You Ought to Have a Look: Critical Looks at the Papal Encyclical, Carbon Tax, and the Clean Power Plan

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger.  While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic.  Here we post a few of the best in recent days, along with our color commentary.

 

This week, we feature three analyses of the top climate stories of recent weeks—the papal encyclical, the carbon tax, and the EPA’s Clean Power Plan. Each of these analyses provides uncommon insight.

The first is an article penned by the always insightful Roger Pielke Jr. appearing in the typically non-insightful U.K.’s The Guardian.  Roger’s piece is titled “Is science policy a theological matter?” and is a reminder that Pope Francis’ encyclical, Laudato Si’ is “just the latest intervention in a debate over technologies that has been going on for centuries.”

Roger reviews some of the historic highlights of this debate and the philosophical roots of Pope Francis’ way of thinking—basically that “human roots of the ecological crisis” are grounded in a “technocratic paradigm.” In other words, technology (spurred by capitalism) is leading to the downfall of humanity through ecological deterioration. Not everyone agrees with the pope on this. But even for those who do, Roger points out they are often inconsistent when it comes to embracing (or disavowing) the fruits of technology. Roger provides this example:

But for many, embracing an overt religious framing for existential debates over technology can quickly become problematic, or at least deeply inconsistent. Consider technologies of family planning. Consistent with Catholic history, Pope Francis largely dismisses concern about global population as a contributor to environmental problems, “To blame population growth instead of extreme and selective consumerism on the part of some, is one way of refusing to face the issues.”

…Our views on whether certain technologies are good or bad are a reflection of what kind of world we collectively want.

And this is where politics comes in. Roger continues:

Nuclear power? GMOs? Birth control pills? Fracking? Human germline editing? Solar thermal stations? Vaccinations? Coal power? Good luck finding someone, anyone, with a consistently pro- or anti- technology position across just this small set of innovations. People around the world show a remarkable degree of inconsistency when applying religious principles to technological innovation. Of course, one person’s inconsistency is another’s pragmatism, and the pragmatic way to settle conflicts in through the difficult and frustrating process of politics.

Which leads back to the articles title “Is science policy a theological matter?”

The whole 1300-word piece is well-worth a read both for its historical reflections as well as questions that it provokes.  Roger concludes:

With his encyclical Pope Francis has done the world a service by helping us to see that our choices about technology and economic growth are part of a deeper set of questions focused on what kind of world we wish to live in together. Answering such questions collectively through action will be messy, inconsistent and deeply political. If history is any guide, religious teachings will inform these answers but not determine them. That will mean disappointment for fundamentalists of all stripes.

The next piece that you ought to have a look at is a well-argued, critical look at the arguments forwarded for a carbon tax—supposedly a grand bargain for Republicans and Democrats to come together  and “do something” about climate change. But the Manhattan Institute’s Oren Cass doesn’t see it that way at all. His article, “The Carbon Tax Shell Game” in the summer issue of National Affairs is perhaps the most complete and thorough take down of the myriad excuses as to why it’s okay for conservatives (libertarians, even) to support a carbon tax.  Oren leads:

Support for a carbon tax has become the height of fashion among some on the right, and an express pass to “strange new respect” from the left. It even earned former congressman Bob Inglis (a Republican from South Carolina) the 2015 JFK Profile in Courage Award[1]. Supposedly, the tax is at once a free-market economist’s efficient approach to combatting climate change, a savvy fiscal reform for promoting economic growth, and a statesman-like grand bargain poised to break through the political gridlock. But as with most fads, it makes little sense when scrutinized closely.

He shows why the popular pro-carbon tax memes such as “US should be a global leader,” “we must be concerned with the negative externalities,” “we need to take out an insurance policy for catastrophic events,” “let’s swap a carbon tax for other forms of taxation,” etc. all fall flat.

Oren concludes, astutely:

The almost total lack of support for a price on carbon by elected representatives across the political spectrum, including by President Obama in his re-election campaign, is perhaps the best evidence for the true level of public support and likelihood of an attractive deal. As White House press secretary Jay Carney explained, days after the President had secured a second term, “We would never propose a carbon tax.”

A good policy does not repeatedly hide in the alternative. When the carbon-tax shells finally stop moving, one turns them over to find a sharply regressive tax likely to harm the economy while failing to meaningfully reduce emissions or insure against catastrophe, poorly suited to the important goals of spurring innovation and protecting public health, and deeply unpopular and inconsistent with basic principles of policymaking. Supporters inevitably commit themselves to the project of costly and superficial climate action while achieving no concessions in return. And this is before Congress gets involved.

If one is looking for a poorly designed consumption tax to pair with a corporate-tax cut in a politically implausible package, a carbon tax might be the answer. But surely no one is looking for that.

And finally, we end with something you don’t see every day—a cost/benefit analysis of greenhouse gas regulations that uses a domestic social cost of carbon (SCC), rather than a global SCC estimate preferred by the Obama Administration.

Recall that the SCC is a wildly gameable estimate of the damages that accrue between now and the year 2300 resulting from each of carbon dioxide emitted from human activates.

In our recent set of Comments on the latest in a series of proposed federal regulations limiting carbon dioxide emissions, we point out the problem of the federal use of the global SCC to justify the costs of the proposed regulations (an increasing frequent practice).

We write:

The [federal task force] only reports the global value of the SCC which the [task force] determines to accrue from continued carbon dioxide emissions in the United States. This is in direct violation of existing OMB [Office of Management and Budget] guidelines.

OMB Circular A-4 (September 17, 2003) regarding Regulatory Analysis explicitly states:

“Your analysis should focus on benefits and costs that accrue to citizens and residents of the United States. Where you choose to evaluate a regulation that is likely to have effects beyond the borders of the United States, these effects should be reported separately.”

In reporting the SCC, the [task force] argues away the need to “focus on benefits and costs that accrue to citizens and residents of the United States” and instead bases its SCC solely on its determinations of “effects beyond the borders of the United States.” Rather than reporting the latter “separately,” as recommended by OMB guidelines, the [task force] only reports the global costs in its tablature and makes no determination of the domestic costs (providing only approximate guidelines). Considering that the majority (if not all) of the federal regulations incorporating the SCC into cost/benefit analysis apply to rules regulating domestic activities, reporting only the global impact—the knowledge (in all areas, i.e., economics, social, environmental, etc.) of which is far less constrained than potential U.S. impacts—imparts a huge degree of uncertainty and is a grossly misleading. Thus, the [task force’s] determination of the SCC is not appropriate for use in federal regulatory analyses such as this one.

During the public comment period associated with new regulations such as this one which incorporate the SCC, a distinction should be made between domestic costs/benefits and foreign cost/benefits—and numerical calculations of each provided (not merely a mention as to how to calculate the domestic costs) in all cost/benefits analyses included in the proposal—such that the public can judge for itself the value of the regulation. As it currently stands, the public likely has little idea as to how large a percentage of the benefits of the proposed EPA regulations on domestic activities are conferred upon foreign nations under the guise of the SCC. This is clearly not a “transparent” situation.

While the Obama Administration remains deaf to these calls, the U.S. Chamber of Commerce has not.

Last week, the Chamber’s Institute for 21st Century Energy released a report whose title pretty much sums up the findings “EIA Analysis Shows EPA’s Carbon Regulations All Economic Pain for No Climate Gain.” In that report, they compared the economic losses from the EPA’s power plant carbon dioxide regulations  with the supposed “benefits” from avoided damages resulting from the lowered CO2 emissions. Using  Administration’s preferred global social cost of carbon, the Chamber found that the costs of the EPA’s Clean Power Plan exceeded the benefits to the tune of some $899 billion over the period 2020-2030. The net loss was even greater when the Chamber used the more relevant domestic SCC value. In that case, the net costs ballooned to a whopping $1.16 trillion.

The Chamber thus concludes:

No matter how one slices and dices the data, EIA‘s analysis leaves little room for doubt that EPA’s Clean Power Plan flops badly as a climate policy, even on the administration’s own terms and using the administration’s own methods, data, and exaggerated SCC.

Maybe creating a huge new bureaucracy to implement carbon dioxide regulations that would highjack well-established state authority, disrupt the entire U.S. electricity sector, jeopardize the reliability of the electric grid, raise electricity costs on struggling families, and yield an estimated net loss in wealth of $899 billion to $1.16 trillion is appealing to EPA. But for the rest of the country, it’s a decidedly bad deal.

[1] We note, that for embracing global warming, Inglis lost his 2010 primary in a heavily Republican South Carolina district by an 70-29 margin, a margin of defeat unprecedented for an incumbent congressman with no scandal.