Thursday, March 13, 2014

Economic Models vs Climate Models

The New Economics Foundation is a UK think tank. They just put out an analysis claiming that climate models are at least as accurate as economic models and somewhat better on average. That being said, we don't treat economic models as serious planning tools 80 years out. We barely believe them for decisions 10 years out.

This is why Rep. Ryan's observation in 2012 that the US economy will shut down in 2027 according to CBO estimates of current path spending didn't freak the entire country out. Nobody believes that is a credible forecast. Too many things will change in the intervening 15 years to get worked up about it.

You can see Tim Geithner trying but not entirely succeeding in laughing at the ridiculousness of projecting things out past ten years. The relevant section about the economy shutting down is between 2:20 and 2:40 in the video below.

so even granting the point that climate models are just as good as the economic models, they must suffer from the same sorts of limits to forecast that the economic models do. Perhaps they are a bit better, perhaps not. Let's be generous and give them 15 years. Virtually no climate measures are justifiable based on the climate model projections 15 years out. The scary numbers don't show up for decades beyond. So who are they trying to fool here?