Global Warming
Cap-and-trade and energy politics: A Salon debate
Steve Everley made the case against putting a price on carbon this morning. Now David Roberts responds
Over the next three days, Salon will be featuring a dialogue between two very different voices on the subject of climate change legislation. Steve Everley is manager of policy research at American Solutions and a contributing author to “To Save America: Stopping Obama’s Secular-Socialist Machine,” by Newt Gingrich, and David Roberts writes about energy politics for Grist.
Everley led off with his thoughts this morning, and a response from Roberts followed a few hours later (it appears below Everley’s post).
Steve Everley: With the unemployment rate near 10 percent, creating jobs should be the first consideration of our elected leaders, but instead President Obama and his liberal allies in Congress are insisting on enacting a national energy tax that will kill jobs and drive American businesses overseas.
The vehicle for imposing this vast new energy tax system is cap-and-trade, a scheme where the government arbitrarily determines how much carbon each company can emit, chooses which companies get free permits to emit carbon and which companies have to pay for them, and then puts unelected bureaucrats in charge of regulating the whole system.
The result is higher energy costs, which virtually every economist will tell you are necessary for cap-and-trade to be effective – higher prices are necessary to prevent consumers from using what the left considers too much energy. President Obama even bragged that under his ideal cap-and-trade plan, electricity prices would “necessarily skyrocket.”
President Obama has also listed Spain as the model for his energy policy, noting last year that the Spanish government’s investments in green energy “are paying off in good, high-wage jobs – jobs they won’t lose to other countries.”
But a study from economics professor Gabriel Calzada of King Juan Carlos University in Spain shows that his country’s push for “green jobs” has been a disaster for the economy: Calzada found that each green job created not only costs on average 2.2 jobs in the private sector, but also upward of $800,000 each in government subsidies. Two months ago, Spain’s unemployment rate topped 20 percent.
If Spain is the model that President Obama and the left wish to emulate, then America’s unemployment rate will also “necessarily skyrocket.”
Many other studies have shown, including those from the Brookings Institution and the Congressional Budget Office, that higher energy costs lead directly to fewer American jobs. The CBO adds that the shift toward so-called green technologies, President Obama’s biggest selling point for this new cap-and-trade energy tax, would actually reduce economic productivity as each worker in the energy industry would now spend the same amount of time producing less energy.
The European Union sold cap-and-trade to its member countries in 2005 on the basis that it would create jobs and boost their economies. The opposite happened. Since 2005, this policy has cost the EU economy over $7 billion, and the U.S. Government Accountability Office found last year that the EU system did not significantly advance investment in new technologies, which President Obama and his liberal allies in Congress keep pointing to as the source of new jobs that cap-and-trade energy taxes are supposed to deliver.
With that kind of record, what rational policymaker would seek to impose this new energy tax system on his or her own constituents as a way to create net new jobs and net new economic wealth, and not just a massive redistribution of wealth?
Last fall Sen. Kerry tried to sell his cap-and-trade energy tax plan by pointing out that America had effectively reduced its emissions in the past year “because of the downturn in the economy.” In order to get to where we need to be, Kerry concluded, we just need to go “another 14 percent.”
It was an illuminating admission from the Senate’s staunchest defender of the energy tax. Kerry articulated a direct relationship between economic stagnation and cap-and-trade, proof that an energy tax is a strategy that will kill more American jobs and make the recession permanent.
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David Roberts: I confess to being uncertain how to respond to Mr. Everley’s opening salvo. Like his boss Mr. Gingrich, one of the original masters, he seems to be stringing together words and phrases poll-tested to inspire fear. The presence of the term “unelected bureaucrats” does not generally signal good faith and seriousness.
So let’s back up a bit. Why would we want a mandatory cap on greenhouse gas emissions? Because we have a large and pressing problem to solve, namely climate change, a phenomenon that Everley astonishingly fails to even mention. The best science indicates that the developed world needs to reduce its emissions over 80 percent by 2050. That is a truly Herculean task, and I’d be quite curious to hear how Everley proposes to accomplish it without a mandatory cap on carbon pollution — or if he thinks it’s a real problem at all.
By emitting greenhouse gases, industries are imposing costs on the public, but they are not paying those costs. Carbon pollution is a classic economic “externality” that distorts the proper functioning of the market. One way or another, those costs need to be internalized, incorporated into the market price of fossil fuel-intensive goods and services. It’s important to note that such a move would not raise net costs — it would simply move those costs to their rightful owners. It would force the market to tell the truth.
So how to go about it? In the late 1980s, a group of market-inclined environmentalists, recognizing the limits of “command-and-control” air pollution regulations, developed a new model: rather than plant-by-plant mandates, set a declining upper limit on the total pollution emitted across the U.S. economy, issue tradable pollution permits, and allow private capital to flow to the best (read: cheapest) means of meeting the cap. Thus you harness environmental goals to market forces. This essentially conservative idea impressed the administration of George Bush Sr., who signed into law the 1990 Clean Air Act amendments, which implemented such a system for acid rain pollutants. It was a resounding success, reducing pollution much more cheaply than expected, with massive social and health benefits. (For a compact history of cap-and-trade, I recommend this article in Smithsonian.)
Market-based pollution limits have been so effective that a bipartisan group of senators led by Sens. Carper. D-Del., and Alexander, R-Tenn., is now pushing a similar trading system for SO2, NOx, and mercury — so-called multipollutant legislation. Leading lights on the right used to feel the same way about using market-based systems to reduce greenhouse gases. For instance, a wise man once said:
“I think if you have mandatory carbon caps combined with a trading system, much like we did with sulfur, and if you have a tax-incentive program for investing in the solutions, that there’s a package there that’s very, very good. And frankly, it’s something I would strongly support.”
That was Newt Gingrich in 2007, before he was angling for a presidential nomination from a party dominated by its Tea Party fringe. Similarly, in 2008 California Senate candidate Carly Fiorina said that a cap-and-trade system would “both create jobs and lower the cost of energy.” Now that she’s seeking votes from the Tea Party, she’s allying with the Senate’s premier flat-earther, James Inhofe, R-Okla.
In short, conservative politicians are turning away from — and grotesquely mischaracterizing — a market-based pollution control system for primarily self-interested electoral reasons. This has made clear dialogue on the subject extraordinarily difficult.
Anyway, I don’t want to bore people, but a couple more quick notes. First, the Spanish study Everley cites has been debunked up one side and down the other, most recently by the DOE’s National Renewable Energy Laboratory. No one but conservative ideologues takes it seriously anymore. Recent studies of cap-and-trade bills, like the one a couple weeks ago from the Peterson Institute for International Economics, show that they would be net job creators, if modest ones. Other studies, from, for example, the EPA and CBO, show that the bills would reduce the deficit, which you’d think would be attractive to conservatives.
On the costs of a cap-and-trade system, the economic consensus is that it would cost American households about a postage stamp a day — a far, far smaller price than would be imposed by the damages from climate change. For more on that consensus, see this discussion paper (PDF) from journalist Eric Pooley.
To conclude: virtually everyone agrees that the U.S. needs to invest in new clean energy industries and solutions. That’s the easy part. The politically more difficult part is how to pay for those investments. A cap-and-trade system offers a twofer: It discourages carbon pollution by raising its price, and it uses that revenue to fund clean energy solutions. Conservatives want to spend the money, but they don’t want to raise it. It’s fiscally and morally irresponsible.
Republican climate folly
As temperatures break records, the GOP holds firm: The less we know about global warming, the better
Frank Gehrke, chief of snow surveys for the Department of Water Resources, stands in a snow-free meadow at Echo Summit, Calif. Warm spring weather, combined with lower then normal precipitation, caused the statewide snowpack water content to be only 40 percent of normal for this time of year. (Credit: AP/Rich Pedroncelli) Whatever adjective you choose — ironic? tragic? ludicrous? — the outcome of a series of budget votes held in the GOP-controlled House on Tuesday was definitely interesting. The chamber was wrangling over a series of amendments to an appropriations bill for the Departments of Commerce and Justice. The battle line was drawn between senior Republicans trying to resist further spending cuts, and young Turks looking to slash and burn.
In every case but one, the senior Republicans (with the help of Democrats) proved victorious. The lone exception? An amendment proposed by Maryland’s Andy Harris, cutting $542,000 in funding for a climate website at the National Oceanic and Atmospheric Administration.
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Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.
Global warming hits home
After a year of freakish and destructive weather, Americans are finally waking up to the dangers of climate change
Houses were severely damaged after Hurricane Irene came through Bethel, Vt. on August 28, 2011 (Credit: U. S. Fish and Wildlife Service - Northeast Region / CC BY 2.0) The Williams River was so languid and lovely last Saturday morning that it was almost impossible to imagine the violence with which it must have been running on August 28, 2011. And yet the evidence was all around: sand piled high on its banks, trees still scattered as if by a giant’s fist, and most obvious of all, a utilitarian temporary bridge where for 140 years a graceful covered bridge had spanned the water.
The YouTube video of that bridge crashing into the raging river was Vermont’s iconic image from its worst disaster in memory, the record flooding that followed Hurricane Irene’s rampage through the state in August 2011. It claimed dozens of lives, as it cut more than a billion-dollar swath of destruction across the eastern United States.
Continue Reading CloseBill McKibben is the Schumann Distinguished Scholar at Middlebury College, and founder of the global climate campaign 350.org. His latest book is "Eaarth: Making a Life on a Tough New Planet.". More Bill McKibben.
Every country for itself
As American power wanes, we're being faced with a dangerous new power vacuum. An expert explains what's next
For the first time in nearly a century, the world doesn’t have a clear set of leaders. A generation ago, the G-7 – France, Germany, Italy, Japan, United Kingdom, United States and Canada – not only powered the global economy, they also, for better or worse, made the decisions that determined the outcome of the entire world. But over the last several years, the dynamic has changed.
According to a widely discussed 2010 report by London’s Standard Chartered Bank, the world has entered a new “‘super-cycle” in which traditional economic hierarchies are being upended. Ever since the financial crisis, the U.S. has lost the economic strength and force of will to be the world’s policeman. The number of Americans, for example, who believe the U.S. should “mind its own business internationally” has spiked to a level unseen since the 1950s. Meanwhile, new powers, like China, India and Brazil, have been unwilling to fill the power vacuum the U.S. has left behind. One could argue that this is a nice change from America’s aggressive past interventionism, but it has also helped create the global stalemate on everything from global warming to humanitarianism in Syria. And it’s a fact that has the potential to radically affect our future, both in positive and negative ways.
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Thomas Rogers is Salon's Arts Editor. More Thomas Rogers.
The Maldives’ ousted president on climate change and tyranny
Ousted in a February coup, Mohamed Nasheed talks global warming, Islamic radicals and "The Island President"
Mohamed Nasheed in "The Island President" It would be too optimistic to claim that the 2009 Copenhagen Summit represented a breakthrough or turning point in the battle against climate change. But it was the first moment when the United States, China and India — the world’s biggest polluters — all agreed in principle to reduce carbon emissions, and as symbolic statements go, that one was pretty big. Copenhagen also catapulted a most unlikely head of state to pop-star status, at least within the worldwide environmental movement. Mohamed Nasheed, who was then the president of the Maldives — Asia’s smallest country, both in area and population — emerged as the developing world’s most charismatic and dynamic spokesman on the causes, and the costs, of global warming.
Continue Reading CloseThe ugly delusions of the educated conservative
Better-educated Republicans are more likely to doubt global warming and believe Obama's a Muslim. Here's why
(Credit: AP Photo/Ross D. Franklin) I can still remember when I first realized how naïve I was in thinking—hoping—that laying out the “facts” would suffice to change politicized minds, and especially Republican ones. It was a typically wonkish, liberal revelation: One based on statistics and data. Only this time, the data were showing, rather awkwardly, that people ignore data and evidence—and often, knowledge and education only make the problem worse.
Someone had sent me a 2008 Pew report documenting the intense partisan divide in the U.S. over the reality of global warming.. It’s a divide that, maddeningly for scientists, has shown a paradoxical tendency to widen even as the basic facts about global warming have become more firmly established.
Chris Mooney is the author of four books, including "The Republican War on Science" (2005). His next book, "The Republican Brain: The Science of Why They Deny Science—and Reality," is due out in April. More Chris Mooney.
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