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.
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.
On Wednesday, March 13, the Cooler Heads Coalition sponsored a Congressional briefing by Rupert Darwall on his new book, The Age of Global Warming: A History, in which he places the rise of the global warming movement in the context of the history of ideas.
My colleague Myron Ebell summarized Darwall’s new book thusly,
The book begins by discussing why 19th century predictions of eco-doom turned out to be wrong, but are still believed; and how the first environmental wave in the 1960s and early 1970s came crashing down during the economic crisis of the 1970s. This set the stage for the second environmental wave, when global warming burst onto the world stage in the late 1980s and with an unlikely champion in the UK—Prime Minister Margaret Thatcher.
Darwall then shows in detail how science became the spear carrier of the global warming movement and how politics settled the scientific debate in 1992 when governments of the world agreed to the UN Framework Convention on Climate Change at the Rio Earth Summit. His book concludes by examining how the developing world’s opposition to energy-rationing policies resulted in an unprecedented humiliation for the West at the Copenhagen climate summit in 2009.
Below is video of Darwall’s briefing.
Last week, the Wall Street Journal reported that the U.S. military is exploring how to bundle renewable energy contracts into securities (à la subprime mortgages), in order to better leverage taxpayer dollars to pay for more green energy.
Is anyone else discomfited by this second order mission creep? The military is supposed to be fighting wars. Now, it’s getting into complex, risky investment banking. So that it can generate more green energy.
Surely General Patton is rolling in his grave.
The Associated Press last week reported that New York Governor Andrew Cuomo was set to partially lift a statewide moratorium on hydraulic fracturing, a gas drilling technology also known as fracking, but he was persuaded to hold off on doing so by his former brother-in-law Robert Kennedy, Jr., a famous environmentalist. According to the AP, Kennedy impressed on Gov. Cuomo the “health problems” associated with fracking. Contrary to what Kennedy told the Governor, there are no such “health problems.” The truth is that environmentalist agitators like Kennedy and documentarian Josh Fox don’t have any evidence to back up their claims. If I was an upstate New Yorker whose property lay above the Marcellus Shale, a gas rich geological formation underneath much of the State, I’d question why my Governor is listening to his former brother-in-law, instead of the New York state geologist, Dr. Taury Smith, a fracking supporter who dismisses environmentalist alarmism about the drilling technique as being the “worst kind of spin.”
First, it was 1,200 emails of the Washington Post daily headlines, Google alerts of everything written about the Environmental Protection Agency on a given day and a compendium of blogs that mentioned the EPA. Then, having had their fun, EPA officials got serious in the second tranche of emails they released to CEI late Friday, pursuant to a court ruling that ordered the agency to comply with our FOIA requests. This time, we got actual emails … that revealed a lot … about the fine art of redaction. Remember, this is the production of the most powerful regulatory agency of the most transparent administration in history. “We have nothing to hide,” the EPA has told us. Sure doesn’t seem that way to us:
Over at the Daily Caller News Foundation, reporter Greg Campbell takes a long look at ex-Colorado Governor’s qualifications to become the next Energy Secretary, a cabinet position for which he is rumored to be in the running. The President’s due diligence team should take note. Campbell writes:
One of Ritter’s main legacies as governor is a package of legislation called “the new energy economy” that was meant to kickstart renewable energy initiatives.
But his administration has come under scathing criticism recently for its handling of new energy projects. A state audit of the Colorado Energy Office — which began focusing on renewable energy initiatives during Ritter’s tenure — showed that it could not account for how it spent $252 million in state and federal money since 2007.
The agency could not say how much its programs cost or how much money was spent on them. The audit concluded that because of poor accounting, the energy office could not show that any of its programs were cost effective.
Much of the mismanaged money alluded to above came from the stimulus. In this respect, an Energy Secretary Ritter would provide a seamless transition from outgoing Secretary Steven Chu, whose tenure was characterized by pound-foolish stimulus spending.
According to Ritter, however, the state auditor has it all wrong:
He [Ritter] said that documents showing “in great detail” what was spent on various projects, as well as their outcomes, exist on the Internet and that there were “other avenues” for auditors to locate information.
Sooooo…….the missing exculpatory evidence is “on the internet”…..I’ve heard worse excuses, but not many.
In addition to the mismanagement of taxpayer money, Ritter also has a deep well of experience making energy more expensive. While in office, Ritter championed an agenda he labeled the “New Energy Economy.” In practice, it meant forcing Colorado ratepayers to use more green energy, and also fuel switching from coal to natural gas. Because green electricity costs more than natural gas electricity, which in turn costs twice as much as coal electricity in Colorado, Ritter’s New Energy Economy necessarily inflated electricity costs. As Campbell reports,
Indeed, a new report examining the financial impact of New Energy Economy legislation shows that Xcel Energy customers paid $484 million last year complying with the state’s tough new renewable energy standards and other clean energy measures, an amount that comprised 18 percent of Xcel’s total electricity sales in 2012.
In season one, episode six of the show “Sex and the City,” Carrie frets whether her new beau, Mr. Big, is keeping her from his social circle. Her worries were prompted by the plight of her friend Mike Singer, who had found an ideal lover in sales clerk Libby Biyalick, but who preferred to keep the affair secret because he was embarrassed to be seen with her in public.
In many ways, the association between the President and the environmental movement is a lot like that between Mike Singer and Libby Biyalick.
On the one hand, the greens and the President share an intimate relationship characterized by symbiotic back-scratching. Environmental special interest organizations increasingly are active in the business of political advertising on behalf the President and his party, which is the ultimate currency with any politician. And President Obama has shown much love for environmentalists, by waging an unprecedented war on their #1 enemy, the coal industry.
And yet, despite this cozy relationship, President Barack Obama clearly doesn’t want to be seen in public with the greens. In the course of three debates, President Obama never once mentioned “global warming,” nor did he tout any of his environmental policies (He mentioned CAFE standards and green energy, but that was in the context of “energy independence” and “all of the above”). Quite apart from bragging about his green bona fides, the President actually tried to appear more of a friend to fossil fuels than his opponent.
Ouch! Humiliation notwithstanding, environmentalists can take much solace in the fact that the President has delivered pretty much everything they could ask for in the way of anti-fossil fuel policies.
[Updated: 6:26 AM, 24 October 2012. I completely forgot to give an explanation for why President Obama wants to be private-not-public friends with environmentalists. At this point in a Presidential election, all of a candidate's actions and words have been focus-grouped and polled, such that they are carefully calibrated to achieve maximum appeal among independent voters. With this in mind, the President's debate performances indicate that the Obama campaign thinks independents give low priority to global warming.]
Earlier this week, I wrote about how Washington Post Wonkblog contributor Brad Plumer misread a report on which he blogged. Today, his colleague Ezra Klein devoted another Wonkblog post to an erroneous thesis—namely, that opposition to climate policies like cap-and-trade is a strictly partisan matter.
The impetus for Klein’s mistake was a New York Times column by David Brooks, titled “A Sad Green Story.” In the piece, Brooks argues that the prospects for a policy to mitigate climate change have effectively died for two reasons: (1) Al Gore is a highly partisan figure; and (2) a few high-profile taxpayer investments in green energy that failed (Solyndra, A123, et al.). Most of Brooks’ op-ed is given to the latter point, as is evident by his conclusion:
Global warming is still real. Green technology is still important. Personally, I’d support a carbon tax to give it a boost. But he who lives by the subsidy dies by the subsidy. Government planners should not be betting on what technologies will develop fastest. They should certainly not be betting on individual companies.
This is a story of overreach, misjudgments and disappointment.
Klein, however, took issue with Brooks’ “passivity.” According to his Wonkblog post:
This isn’t a story of overreach, misjudgements [sic], and disappointment. It’s a story of Republicans putting raw partisanship and a dislike for Al Gore in front of the planet’s best interests. It’s a story, though Brooks doesn’t mention this, of conservatives building an alternative reality in which the science is unsettled, and no one really knows whether the planet is warming and, even if it is, whether humans have anything to do with it. It’s a story of Democrats being forced into a second and third-best policies that Republicans then use to press their political advantage.
It’s a story, to put it simply, of Democrats doing everything they can to address a problem Brooks says is real in the way Brooks says is best, and Republicans doing everything they can to stop them. And it’s a story that ends with Democrats and Republicans receiving roughly equal blame from Brooks.
Klein has it wrong. Quite contrary to what he would have readers believe, opposition to climate policy is one of the very few areas of bipartisan agreement on Capitol Hill. On the one hand, the issue breaks down along geographic lines, rather than partisan ones, such that politicians from areas dependent on the production or use of fossil fuels tend to oppose climate policies, whether they are Republican and Democrat. On the other hand, politicians from both parties are always reluctant to enact policies, like a cap-and-trade, that engender economic hardship for their constituents. As a result, global warming is a low priority across the partisan divide. Consider:
- On June 6, 2008, in the immediate wake of the Senate’s rejection of the Lieberman-Warner cap-and-trade, which had been extensively reworked by Senator Barbara Boxer, 10 Senate Democrats—about 20 percent of the caucus at the time—sent Senator Boxer a letter explaining that they voted or would have voted against her cap-and-trade because it would cause “undue hardship” for their constituents.
- On June 26, 2009, 40 Democrats in the House of Representatives voted against the American Clean Energy and Security Act, a cap-and-trade bill.
- During the 2010 summer, Senate Democrats held weekly caucus meetings to build support for a Senate companion bill to the American Clean Energy and Security Act. But the caucus never rallied behind the measure, and it was put on ice, without ever reaching the Senate floor for a vote.
If, as Klein believes, Democrats are “doing everything they can to address” climate change, then the 111th Congress would have enacted a cap-and-trade, at a time when Democrats held both Chambers and the Presidency. Instead, 40 House Democrats voted against the measure, which was subsequently shelved by Senate leadership.
O…M…G! On energy policy, President Obama sounded better than Romney during the debate last night.
Of course, “sounded” is the operative word, as the President’s energy discourse wholly discounted reality. Here on planet earth, his administration is waging a war on energy. Oil and gas production is booming—but only on state and private lands unencumbered by the red tape and bureaucratic foot-dragging that has inhibited drilling on federal lands. In the last year, President Obama’s EPA promulgated two regulations that ban new coal-fired power plants (as if one wasn’t enough?). And when it’s not opposing energy that works, the Obama administration throws good money after bad trying to cultivate “green jobs” at companies that cannot compete without an everlasting inflow of taxpayer help.
That’s the real President Obama. Last night’s President Barack Obama was nothing like him. Debate Obama was an unabashed supporter of fossil fuel energy. Here’s a roundup of choice phrases:
On Oil, President Obama compared his record favorably to that of a Texas petroleum executive:
“We’re actually drilling more on public lands than in the previous administration and my — the previous president was an oil man.”
On Natural Gas, President Obama can’t get enough!:
“We continue to make it a priority for us to go after natural gas. We’ve got potentially 600,000 jobs and 100 years worth of energy right beneath our feet with natural gas…
…. And natural gas isn’t just appearing magically. We’re encouraging it and working with the industry.”
On Coal, President Obama warned that his opponent was an enemy of coal (by comparison, presumably, Obama was a friend of coal):
“And when I hear Governor Romney say he’s a big coal guy, I mean, keep in mind, when — Governor, when you were governor of Massachusetts, you stood in front of a coal plant and pointed at it and said, “This plant kills,” and took great pride in shutting it down. And now suddenly you’re a big champion of coal.”
Notably, last night’s President Obama never once mentioned “global warming.” I kinda liked last night’s Obama! I wish he were the Obama that actually exists. Alas, real-life Obama is a far cry from Debate Obama.
Romney, on the other hand, used his dialogue on energy policy to trumpet two harmful energy shibboleths: “energy independence” and “all of the above.” The problem with the latter (“all of the above”) is that it draws no line to leave out the inane. It’s an inherently imprudent slogan. “Energy independence” is equally terrible. We participate in international oil markets because that’s the cheapest way to meet our aggregate demand for products we want. This is not a problem and it doesn’t warrant a national energy policy.