Forecasts by scientists versus scientific forecasts

One of the virtues of the Social Policy Bond approach is that we can insure against things that may or may not be happening. Take climate change: if the market believes the climate is not becoming more unstable, then Climate Stability Bonds targeting the current level of stability, would be valued at something close to their redemption value when floated. So the bonds' backers (most probably taxpayers) would lose very little. For this reason I'm in the happy position - intellectually - of not needing to have an opinion about what is happening to the world's climate. Climate Stability Bonds would be the most cost-efficient way of dealing with climate change whether we accept the scientific consensus or not. Correction: whether we accept the consensus of scientists or not. There is a difference, as the recent paper Global Warming: Forecasts by Scientists Versus Scientific Forecasts (pdf) by J Scott Armstrong and Kesten C Green makes clear:

The forecasts in the [Intergovernmental Panel on Climate Change’s Working Group One] Report [2007] were not the outcome of scientific procedures. In effect, they present the opinions of scientists transformed by mathematics and obscured by complex writing. We found no references to the primary sources of information on forecasting despite the fact these are easily available in books, articles, and websites. We conducted an audit of Chapter 8 of the Report. We found enough information to make judgments on 89 out of the total of 140 principles. The forecasting procedures that were used violated 72 principles. Many of the violations were, by themselves, critical. We have been unable to identify any scientific forecasts to support global warming. Claims that the Earth will get warmer have no more credence than saying that it will get colder. ...

Prior to conducting an audit, one might ask policy makers to say what information would be sufficient to change their opinions. People who are able to specify such evidence are often able to change their opinions. When we have used this question among academic researchers and students, we find that many of them are willing to specify such information. Disturbingly, however, many others are unable to even imagine that any information could possibly change their minds.

This paper could be seen as reassuring or threatening, depending on your viewpoint. Regardless, though, it is, as the authors say in the quote above, disturbing that basic scientific forecasting principles appear to have been violated. (See here for an article inspired by the paper.)
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