A Free-Market Energy Blog

RFF in the Trump Era: Assume, Don’t Debate, Climate Alarmism/Forced Energy Transformation (2017 Annual Report more of the same)

By Robert Bradley Jr. -- August 14, 2018

” … [Alan] Krupnick pointed out that economic realities and state regulations may frustrate the administration’s efforts to boost fossil fuel production….”

So reads one highlight from the 2017 annual report of Resources for the Future (RFF), where wish and want are prone to color the opinions and technical analysis of the richly funded organization’s bevy of PhD economists.

Seen another way, do not expect key scientific and economic terms in the energy debate to appear in this annual report. Government failure–the very term that goes alongside market failure? It’s missing. Unintended consequences of government intervention? Not there. Global greening from carbon dioxide emissions/concentrations? No way. Global lukewarming re the growing gulf between model-predicted and recorded global temperatures? Not a hint of that.

RFF’s common denominator? Assume, don’t debate, fundamental questions that conflict with the funding agenda of problematic climate change.

All this was easy during the Obama Administration where the argument could be made that incremental reform (such as choosing between command-and-control regulation and carbon taxation) could be posited as the only game in town. But in the Trump era?

President’s Letter

Richard Newell, President and CEO of Resources for the Future (RFF) states in his opening letter (my comments indented and in red):

“A new US presidential administration created a seismic shift in an already fast-moving national and global policy landscape. This shift provides major opportunities for RFF to expand its indispensable role in helping create an environmentally and economically sustainable future. Seizing those opportunities requires RFF to innovate and adapt….”

Translated, we are shocked by the policy reversals away from Obama-era energy statism. We now need to defend what we did not have to defend before.

“Simply put, in order to drive the change we want to see, we are aligning the organization to address the most vital issues and expand our connections beyond RFF’s traditional communities. We are doing this because the demand for RFF’s work is only growing.”

“Growing” in the free-market community? Or just from Statists who want climate policy to trump consumers, taxpayers, and national sovereignty?

“Decisionmakers from across the political and ideological spectrum recognize the need for a trusted, gold-standard source of information and economic analysis on environmental, energy, and natural resource questions.”

False. RFF must debate, not assume, fundamental questions to become “a trusted, gold-standard source” in today’s two-sided public policy debate.  The benefits of CO2-driven warming, not only the costs…. the environmental and health effects of industrial wind turbines…. the hidden costs of intermittent electricity…. the climate effects of a carbon tax (not only the emission reductions and the energy price effects) …. The list of verboten policy areas is large.

“Over the next several years, RFF will continue to assertively identify important issues and information needs, produce  economic and policy research of the highest quality that is responsive to those needs, and deliver the relevant insights and solutions—to the right people, in the right way, and at the right time. And true to our legacy, RFF will actively engage with current policy questions while ensuring that we stay on the cutting edge of emerging issues and trends.”

If this is really the vision, then it is time to expand the list of research areas from the usual fare. The hard questions must be confronted now that climate alarmism/forced energy transformation is no longer the debate position of the federal government. But can RFF retain its funding sources by such debate? Will a board member such as David Hawkins (Natural Resource Defense Council) consent or resign?

“We are charting an ambitious course, one that is required at this critical time. It will entail significant financial commitments to the future of this organization. As ever, the key to our success is people. Our enormously talented and committed staff fuels RFF’s research and impact, and our work has always been made possible by the commitment of RFF’s donors and partners. As we move ahead, I invite you to join us in investing in RFF’s future.”

Does RFF really need more money to break out? Might the organization hire someone who debates rather than assumes with the critical questions of climate policy and energy policy. Intellectual diversity toward energy liberalization, anyone?

In a section, A New Era for Federal Energy and Environmental Policy, RFF reports (p. 6):

“The approach of the Trump administration to energy and environmental policy represents a sharp departure from those of previous administrations. RFF experts offered analysis on many of the new administration’s positions, beginning with a policy brief by RFF Senior Fellow ALAN KRUPNICK examining Trump’s proposals for energy policy. Krupnick pointed out that economic realities and state regulations may frustrate the administration’s efforts to boost fossil fuel production and warned that trade breakdowns will hurt US gas and pipeline suppliers.”

Yes, “trade breakdowns” (the tariff wars) threaten to hurt domestic energy infrastructure (as would “border adjustments” under a carbon tax regime, BTW). But no, Trump energy policies are liberating oil, gas, and coal production in the US.

In Working with States on Climate Change Policy (p. 7):

“RFF experts continue to work closely with California and states in the Northeast to pioneer market-based tools to reduce greenhouse gas emissions. In a series of webinars for Regional Greenhouse Gas Initiative (RGGI) stakeholders, RFF’s DALLAS BURTRAW, KAREN PALMER, and ANTHONY PAUL explored how an innovative mechanism called an emissions containment reserve would reduce volatility in the allowance market.”

How about the consumer effects of RGGI versus its absence. Do electricity rates matter? A technical tweak outside of the market is the stuff of central planning, not markets.

“RGGI now plans to implement this mechanism beginning in 2021, paving the way, Burtraw says, for “the next big evolution in carbon markets.” Burtraw also lauded California for extending the state’s cap-and-trade program for greenhouse gas emissions, highlighting the bipartisan nature of support in a blog post. He noted that the program’s development is a “historic victory for economic ideas.” He also advised decisionmakers about the potential impacts that new provisions limiting allowance banking and establishing border adjustments could have on the linking with carbon markets in Quebec and Ontario.”

California’s cap-and-trade policy? What is this program’s effect on consumers, including industry. What is the program’s effect on global climate change (you chose the model). Where is the cost/benefit analysis, the very essence of applied economics to a regulatory program? 

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