# Outside the Beltway

## Global Warming and Statistics

One of the potential problems/complaints with the Anthropogenic Global Warming (AGW) issue is how the data is often presented for public consumption. Frequently one will see graphs such as these two,

Clearly the trend line (the white lines in the two graphs) are statistically significant. But is anybody out willing to say that these trends are “real”?

If you answered “No,” then you pass. The problem with first one is that it is genereted via a random walk,

yt = yt-1 + et.

The problem with the second graph is that it was generated by an autoregressive process of order 1 (AR1),

yt = b*yt-1 + et,

where b is greater than zero and less than one in absolute value, and in both equations e is the error term that is normally distributed. In short, the trends are spurious. Further, in both of the specific cases above if one were to extend the data set to N = 1,000 the sign of the coefficient for the trend variable would reverse itself Now, at the same time just because this potential problem exists it does not mean that it is indeed a problem with the data.

This brings us to studies of attribution. That is the study where the causes of global warming are disentangled. How much of global warming is due to man, changes in solar irradiance, etc. These are things that are not discernable from a simple linear trend model. Take for example the second model. The coefficient on the trend variable is .00898. If this were temperature data that might be 100 years worth of temperature data and the coefficient would represent the increase in temperature per year (about 1 degree per century). However, even if this trend is legitimate it might still be the case that the anthropogenic portion of that warming is say 20%, that is about .2 degrees for the last century. This is important because it gets to the heart of the mitigation issue. If the anthropogenic portion is not large then mitigation efforts might do very little and we’d be essentially wasting money.

Further, there are problems with the data that is used for this. The data has a short history. The data has both anthropogenic and natural influences that are not related to global warming (the urban heat island effect for example). There is also paleoclimate reconstructions, but in looking at the IPCC reports on this a limited number of studies are referenced virtually all of these are in some way connected to Mann et. al. 1998 which is the cause for a great deal of controversy.

For all of these reasons, I find the portrayal of global warming via simple linear trends dubious at best and quite possible outright misleading. Having a good understanding of the underlying process is essential to good modelling. Personally, I’m not convinced, based on what I’ve read, that the understanding is all the good. In any event I wish the use of simple linear trends were not used. Granted it makes communicating the results more difficult, but I think it would be more informative.

FILED UNDER: Climate Change, Science & Technology, Uncategorized,
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

1. Boyd says:

Huh?

Oh, “insufficient data.” I understand. 🙂

2. Steve Verdon says:

Boyd,

No it isn’t even insufficient data. Even with 1,000 observations the problem still remains: statistically significant trend that is not warranted by the actual model that is underlying the data.

In this case we know for sure the exact structure of the model, and we can show that a trend, which based on the model we know is inappropriate, is actually not simply possible, but likely. If we were to run the code I have for this problem say 1,000 times, the number of statistically significant trends would result a large number of times.

In the case of the random walk differencing the data solves the problem. Of course, this leaves just the random error term which makes forecasting problematic in the sense that all we are going to end up with is the expected value of the error term.

I’d be curious to see how often an Augmented Dicky-Fuller test is done on these data to see if the problem with a unit root is present.

3. Oceanguy says:

The graphs mean very little due to their short history. A while ago I had posted a graph the left was using to support the idea that man was the cause… Their graph, with a much longer history, showed temperature cycles over the past 400,000 years.

It looks to me like their graph disproves the point they are/were trying to make. Unless SUV’s were around 400,000 years ago.

4. Herb says:

One thing I learned a long time ago:

Statistic’s can be made to indicate most any result you wish to make.

Goes back to an old saying; “Figures don’t lie, but liars figure”.

5. odograph says:

So how does this cut to reality? We have had news in this last week about thaws in the arctic:

“The Arctic ice shelf has melted for the fourth straight year to its smallest area in a century, driven by rising temperatures that appear linked to a buildup of greenhouse gases, U.S. scientists said on Wednesday.”

1.) Do you think you’ve proven this to be some strange coincidence, that our greenhouse gas releases just happen to coincide with such warming?

2.) Even if you assume a concidence, don’t you have to go further than that … to prove that reducing greenhouse gas emssions would not make life better for future generations.

I mean even if it is natural+human warming, reducing the human warming reduces the total, yes?

6. Herb says:

Steve:

Odo:

Perhaps this is of interest to you. This should give one some thought to the environmentalist before placing the blame on the human race.

http://www.livescience.com/environment/

It sort of indicates what I stated in my previous comment “figures don’t lie, but liars figure” referring to statical data, of course.

7. Steve Verdon says:

Stop speaking for me odograph, it is stupid.

I mean even if it is natural+human warming, reducing the human warming reduces the total, yes?

Yes, and if the reduction really does nothing save reduce the resources we have on hand to deal with the potential problems due to natural warming? What about other issues such as hunger and disease?

Yes, yes, I know you drive a Prius and hence are morally head and shoulders about the rest of us, but your posts are taking on a really tedeious and predictable quality.

2.) Even if you assume a concidence, donÃ¢Â€Â™t you have to go further than that Ã¢Â€Â¦ to prove that reducing greenhouse gas emssions would not make life better for future generations.

WTFAYTAB? Where the did I say that global wraming is not happening?

8. Herb says:

CORRECTION:

http://www.livescience.com/environment/050930_sun_effect.html

9. odograph says:

I didn’t speak for you Steve. If I had assumed your position, without asking those questions you might have a point.

As far as your “WTFAYTAB” … I’m just trying to find the underlying purpose of your posts. They just seem odd to me.

I try not to group them with this … contingent I see … who have consistently written “reasons of the week” on why we shouldn’t do anything.

If you do have a plan for action, please state it!

10. odograph says:

Herb, the problem with “figures donÃ¢Â€Â™t lie, but liars figure” is that both sides suffer from it. We had the famous Philip Cooney episode, as a clear example of an anti-GW liar, fudging (or just hiding) figures.

Sadly, finding a liar on any side of any argument doesn’t prove the argument true or false. We have to pay attention to the center of the case, the facts.

I think the sunlight thing is very interesting, but part of my take-away from a science education is not to trust any one paper too far. The important thing is where the following papers go, and where it averages out.

If one paper was good enough, we’d have “cold fusion” right now, as an easy example.

So anyway, you won’t see me choosing one paper for-or-against and using that to support my posiiton.

11. Ã¢Â€ÂœThe Arctic ice shelf has melted for the fourth straight year to its smallest area in a century, driven by rising temperatures that appear linked to a buildup of greenhouse gases, U.S. scientists said on Wednesday.Ã¢Â€Â

Odo,

Doesn’t that statement suggest that the Arctic ice shelf has been this small as recently as a century ago? If that’s the case it suggests to me that at some point over the last 100 years it grew as well and it is only natural for it to grow and shrink.

The other possibility, of course, is that the data only go back 100 years. But I’d be interested to know which it is.

12. odograph says:

Things like that (it grew as well, etc.) are interesting questions. They become science when we devise a way to test the question and produce an answer.

I kinda figure the U.S. scientists have asked such questions. I mean, that’s what they do all day.

13. Herb says:

Odo:

The point of the “Sun” paper was to show that there always two sides to every story, While the EV wackos cite their side, with their documentation, there is always someone down the block to “Prove” something else. But, I will say, without hesitation, that with the environmentalists, “It’s their way or the highway” They are right and everyone else is wrong. And, therein lies the problem with the crazy extreme regulations and laws that do nothing more than increase everyones cost of living on most everything from automobiles to toilets. Isn’t there about 22 different blends of gasoline made to suit everyones state environment, and isn’t there several thousand dollars worth of air pollution equipment on cars today. That all increases prices for everyone and does very little to improve the environment.

If you want something to complain about the environment with, Try looking into Jet Engines, The airlines fuel consumption per day and the efficiency of a jet engine.(How much of the fuel they consume vs, how much fuel is dumped out “unburned hydrocarbons” the back of an operating jet engine) I think what you find out, will amaze you.

14. odograph says:

By the way, if the Eskamos say that this is the worst they experienced, and beyond anything in the oral history … would you trust that?

I think I would.

15. odograph says:

Sorry Herb, but that is not the way science works. We don’t just “count the sides” on an issue, and then throw up our hands.

16. odograph says:

By the way, I do agree that jet travel is much more environmentally damaging that most people acknowledge.

And sometimes it gets pretty strange – people fly to global warming conferences, of all things.

17. Herb says:

Well Odo, I gather you must be some kind of “scientist” and all along i thought that some of your statements were based on known facts. Now I see that your statements are based on theory. I think you would do better to base things on something you know as fact, then if it doesn’t work go to another known fact and try that for a while. While scientist may be great they are a lot like engineers who operate on two principals.

First, “We have all the time in the world to work on and come up with a solution to a problem. (no such thing as expedite”

2nd. Money is no object. (It’s not ours)

And by the way, I never said to “throw up your hands and Tell me, just how does science work. You read the article on the Sun but you seem to disbelieve other scientists. Is that a standard with scientists (to disbelieve other science research?)

18. Steve Verdon says:

DoesnÃ¢Â€Â™t that statement suggest that the Arctic ice shelf has been this small as recently as a century ago? If thatÃ¢Â€Â™s the case it suggests to me that at some point over the last 100 years it grew as well and it is only natural for it to grow and shrink.

The other possibility, of course, is that the data only go back 100 years. But IÃ¢Â€Â™d be interested to know which it is.

Actually, at one time the antarctic was inhabited by dinosaurs, so it wasn’t always a big frozen place.

As far as your Ã¢Â€ÂœWTFAYTABÃ¢Â€Â … IÃ¢Â€Â™m just trying to find the underlying purpose of your posts. They just seem odd to me.

I try not to group them with this Ã¢Â€Â¦ contingent I see Ã¢Â€Â¦ who have consistently written Ã¢Â€Âœreasons of the weekÃ¢Â€Â on why we shouldnÃ¢Â€Â™t do anything.

If you do have a plan for action, please state it!

The point to this post should be obvious. Global warming is most likely happening. The degree and the causes are still up in the air. As such simply portraying any warming based on data via simple linear trends at best obscures what is going on, and at worst is outright misleading.

19. odograph says:

Herb, on the science stuff … I have just a B.S. in chemistry, and have worked as an engineer in medical diagnostics, and emissions monitoring (in gas and coal fired power plants). I did some pure-software stuff after that.

Science is about ideas (whether you specifically classify them as theories or not) and investigations to test those ideas. Once doesn’t work without the other.

BTW guys, with my fast typing and impatience I’ve really murdered some words in the above posts … sorry, and thanks for overlooking that messiness.

20. odograph says:

By the way Tunderbird, I think it is pretty well documented that the “ice age” craze came out of the popular media, and not the scientific papers themselves:

http://www.wmconnolley.org.uk/sci/iceage/

21. Herb says:

Odo:

I see that you are very typical; I have worked with many many engineers during my life and it looks like you are in the typical class.

Good Engineer, But not much common sense

I always operated by use of the 4 basics. And then planned, organized, implemented and then measured.

22. odograph says:

Here’s where I’ll float my common sense, and explain why I think people who take the hard-line, no-action, position are being political:

There are responses to global warming that not only cost us nothing, they actually save us money.

When people say we can’t do anything, because anything costs money, they are being … political, irrational, obstructionist … take your pick.

23. odograph says:

Great story on gristmill (watch out, and “environmental” site) on the kind of win-win solutions we can find on these things:

“In a study published last year, scientists at the RAND Corp. scored 38 metropolitan areas on the “sprawl index” — basically a measure of their dependence on cars. When the researchers tallied disease rates for the same areas, an interesting pattern emerged. Other risk factors aside, people in densely populated places graced with sidewalks and shops had the lowest rates of diabetes, hypertension, heart disease and stroke. … Without even trying, the folks in those more-compact communities were apparently exercising enough to ward off chronic illness.”

http://gristmill.grist.org/story/2005/10/1/14208/1461

That’s that I’m talking about! It’s what I’ve been posting for a year – that there are choices that are not “sacrifices” in any way. They make you healthier, happier, and as an added bonus, reduce greenhouse gasses.

Up above someone tried to rib me about the “morality” of my Prius. I didn’t feel I took a hit on that because I wasn’t making any sacrifices, I’m not wearing my morality on my sleeve(*) … this stuff makes you healthy and happy, and it is possible without sacrifice.

* – ok, maybe a liiiittle bit.

24. Steve Verdon says:

HereÃ¢Â€Â™s where IÃ¢Â€Â™ll float my common sense, and explain why I think people who take the hard-line, no-action, position are being political:

There are responses to global warming that not only cost us nothing, they actually save us money.

When people say we canÃ¢Â€Â™t do anything, because anything costs money, they are being Ã¢Â€Â¦ political, irrational, obstructionist Ã¢Â€Â¦ take your pick.

I think that is misleading at the very least. Even if they are “free” since one would have implement these policies (i.e. do something) it would mean not doing something else. This is the very definition of opportunity cost, and hece these things do have a cost even if their dollar cost is zero which I find doubtful.

25. odograph says:

Are you math impared Steve? Doing things that save us money actually allows us to do more of those “something else(s).” We’d have more money to spend on them, or anything else we choose.

And I don’t see why you are doubtful, you should be able to think of some yourself … including some that have other benefits for the economy, national security, or environment.

http://www.eande.tv/main/?date=092905

26. odograph says:

I want to make it clear – in complex issues like anthropogenic global warming there are graduations of confidence. A rational mind does not flip between yes and no. One may be somewhat convinced, moderately convinced, or even highly confident.

A rational discussion of response should dovetail with that. The easiest things to do are the ones that save us money. A rational, but unconvinced, person would be hard-pressed to argue against those. They are “wins” on other counts. Then come the inexpensive actions, which may be backed by those somewhat convinced. And so on. Ultimately we might reach complex, expensive, or invasive options, which are only going to be supported by the highly confident extreme.

When people dance, and avoid thinking about the easy things, the things that acutally save us money (or improve our quality of life), it is clear that they are drawing a hard line.

… and that is something that must come from an ideologically frozen mind, locked in obstructionism, rather than rational thought or planning.

27. Antony Lawler says:

Looks like lots of intellectual one-upmanship going on here. Lots more straying from the point, and discussion on the process of scientific rationalization.

From almost any viewpoint, discussions on whether or not short term Global Warming is taking place seem nothing more than sophistry. Those who attempt to deny its existence provide (eco-friendly) fuel for the greenies who want everyone to adopt a pointlessly ascetic lifestyle.

The questions worth asking are :

Is it medium to long term ?
To what extent is human activity contributing ?

28. odograph says:

More moderate greenies might want people to adopt a pointlessly happy lifestyle 😉

29. Steve Verdon says:

Are you math impared Steve? Doing things that save us money actually allows us to do more of those Ã¢Â€Âœsomething else(s).Ã¢Â€Â WeÃ¢Â€Â™d have more money to spend on them, or anything else we choose.

Clearly not, but I’m begining to think you are. First, if I walk to work, that means there is less time in the day for me to do other things. Quite simply this is a cost. So walking to work would save me money, but cost me in terms of other activities/actions. So simply saving money is an idiot’s measure.

Fruther, it might be the case that I can

1. Save money with something like a whole house fan, and

2. Help the environment.

But these things also come with substantial fixed costs and costs once incurred are sunk. Hence the decision is not so simple as you make it out to be.

30. odograph says:

Steve, are you aware that you are extrapolating from your personal response to walking and whole house fans, and making a policy argument that no one should do them?

Do you really think that no one would benefit from walking to work?

Do you really think that no one should buy a whole house fan, ever?

A moderate person (such as myself) would say that these are good things, when appropriate.

31. odograph says:

BTW, it is fun to shoot at your hardline “we should do nothing about global warming” position, just because it is so extreme, so cardboard.

There are folks out at the other extreme as well, and they are just as wrong … the give up all technology and live in nature types, or something.

My response to your extremism is not any one plan, but rather to remind you that a range of actions are possible, and they should be encouraged … when appropriate. I consider this a moderate position.

I think you don’t want to go there because you are afraid that will be the camel’s nose under the tent – that once we talk about doing anthing we’ll end up getting carried away. So your political/philosophical strategy holds you on your hard line.

32. Steve Verdon says:

Odograph,

Wrong again. I am applying the very basic economic concept known as opportunity cost. Let me give you first basic economics lesson. There are no free lunches. Everything comes with at least an opportunity cost.

Do you really think that no one would benefit from walking to work?

This is a strawman. Nowhere did I say that there is no benefit to anybody anywhere in walking to work. What I am asserting is that walking to work comes with, at the very least, an opportunity cost. Hence statements that it is “free” are misleading.

Do you really think that no one should buy a whole house fan, ever?

Another strawman argument. I have nowhere said or implied this.

A moderate person (such as myself) would say that these are good things, when appropriate.

Of course, which follows quite nicely from what I have written.

BTW, it is fun to shoot at your hardline Ã¢Â€Âœwe should do nothing about global warmingÃ¢Â€Â position, just because it is so extreme, so cardboard.

Okay, so you are fundamentally dishonest. Thanks for the tip, I’ll know from now on to simply ignore your comments.

33. odograph says:

Steve, are you aware that you are arguing a self-contradicting position?

If “opportunity cost” is really the trump to this argument, then indeed no one should walk or buy a fan.

If it is a “strawman” that no one should buy walk or buy a fan, then opportunity cost is not the defining issue.

Look, if you aren’t trying to be slippery why don’t you just say it – that there are actions that benefit the “user” while also reducing greenhouse gasses as an added bonus,

I can point to a handy example. Procter and Gamble have decided to cut their energy bill by \$1 million a year … and the added bonus to us all is the corresponding reduction in powerplant emissions:

http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=16595

34. odograph says:

By the way Steve, I did ask you directly, and twice, for your plan:

“If you do have a plan for action, please state it!”

and

You didn’t answer those at all, you just tried to deflate (via those “opportunity costs”) the moderate position that, certainly, the easy things should be considered.

35. Steve Verdon says:

If Ã¢Â€Âœopportunity costÃ¢Â€Â is really the trump to this argument, then indeed no one should walk or buy a fan.

Do you realize you don’t know what you are talking about? I haven’t argued it trumps everything. I was merely pointing out that your “free” argument is not really accurate and is in actuality misleading. Because there are opportunity costs doesn’t mean do anything, it means that nothing is completely free.

Look, if you arenÃ¢Â€Â™t trying to be slippery why donÃ¢Â€Â™t you just say it Ã¢Â€Â“ that there are actions that benefit the Ã¢Â€ÂœuserÃ¢Â€Â while also reducing greenhouse gasses as an added bonus,

I’m not trying to be slippery, I’m trying to get you to realize that nothing in life is truly free. Somehow, somewhere either somebody else or you are paying for everything you do, consume, or use.

You say these things are free, when in reality they aren’t. Hence you are not in a good position to argue that doing anything is good, bad, or indifferent. Until you understand these basic concepts you are out of your depth. Seriously, please go look in any elementary economics text book.

36. odograph says:

Steve, I’ve understood these economic terms for decades. I’ve also understood, throughout this discussion, that they don’t affect the general argument. They are peripheral. There may indeed be cases where opportunity cost, or risk, or ROI, or anything else may argue against a specific plan or installation … but that doesn’t mean those factors weigh negatively in all cases.

Do you think you need to make Proctor and Gamble understand opportunity cost, so that they will understand that there \$1 million dollar savings was not “free?”

I think they know that, but I think they’ve probably taken these factores into consideration and found something that benefits them, and us and the environment at the same time.

Do you see where I’m coming from now?

37. odograph says:

BTW, I just serched this thread for the word “free.”

It is interesting to note that while you’ve used it many times, to argue that I shouldn’t beleive it, I have never actually used the word free in my posts (or position) until just now.

I’ve never argued that this was “free” – what I did say was that there are things that save us money – as Proctor and Gamble has done.

38. Steve Verdon says:

Steve, IÃ¢Â€Â™ve understood these economic terms for decades. IÃ¢Â€Â™ve also understood, throughout this discussion, that they donÃ¢Â€Â™t affect the general argument. They are peripheral. There may indeed be cases where opportunity cost, or risk, or ROI, or anything else may argue against a specific plan or installation Ã¢Â€Â¦ but that doesnÃ¢Â€Â™t mean those factors weigh negatively in all cases.

Do you think you need to make Proctor and Gamble understand opportunity cost, so that they will understand that there \$1 million dollar savings was not Ã¢Â€Âœfree?Ã¢Â€Â

No, you don’t understand the argument at all. The fact that opprotunity cost is present does not mean you don’t do something. Opportunity cost is present in all decisions/actions. Every.Single.One.

The point was that what you consider “free” is far from free. In some cases it still makes sense to engage in the activity, but to call it “free” is misleading.

Take Proctor and Gamble; to save that money they have to do something. They have to have employees working on that issue. Those employees could be working on something else that could concievably make money for the company. Hence, there is still an opportunity cost there. This does not mean that Proctor and Gamble is making a bad deicision. I never claimed that. You made up a position for me and keep trying to get me to claim it.

I think they know that, but I think theyÃ¢Â€Â™ve probably taken these factores into consideration and found something that benefits them, and us and the environment at the same time.

Do you see where IÃ¢Â€Â™m coming from now?

Yes, I see you coming from a position where you have tacitly agreed to my point, but you can’t bring yourself to acknowledge it.

BTW, I just serched this thread for the word Ã¢Â€Âœfree.Ã¢Â€Â

It is interesting to note that while youÃ¢Â€Â™ve used it many times, to argue that I shouldnÃ¢Â€Â™t beleive it, I have never actually used the word free in my posts (or position) until just now.

Oh really? I draw your attention to this post of yours. You wrote,

HereÃ¢Â€Â™s where IÃ¢Â€Â™ll float my common sense, and explain why I think people who take the hard-line, no-action, position are being political:

There are responses to global warming that not only cost us nothing, they actually save us money.–emphasis for the reading impaired

Consider yourself corrected.

IÃ¢Â€Â™ve never argued that this was Ã¢Â€ÂœfreeÃ¢Â€Â Ã¢Â€Â“ what I did say was that there are things that save us money Ã¢Â€Â“ as Proctor and Gamble has done.

39. odograph says:

Steve you’ve got a big complex argument that goes nowhere.

They cost us nothing, after they achieve their ROI.

In some cases ROI is immediate, an in the case when you choose between two \$500 refrigerators – one Energy Star and one not. In that case your opportunity costs, your risks, your extra investment, are all zero. Your ROI is immediate.

Geez, you don’t think playing around with corner cases like you do really affects the central argument, do you?

40. odograph says:

It looks like your continuing theme here is to name conditions that might, in some cases, make an action or investment impractical.

Unfortunately that does not dispose of my moderate position that there are some cases where a true win-win is possible. There are cases where we save money, aid our economy, improve national security, reduce known pollutants (SOx, NOx), and as an added bonus reduce greenhouse gas emssions.

Really, if you want to argue against that moderate position, you have to go further. You have to prove that there is never a win-win.

Or you can just accept my moderate position.

41. Steve Verdon says:

Oodograph,

I’m now convinced you are a fool. A complete blinkered fool who is too taken with his own arguments.

In some cases ROI is immediate, an in the case when you choose between two \$500 refrigerators Ã¢Â€Â“ one Energy Star and one not. In that case your opportunity costs, your risks, your extra investment, are all zero. Your ROI is immediate.

Tell the truth, you flunked basic economics, didn’t you. And no, the opportunity cost is not zero.

42. Steve Verdon says:

Here is a little test in opportunity cost for you Odograph,

You have won a free vaction to Santa Barbara, but you can’t resell your free vacation. A friend offers to go with you to San Francisco which will cost \$500, but you’d be willing to spend \$750 to go to San Francisco with this friend. So what is the opportunity cost of passing up the San Francisco trip–i.e. taking the “free” Santa Barbara trip (assume no other costs involved)?

a) \$0
b) \$500
c) \$750
d) \$250

You have \$500 and are looking at buying either refrigerator or a flat screen television. Your choices are an Energy Star fridge for which you’d be willing to pay \$800, but costs \$500. Also a non-Energy Star Fridge that also costs \$500, but for which you’d be willing to pay \$650. The television also costs \$500, but you’d be willing to pay \$750. What is the opportunity cost of buying the fridge (assume no other costs)?

a) \$800
b) \$750
c) \$500
d) \$250

43. odograph says:

Sorry Steve, but in my example I discussed refrigerators which were in all aspects equal, but one used more electricity.

I’ll add a word, for clarity, to that sentence above:

“In some cases ROI is immediate, [as] in the case when you choose between two \$500 refrigerators Ã¢Â€Â“ one Energy Star and one not. In that case your [extra] opportunity costs, your risks, your extra investment, are all zero. Your ROI is immediate.”

I actually saw that muddle in the text after I typed it, but I didn’t think you’d be so childish as to go for that missing word, and hang extra meaning on it.

Grow up man. Of course opportunity costs exist in the world, but when you need a widget (be it a refirgerator, car, or television) it is not guaranteed that efficiency will have a higher cost.

There are fortunate examples where efficiency costs less. An easy one to point to is the Toyota Echo … a very inexpensive car that is also reliable and high efficiency.

44. odograph says:

And of course your stacked examples in the other post do not disprove my general and moderate position:

“There are cases where we save money, aid our economy, improve national security, reduce known pollutants (SOx, NOx), and as an added bonus reduce greenhouse gas emssions.”

45. odograph says:

I don’t get where you are coming from anyway. If you aren’t trying to disprove my central statement, what are you trying to do? Just snipe from the edges?

Story: I’m sitting on my couch watching TV. A commercial comes on and I decide I’m going to do something I’ve thought about. I get my lazy bottom up, walk outside, and turn down the thermostat on my water heater. At the end of the month I discover that my showers have still be hot, I don’t run out of hot water, and my gas bill is a touch lower.

Do you need to attack this because the opportunity cost, missing the commercial, was too high? What’s your point?

46. Steve Verdon says:

Well Ododgraph, I give you an F for your understanding of opportunity cost. Notice that my second one included two fridges, one an Energy Star the other not. The point of the exercise is to show that no matter what, there is always an opportunity cost. Here is the point. That \$500 can be spent on things other than a refrigerator. That is where opportunity cost comes from, you compare the net benefit of spending the \$500 on something else. So your claims of no opportunity cost are totally false, and your statement underscores that you have no grasp of the concept.

I donÃ¢Â€Â™t get where you are coming from anyway. If you arenÃ¢Â€Â™t trying to disprove my central statement, what are you trying to do? Just snipe from the edges?

I don’t have to try and disprove your central thesis, I’ve already done so. Lets use your example,

Story: IÃ¢Â€Â™m sitting on my couch watching TV. A commercial comes on and I decide IÃ¢Â€Â™m going to do something IÃ¢Â€Â™ve thought about. I get my lazy bottom up, walk outside, and turn down the thermostat on my water heater. At the end of the month I discover that my showers have still be hot, I donÃ¢Â€Â™t run out of hot water, and my gas bill is a touch lower.

There is an opportunity cost here. You have, lets say 1 minute for the commercials. What is the best thing you can do with your time other than turning down the thermostat on your water heater? Maybe fix yourself a snack. Lets say, for the sake of the discussion, you save \$5 on your heating bill and you’d be willing to pay \$3 for the snack. What is the opportunity cost of turning down your thermostat? \$3. Now, in this case the benefit from turning down the thermostat exceeds the value of the snak, so you turn downt he thermostat.

The point, is that turning down the thermostat was not “costless”, “free”, or “doesn’t cost anything”. This is true for virtually everything. Rarely there might be cases where the opportunity cost is zero, but those are the exception not the rule. So to say something is “free” is in almost all cases misleading.

Further, this is why people, with limited budgets, don’t always rush out to buy a whole house fan, the latest and most efficient fridge, or a Toyota Prius, even if they have the money to do so.

Oh, and the pop quiz questions were not “loaded” other than they were designed to test your grasp of opportunity cost. In both cases, the answer is “d”.

47. odograph says:

Steve, you are obviously ignoring my meaning in order to distract from the core argument.

In my hypothetical, I assumed that someone needed/wanted a refrigerator, to illustrate a case when opportunity costs were equal.

This is closer to the meat:

“The point, is that turning down the thermostat was not Ã¢Â€ÂœcostlessÃ¢Â€Â, Ã¢Â€ÂœfreeÃ¢Â€Â, or Ã¢Â€ÂœdoesnÃ¢Â€Â™t cost anythingÃ¢Â€Â. This is true for virtually everything. Rarely there might be cases where the opportunity cost is zero, but those are the exception not the rule. So to say something is Ã¢Â€ÂœfreeÃ¢Â€Â is in almost all cases misleading.”

First of all, I don’t use the word free quite as … freely as you do. It is an imprecise word and conveys something different than I wish to say. In fact, you are pretty close to using it as a strawman, even though I don’t say “free” myself.

I did say “don’t cost us anything” and explained that in terms of ROI.

Again, you are playing around the edges. None of this disproves that there are some cases … I never said “in almost all cases” … another strawman … none of this disproves that there are cases where a win-win is possible.

You ARE sniping from the edges of the argument.

48. odograph says:

Please, if you want to convince me you can make a logical and rational response to my core statement, do that without building strawmen out of things I didn’t say or mean.

Ã¢Â€ÂœThere are cases where we save money, aid our economy, improve national security, reduce known pollutants (SOx, NOx), and as an added bonus reduce greenhouse gas emssions.Ã¢Â€Â

49. Steve Verdon says:

Odograph,

Forget it, you just aren’t grasping the point of my comment. Opportunity cost is always there. I don’t care about your last two comments, they are just bafflegab to try and cover your lack of undertanding.

YHL
HAND

50. odograph says:

I doesn’t matter if it is always there, it only matters if it prevents the “win-win” from occuring.

My God, it’s like gravity in space. It’s always there, but at distance squared it starts to be a LOT less important the further you get from a gravity well.

And you KNOW it doesn’t prevent win-win because you said Proctor and Gamble may have been right in their decision!

I’ll tell you another one from the real world, to do with environment and not specifically Global Warming:

Our local back-bay has a long history but most recently has gained value as a wildlife refuge, for its scenery, and for recreational activities. The latter two uses are somewhat dependent on the former. No one wants to look out on, or walk along, a polluted swamp.

It was recently discovered that runnoff from nearby greenbelts and parks was contributing to algae bloom through their irrigation and “additions” (fertilizer and *cides).

A local company proposed a solution. They could make a moisture sensor and wire it into the electronic sprinkler systems in the greenbelts for less that a \$100 per. Was there an “opportunity cost” for the city and associations to persue this? Certainly, but what happened when they did?

They made their money back on the first month’s water bill. One association saved \$150,000 in water fees a year, while reducing water runnoff and improving the water quality in the back-bay.

Everyone was so happy with this win-win that they made a segment for local cable, and ecouraged everyone to buy the gizmo, save money, and help the environment at the same time.

You I’m not grasping? What am I missing, really?