January 2012

Gas pain needed to meet emission targets, Harvard study says

by Marlo Lewis on March 19, 2010 · 21 comments

in Global Warming

A new Harvard University study (Analysis of Policies to Reduce Oil Consumption and Greenhouse-Gas Emissions from the U.S. Transportation Sector) offers a sobering assessment of what it will take to meet the emission reduction targets proposed by President Obama and the Waxman-Markey cap-and-trade bill.

Saruman’s rebuke to Gandalf — “You have elected the way of pain!” – nicely captures the key policy implication of this study (although the researchers, of course, do not put it that way).

Congressional proponents of cap-and-trade policies typically favor cost-control measures (price collars, safety values, offsets) designed to keep emission permit prices from exceeding $30/ton of CO2 in 2010 and $60/t of CO2 in 2030. Although an economy-wide permit price of $30-$60/t CO2 would significantly reduce GHG emissions from the electric power sector, it would have only a “marginal impact” on transport-sector emissions, which account for about one-third of all U.S. GHG emissions.

As a consequence, by 2020, total annual GHG emissions under Waxman-Markey would be only 7% below 2005 levels — far short of both the Waxman-Markey target (15.4% below 2005 levels) and President Obama’s somewhat less aggressive target (14% below 2005 levels).

To reduce transportation GHG emissions 14% below 2005 levels by 2025 would require gasoline prices “in the range of $7-9/gal,” the researchers estimate. They acknowledge that such prices are ”considerably higher than the American public has been historically willing to tolerate.” Yep, $7-9 a gallon would set a new record for pain at the pump!

By itself, the $30-$60/t CO2 carbon price would increase motor fuel prices by “only” $0.24-0.46/gallon. Not enough pain! To make driving hurt enough to save the planet (okay, hurt enough to produce undetectable effects on global temperatures), policymakers would also have to adopt a $0.50/gal motor fuel tax in 2010 that increases 10% a year until it reaches $3.36/gal in 2030. Even then, it won’t hurt enough unless crude oil prices increase to $124/barrel (in real dollars) by 2030. Crude oil prices as high as $198/barrel would work even better, the researchers opine.

Exactly how would “the way of pain”  produce these transport-sector emission reductions? Some of the reductions would come from consumers buying higher mpg vehicles, and some from technological innovation spurred by market demand for such vehicles. Most of it however, comes from people driving less — i.e., pain avoidance behavior!

A by-the-numbers explanation: In the base case (no carbon price, no new transportation taxes), vehicle-miles traveled (VMT) is projected to grow 39% by 2030. The economy-wide carbon price would reduce VMT by only 1% compared to the base case, and maybe not even that much due to the “rebound effect” of fuel-economy regulation (when the average vehicle gets more miles to the gallon, the average motorist travels more miles). But, add a generous serving of pain at the pump, and Voila – instead of growing 39%, VMT grows 25%. We’re saved!   

A few other tidbits from the Harvard study: 

  • Economy-wide CO2 prices must be more than twice as high (250%) as oil price increases to result in the same increase in the price of gasoline. For example, a $50/barrel increase in the price of oil is comparable to a CO2 price of $130/t.
  • Tax credits for advanced vehicles (diesels, hybrids), ranging from $3000 to $8000 per vehicle, require excessive government expenditures ($22-38 billion per year, on a par with the 2008 U.S. auto bailout).
  • Such subsidies are also counter-productive, because they blunt automakers’ incentive to increase the fuel economy of conventional vehicles, which occupy a larger share of the market.
  • If Congress is unwilling to elect the way of pain (impose transportation taxes and steeper CO2 prices), covered entities will increasingly purchase offsets rather than reduce emissions to comply with the Waxman-Markey cap. Specifically, they will purchase an estimated 730-860 tons of CO2-equivalent offsets in 2020 and more than 2 billion tons in 2027 — breaching the proposed statutory limit.
  • A $30-$60/t CO2 carbon price combined with $7-$9/gallon gasoline would reduce GDP only 1% in 2030. However, this conclusion depends on the assumption that Congress adopts a textbook perfect revenue-neutral carbon tax, in which all emission permits are auctioned, and all revenues are retured to taxpayers. 
  • The actual GDP losses would be higher: ”Given the politics surrounding the debate in Washington, D.C., revenue neutrality is likely to be an elusive goal and thus our analysis may understate the economic impacts, since only a small number of the permits are likely to be auctioned.”

The Harvard study makes even more obvious what should no longer be controversial. Congress has not yet adopted tough controls on GHG emissions not because a “well-funded denial machine” is “confusing the public,” but because Members of Congress seek above all else to get re-elected, and inflicting pain on voters is not a smart way to win their support!

Human Achievement of the Day: e-Cigarettes

by Michelle Minton on March 19, 2010 · 1 comment

in Odds & Ends

Oh yeah, I’m going there. Cigarettes are a human achievement. Just like food items (i.e. chocolate) or beverages (i.e. wine) cigarettes are a consumable product that can enhance the enjoyment of the smoker’s life. Sure, it can cause a lot of problems for the smoker and irritate folks around him or her, but those are trade-offs that, as with many other things, one must account for when deciding whether or not to take a certain action. ecigs

All that said, quitting is a really good idea. The achievement this post seeks to praise is the device that shows great promise in helping smokers improve the quality of their lives while allowing them to continue behaviors that they find enjoyable.

Smoking in the modern age is not like it used to be. Gone are the days when you could light up anywhere, buy a pack for pennies, and expect the nonsmokers to “suck it up” so to speak. Almost anyone who has or continues to smoke understands that maintaining the habit is costly, time consuming, and hazardous to one’s health and psychology.

But quitting can sometimes be more difficult than living with the immediate frustrations of smoking. One major barrier to helping smokers quit is that most of them genuinely enjoy the act of smoking. Whether it’s the rush of nicotine or the habitual behaviors surrounding the process of lighting up, even those smokers who intellectually understand the dangers of smoking don’t want to stop.

The electronic cigarette, or e-cigarette might change all of that.

First developed in 2003 by a Beijing company now known as The Golden Dragon Group Ltd. the electronic cigarette is was approved by the FDA for sale in the US in 2008. These battery powered devices, which can look like cigarettes, cigars, or even pens, provide a dose of nicotine through the process of vaporizing a gel solution.

In addition to purported nicotine delivery, this vapor also provides a flavor and physical sensation similar to that of inhaled tobacco smoke, while no tobacco, smoke, or combustion is actually involved in its operation…They are battery powered, and create their effect by vaporizing nicotine which is dissolved in a solution of water and propylene glycol.

The question for some however, is whether or not these new electronic cigarettes really are safe. As one producer website noted, while the safety of the e-cigarette may not be exactly known, it is assuredly safer than smoking conventional cigarettes. For one, there is a definitive reduction in the risk of accidental fires as the e-cigs are battery powered and have no burning element.

E-smoking is almost identical to cigarette smoking. The major difference is that the e-cigarette is always “lit”. Most of them even have an LED on the end that lights up like a cigarette ember when you draw on it. You can put it down or pick it up at any time without worrying about burning anything. It is only on when you actually draw on it. How much you smoke is related more to how many puffs you desire rather than on the length of the cigarette.

But what about the health consequences of long-term e-smoking? Again, it isn’t exactly known how much safer e-cigarettes are than conventional smoking, but again, it is almost assuredly safer to smoke the vaporized nicotine solution than the tar-laced smoke of tobacco products.

Even if e-cigs are about ten times as harmful as smokeless tobacco, that still makes them about 1/10th as harmful as smoking. Smoking is just that bad.

First of all, there is no burning of any plant matter so all those combustion related carcinogens are no longer present. Of course, in most cases, nicotine is still present but, as we’ve written elsewhere, nicotine is one of the more benign elements in tobacco…All that remains is some uncertainty about the effects of propylene glycol with long term regular use.

Almost anything else that is not acutely toxic (and we know the e-cigs are not) will be safer. Even if e-cigs are about ten times as harmful as smokeless tobacco, that still makes them about 1/10th as harmful as smoking. Smoking is just that bad.

Predictably, the FDA sought to prevent the sale of e-cigarettes in the states, claiming that the effects had not been thoroughly studied. However, in January of this year Federal Judge Richard Leon ruled in favor of plaintiffs Smoking Everywhere and Njoy who filed a jurisdictional lawsuit against the FDA. In his concluding remarks Judge Leon commented:

This case appears to be yet another example of FDA’s aggressive efforts to regulate recreational tobacco products as drugs or devices under the FDCA. Ironically, notwithstanding that Congress has now taken the unprecedented step of granting FDA jurisdiction over those products, FDA remains undeterred. Unfortunately, its tenacious drive to maximize its regulatory power has resulted in its advocacy of an interpretation of the relevant law that I find, at first blush, to be unreasonable and unacceptable

According to Matt Salmon, president of the Electronic Cigarette Association (ECA) and former congressman, in the two short years since the product was introduced in the US there’s an estimated 300,000 e-smokers now.

Health Care Bill Would Vastly Expand IRS Power; CBO Ordered to Base Cost Estimate on False Assumptions

by Hans Bader on March 19, 2010

in Deregulate to Stimulate, Economy, Employment, Health and Illness, Healthcare, Insurance, Legal, Politics as Usual, Regulation, Sanctimony

“House health care bill dangerously expands IRS power,” say a tax law professor and GOP leaders.   The Washington Examiner says that “16,500 more IRS agents” will be “needed to enforce Obamacare.”  That’s “the biggest expansion of the IRS since World War II,” needed to “to collect, examine and audit new tax information mandated on families and small businesses.”

Governors of both political parties assail the health care bill as a job-killer that will drive up state deficits, increase taxes, and harm the economy.  The governors of New York and California warned that “their states will be crushed by billions in new costs.”

The most recent version of the health care bill contains additional tax increases and Medicare cuts.  It dramatically increases taxes on investors by adding a new 3.8 percent tax on investment income (much higher than the 2.9 percent previously proposed by Obama), but few newspapers have reported that.

The Washington Post falsely claims that the CBO says the health care bill will save $1.2 trillion over its second decade, but the CBO says the figure is not from it (it’s from congressional Democrats).  Amazingly, the CBO, under orders from Democratic leaders, has understated the bill’s cost for the first decade by including the present fiscal year — in which ObamaCare is not yet law and thus has no costs — while excluding its last year from cost calculations.  The result was to reduce the projected price tag for the bill from $1.2 trillion to $940 billion.

While the CBO has scored the health care bill as not increasing the federal deficit, thanks to the many tax increases in the bill, it has done so only by accepting many accounting gimmicks that even pro-Obama journalists have admitted are deceptive and conceal the bill’s enormous cost and the fact that it will massively increase the deficit.  The New York Times‘ David Brooks, once a staunch Obama supporter, now says the bill’s drafters were “corrupted by power” and calls arguments for the bill “unbelievable” and “insane.”

Earlier, health care cost expert James C. Capretta explained how “Obamacare Is A Budgetary Disaster” that will cost at least $1.4 trillion more than promised.

The Congressional Budget Office, which refused to question Obama’s gimmicks to lowball the cost of his health care plan, nevertheless admits that “President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade.”

There are $3,000,000,000,000 in tax increases in Obama’s budget.  But he’s spending money at such a furious pace that the deficit will skyrocket anyway: “The president’s budget would borrow 42 cents for each dollar spent in 2010,” and “double the national debt over the next decade.”  Obama recently ran up the largest budget deficit in history, by a huge margin.

The revised health-care bill would add a new 3.8 percent tax on investment income for individuals who make $200,000 or more, and households making $250,000 or more.  More importantly, it would also impose many middle-class tax increases, such as taxes on uninsured individuals, on cosmetic surgery, on medical devices, and on certain health care plans.

ObamaCare would reduce medical innovation, raise taxes, drive up insurance premiums, and break campaign promises.  It  would cut the quality of  care, while imposing restrictions that failed when tried at the state level.  It ignores advice from experts about how to cut costs.

A retired federal judge says that the tactic congressional leaders are using to rush Obamacare into law violates Supreme Court rulings and the Constitution.

“Preventative Care Myth,” my piece in NRO

by Michael Fumento on March 19, 2010

in Healthcare

Declaring “I love numbers,” House Speaker Nancy Pelosi declared after getting a thumbs up from the Congressional Budget Office on Thursday just before a scheduled vote on health care legislation. The budget office found that the House changes to the Senate legislation will cut $138 billion from the federal deficit. Opponents have showed the figures are essentially mythical. Certainly numbers have worked against Pelosi in a very critical area, namely the idea that preventative care and wellness programs can save us money. That too, is a myth, as I make abundantly clear in “The Preventative Care Myth,” my article in today’s NRO.

Fumento podcast with Faust Wertz, health care legislation, Toyota, and more

by Michael Fumento on March 19, 2010

in Odds & Ends

Faust Wertz is a great interviewer and it’s always a pleasure to be on her show. Today we discussed Toyota, health care legislation (including an NRO piece I have upcoming today), and Mike’s need for financial support to keep doing what he’s doing.

CEI Weekly: CEI Opposes National ID on Fox News

by Charles Huang on March 19, 2010

in Economy, Energy, Environment, Features, Legal, Personal Liberty, Regulation, Zeitgeist

CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the Weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.


CEI Weekly
March 19, 2010


>>CEI Argues Against National Biometric ID Cards on Fox News
CEI’s Alex Nowrasteh appeared on Fox News to argue against a new proposal for a new form of biometric identification that violates individual privacy.

>>CEI Testifies Before Congress on the Role of Government in Innovation
CEI’s Wayne Crews testified this week in front of the House Committee on Science and Technology on the “America COMPETES Act.” He testified that the intervention of government in innovation will limit the growth of innovation.


>>Shaping the Debate
Will the Jobs Bill Create Any Jobs?
Ryan Young’s article in the American Spectator

Dodd’s Main Street Punishment Bill
John Berlau’s article in BigGovernment.com

Don’t Buy Hype on Plastic Baby Bottles
Angela Logomasini’s article in Sun Sentinel

Reaction to FCC’s Broadband Plan
Ryan Radia’s quote in PC World


>>Best of the Blogs
Senate Passes $18,000,000,000 Spending Bill: Will it Create Jobs?
by Ryan Young
The Senate just passed an $18 billion spending bill. Since the House already passed it, the legislation is now headed to President Obama’s desk to await his signature and become law. The hope is that the spending will create jobs. If you’re reading this blog, then you probably know enough about economics to know that isn’t what will actually happen.

Some U.K. government ads on global warming too scary
by Fran Smith
“Is global warming the new apocalypse?” asks The Times of London in an article focusing on children’s fears about global warming in the context of a scare-mongering U.K. government advertising  campaign to promote climate-change awareness.
Recently the Advertising Standards Authority ruled that some of the campaign’s print ads using nursery rhymes overstated the risks of global warming and were to be banned.

Human Achievement of the Day: Human Nature
by Michelle Minton
Leave it to man to improve upon mother nature. Sure, she’s got trees of every shape color and size, they rustle in the breeze, and produce life-giving oxygen, but can her trees produce jet fuel? Now, ours can:
Over at Columbia University, professor Klaus S. Lackner has one-upped the natural world by coming up with a synthetic tree that can absorb carbon dioxide 1000 times faster than “old-style” trees and hundreds of times faster than windmill generators.


>>LibertyWeek Podcast
Episode 84: Detroit Seizing Destiny, Property
Richard Morrison, Jeremy Lott and Dave Weigel come together bring you episode 84. We cover Washington state’s death wish, new polling on the politics of healthcare, private investment in space exploration, eminent domain abuse in Detroit and the effects of cocaine use on global warming.


>>Support CEI

Like what you read?

The Competitive Enterprise Institute’s 25-year record of success is made possible by our over 3,000 supporters. Make sure to stop by www.cei.org/support and make a donation to continue your support or become a supporter. Curious about all the possible ways to donate to CEI? Contact Al Canata at acanata@cei.org or 202-331-2280 to find out more.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

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Chris Horner on Rising Energy Prices

by Richard Morrison on March 19, 2010

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=RwrJrve294U 285 234]

National ID Plan Insults Americans

by Alex Nowrasteh on March 19, 2010

in Legal, Privacy, Regulation

President Obama recently gave his thumbs-up to an immigration compromise plan formulated by Chucky “Why Am I So Annoying” Schumer (D-NY) and Lindsey Graham (R-SC) that includes a national biometric ID card for all Americans.  I already outlined here some of the major objections to any national biometric ID but the government is moving forward with the plan anyway.

I expected this proposal to be terrifying, but I wasn’t prepared to be personally insulted.  As was reported here:

“The cards would include biometric information designed to prevent counterfeiting — but the senators said the information would not be stored in a government database.”

I don’t believe in conspiracies, but when the government says they are going to set up a national biometric ID card BUT not store all of our information in a database, it smells fishy.  Sure . . . (wink-wink) the national biometric ID won’t store our personal biological information in a government database . . . and our Social Security numbers will only be used to track our Social Security benefits, right?    Nothing good has ever come about from the issuance of a national ID, let alone one that includes biometric information.

But the Senator’s statements, if true, negate the entire purpose of have a national biometric ID!  If the information is not stored in a database, there is nothing to check your national biometric ID card against.  That would make it incredibly easy to counterfeit.  How is the government, or a private employer, supposed to know it’s a forgery?  All national biometric ID cards, or ID cards of any type, require a central database of personal information to have a chance at being successful.  What are Graham and Schumer thinking?

The good parts of the Senator’s plan, of which there are several, are totally overshadowed by this and the extension of an Electronic Employment Verification System (EEVS).  These provisions have turned what could be an important bill into a terrifying extension of government power that won’t even cut down on illegal immigration.  A bill like this that focuses on enforcement and amnesty only will not be successful.

Undocumented immigration is a problem but the solution is not scanning American’s biological information into a biometric national ID card that must be presented to employers and checked against a mandatory EEVS.  The solution is to allow mass legal immigration to the United States to move immigration out of an unregulated black market and into the legal market.  Americans are already punished by the government’s insistence that legal immigration be kept at artificially low levels; let’s not punish them more by submitting their most intimate information to a government database.

Breaking the 3-Tier Bureaucracy

by Angela Logomasini on March 18, 2010

in Nanny State, Personal Liberty

This week, Fermentation blogger Tom Wark rightly laments the three tier system that states use to regulate alcohol commerce. He notes: “the three-tier system is a remarkably inferior method of meeting the needs of today’s consumers that are seeking unique alcohol products.” Indeed. Most states outlaw wineries, breweries, and importers from selling directly to restaurants or retail outlets. They must sell to a wholesaler and who sells to retailers. The result: higher prices and less choice for consumers. Wark explains:

If a winery in Oregon, for instance, has communicated with a restaurant and retailer in New York, each of which would like to buy ten cases of wine, the winery must first, by law, find a wholesaler willing to represent their brand in New York, buy those twenty cases of wine, then get them to the retailer and restaurant. But as many wineries have learned, getting any one of the increasingly small number of wholesalers in a given state to agree to represent them is extremely difficult. And there is no law that says wholesalers must take on brands that want to sell wine in a state.

Small-production wineries and importers are at a huge disadvantage in this situation. Large distributors often prefer to deal with the larger-scale wineries that have bigger inventories. It is easier and more profitable for them to push greater volume wines than to market a host of small portfolios. There are some small-scale distributors who specialize in boutique wines, but they too are at a disadvantage as restaurants often focus on distributors with extensive selections. Some of these disadvantages might still exist in a freer marketplace. However, opening the market to allow winery/importer direct sales to retailers would likely open some doors, enabling small-scale businesses to develop their niches. It would also be liberating for consumers, who if they could buy direct, would likely benefit from lower prices.

Fortunately, there has been some progress allowing consumers to buy direct via the mail, but we still have a long way to go. And it is not enough. As long as regulation ties the hands of retailers and suppliers, consumer options will remain limited and innovation and creativity in the marketplace stymied. This topic will be key a focus on my new blog, Winepolicy.com in the future. Wark’s post offer a good place for readers to get up to speed on the many angles of this issue.

Regulation of the Day 128: Bounty Hunters

by Ryan Young on March 18, 2010 · 1 comment

in Deregulate to Stimulate, Regulation, Regulation of the Day

You need a license to be a bounty hunter in New Jersey. You can apply by clicking here.

The license comes with a cool bounty hunter identification card that you must keep on your person whenever you’re on the job.

But let’s not get ahead of ourselves. There are lots of hoops to jump through first. For one, you need valid photo ID. And you need to pass a criminal background check, and give five character references.

You must also have at least five years of experience in either bounty hunting, law enforcement, or a related field. No one under the age of 25 may be a bounty hunter.

The license fee costs $300; biennial renewal costs $200.

You also need to take a 2-day, 16-hour bounty hunter training course at the Middlesex County Fire Academy in Sayreville. Topics covered range from Constitutional law to proper boundaries on the use of force.

If you want to hire a secretary or other administrative worker, that employee has to register with the New Jersey State Police and go through a background check at his or her own expense. If the employee quits or is fired, you have to let the state know within ten days.

If you can get through all that, happy hunting!

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