First, a bit of a primer. Wikipedia describes a random walk is a mathematical formalisation of a trajectory that consists of taking successive random steps. For example, the path traced by a molecule as it travels in a liquid or a gas, the search path of a foraging animal, the price of a fluctuating stock and the financial status of a gambler can all be modeled as random walks. The term random walk was first introduced by Karl Pearson in 1905.
Example of eight random walks in one dimension starting at 0. The plot shows the current position on the line (vertical axis) versus the time steps (horizontal axis). Source: Wikipedia
From the Financial Post: A 2011 study in the Journal of Forecasting took the same data set and compared model predictions against a “random walk” alternative, consisting simply of using the last period’s value in each location as the forecast for the next period’s value in that location.
The test measures the sum of errors relative to the random walk. A perfect model gets a score of zero, meaning it made no errors. A model that does no better than a random walk gets a score of 1. A model receiving a score above 1 did worse than uninformed guesses. Simple statistical forecast models that have no climatology or physics in them typically got scores between 0.8 and 1, indicating slight improvements on the random walk, though in some cases their scores went as high as 1.8.
The climate models, by contrast, got scores ranging from 2.4 to 3.7, indicating a total failure to provide valid forecast information at the regional level, even on long time scales. The authors commented: “This implies that the current [climate] models are ill-suited to localized decadal predictions, even though they are used as inputs for policymaking.”……
More here: http://opinion.financialpost.com/2012/06/13/junk-science-week-climate-models-fail-reality-test/
h/t to WUWT reader Crispin in Waterloo
Previously, WUWT covered this issue of random walks here:
Is Global Temperature a Random Walk?
UPDATE: The paper (thanks to reader MT) Fildes, R. and N. Kourentzes, 2011: Validation and forecasting accuracy in models of climate change. International Journal of Forecasting. doi 10.1016/j.ijforecast.2011.03.008
and is available as a PDF here