Cap and Trade: They Said It
Policymakers Honest About One Thing—This Bill Will Cost a Whole Lot
The Institute for Energy Research, May 18, 2009
PRESIDENT BARACK OBAMA: “Under my plan of a cap and trade system, electricity prices would necessarily skyrocket. . . . Because I’m capping greenhouse gases, coal power plants, natural gas—you name it—whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.” – January, 2008
OMB DIRECTOR PETER ORSZAG: “Under a cap-and-trade program, firms would not ultimately bear most of the costs of the allowances but instead would pass them along to their customers in the form of higher prices. Such price increases would stem from the restriction on emissions and would occur regardless of whether the government sold emission allowances or gave them away. Indeed, the price increases would be essential to the success of a cap-and-trade program because they would be the most important mechanism through which businesses and households would be encouraged to make investments and behavioral changes that reduced CO2 emissions.” – April 24, 2008
TREASURY SECRETARY TIM GEITNER: “For people whose behavior in energy use doesn’t change, their costs will go up. You can’t achieve these objectives if you don’t change the incentives.” – March 18, 2009
REP. JOHN DINGELL (D-Mich.): “Nobody in this country realizes that cap and trade is a tax, and it’s a great big one.” – April 24, 2009
REP. CHARLIE RANGEL (D-NY): “Whether you call it a tax, everyone agrees that it’s going to increase the cost to the consumer.” – May 14, 2009
CBO DIRECTOR DOUGLAS ELMENDORF: “Under a cap and trade program, consumers would ultimately bear most of the costs of emission reductions.” – May, 2009
More from IER on energy tax legislation:
Press Release: Finger-Wagging Lawmakers Should Look in the Mirror
Study: Cap and Trade Primer
Blog: Understanding Renewable Electricity Mandates
Showing posts with label global warming. Show all posts
Showing posts with label global warming. Show all posts
Monday, May 18, 2009
WaPo: Addressing climate change is a job for Congress, not the Endangered Species Act
Cold Reality. WaPo Editorial
Addressing climate change is a job for Congress, not the Endangered Species Act
WaPo, Monday, May 18, 2009
INTERIOR SECRETARY Ken Salazar ruffled more than a few feathers this month when he let stand a Bush administration decision to prohibit the use of the Endangered Species Act to regulate greenhouse gas emissions. It was the right call when it was made in 2008, and it is the right call now. Tackling climate change -- and all the implications that has for the economy -- should be dealt with by the people's representatives in Congress, not through a 36-year-old law not designed for such a complex task. Just how complex will be on full display today when the House begins its scheduled debate on the American Clean Energy and Security Act.
Inaction by the Bush administration led environmental groups to find backdoor ways to force it to deal with climate change. When then-Interior Secretary Dirk Kempthorne listed the polar bear as "threatened" under the Endangered Species Act because global warming was melting its Arctic Sea ice habitat, activists geared up to use the decision to challenge high- carbon-emitting projects across the country. But Mr. Kempthorne wisely limited the law's reach by prohibiting "global processes" from triggering further action to protect a listed species' habitat.
That both the Bush and Obama administrations have had to contort Interior Department policies to ensure that it doesn't get dragged into setting U.S. climate policy shows why action on Capitol Hill is vital. The American Clean Energy and Security Act would seek to slash 2005 greenhouse gas emission levels 83 percent by 2050 through a cap-and-trade system in which government would set a declining limit on the amount of carbon dioxide that could be emitted and would issue allowances to emitting companies that could buy and sell those rights.
Shaping the bill, sponsored by Reps. Henry A. Waxman (D-Calif.) and Edward J. Markey (D-Mass.), was no easy exercise. Regional concerns, particularly those of members from coal-producing areas such as Rep. Rick Boucher (D-Va.), forced a number of compromises that have left all sides grumbling. Initially, 85 percent of the carbon trade allowances would be given away. This is a far cry from the 100 percent auction position espoused by President Obama during the campaign. But the committee staff believes that this is necessary to ease the transition to a carbon-constrained economy for industries and states and to help limit direct consumer rate increases. By 2030, all the pollution permits would be auctioned.
The work on this bill is far from done, and the debate on the House floor promises to be spirited, as it should be. We continue to hope that Congress will consider a simpler carbon tax rebated to all taxpayers or less bureaucratic versions of cap-and-trade, such as that proposed by Rep. Chris Van Hollen (D-Md.). But it's encouraging that lawmakers are undertaking to meet the challenges of climate change. The responsibility is theirs, not that of unelected bureaucrats using laws far beyond their intended purpose.
Addressing climate change is a job for Congress, not the Endangered Species Act
WaPo, Monday, May 18, 2009
INTERIOR SECRETARY Ken Salazar ruffled more than a few feathers this month when he let stand a Bush administration decision to prohibit the use of the Endangered Species Act to regulate greenhouse gas emissions. It was the right call when it was made in 2008, and it is the right call now. Tackling climate change -- and all the implications that has for the economy -- should be dealt with by the people's representatives in Congress, not through a 36-year-old law not designed for such a complex task. Just how complex will be on full display today when the House begins its scheduled debate on the American Clean Energy and Security Act.
Inaction by the Bush administration led environmental groups to find backdoor ways to force it to deal with climate change. When then-Interior Secretary Dirk Kempthorne listed the polar bear as "threatened" under the Endangered Species Act because global warming was melting its Arctic Sea ice habitat, activists geared up to use the decision to challenge high- carbon-emitting projects across the country. But Mr. Kempthorne wisely limited the law's reach by prohibiting "global processes" from triggering further action to protect a listed species' habitat.
That both the Bush and Obama administrations have had to contort Interior Department policies to ensure that it doesn't get dragged into setting U.S. climate policy shows why action on Capitol Hill is vital. The American Clean Energy and Security Act would seek to slash 2005 greenhouse gas emission levels 83 percent by 2050 through a cap-and-trade system in which government would set a declining limit on the amount of carbon dioxide that could be emitted and would issue allowances to emitting companies that could buy and sell those rights.
Shaping the bill, sponsored by Reps. Henry A. Waxman (D-Calif.) and Edward J. Markey (D-Mass.), was no easy exercise. Regional concerns, particularly those of members from coal-producing areas such as Rep. Rick Boucher (D-Va.), forced a number of compromises that have left all sides grumbling. Initially, 85 percent of the carbon trade allowances would be given away. This is a far cry from the 100 percent auction position espoused by President Obama during the campaign. But the committee staff believes that this is necessary to ease the transition to a carbon-constrained economy for industries and states and to help limit direct consumer rate increases. By 2030, all the pollution permits would be auctioned.
The work on this bill is far from done, and the debate on the House floor promises to be spirited, as it should be. We continue to hope that Congress will consider a simpler carbon tax rebated to all taxpayers or less bureaucratic versions of cap-and-trade, such as that proposed by Rep. Chris Van Hollen (D-Md.). But it's encouraging that lawmakers are undertaking to meet the challenges of climate change. The responsibility is theirs, not that of unelected bureaucrats using laws far beyond their intended purpose.
Wednesday, May 13, 2009
On the Stern Review on the Economics of Climate Change and Discount Rates
Discounting the Future. By Indur M Goklany
Is it equitable to favor tomorrow’s wealthier generations over today’s poorer generations?
Cato "Regulation" - May 2009
[Full article at the link above]
One of the difficulties of analyzing climate change policies is that the costs of greenhouse gas emission reductions would be near-term while any benefits from those reductions would be delayed because of the inertia of the climate system.How should we compare costs and benefits that occur at different times? This, of course, isn.t a new problem. It is inherent to any investment that provides less than instant gratification, but it becomes a critical issue if an investment -and its associated benefits- are spread out over several years. It is precisely to deal with such problems that economists developed discounting.
Discounting recognizes that both individuals and societies prefer to get benefits sooner and to postpone any costs untillater. Discounting gives lesser weight to benefits and costs that occur in future years. Thus, for each year that eithercosts or benefits are delayed, their value is reduced by the annual discount rate.
Because this reduction is compounded, a benefit of $1 trillion obtained in the year 2100 would be valued much lower today. The higher the discount rate, the lower the present value of either costs or benefits occurring in the future. Thus a trillion-dollar benefit in the year 2100 would be valued today at only $1.2 billion if the annual discount rate is 7 percent, but at $52 billion if the discount rate is 3 percent.
Many people argue that if we value future generations. welfare, then we are ethically bound to employ a lower discount rate for future benefits that stem from global warming control policies enacted today. In contrast, use of a high discount rate for future benefits reduces the likelihood that carbon emission constraints today would pass a benefit-cost test, which, it is claimed, could put the welfare of future generations at risk. Some analysts such as Nicholas Stern, who conducted the Stern Review on the Economics of Climate Change, while emphasizing intergenerational equity, would use a near-zero discount rate (adjusted for the probability that a catastrophe might wipe out the human race and for the possibility that future generations may be wealthier than us). But the underlying premise behind using a low discount rate is that climate change, unless reduced sufficiently, could or would leave future generations worse off than current generations. This contrasts with the standard practice of using a market discount rate for both costs and benefits, so as to better consider the opportunity costs and avoid hurting both current and future generations by depriving them of the benefits flowing from current investments.
In this article, I address the threshold question of whether future generations would in fact be worse off than we are if climate change is allowed to occur and is uncontrolled. I compare current and future welfare per capita after accounting for the costs of climate change. To do this, I will reduce estimates of future welfare per capita in the absence of climate change by estimates of the welfare losses from climate change. For those downward adjustments, I use the Stern Review.s estimates of the costs of climate change from market effects, non-market (i.e., public health and environmental) effects, and the risk of catastrophe, even though several researchers have characterized the Stern Review.s estimates as excessive. I show that through 2200, at least, future generations will be much better off than present ones even after accounting for the costs of climate change.
Is it equitable to favor tomorrow’s wealthier generations over today’s poorer generations?
Cato "Regulation" - May 2009
[Full article at the link above]
One of the difficulties of analyzing climate change policies is that the costs of greenhouse gas emission reductions would be near-term while any benefits from those reductions would be delayed because of the inertia of the climate system.How should we compare costs and benefits that occur at different times? This, of course, isn.t a new problem. It is inherent to any investment that provides less than instant gratification, but it becomes a critical issue if an investment -and its associated benefits- are spread out over several years. It is precisely to deal with such problems that economists developed discounting.
Discounting recognizes that both individuals and societies prefer to get benefits sooner and to postpone any costs untillater. Discounting gives lesser weight to benefits and costs that occur in future years. Thus, for each year that eithercosts or benefits are delayed, their value is reduced by the annual discount rate.
Because this reduction is compounded, a benefit of $1 trillion obtained in the year 2100 would be valued much lower today. The higher the discount rate, the lower the present value of either costs or benefits occurring in the future. Thus a trillion-dollar benefit in the year 2100 would be valued today at only $1.2 billion if the annual discount rate is 7 percent, but at $52 billion if the discount rate is 3 percent.
Many people argue that if we value future generations. welfare, then we are ethically bound to employ a lower discount rate for future benefits that stem from global warming control policies enacted today. In contrast, use of a high discount rate for future benefits reduces the likelihood that carbon emission constraints today would pass a benefit-cost test, which, it is claimed, could put the welfare of future generations at risk. Some analysts such as Nicholas Stern, who conducted the Stern Review on the Economics of Climate Change, while emphasizing intergenerational equity, would use a near-zero discount rate (adjusted for the probability that a catastrophe might wipe out the human race and for the possibility that future generations may be wealthier than us). But the underlying premise behind using a low discount rate is that climate change, unless reduced sufficiently, could or would leave future generations worse off than current generations. This contrasts with the standard practice of using a market discount rate for both costs and benefits, so as to better consider the opportunity costs and avoid hurting both current and future generations by depriving them of the benefits flowing from current investments.
In this article, I address the threshold question of whether future generations would in fact be worse off than we are if climate change is allowed to occur and is uncontrolled. I compare current and future welfare per capita after accounting for the costs of climate change. To do this, I will reduce estimates of future welfare per capita in the absence of climate change by estimates of the welfare losses from climate change. For those downward adjustments, I use the Stern Review.s estimates of the costs of climate change from market effects, non-market (i.e., public health and environmental) effects, and the risk of catastrophe, even though several researchers have characterized the Stern Review.s estimates as excessive. I show that through 2200, at least, future generations will be much better off than present ones even after accounting for the costs of climate change.
Tuesday, May 5, 2009
What You Can(‘t) Do About Global Warming
What You Can(‘t) Do About Global Warming
World Climate Report, April 30, 2009
We are always hearing about ways that you can “save the planet” from the perils of global warming—from riding your bicycle to work, to supporting the latest national greenhouse gas restriction limitations, and everything in between.
In virtually each and every case, advocates of these measures provide you with the amount of greenhouse gas emissions (primarily carbon dioxide) that will be saved by the particular action.
And if you want to figure this out for yourself, the web is full of CO2 calculators (just google “CO2 calculator”) which allow you to calculate your carbon footprint and how much it can be reduced by taking various conservations steps—all with an eye towards reducing global warming.
However, in absolutely zero of these cases are you told, or can you calculate, how much impact you are going to have on the actual climate itself. After all, CO2 emissions are not climate—they are gases. Climate is temperature and precipitation and storms and winds, etc. If the goal of the actions is to prevent global warming, then you shouldn’t really care a hoot about the amount of CO2 emissions that you are reducing, but instead, you want to know how much of the planet you are saving. How much anthropogenic climate change is being prevented by unplugging your cell phone charger, from biking to the park, or from slashing national carbon dioxide emissions?
Why do none of the CO2 calculators give you that most valuable piece of information? Why don’t the politicians, the EPA, and/or greenhouse gas reduction advocates tell you the bottom line?
How much global warming are we avoiding?
Embarrassingly for them, this information is readily available.
After all, what do you think climate models do? Simply, they take greenhouse gas emissions scenarios and project the future climate—thus providing precisely the answer we are looking for. You tweak the scenarios to account for your emission savings, run the models, and you get your answer.
Since climate model projections of the future climate are what are being used to attempt to scare us into action, climate models should very well be used to tell us how much of the scary future we are going to avoid by taking the suggested/legislated/regulated actions.
So where are the answers?
OK, so full-fledged climate models are very expensive tools—they are extremely complex computer programs that take weeks to run on the world’s fastest supercomputers. So, consequently, they don’t lend themselves to web calculators.
But, you would think that in considering our national energy plan, or EPA’s plan to regulate CO2, that this would be of enough import to deserve a couple of climate model runs to determine the final result. Otherwise, how can the members of Congress fairly assess what it is they are considering doing? Again, if the goal is to change the future course of climate to avoid the potential negative consequences of global warming, then to what degree is the plan that they are proposing going to be successful? Can it deliver the desired results? The American public deserves to know.
In lieu of full-out climate models, there are some “pocket” climate models that run on your desktop computer in a matter of seconds and which are designed to emulate the large-scale output from the complex general circulation models. One of best of these “pocket” models is the Model for the Assessment of Greenhouse-gas Induced Climate Change, or MAGICC. Various versions of MAGICC have been used for years to simulate climate model output for a fraction of the cost. In fact, the latest version of MAGICC was developed under a grant from the EPA. Just like a full climate model, MAGICC takes in greenhouse gas emissions scenarios and outputs such quantities as the projected global average temperature. Just the thing we are looking for. It would only take a bit of technical savvy to configure the web-based CO2 calculators so that they interfaced with MAGICC and produced a global temperature savings based upon the emissions savings. Yet not one has seemed fit to do so. If you are interested in attempting to do so yourself, MAGICC is available here.
As a last resort, for those of us who don’t have general circulation models, supercomputers, or even much technical savvy of our own, it is still possible, in a rough, back-of-the-envelope sort of way, to come up with a simple conversion from CO2 emissions to global temperatures. This way, what our politicians and favorite global warming alarmists won’t tell us, we can figure out for ourselves.
Here’s how.
We need to go from emissions of greenhouse gases, to atmospheric concentrations of greenhouse gases, to global temperatures.
We’ll determine how much CO2 emissions are required to change the atmospheric concentration of CO2 by 1 part per million (ppm), then we’ll figure out how many ppms of CO2 it takes to raise the global temperature 1ºC. Then, we’ll have our answer.
So first things first. Figure 1 shows the total global emissions of CO2 (in units of million metric tons, mmt) each year from 1958-2006 as well as the annual change in atmospheric CO2 content (in ppm) during the same period. Notice that CO2 emissions are rising, as is the annual change in atmospheric CO2 concentration.
[figure 1]
Figure 1. (top) Annual global total carbon dioxide emissions (mmt), 1958-2006; (bottom) Year-to-year change in atmospheric CO2 concentrations (ppm), 1959-2006. (Data source: Carbon Dioxide Information Analysis Center)
If we divide the annual emissions by the annual concentration change, we get Figure 2—the amount of emissions required to raise the atmospheric concentration by 1 ppm. Notice that there is no trend at all through the data in Figure 2. This means that the average amount of CO2 emissions required to change the atmospheric concentration by a unit amount has stayed constant over time. This average value in Figure 2 is 15,678mmtCO2/ppm.
[figure 2]
Figure 2. Annual CO2 emissions responsible for a 1 ppm change in atmospheric CO2 concentrations (Figure 1a divided by Figure 1b), 1959-2006. The blue horizontal line is the 1959-2006 average, the red horizontal line is the average excluding the volcano-influenced years of 1964, 1982, and 1992.
You may wonder about the two large spikes in Figure 2—indicating that in those years, the emissions did not result in much of change in the atmospheric CO2 concentrations. It turns out that the spikes, in 1964 and 1992 (and a smaller one in 1982), are the result of large volcanic eruptions. The eruptions cooled the earth by blocking solar radiation and making it more diffuse, which has the duel effect of increasing the CO2 uptake by oceans and increasing the CO2 uptake by photosynthesis—both effects serving to offset the effect of the added emissions and resulting in little change in the atmospheric concentrations. As the volcanic effects attenuated in the following year, the CO2 concentrations then responded to emissions as expected.
Since volcanic eruptions are more the exception than the norm, we should remove them from our analysis. In doing so, the average amount of CO2 emissions that lead to an atmospheric increase of 1 ppm drops from 15,678 (the blue line in Figure 2), to 14,138mmtCO2 (red line in Figure 2).
Now, we need to know how many ppms of CO2 it takes to raise the global temperature a degree Celsius. This is a bit trickier, because this value is generally not thought to be constant, but instead to decrease with increasing concentrations. But, for our purposes, we can consider it to be constant and still be in the ballpark. But what is that value?
We can try to determine it from observations.
Over the past 150 years or so, the atmospheric concentration of CO2 has increased about 100 ppm, from ~280ppm to ~380ppm, and global temperatures have risen about 0.8ºC over the same time. Dividing the concentration change by the temperature change (100ppm/0.8ºC) produces the answer that it takes 125ppm to raise the global temperature 1ºC. Now, it is possible that some of the observed temperature rise has occurred as a result of changes other than CO2 (say, solar, for instance). But it is also possible that the full effect of the temperature change resulting from the CO2 changes has not yet been manifest. So, rather than nit-pick here, we’ll call those two things a wash and go with 125ppm/ºC as a reasonable value as determined from observations.
We can also try to determine it from models.
Climate models run with only CO2 increases produce about 1.8C of warming at the time of a doubling of the atmospheric carbon dioxide concentrations. A doubling is usually taken to be a change of about 280ppm. So, we have 280ppm divided by 1.8ºC equals 156ppm/ºC. But, the warming is not fully realized by the time of doubling, and the models go on to produce a total warming of about 3ºC for the same 280ppm rise. This gives us, 280ppm divided by 3ºC which equals 93ppm/ºC. The degree to which the models have things exactly right is highly debatable, but close to the middle of all of this is that 125ppm/ºC number again—the same that we get from observations.
So both observations and models give us a similar number, within a range of loose assumptions.
Now we have what we need. It takes ~14,138mmt of CO2 emissions to raise the atmospheric CO2 concentration by ~1 ppm and it takes ~125 ppm to raise the global temperature ~1ºC. So multiplying ~14,138mmt/pmm by ~125ppm/ºC gives us ~1,767,250mmt/ºC.
That’s our magic number—1,767,250.
Write that number down on a piece of paper and put it in your wallet or post it on your computer.
This is a handy-dandy and powerful piece of information to have, because now, whenever you are presented with an emissions savings that some action to save the planet from global warming is supposed to produce, you can actually see how much of a difference it will really make. Just take the emissions savings (in units of mmt of CO2) and divide it by 1,767,250.
Just for fun, let’s see what we get when we apply this to a few save-the-world suggestions.
According to NativeEnergy.com (in association with Al Gore’s ClimateCrisis.net), if you stopped driving your average mid-sized car for a year, you’d save about 5.5 metric tons (or 0.0000055 million metric tons, mmt) of CO2 emissions per year. Divide 0.0000055mmtCO2 by 1,767,250 mmt/ºC and you get a number too small to display on my 8-digit calculator (OK, Excel tells me the answer is 0.00000000000311ºC). And, if you send in $84, NativeEnergy will invest in wind and methane power to offset that amount in case you actually don’t want to give up your car for the year. We’ll let you decide if you think that is worth it.
How about something bigger like not only giving up your mid-sized car, but also your SUV and everything else your typical household does that results in carbon dioxide emissions from fossil fuels. Again, according to NativeEnvergy.com, that would save about 24 metric tons of CO2 (or 0.000024 mmt) per year. Dividing this emissions savings by our handy-dandy converter yields 0.0000000000136ºC/yr. If you lack the fortitude to actually make these sacrifices to prevent one hundred billionth of a degree of warming, for $364 each year, NativeEnergy.com will offset your guilt.
And finally, looking at the Waxman-Markey Climate Bill that is now being considered by Congress, CO2 emissions from the U.S. in the year 2050 are proposed to be 83% less than they were in 2005. In 2005, U.S. emissions were about 6,000 mmt, so 83% below that would be 1,020mmt or a reduction of 4,980mmtCO2. 4,980 divided by 1,767,250 = 0.0028ºC per year. In other words, even if the entire United States reduced its carbon dioxide emissions by 83% below current levels, it would only amount to a reduction of global warming of less than three-thousandths of a ºC per year. A number that is scientifically meaningless.
This is the type of information that we should be provide with. And, as we have seen here, it is not that difficult to come by.
The fact that we aren’t routinely presented with this data, leads to the inescapable conclusion that it is purposefully being withheld. None of the climate do-gooders want to you know that what they are suggesting/demanding will do no good at all (at least as far as global warming is concerned).
So, if you really want to, dust off your bicycle, change out an incandescent bulb with a compact fluorescent, or support legislation that will raise your energy bill. Just realize that you will be doing so for reasons other than saving the planet. It is a shame that you have to hear that from us, rather than directly from the folks urging you on (under false pretenses).
World Climate Report, April 30, 2009
We are always hearing about ways that you can “save the planet” from the perils of global warming—from riding your bicycle to work, to supporting the latest national greenhouse gas restriction limitations, and everything in between.
In virtually each and every case, advocates of these measures provide you with the amount of greenhouse gas emissions (primarily carbon dioxide) that will be saved by the particular action.
And if you want to figure this out for yourself, the web is full of CO2 calculators (just google “CO2 calculator”) which allow you to calculate your carbon footprint and how much it can be reduced by taking various conservations steps—all with an eye towards reducing global warming.
However, in absolutely zero of these cases are you told, or can you calculate, how much impact you are going to have on the actual climate itself. After all, CO2 emissions are not climate—they are gases. Climate is temperature and precipitation and storms and winds, etc. If the goal of the actions is to prevent global warming, then you shouldn’t really care a hoot about the amount of CO2 emissions that you are reducing, but instead, you want to know how much of the planet you are saving. How much anthropogenic climate change is being prevented by unplugging your cell phone charger, from biking to the park, or from slashing national carbon dioxide emissions?
Why do none of the CO2 calculators give you that most valuable piece of information? Why don’t the politicians, the EPA, and/or greenhouse gas reduction advocates tell you the bottom line?
How much global warming are we avoiding?
Embarrassingly for them, this information is readily available.
After all, what do you think climate models do? Simply, they take greenhouse gas emissions scenarios and project the future climate—thus providing precisely the answer we are looking for. You tweak the scenarios to account for your emission savings, run the models, and you get your answer.
Since climate model projections of the future climate are what are being used to attempt to scare us into action, climate models should very well be used to tell us how much of the scary future we are going to avoid by taking the suggested/legislated/regulated actions.
So where are the answers?
OK, so full-fledged climate models are very expensive tools—they are extremely complex computer programs that take weeks to run on the world’s fastest supercomputers. So, consequently, they don’t lend themselves to web calculators.
But, you would think that in considering our national energy plan, or EPA’s plan to regulate CO2, that this would be of enough import to deserve a couple of climate model runs to determine the final result. Otherwise, how can the members of Congress fairly assess what it is they are considering doing? Again, if the goal is to change the future course of climate to avoid the potential negative consequences of global warming, then to what degree is the plan that they are proposing going to be successful? Can it deliver the desired results? The American public deserves to know.
In lieu of full-out climate models, there are some “pocket” climate models that run on your desktop computer in a matter of seconds and which are designed to emulate the large-scale output from the complex general circulation models. One of best of these “pocket” models is the Model for the Assessment of Greenhouse-gas Induced Climate Change, or MAGICC. Various versions of MAGICC have been used for years to simulate climate model output for a fraction of the cost. In fact, the latest version of MAGICC was developed under a grant from the EPA. Just like a full climate model, MAGICC takes in greenhouse gas emissions scenarios and outputs such quantities as the projected global average temperature. Just the thing we are looking for. It would only take a bit of technical savvy to configure the web-based CO2 calculators so that they interfaced with MAGICC and produced a global temperature savings based upon the emissions savings. Yet not one has seemed fit to do so. If you are interested in attempting to do so yourself, MAGICC is available here.
As a last resort, for those of us who don’t have general circulation models, supercomputers, or even much technical savvy of our own, it is still possible, in a rough, back-of-the-envelope sort of way, to come up with a simple conversion from CO2 emissions to global temperatures. This way, what our politicians and favorite global warming alarmists won’t tell us, we can figure out for ourselves.
Here’s how.
We need to go from emissions of greenhouse gases, to atmospheric concentrations of greenhouse gases, to global temperatures.
We’ll determine how much CO2 emissions are required to change the atmospheric concentration of CO2 by 1 part per million (ppm), then we’ll figure out how many ppms of CO2 it takes to raise the global temperature 1ºC. Then, we’ll have our answer.
So first things first. Figure 1 shows the total global emissions of CO2 (in units of million metric tons, mmt) each year from 1958-2006 as well as the annual change in atmospheric CO2 content (in ppm) during the same period. Notice that CO2 emissions are rising, as is the annual change in atmospheric CO2 concentration.
[figure 1]
Figure 1. (top) Annual global total carbon dioxide emissions (mmt), 1958-2006; (bottom) Year-to-year change in atmospheric CO2 concentrations (ppm), 1959-2006. (Data source: Carbon Dioxide Information Analysis Center)
If we divide the annual emissions by the annual concentration change, we get Figure 2—the amount of emissions required to raise the atmospheric concentration by 1 ppm. Notice that there is no trend at all through the data in Figure 2. This means that the average amount of CO2 emissions required to change the atmospheric concentration by a unit amount has stayed constant over time. This average value in Figure 2 is 15,678mmtCO2/ppm.
[figure 2]
Figure 2. Annual CO2 emissions responsible for a 1 ppm change in atmospheric CO2 concentrations (Figure 1a divided by Figure 1b), 1959-2006. The blue horizontal line is the 1959-2006 average, the red horizontal line is the average excluding the volcano-influenced years of 1964, 1982, and 1992.
You may wonder about the two large spikes in Figure 2—indicating that in those years, the emissions did not result in much of change in the atmospheric CO2 concentrations. It turns out that the spikes, in 1964 and 1992 (and a smaller one in 1982), are the result of large volcanic eruptions. The eruptions cooled the earth by blocking solar radiation and making it more diffuse, which has the duel effect of increasing the CO2 uptake by oceans and increasing the CO2 uptake by photosynthesis—both effects serving to offset the effect of the added emissions and resulting in little change in the atmospheric concentrations. As the volcanic effects attenuated in the following year, the CO2 concentrations then responded to emissions as expected.
Since volcanic eruptions are more the exception than the norm, we should remove them from our analysis. In doing so, the average amount of CO2 emissions that lead to an atmospheric increase of 1 ppm drops from 15,678 (the blue line in Figure 2), to 14,138mmtCO2 (red line in Figure 2).
Now, we need to know how many ppms of CO2 it takes to raise the global temperature a degree Celsius. This is a bit trickier, because this value is generally not thought to be constant, but instead to decrease with increasing concentrations. But, for our purposes, we can consider it to be constant and still be in the ballpark. But what is that value?
We can try to determine it from observations.
Over the past 150 years or so, the atmospheric concentration of CO2 has increased about 100 ppm, from ~280ppm to ~380ppm, and global temperatures have risen about 0.8ºC over the same time. Dividing the concentration change by the temperature change (100ppm/0.8ºC) produces the answer that it takes 125ppm to raise the global temperature 1ºC. Now, it is possible that some of the observed temperature rise has occurred as a result of changes other than CO2 (say, solar, for instance). But it is also possible that the full effect of the temperature change resulting from the CO2 changes has not yet been manifest. So, rather than nit-pick here, we’ll call those two things a wash and go with 125ppm/ºC as a reasonable value as determined from observations.
We can also try to determine it from models.
Climate models run with only CO2 increases produce about 1.8C of warming at the time of a doubling of the atmospheric carbon dioxide concentrations. A doubling is usually taken to be a change of about 280ppm. So, we have 280ppm divided by 1.8ºC equals 156ppm/ºC. But, the warming is not fully realized by the time of doubling, and the models go on to produce a total warming of about 3ºC for the same 280ppm rise. This gives us, 280ppm divided by 3ºC which equals 93ppm/ºC. The degree to which the models have things exactly right is highly debatable, but close to the middle of all of this is that 125ppm/ºC number again—the same that we get from observations.
So both observations and models give us a similar number, within a range of loose assumptions.
Now we have what we need. It takes ~14,138mmt of CO2 emissions to raise the atmospheric CO2 concentration by ~1 ppm and it takes ~125 ppm to raise the global temperature ~1ºC. So multiplying ~14,138mmt/pmm by ~125ppm/ºC gives us ~1,767,250mmt/ºC.
That’s our magic number—1,767,250.
Write that number down on a piece of paper and put it in your wallet or post it on your computer.
This is a handy-dandy and powerful piece of information to have, because now, whenever you are presented with an emissions savings that some action to save the planet from global warming is supposed to produce, you can actually see how much of a difference it will really make. Just take the emissions savings (in units of mmt of CO2) and divide it by 1,767,250.
Just for fun, let’s see what we get when we apply this to a few save-the-world suggestions.
According to NativeEnergy.com (in association with Al Gore’s ClimateCrisis.net), if you stopped driving your average mid-sized car for a year, you’d save about 5.5 metric tons (or 0.0000055 million metric tons, mmt) of CO2 emissions per year. Divide 0.0000055mmtCO2 by 1,767,250 mmt/ºC and you get a number too small to display on my 8-digit calculator (OK, Excel tells me the answer is 0.00000000000311ºC). And, if you send in $84, NativeEnergy will invest in wind and methane power to offset that amount in case you actually don’t want to give up your car for the year. We’ll let you decide if you think that is worth it.
How about something bigger like not only giving up your mid-sized car, but also your SUV and everything else your typical household does that results in carbon dioxide emissions from fossil fuels. Again, according to NativeEnvergy.com, that would save about 24 metric tons of CO2 (or 0.000024 mmt) per year. Dividing this emissions savings by our handy-dandy converter yields 0.0000000000136ºC/yr. If you lack the fortitude to actually make these sacrifices to prevent one hundred billionth of a degree of warming, for $364 each year, NativeEnergy.com will offset your guilt.
And finally, looking at the Waxman-Markey Climate Bill that is now being considered by Congress, CO2 emissions from the U.S. in the year 2050 are proposed to be 83% less than they were in 2005. In 2005, U.S. emissions were about 6,000 mmt, so 83% below that would be 1,020mmt or a reduction of 4,980mmtCO2. 4,980 divided by 1,767,250 = 0.0028ºC per year. In other words, even if the entire United States reduced its carbon dioxide emissions by 83% below current levels, it would only amount to a reduction of global warming of less than three-thousandths of a ºC per year. A number that is scientifically meaningless.
This is the type of information that we should be provide with. And, as we have seen here, it is not that difficult to come by.
The fact that we aren’t routinely presented with this data, leads to the inescapable conclusion that it is purposefully being withheld. None of the climate do-gooders want to you know that what they are suggesting/demanding will do no good at all (at least as far as global warming is concerned).
So, if you really want to, dust off your bicycle, change out an incandescent bulb with a compact fluorescent, or support legislation that will raise your energy bill. Just realize that you will be doing so for reasons other than saving the planet. It is a shame that you have to hear that from us, rather than directly from the folks urging you on (under false pretenses).
Sunday, April 26, 2009
Dingell: Cap and trade a "great big" tax
Dingell: Cap and trade a "great big" tax. By Glenn Thrush
Politico, April 24, 2009
Rep. John Dingell (D-Mich.), the former chairman of the Energy and Commerce Committee, raised eyebrows during his questioning of Al Gore today -- describing cap-and-trade as a "great big" tax.
Dingell, who backs a carbon tax, didn't express opposition to House leadership's cap-and-trade proposal but was asking Gore how to avoid missteps made in countries that implemented c-and-t.
"Every economist says that a carbon tax is a better, more efficient, fairer way of doing it... The Europeans have had two, maybe three fine failures in their application of cap and trade. How do we avoid the mistakes that they have made?...Nobody in this country realizes that cap and trade is a tax and it’s a great big one… I want to get a bill that works—how do we choose the best way?"
Matt Lloyd, spokesman for House Republican Conference Chairman Mike Pence, passed the YouTube along, saying: "Chairman Dingell agrees with what Republicans have been saying all along: the Democrat cap and trade bill is a national energy tax on working families.”
Politico, April 24, 2009
Rep. John Dingell (D-Mich.), the former chairman of the Energy and Commerce Committee, raised eyebrows during his questioning of Al Gore today -- describing cap-and-trade as a "great big" tax.
Dingell, who backs a carbon tax, didn't express opposition to House leadership's cap-and-trade proposal but was asking Gore how to avoid missteps made in countries that implemented c-and-t.
"Every economist says that a carbon tax is a better, more efficient, fairer way of doing it... The Europeans have had two, maybe three fine failures in their application of cap and trade. How do we avoid the mistakes that they have made?...Nobody in this country realizes that cap and trade is a tax and it’s a great big one… I want to get a bill that works—how do we choose the best way?"
Matt Lloyd, spokesman for House Republican Conference Chairman Mike Pence, passed the YouTube along, saying: "Chairman Dingell agrees with what Republicans have been saying all along: the Democrat cap and trade bill is a national energy tax on working families.”
Friday, April 24, 2009
ACESA 2009 and the U.S. National Strategy for Dealing with Climate Change
ACESA 2009 and the U.S. National Strategy for Dealing with Climate Change. By Lee Lane
Testimony, House Subcommittee on Energy and the Environment
AEI, April 23, 2009
The current draft of the American Clean Energy and Security Act of 2009, while correct to stress adaptation measures and technological advances, exhibits some crucial flaws. The costs of the steep, short-term greenhouse gas (GHG) emissions reductions will likely exceed their benefits, and many of the regulatory mandates within the bill are redundant to its cap-and-trade provisions. Furthermore, the United States is limited in its ability to bring about an effective global agreement on GHG controls and should therefore focus on the realistic opportunities for progress that are actually available.
Excerpts:
[...]
Unilateral Action and Moral Suasion
First, the U.S. could enact go-it-alone GHG controls and trust the moral appeal of its example to sway other nations.[8] While it is clearly true that the U.S. could not expect China and India to bear the costs of curtailing their GHG discharges unless it were willing to do the same, it is quite another thing to leap from that statement to the assertion that the U.S. should act without firm pledges that other states will respond in kind.
The audacity of this leap has often been missed, but it merits real scrutiny. Does the United States conduct any other negotiation in this way? Did Congress, for example, as a prelude to the Uruguay or Doha Rounds, drop all U.S. tariffs and farm subsidies to zero? Did the U.S. win the withdrawal of Soviet conventional forces from Europe by first pulling its own troops out of Germany? Why, then, would we consider taking the functional equivalent of these steps in the area of GHG control? Or, to pose the same question in another way, how would ACESA's GHG reductions differ from the just-mentioned bargaining moves in trade or arms control?
No one can claim that the answer is that the Chinese and Indian governments have signaled their readiness to respond in kind to U.S. GHG curbs. To the contrary, they continue to insist that the developed countries must commit to pay them for any control costs that they incur.[9] The Chinese and Indian governments' statements are consistent with their behavior. These countries are clearly more interested in dodging the costs of GHG curbs than in capturing the gains from a global control regime.
ACESA could only harden their resolve. As other countries adopt GHG limits, China and India will make competitive gains by simply standing pat against controls. Over time, energy-intensive industries will migrate to the nations that reject controls. The growth in these states of energy-intensive capital and jobs will add to the political costs of any future move toward controls.[10] This outcome is the very opposite of the one that the U.S. should be seeking.
Trade Sanctions
Second, many proponents of U.S. GHG controls have proposed to allow the U.S. government to clap trade sanctions on countries that fail to cap their GHG discharges. ACESA also follows this strategy, albeit somewhat hesitantly. There are better grounds for the bill's hesitancy than there are for believing that trade sanctions will change Chinese and Indian policy.
One country adopting trade sanctions, or a few countries doing so, will merely change the geographic pattern of trade flows. It would do little net harm to China and India. As GHG controls raised U.S. production and transport costs, countries like Japan with low-carbon processes for producing steel, aluminum, or other energy-intensive goods would raise their exports to the U.S. At the same time, these countries could boost their own imports from China and India to fill the gap left by their higher exports. The Chinese and Indians would be largely indifferent to the change. The threat of U.S. action will, therefore, put little pressure on them.[11]
Paying China and India for GHG Abatement
Third, the U.S. could offer to pay for China's GHG reductions as well as its own. Although some ACESA provisions amount to paying other nations to reduce GHG emissions, the bill does not appear to envision the kind of very large transfer payments that the China/G-77 group is demanding. In their view, past U.S. emissions are a kind of historical guilt, and contemporary Americans should pay to expiate our ancestors' sins.[12]
The case for this demand is hollow. It rests, in part, on the false proposition that developing countries have added almost nothing to current atmospheric GHG stocks. The reality is quite different. The group of currently poor countries and the group of currently rich countries have each placed about the same amount of GHGs in the atmosphere.[13]
Confusion about this point stems from three mistakes. First, many studies consider only industrial sector emissions. Most of the poorer countries' emissions stem from land use changes, agriculture, and animal husbandry, so they are not counted. Second, studies often look only at CO2. Poorer countries tend to have large methane emissions; again their contribution is missed. Third, many studies have lumped those poor countries with high emissions with the many poor countries that have virtually none. The regional averages mask the true state of affairs. Cumulatively, these errors have created a badly distorted impression of the origins of today's atmospheric GHG stocks.[14] Furthermore, the situation is changing rapidly. The balance ten years from now will be much different than that which prevails today. The latter is simply irrelevant to decisions about who should pay to reduce future emissions. To the contrary, attempting to interject claims about the historical record is more likely to lead to stalemate and endless wrangling than it is to build consensus. It is hard to see why the U.S. would want to give credence to this approach.
Exaggerating the Extent of Other Nations' GHG Reductions
Fourth, some may be tempted simply to pretend to believe that a mix of Chinese or Indian "no-regrets" policies constitutes serious action on GHG controls. (No-regrets policies are those that would be rational to adopt even in the absence of concerns about climate change.) China and India, for reasons unrelated to climate, are very likely to adopt such policies. Their economies exhibit very low energy efficiency. They enjoy many options for making energy savings that will be cost-beneficial quite independently of concerns about climate.[15] Chinese and Indian actions to reduce this waste are, therefore, properly regarded as corrections to the estimates of their baseline GHG growth; as such, they are welcome. They are, however, not done in response to U.S. action, and they will affect GHG growth paths only at the margin.
An Effective Global Deal on GHG Control Is Unlikely
The conclusion seems inescapable. The U.S. can have little impact on when China and India become willing to bear the costs required to control GHG discharges. This limit on America's options reflects a basic reality: Conditions are not yet ripe for forging an effective global accord on GHG controls. To understand why this might be so, we might want to consider the economic roots of the GHG control issue.
[...]
Lee Lane is resident fellow and codirector of the AEI Geoengineering Project.
Testimony, House Subcommittee on Energy and the Environment
AEI, April 23, 2009
The current draft of the American Clean Energy and Security Act of 2009, while correct to stress adaptation measures and technological advances, exhibits some crucial flaws. The costs of the steep, short-term greenhouse gas (GHG) emissions reductions will likely exceed their benefits, and many of the regulatory mandates within the bill are redundant to its cap-and-trade provisions. Furthermore, the United States is limited in its ability to bring about an effective global agreement on GHG controls and should therefore focus on the realistic opportunities for progress that are actually available.
Excerpts:
[...]
Unilateral Action and Moral Suasion
First, the U.S. could enact go-it-alone GHG controls and trust the moral appeal of its example to sway other nations.[8] While it is clearly true that the U.S. could not expect China and India to bear the costs of curtailing their GHG discharges unless it were willing to do the same, it is quite another thing to leap from that statement to the assertion that the U.S. should act without firm pledges that other states will respond in kind.
The audacity of this leap has often been missed, but it merits real scrutiny. Does the United States conduct any other negotiation in this way? Did Congress, for example, as a prelude to the Uruguay or Doha Rounds, drop all U.S. tariffs and farm subsidies to zero? Did the U.S. win the withdrawal of Soviet conventional forces from Europe by first pulling its own troops out of Germany? Why, then, would we consider taking the functional equivalent of these steps in the area of GHG control? Or, to pose the same question in another way, how would ACESA's GHG reductions differ from the just-mentioned bargaining moves in trade or arms control?
No one can claim that the answer is that the Chinese and Indian governments have signaled their readiness to respond in kind to U.S. GHG curbs. To the contrary, they continue to insist that the developed countries must commit to pay them for any control costs that they incur.[9] The Chinese and Indian governments' statements are consistent with their behavior. These countries are clearly more interested in dodging the costs of GHG curbs than in capturing the gains from a global control regime.
ACESA could only harden their resolve. As other countries adopt GHG limits, China and India will make competitive gains by simply standing pat against controls. Over time, energy-intensive industries will migrate to the nations that reject controls. The growth in these states of energy-intensive capital and jobs will add to the political costs of any future move toward controls.[10] This outcome is the very opposite of the one that the U.S. should be seeking.
Trade Sanctions
Second, many proponents of U.S. GHG controls have proposed to allow the U.S. government to clap trade sanctions on countries that fail to cap their GHG discharges. ACESA also follows this strategy, albeit somewhat hesitantly. There are better grounds for the bill's hesitancy than there are for believing that trade sanctions will change Chinese and Indian policy.
One country adopting trade sanctions, or a few countries doing so, will merely change the geographic pattern of trade flows. It would do little net harm to China and India. As GHG controls raised U.S. production and transport costs, countries like Japan with low-carbon processes for producing steel, aluminum, or other energy-intensive goods would raise their exports to the U.S. At the same time, these countries could boost their own imports from China and India to fill the gap left by their higher exports. The Chinese and Indians would be largely indifferent to the change. The threat of U.S. action will, therefore, put little pressure on them.[11]
Paying China and India for GHG Abatement
Third, the U.S. could offer to pay for China's GHG reductions as well as its own. Although some ACESA provisions amount to paying other nations to reduce GHG emissions, the bill does not appear to envision the kind of very large transfer payments that the China/G-77 group is demanding. In their view, past U.S. emissions are a kind of historical guilt, and contemporary Americans should pay to expiate our ancestors' sins.[12]
The case for this demand is hollow. It rests, in part, on the false proposition that developing countries have added almost nothing to current atmospheric GHG stocks. The reality is quite different. The group of currently poor countries and the group of currently rich countries have each placed about the same amount of GHGs in the atmosphere.[13]
Confusion about this point stems from three mistakes. First, many studies consider only industrial sector emissions. Most of the poorer countries' emissions stem from land use changes, agriculture, and animal husbandry, so they are not counted. Second, studies often look only at CO2. Poorer countries tend to have large methane emissions; again their contribution is missed. Third, many studies have lumped those poor countries with high emissions with the many poor countries that have virtually none. The regional averages mask the true state of affairs. Cumulatively, these errors have created a badly distorted impression of the origins of today's atmospheric GHG stocks.[14] Furthermore, the situation is changing rapidly. The balance ten years from now will be much different than that which prevails today. The latter is simply irrelevant to decisions about who should pay to reduce future emissions. To the contrary, attempting to interject claims about the historical record is more likely to lead to stalemate and endless wrangling than it is to build consensus. It is hard to see why the U.S. would want to give credence to this approach.
Exaggerating the Extent of Other Nations' GHG Reductions
Fourth, some may be tempted simply to pretend to believe that a mix of Chinese or Indian "no-regrets" policies constitutes serious action on GHG controls. (No-regrets policies are those that would be rational to adopt even in the absence of concerns about climate change.) China and India, for reasons unrelated to climate, are very likely to adopt such policies. Their economies exhibit very low energy efficiency. They enjoy many options for making energy savings that will be cost-beneficial quite independently of concerns about climate.[15] Chinese and Indian actions to reduce this waste are, therefore, properly regarded as corrections to the estimates of their baseline GHG growth; as such, they are welcome. They are, however, not done in response to U.S. action, and they will affect GHG growth paths only at the margin.
An Effective Global Deal on GHG Control Is Unlikely
The conclusion seems inescapable. The U.S. can have little impact on when China and India become willing to bear the costs required to control GHG discharges. This limit on America's options reflects a basic reality: Conditions are not yet ripe for forging an effective global accord on GHG controls. To understand why this might be so, we might want to consider the economic roots of the GHG control issue.
[...]
Lee Lane is resident fellow and codirector of the AEI Geoengineering Project.
Shanahan et alii's article on severe droughts in Africa
Comment On “Debate Over Climate Risks - Natural or Not” On Dot Earth. By Roger Pielke Sr
Climate Science, Apr 20, 2009
There is an interesting discussion on going at Andy Revkin’s weglob Dot Earth on the topic Debate Over Climate Risks - Natural or Not, which invites responses to the statement,
“One clear-cut lesson [of this study] seems to be that human-driven warming, for this part of Africa, could be seen as a sideshow given the normal extremes. Tell me why that thought is misplaced if you feel it is.”
This subject was initiated by a Science article by Shanahan et al and subsequent news item on April 16 2009 by Andy Revkin which includes the text
“For at least 3,000 years, a regular drumbeat of potent droughts, far longer and more severe than any experienced recently, have seared a belt of sub-Saharan Africa that is now home to tens of millions of the world’s poorest people, climate researchers reported in a new study.
That sobering finding, published in the April 17th issue of Science magazine emerged from the first study of year-by-year climate conditions in the region over the millenniums, based on layered mud and dead trees in a crater lake in Ghana. “
The abstract of the Science article by Shanahan et al reads
“ Although persistent drought in West Africa is well documented from the instrumental record and has been primarily attributed to changing Atlantic sea surface temperatures, little is known about the length, severity, and origin of drought before the 20th century. We combined geomorphic, isotopic, and geochemical evidence from the sediments of Lake Bosumtwi, Ghana, to reconstruct natural variability in the African monsoon over the past three millennia. We find that intervals of severe drought lasting for periods ranging from decades to centuries are characteristic of the monsoon and are linked to natural variations in Atlantic temperatures. Thus the severe drought of recent decades is not anomalous in the context of the past three millennia, indicating that the monsoon is capable of longer and more severe future droughts.”
Climate Science and our research papers have emphasized the large natural variations of climate that have occurred in the paleo-climate record and that these variations dwarf anything we have experienced in the instrumental record.
For example, in
Rial, J., R.A. Pielke Sr., M. Beniston, M. Claussen, J. Canadell, P. Cox, H. Held, N. de Noblet-Ducoudre, R. Prinn, J. Reynolds, and J.D. Salas, 2004: Nonlinearities, feedbacks and critical thresholds within the Earth’s climate system. Climatic Change, 65, 11-38,
our abstract reads
“The Earth’s climate system is highly nonlinear: inputs and outputs are not proportional, change is often episodic and abrupt, rather than slow and gradual, and multiple equilibria are the norm. While this is widely accepted, there is a relatively poor understanding of the different types of nonlinearities, how they manifest under various conditions, and whether they reflect a climate system driven by astronomical forcings, by internal feedbacks, or by a combination of both. In this paper, after a brief tutorial on the basics of climate nonlinearity, we provide a number of illustrative examples and highlight key mechanisms that give rise to nonlinear behavior, address scale and methodological issues, suggest a robust alternative to prediction that is based on using integrated assessments within the framework of vulnerability studies and, lastly, recommend a number of research priorities and the establishment of education programs in Earth Systems Science. It is imperative that the Earth’s climate system research community embraces this nonlinear paradigm if we are to move forward in the assessment of the human influence on climate.”
In an article specifically with respect to drought,
Pielke Sr., R.A., 2008: Global climate models - Many contributing influences. Citizen’s Guide to Colorado Climate Change, Colorado Climate Foundation for Water Education, pp. 28-29,
I wrote
“A vulnerability perspective, focused on regional and local societal and environmental resources, is a more inclusive, useful and scientifically robust framework to use with policymakers. In contrast to the limited range of possible future risks by current climate models, the vulnerability framework permits the evaluation of the entire spectrum of risks to the water resources associated with all social and environmental threats, including climate variability and change.”
Thus, regardless of the role humans play within the climate system (and it is much more than due to carbon dioxide increases; see), adaptation plans to deal with climate variations, beyond what occurred in the historical record, should be a priority.
Climate Science, Apr 20, 2009
There is an interesting discussion on going at Andy Revkin’s weglob Dot Earth on the topic Debate Over Climate Risks - Natural or Not, which invites responses to the statement,
“One clear-cut lesson [of this study] seems to be that human-driven warming, for this part of Africa, could be seen as a sideshow given the normal extremes. Tell me why that thought is misplaced if you feel it is.”
This subject was initiated by a Science article by Shanahan et al and subsequent news item on April 16 2009 by Andy Revkin which includes the text
“For at least 3,000 years, a regular drumbeat of potent droughts, far longer and more severe than any experienced recently, have seared a belt of sub-Saharan Africa that is now home to tens of millions of the world’s poorest people, climate researchers reported in a new study.
That sobering finding, published in the April 17th issue of Science magazine emerged from the first study of year-by-year climate conditions in the region over the millenniums, based on layered mud and dead trees in a crater lake in Ghana. “
The abstract of the Science article by Shanahan et al reads
“ Although persistent drought in West Africa is well documented from the instrumental record and has been primarily attributed to changing Atlantic sea surface temperatures, little is known about the length, severity, and origin of drought before the 20th century. We combined geomorphic, isotopic, and geochemical evidence from the sediments of Lake Bosumtwi, Ghana, to reconstruct natural variability in the African monsoon over the past three millennia. We find that intervals of severe drought lasting for periods ranging from decades to centuries are characteristic of the monsoon and are linked to natural variations in Atlantic temperatures. Thus the severe drought of recent decades is not anomalous in the context of the past three millennia, indicating that the monsoon is capable of longer and more severe future droughts.”
Climate Science and our research papers have emphasized the large natural variations of climate that have occurred in the paleo-climate record and that these variations dwarf anything we have experienced in the instrumental record.
For example, in
Rial, J., R.A. Pielke Sr., M. Beniston, M. Claussen, J. Canadell, P. Cox, H. Held, N. de Noblet-Ducoudre, R. Prinn, J. Reynolds, and J.D. Salas, 2004: Nonlinearities, feedbacks and critical thresholds within the Earth’s climate system. Climatic Change, 65, 11-38,
our abstract reads
“The Earth’s climate system is highly nonlinear: inputs and outputs are not proportional, change is often episodic and abrupt, rather than slow and gradual, and multiple equilibria are the norm. While this is widely accepted, there is a relatively poor understanding of the different types of nonlinearities, how they manifest under various conditions, and whether they reflect a climate system driven by astronomical forcings, by internal feedbacks, or by a combination of both. In this paper, after a brief tutorial on the basics of climate nonlinearity, we provide a number of illustrative examples and highlight key mechanisms that give rise to nonlinear behavior, address scale and methodological issues, suggest a robust alternative to prediction that is based on using integrated assessments within the framework of vulnerability studies and, lastly, recommend a number of research priorities and the establishment of education programs in Earth Systems Science. It is imperative that the Earth’s climate system research community embraces this nonlinear paradigm if we are to move forward in the assessment of the human influence on climate.”
In an article specifically with respect to drought,
Pielke Sr., R.A., 2008: Global climate models - Many contributing influences. Citizen’s Guide to Colorado Climate Change, Colorado Climate Foundation for Water Education, pp. 28-29,
I wrote
“A vulnerability perspective, focused on regional and local societal and environmental resources, is a more inclusive, useful and scientifically robust framework to use with policymakers. In contrast to the limited range of possible future risks by current climate models, the vulnerability framework permits the evaluation of the entire spectrum of risks to the water resources associated with all social and environmental threats, including climate variability and change.”
Thus, regardless of the role humans play within the climate system (and it is much more than due to carbon dioxide increases; see), adaptation plans to deal with climate variations, beyond what occurred in the historical record, should be a priority.
Capitalist Reform to Reduce International Oil Demand: Getting World Refiners to Price at Market
Capitalist Reform to Reduce International Oil Demand: Getting World Refiners to Price at Market. By Donald Hertzmark
Master Resource, April 23, 2009
A market-driven revitalization of the world oil refining sector is the best and fastest way to reduce both oil demand and related air emissions, including CO2. A combination of market-based pricing–absent from foreign refineries (most politically owned and/or managed)– and new investment brought forth by the improved profitability of such pricing, could reduce the demand for crude oil by between eight and twelve million barrels per day, or about 10–15 percent.
A Bold Hypothesis
This rather astounding assertion can be educed as follows:
Subsidizing Middle Distillate Is Like Fighting Chemistry And Economics At The Same Time
The Government giveaways of gasoline in a number of oil exporting countries, especially Venezuela and the Persian Gulf nations, are well known. But while these subsidies are considerable, the far greater player in the subsidy game is the encouragement of middle distillate over-consumption in country-after-country in the developing world.
In many countries, including China, India, Indonesia, Thailand and other leading developing countries, prices of diesel and kerosene are maintained at 70–85% of the energy equivalent price of gasoline. These price ratios, unlike those in the real world, which are generally within 5-6% of one another on an energy basis, give energy consumers every reason to use more of the middle distillates and less of the more expensive products.
Moreover, since the low prices for middle distillates are below the cost of supplying such products, the funds to supply the induced demand must come from somewhere – either taxpayers or the consumers of the non-subsidized oil products (gasoline, HFO, LPG) must foot the bill. Although increasing numbers of taxpayers have become alarmed (rightly) about the subsidization of renewable energy, the harm to the economy of the world that is created by subsidies for refined oil products, especially middle distillates, currently dwarfs the resource misallocation created by renewable energy policies. In 2007, middle distillate subsidies cost Indonesia about $9.8 billion, more than 2% of that country’s GDP.
At worst, subsidies can so promote demand for the subsidized product, while simultaneously retarding the efficient supply of that product that vast financial and economic imbalances in the energy sector may occur. Worldwide, the demand for middle distillates in recent years has increased from about 35 to 38% of the crude oil barrel. In the countries cited above, as in many other subsidizers, the middle distillate proportion in the demand barrel can range from 50–60%.
Countries import middle distillates at market prices and sell them for less; or worse, they build expensive refinery add-ons solely to meet middle distillate demand and then sell the products for less than the cost of production. By rendering the oil refining sector less profitable than would otherwise be the case, subsidies stunt the investment in new technology and clean fuels needed to meet increasingly stringent environmental demands for reducing plain old pollution (lead additives for gasoline, volatile organic compounds, CO, sulphur).
Simply put, where middle distillate subsidies are present, the country’s approach to meeting refined oil product demand is tantamount to fighting chemistry. There is almost no way to make a barrel of oil produce a 50–60% yield of diesel, jet fuel and kerosene at a reasonable cost (yes, it can be done at an unreasonable cost, just as you can grow bananas in Alaska – that doesn’t make it a good investment). Pressure, heat and catalysts will almost always generate other products, gasoline and LPGs, as well as (some) HFO.
Ending Oil-Product Subsidies Offers an Environmental Upside
A country with refined-product subsidies will tend to consume more oil products than it might without below-market pricing. At the same time, as long as refiners lack the financial capability (or even the desire) to invest in better yields of light products, they will try to meet demand in the least expensive way, either importing middle distillate products or refining more crude in simple refineries. (Note: Countries without any oil refineries tend not to subsidize the consumption of these products).
In a simple refining configuration, about one third of the output is heavy fuel oil, assuming a light crude is used. Heavier crudes may yield more than 40% HFO from simple distillation. The proportion of middle distillates and gasolines are about equal, at roughly 30–35%, depending on cut points and the specifics of the crude oil used. Such a refinery cannot produce a demand barrel that is more than 50% middle distillates. So the refiner will export some of the unwanted gasoline and HFO and import middle distillates. If this is done at the margin, then there is little or no impact on prices and product availability, but if it is general practice, then the prices for the exported gasoline, naphtha and HFO products will tend to be depressed. The financial impacts on a refiner of selling middle distillates below cost and other products at depressed prices virtually guarantees continuous financial stress for such companies.
If a refining company could recoup its investments in upgrading low quality feeds and avoid selling unfinished gasolines and HFO at distressed prices, then they might be able to build a better refinery. In a highly complex refinery, with full reduction of heavy byproducts, middle distillate yields rarely rise above 40%. With a mix of various unappetizing heavy, high sulphur crudes and HFO, Valero Energy’s Delaware City refinery produces 40% middle distillates, 53% gasolines, 3% HFO, and precious little else. Even the petroleum coke, about 1% of output, is recycled to generate electric power.
The roughly 155,000 b/d of light products produced in Valero’s complex refinery requires just 170,000 b/d of low quality feed. A simple refinery will need roughly 240,000 b/d to produce the same yield of light products. If rest of the world were able to replicate the efficiency of the U.S. refining sector, then current demand for gasoline and middle distillates, LPGs and chemical feedstocks could be met with 10–15% less (lower quality) crude oil each day, even allowing for lags in adoption.
Shifting the HFO now used to generate electricity to natural gas, where feasible, would result in a substantial reduction in CO2 emissions. Worldwide, the consumption of HFO for power generation and industry is about 10 million b/d, 12% of total oil demand. Reducing the crude oil distillation that is rendered unnecessary with modern technology, and replacing current industrial and utility consumption of HFO with natural gas, an excellent financial option for most countries, could result in a net annual reduction in CO2 emissions of more than 500 million tonnes, more than the CO2 emissions from all natural gas flaring worldwide.[1]
The moral of the story is that fighting the market and fighting chemistry is a bad idea – bad for profits, bad for oil reserves and bad for the environment. There is literally no other set of investments in the next 10–15 years that could reduce air pollution (and CO2 emissions) as dramatically as the investments induced by good oil pricing policies. It is literally equivalent to removing 20% of U.S. power generation capacity from service, a feat that is beyond the wildest dreams of any renewable energy advocate.
Notes
[1] This reduction is calculated as follows:
Nine million barrels per day (b/d) of HFO, when burned, creates 1.55*109 T/year CO2 – all this HFO could go into fuels production, displacing crude oil, since the demand for the light products is evident.
An equivalent power or industrial output from natural gas creates no more than 1.08*109 T/year CO2. Efficiencies more typical of natural gas use in power would lower this energy equivalence figure to about 560 million T/year CO2.
The differential, about 500-1,000 million T/year CO2, is greater than the known emissions from gas flaring worldwide (see Chapter 6).
Master Resource, April 23, 2009
A market-driven revitalization of the world oil refining sector is the best and fastest way to reduce both oil demand and related air emissions, including CO2. A combination of market-based pricing–absent from foreign refineries (most politically owned and/or managed)– and new investment brought forth by the improved profitability of such pricing, could reduce the demand for crude oil by between eight and twelve million barrels per day, or about 10–15 percent.
A Bold Hypothesis
This rather astounding assertion can be educed as follows:
- Most countries subsidize refined oil product consumption, usually middle distillates (diesel and kerosene) at the expense of gasoline and other products;
- Owing to the price controls on heavily used middle distillate products, most oil refiners outside the U.S. and a few other countries lose money;
- The subsidies to middle distillate users, at the expense of gasoline and LPG consumers, creates an “unbalanced” demand barrel – one that defies both economics and chemistry;
- Refiners lose money and avoid investing in modern refining technology; instead refiners build more simple refineries and use up crude oil to meet the unbalanced demand barrel, which creates more heavy fuel oil (HFO);
- The U.S., with its sophisticated refineries and market-based pricing of oil products, creates virtually no net HFO, using it as a feedstock instead. In fact, the U.S. is a net importer of HFO from Europe and the Caribbean, a less expensive feedstock for refining than crude oil;
- Most of this HFO created outside the U.S. is used to generate electricity, creating significant greenhouse gas emissions;
- Right-pricing refined oil products would (1) reduce the demand for middle distillates; (2) make refining a going business without subsidies; and (3) induce investment in better refining technology;
- The excess HFO now created as a artifact of middle distillate subsidies would be absorbed within the refining system as a feedstock, reducing the demand for crude oil by at least 8 million barrels per day, perhaps 12-13 million b/d;
- Replacement of this HFO in power generation by natural gas would, on balance, reduce the output of CO2 by an amount greater than the CO2 generated by all natural gas flaring worldwide, or, equivalently, taking 20% of U.S. electricity generating capacity out of service.
Subsidizing Middle Distillate Is Like Fighting Chemistry And Economics At The Same Time
The Government giveaways of gasoline in a number of oil exporting countries, especially Venezuela and the Persian Gulf nations, are well known. But while these subsidies are considerable, the far greater player in the subsidy game is the encouragement of middle distillate over-consumption in country-after-country in the developing world.
In many countries, including China, India, Indonesia, Thailand and other leading developing countries, prices of diesel and kerosene are maintained at 70–85% of the energy equivalent price of gasoline. These price ratios, unlike those in the real world, which are generally within 5-6% of one another on an energy basis, give energy consumers every reason to use more of the middle distillates and less of the more expensive products.
Moreover, since the low prices for middle distillates are below the cost of supplying such products, the funds to supply the induced demand must come from somewhere – either taxpayers or the consumers of the non-subsidized oil products (gasoline, HFO, LPG) must foot the bill. Although increasing numbers of taxpayers have become alarmed (rightly) about the subsidization of renewable energy, the harm to the economy of the world that is created by subsidies for refined oil products, especially middle distillates, currently dwarfs the resource misallocation created by renewable energy policies. In 2007, middle distillate subsidies cost Indonesia about $9.8 billion, more than 2% of that country’s GDP.
At worst, subsidies can so promote demand for the subsidized product, while simultaneously retarding the efficient supply of that product that vast financial and economic imbalances in the energy sector may occur. Worldwide, the demand for middle distillates in recent years has increased from about 35 to 38% of the crude oil barrel. In the countries cited above, as in many other subsidizers, the middle distillate proportion in the demand barrel can range from 50–60%.
Countries import middle distillates at market prices and sell them for less; or worse, they build expensive refinery add-ons solely to meet middle distillate demand and then sell the products for less than the cost of production. By rendering the oil refining sector less profitable than would otherwise be the case, subsidies stunt the investment in new technology and clean fuels needed to meet increasingly stringent environmental demands for reducing plain old pollution (lead additives for gasoline, volatile organic compounds, CO, sulphur).
Simply put, where middle distillate subsidies are present, the country’s approach to meeting refined oil product demand is tantamount to fighting chemistry. There is almost no way to make a barrel of oil produce a 50–60% yield of diesel, jet fuel and kerosene at a reasonable cost (yes, it can be done at an unreasonable cost, just as you can grow bananas in Alaska – that doesn’t make it a good investment). Pressure, heat and catalysts will almost always generate other products, gasoline and LPGs, as well as (some) HFO.
Ending Oil-Product Subsidies Offers an Environmental Upside
A country with refined-product subsidies will tend to consume more oil products than it might without below-market pricing. At the same time, as long as refiners lack the financial capability (or even the desire) to invest in better yields of light products, they will try to meet demand in the least expensive way, either importing middle distillate products or refining more crude in simple refineries. (Note: Countries without any oil refineries tend not to subsidize the consumption of these products).
In a simple refining configuration, about one third of the output is heavy fuel oil, assuming a light crude is used. Heavier crudes may yield more than 40% HFO from simple distillation. The proportion of middle distillates and gasolines are about equal, at roughly 30–35%, depending on cut points and the specifics of the crude oil used. Such a refinery cannot produce a demand barrel that is more than 50% middle distillates. So the refiner will export some of the unwanted gasoline and HFO and import middle distillates. If this is done at the margin, then there is little or no impact on prices and product availability, but if it is general practice, then the prices for the exported gasoline, naphtha and HFO products will tend to be depressed. The financial impacts on a refiner of selling middle distillates below cost and other products at depressed prices virtually guarantees continuous financial stress for such companies.
If a refining company could recoup its investments in upgrading low quality feeds and avoid selling unfinished gasolines and HFO at distressed prices, then they might be able to build a better refinery. In a highly complex refinery, with full reduction of heavy byproducts, middle distillate yields rarely rise above 40%. With a mix of various unappetizing heavy, high sulphur crudes and HFO, Valero Energy’s Delaware City refinery produces 40% middle distillates, 53% gasolines, 3% HFO, and precious little else. Even the petroleum coke, about 1% of output, is recycled to generate electric power.
The roughly 155,000 b/d of light products produced in Valero’s complex refinery requires just 170,000 b/d of low quality feed. A simple refinery will need roughly 240,000 b/d to produce the same yield of light products. If rest of the world were able to replicate the efficiency of the U.S. refining sector, then current demand for gasoline and middle distillates, LPGs and chemical feedstocks could be met with 10–15% less (lower quality) crude oil each day, even allowing for lags in adoption.
Shifting the HFO now used to generate electricity to natural gas, where feasible, would result in a substantial reduction in CO2 emissions. Worldwide, the consumption of HFO for power generation and industry is about 10 million b/d, 12% of total oil demand. Reducing the crude oil distillation that is rendered unnecessary with modern technology, and replacing current industrial and utility consumption of HFO with natural gas, an excellent financial option for most countries, could result in a net annual reduction in CO2 emissions of more than 500 million tonnes, more than the CO2 emissions from all natural gas flaring worldwide.[1]
The moral of the story is that fighting the market and fighting chemistry is a bad idea – bad for profits, bad for oil reserves and bad for the environment. There is literally no other set of investments in the next 10–15 years that could reduce air pollution (and CO2 emissions) as dramatically as the investments induced by good oil pricing policies. It is literally equivalent to removing 20% of U.S. power generation capacity from service, a feat that is beyond the wildest dreams of any renewable energy advocate.
Notes
[1] This reduction is calculated as follows:
Nine million barrels per day (b/d) of HFO, when burned, creates 1.55*109 T/year CO2 – all this HFO could go into fuels production, displacing crude oil, since the demand for the light products is evident.
An equivalent power or industrial output from natural gas creates no more than 1.08*109 T/year CO2. Efficiencies more typical of natural gas use in power would lower this energy equivalence figure to about 560 million T/year CO2.
The differential, about 500-1,000 million T/year CO2, is greater than the known emissions from gas flaring worldwide (see Chapter 6).
Reckless 'Endangerment' - The Obama EPA plays 'Dirty Harry' on cap and trade
Reckless 'Endangerment'. WSJ Editorial
The Obama EPA plays 'Dirty Harry' on cap and trade.
WSJ, Apr 24, 2009
President Obama's global warming agenda has been losing support in Congress, but why let an irritant like democratic consent interfere with saving the world? So last Friday the Environmental Protection Agency decided to put a gun to the head of Congress and play cap-and-trade roulette with the U.S. economy.
The pistol comes in the form of a ruling that carbon dioxide is a dangerous pollutant that threatens the public and therefore must be regulated under the 1970 Clean Air Act. This so-called "endangerment finding" sets the clock ticking on a vast array of taxes and regulation that EPA will have the power to impose across the economy, and all with little or no political debate.
This is a momentous decision that has the potential to affect the daily life of every American, yet most of the media barely noticed, and those that did largely applauded. When America's Founders revolted against "taxation without representation," this is precisely the kind of kingly diktat they had in mind.
Michigan Democrat John Dingell helped to write the Clean Air Act, as well as its 1990 revision, and he says neither was meant to apply to carbon. But in 2007 five members of the Supreme Court followed the environmental polls and ordered the EPA to determine if CO2 qualified as a "pollutant." The Bush Administration prudently slow-walked the decision. As Peter Glaser, an environmental lawyer at Troutman Sanders, told Congress in 2008, "The country will experience years, if not decades, of regulatory agony, as EPA will be required to undertake numerous, controversial, time-consuming, expensive and difficult regulatory proceedings, all of which ultimately will be litigated."
The Obama EPA has now opened this Pandora's box. The centerpiece of the Clean Air Act is something called the National Ambient Air Quality Standards, or NAAQS, under which the EPA decides the appropriate atmospheric concentration of a given air pollutant. Under this law the states must adopt measures to meet a NAAQS goal, and the costs cannot be considered. For global warming, this is going to be a hugely expensive futility parade.
Greenhouse gases mix in the atmosphere, and it doesn't matter where they come from. A ton of emissions from Ohio has the same effect on global CO2 as a ton emitted in China; and even if Ohio figured out a way to reduce its emissions to zero, it would still have no control over the carbon content in its ambient air. But under the law, EPA would be required to severely punish Ohio -- and every state -- for not complying with NAAQS.
Under the Clean Air Act, the EPA also must regulate all "major" sources of emissions that emit more than 250 tons of an air pollutant in a year. That includes "any building, structure, facility or installation." This might be a reasonable threshold for conventional pollutants such as SOX or NOX, but it's extremely low for carbon. Hundreds of thousands of currently unregulated sources will suddenly be subject to the EPA's preconstruction permitting and review, including schools, hospitals, malls, restaurants, farms and colleges. According to EPA, the average permit today takes 866 hours for a source to prepare, and 301 hours for EPA to process. So this regulatory burden will increase by several orders of magnitude.
The EPA took the highly unusual step of not accompanying its endangerment finding with actual proposed regulations. For now, EPA Administrator Lisa Jackson claims her agency will only target cars and trucks. That is bad enough. It probably means, for example, that California's mileage fleet burdens will seep out to every other state. So even as taxpayers are now paying tens of billions of dollars to prop up GM and Chrysler, Ms. Jackson will be able to tell the entire auto industry it must make even more small cars that consumers don't want to buy.
Still, why confine the rule only to cars and trucks? By the EPA's own logic, it shouldn't matter where carbon emissions come from. Carbon from a car's tailpipe is the same as carbon from a coal-fired power plant. And transportation is responsible for only 28% of U.S. emissions, versus 34% for electricity generation. Ms. Jackson is clearly trying to limit the immediate economic impact of her ruling, so as not to ignite too great a business or consumer backlash.
But her half-measure is also too clever by half. By finding carbon a public danger, she is inviting lawsuits from environmental lobbies demanding that EPA regulate all carbon sources. Massachusetts and two other states have already sued in federal court to force the EPA to create a NAAQS for CO2.
Which brings us back to the Obama Administration's political roulette. Democrats know that their cap-and-tax agenda is losing ground, notably among Midwestern Senators. The EPA "endangerment" is intended to threaten businesses and state and local governments until they surrender and support the Obama agenda. The car industry is merely the first target, meant to be the object lesson.
Massachusetts Democrat Ed Markey put it this way at MIT recently: "Do you want the EPA to make the decision or would you like your Congressman or Senator to be in the room and drafting legislation? . . . Industries across the country will just have to gauge for themselves how lucky they feel if they kill legislation in terms of how the EPA process will include them."
This "Dirty Harry" theory of governance -- Do you feel lucky? -- is as cynical as it is destructive. And contra Mr. Markey, if cap and tax is killed this year, it will be done in by Democrats, many of whom are starting to realize the economic harm it would inflict. In March, the Senate voted 89 to 8 on a resolution vowing to pass a climate bill only if "such legislation does not increase electricity or gasoline prices."
That's called democracy, but for the Obama Administration such debate is an inconvenient truth. If they can't get Congress to pass their agenda, they'll use EPA and the courts to impose it. How lucky do you feel?
The Obama EPA plays 'Dirty Harry' on cap and trade.
WSJ, Apr 24, 2009
President Obama's global warming agenda has been losing support in Congress, but why let an irritant like democratic consent interfere with saving the world? So last Friday the Environmental Protection Agency decided to put a gun to the head of Congress and play cap-and-trade roulette with the U.S. economy.
The pistol comes in the form of a ruling that carbon dioxide is a dangerous pollutant that threatens the public and therefore must be regulated under the 1970 Clean Air Act. This so-called "endangerment finding" sets the clock ticking on a vast array of taxes and regulation that EPA will have the power to impose across the economy, and all with little or no political debate.
This is a momentous decision that has the potential to affect the daily life of every American, yet most of the media barely noticed, and those that did largely applauded. When America's Founders revolted against "taxation without representation," this is precisely the kind of kingly diktat they had in mind.
Michigan Democrat John Dingell helped to write the Clean Air Act, as well as its 1990 revision, and he says neither was meant to apply to carbon. But in 2007 five members of the Supreme Court followed the environmental polls and ordered the EPA to determine if CO2 qualified as a "pollutant." The Bush Administration prudently slow-walked the decision. As Peter Glaser, an environmental lawyer at Troutman Sanders, told Congress in 2008, "The country will experience years, if not decades, of regulatory agony, as EPA will be required to undertake numerous, controversial, time-consuming, expensive and difficult regulatory proceedings, all of which ultimately will be litigated."
The Obama EPA has now opened this Pandora's box. The centerpiece of the Clean Air Act is something called the National Ambient Air Quality Standards, or NAAQS, under which the EPA decides the appropriate atmospheric concentration of a given air pollutant. Under this law the states must adopt measures to meet a NAAQS goal, and the costs cannot be considered. For global warming, this is going to be a hugely expensive futility parade.
Greenhouse gases mix in the atmosphere, and it doesn't matter where they come from. A ton of emissions from Ohio has the same effect on global CO2 as a ton emitted in China; and even if Ohio figured out a way to reduce its emissions to zero, it would still have no control over the carbon content in its ambient air. But under the law, EPA would be required to severely punish Ohio -- and every state -- for not complying with NAAQS.
Under the Clean Air Act, the EPA also must regulate all "major" sources of emissions that emit more than 250 tons of an air pollutant in a year. That includes "any building, structure, facility or installation." This might be a reasonable threshold for conventional pollutants such as SOX or NOX, but it's extremely low for carbon. Hundreds of thousands of currently unregulated sources will suddenly be subject to the EPA's preconstruction permitting and review, including schools, hospitals, malls, restaurants, farms and colleges. According to EPA, the average permit today takes 866 hours for a source to prepare, and 301 hours for EPA to process. So this regulatory burden will increase by several orders of magnitude.
The EPA took the highly unusual step of not accompanying its endangerment finding with actual proposed regulations. For now, EPA Administrator Lisa Jackson claims her agency will only target cars and trucks. That is bad enough. It probably means, for example, that California's mileage fleet burdens will seep out to every other state. So even as taxpayers are now paying tens of billions of dollars to prop up GM and Chrysler, Ms. Jackson will be able to tell the entire auto industry it must make even more small cars that consumers don't want to buy.
Still, why confine the rule only to cars and trucks? By the EPA's own logic, it shouldn't matter where carbon emissions come from. Carbon from a car's tailpipe is the same as carbon from a coal-fired power plant. And transportation is responsible for only 28% of U.S. emissions, versus 34% for electricity generation. Ms. Jackson is clearly trying to limit the immediate economic impact of her ruling, so as not to ignite too great a business or consumer backlash.
But her half-measure is also too clever by half. By finding carbon a public danger, she is inviting lawsuits from environmental lobbies demanding that EPA regulate all carbon sources. Massachusetts and two other states have already sued in federal court to force the EPA to create a NAAQS for CO2.
Which brings us back to the Obama Administration's political roulette. Democrats know that their cap-and-tax agenda is losing ground, notably among Midwestern Senators. The EPA "endangerment" is intended to threaten businesses and state and local governments until they surrender and support the Obama agenda. The car industry is merely the first target, meant to be the object lesson.
Massachusetts Democrat Ed Markey put it this way at MIT recently: "Do you want the EPA to make the decision or would you like your Congressman or Senator to be in the room and drafting legislation? . . . Industries across the country will just have to gauge for themselves how lucky they feel if they kill legislation in terms of how the EPA process will include them."
This "Dirty Harry" theory of governance -- Do you feel lucky? -- is as cynical as it is destructive. And contra Mr. Markey, if cap and tax is killed this year, it will be done in by Democrats, many of whom are starting to realize the economic harm it would inflict. In March, the Senate voted 89 to 8 on a resolution vowing to pass a climate bill only if "such legislation does not increase electricity or gasoline prices."
That's called democracy, but for the Obama Administration such debate is an inconvenient truth. If they can't get Congress to pass their agenda, they'll use EPA and the courts to impose it. How lucky do you feel?
Wednesday, April 22, 2009
According to an MIT study, cap and trade could cost the average household more than $3,900 per year
Fuzzy Math. By John McCormack
According to an MIT study, cap and trade could cost the average household more than $3,900 per year.
Apr 22, 2009 12:00:00 AM
Excerpts:
It's just another inconvenient truth: If Americans want any of the government remedies that would supposedly save a planet allegedly imperiled by global warming, it's going to cost them.
Just how much it will cost them has been a point of contention lately. Many congressional Republicans, including members of the GOP leadership, have claimed that the plan to limit carbon emissions through cap and trade would cost the average household more than $3,100 per year. According to an MIT study, between 2015 and 2050 cap and trade would annually raise an average of $366 billion in revenues (divided by 117 million households equals $3,128 per household, the Republicans reckon).
But on March 24, after interviewing one of the MIT professors who conducted the study on which the GOP relied to produce its estimate, the St. Petersburg Times fact-check unit, Politifact, declared the GOP figure of $3,100 per household was a "Pants on Fire" falsehood. The GOP claim is "just wrong," MIT professor John Reilly told Politifact. "It's wrong in so many ways it's hard to begin."
According to Politifact, Reilly's report included an "estimate of the net cost to individuals" that "would be $215.05 per household. A far cry from $3,128."
Running with Politifact's report, bloggers at Think Progress called the GOP's claim a "deliberate lie," a "myth", and an "outright lie". On April 1, MSNBC's Keith Olbermann said that cap and trade's "average additional cost per family six years from now would be 79 bucks, minus the amount foreign gas prices would drop based on decreased demand, and minus lowered health care costs, because of the cleaner atmosphere. Thirty-one bucks, 3,100 bucks, it's all the
same to Congressman John the mathlete Boehner, today's worst person in the world." On April 8, MSNBC's Rachel Maddow said of the GOP's figure: "No. Pants on fire. The MIT guy says 'no.' That's not what the study says. Not true. You can't say that."
[...]
When the Star-Tribune's opinion page editor Eric Ringham was contacted about Bachmann's use of the figure, he apologized for letting her include it in her column. "It wasn't on my radar. I'm embarrassed to have let it go unchallenged," Ringham told Think Progress. "You can rest assured this study is never going to be represented in the paper again . . . without confirmation it's being accurately portrayed."
[...]
But, as the saying goes, a lie can make its way halfway around the world while the truth is putting its shoes on. During a lengthy email exchange last week with THE WEEKLY STANDARD, MIT professor John Reilly admitted that his original estimate of cap and trade's cost was inaccurate. The annual cost would be "$800 per household", he wrote. "I made a boneheaded mistake in an excel spread sheet. I have sent a new letter to Republicans correcting my error (and to others)."
While $800 is significantly more than Reilly's original estimate of $215 (not to mention more than Obama's middle-class tax cut), it turns out that Reilly is still low-balling the cost of cap and trade by using some fuzzy logic. In reality, cap and trade could cost the average household more than $3,900 per year.
The $800 paid annually per household is merely the "cost to the economy [that] involves all those actions people have to take to reduce their use of fossil fuels or find ways to use them without releasing [Green House Gases]," Reilly wrote. "So that might involve spending money on insulating your home, or buying a more expensive hybrid vehicle to drive, or electric utilities substituting gas (or wind, nuclear, or solar) instead of coal in power generation, or industry investing in more efficient motors or production processes, etc. with all of these things ending up reflected in the costs of good and services in the economy."
In other words, Reilly estimates that "the amount of tax collected" through companies would equal $3,128 per household--and "Those costs do get passed to consumers and income earners
in one way or another"--but those costs have "nothing to do with the real cost" to the economy. Reilly assumes that the $3,128 will be "returned" to each household. Without that assumption, Reilly wrote, "the cost would then be the Republican estimate [$3,128] plus the cost I estimate [$800]."
In Reilly's view, the $3,128 taken through taxes will be "returned" to each household whether or not the government cuts a $3,128 rebate check to each household.
He wrote in an email:
It is not really a matter of returning it or not, no matter what happens this revenue gets recycled into the economy some way. In that regard, whether the money is specifically returned to households with a check that says "your share of GHG auction revenue", used to cut someone's taxes, used to pay for some government services that provide benefit to the public, or simply used to offset the deficit (therefore meaning lower Government debt and lower taxes sometime in the future when that debt comes due) is largely irrelevant in the calculation of the "average" household. Each of those ways of using the revenue has different implications for specific households but the "average" affect is still the same. [...] The only way that money does not get recycled to the "average" household is if it is spent on something that provides no useful service for anyone--that it is true government waste.
He added later: "I am simply saying that once [the tax funds are] collected they are not worthless, they have value. If the Republicans were to focus on that revenue, and their message was to rally the public to make sure all this money was returned in a check to each household rather than spent on other public services then I would have no problem with their use of our number."
Most Americans probably care a great deal whether they would get to spend that $3,128 themselves or the government spends it on programs to put a chicken in every pot and a Prius in every garage. And the fact is, it's anybody's guess how cap-and-trade revenues would end up being spent. Obama has suggested he would like to use most of cap-and-trade revenues to fund his "making work pay" middle- and lower-class tax credit ($400 per individual and $800 per family per year). Congressional Democrats have left the door open to spending the revenues to "invest in clean energy jobs and cost-saving energy efficient technology," as Rep. Markey's staffers have written.
After corresponding with Reilly, I contacted Politifact's reporter Alexander Lane and editor Bill Adair to ask if they would correct their report that the GOP's estimate of cap and trade's cost is a "pants on fire" falsehood.
Lane wrote in an email: "The detail of my piece that you think needs correcting seems to be in flux...". The "detail" to which he referred was Reilly's admission that the real cost per household would be $800--not $215 per household as Politifact originally reported.
While the discrepancy between these figures was solely Reilly's fault, Politifact's report contained inaccuracies that it should have been able to avoid. Politifact accepted Reilly's logic that the $3,128 collected per household via taxes translates to a net-cost of $0 per household. It reported that "results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices," but it didn't make clear that Reilly's estimate of the "real cost"--which didn't include the $3,128 per household--already accounts for these downward pressures. "Moreover," Politifact added, "consumers would get some of the tax back from the government in some form." In fact, Reilly assumed that all--not "some"--of the tax revenue would be returned. Politifact and other news outlets reporting on Reilly's criticism of the GOP's estimate have not made it clear that taxpayers would "get" some or most of this money back through government spending.
When I asked Bill Adair over the phone last week if Politifact would correct its report, he didn't answer the question and ended our conversation by saying: "You're getting me at a really bad time. I would love to talk about this any time tomorrow." Adair did not reply to further inquiries.
On Monday, Politifact won a Pulitzer prize. It has not yet corrected its report.
John McCormack is a deputy online editor at THE WEEKLY STANDARD.
Correction: An earlier version of this article incorrectly reported that Reilly's estimated "real cost" per household was $800 for a family of four. In fact, Reilly calculated this $800 cost for the average-sized American household--2.56 people, the same figure Republicans used in their calculation.
According to an MIT study, cap and trade could cost the average household more than $3,900 per year.
Apr 22, 2009 12:00:00 AM
Excerpts:
It's just another inconvenient truth: If Americans want any of the government remedies that would supposedly save a planet allegedly imperiled by global warming, it's going to cost them.
Just how much it will cost them has been a point of contention lately. Many congressional Republicans, including members of the GOP leadership, have claimed that the plan to limit carbon emissions through cap and trade would cost the average household more than $3,100 per year. According to an MIT study, between 2015 and 2050 cap and trade would annually raise an average of $366 billion in revenues (divided by 117 million households equals $3,128 per household, the Republicans reckon).
But on March 24, after interviewing one of the MIT professors who conducted the study on which the GOP relied to produce its estimate, the St. Petersburg Times fact-check unit, Politifact, declared the GOP figure of $3,100 per household was a "Pants on Fire" falsehood. The GOP claim is "just wrong," MIT professor John Reilly told Politifact. "It's wrong in so many ways it's hard to begin."
According to Politifact, Reilly's report included an "estimate of the net cost to individuals" that "would be $215.05 per household. A far cry from $3,128."
Running with Politifact's report, bloggers at Think Progress called the GOP's claim a "deliberate lie," a "myth", and an "outright lie". On April 1, MSNBC's Keith Olbermann said that cap and trade's "average additional cost per family six years from now would be 79 bucks, minus the amount foreign gas prices would drop based on decreased demand, and minus lowered health care costs, because of the cleaner atmosphere. Thirty-one bucks, 3,100 bucks, it's all the
same to Congressman John the mathlete Boehner, today's worst person in the world." On April 8, MSNBC's Rachel Maddow said of the GOP's figure: "No. Pants on fire. The MIT guy says 'no.' That's not what the study says. Not true. You can't say that."
[...]
When the Star-Tribune's opinion page editor Eric Ringham was contacted about Bachmann's use of the figure, he apologized for letting her include it in her column. "It wasn't on my radar. I'm embarrassed to have let it go unchallenged," Ringham told Think Progress. "You can rest assured this study is never going to be represented in the paper again . . . without confirmation it's being accurately portrayed."
[...]
But, as the saying goes, a lie can make its way halfway around the world while the truth is putting its shoes on. During a lengthy email exchange last week with THE WEEKLY STANDARD, MIT professor John Reilly admitted that his original estimate of cap and trade's cost was inaccurate. The annual cost would be "$800 per household", he wrote. "I made a boneheaded mistake in an excel spread sheet. I have sent a new letter to Republicans correcting my error (and to others)."
While $800 is significantly more than Reilly's original estimate of $215 (not to mention more than Obama's middle-class tax cut), it turns out that Reilly is still low-balling the cost of cap and trade by using some fuzzy logic. In reality, cap and trade could cost the average household more than $3,900 per year.
The $800 paid annually per household is merely the "cost to the economy [that] involves all those actions people have to take to reduce their use of fossil fuels or find ways to use them without releasing [Green House Gases]," Reilly wrote. "So that might involve spending money on insulating your home, or buying a more expensive hybrid vehicle to drive, or electric utilities substituting gas (or wind, nuclear, or solar) instead of coal in power generation, or industry investing in more efficient motors or production processes, etc. with all of these things ending up reflected in the costs of good and services in the economy."
In other words, Reilly estimates that "the amount of tax collected" through companies would equal $3,128 per household--and "Those costs do get passed to consumers and income earners
in one way or another"--but those costs have "nothing to do with the real cost" to the economy. Reilly assumes that the $3,128 will be "returned" to each household. Without that assumption, Reilly wrote, "the cost would then be the Republican estimate [$3,128] plus the cost I estimate [$800]."
In Reilly's view, the $3,128 taken through taxes will be "returned" to each household whether or not the government cuts a $3,128 rebate check to each household.
He wrote in an email:
It is not really a matter of returning it or not, no matter what happens this revenue gets recycled into the economy some way. In that regard, whether the money is specifically returned to households with a check that says "your share of GHG auction revenue", used to cut someone's taxes, used to pay for some government services that provide benefit to the public, or simply used to offset the deficit (therefore meaning lower Government debt and lower taxes sometime in the future when that debt comes due) is largely irrelevant in the calculation of the "average" household. Each of those ways of using the revenue has different implications for specific households but the "average" affect is still the same. [...] The only way that money does not get recycled to the "average" household is if it is spent on something that provides no useful service for anyone--that it is true government waste.
He added later: "I am simply saying that once [the tax funds are] collected they are not worthless, they have value. If the Republicans were to focus on that revenue, and their message was to rally the public to make sure all this money was returned in a check to each household rather than spent on other public services then I would have no problem with their use of our number."
Most Americans probably care a great deal whether they would get to spend that $3,128 themselves or the government spends it on programs to put a chicken in every pot and a Prius in every garage. And the fact is, it's anybody's guess how cap-and-trade revenues would end up being spent. Obama has suggested he would like to use most of cap-and-trade revenues to fund his "making work pay" middle- and lower-class tax credit ($400 per individual and $800 per family per year). Congressional Democrats have left the door open to spending the revenues to "invest in clean energy jobs and cost-saving energy efficient technology," as Rep. Markey's staffers have written.
After corresponding with Reilly, I contacted Politifact's reporter Alexander Lane and editor Bill Adair to ask if they would correct their report that the GOP's estimate of cap and trade's cost is a "pants on fire" falsehood.
Lane wrote in an email: "The detail of my piece that you think needs correcting seems to be in flux...". The "detail" to which he referred was Reilly's admission that the real cost per household would be $800--not $215 per household as Politifact originally reported.
While the discrepancy between these figures was solely Reilly's fault, Politifact's report contained inaccuracies that it should have been able to avoid. Politifact accepted Reilly's logic that the $3,128 collected per household via taxes translates to a net-cost of $0 per household. It reported that "results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices," but it didn't make clear that Reilly's estimate of the "real cost"--which didn't include the $3,128 per household--already accounts for these downward pressures. "Moreover," Politifact added, "consumers would get some of the tax back from the government in some form." In fact, Reilly assumed that all--not "some"--of the tax revenue would be returned. Politifact and other news outlets reporting on Reilly's criticism of the GOP's estimate have not made it clear that taxpayers would "get" some or most of this money back through government spending.
When I asked Bill Adair over the phone last week if Politifact would correct its report, he didn't answer the question and ended our conversation by saying: "You're getting me at a really bad time. I would love to talk about this any time tomorrow." Adair did not reply to further inquiries.
On Monday, Politifact won a Pulitzer prize. It has not yet corrected its report.
John McCormack is a deputy online editor at THE WEEKLY STANDARD.
Correction: An earlier version of this article incorrectly reported that Reilly's estimated "real cost" per household was $800 for a family of four. In fact, Reilly calculated this $800 cost for the average-sized American household--2.56 people, the same figure Republicans used in their calculation.
Tuesday, April 21, 2009
Will Global Warming Make Future Generations Worse Off?
Will Global Warming Make Future Generations Worse Off? (No, according to realistic analysis). By Indur Goklany
Master Resource, April 20, 2009
Some people argue that we are morally obliged to reduce greenhouse gases aggressively because otherwise the world’s current development path would be unsustainable, and our descendants will be worse off than we are.
But will a warmer world be unsustainable, and leave our descendants worse off?
I have examined these claims out to the year 2200, using the IPCC’s own assumptions regarding future economic development and results generated by the Stern Review on the economics of climate change. Note that both the IPCC and Stern are viewed quite favorably by proponents of drastic GHG reductions (see, e.g., here).
The first figure (see [here]) shows for both developing and industrialized countries, the GDP per capita — an approximate measure of welfare per capita — used in the IPCC’s emissions scenarios in the absence of any climate change in 1990 (the base year used to develop the IPCC’s emission scenarios) and 2100.
For 2100, the figure shows the GDP per capita assumed in each of four representative IPCC scenarios used in the Stern Review. These scenarios are arranged with the warmest (A1FI) scenario on the left and the coolest (B1) on the right. Below each set of bars, the figure indicates the IPCC’s designation for that scenario (A1FI, A2, B1 and B2) and the corresponding projected increase in average global temperature from 1990 to 2085 (which ranges from 2.1–4.0°C).
This figure shows that, per the IPCC, in the absence of climate change, GDP per capita would grow between 11- and 67-fold for developing countries, and between 3- and 8-fold for industrialized countries. [Some people have complained that these GDPs per capita are implausibly high. If that’s the case then the IPCC’s estimates of climate change are also implausibly high, since these GDPs per capita are used to drive the IPCC’s emissions and climate change scenarios.]
Although the IPCC did not provide any estimates for 2200, the Stern Review assumed an annual growth rate of 1.3 percent after 2100 (Stern Review, Box 6.3). In my calculations below I will assume a more modest growth rate. Specifically, I assume that GDP per capita would double between 2100 and 2200, which is equivalent to an annual increase of 0.7 percent. This is also conservative in light of historical experience: GDP per capita quintupled between 1900 and 2000 (per Maddison 2003).
But climate change might reduce future welfare per capita. Stern famously estimated that unmitigated climate change would reduce welfare by an amount equivalent to a reduction in consumption per capita of 5-20 percent “now and forever” if one accounts for market impacts, non-market (that is, health and environmental) impacts, and the risk of catastrophe. He also raised the spectre that under the warmest (A1FI) scenario, the 95th percentile of the welfare losses due to climate change could rise from 7.5 percent in 2100 to 35.2 percent in 2200.
For the sake of argument and extreme caution, I will assume that the loss in welfare due to uncontrolled climate change under the warmest scenario (A1FI) will indeed equal Stern’s 95th percentile estimate of 35.2 percent. I make this assumption despite the fact that one can’t be too skeptical of centuries-long projections based not only on uncertain climate models but equally uncertain socioeconomic and technological trends. To quote from a paper commissioned by the Stern Review: “changes in socioeconomic systems cannot be projected semi-realistically for more than 5–10 years at a time.” [Emphasis added.] Second, the Review itself emphasizes “strongly” that the numbers should not “be taken too literally.” No less important, many notable economists have even disputed the Stern Review’s more modest 5-20% estimate for losses as overblown (e.g., Yale’s William Nordhaus and Hamburg’s Richard Tol). [The IPCC itself uses 5 percent as the upper limit.]
[For details on the methodology used to estimate welfare losses for the other scenarios check out my paper, Discounting the Future, in the latest issue of Regulation magazine. ]
The figure [here] shows the net welfare per capita in 2100 and 2200 after adjusting GDP per capita in the absence of climate change downward to account for welfare losses due to uncontrolled climate change per the Stern Review’s 95th percentile estimate. To put the numbers in this figure into context, in 2006, GDP per capita for industrialized countries was $19,300; the United States, $30,100; and developing countries, $1,500.
Note that net welfare per capita in 2200 is underestimated for each scenario because the GDPs per capita in the absence of climate change were underestimated while welfare losses due to climate change were overestimated.
This figure shows that notwithstanding gross inflation of the adverse impacts of uncontrolled climate change:
· Under each scenario, for both developing and industrialized countries, net welfare increases from 1990 to 2100, and from 2100 to 2200. Thus Nobelist Robert Solow’s (1993) criterion for sustainable development — namely, that current generations should “endow [future generations] with whatever it takes to achieve a standard of living at least as good as our own” — should be easily met. In other words, if the world’s current developmental path is unsustainable, it won’t be because of climate change.
· Well-being in both 2100 and 2200 should, in the aggregate, be highest for the richest-but-warmest (A1FI) scenario and lowest for the poorest (A2) scenario, again regardless of climate change. That is the richest-but-warmest world is to be preferred over poorer-but-cooler worlds. Thus, if humanity could choose between the four IPCC scenarios, for the next several decades it should choose to realize the richest-but-warmest (A1FI) world. In other words, in order to improve net welfare, governments should be striving to push their countries on the path of higher wealth rather than lower carbon. So why are the world’s governments trying to negotiate a deal in Copenhagen later this year that would make their populations poorer and reduce their welfare?
· Net welfare per capita in both developing and industrialized countries should be much higher in 2100 than in 1990, and higher still in 2200, notwithstanding any climate change or which scenario one picks. That is, regardless of the circumstance, future generations, particularly in today’s developing countries, will be better off than current generations. Thus the premise underlying the argument that we are morally obliged to control emissions now to ensure that future generations won’t be worse off isn’t supported by the Stern Review’s own analysis.
Conclusion
In fact, the above raises the question whether it is moral to require today’s poorer generations to spend their scarce resource on anthropogenic GHG-induced global warming — a problem that may or may not be faced by future, far wealthier, and technologically better endowed generations — instead of the more urgent, real problems that plague current generations and will continue to plague future generations as well.
Master Resource, April 20, 2009
Some people argue that we are morally obliged to reduce greenhouse gases aggressively because otherwise the world’s current development path would be unsustainable, and our descendants will be worse off than we are.
But will a warmer world be unsustainable, and leave our descendants worse off?
I have examined these claims out to the year 2200, using the IPCC’s own assumptions regarding future economic development and results generated by the Stern Review on the economics of climate change. Note that both the IPCC and Stern are viewed quite favorably by proponents of drastic GHG reductions (see, e.g., here).
The first figure (see [here]) shows for both developing and industrialized countries, the GDP per capita — an approximate measure of welfare per capita — used in the IPCC’s emissions scenarios in the absence of any climate change in 1990 (the base year used to develop the IPCC’s emission scenarios) and 2100.
For 2100, the figure shows the GDP per capita assumed in each of four representative IPCC scenarios used in the Stern Review. These scenarios are arranged with the warmest (A1FI) scenario on the left and the coolest (B1) on the right. Below each set of bars, the figure indicates the IPCC’s designation for that scenario (A1FI, A2, B1 and B2) and the corresponding projected increase in average global temperature from 1990 to 2085 (which ranges from 2.1–4.0°C).
This figure shows that, per the IPCC, in the absence of climate change, GDP per capita would grow between 11- and 67-fold for developing countries, and between 3- and 8-fold for industrialized countries. [Some people have complained that these GDPs per capita are implausibly high. If that’s the case then the IPCC’s estimates of climate change are also implausibly high, since these GDPs per capita are used to drive the IPCC’s emissions and climate change scenarios.]
Although the IPCC did not provide any estimates for 2200, the Stern Review assumed an annual growth rate of 1.3 percent after 2100 (Stern Review, Box 6.3). In my calculations below I will assume a more modest growth rate. Specifically, I assume that GDP per capita would double between 2100 and 2200, which is equivalent to an annual increase of 0.7 percent. This is also conservative in light of historical experience: GDP per capita quintupled between 1900 and 2000 (per Maddison 2003).
But climate change might reduce future welfare per capita. Stern famously estimated that unmitigated climate change would reduce welfare by an amount equivalent to a reduction in consumption per capita of 5-20 percent “now and forever” if one accounts for market impacts, non-market (that is, health and environmental) impacts, and the risk of catastrophe. He also raised the spectre that under the warmest (A1FI) scenario, the 95th percentile of the welfare losses due to climate change could rise from 7.5 percent in 2100 to 35.2 percent in 2200.
For the sake of argument and extreme caution, I will assume that the loss in welfare due to uncontrolled climate change under the warmest scenario (A1FI) will indeed equal Stern’s 95th percentile estimate of 35.2 percent. I make this assumption despite the fact that one can’t be too skeptical of centuries-long projections based not only on uncertain climate models but equally uncertain socioeconomic and technological trends. To quote from a paper commissioned by the Stern Review: “changes in socioeconomic systems cannot be projected semi-realistically for more than 5–10 years at a time.” [Emphasis added.] Second, the Review itself emphasizes “strongly” that the numbers should not “be taken too literally.” No less important, many notable economists have even disputed the Stern Review’s more modest 5-20% estimate for losses as overblown (e.g., Yale’s William Nordhaus and Hamburg’s Richard Tol). [The IPCC itself uses 5 percent as the upper limit.]
[For details on the methodology used to estimate welfare losses for the other scenarios check out my paper, Discounting the Future, in the latest issue of Regulation magazine. ]
The figure [here] shows the net welfare per capita in 2100 and 2200 after adjusting GDP per capita in the absence of climate change downward to account for welfare losses due to uncontrolled climate change per the Stern Review’s 95th percentile estimate. To put the numbers in this figure into context, in 2006, GDP per capita for industrialized countries was $19,300; the United States, $30,100; and developing countries, $1,500.
Note that net welfare per capita in 2200 is underestimated for each scenario because the GDPs per capita in the absence of climate change were underestimated while welfare losses due to climate change were overestimated.
This figure shows that notwithstanding gross inflation of the adverse impacts of uncontrolled climate change:
· Under each scenario, for both developing and industrialized countries, net welfare increases from 1990 to 2100, and from 2100 to 2200. Thus Nobelist Robert Solow’s (1993) criterion for sustainable development — namely, that current generations should “endow [future generations] with whatever it takes to achieve a standard of living at least as good as our own” — should be easily met. In other words, if the world’s current developmental path is unsustainable, it won’t be because of climate change.
· Well-being in both 2100 and 2200 should, in the aggregate, be highest for the richest-but-warmest (A1FI) scenario and lowest for the poorest (A2) scenario, again regardless of climate change. That is the richest-but-warmest world is to be preferred over poorer-but-cooler worlds. Thus, if humanity could choose between the four IPCC scenarios, for the next several decades it should choose to realize the richest-but-warmest (A1FI) world. In other words, in order to improve net welfare, governments should be striving to push their countries on the path of higher wealth rather than lower carbon. So why are the world’s governments trying to negotiate a deal in Copenhagen later this year that would make their populations poorer and reduce their welfare?
· Net welfare per capita in both developing and industrialized countries should be much higher in 2100 than in 1990, and higher still in 2200, notwithstanding any climate change or which scenario one picks. That is, regardless of the circumstance, future generations, particularly in today’s developing countries, will be better off than current generations. Thus the premise underlying the argument that we are morally obliged to control emissions now to ensure that future generations won’t be worse off isn’t supported by the Stern Review’s own analysis.
Conclusion
In fact, the above raises the question whether it is moral to require today’s poorer generations to spend their scarce resource on anthropogenic GHG-induced global warming — a problem that may or may not be faced by future, far wealthier, and technologically better endowed generations — instead of the more urgent, real problems that plague current generations and will continue to plague future generations as well.
Sunday, April 19, 2009
Beware green jobs, the new sub-prime
Beware green jobs, the new sub-prime. By Dominic Lawson
Sunday Times, April 19, 2009
When everybody seems to have the same big idea, you just know it can only mean trouble. Remember sub-prime mort-gages? Now universally excoriated as the spawn of the devil, the proximate cause of the credit crunch and all that followed, a few years back “sub-prime” was everyone’s darling. Financiers loved it because it generated sumptuously high-yielding debt instruments; governments, because it promised to make even the poor into proud property owners.
Now business lobbyists and governments on both sides of the Atlantic have got a new big idea. They call it “green jobs”. Leading the pack is, as you might expect, Barack Obama. The president recently defended a vast package of subsidies for renewable energy on the grounds that it would “create millions of additional jobs and entire new industries”.
In Britain, the business secretary, Lord Mandelson, promises billions in state aid for the same purpose. To add verisimilitude, last week he gave a royal wave from the inside of a prototype electric Mini. Mandelson’s chauffeur was a representative of the lower house: the transport secretary, Geoff Hoon.
The occasion for this photo opportunity was the government’s proposal to offer a £5,000 subsidy to anyone buying an electric car of a type not yet available: exact details to be given in Alistair Darling’s forthcoming budget. The idea is to create a “world-beating” British-based electric-car-manufacturing industry, while also attempting to meet Gordon Brown’s promise to have the nation converted to electric or hybrid cars by 2020.
That remarkable prime ministerial pledge predated the recession; its motive was to demonstrate that Britain was “leading the world in the battle against climate change”. We aren’t, as a matter of fact; but under new Labour we have certainly led the world at claiming to do so. Mandelson expressed this almost satirically last week when he declared that “Britain has taken a world lead in setting ambitious targets for carbon reduction”.
As ever, new Labour confuses announcements and newspaper headlines with real action. Whenever it becomes obvious even to ministers that Britain will not meet its current carbon reduction target, they replace it with a yet tougher target, only with an extended deadline.
It does not yet seem to have occurred to new Labour that this is making it look ridiculous, especially to the environmentalists whose support it is presumably trying to solicit. Or perhaps it has, but it would rather that than lose our “world leadership” in target-setting.
There is something almost comical in the government’s belief that the electric car, dependent as it is on the national grid, is a sort of magic recipe for reducing carbon emissions. Some months ago President Sarkozy of France had an identical idea and commissioned a report on the prospects for turning Renault and Citroën into producers of mass-market electric vehicles. The report concluded that “the traditional combustion engine still offers the most realistic prospect of developing cleaner vehicles simply by improving the performance and efficiency of traditional engines and limiting the top speed to 105mph. The overall cost of an electric car remains unfeasible at about double that of a conventional vehicle. Battery technology is still unsatisfactory, severely limiting performance”.
Note that this crushing verdict came in a country where electricity is for the most part generated by nuclear power, which produces . In this country, more than three-quarters of the grid’s power comes from theno CO2 fossil fuels of gas and coal.
Presumably it is the latter that accounts for the fact that when the London borough of Camden commissioned a study to see whether it should introduce electric vehicles for some of its services, it found that “EVs relying on the average UK mix of energy to charge them were responsible for significantly more particles of soot that lodge deeply in the lungs . . . than the average petrol-powered car”.
If all our electricity were to be generated by wind power, without any fossil-fuel back-up, this criticism would not apply. Then the cars could take days, rather than hours, to recharge (depending on the weather) and would be so expensive to run that driving would become the exclusive preserve of the rich.
A further absurdity is that electric cars are suitable only for short rides within urban areas – precisely where we are being encouraged to abandon cars and use public transport. Ken Livingstone exempted electric cars from his congestion charge as if, in addition to their suppositious environmental benefits, they also had the magical property of being incapable of contributing to congestion. As the Ecologist magazine has reported: “The focus on electric vehicles and the political love they get is totally misguided . . . to have that as the spearhead of government transport carbon-reduction policy is insane.”
The magazine is controlled by Zac Goldsmith, the prospective Conservative candidate for Richmond Park and team Cameron’s environmental guru. Last week his colleague George Osborne took a different tack, observing that the absence of plans for a national network of charging points meant that “the Labour plan is like giving people a grant to buy an internal combustion engine, without bothering to set up any petrol stations”. Osborne had his own suggested grant to create “green jobs”: “We will give every household a new entitlement to £6,500 of energy-saving technologies.”
I’m not sure how the Tories came up with the figure of £6,500. It is pointedly bigger than Labour’s proposed £5,000 electric car subsidy; but all these figures are preposterous. If you multiply £6,500 by the number of households in the land, you get to £160 billion, bigger on its own than the national debt that Osborne has repeatedly told us is unaffordable.
Electoral bribes apart, there is a more serious misconception behind the idea that ploughing subsidies into the “green economy” is a sure-fire way of boosting domestic employment. At best it will move people from one economic activity to another. Labour’s plans would subsidise car production workers to move from making conventional models to electric vehicles, which hardly anyone wants to buy. Osborne’s proposals would subsidise the double-glazing and home insulation industry and suck in many workers gainfully employed (without subsidy) elsewhere.
The key to a successful, wealth-generating economy is productivity. Saving energy is what businesses have done already, because it lowers their production costs. The problem with any form of subsidy is that it makes the consumer (through hidden taxes) pay to keep inherently uneconomic businesses “profitable”. Meanwhile, diversified energy companies such as Shell, with plenty of speculatively acquired wind-farm acreage, are salivating at the plans by Obama to introduce cap-and-trade carbon emissions targets for American industry.
Obama’s energy secretary, Steven Chu, had some soothing words for US manufacturing companies that complained that the new policy will make them even less competitive with Chinese exporters, since the people’s republic has indicated that it has no intention of inflicting a similar increase in energy costs on its own producers. He suggested that America might have to introduce some sort of “car-bon-intensive” tariff on Chinese goods. One of China’s envoys, Li Gao, immediately retorted that such a carbon tariff would be a “disaster”, since it could lead to global trade war.
Actually, Mr Li is right: and this is how an achingly fashionable and well-intentioned plan to create “millions of new green jobs” could instead end up making the global economy even sicker than it is already.
Sunday Times, April 19, 2009
When everybody seems to have the same big idea, you just know it can only mean trouble. Remember sub-prime mort-gages? Now universally excoriated as the spawn of the devil, the proximate cause of the credit crunch and all that followed, a few years back “sub-prime” was everyone’s darling. Financiers loved it because it generated sumptuously high-yielding debt instruments; governments, because it promised to make even the poor into proud property owners.
Now business lobbyists and governments on both sides of the Atlantic have got a new big idea. They call it “green jobs”. Leading the pack is, as you might expect, Barack Obama. The president recently defended a vast package of subsidies for renewable energy on the grounds that it would “create millions of additional jobs and entire new industries”.
In Britain, the business secretary, Lord Mandelson, promises billions in state aid for the same purpose. To add verisimilitude, last week he gave a royal wave from the inside of a prototype electric Mini. Mandelson’s chauffeur was a representative of the lower house: the transport secretary, Geoff Hoon.
The occasion for this photo opportunity was the government’s proposal to offer a £5,000 subsidy to anyone buying an electric car of a type not yet available: exact details to be given in Alistair Darling’s forthcoming budget. The idea is to create a “world-beating” British-based electric-car-manufacturing industry, while also attempting to meet Gordon Brown’s promise to have the nation converted to electric or hybrid cars by 2020.
That remarkable prime ministerial pledge predated the recession; its motive was to demonstrate that Britain was “leading the world in the battle against climate change”. We aren’t, as a matter of fact; but under new Labour we have certainly led the world at claiming to do so. Mandelson expressed this almost satirically last week when he declared that “Britain has taken a world lead in setting ambitious targets for carbon reduction”.
As ever, new Labour confuses announcements and newspaper headlines with real action. Whenever it becomes obvious even to ministers that Britain will not meet its current carbon reduction target, they replace it with a yet tougher target, only with an extended deadline.
It does not yet seem to have occurred to new Labour that this is making it look ridiculous, especially to the environmentalists whose support it is presumably trying to solicit. Or perhaps it has, but it would rather that than lose our “world leadership” in target-setting.
There is something almost comical in the government’s belief that the electric car, dependent as it is on the national grid, is a sort of magic recipe for reducing carbon emissions. Some months ago President Sarkozy of France had an identical idea and commissioned a report on the prospects for turning Renault and Citroën into producers of mass-market electric vehicles. The report concluded that “the traditional combustion engine still offers the most realistic prospect of developing cleaner vehicles simply by improving the performance and efficiency of traditional engines and limiting the top speed to 105mph. The overall cost of an electric car remains unfeasible at about double that of a conventional vehicle. Battery technology is still unsatisfactory, severely limiting performance”.
Note that this crushing verdict came in a country where electricity is for the most part generated by nuclear power, which produces . In this country, more than three-quarters of the grid’s power comes from theno CO2 fossil fuels of gas and coal.
Presumably it is the latter that accounts for the fact that when the London borough of Camden commissioned a study to see whether it should introduce electric vehicles for some of its services, it found that “EVs relying on the average UK mix of energy to charge them were responsible for significantly more particles of soot that lodge deeply in the lungs . . . than the average petrol-powered car”.
If all our electricity were to be generated by wind power, without any fossil-fuel back-up, this criticism would not apply. Then the cars could take days, rather than hours, to recharge (depending on the weather) and would be so expensive to run that driving would become the exclusive preserve of the rich.
A further absurdity is that electric cars are suitable only for short rides within urban areas – precisely where we are being encouraged to abandon cars and use public transport. Ken Livingstone exempted electric cars from his congestion charge as if, in addition to their suppositious environmental benefits, they also had the magical property of being incapable of contributing to congestion. As the Ecologist magazine has reported: “The focus on electric vehicles and the political love they get is totally misguided . . . to have that as the spearhead of government transport carbon-reduction policy is insane.”
The magazine is controlled by Zac Goldsmith, the prospective Conservative candidate for Richmond Park and team Cameron’s environmental guru. Last week his colleague George Osborne took a different tack, observing that the absence of plans for a national network of charging points meant that “the Labour plan is like giving people a grant to buy an internal combustion engine, without bothering to set up any petrol stations”. Osborne had his own suggested grant to create “green jobs”: “We will give every household a new entitlement to £6,500 of energy-saving technologies.”
I’m not sure how the Tories came up with the figure of £6,500. It is pointedly bigger than Labour’s proposed £5,000 electric car subsidy; but all these figures are preposterous. If you multiply £6,500 by the number of households in the land, you get to £160 billion, bigger on its own than the national debt that Osborne has repeatedly told us is unaffordable.
Electoral bribes apart, there is a more serious misconception behind the idea that ploughing subsidies into the “green economy” is a sure-fire way of boosting domestic employment. At best it will move people from one economic activity to another. Labour’s plans would subsidise car production workers to move from making conventional models to electric vehicles, which hardly anyone wants to buy. Osborne’s proposals would subsidise the double-glazing and home insulation industry and suck in many workers gainfully employed (without subsidy) elsewhere.
The key to a successful, wealth-generating economy is productivity. Saving energy is what businesses have done already, because it lowers their production costs. The problem with any form of subsidy is that it makes the consumer (through hidden taxes) pay to keep inherently uneconomic businesses “profitable”. Meanwhile, diversified energy companies such as Shell, with plenty of speculatively acquired wind-farm acreage, are salivating at the plans by Obama to introduce cap-and-trade carbon emissions targets for American industry.
Obama’s energy secretary, Steven Chu, had some soothing words for US manufacturing companies that complained that the new policy will make them even less competitive with Chinese exporters, since the people’s republic has indicated that it has no intention of inflicting a similar increase in energy costs on its own producers. He suggested that America might have to introduce some sort of “car-bon-intensive” tariff on Chinese goods. One of China’s envoys, Li Gao, immediately retorted that such a carbon tariff would be a “disaster”, since it could lead to global trade war.
Actually, Mr Li is right: and this is how an achingly fashionable and well-intentioned plan to create “millions of new green jobs” could instead end up making the global economy even sicker than it is already.
Friday, April 17, 2009
Libertarian on EPA's Greenhouse Gases Endangerment Finding
Endangerment Finding: Legislative Hammer or Suicide Note?, by Marlo Lewis
Master Resource, April 17, 2009
EPA’s soon-to-be-published endangerment finding definitely puts a swagger in the step of energy-rationing advocates in the Administration, Congress, and environmental groups. They believe it gives them the whip hand in Congress–a hammer with which to beat opponents into supporting cap-and-tax legislation. This is too clever by half.
Yes, as explained previously, the endangerment finding will trigger a regulatory cascade through multiple provisions of the Clean Air Act (CAA). A strict, letter-of-the-law application of those provisions to carbon dioxide (CO2) and other greenhouse gases would not only raise consumer energy prices. It could also freeze economic development, even shut down much of the economy.
So, it’s not surprising that Team Obama and others think they can frighten opponents into supporting, for example, the Markey-Waxman cap-and-tax bill, which specifically precludes CAA regulation of greenhouse gases under the National Ambient Air Quality Standards (NAAQS) program, the New Source Review (NSR) preconstruction permitting programs, the Title V operating permits program, and the Hazardous Air Pollutant (HAP) program.
But the cap-and-tax faction miscalculate, because the rest of us are not caught between a rock and a hard place. We have a third option: Just say no to cap-and-tax, and then let the Administration take ownership of the rising energy costs, job losses, and GDP impacts that Obama’s EPA inflicts on the country by regulating CO2 under the CAA.
Roger Pielke Jr. concisely explains why the CO2 litigation campaign that begat Massachusetts v. EPA could and should be a political boon to Republicans:
Republicans must be drooling over the possibility that EPA will take extensive regulatory action on climate change. Why? Because the resulting political fallout associated with any actual or perceived downsides (e.g., higher energy prices) will fall entirely on Democrats and the Obama Administration. Far from being an incentive for Congress to act on its own, the looming possibility that EPA will take regulatory action is a strong incentive for Republicans to stalemate Congressional action and a nightmare scenario for Democrats.
Michael Shellenberger of the Breakthrough Institute agrees, pointing out that the Administration’s threat to regulate CO2 under the CAA unless cap-and-tax opponents come along quietly is tantamount to a promise to commit political suicide:
In other words, the White House “threat” to Republicans and moderate Democrats to regulate carbon is the equivalent of threatening your enemy with suicide. (”Don’t make me raise energy prices! You’ll really be in trouble with your voters when I raise their energy prices!”)
The CO2 litigation campaign bespeaks a fundamental contempt for the democratic process. Applying the CAA to CO2 could easily produce a regulatory regime far more costly than the Kyoto Protocol, yet without the people’s elected representatives ever voting on it. Those who instigated the Mass v. EPA case sought to substitute their will for that of Congress. They also sought to create a regulatory nightmare that Congress could fix only by adopting legislation that lawmakers would not otherwise support on the merits.
And now, this litigation strategy could blow up in their faces. ‘Tis a consummation devoutly to be wished. Republicans do have a knack for snatching defeat from the jaws of victory. But with a little coaching from energy realists (okay, a lot of coaching), we may yet protect the economy and the Constitution from Mass v. EPA.
Master Resource, April 17, 2009
EPA’s soon-to-be-published endangerment finding definitely puts a swagger in the step of energy-rationing advocates in the Administration, Congress, and environmental groups. They believe it gives them the whip hand in Congress–a hammer with which to beat opponents into supporting cap-and-tax legislation. This is too clever by half.
Yes, as explained previously, the endangerment finding will trigger a regulatory cascade through multiple provisions of the Clean Air Act (CAA). A strict, letter-of-the-law application of those provisions to carbon dioxide (CO2) and other greenhouse gases would not only raise consumer energy prices. It could also freeze economic development, even shut down much of the economy.
So, it’s not surprising that Team Obama and others think they can frighten opponents into supporting, for example, the Markey-Waxman cap-and-tax bill, which specifically precludes CAA regulation of greenhouse gases under the National Ambient Air Quality Standards (NAAQS) program, the New Source Review (NSR) preconstruction permitting programs, the Title V operating permits program, and the Hazardous Air Pollutant (HAP) program.
But the cap-and-tax faction miscalculate, because the rest of us are not caught between a rock and a hard place. We have a third option: Just say no to cap-and-tax, and then let the Administration take ownership of the rising energy costs, job losses, and GDP impacts that Obama’s EPA inflicts on the country by regulating CO2 under the CAA.
Roger Pielke Jr. concisely explains why the CO2 litigation campaign that begat Massachusetts v. EPA could and should be a political boon to Republicans:
Republicans must be drooling over the possibility that EPA will take extensive regulatory action on climate change. Why? Because the resulting political fallout associated with any actual or perceived downsides (e.g., higher energy prices) will fall entirely on Democrats and the Obama Administration. Far from being an incentive for Congress to act on its own, the looming possibility that EPA will take regulatory action is a strong incentive for Republicans to stalemate Congressional action and a nightmare scenario for Democrats.
Michael Shellenberger of the Breakthrough Institute agrees, pointing out that the Administration’s threat to regulate CO2 under the CAA unless cap-and-tax opponents come along quietly is tantamount to a promise to commit political suicide:
In other words, the White House “threat” to Republicans and moderate Democrats to regulate carbon is the equivalent of threatening your enemy with suicide. (”Don’t make me raise energy prices! You’ll really be in trouble with your voters when I raise their energy prices!”)
The CO2 litigation campaign bespeaks a fundamental contempt for the democratic process. Applying the CAA to CO2 could easily produce a regulatory regime far more costly than the Kyoto Protocol, yet without the people’s elected representatives ever voting on it. Those who instigated the Mass v. EPA case sought to substitute their will for that of Congress. They also sought to create a regulatory nightmare that Congress could fix only by adopting legislation that lawmakers would not otherwise support on the merits.
And now, this litigation strategy could blow up in their faces. ‘Tis a consummation devoutly to be wished. Republicans do have a knack for snatching defeat from the jaws of victory. But with a little coaching from energy realists (okay, a lot of coaching), we may yet protect the economy and the Constitution from Mass v. EPA.
Sunday, April 12, 2009
Can Renewable Technologies Provide U.S. Electricity Needs?
Can Renewable Technologies Provide U.S. Electricity Needs? (Only hypothetically, using unrealistic assumptions). By Mary Hutzler
Master Resource, April 7, 2009
Several reports (see here and here) and certain websites (here) allege that renewable technologies can meet our growing electricity needs and also meet stringent reduction targets for carbon dioxide. For example, Climate Progress, a website populated by Joseph Romm, an assistant secretary of energy during the Clinton administration, indicates that the answer to our growing electricity needs will come from energy efficiency (including cogeneration), wind power, concentrated solar power (CSP), and biomass co-firing, which taken together will meet a projected 1 percent annual growth rate in demand while also reducing carbon emissions.
These reports are in sharp contrast to forecasts produced by the Energy Information Administration (EIA), an independent agency of the U.S. Department of Energy. EIA’s most recent Annual Energy Outlook (AEO) indicates the U.S. generating sector will be dominated by coal and natural gas-fired technologies, representing two-thirds of our electricity generation through 2030, followed by generation from nuclear power, contributing almost another 20 percent. Only 14 percent of total generation would come from renewable sources, including hydropower, by 2030, up from 8 percent in 2007. The EIA forecasts include the efficiency and renewable technologies cited by Romm, plus others; but they do not include major policy and regulatory changes.
Efficiency
What gives rise to the differences between these projections? First, Romm assumes (based on California’s experience) that efficiency improvements can reduce the increase in electricity demand to near zero through 2020. Romm states: “If every American had the per capita electricity of California, we’d cut electricity use some 40%.” Many of California’s efficiency improvements were the normal types of strategies: better insulation; energy-efficient lighting, heating, and cooling; and so forth. And these are also incorporated in EIA’s demand forecast for electricity. Nevertheless, the EIA, after incorporating efficiency improvements, expects electricity generation to grow at 0.9 percent per year through 2030.
According to Romm, however, California also instituted a regulatory concept called electricity decoupling. Under this arrangement, utility company profits are not closely tied to how much electricity they sell; rather, the utilities are allowed to take a share of any energy savings they help consumers and businesses achieve. The bottom line is that California utilities can make money even when their customers use less electricity. Or, to put it in other words: California electric-utility companies can charge for electricity not used. While that may benefit the utility company, it distorts normal economic price signals. For example, with the addition of a pro-rated conservation charge, a consumer who has invested in energy efficiency could be faced with higher electricity bills than a consumer who has not conserved and who uses more electricity. This arrangement distorts the consumers’ benefits from traditional conservation measures, such as lowering their heating temperatures and/or raising their cooling temperatures. (For more on decoupling, see here.)
Perhaps decoupling may work in California where weather is milder than in many other states, housing is more geared to apartments and smaller homes due to high residential property values, and where many manufacturing firms have departed owing to high energy prices. But, decoupling could add hardship for Americans living in cold-weather states that heat with electricity and for Americans living in warm-weather states that need electricity to cool homes. Indeed, if consumers can’t afford to heat and/or cool their home adequately, they may be confronted with illness or death. Decoupling could also cause more manufacturing firms to leave the country as energy prices increase, making their ability to compete at home more challenging.
Combined Heat and Power
In addition, Romm favors combined heat and power, a technology that is incorporated in the modeling used by California to analyze compliance with its climate-change legislation, A.B. 32, which requires statewide greenhouse gas emissions to reach 1990 levels by 2020. That forecast has 4.4 gigawatts of combined heat and power constructed in California by 2020. In comparison, EIA’s forecast (see Table A9) has 0.7 gigawatts of combined heat and power constructed in the entire United States by 2020.
Wind Power
Romm next promotes wind power as a technology that has been growing at a staggering pace, with over 8 gigawatts constructed in 2008 alone. That statistic is true, and Romm correctly reports wind power as an intermittent technology. However, Romm cites a Department of Energy study that calls for 20 percent of U.S. power to be generated by wind by 2030. To reach that level, almost 300 gigawatts of new wind power (new, that is, beyond 2008 levels) must be constructed. EIA’s forecast (see Table A16) has about 20 gigawatts of new wind power constructed by 2030. A comparison of Romm’s cost assumptions for wind compared with those of EIA show Romm’s costs slightly lower by about 0.7 cents per kilowatt-hour (kWh) or 8 percent lower when subsidies and transmission are taken into account. (Specifically, EIA’s wind costs are 9 to 11.5 cents/kWh unsubsidized, while Romm’s are 7.5 to 10 cents/ kWh, unsubsidized and excluding transmission. EIA includes some transmission at 0.8–0.9 cents/ kWh. On the same basis, the comparison is 8.2 to 10.7 cents/ kWh for EIA, compared with 7.5 to 10 cents/ kWh for Romm.)
Solar Power
Concentrated solar power is another technology that Romm is encouraging. He cites a report by Environment America entitled “Solar Thermal Power and the Fight against Global Warming,” which indicates that the United States could build 80 gigawatts by 2030. EIA’s forecast has 0.33 gigawatts of solar thermal built by 2030, most likely all demonstration projects. A comparison between Romm and EIA regarding the costs of this technology shows vast differences. Romm cites contract costs in the Southwest and assumptions from California’s A.B. 32 study. Compared to EIA’s cost assumptions for solar thermal, Romm’s costs are 5 to 10 cents per kilowatt-hour lower or 30 to 40 percent lower. (Romm states that solar thermal is being contracted at 14 to 15 cents/ kWh in the southwest and that the California Public Utilities Commission assumes a cost for solar thermal at 12.7–13.6 cents/ kWh—including 6 hours of storage capacity—with the possibility of its dropping 20% by 2020, according to its A.B. 32 report. EIA’s subsidized price with transmission is 18.5–23.7 cents/ kWh. Transmission accounts for 1 to 1.1 cents/ kWh.)
Biomass Co-firing
Romm also touts biomass co-firing as “probably the cheapest, easiest, and fastest way to provide new renewable base-load power without having to build any new transmission lines.” Biomass co-firing is the use of biomass fuels along with coal in existing coal-fired generators. Romm and EIA both agree that up to 15 percent of the fuel used in a coal-fired generator can be biomass. They quote a cost range of $100 to $700 per kilowatt for adapting existing coal-fired technology to use biomass. But Romm adopts a median cost of $180 per kilowatt, while EIA sees the cost as dependent on the size of the host plant and the co-firing increment installed. Both recognize that the feedstocks need to be residues within a radius of about 50 miles around the plant since transportation costs limit the range. Dedicated feedstocks are more expensive than residues (e.g., construction and demolition wood, pallets, sawdust shavings from secondary wood processing). But both forecasters assume fairly similar feedstock costs.
Romm’s estimate of additional biomass co-fired capacity is 8 to 12 gigawatts by 2010, or 2 to 4 percent of total coal-fired capacity expected in that year, and 26 gigawatts by 2020, 8 percent of coal-fired capacity. EIA sees a possible 0.7 percent of coal-fired generation by 2010. By 2025, EIA’s reference case sees biomass co-generation peaking at 4.6 percent of coal-fired generation, dropping to 3.3 percent in 2030, as biomass gasification combined-cycle technology is built and competes with co-firing for lower cost feedstock. EIA’s forecast has 6.5 gigawatts of biomass gasification combined-cycle built by 2030.
Conclusion
Many of Romm’s technologies have been around for years, without much penetration. The EIA, which assumes existing policies and regulations, forecasts only small amounts of future penetration, with total renewable technologies, including hydropower, representing only 14 percent of the electricity mix in 2030.
So, how does Romm expect to meet these efficiency and renewable targets? Obviously, he expects major policy changes. But these policy changes will cost the American public higher electricity rates. How much higher depends on the policy, the location of the consumers, and their usage.
Without those policy changes, EIA is forecasting that electricity prices will increase at a rate of 0.6 percent per year in real terms through 2030, and 2.2 percent a year in nominal terms. How much more will Romm’s strategy cost? And will there be enough base-load power to supply the needs of future generations if current legislative and legal battles continue to restrict supply of coal-fired and nuclear-generated electricity? These questions are hard ones for the proponents of energy transformation via government intervention.
Master Resource, April 7, 2009
Several reports (see here and here) and certain websites (here) allege that renewable technologies can meet our growing electricity needs and also meet stringent reduction targets for carbon dioxide. For example, Climate Progress, a website populated by Joseph Romm, an assistant secretary of energy during the Clinton administration, indicates that the answer to our growing electricity needs will come from energy efficiency (including cogeneration), wind power, concentrated solar power (CSP), and biomass co-firing, which taken together will meet a projected 1 percent annual growth rate in demand while also reducing carbon emissions.
These reports are in sharp contrast to forecasts produced by the Energy Information Administration (EIA), an independent agency of the U.S. Department of Energy. EIA’s most recent Annual Energy Outlook (AEO) indicates the U.S. generating sector will be dominated by coal and natural gas-fired technologies, representing two-thirds of our electricity generation through 2030, followed by generation from nuclear power, contributing almost another 20 percent. Only 14 percent of total generation would come from renewable sources, including hydropower, by 2030, up from 8 percent in 2007. The EIA forecasts include the efficiency and renewable technologies cited by Romm, plus others; but they do not include major policy and regulatory changes.
Efficiency
What gives rise to the differences between these projections? First, Romm assumes (based on California’s experience) that efficiency improvements can reduce the increase in electricity demand to near zero through 2020. Romm states: “If every American had the per capita electricity of California, we’d cut electricity use some 40%.” Many of California’s efficiency improvements were the normal types of strategies: better insulation; energy-efficient lighting, heating, and cooling; and so forth. And these are also incorporated in EIA’s demand forecast for electricity. Nevertheless, the EIA, after incorporating efficiency improvements, expects electricity generation to grow at 0.9 percent per year through 2030.
According to Romm, however, California also instituted a regulatory concept called electricity decoupling. Under this arrangement, utility company profits are not closely tied to how much electricity they sell; rather, the utilities are allowed to take a share of any energy savings they help consumers and businesses achieve. The bottom line is that California utilities can make money even when their customers use less electricity. Or, to put it in other words: California electric-utility companies can charge for electricity not used. While that may benefit the utility company, it distorts normal economic price signals. For example, with the addition of a pro-rated conservation charge, a consumer who has invested in energy efficiency could be faced with higher electricity bills than a consumer who has not conserved and who uses more electricity. This arrangement distorts the consumers’ benefits from traditional conservation measures, such as lowering their heating temperatures and/or raising their cooling temperatures. (For more on decoupling, see here.)
Perhaps decoupling may work in California where weather is milder than in many other states, housing is more geared to apartments and smaller homes due to high residential property values, and where many manufacturing firms have departed owing to high energy prices. But, decoupling could add hardship for Americans living in cold-weather states that heat with electricity and for Americans living in warm-weather states that need electricity to cool homes. Indeed, if consumers can’t afford to heat and/or cool their home adequately, they may be confronted with illness or death. Decoupling could also cause more manufacturing firms to leave the country as energy prices increase, making their ability to compete at home more challenging.
Combined Heat and Power
In addition, Romm favors combined heat and power, a technology that is incorporated in the modeling used by California to analyze compliance with its climate-change legislation, A.B. 32, which requires statewide greenhouse gas emissions to reach 1990 levels by 2020. That forecast has 4.4 gigawatts of combined heat and power constructed in California by 2020. In comparison, EIA’s forecast (see Table A9) has 0.7 gigawatts of combined heat and power constructed in the entire United States by 2020.
Wind Power
Romm next promotes wind power as a technology that has been growing at a staggering pace, with over 8 gigawatts constructed in 2008 alone. That statistic is true, and Romm correctly reports wind power as an intermittent technology. However, Romm cites a Department of Energy study that calls for 20 percent of U.S. power to be generated by wind by 2030. To reach that level, almost 300 gigawatts of new wind power (new, that is, beyond 2008 levels) must be constructed. EIA’s forecast (see Table A16) has about 20 gigawatts of new wind power constructed by 2030. A comparison of Romm’s cost assumptions for wind compared with those of EIA show Romm’s costs slightly lower by about 0.7 cents per kilowatt-hour (kWh) or 8 percent lower when subsidies and transmission are taken into account. (Specifically, EIA’s wind costs are 9 to 11.5 cents/kWh unsubsidized, while Romm’s are 7.5 to 10 cents/ kWh, unsubsidized and excluding transmission. EIA includes some transmission at 0.8–0.9 cents/ kWh. On the same basis, the comparison is 8.2 to 10.7 cents/ kWh for EIA, compared with 7.5 to 10 cents/ kWh for Romm.)
Solar Power
Concentrated solar power is another technology that Romm is encouraging. He cites a report by Environment America entitled “Solar Thermal Power and the Fight against Global Warming,” which indicates that the United States could build 80 gigawatts by 2030. EIA’s forecast has 0.33 gigawatts of solar thermal built by 2030, most likely all demonstration projects. A comparison between Romm and EIA regarding the costs of this technology shows vast differences. Romm cites contract costs in the Southwest and assumptions from California’s A.B. 32 study. Compared to EIA’s cost assumptions for solar thermal, Romm’s costs are 5 to 10 cents per kilowatt-hour lower or 30 to 40 percent lower. (Romm states that solar thermal is being contracted at 14 to 15 cents/ kWh in the southwest and that the California Public Utilities Commission assumes a cost for solar thermal at 12.7–13.6 cents/ kWh—including 6 hours of storage capacity—with the possibility of its dropping 20% by 2020, according to its A.B. 32 report. EIA’s subsidized price with transmission is 18.5–23.7 cents/ kWh. Transmission accounts for 1 to 1.1 cents/ kWh.)
Biomass Co-firing
Romm also touts biomass co-firing as “probably the cheapest, easiest, and fastest way to provide new renewable base-load power without having to build any new transmission lines.” Biomass co-firing is the use of biomass fuels along with coal in existing coal-fired generators. Romm and EIA both agree that up to 15 percent of the fuel used in a coal-fired generator can be biomass. They quote a cost range of $100 to $700 per kilowatt for adapting existing coal-fired technology to use biomass. But Romm adopts a median cost of $180 per kilowatt, while EIA sees the cost as dependent on the size of the host plant and the co-firing increment installed. Both recognize that the feedstocks need to be residues within a radius of about 50 miles around the plant since transportation costs limit the range. Dedicated feedstocks are more expensive than residues (e.g., construction and demolition wood, pallets, sawdust shavings from secondary wood processing). But both forecasters assume fairly similar feedstock costs.
Romm’s estimate of additional biomass co-fired capacity is 8 to 12 gigawatts by 2010, or 2 to 4 percent of total coal-fired capacity expected in that year, and 26 gigawatts by 2020, 8 percent of coal-fired capacity. EIA sees a possible 0.7 percent of coal-fired generation by 2010. By 2025, EIA’s reference case sees biomass co-generation peaking at 4.6 percent of coal-fired generation, dropping to 3.3 percent in 2030, as biomass gasification combined-cycle technology is built and competes with co-firing for lower cost feedstock. EIA’s forecast has 6.5 gigawatts of biomass gasification combined-cycle built by 2030.
Conclusion
Many of Romm’s technologies have been around for years, without much penetration. The EIA, which assumes existing policies and regulations, forecasts only small amounts of future penetration, with total renewable technologies, including hydropower, representing only 14 percent of the electricity mix in 2030.
So, how does Romm expect to meet these efficiency and renewable targets? Obviously, he expects major policy changes. But these policy changes will cost the American public higher electricity rates. How much higher depends on the policy, the location of the consumers, and their usage.
Without those policy changes, EIA is forecasting that electricity prices will increase at a rate of 0.6 percent per year in real terms through 2030, and 2.2 percent a year in nominal terms. How much more will Romm’s strategy cost? And will there be enough base-load power to supply the needs of future generations if current legislative and legal battles continue to restrict supply of coal-fired and nuclear-generated electricity? These questions are hard ones for the proponents of energy transformation via government intervention.
Pew Center Realism Towards ‘Kyoto II’
Pew Center Realism Towards ‘Kyoto II’: Game, Set, Match Adaptation? By Robert Bradley
Master Resource, April 8, 2009
Master Resource, April 8, 2009
‘Climate and Agriculture: We’re Not Dumb’ Follow-Up
‘Climate and Agriculture: We’re Not Dumb’ Follow-Up. By Chip Knappenberger
Master Resource, April 11, 2009
Master Resource, April 11, 2009
Saturday, April 11, 2009
Libertarian views on UN's Global Green New Deal for Sustainable Development
The U.N.’s Global Green Raw Deal. By Patrick J. Michaels
Planet Gore/NRO, Thursday, April 09, 2009
Day by day, our government is taking more and more control over once-private corporations, with plenty of green strings attached. GM will be required to produce more hybrid cars that people won’t buy. Employee compensation will be determined by federal fiat. “Everyone will be better off.”
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.
— Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of the forthcoming Climate of Extremes: Global Warming Science They Don’t Want You to Know.
Planet Gore/NRO, Thursday, April 09, 2009
Day by day, our government is taking more and more control over once-private corporations, with plenty of green strings attached. GM will be required to produce more hybrid cars that people won’t buy. Employee compensation will be determined by federal fiat. “Everyone will be better off.”
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.
— Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of the forthcoming Climate of Extremes: Global Warming Science They Don’t Want You to Know.
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