Move over Madoff. Introducing the Mother of all Ponzi Schemes (sadly, Mother Nature doesn't do bailouts)

From Joe Romm's blog article, "Is the Global Economy a Ponzi Scheme?"

"By enriching those who did the most plundering the most, we enabled them to fund lobbying and disinformation campaigns to convince substantial fractions of the public and media that there is no Ponzi scheme — that global warming is “too complicated for the public to understand” and nothing to worry about. In our case, investors (i.e. current generations) are paying themselves (i.e. you and me) by taking the nonrenewable resources and livable climate from future generations. To perpetuate the high returns the rich countries in particular have been achieving in recent decades, we have been taking an ever greater fraction of nonrenewable energy resources (especially hydrocarbons) and natural capital (fresh water, arable land, forests, fisheries), and, the most important nonrenewable natural capital of all — a livable climate."


(A climate Ponzi Scheme? I chuckled when I read the headline, but after reading this carefully I have to admit that all of us have been suckered. The western world has been binging on cheap energy, we are, in a very real sense, "paying ourselves" with wealth from future generations. It's good to be a little skeptical in life, to not take anything at face value. I wish someone had taken me aside and explained about those nasty Nigerian e-mail scams before I sent along my social security number and Am Ex information. Duh! After reading this post I am more convinced than ever that there really is no free lunch. Actions have consequences. My father, who fled Communists in East Germany, who's relatives were hung for conspiring to assassinate Hitler, taught me this at a tender age. He's very conservative in his politics - always has been. On more than one occasion he reminded me to "never take my freedom for granted." But as I keep [pleading] with my father, climate change transcends day to day politics. Science and politics can be oil and water. Some day soon we're all going to wake up with a severe headache, a global fever, and wonder in an acrimonious cry how we got here? How were so many of us deceived and deluded by a handful of professional deniers, lobbyists and "flat Earthers" into not taking meaningful action sooner? Temporary insanity? Fear of the unknown? It defies common sense. Galileo was persecuted for believing the science, that the earth rotated around the sun, and not vice versa. He risked everything to make his point and elevate our understanding of how the universe really works. There are still notable gaps in that understanding. We're learning more and more about climate, and how rapid industrialization and massive spikes in carbon-based energy consumption are impacting climate today. Like the tobacco lobbyists in the 70s who kept doubt and uncertainty alive "you can't PROVE that smoking causes lung cancer, can you?" the current energy lobby and their scientifically-challenged SWAT teams of bloggers are keeping an undercurrent of doubt and uncertainty going. Yep, this cool spell PROVES that global warming is a scam! Never mind the 80s and 90s in Alaska and the Canadian Yukon and Siberia, that's just an inconvenient nugget of irrelevant information. If you're worried about climate change that makes you a flag-waving liberal, you're somehow swept up in the religion of global warming, one of those brainwashed Gore sycophants. Oh how I love labels and stereotypes. Both sides are guilty of this. It's sad that we have "sides" at all. O.K. Time to freshen up my lungs with a case of cigarettes, then head outside to watch the sun do circles around the Earth. Sounds like a good time huh?) - P.D.


Is the Global Economy a Ponzi Scheme?

Joe Romm, Physicist, Climate Expert, climateprogress.org

Yes, homo “sapiens” sapiens have constructed the grandest of Ponzi schemes, whereby current generations have figured out how to live off the wealth of future generations. Yes, we are all in essence Madoffs (many wittingly, most not) or at least his most credulous clients. What comes next will be the subject of a multipart series.

I had been planning to write something on this for a while when NYT columnist Tom Friedman interviewed me for “The Inflection Is Near?” which appears in today’s New York Times:

“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows.

“You can get this burst of wealth that we have created from this rapacious behavior,” added Romm. “But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate …’ Real wealth is something you can pass on in a way that others can enjoy.”

A few years ago I thought that aggressive action by governments around the world to push clean energy could spare the public dramatic lifestyle changes in the coming decades, but I have been convinced otherwise by

• the failure of U.S. leadership [thank you George W. Bush and the conservative movement stagnation]
• the remarkable shift in our understanding of climate science in the past two years (here, here, and here)
• China’s decision to join the Ponzi scheme full throttle and emulate our rapaciousness (see here and here), and
• a recent, brilliant talk I heard (a teaser for a future post).

The adults, in short, are not standing up. Sadly, most haven’t even taken the time to understand that they should (see “Most opinion leaders just don’t get global warming“).

And so every generation that comes after the Baby Boomers are poised to experience the dramatic changes in lifestyle that inevitably follow the collapse of any Ponzi scheme.

This global Ponzi scheme is not just a metaphor (see “The greatest thing by far is to be a master of metaphor”), but for me a central organizing narrative of how to think about the fix we have put ourselves in (see How Lincoln framed his picture-perfect Gettysburg Address, 4: Extended metaphor).

What exactly is a Ponzi scheme? Wikipedia has a good entry:

A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit. The term “Ponzi scheme” is used primarily in the United States , while other English-speaking countries do not distinguish colloquially between this scheme and pyramid schemes.

The Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The perpetuation of the high returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going.

In our case, investors (i.e. current generations) are paying themselves (i.e. you and me) by taking the nonrenewable resources and livable climate from future generations. To perpetuate the high returns the rich countries in particular have been achieving in recent decades, we have been taking an ever greater fraction of nonrenewable energy resources (especially hydrocarbons) and natural capital (fresh water, arable land, forests, fisheries), and, the most important nonrenewable natural capital of all — a livable climate.

The rest of Joe's thought-provoking post is here.

Thaw Point

(The past few weeks we've been tracking temperatures in the 70s and 80s precariously close to the Arctic Circle. The Canadian Yukon has experienced 90s in recent days! Kind of cool, huh? Not really. Here's what makes the hairs on the back of your neck stand straight up. Unusually warm spells WAY north, unnaturally far north, may release prodigious amounts of methane, a GHG, greenhouse gas 25 times more potent than carbon dioxide. The more methane released, the warmer it gets, the warmer it gets, the more methane is released....and so on. This is an example of "positive feedback", a runaway cycle that worries climate experts. What keeps these guys (and gals) awake late at night? The notion that unusual warming unusually far north is leading us closer to a "tipping point", a point of no return. That's why this article, coming after a spell of record warmth across FAR northern Alaska and Canada, caught my eye).



The Arctic tundra is one of the world’s most extensive ecosystems, and the frozen soil known as permafrost, which underlies it, can be hundreds of metres deep. But as the world warms up in response to the millions of tonnes of carbon dioxide and other greenhouse gases being poured into the atmosphere each year, so does the permafrost. As the permafrost thaws, bacteria start chewing up the organic matter it contains. This releases yet more carbon dioxide, as well as methane, another greenhouse gas, which has 25 times the warming potential of CO₂. Edward Schuur of the University of Florida in Gainesville, a doyen of the field, estimates that the world’s permafrost contains twice as much carbon as its atmosphere. If even a fraction of that were released as CO₂ and methane, it would be bad news.

Nor is that all. Thawing permafrost also leaks nitrates and phosphates into the tundra, allowing novel plant species to get a foothold in what was, to start with, a fairly spartan habitat. It distorts the Earth’s surface, too, creating a landscape of domes and pits known as thermokarst because of its resemblance to the karstic terrain of limestone-rich parts of the world. This changes the tundra’s ecology. It also plays havoc with human structures, such as buildings, roads and pipelines, that sit on top of it. For all of these reasons, then, more research is needed into this icy realm. And that is the object of a project with the unsnappy name of Spatial and Temporal Influences of Thermokarst Failures on Surface Processes in Arctic Landscapes, which was kicked off by a group of scientists who gathered in late June at the Toolik Field Station in northern Alaska.

The complete Economist article is here.

Climate activists in denial

The phrase “climate change denier” has a nasty ring to it. It links those who dispute mainstream science on global warming with “Holocaust deniers”. They are not just wrong, it implies, they are evil.

But the climate change lobby is in the grip of its own form of dangerous fantasy. It is in denial not about science – but about international politics.

At the moment, efforts to deal with global warming are focused on a huge international summit in Copenhagen in December. But the chances of Copenhagen delivering a deal that meets the goals for carbon dioxide emissions set by the United Nations Panel on Climate Change is vanishingly small. In private, many climate change activists will admit this. But Copenhagen is the only game in town – so they keep playing.

The first UN agreement on climate change was struck in Rio back in 1992. But in the intervening years, the rate of CO2 emissions has risen steadily – seemingly undeterred by huge emissions of hot air at UN conferences.

It was convenient to blame the lack of international progress on George W. Bush. But it is becoming increasingly apparent that the arrival of Barack Obama in the White House will not be the game-changer that many climate change activists hoped for. The House of Representatives in Washington has passed a bill to limit carbon emissions. But its provisions are so mild that they seem unlikely to make much impact. The climate change lobby hoped that if the US took the lead with new laws, the rest of the world would respond. There is little sign of this.

*I found this article to be on the money, and terribly depressing. I think there is more than a glimmer of truth to this. Doing the right thing - for future generations - will be terribly expensive and politically risky, requiring a level of international agreement that may just be wishful thinking at this point. In an age of massive deficits, economic malaise, special interests lobbying - in most cases, successfully - to retain the current status quo, and a rather alarming level of scientific ignorance, the odds are stacked firmly against the upcoming Copenhagen meeting resulting in any true global breakthroughs. Scientific ignorance? A recent study highlighted 88% of America's professional scientists who believe climate change is real and the planet is warming. By comparison 49% of Americans believe global warming is real. That disparity fills me with confidence. Tomorrow maybe I'll regain some sense of (naive) optimism, but today I'm bummed. The scope of this problem is so big, so reliant on America's best minds coming together (the energy equivalent of America's 1969 moon shot), so dependent on a level of international cooperation - it would be almost impossible to achieve, even if the global economy was rocketing along at breakneck speed!

As it is, I'm increasingly convinced that we will have to adapt. There, I said it. There is probably only so much we can do to mitigate the warming, in spite of good intentions and promising (renewable) technologies. We will have to figure out how to survive, and hopefully thrive in a warmer, stormier world. The thing is, America will be able to do just that. We have the wealth, we have the entrepreneurs to adapt, to build levees and dikes along America's coastline, to develop new, drought-resistant crops, enhanced infrastructure able to withstand more flash flooding....we'll eventually figure it out and adjust.

Unfortunately (and here is where this becomes a moral issue) the nations likely to experience the most horrific symptoms of warming are also the poorest. There will be mass migrations on a scale that have never been seen before - endless searches for clean water and reliable food supplies that may spark riots, civil wars, regional conflict.

The rest of this (thoroughly depressing, but dead-on) article is right here.

Disaster insurance losses close to $11 billion in first half of '09

By Geir Moulson, Associated Press

BERLIN — Natural disasters and severe weather caused insurers above-average losses of $11 billion in the first half of this year, with a winter storm in southwestern Europe and tornadoes in the U.S. incurring heavy costs, a leading reinsurer said Monday.

Munich Re AG said the costs between January and June were "somewhat above the average for the same period in the past 10 years" of about $10 billion.

Total economic losses, including losses not covered by insurance, were $25 billion, far below the average of $42 billion, Munich Re said. The number of people killed in natural disasters was 3,000 — compared with a 10-year average for the January-June period of 24,000.

However, many of this year's disasters so far hit relatively well-insured areas.

The most expensive single event was a winter storm which hit northeastern Spain and southwestern France in late January and caused insured losses of $2.3 billion, Munich Re said. Total economic losses were $3.8 billion.

Click here for the complete article in USA Today.

Off the chart drought in Texas, tornadoes in New York

MSNBC has an alarming report about the extreme weather conditions happening across the country. In Texas, half the corn crop is dried up, lakes have disappeared, cattle ranchers are selling cows early because there is no grass to graze on, and 77 counties are designated as having exceptional or extreme drought conditions. Historians say this drought is virtually unprecedented, and there is no relief in sight.

Click here to watch video of the historic drought gripping the southern third of Texas. Nothing short of a couple of hurricanes or tropical storms will provide relief anytime soon.

Scientists expect wildfires to increase as climate warms in coming decades.

This graph shows the percentage increase in area burned by wildfires, from the present-day to the 2050s, as calculated by the model of Spracklen et al. [2009] for the May-October fire season. The model follows a scenario of moderately increasing emissions of greenhouse gas emissions and leads to average global warming of 1.6 degrees Celsius (3 degrees Fahrenheit) by 2050. Warmer temperatures can dry out underbrush, leading to more serious conflagrations in the future climate. (Credit: Loretta Mickley, Harvard School of Engineering and Applied Sciences)

ScienceDaily (July 29, 2009) — As the climate warms in the coming decades, atmospheric scientists at Harvard's School of Engineering and Applied Sciences (SEAS) and their colleagues expect that the frequency of wildfires will increase in many regions. The spike in the number of fires could also adversely affect air quality due to the greater presence of smoke.

The study, led by SEAS Senior Research Fellow Jennifer Logan, was published in the June 18th issue of Journal of Geophysical Research. In their pioneering work, Logan and her collaborators investigated the consequences of climate change on future forest fires and on air quality in the western United States. Previous studies have probed the links between climate change and fire severity in the West and elsewhere. The Harvard study represents the first attempt to quantify the impact of future wildfires on the air we breathe.

The complete article at ScienceDaily.com is here.

Revealed: the secret evidence of global warming the previous administration tried to hide

Satellite images of polar ice sheets taken in July 2006 and July 2007 showing the retreating ice during the summer. Photograph: Public Domain.

Graphic images that reveal the devastating impact of global warming in the Arctic have been released by the US military. The photographs, taken by spy satellites over the past decade, confirm that in recent years vast areas in high latitudes have lost their ice cover in summer months.

The pictures, kept secret by Washington during the presidency of George W Bush, were declassified by the White House last week. President Barack Obama is currently trying to galvanise Congress and the American public to take action to halt catastrophic climate change caused by rising levels of carbon dioxide in the atmosphere.

One particularly striking set of images - selected from the 1,000 photographs released - includes views of the Alaskan port of Barrow. One, taken in July 2006, shows sea ice still nestling close to the shore. A second image shows that by the following July the coastal waters were entirely ice-free.

The photographs demonstrate starkly how global warming is changing the Arctic. More than a million square kilometres of sea ice - a record loss - were missing in the summer of 2007 compared with the previous year.

The complete article in the U.K Guardian is here.

Strong evidence that cloud changes may exacerbate global warming

This image shows unique cloud patterns over the Pacific Ocean of the coast of Baja California, an area of great interest to Amy Clement and Robert Burgman of the University of Miami and Joel Norris of Scripps Oceanography, as they study the role of low-level clouds in climate change. (Credit: NASA)

ScienceDaily (July 24, 2009) — The role of clouds in climate change has been a major question for decades. As the earth warms under increasing greenhouse gases, it is not known whether clouds will dissipate, letting in more of the sun's heat energy and making the earth warm even faster, or whether cloud cover will increase, blocking the Sun's rays and actually slowing down global warming.

In a study published in the July 24 issue of Science, researchers Amy Clement and Robert Burgman from the University of Miami's Rosenstiel School of Marine and Atmospheric Science and Joel Norris from Scripps Institution of Oceanography at UC San Diego begin to unravel this mystery. Using observational data collected over the last 50 years and complex climate models, the team has established that low-level stratiform clouds appear to dissipate as the ocean warms, indicating that changes in these clouds may enhance the warming of the planet.

The complete article in ScienceDaily is here.

Texas drought could be the worst ever

(The drought gripping the southern 1/3 to 1/2 of Texas is described as "extraordinary", the worst in 50 years or more. A slow-moving tropical storm or hurricane might help, but no rapid improvement is expected before sometime in 2010 at the earliest).

LUBBOCK, Texas — Drought in Texas has led to an estimated $3.6 billion in crop and livestock losses, and without ample rains, the year's final tally could top the state record set in 2006, Texas agriculture officials say.

Crops and rangeland are scorched from lack of rainfall and record triple-digit temperatures throughout parts of Texas — the nation's second-largest agriculture state behind California. Much of the central and southern parts of the state have been in the two most severe stages of drought for months.

Agriculture officials in the state, which leads the nation in cotton and cattle production, estimated Monday that total crop losses attributed to the drought that started in November have reached $2.6 billion. Livestock losses have reached an additional $974 million. And officials have not yet tallied how much ranchers will lose from having fewer cattle to breed or from selling calves earlier than usual because they don't have pasture on which their animals can graze.

It could be two years before a reduced beef supply and higher prices hit the grocery store, said Travis Miller, a drought specialist with the Texas AgriLife Extension. He noted that many cattle being sold at Texas sale barns will end up in states where grazing lands are better.

The complete USA Today article about this historic drought is here.

Drizzle causes emergency in Chilean city

SANTIAGO, Chile (AP) — In one of the driest regions on Earth, even a drizzle can cause an emergency.

Less than 1/100th of an inch of rain fell on the Chilean port city of Iquique Monday afternoon, accompanied by moderate winds of about 10 mph, according to the country's weather service. That was enough to knock out power to several neighborhoods and to damage the roofs of 4,000 houses, said Gov. Miguel Silva.

Schools were closed Tuesday so that officials can repair the damage.

The city of 170,000 people in northern Chile is in the heart of the barren Atacama Desert, squeezed between the Andes and the Pacific Ocean. It averages about 0.02 inch of rain a year, according to University of Chile meteorologists.

Houses in the region are not built to resist rain and their roofs often have no slope for runoff.