2009

A couple of weeks ago I wrote companion op-eds for the Washington Examiner and San Francisco Examiner about the effort by the Alliance for Climate Education to infiltrate high schools and recruit students to also push their alarmism agenda. The Examiner gave ACE’s Alisha Fowler an opportunity to write a counterpoint op-ed, in which she accused me of inaccurate journalism:

Unfortunately, Paul Chesser’s op-ed last week about ACE misreported many of our central tenets. The science behind climate change drives our work.

She followed the typical Leftist tactic of making an accusation without supporting it with evidence, as I address in my Examiner letter to the editor today:

I usually don’t respond to comments about my opinion pieces, realizing it’s always best to let everyone express their views. However, I do make exceptions in cases where I’ve been accused of journalistic malpractice, as was the case last Monday by the Alliance for Climate Education’s Alisha Fowler. The Oakland, Calif.-based educator alleged that I “misreported” ACE’s “central tenets,” yet failed to identify a single instance of inaccurate journalism on my part.

What could she have meant? Is ACE not funded by a wealthy wind energy entrepreneur for BP (a.k.a. “Big Oil”)? Are students not removed from their classes in order to hear ACE’s recruitment pitch for climate alarmism? Is ACE telling the truth when they inform students that they’ve lived through the 10 hottest years on record? Just what is the misreporting, Ms. Fowler?

Perhaps she could improve her own research about the U.N. Intergovernmental Panel on Climate Change, where she’d discover the “consensus” that supports global warming alarmism is drawn from a small group of non-scientist government bureaucrats, rather than the “collection of more than 1,000” scientists she claims. When you accuse someone of shoddy work, you’d better show some evidence.

Updated at 10/1/09 4:47 PM

I’ve just begun reading EPA’s proposed Tailoring Rule to establish a new 25,000 tons per year (TPY) ”major stationary source” applicability threshold for greenhouse gas (GHG) emissions under the Clean Air Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program and Title V operating permits program. I’ll blog about this again later on, but for now I just want to say, “We told ya so!”

Attorney Peter Glaser, the U.S. Chamber of Commerce, CEI and a host of other free market groups warned repeatedly that regulating GHG emissions from new motor vehicles — the immediate policy objective of plaintiffs in the Supreme Court global warming case, Massachusetts v. EPA – would have the following consequences:

1. CO2 would automatically become an air pollutant “subject to regulation” under the PSD and Title V programs.
2. Millions of previously unregulated entities — big box stores, enclosed malls, hotels, apartment complexes, mid-sized office buildings, even commercial kitchens — would be vulnerable to new controls, paperwork, penalties, and litigation.
3. The volume of permit applications would create an administrative quagmire for EPA and state environmental permitting agencies.
4. The new costs, uncertainties, and delays would create an unprecedented roadblock to new construction and economic development, turning the Clean Air Act into a gigantic Anti-Stimulus program.

Predictably, global warming activists, such as Sierra Club climate council David Bookbinder, a plaintiff in Massachusetts v. EPA, derided these concerns as a “bugaboo,” a “red herring,” and a “pure scare tactic” by industry foes of regulatory climate policy. (See segments 1:47 – 1:48 and 2:03 – 2:05 of the Senate Environment and Public Works Committee’s Archived Webcast).

EPA’s July 30, 2008 Advanced Notice of Proposed Rulemaking: Regulating Greenhouse Gas Emissions under the Clean Air Act (ANPR) acknowledged that applying PSD to CO2 might increase the volume of permit applications by an “order of magnitude” (p. 44499), might “overwhelm” the administrative resources of permitting authorities (p. 44507), and might subject sources to new costs, uncertainties, and delays (p. 44502). However, the ANPR considerably understated the risks, Glaser, the Chamber, and CEI argued.

Well, you can now get the lowdown straight from the horse’s mouth.  Here’s what EPA’s Tailoring Rule says:

If PSD and Title V requirements apply at the applicability levels provided under the CAA, state permitting authorities would be paralyzed by permit applications in numbers that are orders of magnitude [not a mere “order of magnitude,” as in the ANPR] greater than their current administrative resources could accomodate [p. 1].

* * *

If PSD and Title V requirements apply at the applicability levels provided under the CAA, many small sources would be burdened by the costs of individualized PSD control technology requirements and permit applications. In addition, state permitting authorities would be paralyzed by enormous numbers of these permit applications; the numbers are orders of magnitude greater than the current inventory of permits and would vastly exceed the current administrative resources of the permitting authorities [pp. 15-16]

* * *

In short, without this tailoring rule, the administrative burdens would be immense, and they would immediately and completely overwhelm the permitting authorities. Without this tailoring rule, permitting authorities would receive approximately 40,000 PSD permit applications each year — currently, they receive approximately 300 — and they would be required to issue Title V permits for approximately some six million sources — currently, their Title V inventory is some 15,000 sources [p. 19].

* * *

Based on our GHG threshold data analyis, we estimate that almost 41,000 new and modified facilities per year would be subject to PSD review, based on the current rate of modifications at major sources, if a GHG major sourcee threshold of 250 TPY CO2e [carbon dioxide equivalent] were applied. Compared to the 280 PSD permits currently issued last year, this would be an increase in permits of more than 140-fold [p. 50].

* * *

Based on these assumptions [permitting agency costs in time and money to process a PSD permit for a commercial or residential GHG source would be only 20% of the time and money required to process a permit for an industrial GHG source], the additional annual permitting burden for permitting authorities, on a national basis, is estimated to be 3.3 million hours at a cost of $257 million to include all GHG emitters above the 250-TPY threshold [pp. 51-52].

* * *

Most significant [of new Title V obligations triggered by GHG regulation of new motor vehicles] are the more than six million sources of GHGs that would become newly subject to Title V requirements because they exceed the 100-TPY threshold for GHG but did not for previously regulated pollutants. Although there are generally not applicable requirements for GHGs that apply to such sources [a gross understatement — although there are generally no Clean Air Act requirements, period, that apply to such sources], these six million sources would be required to submit a Title V permit application within 1 year [pp. 56-57].

* * *

Obviously, this massive influx of permit applications would overwhelm permitting authorities’ administrative resources. Indeed, permitting authorities report that they currently are having difficulty keeping up with their existing permit workloads. The Tite V Operating Permits System database, which tracks permit issuance, confirms that issuance of many permits is already delayed. By increasing the volume of permits by over 400 times, the administrative burden would be unmanageable [p. 58].

* * *

We estimate that for permitting authorities, the average new commercial or residential [Title V] permit would require 43 hours to process, which is 10 percent of the time needed for the average industrial permit . . . We estimate that the total nationwide additional burden for permitting authorities for Title V permits from adding GHG emissions at the 100-TPY threshold would be 340 imllion hours, which would cost over $15 billion [p. 59].

These burdens are “absurd,” EPA argues, because they are “inconsistent” with “congressional intent,” indeed would “undermine congressional purposes” (p. 19). Hence, EPA concludes, it is justified in effectively amending the statute, upping the PSD and Title V applicability thresholds for major sources from 100/250 TPY to 25,000 TPY.

Well, somebody needs to point out the obvious. The looming threat of an economy-chilling administrative quagmire didn’t just happen. The absurdity of agencies spending 340 million hours and $15 billion to process hollow operating permits didn’t suddenly spring forth from the text of Title V. Nothing in the Clean Air Act has changed since it was amended in 1977 and 1990 to turn it into an economic wrecking ball. Congress is still debating cap-and-trade, and never signed off on EPA using the Clean Air Act to control CO2 emissions from stationary sources. No, the absurd results are entirely a product of Mass. v. EPA. So is the necessity for EPA now to amend clear and unambiguous statutory language, violating the separation of powers.

When a court decision leads to absurd results, there are only two possibilities. (1) The absurdity was lurking in the statute all along and the court simply brought it to light; or (2) the court messed up, manufacturing absurdity in an otherwise sane and reasonably coherent law. My comment on EPA’s proposed endangerment finding (especially pp. 28-33) argues the blame lies with the Court, not those who drafted and enacted the Clean Air Act.

“I remember the importance of toilet paper while being shelled a few times, a couple of times while on the throne. I don’t understand why they can’t do re-cycled AND fluffy. Why are they exclusive?”

One 122 mm mortar round can ruin that beautiful experience on the throne.

That’s from an officer I befriended at Camp Corregidor in Ramadi, Iraq, where it rained shells so often we had to wear body armor at all times outside of fortified buildings. He saw my blog “Enviros want to wipe out soft toilet paper!” concerning the greens wanting us to use recycled toilet paper instead of the softer kind from older – but not “old growth” – trees. Older trees are better carbon sinks, meaning better at soaking up CO2.

It’s all about fiber length. Longer fibers mean fewer knots and it’s those knots you feel, whether in TP or in your bedsheets or in clothes – albeit not in Army uniforms, which are part polyester anyway.

That’s why Egyptian cotton is the best, because it has the longest fibers. Recycled paper products inherently have fiber of short length, hence lots of knots. Not so important when you’re writing on it, but rather more so when wiping with it and – although I personally haven’t had the experience – doing so with 122 mm rounds dropping around your throne.

Today’s Greenwire (subscription required) reports that Nike, the sports shoe king, is resigning its position on the U.S. Chamber of Commerce’s Board of Directors. Nike supports cap-and-trade legislation, a national renewable portfolio standard, a moratorium on new coal power plants lacking carbon capture and storage, and EPA regulation of CO2 under the Clean Air Act. The Chamber opposes all of the foregoing.

Although the Greenwire story is not slanted, neither is it particularly informative. The reporter makes no effort to ascertain what bottom line interest might account for Nike’s decision to quit the Chamber, or for the company’s decision to join the Business for Innovative Climate & Energy Policy (BICEP) coalition, a project of Ceres, the Gorethodox investor network.

The vast majority of Nike’s production facilities are in China and other Asian developing countries such as Thailand, Indonesia, and Vietnam. (I can’t find exact numbers — Nike appears to be coy about the details.) Nike factories in developing Asia would not be subject to CO2 controls from either Waxman-Markey or EPA regulation under the Clean Air Act.

What’s more, if the G-77 Plus China hang tough at the Copenhagen climate conference, and the successor treaty to the Kyoto Protocol continues to exempt developing countries from legally binding emission limits, then the comparative advantage (lower energy costs) those countries already enjoy under Kyoto will increase, making Nike factories even more profitable to invest in.

Here’s what an honest Nike press release might say: 

Nike believes U.S. policymakers should use law, regulation, and the Copenhagen treaty to hobble domestic firms in favor of the Asian economies where our facilities are located. In contrast, the U.S. Chamber opposes policies that would offshore more U.S. jobs and investment to China and developing Asia. A truly carbon-constrained world would destroy jobs and growth in Asia, too. However, that’s years away, and Nike cares only about its short-term bottom line. Therefore, we are pulling out of the Chamber. 

Instead, Nike tut-tutted about the need for “urgent action” on climate change. When will the sanctimony end?

Divide et Impera — divide and conquer — is perhaps the oldest strategic maxim of war, politics, and diplomacy. Businesses succumb to it time and time again. Why?

It is in the general interest of business to preserve an open and competitive marketplace, and to limit tax and regulatory burdens. However, it is often in the special interest of particular firms to expand the size and scope of government in order to collect political “rents” – windfall profits created by market-rigging subsidies, preferences, or mandates. 

When only a few firms engage in rent-seeking, the rent seeker’s concentrated benefits will far outweigh his portion of the diffuse costs imposed on the economy as a whole. But each rent seeker’s success encourages others to get in the game. In time, the costs of government adversely affect millions of bottom lines. Worse, interventionist policies (for example, subsidized lending via Freddie Mac and Fannie May) can create systemic risk and crash entire economies.

V.I. Lenin basically viewed all capitalists as rent seekers. Capitalists are so fixated on short-term gain, he mused, that they will “sell the rope” by which their enemies will hang them. This much is clear — there is no honor among thieves. The more businesses depend on political predation, the easier it is for anti-market interventionists to divide and conquer.

This brings us to the topic of cap-and-trade, a form of energy rationing. There’s money to be made in energy rationing — OPEC proves it! The emission permits in a cap-and-trade program are like the oil production quota in OPEC, the only difference being that they’re tradable. The cap makes the permits a valuable commodity, and Waxman-Markey in the early years would distribute about 85% of all permits free of charge to various industries and interest groups.

So it should come as no surprise that some corporations love Waxman-Markey. Indeed, the corporate coalition known as the United States Climate Action Partnership (US CAP) outlined the main features of the Waxman-Markey bill months before it was introduced in a January 2009 report titled A Blueprint for Legislative Action. US CAP members don’t worry that Waxman-Markey might destroy millions of jobs and trillions of dollars in cumulative GDP. They expect to get a bigger piece of a smaller pie.

US CAP member PG&E pulled out of the U.S. Chamber of Commerce last week citing “irreconcilable differences” over climate change policy. Today’s Bloomberg.Com reports that US CAP member Exelon has announced it will not renew its membership in the Chamber, and that US CAP member Duke Energy will not renew its membership in the National Association of Manufacturers (NAM). 

PG&E, Exelon, and Duke preen themselves as progressive companies who put principle (planetary rescue) ahead of profit. In reality, they seek political rents at the expense of the public interest in limited government, economic growth, and affordable energy. Waxman-Markey sets aside the biggest chunk of free emission permits — 35% — for electric utilities. And their industry representative, the Edison Electric Institute (EEI), is lobbying the Senate to increase the booty to 40%.

How much boodle can a rent seeker make these days? A recently leaked non-public report reveals that Exelon expects Waxman-Markey to generate hundreds of millions of dollars annually for the company.

On June 9, 2009, four days after Waxman-Markey was marked up in the House Energy and Commerce Committee, Hugh Wynne, a senior analyst with BernsteinResearch, led a group of investors to meet with Exelon’s senior management at the company’s headquarters in Chicago. Wynne summarized Exelon’s thinking in a non-public report prepared for Bernstein’s clients:

If passed, [Exelon Chairman] John Rowe calculates the Waxman-Markey bill will add $700 to $750 million to Exelon’s annual revenues for every $10 per metric ton (Mt) increase in the price of CO2 allowances. Such a revenue increase would contribute $0.67-0.72 to earnings per share. Exelon estimates that the price of CO2 allowances, when the law takes effect in 2012, will range from $15 to $18/Mt, implying a positive earnings impact of $1.00 to $1.30 per share.

The Chamber and NAM oppose Waxman-Markey because they promote the general interest of business in a free and healthy economy. Green groups are putting pressure on other companies to leave Chamber and NAM, my colleague Christopher Horner notes. Divide and conquer is, alas, a pathetically easy game to play in an era of big government and climate hysteria. 

The real story is that so many Chamber and NAM members are standing firm, and that most observers do not expect the Senate to pass a cap-and-trade bill this year.

Mr Krugman in Sunday’s New York Times is worried.

In  his article “Cassandras of Science” he says, “What’s driving this new pessimism? Partly it’s the fact that some predicted changes, like a decline in Arctic Sea ice, are happening much faster than expected. Partly it’s growing evidence that feedback loops amplifying the effects of man-made greenhouse gas emissions are stronger than previously realized. For example, it has long been understood that global warming will cause the tundra to thaw, releasing carbon dioxide, which will cause even more warming, but new research shows far more carbon locked in the permafrost than previously thought, which means a much bigger feedback effect.”

He’s worried about the Arctic ice. Here’s the latest, though. Information from the National Snow and Ice Data Center shows that the Arctic has been rebounding for the past two years. (It hasn’t recovered yet, though.) The minimum sea ice extent in September of 2007 was 4.3 million square kilometers. In 2008, it was 4.7 mill sq km. And in 2009, it was 5.1 mill sq km. If the Arctic ice continues to rebound at this rate of 0.4 mill sq km per year, in two years it will be back to the level seen in 2006 of 5.9 mill sq km. And if it continues at this rate for three years? It will pass the Arctic sea ice minimum in 1995 of 6.1 mill sq km.

Krugman is also worried about the warming tundra releasing carbon dioxide and methane. But CO2Science .org says, “Another scare story came from a scientist who said the last IPCC report underestimated the vast amount of carbon contained in the world’s permafrost, which could be released to the air by rising temperatures. However, a detailed study of this phenomenon (Delisle, 2007) indicates that “permafrost will mostly prevail in this century in areas north of 70°N,” even for an unbelievable warming of 8°C, and that “permafrost will survive at depth in most areas between 60° to 70°N.” This scenario is also supported by the small amount of organic carbon released from permafrost during previous periods of warming, such as the Medieval Warm Period and Holocene Climatic Optimum, when no significant methane excursions were detected in ice core records of either Antarctica or Greenland.” If the Medieval Warm Period, which was warmer than today, didn’t have increased methane, then we won’t see it either.

If Mr Krugman is concerned about the sea bed deposits of methane called clathrates, he would be comforted reading about this six-year study by Petrenko at the University of Colorado, then. Petrenko says, “The results definitely help us to say that it doesn’t seem methane clathrates respond to warming by releasing lots of methane into the atmosphere, which is really good news for global warming.” Petrenko also said that temperatures in Greenland 12,000 years ago had increased about 10 degrees Celsius in 20 years. But it took 150 years for methane levels in the atmosphere to increase by 50 percent. Therefore, the methane did not contribute to that increase.

Arctic hockey stick graphs that claim that the Arctic is warmer now than in the past two thousand years such as this one, rely upon “previously published data from glacial ice and tree rings that were calibrated against the instrumental temperature record.” That tree ring data is now known to have been incorrect. When those graphs are corrected, they will  likely show that around 1000AD the Arctic was warmer but that runaway global warming obviously did not occur.

I can understand that Krugman hasn’t followed the science, but to make comments like this one, Krugman just looks very deceived: “And the industries of the past have armies of lobbyists in place right now; the industries of the future don’t.” The money behind “green” is actually enormous.