Climate Deniers

When the economy is suffering, no one wants to hear about an impending environmental catastrophe.

See Daniel Altman on how Nouriel Roubini won the recession. 

Was it really just six years ago when a documentary about climate change -- Al Gore's An Inconvenient Truth -- could draw $24 million at the U.S. box office? That was back when the words "housing bubble" were just entering the average American's lexicon, back before the liquidation of Lehman Brothers, back when we would voluntarily fork over cash to sit in a dark room while a former vice president told us that we're all boiling ourselves to death.

There was, for a brief period then, a sort of optimism about what the United States could accomplish on climate change. President George W. Bush, already on his way out the door in April 2008, affirmed that human activity was causing global warming and vowed that the "ingenuity and enterprise of the American people" would help us overcome it. Barack Obama won the White House later that year with the promise that the next four years would be remembered as the time "when the rise of the oceans began to slow and our planet began to heal" (a pledge that became a punch line for his Republican challenger this time around).

Since then, the United States has failed to do anything significant about climate change. The issue has disappeared from the national radar, even as the scientific evidence has piled up. Political leaders no longer care about it, outside the occasional obligatory mention, in large part because voters don't either. Internationally, the situation isn't much better. Despite all the hype about the 2009 United Nations climate change conference in Copenhagen, there's still no binding international accord that sets emission limits for both the United States and China. And this past June, a conference held on the 20th anniversary of the Rio Earth Summit -- billed as a "once-in-a-generation chance" to set out a vision for a sustainable future -- was similarly disappointing, concluding with a flimsy political statement.

The lack of enthusiasm for all things environmental is pretty easy to explain: It's the recession, stupid. Yet climate change skeptics -- a camp that includes both the hired guns of the fossil-fuel industry and some true unbelievers -- like to claim they are winning the debate. (Remember "Climategate," the ginned-up scandal in which emails from scientists were stolen, edited, and spread around the Internet to make it seem like climate change is a giant hoax? Or the big 2010 "Snowmageddon" storm in Washington, D.C., when the family of the Senate's leading climate denier, Oklahoma's James Inhofe, built an igloo and labeled it "Al Gore's New Home"?)

There's no lack of science on the subject; the risks associated with pumping too much carbon into our atmosphere have only gotten clearer in the past six years. But the climate naysayers have been the beneficiaries of the dismal economy. Americans' interest in cutting emissions has sagged almost in lockstep with the rising unemployment rate. Who has time to worry about melting glaciers when the mortgage payment is late or the supervisor is shuffling pink slips? The deniers are pushing on an open door.

Gallup has asked Americans how much they "personally worry about global warming" nearly every year since 1989. In 2000, a high of 72 percent told Gallup they "personally worry about global warming." The figure stood at 66 percent by 2008 -- and then quickly plummeted again to 51 percent in 2011, before rising slightly to 55 percent this year. The figures parallel, with a slight lag, what U.S. GDP has done -- slumping around the 2001 dot-com bust, recovering, and then falling again after the 2008 financial crash.

It's not that people no longer think the climate is changing. It's that they just don't have the capacity to worry about it all that much. The percentage of Americans who acknowledge humans' impact on the climate has actually held pretty steady in the 50s over the same period.

In a paper published in May in the journal Global Environmental Change, University of Connecticut political scientist Lyle Scruggs laid out the case that the economy -- not Climategate, not Fox News -- explains the decline in concern over the issue. More than 30 years of survey data show that people's fears about the environment track more closely with the ups and downs of the economy than with any other trend.

Other countries have also cooled to warming as a top policy concern. Japan, Canada, and Russia have declined to extend the Kyoto Protocol. The eurocrisis has even pushed the issue to the back burner of the European Union, long the most dedicated champion of significant climate action. Scruggs found a similar decline in Europeans' concern about climate amid economic hardship. Meanwhile, Australia, which approved a carbon tax in 2011, abandoned a price floor for carbon in August amid concerns it would put the country at a competitive disadvantage with Europe.

That hasn't stopped deniers from dancing in the end zone. In May, the energy industry-funded Heartland Institute unveiled a billboard in Chicago featuring Unabomber Ted Kaczynski and the tag line, "I still believe in Global Warming. Do you?" The group promised more billboards featuring Fidel Castro, Osama bin Laden, and Charles Manson, but ended up pulling the Unabomber sign mere hours after it went up. Then, the website Climate Depot -- an all-purpose clearinghouse for denialists -- blasted a headline declaring that Gore's absence from this year's Democratic National Convention lineup "matches what has happened to issue of climate change itself." (Unfortunately, the short shrift climate change received at the convention did little to disprove the notion.)

So the deniers have benefited, if inadvertently, from the recession. They can stop fretting, for now, that the United States or other major governments might enact wide-ranging emissions caps. But ironically, the dismal economy, coupled with low natural gas prices, is also responsible for bringing U.S. carbon emissions down to a 20-year low this year, without any concerted policy effort to cut them. Scruggs predicts that Americans' concern for the environment "will likely rebound after labor market conditions improve, but not until then." Unfortunately, that should be right around the time emissions pick up again.

See Ben Wildavsky on how higher education won the recession. 



Nouriel Roubini

He may not be perfect, but there's never been a better time to be in the prophet of doom business.

See Slavoj Zizek on how capitalism won the recession. 

The Great Recession may have been the best thing ever to happen to Nouriel Roubini. Once a relatively obscure academic macroeconomist, he won fame as "Dr. Doom," the man who predicted, in 2006, just how and when the global financial system would collapse. So how have the last few years treated him? Business has been good -- very good. His forecasting record? Not quite.

Even before his prophetic prediction, Roubini had branched out from an economics professor's typical activities. In 2004, he transformed his personal website into a small research firm that became known for the "RGE Monitor," a high-end, subscriber-only collection of news and views about the global economy. These days, his name has become the bigger brand; the old RGE URL redirects to, where his self-described "ugly" face greets every visitor.

The mind behind that face is now the linchpin of an eight-figure business. "We started with five people in 2005, and now we employ almost 100," Roubini told me. "We started in New York, and now we have a big office in London and now also in New Delhi. We started with global macro, and now we've hired a bunch of strategists who derive the asset-pricing implications of our views."

And views are one commodity Roubini has in abundance. He's a fixture on the smarter late-night talk shows and even showed up on the big screen in Oliver Stone's Wall Street: Money Never Sleeps (with the apt credit "Economist on TV"). He has argued forcefully that the Federal Reserve should make more targeted purchases of securities -- which it finally started doing in September, to the tune of $40 billion per month -- and that consumers' debts, including mortgages and credit cards, need more restructuring to extend and reduce payments. So far, though, he thinks the Fed has done a better job addressing the downturn than counterparts such as the European Central Bank.

He's also sure that the downturn could have been much worse without a strong policy response from the major economies around the world. "The Great Recession could have turned into a Great Depression 2.0 if we had not adopted very aggressive monetary and fiscal easing," he told me. Indeed, as a quick review of his forecasts over the course of the recession shows, things have turned out quite a bit better than he expected.

In April 2009, Roubini predicted that the U.S. economy would shrink in the second half of the year and that it would manage to grow only 0.5 to 1 percent in 2010. Despite a lot of headwinds, the economy managed to expand through all six quarters at an average annual rate of about 2.5 percent. A few months later, he suggested that the unemployment rate would soon hit 10 percent and then peak at 11 percent in 2010. It did indeed hit 10 percent in October 2009 but has been lower in every month since.

So was Roubini wrong? He wouldn't go that far. "What I've been saying, and I think that has been correct, is that the recovery will be anemic and off-trend because there's a painful process of deleveraging," he said. "I think I got it much better than the consensus. Could things in the U.S. be even weaker? Yes, but not much weaker."

Roubini has also been fond of forecasting a "perfect storm" for the global economy; he used the phrase in August 2008 to reiterate his fears of a global financial crisis and recession. But he also saw a "perfect storm" on the horizon in 2009 because of rising oil prices, taxes, and government bond yields. The hurricane never materialized, but that hasn't stopped him from warning of another one next year -- this time because of America's fiscal cliff, the never-ending crisis in the eurozone, and a hard landing for China's overheated economy.

Of course, predictions don't have to be right to be effective. If Roubini's direst pronouncements don't turn into reality, he can probably claim some of the credit for having alerted leaders to potential problems. And when it comes to his long-term views about economic fluctuations, he's sticking to his guns.

For example, when the price of gold topped $1,200 an ounce in December 2009, Roubini said it looked "suspiciously like a bubble." This past September gold was trading at about $1,700 -- it peaked around $1,900 at the same time last year -- but he still thinks it's a risky bet. "Gold has no intrinsic value," he said. It would take "another Armageddon" to make it rise in value again, he added, and in that case investors would probably be better off buying "spam, guns, and ammunition."

He also continues to worry that the United States relies too much on foreign capital to finance government spending and private-sector investment. The country's imbalances in trade and capital flows have narrowed since their peak in 2006, but not enough for Roubini to rest easy. He still sees a risk, though perhaps a distant one, that foreign creditors will lose confidence in the dollar and "pull the plug."

These are weighty concerns for any economist, especially one with a brow as permanently furrowed as Roubini's, but they don't stop him from having a good time. "I love what I do, and for me it's not work," he said. "I get a lot out of what I do intellectually. These are the most interesting times that anyone involved in macro could think of -- maybe too interesting."

See Kate Sheppard on how climate deniers won the recession.