A Free-Market Energy Blog

The Rapidly Melting Case For Carbon Legislation

By Robert Bryce -- February 23, 2010

What a difference 12 months makes. Almost exactly one year ago, the popular, newly minted president, Barack Obama, was telling Congress that he wanted “legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.”

The Democrats, fully confident of their new president and their grip on both houses of Congress, were certain that they could pass yet another big energy bill that would finally push hydrocarbons off their pedestal and replace them with wind turbines, solar panels, and every other type of alternative energy.

An Unstimulated Economy

But a lot has happened since Obama delivered his first State of the Union address. The global economy has continued to show lackluster growth. And perhaps most important: unemployment rates in the U.S. remain stubbornly high and are expected to stay high for at least the next two years. The massive stimulus, in short, has been expensive and unstimulating.

On Sunday, the New York Times reported that “roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments.” The same story, written by Peter S. Goodman, also contained this astonishing fact: Some 6.3 million Americans have “been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s.”

Real estate foreclosures in the U.S. are soaring, with up to 3.5 million homeowners facing the threat of foreclosure this year. And of course, there’s the changing balance of power in Congress. The Democrats’ brief stint with a super majority has ended in the Senate, where a Republican, Scott Brown, now sits in the chair held by the late Ted Kennedy.

Other Problems for Climate Alarmism

Meanwhile, sloppy work has tarnished the reputation of the UN-sanctioned Intergovernmental Panel on Climate Change (IPCC), perhaps irretrievably so. The most dramatic error was that 80% of Himalayan glacier area would very likely melt by 2035. But it is hardly the only one as Chip Knappenberger explained yesterday at MasterResource. And still more errors are coming to light.

Over the past two months, much of Europe and the U.S. has been hit with record-cold temperatures and record amounts of snow. (Supporters of the theory of global warming insist that the record snows are “consistent” with their theory.) And there has been Climategate. Last year, someone hacked into the computers at the Climate Research Unit at the University of East Anglia and released a spate of embarrassing emails that were exchanged among various climate scientists. The emails set off a firestorm of criticism of the scientists and their research methods. The tone and substance of the emails revealed an agenda at work where desired “science” trumped careful, open, respectful scholarship.

Earlier this month, the global-warming alarmists took yet another hit when the BBC published an interview with Phil Jones, the embattled scientist who heads the Climate Research Unit. The BBC’s environmental reporter, Roger Harrabin, asked Jones if he agreed that “from 1995 to the present there has been no statistically-significant global warming.”

Jones responded by saying “Yes, but only just. I also calculated the trend for the period 1995 to 2009. This trend (0.12C per decade) is positive, but not significant at the 95% significance level. The positive trend is quite close to the significance level.”

While that statement is enormously important, another Harrabin question was just as significant. Harrabin asked Jones to comment on the claim that “the debate over climate change is over.” Jones responded:

I don’t believe the vast majority of climate scientists think this. This is not my view. There is still much that needs to be undertaken to reduce uncertainties, not just for the future, but for the instrumental (and especially the paleoclimatic) past as well.

All this has the establishment climate industry rethinking a number of things–even the United Nations’s role in framing the science and negotiating international policy. Stated the New York Times yesterday:

[The Yvo de Boer] resignation does remind us that the U.N. process is tiring, cumbersome and slow. It reinforces the notion that some parallel negotiating track will be necessary if the world is to have any hope of achieving the reductions scientists believe are necessary to avert the worst consequences of climate change.

Denier Talk Backfires

Remember how the pro-global warming theorists have repeatedly trumpeted the claims from the IPCC and others that the scientific proof of global warming was overwhelming and therefore, there was no reason for any further discussion? Given that the science was “settled”, politicians had to act immediately to curb carbon dioxide emissions, in order to avert catastrophic climate change. The fervor around the science, and the belief that the issue was settled, became so common that anyone who doubted the supposed consensus view was branded as a “denier.”

The fervor against the “deniers” was so strong that in 2006, one journalist, David Roberts of Grist, even advocated “war crimes trials for these bastards – some sort of climate Nuremberg.” (Shortly after his piece was published, Roberts retracted his statement.) The denunciations of the “deniers” continued after Al Gore and the IPCC won the Nobel Peace Prize in 2007 and they continue to this day.

Last month, Rolling Stone magazine published a list of “the 17 polluters and deniers who are derailing efforts to curb global warming.” The article, called, “The Climate Killers” lambasted a range of people — Warren Buffett, Exxon Mobil CEO Rex Tillerson, Oklahoma US Senator James Inhofe, and columnist George Will, among them.

Yet less than six weeks after Rolling Stone published its list of “climate killers” Jones, one of the world’s most prominent climate scientists, told the BBC that

a) there’s been no statistically significant warming of the earth over the past 15 years, and

b) that the science of global warming is not, in fact, settled and that, in his words, “there is still much that needs to be undertaken to reduce uncertainties.”

Defections from U.S. CAP

It’s not clear what effect Jones’ interview has had on U.S. businesses, but it’s interesting to note that just two days after the BBC published its Q&A with Jones, two multinational oil companies – BP and ConocoPhillips –announced that they were dropping out of the U.S. Climate Action Partnership (US CAP). Last week, industrial giant Caterpillar also announced that it was quitting US CAP.

About a year ago, US CAP, a coalition of major corporations and environmental groups, looked to be the odds-on favorite to set the agenda for global warming legislation in Congress. Led largely by Jim Rogers, the loquacious CEO of Duke Energy, US CAP was viewed as a new business model for big industries trying to grapple with the potential consequences of carbon legislation. On February 13, 2009, Rogers, speaking at the CERAWeek conference in Houston, declared “The signposts are clear: we’ll have legislation” on carbon emissions. Four months later, the U.S. House of Representatives narrowly passed the American Clean Energy and Security Act, a 1,428-page monstrosity filled with loopholes and giveaways for favored industries. Perhaps this is what Enron-ex Rogers expected and/or wanted. But could anyone, even the most amoral rent-seeker, have really wanted it? When printed out on standard paper, the 2009 bill (also known as Waxman-Markey or the cap-and-trade bill) stacks nearly 7 inches tall.

But since last June, and particularly since December, when leaders from 192 countries met in Copenhagen for what the Associated Press called “the largest and most important UN climate change conference in history,” the urgency for any type of substantive action on carbon emissions has vanished. Indeed, after two weeks of wrangling in Copenhagen, the result was laughably predictable: no legally binding agreement on any reductions in carbon emissions, only a promise to set targets and an agreement to meet again a year later in Mexico City to discuss all of the same issues one more time.

In announcing their decision to drop out of US CAP, BP and ConocoPhillips made it clear that they were concerned about how pending US climate legislation would affect their refining businesses. Conoco’s CEO, James J. Mulva, said that the pending legislation “left domestic refineries unfairly penalized versus international competition.” Caterpillar said it was dropping out so that it could focus on carbon capture and storage projects. (And more, as Ken Green at MasterResource wrote last week, have quietly bolted the cap-and-trade lobby group.)

Whatever their reasons, the exit of these companies reflects the waning enthusiasm for any type of federal carbon legislation. Senate leaders say they will attempt to pass a different energy bill from that passed by the House last year, one that will tax refineries and put emission limits on heavy industry.

That might happen. But that kind of tax scheme is going to meet huge resistance from industry. And the departure of BP and ConocoPhillips from US CAP appears to indicate that the refining industry – which has been hammered by the recession and slack motor fuel demand – has decided to actively fight such legislation.

The “Inevitable” Was Not and Is Not

In summary, given the ragged state of the economy, persistently high unemployment – indeed, the highest number of unemployed people in modern U.S. history – along with huge numbers of foreclosures, the suddenly much-weaker scientific case for cutting carbon dioxide emissions, and the changing balance of power in Washington, don’t count on any significant carbon emissions legislation out of Congress anytime soon. Democrats and Republicans alike are sensing political peril in any effort that will impose higher energy prices on taxpayers during tough economic times.


Robert Bryce’s fourth book, Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future, will be published in April by PublicAffairs. An earlier version of this article was published at the Energy Tribune, where Bryce serves as managing editor.


  1. Jon Boone  

    For the sake of a better future, let’s hope Robert Bryce’s concluding remarks here prove to be right. As a reinforcing augury, the Colorado legislature two days ago voted overwhelmingly to slap down a resolution backed by the South Metro Denver Chamber of Commerce that would have “encouraged” state employers to add a publicly traded renewable energy company to their employees’ retirement plans: http://www.bizjournals.com/denver/blog/capitol_business/2010/02/south_metro_denver_chamber-led_clean-energy_bill_gets_slapped_down.html.

    The resolution finally died in the House by a margin of 42-21. Here are some of the reasons given:

    Rep. Larry Liston, R-Colorado Springs, a retired investment adviser, said Colorado could open itself to lawsuits from investors who put money behind renewable-energy companies, feeling they had the state’s seal of approval, if the funds tanked. Many of these companies have very limited financial track records and would be considered highly risky purchases in the financial world, he argued.

    Rep. Marsha Looper, R-Calhan, said Vestas Wind Systems, the Danish wind-turbine manufacturer with a Windsor plant, was trading at $130 a share 18 months ago but $59 a share at the start of today. Had the state passed this resolution 18 months ago and local companies invested in Vestas, their employees would be the ones hurt, she said.

    On the Republican side, the feeling is that the promotion of renewable energy “is not a great thing.”


  2. Richard W. Fulmer  

    Disraeli was mistaken. There are four kinds of lies, not just three. In addition to lies, damned lies, and statistics, there is also global warming data.


  3. Subsidy Eye  

    “Democrats and Republicans alike are sensing political peril in any effort that will impose higher energy prices on taxpayers during tough economic times.”

    That is the irony: instead of imposing even a slight increase in taxes on fossil energy, and closing tax loopholes for petroleum and coal producers, Democrats and Republicans alike are much more inclined instead to throw around taxpayer money willy-nilly on their own pet technologies and projects, especially if the beneficiary is a venture capitalist with star-like qualities.


    So, instead of reducing income taxes (taxes on labor) and shifting them onto environmental externalities (if you don’t believe in CO2 as an externality, there are plenty others that are real), we simply get more wasteful pork, dressed up in the flag and promoted as job-creating.

    Bottom line: Congress has figured out that new taxes are anathema but new spending on bread and circuses plays well to the crowd. We haven’t learned much in 2000 years.


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  5. Jon Boone  

    The smoke is holy, the mirrors are those from Through a Looking Glass, and the bread and circuses are lead by pious pied pipers to enable stuff that dreams are made of… which, of course, doesn’t have to be real. Thanks for your insightful comment, Subsidy Eye.


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