Climate Change as Macroeconomics

Here's a graph showing the projected unemployment rate with the stimulus (dark blue), the projected unemployment rate without the stimulus (light blue) and then the actual unemployment rate with the stimulus (red dots).

Is the stimulus working? You wouldn't think so after looking at this graph. In fact, according to the graph, not only are we worse off than we should be with the stimulus, we're also worse off than we should have been without the stimulus. The graph seems to suggests that, not only did the stimulus not help, it actually hurt the economy.

But the counter argument is simple: The predictions were wrong! The economy was much worse than thought when the Obama administration make it's unemployment projections, and unemployment actually would have been much higher without the stimulus.

Of course, with this we-underestimated-the size-of-the-problem argument always at hand, there's no real way to determine whether the stimulus is actually working. (Greg Mankiw already made this same point much better than I can, here.)

This same prove-me-wrong problem applies to climate change science, too. It could be that human activity is changing the temperature on earth, even though the earth's temperature has steadied in the last few years. But for human activity, the earth might have cooled significantly during that period. Instead, the human interference may kept the temperature of the earth artificially high. Or the affect of human activity might simply be sporactic warming such that we shouldn't expect the earth to warm consistently (although from what I've read I understand that most models predict consistent, gradual warming).

Because of these uncertainties, there is basically no way to prove or disprove anthropogenic global warming, just as there is no way to prove or disprove the effect of the stimulus. We simply don't have any scientifically rigorous way of controlling for all of the other factors that can affect the variable we are trying to measure.

That's ok. Both economics and climatology still provide useful ways of organizing and thinking about the world. But from now on, let's give climatologists the same credence we give economists.