Cooler Heads Digest 18 September 2009

by William Yeatman on September 24, 2009

in Cooler Heads Digest

In the News

The Truth About the Treasury Trove
Chris Horner, Planet Gore, 17 September 2009

Climate Change and National Security Part 1, Part 2
Marlo Lewis,, 16 September 2009

Fantasizing about a Low Carbon Future
Myron Ebell,, 15 September 2009

Newsweek’s Begley Flunks Calculus, Science and Politics
Joseph D’Aleo,, 15 September 2009

Something’s Rotten
Chris Horner, Planet Gore, 15 September 2009

Allies Abandon U.S. at Climate Confab
John Zaracostas, Washington Times, 15 September 2009

When It Comes to Pollution, Less (Kids) May Be More
David A. Fahrenthold, Washington Post, 15 September 2009

Beware Cap-and-Trade
Senator James Inhofe, Clean Skies, 14 September 2009

Carbon Market Hit as UN Suspends Clean Energy Auditor
Danny Fortson, The Sunday Times, 13 September 2009

News You Can Use

The Obama administration concedes that the economic costs of a cap-and-trade “are equal in scale to all existing environmental regulations,” according to Treasury Department documents uncovered by the Competitive Enterprise Institute’s Chris Horner with a Freedom of Information Act request.

Inside the Beltway

Myron Ebell

Can We All Agree Now? It’s Gonna Cost a Bundle

The big news this week is furnished by my colleague at CEI, Chris Horner, who released some interesting documents he obtained through a Freedom of Information Act request from the Treasury Department.  Chris’s initial blog post was picked up first by Amanda Carpenter in the Washington Times and then by Declan McCullough at  There has been a flurry of stories since then, most of them trying to explain why it isn’t really a news story.  (I wish more reporters spent more time explaining why what they are writing can be safely skipped.  It would save a lot of time.)

It turns out that a busy team of economists hired by Bush Treasury Secretary Henry Paulson to devise a better cap-and-trade program were fully aware that it would be very costly for consumers.  Treasury’s upper end estimate works out to $1761 for the average household per year.

That’s in line with what President Obama said when he was running for President (“Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”), but a lot less than what EPA and the White House have been saying about the Waxman-Markey bill.

quick to point out that Treasury’s $1761 estimate couldn’t possibly apply to the Waxman-Markey bill that passed the House in June on a 219-212 vote because, first, Waxman-Markey didn’t exist when Treasury was making its estimate and, second, Treasury assumed that all the ration coupons would be auctioned whereas Waxman-Markey gives most of the coupons away to big business special interests in the early years of the program.

That argument is specious.  As Peter Orszag, now director of the White House Office of Management and Budget, explained in congressional testimony last year when he was head of the Congressional Budget Office: “Under a cap-and-trade program, firms would not ultimately bear most of the costs of the allowances, but instead would pass them along to their customers in the form of higher prices. Such price increases would stem from the restriction on emissions and would occur regardless of whether the government sold emission allowances or gave them away. Indeed, the price increases would be essential to the success of a cap-and-trade program….”

The most interesting thing about the documents Chris obtained from Treasury are the bits that are redacted.  For example, a paragraph headed Overview says: “[I]t will raise energy prices and impose annual costs on the order of [rest of sentence is blacked out].”  Perhaps the folks in the FOIA Compliance Office at Treasury didn’t get the January 21st memo from President Obama on increasing transparency in his administration.  The memo says in part: “The Freedom of Information Act should be administered with a clear presumption: In the face of doubt, openness prevails. The Government should not keep information confidential merely because public officials might be embarrassed by disclosure, because errors and failures might be revealed, or because of speculative or abstract fears. Nondisclosure should never be based on an effort to protect the personal interests of Government officials at the expense of those they are supposed to serve.”

MPG Madness

The Obama Administration proposed new rules on Tuesday to increase vehicle fuel mileage by nearly 40% by 2016.  The anti-energy bill passed by the Democratic-controlled Congress and signed into law by Republican President George W. Bush in 2007 required automakers to reach an average of 35 miles per gallon by 2020, but the Obama Administration has moved that target up four years.

The 1227-page rule will be open for public comment for sixty days.  It is supposed to harmonize federal standards with the tougher ones first adopted by California in 2004 and then by a number of other States.  However, officials in California have already talked about adopting more stringent standards in order to force the federal government to follow.

The U. S. Chamber and the National Automobile Dealers Association have filed suit in the D. C. Circuit to overturn the California waiver on the grounds that legally waivers can only be granted to California to address local air pollution problems, whereas global warming is a global problem.

The new mileage standards apply to cars and light trucks, which category includes SUVs and pickups.  The Administration estimates that it will raise new car prices by an average of $1,100, but save an average of $3,000 in gasoline over the life of the vehicle.  These average estimates may be accurate, but conceal the fact that prices for bigger vehicles are going to have to go up a lot because manufacturers won’t be able to make the 35 mpg standard if they sell very many of them.

Carbon Dioxide, A “Pollutant”

There are more major rules on the way.  It is rumored that the endangerment finding will be finalized by the end of October.  On April 16, EPA Administrator Lisa Jackson announced the finding that greenhouse gas emissions endanger public health and welfare and therefore must be regulated under the Clean Air Act.  More than twenty-thousand public comments were filed, so EPA has been working overtime if they are going to be able to finalize the rule so quickly.

Another rule covering non-highway mobile sources of emissions is reportedly going to follow soon after the car and light truck rule.  That should make construction companies, off-road vehicle users, and snowmobilers happy.

Robin Bravender and Noelle Straub reported in Friday’s Energy and Environment Daily that Senator Lisa Murkowski (R-Alaska) is considering offering an amendment that would block EPA from using the Clean Air Act to regulate stationary sources of greenhouse gas emissions.  If enacted as part of the Interior (and other agencies) appropriations bill currently being debated on the Senate floor, EPA would be prevented from regulating stationary sources (such as coal and gas power plants) during the 2010 fiscal year, which begins October 1st.  EPA’s planned regulations of new vehicles would not be affected.

Across the States

New York Green Jobs Bill for ACORN

This week New York Governor David Patterson signed “Green Jobs, Green New York,” legislation that would leverage $100 million in revenue from a regional cap-and-trade energy rationing scheme into $5 billion worth of guaranteed loans for weatherization projects conducted by partisan activist groups, including the disgraced ACORN, which was exposed recently for having facilitated the establishment of underage brothels with public money. Sounds like a risky loan.

California Adopts Yet Another Anti-Energy Mandate

California Governor Arnold Schwarzenegger this week vetoed SB 14, legislation that would have mandated that California utilities use renewable energy for 33% of electricity sold by 2020. While Schwarzenegger supports the 2020 renewable energy standard, he objected to language in the bill that restricts energy imports. Schwarzenegger instead issued an executive order to reach the same target with fewer restrictions on interstate trade. A recent study by the California Public Utilities Commission estimates that achieving the 33% renewable energy mandate would raise utility bills more than 20%. California already has the some of the highest rates for electricity in the country, due to 30 years of anti-energy policies.

Around the World


Last week the Cooler Heads Digest reported that all signs point to failure at the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change this December in Copenhagen, where international policymakers hope to agree on a global warming treaty to succeed the failed Kyoto Protocol.

The dismal outlook for success in Copenhagen actually worsened this week. President Barack Obama had hoped that the U.S. Senate-which would have to ratify any treaty-would pass legislation before Copenhagen. But Senate Majority Leader Harry Reid (D-Nev.) this week told reporters that the U.S. Senate isn’t likely to address climate legislation until 2010. The Senate’s inaction makes it difficult for the Obama administration to commit to binding emissions targets at COP 15.

And Yvo de Boer, the chairman of the United Nations Framework Convention on Climate Change, all but conceded failure in Copenhagen by ruling out a “comprehensive” treaty.

India Leads the Way

Jairam Ramesh, the Indian Environment Minister, announced this week that India will adopt greenhouse gas emissions targets.  The government plans to introduce legislation in parliament to set numerical goals for future emissions that will allow future economic growth of 8 to 9% annually.  The new targets will be voluntary.  It also appears that meeting the targets will still depend on transferring tens of billions of dollars a year from developed economies.   Although it has been suggested that this puts pressure on the United States, the European Union, and Japan to agree to a new treaty in Copenhagen at COP-15 in December, it could also be argued that India is leading the way for other nations to adopt voluntary targets and timetables.

Comments on this entry are closed.

Previous post:

Next post: