Shocked, Shocked to Find That Fraud is Going on in Here

Courtesy of ep at finem respice/reflection on consequences  

The Really Big News™ is actually that there is no really big news. Much is being made of the recent hack of the Hadley Climatic Research Center (the "CRU") whereby over a thousand emails along with documents as well as data and code were lifted and published to an FTP site before being linked to by "The Air Vent" blog and then… the world.

The leak appears to show climate scientists shaping results, strategizing on how best to conceal data and analysis from the public, planning public relations to get their message out irrespective of the most recent data setbacks, debating the best way to influence the "man on the street," discussing means to deal with critics via the press and otherwise, and reacting with barely contained glee to the news of an opponent’s untimely death. While the general consensus is that the most damaging emails appear to reference the now semi-famous "hockey graph" illustration that has been a favorite of the United Nations (and everyone else pushing radical climate change policy) for a decade, I think something much more insidious (and actually quite ordinary) emerges from between the many subject lines. Rank corruption.

Shock and surprise at the conduct of particular individuals within the CRU seem the order of the day. I’m not quite sure why. If, indeed, the disclosures are genuine (and it certainly appears on first blush that they are) how is it news that "scientists" embroiled in what long ago ceased to be scientific research and now amounts to a political campaign would cut corners, sabotage critics, conceal or even destroy data and analysis, massage results and graphics and otherwise act exactly like politicians, particularly where their careers, the body of their life’s work and their continuing income stream were at risk?

It isn’t of course. They are politicians.

The surprise should be that something like this wasn’t revealed earlier. (Well it was, but no one seems to count the glaring errors in Al Gore’s public presentation as relevant for some reason- polish always seems to trump precision).

Normally, I would point out that context can shape a lot with respect to snippets of emails (just ask the Bear Stearns prosecutors) but given the completeness of this body of data, that seems a rather thin fig leaf in this case. It is possible that the as yet unidentified leaker selectively modified this email or that to color the whole, but this sort of doctoring would be easily repudiated by either side of the conversations at issue simply by providing agreeing copies from their archives. At the very least, Steve McIntyre, author of the Climate Audit blog, which has long suspected shenanigans in the CRU, has confirmed the accuracy of emails he sent to CRU and contained in the release, implying either his involvement in an extensive and elaborate hoax involving the creation of megabytes of original content, or that the leaker actually had access to CRU’s email. Since CRU actually acknowledges the breach now, it really seems pointless to argue about authenticity.

I’ve been consistently skeptical of some of the more dramatic claims made by global warming proponents. I tend to believe in anthropomorphic climate change, but on a much smaller scale than requires much in the way of corrective action. My objections generally rest on four grounds:

The seductive nature of anthropomorphic conceit;
The highly politicized nature of the entire global warming subject;
The unstable nature of positive feedback models, and;
The abysmal failure of complex modeling of any kind to have predictive value beyond a very limited timeframe.

On Anthropomorphic Conceit

I find that almost every skeptical treatment of a theory that entails a significant amount of anthropomorphic agency in larger affairs (man as center of the universe, solar system, polar ice caps, economic conditions in a village of 2,000) yields outsized returns. This is to be expected. Which idea is more appealing? That the universe is a dark, cold, uncaring place barely aware of our existence out here on the edge of one of countless galaxies, that we are subject to random whim and catastrophe at any moment and that even the next sad and lonely space-faring race is at least four (and probably 400) year away from this obscure rock and its ordinary (and somewhat dim) sun, even traveling at near-c velocities? Or that we enjoy a larger agency over our destinies and existence and that our salvation is in our own hands? This bit of anthropomorphic conceit drives otherwise rational people quite mad. This makes betting against it incredibly accurate. I’ll come back to this.

Dealing with the appearance of wholesale chaos is actually quite easy if you are willing to cut a few corners:

1. Postulate a larger, controlling force.
2. Claim dominion over it.
3. Profit.

This is, of course, religion in a nutshell. The universe is not chaotic, only complex owing to the grandeur (and thus incomprehensibility- and unexplainability) of its deity creator. Oh, and by the way, you can make him do what you like if you just ask the right way and with the proper repetition and volume. I’ll show you how… for a nominal fee.

Nietzsche was wrong. God is not dead. We are all god now.1 If somehow climate change is primarily man-made, it must be primarily man-controlled and ergo can be man-prevented. How glorious for the species! And how convenient for a few wise experts who sounded the alarm- and just in time too.

It is not at all difficult to undertake the most basic armchair psychoanalysis on the likes of, say, Albert Arnold "Al" Gore, Jr. in this context. "Saved human race from catastrophic climate change" makes a much better tombstone (mausoleum?) than "Lost to Bush and once smashed an ashtray on Letterman," after all, and the lust for the former epitaph makes it easy to want to cut the mic when people, right or wrong, point out potential flaws in your sweeping vision for mankind’s future (and threaten your equity investment in supporting technologies).

One need only look at Gore these days, to identify an animal with very deep psychological wounds. (Hard to blame him. Losing to the likes of Bush II in the way he did would prompt any man to seek planetary dominion to compensate). It is perhaps only coincidence that the second derivative of his deterioration seems to be increasing in recent years, exactly as temperature data seems to be diverging from the climate catastrophe models that have become so central to his raison d’etre. Gore isn’t alone. Other luminaries have been quietly plotting to develop their sinister weather control machines for years. Think of the power!

The Politics of Science

If a good dose of anthropomorphic conceit is a significant warning, the mix of politics and science should be an eardrum rupturing klaxon. Science touts itself (with some reason) as the search for truth and the discipline of science is critical because the process of science, the scientific method is intensely hostile to human nature.

All one need do to understand that scientists are, indeed, subject to the same biases and herding mentality as the rest of the species is watch them in action on occasion. Phrases like "well settled science" are the always skeptical finem respice reader’s first hint that a given proposition is probably totally false. Science as discipline (not simply "a discipline") is critical. Our species enjoys (endures) a strong propensity towards herding, an aversion to contrariasm and a deep, limbic desire for acceptance and popularity. The scientific method and its wanton inclusion of criticism, contrary theory and open debate makes possible the dismissal of the old and the acceptance of the new despite these urges. (When used as directed. Your results may vary. See label for side effects.)

Politics, however, is not about the search for truth. It is about the building of consensus. It is easy to see how quickly politics becomes anathema to truth by considering the basic fact that in order to get elected to national office in the United States one must at some level convince a sizable portion of the population that, though you may never say it out loud, you really believe that god hates fags, or perhaps that ethanol subsidies are simply a splendid idea. So what exactly happens when data conflicts with politics? I think the CRU has just shown us.

Parsing through the released emails one finds a deeply hypocritical thread, proposing a public attack on climate skeptics (particularly Steve McIntyre) based on the fact that much of their work was not peer reviewed. This thread is woven directly in with back-and-forth discussion inside the CRU about how best to avoid disclosure of the CRUs data to McIntyre, or anyone else for that matter. Sauce for the goose….

One emailer seems to joke about how bad it would be if critics discovered that the United Kingdom has the equivalent of a U.S. Freedom of Information Act statute.2 There is also discussion about how best to avoid FOIA disclosures, or how one author would prefer to destroy (more) data than release it to McIntyre (or anyone else). All those exchanges, thankfully, appear moot now.

All this may not be as simply benign as "merely" scientific malfeasance. To the extent the CRU has accepted public or private funds based on this research (and it has), individuals who tampered with data or the like may face civil or even criminal liability for fraud. I’m less familiar with laws in the United Kingdom when it comes to fraud and charities (which the CRU effectively is), but it doesn’t seem particularly hard to me to formulate a civil cause of action for any of the many "academic funding councils, government departments, intergovernmental agencies, charitable foundations, non-governmental organisations, commerce and industry" donors that fund the organization,3 or even a criminal complaint involving mail and wire fraud. Such an action could easily be filed in Federal court in the United States by a U.S. based donor, or, in fact, a foreign donor with sufficient U.S. connection. This might include one of:

British Council, British Petroleum, Broom’s Barn Sugar Beet Research Centre, Central Electricity Generating Board, Centre for Environment, Fisheries and Aquaculture Science (CEFAS), Commercial Union, Commission of European Communities (CEC, often referred to now as EU), Council for the Central Laboratory of the Research Councils (CCLRC), Department of Energy, Department of the Environment (DETR, now DEFRA), Department of Health, Department of Trade and Industry (DTI), Eastern Electricity, Engineering and Physical Sciences Research Council (EPSRC), Environment Agency, Forestry Commission, Greenpeace International, International Institute of Environmental Development (IIED), Irish Electricity Supply Board, KFA Germany, Leverhulme Trust, Ministry of Agriculture, Fisheries and Food (MAFF), National Power, National Rivers Authority, Natural Environmental Research Council (NERC), Norwich Union, Nuclear Installations Inspectorate, Overseas Development Administration (ODA), Reinsurance Underwriters and Syndicates, Royal Society, Scientific Consultants, Science and Engineering Research Council (SERC), Scottish and Northern Ireland Forum for Environmental Research, Shell, Stockholm Environment Agency, Sultanate of Oman, Tate and Lyle, UK Met. Office, UK Nirex Ltd., United Nations Environment Plan (UNEP), United States Department of Energy, United States Environmental Protection Agency, Wolfson Foundation and the World Wildlife Fund for Nature (WWF).

Given that the Department of Energy and the United States Environmental Protection Agency are apparently donors, perhaps a clever U.S. Plaintiff could take advantage of the False Claims Act ("FCA") to recover a portion of three times the Government’s damages in Federal court. (One could get pretty creative figuring the damages here). The FCA covers:

…any person who—

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;

(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;4

CRU doesn’t help itself much here. You can see in its own words how the entire culture of the organization has become wrapped up in the "unprecedented" consistency of its funding sources, the number of its PhD and Master’s students and its own importance as measured by its popularity (rather than its scientific work):

Since its inception in 1972 until 1994, the only scientist who had a guaranteed salary from ENV/UEA funding was the Director. Every other research scientist relied on ‘soft money’ – grants and contracts – to continue his or her work. Since 1994, the situation has improved and now three of the senior staff are fully funded by ENV/UEA and two others have part of their salaries paid. The fact that CRU has and has had a number of long-standing research staff is testimony to the quality and relevance of our work. Such longevity in a research centre, dependent principally on soft money, in the UK university system is probably unprecedented. The number of CRU research staff as of the end of July 2007 is 15 (including those fully funded by ENV/UEA). (Emphasis added).

[…]

For the past 10 years, [the Master of Science in Climate Change] degree attracted between 6 and 10 students per year, but the last two academic years (2005/06 to 2006/07) have seen an upsurge to 22 students per year. This is a strong endorsement of the growing importance of the subject and of our reputation.5

They do love their expensive looking building and posting pictures of it in their website too. Maybe it is the trader in me, but sounds like this is becoming a pretty crowded thesis. I’m short.

It is also hard for me to imagine that the likes of Steve McIntyre lack a cause of action for libel against some of the individuals plotting his discrediting that would survive a motion to dismiss.

Pay attention when you hear scientists calling critics "frauds." That is a very unscientific thing to do. Pay even more attention when data "vanishes," is withheld or cannot be released to people without the proper "credentials" (it might be misinterpreted, you understand). Anyone who paid even the most casual attention to the public actions over at CRU would have seen this coming a mile away. (Take a bow, Mr. McIntyre).

On Positive Feedback

Name three positive feedback systems in nature. Get back to me on that when you’re done.

The Failure of Models

Why is it that the same people who assail financial modeling as the end of civilization as we know it find such faith in models that purport to predict the far more complex dynamic of the planet’s atmosphere out to half a decade or more? (How many state space representations exist for a model of the earth’s atmosphere with one second resolution for fifty years?) Of course we all know the answer to this question. Like finance, climate change has become a political question. Predictive modeling in finance is the number of the beast today because financiers and free markets in general have fallen out of vogue (I will spare you my theories here). Predictive models for climate change have seen the reverse precisely because they are, this week, supporting a "popular" cause. But this is largely irrelevant while a more dangerous trend lurks underneath: Solvency (or the lack thereof).

The recent push towards centrist control of everything from carbon emissions, to foreign currency pegs (we are looking at you, China), to foreign tax law, to insurance costs, to executive pay, to showerhead flows, to water expended per toilet flush seems to me a response to an increasing irrelevance and inability to control events economic and political on the part of governments of all sizes. Does it not strike one as ironic that the very administration that supposedly ushered in a new era of American docility and benevolence wants to lead the world in dictating the terms of economic growth and consumption for the rest of the planet? Military force at least had the virtue of being a rather naked exertion of power.

While it was feasible, deficit spending by state and national governments permitted a certain degree of price control over things like wages, hurricane insurance, and interest rates. At least, the kind of control necessary to validate the illusion of potency and wisdom conjured up by elected officials for an entranced and increasingly hypnotic electorate. (Regular finem respice readers will know that the "maturity mismatch" between term limits on legislators and the long-term economic effects of the cost control policies the enact on, say, the Florida insurance market, tend to cause big blow-ups). It is the kind of illusory control that permits, say, Barney Frank to gleefully set the price for trillions of dollars of mortgage lending far below its risk-adjusted equilibrium, effectively end-arounding the country’s monetary authorities in the process, and somehow be ushered into office again and again on the strength of pronouncements like: "The more people exaggerate these problems, the more pressure there is on [Fannie and Freddie], the less we will see in terms of affordable housing."6 (Apparently this sort of thing works well as Frank has been re-installed by wide margins since 1982). Frank’s problem is that he hung around too long. He might be quietly raking it in at some law firm now instead of (one hopes) becoming the focus of attention with respect to his deleterious mortgage lending and financial regulation policies.

In the United States, the top level of government, the Federal government, is finally experiencing what might even be described as a Keynesian corollary for governments local and otherwise which I, somewhat egotistically, now introduce:

"You cannot keep the market intentionally irrational forever and remain solvent."

While it seems the height of insanity to push massive programs of unprecedented size and spending at a time when the solvency of the republic itself is becoming an issue, it is entirely unsurprising from an institutional psychology perspective. Ever larger resources are required to maintain the disequilibrium of eternally low interest rates, credit-quality-agnostic mortgage lending, sub $3.00 per gallon gasoline, effectively free water in, say, Phoenix, $0.10 per kilowatt-hour electricity and 8% annual returns to equity in perpetuity to which the electorate has grown accustomed– and that, having become so acclimated, it will now continue to mercilessly demand from its leaders.

The country (world?) may eventually forgive leaders for not being able to control the weather as promised. I am not so certain absolution for failing to deliver continued economic prosperity will go over quite so well.

We should be no more surprised to learn that statistics from recovery.gov are increasingly looking like a total fabrication, or that the Fed won’t release stats than to find that "scientists" at CRU fiddled around with their results and tried to sweep uncooperative data under the rug.

Still, all this frightens me for two reasons:

1. Absent wholesale data manipulation, the government (somehow appointed as chief economic cheerleader in the last century) is now out of levers to pull and buttons to push.

2. I cannot think of a more dangerous animal than a wounded government with control over economic data, a large military, nuclear weapons and an unresolved inferiority complex.

When I first started to hear about pollution as a little girl I was afraid for the planet. Watching the simply sublime "Edge of Darkness" (soon to be poorly remade via Mel Gibson) reminded me that the planet will be here long after we’re gone. It doesn’t quite need saving.

The same sort of thought process has made me worry less about the fate of free markets. Free markets are a natural state. They will far outlast (and probably actually destroy) centralist governments. The only question is: Will we survive the death rattle of the CRU’s and the Barney Franks, elbowing anyone and everyone aside as they grasp desperately and frantically for any frayed root hanging from the cliffside even as they speed over the edge with their foot still on the gas?

1. 1. With apologies to Sir William Harcourt, from whose August 1887 comment on the Labourers’ Allotments Bill Newsweek shamelessly lifted the original phrase for its cover this last February.
2. 2. United Kingdom Freedom of Information Act of 2000, 2000 Chapter 36.
3. 3. "About the Climatic Research Unit," University of East Angilia, Undated.
4. 4. The Federal False Claims Act, 31 U.S.C. §§ 3729-3733 (2009).
5. 5. "About the Climatic Research Unit," University of East Angilia, Undated.
6. 6. "New Agency Proposed to Oversee Freddie Mac and Fannie Mae," The New York Times, September 11, 2003.