Cooler Heads Digest

Green Bailout
Keith Johnson, Wall Street Journal, 3 October 2008

Carbon Audit: Can We Turn This Threat into an Opportunity?
Marlo Lewis, Open Market, 3 October 2008

Passive Aggressive CO2 Tax Treatment
Chris Horner, Planet Gore, 2 October 2008

Financial Storm Likely To Weaken Climate Pact
Alister Doyle, Reuters, 1 October 2008

EU Divisions Sharpen in Run-up to Major Climate Conference
Reuters, 1 October 2008

Want To Save the Planet? Hope for a Prolonged Financial Crisis
Henry Payne, Planet Gore, 1 October 2008

Wielding the Carbon Club
Lawrence Solomon, National Post, 30 September 2008

Will More Drilling Increase Energy Security?
Iain Murray v. David Abraham, Council on Foreign Relations web debate

News You Can Use
All Pain, No Gain

According to Leila Abboud of the Wall Street Journal, greenhouse gas emissions have increased 15 % in Norway since the country enacted the world’s first carbon tax twenty years ago. That’s slightly less than the increase in the United States over the same period.

Inside the Beltway
Myron Ebell

The Senate passed the Wall Street bailout bill by a vote of 74 to 25 on Wednesday.  Included in the Senate bill was the extension of tax credits for various types of renewable energy, including windmills and solar panels. The House voted on Friday in favor of the Senate bill by a 263 to 171 margin, after rejecting its own version on Monday by a 202 to 228 vote. The White House has indicated that President Bush will sign the bill into law as soon as possible. So the renewable energy industry can rest easy tonight in the knowledge that their taxpayer subsidies will not expire on January 1st.

The Vice Presidential Debate
Dumb and Dumber

If last night’s vice presidential debate is any indication, then the energy policies of Senator John McCain (R-Arizona) and Senator Barack Obama (D-Illinois) are virtually indistinguishable. For starters, both Senator Joseph Biden (D-Delaware) and Governor Sarah Palin (R-Alaska) used the term “free market” as a pejorative throughout the debate. Accordingly, they both endorsed windfall profits taxes to punish “big oil,” and they both want the government to waste taxpayer money on dubious sources of renewable energy. And while they differed on the causes of global warming, Biden and Palin championed energy rationing cap-and-trade schemes that would have the federal government seize the reigns of energy production in America. When it comes to energy policy, American voters don’t have much of a choice. Both candidates endorse statist measures that would raise energy costs and hurt the economy.

Around the World

The European Union’s promise to reduce its greenhouse gas emissions 20% by 2020 looks doubtful as member countries increasingly dilute their climate strategies to allay economic concerns.

Half the 2020 emissions reductions are supposed to come from the EU’s Emissions Trading Scheme (ETS), a continent-wide cap-and-trade scheme that would cover industrial users and suppliers of energy. The ETS occurs over three phases, but all the significant emissions cuts have been postponed until Phase Three, which starts in 2012. Yet phase three is already in dire straits, four years before it is set to begin. Two weeks ago, Germany, the EU’s largest economy, indicated that it will opt-out of phase 3 of the ETS, by granting heavy industry free carbon permits after 2013. In defending the policy, German Chancellor Angela Merkel said that she “could not support the destruction of German jobs through an ill-advised climate policy”.

In calling for industrial exemptions, Germany has been joined by Poland, which gets 95% of its electricity from coal. Hungary, the Czech Republic and the Slovak Republic have also expressed reservations about phase three of the ETS.

A major portion of the 2020 target would also derive from stringent fuel efficiency standards applied to all EU countries. This week, however, France proposed an auto emissions plan that both postpones and weakens the existing regulations. The French plan was hashed out with Germany over the summer, and it reflects the concerns of German’s powerful automaker lobby.

Across the States

Wisconsin Governor James Doyle (D) last week signed a partnership agreement with the German government to collaborate on renewable energy. Like most global warming statesmanship, the agreement is primarily a public relations stunt, and will produce little substantive policy. It does, however, raise serious legal questions, because Governor Doyle’s climate diplomacy could violate the Compact Clause of the U. S. Constitution.

Last week in California, Governor Arnold Schwarzenegger (R) signed S 375, which directs State officials to prioritize climate-friendly projects when awarding transportation funding. Next year transportation funds are projected to total $12 billion.