## Saturday, February 23, 2008

### More on Ships' Ballast Water

I recently noted an article on the BBC website regarding the threat from global warming to Antarctic species and that a closer read of the article revealed that the real threat was from the dumping of ships' ballast water. This article in the New York Times, dated February 20, 2008, provides an overview of the threat from introducing invasive species to new environments via ships' ballast water. Among a host of environmental problems caused by a lack of global monitoring and regulation of shipping and poor regulation of global fishing, this appears to be a significant issue.

## Friday, February 22, 2008

### Home Scott Free - The Proposed Federal Housing Market Bailout

According to articles in the New York Times and Washington Post the federal Office of Thrift Supervision (OTS) is preparing a plan designed to help ease the financial pain experienced by lenders who recklessly provided highly leveraged financing to prospective home"owners" during the peak housing bubble years and who are now facing enormous potential losses as the US housing market collapses and such loans turn sour. This plan proposes to do this by refinancing those borrowers whose mortgages are now greater than the market value of their home at the current market value and issuing a call option to the owners of the mortgage for the difference between the current market value of the home and the value of the original loan that gives some eventual opportunity to the lender to be made whole on the original loan.

The problem here is that many of these home"owners" now realize that they never really purchased a home at all, they purchased a call option whose strike price was the purchase price of the home. The option was especially attractive for those home"owners" who paid little or no money down since such "owners" had everything to gain if their home appreciated in value and little or nothing to lose if the home's value declined. Now that home prices have begun plunging, home"owners" whose mortgages are greater than the market value of their homes have realized that they can, with relatively little pain, exercise their option at a value of zero by jingle-mailing the keys back to the bank and walking away from their financial obligations. The result is that the owners of these mortgages now understand they have effectively written naked put options whose negative value is the difference between the mortgage value and the discounted price they receive in a short-sale after foreclosure.

Of course, this mother-of-all-bailouts is being spun by the OTS as a plan to rescue those poor borrowers and the NYT article feeds uncritically into this nonsense by focusing the article on poor, unsuspecting upper-middle class people blubbering about their terrible financial choices and their wish to somehow be made whole, with a tale of two of the downtrodden to provide presentation balance. But make no bones about it, this proposal is a bank bailout since it focuses on those loans for which the lenders face the greatest risk, namely those 0% equity, peak-of-the-market loans made in markets with the greatest froth. And, should this proposal actually see the light of day, the effect will be to slow the pace of home value decline in the short run but greatly lengthen the time until an eventual recovery in the market since it will supress demand for years in those households receiving such a "lifeline". If the US wants a 1990's Japan-style deflationary spiral to take hold in the US economy, by all means let this monstrosity of a proposal see the light of day. If not, let the lenders dine on their put options, provide a reasonable safety net for those people who will truly suffer from the housing downturn and, in time, enable households to slowly repair their tattered balance sheets.

## Sunday, February 17, 2008

### Environmental Unprotection

A federal appeals court in the U.S. earlier this month dismissed efforts by the US Environmental Protection Agency to compel as many as 30 states to adopt less restrictive mercury emission regulations than what the states themselves wanted to impose on power plants located within their juristiction. Details of this effort by the Bush Administration's E.P.A. are located in this article.

E.P.A. officials reportedly put tremendous pressure to impose on the entire country a mercury emissions trading program that, to all appearances, a majority of states did not wish to participate in. Were the federal government clearly acting in the broad interests of the whole country rather than the narrow interests of individual states (especially if the states were not interested in protecting the health of their citizens), one could argue that such an approach would be justifiable. The opposite was the case here. The willingness of a given state to impose greater emission restrictions within their borders should (and in most cases likely does) represent the consensus within that state regarding the type of regulation they think appropriate for their local environment. In effect, the Bush Administration was attempting to impose their own values and the values of states unwilling to impose such regulatory restrictions on the rest of the country.

January 20, 2009 can't come quickly enough . . . . .

### Tamino's Bet - Month One

Tamino has recently made a well-designed, easily tractable "bet" on the future direction of global temperatures. Tamino asks a simple question, "Is global warming continuing?" and bases the wager and ultimate answer on whether or not the 1975 to 2007 upward trend continues into the future. Since there is considerable volatility in the global temperature anomaly, Tamino takes this into consideration and bases his measurement of this volatility on the temperature record over the 1975 to 2007 period. The actual "bet" is therefore the following:

If annual average global temperature anomaly (land+ocean) from GISS exceeds 0.735 deg.C for two (not necessarily consecutive) years before it falls below the value $0.277455 + 0.018173 (t-1991)$ (where t is the year) for two (not necessarily consecutive) years, then the still-warming side wins; if it falls below the above equation for two years before it rises above 0.735 for two years, then the not-warming side wins.
Looking back over his post, it seems that the above equation represents the mid-point of his trend line rather than the lower two standard deviation bound of his trendline (which is his intention). I think, therefore, that the above equation should be changed to:

0.277455+.018173(t-1991)-.1918

This would produce the following series of lower bound values through 2015:

2008 .4035
2009 .4217
2010 .4399
2011 .4580
2012 .4762
2013 .4944
2014 .5125
2015 .5307

Remember that the upper bound value is fixed at .7350 degrees throughout the "bet".

That is, if the average GISS annual anomaly value falls below the above values in a given year, then that year is considered to be a year meeting the lower bound criterion. We can therefore monitor the "bet" on an ongoing basis and will do so going forward.

I would have to say that this is a very fair and, indeed, generous wager. Tamino's confidence in the trend continuing is evident in the conditions he has made in this wager. I personally would have considered a wager that the average global anomaly would fall below .3853 degrees (or two standard deviations below the trend for 2007) for two years against the .7350 degrees figure as very reasonable.

As the reader may know, this wager was placed before the GISS January anomaly of .12 degrees was released. One may be interested to know the average temperature trend for the remainder of 2008 that would result in an average anomaly temperature above 2008's .4035 degrees lower bound. This minimum average figure would be .4293 degrees. Since all but one month of 2007 recorded anomalies greater than .43 degrees, the probability the average anomaly in 2008 would be below .4035 degrees appears to be relatively small at this point. Stay tuned, we'll be checking the progress of his "bet" going forward . . . .

## Saturday, February 16, 2008

### A Blizzard of Bad News on Global Warming

The past several days have seen in the media a veritable blizzard of bad things that have been, are being and will soon be directly caused by global warming including the death of the Loch Ness Monster, the recent cold snap in China and the coming collapse of the unique sea life around Antarctica.

Yes, you're reading this correctly, we've lost the Loch Ness Monster and we've lost her because of global warming. Robert Rines, the 85-year old legendary hunter who has been searching for the equally legendary Nessie for the past 37 years is giving up, convinced that she has died as a result of global warming. What is even more hilarious is that this breaking news appeared in a mainstream British newspaper, the Scottish Daily Record, and this "scientific" explanation for Nessie's demise appeared in the story without any additional comment. After all, who could possibly question such a hypothesis? As Lubos Motl notes in his blog: "A few years ago, this report about the scientific causes of the death of the monster would be a joke that only a tabloid could afford [to print]. Today it is a part of mainstream news."

Moving on, China's recent cold snap has been revealed to be a direct and unmistakable manifestation of global warming. As reported in the Hong Kong Standard, in a story headlined, appropriately enough, , a polar researcher (whose academic affiliation is not noted) named Rebecca Lee Lok-sze is quoted as saying that:

"This [the cold spell] is due to human activities and our style of living . . . We could see colder winters and hotter summers in the future in Hong Kong."

Since mainland Chinese likely heat their homes in the winter using low-grade coal emitting lots of carbon dioxide when burned, the Chinese can do their part to battle such cold spells by avoiding to heat their homes during the winter. In other words, by not heating their homes (and instead suffering for the good of humanity) the Chinese would help to reduce carbon dioxide in the atmosphere which would, in turn, lower average global temperatures but end up raising average global winter temperatures (which would then reduce the scale of their sacrifice). Yes, the scientists understand the earth's climate so well that they can make such utterly illogical statements with perfectly straight faces.

Since this severe cold spell in China appears to be the result of an unusually strong La Nina event, Ms. Lee, and any other scientist who contends that this unusual cold spell is a manifestation of global warming, would therefore logically agree that this unusually strong La Nina must be the direct result of human activities. The phenomenon itself is not well understood and difficult to predict in advance, but, trust the scientists, they do understand that humans are the cause of the event itself. Presumably then, we can eliminate strong La Nina's by collective human action and strong El Nino's as well.

Finally, much of the existing unique marine life living the shallow waters off the Antarctic coast may soon become a victim of global warming, according to an article posted on the BBC's website. The article, titled " Warming risks Antarctic sea life," details findings presented by researchers at a conference of the American Association for the Advancement of Science (AAAS). The researchers warn that sharks and shell-crushing bony fish that currently cannot survive under current conditions would migrate to Antarctic coastal waters and threaten existing species should warming continue. The article notes that species currently living in these waters have evolved to deal with the harsh conditions currently found there. Dr Sven Thatje of the National Oceanography Centre at the University of Southampton is quoted in the article as saying that these conditions have existed for the past 40 million years and that this "Antarctic cooling" long ago caused seafloor predators living there at the time to go extinct.

One can easily check the approximate conditions that existed 40 million years ago in the Antarctic. According to a figure available here in Wikipedia, the approximate ocean temperature around the Antarctic 40 million years ago was about 6 degrees Celsius warmer than current ocean temperatures. Therefore, the researchers must be arguing that the waters around the Antarctic may warm by 6 degrees Celsius, to conditions that haven't existed for 40 million years, sometime in the near future.

Buried deep in the article is the real threat to existing species:

""The researchers say urgent local and global actions are needed to protect this last pristine environment.

"We have to act now in Antarctica as elsewhere to save the diversity of the planet," said Dr Richard Aronson of Dauphin Island Sea Laboratory in Alabama.

He said measures were needed to stop alient species being broght in through ships' ballast water.

"The local actions are to control ship traffic and control dumping of ballast waters," he told the BBC. "The global actions are what we've been saying for all other environments - we have to control emissions of greenhouse gasses.""

There you have it - the real problem, to the extent that such species can even survive in their new home, are alien species being brought to these Antarctic waters through ships' ballast water. Stated concerns about global warming are just nonsense tossed in to get academic and media attention and further funding for more research. This is the tragic state of current science. All science must now be presented through the prism of global warming or else risk being ignored.

## Tuesday, February 12, 2008

### January was Cool (and Extraordinary)!

The world's climate experienced an extraordinary series of events in January. But these events didn't include Baghdad first snowfall in living memory or Jerusalem's snowfall or even China's worst winter weather in half a century. And it wasn't the fact that the global temperature anomaly (according to NOAA) was .1793 degrees Celsius since such a figure suggests that the global temperature in January was warmer than the average for the 1901 to 2000 period (the base period for the NOAA temperature anomaly series). Even the fact that January's anomaly was the second lowest recorded since January of 2000 wasn't particularly noteworthy.

One extraordinary event was the fact that January's anomaly was .6521 degrees colder than the record .8314 degree anomaly recorded in January of 2007. That's extraordinary, you may ask? Absolutely. This .6521 degree decline was the greatest recorded over a 12-month period in the 128-year history of the NOAA time series. In only two other months since January of 1880 has a year-on-year temperature decline greater than .5 degrees been recorded. This record decline was recorded in the absence of major globa-scale volcanic activity and instead exceeded global declines recorded during the late 19-century (a period of the most intense volcanic activity recorded on this planet over the past 150 years) and declines recorded in the early 1990's in the wake of the Pinatubo and Hudson volcanic eruptions.

Another extraordinary event was January's month-on-month decline of .2182 degrees coupled with month-on-month declines recorded in the previous three months in a row. An anomaly decline of greater than .2 degrees on a month-on-month basis is relatively rare (about once every 25 months on average) but recording such a large decline after three straight months of anomaly declines had never previously been observed in the NOAA temperature anomaly time series.

Finally, the total temperature anomaly decline over the three months prior to January was .1314 degrees. The only time since 1880 when a month-on-month anomaly decline of greater than .2 degrees was preceeded by a greater anomaly decline in the previous three months occurred in January of 1893 during a period of significant volcanic activity. In fact, on only five (of 60) occasions since 1880 has a decline of greater than .2 degrees taken place in the wake of a negative total change in the anomaly in the previous three months.

What do we make of these extraordinary events? We have noted in other postings that symmetric numerical patterns in the global temperature anomaly are associated with long-term broad temperature movements. While I also argue that the temperature anomaly record contains clear evidence of anthropogenic-induced warming, natural temperature movements still appear to dominate over human effects. Thus, the temperature decline over the past year may signal the beginning of a period of global temperature decline. If this is even remotely correct, the current consensus on climate will shortly be due for a major review.

Stay tuned . . . . .

Further thoughts on the above:

It is frequently argued that the anthropogenic warming signal has emerged out of the "fog" of natural variation over the past 30 years. It is also frequently argued that the amount of natural variation over the past 30 years (indeed the last 50 years as argued by the IPCC reports) is so minimal that most of the observed warming over this period must be the result of human activity. We also know (as noted above) that the most significant temperature decline episode during the past 30 years resulted from the combined effects of the Pinatubo and Hudson volcanic eruptions. So we have an explanation for the decline observed at that time. However, there is no explanation in the consensus paradigm that comfortably fits in with the precipitous temperature decline observed over the past year since no major volcanic eruption thought to affect global climate has taken place over the past year. In addition, potential speculation that aerosols might be responsible for the cooling would ignore the fact that such precipitous cooling should require a massive short term increase in the level of aerosols emitted to the atmosphere to cause such a cooling. There is no question that China's and India's aerosol emissions are significant and increasing but it is difficult to imagine that they have increased significantly enough in the past 12 months to produce the observed decline in average global temperatures.

So we are left with a dilemna - either the observed cooling over the past 12 months results from some as-yet-not-understood human-induced phenomena or this cooling is taking place because of some natural factors not in any way included in current consensus scientific modeling.