April 2014

Walton Francis, formerly director of regulatory analysis at the Department of Health and Human Services, submitted a sharply critical comment letter to the Office of Management and Budget (OMB) on the Obama administration’s social cost of carbon (SCC) estimates.

Yes, I realize, this isn’t breaking news, but the SCC debate will be with us for years, and, as explained previously on this site, SCC analysis has become a menace to society.

SCC analysis is computer-aided sophistry. By “sophistry,” I mean what Socrates meant by it in Plato’s dialogues. Sophistry is sham wisdom raised to the level of a τέχνη (technê), the Greek word for art, craft, or trade.

The leading rap against the sophists in classical literature is that they “make the weaker argument [defeat/appear to be] the stronger.” That is, sophists use specious arguments to win in courts and public assemblies regardless of the merits of the case or issue in dispute. Turning common sense upside down, they make wrong look right and base look noble.

SCC analysis, similarly, uses sophisticated modeling to make renewable energy look like a bargain at any price and carbon energy look unaffordable no matter how cheap. OMB Circular A-4 on cost-benefit analysis admonishes agencies that “you cannot conduct a good regulatory analysis according to a formula.” SCC analysis is a license to regulate by formula. Grant the premise that carbon has a social cost, and presto, climate activists conclude that taxing and regulating away reliable, plentiful, affordable energy will make the economy more “efficient.” For further discussion, see the free market organizations’ comment letter to OMB on the social cost of carbon.

For those unfamiliar with this debate, the administration’s Interagency Working Group (IWG) has put out two technical support documents on the social cost of carbon (2010 TSD, 2013 TSD). The documents define the social cost of carbon as “an estimate of the monetized damages associated with an incremental increase in carbon dioxide [CO2] emissions in a given year.” Implicit in that definition is another one: The SCC “is the carbon tax that would be imposed by a benevolent social planner.”

The IWG’s 2013 SCC estimates stirred up controversy because they were roughly 60% higher than the 2010 estimates, yet nothing had happened either to the climate system or in climate science to warrant the revision. What did happen is the warming “pause” continued for another three years, the divergence between climate model projections and observed temperatures increased, and scientific research further discredited Al Gore’s doomsday scenarios.

With that as background, let’s review Francis’s comment letter.

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There exists an environmentalist strain of armchair psychology that dismisses the input of free-marketers on the issue of global warming, due their supposed affinity for conspiracy theories about runaway government. According to this line of reasoning, some “conservatives” are “individualists,” who innately reject global warming alarmism, because of an unfounded fear that mitigating climate change would endanger their civil liberties.

I’ve long dismissed this reasoning as self-serving propaganda. After all, what better way to de-legitimize your opponents than to call them kooks? It seemed to me like a cheap debate trick. Now, however, I’m not so sure. It’s not that I’ve joined the black helicopter crowd. Rather, evidence is mounting that environmentalists both prominent and plebeian are all-too willing to forsake my civil liberties in order to mitigate climate change, the supposed #1, end-all problem now facing mankind.

To wit, a group of Senators in January formed an ad hoc caucus of global warming alarmists and their first task was to pressure Sunday news programs on global warming coverage. To this end, nine Senators sent a letter to Fox News chief Roger Ailes, CBS News President David Rhodes, ABC News President Ben Sherwood and NBC News President Deborah Turness, deploring the paucity of coverage given to climate catastrophes. They concluded,

“We urge you to take action in the near term to correct this oversight and provide your viewers, the American public, with greater discussion of this important issue that impacts everyone on the planet.”

Not coincidentally, each network that received this letter ran a major climate change segment on its Sunday show within weeks.

Alas, these news nannies aren’t yet done. This week, one of the group, Sen. Sheldon Whitehouse, took to the floor of the floor of the world’s greatest deliberative body so as to bemoan the absence of coverage of the recent UN climate report by the cable news networks. No doubt, a strongly-worded letter “urging” the networks to “correct this oversight” is in the works.

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In which region of the world are plants most productive in photosynthesizing water and carbon dioxide into carbohydrates? If you guessed the tropical rain forest, you’d be wrong. The region with the highest gross primary production (GPP) from photosynthesis is the U.S. corn belt.

That is the finding of a new study (Guanter et al. 2014) published in Proceedings of the National Academy of Sciences (PNAS). The team of 20 researchers used satellite-based spectroscopy to monitor sun-induced chlorophyll fluorescence (SIF), an electromagnetic signal emitted as a byproduct of photosynthesis.

Global map of maximum monthly sun-induced chlorophyll fluorescence (SIF) per 0.5° grid box for 2009.

The results of the study really shouldn’t be surprising. The U.S. leads the world in combined private-public R&D spending on agriculture and is the world’s top corn producer and agricultural exporter. Nonetheless — and this too is not surprising — the corn belt GPP reflected in satellite SIF data substantially exceeds the GPP estimated in carbon cycle models. The researchers report:

Our SIF-based crop GPP estimates are 50–75% higher than results from state-of-the-art carbon cycle models over, for example, the US Corn Belt and the Indo-Gangetic Plain, implying that current models severely underestimate the role of management.

Perhaps to appease the political-correctness guardians at PNAS, the study begins with a warning that “past advances” in agriculture are “threatened by climate change,” and the authors say their research is significant because it provides benchmark data for “more reliable projections of climate impact on crop yields.”

Clearly, though, the finding is also significant for another reason. It doesn’t fit into the fear narrative promoted by the recently-released IPCC Working Group II (WG2) report on climate impacts. Current models “severely underestimate the role of management.” That suggests current models underestimate farmers’ ability to adapt to climate change. [click to continue…]

A new climate study, “Global warming and 21st century drought,” is making waves through the blogosphere. It’s the latest in “worse than we thought” gloom and doom narratives. Authors Benjamin I. Cook and colleagues at the Lamont-Doherty Earth Observatory find that warming will not only decrease precipitation in dry regions but also increase evaporation from soils, causing more drought than previously predicted.

So although the IPCC Working Group I report concluded that, in the 21st century, Atlantic Ocean circulation collapse is “very unlikely,” ice sheet collapse is “exceptionally unlikely,” and catastrophic release of methane from melting permafrost is “very unlikely,” we’re still on eve of destruction.

As summarized in the study’s press release, by 2100 drought could afflict 30% of the Earth’s surface, “crops could wither in multiple regions simultaneously,” and “food price shocks could become far more common.” These results are “consistent with” the latest IPCC report, which “also predicts a strong chance of soil moisture drying in the Mediterranean, southwestern United States and southern African regions.”

The Cook team’s study is “one of the first to use the latest climate simulations to model the effects of both changing rainfall and evaporation rates on future drought.” Well, climate models haven’t exactly performed brilliantly in replicating global temperatures, have they? What do actual climate data and climate history tell us about the relationship between warming and drought?

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Climate economist Richard Toll has a provocative op-ed in today’s Financial Times titled “Bogus prophesies of doom will not fix the climate.” Last week, Tol accused the IPCC of being too alarmist about global warming and asked to have his name withdrawn from its recently-released Working Group II report (WG2) on climate change impacts.

Public discourse on climate change would be much improved if every discussion — for example, Secy. of State John Kerry’s climate speech in Jakarta, Indonesia — began with a reading of Tol’s opening paragraph:

Humans are a tough and adaptable species. People live on the equator and in the Arctic, in the desert and in the rainforest. We survived ice ages with primitive technologies. The idea that climate change poses an existential threat to humankind is laughable.

Even if one accepts WG2’s estimate that a “further warming of 2°C could cause loses equivalent to 0.2-2 per cent of world gross domestic product,” that is “about as bad as losing one year of economic growth” in half a century, Tol notes. In contrast, since the start of the Eurozone financial crisis, the income of the average Greek has fallen more than 20%. “Climate change is not, then, the biggest problem facing humankind.”

After noting that climate change is not even the biggest environmental problem (indoor air pollution has killed 260 million people — more than all the wars of the 20th century combined, Bjorn Lomborg estimates), Tol points out that the best protection from climate-related risk is economic growth and the institutions that facilitate it:

Climate change will make the disease [malaria] worse. Economic growth will make it go away.

In the worst case, climate change could cut crop yields in Africa in half. Yet yields would increase tenfold — in the same climate, on the same soil — if subsistence farmers started using crops and techniques pioneered on experimental farms. Climate change may be a big issue in Africa. But it is not nearly as important as lack of tenure, poor roads, roving warlords and so on.

Tol agrees with the IPCC that “We cannot let the planet grow warmer and warmer,” but solving that problem must wait until “carbon neutral technologies saturate the market,” which “will take decades at least.”

I don’t share Tol’s faith in the ability of government-directed “adaptation and development” to “improve lives.” But his contention that the IPCC’s “prophecies of doom” are false and divert public attention and resources from more urgent threats is spot on.

Readers of this blog are no doubt up to speed with the revolution in drilling technology—collectively known as hydraulic fracturing, or “fracking”–that has unleashed an American energy boom. Thanks to fracking, U.S. oil production grew by a record 1.136 million barrels a day last year to 8.121 million barrels a day. Gas production has increased by even greater leaps and bounds, such that there is clamoring on Capitol Hill to facilitate gas exports as a strategic geopolitical asset.

North Dakota has been a locus of the U.S. energy renaissance. It is the home of the Bakken formation, one of North America’s largest oil-rich shale plays unlocked by fracking. The economic impact has been eye-popping. The State now proudly claims the nation’s lowest unemployment and a per-person gross domestic output significantly higher than the national average. Last week, the Department of Labor released statistics showing that the citizens of North Dakota enjoyed the fastest year over year increase in personal income at 7.6 percent. Current per capita income in North Dakota is $57,000, second only to Connecticut, and has increased by almost 50 percent since 2009.

To better understand how the domestic energy industry is at work in North Dakota, check out the great infographic below, “The Burgeoning Bakken,” from Hart Energy by way of the Unconventional Oil & Gas Center.

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Last week, the EIA published a little-noticed analysis estimating that up to 25 percent of the nation’s coal-fired power plant fleet could be forced to retire due to the EPA’s 2012 Mercury and Air Toxics Standards rule, also known as the “Utility MACT.” Above, I’ve re-posted a chart that summarizes EIA’s findings.

Needless to say, these are significant retirements. While it’s true that EPA performed a reliability analysis of its Utility MACT, the Agency’s work was shredded by analysts at the Federal Energy Regulatory Commission. Notably, many of the coal plants in the northeast that are slated for retirement were called into service during the unusually cold winter of 2013-2014. Had they not been available, electricity and heating costs would have “skyrocketed.” After 2015, these plants will be shut down permanently. For more, see this recent New York Times article, “Coal to the Rescue, But Maybe Not Next Winter.” And those electricity generating units that decide to comply with the utility MACT, rather than retire, will be on the hook for almost $10 billion in annual compliance costs through 2020. Taking into account these direct and indirect costs, this is one of the most expensive regulations, ever.

That’s a description of some of the costs of the Utility MACT. Now, let’s turn to the “benefits,” which I’ve summarized in the graphic below.

That’s no joke: The actual justification for the Utility MACT, one of the most expensive and consequential regulations of all time, is to protect a supposed population of pregnant subsistence fisherwomen, who consume hundreds of pounds of self-caught fish from exclusively the most polluted inland bodies of fresh water. Don’t take my word for it! Below, I’ve posted this “evidence” of harm, as presented by the EPA.

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