Climate Science Politics At Full Speed
Are governments working to protect the political consensus around climate change at the expense of truth?
By Theo Vermaelen, INSEAD Professor of Finance
The difference between science and religion is that science is supposed to make testable predictions. Simply showing that carbon emissions are correlated with global temperatures using historical data proves nothing. The stock market is also correlated with global temperatures (it went up a lot in the 20th century and then flattened out this century) but that does not mean that bringing down the stock market will reduce global warming (although I bet some people would love this idea). Also having a strong theory that the two variables should be correlated is not sufficient if the goal is to show that one variable iscompletely explained by the other. For example, every finance professor accepts that, ceteris paribus, when interest rates rise, stock prices should fall. But that does not mean that the stock market is only driven by interest rates.
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