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-1=e^ipi

Emission scenarios and economic impacts of climate change

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Waldo, you criticize me of not using 'plain English', while in your response using unclear Waldo-speak, which is difficult to follow. It is very ironic.

you math-bluster on at length without actually presenting just what it is you're wanting to state/present... in PLAIN ENGLISH!. No one cares to follow your math-shuffledance routine! No one cares! It's heelarious for you to suggest you've provided an understanding of a current post in other threads... in other long past posts made! You couldn't write an understandable post... even if you set your mind to it. You clearly haven't grasped the audience within this forum! Yet you prattle on with your moronic posts that aren't understandable to the broader forum makeup, that present no avenue for actual discussion. I offered you a representative example of what you could have written... something that would have possibly engaged others in actual discussion... instead all you presented was a dash of math-wizardry to arrive at a number... without actually stating what the number means on so many different levels. Haven't you clued in yet... no one responds to your math-peppered posts - no one cares!

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How are you supposed to determine what policy makes sense with respect to climate change if you don't attempt to quantify things and compare the costs and benefits? Are we supposed to use 'discovery math' and just make decisions based on subjective feelings?

You say no one cares, yet I have an open invitation from Judith Curry to make a guest post on her blog on the issue of relative risk aversion.

even if one were inclined to engage your nonsense, you don't present the underlying full detail that would allow someone to actually check/confirm what you're prattling on about... even if one cared and had the capability to do so! This is not the board for a low-level detailed discussion of math/formula peppered posts; again, as you've been apprised now, several times, there is no shortage of boards/forums for you to do just that in. And yet... you still continue here... in spite of never getting any response from anyone on your math wizardry! So you claim you have an open invitation from 'Crazy Aunt Judy'. I follow that blog on occasion - what name do you post under there? Even she maintains a strict delineation between most threads that are intended as actual English level discussion format and those occasional ones that are intended for more lower-level detail... and she manages to patrol that quite well.

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Acceptance of anonymity principle + separability axiom. I explained this in earlier in posts I linked to. Not my fault if you don't want to read them.

the perfect case in point! Even if one did read something you've long ago presented in some distant past thread/post... would it necessarily be remembered... even if you managed to remarkably present it in an English understandable format? Instead you'll do your math-dance "ta da" routine, arrive at some "magic number" and never actual present a discussion format around that number! What a concept! And now, to top that all off, you have the gall to suggest you've presented that discussion format and related understanding "somewhere else"... in some long past other thread/post! :lol:

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Your continued science denial of the CO2 fertilization effect is noted.

no - I busted and punted your charade long ago! You simply choose to continue your nonsense to suggest "CO2 is simply plant food"! Your CO2 fertilization reality is non-real world and completely dismisses all the negative crop-yield impacts that temperature/climate change have in factoring the influence of precipitation, biotic stresses of weeds, insects and diseases, nitrogen factors, soil conditions, nutrient management, acclimation aspects, etc., etc., etc. I presented you the IPCC findings in regards to climate-change impacted staple crop-yields in both short-term and longer-term scenarios. You simply choose to ignore/dismiss them... you know, in your, as you say, "continued science denial"!

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you don't present the underlying full detail that would allow someone to actually check/confirm what you're prattling on about...

I used to, and then you people complained that my posts were too long. For example, I explained things in full detail in the thread on jet streams and your entire response was 'manifesto, manifesto, manifesto'. Even when I tried to cut things down in the climate sensitivity thread, it still wasn't enough.

Even if one did read something you've long ago presented in some distant past thread/post... would it necessarily be remembered... even if you managed to remarkably present it in an English understandable format?

Is it that hard to click on a link?

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I used to, and then you people complained that my posts were too long. For example, I explained things in full detail in the thread on jet streams and your entire response was 'manifesto, manifesto, manifesto'. Even when I tried to cut things down in the climate sensitivity thread, it still wasn't enough.

by your own puffed-up chest you related, several times, that your manifesto thread was, by your own count... 7800 words in length! :lol: And you actually expected people to read it - that's the real kicker here! But ya, now you simply, for the most part, drop (condensed) math-trou typically presenting a "ta da" numeric result. Of course, you provide no context/meaning for your "ta da"... certainly not one that anyone can engage discussion around! Again, haven't you ever wondered, not even once, why you get no responses to posts like that? And like I said, that condensed math wizardry has no detail to allow someone to even check your "ta da" findings... so why bother with it at all? Again, no one cares about your formula prattle, about your regression results... no one cares! Put your thoughts down in plain simple English - you just might actually get others to engage in your posts!

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Is it that hard to click on a link?

nice try! You mean links back into your "manifesto thread" and your "sensitivity bible thread"? :lol: That's even if you provide links to those gems! How hard is it for you to provide a simple English language summation on the actual point(s) you're wanting to make? What a concept! No one will chase your presumed/claimed thoughts through past threads... if you can't write a summary account in a current thread/post, no one will bother with it. For the most part you cover your inability to articulate your thoughts in simple English by covering that inability with your needless displays of formulas/calculations/etc..

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I used to, and then you people complained that my posts were too long. For example, I explained things in full detail in the thread on jet streams and your entire response was 'manifesto, manifesto, manifesto'. Even when I tried to cut things down in the climate sensitivity thread, it still wasn't enough.

Waldo's shtick is moving the goal posts. No matter what you post he will come up with irrelevant criticisms will completely ignoring the core of your argument. His objective is to steer the discussion away from areas where he has nothing to say into areas where we he can deploy his various canned talking points. You need to avoid getting sidetracked and insist that waldo actually address the points you make instead of changing the topic.

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Waldo's shtick is moving the goal posts. No matter what you post he will come up with irrelevant criticisms will completely ignoring the core of your argument. His objective is to steer the discussion away from areas where he has nothing to say into areas where we he can deploy his various canned talking points. You need to avoid getting sidetracked and insist that waldo actually address the points you make instead of changing the topic.

Why do you care what Waldo addresses? I think basic logic utterly disarms the Waldos of the world. When you point out that every six months India will increase its emissions by the entire amount Canada puts out it really puts all these ludicrously costly Canadian carbon schemes into perspective. Ontario used to be the manufacturing centre of Canada. Now their energy rates are double everyone elses and they're about to add a whopping carbon tax on top of that. Can you see all the industries fleeing to China and India? Rachel Notley is doing her best to destroy the oil industry and increase unemployment in Alberta in hopes of reducing emissions over the coming forty or fifty years, and at the federal level Mulcair and Trudeau are eagerly waiting in the wings to do their share to damage Canada' economy on behalf of Waldo's holy grail of making a fraction of a fraction of a fractions worth of reduction in world CO2 emissions. It's all utterly preposterous and illogical, and only a vapid airhead or a rigid zealot would take such things seriously.

Unfortunately, most of the politicians representing the Left can be reasonably accurately described using one or both of those terms.

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I think basic logic utterly disarms the Waldos of the world. When you point out that every six months India will increase its emissions by the entire amount Canada puts out it really puts all these ludicrously costly Canadian carbon schemes into perspective. ............ Waldo's holy grail of making a fraction of a fraction of a fractions worth of reduction in world CO2 emissions. It's all utterly preposterous and illogical, and only a vapid airhead or a rigid zealot would take such things seriously.

Unfortunately, most of the politicians representing the Left can be reasonably accurately described using one or both of those terms.

you made a similar claim about India earlier and were asked to cite your reference. If only you would provide a reference to allow one to gauge how that/your interpreted projection is made, when it was made and under what trajectory pathway scenario/criteria it was made, particularly in regards to actions India is taking and has pledged to take.

you're clearly a one-trick pony. Even after acknowledging to you that in a broad comparative context, initiatives to reduce Canada's direct emissions output relative to the world's largest emitters is a symbolic pursuit in regards to direct absolute emissions... you're still purposely fixated on that! Of course you do so while you continue to also purposely ignore statements that speak to the real influencing role that Canada does/can play in (a Harper Conservative) all-out, full bore, full-speed ahead initiatives/wants to develop/export unfettered tarsands product... all working to extend other nations dependencies on fossil-fuel, all working to negatively influence other nations alternative energy pursuits. Apparently, in your world, Canada gets a free-pass to continue ever expanding development while exporting ever-increasing product across the world.

the Argus position: let that emissions reduction thingee be handled by "those other guys... let Harper continue to pledge reduction commitments he has no intention of meeing... quit messin' with Canada"!

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Waldo's shtick is moving the goal posts. No matter what you post he will come up with irrelevant criticisms will completely ignoring the core of your argument. His objective is to steer the discussion away from areas where he has nothing to say into areas where we he can deploy his various canned talking points. You need to avoid getting sidetracked and insist that waldo actually address the points you make instead of changing the topic.

now I did take a relatively recent self-imposed 6-month hiatus... before and after, I sure don't recall you ever responding to the reams upon reams of math laden formula/calculations/results devoid of actual plain English verbiage that might actually engage discussion. Go figure, hey! One can't, as you say, "engage points" that aren't made/presented directly and succinctly... in plain English... without having to try and piece-meal presumed meaning across a multitude of past threads/posts (themselves peppered with non-English format math-wizardry)!

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Even after acknowledging to you that in a broad comparative context, initiatives to reduce Canada's direct emissions output relative to the world's largest emitters is a symbolic pursuit in regards to direct absolute emissions...

The difference between us is I'm not willing to beggar the economy for a symbolic gesture.

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Why do you care what Waldo addresses? I think basic logic utterly disarms the Waldos of the world.

My comment was for -1=e^ipi who was expressing frustration at waldo's tactics. I ignore waldo's posts myself.

Unfortunately, most of the politicians representing the Left can be reasonably accurately described using one or both of those terms.

10-15 years I was really worried about 'evangelical Christians' being able to restrict access to abortion or research into stem cells and other such inconsequential things until I realized that the real religious fundamentalist threat comes from environmentalists - not christians or even muslims because environmentalists claim to use science as a basis for their religious dogma which hides their true nature and they use this dogma to push polices that have the potential to cause great harm to many people. Edited by TimG

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The difference between us is I'm not willing to beggar the economy for a symbolic gesture.

"beggar the economy" - how so? Specifically, how so in regards to, for example... the multitude of Harper Conservative emission reduction pledges made in the past? Again, this is simply you lining up around your one-trick pony focus, while you completely ignore the enhanced development/export impact on the world that Canada has/can have. Why so selective chum?

the Argus position: let that emissions reduction thingee be handled by "those other guys... let Harper continue to pledge reduction commitments he has no intention of meeting... quit messin' with Canada"!

Edited by waldo

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Waldo's shtick

My comment was for -1=e^ipi who was expressing frustration at waldo's tactics. I ignore waldo's posts myself.

and your "schtick"? You know, the one shown by you throughout your MLW posting history... where you've built upon and around your perpetual themes of projecting upon anyone or any organization that might presume to speak to any degree of mitigating fossil-fuel sourced emissions... projecting your themes of, "conspiracy, group think, ideological bias, confirmation bias, job protection, fraud, data manipulation, peer-review corruption, selling disaster porn, rent seeking, etc., etc., etc.". Exposing and highlighting your "schtick" has been quite easy... simply because you can't help yourself! Why's everybody keepin' the poor-denier man down! :lol:

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Stumbled upon this today:

http://www.int-res.com/articles/meps/188/m188p117.pdf

"Corals growing in seawater at a reduced pH of 7.2 calcified at half the rate of control corals at pH 8.0"

So coral only grows at half the speed at pH 7.2 compared to a pH of 8.0. Given that pH will change from like 8.1 to 7.8 over the next hundred years, doesn't look like ocean acidification is a big deal.

Edit: Here is another study that suggests coral reefs can't compete in a pH less than 7.7.

http://www.nature.com/nclimate/journal/v1/n3/full/nclimate1122.html

Edited by -1=e^ipi

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Given that pH will change from like 8.1 to 7.8 over the next hundred years, doesn't look like ocean acidification is a big deal.

which has what to do with this thread?

in any case, yet another of your simplistic and most naive posts! You're taking a most catch-all number, applying it at large, and making a definitive effect/impact statement therein. Variations in pH are associated with local, regional and seasonal variations... typical observed pH variability is associated with standard deviations from 0.004 to 0.277 and ranges spanning 0.024 to 1.430 pH units. Organisms resident in related ecosystems have adapted to exist within particular natural ranges of exposure; adapted with associated tolerance limitations... your broad brush approach is meaningless to particular organisms already approaching tolerance levels.

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So I've read a number of people make the argument that the following approximating equation is valid:

i = r + μg

where i is the real interest rate, r is the social rate of time preference, μ is the elasticity of marginal utility with respect to consumption (alternatively, it can be thought of as the coefficient of relative risk aversion), and g is the real GDP growth rate.

For a developed country like the USA, the real interest rate has been ~5% in recent decades and the real gdp growth rate is ~2%. If the coefficient of relative risk aversion is ~1, then this suggests that the social rate of time preference is ~3%.

Edit: the equation is unofficially called the Ramsey equation and in the case of population growth gets modified to:

i = r + μg + (μ-1)n

where n is the rate of population growth.

Also, it might be possible to estimate r and μ from a regression of time series data.

Edited by -1=e^ipi

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Okay, I've tried to estimate the rate of social time preference and the coefficient of relative risk aversion from the Ramsey equation using real interest rate of the Federal Reserve 10 year bond rate (https://research.stlouisfed.org/fred2/series/DGS10/#) and the growth rate of real GDP per capita (https://research.stlouisfed.org/fred2/series/A939RX0Q048SBEA#).

I get r = 6.46%, μ = 0.01 for data from 1962-2014.

The value of μ is absurdly low. Perhaps older data is of poorer quality. If I restrict the years to 1990-2014 I get:

I get r = 4.45%, μ = 0.26, which is better.

One issue is that the Ramsey equation is based on the expected GDP growth rate, rather than the actual GDP growth rate. So there is uncertainty in the actual growth rate. However, one can use the previous year's growth rate to predict future growth rate. If I fit the model that the growth rate in a given year is equal to a constant plus another constant times the growth rate in the previous year (i.e. a simple autocorrelation model), I get that the year to year autocorrelation factor is about 0.30, which I can use to estimate expected GDP growth rate for a given year (assuming you did not know the year's growth rate in advance).

Using this as the expected growth rate, and fitting the Ramsey equation to data from 1990-2014 I get:

I get r = 3.15%, μ = 0.89

Which gives reasonable values of both rate of the social time preference and the coefficient of relative risk aversion.

Edit: a 3% discount rate doesn't seem so unreasonable anymore.

Edit 2: Although it only makes sense if you are doing a social welfare approach. If you are doing a more traditional cost benefit analysis, as the social cost of carbon calculations made by the Obama administration do, then a 5% discount rate would make more sense.

Edited by -1=e^ipi

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It shouldn't be a question of the magnitude of change a policy will do, but whether the policy maximizes the well-being of society.

Finally went through this thread... lots of math...

So it sounds like you agree with a Carbon Tax ? I didn't see a % you suggested.

Also, didn't understand why Waldo seemed to scoff at your suggestion ?

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So it sounds like you agree with a Carbon Tax ? I didn't see a % you suggested.

Maybe a global tax of around $15 per metric ton of CO2, which increases exponentially at a rate of about 3% per year, would make sense. This is based on the results of this thread plus the results of Nordhaus' DICE model. What you do with all that tax revenue, I have no idea.

Also, didn't understand why Waldo seemed to scoff at your suggestion ?

Waldo has been convinced since the beginning that I am a 'concern troll' and will never concede a single point.

Edited by -1=e^ipi

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There is a way to try to measure μ from the tax structure of a country. It is quite flawed and by definition doesn't allow for a μ less than 1, and can't deal with individuals getting transfers from the government or a negative tax rate, but basically it suggests that:

μ = log(1 - MTR)/log(1 - ATR), where MTR is the marginal tax rate of a society and ATR is the average tax rate of a society. In another thread, I calculated that for Canada MTR is roughly 55.87% and ATR is roughly 50.31%. This suggests that for Canada, μ is roughly 1.17.

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I looked through the DICE 2013 manual again. Looks like Nordhaus was choosing r and μ to roughly satisfy the Ramsey equation.

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A few additional points about post #92:

- One reason why I should restrict myself to post 1990 data is prior to 1990, the USA central bank had a very different policy compared to the policy today of trying to have stable 2% inflation.

- It might make more sense to look at the 1 year bond rate or even the overnight rate rather than the 10 year bond rate, since 10 year bonds are less 'liquid'. If I do this, the interest rate drops by about 1%, which suggests that my rate of social time preference should be 1% lower than my earlier estimate.

- The bond rate is a nominal value, rather than a real value, so I should take inflation into account. Inflation over the post 1990 era is ~2%.

- However, the prime rate of a consumer at a bank is generally higher than the overnight rate at a central bank or even the rate of a 1 year bond. It probably makes more sense to use the prime rate of a bank since that is closer to what affects consumers. The prime rate is ~2% higher than the overnight rate.

Prime-rate-vs-key-interest-rate.jpg

Put this together and it suggests that it would make sense to use rates of social time preference that are 1% lower than post 93. So for example, if the coefficient of relative risk aversion is 1 then the appropriate rate of social time preference is 2%. And using the same data I get a rate of social time preference of ~1.3% for a coefficient of relative risk aversion of 1.5. This is more in line with the values used by Nordhaus.

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I think those %s for r are all way too low. Something now is worth a heck of a lot more than just 1.01-1.02x the same thing a year from now, in most cases. People have a working life of only ~50 years. Consider buying a house for example, the largest purchase most people will make. Every year you wait, is 1 year less that you will get to make use of that house. That's about a 2% drop in its utility every year. And that's just the real utility drop, then you have to consider factors like impatience, perception that prices of certain goods/services/property will only increase in the future and so it is better to buy sooner, etc.

Going back to the equation you started with, setting μ = 1, the statement that is being made is:

real interest rate = discount rate + growth rate

Is there any real reason why this should necessarily hold true?

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I think those %s for r are all way too low. Something now is worth a heck of a lot more than just 1.01-1.02x the same thing a year from now, in most cases.

Maybe, but then how do you explain the real interest rate being so low?

People have a working life of only ~50 years.

Should the social rate of time preference be roughly the inverse of the working life of a person? Maybe, but then that would suggest a time preference of ~2%.

Going back to the equation you started with, setting μ = 1, the statement that is being made is:

real interest rate = discount rate + growth rate

Is there any real reason why this should necessarily hold true?

Here is a good paper on this: http://www98.griffith.edu.au/dspace/bitstream/handle/10072/21590/52378_1.pdf?sequence=1

Page 17 derives the Ramsey equation. If you want to explain why Ramsey's equation does not hold or why my empirical values are off, I'm open to new arguments/evidence.

Btw, according to the world bank, the average real interest rate of the USA since 2000 was 3% and the average real GDP per capita growth rate was 1%.

This suggests that

discount rate = 3% - μ*1%

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