Topic: Energy and Environment

Who’s Blogging about Cato

Here’s a few bloggers who are writing, citing and linking to Cato research and commentary:

  • David Kirkpatrick links to Richard W. Rahn’s op-ed in The Washington Times about the increasing loss of liberty in the United Kingdom.
  • Free-market energy blogger Robert Bradley, editor of Master Resource, cites Cato’s recognition of the women who launched the libertarian movement: Ayn Rand, Rose Wilder Lane and Isabel Paterson.
  • Scott Horton 0f Anti-War Radio interviews Doug Bandow about relations between the US and China.

Let us know if you’re blogging about Cato by emailing cmoody [at] cato [dot] org (subject: blogging%20about%20Cato) or drop us a line on Twitter @catoinstitute.

Events This Week at Cato

Thursday, March 12

Climate of Extremes

12:00 PM (Luncheon to Follow)

climateBOOK FORUM: Cato senior fellow in environmental studies Patrick J. Michaels will discuss his new book, Climate of Extremes: Global Warming Science They Don’t Want You to Know with David Legates, Delaware state climatologist and director of the Delaware Environmental Observing System.

The book illustrates the crucial unreported news about climate change: that changes in hurricanes will be small, that global warming is likely to be modest, and that contrary to daily headlines, there is no apocalypse on the horizon.

Free registration for this event is now open, and it will be simulcast live on Cato’s Web site.

Transportation Reauthorization: Looking Beyond the Recession

1:30 PM (Refreshments Provided)

CAPITOL HILL BRIEFING: Randal O’Toole, Cato senior fellow and author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, will join Robert Poole, director of Transportation Studies at the Reason Foundation for a discussion on transportation reform during the recession.

Register here for this free event.

Friday, March 13

Can the Pentagon Be Fixed?

12:00 PM (Luncheon to Follow)

Most defense analysts agree: the Pentagon is in serious need of reform. Acquisition programs run above cost and behind schedule. The U.S. defense budget is higher than at any point during the Cold War, but capability has not kept pace. We field fewer ships, aircraft, and tanks than we did in the days of lower procurement spending. And our defense spending prepares us better for the conventional wars we imagine than the unconventional conflicts we fight.

Featuring Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information; Colonel Douglas Macgregor, U.S. Army (Retired), Straus Military Reform Project adviser; Danielle Brian, executive director of the Project on Government Oversight; Thomas Ricks, senior fellow at the Center for a New American Security and special military correspondent for the Washington Post; and Benjamin Friedman, research fellow in defense and homeland security at the Cato Institute.

Please register for this free event or  watch live online.

Obama Administration Agrees with Cato on Auto Fuel Efficiency

Well, sort of.  The Obama administration signaled last week their belief that it would be better to have one national fuel efficiency standard than a multiplicity of different state fuel efficiency standards.  Now, we have long maintained that fuel efficiency standards — federal or state — are a bad idea.  Consumers should be free to buy whatever sort of car they want without government economic coercion.  But if we must do violence to consumer sovereignty, better to do so via one national standard rather than via a hodge-podge of differing state standards.

This is the very argument I made late in January over at The New York Times when asked about California’s petition to establish its own fuel efficiency standard as a means of addressing greenhouse gas emissions.  Alas, I was pilloried on the NYT comments board at that time for all sorts of sins against man and nature.  Now it appears that President Obama has come over to the dark side.  Welcome to my world, Mr. President.

FutureGen: Economic and Political Decisions

People who support expanded federal intervention into areas such as energy and health care naively assume that policymakers can make economically rational and efficient decisions to allocate resources. They cannot, as a Washington Post story today on FutureGen illustrates.

The story describes the political battle over the location of a $1.8 billion ”clean coal” plant. I don’t know where the most efficient place to site such a plant is, or  if such a plant makes any sense in the first place. But the story illustrates that as soon as such decisions are moved from the private sector to the political arena, millions of dollars are spent to lobby the decisionmakers, and members of Congress are hopelessly biased in favor of home-state spending regardless of what might be best for the national economy as a whole.

President Obama has promised to ramp up spending on such green projects. So get ready for some huge political fights over the big-dollar spoils, and get ready for some monsterous energy boondoggles.

New Podcast: ‘Climate of Extremes’

With a polarized debate among the scientific community over climate change, what about experts who admit that climate change is real, but don’t think it’s the end of the world?

In today’s Cato Daily Podcast, Cato Senior Fellow in Environmental Studies Patrick J. Michaels explains the problem with the global warming debate.

Either it seems you think the world is coming to an end from climate change, and pronto, or you say there is no such thing as climate change.…Now it’s gotten to the point where if you say climate change is real, but it’s not the end of the world, both poles of the debate get angry at you.…But, in fact, that is the truth: climate change is real; it’s modest. It’s proceeding at a rate that is below the statistical rates predicted by the climate models; in other words, those models are in the process of failing.

Crédit Mobilier as a Model for High-Speed Rail

“History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas,” President Obama told Congress on February 24. “In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry.”

Obama, who wants to make the construction of a national high-speed rail network his “signature issue,” no doubt sees this as a model. It was a poor choice.

Aside from the simple factual issue that most of the first transcontinental railroad was built after, not during, the war, most of Obama’s audience would have forgotten that its construction caused for one of the first and biggest financial swindles of the nineteenth century. That scandal was the result of a simple fact: such a railroad made no economic sense in the late 1860s.

To entice someone to build it, the federal government offered subsidies in the form of land grants and loans of $16,000 to $48,000 per mile (depending on terrain) for the actual cost of construction. Politics, not economics, determined the route, so most of the land for hundreds of miles was worthless (and remained so for a century after the railroad was complete). The loans were valuable only to the contractors who built the rail line, as the railroad itself would have a difficult time generating enough business to ever repay them.

So the directors of the Union Pacific Railroad came up with a scheme to profit from construction. They created a separate company, called Crédit Mobilier (cleverly named after a similar scandal in France). Run by the same people who nominally owned the railroad, this company was given the contracts to build the line. To take full advantage of the government loans, they overcharged for construction up to the limit of the loans, earning enormous profits for the company directors.

To keep the scheme going, the company freely used shares to bribe members of Congress who must have been fully aware of the plot. After the rail line was complete, the Union Pacific conveniently went bankrupt, thus avoiding the need to repay the loans. (Supposedly, the reorganized company eventually repaid the loans, though probably not the interest.)

Two decades later, James J. Hill proved that the way to build a transcontinental railroad was in stages, not all at once, with the profits from each stage paying for construction of the next. Hill’s Great Northern Railway was the first transcontinental in North America to be built without subsidies and the only one (except the Southern Pacific) never to go bankrupt. It helped that, unlike the Union Pacific’s line, most of the GN’s route was across fertile farm or forest land.

So now Obama wants to build a new rail empire. Like the Union Pacific, this one will require huge subsidies. Like Crédit Mobilier, contractors will make huge contributions to Congressional campaigns to keep the money flowing. The rail lines will never cover their operating costs, much less capital costs, and so will either go bankrupt or be forever subsidized by taxpayers. And just as the economic benefits of the Union Pacific were invisible for several decades, the environmental benefits of high-speed rail will be negligible or negative.

One difference: while transcontinental railroads eventually did make economic sense, high-speed rail never will.

China in Africa

Tom Ricks used to cover the Pentagon for the Wall Street Journal and the Washington Post. He wrote terrific books about the Marines and the war in Iraq. Now among other gigs, he is a blogger for Foreign Policy. It’s great when top-notch reporters write for blogs, even when they are overly enthusiastic about counterinsurgency warfare. That is an issue we will take up with Ricks when he visits Cato on March 13 for a forum on military reform.

I have a smaller bone to pick now. Ricks, like many Pentagon types, is worried about Chinese activities in Africa. He links to a story about a bridge-building project in Mali and suggests that the Chinese are doing something clever that we will someday realize has harmed us.

I hear variants of this all the time — China is doing stuff in Africa, so we must imitate them. It doesn’t make sense. Even if you think the United States has a zero-sum relationship with China where their gain is our loss (I don’t), you should worry about something else. There is little that China can do in Africa to make it stronger or to damage U.S. interests.

There are basically three things Americans worry about China doing in Africa: gaining influence from aid and diplomacy that it will use against us, gaining wealth from investments that it will use against us, or somehow screwing up our access to oil.

On the first concern, you have to ask what influence in Africa gets you, other than a happy feeling. Traditionally, as in World War II or the start of the Cold War, we worried about hostile states gaining industrial might by conquest that they could harness against us in a war. Whether or not that was a valid concern is open to academic debate, but there was never much reason to worry about Soviet efforts to buy support in poor countries during the Cold War. There was little to gain there in a geopolitical sense, outside of raw materials rare enough that they might be blocked from the market in a war. It makes even less sense to worry about China gaining influence in Africa now. If Mali likes China because it builds bridges there, so what? We are not poorer or less safe for it.

What about investments? Chinese investments in Mali are more useful to Mali and China than government aid, assuming the investments are sensible ones. If they are wise investments, however, U.S. companies won’t be far behind, and our national income will rise as a result. If they are not economically sensible, they will not enhance Chinese power, and we should not imitate them.

The biggest worry is that China is locking up energy supply in Africa. This concern is born of a failure to understand that oil is a global commodity. If the Chinese tap more of it, American consumers pay less too. If they own production facilities, that matters not at all if the oil is going to market. If the Chinese have a mercantilist energy policy, that is their problem. For more on energy alarmism, see here, here and here.

There is nothing sinister or clever about Chinese activity in Africa. Americans shouldn’t worry about it.

While we’re talking about Foreign Policy bloggers and developing countries, be sure to check Stephen Walt’s attack on his employers’ vacuous cover story: “The Axis of Upheaval.” Great stuff.