Thomas L. Friedman’s op-ed in the NYT today could have been written by Paul Krugman.  And that’s not a compliment.

Friedman, like Krugman, waxes hysterical about those who are opposing  the cap-and-trade energy bill - those “deniers.” And, also like Krugman, he sets up those opponents as straw men that he can readily knock down.  In today’s article, Friedman worries about U.S. dependence on foreign oil supplied by  ”petro-dictators” and he fears ever-rising prices for increasingly scarce fossil fuels.

So either the opponents of a serious energy/climate bill with a price on carbon don’t care about our being addicted to oil and dependent on petro-dictators forever or they really believe that we will not be adding 2.5 billion more people who want to live like us, so the price of oil won’t go up very far and, therefore, we shouldn’t raise taxes to stimulate clean, renewable alternatives and energy efficiency.

Friedman’s terror about world population growth, especially growth in developing countries, is Malthusian.  (See Julian Simon on population and natural resources in “The Ultimate Resource II.”) . And Friedman  doesn’t seem to want those people to use energy to improve their standard of living.  Here’s what he says about that dream for a better life:

The world keeps getting flatter - more and more people can now see how we live, aspire to our lifestyle and even take our jobs so they can live how we live. So not only are we adding 2.5 billion people by 2050, but many more will live like “Americans” - with American-size homes, American-size cars, eating American-size Big Macs.

Such horror one can’t imagine for a person living at a subsistence level in India or China.

In his article, Friedman says that “clean energy” is the answer to the world’s energy problems.  He embraces  “E.T.” (no, not that visitor from another planet), but “energy technology”  that is carbon-less and efficient.

And we believe the best way to launch E.T. is to set a fixed, long-term price on carbon - combine it with the Obama team’s impressive stimulus for green-tech - and then let the free market and innovation do the rest.

His solution then is to tax conventional energy and subsidize alternative energy sources. Right.  That’s clearly an innovative solution that nobody has thought of.  And how would this affect the population bomb he fears?  Undoubtedly, raising the price of fossil fuels could indeed have an effect on developing countries’ populations.  While waiting for those alternative energy sources to develop, they’ll  continue to face poverty and resultant devastating diseases.  Not surprisingly, Friedman doesn’t address that problem.

That’s the good part.  The bad part is that both he and Wallach want to combine the two issues - global warming and trade - and deal with them together. That was a recommendation that the Peterson Institute for International Economics made in a study earlier this year. What that would mean still seems a bit vague.  According to the op-ed, this synthesis would involve –

. . . a new code of “best practices” on greenhouse gas emission controls, including establishment of “policy space” for countries to limit emissions without sacrificing the competitive position of their industries. The institute also recommended that countries adopt a time-limited “peace clause” in which pursuit of new trade barriers would be suspended while the negotiations proceeded, and that a global climate accord be linked to a new global trade accord.

The synthesis would seem to involve  countries agreeing to a “code” that would address restrictions on CO2 emissions  and be generally consistent with WTO rules even if some technical rules would be violated.  Countries signing up for the code would agree not to bring those technical issues to the WTO for dispute resolution (the “peace clause”).

Those “technical” issues, in practice, however, are likely to become substantive issues, as countries enact  a broad array of restrictive  measures to protect their own industries.  But, never fear, the Peterson Institute also recommends in its book that the UN Framework Convention on Climate Change or some international arbiter decide when a code member isn’t in compliance with its international commitments.  Then, if that’s the case, other code members could take trade reprisals against that non-complying member.

Does this sound like a simple plan that would run smoothly?  Not in my book.

The article concludes with a bit of hyperbole — that the “only way to solve our problems is to treat them together.”  Otherwise, we’ll have “paralysis.”

Given the fact that global warming policy prescriptions have been extremely controversial even before the Kyoto Protocol 12 years ago, and the fact that the WTO’s Doha Round for 8 years has been mired down in disagreements among rich and poor countries, does it seem likely that putting these two divisive issues together will produce harmony?

“We must push our trading partners to do their part to curb harmful emissions and we must devise a border measure, consistent with our international obligations, to prevent the carbon leakage that would occur if US manufacturing shifts to countries without effective climate change programs.”

Currently the Senate Environment and Public Works Committee, chaired by Senator Barbara Boxer, has rushed through its own bill without minority input to try to catch up with the House, which passed its cap-and-trade bill - H.R. 2454 — on June 26, 2009. The House bill contains a border tax adjustment measure, while the Senate bill does not.  At least, yet.  But Baucus’ comments are a strong signal that the Senate bill will also include tariffs or border “adjustments,” i.e., taxes.

This unfortunate idea is gaining greater traction among global warming advocates as a way to maintain U.S. competitiveness for industries, such as steel and cement, that would be facing higher costs if an energy suppression bill to address global warming is passed.  Proponents of “border measures” also see this as a way to curtail so-called leakage of carbon-intensive industries and related jobs to other countries without similar constraints. Of course, the common justification for those who want to hobble their competition is the refrain: “Level the playing field.”  In Washington politics, that usually means bringing your competitors down to your level.  Check out this article for some possible consequences.

These endorsements could portend a carbon tariff push in Copenhagen when world climate pukkas gather on December 7, 2009. Luckily for people in the U.S., it’s not likely that a newly minted global warming bill will be in their pockets.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

Buffet, according to the Wall Street Journal weekend edition is “betting on good old fashioned stuff - such as grain, coal for power plants and consumer goods imported from Asia - and the need to move it.”  Let’s hope he knows something we don’t - perhaps, Obama is about to do a “Clinton” reversal.  That would be good for America, for affordable energy and (ironically) also good for the Democratic party.  We can hope.

Chu argues roughly as follows. Global investment in wind turbines and solar panels could reach $3.6 trillion by 2030. China is investing heavily. If we don’t ramp up our investment in “clean tech” products, we’ll be left behind, become increasingly dependent on foreign producers, and China will eat our lunch. The key to growing the U.S. clean-tech sector is to “put a price on carbon” — establish a “cap on carbon emissions that ratchets down over time.”

This is poppycock, as I explain today on MasterResource.Org, the free-market energy blog. 

Yes, China is investing heavily in solar panel and wind turbine manufacture, but China does not cap carbon. Also, only a small fraction of China’s production of solar photovoltaic generators — 20 megawatts out of 820 megawatts produced in 2007 — is for China’s domestic market. So capping domestic carbon emissions is not a prerequisite to success in exporting clean-tech products, nor is having a large domestic market for such products. The experience of the very country Chu spotlights as model and threat rebuts rather than supports the case he wants to make.

A key point Chu completely ignores is that, apart from certain niche markets, “clean tech” products consume more wealth than they create. That’s why they cannot “compete” without benefit of market-rigging mandates, subsidies, and penalties levied against fossil energy.

A fresh example of this inconvenient fact comes to us today from the great state of Massachusetts, home of Sen. John Kerry, chief sponsor of S. 1733, and Rep. Ed Markey, co-sponsor of the House companion bill, H.R. 2454, a.k.a. Waxman-Markey.

The Boston Globe reports that, ”A little more than a year after cutting the ribbon of a new factory in Devens built with $58 million in state aid, Evergreen Solar has announced it will shift its assembly of solar panels from there to China.”

Evergreen received “$58.6 in grants, loans, land, tax incentives, and other support,” says the Globe. Yet, ”Through the first nine months of this year, Evergreen lost $167 million, compared with $33.6 million for the same period last year.”

What would Chu have to say about this? Evergreen is not losing money because there’s no cap on carbon. Massachusetts is one of several states participating in a cap-and-trade program known as the Regional Greenhouse Gas Initiative (RGGI).

Why is Evergreen expanding operations in China?  ”Lower costs.” Such lower costs include lower-cost energy. To repeat, China does not have cap-and-trade; it does not put a price on carbon.

Now, I’ll wager that Evergreen would be losing money even if Massachusetts were a Kyoto-free zone. But we may surmise that Evergreen would not shift its operations to China if China’s economy were carbon-constrained.

Chu should at least consider the possibility that pricing carbon would vitiate what little competitiveness the U.S. clean-tech sector has. Low-cost energy is a source of competitive advantage, as China powerfully demonstrates. By increasing energy costs, cap-and-trade would make all U.S.-based manufacture less competitive, including companies specializing in clean-tech products.

Reuters reports:

BARCELONA, Spain, Nov 5 (Reuters) - China should roughly halve its greenhouse gas emissions by 2050 to keep the world on a safe climate path, the head of the U.S. delegation at U.N. climate talks in Barcelona said on Thursday.

Leading industrialised countries say that the world must halve greenhouse gases by 2050 to avoid the worst effects of climate change, and have committed to lead by cutting their own emissions by 80 percent.

China should cut by about 50 percent, leaving space for poorer countries to grow their economies, Jonathan Pershing told Reuters.

“If you put China in there at a 50 percent reduction, if we’re a bit higher, that gives lesser developed countries a bit lower. If they are in that middle band, plus or minus some percentage, that seems about right.”

China would be on course to meet that goal if it repeated its present energy efficiency five-year plan into the future, he added. “They’re doing pretty well,” he said.

As discussed in previous posts, meeting the EU/UN/Al Gore CO2 “stabilization” goal — 450 parts per million by 2050 — would require heroic (suicidal?) sacrifices on the part of developing countries. Stabilization at 450 ppm would require, at a minimum, a 50% reduction in global emissions by 2050. Because most of all the increase in global emissions over the next four decades (indeed, the next 90 years) is projected to come from developing countries, meeting the stabilization target would require developing countries to lower their emissions more than 60% below baseline projections even if industrial countries magically achieve zero net emissions by 2050!

Barring technological breakthroughs (in their nature unpredictable) that dramatically lower the cost and improve the performance of non-emitting energy technologies, the only way developing countries could comply is by restricting their use of energy. Yet developing countries are poor in no small part because they lack access to abundant, affordable energy. The 450 ppm goal is a recipe for “stabilizing” global poverty.

Don’t be fooled by Pershing’s remark that all China needs to do is keep repeating its “five-year” plan. Supposedly, China is already “well on the way” to reducing its energy intensity 20% by 2010. Based on the only data available, Roger Pielke, Jr. finds that China has cut intensity only 7.4% from 2005 to 2008, “meaning that it has a long way to go to reach a 20% target by 2010.” Besides, even if the first five-year emission intensity reduction plan succeeds, it represents the low-hanging fruit. Replicating that achievement every five years would become increasingly costly and difficult.

That a 450 ppm CO2 stabilization target cannot be met unless China slams the brakes on its economy has been clear from basic emissions arithmetic for some time. What’s new is that a U.S. Government official is quantifying, in the context of climate treaty negotiations, what “meaningful participation” by China actually means.

So far, India and China have escaped Kyoto-style energy rationing. This makes their products more competitive in global markets, and pulls capital and jobs away from CO2-regulated economies.  But we’re only two years into the first (2008-2012) Kyoto compliance period. At some point, free riders have to pay up or get off the train.

The EU, Japan, and the United States (if it ratifies Kyoto II) will not accept a permanent arrangement under which they bear all the costs of energy rationing, fork over billions in technology transfers and climate assistance to developing countries, and export more jobs to India and China.

The longer the Kyoto project endures, the greater the pressure India and China will face — in the form of carbon tariffs, for example — to join the club of the carbon-constrained.

If India and China want to protect their right to grow and avert an economically-debilitating era of trade conflict, they should get off the global warming bandwagon as soon as possible. A balanced assessment of the science does not justify alarm. India and China already act on the premise that global warming policy is more dangerous than global warming itself. It’s time for their words to match their deeds.

The broken promises include his pledge to enact a “net spending cut,” his promise not to raise taxes on anyone making less than $250,000 a year, and his promise not to sign bills without first giving the public five days of notice.

The Congressional Budget Office says that Obama’s proposed budgets will explode the national debt through massive spending increases, increasing the already large deficits left behind by the Bush administration from $4.4 trillion to $9.3 trillion. His record-setting budgets flagrantly violate his promise to propose a “net spending cut.”

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing into law a regressive excise tax increase to expand the SCHIP program, and by proposing a cap-and-trade energy tax that could charge up to $2 trillion, a massive cost that Obama himself has said will be passed “on to consumers,” as well as homeowners and motorists. (In 2008, Obama privately admitted to the San Francisco Chronicle that if he was elected, electricity bills would “skyrocket” under his administration, but it didn’t report that.)

He also broke his promise not to raise taxes by backing health-care bills that would impose a laundry list of new taxes on the middle class, including a tax on uninsured people.  Americans for Tax Reform earlier summarized the tax increases in ObamaCare: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The costly cap-and-trade energy bill supported by Obama would lead to big tax increases, administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase.   It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”  (Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”)

Although cap-and-trade backers claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.   It would enrich politically-connected corporations, and result in massive destruction of the world’s forests.   By expanding ethanol subsidies and mandates, it would cause enormous “damage to water supplies, soil health and air quality.” Ethanol subsidies have already resulted in forests being destroyed in the Third World, and by diverting cropland to fuel production away from food production, they have already caused famines that have killed countless people in the world’s poorest countries.

Over and over again, Obama has broken his campaign promise to give the public five days of notice before signing bills into law, including his very first law, the trial-lawyer backed Lilly Ledbetter Fair Pay Act. Obama also repeatedly made false claims about the Supreme Court decision that the Ledbetter law overruled, misstating the facts of that case and how long it gives employees to sue over pay discrimination (the Court did NOT say that employees have to sue even before discovering discrimination).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package, much of whose contents were secret until shortly before Congress voted on it, and whose 1400 pages went unread by most Congressmen who voted on it.  (It repealed welfare reform and contained loads of welfare, pork, and waste, while wiping out jobs in the export sector.)

Obama’s broken promises are part of a larger pattern of dishonesty. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run. Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed.

According to Bjørn Lomborg, “For the money it takes to save one life with carbon cuts, smarter policies could save 78,000 lives. ”

Let’s pursue those smarter policies, then.

The Washington Examiner explains how the bill will lead to deforestation, and thus increase greenhouse gas emissions in the long run.

The bill, which is loaded with pork for special interests, is backed by Obama, who once admitted that under his cap-and-trade scheme, electricity and utility bills would “skyrocket” and coal-fed power plants would go “bankrupt.”  Treasury Department analysts estimated it could increase taxes on the average American household by $1,761 per year.

The bill also contains environmentally harmful provisions, such as massive ethanol subsidies, which will result in “damage to water supplies, soil health and air quality.” Ethanol subsidies have resulted in forests being destroyed in the Third World, and caused famines that have killed countless people in the world’s poorest countries.

The scheme appears simple enough. The mailer says, “When you sign up for Dominion Green Power, you add a little extra to your monthly bill which Dominion will use to purchase certified renewable energy certificates on your behalf.”

And what does the consumer get in return? Well, that’s a good question. Dominion’s Green Power Web page features a video that features a family that “pays an extra 1.5 cents per kilowatt hour, and the money is used to purchase renewable energy certificates to support green energy development through a vendor called 3 Degrees.”

And what does 3 Degrees actually do? According to its website:

3Degrees enables businesses and individuals to advance their climate needs and strategies We do this by originating and providing Green-e Energy Certified Renewable Energy Certificates and third-party certified Verified Emission Reductions (aka, carbon offsets) from around the world to help our partners reduce their environmental footprint. We also provide customized consulting services to help businesses address their climate- and energy-related challenges.

This is precisely the kind of climate policy rent-seeking that cap-and-trade policies are designed to encourage. As CEI’s Marlo Lewis has warned, this kind of “certificate” can only have value under a cap-and-trade scheme. In light of the difficulty that the Obama administration and Congressional Democrats are having in pushing through climate legislation, 3 Degrees’ business model may be riskier than its founders had envisioned.

But whatever the future of climate policy, one thing is for certain: Private subsidy schemes like this net the consumer nothing tangible. And for those who do go in for that sort of thing, the warm, fuzzy feeling of feeling less guilty about helping to warm the planet must wear off fairly quickly.

At the first Senate Environment and Public Works Committee hearing on S. 1733, the Kerry-Boxer “Clean Energy Jobs and American Power Act,” Department of Energy Secretary Steven Chu explained the economic rationale for adopting a Kyoto-style cap-and-trade program.

His argument, in a nutshell, goes like this:

1. Reducing emissions globally will require a massive investment in “clean technologies” — an estimated $2.1 trillion in wind turbines and $1.5 trillion in solar voltaic panels by 2030. These investments will create many green jobs.
2. “The only question is — which countries will invent, manufacture, and export these clean technologies and which will become dependent on foreign products.”
3. The United States is falling behind. “The world’s largest turbine manufacturing company is headquartered in Denmark. 99 percent of the batteries that power America’s hybrid cars are made in Japan. We manufactured more than 40 percent of the world’s solar cells as recently as the mid-1990s; today we produce just 7 percent.”
4. To seize the opportunity of clean tech and keep from falling farther behind, “we must enact comprehensive climate legislation,” the most important element of which is a “cap on carbon emissions that ratchets down over time. That critical step will drive investment decisions towards clean energy.”

There is so much silliness packed into Chu’s testimony that it’s hard to know where to begin.

Let’s start with Step 1: The world will need $3.6 trillion worth of clean tech by 2030. Suppose the world does decide to reduce emissions. There’s no good reason to suppose that wind turbines and solar panels will ever contribute more than a small fraction of the “solution,” because these technologies are not economically “sustainable” — they consume more wealth than they produce.

A recent report by the Rheinisch-Westfälisches Institut (RWI) finds that Germany’s Renewable Energy Sources Act (EEG) has utterly failed to make wind and solar power either commercially viable or cost-effective as an emission-reduction strategy. Herewith a few highlights.

First, renewable power is a net drain on Germany’s economy:

• Germany subsidizes solar photovoltaics (PVs) at a rate of 59¢ per kWh. That is “more than eight times higher than the wholesale electricity price at the power exchange and more than four times the feed-in tariff [subsidy] paid for electricity produced by on-shore wind turbines.”
• “Even on-shore wind, widely regarded as a mature technology, requires feed-in tariffs [subsidies] that exceed the per-kWh cost of conventional electricity by up to 300% to remain competitive.”
• Germany has the second-largest installed wind capacity in the world, “behind the United States,” and the largest installed PV capacity in the world. However, installed capacity is not the same as production or contribution, and “by 2008 the estimated share of wind power in Germany’s electricity production was 6.3% . . . The amount produced by solar photovoltaics was a negligible 0.6% despite being the most subsidized renewable energy, with a net cost of about 8.4 Bn € (US 12.4 Bn) for 2008.”
• “The total net cost of subsidizing electricity production by PV modules is estimated to reach 53.3 Bn € (US $73.2 Bn) for those modules installed between 2000 and 2010. . . .wind power subsidies may total 20.5 Bn € (US $28.1 Bn) for wind converters installed between 2000 and 2020.”

Even as a carbon-reduction strategy, wind and solar power are uneconomic:

• “Given the net cost of 41.82 Cents/kWh for PV modules installed in 2008, and assuming that PV displaces conventional electricity generated from a mixture of gas and hard coal, abatement costs are as high as 716 € (US $1,050) per tonne [of carbon dioxide].”
• “Using the same assumptions and a net cost for wind of 3.10 Cents/kWh, the abatement cost is approximately 54 € (US $80) [per tonne CO2]. While cheaper than PV, this cost is still nearly double the ceiling of the cost of a per-ton permit under Europe’s cap-and-trade scheme.”
• Carbon permits are trading at 13.4 € per ton. “Hence, the cost from emission reductions as determined by the market is about 53 times cheaper than employing PV and 4 times cheaper than using wind power.”
• Germany’s “increased use of renewable energy technologies generally attains no additional emission reductions beyond those achieved by ETS [European Trading System] alone. In fact, since establishment of the ETS in 2005, the EEG’s net climate effect has been equal to zero.”

Although the EEG creates some “green jobs,” the net impact on wealth and jobs is negative:

• “While employment projections in the renewable sector convey seemingly impressive prospects for gross job growth, they typically obscure the broader implications for economic welfare by omitting any accounting of off-setting impacts. These impacts include, but are not limited to, job losses from crowding out of cheaper forms of conventional energy generation, indirect impacts on upstream industries, additional job losses from the drain on economic activity precipitated by higher electricity prices, and consumers’ overall loss of purchasing power due to higher electricity prices, and diverting funds from other, possibly more beneficial investment.”
• “Proponents of renewable energies often regard the requirement for more workers to produce a given amount of energy as a benefit, failing to recognize that it lowers the output potential of the economy and is hence counterproductive to net job creation.”

As my colleague Don Hertzmark observes: “If you must continually pour external resources into an energy source, then it cannot be a net source of jobs in the economy, since those resources could have gone somewhere else to create real work.”

So, yes, via mandates and subsidies, governments around the world could pump $2.1 trillion into wind turbines and $1.5 trillion into PVs. But this is an unsustainable market that will make the world poorer, not wealthier, as Chu imagines.

Okay, now for Step 2: We must choose either to make clean tech or become dependent on foreign producers. This point is silly on many levels.

• If we don’t enact cap-and-trade, then we won’t even have to consider buying or making trillions of dollars worth of “clean tech.”
• Even if we choose to limit emissions, the German experience indicates that investing billions (let alone trillions) in clean tech is not cost-effective.
• Even if we do enact a cap-and-trade program, and even if clean tech becomes cost-effective, why would we want to make our own wind turbines and PVs if imported products are cheaper?
• Chu worries the United States could become “dependent on foreign products” — as if Denmark or Japan might refuse to sell us wind turbines or hybrid cars. Even oil is not the “energy weapon” it is sometimes cracked up to be, as Jerry Taylor and Peter Van Doren of the Cato Institute explain.
• Besides, Toyota makes lots of cars — including hybrids — in the United States. Similarly, although Vestas, the world’s largest wind turbine manufacturer, is, as Chu says, ”headquartered” in Denmark, it is investing $1 billion in four Colorado plants. Chu’s fear of “dependence on foreign products” makes no sense in a globalized economy.

Step 3: The United States is falling behind in clean tech manufacture. If we’re “falling behind,” then why do Toyota and Vestas build factories here? Besides, “falling behind” is a problem only if the clean-tech industy is a net wealth-creator. As we have seen, this is not the case for wind turbines and PVs, which is why they require market-rigging subsidies, mandates, and penalties (caps or carbon taxes) levied against carbon-based energy.

If clean tech ever does become sustainable, the only legitimate role for policymakers would be to eliminate political impediments to market-driven investment. As MIT’s Thomas Lee, Ben Ball, Jr., and Richard Tabors wrote in the conclusion of Energy Aftermath, a retrospective on Carter-era energy policies:

The experience of the 1970s and 1980s taught us that if a technology is commercially viable, then government support is not needed and if a technology is not commercially viable, no amount of government support will make it so.

Step 4: To be leaders in clean tech manufacture, we must put a price on carbon — a cap that ratchets down every year.

This is convoluted. Chu began by arguing that we needed to invest in clean tech in order to reduce emissions. Now, he says we must reduce emissions to spur investment in clean tech! Apparently, if you can’t sell cap-and-trade on the basis of climate alarm, claim that it’s “about jobs.”

Another confusion — Chu suggests U.S. firms can’t or won’t develop clean-tech products for sale in the global marketplace unless the federal government boosts domestic market share by putting a price on carbon. Two problems here. First, a price on carbon does relatively little to increase the market share of wind and solar power, because even with a price on carbon to handicap fossil energy, renewable power is still uncompetitive. That’s why the Waxman-Markey bill includes a renewable portfolio standard in addition to a cap-and-trade program.

Second, a booming domestic market for a product is not a prerequisite to success in exporting that product. In the 1980s, the Asian Tigers produced enormous quantities of exports that were not widely purchased, and in some cases not even offered for sale, in domestic markets. If clean-tech products yield high returns in the global marketplace, enterprising U.S. firms will get into the game even if the products do not have a big market in the United States.

The irony is that a cap-and-trade program could actually be counter-productive to the development of an export-oriented clean-tech sector. Low-cost energy is a source of competitive advantage. By increasing energy costs, cap-and-trade would make all U.S.-based manufacture less competitive, including companies specializing in clean-tech products.

Like its House companion bill, Waxman-Markey, Title VII, Part A of Kerry-Boxer contains language that will:

1. encourage CO2 tort litigation against businesses smaller than those subject to the cap-and-trade program, and
2. pressure policymakers to “move the goal posts” (amend the legislation to tighten the caps).

 Bottom Line: The costs of climate legislation may greatly exceed the most pessimistic estimates of recent modeling studies. Those looking for “regulatory certainty” in these bills haven’t read the fine print.

Now, Brand has written a new book, called Whole Earth Discipline: An Ecopragmatist Manifesto, in which he takes on these environmental shibboleths in a more concerted fashion.  On American Public Radio’s Marketplace program yesterday, host Kai Ryssdal discussed the new book with Brand.  Asked what prompted him to write the book, Brand said that,

“My fellow environmentalists have been wrong about a couple of issues and were getting in the way of important things we should be doing, both with biotechnology and with nuclear technology, and in terms of how we think about cities, and in terms of how I know we’re going to think about geoengineering–that is, direct intervention in the climate.”

Ryssdal contrasted Brand’s earlier support for the back to the land movement with his current belief that big cities are better for the environment.

“Not only big cities, but big slums … that’s how [poor people in the developing world] are getting out of poverty.  They’re emptying out a lot of the subsistence farms that have been tough on the landscape all over the world, moving into towns for opportunity, building jobs for each other.  They’re also moving up what’s called the energy ladder, toward more and better grid electricity.  By and large the cities are probably the greenest thing that humans do.”

On his support for biotech crops, Brand said,

“Already, the crops we have now, the herbicide-tolerant and the insect-resistant crops … [are] getting what amounts to higher yields. You can raise more food on less land, and all of that is good for ecology in general and the climate particularly.”

Challenged that critics call them Frankenfoods, Brand replied,

“The idea there was that Dr. Frankenstein was doing something against nature, and that somehow the genetically engineered food crops are against nature.  And as a biologist, I’m just baffled by that line of argument because agriculture has been in that sense against nature for 10,000 years. That we’re finally able to do more precise tuning of the crops is a huge gain, not a loss.”

The New York Times notes that “the emissions impact of, say, a carrot, can vary by a factor of 10, depending how and where it is grown.” With that much imprecision built in, if the labels change consumer behavior as much as supporters hope, it’s entirely possible that eco-concsious diets could result in more carbon emissions, not less. A classic case of leaping before you look.

This new religion is a piece of work. It comes complete with a deity (Gaia), clergy (activists), indulgences (carbon credits), and now, dietary restrictions.

Part A of Title VII of Kerry-Boxer sets forth the emission reduction targets and timetables of the bill’s proposed greenhouse gas emissions cap-and-trade program. It is nearly identical to the corresponding section of the Waxman-Markey bill, the main substantive difference being a tougher emissions reduction target for the year 2020. Waxman-Markey requires a 17% reduction below 2005 levels by 2020; Kerry-Boxer, a 20% reduction. 

It would be a mistake, though, to suppose that those numbers reflect the full extent of the regulatory burdens Title VII Part A could impose on the U.S. economy. Identical language in both bills could (1) unleash a torrent of lawsuits against tens of thousands of relatively small emitters of carbon dioxide (CO2), and (2) put pressure on future presidents and congresses to adopt substantially tougher emission reduction targets. 

Section 701 Findings: Setup for CO2 Tort Litigation

Under the Kerry-Boxer and Waxman-Markey bill, business entities would be subject to the cap-and-trade program only if they emit at least 25,000 metric tons per year of carbon dioxide-equivalent (CO2-e) greenhouse gas (GHG) emissions. So on superficial inspection, if you are small manufacturer or just about any type of non-industrial facility, you will have no emission reduction obligations. That perception helps the bills’ proponents divide-and-conquer the business community.

In reality, the Findings in Kerry-Boxer and Waxman-Markey are the setup for litigation demanding additional emission reductions beyond those specified in the bills’ cap-and-trade programs. This is particularly worrisome because state attorneys general and environmental groups are already suing energy companies under tort law for emitting CO2.

The Findings say that “each increment of emission … causes or contributes … to the acceleration and extent of global warming and its adverse effects,” and “accordingly, controlling emissions in small as well as large quantities is essential” to reduce “threats” and “injuries,” including disease, death, property damage, bad weather, business losses; harm to forest, plants, wildlife, water resources, and air quality; and – as if that list weren’t inclusive enough — “other harm.”
 
Worse, the Findings go on to equate risk of harm with actual harm: “the fact that some of the adverse and potentially catastrophic effects of global warming are at risk of occurring and not a certainty does not negate the harm persons suffer from actions that increase the likelihood, extent, and severity of future impacts.” Get that? All plaintiffs will need is some remote, speculative possibility of catastrophic impacts — and of course that’s what the global warming scare is all about — and voila, harm has been done, injuries cry out for redress.
 
If the language in the Findings becomes the law of the land, there will be no stopping the flood of common law nuisance suits. Any increment of emissions, no matter how small, will be deemed to cause or contribute to global warming and its harmful effects. And even if no harm can be proved, the risk of harm will count as actual injury.

Bottom line: Although EPA, initially, may only regulate entities emitting at least 25,000 tons of CO2-e per year, the Findings implicitly authorize litigation targeting vast numbers of small entities.

Section 705 Review and Program Recommendations: Setup for Moving Goal Posts
 
There’s a lot of mischief in this section, too. To begin with, Sec. 705 requires the EPA Administrator, every four years, to address “existing scientific information and reports, considering, to the greatest extent possible, the most recent assessment report of the Intergovernmental Panel on Climate Change, reports by the United States Global Change Research Program … ” This provision will turn EPA into an even more uncritical rubber stamp for the IPCC and USGCRP than it already is. More than ever, IPCC and USGCRP will write their reports to influence U.S. policy (i.e. they will be even more politicized) and their influence will increase. Cheer if you like agenda-driven science!
 
Sec. 705 also requires EPA to report on annual emissions and annual per-capita emissions by country. Not a word, though, about tracking emission intensity (greenhouse gas emissions per dollar of output) by country. In other words, the metrics have been selected to paint the United States in the worst possible light.
 
Also, as you’d expect, the Administrator is required to assess the impacts of climate change on everything under the Sun — populations, health, livelihoods, tribal culture, weather, fresh water, ecosystems, agriculture, etc. — but there is no requirement to assess the impacts of climate policy on anything. This despite a requirement that the Administrator use a “risk management framework.”
 
Similarly, the Administrator is supposed to assess the potential non-linear, abrupt, or essentially irreversible changes in the climate system but he is under no corresponding obligation to assess factors that might stabilize the climate and counteract the forcing effects of greenhouse gases.
 
Now here’s where it gets serious. The Administrator is also required to assess what terrible things won’t be prevented by limiting CO2 equivalent emissions to 450 ppm or global warming to 2°C (3.6°F) beyond pre-industrial temperatures. This sets up the Administrator to advocate 350 as the new 450. It specifically requires the Administrator to identify “alternative thresholds or targets that may more effectively limit the risks” of climate change.
 
Similarly, the Administrator must assess whether the Kerry-Boxer bill, taking into account international actions and commitments, is sufficient to limit GHG concentrations to 450 ppm and global warming to 2°C above pre-industrial temperatures, or whether ”other temperature or greenhouse gas thresholds identified” by the Administrator would be more protective.
 
So the U.S. Climate Action Partnership gang are naive if they think the Kerry-Boxer and Waxman-Markey emission reduction targets, once enacted, will be set in stone. These bills are just the framework for more aggressive emission reduction requirements to come. Regulatory certainty is an illusion.
 
Perhaps because some people just don’t trust EPA — imagine that! — Kerry-Boxer requires the National Academy of Science (NAS) to undertake a similar four-year review of climate science and policy. If the NAS concludes that the United States will not meet the Kerry-Boxer targets, or that 450 ppm and 2°C are not sufficiently protective, the President “shall” submit a plan to Congress identifying the domestic and international actions that will achieve the additional reductions. This language implicitly makes the president a handmaid of the National Academy. Once Jim Hansen and his NAS buddies decide that 350 is the new 450, the president “shall” submit a plan explaining how we get there.

Much of the debate on Kerry-Boxer and Waxman-Markey has centered on the bills’ emission reduction targets. Meeting those targets could destroy millions of jobs. The not-so-hidden fangs lurking in Sections 701 and 705 pose additional significant threats to the economy — and provide additional reasons to oppose such legislation.

Of course, all things are relative. With the economy and unemployment such as it is, despite that miraculous stimulus bill, you can see how a problem that’s not supposed to truly impact us for a while to come might slide down the pecking order.

BUT, the survey also shows that now just 36% of Americans say global temperatures are rising as a result of human activity, down from 47% last year. That’s a scientific belief, independent of the economy right?

I’d argue otherwise. Wild speculation about man-made impact on the environment is a rich man’s game. It’s true that the warming we’ve seen until about a decade ago when it stopped - though exactly why and for how long is debated - either is or isn’t partly man-made, regardless of the economy or regardless of what the public thinks. But when you don’t feel so rich, somehow scientific evidence that seemed so compelling before simply isn’t now.

Torethy Frank is one of them. She has other priorities, such as escaping crushing poverty: “Torethy and her family of six live in a small house made of concrete and brick with no running water. As a toilet, they use a hole dug in the ground. They have no shower and there is no fixed electricity supply.”

You can see why the two degrees of projected warming over the next century are not at the top of her “problems to solve” list. I would argue that ending global poverty should be a little higher on ours. Certainly higher than global warming.

The Waxman-Markey bill (like its Senate companion, Kerry-Boxer) aims to cap U.S. carbon dioxide (CO2) emissions from 2012 to 2050. Bond and Hutchison estimate the bill’s impacts on motor fuel prices during 2015 to 2050. Of course, their study depends on assumptions regarding population growth, GDP growth, and technology change out to 2050. But in that regard, the Bond-Hutchison report is no different from any other study of Waxman-Markey, including studies touted by the bill’s supporters.

A virtue of this report is its straightforward, uncomplicated methodology. Anyone who can do arithmetic can understand how Bond and Hutchison arrive at their conclusions.

Here’s how Bond and Hutchison proceeded:

• For estimates of how Waxman-Markey would affect motor fuel prices, they relied on a study prepared by Charles River Associates for the National Black Chamber of Commerce (NBCC). The NBCC study estimates, for example, that Waxman-Markey would increase the average price per gallon of motor fuels by 24¢ in 2020, 38¢ in 2030, 59¢ in 2040, and 95¢ in 2050.
• Bond and Hutchison also use the NBCC study’s estimate of how much fuel Americans would consume annually from 2015 through 2050.
• Then, for each year during this period, they multiplied the number of gallons consumed times the price increase per gallon.
• Bond and Hutchison note that the NBCC study’s fuel-price estimates take into account the relevant Waxman-Markey cost-containment provision, under which refiners get 2.25% of all emission allowances free-of-charge during 2014 to 2026.
• Finally, Bond and Hutchison added up the increased annual fuel costs from 2015 through 2050.

Here are some of the results:

• In 2020, Waxman-Markey will impose $43.6 billion in additional fuel costs on the American people. This will rise to $78.1 billion in 2030, $128.2 billion in 2040, and $215.8 billion in 2050.
• Cumulatively, Waxman-Markey will impose $3.6 trillion dollars in additional total fuel costs on the United States.
• In 2020, Waxman-Markey will increase each gallon of gasoline purchased by 24¢. With Americans expected to consume 122 bilion gallons of gasoline in that year, Waxman-Markey will impose $27.5 billion in additional gasoline costs.
• In 2030, with Waxman-Markey forcing gasoline 38¢ higher per gallon, Americans will pay $42.3 billion more for gasoline.
• Waxman-Markey will force the price of each of the 83 billion gallons of diesel fuel consumed by Americans in 2020 higher by 17¢ and $12.9 billion in total. By 2030, Waxman-Markey will force diesel 28¢ higher per gallon, totaling $28.3 billion.
• In 2020, Waxman-Markey will make jet fuel 11¢ more expensive per gallon. Americans will consume 34 billion gallons of jet fuel in their air travel, imposing $3.2 billion in additinal jet fuel costs. This figure rises to an additional $7 billion in 2030.
• In 2020, each farmer in the Northeast on average will pay $630 in additional fuel costs. Farmers in the South will pay an additional $966 on average, and farmers in the Midwest an additional $1,213 on average.
• In 2020, the average  owner of a diesel-powered tractor-trailor will pay an additional $1,728 for fuel.

To wrap up, Bond and Hutchison make a significant contribution to the debate by clarifying the consumer impacts of cap-and-trade legislation.

The new, more ‘nuanced’ rationale for energy rationing is that global warming will aggravate several pre-existing environmental and health threats that cause or contribute to instability and conflict. We’re supposed to fear that a warming world will be much more violent and dangerous. Supposedly, “even the generals are worried” that U.S. security forces will be overstretched, even overwhelmed, by crisis after crisis after crisis. Unless, of course, Congress comes through with bigger and bigger appropriations for DOD! 

This is bunkum, as I discuss here, here, and here. Today, I want to pour more cold water on threat-multiplier hype, courtesy of my colleague, environmental researcher Indur Goklany.

Goklany (”Goks” to his friends) recently responded to an article in the Economist arguing that global warming exacerbates conditions (drought, flooding, hunger, insect-borne disease) in poor countries that already impede their development. From which it follows (although the article doesn’t spell it out) that climate change increases the likelihood of state failure, violence, and war.

Chief among the conditions that will allegedly become worse in a warming world are drought and flooding. ”Regardless of whether this is the case,”  Goks writes in his letter to the Economist, “deaths from droughts have declined 99.9% since the 1920s, and 99% from floods since the 1930s” [1]. Yet alarmists tell us that the warming of the latter half of the 20th century was unprecedented in the past 1300 years.

In view of the long-established and overwhelming trends towards greater safety, despite allegedly unprecedented warming, it is difficult to believe that droughts and floods will be a major cause of violent conflict in coming decades. That is especially the case when, as noted previously, nations faced with water shortages typically cooperate and trade, not come to blows.

More broadly, Goks points out, all the long-term trends in environmental factors affecting development are positive:

In fact, access to safe water, improved sanitation, crop yields, and life expectancy has never been higher in the history of mankind.[2] This is true for both the developing and developed worlds. Much of this has been enabled, directly or indirectly, by economic surpluses generated by the use of fossil fuels and other greenhouse gas generating activities such as fertilizer usage, pumping water for irrigation, and use of farm machinery. And crop yields, in particular, are also higher today than ever partly because of higher concentrations of CO2, without which yields would be zero.

Some day — who knows when?– “even the generals” will outgrow climate hysteria and get back to worrying about threats they actually know how to do something about.