GDP and Earth’s Temperature (updated 9feb20)

George Rebane

Most well-read people look at Gross Domestic Product as the gold standard of our economy’s performance.  And all know that GDP growth will cure almost all the ills we still see in the economy.  But when we take a deeper look at how the GDP statistic is concocted, we discover that it’s really a rat’s nest of formulas and calculations and selective capture of dubiously reliable data, that then pops out a number which, more often than not, must be rejiggered in a couple of months to give a new and improved version of itself.

And the GDP also comes with error bounds that would surprise most of us were they included with the published number – but they aren’t, and thereby hangs a tale.  Diane Coyle wrote an excellent book on the topic - GDP: A Brief But Affectionate History (2014) – wherein she says –

There is no such entity out there as GDP in the real world, waiting to be measured by economists. It is an abstract idea… I also ask whether GDP alone is still a good enough measure of economic performance—and conclude not. It is a measure designed for the twentieth-century economy of physical mass production, not for the modern economy of rapid innovation and intangible, increasingly digital, services. How well the economy is doing is always going to be an important part of everyday politics, and we’re going to need a better measure of “the economy” than today’s GDP.

Investment economist Bill Mauldin writes (here), “GDP doesn’t capture intangible goods production, or the services that form a large part of today’s economy. It was designed for the agricultural and industrial economy its Depression-era designers knew”, and goes on to explain –

GDP is a huge undertaking, full of rules, with almost as many exceptions to the rules, changes, fixes, and qualifications, so that, as one Amazon reviewer noted, GDP is in reality so complex there are only a handful of people in the world who fully understand it, and that does not include the commentators and politicians who pontificate about it almost daily. The quarterly release of GDP statistics is more akin to a religious service than anything resembling a scientific study. The awe and breathlessness with which the number is discussed is somewhat amusing to those who understand the sausage-making process that goes into producing the number. Whether the GDP reading is positive or negative, it often changes less in a given quarter than the margin of error in the figure itself, and it can be and generally is revised significantly—often many years later when almost no one is paying attention. When’s the last time the mainstream media reported a five-year-old revision?

To this, economic and social theorist Jeremy Rifkin adds – “The problem with the [GDP] index is that it counts negative as well as positive economic activity. If a country invests large sums of money in armaments, builds prisons, expands police security, and has to clean up polluted environments and the like, it’s included in the GDP.”

The major flaw in GDP is that it includes the spending of all levels of government, and that means it is double counting the part of that spending which comes from taxes and fees.  These had to be already earned and counted previously in the GDP formula.  Add to that the distortions provided by deficit spending supported by borrowing from ‘outside the economy’ and ongoing quantitative easing by the Fed, and you start to get the picture of what information is mish-mashed in the published GDP numbers.  (See the figure for a graphic display of the formula and money flows.)

Today the concoction and publication of ‘global temperature’ is perhaps the other most intense  practice of secular religiosity that impacts public attitudes and shapes public policies.  As RR readers have known for years, there is no place on Earth where you can stick a thermometer and read its temperature.  Global temperature is a mathematical construct, the output of a complex model jiggered together with a lot of subjective decisions to include this and not that.  And there exist several such formulas that compute global temperature, some in competition, and others that come with contingent trappings. All of them cloud their genesis and meaning so that the only purpose they effectively serve is to bolster agenda driven political statements, ideological propaganda, and new public policies for bigger government and more restrictive regulations.

The only related, and definitely the more dreadful aspect, of this exercise of faith-based science is the embedding of some of these temperature formulas in climate prediction models (aka ‘General Circulation Models’) from which derive the scary predictions of the coming hot house Earth.  These predicted temperatures also come with rarely revealed error bounds which themselves tell an embarrassing tale.  Over the last several decades during which out-year temperatures have been predicted, the error bounds of such predictions have not gotten smaller.  A gold standard characteristic that confirms a maturing field in science is that its understanding of the part of nature that it studies and models continues to yield predictions with ever smaller or tighter error bounds, which when compared with actual measurements (experiments) attest to their growing reliability.

This is not happening in the pursuit of predictive climate science, mainly due to the utter complexity and our primitive knowledge of the process (Earth’s various systems of energy storage and exchange – atmosphere, stratosphere, oceans, ground masses, polar regions, …).  Those who loudly proclaim their utter faith in this or that statistic about Earth’s future climate are truly dangerous demogauges and/or self-serving yokels who attempt to convince the less-read public that they have the cure for what they believe is preventable man-made global warming.

[9feb20 update]  Right on schedule we welcome the retort to my assessment of climate models and modeling.  Mr Steven Frisch, RR reader and commenter, is the CEO of an NGO that takes cover under the moniker Sierra Business Council.  SBC gets its income from grants and contracts for promulgating and explaining the advantages and workings of big government to institutions and governmental jurisdictions in the business of providing for the public good.  Among these functions SBC explains the latest laws and regulations, and their compliance requirements to their clients, who are overwhelmed by the verbiage and complex constraints of each new issue from the legislature and/or government bureau.  One big revenue generator for SBC derives from government's imposition of environmental dicta, especially those having to do with ‘climate change’.

As we have done in the past, we again illustrate the progressive pilgrim’s progress in contending my critique of climate models with his own words from the comment stream of this commentary.

Seriously climate models are amongst the most studied, peer reviewed, and transparent parts of scientific research today. To be accepted and widely used their methodologies and assumptions must be published, the data sets going into the models are scrutinized and reviewed, they cannot "cloud their genesis." The reason there are competing climate models is that they are designed to work on a range of assumptions.

Mr Frisch is not a technologist, nor does he claim to be one.  But he knows that his bread is buttered on both sides of the preventable manmade global warming issue, deriving benefit from promoting both the leftwing’s political agenda and its climate change ‘science’ agenda.  The bottom line is that every claim in his above comment has been shown to be false.  I am not accusing Mr Frisch of lying, for he is simply a true believer working in the vineyards of progressive thought, and knows not of which he speaks.  And by no means is he alone.

Over the years, I and RR readers with technical credentials have reviewed the considerable list of flaws and unmet challenges in the various General Circulation Models (the most rigorous and celebrated of the IPCC’s climate prediction tools).  Rehashing some major points –

1. A GCM is a large and very complex piece of software variously cobbled together with a plethora of subroutines that attempt to model various types of energy exchanges that occur between the millions of discrete cells that layer and cover the Earth’s surface (510^\6 km²). The subroutine models are contributed by specialists in the various areas of physics, fluid dynamics, meteorology, …, none of whom know, nor need to know, the architecture of the overall GCM into which their models will be programmed.
2. Each GCM’s architecture and operation is known to only a few investigators who necessarily understand their contributing subroutines as ‘black boxes’ with in/out data requirements. Consequently, GCMs may be seen to be one of the least intensely studied areas of science when compared to intensely studied areas like AI, molecular biology (e.g cancer research), genomics, the standard model, image understanding, speech understanding, autonomous control & estimation, … .
3. GCMs are iterative numerical models that attempt to characterize a very poorly understood stochastic process – i.e. Earth’s atmosphere. As such, their performance (prediction reliability) is constrained by natural computability limits that include propagation of error in such models due to realworld computer shortcomings, the unreliability of input data, and the total ad hoc nature of specifying modeling constraints and feedback loops.
4. A GCM run to model climate decades from now takes several weeks. Therefore, the reliability (error) bounds are neither well developed nor known.
5. All climate models are ‘tuned’ with error prone historical data, the effects of which are hard to measure. Such tunings that seek to replicate past climate history are an attempt to fit subjectively selected regression functions (aka curve fitting), and suffer from the well-known shortcomings (often catastrophic) of such regression models when exercised outside the range of the data epoch to which they were tuned or fitted.

This short list addresses just a part of the realworld’s unmet challenges encountered by the climate and systems scientists.  Many more problems arise from the lack of and/or error-prone interpretations of input data that itself had to be developed from actual error-prone measurements (e.g. fossilized tree rings) put through precursor models to derive, say, CO2 levels eons ago.  A discussion of this aspect of climate modeling is presented in ‘Flawed Climate Models’ from the Stanford University’s Hoover Institution.  And much more about the technical limitations of quantitative climate prediction are available to the diligent reader with a little googling.

Mr Frisch’s claim that the GCM models are widely available and “scrutinized” is not true.  To the extent that they have been scrutinized by the technically qualified whose livelihood is not beholden to political and bureaucratic climate catastrophe agendas, ALL of the models have been found to be woefully inadequate for developing the kind of information required to make prudent public policies.  And this goes doubly for the data sets with which the GCMs are tuned and tested; some of these data sets have yet to be released by their developers for independent assessment.

The claim of catastrophic, yet preventable manmade global warming continues to be the perfect storm for globalists who work ardently to eliminate the current world order of sovereign nation-states and create a worldwide collective under one overarching socialist government that will then direct all the efforts of future humans.  Mr Frisch is again merely doing his fastidious part.

Comments

[scenes]

Good essay.

One problem with redefining GDP to be more reasonable (whatever that is, didn't they do that once already?) is the difficulty in doing historical comparisons, rather like changing SAT scoring.

Dunno how you intertwine the Surveillance Industrial Complex back into economic activity, although that appears to be the story in big business at this point, even with traditional manufacturers.

Perhaps the future is either (a) throwing away all of it and keeping only the simplest kind of brute force central bank activity or (b) asking our robot lords and masters to look for patterns of economic activity. In the case of (b), human understanding would be lost, but perhaps the proponents of central planning never knew what they were doing to begin with.

[Steven Frisch]

"All of them [climate models] cloud their genesis and meaning ....."

Seriously climate models are amongst the most studied, peer reviewed, and transparent parts of scientific research today. To be accepted and widely used their methodologies and assumptions must be published, the data sets going into the models are scrutinized and reviewed, they cannot "cloud their genesis." The reason there are competing climate models is that they are designed to work on a range of assumptions.

[scenes]

It seems to me that the it's worth considering that climate science and economics are similar in a lot of ways. They both have shitty predictive ability under normal circumstances and are misused for political effect.

It's easy to see how an economy could prosper, merely improve the underlying people. A giant version of Switzerland would probably have better savings habits and harder working people doing more useful things (insert crack about local nonprofits here). I can't say that anyone's understanding of economics is good enough to impose useful centralized control.

By the same token, reduction of greenhouse gases might result from a hundred small actions that are actually useful. Increased use of fracked gas for electrical generation, nuclear energy, reduction of mass immigration to the First World, population reduction in the Third World, hassling the Chinese instead of the US public about the whole thing. None of these are allowed by the Climate Industrial Complex of course.

It would be nice if the political Left thought about changes that make a difference. Instead ecological degradation is used as a general purpose boogieman to rally the troops to control matters in a million different ways, witness the birth of 'climate justice'.

[L]

Steven, you have inadvertently pointed out the real problem- "they are designed to work on a range of assumptions." Only one set of which can possibly be accurate and not even that one necessarily.

In the meantime (now 30+ years), nothing catastrophic is happening; no increase in frequency or severity of weather events, while the planet continues to green and humans to thrive. I realize there are serious problems ahead, but they don't involve the weather or climate.

At the most basic, it's yet to be convincingly demonstrated that a couple degrees of temperature increase is likely to be problematic.

[scenes]

L: "I realize there are serious problems ahead, but they don't involve the weather or climate."

I don't entirely discount the problem of changing the composition of the atmosphere slightly, but it's a bummer how the climate change people have sucked all the air out of the room in terms of human impact on the planet. Using 'climate change' as a political tool is even less acceptable.

I think that, lacking some huge change (good or bad) in technology, the real story of the anthropocene era is going to be this:

https://www.hoover.org/sites/default/files/goldstone_africa_2050_demographic_truth_and_consequences_revised1-20.jpg

Of course, that thinking treads on taboo ground, but the side effects won't be pretty for anyone.

[fish]

Posted by: scenes | 09 February 2020 at 08:10 AM

None of these are allowed by the Climate Industrial Complex of course.

Aww Scenes.....how's a brother supposed to maintain that sweet, sweet Truckee lifestyle if something like this was to come to pass!

Chastising the real perps is so 20th Century!

[Gregory]

frisch o'dark :39

"Seriously climate models are amongst the most studied, peer reviewed, and transparent parts of scientific research today."

And yet they continue to overpredict warming by a factor of about 2.

[fish]

Posted by: scenes | 09 February 2020 at 09:04 AM

Borlaugs Revenge........

[scenes]

"And yet they continue to overpredict warming by a factor of about 2."

No problemo. Simply take the number that pops out of the honkin' data/equations heap and divide by two.

No doubt it would become

(complex_magic_number_generator / 2) * need_for_more_funding_multiplier

[Steven Frisch]

"..."they are designed to work on a range of assumptions." Only one set of which can possibly be accurate and not even that one necessarily..."

Except that is not how climate models are used...the range of assumptions is based on different assumptions about emissions and different assumptions in the metadata, and then projections and in some cases experiments are tested against the range of models... for example the California Climate assessment uses 10 models...

"Changes in global and California temperatures depend on the accumulation of carbon dioxide and other heat trapping gases emitted from human activities in the atmosphere. The future emissions and resulting accumulation of greenhouse gases (GHGs) could take a range of pathways depending on the success of international and local efforts to reduce GHG emissions. The warming and other changes experienced under different future conditions are projected using Representative Concentration Pathways (RCPs). RCPs do not represent a specific policy, demographic, or economic future, but are defined in terms of their total radiative forcing (Watts per square meter) by 2100 (i.e., the net balance of radiation into and out of Earth’s surface due to human emissions of GHGs from all sources).

The Fourth Assessment uses two RCPs from the Fifth Intergovernmental Panel on Climate Change (IPCC)
Assessment Report on Climate Change. The higher of the two RCPs represents accumulating GHG concentrations under a higher emissions pathway (RCP 8.5), commonly understood as a business-as-usual (BAU) scenario that would result in atmospheric CO2 concentrations exceeding 900 parts per million (ppm) by 2100, more than triple the level present in the atmosphere before human emissions began to accumulate. The more moderate GHG concentration pathway (RCP 4.5), a scenario where GHG emissions rise until mid-21st century and then decline, results in a CO2 concentration of about 550 ppm by 2100 (van Vuuren et al., 2011).
Global climate models (GCMs) use different RCPs to project future climate conditions. A group of experts selected by California’s Department of Water Resources identified 10 GCMs from a set of more than 30 available as being the most suitable for California water resource climate change studies (California Department of Water Resources, 2015).

The Fourth Assessment uses these 10 GCMs and the two RCPs discussed above to simulate California’s historical and projected temperatures, precipitation, and other climate outcomes such as relative humidity and soil moisture. The outputs of these models provide a set of common climate scenarios used throughout the studies in the Fourth Assessment. This chapter describes climate outcomes under these common scenarios."

In short, the origins of the models are there to see, there is NO QUESTION about 'their genesis' nothing is 'clouded.'

[Steven Frisch]

Posted by: Gregory | 09 February 2020 at 10:28 AM

Only in your tiny mind....

https://climate.nasa.gov/news/2943/study-confirms-climate-models-are-getting-future-warming-projections-right/

[Gregory]

The tiny mind is the one who believes Gavin Schmidt who produces both models and an inaccurate surface record as James Hanson's replacement at NASA-GISS.

Try this:
http://remss.com/research/climate/

[scenes]

fish: "Borlaugs Revenge........"

Hah, no doubt. Maybe Borlaug 2.0 will invent some kind of nutrient tank we can fetch a dipper of algae out of now and again.

Remember, people are our greatest asset.

[Gregory]

and this
http://www.drroyspencer.com/wp-content/uploads/ICCC13-DC-Spencer-25-July-2019-Global-LT-scaled.jpg

[L]

Steven, I don't claim the models' genesis is 'clouded,' just that the assumptions used to reach the dramatic conclusions lack proof. Don't conflate emissions scenarios with the basic theory- of course different future emissions may well influence the rate of climate change.

Rather, do something about the IPCC's estimate of 1.5 - 4.5 C increase from a doubling of CO2(ECS). Most recent work (ignored by warmunists) points to a figure around 1.2 for equilibrium climate sensitivity. More serious by far are the assumed feedbacks associated with a rise in atmospheric CO2, direct evidence for which are sadly lacking in the party line.

Scenes @ 9:04- Zakly! What happens when medicine outpaces education.

[George Rebane]

re L 126pm - For the record, I DO claim that the models' genesis is clouded. No one, including those directly involved, do or can give a cogent answer to questions such as 'why did you pick that particular value for that particular feedback gain?' Their stumbling answer is 'well, that value seemed to work best for the model's output most closely matching the generated historical data - of course, all things considered'. The use of such brown numbers is an example of cloudy genesis.

[L]

George, my remark at 1:26 needs clarification. What I meant was that they were completely unsuccessful at hiding- hence 'clouding'- the origins of their now-failed theory of runaway global warming. It was fully apparent at the time that they were pulling numbers and assumptions out of thin air, lacking any real evidence for their politically convenient theories. Greg's chart at 1:26 shows the naked truth.

[Gregory]

gr 149pm

such is the nature of curve fitting. it matches the past very well. the future, not so much.

[L]

That chart demonstrates that Dr. Karl'[s SST sleight-of-hand in 2018 (discounting evidence of ARGO buoys) cannot hide the fact that global warming flat lined after 2000 and said flat line has not resumed an upward trajectory.

[George Rebane]

L 202pm - Understood. However, brown numbers are not pulled out of 'thin air', if you get my drift. ;-)

Gregory 203pm - Indeed. And from the plotted data I've seen, there weren't even enough hoops to jump through to give a very good match to the past.

[L]

OK, George, I agree. Besides being scientifically preposterous, CAGW is also a hoax surpassing even Piltdown man and a fraud, enabling pseudo-scientific solar panel salesmen to enrich themselves at taxpayer expense.

Obviously brown numbers come from brown places.

[L]

But most of all, it's a political weapon wielded by the progressive cancer in which we increasingly swim.

[Gregory]

L.... not really. Everyone behind the Piltdown Man knew it was a fraud. Virtually all of the Warmistas, however,
really think it to be true.

Fraud is different than groupthink.

[George Rebane]

Gregory 636pm - Greg, do you think that there are no equivalents to Team Charles Dawson of Piltdown fame in fraudulently promoting the climate crisis? Where do the turkeys like Michael Mann, James Hansen, and Gavin Schmidt fit in? Weren't any of them smart enough to see the holes in their arguments? If so, then the rest of hoi polloi believers are the equivalent of those bygones who drank the Piltdown kool-aid.

[Gregory]

I don't *need* to believe there are NO equivalents to Dawson and Company who knew the bones they were burying were fakes made from different species. Some may.

But even Schmidt might well think all they're doing is keeping the ball moving until there's no doubt there's a mass extinction on the verge of happening. God's work, as if she actually exists.

He's a scienceless jerk, but Frisch doesn't have the background to understand the issues. Neither does Anna Haynes.

[L]

Hansen may get some sympathy as a true believer (sucker), but Mann and Schmidt, never. They are Exhibit A and B though, with a bit of thought, the list is easy to extend- there are more than a few guilty of academic fraud to promote their own careers. They give out the points to each other and cover the claims of the hucksters trailing in their wakes. A compliant, politically agreed media does the rest. Simples

But yeah, there are some real criminals involved here.