diff --git a/CHANGELOG.md b/CHANGELOG.md
index c61d9d3813d..2f4718345d0 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,8 @@
 ## dbt next (release TBD)
 
+### Fixes
+- When a jinja value is undefined, give a helpful error instead of failing with cryptic "cannot pickle ParserMacroCapture" errors ([#2110](https://github.com/fishtown-analytics/dbt/issues/2110), [#2184](https://github.com/fishtown-analytics/dbt/pull/2184))
+
 ## dbt 0.16.0rc2 (March 4, 2020)
 
 ### Under the hood
diff --git a/core/dbt/clients/jinja.py b/core/dbt/clients/jinja.py
index 39feb17104d..cbef36f4459 100644
--- a/core/dbt/clients/jinja.py
+++ b/core/dbt/clients/jinja.py
@@ -311,38 +311,18 @@ def _is_dunder_name(name):
     return name.startswith('__') and name.endswith('__')
 
 
-def create_macro_capture_env(node):
-
-    class ParserMacroCapture(jinja2.Undefined):
-        """
-        This class sets up the parser to capture macros.
-        """
+def create_undefined(node=None):
+    class Undefined(jinja2.Undefined):
         def __init__(self, hint=None, obj=None, name=None, exc=None):
             super().__init__(hint=hint, name=name)
             self.node = node
             self.name = name
-            self.package_name = node.package_name
+            self.hint = hint
             # jinja uses these for safety, so we have to override them.
             # see https://github.com/pallets/jinja/blob/master/jinja2/sandbox.py#L332-L339 # noqa
             self.unsafe_callable = False
             self.alters_data = False
 
-        def __deepcopy__(self, memo):
-            path = os.path.join(self.node.root_path,
-                                self.node.original_file_path)
-
-            logger.debug(
-                'dbt encountered an undefined variable, "{}" in node {}.{} '
-                '(source path: {})'
-                .format(self.name, self.node.package_name,
-                        self.node.name, path))
-
-            # match jinja's message
-            raise_compiler_error(
-                "{!r} is undefined".format(self.name),
-                node=self.node
-            )
-
         def __getitem__(self, name):
             # Propagate the undefined value if a caller accesses this as if it
             # were a dictionary
@@ -355,15 +335,17 @@ def __getattr__(self, name):
                     .format(type(self).__name__, name)
                 )
 
-            self.package_name = self.name
             self.name = name
 
-            return self
+            return self.__class__(hint=self.hint, name=self.name)
 
         def __call__(self, *args, **kwargs):
             return self
 
-    return ParserMacroCapture
+        def __reduce__(self):
+            raise_compiler_error(f'{self.name} is undefined', node=node)
+
+    return Undefined
 
 
 def get_environment(node=None, capture_macros=False):
@@ -372,7 +354,7 @@ def get_environment(node=None, capture_macros=False):
     }
 
     if capture_macros:
-        args['undefined'] = create_macro_capture_env(node)
+        args['undefined'] = create_undefined(node)
 
     args['extensions'].append(MaterializationExtension)
     args['extensions'].append(DocumentationExtension)
diff --git a/test/integration/003_simple_reference_test/invalid-models/descendant.sql b/test/integration/003_simple_reference_test/invalid-models/descendant.sql
new file mode 100644
index 00000000000..50b4e3e559a
--- /dev/null
+++ b/test/integration/003_simple_reference_test/invalid-models/descendant.sql
@@ -0,0 +1,2 @@
+-- should be ref('model')
+select * from {{ ref(model) }}
diff --git a/test/integration/003_simple_reference_test/invalid-models/model.sql b/test/integration/003_simple_reference_test/invalid-models/model.sql
new file mode 100644
index 00000000000..43258a71464
--- /dev/null
+++ b/test/integration/003_simple_reference_test/invalid-models/model.sql
@@ -0,0 +1 @@
+select 1 as id
diff --git a/test/integration/003_simple_reference_test/test_simple_reference.py b/test/integration/003_simple_reference_test/test_simple_reference.py
index 5d39a6e641b..b2a4aae3efc 100644
--- a/test/integration/003_simple_reference_test/test_simple_reference.py
+++ b/test/integration/003_simple_reference_test/test_simple_reference.py
@@ -1,5 +1,10 @@
+import os
+
+from dbt.exceptions import CompilationException
+
 from test.integration.base import DBTIntegrationTest, use_profile
 
+
 class TestSimpleReference(DBTIntegrationTest):
     @property
     def schema(self):
@@ -184,3 +189,20 @@ def test__snowflake__simple_reference_with_models_and_children(self):
 
         self.assertTrue('EPHEMERAL_SUMMARY' in created_models)
         self.assertEqual(created_models['EPHEMERAL_SUMMARY'], 'table')
+
+
+class TestErrorReference(DBTIntegrationTest):
+    @property
+    def schema(self):
+        return "simple_reference_003"
+
+    @property
+    def models(self):
+        return "invalid-models"
+
+    @use_profile('postgres')
+    def test_postgres_undefined_value(self):
+        with self.assertRaises(CompilationException) as exc:
+            self.run_dbt(['compile'])
+        path = os.path.join('invalid-models', 'descendant.sql')
+        self.assertIn(path, str(exc.exception))