Topic: Energy and Environment

The President’s Climate Action Plan: Intervention Where It Isn’t Necessary

In his speech today, President Obama laid out his plan—formulated around executive action—to reduce greenhouse gas emissions in hopes of mitigating future climate change.

Funny thing is, absent his Climate Action Plan, the U.S. greenhouse gas emissions have been on the decline for a decade, and now are at about the same level as our emissions in the early 1990s. In fact, the decline in emissions is taking place at a rate faster than the one sought by the president.

So why mess with a good thing? There is no way that introducing a bunch of new government regulations is going to improve the situation. If the Great Recession is any indication, the outcome of government involvement in the energy industry will be a poor one.

And to what end? As I have repeatedly shown, reducing U.S. greenhouse gas emissions has no significant impact on the future course of climate change.

On top of that, new science is accumulating that indicates that the future course of climate change is likely to be less steep than our current climate model-based estimates.

And despite the president’s long list of supposed climate wrongs that are consistent with human-caused climate change, there is an equally long list of climate wrongs that have been averted for reasons “consistent with” climate change.

Taken together, declining U.S. greenhouse gas emissions and declining estimates of climate change, should have been enough to convince the president that things were already on the proper track—no government intervention necessary.

But this administration is characterized by intervening where it is not necessary. The president’s Climate Action Plan is more of the same. 

Obama Tackles Global Warming — On His Own Authority

In a speech today at Georgetown University, President Obama will lay out his sweeping plan to address what he believes is our “moral obligation” to address climate change – apparently oblivious to serious studies questioning the extent and cause of the problem, to the futility of our acting alone as China, India, and others do nothing, and to the far-reaching economic effects his plan will have on an economy already struggling with regulatory overkill.

And he plans to do all of this not with the concurrence of Congress but in the face of congressional opposition. He will act unilaterally, by executive order. Yet he has that power, thanks to constitutionally dubious congressional delegations and court decisions stretching back over many years. See here for a detailed discussion of how the president came to have such awesome power.

Averting Disasters

In his Berlin speech on Wednesday, President Obama touched on the topic of human-caused climate change and promised “we will do more” to address the issue—presumably by reducing our carbon dioxide emissions at a pace faster than we already are.

What he hopes to achieve by this is unclear, as I have shown that the pace of U.S. emissions reduction has virtually no impact on the future rate of global warming.

President Obama, too, seems to realize a broader effort would be required, as he said “[w]ith a global middle class consuming more energy every day, this must now be an effort of all nations, not just some.”

Without such action, the president asserts that we will face a “grim alternative”—“more severe storms, more famine and floods, new waves of refugees, coastlines that vanish, oceans that rise.”

But even with global action, it is far from scientifically clear that the result of reducing climate change will be a net positive.

I can hardly blame the president for not realizing this, or for not being overly aware of the benefits of global warming.  And I am not talking about the well-known boost to the planet’s plant life (including food crops), but potential direct effects on weather and climate.

On Iran’s Inflation Bogey

With Friday’s Iranian Presidential election fast approaching, there has been a cascade of reportage in the popular press about that opaque country. When it comes to economic data, Iran has resorted to lying, spinning and concealment – in part, because of its mores and history, and more recently, the ever-tightening international sanctions regime. In short, deception has been the order of the day.

The most egregious example of this deception concerns one of Iran’s most pressing economic problems – rampant inflation. Indeed, while the rest of the world watched Iran’s economy briefly slip into hyperinflation in October of 2012, the Statistical Centre of Iran and Iran’s central bank both defiantly reported only mild upticks in inflation.  

It is, therefore, rather surprising that the major international news outlets have continued to report the official inflation data without so much as questioning their accuracy. Even today, with official data putting Iran’s annual inflation rate at a mere 31 percent, respectable news sources faithfully report these bogus data as fact.

As I have documented, regimes in countries undergoing severe inflation have a long history of hiding the true extent of their inflationary woes. In many cases, such as the recent hyperinflation episodes in Zimbabwe and North Korea, the regimes resort to underreporting or simply fabricating statistics to hide their economic problems. Often, they stop reporting economic data all together; or, when they do report economic statistics, they do so with such a lag that the reported data are of limited use by the time they see the light of day.

Iran has followed this course – failing to report important economic data in a timely and replicable manner. Those data that are reported by tend to possess what I’ve described as an “Alice in Wonderland” quality. In light of this, it is fair to suggest that any official data on Iran’s inflation be taken with a grain of salt.

So, how can this problem be overcome? At the heart of the solution is the exchange rate. If free-market data (usually black-market data) are available, the inflation rate can be estimated. The principle of purchasing power parity (PPP), which links changes in exchange rates and changes in prices, allows for a reliable estimate. Indeed, PPP simply states that the exchange rate between two countries is equal to the rates of their relative price levels. Accordingly, if we can obtain data on free-market exchange rates, we can make a reliable estimate of the inflation rate.

In short, changes in the exchange rate will yield a reliable implied inflation rate, particularly in cases of extreme inflation. So, to calculate the inflation rate in Iran, a rather straightforward application of standard, time-tested economic theory is all that is required.

Using this methodology, it is possible to estimate a reliable figure for Iran’s annual inflation rate. At present the black-market IRR/USD exchange rate sits at 36,450. Using this figure, and a time series of black-market exchange rate data that I have collected over the past year from currency traders in the bazaars of Tehran, I estimate that Iran’s current annual inflation rate is 105.8 percent – a rate almost three and a half times the official annual inflation figure (see the accompanying chart). 

US Carbon Dioxide Emissions Fall as Global Emissions Rise

A new report from the International Energy Agency is sparking headlines across the media. “Global carbon dioxide emissions soared to record high in 2012” proclaimed USA Today; The Weather Channel led “Carbon dioxide emissions rose to record high in 2012”; and the Seattle Post-Intelligencer added “The world pumped a record amount of carbon dioxide in the atmosphere in 2012.”

The figure below (taken from the IEA summary) provides the rest of the story.

It shows a breakdown of the change in carbon dioxide emissions from 2011 to 2012 from various regions of the globe.

 

Notice that the U.S. is far and away the leader in reducing carbon dioxide (CO2) emissions, while China primarily is responsible for pushing global CO2 emissions higher. In fact, CO2 emissions growth in China more than offsets all the CO2 savings that we have achieved in the U.S.

This will happen for the foreseeable future. Domestic actions to reduce carbon dioxide emissions will not produce a decline in the overall atmospheric carbon dioxide concentration.  The best we can hope to achieve is to slow the rate of growth of the atmospheric concentration—an effect that we can only achieve until our emissions are reduced to zero. The resulting climate impact is small and transient.

And before anyone goes and getting too uppity about the effectiveness of “green” measures in the U.S., the primary reason for the U.S. emissions decline is the result of new technologies from the fossil fuel industry that are leading to cheap coal being displaced by even cheaper natural gas for the generation of electricity. As luck would have it, the chemistry works out that that burning natural gas produces the same amount of energy for only about half of the CO2 emissions that burning coal does.

A new report from the U.S. Energy Information Administration estimates that as a result of these new technologies (e.g., hydraulic fracturing and horizontal drilling), globally, the technologically recoverable reserves of natural gas are nearly 50% greater than prior to their development.

Currently, the U.S. is the leader in the deployment of these technologies, and the effects are obvious (as seen in the figure above).  If and when more countries start to employ such technologies to recover natural gas, perhaps the growth in global carbon dioxide emissions will begin to slow (as compared to current projections).

Considering that possibility, along with the new, lower estimates for how sensitive the global average temperature is to carbon dioxide emissions, and the case for alarming climate change (and a carbon tax to try to mitigate it) is fading fast.

Climate Models Veer Off Course

Global Science Report is a weekly 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.”

A new paper shows that climate models are getting worse at replicating a collection of known climate changes as incentivized efforts to improve them have them universally veering off course.

Anyone who is familiar with John Allison’s book The Financial Crisis and the Free Market Cure knows that incentives can drive otherwise “independent” decisions in a common direction, with sometimes disastrous results. Allison documents how a collection of government incentives (intentionally and unintentionally) drove decisions in the wider financial markets towards overinvesting in residential real estate. The resulting massive misallocation of funds and ultimate bubble burst sent us into the Great Recession, from which we have yet to recover.

Obviously, that was not the intended outcome of the federal policies, but as Allison writes “Intentions that are called ‘good’ often do not produce favorable outcomes.” Allison argues that a free market, one that is free from centralized incentives, and one in which truly independent decisions are being made, is less susceptible to a universal failure and that when failures do occur, they are not as severe and they are more quickly recovered from. Had the financial markets been operating without federal regulations and incentives, not only would the Great Recession not have occurred (or would have been minor), but that our country would be in a much healthier financial state with an overall higher standard of living for everyone.

Not only can (and do) targeted incentives lead financial markets astray, they also operate the same way in the field of science.

In either case, the ultimate effect is to steer the outcome away from its most efficient pathway and instead send it veering towards dangerous territory that is marked by a decline in our overall well-being.

This is nowhere more evident than in the field of climate science, as a new paper by the University of Wisconsin-Milwaukee’s Kyle Swanson clearly illuminates.

In his work “Emerging selection bias in large climate change simulations,” Swanson finds that the new generation of climate models has become worse at matching recent climate change than the generation of models which they supplant.

Current Wisdom: Hansen’s Extreme Sea Level Rise Projections Drowning in Hubris

The Current Wisdom is a series of monthly articles in which Patrick J. Michaels, director of the Center for the Study of Science, reviews interesting items on global warming in the scientific literature that may not have received the media attention that they deserved, or have been misinterpreted in the popular press.

Retired NASA scientist and peripatetic global warming crusader James Hansen has a—let’s put it delicately—unique view of sea-level rise resulting from mankind’s use of fossil fuels. Specifically, he believes global average sea level will rise some 15 to 20 feet by 2095. The central estimate from the most recent report from U.N.’s Intergovernmental Panel on Climate Change (IPCC) is about 15 inches.

Hansen’s an outlier, and proud of it, thinking himself more courageous than other scientists who, he says, are “reticent” to tell the public how bad things really are.

Wethinks that Hansen doth protest too much. His scientific arguments for a large and rapid sea level rise this century simply don’t hold water.

He laid out a summary of his logic on sea level rise in a book chapter (co-authored with Makiko Sato) published last year titled “Paleoclimate Implications for Human-Made Climate Change.”

Below, we have reproduced the relevant text on sea-level rise from that chapter along with our comments highlighting recent findings from the scientific literature which refute each and every one of Hansen’s claims.