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James Hansen on Cap-and-Trade & Copenhagen

By Robert Bradley Jr. -- November 30, 2009

“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.”

– James Hansen, “Never-Give-Up Fighting Spirit,” November 30, 2009

There is a civil war on the Left against cap-and-trade as the centerpiece of a U.S. climate bill. Among the leading critics is NASA scientist and Al Gore mentor James Hansen, who reiterated his opposition in Sunday’s The Observer with Copenhagen’s climate summit in mind:

“Cap and trade with offsets … is astoundingly ineffective. Global emissions rose rapidly in response to Kyoto, as expected, because fossil fuels remained the cheapest energy.

Cap and trade is an inefficient compromise, paying off numerous special interests. It must be replaced with an honest approach, raising the price of carbon emissions and leaving the dirtiest fossil fuels in the ground.”

Hansen also stated earlier this month:

“Cap-and-trade is a hidden regressive tax, benefiting the select few who have managed to get themselves written into the 2000-page bill…. Think revolving door between the government and Wall Street.  Think revolving door between Congress and lobbyists.”

Hansen’s earlier criticisms of HR 2454, the American Clean Energy and Security Act of 2009 (Waxman-Markey climate bill), apply to the current Senate companion, Clean Energy Jobs and American Power Act of 2009 (Kerry-Boxer climate bill).

Hansen’s bottom line on Waxman-Markey was as follows:

“The truth is, the climate course set by Waxman-Markey is a disaster course. It is an exceedingly inefficient way to get a small reduction of emissions. It is less than worthless….”

-James Hansen, “Strategies to Address Global Warming,” July 13, 2009.

During debate on the original version of HR 2454, Hansen complained:

“Governments are retreating to feckless ‘cap-and-trade,’ a minor tweak to business-as-usual….

“Why is this cap-and-trade temple of doom worshipped?  The 648-page cap-and-trade monstrosity that is being foisted on the U.S. Congress provides the answer.  Not a single Congressperson has read it.  They don’t need to – they just need to add more paragraphs to support their own special interests.  By the way, the Congress people do not write most of those paragraphs—they are ‘suggested’ by people in alligator shoes.”

And Hansen spanked harder on the final version:

“The alternative approach is Cap & Trade, or perhaps more honestly Tax & Trade, because a ‘cap’ increases the price of energy, as a tax or fee does.

Other characteristics of the ‘cap’ approach: (1) unpredictable price volatility, (2) it makes millionaires on Wall Street and other trading floors at public expense, (3) it is an invitation to blackmail by utilities that threaten ‘blackout coming’ to gain increased emission permits, (4) it has overhead costs and complexities, inviting lobbyists and delaying implementation.

The biggest problem with [cap and trade] is that it will not solve the problem. It may slow emissions, but because of the long lifetime of atmospheric CO2, slowing the emissions does little good. As long as fossil fuels are the cheapest form of energy they will be used eventually. There is no hope that cap and trade can get us back to 350 ppm CO2.

Hansen also addressed his critics on the Left who are politically stuck with Waxman-Markey:

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.

The truth is, the climate course set by Waxman-Markey is a disaster course. It is an exceedingly inefficient way to get a small reduction of emissions. It is less than worthless, because it would delay by at least a decade or two the possibility of getting on a path that is fundamentally sound from economic and climate preservation standpoints.

And Hansen did not kow-tow to the Obama Administration:

Officials in the Obama administration privately admit that the science demands much more rapid emission cuts than Waxman-Markey would yield, but they say that their hands are tied by a recalcitrant Congress. Is that so? Has President Obama provided direction or guidelines for what he expects from Congress?

The Death of Federal Cap-and-Trade?

Failure to enact cap-and-trade legislation in 2009 may portend even greater problems in election year 2010. Then it will be time for the Obama Administration and U.S. Congress to start over with climate policy.

With Climategate leading to a scientific rethink, and the failure of the Copenhagen climate negotiations to produce a successor to the (failed) Kyoto Protocol, the new competitor to cap-and-trade will not be a stiff carbon tax. It will be a shift in the climate policy paradigm from mitigation (mandated emissions reductions) to adaptation (wealth is health), or what Ken Green and Steve Hayward have called the resilience option. Continued primary reliance on the master resources of oil, gas, and coal will be central to making society best prepared for whatever the future of climate and day-in day-out weather might be.


  1. Chris  

    A simple compromise would be a small carbon tax ($10/t) that would pay for adaptation strategies. It has the following advantages:
    1) Kills cap and trade.
    2) Establishes a carbon tax for the first time (I believe everyone is in agreement that carbon has some sort of pollution cost).
    3) Pays for new technology programs and adaptative strategies.
    4) Encourages nuclear power.
    5) Hopefully it can be used to eliminate (or at least reduce) subsidies to the bio-fuel, wind, and solar industries.
    6) Encourages more fuel-efficient cars.

    In essense, one tax does all the above. I don’t like taxes, but if we have to have them, simpler is ALWAYS better for the taxpayer. Unfortunately, simpler is not in the interest of the politician (for many reasons that need not be discussed here).


  2. Robert Bradley Jr.  

    To Chris’s proposal, some questions include: is the scientific basis for problematic warming in doubt, and what is the climate benefit, if any, from a carbon tax at $10/ton or more?

    Critics would say that a penny a ton is too high a tax, and a hundred dollars a ton tax is not enough. What they mean by this is that administrative costs are very high from the public and private sides for any level of priced carbon, and even high taxes do not appreciably affect global climate.


  3. Charles  

    Anyone who has gone to any bother to fully read the pro and con case for AGW can only conclude it is scientific corruption at best. The fact we have had a demonstrable Medieval Warming Period, and the fact that the amount of anthropogenic CO2 in the atmosphere is only 4% of the total CO2, falsifies the theory for AGW straight away.


  4. Rob Bradley  

    Charles: I wish it were that easy.

    The carbon imbalance can be small but result in increasing atmospheric concentrations of GHGs. Chip Knappenberger questions this ‘ultra-skepticism’ point here:


  5. Ed Reid  

    The really fun question is: If carbon emissions must be reduced by “x” percent in “y” years, what level of carbon tax would reliably achieve that reduction in that time period?

    I believe that question is unanswerable today; and, that it will always be unanswerable.

    If carbon emissions must be reduced by “x” percent in “y” years, a cap at current emissions rates, declining by “x”/”y” percent per year would reliably achieve the reduction. Including the ability to trade provides timing flexibility. Including “offsets” of dubious reality and value adds nothing to the potential of achieving the reductions; arguably, it takes away a great deal.

    Some additional questions to ponder:
    What percentage reduction in global annual carbon emissions would be required to stabilize the atmospheric carbon concentration?
    By what year is it necessary to achieve stabilization to reliably avoid a climactic cataclysm?

    Surely a settled science offers a discrete answer to each of these questions. 🙂


  6. twawki  

    OT but great news – Tony Abbott, climate skeptic new leader of the opposition in Australia. http://www.twawki.com ETS (cap and trade) has been killed in Australia


  7. A Conservative Teacher  

    Even the left recognizes that the cap-and-tax scheme was merely a way to divert wealth to politically-favored elites (some may even call this Democrat-sponsored corruption). Although I disagree with the far left position of artifically driving up the prices for carbon, I can’t help but wonder what would happen if the government got out of the business of lowering the prices of oil and gas artifically- perhaps a neutral conservative approach to government would lead to more environmentally favorable conditions than the liberal approach.


  8. Robert Bradley Jr.  

    Wow–check out Eric Berger’s interview of Hansen here:

    “James Hansen: Climate change akin to ‘slavery’ and ‘Nazism'”


    And check out the reader comments too. Here is just the first one:

    “Well, no surprise Eric, this Nazi and slavery talk shows the man is seriously mentally unhinged about AGW. But his economics knowledge is juvenile at best. He thinks that taking taxes from people who buy fossil fuels as energy and then giving it back to them is going to change their consumption patterns. Not if they know that is what is happening. How do fossil fuels become expensive if you give people a subsidy and they can just keep buying them? Not sure where he got his economics training.”

    Is Hansen his own worst enemy?

    P.S. Eric Berger just posted his complete interview with Hansen:


  9. Chris  

    To Robert Bradley,

    Yes, Hansen is a nut. It is not the first time he made those type of comments (you can search the WUWT website for past comments). No, the carbon tax in my mind would simply fund non-carbon energy technologies (including nuclear). It also puts in place a mechanism IF catastrophic global warming is shown plausible (which I don’t think it is). The tax should be pegged to the satellite temperature record. In other words, the higher it goes, the higher the tax. If it gets colder, the government then subsidizes coal use, for example, with a tax credit. You could also make trades on whether it will be warmer or colder in the future (i.e., buy carbon tax futures). Wouldn’t that be a lot more intersesting than a stale policy debate going nowhere? Finally, I believe in flat taxes, such as social security, medicare, sales tax, etc. In essense, a CO2 take is a flat tax – the more you consume, the more you pay (proportionately), but everybody pays it. Taxes are so evil, I believe everyone should hurt when paying them. Otherwise, what is the dis-incentive for politicians to not raise taxes on the producers and investors of our economy? In summary, 1) taxes are evil for the waste that they generate, 2) everyone needs to pay an equal proportion (relative to their income, consumption, etc.) so that all are affected by distastrous tax policy, and 3) a CO2 tax would be preferable to our progressive income tax.


  10. Rod Adams  

    Chris – Anyone who believes that taxes are fundamentally “evil” is also a bit unhinged and unrealistic. In other words someone with that belief could be called an anarchy seeking “nut”.

    Disclosure – I have been a tax taker for most of my career. Taxpayers provided my public education, and sent me to the Naval Academy. They have also paid my salary as a professional naval officer. I hope that I have served well enough to provide some return on that investment.


  11. Chris  


    Let me clarify: when 10% of the population is taxed while the remaining 90% of the population is not (as an example), then that sort of taxation is a form of stealing. Stealing is wrong, evil, or whatever you want to call it. If the fundamental purpose of taxation is to pay for goods and services done in the name of common good, then it is logical that everyone should pay their fair share of taxes. At least in nanny-states like Sweden and Norway, everyone (rich and poor) pays a high level of taxes (i.e., their tax policy is consistent with their high social safety net society). Anything beyond that is forced charity, which again, is a form of stealing.

    Finally, do you not see the nexus of government taxes and grant spending as the primary cause of scientific misconduct in climate research? When people abuse other people’s money, is that not wrong? Didn’t people abuse the free money handed out during the days of mortgage mania? How do you feel about people peddling worthless mortgage-back securities? Was that evil, wrong, or are you ambilivent about it? The financial mess was really a ponzi scheme since it all depended upon rising housing values (i.e., people could always sell their house for a profit even after their mortgage reset at a higher payment). As long as people kept buying houses at higher and higher prices, everything was fine (the very definition of a Ponzi scheme). When housing values dropped 20%, the securities became worthless as the underlying mortgages went into default. Again, ponzi schemes are a form of stealing, instigated by greed (both by the mortgage sellers and those buying the houses under false pretenses). Greed is evil right?


  12. Chris  

    In summary, when tax policy is driven by greed, then taxes become evil. If our tax policy continues to become more like forced charity, you will see a massive increase in civil disobedience (i.e., people will stop paying their taxes).


  13. Rod Adams  

    Chris – I completely agree that people should pay their fair share. There are those at both the top and the bottom of the reported income structure who pay far less than a fair share of taxes. At the bottom, part of the problem is the underground economy and the illegal transactions. At the top it is the skilled efforts of accountants and lawyers. Both are a problem.

    The Ponzi scheme that you mention was definitely a big issue and I am appalled by the privatization of profit mixed with the socialization of risk. It was not limited to the single family house market – take a good look at the condition of commercial real estate these days. There were a lot of completely unrealistic prices paid for shopping malls, hotels, and office buildings that only made sense in an era of extremely low interest rates and escalating real estate prices.

    My point was to challenge your assertion that someone is a “nut” because they uttered a few words that could be taken out of context. Your assertion that taxes are evil did not include any of the far more complicated situation that you later discussed.

    Though Hansen did what some consider to be unforgivable by introducing a reference to Nazis, what he was trying to say was that he considered that compromise was not a good path to follow in reducing emissions. It is sort of like being on an elevator with a bunch of smokers – the air is no more pleasant if only half of the people light up than if all of them do. I am not saying I agree with Hansen’s assessment, just that I do not think it is evidence of being a “nut”.


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