TT's Lost in Tokyo — by TokyoTom

There’s an interesting bit of arm-twisting, self-deception, defensiveness and reluctant position-shifting going on in the libertarian science skeptics crowd, and Penn and Teller seem to be letting the social pressure help clear their minds.

At James Randi‘s gathering of skeptics in Las Vegas last month (The Amazing Meeting 6), apparently both Penn and Teller very reluctantly conceded in response to audience q & a that they now “don’t know” whether or not “global warming is Bull****“, but that they certainly hate Al Gore.

After being mocked and criticized by Sharon Begley (Newsweek science columnist) for “basically saying, don’t bother me with scientific evidence, I’m going to make up my mind about global warming based on my disdain for Al Gore” and for illustrating Begley’s talking point at the meeting that our beliefs are often NOT based on reason (says Begley, “Both Penn and Teller are well-known libertarians and supporters of the libertarian Cato Institute, which has been one of the leaders in spreading doubt about global warming. Which just goes to show, not even the most hard-nosed empiricists and skeptics are immune from the power of emotion to make us believe stupid things.”), Penn Jillette offered up a rather whiny response at the LA Times (in an op-ed defensively titled “Climate change? Once more, ‘I don’t know’; Being honest about not knowing enough of the science to make a judgment isn’t the same as an outright denial”):

During our loose Q&A period this year, someone asked us about global warming, or climate change, or however they’re branding it now. Teller and I were both silent on stage for a bit too long, and then I said I didn’t know.

I elaborated on “I don’t know” quite a bit. I said that Al Gore was so annoying (that’s scientifically provable, right?) that I really wanted to doubt anything he was hyping, but I just didn’t know. I also emphasized that really smart friends, who knew a lot more than me, were convinced of global warming. I ended my long-winded rambling (I most often have a silent partner) very clearly with “I don’t know.” I did that because … I don’t know. Teller chimed in with something about Gore’s selling of “indulgences” being BS, and then said he didn’t know either. Penn & Teller don’t know jack about global warming … next question. …

Is there no ignorance allowed on this one subject? … You can’t turn on the TV without seeing someone hating ourselves for what we’ve done to the planet and preaching the end of the world. Maybe they’re right, but is there no room for “maybe”? There’s a lot of evidence, but global warming encompasses a lot of complicated points: Is it happening? Did we cause it? Is it bad? Can we fix it? Is government-forced conservation the only way to fix it?

To be fair (and it’s always important to be fair when one is being mean-spirited, sanctimonious and self-righteous), “I don’t know” can be a very bad answer when it is disingenuous. You can’t answer “I don’t know if that happened” about the Holocaust.

But the climate of the whole world is more complicated. I’m not a scientist, and I haven’t spent my life studying weather. I’m trying to learn what I can, and while I’m working on it, isn’t it OK to say “I don’t know”?

I mean, at least in front of a bunch of friendly skeptics?

Of course, given the tricks that we play on ourselves, it’s entirely possible that Begley did not accurately capture the gist of Penn and Teller’s remarks, but even if they both said they “don’t know” at TAM6, it’s a lack of knowledge that rather curiously didn’t prevent them from spending the past five years mocking climate change concerns.

Ron Bailey, science correspondent for Reason, another libertarian climate skeptic who prominently changed his mind two years ago, summarizes here, where he quotes from both Begley and Penn.  Bailey both schools and chides Penn, while acknowledging that there is ample room to debate policy:

Is it happening? Did we cause it? Yes, the balance of the evidence is that it is happening. Is it bad? Relative to what? Can we fix it? Maybe. But at what’s the best way to do so? Are immediate deep cuts in greenhouse gas emissions necessary? Some analysts don’t think so. Government-forced conservation? Perhaps there is another way. Skepticism is certainly merited when it comes to proposals that aim to solve global warming.

Finally, is it OK to disdain Al Gore? Sure it is. But even an annoying self-important scold can be right sometimes.

It seems to me that Penn and Teller’s defensiveness clearly signals a shift in their position from broad disagreement with global warming, both on science and on policy, towards conceding the core of the science while focussing on policy.

It’s interesting that apparently that their shift was motivated not by a desire to be right on the science – after all, they have prominently mocked others on climate change without even seriously bothering to address the scientific evidence – but because of pressure from other skeptics who have already changed their own minds.

It’s also interesting that Penn and Teller, who are not known for showing much concern for the feelings of those whom they mock and ridicule, are essentially saying to their fellow skeptics, “hey, this criticism from friends hurts our feelings”.  It’s very interesting that while they talk about their friends they are careful to put Begley at a distance, referring to her as “one of the non-famous, non-groovy, non-scientist speakers” (a nice case of misdirection, since even if Begley is less famous or groovy than Penn and Teller, they certainly aren’t scientists either) and complaining that SHE is the one who is “one is being mean-spirited, sanctimonious and self-righteous”.　Hey, that nerd Sharon Begley is being MEAN to us! they say.

Yep.  So while Penn and Tell grudgingly concede that maybe all of those AGW “religionists” might be onto something, they need to downplay their own change of mind by continuing to disdain Al Gore, and by directing their ire at that b*tch, Sharon Begley.  Not particularly noble, but a change of mind nonetheless.

This may dishearten others who passionately believe that puny man with his fabulous technology and booming numbers can’t possibly influence the Earth’s climate, but I predict that many will find ways to distract themselves from Penn and Teller’s shift, such as by attacking Sharon Begley and the evil MSM.

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?

Perhaps you might care to weigh in on the discussion re: the 1999 eruptions?

 

In particular:

• how much CO2 was released? 
• would any/a significant portion of the CO2 released gone directly to the surface?
• was the release reflected in atmospheric CO2 measurements?
• how high did the debris column likely go?
• would it be possible that any of the heat released would have created a column of hot water significantly light enough to rise to the surface?
• even if not, could such a below surface hot spot have slowed downward heat flux, producing a greater upward heat flux?

 In response, Rob stated:

Tom, we are still trying to figure out how much CO2 was released – not an easy question given that we got to the scene of the crime long after the CO2 was gone. We are also still trying to understand the dynamical aspects of the explosions in terms of what happened in the overlying water column.

We doubt that the events perturbed the overlying pack ice because of the incredible damping from 4 km of water between the volcanoes and the ice. At most we believe the explosive plume reached about halfway through the water column, but there may have been some transient heat flux to the underside of the ice right above the volcanoes.

One thing that is certain, however, is that these events were not capable of causing any significant melt-off on the basin scale. Some have asserted that these events are linked to the diminishing ice cover in the Arctic, and that simply cannot be true.  Wishful thinking, perhaps, but not grounded in scientific fact.

In any case we need to do a lot more work to understand these explosions and their impact on the water column and surrounding seafloor, and the fact they are located in the remote Arctic is a big problem.

Thanks for your interest in my research.

Rob

(emphasis added)

Personal communication; July 2, 2008.

It sounds to me that Rob, while noting that this and other deep sea volcanic activity is CANNOT be responsible for any significant melting of Arctic sea ice, that it might be possible that the massive 1999 eruptions had a “transient” local effect.

[UPDATE:]  In a follow up email, I asked Rob “What do you think happened to the CO2 though – could a substantial portion have bubbled directly to the surface?  I imagine this is a question that you’ll get from others, too.”

Rob responded:

Tom, unfortunately it takes a while to answer these questions. The first step is to estimate the amount of CO2 that was discharged. We are working on that, and I hope to have decent estimates by end of summer. Then we have to try and understand how this CO2 (and other volcanic products) interacts with the overlying water column. …. Our paper last week has touched off a lot of interest inside the scientific community, and I believe it will help stimulate the necessary research. But it will all take time.

I can see how it would be frustrating for the public because it takes a lot longer to answer the key questions than it does to formulate them. Federal funding for this kind of basic research has been stagnant and in many cases declining, which makes it all the harder to advance the field.  One possible positive side effect of all the interest we’ve generated
would be to increase awareness about the need for this kind of research.

Best regards, Rob

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.

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.

I highly recommend that readers view the debate (or the transcript) between the above participants that Reason held last October but has just given renewed prominence at Reasononline and in their July 2008 print edition. 

Ron Bailey is the Science Correspondent at Reason and is the author of ECOSCAM: The False Prophets of Ecological Apocalypse (1993) and the editor of Global Warming and Other Eco-Myths: How the Environmental Movement Uses False Science to Scare Us to Death (2002), Earth Report 2000: Revisiting The True State of The Planet (1999), and The True State of the Planet (The Free Press, 1995).  Remarkably, Ron now shills FOR government policy to address climate change.

Fred L. Smith, Jr. is the President and Founder of the Competitive Enterprise Institute (which published Bailey’s 2002 Global Warming and Other Eco-Myth book).

Lynne Kiesling is an expert on the regulation of electric power generation and distribution, Senior Lecturer in Economics at Northwestern University, and former director of economic policy at the Reason Foundation.

Below I excerpt what I consider the key remarks of each participant:

Lynne Kiesling:

From an economic perspective, the problem of climate change is twofold. First, there are incomplete and uncertain property rights in the air. It’s ludicrous to imagine us each walking around with a bubble over our heads so that we can only breathe and use the privatized air sphere around us. Second, there’s a large number of affected parties … some would argue the entire planet is affected.

When a common-pool resource is shared by millions of diverse individuals, defining the use rights over that resource is really hard and costly. This is the kind of situation in which decentralized market processes have trouble even emerging. In this imperfect world, we’re considering two imperfect alternative policies: a carbon tax and cap and trade.

Our experience with common-pool resources, ranging from agreements to share the team of oxen in the medieval village to the development of the sulfur dioxide acid rain program in the 1990s, tells us that effective policy focuses on reducing transaction costs and better defining property rights so that private parties can engage in mutually beneficial exchange. That’s the logic behind the carbon cap-and-trade policy.

Like all policies in such a complex area, it’s got problems itself. How do you allocate carbon permits? There’s the knowledge problem: How do we know how many carbon permits is the right number? Also, as a policy instrument, it’s prone to political manipulation. Electric utilities are already seriously jockeying to make sure they’re playing a part in getting the rules written and that they’re involved in determining the allocation mechanisms if such a policy comes into place.

Another problem is that unlike with sulfur dioxide, the likely participants are really heterogeneous. When we were dealing with sulfur dioxide, it was mostly large-scale central-generation power plants, a pretty homogeneous bunch.

A carbon tax is also prone to some of these problems, particularly the knowledge problem and the political manipulation problem. The benefits to a permit market that have been shown in other situations are that defining property rights and reducing transaction costs does a better job of taking advantage of diffuse private knowledge. It’s also more likely to induce the process that’s at the foundation of economic growth, which is innovation. So I tend to come down on the side of cap and trade, although it’s not a ringing endorsement. …

Finally, I think most people fail to realize that the abysmal job we do of pricing electricity contributes substantially to our energy use. The only resources that are priced as badly as electricity in our economy are highways and water.

Retail competition and choice for consumers would increase the offering of time-differentiated dynamic pricing, which shifts resource and electricity use across time. Research shows that this promotes conservation and more efficient use of electricity, increases offerings of green power to consumers who want to choose a green power option, and increases the incentives to develop and adopt technologies, such as price-responsive appliances, that enable private individuals to control their own energy use.

So the message from me is this: It’s a complicated, imperfect world, and the policies we can adopt that induce innovation and harness diffuse private knowledge will be the most effective for this long-term problem.

Ronald Bailey:

Before we began this session, Fred Smith asked me would it be all right if he referred to me as a commie symp. …  I stand before you as somebody who’s been reporting and writing on environmental issues for over 20 years. To the extent that I’m known at all, I’ve been known as someone very skeptical of all kinds of environmentalist dooms. My first book was called Ecoscam: The False Prophets of Ecological Apocalypse. It pains me to have concluded, following the scientific data, that one of the dooms is a real problem.

As Lynne very ably pointed out, one of the problems with global warming is that it exists in a commons—that means the atmosphere is very hard to divide up and make into private property.

When you have an environmental commons, we typically have two ways of handling that problem. One is that we privatize it. In many environmental issues, we’re moving in that direction. Fisheries, for example, are being privatized. Forests are being privatized. Water resources can be privatized as well.

The problem with air pollution—and global warming is a form of air pollution—is that I don’t see a good, easy way to privatize it. The transaction costs are too large. And if you can’t privatize it, you have to regulate it. So now the question is: What’s the least bad way to regulate? And that is why I’ve come out in favor of a carbon tax.

As a good libertarian, I thought I would like cap and trade. The problem is I’ve been watching the European attempt to do this, and it’s a complete disaster. The governments, not surprisingly, cheat constantly. Their carbon market collapsed a year ago because the governments allocated more permits for carbon emissions than were necessary to cover what was being emitted, so naturally the price went to zero. And if the Europeans can’t pull this off, how could you expect the world to pull this off?

I understand the diffuse knowledge problem—how markets can and, in fact, do marshal that kind of information in very good ways. The problem is that there’s no baseline for the rest of the world.  …  So I come out in favor of the tax because you have a baseline. You have a way of internationally monitoring that. The baseline is a zero tax and from that, you can build up. You could start the tax low and, as you gain more information about what the atmosphere is likely to do, you could adjust the tax over that time.

For consumers, for inventors, for innovators, a tax offers price stability in a way that the cap-and-trade markets don’t.  …

I, against my values, have decided that this is a problem. I would really like to be persuaded that classical liberalism and markets and so forth have a way of solving this problem. I’m still waiting for Fred’s proposal. I don’t think it can be done voluntarily around the world. The voluntary carbon markets are tiny— … And if you don’t have an economic incentive to participate in those carbon markets, like a tax or like a cap-and-trade permit, most people aren’t going to do it. Why would they? Why would they spend money that they don’t have to spend? …

Basically it would be a globally harmonized tax, but the money would be collected by each country and spent by the governments in each country.  In the ideal world, you would recycle that money by reducing other taxes, so the overall tax level in the country would not increase. What you would be doing is incentivizing people to conserve energy but also incentivizing people to innovate, to find new ways to produce energy that people would want using low-carbon technologies or carbon-sequestering technologies. …

Government does not innovate. So by creating a carbon tax you would encourage private people to marshal the information in response. So carbon tax is a price, to figure out better ways to make energy, low-carbon energy. I don’t know what those energies will be. I’m sure the government doesn’t know either, and I don’t want them wasting the money doing it.

Fred L. Smith:

What’s the best way of addressing whatever risks there are in global warming? Should the risk of catastrophic global warming justify abandoning our general preference for freedom over coercion? Should we free market advocates champion carbon taxes or carbon rationing, some form of suppressing energy use, or should we favor economic liberalization? …

There is evidence that there has been some warming, moderate amounts, but the idea that we’re facing imminent catastrophe has weakened. Our ability to do anything about CO2 increases for the next half-century is now obviously nonexistent. And the tensions we could create by pushing the world into some form of energy rationing, I think, are underestimated. Recall that in World War II, one of the incidents that pushed the war party into power in Japan was an energy boycott on that Asian nation. We are going to do that again with China. It doesn’t make a lot of sense to me.

Shouldn’t we be asking whether the risks of global warming are more or less than the risk of global warming policies?

The costs of energy rationing are not trivial. Energy is what makes it possible to have mobility, to have labor-saving technology, to have lives that are comfortable, to have hope for the future. Energy rationing would lead to slower economic and technological growth, a darker, less human-friendly world. The trillions we’re talking about spending over the next generations on global warming could go to much better causes, could save lives and inspire hopes today.

But we’ve been told—we’ve heard it from Ron, at least—that we must do something. Perhaps. But why must that something be the expansion of state power over our lives? Why do we limit ourselves to taxes or rationing? There are other alternatives out there.

We could do some more R&D. We could mitigate. What about mirrors in space? What about fertilizing the oceans? Those of us who have looked at NASA and so forth are not overly enamored with government’s ability to underwrite those kind of policies, but we should be equally optimistic about government’s attempt to tax in this academic-blackboard economic way.

Resiliency is what we should be talking about. Not whether taxes or quotas are the better way to suppress freedom, but how we can use the global warming concerns to advance an agenda of freedom. How do we find ways of accelerating economic and technological progress? How do we liberalize the economies of the world? How do we expand the institutions of liberty even into the air sheds?

We can free biotechnology. I’m sure Ron and I both agree with that. If the world is hotter, colder, wetter, drier, we’re going to need the ability to modify our crops much more than we have today. Freeing biotechnology from the regulatory straitjacket it’s in today would be a way of doing that.

As Lynne said, we could complete the job of freeing our electricity system, not just for pricing electricity but also for incentivizing the grid to be smarter and more robust so we can free the trapped electricity that sits idle throughout America. Move fire, storm, and other insurance out of the government subsidy range and put it back into the private sector so we can guide people away from living in high-risk areas.

Unilateral free trade. Extend property rights to water. Liberalize energy exploration. Cuba can drill off the coast of Florida; why can’t America? Where is nuclear power? Certainly Al Gore hasn’t mentioned it. Eliminate the corporate income tax. Accelerate the turnover of capital goods and equipment. That would mean a much more efficient world to live in. …

Today, fears about global warming are pushing the world towards disaster. This time the threat is not just to the lamps of Europe but to the lamps of the world. Energy suppression, if it happens, might last for many lifetimes. …

I have one strong procedural difference with both Ron and Lynne on this. The argument is that when you have a common property resource, your choices are either to privatize that resource, move towards institutions of liberty, or politicize it in some enlightened way as Lynne and Ron have talked about. But Ronald Coase said there’s always a third option, that the costs of transaction in that area are much higher than the failure to have transaction in that area and therefore we should allow evolution to proceed and see what creative solutions emerge. That is basically what we should be doing in the global warming area.

Bailey: So, Fred, are you saying that human beings are not clever enough to come up with low-carbon energy?

Smith: I’m saying that technocratic social engineering projects aren’t the best way to free the creative energies of mankind.

Bailey: Unfortunately, Fred, you haven’t shown a path for evolution to this. I’m sorry. I realize that you believe that somehow the invisible hand will take care of a commons problem always, but commons problems are solved by creating property.

Smith: Government.

Bailey: And the government helps create property, defends property. It’s an institution.  It’s not a great institution. Right now all the big emitters are coming to Washington and begging for free permits so they can get tons of money, basically, and extract it from our pockets—which is another reason I don’t like cap-and-trade systems. They want the government to create an asset for them worth hundreds of billions of dollars.

See Ron Bailey’s recent summary of developments about whether it may be possible to buy time on climate change with technological fixes.

Libertarian Iain Murray supports government funding of geo-engineering approaches.  See my previous posts for more on geo-engineering.

More at the NYT’s Dot Earth blog

Possible geo-engineering obviously poses a number of sticky issues regarding government action in this area, including justification, choices of technology and responsibility for possible risks.

At the request of Congress, the General Accounting Office has prepared and recently publicly released a report, “Expert Opinion on Economics of Policy Options to Address Climate Change,” which summarizes the views of leading climate change economists in the U.S. on the cost and benefits of taking national action on climate change and regarding various policy options.

Key items from the transmittal cover letter to Congress include the following:

All of the panelists agreed that the Congress should consider using a market-based mechanism to establish a price on greenhouse gas emissions.

The majority of panelists agreed that the United States should establish a price on greenhouse gas emissions as soon as possible regardless of the extent to which other countries adopt similar policies. At the same time, the majority of panelists said it was at least somewhat important to participate in international negotiations on climate change.

Experts differed on the initial stringency of the market-based mechanism, with 14 of the 18 panelists recommending an initial price between less than $1 and $20 per ton of emissions.

14 of 18 panelists were at least moderately certain that the benefits of their recommended portfolio of actions would outweigh the costs.

To establish a price on emissions, most of the panelists preferred either a tax on emissions or a hybrid policy that incorporates features of both a tax and a cap-and-trade program. A tax would set a fixed price on every ton of emissions, whereas a cap-and-trade program would limit or cap total emissions and establish a market for trading (buying and selling) permits to emit a specific amount of greenhouse gases. Under the cap-and-trade system, the market would determine the price of emissions. A hybrid system differs from a traditional cap-and-trade system in that the government would cap emissions, but could sell additional emissions permits if the permit price rose above a predetermined level.

Panelists identified key strengths and limitations of alternative policy approaches that should be of assistance to the Congress in weighing the potential benefits and costs of different policies for addressing climate change. Many panelists said that a cap-and-trade program would be more effective in achieving a desired level of greenhouse gas emissions because, unlike a tax, it would provide certainty that emissions wouldn’t exceed a certain level. However, some of the panelists also said that taxes would be more cost-effective than a cap-and-trade program because the price of emissions would be certain and not susceptible to market fluctuations. Eight panelists therefore preferred a hybrid approach that incorporates features of both a tax and a cap-and-trade program.

On average, the panelists rated cost effectiveness as the most important criterion for evaluating various policy options.

Finally, panelists said an important strength of using a market-based approach is the ability for the government to raise revenue through a tax or the sale of emissions permits and to use that revenue to offset the adverse effects of the policy.

The introduction contains a brief but useful summary of climate change knowledge and policy action to date in the US and internationally, as well as an extensive bibliography.

Economists consulted in preparing the report include:

Joseph Aldy, Resources for the Future
James Edmonds, Pacific Northwest National Laboratory
Richard Howarth, Dartmouth College
Bruce McCarl, Texas A&M University
Robert Mendelsohn, Yale University
William Nordhaus, Yale University
Sergey Paltsev, Massachusetts Institute of Technology
William Pizer, Resources for the Future
David Popp, Syracuse University
John Reilly, Massachusetts Institute of Technology
Roger Sedjo, Resources for the Future
Kathleen Segerson, University of Connecticut
Brent Sohngen, Ohio State University
Robert Stavins, Harvard University
Richard Tol, Economic and Social Research Institute
Martin Weitzman, Harvard University
Peter Wilcoxen, Syracuse University
Gary Yohe, Wesleyan University