TT's Lost in Tokyo — by TokyoTom

An LvMI blogger sent me the following inquiry, which I post here – along with my response – as a public service. 

I note first that I am no climate expert, but someone who doesn`t mind a little scientific or other inquiry.

Question:  “I would like to see your response to this:

http://www.freecapitalists.org/2008/06/09/co2-rise-making-the-earth-greener-more-diverse/” [headline: “CO2 rise making the earth greener, more diverse”]

This link brings me to a wepage that quotes ANOTHER webpage, that finally links to a summary of a science article.  The first link consists of the following:

“According to NASA satellite data:

Over a period of almost two decades, the Earth as a
whole became more bountiful by a whopping 6.2%. About 25% of the
Earth’s vegetated landmass — almost 110 million square kilometres —
enjoyed significant increases and only 7% showed significant declines.
When the satellite data zooms in, it finds that each square metre of
land, on average, now produces almost 500 grams of greenery per year.

[A] 2004 study, and other more recent ones, point to the warming of
the planet and the presence of CO2, a gas indispensable to plant life.
CO2 is nature’s fertilizer, bathing the biota with its life-giving
nutrients. Plants take the carbon from CO2 to bulk themselves up —
carbon is the building block of life — and release the oxygen, which
along with the plants, then sustain animal life. As summarized in a
report last month, released along with a petition signed by 32,000 U.
S. scientists who vouched for the benefits of CO2: “Higher CO2 enables
plants to grow faster and larger and to live in drier climates. Plants
provide food for animals, which are thereby also enhanced. The extent
and diversity of plant and animal life have both increased
substantially during the past half-century.”

“Despite the evidence that cutting CO2 would cause environmental destruction and a net loss of bio-diversity,

Amazingly, although the risks of action are arguably at
least as real as the risks of inaction, Canada and other countries are
rushing into Earth-altering carbon schemes with nary a doubt.

“More.”

My response?:

let me make a few notes about your question (which I may take up in a blog post):
 
– so man’s emissions of CO2 really DO make a noticeable difference!
– what if I liked my land (plants and animals) the way it was before?  Are those who trumpet the expansion of growth right to assume that notions of global utility (and special interests of emitters) prevail over issues of property and individual rights?
– posts like this are easily shown to be unthinking and one-sided.  This may be deliberate in some cases, but also reflects a subconscious desire not to change one’s mind, as can clearly be seen in the unquestioning, eager snapping up of this on the comment thread (to the linked post). So who’s got religion?
– By “easily shown”, note that your link doesn’t go to the science, but to one guy’s analysis of some (as well as to an editorial by someone at Canada’s Financial Post who proudly announces his denialist credentials).  Did you actually bother to look at the science yourself?  To his credit, the guy at Watt’s Up? at least provides a link:  http://www.sciencemag.org/cgi/content/abstract/300/5625/1560.  Click on the link, and it takes you to an article summary that has links to other works that refer to the “CO2 is great” work.  These also show a more complicated picture that futher show how mankind’s mindless mucking is having real effects and presents legitimate cause for concern.
 
One of these, “Drier summers cancel out the CO2 uptake enhancement induced by warmer springs”, states the following:

the CO2 minimum concentration in late summer (an indicator of net growing-season uptake) showed no positive trend since 1994, indicating that lower net CO2 uptake during summer cancelled out the enhanced uptake during spring. Using a recent satellite normalized difference vegetation index data set and climate data, we show that this lower summer uptake is probably the result of hotter and drier summers in both mid and high latitudes, demonstrating that a warming climate does not necessarily lead to higher CO2 growing-season uptake, …
 
The seasonal amplitude of atmospheric CO2 (an indicator of biospheric activity) was observed to have increased over the same
period and was linked to the increase in northern hemisphere photosynthetic activity (1). The trend in extratropical terrestrial
photosynthetic activity has been mainly attributed to an observed warming trend (1). Additional contributions to the trend
include increased precipitation (6), improvement in agricultural practices, and forest regrowth (7). The contributions of CO2
fertilization and nitrogen fertilization to the photosynthetic activity trend were probably small (7, 8), and changes in radiation [cloud cover] were probably only important in the tropics (5).

(emphasis added)

Clicking on the various article summaries takes you to other relevant and interesting summaries (and the full papers, many of which are free).  Since you are actively concerned about this, I imagine that you have already been clicking through these, in order to learn (and consider) as directly as possible, rather than relying solely on the echo chamber of those who insist that man can’t possibly affect GHG levels/ he can, but it can’t possibly have any effect/ it does have an effect, but it’s great!
 
Regards,
 
Tom

Note to readers:  I`m  always happy to help those who profess to love reason to exercise theirs. 

Any more questions out there?

The folly practically speaks for itself. 

Why does Bjorn Lomborg think that governments can better determine worthy investments than private firms?  And that such investments should be borne by ordinary taxpayers rather than those who are generating the externalities that are the basis for his concern?  And why does he think governments around the world will each bear their fair share of such expenditures, instead of free riding?

Lomborg’s policies will simply lead to more politically directed pork (wasted money) while doing nothing to discourage GHG emissions or to encourage private investments in GHG-lite technologies. 

h/t Don Boudreaux, who startlingly calls Lomborg’s post “great good sense”!

(Jim Hansen’ “carbon tax – 100% rebate” proposal (noted in my preceding post) – which is much along the lines of the revenue-neutral carbon tax/income tax rebate that kicks in July 1st in British Columbia – makes much more sense than having the government try to micromanage investments and other private decisionmaking.)

In response to Jim Hansen’s recent expressed desire for “public trials” for fossil fuel executives if, despite being “aware of long-term consequences of continued business as usual,” they continue their “campaigns” “to spread doubt about global warming” in order to “blocked [the] transition to our renewable energy future”, Andy Revkin of the The New York Times has received and posted on the NYT’s “Dot Earth” blog a note from Vic Svec of Peabody Energy, which Revkin notes is the largest private coal producer in the world.

Vic Svec’s note at “Dot Earth” is here.

In response, I posted a few comments to Mr. Svec on the Dot Earth blog thread, which I copy below [with some links added]:

Vic Svec
Senior Vice President, Investor Relations and Corporate Communications
Peabody Energy
(314) 342-7768
[email protected]

Dear Vic:

Nice try with your letter addressing Jim Hansen’s criticism of fossil fuel firms such as yours.

1.  You say that Hansen’s “Holocaust analogies [are] outrageous and demeaning.”

Hansen’s latest criticism of coal and oil firms contains ZERO Holocaust analogies.  So who is it who prefers not to address his actual remarks, but to “cheapen the dialogue and invite ridicule”?

Yes, Hansen did warn last year that rapid climate change may very well threaten the extinction of many species – a claim supported by many prominent biologists – and in that context said that further increases in coal plants could in effect be “death trains … loaded with uncountable irreplaceable species”.  http://www.columbia.edu/~jeh1/2007/IowaCoal_20071105.pdf.  You obviously don’t like his rhetoric, but do you care to explain why either his facts or his imagery are wrong?

2.  “The suggestion that a dissemination of ideas be criminalized –- coming from a government employee no less –- does hearken back to World War II.”

First, what was that you just said about cheapening debate?

Second, Hansen has not said that the speech of any fossil fuel executives should be restricted or criminalized.  Rather, he is making a stronger version of the argument that the British Royal Academy made last year to Exxon, when it sought to clarify if Exxon was going to continue to provide support to groups that deny what EXXON itself has conceded: that human GHG emissions present sufficient worry for public policy action now.

Like Exxon, your firm has publicly acknowledged that concerns about climate change are legitimate and, indeed, that massive investments are needed in new infrastructure to ensure that coal is burned more cleanly and that CCS (carbon capture and storage) technologies are employed (as you note in the projects listed in your item 4).  The only real differences between your firm’s position and Hansen’s is that you think that the government should subsidize your change in business model by (a) having Uncle Sam pay the bulk of capital costs for IGCC (integrated gas combined cycle plant) [something like $1 billion for the first one with CCS] and (b) giving you a further break (reduced royalties) on the sweet deals you already have for stripping coal from public lands, while Hansen proposes a carbon tax (rebated to citizens) to motivate changes in demand and a moratorium on new coal plants until CCS is in place.

While Peabody has every right to conduct its business as it sees fit, so does Hansen have the right to hope that fossil fuel firms will be called to public account for the years of delay that they have purchased, not by openly arguing with the science, but by back door channels/contributions and third-party proxies – tactical activities that are hardly subject to dispute.  THAT, and not open disputes on science or policy, is what Hansen is criticizing.

3.  “Blaming big oil and big coal for the broad array of opinions about climate change is disingenuous.”

Is that at all what Hansen has done, or do you just find strawmen to be irresistible?

“If he would imprison those who don’t march in lockstep with his views, the jails would be very, very big.”

Ahh, here we go with more cheap and shameful metaphors of the very type that you yourself decry, plus another great strawman.  Hansen hasn’t suggested jailing anyone who disagrees with him, as I previously noted.  He’s just castigating the fossil fuel firms for what is rather pedestrian (and undeniable) in the modern world – that powerful economic interests have no qualms about ignoring public and common interests for the sake of private gain, or about employing whatever tool they can to influence government action via both politicians and public opinion.  Hansen, whose views on science you conspicuously refuse to address, is now obviously trying to play the same game of influencing political discourse by putting pressure on you.  As a scientist, Hansen obviously has only a political bark and no formal bite.

Your aim now is simply to discredit the barker, the better to get government subsidies, cheaper coal from the government by lowering royalties, and to continue commercial activities that shift the costs and risks of GHG emissions to others and to the future.  That, of course, is the “serious work” for which Peabody employs you as SVP of Investor Relations and Corporate Communications.

As for the “thousands of scientists and university professors” who have opinions that differ from Hansen’s, I’ll wager that, like Exxon, your scientists tend to agree with Dr. Hansen and that your only connection with any of the other thousands is via funding for PR efforts.  Maybe you could clarify this?

Thanks so much for your sound bites.

[Note to first-time readers: the title is tongue-in-cheek.]

I have previously blogged on libertarian, non-state approaches to climate change; allow me to use this post to pull together for diligent readers various recent sources of opinion and information on carbon taxes – which are much more transparent, easier to implement and, if rebated, are much more likely to both be ethically fairer to citizens (and thus more poltically sustainable) and involve much less pork than cap and trade policy proposals:

–  Dr. James (“PublicTrials”) Hansen – “Carbon Tax and 100% Dividend” proposal (dated June 6, 2008) (be sure to check out his many lucid posts on scientific aspects of climate change as well):

“Carbon tax and 100% dividend” is spurred by the recent “carbon cap” discussion of Peter Barnes and others. Principles must be crystal clear and adhered to rigorously. A tax on coal, oil and gas is simple. It can be collected at the first point of sale within the country or at the last (e.g., at the gas pump), but it can be collected easily and reliably. … The entire carbon tax should be returned to the public, with a monthly deposit to their
bank accounts ….

The worst thing about the present inadequate political approach [cap and trade] is that it will generate public backlash. Taxes will increase, with no apparent benefit. The reaction would likely delay effective emission reductions, so as to practically guarantee that climate would pass tipping points with devastating consequences for nature and humanity.

Carbon tax and 100% dividend, on the contrary, will be a breath of fresh air, a boon and boom for the economy. The tax is progressive, the poorest benefitting most, with profligate energy users forced to pay for their excesses. …

Special interests and their lobbyists … will fight carbon tax and 100% dividend tooth and nail. They want to determine who gets your tax money in the usual Washington way, Congress allocating money program-by-program, substituting their judgment for that of the market place. …  Helping Washington figure out how to spend your money is a very lucrative business.

I note that Hansen has drawn on Peter Barnes, who has long advocated the “Sky Trust” concept, which asserts that citizens are the owners of the atmospheric commons and involves the state in charging and collecting revenues.  Barnes has more recently backed similar proposals, such as Hansen’s “Carbon Tax and 100% Dividend” and the “Cap and Dividend” approach floated last winter by James Royce and Matt Riddle.

Spin analyst George Lakoff has recently examined and compared the moral and cognitive footings of the Warner-Lieberman-style cap and and trade and the Cap and Dividend approaches in “Comparing Climate Proposals: A Case Study in Cognitive Policy”. 

–  Lewis Hay, III, Chairman and CEO of FPL Group, Inc. – speech to the 2008 Florida Summit on Global Climate Change in Miami (June 25, 2008):

[It is] an undeniable reality … that global climate change is real, that human activity is one of the causes, and that we must take action to slow, stop, and reverse the emission of greenhouse gases into the Earth’s atmosphere. …
The United States has been debating climate change at least since the first congressional hearings on the topic were held in the mid-1980s by a little-known Representative from Tennessee named Al Gore. More than 20 years later, it is time for the country to take meaningful action. Every day we delay, another 18 million tons of CO2 are released into the atmosphere, most of which will remain there for close to a century. And with every year of inaction, the carbon reductions needed to deal successfully with climate change become larger and harder to achieve.

There are still a few global warming skeptics left in the world – often big emitters of CO2 – who continue to hope that the science is wrong and advocate taking little or no action toward reducing carbon. They want to keep freely emitting CO2 like there is no tomorrow. We cannot let these people have their way, or there might not be a tomorrow.

So how do we go about reducing the amount of carbon that our economy pumps into the atmosphere? … In the process of producing various goods and services – including electricity – carbon dioxide is released with potentially huge costs on society. But the producers and consumers of goods and services don’t pay those costs. They are external to the transaction, which is to say that society pays them. The goal of public policy toward climate change must be to push those costs back onto the parties responsible for carbon emissions. In short, we must “put a price” on carbon, which will create powerful incentives to emit less of it.

Will that price impose an undue burden on the U.S. economy? The global warming skeptics say yes, but I disagree. If we do nothing to reduce the amount of CO2 pouring into the atmosphere, we are not avoiding the cost. We are simply pushing both the cost associated with the growing consequences of global warming and the future cost of CO2 reductions down the road, onto our children and grandchildren. And if we do take action, I am confident the cost will be far lower than projected. America’s economy is driven by a fierce entrepreneurial spirit. Tell a capitalist there’s money to be made in finding cost-effective CO2 reductions, and watch the market burst with cost-effective solutions.

Now I happen to believe that the simplest and most effective way to start putting a price on carbon is with a continuously escalating fee – or a “tax” as the big carbon emitters like to call it. Under a carbon fee that starts modestly and rises steadily over time, companies will find it more and more expensive to use dirty fuels. And if there’s one way to get the attention of America’s CEOs and their boards of directors, it’s to hit them in the bottom line. Equally important, if there’s one way to get Americans to consume less high-carbon energy, it’s to steadily raise the price of goods and services produced with high-carbon fuels. Eventually, everyone will embrace conservation and switch to low-carbon energy alternatives. …

Under any cap-and-trade program that would give away most of the allowances to emit carbon based on historical emissions, the biggest emitters – the very same companies that have seriously harmed our environment and done nothing to reduce their carbon footprint – could reap unearned windfall profits, just as has happened in parts of Europe. To put it bluntly: They would be paid to pollute, turning cap-and-trade into what I call “cap-and-evade.” …

When carbon carries a cost, power companies will also work a lot harder to clean up their fossil fuel fleets. … Of course, the real gains are to be had by shutting down old, inefficient coal plants across the country. Those dinosaurs, which have operated way beyond their intended useful life, account for more than 480 million tons of the CO2 pumped into the atmosphere every year and should be taken offline. And if carbon is priced appropriately, they will be.

I refuse to believe that we are powerless to change the future. On the contrary, I believe that through commitment, effort and intelligence, we will not only come up with the right policy response to climate change, but that our innovation-driven economy will find the best technological solution to climate change – one that curbs emissions even as it controls costs. Some of us in the electric power industry are ready to lead the charge into a clean energy future. To those who stubbornly cling to a carbon-based past that cannot last, we kindly ask that you step out of the way.

– Keith Crane, senior economist and James Bartis, senior policy researcher at the RAND Corporation, “On Carbon Dioxide, a Better Alternative“ (Washington Post, November 29, 2007):

The only effective way to begin reducing greenhouse gas emissions and slow global climate change is to make it more expensive to emit carbon dioxide. Unless businesses and consumers pay a price for carbon dioxide, neither will make the investments in technology and changes in energy use needed to dramatically reduce emissions.

Most of the climate change legislation currently before Congress proposes a complicated “cap-and-trade” system. This would set a limit on emissions below current levels and then allocate permits to pollute that could be bought and sold. The alternative would be to impose a direct tax on carbon dioxide emissions. …

The attraction of cap and trade for its supporters is that the cap sets a limit on emissions of carbon dioxide. But it’s difficult to get the limit right. The cap may be set too high to induce firms to make the large investments needed to reduce emissions. Or it may be set so low that costs skyrocket and political support to combat climate change falters.

The major disadvantage to cap and trade is that the price tag for reaching the target is highly uncertain. In contrast, a tax on emissions provides businesses and consumers with certainty about costs, while leaving the size of the reduction less certain. …

Instead, we suggest a tax on carbon dioxide in which all the proceeds collected by the government would be returned to Americans each year when they file income taxes. In contrast to current congressional proposals for cap and trade, a tax on carbon dioxide refunded directly to individuals would cut emissions while cushioning the impact on the pocketbooks of American families. ...

A carbon dioxide tax with refund is fair because the people responsible for the most emissions would pay the most. The tax would also be progressive. Many Americans with lower incomes would find the refund would more than defray the higher costs of gasoline and electric power.

A tax is simple and can be phased in quickly. It encourages individuals and businesses to make long-term decisions with confidence, rather than trying to guess what the future price of permits will be. With a tax and refund, consumers would only pay the extra costs associated with carbon abatement measures.

A carbon dioxide tax with refund can be implemented easily. It can be collected at a few key links in the supply chain: refineries, power plants or pipelines. …

A carbon dioxide tax can be easily adjusted as lower-cost means of reducing emissions are tapped and new technologies become available to tackle more difficult sources. The tax could be started low, but with a clear schedule of increases so that individuals, local governments and businesses will begin now to make the changes and investments required to dramatically reduce emissions within 15 years. …

U.S. consumers and industry need to reduce carbon dioxide emissions. A refunded carbon dioxide tax is the best way to achieve reductions. It is simple, good for the planet, and imposes the least additional costs on the American economy as compared to any other policy alternative. Most importantly it can be crafted to ease the burden on families and protect industries from unfair competition in the global marketplace.

–  Ken Cohen, vice-president for public affairs, ExxonMobil – “ExxonMobil’s top executives on climate-change policy” (February 14, 2007):

[T]here are two debates that one can be participating in right now. One is: is climate change real? What is the cause? Call it the blame game or whatever you want. And the other discussion is: what we do about it?

We prefer to be involved in the second discussion, which is what do we do about climate change – what policies make sense to both produce the energy which the world absolutely has to have and do it in a way that starts us on a path to reduce emissions associated with the production and use of energy. …

Some have said for instance that we need to stabilise CO2 emissions at 550 parts per million. But that is more of a political conclusion than a scientific conclusion. It may be that we’ll learn that 550 ppm is not an aggressive enough target. It may be that science will tell us that the target needs to be something lower than 550 ppm. …

So yes, the policies need to be adjusted. Or conversely, it could be that the anthropogenic contribution can be mitigated somehow by sinks or what have you as we learn more. So, what we are trying to convey is: we know enough now to say that we need to be on a path to start addressing anthropogenic emissions. But we also need to keep the science effort going and we need to keep in mind the economic impacts of the policies. …

We are believers in the market system as the most efficient allocator of resources. We believe for example that markets do a much better job of picking winners and losers on the technology side than governments. So we believe that when we design policies we need to harness the power of the market system as best as we can within the policy that we are designing. … We are not saying, ‘laissez-faire’, just let the market operate. …

Politicians know this very well, one of the elements on our first principles is not political attractiveness. You don’t hear much discussion for example about a carbon tax. Yet most economists who look at this issue say that the most effective way to address carbon emissions would be with a carbon tax. …

In fact, from an efficiency standpoint, from spreading the cost of carbon across the economy in an efficient and uniform and predictable way, as a way to maximize the use of markets, as someone who studied economics, yes I think that a carbon tax ought to be looked at with equal force as the other options.

Now, as we said before, the devil is in the details and there are a number of questions. Whether it is going to be a regressive tax? What would the rate of the tax be and making sure you don’t exclude people from it; what is the revenue going to be used for; are we going to take out another regressive tax? Or are we going to take that money and use it for some other purpose? So there are major issues that would need to be addressed, but from an economist’s standpoint and in fact, this is the favored option.

– Ken Green, Steven Hayward and Kevin Hassett of AEI (The American Enterprise Institute for Public Policy Research ), “Climate Change: Caps vs. Taxes” (June 2007):

Most economists believe a carbon tax (a tax on the quantity of CO2 emitted when using energy) would be a superior policy alternative to an emissions-trading regime. In fact, the irony is that there is a broad consensus in favor of a carbon tax everywhere except on Capitol Hill, where the “T word” is anathema. Former vice president Al Gore supports the concept, as does James Connaughton, head of the White House Council on Environmental Quality during the George W. Bush administration. Lester Brown of the Earth Policy Institute supports such an initiative, but so does Paul Anderson, the CEO of Duke Energy. Crossing the two disciplines most relevant to the discussion of climate policy— science and economics—both NASA scientist James Hansen and Harvard University economist N. Gregory Mankiw give the thumbs up to a carbon tax swap.

There are many reasons for preferring a revenue neutral carbon tax regime (in which taxes are placed on the carbon emissions of fuel use, with revenues used to reduce other taxes) to emissions trading. Among them are: [the following are paragraph headings only]:

–        Effectiveness and Efficiency
–        Incentive Creation
–        Less Corruption
–        Elimination of Superfluous Regulations
–        Price-Stabilization 
–        Adjustability and Certainty
–        Preexisting Collection Mechanisms
–        Keeping Revenue In-Country 
–        Mitigation of General Economic Damages

A cap-and-trade approach to controlling GHG emissions would be highly problematic. A lack of international binding authority would render enforcement nearly impossible, while the incentives for cheating would be extremely high. The upfront costs of creating institutions to administer trading are significant and likely to produce entrenched bureaucracies that clamor for ever-tighter controls on carbon emissions. …

A program of carbon-centered tax reform, by contrast, lacks most of the negative attributes of cap-and-trade, and could convey significant benefits unrelated to GHG reductions or avoidance of potential climate harms, making this a no-regrets policy. A tax swap would create economy-wide incentives for energy efficiency and lower carbon energy, and by raising the price of energy would also reduce energy use. At the same time, revenues generated would allow the mitigation of the economic impact of higher energy prices, both on the general economy and on the lower-income earners who might be disproportionately affected by such a change. Carbon taxes would be more difficult to avoid, and existing institutions quite adept at tax collection could step up immediately.  Revenues would remain in-country, removing international incentives for cheating or insincere participation in carbon-reduction programs. Most of these effects would remain beneficial even if science should determine that reducing GHG emissions has only a negligible effect on mitigating global warming. …

Coal-based energy prices would be affected more strongly, which is to be expected in any plan genuinely intended to reduce GHG emissions. A number of possible mechanisms are available to refund the revenues raised by this tax. On net, these tools could significantly reduce the economic costs of the tax and quite possibly provide economic benefits.

– Margo Thorning, Senior Vice President and Chief Economist at the American Council for Capital Formation (November 1, 2007 interview on E&E TV):

Margo Thorning: I think Senator Lieberman and Warner are to be commended for their efforts to reduce greenhouse gas emissions, because I think we’re all united that that’s a goal we need to put a lot of resources into. …

Q: One of the bill’s ideas is to set up a financial board of sorts that would oversee the new greenhouse gas market. What’s your take on setting up a board of regulators?

Margo Thorning: I think the idea of expecting regulators to know what the price of carbon should be is probably not very well grounded. It does serve as a backstop in that I assume if prices got so high that producers and households were experiencing severe economic pain they could say, well, just go ahead and emit. But it creates uncertainty, because for someone trying to invest in new equipment, if they don’t know what the price of carbon will be, that adds to the risk of the investment. That’s the problem with a cap-and-trade system and that’s what’s happening in Europe. Investors don’t know what the price of carbon will be from one month to the next or one year to the next and it’s been very volatile. So that makes the cost of capital higher, investment more uncertain, and produces less investment. An advantage of a carbon tax, if you want to impose some sort of penalty on carbon use, is that an investor knows, given the projected say set of increases in carbon prices from one year to the next, he knows what the carbon price will be and he can factor that in to what kind of capital equipment he buys, what sort of transport fleet he puts in place, and it provides more certainty. And it also, a carbon tax, provides a stream of revenue for the government to spend on new technology or to pay for offsetting the burden on low income individuals of higher energy prrevenue-neutralices.

Q:So, if you were given the opportunity to sort of write your own proposal of how the U.S. should reduce emissions and not hurt itself economically, you’d go with the carbon tax?

Margo Thorning: I would go with the carbon tax and more incentives for new technology development. And I would change the U.S. tax code, because we have the slowest depreciation allowances for new energy investment of 12 countries that we compared recently. We have very high capital costs for new investment because depreciation is so slow and our effective tax rate is very high, because our corporate tax rate is the highest in the industrial world. So our companies are disadvantaged vis-à-vis our trading partners because of our tax system.

Q: So, if a cap and trade is not the way to go as you’re saying, why has the business community come out in support of a cap and trade?

Margo Thorning: Well, a significant portion of the business community would prefer a carbon tax and there’s beginning to be more discussion about that. So I think one reason some in the business community have supported a cap and trade is they expect to make money on it. They’ve maybe made emission reductions or expect to be able to make emission reductions. They expect to be winners. On the other hand, new companies or companies that are expanding that need more credits will be losers. So the winners under a cap-and-trade system, as is for example in Europe, the big electric utilities have been winners because they’ve been able to pass forward to consumers the price of the carbon credit even though they were given those credits by the government. So people who expect to make money on it naturally are supportive.

– major economists:

• Terry Dinan of the Congressional Budget Office’s Microeconomic Studies Division – “Policy Options for Reducing CO2 Emissions” (outside reviewers were Billy Pizer (Resources for the Future) and Martin Weitzman (Harvard)(Feb. 2008):

Given the gradual nature of climate change, the uncertainty that exists about the cost of reducing emissions, and the potential variability of the cost of meeting a particular cap on emissions at different points in time, a tax could offer significant advantages. If policymakers chose to specify a long-term target for cutting emissions, a tax could be set at a rate that could meet that target at a lower cost than a comparable cap. In addition, if policymakers set the tax rate at a level that reflected the expected benefits of reducing a ton of emissions (which would rise over time), a tax would keep the costs of emission reductions in balance with the anticipated benefits, whereas a cap would not. …

CBO draws the following conclusions:
A tax on emissions would be the most efficient incentive-based option for reducing emissions and could be relatively easy to implement. …

Analysts generally conclude that a tax would be a more efficient method of reducing CO2 emissions than an inflexible cap. The efficiency advantage of a tax stems from the contrast between the long-term cumulative nature of climate change and the short-term sensitivity of the cost of emission reductions. Climate change results from the buildup of CO2 in the atmosphere over several decades; emissions in any given year are only a small portion of that total. As a result, limiting climate change would require making substantial reductions in those emissions over many years, but ensuring that any particular limit was met in any particular year would result in little, if any, additional benefit (avoided damage). In contrast, the cost of cutting emissions by a particular amount in a given year could vary significantly depending on a host of factors, including the weather, disruptions in energy markets, the level of economic activity, and the availability of new low-carbon technologies (such as improvements in wind-power technology).

Relative to a cap-and-trade program with prespecified emission limits each year, a steadily rising tax could better accommodate cost fluctuations while simultaneously achieving a long-term target for emissions. Such a tax would provide firms with an incentive to undertake more emission reductions when the cost of doing so was relatively low and allow them to reduce emissions less when the cost of doing so was particularly high. In contrast, an inflexible cap-and-trade program would require that annual caps were met regardless of the cost, thereby failing to take advantage of low-cost opportunities to cut more emissions than were required by the cap and failing to provide firms with leeway in years when costs were higher.

The efficiency advantage of a tax over an inflexible cap depends on how likely it is that actual costs will differ from what policymakers anticipated when they set the level of the cap. Given the uncertainties involved, such differences are likely to be large—and, therefore, analysts generally conclude that the efficiency advantage of a tax is likely to be quite large. Specifically, available research suggests that in the near term, the net benefits (benefits minus costs) of a tax could be roughly five times greater than the net benefits of an inflexible cap. Put another way, a given long-term emission-reduction target could be met by a tax at a fraction of the cost of an inflexible cap-and-trade program. …

Administering an “upstream” tax or cap-and-trade program for CO2 emissions would involve taxing or regulating the suppliers of fossil fuels—such as coal producers, petroleum refiners, and natural gas processors. Compared with a “downstream” design, which would tax or regulate users of fossil fuels, an upstream approach would have two administrative advantages. It would involve regulating a limited number of entities, and it would not require firms to monitor actual emissions. Rather, each firm’s tax payment or allowance requirement could be based on the carbon content of its fuel and the amount it sold.

An upstream tax may be somewhat easier to implement than an upstream cap-and-trade program because many of the entities that would be covered by either policy are already subject to excise taxes. A CO2 tax could build on that existing structure. …

With harmonized taxes, lax monitoring or enforcement by any one country could reduce the incentives for emission reductions in that country. But with linked cap and-trade programs, laxity in one area could undermine the integrity of allowances throughout the entire system. …

A tax would have significantly lower start-up costs than a cap-and-trade program with grandfathering provided that policymakers did not decide to grant exemptions based on historical production or emissions data. Further, implementing a tax would not require the government to set up a process for auctioning allowances.

• CLIMATE CHANGE: Expert Opinion on the Economics of Policy Options to Address Climate Change, US GAO (Government Accounting Office) (May 2008)

• Greg Mankiw, “One Answer to Global Warming: A New Tax” (September 16, 2007) (Mankiw also keeps a list of other economists who are in his pro-tax “Pigou Club”, for which the anti-statist “No Pigou Club” is a useful counter-tonic):

Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan ….

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class.

But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. …
The case for a carbon tax looks even stronger after an examination of the other options on the table. … [T]he history of cap-and-trade systems suggests that the allowances would probably be handed out to power companies and other carbon emitters, which would then be free to use them or sell them at market prices. In this case, the prices of energy products would rise as they would under a carbon tax, but the government would collect no revenue to reduce other taxes and compensate consumers.

The international dimension of the problem also suggests the superiority of a carbon tax over cap-and-trade.

– Robert J. Shapiro, chairman of Sonecon, LLC, “Addressing Climate Change Without Impairing the U.S. Economy: The Economics and Environmental Science of Combining a Carbon-Based Tax and Tax Relief” (June 2008):

This study examines one such approach: Apply a tax or charge to fuels based on their carbon content, at the levels required to reduce emissions sufficiently to move to a path that over time would stabilize GHG concentrations in the atmosphere at sustainable levels; and use most of the revenues to reduce other taxes for people and businesses. This strategy would change the relative price of different forms of energy based on their carbon content, so that people and businesses have strong incentives to shift to alternative and less carbon-intensive fuels, and more energy-efficient technologies. The consequent economic burden on individuals and businesses would be largely offset by reductions in payroll taxes or in their effective burden, increasing the public’s willingness to accept a carbon-based tax.

Our analysis found that this strategy can reduce GHG emissions in the United States to levels consistent with substantially lowering the risks and threats of climate change, without slowing economic growth or reducing gains in people’s incomes to a significant degree, or imposing a regressive burden on low- and moderate-income Americans. …

Many economists support this approach to climate change, because it would directly and predictably raise the relative price of goods and services based on their carbon intensity, and so directly encourage consumers to prefer less carbon-intensive fuels, and products and businesses to adopt or develop less carbon or energy-intensive materials, technologies, production processes and fuels. Economists and governance experts also note that a carbon tax would not create the new price volatilities, administrative burdens, and large opportunities for evasion and fraud that could characterize a cap-and-trade program. By setting a predictable price for carbon emissions, it also creates clear and known incentives to develop and deploy more climate-friendly technologies and fuels.

Critics argue that it would raise costs and prices, and would dampen economic growth. They further note that no one favors higher taxes or the economic distortions they can cause, and consequently voters will resist paying a substantial new tax simply to avert unknown, adverse effects decades from now. We propose to address these shortcomings by returning the revenues from a carbon-based tax to households and businesses through other forms of tax relief, so that economic growth and the incomes of most households would be much less affected.

This carbon-based tax policy design should be preferable economically and politically to top-down regulation or cap-and-trade programs. To begin, traditional regulation and cap-and-trade programs treat a plant or industry’s initial carbon emissions as effectively “free,” up to the point of the regulatory ceiling or cap, while a carbon-based tax extracts a cost for emissions from the first part per million. In addition to the economic costs of introducing new volatility in energy prices, cap-and-trade programs and regulatory caps would impose other administrative and monitoring costs on consumers and businesses that would be generally comparable to a carbon-based tax, only in less obvious ways and in many cases with no additional revenues that could be rebated to offset their effects. … [C]onsumers and businesses also will end up paying the billions of additional dollars required to administer, monitor and enforce a cap and trade or regulatory system. … Moreover, much as voters would likely oppose significant new, climate-related taxes without offsetting tax relief, they will likely resist climate change regulation or a cap-and-trade program when they recognize the actual costs. …

Using the NEMS modeling system, we test the proposition that applying a new tax package on energy sources based on their carbon content, and using 90 percent of the revenues to reduce payroll taxes or their equivalent could bring down projected CO2 emissions to a path that should stabilize their atmospheric concentrations at levels safe for the global climate, and without materially affecting most people’s incomes or the economy’s capacity to grow and create jobs. 

• others, as summarized by The Wall Street Journal(Feb. 9, 2007),

– George Will (as previously blogged)

Prominent climatologist Dr. James Hansen, Director of the NASA Goddard Institute for Space Studies and Adjunct Professor of Earth and Environmental Sciences at Columbia University, who has long been warning of the long-term consequences of man’s essentially uncontrolled experiment with the world’s climate through emissions of GHGs (CO, methane and CFCs), soot and agricultural practices, has recently ramped up his message that urgent action is needed in order to avoid triggering “dangerous” climate change in the form of rising temperatures and an irreversible melting of the Greenland and Antarctic ice caps. 

1.  Hansen has apparently decided that it is time to take the gloves off in a battle that he thinks requires government action, which action he views as having been delayed by fossil fuel firms that have benefitted from (and underwritten efforts to stall movement away from) the status quo.  Accordingly, in order to shift the political balance, Hansen has decided to call not merely for decreases in GHG emissions, but direct leverage against the fossil fuel companies (in an op-ed at the Huffington Post):

Special interests have blocked transition to our renewable energy future. Instead of moving heavily into renewable energies, fossil companies choose to spread doubt about global warming, as tobacco companies discredited the smoking-cancer link. Methods are sophisticated, including disguised funding to shape school textbook discussions.

CEOs of fossil energy companies know what they are doing and are aware of long-term consequences of continued business as usual. In my opinion, these CEOs should be tried for high crimes against humanity and nature. If their campaigns continue and “succeed” in confusing the public, I anticipate testifying against relevant CEOs in future public trials. …

The fossil-industry maintains its stranglehold on Washington via demagoguery, using China and other developing nations as scapegoats to rationalize inaction. In fact, we produced most of the excess carbon in the air today, and it is to our advantage as a nation to move smartly in developing ways to reduce emissions. As with the ozone problem, developing countries can be allowed limited extra time to reduce emissions. They will cooperate: they have much to lose from climate change and much to gain from clean air and reduced dependence on fossil fuels.

(emphasis added)

Is this rhetoric appropriate?  Certainly not, even as the frustration that underlies it is an understandable manifestation of the frustration that is common (and perhaps unavoidable) in politicized fights over the use of government to satisfy one’s preferences over the preferences of others (viz., “rent-seeking”).  Granted, much is at stake (particularly if Hansen’s views of the risks are correct), and my sympathies are with Hansen (I am persuaded that his concerns have merit, and the rent-seeking by fossil fuel firms is undeniable), but such rhetoric is inappropriate as long as it is unsupported by allegations of actual criminal behavior – as opposed to simple frustration that the fossil fuel firms have been effective in lawfully manipulating the political system for their private gain. 

While a libertarian may sanction the use of moral suasion and opprobrium – even civil litigation – to strong-arm one’s opponents, calling for criminal sanctions by the state against those have successfully manipulated politicians and bureaucrats is a step that simply compounds the underlying illness of statist rent-seeking.

One suspects that Dr. Hansen is simply playing a public relations game, and is not serious about the “state trials”, as he has not called for the firms to be muzzled, but rather expressed his opinion and hope that they should some day be held to account for their actions.  Well, Dr. Hansen is certainly entitled to his opinion AND to castigate fossil fuel firms for behaviors that he objects to; while his rhetoric is disturbing, at least he’s only volunteering to be a witness and not prosecutor, judge and jury.

Sadly, differing preferences over how to use resources are inevitably politicized when there are no clear owners of such resources or ownership is socialized through government ownership or regulation.  The fossil fuel companies and their heavy users have clearly been rather adept at manipulating political levers up until now; whether Dr. Hansen’s effort to turn up the heat on them will be effective or simply provides them with more ammo remains to be seen.

2.  On another level, I do think that Hansen’s rhetoric on this is unfortunate, as it is likely to detract from his scientific message, which he elucidates very well in articles, presentations and scientific publications available at his Columbia U. webpage (linked above).  It also draws attention away from his specific policy positions, which have been critical of pork and bureaucratic management of the type presented by the Warner-Lieberman bill.   Hansen has recently expressed strong preference for a simple carbon tax that is fully rebated on a per capita basis, as further noted in the same op-ed (in which Hansen sounds very much like George Will, who also prefers a carbon tax over cap and trade):

Carbon tax on coal, oil and gas is simple, applied at the first point of sale or port of entry. The entire tax must be returned to the public, an equal amount to each adult, a half-share for children. This dividend can be deposited monthly in an individual’s bank account.

Carbon tax with 100 percent dividend is non-regressive. On the contrary, you can bet that low and middle income people will find ways to limit their carbon tax and come out ahead. Profligate energy users will have to pay for their excesses.

Demand for low-carbon high-efficiency products will spur innovation, making our products more competitive on international markets. Carbon emissions will plummet as energy efficiency and renewable energies grow rapidly. Black soot, mercury and other fossil fuel emissions will decline. A brighter, cleaner future, with energy independence, is possible.

Washington likes to spend our tax money line-by-line. Swarms of high-priced lobbyists in alligator shoes help Congress decide where to spend, and in turn the lobbyists’ clients provide “campaign” money.

Hansen’s “tax and 100% dividend” proposal, which he floated earlier this month, is based on Peter Barnes’s “Sky Trust” cap and dividend approach outlined in “Who Owns the Sky: Our Common Assets and the Future of Capitalism” (Island Press, Washington, D.C., 2001) and reviewed here.

3.  Libertarian legal scholar Jonathan Adler cited Hansen’s op-ed at the Volokh Conspiracy blog; I copy below a few comments that I noted in response:

Jon, first, let’s not forget that Hansen is specifically addressing not only oil cos but also the coal firms like Peabody and Massey – firms that are leaving massive messes because either they deal in publicly owned and bureaucratically administered land or because they’ve managed to capture the police, prosecutorial, judicial and political machinery where they operate, as well as the favor of the administration and federal regulators [see my blog post here].

Second, all of his words about public trials notwithstanding, Hansen is obviously waging battle in the courts of public opinion, which is obviously something he has every right to and, far from infringing libertarian principles, seems entirely consistent with them. As Gene Callahan has recently noted,

One way negative externalities can be addressed without turning to state coercion is public censure of individuals or groups widely perceived to be flouting core moral principles or trampling the common good, even if their actions are not technically illegal. Large, private companies and prominent, wealthy individuals are generally quite sensitive to public pressure campaigns.

After all, if libertarians had their way and government stepped out of the roads and regulatory businesses, it’s long been the libertarian position that private actions, including lawsuits against road owners, would lead to voluntary collective actions and large damage suits that would better manage resources by incentivizing reductions in pollution and other externalities. (In this context, there are, of course, private action suits now under way against the major fossil fuel firms for climate change damage; these face obvious hurdles, but a libertarian might wish for success, simply to breathe a little more life into common law remedies and take the pressure off of the demands for state action.)

Libertarians do not, as a matter of principle, object to informal public pressure. It is simply Hansen’s implication that criminal trials are more appropriate than the common law tort mechanism – which is sadly not too well known and admittedly rather withered due to the success in polluters in subverting injunctive remedies and in capturing the resulting regulatory process – that offends.

On the policy end, of course Hansen does have a statist proposal, but it is probably the cleanest one out there: the carbon tax and 100% rebate proposal, which would put all carbon tax revenues back in the pockets of Americans and than cut short alot of the rent-seeking and pork-management efforts now underway. That’s why George Will has recently concluded that a carbon tax is the best approach.

This time it`s David Veksler, with a post on the main LvMI blog, with the title I`ve quoted above.

Why is it that so many Mises commentators flee from reason and prefer a fever-pitched focus on strawmen when it comes to addressing environmental issues?

I copy below my comments on the thread [note:  I’ve added a few links, along with bracketed comments]:

David, I read your post with interest, but came away disappointed, for a number of reasons.

First and foremost, you didn`t identify the “vicious lie” behind the global warming scare.  What`s the lie, what`s vicious about it, and who`s behind it?

Second, even if THERE BE VICIOUS LIARS behind the AGW scare (the monolithic movement of envirofascist/commie/watermelon man-haters), you really haven`t helped me figure out why it`s so important  that we should focus our attention and energies on the vicious liars: 

Do they occupy the entire universe of people who have announced their concern over climate change, man`s likely role in it and what if anything we should do on  a organized basis about it?  Or do they so predominantly provide the driving power and strategy for such concerns that we should simply ignore everyone else as mere puppets of the All Powerful Enviros – that is, all of the prestigious National Academies of Science (East, West and South), other scientific associations, the period internationally reviewed digests of ongoing scientific work regarding climate change, all of the world leaders who have backed study and action for the past twenty years, corporate leaders (including captains of insurance, finance, industry, power and fossil fuels), leaders of established religions, and defense and intelligence heads?

Third, assuming again that there are vicious enviro-liars, you clearly overstate their views on geo-engineering, which run the gamut from reflexive opposition to a nuanced recognition that, given the long-lasting effects of GHGs and the continued ramp up in emissions worldwide, some degree of geo-engineering may be desirable. [Enviro-liars like me have made a number of blog posts on geo-engineering]

Fourth, you paint, without support or discussion, a rosy picture of how cheap and effective geo-engineering is likely to be.  I`m not very well-read in this, but from what I`ve seen, they are not cheap or certain and offer potential negative consequences as well.

Fifth, you ignore the fact that the institutional settings in which geo-engineering will occur are clearly statist.  The firms that have started to explore “ocean fertilization” have done so in the expectation that carbon capture and sequestration efforts would be compensated under incentives created by carbon-trading schemes.  While your tacit approval of use by states of tax dollars to cure problems that our industries have created for us seems hardly libertarian – in the face of adamant opposition to the decades-old arguments (by vicious liars like Stephen Hawking [whom you link to], Joe Stiglitz, Kenneth Arrow, Thomas Schelling, Robert Mendelsohn, William Nordhaus, Martin Weitzman and Gregg Mankiw [many whom I’ve referred to a number of times]) that governments introduce disincentives to GHG releasing activities – it certainly seems rather prevalent.  [In effect – the principled/preferred approach seems to be to let industry transfer costs to others and THEN use government/tax dollars to pay for remediation; that way, politicians can dole out pork twice – first, by looking the other way; then, by regulating in a way that locks in advantages for established firms.]

Dr. Reisman, for example, has thought long and hard and come up with a number of brilliant statist ideas, for which he longs for a good old-fashioned heavy industry-loving left to spearhead, including the following:

“there is a case for considering the possible detonation, on uninhabited land north of 70° latitude, say, of a limited number of hydrogen bombs. … This is certainly something that should be seriously considered by everyone who is concerned with global warming and who also desires to preserve modern industrial civilization and retain and increase its amenities. If there really is any possibility of global warming so great as to cause major disturbances, this kind of solution should be studied and perfected. Atomic testing should be resumed for the purpose of empirically testing its feasibility.”

Sixth, you fail to explain to your readers on the basis of Austrian understandings – from von Mises through Block and Cordato – why we should not take seriously the expressed concerns of the vicious enviro-liars (or others) about AGW.  Are there no problems that arise when property rights are not in place for open-access resources or are not clearly aligned to external costs, or if homesteading and private transactions are not practical?  Or when resources are “owned”, but mismanaged by governments and fought over by rent-seekers in political battles?  In such cases, do Austrian insights tell us to ignore the preferences and frustrations of particular groups of people, in favor of other groups that apparently have done a better job of purchasing political influence? 

Seventh, as a tactical matter, are essays like this the best approach to productively engaging the all-powerful enviro-liars?

Shall we ignore any underlying commons problems simply because we hate the vicious enviro-liars?  Or is it your view that, in hating the enviro-liars, we most effectively resolve commons issues – by clarifying that powerful industries (those few not controlled by enviro-liars, that is) have first dibs on them, and that those with other preferences need to pay off industry (and their political handlers)? [Of so, then have we just clarified the applicable property-rights rules?  Great!  Now citizens and other groups will know how to proceed to with “market” transactions!]

I could go on, but as you can see, I`m simply puzzled and lack your clear views about whom we should hate and what we should do.

Sadly, my confusion seems to be shared by a number of others here, who also seem confused about the principled basis and efficacy of hating enviro-liars, whomever and wherever they may be.

In fact, the responses by others here are almost enough to make a good Austrian wonder whether even the Mises board has been infiltrated and infected by vicious enviro-liars!

You might consider asking the blog administrators to take close note of those who are clear sympathizers of the enviro-liars, and where appropriate to suspend commenting or blogging privileges, such as for particularly vicious and unprincipled man-haters.  Watermelons should be roasted whenever and wherever found, I say!  Enviro-haters, unite! 

Or maybe you`re way ahead of me on that? 

[There’s gotta be a good way, after all, to remove the “stain” of those nasty enviros or to at least to contain the infection threat posed by their evil but insidious views.  Let me know if I can make any further suggestions.]

Regards,

TT

The Warner-Lieberman bill has been withdrawn for consideration by Congress this year – and thank goodness. 

Why do I say that?  A few weeks ago George Will published a column that explains very clearly why we are fortunate that this bill has been put on hold, and why, if any climate change policy is to be adopted by government, a carbon tax is much preferable to cap and trade.  Here are excerpts (with my emphasis added in bold):

If carbon emissions are the planetary menace that the political class suddenly says they are, why not a straightforward tax on fossil fuels based on each fuel’s carbon content? This would have none of the enormous administrative costs of the baroque cap-and-trade regime. And a carbon tax would avoid the uncertainties inseparable from cap-and-trade’s government allocation of emission permits sector by sector, industry by industry. So a carbon tax would be a clear and candid incentive to adopt energy-saving and carbon-minimizing technologies. That is the problem.

A carbon tax would be too clear and candid for political comfort. It would clearly be what cap-and-trade deviously is, a tax, but one with a known cost. Therefore, taxpayers would demand a commensurate reduction of other taxes. Cap-and-trade — government auctioning permits for businesses to continue to do business — is a huge tax hidden in a bureaucratic labyrinth of opaque permit transactions. …

Lieberman guesses that the market value of all permits would be “about $7 trillion by 2050.” Will that staggering sum pay for a $7 trillion reduction of other taxes? Not exactly.

It would go to a Climate Change Credit Corporation, which Lieberman calls “a private-public entity” that, operating outside the budget process, would invest “in many things.” This would be industrial policy, a.k.a. socialism, on a grand scale — government picking winners and losers, all of whom will have powerful incentives to invest in lobbyists to influence government’s thousands of new wealth-allocating decisions.

Lieberman’s legislation also would create a Carbon Market Efficiency Board empowered to “provide allowances and alter demands” in response to “an impact that is much more onerous” than expected. And Lieberman says that if a foreign company selling a product in America “enjoys a price advantage over an American competitor” because the American firm has had to comply with the cap-and-trade regime, “we will impose a fee” on the foreign company “to equalize the price.” Protectionism-masquerading-as-environmentalism will thicken the unsavory entanglement of commercial life and political life.

McCain, who supports Lieberman’s unprecedented expansion of government’s regulatory reach, is the scourge of all lobbyists (other than those employed by his campaign). But cap-and-trade would be a bonanza for K Street, the lobbyists’ habitat, because it would vastly deepen and broaden the upside benefits and downside risks that the government’s choices mean for businesses.

Australian economist John Quiggin (whom I’ve cited previously on climate change costs) has a post up with this title, both at his own blog and at Crooked Timber.  Does anybody care to comment?

My own response to John was as follows:

John, thanks for this piece. As a libertarian who believes that
climate change IS a problem, I share some of your puzzlement and have
done considerable commenting
on this issue. Allow me to offer a few thoughts on various factors at
work in the general libertarian resistance to taking government action
on climate change:

– As Chris Horner noted in your linked
piece, many libertarians see “global warming [as] the bottomless well
of excuses for the relentless growth of Big Government.”  Even those who
agree that is AGW
is a serious problem are worried, for good reason, that government
approaches to climate change will be a train wreck – in other words,
that the government “cure” will be worse than the problem.

–
Libertarians have in general drifted quite far from environmentalists.
Even though they still share a mistrust of big government,
environmentalists generally believe that MORE
government is the answer, while ignoring all of the problems associated
with inefficient bureaucratic management (witness the crashing of many
managed fisheries in the US), the manipulation of such managment to
benefit bureaucratic interests, special interests and insiders
(wildfire fighting budgets, fossil fuel and hard rock mining, etc.) and
the resultant and inescapable politicization of all disputes due to the
absence of private markets. Libertarians see that socialized property
rights regimes can be just as “tragedy of the commons” ruinous as cases
where community or private solutions have not yet developed, and have
concluded that, without privatization, government involvement
inevitably expands. Thus, libertarians often see environmentalists as
simply another group fighting to expand government, and are hostile as
a result.

– Libertarians are as subject to reflexive, partisan
position-taking as any one else. Because they are reflexively opposed
to government action, they find it easier to operate from a position of
skepticism in trying to bat down AGW scientific and economic arguments (and to slam the motives of those arguing that AGW
must be addressed by government) than to open-mindedly review the
evidence. This is a shame( but human), because it blunts the libertarian
message in explaining what libertarians understand very well – that
environmental problems arise when property rights over resources are
not clearly defined or enforceable, and also when governments
(mis)manage resources.

Regards,

Tom

Dedicated libertarian law professor Jonathan Adler and longtime libertarian policy analyst Indur Goklany discuss the above issue at in a Roundtable entitled “Climate Change and Property Rights” hosted by Shikha Dalmia of the Reason Foundation and made available online last week.

[Update:  Ron Bailey discusses the Adler/Goklany debate here.]

As both Jon Adler and Indur Goklany are serious and even-handed, fortunately the discussion includes none of the cheap, sneering dismissals of the moral issues (as “climate welfare” such as I addressed earlier on these pages and more recently on the main blog, where an author dismisses as “absurd” and another poster labels “beautiful propaganda” my suggestion that Lockean views must be seriously considered when addressing claims that the use of the atmosphere should be shared) that tends to be the hallmark of shallow, reflexive and emotional engagement so frequently encountered here at Mises and elsewhere from purported libertarians with respect to climate change and other environmental issues.

Unfortunately, the exchange between Adler and Goklany is far too academic, and neither commentator makes any effort to seize common ground (and climate change concerns) to push for liberalization of agricultural trade or other institutional changes that would (i) materially improve wealth (and ability to adapt to climate change) in poorer nations and (ii) enhance needed mitigation and adaptation efforts at home.

Both Adler and Goklany appear to agree on the fundamental, Lockean-based principles underlying their discussion and would probably agree that, even though the nations that benefit most from climate change (and from the long period of GDP growth when GHG emissions have not been priced) have at least a moral obligation to be concerned about an uncompensated shifting of costs to other (largely poorer) nations, it is nigh impossible to build a legal case mandating compensation. 

I suppose both Adler and Goklany probably also agree that (1) climate change is likely to further bedevil the development problems in poorer nations, which are least capable of adapting to such changes, (2) development problems in such countries is largely related to the failure of governing elites to protect property rights and capital, and (3) traditional development aid has in large measure failed and instead served to benefit well-connected elites from both sides.

I am curious (4) what both Adler and Goklany think about proposals that do not amount to compensation, but recognize the interest that the West has in aiding growth and climate adaptation in the developing world, such as the proposal reported last Friday in Osaka by Treasury secretary Hank Paulson for the Group of 8 industrialized nations to back a special $10 billion fund to help developing countries fight global warming and (5) why they (and other libertarians) do not seem to see that climate change concerns in many way present golden opportunities to urge positive governmental changes, such as greater free trade (and roll back of domestic agricultural subsidies and import restrictions), greater freedom in domestic energy markets, the desirability of allowing accelerated depreciation and lowering capital gains taxes, etc.

Why are libertarians so reluctant to focus on a positive agenda that would actually do some good?

In note that, back in July 2000, Adler proposed a “no regrets” domestic deregulatory agenda when he was associated with CEI: “Greenhouse Policy Without Regrets: A Free Market Approach to the Uncertain Risks of Climate Change“; Jon has subsequently been rather quiet with respect to any specific climate change policy agenda.  Cato has just published an essay by Goklany, “What to Do about Climate Change“, in which Goklany essentially argues that a focus on mitigation (GHG reductions) is a relatively expensive and in effective way to combat climate change or advance well-being (particularly of the world’s most vulnerable populations), as compared with adaption efforts that would reduce vulnerabilities to climate-sensitive problems that could be exacerbated by climate change.

As I have previously noted, there are several libertarians who have recently been urging constructive libertarian approaches to climate change:

• Edwin Dolan, in his Fall 2006 Cato Journal essay, “Global Warming: Rethinking the Market Liberal Position“, analyzes relevant Lockean considerations and cautions that market liberals appear to be hamstringing their own analytic strengths by falling into a reflexive and conservative mind-frames that benefit established economic interests.
• Sheldon Richman of the Foundation for Economic Education also recommends Dolan’s essay and calls for less wishful thinking and greater engagement by libertarians in the December 8, 2006 edition of The Freeman:  The Goal Is Freedom: Global Warming and the Layman.
• Gene Callahan makes a similar warning in his essay “How a Free Society Could Solve Global Warming“, in the October 2007 issue of The Freeman.
• Bruce Yandle, Professor Emeritus at Clemson University, Senior Fellow at PERC (the “free market” environmentalism think tank) and a respected thinker on common-law and free-market approaches to environmental problems, has in PERC’s Spring 2008 report specifically proposed a “A No-Regrets Carbon Reduction Policy“.

I further note that Shikha Dalmia of the Reason Foundation hosted a similar roundtable on climate change policy in October 2006.

Climate change, largely due to human activities, is currently underway, with more very serious – and largely unstoppable changes – expected in the next 25 years, and landowners, communities, farmers, businesses, communities and state and local government should pay attention, anticipate and start adapting!  So says our federal government, sotto voce, after devoting seven years and considerable effort to make sure that the public did NOT get this news and that climate change did not appear on the federal regulatory or legislative agenda.

Under pressure from ongoing climate change and boxed in by laws and a court decision, the ice dam that has blocked the flow of scientific information from the federal government over the past seven years melted this past week, yielding two long-delayed (and partially over-lapping) reports that were released rather quietly – without any prominent mention by the White House or other agency.  How interesting – has climate science finally trumped political expediency (and hidden rent-seeking)?

1.  Most notably, the Bush administration caved to an August 2007 federal court order and published on Thursday, May 29, the “Scientific Assessment of the Effects of Global Change on the United States,” its first (and long overdue) comprehensive national assessment of the impacts of climate change in the U.S.  Despite this report being expressly required by law (the 1990 Global Change Research Act) to be prepared every four years (the last one had been issued in 2000 by the Clinton administration), the Bush administration not only refused to prepare the report (which is intended to give the President, Congresscritters and government agencies a single document to refer to when evaluating climate policy) but has until now done its best to suppress and prevent action on the 2000 assessment.

According to reporting by Bill Blakemore of ABC News, the new assessment:

“Integrat[es] federal research efforts of many agencies and literally thousands of scientists, [and] reports that the global climate disruption now under way is already damaging U.S. water resources, agriculture and wildlife and is expected to keep doing so—often worsening—for “the next few decades and beyond.”

There is no part of the country that escapes some sort of consequence,” said Anthony Janetos, director of the Joint Global Change Institute

Temperatures are expected to continue rising by about 4 to 7 degrees Fahrenheit before the century is out. The report says that in the West grain harvests and vegetable and fruit crops are more likely to fail because of rising temperatures. It also points out that weeds—of concern both to farmers and those who suffer from pollen allergies—are growing more rapidly due to elevated levels of the greenhouse gas carbon dioxide in the air.

“These are consequences for forests in our backyard, for agriculture on which we depend, for the water resources that we depend on, both for agricultural production and household use and manufacturing, that this is the basis of a good quality of life for everybody,” Janetos said.

The report projects a likely increase in frequency and severity of heat waves and other extreme weather events, including storms and floods …. 

It also projects that because of worsening weather and heat the nation’s transportation systems face “significant challenges.” Coastal and river flooding and landslides are hitting roads, rails and ports, and heat spells buckle or soften roads.

Forests in the West, Southwest and Alaska will be assaulted by more frequent forest fires and decimated by insects that no longer die off in winter because winters are generally warmer. In the middle of the country are reports increasing drought.

Janetos warns that these dire effects are already under way, not lurking the future.

“These are things that are happening today. They’re not just things that will happen 30, 40, 50, 100 years from now,” he said. “We wanted to be within the planning horizon that land managers and conservation planners and farmers actually have to deal with.”

 According to Seth Borenstein of the AP:

Andrew Weaver, a Canadian climate scientist who was not involved in the effort called it “a litany of bad news in store for the U.S.”

And Thomas Lovejoy, a biologist who chaired the group of scientists who reviewed the report for the federal government said: “It basically says the America we’ve known we can no longer count on. It’s a pretty dramatic picture of all kinds of change rippling through natural systems across the country. And all of that has implications for people.”

White House associate science director Sharon Hays, in a teleconference with reporters, declined to characterize the findings as bad, but said it is an issue the administration takes seriously. She said the report was comprehensive and “communicates what the scientists are telling us.”

That includes:

– Increased heat deaths and deaths from climate-worsened smog. In Los Angeles alone yearly heat fatalities could increase by more than 1,000 by 2080, and the Midwest and Northeast are most vulnerable to increased heat deaths.

– Worsening water shortages for agriculture and urban users. From California to New York, lack of water will be an issue.

– A need for billions of dollars in more power plants (one major cause of global warming gases) to cool a hotter country.

– More death and damage from wildfires, hurricanes and other natural disasters and extreme weather. In the last three decades, wildfire season in the West has increased by 78 days. [TT:  As I noted on several Mises blog threads last year; e.g., http://blog.mises.org/archives/007345.asp#comment-130290]

– Increased insect infestations and food- and waterborne microbes and diseases. Insect and pathogen outbreaks to the forests are causing $1.5 billion in annual losses.

– “Finally, climate change is very likely to accentuate the disparities already evident in the American health care system,” the report said. “Many of the expected health effects are likely to fall disproportionately on the poor, the elderly, the disabled and the uninsured.”

Rick Piltz, who worked in the administration until 2005 (when he quit to protest the administration’s politicized manipulation of the climate science) and is now Climate Science Watch Director at the non-profit, non-partisan Government Accountability Project (the leading whistle-blower protection organization), commented:

“This report discusses evidence of climate disruption that has been well-understood in the science community and in the government for some time,” said Rick Piltz, Director of the Government Accountability Project’s Climate Science Watch program. “After seven years of denial, disinformation, cover-up, and delay, in its waning months, the Bush administration is finally beginning to allow the publication of reports that acknowledge this scientific reality.”

Piltz further said:

“rather than focusing exclusively on the report and the legalities of its due dates, it would be more illuminating to focus on the seven-plus years of time lost under this administration, starting from early-on when they suppressed official references to and use of the first National Assessment report, shut down all follow-on work, and pulled federal support from the emerging scientist-stakeholder communication networks around the country that were a hallmark of the National Assessment effort. The damage done by the administration’s political decision to disconnect the Climate Change Science Program from effective communication with stakeholders (with the exception of a few niche projects) is not undone by the report issued on May 29, which was drafted internally and without public review or documented stakeholder communication.”

2.  The national assessment was preceded on Tuesday, May 27 by a sector report on the impacts of climate change on agriculture – The effects of climate change on agriculture, land resources, water resources, and biodiversity in the United States, Final Report, Synthesis and Assessment Product 4.3.  This is one of many sector-specific reports by which the administration had intended to dodge the requirement for an overall national assessment.

Juliet Eilperin of the Washington Post reported as follows:

Anthony C. Janetos, director of the Joint Global Change Research Institute of the University of Maryland and the Pacific Northwest National Laboratory, said the document aims to inform federal resource managers and dispel the public’s perception that global warming will not be felt until years from now.

“They imagine all these ecological impacts are in some distant future,” said Janetos, one of the lead authors, who noted that many animals and plants have shifted their migratory and blooming patterns to reflect recent changes in temperature. “They’re not in some distant future. We’re experiencing them now.”

The document concludes that Americans must face the fact that many of these changes are locked in even if the country takes significant steps to cut emissions in the coming decades.

“Climate change is currently impacting the nation’s ecosystems and services in significant ways, and those alterations are very likely to accelerate in the future, in some cases dramatically,” the report says. “Even under the most optimistic CO2 emission scenarios, important changes in sea level, regional and super-regional temperatures and precipitation patterns will have profound effects.” …

In addition, the number and frequency of forest fires and insect outbreaks are “increasing in the interior West, the Southwest, and Alaska,” while “precipitation, stream flow, and stream temperatures are increasing in most of the continental United States” and snowpack is declining in the West.

The Agriculture Department, the study’s lead sponsor, issued a statement yesterday highlighting some of the report’s findings for farmers, noting that the higher temperatures mean that grain and oilseed crops will mature more rapidly but face an increased risk of failure and “will negatively affect livestock.”

The report predicts that some of the nation’s most valued landscapes may change radically in the near future as precipitation and weather patterns continue to shift.

“Management of Western reservoir systems is very likely to become more challenging as runoff patterns continue to change,” it states. “Arid areas are very likely to experience increased erosion and fire risk. In arid ecosystems that have not co-evolved with a fire cycle, the probability of loss of iconic, charismatic megaflora such as Saguaro cacti and Joshua trees will greatly increase.”

According to reporting by Judith Kohler of the AP:

“I think what’s really eye-opening is the depth and breadth of the impacts and consequences going on right now,” said Tony Janetos, a study author and director of the Joint Global Change Research Institute at the University of Maryland.

Scientists produced the report by analyzing research from more than 1,000 publications, rather than conducting new research. It’s part of a federal assessment of global warming for the U.S. Climate Change Science Program, sponsored by 13 federal agencies, led by the Department of Agriculture.

“Just to see it all there like that and to realize the impacts are pervasive right now is a little bit scary,” said Peter Backlund, director of research relations at the National Center for Atmospheric Research in Boulder.

Drought-strained forests in the West and Southeast are easy prey for tree-killing insects like bark beetles. Snow in the Western mountains is melting earlier, making it more difficult for managers overseeing a long-established system of reservoirs and irrigation ditches that serves Western states.

The Southeast doesn’t have the same kind of storage system because rain historically has been more consistent. Current weather disruptions have the region struggling with drought, Janetos said.

Rising carbon dioxide levels are changing the metabolism of grasses and shrubs on range land, decreasing the protein levels in plants eaten by cattle.

Warmer, drier weather is altering the biodiversity of deserts in the Southwest and the high, colder deserts of Nevada, Utah and eastern Washington, said Steve Archer of the University of Arizona. Plants and animals already living in extreme conditions face threats from wildfires and nonnative species, he said.

“These areas historically support a large ranching industry, wildlife habitat,” Archer said. “They are major watersheds and airsheds.”

The scientists said longer growing seasons provided by higher temperatures don’t necessarily translate into bigger crop yields because plants have certain growth patterns.

Their report focuses on the next 25 to 50 years, rather than the next 100 years as other studies have done.

“Sometimes it’s so far out that people just don’t grasp that it’s a problem. This really brings it home,” said Jerry Hatfield, lab director of the National Soil Tilth laboratory in Ames, Iowa.

The World Wildlife Fund has a press release that identifies the following findings of the report of particular concern(from which I have omitted WWF’s legislative proposals):

Climate change is fueling forest fires, creating water scarcity, harming animal habitats, and causing other significant changes throughout the United States that will only worsen as global temperatures increase, concludes a new federal government assessment of current and future climate change impacts.

“The number and frequency of forest fires and insect outbreaks are increasing in the interior West, the Southwest, and Alaska.  Precipitation, streamflow, and stream temperatures are increasing in most of the continental United States.  The western United States is experiencing reduced snowpack and earlier peaks in spring runoff.  The growth of many crops and weeds is being stimulated.  Migration of plant and animal species is changing the composition and structure of arid, polar, aquatic, coastal and other ecosystems.” 

“Climate change is currently impacting the nation’s ecosystems and services in significant ways, and those alterations are very likely to accelerate in the future, in some cases dramatically…..  Even under the most optimistic CO2 emission scenarios, important changes in sea level, regional and super-regional temperatures, and precipitation patterns will have profound effects.”

“Management of water resources will become more challenging.  Increased incidence of disturbances such as forest fires, insect outbreaks, severe storms, and drought will command public attention and place increasing demands on management resources. Ecosystems are likely to be pushed increasingly into alternate states with the possible breakdown of traditional species relationships, such as pollinator/plant and predator/prey interactions, adding additional stresses and potential for system failures. Some agricultural and forest systems may experience near-term productivity increases, but over the long term, many such systems are likely to experience overall decreases in productivity that could result in economic losses, diminished ecosystem services, and the need for new, and in many cases significant, changes to management regimes.”