Climate Prediction Markets
By Arnold Kling
The U.S. government should set up a prize fund totaling $400 million, payable in 2031. The prize fund would be open to any U.S. university with accredited science or engineering programs. The fund would be awarded as $200 million for first place, $100 million for second, $50 million for third, $25 million for fourth, $12 million for fifth, $6 million for sixth, $3 million for seventh…and $1 million until we run out of money.
Prizes would be awarded for most closely predicting the following parameters:
1) globally averaged surface temperature anomaly for 2029-2031, relative to 1990;
2) globally averaged lower tropospheric temperature anomaly for 2029-2031, relative to 1990;
3) Atlantic hurricane basin sea surface temperature anomaly for 2029-2031, relative to 1990;
4) average insured U.S. hurricane losses for 2029-2031
I see lots of problems with this approach. But I do think that the problem of coaxing climate science out of the cave of religion is worth thinking about. One idea would be a methodological audit conducted by statisticians, economists, and others who are outside the climate science field. Another idea would be a prediction market.
On the subject of prizes, the New York Times has an article on the use of prizes as an incentive for innovation, featuring quotes from Robin Hanson of overcoming bias. Thanks to Greg Mankiw for the pointer.