Boxer inadvertently made a great point: Greenhouse gas emissions are causally correlated with economic growth. This is why her cap-and-tax energy-rationing bill is bad news for the American economy.

Senators from California and Massachusetts this week emulated their state colleagues in the House, Representatives Waxman and Markey, by introducing the Boxer-Kerry cap-and-trade bill. This may be it, although it is ever-changing. It contains the same basic content as the House bill, but aims to be “stricter” (read: more expensive) by asking for 20 percent reductions in emissions by 2020, rather than the 17 percent demanded by the House. (As an aside: Look for forthcoming economic analyses from EPA, etc., that will somehow conclude this will be cheaper than the House bill).

Here’s a quick summary from Greenwire of the main points and differences from the the House Bill. My comments are in italics.

Overall, the early draft of the Boxer-Kerry legislation includes four titles that take aim at greenhouse gas emissions across multiple economic sectors, as well as a “transition and adaptation” section aimed at helping the nation cope with the costs of a climate bill and the expected repercussions of global warming.

Note that the Bill explicitly recognizes that it has costs. The fact that they attempt to mitigate these costs through wealth redistribution doesn’t alter that fact. The money has to come from somewhere, as this bill certainly isn’t creating new wealth.

Both the early draft and the Boxer-Kerry bill due for release tomorrow will leave blank key information about how the senators intend to distribute hundreds of billions of dollars in emission allowances. Following the path of Democratic leaders of the House Energy and Commerce Committee, those figures will come next month when Boxer releases a chairman’s mark of the bill before an EPW Committee markup.

While this section is key to getting industries on board by buying them off, it isn’t key to the overall costs (except in so far as it increases them by adding inefficiencies). As Peter Orszag has said, the overall costs are the overall costs regardless of whether permits are auctioned or given away.

To deal with economic uncertainties, the draft Boxer-Kerry plan would establish a strategic allowance reserve that allows U.S. EPA to sell credits into the carbon market via an auction in the event credit prices rise faster than expected.

This is a “safety valve” that admits that the entire cap-and-trade concept could be catastrophic for the economy.

The draft also mirrors the House on offset projects that allow industry an alternative compliance option to pay farmers and other landowners for environmentally friendly projects. Both the House-passed bill and this early Senate draft allow capped sources to collectively use emissions offsets to meet 2 billion tons of their obligations annually - divided evenly between domestic and international credits, with the amount of international credits allowed to increase if insufficient domestic offsets are available.

As the Breakthrough Institute has shown, even modest use of this provision could mean that domestic emissions don’t decrease at all.

The early draft of the Boxer-Kerry bill heeds environmentalists’ requests by removing a section of the House bill that would have restricted EPA’s ability to enact climate change regulations.

Which means that we could have a double whammy of cap-and-trade plus the admitted disaster of EPA regulation.  So much for the argument that we need cap-and-trade to save us from the zeal of the EPA.

Like the House bill, the Boxer-Kerry draft would provide emissions allowances to fund commercial deployment of carbon capture and sequestration, although it does not provide specifics. It also establishes performance standards for emissions of greenhouse gases from new coal-fired power plants.

As the environmentalists like to remind us, “clean coal” does not yet exist and there is no guarantee that it will be able to meet the requirements of the bill in practical fashion, despite the funding.

…There are also significant differences between the Senate draft and the House bill.

For example, Boxer and Kerry propose a different approach for oversight of the carbon market, which in the House bill is shared between FERC and the Commodity Futures Trading Commission, with FERC regulating the cash market for allowances and offsets and CFTC handling the derivatives market. The draft Senate plan, in contrast, would place the carbon markets under a single regulator - the brief carbon market section would have CFTC regulate both markets. It also broadly empowers the regulator to prevent manipulation of these markets and eliminate “excessive speculation” that adds to price volatility. Lawmakers are likely to seek more detailed provisions that place controls on these markets.

At least they appear to have recognized that they’re setting up a subprime carbon market.  The only problem is that strict regulation removes the incentives that trading is supposed to bring in the first place.

Elsewhere, the draft Boxer-Kerry bill does not include House-passed language that would bar EPA - for six years - from considering greenhouse gas emissions from so-called international indirect land-use changes when implementing the national biofuels mandate.

I haven’t examined this directly, but this seems to imply that clearing away rainforest for biodiesel is fine by Boxer and Kerry.

The Senate draft also has a modest nuclear title, although pro-nuclear senators are likely to push for significant incentives in the final measure. The bill’s nuclear title would steer money to the Energy Department for implementing programs to expand expertise in the nuclear field. Advocates of expanding U.S. nuclear power say there are not enough nuclear engineers and other experts to work on the hoped-for buildout of new reactors.

The nuclear title also has a section titled “Nuclear Waste Research and Development,” but it is left blank, stating “to be supplied.”

This title is so modest that it is clearly an afterthought.

The bill of course raises several questions. Here are a few, courtesy of Senator Inhofe.

There will be many more, of course.

- Sen. Boxer, in the bill’s findings, you laud the merits of nuclear power, and seem to suggest supporting measures to encourage its expansion.  Yet the bill lacks several essential measures to make that happen.  Why?

- Sen. Boxer, why does your bill include “climate change worker adjustment assistance”?  Does this mean that your bill will cause workers to lose their jobs?

- Sen. Boxer, your bill allows the EPA to regulate greenhouse gases under the Clean Air Act, on top of your cap-and-trade mandate.   How is this conducive to regulatory certainty?  Does this conflict with your call for a “market-based” program?   - Sen. Boxer, by providing “rebates” to electricity consumers, are you acknowledging that, as President Obama said, electricity prices will “necessarily skyrocket” because of your cap-and-trade bill?

- Sen. Boxer, how does the “rebate” program work?  Does it mandate that local distribution companies cut checks to consumers?  Would those checks completely offset electricity price increases for consumers?  Or is that the local distribution companies could provide “rebates” through, say, energy efficiency programs?

- Sen. Boxer, your “price collar” is tied to a “strategic reserve fund,” in which a limited number of allowances could be issued at the collar (ceiling) price.  This is not a true “safety valve.”  David Montgomery with CRA International wrote that, “Without a true safety valve based on an open window and unlimited sales and purchases, there will continue to be significant risks that allowance prices will uncontrollably exceed the collar, in one direction or the other. The result will be a system in which price volatility increases the difficulty of long term investment planning, with the additional uncertainty of how legislation itself will change if a period of unexpectedly high (or low) prices occurs.”  Why is he wrong?

-Senator Boxer, because this is a global issue, how does your draft ensure that other developing countries, such as China and India, will make binding emissions cuts that are as strict as those that are required for the United States under this Act?

“Since when did you become a global warming alarmist?” I kidded Norman midway into our telephone conversation a few weeks before this amazing scientist and humanitarian died.

“What are you talking about?” Dr. Borlaug retorted. “I’ve never believed that nonsense.”

I read a couple sentences from his July 29 Wall Street Journal article. “Within the next four decades, the world’s farmers will have to double production … on a shrinking land base and in the face of environmental demands caused by climate change. Indeed, [a recent Oxfam study concludes] that the multiple effects of climate change might reverse 50 years of work to end poverty.”

I mentioned that my own discussions of those issues typically emphasize how agricultural biotechnology, modern farming practices and other technological advances will make it easier to adapt to any climate changes, warmer or colder, whether caused by humans or by the same natural forces that brought countless climate shifts throughout Earth’s history.

“You’re right,” he said. “I should have been more careful. Next time, I’ll do that. And I’ll point out that the real disaster won’t be global warming. It’ll be global cooling, which would shorten growing seasons, and make entire regions less suitable for farming.”

I was amazed, as I was every time we talked. Here he was, 95 years old, “retired,” still writing articles for the Journal, and planning what he’d say in his next column.

The article we were discussing, “Farmers can feed the world,” noted Norman’s deep satisfaction that G-8 countries have pledged $20 billion to help poor farmers acquire better seeds and fertilizer. “For those of us who have spent our lives working in agriculture,” he said, “focusing on growing food versus giving it away is a giant step forward.”

Our previous conversations confirm that he would likewise have applauded the World Bank’s recent decision to subsidize new coal-fired power plants, to generate jobs and reduce poverty, by helping poor countries bring electricity to 1.5 billion people who still don’t have it. For many poor countries, a chief economist for the Bank observed, coal is the only option, and “it would be immoral at this stage to say, ‘We want to have clean hands. Therefore we are not going to touch coal.’” Norman would have agreed.

“Governments,” he argued,  ”must make their decisions about access to new technologies … on the basis of science, and not to further political agendas.” That’s why he supported DDT to reduce malaria, biotechnology to fight hunger, and plentiful, reliable, affordable electricity to modernize China, India and other developing nations.

His humanitarian instincts and commitment to science and poverty eradication also drove his skepticism about catastrophic climate change.

He was well aware that recent temperature data and observations of solar activity and sunspots indicate that the Earth could be entering a period of global cooling. He had a healthy distrust of climate models as a basis for energy and economic policy. And he knew most of Antarctica is gaining ice, and it would be simply impossible for Greenland or the South Pole region to melt under even the more extreme temperature projections from those questionable computer models.

He also commented that humans had adapted to climate changes in the past, and would continue to do so. They would also learn from those experiences, developing new technologies and practices that would serve humanity well into the future.

The Ice Ages doubtless encouraged people to unlock the secrets of fire and sew warm clothing. The Little Ice Age spawned changes in societal structure, housing design, heating systems and agriculture. The Dust Bowl gave rise to contour farming, crop rotation, terracing and other improved farming practices.

Norman’s dedication to science, keen powers of observation, dogged perseverance, and willingness to live for years with his family in Mexico, India and Pakistan resulted in the first Green Revolution. It vastly improved farming in many nations, saved countless lives, and converted Mexico and India from starving grain importers to self-sufficient exporters.

In his later years, he became a champion of biotechnology, as the foundation of a second Green Revolution, especially for small-holder farmers in remote parts of Africa. Paul Ehrlich and other environmentalists derided his ultimately successful attempt to defuse “The Population Bomb” through his initial agricultural advances, and attacked him for his commitment to biotechnology.

His response to the latter assaults was typically blunt. “There are 6.6 billion people on the planet today. With organic farming, we could only feed 4 billion of them. Which 2 billion would volunteer to die?”

The Atlantic Monthly estimated that Norman’s work saved a billion lives. Leon Hesser titled his biography of Borlaug The Man Who Fed the World. Competitive Enterprise Institute senior fellow Greg Conko dubbed him a “modern Prometheus.” Science reporter Greg Easterbrook saluted him as the “forgotten benefactor of mankind.” And the magician-comedy-political team of Penn and Teller said he was “the greatest human being who ever lived.”

He deserved every award and accolade - and merited far more fame in the United States than he received, though he was well known in India, Mexico and Pakistan, where his work had made such a difference.

Norman was also a devoted family man and educator. He served as Distinguished Professor of International Agriculture at Texas A&M University into his nineties. A year and a half ago, he gladly spent 40 minutes on the telephone with my daughter, who interviewed him for a high school freshman English “true hero” paper - and did so just after returning from the hospital and on the one-year anniversary of his beloved wife Margaret’s death.

He told my daughter it was because of Margaret, “and her faith in me and what I was doing, that we were able to live in Mexico, under conditions that weren’t nearly as good as what we could have had in the United States, and I was able to do my work on wheat and other crops.”

I sent him occasional articles, and we talked every few months, about biotech, global warming, malaria eradication, some new scientific report one of us had seen, or some website he thought I should visit. As we wrapped up our early August chat, we promised to talk again soon. Sadly, he entered a hospice and passed away before that could happen.

His mind was “still as clear as ever,” his daughter Jeanie told me, but his body was giving out. To the very end, Norman was concerned about Africa and dedicated to the humanitarian and scientific principles that had guided his life and research, and earned him the 1970 Nobel Peace Prize.

Norman left us a remarkable legacy. But as he told my daughter, “There is no final answer. We have to keep doing research, if we are to keep growing more nutritious food for more people.”

The world, its climate and insect pathogens will continue to change. It is vital that we sustain the incredible agricultural revolution that Norman Borlaug began.

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality, and author of Eco-Imperialism: Green power ∙ Black death.

9/18/2009

In only 24 hours, the story has gone viral.

Here’s what CBS News is reporting:

The Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent.

A previously unreleased analysis prepared by the U.S. Department of Treasury says the total in new taxes would be between $100 billion to $200 billion a year. At the upper end of the administration’s estimate, the cost per American household would be an extra $1,761 a year.

This FOIA story has been highlighted by the Drudge Report, Breitbart, The Weekly Standard, and the Politico.

To read the internal Treasury Department documents, click here.