May 1999

Yellen Defends Economic Study; Cost of Kyoto for Agriculture; USDA Analysis Says Kyoto Would Have Minimal Effect on Farmers

by William Yeatman on May 19, 1999

in Blog

Yellen Defends Economic Study

The Clinton Administration continues to defend its Kyoto cost estimates even though nearly everyone agrees that they are woefully overoptimistic. On April 29, Janet Yellen, chair of the Presidents Council of Economic Advisors, testified before the House Small Business Committee, reaffirming the administrations commitment to its cost estimates.

Yellens estimates that the cost of Kyoto will fall between $7 and $12 billion per year if the Annex I countries fully participate in an international emission trading system. The cost of a carbon permit representing 1 ton of carbon would only cost between $14 and $23. These estimates fall far below the estimates of other studies.

Yellen also claimed that improving forestry and agriculture management “have the potential to bring down the costs substantially.” One of the problems with the administrations claims is that they are all based on speculation. To date there is no agreement between the Annex I countries about emission trading, and the use of carbon sinks is an even more contentious issue. Moreover, as Yellen admitted in her testimony, the issue of carbon sinks is still very cloudy. There are no good estimates as to the extent to which carbon offsets could be used to reduce greenhouse gas emissions.

Committee Chairman James Talent (R-Mo.) asked Yellen if the administration had projected the future energy use of those countries from which the United States would want to buy emission allowances. She responded that these numbers were implicit in the estimates that she had given. When asked if she could make those numbers explicit she said she could not. Talent asked how it was possible to make estimates about allowance prices without estimating the supply and demand conditions that may exist.

Also testifying in the hearing was Robert Reinstein, president of Reinstein & Associates International. He did make those estimates and concluded that the supply of permits is insufficient to cover the demand. The demand for credits will be between 1.7 and 3 billion tons of carbon equivalent. “The maximum potential supply of credits available through emission trading,” said Reinstein, “is less than 1.3 billion tons of carbon equivalent.” This would occur in the case where the Russian and other Eastern European economies continue to stagnate. If they recover the supply will be considerably less.

Credits could also be earned through joint implementation and the Clean Development Mechanism. “Overall, I would estimate the likely total supply of emission credits from all three Kyoto flexibility mechanisms at between 200 and 500 million tons per year,” said Reinstein. Under the best case scenario the supply of credits would cover about 30 percent of OECD country demand. Under business as usual the supply would cover just 7 percent of demand. The result would be a permit price of $150 to $200 per ton of carbon equivalent.

Cost of Kyoto for Agriculture

Several studies have attempted to ascertain the effect of global warming on agriculture. Overall they have found that U.S. agriculture would suffer little from global warming. Now a study has been done to determine the effects of global warming policy, specifically the Kyoto Protocol, on U.S. agriculture. Sponsored by the American Farm Bureau, American Corn Growers Assn., National Cattlemans Beef Assn., United Fresh Fruit & Vegetable Assn., and the National Grange, the study shows that the Kyoto Protocol would have a severe economic impact on agriculture.

The study estimates that agriculture would suffer an 8.8 percent increase in production costs as well as a loss in sales of $5 billion at the farm level, due to lower GDP. Farm income would also fall by more than 50 percent. Most importantly, perhaps, is the claim that the Kyoto Protocol would have a disproportionate impact on low-income Americans. The study points out that 37 percent of U.S. households have an income of less that $20,000 after taxes. These households spend anywhere from 21.2 percent to over 100 percent of their after-tax income on food compared to the average U.S. consumer who only spends 11.9 percent. The poor would suffer the most from increased food prices. For more information contact the American Farm Bureau Federation at (202) 484-3600.

USDA Analysis Says Kyoto Would Have Minimal Effect on Farmers

In contrast to the agricultural sectors study, the U.S. Department of Agriculture claims that the Kyoto Protocol will have little effect on farmers. The USDA assumes the existence of emission trading and bases its analysis on the Clinton Administrations estimate of the costs of Kyoto on the American economy. The study, therefore, assumes a permit price of $23 per ton of carbon emissions.

According to the study, production costs would only rise by 0.6 percent and farm income would fall by a mere 0.5 percent. Changes in commodity prices would be barely noticeable, 2 cents higher per bushel of corn and only 1 cent per bushel higher for wheat and soybeans. The study also claimed that farmers could supplement their incomes by participating in carbon sequestration and methane reduction programs to earn emission allowances. The study attacks the recent economic analysis by farmers organizations, claiming that it does not account for “adjustments that farmers would make to changes in production processes.” The study can be found at www.usda.gov.

New Bill to Implement Clinton-Gore Agenda; DOT Wants Global Warming Cash; EU Agrees on Global Warming Plan

by William Yeatman on May 19, 1999

in Politics

New Bill to Implement Clinton-Gore Agenda

Just when it looked like the Clinton Administrations global warming agenda was nearly buried, some Republican lawmakers have begun to rehabilitate it. The “early action for credit” bill introduced by Senators Chafee, Leiberman and Mack would, if passed, grease the skids for eventual ratification of the defunct Kyoto Protocol, and a bill introduced by Senators Murkowski and Hagel legitimizes the “need” to reduce greenhouse gas emissions.

Now Representative Bill Thomas (R-Calif.) has introduced a bill, the Energy Efficient Affordable Home Act of 1999 (H.R. 1358) that would implement a part of Clintons rejected Climate Change Initiative. The bill would give a $2,000 tax credit for energy-efficient homes. To qualify for the tax credit a home would have to be 30 percent more energy efficient than required under the International Energy Conservation Code.

The bill has the support of the National Association of Home Builders, the North American Insulation Manufacturers Association, the Edison Electric Institute and other industry groups that would benefit financially from this corporate subsidy, as well as environmental and public interest groups (e-FFICIENCY News, May 11, 1999).

DOT Wants Global Warming Cash

Not to be outdone by its fellow federal agencies, the Department of Transportation announced on May 3 that it will create a $1 million “center for global climate change and environmental forecasting,” to study greenhouse gas emissions. The new program would do scientific research, and assess new technologies and alternative fuels. Transportation Secretary Rodney E. Slater noted that the agency would work closely with the Environmental Protection Agency and the Department of Energy. “Im just pleased that we in Transportation will not be taking a back seat on the issue of the environment,” said Slater.

According to the Washington Post (May 2, 1999), the new center “will study new technologies to achieve higher fuel efficiency, tax credits for fuel-efficient cars, changes in travel behavior, transportation planning as a part of community development, and other methods of addressing global warming.” Slater also announced that federal transportation experts would be made available to communities to help design projects as well as teach local officials and citizens how to acquire federal funds for transportation projects.

EU Agrees on Global Warming Plan

After long and contentious negotiations the European Union members finally came to an agreement on a common strategy to fight global warming. An early proposal would have restricted the use of flexible mechanisms, such as emission trading, to make sure that countries achieve most of their emission reductions through domestic actions.

Netherlands and Sweden had both rejected the plan asking for looser restrictions. But according to a German spokesman, “the Dutch and Swedish problem seems to be solved. The negotiating position will be adopted along with a special declaration noting their special problems” (Reuters, May 10, 1999).

Tornadoes not Linked to Global Warming; Is Indias Heat Wave More Evidence of Global Warming?

by William Yeatman on May 19, 1999

in Science

Tornadoes not Linked to Global Warming

Like night follows day, global warming activists will blame the recent killer tornadoes in the Midwest on global warming. Scientists, however, dont see such a link. According to Eugene Takle, a professor of atmospheric science at Iowa State University, “We havent seen an increase (in tornadoes) as yet.” There has been “a lot more property damage,” says Takle. “Many of the deadliest tornado years on record occurred in the 1950s and 1960s,” according to the Kansas City Star (May 5, 1999). “In 1953, for example, 150 persons died in Texas in May; on May 25, 1955, 81 died in Kansas.”

The key to preventing tornado deaths and property damage is “building better structures; locating structures out of areas prone to disaster; and acting on improved storm warnings.”

Is Indias Heat Wave More Evidence of Global Warming?

At least one scientist, Dr. M. Lal from the Centre for Atmospheric Sciences at the Indian Institute of Technology, is claiming that Indias current heat wave “is a signal to global warming.” He claims that last year was the hottest in the century in India and he predicts it will continue this year. S.C. Gupta, Director of Delhi Meteorological Office says that this is no different than past heat waves. Gupta argues that other severe heat waves have occurred in the past, such as the heat waves in 1941, 1958, 1973, and 1994.

According to Gupta, India always experiences extraordinarily high temperatures this time of year. Those temperatures are moderated, however, by western disturbances low pressure weather patterns that originate in the Mediterranean and move across Pakistan and into India that bring relief. Heat waves occur when these western disturbances are fewer in frequency. That is what has occurred this year, says Gupta. This year is nothing unusual (The Hindu, May 4, 1999).

Etc.

  • The World Resources Institute has announced that it will reduce its emissions to 7 percent below 1990 levels by October 2001 in accordance with the U.S. target under the Kyoto Protocol. It also pledges to cut emissions to zero or better by 2005. It is not yet clear whether these actions will have a positive or negative impact on the broader U.S. economy.

  • A prominent corporate executive has confessed his ecological sins and denounced his own company. Ray Anderson, CEO of Interface, a manufacturer of carpet tile, and co-chair of the Presidents Council on Sustainable Development, told a gathering of industry CEOs that “I had a revelation about what industry is doing to our planet. I stood convicted as a plunderer of the earth.” He also said, “In the future people like me will go to jail” (Fortune, May 24, 1999).

  • Now that science has confirmed that parasites, not man, are responsible for deformed frogs (New York Times, April 30, 1999), get ready for the next manmade frog catastrophe. The culprit? You guessed it, manmade global warming. Already a major newspaper has claimed that global warming is causing drier conditions in Costa Rica, threatening frogs with extinction (Washington Post, April 15, 1999).

Announcements

  • The Cooler Heads is sponsoring a science briefing for congressional staff and media on May 28. The briefing will feature Dave Malmquist of the Bermuda Biological Station for Research, who will discuss “Climate Change and Sea Level Rise.” More details to come.

  • The transcript from the latest Cooler Heads science briefing for congressional staff and media is now available on the internet at www.cei.org. The presentation by Dr. Keith Idso is entitled, The Ecological Benefits of Increasing Atmospheric Carbon Dioxide Levels. Other briefing transcripts are also available on the website.

Insurance Industry off the Global Warming Bandwagon; Slower CO2 Emission Growth in 1997

by William Yeatman on May 5, 1999

in Blog

Insurance Industry off the Global Warming Bandwagon

In the past, global warming activists have counted the insurance industry as an ally in their anti-energy crusade. Claims that manmade global warming might increase weather-related calamities have caused concern amongst property and casualty insurers who feared that a significant increase in hurricane activity, for instance, would expose their companies to financial risk.

A new report by the American Insurance Association, however, downplays these fears. The report points out that the Intergovernmental Panel on Climate Change found “little evidence that a general warming would result in an increase in the frequency and severity of hurricanes.” It further argued that “much of the research seems to indicate that global warming would not increase the frequency of hurricanes and might even suppress hurricane development.”

AIA cites William Gray, a pre-eminent expert on hurricanes at Colorado State University, who argues that hurricane activity is influenced by “other oceanic and weather patterns that tend to run in 20-30 year cycles,” not global warming. The real problem regarding hurricane activity, says the report, is “the tremendous growth in population, homes, commercial development in the most hurricane-prone regions of the United States, especially Florida and other states along the Southeast and Gulf coasts.” For example, Dade, Broward, and Palm Beach counties in Florida now have a greater combined population than all coastal counties from South Texas to Virginia during the 1930s.

The report lists the lines of insurance and the impact of weather on claim experience. Lines with moderate or significant exposure include Homeowners, Commercial Multi-Peril Non-Liability, Allied, Inland Marine, Farmowners, and Ocean Marine. These lines only account for less than 20 percent of industry premiums. The rest have little or no exposure to weather events. The report notes that hurricanes can “endanger the solvency of a significant number of insurers,” but says the report, “weather events that are cited as more likely consequences of climate change do not imply levels of loss that could threaten industry solvency.”

Moreover, global warming could mitigate winter storm and freeze losses, which is a significant weather exposure for the industry. “Four of the property-casualty insurance industrys largest 20 natural catastrophes as defined by insured dollar losses have been winter storm events,” says the report. “Higher winter temperatures in the U.S. and Canada could help to lower the frequency and severity of cold outbreaks that cause massive winter storm and freeze losses.”

Finally, the report expresses confidence in the ability of the insurance industry to adjust to any changes that may occur. In the event of increased weather related losses the industry would have the ability to adjust premiums. The greatest obstacle to rapid adjustments to changing conditions is the “heavily regulated” nature of the industry. “Adjustments are subject to state review and occasionally, to intense political debate,” notes the report. However, solvency of the industry is one of the primary responsibilities of regulators, and “insurers and regulators would have to respond” to changes in loss trends. The report can be found at www.aiadc.org.

Slower CO2 Emission Growth in 1997

According to the Energy Information Administration, worldwide carbon dioxide emissions from burning fossil fuels grew by only 1.2 percent in 1997 compared to 2.8 percent in 1996. “Carbon dioxide emissions grew more slowly in 1997 than in 1996 because of the actual decline in consumption of natural gas and the slower growth in the consumption of coal and petroleum,” said the EIA (Daily Report for Executives, April 21, 1999).

More on the Costs of Kyoto

by William Yeatman on May 5, 1999

in Blog

Hearings held on April 23 by the House Government Reform subcommittee featured estimates of the costs of complying with the Kyoto Protocol. Mary Novak, an economic forecaster with Wefa Inc. said the sharp reductions in energy use would cause home heating and electricity costs to skyrocket from 56 to 70 percent by 2010. Household incomes would drop by $2,728 and the costs of food, medical care, and housing would increase by up to 14 percent. “All workers face a slowing in their real wage growth,” with low-income workers suffering the most.

Joyce Prinner, principal of Standard & Poors DRI, told Congress that if the U.S. succeeds in getting Europe to engage in low-cost reductions (emission trading), consumer energy prices would rise by about 9 percent and about 500,000 jobs would be lost. Resistance to emission trading, however, would force the U.S. to reduce emission on its own leading to an increase of energy prices of 24 to 36 percent and a loss of 1.6 million jobs.

John Passacantando, exectuive director of Ozone Action, said the Kyoto Protocol, “will be a boon for the U.S.” because it will spur innovation in clean technologies. Passacantando says that “For the last 30 years, America has passed and enforced the best health and environmental laws in the world. We have built our economy in harmony with a cleaner environment. We have an economy that is the envy of the world” (The Washington Times, April 24, 1998)

Fingerprints Vanish in Analysis of 11 Climate Models; Continental U.S. Getting Cooler

by William Yeatman on May 5, 1999

in Science

Fingerprints Vanish in Analysis of 11 Climate Models

Global warming predictions are based on detection studies that use Coupled Global Climate Models (CGCMs) to find a human fingerprint in the climate system. Climate modelers attempt to imitate the natural variations of the climate system and then add manmade greenhouse gases to see how global temperatures respond.

A new study in the Journal of Climate (February 1999) throws doubt on the validity of these types of studies. According to the author Tim Barnett, of the Climate Research Division, Scripps Institution of Oceanography, University of California, modelers “have taken their estimates of natural variability from long control runs of CGCMs. This would be a valid procedure if the internally generated variability in the models was a realistic estimate of natural variability. Whether this is true or not is at the moment uncertain.”

Barnett sets out to see if model variability is realistic by comparing natural climate variability to the temperature variability in 11 different models, run for 100 model years. He finds that “differences of a factor of 2 or more are common for even the best behaved models.” He also states that “there is no model that consistently agrees well with the observations.”

Even more damning is the finding that it is difficult to distinguish “natural” model runs from those with anthropogenic forcing. Barnetts analysis shows that “CGCMs can, without any anthropogenic forcing, produce patterns that resemble those expected from anthropogenic causes. This, in turn, will make it more difficult to apply a fingerprint strategy to detect anthropogenic signal since the natural variability estimated from CGCMs and used in the detection scheme looks like the anthropogenic signal itself.”

Continental U.S. Getting Cooler

Green activists have been have been trying to convince the American public that global warming is underway by highlighting warmer temperatures and remaining silent when temperatures are on the cooler side. Much has been done to give the impression that things are heating up. A new study conducted by researchers at the Climate Prediction Center (CPC), a division of the National Oceanic and Atmospheric Administration, has found that the continental United States has become cooler, one-thirtieth of a degree per decade, since 1941, although the finding is probably not statistically significant.

The study also finds that nearly the entire U.S. has become significantly wetter, by nine-tenths of an inch more rainfall per decade since 1966. Each month has become wetter over the same period, with the fall becoming much wetter. The study confirms what has been found by several past studies, but it also contradicts others. According to David Easterling, principal scientists at the National Climatic Data Center, an NCDC study shows a cooling only in the Southeast United States. The NCDC study also covers a longer time span going back to 1900.

But, according to Rich Tinker, a co-author of the CPC study, argues that his research has been used by the CPC to devise “this years winter and spring predictions. They have been the most accurate on record (Omaha World-Herald, April 20, 1999).”

Etc.

  • According to AAP Newsfeed (April 22, 1999), “renowned U.S. scientist on climate change (weve never heard of him, Eds.),” Professor Richard Turco called for global environmental regulations in a speech delivered on April 22. Turco argued that technology is out of control saying that “it is growing at such a pace, we have a problem in maintaining control over itwe either have to evolve with the technology or were going to be simply overtaken and swamped by it.”

The solution to the problem, according to Turco is to “develop global regulations and global environmental laws to control technology and its implementation.”

  • John Wellner with the Toronto Environmental Alliance describes his Earth Day experiences in the April 27, 1999 issue of The Toronto Star. Wellner and his colleagues decided to hand out “informative traffic tickets” to cars entering the Toronto City Hall parking garage.” They greeted each car with a friendly “Happy Earth Day!”

Wellner was appalled at the reception he received. “Some drivers were friendly, albeit a little sheepish, but the majority were far from civil. Non-traditional environmental greetings like, Get out of my way! usually with a traditional expletive and, sometimes, succinctly, just the expletive were plentifulI guess they were late for their morning coffee, or something.”

Heres an alternative explanation. Maybe people are sick and tired of sanctimonious environmentalists telling them how to live their lives.

Announcements

  • The Cooler Heads is sponsoring a science briefing for congressional staff and media on May 28. The briefing will feature Dave Malmquist of the Bermuda Biological Station for Research, who will discuss “Climate Change and Sea Level Rise.” Further details will be forthcoming.

Senate Bill Would Spend $2 Billion to Prevent Global Warming; Green Imperialism in Asia

by William Yeatman on May 5, 1999

in Politics

Senate Bill Would Spend $2 Billion to Prevent Global Warming

On April 27 Senators Frank Murkowski (R-Alaska), chairman of the Senate Energy and Natural Resources Committee, and Chuck Hagel (R-Neb.), introduced a bill (S. 882) that would create a $2 billion, 10 year research and development program to reduce greenhouse gases. The funds would support a public-private research effort funneling new subsidies into the energy industry.

Murkowski, who opposes the Kyoto Protocol, claims that the bill “represents a long-term technology based, global alternative.” He also said it would “leverage American ingenuity in the marketplace to develop new technology that can be exported and deployed around the world.” Murkowski also told reporters, “We anticipate a great deal of support from industry.” There is little reason to believe that this R&D program would be any more successful than previous failed programs.

The bill would also create the Office of Global Climate Change within the Department of Energy, to be headed by an assistant secretary. Hagels defense of the bill, highlighted one of its main weaknesses. He said, according to the BNA Daily Environment Report (April 28, 1999), “this change would centralize accountability and responsibility for climate change policy within the executive branch.”

The bill would also expand Section 1605(b) of the Energy Policy Act of 1992, which allows companies to voluntarily report greenhouse gas emission reductions, to include new categories such as agricultural activities, forest products, grasslands and drylands management and iron fertilization of the oceans to enhance carbon dioxide absorption rates.

The Global Climate Coalition, an industry group opposed to Kyoto said, “if this or any other proposal allows the United States to move forward on recognizing and encouraging voluntary actions without any potential linkages to the Kyoto albatross, it should be widely accepted.” A coalition of 11 environmental groups expressed satisfaction that Murkowski and Hagel “have finally acknowledged that global warming is a serious problem,” but that the bill is “a dangerous diversion from real solutions to global warming.”

Other co-sponsors include Robert Byrd (D-W.Va.), Larry Craig (R-Idaho), Mike Enzi (R-Wyo.), Rod Grams (R-Minn.), Tim Hutchinson (R-Ark.), John McCain (R-Ariz.), Pat Roberts (R-Kan.) and Gordon Smith (R-Ore.).

Green Imperialism in Asia

The Philippines has struggled to escape the grinding poverty that has plagued its people for decades. Although it hasnt been altogether successful, there are signs that the Filipinos economic health is improving. The use of fossil fuels has always been essential to economic growth due to their relative abundance. Though many see this as a positive, radical Greens oppose increased use of fossil fuel in the Third World. Currently Greenpeace is lobbying the Filipino government reject “fossil fuel-based technologies to increase energy production,” and to create a clean air act, according to the Deutsche Presse-Agentur (April 19, 1999).

Greenpeace is alarmed that the Philippines and other Asian nations are heavily investing in coal-powered development programs. According to Athena Ronquillo Ballesteros, climate campaigner for Greenpeace International, “We have to stop using the atmosphere as a giant watebasket for gases like carbon dioxide that cause global warming.” She also said, “In order to seriously reduce the amount of carbon released into the atmosphere and thus prevent or slow down dangerous climate change, we need to start thinking about independence from fossil-based technologies.”

Greenpeace is urging the Filipino government to “serve as a model in proactive environmental advocacy” for the Southeast Asian governments. “We are calling on the leadership of the country to heed our call for a clean air act as well as create a healthy environment for renewable and energy-efficient power producers,” said Greenpeace.