Economic Formulas in IPCC Report Criticized for Overstating Emissions

Published March 1, 2008

The United Nations’ Intergovernmental Panel on Climate Change (IPCC) is the organization established to evaluate the effects of human activity on climate change–and hence provides the scientific rationales for UN actions on the issue.

Unfortunately, the assumptions it uses overstate potential manmade global warming by a large measure.

In 2001 IPCC based its predictions of substantially warming temperatures during the next century largely on forecasts of explosive growth in Third World economies–and hence emissions–during the twenty-first century. The panel actually predicted Third World nations would grow so fast they would surpass the economies of wealthy Western nations.

Economists pointed out the unrealistic assumptions, but in the six years since these IPCC gaffes, little appears to have changed.

The IPCC Special Report on Emissions Scenarios (SRES) is available online on the Panel’s Working Group III Web site at http://www.grida.no/climate/ipcc/emission/. The 600-page report includes 200 pages of statistical tables (five pages for each of the 40 scenarios) that incorporate the economic and demographic assumptions.

Formulas Criticized

In a PowerPoint™ presentation prepared for the Garnaut Climate Change Review in Melbourne in November 2007, Dr. Helal Ahammad of the Australian Bureau of Agricultural and Resource Economics (ABARE) said a new strategy was being implemented for future emissions scenarios development but, “Nonetheless, the existing emissions scenarios will continue to be used.”

Apparently IPCC is determined to persist with the use of SRES scenarios, despite intense and near-unanimous criticism by economic statisticians, index number theorists, and leading economists over the past six years.

In a public presentation to the U.S. National Research Council Committee on National Statistics on May 10, 2007, Yale University Prof. Bill Nordhaus, who has been involved in the construction of emissions scenarios for more than 30 years, criticized the SRES projections.

“Another area of great concern to modelers is construction of emissions scenarios,” Nordhaus noted. “The IPCC has not served the international community well in this area. It sponsored a Special Report on Emissions Scenarios (SRES), which generated a number of economic and social projections that were put together over the 1996-2000 period. These ‘story lines’ have little analytical or econometric foundation, yet they continue to be used in the analysis underlying the Fourth Assessment Reports, particularly in the science report, that are being released this year.”

Inaccuracies Noted

Similarly, in a paper published in the March 2006 issue of Climatic Change, edited by Stephen Schneider, a leading figure in the IPCC, the Australian economist Alison Stegman wrote there is a need for “a large scale review [of IPCC emissions scenarios] on the grounds of statistical inaccuracies, methodological assumptions, and empirical inconsistencies.”

Moreover, Stegman noted, “The IPCC has not demonstrated that the SRES emissions projections have a sound economic foundation.”

Stegman concluded, “Because these emissions projections are used as inputs in models of temperature and climate impacts, these in turn do not have a sound economic basis.”

Criticisms Verified

In its unanimous report on The Economics of Climate Change, published in July 2005, the all-Party Select Committee on Economic Affairs of the British House of Lords reviewed the criticisms of SRES by Ian Castles and David Henderson, Richard Tol, Jacob Ryten, Warwick McKibbin, Angus Maddison, William Nordhaus, and Martin Agerup.

The select committee concluded, “Serious questions have been raised about the IPCC emissions scenarios, and … a reappraisal of the scenarios exercise is urgently needed.”

In his just-published book Science and Public Policy, Aynsley Kellow, professor and head of the School of Government at the University of Tasmania, noted the IPCC models are bad science.

“In IPCC modelling exercises, the ‘predictions’ of the media and environmental groups, and ‘projections’ of the IPCC, all rested on no firmer foundation than a set of scenarios, and could be no better ‘science’ than those conjectures,” Kellow wrote.

“That these scenarios include erroneous assumptions that involved a basic statistical error,” Kellow continued, “and that the IPCC continued to cling tenaciously to this mistake, revealed the extent to which a good cause could limit the conduct of science.”

Impervious to Criticism

IPCC has shown itself to be impervious to criticism of the scenarios, and there seems to be little prospect that anything can be achieved by analysis or reasoned argument.

There are, however, grounds for hope that Australia’s new government may be prepared to withdraw the nation’s uncritical support of IPCC. Among these grounds for hope are the government’s strongly stated intention to make greater use of the expertise of the Federal Treasury and the appointment of Dr. Martin Parkinson, an able and respected Treasury official, as secretary of the new Department of Climate Change.


Dr. Ian Castles ([email protected]) is a visiting fellow at the Asia Pacific School of Economics and Government at the Australian National University.