Fixed Proportions And Environmental Projections

A final set of recommendations … today Ron Bailey of Reason is testifying before a Congressional hearing on “The Impact of Science on Public Policy”. His testimony is available at the Reason magazine website, and indicates some general tendencies that I have found in my wanderings through energy and environmental public policy:

What are the lessons to be learned from this record of badly exaggerated predictions of environmental disaster? First, scientists, even well meaning ones, don’t know as much as they think they do. They generally go wrong because they ignore or misunderstand how human beings interact with the natural world and with other people, that is, they are largely ignorant of economics. This ignorance constantly leads them astray because as biologists and ecologists, they tend to think that human beings are merely more clever herds of deer. When deer run out of their sustenance, they die. When human beings begin to run out, they turn their brains and their social institutions to producing more. Science can tell us what may be problems, but it can’t tell us what to do about them. Solutions depend on a deep understanding of human values, politics, and economics. Scientists are no more qualified to pronounce on those topics than their non-scientific confreres and fellow citizens.

Policy makers must be very cautious about rushing to adopt policies to respond to alleged environmental crises. As physicist Edward Teller reminded us: “Highly speculative theories of worldwide destruction—even of the end of life on Earth—used as a call for a particular kind of political action serve neither the good reputation of science nor dispassionate political thought.”

I hope that I have also made it clear that it is very important to hold people to account for their past predictive failures. Also, have patience, the scientific process and peer review will eventually point us to the truth. Finally, it should be clear that environmentalist advocates keep making the same mistake over and over: they constantly underestimate the power of technology and science, and underestimate the power of markets to solve emerging problems.

Arnold Kling also has a post linking this, and adding a phrase redolent of words that have spewed in frustration out of my mouth more than a few times:

they ignore substitution and technological change

OK, when I’ve said them, they’ve had some other adjectives and things involved, but you get the point … which is that humans are unique in our adaptability and our conscious application of our highly-developed creativity to derive novel solutions to complex problems, including resource scarcity. Ecological, biological, and climate models that fail to incorporate this human dynamism fail to have any predictive power.


4 thoughts on “Fixed Proportions And Environmental Projections

  1. Wouldn’t it be wonderful if we could apply the above to our elected representatives and their projections of entitlement and other program costs? Medicare and the new prescription drug “benefit” are two programs which come immediately to mind. Of course, these “predictions” always are always grossly understated. In the immortal words of Everett McKinley Dirksen: “A billion here, a billion there; pretty soon you’re talking about real money.”

    The same is true of Senator McCain’s recent estimate of $20 per family per year for compliance with the CO2 reductions specified in S139. I wonder what McCain would have been willing to bet that compliance costs would have been that low? Hmmm.

  2. If scientists fail in their understanding of economics, what is the record of economists in grasping science — the science behind environmental crises real and alleged as well as the science of environmental change?

    What I’ve seen from the writings of many economists is that their understanding of environmental crises begins and ends with the idea that these can never be as bad as they seem; they don’t so much understand the science of technological change as abide in faith that technological advances will soon overcome all difficulties. In short, they combine complacency about the first with a sucker’s instinct for promoting every crackpot notion masquerading as a technological revolution — like the one about running our houses off the fuel cells in our cars presented here a few days ago.

    By the way, are economists ever held to account for their predictive failures?

  3. I agree with Gordon. A betting market cuts out a lot of the noise and provides a simple feedback mechanism for rewarding good guesses and accurate releases of information. You earn money if you’re right and lose money if you’re wrong.

    However, I should add that even betting with funny money can be surprisingly accurate if some of the traders value that currency. For example, the Foresight Exchange is an excellent example of an idea futures market (which I’ve played for years). It uses play money yet still manages to come up with some interesting guesses for a lot of things.

    There already exist real money betting markets. It turns out that even more important than whether the markets use real money or not, is whether they permit the trader to create their own market. Ie, I want to trade on whether or not China beats the US to the Moon (or Mars). Not many places that you can do that.

  4. The idea that an economist would criticize the predictive failure of ecologists and biologists is the funniest thing I’ve read since I’ve been dead.

    Does anyone remember the name of Irving Fisher? No? Perhaps we could recite together all the predictive failures of Milton Friedman, then? Should he give back his Bank of Sweden Prize? Should the citizens of Peru, Russia etc. be allowed to sue Jeffrey Sachs for malpractice? And what about that Larry Summers/Lance Pritchett piece a few years ago on underpollution?

    Really people; I’d think a little humility for the entire species would be a great start in figuring out novel ways of adapting ourselves to the mess we’ve made and coming up with better theories to explain the causal dynamic of the ecologies we’re embedded in so we can have policies and modes of governance that work *with* the planet’s dynamics rather than in arrogangt indifference to them. But for that I predict you’ll have to ditch mainstream economic theory and all the neomarginalist blather in your flagship journals as well as all the obfuscatory mythology of ‘free’ markets. Markets are expensive; the question is how do we make ourselves and ‘them’ smarter and evolvable……..

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