Cross-posted from ThinkProgress Green.
Rep. Ralph Hall (R-TX) has asked the Energy Information Administration to evaluate an unrealistically harsh and unsophisticated clean energy standard, designed to represent the Republicans’ worst nightmare: every electricity retailer in the country (some of them quite small) must meet a relatively high and rising standard for low-carbon energy, starting very soon, with no trading between companies, banking of excess credits, or other flexibility mechanisms that would soften the blow.
Even the Republican nightmare doesn’t look as bad as one might have suspected: according to the EIA analysis, it achieves a rapid reduction in carbon dioxide emissions, while causing electricity prices to rise by less than one percent per year, and lowering GDP per capita in 2035, the end of the study period, all the way from (watch closely or you’ll miss this) $65,848 to $65,658 – a reduction of less than 0.3 percent, in a national income nearly twice as high as today’s. Employment is slightly higher, as a result of this standard, from the mid-2020’s onward.
In the light of day, no one would allow this nightmare version of a clean energy standard to be adopted. Trading of clean energy credits between companies would almost certainly be included in any real standard. The goal, after all, is to reduce nationwide emissions as cheaply as possible, not to impose burdens on each and every company regardless of size or situation. The large reduction in costs that can result from trading is well established in economic theory, and confirmed by the experience of sulfur emissions trading under the Clean Air Act, among other cases. If some companies can reduce emissions more inexpensively than others, it makes perfect sense to let them sell credits to others; the same amount of emission reduction occurs, but at much lower cost than under the rigid plan that troubles Ralph Hall. This, by the way, is perfectly orthodox free market economics, of a sort that Republicans, once upon a time, used to swear by.
Full textThis item, cross-posted from Triple Crisis, was written by CPR Member Scholar Frank Ackerman and fellow Stockholm Environment Institute-U.S. Center economist Elizabeth A. Stanton.
Your house might not burn down next year. So you could probably save money by cancelling your fire insurance.
That’s a “bargain” that few homeowners would accept.
But it’s the same deal that politicians have accepted for us, when it comes to insurance against climate change. They have rejected sensible investments in efficiency and clean energy, which would reduce carbon emissions, create green jobs, and jumpstart new technologies – because they are too expensive.
While your house might not burn down, your planet is starting to smolder. Extreme weather events are becoming more common, and more expensive: in the first half of 2011, Mississippi River floods cost us between $2 and $4 billion, while the ongoing Texas drought has cost us between $1.5 and $3 billion, according to the National Climatic Data Center. And there’s much worse to come: climate-related extremes are already forcing millions of people from their homes worldwide; ice sheets and glaciers are melting much faster than expected; the latest research shows we are rapidly heading for summer temperatures at which crop yields in America will start to plummet.
Full textCross-posted from Triple Crisis.
Climate legislation, even in its most modest and repeatedly compromised variety, failed last year. And there won’t be a second chance with anything like the current Congress. What caused this momentous failure?
Broadly speaking, there are two rival stories. It could be due to the strength of opposing or inertial forces: well-funded lobbying by fossil fuel industries, biased coverage by increasingly right-wing media, the growth of the “Tea Party” subculture and its rejection of science, dysfunctional institutions such as the U.S. Senate with its filibuster rules, and the low priority given to climate legislation by the Obama administration.
Or it could be because environmentalists screwed up and shot themselves in the foot.
If you had to guess, which of these stories sounds to you like it would get more media attention? You’re right, that’s what everyone else thought, too. Gridlock in U.S. politics, and its effects on the fate of the earth, is such boring old news; the notion that misguided liberals have only themselves to blame sounds so clever and different.
This ecological niche has not gone unfilled. The Breakthrough Institute, whose motto could be “clever and different since 2005,” has repeatedly informed us that the death of environmentalism is the fault of environmentalists. Now “Climate Shift,” by American University political scientist Matthew Nisbet, claims that there was no media bias on climate issues in the last few years, and that advocates of climate legislation outspent their opponents, but still lost.
Full textCross-posted from Real Climate Economics.
True or false: Risks of a climate catastrophe can be ignored, even as temperatures rise? The economic impact of climate change is no greater than the increased cost of air conditioning in a warmer future? The ideal temperature for agriculture could be 17 degrees C above historical levels?
All true, according to the increasingly popular FUND model of climate economics. It is one of three models used by the federal government’s Interagency Working Group to estimate the “social cost of carbon” – that is, the monetary value of the long-term damages done by greenhouse gas emissions. According to FUND, as used by the Working Group, the social cost of carbon is a mere $6 per ton of CO2. That translates into $0.06 per gallon of gasoline. Do you believe that a tax of $0.06 per gallon at the gas pump (and equivalent taxes on other fossil fuels) would solve the climate problem and pay for all future climate damages?
I didn’t believe it, either. But the FUND model is growing in acceptance as a standard for evaluation of climate economics. To explain the model’s apparent dismissal of potential harm, I undertook a study of the inner workings of FUND (with the help of an expert in the relevant software language) for E3 Network. Having looked under the hood, I’d say the model needs to be towed back to the shop for a major overhaul.
Full textIs the Gulf of Mexico disaster a reason to pass climate legislation – or is that legislation largely irrelevant to curbing our oil use? A Greenwire article Tuesday quoted a number of economists arguing that the leading proposals in Congress wouldn’t do much to change our dependence on petroleum.
The only reasonable response is “yes, of course.” Climate proposals such as Kerry-Lieberman, Cantwell-Collins, or Waxman-Markey will have limited effects on oil consumption for two reasons: first, they are market mechanisms; second, they are weak market mechanisms.
To start with the good news, reducing carbon emissions from electric utilities is cheaper than reducing oil use. Any market mechanism is supposed to prompt us to do the cheapest things first; that’s the whole point. There are many ways to make electricity with lower carbon emissions than a coal plant; putting a price on carbon makes those alternatives cheaper relative to coal. There are also many ways to promote energy efficiency, incrementally reducing electricity use.
For most Americans, on the other hand, there is only one way to make transportation, and it runs on oil. In the short run, with all of us driving the cars we now own, there is very little chance to change our gasoline use. In the closing words of one of the best satirical videos about the oil spill, “BP: you’re not mad enough to not drive your car.”
Full textCross-posted from Triple Crisis.
Despite talk of a moratorium, the Interior Department’s Minerals and Management Service is still granting waivers from environmental review for oil drilling in the Gulf of Mexico, including wells in very deep water. Until last month, most of us never thought about the risk that one of those huge offshore rigs would explode in flames and then sink, causing oil to gush out uncontrollably and befoul the oceans. The odds seemed low, and still do: Aren’t there lots of drilling rigs in use, year after year? Twenty years ago, your elected representatives thought that you’d be happy to have them adopt a very low cap on industry’s liability for oil spill damages.
Nuclear power was never quite free of fears; it was too clearly a spin-off of nuclear weapons to ignore the risk of a very big bang. Yet as its advocates point out, we have had hundreds of reactor-years of experience, with only a few accidents. (And someday when Nevada’s politicians aren’t looking, maybe we can slip all of our nuclear waste into a cave in the desert.) Again, the risks are so low that you’d be happy to learn about a law limiting industry’s liability for accidents, wouldn’t you?
Environmentalists have long warned that the world could run out of energy and resources, from the “limits to growth” theories of the 1970s to the more recently popular notion of “peak oil.” The response from economists has been that prices for energy and raw materials are still moderate, and declined over the course of the 20th century; if we are running out of something, why doesn’t its price skyrocket?
Full textBjorn Lomborg has seen the future of climate policy, and it doesn’t work. In his opinion, featured Friday in the Washington Post, a binding treaty to reduce carbon emissions – the goal that was pursued unsuccessfully at the Copenhagen conference in December – would have done more harm than good. Reducing emissions enough to stabilize the temperature would have astronomical costs, according to Lomborg, while the benefits would be small.
This is par for the course for Lomborg, a Danish political scientist who has gained international notoriety for his repeated attacks on environmental protection. His source for his climate policy skepticism is a very selective reading of economics, described grandly and inaccurately as what all economists think. For instance, do “all the major climate economic models” agree on a specific, extreme forecast of carbon taxes, as asserted by Lomborg? Not a chance; major models tend to disagree somewhat about such forecasts, and there is no consensus around anything like Lomborg’s claim. Do “most mainstream calculations” agree that global climate damages will be less than $1 trillion per year (a fraction of one percent of global output) by the end of the century, as he also alleges? Again, not even close.
Full textOnce upon a time, EPA and other agencies labored under the yoke of a cruel regime that was contemptuous of the “reality-based community,” but intimately aware of the needs and desires of the energy industry. Climate policy didn’t really happen in those days. Then the world changed.
In the first year of the new regime, EPA and NHTSA proposed a standard for tailpipe emissions, including an estimate of the “social cost of carbon,” or the value of the incremental damages caused by greenhouse gas emissions. Someone needs to tell the authors of this standard that we are free at last to take climate change seriously; you don’t have to keep censoring yourself, as you may have in the past. And once we start exercising that freedom, we will find that the social cost of carbon is much larger than the EPA/NHTSA estimates, which include values as low as $5 per ton of carbon dioxide.
The analysts who proposed the new standard narrowed their scope at the outset, ducking the tough questions and relying on the most conservative sources – and in some cases, misrepresenting data and references. There are three stages of the analysis, each of them problematic: estimates of climate damages; choice of a discount rate; and near-dismissal of worst-case catastrophic risks. (The following remarks are highlights of comments I submitted to the agencies on the proposed tailpipe emissions standards, which include citations to references and data sources.)
Full textIt must be worthwhile; at least, I keep doing it. Wednesday was the third time in the last eight months that I've testified before a House committee about the costs of inaction on climate change, a topic I study at the Stockholm Environment Institute-US Center, a research institute affiliated with Tufts University in Boston.
The Energy and Commerce Committee launched a week of hearings on the Waxman-Markey bill, the American Clean Energy and Security Act of 2009 ; by one account, they have invited 67 witnesses to testify.
Wednesday was a staggeringly long day, beginning with Cabinet secretaries at 9:30 in the morning, then a panel of USCAP members (an alliance of major corporations and environmental groups, in support of climate legislation), then a panel that was half conservatives and skeptics (guess which party insisted on inviting them), and finally, starting just before 6:00 PM, the panel on green jobs and economic benefits, where I ended up. Full text