Wednesday, December 24, 2008

Merry Christmas

1 And it came to pass in those days, that there went out a decree from
Caesar Augustus, that all the world should be taxed.
2 (And this taxing was first made when Cyre'ni-us was governor
of Syria.)
3 And all went to be taxed, every one into his own city.
4 And Joseph also went up from Galilee, out of the city of Nazareth,
into Judea, unto the city of David, which is called Bethlehem,
(because he was of the house and lineage of David,)
5 to be taxed with Mary his espoused wife, being great with child.
6 And so it was, that, while they were there, the days were
accomplished that she should be delivered.
7 And she brought forth her firstborn son, and wrapped him in
swaddling clothes, and laid him in a manger; because there was
no room for them in the inn.
8 And there were in the same country shepherds abiding in the field,
keeping watch over their flock by night.
9 And, lo, the angel of the Lord came upon them, and the glory of
the Lord shone round about them; and they were sore afraid.
10 And the angel said unto them, Fear not: for, behold, I bring you
good tidings of great joy, which shall be to all people.
11 For unto you is born this day in the city of David a Saviour,
which is Christ the Lord.
12 And this shall be a sign unto you; Ye shall find the babe
wrapped in swaddling clothes, lying in a manger.
13 And suddenly there was with the angel a multitude of the heavenly
host praising God, and saying,
14 Glory to God in the highest,

and on earth peace,
good will toward men.

Saturday, December 06, 2008

Thoughts for the day

Talk is cheap. But listening is free.

In theory, there's no difference between theory and practice. In practice there is.

Monday, December 01, 2008

We ARE doomed! We ARE doomed!

Yesterday I posted a sanguine view of the financial turmoil sweeping over us. There are other views. In this chaos-rich system, as in the climate debate, there are limits to human understanding which lead me to the conclusion that there are no experts, merely points of view.

So here courtesy of Charles Hugh Smith is a pessimistic point of view of the structural realities which have yet to play out:

1. You can't force households or businesses to borrow more money and spend it. Japan's central bank has flooded that nation with liquidity and low interest money for 19 years to little effect.

2. U.S. consumers and corporations are already burdened with staggering debt. Not only can't you force people to borrow more, you also can't force lenders to loan more money to insolvent households and businesses.

3. Whatever money people get their hands on is going to paying down debt and savings. Studies of the first "stimulus package" checks which went out to taxpayers in 2008 revealed that 2/3 of the money was not spent but used to service debt or saved. Future "stimulus checks" will also fail to boost spending; people already have more stuff than they know what to do with.

4. The FIRE economy is dead. Finance, insurance and real estate (FIRE) all prospered for one reason: the velocity of transactions and debt instruments. With the volume of transactions off by 2/3 (real estate) or 99% (home equity loans), the FIRE economy is shrinking fast, with no barriers to further declines. With lending standards rising even as real estate values plummet, there is nothing to stop transaction and debt velocity from falling much further.

5. Governments and corporations alike are living with Fantasyland expectations of revenue. I recently pored over the 2009 fiscal year budget of my town of 120,000 people (general fund spending is $135 million, which doesn't include capital projects or bond-funded spending) and was dumbstruck by the insanely unrealistic revenue expectations.

The city expects to reap the same amount of easy money from real estate transfer taxes (1% of any real estate transaction goes to the city) in 2009 as it did in 2007 and 2008: about $11 million.

Huh? As transaction volumes decline by 2/3 and the sales prices plummet, then how can you possibly expect to rake in the same transfer tax revenues?


6. If lenders make risky loans, they will go under--and most U.S. households and businesses are no longer creditworthy risks. So there you have it: This conflict cannot be resolved. Lenders who foolishly extend credit to over-indebted, risk-laden borrowers will be paid back with losses and insolvency, yet as lending standards tighten and assets plummet in value, the number of creditworthy borrowers in the U.S. has shrunk.

As noted here many times: many of those who qualify for loans are dead set against debt. That's why they're creditworthy--they've refused to take on huge debt for cultural or fiscal-prudence reasons. They have zero interest in taking on debt, even at zero interest.

You can't force people to borrow money, especially when they're already overloaded with debt, and you can't force prudent people to borrow when they have no need for more property, nor can you force people to buy real estate even as the values continue falling.

7. The U.S. already has too much of everything: too many hotels, malls, office towers, homes, condos, strip-malls, lamps, furniture, CDs, TVs, clothing, etc. As 50 million storage lockers filled to capacity with consumer crap are emptied in a desperate move to reduce expenses and raise cash, the value of literally everything ever manufactured will fall to near-zero.

The notion that we "need" more of anything: gone, over, toast. The idea that you can force lenders to lend to uncreditworthy borrowers: gone, over, toast. The idea you can force people drowning in debt to borrow more: gone, over, toast.
So, there you have an opposite view. A bit US-centric, perhaps, but after all it IS the largest economy in the world, at least for now. As the US goes, so goes the world? We'll see.

Sunday, November 30, 2008

We're not doomed! We're not doomed!

You may have noticed, lately, some commotion in the stock markets.

The end of the world as we know it? The beginning of the next Great Depression? Hmmm, perhaps not. How about some perspective?

In 1930, nominal GDP fell by 12.0%. In 1931, it fell by another 16.1% In 1932, it plunged another 23.3%! And in 1933 it finally stabilized with a “modest” 3.9% decline. (source: Zeal Investing).

Depressions are extended periods of intense economic shrinkage. The Great Depression cut the US economy in half in less than 5 years in nominal terms. Adjusted for inflation, the shrinkage was a compound 7.4% per annum. And the current forecasts for the US economy? Shrinkage of less than 0.5% p.a. Far from the end of the world.

Internationally, China has been singled out as becoming a basket case as the US economy retracts and China's export market dries up. How much of the Chinese economy is export driven? 7%. A slow down in China might be overdue, might even be welcome. But it won't be the end of the world.

In Canada oil sands projects are being shelved, to the dismay of the Alberta government which has been forced to cut its forecast budgetary surplus from $8 Billion to a mere $2 Billion. That's the annual surplus, folks. In a province without a provincial debt.

So who is doomed? Well, maybe GM and Chrysler. It's not about your vehicles, guys. It's about your ability to negotiate contracts with your unions. Buy peace by making yourselves uncompetitive? And the various Auto Workers unions must shoulder half the blame for demanding the golden eggs that their employers have granted. Shame on both of you. For this reason and this reason alone, let the corporations and their obligations fail, and let the facilities be brought back into production by people who take their long term responsibilities more seriously.

Who else could be doomed? Pretty much every fancy pants financial institution that lost its ability to judge creditworthiness. But, for reasons that seem plausible, most of them have been bailed out by governments (=taxpayers!) concerned with the very real threat of total failure of the world's financial system. Shielding financiers from the consequences of their own actions is a lot like developing an AIDS vaccine at taxpayer expense and giving it free to the most promiscuous.

Don't get me wrong. We need a financial system so that commerce can occur, be it paying for a meal in a foreign country with your credit card, or having Irrevocable Letters of Credit to enable international shipments. That is the heart, literally and figuratively, of the global economy. But I would tell every recipient of bailout money that there will be no bonus program for their staff until the bailout money has been repaid to whatever government provided it in the first place.

What will you and I experience? Homeowners will find their houses worth less than they were worth last year. Toughest on those who bought at the top. Not the end of the world for others. Good news for those who want to buy a house. Bad news for builders. Good news for people looking to hire a renovator.

Shareholders and pensioners are finding their investment portfolios in ruins this quarter. Many will sell at a loss into the first hints of share price recovery. This behavior is normal but will prolong the slump. Others will recognize the opportunity for what it is - an extended bargain basement sale on high quality stocks. Oh, and on low quality stocks as well. Just because it's cheap doesn't mean it is a good business. Companies without cash flow, with high debt, with customers who can't pay, with facilities in politically unstable areas, will have their weaknesses amplified. Don't buy because the price is low, buy because the stock price of a good business got sucked down with the massive liquidation of leveraged positions as the financial system went through its spasms.

Deflation? Inflation? Who knows. If there is deflation coming, cash is your friend. If there is inflation, low interest debt is like free money. But remember it was low interest debt that got us into this just-burst bubble in the first place, so living within your means and setting real wealth aside for a rainy day are good things, regardless. My guess is that prices continue to fall for a while, which some call deflation, and then all the new money that is being poured into the system begins to exert its inevitable devaluation of the currency and inflation becomes the risk. Watch and see whether central banks raise interest rates to curb this inflation or whether politicians decide that inflation gets them off the debt hook that they are currently busy hanging themselves on.

A couple of countries will emerge from this with strong and respected currencies. Many will not. Real wealth (property, some precious metals, good commodity companies) will always be worth something. Paper wealth (derivatives of unknowable provenance, anyone?) may turn out to be just paper.


Evaluate, then don't be afraid to buy. It's a pre-Christmas sale on stocks, and there are some real gems in the bargain bin. Choose well.

Saturday, November 22, 2008

Simplify

I would not give a fig for the simplicity on this side of complexity, but I would give my life for the simplicity on the other side of complexity.

Oliver Wendell Holmes

Friday, November 21, 2008

Simplify

In pursuit of knowledge,
every day
something is acquired;

In pursuit of wisdom,
every day something is dropped.

Lao Tzu

Sunday, November 16, 2008

Record Russian Temperatures?? How about bad Russian records??

On November 10 there was a bit of a flurry when the Goddard Institute of Space Studies released their monthly temperature data, which showed October to be much hotter than anyone expected, especially in Asia and Russia, which were 3 to 5 C Degrees warmer than normal. But by 4 pm that day it emerged that data for September had been used again for October temperatures, and the big anomaly that had been reported with much fanfare simply...disappeared. Fair enough, stuff happens and anyone can make a mistake.

But
here is an interesting assessment of Russian temperature measurements. It turns out that central heating systems in many Russians cities are truly Central indeed, with a power plant circulating warm water or steam through pipes that feed buildings throughout the city. The pipes are on the surface. The pipes are often not insulated. Can we rely on data from any weather station near such pipes? GISS does. Sounds like a great basis for policy decisions.

Saturday, November 08, 2008

Another handy household hint


Compact fluorescent bulbs are getting better. No longer must you endure the ghostly pallor of 'daylight' colour temperatures typical of fluorescent bulbs of the past.

(They are not perfect and they certainly don't deserve to be made mandatory. We will hardly save the planet by putting all their mercury into landfills, and whatever heat I used to get from incandescent bulbs needs to be made up by burning natural gas, at least in winter
).

But there is still a problem. CFL bulbs do not work with the little $25 solid-state motion detector switches that fit into a standard light switch box -- they will flicker like crazy -- so I have been using incandescents. But when incandescent bulbs burn out, they often burn out the $25 switch at the same time because the surge of current toasts the circuits.
What to do, what to do...

The solution, I think, is a bit of both technologies. I have a motion detector switch near the back door that operates a ceiling fixture in the back hallway. The fixture is an old enclosed glass thing that accepts a pair of bulbs, 40W maximum each, due to the heat buildup inside the glass hemisphere. My solution is to put a 40W conventional bulb and a 13W CFL in the same fixture. The result is lots and lots of light, about half the heat, and no flickering. When that little 40W bulb eventually burns out, I am hoping that the switch survives, although there is no reason why it should, I suppose. But in the meantime I have way more light and lower fire risk.
I should keep my eyes open for a more robust mechanical switch, like the ones you find in outside light fixtures (you can hear them activate). Till then, two types of bulbs will share the spotlight.

Arctic sea ice extent highest in years

Follow the little red line.

Sunday, October 26, 2008

Get into Canada

Get into Canada, financially speaking. The Canadian dollar is ludicrously undervalued vs the USD, we have an economy that produces basic things the rest of the world needs (ie goods and basic commodities, not leveraged credit default swaps), our government budget is in surplus, our trade relationships are healthy and inflation is under control.

But don't take my word for it. Listen to a man who runs a fund that has made a 57% GAIN in the past year. He called the current mess over a year ago. And he has profited from the mess, and he is telling you to get into Canada, financially. As for me, I agree, but then, I am here already. And I could only dream of a 57% gain over the past year...

Friday, October 24, 2008

Sunday, October 19, 2008

Thursday, October 16, 2008

Two great, disturbing quotes

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years."

"Great nations rise and fall. The people go from bondage to spiritual truth, from spiritual truth to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage."

(Authors unknown despite strong research efforts described here)

Saturday, October 11, 2008

Understanding the world through Pseudo-Sumo (rev 1)


I have the opportunity to speak to our staff in a week about the potential impact of the financial distress that dominates the news today. I am comfortable speaking to a big room full of people and being a bit theatrical, so my message won't simply be Death by Powerpoint. I want our staff to be able to think clearly for themselves, not to respond blindly to blandishments from others. In my message I think it will be useful to distinguish between the Economy, the Financial Markets, the Media and our own lives. I am working on an analogy that may help explain things, so please let me know with a comment whether or not the following is helpful.

"Lots of people in this room are concerned about what is going on in the economy and whether it will affect our jobs. In truth, we are in uncharted waters. No one can say for sure what will happen, or when. But our own levels of stress are reduced if we have clearer ways of thinking about what concerns us most. I hope this illustration helps you better understand what is going on.

"The Economy is not the same as the Financial Markets, and the Media is in turn different from each of them. Here is one way to view what is going on:

"The Economy is where people and companies buy and sell things. Farmers are still farming, oil wells are still pumping, kids still need running shoes and a ride to school.

"The Economy needs the Financial Markets, which are and always have been like a wrestling match between a giant named Opportunity and a giant named Risk. Opportunity is the good-looking one, the one with the swagger and the bulging muscles. Risk is the faster, sneakier one, who strikes when Opportunity gets too puffed up.


"But the match is a lot like Pseudo-Sumo, and money is the air in the sumo suits. Opportunity gets puffed up with air money, and by the middle of every round in the fight he gets to look really big. But later in the round Risk always comes in and steals the air from Opportunity, and that makes Risk look really big and Opportunity suddenly looks tiny. Six months ago, Opportunity looked huge; right now it is Risk's turn. The important thing to remember is that this fight is never decided, no matter how much it looks as if one or the other is winning. And the fight is in the Financial Markets, not the Economy.

"Commenting on the Financial Market fight are the wrestling announcers we call the Media. The Media are there to tell us what is going on, but we should remember that one of their objectives is to get us to tune in again tomorrow. So they like to get us excited and a bit fearful. They don't always care about the distinction between the Market and the Economy. They are entertainers at heart.

"And out here in the world is Us. We need to recognize the Economy is still real and active, although it is reverting to a normal level from being overheated. Recognize the recurring battle between Opportunity and Risk in the Financial Markets, and note that we don't know the length of each round. We need to recognize that the Media gives both news and entertainment, and not get too wound up by what is said. And at this point in the battle, where money is in short supply, we need to both take care of our own money and make doubly sure we give our customers full value for their money. Be diligent, prepare for uncertainty, think for yourself."

Comments, dear reader?

Monday, October 06, 2008

A tiny revelation

If you have been watching the US financial system gasping for breath lately, you can be forgiven for wondering why the US $ is as strong as it is. Many gold-bug type pundits are predicting the death of the dollar and the soaring of gold and yet the greenback is hanging in there quite well. Why is this? An article by Ambrose Evans-Pritchard sheds some light.

The dollar is high because so many dollar-denominated loans are being called, and borrowers need dollars to pay their called loans, dollars right now, in large quantities. "There is a wild scramble for dollars as a $10 trillion pyramid of global lending based on dollar balance sheets “de-levers” with a vengeance...International banks are facing margin calls on their dollar leverage."

For now, the dollar is in demand. Later, as all this new money supply works into the system, there will be inflation. Unless (as we read earlier) the central banks can't push things up over the edge into Inflation-Land and the whole mess rides the credit collapse backwards into deflation.

Note my fearless predictions last May that oil and gold stocks would do well. Hmmm, this has yet to happen, in fact a dollar worth of a decent gold stock 5 months ago would be worth half that today. Good thing this is a blog, not an investment advisory service... Having said that, I stand by my opinion that gold, not paper, will offer the greater monetary value in the years to come.

Sunday, October 05, 2008

There is no media bias on CNN

No, really.

Exodus 20:1-4, 7-9, 12-20


In the standard Christian lectionary, we find ourselves today at the Ten Commandments. Note the last couple of verses, where the people would prefer not to be quite so accountable, thank you very much.

20:1 Then God spoke all these words:

20:2 I am the LORD your God, who brought you out of the land of Egypt, out of the house of slavery;

20:3 you shall have no other gods before me.

20:4 You shall not make for yourself an idol, whether in the form of anything that is in heaven above, or that is on the earth beneath, or that is in the water under the earth.

20:7 You shall not make wrongful use of the name of the LORD your God, for the LORD will not acquit anyone who misuses his name.

20:8 Remember the sabbath day, and keep it holy.

20:9 Six days you shall labor and do all your work.

20:12 Honor your father and your mother, so that your days may be long in the land that the LORD your God is giving you.

20:13 You shall not murder.

20:14 You shall not commit adultery.

20:15 You shall not steal.

20:16 You shall not bear false witness against your neighbor.

20:17 You shall not covet your neighbor's house; you shall not covet your neighbor's wife, or male or female slave, or ox, or donkey, or anything that belongs to your neighbor.

20:18 When all the people witnessed the thunder and lightning, the sound of the trumpet, and the mountain smoking, they were afraid and trembled and stood at a distance,

20:19 and said to Moses, "You speak to us, and we will listen; but do not let God speak to us, or we will die."

20:20 Moses said to the people, "Do not be afraid; for God has come only to test you and to put the fear of him upon you so that you do not sin."

Saturday, September 27, 2008

Friday, September 26, 2008

Serious collision causes blizzards*


*(From the "Man bites Dog" school of headlines)
This description of an article from the Proceedings of the National Academy of Sciences presents the thesis that continental drift, specifically the collision of India with Eurasia, capped a voluminous source of CO2 and triggered atmospheric cooling.

Is it always all about CO2? So it would seem, at least for now.

Looks to me like we will have to increase CO2 emissions in order to restore the earth to its natural state.

Saturday, September 20, 2008

1 Picture = 1000 words

It's just a graph based on actual measurements. Satellite measurements, whose provenance has withstood far greater scrutiny than land stations. Rebuttals are welcome, especially if based on data instead of rhetoric.

Of course you may remember my post on this same trend in July.

Link to Allan MacRae's article here.

Thursday, September 18, 2008

Of Course There's a Gold Standard

Whether or not a reserve currency, or any currency, is officially backed by Gold, Gold always remains the standard. Either a fixed amount of paper currency is attached to each ounce of Gold as in a real Gold standard, or there is a variable amount of paper currency attached to each ounce of Gold. The standard still exists.

...

When a paper currency lets its hair down and goes out on the town chasing excessive and seedy ideas and values, it will find Gold standing by in judgement, like the condemnatory parent of a 14 year old schoolgirl who has stayed out overnight. The currency graveyard is full of the bones of government paper currencies that were found guilty of bad behaviour leading to worthlessness under gold's inscrutable and stern gaze.

...

Today Gold sits in judgment on the US$ (amongst other currencies) and has a black hood placed over its head. Gold also sits in judgment on the foolish politicians and central bankers who, without the burden of any self doubt, have led America to bankruptcy. In the words of the worthy Bill Bonner: the day of reckoning has arrived.

Read all of Sam Mathid's excellent essay here.

Saturday, September 13, 2008

Sept 13: Northwest Passage Open

Wow, the ice coverage must be really low. I would like to blame climate change, but the timing seems wrong.

Welcome to Time Magazine, Sept 13, 1937.

Note that one of the vessels involved is called the Nascopie. Nauscopy is a mysterious 18th century technique that involves seeing over the horizon to discern the future arrival of ships. Seems a bit ironic that we have forgotten how to look BACK over the horizon to see ships that arrived 71 years ago.

Tuesday, September 02, 2008

Russian ship circumnavigates Franz Josef Land

This is unprecedented, and was thought to be impossible.

Of course, the news is from 1932. Seems there was a heat wave...

Monday, September 01, 2008

Arctic Ice Growth: How Much?

This link (Arctic Ice Growth: How Much?) is rather relevant to the snippy little exchange of comments that I have had with a reader named PKD re the NSIDC and BBC's reportage thereof.

I think the important point in the article is the selection of the time period over which comparisons are made. Selecting the past 30 years of temperature and ice records captures the warming trend that ended the cooling from 1940 through the late 1970s.
Is it possible that the 30 year satellite record coincidentally represents only one leg of a waveform? Greenland temperature records would hint at that. If you examine only one leg of a waveform, you will absolutely come to the wrong conclusion about the long term behaviour - just as some did during the 1970s ice age panic.

Travelling

Sorry for the silence lately; I have been in Montreal, London, Dubai and now Melbourne since my last blog posting.

Highlights: Drum circles on Sunday afternoons at Jeanne Mance Parc in Montreal, seeing the musical "The Wizard" in London, catching a bit of Dubai, freezing my tail off in Melbourne near the end of the coldest wettest winter in local memory. Also seeing some family en route.

Climate debates are everywhere; scroll down to the "bias at the NSIDC?" posting below and check the comments for a bit of conversation with one of the few other readers of this blog. Feel free to chime in. I also heard from the subject of "Confirmation Bias", who also posted a comment, but it is not my desire to expose her to criticism so I responded off line.

Saturday, August 16, 2008

Laugh laugh laugh


Richard Simmons guests on Whose Line is it Anyway?

Monday, August 11, 2008

Sunday, August 10, 2008

Correlation coefficients


Here is an interesting summary of how CO2 concentrations, solar activity and the big oceanic oscillations correlate to recent temperatures. D'Aleo's original paper is linked here.

Seems to me that there are a lot of factors contributing to temperatures. Why single out the one with the lowest r-squared in order to save the planet?

Saturday, August 09, 2008

Confirmation Bias

To a three year old with a hammer, everything looks like a nail. The scientific term for this is "confirmation bias" which Wikipedia defines as
a tendency to search for or interpret new information in a way that confirms one's preconceptions and avoids information and interpretations which contradict prior beliefs. It is a type of cognitive bias and represents an error of inductive inference, or as a form of selection bias toward confirmation of the hypothesis under study or disconfirmation of an alternative hypothesis. Confirmation bias is of interest in the teaching of critical thinking, as the skill is misused if rigorous critical scrutiny is applied only to evidence challenging a preconceived idea but not to evidence supporting it.
The Students on Ice Expedition aims to take 65 international students and 30 scientists on a 17 day journey around the Arctic.

Coordinator Zoe Caron writes "never before has an expedition been so altered by climate change" and proceeds to describe how weather has affected their itinerary and logistics. Fog developed when temperatures dropped. Ice blocked the ship's route. The daily itinerary has changed and changed again. It's because of Climate Change.

Ms Caron is a co-author of Global Warming for Dummies. For some reason I find this funny. And profoundly sad.

Friday, August 01, 2008

The Boogie-man will get us all

Climate change poses big threat to infrastructure, engineers warn

This week the papers were full of a study which concludes that climate change poses a threat to our health and safety because our roads, water supplies, sewer systems and government buildings will become more vulnerable to multibillion-dollar failures.

I like the headline. What if it told the truth?
"Engineering organization reviews design standards based on new data, expresses concerns that old standards were inadequate"

You'd find the story at the back of the paper somewhere, not on page 1.

A common theme amongst the fear-mongers is that extreme weather events will become more common. Have you paused to ask what records we based our expectations about weather on? Why, on the evidence collected and the records kept by those who came before us. Streamflow varies each year, and records of streamflow (or rainfall, or windspeed, or whatever the topic of interest is) can be analyzed statistically to identify the "hundred year flood", a shorthand way of describing how often a given flood level ought to be expected.


Around here we started systematically recording stream flows and rainfall amounts about a hundred years ago. So the biggest storm in a hundred years establishes what the hundred year storm should look like. If you don't have a hundred years of data, look at the actual distributions and use some statistics to project what extreme events might fill in the tails of the curves.

Much of our infrastructure was designed and built fifty years ago, using civil engineering standards based on weather records that were at the time less than 40 years old. Engineers are no fools, so they put safety margins into their calculations. In my experience civil engineers tend to do this more than the other engineering disciplines because their failures are visible to everyone and (not coincidentally) civil engineers get sued more than the other disciplines.


When someone says that climate (by which they mean weather) is becoming more variable, the public should recognize that the records of weather are encompassing more and more years of data, and the shape of the distribution curve is being altered by new actual data, replacing the projections of the past.

The "Public Infrastructure Vulnerability Committee" of Engineers Canada (you'd have to ask yourself whether a committee with a name like that knew their conclusions before they started their study) states that infrastructure was built with "now-outdated assumptions" in the design standards. So while their conclusions are no doubt defensible and some design will prove to not be up to the task it was designed for, the Boogie-man is climate change. Not engineering standards that were based on all we knew or could guess at the time, but climate change.

Handy for everyone, and might even work to get a guy off the hook in a lawsuit. "Not my fault, I used accepted standards. It was climate change, your Honour".


The Boogie-man will get us all.

Saturday, July 26, 2008

Random thoughts about the quality of climate debates

1. Spend any time at all reading comment wars on climate blogs (example here is from an AGW-friendly blog but there is no monopoly on bad manners) and you will be appalled at the personal and spiteful tone. Clearly the disagreement is not just about science.

2. In a chaos-rich situation like the stock market or climate modelling, people can find data that fits their hypotheses, can build models that fit their preconceptions, and have some success and find plausible reasons for failures, regardless of whatever their position is.

3. Arguments are available at every level, from the validity of current temperature measurements, through whether the earth is warming and if so, at what rate, to whether the warming is unusual, to its possible causes, to whether anything can be done about those causes, to whether anything SHOULD be done, to the costs and benefits of preventive action vs adaptation.

4. On one extreme, it's the future of the planet that is claimed to be at stake. The opposite extreme claims that human freedom itself is at stake.

5. There are well-meaning, serious, sincere people on both sides of the debate. There is also contempt and deep mistrust about the opposite side.

6. My own biases favor doing nothing about CO2, but plenty about pollution; nothing about carbon trading, but plenty about economic opportunities and fair trade for emerging economies; nothing about UN or NGO empowerment but plenty about accountability to substantiate claims made about benefits and risks.

Above all I favor improving the quality of the debate and the transparency of the underlying information. This marks me for some AGW types as a member of the loony right, sold out to industrial interests and uncaring about 'the biggest threat mankind has ever faced'. But in any matter as important as this is claimed to be, where any useful response requires unprecedented economic sacrifice, why would anyone do otherwise?

Wednesday, July 23, 2008

Earth System Governance

I am not one for centralized, command-and-control structures. Bureaucracy worries me for two main reasons:
  1. because even the most well-meaning individuals are vulnerable to making their bureaucratic empires self-perpetuating, and
  2. decisions which are made without personal accountability for the outcomes tend over time to become the wrong decisions.
Part of my suspicion of the AGW religion is that it attracts opportunists who will use it to further their own ambition of telling the rest of us what we can and cannot do, much as Total Quality programs in industry tend (in my experience) to attract bossy people who can't earn authority on their own merits.

I favour complete personal freedom and complete personal accountability over an absence of both. (If you propose instead a system of freedom without accountability then please check back in after you become an adult.)

There is an entity called the International Human Dimensions Programme on Global Environmental Change (IHDP) whose website describes it as:
an international, interdisciplinary science programme, dedicated to promoting, catalysing and coordinating research, capacity-development and networking on the human dimensions of global environmental change. It takes a social science perspective on global change and works on the interface between science and practice. IHDP is a joint programme of the International Council for Science (ICSU), the International Social Science Council (ISSC) and the United Nations University (UNU).
This UN-affiliated institute has published an interesting paper on "Earth System Governance", a label I had not seen before. To quote the paper:

“Earth System Governance entails decision-making about human and environmental interaction from the smallest to the biggest scales: in grass-roots, non-profit, and non-governmental organisations, and city, country, and world-wide governments.”

Hmmm. I note an absence of industry representation in the governance model. And what is the world-wide government? I don't recall seeing the election signs.

The article summarizes the task behind the Earth System Governance initiative:

It is the task of developing integrated systems of governance, from the local to the global level, that ensure the sustainable development of the coupled socio-ecological system that the Earth has become.

The development of theories to understand, and of
strategies to advance, earth system governance evolves today into one of the most important but possibly also most difficult tasks for the social sciences. It involves questions of the emergence, design, and effectiveness of governance systems as well as the overall integration of global, regional, national, and local governance—that is, the quest for effective architectures of earth system governance.”

Does the idea of "decision-making" being guided by well-meaning social scientists and NGOs ensuring that everything we do qualifies as "sustainable" ring loud alarm bells?

Imagine your provincial Human Rights Commission in charge of a bio-fuels program and you have some idea of what might worry me.

Sunday, July 20, 2008

Cooling trend for next thirty years predicted

Addressing the Washington Policymakers in Seattle, WA, Dr. Don Easterbrook said that shifting of the Pacific Decadal Oscillation (PDO) from its warm mode to its cool mode virtually assures global cooling for the next 25-30 years and means that the global warming of the past 30 years is over.

The announcement by NASA that the PDO had shifted from its warm mode to its cool mode is right on schedule as predicted by past climate and PDO changes (Easterbrook, 2001, 2006, 2007) and is
not an oddity superimposed upon and masking the predicted severe warming by the IPCC.

This has significant implications for the future and indicates that the IPCC climate models were wrong in their prediction of global temperatures soaring 1°F per decade for the rest of the century.


Read more at Anthony Watts' blog.

Bias at NSIDC and BBC? You decide


This link is to a report from the (US) National Snow and Ice Data Center entitled "A different pattern of ice retreat" which states:
Arctic sea ice extent on July 16 fell roughly between the extent for the same day in 2007 and the long-term average. The spatial pattern of summer ice loss has evolved differently from last year; this reflects the prevailing pattern of atmospheric circulation. Areas of low-concentration ice are also developing at unusually high latitudes.
The casual reader would grasp from the headline that ice had retreated, and would read the words "Arctic sea ice extent fell" and is below average, and might even grasp that concentrations of ice are lower at high latitudes. The reader would put these thoughts together and worry that the Arctic really was melting. The message is reinforced when the next paragraph includes "extent was below the 1979 to 2000 average of 9.91 million square kilometers (3.83 million square miles)". My goodness, things really ARE getting dangerously warmer up there.

Imagine, then, my puzzlement when the last sentence quoted above goes on to say , "[however] it was 1.05 million square kilometers (0.41 million square miles) above the value for July 16, 2007.

This IS a different kind of ice retreat, a retreat that GROWS ice coverage by 10%.

The BBC was on the story back in June when 2008 and 2007 areal extents were comparable, and their environment correspondent Richard Black posted this story: Arctic Sea Ice Melt 'Even Faster'. It has not been updated or corrected with the graph that appears at the top of today's blog entry, which shows that the sea ice melt has slowed and in the space of a month has fallen two weeks behind last year's pace.

I may just be imagining bias where in fact there are honest and busy people just trying to do their jobs. But why choose wording like "fell" and "retreat" when in fact coverage rose and increased? And BBC, why not give your worried viewers and readers some reassurance that things aren't as bad as you thought?

Update: BBC admits its own bias.

Saturday, July 19, 2008

Four reasons to not waste another penny on CO2 reduction

1. No signature of CO2.
The signature of an increased greenhouse effect is a hot spot about 10km up in the atmosphere over the tropics. We have been measuring the atmosphere for decades using radiosondes: weather balloons with thermometers that radio back the temperature as the balloon ascends through the atmosphere. They show no hot spot.

2. No evidence of causality.
There is plenty of evidence that global warming has occurred, and theory suggests that carbon emissions should raise temperatures (though by how much is hotly disputed) but there are no observations by anyone that implicate carbon emissions as a significant cause of the recent global warming.

3. Temperatures are dropping again.
The warming trend ended in 2001, and that the temperature has dropped about 0.6C in the past year (to the temperature of 1980). Land-based temperature readings are corrupted by the "urban heat island" effect: urban areas encroaching on thermometer stations warm the micro-climate around the thermometer, due to vegetation changes, concrete, cars, houses. Satellite data is the only temperature data we can trust, but it only goes back to 1979.

4. Temperature drives CO2 concentrations, not vice versa.
The new ice cores show that in the past six global warmings over the past half a million years, the temperature rises occurred on average 800 years before the accompanying rise in atmospheric carbon. Which says something important about which was cause and which was effect.

Read David Evans full description of why he went from a CO2 climate modeler and policy maker to a skeptic. He warns that when it comes to light that the CO2 scare is bogus, governments will be regarded as either criminally negligent or ideologically stupid. He concludes by saying "The onus should be on those who want to change things to provide evidence for why the changes are necessary."

Tuesday, July 15, 2008

600 million years of temperature and CO2 concentrations


Because it was cold until the end of the 1970s, a lot of the climate change rhetoric has emphasized the rise in temperatures since then, and the rise in CO2 concentrations that ostensibly causes temperatures to rise. Older generations might challenge the theory based simply on their recall the heat of the 1930s and the global cooling scare of the 1970s, but here is a graph with some real perspective. Note to present-day earthlings: you are living in a cold period, and one with record low levels of CO2.

Question: what is the temperature that we should consider natural, and therefore desirable, for our planet?

Chart from Lord Monckton's paper in American Physical Society's latest publication.

Failing once again to drink the Kool-Aid

A well-meaning individual at the office is organizing an information campaign to help us reduce our carbon footprints.

Isn't laser printer toner mostly carbon? And doesn't paper represent a form of segregating carbon to remove it from the carbon cycle, at least temporarily? The solution seems obvious...

I am dismayed at the reaction to my suggestion that I would do my bit by making sure that I printed more stuff. It was as if they doubted my commitment to their objectives.

Monday, July 14, 2008

It's not a conspiracy

Let's think about Anthropogenic Global Warming, and let's distinguish between conspiracy and delusion.

Scientists are thinkers, but they have no monopoly on thinking and they have no immunity from being human. When I studied climatology in the early 1970’s the dominant theme was global cooling, and the peer reviewed papers were quite aligned that it was real and it was all our fault. It was easy to find evidence to support that point of view, just as it has been easy to find evidence to support the AGW view in the last 20 years.

When dealing with complex and chaos-rich systems, frankly, it is easy to find evidence of pretty much any viewpoint one chooses. The fact that the research money for AGW encourages the popular view can not be ignored when one wonders why so much evidence has emerged in support of that view. It is not a conspiracy (there is no evil mastermind behind all this) it is just humans acting human. One can see its parallels in the stock market every day, where valuations of a given company span a range of 200-300% within a year or two.

So my reaction to AGW hysteria is instinctively to push back against ANY centrally-planned response. Why? Because there is too much chaos to get things right, and the central planners will not be accountable in any meaningful way when it turns out they got it wrong.

Sunday, July 13, 2008

Prices aren't rising

Prices aren't rising, folks, despite what you see at the pump and the grocery store. Prices are in whatever your local currency is, dollars or pounds or shekels or whatever, and the value of your currency is dropping as your duly elected representatives, and the banking system over which they notionally preside, shamelessly inflate said currency by (a) not having it backed by anything real and (b) increasing the supply of your currency faster than your economy is growing.

This act of debasing one's currency actually feels good for a while, perhaps like the warm rush one feels when one wets the bed. Inevitably, however, that warm rush is replaced by cold and smelly sensations. So it is today across our economy.

Forty years ago I worked as a grocery clerk at the local supermarket. Kraft Dinner would go on sale at 6 for $1. Now I would be lucky to find it at $1 per box. Bread was 15 to 23 cents per loaf depending on the brand and (seemingly) how brown it was. The price of Kraft Dinner and the price of bread were pretty good reflections of the cost of their production and handling in the currency of the time; neither could be considered luxury items where pricing included a big premium for their fancy image.

When you complain about the cost of gasoline, or electricity, or bread or Kraft Dinner or beer, pause for a moment and think about how markets work and how prices are set. Producers will seek to cover their costs of production, make a profit to cover their risks and the financing of their new product development, and build their brand image in the minds and hearts of consumers. Governments will want their cut of taxes, both for general revenues and for social engineering purposes, such as to discourage people from driving or drinking too much beer. Retailers need to pay rent and taxes, and retain capable staff. The hidden assumption in examining the pricing of all of this is that the currency underlying these transactions is stable in its value. Manifestly, it is not stable, and has not been since the world began its drift from the gold standard a hundred years ago.

What bothers me most during this inflationary trend is that politicians, with increasing frequency, will climb onto a soapbox and promise price controls or competition reviews to address increasing prices, which are mainly the symptom of the inflation problem which they themselves have allowed to happen. Back our currency with something that has enduring value (gold or silver come to mind) and hold the growth in money supply to the rate at which our economy grows. We will return to price stability and our currency would become the envy of the world.

Ain't gonna happen. We are too busy trying to get warm by wetting the bed.

Friday, July 04, 2008

Maybe Greenland isn't melting after all!

The New York Times will report today that the journal Nature is publishing a summary of Dutch research debunking claims that Greenland's glaciers are experiencing unusual melting.
...[A] new Dutch study of 17 years of satellite measurements of ice movement in western Greenland concludes that the speedup of the ice is a transient summertime phenomenon, with the overall yearly movement of the grinding glaciers not changing, and actually dropping slightly in some places, when measured over longer time spans.
Does this settle any arguments? No, other than the one that debates "the science is settled."

Tuesday, July 01, 2008

It's not about stopping Global Warming

I have been accused in the past of taking things too literally. When I hear "Stop Global Warming" and "Save the Planet" I naturally tend to think I am being asked to Stop Global Warming and, quite soon after, to Save the Planet.

But I am beginning to suspect that this is not what I am being asked, because, frankly, nothing that I can do will either start or stop global warming nor will it either threaten or save any planet, even THIS planet, the one from which I am writing.

No, I am being asked to "Stop being part of a society which engages in things that many of us over here disapprove of although we actually benefit from them every day" and "sacrifice yourself for a higher calling that no one can actually define and whose benefits are elusive if they exist at all".

It's a leap of faith that I am not willing to take. I would rather keep today's economy and today's problems than trade for a third world economy and Lord knows what problems.

Friday, June 27, 2008

This is where it all leads to...

Produce Seller Forced to Dump Kiwi Fruit
Found to be 1 mm too small


A market trader has been banned from selling a batch of kiwi fruits because they are 1mm smaller than EU rules allow.

Inspectors told 53-year- old Tim Down he is forbidden even to give away the fruits, which are perfectly healthy.

The father of three will now have to bin the 5,000 kiwis, costing him £1,000 in lost sales.

Speaking yesterday from the stall in Bristol he has owned for 20 years, Mr Down said: 'It's total nonsense. I work hard enough to make a living without all these bureaucrats telling us what we can and can't sell.

More here from the Daily Mail.

(Seems to me he should appeal the ruling based on something to do with the carbon footprint...)

Now an economic warning from Barclays

We've seen the price of gold take off in the last 24 hours following the US Fed's decision to hold interest rates at current levels. They had little choice, and one should prepare for continued inflation. Now investment advice house Barclays has weighed in with a warning of their own:
Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".

"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.

Thursday, June 26, 2008

Don't try this at home

...unless home happens to be full of gymnasts and circus acts.

Wednesday, June 25, 2008

Blackberry Brickbreaker Addicts

Wow, this blog has had more traffic from people looking for Brickbreaker tips than anything other than information on Mercedes W123 coupes and sedans. Welcome.

You want to know how to get past Brickbreaker level 16, don't you? That is the least forgiving level in the whole game and the sadists that designed Brickbreaker put it before the halfway point of the 34 levels. How do you get past it?

You'll need some spare lives, and some luck. The top center brick at Level 16 always has some sort of bonus in it and you will find out right away what it is. As usual, avoid it if it is Flip, take the 50 points if it is Laser, take it if it is Wrap or Long, and celebrate if it is Gun or Multi. It's these last two that will make level 16 easier. In the case of Gun, use your three shots to clean out the silver bricks between you and the regular bricks. In the case of Multi, you may be able to complete this level without any drama at all. Just send the balls back up when they come down the sides.

If you didn't get Gun or Multi, your game does not have to end here, although chances are it will. If you have lots of lives, wait until the whole stack shifts down one, or at most two steps, then waste a life to get it to stop there. Repeat the sacrifice as soon as it starts to shift down again.

Comments and suggestions are welcome, as always. Note that there are a couple of other posts on the blog for Brickbreaker; look around, take your time, and stop by again soon.

Monday, June 23, 2008

ClimaTautology

ClimaTautology (n)
The practice of relating every extreme weather event to Climate Change, in order to create fear and/or secure funding.

Sunday, June 22, 2008

Razor blades: Too good for their own good?

Razor blade makers face a dilemma. Their products need to be better than the competition but imperfect in terms of how long they last. Their textbook business strategy is to practically give away the handle and then sell replacement blades at high margins. Makers of printers for your home computer make all their profit selling replacement print cartridges, using the same approach.

No doubt you have seen the ads lately by Gillette and others telling us to throw our blades away when the blue strip turns white. Call me crazy or old-fashioned, but I have always thought that the time to ditch the blade was when it started to pull uncomfortably when I was using it. This happens faster with some brands than with others.

There was a time in the late 1970s when Wilkinson Sword made a little razor cartridge that kept its edge seemingly forever. I should have bought a caseload of them, because after about a year they disappeared from the market and were replaced by something less durable.

But Wilkinson still makes disposable twin blade razors that seem to shave for months. I bought a pack in England last fall and am on about the third razor. (I shave first with an electric razor and use the blade to finish the job, in the shower). In contrast, none of the fancy new Lubricated Venetian Blinds last anywhere near that long. BUT!! they still seem to last longer than the makers intended, and we are now having to put up with ads telling us to throw the darn thing out for our own good.

How prone to suggestion are we? Will you throw out a good blade because the strip has turned colour? Will you keep a bad one because the strip is still blue? Me, I will keep an eye out for another pack of Wilkinson disposables next time I am across the pond.

Friday, June 20, 2008

How can these words be antonyms?

Ireful: Angry
Irenic: Peaceful, favoring conciliation

What a great language...
(I admit to knowing that Irene is from the Greek word for Peace and that Ire probably has Latin roots instead. But it's still a great language)

Will someone ever ask "Why?"!

We have heard the Liberal "Green Shift" plan.
We have seen the BC Government's carbon tax.
Pundits are debating the details of revenue neutrality, transfers of wealth, and effect on consumer behaviour.

Will someone please ask the question "What impact will this new tax have on global temperatures?"

The most honest response to this basic question would sound very much like crickets chirping. But you will hear reassuringly sweet words instead. "We must do our part" will be the theme. Our part of what?

At the end of the day, bureaucracies will grow, new tax revenues will slosh around the system and splash into new areas that could not possibly survive without the public teat, and not one lick of difference will be made to the actual climate of the planet, nor to the quality of the air that we breathe.

Cui bono? Not you, not me, and definitely not the environment.

Wednesday, June 18, 2008

ClimaTautologists

Climate is always changing, and weather events always occur. To say that a given weather event is consistent with climate change is true and also meaningless. The term in logic is Tautology:
a. a compound propositional form all of whose instances are true, as “A or not A.”
b. an instance of such a form, as “This candidate will win or will not win.”
Climatologists who associate a weather event with climate change are properly known as "climaTautologists".

You read it here first!

Trends continue until they are reversed

(Courtesy of GoldMoney Market Commentary)

What I appreciate about charting and technical analysis is that it shows what is real, the results of the daily balance between buyers and sellers, greed and fear. Explanations and projections are subjective at best, but the footprints left at the end of every day are unarguable: this is where the market has trod.

Royal Bank of Scotland: Brace for the coming crash

THE ROYAL BANK of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks, also according to The Telegraph.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

h/t to IFAonline.co.uk

Tuesday, June 17, 2008

Peak gas? Not yet in the Lower 48

Just last year, U.S. natural gas production appeared to be maxed out. For nine years, production levels had been stagnant. The only variation in that flat line was the occasional divot caused by a hurricane shutting down producers around the Gulf of Mexico. Decline rates on conventional natural gas wells were actually getting worse, and there was a certain glum agreement that U.S natural gas production would soon mimic the decline of U.S. oil production, irreversibly sliding down the depressing side of Hubbert’s bell curve.

But advanced drilling techniques – specifically horizontal drilling and hydraulic fracturing – have allowed formerly inaccessible deposits of unconventional gas to be exploited. Coalbed methane production (natural gas found in coal seams) is on the rise, and now shale gas production has seen a big uptick.

Unconventional gas now accounts for more than half of natural gas production in the Lower 48.

The most famous unconventional gas basin is the Barnett Shale in Texas, which now produces over three billion cubic feet per day, a big contributor to the surge in Texan gas production, which in turn has increased domestic production noticeably for the first time in ten years.
(courtesy of Casey's Charts).

Sunday, June 15, 2008

Blackberry's brickbreaker...

...is addictive. If you have played it casually you will find the levels of difficulty increasing as you progress through to level 16. If you can get past level 16 it gets easier, to the point where the player becomes almost a spectator as level 34 approaches. Once you beat level 34 the game resumes at level 1 but the accumulated score carries over, as do the all-important accumulated extra lives.

The pace of play picks up the second time through, but the rest of the game remains the same. Not all bounces off the paddle, nor off the walls, are 'true' bounces, which can mess a person up. I can not tell you what happens the third time through, not having got that far.


I am susceptible to addictive games like this one. I rationalize playing it by reminding myself that I don't smoke any more so I don't take smoke breaks, and that one needs to engage in a different kind of thinking from time to time to improve one's overall thinking. But then again, I can rationalize pretty much anything.

This Blackberry Brickbreaker Website has good tips and only one error (which is caught and corrected in the comments). And this other Blackberry forum is worth reading for the comments after someone asked how to cheat.

Tuesday, June 10, 2008

How to kill time at the airport

(If you happen to be a Brazilian soccer player)

The top ten solutions to the world's biggest problems

Sadly, AGW is nowhere near the top ten...

Courtesy of Reason Magazine

Copenhagen, May 30—Where in the world can we do the most good? Supplying the micronutrients vitamin A and zinc to 80 percent of the 140 million children who lack them in developing countries is ranked as the highest priority by the expert panel at the Copenhagen Consensus 2008 Conference. The cost is $60 million per year, yielding benefits in health and cognitive development of over $1 billion.

Eight leading economists, including five Nobelists, were asked to prioritize 30 different proposed solutions to ten of the world's biggest problems. The proposed solutions were developed by more than 50 specialist scholars over the past two years and were presented as reports to the panel over the past week. Since we live in a world of scarce resources, not all good projects can be funded. So the experts were constrained in their decision making by allocating a budget of an "extra" $75 billion among the solutions over four years.

Number 2 on the list of Copenhagen Consensus 2008 priorities is to widen free trade by means of the Doha Development Agenda. The benefits from trade are enormous. Success at Doha trade negotiations could boost global income by $3 trillion per year, of which $2.5 trillion would go to the developing countries. At the Copenhagen Consensus Center press conference, University of Chicago economist Nancy Stokey explained, "Trade reform is not just for the long run, it would make people in developing countries better off right now. There are large benefits in the short run and the long run benefits are enormous."

Nobelist and University of California, Santa Barbara economist Finn Kydland noted that unless the economies of developing countries grow, they will still be mired in the same problems of poverty ten years from now as they are today. "By reducing trade barriers, income per capita will grow, enabling more people in developing countries to take care of some of these problems for themselves."

The remaining top ten priorities addressed problems of malnutrition, disease control, and the education of women. For example, the number three Copenhagen Consensus priority is fortifying foods with iron and iodized salt. Two billion people do not have enough iron in their diets which results in energy sapping anemia and cognitive deficits in children and adults. Lack of iodine stunts both physical and intellectual growth. More than 30 percent of developing country households do not consume iodized salt. Correcting these mirconutrient deficits would cost $286 million per year. The other seven of the top ten solutions include expanded immunization coverage of children; biofortification; deworming; lowering the price of schooling; increasing girls' schooling; community-based nutrition promotion; and support for women's reproductive roles.

Take solution number seven, lowering the price of schooling. Nobelist and Chapman University economist Vernon Smith emphasized that this solution is not about lowering the cost of schooling, but reducing the price faced by poor parents who have to choose between sending their kids to school and having them work to supply household income. Ways to reduce the price is to supply vouchers or channel more public funds to schools. When Uganda cut school fees by $16 per year (60 percent), enrollment nearly doubled, with most of the increase in enrollment being girls. Smith pointed out that research shows that educating girls increases average productivity more than does educating boys. The cost for this proposed solution is $5.4 billion per year.

So what proposed solutions are at the bottom of the list? At number 30, the lowest priority is a proposal to mitigate man-made global warming by cutting the emissions of greenhouse gases. This ranking caused some consternation among the European journalists at the press conference. Nobelist and University of Maryland economist Thomas Schelling noted that part of the reason for the low ranking is that spending $75 billion on cutting greenhouses gases would achieve almost nothing. In fact, the climate change analysis presented to the panel found that spending $800 billion until 2100 would yield just $685 billion in climate change benefits.

Noting that he has been concerned about climate change for 30 years, Schelling argued that tacking climate change will take public policy responses such as carbon taxes to address the issue. Schelling added, "The best defense against climate change in the developing countries is going to be their own development." He explained that funding education to create a literate labor force boosts the productivity of a country enabling economic growth. Economic growth produces wealth that helps people address and adapt to the problems caused by climate change. Bjorn Lomborg, head of the Copenhagen Consensus Center, pointed out that funding research and development of low-carbon energy technologies is ranked at a respectable number 14 out of the 30 solutions considered.

Also low on the list of priorities are proposals to reduce outdoor air pollution in developing country cities by installing technologies to cut the emissions of particulates from diesel vehicles. Other low ranked solutions included a tobacco tax, improved stoves to reduce indoor air pollution, and extending microfinance. These are not bad proposals, but other proposals were judged to provide more bang for the 75 billion bucks available in the exercise.

The experts chose not to bother ranking any of the proposed solutions to the challenge of transnational terrorism. This is not surprising. Even the scholar (funded by grants from the Department of Homeland Security) who did the benefit cost analysis for the Copenhagen Consensus project found that we get just nine cents of value for every dollar spent trying to stop terrorists. Interestingly, the number 1 priority identified by the experts in the 2004 Copenhagen Consensus was combating HIV/AIDS. That dropped to number 19 in the 2008 ranking.

How does the ranking of solutions by the participants in the Youth Forum compare to the experts' ranking? Youth Forum participants also ranked supplying vitamin A and zinc to poor children in developing countries as their number 1 priority. In general, the Youth Forum placed a stronger emphasis on solutions aimed at preventing disease and malnutrition. Here's the list of the Youth Forum's top ten in order, followed by a number in brackets indicating the experts' ranking of the same solution: vitamin A and zinc supplements [1]; malaria prevention [12]; borehole wells [16]; immunization [4]; health and nutrition programs [not ranked separately by experts]; community-based nutrition promotion [9]; iron and iodine fortification [3]; tuberculosis treatment [13]; total sanitation campaign [20]; HIV combination prevention strategies [19].

The biggest difference between the two rankings is that Youth Forum gave the Doha trade negotiations a low priority. Speaking with several participants revealed that trade ended up near the bottom because the youths were concentrating on how to allocate the $75 billion budget. Trade was considered by many to be an issue of "political will" which did not fit into any budgetary category. Interestingly, the experts basically agree with that perception because they deduct no costs from the $75 billion budget when allocating expenditures among their top priorities.

The Copenhagen Consensus process is certainly not perfect. However, its use of benefit cost analysis helps concentrate the attention of policymakers, charitable foundations, and members of the public on the relative urgency and costs of the world's big problems. As the final press release quotes economist Finn Kydland, "It's hard to see how one could do any better in terms of coming up with a well-founded list of where to start for the purpose of the betterment of the dire conditions in much of the rest of the world."

The complete ranking of the 30 proposed solutions to ten of the world's greatest challenges by the Copenhagen Consensus 2008 Conference is available here.