Topic: Energy and Environment

Putting Out Fires by Throwing Money on Them

Now that forest fires are in the news, someone noticed that President Obama has proposed a new way of funding wild firefighting. Instead of borrowing from its fuels treatment funds when the Forest Service exhausts its regular fire-fighting budget, Obama wants to let the agency draw upon a new “special disaster account” that is “adjusted each year to reflect the 10-year average cost of responding to such events.”

Treating excessive firefighting costs by giving the Forest Service more money makes as much sense as attempting to suppress forest fires by throwing gasoline on them. In case you don’t hear the sarcasm, it makes no sense at all.

Obama is focusing on the wrong problem, the drawdown of funds intended for fuel treatments. The real problem is the incentives the Forest Service has to spend wildly on firefighting.

As far as I know, no democracy has given any government agency a blank check to accomplish any goal–except the Forest Service for fighting fires. Even the Pentagon was given budgets for fighting World War II, the Cold War, and other wars. But in 1908, Congress gave the Forest Service a blank check for firefighting, saying the agency could spend as much as it needed to suppress fires, and Congress would reimburse it later.

Climate Science: No Dissent Allowed

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

Award-winning climate modeler experiences “a situation that reminds me about the time of McCarthy”

An interesting juxtaposition of items appeared in our Inbox today.

First was an announcement that Dr. Lennart Bengtsson, former director of the Max Planck Institute for Meteorology, had resigned from the Academic Advisory Council of the U.K.’s Global Warming Policy Foundation. What was surprising about this announcement was that it was just announced a week or so ago that Dr. Bengtsson—a prominent and leading climate modeler and research scientist—was joining the GWPF Council. At that time, there was some wondering aloud as to why Dr. Bengtsson would join an organization that was somewhat “skeptical” when it comes to the projections and impacts of climate change and the effectiveness and direction of climate change policy.

During one recent interview Dr. Bengtsson explained:

I think the climate community shall be more critical and spend more time to understand what they are doing instead of presenting endless and often superficial results and to do this with a critical mind. I do not believe that the IPCC machinery is what is best for science in the long term. We are still in a situation where our knowledge is insufficient and climate models are not good enough. What we need is more basic research freely organized and driven by leading scientists without time pressure to deliver and only deliver when they believe the result is good and solid enough. It is not for scientists to determine what society should do. In order for society to make sensible decisions in complex issues it is essential to have input from different areas and from different individuals. The whole concept behind IPCC is basically wrong.

A good summary of the buzz that surrounded Dr. Bengtsson and his association with GWPF is contained over at Judith Curry’s website, Climate Etc.

So why did Dr. Bengtsson suddenly resign? 

Transportation Cliff or Pothole?

Recent news reports have zeroed in on Washington’s next “cliff,” the “transportation cliff” that is expected to happen when the federal Highway Trust Fund runs out of money sometime this summer. Most of those articles have a hidden agenda: to increase spending for transit even though transit now gets 20 percent of federal surface transport dollars but carries little more than 1 percent of the travel carried by automobiles (about 55 billion passenger miles by transit vs. 4.3 trillion passenger miles in cars and light trucks). This post will explain some of the politics of the transportation cliff.

1. Why are we about to go off a transportation cliff?

Since 1956, federal highway programs have been financed with federal gasoline taxes. Those revenues go into the so-called Highway Trust Fund (“so-called” because it’s no longer very trustworthy) and then are distributed to the states for highway construction and maintenance. In 1982, Congress began dedicating a small but growing share of gas taxes to transit. Today, more than 20 percent of federal gas taxes are spent on transit, and there is no guarantee that the remaining 80 percent goes for highways, as Congress often diverts some of that money to such things as bike paths, national park visitor centers, museums, and other local pork barrel projects.

Congress reauthorizes this spending every few years. Traditionally, an authorization bill provides a spending ceiling. But the 2005 reauthorization bill made spending mandatory, meaning the ceiling was also the floor. (In 2012, Congress passed another reauthorization bill. That one didn’t mandate spending, but Congress went ahead and spent to the limit anyway, knowing full well that this would mean the Highway Trust Fund would be exhausted by sometime in 2014.)

When the 2008 financial crisis led to a reduction in driving, gas tax revenues failed to keep up with spending. Since then, Congress has had to supplement gas taxes with about $55 billion in general funds in order to keep the Highway Trust Fund from running out of money.

Anti-auto interest groups often portray these supplements as highway subsidies. But they would not be necessary if Congress weren’t diverting 20 percent of gas tax revenues to transit. Although more money goes to highways than to transit, because highways are so much more heavily used, federal subsidies to transit are about 80 times as great, per passenger mile, as federal subsidies to highways.

What the National Climate Assessment Doesn’t Tell You

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”


The Obama Administration this week is set to release the latest version of the National Climate Assessment—a report which is supposed to detail the potential impacts that climate change will have on the United States.  The report overly focuses on the supposed negative impacts from climate change while largely dismissing or ignoring the positives from climate change.

The bias in the National Climate Assessment (NCA) towards pessimism (which we have previously detailed here) has implications throughout the federal regulatory process because the NCA is cited (either directly or indirectly) as a primary source for the science of climate change for justifying federal regulation aimed towards mitigating greenhouse gas emissions. Since the NCA gets it wrong, so does everyone else.

A good example of this can be found in how climate change is effecting  the human response during heat waves.  The NCA foresees an increasing frequency and magnitude of heat waves leading to growing numbers of heat-related deaths. The leading science suggests just the opposite.

Adaptation to Extreme Heat

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

Last fall, the press pounced on the results of a new study that found that global climate change was leading to an increasing frequency of heat waves and thus resulting in greater heat-related mortality. Finally a scientific study showing that global warming is killing us after all! See all you climate change optimists have been wrong all along, human-caused global warming is a threat to our health and welfare.

Not so fast.

Upon closer inspection, it turns out that the authors of that study—which examined heat-related mortality in Stockholm, Sweden—failed to include the impacts of adaptation in their analysis as well as the possibility that some of the temperature rise which has taken place in Stockholm is not from “global” climate change but rather local and regional processes not at all related to human greenhouse gas emissions.

What the researchers Daniel Oustin Åström and his colleagues left out of their original analysis, we (Chip Knappenberger, Pat Michaels, and Anthony Watts) factored in. And when we did so, we arrived at the distinct possibility that global warming actually led to a reduction in the rate of heat-related mortality in Stockholm.

Our findings have just been published in the scientific journal Nature Climate Change as a Comment on the original Oustin Åström paper (which was published in the same journal).

We were immediately skeptical because the original Oustin Åström results run contrary to a solid body of scientific evidence (including our own) that shows that heat-related mortality and the population’s sensitivity to heat waves was been declining in major cities across America and Europe as people take adaptive measures to protect themselves from the rising heat.

When “Conservative” Means “Alarmist”

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”


There is a new study out that purports to make a “conservative” estimate of the social cost of carbon and in doing so arrives at a figure nearly four times larger than the central estimate currently used by the U.S. government—the latter a figure which we and others have voluminously argued is itself several times too high. Perhaps the authors of the new report ought to look up the definition of the word “conservative.”

Recall that the social cost of carbon is supposed to represent the total value of future damages from climate change resulting from the current emission of a ton of carbon dioxide. As you may imagine, coming up with the SCC involves more imagination than actual science.

The primary “tools” used for determining the SCC are “integrated assessment models,” or IAMs, which incorporate a very simple climate model into an economics model. Writing in the journal Nature Climate Change, Jeroen van den Bergh and Wouter Botzen review elements (economic and climatic) that are poorly incorporated or missing entirely from the IAMs.

A prominent characteristic of the IAMs is that they are notoriously malleable and able produce virtually any value for the SCC that the modeler or end-user desires.

Judging from the introductory sentence of their paper

Climate change has been called “the biggest market failure the world has seen” and “the mother of all externalities.”

you can pretty much guess what kind of SCC value van den Bergh and Botzen prefer.

To support their apparent preference for a high SCC, they spend the bulk of their paper imagining bad climate outcomes—with high monetary damages—and are generally dismissive of positive climate impacts. For example:

Nevertheless, our summary of the main effects provides a clear insight, namely that unquantified negative effects of climate change tend to domi­nate unquantified positive effects. The negative effects comprise large biodiversity losses, political instability, violent conflicts, large-scale migration, extreme weather events, natural disasters and the effect on long-term economic growth. Accounting for the latter is likely to increase the SCC because large impacts of cli­mate change are expected to reduce the rate of GDP growth, partly because of negative effects on labour and capital productivity.

Unsurprisingly, when you include a lot of negative impacts along with a low discount rate, the IAMs produce very high estimates of the SCC.

In fact, van den Bergh and Botzen arrive at a “conservative” SCC value of $125. For comparison, value used by the Obama Administration for cost/benefit analyses of new regulations is $36.

Interestingly, in their “conservative” analysis, they never once mention the growing body of new and prominent scientific literature that produce updated estimates of the earth’s climate sensitivity—a measure of how much climate change we expect from carbon dioxide emissions—that are much lower and much more tightly constrained than the ones used in all of the studies reviewed by van den Bergh and Botzen.

The lower climate sensitivity estimates not only reduce the overall impacts from expected climate changes, but they do so primarily by reducing the chances of unexpected and catastrophic changes—the biggest drivers of the high SCC values in the IAMs. It has been repeatedly shown (see here, here, and here for example) that incorporating the new, lower climate sensitivity estimates reduce the IAMs’ SCC determinations by some 40 percent.

And there are lots of other things, which, if better incorporated in the IAM’s, would lead to lower SCC values.

If the positive benefits from carbon dioxide emissions on the planet’s crop production were better included in the IAM’s, the SCC value drops further.  And if arguments for the use of a higher discount rate, rather than the very low one espoused by van den Bergh and Botzen win the day, the SCC drops further still.

Add to the mix a more reasoned view of future climate extremes, and before you know it, it is an easy argument to make that the SCC value should fall significantly below the Administration’s $36 rather than some three to four times higher.

It is bad enough that van den Bergh and Botzen present a rather one-sided view of the science of climate change/climate extremes and the economics concerning the choice of discount rate, but for them to term their analysis “conservative” is really taking things too far. “Alarmist” would be a more apt description.

Our hope would have been that the reviewers for Nature Climate Change would have caught the glaring oversight of the current climate sensitivity literature (with one of the most persuasive articles appearing in the sister journal Nature Geosciences), but that didn’t happen. We’ll withhold speculation as to why that was the case.

Reference:

Van den Bergh, J.C.J.M., and W.J.W. Botzen, 2014. A lower bound to the social cost of CO2 emissions. Nature Climate Change, 4, 253-258, doi:10.1038/NCLIMATE2135.

Risking Taxpayer Dollars on DOE Loan Guarantees

In February, I highlighted the Department of Energy’s issuance of a $6.5 billion loan guarantee to build a nuclear power facility in Georgia. At the time, the project was behind schedule with cost overruns, and the project’s owners had already secured private financing. Yet DOE issued the loan guarantee anyway.

Now we’ve learned that DOE’s actions were even more foolish than previously thought. DOE waived the credit fees charged to the company—which are meant to offset the risk to taxpayers—when it issued the loan.

According to the Washington Examiner:

“Developers of a Georgia nuclear project didn’t have to pay millions of dollars in fees designed to prevent risk for taxpayers when it secured $6.5 billion in loan guarantees from the Energy Department in February, the agency confirmed Tuesday to the Washington Examiner.

The DOE calculated a zero dollar “credit subsidy fee,” which protects taxpayers if developers default, for electric utility Georgia Power – a subsidiary of Southern Co. – and Oglethorpe Power Corp. to spur completion of two large, next-generation nuclear reactors at the Vogtle power plant in Waynesboro, Ga.”

This isn’t the first time that DOE has been criticized for the handling of its loan guarantee programs, and thus risking losses to taxpayers. In 2012, the Government Accountability Office said, “if DOE underestimates these costs [credit subsidies], taxpayers will ultimately bear the cost of default.” GAO said that DOE did not follow its own processes for handling applications “potentially increasing the taxpayer’s exposure to financial risk from an applicant’s default.”

Energy loan guarantee programs should be eliminated, but closing them doesn’t seem likely under the current administration. But you would think that even this administration would favor DOE following sound lending practices to try and minimize taxpayer losses.