Your Teacher Said What?!

by Joe Kernen

  Ask any Progressive, and he’ll tell you all about the science of climate change. Men who never took a chemistry class after the tenth grade will bend your ear on convection models, climate forcing, or the medieval warm period. Women who—maybe—took a “science for poets” class in college will go on and on about the kinetic theory of gases, Arctic sea ice, and isotherms. And sooner or later, one of them will mention the Nobel Prize awarded to the Intergovernmental Panel on Climate Change and (of course) former vice president Al Gore.

  Now, I don’t mean to sound like a science snob, but before I joined the investment world I spent a good many years in laboratories working with and for some of the world’s best experimental researchers. And I do know that anything as complicated as the world’s climate is not the kind of thing that can be understood by watching a one-hundred-minute-long documentary, even if it has Al Gore in it. (I also know one thing for sure about science: It isn’t about “truth,” inconvenient or not. There is no such thing as “settled science.” Or “incontrovertible evidence.” If anyone tries to tell you there is, feel free to back away, slowly, with your hand firmly on your wallet.)

  Even so, it isn’t really the science of climate change that generates all the controversy. The thing that matters—that really divides Progressive thinking from, well, common sense—is climate policy. More specifically, the economics of climate policy. And this is why the world’s climate looks so much different from the New York Times offices on Forty-second Street than it does less than five miles south, at the Wall Street Journal.

  Take the villainous substance that is at the heart of all climate change debates: carbon dioxide, or CO2.42

  Carbon dioxide is not exactly an exotic substance. Almost every organism on the planet either produces it or consumes it; the cycle of life itself depends on plants turning CO2 into carbohydrates and animals turning carbohydrates back into CO2. It’s not much of a stretch to say that without carbon dioxide, life as we know it wouldn’t exist.

  “Blake?”

  “Yes, Dad?”

  “What do you know about carbon dioxide—CO2?”

  “Like in the song?”

  “Song?”

  “The song we learned at summer school: ‘Unlike me and you /

  Plants need CO2 / That lets off oxygen / That keeps us from turning blue / Every plant can do this fundamental process / And we can call this photosynthesis.’ ”

  “Yes, Blake. Just like that.”

  Life depends on CO2—oops, I meant to write carbon—for more than just photosynthesis. Every instant, the sun radiates a huge amount of energy, some of which hits earth. That energy comes in different flavors: the kind we can see—visible light—passes through CO2, but a large amount of energy that we feel, mostly in the form of heat, is absorbed. The result, due to this “greenhouse effect,” is that earth is warm enough to support life. For living things, carbon dioxide is, by any measure, a good thing.

  Now, it is certainly possible to have too much of a good thing, and the entire climate-change controversy is built around the contention that CO2 is a really good thing when its percentage of earth’s atmosphere is 0.03 percent but a disaster when it is 0.04 percent. Accept this, and you have joined the “consensus.”

  Here’s how you get there:

  Step 1: Carbon dioxide is a “greenhouse” gas. No argument.

  Step 2: Industrial civilization has produced more atmospheric carbon dioxide than would have been present if, for example, humanity were still dependent on muscle and waterpower. Since CO2 and water are the result of the chemical reaction that occurs whenever a fuel that contains carbon is burned, also no argument.

  Step 3: Globally, temperatures are rising. Plenty of argument here, mostly about the magnitude of the rise. It turns out to be very hard to measure worldwide temperature, since it can, for example, be hotter in one place this year than it was last year, while cooler elsewhere. However, for the sake of argument, let’s accept that it is rising.

  Step 4: It’s rising a lot. This is where the argument starts to show some tatters; the Intergovernmental Panel on Climate Change, which is the body usually used to “prove” the dangers of global climate change, estimates that if current trends continue, the worldwide temperature will rise somewhere between three and five degrees Fahrenheit by the year 2100. This matters—but how much? In the long history of the planet, this is barely noticeable (and even in the northeastern United States, where the Kernen family lives, a December day that is 45 degrees rather than 42 degrees isn’t going to make headlines).

  Also, while such a worldwide increase in temperature does have some serious costs attached to it, mostly in the form of rising sea levels, it also has some benefits. Places way too cold for agriculture today would be available, and those doomsayers worried about feeding a few billion people in the face of a “climate disaster” should also know that crop yields are expected to increase by more than 10 percent because of increased amounts of carbon dioxide—which plants “breathe”—in the atmosphere.

  Step 5: We need to stop the temperature rise, no matter what the cost. This is where the argument really unravels. That predicted temperature increase—from the IPCC, remember—has been estimated to cost a bit more than $20 trillion, which is a huge sum of money. But it’s a huge sum of money a hundred years from now. While the cost of avoiding that temperature rise is the equivalent of $14 trillion right now.

  Think about it. Pick door number one, and you get to spend $14 today. Or select door number two, and spend $20 a century from now, when you (or rather, Blake’s great-grandchildren) will be ten times richer than you are today.

  Behind door number one is the New York Times.

  Take, for example, the small matter of whether CO2 is a dangerous substance. Back in 2007, a federal judge ruled that the Environmental Protection Agency was required to decide whether carbon dioxide was something that “threatens public health and welfare.” The “endangerment finding” that resulted was tabled by the Bush administration but greeted by the New York Times with the kind of enthusiasm usually reserved for the discovery of a winning lottery ticket in your sock drawer.

  Here’s what the Times editorial page had to say about the endangerment finding: The mere prospect of regulation has inspired something approaching panic. . . . The House, in an otherwise admirable climate change bill, included a provision restricting the E.P.A.’s authority to control emissions.

  This is utterly wrongheaded. The Supreme Court ruled two years ago that the E.P.A. has clear authority under the Clean Air Act to regulate greenhouse gases. It should be retained as both a goad and a backstop.

  There is one obvious way to keep the E.P.A. from having to use this authority on a broad scale. And that is for Congress to pass a credible and comprehensive bill requiring economy wide cuts in emissions.

  “The Endangerment Finding,” New York Times, December 8, 2009

  This has to be read twice to fully appreciate it: The United States House of Representatives—which was, in 2009, still firmly in the hands of the Democratic Party—having already voted to restrict the EPA’s authority, is told by the Times that the best way to keep the EPA from requiring massive cuts in CO2 emissions is for Congress to require them first.

  “Blake?”

  “Yes?”

  “What would you say if I told you that your school wanted to require all fifth graders to go to sleep at seven thirty?”

  “That’s not my bedtime!”

  “I know. But what if Mommy and I told the school that we didn’t want them to decide about your bedtime, and they told us that the best way to keep them from setting bedtime at seven thirty was for us to do it.”

  “I’d say that was blackmail.”

  The Wall Street Journal agrees:This reckless “endangerment finding” is a political ultimatum: The many Democrats wary of levelling huge new costs on their constituents must surrender, or else the EPA’s carbon police will inflict even worse consequences.

  “An Inconv
enient Democracy,” Wall Street Journal,

  December 8, 2009

  Progressives are very comfortable using the courts and the EPA to threaten Congress into transforming the entire American economy—and make no mistake about that: everything that produces or demands power depends on burning carbon-based fuels—partly because of their fundamental inability to compare costs and benefits: Global warming is just bad, so asking how much it costs to eliminate it is like asking how much you would spend to save a life. But even more so, I think, it’s their love for solutions that have the endorsement of elites—in this case, the scientific community.

  The elevation of climate scientists—the right climate scientists, of course—to the position once occupied by high priests of mystery religions is sort of understandable. It’s hard enough to find people with a basic understanding of physics and chemistry, to say nothing of the interdisciplinary clutter of experts needed to investigate an area like climate. Add to that the fact that none of these people’s conclusions can be experimentally tested and must therefore be made using computer models and historical data (this is also true of economics— whose track record in predicting booms and busts is not exactly encouraging) and you have a very nearly perfect storm: a complicated scientific subject in which even professionals are compelled to rely on other professionals working in fields that they don’t understand; in which no one can test hypotheses experimentally; and in which conclusions depend on tiny changes in the underlying data. High priests never had it so good.

  On the other hand, one reason that science gets such respect in a modern technological society is the belief that it is performed by honorable people who report things the way they see them. This doesn’t mean that we have to count on any individual scientist to find the holes in his or her pet theory; but it does mean that we can rely on the entire community of scientists in a given field to be critical of themselves and to report their findings honestly.

  Uh-oh.

  The scandal that would, soon enough, be called Climategate broke in November 2009, when a computer at the Climate Research Unit (CRU) at the University of East Anglia was hacked, and thousands of e-mails and documents written by the world’s best-known, and most alarmist, climate scientists appeared on the Internet. The portrait they painted wasn’t exactly the picture of honesty. Phil Jones, director of the CRU, wrote (about a request for the raw data on which he based his predictions), “I think I’ll delete the file rather than give it to anyone.” Writing to Michael Mann, a like-minded researcher at Penn State, he said: “Mike, Can you delete any e-mails you may have had re AR4 [the IPCC’s Fourth Assessment Report]?” Writing to Eugene Wahl of the National Oceanic and Atmospheric Administration: “Try and change the received date! Don’t give those skeptics something to amuse themselves with.”

  Just destroying and withholding data wasn’t enough for Professor Mann, who was so disturbed by a critical article appearing in one journal that he suggested, “I think we have to stop considering Climate Research as a legitimate peer-reviewed journal. . . . Perhaps we should encourage our colleagues in the climate research community to no longer submit to, or cite papers in, this journal.”

  The Wall Street Journal, quite rightly, saw this as a huge problem:The response from the defenders of Mr. Mann and his circle has been that even if they did disparage doubters and exclude contrary points of view, theirs is still the best climate science. The proof for this is circular. It’s the best, we’re told, because it’s the most-published and most-cited—in that same peer-reviewed literature. The public has every reason to ask why they felt the need to rig the game if their science is as indisputable as they claim.

  “Rigging a Climate Consensus,” Wall Street Journal,

  November 27, 2009

  Not, however, the New York Times:It is important that scientists behave professionally and openly. It is also important not to let one set of purloined e-mail messages undermine the science and the clear case for action, in Washington and in Copenhagen.

  “The Climate Change E-Mail,” New York Times,

  December 6, 2009

  And when, in July 2010, Professor Mann—the creator of the famous “hockey stick” graph, which showed a steady planetary temperature over a nine-hundred-year period, followed by a sudden upward turn beginning with the Industrial Revolution—was, in the words of the New York Times, “exonerated” by his university (he wasn’t; he was vindicated on three of the four charges—mostly on the grounds that even though Phil Jones had clearly asked him to destroy a raft of e-mails, there was no evidence that Dr. Mann ever got around to it), the Times wrote,Perhaps now we can put the manufactured controversy known as Climategate behind us and turn to the task of actually doing something about global warming.

  “A Climate Change Corrective,” New York Times, July 9, 2010

  In other words, a university panel proved that Professor Mann didn’t manufacture data by finding a “consensus” among other climate scientists on the same data—published in the journals that Professor Mann and his colleagues in the climate science community agreed not to boycott.

  It took the Wall Street Journal to reveal the reason why:Consider the cash that Michael Mann . . . has helped pull for Penn State University. In 2000, before Mr. Mann joined the faculty, the university banked $20.4 million in research funding for environmental sciences. By 2007, two years after he came on board, Penn State counted more than $55 million a year for environmental research, much of it government funded. . . . The gusher of money that has flowed into climate research does not, by itself, impeach the conclusions reached by the scientists. But it does make clear just how much their professional fortunes became tied to the notion of climate catastrophe.

  “The Economics of Climate Change,” Wall Street Journal,

  November 30, 2009

  Maybe, in the end, climate scientists really do know something about economic costs and benefits—to themselves, anyway.

  What they don’t know is the danger of “consensus” science. When Blake was taking a science class during the summer of 2010, one of her projects was a simple lab on cell biology, describing what she saw through a microscope. I asked her whether anyone had seen anything different, and she told me that was impossible: Everyone needed to see the same thing when they looked through the microscope. If anyone saw something different, they were just wrong. They had to be.

  On climate change, the real difference between the Times and the Journal wasn’t that they disagreed over science, or even policy. Reading the two papers’ editorials with Blake in mind, I realized that what separated them was that the Journal took the side of optimism: that the best way to deal with the costs of global climate change, whatever they were, was to increase prosperity. The Times stood for fear, advocating just about anything that would even symbolically reduce the world’s production of CO2—if they had been fully implemented for ninety years, the Kyoto Protocols, a favorite of the New York Times editorial board, would have reduced global temperatures by only a tenth of one degree Fahrenheit—at a cost of $250 billion a year.

  If you want your children to fear the future, let them read the Times editorials. Otherwise, well, you get the point.

  I’ve noticed that people tend to believe that if there must be legislation, the legislators should be people like them. Politicians already think that politicians do a pretty good job (though, as the 2010 elections showed, nonpoliticians also think they would do a better one); scientists would like to see more scientists writing laws and statutes. If you know any doctors, you will, sooner or later, hear one of them bemoan the fact that “the world is run by people who couldn’t get into medical school.” And this is why, against all evidence, movie stars continue to think they have something useful to say about legislation to reduce world hunger, for example.

  So it isn’t actually all that surprising that business professionals in general, and those in the finance industry in particular, thought that they might have done a better job at financial regulatory refo
rm than the United States Congress managed to do with the Dodd-Frank Wall Street Reform and Consumer Protection Act.43

  The financial regulatory reform package was a predictable response to the crisis of 2008 and subsequent recession. The original objectives of revising America’s financial regulation laws were1. to consolidate and streamline the different agencies that were already responsible for regulating banks, mortgage companies, the stock market, and so on;

  2. to create a new agency responsible for the protection of consumers of financial products; and

  3. to restock the toolbox regulatory agencies use to deal with financial crises.

  In the end the act created not just a new Bureau of Consumer Financial Protection but also a Financial Stability Oversight Council and an Office of Financial Research. If this seems contrary to objective number one, welcome to the world of regulation and please go to chapter 7.

  The overriding goal was to create an early-warning system for any problems that presented a risk to the entire financial system (rather than to any one institution) and to avoid the risk of taxpayers having to bail out banks, insurance companies, and investment firms that had become “too big too fail.” The attempt, according to the summary prepared by the law firm Davis Polk on July 21, 2010, resulted in 243 new rules, required the production of 67 separate studies, and mandated the regular publication of 22 different reports.

  And because this massive new law was written by politicians, there’s a lot more politics in it than economics (or common sense). Consider, for example, the case of Fannie Mae and Freddie Mac—the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation—two enterprises chartered by the federal government to promote loans for the purchase of homes.