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California Cap-and-Trade Cronyism: James Hansen Weighs In

By Robert Bradley Jr. -- December 21, 2012

“You don’t want [California’s] system with caps, where you have trading, you have derivatives, you have markets that then collapse and don’t actually reduce emissions much. That’s been tried in Europe, and it didn’t do much.”

- James Hansen, quoted in David Baker, “James Hansen Blasts Cap-and-Trade,” San Francisco Chronicle, December 5, 2012.

“Cap-and-trade’s complexity provides a breeding ground for special interests…. Why do those special interests deserve it anyhow?”

- James Hansen, “The People vs. Cap-and-Tax,” New York City, January 12, 2010.

NASA climate scientist James Hansen has long attracted criticism as the progenitor of modern climate alarmism. In recent years, Hansen has been prone to hyperbolic statements against fossil fuels, ignoring the moral imperative for abundant, affordable, and reliable mass energies (called progressive energy by Alex Epstein). Hansen has also engaged in civil disobedience for his wrong-headed cause.

Hansen’s alarmism, and its policy corollary of government-engineered energy transformation, is deeply troubled by three factors as documented by fellow climate scientist Chip Knappenberger:

    1. Global temperatures are not rising in tandem with greenhouse gas emissions (think global lukewarming);
    2. Hansen’s “climate dice” can be unloaded; and
    3. A carbon tax (Hansen’s alternative to cap-and-trade) is climatically useless.

Can James Hansen acknowledge the mere possibility of a benign or even positive human influence on climate? Such would be the beginning of an exit strategy, a soft landing, from what continues to shape up to be a Grand False Alarm. Hansen’s reconsideration, in fact, can begin with his own views of the 1990s on the complexity of his subject matter (see Appendix A).

Three Great Moments

But there is another side to the mad scientist that has interjected realism into the decarbonization debate. Three are mentioned here.

UN Climate Conference. In 2009, Hansen called out the result-faking UN international climate conference that resulted in the Copenhagen Accord. In his words:

The fraudulence of the Copenhagen approach – ‘goals’ for emission reductions, ‘offsets’ that render even iron-clad goals almost meaningless, an ineffectual ‘cap-and-trade’ mechanism – must be exposed. We must rebel against such politics-as-usual.

No doubt his opinion would be little changed toward the just-completed 18th Annual Conference of Parties of the United Nations Framework Convention on Climate Change in Doha, Qatar, which left the Kyoto Protocol of 1997 on life support.

“Fairy Tale” Renewables. Hansen has been realistic and forthright on other related issues that have put the environmental Left on the defensive, even drawing the ire of Joe Romm at Climate Progress.

Hansen smacked down wind and solar in realistic terms a la Robert Peltier (POWER magazine). “Suggesting that renewables will let us phase rapidly off fossil fuels in the United States, China, India, or the world as a whole,” he stated back in , “is almost the equivalent of believing in the Easter Bunny and Tooth Fairy.”

Federal Cap-and-Trade: Waxman-Markey. Dr. Hansen emerged as a powerful voice against federal cap-and-trade legislation during the heated debate on (the Orwellian titled) American Clean Energy and Security Act of 2009 (Waxman-Markey) back in 2009/2010.

In what he titled “The People vs. Cap-and-Tax,” Hansen made these points (among others):

“The Waxman-Markey and Boxer-Kerry cap-and-trade bills in Congress are larded with 2,000 pages of give-aways to special interests, soaking the public who must pay higher energy prices.”

“What is the chance that a United States cap-and-trade law could be a precursor for a global agreement? Zero. There is no chance that China will accept a cap. Nor should they. They are still in the early phase of their economic development.”

“[Paul] Krugman says that my suggestion that carbon trading will be an open invitation to Wall Street to again pillage the financial system ‘is bizarre.’ What is bizarre, in my opinion, is his implicit presumption that government regulators can outwit Wall Street executives.”

“Congress can write a cap-and-trade bill that tries to exclude Wall Street. But to think that Wall Street will not get involved in carbon profits, directly or indirectly, is naïve. This is a free country. Wall Street banks can buy the companies most affected by carbon price.”

“Congress is accustomed to working with special interests. There is a revolving door between Congress and lobbyists. Ex-members know the Washington ropes. The lobbyists wrote most of the pages in the 2,000-page bills in Congress.”

No doubt analysts will have a field day with the California experiment as political dealing and the law of unintended consequences result in an ever-more-complex law. AND the effect on climate will be zero–and less if leakage increases CO2 emissions in the whole.

Fourth Great Moment: California Cap-and-Trade 

And most recently, Hansen panned California’s cap-and-trade last week at San Francisco’s Commonwealth Club. Reported the San Francisco Chronicle:

Many environmentalists were thrilled last month when California launched its cap-and-trade system to rein in greenhouse gases. But not James Hansen.

Arguably the best-known climate scientist in America, Hansen trashed cap and trade during a talk Tuesday night at the Commonwealth Club in San Francisco. The system, in which companies buy and sell permits to produce greenhouse gases, is a “half-baked” and “half-assed” way to deal with global warming, Hansen said.

And he made those comments with California Gov. Jerry Brown sitting in the audience.

The article continued:

Cap and trade, he said, does little to cut emissions. But it does enrich the trading desks of banks, which have a new market to explore.

“Why do you want big banks in this problem?” Hansen asked. “Why should they be making money? Every cent they make is coming out of the public’s hide. And they add absolutely nothing. What you want is a system which is very simple and makes things cleaner.”

Governor Brown responded in predictable postmodernist fashion:

“We are out there in the forefront,” Brown told the crowd. “As you’ve just heard, the forefront isn’t good enough. But it’s still pretty damn good.”

Damn good? The final word belongs to Thomas Sowell: “Much of the self-righteous nonsense that abounds on so many subjects cannot stand up to three questions: (1) Compared to what? (2) At what cost? and (3) What are the hard facts?”

Appendix A. Hansen on Climate-Science Complexity

The honesty, realism, and vigor shown by Hansen in other contexts should be the physical science itself regarding the alleged problem of manmade global warming. To this end, the “old” Hansen should be resurrected now that recorded warming continues to lag behind the GHG emissions driving it. Global lukewarming should replace Hansen’s high-sensitivity scenarios, and modesty toward complexity should temper his war on fossil fuels.

Such modesty can draw upon the 1990s Hansen:

The forcings that drive long-term climate change are not known with an accuracy sufficient to define future climate change.”

- James Hansen, “Climate Forcings in the Industrial Era,” Proceedings of the National Academy of Sciences, October 1998, p. 12753.

“In view of the immense power of natural weather and climate fluctuations and the great buffering capacity of the Earth, especially the ocean, it is easy to be skeptical about whether small anthropogenic changes of atmospheric composition can have important practical impacts.”

- James Hansen et al., “How Sensitive Is the World’s Climate?,” National Geographic Research & Exploration, 9(2): 1993, p. 157.

“Climate is always changing. Climate would fluctuate without any change of climate forcings. The chaotic aspect of climate is an innate characteristic of the coupled fundamental equations describing climate system dynamics.”

- James Hansen et al., “How Sensitive Is the World’s Climate?,” National Geographic Research & Exploration, 9(2): 1993, p. 143.

But this is hardly your present Hansen. As I stated back in February at MasterResource:

“Humility is out. This NASA scientist has taken a ‘Greenpeace’ approach to the environment. He KNOWS both the problem and the answer to the problem, bringing to mind F. A. Hayek’s warnings about intellectuals who claim to know social problems so well that WE (the world) must adapt their coercive solutions. Beware of what Hayek called The Fatal Conceit.”


  1. Ed Reid  

    Hansen is a radical socialist.

    The US Department of the Treasury uses private sector companies to “make the market” for government securities. They do so because the market works; and, the market makers work on very slim margins.

    CO2 Cap & Trade does not require that “Wall Street” be involved in allowance trading, though those trading the allowances would almost certainly involve “market makers”, to assure that the market functions efficiently and at minimal cost.


  2. Robert Hargraves  

    Hansen is right that global warming from CO2 emissions threatens civilization as we know it. You and Hansen are right that cap-and-trade is a useless way to raise taxes.

    This MasterResource blog should analyze and understand the role of advanced nuclear power in a capitalistic society. Capitalism, if unfettered by stultifying regulations of the NRC and EPA, can produce energy cheaper than coal. Lowering energy costs will increase economic productivity. Advanced nuclear power such as the liquid fluoride thorium reactor (LFTR) can undersell coal-generated electricity, and later on even natural gas generated electricity.

    Exports of LFTRs to the world could be a $70 billion industry for the US. China is starting. Please read THORIUM: energy cheaper than coal described at http://www.thoriumenergycheaperthancoal.com


  3. Behonest  

    Climatologists have established that, over the 4.5 billion years of the Earth’s existence, ice ages have occurred on the average ever 11,500 years. Then the Earth lapses into a period of extreme cold. The Earth is 11,500 years since the end of the last major ice age. Let’s see who is right, Mother Nature, scientists, or the UN.

    California, my poor home State. Another failure…Cap and Trade got $140 million instead of the $1 billion projected. The budget never makes it either. Repeated failures lauded as success has made California officials look more like liars every day. Choosing to call them liars is kinder than calling them the obvious….morons and idiots.


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