COVID-19 and the economy: Where do we go from here?

The COVID-19 story keeps developing. At first, everyone listened to epidemiologists telling us that a great deal of social distancing, and even the closing down of economies, would be helpful. After trying these things, we ended up with a huge number of people out of work and protests everywhere. We discovered the models that were provided were not very predictive. We are also finding that a V-shaped recovery is not possible.

Now, we need to figure out what actions to take next. How vigorously should we be fighting COVID-19? The story is more complex than most people understand. These are some of the issues I see:

[1] The share of COVID-19 cases that can be expected to end in death seems to be much lower than most people expect.

Most people assume that the ratios of deaths to cases by age group, computed using reported cases, such as those included in the Johns Hopkins Database, give a good indication of the chance of death a person faces if a person catches COVID-19. In fact, the cases reported to this database are far from representative of all cases; they tend to be the more severe cases. Cases with no symptoms, or only very slight symptoms, tend to be missed. The result is that ratios calculated directly from this database make people think their risk of death is far higher than it really is.

The US Center for Disease Control has published Planning Scenarios, based on information available on April 29, 2020.* Using this information, the CDC’s best estimate of the number of future deaths per 1000 cases with symptoms is as follows:

Ages 0 – 49    0.5 deaths per 1000 cases with symptoms

Ages 50-64    2.0 deaths per 1000 cases with symptoms

Ages 65+       13.0 deaths per 1000 cases with symptoms

The CDC’s best estimate is that 35% of cases have no symptoms at all. Thus, if we were to include these cases without symptoms in the chart above, the chart would become:

Ages 0-49   0.5 deaths per 1,538 cases (including those without symptoms), or 0.3 deaths per 1000 cases with or without symptoms

Ages 50-64  1.3 deaths per 1000 cases with or without symptoms

Ages 65+    8.5 deaths per 1000 cases with or without symptoms

A recent study of blood samples from 23 different parts of the world came to a similarly low estimate of the number of deaths per 1000 COVID-19 infections. It reported that among people who are less than 70 years old, the number of deaths per 1000 ranged from 0.0 to 2.3 per 1000, with a median of 0.4 deaths per 1000.

The same paper remarks,

COVID-19 seems to affect predominantly the frail, the disadvantaged, and the marginalized – as shown by high rates of infectious burden in nursing homes, homeless shelters, prisons, meat processing plants, and the strong racial/ethnic inequalities against minorities in terms of the cumulative death risk.

[2] There seem to be things we can do ourselves to reduce our personal chance of serious illness or death.

General good health is protective against getting a bad case of COVID-19. Thus, anything that we can do in terms of a good diet and exercise is likely helpful. Staying inside for weeks on end in the hope of preventing exposure to COVID-19 is probably not helpful.

Continued exposure to huge amounts of disinfectants and hand sanitizers is likely not to be helpful either. Our bodies depend on healthy microbiomes, and products such as these adversely affect our microbiomes. They kill good and bad bacteria alike and may leave harmful residues. It is easy to scale back our personal use of these products.

There are recent indications that vitamin D is likely to be protective in reducing both the incidence of COVID-19 and the disease’s severity. Web MD reports:

Several groups of researchers from different countries have found that the sickest patients often have the lowest levels of vitamin D, and that countries with higher death rates had larger numbers of people with vitamin D deficiency than countries with lower death rates.

Experts say healthy blood levels of vitamin D may give people with COVID-19 a survival advantage by helping them avoid cytokine storm, when the immune system overreacts and attacks your body’s own cells and tissues.

While we don’t know for certain that vitamin D is helpful, there is certainly enough circumstantial evidence to suggest that it would likely be worthwhile to raise vitamin D levels to the amount recommended by the National Institute of Health (30 nmol/L or higher). People with dark skin living in areas away from the equator might especially be helped by this strategy, since dark skin reduces vitamin D production.

Masks seem to be helpful in preventing the spread of infection. A person’s own immune system can handle some level of germs. If two people meeting together both wear masks, the combination of masks can perhaps reduce the level of germs to within the amount the immune system can handle. Our immune systems are built to handle a barrage of small attacks by viruses and bacteria. Continued “practice” with relatively low combinations of good and bad bacteria (as occur with masks) will tend to build up our bodies’ natural defenses.

We see dentists and dental hygienists wearing face shields. These shields are readily available over the internet and can be worn with a mask or by themselves. We don’t yet know precisely how much protection they provide, but early models suggest that they can be helpful in two directions: (a) preventing the wearer’s droplets from harming others and (b) reducing the droplet exposure from others. Thus, they may be a worthwhile way to reduce exposure to the virus causing COVID-19, even when others are not wearing masks.

[3] The medical community’s ability to treat COVID-19 cases keeps improving.

There seem to be many small changes that are improving treatment of COVID-19. If patients are having trouble getting enough oxygen, having them lie on their stomachs seems to increase their blood oxygen levels. The cost of this change is pretty much zero, but it keeps people out of the ICU longer.

Originally, planners thought that ventilators would be needed for patients with COVID-19, since ventilators are often used on pneumonia patients. Experience has shown, however, that oxygen plus something like a CPAP machine often works better and is less expensive.**

The simple change of not sending recuperating patients to nursing home-type facilities for the last stages of care has proven helpful, as well. Many of these patients can still infect others, leading to infections in long-term care facilities. Tests to tell whether patients are truly over the disease do not seem to be very accurate.

Last week, it was announced that treatment with an inexpensive common steroid could reduce deaths of people on ventilators by one-third. It could also reduce deaths of those requiring only oxygen treatment by 20%. Using this treatment should significantly reduce deaths, at little cost.

We can expect improvements in treatments to continue as doctors experiment with existing treatments, and as drug companies work on new solutions. Looking at cumulative historical mortality rates tends to overlook the huge learning curve that is taking place, allowing mortality rates to be lower.

[4] More doubts are being raised about quickly finding a vaccine that prevents COVID-19. 

The public would like to think that a vaccine solution is right around the corner. Vaccine promoters such as Anthony Fauci and Bill Gates would like to encourage this belief. Unfortunately, there are quite a few obstacles to getting a vaccine that actually works for any length of time:

(a) Antibodies for coronaviruses tend not to stay around for very long. A recent study suggests that even as soon as eight weeks, a significant share of COVID-19 patients (40% of those without symptoms; 12.9% of those with symptoms) had lost all immunity. A vaccine will likely face this same challenge.

(b) Vaccines may not work against mutations. Beijing is now fighting a new version of COVID-19 that seems to have been imported from Europe in food. Early indications are that people who caught the original Wuhan version of the COVID-19 virus will not be immune to the mutated version imported from Europe.

Vaccines that are currently under development use the Wuhan version of the virus. The catch is that the version of COVID-19 now circulating in the United States, Europe and perhaps elsewhere is mostly not the Wuhan type.

(c) There is a real concern that a vaccine against one version of COVID-19 will make a person’s response to a mutation of COVID-19 worse, rather than better. It has been known for many years that Dengue Fever has this characteristic; it is one of the reasons that there is no vaccine for Dengue Fever. The earlier SARS virus (which is closely related to the COVID-19 virus) has this same issue. Preliminary analysis suggests that the virus causing COVID-19 seems to have this characteristic, as well.

In sum, getting a vaccine that actually works against COVID-19 is likely to be a huge challenge. Instead of expecting a silver bullet in the form of a COVID-19 vaccine, we probably need to be looking for a lot of silver bee-bees that will hold down the impact of the illness. Hopefully, COVID-19 will someday disappear on its own, but we have no assurance of this outcome.

[5] The basic underlying issue that the world economy faces is overshoot, caused by too high a population relative to underlying resources.

When an economy is in overshoot, the big danger is collapse. The characteristics of overshoot leading to collapse include the following:

  • Very great wage disparity; too many people are very poor
  • Declining health, often due to poor nutrition, making people vulnerable to epidemics
  • Increasing use of debt, to make up for inadequate wages and profits
  • Falling commodity prices because too few people can afford these commodities and goods made from these commodities
  • Gluts of commodities, causing farmers to plow under crops and oil to be put into storage

Thus, pandemics are very much to be expected when an economy is in overshoot.

One example of collapse is that following the Black Death (1348-1350) epidemic in Europe. The collapse killed 60% of Europe’s population and dropped Britain’s population from close to 5 million to about 2 million.

Figure 1. Britain’s population, 1200 to 1700. Chart by Bloomberg using Federal Reserve of St. Louis data.

We might say that there was a U-shaped population recovery, which took about 300 years.

A later example that almost led to collapse was the period between 1914 and 1945. This was a period of shrinking international trade, indicating that something was truly wrong. On Figure 2 below, the WSJ calls its measure of international trade the “Trade Openness Index.” The period 1914-1945 is highlighted as being somewhat like today.

Figure 2. The Trade Openness Index is an index based on the average of world imports and exports, divided by world GDP. Chart by Wall Street Journal.

Many of the issues in the 1914-1945 timeframe were coal related. World War I took place when coal depletion became a problem in Britain. The issue at that time was wages that were too low for coal miners because the price of coal would not rise very high. Higher coal prices were needed to offset the impact of depletion, but high coal prices were not affordable by citizens.

The Pandemic of 1918-1919 killed far more people than either World War I or COVID-19.

World War II came about at the time coal depletion became a problem in Germany.

Figure 3. Figure by author describing peak coal timing compared to World War I and World War II.

The problem of inadequate energy resources finally ended when World War II ramped up demand through more debt and through more women entering the labor force for the first time. In response, the US began pumping oil out of the ground at a faster rate. Instead of depending on coal alone, the world began depending on a combination of oil and coal as energy resources. The ratio of population to energy resources was suddenly brought back into balance again, and collapse was averted!

[6] We are now in another period of overshoot of population relative to resources. The critical resource this time is oil. The alternatives we have aren’t suited to fulfilling our most basic need: the growing and transportation of food. They act as add-ons that are lost if oil is lost.

If we look back at Figure 2 above, it shows that since 2008, the world has again fallen into a period of shrinking imports and exports, which is a sign of “not enough energy resources to go around.” We are also experiencing many of the other characteristics of an overshoot economy that I mentioned in Section 5 above.

Figure 4 shows world energy consumption by type of energy through 2019, using recently published data by BP. The “Other” combination in Figure 4 includes nuclear, hydroelectric, wind, solar, and other smaller categories such as geothermal energy, wood pellets, and sawdust burned for fuel.

Figure 4. World energy consumption by fuel, based on BP’s 2020 Statistical Review of World Energy.

Oil has been rising at a steady pace; coal consumption has been close to level since about 2012. Natural gas and “Other” seem to be rising a little faster in the most recent few years.

If we divide by world population, the trend in world energy consumption per capita by type is as follows:

Figure 5. World Per Capita Energy Consumption based on BP’s 2020 Statistical Review of World Energy

Many people would like to think that the various energy sources are substitutable, but this is not really the case, as we approach limits of a finite world.

One catch is that there are very few stand-alone energy resources. Most energy resources only work within a framework provided by other energy sources. Wood that is picked up from the forest floor can work as a stand-alone energy source. Wind can almost be used as a stand-alone energy source, if it is used to power a simple sail boat or a wooden windmill. Water can almost be used as a stand-alone energy source, if it can be made to turn a wooden water wheel.

Coal, when its use was ramped up, enabled the production of both concrete and steel. It allowed modern hydroelectric dams to be built. It allowed steam engines to operate. It truly could be used as a stand-alone energy source. The main obstacle to the extraction of coal was keeping the cost of extraction low enough, so that, even with transportation, buyers could afford to purchase the coal.

Oil, similarly, can be a stand-alone energy solution because it is very flexible, dense, and easily transported. Or it can be paired with other types of less-expensive energy, to make it go further. We can see our dependence on oil by how level energy consumption per capita is in Figure 5 since the early 1980s. Growth in population seems to depend upon the amount of oil available.

As I have mentioned in previous posts, the economy is a self-organizing system. If there isn’t enough of the energy products upon which the economy primarily depends, the system tends to change in very strange ways. Countries become more quarrelsome. People decide to have fewer children or they become more susceptible to pandemics, bringing population more in line with energy resources.

The problem with natural gas and with the electricity products that I have lumped together as “Other” is that they are not really stand-alone products. They cannot grow food or build roads. They cannot power international jets. They cannot build wind turbines or solar panels. They cannot put natural gas pipelines in place. They can only exist in a complex environment which includes oil and perhaps coal (or other cheaper energy products).

We are kidding ourselves if we think we can transition to modern fuels that are low in carbon emissions. Without high prices, oil and coal that are in the ground will tend to stay in the ground permanently. This is the serious obstacle that we are up against. Without oil and coal, natural gas and electricity products will quickly become unusable.

[7] A major problem with COVID-19 related shutdowns is the fact that they lead to very low commodity prices, including oil prices. 

Figure 6. Inflation-adjusted monthly average oil prices through May 2020. Amounts are Brent Spot Oil Prices, as published by the EIA. Inflation adjustment is made using the CPI-Urban Index.

Oil is the primary type of energy used in growing and transporting food. It is used in many essential processes, including in the production of electricity. If its production is to continue, its price must be both high enough for oil producers and low enough for consumers.

The problem that we have been encountering since 2008 (the start of the latest cutback in trade in Figure 2) is that oil prices have been falling too low for producers. Now, in 2020, oil production is beginning to fall. This is happening because producing companies cannot afford to extract oil at current prices; governments of oil exporting countries cannot collect enough taxes at current prices. They hope that by reducing oil supply, prices will rise again.

If extraordinarily low oil prices persist, a calamity similar to the one that “Peak Oilers” have worried about will certainly occur: Oil supply will begin dropping. In fact, the drop will likely be much more rapid than most Peak Oilers have imagined, because the drop will be caused by low prices, rather than the high prices that they imagined would occur.

Amounts which are today shown as “proven reserves” can be expected to disappear because they will not be economic to extract. Governments of oil exporting countries seem likely to be overthrown because tax revenue from oil is their major source of revenue for programs such as food subsidies and jobs programs. When this disappears, governments of oil exporters are forced to cut back, lowering the standard of living of their citizens.

[8] What our strategy should be from now on is not entirely clear.

Of course, one path is straight into collapse, as happened after the Black Death of 1348-1352 (Figure 1). In fact, the carrying capacity of Britain might still be about 2 million. Its current population is about 68 million, so this would represent a population reduction of about 97%.

Other countries would experience substantial population reductions as well. The population decline would reflect many causes of death besides direct deaths from COVID-19; they would reflect the impacts of collapsing governments, inadequate food supply, polluted water supplies, and untreated diseases of many kinds.

If a large share of the population stays hidden in their homes trying to avoid COVID, it seems to me that we are most certainly heading straight into collapse. Supply lines for many kinds of goods and services will be broken. Oil prices and food prices will stay very low. Farmers will plow under crops, trying to raise prices. Gluts of oil will continue to be a problem.

If we try to transition to renewables, this leads directly to collapse as well, as far as I can see. They are not robust enough to stand on their own. Prices of oil and other commodities will fall too low and gluts will occur. Renewables will only last as long as (a) the overall systems can be kept in good repair and (b) governments can support continued subsidies.

The only approach that seems to keep the system going a little longer would seem to be to try to muddle along, despite COVID-19. Open up economies, even if the number of COVID-19 cases is higher and keeps rising. Tell people about the approaches they can use to limit their exposure to the virus, and how they can make their immune systems stronger. Get people started raising their vitamin D levels, so that they perhaps have a better chance of fighting the disease if they get COVID-19.

With this approach, we keep as many people working for as long as possible. Life will go on as close to normal, for as long as it can. We can perhaps put off collapse for a bit longer. We don’t have a lot of options open to us, but this one seems to be the best of a lot of poor options.


*The CDC estimates are estimates of future deaths per 1000 cases. Thus, they probably reflect the learning curve that has already taken place. It is unlikely that they reflect the benefit of the new steroid treatment mentioned in Section 3, because this finding occurred after April 29.

**I have been told that disease spread can be a problem when using CPAP machines, however. Using ventilators at very low pressure settings seems also to be a solution.




This entry was posted in Financial Implications and tagged , , , , , by Gail Tverberg. Bookmark the permalink.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.

2,824 thoughts on “COVID-19 and the economy: Where do we go from here?

  1. Get with the Program….BAU rolls on and constantly needs feeding…Got it!🤑
    RIO DE JANEIRO (AP) — Brazil’s government on Monday fired an official at the national space agency Inpe whose department is responsible for satellite monitoring of the Amazon rainforest, just three days after the release of June deforestation data reflected a continued increase in degradation.
    Lubia Vinhas was the general-coordinator of Brazilian space agency Inpe’s Earth Observation Institute, which is an umbrella for divisions that monitor the Amazon and panels to debate climate change with civil society organizations.
    It’s unclear whether the removal of Vinhas from her position was connected to the data. Her subordinate who heads the division directly overseeing satellite monitoring of Amazon deforestation remains employed. Inpe said in a statement posted to its website Monday night that the change was part of a shake-up at the agency to improve synergies.
    Still, the timing of the dismissal — coming on the heels of June data — drew an outcry from environmentalists who claim it may be an echo of a high-profile firing at the same agency last year. President Jair Bolsonaro is a critic of environmentalists and defends fostering more economic development in the Amazon, which many adversaries see as a nod to illegal miners and loggers.
    Vinhas was picked in 2018 for a four-year but Science and Technology Minister Marcos Pontes decided to remove her after 2 years and 3 months on the job. Inpe said in its statement that Vinhas’ former department will be merged with others, and she will oversee implementation of a new georeferencing database.
    Inpe figures published on Friday showed 400 square miles (1,034 square kilometers) of deforestation in the Amazon in June, a new record the month since data started being gathered in 2015.
    Total deforestation in the Brazilian Amazon from January to June was 1,890 square miles (3,069 square kilometers), up 25% from the same six-month period last year

    Yes, you are the BAD GIRL…telling the truth….no ….LIE

    • Think of all the green energy credits that have gone into supposedly saving forests. They do absolutely no good, as far as I can tell. Forests in low income countries continue to shrink, while forested areas in high income countries grow a bit. Overall, the trend is toward more deforestation.

      • It all boils down to this…too many people😎 wanting a piece of CAKE

        Paul McCarthy and WINGS

  2. “Group of Seven finance ministers on Monday called for full implementation of a G20 freeze in debt service payments by all official bilateral creditors, amid growing pressure on China’s state-owned banks and enterprises to join the relief effort.

    “…the G7 ministers underscored the need for greater transparency about lending, a U.S. Treasury spokesperson said, an apparent reference to confidentiality clauses included in many Chinese loans to developing countries in Africa and elsewhere.”

    • This article references an earlier Oil Price article from June 25: Natural Gas Drops to 25-Year Low as Demand Disintegrates.

      This is, of course, the same problem that oil producers are encountering. In fact, coal producers are as well. Wholesale electricity prices are down as well. This drives all of these producers out of business. The linked article ends:

      To offset coronavirus demand loss – extreme heat in the US Lower 48 is needed this summer- if that doesn’t happen – NatGas prices will continue moving lower.

      • They may get lucky there as the weather looks pretty toasty, at least in the south/southwest

        “The official weather observing station in Death Valley, California — called Furnace Creek for obvious reasons — reached a scorching 128 degrees Fahrenheit on Sunday.

        “That is the hottest temperature anywhere on the planet since 2017 and only one degree behind what experts say is likely the hottest temperature ever recorded on Earth.”

  3. Wear your Mask and all will get back to normal
    U.S. economic growth is slowing down, Dallas Fed’s Kaplan says
    Published: July 13, 2020 at 1:50 p.m. ET
    By Greg Robb
    The U.S. economy is slowing down after a burst of activity in May, said Dallas Fed President Robert Kaplan on Monday. “The economy did bottom in April, we started to grow again toward the end of April and certainly into May,” Kaplan said, in a talk at the National Press Club. There was even a brief spell of “double-digit” growth that lasted until the second week of June, he said, but now growth is slowing down. Part of this is due to the resurgence of COVID-19, which is “muting growth,” Kaplan said. He stressed that the public should wear masks, saying it “is the most important thing that can be done to make sure the rebound is faster, not slower.” Kaplan is a voting member of the Fed’s interest-rate committee this year.

    The MOST important thing is to wear your mask!

    Oh, Pardon, everyone wears a mask

  4. Looking around and came across a workhouse medal on eBay during the Victoria era.
    Got me thinking, looks as if we may soon be opening up again those places for displaced,
    unfortunate wretched souls….
    Why were workhouses feared by the poor and old?
    The government, terrified of encouraging ‘idlers’ (lazy people), made sure that people feared the workhouse and would do anything to keep out of it.
    How did they do that?
    What were workhouses like?
    Women, children and men had different living and working areas in the workhouse, so families were split up. To make things even worse they could be punished if they even tried to speak to one another!
    The education the children received did not include the two most important skills of all, reading and writing, which were needed to get a good job.
    The poor were made to wear a uniform. This meant that everyone looked the same and everyone outside knew they were poor and lived in the workhouse.
    Upon entering the workhouse, the poor were stripped and bathed (under supervision).
    The food was tasteless and was the same day after day.
    The young and old as well as men and women were made to work hard, often doing unpleasant jobs.
    Children could also find themselves ‘hired out’ (sold) to work in factories or mines.
    Glad we don’t treat people like that in Modern times here…..oops, sorry my bad

    This channel on YouTube chronicles them by a gentleman that travels throughout the world in short interviews…heartbreaking stories
    Invisible People is his channel there

    • I believe that the families were allowed to meet up, briefly, once a week. What they were fed was called gruel and was as bad as it sounds. Kept them going, not a lot more. There were about 800 workhouses in the UK. Many families preferred homelessness and starvation together, rather than the workhouse.

  5. From Zerohedge:

    Asian, European Countries Roll Back Economic Reopenings As COVID-19 Makes Global Comeback: Live Updates

    India places Bangalore back on lockdown
    US daily cases below 60k
    Global daily cases below 200k
    Hong Kong imposes new restrictions
    France makes mask wearing mandatory in public
    Australia cases top 10k.
    Iran closes mosques, schools
    WHO warns: “there will be no return to normal”

    Graph shows that world deaths continue to increase in linear fashion.

    • And, predictably, the economic knock-on effects are not good, eg:

      “Victorians [Australia] have slashed spending again as stage-three COVID restrictions have been reimposed in parts of the state…

      “The health crisis in Victoria may be dampening household sentiment in the rest of Australia too, because household spending growth has also eased in every other jurisdiction in the last week, except the Northern Territory.”

    • “US daily cases below 60k
      Global daily cases below 200k”

      this is good.

      especially since these lower numbers are happening even with expanded testing.

  6. Apparently 8 million+ acres (3,237,000M hectares = about 32,000 sq kms) of farmland in China now flooded. I have no idea how bad this is, but does not look good.
    Yesterday China ordered the evacuation of a whole city on the lower reaches of the Yangtze River. I think most of the cities on the Yangtze are now experiencing flooding to some degree.

    • Seven hours ago:
      Chinese media speculate government will give up Three Gorges Dam

      Chinese media were hinting that the Three Gorges Dam has already done its best against the torrential rain and the flooding, suggesting the Chinese government was preparing to give up, reports said Tuesday (July 14).

      A report by website NetEase called on the public to stop criticizing the situation at the dam, which is supposedly the world’s biggest engineering project, as it had already done its utmost in the battle against the floods. Reactions questioned the report, wondering whether it was preparing readers to accept that the authorities were about to give up the fight and “sentence the dam to the death penalty,” New Talk reported.

      Another report says 38 million people have been evacuated:

      • I wonder what “giving the dam the death penalty” would actually mean in reality. Are they suggesting that they just would let it fail under duress?! Or perhaps just demolish it when flood season is over?

        Taiwan News obviously has an anti-CCP agenda but from what I can gather there are some legitimate concerns over the dam’s structural integrity.

        • Taiwan News is not a major news source, even in Taiwan. I think it is more of a news aggregator. Taipei Times is the only real English daily, and it’s not a great paper either–it’s rather slim, and most of its news comes from the wire services, plus some translated stories and editorials from the Chinese papers which are co-owned by the same group. The prospect of the Three Gorges dam busting has been mooted recently, mostly on the internet. (There was a whistleblower type figure who predicted this, but that was a month ago.) I would love to see it happen–that would tend to scuttle any Chinese invasion plans for awhile–but am not getting my hopes up. Bird’s-eye photos show that one of the dams is kind of warped, compared to when it was built, which is interesting. You’d think the engineering for these things would be pretty standard, but the whistleblower alleged corruption in the building process (this I can readily believe), and the region gets flooded every year (which is one of the reasons they built all these dams in the first place); if more water would cause problems, it’s just a matter of time before they’ll have that much water.

            • I’m thinking of all the poor souls–like me!–who might get invaded, if the Chinese *don’t* get soaked. (Or suffer various other internal problems that occupy their government’s attention.)

          • Building dams has always been a high risk way to deal with flooding. If the dam works, it still requires a large amount of maintenance and management. If it fails, the flooding that would have been caused by four months of rainfall occurs in 48 hours. You do the math. Or watch the gripping (and accurate) simulation towards the end of “The Dam Busters”.

        • There are many videos on YouTube going back 12 years that provide pretty convincing evidence that the Three Gorges damn was built to very poor quality.

          There are also many YT videos showing that building standards in China are appalling. The second highest building in the world is the Shanghai Tower, and over the weekend it was reported that leaks in the building stretched from the 60 th floor to the 9 th floor:

          In China’s Tallest Skyscraper, Water Leaks from 60th Floor to 9th Floor

  7. I found this article on judith currys blog and it’s worth quoting what it says about climate models:
    «Complex physical settings often result in stochastic models simply because it is not feasible—experimentally, mathematically, or computationally—to model the full system. The effects of the latent (left-out) variables result in random model behavior because their behavior affects the model but is not incorporated into the model.

    Consider climate modeling. The climate is always changing. The scientific question is whether climate change can be predicted. Climate models can at best capture a part of the behavior of the physical system, and therefore are necessarily stochastic…
    In a 2007 paper published in the Philosophical Transactions of the Royal Society, climate scientists Claudia Tebaldi and Reto Knutti state the fundamental problem:

    The predictive skill of a model is usually measured by comparing the predicted outcome with the observed one. Note that any forecast produced in the form of a confidence interval, or as a probability distribution, cannot be verified or disproved by a single observation or realization since there is always a non-zero probability for a single realization to be within or outside the forecast range just by chance. Skill and reliability are assessed by repeatedly comparing many independent realizations of the true system with the model predictions through some metric that quantifies agreement between model forecasts and observations (e.g. rank histograms). For projections of future climate change over decades and longer, there is no verification period, and in a strict sense there will never be any, even if we wait for a century. The reason is that the emission scenario assumed as a boundary condition is very likely not followed in detail, so the observations from the single climate realizations will never be fully compatible with the boundary conditions and scenario assumptions made by the models. And even if the scenario were to be followed, waiting decades for a single verification dataset is clearly not an effective verification strategy. This might sound obvious, but it is important to note that climate projections, decades or longer in the future by definition, cannot be validated directly through observed changes. Our confidence in climate models must therefore come from other sources..
    The last sentence opens a window on our dilemma: we would like to use conceptually appealing models lacking scientific validity, but this is a high-risk game. Think of the days when the earth was believed to be at the center of the solar system. Ptolemy’s heliocentric theory fit the data of his day quite well, and it certainly seemed plausible to human beings looking up at the sky.

    Tebaldi and Knutti give ample warning in the case of climate models:

    Most models agree reasonably well with observations of the present-day mean climate and simulate a realistic warming over the twentieth century (of course, the specific performance de-pends on each model/metric combination), yet their predictions diverge substantially for the twenty-first century, even when forced with the same boundary conditions.11

    Arguments about whether or not a prediction made thirty years ago validates or invalidates a model are meaningless. Models are stochastic and predictions take the form of probability distributions. Single predictions lack scientific meaning. This is the import of Tebaldi and Knutti’s comment that “any forecast produced in the form of a confidence interval, or as a probability distribution, cannot be verified or disproved by a single observation or realization.” Here we are at the nub of the problem: the meaning of a scientific theory lies in the process of its validation, because this is what connects the mental construct to the physical world. It is fallacious to reject or accept a climate model based on a single-trajectory prediction.

    There can be no doubt that climate change is an issue of vital importance to humanity. Yet rather than soberly confront the issue in the context of scientific limitations, there is nothing but childish invective. How many politicians appreciate the epistemological conundrum? How many have advisers who understand?«

    • Climate models seem to use similar reasoning to economic models: whatever happened in the past will happen in the future. The idea that the world is finite and has limits never occurred to modelers.

      As a result economy models show that the economy will grow endlessly. Climate models are based on the assumption that fossil fuel energy resources will be extracted in ever-increasing quantity, even though this would mean that a great deal of very deep coal would need to be extracted, including some under the North Sea. There is faith that somehow, prices will rise to allow all of this extraction.

      This same faulty reasoning about ever-rising prices leads politicians and others to believe that intermittent renewables can be used to solve our problems.

      • « Climate models are based on the assumption that fossil fuel energy resources will be extracted in ever-increasing quantity, even though this would mean that a great deal of very deep coal would need to be extracted, including some under the North Sea.» Is this actually considered in some of IPCC models?
        Coal from under the North Sea?

        • The only way it would be possible to get enough coal is to take coal from under the North Sea and other equally unlikely sources.

          The way I understood what happened with the IPCC models is the IPCC asked the International Energy Agency (IEA) for its estimates of future fossil fuel production. The IEA (which is an arm of OPEC) came up with absurdly high estimates of future fossil fuel production–far higher than any estimates of current reserves, for example. The climate modelers had no common sense about what might be extracted, so have gone with those absurd numbers. People at The Oil Drum were outraged at the absurdity of the situation.

          Climate people of course know nothing about fossil fuel extraction, except the standard false belief: “Prices will always go up, so we can get every bit out.”

          I am told that the fossil fuel estimates are not really part of the model, in a sense, so we cannot say the model is wrong. It is the inputs that are wrong. Whatever is wrong, the output doesn’t make sense.

          • Thanks, Gail, do you have a reference to someone who has written more in depth on this matter? I think you had a reference to an article some time back, but i can’t find it anymore.

            • There was quite a bit of interest in this issue back in my Oil Drum days.

              At least some of those at wanted to use calculations based amounts peak oilers thought could actually be extracted, rather than IPCC assumptions. I would argue that even these “peak oil,” “peak coal,” and “peak natural gas” amounts were still too high, because they assumed that prices would not fall, so whatever reserves existed could actually be extracted. For coal, in particular, there was a huge disagreement as to how much could be extracted.

              IEA WEO 2008 – Fossil Fuel Ultimates and CO2 Emissions Scenarios
              Based on this forecast of future fossil fuels per capita:

              From this post:

              Given that population would be expected to keep rising (Oil Drum authors assumed population rise based on UN forecasts), these were very generous lower assumptions to use instead of the IPCC estimates, in my opinion. Even at this, the model by Oil Drum authors using the climate model at that time produced a rise in temperature of less than 2 degrees celsius.

              It is my understanding that the IPCC has somewhat changed its model now, to partially incorporate the “Peak Fossil Fuel” model in the lowest of its estimates. The IPCC rarely talks about the lowest of its estimates. Also, using the Peak Fossil Fuel estimates is still far too high, I expect.

              One of the primary coal researchers involved in this discussion was David Rutledge, a Professor at Caltech. He was not on The Oil Drum staff, but he posted two posts there. He also spoke at ASPO conferences. These are links his Oil Drum posts. I believe he has academic writings as well.

              The Coal Question and Climate Change June 25, 2007
              The Coal Question, Revisited December 15, 2010

              Another researcher I associate with the coal question is Mikael Höök of Uppsala University in Sweden. His biography lists the following reports:

              Coal and Peat: Global resources and future supply (2012)

              Fuelling Future Emissions: Examining Fossil Fuel Production Outlooks Used in Climate Models -2011

              Future coal production outlooks in the IPCC Emission Scenarios: Are they plausible? 2011

    • “Ptolemy’s heliocentric theory fit the data of his day quite well” Ptolemy’s theory was, of course, geocentric, and it did not fit the data very well. In particular, it could not accurately model the motions of the “Dolphin Stars” (Mercury and Venus”) that Hipparkhos of Nicaea had modelled better centuries earlier by hypothesising (correctly) that they revolved around the sun. It could also not model the motions of the Moon, as Hypatia of Alexandria duly noted.

      People who want to quote real science to add a lustre of plausibility to their pseudo science should at least try to get it right.

      • Hypatia of Alexandria came to a nasty end at the hands of mob of very nasty people who’s dogma was threatened by her version of real science.

        In our own age, I think Judith Curry has been subject to similar treatment by the mob, although so far Judith has at least been spared physical torture.

        • Thank you, Tim. Egypt was the home to three of the greatest women in history, perhaps because for five thousand years her society was matrilineal. The other two were of course Hatshepsut (“she foremost of noble ladies”) and Cleopatra VII Philopater.

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