Faulty Statistics Plague IPCC Report

Published May 1, 2003

The former president of the International Association of Official Statistics (IAOS) has challenged the statistical basis for climate change fears, contending the global warming scenarios developed by the United Nations’ International Panel on Climate Change are flawed due to the use of unrealistic data.

According to letters by former IAOS President Ian Castles, reported by the British news weekly the Economist and for a time made available on the publication’s Web site, the IPCC “story lines” assume unrealistic economic growth over the coming century in developing nations and attribute to these nations too high a level of greenhouse gas emissions per unit of economic production. As a result, Castles reports, even the smallest temperature increase contemplated by the IPCC–1.4º C warming by 2100–is probably too high.

Wealth Gap Overstated

Castles documents several flaws in the IPCC’s underlying data.

First, he notes the IPCC overstated the baseline income disparity between the world’s wealthiest and poorest nations. This inflated disparity is important because the IPCC warming scenarios assume poor nations will achieve economic parity or surpass the economic output of wealthy nations by the end of the century. According to the IPCC, the more economic growth required by poor nations to catch and surpass wealthy nations, the more new economic output must be generated, and the more greenhouse gas emissions will be released into the atmosphere.

The IPCC, according to Castles, calculated the current income disparities between wealthy and poor countries by converting Gross Domestic Product estimates into a common currency of U.S. dollars using market exchange rates. This method of comparing relative wealth, he notes, has been thoroughly discredited by statistical experts.

Instead of relying on nominal exchange rates to compare relative wealth, notes Castles, the IPCC should have expressed national GDP in terms of purchasing power parity.

The IPCC’s Technical Group on Climate Impact Assessment admits it used the common currency approach “in full recognition of the fact that the preferred measure of wealth and poverty is to adjust GDP using purchasing power parity (PPP) estimates–a practice initiated by the World Bank in 1996. … PPP estimates more accurately capture the command over resources in poorer nations.”

“As a result of the use of an invalid method of comparison,” explains Castles, “the authors of the [IPCC] report had greatly overstated the scale of these differences at the beginning of the projection period. They had thereby been led to overstate the growth in average incomes in developing countries that would be required to achieve the much more even distribution in global income that is envisaged in most of the scenarios. Prospective levels of emissions in these countries had probably been overstated as a result.”

By how much did the IPCC overestimate the likely economic growth of poorer nations over the next century? For poorer nations as a whole to catch wealthier nations in economic output this century would require that average incomes on the entire continent of Asia increase over the next 100 years by a factor of 70 to 1 for the IPCC’s least-warming scenario, and 140 to 1 for its most-warming scenario.

Such dramatic economic growth by even a single country–let alone an entire continent–would be unprecedented, notes Castles. Examining growth rates in wealthier countries during their most dynamic periods of economic growth, Castles points out that “average real incomes in the United States increased by a factor of perhaps 5 to 1 in the nineteenth century, and average real incomes in Japan increased by a factor of almost 20 to 1 in the twentieth century.”

GHG Intensity Overstated

A second flaw in the IPCC story lines, according to Castles, is an underlying assumption that the greenhouse gas intensity per unit of global economic growth will remain as high as it is today. He documents that greenhouse gas intensity has been declining for quite some time.

“In Britain, the first developed country, average carbon dioxide emissions exceeded 2.5 tonnes of carbon per head of the population in 1880, before the motor age began. Now Britain produces at least five times the volume of goods and services per head as in 1880, but per capita emissions of carbon dioxide have not increased at all.” The carbon intensity per unit of economic production has fallen dramatically in Britain over the past 120 years.

Adds Castles, “No country in western Europe today emits the 3.2 tonnes of carbon per head that Britons emitted in 1913, and per capita emissions in the United States, Canada, Germany, France, the Netherlands, Belgium, and Sweden are now lower than the peak levels reached in the 1970s or earlier.”

It is implausible at best, Castles argues, to assume greenhouse gas intensity per unit of economic growth will remain constant over the next century.

1990s Empirical Data

A third flaw in the IPCC story lines is a failure to calibrate twenty-first century projections with real-world data gathered during the last decade of the twentieth century.

Castles points out that the IPCC story lines emanate from a 1990 baseline. Although the story lines were not released until 2000, work on them began more than a decade earlier. As a result, by the time the story lines were released, fully 10 years of story line projections could be measured against what actually happened between 1990 and 2000.

A close correlation between the projections and the real-world data would tend to validate the story line projections, Castles explains. A significant disparity would tend to invalidate the story lines.

How did the projections fare? Predictably poorly, according to Castles. “The global level of CO2 emissions in 2000 was well below the standardized base for that year reported for all [40] story line scenarios,” states Castles.

David Henderson of the Westminster Business School in London, whose observations were also posted on the Economist‘s Web site, further observes there were substantial differences between actual GDP in the 1990s and what the IPCC story lines predicted for the decade. The story lines’ “treatment of developments over the 1990s seems curiously detached from what actually happened. Actual developments in the 1990s, as distinct from model-generated data, appear not to figure in the [story lines].”

Given that the IPCC released its story lines in 2000, “consideration of the reasons why some model results diverged substantially from actual developments over the decade–in respect of energy consumption and CO2 emissions, as well as GDP–could well have been given in the Report,” Henderson notes. Yet the disparities were never mentioned or explained.

Common-Sense Questions

The disparities between real-world observations and IPCC projections should come as no surprise, according to Castles. Even before the statistical flaws in the IPCC assumptions were discovered, common sense should have dictated taking the projections with a grain of salt. The projected warming depended on numerous implausible and striking assumptions about the twenty-first century economic growth of developing nations.

For example, under even the most conservative story lines, the IPCC assumes that by the year 2100, per-capita GDP in the U.S. will be surpassed by the per-capita GDP of such countries as Estonia, Latvia, Lithuania, North Korea, Malaysia, Singapore, Hong Kong, Libya, Algeria, Tunisia, and Argentina. The more extreme story lines assume that by the year 2100 U.S. per-capita GDP will fall behind even more disadvantaged nations than these.

“The more I learn about the processes and the outcome, the more uneasy I have become about the way that the scenarios have been used by the IPCC and are being used by the research community,” summarized Castles. “The unprofessional use of statistics to make exaggerated statements about differences in income levels between regions and countries of the world places at risk the status of the IPCC as an objective and policy-neutral body.”

James M. Taylor is managing editor of Environment & Climate News. His email address is [email protected].

For more information …

Three documents by Ian Castles and David Henderson, including letters to Dr. Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change, are available through PolicyBot. Point your Web browser to The Heartland Institute Web site at http://www.heartland.org, click on the PolicyBot button, and search for documents #11865 (letters to Pachauri, 9pp.); #11866 (presentation to the IPCC’s Technical Group on Climate Impact Assessment, 6pp.); and #11867 (further considerations, 7pp.).