2008

In the final week of May, environmental ministers from the world’s richest industrialized nations met to prepare a common international climate policy in advance of the G8 Summit this July in Japan. After three days of talks, they agreed on a long-term target of halving global greenhouse gas emissions by 2050, and the meeting chairman told reporters that there was “strong political will” among the G8 countries to meet this ambitious goal.  The following week, energy ministers from these same nations met to prepare a common international energy policy in advance of the G8 Summit. In a joint statement, the ministers expressed “serious concerns” over the high price of oil, and they asked major oil producers “to increase investment to keep markets well supplied in response to rising world demand.”  

Of course, “well supplied” oil markets are antithetical to emissions reductions, because cheaper oil means more of it will be used, thereby resulting in more greenhouse gas emissions. Indeed, the most popular climate change solution among G8 countries—a “cap-and-trade” scheme—is designed to increase the price of gas, so that consumers use less and emit less.

The G8 can have emissions cuts and expensive oil, or emissions increases and cheap oil, but it can’t have both.

The Courant's June 9 editorial ["The Senate's Shame"] was wrong to imply that the leading climate legislation in Congress, the Lieberman-Warner Climate Security Act, failed because of partisan opposition from the Republican Party.

Rather than partisan politics, the act failed because a bipartisan group of senators refused to pass a bill that would have reduced greenhouse-gas emissions by increasing the price of energy

Last week, I summarized what happened to the Lieberman-Warner-Boxer (hereafter L-W-B) energy-rationing bill on the Senate floor.  This week I want to begin discussing what can be learned from it that might be useful as we prepare to fight cap-and-trade in the next Congress.  What strikes me most strongly is that while the push for reducing emissions is coming from environmental pressure groups, the push for cap-and-trade as the means to do so is coming from big businesses that hope to make a lot of money in the short term.  The battle is therefore really between special interests and consumers (that is, the public).  Special interests are organized to exert considerable pressure on Congress, while consumers are not.  That is usually bad news for consumers.  The 2005 and 2007 ethanol mandates and the new farm bill are good examples of how things usually turn out in Washington.

However, L-W-B crashed in less than a week.  Why?  First, the environmental pressure groups were divided.  Friends of the Earth led a “Fix It or Ditch It” grassroots campaign, while the big Wall Street establishment groups, Natural Resources Defense Council and Environmental Defense Fund, supported the bill.  Second, there was no way to pay off all the special interests.  Some big companies didn’t do so well.  Thus James Rogers, Chairman, President, and CEO of Duke Energy, has been the biggest promoter of cap-and-trade in the business community, but he lobbied actively against it because he felt that Duke wasn’t getting its fair cut (that is, more than its share of the loot).  Now, Rogers has come out in favor of a carbon tax, which may or may not be a strategic ploy. 

The fact that big business was divided meant that there was room for the public to make their views heard in Washington.  Since Kyoto hasn’t been a live issue since it was negotiated in 1997, most conservative groups haven’t paid much attention to it—and understandably so: there are many other important issues and resources are limited.  But in the weeks leading up to the debate, many conservative grassroots groups got active.  Talk radio paid a lot of attention to L-W-B, and listeners started to light up the phone lines.  I don’t know how many people called or wrote their Senators, but I did notice in the debate that quite a few Senators who support cap-and-trade suddenly felt obliged to express concern about the costs to consumers.

My preliminary conclusion is that the public can be heard when cap-and-trade comes up again in 2009 or 2010 and therefore it can be defeated in Congress, but only if we can keep the special interests divided and pushing and shoving each other to get to the trough.  If the proponents figure out a way to pay everybody off, then it will become very difficult to save ourselves from energy rationing.

After the Lieberman-Warner Climate Security Act was defeated in the Senate, Senator Barbara Boxer (D-Calif.) found comfort in the fact that “We had 46 Democrats for dealing with global warming.” Apparently, she was unaware of a letter released on June 6th by ten Democratic Senators stating they “cannot support final passage” of the Lieberman-Warner Climate Security Act. That means that 20% of Senate Democrats opposed the leading cap-and-trade bill in Congress.

I have heard an awful lot of public discourse over the past few days about the irresponsibility of our Washington policymakers’ refusal to tap domestic sources of hydrocarbons. What seems to be gaining particular traction is objection to the lame defense that, well, the oil from ANWR wouldn’t be here for another seven to ten years anyway, so let’s not do it.

I have heard in response the rather sane assessment that it does seem rather likely that we are going to need it in seven to ten years, as well, and as such that accessing our own energy sources remains a good bet.

And there's the rub. The typically implicit and often express rationale underlying the “it’s not immediate” rationalization is that we should instead invest in alternatives of the future. First, taxpayers have been investing in alternatives to hydrocarbons to the tune of about $40 billion since the 1970s — and what have we gotten for all that appropriated money

More absurd is the larger argument that X resource won’t be here for seven to ten years so let’s invest instead in something else that will be here in, I don’t know, 14 to 20 years. If ever. Remember how the wind and solar industries tell us every year for the past three decades — since the subsidies started pouring in — that in a few years they’ll be cost competitive, that the technologies and economics will make sense in, oh, maybe a decade, but for now they must have subsidies and mandates? How has that worked out?

No one knows when the next miracle drug for any particular ailment will be here, but the fact that it isn’t immediate has never, ever been a reason not to go after it. (Yes, I am comparing tapping the most abundant affordable energy sources with life saving technologies; I believe you would too if you thought about it). 

So here’s the bet. Let’s go after both, and see which gets here first. ANWR oil, or the miracle fuels, commercialized and somewhat economically sensible hydrogen alternatives, cost-competitive wind and solar, cold fusion, cellulosic ethanol. You name the viable, commercial-scale alternative that you believe would be here to compete in seven to ten years on its merits with no more subsidy than hydrocarbons receive, and get it here first, and you were right.

If you bet on it with your own money, you will win, and win big. Name names. Tell me the technology you bet on that can win that race.

Climate experts agree that the seriousness of manmade global warming depends greatly upon how clouds in the climate system respond to the small warming tendency from the extra carbon dioxide mankind produces.