Julie Walsh

Paulson on Energy Rationing

by Julie Walsh on January 15, 2009

in Blog

Secretary of the Treasury Henry Paulson took time out of his busy schedule wasting 700 billion dollars of taxpayer money (and thereby turning a credit crisis into a depression) to speak at Resources for the Future on Monday afternoon on the subject of how markets can address climate change and other environmental problems. What he meant of course is, how can markets be manipulated by government to achieve outcomes desired by government? He looked somber and did not laugh or smile at the pleasantries made when he was being introduced, but he didn’t look exhausted, worried, or baffled, either. I guess spending other people’s money, even when getting so little for such stupendous amounts, is always fun.

Despite good questions from RFF President Phil Sharp, Paulson spoke in generalities and didn’t give anything away. He did say that the science on global warming was clear and overwhelming. Paulson defended President Bush’s record and said that he didn’t think the president had gotten credit for changing the global debate on what to do about global warming in three important ways. First, Bush had convinced the world that any actions to reduce emissions must involve all major emitting nations and not just the developed nations. Second, he had convinced people that developing new technologies was the key to reducing emissions. And third, Bush had emphasized the role of trade.

Paulson said that Treasury would play a key role in developing climate policies because the critical thing was getting the price signal right, which was something Treasury knew about. He commended Billy Pizer, whom Paulson hired away from RFF and who was in the audience, and the team Pizer has assembled at Treasury on their work designing possible regulatory regimes to constrain carbon dioxide emissions. He added that the work Pizer and crew had done meant that the next administration would be much better prepared to take action than he had been.

Getting the price signal right–that is, raising energy prices just the right amount–will give companies the incentive they need to develop the new energy technologies that were needed, according to Paulson. But although he was a leading promoter of cap-and trade while heading Goldman Sachs, Paulson would not say whether he preferred a carbon tax or cap-and-trade. If it’s done right, the effect of cap-and-trade will be indistinguishable from a carbon tax. The choice would be up to the next administration and Congress. Whether the price signal is conveyed through a tax or a cap-and-trade program, Paulson said that price increases must be gradual and incremental and predictable, so that companies would know what they needed to do.

As for those new technologies, Paulson said that while he had learned from his time in Washington that many problems were intractable because the politics were so complex, he had found one bright spot. The scientists at the Department of Energy had convinced him that the technological breakthroughs needed to solve our energy and climate problems had already been made or were on the verge of being made.

It struck me as odd that Paulson talked about the price signal providing an incentive to develop new technologies without referring to the experience of the European Union’s Emissions Trading Scheme. There, although the costs to consumers are apparent, it appears that companies are too busy scrambling to round up enough rationing coupons to meet this year’s quota to spend any time developing breakthrough technologies.

Paulson noted that countries would not be willing to take action to reduce emissions (that is, raise energy prices and thereby reduce economic growth) unless there was sustained economic growth. He did not see and therefore did not address the conundrum he had created. It is a common blind spot among the energy rationers.

Questions from the audience had to be written on cards, which were then culled by Ray Kopp of RFF. I was surprised that my question was not selected. I did note in parenthesis at the bottom of the card under my name and affiliation that CEI was proud that we had opposed his confirmation, but my question was friendly: I asked whether he thought the purpose of cap-and-trade was not reducing emissions but rather transferring wealth to special interests such as investment bankers acting as middlemen in the trading of rationing coupons.

Paulson’s most interesting answer was in reply to a question about how he planned to be involved in environmental issues after he left office next week. He said that he would give some thought to it before deciding what he was going to do next and then added that his various involvements with conservation organizations had all been at the urging of his wife, Wendy, who was in the audience, and that his next steps would be taken with her guidance as well. When Paulson was chairman of Goldman Sachs, he also served as chairman of the Nature Conservancy, one of the world’s most sinister organizations.

Holdren’s Hysterical Quotes

by Julie Walsh on December 19, 2008

San Francisco Chronicle (CA)
Copyright 2007 San Francisco Chronicle
February 15, 2007
Section: NEWS
Climate change prime topic at science summit
David Perlman

The meeting's theme is "Science and Technology for Sustainable Well-Being." John Holdren, the association's president, said Wednesday that the greatest threat to the Earth's well-being is increasingly rapid global climate change.

The evidence for dangerously climbing temperatures is "absolutely stunning," Holdren said in a discussion with The Chronicle's editorial board. He cited such phenomena as the damage now caused worldwide by floods and wildfires, the spread of malaria in the tropics where mosquito populations are increasing, and the rapid melting of permafrost in the Arctic tundra as well as the swiftly increasing loss of ice in both polar regions of the globe.

He noted that virtually all climate scientists agree that global temperatures are rising, and that the major cause is increased greenhouse gases

— largely from the burning of fossil fuels.

The world's most urgent need, he said, is "a massive effort to slow the pace of global climatic disruption before intolerable consequences become inevitable."

The scientific community can certainly help develop new technologies to cope with the problems, he said, but with the pace of climate change increasing so rapidly, "we've only got about a decade to get things right."

New Statesman
Copyright 2006 New Statesman Ltd.
September 11, 2006
Drax and Today-I really must protest
Lynas, Mark

Then, ten minutes after the second Drax interview, the BBC's environment correspondent, Roger Harrabin, was sitting down with John Holdren, the eminent president of the American Association for the Advancement of Science, and discussing global warming. Holdren put it bluntly: "We are already experiencing dangerous human disruption of the global climate." To continue to ignore the problem would, he suggested, be "flirting with catastrophe", given that carbon-dioxide levels in the atmosphere have already "passed the safe level".

Sunday Times (UK)
Copyright 2006 The Sunday Times
September 3, 2006
Section: Features
The war on hot air;Focus
Jonathan Leake

Only last week, John Holdren, new president of the American Association for the Advancement of Science, suggested that global sea levels could rise 13ft by the end of this century -much higher than previous forecasts.

Boston Globe (MA)
Copyright 2008 Globe Newspaper Company
April 22, 2008
Section: Op-Ed
Get real on global warming goals

 If we want to improve our chances of averting this century the extinction of 50 percent of the species or dramatic drops in grain yields or devastating sea level rises, we have to get worldwide CO2 emissions to start a real decline as fast as possible. Scientist Jim Hansen says that if we wait until 2018 to "stop the growth of greenhouse gas emissions" then we have close to no chance of avoiding catastrophic effects. Scientist John Holdren tells us that if we plateau in 2015, our chances of averting these catastrophic effects are down to 50 percent.

St. Paul Pioneer Press (MN)
Copyright 2007 Saint Paul Pioneer Press
November 11, 2007
Christopher Martin, Bloomberg News

 "Coal is by far the cheapest fuel because there's no price on how much damage it causes," said John Holdren, a Harvard University professor of environmental science and director of the Woods Hole Research Center in Falmouth, Massachusetts.

The Amazonians speak out

by Julie Walsh on December 5, 2008

I wrote recently of California’s declaration to allow tropical forestry carbon offsets so that California businesses wouldn’t  have to actually reduce their emissions, but I suggested that guilt-laden Californians could  be doing more harm than good. The countries where they will supposedly be investing in forests have proven records for corruption.

I now feel vindicated. Reuters Africa reports that yesterday at the EU climate talks:

Brazil ruled out on Thursday letting rich countries offset their greenhouse gas emissions by helping to save the Amazon rain forest, an idea under active discussion by the European Union.

Indigenous peoples attending United Nations-led climate talks in Poznan protested that they had no chance of seeing such carbon cash, and appealed instead for money first to root out corruption and cement their land rights…

Some indigenous peoples groups oppose a carbon market approach until their tenure rights are made secure, fearing the lure of billions of dollars may trigger a land grab instead.

I guess they don’t want Nature Conservancy et al buying up their lands and profiting the corrupt in their countries.

Waxman’s Lunch

by Julie Walsh on November 21, 2008

The House Democratic Caucus voted yesterday to replace Rep. John Dingell (D-Mich.) with Rep. Henry Waxman (D-Calif.) as Chairman of the Energy and Commerce Committee. This should provide a loud wake-up call to American business leaders that the 111th Congress is not going to play nicely with them on energy rationing policies.  I hope that those who have counseled that “if you’re not at the table, you’re on the menu,” will now realize that they are on the menu and they’d better get as far away from the table as quickly as they can.  The cap-and-trade bill that Chairman Dingell proposed this fall would dramatically raise energy prices for American consumers and producers. Chairman Waxman, who represents Beverly Hills, introduced a cap-and-trade bill in this Congress that would send us back to the Stone Age.    

Blood Forests

by Julie Walsh on November 18, 2008

"Building on (California's) success in forming de facto treaties with international entities, Schwarzenegger will sign a declaration with Indonesia and Brazil to develop efforts to reduce emissions from deforestation. The agreement could make it cheaper for California businesses to achieve emissions reductions by allowing them to invest in afforestation projects abroad," according to E and E today.

But the guilt-laden Californians will be doing more harm than good. The countries where they will supposedly be investing in forests have proven records for corruption. Brazil tied with China and India on the 2006 Transparency International Perceptions of Corruption Index. And Indonesia tied with that paragon of virtue, Russia, at number 143.

Who will really profit from the boatloads of money California sends these countries?

Reality hits Gore’s world

by Julie Walsh on November 11, 2008

Juxtapose this from the Washington Post

Gore envisions a nationwide “Smart Grid”–a massive underground network of electrical power lines that would be powered by massive solar panel installations in the Southwest, and huge wind turbine installations in the Pacific Northwest. The Smart grid would dole out power and regulate itself using 21 Century computer technology, Gore said. Gore said such a system would cost $600 billion to build, but that it would pay for itself quickly.

With this from E and E–

California’s bold bid to boost renewable energy use to 33 percent of total power generation over the next decade would cost the state $60 billion between 2012 and 2020, according to a new analysis by the state’s Public Utilities Commission. The PUC’s report, which was released Friday, found that a 33 percent renewable portfolio standard (RPS) would require construction of 70,000 gigawatt-hours of new generation powered by renewable sources by 2020, in addition to seven major new power lines at a cost of $6.4 billion. This means a drain on a state Treasury already running a $15 billion deficit.

Besides the new transmission line costs to build, neither of these articles mention how much solar and wind energy costs compared to that from coal, which a Cato study elaborates:

According to analysis by Tufts economist Gilbert Metcalf, stripping out the subsidies, the regulatory distortions and the taxes, the “levelized cost” of building a new conventional coal-fired power plant (that is, the cost associated with building the plant and buying coal over the lifetime of the plant divided by the energy output that one might expect from the facility over its lifetime) works out to cost 3.10 cents per kWh to build. By means of comparison:

• a new clean coal plant costs 3.53 cents per kWh,

• a nuclear power plant costs 4.57 cents per kWh,

• a wind power plant costs 4.95 cents per kWh,

• a biomass-fired power plant costs 4.96 cents per kWh,

• a natural gas power plant costs 5.29 cents per kWh,

• a solar thermal power plant costs 13.84 cents per kWh, and

• a solar photovoltaic power plant costs 26.64 cents per kWh.

That Mr Gore is the real world.

(This is laugh out loud material–note the GISS temperature anomalies from Russia for 2008 in the chart below! –Julie)

From Watts Up with That

October 2008 “warmest” October on record (according to GISS)
2005 temperature revised upward

Update: Thanks to an email from John S. – a patron of climateaudit.org – we have learned that the Russian data in NOAA’s GHCN v2.mean dataset is corrupted. For most (if not all) stations in Russia, the September data has been replicated as October data, artificially raising the October temperature many degrees. The data from NOAA is used by GISS to calculate the global temperature. Thus the record-setting anomaly for October 2008 is invalid and we await the highly-publicised corrections from NOAA and GISS.

GISS (Goddard Institute of Space Studies) Surface Temperature Analysis (GISSTemp) released their monthly global temperature anomaly data for October 2008. Following is the monthly global ?T from January to October 2008:

Year J  F  M  A  M  J  J  A  S  O
2007 85 61 59 64 55 53 53 56 50 54
2008 14 25 62 36 40 32 52 39 50 78

Here is a plot of the GISSTemp monthly anomaly since January 1979 (keeping in line with the time period displayed for UAH). I have added a simple 12-month moving average displayed in red.


The addition of October has changed some of the temperatures for earlier months:

GISS 2008   J  F  M  A  M  J  J  A  S  O
As of 9/08  14 25 62 36 40 29 53 50 49 ..
As of 10/08 14 25 62 36 40 32 52 39 50 78

The 0.78 C anomaly in October is the largest ever for October, and one of the largest anomalies ever recorded. Although North America was cooler than normal, Asia apparently suffered from a massive heat wave.

Also, after several months of being downgraded to a 0.61 C anomaly, 2005 has been lifted back to 0.62 C.

The Regulatory President

by Julie Walsh on November 11, 2008

Why bother getting elected officials’ votes when you can accomplish your purposes by presidential fiat?

An article in yesterday’s Washington Post reveals just what the future will look like under the new president.

The president-elect has said, for example, that he intends to quickly reverse the Bush administration’s decision last December to deny California the authority to regulate carbon dioxide emissions from automobiles…California had sought permission from the [2] Environmental Protection Agency to require that greenhouse gas emissions from vehicles be cut by 30 percent between 2009 and 2016, effectively mandating that cars achieve a fuel economy standard of at least 36 miles per gallon within eight years. Seventeen other states had promised to adopt California’s rules, representing in total 45 percent of the nation’s automobile market.

Since twenty-one percent of new cars are sold in California, this means that the auto makers would need to spend billions of dollars to comply. According to the WSJ, “The auto industry is the nation’s largest manufacturing sector, accounting for almost 4% of U.S. gross domestic product. It employs about 2.5 million people directly or indirectly, and spends tens of billions of dollars a year in research and development.” Yet granting California’s waiver would certainly significantly harm if not sink this industry, since actions to increase the CAFE standard in the past have [4] caused many of the problems Detroit is now having.

[click to continue…]

Richard Courtney provides an excellent refutation of the Intergovernmental Panel on Climate Change’s breathless claim—“Current warming sharpest climate change in 5,000 years.”

A key – and blatantly misleading – statement in the Summary for Policymakers (SPM) of AR4 says; “The linear warming trend over the last 50 years is nearly twice that for the last 100 years”. But this statement was not in the drafts provided for peer review. It was inserted into the final draft of the report and that final draft was only submitted to government representatives for comment…(Also, the IPCC’s non-peer reviewed) published graph (Page 104 on this link) shows the slope over the last 25 years is significantly greater than that of the last 50 years, which in turn is greater than the slope over 100 years. This is said to show that global warming is accelerating….Thus, policymakers who only look at the numbers (and don’t think about the different timescales) will be misled into thinking that global warming is accelerating. Of course, the IPCC could have started near the left hand end of the graph and thus obtained the opposite conclusion!  In case this is not obvious, I provide the following graph that does it together with an explanation of the presentation of the data. (Parentheses added)

Ha! So using the IPCC’s misleading shifting of time scales, one could also say that the linear warming trend over the first 50 years of the twentieth century is nearly twice that for the whole century, too!