The Obama administration has endorsed these policies. Secretary of Transportation Ray LaHood and Secretary of Housing and Urban Development Shaun Donovan have agreed to require metropolitan areas to adopt compact-development policies or risk losing federal transportation and housing funds. LaHood has admitted that the goal of this program is to "coerce people out of their cars."

As such, compact-development policies represent a huge intrusion on private property rights, personal freedom, and mobility. They are also fraught with risks. Urban planners and economists are far from unanimous about whether such policies will reduce greenhouse gas emissions. Some even raise the possibility that compact city policies could increase emissions by increasing roadway congestion.

Such reductions are insignificant compared with the huge costs that compact development would impose on the nation. These costs include reduced worker productivity, less affordable housing, increased traffic congestion, higher taxes or reduced urban services, and higher consumer costs. Those who believe we must reduce carbon emissions should reject compact development as expensive, risky, and distracting from tools, such as carbon taxes, that can have greater, more immediate, and more easily monitored effects on greenhouse gas emissions.

In the blame game, the Obama administration isn't about to stop with Fox News. Instead, it's moving on to lowly scientists.

Last month, President Obama gave a somewhat chilling, if somewhat ignored, speech on climate change at the Massachusetts Institute of Technology. He stated that any scientific debate about the magnitude of global warming is unscrupulous, decrying "those who . . . make cynical claims that contradict the overwhelming scientific evidence when it comes to climate change, whose only purpose is to defeat or delay the change that we know is necessary."

Then, the president talked tough, saying, "We'll just have to deal with those people," language familiar to anyone who knows the vagaries of Chicago politics.

This surely isn't the first time in world history that some president, premier, or pope has attempted to define science and threaten those who disagree. But the truth of the matter is that disagreement, one way or another, is a given. One can selectively cite recent climate data in support of pretty much any point of view, from the rejection of any influence by humankind at all to the wild notion that the world is about to come to an end.

The ease with which anyone can construct just about any climate argument he wants has to do with the inconstant nature of climate itself. The sun warms the earth, but the amount of energy it radiates changes (right now it's pretty cold). The earth's surface is dominated by two very different substances — uneven rocks and large, smooth oceans — so internal climate oscillations and accidents happen as well.

Temperatures seesaw up and down depending upon ever-changing currents of air in the tropical atmosphere and oceans, including El Niño in the Pacific and other weather features elsewhere. They can be either cold or warm. When the warm ones are absent or weak for a decade or so — a common occurrence — temperatures may stay the same or even fall. When there's a huge warm phase in El Niño, global temperatures rise, as they did in 1998, setting records that have yet to be broken.

Finally, there's carbon dioxide itself. We put it in the air whenever we burn pretty much anything, be it in a power plant or in an automobile. Everything else being equal, that will warm temperatures at the surface and in the lower atmosphere. Just how much is the subject of a great scientific debate that has yet to be resolved.

And everything else is never equal. Cold portions of El Niño and a cold sun can completely halt carbon-dioxide–induced warming (and clearly have for more than ten years now). And this behavior creates a fertile environment for criticism of the projections of computer models for this century.

What you can say is happening to the climate depends on the period you choose to study. Using the surface-temperature record that scientists cite the most, you will find a significant cooling trend after 2000. You'll find no significant trend whatsoever if you start in any year between 1996 and 2000. Beginning your trend before 1996 will yield you significant warming. And so forth.

It's therefore not surprising that anyone can see anything on the climate Ouija board.

In fact, though, there's only one thing that is clear: For the last decade and a half, our climate has not behaved in accordance with the predictions of most climate models. They just don't predict such a long hiatus in warming even as carbon-dioxide emissions from human activity continue to climb.

Note to the president: I do not say that to "defeat or delay" your policies on climate change. The fact is that the U.S. Senate is likely to do that anyway, with or without this information. Early on Election Day, the GOP boycotted a session of the Environment and Public Works Committee in protest of a climate-change bill's costs, and Democrats were split on the legislation as well. Tuesday's election results are likely to give Blue Dog Democrats further pause.

If the Senate does not pass a climate bill that is acceptable to the president, Obama is almost certain to ask the Environmental Protection Agency to issue regulations on carbon-dioxide emissions that he can take to the Copenhagen climate conference next month as evidence of America's efforts. These will then be used to extract some vague concessions on the part of the world's largest emitter of greenhouse gases, China, and the Copenhagen Protocol will be hailed as a major victory over global warming.

Of course, it will be no such thing. If the EPA does issue global-warming regulations, it will have to defend the science that it uses to raise the price of virtually everything. And it is true, Mr. President, that people will use the inconvenient facts of recent climate behavior to defeat or delay the "change" the EPA commands. The administration may respond by "working on" the global-warming people it doesn't like, but it can't "work on" the obvious and growing disconnect between what was forecast and what is happening.

The administration did a great job of increasing the ratings of Fox News. Maybe it can do the same for dissident scientists.

The conservative case for government intervention in energy markets is just as flimsy as the liberal case for government intervention in any other sector of the economy. Energy markets may not work as perfectly as in a textbook model, but they work — and government works even less perfectly.

Consider one of the premises underlying the present energy-policy debates: the fear that our reliance on foreign oil leaves us vulnerable to supply disruptions. Most conservatives seem to believe that a reduction in imports will insulate us from price shocks caused by developments overseas. That is nonsense. A supply disruption anywhere will increase the price of crude oil everywhere for the same reason that an early frost in Florida will increase the price of citrus produced in Florida and California by roughly the same amount. Energy independence provides no protection against supply disruptions abroad.

Others fear that reliance on imports requires us to undertake military commitments to ensure that oil continues to flow. But producers have even more reason to worry about the safety of their facilities than we do and, likewise, more reason to ensure the security of international oil-shipping lanes. Hence, they have every incentive to defend their oil infrastructure, whether we help foot the bill or not.

No less a conservative than Dick Cheney argues that producers and consumers make bad decisions in energy markets: They fail to appreciate the profit opportunities associated with certain investments, he says, be they renewable, nuclear, clean coal, ethanol — whatever. Consumers, the argument goes, are too risk-averse to make expensive bets on promising technology, while they discount the certainty of energy depletion and the dwindling of power supplies. And, Cheney says, producers' time horizons are too short to invest in energy technologies that offer long-term promise. But economists investigating the issue find little evidence for assertions like Cheney's, and little reason to believe that markets in energy are different from markets in other commodities.

Policy activists are on somewhat firmer ground, however, when they argue that energy prices do not fully reflect the environmental costs associated with energy consumption. But economists are wildly divergent in their estimates of the costs of these energy-consumption externalities. Some studies find that present prices for conventional fuels, such as natural gas, are too high rather than too low — owing to regulatory distortions in the market.

In the case of fuels for which the evidence about environmental externalities is clear, the solution is a tax that increases the price and allows producers and consumers complete freedom to adjust. But that would create visible costs and diffuse benefits, and politicians prefer the opposite: concentrated benefits for companies that collect subsidies and diffuse costs imposed on the taxpayers and the economy.

The strongest critique of a laissez-faire energy regime is that innovators in energy markets cannot capture the full benefits of their innovations. Hence, businessmen may underinvest in energy research and development. Notice that the complaint, however, is that industry will underinvest in R&D across the board — not that investors back the wrong technologies. If this is a serious problem, the solution is to make all R&D more attractive through preferences in the tax code. Targeted energy R&D subsidies and mandates simply substitute political judgments about investments for market judgments, even though politicians have no comparative advantage in sorting technological winners from losers.

Consider the current love affair of the Right with "clean coal" technology. Billions of federal tax dollars have been spent since the 1980s on various iterations of this concept — most recently via George W. Bush's "FutureGen" project and the "Clean Coal Power Initiative" — yet the marketplace has not been friendly to new coal plants. From 2001 through 2007, 179,382 megawatts of natural-gas-fired electric generators were added, but only 3,311 megawatts of coal-fired generation capacity came online.

It's not that we don't know how to make coal facilities cleaner — it's that we don't know how to make coal plants both cleaner and profitable. Throwing more tax money at this riddle will not necessarily produce an answer. Why are conservatives doubling down on the same ill-fated taxpayer adventure that Ronald Reagan labored so mightily to kill in the 1980s?

Nuclear power is another favored recipient of conservative largesse. Despite promises in the 1950s that nuclear power would soon become "too cheap to meter," 50 years of lavish federal subsidies and regulatory preferences have yet to produce an industry that can turn a profit without taxpayer help. That is an observation that even the nuclear-energy industry's trade association freely concedes, at least when it is time for politicians to reconsider the merits of existing subsidies such as the federal guarantee of private loans to the industry, federal protection against liabilities beyond a certain threshold, production tax credits, and the like. Tufts economist Gilbert Metcalf calculates that nuclear-power costs would increase by almost 50 percent if those subsidies were eliminated.

How is the conservative case for the above subsidies any different from the liberal case for subsidizing solar or wind energy, or high-mileage automobiles — or, for that matter, the case for government backing of financial institutions and automobile companies? It isn't, and conservatives should not check their skepticism about central planning and the bureaucratic ordering of markets at the door when they walk into the energy-policy funhouse. There is no BTU exception to The Wealth of Nations.

If the G-20 leaders really want to demonstrate commitment to action on climate change, they would do well to be more careful about sticking to their commitments when it comes to open international trade.

Many lofty sentiments were displayed at both events. UN Secretary General Ban Ki-Moon announced that the world is "one step closer" to a climate change deal. But he declined, of course, to point out that this particular journey of a thousand miles looks increasingly precarious and that one step is nowhere near enough progress for those hoping for a final deal in December.

The new Japanese Prime Minister made nice with his colleagues by reaffirming his vow to reduce his country's emissions to 25% below 1990 levels by 2020. China's President Hu Jintao only went so far as to promise his country would reduce emissions by a "notable" margin, but at least sounded receptive to emissions reduction efforts. President Obama gave yet another eloquent speech, which though short on specifics, conveyed that the United States accepted responsibility for past damage, while continuing to insist on efforts from "rapidly-growing developing nations."

On trade, the G-20 will no doubt pledge to work hard to complete the Doha round of multilateral trade negotiations by 2010, and to keep trade open in the meantime. Unfortunately,its record in this area is not great.

The governing body has consistently, if hypocritically in view of its subsequent actions, issued statements emphasizing the importance of avoiding protectionism amid a global financial crisis, only to have its members do the opposite. Too often the temptation among G-20 countries to subsidize and protect their own has proven too great to resist.

The political tension between protection-seeking domestic constituencies and those in favor of more open trade is beginning to appear in the climate change debate. Importantly, the free flow of goods and environmental soundness are not necessarily at odds.

Indeed, because trade leads to wealth, and wealth to an increased desire and ability to protect the environment, the two are complementary. Nonetheless, many G-20 leaders are doing their best to set them up as being inalterably opposed. President Sarkozy earlier this month became the latest politician to call for carbon tariffs to "level the playing field" for French products that will attract a carbon tax and yet compete with untaxed imports.

Similar sentiments are held among certain U.S. politicians too. Senators from manufacturing states crucial to securing passage of a climate bill have repeatedly insisted that their support depends on protection for vulnerable domestic industries. They continue to argue that Chinese imports are threatening U.S. jobs in energy intensive industries, even though more than two-thirds of those types of products come from other similarly rich (and, in some cases, greener) countries.

President Obama spoke out against punitive trade measures inserted into the House bill when it passed in June, but declined to say whether he would veto a final bill if it contained the same elements. He has demonstrated little willingness to resist the siren song of protectionism, judging from his actions on trade since assuming the presidency. He also displayed a lack of appreciation for the foreign policy implications of protectionism in announcing tariffs on Chinese tires just prior to a climate summit where the country's cooperation was considered crucial.

Alienating the Chinese by threatening them with trade barriers would be a big mistake. And considering that the U.S. accounts for less than one percent of the market for Chinese energy-intensive goods as is, tariffs would create even less of an incentive among producers to clean up their production techniques for what would be a shrinking market. What they will do is increase the costs of U.S. producers who use Chinese inputs, and ultimately, of U.S. consumers.

Protectionism in the name of climate change carries little upside and much risk, for the environment and for the global economy. Leaders who care about either or both goals should start fulfilling their own pledges on open trade.

Ethanol is sustainable by definition. The CO₂ sequestered by growing corn is exactly offset by the CO₂ emissions that follow from burning the fuel in a car. The same observation applies to, say, consuming bourbon made from corn, but ethanol can replace energy — bourbon cannot. Hence, any sustainability standard should be applied to all corn and other crop products, and not just ethanol.

Sustainability standards are based on "lifecycle accounting," in which ethanol is assumed to replace gasoline; but in fact, it may be replacing coal or other energy sources. Life-cycle accounting also fails to recognize that if incentives are given for ethanol producers to use relatively "clean" inputs (e.g., natural gas), the "dirtier" inputs (e.g., coal) that might otherwise have been used for the ethanol production will simply be used by other producers to make products that are not covered by the sustainability standard. Sustainability standards reshuffle who is using what inputs — with no net reduction in national emissions.

Finally, sustainability standards are discriminatory under World Trade Organization law and are unlikely to survive a legal challenge from ethanol producers abroad. The United States will not be able to rely on the World Trade Organization's exception for trade laws protecting the environment because of lax U.S. policies dealing with greenhouse gas emissions relative to its trading partners. Moreover, the imposition of U.S. tariffs on more climate-friendly ethanol produced abroad weakens any U.S. defense of ethanol sustainability standards under the WTO.

From an outsider's perspective, religious displays of self-inflicted pain can seem pointlessly barbaric. But many anthropologists and evolutionary psychologists believe they have an important function: to facilitate collective action by requiring members to send a costly, hard-to-fake signal of commitment to the group's common creed.

The same impulse, in a rather less impassioned form, seems to animate the Democrats' climate change bill. Coordinating international political action to achieve significant reductions in carbon emissions is a collective action problem of grand, global scale. One way to achieve and maintain such coordinated effort is to detect and punish shirkers. (Governments keep money rolling into their treasuries by threatening tax dodgers with jail.) However, there is no world government with the power to bring wayward nations into line, no world-ranging whip to keep countries pulling in time.

This is the glaring flaw in plans for carbon taxes and cap-and-trade regimes: The world's wealthy nations may now be willing to paddle their boat upstream, but if the developing world won't row along with them, if they insist on a free ride, the boat is going nowhere.

Yet there are other tricks for encouraging cooperation and weeding out "free-riders." Consider the self-flagellating Shiites and face-piercing Thai vegans. These are extreme examples of a cooperation-enabling strategy that game theorists call "costly signaling." Those who display an unflinching devotion to even the most burdensome rules of common life are more likely to pull their weight, to uphold their end of a deal. Talk is cheap, but the willingness to pay a price signals to others the commitment of a real team player.

President Obama would like to walk into the climate-change talks in Copenhagen this December flashing a clear signal that America is willing to pay a price in the fight against carbon and its depredations. Indeed, the best one can hope from the climate legislation languishing in Congress is that, if passed, it will put the world on notice that the United States, the Earth's greatest per-capita carbon font, can be trusted to pull its weight in a global climate deal.

The signal would certainly be costly. According to the Congressional Budget Office, the Waxman-Markey cap-and-trade scheme passed by the House would reduce GDP growth between .03 percent and .09 percent per year for the next 40 years. That may not sound like much, but annual growth rates, like annual interest rates, are compounding, which means that the cost grows considerably over time. At the conservative .03 percent annual penalty, the CBO estimates the U.S. economy in midcentury will be short more than $300 billion a year compared with a future without Waxman-Markey.

What would Americans get in return? Nothing, nada, zip, zilch—unless most of the world plays along. As the CBO put it: "As long as a significant fraction of the world did not adopt similar policies, some of the reductions in the United States would probably be offset by increases in emissions elsewhere." That is to say, if countries like India and China won't agree to (and, more important, stick with) painful cuts that will slow their steady rise from poverty, American sacrifice will do next to nothing to combat the threat of melting ice caps and a more livable Canada.

Costly signals can make sense if they deliver the benefits of cooperation. Won't proof of our faith help skeptical governments in the developing world see that international cooperation is possible after all? It's unlikely.

The Democrats' cap-and-trade bill is stalled in legislative limbo because Americans are far from united about its merits. It would be reasonable for international players to suspect that an American electorate unhappy with the costs of a future carbon cap might have a change of heart. And then there's the bill itself: a patchwork of exemptions, subsidies, and special favors. If political horse-trading produced something so convoluted from the start, it is fair to assume that it will become even more compromised as time goes on, leaving the U.S. unable to actually meet the legislation's aims. Most important, a costly signal clinches trust only among those on the same wavelength. Overheated ultra-orthodox Jews and lacerated Shiite Muslims probably don't much impress each other. Likewise, the signal broadcast by the willingness of wealthy nations to cut their carbon emissions may fail to impress poorer counties with fundamentally different priorities. They are not free-riding if they never asked to be in the boat.

It is hard to see the point of legislation that promises certain costs and improbable benefits. Still, there could be a point. Many Americans would find profound meaning in passing legislation like Waxman-Markey and gladly bear its costs—even if it does little to secure international cooperation, and even if it does nothing to slow global warming. The law would nevertheless speak to what Americans value, what we aspire to, who we are, what we're about. It would say that we're not so bad, that we repent our industrial sins, that over here we know full well that green is the new black.

Alas, this is not a statement of faith most Americans are prepared to make, or a cost they are prepared to pay. They should not be asked to don a green hair shirt just to show the world that some of us care.

The Obama team appears to believe it has the authority to implement comprehensive climate change regulation, Congress be damned. Worse still, under current constitutional law--which has little to do with the actual Constitution--they're probably right.

In a democratic country, you'd think that before the executive branch could regulate CO2--a ubiquitous substance essential to life--the legislature would have to vote on the issue. But you'd be wrong.

In 2007, the Supreme Court ruled that the 1970 Clean Air Act's definition of air pollutant was broad enough to allow regulation of CO2 emissions from new cars, and that the EPA was required to regulate once it issued a finding that CO2 contributes to global warming. In fact, once the EPA rules that CO2 is a dangerous pollutant--as it did in April--regulation of industrial sources likely becomes mandatory as well.

But existing law still leaves the executive branch enormous discretionary power--and thus a hammer to hold over Congress's head. A report issued in April by the New York University Law School argues that "if Congress fails to act, President Obama has the power under the Clean Air Act to adopt a cap-and-trade system."

James Madison believed that there could be "no liberty where the legislative and executive powers are united in the same person." And yet, here we are, with those powers united in the person of a president who has pledged to heal the planet and stop the oceans' rise.

This constitutional nightmare is the culmination of a trend many years in the making. The first sentence of the Constitution's first article says that "all legislative Powers herein granted" are vested in Congress.

The Supreme Court once took that language seriously, as when, in 1935, it struck down a key New Deal program for delegating legislative power to the executive. Yet the Court eventually made its peace with statutes that allow the executive branch to both make and enforce the law.

That paved the way for the modern administrative state, which looks a lot like the situation complained of in the Declaration of Independence, in which "a multitude of New Offices... harass our people and eat out their substance."

After 9/11, the phrase "unitary executive theory" (UET) came to stand for the idea that the president can do whatever he pleases in the national security arena. But it originally stood for a humbler proposition: UET's architects in the Reagan administration argued that the Constitution's grant of executive power to the president meant that he controlled the executive branch, and could therefore rein in aggressive regulatory agencies.

In an era when Republicans held a virtual lock on the Electoral College, that idea had some appeal. But as Elena Kagan, now President Obama's Solicitor General, pointed out in a 2001 Harvard Law Review article, there's little reason to think that "presidential supervision of administration inherently cuts in a deregulatory direction."

How far will Obama push in the other direction? He may be reluctant to stretch his authority as far as the law will allow, in a political climate where even green-leaning Democrats scream bloody murder every time gas prices rise.

But as Kagan notes, after the Democrats lost control of Congress in 1994, President Clinton used his regulatory authority unilaterally to show progress, pushing "a distinctly activist and pro-regulatory agenda." As Obama's popularity erodes, he may come to like the idea of being the "decider."

Will liberals who decried George W. Bush's unilateralism object to this staggering concentration of executive power? Don't hold your breath.

Imagine if there were no reliable records of global surface temperature. Raucous policy debates such as cap-and-trade would have no scientific basis, Al Gore would at this point be little more than a historical footnote, and President Obama would not be spending this U.N. session talking up a (likely unattainable) international climate deal in Copenhagen in December.

Steel yourself for the new reality, because the data needed to verify the gloom-and-doom warming forecasts have disappeared.

Or so it seems. Apparently, they were either lost or purged from some discarded computer. Only a very few people know what really happened, and they aren't talking much. And what little they are saying makes no sense.

In the early 1980s, with funding from the U.S. Department of Energy, scientists at the United Kingdom's University of East Anglia established the Climate Research Unit (CRU) to produce the world's first comprehensive history of surface temperature. It's known in the trade as the "Jones and Wigley" record for its authors, Phil Jones and Tom Wigley, and it served as the primary reference standard for the U.N. Intergovernmental Panel on Climate Change (IPCC) until 2007. It was this record that prompted the IPCC to claim a "discernible human influence on global climate."

Putting together such a record isn't at all easy. Weather stations weren't really designed to monitor global climate. Long-standing ones were usually established at points of commerce, which tend to grow into cities that induce spurious warming trends in their records. Trees grow up around thermometers and lower the afternoon temperature. Further, as documented by the University of Colorado's Roger Pielke Sr., many of the stations themselves are placed in locations, such as in parking lots or near heat vents, where artificially high temperatures are bound to be recorded.

So the weather data that go into the historical climate records that are required to verify models of global warming aren't the original records at all. Jones and Wigley, however, weren't specific about what was done to which station in order to produce their record, which, according to the IPCC, showed a warming of 0.6° +/- 0.2°C in the 20th century.

Now begins the fun. Warwick Hughes, an Australian scientist, wondered where that "+/-" came from, so he politely wrote Phil Jones in early 2005, asking for the original data. Jones's response to a fellow scientist attempting to replicate his work was, "We have 25 years or so invested in the work. Why should I make the data available to you, when your aim is to try and find something wrong with it?"

Reread that statement, for it is breathtaking in its anti-scientific thrust. In fact, the entire purpose of replication is to "try and find something wrong." The ultimate objective of science is to do things so well that, indeed, nothing is wrong.

Then the story changed. In June 2009, Georgia Tech's Peter Webster told Canadian researcher Stephen McIntyre that he had requested raw data, and Jones freely gave it to him. So McIntyre promptly filed a Freedom of Information Act request for the same data. Despite having been invited by the National Academy of Sciences to present his analyses of millennial temperatures, McIntyre was told that he couldn't have the data because he wasn't an "academic." So his colleague Ross McKitrick, an economist at the University of Guelph, asked for the data. He was turned down, too.

Faced with a growing number of such requests, Jones refused them all, saying that there were "confidentiality" agreements regarding the data between CRU and nations that supplied the data. McIntyre's blog readers then requested those agreements, country by country, but only a handful turned out to exist, mainly from Third World countries and written in very vague language.

It's worth noting that McKitrick and I had published papers demonstrating that the quality of land-based records is so poor that the warming trend estimated since 1979 (the first year for which we could compare those records to independent data from satellites) may have been overestimated by 50 percent. Webster, who received the CRU data, published studies linking changes in hurricane patterns to warming (while others have found otherwise).

Enter the dog that ate global warming.

Roger Pielke Jr., an esteemed professor of environmental studies at the University of Colorado, then requested the raw data from Jones. Jones responded:

Since the 1980s, we have merged the data we have received into existing series or begun new ones, so it is impossible to say if all stations within a particular country or if all of an individual record should be freely available. Data storage availability in the 1980s meant that we were not able to keep the multiple sources for some sites, only the station series after adjustment for homogeneity issues. We, therefore, do not hold the original raw data but only the value-added (i.e., quality controlled and homogenized) data.

The statement about "data storage" is balderdash. They got the records from somewhere. The files went onto a computer. All of the original data could easily fit on the 9-track tape drives common in the mid-1980s. I had all of the world's surface barometric pressure data on one such tape in 1979.

If we are to believe Jones's note to the younger Pielke, CRU adjusted the original data and then lost or destroyed them over twenty years ago. The letter to Warwick Hughes may have been an outright lie. After all, Peter Webster received some of the data this year. So the question remains: What was destroyed or lost, when was it destroyed or lost, and why?

All of this is much more than an academic spat. It now appears likely that the U.S. Senate will drop cap-and-trade climate legislation from its docket this fall — whereupon the Obama Environmental Protection Agency is going to step in and issue regulations on carbon-dioxide emissions. Unlike a law, which can't be challenged on a scientific basis, a regulation can. If there are no data, there's no science. U.S. taxpayers deserve to know the answer to the question posed above.

But even though it's now clear the bill is not getting out of Congress, look for the Obama Administration to saddle our economy with this huge new energy tax through other means.

First, a brief flashback: The blowback against Obamunism began over global warming, not health care. By a squeaky 219-212 vote, the House rushed the 1,300-page cap-and-trade opus out the door so the members could get back to the hustings for the Fourth of July. When many freshman Democrats got home, those who voted for it experienced the first angry town halls of their careers. In our minds, it is easy to remember that the rancorous public meetings that continued in the August recess were always about health care, but they weren't.

So, given that health care is now effectively bottled up in both chambers of Congress, why isn't Obama pushing cap-and-trade in the Senate? Simple: the votes aren't there for it. Blanche Lincoln, the new head of the Agriculture Committee, calls cap-and-trade a "complete non starter" and said that it is not her "preference to move on cap and trade this year." Majority Leader Harry Reid recently signaled his agreement by stating that cap-and-trade "may" not be considered until next year.

For cap-and-trade, "next year" translates as "never." Senators know what touched off the town halls, and they know what fate awaits many of their Democratic colleagues come November 2010. Passing an unpopular health care "public option" along with cap-and-trade will easily realign the Senate into its old filibustering self. That kills cap-and-trade in the next Congress.

But do not despair, fans of economy-killing regulation.

Thanks to the Supreme Court's landmark decision in Massachusetts v. Environmental Protection Agency (2007), the EPA has authority to issue its own regulations on carbon dioxide. So while asking legislators to swallow hard on the bitter gristle of cap-and-trade, the president has really had the power to enact its core components on his own all along. Small wonder lawmakers of his own party are more than willing to toss the issue back onto his plate.

Now that cap-and-trade has so spectacularly failed in the legislature, it is a sure bet that Obama will direct (or has directed) EPA Administrator Lisa Jackson to issue her own cap-and-trade protocols. Look for something concrete out of EPA before the U.N.'s climate change confab in Copenhagen in early December. (That "something" may even include a new fuel economy standard of 35.5 miles-per-gallon—though it would be lower, of course, for the inefficient cars produced by government-owned General Motors.)

The timing of the Copenhagen conference is really what has been driving Obama's support for cap-and-trade all along. It would be an embarrassment for a left-hewing "green" president to show up empty-handed at such an event—and it will greatly diminish Obama's ability to wag his finger at other industrialized countries. For sure, the world's largest emitter of CO2—China—isn't going to agree to any mandatory emissions reductions unless the U.S. has something very serious in hand. And if China does nothing, there's simply not going to be a major slowdown in the growth of atmospheric greenhouse gases.

Not that it really matters. The rather large elephants crowding cap-and-trade out of the Senate is the earth's reluctance to warm in the last decade along with new projections saying that we could go another ten years without much warming.

The current hiatus in warming portends a reduction in potential heating for the entire century. Most computer models produce significant warming as a result of an increase in atmospheric water vapor (a "greenhouse" gas), which comes from an ocean initially warmed by carbon dioxide. When the ocean doesn't warm much, this "feedback" effect is delayed. Or so goes the myth.

The lack of warming is an embarrassment to any elected official who has been hiding behind "the science is settled" fig leaf in order to promote cap-and-trade. While every scientist will tell you that indeed the surface temperature of the planet is warmer than it was a century ago (that's the "settled" part of global warming science), very few scientists anticipated as long a period without warming as we are in. In other words, the real science of future warming is completely unsettled.

The bottom line is that Senate Democrats are perfectly happy to kick cap-and-trade under the bus. They're going to have a hard enough time recovering from the upcoming health care wreck. But the economy, meanwhile, will have an equally hard time recovering from what President Obama is going to do instead.

First, the key targets of the proposed import barriers, India and China, are relatively minor sources of imports of energy-intensive goods. Most carbon-intensive imports to the United States come from other developed countries that have stricter emissions controls than the United States and will therefore likely escape import penalties. Second, and more fundamentally, the trade provisions may be counterproductive. Global trade rules allow import barriers to protect the environment under certain conditions, some of which the main climate change bill appears to contradict. A trade dispute and possible retaliation is not in anyone's interest, especially in a global downturn. Even if the United States was able to avoid formal dispute settlement proceedings, copycat regulations in other countries may be designed in a manner unfavorable to U.S. interests.

To the extent that global warming is a real problem warranting action, it needs to be addressed globally rather than through unilateral efforts. Antagonizing trade partners through probably illegal trade measures will undermine efforts to secure global cooperation on climate change. A freer, more prosperous economy is a more auspicious path to ensuring a more rapid spread of environmental technology and the global consensus needed to combat climate change.

Germany's police union, the Bund Deutscher Kriminalbeamter, estimates that about 50,000 cars destined for the scrap yard under Berlin's trade-in scheme have been illegally resold to Africa and Eastern Europe. The government had paid around €125 million for these vehicles to be destroyed so that people would buy new, more fuel-efficient cars. German environmental group Deutsche Umwelthilfe predicts a doubling of illicit exports by the end of the year. It's probably only a matter of time before American clunkers will likewise find their illegal way to the streets of Mexico and beyond. And humanity would be better off if they did.

Imagine if the Salvation Army were ordered to destroy all the used clothing and furniture it receives instead of distributing it to the poor. No doubt this would be considered an outrage. But it is no less economically foolish and morally repugnant to deny poor people in the developing world access to these old cars.

The analogy is of course not exact. Unlike the Salvation Army, the German exporters as well as the African importers are smuggling these cars for personal gain, not out of charity. Yet the welfare benefits for Africa's poor are real, regardless of the motive. And for the record, the German and U.S. governments have forbidden giving away traded-in clunkers along with their export.

The scheme's advocates usually cite economic and environmental reasons — neither very convincing — for why the old cars have to be destroyed. The economic argument says that scrapping cars creates artificial scarcity, thus boosting demand for new auto sales in a recession. Leave aside that scrapping clunkers also raises the prices of used cars, thus penalizing poorer consumers. More importantly, there is evidence that the scheme triggered far fewer additional car sales than assumed. Consulting firm Macroeconomic Advisers estimates that in the U.S. "roughly half of the 250,000 in new sales would have occurred in the months following the conclusion of the program, and the other half would have occurred during the program period anyway." So all the scheme did was to transfer, rather than create, wealth by unnecessarily bribing people to make long-planned acquisitions.

But even where the subsidies may have caused genuine new sales, more money spent on cars simply means less money is available for other items. The German Retail Federation, for example, complains that the cash-for-clunkers program is "sucking out spending" as retail sales fell 1.3% in May and 1.8% in June. For the overall economy, therefore, the net result is probably zero. The idea that destroying items of value will boost the economy might be called in this context, the broken windshield fallacy.

But let's assume the scheme did create additional consumption. There are still far better and fairer ways of boosting demand. Even Keynes, the godfather of government stimulus programs, recommended paying people to dig and fill up ditches — a senseless but at least non-destructive activity. Exporting clunkers produces exactly the same outcome as destroying them — it reduces the supply-demand gap. At the same time, it also creates jobs in the export-import and transport industries in the rich and poor countries while giving people in the developing world access to cheap cars.

This is where the environmental argument for destroying the clunkers comes in. The old cars must disappear, we are told, because they contribute to global warming. Let's look first at the rather dubious claim that trading in your old car for a more fuel-efficient new one reduces carbon emissions. If half of the new sales would have occurred anyway and the other half merely brought forward purchases rather than created new ones, then the real mileage effect appears quite limited. What's more, the energy required to manufacture a car accounts for as much as 45% of its lifetime energy consumption. So replacing old cars with new ones requires a big up-front energy investment. And crushing old cars and converting them to steel consumes more energy than exporting them.

It is true that selling clunkers to the Third World will increase emissions in those countries by increasing the number of cars on the road. But denying those poor people access to affordable cars means lowering their living standards. Lower living standards will of course always reduce energy consumption, but surely that cannot be a desirable policy objective.

Moreover, many of our clunkers are bound to be more efficient and more environmentally friendly than cars currently on the roads of many of the world's poorest countries. Selling the clunkers to them, therefore, could defray the cost of the clunkers programs while also upgrading the stock of cars in Africa and elsewhere. Just as the Salvation Army takes clothes that are one person's junk and sells it to others who are happy to get a good deal on used clothes, the clunkers programs could be moving the cars to where they are most valued, instead of destroying them for scrap.

The availability of cheap used cars will of course only make a marginal difference for people in the developing world. Yet there are no good reasons to deny these people even a marginal improvement of their living standards. Seen in this light, criminals exporting clunkers to Africa are doing more to increase economic welfare than moralistic German politicians and environmentalists spending taxpayers' money to deny Africans a cheap ride.

Before you answer the question, consider the following facts. The proponents claim this tax bill will reduce U.S. carbon dioxide emissions, which are purported to cause global warming. First, despite the claims of President Obama, House Speaker Nancy Pelosi and many in the media, there is no consensus in the scientific community about how much climate change, other than the normal cycles, is taking place, nor how severe it will be, and how much man-made CO2 is responsible. None of the climate models predicted the unexpected global cooling of the last decade.

It is known that the legislation will have a negligible effect on global CO2 emissions, particularly since the big polluters, such as China and India, are not playing ball. It is also known that the "cap and trade" system that the legislation calls for has been a failure in Europe, where it has been in operation for the last few years, in that it has proven to be far more costly than envisioned, has not met the CO2 reduction targets, and has been highly susceptible to corruption and abuse.

In addition, because the legislation requires Americans to use more inefficient energy (wind and solar) sources, it cannot help but raise costs for American businesses and citizens, and hence will kill jobs rather than create them (as contrasted to what Mr. Obama and Mrs. Pelosi have incorrectly claimed).

In sum, serious people understand the legislation will hurt the U.S. economy, reduce the standard of living and yet not accomplish its claimed intent; therefore, why were so many members of Congress willing to vote for it?

Are they idiots, or do they have another agenda? Yes, a few are not that bright, but many more see this as an opportunity to extract wealth from one group of Americans, give it to other groups of Americans they favor, and to their political cronies who will reward them in campaign contributions and in other ways — both seen and unseen. They are willing to engage in more tax oppression in exchange for more political power to themselves.

The tendency for political leaders — even those fairly elected — to look out more for their own personal interests rather than the greater good is not confined to America. The Organization for Cooperation and Development (OECD), whose 30 members are the major industrialized democratic countries, was formed half a century ago to promote policies to increase economic growth and free trade.

Unfortunately, political leaders in high-tax states (notably France and Germany) have captured part of the OECD and are using it as an instrument — by creating "black" and "gray" lists — to squash tax competition from low-tax-rate countries and financial freedom and privacy (which are important for global economic growth).

A European economic policy organization, Institut Constant de Rebecque, has just published an important study, "Tax burden and individual rights in the OECD: an international comparison." As part of the study, the author, Pierre Bessard, created a Tax Oppression Index by using OECD and World Bank data to measure the overall tax burden, public governance, and taxpayer rights. Italy and Turkey were judged to have the most tax oppression, while Austria, Luxembourg and Switzerland were judged to have the least oppressive tax systems. A sample of the major countries in the index can be seen in the accompanying table.

Those who advocate bigger governments and more repressive tax systems claim that the additional tax revenue is needed to promote the common good. In 2007, the government spending in Switzerland was equal to 35.7 percent of GDP (very close to the government share of GDP in the United States of 37.4 percent) while the Italians had a government sector equal to 48.5 percent of GDP.

The Italians and the Swiss share a long peaceful border, but Italy is far richer in natural resources and access to the sea than land locked Switzerland. Yet the Swiss are far more prosperous and do a much better job in delivering government services than do the Italians (or French with 52.4 percent of government spending) while, at the same time, engage in far less tax repression. The Austrian government spends 48.2 of its GDP, which is almost equal the size of the Italian government spending, but manages to raise the necessary tax money in a far less oppressive way.

The United States is in about the middle of the pack, but could have a lower score if it improved its public governance by reducing the corruption and inefficiency in Washington, and did a much better job in protecting taxpayer rights. (The U.S. Constitution explicitly gives citizens the presumption of innocence, but the Internal Revenue Service chooses to ignore the Constitution in this and many other matters.)

The world would be richer and more just if the low-tax-rate countries that protect taxpayer rights and privacy could penalize the states that engage in high levels of tax oppression, rather than vice versa, which is now the case.

The empirical evidence from the new Institut Constant study clearly shows (as have many other studies) that it is not necessary to have high tax rates or deny taxpayers basic rights and financial privacy for the government to obtain all of the revenue it legitimately needs. But as the vote on the "climate" (tax) bill in the Congress clearly showed last week, for all too many politicians, tax policy is not about revenue but political power and control.

The actual Corporate Average Fuel Economy (CAFE) results will depend on the mixture of fuel-thrifty and fuel-thirsty vehicles consumers choose to buy from each manufacturer — not on what producers hope to sell. That means only those companies most successful in selling the smallest cars with the smallest engines will, in the future, be allowed to sell the more profitable larger pickups and SUVs and more powerful luxury and sports cars.

Sales of Toyota's Prius, Yaris, Corolla and Scion, for example, allow and encourage Toyota to market more Lexus 460s, Sequoia SUVs and Tundra pickups in the U.S. without incurring fines. Hyundai's success selling Accent and Elantra compacts allows it to sell 368-horsepower Genesis sedans.

Similarly, Ford has the Toyota-licensed hybrid Fusion and will soon produce the European Ford Fiesta in Mexico. Chrysler will soon have Fiats. But what does GM have?

No independent reviewer suggests that the Chevy Aveo and Cobalt are credible contenders in the small car field. Even the president's auto task force finds the electric Chevy Volt "unviable," since it will lose money unless priced above a Cadillac CTS. The Opel-engineered 2011 Chevy Cruze will face tough competition from Asian cars whose reliability is better established. Launching such new models will be even tougher in the future, now that GM has lost control of Opel.

GM accounted for about 19% of vehicle sales so far this year, but the company had a much smaller share of the market for small cars and SUVs (which accounted for 20% of total sales through May). To continue offering a Toyota-like array of larger cars and trucks under ever-tighter CAFE rules, GM would have to capture a much larger share of the market for small and/or diesel-powered vehicles. Unfortunately, European and Asian car makers have decades more experience building reliable subcompact cars and diesel engines for their local markets — where consumers face steep taxes on gasoline and large engines.

General Motors does produce competitive cars and trucks, but not one of them is small. Consumer Reports recommends three GM cars and three GM trucks. The recommended cars are the Chevy Malibu (the unrecommended hybrid has been dropped), the large Buick Lucerne and the Cadillac DTS. Consumer Reports recommends the Chevy Avalanche and Silverado and the GMC Sierra trucks. Car enthusiast magazines insist on adding Camaro, Corvette and the 556-horsepower Cadillac CTS-V to that list.

Among those nine best GM vehicles, only the four-cylinder Malibu achieved as much as 25 mpg in Consumer Reports testing. The others get 12-17 mpg, yet they are no less fuel-efficient than comparable foreign brands. The Environmental Protection Agency rates the mileage of the Toyota Sienna van and Nissan Titan pickup as worst in their class, and comparable Chevys as best. Unlike GM, however, Japanese car companies sell enough small cars to offset the large and thus hold down the average figures.

General Motors is likely to become profitable only if it is allowed to specialize in what it does best — namely, midsize and large sedans, sports cars, pickup trucks and SUVs. The company can't possibly afford to scrap billions of dollars of equipment used to produce its best vehicles simply to please politicians who would rather see GM start from scratch, wasting more taxpayer money on "retooling" to produce unwanted and unprofitable subcompacts and electric cars. The average mileage of GM's future cars won't matter if nobody buys them.

Politicians are addicted to CAFE standards because they create an illusion of doing something sometime in the future without voters experiencing the slightest inconvenience in the present. Tighter future CAFE rules will have no effect at all on the type of vehicles we choose to buy. Their only effect will be to compel us to buy larger and more powerful vehicles from foreign manufacturers. Americans will still buy Jaguars, but from an Indian firm, Tata, rather than Ford. They'll buy Hummers, but from a Chinese firm, Tengzhong, rather than GM. The whole game is a charade; symbolism without substance.

As a matter of practical politics, rescuing GM from strangulation by CAFE will require offering economically literate environmentalists a greener alternative, i.e., one that works. Luckily, the government has two policy tools that, with minor modifications, really could discourage people from buying the least fuel-efficient vehicles.

One is the federal excise tax on "gas guzzlers," which could take some fun out of the horsepower race except that it applies only to cars, not to SUVS, vans and trucks. Why not apply this tax to all types of gas guzzling vehicles? Owners of trucks used for business could deduct the tax in proportion to miles used for business, as they do with other vehicular expenses. Phase it in after 2011 to encourage buyers to snap up the unsold inventory of gas guzzling trucks quickly — a timely "stimulus plan."

Second, the federal fuel tax is highest on the most efficient fuel (diesel) and below zero on the least efficient fuel (ethanol). Cars get about 30% better mileage on diesel than on gasoline, and cars running mainly on gasoline get about 30% better mileage than they would using 85% ethanol.

To stop distorting consumer choices, simply apply the same 24-cent-a-gallon federal tax to gasoline and ethanol as we do to diesel. This would add funds to the depleted federal highway trust. More importantly, it would remove an irrational tax penalty on buying diesel-powered cars — arguably the most cost-effective way to improve mileage without reducing car size or performance.

These two proposals are a greener alternative to CAFE, because they'll work. But they'll only work if Congress totally and permanently abandons the charade of CAFE. It is arguably worthwhile to accept a modest tax increase in exchange for an end to harmful regulations, but that exchange is effective precisely because it is not painless.

Unifying fuel taxes and broadening the excise tax on gas guzzlers makes sense as an alternative to CAFE. Otherwise it's just more pain with no gain.

If politicians insist on tightening fleet average mileage standards for bankrupt auto companies, how could those rules be enforced? The only penalty for violating CAFE rules is a big fine. If consumers keep refusing to buy enough small cars from GM and Chrysler to allow them to meet the CAFE rules, how are those companies expected to pay the fines?

The government is already planning to spend about $50 billion bailing out General Motors plus $7 billion for Chrysler. Will President Barack Obama provide Detroit auto makers with even more subsidies to pay CAFE fines?

Maybe so. That would be only slightly more bizarre than current plans to bribe folks with $4,500 to sell their "clunkers," or to offer huge tax credits to those rich enough to buy a $73,000 hybrid Cadillac Escalade or an $88,000 Fisker Karma.

The bottom line is that CAFE standards are totally unenforceable and ineffective. Regardless of how much damage the rules do to GM and Chrysler, Americans can and will continue to buy big and fast vehicles from German, Japanese, Korean, Chinese and Indian car companies. CAFE standards might just be another foolhardy regulatory nuisance — were it not for the fact that they could easily prove fatally dangerous for any auto maker overly dependent on the uniquely overregulated U.S. market.

And it gets even better. Not content to tempt political fate by imposing huge carbon taxes on the American middle class, Democrats have added a provision which imposes stiff tariffs on our trading partners if they don't adopt aggressive carbon restrictions of their own.

You heard correctly: progressives have authored a bill that earns the mortal enmity of domestic energy consumers and our most crucial trading partners at the same time. Economy-killing climate policies and a trade war — together at last!

What happened is this: An early draft of Waxman-Markey already contained triggers that gave the president the choice to introduce carbon tariffs if jobs and industry "leak" overseas to countries that don't constrain emissions so dramatically. (China and India come to mind.) The original version empowered the president to impose the carbon-linked tariffs beginning in 2025.

But though the language is not public yet, the House Ways and Means Committee is reportedly considering provisions that will give extra comfort to protectionists. Leaks from Hill offices indicate that the president would now be forced to impose the carbon tariffs — and could only opt out of doing so with permission from both chambers of Congress. Carbon-intensive imports would be subject to penalties at the border unless the country of origin requires emission reduction measures at least 80 percent as costly as ours. (The original Waxman-Markey bill had a threshold of 60 percent.)

Unfortunately for the amendment's authors, World Trade Organization rules make fairly clear that trade-limiting measures imposed to protect the environment should have the purpose of protecting the environment, and not to address any adverse competitiveness effects on domestic industry. Break that connection between measure and purpose, and you've got yourself a problem. The result could be litigation, retaliatory tariffs, or both. Does anyone really expect China to stand idly by in 2025 as their trade is embargoed?

And just for the sake of discussion, exactly how much global warming will be prevented by this assurance of future trade turmoil? Well, let's use the federal government's own model which — we are not making this up — is called MAGGIC (Model for the Assessment of Greenhouse-gas Induced Climate Change). It comes from the National Center for Atmospheric Research in Boulder, Colorado.

Let's compare the effects of Waxman-Markey to the United Nations' "business-as-usual" emissions scenario that's in their big 2007 climate change compendium. If the U.S. only adopts Waxman-Markey, global warming would be reduced by a grand total of 0.2ºF by 2100. This is too small to even detect, because global temperatures bounce around by about this amount every year. For those who like to think more near-term, the amount of warming prevented by 2050 would be 0.07 of a degree.

According to the UN, without Waxman-Markey the warming from 1990 to 2050 would be 2.8ºF, and 5.3º by 2100. (Of course, observed warming since 1990 is running about 40 percent below the expected rate, largely because there hasn't been any net warming since the very warm year of 1998.)

Now, let's be completely unrealistic and assume that every nation that has "obligations" under the (failed) Kyoto Protocol cuts emissions as much as we do. Then the saved warming balloons all the way to 0.14ºF by 2050 and 0.4º by 2100, or 5 and 7 percent, respectively, of the "business-as-usual" total.

Let's add it all up. We don't do anything measurable to reduce global warming, we alienate some of our biggest trade partners, we risk a trade war, and Americans are allowed to emit the same carbon volumes as the average citizen did in 1867. What's not to hate?

All of which explains why Waxman-Markey is being rushed to the floor. If people find out what is really in it, how risky it is and how small the purported benefits, it is hard to believe that it will pass.

Ethanol is sustainable by definition. The CO2 sequestered by growing corn is exactly offset by the CO2 emissions that follow from burning the fuel in a car. The same observation applies to, say, drinking bourbon made from corn.

Are CO2 emissions due to operating an automobile any worse than emissions due to digestion? The only difference is that ethanol can replace gasoline—bourbon cannot. Hence, a logical sustainability standard would be tougher on bourbon and all other products made from corn —products that can negatively impact health, like beef, bacon, butter, Buffalo wings etc. – and a lot easier on ethanol which is more greenhouse-friendly than other corn-based products and saves lives by powering ambulances to hospitals.

The EPA's sustainability standard is based on "life-cycle accounting" (LCA), a "well to wheel" measure of greenhouse gas emissions in the production of gasoline and a "field to fuel tank" measure for ethanol production. While attractive in theory, LCA fails to recognize that if incentives are given for ethanol producers to use relatively "clean" inputs (e.g., natural gas and land previously used for soybean cultivation), the "dirtier" inputs (e.g., coal and land previously dedicated to rainforests) that might otherwise have been used will simply be used by other producers to make products not covered by the sustainability standard.

In short, sustainability standards reshuffle who is using what inputs with no net reduction in national emissions. LCA measures are therefore misleading and may not measure the actual greenhouse gas emissions saved by ethanol production.

Rather than try to get LCA right, the entire exercise should be scuttled altogether. The difficulties associated with a sensible calculation are simply too great.

LCA assumes, for instance, that ethanol will replace gasoline, but it may actually replace coal or other energy sources, especially since oil supply is generally thought of as "finite" while coal is considered "unlimited in supply." This is not simply a matter of theory. In developing countries like Brazil, electricity is generated by harnessing leftover sugar cane, thereby potentially replacing coal-based electricity. It is also possible for biofuels to replace wood currently used for home cooking and heating, both of which impose huge health and environmental costs in developing countries. The upshot is that LCA will almost certainly undercount the greenhouse gas emissions that are "saved" by ethanol as well as other problematic air emissions.

Nor is LCA any easier when we apply it to the oil sector. The direct and indirect effects of oil pollution in the Ecuadorian jungle, for instance, would have to be measured, as would the environmental impacts of site specific drilling everywhere else on the globe.

To make matters worse, the argument over sustainability standards diverts attention from the contradictory and wasteful stew of federal ethanol policies – import tariffs, tax credits, mandates and production subsidies – which exist whether ethanol is sustainable or not. Our research shows that these policies generate tens of billions of dollars per annum of economic inefficiencies. Ensuring that ethanol is "sustainable" does not make those costs disappear. To just take one example, combining a tax credit for ethanol with a binding mandate requiring a minimum level of consumption will subsidize gasoline consumption instead of ethanol consumption, resulting in an increase in CO2 emissions, traffic congestion, and dependence on foreign oil.

Sustainability standards for ethanol make no sense. If we want to tackle greenhouse gas emissions, the most efficient means of doing so it to impose a carbon tax (explicitly through the tax code or implicitly with a cap & trade emissions program) on oil and natural gas at the refinery, coal at the plant using the coal, and land at time of conversion into the production of biofuels, bourbon, shopping malls, etc. That covers all of the relevant sectors of the economy in a fair and efficient manner. "Fair" and "efficient," however, are not words one would use to describe sustainability standards for ethanol.

If the proposed fuel efficiency standards were in place today, Edmunds.com reports that only two cars — the 2010 Toyota Prius (50 mpg) and the 2009 Honda Civic Hybrid (42 mpg) — would meet the standard. Angry environmentalists might thus find themselves key-scratching "gas guzzlers" such as the 2009 Honda Fit (31 mpg), the 2009 Mini Cooper (32 mpg) and the 2009 Smart ForTwo (36 mpg).

There is little dispute that, as a consequence, cars would become more expensive and industry profits more scarce. Even the Obama administration concedes that automotive costs would increase by $600 per car on average and that industry revenues would decline by $13 billion to $20 billion a year. Others offer larger figures, but it's difficult to peg costs with any certainty.

What do we gain by this? Very little.

We wouldn't reduce our reliance on foreign oil: If we reduced global demand for crude oil, the most expensive-to-produce oil would go away first, and that oil is not in the Middle East. It's in North America.

Consumers would not be better off: If gasoline prices remained in today's neighborhood (that is, near their historical average, adjusted for inflation), the fuel savings from these new hybrids would not offset the higher sticker prices.

Moreover, many consumers would be forced to buy cars they don't want.

Greenhouse gas emissions might not decline much, if at all. U.S. emissions would likely decline, but reduced U.S. demand for crude would mean reduced global crude prices, which in turn would increase demand for — and consumption of — oil outside the USA. Eventually, most if not all our reductions might be offset by increases elsewhere.

Finally, drivers and passengers would be less safe. Plenty of hard evidence suggests that smaller, lighter cars equal more highway injuries and fatalities.

Reduced fuel consumption is not an end unto itself. It is a means to an end. These means wouldn't achieve the advertised ends.

The politics of global warming are becoming increasingly disconnected from the people. Day after day, hour after hour, telescreens shout, "Go Green! Go Green!" Fewer and fewer people care.

On April 19, Rasmussen Reports released a new global warming poll: 48 percent of respondents believe that observed climate changes are being "caused by planetary trends," while 34 percent believe they are a result of human influence on the atmosphere. When Obama was sworn in, the relative numbers were 44 percent and 41 percent. Just three months ago, opinion was pretty much evenly split, and now there's a whopping 14 percent plurality in favor of "natural causes."

This is a change from bad to worse in the eyes of environmentalists. In January, Gallup found that, out of 20 prominent issues, Americans ranked global warming dead last in terms of importance. If the newer Rasmussen results are any guide, support has waned even further since then.

If the political class would have done its homework, it would have seen this coming. The incessant hype has generated a massive political backlash. It was first documented over a year ago in the refereed journal Risk Analysis, by Paul Kellstedt and two colleagues, political scientists at Texas A&M University.

The standard thinking is called the "knowledge deficit" model. That's academese for the notion that the poor blokes aren't concerned about global warming because they're just stupid and haven't heard enough about it. Obviously no one watches television any more (CNBC's peacock is green this week), walks outside in major urban downtowns (plastered with billboards and posters — from energy companies — urging their customers to use less of their products), or goes to the movies (The Day After Tomorrow, An Inconvenient Truth, Ice Age: The Meltdown, etc).

Actually, people still do go to the movies, and watch TV, and are assaulted every urban minute with global-warming propaganda. And, according to Kellstedt, the more people know about global warming, the less they care:

Contrary to the assumptions underlying the knowledge-deficit model, as well as the marketing of movies like Ice Age or An Inconvenient Truth, the effects of information on both concern for global warming and responsibility for it are exactly the opposite of what were expected.

Jon Gertner touched on this in last Sunday's New York Times Magazine. He noted that debate as to why climate change isn't higher up on the priority totem-pole usually is blamed on "the doubt-sowing remarks of climate-change skeptics," or "the poor communication skills of good scientists."

This prism has bent the light on global warming exactly wrong. In fact, it is the communication skills of scientists that are responsible for people's opinions. Kellstedt found that people "with high confidence in scientists . . . show less concern for global warming," as did the "more informed respondents." Americans' lack of alarm has less to do with "skeptics" than it does with people's perception of mainstream science.

Interestingly, this is parallel to other issues at the science-political nexus. Despite years of campaigning against genetically modified (GM) food on the part of many environmentalists, the more people learn, the less concerned they are about that, too.

Maybe this has to do with the fact that Americans have been consuming, in one form or another, GM food for decades, and we obviously aren't dead yet. Sober scientists note that GM foods are nutritionally indistinguishable from their progenitors — so when someone else loudly and angrily foretells disaster upon disaster that will befall us from the use of GM products, people say "so what?" And when they see some movie about the horrors of global warming — if they know that scientists observe that the planet's surface has been warming episodically and modestly for a century — they likewise say, "So what? It's a movie."

Washington would be well-advised to pay attention to what folks are telling pollsters out beyond the Beltway.

But it's Earth Day, so I expect the response of the political class here will likewise be, "So what?"

Not surprisingly, the United Nations has just jumped on President Obama's hybrid bandwagon, demanding yet another trillion dollars (coming mostly from you-know-who) to fund "A Global Green New Deal for Sustainable Development." Translation: The U.S. will provide funds to poorer nations so that they, too, can tell their private companies what to make, whom to employ, and how much to pay them. The U.N. wants your money pronto, by the end of next year.

The U.N.'s "deal" really amounts to drastic interference in the development of other nations that are neither recipients of nor contributors to the cool Trillion. India's Tata Motors has just unveiled a $2,000 mini-car, which could be a hit in a lot of poor countries. China's Cherry is poised for a global pounce as soon as liquidity reappears. But the U.N. proposes to spend our money fighting "automobiles, which are environmentally harmful," promoting instead a "shift to clean public transport" which they then call "clean fuel buses."

Huh? So the UN is hoping to close developing markets in poor countries to developing producers in countries a tier or two up the economic ladder, and then substitute a nonexistent technology?

Our researchers are still busy at work trying to figure out what a "clean fuel bus" is. It can't be one run on ethanol, because that takes more energy to produce than we currently get out of it. If it's run on electricity produced by solar panels, the physics become daunting. An array required to run just one bus for 100 miles per day would stretch over ten miles. And where would the energy come from at night?

Like Obama's initiatives, the U.N.'s purpose is to provide "green jobs." Nothing new here. Germany put in a similar program a few years ago, sending out an army of people otherwise employed or not employed to install solar panels. German taxpayers subsidized each of these 35,000 jobs at $170,000 apiece. Now the UN wants to do the same with your money — all over the world.

Worse still, the "Green New Deal" wants energy subsidies from you — called global "feed-in tariffs" — to boost inefficient energy sources. This reverse tariff would "overcome" the "difficulty" of noncompetitive energy, providing guaranteed purchase prices to producers in developing countries for a period of 20 years. The electricity would then be sold to final consumers at a lower price.

What's the difference between a "feed-in" tariff and a real one? There isn't one. It basically says that anyone who has cheaper electricity for sale across national borders need not apply. As is the case with Obama's cap-and-trade energy taxes here in the States, the U.N. says their tax on us is "desirable on climate-related grounds."

Nothing is new here. The U.N. is hoping for more green stimulus from an already overstimulating and intrusive president, and returning more of the same: higher taxes, and technologies that won't work and that will cost a fortune.

In addition, with the U.S. Federal Reserve System greatly expanding the money supply - which will continue because of the explosion in government spending - the dollar is falling against other currencies; and given that global oil is priced in dollars, the price of oil will rise in dollar terms, just as it did two years ago.

About 65 percent of the demand for global oil can be supplied at a price of $35 per barrel. Another 20 percent of demand can be supplied at a price of $35 to $60 per barrel, but the remaining 15 percent will only be supplied over the long run at prices of $60 to perhaps $130 per barrel. Oil, like all commodities, is priced at the margin, which means the price of all oil demanded by the market is equal to the price that producers can get for the last barrel of oil they sell.

It takes considerable time to greatly increase oil production, and it also takes time to reduce production. Despite the global recession, oil production capacity is only slightly above demand, so that any significant supply disruption - a war in an oil-producing area, pipelines being blown up or tankers sunk, etc. - will almost immediately create a supply shock, causing the oil price to soar again.

Because of the drop in oil prices during the last eight months, high-cost production facilities are being shut down, including low-output wells, some offshore production, Canadian oil sands, etc. When the oil price shoots back up, it will take time to get these production facilities back on line.

Oil prices will almost certainly be much higher in real terms (inflation adjusted) during the next 15 years because world energy demand is expected to increase at an average annual rate of 1.6 percent between now and 2030. More than 80 percent of the increase in energy demand during the next two decades is expected to come from China, India and the Middle East.

Low-cost oil production is declining sharply, as the old easy-to-produce fields are being rapidly depleted. There are still huge potential oil supplies, but most of it will be in very expensive, deep-sea areas, or in oil sands (Canada) or oil shale (Colorado, Wyoming, Utah), all of which are much more costly to produce. Biofuels are also expensive and compete with food for land on which to produce them.

If suddenly it were announced that a miracle electric battery - one that could power a full-sized automobile at high speed for more than 300 miles and could be quickly recharged - had been developed, what impact do you think it would have on the price of gasoline next week? The answer is probably none because it would take several years for the manufacturers of automobiles to switch over completely to battery-powered ones, and then another decade or so before most of the existing stock of automobiles would be battery powered.

In the long run, improved battery technology will probably reduce the demand for liquid fossil fuels, but even under the most optimistic scenario, the dependence on oil will last a couple or more decades.

As vehicles eventually move from liquid fossil fuels to electricity, the demand for liquid petroleum will drop, but the demand for electricity will greatly increase. The environmentalists and many in the political class like to talk about "renewables" meeting the demand. A nice notion, but at best it is not going to happen for decades. As the chart shows, wind, solar and geothermal are less than 3 percent of total energy supply. They all still need to be heavily subsidized because they are not economical and probably will not be for many years.

Hence, even at high-growth rates, they will only supply a small percentage of total energy needs in the next two decades.

When oil prices soared a couple of years ago, the Bush administration moved to open up government lands and certain offshore areas for more oil exploration and production. Officials in the new Obama administration are now in the process of again locking up these areas to prevent oil production.

If the Obama administration is right in its forecast that the economy will be growing again by the end of this year - which is probably even more true for the world economy - the demand for oil will be rising rapidly again. Yet much production has been shut down because of the recession, and potential future supply inside the U.S. is being restricted by government action.

The result should be obvious - gasoline at the pump will be at least $3, if not $4 or more. Americans will still be hurting as a result of the recession, so many of them will be most unhappy to see the prices soar again.

Given that many in the political class seem to think the long run is the next five minutes, they do not see or want to see this tsunami coming. Many politicos will try to blame the high prices on "greedy oil companies" or laggard automobile executives rather than to look in the mirror and see the shortsighted demagogues whose policies led to the mess.

Several Cato Institute studies have called for privatization of the public lands, but this idea is strongly resisted by environmentalists, recreationists, and other users of public land. An alternative policy that will both enhance the values sought by environmentalists and improve the fiscal management of the lands is to 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.

Fiduciary trusts are based on hundreds of years of British and American common law that ensures that trustees preserve and protect the value of the resources they manage, keep them productive, and disclose the full costs and benefits of their management. For trust law to apply, public land trusts must be based on a law written by Congress that clearly defines the trustees, the beneficiaries, and a specific mission or missions for the trusts.

Congress should create two types of trusts. Market trusts would have a mission of maximizing revenue while preserving the productive capacity of the land. To achieve this mission, Congress should allow them to charge fair market value for all resources. Nonmarket trusts would have a mission of maximizing the preservation and, as appropriate, restoration of natural ecosystems and cultural resources on the public lands.

Each pair of market and nonmarket trusts would jointly manage all federal lands in one of about a hundred ecoregions. Each ecoregion would have about 5 to 10 million acres of federal land that might include forests, parks, refuges, and other public lands. Trustees would be elected by a friends' association that anyone would be welcome to join. Trusts would be funded out of the user fees they collect, with some retained by the market trust and some given to the nonmarket trust. In some cases, excess user fees would be returned to the U.S. Treasury.

The trust idea would significantly improve both fiscal and environmental management of the public lands. Congress should begin to implement this idea by testing it on selected national forests, parks, and other federal lands.

Because the 103 estimates come from only 28 studies and are therefore not really 103 independent estimates, Tol produces weighted estimates of the mean, mode, and median that proportionately reduce the weight given to multiple estimates from a given study. If a study produces one estimate of the mean, it gets a weight of one. If a study has seven estimates of the mean, they each get a weight of one seventh. Calculated this way, the median estimate for the cost of emitting a ton of carbon in those studies is $14. The mean estimate is $93 per ton. And the modal estimate is $2 per ton (all numbers rounded to the nearest dollar).

Tol then calculates estimates that vary the weight of each study along several subjective dimensions. Was the study peer reviewed? Was the study based on an independent impact assessment of climate change? Did the study rely on dynamic climate change scenarios? Was the study based on explicit economic scenarios? Did the study estimate marginal damage costs rather than average costs? Each "yes" to the above questions earned the study one point (meaning a 5-point study was given proportionally more weight than a 1-point study). He then gave each study an additional 0.1 point for each year in which the study was published since 1990, thus giving more weight to newer rather than older studies.

The median cost estimate for carbon emissions in Tol's quality-weighted data set is $16 per ton ($2 more than without quality weights). The mean estimate is $129 per ton ($36 more than without quality weights). The modal estimate remains at $2 per ton.

When Tol eliminated the studies that weren't peer reviewed, the median quality-weighted cost estimate fell to $14 per ton, the mean to $50 per ton, and the mode increased to $5 per ton.

The large difference between the mean and median estimates as well as the low modal estimate highlight the large variation in the carbon-cost estimates as well as a large "right-tail" in the distribution. That variation is explained for the most part by (1) the discount rate applied to future costs and benefits, and (2) the manner in which monetarized costs were aggregated across countries. That is, it's not so much that study x found high costs because the authors of study x concluded that sea level rise would be more economically devastating than, say, study z. It's that study x used a 1% discount rate for those future sea-level-rise costs while study z used, say, a 3% discount rate. And study x weighted damages in poorer countries more than in wealthier countries.

Tol reports that, if he removes those studies engaged in "equity weighting" from the dataset, median carbon emissions costs are $10 per ton. Mean costs are $90 per ton. Modal costs are $2 per ton. And when he removes studies from the dataset using a 1% or lower discount rate, he found that median carbon emissions costs were $7 per ton, mean $16 per ton, and mode $2 per ton.

"If we take all studies without discriminating between them, the best guess for the marginal damage costs of carbon dioxide emissions is $5 per ton," writes Tol, but "there are good reasons to discriminate between studies ... it appears that studies with better methods yield lower estimates with smaller uncertainties than do studies with worse methods. If one excludes the studies in the gray literature, the combined marginal damage cost estimate falls further, and so does its uncertainty. It seems as if the most pessimistic estimates of climate change impacts do not withstand a quality test."

Given that, what's the "best" guess available from the literature published through 2004? When asked that question by Danish statistician Bjorn Lomborg, the answer he gave was $2 a ton (an answer reported in Lomborg's book Cool It). $2 a ton is the most frequent value in the data, or mode. Because environmentalists worship at the alter of "consensus" when discussing the science of climate change, a similar emphasis on a show of hands in the economics professions suggests a modal — not a mean or median — calculation. Hence, we have been comfortable using Tol's $2 per ton figure when discussing what the economics literature has to say about the cost of carbon emissions.

In a recent on-line debate with Joe Romm, however, Tol's 2005 review of the literature was dismissed by Joe because it was old and has been superseded by more recent work; in particular, the IPCC's 4th assessment on climate change (published last year) and the Stern Review on the economics of climate change (released in 2006). More importantly, Tol updated his literature review last August — of which we were unaware — and, according to one blogger, "Taylor's quoting of old numbers that Tol has himself moved away from looks like cherry-picking and in any case will not convince anyone who has moved on from 2004."

So what does Tol report now?

Well, it's certainly true that the literature has expanded a bit. Nineteen studies have been published since Tol's 2005 paper and, as a consequence, there are now 108 new marginal cost estimates to consider. Yet this explosion of published work is somewhat misleading given that all of those studies are based upon only 12 underlying papers estimating the total costs of climate change, and only two of those studies were published since Tol's 2005 survey of the literature. The (raw unweighted) median estimate for the cost of emitting a ton of carbon from the 211 estimates in those studies is $29. The mean is $105 per ton. And the mode is $6 per ton (all numbers rounded to the nearest dollar). Those numbers are remarkably similar to the raw 2005 estimates of $26, $97, and $6 respectively.

If one thinks of the 211 estimates as a sample of data drawn from an unobserved population, what type of population is it? Is it normally distributed or something else? In his 2005 paper, Tol assumed normality. In his 2008 paper, Tol now considers three possible distributions: the normal distribution; the normal distribution with normalized standard deviations (standard deviation divided by the mean, which is also called coefficient of variation), and Fisher-Tippett (which, unlike the normal distribution, is skewed right). Given the right skew to the 2005 data (mean>median>mode), this would seem to be an obvious addition.

Table 1 summarizes the median, mean, mode, and standard deviation findings for each of these three probability density functions after Tol's 2005 quality-weights are applied to the 2008 data set. Standard deviations are also offered. Findings are then further subdivided based on discount rate, peer review, and publication date.

Some observations about Table 1.

First, the widely-held belief that recent studies argue that the costs of climate change will be higher than previously thought — an argument presented in the most recent IPCC report and by Joe Romm in our recent on-line exchange — is incorrect with one exception. That is the mode, median, and mean estimates of costs are highest in the oldest studies and lowest in the most recent studies. The one exception is the median estimate in the normal distribution using the coefficient of variation, which increases with time from $14 a ton to $16 and $17, but that change is very small.

Second, some of Tol's 2008 estimates are larger than his 2005 cost estimates and some are not. Recall that Tol's quality-weighted 2005 median, mean, and mode findings were $16, $129, and $2 per ton respectively. His 2008 cost estimate using the normal distribution (coefficient of variation) is lower: $15, $102, and $0 per ton respectively. The 2008 estimates using normal distribution (standard deviation) and Fisher-Tippett have higher medians, lower means, and higher modes: $47, $88, and $33 and $74, $127 and $35, respectively.

Third, just as in 2005, the "better" (peer reviewed) studies in the literature produce lower cost estimates relative to non peer reviewed studies with the exception of the mode in the normal (coefficient of variation), which rises from $0 to $3.

Fourth, just as in 2005, large cost estimates flow from low discount rates (pure rate of time preference) and low cost estimates flow from higher rates of pure time preference.

The contention that Tol has "moved away" from his 2005 numbers is literally true. The most important difference between Tol 2008 and Tol 2005 is that Tol 2008 considers three probability density functions rather than the one employed in Tol 2005. Two of those three probability density functions report more varied (higher and lower) cost estimates than those reported in Tol 2005.

Tol argues in his 2008 paper that the social cost of carbon emissions is positive, that there is so much uncertainty regarding costs that "a considerable risk premium is warranted," and that, consequently, "greenhouse gas emission reduction today is justified." Those declarations did not appear in his 2005 paper, but they are not inconsistent with the findings of that paper. There is a difference, of course, between a discussion about the social cost of carbon emissions and a discussion about appropriate carbon taxes. The former informs but does not dictate the latter. Tol 2005 discussed only the former. Tol 2008 discusses primarily the former but briefly touches on the latter as well.

Regardless, one can embrace the findings of Tol's meta-analysis without embracing Tol's interpretation of how best to translate that meta-analysis into public policy. The literature suggests that the social cost of carbon emissions is likely positive, but that alone does not justify a carbon tax. If the social cost is only a few dollars a ton, the political and economic transaction costs associated with imposing a carbon tax would likely exceed the benefits. Moreover, there may be less expensive ways of reducing harm than imposing carbon taxes or emission trading regimes. Uncertainties there may be, but if we discount the future by 3 percent annually (a discount rate that seems appropriate given opportunity costs), the high-cost scenarios that so heavily weight these analyses vanish into thin air. That's because most of the damages associated with climate change will occur many decades in the future and even small differences regarding the economic impact of those damages produces highly variant estimates. Discount the future, however, and the (economic) importance of those disagreements all but disappears.

So what does Tol 2008 tell us about the social cost of carbon emissions (assuming that the underlying science from the IPCC is correct)? Given our skepticism about the underlying logic of discount rates of 1% or less, any number between $3 per ton and $24 per ton seems defensible. The lower end of that distribution would seem to be more reasonable, however, keeping in mind that the better and more recent studies produce lower cost estimates than do others.

Al Gore himself descends on Wednesday to personally bless the conclave's work product — which, based on past history, we can be assured will range somewhere between flawed, fraudulent, and downright farcical.

Kyoto was supposed to reduce global emissions of carbon dioxide below 1990 levels during the period 2008–2012. But, since it was signed, the atmospheric concentration of this putative pollutant continued to rise, pretty much at the same rate it did before Kyoto. Incidentally, even if the world had lived up to the letter of the Kyoto law, the effect on global temperature would have been too small to measure.

The purpose of the Poznan meeting is to work out some type of framework that goes "beyond Kyoto." After completely failing in its first attempt to limit carbon dioxide emissions internationally, the U.N. will propose reductions even greater than those Kyoto required. Kyoto failed because it was too expensive. Anything "beyond" it will cost that much more, and is even less likely to succeed.

Besides, the world cannot afford any expensive climate policies now. Economic conditions are so bad that carbon-dioxide emissions — the byproduct of our commerce (not to mention our respiration) — are likely falling because of the financial chill, not the climatic one. Indeed, a permanent economic ice age would likely result from any mandated large cuts in emissions.

And, before proposing an even harsher treaty, the U.N. ought to pay attention to its own climate science. It regularly publishes temperature histories from its Intergovernmental Panel on Climate Change (IPCC), which was formed in the late 1980s with the express charge of finding a scientific basis for a global climate treaty.

Since Kyoto in December 1996, a very funny thing has happened to global temperatures: IPCC data clearly show that warming has stopped, even though its computer models said such a thing could not happen.

According to the IPCC, the world reached its high-temperature mark in 1998, thanks to a big "El Niño," which is a temporary warming of the tropical Pacific Ocean that occurs once or twice a decade. El Niño years are usually followed by one or two relatively cold years, as occurred in 1999 and 2000. No one knows what really causes these cycles but they have been going on sporadically for millennia.

Wait a minute. Starting an argument about global warming in 1998 is a bit unfair. After all, that's starting off with a very hot temperature, followed by two relatively cool years.

Fine. Take those years out of the record and there's still no statistically significant warming between 1997 and 2007. When a scientist tells you that some trend is not "significant," he or she is saying that it cannot mathematically be distinguished from no trend whatsoever.

More importantly, there's not going to be any significant trend for some time. Assume, magically, that temperatures begin to warm in 2009 at the rate they were warming before the mid 1990s, and that they continue to warm at that rate. The world has to warm in such a fashion through 2020 before there's a significant trend reestablished in the data. That's a full quarter century for any discernable trend of global warming to emerge.

That, however, is not what the U.N.'s own models show. The IPCC's latest (2007) compendium on climate used 21 different climate models to forecast the future, and subjected each to different "storylines" (in the U.N.'s parlance) for global emissions of carbon dioxide. They are there for the world to see, on page 763 of the volume on climate science. Not one of them predicts a quarter century without warming — even under a scenario in which emissions increase more slowly than they already are.

The U.N.'s own climate models have failed barely a year after they were made public. They have demonstrated a remarkable inability to even "predict" the present. Will 10,000 people in Poznan somehow ignore this?

They shouldn't. Instead they should be thankful. The lack of recent and future warming almost certainly means that the ultimate warming of this century is going to be quite modest. And they should keep in mind that expensive policies to fight a modest climate change will only worsen the cold snap currently affecting the global economy.

This Policy Analysis reviews the academic literature relevant to these matters and argues that the prevailing policy proposals are premised on a misunderstanding of energy economics and market realities. The interventionists do not distinguish between problems that government can remedy and those that it cannot. They ignore lessons that should have been learned from past experience. They embrace at best second- and third-best remedies rather than first-best remedies for the alleged problems. Moreover, they ignore the extreme difficulty associated with ensuring efficient policy response even when it seems to be theoretically warranted.

Fear of oil imports is premised on pernicious myths that have long distorted energy policy. The U.S. defense posture probably would not be altered by reducing the extent to which oil is imported from troublesome regions. Fears about a near-term peak in global oil production are unwarranted, and government cannot help markets to respond properly even if the alarm proved correct. Market actors will produce the capital necessary for needed investments; no "Marshall Plans" are necessary. Price signals will efficiently order consumer behavior; energy-consumption mandates are therefore both unwise and unnecessary. Finally, more caution is needed regarding the case for public action to address global warming.

The omnipresent calls for more aggressive energy diplomacy are misguided. Economic theory validated by historical experience implies that the diplomatic initiatives are exercises in futility because they seek to divert countries from the wealth maximization that is their goal. Similarly, the search for favorable access to crude oil is futile. Despite their popularity, rules to force reductions in energy use lack economic justification. Attacks on American oil companies and speculators seek to shift blame to those subject to U.S. government control from the uncontrollable foreign oil-producing governments that are truly to blame.

Before trying one more time, legislators should ask why they favor a policy so politically correct and so economically suspect. Support for a national program largely stems from misleading claims about state-level successes, misunderstandings about how renewables interact with other environmental regulation, and misinformation about the actual benefits renewables create.

State RPS programs are largely in disarray, and even the apparently successful ones have had little impact. California's supposedly aggressive program has left it with the same percentage of renewable power as in 1998, and Texas's seemingly impressive wind turbine investments produce only two percent of its electricity. The public may envision solar collectors but wind accounts for almost all of the growth in renewable power, and it largely survives on favorable tax treatment. Wind's intermittency reduces its efficacy in carbon control because it requires extra conventional generation reserves. Computer-generated predictions about a national RPS are generally unreliable, but they show that with or without one the great majority of generation investments for the next several decades will be fossil-fueled.

Even without the technological and environmental shortcomings of renewables, the case for a national RPS is economically flawed. Emissions policies are moving toward efficient market-based trading systems and more rational setting of standards. A national RPS clashes with principles of efficient environmental policy because it is a technological requirement that applies to a single industry. Arguments that a national RPS will create jobs, mitigate energy price risks, improve national security and make the United Sates more competitive internationally are in the main restatements of elementary economic fallacies. It is hard to imagine a program that delivers as little in theory as a national RPS, and the experiences of the states indicate that it delivers equally little in practice.

Thus, the case for government promotion of alternative energy depends solely on the existence of inaccurate price signals in energy markets. Many argue that the cost of environmental pollution is not reflected in the price of energy. But governments aggressively regulate environmental emissions affecting air, land, and water quality. Those regulations impose costs that are then passed on to consumers. George Mason University economist John Nye persuasively argues that existing empirical work is incapable of telling us whether energy prices are "wrong" or, if so, how wrong they might be.¹

Are the environmental regulatory costs embedded in final energy prices greater than, less than, or equal to the environmental damages imposed by energy consumption? No one knows for sure. Estimates of the environmental damages associated with energy consumption vary widely because health and medical professionals remain uncertain about the implications of long-term exposure to small concentrations of pollutants.² Vanderbilt regulatory specialist W. Kip Viscusi, however, has found that — if we accept EPA assessments of these matters — oil prices fully reflect environmental costs, natural gas prices are overly high given the disparity between the external environmental costs associated with gas consumption and the regulations in place to control those emissions, and coal prices are too low because the regulations controlling coal emissions are not strict enough relative to the environmental damages that follow.³

Viscusi's findings are not definitive, however, because the EPA might well be wrong about the health effects of conventional pollutants. The literature provides plenty of evidence for those who want to argue that true environmental damages are higher or lower than EPA believes. And Viscusi doesn't consider greenhouse gas emissions in his calculations. But a recent survey of the literature by climate economist Richard Tol finds peer-reviewed estimates of the marginal impact of greenhouse gas emissions also vary widely because of scientific, technological, and socio-economic uncertainties about the future.⁴ Moreover, those widely disparate cost estimates are largely driven by different beliefs about how to best price (discount) impacts that will occur in the distant future.⁵

The argument that energy prices are wrong because they don't account for the national security costs associated with energy imports is even weaker.⁶ While it is probably true that U.S. military expenditures would be lower were the Pentagon not charged with the task of protecting friendly oil producing states and international oil shipping lanes, those expenditures are unnecessary. If the U.S. didn't provide oil security services for oil producers, oil producers would provide those services themselves as long as the marginal benefit of oil security expenditures exceeded the marginal benefits associated with alternative expenditures.

A separate national security issue is whether money spent on oil abroad worsens the problem of international terrorism. Conventional wisdom would answer yes, but we have analyzed the data and concluded there is zero correlation — none! — between oil profits and either the number of fatalities or the number of attacks from Islamic terrorists. Oil revenues fatten the coffers of anti-American regimes abroad, but there is no relationship between oil profits and anti-American actions from hostile states.

Finally, some argue that the reliance on imports leaves America vulnerable to embargoes. But once oil leaves the territory of the oil producer market agents — not the producer — decide where the oil goes. Fears of producer blackmail are greatly overblown because oil producing economies are far less diversified than oil consuming economies. For example, 85 percent of Iran's government revenue comes from the oil sector whereas only about 3 percent of U.S. disposable income is spent on oil and gas.7 Unilateral production cut-backs to achieve foreign policy goals would prove far more economically harmful to producers than to consumers.

Even if we think that prices for conventional energy are too low because they don't account for environmental or national security externalities, governmental intervention to promote alternative energy sources would not be the best remedy. Better would be an explicit or implicit tax on conventional energy to get prices "right." Correcting price signals allows the market rather than the government to pick industry winners.

Getting prices right would change the energy status quo but allow actors to find the best option through trial and error with their own money. We don't know whether alternative fuels (solar or wind), better controls on existing fuels (clean coal), a different mix of existing fuels (more nuclear), or energy conservation is more cost effective, and thus markets rather than government should decide. And even if we were confident about such things given the current state of knowledge, allowing markets to sort through the choices allows for a rapid change in investment patterns should technology change. Markets respond more quickly and more efficiently to changing economic conditions than do political or regulatory bodies.

If you are bullish about economics and future potential of alternative energy, then rigging the market to promote alternative energy is unnecessary. If you are more skeptical, then rigging energy markets to favor alternative energy is counterproductive. No school of serious thought, however, leads us to the conclusion that targeted assistance is the best policy.

This piece was submitted as the initial argument in a Google Knol debate. The full debate, including opposing arguments and rebuttal, can be found here.

1. John Nye, "The Pigou Problem," Regulation 31:2, Cato Institute, Summer 2008, pp. 32-37.
2. Thomas Sundqvist and Patrik Soderholm, "Valuing the Environmental Impacts of Electricity Generation: A Critical Survey," The Journal of Energy Literature 8:2, Oxford Institute for Energy Studies, December 2002, pp. 3-41.
3. W. Kip Viscusi, Wesley Magat, Alan Carlin, and Mark Dreyfus, "Environmentally Responsible Energy Pricing," The Energy Journal 15:2, Summer 1994, pp. 23-42.
4. Richard Tol, "The Marginal Damage Costs of Carbon Dioxide Emissions: An Assessment of the Uncertainties," Energy Policy 33, 2005, pp. 2064-2074.
5. Davis Weisbach and Cass Sunstein, "Climate Change and Discounting the Future: A Guide for the Perplexed," Working Paper 08-19, AEI Center for Regulatory and Market Studies, August 2008.
6. The best single academic treatment of this issue is Douglas Bohi and Michael Toman, The Economics of Energy Security (Boston: Kluwer Academic Publishers, 1996).
7. The Iranian data can be found in the CIA World Factbook under the Economy subheading for Iran . The U.S. data can be found in the National Income and Product Accounts Table 2.5.5 line 75 (gasoline and oil expenditures) and table 2.1 line 26 (disposable personal income)

Legislation proposed by both John McCain and Barack Obama will require that the cost of energy to become so high that people will avoid using it. The serious question is: why would we do this in the current economic environment? Why would we take away capital that people would otherwise use to invest in companies that produce efficient things when that capital is already being destroyed at an alarming rate?

Other nations that embraced the abject environmental failure known as the Kyoto Protocol and imposed higher energy costs are fleeing from climate change policies as their economies implode. Only the U.S. seems eager to commit economic suicide over global warming.

Kyoto did nothing measureable about climate change. Global carbon dioxide emissions rose by the same amount they were supposed to fall because of it. All it cost was money. Germany ‘s Chancellor Angela Merkel, who is probably the woman most responsible for the Protocol itself, now calls drastic cuts in carbon dioxide emissions, "ill-advised climate policy". Her foreign minister, Frank-Walter Steinmeier, who last year trotted the globe pronouncing global warming a grave threat to world peace, now says that "this crisis changes priorities" and that "interest in protecting the climate will change because of such a crisis".

A trip around the world (or around the country, or, for that matter, around your city) will demonstrate that economic vitality and environmental protection are highly correlated. The ritzy part of town is neat as a pin, where residents smugly buy (unverifiable) "carbon offsets" to assuage guilt about the four-wheel-drive behemoth, while bathed in compact-fluorescent light. In the poor neighborhoods of the world? Well, they're cooking indoors with wood or dung, they don't have a clue what a "carbon offset" or a compact-fluorescent is, and the power is out.

As economies suffer increasingly from global warming taxes and regulation, nations can descend from first-world energy infrastructure and supply to banana-republic like conditions, even without the current economic contraction.

The first place where this hell is likely to freeze over is going to be in Great Britain this winter. Residential energy costs average $600 per year over where they were a year ago. Britain's National Housing Administration estimates that 5.7 million British households will spend more than 10% of their income on fuel and energy next year.

Right now, wholesale power prices in Britain are four times what they are in France. Older coal and nuclear power plants have to be taken out of production for repair and refit. How do energy-intensive industries, such as cement, steel, and brickmaking compete in such an environment? They don't.

Green policies are sure to make this much, much worse. In large part because of European Union environmental directives, a full 37% of the U.K.'s electrical generation capacity will be lost by 2015, most of that from mandatory reduction of coal-fired plants. Imagine what percent of households will be spending 10% or more of their income on energy 2015.

Nor will the shortfall to be taken up by solar energy and windmills. Britain is a pretty cloudy place, it isn't all that big, and windmills produce no power when there is no wind. Last month, Cambridge Econometrics projected that less than 5% of Britain's total energy will come from these so-called "renewables" in 2020.

Before the current financial uncertainty, European governments and the EU environmental bureaucracy thought they could get away with all of this expensive unreality. But, as Angela Merkel and her Foreign Minister now admit, this is beginning to seem "ill advised."

All of this flags a much larger problem. The only way to reduce emissions enough to have a significant effect on our modest warming trend is to make energy so expensive that people can't afford it. But, as the current economic situation shows, when people can't afford it, these policies become "ill advised". Among other reasons, they are not advisable because they take away capital that is necessary for environmental protection.

The solution is obvious. Only when technologies are available that produce lower carbon dioxide emissions at a competitive price, will people and politicians really buy in. This requires investment—by individuals—of real money that is currently being confiscated and tilted at windmills. Expensive energy and a financial contraction can only delay this investment, perhaps forever. The United States and the United Kingdom would do well to pay attention to Germany's newly-found realism about global warming policy.

OK, it's pretty much standard rhetoric in Washington to say that if you don't do as I say, there will be massive consequences. But to say, as Gore recently did: "The survival of the United States of America as we know it is at risk;" and: "The future of human civilization is at stake" — that's a bit much, even for the most faded and jaded political junkie.

Here's how Gore works. He'll cite one scientific finding that shows what he wants, and then ignore other work that provides important context. Here's a list of his climate exaggerations from his well-publicized July 17 rant, along with a few sobering facts.

Gore: "Scientists . . . have warned that there is now a 75 percent chance that within five years the entire [North Polar] ice cap will completely disappear during the summer months."

Fact: The Arctic Ocean was much warmer than it is now for several millennia after the end of the last ice age. We know this because there are trees buried in the tundra along what is now the arctic shore. Those trees can be dated using standard analytical techniques that have been around for decades. According to Glen MacDonald of UCLA, the trees show that July temperatures could have been 5-13°F warmer from 9,000 to about 3,000 years ago than they were in the mid-20th century. The arctic ice cap had to have disappeared in most summers, and yet the polar bear survived!

Gore: "Our weather sure is getting strange, isn't it? There seem to be more tornadoes than in living memory. . . ."

Fact: The reason there "seems" to be more tornadoes is because of national coverage by Doppler radar, which can detect storms that were previously missed (not to mention that every backyard tornado winds up on YouTube nowadays). Naturally, the additions are weak ones that might, if lucky, tip over a cow. If there were a true increase in tornadoes, then we would see a definite upswing in severe ones, too. If anything, the historical record indicates a slight negative trend in the frequency of major tornadoes, based upon death statistics.

Gore: " . . . longer droughts . . . "

Hogwash. The U.S. drought history, given by the Palmer Drought Severity Index, is readily available and extends back to 1895. There's not a shred of evidence for "longer droughts" in recent decades. The longest ones were in the 1930s and 1950s, decades before "global warming" became "the climate crisis."

Gore: " . . . bigger downpours and record floods . . . "

It's true, U.S. annual rainfall has increased about 10 percent (three inches) in the last 100 years. But it's equally true that this is a net benefit. Temperatures haven't warmed nearly enough to increase the annual surface evaporation by the same amount, so what has resulted is a wetter country during the growing season. Farmers love this, because most of the nation runs a moisture deficit during the hot summer growing season. Increasing rain cuts that deficit.

Gore: "The leading experts predict that we have less than 10 years to make dramatic changes in our global warming pollution lest we lose our ability to ever recover from this environmental crisis."

This is likely James Hansen of NASA, Gore's climate guru. He has written and given sworn testimony that twenty feet of sea-level rise, caused by the rapid shedding of Greenland's ice, could happen by 2100. Why didn't Gore defer instead to the UN Intergovernmental Panel on Climate Change, an organization with at least a few hundred bona fide climate scientists? Its 2007 compendium estimates that the contribution of Greenland's ice to sea level during this century will be around two inches. Gore also forgot the embarrassing truth that there has been no net change in the planetary surface temperature, as measured both by thermometers and satellites, for the last ten years.

It would be easy to go on, particularly about the preposterousness of Gore's "solution," which is to produce all of our electricity from solar, wind and geothermal sources within ten years. I'll leave that for the energy economists to tear apart.

That's too bad, because I support the idea that climate change is an object worthy of public scrutiny, and, as a scientist, the only way I can scrutinize is with numbers.

Citizens may or may not believe climate change is all it's cracked up to be, and this might bother them, but I have to say it. The commission's climate-change goal is to cut greenhouse gas emissions by 30 percent by 2025. It's high time people see what they'll get for their money.

This is a 30 percent reduction from the total that would accrue if we did nothing -- that is, stayed on the same emissions trajectory we've been on for decades.

A 30-percent target sets Virginia's emissions back to the level they were at in the year 2000. Let's be charitable and say that people around the country think so highly of Virginia's ambitions that every state in the nation decides to mandate the same cuts. Let's be even more charitable and say that every nation on Earth that has obligations to reduce emissions under the 1997 Kyoto Protocol on global warming follows Virginia's lead. The protocol was an appendage to a 1992 United Nations' "framework" treaty of climate change.

Remember Kyoto? It would have reduced global emissions to about 5 percent below 1990 levels for the years 2008-2012. Instead, they rose at double-digit levels, and only two significant nations actually met their obligations: Germany and the United Kingdom. (Each for reasons that had much more to do with local economics than environmental stewardship.) According to figures from the U.S. Energy Information Administration, in 2000, the U.S. (which never ratified Kyoto) emitted roughly 10 percent more CO2 than its 1990 total.

That's a pretty standard figure across all Kyoto signatories with growing economies. So applying the Virginia plan to this group of nations actually does less than Kyoto because it takes the developed world also back to 2000, rather than to somewhere around 1985 (when emissions were about 5 percent below 1990 levels).

As early as 1998, scientists at the U.S. National Center for Atmospheric Research in Boulder, Colo., calculated how much global warming would be saved by full compliance with Kyoto. As a study published in the scientific journal Geophysical Research Letters found, that works out to 0.07 degrees C per half-century. That's right: not 7 degrees or even seven-tenths of a degree, but seven hundredths of a degree.

Adopting the Virginia plan across all Kyoto nations would result in about 72 percent of the emissions reductions of Kyoto itself by 2050, again according to data from the Energy Information Agency. That means a savings of five hundredths of a degree of warming by then, and 0.13 degrees by 2100 (which is 72 percent of the warming projected for Kyoto). The 2050 figure is about 20 times less than the mean annual temperature difference between downtown Richmond and suburban Short Pump.

No one will be able to identify the changes Virginia's policy makes in either state or global temperature histories, because temperatures vary naturally from year to year -- thanks to changes in the sun, El Nino oscillations in the tropics, and random volcanoes -- about as much as the Virginia plan would affect temperatures 100 years from now.

Incidentally, these figures assume that if atmospheric carbon dioxide is doubled, surface temperature will increase by 2.5 degrees C. The lack of any net global warming in the last decade, and recent projections published in Nature magazine indicating that there will be little, if any, through the middle of the next decade, argue that this number itself is probably too high. If that's true, the Virginia Commission goal will prevent even less warming.

It's hard to believe that any member of Virginia's commission really thinks he's doing much about global warming. And it's equally hard to believe that the members haven't made these numbers public.

They are now. People need to know that the proposed goal of the Governor's Commission on Climate Change will simply have no detectable effect on global warming. So what's the point?

When politicians enact anti-economic growth regulations and taxes, even in the name of "global warming," "environmentalism," and "fairness," they are, in fact, shortening the lives of many of their fellow citizens and those in other countries.

I do not pretend to know with much certainty whether the Earth will be much warmer at the end of this century and whether any increase in temperature that does occur will reduce or increase human life expectancies. But I do know the following with high confidence: The global warming alarmists told us 15 years ago that the Earth would be getting steadily warmer - yet, in fact, it has been getting cooler for the last 10 years, and some of their new models say this cooling trend might continue for another 10 or 15 years. The restrictions on drilling for new oil have driven up the price of oil products to the extent they are causing unnecessary real hardship to billions of people on the planet and, as a result, people are spending less money on their medical care and medical research.

The political requirements to use corn and other food plants for fuel have driven up the price of food again for billions of people in the world, and those at the bottom of the income ladder are increasingly suffering from malnutrition.

In sum, millions, if not billions, of people right now are unnecessarily having their lifespans reduced because of an overreaction to a projected climate change which may or may not have an affect on the lifespans of humans living sometime in the future.

A 2002 National Bureau for Economic Research paper by Frank R. Lichtenberg showed that the empirical data (from 1960-97) provide strong support that medical innovation and expenditures on medical care contribute to increased longevity. "The estimates imply that the medical expenditure needed to gain one life-year is about $11,000, and the pharmaceutical R&D expenditure needed to gain one life year is about $1,354. Previous researchers have estimated that the average value of a life-year is approximately $150,000."

Probably many politicians think they are being responsible when they do things like imposing costly environmental taxes, prohibiting new mining for needed metals, and coming up with costly CO2 trading schemes as the Europeans have done, and which are now being debated in the U.S. Congress. Yet, all these actions impede the proper functioning of the market, reduce economic growth and lower life expectancies, in part, by reducing the funds available for medical research and treatments.

Environmental laws that require reasonably clean air and water can clearly be a net gain for human health and economic development. But, like anything taken to excess, the costs of many of the new and proposed measures to curb CO2 greatly exceed the benefits, thus costing both lives and treasure. Most serious economists who have looked at the issue believe environmental adaptation (as humans and other plants and animals have done for millions of years) would be far less costly than speculative actions to try to change the climate.

The fundamental problem is that many politicians do not understand or, perhaps, do not wish to understand tradeoffs. That is, every time they increase a regulation or a tax, or require a government expenditure that reduces economic freedom and does not meet a reasonable cost benefit test, they are not engaged in just some annoyance, but they are costing real human life years.

Vaclav Klaus, president of the Czech Republic and also a noted economist, has written a book titled "Blue Planet in Green Shackles, What Is Endangered: Climate or Freedom?" Mr. Klaus does understand tradeoffs, and he also understands the nature of many in the political class, having spent much of his life under a communist regime.

He argues, as he did in an interview with The Washington Times last week, that global warming "is used to justify an enormous scope for government intervention vis-a-vis the markets and personal freedom."

One might take issue with President Klaus' assertion that those who advocate more regulation and higher taxes are not all well-meaning public servants, except for the unwillingness of many such as former Vice President Al Gore to debate both the science and economic costs with serious opponents and support serious cost-benefit analysis.

It is possible to make rational decisions about such issues as how much to spend on the environment, defense, public health, infrastructure, etc., and how to best fund such activities.

Unfortunately, all too many in the political class, whether in Washington, Brussels or wherever, want to turn the issues into a "religion," as Mr. Klaus says, rather than to coolly analyze the pros and cons, and rationally debate the merits. If it were only possible to indict politicians for "manslaughter" for their costly and destructive acts, many billions of life years would be saved.

Al Gore and his minions continue to chant that "the science is settled" on global warming, but the only thing settled is that there has not been any since 1998. Critics of this view (rightfully) argue that 1998 was the warmest year in modern record, due to a huge El Nino event in the Pacific Ocean, and that it is unfair to start any analysis at a high (or a low) point in a longer history. But starting in 2001 or 1998 yields the same result: no warming.

The Keenlyside team found that natural variability in the Earth's oceans will "temporarily offset" global warming from carbon dioxide. Seventy percent of the Earth's surface is oceanic; hence, what happens there greatly influences global temperature. It is now known that both Atlantic and Pacific temperatures can get "stuck," for a decade or longer, in relatively warm or cool patterns. The North Atlantic is now forecast to be in a cold stage for a decade, which will help put the damper on global warming. Another Pacific temperature pattern is forecast not to push warming, either.

Science no longer provides justification for any rush to pass drastic global warming legislation. The Climate Security Act, sponsored by Joe Lieberman and John Warner, would cut emissions of carbon dioxide — the main "global warming" gas — by 66 percent over the next 42 years. With expected population growth, this means about a 90 percent drop in emissions per capita, to 19th-century levels.

Other regulatory dictates are similarly unjustified. The Justice Department has ruled that the Interior Department has until May 15 to decide whether or not to list the polar bear as an endangered species.

Pressure to pass impossible-to-achieve legislation, like Lieberman-Warner, or grandstanding political stunts, like calling polar bears an "endangered species" even when they are at near record-high population levels, are based upon projections of rapid and persistent global warming.

Proponents of wild legislation like to point to the 2007 science compendium from the U.N. Intergovernmental Panel on Climate Change, deemed so authoritative it was awarded half of last year's Nobel Peace Prize. (The other half went to Al Gore.) In it there are dozens of computer-driven projections for 21st-century warming. Not one of them projects that the earth's natural climate variability will shut down global warming from carbon dioxide for two decades. Yet, that is just what has happened.

If you think about it, all we possess to project the future of complex systems are computer models. Therefore, if the models that serve as the basis for policy do not work — and that must be the conclusion if indeed we are at the midpoint of a two-decade hiatus in global warming — then there is no verifiable science behind the current legislative hysteria.

What does this mean for the future? If warming is "temporarily offset" for two decades, does all the "offset" warming suddenly appear with a vengeance, or is it delayed?

Computer models, like the one used by Keenlyside, et al., rely on "positive feedbacks" to generate much of their warming. First, atmospheric carbon dioxide warms things up a bit. Then the ocean follows, raising the amount of atmospheric water vapor, which is a greater source of global warming than carbon dioxide. When the ocean does not warm up, it seems that the additional warming is also delayed.

All of this may mean that we have simply overestimated the amount of warming that results from increases in atmospheric carbon dioxide.

That final point has been a subject of debate for a long time. Several recent publications in the peer-reviewed literature argue that observed changes in temperature show the "sensitivity" of temperature to increasing carbon dioxide is lower than earlier estimates.

All of this suggests a 21st-century warming trend that will be lower than the average value calculated by the climate models in the IPCC compendium.

But who really knows? Before Keenlyside dropped his bombshell, few scientists would have said publicly that global warming could stop for two decades. Anyone raising that possibility would doubtlessly have been treated to the smug reply that "the science is settled," and that only the most bumptious ignoramus could raise such a question.

One final prediction: The teeming polar bear population will be listed as "endangered," and in the next year or two, Congress will pass a bill mandating large and impossible cuts in carbon dioxide.

What is "settled" is the politics, not the science.