Tag: clean energy

Egypt and Energy Policy

Today Politico Arena asks:

Given that crude oil prices surged to nearly $90 per barrel on Friday, and could spike even higher if the crisis causes a shutdown of the Suez Canal, how should policymakers in Wasihngton respond regarding oil and the crisis in Egypt? Does the situation underscore a need for more domestic production? And does this crisis bolster or hamper Obama’s clean energy initiative that he called for in his State of the Union address last week?

My response:

The unrest in Egypt should have no bearing whatever on American energy policy. Like nearly every other commodity – food, clothing, shelter, education, health care – energy, from whatever source, is far more efficiently and equitably produced and distributed by the market than by governments, even when foreign governments play a part in that process. We saw that in the “energy crises” of the ’70s; we’ve seen it in every ”crisis” since.

Why, in the name of “energy independence,” should the U.S. government “promote” domestic production if foreign energy is cheaper? Do we imagine that manifold foreign producers will not supply us if the price is right? Where’s the evidence for that? Any government promotion should be by simply getting out of the way and letting the market determine where energy is produced.

Nor should today’s Egyptian unrest affect Obama’s “clean energy initiative,” which should fall on its own terms. It’s nothing but a massive government intrusion into the market, subsidizing expensive sources of energy for little environmental gain, making us all poorer, but especially the poorest among us. Do we need any better example that the ethanol boondoggle, which even Al Gore has admitted is environmentally destructive? Energy policy will be an early test of whether the new House majority is serious about reducing the role of government in our lives.

State of the Union Fact Check

Cato experts put some of President Obama’s core State of the Union claims to the test. Here’s what they found.

THE STIMULUS

Obama’s claim:

The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. That’s right – the Recovery Act, also known as the Stimulus Bill. Economists on the left and the right say that this bill has helped saved jobs and avert disaster.

Back in reality: At the outset of the economic downturn, Cato ran an ad in the nation’s largest newspapers in which more than 300 economists (Nobel laureates among them) signed a statement saying a massive government spending package was among the worst available options. Since then, Cato economists have published dozens of op-eds in major news outlets poking holes in big-government solutions to both the financial system crisis and the flagging economy.

CUTTING TAXES

Obama’s claim:

Let me repeat: we cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. As a result, millions of Americans had more to spend on gas, and food, and other necessities, all of which helped businesses keep more workers.

Back in reality: Cato Director of Tax Policy Studies Chris Edwards: “When the president says that he has ‘cut taxes’ for 95 percent of Americans, he fails to note that more than 40 percent of Americans pay no federal incomes taxes and the administration has simply increased subsidy checks to this group. Obama’s refundable tax credits are unearned subsidies, not tax cuts.”

Visit Cato’s Tax Policy Page for much more on this.

SPENDING FREEZE

Obama’s claim
:

Starting in 2011, we are prepared to freeze government spending for three years.

Back in reality: Edwards: “The president’s proposed spending freeze covers just 13 percent of the total federal budget, and indeed doesn’t limit the fastest growing components such as Medicare.

“A better idea is to cap growth in the entire federal budget including entitlement programs, which was essentially the idea behind the 1980s bipartisan Gramm-Rudman-Hollings law. The freeze also doesn’t cover the massive spending under the stimulus bill, most of which hasn’t occurred yet. Now that the economy is returning to growth, the president should both freeze spending and rescind the remainder of the planned stimulus.”

Plus, here’s why these promised freezes have never worked in the past and a chart illustrating the fallacy of Obama’s spending claims.

JOB CREATION

Obama’s claim:

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year.

Back in reality: Cato Policy Analyst Tad Dehaven: “Actually, the U.S. economy has lost 2.7 million jobs since the stimulus passed and 3.4 million total since Obama was elected. How he attributes any jobs gains to the stimulus is the fuzziest of fuzzy math. ‘Nuff said.”

Obama’s Copenhagen Speech

Politico asks, “Was he convincing?”

My response:

In Copenhagen this morning, President Obama convinced only those who want to believe — of which, regrettably, there is no shortage.  Notice how he began, utterly without doubt:  “You would not be here unless you, like me, were convinced that this danger is real.  This is not fiction, this is science.”  The implicit certitude is no part of real science, of course.  But then the president, like the environmental zealots cheering him in Copenhagen, is not really interested in real science.  Theirs, ultimately, is a political agenda.  How else to explain the corruption of science that the East Anglia Climate Research email scandal has brought to light, and the efforts, presently, to dismiss the scandal as having no bearing on the evidence of climate change?  If that were so, then why these efforts, or the earlier suppression of contrary or mitigating evidence that is the heart of the scandal?

We find such an effort in this morning’s Washington Post, by one of those at the center of the scandal, Penn State’s Professor Michael E. Mann.  Set aside his opening gambit — “I cannot condone some things that colleagues of mine wrote or requested” — this author of the famous, now infamous, “hockey stick” article seems not to recognize himself in Climategate.  That he then goes after Sarah Palin as his critic suggests only that on a witness stand, confronted by his real critics, he’d be reduced to tears by even a mediocre lawyer.  One such real critic is my colleague, climatologist Patrick J. Michaels, who documents the scandal and its implications for science in exquisite detail in this morning’s Wall Street Journal.

But to return to the president and his speech, having uncritically subscribed to the science of global warming, Mr. Obama then lays out an ambitious policy agenda for the nation.  We will meet our responsibility, he says, by phasing out fossil fuel subsidies (which pale in comparison to the renewable energy subsidies that alone make them economically feasible), we will put our people to work increasing efficiency in our homes and buildings, and we will pursue “comprehensive legislation to transform to a clean energy economy.”

Mark that word “legislation,” because at the end of his speech the president said:  ”America has made our choice.  We have charted our course, we have made our commitments, and we will do what we say.”  But we haven’t made “our choice” — cap and trade, to take just one example, has gone nowhere in the Senate — even if Obama has made “our commitments.”  And that brings us to a fundamental question:  Can the president, with no input from a recalcitrant Congress, commit the nation to the radical economic conversion he promises?

Environmental zealots say he can.  Look at the report released last week by the Climate Law Institute’s Center for Biological Diversity, “Yes He Can: President Obama’s Power to Make an International Climate Commitment Without Waiting for Congress,” which argues that in Copenhagen Obama has all the power he needs under current law, quite apart from the will of Congress or the American people, to make a legally binding international commitment.  Unfortunately, under current law, the report is right.  I discuss that report and the larger constitutional implications of the modern “executive state” in this morning’s National Review Online.

There is enough ambiguity in the president’s remarks this morning to suggest that he may not be prepared to exercise the full measure of his powers.  But there is also enough in play to suggest that it is not only the corruption of science but the corruption of our Constitution that is at stake.

Are Industrialized Countries Responsible for Reducing the Well Being of Developing Countries?

A basic contention of developing countries (DCs) and various UN bureaucracies and multilateral groups during the course of International negotiations on climate change is that industrialized countries (ICs) have a historical responsibility for global warming.  This contention underlies much of the justification for insisting not only that industrialized countries reduce their greenhouse gas emissions even as developing countries are given a bye on emission reductions, but that they also subsidize clean energy development and adaptation in developing countries. [It is also part of the rationale that industrialized countries should pay reparations for presumed damages from climate change.]

Based on the above contention, the Kyoto Protocol imposes no direct costs on developing countries and holds out the prospect of large amounts of transfer payments from industrialized to developing countries via the Clean Development Mechanism or an Adaptation Fund. Not surprisingly, virtually every developing country has ratified the Protocol and is adamant that these features be retained in any son-of-Kyoto.

For their part, UN and other multilateral agencies favor this approach because lacking any taxing authority or other ready mechanism for raising revenues, they see revenues in helping manage, facilitate or distribute the enormous amounts of money that, in theory, should be available from ICs to fund mitigation and adaptation in the DCs.

Continue reading here.