2009

At risk of getting into a peeing match which my time budget may not allow me to finish, I believe that the dispute between Ed Morrissey over at Hot Air and the folks at the Washington Examiner joining Sen. David Vitter (and, by implication, I suppose me) is not necessary but worth resolving. Caution: it is also for the legislatively inclined or otherwise the pointy-headed. But, since I arguably joined the fray on Big Government on Tuesday, here goes.

At issue is a provision buried in both the Waxman-Markey and Kerry-Boxer “global warming” bills.

I had to leave for a few hours after starting my comment on this, in which time I decided not to wage the war over how strongly we need to argue that it prima facie nullifies the rest of the respective legislative language that too many lobbyists tout was carefully crafted to provide “certainty”. Lobbyists of course tend to say things reflecting well on their defense of client interests.

What is inescapable is that this language dispels such notions of certainty. But that shouldn’t be shocking. The bills statutorily establish “global warming” causation, for every existing or new increment of GHGs (read: employers, economic activity), as well as harm caused. And they fail to preempt states and elsewhere EPA as needed, or the National Environmental Policy Act, Clean Water Act or Endangered Species Act, or every other tool that’s already being tried out as a “global warming” law. Let alone the rest of the U.S. Code. All of which is relevant to context, as we shall see.

My point, truncated, is that this provision at issue clears out any legal clutter possibly standing in the way of ongoing attempts to treat the ESA, CWA, NEPA, and in fact all other laws on the books as carbon dioxide suppression/avoidance laws. These laws, particularly ESA, are sweeping in their power even to shut down, but particularly to block anything new. That is in many ways a game-changer for the greens, is why it is being fought, and saves years in the courts fighting over whether such authority actually exists. Now, if you choose, read on.

The issue is whether this language poses a serious, substantive threat or not, with what I view as the controlling language emphasized:

‘SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDATIONS.

(a) AGENCY ACTIONS.-The President shall direct relevant Federal agencies to use existing statutory authority to take appropriate actions identified in the reports submitted under sections 705 and 706, and to address any shortfalls identified in such reports, not later than July 1, 2015, and every 4 years thereafter.

(b) PLAN.-In the event that the Administrator or the National Academy of Sciences has concluded, in the most recent report submitted under section 705 or 706 respectively, that the United States will not achieve the necessary domestic greenhouse gas emissions reductions, or that global actions will not maintain safe global average surface temperature and atmospheric greenhouse gas concentration thresholds, the President shall, not later than July 1, 2015, and every 4 years thereafter, submit to Congress a plan identifying domestic and international actions that will achieve necessary additional greenhouse gas reductions, including any recommendations for legislative action.

So, when viewing the meaning of this provision at issue in the appropriate context in order to view its most likely meaning, we also should note two things. First, no one says that this bill if perfectly implemented would control global concentrations of greenhouse gases – which is the trigger for deciding that “more” is needed, a trigger set where it will be exceeded ab initio – or that it would have a detectable climate impact. Which is to say, going in, we know that the answer by EPA and the National Academy of Sciences (kidding, right?) will be, also ab initio, “more”. Second, bear in mind that this language at issue was important enough to be identically inserted in bills otherwise so different that they range from about 800 pages to 1,300 pages in two different houses of Congress.

Ed styles what he sees as the Examiner’s/Vitter’s questionable reading of this as follows: “If true, it would undermine the entire notion of a cap-and-trade system – and give the President dictatorial powers over energy production and manufacturing.” (emphasis in original)

This is already sufficiently detailed that I do not think the best approach is to address the conflict as whether there are “emergency powers” for the president in the provision – that was rhetorical license, I believe, as there is no such category created here, if that’s the issue for anyone and, if it is, it’s the wrong issue. Although, in practice, a command to exercise any extension of all statutory authority found in the U.S. Code (including this bill), whatever the law or program may be, in the name of attaining some carbon dioxide objective beyond U.S. regulatory control is far too similar to such a description for me to decide that such word choice is the issue.

Instead, the issue appears to be whether this provision opens a floodgate of executive activism, and/or litigation seeking to compel a reluctant executive, such that the idea that the “cap-and-trade” is anything but a floor as opposed to the ceiling and patently phony “certainty” it is sold and, sadly, accepted by many as.

That is, the issue is the objective, first half of Ed’s framing of things, disregarding for the moment the latter characterization of the language’s possible use.

I think the answer to that is obvious. Yes.

Whether the latter characterization, as allowing (let’s say “plenary”) power over all manner of economic activity requiring federal permits, is found in this language depends upon whether the greens would sue to ensure the letter of the 707(a) authority is followed, and prevail. Now we are speculating. But I speculate yes they would, and their record and that of the courts is that they would prevail more often than not.

Remember. The 1990 Clean Air Act Amendments brought “certainty”. Then EPA started to get clever, and the greens litigious, with the New Source Review provisions. Certainty, lost. I suggest that no one familiar with that progression quickly dismisses the above language as a new, substantial threat.

Then we turn to the world before Massachusetts v. EPA “global warming” case which suddenly divined that, well, golly, EPA can regulate carbon dioxide as a pollutant. Compare that to the world after that opinion, which reminds and affirms that – even though the notion of covering CO2 as a “pollutant” under the CAA was debated in 1990, and rejected – once the greens and the courts get together, with a little assist from an activist administration and EPA, we know how things turn out. Far less ambiguity has been tortured by the courts, including now the Supremes (you gotta read Scalia’s Mass. V. EPA dissent), into confessing to things that previously were dismissed far more rakishly than Ed dismisses the concerns expressed by the Washington Examiner and Sen. Vitter.

This also reminds us that the authority for an agency to do something is not the same as a requirement that it do something. That is relevant to what I see as a red herring, the idea that this “shall” language does not create any new powers, be they “emergency” or otherwise. Tru, dat. Yet at the same time it also removes any potential question whether any provision in any law which an activist administration now claims is or can be used as a GHG suppression measure is now authorized to be one. Between that and creating new authority is, I suggest, a distinction without a difference.

Remember. The day this law goes into effect, atmospheric concentrations will already be beyond what the law says is acceptable. And nothing that we do could lower them. But pretty well everything we might possibly try is now authorized. EPA doesn’t even need any new authority to change the acceptable atmospheric concentration from 450 parts per million from to 350. It’s on. All laws on the books are now interpreted, consistent with legislative intent, as tools to reduce or avoid GHG emissions in the name of lowering a global concentration.

This is why I suggest context is so important to understanding the meaning of this language.

I won’t even get into possible separation of powers or delegation issues raised here (if the National Academy of Sciences says jump and how high the federal government of the United States must act? Really?). As such, my conclusion is as follows:

The first paragraph at issue tells the executive branch to use all existing laws (and all authorities in this bill) to do whatever it thinks necessary to try and lower atmospheric GHG concentrations below where they are the day the law goes into effect; this of course goes far and beyond “cap-and-trade” quotas and timetables. The second paragraph says you can also ask Congress to spell it out if you think you are lacking authority despite “(a)”. But “(b)” is a complement to, not a condition precedent for, aggressive action under “(a)”.

This language approves the idea of implementing all federal statutes as GHG suppression measures. How huge that is is impossible to overstate. There is nothing on the books today supporting that proposition. So far, even in the absence of such a sweeping declaration, we rarely see the courts declare grants of authority as insufficient for all manner of mischief under the discretion granted EPA and other agencies called “Chevron deference”. That doctrine means that we have a fairly substantial burden of proving she was arbitrary and capricious in her interpretation of authority granted her by Congress.

EPA is already trying to implement the Clean Air Act to allow it to create a carbon dioxide cap-and-trade scheme in the context of a different cap-and-trade program the Agency had concocted despite recent admonition by a federal court that the Agency cannot just make up that very authority as it sees fit. It is also proceeding with what it calls a GHG “tailoring rule” to read the number 250 in the Clean Air Act as 25,000, even though the statute is clear that 250 means 250. And so on, as those of you who’ve toiled in the increasingly troubling field of EPA regulation know all too well.

Adopting such authority as that at issue here is not smart. The provision is not an accident. Remember. No one says this bill will have a climatic impact if the carefully designed caps and timetable are followed. If this legislation is indeed about the climate to its promoters, then this provision is intended just as it reads.

This language is a license to steal. It is a serious threat. Arguing whether it creates new authority argues a distinction without a difference. It effectively makes the cap and timetable mere sideshows, but inescapably ensures that seeking the refuge of “certainty” in this bill, as more and more CEOs have told me their lobbyists promise them is available here, is a fool’s errand.

In context, the reason for ensuring this precise language appeared identically in both “cap-and-trade” bills is clear. This is to be defeated, not dismissed. Guarding against alarmism on our side is proper. We should guard against dismissing broad grants or set-ups for interpretations of authority just as vigilantly.

Senators David Vitter (R-Louisiana) and John Barrasso (R-Wyoming) today called attention to a remarkably broad delegation of authority to the President in the Kerry-Boxer and Waxman-Markey energy-rationing bills that would require shutting down the U. S. economy beginning in 2015. Section 705 of Kerry-Boxer, S. 1733, requires that the EPA Administrator must submit a report to Congress every four years beginning in 2013 including a determination of whether the legislation and other policies in place are sufficient to avoid greenhouse gas concentrations above 450 parts per million of carbon dioxide equivalent (ppm CO2-e). Since concentrations are already at 430 ppm CO2-e and rising every year, there is no way that the policies in Waxman-Markey or Kerry-Boxer can keep them below 450. The U. S. economy could shut down completely, and emissions from other countries would soon push atmospheric levels past 450.

That’s where section 707 of Kerry-Boxer is triggered. Section 707 directs the President to use existing authority to keep atmospheric concentrations of greenhouse gases below 450 ppm CO2-e. Senators Vitter and Barrasso repeatedly asked EPA about this target beginning last summer. A few days ago they finally got answers to their questions from the Department of Energy’s Pacific Northwest National Laboratory. PNNL’s modeling shows that 450 ppm CO-e will be reached in 2010. Therefore section 707 will inevitably be triggered on July 1, 2015 if these provisions in Kerry-Boxer and Waxman-Markey are enacted.

What does that mean? Well, EPA Administrator Lisa Jackson was not willing to speculate when asked by the Senators. But it’s easy to see that the complex mechanisms of the cap-and-trade program in Kerry-Boxer and Waxman-Markey will have to be scrapped as of 2015. All those free ration coupons that big companies like Duke Energy and Exelon and P G and E are hoping to get won’t be worth anything because the President will be obligated to use whatever statutory authority exists to reduce emissions and get greenhouse gases back down to below 450 ppm CO2-e. All the command-and-control tools of the Clean Air Act will have to be used to require emissions reductions.

The kicker is that Senator Vitter also sent letters today to the heads of the big corporations that support Kerry-Boxer warning them that: “beginning July 1, 2015, the President would be mandated to deny discretionary permit requests for any activity that results in greenhouse gas emissions if the global greenhouse gas concentration of 450 ppm has been reached. Under this mandate, environmental groups will seek to block all new economic activities that require discretionary permits. Any allocated carbon credits (that is, ration coupons) …would be useless if discretionary permits are required.”

Then Senator Vitter’s letter plays the Sarbanes-Oxley card: “I wanted to ensure that you were aware of the impact sections 705 and 707 would have on your company’s operations and investments. Given your fiduciary duties, I know that you will advise your shareholders and others of the impairment of your financial condition and the value of any credit allocation that these sections’ enormous mandates and restrictions would create.” I hope James Rogers, CEO and Chairman of Duke Energy and the biggest corporate promoter of cap-and-trade legislation, has a hard time sleeping tonight. Ditto Peter Darbee of P G and E, John Rowe of Exelon, Jeff Sterba of PNM Resources, Andrew Liveris of Dow Chemical, Jeff Immelt of General Electric, and all the other members of the U. S. Climate Action Partnership.

Uh-oh.  Senator Max Baucus (D-Montana) is raising the stakes on a U.S. climate bill by endorsing the idea of some sort of tariff on goods from countries that haven’t taken steps to suppress fossil fuel use.  According to Reuters, Baucus, Chairman of the Senate Finance Committee, yesterday said:

“We must push our trading partners to do their part to curb harmful emissions and we must devise a border measure, consistent with our international obligations, to prevent the carbon leakage that would occur if US manufacturing shifts to countries without effective climate change programs.”

Currently the Senate Environment and Public Works Committee, chaired by Senator Barbara Boxer, has rushed through its own bill without minority input to try to catch up with the House, which passed its cap-and-trade bill – H.R. 2454 — on June 26, 2009. The House bill contains a border tax adjustment measure, while the Senate bill does not.  At least, yet.  But Baucus’ comments are a strong signal that the Senate bill will also include tariffs or border “adjustments,” i.e., taxes.

This unfortunate idea is gaining greater traction among global warming advocates as a way to maintain U.S. competitiveness for industries, such as steel and cement, that would be facing higher costs if an energy suppression bill to address global warming is passed.  Proponents of “border measures” also see this as a way to curtail so-called leakage of carbon-intensive industries and related jobs to other countries without similar constraints. Of course, the common justification for those who want to hobble their competition is the refrain: “Level the playing field.”  In Washington politics, that usually means bringing your competitors down to your level.  Check out this article for some possible consequences.

These endorsements could portend a carbon tariff push in Copenhagen when world climate pukkas gather on December 7, 2009. Luckily for people in the U.S., it’s not likely that a newly minted global warming bill will be in their pockets.

Unemployment is now higher in the U.S. than in Europe,  reports the Washington Post.  “The official U.S. unemployment rate, reported last Friday, now stands at 10.2 percent,” compared to “9.7 percent” in Europe.   This is the highest rate in more than 26 years, and marks a huge change from the recent past, in which unemployment was double the American rate in much of Europe, such as in France.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

On Friday, November 6th, the Cooler Heads Coalition hosted Matthew Sinclair, research director of the Taxpayers’ Alliance. Mr. Sinclair presented his new study,  “The Expensive Failure of the European Union’s Cap-and-Trade Scheme.” The study shows that the EU’s experience with energy rationing climate policies is a warning rather than a model.

Video of Mr Sinclair’s presentation, “The Expensive Failure of the EU’s Cap-and-Trade Scheme”

Power point Presentation of “The Expensive Failure of the EU’s Cap-and-Trade Scheme”

Warren Buffet, one of the most respected investors in America, recently purchased Burlington Northern, one of the nation’s largest railroads with some 32,000 miles of track.  BN like almost all railroads carries coal – lots of it from the Powder River Basin in Wyoming to the nation’s electrical power plants.  But President Obama and his Green allies are trying to end the use of coal in America.  If they succeed, the rail sector will collapse.

Buffet, according to the Wall Street Journal weekend edition is “betting on good old fashioned stuff – such as grain, coal for power plants and consumer goods imported from Asia – and the need to move it.”  Let’s hope he knows something we don’t – perhaps, Obama is about to do a “Clinton” reversal.  That would be good for America, for affordable energy and (ironically) also good for the Democratic party.  We can hope.

Announcements

A video of “Deconstructing Global Warming,” a Cooler Heads Coalition briefing by Dr. Richard Lindzen, the Alfred P. Sloan Professor of Meteorology at the Massachusetts Institute of Technology, is now available online at GlobalWarming.org.

In the News

Our Choice or Al Gore’s Choice?
Nick Loris, Heritage Foundry, 6 November 2009

Climate Policy Imperils China, India
Marlo Lewis, GlobalWarming.org, 5 November 2009

Election Defeats Make Dems Cautious on Climate
Jonathan Salant, Bloomberg, 5 November 2009

Remarks by Czech President Václav Klaus on Cap-and-Trade
Washington Times Briefing “Advancing the Global Debate over Climate Change Policy,” 4 November 2009

The Four Horsemen of Cap-and-Trade Defeatism
Chris Horner, Energy Tribune, 4 November 2009

The Economics of Climate Change: Essential Knowledge
Jerry Taylor, MasterResource.org, 4 November 2009

GW Alarmism Given Same Status as Religion
Stephen Adams & Louise Gray, Telegraph, 3 November 2009

Video: Stop Energy Rationing in Australia
Cori Bernardi, Herald Sun, 26 October 2009

News You Can Use

Expensive Failure of Cap-and-Trade in Europe

Between January 2005 and the end of 2008 the European Union’s cap-and-trade scheme cost consumers €93 ($123) billion or €185 ($245) per person, according to “The Expensive Failure of the EU’s Emissions Trading Scheme,” a new report by Matthew Sinclair of the Taxpayers’ Alliance.

Inside the Beltway

Myron Ebell

EPW Passes Kerry-Boxer

The big news this week is that after days of partisan wrangling, the Senate and Environment and Public Works Committee on Thursday passed the Kerry-Boxer energy-rationing bill. The vote was eleven to one, with Senator Max Baucus (D-Mont.) the one no vote.  The committee’s seven Republicans boycotted the mark-up session and did not vote. Chairman Barbara Boxer’s (D-Calif.) high-handed tactics have so poisoned the Senate atmosphere that I think the Kerry-Boxer bill is now dead for the 111th Congress (which continues to the end of December 2010).

Under committee rules and precedents, no mark-up session can be held unless a majority of committee members including at least two members of the minority are present. The Republicans began boycotting the mark-up on Tuesday because, as the committee’s ranking Republican, Senator James Inhofe (R-Okla.), insisted, it was premature to mark up the bill because official cost estimates had not been completed by the Environmental Protection Agency.

Chairman Boxer then had EPA Administrator Lisa Jackson meet with the committee.  She explained that it would take EPA several weeks to complete a full analysis of the bill, but that it didn’t matter because the bill was similar to the Waxman-Markey bill and therefore the costs would be similar. The problem with this claim is that the EPA’s analysis of Waxman-Markey underestimated the costs by making highly unrealistic assumptions. For example, EPA assumed that nuclear power would double by 2035.

Faced with the Republican boycott, Chairman Boxer interpreted the rules to the effect that two members of the minority were required to consider amendments, but not to vote on final committee passage.  So she then went ahead and marked up her “chairman’s mark” version of S. 1733 with no Republicans present. The problem I see here is that the chairman’s mark is an amendment to S. 1733 in the nature of a substitute. Thus I conclude that Chairman Boxer has violated her own interpretation of the committee’s rules.

It was obvious before Boxer went ahead with what Inhofe called the “nuclear option” that this would unite Republicans in opposition to the bill.  So I can only conclude that Boxer or the Democratic leadership have concluded that Kerry-Boxer is dead.  By voting it out of committee, they at least have something to take to COP-15 in Copenhagen in December.  Senator Baucus’s no vote is also significant.  As Chairman of the Senate Finance Committee, he has as much jurisdiction over cap-and-trade legislation as does the EPW Committee.  He did not sound pleased with what Boxer was doing.

The U.S. Chamber Finds a New Leader

The U. S. Chamber of Commerce on November 3 sent a letter to Senators Barbara Boxer (D-Calif.) and James Inhofe (R-Okla.), Chairman and Ranking Republican, respectively, of the Environment and Public Works Committee, that touted an op-ed published in the New York Times on October 11th by Senators John Kerry (D-Mass.) and Lindsey Graham (R-SC) as the way forward on energy-rationing legislation. The letter, signed by the Chamber’s executive vice president, Bruce Josten, said in part: “Senators Kerry and Graham have set forth a positive, practical and realistic framework for legislation, one that echoes the core principles that the Chamber embeds in all of its communications on climate policy. The Chamber agrees with a great deal of the principles set forth by Senators Kerry and Graham….”

The Chamber’s letter immediately made a big splash on Capitol Hill.  Environment and Public Works Committee Chairman Barbara Boxer read the letter into the record at one of the committee’s attempted mark-up sessions on the Kerry-Boxer bill and said, “This  really is a game-changer.”

The Environmental Defense Fund, which has masterminded the campaign against the Chamber that has included several major corporations withdrawing their memberships, praised the letter. My group, the Competitive Enterprise Institute, did not.  We sent out a press release calling on small businesses to withdraw from the Chamber and join with us in continuing to fight against energy-rationing legislation.

The Chamber responded by saying that they hadn’t changed their position on what kind of legislation it would support.  That may be so, but the timing was clearly designed to boost the supporters of energy-rationing legislation-which it did.  Moreover, the Chamber has now identified Senators Kerry and Graham as the leaders on the issue that the Chamber will work with and follow.  The Chamber claims to support solid, workable, commonsense, realistic, and practical climate policies.  And John Kerry is just the Senator to lead us to those policies?  Solid, workable, realistic, practical, commonsense-yes, those are just the words that come to mind when Senator Kerry’s name comes up.

Across the States

Oregon Government Deliberately Underestimated Cost of Green Power by 40 Times

An investigation by the Oregonian shows that state officials deliberately underestimated the cost of Governor Ted Kulongoski’s plan to lure green energy companies to Oregon with taxpayer subsidies, resulting in a program that cost 40 times more than unsuspecting lawmakers were told.

Around the World

Copenhagen Already a Failure

Next month in Copenhagen, the United Nations will host negotiations for a treaty to mitigate climate change. The December conference was supposed to be the deadline for a final agreement, but diplomats are far apart on how to distribute the huge costs of reducing global greenhouse gas emissions. This week, Yvo de Boer, head of the UN Framewoprk Convention on Climate Change, told Bloomberg that too little progress has been made to conclude a treaty at a summit in Copenhagen next month, and that it may take another year.

Solar-Here Today and Gone Tomorrow

Julie Walsh

According to the Boston Globe, last year Evergreen Solar built a new factory in Massachusetts with $58 million in state aid, but is now shifting its assembly of solar panels from there to China. Plus Evergreen will be writing off $40 million in equipment, due to the move. The biggest irony in this story is that one main reason solar panel factories will move to China is that Chinese energy prices to assemble them are less!

Marlo Lewis goes further, “China is investing heavily in solar panel and wind turbine manufacture, but China does not cap carbon. Also, only a small fraction of China’s production of solar photovoltaic generators – 20 megawatts out of 820 megawatts (2%) produced in 2007 – is for China’s domestic market. So capping domestic carbon emissions is not a prerequisite to success in exporting clean-tech products, nor is having a large domestic market for such products.”

Chinese solar has been growing by leaps and bounds. One reason-“China is not enforcing environmental regulations, and many of the new factories are dumping toxic silicon tetrachloride (a byproduct of polysilicon production) directly into nearby farmlands.  For perspective, 4 tons of this toxic byproduct is produced for every ton of polysilicon. Because it is expensive (the cost to produce one ton is approximately $84,500 versus the Chinese companies making it for $21,000 to $56,000 a ton) and time-consuming to set up systems to recycle the hazardous materials, companies are instead dumping indiscriminately, and people close to these sites are complaining of illness, crop failures, acrid air, and dead fields.” (ilovecarbondioxide.com)

Obama recently went to Florida to announce his plans for modernizing the electric grid, and visited a major new solar energy facility. And where were those solar panels manufactured? The Philippines.

In recent testimony before the Senate Environment and Public Works Committee, energy secretary Steven Chu makes a convoluted case for S. 1733, the Clean Energy Jobs and American Power Act, a.k.a. the Kerry-Boxer cap-and-trade bill.

Chu argues roughly as follows. Global investment in wind turbines and solar panels could reach $3.6 trillion by 2030. China is investing heavily. If we don’t ramp up our investment in “clean tech” products, we’ll be left behind, become increasingly dependent on foreign producers, and China will eat our lunch. The key to growing the U.S. clean-tech sector is to “put a price on carbon” — establish a “cap on carbon emissions that ratchets down over time.”

This is poppycock, as I explain today on MasterResource.Org, the free-market energy blog. 

Yes, China is investing heavily in solar panel and wind turbine manufacture, but China does not cap carbon. Also, only a small fraction of China’s production of solar photovoltaic generators — 20 megawatts out of 820 megawatts produced in 2007 — is for China’s domestic market. So capping domestic carbon emissions is not a prerequisite to success in exporting clean-tech products, nor is having a large domestic market for such products. The experience of the very country Chu spotlights as model and threat rebuts rather than supports the case he wants to make.

A key point Chu completely ignores is that, apart from certain niche markets, “clean tech” products consume more wealth than they create. That’s why they cannot “compete” without benefit of market-rigging mandates, subsidies, and penalties levied against fossil energy.

A fresh example of this inconvenient fact comes to us today from the great state of Massachusetts, home of Sen. John Kerry, chief sponsor of S. 1733, and Rep. Ed Markey, co-sponsor of the House companion bill, H.R. 2454, a.k.a. Waxman-Markey.

The Boston Globe reports that, ”A little more than a year after cutting the ribbon of a new factory in Devens built with $58 million in state aid, Evergreen Solar has announced it will shift its assembly of solar panels from there to China.”

Evergreen received “$58.6 in grants, loans, land, tax incentives, and other support,” says the Globe. Yet, ”Through the first nine months of this year, Evergreen lost $167 million, compared with $33.6 million for the same period last year.”

What would Chu have to say about this? Evergreen is not losing money because there’s no cap on carbon. Massachusetts is one of several states participating in a cap-and-trade program known as the Regional Greenhouse Gas Initiative (RGGI).

Why is Evergreen expanding operations in China?  ”Lower costs.” Such lower costs include lower-cost energy. To repeat, China does not have cap-and-trade; it does not put a price on carbon.

Now, I’ll wager that Evergreen would be losing money even if Massachusetts were a Kyoto-free zone. But we may surmise that Evergreen would not shift its operations to China if China’s economy were carbon-constrained.

Chu should at least consider the possibility that pricing carbon would vitiate what little competitiveness the U.S. clean-tech sector has. Low-cost energy is a source of competitive advantage, as China powerfully demonstrates. By increasing energy costs, cap-and-trade would make all U.S.-based manufacture less competitive, including companies specializing in clean-tech products.

Jonathan Pershing, head of the U.S. delegation at the UN climate talks in Barcelona, says China should cut its CO2 emissions 50% by 2050.

Reuters reports:

BARCELONA, Spain, Nov 5 (Reuters) – China should roughly halve its greenhouse gas emissions by 2050 to keep the world on a safe climate path, the head of the U.S. delegation at U.N. climate talks in Barcelona said on Thursday.

Leading industrialised countries say that the world must halve greenhouse gases by 2050 to avoid the worst effects of climate change, and have committed to lead by cutting their own emissions by 80 percent.

China should cut by about 50 percent, leaving space for poorer countries to grow their economies, Jonathan Pershing told Reuters.

“If you put China in there at a 50 percent reduction, if we’re a bit higher, that gives lesser developed countries a bit lower. If they are in that middle band, plus or minus some percentage, that seems about right.”

China would be on course to meet that goal if it repeated its present energy efficiency five-year plan into the future, he added. “They’re doing pretty well,” he said.

As discussed in previous posts, meeting the EU/UN/Al Gore CO2 “stabilization” goal — 450 parts per million by 2050 — would require heroic (suicidal?) sacrifices on the part of developing countries. Stabilization at 450 ppm would require, at a minimum, a 50% reduction in global emissions by 2050. Because most of all the increase in global emissions over the next four decades (indeed, the next 90 years) is projected to come from developing countries, meeting the stabilization target would require developing countries to lower their emissions more than 60% below baseline projections even if industrial countries magically achieve zero net emissions by 2050!

Barring technological breakthroughs (in their nature unpredictable) that dramatically lower the cost and improve the performance of non-emitting energy technologies, the only way developing countries could comply is by restricting their use of energy. Yet developing countries are poor in no small part because they lack access to abundant, affordable energy. The 450 ppm goal is a recipe for “stabilizing” global poverty.

Don’t be fooled by Pershing’s remark that all China needs to do is keep repeating its “five-year” plan. Supposedly, China is already “well on the way” to reducing its energy intensity 20% by 2010. Based on the only data available, Roger Pielke, Jr. finds that China has cut intensity only 7.4% from 2005 to 2008, “meaning that it has a long way to go to reach a 20% target by 2010.” Besides, even if the first five-year emission intensity reduction plan succeeds, it represents the low-hanging fruit. Replicating that achievement every five years would become increasingly costly and difficult.

That a 450 ppm CO2 stabilization target cannot be met unless China slams the brakes on its economy has been clear from basic emissions arithmetic for some time. What’s new is that a U.S. Government official is quantifying, in the context of climate treaty negotiations, what “meaningful participation” by China actually means.

So far, India and China have escaped Kyoto-style energy rationing. This makes their products more competitive in global markets, and pulls capital and jobs away from CO2-regulated economies.  But we’re only two years into the first (2008-2012) Kyoto compliance period. At some point, free riders have to pay up or get off the train.

The EU, Japan, and the United States (if it ratifies Kyoto II) will not accept a permanent arrangement under which they bear all the costs of energy rationing, fork over billions in technology transfers and climate assistance to developing countries, and export more jobs to India and China.

The longer the Kyoto project endures, the greater the pressure India and China will face — in the form of carbon tariffs, for example — to join the club of the carbon-constrained.

If India and China want to protect their right to grow and avert an economically-debilitating era of trade conflict, they should get off the global warming bandwagon as soon as possible. A balanced assessment of the science does not justify alarm. India and China already act on the premise that global warming policy is more dangerous than global warming itself. It’s time for their words to match their deeds.

Yesterday the Washington Times hosted a briefing, “Advancing the Global Debate over Climate Change Policy,” at the Willard Hotel in Washington, D.C. The event featured four panels, one each for lobbyists, members of think tanks, Members of Congress, and foreign policy experts. This last panel included Czech President Václav Klaus, and his excellent remarks are below:

Václav Klaus, Washington Briefing: Advancing the Global Debate over Climate Change Policy, November 4, 2009.

“Many thanks for the invitation and for the courage to organize such an important gathering in the moment when political correctness tells you not to do it.

We are meeting one month before the Climate Change Copenhagen Summit and several weeks before the U.S. Senate hearing regarding the cap-and-trade scheme. For these reasons, today’s meeting can’t be an academic conference, even though the topic still needs academic discussion. There is no consensus – neither in science, nor in economic analysis or politics.

I left Prague after signing of the Lisbon Treaty and came here only a few minutes ago, which means that I missed most of your conference. I’m sorry for that.

I have already been at a UN Summit in Copenhagen before. It was in 1995 at the so called Social Summit. At that time, the Summit was attended by then US Vice President Al Gore who – so it seems – will be there again this year. I did also attend, as Prime Minister of the Czech Republic, but I don’t plan to go there now. I don’t see any chance to influence the results or to be listened to.

In 1995, there were huge demonstrations there organized by all kinds of anti-establishment groupings – from socialists and greens to anarchists and anti-globalizationists. I have never seen such clashes between demonstrators and police and army forces before. The difference is that I don’t expect any demonstrations in Copenhagen now. The anti-establishment people have in the meantime become insiders and will be sitting in the main hall. This is a shift with far-reaching consequences.

My views on the doctrine of global warming and especially on the role of man in it are relatively known. My book with the title “Blue Planet in Green Shackles” has been already published in 12 languages and, two and a half years after its original publication, I don’t have any urgent need to rewrite it.

We should not forget how the doctrine of global warming came into being. In a normal case, everything starts with an empirical observation, with the discovery of evident trends or tendencies. Then follow scientific hypotheses and their testing. When they are not refuted, they begin to influence politicians. The whole process finally leads to some policy measures. None of this was the case with the global warming doctrine.

It started differently. The people who had never believed in human freedom, in impersonal forces of the market and other forms of human interaction and in the spontaneity of social development and who had always wanted to control, regulate and mastermind us have been searching for a persuasive argument that would justify these ambitions of theirs. After trying several alternative ideas – population bomb, rapid exhaustion of resources, global cooling, acid rains, ozone holes – that all very rapidly proved to be non-existent, they came up with the idea of global warming. Their doctrine was formulated before reliable data evidence, before the formulation of scientifically proven theories, before their comprehensive testing based on today’s level of statistical methods. [1] Politicians accepted that doctrine at the Rio Earth Summit in 1992 and – without waiting for its confirmation – started to prepare and introduce economically damaging and freedom endangering measures.

Why did they do that? They understood that playing the global warming game is an easy, politically correct and politically profitable card to play (especially when it is obvious that they themselves won’t carry the costs of the measures they implement and will not be responsible for their consequences).

I don’t see any problem with the climate now, or in the foreseeable future, and for that reason I am not sufficiently motivated to discuss the technicalities of the cap-and-trade scheme. I only protest against calling it a “market solution.” It reminds me of the communist planners who similarly talked about “using market instruments” when they finally came to the conclusion that “planning instruments” did not work. Markets can’t be used by anybody.

We should not deceive ourselves. Cap-and-trade scheme is a government intervention par excellence, not a “market solution.” How much “to cap” is the decision of the government (and the European failure several years ago – when too many carbon permits were issued – is I hope well known here). The size of the cap defines the price of carbon and this price is nothing else that a tax imposed upon citizens of the country. I agree with Lord Monckton that the cap-and-trade bill “is the largest tax increase ever to be inflicted on a population in the history of the world.” [2] How is it possible that such arguments are not used? Why does nobody argue that to tax energy means that the costs of anti-global warming policy will disproportionally fall onto the poor people? What bothers me is that to “trade” the artificial “good” – the permits – means that a new group of rent-seekers will arise who will make profits at our expense. Why doesn’t anybody say that the carbon permits have no intrinsic value other than by government decree? I could continue along these lines.

But we should return to the beginning. Despite huge scientific efforts and spending, it has not been proved that the human effect on the climate is statistically significant. Once again Lord Monckton: “the correct policy to address a non-problem is to have the courage to do nothing.”

This country, my country, as well as the rest of the world face many real issues. We do not need to solve non-existing problems. I don’t think the real issue is temperature and/or CO2, but a new utopian vision of the world. We have only two ways out: salvation through carbon capping or prosperity through freedom, unhampered human activity, productivity and hard work. I vote for the second option.”

[1] The IPCC doesn’t speak about testing. They prefer to use the term “verification” instead – they do not try to invalidate their models, they seek supporting evidence only.

[2] Interview with Lord Christopher Monkton, EIR, June 12, 2009, p. 47