John Salvatier,

Our good friend Bo Cowgill might have already re-created those prediction markets on Google’s internal prediction exchange at a marginal cost of zero US dollar. No need for him to “subsidize” external prediction markets.

[As an appendix, I precise that I am in favor of opening the enterprise prediction markets to external traders, for some questions.]

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Subsidizing prediction markets is an old Robin Hanson idea that carries quite a heavy price tag.

Conditional prediction markets is a great idea on the paper. Many people (e.g., Mike Linksvayer) like the idea. However, here is what the uncritical Robin Hanson fanboys blogging on Overcoming Whatever won’t tell you:

• The first problem is that nobody trades those things.

• The second problem is that subsidizing those conditional prediction markets costs an arm and a leg.

• The third problem is that no major news media outlet has ever quoted the prediction market prices / probabilities generated by those conditional prediction markets.

Peter McCluskey could have rent a French mistress (or a French gigolo) for a full year with all the money he is spending on Robin Hanson’s idea. Or vaccinated the whole African continent against Malaria. See Peter’s comment, at the middle of the webpage, here.

Philanthropy and prediction markets are not mixing well —yet.

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The information will probably end up saving lives, as we can more efficiently allocate finite resources to global warming research and reduction (vs. preventative healthcare, disease control, micro loans, etc.). For instance, we spend a lot of money on the AIDS pandemic in Africa, but polluted water and malaria each claim more victims. The investment allocations could be tweaked, quite a bit.

In today’s WSJ, Goddard Institute of Space Studies finds that:

The latest twist in the global warming saga is the revision in data at NASA’s Goddard Institute for Space Studies, indicating that the warmest year on record for the U.S. was not 1998, but rather 1934 (by 0.02 of a degree Celsius).

Canadian and amateur climate researcher Stephen McIntyre discovered that NASA made a technical error in standardizing the weather air temperature data post-2000. These temperature mistakes were only for the U.S.; their net effect was to lower the average temperature reading from 2000-2006 by 0.15C.

The new data undermine another frightful talking point from environmentalists, which is that six of the 10 hottest years on record have occurred since 1990. Wrong. NASA now says six of the 10 warmest years were in the 1930s and 1940s, and that was before the bulk of industrial CO2 emissions were released into the atmosphere.

Those are the new facts. What’s hard to know is how much, if any, significance to read into them. NASA officials say the revisions are insignificant and should not be “used by [global warming] critics to muddy the debate.” NASA scientist Gavin Schmidt notes that, despite the revisions, the period 2002-2006 is still warmer for the U.S. than 1930-1934, and both periods are slightly cooler than 1998-2002.

Still, environmentalists have been making great hay by claiming that recent years, such as 1998, then 2006, were the “warmest” on record. It’s also not clear that the 0.15 degree temperature revision is as trivial as NASA insists. Total U.S. warming since 1920 has been about 0.21 degrees Celsius. This means that a 0.15 error for recent years is more than two-thirds the observed temperature increase for the period of warming. NASA counters that most of the measured planetary warming in recent decades has occurred outside the U.S. and that the agency’s recent error would have a tiny impact (1/1000th of a degree) on global warming.

If nothing else, the snafu calls into question how much faith to put in climate change models. In the 1990s, virtually all climate models predicted warming from 2000-2010, but the new data confirm that so far there has been no warming trend in this decade for the U.S. Whoops. These simulation models are the basis for many of the forecasts of catastrophic warming by the end of the century that Al Gore and the media repeat time and again. We may soon be basing multi-trillion dollar policy decisions on computer models whose accuracy we already know to be less than stellar.

What’s more disturbing is what this incident tells us about the scientific double standard in the global warming debate. If this kind of error were made by climatologists who dare to challenge climate-change orthodoxy, the media and environmentalists would accuse them of manipulating data to distort scientific truth. NASA’s blunder only became a news story after Internet bloggers played whistleblower by circulating the new data across the Web.

Cross-posted from CavBet

Work Experience

President of World Bank: 2005-2007
Responsibilities: Reining in European lefties, raining tax-free money on Arab girlfriend, and giving anti-corruption efforts a bad name.
Achievements: Paralyzed the international lending apparatus to the point where small countries had to max out their Visa cards to pay for malaria medicine. Learned the traditions of many cultures, including those of Turkey, where you apparently are not supposed to take off your shoes at mosques to reveal socks so full of holes that both big toes poke blasphemously through.

Deputy Secretary of Defense for President George W. Bush: 2001-2005
Responsibility: Starting a war.
Achievements: Mismanaged the world’s most powerful army. Shattered the system of international diplomacy that kept the peace for 50 years. Undermined the credibility of American intelligence operations. Needlessly brought humankind to the brink of nuclear war. Destroyed Iraq.

Demented Visionary: 1993-2001
Responsibility: Concocting a delusional plan for regime change in Iraq with pals like Shaha Riza, Ahmad Chalabi and his merry band of Iraqi exiles who conjured up phony intelligence about Saddam’s W.M.D.
Achievements: Imagining an Iraq that didn’t exist.

Free, pirated version of the column here. THE SITE IS NOT SAFE FOR WORK.

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