The Silence is Broken…
We have previously remarked on the curious fact that global warming did not even rate a mention during the presidential debates, a first since the AGW hysteria began to gather steam in the early 1980's.
Something many readers may not be aware of: the first politician propagating the AGW theory and putting her weight behind it was actually Margaret Thatcher. At the time the theory was still in its infancy, some unknown climate tinkerer in Scandinavia had come up with it. Thatcher saw it as a gift that could help her in her struggle against Arthur Scargill and the UK coal mining unions. By portraying coal as a contributor to a dangerous climate trend, Scargill would lose the public's sympathies – this is how her calculation presumably went. We wonder if she had been so enthusiastic had she known what would become of this particular propaganda exercise. It sure has taken on a life of its own.
Anyway, now that president Obama has been reelected, he has suddenly 'rediscovered' the topic of climate change.
Many politicians love the almost endless possibilities it offers to tax and regulate businesses and consumers alike. After all, who can possibly be against contributing a little something to save us from certain disaster? As you will see below, big business loves it too. The new taxes and regulations are yet another obstacle standing in the way of upstart competitors. Consumers and society as a whole are losing out, economic progress stalls, but rent seekers all over the show are growing fat and happy.
What 'We' Allegedly Want…
As Ezra Klein reports on the president's climate agenda in the Washington Post:
„We want our kids to grow up in an America… that isn’t threatened by the destructive power of a warming planet.” That was the president in his acceptance speech Tuesday night. Now that Obama has won reelection, apparently, he feels free to talk about climate change — a topic notably absent during the campaign. Now what does he actually plan to do about it?
An Obama second term could have fairly significant implications for energy and climate policy. Many of the bigger initiatives from his first term now won’t likely be repealed, from strict fuel-economy standards on automobiles to regulations on coal-fired power plants. And those could all have a modest effect on the America’s oil use, its energy mix — and ultimately its heat-trapping carbon emissions. Yet doing anything bigger on climate change will likely require working with a Republican Congress.“
We would comment here that what 'we' really don't want is for our kids to grow up in a cooling world. Now that would certainly be a disaster of major proportions. However, there is nothing we could do about it. It seems actually highly likely that the world will eventually cool down again, as it has done regularly and repeatedly in the past following periods of warming. It also seems pretty certain that an if the planet were to cool down by eight degrees Celsius or even more as has happened in the distant past, it won't be able to support seven billion plus people. Unless, that is, if capital accumulation has progressed to the point that all food can be profitably grown in greenhouses and everybody has a nicely insulated abode to live in. This is one of the reasons why one must be so careful about implementing policies that are certain to retard economic growth and capital accumulation.
The list of Obama's likely climate related initiatives Klein supplies in his article unfortunately indicates that the implementation of such policies is precisely what is going to happen.
Fuel Economy Standards
„Stricter fuel-economy standards are here to stay.´In his acceptance speech, Obama promised to work with Congress on “freeing ourselves from foreign oil.” Yet his most ambitious move on this front won’t require Congress at all. His administration has already set new rules requiring new passenger vehicles sold in the United States to average 54.5 miles per gallon by 2025, up from 29 miles per gallon today.“
It should be pointed out here that every single president since the 1970's has promised to 'free us from the dependence on foreign oil'. This is simply economic nonsense. If oil can be produced competitively elsewhere, why should one not buy it? As it were, market forces and human ingenuity are already at work to reverse the decline in domestic US oil output, which has been rising quite strongly of late – in fact, it has reached an 18 year high. And no, the government did 'not build that'.
Daily US oil production in 1,000ds of bbl. – rising strongly to an 18 year high – click for better resolution.
Monthly domestic US crude oil production – click for better resolution.
As the “Post Libertarian” blog wrote on the fuel efficiency standards and the way they were sold to the public (the entire post is well worth reading as it were):
“The Corporate Average Fuel Economy (CAFE) program always felt like an amusingly bureaucratic invention to me. First you have to quantify “average miles per gallon” for a single vehicle that varies significantly by highway or city and various driving conditions. Then you have to quantify that average across an entire manufacturer’s fleet (is it by number of vehicles sold? is it by number of models?). Additionally, a mandate based on miles per gallon is built on an assumption that the MPG is fairly constant regardless of trip length, but hybrid and electric vehicles break that assumption. Now you have to forcibly quantify into your old system a vehicle that uses no gas for X miles and then either uses Y mpg after that or can’t go anywhere at all. Finally, once you assume you can quantify everything satisfactorily, you build a new assumption that future technology will be able to meet an arbitrary number sometime in the future.
Another suspicious aspect about the mandates is that most of the major auto manufacturers “.” Industry support for regulation is often used as proof that the regulation is good, but if you’re familiar with economics you know that established big businesses tend to support regulation because it increases costs they can handle while raising barriers to entry that protect them from new competition, which ultimately hurts consumers with higher costs and less innovation.
They say these mandates are supported by 13 manufacturers that make up 90% of the market, and there’s still plenty of competition between them, but I don’t understand the alleged reason for manufacturer support: it gives them “the certainty they need to make manufacturing plans far into the future.” If consumers already want better mileage, and they think they can handle it, why do they need a mandate to do it? Why don’t they just supply it already? It’s supposed to be a win for consumers because now they’ll get better gas mileage, but the whole thing feels to me like a bizarro paradigm where The White House sets the Reality of What Is Possible To Make. Consumers can’t demand and manufacturers can’t supply better cars until the Voice of the Executive Branch speaks, but once it speaks, suddenly it’s possible for more efficient vehicles to roll off the assembly lines. (Why doesn’t the Voice speak an even higher number?)”
EPA Regulation of Coal Plants
Klein informs us further:
“The Environmental Protection Agency’s existing rules on coal plants will survive. In Obama’s first term, the EPA set strict limits on mercury pollution from coal-fired plants and put an upper limit on the amount of carbon dioxide that could be emitted from any new power plant built in the United States. Combine those EPA rules with cheap natural gas and rising mining costs, and coal is in trouble.”
Coal was already in trouble before these rules were established, as the market found ways to vastly increase the production of natural gas by employing new drilling and extraction methods. Of course natural gas is not going to stay that cheap if coal fired plants are shut down. And it appears the plan is precisely to wage a war on coal that will end with the industry's destruction. It will also cost the economy a fortune and hit numerous poor communities especially hard. According to the non-partisan Manhattan Institute, the cost could amount to $700 billion. Writes the institute:
“On March 27, the EPA proposed what it calls the first “Clean Air Act standard for carbon pollution for new power plants.” The proposal, if enacted, will effectively outlaw the construction of new coal-fired power plants in the United States. It is one of a myriad of rules leading to what some have called the “regulatory death” of domestic coal-fired electricity production. Shortly after the EPA announcement, Democratic Senator Joe Manchin of West Virginia said the move shows that the EPA is engaged “in a war on coal.”
There’s no denying that coal has earned its reputation as a relatively dirty fuel. Generating electricity by burning coal results in higher levels of carbon emissions than does burning oil or natural gas. But the EPA should not prohibit the use of coal based on its carbon dioxide emissions. Doing so ignores modern advances in plant design and construction that have steadily improved air quality. But more to the point, prohibiting coal will increase the cost of producing electricity—a cost which will ultimately be paid by consumers—while doing almost nothing to reduce global carbon-dioxide emissions.
Despite its drawbacks, coal remains a cheap, easily accessed, and abundant domestic fuel source. In other words, there is still a case for coal. The EPA should revisit its proposed ban on new coal-fired power plants. It is bad policy for several reasons:
1.The anti-coal regulatory regime reduces access to a vital source of energy.
2.Electricity producers need to retain a balanced fuel mix. Prohibiting a specific fuel has been tried in the past by regulators.
3.The newest coal plants are clean by traditional EPA measures.
4.Prohibiting construction of new coal-fired generation units won’t do anything to achieve the EPA’s stated purpose of reducing global carbon dioxide emissions.
We would add to this that it isn't even clear to us why carbon dioxide emissions are considered 'bad'. There is plenty of evidence from ice cores that suggests that the link between global warming and carbon dioxide in the atmosphere works exactly the other way around from that claimed by the 'climate consensus'. This is to say, increases of CO2 in the atmosphere appear to follow temperature increases with a considerable lag. A recent paper suggests that this lag effect (which has to do with the release of CO2 from the oceans) is even observable in much smaller time frames, which strongly supports the ice core evidence. One of the most important highlights of said paper is the following point:
But meeting that target depends on a few things. States would have to continue to promote renewable power. California would have to get its cap-and-trade system working. Natural gas would have to stay cheap. And the EPA would have to strengthen its rules on carbon dioxide from power plants and keep the fuel-economy rules in place.”
To these 'few things' (leaving aside for the moment whether reductions in carbon dioxide emissions are even desirable or useful):
Regarding the 'promotion' of renewable power, see our comments on wind energy above. It just makes no economic sense, and very likely therefore also makes no environmental sense. It merely lines the pockets of vested interests. 'Cap-and-trade' is a major boondoggle that has so far been failing spectacularly wherever it has been tried. The artificial 'carbon markets' have collapsed. But the vested interests, represented by professional climate alarmists in most cases, . No wonder there is 'interest' in reviving this mad idea.
'Natural gas would have to stay cheap' – is this some kind of joke? Two paragraphs further above Klein has just explained why it cannot possibly stay cheap if the president and the environmental bureaucracy have their way.
As to 'strengthening the rules on carbon dioxide from power plants', see the discussion above. It can be done, but at great cost to the economy and consumers, especially the poorest strata of society, for whom energy costs represent a very large portion of their income and spending (the authoritarian left rarely mentions such things, so we feel compelled to spell them out).
A Number of Proposals Won't Fly – We Hope
Klein then concludes wistfully:
“Bigger action on climate will require Congress. Obama has signaled at many points that he would be open to more sweeping action to tackle global warming. He has proposed a clean energy standard that would require utilities to get a greater portion of their electricity from renewables. Joseph Aldy, a former White House official, has hinted that Obama would be open to a carbon tax if Republicans were willing to negotiate.
But Obama would have to get those proposals through Congress first. And, after that, he’d then have to revive international climate talks with countries like China and India, which have been flagging of late. We’re still a long, long ways off from a world “that isn’t threatened by the destructive power of a warming planet.” By itself, Obama’s re-election can’t change that.”
Obama would be 'open to a carbon tax'? That sounds almost as though he were reluctantly weighing the pros and cons of such a step. Why not admit that he's practically chomping at the bit to impose one?
Anyway, this final paragraph leaves one with a small modicum of hope that the most radical proposals simply won't fly, as neither the Republican controlled Congress, nor China or India seem overly eager to sacrifice the economy on the altar of climate alarmism. As it were, we have more faith in China and India in that regard than in Congress, where such issues are often decided through the influence wielded by lobbyists.
Meanwhile, we are writing this post from a place that has lately been bitter cold and could really use a good dose of warming. Where the hell is it? Twenty years ago were fervently hoping that we might live to see better (and especially much warmer) weather in these here parts. No such luck so far.
Charts by: AEI and skepticalscience.com
You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.
Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke
6 Responses to “Climate Change is Back on the Agenda”
Most read in the last 20 days:
- Gold - Ready to Spring Another Surprise
Sentiment Extremes Below is an update of a number of interesting data points related to the gold market. Whether “interesting” will become “meaningful” remains to be seen, as most of gold's fundamental drivers aren't yet bullishly aligned. One must keep in mind though that gold is very sensitive with respect to anticipating future developments in market liquidity and the reaction these will elicit from central banks. Often this involves very long lead times. Blackbeard's...
- Modi’s Great Leap Forward
India’s Currency Ban – Part VIII India’s Prime Minister, Narendra Modi, announced on 8th November 2016 that Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes would no longer be legal tender. Linked are Part-I, Part-II, Part-III, Part-IV, Part-V, Part-VI and Part-VII, which provide updates on the demonetization saga and how Modi is acting as a catalyst to hasten the rapid degradation of India and what remains of its institutions. India’s Pride and Joy Indians are...
- Global Recession and Other Visions for 2017
Conjuring Up Visions Today’s a day for considering new hopes, new dreams, and new hallucinations. The New Year is here, after all. Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad. But what else will happen? Image of a recently discarded vision... Image by Michael Del Mundo Here we begin by closing our eyes and slowing our breath. We let our mind...
- The Great El Monte Public Pension Swindle
Nowhere City California There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years. There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island. El Monte, California, is one of those places. Advice dispensed on Interstate...
- A Trade Deal Trump Cannot Improve
Worst in Class BALTIMORE – People can believe whatever they want. But sooner or later, real life intervenes. We just like to see the looks on their faces when it does. By that measure, 2017 may be our best year ever. Rarely have so many people believed so many impossible things. Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for...
- Pope Francis Now International Monetary Guru
Neo-Marxist Pope Francis Argues for Global Central Bank As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated. Neo-Papist transmogrification. We highly recommend the economic thought of one of Francis' storied predecessors, John Paul II, which we have written about on previous occasions. In “A Tale of Two Popes” and...
- Where’s the Outrage?
Blind to Crony Socialism Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous. The liberal press usually misrepresents this as a hypocritical “jobs for the boys” program within the capitalist class. In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid. Believe me. I’ve been on both sides of this kind of dispute (except, of course, for the “failed”...
- Trump’s Trade Catastrophe?
“Trade Cheaters” It is worse than “voodoo economics,” says former Treasury Secretary Larry Summers. It is the “economic equivalent of creationism.” Wait a minute - Larry Summers is wrong about almost everything. Could he be right about this? Larry Summers, the man who is usually wrong about almost everything. As we have always argued, the economy is much safer when he sleeps, so his tendency to fall asleep on all sorts of occasions should definitely be welcomed....
- Money Creation and the Boom-Bust Cycle
A Difference of Opinions In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote: I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud...
- Silver’s Got Fundamentals - Precious Metals Supply-Demand Report
Supply-Demand Fundamentals Improve Noticeably Last week was another short week, due to the New Year holiday. We look forward to getting back to our regularly scheduled market action. Photo via thedailycoin.org The prices of both metals moved up again this week. Something very noticeable is occurring in the supply and demand fundamentals. We will give an update on that, but first, here’s the graph of the metals’ prices. Prices of gold and silver...
- Trump’s Plan to Close the Trade Deficit with China
Rags to Riches Jack Ma is an amiable fellow. Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl. At a moment of peak inspiration, he executed his first search engine request by typing in the word beer. Jack Ma, founder and CEO of Alibaba, China's largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and...
- Side Notes, January 14 - Red Flags Over Goldman Sachs
Red Flags Over Goldman Sachs Just to prove that I am an even-handed insulter, here is a rant about my former employer, Goldman Sachs. The scandal at 1MDB, the Malaysian sovereign wealth fund from which it appears that billions were stolen by politicians all the way up to the Prime Minister, continues to unfold. The main players in the 1MDB scandal. Irony alert: apparently money siphoned off from 1MDB was used to inter alia finance Martin Scorcese's movie “The Wolf of...