Matt Ridley Risk Management Failure Deja Vu

Posted on 22 December 2012 by dana1981

Matt Ridley has published another article in a mainstream media source, this time the Wall Street Journal (WSJ), which has a long history of publishing climate contrarian nonsense. This article is not very different from his previous piece in WIRED magazine, and has already been debunked quite effectively by Climate Progress and Media Matters. However, there is a very simple explanation as to where Ridley has gone fundamentally wrong; it's the same mistake he made in WIRED and in his professional banking career — Ridley still fails to understand basic risk management and wants to wager the future of the Earth's climate on a flimsy argument.

Ridley Makes a Weak Case

The crux of Ridley's article is that he believes climate sensitivity (the total amount the Earth's surface will warm in response to the increased greenhouse effect, including amplifying and dampening feedbacks) is low. To support this argument, Ridley references a few studies which find that climate sensitivity is on the lower end of the range of likely values published in the most recent Intergovernmental Panel on Climate Change (IPCC) report, as well as a blog post written by financier Nic Lewis. We may examine Lewis' argument in a separate blog post, but since it has not been subjected to the peer-review process or published, it is not a very credible or convincing reference.

That's really all there is to it. Ridley believes that climate sensitivity is low based on a couple of cherrypicked studies (and what his financier friend wrote on some blog), and therefore the planet will not warm too terribly rapidly over the next century, and therefore we have nothing to worry about.

Ridley's Rose-Colored Glasses

Unfortunately if the worst case (or even most likely case) climate scenario comes to fruition, there will be nobody to bail out the planet.

It is certainly possible that climate sensitivity is on the low end of the possible range of values (discussed in more detail below), although we would still have to take serious steps to prevent human greenhouse gas emissions from rising so much that even a low sensitivity scenario would result in extremely dangerous levels of global warming. However, only considering the best case scenario — which is precisely what Ridley is advocating for in WSJ and WIRED — neglects the scenarios in which climate sensitivity is not low. If we proceed under the assumption that the best case scenario is true, but it turns out that climate sensitivity is actually not near the lowest possible values, then we will be on a path for catastrophic climate change.

This approach is very similar to the one Ridley took as the non-executive Chairman of Northern Rock, a British bank that, in 2007, was the first in over 150 years to experience a run on its deposits. The bank had allowed itself to become extremely over-leveraged, with debts more than 50 times its shareholder common equity. Ultimately Northern Rock was bailed out, borrowing £3 billion from the Bank of England over the span of a few days in 2007. Ridley was unprepared for the worst case scenario when it came to fruition. Unfortunately if the worst case (or even most likely case) climate scenario comes to fruition, there will be nobody to bail out the planet.

Ridley Cherrypicking

Knutti and Hegerl (2008) presents a comprehensive overview of our scientific understanding of climate sensitivity. In their paper, they present a figure which neatly encapsulates how various methods of estimating climate sensitivity examining different time periods have yielded consistent results. As you can see, the various methodologies are generally consistent with climate sensitivity in the range of 2 to 4.5°C global surface warming resulting in response to a doubling of atmospheric CO2, with a most likely value of 3°C.

Figure 1: Distributions and ranges for climate sensitivity from different lines of evidence. The circle indicates the most likely value. The thin colored bars indicate very likely value (more than 90% probability). The thicker colored bars indicate likely values (more than 66% probability). Dashed lines indicate no robust constraint on an upper bound. The IPCC likely range (2 to 4.5°C) is indicated by the vertical light blue bar.

These results include a variety of different approaches, including studies looking at past historical climate changes, recent changes, and climate model simulations. A project called PALEOSENS recently published a paper in the journal Nature which estimated climate sensitivity based on climate changes over the past 65 million years. Their results are similar to the range in the Knutti and Hegerl study, as well as the IPCC, with a likely range of 2.2 to 4.8°C global surface warming in response to a doubling of atmospheric CO2.

Ridley's case is based on a climate sensitivity of even less than 2.2°C, which means that it is a very optimistic and very unlikely scenario. He has essentially cherrypicked a few studies with the lowest climate sensitivity estimates, and brought in some unvetted blog 'science' by a financeer, while ignoring the vast majority of the body of peer-reviewed climate sensitivity literature.

Ridley Deja Vu All Over Again

Ridley's WSJ piece repeats many of the same mistakes in his WIRED piece — cherrypicking the best case scenario, ignoring the enormous risks if his climate optimism is misplaced, and defending his position with wrong arguments (e.g. claiming that the water vapor feedback is weak, when we know from empirical observational data that water vapor provides a strong amplifying feedback). The failure to take a prudent risk management approach is also a repeat of Ridley's mistakes in the banking industry. Reading Ridley's WSJ piece is like deja vu all over again.

Ridley has simply cherrypicked the most convenient scientific papers to support his optimistic view, ignored the vast majority of the scientific literature, and essentially argued that if we are very lucky, we may avoid catastrophic climate change.

It's true that if climate sensitivity is toward the low end of possible values, and if we manage to successfully reduce human greenhouse gas emissions, we may avoid very dangerous climate change. But what if climate sensitivity isn't on the low end? It is at least as probable that it could be on the high end of possible values, as a recent study by Fasullo and Trenberth (2012) suggests may be the case. If we bank (pardon the pun) on Ridley's optimism and it turns out to be unfounded, we will be on a path headed towards catastrophe. This is a scenario which Ridley consistently refuses to consider, despite the fact that this approach has previously come back to bite him.

A prudent risk management approach involves considering all possible scenarios and preparing for the worst. The worst case scenario here results in climate catastrophe, and we must try to prevent this scenario from occurring by reducing human greenhouse gas emissions. Ridley's approach is an ill-advised gamble, and boils down to one simple question — do you feel lucky? And even if you do, are you willing to gamble with the well-being and security of future generations?