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The story of one of the largest private wagers on the climate. A real climate bet.

Posted By Joanne Nova On October 14, 2013 @ 1:45 am In Global Warming | Comments Disabled

[See our concise and updating story of the bet here.]

Commenters often ask us if I am prepared to make a bet and put “your money where your mouth is.” The answer is: been there — done that. We (as in David Evans and I) already have and a long time ago. As far as I know, it’s one of the largest private bets going on the climate*. David bet against Brian Schmidt, $6,000 to $9,000, in early 2007 on outcomes over 10, 15 and 20 years.

The bet was made a year before I started blogging. It was literally the first action we took as skeptics (instigated and hammered out almost entirely by David, with my support).  So we have $6,000 exposure — betting that global temperatures would not rise faster than 0.15C per decade, as judged by GISTemp. How are we doing on this bet? Judging by the trend at the moment, pretty well. Brian is still optimistic that he will win on the later outcomes. (This is part of the reason we are particularly interested in trends from 2005, which is when the bet temperatures begin to count.) Kudos to Brian both for being one of the few willing to make a bet, and for being so polite and amiable about it.

Indeed there was a funny moment in the early days of this blog, where Brian Schmidt was so keen to arrange more bets, he turned up here and asked me if I was brave to bet against him. I replied that technically I already had. (He didn’t realize I was married to David Evans, and fair enough, I think that reply was the first time I mentioned it on the site).

The backstory of the bet

In early 2007 when David realized that there was no empirical backing for the theory of man-made global warming, his first instinct was to see if he could place a bet on it. (David says…”It was the hype of 2007, and I figured there must be a way to make money out of this nonsense. A friend made money by shorting the big Danish wind turbine company, and three times!”) Like most self-employed people, we are of the entrepreneurial spirit — we don’t need a boss, and are happy to compete and take risks. To a large extent David’s ability to assess risks, and find “gaps ahead of the market”, is what made this blog possible (though it’s been a very thin margin of late as the Australian gold sector has hit record volatility, but that is another story).

One of the odd things at the time was how hard it was to make a bet. Despite the Great-Global-Mass-of-Consensus that existed in 2007, whereupon everyone (nearly) believed in man-made global warming, it was surprisingly difficult for David to find anyone willing to actually put money down on the theory. I remember him approaching a few who were not remotely willing to take the gambit. Seemingly, everyone who lived off their ability to judge risk (and make bets) was already a skeptic, even then, and so they weren’t going to bet against us. On the other hand, those who passionately believed the theory of man-made catastrophe were seemingly not the personality type to make bets. They fervently believed they could not be wrong, but almost no one (apart from Brian Schmidt) was willing to place a stake.

It was only after David placed the bet in March-April 2007 that he published his reasons why, and was noticed by the skeptical community (specifically the Lavoisier group). Not at all surprisingly, some skeptical groups reached out to say “hello”. Later David scathingly unleashed an op-ed article in The Australian, which drew more attention and seems to have alerted a lot of people. By the end of 2007,  Ray Evans (Lavoisier Group) found himself unable to attend the UNFCCC event in Bali, so he suggested David go in his place. I was a nobody in the climate world,  the silent observer, but I had to be there, so I paid to go; there was too much fun to be had. (“Bali 2007″ where 12 skeptics met 12,000 believers, what more could I ask?) We had Marc Morano, Christopher Monckton, David Archibald, Vincent Gray, Will Alexander,  Craig Rucker (CFACT) and most of the dedicated excellent NZ contingent. It was brilliant. We made good friends.

So much for those big-oil funded denier theories

The history of the bet shows how meaningless the accusations of “influential links to right wing think tanks” are — the cause and effect is completely back to front. We were skeptics before we knew what the Heartland Institute was, before we’d been to an IPA meeting, a CIS conference, or a Lavoisier event — we had already put our own money on the table. (And Exxon-Chevron-Shell-BP were a no-show both before and after.) As it happens, in the history books, Heartland deserve accolades for getting disparate independent thinkers together in the same room, even for a few days, and connecting the volunteers. I will be forever grateful for the chance to meet such upstanding souls of intelligence and integrity as I have met through this debate. It’s a great sieve…

Why did David make the bet?

The bet was announced on April 24, 2007 on a guest post on Brian Schmidt’s blog: Backseat Driving. (David says now, that at the time, it just seemed very curious that everyone commended Brian and himself for having a civil discussion about global warming. He realizes now that it was a warning of just how acrimonious and distasteful the nature of this “debate” was, but back then, he didn’t realize it was so rare.)

The Conditions of the bet

“We have three bet periods -10, 15, and 20 years – and two bets for each period – an even-odds bet and a 2:1 bet in David’s favor. The even-odds bet centers around a temperature increase rate of 0.15C/decade with a 0.02 void margin on either side (bet voids if temps increase between .13 and .17C/decade). The 2:1 bet centers on 0.1C/decade with a .01 void margin. Even-odds bets are for $1,000 each, and the 2:1 bets increase over time, with Brian betting $1,000, $2,000 and $3,000, and David betting half that. Brian’s exposure is $9,000; David’s is $6,000. We’re using five-year averaged Nasa GISS data. More info here.”

Because these are five year centered averages, the first round settles in 2020.

David explained his thoughts (which have developed quite a bit since then) on Brian’s blog on April 30th. Here they are as they were then. They stand the test of time pretty well.  Brian’s thoughts on it are listed on his blog.

David Evans:  “I devoted six years to carbon accounting, building models for the Australian government to estimate carbon emissions from land use change and forestry (Google on “FullCAM”). When I started that job in 1999 the evidence that carbon emissions caused global warming seemed pretty conclusive, but since then new evidence has weakened the case that carbon emissions are the main cause. I am now skeptical. As Lord Keynes famously said, “When the facts change, I change my mind. What do you do, sir?”

In the late 1990′s the evidence suggesting that carbon emissions caused global warming was basically:

1. Carbon dioxide is a greenhouse gas. Proved in a laboratory a century ago.

2. Global warming has been occurring for a century, especially since 1975, and concentrations of atmospheric carbon have been rising for a century, especially since 1975. Correlation is not causation, but in a rough sense it looked like a fit.

3. Ice core data, starting with the first cores from Vostok in 1985, allowed us to measure temperature and atmospheric carbon going back hundreds of thousands of years, through several dramatic global warming and cooling events. To the temporal resolution then available (data points were generally more than a thousand years apart), atmospheric carbon and temperature moved in lock-step: there was an extremely high correlation, they rose and fell together. Talk about a smoking gun!

4. There weren’t any other credible suspects for causing global warming. So presumably it had to be carbon emissions.

This evidence was good enough: not conclusive, but why wait until we are absolutely certain when we apparently need to act now? So the idea that carbon emissions were causing global warming passed from the scientific community into the political realm, and actions started to happen. Research increased, bureaucracies were formed, international committees met, and eventually the Kyoto protocol was signed in 1997 — with the aim of curbing carbon emissions.

And the political realm in turn fed money back into the scientific community. By the late 1990′s, lots of jobs depended on the idea that carbon emissions caused global warming. Many of them were bureaucratic, but there were a lot of science jobs created too. I was on that gravy train, making a high wage in a science job that would not have existed if we didn’t believe carbon emissions caused global warming. And so were lots of people around me; and there were international conferences full of such people. And we had political support, the ear of government, big budgets, and we felt fairly important and useful (well, I did anyway). It was great. We were working to save the planet!

But starting in about 2000, the last three of the four pieces of evidence outlined above fell away or reversed. Using the same point numbers as above:

2. Closer examination of the last century using better data shows that from 1940 to 1975 the earth cooled at about 0.1C/decade while atmospheric carbon increased. But any warming effect of atmospheric carbon is immediate. By 2003 or so we had discovered global dimming, which might be adequate to explain this 35-year non-correlation. But what had seemed like a good fit between recent atmospheric carbon and global warming now looks shaky, in need of the recently-discovered unquantified global dimming factor to explain 35 years of substantial cooling. I reckon the last century of correlation evidence now neither supports carbon emissions as the cause nor eliminates it. Further quantitative research on global dimming might rescue this bit of evidence, or it might weaken it further.

3. As more ice core data was collected, the temporal resolution was improved. By 2004 or so we knew from the ice core data that in the warming events of the last million years the temperature increases generally started about 800 years *before* the rises in atmospheric carbon started. Causality does not run in the direction I had assumed in 1999 — it runs the opposite way. Presumably temperature rises cause a delayed rise in atmospheric carbon because it takes several hundred years to warm the oceans enough for the oceans to give off more of their carbon.

It is possible that rising atmospheric carbon in these past warmings then went on to cause more warming (“amplification” of the initial warming), but the ice core data does not prove that. It could just be that the temperature rose for some other reason, that this caused the oceans to raise the atmospheric carbon levels, and that the increased atmospheric carbon had an insignificant effect on the temperature.

The pre-2000 ice core data was the central evidence for believing that atmospheric carbon caused temperature increases. The new ice core data shows that past warmings were *not* initially caused by rises in atmospheric carbon, and says nothing about the strength of any amplification. This piece of evidence casts reasonable doubt that atmospheric carbon had any role in past warmings, while still allowing the possibility that it had a supporting role.

4. A credible alternative suspect now exists. Clouds both reflect incoming radiation (albedo) and prevent heat from escaping (greenhouse), but with low clouds the albedo effect is stronger than the greenhouse effect. Thus low clouds cause net cooling (high clouds are less common and do the opposite). In October 2006 a team led by Henrik Svensmark showed experimentally that cosmic rays affect cloud formation, and thus that

Stronger sun’s magnetic field

=> Less cosmic rays hit Earth

=> Fewer low clouds are formed

=> Earth heats up.

And indeed, the sun’s magnetic field has been stronger than usual for the last three decades. So maybe cosmic rays cause global warming. But investigation of this cause is still in its infancy, and it’s far too early to judge how much of the global warming is caused by cosmic rays.

So three of the four arguments that convinced me in 1999 that carbon emissions caused global warming are now questionable.

The case for carbon emissions as the cause of global warming now just boils down to the fact that we know that it works in the laboratory, and that there is no strong evidence that global warming is definitely *not* caused by carbon emissions. Much the same can be said of cosmic rays — we have laboratory evidence that it works, and no definitely contradictory evidence.

So why did I bet against global warming continuing at the current rate? Let’s return to the interaction between science and politics.

By 2000 the political system had responded to the strong scientific case that carbon emissions caused global warming by creating thousands of bureaucratic and science jobs aimed at more research and at curbing carbon emissions. This was a good and sensible response by big government to what science was telling them.

But after 2000 the evidence for carbon emissions gradually got weaker — better temperature data for the last century, more detailed ice core data, then laboratory evidence that cosmic rays precipitate low clouds. Future evidence might strengthen or further weaken the carbon emissions hypothesis. At what stage of the weakening should the science community alert the political system that carbon emissions might not be the main cause of global warming? None of the new evidence actually says that carbon emissions are definitely not the cause of global warming, there are lots of good science jobs potentially at stake, and if the scientific message wavers then it might be difficult to recapture the attention of the political system later on. What has happened is that most research effort since 2000 has assumed that carbon emissions were the cause, and the alternatives get much less research or political attention.

(BTW, I quit my job in carbon accounting in 2005 for personal reasons. It had nothing to do with my weakening belief that carbon emissions caused global warming. I felt that the main value of our plant models was in land management and plant simulation, and that carbon accounting was just a by-product.)

Unfortunately politics and science have become even more entangled. The science of global warming has become a partisan political issue, so positions become more entrenched. Politicians and the public prefer simple and less-nuanced messages. At the moment the political climate strongly supports carbon emissions as the cause of global warming, to the point of sometimes rubbishing or silencing critics.

The integrity of the scientific community will win out in the end, following the evidence wherever it leads. But in the meantime, the effects of the political climate is that most people are overestimating the evidence in favor of carbon emissions as the cause of global warming. Which makes it a good time to bet the other way :)

I would like to bet against carbon emissions being the main cause of the current global warming. But I can’t bet on that directly, because all betting requires an unambiguous and measurable criterion. About the only related measure we can bet on is global temperature. So I accepted Brian’s bets about trends in global temperatures over the next 10 to 20 years. Basically, if the current warming trend continues or accelerates then Brian will win; if the rate of warming slows then I will win. Even if carbon emissions are not the main cause of this global warming, I can still lose:

  • Global warming might be due to a side-effect of industrialization other than carbon emissions. Possible causes include atmospheric reactions of industrial chemicals that hinder the rate of low cloud formation.
  • Global warming might be primarily due to a non-human cause, such as something related to the sun or to underground nuclear reactions. If this cause persists over the next 20 years as it has for the last 30 years then I will lose, but if it fades in the next decade then I win.

I emphasize that we are making a bet involving odds and judgment. The evidence is not currently conclusive either for or against any particular cause of global warming. I think that it *is* possible that carbon emissions are the dominant cause of global warming, but in light of the weakening evidence I judge that probability to be about 20% rather than almost 90% as estimated by the IPCC.

I worry that politics could seriously distort the science. Suppose that carbon taxes are widely enacted, but that the rate of global warming increase starts to decline by 2015. The political system might be under pressure to repay the taxes, so it might in turn put a lot of pressure on scientists to provide justifications for the taxes. Or the political system might reject the taxes and blame science for misinforming it, which could be a terrible outcome for science because the political system is powerful and not constrained by truth.

Some people take strong rhetorical positions on global warming. But the cause of global warming is not just another political issue that is subject to endless debate and distortions. The cause of global warming is an issue that falls into the realm of science, because it is falsifiable. No amount of human posturing will affect what the cause is. The cause just physically is there, and after sufficient research and time we will know what it is. Looking back in another 40 years, we will almost certainly know the answer and Brian and I will be in agreement on the issue.

Given that betting is thus possible on this issue, it seems strange that some people who take strong positions and profit by those positions are not prepared to bet even a small amount of their own money. Betting something of one’s own money adds, shall we say, credibility. And people whose own money is at stake try a little harder — a well known advantage of private business over public. A good side effect of widespread betting would be a market in betting that would represent a community-wide best guess. Such markets exists in sports betting, and are the best predictors of game outcomes.

Let’s hope for the planet’s sake that I win the bets :) Meanwhile let’s do more research, and take cheap measures to curb carbon emissions!

– David Evans, April 2007

James Annan (a mate of Brian’s) thought David Evans was wrong, and David replied to it. And well, the debate goes on…

*Other bets? There’s a pair of Russians betting against James Annan for $10,000. And there is the climate bet Al Gore didn’t accept, and appears to be losing.

UPDATE: MV points out there is a charity bet people can join in on at NoTricksZone. Looks very interesting.

**Yes we realize in 2020 dollars that either way, thanks to inflation, the stakes are not as high as they seem.

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