TCS Daily

How Not to Address Climate Change

By Kenneth Green - January 30, 2008 12:00 AM

Common sense should tell us that good policies produce more in benefits than they cost us. Unfortunately, common sense has left the building when it comes to climate policy. Asserting (somewhat absurdly) that America's economic and geopolitical competitors, such as China and India, are just waiting for "U.S. moral leadership," several voices are renewing their call for domestic cap-and-trade legislation to control greenhouse gases.

But cap-and-trade schemes are fundamentally flawed, and particularly ill-suited to greenhouse gas control. The current poster child for cap and trade is the Warner-Lieberman Climate Security Act of 2007 (S. 2191). If enacted, Warner-Lieberman will cause economic harm without producing any environmental or climate-protective benefits. This is the hallmark of irrational policy.

First, let's look at the likelihood that the legislation's goals can be met. Economist Margo Thorning observed in Congressional testimony, "In order to meet the emission reduction targets in S. 2191, U.S. per capita emissions would have to fall by a total of 13.8 percent over the 2000-2012 period, an additional 20.2 percent from 2012 to 2020 and a further 27.6 from 2020 to 2030. In other words, the required reductions in per capita emissions are about 25 to 35 times greater than what occurred from 1990 to 2000. The technologies simply do not exist to reduce total (and per capita emissions) over the next 17 years by the amounts mandated in S. 2191..." Thorning is not alone in this belief: in a 2004 Science article, a team of 18 prestigious scientists observed that meeting projected growth in energy demand while sharply curbing greenhouse gas emissions requires carbon-free technologies that "do not exist operationally or as pilot plants."

Now, let's look at the costs. Economist Anne Smith testified to Congress that her state-of-the-art economic modeling estimates that Warner-Lieberman would cause net reduction in 2015 GDP of 1.0% to 1.6% relative to the GDP that would otherwise occur. That loss rises to the range of 2% to 2.5% after 2015. Smith found that the annual loss in GDP would increase to the range of $800 billion to $1 trillion, which is serious money. By 2020, Smith estimates losses of 1.5 to 3.4 million jobs -- and that is net jobs, after adjusting for the new "green" jobs that might be created by the bill.

None of this is surprising as experience has shown cap-and-trade schemes are fundamentally flawed. Here are four reasons. First, capping carbon essentially puts a regulatory drag on economic growth. When the economy grows, energy demand rises, which means the demand for the limited number of carbon permits would rise, strangling growth in its cradle.

Second, everyone involved in a cap-and-trade system has incentives to cheat. Companies have incentives both to overstate historical emissions, and to exaggerate the benefits of new technologies to generate bogus emissions that become ready cash. Experience in both the US and Europe shows that firms usually get away with it: validating historic emissions is nearly impossible. And governments won't look very hard - wanting to appear green, they have strong incentives to turn their eyes away from carbon credit malfeasance.

Third, cap-and-trade creates a perpetual group of rent-seekers - those raking in profits in new carbon trading - who will call for ever-tighter caps, and who will staunchly oppose any other approach to dealing with greenhouse gas emissions. Once a company holds millions of dollars in carbon credits, they can be expected to spend large sums of money lobbying against anything that would devalue their new currency.

Finally, carbon cap-and-trade will raise the costs of energy, goods, and services. If that does not happen, there is no incentive for anyone to cut back on energy use, and the attendant emissions it produces. This could be offset, in theory, if the carbon permits were all auctioned off, and the revenues used to lower other taxes. But no emission trading system has ever auctioned off a majority of permits, and Warner-Lieberman is no exception: at first, it auctions only a trivial share of emission permits, and even when that ramps up decades hence, the revenues are used as a wealth-redistribution tool focused mainly on funding dubious energy research schemes rather than protecting the overall economy from the impact of higher energy prices.

The post-Bali refrain is that the US should "lead" by enacting carbon cap-and-trade. Apart from the silliness of assuming that our economic and political competitors are waiting on the US for "moral leadership," carbon cap-and-trade is simply bad policy: its costs are high, and benefits non-existent. Rational climate policy would consist of a short-term focus on adaptation, and a longer-term effort to reduce greenhouse gas emissions via a modest revenue-neutral carbon tax.

Kenneth P. Green is a Resident Scholar at the American Enterprise Institute.



A Significant Warm Bias With The Diagnosis Of A Global Average Surface Temperature Anomaly

Before we spend a lot of money solving the problem. Shouldn't we try to determine that there actually is a problem first?

Warming Trend: PDO And Solar Correlate to Temperature Better Than CO2

Another study finding that the temperature increase has been vastly overstated

List of Climate Change Skeptics Continues to Grow (Part 4)

How not to measure temperature, part 49. Alaska’s COOP Stations

Of course roy will continue to protest that these stations must be perfect, because they are manned by scientists.

Yeah mark, you never post any citations; acording to roy
Pretty good stuff, but the point was what to do about it, given it is true. (I and many others do agree with you that this is not a given at this point.)

There are a few good answers to that which should be implemented - 1. go nuke! 2. continue work on designing emmissionless coal generation. 3. Continue to encourage development of technologies (but not sink billions in subsidies into boondoggles like ethanol).

The way out is forward, not back. New technology and development of current clean technologies is the only answer. Nothing else will work.

current ethanol policies as implemented are just rent seeking profits
precisely of the kind the author warns carbon credits will create.

Yeah mark, you never post any citations; acording to roy
Pretty good stuff, but the point was what to do about it, given it is true. (I and many others do agree with you that this is not a given at this point.)

There are a few good answers to that which should be implemented - 1. go nuke! 2. continue work on designing emmissionless coal generation. 3. Continue to encourage development of technologies (but not sink billions in subsidies into boondoggles like ethanol).

The way out is forward, not back. New technology and development of current clean technologies is the only answer. Nothing else will work.

We have some costs
better defined now with respect to carbon sequestration. Norway has been operating a sequestration plant for one of its oil processing facilities for about three years now. Essentially they are using the CO2 to repressurize gas wells. The cost is about $75/ton.

Think about it. A typical 1000 MW coal fired station is going to produce about 10 million tons of carbon dioxide annually. That means, if it has to sequester all its CO2, it will have an incremental cost of about $750 million. Put it another way, the US produces about half its electricity from coal. That's about 2000 TWh, or about 2.5 billion tons of carbon dioxide with a cost to sequester of about $190 billion annually.

Fine, we get some technology improvement that cuts the cost by a third. Who cares. The cost is still stunning.

Absolutely correct, Pauled, new technology is the only possibility.

too true
That's wy I don't support ethanol production (at least in it's present incarnation.)

According to the great god IPCC
Even if every recommendation of Kyoto were to be fully implemented, we would only avoid about 0.001C of warming by the middle of the century.

According to the logic of this article, that works out to a huge cost, for an utterly unnoticeable gain.

Doesn't sound like a wise investment to me.

no regrets steps
Using CO2 to repressurize oil wells is something the oil companies were doing even before AGW became the latest craze. It helps to force more oil out of the well.

I'm not willing to conceed that it's a problem
One of the strawmen put forward by catastrophic AGW'ers, (henceforth refered to as CAGW) is that deniers don't think that it is possible for CO2 to affect the climate.

In all my travells about the net, I've only met one person who takes that position.

The debate is always about how much CO2 affects the climate. My position, based on the science (computer models aren't science) is that a doubling of CO2 will increase the temperature between 0.1dC and 0.2dC.

that's not a problem for anybody.

If you go through the old energy/AGW articles on the discussion page, you will find that I am constantly hunting the net for new articles. When I find them I post them on the most recent relevant article.

I decided to cheat a little and repost a couple of the ones I've found in the last few days.

I wasn't aware the cost of present technologies of this type had such a high ongoing expense. The area I live in has a significant coal field. We hve been looking at these issues for a couple of years now. I understood that the idea of pumping the emmissions into the ground was cost prohibitive in the initial construction phase, but generally "free" (very low expense level anyway) after the initial construction expense. However, that construction expense is so high that no one is really willing to commercially produce electricty with that technology. Still, over the 50-year+ life of the generation facility, I was led to believe it would average pennies a ton. (that is $16.75 billion of which half or so is up front construction costs. On a normally $500 million or less facility - Yikes!)

There are new technologies beign developed in many energy circles, but we are going to have to take incremental steps and use the best technologies available as they come on line.

I was making a point
and, perhaps, a little joke at roy's expense.

I am well aware the number of citations you post on this issue. I follow as many of them as I can and you are very informative; and Allen M off some of the best scientific reviews of the issue and have helped me greatly in my search for information on GW/AGW.

That's what I said
And I agree.

I have never denied that warming exists or that man may play a part. The question is what part and how much. I do not agree that anything should be done and, in fact, think the best option is ti play Californian and "soak up the sun".

My understanding
with the Norwegian example is that they have high operating costs. Numbers are very difficult to get here because of commercial protection. I suspect too that this technology may be highly idiosyncratic with respect to site. Some places with particular circumstances it may have relatively lower cost, while in others it may have prohibitive costs.

Not even at 10 times that level!
But try telling that to the CAGW religious faithful. It is really all about control, and the fact that they believe that any "footprint" by man is a bad thing.

So I leave as many in the snow and mud as I can. Maybe some day one will fossilize and I will be studied by whomever or whatever comes next!

Could be
I'm not well enough informed to make a suggestion on this one way or another. Still, either way, it is presently not commercially viable and may never be.

And that is the point. It is O.K. to continue studying this and trying to find better way to make it work. Until then, you go with what ca, and does, work and keep looking for better ways to do things.

Don't destroy present industry, nudge and coddle it to work toward that goal.

when you can get an economic output in return it can indeed be justified irrespective of the cost of carbon dioxide emissions. Where the problem comes it is if its pure sequestration with no economic benefit.

Absolutely right
Do the 'no regrets' stuff and let capital stock turnover and technology change do all the rest.

I believe it was Owl Bore who said
that the things we need to do to combat CAGW are things we need to be doing anyway.

Many in the environmental camp view any human impacts as inherently evil (exempting their own big houses in the woods of course).

Kyoto is just another method for reaching that end.

I do believe you are right
In principal I do agree with "The Bore" on this; In practice it is very distasteful. It would be nice to be able to really "clean up" all aspects of our industrailized world; it simply is not practical.

It, in my opinion, is the environmentalists who creat the biggest impacts, then decry the rest of us for wanting to go skiing or get a boat and go fishing.

The big-name enviro-wackos complain about the guy sitting at home drinking a beer and watching the Super Bowl and claim it is his over consumption that is causing the problem; all while making the complaint over his cell phone from his private jet heading to the Super Bowl.

Every time and environmetalist screams, I want to cut down a tree, throw a styrofoam cup out my car window and use a spotted owl to wipe by rear end.

Half of these people are spoiled brats, and the other half are dumb enough to listen to them!

...then now power-hungry politicians can't 'do something' to 'save' us from global warming!

Hey Mark!
Can you post a list of the sites/RSS feeds you routinely monitor. We'd all probably like to add them to our bookmarks.

And Roy will get slammed with a lot more 'citations' as a result, think of that.

A lemming to lead the rest over the cliff ...
... that's the world wants America to be, so long as America doesn't get to choose the cliff.

Question: What's the difference between a developer and an environmentalist?

Answer: The environmentalist already owns a house in the woods.


We already have cleaned up the world quite a bit and as we as a society get richer, we will clean it up even more.

and some more

Today's entry on this one has a cute picture.

I know this looks like a lot, but most of them don't update to reguraly, so checking once a day is enough. You also learn to recognize when multiple sites are referencing the same paper, so you can skip over stuff you've already read.

I'm sure roy will complain that most of these sites only archive skeptical papers. (Like roy spends much time at sites that don't specialize in CAGW) That's an irrelevant argument. Either the science is good, or it is bad. If the science is bad, the papers can be refuted.

it's worse then that.
The rest of the world has little intention of going over this cliff.

For example, Europe talks a lot about cutting CO2 emissions, but over the last decade, their emissions have grown by as much as twice as fast as the US's.

They want to tank the US's economy in the belief that it will benefit them.

Or vote in our elections.
Did you see where EU types think they should have a say in our presidential race?

Of course with the current batch of losers we can sink ourseleves all by our lonesome it appears.

New technology

We've got the land-- the southern half of Nevada is just bare, worthless desert. My only caveat is that I don't think we have the cadmium telluride. Cadmium's plentiful, but tellurium is limited and in very tight supply.

not there yet
By the articles own claim, the technology isn't ready for prime time just yet. I'm is unsure it ever will be. Still, it could be a good idea if all the technical aspects can be worked out and the bugs in the system are kept to a minimum.

You do realize the problems created by everything from sand storms to mice in a system like this? The scale means you have to design it to be impervious to almost everything. Maintainence will be a nightmare even if it is perfectly built.

Current engineers can't build a car that is easy to maintain; I have my doubts about a 30,000 square miles solar collector.

Certainly probable
LOL that is so true!! They have such an "I got mine so close the gate" mentality it make me laugh.

If the last 30 years are any indication, new technologies will make things better on all fronts and in the fairly near future.

Slow news week
Remember how TCS was back when James "Dow 36,000" Glassman was running things? Three or four new articles each and every day.

Then he sold it and we went down to one article a day. Now this week we had one on Tuesday and one on Wdensday, and the week's almost over. Two articles!

Plus, they're both old standbys. One is on how we should just shoot people if they're still broke when they're 65, because we can't afford their upkeep. Lots of assenting hoots and cackles on that one.

And the other one's on how it's unfair to ask people who are making money on providing energy to have to pay the freight on energy's negative side. Again, hoots and cackles from the converted.

Not much here any more that causes one to have to think. We're into the winter re-run season.

Want something that makes you think about your assumptions? Here's my offering for the day:

It's a start
Of course. By definition it's not ready yet for prime time. If it were. we'd be building it now. This is just what's on the drawing board.

In terms of maintenance, any system with few if any moving parts shouldn't be all that hard to maintain. And I'm not certain mice really like to eat solar collectors.

Ideas have to make a certain amount of sense just to make the cut, and get published in SciAm. But it's still rough at the edges. My main concern is still the amount of tellurium available on earth. What little we can scrape together is a bypoduct of refining copper ores, and copper deposits are in very short supply. Plus, everything we can make seems to be spoken for. The price/supply situation seems tight already.

But maybe some breakthrough will come along. And of course, if it doesn't we're sunk anyway. So for my money, why don't we put a bit of research into this one, and see whether the pig can be made to fly?

Cars, BTW, are super easy to maintain now. Remember when we used to have to tune them up every few thousand miles, change the belts and hoses and pumps, and the plugs and points, etc etc? Basic systems are all but maintenance free for the first sixty thou now... then you replace the timing belt.

Thank Toyota and Datsun for doing the rethinking. Detroit was happy the way things used to be.

do you teach classes in how to construct strawmen?
If not, you should consider it. Your a natural.

Let's see. Someone states that based on his experience, medicare is evil. From this you conclude that he wants to execute the elderly.

Another person points out that the cost of eliminating CO2 far outweighs even the potential benefits, and from this you conclude that he just wants to be able to pollute freely.

If I didn't know better, I would think you are just getting bitter in your old age.

The Krugman anti-dote

P. Krugman, former Enron advisor, is possibly the most-quoted, least-credible pop-economist in print and behind the podium.

Very witty
Let's consider my straw men.

1. My comment about writing off the elderly does not just spring from my own imagination. Here's an example-- Floccina's response to the article When Health Care Becomes Personal, entitled "Old age is not treatable":

"My mother has always said that doctors are fine if you have something that there is a cure for but there is no cure for the disease of old age. Some times it seems that it is better for old people to not know all the diseases that they have. If the symptoms can be treated great but the treatments should be balanced against the harm that they do."

If we are just to not bother with the bureden of maying for medical care fr the aged, what option might one suggest other than writing them off? And letting them die unaided, if they cant afford to put their personal savings to the task.

2. "Another person points out that the cost of eliminating CO2 far outweighs even the potential benefits, and from this you conclude that he just wants to be able to pollute freely."

The only potential benefit, of course, lies in attempting to avert serious climate ramifications. Without that, it's only an added cost. This is, you have to agree, the only reason the idea of human-induced global warming is opposed here so bitterly.

We get all these articles put before us solely because billions of dollars are at stake. That's why those of us who are skeptical of the climate skeptics look first at who's funding their work.

If it weren't for the cost of climate mitigation, everyone would be in favor of it. Even you.

The ad hominem comment
You're certainly entitled to post your blog, Poor and Stupid. There's lots of food for thought there-- although it's a bit more overtly political and less economically supportable than my post.

But it's not a proper response to the article I cited. Obviously you didn't even get past the author's name, and proceeded then to attack him and anything he stood for.

The article, if read on its own merits, was a comment on the wisdom of running one's business by continually buying more than one sells, and doing so on borrowed money. I dare say if the author was named Joe Dokelson instead of Paul Krugman, and it had been recommended by anyone other than myself, you would have agreed with it.

Please go back and read it again, without the assumptions. If you can address the points the author raises, and make an intelligent comment on them, I'd like to read your response.

advanced strawmen
In your opinion, if one person whom you consider to be a conservative says something, then automatically this is the position of all conservatives.

The quote from Floccina's post specifically addresses conditions that aren't treatable. That hardly sounds like a demand to kill all the elderly who can't afford medical care.

There isn't a scintilla of evidence that enhanced CO2 will result in measurable climate change, much less "serious climate ramifications".

Heck, on the whole, real world science is showing that enhanced CO2 does way more good than harm.

That's funny coming from roy, and in response to roy's first post.
Krugman hasn't got anything write since he helped drive Enron into the drink.

That's probably why you like him so much.

As for Roy, well...isn't the 'scientific debate over' with him?

and why do we need a multi-decade government project for this?
"Progress is clearly needed, but the technology is advancing quickly; commercial efficiencies have risen from 9 to 10 percent in the past 12 months. It is worth noting, too, that as modules improve, rooftop photovoltaics will become more cost-competitive for homeowners, reducing daytime electricity demand."

Whereas, the wind industry has been building up slowly, project by project. This allows them to bring online new techniques and new technology. These authors keep predicting when solar will be 'mature' and those promises have been about as discredited as the ones telling us that 'nuclear fusion is just around the corner' for the last fifty years.

Of all the proposals of this project, I'd only support the converting our power transmission lines to DC. We should abolish all AC, if you ask me. That and more research and pilot programs for solar power and energy storage of all kinds funded by the Feds.

Here's another pet peeve:

"Some three million new domestic jobs—notably in manufacturing solar components—would be created, which is several times the number of U.S. jobs that would be lost in the then dwindling fossil-fuel industries."

Once again, we see the erroneous Make-Work Bias pushed by obvious non-economists (who are trying to make an economic case). Prosperity is not created by more jobs, but by more work being done with fewer workers. Period. As a social-welfare project, they can make the 'more jobs' case yes..and should present the costs to the economy for doing so so readers can do their own cost-benefit analysis of their proposal. But they are not. They are trying to make a false economical one. They get away with it because the general public and its political leaders buy into the Make-Work Bias, too.

"Perhaps the biggest question is how to pay for a $420-billion overhaul of the nation’s energy infrastructure. One of the most common ideas is a carbon tax...Without subsidies, the solar grand plan is impossible."

Here we go. The root of the whole thing. No wonder I originally read the web url as

Bill Clinton gave the real reson for MMGW today

Another Jimmy Carter moment. I like how a man who in his entire life has produced nothing seems to know what best for the nation.

Love them liberals.

If it weren't for the cost of climate mitigation, everyone would be in favor of it. Even you.
Boy Roy, you sure make a lot of assumptions.

And I noticed who you like to follow the money with regards to the skeptics but not for the proponents. Grant-whores in the scientific community abound, Roy.

As for the rest of us, we just don't wont to get the shaft from paying for the irrationality of others. You and the rest of the 'pay up and save the world, Scrooge!' types can freely believe in global warming with or w/o evidence, since your whole world view is predicated on others paying for it. When people can externalize the prices of their irrationality, they tend to get irrational in the extreme. Voters do this all the time. Meanwhile, organized rent-seekers move in to RATIONALLY milk the irrationally for all its worth by influencing the policy outcomes as much as possible. In the Reconstruction Era after the Civil War, those folks were known as carpetbaggers, Roy.

It's not about just the cost, Roy. It is about the cost and what we are getting for it. Regardless of whether or not one 'accepts' AGW as a real problem, the whole other issue of what the cost is and what it is going to be spent on IS a real problem. And, it is not looking good...especially when the words 'carbon tax' comes up. Historically, 'dedicated taxes' rarely get spent where they are solely supposed to be dedicated. Else, the Highway Trust Fund (funded by gas taxes) and the SS Trust Fund (payroll taxes) would never have been looted.

Truly dedicated folks to the Utopian Point of View you're pushing in this thread such as Lester Brown have advocated for TAX SHIFTING. Say, reducing the payroll tax while implementing a carbon tax so everything is revenue neutral. But funny, no major political leader who has tried to push carbon taxes ever mentions tax shifting -- not even to cynically help sell their case.
Al Gore hasn't. The UN types screaming for a global carbon tax levied on the rich nations haven't. The guys who wrote that article on their proposed solar boondoggle project you posted on this forum didn't. Hmmmm...wonder why? Because they want MORE tax revenues to loot, that's why.

It's time you wised up, Roy. Oh, and stop mis-characterizing the motives of those who post here. You know better.

If it's science
the debate is never over. After all, where would we be if 200 years ago folks had said "Isaac Newton has outlined all we need to know about how the universe works"?

Interesting, the IPCC is now conceding that temperatures have plateaued in the past 10 years. Coming on top of their admission in 2006 that human influence was less than previously accepted, how much more air has to be let out of this balloon?

EU Types
The EU types do have a say in our presidential race because HillyBilly and Obama both say we have to kiss EU butt to get them to like us again. The EU types have a super-vote when they can manipulate a US president to Tango to their tune.

I hear nowadays that most American voters have bought the AGW scam. Too bad; they'll pay a heavy price for their willful ignorance, gullibility, and / or outright stupidity. Mac the Shark looks like he'll win the GOP nomination, which means there will be no presidential candidates this time round with an informed and adult take on AGW. Looks like America is in for a rough ride ahead.

In this life, you've got to put yourself in the position to prosper no matter what happens. So if HillyBilly, Obama or Mac the Shark scuttle the US economy in the many offensive and effective ways they intend to, I'll be here offshore to take good care of the American cash and other assets that come my way. I hate to see America suffer, but at least I'll have plenty of business to assuage my patriotic sorrow.

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