by Marlo Lewis
February 23, 2009 @ 5:41 pm
Yes, for three reasons.
(1) Companies in carbon-constrained countries will demand carbon tariffs to “level the playing field” vis-a-vis firms in non-carbon constrained countries.
(2) Cheating will be rampant unless deterred and punished by credible trade sanctions.
(3) The EU-IPCC-Al Gore goal of achieving a 50% reduction in global emissions by mid-century is impossible absent deep emission cuts in developing countries, which in turn won’t happen unless developing countries are bullied into limiting their consumption of coal and oil.
For further discussion, see my post on Masterresource.Org.
From http://www.globalwarming.org/
Selasa, 24 Februari 2009
Will carbon market woes tilt U.S. pols towards carbon taxes, CAA regulation?
by Marlo Lewis
February 23, 2009 @ 5:21 pm
In today’s Guardian, Juliana Glover reports that carbon permit prices in Europe’s Emission Trading System (ETS) have crashed from €31 last summer to €8 today. This price is too low to create any incentive for covered entities to invest in ‘green’ technology.
Glover identifies two causes for the collapse of carbon permit prices. First, the recession has reduced demand for energy and, thus, for carbon permits. Second, European governments handed out “luxurious quantities” of carbon permits, free of charge, to big emitters, claiming that economic growth “would soon see them bumping against the ceiling.”
Glover says the EU must do two things to rescue the ETS:
Glover’s commentary vindicates free-market critics (see, e.g., here, here, and here) who have warned that Europe’s vaunted ETS is an unsavory combination of wealth transfer and creative accounting.
My concern is what lessons if any climate doomsters here in the United States draw from Europe’s failure.
Most U.S. greens prefer cap-and-trade to carbon taxes. Part of the reason is political. Most voters oppose new taxes, but most do not understand that cap-and-trade schemes are stealth energy taxes.
Greens also argue that only cap-and-trade (a) provides “emissions certainty” (determines in advance how much and how fast emissions will decline) and (b) creates strong incentives for firms to innovate and go “beyond compliance” in order to amass and sell surplus carbon permits (transferring wealth from buyers to sellers).
But the collapse of the carbon market calls in question both alleged policy advantages of cap-and-trade. Europe’s ETS is exerting no pressure to reduce emissions in today’s distressed economy, whereas a carbon tax mostly certainly would. Moreover, the ETS is fostering creative accounting, not innovation.
While it would be premature to say that the cap-and-trade lobby is losing its clout on the Hill, it is interesting that Energy Secretary Steven Chu recently floated the idea of a carbon tax. It is also noteworthy that NASA’s James Hansen, the doyen of global warming alarmism, cautioned President-elect Obama last December that, “A carbon cap that makes one more stinking millionaire on the backs of the public is going to infuriate the public.” Hansen argued that, “A carbon tax (across all fossil fuels at their source) is essential.”
Given the Administration’s apparent determination to regulate carbon dioxide (CO2) under the Clean Air Act (CAA), we could possibly see growing support within green circles for a combination of carbon taxes and CAA regulation of CO2 from autos and large stationary sources.
Of course, this would take all the fun and profit out of global warming for the corporations pursuing European-style wealth transfers and windfall profits under cap-and-trade.
So, liberty lovers be warned: We could end up with cap-and-trade, carbon taxes, and CAA controls on CO2. As Al Gore said at his March 2007 Senate Environment and Public Works hearing, “We need it all.”
From http://www.globalwarming.org/
February 23, 2009 @ 5:21 pm
In today’s Guardian, Juliana Glover reports that carbon permit prices in Europe’s Emission Trading System (ETS) have crashed from €31 last summer to €8 today. This price is too low to create any incentive for covered entities to invest in ‘green’ technology.
Glover identifies two causes for the collapse of carbon permit prices. First, the recession has reduced demand for energy and, thus, for carbon permits. Second, European governments handed out “luxurious quantities” of carbon permits, free of charge, to big emitters, claiming that economic growth “would soon see them bumping against the ceiling.”
Glover says the EU must do two things to rescue the ETS:
First, the EU must stop importing permits from countries such as Russia–a bonus for a paper transaction. No one really believes that 15m tonnes of imported permits will not be emitted by a steelworks somewhere east of Novosibirsk.She concludes caustically: “Like medieval pardoners handing out unlimited indulgences, governments have created a glut. Reformation must follow. Wanted–a modern Martin Luther to nail a shaming truth to industry’s door: Europe’s whiz-bang carbon market is turning sub-prime.”
Second, it must publish plans to crack down on the surplus of permits when the recession is over. Warnings of famine ahead, when the scheme enters its third stage in 2012, would raise prices now, if believed.
Glover’s commentary vindicates free-market critics (see, e.g., here, here, and here) who have warned that Europe’s vaunted ETS is an unsavory combination of wealth transfer and creative accounting.
My concern is what lessons if any climate doomsters here in the United States draw from Europe’s failure.
Most U.S. greens prefer cap-and-trade to carbon taxes. Part of the reason is political. Most voters oppose new taxes, but most do not understand that cap-and-trade schemes are stealth energy taxes.
Greens also argue that only cap-and-trade (a) provides “emissions certainty” (determines in advance how much and how fast emissions will decline) and (b) creates strong incentives for firms to innovate and go “beyond compliance” in order to amass and sell surplus carbon permits (transferring wealth from buyers to sellers).
But the collapse of the carbon market calls in question both alleged policy advantages of cap-and-trade. Europe’s ETS is exerting no pressure to reduce emissions in today’s distressed economy, whereas a carbon tax mostly certainly would. Moreover, the ETS is fostering creative accounting, not innovation.
While it would be premature to say that the cap-and-trade lobby is losing its clout on the Hill, it is interesting that Energy Secretary Steven Chu recently floated the idea of a carbon tax. It is also noteworthy that NASA’s James Hansen, the doyen of global warming alarmism, cautioned President-elect Obama last December that, “A carbon cap that makes one more stinking millionaire on the backs of the public is going to infuriate the public.” Hansen argued that, “A carbon tax (across all fossil fuels at their source) is essential.”
Given the Administration’s apparent determination to regulate carbon dioxide (CO2) under the Clean Air Act (CAA), we could possibly see growing support within green circles for a combination of carbon taxes and CAA regulation of CO2 from autos and large stationary sources.
Of course, this would take all the fun and profit out of global warming for the corporations pursuing European-style wealth transfers and windfall profits under cap-and-trade.
So, liberty lovers be warned: We could end up with cap-and-trade, carbon taxes, and CAA controls on CO2. As Al Gore said at his March 2007 Senate Environment and Public Works hearing, “We need it all.”
From http://www.globalwarming.org/
An End Run Around Congress To a Regulatory Morass
by William Yeatman
February 23, 2009 @ 12:02 pm
The ultra powerful enviro-lobby has a big problem: So far, it hasn’t been able to convince the Congress to enact energy-rationing policies to fight “global warming” (I am using quotation marks because it hasn’t warmed in 7 years, despite a steady increase in global greenhouse gas emissions).
Last year, a bi-partisan group of Senators spurned a cap-and-trade scheme written by California Senator Barbara Boxer’s staff because they couldn’t countenance imposing higher energy costs on their constituents at a time when gas cost $4/gallon. Given current economic woes, a cap-and-trade energy rationing scheme is even more unlikely to make it through the Congress.
Faced with this political and economic reality, the eviros have adopted a new strategy. They want to pull an end run around Congress by having the executive branch regulate green house gases without a legislative mandate.
It’s a complicated process, but here’s the gist: They are trying to get the Environmental Protection Agency to find that greenhouse gas emissions are “pollutants” that “endanger” public welfare, a ruling that automatically results in regulation under the Clean Air Act. This is not a good thing. As noted by my colleague Marlo Lewis, if the EPA were to regulate greenhouse gases under the Clean Air Act, it would result in a regulatory nightmare.
The EPA simply could declare that greenhouse gases endanger public welfare, but there are also a number of circuitous pathways by which the green lobby could force the EPA’s hand. In today’s DC Examiner, former CEI Warren Brooks Fellow Jeremy Lott and I have an opinion piece that explains one such round-about route to a regulatory nightmare-the California tailpipe emissions waiver.
A sample:
If the EPA allows California to regulate greenhouse gases from automobiles, it will tacitly acknowledge that greenhouse gases are “pollutants” — and under the Clean Air Act anything considered a pollutant is automatically subject to regulation. Environmental groups will be sure to have their lawyers sue the EPA to make this explicit.From http://www.globalwarming.org/
Once greenhouse gases are classified as a “pollutant,” big construction projects (power plants, high schools, apartment buildings, hospitals) will be delayed and perhaps halted while federal regulators try to decide whether they comply with the Clean Air Act. New construction jobs? Forget about it.
Before the EPA takes this drastic step, shouldn’t our nation’s representatives in Congress debate and vote on whether to substitute this California regulation for federal law? Environmentalists don’t think so.
Rather than have Congress deliberate, the environmental groups want the courts to decide. The Environmental Defense Fund (EDF) and other well-funded, litigation-happy green groups think the California waiver is a dream come true.
Cooler Heads Digest, 20 February 2009
by William Yeatman
February 23, 2009 @ 10:45 am
Announcements
There are only 2 weeks left to sign up for the Heartland Institute’s second International Conference on Climate Change in New York City, March 8-10, 2009! Are you sick and tired of climate alarmism based on flawed science and economics? Then join hundreds of the world’s elite scientists, economists, legal experts, business people, legislators, and members of the media in New York City to discuss the latest science, economics, and politics of global warming.
When it comes to global warming, dire predictions seem to be all we see or hear. In Climate of Extremes, a new book by climatologists Patrick Michaels and Robert Balling Jr., we learn why the news and information we receive about global warming have become so apocalyptic. The science itself has become increasingly biased, with warnings of extreme consequences from global warming becoming the norm. That bias is then communicated through the media, who focus on only extreme predictions.
From http://www.globalwarming.org/
Jumat, 20 Februari 2009
The Greens Can Take Away My Steak the Moment They Pry It from My Cold, Dead Hands
by William Yeatman
February 19, 2009 @ 11:46 am
I have been a steak snob ever since I apprenticed under a master butcher in Ojai Valley, California a few years back. Indeed, I’m the kind of guy who orders his steak so rare that the people dining at the table next to me get uncomfortable. So it is with rising dread that I witness the greenies’ assault on the beef industry. Enviro-types have long hated cattlemen for treating cows like animals, but recently, they’ve found a new motive to attack providers of delicious red meat: climate change. According to the latest in the “It’s easy being green” series run by the Center for American Progress, “it’s worth taking a closer look” at beef production, for “the planet’s sake,” because industrial scale livestock farming has a big carbon footprint. The piece references a 2006 study that compares “a Toyota Prius, which uses about one fourth as much as fuel as a Chevrolet Suburban SUV, to a plant-based diet, which uses roughly one-fourth as much energy as a diet rich in red meat.” How about a steak tax, America? After all, the greens put gas-guzzling SUV’s (God bless ‘em) in their cross-hairs, and came out on top-they forced through new fuel efficiency regulations that have saddled an ailing Detroit with a $100 billion burden. Can the cattleman be far behind?
From http://www.globalwarming.org/
February 19, 2009 @ 11:46 am
I have been a steak snob ever since I apprenticed under a master butcher in Ojai Valley, California a few years back. Indeed, I’m the kind of guy who orders his steak so rare that the people dining at the table next to me get uncomfortable. So it is with rising dread that I witness the greenies’ assault on the beef industry. Enviro-types have long hated cattlemen for treating cows like animals, but recently, they’ve found a new motive to attack providers of delicious red meat: climate change. According to the latest in the “It’s easy being green” series run by the Center for American Progress, “it’s worth taking a closer look” at beef production, for “the planet’s sake,” because industrial scale livestock farming has a big carbon footprint. The piece references a 2006 study that compares “a Toyota Prius, which uses about one fourth as much as fuel as a Chevrolet Suburban SUV, to a plant-based diet, which uses roughly one-fourth as much energy as a diet rich in red meat.” How about a steak tax, America? After all, the greens put gas-guzzling SUV’s (God bless ‘em) in their cross-hairs, and came out on top-they forced through new fuel efficiency regulations that have saddled an ailing Detroit with a $100 billion burden. Can the cattleman be far behind?
From http://www.globalwarming.org/
The Greens Can Take Away My Steak the Moment They Pry It from My Cold, Dead Hands
by William Yeatman
February 19, 2009 @ 11:46 am
I have been a steak snob ever since I apprenticed under a master butcher in Ojai Valley, California a few years back. Indeed, I’m the kind of guy who orders his steak so rare that the people dining at the table next to me get uncomfortable. So it is with rising dread that I witness the greenies’ assault on the beef industry. Enviro-types have long hated cattlemen for treating cows like animals, but recently, they’ve found a new motive to attack providers of delicious red meat: climate change. According to the latest in the “It’s easy being green” series run by the Center for American Progress, “it’s worth taking a closer look” at beef production, for “the planet’s sake,” because industrial scale livestock farming has a big carbon footprint. The piece references a 2006 study that compares “a Toyota Prius, which uses about one fourth as much as fuel as a Chevrolet Suburban SUV, to a plant-based diet, which uses roughly one-fourth as much energy as a diet rich in red meat.” How about a steak tax, America? After all, the greens put gas-guzzling SUV’s (God bless ‘em) in their cross-hairs, and came out on top-they forced through new fuel efficiency regulations that have saddled an ailing Detroit with a $100 billion burden. Can the cattleman be far behind?
From http://www.globalwarming.org/
February 19, 2009 @ 11:46 am
I have been a steak snob ever since I apprenticed under a master butcher in Ojai Valley, California a few years back. Indeed, I’m the kind of guy who orders his steak so rare that the people dining at the table next to me get uncomfortable. So it is with rising dread that I witness the greenies’ assault on the beef industry. Enviro-types have long hated cattlemen for treating cows like animals, but recently, they’ve found a new motive to attack providers of delicious red meat: climate change. According to the latest in the “It’s easy being green” series run by the Center for American Progress, “it’s worth taking a closer look” at beef production, for “the planet’s sake,” because industrial scale livestock farming has a big carbon footprint. The piece references a 2006 study that compares “a Toyota Prius, which uses about one fourth as much as fuel as a Chevrolet Suburban SUV, to a plant-based diet, which uses roughly one-fourth as much energy as a diet rich in red meat.” How about a steak tax, America? After all, the greens put gas-guzzling SUV’s (God bless ‘em) in their cross-hairs, and came out on top-they forced through new fuel efficiency regulations that have saddled an ailing Detroit with a $100 billion burden. Can the cattleman be far behind?
From http://www.globalwarming.org/
Why Is HuffPo Pimping Ethanol?
by William Yeatman
February 18, 2009 @ 2:48 pm
Yesterday’s edition of the Internet news juggernaut, The Huffington Post, ran an ethanol love song written by Bob Dinneen, who is identified in his HuffPo biography as “the ethanol industry’s lead lobbyist before the Congress and Administration.” Given that Mr. Dinneen is a professional shill, there’s no need to repeat his self-serving argument. Whatever is his case for ethanol, the bottom line is his bottom line. But it is worth saying a few things about the reality of ethanol. Ethanol is touted as a solution to America’s dependence on foreign oil. It is true that ethanol—an alcohol distilled from corn—can be used to run cars. “Can,” however, does not mean “should.” Indeed, ethanol is a bad idea both economically and environmentally. For starters, ethanol is twice as expensive as gasoline, so filling your car with ethanol raises your fuel bill. Also, by turning corn, which is usually used food, into fuel, demand for food increases. So, increased ethanol use raises your food bill too. Finally, ethanol is awful for the environment—it results in increased corn cultivation, which leads to greater nitrogen runoff, which causes massive, oxygen-depleted “dead zones” in our streams, lakes, rivers and oceans. Yet Americans are forced to buy ethanol thanks to laws written by the ultra-powerful corn and agribusiness lobbies. Ethanol makes corn growers and ethanol producers rich, so they have spent millions lobbying legislators to pass (1) generous taxpayer subsidies for ethanol production, and (2) a Soviet-style production quota that forces Americans to use a certain percentage of ethanol in the nation’s fuel supply (last year, Americans were forced to buy 9 billion gallons of corn fuel). So why is the Huffington Post pimping the ethanol boondoggle when so many others have stopped supporting these corrupt programs? King corn and its agribusiness allies could never convince Americans to buy ethanol; instead, they convinced Congress to force ethanol on consumers. The industry’s existence is a powerful testament to lobbyists’ ability to rig the rules of the game to enrich their clients at the expense of everyday Americans—a tacit endorsement from the Huffington Post can only help the ethanol lobby continue to do so. Huff Po is generally a well-done publication, so why run a pitch by a guy who is trying to get rich by screwing the consumer? Since when are greedy lobbyists palatable to the left?
From http://www.globalwarming.org/
February 18, 2009 @ 2:48 pm
Yesterday’s edition of the Internet news juggernaut, The Huffington Post, ran an ethanol love song written by Bob Dinneen, who is identified in his HuffPo biography as “the ethanol industry’s lead lobbyist before the Congress and Administration.” Given that Mr. Dinneen is a professional shill, there’s no need to repeat his self-serving argument. Whatever is his case for ethanol, the bottom line is his bottom line. But it is worth saying a few things about the reality of ethanol. Ethanol is touted as a solution to America’s dependence on foreign oil. It is true that ethanol—an alcohol distilled from corn—can be used to run cars. “Can,” however, does not mean “should.” Indeed, ethanol is a bad idea both economically and environmentally. For starters, ethanol is twice as expensive as gasoline, so filling your car with ethanol raises your fuel bill. Also, by turning corn, which is usually used food, into fuel, demand for food increases. So, increased ethanol use raises your food bill too. Finally, ethanol is awful for the environment—it results in increased corn cultivation, which leads to greater nitrogen runoff, which causes massive, oxygen-depleted “dead zones” in our streams, lakes, rivers and oceans. Yet Americans are forced to buy ethanol thanks to laws written by the ultra-powerful corn and agribusiness lobbies. Ethanol makes corn growers and ethanol producers rich, so they have spent millions lobbying legislators to pass (1) generous taxpayer subsidies for ethanol production, and (2) a Soviet-style production quota that forces Americans to use a certain percentage of ethanol in the nation’s fuel supply (last year, Americans were forced to buy 9 billion gallons of corn fuel). So why is the Huffington Post pimping the ethanol boondoggle when so many others have stopped supporting these corrupt programs? King corn and its agribusiness allies could never convince Americans to buy ethanol; instead, they convinced Congress to force ethanol on consumers. The industry’s existence is a powerful testament to lobbyists’ ability to rig the rules of the game to enrich their clients at the expense of everyday Americans—a tacit endorsement from the Huffington Post can only help the ethanol lobby continue to do so. Huff Po is generally a well-done publication, so why run a pitch by a guy who is trying to get rich by screwing the consumer? Since when are greedy lobbyists palatable to the left?
From http://www.globalwarming.org/
So What Does He Think of Cap & Trade?
by Iain Murray
20 February 2009 @ 11:50 am
Good news and bad news for drivers from federal Transportation Secretary Ray LaHood. The good news is:
Most seriously, it will entail government surveillance of our driving habits. So there are obvious civil liberty concerns. Older Britons - and not so old - will remember the government asking them, “Is your journey really necessary?” This will give the government the chance to ask that question more directly.
More generally, the tax may be self-defeating. It will serve as a disincentive to drive, thereby reducing the amount it raises. For those who have to drive long distances, because they have a long commute or because their job requires it in other ways, it will also serve as a burden on economic activity (although perhaps no more than the current gas tax). Environmentalists may worry that it will reduce the incentive to switch to more fuel-efficient vehicles. While this would probably be a good thing in terms of road safety, environmentalists are not ones to let 2000 deaths a year get in the way of their war on oil, so my betting is that the VMT tax will, in fact, supplement a gas tax, putting your journey in double jeopardy.
Finally, if the Secretary is so opposed to a gas tax, what does he think of cap-and-trade of greenhouse gas emissions, which will be functionally equivalent to a gas tax? That’s administration policy. So it looks like the Secretary is actually in favor of a gas tax, as long as we don’t call it that.
UPDATE: I meant to include a few words about an even better idea. The redoubtable Jerry Taylor has instead done it for me at The Corner:
20 February 2009 @ 11:50 am
Good news and bad news for drivers from federal Transportation Secretary Ray LaHood. The good news is:
LaHood said he firmly opposes raising the federal gasoline tax in the current recession.The bad news is that, because people are using less gas as they switch to more fuel-efficient vehicles and just plain drive less, LaHood is thinking of taxing us according to how many miles we drive - a VMT (Vehicle Miles Traveled) Tax. Now in some ways, this is a more equitable taxation scheme to fund road maintenance than the gas tax - it’s more reflective of the amount you use the road - and is therefore less objectionable, especially if it replaces rather than supplements the gas tax. However, it comes with a host of ramifications.
Most seriously, it will entail government surveillance of our driving habits. So there are obvious civil liberty concerns. Older Britons - and not so old - will remember the government asking them, “Is your journey really necessary?” This will give the government the chance to ask that question more directly.
More generally, the tax may be self-defeating. It will serve as a disincentive to drive, thereby reducing the amount it raises. For those who have to drive long distances, because they have a long commute or because their job requires it in other ways, it will also serve as a burden on economic activity (although perhaps no more than the current gas tax). Environmentalists may worry that it will reduce the incentive to switch to more fuel-efficient vehicles. While this would probably be a good thing in terms of road safety, environmentalists are not ones to let 2000 deaths a year get in the way of their war on oil, so my betting is that the VMT tax will, in fact, supplement a gas tax, putting your journey in double jeopardy.
Finally, if the Secretary is so opposed to a gas tax, what does he think of cap-and-trade of greenhouse gas emissions, which will be functionally equivalent to a gas tax? That’s administration policy. So it looks like the Secretary is actually in favor of a gas tax, as long as we don’t call it that.
UPDATE: I meant to include a few words about an even better idea. The redoubtable Jerry Taylor has instead done it for me at The Corner:
That said, there is an even better reform — get rid of federal gasoline taxes altogether and send all road construction and maintenance programs back to the states. All the bridges to nowhere, all the Robert Byrd memorial thises and thats, all the corruption associated with log-rolling transportation earmarks in Congress . . . all goes away. Alas, not even the late, great President George W. Bush dared entertain such an idea, and with all roads to recovery thought to come out of some shovel-ready highway somewhere, LaHood most certainly won’t go there.From http://www.globalwarming.org/
Sabtu, 14 Februari 2009
Al Gore Gives Me Hope for a Better World
by William Yeatman, Cooler Heads Digest
July 23, 2008 @ 12:02 pm
Public transportation is often wearisome. Today, for example, I missed my metro train from Northern Virginia to Washington, DC because a portly tourist took ten minutes to pump a roll of nickels into the ticket machine. Yesterday, the bus I take from outside my residence to the metro station failed to arrive altogether, which left me sweating in the mid-Atlantic July heat and humidity for forty minutes. And last weekend, engineers were performing track work on both the metro lines I use to get to my other job, so the fifteen mile trip took more than 2 hours.
But I’m not complaining. Instead, this is a story about hope. Specifically, it’s about my hope to emulate Al Gore. I want to be like Al Gore for the same reason I listen to rap stars—I covet their conspicuous consumption. Al Gore was born into wealth, but he has made even more money by talking about global warming.
Al is so rich that he doesn’t have to use public transit like me. His main form of travel is a luxurious Lear jet. When he does have to drive around, he uses 2 big black SUV’s, which he leaves idling outside wherever he stops to make speeches about global warming. That way, he can keep the AC on.
I am thankful that I have heroes like Al Gore and rap stars in my life, because they give me hope for a better world, one in which I’ll never have to use public transportation.
From http://www.globalwarming.org/
July 23, 2008 @ 12:02 pm
Public transportation is often wearisome. Today, for example, I missed my metro train from Northern Virginia to Washington, DC because a portly tourist took ten minutes to pump a roll of nickels into the ticket machine. Yesterday, the bus I take from outside my residence to the metro station failed to arrive altogether, which left me sweating in the mid-Atlantic July heat and humidity for forty minutes. And last weekend, engineers were performing track work on both the metro lines I use to get to my other job, so the fifteen mile trip took more than 2 hours.
But I’m not complaining. Instead, this is a story about hope. Specifically, it’s about my hope to emulate Al Gore. I want to be like Al Gore for the same reason I listen to rap stars—I covet their conspicuous consumption. Al Gore was born into wealth, but he has made even more money by talking about global warming.
Al is so rich that he doesn’t have to use public transit like me. His main form of travel is a luxurious Lear jet. When he does have to drive around, he uses 2 big black SUV’s, which he leaves idling outside wherever he stops to make speeches about global warming. That way, he can keep the AC on.
I am thankful that I have heroes like Al Gore and rap stars in my life, because they give me hope for a better world, one in which I’ll never have to use public transportation.
From http://www.globalwarming.org/
Who Cares About the Consumer?
by Iain Murray
February 13, 2009 @ 2:03 pm
Electricity consumers beware! The so-called-stimulus bill includes provision for something called “decoupling.” E&E Daily reports:
“Decoupling” is a mystifying-sounding name for an economically terrifying concept. This is how it is described in government/regulatory jargon:
Now, in English: the laws of supply and demand mean that if the quantity demanded goes down, you sell less of the product you supply. In energy supply terms, this means that if conservation works, energy utilities see their profits decline, because in general they are regulated so tightly that they cannot raise their prices, which is the usual response to declining demand. Therefore, if there is a policy goal of increasing energy conservation, then utilities are likely to stand in the way, because their profits depend on selling more energy; they are unlikely to install technologies that reduce the need for energy, for example. Accordingly, the link between quantity sold and profits must be broken, or “decoupled.” This is normally done by regulating rates such that if more energy is sold, the marginal rate goes down and, if less is sold, the marginal rate goes up.
Now, to some this may sound like supply and demand at work, but it is actually a market manipulation aimed at achieving a policy goal. In fact, it most resembles a supply-side reform designed by someone who doesn’t understand supply-side economics. The utility remains regulated and the incentive structure is designed such that the utility is more inclined to respond to the regulator rather than the consumer. When profits are essentially guaranteed at a certain level, the utility will be more likely to spend money pleasing the regulator and delivering service improvements to that body than to the consumer. The consumer may end up paying more money for less electricity and the utility and regulator will both be happy. The dangers here are obvious; insulating the supplier from the consumer is a terrible idea.
Here is a useful paper from the Electricity Consumers Resource Council that raises several further objections to decoupling, which it says is a blunt instrument. They are:
1. Decoupling Promotes Mediocrity In The Management Of A Utility.
2. Decoupling Shifts Significant Business Risk From Shareholders To Consumers With
Only Dubious Opportunities For Net Increases In Consumer Benefits.
3. Decoupling Eliminates A Utility’s Financial Incentive To Support Economic
Development Within Its Franchise Area. This Includes The Incentive To Support The
Well Being of Manufacturers And Their Workforce.
4. Revenue Decoupling Mechanisms Tend To Address ‘Lost Revenues’ And Not The Real
Issue, Which Is Lost Profits.
5. The First And Most Important Step Regulators Can Take To Promote Energy
Efficiency Is To Send The Proper Price Signals To Each Customer Class.
6. Several States Have Successfully Used Alternative Entities—Including Government
Agencies—For Unselling Energy. This Creates An Entity Whose Sole Mission Is To
Promote Energy Efficiency, And Retains A Separate Entity Whose Responsibility Is To
Efficiently Sell And Deliver Energy.
(Not sure about that last one, but if there’s a policy goal to reduce energy consumption, that’s certainly a better way to go about it than decoupling).
A true supply-side reform would actually reduce regulation to the basics (reasonable safety requirements etc) and thereby not only allow but encourage the best conservation measure of all - demand-based pricing. This would allow rates to increase and decrease not according to some bureaucrat’s assessment of whether a policy goal is being met, but hourly, according to whether the system is being over- or under-used. Less energy will be consumed at peak times, thereby reducing the need for back-up energy generation, and more will be used at off-peak times, reducing the amount of wasted energy then. Overall, as long as the consumer responds to the price signal, consumers will probably use less electricity but also see their bills drop, while the utilities will save in lower production costs. Decoupling-style rate regulation actually stands in the way of this win-win goal.
Image by Skagit Information Management Systems, used under Creative Commons License.
From http://www.globalwarming.org/
February 13, 2009 @ 2:03 pm
Electricity consumers beware! The so-called-stimulus bill includes provision for something called “decoupling.” E&E Daily reports:
Also included in the final version is a requirement that governors who want additional state energy efficiency grants ensure that their state regulators guarantee revenue to utilities to support efficiency programs.
State regulators and consumer advocates strongly opposed the provision, saying it ties regulators’ hands and is not the best tool to promote efficiency.
The National Association of Regulatory Utility Commissioners said many regulators cannot assure that “decoupling” requirements will be met. “These ambiguous conditions will create confusion and legal uncertainty and will likely delay or preclude the release of these critical funds,” NARUC said in a statement. “This benefits neither the States the utilities, nor, most importantly, the citizens they serve.”
“Decoupling” is a mystifying-sounding name for an economically terrifying concept. This is how it is described in government/regulatory jargon:
In order to motivate utilities to consider all the options when planning and making resource decisions on how to meet their customers’ needs, the sales-revenue link in current rate design must be broken. Breaking that link between the utility’s commodity sales and revenues, removes both the incentive to increase electricity sales and the disincentive to run effective energy efficiency programs or invest in other activities that may reduce load. Decision-making then refocuses on making least-cost investments to deliver reliable energy services to customers even when such investments reduce throughput. The result is a better alignment of shareholder and customer interests to provide for more economically and environmentally efficient resource decisions.
Now, in English: the laws of supply and demand mean that if the quantity demanded goes down, you sell less of the product you supply. In energy supply terms, this means that if conservation works, energy utilities see their profits decline, because in general they are regulated so tightly that they cannot raise their prices, which is the usual response to declining demand. Therefore, if there is a policy goal of increasing energy conservation, then utilities are likely to stand in the way, because their profits depend on selling more energy; they are unlikely to install technologies that reduce the need for energy, for example. Accordingly, the link between quantity sold and profits must be broken, or “decoupled.” This is normally done by regulating rates such that if more energy is sold, the marginal rate goes down and, if less is sold, the marginal rate goes up.
Now, to some this may sound like supply and demand at work, but it is actually a market manipulation aimed at achieving a policy goal. In fact, it most resembles a supply-side reform designed by someone who doesn’t understand supply-side economics. The utility remains regulated and the incentive structure is designed such that the utility is more inclined to respond to the regulator rather than the consumer. When profits are essentially guaranteed at a certain level, the utility will be more likely to spend money pleasing the regulator and delivering service improvements to that body than to the consumer. The consumer may end up paying more money for less electricity and the utility and regulator will both be happy. The dangers here are obvious; insulating the supplier from the consumer is a terrible idea.
Here is a useful paper from the Electricity Consumers Resource Council that raises several further objections to decoupling, which it says is a blunt instrument. They are:
1. Decoupling Promotes Mediocrity In The Management Of A Utility.
2. Decoupling Shifts Significant Business Risk From Shareholders To Consumers With
Only Dubious Opportunities For Net Increases In Consumer Benefits.
3. Decoupling Eliminates A Utility’s Financial Incentive To Support Economic
Development Within Its Franchise Area. This Includes The Incentive To Support The
Well Being of Manufacturers And Their Workforce.
4. Revenue Decoupling Mechanisms Tend To Address ‘Lost Revenues’ And Not The Real
Issue, Which Is Lost Profits.
5. The First And Most Important Step Regulators Can Take To Promote Energy
Efficiency Is To Send The Proper Price Signals To Each Customer Class.
6. Several States Have Successfully Used Alternative Entities—Including Government
Agencies—For Unselling Energy. This Creates An Entity Whose Sole Mission Is To
Promote Energy Efficiency, And Retains A Separate Entity Whose Responsibility Is To
Efficiently Sell And Deliver Energy.
(Not sure about that last one, but if there’s a policy goal to reduce energy consumption, that’s certainly a better way to go about it than decoupling).
A true supply-side reform would actually reduce regulation to the basics (reasonable safety requirements etc) and thereby not only allow but encourage the best conservation measure of all - demand-based pricing. This would allow rates to increase and decrease not according to some bureaucrat’s assessment of whether a policy goal is being met, but hourly, according to whether the system is being over- or under-used. Less energy will be consumed at peak times, thereby reducing the need for back-up energy generation, and more will be used at off-peak times, reducing the amount of wasted energy then. Overall, as long as the consumer responds to the price signal, consumers will probably use less electricity but also see their bills drop, while the utilities will save in lower production costs. Decoupling-style rate regulation actually stands in the way of this win-win goal.
Image by Skagit Information Management Systems, used under Creative Commons License.
From http://www.globalwarming.org/
The Juche Weather Idea
by Ivan Osorio
February 13, 2009 @ 3:00 pm
North Korea’s official propaganda organ, the Korea Central News Agency, reveals the real cause of global warming:
So is this why Kim Jong Il wants the ability to bring about nuclear winter?
From http://www.globalwarming.org/
February 13, 2009 @ 3:00 pm
North Korea’s official propaganda organ, the Korea Central News Agency, reveals the real cause of global warming:
The snow in the area of Jong Il Peak began to thaw with the auspicious February 16, the birthday of General Secretary Kim Jong Il just ahead, heralding the approach of spring.
According to the data tabulated in the Paektusan Secret Camp Meteorological Observatory, the temperature in the area from the beginning of February this year is 15 degrees higher than last year to make willow trees in Sobaeksu Valley open catkins on Feb. 11 three days earlier than the previous years.
Five centimeters of snow is thawing every day on an average in the area.
As there is no strong wind and mild climate continues there, it is foreseen that the depth of snow will go down by nearly 60 centimeters in the middle of this month.
An unprecedented phenomenon of moon halo was observed.
At around 18:25 on February 8 the surroundings of the peak became as bright as daytime to make the night view above Kim Jong Il’s birthplace in the Paektusan Secret Camp brilliant.
This was the first of its kind there this year.
Those who witnessed the opening of willow catkins earlier than the previous years and the unprecedented nocturnal view said excitedly that even the nature and the sky unfolded such mysterious ecstasy in celebration of the birthday of Kim Jong Il.
So is this why Kim Jong Il wants the ability to bring about nuclear winter?
From http://www.globalwarming.org/
John Christy Debates William Schlesinger
by Paul Chesser, Climate Strategies Watch
February 12, 2009 @ 2:50 pm
Last night in Hickory, N.C., in a forum co-sponsored by the John Locke Foundation and the Reese Institute for Conservation of Natural Resources, atmospheric scientist John Christy debated William Schlesinger, former dean of the Nicholas School of the Environment at Duke University. It was a skeptic vs. alarmist smackdown, and the local newspaper of record, the Daily Record, thinks that Christy may have prevailed (see sidebar):
My colleague at the Locke Foundation, vice president for research (and debate timekeeper) Roy Cordato, had a much stronger take with which I agree, as you might expect:
You can watch the whole 75-minute debate on the Locke Foundation’s blog. It’s also posted in eight pieces on YouTube.
From http://www.globalwarming.org/
February 12, 2009 @ 2:50 pm
Last night in Hickory, N.C., in a forum co-sponsored by the John Locke Foundation and the Reese Institute for Conservation of Natural Resources, atmospheric scientist John Christy debated William Schlesinger, former dean of the Nicholas School of the Environment at Duke University. It was a skeptic vs. alarmist smackdown, and the local newspaper of record, the Daily Record, thinks that Christy may have prevailed (see sidebar):
An informal, unscientific survey revealed that many attendees, regardless of age, think global warming is overblown and people should not panic about the future.
Schlesinger said most people don’t want to recognize the problem, that they hope it will just go away. “It won’t,” he said. “It will only get worse.”
Show me the evidence was Christy’s mantra. The data doesn’t justify the gloom and doom, he said. Wishful thinking or not, a lot of people who attended the forum agree with Christy.
My colleague at the Locke Foundation, vice president for research (and debate timekeeper) Roy Cordato, had a much stronger take with which I agree, as you might expect:
…Schlesinger said that he was not going to discuss the science. He then went directly to rattling off scary scenarios about the future. So about two thirds of his talk was scare mongering with no actual defense of the hypothesis that human induced catastrophic global warming is in the process of occurring. What is interesting is that in “skipping over the science” he flipped through a number of slides that he had prepared to use including the now infamous and discredited “hockey stick” graph showing 900 years of no climate change and the last 100 years of dramatic warming.
You can watch the whole 75-minute debate on the Locke Foundation’s blog. It’s also posted in eight pieces on YouTube.
From http://www.globalwarming.org/
Travesty–Rep. Inslee’s behavior at Energy & Commerce hearing
by Marlo Lewis
February 12, 2009 @ 1:36 pm
I just watched the Energy & Commerce Subcommittee hearing on “The Climate Crisis: National Security, Public Health, and Economic Threats.” Committee rules allow the minority one-third of the witnesses. Originally, there were to be four majority witnesses, which works out to only one minority witness, or one-fourth (because two witnesses would equal two-fifths–slightly more than one-third). However, when Chairman Markey learned that Dr. Patrick Michaels of the Cato Institute was to be the minority witness, he added a 5th majority witness, Prof. Daniel Schragg of Harvard University. So the decks were stacked against Michaels 5 to 1. However, even that was not enough to satisfy Rep. Jay Inslee (D-WA). He attacked Michaels personally, accusing him of not being “forthright” with the Committee, trying to “pull a fast one,” and treating the Members like “chumps.” Inslee demanded to know why it was even necessary to have witnesses like Michaels on the panel, when it’s so obvious that global warming is bad and nothing could be more costly than inaction on climate change. Michaels’s oral testimony may be summarized as follows: (1) Forecasts of the impacts of climate change on national security, public health, and the economy cannot be better than the temperature projections on which they are based; (2) the 21 models used in the IPCC’s mid-range greenhouse gas emissions scenario project a constant, not accelerating rate of global warming through the 21st century; (3) the observed rate of temperature change over the past 20 years has been remarkably constant; (4) however, the observed rate is at or below the low-end of the range forecast by the models; (5) therefore, the models are too sensitive and likely over-predict future warming; (6) hence, also, impact assessments based on those model projections are unlikely to be correct. In his fulmination, Inslee claimed (a) that Michaels compared apples (observed temperatures) to oranges (model projections of future warming), and (b) that global warming is accelerating. He is wrong on both counts. Michaels compared observed temperatures with model projections over the same period. Finding a poor fit, he drew the only reasonable conclusion: Model projections of future warming are also likely to be erroneous. Also, global warming is not accelerating. Since 1976, the observed rate has been about 0.17 degrees Celsius per decade. So, on the basis of two falsehoods, Inslee essentially called Michaels a liar. Then, instead of letting Michaels respond, Inslee asked for commentary by Prof. Schragg. This left Michaels exactly 15 second to respond to 4-plus minutes of verbiage from Inslee and Schragg. The contrast between Dr. Michaels’s calm, clear, patient exposition of scientific basics and Inslee’s rude, arrogant, intolerance of dissenting views could not have been clearer. Global warming zealotry is poisoning the atmosphere of public discourse–that is probably the main conclusion Web viewers draw from this hearing.
From http://www.globalwarming.org/
February 12, 2009 @ 1:36 pm
I just watched the Energy & Commerce Subcommittee hearing on “The Climate Crisis: National Security, Public Health, and Economic Threats.” Committee rules allow the minority one-third of the witnesses. Originally, there were to be four majority witnesses, which works out to only one minority witness, or one-fourth (because two witnesses would equal two-fifths–slightly more than one-third). However, when Chairman Markey learned that Dr. Patrick Michaels of the Cato Institute was to be the minority witness, he added a 5th majority witness, Prof. Daniel Schragg of Harvard University. So the decks were stacked against Michaels 5 to 1. However, even that was not enough to satisfy Rep. Jay Inslee (D-WA). He attacked Michaels personally, accusing him of not being “forthright” with the Committee, trying to “pull a fast one,” and treating the Members like “chumps.” Inslee demanded to know why it was even necessary to have witnesses like Michaels on the panel, when it’s so obvious that global warming is bad and nothing could be more costly than inaction on climate change. Michaels’s oral testimony may be summarized as follows: (1) Forecasts of the impacts of climate change on national security, public health, and the economy cannot be better than the temperature projections on which they are based; (2) the 21 models used in the IPCC’s mid-range greenhouse gas emissions scenario project a constant, not accelerating rate of global warming through the 21st century; (3) the observed rate of temperature change over the past 20 years has been remarkably constant; (4) however, the observed rate is at or below the low-end of the range forecast by the models; (5) therefore, the models are too sensitive and likely over-predict future warming; (6) hence, also, impact assessments based on those model projections are unlikely to be correct. In his fulmination, Inslee claimed (a) that Michaels compared apples (observed temperatures) to oranges (model projections of future warming), and (b) that global warming is accelerating. He is wrong on both counts. Michaels compared observed temperatures with model projections over the same period. Finding a poor fit, he drew the only reasonable conclusion: Model projections of future warming are also likely to be erroneous. Also, global warming is not accelerating. Since 1976, the observed rate has been about 0.17 degrees Celsius per decade. So, on the basis of two falsehoods, Inslee essentially called Michaels a liar. Then, instead of letting Michaels respond, Inslee asked for commentary by Prof. Schragg. This left Michaels exactly 15 second to respond to 4-plus minutes of verbiage from Inslee and Schragg. The contrast between Dr. Michaels’s calm, clear, patient exposition of scientific basics and Inslee’s rude, arrogant, intolerance of dissenting views could not have been clearer. Global warming zealotry is poisoning the atmosphere of public discourse–that is probably the main conclusion Web viewers draw from this hearing.
From http://www.globalwarming.org/
State AGs Give EPA Administrator Lisa Jackson (recycled) bum advice
by Marlo Lewis
February 11, 2009 @ 6:14 pm
n a letter dated 5 February 2009, 17 state attorneys general (AGs) plus three other non-federal officials urge EPA Administrator Lisa Jackson to respond to the Supreme Court case of Massachusetts v. EPA (2007) by issuing a finding that greenhouse gas (GHG) emissions from new motor vehicles cause or contribute to “air pollution” that may reasonably be anticipated to endanger public health and welfare.
To explain why EPA should make an endangerment finding, the AGs quote from EPA’s July 2008 Advanced Notice of Proposed Rulemaking (ANPR): “The IPCC projects with virtual certainty (i.e., a greater than 99% likelihood) declining air quality in cities due to warmer days and nights, and fewer cold days and nights, and/or more frequent hot days and nights over most land areas, including the U.S.” In the ANPR, EPA goes on to say that the increase in air pollution from global warming will lead to “increases in regional ozone pollution, with associated risks for respiratory infection, aggravation of asthma, and potential premature death, especially for people in susceptible groups.”
This chain of reasoning flies in the face of history and public policy reality.
As American Enterprise Institute scholar Joel Schwartz documents, air quality in U.S. cities has improved steadily over the past three decades as urban air temperatures have increased. Nobody should know this better than EPA, because EPA deserves much of the credit and regularly publishes the relevant data. From 1980 to 2006, emissions of the six criteria pollutants fell by the following amounts: lead, 97%; oxides of nitrogen, 33%; volatile organic compounds, 52%; sulfur dioxide, 47%; carbon monoxide, 50%; PM10, 28%; and PM2.5, 31%. As a consequence, ambient concentrations of polluting emissions also declined. From 1980 to 2007, air pollution levels fell by the following amounts: nitrogen dioxide, 43%; sulfur dioxide, 68%; and ground-level ozone, 21%.
More importantly, under existing regulatory requirements, air pollution emissions and concentrations will continue to decline despite potential climate change. Schwartz explains:
We may “reasonably anticipate” that in 20 years most U.S. air pollution problems will have been solved, and that by mid-century significant air pollution will exist only in history books.
So the AGs are advising Jackson to act on the basis of bogus “science” that EPA parroted from the IPCC without due diligence.
The AGs are a notoriously unreliable bunch. When litigating Massachusetts v. EPA, they said that the case posed no risks to the U.S. economy because it solely concerned one subset of mobile emission sources (new motor vehicles) under one provision of the Clean Air Act (§202), which requires EPA to consider compliance costs when setting emission standards. The only significant consequence of promulgating first-ever GHG emission standards for new cars and trucks, they said, was that we’d all get better gas mileage and suffer less pain at the pump.
In reality, as EPA’s ANPR and numerous comments thereon reveal, the Clean Air Act is a highly interconnected statute. Setting GHG emission standards for new motor vehicles would initiate a regulatory cascade through multiple provisions of the Act, exposing 1.2 million previously unregulated buildings and facilities to costly and time-consuming regulation under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program, and millions of such sources to pointless paperwork burdens and emission fees under the Title V operating permits program.
Nor is that all. The endangerment finding that would compel EPA to establish GHG emission standards for new motor vehicles would also set a precedent for establishing National Ambient Air Quality Standards (NAAQS) for greenhouse gases. As I explain here, this could lead to the promulgation of NAAQS for carbon dioxide and other GHGs that the United States could not attain even through outright de-industrialization.
In short, if Ms. Jackson acts on the AGs’ advice, she would start a process that could turn the Clean Air Act into a gigantic de-stimulus package.
From http://www.globalwarming.org/
February 11, 2009 @ 6:14 pm
n a letter dated 5 February 2009, 17 state attorneys general (AGs) plus three other non-federal officials urge EPA Administrator Lisa Jackson to respond to the Supreme Court case of Massachusetts v. EPA (2007) by issuing a finding that greenhouse gas (GHG) emissions from new motor vehicles cause or contribute to “air pollution” that may reasonably be anticipated to endanger public health and welfare.
To explain why EPA should make an endangerment finding, the AGs quote from EPA’s July 2008 Advanced Notice of Proposed Rulemaking (ANPR): “The IPCC projects with virtual certainty (i.e., a greater than 99% likelihood) declining air quality in cities due to warmer days and nights, and fewer cold days and nights, and/or more frequent hot days and nights over most land areas, including the U.S.” In the ANPR, EPA goes on to say that the increase in air pollution from global warming will lead to “increases in regional ozone pollution, with associated risks for respiratory infection, aggravation of asthma, and potential premature death, especially for people in susceptible groups.”
This chain of reasoning flies in the face of history and public policy reality.
As American Enterprise Institute scholar Joel Schwartz documents, air quality in U.S. cities has improved steadily over the past three decades as urban air temperatures have increased. Nobody should know this better than EPA, because EPA deserves much of the credit and regularly publishes the relevant data. From 1980 to 2006, emissions of the six criteria pollutants fell by the following amounts: lead, 97%; oxides of nitrogen, 33%; volatile organic compounds, 52%; sulfur dioxide, 47%; carbon monoxide, 50%; PM10, 28%; and PM2.5, 31%. As a consequence, ambient concentrations of polluting emissions also declined. From 1980 to 2007, air pollution levels fell by the following amounts: nitrogen dioxide, 43%; sulfur dioxide, 68%; and ground-level ozone, 21%.
More importantly, under existing regulatory requirements, air pollution emissions and concentrations will continue to decline despite potential climate change. Schwartz explains:
EPA’s Clean Air Interstate Rule (CAIR) requires power plant SO2 and NOX emissions to decline more than 70% and 60%, respectively, during the next two decades, when compared with 2003 emissions. This is a cap on total emissions from power plants that remains in place independent of growth in electricity demand. [Note, in July 2008, the D.C. District Court of Appeals overturned CAIR, but whatever EPA puts in its place will likely be even more stringent.]
Recently implemented requirements for new automobiles and diesel trucks, and upcoming standards for new off-road diesel equipment will eliminate more than 80% of their VOC, NOX, and soot emissions during the next few decades, even after accounting for growth in total driving. Dozens of other federal and state requirements will eliminate most remaining emissions from other sources of air pollution.
We may “reasonably anticipate” that in 20 years most U.S. air pollution problems will have been solved, and that by mid-century significant air pollution will exist only in history books.
So the AGs are advising Jackson to act on the basis of bogus “science” that EPA parroted from the IPCC without due diligence.
The AGs are a notoriously unreliable bunch. When litigating Massachusetts v. EPA, they said that the case posed no risks to the U.S. economy because it solely concerned one subset of mobile emission sources (new motor vehicles) under one provision of the Clean Air Act (§202), which requires EPA to consider compliance costs when setting emission standards. The only significant consequence of promulgating first-ever GHG emission standards for new cars and trucks, they said, was that we’d all get better gas mileage and suffer less pain at the pump.
In reality, as EPA’s ANPR and numerous comments thereon reveal, the Clean Air Act is a highly interconnected statute. Setting GHG emission standards for new motor vehicles would initiate a regulatory cascade through multiple provisions of the Act, exposing 1.2 million previously unregulated buildings and facilities to costly and time-consuming regulation under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program, and millions of such sources to pointless paperwork burdens and emission fees under the Title V operating permits program.
Nor is that all. The endangerment finding that would compel EPA to establish GHG emission standards for new motor vehicles would also set a precedent for establishing National Ambient Air Quality Standards (NAAQS) for greenhouse gases. As I explain here, this could lead to the promulgation of NAAQS for carbon dioxide and other GHGs that the United States could not attain even through outright de-industrialization.
In short, if Ms. Jackson acts on the AGs’ advice, she would start a process that could turn the Clean Air Act into a gigantic de-stimulus package.
From http://www.globalwarming.org/
NADA report proves California waiver would create regulatory patchwork
by Marlo Lewis
February 13, 2009 @ 5:24 pm
A front-burner issue facing Environmental Protection Agency (EPA) Administrator Lisa Jackson is whether to grant a waiver under the Clean Air Act allowing the California Air Resources Board (CARB) to implement first-ever greenhouse gas (GHG) emission standards for new motor vehicles. Thirteen other states are poised to adopt the CARB program if Jackson grants the waiver. In all, about 40% of the U.S. auto market would come under the CARB rules.
Jackson’s predecessor, Stephen Johnson, rejected CARB’s application in December 2007. His reasons, published in the Federal Register in March 2008, may be summarized as follows. EPA’s historic practice has been to grant CARB waiver requests to address air pollution threats arising from circumstances specific to California–its topography, regional meteorology, and number of vehicles. In contrast, global climate change is, well, global. Conditions associated with global climate change in California are not sufficiently different from those in other states to justify a separate emissions program.
This argument, which is tantamount to saying that EPA won’t allow CARB to combat global warming because global warming is bad for people everywhere, predictably elicited scorn from California politicians and environmental groups.
“Patchwork Proven,” a new report by the National Association of Automobile Dealers (NADA), presents two compelling arguments against granting the waiver that Johnson should have made.
First, granting the waiver would violate the Energy Policy and Conservation Act (EPCA), which prohibits states from adopting laws or regulations “related to fuel economy.” Yes, I’m well aware that in Central Valley Chrysler-Jeep, Inc. v. Goldstone (2006), the U.S. District Court for Eastern California held that EPCA does not preempt CARB from establishing GHG standards for new motor vehicles. However, the Court’s reasoning was spurious, and Johnson should not have given it a free pass.
The CARB emissions program is essentially fuel economy regulation by another name. CO2 comprises 97% of the GHG emissions from motor vehicles. Since there is no commercial technology for capturing or filtering out motor vehicle CO2 emissions, the chief way to decrease CO2-equivalent grams per mile (that’s how the CARB GHG standards are calibrated) is to decrease fuel consumption per mile, i.e., increase fuel economy.
As “Patchwork Proven” points out, the relationship between fuel economy and tailpipe CO2 emissions is so close that EPA tests compliance with federal fuel economy standards by measuring vehicular CO2 emissions. The bottom line: “Absent a significant increase in new vehicle fleet fuel economy, it is impossible to comply with CARB’s regulation.” So the CARB emissions program is substantially “related to fuel economy.” As such, it is prohibited by EPCA.
Alas, in this day and age of judicial activism and global warming hysteria, we should not expect Jackson to pay heed to the spirit of EPCA. However, she and other Obama Administration officials should be worried about havoc that the waiver would wreak on the distressed U.S. auto industry.
CARB and its allies repeatedly deny that granting the waiver would create a regulatory “patchwork,” with automakers required to comply in different ways in different states. According to them, there would be at most two programs: the federal program and the California program. A dual system of regulating air pollution from vehicles has been in place since the start of the Clean Air Act. Vehicles built to federal standards are “federal cars” and vehicles built to CARB standards are “California cars.” Automakers have had no trouble building cars that meet two different emission standards. Promulgating GHG emission standards would merely update a system that has worked well for decades, CARB contends.
The fundamental flaw in this argument is that CO2 is not like the air-quality damaging pollutants subject to existing EPA and CARB emission standards. For smog-forming pollutants such as nitrogen oxides, both EPA and CARB specify how many grams per mile individual vehicles may emit. That’s not how CARB regulation of GHG emissions would work. There would not be two types of vehicles, “California” and “federal.” Rather, the CARB standards specify the CO2-equivalent grams per mile that each automaker must attain on average for the fleet it delivers for sale. In other words, the CARB program implicitly specifies fleet-average fuel economy.
This is a radical departure from previous EPA and CARB emission standards, and it inexorably produces a regulatory patchwork.
Here’s why. Consumer preferences and the corresponding mix of vehicles delivered for sale differ from state to state. For example, in 2007, the Dodge Ram (with a fuel economy rating of 18.7 mpg) accounted for 20.66% of all Chrysler vehicles sold in California, but only 9.46% of all Chrysler vehicles sold in Rhode Island, and 8.43% in New Jersey. In contrast, the Jeep Grand Cherokee (with a fuel economy rating of 20.2 mpg), accounted for only 5.23% of Chrysler vehicles sold in California but 11.23% of Chrysler vehicles sold in Rhode Island, and 16.26% in New Jersey.
The number and percentage of vehicle models an auto company “delivers for sale” differ from state to state. For any auto fleet, no two states are likely to have the same average fuel economy or CO2-equivalent grams per mile.
Thus, to comply with the CARB standards, automakers would have to adjust the “mix” of vehicles offered for sale in each state adopting those standards. In each such state, an automaker would have to “deliver for sale” enough vehicles with CO2-equivalent per mile (fuel economy) ratings above the CARB standard to offset vehicles delivered for sale with ratings below. The “mix-shuffling” required for compliance in State A would likely be different from that required for compliance in State B, C, and so on.
Note that the CARB program would create a vehicle-rationing patchwork even if there were no competing federal fuel economy standards. As the NADA report puts it, “If CARB’s regulation were to take effect in all 50 states, the resulting 50-state patchwork would require automakers to manage 50 unique state fleets and to individually meet CARB’s standard 50 different ways.”
Since the current mix in each state is determined by consumer preference, the adjusted mix would clash with consumer preference. The most likely compliance strategy would involve “rationing larger vehicles, discounting smaller models for quick sale, or other pricing strategies that distort the market,” the NADA report warns. Is that any way to rescue the auto industry?
Adding insult to injury, it’s not even clear that the CARB standards would achieve any significant reduction in emissions. CARB claims that adoption of its standards by 13 states would eliminate 59% more CO2 emissions in 2020 than would compliance with federal fuel economy rules. But companies forced to “deliver for sale” smaller, lighter, more fuel-economical vehicles in the CARB states would be allowed, under the federal fuel economy program, to sell more large, heavy, gas-guzzling vehicles in non-CARB states.
Moreover, if CARB rules restrict the supply and increase the cost of gas-guzzlers “delivered for sale” in California, for example, Californians would still be free to buy lower-priced gas guzzlers in Nevada and bring them back home. Emissions in California might go down somewhat, but auto sales, jobs, and tax revenues might go down even faster.
California politicians and environmental lobbyists talk about the CARB emissions program as if it were the greatest thing since sliced bread. Lisa Jackson would be well advised to read “Patchwork Proven” before deciding on CARB’s waiver request.
From http://www.globalwarming.org/
February 13, 2009 @ 5:24 pm
A front-burner issue facing Environmental Protection Agency (EPA) Administrator Lisa Jackson is whether to grant a waiver under the Clean Air Act allowing the California Air Resources Board (CARB) to implement first-ever greenhouse gas (GHG) emission standards for new motor vehicles. Thirteen other states are poised to adopt the CARB program if Jackson grants the waiver. In all, about 40% of the U.S. auto market would come under the CARB rules.
Jackson’s predecessor, Stephen Johnson, rejected CARB’s application in December 2007. His reasons, published in the Federal Register in March 2008, may be summarized as follows. EPA’s historic practice has been to grant CARB waiver requests to address air pollution threats arising from circumstances specific to California–its topography, regional meteorology, and number of vehicles. In contrast, global climate change is, well, global. Conditions associated with global climate change in California are not sufficiently different from those in other states to justify a separate emissions program.
This argument, which is tantamount to saying that EPA won’t allow CARB to combat global warming because global warming is bad for people everywhere, predictably elicited scorn from California politicians and environmental groups.
“Patchwork Proven,” a new report by the National Association of Automobile Dealers (NADA), presents two compelling arguments against granting the waiver that Johnson should have made.
First, granting the waiver would violate the Energy Policy and Conservation Act (EPCA), which prohibits states from adopting laws or regulations “related to fuel economy.” Yes, I’m well aware that in Central Valley Chrysler-Jeep, Inc. v. Goldstone (2006), the U.S. District Court for Eastern California held that EPCA does not preempt CARB from establishing GHG standards for new motor vehicles. However, the Court’s reasoning was spurious, and Johnson should not have given it a free pass.
The CARB emissions program is essentially fuel economy regulation by another name. CO2 comprises 97% of the GHG emissions from motor vehicles. Since there is no commercial technology for capturing or filtering out motor vehicle CO2 emissions, the chief way to decrease CO2-equivalent grams per mile (that’s how the CARB GHG standards are calibrated) is to decrease fuel consumption per mile, i.e., increase fuel economy.
As “Patchwork Proven” points out, the relationship between fuel economy and tailpipe CO2 emissions is so close that EPA tests compliance with federal fuel economy standards by measuring vehicular CO2 emissions. The bottom line: “Absent a significant increase in new vehicle fleet fuel economy, it is impossible to comply with CARB’s regulation.” So the CARB emissions program is substantially “related to fuel economy.” As such, it is prohibited by EPCA.
Alas, in this day and age of judicial activism and global warming hysteria, we should not expect Jackson to pay heed to the spirit of EPCA. However, she and other Obama Administration officials should be worried about havoc that the waiver would wreak on the distressed U.S. auto industry.
CARB and its allies repeatedly deny that granting the waiver would create a regulatory “patchwork,” with automakers required to comply in different ways in different states. According to them, there would be at most two programs: the federal program and the California program. A dual system of regulating air pollution from vehicles has been in place since the start of the Clean Air Act. Vehicles built to federal standards are “federal cars” and vehicles built to CARB standards are “California cars.” Automakers have had no trouble building cars that meet two different emission standards. Promulgating GHG emission standards would merely update a system that has worked well for decades, CARB contends.
The fundamental flaw in this argument is that CO2 is not like the air-quality damaging pollutants subject to existing EPA and CARB emission standards. For smog-forming pollutants such as nitrogen oxides, both EPA and CARB specify how many grams per mile individual vehicles may emit. That’s not how CARB regulation of GHG emissions would work. There would not be two types of vehicles, “California” and “federal.” Rather, the CARB standards specify the CO2-equivalent grams per mile that each automaker must attain on average for the fleet it delivers for sale. In other words, the CARB program implicitly specifies fleet-average fuel economy.
This is a radical departure from previous EPA and CARB emission standards, and it inexorably produces a regulatory patchwork.
Here’s why. Consumer preferences and the corresponding mix of vehicles delivered for sale differ from state to state. For example, in 2007, the Dodge Ram (with a fuel economy rating of 18.7 mpg) accounted for 20.66% of all Chrysler vehicles sold in California, but only 9.46% of all Chrysler vehicles sold in Rhode Island, and 8.43% in New Jersey. In contrast, the Jeep Grand Cherokee (with a fuel economy rating of 20.2 mpg), accounted for only 5.23% of Chrysler vehicles sold in California but 11.23% of Chrysler vehicles sold in Rhode Island, and 16.26% in New Jersey.
The number and percentage of vehicle models an auto company “delivers for sale” differ from state to state. For any auto fleet, no two states are likely to have the same average fuel economy or CO2-equivalent grams per mile.
Thus, to comply with the CARB standards, automakers would have to adjust the “mix” of vehicles offered for sale in each state adopting those standards. In each such state, an automaker would have to “deliver for sale” enough vehicles with CO2-equivalent per mile (fuel economy) ratings above the CARB standard to offset vehicles delivered for sale with ratings below. The “mix-shuffling” required for compliance in State A would likely be different from that required for compliance in State B, C, and so on.
Note that the CARB program would create a vehicle-rationing patchwork even if there were no competing federal fuel economy standards. As the NADA report puts it, “If CARB’s regulation were to take effect in all 50 states, the resulting 50-state patchwork would require automakers to manage 50 unique state fleets and to individually meet CARB’s standard 50 different ways.”
Since the current mix in each state is determined by consumer preference, the adjusted mix would clash with consumer preference. The most likely compliance strategy would involve “rationing larger vehicles, discounting smaller models for quick sale, or other pricing strategies that distort the market,” the NADA report warns. Is that any way to rescue the auto industry?
Adding insult to injury, it’s not even clear that the CARB standards would achieve any significant reduction in emissions. CARB claims that adoption of its standards by 13 states would eliminate 59% more CO2 emissions in 2020 than would compliance with federal fuel economy rules. But companies forced to “deliver for sale” smaller, lighter, more fuel-economical vehicles in the CARB states would be allowed, under the federal fuel economy program, to sell more large, heavy, gas-guzzling vehicles in non-CARB states.
Moreover, if CARB rules restrict the supply and increase the cost of gas-guzzlers “delivered for sale” in California, for example, Californians would still be free to buy lower-priced gas guzzlers in Nevada and bring them back home. Emissions in California might go down somewhat, but auto sales, jobs, and tax revenues might go down even faster.
California politicians and environmental lobbyists talk about the CARB emissions program as if it were the greatest thing since sliced bread. Lisa Jackson would be well advised to read “Patchwork Proven” before deciding on CARB’s waiver request.
From http://www.globalwarming.org/
Senin, 09 Februari 2009
EU President Takes on Gore
by William Yeatman
February 02, 2009 @ 11:41 am
From http://www.globalwarming.org/
Czech President Vaclav Klaus took aim at climate change campaigner Al Gore on Saturday in Davos in a frontal attack on the science of global warming.
February 02, 2009 @ 11:41 am
From http://www.globalwarming.org/
Czech President Vaclav Klaus took aim at climate change campaigner Al Gore on Saturday in Davos in a frontal attack on the science of global warming.
EU Pitches Climate Plan
by William Yeatman, Cooler Heads Digest
February 02, 2009 @ 11:15 am
From http://www.globalwarming.org/
The European Union Commission this week outlined a diplomatic framework for negotiations to craft an international climate change treaty. The document cites an independent calculation that it could cost 175 billion Euros a year by 2020 to fight climate change. Yet the Commission dodges the key question of who will pay for this “green” revolution in energy production, stating only that, “international financial support for actions exceeding a country’s domestic capabilities should come from sources including public funds and international carbon crediting mechanisms.”
So the question remains: Who’s going to pay what? The United States Senate remains unlikely to ratify any international agreement to ration energy that doesn’t also include rapidly developing countries responsible for an ever-greater share of global emissions. Developing countries, however, refuse to put global warming over poverty reduction and their “right to develop.” The EU procrastinates. Global emissions continue to rise (while temperatures stay the same).
February 02, 2009 @ 11:15 am
From http://www.globalwarming.org/
The European Union Commission this week outlined a diplomatic framework for negotiations to craft an international climate change treaty. The document cites an independent calculation that it could cost 175 billion Euros a year by 2020 to fight climate change. Yet the Commission dodges the key question of who will pay for this “green” revolution in energy production, stating only that, “international financial support for actions exceeding a country’s domestic capabilities should come from sources including public funds and international carbon crediting mechanisms.”
So the question remains: Who’s going to pay what? The United States Senate remains unlikely to ratify any international agreement to ration energy that doesn’t also include rapidly developing countries responsible for an ever-greater share of global emissions. Developing countries, however, refuse to put global warming over poverty reduction and their “right to develop.” The EU procrastinates. Global emissions continue to rise (while temperatures stay the same).
California Blocks People of Santa Barbara on Drilling
by William Yeatman, Cooler Heads Digest
February 02, 2009 @ 11:16 am
From http://www.globalwarming.org/
The Los Angeles Times today reports that the California State Lands Commission overturned a proposal by county officials and environmentalists for expanded oil production off the Santa Barbara coast. Environmentalists helped craft the measure, which allowed a Texas energy company to drill new wells in exchange for the eventual retirement of four platforms. Despite broad, bi-partisan support for the agreement in Santa Barbara, the State Lands Commission objected to the deal because its approval would have sent “a message heard very, very clearly by those who call for ‘drill, baby, drill,’” said Lt. Governor John Garamendi (D), who sits on the Commission, and who intends to run for Governor.
February 02, 2009 @ 11:16 am
From http://www.globalwarming.org/
The Los Angeles Times today reports that the California State Lands Commission overturned a proposal by county officials and environmentalists for expanded oil production off the Santa Barbara coast. Environmentalists helped craft the measure, which allowed a Texas energy company to drill new wells in exchange for the eventual retirement of four platforms. Despite broad, bi-partisan support for the agreement in Santa Barbara, the State Lands Commission objected to the deal because its approval would have sent “a message heard very, very clearly by those who call for ‘drill, baby, drill,’” said Lt. Governor John Garamendi (D), who sits on the Commission, and who intends to run for Governor.
Climate Policy Lessons from Europe
by William Yeatman
February 02, 2009 @ 11:19 am
From http://www.globalwarming.org/
The recent European Union climate agreement provides a useful warning to incoming President Obama and his team when they consider what to do about global warming. The rhetoric from the EU may sound nice, but when it comes to translating words into action, Europe has shown that the job is harder than it looks. EU member states have found it very difficult to reduce emissions, meet renewable energy targets or create lasting green jobs.
February 02, 2009 @ 11:19 am
From http://www.globalwarming.org/
The recent European Union climate agreement provides a useful warning to incoming President Obama and his team when they consider what to do about global warming. The rhetoric from the EU may sound nice, but when it comes to translating words into action, Europe has shown that the job is harder than it looks. EU member states have found it very difficult to reduce emissions, meet renewable energy targets or create lasting green jobs.
California’s Green Jobs Experiment Isn’t Going Well
by William Yeatman
February 02, 2009 @ 11:22 am
From http://www.globalwarming.org/
Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into law the toughest anti-global-warming regulations of any state. Mr. Schwarzenegger and his green supporters boasted that the regulations would steer California into a prosperous era of green jobs, renewable energy, and technological leadership. Instead, since 2007 — in anticipation of the new mandates — California has led the nation in job losses.
February 02, 2009 @ 11:22 am
From http://www.globalwarming.org/
Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into law the toughest anti-global-warming regulations of any state. Mr. Schwarzenegger and his green supporters boasted that the regulations would steer California into a prosperous era of green jobs, renewable energy, and technological leadership. Instead, since 2007 — in anticipation of the new mandates — California has led the nation in job losses.
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