William Yeatman

Ben Lieberman, an energy policy scholar at the Heritage Fondation, testified yesterday before the House and Senate Western Caucus, on the economic impact of the Waxman-Markey American Clean Energy and Security Act, a cap-and-trade energy tax that passed through the House of Representatives on June 26th.

Here’s a sobering excerpt:

“Overall, Waxman-Markey reduces gross domestic product by an average of $393 billion dollars annually between 2012 and 2035, and cumulatively by $9.4 trillion dollars.  In other words, the nation will be $9.4 trillion dollars poorer with Waxman-Markey than without it.”

To read the full testimony, click here.

Thanks to a regulatory assault by the Obama administration, the coal industry’s very existence is now in doubt. On the demand side, the EPA is trying to use the Clean Air Act to squeeze coal out of the energy business (to learn more, click here). On the supply side, Obama’s EPA wants to use the Clean Water Act to close coal mines.

It’s unprecedented-never before has the government acted so forcefully to destroy an American industry this large. All so Obama can placate the global warming alarmists for whom coal is evil.

Yesterday, my colleague Myron Ebell spoke at the 2009 Coal Summit in Bluefield Virginia. More than 150 representatives from businesses all along the coal supply chain were there, and their spirit in the face of adversity was heartening. There is no quit among Appalachian coal miners-they are determined to fight.

To read more about the coal summit, here’s a write up on the event from the Bluefield Daily Telegraph.

Announcements

The Competitive Enterprise Institute’s Marlo Lewis today unveiled his new film, Policy Peril: Why Global Warming Policies Are More Dangerous Than Global Warming Itself. Over the next two weeks, he’ll be posting on globalwarming.org one excerpt from the film a day along with comments and links to newer information that has since come out. The videos present a powerful argument that the global warming debate is very far from “over.”

The Marshall Institute this week released “The Cocktail Guide to Global Warming,” a succinct compendium of replies to questions about climate change.

In the News

The Climate Science Debate Is Just Getting Interesting
Marlo Lewis, MasterRsource.org, 24 July 2009

Cold Shoulder to Climate “Urgency”
George Will, Washington Post, 23 July 2009

NY Mayor as Big a Climate Hypocrite as Gore
Leo Standora, New York Daily, 23 July 2009

Toxic Revenge
Silvia Santacruz, Forbes, 21 July 2009

GOP Targets Cap-and-Trade Supporters
Wall Street Journal, 21 July 2009

Obama’s Wacky Climate Czar
Joseph Abrahams, Fox News, 21 July 2009

Global Warming’s Missing Link
Chris Horner, Energy Tribune, 20 July 2009

Governors Bite Back
Paul Chesser, American Spectator, 20 July 2009

News You Can Use

Department of Inefficient Energy

The Wall Street Journal this week reported on a government audit of the Department of Energy that claims the DOE wasted almost $11 million in taxpayer money in 2009 due to inefficient energy use.

Your Taxpayer Dollars Pay for Alarmist Science
According to a new paper, “Climate Money,” written by Joanne Nova for the Science & Public Policy Institute, the federal government has spent $32 billion on climate research.

Inside the Beltway

Myron Ebell

All Politics Is Local

Senate Democratic leaders said this week that delaying votes on health care legislation until the fall will not derail the global warming express. Sure. Seriously, the question is whether health care will dominate town meetings during the August congressional recess or voters will still be angry about passage of Waxman-Markey. If enough voters still want to give their Senators an earful about cap-and-trade, then my guess is that it will have no momentum in the fall and the leadership will have a hard time rounding up sixty votes for anything related to energy rationing.

A video posted on You Tube of a town meeting that Rep. Michael Castle (R-Del.) held over the Fourth of July recess is instructive in this regard.  Castle was one of the eight Republicans who voted yes on final passage of the Waxman-Markey bill.

A recent whining fundraising appeal from Fred Krupp of Environmental Defense Fund confirms that the House was flooded with calls and e-mails opposing Waxman-Markey: “For some House offices, their calls overwhelmed the switchboard.”  Krupp blames it on an organized conspiracy led by Rush Limbaugh and Sarah Palin and “financed with hundreds of millions of dollars from big polluters.” Too bad he doesn’t mention who those big polluters are. As far as I can tell, many of the biggest companies in the U. S. support cap-and-trade and a couple dozen of them belong to the U. S. Climate Action Partnership. EDF is a member of USCAP and works as a front group for big companies that hope to get rich off the backs of American consumers from the higher energy prices required by cap-and-trade. Hundreds of millions has a nice ring, but does anyone actually believe that the opponents of cap-and-trade have even a tenth of the funding of its supporters?

So here’s hoping that Senators back home in August are going to hear from lots of constituents about Waxman-Markey and what energy rationing will do to them.

A Climate Bill We Can Support

Representative Marsha Blackburn on Thursday filed a discharge petition to bring her bill, H. R. 391, to a vote on the House floor. H. R. 391 would simply prohibit the Environmental Protection Agency from regulating greenhouse gas emissions using the Clean Air Act.  A discharge petition is used to try to bring a bill to the floor that the chairman of the committee of jurisdiction opposes and won’t permit the committee to vote on. To discharge a bill from committee requires signatures from a majority (218) of House Members, so it’s not easy.

The Waxman-Markey energy-rationing bill that the House passed by a 219-212 vote on June 26th includes pre-emption of the Clean Air Act (albeit a partial and less-than-airtight pre-emption). Thus, the House has already agreed that using the Clean Air Act to regulate carbon dioxide emissions is a bad idea that needs to be prevented. It could be argued that Members have no reason not to sign the discharge petition to implement a piece of that bill. Doing so could also provide some cover for Members who are being attacked by their constituents for voting for Waxman-Markey.  So although Blackburn’s petition is a long shot, it does present interesting political possibilities.

Around the World

Climate Hero: Indian Environment Minister Jairam Ramesh

Jairam Ramesh, India’s environment minister, this week admonished two diplomatic envoys for insisting that India sacrifice poverty reduction for climate change. During a press conference on Monday, Ramesh told U.S. Secretary of State Hillary Clinton that he would “like to make it clear that India’s position is that we are simply not in a position to take on legally binding emission reduction,” after Clinton had pressed for Indian participation in an international effort to reduce emissions.

Yesterday, Ramesh hosted Swedish Environment Minister Andreas Carlgren, who claimed that developed nations were willing to put “money on the table” to help developing nations pay for expensive energy climate policies, but only if developing countries agreed to act, according to the Financial Times. Ramesh dismissed his counterpart’s suggestion, and he even took a shot at alarmist science that predicts the Himalayan glaciers will disappear in 40 years. “Science has its limitation,” Ramesh told Carlgren, “you cannot substitute the knowledge that has been gained by the people living in cold deserts through everyday experience.”

Across the States

California: 1 Step Forward, Two Steps Back

California Governor Arnold Schwarzenegger (R) and Democratic and Republican leaders of the state legislature agreed this week to a temporary fix for the state’s $26 billion budget deficit.  It includes a provision to allow new oil production within state waters (which extend three miles out from the coastline), which is expected to generate $1.8 billion in royalties over the next ten years plus higher tax receipts from the additional economic activity.

This is quite a change from California’s strong and long-term opposition to drilling in federal offshore areas, even in areas more than fifty miles from shore.  Schwarzenegger wrote a letter to Rep. Richard Pombo (R-Calif.), Chairman of the House Resources Committee, in 2006 opposing Pombo’s bill to open federal offshore areas to oil and gas exploration. The bill would have given States veto power over drilling within fifty miles of their coasts and a share of federal royalties. The bill passed the House, but a big majority of California’s 53 House Members voted against it.

Also this week, the California Small Business Roundtable released a report that estimates that AB 32, the Global Warming Solutions Act (a climate bill that would reduce California emissions by 25% from current levels through 2020), would cost 1.1 million jobs. The state budget would lose nearly $5.8 billion in taxes.

The Science

New Peer Reviewed Study Throws Cold Water on Alarmist Predictions

Carl Volk
A new paper on climate sensitivity by Drs. Richard Lindzen and Yong-Sang Choi of MIT has been accepted for publication in Geophysical Research Letters. Their paper compares the observed change in global forcing with the observed change in sea surface temperature to determine that climate sensitivity is low (under 0.5 degrees C for a doubling of CO2) and is dominated by negative feedbacks that work to dampen the effects of increasing CO2. This research runs completely contrary to the conclusions of the U.N. Intergovernmental Panel on Climate Change and suggests that man-made global warming will be minimal. Lindzen discussed the paper in layman’s terms at Heartland’s recent climate change conference in DC. The accepted paper can be found here.

Springtime in the Rockies

Julie Walsh

Last week, I went heli-hiking near Glacier National Park in the Canadian Bugaboos where they were enjoying spring flowers. A 40-something guide mentioned that their recent spring was the coldest that she had ever lived through. Heartland Institute’s James Taylor recent piece explains the still-receding glaciers despite the long-term cooling trend.

Elsewhere, this graph from the University of Illinois Polar Research Group shows the continued rebound of Arctic sea ice.  And in the Southern Hemisphere, Argentina has been experiencing historic snow.

Yesterday my colleague Myron Ebell commented on a story that had appeared on the New York Times (France Resists a Power Monitoring Business,” 21 July 2009, David Jolly), about how French regulators intended to collect payment from a company that facilitates energy efficiency in homes and businesses.

Myron extracted this quote from the article:

“At this rate, it will soon be obligatory in France to consume large quantities of electricity, or face taxes and fines, and maybe imprisonment, too,” the antinuclear group Sortir du Nucléaire said in criticizing the decision,”

And he noted, “Another reason why I love the French.”

To which I responded in an email,

This isn’t dissimilar from “decoupling” utility bills from energy consumption, which the CPUC claims is “largely responsible” for California leading the nation in energy efficiency. In this instance, it seems that French regulators are making the middleman pay, instead of the customer, assuming the news report is accurate-which it likely isn’t. I have a tough time believing that the NYT reporter knows the French regulatory regime for electricity pricing well enough to draw such a distinction.

According to Waxman, decoupling is not mandated in the energy efficiency provisions of the American Clean Energy and Security Act, but that’s debatable (the text appears to make decoupling a precondition for receiving federal energy efficiency funds, although it leaves the decision up to state regulators).

Reading this exchange, it’s not necessarily clear what “decoupling” means, so I’ll spell it out. A provider of electricity makes money based on how much electricity it sells. So if the government forces consumers to become more energy efficient, the utilities lose money, because people need less electricity. Utilities, however, are very large companies, whose business model is almost entirely predicated upon federal and state political decisions. That is, utilities are big-time donors to politicians who need money to win elections so they can keep on wasting taxpayer money. As such, politicians who want to appease their “green” base by forcing consumers to become more energy efficient also want to appease their friends in the utility business. That’s why California politicians “de-coupled” energy consumption from the price of electricity. By freeing the price of electricity from the forces of supply and demand, California politicians ensure that utilities get paid, no matter how energy efficient consumers in the Golden State become.

I just returned from Capitol Hill, where I attended a briefing by the Heritage Foundation’s Nicolas Loris and Dr. David Kreutzer, on modeling the economic impact of the Waxman-Markey Clean Energy and Security Act.

Here’s the take-away:

You probably have heard House Speaker Nancy Pelosi (D-San Francisco) claim that a cap-and-trade energy rationing scheme will cost Americans “only a postage stamp a day.” Her assertion is based on two economic studies, one by the Congressional Budget Office, and the other by the Environmental Protection Agency. Each study is grossly flawed, but in different ways.

The CBO study ignores the impact of a cap-and-trade on Gross Domestic Product, which is like trying to calculate a baseball player’s batting average without including singles or doubles. Of course the CBO underestimates the economic impact of Waxman-Markey-it ignores the fact that expensive energy makes everything made with energy more expensive, which is everything.

The EPA study generates such a low cost for cap-and-trade energy rationing by using an accounting trick called “discounting.” It’s complicated, but the important point to remember is that no other reputable study-not the CBO’s, not the liberal leaning Brookings Institute’s, not the U.S. Black Chamber of Commerce’s-uses this trick, and without it, the EPA’s cost calculation soars.

Global warming alarmists steadfastly refuse to consider the costs and benefits of climate change mitigation despite (or perhaps because of) evidence that expensive-energy policies to fight global warming are worse for human welfare than rising temperatures. Whenever a reputable economist states the obvious-that “greening” the global economy is expensive and difficult-environmentalists respond by noting that an economist is not a climate scientist, and the science is settled, because there is a consensus. The environmentalist’s riposte is gibberish, of course, but it has the effect of subtly smearing the aforementioned economist and obscuring the economic consensus that climate change mitigation is economically harmful.

In light of this tactic, it is interesting that Rajendra Pachauri, the head of the Intergovernmental Panel on Climate Change, told the Guardian that “the cost” of fighting global warming, “could undoubtedly be negative overall.” That is, we can make money by enacting expensive energy policies to fight global warming, presumably by having the government create millions of so-called “green jobs.”

How would Mr. Pachauri know? He is neither an economist not a climate scientist. In fact, he is a railroad engineer by trade, which, evidently, is a suitable background for the head of the world’s preeminent body of global warming scientists.

In the News

A Cap-and-Trade Warning from Europe
Member of European Parliament Holger Kramer, Washington Times, 17 July 2009

Update on EPA Saga
Sam Kazman, GlobalWarming.org, 17 July 2009

Al and Friends Create a Climate of McCarthyism
Bjorn Lomborg, The Australian, 16 July 2009

A Real Choice on Climate Change: Do Nothing
William Yeatman, TownHall, 16 July 2009

Study Casts Doubt on Alarmist Climate Models
Doyle Rice, USA Today, 16 July 2009

Granting Environmental Indulgences
Robert P. Kerchhoefer, American Spectator, 15 July 2009

California’s Global Warming Policy Is Not One To Follow
Nick Loris, The Foundry, 14 July 2009

The Cap-and-Trade Dead End
Sarah Palin, Washington Post, 14 July 2009

Cap-and-Trade Bill Ineffective
Kathryn Gaines, Human Events, 13 July 2009

“The Cheaper the Energy, the Better”
Julian Simon (from 1993), reprinted by MasterResource.org, 13 July 2009

John Holdren: Margaret Sanger Redux?
Michelle Malkin, MichelleMalkin.com, 10 July 2009

News You Can Use

A Real Scientific Consensus

University of Colorado political scientist Roger Pielke, Jr. this week blogged about a recent Pew poll of American scientists showing that 55% identify as Democrats, 32% as Independents, and 6% as Republicans.

Inside the Beltway

Myron Ebell
Energy-rationing legislation has been moved to the back burner by Senate Majority Leader Harry Reid (D-Nev.) and the Obama Administration. The Senate and the House are now concentrating on moving health care “reform” legislation as quickly as they can.  The announced goal of having a health care bill passed by the Senate and maybe even the House before the August recess is clearly out of reach, which means that both chambers will still be working on health care in September as well as trying to finish work on various appropriations bills. Reid has told the chairmen of the committees of jurisdiction that they should have their pieces of comprehensive energy-rationing legislation ready by 28th September. That doesn’t mean that Reid will bring the bill to the floor in October, but rather that he will then be ready to bring it to the floor if and when sixty votes in favor can be assembled.

This slippage in the schedule is due I think mostly to the public reaction to passage of the Waxman-Markey bill in the House. The House Democratic leadership had to rush the bill to the House floor and pass it before people could find out what’s in it. But word started to get out quite quickly. I have heard several reports that quite a few Members who voted for Waxman-Markey were given hostile receptions by voters in their districts over the Fourth of July recess. A few at least are being hammered. Senators naturally hear about how voters are reacting in their States, and so it’s not surprising that several Senators are sounding less supportive of cap-and-trade than they did in June 2008 when they voted for the Lieberman-Warner cap-and-trade bill. In recent days, Senators Jay Rockefeller (D-WV) and Evan Bayh (D-Ind.) have expressed their reservations about voting for cap-and-trade again.  Senators Lamar Alexander (R-Tenn.) and Byron Dorgan (D-ND) voted against Lieberman-Warner, but were considered possible yes votes this year. Both have already announced that they oppose anything resembling Waxman-Markey.

It’s much too early to conclude that cap-and-trade is dead in the water, but it looks to be swimming against a fairly strong current.

Across the States

California

Citing uncompetitive business conditions (read: high energy prices), Toyota signaled this week that it plans to stop manufacturing cars in California, according to Henry Payne at Planet Gore.  This follows General Motors’ announcement last month that it would pull out of the NUMMI plant in Fremont which it has jointly operated with Toyota since 1984.  Approximately five thousand workers will lose their jobs if Toyota closes the Fremont plant.  California’s unemployment rate is already above 12% and still climbing.  Bills have quickly been introduced in the state legislature to provide tax breaks to Toyota to keep the plant open.

Given the state’s huge budget deficit, it’s not clear how they can pay for millions of dollars of tax breaks or whether the tax breaks would make up for other anti-business policies soon coming into force. A study by the Public Utilities Commission released last month estimated that the state’s Renewable Portfolio Standard-a law that forces consumers to buy more expensive “green” energy-will raise electricity prices 25% by 2020. Although Californians continue to buy cars and trucks (1.4 million in 2008), Fremont is the last plant in California that produces automobiles. Toyota and General Motors may be getting out just in time.

Around the World

Obama’s Climate “Solution”: Pay China?

Rapidly developing countries are projected to account for the preponderance of future increases in global greenhouse gas emissions, but they have a moral right to grow their economies unencumbered by expensive emissions controls. U.S President Barack Obama seems to have a “solution”: Send China taxpayer money. During bilateral talks in China this week, Gary Locke, Obama’s Secretary of Commerce, said that, “It’s important that those who consume the products being made all around the world to the benefit of America-and it’s our own consumption activity that’s causing the emission of greenhouse gases, then quite frankly Americans need to pay for that,” as reported by Reuters. The Obama administration is asking a lot of the taxpayer-the International Energy Agency estimates that it would cost $45 trillion to “green” the global economy. I wonder if China will lend us the money.

UK’s Economic Suicide: It Could Happen Here.
The United Kingdom’s Labor Government this week unveiled a Renewable Energy Strategy and Low Carbon White Paper, which sets out how each sector of the economy will help to meet the overall target of a 34 per cent cut in CO2 emissions by 2020. Peter Odell, professor of international energy studies at Erasmus University, Rotterdam, told Reuters that “The targets the UK is setting are almost impossible to meet and they are being developed at a cost that is going to affect consumer prices significantly.” At the same time that the Labor Party announced its green goals, the wind manufacturer Vestas closed a turbine factory in Newport, Isle of Wight, in order to move production overseas to China, according to The Times.

The Fecklessness of Climate Diplomacy
William Yeatman, RealClearWorld.com, 16 July 2009

The fecklessness of climate diplomacy was on full display last week at the Group of Eight summit of industrialized countries in Italy, where the international community simultaneously vowed to limit global warming and disavowed the necessary action to do so.

Al and Friends Create a Climate of McCarthyism
Bjorn Lomborg, The Australian, 16 July 2009

Discussions about global warming are marked by an increasing desire to stamp out “impure” thinking, to the point of questioning the value of democratic debate. But shutting down discussion simply means the disappearance of reason from public policy.

Could We Be Wrong about Global Warming?
Doyle Rice, USA Today, 16 July 2009

Could the best climate models — the ones used to predict global warming — all be wrong? Maybe so, says a new study published online today in the journal Nature Geoscience.  The report found that only about half of the warming that occurred during a natural climate change 55 million years ago can be explained by excess carbon dioxide in the atmosphere. What caused the remainder of the warming is a mystery

President Barack Obama’s White House Science Advisor Dr. John P. Holdren (also known as “Dr. Doom”) is back in the headlines. A clever blogger has made available passages from a book that Holdren cowrote more than 30 years ago, about how the world is going to end, which is his favorite topic. The excerpts from the book document Holdren’s wacky solution to the supposed apocalypse: population control.

During his long and infamous career, Holdren has warned that the end is nigh on account of “ecocide,” global warming due to direct heating from power plant, global cooling due to particulate aerosol emissions, nuclear winter, population growth, and now, global warming due to greenhouse gases. Needless to say, Holdren has been proven wrong time and time again.

Despite this long and infamous career, Obama chose Holdren to be his top adviser on science policy, but I bet the President will come to regret his decision. Holdren’s record of zany zingers will make excellent scandal fodder for as long as he remains at his post. To read more about Holdren, click here, which will take you to a webmemo on Holdren I wrote in January.