RealClimate, a blog maintained by real climate scientists, is busy doing damage control. This story will no doubt rage for weeks, so I'm just going to pick one example of the back and forth before trying to take some time to go deeper, if merited.

Here's an e-mail that has gotten particular attention, with the supposedly damning language bolded:

Dear Ray, Mike and Malcolm,

Once Tim's got a diagram here we'll send that either later today or first thing tomorrow.

I've just completed Mike's Nature trick of adding in the real temps to each series for the last 20 years (ie from 1981 onwards) amd from 1961 for Keith's to hide the decline. Mike's series got the annual land and marine values while the other two got April-Sept for NH land N of 20N. The latter two are real for 1999, while the estimate for 1999 for NH combined is +0.44C wrt 61-90. The Global estimate for 1999 with data through Oct is +0.35C cf. 0.57 for 1998.

Thanks for the comments, Ray.

Cheers, Phil

Here's RealClimate's explanation:

The paper in question is the Mann, Bradley and Hughes (1998) Nature paper on the original multiproxy temperature reconstruction, and the "trick" is just to plot the instrumental records along with reconstruction so that the context of the recent warming is clear. Scientists often use the term "trick" to refer to a "a good way to deal with a problem", rather than something that is "secret", and so there is nothing problematic in this at all. As for the "decline," it is well known that Keith Briffa's maximum latewood tree ring density proxy diverges from the temperature records after 1960 (this is more commonly known as the "divergence problem" -- see e.g. the recent discussion in this paper) and has been discussed in the literature since Briffa et al in Nature in 1998 (Nature, 391, 678-682). Those authors have always recommend not using the post 1960 part of their reconstruction, and so while "hiding" is probably a poor choice of words (since it is "hidden" in plain sight), not using the data in the plot is completely appropriate, as is further research to understand why this happens.

So what's going on here? Put aside the question of whether the words "trick" or "hide" have nefarious or innocuous meanings. The scientific problem is that in attempting to reconstruct temperatures in the past, climate scientists are often faced with the problem that there were no humans standing around holding thermometers and writing down temperatures. So scientists use "proxies" -- tree rings, or ice cores, or fossilized clams, or lake pollen trapped in sediment. The "divergence problem" referred to above references a case where in one particular instance, tree ring variations in density did not match actual recorded temperatures after 1960.

That poses a conundrum, although not one that throws the entire science of multiproxy paleoclimate reconstruction into doubt.  More importantly, t the divergence problem, as RealClimate notes, is not a secret. It's exactly the kind of thing that climate scientists feast on. Such problems are discussed and debated every day by climate scientists (and every other kind of scientist.) The great thing about science is that the process of gathering  more data, improving models and theories is infinitely ongoing, and working out how to handle puzzlers like this, both in private e-mails and in the peer-reviewed literature, is what scientists live for.

Overall, the more data we have, the more clear it has become to the vast majority of scientists working in this field that the earth has gotten significantly hotter at an alarming rate in the last century, most likely due to increased concentrations of greenhouse gases in the atmosphere. And if there really is a smoking gun in the hacked e-mails that convicts scientists of fraudulent behavior or faking data, well, let's hear it. I'm not convinced by the above example. But if enough scientists are, that's a different matter.

In an opinion piece, also in the Journal, Michael Corkery approves of the basic principle:

This is how it is supposed to work. Rather than the federal government dictating what a company should pay its employees, shareholders are having their say.

Ever since Goldman Sachs' 1999 IPO, I've been wondering how the investment bank's big-money culture would square with the trope that a public company's first responsibility is to its shareholders. Up until now, Goldman's shareholders have accepted the basic bargain -- Goldman's stock returns far outpace the market. This success is supposedly attributable to Goldman having the smartest employees. And so the argument goes: If you don't pay the smartest employees an average of over $700,000 per person per year, they will skedaddle.

But it seems as if what looks to be "the biggest employee payout in the firm's 140-year history" is inciting some grumbling even among those who typically could not care less about outsize Wall Street compensation levels.

Corkery is skeptical that the big institutional investors will make good on the only threat they realistically have, which is to sell their stock. But there's an interesting subtext to the whole question of shareholder rights that is ironically highlighted by the Goldman dilemma.

Oftentimes, when we hear that a public company's first responsibility is to its shareholders, this is used as an excuse to shaft workers. What's the easiest way to cut costs and get a quick stock price boost? Lay off employees! It's one of the harshest truths of capitalism -- the people who do the actual work generally get the smallest piece of the pie and are most vulnerable to economic downshifts. The principle that shareholders should come first has propelled countless mergers and acquisitions with disastrous results for the employees of the companies that get sliced and diced in Wall Street's endless parlor games.

For Goldman critics, it might be satisfying to see big shareholders muttering grimly about the impropriety of massive bonuses. It also could be rewarding to see shareholders exert more force in restricting the runaway compensation of top executives, although I'm not going to hold my breath waiting for such "say-on-pay" ideals to ever become common practice. But I'd caution against seeing this episode of dissatisfaction as some great triumph of shareholder democracy over the lords of Wall Street. What the investors really want is more money for themselves -- a fat dividend payout, or higher earnings per share that would be reflected in a higher stock price.

And what that usually means is: Screw the worker. In this case, we're all OK with it, because these are Goldman employees, and everybody is mad at Goldman. But as a general rule, keeping stock prices high by keeping the clamps tightly down on workers is not ideal, from an egalitarian point of view.

Andrew,

I work for POET and your post was a nice surprise when I discovered it this morning. There are a few items that I'd like to respond to.

First, on the willingness of farmers to collect cobs. We are getting a good response from the farmers we've dealt with around our first plant in Emmetsburg. They are the ones we've laid out the complete case to: what we're paying (the $2.35 figure we released assumes $55 per ton), what the USDA adds through their Biomass Crop Assistance Program ($45 per ton) and the financial assistance we provide in purchasing equipment. When they see the equipment payback of less than two years and a nice profit per acre, they tend to embrace it.

Also, we are studying stover removal very carefully with Iowa State University. We need the land to be productive long-term for these facilities to be successful. After the first year of study, we've found that removing cobs and a small portion of husk and leaves does not adversely impact soil quality and there is no need to add additional fertilizer. This is a similar finding to many other studies on crop residue removal. We are continuing to study this with them.

Thanks again for the interest in our process. I invite you to stay tuned as we continue to improve it.

Schock also kindly provided a link to a POET press release discussing the preliminary results of Iowa State's research on the impacts of corn stover removal on soil fertility. From which I learned, inadvertently, that POET was funding the very same research I had linked to in my post yesterday.

I have no reason to doubt POET's forthrightness, and I take very seriously Robert Rapier's evaluation that "they have done a good job" on the cellulosic ethanol front. But I find it deliciously ironic that one of the top five results returned by Google for the search terms "corn stover removal soil fertility" turns out to be research paid for the company planning to do the removal.

Other studies have shown that "indiscriminate stover removal' does have a significant effect on soil fertility. Clearly, Schock is telling us that POET plans to be a discriminating stover remover. But when market forces comes into play without adequate government supervision, the line between discriminating and reckless abuse gets awful murky.

I think Ollie's got his history a little mixed up. If I recall, Republicans, following the advice of consultant Frank Luntz, as formulated in his famous 2002 memo, started using the words "climate change" instead of "global warming" because global warming was "too frightening."

From an account in the UK Guardian:

The phrase "global warming" should be abandoned in favor of "climate change", Mr Luntz says, and the party should describe its policies as "conservationist" instead of "environmentalist", because "most people" think environmentalists are "extremists" who indulge in "some pretty bizarre behavior... that turns off many voters".

I guess one example of that bizarre behavior was a little semiotic jujitsu, in which environmentalists embraced the climate change name switch, but tacked on catastrophic to get the original point across.

So the news that POET, the largest ethanol producer in the U.S., has managed to cut production costs for cellulosic ethanol from $4.13 a gallon to $2.35 a gallon in the past year at its trial plant in Scotland, South Dakota, is potentially significant. POET is now predicting big things, reports the Argus Leader:

"Two years ago, I would have told you this was a long shot," CEO Jeff Broin said. "Now I'll tell you that we will produce cellulosic ethanol commercially in two years."

Two years instead of five! That's a big improvement! According to Broin, the factors involved include "reducing energy use, enzyme costs, raw material requirements and capital expenses."

POET's preferred feedstock: left over corn cobs and other post-harvest remnants known as "corn stover" that farmers typically leave to rot on their fields. A few weeks ago, POET organized a "Project Liberty Field Day" in Emmetsburg, Ohio in which 16 different agricultural machinery companies demonstrated new equipment specifically designed for the collection of corn cobs.

I asked Robert Rapier, who has established himself as one of the more influential commentators on all-things-biofuels, what he thought of the news. The critical factor, he said, is knowing what the cost of the inputs are. How much will POET be paying for the corncobs?

"The key to this is going to be how much they have to pay for the biomass. The cost that is quoted assumes a certain price for the biomass. I had a farmer tell me recently that he wouldn't bother gathering it for the price POET wants to pay. So I would say that the costs mentioned in the news story are a best case scenario for getting the farmers to sell corn cobs at the right price."

But the question I always have when hearing about biofuels made from farm "waste" is what happens to soil fertility when you keep extracting more and more plant material from the life-cycle of the farm, and turn it into fuel? Not surprisingly, this is a hot topic among agricultural research scientists in Iowa.

From "Studying Stover Harvest Effects on Yield, Soil, Climate:"

Corn stover has been used for many years as bedding and food for livestock, as well as to nourish and protect soils. In recent years, the ubiquitous stalk, leaf and cob residue of corn plants left in fields after harvest has found a new market: as a potential source for cellulosic ethanol production.

But harvesting the stover -- which, when left in place, halts erosion and supplies vital nutrients back to the soil -- could have unintended consequences, from lowering the fertility of fields to affecting productivity, soil and water quality and even climate. A comprehensive new study by Iowa State University agronomy researchers may soon shed light on these questions.

One result of the study, according to the authors, will be better information on "the optimal nitrogen, phosphorus and potassium fertilization rates needed to supplement nutrients lost from residue removal."

That's not such great news. The production of synthetic fertilizer is highly energy-intensive and consumes a lot of fossil fuels. What's the good of replacing gasoline with cellulosic ethanol made from farm waste, if we need to burn more oil to replace the soil nutrients that we are subtracting from the earth?