April 2013

It may not be a popular fact, but a fact it is: the environment is getting cleaner, and it has since about the mid-20th century. The question is, what caused this improvement? How can we keep it going? Over at Topix.com, my colleague Geoffrey McLatchey and I argue that the best answer for both questions is wealth creation:

Economic growth and environmental quality are not opposing values. They go hand-in-hand. Something happens to a country when its per capita GDP reaches about $5,000 (U.S. per capita GDP is about $48,000). At that point, families are certainly not rich. But they don’t have to worry as much about where their next meal will come from. They can afford to begin to take care of other needs, such as building sewage systems and other pollution-reducing infrastructure. Instead of using wood for heating and cooking, people can turn to more efficient fossil fuels, which means less deforestation. Farmers can afford to adopt modern techniques that produce more food with less land, leaving more left over for wildlife.

That’s the good news. The even better news is that greater progress is on the horizon. The number of people living in absolute poverty halved between 1990 and 2010, and the number continues to dwindle. Remarkably, this is happening even as global population increases. As more countries pass the $5,000-per capita benchmark, ecosystems around the world will benefit.

Read the whole thing here. Even if people do concede to the data and admit that the world’s environmental situation isn’t doom-and-gloom, they often give credit to the EPA. A glance at my recent EPA report card will hopefully disabuse people of that notion. Innovation, not regulation, is what will keep the environment healthy. That’s the lesson people should take from Earth Day.

Fisker Automotive, an electric car manufacturer that received $211 million in stimulus subsidies, last week filed for bankruptcy. A Fisker electric car cost $103,000, but the company spent $660,000 for each one it sold, according to Bloomberg. Chrysler CEO Sergei Marchionne told the Detroit Free Press that losing $557,000 on every case it sold would be “masochism to the extreme.” He then said that his company is only losing $10,000 on every battery powered Fiat 500 it sells. Presumably, Chrysler makes it up on volume.

Senator David Vitter (R-La.), ranking Republican on the Environment and Public Works Committee, sent a letter on 16th April to Gina McCarthy, Assistant Administrator for Air and Radiation at the Environmental Protection Agency, that re-iterates five requests for information that the agency has withheld from the committee or commitments to increase transparency in the future. The letter, which was signed by all eight Republican members of the committee, in effect sets down a marker for McCarthy’s confirmation as EPA Administrator by the Senate.  If McCarthy fails to satisfy the five requests, then the Republicans on the committee will have good reason to vote against her confirmation.

Committee Chairman Barbara Boxer (D-Calif.) said this week that the committee could vote as early next week on McCarthy’s nomination.  That now seems unlikely.  It’s more likely that the committee will vote soon after the Senate returns from a week-long recess on 6th May.

The letter states, “…[W]hile you acknowledged serious problems with EPA’s transparency record, acknowledgement does not equal action.  We want to hold you to your word and ensure that EPA will be fully transparent on the science, economics, and negotiations related to EPA decisions and rulemaking.  For too long, EPA has failed to deliver on the promises of transparency espoused by President Barack Obama, former Administrator Lisa Jackson, and by you.”

The first request is that McCarthy commits the EPA to issue new guidance requiring that all official business be conducted through official e-mail accounts.  The second is that McCarthy turn over to the committee unredacted private e-mails that were used to conduct official business.  These two requests arise out of the “Richard Windsor” scandal.

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I’ve long argued that the European Union’s climate policy is full of sound and fury, but signifies nothing. During the last 20 years, EU officials have been quick to blather about their supposed leadership on climate, based on a putative “success” reducing greenhouse gas emissions. But this has always been a mirage. In fact, EU emissions reductions since its adoption of the Kyoto Protocol have been largely derivative of unintended consequences stemming from three events that have nothing to do with climate mitigation policy. They are: (1) the shutdown of Soviet-bloc heavy industry; (2) the United Kingdom’s “dash to gas”; and (3) the Great Recession.

Meanwhile, EU’s actual climate policies have been ongoing failures. Take the EU’s goal of improving energy efficiency 9% by 2016 and 20% by 2020. Ex-EU bureaucrat whistleblowers recently told EUractiv that EU member states have relied on “tricks and abuses” to create the appearance that they are on track to achieve the targets. In January, the European Court of Auditors published a scathing audit of how EU member states spent almost $6.6 billion in subsidies to achieve the energy efficiency targets. From the press release:

“None of the projects we looked at had a needs assessment or even an analysis of the energy savings potential in relation to investments”, said Harald Wögerbauer, the ECA member responsible for the report, “The Member States were essentially using this money to refurbish public buildings while energy efficiency was, at best, a secondary concern.”

In order to better control the earth’s thermostat, the EU also has implemented a Soviet-style, green energy production quota of 20% by 2020. While member states have spent billions of dollars of taxpayer subsidies in order to support the EU’s green energy goals, the EU Commission in late March warned that, “There are reasons for concern about future progress; the transposition of the directive [the green energy production quota] has been slower than wished, also due to the current economic crisis in Europe.” In layman’s terms, this means that a lot of European countries spent a lot of money on expensive, green energy during the boom-time 2000s. But the boom has since gone bust, and these countries are now reducing unsustainable green energy subsidies. Because the green energy industry cannot compete without ever-more generous taxpayer give-aways, EU bureaucrats are justifiably concerned that their green energy production quota won’t be met.

But the EU’s biggest joke of a climate policy—by far—has been the Emissions Trading Scheme, a cap-and-trade. It’s actually failed twice. During its first phase, the over allocation of carbon rationing coupons led to windfall profits for utilities, but no actual emissions reductions, as the carbon price plummeted. This week, during its phase three, the Emissions Trading Scheme collapsed again, and this time, it appears to be down for good. According to an article from yesterday’s EUractiv,

The EU’s flagship scheme for cutting carbon emissions suffered one of the most serious setbacks in its chequered history on Tuesday (16 April), when MEPs voted against a proposal to shore up the price of carbon in the Emissions Trading System (ETS).

The proposed reform – known as “backloading” – aimed to reverse the plummeting price of carbon that has resulted from a surplus of permits in the ETS market. If successful, the reform would have resulted in the postponement of a series of auctions of carbon permits.

But MEPs in Strasbourg voted 334 against the reform, with 315 in favour, leading green campaigners to condemn the defeat as a “monumental failure” to mend the carbon trading market, which is Europe’s flagship climate policy and the biggest in the world. “They have lost all credibility on climate leadership,” said Doug Parr, Greenpeace UK’s chief scientist.

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