March 14, 2014, by Kieran Cooke
Climate scientists are much better at the forecasting game than economists says a new study
Image: Eileen Sanda via Wikimedia Commons
FOR IMMEDIATE RELEASE Hold up the trophy. Open the champagne. Climate scientists have easily won the game. According to a recent study, when it comes to the accuracy of forecasts and projections, the climate side is much better at the game than the economists’ team. London, 14 March – The study, by the New Economics Foundation (NEF), a UK based independent think-tank, examines the accuracy and precision of projections made by both climate scientists and economists over the past 20 years. First, the economists. The study looked at measures commonly used in long term UK government economic modelling and decision making, using 1995 as a baseline: the population forecast for England and the forecast for the UK Treasury’s debt to Gross Domestic Product (GDP) ratio. In the US, the forecasts on oil prices over the period made by the US Energy Information Administration (EIA) were also examined.
The NEF finds the economists’ projections both inaccurate and imprecise in all three areas. The economists saw the population of England growing at a fairly modest level from 1995 to the present – from around 49 million 20 years ago to 51.5 million now. In fact England’s population has risen steeply, particularly over the past 10 years and is now approaching 54 million. The UK Treasury’s forecasts on the GDP to forecasts on the debt to GDP ratio fared no better, displaying “a bias towards optimism in government economic forecasts” says the study. Meanwhile the crystal ball gazing of economists at the EIA was a miserable failure: they predicted oil prices rising on a gentle curve in the 15 years 1995 to 2010. In fact prices have been extremely volatile, rising at some points by more than five times the predicted figure. And of course, the most damning judgement of the financial boffins forecasting skills is the failure of nearly all economic pundits to predict the 2008 recession.
Contrast this with predictions made by climate scientists over the past 20 years, in particular those made by the Intergovernmental Panel on Climate Change (IPCC). Again the NEF looks at three specific areas of projection – carbon concentration in the atmosphere, the temperature anomaly and forecasts since 1995 of sea level rise. There can be no doubt of the result, says the study. “Climate models outperform major economic forecasts on accuracy… global temperature, sea level and carbon concentration have all risen within the ranges originally forecast (by the IPCC) in 1995.” While on one level this can be looked at as a bit of amusing sparring between two academic disciplines, there is serious business going on here. The NEF makes the point that despite the dubious track record of economic forecasting, many government policy decisions are based on the data offered up.
Meanwhile the climate deniers have succeeded in highlighting the narrow bands of uncertainty in the work of climate scientists – stalling action on the issue. Sections of the media collude in this process. “This emphasis on uncertainty has a negative impact on climate progress” says the report. “It slows down environmental policy and corrodes the public will to act.” The NEF draws attention to the IPCC’s 5th Assessment Report and its revised estimate of certainty – up to 95% – that humans have been the main cause of global warming from 1950 to the present. “This 95% has a precise scientific meaning. It is higher than the certainty that vitamins are good for your health and equivalent to the certainty that cigarettes cause lung cancer.” Despite this, the climate denial bandwagon continues to roll along. “We often hear the argument that climate models are too uncertain to bother taking action, but this is not borne out by the facts” says Aniol Esteban, the head of environmental economics at the NEF. “We can’t go on making huge policy and investment decisions based on financial advice no more reliable than a coin flip, while at the same time discrediting climate models with a 20 year track record of accuracy. The double standard has to end now.” – Climate News Network
Kieran Cooke, a founding editor of Climate News Network, is a former foreign correspondent for the BBC and Financial Times. He now focuses on environmental issues