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A climate scientist and economist made big bucks betting on global warming
Posted on 1 August 2016 by dana1981
Climate scientist James Annan and climate economist Chris Hope made a nice sum this year for a bet they made on global warming in 2008. As Hope tells the story:
The record warmth of 2015 just made me £1,334 richer. While the extra cash is a nice bonus, it sadly demonstrates that the atmospheric dice remain loaded towards increasing climate change.
So, how did I turn increasing temperatures into cash? About five years ago I was at a conference in Cambridge where most of the participants were sceptical about the influence of humans on the climate. I took the microphone and asked if any of them would care to make a £1,000 bet with me about whether 2015 would be hotter than 2008. Two brave souls, Ian Plimer and Sir Alan Rudge, agreed.
Like a good economist, Hope hedged his bets. Plimer and Rudge had given him even odds, and Hope found a climate scientist, James Annan, who gave him 4-to-1 odds on the opposite wager:
I asked him what odds he would give me. In 2011, he was confident enough in the reality of climate change to offer me odds of 4 to 1 against 2015 being cooler than 2008 ... now I was perfectly hedged: I would win £1,333 if 2015 were cooler than 2008, and £1,334 if it were warmer.
2015 was of course hotter than 2008, so Plimer and Rudge each lost £1,000, with £1,334 going to Hope and £666 going to Annan on Hope’s hedged bet.
A particularly foolish bet by the GWPF advisors
While research has shown that betting against global warming is generally a great way to lose money, this particular bet was especially foolish. 2008 saw a strong La Niña event, which cause ocean surface and therefore global surface temperatures to temporarily cool. It was the coolest year since 2000 - what mathematicians call a “local minimum” because the temperature was lower than all the nearby years. And the bet was made about 5 years ago, so the participants knew that.
Between 2008 and 2015 there would be more than 0.1°C of human-caused global warming, so for 2015 to be cooler would have required a huge La Niña event, or big volcanic eruption, or perhaps the contrarians were banking on human-caused global warming being wrong.
Whatever their reasoning, it was a foolish bet to make. 2015 was a record-breaking hot year, about 0.32°C hotter than 2008. It wasn’t even close. In fact, it’s quite possible that we won’t see another year as cool as 2008 in our lifetimes. 2011 saw a big La Niña event, but it was still significantly warmer than 2008. The further away that year gets in the rear-view mirror, the more global warming humans are causing, and the less likely we’ll see another year as cool as 2008.
It’s worth noting that the two individuals who made this bet - Ian Plimer and Alan Rudge - are both members of the Global Warming Policy Foundation academic advisory board. The GWPF is a UK anti-climate advocacy group that generally relies upon unreliable sources of climate information. That their advisors make such foolish wagers does not inspire confidence in the group.
Climate scientists dare deniers: put your money where your mouth is
It’s easy for those who deny the threats associated with human-caused global warming to talk a big game. For their efforts they’re often paid handsomely viathe web of denial, media outlets that practice false balance give them undeserved prominence, and in most cases they’re old men who won’t live to see the worst consequences resulting from their efforts to delay climate action.
Climate scientists want to change this by engaging them in more bets like Hope’s.My colleagues and I managed to engage a group of contrarians in a wager that in the satellite estimates of the temperature of the Earth’s lower atmosphere, 2011–2020 (so far, a 0.27°C anomaly) will be hotter than 2001–2010 (0.22°C). Our side was willing to put up nearly three times more money (for charity) than the contrarians. Not surprisingly, we already have a comfortable lead.
At this year’s American Geophysical Union conference - the largest gathering of climate scientists in the world - several scientists are holding a session on this very topic (Annan is one of the invited speakers):
Hope is just a calculated money-maker: he did not risk anything. Annan risked quite a bit by betting 4:1, i.e. his winning return was only 1.25. As the scientists he knew the actual odds of strong LaNina year being a local maximum along the warming signal were much smaller than that, so he could affford it.
Having denialist "put their money where their mouth is", does not teach them anything because the amounts involved (e.g. £1000 in Hope case) are too small. The problem is that the rewards from FF market are far surpassing (in the order of millions $) the losses from foolish and ignorant bets, like this by Plimer and Rudge. They happily pay it, meanwhile collecting cheques hundred times that much of perhaps laundered money, remunerating them for their service to GWPF.