Robert F. Kennedy Jr., president of Waterkeeper Alliance, posits in the Financial Times (July 19) that converting our fleet of coal-fired power plants to natural gas could be accomplished “practically overnight” and will have the effect of “jump-starting our economy….without the expense of building new power plants.” Thus did Kennedy express his new-found love of natural gas: It’s our “bridge fuel to the ‘new’ energy economy.” (Where have we heard that before–wasn’t that Enron’s tag line decade or two ago?)

Yet Kennedy’s proposal ignores the extremely high cost of fuel conversion (upwards of $100 million for a medium-size coal plant) and the added fuel cost to burn gas. He seriously mischaracterizes how an electricity market operates. And Joe Romm (Climate Progress) had added to the confusion by calling Kennedy’s proposal a “game changer.”…

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.

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

Welcome to the science of politics, Dr. Hansen–and welcome to a tradition in political economy that is more than a century old. “I see no force in modern society which can cope with the power of capital handled by talent,” stated William Graham Summer in 1905, “and I cannot doubt that the greatest force will control the other forces.”…

“Today the conservation movement is led by sober business men and is based on the cold calculations of the engineers. Conservation, no longer viewed as a political issue, has become a business proposition…. The old school looked on conservation as a governmental function; the new school believes in entrusting it to the hands of business men and engineers.”

– Erich Zimmermann, World Resources and Industries (New York: Harper & Brothers, 1933), pp. 784–85.

Profit-seeking conservation is nothing new, as economists have noted. So why must we assume that self-interested conservation is a ‘market failure’ requiring government subsidies and mandates? Why is market decision-making with energy necessarily sub-optimal?

And if “market failure” is posited, what must be said about “government failure”? Political processes are human too, and worse, bureaucrats do not have their own hard-earned cash on the line.…

In a previous post, CO2 Cap-and-Trade Meets the (China) Dragon, I described China’s rising greenhouse gas (GHG) emissions as a “one-country negation” to the Waxman-Markey climate bill (HR 2454). “The expected growth of coal-fired generation in China over the next 20 years will result in a net increase in CO₂ emissions from their power sector of more than ten times that of reduced U.S. emissions due to coal constraints,” I concluded. This is good, not bad, insofar as dung and wood are terrible things to burn.

Given China’s path, unilateral U.S. actions like Waxman-Markey are futile, symbolic measures. Indeed, U.S. industry would move to China to transfer emissions (called “leakage“) under a stringent U.S. carbon-dioxide regime.

A PR Moment from China

The Chinese government recently announced its intent to reduce the energy efficiency of its economy (GJ/$GDP) by 20%, invest something like $586 billion in renewable energy technologies, improve the power grid and other infrastructure by 2020, and phase out its older, less efficient coal-fired power plants with newer models, including supercritical (higher pressure boiler) technologies.…