May 2000

Government Markets are Unreliable

A bill that just sailed through the Republican-controlled New York State Senate on a 59-0 vote should give pause to those companies that support emission trading as a means to comply with Kyoto-style CO2 regulations. The bill would prohibit New York utility companies from keeping the money they make from selling excess SO2 credits, acquired under a provision of the federal Clean Air Act of 1990, to utilities in the Midwestern and Southern United States.

Proponents of the bill claim that utilities in the Midwest and South can buy credits rather than cleaning up their emissions, which then drift into New York increasing the amount of acid rain deposition. “It makes no sense for New York to clean up its own smokestacks and then hand the right to pollute to it neighbors,” said John F. Sheehan, a spokesman for the Adirondack Council, an environmental pressure group.

The U.S. Environmental Protection Agency says it supports the bill. “We arein favor of providing maximum flexibility to states like New York in our common effort to protect public health and the environment,” said Kim Rubey, a spokeswoman for the agency (New York Times, May 2, 2000).

This action by the New York Legislature raises a larger question of what this means for an international CO2 emission trading system. The European Union is adamantly opposed to the use of emission trading as a major component of a countrys compliance strategy. They want to force countries (read the U.S.) to make at least 50 percent of their cuts domestically.

It is quite likely that the EU would do something similar to the New York legislation. In the U.S. the New York bill, if signed into law, will most likely be challenged in court and may be ruled unconstitutional under the Commerce Clause. In the international arena it would be much more difficult to do anything about it. Besides the EU has already showed that it is willing to accept heavy sanctions, as it currently is under WTO rulings, rather than back down. In this case U.S. companies who were counting on the availability of emission credits may be out of luck.

Total Economic Collapse by 2065?

A new paper in the journal Environmental Finance by Aubrey Meyer and Tony Cooper, credentials unknown, of the Global Commons Institute in London makes the astonishing suggestion that global damages caused by global warming, at present rates, could exceed global GDP by 2065.

Citing a potentially catastrophic, if unlikely, outcome of global warming, the authors espouse the precautionary principle, justifying this choice with their own estimates of economic damages resulting from warming: “If the GDP continues to grow at 3% a year for the next hundred years while the damages continue to grow at 10%, global damages exceed global GDP in 2065! The imperative of avoiding this trend is self-evident.” Indeed, it is, but for the nagging suspicion that Meyer and Coopers numbers were conjured and coaxed out of the ether.

The global GDP may be growing at a rate of 3% – that seems reasonable enough. A 10% per annum growth in damages, though, appears unlikely. Moreover, this growth is a continuing trend, something that, unbeknownst to us all, has been eating away at our economic well-being for years, perhaps decades.

What would happen after 2065 when spiraling damages usurp the last of our meager GDP? Would functionally non-depreciated infrastructure collapse into itself, sucked into a black hole of fuzzy logic? To whom would we owe our great debt, this chasm between earnings and destruction? One envisions alien overlords demanding unending tribute as part of some bizarre rent-seeking scheme.

New Jersey/Seattle Guinea Pigs?

No, this story is not about how global warming is harming guinea pigs in New Jersey and Seattle. This is a story about a state and a city willing to become guinea pigs in the fight against global warming.

On April 17, New Jersey became the first state in the U.S. to impose CO2 reduction targets for itself. The plan calls for a reduction in greenhouse gases of 3.5 percent below 1990 levels by 2005. According to the Philadelphia Enquirer (April 18, 2000), “About a third of the reductions would come from energy-efficiency improvements in residential, commercial and industrial buildings. Another third would come from employing energy technologies such as biomass, wind and solar power. The rest would come from improvements in the transportation efficiency and waste management.”

The state itself plans on switching some of its transit buses to bio-fuel made up of part diesel and part soy vegetable oil, as well as extracting methane from old landfills.

Seattle is taking a more aggressive approach. It has pledged to reduce the citys greenhouse gas emissions to zero using renewable energy and energy efficiency. “Climate change is the worlds most urgent environmental challenge, but its also very much a local issue,” said Mayor Paul Schell. “In Seattle, we can

demonstrate that we take global warming seriously by ensuring that City Light (Seattles municipally owned utility) provides clean electrical energy.”

The city will meet its goal by relying on “existing hydropower and development of new wind, geothermal, solar and landfill gas facilities, as well as energy conservation measures,” reports the Environmental News Service (April 13, 2000). “If any fossil fuels are required to meet electricity demand, the City plans to offset the carbon emissions through other means such as forest protection.”

Enviro Groups Sued For Commercial Defamation

Western Fuels Association filed a suit against several environmental groups in Wyoming federal district court on April 17. The suit alleges that a full-page advertisement in the New York Times (see, paid for by the Turning Point Project and signed by several environmental groups, constitutes “commercial defamation” as defined under the Section 43 of the Lanham Act.

The ad, which pictures a mosquito and asks “Global Warming how will it end?” claims that burning fossil fuels will increase violent hurricanes, disease carrying mosquitoes, melting glaciers, rising sea levels, drought, famine, disease, and so on. “They are attempting to portray electric generation from fossil fuels as a significant health risk, while in fact the opposite is true,” said Fred Palmer, general manager and CEO of Western Fuels.

The suit alleges that the defendants in the case, Friends of the Earth, Earth Island Institute, Ozone Action, Rainforest Action Network, and the International Center for Technology Assessment, receive money from corporations and organizations who promote alternative energies and who would gain financially from the demise of the use of fossil fuels. Friends of the Earth, for instance, receives funds from British Petroleum, which has substantial investments in solar energy. For more information, go to

Australia Vacillates on Kyoto

Although the country was able to secure an 8 percent rise in emissions in the Kyoto Protocol, Australia may still be hedging its bets on Kyoto implementation. The country’s diplomats recently managed to water down the language in a communiqu from the South Pacific Forum that would have demanded that all industrialized countries meet or beat Kyoto targets, according to Electricity Daily (April 28, 2000).

Foreign Affairs Minister John Downer fears that if countries are unable to meet their Kyoto obligations, the protocol may “unravel.” Many Kyoto implementation details still must be sorted out this year at The Hague meeting, making it even more likely that countries will miss their fast-approaching targets for 2002. To sidestep this embarrassment and avoid undermining the protocol, the SPF’s letter now calls for the protocol to be met “at the earliest possible date,” leaving representatives of several smaller Pacific islands, which are concerned about rising oceans, a bit hot-headed.

Gutsy CEOs

While many industries are falling all over themselves to appease environmental activists, some CEOs are proving that they still have a spine. In addition to Lee Raymond, chairman of Exxon Mobil, two other oil executives have recently spoken up about the Kyoto Protocol.

Ron Brenneman, president of Petro-Canada, told his companys annual meeting that he would ignore Kyoto if it threatened the companys finances. “Kyoto, in my opinion, is the wrong way to deal with this whole issue,” he said. “We are not about to curtail growth, because I think shareholders have invested in this company for shareholder value, not to try and solve a global problem” (Edmonton Sun, May 2, 2000).

At Imperial Oils annual shareholders meeting, CEO Bob Peterson told the audience that Kyoto is “bad science and flawed public policy.” There are “too many theories chasing not enough facts to support the theory of global climate change.” Several protesters at the meeting threw pennies at the CEO, chanting, “A penny per shareholder, thats all it costs. Are you willing to pay a penny to clean up gas?”

Peterson went on to say, “Is this problem real and, if so, how serious is it? Is human activity a factor, or is it simply a normal variation in the Earths climate? Meeting the Kyoto targets means that as Canadians we have effectively agreed to limit the size of the Canadian economy” (Toronto Star, April 21, 2000).

Drought Cycles and Hurricane Cycles

University of New Mexico scientist Louis Scuderi, studying tree ring data in New Mexico, Arizona, Utah, and Colorado, has identified a 72 year drought cycle in the region according to an AP article of April 29th. The last such drought occurred in the 1950s, leading Scuderi to believe that another is imminent in the 2020s.

Although the cause of the drought cycle is still unknown, a good bet would be climactic oscillators, similar to the El Nio and La Nia effects, only operating over this longer timespan. Scientists believe that many of these oscillators may exist, effecting temperature and climate significantly. Naturally, the longer the period of an oscillator, the more difficult it is to detect.

According to hurricane expert Dr. William Gray at Colorado State University, we should see an increase in storm activity over the next 20 years. The storms are expected to cause 5 to 10 times the amount of damage on the Gulf and Atlantic Coasts than previously experienced, due to the massive increase in population and development along these coastlines.

The hurricane activity of the next 20 years should resemble the period that began in the late 1920s and lasted through the 1940s. The increase is due to higher salinity content in the Atlantic Ocean, which alters its currents and increases average ocean temperatures, fueling more storms. Gray emphasizes that this is a cyclical trend and has nothing to do with global warming (CNN, April 22, 2000).

CBS Hot Air Watch

On April 18, the CBS Evening News broadcast a segment, reported by John Blackstone, entitled “Global Warming Generating Short- and Long-Term Drastic and Dangerous Weather Changes.” Bravo to the scientists at CBS for proving the outcomes of warming that have eluded the entire camp of doomsayers since day one.

Blackstone begins by acknowledging the warmth of the “noonday sun in New Orleans… unusually warm for this date,” conclusive evidence in itself, no doubt. His interviewee is James Baker, administrator of NOAA and reknowned global warming enthusiast. According to Baker, “The January, February, March temperatures in the United States are the warmest ever in our 106 years of record keeping” which “is a very significant fact. It’s a wake-up call, really.”

And what will we be waking up to? “Severe weather damage” and “more floods, more droughts and…hurricanes with more destructive power.” Sounds ominous until, of course, one considers recent insurance industry reports, by Swiss Re and others, discrediting the idea of increased weather extremes while blaming more-costly development for rising storm damages.

Baker, though, prepares himself for the worst: “If you had a Category 4 hurricane that hit New Orleans…youd have 20 feet of water in New Orleans. Thats frightening.” Indeed, Mr. Baker, it is, which is why all should be reassured that it’s extremely unlikely.

Of course, some scientists have to justify their federal agency’s funding on a regular basis by such means as strutting about with the global warming cranks at CBS. This might explain why Baker has been trotted out by CBS no less than five times in the past month.

For example, Baker commanded a lead role in the CBS News web article titled “Global Warmings Impact Is Clear,” again highlighting the amazing research being performed by the most weather-conscious of the Big Three networks. It’s been reported, in fact, that CBS scientists, always cutting edge, are on the verge of linking climate change to Nielsen rating reports. Stay tuned…


  • Dr. Richard Lindzen, Sloan Professor of Meteorology at MIT, will speak at a Washington Roundtable on Science and Public Policy sponsored by the George C. Marshall Institute at noon, May 17, at the University Club, 1135 16th Street, NW, Washington, D.C. Dr. Lindzen, will speak in, “Climate Forecasting: When the Models are Qualitatively Wrong.” For further information, please call (202) 296-9655.
  • Also market your calendar for Tuesday, May 30 when an international team of top climate scientists will present their review of the draft Third Assessment Report of the IPCC. The symposium, tentatively scheduled for 10:00 a.m. to 1:00 p.m., is sponsored by the Cooler Heads Coalition and the Science and Environmental Policy Project.