2009

Announcements

  • You can now receive tweets on the global warming battle by following cooler_heads on Twitter! You’ll receive links to new blog posts on globalwarming.org and thoughts and links from CEI’s global warming team experts.
  • The George C. Marshall Institute has released two new studies on the Economic, Environmental, and Energy Security Consequences of a National Low Carbon Fuel Standard.

In the News

Video: Marc Morano debating Joe Romm on RollCallTV
Part 1
: Starts at 3:45 min.
Part 2
: Starts immediately

Congress Balks at Obama’s Cap and Trade Proposal
Wall Street Journal, 3 April 2009

Technology is the Answer to Climate Change
Representative F. James Sensenbrenner, Wall Street Journal, 3 April 2009

Embracing Trendy Green Policies did not Help the British Tories
Iain Murray and Matthew Sinclair, National Review Online, 1 April 2009

Wall Street Sees “Bucks to be Made” in House Climate Plan
Nathanial Gronewald, New York Times, 2 April 2009

Enviro Group Sues Obama Administration Over New CAFE Standards
Business Week, 2 April 2009

Is Our President a “Carbon Communist”?
Chris Horner, Human Events, 1 April 2009

We’re Experiencing a Very Deep Solar Minimum
NASA, Science.NASA.gov, 1 April 2009

Climate Change Scepticism is Going Mainstream
Chris Ayres, TimesOnline, 1 April 2009

The Obama Administration Risks a Cap and Trade War
Wall Street Journal, 30 March 2009

News You Can Use

We listed the New York Times Sunday Magazine’s March 29 cover story on Freeman Dyson in last week’s news stories, but we want to mention it again.  Nicholas Dawidoff’s fascinating profile of the great physicist focuses on the fact that Dyson is a “Global-Warming Heretic” even though his political views are orthodox left.  The alarmist community is not pleased.

Inside the Beltway

Myron Ebell

Waxman and Markey Roll Out Monstrosity

The House Energy and Commerce Committee this week released a draft of the energy-rationing bill that Chairman Henry Waxman (D-Beverly Hills) and Energy and Environment Subcommittee Chairman Edward Markey (D-Mass.) plan to mark up in May. The official summary of the bill can be found here and the text of the draft bill here.  A summary analysis by the Heritage Foundation can be found here. The centerpiece of the 648-page bill is a cap-and-trade program, but it contains many other provisions designed to constrict energy supplies and raise prices.

These include: a renewable mandate for electric utilities; funding for carbon capture and storage technology research and a performance standard for new coal-fired power plants; a low carbon transportation fuel standard; new emissions standards for trains, ships, and heavy equipment; developing a smart grid that can control your thermostat; and new energy efficiency standards for buildings, appliances, utilities, industries, and government facilities. All this is quite surprising.  A cap-and-trade program works best if there aren’t a lot of other overlapping programs. Adding all these new programs means that emission reductions achieved by cap-and-trade would come at a much higher cost. It also implies that Representatives Waxman and Markey don’t have much faith in cap-and-trade, which suggests that they have been paying attention to the failing European Union’s Emissions Trading Scheme.

Also of note is a requirement that utilities “must demonstrate that its customers have achieved a required level of cumulative electricity or natural gas savings relative to business-as-usual projections.”  It sounds like the bill would do for the family home what the Obama Administration has done to General Motors.

Instead of pre-empting California ‘s emission standards for new vehicles, Waxman and Markey would direct the executive branch to negotiate to try to harmonize federal and conflicting state auto fuel economy programs. However, the draft bill does pre-empt the Environmental Protection Agency from using the Clean Air Act to regulate greenhouse gas emissions. That is a notable recognition that doing so would create a regulatory nightmare.

The cap-and-trade provisions are peculiar and complicated and will require much closer study than I have given them.  The baseline year is 2005, and the targets for emissions reductions are -3% by 2012, -20% by 2020, -42% by 2030, and -83% by 2050.  It appears that the initial reductions could be met through the current economic downturn and by buying a few carbon offsets rather than by making emissions reductions.  Indeed, the carbon offset provisions are remarkably generous.  The cap-and-trade title would also create a huge “strategic reserve” of rationing coupons that could be sold “in case prices rise faster than expected.”  The draft bill does not say how many of the rationing coupons would be given away for free and how many would be auctioned.  That decision will apparently be made later after the various special interests have a chance to threaten and plead.

Waxman and Markey also include provisions to create a trade war and destroy the World Trade Organization. They call it “ensuring domestic competitiveness.”  Similar provisions to “assist” consumers with higher energy bills were left blank and are to be filled in later.

The most astonishing thing in the Waxman-Markey draft is that they state openly that the cap-and-trade provisions “are modeled closely on the recommendations of the U. S. Climate Action Partnership.”  That is to say, the powerful big business special interests that are to be regulated got to write their own regulations. I wonder who will benefit from that, consumers or the big companies that belong to US CAP?  I seem to recall that Chairman Waxman has criticized and even investigated Republicans who introduced bills that were written by outside special interests. That was different, I guess. The second most astonishing thing is how little attention the mainstream media and environmental pressure groups have given to this fact that the regulated are being allowed to write the regulations.

Senate Budget Resolution Includes Good Intentions

Senators passed their version of the budget resolution by a 55-43 margin on Thursday. Several amendments related to the President’s budget proposal to raise $646 billion in federal revenues from a cap-and-trade program were voted and adopted.  The Senate agreed on a 67 to 31 vote to an amendment offered by Senators Mike Johanns (R-Neb.) and Robert Byrd (D-WV) that says that cap-and-trade should not be included in budget reconciliation legislation.  Reconciliation bills cannot be filibustered and so require only a simple majority to pass.

Senator Barbara Boxer’s (D-Calif.) amendment that states that revenues derived from selling rationing coupons under cap-and-trade should be used to help people pay their higher energy bills was passed by a 54 to 43 vote.  But then the Senate passed a competing amendment from Senator John Thune (R-SD) by an 89 to 8 margin.  It states that any energy-rationing legislation passed should not raise energy or gasoline prices. And by a 54 to 44 vote, Senators agreed to an amendment offered by Senator Christopher Bond (R-Mo.) that urges that any climate legislation passed does not cause significant job losses.

Some people are claiming that passing the Thune amendment means that cap-and-trade is dead in the Senate because cap-and-trade would only work if it raised energy prices. But all these votes are hortatory and non-binding on future Senate votes.  The unavoidable reality is that the colossal revenues that can be generated by auctioning cap-and-trade rationing coupons are an irresistible prospect for many in Congress. Senator Benjamin Cardin (D-Md.) told the Washington Post that cap-and-trade was “the most significant revenue-generating proposal of our time” (you can almost hear his lips smacking). Or as I have been putting it, “the biggest tax increase in history.” So a House-Senate conference committee on the budget could still decide to use budget reconciliation to sneak cap-and-trade through the Senate.

Around the World

Though the G-20 countries decided on a $1.1 trillion package, no agreements were made in regard to climate change. Greenpeace executive director John Sauven’s angst is noted: “Tacking climate change on to the end of the communique (two short paragraphs) as an afterthought does not demonstrate anything like the seriousness we needed to see. Hundreds of billions were found for the IMF and World Bank, but for making the transition to a green economy there is no money on the table, just vague aspirations, talks about talks and agreements to agree.” (parenthetical added)

China now calls for developed countries to give a full 1 percent of their GDPs to developing nations to cut greenhouse gas emissions.

In April, the President will host a Major Economies Meeting to lay the groundwork for an international agreement at Copenhagen later this year. This is the new name for the process set up by President George W. Bush, which he called the Major Emitters Meeting.

In the States

California

The California Senate voted this week to increase the state’s renewable power mandate to from 20% to 33% of total load by 2020. However Sen. John Benoit ( R-Palm Desert ) said the increased mandate for solar, wind and geothermal power will not only hurt residents who are already having trouble paying their bills, but will also drive manufacturing firms out of the state. “We are going to make ourselves the greenest Third World economy in the world,” he said.

Tennessee

Last Saturday while climate realists were celebrating Human Achievement Hour, some climate alarmists were refraining from using energy for Earth Hour. But not all. Although Al Gore turned off most of his lights, the blue hue from the use of televisions or computers and brightly-lit trees in his garden evidenced his Do As I Say mentality.

This is CNN (you know, no bias; no bull) — so complete the last sentence from this article’s first few paragraphs for me:

A large ice shelf is “imminently” close to breaking away from part of the Antarctic Peninsula, scientists said Friday.

Satellite images released by the European Space Agency on Friday show new cracks in the Wilkins Ice Shelf where it connects to Charcot Island, a piece of land considered part of the peninsula.

The cracks are quickly expanding, the ESA said.

Scientists are investigating the causes for the breakups and whether it is linked to…

So guess which of the following completes this last sentence excerpted from CNN’s report? Your choices:

1) …wind and wave conditions.

2) …volcanic activity.

3) …stress caused by ice growth.

4) …natural processes.

5) …global climate change.

Remember, it’s no bias and no bull, so your choice should be a difficult one. Right?

Nothing is more Orwellian than quoting Orwell to attack freedom of thought and discussion. Today’s ClimateWire (subscription required) provides a case in point. “Scientists need to stop doublespeak on climate, [PR] experts say,” reports Christa Marshall. By doublespeak, Orwell meant a political orthodoxy so pervasively embraced as a party line that everybody sheepishly repeats and even believes manifest falsehoods: Ignorance Is Strength, Freedom Is Slavery, War Is Peace.

But to the PR experts cited by Marshall, “doublespeak” means that the world’s scientists, journalists, and government agencies do not all speak about climate change with one voice.

Because of this “doublespeak,” say the experts, “The dangers of global warming are not getting through to the public.” I have a better explanation. Blaming SUVs for hurricane Katrina sets off the public’s B.S. detector, as do implausible scenarios of sea levels rising 20 feet and the climate “tipping” into an Ice Age in our lifetimes or those of our children.

Be that as it may, when these PR experts (who presumably would be happy to have university departments, science journals, and government agencies pay them for their services) say that scientists must do a better job of communicating with the public, what they really mean is that scientists must do a better job of scaring people.

What Orwell would resent most is their demand that every scientist, scientific organization, and agency speak in unison. Although outrageous, this attempt to collectivize scientific discourse–this campaign to turn climate science into a party line–is hardly surprising or new. In fact, it is the arguably the very purpose for which the IPCC was established in the first place.

Only if the costs decline dramatically, a recent Congressional Research Service report suggests, as I discuss here. Currently, the costs of carbon capture and storage (CCS) are too high to justify continuing investment in coal-based power–the source of 50% of U.S. electricity–under increasingly stringent caps or taxes on CO2 emissions.

In addition, the storage component of a CCS system must be very nearly leak proof or it will flunk federal environmental impact assessments. As Cal Tech chemist Nathan Lewis observes, “The collective leak rates of the reservoirs must be significantly lower than 1%, sustained over a century-to-millennium time-scale. Otherwise, after 50 to 100 years of sequestration, the yearly emissions will be comparable to the emission levels that were supposed to be mitigated in the first place.”

Finally, even if economical and leak-proof, CCS must overcome the NIMBY forces who seem bent on blocking any and all energy projects, from wind farms to desert solar concentrator arrays. According to an MIT report (see p. ix), the pipeline network required to transport all the CO2 from U.S. coal power plants to underground storage sites would rival the U.S. oil or natural gas pipeline networks in size. 

So, can CCS keep the lights on in a carbon-constrained future? Only if three conditions are met: costs fall dramatically, the storage sites are virtually leak proof, and NIMBYs get out of the way.

The stock market has gone up by 280 points so far today, fueled by FASB’s vote to relax rigid mark-to-market accounting rules, which require financial institutions to value assets at their current fire-sale prices, and magnify boom-bust economic cycles.

The market may also be getting a boost from the Senate’s earlier vote undercutting the Obama Administration’s proposed $2 trillion cap-and-trade carbon tax, which would impose burdens on the economy akin to Herbert Hoover’s disastrous 1932 Revenue Act at the beginning of the Great Depression.

The market’s rise contrasts with its fall in the weeks after passage of Obama’s $800 billion stimulus package, which Obama falsely claimed was needed to avert “disaster” and “irreversible decline.” Obama made that claim even though the Congressional Budget Office, controlled by his own Congressional allies, admitted that the stimulus package would shrink the economy over “the long run.

Many commentators have called for relaxation or repeal of mark-to-market accounting rules to stem the financial crisis, including former FDIC Chairman William Isaac, Congressmen Ed Perlmutter (D-CO) and Paul Kanjorski (D-PA), the Wall Street Journal, John Berlau, Jeff Miller, Holman Jenkins, Newt Gingrich, and the Republican Study Committee.

While pushing through $8 trillion in bailouts, and trillions more in debt from massive budget increases, the Obama administration has until recently ignored inexpensive possible ways of mitigating the financial crisis like reform of “mark-to-market” accounting rules.

The Obama administration’s footdragging on accounting-regulation reform is inconsistent with the rationale for its trillion-dollar toxic-asset buy-up program, which defies mark-to-market concepts in a much more extreme way than a mere relaxation of mark-to-market accounting rules. The Treasury Secretary claims taxpayers won’t lose a full trillion under Obama’s toxic-asset program, because the assets aren’t as worthless as their current market prices suggest. But if that’s true, why did he continue to insist on federal accounting rules that force banks to value their assets at the current depressed market prices? Either the accounting rules were right — in which case taxpayers will end up losing a trillion dollars — or they were wrong, amplifying financial panics — in which case the rules should be repealed, so that banks, not taxpayers, will be able to take the risk of holding the assets. (If these accounting rules, known as “mark-to-market” accounting, had been in place in the late 1980s, “every major commercial bank would have collapsed,” wiping out the economy).

It’s not even clear that all these bailouts are needed. As William Seidman, the banking official who helped clean up the S&L Crisis as head of the RTC, notes, the government’s $170 billion AIG bailout was absurdly expensive and wasteful. “We paid off huge debts that AIG had in the swaps market, which we probably did not have to do. We bought a number of assets from AIG at high prices, which we probably did not have to do.”

That includes a huge unneeded windfall for the investment bank formerly headed by Treasury Secretary Paulson, Goldman Sachs, a major donor to liberal politicians, which received billions of dollars from taxpayers that it did not even need, through the AIG bailout.

Obama’s record-breaking tax and spending increases violate his campaign promises to enact a “net spending cut” and not to raise taxes “in any form” on anyone making less than $250,000 a year.

Ironically, Obama’s “cap-and-trade” carbon tax might have the perverse effect of increasing, rather than reducing, greenhouse gas emissions. Cap-and-trade is a pernicious “form of tax farming.”

“Climate 350″–for 350 parts per million (ppm) of carbon dioxide (CO2) in the atmosphere–is fast becoming the new mantra of Gorethodox believers in climate doom and coercive energy rationing. Columbia University will host a conference on the topic next month, featuring NASA scientist James Hansen as the keynote speaker.

But as Newsweekreporter Sharon Begley points out, just to limit atmospheric concentrations to 450 ppm, nations would have to build 10,000 new nuclear power plants–one every other day from now until 2050–plus a mind boggling 1 million solar roof top panels per day from now until 2050. Even then, 450 ppm is attainable only if global energy efficiency improves by a whopping 500%, population grows only to 9 billion (instead of 10 billion or 11 billion), and global GDP grows at an anemic (near recession) rate of 1.6% per year.

What would it take to lower CO2 concentrations to 350 ppm? According to Begley’s source, Cal Tech chemist Nathan Lewis, global CO2 emissions would have to drop to zero by 2050.

Absent revolutionary changes in energy production, distribution, conversion, and storage–Nobel-caliber breakthroughs that nobody can plan or predict–lowering CO2 emissions to 350 ppm is impossible without draconian cutbacks in population, economic output, or both. Whether they realize it or not, the Climate 350 Club is asking us to go back to the caves.

For additional discussion, see my post on Masterresource.org.

Well, not overtly, but the Senate voted 89-8 for an amendment to the Fiscal year 2010 budget resolution (S. Con Res. 13), introduced by Sen. John Thune (R-SD), which would prohibit any future greenhouse gas cap-and-trade initiative from increasing gasoline prices and electricity rates for U.S. households and businesses.  

As University of Colorado professor Roger Pielke, Jr. points out, “The entire purpose of cap and trade is in fact to increase the costs of carbon-emitting sources of energy, which dominate US energy consumption. The Thune Amendment thus undercuts the entire purpose of cap and trade.” In other words, it is impossible to vote for the Thune amendment and support cap-and-trade and be consistent, candid, or straight with the American people.

Who voted for the Thune amendment? A whole bunch of cap-and-traders including Barbara Boxer (D-CA), Patrick Leahy (D-VT), Joe Lieberman (ID-CT), John McCain (R-AZ), Bernie Sanders (I-VT), and John Warner (D-VA).

Boxer tried to square the circle, proposing legislation, adopted 54-43, to compensate consumers for higher energy prices via tax rebates. But rebates after-the-fact are not the same as prohibiting measures that increase energy prices in the first place. Does anyone really believe that if carbon permit auctions under President Obama’s cap-and-trade initiative raise $646 billion or even $1.9 trillion for the Treasury, spendaholics in Congress will not use one dime of the boodle to fund pet projects, “green” jobs, or health-care “reform”?

Pielke, Jr. concludes on a cheery note:

The Thune Amendment effectively kills cap and trade as a mechanism for reducing emissions. I have little doubt that the legislation will go forward, and it likely will pass in some form and do many things. Its just that reducing emissions won’t be among them. Cap and trade is dead, but the charade will go on.

A consumation devoutly to be wished. On the other hand, it ain’t over ’till it’s over. We should not underestimate the capacity of politicians to insist on having their cake and eating it. Again, Boxer pretends to see no contradiction between voting for Thune and supporting Obama’s $646 billion to $1.9 trillion energy tax. The Thune amendment could also be jettisoned or vitiated by House-Senate conferees.

Nonetheless, the Thune amendment shows the path to victory. Cap-and-traders fear public retribution over high electricity and gasoline prices more than they fear the alleged horrors of global warming. Our task is obvious–keep calling cap-and-trade an energy tax, because that is what it is.

During the Great Depression, Herbert Hoover damaged the economy, and impoverished the American people, with costly, artificial attempts to stimulate the economy through increased government spending, financed by heavy taxes like the Revenue Act of 1932.

Obama is now doing the same thing through his proposed $2 trillion cap-and-trade carbon tax. That tax fulfills his prediction in 2008 to the San Francisco Chronicle (which didn’t report it) that “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s regressive excise taxes were in 1932. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air.

The $2 trillion that Obama’s proposed “cap-and-trade” carbon tax on energy use and utility bills is expected to raise is far more than the $646 billion the Administration earlier estimated. That’s at least $3,100 per family per year.

Obama is also emulating Herbert Hoover’s protectionism. Hoover signed the Smoot-Hawley tariff, which helped turn a recession into the Great Depression by triggering a trade war with other countries.

Similarly, the bill incorporating Obama’s carbon tax contains protectionist measures that will likely trigger an economically-destructive trade war. Indeed, Obama already started a trade war through a provision in his $800 billion stimulus package that blocked a measley 97 Mexican truckers from U.S. roads. That minor NAFTA violation “caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade,” destroying 40,000 American jobs. (Even before that, the Congressional Budget Office admitted that Obama’s stimulus package would actually shrink the economy in the long run).

The $2 trillion raised by Obama’s cap-and-trade carbon tax may be dwarfed by the money it siphons from consumers to well-connected corporations that have learned how to game cap-and-trade schemes.

In the Great Depression, President Herbert Hoover raised marginal tax rates to 63%, and went on a deficit spending binge. Similarly, Obama has proposed higher marginal tax rates, which will produce another $1.9 trillion in tax increases.

In spite of its massive size, Obama’s carbon tax won’t begin to pay for all his spending increases, such as a budget that will generate $4.8 trillion in increased deficits, Obama’s trillion-dollar toxic-asset program, and his $800 billion, economy-shrinking “stimulus” package, all of which contradict Obama’s campaign pledge of a “net spending cut.”

Obama’s carbon tax, like the tobacco tax increase he already signed into law, is a violation of his campaign promise not to raise taxes in “any form” on anyone making less than $250,000 per year.

In the wake of the release of the Waxman-Markey energy bill, many commenters have pointed to the drastic restrictions on domestic energy use to address greenhouse gas emissions, while some, like CEI, have pointed to the huge economic costs that would result — costs that would be paid for by consumers and in terms of reduced manufacturing and jobs.  Few have noted a further economic consequence — the possible disruption of the world trading system because of the bill’s endorsement of carbon border taxes on imports from countries that don’t have an energy-repressive regime.  Here’s what CEI’s Iain Murray has to say about that:

The bill as drafted clears the way for carbon protectionism.  It envisages “rebates” to companies that have to pay higher costs than their international competitors, which amounts to illegal state aid under WTO rules.  Further, it directs the President to institute what is laughably called a ‘border adjustment’ program requiring foreign companies to pay for the cost of carbon.  This is nothing more than a tariff aimed at eliminating the competitive advantage of other nations.  Taken together, these provisions represent the first shot in what is likely to prove a disastrous carbon trade war.

Margo Thorning of the American Council for Capital Formation and Bill Kovacs of the U.S. Chamber of Commerce provide hard and realistic criticism of carbon border taxes in National Journal’s Experts Blogs this week.

“Nobel Prize-winning liberal economist Joseph Stiglitz points out that the Treasury Secretary Tim Geithner’s plan to have the government subsidize investments in ‘toxic assets’ creates a serious moral hazard: Private investors will pocket any gains, while the federal government promises to cover virtually all potential losses: ‘Quite frankly, this amounts to robbery of the American people.’”

It’s the London Telegraph that’s reporting this, though. U.S. newspapers are too busy running puff pieces about Barack and Michelle Obama — and describing critics of Obama’s $800 billion stimulus package, which the Congressional Budget Office admits will shrink the economy in the long run, as being opposed to what the papers dishonestly refer to as the “economic recovery plan.” (With a few exceptions, the press did not report the CBO’s finding that the stimulus will actually shrink the economy, which contradicts Obama’s false claim that failing to pass the bloated stimulus package would lead to “irreversible decline.”)

Although many economists oppose the Administration’s policies, the newspapers make it sound like only right-wingers object to the Obama Administration’s bailouts. They do that even though the liberal Nobel Laureate and economist Paul Krugman, a big Obama supporter, admitted that Obama’s trillion toxic-asset buy-up program is a rip-off best described as “heads I win, tails the taxpayers lose.”

The result is that although Obama has proposed record budget deficits (expanding deficits by $4.8 trillion to an eye-popping $9.3 trillion, despite tax increases of $1.9 trillion), public opinion polls show 52% of the public approves Obama’s handling of the deficit.

In 2008, Obama explained to the San Francisco Chronicle that electricity bills would “skyrocket” under his Administration due to its global-warming regulations. But the press by and large wasn’t interested in reporting it, since it would have hurt Obama’s chances of getting elected.

Now, the Obama Administration is backing a two trillion-dollar cap-and-trade carbon tax. But that, too, is getting little press coverage — as are Obama’s broken campaign promises, like his pledge of a “net spending cut” if elected.

The U.S. press has barely mentioned Treasury Secretary Geithner’s role in the destruction of the economy of Indonesia, a major oil-producing nation of 200 million people, in the 1990s (even though Australia’s long-time Prime Minister Paul Keating has been scathing in his criticism of Geithner).

Given their unwillingness to print interesting — but ideologically inconvenient — news, it’s no wonder that lots of newspapers, like the Seattle Post-Intelligencer, have folded in the past year. Biased coverage is boring coverage not worth paying for.