Friday, 21 December 2012

Fears of Climate Change

Matt Ridley has attracted some attention with his article in the Wall Street Journal Cooling Down the Fears of Climate Change.  It's not a balanced presentation - for example he repeats the factoid that "global temperatures are no higher than they were 16 years ago" without mentioning that the two warmest years on record were 2005 and 2010.  But the main interest is his account of some work by Nic Lewis, not yet published as a scientific paper, but available on climate-dissenting blogs.  Lewis uses an energy balance method introduced ten years ago by Gregory et al. to get a median climate sensitivity of 1.62K, with a 5%-95% confidence interval of 1.03‑2.83K. That is he predicts that a doubling of atmospheric carbon dioxide should lead to an global average temperature increase of 1.62 degrees, with considerable uncertainty around that number.

The idea behind the method is that in equilibrium, there's a balance between radiation losses from the earth, and the radiation it absorbs from the sun.  When something happens to disturb this balance - a forcing - the earth's surface temperature has to change to compensate - radiation increases with temperature.  However, it will take some time for the earth to heat up (or cool down) to reach that temperature, in the meantime there will be a heat uptake which must be included in the calculation if one wants to use current data to estimate an equilibrium effect.  One selects two time periods as far apart as practicable, takes an estimate of changes in the various forcings, subtracts an estimate of changes in heat uptake, and divides by the resulting temperature change to get the sensitivity to net forcing.  Then one scales the result to the estimated change in forcing for a doubling of atmospheric carbon dioxide.

Lewis acknowledges in the comments under his article that this is estimating an Effective Climate Sensitivity rather than an Equilibrium Climate Sensitivity, but it's not clear to him or me why these should be much different (I could be wrong).

When Gregory tried this method, he got a median sensitivity of 6.1K, with a confidence interval stretching down to negative numbers 1.6 K and up to infinity - the method was interesting, but the results were useless did no more than establish a lower bound.  Lewis says he can do much better, taking his parameters mainly from the IPCC's draft of its forthcoming Fifth Assessment Report (AR5), which was recently leaked by a reviewer (anyone could sign up as a reviewer).

The report gives the IPCC's current estimate of sensitivity: I quote from page SPM-11 of the Executive Summary (the whole leaked report can conveniently be accessed on scribd)
Equilibrium climate sensitivity is likely in the range 2°C–4.5°C, and very likely above 1.5°C. The most likely value is near 3°C. Equilibrium climate sensitivity greater than about 6°C–7°C is very unlikely
So Lewis's range overlaps a lot with the IPCC's range, albeit the range is obtained by allowing a model's parameters to vary within their individual error bounds, and the choices that give the low estimates in the IPCC's calculation may be inconsistent with the choices that give the high estimates in Lewis's.

I had a look at the parameters Lewis uses; one section in particular caught my eye, discussing the heat uptake parameter.  (OHU is Ocean Heat Uptake, SOD is Second Order Draft - the leaked version.)  To make it easier to read I've omitted the error analysis:
I estimate 2002–2011 OHU from a regression over 2002–2011 of 0–2000m pentadal ocean heat content estimate...the trend equates to 0.433 W/m², averaged over the Earth's surface...There is no alternative to using GCM-derived estimates of OHU for the 1871–1880 period, since there were no measurements then. I adopt the OHU estimate given in [Gregory 02] for the bracketing 1861–1900 period of 0.16 W/m², but deduct only 50% of it to compensate for the Levitus et al. (2012) regression trend implying a somewhat lower 2002-2011 OHU than is given in the SOD...That implies a change in OHU of 0.353 W/m²... Although Gregory 02 ignored non-ocean heat uptake, some allowance should be made for that and also for any increase in ocean heat content below 3000 m. The (slightly garbled) information in Section 3.2.5 of the SOD implies that 0–3000 m ocean warming accounts for 80–85% of the Earth's total heat uptake... Allowing for all components of the Earth's heat uptake implies an estimated change in total heat uptake of 0.43 W/m²...Natural variability in decadal OHU should be the counterpart of natural variability in decadal global surface temperature, so is not accounted for separately.
The bit about deducting only 50% of the uptake in the reference period is hard to understand, and it's odd that he refers to the SOD value without specifying what it is.  And Lewis doesn't say a word about disagreeing with SOD on this.  So I went and looked up what SOD has to say.  The relevant section is Box 3.1 on page 3-11 of Chapter 3:
It is virtually certain that Earth has gained substantial energy from 1971–2010 — an estimated first-difference change of 273 [194 to 353] ZJ (1 ZJ = 1021 J), with a rate of 213 TW from a linear fit over that time period (Box 3.1, Figure 1). From 1993–2010 the estimated energy gain is from a first difference is 163[125 to 200] ZJ with a linear rate estimate of 27 TW. Ocean warming dominates the total energy change inventory, accounting for roughly 93% on average from 1971–2010. Melting ice (including Arctic sea ice, ice sheets, and glaciers) accounts for 3% of the total, and warming of the continents 3%. Warming of the atmosphere makes up the remaining 1%. The ocean component of the 1993–2010 rate of energy gain is 257TW, equivalent to a global mean net air-sea heat flux of 0.71 W m–2, and that for 1971–2010 is 199 TW, implying a mean net air-sea heat flux of 0.55 W m–2
The 27 TW given for the 1993-2010 rate is an obvious typo.  It's easy to convert from joules to watts (a terawatt is 1012 watts): one divides by the number of years then divides by the number of seconds in a year. That tells me that the right number is 287 TW: I suppose the middle digit has somehow been dropped.

It's also easy to convert from watts to watts per square metre, taken over the whole of the earth's surface, by dividing by the earth's surface area.  That gives 0.42 W m–2 as the average rate for 1971-2010, very close to Lewis's figure.  But he ought to be using a figure for 2002-2011, and the rate has increased sharply during the period - I reproduce the chart from page 3-66 of SOD Chapter 3
Reading off the chart, I estimate heat uptake in the last 10 years to have been 113 ZJ, corresponding to 0.70 W m-2. Subtracting the whole (rather than half) of estimated uptake in the reference period, and redoing the calculation using the rest of Lewis's numbers unchanged, I get a median sensitivity of 1.74 K instead of 1.62 K.

My guess is that Lewis has tended to choose parameters which nudge his estimate downwards, and has been somewhat optimistic in his error estimates.  But even with consensus parameters, this method will produce a significantly lower median estimate than the IPCC's.  It seems worth seeking to understand why.

James Annan comments
I think a lot of what Nic Lewis says seems reasonable, though I also suspect that some of his choices will have served to underestimate sensitivity somewhat. Don't forget, "the ipcc" does no research to estimate sensitivity, they only summarise the literature which generally lags the latest evidence.

Thursday, 6 December 2012

Wage and Profit Shares, and Coffeehouse Chains

Some time ago, I posted a chart looking at how UK GDP divides up (I wasn't the first).  Chris Dillow has done the same.  He observes that "The wage share was unusually high in the mid-70s, and the profit share unusually low. It is, therefore a little misleading to speak of changes in income distribution since the mid-70s. Profits then were so low that they either had to rebound or capitalism would have collapsed." and "Since the mid-90s, the wage share has risen and profit share fallen."

Here's my almost identical version of Dillow's chart.  It's perhaps a trifle inconsistent of him to complain about the use of the mid-70s as a start point when his choice of the mid-90's is also unrepresentative:

My attention was drawn to this by a commentator on Richard Murphy's site, who had the temerity to cite Dillow's analysis that "Since the mid-90s, the wage share has risen and profit share fallen".  Murphy's reply is customarily brusque "Just add a trend line I suggest. Do and it glaringly obvious the claim he is making is just wrong" (and gets ruder after that).  He's making a testable claim, and I like to think of myself as an obliging sort of a chap, so I asked Excel to draw trend the lines.  In an attempt to be neutral I chose Q1 1996 as "the mid-90s", without looking at the data first.  Here's the result:

If drawing trend lines makes anything obvious, it's that since the mid-90s the wage share has risen and the profit share has fallen, just as Dillow asserted.

In turn, my attention had been drawn to Murphy by his brief appearance on the radio news, complaining that Starbucks' concession on corporation tax won't do.  He's right.  My brief thoughts on the issue are:
  • Starbucks is indeed gaming the system with its royalty payments.  It's obviously charging its UK operation more royalties for the brand than the brand is worth.  Because what it's worth is an amount that would allow the UK operation to make a reasonable profit, on which it would have been paying corporation tax.  (Its internal trade in coffee beans may also be at the wrong price.)
  • There's no reason to expect companies to follow any particular moral code of their own accord - they're in business to make money, not to gain your moral approval.  If you want to influence the moral behaviour of a company, you have to take action as a potential customer or employee to make it financially worth its while.
  • So boycotting Starbucks is the right thing to do if you want it to pay more tax.  (On the other hand, if you thoroughly approve of its tax affairs, you should show your appreciation by buying more coffee from it.)
  • If Starbucks is to pay more tax, it should be on the basis of a reasonable and open calculation of UK profits, not a number it's pulled out of the air to tempt the missing customers back.
  • I don't like Starbucks' product.  Caffè Nero is my coffee chain of choice (I know nothing about its tax affairs).
  • I'd tell you where to buy the best beans, but the shop's too busy already, and its business model won't scale.

Update: I may have been too quick to agree with Murphy.  Starbucks' UK managing director says they are going to pay UK corporation tax based on not paying royalties, and on buying coffee beans at cost.