TT's Lost in Tokyo — by TokyoTom

The Competitive Enterprise Institute and the American Conservative Union have joined with environmental groups such as the Earth Policy Institute and the Environmental Working Group and with meat growers, food processors and others in the “Food Before Fuel” campaign, which on November 18 called on Congress and the incoming Obama Administration to repeal subsidies for ethanol in light of the harmful effects of such subsidies on “the environment, consumers and numerous industries”.   Thankfully, the press release also mentioned that the subsidies are a waste of taxpayers’ money.

This is the type of lobbying that ought to warm the hearts of libertarians of all stripes, even if it means getting into bed with environazis and other more run-of-the-mill rent-seekers.

Choice excerpts from the Food Before Fuel press release follow (emphasis added):

This November marks the 30th anniversary of the first government subsidies for ethanol. These subsidies now total nearly $5 billion annually.  In recent months, a wide number of independent voices have spoken out against ethanol subsidies as a failed policy that does more harm than good. This includes three Nobel Prize winning economists, Joseph Stiglitz, Paul Krugman and Amartya Sen, as well as international institutions such as the IMF, World Bank, the UN, the International Food Policy Research Institute and others. …

Joel Brandenberger, president of the National Turkey Federation commented, “Ethanol has been on the government payroll for 30 years.  After three decades of government policies subsidizing and supporting the ethanol industry, we find ourselves at the end of 2008 with more questions than ever before about the wisdom of this course.”

“On many issues, these groups gathered here today do not see eye to eye.  But we have come together because we all can agree that the government’s subsidization of the corn ethanol industry is a flawed policy that pits rural industries against one another, raises food prices for everyone and has failed to yield promised environmental benefits,” Brandenberger said.

Duane Parde, president of the National Taxpayers Union, was critical of the ethanol industry as a “demonstrative waste of taxpayer money in a time of economic hardship.”

”President-elect Obama and the 111th Congress have an opportunity to protect taxpayers and end business as usual,” Parde said. “We have spent 30 years and billions of taxpayer dollars subsidizing the production of ethanol with little to show for it. Despite the subsidies, ethanol is not competitive in the marketplace and the industry only survives because politicians shovel our money into their pockets. We must end the bailouts and subsidies for industries that are unable or unwilling to stand on their own.”

Craig Cox, Midwest vice president of the Environmental Working Group, said that, “After 30 years of subsidies, ethanol is displacing only 3 percent of the gasoline we use each year, is likely increasing rather than decreasing greenhouse gas emissions, and is threatening our soil,  water and wildlife. Yet ethanol gets $3 out of every $4 of tax credits the federal government gives to all renewable alternatives including wind, solar and geothermal. It is time we direct our tax dollars to renewable alternatives, including biofuels, based on how well they protect our climate, our environment and our energy security.”

Jason Clay, senior vice president for market transformation at the World Wildlife Fund, noted, “In its work with local communities and habitats across the globe, the World Wildlife Fund has seen the negative impacts of the biofuel policy not only on the environment, but on vulnerable populations throughout the world.”

“Biofuels have a role to play in our response to energy independence and climate change, but the rush to produce them has been ill-considered. The United States must set an example to the rest of the world by pursuing sustainable agriculture and energy practices that meet scientifically based environmental performance standards,” Clay said.

Even the New York Times, in a November 17 editorial, has stood up against ethanol subsidies.

We’ll see if Obama and the Dems have the political will to say no to ADM and other ethanol subsidy recipients.  I’m not holding my breath, but am pleased to see such a broad effort nonetheless. 

H/T to David Zetland/Aguanomics.

Kudos to Robert P. Murphy for a new opinion piece dated Novermber 15 in Forbes.com regarding  “The High Costs Of ‘Green Recovery'” . 

The biographical note appended to the piece describes Bob as “a senior economist with the Institute for Energy Research, a nonprofit foundation that applies free-market solutions to energy challenges” – but sadly, Bob’s piece fails (i) to suggest what “free-market solutions” are available for energy challenges, or (ii) to argue why such free-market solutions are actually the best approaches.  While I share Bob’s arguments that a federal “green” jobs program is likely to be counterproductive, I disagree with his generalizations on climate concerns. 

Bob noted the Forbes piece in his blog; I copy my below the comments I made to him there:

Congratulations, Bob, on getting into Forbes, but I must confess that it is a bit of a puzzle that even when you get the bully pulpit you decline to talk about what kinds of actions make sense as energy policy – such as how to improve the energy grid (a centralized push for local utility deregulation, so utilities might have some interest?), how to achieve political consensus on greater exploration (such as royalty checks to citizens), allowing faster depreciation, etc.

It also disappoints that you insist on engaging on climate change issues only from a heavy-handed government redistribution standpoint, while ignoring not only lack of property rights, many parties with differing views of equity, and tragedy of the commons aspects, but also ignoring the obvious superiority of carbon taxes (assuming legislators are going to choose between cap and trade and carbon taxes), which present few opportunities for rent-seeking and can be rebated to reduce the regressive effcts.

Update:  I note that Obama’s campaign energy policy (the “Obama-Biden comprehensive New Energy for America plan“) is here; his slimmed-down outline that describes a plan with the same name is here.

I just lost my prior attempt at this post so forgive the brevity and lack of analysis in this one.

Google is stepping up its activities and announcements (by CEO Eric Schmidt) in the climate change / clean energy / “smart grid” interface, including announcing collaboration with GE (by CEO Jeffrey Immelt) on public policy issues and on the introduction of new technologies and software.

More at the following links:

http://www.dailytech.com/Google+Wants+US+to+Use+100+Percent+Alternative+Energy+by+2030/article12900.htm (September 9)

http://googleblog.blogspot.com/2008/09/partnering-with-ge-on-clean-energy.html (September 17)

http://earth2tech.com/2008/09/17/google-and-ge-join-up-to-tackle-energy-policy-tech/ (September 17)

http://news.bbc.co.uk/go/pr/fr/-/2/hi/technology/7622347.stm (September 18)

http://blog.wired.com/business/2008/09/ge-and-google-a.html (September 18)

Google information:

http://64.233.179.110/blog_resources/google_org_ge_energyfactsheet.pdf (October 1)

http://googleblog.blogspot.com/2008/10/clean-energy-2030.html (October 1)

http://knol.google.com/k/-/-/15x31uzlqeo5n/1# (October 1)

http://www.brandweek.com/bw/content_display/news-and-features/digital/e3i590423ea01a9d368c45c20a42e7c90f5?imw=Y  (October 1)

http://www.goodcleantech.com/2008/10/googles_proposal_to_power_the.php (October 7)

http://www.nytimes.com/2008/10/28/technology/internet/28google.html (October 28)

http://greeninc.blogs.nytimes.com/2008/10/28/googles-energy-ideas-might-emerge-under-open-source-licenses-or-not/ (October 28)

BTW, I note that Lynne Kiesling’s “Knowledge Problem” blog is a good source of information and analysis on “smart” grid issues.

On Friday, November 21, the American Meteorological Society is putting on a seminar at the U.S. Senate entitled “Two Engineering Measures to Reduce Global Warming: Injecting Particles into the Atmosphere and “Clean” Coal”.   The presentations will address the following interesting questions:

• What is geoengineering?
• How might injecting sulfate aerosol particles into the stratosphere result in a temporary planetary cooling?
• Would this be analogous to creating the equivalent of a long-term volcanic eruption?
• Would this be a permanent solution to a global warming or an exercise in buying time to effectively address the root cause of the climate problem?
• What is the logic behind it and what are the mechanics of it?
• What sorts of policies would likely have to be in place in order to engage in such a venture?
• Who decides and who is liable if things go awry?
• Does science inform us of the potential risks and negative impacts of engaging in such a venture?
• Is clean coal and carbon capture and storage one and the same?
• What is meant by the term ‘clean’ in clean coal?
• Does the technology currently exist to produce clean coal on a massive scale and if so, at what cost relative to today’s energy costs. What are the risks of leakage of CO2 from underground storage reservoirs after the fact?
• Who is likely to be liable for leakage?
• How much of a difference would clean coal technology ideally make in mitigating our present climate trajectory?

The moderator will be D. Anthony Socci, AMS Senior Science Fellow,  and the speakers will be:

Alan Robock, Distinguished Professor of Atmospheric Science; Director of the Meteorology Undergraduate Program, and Associate Director, Center for Environmental Prediction, Department of Environmental Sciences, Rutgers University, New Brunswick, NJ  (an IPCC participant)

Dale Simbeck, Vice President and Founding Partner of SFA Pacific, Inc., Technology and Energy Consultants, Mountain View, CA

The announcement of the seminar outlines some answers to the above questions.

It appears that the AMS management still that that climate change is an important concern, and one that is sufficiently pressing that “geoengineering” efforts (which acknowledge the continued rise in atmospheric GHG levels) merit analysis.  It is not clear what Senate committee is sponsoring this seminar.

Is the Progressive Policy Institute signalling an Interest by Obama in making greater use of nuclear power? 

A November 7 press release, the PPI specifically urges in the headline that “Dealing with Nuclear Waste; America Must Emulate France’s Model of Reprocessing Waste into Usable Energy”.

The press release describes the latest in the PPI’s (PPI) Memos to the Next President series, “America’s Nuclear Waste and What to Do with It,” a study by Bill Magwood, Principal of Advanced Energy Strategies, and Mark Ribbing, PPI Director of Policy Development.  The study calls on the next president to “begin investing in options that can reduce and recycle nuclear waste, noting that benefits of nuclear energy are often outweighed by concerns over the waste produced”.

See Pat Buchanan‘s commentary in the November 11issue of CNSNews.com:  http://www.cnsnews.com/public/content/article.aspx?RsrcID=39124.

Buchanan points to the unfair advantages that China has created by devaluating and keeping its currency cheap, thereby favoring and protecting its industry, and growing a large surplus with which it can acquire US assets.  Is the free trade response to this that it doesn’t matter?

Even as he points to what looks like serious issues involving foreign states, Buchanan leaves unaddressed not only the perils of protectionism, but also the ways in which government actions and policies at home – favoring consumption over savings, bubble creating, heavy government borrowing – have fostered the problem that he decries.

According to news reports, the Australian federal government is planning to introduce a costly internet filtering plan that would “make internet censorship compulsory for all Australians” and would block illegal sites and others deemed undesirable by the government, but would be ineffective as it does not cover file-sharing sites.

“Australia’s level of net censorship will put it in the same league as countries including China, Cuba, Iran and North Korea, and the Government will not let users opt out of the proposed national internet filter when it is introduced.”

Critics have said that the Labor government’s plans are stricter than those of Iran:

“Colin Jacobs, chair of the online users’ lobby group Electronic Frontiers Australia said: ‘I’m not exaggerating when I say that this model involves more technical interference in the internet infrastructure than what is attempted in Iran, one of the most repressive and regressive censorship regimes in the world.'”

The Australian government’s plans apparently go far beyond the filtering systems implemented by other Western nations, such as Britain, Sweden, Canada and New Zealand, where participation by ISPs and customers was optional and the filtering was limited in scope.

More discussion here and here.

HT2 David Bruggerman

In June, I made a number of comments to Bob Murphy in response to his blog post entitled, Cap and Trade Is Not a “Market Solution”; Bob declined to respond at that time.

One of my comments was that Bob

(1) … unfairly conclude[s] that, since it will be government that will be implicitly pricing carbon emissions, such pricing “won’t reflect genuine economic scarcity” at all, when Austrian approaches do not deny that lack of property rights will result in economic actors ignoring external costs, but simply indicate the government pricing of resources can only imperfectly reflect economic factors;

Bob Murphy, in comments on his blog, has acknowledged his overstatement:

However, in context, my statements could easily be construed as saying that even in principle, the idea of carbon emissions having anything to do with scarcity was crazy. And that is too strong, so my op ed was misleading on this point.

It’s a minor point, but I appreciate Bob’s acknowledgment.

More here.

The signatories agreed to the following 10 principles:

1. Canada needs to act on climate change now.
2. Any substantive action will involve economic costs.
3. These economic impacts cannot be an excuse for inaction.
4. Pricing carbon is the best approach from an economic perspective.
   1. Pricing allows each business and family to choose the response that is best and most efficient for them.
   2. Pricing induces innovation.
   3. Carbon is almost certainly under-priced right now.
5. Regulation is the most expensive way to meet a given climate change goal.
6. A carbon tax has the advantage of providing certainty in the price of carbon.
7. A cap and trade system provides certainty on the quantity of carbon
   emitted, but not on the price of carbon and can be a highly complex
   policy to implement.
8. Although carbon taxes have
   the most obvious effects on consumers, all carbon reduction policies
   increase the prices individuals face.
9. Price mechanisms can be regressive and our policy should address this.
10. A pricing mechanism can allow other taxes to be reduced and provide an opportunity to improve the tax system.

Too bad they didn’t take any initiative in discussing other helpful policy measures, such as eliminating corporate income taxes (or allowing immediate write-off of new investments), deregulating the power industry and eliminating subsidies for particular technologies.

h/t James Calder