Global warming and economists - SuperFreakonomics is SuperFreakingWrong

Perhaps I have been naïve, but for many years I have held the view that economists were good decision makers and that part of being a good decision maker was to seek out good information. Well-informed decisions, I thought, allowed people to earn better returns, to be better prepared for future events. How wrong I was … about certain economists.

After watching how some of my economist colleagues have communicated their opinions on future economic threats and opportunities resulting from climate change, I have finally realized that many are doing a great disservice to those who rely on their knowledge and expertise. That's right – economic "experts" who opine on climate change are costing their audiences and clients real money. These are often business professionals who pay for information and rightfully expect not to be misled. People who need good information for decision making are being shortchanged.

It is easy to find examples of poor information being purveyed by media outlets such as Fox News (where top management issued a policy mandating that concerns about climate change should be minimized), the Wall Street Journal (which never met a climate skeptic it didn't like), or Forbes magazine (which promotes the views of radical groups like the Heartland Institute as it lurches from scandal to scandal) that oversells its views and under-delivers on reliable information.

We have come to expect biased information from these media outlets. But what about groups and individuals who have been regarded as reliable sources of information? For instance, a recent report on financial news source CNBC found that they significantly over-report the doubts about climate change. Furthermore, they routinely invite business persons to speak about climate change but rarely do they invite an actual climate scientist. As a result, their audience is being misled. They are being denied important information that can be used to protect and grow their assets. That's right. A network media outlet whose job it is to inform their audience is doing the exact opposite.

But let me use a case study to show how bad this type of misinformation can be – and this one comes from a surprising source, Steven Levitt, who is a business professor at the University of Chicago. You may not know him by name, but he has co-authored some very popular books (Freakonomics and SuperFreakonomics). While famous among the general public, Dr. Levitt is infamous among real scientists who found errors in his books so elementary that even first-year college students would not have made them.

Let's just look at a few examples. Perhaps most embarrassing is that of his description of Dr. Ken Caldeira's research – Caldeira is one of the world's leading atmospheric scientists. Levitt claimed that Dr. Caldeira's research "tells him that carbon dioxide is not the right villain". Really? Dr. Caldeira must not have been happy with this claim because on his faculty website he states that carbon dioxide is, in fact, "the right villain". That's right, just click on the link and look at the text right below Dr. Caldeira's photograph.

Dr. Levitt also writes of methane that it is "about 25 times more potent as a greenhouse gas than carbon dioxide," but he did not bother to inform readers that methane is measured in parts per billion in the atmosphere - thus far much rarer than carbon dioxide, which is measured in parts per million.

Dr. Levitt writes that "agnostics grumble that human activity accounts for just 2% of the global carbon dioxide emissions" but never tells the reader that these are gross emissions, not net emissions. In fact, humans are responsible for the entire net increase in carbon dioxide – 40% of the carbon dioxide in the atmosphere at this time has come from human-caused emissions. How could a professor of business not understand the difference between net and gross emissions?

A significant part of his chapter on global warming involves a description of the entrepreneurs attempting to find a geo-engineering solution to the problem of global warming. While discussing these techniques, Dr. Levitt writes that carbon dioxide is not poisonous – in fact, acceptable levels of carbon dioxide in modern buildings can be notably higher than the level in the atmosphere yet still be safe for humans to breathe. While this is true, Dr. Levitt fails to recognize that concerns about CO2 levels in the atmosphere have nothing at all to do with breathing CO2 but rather with the fact that it causes the atmosphere to warm.

Dr. Levitt then states "carbon dioxide doesn't necessarily warm the earth". This is complete fantasy.

What about his amazing claim that solar PV systems can actually warm the planet? More baloney.

I could go on, but you get the point.

Why am I debunking this book now? It was released in 2009, and since that time others have posted excellent takedowns, some even written by his own university colleagues, among others. Instead of another debunking, I want to focus on two important points. The first is that in SuperFreakonomics, the authors propose that instead of reducing our emissions of heat-trapping gases, we should trust our fate to unproven and dangerous technologies for geo-engineering the planet.

One prominent geo-engineering concept is the spraying of particles into the atmosphere to reflect sunlight back out to space. Yep, you read that right. We should pollute the atmosphere in order to counter our pollution of the atmosphere. But even if it did work, the problem of carbon dioxide being absorbed by the oceans (ocean acidification) will not have been solved. If the authors of this book cannot tell the difference between gross and net emissions, if they can't bother to ask a climate scientist whether solar cells would warm the planet, if they could mistakenly state Dr. Caldeira's position, how can they be expected to be correct on something as complicated as geo-engineering?

My second point is that Dr. Levitt is a university professor who has a duty to society to get things right. We do, and should, hold university faculty to a higher standard than Fox, CNBC, the Wall Street Journal and the Heartland Institute.

Are there business or economics experts who actually get the science right? The answer is yes, there are. Some of the groups with the most skin in the game actually understand what is going on. One excellent example is the reinsurance company Munich Re which made a splash with its climate cost declarations. Another great recent example is the article Race of our Lives by Jeremy Grantham of GMO, a large global investment management firm.

So we can see that while groups pushing an ideology, or professors pushing books, have trouble with even basic climate science, those investing real money often have a better track record of understanding the risks we face as we continue to warm the globe. Let's hope that we listen soon enough to do something about it.