Analogies can be dangerous when you don’t know their limitations, but they can be a good way of distilling a lot of technical details into a central point. A flurry of emails last week resulted in this story at Climate Interactive, about some inebriated decision makers who can’t predict the consequences of their actions. It reminds me of another favorite, cited in Cloudy Skies:
The article gives a fascinating insight into the way international politics struggles with complex technical issues. I was inspired to set up an experiment to test some of the ideas, and hit upon the analogy of using my bath instead of the Earth and taking the water as carbon dioxide. I jammed the plug firmly, and turned one tap to full. I observed that the bath was filling with water. I turned the flow down to 80% – a massive 20% reduction – only to discover that it was still filling but slightly more slowly. At this point I was joined by my neighbour, an American. He pointed out that reducing the flow by 20% was out of the question; we haggled for a bit before agreeing on a reduction to 94.8%. We thought the 5.2% reduction had a nice ring to it. Oddly, the bath was still filling up with water at almost the same rate that it had been initially. My friend then gave me a five pound note to turn the tap down by another 20%. I did so. He then turned on the other tap to exactly counter the 20% saving. I complained, only to be told that he had bought my credits, whatever that means. He then rushed out, returning with a bucket which he put under the second tap. I was so impressed that I did not notice for a moment that the bath was still filling up and that the bucket would soon overflow. We decided we had experimented enough for one day and went off to the pub. We were on our third pint when we remembered that the experiment was still running.
Letter to The Chemical Engineer from A. Lodge (1999)
Unfortunately, even in simple systems, intuition often deserts us. The fact that mental models fail to capture the essence of climate dynamics is but one symptom of this. This Thursday, Drew Jones and I will present a simple model designed to close the gap at the Tällberg Forum’s Washington Conversation, “the climate deal we need.”
Things are bouncing back this morning, but it’s been an ugly week. The broad market is a sea of red:
This is a treemap visualization of market movements, courtesy of FinViz.
From time to time I run across this EIA page on long term oil forecasts. It contains what has to be one of the goofier oil depletion trajectories out there:
Continue reading “Synchronized Drilling?”
Peak oil gets all the attention, but the peak isn’t the problem. Unless your assumptions about the dynamics of oil production are rather artificial, there will be an inflection point before the peak. Symptoms of strain in the system appear as soon as the production rate grows more slowly more slowly than GDP less intensity improvements, or simply more slowly than expected. That’s when price has to begin rising to clear the market, creating the signal to alternatives (efficiency, biofuels, unconventional oil …) that they are needed, so that’s when the pain hits. Whether the pain is brief and results in an orderly transition, or something rockier, is a matter for some debate. Either way, arguing about when the peak might come is the wrong question; we should be considering whether we’re past the inflection point, and thus in a period of rising stress, and what to do about it.
I got a silly chain email, which proposed taking the $85 billion needed for the AIG bailout and distributing it among all 200 million taxpayers, so that we’d each get $425,000 to play with. I decided to test this idea on my boys, who are seven and eight. Ignoring the fact that $85B divided by 200M is $425, not $425,000, we had a conversation about what would happen if the government distributed half a million in cash to every American:
Kid1: That would be generous.
Kid2: That would be hard. There are like 150,000 people just in Bozeman.
Me: Where would the government get that kind of money?
Kid1: Make it (by printing).
Kid2: Steal it from another country.
Continue reading “Kids on the Bailout”
Production and Operations Management 17(4) honors Jay Forrester as an important person in the history of operations management. He joins Kenneth Arrow, Ronald Coase, and William Cooper in the distinction this year. Congratulations Jay!
Hat tip to John Sterman on the SD email list. I don’t have fulltext access to the journal, but if someone sends me a snippet, I’ll post it.
Brad Setser analyzes the Fed’s balance sheet in Extraordinary Times. They sure are:
Several of the economics blogs I read have
had useful roundups of bailout commentary. A few I find found useful:
Do we need to act now? on Economist’s View
9/26 Links on Economist’s View
NYT Economix’ analyst roundup
Greg Mankiw’s roundup of commentary
Real Time Economics’ Secondary Sources
Greg Mankiw with more commentary
Economists Against the Paulson Plan
Brad de Long on Krugman on the Dodd plan
WSJ Real Time Economics’ Text of Lawmakers’ Agreement on Principles
Thomas Palley on Saving the Financial System
Marginal Revolution on the Republican plan to rescue mortgages instead of buying mortgage assets
Marginal Revolution with a Modest Proposal (finding and isolating toxic assets)
Marginal Revolution with substitute bridges
Greg Mankiw with a letter from Robert Shimer with a nice analysis, including problems with Paulson, the lemons problem, and the Diamond, Kaplan, Kashyap, Rajan & Thaler fix
Real Time Economics on securitization
Brad deLong on nationalization (the Swedish model)
The Big Picture with Stop Targeting Asset Prices
Marginal Revolution asks, is the Sweden plan better?
From the ArXiv blog: researchers have discovered a new fractal, closely matching a Sierpinski Carpet, in the boundary layer dynamics of coffee in milk. I don’t know how Rayleigh-Taylor instabilities work, but I do find occasional cool things in my coffee:
Yesterday the WCI announced its design recommendations.
Update 9/26: WorldChanging has another take on the WCI here.
I haven’t read the whole thing, but here’s my initial impression based on the executive summary:
Major gases, including CO2, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.
|Large Industrial & Commercial, >25,000 MTCO2eq/yr
||Point of emission
||Point of emission
||“First Jurisdictional Deliverer” – includes power generated outside WCI
|Small Industrial, Commercial, Residential
||Second Compliance Period (2015-2017)
||Upstream (“where fuels enter commerce in the WCI Partner jurisdictions, generally at a distributor. The precise point is TBD and may vary by jurisdiction”)
Gasoline & Diesel
|Second Compliance Period (2015-2017)
||Upstream (“where fuels enter commerce in the WCI Partner jurisdictions, generally at a terminal rack, final blender, or distributor. The precise point is TBD and may vary by jurisdiction”)
|Biofuel & fossil fuel upstream
||To be determined
||No, if determined to be carbon neutral
|Agriculture & Forestry
(See an earlier Midwestern Accord matrix here.)
Continue reading “WCI Design Recommendations”