Topic: Energy and Environment

Obama’s ‘Bold’ Action on Climate Change

I was invited to comment yesterday over at the New York Times on President Obama’s memorandum to the EPA to reconsider its earlier denial of a waiver requested by the state of California; a waiver that would allow that state to impose its own fuel efficiency standards for passenger vehicles and light trucks so as to reduce that state’s greenhouse gas emissions. The simple point I wanted to make at the Times is that allowing this waiver to go through would largely allow that state to dictate fuel efficiency standards for the nation as a whole. I argued that this is probably a bad thing — state action that imposes significant policy changes on the nation as a whole ought to be enjoined and those decisions ought to be left to Congress.

For those of you interested — and who have a strong stomach — read the comments on the board that follows. You might think that there is nothing particularly radical or even ideological in the argument I made. Apparently, you would be wrong.

This morning, I had a chance to reprise that discussion as a guest on the Diane Rehm Show. With me in the studio was David Shepardson, the Washington bureau chief of the Detroit News and Phyllis Cuttino, the director of the Pew Environment Group’s U.S. Global Warming Campaign. You can listen to the show online if you like, but in case you don’t have the time, here are the highlights:

Both Mr. Shepardson and Ms. Cuttino were nearly breathless about the bold, historic step allegedly taken by President Obama this week. Yet is seems to me that telling the EPA to rethink a decision made some months ago — with no stipulation that it actually reverse course — is something short of a political earthquake.  “Bold action” would be legislative proposal to increase federal fuel efficiency standards, impose a federal carbon tax, institute an ambitious cap & trade program, etc. I’m not saying I support that sort of “bold” action, but please — let’s keep things in perspective.

Ms. Cuttino argued at every turn that energy efficiency equals emissions reductions. But it does not. Energy intensity in the United States declined by 34% from 1980 through 2000, but energy consumption increased by 26% over that same period. More ambitious gains in energy efficiency promise no better. For instance, energy intensity in China declined by 70% over that same period while energy consumption increased by 80%.

The only way to reduce greenhouse gas emissions is to increase the marginal price of fossil fuels OR to strictly ration their availability. Everything else is a dodge. Reducing the marginal cost of energy or energy-related services — which is exactly what energy efficiency standards do — will not, in aggregate, reduce energy consumption.

Alas, Ms. Cuttino refused to acknowledge historic reality. When asked by guest-host Susan Page why the environmental community opposes a carbon tax in lieu of energy efficiency standards, she said that such a tax would be regressive. Well, that’s true. But so is a fuel efficiency standard, which imposes a tax on vehicles at the point of purchase. Unfortunately, I did not have the opportunity to jump in with that observation.

Still, Ms. Cuttino does not speak for the environmental community on this. No less than Al Gore is an enthusiastic supporter of (steep) carbon taxes (to be offset with corresponding tax cuts elsewhere).

Ms. Cuttino kept making the point that higher fuel efficiency standards are a free lunch. They will save motorists money, save U.S. automakers from bankruptcy, and rescue jobs in the auto sector. “Who doesn’t want better fuel efficiency?” she asked. Well, apparently, most people who buy cars don’t — not if they have to pay higher sticker prices for that fuel efficiency or give up other amenities. If it were otherwise, then there would be no need for a federal requirement, now would there?

Of course, polls tell a different story. Sure, if you asked me whether I wanted my car to get more miles per gallon, I would say “yes.” But fuel efficiency is not a free good that drops from the sky. There are trade-offs; higher sticker prices (as even California acknowledges in its petition for a waiver), smaller cabins, lighter weight (a safety concern for some) and reduced performance in some areas. Should decisions about how many and what kind of trade-offs to accept in return for fuel efficiency be made individually by consumers or collectively by politicians? I never found time to make that point, but that’s the nub of the issue.

On several occasions, Ms. Cuttino tried to dismiss my criticisms by saying, well, industry always says that the technology doesn’t exist to meet federal standards or that it would prove to costly, but — what do you know? — people like me were wrong then and I’m wrong now. Of course, I never made either of those arguments. I simply noted that there are no free lunches and that fuel efficiency comes at a cost. Heresy!

Ms. Cuttino’s repeated attempts to conflate “Jerry Taylor” with “industry” were particularly annoying. She is the one in favor of bailing out the auto industry. I am the one who is trying to protect the federal till from their political piracy. It’s a curious world when someone who wishes that bankruptcy would be allowed to take its course over at GM is somehow painted as an industry apologist.

National security externalities were also briefly touched on. Ms. Cuttino argued — as do many — that our consumption of oil strengthens anti-American actors abroad by lining their pockets with petrodollars. I pointed out that there is zero statistical correlation between oil profits and terrorism or oil profits and hostility from state oil producing regimes. Sure, it’s better for Iran to have less money than more, but the conceit that reducing oil consumption reduces problems abroad is completely without foundation.

There was, of course, the usual tripe about how how a strong plurality of Americans want this or want that and that a majority of Americans believe this or believe that. I countered with a hardy ”So what?” A plurality of Americans also believe that evolution is an atheistic fiction, so the fact that a majority of Americans think X does not mean that X is true or that X ought to be the law of the land. Unfortunately, a listener in the second hour complained that this sort of response was so snarky that it didn’t warrant anyone’s time. But why?

At the end of the show, I made the point that a couple of the callers seem to be under the impression that I favor a carbon tax. Not so — I said, look, if we have to reduce greenhouse gas emission then a carbon tax makes a lot more sense than an automotive fuel efficiency standard … but I am not there yet. Ms. Cuttino replied, in a rather annoyed voice, that it is impossible to argue with someone who doesn’t believe in climate science or global warming. But when did I say that? I don’t believe that ”climate science” is a figment of the imagination or that the world isn’t warming. I simply believe that the costs of doing something about that warming by reducing greenhouse gas emissions are greater than the benefits — an entirely different matter.

Chu-ing up the Economy in the Name of Climate Change

USA Today reports on Obama DOE nominee Steven Chu:

The Nobel Prize winner nominated to head the Energy Department said Tuesday that he would focus the agency in part on global warming, a sharp departure from the agency’s priorities during the Bush administration.

Citing new evidence in the debate over the legitimacy of global warming, Senior Fellow in Environmental Studies Patrick J. Michaels explains scientific bias in his new book, Climate of Extremes: Global Warming Science They Don’t Want You to Know.

Watch Michaels discuss the possibility of a carbon tax on Fox Business and global warming on CNN’s Lou Dobbs.

Senior Fellows Jerry Taylor and Peter Van Doren examine the true cost of climate change and defend the case against government support for alternative energy.

Why Congress Should Turn Federal Lands into Fiduciary Trusts

The Forest Service, Bureau of Land Management, National Park Service, and Fish and Wildlife Service collectively manage well over a quarter of the land in the United States. Several Cato Institute studies have called for privatization of these public lands, but this idea is strongly resisted by environmentalists, recreationists, and others. A new paper from Cato scholar Randal O’Toole suggests an alternative policy: turn them into fiduciary trusts. Under this proposal, the U.S. would retain title to the lands, but the rules under which they would be governed would be very different.

Government the Environmental Despoiler

The Washington Post editorialized today on an egregious environmental foul-up by the Tennessee Valley Authority:

“As bad as this disaster was, what made it worse was the revelation that such pools of pollutants aren’t federally regulated.” Efforts to regulate the problem have been “beaten back by industry” in the past, the Post says.

But, wait – the TVA is owned by the federal government. It’s a government entity, not part of private “industry.” So much for the notion that government organizations are good environmental stewards because they don’t have to grub for profits.

Certainly, the environmental problem described by the Post is a serious one. But let’s not frame this as Green Government vs. Dirty Private Industry. Indeed, the federal Department of Energy, for example, has had an atrocious environmental record over the decades.

PBS in Action

I got a fundraising letter at home, an all-green envelope with a silhouetted tree and the stark message:

This is no time to fool with our planet… AN URGENT OFFER INSIDE

An environmentalist organization, of course.

But not exactly. In fact, it was a fundraising letter from MPT, which did not quite tell me anywhere that that stands for Maryland Public Television, a television network owned and operated by the State of Maryland. The letter continued in that vein: “no time to take our planet for granted … understand the stakes … cannot afford a community and nation ignorant of science.” Sounds like Maryland Government Television knows which side is right in the heated scientific, economic, and political debates over environmental issues.

True, they do promise to use their “unique ability” to “bring our community real science with no political agenda, news reporting with diverse perspectives, and programs that teach kids conservation values.” But has anybody ever seen a PBS/MPT documentary on the high costs of environmental regulation? Or the fact that the globe hasn’t warmed for the past 10 years? Or the way that markets lead to better environmental amenities? Not really a lot of diverse perspectives, as the general tenor of the letter would suggest.

MPT’s fundraising letter seems to acknowledge clearly its function: To raise money from liberals, to supplement the tax money raised from people of all political perspectives, to advance one side of controversial issues. In a world of 500 channels, why are we taxing people to support one side in a broad political debate?

How Much Will Global Warming Cost Us?

A lot more than we used to think … or so we are told.  Turns out that the economists who study this matter are not so convinced.  Those interested in what the most recent literature review has to say on this topic should go here: http://www.cato.org/pub_display.php?pub_id=9850.  Short answer: If you believe the scientific narrative offered by the IPCC, we’re probably looking at the low-end of $3-$24 per ton of carbon emissions.