Global Warming

1. Global Warming Debate and Business Challenges

2. The world has clearly warmed over the last 100 years • A lot of the warming took place between 1970 and 1998 • If warming continues at the average rate from 1910 to 2000, effects on civilization will be severe • There are strong reasons to believe that at least some of the warming after 1970 has been created by business activity

3. The recent climate record according to 3 “standard” models

4. Beyond these basic points, everything is controversial • 95%+ of professional climate scientists don’t agree with my statement that things are controversial, but …

5. Businesspeople have to find their role in a confusing situation • Most climate scientists believe what we are doing to the planet (increasing emissions of carbon dioxide, methane) is certain to cause catastrophe • But a few do not • Richard Lenzen, Alfred Sloan Professor of Climate Science at M.I.T. • John Christy, NOAA-funded researcher at U. of Alabama • Experts in seemingly related fields are skeptical • Forecasting, decision science • The stakes are high

6. Business has to deal with… • contradictory claims; • threat that we may seriously damage civilization. • A big question: Just what is our responsibility?

7. Earth’s climate varies from year to year and century to century • Much of human history took place during ice ages • Emergence of agriculture and spurt in population took place just after a moderate warming • After that climate was unusually stable • Warming was noted in the 1930s, continued to the 40s, but was reversed 1945-1971 • Maybe because this was the era of high particulate-emitting cars and factories in America and Europe?

8. Warming resumed after 1971 • Today the earth is at least 1〫or so warmer than in 1910

9. Lots of things can heat the earth • Most are poorly understood • But clearly, some gases let more heat come in than they allow to go out • Business activity is increasing the amount of these gases

11. But it’s complex to determine how much heat stays • And some things humans do make things cooler • Soot in the atmosphere • Mainstream climate scientists’ models suggest current trends lead to 3〫more warming by 2010 • and much more heating after that • Carbon burned today stays in atmosphere a long time • Many climate scientists thing things will be worse • They’re asked to be ‘cautious’ in their projections • Today’s models don’t include recent developing world acceleration

12. Serious consequences are predicted • Heat waves • Stronger hurricanes • Change in locations where rain falls • Higher sea levels • Less food production in tropical countries • But more food production further from the equator • Not necessarily the end of civilization, but not a world we’d like to see

14. Are there good reasons why some are skeptical? • John Christy, a co-author of the original IPCC reports, says: • Standard estimates overstate warming because of urbanization around the temperature measuring sites • Parking lots, new air conditioners, buildings radiating heat have been created near some measuring equipment • Christy & Spenser measure temperature using NASA satellite data, get much lower numbers • “The real atmosphere has many ways to respond to the changes that increased CO2 forces on it” • Some data suggests as earth warms, cloud cover increases, limiting warming

15. Not all “scientific consensuses” are correct • In recent decades, researchers in forecasting and decision sciences have tried to identify when ‘expert opinion’ is reliable • Their rules say: Create a simple causal model • They say if the model is complex and contains lots of uncertainty, it isn’t reliable • So they’re skeptical about standard climate scientists • Armstrong (forecasting expert) says: do nothing • Christy says: Build nuclear power

16. Have businesspeople had to deal with debates like this in the past? • Yes, often. Some non-successes • Psychological testing programs • Econometric forecasting • Psychoanalysis • But probably never with such high stakes

17. So how should we think about the threat of global warming? • At minimum, the global warming story is a careful but potentially fallible weather forecast • It may be wrong • But so might the forecasts today on weather.com • The fact that forecasts might be wrong doesn’t prevent us from refusing to go on picnics when forecasts say it will rain

19. Challenge – and opportunity • Standard science argues it’s important to keep global temperatures from rising more than 2〫 • Standard estimates suggest big declines in greenhouse gas emissions are needed to keep rise to that level • Because carbon entering atmosphere today stays for 200 years or so, gas produced post-WW II is just beginning to affect the earth • Demanded cut are unlike anything close to passing Congress • A WW II-level mobilization?

20. Meaning for business • Energy is by many measures the world’s largest industry • If it’s changing rapidly, there will be lots of opportunity • (If China’s currency is undervalued, the opportunity may go to China)

21. To the extent that the standard theory is followed, lots will change • Government will remake the energy world • Silicon Valley business can prosper • It won’t be surprising if others resent us • While many businesspeople may prosper, there will be need for many to sacrifice