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Do green energy and green jobs mandates run counter to World Trade Organization rules?  Japan says “yes” in relation to Canada’s program for renewable energy generation and green jobs in Ontario. Japan is complaining to the WTO that Canadian measures that mandate domestic content requirements for renewable energy generation equipment are inconsistent with WTO rules because they discriminate against equipment produced outside of Ontario and also represent a subsidy prohibited by the WTO. The country has asked the WTO for a formal consultation with Canada on the issues it raises in its September 13, 2010 filing. Consultations are often the first step in trying to resolve an issue before a country opens an official case with the WTO’s dispute settlement body.

Primarily Japan’s complaint hits Canada’s domestic content requirements in its “feed-in tariff” (FIT) program for Ontario, which requires that the renewable energy equipment, such as solar panels, wind turbines, biomass, and waterpower generation equipment, be produced in Ontario in whole or in part. (Feed-in tariffs are renewable energy payments that electric grid utilities obligate themselves to pay to purchase electricity generated from renewable sources.)  Under the program guaranteed prices for renewable energy electricity production are provided through long-term contracts.

According to a provincial government backgrounder on FIT, the domestic content requirements are intended to support “new green jobs in Ontario”:

Domestic content requirements for both FIT and microFIT projects are intended to help support the creation of 50,000 new green jobs in Ontario. MicroFIT projects will help create new local businesses and green jobs as demand grows for technologies such as solar panels, wind turbines, biomass and waterpower generation equipment, and for Ontarians who can design, build, install, operate and maintain these technologies.

And the domestic content requirements can be very specific (and somewhat ridiculous).   Here, for instance, is the one for silicon ingots and wafers:

Silicon ingots and wafer, where silicon ingots have been cast in Ontario, and wafers have been cut from the castings by a saw in Ontario.

From my quick review of the Canadian program, Japan seems to have a real cause for its complaint. Other countries looking to follow Canada’s example for green jobs creation should be wary about including their own protectionist measures.

H/T/ Julie Walsh

Soon the U.S. Circuit Court for Appeals in Washington D.C. is expected to address legal challenges (brought by the Competitive Enterprise Institute, among others) to the EPA’s plan to regulate greenhouse gases under the Clean Air Act. In the meantime, CEI this week filed a motion to delay the implementation of the regulations until the Court makes a decision. To read the motion, click here.

What state ranks third in unemployment, second in foreclosures, has the nation’s worst credit rating, is running a $19 billion deficit — yet insists on spending billions on a greenhouse gas emissions reduction plan that can’t possibly impact global warming?

Yes, it’s California, land of the Governator, who four years ago signed a bill that will shortly begin saying “Hasta la vista, baby!” to perhaps a million jobs. Yet there’s hope the prosperity terminator can be stopped, with Prop 23 to be voted on in November.

Read about how incredibly bad the legislation is and how the state foisted it on an ignorant (not stupid) public in my new article, “California’s Jobs Terminator” at Forbes.com.

What could Rosh Hashanah have to do with environmental activism? My colleague Sam Kazman found out last year, listening to a sermon with a surprise twist. You can read about the incident in the book High Holiday Stories by Nancy Rips.

The Environmental Protection Agency’s effort to regulate carbon dioxide as an air pollutant is currently garnering most of the attention from the agency’s critics, but it is far from the only problematic EPA regulation in the works. Another proposal that also deserves strong opposition is the agency’s attempt to label coal combustion byproducts (CCBs) as hazardous waste. Doing so is not only environmentally unnecessary but downright counterproductive, and would raise energy costs and kill jobs to boot.

Like several other Obama administration regulations, this extreme proposal goes well beyond anything contemplated under Bush or under Clinton. In fact, it was the Clinton administration EPA that concluded in 2000 that CCBs, chiefly the fly ash from burning coal to produce electricity, should be categorized as non-hazardous and handled in a manner not unlike municipal solid waste. The Obama administration has offered no convincing evidence that this determination was wrong and that CCBs pose a public health threat. Nonetheless, it is moving forward with the hazardous proposal.

A hazardous designation would not only raise CCB handling and disposal costs, but would put an end to their beneficial uses. Large volumes of fly ash are added to concrete, both stretching the supply of this ubiquitous construction material as well as improving its quality. Another kind of CCBs can be used in wallboard, taking the place of mined gypsum. Fully 44 percent of the 136 million tons of CCBs produced annually are put to good use, and the percentage has been growing. No actual problems have emerged with the use of recycled CCBs in these materials.

However, if EPA slaps the hazardous label — and attached stigma — on CCBs, such uses would very likely come to an end due to liability concerns — imagine the field day tort lawyers would have over supposedly toxic sidewalks and poisonous walls.

Thus, a hazardous designation would almost certainly preclude any productive uses of CCBs. As a consequence, more virgin concrete would have to be made, and more gypsum mined. All the attendant energy and other resource inputs as well as emissions associated with these processes would increase — a clear negative for the environment.

From the coal-fired utility standpoint, a hazardous listing would transform CCBs from a valuable byproduct to a costly liability. Many new disposal sites would have to be created and maintained. Half the nation’s electricity is generated from coal, thus the higher electricity generation costs would impact tens of millions of homeowners and businesses. Some coal-fired power plants would have to shut down completely – indeed, a hazardous designation for CCBs fits in perfectly with the Obama administration’s larger anti-coal agenda.

Employment would face a painful double whammy from a hazardous designation. The National Association of Manufacturers estimates that 2,000 of its member manufacturing companies may be involved in using CCBs in the products they make. For the rest, the resultant higher energy costs would further hamper competitiveness and growth. Either way, the rule would reduce manufacturing jobs.

Back in 2000, the EPA wisely concluded that it did “not wish to place any unnecessary barriers on the beneficial uses of these wastes, because they conserve natural resources, reduce disposal costs, and reduce the total amount of waste destined for disposal.” Too bad this kind of common sense has all but disappeared at the Obama EPA.

Unemployment went back up to 9.6%, as the nation shed 54,000 jobs in August.  Yet Obama calls this “Recovery Summer.”  This is the same Obama who complained about the economic recovery in 2004 being jobless because unemployment was at 6 percent.  If you include discouraged workers, unemployment may be as high as 17 percent.

Earlier, governors warned that ObamaCare will increase unemployment.  Indiana’s governor said it will wipe out thousands of jobs in his state by raising taxes on medical device manufacturers.  It will also kill jobs by imposing huge record-keeping burdens on small businesses, requiring them to file IRS forms over even small purchases.

Employers are afraid to hire new employees because of looming new burdens, such as the global-warming regulations being drafted by the EPA, which could wipe out at least 800,000 jobs in the short run, and far more in the long run.  They also worry about costly new Congressional mandates, such as global-warming legislation backed by liberal Senators, which would provide corporate welfare for some businesses, but impose heavy burdens on many others.  Capping greenhouse gas emissions isn’t cheap — Obama himself told the San Francisco Chronicle that under his cap-and-trade plan to fight global warming, Americans’ electricity bills would “skyrocket,” and coal power plants that now provide much of the nation’s energy would go “bankrupt.” Although Obama and other backers of this “cap-and-trade” concept claim it will cut greenhouse gas emissions, it may perversely increase them by driving industry overseas to places with fewer environmental regulations, resulting in dirtier air, and damage to forests and water supplies.

The Congressional Budget Office has repeatedly admitted that Obama’s $862 billion stimulus package will shrink the economy “in the long run.”  The stimulus contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.  Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama.  The biggest-spending countries have suffered worst in the recession. The stimulus package wiped out jobs in America’s export sector, while giving “green jobs” funding to foreign firms.

As discussed in my recent post “Obama’s EPA: School Marms R Us,” EPA and the National Highway Traffic Safety Administration (NTSHA) are proposing to revise the mandatory fuel economy label or “sticker” affixed to new cars to include letter grades based on the car’s fuel economy and carbon dioxide (CO2) emissions. Electric vehicles and plug-in hybrids would get an A+; the biggest, heaviest, gas guzzling SUVs would get a D.

To view the current sticker, click here. To see what the tut-tutting scolds at EPA and NHTSA want to replace it with, click here.

 Among other rationales for the new sticker design, the agencies claim that adding letter grades will help consumers make smarter purchases by combating something called the “MPG Illusion.”

The MPG Illusion refers to the common misperception that fuel savings from mpg increases are linear. People often assume that each additional 1 mile per gallon increase in a vehicle’s fuel economy reduces fuel consumption and gasoline expenditures by the same amount. Hence, some may conclude, if they can’t afford (or simply don’t want) a Toyota Prius, Chevy Volt, or some other high-mpg vehicle, there’s no point in buying a car with only modestly better fuel economy than their current vehicle. In reality, fuel consumption avoided and dollars saved decrease as mpg increases. Which is to say, the biggest fuel savings come from modest fuel-economy improvements in the lowest mpg vehicles. Some hypothetical (indeed fanciful) examples will make this crystal clear.

Suppose that your current car gets only 1 mile per gallon, you drive 100 miles per week, and gasoline costs $3.00 per gallon. This means you consume 100 gallons and spend $300.00 per week. If you replace that car with a 2 mpg vehicle, you’ll consume 50 gallons and save $150.00 per week. At the very bottom end of the scale, even a 1 mpg increase in fuel economy yields big savings.

Suppose now that your current car gets 99 mpg, you drive 100 miles per week, and gas costs $3.00. This means you consume 1.01 gallons and spend $3.03 per week. If you replace that car with a 100 mpg vehicle, you’ll consume 1 gallon and save 3 cents per week. At the very top of the fuel economy scale, the fuel and cost savings from an extra 1 mpg are negligible.

Turning to more realistic examples, EPA and NTSHA calculate (p. 28) that replacing a 10 mpg vehicle with a 15 mgp vehicle saves 33 gallons of gas for every 1000 miles driven whereas replacing a 30 mpg vehicle with a 35 mpg vehicle saves only an additional 5 gallons of gas for every 1000 miles driven. The same increase in fuel economy — in this case, an extra 5 mpg – saves more than six times as much fuel if the vehicle replaced gets 10 mpg rather than 30 mpg.

Professors Rick Larrick and Jack Soll of Princeton University put the MPG Illusion on the map when they published an article about it in Science magazine. They clearly explain the basic arithmetic in this Youtube video. Their illustrative case assumes a motorist who drives 100 miles per week. If the motorist has a 10 mpg vehicle and switches to a 20 mpg vehicle, he’ll cut his weekly fuel consumption from 10 gallons to 5 gallons — a savings of 5 gallons. If the motorist has a 25 mpg vehicle and switches to a 50 mpg  vehicle, he’ll cut his weekly fuel consumption from 4 gallons to 2 gallons — a savings of only 2 gallons.

“The key insight,” says Larrick, “is that improving inefficient cars, that have low mpgs, by even low mpg increases, saves a lot of gas.” Soll elaborates: “If you’re comparing two vehicles, one that gets 12 miles per gallon and the other that gets 15 miles per gallon, if you drive 10,000 miles in a year, you’ve saved about 170 gallons of gas [in the 15 mpg vehicle], and that comes out to be about $700.00 at $4.00 a gallon. So this [savings] is a significant amount even though the jump from 12 to 15 [mpg] may look pretty small.”

To counter the MPG Illusion, Larrick and Soll advise policymakers to express fuel economy in terms of the amount of fuel consumed per unit of distance traveled. Expressing fuel economy in the conventional way, as miles per gallon, leads people to “undervalue small improvements on inefficient vehicles” and “underestimate the value of removing the most fuel inefficient vehicles,” the researchers argue in Science magazine.

This, of course, is music to the ears of the anti-SUV crowd. Greenies would love to believe that the market for SUVs is sustained by an “illusion.” Because if that is so, then EPA and NHTSA can depress SUV sales just by making simple changes in how fuel-economy information is presented — just by redesigning the sticker! 

Years of SUV-bashing, fuel-economy prosyletizing, climate-change scaremongering, and high gasoline prices have failed to kill SUV sales. Could that have something to do with the attributes of the vehicles — their size, safety, and utility? I mean, there are objective differences between SUVs and cars greenies insist are “smart.” Just have a look! Nothing illusory about that.

If the MPG Illusion has anything to do with SUV sales, then you gotta ask: Who’s responsible for foisting the illusion on the public? Answer: the very people who’ve tried to brow beat us into believing that the only vehicle attribute worth considering is its mpg — the preachers and proselytizers of fuel economy! There’s no escaping the law of unintended consequences.

EPA and NHTSA  propose to combat the MPG Illusion in two ways. First, the sticker will estimate how many gallons of fuel the car will consume per 100 miles (as per Larrick and Soll’s advice). Second, the sticker will carry a letter grade. Presumably (the agencies don’t spell it out), EPA and NHTSA expect that bad grades will stigmatize gas guzzlers and discourage people from buying them.

Although the first option may counteract the MPG Illusion, the second will enhance it. As Larrick and Soll show, there is only a small difference in fuel savings between a 25 mpg car and a 50 mpg car. However, in the proposed EPA/NHTSA ratings (p. 37), the 25 mpg car gets a B and the 50 mpg car gets an A-. As anyone knows who has ever applied to college, an A- GPA is way better than a B GPA. The grading system implies that the biggest fuel savings are achieved at the top end of the scale.

On the other hand, a 14 mpg vehicle gets a C- whereas a 17 mpg vehicle gets a C. That 3 mpg increment is a big deal in fuel savings, according to Larrick and Soll. Yet how many car buyers will be impressed because a particular vehicle is rated C rather than C-? Except in jest, I’ve never met anyone who boasted of getting solid Cs in high school or college.

In short, the proposed EPA/NHTSA grading system perpetuates the MPG Illusion, which, unfortunately for fuel-economy zealots, cuts both ways. The illusion of linearity not only under-values savings from fuel-economy improvements in low-mpg vehicles, it also over-values savings from fuel-economy improvements in high-mpg vehicles.

EPA and NHTSA, apparently, want to manipulate the MPG Illusion rather than actually dispell it. They don’t like the illusion when (as they believe) it promotes SUV sales, but they like it when (as they hope) it promotes hybrid, plug-in hybrid, and electric vehicle sales. But the attempted manipulation fails, because the grading system, like the MPG Illusion, both over-values high-end mpg improvements and under-values low-end mpg improvements.

Grading cars actually means grading the people who buy them. People who buy cars with super-low or zero emissions are A or A+ people. Those who buy gas guzzlers wear dunce caps. The South Park spoof on the “Toyonda Pius,” Smug Alert, all-too-accurately depicts the greener-than-thou pretension of EPA and NHTSA’s proposed grading system.

Last week, the Obama Administration filed a brief  on behalf of industry petitioners urging the Supreme Court to vacate an appeals court decision (State of Connecticut et al. v. American Electric Power et al.) that would allow States and private parties to sue coal-burning electric utilities for their alleged contribution to global warming-related “injuries.”

The brief clearly lays out the absurdities of attempting to regulate greenhouse gases via common-law public nuisance litigation. Because global warming is, well, global, practically anyone on Earth could claim to be a victim. And because companies emit carbon dioxide (CO2) only as a byproduct of providing goods and services (electricity, cars, food, medical care, bites of information, etc.) to people, practically everyone on the planet could be sued as a contributor to the alleged injuries. In the memorable words of South Park’s hilarious global warming episode, Two Days Before The Day After Tomorrow, “We all broke the dam!”

In addition, the Obama brief points out that, “Establishing appropriate levels for the reductions of carbon dioxide emissions from power plants by a ’specified percentage each year for at least a decade’ (as Plaintiffs request), would inevitably entail multifarious policy judgments, which should be made by decision-makers who are politically accountable, have expertise, and are able to pursue a coherent national or international strategy — either at a single stroke or incrementally.”

Yet the brief stops short of reaching the obvious conclusion implied by its argument, namely, that climate policy is a “non-justiciable political question.” Instead, it advises the Supreme Court to direct the court of appeals to reassess its decision on “prudential” grounds. Rather than seek a decision that would preempt all future CO2 litigation, the brief instead seeks to put one particular CO2 lawsuit on ice.

I smell a rat. The Administration, I suspect, does not want the Court to rule that the political question doctrine precludes public nuisance litigation against CO2-emitters, because it wants the only solid, durable shield against litigation chaos to be the EPA’s “displacement” of common-law injury claims via the agency’s endangerment rule and the ensuing regulatory cascade.

Just as the Administration used the endangerment rule to try and spook Congress and industry into supporting cap-and-trade, it is now using CO2 litigation to try and spook them into supporting — or at least not aggressively attacking — EPA regulation of greenhouse gases via the Clean Air Act. 

In short, as I discuss in a column this week in Pajamas Media, the Administration needs to keep the prospect of CO2 litigation alive in order to sustain the ”greenhouse protection racket” — the strategy of regulatory extortion — on which warmists increasingly rely to promote their agenda.

The Obama Administration’s EPA and National Highway Traffic Safety Administration (NTSHA) are proposing new rules “labeling each passenger car with a  government letter grade from A to D based on its fuel efficiency and emissions,” the Wall Street Journal reports. The new rules “would be the most substantial changes in 30 years to the familiar price and mileage labels afixed to new cars on sale at dealership,” the article continues. Only in the make-work world of bureaucrats would the addition of the letters A, B, C, or D to product labels be considered “subtantial changes.”

The WSJ goes on to point out the obvious: “Currently the labels must show how many miles per gallon a car gets and its estimated annual fuel costs. Under the rules proposed Monday, new labels would carry a letter grade assigned by regulators.” Electric vehicles and hybrids would get the highest grades while big, heavy, gas-guzzling SUVs would get the lowest grades. “We think a new label is absolutely needed to help consumers make the right decision for their wallets and the environment,” explained Gina McCarthy, EPA’s assistant administrator for air and radiation.

“Absolutely needed” — as in, we’d be lost without them.

The proposed rules imply two judgments about Americans. One is that we’re too stupid to understand how miles-per-gallon and estimated annual fuel costs affect our wallets. Our math skills are so poor that quantitative information must be supplemented with letter grades labeling “this car good, that car bad.”

The second judgment, closely related to the first, is that Americans are school children and EPA/NHTSA are the Nation’s teachers. The agency folks apparently think that no matter how old we get, we still want to be teacher’s pet.

I propose an alternative rule — a “substantial” change in the titles of both agencies to ”School Marms R Us!”

Am I going to comment on the proposed rule? Maybe I’ll just submit a bumper sticker with the words: “Honk if you’ve outgrown school marms.”