Emissions Trading No Solution; Rent Seekers Eye Profits From Kyoto

by William Yeatman on October 27, 1998

in Kyoto Negotiations, Science

Emissions Trading No Solution

The Clinton Administrations economic analysis of the costs of implementing the Kyoto Protocol rely heavily on the assumption that there will be unlimited emissions trading between the developed countries who are signatories to the UN Framework Convention on Climate Change. Many have criticized this assumption in light of the resistance to emissions trading from the European Union. It may be, however, that even with a full-blown emissions trading system little if any cost savings would result.

On October 23, the Competitive Enterprise Institute sponsored an economics briefing for congressional staff and media featuring Robert A. Reinstein, President of Reinstein & Associates International, and the former chairman of Working Group III and of Working Group II of the UN Intergovernmental Panel on Climate Change (IPCC).

Mr. Reinstein argued that even with full emissions trading there would not be enough emissions credits available to meet the demand. The demand for credits among OECD (Organization for Economic Cooperation and Development) countries would be between 1.8 and 3.1 billion tons of carbon dioxide equivalent, the largest part of which would come from the United States. The potential supply from non-OECD countries will be between 270 million and a little over 1 billion tons.

Reinstein also touched on some of the administrations other assumptions. The Clinton Administration claims, for example, that much of the reductions can be achieved easily and cheaply by increasing energy efficiency. It argues that many energy saving technologies are available and waiting to be taken advantage of. Reinstein pointed out, however, that energy prices were higher in years past, making investments in energy efficiency even more profitable than they are today, yet the investments werent made.

Rent Seekers Eye Profits From Kyoto

Many businesses have boarded the global warming bandwagon in anticipation of securing profit from government policies (known as rent seeking) to reduce carbon emissions. In a recent Washington speech, utility analyst Leonard Hyman with Salomon Smith Barney unabashedly promoted this notion. A sophisticated carbon dioxide trading system could be a cash cow for some businesses in a market that could reach a value of $13 trillion by 2050, claims to Hyman.

“Think of the trading opportunities in a market of that size,” he said. “Think of the new technologies required to help people lower their CO2 output in order to cash in on permit sales. Think of the surveillance, metering and compliance needs . . . The United States has the leadership position in almost all of the skills required to make this market work. Isnt this an opportunity for American financial and technological firms?” (The Electricity Daily, October 16, 1998)

Adaptation is Still the Best Policy

So far the debate on what to do about global warming has focused almost exclusively on reducing energy use. The Kyoto Protocol sets greenhouse gas emission targets for the participating countries. Other options are available, however, if global warming were to occur. In an article in Nature (October 22, 1998) several British researchers argue that “we should . . . be thinking seriously about how we can best adapt to climate change.”

Martin Parry, et. al., argue that even if the Kyoto Protocol is fully implemented it will only reduce the amount of warming by only 0.05 degrees C by 2050. And even if the participating countries reduced emissions by a massive 20 percent, warming would be reduced by only 0.1 degrees C by 2050. “These minor reductions in the expected warming mean that the projected impacts of change are barely affected,” say the authors.

Though the authors call for an international agreement on adaptation, another avenue along these lines would be to reduce the barriers in government policies which slow down or prevent individuals from adapting to changing conditions. The authors argue that to “ignore adaptation is both unrealistic and perilous.”

EPA Lacks Authority to Regulate CO2; Congress Boosts Green Funding; Big Business Bids for Early Emission Reduction Credits

by William Yeatman on October 27, 1998

in Kyoto Negotiations, Politics, Science

EPA Lacks Authority to Regulate CO2

Following the completion of the Kyoto Protocol, Carol Browner, Administrator of the Environmental Protection Agency (EPA), testified before Congress that the EPA possessed the authority to meet the targets set at Kyoto. She claimed that the EPA could, under existing law, characterize carbon dioxide as a pollutant and regulate it under the Clean Air Act (CAA).

A new report by the National Mining Association, CO2: A Pollutant? The Authority of EPA to Regulate Carbon Dioxide Under the Clean Air Act, analyzes the language, legal structure, and legislative history of the CAA to determine whether Congress intended for EPA to regulate carbon dioxide. The report concludes that Congress did not provide EPA the authority to regulate carbon dioxide. “Instead, Congress deliberately limited EPAs endeavors in this area to non-regulatory activities,” according to the report.

None of the CAA sections cited by the EPA as “potentially applicable” authorizes the agency to regulate carbon dioxide. The EPAs legal analysis relies entirely on general language contained in the CAA. But, contends the report, such language “cannot defeat the specific intent of Congress.” In 1990, Congress specifically debated and rejected proposals to allow EPA to regulate carbon dioxide. “Congress authorized EPA only to study certain greenhouse gases, not regulate them.”

Finally, the report argues that even if Congress had intended to give such power to the EPA it would still need to show that carbon dioxide “causes harmful effects to the public health, welfare or the environment.” The complexities of global warming and the “serious flaws in some of the fundamental evidence” would make it very difficult for EPA to support such a finding. For additional information contact John Grasser or Karen Batra of NMA at (202) 463-2651.

In a supporting study, the Greening Earth Society reviews “carbon dioxides effects on human health, welfare and the environment.” The study finds that: “There is no direct effect of any anticipated level of atmospheric carbon dioxide on human health,” and, “There is an overwhelming body of evidence that the direct effect of carbon dioxide on food production is highly positive.” For instance, “Carbon dioxide is currently increasing the vegetative biomass of the planet and has increased agricultural production by 10 percent.” The report can be obtained by contacting GES at (703) 907-6168.

Congress Boosts Green Funding

In a surprise move, Congress agreed to appropriate $193 million for the World Banks Global Environment Facility in the fiscal 1999 federal budget deal. The money, critics fear, may be used in part to induce the developing countries to participate in the global warming treaty inked in Kyoto, Japan. In addition, numerous environmental pressure groups, such as the World Wildlife Fund, contract with the GEF to implement carbon emissions reduction projects in the Third World.

The Senate had previously rejected any further funding for the GEF, and the House had voted to cut $47 million from the appropriation. But when the House and Senate met in conference committee, the massive increase was inserted as a provision to pay back “arrears,” Cooler Heads has learned. The amount reflects the difference between what the Clinton Administration pledged and what the Congress actually appropriated during the past three years.

“It will help improve the tone of discussions in Buenos Aires by putting more money on the table for clean projects,” according to Alden Meyer of the Union of Concerned Scientists (The Washington Times, October 22, 1998).

Big Business Bids for Early Emission Reduction Credits

The Presidents Council on Sustainable Development (PCSD) has sent President Clinton a set of principles that would give early credit to companies who voluntarily reduce greenhouse gas emissions. One of the principles would give credit for “legitimate and verifiable measures that reduce overall greenhouse gas emissions relative to defined benchmarks,” and calls for “all levels of government to lead the way in cutting emissions.”

The PCSD, created in 1993 by President Clinton, is a commission that advises the president on “sustainable development, economic, environmental, and equity issues.” The group is made up of representatives from industry, environmental groups and government officials. The letter to the President states that voluntary action “is justified entirely on its own merits because it will improve economic performance and will reduce local environmental pollution as well as greenhouse gases.”

Steve Percy, chairman and CEO of BP America Inc. and co-chair the PCSD task force, said, “Even before any binding treaties or other requirements are in place, Americas businesses, communities, government agencies, and individuals need to get ready to tackle the challenge of climate change” (BNA Daily Environment Report, October 28, 1998).

Knollenberg Amendment Weakened

On October 21, President Bill Clinton signed the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1999, which contains the Knollenberg amendment which bars the EPA from implementing the Kyoto Protocol before it is ratified by the U.S. Senate.

Already, however, the White House is seeking to turn the amendment into permission to regulate carbon dioxide. In a speech following the signing, Clinton stated, “I am pleased that the Congress modified the language in the Act concerning the Kyoto Protocol on global climate change and clarified what this language means in the Statement of Managers.

“In particular, the Congress made it clear that it does not intend to limit my Administrations ability to carry out common-sense actions to reduce greenhouse gas emissions; its intent, rather, is only to limit funding that would implement actions called for solely under the Kyoto Protocol.” (U.S. Newswire, October 21, 1998).

COP-4 Provisional Agenda and Annotations

by William Yeatman on October 21, 1998

in Politics

This addendum to the provisional agenda and annotations for the Conference of the Parties (COP) at its fourth session contains information on:

Documents that have been prepared for the session and documents from previous sessions that will be made available (annex I);

The proposed allocation of each item on the provisional agenda and the relevant documentation (annex II); and

A tentative schedule of meetings for the COP plenary, the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI) (annex III).

Click here for the full document (PDF).

Little Progress Expected in Buenos Aires

by William Yeatman on October 21, 1998

in Kyoto Negotiations

The fourth Conference of the Parties (COP-4) will meet in Buenos Aires, Argentina on November 2-13 to further discuss greenhouse gas reductions. According to Melinda Kimble, acting assistant secretary of state, there probably will be little progress toward reaching the administrations goals. “Buenos Aires has the potential to be a small step forward,” Kimble testified on October 6 before the House Commerce Subcommittee on Energy and Power.

The biggest hurdle is emissions trading. Different countries have different ideas on what an emission trading system would look like under the Kyoto Protocol though views have converged in recent weeks.

Kimble was questioned about the administrations definition of “meaningful participation” by developing countries. She admitted that the administration has “no definition.” But, she said, it will not be a “one-size-fits-all solution.” Targets for poorer countries with low emissions will be different than for richer developing countries with higher emissions (BNA Daily Environment Report, October 7, 1998).

Government Study Contradicts Administrations Cost Estimates; Energy Conservation May not be Such a Good Deal

by William Yeatman on October 19, 1998

in Kyoto Negotiations

Government Study Contradicts Administrations Cost Estimates

Several studies done by private, econometric modeling firms show the costs of complying with the Kyoto Protocol to be high. Critics argue that these studies cannot be trusted given that they were funded by the fossil fuel industry. A new government study, however, has just been released which validate the findings of the industry-funded studies, and counters claims by the Clinton Administration the costs will be negligible.

The report by the federal Energy Information Agency (EIA) “assumes that the U.S. State Departments assessment of the accounting of carbon-absorbing sinks and offsets from reductions in other greenhouse gases will reduce the binding U.S. emissions target to 3 percent below the 1990 level of emissions,” rather than the stated target of 7 percent below 1990 levels.

The EIA estimates that the Kyoto Protocol will cost the U.S. economy $64 billion per year. Under a carbon tax, energy prices will double by 2010 and then “decline to 79 percent above reference case price levels in 2020.” Gasoline prices could rise by 53 percent and electricity prices could rise by as much as 86 percent by 2010. Overall the EIA study paints a rather gloomy economic picture under the Kyoto Protocol. The study is available on the web at http://www.eia.doe.gov/oiaf/kyoto/kyotorpt.html

Energy Conservation May not be Such a Good Deal

One of the solutions to global warming, according to Clinton Administration officials, is the greater use of energy efficient technologies. Weve been told that all of the technologies necessary to cheaply reduce fossil fuel use are already available and its just a matter of using them. One of President Bill Clintons favorite examples of energy saving technology is energy efficient fluorescent lighting.

It is generally argued that investments in energy conservation measures, such as replacing incandescent light bulbs with fluorescent light bulbs or insulation, pays for themselves in a short period of time. Some estimates show very high rates of return to energy conservation investments. Advocates of energy efficiency, however, have been puzzled by the lack of consumer interest in such potentially lucrative investment. This “Energy Paradox,” they believe, can best be explained by invoking consumer ignorance, arguing that they “apply very high discount rates to these investment opportunities.” A solution to this problem is an aggressive public education campaign.

In a paper delivered at a conference sponsored by the American Enterprise Institute on September 14, Gilbert Metcalf, an economist at Tufts University, and Kevin Hassett with the American Enterprise Insitute, give a different explanation. They believe that the “engineering estimates of potential energy savings which are often provided by the manufacturer of the relevant product misrepresent savings because they are based on highly controlled studies that do not perfectly apply to actual realized savings in a representative house.”

The paper, Measuring the Energy Savings from Home Improvement Investments: Evidence from Monthly Billing Data, estimates the return on attic insulation. One study found that the returns “can easily be on the order of 50 percent per year.” Metcalf and Hassett, however, find actual returns to be around 9.9 percent per year.

For a variety of reasons consumers rarely achieve the level of savings theoretically possible. They conclude, “We find that the data which may well be the most comprehensive yet applied to this question provide little evidence of an Energy Paradox.”

Global Warming/Hurricane Link Debunked; New Evidence Shows Abrupt Global Climate Change

by William Yeatman on October 19, 1998

in Science

Global Warming/Hurricane Link Debunked

The Cooler Heads coalition sponsored a science briefing for media and congressional staff on October 9, featuring Dr. William Gray, professor of atmospheric science at Colorado State University. Gray, the foremost expert on hurricanes in the U.S., spoke about the link between global warming and hurricanes.

According to Gray, hurricane activity follows a natural 20 to 40 year cycle that is correlated to changes in ocean currents. The 1940s and 1950s, for example saw many land-falling tropical storms. From 1947-1960 there were 14 land-falling storms, but from 1960-1988 there were only 2. We are now in a period of heightened hurricane activity.

The mechanism that controls the Earths most important and largest ocean current, known as the thermohaline circulation, is salinity. The Atlantic Ocean is much saltier than other oceans because there is more evaporation than rain. This salty (and warmer) water travels north where it sinks due to its higher density, cools and returns to the south. There it warms and becomes saltier, beginning the process once again.

When salt content is high the ocean current is strong, pushing the salt particles through the system rapidly, preventing the build up of salt. This weakens the ocean current leading to greater salinity which in turn strengthens the current again. This occurs in 20 to 40 year cycles, according to Dr. Gray, is entirely natural, and has been occurring for thousands of years. When salinity is high and the thermohaline circulation is strong this warms up the North Atlantic and hurricanes become more frequent and more intense. When the circulation is weak the opposite is true.

Dr. Gray also addressed the problems of climate modeling. He said that numerical modeling has been a great success for forecasting the weather for five to ten days into the future. This is because forecasters can measure the wind patterns that are there in the present and ride those out for a few days. After a while, however, the current energy fields no longer hold and predictive power plummets. Another problem is the “butterfly effect” where small modeling errors either in the measurements or in the physics grow over time becoming nonlinear and the whole thing “blows up on you.”

The greatest problem with the models, however, is the failure to correctly model water vapor feedback, Gray said. Water vapor feedback accounts for 85-90 percent of the warming in the models, according to Dr. Gray. James Hansen a well-known climate modeler assumes that upper level humidity goes up 50 to 60 percent in his model. Dr. Gray believes that as carbon dioxide in the atmosphere increases there is a slight reduction in water vapor to balance the carbon dioxide pick up.

Finally, Dr. Gray made some predictions. He believes that we are entering a period of weakened thermohaline circulation which means that we will see fewer land-falling hurricanes and a slight decrease in global temperatures over the next 2 to 4 decades. He also predicted that there will be fewer El Nio events over the next 20 to 30 years.

New Evidence Shows Abrupt Global Climate Change

The global warming debate has several facets. One of the most important is the detection of the human signal amongst the surrounding natural variation. The problem is that the variation is much larger than the predicted human-induced warming. Paleoclimatic research, for example has found very large and rapid temperature changes over the last 100,00 years, providing a puzzle for climatologists. So far, however, the evidence has pointed to a seesaw effect where the Earths polar regions experience temperature change at different times, shifting back and forth.

New research published in Science (October 2, 1998) has found evidence that the abrupt warming that occurred in the North Atlantic about 12,500 years ago, also occurred in Antartica. Ice core samples from Taylor Dome, in the western Ross Sea sector of Antarctica show that the temperature there warmed by 20 degrees Fahrenheit in a very short time. This corresponds with a 59 degrees warming that occurred over 50 years in the Arctic, suggesting that the temperature change was global.

According to James White, a climatologist at the University of Colorado, Boulder and a co-author of the study, “We used to suspect that some of these big changes that occurred naturally in the past were only local. Since we see the same thing at opposite ends of the Earth, it does imply that the warming was a global phenomenon.” These findings “throw a monkey wrench into paleo-climate research and rearrange our thinking about climate change at that time,” White said (Chicago Tribune, October 4, 1998).

Little Progress Expected in Buenos Aires; European Union Softening on Limits for Emissions Trading; Clinton Administration to Mo

by William Yeatman on October 19, 1998

in Kyoto Negotiations, Politics, Science, Small business

Little Progress Expected in Buenos Aires

The fourth Conference of the Parties (COP-4) will meet in Buenos Aires, Argentina on November 2-13 to further discuss greenhouse gas reductions. According to Melinda Kimble, acting assistant secretary of state, there probably will be little progress toward reaching the administrations goals. “Buenos Aires has the potential to be a small step forward,” Kimble testified on October 6 before the House Commerce Subcommittee on Energy and Power.

The biggest hurdle is emissions trading. Different countries have different ideas on what an emission trading system would look like under the Kyoto Protocol though views have converged in recent weeks.

Kimble was questioned about the administrations definition of “meaningful participation” by developing countries. She admitted that the administration has “no definition.” But, she said, it will not be a “one-size-fits-all solution.” Targets for poorer countries with low emissions will be different than for richer developing countries with higher emissions (BNA Daily Environment Report, October 7, 1998).

European Union Softening on Limits for Emissions Trading

The European Union appears to have relented, for the time being, on its demand that the use of emissions trading be limited. In a meeting in Luxembourg on October 6 the EU environment ministers agreed that the EU will insist at COP-4 that emissions trading “be defined in a quantitative and qualitative terms based on equitable criteria” at a later date.

At the Council of Ministers moderate countries convinced hard-liners that it would be a mistake to demand a cap on emissions trading. “For tactical reasons there was a majority opinion that there is no reason to narrow ourselves to a precise 50 percent cap now,” said Peter Jorgensen, a European Commission official. “This is especially true when it comes to dealing with the Americans” (BNA Daily Environment Report, October 7, 1998).

Clinton Administration to Move Forward With Emission Trading

The Clinton Administration will pursue emissions trading even if there is no agreement reached at Buenos Aires, Kathleen McGinty, chair of the White House Council on Environmental Quality, explained at a congressional hearing held by the House Government Reform and Oversight Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs.

There is nothing in the Kyoto Protocol that prevents the U.S. and other countries from pursuing emissions trading even if there is no agreement among the parties regarding the rules governing such a system. “Should push come to shove,” McGinty said, the United States will not be “held hostage to complete a unanimous agreement before we move on with trading measures.” McGinty also said that “while we have our option to proceed unilaterally it is our preference to proceed in partnership.”

She also said that the Clinton Administration will not submit the Kyoto Protocol to Congress until flexible mechanisms “are available and agreed upon by the parties” (BNA Daily Environment Report, October 13, 1998).

Business Could Get Credit for Early Greenhouse Gas Reductions

While many in Congress are holding the line against the unconstitutional implementation of the Kyoto Protocol, others are trying to facilitate implementation without ratification. Sen. John Chafee (R-R.I.) has introduced a bill (S. 2617) that would give businesses credit for voluntarily greenhouse gas reductions. This bill would allow President Clinton to “enter into binding agreements with U.S. businesses to voluntarily reduce their greenhouse gas emissions.”

Energy Secretary: Global Warming Message Not Getting Out; Gores “Hot” Data Not Peer Reviewed; OECD Ignores Technology Trends, Fo

by William Yeatman on October 8, 1998

in Politics

Energy Secretary: Global Warming Message Not Getting Out

The Clinton administrations new Energy Secretary Bill Richardson recently remarked that the administration has been “out-gunned in the Congress, [and] in media ads,” foiling its efforts to get the word out about global warming.

“We have to do better. And what we need to do is find ways that we can communicate why its important climate change, agricultural disasters, water rising, ozone layer why that is important to the American people,” said the energy secretary. “We need to do a lot better there and we need to be committed towards not just international treaties, but delivering the message to Congress and the American people.”

If the public has not embraced the administrations energy use controls and other global warming prevention measures, it is not because the White House has expended too little effort. As Cooler Heads has documented thoroughly, Bill Clinton, Al Gore, and many other administration officials have trumpeted global warming warnings at press conferences throughout the year. Heat waves, tornadoes, and violent storms have all been blamed on man-made global warming.

The federal government has spent millions of taxpayer dollars on programs to promote the global warming scare. The EPA alone has distributed approximately $30 million to greenhouse lobby groups, such as the Climate Institute, the American Council for an Energy Efficient Economy, and the World Resources Institute. Additional millions are spent by private foundations in an attempt to convince Americans to go on an energy diet (“Deep pockets, Hot Air,” Washington Times, August 31, 1998).

Gores “Hot” Data Not Peer Reviewed

At the beginning of 1998, Vice President Al Gore held a press conference to announce nationally that 1997 was the hottest year on record. Every month since, he has announced a new record high for each month. Unfortunately, the Vice President has been relying on data that has never been peer reviewed.

The un-refereed material was “developed for political impact” by the Commerce Departments National Climatic Data Center, according to University of Virginia climatologist Patrick Michaels. An e-mail distributed by the NCDC admits “our methodology was not documented in the open refereed literature,” and states that “This [memorandum] is an attempt to provide documentation.”

It turns out, says Michaels, that the data cited is not a record of global temperatures, but rather an “index” combining three different measures. These measures include land surface temperatures, sea surface temperatures taken from ships, and temperatures taken from a network of buoys deployed in the 1980s. The sea surface temperatures were adjusted upward by 25 percent after 1982 in order to calibrate it with land surface temperatures. The result of this unorthodox adjustment is that recent years appear warmer in “indexed” terms.

Michaels also points out that the sea surface temperatures used are inconsistent with the air temperatures above the ocean, known as marine air temperatures. The marine air temperatures, however, match up nearly perfectly with the balloon radiosonde and satellite temperature data, and show no warming over the last 20 years (Washington Times, August 31, 1998).

OECD Ignores Technology Trends, Forecasts Oil Shortage

The International Energy Agency of the Organization of Economic Cooperation and Development (OECD) predicts that world oil production will peak in as little as ten years. Sometime between 2010 and 2020, production is projected at 80 million barrels per day and then will begin a steady decline.

In the 1970s, we were told that the world was running out of oil and the only solution was to cut energy consumption. The old-school doomsayers are back, warning once again of an oil shortage.

Other estimates, taking into account technology and rising production capacity, differ from the OECD. The U.S. Department of Energys Energy Information Administration does not project a peak in oil production until well after 2020. Other optimists see reserves growing rapidly through technological developments, which allow explorers to extract more oil from established oil fields. “Technology has managed to offset the increasing cost of finding and retrieving new resources,” says Douglas Bohi, an economist with Charles River Associates in Washington, D.C. “The prospect is out there for an amazing increase in the [oil] reserve base.”

One new extraction technique reduces the costs of drilling by a factor of ten. It employs a method of drilling downward and then across, reducing the number of wells needed (Science, August 21, 1998). A brand new technology called Atomic Dielectric Resonance may massively increase the ability of explorationists to discover oil. It has already shown that it can distinguish gold from quartz in seams 10,000 feet under ground (The Scotsman, August 28, 1998). A chronic problem afflicting the doomsayers is the inability to predict future technological change. Without this ability prognosticators will invariably be wrong.

Christy and Spencer Respond to Critics; Water Vapor Still Not Resolved

by William Yeatman on October 8, 1998

in Science

Christy and Spencer Respond to Critics

For the last 18 years, John Christy at Earth Systems Science Laboratory (ESSL), University of Alabama, Huntsville and Roy Spencer at NASA/Marshall Space Flight Center have constructed a global temperature record using measurements from microwave sounding units aboard satellites. These data have confounded the warming predictions of climate models, and in fact show a cooling trend from 1979 to 1997.

Recently, the accuracy of these data have been challenged in the peer reviewed literature, the most important criticism coming last month (Cooler Heads, August 19, 1998) from Frank Wentz and Matthias Schabel (WS) of Remote Sensing Systems. They claimed that the satellite data is distorted by orbital decay. Christy and Spencer, along with Elena Lobl, (CSL) also of ESSL, in a new study published in the Journal of Climate (August 1998) painstakingly trace their methodology in constructing the temperature record. While the CSL paper was submitted prior to the publication of the WS paper, it does address the WS papers criticisms.

CSL show how they intercalibrate each of the eight satellites separately to remove the biases that result from various factors. Specifically, CSL performed the adjustment to account for drift-error and cyclic fluctuations. This is relevant to the WS article in that the analysis by CSL removed a large part of the bias created by orbital decay, even though they were not aware of it at the time.

CSL also responded to a paper in Nature (March 13, 1997) by James Hurrell and Kevin Trenberth (HT) of the National Center for Atmospheric Research. The HT article claimed to have discovered spurious downward jumps in the satellite record that resulted from changing the satellites. Removing the jumps changes the temperature trend from negative to positive, according to HT. After careful analysis, however, CSL “found no such jumps by comparison with independent satellite and traditional atmospheric measurements.”

Water Vapor Still Not Resolved

One of the most important and least understood components of the global warming hypothesis is the role of water vapor feedback. Water vapor is by far the most powerful greenhouse gas and accounts for nearly all of the natural greenhouse effect.

According to global warming proponents, increases of carbon dioxide will warm the planet by slightly increasing evaporation and water vapor in the troposphere. This increase in tropospheric water vapor is what accounts for most of the warming in global warming projections.

The problem is that nobody knows for sure whether this feedback is positive (enhancing the effects of increased carbon dioxide) or negative (canceling the effects of carbon dioxide). Richard Lindzen, a climatologist at Massachusetts Institute of Technology, believes that the feedback will be negative, and that increased carbon dioxide will actually dry out the upper troposphere. A study last year in the Bulletin of the American Meteorological Society (June 1997) by Roy Spencer of NASA and William Braswell of Nichols Research Center found that the tropical free troposphere is much dryer than represented in the climate models an early indication that Lindzen may be right.

An article in Science (August 21, 1998) discusses the difficulties in detecting a trend in the water vapor content of the troposphere. The entire enterprise is plagued with inadequate instrumentation and conflicting agreement between types of instruments. A change to better sensors may also give the false impression “that the upper troposphere is drying simply because of the better instrumentation.”

The author of the article, David Rind of NASA, concludes, “so far, there has been no evidence to indicate that a strong negative water vapor feedback in the upper troposphere will in fact arise as climate warms. However, without our being able to observe upper tropospheric and stratospheric water vapor with sufficient accuracy over a long enough time period to see ongoing trends, some uncertainty will remain in this most important of climate sensitivity feedbacks.”

DOE Study Found to be Misleading; SO2 Trading Costlier Than Claimed

by William Yeatman on October 8, 1998

in Science

DOE Study Found to be Misleading

One of the first economic analyses used by the Clinton administration to downplay the costs of reducing carbon emissions was the “Five Lab” study done by the Department of Energy. The studys conclusions, as found in the Executive Summary and the “Analysis Results” section, “are not derived from, nor supported by, the technical chapters that analyze each energy-using sector.”

“Some of these main conclusions of the Five Lab study are merely ad hoc assumptions,” according to a new report by Ronald J. Sutherland at the American Petroleum Institute. The paper, A Critique of the “Five Lab” Study, also claims that “the Five Lab study uses a methodology to estimate costs and benefits that is inconsistent with the economic principles of cost-benefit analysis.”

The “Analysis Results” chapter shows the estimated reduction in carbon emissions under three scenarios: business as usual, efficiency and high efficiency/low carbon (HE/LC). The HE/LC scenario assumes a fee of $25 and $50 per ton of carbon dioxide. But, as Sutherland points out, “The results reported for a $25 and $50 carbon fee were not obtained from analyses in three of the four sectors.” In fact, “there is no correspondence between the assumptions actually used in the analytical sections of this study and the $25 and $50 carbon permit fee.” Thus the claim by the administration that the costs of carbon emission reductions are negligible are based on ad hoc assumptions not from the actual sector modeling analyses.

Other ad hoc assumptions found in the Analysis Result section include the discount rates used in the “Optimistic” (low discount rate) and “Pessimistic” (high discount rate) scenarios. Sutherland points out that “the discount rates do not appear in the sector modeling analysis, but are only discussed in the “Analysis Results” chapter as a key component of the Five Lab study.” Surprisingly, the Five Lab study states: “These discount rates are not those that describe current market behavior, but rather are reflective of costs of capital if the market did invest in energy-efficiency measures.” In other words the rates used were not actual rates.

The Five Lab study also claims that the benefits of reducing carbon emissions outweigh the costs. Sutherland shows, however, that the study ignores costs such as those “associated with policies designed to encourage technology adoption, such as rebates, subsidies and accelerated depreciation, higher energy prices imposed on consumers, nor the cost of prematurely retiring productive coal plants,” among others. Finally, the study failed to estimate the monetary benefit of the climate change improvement. In short it got both the costs and benefits wrong.

SO2 Trading Costlier Than Claimed

A Public Utilities Fortnightly report (May 15, 1998) casts doubt on claims that SO2 trading is a workable model for carbon emissions trading. Evidently, the full costs of the sulfur reduction have not yet been realized and wont be known until Phase II of the program is fully implemented.

Proponents of the Kyoto Protocol have pointed to the U.S. acid rain program as an example of how to reduce emissions inexpensively. Like the acid rain program, the argument goes, the cost of reducing greenhouse gases will be negligible.

Heres why the acid rain program cant be used for comparison purposes: Phase II of the SO2 program will require that all major “fossil units” participate, and the cap will be lower than in Phase I. Utilities over-complied during Phase I and “banked” their emissions allowances in anticipation of the lower Phase II cap. At some point during Phase II, utilities will fully draw down their banked allowances and the real costs of compliance will be revealed.

Currently allowances are selling for about $100 per ton even though the marginal cost of compliance is actually $500. This is because utilities had difficulty in estimating their marginal costs. As a result, they may have invested “too heavily in control measures, creating more allowances for sale than needed to achieve the cap in any given year,” causing allowance prices to fall below actual marginal cost.

Once Phase II is fully implemented, long run marginal costs will equal the price of allowances. These costs should fall well within the range estimated by critics of sulfur emission controls.

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