Sunday, April 26, 2015

A Rashomon update on climate betting

So 2015 is coming in hot, .75C in January and .79C above base period in February, and nothing indicating that March is cooling. The rest of the year can be slightly colder than 2014 and still end up a record, the first time since 1998 that we had record years back-to-back.

While short term data on climate isn't especially meaningful, I have a particular interest in this - in addition to the minor issue of human and environmental welfare, I've got $9,000 riding on it. David Evans and I made a series of bets in 2007, and 2015 is the first year that starts counting against the baseline. David has the details here, but to sum up it's comparing 5-year averages, and we're betting both on temps warming either somewhat less than IPCC projected for the next few decades or much less (David acknowledges some warming is possible). I need temps to increase .13C/decade over the 2005-2009 baseline to win one bet and not lose/void the other one, and .18C/decade to win both.

The Rashomon aspect comes from whether the bet looks like good news or bad news depending on your focus. I'm winning the first two months of the five year period from 2015 to 2019, which is good for me but not all that definitive. Prior to 2015, comparing years that didn't count, I was losing the bets, and prior to 2014 I was losing them badly.

One way to view it:  if you focus just on the stats and forget all your priors about the science, and if you ignore the stats for the many years preceding the baseline period, then I think you'd rather be in David's shoes than mine, despite my little head start. If 2015 stays warm at the end of this year then you might feel differently, even retaining this constrained viewpoint.

I think it's a reasonable perspective, but too constrained. If you look at a longer period and consider reasonable scientific priors about what you expect to happen, then I think I still have good bets. There's also what I said in 2007 that I "at worst lose one bet, win most of them, and void the rest." I also said I had the best chance of losing the early 10-year bets as opposed to the longer 15 and 20 year bets. Not so different from my expectation.

The other interesting bet to look at is James Annan's, where he's over halfway through the determining period for his bet. He's coy about it but he's trouncing his betting partners who thought temps would actually decline compared to 1998-2003.

A perspective I think would be interesting to hear from is the two men he's betting with. While their economic interest would be to wait and hope for a miraculous change, they have other reputational interests. Rather than continuing to be wrong this year and for the next two years and then finally paying up, I'd end the period of being wrong now if I were them, write James a check, and start being right.