Tuesday, April 24, 2007

New global warming bet for $6-$9 thousand established; question is how much of a rise will occur over 10, 15 and 20 years

(UPDATE, JULY 2008: this post is getting a lot of hits, apparently because of an article David Evans wrote in The Australian. Tim Lambert has an effective critique of the article here. Read below for more information about the bet between myself and David.)

Two years after hopping on the climate change betting bandwagon pioneered by several other people, I've finally got my first bet, which I'd consider the third major agreed-upon bet over the issue. Before the details, I want to mention three people who were very helpful: first was James Annan, who put me in touch with my betting partner. I owe James a beer now, and dinners later when I start winning, if he ever comes to the Bay Area (see James' site for more climate betting info). Second, both James and William Connolley gave me very helpful advice on structuring the bet. I didn't always take their advice though, so if the bet's flawed, it's my fault.

Finally, my betting partner/opponent, David Evans of Science Speak, has been extremely civil and reasonable throughout this process, including long periods when I've been out of contact. At my invitation, David has written a detailed guest post about his perspective on the bet and why he's a skeptic, and I hope to get it posted after a trip I'm taking this week. My main problem with David is he's interfering with my ability to be snarky about skeptics. From here on in this blog, references to denialist, septics, etc. involve only skeptics who won't put their money where their mouths are.

So, the details:

We have three bet periods -10, 15, and 20 years - and two bets for each period - an even-odds bet and a 2:1 bet in David's favor. The even-odds bet centers around a temperature increase rate of 0.15C/decade with a 0.02 void margin on either side (bet voids if temps increase between .13 and .17C/decade). The 2:1 bet centers on 0.1C/decade with a .01 void margin. Even-odds bets are for $1,000 each, and the 2:1 bets increase over time, with me betting $1,000, $2,000 and $3,000, and David betting half that. My exposure is $9,000; his is $6,000.

That's the basic bet. We're using five-year averaged Nasa GISS data, available here. We know the roughly-first half of the five years used to figure out the 2007 average had no large volcanic eruptions to affect temps, so we agreed that if a large eruption occurs in the similar period of any of my reference years (2017, 2022, and 2027), the bets for that reference period are voided. Otherwise, no adjustment for volcanoes, El Nino, etc. We've signed an agreement that I think might be theoretically enforceable, but as a practical matter with us living in different hemispheres, that's difficult. The three periods reduce the risk to either of us, though.

So my goal was to engage in a bet where if I lost money overall, then that would suggest a real problem with the science of climate change. Certainly if I lost every single one of these bets, with temperatures consistently increasing at a rate of less than 0.09C/decade over 10, then 15, and then 20 years, that might not disprove the climate change theory but it should leave some heads scratching.

My guess is with the even-odds at 10 years, I've got a 50%-plus chance of winning, less than 30% chance of voiding, and less than 20% chance of losing. With the 2:1 bet, I've got a 5-10% chance of losing (but have double the exposure). My odds should improve a bit at 15 and 20 years as random temperature swings become less important and as climate change accelerates. So at worst, I lose one bet, win most of them, and the rest are voided. Seems pretty good.

Best case though is that I lose everything. My assessment of the state of science would be shaken some, but the chance of climate change being wrong, would be worth it.

Last thought - $9,000 is far from chump change by my standards, but I'm not tapped out yet. Bob Carter, Richard Lindzen, Bill Gray, James Inhofe, all the other prominent denialists - where are you guys? My money is yours for the taking!

UPDATE: Changed total of bet amount to correct figure (not thinking straight here).

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