Myron Ebell

President Barack Obama submitted his proposed Fiscal Year 2014 budget to Congress on 10th April, 66 days after the legal deadline.  The law does not subject the President to any penalties for missing the 4th February deadline, but no previous President has submitted his proposed budget more than a few days late.  The budget proposes to increase federal spending by nearly five percent over the current fiscal year.

Subsidies for renewable energy and energy efficiency total $23 billion over ten years.  Astonishingly, the President proposes to make wind, solar, and geothermal subsidies permanent.  According to a White House fact sheet: “To provide a strong, consistent incentive to encourage investments in renewable energy technologies and to help meet our goal to double generation from wind, solar, and geothermal sources by 2020, the Budget would make permanent the tax credit for the production of renewable electricity.  The Budget makes the Production Tax Credit refundable so new, growing firms can benefit and provide renewable electricity generation.”

For decades, the leaders in the wind and solar industries have told Congress that they just need a few more years of subsidies before they become competitive with energy produced from conventional sources.  Last December, during the debate over whether to extend the wind subsidy for another year, the American Wind Energy Association came forward with a plan to phase out the subsidy over six years. The Obama Administration has concluded that wind and solar will never become competitive with coal and natural gas.

Times have changed since the Wall Street Journal held its first “ECO:nomics—Creating Environmental Capital” conference at the super-swanky Bacara Resort in Santa Barbara.  I was there in 2008 (but, alas, stayed at the Best Western in downtown Santa Barbara) when several hundred investors and corporate CEOs listened to leading crony capitalists, including Jeff Immelt of GE, James Rogers of Duke Energy, Andrew Liveris of Dow Chemical, and John Doerr of Kleiner, Perkins, Caulfield and Byers (where Al Gore was also a partner), smugly explain how they were going to strike it rich off the backs of consumers and taxpayers with green energy subsidies and mandates, federal loan guarantees, and the higher energy prices that would make renewable energy competitive with coal, oil, and natural gas once cap-and-trade was enacted.

This year’s sixth annual conference, which I didn’t attend, was also held at the Bacara Resort, but the mood was apparently different.  Yesterday, the Journal ran a six-page supplement that summarized the conference’s highlights.  The lead article by John Bussey was headlined: “Green Investing: So Much Promise, So Little Return: At The Wall Street Journal’s ECO:nomics conference, the talk was about all the innovations taking place in renewable energy—and about all the investors who are losing interest.”

Bussey writes: “Given all the interest in protecting the environment from mankind’s rapid advance, you’d think this might be the best time ever to invest in renewable energy and the Next Big Green Thing.  Guess again.  Large parts of green-tech investment look like the torched and salted fields left behind by Roman conquerors: barren, lifeless—and bereft of a return on capital. Put another way: In some areas, if you aren’t already investor road kill, you’re likely the hedgehog in the headlights about to join your maker.”

On page two, an article on a talk by John Dears, chief investment officer of the California Public Employees’ Retirement System (or Calpers), reveals that their “fund devoted to clean energy and technology which started in 2007 with $460 million has an annualized return of minus 9.7% to date.”  Dears is quoted as telling the conference: “We have almost $900 million in investment expressly aimed at clean tech.  We’re all familiar with the J-curve in private equity.  Well, for Calpers, clean-tech investing has got an L-curve for “lose.”  Our experience is that this has been a noble way to lose money.”

Yes, con artists gaming the system to raise energy prices, impoverish consumers, destroy jobs, and fleece taxpayers can still take comfort that theirs is “a noble way to lose money.”  Long may it remain so.  The entire 2013 ECO:nomics program may be found here. Read it and gloat now—it may be the last one.

Editor’s note: For more on CalPERS history of gross financial mismanagement, see this excellent post by my colleague Ivan Osorio.

Senate Majority Leader Harry Reid (D-Nev.) seldom lets Senators vote on amendments to bills, but last week he agreed to a “vote-a-rama” on the budget bill.  Hundreds of amendments on all sorts of issues were offered and many of them are being voted on.  Senator Roy Blunt (R-Mo.) offered an amendment (#261) to put the Senate on record against any tax or fees on carbon dioxide emissions.  The Senate voted on this anti-carbon tax amendment on Friday, 22nd March.  Fifty-three Senators voted in favor, with 46 opposed. Sixty votes were required for passage under Senate rules.

All the no votes were from Democratic members.  The 45 Republican Senators were joined by eight Democrats in voting for Blunt’s amendment.  The Democrats were: Max Baucus of Montana, Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Mary Landrieu of Louisiana, Joe Manchin of West Virginia, Claire McCaskill of Missouri, Mark Pryor of Arkansas, and Jay Rockefeller of West Virginia.

The newspaper industry has named this week Sunshine Week to focus attention on the importance of open government and public access to information.  The Obama Administration has gotten into the spirit of Sunshine Week with daily posts on the White House blog and the Department of Justice blog, which talk about the importance of transparency and trumpet the Administration’s achievements.  President Obama after all promised in the 2008 presidential campaign that his administration would be the most transparent in history.

It hasn’t quite worked out that way.  For example, CEI’s Chris Horner has filed multiple ongoing lawsuits to try to force the Administration to comply with Freedom of Information Act requests.  The Republican minority staff of the Senate Environment and Public Works Committee have been having fun with daily posts that chronicle example after example of Obama Administration stonewalling and failures to comply with federal open government laws.

But it’s no longer just a partisan complaint.  Glenn Greenwald published a column in London’s Guardian this week headlined, “Obama’s secrecy fixation causing Sunshine Week implosion.”  The sub-headline reads, “Even the most loyal establishment Democrats are now harshly denouncing the president for his war on transparency.”

It was a busy week for promoting and opposing a carbon tax.  Two studies on the economic effects of a carbon tax that draw opposite conclusions were released by the National Association of Manufacturers and the Brookings Institution.  Kevin Hassett, Ph.D., director of economic policy studies at the “pro-business” American Enterprise Institute, continued his advocacy of a carbon tax at a Resources for the Future forum.  And most interestingly, former EPA Administrator William K. Reilly, said at a conference that, “The strongest advocate on our task force for a carbon tax was ExxonMobil.  I had previously thought that was a public relations thing — I didn’t think they were quite interested in it.”

The National Association of Manufacturers released a study by NERA Consulting on the Economic Outcomes of a Carbon Tax. The NAM study concludes that a tax starting at $20 per ton of carbon dioxide emitted and increasing by 4 percent per year would have a range of negative effects that would ripple through the economy.  In particular: “The negative impact of a carbon tax on total manufacturing output would be significant, with output from energy-intensive manufacturing sectors dropping as much as 15 percent and output from non-energy-intensive manufacturing sectors dropping as much as 7.7 percent.”

The NAM study also argues that: “A carbon tax would have a net negative effect on consumption, investment and jobs, resulting in lower federal revenues from taxes on capital and labor. Factoring in lost revenue from reduced economic activity, the net revenue from a carbon tax available for deficit/debt reduction and lower tax rates is relatively small.”

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