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« Leveson | Main | Institutional Bias »

Henderson on Castles

This is a guest post by David Henderson. It is a commemorative piece prepared for a recent conference on Australia, and celebrates the contributions of Ian Castles to the global warming debate.

First involvement: how it came about

Ian Castles became seriously engaged with climate change issues in the latter part of 2002, and over the rest of his life those issues came to form his main single professional concern. It was through him that I became involved myself, and as with him my involvement has proved to be a close and continuing one. For both of us, life took a new and unexpected course. Within it we acted not only as collaborators, which we already were, but also as joint authors.

This new departure came about in an entirely unplanned and fortuitous way. In April 2002 a contested election took place for the Chair of the Intergovernmental Panel on Climate Change (the IPCC). As a result, Dr R. K. Pachauri was appointed to the position, which he still holds. In July he came to Canberra on an official visit, and Ian was invited to a meeting that was held for him. Ian used the occasion to tell Pachauri that the Special Report on Emissions Scenarios (SRES), prepared as an input to the IPCC’s Third Assessment Report and published in 2000, was technically at fault, most notably in its handling of international comparisons of GDP. Pachauri invited Ian to write to him on the subject; and accordingly, on 6 August, Ian sent off a long and detailed letter. Three weeks later he sent a further supplementary letter, with an annex appended; and at the end of September Pachauri sent him a friendly holding response. Some time afterwards, Ian wrote to me to suggest that I should write a letter of my own to Pachauri to back him up, and on 28 October I duly complied. These actions of ours brought lasting consequences which neither of us had counted on.

An existing alliance

You might ask why it was that Ian wrote specifically to me, a resident of faraway London, to enlist my support for this new initiative on his part. The reason is straightforward. By the time he thus approached me, we had been friends, allies and informal collaborators for seven years or so. We first met in the early part of 1995, after John Stone, a former Secretary of the Australian Treasury, had suggested that I make sure to contact him during a coming visit of mine to Canberra; and it soon became apparent that we were kindred spirits. I was very much on Ian’s side in what he described, in his opening letter to Pachauri, as ‘my ongoing correspondence about the use and abuse of statistics in public debates about globalisation, poverty and the distribution of incomes both within and between countries’. In 1999 we worked in harness in connection with the ASSA conference of that year. In early 2000 I published a critique of the Human Development Report 1999, brought out by the UN Development Programme; and in my opening paragraph I said that the article could be ‘read in conjunction with a recently-published searching critique of the previous issue, the 1998 Report, by Ian Castles’.

Not only were we regularly exchanging emails at this time, but at the beginning of 2002, shortly before Dr Pachauri came on the scene, we had discussed the idea of writing a book together. The book would have presented a critique of what I had come to call global salvationism, as reflected for example in the proceedings of successive mammoth UN conferences: in a draft outline that I sent to Ian, in March 2002, I used as one of the headings ‘False consensus: dark visions and collectivist remedies’. We would have contrasted the history of failed prophecies of doom with the impressive actual record of economic performance, and argued the case for defending and enlarging the domain of competitive markets. We would have been writing as economic liberals, in the continental European sense of the term – ‘classical liberals’, if you like.

Now in that draft outline of the book, climate change issues went unmentioned; nor did Ian suggest that this was an omission on my part. Up to then, neither of us had taken a serious interest in the subject, nor had it been raised in our meetings or correspondence. This is worth noting, given that the issues had featured prominently on the policy agenda, national and international, since the late 1980s, and were about to feature prominently on the agenda of the 2002 UN Johannesburg summit meeting on sustainable development which we had been proposing to review. For a period of 15 years or so, therefore, we had both remained on the sidelines in the climate change debate. It was only in 2002 that this non-involvement on our part was brought to an end.

A precipitating issue

What had aroused Ian’s concern, and mine too, was a specific technical issue. A position that we held in common, then and throughout, is to be found in the 1993 System of National Accounts (SNA), prepared by five international agencies and approved by those agencies’ member governments. As Australian statistician Ian had taken a close interest in this report; and its principal author, Peter Hill, had been one of my staff in my own last official role, as head of what was then the Economics and Statistics Department of the OECD. In paragraph 38 of the opening chapter of the SNA it is laid down that:

‘When the objective is to compare the volumes of goods or services produced or consumed per head, data in national currencies must be converted into a common currency by means of purchasing power parities and not exchange rates…Exchange rate converted data must not…be interpreted as measures of the relative volumes of goods and services concerned’.

In this connection, in the year 2000, Ian had already registered a notable success. Here is the story, as told in paragraph 3 of his first letter to Pachauri:

‘Following the release of the UNDP’s Human Development Report 1999, I made extensive statistical criticisms of the treatment in that report of trends in global poverty and inequality. At the request of the 2000 meeting of the UN Statistical Commission, those criticisms were examined by a group of expert statisticians constituted as the Friends of the Chair of the Commission. The report of the group…upheld my more serious criticisms. In particular, the Friends of the Chair…held that HDR 1999 had made a “material error” (i.e., one which left the reader with “a fundamentally distorted view of the phenomenon being described”) in relying on national aggregates converted into $US at current exchange rates…’

In the letter, Ian went on to record that: ‘The HDR Office of the UNDP accepted the report, and has made major improvements in statistical presentation and reporting in subsequent issues of the HDR’.

The main single argument of our three letters to Pachauri was that the six scenario teams which had combined to produce the SRES, and the 40 scenarios which had been presented in the Report, had fallen into this same ‘material error’. The scenarios offered projections of GDP and emissions over the period from 1990 to 2100, with the world economy divided into country groupings. For 1990, as the base year, they took as a point of departure figures for each group’s GDP per head derived from national data which had been converted into a common measure using exchange rates; and the result of this, as with the 1999 HDR, was to overstate greatly the relative poverty of the poor countries. As Ian pointed out, in his second communication to Pachauri: ‘…average incomes in developing countries [were in reality] three or four times higher than the IPCC assumed’.

In projecting the growth of GDP per head to 2100, the scenarios provided, in varying degrees, for the closure, or substantial reduction, of this greatly overstated initial gap between rich and poor countries. We argued that in consequence these growth projections for poor countries were biased upward; and we inferred from this – though here we were mistaken, which it took us some time to realise – that a corresponding upward bias had entered into the projections of emissions from those countries.[i]

In voicing this criticism, our hope was that, following the encouraging precedent of the Human Development Report, the ‘material error’ would be recognised as such by the IPCC and its member governments, so that the required ‘major improvements’ would be made within the IPCC process. This hope, together with another aspiration which we formed, and which I will come to later, was doomed to disappointment. In outlining now the story of extended failure on our part, or at best heavily qualified success, I will start with the unexpected sequence of events that directly arose out of our letters to Pachauri.

Developments in 2003-4

Early in January 2003, Ian and I found ourselves, through an invitation which came from the IPCC Secretariat, at a meeting in Amsterdam of the Panel’s Technical Group on Climate Impact Assessment. There we were able to meet some of the leading scenario authors, and to have extended discussions with them outside the main meeting; we were introduced to Dr Pachauri; and in the meeting itself, we were both invited – generously, I felt – to make five-minute presentations of our own, despite the fact that what we had to say was unconnected with the meeting’s actual agenda. (In my presentation, I admitted that, confronted with these two strange old gentlemen, conference participants might find themselves reminded of Jack Lemmon and Walter Matthau). After we had respectively returned to Canberra and London, and in the light of the Amsterdam proceedings, Ian and I both wrote down, again separately, some further personal thoughts.

Between us we had now assembled, and posted on line, a curious swag of documents: three bulky letters to Pachauri; the two texts used as a basis for our respective five-minute presentations in Amsterdam; and twin post-Amsterdam reflections. We each emailed this collection to various friends and associates. Two of my recipients then reacted in ways that I had neither asked for nor expected, and which between them put the firm of Castles and Henderson truly on the map.

The first of these recipients was my friend Clive Crook, who was then Deputy Editor of The Economist: he offered to write up the issues on the ‘Economics Focus’ page of the paper. Of course I accepted with alacrity; and Clive’s brilliant column put our arguments better than we had put them ourselves and gave them wide exposure. Moreover, the timing was perfect, since the column appeared in February 2003 during a plenary meeting of the IPCC, at which (as I learned) the complaint against us was made, not without justice, that ‘The Economist is not a peer-reviewed journal’.

I also sent our swag to a journal editor whom at that stage I knew only by name: this was Sonja Boehmer-Christiansen, and her journal was Energy and Environment. To my great surprise, she offered to publish our collection, in full and without alteration. After consulting Ian, I replied that she was most welcome to do this, provided that she wrote right away to Dr Pachauri to invite him to arrange for the scenario authors to write a response to our criticisms, a response which she would guarantee to publish. She agreed, Pachauri agreed, and a (rather indignant) article by a group of 15 of the scenario builders duly appeared, alongside the set of miscellaneous documents by Castles and Henderson, in the same issue of the journal.[ii] In her ‘editor’s note’ on our collection, Dr Boehmer-Christiansen observed, you might think with some understatement, that ‘This is not a standard journal article’. Few editors would have acted as she did.

In later issues of the same journal, there followed a second exchange of papers. Ian and I wrote a formal co-authored piece, while in turn a rather different team of scenario authors (18 in this case) published a further response to our arguments which appeared in January 2004.[iii] Meanwhile Dr Pachauri himself had joined the debate. At the Ninth Conference of the Parties to the UN Framework Convention on Climate Change, in Milan on 8 December 2003, he gave a special press conference, the sole topic and purpose of which was a condemnation of our work. He described us as ‘so-called “two independent commentators”’, and said that we should be classed as purveyors of disinformation. His text was then posted, in prudently amended form, on the IPCC website.

Thus the scenario authors, and the IPCC directing circle, were far from accepting our critique. What is more, on this occasion, unlike that of the Human Development Report 1999, no support was forthcoming through the agency of the UN Statistical Commission. Looking through my records when preparing this paper, I came across the following email message from Ian, dated 12 June 2003. ‘Dennis Trewin [Castles’s successor as Australian Statistician] raised the Castles-Henderson issues at the UN Statistical Commission meeting in March, but was unable to win support from other countries’. This time, therefore, no Friends of the Chair were called in. We did win strong support from a former Canadian official statistician, Jacob Ryten, who published in Energy and Environment in mid-2004 an article for which I think I provided the title: it was headed ‘MERs, PPPs and IPCC: Illusions and Reality’.[iv] In this piece he commented (p. 367):

‘I cannot help being shocked by the contrasts between the [Scenario] Teams’ bold assertions and peremptory dismissal of the arguments advanced by Castles and Henderson, and their manifest ignorance of the conceptual and practical issues involved in developing and using intercountry measures of economic product.’

But Ryten was speaking only for himself, and I fear that his article gained little attention.

Two fronts and our first misapprehension

During this period and after, Ian and I were campaigning on two fronts. On the first of these, our target was the IPCC process – not just the SRES but the process more broadly, as shown by the title of our second piece in Energy and Environment. Even in his opening letter to Pachauri, Ian had cited flaws in the treatment of international inequality in the 2001 report of the Panel’s Working Group III, as well as in the SRES. In his Amsterdam text, as published, he wrote:

‘One might ask how many of the multitude of authors and reviewers of both documents, and the anonymous officials involved in the review process for these two reports, were aware of the existence of the SNA…’

In that connection, I checked the extensive list of references in the SRES, to find that SNA 1993 made no appearance there: its existence may indeed have been unknown to the 53 members of the writing team and the 89 reviewers who are listed in the SRES. At one point in the report, revealingly, the concept of gross national product was misdefined.

Alongside the article by Ryten that I noted above, in mid-2004, Ian brought out a short piece in which he criticised the way in which, as he saw it, the IPCC process had evolved. He commented there (p. 372) on a recently-published 340-page report of an IPCC Expert Meeting, observing that: ‘Most of the papers fall lamentably short of the minimum standards that could reasonably be expected in the publications of a scientific body’; and in the final sentence of this article (p. 373), he referred to ‘disturbing signs that the Panel’s role in the assessment of climate change has now become subservient to its role in supporting a specific policy agenda’.

Both Ian and I had come to the view that the IPCC’s treatment of statistical and economic issues was flawed, and that those responsible for it were not professionally representative. To remedy this situation, we advocated wider official participation. In writing to Pachauri, Ian had argued for the involvement of national statistical offices and the International Statistical Institute in making new emissions projections. In my own letter I wrote – again with the IPCC process as a whole in mind, not just the scenario exercise – that ‘the central economic departments of state…should likewise be taking an active part.’ We emphasised this latter point in our first truly joint article, and it was echoed by Clive Crook in a further piece that he wrote in The Economist in late 2003.

The other front on which we continued to be engaged was the use of PPP-based comparative data, not just in IPCC documents but more generally. In early 2005 we published another lengthy co-authored article: it was entitled ‘International Comparisons of GDP: Issues of Theory and Practice’.[v] Here we set out the case for PPP-based as opposed to exchange-rate-based figures, and reviewed the treatment of the issue in various places, including a range of international agencies as well as in the IPCC process. From our standpoint, the results of our survey were sobering. Aside from the UNDP, as mentioned above, none of the agencies appeared as free from criticism. Further, we noted (p. 82) ‘the cases of several leading [economists] whose…opinions, though not necessarily identical or consistent with one another, are at variance with what is laid down in SNA93.’

In this context, one of Ian’s personal targets, with good reason, was the World Bank; and I still have on my files some email exchanges which he initiated, and which do little credit to the Bank staff members concerned. I also have a long letter from Ian to Dr Pachauri, dated 4 July 2004, which begins by saying ‘I am awaiting your substantive reply to my letter to you of 20 April’. I believe that this letter, like its predecessor, and together with a successor dated 30 July and a further letter sent in November 1995, all went without response. From early 2004 onwards, Ian was increasingly treated in a number of official circles, not as a serious professional with a distinguished record, but as a tedious nuisance.

By this time, a disturbing reality was being brought home to us. It was increasingly apparent that in relation to the use and rationale of PPP-based cross-country comparisons it was we, rather than the scenario builders and their kind, who were in a minority. Our initial presumption, that SNA 1993 and the position laid down in it were widely known and generally endorsed by economists and other interested professionals, was revealed as a misapprehension. As will appear below, it was not our only misapprehension.

Lord Lawson and the House of Lords Select Committee

Early in 2004 our joint cause acquired a notable ally, when I convinced a former Chancellor of the Exchequer, Nigel (Lord) Lawson, that climate change issues deserved his serious attention. Lawson has been, and continues to be, a leading and influential contributor to the debate. In 2007 he brought out a book on the subject,[vi] and in early 2009 he established in London a think-tank called the Global Warming Policy Foundation, the declared object of which is ‘to restore balance and trust to the climate change debate’. The Foundation’s news service, reports and briefing papers have made a solid contribution to that debate, which Ian would have welcomed and supported: he might well have become a GWPF author.

Lawson was (as he still is) a member of the House of Lords Select Committee on Economic Affairs, and early in 2005 the Committee chose as its next subject of inquiry the economics of climate change: its report on the subject appeared in July of that year. Both Ian and I, separately, submitted memoranda of evidence to the Committee. Ian‘s submission focused on the defects of the scenarios. He wrote:

‘In this submission I draw attention to eight further errors in the SRES and/or in the responses of the SRES Teams to our critiques, in addition to those identified in our previous papers. My purpose is to provide additional evidence in support of the view that the IPCC should not be accepted as the authoritative source of information on the economic aspects of climate change’.

In its report, the Select Committee expressed ‘significant doubts about some aspects of the IPCC’s emissions scenario exercise’ and ‘some concerns about the objectivity of the IPCC process’. They also called for ‘much stronger Treasury involvement’ in the analysis of mitigation costs. These conclusions were welcome from our point of view, as also was what they said (in paragraph 53 of the report) about the work of Castles and Henderson, viz.: ‘We consider that they have performed a public service’.[vii]

The Select Committee had included five former Cabinet ministers, a former Financial Secretary to the Treasury, a former Governor of the Bank of England, a noted professor of economics, and the distinguished biographer of J. M. Keynes. Its membership was drawn from all three political parties, as well as from cross-benchers. Its Specialist Adviser for this exercise was one of the world’s leading environmental economists, the late David Pearce. Its report was unanimous. In view of these facts, one might have supposed that the report would be taken seriously in British official circles. Any such notion was dispelled when the then government’s wholly dismissive response appeared, in November 2005. I wrote of this document, in a published commentary, that it ‘is itself an illustration of those features of the IPCC process and milieu which prompted the Committee’s concerns’.[viii]

The two British government departments concerned, the Department of Environment, Food and Rural Affairs (DEFRA) and Her Majesty’s Treasury, had submitted a joint memorandum of evidence to the Select Committee. Two matters of detail arising from this document are worth noting here as symptomatic:

  • In the memorandum the two departments said that: ‘When the debate first emerged we provided the IPCC with funds so that David Henderson could attend a meeting to discuss the issues with IPCC modellers’. Though presumably made in good faith, this was not a truthful statement.
  • In August 2005 Ian sent a long email letter to the then Director, Climate Change and Environmental Risk in DEFRA, commenting on a number of mistakes and misapprehensions in the memorandum’s references to our work. So far as I know, he received no response.

Wider aspects

Initially, as I have noted, Ian and I had chiefly focused on economic and statistical aspects of work undertaken and published under IPCC auspices. But as time went on, our involvement broadened in ways that we had neither planned nor anticipated. The following quotation, taken from a piece which I wrote in June 2010, fits Ian’s case as well as my own:

‘Increasingly, and unexpectedly, I have become critical of the way in which issues of climate change have been viewed and treated by governments across the world. In particular, I have become a critic of the official expert advisory process which governments have created and continue to rely on, within which the main single element is the work of the IPCC as reflected in its successive Assessment Reports. Over the past 22 years governments everywhere, and a great many outside observers too, have put their trust in the expert advisory process as a whole and the IPCC process in particular. I have come to believe that this widespread trust is unwarranted.’[ix]

Among the episodes and publications that influenced us in this direction, from the end of 2003 onwards, I would mention in particular the evidence presented, both separately and in concert, by Stephen McIntyre and Ross McKitrick. Their writings, and later those of David Holland, not only placed in question widely accepted and influential results of IPCC-related work in climate science, but also exposed serious professional flaws in the conduct of that work.[x] Ian became an occasional and respected contributor to McIntyre’s well known blog, Climate Audit. The annex to this paper summarises, from a later perspective, the grounds for questioning the advisory process that we both came to share.

This extension of Ian’s involvement, well beyond the specific technical issue which had initially brought him into the climate change debate, was not at all surprising: it was very much in character. His participation in that debate has to be seen, not as an isolated and eccentric late-in-life venture, but rather as a further manifestation, an extra dimension, of his established professional views and outlook. In particular, a prominent element in his thinking had long been a rejection of resource and environmental pessimism especially on the part of leading scientists: an example is his published article of 2001 entitled ‘Scientists, Statisticians and the Prophets of Doom’, where he also criticised what he called ‘the enraged reaction’ of some scientific reviewers to Bjorn Lomborg’s book, The Skeptical Environmentalist. The climate change debate provided Ian with a further and continuing series of variations on what were for him the familiar themes of bias, over-presumption and mishandling of economic issues in some scientific circles. In this connection, I feel sure that he would have been greatly impressed, as I have been, by an outstanding soon-to-be published book, entitled The Age of Global Warming: A History, by Rupert Darwall.[xi]

For both of us, this broadening of our concerns, beyond economic aspects, led to a development which I at any rate had not anticipated, and which for some time I failed to notice or suspect. In becoming increasingly preoccupied with the defects (as we saw them) of the official expert advisory process as a whole, including the treatment of climate science, we unwittingly separated ourselves from the majority of economists, whether in official positions or the academic world, who had come to hold views on climate change issues. The first intimations of this unforeseen divorce from the profession in general made themselves apparent in early 2006. The occasion was the Stern Review.

Reviewing the Stern Review

At the time of the House of Lords Select Committee report, and for a while afterwards, Ian and I kept to and reiterated our key recommendation, that the central economic departments of state – treasuries, finance ministries, and in the US, the Council of Economic Advisers – should become actively involved in the climate change debate. We noted with satisfaction that the same point was made, in relation to Her Majesty’s Treasury, by Nigel Lawson during the Select Committee inquiry, when evidence was being given by the Treasury. He said that:

‘In my time at the Treasury as Chancellor it would have been unthinkable for the Treasury not to spend quite a lot of time on a serious economic analysis of an issue as important as this’

Ian and I presumed, and I think that Lawson too expected, that our shared arguments and concerns would gain support in so far as economists in general, and those in official positions in economic ministries and international agencies in particular, became more closely involved. This was our second misapprehension. We were soon to be given a forcible reminder of that well known cautionary advice: ‘Be careful what you wish for’.

In July 2005 the then UK Prime Minister (Tony Blair) and Chancellor of the Exchequer (Gordon Brown) commissioned a top Treasury official, Sir Nicholas (now Lord) Stern, to lead a team which would prepare a full-scale report on the economics of climate change. One result of this decision was that Ian and I once again became joint authors, in two separate journal articles, though in both cases as members of a larger group.

The Stern Review appeared in October 2006, while the printed volume, with an additional postscript, was published in early 2007.[xii] However, as early as January 2006 three interconnected documents had been issued as first fruits of the Review. They comprised a discussion paper entitled ‘What Is the Economics of Climate Change?’; a public lecture by Stern with the same title; and a Technical Annex on ‘The science of climate change’. The lecture was published in June 2006 as a lead article in World Economics; and towards the end of that same issue, the journal carried two related pieces arising from it: first a critique of the lecture and of its two accompanying texts; and second, a response by Stern himself. The critique was authored by a team of nine like-minded economists which I put together, and which included both Ian and Lord Lawson. (The other signatories comprised another member of the House of Lords Select Committee on Economic Affairs, Robert Skidelsky, together with Ian Byatt, Ross McKitrick, Julian Morris, Alan Peacock and Colin Robinson.)[xiii]

Looking back now, I can see that our short (six-page) article, which I have only once seen referred to, effectively broke new ground. This was because we authors, economists though we were, did not direct our main critique to economic issues. Our opening thesis was that ‘the treatment of scientific aspects in these documents is unbalanced’; and later in the article we held that the treatment by Stern and his associates was also at fault, first, in accepting uncritically the procedures and results of the IPCC process, and second, in disregarding published work which had put that process in serious doubt. In our final paragraph we said (p. 150) that:

‘By taking as given hypotheses that remain uncertain, assertions that are debatable or mistaken, and processes of inquiry that are at fault, the Review has put itself on a path that can lead to no useful outcome’.

In his reply to this piece, Stern began by contesting our opening thesis. He set out reasons for holding (p. 154) that ‘The overwhelming body of evidence leaves no doubt that the threat of climate change is real and serious’. Thus the status and interpretation of the scientific evidence emerged, I think for the first time, as an issue on which economists were divided.

When the Review itself appeared, we returned to the fray. I was able to reconvene our economic group, again including Ian; and I also put together, flanking the economists, a separate team of scientists and engineers: it comprised, Robert Carter, Chris de Freitas, Indur Goklany, David Holland and Richard Lindzen. As a result, two linked review articles, one scientific and the other economic, were published in World Economics (Vol. 7 No. 4) at the end of 2006, under the heading of ‘The Stern Review: A Dual Critique’. In a joint introduction to the two articles, representing all 14 authors, we wrote (p. 166):

‘In relation to both scientific and economic issues, we question the accuracy and completeness of the Review’s analysis and the objectivity of its treatment.’

The economic critique was the last publication in which Ian and I appeared as joint authors, and it featured an annex entitled ‘The Stern Review and the IPCC Scenarios’ which he had drafted.

Our second misapprehension revealed

The Stern Review was widely acclaimed across the world; and not surprisingly, academic economists were among the many who judged it favourably. For example, it was endorsed on publication by several leading economists including four Nobel prizewinners; and in Australia, the officially-sponsored Garnaut report of 2008 can be seen as a southern hemisphere counterpart of the Review, which it described as ‘a landmark contribution’.[xiv] On the other side of the fence, a number of prominent economists have been strong critics of the Review, as we had been: in that respect, these were allies.[xv] However, there was and remains an important element of difference between our position and that of most of our fellow-critics of Stern. Few economists, whatever their views on Stern, have joined with us in emphasising, first, that prevailing scientific opinion in this area should not be taken as established, and second, that the official expert advisory process on climate change has revealed itself as seriously flawed. Most of the critics of Stern (and Garnaut), along with the many supporters, share a common point of departure which is not ours: they endorse, or at any rate take as given and not to be queried, prevailing scientific opinion which they are apt to refer to as ‘the science’; and they do not question the official expert advisory process – or give consideration to what its critics have written.. For this reason I class these supporters and critics of the Stern Review together, despite their often profound disagreements, as upholders of generally received opinion. We dissenters, or non-subscribers to that received opinion, form a minority.

It is important to note that the professional majority here comprises not only academic economists but also an array of counterparts of theirs in the official world. This is to be expected, in so far as the views held by these officials reflect a broadly common position that their respective organisations have long taken on climate change issues: both national governments and the international agencies which are their creation have continued to subscribe to received opinion. Among the agencies, this is true of the IMF, the World Bank, the OECD (including, alas, my former Department), the International Energy Agency, the EBRD and the European Commission, not to mention the UN Secretariat, UNCTAD, the UNDP, the UNFCCC and the UN Environment Programme: in all of these, it would be hard to find economists who hold, and are ready to voice, dissenting views.[xvi] The same applies within those agencies’ member governments. What is especially telling is that the treasuries and finance ministries, on which Ian and I had pinned our hopes, have to be classed among the official upholders, as indeed had been the case from the start. Thus our initial expectation of wide and firm support from fellow-economists, and from departments and agencies with economic responsibilities, was in due course exposed as illusory. That situation still pertains today. It remains our second misapprehension.

Voicing dissent

After becoming fully attuned to our minority status, I published a long article in World Economics in early 2009 entitled ‘’Economists and Climate Science: A Critique’. In the following year I returned to the theme in the pages of the quarterly Newsletter of the Royal Economic Society, where I was able to take account of the so-called ‘Climategate’ and ‘Glaciergate’ affairs and their sequel, all of which had provided further evidence of unprofessional conduct in relevant scientific circles.[xvii]

This latter article appeared only after Ian’s death. However, I believe that he would have agreed fully with the following two excerpts from it. I quote them now despite their length, because I feel that here I was speaking for us both.

First excerpt

‘In a recent paper, I presented a critique of positions taken by a range of prominent economists of varying shades of green who were upholders of received opinion. I commented there on the Stern Review; on its Australian counterpart, the officially commissioned Garnaut report; on papers by Dieter Helm, William Nordhaus, and Martin Weitzman; and on the treatment of climate change issues by the IMF. (I could now add the World Bank, the International Energy Agency, and the OECD Secretariat). I charge this impressive array of authors and agencies with three interrelated failings: over-presumption, credulity and inadvertence:

  • Over-presumption, in accepting too readily that received opinion on global warming is firmly grounded on scientific findings which can no longer be seriously questioned. In so doing, they are treating as established facts what should be viewed as no more than working hypotheses which have won considerable expert support;

  • Credulity, through placing unwarranted trust in a flawed official expert advisory process, and

  • Inadvertence, in that they have disregarded published evidence, evidence which they are competent to weigh and evaluate, which puts that process in serious question.

The latter two aspects, the credulity and the inadvertence, go together. Economist upholders, both in the groves of academe and around the corridors of power, have not woken up to the ways in which the official expert advisory process, and the IPCC process as its leading element, have been revealed as professionally not up to the mark. Hence there is a missing dimension in their treatment of policy aspects: they have not caught on to the need to strengthen the basis of policy, by making the advisory process more objective and professionally watertight’.

Second excerpt

‘…given what is at stake economically, a responsibility, so far unrecognised, rests on the central economic departments of state – on treasuries, ministries of finance and economics and, in the US, the Council of Economic Advisers.

I am myself a former Treasury official; and much later, as head of what was then the Economics and Statistics Department in the OECD Secretariat, I had close dealings over a number of years with the central economic departments in OECD member countries. I have been surprised by the failure of these agencies to go more deeply into the evidence bearing on climate change issues, their uncritical acceptance of the results of a process of inquiry that is so obviously biased and flawed, and their lack of attention to the well-founded criticisms of that process that have been voiced by independent outsiders – criticisms which, as I think, they ought to have been making themselves. A similar lack of resource has characterised the Research Department of the IMF and the Economics Department of the OECD…In all these official bodies with economic responsibilities, there has been a conspicuous failure of due diligence’.

Wider aspects revisited

These criticisms of many fellow-economists reflected the broader concerns that Ian and I – and others too – had come to hold about the official handling of climate change issues across the world. In that broader context, here is an excerpt from an article of mine which first appeared in late 2011. Here again I believe that I was speaking for Ian as well as myself:

‘In relation to climate change issues, governments in general, and the OECD member governments in particular, have locked themselves into a set of procedures, and an associated way of thinking – in short, a framework – which both reflects and yields over-presumptive conclusions which are weighted towards alarm. They have done so through a worrying combination – of credulity and inadvertence on the part of responsible lay persons, and of chronic bias and professional underperformance on the part of trusted experts and expert bodies. In this whole episode, the capacity of human societies today to arrive at well founded conclusions and decisions has been placed in question.’ [xviii]

Last contacts

The last time that I saw and talked with Ian was in March 2007, on a visit to Canberra. (During that visit, by the way, I was invited by the Treasury to speak at a well attended and exceptionally well organised seminar: it is a pleasure to thank once again those who were responsible for that invitation). In preparing this paper, I found on my files just two personal emails from Ian which he had sent me after our final Canberra meeting. Both were prompt and well-crafted responses to requests on my part for comment.

As to the first of these messages, I had sent Ian an article of mine which came out in June 2007, where I had quoted, and now drew to his attention, an excerpt from a speech in the House of Lords by Richard Layard, a well known LSE professor of economics and a member of the Select Committee. Layard had referred to the many statements on climate change issues by national scientific academies, and said that he could not ‘really see how non-scientists can take a different view unless we want to question their motivation’. Ian concluded his comments on this argument by writing: ‘Examination of the contents of statements by national academies confirms your view that the support of these bodies for the IPCC should not be regarded as decisive and is by no means above question’.

The last message on file dates from July 2008. It was prompted by my sending Ian a series of arguments against the use of PPP-based comparisons which had been sent to me by an eminent American professor of economics. Ian dealt with each argument in turn in masterly fashion. Reading those pages, it was sad to be reminded that I had lost for ever, as well as a true friend, a much-valued continuing source of ideas, information and advice.

A final glimpse

In preparing this present paper, and looking back at our shared thoughts and activities over more than a decade, I asked myself whether in fact Ian counted as, and would have described himself as, an economic liberal. I feel confident that the answer is Yes; but rather than going into the question directly I will end with a quotation from an original and perceptive article, very characteristic of its author, that Ian wrote and sent to me in (I think) the year 2000. The theme of the article, a favourite one of his, was unwarranted pessimism and collectivist prescriptions on the part of eminent scientists and political leaders who unwisely put their trust in such presumed experts. In this case, the pertinent examples he gave were from Britain in the years after World War II. One of the scientists involved was Sir Henry Tizard, then Chief Scientific Adviser to the Ministry of Defence and chairman of an official Advisory Council on Scientific Policy. The final two paragraphs of Ian’s paper, as also of this paper of mine today, read as follows:

‘…Tizard told the 1948 British Association meeting that “All social progress, such as spread of education, promotion of health, opportunities for leisure and healthy recreation, must depend on the power of technology to increase the productivity of industry.” Economist [Ludwig] Erhard, architect of Germany’s “economic miracle”, recognised the vital role of another factor: effectively functioning markets. It is difficult to resist the conclusion that much of the difference in the material achievement of the two countries in the early postwar decades can be attributed to the relative influence of these mindsets.

It would be oversimple to extend the comparison, and attribute all of the changes in the relative economic performance of Britain and Germany through the nineteenth and the twentieth centuries solely to the relative strength in each country of liberal ideas, both in the intellectual and the political spheres. But the pervasive influence of such ideas upon “the material foundations of the liberty and welfare of all peoples” should not be underestimated’.

David Henderson’s last post as a salaryman was as Head of what was then the Economics and Statistics Department of the OECD in Paris. In later years he was a visiting fellow or professor at various institutions round the world; and these included Monash University, the University of Melbourne, and the Melbourne Business School. He is currently a fellow of the Institute of Economic Affairs in London, and chairman of the Academic Advisory Council of the Global Warming Policy Foundation.

ANNEX: A Flawed Process

The article which follows appeared in The Australian on 16 February 2010, under the title ‘Climategate Is Just the Tip of the Iceberg’.

Two recent episodes have given rise to concerns about the quality and reliability of received expert advice on climate change.

First is the unauthorised release of a mass of email exchanges from the server of the Climatic Research Unit at the University of East Anglia: the contents have put in question the conduct of CRU scientists and some of their correspondents.

Second is the discovery that statements made in the fourth and most recent Assessment Report (AR4) from the Intergovernmental Panel on Climate Change (IPCC) were based on sources which should not have been given weight. In relation to what was said about Himalayan glaciers, the IPCC has issued a formal admission of error.

The concerns raised by these episodes are well founded. However, ‘Climategate’ and ‘Glaciergate’ are not to be viewed in isolation. They are instances of a more fundamental and deeply entrenched phenomenon.

In relation to climate change issues, the established official expert advisory process which governments have commissioned and relied on has shown itself, over many years, to be not professionally up to the mark. The situation is one of unwarranted trust.

The main headings of unprofessional conduct within the process, all identified and documented before the recent revelations, have been:

  • Over-reliance on in-group peer review procedures which do not serve as a guarantee of quality and do not ensure due disclosure

  • Serious and continuing failures of disclosure and archiving in relation to peer-reviewed studies which the IPCC and member governments have drawn on.

  • Continuing resistance to disclosure of basic information which reputable journals insist on as a precondition for acceptance. (In the CRU emails, participants discuss a range of arguments, pretexts and devices that could be used to fend off disclosure, including the deletion of emails containing material that had been sought under FOI requests – requests which were made only because authors had not followed accepted scholarly procedures).

  • Basic errors in the handling of data, through failure to consult or involve trained statisticians.

  • Failure to take due account of relevant published work which documented the above lapses, while disregarding IPCC criteria for inclusion in the review process.

  • Failure to take due note of comments from dissenting critics who took part in the preparation of AR4.

  • Resisting the disclosure of professional exchanges within the AR4 drafting process, despite the formal instruction of member governments that the IPCC’s proceedings should be ‘open and transparent’. And last but not least

  • Failure on the part of the IPCC and its directing circle to acknowledge and remedy the above deficiencies.

In the light of ‘Glaciergate’, one could add to the above list ‘reliance on worthless (non-peer-reviewed) sources’. But mere insistence on peer review would leave in place the other basic flaws.

Comprehensive exposure of these flaws has come from a number of independent commentators. Particular mention should be made of two Canadian authors, Stephen McIntyre and Ross McKitrick: both separately and in joint publications, going back to 2003, they have made an outstanding contribution to public debate. Together with a perceptive British critic, David Holland, they are the subject of unfavourable references in the CRU emails. However, their work and that of other informed critics has been disregarded by governments, and by most commentators in academic journals and the media alike.

The glaring defects in the expert advisory process have gone unacknowledged and unremedied by what I call the environmental policy milieu. This high-level failure, as also the defects themselves, have resulted from chronic and pervasive bias. Right from the start, members of the milieu, and of the IPCC’s directing circle, have been characterised by what has been well termed ‘pre-commitment to the urgency of the climate cause’.

Although the IPCC in particular is now under fire, this is too restricted a focus. It is true that the Panel’s work forms the leading element in the official expert advisory process. But the basic problem of unwarranted trust goes further: it extends to the chronically biased treatment of climate change issues by responsible departments and agencies which the Panel reports to, and in nationally-based organisations which they finance (such as the CRU).

It is not just the environmental policy milieu that is to blame for the mishandling by governments of climate change issues. As a former Treasury official and international civil servant, I have been surprised by the failure of economic departments in OECD member countries to audit the evidence bearing on climate change issues, their uncritical acceptance of the results of a process of inquiry which is so obviously biased and flawed, and their lack of attention to the criticisms of that process which have been voiced by independent outsiders – criticisms which they ought to have been making themselves. A similar lack of resource has characterised the Research Department of the IMF and the Economics Department of the OECD. In all these departments and agencies, there has been a conspicuous failure of due diligence.

The chief moral to be drawn is simple. In an area of policy where so much is at stake, and so much remains uncertain and unsettled, policies should be evolutionary and adaptive, rather than presumptive as they are now; and their evolution should be linked to a process of inquiry and review which is more thorough, balanced, open and objective than has so far been the case.

[i]Our mistake arose because of a failure to think through the implications of an important point that Ian had made right from the start. In his second letter to Pachauri, he had noted that seriously underestimating the GDP of poor countries, through the use of exchange-rate-based comparative measures, brought with it a corresponding overestimate of comparative energy intensities: to quote the letter, ‘The assumption of a huge margin of difference in energy intensity…is false’. Hence the resulting SRES projections embodied, in varying degrees, twin errors which were largely offsetting. We were right to argue that, in so far as they built in the closure of an imaginary initial gap between rich and poor countries, projections of GDP growth in the latter group would be biased upward. We failed to note the corollary, that closing an equally imaginary gap in the energy intensity of those countries would damp down the effect of that GDP growth on emissions.

[ii]Energy and Environment, Vol .14, No. 2-3.

[iii] Our joint paper was entitled ‘Economics, Emissions Scenarios and the Work of the IPCC (Energy and Environment, Vol. 14 No. 4, 2003. ‘Emissions Scenarios: A Final Response’, by Arnold Grubler and others, appeared in the same journal in Vol. 15 No. 1, 2004.

[iv] Energy and Environment, Vol. 15 No. 3, 2004.

[v] World Economics, Vol. 6 No. 1, 2005.

[vi] In Defence of Reason: A Cool look at Global Warming, Duckworth Overlook. The 2009 paperback edition incorporates some changes, and includes an extended afterword.

[vii] House of Lords Select Committee on Economic Affairs, 2nd Report of Session 2005-06, The Economics of Climate Change, Volume I: Report, Volume II: Evidence. The Stationery Office, 2005.

[viii] Government Response to the Economics of Climate Change, printed in November 2005 as an Appendix to the Select Committe’s report. My critique of it was published in Energy and Environment, Vol. 17 No. 1, 2006.

[ix] This is an excerpt from evidence that I submitted to the InterAcademy Council Review of the IPCC.

[x] There is an array of possible references here: Ross McKitrick’s website is a good source. Some leading issues, first raised by McIntyre and McKitrick, were well reviewed in David Holland’s 2007 article, ‘Bias and Concealment in the IPCC Process’ (Energy and Environment, Vol. 18 No. 7-8); and the main single issue forms the subject of Andrew Montford’s book, The Hockey Stick Illusion: Climategate and the Corruption of Science’ (Stacey International, 2010), which is itself extensively referenced.

[xi] The book is due to be published in London in March 2013 by Quartet Books.

[xii] Nicholas Stern and other authors, The Economics of Climate Change: The Stern Review, Cambridge University Press. 2007.,

[xiii] Nicholas Stern, ‘What Is the Economics of Climate Change?’; ‘Ian Byatt et al., ‘Climate Change: The Stern Review “Oxonia Papers”’; Nicholas Stern, ‘Reply to Byatt et al.’ World Economics, Vol. 7 No. 2, 2006.

[xiv]The Garnaut Climate Change Review of 2008 was followed by The Garnaut Review 2011, likewise published by the Cambridge University Press. I commented on the published first draft of the report in a piece entitled ‘Climate Change Issues: An Australian Contribution to the Debate’ (World Economics, Vol. 9 No. 3, 2008.)

[xv]A recent searching critique of the Review, published in 2012 by the Global Warming Policy Foundation, is ‘What Is Wrong with Stern?, by Peter Lilley MP, a former UK cabinet minister.

[xvi] I published a critique of the IMF’s treatment of climate change issues, under the heading of ‘Over-Presumption and Myopia’, in June 2008 (World Economics, Vol 9 No 2). .

[xvii] ‘Climate Change Issues: New Developments in a 20-Year Context’, Royal Economic Society Newsletter, October 2010.

[xviii] The piece from which this passage is taken forms a chapter in a volume of essays in honour of the President of the Czech Republic, Vaclav Klaus (Today’s World and Vaclav Klaus, edited by Jiri Brodsky and published in 2012 by Fragment). The piece first appeared with a different title in the Australian journal Quadrant, and in this form President Klaus posted it on his personal website.

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Reader Comments (60)

I always believed that dodgy, biassed and unverified economic models built on a firm foundation of dodgy, biassed and unverified climate models could produce nothing but ... biassed dodginess compounded.

David Henderson's posting confirms my belief.

Nov 29, 2012 at 8:46 AM | Registered CommenterMartin A

I worked at the ABS in Canberra during Castles' time as Chief Statistician. During eight months there I don't recall hearing a word of criticism said against him. He will be sadly missed.

Nov 29, 2012 at 8:56 AM | Unregistered CommenterJon Jermey

Blimey. Talk about a bombshell. Am left reeling. Remarkable stuff.

Nov 29, 2012 at 9:05 AM | Unregistered CommenterAgouts

Another great article to follow the pamphlet on the IoP.

It is worse than we thought. It appears that there are very few people of integrity left in any organisations of authority or influence. Is there anywhere that hasn't been corrupted?

Nov 29, 2012 at 9:19 AM | Unregistered CommenterPhillip Bratby

I was aware of bits of all this, but had never seen it all put down so succinctly in one place. Fascinating, frightening and depressing all at the same time. Reminds us all of just how far we have yet to go. Thank you David for such a well written article. I’m sure Ian would have been proud.

Nov 29, 2012 at 9:32 AM | Registered CommenterLaurie Childs

Blimey squared!

Nov 29, 2012 at 9:33 AM | Unregistered CommenterJames P

David, that was a real tour de force, for which many thanks.
Further evidence of what many of us have been saying for years — "climate change" was never about science; it was a political programme from the beginning and, as "…average incomes in developing countries [were in reality] three or four times higher than the IPCC assumed." shows, we know who were intended to be the beneficiaries and therefore who were to be cast as villains and therefore victims.
Shame that it's not going to work out like that. The west will certainly be the victims but the beneficiaries will be industrialising Asia. The developing countries are unlikely to get a look-in.

Nov 29, 2012 at 9:56 AM | Registered CommenterMike Jackson

"This high-level failure, as also the defects themselves, have resulted from chronic and pervasive bias" The details of "28gate" at the BBC strongly suggest that this "chronic and pervasive bias" is a matter of deliberate policy not merely the effects of unprofessionalism.

Nov 29, 2012 at 10:01 AM | Unregistered CommenterRich

It is instructive to compare the intelligence, dignity, dilligence and courage shown by Henderson & Castles with all that we have read and seen of (say) leading Team member Michael Mann.

Chalk vs. cheese.

Nov 29, 2012 at 10:03 AM | Unregistered CommenterJerryM

Why am I not surprised?
Last year I wrote twice to Lord Stern (by recorded delivery), pointing out a serious error in his crop yield analysis.
No reply

Eight days ago I wrote to the BBC Trust and my M.P. (by email and recorded delivery), complaining about the BBC's bias in favour of climate alarmism, based on the advice of a motley bunch of activists and money grabbers, rather than, as the BBC stated, "the best scientific advice available".
Guess what?
No reply.

These duplicitous snakes will duck, dive, ignore, marginalise and ridicule anyone who threatens their twisted ideology, or money trough. And they will get away with it.

I'm beginning to think the "French Farmers'" methods are the only way forward.

Nov 29, 2012 at 10:10 AM | Unregistered CommenterDon Keiller

Thank you for this valuable article! This information merits wide circulation and discussion. Many reforms are needed in how such matters are treated by officials, agencies, and scientists.

Nov 29, 2012 at 10:31 AM | Registered CommenterSkiphil

The information in Wikipedia on Ian Castles is very scant with no mention of his concerns about the IPCC. What a surprise!
No doubt the Warmist Guardians have been making sure that certain information is not published.

Nov 29, 2012 at 10:41 AM | Unregistered CommenterConfusedPhoton

Is there anywhere that hasn't been corrupted?
Nov 29, 2012 at 9:19 AM Phillip Bratby

CA, BH,...

Nov 29, 2012 at 10:42 AM | Registered CommenterMartin A

'the intelligence, dignity, dilligence and courage shown by Henderson & Castles with all that we have read and seen of (say) leading Team member Michael Mann.'

I think David here captures the essence of Ian Castles precisely. I served on the Joint Academies Committee on Sustainability with him in the early 2000s, and what impressed me most about him was his dogged politeness in filleting precisely those whose errors he was addressing.

I think my favourite of his many victories was the reply he received from an officer on behalf of the President of the World Bank stating that, while Ian was correct in insisting that PPP be used, the President liked the answer that MER conversions gave. A perfect example of what I called virtuous corruption.

There are few like him - but (as this piece shows) David Henderson is very close!

Nov 29, 2012 at 10:43 AM | Unregistered CommenterAynsley Kellow

It was the work of Henderson and Castles that set me on the road to skeptiscm.

In Castles letter to Pachauri, there was a reference to countries like North Korea having twice the per capita GDP of the US, by 2100. I checked the IPCC site, and sure enough, they did have the DRNK at twice the GDP of the US.

Since the letter, though, the IPCC locked that webiste, saying it was being "adjusted". For nearly 10 years now. But this site shows the data:

The DPRK has 210,000 per capita GDP, the US 114,000.

Note that the emissions scenarios were based on the economic models. The climate models are based on the emissions models. Extinction, acidification, sea level etc are based on the climate models.

As Willis E says, its models all the way down. And the intial model is obviously wrong.

Nov 29, 2012 at 10:49 AM | Unregistered CommenterLes Johnson

I'm gob smacked ... beautifully written ... is there anybody out there listening to this common sense?

Nov 29, 2012 at 10:53 AM | Unregistered CommenterStreetcred

An interesting read, thank you. Your endnote [i] is a textbook example of how to acknowledge a mistake.

The errors in the science that you cliam to have identified can presumably be summarized as producing a bias in the equilibrium climate sensitivity that comes from the IPCC process. The IPCC roughly describe the climate sensitivity as lying between about 2 and 4.5 degC, but with a small possibility of both lower and higher values. What I can't tell from your piece is what you believe the climate sensitivity to be.

Would you be willing to express it as a range, as the IPCC does, so that it would be possible to see what effect your estimate would have upon outputs from the policy models, such as the correct price to attach to emissions of CO2?


Nov 29, 2012 at 10:55 AM | Unregistered CommenterChris Hope

This excellent article deserves careful reading and, if possible, summarising to reach a wider audience.
I can’t resist commenting on this though:

I would mention in particular the evidence presented, both separately and in concert, by Stephen McIntyre and Ross McKitrick.
To hear Ross McKittrick in concert, (on bagpipes and bodhran) go to
No, really.

Nov 29, 2012 at 10:57 AM | Registered Commentergeoffchambers

Thank you indeed David Henderson.

This is an example of the concept of excellence, objectivity and integrity in civil service, now sadly diluted, in which some of our best minds devoted their careers to the economic progress and general betterment of their societies. It is not pleasant to think what may result from a dumbing down, even corruption, of that worthy tradition.

Nov 29, 2012 at 11:01 AM | Unregistered CommenterChris M

Many thanks for this fine piece. Calm in tone, very well written, informative and balanced but thought-provoking with it. I shall be returning to it.

Nov 29, 2012 at 11:27 AM | Unregistered CommenterDaveB

Far be for me to criticise such a careful analysis of the IPCC 'fraud'.

Nov 29, 2012 at 11:41 AM | Unregistered CommenterAlecM

Chris Hope,

Firstly, I find it interesting that in that lengthy and informative article and the many issues it raises, you choose only to highlight a point where David admits a mistake.

Secondly, where in the article does David claim to have identified errors in the science? As I read it, he is merely pointing out that others have critiqued the science but the IPCC process has never allowed those critiques to be properly taken into account. Why on earth would you expect a statistician with mostly economic expertise to give you a climate sensitivity figure? Would you care to give us yours?

Nov 29, 2012 at 12:00 PM | Registered CommenterLaurie Childs

We must (as ever) be in debt to the Bish. Over the last few days I have read with increasing admiration his new book "Hiding the Decline", his pamphlet "Institutional Bias" and now this fabulous piece by David Henderson, published on the BH blog.

I must confess that all three are, from a rational point of view, hugely depressing. All three conclusively illustrate that, at the very time that both reasoned scientific work on the one hand and the rude progress of factual, measurable events in the actual climate on the other, together demonstrate that the "consensus science" is without merit; we still have a huge mountain to climb.

That giddy peak is the mixture of crass incompetence and malicious dishonesty that characterises the political "elite" in this (and many other) countries, together with the "activists" who have now taken over Academia, the Institutions, the Media and even the Charities.

This ineptocracy is, if anything, getting bolder, stronger and more entrenched. Their policy prescriptions are becoming as eyewateringly unaffordable as they are laughably inadequate.

Many times, reading both the Bish's publications and this by David Henderson, I found myself laughing out loud. Not just, unfortunately, because of their elegant prose and fine but unobtrusive wit.

Mainly because the topics they discuss can only allow laughter or a terrible and ultimately self-destructive rage.

It is, perhaps, to be hoped that our alarmist chums have got their escape routes well planned. The public at large are not likely to approach repeatedly shivering in the dark with much forbearance.

Nov 29, 2012 at 12:15 PM | Unregistered CommenterMartin Brumby

I am myself a former Treasury official; and much later, as head of what was then the Economics and Statistics Department in the OECD Secretariat, I had close dealings over a number of years with the central economic departments in OECD member countries. I have been surprised by the failure of these agencies to go more deeply into the evidence bearing on climate change issues, their uncritical acceptance of the results of a process of inquiry that is so obviously biased and flawed, and their lack of attention to the well-founded criticisms of that process that have been voiced by independent outsiders – criticisms which, as I think, they ought to have been making themselves.

Dear Dr Henderson
Thank your for your wonderfully patient and elegant essay.

Regarding the passage above (esp. the highlights), I believe there are two inter-related possible explanations. But it is good to see there are others who recognize that this issue - of institutional failure in the face of ideologic assault disguised as environmentalism - and have seen its existence first-hand.

Firstly, it is perhaps that economists and experts expend effort acquiring expertise but neglect their philosophy, which is just as required eventually in the application of their thus-gained expertise. This is obviously not true at an individual level, but in the bulk, it has to be. The numerous seminars, retreats, talks and dabbling in Chinese philosophy that one finds higher management hurrying to in large organizations speaks to this. Environmentalism and eco-philosophy thrives well in this niche. One might be surprised at the number of high-ranking officials and corporate officers who buy into eco-thinking. For companies for instance, the jagged edges of the interface between the profit-making corporation and of dipping into enviro-thinking are smoothed out by 'corporate social responsiblity' - actions which are mistakenly criticized by environmentalists as greenwash, but actually constitute maneuvers that enable acceptance and co-existence of corporatism and environmentalism in the corporate environment. In the governmental setting, the situation is no different as the basic rules are the same.

Nov 29, 2012 at 12:20 PM | Registered Commentershub

Laurie Childs:

Sorry that my attempt to praise was taken as criticism!

David Henderson has claimed to find evidence of bias and unprofessionalism, evidence which economists and statisticians are competent to weigh and evaluate. If that is so, it should be possible to give a revised range for the climate sensitivity once the 'bias and unprofessionalism' has been corrected. That would be a very positive contribution to the debate.

It would be interesting to me because I developed and use one of the climate policy models (PAGE09), and I would be able to run the model with a 'corrected' range for climate sensitivity and see what effect it has upon the results.


Nov 29, 2012 at 12:23 PM | Unregistered Commenterchris hope

"Inadvertence, in that they have disregarded published evidence, evidence which they are competent to weigh and evaluate, which puts that process in serious question."

Yes, very strenuous inadvertence from players such as Muir-Russell and Lord Oxburgh

Nov 29, 2012 at 12:44 PM | Unregistered CommenterBullocky

Chris Hope: I didn't take it as criticism, just so you have another data point. I took you to be thoughtful, as indeed I think anybody should having read this account. Thank you for reading it. And thank you, Ian Castles and David Henderson.

Nov 29, 2012 at 12:48 PM | Unregistered CommenterRichard Drake

Secondly, there is what I refer to as the 'far-afield' hypothesis. Why does enviro-thinking find acceptance in the halls of modern bureaucratic power? I wrote earlier in Ben Pile's blog (slightly paraphrased):

"Consider the roots of eco-political philosophy. You would go back to a time – the late 80s – when the dominant political modes of thought – political capitalism and communism (and its various avatars) were reduced to being framed as “methods of attaining human prosperity” (they are not) and nothing more. The resulting vacuum in the sphere of a search of higher modes of political thought – was filled by the ecophilosophies. This is because, it was at this same point that the ecophilosophies were fresh, young, new and untainted by utilitarianism and pragmatism (the purest form of this expression is the deep ecology movement). Which is exactly why politicians of all stripes agree unanimously when it comes to the environment. In environmentalism alone, today, lies the grounds for politicians to give expression to pure thought. All other political positions are either defeated, or just dead husks. "


"The realm of eco-politics however, has seen the same flowering that was witnessed in ‘Labour’ and the ‘realm of the worker’ in early 20th century. If you look at Nietzsche, for example, he does not even comprehend the question posed by Marx. “Why are they riling up the workers? What is this ‘equal rights’ business?” That is a characteristic of the power-appetite of the Left – its theoretical foundations, of necessity, take root and blossom far afield and away from usual inhibitory influences of debate in open society. The field of environmentalism has played this role (as victim?) post-80s. The world suddenly becomes the western provincial Russia of Dostoevsky’s “The Demons” – it has no immune resistance to say anything back to the social environmentalists."

Environmentalism goes without cross-examination for the same reasons communism went without cross-examination in the early 20th century.

Nov 29, 2012 at 12:49 PM | Registered Commentershub

Bish thanks for bringing this excellent article to your readers.

It really is depressing when even the treasury have stopped asking questions.

It is time for the government to be asked to explain why it has chosen to punish its citizens - with the rest of the world planning to build 1200 coal fired power stations, the proposal that we continue to subsidise the roll out wind farms which will not, indeed cannot, have any measurable impact on the amount of ACO2 in the atmosphere, can only be seen as a wilful act by government to punish its citizens with artificially high energy costs.

I would write to my MP wit a request that he try to explain this to me but as I have said before he is a fully paid up member of the clinically brain dead society.

So, Bish, how do we get the message out? Time for some co-ordinated action, methinks.

Nov 29, 2012 at 12:56 PM | Unregistered CommenterDolphinhead

Chris Hope,
This blog has, on two or may be even three different earlier occasions, discussed posts by Nic L and the Bishop on the bunkum derivation of the sensitivity range by the IPCC.

Nov 29, 2012 at 12:58 PM | Registered Commentershub

Thanks for this article, which is both a tribute to Castles (and Henderson) and a fascinating history of how dissent was marginalised, even when it came from impeccable sources.

Ian Castles was one of the most distinguished, and brightest, Australian public servants of the post war era. Under his guidance, the Australian Bureau of Statistics regularly was rated the best in the world, except when the Canadians sneaked in now and then. He was incorruptible, rigorous and courteous to boot. The contrast with his opponents could not be more stark.

It is fascinating to read how, by looking at the deficiencies in their own area of expertise, Castles and Henderson came to realise that the whole IPCC process was flawed - something which Donna Laframboise later documented in detail. It is also interesting to read about how, from initially being treated with professional respect and courtesy, people like Castles and Henderson became pariahs in the space of a few years. A number of distinguished scientists had similar experiences.

Many thanks Dr Henderson. And, why am I not surprised that Wikipedia downplays and edits Castles' achievements?

Nov 29, 2012 at 1:04 PM | Registered Commenterjohanna

We now see that trying to disrupt the status quo leads to failure despite right being on the side of the sceptic not the alarmist.
Thanks for a very interesting post.

Nov 29, 2012 at 1:06 PM | Unregistered CommenterJohn Marshall

Chris Hope,

I didn’t take what you said as a criticism of David. I said that it was interesting that that was the only thing in the article that drew comment from you. I was genuinely surprised that nothing else caught your attention (apart from David apparently identifying problems with the science).

I am aware of who you are and what you do and bearing that in mind, if David is to be considered expert enough to come up with a revised climate sensitivity figure, then surely the same applies to you? The whole thrust of David’s article is that people such as yourself are blindly accepting the IPCC’s figures as gospel without carrying out their own due diligence. Might it not be a good idea for you to take a closer look at the whole process yourself? Do you think any of David’s criticisms have any merit or are you going to hand wave them away on the basis that he is currently of a minority view? Why would you need ‘corrected’ sensitivity figures anyway? As someone the rest of us are expected to trust and regard as professional in such matters, I would hope that you would have already run every figure in the range of 0 to 10 through your models, so your advice could change as circumstance dictates. Or are you saying you really believed the IPCC range was the final answer?

Nov 29, 2012 at 1:14 PM | Registered CommenterLaurie Childs

t gets hard to explain what I believe happens at the molecular level, but I'll give it a go.

Firstly, imagine an atmosphere without convection. Venus gets close to this because it is so dense. There is also very little wind because it rotates so slowly (244 Earth days per revolution) and so we can just about consider it to be a static atmosphere. Yet the (pseudo) adiabatic lapse rate is still observed and the same calculations that work for Earth also work there.

We know there are many more molecules where the pressure is higher, so we can assume there is a fairly smooth (near linear) decline in the density of molecules with increasing altitude.

So molecules don't have to travel large distances up and down. Nor is it any restriction that as many go up as go down, because we already have the distribution we need. Energy can transfer in molecular collisions, without any particular molecule having to travel a significant distance.

So the temperature gradient is a bit like a concrete road going straight down a mountainside. If you pour loads of sand on it at various points (representing absorbed heat at different altitudes) the molecular interactions get temporarily thrown out of the nice equilibrium state they were in. The sand (heat) spreads out and blows away (energy gets radiated away) and it all settles back down to the supporting road.

However, if there is a long-term increase in mean Solar insolation levels it is more like adding a thin layer of concrete to the whole surface, creating a new road surface (temperature plot) which is higher but is still parallel to the old one and still has the same gradient. This is representative of what happens during warming periods in the natural ~1,000 (maybe ~1,400) year cycle and the superimposed ~60 year cycle.

So it's as if the individual molecules being pulled downwards by gravity and pushed up by pressure from beneath realise they are in the wrong place on top of the pile of sand. So, like grains of sand spreading out, some go one way and some another way until the temperature hump (or dip) levels out and everything gets back to the natural gradient. Or, more precisely, their energy goes in different directions through collisions.

Hence, on Venus, if too much incident insolation is absorbed at the top of the atmosphere, the extra kinetic energy will be "bounced" down the chain (rather like conduction, but better called diffusion) without the individual molecules actually having to travel very far.

This creates an apparent heat flow, but it can only ever involve equal interchanges of PE and KE and thus no change in entropy, and so no violation of 2nd LoT.

Also, while this is happening, each layer in the Venus atmosphere will radiate away whatever extra energy it absorbs and hasn't sent elsewhere by diffusion, so the temperature falls back to the base line.

As you go from day to night, I suggest that the whole temperature plot from the Venus surface to the TOA shifts downwards about 5 degrees, whilst retaining the same gradient.

Whatever happens, it is apparent that the surface itself will remain very close in temperature to the base of the atmosphere and its temperature is in fact at least "supported" by that of the base of the atmosphere, because conduction would prevent it getting significantly cooler. Stored energy beneath the crust would also have a stabilising effect as on Earth.

The overriding consideration is that, for both Earth and Venus, as well as other planets with thick enough atmospheres - Jupiter, Saturn, Uranus and Neptune - this process must have happened in the atmosphere first (because of the effect of gravity) and then the surface temperature was established by that at the base of the atmosphere. The internal conduction plot from the core is then also set by the core temperature and the surface temperature. This of course all took a long time obviously at least millions of years, so, in the short term of just a few thousand years, the mass of energy under the surface changes little and so provides a solid stabilising effect.

Hope that's helped clarify my thinking on all this. It leaves the conventional back radiation and feedback concepts right out of consideration – simply because they cannot override the mechanism which maintains the adiabatic lapse rate. So much for the AGW conjecture!

Doug Cotton

Nov 29, 2012 at 1:18 PM | Unregistered CommenterDoug Cotton

David Henderson always seemed to me to be on the side of the angels. Decades ago - when he was a Prof at University College, I believe, he wrote a paper describing how hard it was to stop any large Government programme even if it is rooted in folly or falsity. His focus was on investment programmes by the nationalised industries - financial follies like the Concorde programme (we never sold a single Concorde, they had to be given away to BA and Air France) - and BT's System X programme to digitise the UK switching systems (it was a technical disaster, Ericsson ended up snatching the whole of BT's core trunk switching because the British stuff that had cost the taxpayers hundreds of millions simply could not work)

I think he argued that the problem is that such programmes often have unstoppable momentum - very little forward speed, but huge mass. Trying to stop them is like standing in front of a steamroller. It is making slow progress - but it will still crush you. And the little boy who pointed out that the Emperor Has No Clothes got a good smacking for his truthfulness.The programmes were usually backed by very large UK firms with their snout in the trough - GEC, British Aerospace etc.

My own experience as a civil servant at the time was that it was likely to damage or slow down one's career to criticise such programmes. Indeed I got slapped down on both Concorde and System X - and on the AGR nuclear programme. "You have no right to question the commitments to these important projects" - whereas I stupidly thought I was being paid to exercise some judgment, some analytical thinking. To listen to outside criticism, to try to run the numbers properly. For example Concorde was seriously forecast to achieve 150 worldwide sales, an obvious nonsense, but this was carved in stone, it was heresy to dispute the figures.

So it has been very encouraging to see David Henderson's involvement in pushing back against the economic nonsense in "climate change" programmes. And his essay on Ian Castle shows he still has acute skills - plus his abiding common-sense wisdom.

Nov 29, 2012 at 1:22 PM | Unregistered CommenterJohn Anderson

This whole virtuous essay should be 'required reading' by David Cameron; Ed Davey; Ed Milliband; every employee of the Department of Energy and Climate Change; and everyone asociated with news and current affairs in every branch of the media (oh - and the BBC)....

Nov 29, 2012 at 1:23 PM | Unregistered CommenterDavid

The Rules of Fight Club the IPCC:

1st rule: You do not question the IPCC
2nd rule: You DO NOT question the IPCC

Nov 29, 2012 at 2:09 PM | Unregistered Commenterredc

David, yes, it absolutely should be. But do you know what? It won't be. The tiny handful of those who do know about it will resolutely refuse to mention it. The remainder will remain blissfully unaware of it. John Anderson's excellent point about the near impossibility of stopping any large government project remains only too depressingly true.

Nov 29, 2012 at 2:11 PM | Unregistered CommenterAgouts

On the other hand a copy to Peter Lilley might be worthwhile.

Nov 29, 2012 at 2:18 PM | Registered CommenterMike Jackson

I'm an actual economist working in a commercial environment, as opposed to an academic environment. I have a copy of the SNA on my desk, along with industrial classification guidelines and other sundry light reading materials.

I cannot underscore how important the SNA really is for consistency and comparability, supporting the post above. Seriously, if you do not understand SNA it is impossible for you to make any statements whatsoever about economic impacts. Goodness: that would be something along the lines of using only tree ring samples that fit your story instead of them all.


The amount of sheer economic nonsense being propagated in connection to anthropogenic warming is directly in inverse proportion to the economic competence of those involved.

Nov 29, 2012 at 2:23 PM | Unregistered CommenterJohn F. Opie

Oh I'm too slow to realise that my 2 rephrased rules are basically the first 2 rules of Project Mayhem (also from Fight Club).

How fitting.

Nov 29, 2012 at 2:36 PM | Unregistered Commenterredc

The only message the polis understand is a good kicking in the ballot boxes. Their only drug is power. Cameron made a big mistake when he said his government would be the greenest ever. There are enough citizens who can equate 'greenest' to 'stupidest'. We have got to get the message out somehow or other that green policies are killing this country. When the electorate understand that then the polis will strive to be less stupid (attempting the impossible in jurisprudential terms).

Lawson Booker Dellers His most Gracious Bishopness Daily Mail and I am sure we can all think of others who can see the crass stupidity of current energy policy - all need to be galvanised with the same message - stop the stupidity before it kills the country.

Nov 29, 2012 at 2:37 PM | Unregistered CommenterDolphinhead

Well said John Opie. One assumes your career doesn't depend on toeing the alarmist agenda, which Chris Hope's obviously does.

Nov 29, 2012 at 2:40 PM | Unregistered CommenterPhillip Bratby

In response to Laurie Childs (1.14pm):

I do know the effect that different values for climate sensitivity have on the results of the PAGE09 model. I make a point of publishing that information; see, for instance, figure 7 in

If David Henderson can provide me with a different range for the climate sensitivity, and a reasoned case for it, I can quickly find out, for instance, the carbon price that his range would suggest.

Or, if he would rather do the work himself, I repeat the last sentence of the paper linked to above: Anyone interested in working with PAGE09 is invited to contact the author to obtain a copy of the model.


Nov 29, 2012 at 3:04 PM | Unregistered CommenterChris Hope

I remember Ian Castles posted at The Blackboard a few years back, arguing against an author's use of the averaging of SRES scenarios. I didn't understand what he was saying, but after putting the questions to the author of the paper, I could see that Castles was right and the author had made a mistake in judgment.

Nov 29, 2012 at 3:09 PM | Unregistered CommenterMikeN

>We argued that in consequence these growth projections for poor countries were biased upward; and we inferred from this – though here we were mistaken, which it took us some time to realise – that a corresponding upward bias had entered into the projections of emissions from those countries.[i]

This possibly takes away my argument that the IPCC is contradicting itself. Namely that they get high levels of damage assessments from high levels of warming, high levels of warming from high levels of emissions, high levels of emissions from high levels of economic growth in the developing world, but don't account for the high economic growth when they conclude high levels of damage.

Nov 29, 2012 at 3:11 PM | Unregistered CommenterMikeN

.... BT's System X programme to digitise the UK switching systems (it was a technical disaster, Ericsson ended up snatching the whole of BT's core trunk switching because the British stuff that had cost the taxpayers hundreds of millions simply could not work)

Nov 29, 2012 at 1:22 PM John Anderson

Yes. I remember at the time (I was not involved but I took an interest) someone at high level from either from BT or GEC say "We put 600 people to work on System X from day one" and I thought "this is going to be a disaster".

Don't forget the Nimrod fiasco that cost a lot both in money and lives. A lot of the Falklands causalties would not have been incurred had it been operational at the time promised. In the end, years later, it turned out that its Moving Target Indication system (to detect attacking aircraft) was jammed by slow moving road traffic when it was finally tried out over Scotland. It should have been cancelled years previously - it was clearly a project that was out of control - nobody in the entire project had a comprehensive understanding of its systems.

And my dad used to tell me about the Groundnuts Scheme which swallowed £millions in the 1940's but had no chance of success and should have been aborted at an early stage.

Part of the problem is that civil service career progess (from my view as an outsider) seems to depend on being able to move ahead faster than the problems you leave behind. Governments just are not good at doing things, partly for this reason.

Nov 29, 2012 at 3:22 PM | Registered CommenterMartin A

Surely Mr Hope, that a reasoned case against the IPCC's derivation of climate sensitivity exists, is more important than Henderson provide it for you?

Nov 29, 2012 at 3:27 PM | Registered Commentershub

What an informative article. It is astonishing to see that the same manipulation we find in the scientific elements of the IPCC are present in the economics too.

Now what really bothers me is that if two big beasts have been unable to breach the IPCC dyke what chance do we "little people" have? To see this huge behemoth sailing on by in the wrong direction, immune to all advice, is extremely worrying. What on Earth do the people at the top imagine they are really doing because it is impossible to think they are unaware of these crippling flaws in the edifice they have built.

Nov 29, 2012 at 4:08 PM | Unregistered CommenterCraig King

Craig King: The big beasts need the little people and vice versa. Although the phrase "every little helps" can be ridiculous - in the case of using a certain kind of lightbulb in the face of China building a new coal-fired power station, for example - I'm convinced that real people standing up for truth and justice always counts. The crippling flaws you identify mean the so-called consensus is vulnerable. One never knows which straw will break the camel's back. At the same time we owe David Henderson a massive debt. Sometimes we forget to say such things until it's too late.

Nov 29, 2012 at 4:28 PM | Registered CommenterRichard Drake

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