A Free-Market Energy Blog

CERAWeek 2009: Why Didn’t Daniel Yergin Question Climate Alarmism–and Both Cap-and-Trade and Carbon Taxation?

By Robert Bradley Jr. -- February 15, 2009

At the just-completed CERAWeek, here in Houston, Daniel Yergin had an excellent opportunity to inject some scholarly realism into the climate-change debate. As a wise man of energy and an opinion leader, he could have stated publicly what many in the vast audience mutter privately, such as:

  1. Global warming has stalled in the last decade or more, bringing into question the high-sensitivity, high-warming scenarios of climate models (the major costs of climate change)
  2. Cap-and-trade CO2 reduction in the European Union has failed under a variety of metrics–deadweight costs, higher prices, very little gain, unintended consequences
  3. U.S. voters have put climate-change at the very bottom of their list of concerns and affordable energy high on their list of concerns
  4. What emerges from Congress in the next several years will be grotesque–almost regulation and higher energy costs for its own sake (with no appreciable effect on climate).

Yergin could have also explained how

  1. Economists have been able to justify a carbon tax (carbon pricing) under cost/benefit analysis only by assuming full international participation, an “environmental pope” (William Nordhaus), and high damage scenarios that increasingly appear to be unrealistic
  2. Time is running out for reversing the human influence on climate under anyone’s scenario because of the saturation effect (the logarithmic effect of greenhouse-gas forcing on climate).

Such a powerful message could have helped reorient the energy sustainability question to

  1. Providing modern energy to the 1.5 billion that live in energy squalor (burning wood and dried dung in the home)
  2. Ensuring plentiful, affordable, reliable energy to the developed world to promote economic recovery and growth (wind and solar fail on this count).

Instead, Dr. Yergin made statements like this at CERAWeek:

[Oil companies] are not arguing about basic philosophy anymore, but about practical steps. We’re moving into a new era of policy making that will have very important and far-reaching implications for energy markets.


Now the buy-in is pretty much across the spectrum. It is one where the devil is truly in the details.

In other words, “is equals ought.” Let’s not dare to question the political situation we find ourselves in, let’s just march ahead into neo-Malthusian land.

This raises interesting questions about just who Daniel Yergin is and how has his career developed. I cover some of this history in my new book, Capitalism at Work (pp. 57, 178, 252, 258–60, 280–82, 288, 290), and I plan to post on this subject in the future.

Suffice it to say that Yergin is one of the “Big Five” from within the energy sector (broadly considered) who sounded the climate alarm in such a way as to confuse/split the energy industry and get us to the (sorry) point where we are now.

The “big five,” are:

  1. The late Ken Lay of Enron, who sounded the climate alarm in the same year as James Hansen and Al Gore (1988) and went on to position Enron with seven profit centers around CO2 regulation
  2. John Browne, who in 1997 put BP on the side of climate alarmism and “beyond petroleum”
  3. Paul Portney, president of Resources for the Future (1995–2005), who furthered RFF’s embrace of climate alarmism and cap-and-trade and had innumerable meetings with energy companies to sell them on the same
  4. James Rogers, now head of Duke Energy, a Ken Lay protégé who left Enron in 1988 to join a coal-heavy electric utility, Public Service of Indiana. At PSI, later Cinergy and now Duke, Rogers called for CO2 regulation in hopes of writing advantageous rules as a first mover
  5. Daniel Yergin (to be continued).


  1. Ed Reid  

    “Where have all the flowers gone, long time passing?”

    Serious science prostrate before ponderous politics. (BOHICA)

    Serious businesses feeding the alligator in the hope it will eat them last. (Tick tock, tick tock.)

    Snake oil salesmen peddling their wares. (“Good for everything that ails you.”)

    “When will they ever learn? When will they ever learn?”


  2. Donkatsu  

    Related point:
    Not discussed at all at CERAWeek or elsewhere is an obvious point, similar to the arguments in a previous thread about automobile efficiency. If you want to reduce emissions and save fuel in the US, then go after the oldest least efficient generating units and replace them with better technologies.

    There is a way to make great environmental progress from the power sector of the US if one is serious about it, and not merely looking for new instruments of social control. The fastest route to cutting US emissions of the actually harmful (SOX, NOX, particulates), along with the putatively harmful (CO2), is to (i) put the 23 already designed new nuclear reactors on a fast track for approvals and construction; and (ii) put the 83 coal-fired power plants now awaiting permits and approvals on the construction agenda. These projects represent roughly 200 GW of firm generating capacity.

    The environmental case for nukes is inarguable, except for the ignorant and willful (or the willfully ignorant). The case for new coal plants is equally strong. Coal power plants, though just 32% of total generation capacity, provide more than 50% of kWh generated. At least 200 GW of that coal generation capacity is 30 years old or more (20% of total generation capacity and 35% of total energy output). These plants are due for replacement over the next 10 years, and the nuke and coal plants now on the table are the only reasonable alternatives on offer for the US. New coal combustion technology is much cleaner for the regular pollutants (SOX, NOX, particulates) and uses at least 20% less coal per kWh than the plants they will replace.

    If the enviros were actually serious about cleaning things up even more than we have over the past 30 years, they would understand that the fastest route to lower emissions and reduced coal consumption is the replacement of older coal-fired plants with newer ones. And talk about shovel-ready! The nuke and coal plants now in regulatory limbo represent at least $350 billion of new investment over then next 5-10 years, none of it requiring federal or state monies, thousands of highly paid jobs, and, when the plants are operating, several tens of billions of dollars per year in tax payments by the profitable generation of power from these plants. The other alternatives on offer, primarily wind, will remain scant, or negative, energy and fiscal contributors, leading to another boom in gas-fired power plant construction as the older nukes and coal plants wear out.


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