Global Warming's Terrifying New Math - Three simple numbers that add up to global catastrophe - and that make clear who the real enemy is.
by: Bill McKibben in Rolling Stone.
If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn't pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today's market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you'd be writing off $20 trillion in assets. The numbers aren't exact, of course, but that carbon bubble makes the housing bubble look small by comparison. It won't necessarily burst – we might well burn all that carbon, in which case investors will do fine. But if we do, the planet will crater. You can have a healthy fossil-fuel balance sheet, or a relatively healthy planet – but now that we know the numbers, it looks like you can't have both.
Read only the first paragraph of the linked Rolling Stone article; and that's enough for me to skip the rest and call the article BS. The article says "the odds of which occurring by simple chance were 3.7 x 10-99"; that shows zero understanding of statistics, and whoever makes such a claim has no business being making any scientific claims.
Daisy wrote:How about too colloquial? Presumably the writer is assuming his audience is not a bunch of statisticians.
In accordance with the forum rules, this is my last post on this matter: The statistical claim is bogus, and that's still putting it mildly. Presumably, the writer either assumes he can get away with it precisely because his audience is not familiar with statistics, or he actually believes his own BS claim.
If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn't pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today's market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you'd be writing off $20 trillion in assets.
The guy is actually a terrible economist, and in this context that is a non-trivial failing.
Specifically, How does he come up with the value figure of $27 trillion. You have to have some prices in the market. Now, if they produce somewhat less than the full amount the price might be a little bit higher, ... As such, the more you do not produce the higher the unit price and the total dollar value does not fall proportionately with the quantity (in some circumstances it will rise, as you have seen when supply is cut back 5% and the price increase by several times that 5%).
Add to this that it is not revenues that matter but revenues minus expenses. Thus, the net revenues will fall not nearly as fast as the total revenues because of the savings in cost, which are greatest on the marginal units, the ones that would go un-utilized.
When the most basic elements are not even a part of the discussion, the discussion is not worth much.
Daisy wrote:Except, his point was to prove he could not hold back the tide.
I learned something today! Since that's not what I learned at all, I went looking, and Wiki says
<<Henry of Huntingdon, the 12th-century chronicler, tells how Cnut set his throne by the sea shore and commanded the tide to halt and not wet his feet and robes. Yet "continuing to rise as usual [the tide] dashed over his feet and legs without respect to his royal person. Then the king leapt backwards, saying: 'Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws.' He then hung his gold crown on a crucifix, and never wore it again "to the honour of God the almighty King". This incident is usually misrepresented by popular commentators and politicians as an example of Cnut's arrogance.>>
I'm sure that in school we learned that he thought he could. I've certainly remembered it that way for the last 50-odd years.
Scientific American wrote: The Arctic Sea Ice extent this September was far smaller than the previous record set in 2007. At 3.4 million square kilometers of ice coverage, this year’s Arctic minimum was 600,000 square kilometers smaller than the 2007 record. That difference between the previous record and this year’s is larger than the entire state of California, and almost as large as the state of Texas. An ice-free summer in the Arctic, once projected to be more than a century away, now looks possible decades from now.