Thanks, Dan, for your reply. I think I still disagree pretty strongly and I’ll briefly outline how and why: (1) I don’t think we should give credence on studies based on government usage, (2) 22 century emissions are clearly very implausible, (3) there are reasons for this to really matter and (4) being able to find this in 5min should make us deeply skeptical of the wider paper. (5) As you, I deeply care about effective climate action but I don’t think we should propagate bad evidence to inflate the importance vis-a-vis other causes.
Should we give special credence to something because the Biden admin and the German EPA used it?
I think the answer is pretty clearly “no”.
As you also mention, SCCs are inherently very uncertain estimates, but they also are clearly political projects; they are often produced or at least amplified to serve political purposes such as justifying more or less ambitious policies.
Given the biases in the climate science community, I think it is upon us to evaluate studies on their merits and to not assume that studies that are well-cited or used by climate hawkish administrations are therefore inherently more credible.
In case that sounds conspiratorial, it’s worth remembering that RCP 8.5 (the most extreme emissions scenario by the IPCC) was essentially abused prominently for 5-10 years as a baseline after it was obvious to all serious observers it was not a baseline but worse than a conceivable worst case scenario.
Given this record of the emissions scenario modeling community, we should always check what they assume.
Why it’s obvious that 22nd century emissions shouldn’t have that high a median
This is obvious to Dan, but for the wider group. The reason the 22nd emissions are so implausible is because they essentially assume that nothing much changes by the 22nd century, 3-5 investment cycles from now. Yes, decarbonizing the world by 2050 might be hard, but decarbonizing the world by 2100 or 2150 is not hard. It’s simply not plausible to believe in a 22nd century that is both richer than today, a hundred years in the future, exposed to a lot of climate damage, and not able to decarbonize.
This is much more than a 15% difference!
This is not about a 15% difference and a 5x over-estimate from this alone is quite plausible.
The calculation you run is – as you note – not informative because it ignores the discounting and the implausibility of the Rennert et al paper lies primarily in the 22nd century+ and those will get outsized importance if changing the discounting assumptions.
Yes, by 2100 Rennert looks mildly pessimistic but not widely so, but that’s not the point – once discounting is very low the 22nd century matters and drives most of the result.
The 22nd century is discounted by more than 75% on the RFF explorers lowest discount rate (2%) so this is not a useful tool to explore whether implausible 22nd century assumptions massively inflate the SCC estimate.
And, indeed, we should expect the 22nd century to drive a massive difference when discounting is low. By Rennert et al’s assumption temperature keeps increasing well into the 22nd century, climate damage is non-linear, so on low discounting this will drive a massive amount of the damage and lead to strongly changed estimates.
I am not an economist, but when I Claude the emissions assumptions of the Rennert et al paper and stipulate to make conventional assumptions about climate damage at 0 discount rate, 96% of the damage is after 2100.
And we can see here why this is. In the Rennert world temperature keeps rising till after Captain Kirk with 25% probability mass above 4.5C. This is very different from what I think we both believe about the future.
This goes beyond this one example
I picked this example because it was quick for me to find, having seen this pattern (making deeply implausible assumptions in papers that get a lot of policy traction) so often. But I am sure one could find other instances. The point that it is so easy to find a highly biased assumption cited as mainstream evidence is that one should distrust the broader paper more.
Why I care
As you and many readers here, I deeply care about effective climate action and we are together on this project of making the climate response more effective.
But I do think we should not propagate bad evidence to inflate the importance of climate vis-a-vis other causes in the same way that we would also – and correctly – criticize a motivation of AI risk that only relied on Yudkowsky’s p(doom) estimate.
Implausible assumptions rarely come alone and when a paper makes such implausible assumptions (that are not simpler than more reasonable assumptions, i.e. this is not driven by parsimony) then I think we should be quite skeptical of the conclusions of that paper.
Thanks so much for interacting with our work. For broader context around this report, it’s important to note that our approach from the outset was to build a series of models to show what you would need to believe for climate to be competitive with GHD. We therefore aren’t wedded to any particular SCC, and certainly can imagine different ways of approaching the problem.
To your specific points:
It is our view that Rennert is the best middle ground available from current peer-reviewed work. It sits between DICE-2023 (~$66) at the lower end, and estimates that incorporate growth effects like Bilal & Känzig (2024) (~$1,000+ at the same 2% discount rate) at the higher end. So, whilst we agree that some parameters in the GIVE model can be questioned in isolation (your discount rate and impact horizon critique seems reasonable), we feel it is still a sensible middle ground when taken as a whole, in comparison to other peer reviewed estimates currently available.
On adaptation, we feel less optimistic that the principle of ‘richer future = strong adaptation’ will hold for all people (e.g. those most exposed and least able to adapt in LMICs) or all sectors (e.g. agriculture), with the intersection between the two being particularly noteworthy. However, we accept this is genuinely uncertain and that reasonable people will weigh it differently.
Overall, we think our analysis at least supports the re-visiting of climate as a cost-effective cause area within the EA space and we appreciate the various thoughtful comments so far. Thank you for engaging!
Hi Johannes, thank for all the detailed thoughts. I think we’re probably reaching diminishing marginal returns in debating point by point. I will say that we agree that the Rennert et al projections are too pessimisitic, and difficult far future projections can matter a lot with low discounting. Though I think we will need to agree to disagree on the magnitudes of these changes.
There is one technical point that I’d like to bring to your attention, though, that I think does critically matter. The Rethink application of a new discount rate is NOT a 0% discount rate. It is a 0% “rate of pure time preference”, which is one component of the discount rate. (I’m going to modify my original post to clarify.) Rethink’s calculation is built on calculations from the German Environmental Agency, so I will directly reproduce their explanations for how they did discounting:
“we use the social discount rate developed by Frank Ramsey (Ramsey 1928), which combines the two aspects above: expected consumption growth, weighted by its effect on the marginal utility of consumers, and the pure rate of time preference (PRTP).
In the GIVE model the consumption growth rate is a dependent variable. Therefore, it is not possible to specify the exact discount rate used for the climate costs”
I am not familiar enough with these models to get a good intuition for what discount rate would be, and therefore how much weight will be places on the far future. But as a reference, the Stern Review also used Ramsey discounting and a low (.1% PRTP), and resulted in an overall discount rate of 1.4%.
All of this to say, I think a simple mental model of “no discounting”, and therefore the vast majority of damages being in the far future, is not a good description of the Rethink analysis.
Thanks, Dan, for your reply. I think I still disagree pretty strongly and I’ll briefly outline how and why: (1) I don’t think we should give credence on studies based on government usage, (2) 22 century emissions are clearly very implausible, (3) there are reasons for this to really matter and (4) being able to find this in 5min should make us deeply skeptical of the wider paper. (5) As you, I deeply care about effective climate action but I don’t think we should propagate bad evidence to inflate the importance vis-a-vis other causes.
Should we give special credence to something because the Biden admin and the German EPA used it?
I think the answer is pretty clearly “no”.
As you also mention, SCCs are inherently very uncertain estimates, but they also are clearly political projects; they are often produced or at least amplified to serve political purposes such as justifying more or less ambitious policies.
Given the biases in the climate science community, I think it is upon us to evaluate studies on their merits and to not assume that studies that are well-cited or used by climate hawkish administrations are therefore inherently more credible.
In case that sounds conspiratorial, it’s worth remembering that RCP 8.5 (the most extreme emissions scenario by the IPCC) was essentially abused prominently for 5-10 years as a baseline after it was obvious to all serious observers it was not a baseline but worse than a conceivable worst case scenario.
Given this record of the emissions scenario modeling community, we should always check what they assume.
Why it’s obvious that 22nd century emissions shouldn’t have that high a median
This is obvious to Dan, but for the wider group. The reason the 22nd emissions are so implausible is because they essentially assume that nothing much changes by the 22nd century, 3-5 investment cycles from now. Yes, decarbonizing the world by 2050 might be hard, but decarbonizing the world by 2100 or 2150 is not hard. It’s simply not plausible to believe in a 22nd century that is both richer than today, a hundred years in the future, exposed to a lot of climate damage, and not able to decarbonize.
This is much more than a 15% difference!
This is not about a 15% difference and a 5x over-estimate from this alone is quite plausible. The calculation you run is – as you note – not informative because it ignores the discounting and the implausibility of the Rennert et al paper lies primarily in the 22nd century+ and those will get outsized importance if changing the discounting assumptions.
Yes, by 2100 Rennert looks mildly pessimistic but not widely so, but that’s not the point – once discounting is very low the 22nd century matters and drives most of the result.
The 22nd century is discounted by more than 75% on the RFF explorers lowest discount rate (2%) so this is not a useful tool to explore whether implausible 22nd century assumptions massively inflate the SCC estimate.
And, indeed, we should expect the 22nd century to drive a massive difference when discounting is low. By Rennert et al’s assumption temperature keeps increasing well into the 22nd century, climate damage is non-linear, so on low discounting this will drive a massive amount of the damage and lead to strongly changed estimates.
I am not an economist, but when I Claude the emissions assumptions of the Rennert et al paper and stipulate to make conventional assumptions about climate damage at 0 discount rate, 96% of the damage is after 2100.
https://www.nature.com/articles/s41586-022-05224-9/figures/1
And we can see here why this is. In the Rennert world temperature keeps rising till after Captain Kirk with 25% probability mass above 4.5C. This is very different from what I think we both believe about the future.
This goes beyond this one example I picked this example because it was quick for me to find, having seen this pattern (making deeply implausible assumptions in papers that get a lot of policy traction) so often. But I am sure one could find other instances. The point that it is so easy to find a highly biased assumption cited as mainstream evidence is that one should distrust the broader paper more.
Why I care As you and many readers here, I deeply care about effective climate action and we are together on this project of making the climate response more effective.
But I do think we should not propagate bad evidence to inflate the importance of climate vis-a-vis other causes in the same way that we would also – and correctly – criticize a motivation of AI risk that only relied on Yudkowsky’s p(doom) estimate.
Implausible assumptions rarely come alone and when a paper makes such implausible assumptions (that are not simpler than more reasonable assumptions, i.e. this is not driven by parsimony) then I think we should be quite skeptical of the conclusions of that paper.
Thanks so much for interacting with our work. For broader context around this report, it’s important to note that our approach from the outset was to build a series of models to show what you would need to believe for climate to be competitive with GHD. We therefore aren’t wedded to any particular SCC, and certainly can imagine different ways of approaching the problem.
To your specific points:
It is our view that Rennert is the best middle ground available from current peer-reviewed work. It sits between DICE-2023 (~$66) at the lower end, and estimates that incorporate growth effects like Bilal & Känzig (2024) (~$1,000+ at the same 2% discount rate) at the higher end. So, whilst we agree that some parameters in the GIVE model can be questioned in isolation (your discount rate and impact horizon critique seems reasonable), we feel it is still a sensible middle ground when taken as a whole, in comparison to other peer reviewed estimates currently available.
On adaptation, we feel less optimistic that the principle of ‘richer future = strong adaptation’ will hold for all people (e.g. those most exposed and least able to adapt in LMICs) or all sectors (e.g. agriculture), with the intersection between the two being particularly noteworthy. However, we accept this is genuinely uncertain and that reasonable people will weigh it differently.
Overall, we think our analysis at least supports the re-visiting of climate as a cost-effective cause area within the EA space and we appreciate the various thoughtful comments so far. Thank you for engaging!
Hi Johannes, thank for all the detailed thoughts. I think we’re probably reaching diminishing marginal returns in debating point by point. I will say that we agree that the Rennert et al projections are too pessimisitic, and difficult far future projections can matter a lot with low discounting. Though I think we will need to agree to disagree on the magnitudes of these changes.
There is one technical point that I’d like to bring to your attention, though, that I think does critically matter. The Rethink application of a new discount rate is NOT a 0% discount rate. It is a 0% “rate of pure time preference”, which is one component of the discount rate. (I’m going to modify my original post to clarify.) Rethink’s calculation is built on calculations from the German Environmental Agency, so I will directly reproduce their explanations for how they did discounting:
“we use the social discount rate developed by Frank Ramsey (Ramsey 1928), which combines the two aspects above: expected consumption growth, weighted by its effect on the marginal utility of consumers, and the pure rate of time preference (PRTP).
In the GIVE model the consumption growth rate is a dependent variable. Therefore, it is not possible to specify the exact discount rate used for the climate costs”
I am not familiar enough with these models to get a good intuition for what discount rate would be, and therefore how much weight will be places on the far future. But as a reference, the Stern Review also used Ramsey discounting and a low (.1% PRTP), and resulted in an overall discount rate of 1.4%.
All of this to say, I think a simple mental model of “no discounting”, and therefore the vast majority of damages being in the far future, is not a good description of the Rethink analysis.