Category — Waxman-Markey Climate Bill
The American Clean Energy and Security Act, better known as the Waxman-Markey Climate Bill, has been shown to be completely ineffective at slowing the rise in global temperature that is projected by climate models to accompany mankind’s continued reliance on fossil fuels for energy production. And this, despite the bill’s mandated cut-back of U.S. greenhouse gases emissions by a whopping 83% below 2005’s levels by the year 2050. As the primary purpose of the bill is to mitigate “global warming” and any follow-on impacts, Waxman-Markey, on its own, would seem an abject failure.
If you need any more proof, consider the bill’s effect on projected sea level rise. Recall that the specter of rapid sea level rise is one of the pillars of alarmist claims for impending climate catastrophe and calls for immediate action. But even a full implementation Waxman-Markey would do virtually nothing to slow the projected rate of rise. Using a middle-of-the-road future emissions scenario as a baseline, the emissions reductions that would be mandated in the U.S. under the provisions of the Waxman-Markey bill would result in reducing the sea level rise by mid-century by less than 0.1 inches, and the reduction would still be less than 0.5 inches by century’s end.
The Waxman-Markey Climate Bill is equally as ineffective in slowing the projected rate of global sea level rise as it is in slowing the rate of projected global temperature rise.
Waxman-Markey simply is not a climate bill.
July 30, 2009 5 Comments
Some environmental leaders have said that I am naïve to think that there is an alternative to cap-and-trade, and they suggest that I should stick to climate modeling. Their contention is that it is better to pass any bill now and improve it later. Their belief that they, as opposed to the fossil interests, have more effect on the bill’s eventual shape seems to be the pinnacle of naïveté.
- James Hansen, “Strategies to Address Global Warming,” July 2009.
Welcome to the science of politics, Dr. Hansen–and welcome to a tradition in political economy that is more than a century old. “I see no force in modern society which can cope with the power of capital handled by talent,” stated William Graham Summer in 1905, “and I cannot doubt that the greatest force will control the other forces.” And said George Will in our time: “The world is divided between those who do and do not understand that activist, interventionist, regulating, subsidizing government is generally a servant of the strong and entrenched against the weak and aspiring.”
The political hijacking of climate legislation is why the Left is now embarrassingly split on the issue. And just maybe this is the opening wedge to get the Left to reconsider climate alarmism in its wider dimensions. After all, higher energy costs disproportionately affect the poor and slow the drive to mass-electrify the developing world. And the climate crusade is resurrecting (uneconomic) nuclear power–a Left no-no. And geoengineering–that too is an unwanted stepchild of climate exaggeration.
July 22, 2009 5 Comments
“Waxman-Markey … seeks a first in economic history: rationing without scarcity or price inflation. [It] allows generous ‘offsets’ so that carbon-based energy does not, in fact, become scarce. The bill does, however, contain a multitude of new regulations, product-efficiency mandates, and spending programs that will require extensive managerial attention from both the public and private sectors, though to much less effect than promised.”
- Steven F. Hayward and Kenneth P. Green, July 2009
The Waxman-Markey energy bill passed by the House of Representatives is a great illustration of how the government can take an idea that sounds good in theory – emission trading – and turn it into a nightmarish piece of legislation that is larded with pork; perverted by special-interest horse-trading; and will most likely be not only ineffective, but will produce perverse and negative consequences for both the economy and the environment.
As my colleague Steven Hayward and I point out in our most recent AEI Environment and Energy Outlook:
- The Waxman-Markey legislation will do for climate change what Sarbanes-Oxley did for financial regulation: establish a big new bureaucracy that imposes substantial costs on the economy.
- The legislation enumerates six hundred tasks the EPA must perform and gives other agencies significant administrative roles.
- The last time GHG emissions were at the Waxman-Markey target for 2050 was 1910.
- The liberal use of “offsets” in the bill suggests that even if Waxman-Markey works perfectly, fossil fuel emissions will be reduced by no more than 50 percent [versus 83 percent).
- Countries such as Grenada and Belize have per-capita emissions close to the Waxman-Markey 2050 levels.
- The legislation is a giveaway to the people environmentalists claim are destroying the planet.
- Waxman-Markey is unrealistic and will not fix the problem.
Unfortunately, the Senate is using Waxman-Markey as its launching point for crafting their own legislation. As Steve Hayward jokes, given that Waxman-Markey gives away 85% of the emission permits, and given that the Senate hasn’t started its own horse-trading and buy-offs yet, by the time this is all done, the government might give away 150% of the the available permits. But there is nothing funny about a 1,428-page bill that has been likened to an energy road to serfdom.
The devil is in the details, as it is often said. Waxman-Markey’s devil is monstrously big, and it begins qualitatively, not only quantitatively, by setting up the machinery of control that would politicize energy for an open-ended future. Watering down a bad bill is not good enough.
July 20, 2009 2 Comments
“If there is one thing I have been impressed with over the last decades, it is that when the environmental community defines a number one priority, something happens. Not always something good—but something.”1
Dr. Kenneth L. Lay, Chairman, Enron Corporation, June 1997 (1)
Who was the late Ken Lay, the architect and chairman of Enron throughout its 16-year history? All parties to the current legislative debate on a CO2 cap-and-trade bill should know. After all, Lay’s tireless efforts to promote CO2 regulation and enact renewable energy quotas make him a father figure for HR 2354, the Waxman-Markey climate bill, what I have called the Enron Revitalization Act of 2009.
In his lifetime, Lay did not win CO2 regulation, but he got a very damaging renewable energy mandate passed in his home state of Texas. I asked:
How has Texas, which consumer choice made the leading oil and gas state, become the second most politicized energy state in the nation (after California)?
The regulatory spiral can be traced back to Enron, which in 1999 spearheaded a provision in the state electricity restructuring law (Senate Bill 7, signed by governor George W. Bush) establishing a statewide renewable-energy mandate. Enron’s lobbyists had in mind the special interest of Enron Wind Company, which is now part of General Electric.
It was a double win for the politically connected company. First, as the leading power marketer, and with its eyes on becoming the leading electricity retailer as well, Enron coveted mandatory open-access of electricity in the state. Secondly, it needed a big market for its money-losing Enron Wind. Cloaking both corporate-welfare goals in the guise of a renewable mandate got media-worshipped environmental groups on board to help push SB 7 across the finish line.
Whether it was hiring John Palmisano, writing op-ed’s, working with Clinton/Gore, contributing $1 million to Resources for the Future in appreciation of their cap-and-trade work, or a myriad other things, Ken Lay worked a mile a minute to promote CO2 legislation, all to help a variety of Enron profit centers (see below). [Read more →]
July 7, 2009 4 Comments
“This agreement will be good for Enron stock!!”
- John Palmisano, “Implications of the Climate Change Agreement in Kyoto & What Transpired” (1997)
The 219–212 passage of HR 2454 inspires another look at Enron’s infamous “Kyoto memo,” written almost 13 years ago by company lobbyist John Palmisano. Indeed, an Enron memo upon House passage of the Waxman-Markey climate bill would have been similar! Change the dates and some other specifics and the bottom line would be the same–potential gains for Enron’s profit centers in wind, solar, CO2-emissions trading, energy outsourcing, and natural gas.
One can imagine a quotation like this from Enron’s fabled public relations department, hyperbolizing a half-victory into something bigger in the attempt to create a bandwagon effect:
“This historic vote was heard ’round the world,” stated Kenneth L. Lay, chairman of Enron Corp. “Although much work remains before we have new law, HR 2454 signals a new commitment toward clean, green energy, of which Enron is the acknowledged world leader. All of us look forward to working with lawmakers and citizens in this new era of global climate protection.”
Perhaps Al Gore himself would have placed a call to Ken Lay to congratulate the company that did to much so spark the CO2 reduction debate within the industry in the 1980s and 1990s. Indeed, the U.S. Climate Action Partnership (US CAP), a bootleggers-and-Baptists coalition that had much to do with the opening draft of Waxman-Markey, probably had more to do with Ken Lay protégé James Rogers (now chairman of Duke Energy) than any other single person.
July 1, 2009 12 Comments
Houston Chronicle's Loren Steffy on Waxman-Markey (can this straight shooter be added to the newspaper's editorial board?)
The Houston Chronicle editorials have long been a bastion of climate alarmism and policy activism (see here and here), positions that must be so dear to the paper’s senior management (and owners?) that they have created badwill in the Houston community and no doubt a loss of readership.
One could call this courageous and a good thing if this position was well vetted and intellectually sound. A good paper should lead, not only follow, its audience.
But sadly, this is not the case. The case for regulating carbon dioxide (CO2) is quite questionable on purely physical scientific grounds (examine the empirical data; understand the debate over feedback effects regarding climate models). The balance of evidence is certainly not toward the high end of the Intergovernmental Panel on Climate Change (IPCC) temperature range, and it is, in fact, trending at the low end of this range with a decade of temperature quiet. The low end is where the problem not only fades but where little temperature reversal can occur no matter how capped global emissions are.
Given, the scientific debate is complicated, and recent data has been trending away from long-held views of alarmism. But on economic cost/benefit grounds, the case for policy activism falls apart, for leading economists have been unable to justify pricing CO2 via government mandates without assuming perfect knowledge (William Nordhaus’s “environmental pope“) where we have:
- Infallible knowledge about the problem (the “market failure”);
- Infallible knowledge about the solution (what to do policy-wise); and
- Perfect implementation of the solution (no political imperfections, or what is called “government failure”).
And then there comes the political animal called Waxman-Markey, a bill that was called a “monstrosity” by James Hansen at 648 pages–and is now more than double that in size.
So the debate is not only about market failure from unregulated greenhouse gas (GHG) emissions, as the Chronicle editorial board sees it. It is about analytic failure and government failure.
A second look at the paper’s editorial support of Waxman-Markey is called for. This is a bill that hardly resembles what economists and political scientists would call focused, rational public policy, even from a climate activism viewpoint. And a good place to start such a rethinking is with the piece published yesterday by the Chronicle’s ace business columnist/editorialist Loren Steffy. Steffy’s position on energy has clashed with the editorial slant before, and he has once again added a needed perspective in the energy/climate debate for Houston’s newspaper of record.
June 27, 2009 6 Comments
The closer that the Waxman-Markey energy planning bill gets to the floor of the House of Representatives, the more convoluted and intellectually absurd it becomes. The cap-and-trade provision is getting the most attention, but there is so much more that deserves criticism. Jerry Taylor, for example, has exposed the “Clean Energy Bank” provision (buried in Subtitle J) as an open-ended piggybank for uneconomic, politically correct energies.
As I blogged at the Enterprise Blog yesterday, a provision of HR 2454 would forbid EPA to proceed with a ruling about how foreign land-clearing would be taken into account when calculating ethanol’s carbon footprint. Instead, EPA is forced into a 5-year moratorium to ”study” the issue. Amazing, EPA does an endangerment finding in a few months but has to ”study” this single, relatively well-understood issue for 5 years. Now that is science suppression!
There are other perversities of Waxman-Markey. Analysts at the Breakthrough Institute continue to dig into the ramifications of the bill, and keep finding nuggets of madness. As I blogged earlier at MasterResource, they’ve already found that Waxman-Markey isn’t actually a cap as in a maximum from which absolute reductions follow. Emissions are actually allowed to rise through 2030. [Read more →]
June 26, 2009 7 Comments
The battle cry of Joseph Romm at Climate Progress (Center for American Progress) earlier this year was “Obama Can Get a Better Climate Bill in 2010: Here’s How.” But now Romm is in panic mode, trying to convince the rebelling Environmental Left that the out-of-control Waxman-Markey climate change bill (now 1,090 1,201 pages) is the last best hope to save civilization. As Romm stated in a post yesterday:
Waxman-Markey is the only game in town. If it fails, I see no chance whatsoever of stabilizing anywhere near 350 to 450 ppm since serious U.S. action would certainly be off the table for years, the effort to jumpstart the clean energy economy in this country would stall, the international negotiating process would fall apart, and any chance of a deal with China would be dead.
But given that Waxman-Markey is climatically inconsequential, a fact that Romm does not dispute ( “well, duh“, he said), the hard Left is understandably getting restless, even rebelling against the pseudo climate bill. After all, who really wants an Enronesque cap-and-trade bill that enriches lawyers and corporate types at the expense of everyone else? The first comment on Romm’s blog at Climate Progress made this point:
No. I’m sorry, but the first question everyone must ask about Waxman-Markey is “Did we really need more than 600 pages to do legislate what needs to be done and isn’t 600 pages of dense text likely to have hidden in it so many loopholes, exceptions, obscure procedures and contrary regulations and guidelines that no one except a high-powered corporate law firm will be able to make total sense of it (and thus be able to use it to their corporate clients benefit).”
June 23, 2009 10 Comments
Longtime MasterResource readers know of Chip Knappenberger’s post on the negligible climatic effects of unilateral adherence to Waxman-Markey. Across the board, the response from supporters of Waxman-Markey was not to deny Knappenberger’s calculations, but rather to insist that the U.S. had to show leadership. The (perhaps unspoken) premise was that if the whole world adopted the steep emission cuts proposed in Waxman-Markey, then the climatic benefits would clearly outweigh the economic costs.
In an earlier post, I tried to show that this view is simply false. According to the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4)–the very document showing the “consensus” on the physical science basis of manmade climate change–the best estimates of climate change damages do not justify the aggressive limits contained in the current Waxman-Markey bill.
Then in a follow-up post, I documented that a recently released summary paper from Resources for the Future (RFF) reached the same conclusion: Using standard cost/benefit analyses, the peer-reviewed literature cannot justify the aggressive emission cutbacks in Waxman-Markey. In order to justify the bill’s 83% cut (relative to 2005 levels) by 2050, proponents must stipulate that there are climatic tipping points beyond which it is too dangerous to proceed. But the actual expert models of the global economy and climate system cannot themselves spit out these “tipping points” as the efficient policy choices. (In general, many proponents of aggressive government action have repudiated cost/benefit analysis altogether when it comes to climate change policies.)
In the present post, I want to show the contradictions in Paul Krugman’s recent advocacy for Waxman-Markey, and then comment more generally on the implications of a cost/benefit result. [Read more →]
June 17, 2009 3 Comments
Buried within the controversial Waxman-Markey “cap and trade” bill to reduce greenhouse gas emissions (formally known as HR 2454, “The American Clean Energy and Security Act”) – a bill that may well reach the House floor for a vote before the July 4th recess – is another fairly arresting proposal: the creation of a federal “clean energy bank.” The idea (found in subtitle J, addressing “Nuclear and Advanced Technologies”) is to use federal tax dollars to provide subsidies (in particular, direct loans, letters of credit, loan guarantees, and insurance products or other credit enhancements or debt instruments) to private business in order to “promote access to affordable financing for accelerated and widespread deployment” of clean energy, energy infrastructure, energy efficiency, and manufacturing technologies.
The Senate is considering similar legislation in the form of S 949, “The 21st Century Energy Technology and Deployment Act,” but it would go further and also allow indirect subsidies as well, including securitization, indirect credit support, the acquisition or selling of debt or interest in the debt; and secondary market support through lending on the security of debt. That bill will likely be passed by the Senate Energy Committee this week as part of a larger energy bill titled ”The American Clean Energy Leadership Act.” [Read more →]
June 8, 2009 5 Comments