Marlo Lewis

In today’s E&E TV interview with Monica Trauzzi (http://www.eenews.net/tv/), UNFCCC Executive Secretary Yvo de Boer did not balk at Trauzzi’s statement that, “Senate Majority Leader Harry Reid has indicated that the Senate may not see floor action on climate until next year.” Nor did he bat an eye when she said that the Obama administration seems to have ”shifted to using the Clean Air Act to regulate emissions.” Like many observers, de Boer appears to have low expectations for the Waxman-Markey bill, at least for this year.

Nonetheless, de Boer spoke as if he expected President Obama to accomplish great things at Copenhagen climate conference in December: “From an international point of view, from the point of view of U.N. negotiations it’s not essential that this legislation be finalized, but that statement of political intent from the president — that’s the thing that really counts in the international arena.”

Oh really — like President Bill Clinton’s statement of political intent when he signed the Kyoto Protocol in November 1998? Clinton’s signature proved to be worth little from ”the point of view of U.N. negotiations,” because Clinton dared not submit the treaty to the U.S. Senate for a debate and vote on ratification.

The House passed Waxman-Markey by a razor thin (219-212) margin. In the Senate, proponents will need to find a three-fifths (60-vote) super-majority to defeat a GOP filibuster.  To ratify Kyoto II, Obama would need to assemble a two-thirds super-majority. In the Copenhagen round, the EU is pushing for tougher emission reduction targets than those in Waxman-Markey.

If President Obama, Sen. Reid, and Sen. Barbara Boxer (D-CA) prove unable to assemble 60 votes to pass Waxman-Markey in the Senate, what are the odds that they could line up 67 votes to ratify Kyoto II?

Mr. de Boer is mistaken. The fate of Waxman-Markey largely foreshadows and determines the fate of Kyoto II.

Last week, on the free-market energy blog MasterResource.Org, I posted a two-part column on climate change and national security. In a nutshell, I argued that global warming is likely not an important geopolitical or military “threat multiplier,” and that the national security risks of climate change policies likely outweigh those of climate change itself.

One of the great things about “publishing” on the Internet is that readers can quickly and easily share other insights and information the author had not considered.

Climate scientist and fellow blogger Chip Knappenberger called my attention to a remarkable essay in Nature magazine by Wendy Barnaby, editor of People & Science, the journal of the British Science Association — and to Chip’s review of Barnaby’s essay on WorldClimateReport.Com.

One of the principal ways climate change supposedly acts as a “threat multiplier” is to intensify drought and water shortages, leading to crop failure, famine, and armed conflict within and among nations. Barnaby had written a book about biological warfare, and the publishers suggested she write a book about the coming century of “water wars.” 

At the outset, she assumed that water scarcity is a signifcant source of armed conflict in the world – a pervasive problem just waiting to be ‘threat multiplied’ by climate change. The book was to include a history of water wars, but, as she dug into her topic, she found there wasn’t much history to write about. ”Cooperation, in fact, is the dominant response to shared water resources,” she discovered. The data are overwhelming:

Between 1948 and 1999, cooperation over water, including the signing of treaties, far outweighed conflict over water and violent conflict in particular. Of 1,831 instances of interactions over international fresh water resources tallied over that time period (including everything from unofficial verbal exchanges to economic agreements or military action), 67% were cooperative, only 28% were conflictive, and the remaining 5% neutral or insignificant. In those five decades, there were no formal declarations of war over water (emphasis added).

It is true that many nations are water-stressed, but this has not meant that their people must either perish or go to war to seize another country’s water supplies. Usually, it means that countries cooperate and import “virtual water” in the form of agricultural produce. It takes lots more water to grow crops than it does to supply households with drinking water. So where water is scarce, people tend to substitute grain imports for home-grown produce. Israel, Jordan, and Egypt are a case in point:

Israel ran out of water in the 1950s: it has not since then produced enough water to meet all of its needs, including food production. Jordan had been in the same situation since the 1960s; Egypt since the 1970s.  Although it’s true that these countries have fought wars with each other, they have not fought over water. Instead, they all import grain. As [U.K. social scientist Tony] Allan points out, more ‘virtual’ water flows into the Middle East each year embedded in grain than flows down the Nile to Egyptian farmers.

Climate change-related drought would pose challenges to resource managers but should not lead to armed conflict where nations are free to cooperate and trade. (As noted in my MasterResource column, cap-and-trade treaties require carbon tariffs for enforcement — a recipe for conflict and trade war rather than cooperation and trade.)

Barnaby’s conclusion is worth reproducing in full:

Book or no book, it is still important that the popular myth of water wars somehow be dispelled once and for all. This will not only stop unsettling and incorrect predictions of international conflict over water. It will also discourage a certain public resignation that climate change will bring war, and focus attention on what politicians can do to avoid it: most importantly, improve the conditions of trade for developing countries to strengthen their economies. And it would help to convince water engineers and managers, who still tend to see water shortages in terms of local supply and demand, that the solutions to water scarcity and security lie outside the water sector in the water/food/trade/economic development sector. It would be great if we could unclog our stream of thought about misleading notions of ‘water wars.’

Waxman-Markey would increase U.S. dependence on petroleum product imports

As discussed in my column on MasterResource.Org, U.S. dependence on oil, including oil imports, is not a “crisis.” Nonetheless, many eco-warriers and defense hawks claim that it is. They also claim that Waxman-Markey would enhance U.S. energy security by inaugurating the transition to a “beyond petroleum” economy.

Well, another colleague sent me a report showing that Waxman-Markey would make us more dependent on petroleum product imports.

The report, prepared by EnSys Energy for the American Petroleum Institute, finds that by 2030, Waxman-Markey would:

• Significantly increase U.S. refining costs;
• Reduce U.S. refining volume by up to 4.4 million barrels per day (mbd);
• Reduce annual U.S. refining investments by up to $89.7 billion (up to an 88% decline in investment);
• Reduce refinery utilization rates from 83.3% to as low as 63.4%;
• Create competitive advantage for non-U.S. refineries; and, hence
• Increase U.S. reliance on petroleum product imports.

EnSys analyzed three scenarios: a “Base Case” (EIA’s reference case projection of future liquid fuels supply and demand without climate legislation); a “Basic Case” (EIA’s analysis of Waxman-Markey assuming timely development of key low-emission technologies and no severe policy constraints on the use of both domestic and international offsets); and a No International/Limited Case (EIA’s analysis of Waxman-Markey assuming limited access to international offsets, and no deployment of key technologies beyond EIA’s reference case).

Okay, now that we understand the terminology, let’s look at some graphs from the EnSys report. First, the impact of Waxman-Markey on U.S. refinery output:

Next, the impact on U.S. refining investments:

Next, the impact on petroleum product imports by volume:

Next, the impact on petroleum product imports by percent:

Finally, the impact of Waxman-Markey on U.S. refining global market share:

Bottom line for “energy security” mavens: Waxman-Markey grows foreign refining output at the expense of U.S. output, and increases U.S. dependence on petroleum product imports.

The EnSys report very likely understates the impact of Waxman-Markey on U.S. refining. A modeling study can only estimate how carbon constraints will affect refining via their impact on fuel prices. Models cannot estimate how carbon-constraints might affect refining via their impact on investor psychology.    

Investors can get spooked when government declares regulatory warfare on an industry, and the Waxman-Markey bill does just that. Consider the gross disparity between the refining industry’s share of covered emissions (43%) under Waxman-Markey and its share of emission allowances (2.5%).

Investors cannot be blamed if they view Waxman-Markey as the proverbial “writing on the wall” for the U.S. refining industry. From this I conclude that Waxman-Markey’s adverse impacts on U.S. refining – and thus on the volume and percent of petroleum product imports – could be substantially greater than those EnSys projects.

Conclusion

Waxman-Markey will not take us “beyond petroleum.” Instead, it will make gasoline more costly to consumers while making America more dependent on imported petroleum products.

A headline in yesterday’s evening edition of Greenwire (subscription required) declares: ”Treasury; enviros go on offensive against media reports of cap-and-trade costs.” In fact, enviros went on defense.

As has been widely reported (e.g. here, here, here, and here), CEI, using the Freedom of Information Act (FOIA), obtained two Treasury Department documents discussing the cost of a cap-and-trade program. The first of these documents, dated 11/6/08, states (p. 1) that the administration’s plan to auction all allowances under a cap-and-trade program “could generate federal receipts on the order to $100 to 200 billion annually.” It further states (p. 2) that, “Economic costs will likely be on the order of 1% of GDP, making them equal in scale to all existing environmental regulation.”

To put these numbers in perspective, CBS reporter Declan McCullagh said that a cap-and-trade program costing $200 billion annually would be ”equivalent to hiking personal income taxes by about 15%,” or an “extra $1,761 per household.” As you can imagine, cap-and-traders went ballistic.

Greenwire faults McCullagh for neglecting to “state that Obama publicly stepped back from a 100% auction of allowances as the House negotiated and passed a climate bill that gives away more than three-quarters of the allowances for free during the program’s first years. The House legislation auctions only 18% of the allowances until about 2020.”

Greenwire quotes Treasury official Alan Kreuger, Harvard economist Robert Stavins, Josh Dorner of Sierra Club, and Tony Kreindler of Environmental Defense Fund, all asserting that McCullagh’s analysis is incorrect, because both the Obama plan and the House bill would return billions of dollars to taxpayers from auction permit sales.

Three points are in order here. First, Obama has not abandoned 100% auctioning.  OMB’s Mid-Session Review of the federal budget (Table S-11) projects “climate revenues” from “emission allowance auctioning” of $626 billion during 2010-2019. That’s slightly lower than the $645.7 billion in climate revenues projected in the President’s Budget(Table S-2). But the difference results from a technical adjustment, not a change in policy to accommodate the Waxman-Markey bill. The Mid-Session Review is an official statement of administration policy; it assumes 100% auctioning of emission allowances.

Second, the whole issue of auctions vs. free allocations is largely a distraction. Whether emission allowances are auctioned or distributed free of charge, the emissions cap determines the total number of allowances, and the market (supply and demand) determines allowance prices. The 11/6/08 Treasury memo is quite clear on this point: “Emission allowances under a cap and trade system are valuable assets regardless of their allocation method (analogous to revenue under an equivalent tax policy).”

As the cap tightens, the supply of allowances declines, allowance prices increase, and energy prices increase. Consequently, consumer spending, GDP, job creation, and wages all decrease relative to what they would be in a non-carbon-constrained economy. 

These impacts are the intended effect of a cap-and-trade program, and they occur regardless of whether allowances are auctioned or given away. The Heritage Foundation’s analysis of the Waxman-Markey bill, for example, assumes the allowance allocation scheme outlined in Reps. Waxman and Markey’s May 14, 2009 Memorandum, “Proposed Allowance Allocation.” The allocation formula in the final legislation passed by the House in June differs only in the details. The Heritage analysis projects significant economic impacts by 2035:

• Gasoline prices will rise 58% (or $1.38/gallon) above the baseline forecast, which already contains price increases;
• Natural gas prices will rise 55%;
• Heating oil prices will rise 56%;
• Electricity prices will rise 90%;
• A family of four can expect to pay $1,241 more for energy costs per year;
• Including taxes, a family of four will pay$4,609 more per year;
• A family of four will reduce its consumption of goods and services by up to $3,000 per year, as its income and savings fall;
• Aggregate GDP losses will be $9.4 trillion;
• Job losses will be nearly 2.5 million; and,
• The national debt will rise an additional $12,803 per person.

Third, returning part of the revenues from auction sales to households via tax rebates does not ensure low economic impact. Payments for auctioned permits are not the only cost of Waxman-Markey. A bigger cost is the damage done to the economy via higher energy prices. Even with the distribution of allowance revenues to households and other interests, the Heritage Foundation finds Waxman-Markey’s damage to the economy exceeds $9 trillion in the first 24 years.

 A reductio ad absurdum may help clarify this. Imagine that we tax milk at $30,000/gallon and rebate the tax revenue directly to each citizen. Bill Gates buys one gallon per year and nobody else buys any. The tax is returned to the 300 million residents of the United States and each gets $0.0001.

Proponents thus conclude that there is no economic impact. They overlook a whole slew of devastating costs: Lost profits and jobs in the dairy sector, lost tax revenues from the dairy industry, higher unemployment benefit payments, poorer nutrition and health, etc.

Claims that Waxman-Markey is a bargain once you consider the taxpayer rebates are similarly bogus.

The global warming scare campaign goes through phases. Warmists are collectivists, and they buzz like a hive. The overall narrative of doom does not change, but every couple of months or so the hive settles on a different scare to buzz about most loudly.

That’s the best way to get media and public attention, after all. Single out one alleged global warming terror, publicize the heck out of it until ”everybody knows” the “crisis” is “even worse than scientists previously believed,” and then move on to the next scare-of-the-month. The intended effect, as H.L. Mencken put it, “is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”

Previously featured scares include killer heat waves, malaria epidemics, more powerful hurricanes, catastrophic sea-level rise, ocean acidification, and, my personal favorite, a shutdown of the Gulf Stream leading to a new ice age. Some of these have been scares-of-the-month more than once — a form of recycling, if you will.

You might think that after so many years of hearing about so many ways global warming is going to wreck the planet, the American people would be “clamorous to be led to safety” and demand cap-and-trade as the salvific path to a “clean energy future.”

But no, the American people aren’t buying it — at least not enough to overcome their repugnance to a massive new energy tax, which, many now understand, is what cap-and-trade boils down to.

So proponents of the Waxman-Markey bill need a new scare du jour, and this month it’s “climate change threatens U.S. national security.” Instead of warning, implausibly, that we’re going to fry, drown, blow away, or freeze, the new sales pitch is more sophisticated.

Here’s what they say. Climate change is a “threat multiplier.” It aggravates several problems – poverty, drought, famine, coastal flooding – that already foster instability and conflict. A warming world will be plagued by more frequent and more intense conflicts among and within nations.

A coalition of eco-warriers and defense hawks has formed to push the message. What each side gets out of this strange-bedfellow coalition is obvious. The defense professionals get mission creep — an expansive rationale to justify new DOD and intelligency agency programs, capabilities, and activities, all funded by the taxpayer, from now until 2100 and beyond, regardless of the actual geopolitical and military threats facing the country. Greenies, for their part, gain allies respected by conservatives, who up to now have opposed Kyoto-style “global governance” and greater political meddling in energy markets.

On the free-market energy blog, MasterResources.Org, I have written a two-part essay titled, ”Even the Generals Are Worried! Mission Creep, Climate Change and National Security.” Part 1 shows that the “threat multiplier” argument is hype. Part 2 shows that climate change policy poses greater risks to national security than does climate change itself.

Today’s excerpt from CEI’s film, Policy Peril: Why Global Warming Policies Are More Dangerous Than Global Warming Itself, offers a free-market perspective on Al Gore’s proclamation, at the end of An Inconvenient Truth, that global warming is “a moral issue.”

Considered in the abstract, apart from its context in movie, this is a completely unremarkable statement. Just about all public policy issues can be described as moral issues, because they directly or implicitly ask us to decide whether a proposed course of action is fair or unfair, honorable or dishonorable, good or bad.

However, when Gore says global warming is a “moral issue,” he means something more. He means that combatting global warming is the overriding moral imperative of our time. He implies that if you are decent, self-respecting person, you have no moral choice but to follow his lead and  heed his call. He is trying to play a rhetorical trump card.

Gore is clever. In An Inconvenient Truth, he presents himself as an a-political Mr. Science – and then exploits the moral authority so contrived to bash the Bush Administration and other political opponents. Similarly, he presents as a moral imperative a policy agenda that — just by sheer coincidence, we’re supposed to believe – would empower him and his political allies to control the global economy. It’s all a little too convenient.

More importantly, what if the alleged imperative to decarbonize U.S. and global economy conflicts with other, arguably better-established imperatives, such as eradicating poverty? If Gore were a moral leader rather than a moralizing partisan, wouldn’t he at least acknowledge that his ”solutions” might have harmful side-effects? 

To watch today’s film excerpt, click here. To watch Policy Peril from start to finish, click here. The text of today’s film clip follows. The footnotes are to additional commentary and supporting information.

Narrator: Now let’s look at the international side of climate policy. Al Gore and the European Union advocate a 50% cut in global emissions by 2050. [1]  But most of the growth in global emissions between now and then will come from developing countries. [2] So those countries, too, will have to stop building coal plants. They, too, will have to limit their use of fossil fuel. [3] It would be a humanitarian disaster.

Globally, about 1.6 billion people lack access to electricity. About 2.4 billion still rely on traditional biomass–wood, crop waste, even dung–for cooking and heating. [4]

Tom Tanton (Pacific Research Institute): Look at developing countries. The thing they need most of all is commercial energy and electricity. People in developing countries spend most of their day collecting fuel. They don’t have time to go to school and get an education. It gets dark at night so there’s no studying at night, because there’s no electricity. Electricity is the essential commodity for any kind of growth and improvement in lifestyle. [5]

Narrator: A coal-fired power plant would improve the lives of those villagers in many ways. Women would be freed from backbreaking toil. People would be healthier because indoor air quality would improve. Refrigeration would make food preparation easier and safer. Electric lighting would allow people to read and study at night. The forests and the species dependent on them would be spared. [6]

Myron Ebell (Competitive Enterprise Institute): I agree with former Vice President Gore that global warming is a moral issue. I think it is preeminently a moral issue because we have a billion and a half people in the world who don’t have access to electricity, for example. The world is not energy rich, it’s energy poor. And if we’re going to put energy rationing policies on the backs of the world’s poorest people, they will have very little hope of ever achieving even a fraction of the well-being, the lifestyle that we have.

Narrator: India is an emerging industrial powerhouse. Yet even in India, energy poverty kills. India has the largest incidence of snake bites in the world. About 50,000 Indians die from snake bites each year. Doctors there have developed an anti-venom antidote. So why is the death toll so high?

Barun Mitra (Liberty Institute): The primary reason is that most Indian health centers, primarily in rural areas where the snakebites are more prevalent, have no electricity, no refrigeration, no way to store the anti-venom. The technology is there. We know how to generate electricity. The technology is there. We know how to make the anti-venom. Yet, 95% of Indians, or thereabouts, do not have access to it, because they stay in areas which cannot store anti-venom in a refrigerated environment.

Narrator: Let me state the obvious. Poverty is the number one cause of premature death and preventable disease in the world. [7] Global restrictions on fossil energy use would trap millions of people in poverty.

Al Gore and others don’t say exactly how they would stop poor countries from using coal. But some U.S. and European politicians want to impose carbon tariffs on goods from China and other developing countries that refuse to limit emissions. [8]

Iain Murray (Competitive Enterprise Institute; author The Really Inconvenient Truths): I think the question to ask here is: Can any of the potential effects of climate change be so great as to justify keeping the developing world in poverty. I think to ask that question is to answer it.

Commentary

[1] The goal of cutting global CO2 emissions 50%-85% by 2050 has become canonical for the global warming movement. Proponents of this viewpoint include the IPCC, the European Union, the G-8 (U.S., UK, France, Italy, Canada, Germany, Japan, Canada), and just about every environmental group. Supposedly, a 50%-85% cut would likely limit 21st century global warming to 2ºC (3.6ºF), which in turn would likely “avoid some of the worst effects” of climate change. All of this assumes that the climate is moderately-to-highly sensitive to increases in CO2 concentrations. Recent research contradicts that assumption.

[2] 80-90% of the increase in greenhouse gas emissions between now and 2050 is expected to come from developing countries, chiefly India, China, and SE Asia.  

Figure source: James Connaughton, Chairman,  White House Council on Environmental Quality (CEQ), Energy and Climate Policy, December 2007.

Figure source: Stephen Eule, U.S. Chamber of Commerce Institute for 21st Century Energy, Scale & Scope of the Challenge of Reducing Greenhouse Gas Emissions, February 2009

[3] Global CO2 emissions are projected to increase from 24 gigatons a year in 2000 to 50.6 gigatons a year in 2050. Thus, to achieve a 50% reduction, global emissions in 2050 will have decline to 12.3 gigatons — 76% below the baseline projection.

Figure source: Stephen Eule, Scale & Scope of the Challenge, Feb. 2009

This means that even if developed countries miraculously reduce their CO2 emissions to zero, global emissions cannot be cut by 50% unless developing countries cut their emissions 62% below baseline. Their per capita CO2 emissions will have to decline to 1.7 metric tons per year — less than current per-capita CO2 emissions in Central and South America.   

If developed countries reduce their emissions by “only” 84% — approximately the Waxman-Markey target for 2050 — then developing countries will have to reduce their emissions 71% below baseline. They’ll have to hold their emissions almost flat between now and 2050. Their per-capita emissions will have to decline to 1.3 metric tons per year. That’s about what per-capita emissions are today in Africa, the most energy-starved continent on the planet.

Figure source: Stephen Eule, Scope & Scale of the Challenge, February 2009

Absent spectacular breakthroughs in the cost and performance of zero-emission energy, the minimal EU/UN/Al Gore goal of a 50% reduction in global CO2 emissions by 2050 cannot be achieved without dramatically limiting developing countries’ energy consumption and economic growth.

[4] 1.6 billion people have never flipped a light switch and 2.4 billion people depend on primitive biomass for heat and light — these figures come from chapter 13 (”Energy and Poverty”) of the International Energy Agency’s World Energy Outlook 2002. 

[5] That electrification is a prerequisite for continual improvement in the human condition is obvious. Nonetheless, some scholars attempt via statistical techniques to demonstrate the importance of electricity to the physical quality of life. An October 2000 study by Alan Pasternak of the Lawrence Livermore Laboratory finds a strong association between per capita electricity consumption and the United Nation’s Human Development Index (HDI), a composite measure of human welfare taking into account GDP, life expectancy, and educational attainment.

Figure source: Alan Pasternak, Global Energy Futures and Human Development: A Framework of Analysis, Lawrence Livermore Laboratory, October 2000.

Although in 1997 four countries (South Korea, Russia, Saudi Arabia, and South Africa) with per capita annual electricity consumption somewhat above 4,000 kWh had an HDI below 0.9, no country with per capita annual electricity consumption below 4,000 kWh had an HDI of 0.9 or higher. Pasternak concludes that there is a “compelling need for increased energy and electricity supplies in the developing countries,” and that, “Neither the Human Development Index nor the Gross Domestic Product of developing countries will increase without an increase in electricity use.” 

[6] For this formulation, I am indebted to University of Alabama-in-Huntsville atmospheric scientist John Christy. A former African missionary, Christy has seen first-hand the hardship and perils of life in an energy-poor country. When Christy testifies before Congress, he often includes a plea not to demonize energy, because “life without energy is brutal and short.”

[7] “A large proportion of illnesses in low-income countries are entirely avoidable or treatable with existing medicines or interventions,” observes Philip Stevens, Health Director for the International Policy Network (see p. 4 of this report). Such illnesses include tuberculosis, malaria, HIV/AIDS, childhood diseases (polio, measles, tetanus), diarrhoeal diseases from poor sanitation, respiratory infections from indoor air pollution, and malnutrition such as vitamin A deficiency. These eminently preventable and treatable illnesses kill millions people — a high proportion of them children — in developing countries each year. Although vaccines or treatments are inexpensive, poor countries lack the infrastructure to make them widely available.

[8] Cap-and-trade and protectionism are joined at the hip. You might not think so, judging from the oft-repeated assurances that Kyoto-style policies will spur innovation, efficiency, and “green job” creation, making us more competitive in the “economy of the future.” Yet European politicians warn (see here, here, and here) that they will impose border taxes (carbon tariffs) on goods from countries — chiefly China but also the United States — that refuse to limit emissions.

Most “trade-exposed, energy-intensive” firms call for additional free emission allowances to “level the playing field” rather than for carbon tariffs (see here, here, and here). However, the Sierra Club argues that carbon border taxes may be needed as a “backstop,” particularly as emission caps tighten and the supply of free allowances shrinks. It is telling that some experts are making the case that carbon tariffs are legal under WTO trade rules. (Other experts, however, warn that unilateral imposition of border taxes or counterveiling duties on carbon-intensive imports would violate WTO rules, engendering a long period of trade friction and uncertainty.)

Both free allowances and carbon tariffs are also touted as a cure for “carbon leakage” — the flight of capital, jobs, and emissions to developing countries in order to escape the high energy costs stemming from carbon controls in developed countries.

But beyond concerns about unfair competition and carbon leakage, there are more basic reasons why cap-and-trade depends on protectionism. First, how do you enforce a treaty like Kyoto over the long term?  It’s a typical collective action problem. Even if one assumes it is in the common interest of all nations to mitigate global warming, it is in the individual interest of each nation to bear less than its negotiated share of the burden — to reap the climate benefits (if any) of other nations’ sacrifices and employ creative accounting on behalf of one’s own industries to give them a competitive edge. If cheating isn’t credibly punished, the number of “free riders” will grow, and the system will collapse.

How will the world’s nations punish cheaters? If military force is not an option, then trade penalties — carbon tariffs — are pretty much the only  remedy.

Furthermore, how do you persuade major developing countries to get on board? They repeatedly refuse to accept binding limits on their emissions. Yet, as explained above, developing countries must make heroic efforts to decarbonize their economies if the world is to cut emissions 50%-85% by 2050, as demanded by Vice President Gore, the EU, and the UN.

One option is to bribe them with massive wealth and technology transfers. But building hundreds of new nuclear power plants or hundreds of futuristic zero-emission coal power plants in China, India, Brazil, and other developing countries would cost trillions of dollars. In the midst of a global financial crisis and high unemployment, it is unlikely that U.S. and EU taxpayers will agree export more jobs to China.

If carrots are out as an inducement to decarbonize, then sticks are what’s left. It would need to be a big stick — for example, a coordinated campaign of trade sanctions by the United States, the EU, Canada, Russia, and Japan.

More than likely, though, such a campaign would fail because developing countries would retaliate with trade sanctions of their own. We would get trade war, not compliance.

Nonetheless, if the major-emitting developing countries — China, India, Brazil, and Indonesia — continue to reject binding emission limits, advocates of CO2 controls will be continually tempted to rattle the trade sabers and demand carbon tariffs. Indeed, earlier this month, 10 Democratic U.S. Senators, in a letter to President Obama, indicated they would not support a cap-and-trade bill lacking a “border adjustment mechanism” (a.k.a. carbon tariff) to create a level playing field and pressure nations like China into adopting carbon controls.

Conclusion

Yes, global warming is a moral issue, but not for the reasons Al Gore supposes. As John Christy reminds us, human life without energy is brutal and short. Yet Gore would suppress the 85% of the world’s energy that comes from fossil fuels.

But there’s more to it than that. In a recent video commentary on CO2Science.Org, Christy offers both a personal insight and an analyst’s perspective on why abundant, affordable energy is one of the great blessings of modern civilization. I’ll conclude this blog post — the last in my series of posts on Policy Peril – with the text of Christy’s remarks.

John Christy: When people talk about the moral issue of controlling carbon dioxide emissions, I say yes, that’s right, it is a moral issue. In 1900, the energy technology of the day supported 56 billion human life years. Okay. That’s 1.6 billion people times 35 years’ life expectancy. 56 billion human life years. The average person lived to 35. Now, the energy technology supports about 450 billion human life years. That is an eight-fold increase in the experience of human life, and that is a spectacular achievement.

I am a grandfather now. And when my little grandson runs up and hugs me around the knees, I am experiencing something in human life that, a hundred years ago, the average person could not, at all. So this experience of human life that’s been granted to us by energy technology is tremendous and wonderful.

Therefore, the moral issue here is that we should provide people, who do not have it, energy, so that they can experience life that is safer, that is healthier, and that is longer. That’s the moral issue. 

To read previous posts in this series, click on the links below: