Friday, December 11, 2015

Not a Conspiracy

Someone on the FaceBook Climate Change group asked a reasonable question:
I'm trying to understand this big conspiracy everyone keeps hinting at, but never explains, now lets say AGW is a complete Hoax and Obama has somehow tricked the world to help him to trick americans to pay more taxes and put solar panels on their roof, now can someone explain how this evil conspiracy works, like who wins,who profits from this con, , what is the end game...?
I thought my response might be of interest to readers here:

"Conspiracy" is too simple. There are a variety of reasons why different people wildly exaggerate the implications of AGW. They include:

Politicians in poor countries who want to use claims of harm to their countries to get rich governments to give th
em money.

Politicians in rich countries who want arguments for subsidizing firms run by their supporters, passing regulations that give them power, collecting taxes, and a variety of other things.

News media that want to get readers. "Global warming is going to flood New York City" is a better story than "Global warming has raised sea levels by eight inches over the past century and might raise them by another couple of feet by the end of this century."

People who want to pretend to themselves and others that they are part of the intellectual elite, know important things that others deny.

People who like imagining catastrophe. You see the same pattern on the other side of the political spectrum with survivalists, and more generally with collapse of civilization science fiction.

The combined effect has been to convert positions on global warming from a scientific dispute to an identity marker for ideology. You can see the effect reading this group--people keep wandering away from climate questions to gun control or whether Obama is good or bad or other things linked to ideology.

Once you have that linkage, there is strong pressure on either side to take more extreme positions. Believing that global warming is a problem marks you as a loyal member of the blue tribe. So believing that it is a really big problem marks you as a very loyal member, whereas suggesting that it might be a minor problem marks you as a possible traitor to tribal loyalty. Similarly on the other side. Doubting the catastrophic story is all very well--but it's a stronger signal of red tribe loyalty to claim that warming is a fraud due to doctored figures, or that you have a scientific proof that AGW is wrong, or ... .


At 12:00 PM, December 11, 2015, Anonymous Anonymous said...

Great summary

At 12:34 PM, December 11, 2015, Blogger Nicolás Ferreira said...

I know you have somewhat answered this in a recent post, but I can't for the life of me fathom why you would engage in internet debates on topics such as this. It's not like you're ever going to change anybody's mind.

At 2:06 PM, December 11, 2015, Blogger August said...

Computer modeling has also been oversold. It is as if people are treating the models themselves as science and giving them the same gravitas one should to an actual test. I've heard they even use them in dna research because testing against real dna is so expensive. Of course, there is a high error rate, and much that we think is true now will likely be revealed to be nonsense later.
Of course, many keeping point to the failure of the model to accurately predict, but to the faithful, this seems to mean nothing.

At 3:07 PM, December 11, 2015, Anonymous Anonymous said...

Nicolás Ferreira, one has to wonder why *you* keep asking that question, indeed why you keep reading David's blog. Clearly you're not convincing him to refrain (thankfully, as his thoughts on this, and other subjects, are usually worthwhile).
Oh, and BTW, I think you underestimate the power of reason to persuade.

At 6:11 PM, December 11, 2015, Blogger Lliam said...

Great summary. Very plausible mechanism. What sort of response does she get?

At 10:43 PM, December 11, 2015, Blogger Roger said...

A great (and criminally insane) genius once explained this: "22. If our society had no social problems at all, the leftists would have to INVENT problems in order to provide themselves with an excuse for making a fuss."

At 3:25 AM, December 12, 2015, Blogger Antisthenes said...

If there is a conspiracy was it not started either by design or mistake by environmentalists. A rather vocal and aggressive bunch who revere nature with an intensity that is similar to that of religious fundamentalists. When the potential for advantage was realised by others it then became another mainstream belief that was more provable than say the existence of a god or gods but not by much. However like other beliefs a whole industry was set up around it and like others makes some rich and powerful and some a new source of income.

At 5:27 AM, December 12, 2015, Anonymous Colombo said...

I like imagining anastrophes, not catastrophes.
For example, I imagine a world where people choose to not lie.

But I wonder if what people fear is what they really desire. It is obvoius that many of those so called christians who spend lots of time fearing the end of the world, actually desire the end of this world and all the bad things in it. What if global warmers who fear the destruction of the Holy City of New York secretly desire to see it?

At 7:09 AM, December 12, 2015, Anonymous Anonymous said...

Passengers riding the same bus does not mean there is a conspiracy; they all have different motives and some different destinations. The bus happened to be a convenient passing vehicle to get aboard.

At 1:17 PM, December 12, 2015, Blogger Gordon said...

David, why do you want the other side to win?

At 4:10 PM, December 12, 2015, Blogger David Friedman said...

Gordon: Are you asking why I am opposed to policies designed to hold down CO2 in order to reduce global warming? For my views on the subject, search the blog for posts containing the word "warming."

If that isn't what you mean, explain.

Colombo: I think many of the alarmists desire catastrophe in one sense but not another. They want to believe that unchecked human action will have terrible results, because at some level they see nature as good, man as bad, and in many cases also see capitalism as bad. But they don't want those terrible results to happen--they want them to be prevented by good, wise people such as themselves restraining the evil impulses of their fellow men.

At 9:16 PM, December 12, 2015, Blogger Gordon said...

Sorry, David, I thought my ambiguous "the other side" marked my comment as humor. Your comment failed to be intensely partisan by granting that both red and blue could have the same motivation, so...

But I think that is only the second one I've gotten past you in 20 years. ;-)

At 12:28 PM, December 14, 2015, Blogger Josiah Neeley said...

Seems like some people might also have incentives to minimize the implications of AGW too.

At 1:04 PM, December 14, 2015, Blogger Bravin Neff said...

Imagine someone spent an entire lifetime arguing capitalism only produces net positive results, and someone else comes along with a decent argument that, to date, carbon-based capitalism has produced a bigger market failure than just about anything anyone can think of. There might be an incentive to downplay the latter, or claim the effects are so uncertain their policy implications remain unclear.

Personally, if I were an AGW-denier, I would prefer an alternative strategy. The idea of AGW producing a market failure only makes sense when you consider future generations as if they had moral relevance today. Then, inspired by the parfitian repugnant conclusion, one can still conclude that *even with* some alleged greater future misery caused by AGW, the outcome is still net positive, owed to the future generations existence *at all.* This type of conclusion never seems to sit well with anyone, but its hard to argue against without requiring some sort of declaration future generations are owed *something* - which, while certainly intuitively plausible to most (even to libertarians), isn't easy to defend.

There just aren't enough AGW-deniers based on "repugnant conclusion" grounds.

At 8:19 AM, December 15, 2015, Anonymous Anonymous said...

1. Capitalism is a human activity.
2. Humans are made with carbon.
3. Capitalism is made with carbon.

Can humans cause a global cooling? If they can cause warming, it doesn't seem wrong to assume that they can also cause cooling. Is it possible for them to cause warming or cooling with economic activities different of crony capitalism or free-market capitalism? We know that in Communist and Socialist regimes some people have died of hypothermia, caused by scarcity, caused by the government. And China is a Communist regime, and it is warming the planet, right? Or did China only started the dreadful warming once they rejected communism and switched to centrally planned capitalism?

What would happen if so called Capitalist countries teamed up to wage a war against the pollutant communist and socialist regimes of the world, not because of ideology, but because of global warming? "Hey, stop selling us that damned oil! You are killing the planet! Think of the children, you heartless bastards!"

The communists and socialists would say "You are killing our people by not buying our production! You greedy capitalists! Give us money so that we can fight the oligarchy and the plutocracy! Pigs!"

Marijuana is still illegal. And cocaine and heroine. Yet, eating meat is still legal (if you can afford it). Look, Mrs. Government: If you want to make eating meat illegal, then you have to give something in exchange. Same with cars and gasoline. Ban cars, but give some freedoms to the people: open borders, free markets, competing currencies, zero income tax, zero inheritance tax. If you don't want to give in any of these, just shut up with the contamination and the warming.

At 10:51 AM, December 15, 2015, Anonymous Anonymous said...


"Or did China only started the dreadful warming once they rejected communism and switched to centrally planned capitalism?"

Exactly. Capitalism is exothermic, communism is endothermic.

At 2:49 AM, December 16, 2015, Blogger James Picone said...

@Bravin Neff:
I expect to live long enough to see significant negative effects from CO2 emitted today. Arguably I already have - we've had some very nasty heatwaves, bushfires, droughts, floods and storms in Australia over the last couple of decades, and global warming has contributed to them to some (very difficult, possibly meaningless to quantify) degree.

The statement "Capitalism has caused X bad effect" does not imply "Therefore, we should be communists". Even if you take it as a statement that we should do something other than capitalism, it's a fallacy of the excluded middle.

While I'm sure the nice people from The Socialist Alternative think global warming is an argument for socialism, this lefty thinks it's an argument for regulation (that is, capitalism is great, but it has a particular failure mode around particular kinds of negative externalities, and regulation can help with that without killing the goose).

At 6:53 AM, December 16, 2015, Blogger Bravin Neff said...

@James Picone. Agreed on every point.

At the macro level, economic prosperity, regardless of school, has baked into it the assumption of continuous growth. There are no alternatives to economic management that does not assume this. Lest the economy become a zero sum game, which to date has meant recession or depression.

Continuous growth means consumption follows a function that is exponentially increasing, and this at bottom means fossil fuel consumption also increases exponentially. This is what is behind AGW, and without some unexpected natural-miraculous mechanism that counters it, as long as economic prosperity is pursued, AGW is guaranteed to go up.

I am not aware of any free market solutions that come even remotely close to solving this problem, but I see lots of government nudges-subsidies-taxes-theft-whatever-you-want-to-call-it trying to steer the ship. At the level of the firm, the speed the return on investment can be expected needs to fall within a time horizon it considers acceptable. Thus far, investing tons of money into some gizmo that will lower the likelihood by 10% of some other person's great-great-grandkid getting conscripted into some army to fight some population-migration war of drought-refugees fleeing famine, hasn't motivated very many. But give them a couple tax exemption points, and now you're talking.

Denying the problem is way easier, certainly convenient, and I suppose that provides enough incentive to any pro-capitalist to find irresistible (but waiving the repugnant conclusion flag would be downright ballsy).

At 3:50 PM, December 17, 2015, Blogger Tibor said...

Bravin: It is nigh impossible to argue with someone who is convinced that you have ulterior motives behind your arguments and so your arguments do not matter. But let's suppose that indeed David or other people arguing for the same position indeed do have ulterior motives...well, what does it change, really? If Mao or Hitler proved the Riemann's hypothesis it would still be a valid proof, the virtuousness or vileness of the author is irrelevant. One should address the arguments, show where they are wrong instead of playing psychologist.

Now, it is true that if someone who has an axe to grind presents you with some data or something he claims to be a fact then you might want to double-check that. But an argument either works or does not, you can see it in its fullness and as long as it does not stand on data or stands on data which can be easily checked to be true or false, then there is no point in analysing the personality of the author (except for when you want to avoid addressing the arguments).

I wonder where you get the "AGW-deniers" from - David's position is more or less "AGW is very likely real, probably not as big a problem as a lot of people make it and there is a chance it is not even on net negative". It is also clear that this is his opinion from all his posts about global warming. How is that "AGW-denial" unless you simply read what you want to read?

At 6:32 AM, December 18, 2015, Blogger Bravin Neff said...


I find your post ironic because your point against reading ulterior motives behind someone's arguments was the exact point I was attempting to make, albeit in a roundabout and tongue-in-cheek sort of way. Tell me David's post is not one big reading of ulterior motives causing people to exaggerate things, indeed he tells you it is. If what one reads into the AGW-is-bad crowd is personal incentives and things not explicitly claimed, it is manifest that game can be played any way you like. For example, any ultra-pro-capitalist who is suspicious of critical talk of capitalist behavior at the bottom of AGW can likewise be suspected of ulterior motives. I would add the link there is probably the shortest one.

My statement about AGW deniers was just a general loose talk. I am familiar with David's position and have read his past posts on it, and was not specifically referring to him as an AGW denier, though I can see my post being taken that way.

At 10:31 AM, December 18, 2015, Anonymous LH said...


While David's post did address motivations in holding a viewpoint other than direct assessment of an argument, he mentioned, as he has before, that members of the right and left both use the issue as a tribal shibboleth. I believe his point was that people are doing something other than addressing the argument, not that they are acting as the self-interested parties causing a market failure (and denying or ignoring facts) as seems to be alleged in your earlier comment. I think that it might be possible to distinguish those as "alternate" versus "ulterior" motivations, but maybe I'm splitting hairs. Still, I wonder why government actors would not be subject to this same problem.

Meanwhile, you've used the lack a "gizmo" performing some unicorn task as an example of market failure, while also alleging CAWG. If the evidence is so compelling for CAWG, we can use a much simpler example for a market response: prices of coastal property. Whatever else should happen, market responsiveness in that category should be act as a test of markets' ability to incorporate sea level projections.

You said that you were not naming David as an AWG-denier, and yet you stated before that "Denying the problem is way easier, certainly convenient, and I suppose that provides enough incentive to any pro-capitalist to find irresistible." So to be clear, you've actually included ALL advocates of market solutions there. It's a motte and bailey argument.

At 6:55 PM, December 18, 2015, Blogger J Oliver said...

I am fairly libertarian but I prefer a carbon tax to just about any other tax (maybe only a Georgian land tax would be better) and I would support a carbon tax, and a payout for the removal of CO2 from the air. I think it would be surprisingly cheap to reach CO2 neutral if the tax and payout were structured well. Imports would be a problem but all taxes have problems.
On the other hand I think it unlikely that we get a good effective CO2 tax and I would not support cap and trade because I think that there is too much opportunity for politicians to use it to buy votes with cap and trade and I am not afraid of AGW. I think David is right AGW causes some bad and some good but very unlikely to be catastrophic. Further I think we can safely delay action. If temps start to rise fast we have options.
I am not worried.

I was in college in the late 1970s, I was assigned to read Paul Ehrlich and The Limits to Growth and others of that ilk! Good people and knowledgeable scientists seem to get caught up in environmental fears for some reason.

James Picone does that give you any doubt about how bad AGW will be.

At 7:53 PM, December 18, 2015, Blogger Bravin Neff said...


Regarding the unicorn task and gizmos: I don't think I am following you regarding your statement on the prices of costal property, so allow me a slight digression on my gizmo statement. The nature of the market failure that is AGW (assuming it is such, as I do) is the failure to internalize the cost to future generations into the price of fossil fuel consumption that occurred in the past (which, granted, is not the kind of market failure most are accustomed to thinking of: the timescales involved mean the failure is essentially intergenerational. Anyway...). The potential solutions to this problem are technically infinite, but practically seem to number only a few: carbon taxes and cap and trade type arrangements attempt to internalize the costs, but far more palatable would be to come up with renewable energy sources on a scale that can displace fossil fuel use. Such solutions are what I had in mind by "gizmos," and solve the market failure. The market failure in itself, which is not directly related, is that the price of fossil fuel is too low.

If you mean by the "prices of coastal property" as a potential metric to gauge if the market can adequately track AGW, I suppose prices on threatened areas would drop really slowly commensurate with the timescale involved with sea level rise. Even in that case, that wouldn't imply a market failure didn't occur. Suppose the fossil fuel we burn today will cause some coastal property, 40 years from now, to lose 50% of its value that, by hypothesis, wouldn't have occurred had we done something else. If that future loss is not accounted for in the fossil fuel we consume today, then its a market failure, even if the price of that coastal property follows some long, downward spiral unnoticeable any given year.

Motte and Bailey argument: fair enough.

At 7:56 PM, December 19, 2015, Anonymous Anonymous said...

Now, David, what are the motivations of those who desperately downplay the implications of AGW? A rational person could list their arguments, too.

What are they?

At 7:29 PM, December 20, 2015, Blogger David Friedman said...

Anonymous: I expect that different critics have different motivations. My own bias comes from the fact that the policies urged to deal with AGW are policies I dislike on general grounds, since they mostly involve increasing state power. That's an incentive for me to look for reasons to reject CAGW.

I don't suggest that other people should agree with my conclusion because it is my conclusion but because I offer convincing arguments for it.

At 7:31 PM, December 20, 2015, Blogger David Friedman said...


You don't seem to have noticed that my post already described a reason for people to downplay AGW.

At 8:45 PM, December 20, 2015, Anonymous Anonymous said...

Isn't it rather backwards to start with "I dislike [...] increasing state power", assume that "the policies" to address AGW must involve "increasing state power", then use that dislike to downplay AGW and raise doubts about the validity of climate science?

Why not start with the reality the science describes, then, taking your biases into account, come up with policies to address that reality that don't involve "increasing state power"?

PS - Are "AGW" and "CAGW" synonymous or distinct?

At 12:28 PM, December 21, 2015, Anonymous alaska3636 said...

@Bravin Neff

Can you define "market failure"? In the context of your writing (and many others who use a similar term), it sounds like a market failure is an outcome that you don't want. But then you generalize your subjective valuation as an outcome that everyone doesn't want or, at least, shouldn't want. In which case, anything that you would like to rhetorically shoot down could be labeled a "market failure".

In regards to your "internalize the cost to future generations": you realize that the capital available to present generations was accumulated as a result of the burning of fossil fuels? Are you so unhappy with your inheritance that you suggest future generations be denied your same standard of living because that is what reducing fossil fuel use currently entails.

I would suggest that your further idea to "solve the market failure" by essentially mandating a new, amazing technology is similarly naive of the history of technological breakthroughs, many of which were developed by people whose ideas were self-funded because of the generally forward-thinking nature of their insights.

At 9:05 PM, December 21, 2015, Blogger Bravin Neff said...


"Can you define "market failure"?

Its a standard econ idea. I didn't think defining it was necessary on an econ blog, but since you asked: a market failure is an allocation that isn't efficient: there are ways to make some better off on net.

"...that you suggest future generations be denied your same standard of living because that is what reducing fossil fuel use currently entails."

That's one possibility. Another is the replacement of fossil fuel energy with alternatives at the appropriate scale, that allow the trend of economic growth to continue and hence the standard of living. I already talked about this.

"I would suggest that your further idea to "solve the market failure" by essentially mandating a new, amazing technology is similarly naive of the history of technological breakthroughs..."

Its already in motion, it just needs more nudging, so to speak. There have been enormous advances in wind and solar power in the last decade. Solar power is somewhere about $0.75/watt today, but was like $4/watt 10 years ago.

"...many of which were developed by people whose ideas were self-funded because of the generally forward-thinking nature of their insights."

Right, the self-made man. Some of those exist (maybe I'm one? I have two US patents). But that's not where the bulk of the work gets done in recent decades, and the trend isn't in that direction.

At 8:22 AM, December 22, 2015, Blogger Alaska3636 said...

@Bravin Neff
Thank you for the thoughtful response.

I don't think of this blog as an econ blog, but maybe I should. I am strongly behind Mises arguments that preferences are ordinal, not cardinal. Another way to define a market is a group of people with preferences. Thus, a market failure would be an odd choice of terms to describe the allocation of capital in response to those preferences. To whom is the allocation considered efficient or not?

Again, it seems like we have very different ideas regarding ordinal vs cardinal preferences. This is another argument against the utilitarian calculations that I have seen David make. There is no way of knowing whether your chosen the variables are accurately measuring preferences and there would almost be no chance of keeping up with the way peoples' preferences change from moment to moment as new information comes to light.

I'm not saying that your ideas can't be functionally productive on a small scale, but in order for them to be applied to a nation of 300 million people implies a serious dilemma on several fronts: greater power to tax people who don't agree and have no recourse (taxation without representation); malinvestment in unproductive sectors, towards accepted ideas and away unaccepted ones (arbitrary application of force); propping up insolvent businesses (removing liquidity from market).

Economics can not tell us where to direct capital in order to produce the next great technological breakthrough. It can't tell us how to cure cancer and end poverty. But I see it used to justify a lot of centralization of power for the dubious causes of the greater good all the time with great effect.

At 9:11 AM, December 23, 2015, Blogger David Friedman said...


I define "market failure" as a situation in which indvidual rationality does not produce group rationality. In the extreme case, each individual is making the choice maximizes his interest, and all individuals would be better off if they all made different choices.

You can find a talk expanding on that at: as well as links to several others on my web page. If you prefer a text version, one is webbed, as a draft of one of the chapters of the third edition of my first book, at:

At 9:13 AM, December 23, 2015, Blogger David Friedman said...


AGW and CAGW are distinct. The latter adds the claim that AGW, if not slowed or stopped, will produce large net negative consequences.

At 2:16 PM, December 23, 2015, Anonymous Anonymous said...

Thanks, David. Why do you put the cart of potential policies to address AGW before the horse of the science, and thus use your dislike of (some of) those policies to dismiss the science?

That's poor logic.

At 9:43 PM, December 23, 2015, Blogger David Friedman said...


I try to form my opinions on the basis of the science and the economics. But I recognize that, like everyone else, I have biases--there are some things I would rather believe than others—and I try to take account of them.

What science do you believe I dismiss?

At 12:26 PM, January 13, 2016, Anonymous Anonymous said...

"centrally planned capitalism"

This is nonsense. Capitalism, by definition, is not centrally planned.


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