January 2012

SOTU Watch: Energy Prices & Hidden Taxes

by Myron Ebell on February 24, 2009

in Economy, Energy, Environment, Global Warming

While President Obama focuses on short-term economic recovery, he proposes long-term energy and global warming policies that will lead to economic decline. Federal subsidies for “green” jobs and mandates for renewable energy will raise energy prices and thereby suck money out of people’s pockets and jobs out of manufacturing.

But President Obama’s green jobs fantasy is only the beginning of the bad news he has in store for American consumers, workers, and taxpayers. He is also urging Congress to enact a cap-and-trade scheme to reduce greenhouse gas emissions. Cap-and-trade is another name for energy rationing. It is a sneaky tax that will benefit some big business special interests by raising people’s electricity, gasoline, and heating bills through the roof. It should not be a surprise that many big corporate CEOs support President Obama’s energy rationing policies. They stand to make huge profits, so why should they care what sharply higher energy prices will do to working American families struggling to pay their bills?

When it Comes to Climate Change, Errors Abound

by William Yeatman on February 24, 2009 · 5 comments

in Environment, Global Warming

“A Matter of Fact,” a new report from the Center for American Progress Action Fund, challenges the Washington Post to correct George F. Will’s “Dark Green Doomsayers” column, published February 15th. The report, by CAP’s Brad Johnson, asserts that George Will made three factual errors:

  • Current “global sea ice levels” equals those of 1979
  • There hasn’t been warming in “more than a decade”
  • “Global cooling” joins a list of well publicized “planetary calamities that did not happen.”

Will’s column is not perfect, and Johnson raises some valid questions. For the sake of intellectual honesty, however, Johnson should broaden his fact-checking scope to incorporate misstatements on both sides of the global warming debate—including his own fudging of the truth.

But first, let’s address CAP’s critique of Will’s column.

Error 1. It seems that Will is guilty of delay. On the one hand, the University of Illinois Arctic Climate Research Center, the source of his assertion that global sea ice levels haven’t changed in 30 years, publically disavowed Will’s claims. On the other, ACRC reported on January 1, 2009 that global sea ice levels were “near or slightly lower than those observed in late 1979.” Will’s column appeared 45 days later, during which the discrepancy between current levels and 1979 levels grew by 8%.  If anything, this demonstrates the perils of reporting on an ever-changing global climate.

Error 2. CAP and George Will have it wrong. Will wrote that it hasn’t warmed in “more than a decade,” while Brad Johnson claims that “global warming is continuing.” According to data from the University of Alabama in Huntsville, compiled by NASA’s Dr. Roy Spenser, there has been no statistical warming of lower atmosphere temperatures over the past seven years, despite the fact that global greenhouse gas emissions have increased.

Error 3. Will is right and CAP is wrong. Johnson notes that there was never a “scientific consensus” on global cooling, but that’s not what Will claimed. He only wrote that some scientists and media outlets warned of global cooling, which is true.

I am an unabashed global warming “denier,” but I nonetheless applaud Brad Johnson’s efforts. On the topic of global warming, misrepresentations of the science abound, and we in the energy/global warming policy community should root them out and expose them with vigilance.

With that in mind, I have a “Matter of Fact” list of my own:

Fiction: Al Gore claims in his documentary, An Inconvenient Truth, that “there is one relationship that is more powerful than all the others and it is this. When there is more carbon dioxide, the temperature gets warmer ….”

Fact: It hasn’t warmed in 7 years, despite a steady increase in global greenhouse gas emissions. Where’s the Warming, Al?

Fiction: Dr. James Hansen, ultra-alarmist, has suggested that a 2-3 degree warming would cause sea levels to rise by 80 feet. Hansen then lowered his estimation to 20 feet. His most recent estimate is “at least” 3.2 to 6.4 feet.

Fact: The preeminent body of climate scientists, the Intergovernmental Panel on Climate Change, suggests that a 2-3 degree warming would cause sea levels to rise 7 to 23 inches.

Fiction: In 1986, Dr. John P Holdren, President Barack Obama’s choice to become White House Science Adviser, is quoted as having said that global warming could cause the deaths of 1 billion human beings by 2020. During his confirmation hearing two weeks ago, Holdren was questioned about this claim, and said that “it is still possible.”

Fact: To fulfill Holdren’s alarmist warning, climate change would have to kill twice as many people as died in World War Two, each year, for the next ten years.

Fiction: The Center for American Progress’s Brad Johnson last summer reported that the death of two Boy Scouts in Iowa was “evidence” of “the consequences” of global warming.

Fact: As recently noted on Roger Pielke Jr’s Prometheus, the Center for Research on the Epidemiology of Disasters cautions that “justifying the upward trend in hydro-meteorological disaster occurrence and impacts essentially through climate change would be misleading.”

SOTU Watch: Energy Claims

by Iain Murray on February 24, 2009 · 2 comments

in Economy, Employment, Energy, Environment, Global Warming, Stimulus to Nowhere

The President might make various remarks relating to energy tonight. These are likely to center around grandiloquent claims as to the effectiveness of “green jobs” and alternative energy in saving the economy, not to mention the planet. Here are a few notes on the reality of these claims.

Green Jobs: The President will probably claim to be creating millions of “green jobs” to save the economy, fight global warming and end dependence on foreign oil together. In fact, “green jobs” have a number of problems, outlined in my Examiner piece from yesterday. To summarize:
• “Green jobs” come at the expense of traditional energy jobs. At the moment, the wind industry employs 85,000 people in all its facets (including support staff and suppliers). The coal industry employs 81,000 miners alone, and probably over 1.4 million in all, including support staff and suppliers.
• “Green jobs” are more expensive to society in general. Those 85,000 people in the wind industry contribute to the generation of just 1.3 million MegaWatt-hours of electricity, while the coal industry generates 155 million MWh, making each coal industry job seven times more productive than a wind industry job. The difference in cost is born by the rest of us.
• “Green jobs” are mostly low-paid and transitory, according to a recent report by, among others, The Sierra Club and the Teamsters union.
• A German government report found that “green jobs” are only beneficial to the economy as long as Germany remains a net exporter of green technology and power. As soon as other countries utilize their comparative advantages in manufacture and power generation, “green jobs” become a drain on an advanced economy.
• Most “green jobs” are related to the generation of electricity, which is not used to power cars yet, and so do nothing to lower our “dependence” on foreign oil (and most oil we use comes from the US and Canada in any event).

Alternative Energy: The President may repeat his promise to double the use of alternative energy, again claiming effects in terms of climate and energy independence. This claim is, in all probability, disingenuous.
• A doubling of alternative energy electricity production by 2011 would require the main alternatives – solar, wind, geothermal and biomass – together to generate 144 billion KiloWatt-hours of electricity by then. However, under the Energy Information Administration’s “business-as-usual” projections, these industries are expected to supply 150 billion KWh by then, with no additional policies needed. (Note the EIA includes hydropower and wood in its renewables calculations, for the solar/wind/geothermal/biomass figure, see here.)
• Reduction in greenhouse gases as a result of this policy is not likely to occur, as the EIA predicts a similar increase in the use of coal to generate electricity by 2011. In all probability, therefore, we will be emitting greater amounts of greenhouse gases by 2011, not less.
• A “smart grid” is probably a useful technology, but the President and the stimulus plan gold-plated it in order to boost their renewable energy rhetoric. William Tucker has a good summary of what is wrong with the President’s version of a “smart grid” here.
• If the President means that he will double the use of biofuels, this is likely to mean a significant increase in corn ethanol production, resulting in greater diversion of the corn supply into fuel production. This will likely increase already-inflated food costs (the recent price drop would have been significantly greater were it not for ethanol manufacture) and thereby increase food insecurity in a recession. Increased ethanol production is opposed by most major environmental groups as well as free-market groups. See Facts About Ethanol for more.

SOTU Watch: Card Check

by Ivan Osorio on February 24, 2009 · 1 comment

in Deregulate to Stimulate, Economy, Labor

In President Obama’s State of the Union speech tonight, one thing to watch for is mention of the so-called Employee Free Choice Act (EFCA) — or lack of the same.

As news reports have noted, the Obama administration has put EFCA, also known as the card check bill, on the back burner in the face of the current economic crisis.  At the same time, some Congressional Democrats from swing districts and states now find themselves stuck in a hard place between EFCA’s growing unpopularity and organized labor’s aggressive stance in favor of it. Considering how much Democratic candidates rely on union support in elections, to incur union bosses’ wrath by not supporting EFCA would be uncomfortable for them indeed.

So the question in labor policy now is: Which will prevail tonight and in the coming months, strident union demands or sober economic reality?

President Obama observed recently that, “If we are losing half a million jobs a month, then there are no jobs to unionize.” His observation is correct, though it is worth adding that foisting unionization on more companies at this time is no way to promote job creation. EFCA would do just that, by empowering union organizers to circumvent secret ballot elections. The President has said that he would sign this bill, if passed by Congress. Given the current state of the economy, the possibility of his not pursuing this would be welcome.

For more on card check, see here and here.

Despite lack of warming, alarmists predictably predict warming worse than predicted

by Marlo Lewis on February 24, 2009 · 2 comments

in Global Warming

As you may have heard, there has been no net warming of the planet since 2001, and no subsequent year was a warm as 1998 (admittedly a year with a major El Nino). A recent study by Keenlyside et al. (2008) concludes that “global surface temperature may not increase over the next decade” due to natural oscillations in the Atlantic and Pacific Oceans.

As Patrick Michaels of the Cato Institute explained at a recent congressional hearing, the suite of 21 climate models used in the IPCC’s mid-range emissions scenario (A1B) are on the verge of failing to reproduce actual climate data.

During the past 5 to 20 years, the observed trend in the average global temperature has been so low that it is starting to push the lower bounds of the climate models’ range of temperature predictions for that period. If 2009 is as cool as 2008 (with a La Nina brewing in the Pacific Ocean, that is not unlikely), then even the least sensitive of these models will be overestimating the actual amount of warming. And if Keenlyside is correct, and another decade elapses without significant warming, the models will have clearly failed.

The most important point for policymakers and citizens, as Michaels notes, is that if the models predict too much warming, then all model-based assessments of global warming impacts on agriculture, human health, extreme weather, etc. will be similarly overestimated.

So what do you do if you’re a climate alarmist and the world isn’t warming up as much as you said it would? Why, you redefine “climate sensitivity.” You claim that agriculture, health, weather, etc. are more “sensitive” to increases in global temperature than scientists once believed. You say that less warming than the IPCC warned us about will lead to worse impacts than the IPCC warned us about. That’s the gist of a recent IPCC-sponsored study, as summarized here by AP/MSNBC.com.

Well, I’m skeptical! First, the IPCC study claims that a 21st century temperature increase of only 1.8 degrees Fahrenheit and 3.6 degrees could significantly increase the severity of extreme weather. But Knutson et al. (2008), a leading modeling study of global warming and Atlantic tropical cyclones, projects that the same amount of warming will increase the average intensity of Atlantic hurricanes by only 1.7% but decrease hurricane frequency by 18%, producing a cumulative 25% decrease in Atlantic hurricane power. That’s a significant net climate benefit!

The IPCC study reportedly warns that even a wee bit of warming will produce deadly heat waves, suggesting (but not bluntly saying) that the 2003 killer heat wave in Europe was due to the atmospheric buildup of greenhouse gases. Yet, as Pat Michaels and Robert Balling document in their new book, Climate of Extremes, the European heat wave of 2003 was an atmospheric circulation anomaly–a bubble of hot air trapped in Europe during a summer that was slightly cooler than average worldwide.

The IPCC study, at least as summarized, also ignores research showing that as hot weather becomes more frequent, heat-related mortality declines. Cities with the hottest summer temperatures–Phoenix, AZ and Tampa, FL, for example, which have substantial elderly populations–have almost no heat-related mortality.

AP/MSNBC.Com quotes the researchers as saying: “For example, events such as Hurricane Katrina and the 2003 European heat wave have shown that the capacity to adapt to climate-related extreme events is lower than expected and, as a result, their consequences and associated vulnerabilities are higher than previously thought.”

This is complete rubbish. In 2006, Europe experienced a heat wave of comparable magnitude to the 2003 heat wave, yet you probably read nothing about it, because this time far fewer people died. What’s more, fewer people died than heat-related mortality models predicted (see here and here). Contrary to the IPCC bunch, the capacity to adapt to climate-related extreme events is higher than expected.

As for Katrina, this bespeaks a fundamental confusion on the part of the IPCC researchers. They confuse climate-related risk with climate change risk. Climate-related risk is chiefly determined by where you live and the existing social infrastructure, not by gradual changes in the atmosphere’s CO2 content.

New Orleans has always been in a hurricane corridor, and has always been below sea level. That’s the reason people in New Orleans are at risk, not because of global warming.

For example, a recent study by J.C. Mock finds no trend since 1800 in the frequency of major hurricanes striking Louisiana. The most active hurricane years in the record–1812, 1830, 1860–long predate the modern era of anthropogenic global warming.

Katrina was the worst natural disaster in U.S. history not because of any extra oomph it allegedly got from global warming (it was a category 1 storm by the time it hit New Orleans), but because government officials at all levels failed to provide adequate flood defenses for city that was well known to be vulnerable to hurricane-driven storm surges.

More Behavorial Advertising Adventures

by Nick Brown on February 24, 2009 · 1 comment

in Regulation, Tech & Telecom

Back in January I wrote about several advertising industry trade associations coming together to impose self-regulation in an attempt to deter federal regulation of behavioral advertising under the Obama administration. I pointed out that the Federal Trade Commission had advised the advertising industry back in December 2007 that it were pushing the envelope on what the FTC considered to be reasonable behavioral advertising. It seems as though the industry may have viewed this as an idle threat under the Bush administration, but got wind that the new administration would be looking at the issue with renewed vigor.

Last week, the FTC released its Staff Report on the issue entitled FTC STAFF REPORT: Self-Regulatory Principles For Online Behavorial Advertising.  The report succinctly defines the issues at hand and examines the stakes of all sides.  Importantly, the FTC has refined its Principles for Behavioral Advertising self-regulation within the document.

These Principles, a summary of the issues and concerns surrounding behavioral advertising, are divided up into four key points:

1) Transparency and Consumer Control

2) Reasonable Security, and Limited Data Retention, for Consumer Data

3) Affirmative Express Consent for Material Changes to Existing Privacy Promises

4) Affirmative Express Consent to (or Prohibition Against) Using Sensitive Data for Behavioral Advertising

In other words, these are the concerns that need to be addressed in self-regulation.  The FTC concludes its report by saying that the Commission staff will monitor efforts of the industry to self-regulate over the next year keeping an open dialogue with all parties involved.

Coming Soon: A Predatory, Anti-Business Federal Trade Commission?

by Wayne Crews on February 24, 2009

in Bailout Watch, Deregulate to Stimulate, Economy, Legal, Odds & Ends, Privacy, Regulation, Stimulus to Nowhere, Tech & Telecom

Even an economy in shambles shall not sway the elevation to Federal Trade Commission chairmanship of Jon Leibowitz, an interventionist-minded commissioner who, like all planners, knows better than others how markets should be structured.

In several important areas, his inclinations (judging from the cheers emanating from interest groups like PIRG and Center for Digital Democracy) lean toward substituting political “discipline” for what competitive markets offer.

He supports “opt-in” with respect to behavioral advertising, which we’ve often described as not-necessarily good for a lot of reasons. We’ll come back to this later.

He supports antitrust intervention with respect to firms like Intel (and watch out, Google), and favors destructive “conditions” on mergers. Nineteenth-century, smokestack-era antitrust, rather than withering, now seems dedicated to exploiting and hobbling large-scale transactions in ways that end up creating entities that would not emerge in free markets. Several mergers lately have resulted in such artificially constrained frankensteins, or suffered catastrophic delays. Thus “competition policy” (ha!) neuters the healthy competitive response to them that could have come about. (See my FCC comment on XM/Sirius in that regard.)

On “net neutrality,” we leap beyond whether markets are adequate to discipline errant behavior; here the starting point is the nominee’s doubt that even antitrust intervention is necessarily “adequate to the task”; thus the implication that new laws may be in order.

Let’s just take net neutrality for now. There are plenty reasons I think it’s an outrage to regulate price and access on networks and infrastructure; but just for the moment, the entire concept rests upon numerous (I often feel deliberate, in my less-charitable moods) misperceptions or misrepresentations about competitive markets and capitalism. These include but are not limited to the following: (Adapted from an FCC filing I made).

• Infrastructure companies and content companies are naturally and inherently at odds.
• Competition requires political force.
• Discrimination is bad with respect to network access, and such a thing as “non-discrimination” exists.
• Net neutrality is itself not a form of picking sides (or discrimination, as it were)
• Infrastructure companies should not control content; however, content companies, in conjunction with bureaucracies backed by legislation and regulation, should control infrastructure companies.
• Government enforced net neutrality spawns “openness”; market impulses do not.
• Communications flows (video, information, calls etc.) are maximized by neglecting, even blocking, the liberalization of and enforcement of property rights in grids.
• Networks themselves cannot be regarded as a competitive unit in any sense: only the movement of bits from point A to point B on a pre-existing network counts as competition. Networks best exist as passive husks, not dynamic forms of infrastructure wealth created, managed and duplicated in response to price signals and broader economic forces.
• “Market failures” matter, government failures do not exist (indeed, they are rarely acknowledged by the interventionist class).
• Infrastructure companies’ interest lies in not selling services, in not exploiting gains from trade with content companies whatever petty transitory jealousies may exist.
• Wall Street, rivals and consumers cannot react to discipline inefficient network management or generate new bandwidth infrastructure (I always call it “bandwealth,” but will remain passive.
• Agencies like FTC and FCC are better equipped than capital markets and a global economy to discipline ill-managed networks.
• Alternative, profit-driven modes of infrastructure organization matter less than regulating the mode that exists: User ownership of grids; liberalization of non-telecom network industries to enable wide-scale, cross-industry infrastructure consortia; “splintering” into and out of the public net by private carriers, all have little role to play and may safely be ignored.
• Moreover, regulatory interference will not undermine these alternative modes of discipline, or alter technological trajectories and the future trajectory or health of communications wealth in any harmful way.

So it’s remarkable, to me at least, that at a time when the economy needs “stimulus,” that we may now be required to divert attention to contend with a new artificial, entirely man-made and unnecessary hindrance to the expansion of the communications sector.

More on Environmental Policies and Protectionism

by Alex Harris on February 24, 2009

in Environment, Global Warming, Trade

Marlo made three interesting arguments yesterday contending that cap-and-trade would generate protectionist outcomes. I want to add another, pervasive, yet oft-neglected reason.

Environmental regulation spurs the businesses who feel cheated to lobby for other forms of protectionism for their industries. This is a very different mechanism from Marlo’s identification of particular measures with protectionist policies. It doesn’t matter what the content of the regulation is; as long as businesses perceive it as hurting them, they will lobby for and get protectionist measures to help them in other ways. Just think what the auto industry would do if Congress tried to increase CAFE significantly or require drivers or manufacturers to buy carbon credits; they’d probably log-roll and get tarriffs against foreign manufacturers as part of the package deal. Something for you, something for me, less for the consumer.

There is good empirical support for this proposition. Western Washington University economist Steven Globerman made the argument back in 1999, hidden within a broader book arguing that trade is actually good for the environment.

Globerman noted that “lobby groups will use environmental issues to extract protection against imports.” And they will generally win. “Governments in high enforcement countries can and will invoke trade remedy laws, particularly countervailing duties, against exporters in weak enforcement 

countries.” The log-rolling takes place internationally as well. If we give into the EU’s demand to join a climate regime, we may be able to get acquiesence in our new protectionist measures.

We don’t want “significantly higher risks of trade wars tied to escalating retaliation for specific environmental practices.” As economist and MP Michael Spicer put it in his 1996 book The Challenge from the East and the Rebirth of the West, “if the stability of the world is to be assured it must be through the spread of free trade.”

Carney Takes on Stimulus on Liddy, Osorio Takes on Card Check

by Ivan Osorio on February 23, 2009

in Economy, Labor, Stimulus to Nowhere

Today, I was on the G. Gordon Liddy Show, to discuss the current prospects of the misleadingly named Employee Free Choice Act (EFCA), which, as the Washington Examiner reported today, has put some centrist and swing-state Democrats in a difficult position. To date, the more that people learn about the details of EFCA, the less they like it, as a recent poll shows.

Also on the show today was former CEI Brookes Fellow Tim Carney, discussing earmarks in the gargantuan stimulus bill.

Audio here.

Tim is on at 4:16. I’m on at 30:47.

Next Internet Phenomena=lolprez

by Gary Howard on February 23, 2009 · 1 comment

in Odds & Ends

While viewing my colleague, Alex Harris’ posts featuring liberty lolcats, I thought this up (though I am not the first, mine is funnier).  I figure that the President and lolcats are pretty equal in popularity (edge probably goes to lolcats) so why not have some fun during an otherwise not-so-fun time.   Here goes!


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