June 2009

President Barack Obama rode into the White House promising open and honest government. So why did his administration bully a career official at the Environmental Protection Agency into silence?

Last week, the Competitive Enterprise Institute released a 98 page report written by Alan Carlin, a 38 year veteran of the EPA, on the shaky science employed by global warming alarmists. Mr. Carlin had submitted the report to his superiors for the EPA to consider as it deliberated whether or not carbon dioxide “endangers” human health and welfare. As noted by my colleague Marlo Lewis, an “endangerment” finding isn’t mere bureaucratese. Instead, it’s a legal tripwire that would spark an economically ruinous regulatory chain reaction under the Clean Air Act (to read more on that, click here).

But the EPA would not consider Carlin’s report. In a series of incriminating emails, Carlin’s boss bluntly informed him that his report would remain secret for political reasons.

Late Thursday night, CEI went ahead and posted a draft version of the document, which you can read here.

In a not-so-subtle dig at the supposed backwardness of his predecessor four months ago, President Obama said that science is “about ensuring that facts and evidence are never twisted or obscured by politics or ideology.” Now we learn that his administration has silenced a critical voice in the EPA. Is this the change we were promised?

Members of Congress are suitably outraged. Rep. Joe Barton (R-Texas), cited the report on the floor of the House of Representatives last Friday. Senator James Inhofe (R-Oklahoma) told FoxNews that he intends to investigate the matter further.

The story has made big waves in the media. For accounts, click on this links: New York Times, San Francisco Examiner, Michelle Malkin, Dow Jones (Subscription Req’d), American Spectator, and National Review.

The tenth in an occasional series that shines a bit of light on the regulatory state.

Today’s Regulation of the Day comes to us from the U.S. House of Representatives (435 employees, $4 trillion budget).

The Waxman-Markey cap and trade bill that passed the House last week contains 397 new regulations, according to CEI Energy Policy Analyst William Yeatman and former CEI Warren Brookes Fellow Jeremy Lott. The legislation now heads off to the Senate.

It is worth noting that just minutes after the final vote came in, Washington was hit by a fierce hail storm; not that Congress’ doings have any cause-and-effect relationship with the weather (ahem).

You can read the bill — Congress didn’t — by clicking here.

Noted atmospheric scientist and Nobel Prize winner in Physics, Paul Krugman, has a rant in the New York Times today saying that House members — the “deniers” who voted against the pork-filled energy bill — were guilty of “treason against the planet.”

As Krugman wrote:

And as I watched the deniers make their arguments, I couldn’t help thinking that I was watching a form of treason — treason against the planet.

He must have been watching a different debate. I was most taken with the fact that the Democrats didn’t seem at all perturbed about voting on a bill with 300 pages of amendments missing. But the Republicans were, and repeatedly asked how they were supposed to vote on a bill that no one had read in its entirety.

But no, Krugman didn’t think that the Dems were acting irresponsibly in blatantly bribing recalcitrant Members to vote “aye” to get the necessary votes for a bill that would drastically restrict energy use, increase energy prices, subsidize every remote technology favored by Dems’ constituents, and, incidentally, would have a negligible effect on the earth’s temperature.

He was too busy ranting about “the irresponsibility and immorality of climate-change denial.” In his apocalyptic view:

. . . the deniers are choosing, willfully, to ignore that threat, placing future generations of Americans in grave danger, simply because it’s in their political interest to pretend that there’s nothing to worry about. If that’s not betrayal, I don’t know what is.

Note: Krugman is not an atmospheric scientist and did not receive a Nobel Prize for Physics.

In the News

The Climate Change Climate Change
Kimberly Strassel, Wall Street Journal, 26 June 2009

The Renewable Energy Scam
Darren Bakst, National Review Online, 26 June 2009

Perversities of Whackman-Malarkey
Kenneth Green, Masterresource.org, 26 June 2009

Trojan Hearse
Myron Ebell, New York Post, 25 June 2009

Tilting at Green Windmills
George Will, Washington Post, 25 June 2009

Will Congress Switch off the Lights?
Iain Murray, Washington Times, 25 June 2009

A Looming Cap-and-Trade War
Patrick Michaels & Sallie James, Planet Gore, 24 June 2009

Pelosi Will Profit from Energy Tax
Mark Tapscott, Washington Examiner, 24 June 2009

Waxman-Markey: Death Knell for U.S. Jobs, Low-Cost Energy
Robert Murray, The Hill, 22 June 2009

Campaign Slogans Won’t Solve Virginia’s Energy Woes
William Yeatman & Jeremy Lott, Richmond Times-Dispatch, 21 June 2009

News You Can Use

What a Difference 3 Months Makes!

Julie Walsh

Congressional Budget Office, March 12, 2009: “The price increases caused by a cap-and-trade program would impose additional costs on households. For example, without incorporating any benefits to households from lessening climate change, CBO estimates that the price increases resulting from a 15 percent cut in CO2 emissions could cost the average household roughly $1,600 (in 2006 dollars), ranging from nearly $700 in additional costs for the average household in the lowest one-fifth (quintile) of all households arrayed by income, to about $2,200 for the average household in the highest quintile.”

Congressional Budget Office, June 20, 2009: “CBO estimates that the net annual economy wide cost of the cap-and-trade program in 2020 would be $22 billion-or about $175 per household.”

Inside the Beltway

The Moment of Truth

Myron Ebell

The House Democratic leadership rushed the Waxman-Markey bill to final passage by a narrow vote on Friday afternoon. It’s been a busy week. Late Monday night, House Energy and Commerce Committee Chairman Henry Waxman (D-Beverly Hills) sent a substitute version of H. R. 2454 to the Rules Committee. The 946-page bill passed by his committee on 21st May had become a 1201-page bill. Then early Friday morning the House Rules Committee sent the 1201 pages to the floor with an additional 309 pages released around 3:09 AM. The Rules Committee provided for three hours of debate and allowed only one of the 200-odd amendments that had been filed to be offered.

Such a short debate on major legislation is almost unprecedented. They have had to rush because they realized that the bill is such a turkey that the only way to get it through is to force members to vote and then find out later what’s in it. What they are going to find out is that it’s full of little payoffs to scores and scores of Members.

Even though there was only three hours of debate (as Rep. Joe Barton [R-Tex.] remarked, the House had spent nearly that much time on some commemorative bills), there were several priceless moments.  More on those next week. I expect that campaign operatives at the House Republican Campaign Committee are licking their lips at all the video clips they are going to have to run in teevee ads of Democrats saying that Waxman-Markey will create jobs, boost the economy, and only cost each of us a postage stamp a day.

But just as the debate was winding down at around 5:40 PM and moving to votes on the amendment and then final passage, Minority Leader John Boehner (R-Ohio) gave one of the closing speeches. The Speaker, Majority Leader, and Minority Leader traditionally are not limited by the clock and can speak as long as they want. After about twenty minutes, Chairman Waxman made a parliamentary enquiry as to whether there were any limits on how long the minority leader could speak. The Chair ruled that it was the custom of the House to listen to the Leader.

So the Digest is going to press as Minority Leader Boehner continues to speak. The Republican leadership has put out a statement that he plans to read the all 309 pages of the bill that appeared early Friday morning. It appears, though, that he’s not reading it, but summarizing each section. Rather than finishing in time for dinner or even in time to catch a flight out of town for the Fourth of July recess, it might be a long night. I expect that the House will pass Waxman-Markey on a close vote, something like 224 to 207. If it goes very late, the vote totals on both sides will go down as Members give up and go home. As people begin to dig into and see what’s in it, my guess is that it will become a sick joke, suitable fodder for late night comedians.

The Science

EPA Suppresses Internal Memo on Climate Science

Sam Kazman

In his closing remarks on Waxman Markey, Rep. Barton discussed the recent revelations of EPA squelching an internal report that criticized the agency’s stance on GW. Those revelations were made by CEI three days earlier, when it disclosed a series of EPA emails in which a senior career analyst at the agency was bluntly informed by his boss that his report would remain secret for political reasons. CEI filed the emails in EPA’s Endangerment Docket, and demanded that EPA produce the full report, extend the time for public comment, and pledge to take no reprisals against the analyst.  EPA’s press people went into spin mode, but as of Friday had not produced the final report.  Late Thursday night, CEI went ahead and posted a draft version of the document, which you can read here.

To read media accounts of the memo, click on the following links: New York Times, San Francisco Examiner, Michelle Malkin, Dow Jones (Subscription Req’d), American Spectator, and National Review

Today, National Public Radio held a pep rally for the Waxman-Markey climate change bill, which narrowly passed the House last night, with Paul Krugman as head cheerleader. No critic of the bill was interviewed.

Krugman started out with a brief explanation of the bill. He acknowledged that it would bear some costs, and that some industries and parts of the country that rely on coal “are going to be hurt… somewhat.” He repeated the Democrat talking point that the Congressional Budget Office (CBO) estimated the cost of the bill for the average household would be around$175 “a postage stamp a day.” (Never mind that people are buying fewer stamps because of email; let’s make them spend that money, anyway — for nothing.)

Then NPR host Guy Raz asked Krugman to comment on bill cosponsor Rep. Henry Waxman’s claim that his bill would create jobs. Krugman said:

There will be more wind farms built. There will be people retrofitting power plants to reduce their emissions. There will be people weatherproofing housing and commercial buildings.”

What economists would say is that employment would be just about the same as it would have been otherwise, but it will be a different mix of jobs. [Emphasis added]

That is not job creation, that is a transfer of wealth from a politically disfavored group of industries to a politically favored one. Notice the nebulous reference to “economists.” To which ones is Krugman referring to? Isn’t he one?

Now, back to that $175 per year figure that the bill’s supporters like to bandy about. They love that postage-stamp-a-day comparison so much that I thought it would be a good idea to come up with some of my own. For an average household, that $175 would also amount to:

• An additional month of utilities;
• One less plane ticket to visit family or go on vacation; or
• One payment on a cheap used car

Other similar comparisons are welcome, so please post in the comments below.

Beacon Hill Institute has apparently shifted into overdrive this week. This is posted today:

Cutting CO2 emissions by 83% over four decades – as proposed in the Waxman-Markey Discussion draft – might appear to be an easy goal, but the results indicate otherwise. The first point to note is that such cutbacks, whether done by the U.S. alone or in concert with others, would all be more expensive than doing nothing at all.

If the United States were to cut emissions alone, with no cutbacks (relative to trend) by other countries, it would bear the full cost of abatement (PV = $3.85 trillion) while reaping only about $0.27 trillion in benefits. This represents a net cost, relative to doing nothing, of $3.42 trillion. It would cost the United States $154 billion by 2020 and $1.318 trillion by 2050.

By 2045, the tax on carbon would need to rise to $714 per metric ton of carbon (equivalent to $195 per metric ton of CO2) to induce consumers to make the necessary cutbacks; from Table 1 we see that this would add $1.73/gallon to the cost of gasoline (in 2005 dollars) and 6.7 to 14.9 cents to a kWh of electricity – essential doubling the retail price of electricity.

The benefits are modest because by 2050 the U.S. would account for less than a sixth of world emissions of CO2; reducing U.S. emissions by 83% (relative to the 2005 level) by then would cut global emissions by just 11%, which would have a modest effect on climate, moderating the increase in global temperature by 2100 from 3.30ºC (the baseline no-controls case) to 3.12º.

Beacon Hill has also done some state-by-state analysis, which can be reviewed at their Web site.

Today, the World Trade Organization, together with the UN Environment Programme posted a report on trade and climate change that outlines how carbon border taxes may be consistent with WTO rules. It is a very careful discussion of relevant articles, their intent and interpretation, and related WTO cases (though no case has specifically dealt with climate change).

In some cases, the WTO-UNEP discussion reads like “on the one hand, and on the other.” The report is bound to provide environmental groups with ammunition to argue that CO2 border taxes are WTO-compliant. However, the issues and their legal precedents are not that clear-cut. What’s more likely is that the introduction of border taxes or similar measures will open up a flood of retaliatory actions and disputes.

Here’s a summary from the report of the relevant GATT and WTO rules:

If a particular measure is inconsistent with one of the core provisions of the GATT (e.g. Articles I, III or XI), it could still be justified under Article XX. Article XX lays out a number of specific instances in which WTO members may be exempted from GATT rules. Two exceptions are of particular relevance to the protection of the environment: paragraphs (b) and (g) of Article XX. According to these two paragraphs, WTO members may adopt policy measures that are inconsistent with GATT disciplines, but necessary to protect human, animal or plant life or health (paragraph (b)), or relating to the conservation of exhaustible natural resources (paragraph (g)).

The report was issued just as the U.S. House of Representatives was to begin consideration of the Waxman-Markey energy bill, which, according to Inside Trade (subscription required), will include a Ways and Means Manager’s Amendment with provisions for carbon border adjustments to address competitive and so-called leakage issues.

The alliance between organized labor and leftist environmentalists remains as strong as ever. As Carter Wood at Shopfloor.org notes, the Waxman-Markey climate change bill is a great example of this alliance.

The Beacon Hill Institute, which has analyzed several studies of greenhouse gas emissions caps by global warming alarmists in the states, and also conducted a cost-benefit analysis of the Western Climate Initiative, has today released its look at three green jobs studies (PDF). These expert economists reviewed previous studies by the United Nations Environment Programme (never trust anything produced by a program that adds “m-e” on the end — sure to be European), the Center for American Progress, and the U.S. Conference of Mayors. BHI found, in part:

“Contrary to the claims made in these studies, we found that the green job initiatives reviewed in each actually causes greater harm than good to the American economy and will cause growth to slow,” reported Paul Bachman, Director of Research at the Beacon Hill Institute, one of the report’s authors….

The authors of the BHI critique identified a fundamental error in each of these studies, specifically “counting the creation of a green job as a benefit and rationale for its proposed program in and of itself.”

The BHI study also stresses that “Jobs ? green or otherwise ? are not benefits but are instead costs. If the green job is a net benefit it has to be because the value the job produces for consumers is greater than the cost of performing the job. This argument is never made in any of these three green jobs studies.”

The executive director of the Beacon Hill Institute and co-author, David G. Tuerck, went further, noting that “these studies are based on arbitrary assumptions and use faulty methodologies to create an unreliable forecast for the future of green jobs.”

BHI also did a case study of the effect of a cap-and-trade emissions reduction on the states — examining Indiana — and found that “previous reports did not take increased energy costs from a ‘cap and trade’ system into consideration when looking at job creation. In that case, BHI developed a computable general equilibrium (CGE) model and found that contrary to previous studies, Indiana would lose more than 18,000 jobs in 2009, up to nearly 29,000 job losses in 2011, and that real disposable income would be cut by nearly $1 billion in 2009 and close to $1.5 billion in 2011.”

Congressmen on the fence are likely inundated by the data and studies by now — will it overcome the Pelosi/Obama political arm-twisting? We’ll likely know tomorrow.