Last week in the Huffington Post, climatologist Dr. James Hansen made an impassioned plea to President Obama to ditch cap-and-trade and instead advocate a plan to tax carbon-based fuels with 100% of the revenues returned to households. This was not the first time. Hansen made the same pitch back in December 2008 in a letter to President-elect Obama. President Obama did not heed Hansen’s advice, keeping his wagon hitched to cap-and-trade, the policy darling of Big Green, U.S. CAP, and congressional leaders. But with cap-and-trade bogged down on Capitol Hill, Hansen argues, his plan gives Obama “a second chance on the predominant moral issue of this century.”
Hansen made the case for “tax-and-dividend” in testimony before the House Ways & Means Committee on February 25, 2009. I commented on Hansen’s testimony a week later on MasterResource. Substantively, there’s nothing new in Hansen’s Huff Post column, but rhetorically there is one modification. He now calls his proposal a “fee” rather than a tax. Despite Hansen’s earlier criticism of cap-and-trade as a hidden and thus dishonest tax, and his call for a “transparent” approach to reducing greenhouse gas emissions, he now avoids the “T” word as assiduously as any shifty cap-and-trader.
Today’s column offers a running commentary on Hansen’s Huff Post piece. Hansen’s statements are indented. My comments are in bold type:
“President Obama, finally, took a get-involved get-tough approach to negotiations on health care legislation and the arms control treaty with Russia — with success. Could this be the turn-around for what might still be a great presidency?”
Hansen favors Obamacare and an arms control agreement obtained by eschewing both missile defense and nuclear force modernization. Hansen unwittingly reveals himself to be a liberal Democrat. That does not discredit his argument, of course, but it should make us skeptical when he presents himself as a non-political Mr. Science.
“The predominant moral issue of the 21st century, almost surely, will be climate change, comparable to Nazism faced by Churchill in the 20th century and slavery faced by Lincoln in the 19th century. Our fossil fuel addiction, if unabated, threatens our children and grandchildren, and most species on the planet.”
This is erroneous on several levels.
(1) Why is climate change the “predominant moral issue” of the 21st century? Climate change is responsible for far fewer deaths than a host of other threats to global welfare (hunger, malnutrition, lack of access to safe drinking water and sanitation, indoor air pollution, infectious diseases, barriers to trade, non-accountable systems of governance), if indeed it is responsible for any detectable mortality, and is the least amenable global challenge to cost-effective solutions.
For all his scientific training, Hansen misses the obvious: Poverty remains the number one cause of preventable illness and premature death in the world. Hansen calls coal-fired power plants “factories of death,” but developing countries, notably China and India, absolutely depend on coal-based power to lift their peoples out of poverty. The climate crusade seeks to put an energy-starved world on an energy diet. Hansen’s got it backwards: The “predominant moral issue” of our time is resisting the global warming movement!
(2) Hansen falsely lays claim to the moral legacies of Lincoln and Churchill. In the 19th century, nations would not have turned as quickly or as resolutely against slavery if machines powered by fossil fuels had not progressively replaced human muscles in industrial and agricultural work. Bjorn Lomborg offered this sobering analysis in The Skeptical Environmentalist (pp. 118-119): “If we think for a moment of the energy we use in terms of ‘servants,’ each with the same work power as a human being, each person in Western Europe has access to 150 servants, in the US about 300, and even in India each person has 15 servants to help along. It is indeed unpleasant to imagine what it would be like to live without these helpers.”
In the 20th century, access to abundant, affordable fossil fuels helped make America the “arsenal of democracy” and, thus, the Nemesis of both Nazism and Soviet communism. An America powered by wind turbines, solar panels, and biofuels would have had a much smaller GDP and could not have won either World War II or the Cold War.
In short, our attitude towards the fossil-energy era should be one of gratitude. Hansen exhibits not a trace of it.
(3) A final point: Americans today are no more addicted to oil than their forefathers were to horse fodder. We value auto-mobility because it is intrinsic to our nature as auto-nomous (self-governing, self-directing) beings. We depend on petroleum for auto-mobility at the current stage of economic and technological development. As soon as markets develop motor fuels that outperform gasoline in terms of cost, safety, portability, and energy density, we will abandon oil as rapidly as previous generations abandoned horses and hay. When Hansen calls our dependence on fossil energy an “addiction,” he speaks as an ideologue, not as a scientist.
“Yet the president, addressing climate in the State of the Union, was at his good-guy worst, leading with “I know that there are those who disagree…” with the scientific evidence. This weak entrée, almost legitimizing denialists, was predictably greeted by cheers and hoots from well-oiled coal-fired Congressmen. The president was embarrassed and his supporters cringed.”
Many scientists reject the Gorethodox view that global warming is a planetary emergency threatening the survival of civilization and the habitability of the Earth. Hansen’s refusal to acknowledge legitimate disagreement on such core issues as climate sensitivity, paleoclimate reconstructions, surface temperature records, and climate change impacts is itself a form of denialism.
“This is not the 17th century, when “beliefs” trumped science, forcing Galileo to recant his understanding of the solar system. The president should unequivocally support the climate science community, which is under politically orchestrated assault on the legitimacy of its scientific assessments. If he needs reassurance or cover, the president can ask for a prompt report from the National Academy of Sciences, established by Abraham Lincoln for advice on technical issues.”
Again, several critical observations are in order.
(1) Hansen pretends that his interpretation of climate science is as evident and ‘settled’ as the helio-centric nature of our solar system. Like Al Gore, the Union of Concerned Scientists, and many others, Hansen invokes the Authority of Science to stifle debate, deligitimize opponents, expand the power of the state, and direct its use. As Prof. Angelo Codevilla warns, when science becomes a rhetorical trump card, those who claim to speak for science — the EPA, for example — get to decide public policy. Self-government is replaced by “the rule of the few, by their own authority, over the many.”
(2) Hansen writes as if the Climategate scandal never happened. The “climate science community” is in crisis not because of “political orchestration” by “coal- and oil-fired Congressmen” but because top scientists colluded to bias the peer reviewed literature, massage data to advance a party line, and violate freedom of information laws.
(3) The notion that the IPCC and the U.S. climate researchers who receive billions annually in government support are persecuted dissenters rather than a feted and pampered establishment doesn’t pass the laugh test. It’s twaddle on the order of Hansen’s claim that the Bush administration muzzled him even though he gave more than 1,400 interviews on Bush’s watch.
(4) Hansen wants the National Academy of Sciences (NAS) to ‘settle’ the debate over climate science. No surprise there. Hansen is a member of the Academy, and the NAS is plagued with cronyism. As Science magazine reported last year (September 19, 2009), Academy members get to line up referees before submitting papers to the organization’s flagship publication, Proceedings of the National Academy of Sciences (PNAS). Only a few percent of such papers are rejected, whereas 80% of papers submitted by outsiders are rejected. Comfortably ensconced in the club, Hansen proposes that the club tell Congress what to think. It would be hard to find a more egregious example of the elitism against which Codevilla warns.
“Why face the difficult truth presented by the climate science? Why not use the president’s tack: just talk about the need for clean energy and energy independence? Because that approach leads to wrong policies, ineffectual legislation larded with giveaways to special interests, such as the Waxman-Markey bill in the House and the bills being considered now in the Senate.”
Waxman-Markey is “ineffectual legislation larded with giveaways to special interests.” He’ll get no quarrel from me on that point.
“The fundamental requirement for solving our fossil fuel addiction and moving to a clean energy future is a rising price on carbon emissions. Otherwise, if we refuse to make fossil fuels pay for their damage to human health, the environment, and our children’s future, fossil fuels will remain the cheapest energy and we will squeeze every drop from tar sands, oil shale, pristine lands, and offshore areas.”
Hansen assumes that he knows the ‘social cost’ of carbon and can price it accordingly, so that fossil fuels “pay for their damage to human health, the environment, and our children’s future.” Yet if fossil fuels are so horrible that making them pay their social cost would make them uneconomical, how come human and ecological welfare keeps improving?
As Indur Goklany observes, during the modern warm period, “agricultural productivity has increased; hunger has declined; deaths from hunger, extreme weather events, malaria and other vector-borne disease have dropped; and people are living longer and healthier.” He continues: “Regarding environmental well-being, the Amazon and the Sahel are becoming greener, as is most of the world.” He adds: “Ironically, much of this improvement in human and environmental well-being has been enabled, directly or indirectly, by technologies dependent on fossil fuels or economic surpluses generated by the use of fossil fuels and other GHG-generating activities.”
“An essential corollary to the rising carbon price is 100 percent redistribution of collected fees to the public — otherwise the public will never allow the fee to be high enough to affect lifestyles and energy choices. The fee must be collected from fossil fuel companies across-the-board at the mine, wellhead, or port of entry. Revenues should be divided equally among all legal adult residents, with half-shares for children up to two per family, distributed monthly as a “green check”. Part of the revenue could be used to reduce taxes, provided the tax reduction is transparent and verifiable.”
Hansen said it better in his congressional testimony. Cap-and-trade, he argued there, is politically unsustainable. The public will soon learn it is a tax. They’ll see people on Wall Street making millions at their expense. And because they’ll bear all the cost and reap no dividend, “the public will revolt before the cap tax is large enough to transform society.” That’s correct, and it’s because many citizens already understand that cap-and-trade is a hidden tax on energy for the benefit of special interests that Waxman-Markey cannot pass in the Senate.
But Hansen overlooks the other side of political reality. Without the support of directly-affected industries, a climate bill won’t fly either. And they won’t give their support unless Congress buys them off. To enact a regime of steadily increasing carbon prices, Congress must satisfy two main constituencies — taxpayers (consumers) and corporate rent-seekers. If the bill enriches rent seekers, it will alienate taxpayers. But if it does not transfer wealth to energy-rationing profiteers, it will alienate Wall Street and U.S. CAP. Maybe it’s not impossible to build and sustain a political consensus for pricing carbon at $115 per ton by 2020 (see below), but it’s more difficult than Hansen seems to suppose.
“The rising carbon price will affect almost everything. People’s purchases will reflect a desire to minimize their costs. Food from nearby farms will benefit; imports from halfway around the world will decline. Renewable energies, other carbon-free energies, and energy efficiency will grow; fossil fuels will decline.”
“Imports from halfway around the world will decline.” Those imports include products from developing countries that depend on export-oriented production to eradicate poverty. For example, the European Environment Agency calculates that the carbon footprint of grapes imported from Chile to Austria is 842 times larger than than that of locally-grown Austrian grapes. A carbon tax big enough to discourage Europeans from buying Chilean grapes would also be big enough to destroy Chilean jobs. Such a scheme might be “green,” but it would not be fair and would impose its own ‘social cost.’
“The fee-and-green-check approach is transparent, fair and effective. Congressman John Larson defined an appropriate rising fee. $15 per ton of carbon dioxide the first year and $10 more per ton each year. Economic modeling shows that carbon emissions would decline 30 percent by 2020. The annual dividend then would be $2000-3000 per legal adult resident, $6000-9000 per family with two or more children.
About sixty percent of the public would receive more in the green check than they pay in added energy costs. People will set their net cost or gain via their energy and other consumer choices. Dividends could be adjusted state-by-state to prevent transfer of wealth from one part of the country to another.”
Hansen writes as if we all live in Lake Woebegone where every child is above average and every household can be among the 60% that receives more in dividends than they pay in higher energy costs. But, as noted in my earlier post on Hansen’s testimony, fee-and-green-check confers windfall profits on some and inflicts windfall losses on others simply by reason of the nature of their jobs or industries. For example, if you’re an independent trucker, you consume far more motor fuel than the average household. Yet your share of the carbon tax revenues would be the average (per capita) share. Hansen’s scheme would transfer wealth from you to your neighbor with a white-collar job, not because you waste gasoline but because you haul freight for a living.
“Religions across the spectrum — Catholics, Jews, Mainline Protestants, Eastern Orthodox, and Evangelicals — are united in seeing climate change as a moral and ethical challenge. The Religious Coalition on Creation Care is working with the Citizen’s Climate Lobby, the Price Carbon Campaign, and economists at the Carbon Tax Center to help promote this honest and effective energy and climate policy. The public, if well-informed, can be expected to support this policy.”
Religions across the spectrum also are united in seeing global poverty and world hunger as moral and ethical challenges. Hansen — and the Religious Left — should be candid enough to admit that climate policies, by restricting access to fossil fuels, have a high potential to impede development. It is either naive or disingenuous to preach “Creation Care” as a categorical imperative — an obligation that sweeps aside all other ethical and prudential considerations. Crusading greens helped persuade many nations to ban or stop using the insecticide DDT even to control mosquitos and save lives. As a consequence, malaria has killed millions of people in developing countries who might otherwise have avoided the disease. Holier-than-thou is seldom a sound basis for moral judgment or political action.
“But so far Congress has been steamrolled by special interests. Congressional leaders add giveaways in their bills to attract industry support and specific votes. The best of the lot, the Cantwell-Collins bill, returns 75 percent of the revenue to the public. But it is still a cap-and-trade scheme, and its low carbon price and offset-type projects create little incentive for clean energy and would have only small impact on carbon emissions.
Can the cacophony of special interests be overcome? There is one way: the president must get involved. He must explain the situation to the public and use his bully pulpit to persuade Congress to do what is right for the nation and future generations.
He must explain that a rising carbon price is needed to phase out our fossil fuel addiction. The dividend will provide the public the means to move to a clean energy future, stimulating the economy.
Carbon fee and dividend is the base policy needed to move the nation forward to a clean energy future. It must be supplemented by other actions including building and efficiency standards, and public investment in improved infrastructure and technology development.
Congress has a role to play toward these ends, but it is the rising carbon price will make them feasible. Investment decisions are best left to the private sector. The government can provide loan guarantees for nuclear power and support development of trial carbon capture storage, but these energies must compete with energy efficiency and renewable energies in a free market.”
Again, Hansen thinks Obama can sell an anti-fossil-fuel policy without buying off the affected industries. Lots of luck!
More importantly, he neglects to consider the economic impacts of a policy designed to kill coal-electric generation. Within 20 years, Hansen’s policy would raise the price of carbon to $215 per ton of CO2. Coal would cease to be an economic electricity fuel long before then, yet half our current electric supply and more than half of our base-load power come from coal. The premature death of coal-based power would jeopardize electric supply reliability and drive electricity rates through the roof. That in turn would have devastating effects on jobs and growth. Like socialists of old, Hansen seems to think it’s possible to redistribute wealth without affecting the size of the pie. When the pie shrinks, people will turn against “carbon fee and dividend” even if it’s not enriching Wall Street brokers.
“The best part about a simple honest rising carbon price is that it provides the only realistic chance for an international climate accord. President Obama was right to abandon the 192-nation debate. The need is for an agreement between the two dominant emitters: the United States and China.
China will never agree to the “cap” approach that Congress favors. Developing nations will not cap their economies. But China is willing to negotiate a carbon price. How can I say that with confidence?
China is making enormous investments in nuclear power, wind power, and solar power. They want to avoid the fossil fuel addiction of the United States. They want to clean up their atmosphere and water. They want to protect the several hundred million Chinese living near sea level. They know that their clean fuels will win out only if fossil fuels are made to pay for damages that they cause.
Once the United States and China agree on a carbon price, most other nations will accept the same. Products made by nations that do not have a carbon price can be charged an equivalent duty under existing rules of the World Trade Organization. That will convince most nations to join, so they can collect the tax themselves.”
This makes no sense. China rejects a carbon cap primarily because its manufacturers do not want to lose the competitive advantage they derive from low-cost coal-based power. A carbon tax would increase Chinese energy prices every bit as much as a comparable carbon cap. China gets 79% of its electricity from coal, compared to only 50% in the United States. Consequently, a carbon tax would likely have even bigger adverse impacts on GDP in China than it would on U.S. GDP, even if Chinese consumption of coal for electric generation were not projected to double by 2030. Moreover, a carbon tax would discourage energy-intensive Western firms from investing in China to avoid the constraints of Kyoto-style climate policies (the so-called carbon leakage problem).
Perhaps posterity may remember that Obama reduced the number of nuclear-tipped missiles, or that he added ten percent of Americans to the health care roles. But if he dreams of being a great president, he needs to take on the great moral challenge of our century.