed to determine the price of carbon, the price cannot trade above a pre-determined level. Under the proposal, the cap would be set at \$40 per ton of carbon for the first few years. This means that if the market price of emissions was in fact higher than \$40 per ton, the CPRS scheme would in fact operate more like a fixed-price carbon tax.

As for the coalition’s reduction fund, it resembles a carbon tax approach to some extent in that it does not impose a particular emissions target. But the key difference between the reduction fund and either a carbon tax or a trading scheme is that it would be up to the government to determine the most promising approaches to reducing emissions and offering financial inducements to pursue these approaches. So it involves the government “picking winners”, to use a phrase favoured by free-market enthusiasts who consider markets far more efficient than governments at making decisions about allocation of scarce resources and, presumably, the best approach to dealing with climate change. To see the Labor government advocating a market solution and the Liberal/National Party coalition advocating a government-led approach is perhaps the most peculiar aspect of the current climate change debate.

While there are many reasonable discussions that could be had about the relative merits of all of these schemes, sadly the debate driven by the politicians is far more likely to be which scheme is or is not a “great big new tax”. The fact that a trading scheme is not a carbon tax does not somehow mean than taxpayers and other consumers will not end up paying for the emissions reductions. Equally, the money in a reduction fund has to come from somewhere and, since the scheme is being advocated by a party with a deep-rooted fear of government deficits, it is safe to say that it will come from increased taxes, reduced public spending elsewhere or a combination of the two. Again, someone will pay.

The last Federal election and opinion polls held before and since then all suggest that, recent visits by Lord Monckton notwithstanding, the majority of Australians want something to be done about reducing our country’s emissions. Is it too much to ask of our politicians to stop shouting “It’s a tax!”, “No it’s not a tax, yours is!”? I hope it is not, but in the process, everyone else has to accept the fact that reducing our emissions will come at a cost and do not believe any politician who tries to claim otherwise.