There is a lot of attention being paid to public bets about the future these days. For example, a climate scientist in Japan, James Annan, has bet two Russian solar physicists, Galina Mashnich and Vladimir Bashkirtsev, $10,000 that the earth will warm over the next decade, as measured by the U.S. NCDC over two different 6-year periods. At this point, such bets are little more than political stunts, but if they move us in the direction of actual futures markets on climate forecasts, then I’m all for it.

Just yesterday I read about a $5,000 bet between New York Times columnist John Tierney and energy industry consultant Matthew Simmons (described here) over whether or not the price of oil in 2010 would be over $200 in 2005 dollars. Tierney is taking Simmons to the cleaners. There is already a futures market for oil, and Simmons can get all the action he wants there at a price of $62.39 for Dec 2010. Anyone who thinks oil prices are going up dramatically can purchase futures and then make a killing if they are proven right. Tierney can simply hedge his side of the bet by, for example, buying $5,000 worth of 2010 futures at $62.39. If the price goes down by as much as 50% he is still in the black as he would win the bet. If the price if over $200 he comes out far ahead as he can pay the bet off from the proceeds of his gains. And the best case scenario for him is a price higher than $62.39 and less than $200, in which he collects on the investment and the bet. There are of course more complicated hedges that would involve a smaller outlay than $5000. From a financial perspective he can’t lose, which is obviously why he states that he will “consider bets from anyone else convinced that our way of life is “unsustainable.” If you think the price of oil or some other natural resource is going to soar, show me the money.” (As an aside, all of this raises some questions for me about the thinking behind Simmons’ analyses about economics and oil, but that is a subject for another time.)

With all of this excitement going on about betting, I’d like to get a piece of the action. I’d consider a bet along the lines of the following:


a) whether global concentrations of CO2 will be lower than 2005 values at any point over the next 30 years;

b) whether the rate of change in global CO2 concentrations will be negative (i.e., decreasing year over year) over any 3-year period over the next 30 years;

c) whether (b) will occur before atmospheric concentrations reach 400, 450, or 550 ppm.

I’m not no much interested in a bet per se, so mostly this is to see who out there is optimistic about the current approach to climate mitigation. Who out there thinks that the current policy trajectory will be effective from the standpoint of atmospheric concentrations? The three options above are set up to allow for various levels of optimism. Feel free to discuss in the comments. I’ll be happy to summarize in a week or so. Any takers?