Politics

Compare and contrast this line in a speech at the Democratic National Convention last night:

“Democrats don’t alienate, isolate, exclude or demonize; and we don’t manufacture fear.”   —California Senate President Pro Tem Kevin De Leon, in a speech at the Democratic National Convention, 25th July 2016, https://www.youtube.com/watch?v=qKhNWIPmfcM

With a few quotes from the “Web of Denial” speeches by Senate Democrats on the Senate floor two weeks ago:

“Welcome to the web of denial. Thank you to those who are working to expose it. It is a filthy thing in our democracy.”  —Senator Sheldon Whitehouse (D-RI), in a speech on the Senate floor, 11th July 2016, Congressional Record, page S4952

“These front groups are paid to spin a web of denial wrapped in ideology with the aim of purposely deceiving the public about the dangers of climate change.”   —Senator Jeanne Shaheen (D-NH), in a speech on the Senate floor, 12th July 2016, Congressional Record, page S4987

“So it seems that while CEI has changed its client, it is still in the exact same business of selling lies and selling out the health and the future of ordinary Americans.”  —Senator Jeanne Shaheen, 12th July, Congressional Record, page S4989

“But this past May, William Happer was a signatory on a misleading, full-page ad in the New York Times.  The ad, placed by another thread in the web of deceit, the Competitive Enterprise Institute, attacked the reasonable efforts of New York attorney general Eric Schneiderman and a coalition of other attorneys general united for clean power who are investigating more than 100 businesses, nonprofits, and private individuals to see if they misled the public about climate change.”  —Senator Edward Markey (D-Mass.), in speech on the Senate Floor, 12th July 2016, Congressional Record, page S5012

 

The Republican National Convention on 18th July officially adopted their 2016 party platform.  Senator John Barrasso (R-Wyo.) chaired the platform committee; and the co-chairs were Oklahoma Governor Mary Fallin and Representative Virginia Foxx (R-NC).

Notably, the GOP platform states that the Paris Climate Treaty cannot bind the United States unless it is ratified by the Senate.  The party also demands immediate defunding of the UN Framework Convention on Climate Change in accordance with Public Law 103-236.  It opposes a carbon tax and subsidies for politically-favored types of energy.

On regulations, the platform says Republicans will prohibit EPA from regulating carbon dioxide and repeal the “Clean Power” Plan.  It also vows to block the hydraulic fracturing rules, end the misuse of the Endangered Species Act to stop resource production, and reform the National Environmental Policy Act permitting process.

Perhaps most interestingly, the Republican Party now officially supports dismantling the Environmental Protection Agency: “We propose to shift responsibility for environmental regulation to the states and to transform the EPA into an independent bipartisan commission, similar to the Nuclear Regulatory Commission, with structural safeguards against politicized science.”  In addition: “ We will strictly limit congressional delegation of rule-making authority, and require that citizens be compensated for regulatory takings.”

On energy production, the platform contrasts its support for more domestic production of all types of energy (that don’t require subsidies) with the Democrats’ call to “keep it in the ground.”  It states that the “Democratic Party’s campaign to smother the U. S. energy industry takes many forms, but the permitting process may be its most dangerous weapon.”  Permitting delays for oil and gas production on federal lands are cited as the prime example.

Further in regard to federal lands, for the first time, the Republican Party supports transferring federal lands (which comprise over 640 million acres or nearly 30% of the country) to the states.

The Philippine Daily Inquirer reported that President Rodrigo Duterte announced on 18th July that the Philippines would not ratify the Paris Climate Treaty.  According to the story by Marlon Ramos, “the president said a foreign ambassador recently reminded him of the country’s commitment to limit its carbon emissions.”  Duterte continued that he was angry and wanted to kick the ambassador.

President Duterte explained why: “We have not reached the age of industrialization. We’re now going into it. But you are trying to stymie [our growth] with an agreement that says you can only go up to here.  That’s stupid. I will not honor that.”

He continued: “Now that we’re developing, you will impose a limit?  That’s absurd.  That’s how very competitive and constricted our lives [are] now.  It’s being controlled by the world, it’s being imposed upon us by the industrialized countries. They think that they can dictate the destiny of the rest of the [world].”

The Philippines’ Nationally Determined Contribution to the Paris Treaty is to reduce emissions by up to 70% by 2030.  That commitment was made by the previous administration, which also approved building 29 new coal-fired power plants over the next decade.  Duterte was elected president on 9th May 2016 by an overwhelming majority and took office on 30th June.

Fifteen Republican state attorneys general led by West Virginia AG Patrick Morrisey sent a letter to House and Senate leadership on 11th July that calls on Congress to eliminate “burdensome and illegal regulations by strengthening the Administrative Procedure Act (APA).”  The letter received very little attention in the press when it was sent, but on 19th July there was an article in the West Virginia Record and another by Michael Bastasch in the Daily Caller.

The first paragraph summarizes the AG’s objections to federal regulatory overreach:

“As the chief legal officers of our States, we are concerned about the mounting costs that unlawful federal regulations—advanced in violation of the Administrative Procedure Act—impose on citizens, businesses, and state and local governments.  With seemingly increasing frequency, federal agencies are: (1) issuing guidance documents as a way to circumvent the notice and comment process; (2) regulating without statutory authority; (3) failing to consider regulatory costs; and (4) failing to fully consider the effect of their regulations on States and state law.”

The letter continues with a summary of their request:

“We are encouraged that the U. S. House of Representatives and the U. S. Senate recently have considered legislation directed toward resolving some of these concerns.  We write today to urge Congress to go further and take concrete action to ensure that federal agencies are in fact providing opportunity for notice and comment for all binding agency requirements, acting within their delegated authority, and always rigorously assessing the costs of their regulations.”

The letter notes that guidance documents, interpretive rules, and policy statements are not subject to the APA because in theory they are not binding.  But in practice, many of these quasi-rules are binding.  Wayne Crews, my CEI colleague, wrote a significant study, Mapping Washington’s Lawlessness, published last December that catalogues the extent of these binding non-rules.  And here is a recent interview with Wayne on what he has named “regulatory dark matter.”

At EcoWatch, Megan Quinn Bachman advocates creating state-owned banks to fund “green electricity—and other sustainability projects.”  Unfortunately, government-owned banks have a sad history of subsidizing ecologically-destructive boondoggles.  Bachman points to one of the few examples of state banks that managed to turn a profit, the Bank of North Dakota.  But its funds have gone to fossil-fuel projects, not green energy, and effectively subsidized some fossil-fuel projects through below-market rates.

As bank-regulation expert Mark Calabria notes in the New York Times, advocates of state banks “might point to the Bank of North Dakota, currently the only state-run and state-owned American bank. Of course that ignores that in the 1800s there were a number of state-owned U.S. banks. They all failed miserably, and at great expense to the taxpayer. They were also magnets for corruption. But that’s history. Currently the Bank of North Dakota is generally a well-run institution. It is also a massive subsidy to the fossil fuel industry. One need only look at its annual reports to see that the bulk of its below-market lending has been to the fossil fuel industry. It’s a case in point, illustrating that government-owned banks will tend to subsidize the powerful.”

Government ownership of other industries like agriculture also has had negative effects on the environment.  A classic example is in Soviet Central Asia, where the vast Aral Sea largely disappeared, leaving behind a vast ecologically-ruined wasteland after a massive government cotton project ravaged the regional environment.  As the London Daily Mail notes, “The shrunken sea has ruined the once-robust  fishing economy and left fishing trawlers stranded in sandy wastelands, leaning over as if they dropped from the air.  The sea’s evaporation has left layers of  highly salted sand, which winds can carry as far away as Scandinavia and Japan,  and which plague local people with health troubles.”

Cunning politicians use green rhetoric to push policies that actually harm the environment and the economy, the classic example being ethanol mandates (which recently enriched Wall Street speculators, some with ties to the Obama Administration).  While in the Senate, Al Gore, working with fat-cat lobbyists, “saved the ethanol” industry by pushing through big taxpayer subsidies for ethanol.  (Years later, he belatedly admitted that ethanol subsidies were a “mistake,” a harmful policy partly designed to appeal to “farmers in the State of Iowa,” which holds the influential Iowa caucuses that can make or break a Presidential campaign).

For cynical political reasons, the Obama Administration clings to ethanol mandates, backing them despite growing evidence that they increase world hunger and mortality, and harm the environment.

In 2008, a Washington Post editorial by two prominent environmentalists described how ethanol mandates have harmed the environment and spawned hunger across the world.   In “Ethanol’s Failed Promise,” Lester Pearson and Jonathan Lewis observed that “Turning one-fourth of our corn into fuel is affecting global food prices. U.S. food prices are rising at twice the rate of inflation, hitting the pocketbooks of lower-income Americans and people living on fixed incomes.  .  .Deadly food riots have broken out in dozens of nations.”  [click to continue…]

The New York Times ran a front page story Sunday  on a new outrage resulting from one of the biggest scams in America today, ethanol mandates, and how they have made American consumers poorer, while enriching Wall Street profiteers through ethanol credits.  The story is entitled “Wall St. Exploits Ethanol Credits, and Prices Spike,” and focuses on

the rapidly growing role of Wall Street banks in gaming the ethanol credits market. Ethanol credits (or RINs, as they’re called) were created by the Environmental Protection Agency and Congress as a way to assure the inclusion of ethanol in gasoline as an energy-saving measure. But gasoline producers who couldn’t or didn’t want to include ethanol could buy credits from those who did. . . In stepped the speculators, amassing millions of credits and making a killing on the wide spread between the bid and ask prices of the credits. Predictably, this drove the price through the roof: the credits, which cost 7 cents each in January, peaked at $1.43 in July and now are trading for 60 cents.

The net result is that consumers will pay at the pump, notes investment adviser David Kotok of Cumberland Advisors.  As he  observes, ethanol mandates are having very negative “geopolitical effects” as well.  He agrees that “Ethanol was a bad policy, primarily to buy and reward grain-state votes. It spurred grain planting to meet the mandate, but not fast enough, so prices called out for more. The poor were hurt overseas,” and unrest in the Middle East ensued.  As Kotok points out, ethanol is

a massive scam. Our national policy diverts 40% of the U.S. corn crop (14% of the global corn crop) in order to produce a fuel that requires almost as much energy to produce as it supplies. Our ethanol mandate has starved millions of people; I’ve watched it with my own eyes in many countries in my travels. A 2011 study by the National Academy of Sciences estimates that, since 2007, the expanding U.S. biofuels subsidy has fueled 20%-40% of the increase the world has seen in the prices for agricultural commodities. In a country like Guatemala, that means that tortilla prices double and egg prices triple. (Source: [New York Times]).  Ethanol damages engines, too — ask any user; I’ve seen it myself throughout the US, and Popular Mechanics concurs [Link]. Corn ethanol has poisoned our planet while it has lined certain private and politically connected pockets with billions. It has succeeded in raising our costs, for minimal net energy gains. . . .Global urban dwellers at the low end suffered again. . . .The spike in prices this year was a reaction to the shortage in corn caused by the drought last year. Rather than pay high prices for corn, blenders bought stockpiled RINs. The real story of the market was the explosion from $0.02 per RIN, when nobody wanted them, to $0.07 in August 2012 when the short corn crop became clear. This surge attracted the Wall Street players. They benefited when corn prices spiked again in Jan-Feb on the perception that South America crops would not clear the market before US crops came in in August-September. . . .Please remember that this all starts in the corn-farmed, politically charged Iowa caucuses. Which means, it is our sick and rotten political system that produces these behaviors.  That will likely continue until we repeatedly and mercilessly pound the politicians who have sold our nation down a river of ethanol.

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People who are unfamiliar with science — like President Obama — have erroneously blamed hurricanes on greenhouse gas emissions, even though they do not trigger more hurricanes.

Ironically, hurricanes may actually diminish due to greenhouse gases and aerosols, as the Washington Post and Daily Caller note. As the Washington Post points out, research suggests that “by the end of the 21st century, greenhouse gases will reduce tropical storm frequency.”  Right now, other emissions — aerosols — are already reducing the frequency of tropical storms such as hurricanes, notes the the Daily Caller:

Stricter pollution controls may lead to an increase in tropical storms in the Atlantic Ocean, according to an article published Sunday in the journal Nature Geoscience.

The article, written by scientists from the Met Office Hadley Center in the United Kingdom, suggested that environmental protection laws will lead to more hurricanes for at least 20 years, reports the New Scientist.

Nick Dunstone of the Hadley Center explained that man-made aerosols lead to longer low-level clouds over the ocean. The clouds keep the water temperature cooler and therefore less likely to birth hurricanes.

Dunstone specifically said that pollution controls that reduce aerosols will produce ”record numbers of tropical storms for the next decade or two.”

There also appears to be a direct correlation between the economy and hurricanes. During economic boom times, there is more pollution in the atmosphere due to industrialization, leading to lower numbers of hurricanes. Recession periods mean less aerosols and therefore more hurricanes.

This pattern has been seen with fewer hurricanes in the 1960s to the mid-1990s, versus higher numbers during 1930s through 1950s. The number drastically increased however in 1995 when aerosol bans went into effect. There were 28 hurricanes reported in 2008 and 19 every year since then.

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The lead article in the summer issue of Regulation magazine, the Cato Institute’s flagship publication, is titled “What is the right price for carbon emissions?”  The author is Bob Litterman, a Ph. D. economist who is currently a partner in a NYC-based hedge fund.

Here is Litterman’s conclusion: “It would be best to get started immediately by pricing carbon emissions no lower, and perhaps well above, a reasonable estimate of the present value of expected future damages, and allow the price to respond appropriately to new information as it becomes known.”

Litterman’s article is followed by four comments by Robert Pindyck, Daniel Sutter, Shi-Ling Hsu, and David R. Henderson.  Pindyck and Hsu are for a carbon tax; Sutter and Henderson are opposed.

These articles were described by someone at Cato as “exploring the case for a carbon tax from a free market perspective.”  But I don’t see anything resembling a free market case for a carbon tax being made in Litterman’s article or in the pro-carbon tax comments of Pindyck and Hsu.

Nor can I find anything in Litterman’s background or in the references in his article to suggest that he is a free market economist.  He was at Goldman Sachs in high positions for twenty-some years and is a member of the board of the World Wildlife Fund.  Goldman Sachs is one of the leading practitioners of crony capitalism.  The World Wildlife Fund supports a variety of command-and-control environmental and energy-rationing policies that help keep poor people poor around the world.

It appears that some people at Cato are warming to the idea of rule by experts.  Manipulating the tax code in order to remake society and force people to conform to some authoritarian agenda is really just another variant of central planning.  Rule by experts was criticized insightfully in a 1945 essay, “The Use of Knowledge in Society,” by Friedrich A. Hayek, the Austrian economist for whom the Cato Institute’s auditorium is named.  Hayek argued that rule by experts threatens human freedom.  In my own view, the proper “free market perspective” on a carbon tax is: No way in hell.

If you restrict the supply of something, the price will go up.  It’s one of the laws of supply and demand.  Thus, cap-and-trade energy rationing schemes drive the price of energy up, by capping the supply.  President Obama has conceded that in his unguarded moments.  In a January 17, 2008 interview with the San Francisco Chronicle, Obama said that “electricity rates would necessarily skyrocket” under his cap-and-trade plan to fight global warming.  He also said that under his plan, “if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them.”

But journalists are not economists, and often have difficulty understanding the most basic principles of economics.  (Some cannot even do basic math).  What is clear to any economist or any college graduate who has taken Econ 101 seems disputed or unclear to many journalists, who are more familiar with trendy fads in college English Departments, and left-wing critical race theory, than they are with basic economic truths.

So it is that PolitiFact Virginia erroneously rated as “mostly false” the claim that cap-and-trade would naturally lead to “higher” energy bills for Virginia households.  It admitted that “analyses of two measures that have been before in Congress in recent years concluded that cap-and-trade carries a cost for most consumers,” but then claimed that such costs could somehow be offset, even while capping energy use, and result in “an average lower cost for consumers.”  While their effects on the environment may be disputed, it is clear that they raise energy costs for consumers by reducing the supply of energy.  (As a CBS analyst once noted, a Treasury Department analysis pegged the cost of the Obama Administration’s cap-and-trade plan at $1761 per year per American household).

Whatever their theoretical merits, cap-and-trade schemes tend to become vehicles for vast amounts of corporate welfare and special-interest pork by the politicians who craft them, like the Congressional cap-and-trade energy bill backed by the Obama Administration.  That Obama-backed bill contained so many special-interest giveaways that it would have fleeced American consumers without helping the environment, as I explained earlier (it contained environmentally-harmful ethanol subsidies and could have driven industry overseas to countries with less environmental protections).

As Professor Glenn Reynolds notes, if you want to cut carbon emissions, you should eliminate regulatory obstacles to fracking, since fracking cuts carbon emissions far more than costly cap-and-trade regulations do.  By expanding access to clean natural gas, fracking is helping reduce both greenhouse gas emissions and air pollution. As Walter Russell Mead notes at The American Interest, “fracking is doing more to control carbon emissions than all the efforts of all the greens in the world. And by promoting American (and Chinese!) domestic energy production, it is doing more to lay the foundations of world peace than all the peace activists and disarmament campaigners in the world.” Fracking has “driven a natural gas boom in this country and dramatically cut the cost of the cleanest hydrocarbon energy source of them all,” contributing to cleaner air, not just lower greenhouse gas emissions.  It is also expected to greatly reduce our dependence on foreign energy.

As CNN notes, “U.S. carbon dioxide emissions are falling” thanks to things like fracking. “Europe, by contrast, has seen its energy-sector carbon emissions remain basically flat,” even though Europe operates under a costly “cap-and-trade scheme where emissions are capped at a certain level,” and “Europe has significantly higher taxes on energy.”  Countries like Germany have blocked fracking to produce clean energy, even as they cling to a failed cap-and-trade scheme that imposes huge costs while failing to substantially reduce greenhouse gas emissions.

Unfortunately, the Obama Administration has tightened restrictions on fracking, which is permitted under state law in many states.  But it has not been nearly as hostile to fracking as many liberal state governors and legislators, like North Carolina’s Bev Perdue.  By contrast, conservative governors and legislators have supported fracking, which has the potential to greatly reduce greenhouse gas emissions and air pollution.

Environmental Luddites oppose fracking, preferring draconian and utopian energy rationing schemes instead.  They hype non-existent or exaggerated risks associated with it, ignoring the complete lack of any evidence to date that it would harm the environment.

Environmental groups like the NRDC prefer rigid government restrictions on carbon emissions by factories, farms, and vehicles, even though such restrictions could cripple the economy.  If they can’t obtain that (through EPA regulations), then they’ll take a cap-and-trade limit on emissions.

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