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Industry Analysts Who Got Acid Rain Cap & Trade Wrong Now Attacking Obama’s Green Economy Legislation

CRA InternationalWhen the first President Bush tackled acid rain with the Clean Air Act, industry-backed studies got the economic effects of an acid rain cap and trade system totally wrong. Industry analysts insisted electricity prices would skyrocket. Instead, electricity prices dropped. Now, they’re saying the same things about President Obama’s cap & trade program for powering a clean energy recovery:

After an estimated 48 cents per gallon increase in 2020, motor fuels are estimated to increase by 19% (74 cents per gallon) relative to baseline levels. Electricity costs are estimated to increase by 27% (3.6 cents per
kWh) relative to baseline level in 2020, rising by 44% (5.8 cents per kWh) in 2025.

In 1989, coal companies and the Edison Electric Institute hired Temple Barker and Sloane, a pro-industry research organization, to conduct an economic analysis of the effects of a cap & trade system on sulphur dioxide (SO2), the main pollutant that causes acid rain.

Their projections proved to be wildly inaccurate. They estimated the acid rain cap & trade program would “cost electric utility ratepayers $5.5 billion annually between enactment and the year 2000, increasing to $7.1 billion per year from 2000-2010.” In fact, electricity prices actually dropped:

Average electric rates dropped from 8.05 cents per kilowatt hour when the Clean Air Act was passed in 1990 (calculated in 2000 dollars) to 7.48 cents per kwh . . . in 1995, to 6.81 cents per kwh . . . in 2000. By 2006, electricity was up slightly to 7.63 cents per kwh (2000 dollars) but still 5 percent less than before the acid rain program began.

What’s more, by 2003, the Congressional Budget Office concluded that the acid rain cap & trade program had “the largest quantified human health benefits – over $70 billion annually – of any major federal regulatory program implemented in the last 10 years, with benefits exceeding costs by more than 40:1.” In 2002, The Economist magazine called it “the greatest green success story of the last decade.”

Today, the U.S. Chamber of Commerce has hired CRA International, who has Howard W. Pifer III, founding director of the Energy & Environment Group at Temple, Barker & Sloane, as a senior adviser, to analyze the effects of a cap & trade system for carbon dioxide (CO2). Their analysis makes similar dire projections about the price of electricity. The faulty logic is similar. As Dan Weiss of the Center for American Progress explained, these studies “base their cost assumptions on existing technologies and practices, which means that they do not account for the vast potential for innovation once binding reductions and deadlines are set.”

According to Laurie Johnson, chief economist of the Natural Resources Defense Council, their analysis does not consider any efficiency or technological improvements, actually finds the economy would grow 72% by 2030 even with a cap and trade program, and “does not even pretend to model” the Waxman-Markey American Clean Energy and Security Act. Read more of her analysis here.

Rep. Louie Gohmert Bashes Economist John Reilly: ‘He May Go To M-I-T But He Is An N-U-T’

Louie GohmertRep. Louie “InterContinental Shelf” Gohmert (R-TX) has bashed an MIT economist for daring to say Republicans are “just wrong” about his work on clean energy policy. Dr. John Reilly, a co-author of the 2007 “Assessment of U.S. Cap-and-Trade Proposals,” has criticized the repeated misuse of his work to fabricate a “$3100 lightswitch tax” for setting global warming standards with a cap-and-trade system as “misleading,” “unrealistic,” and “silly.” In an interview with the right-wing outlet CNS News, Gohmert, a two-term representative from the Dallas area, attacked Reilly’s sanity:

Anyone who thinks you can pay $3,100 to the federal government and thinks you can get that money back completely in services — like I said — he may go to M-I-T but he is an N-U-T.

Gohmert’s uncontrolled emission is consistent with the behavior of his fellow conservatives, willfully refusing to admit they’ve been caught in a lie. Every time Reilly attempts to explain the error of their ways, starting over a month ago, the GOP and the right-wing machine redouble their efforts. The Republicans for Environmental Protection, a group of conservative conservationists, have offered one possible explanation why so many leading Republicans, from House whip Eric Cantor (R-VA) to Budget Committee ranking minority member Sen. Judd Gregg (R-NH), keep on lying:

Few except special interests and politicians who do their bidding would argue that limiting emissions that put human health and the environment at risk puts a burdensome “tax” on American families and businesses.

In his two terms, Gohmert has received $22,500 in contributions from the coal sector and $212,313 from Big Oil — enough to pay a mythical $3100 tax for 76 years.

Update

In a remarkable coincidence, a pollution front group, the American Energy Alliance, is running radio ads targeting swing Democrats on the House Energy and Commerce Committee, repeating the MIT lie:

The AEA ads erroneously state that draft legislation proposed by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) “could cost our family’s [sic] more than $3,100 per year in new taxes.”


Update

,As a commenter pointed out, Gohmert is from Tyler, a Dallas suburb, not the city of Dallas proper.

Nobelist Krugman attacks “junk economics”: Climate action “now might actually help the economy recover from its current slump” by giving “businesses a reason to invest in new equipment and facilities”

Nobel prize-winning NYT columnist Paul Krugman has an excellent piece on climate economics 101, “An Affordable Salvation.”  It follows an economic lesson he gave on his blog to anti-green Washington Post columnist Robert Samuelson.  Krugman explains:

It’s important to understand that just as denials that climate change is happening are junk science, predictions of economic disaster if we try to do anything about climate change are junk economics.

Yes, limiting emissions would have its costs. As a card-carrying economist, I cringe when “green economy” enthusiasts insist that protecting the environment would be all gain, no pain.

But the best available estimates suggest that the costs of an emissions-limitation program would be modest, as long as it’s implemented gradually. And committing ourselves now might actually help the economy recover from its current slump.

I do not believe climate action is all gain, no pain — and try hard not to leave that impression on this blog.  I run through what the most credible major independent studies find here:  “Intro to climate economics: Why even strong climate action has such a low total cost — one tenth of a penny on the dollar.”

Krugman cites similar findings from EPA and the Emissions Prediction and Policy Analysis Group at the Massachusetts Institute of Technology:

Read more

Energy and Global Warming News for May 1: Australian scientists get desperate and blunt

Top Story

Dear coal plants, you’re doomed

In Australia, desperate times call for hard truths. The island nation is experiencing the most severe effects of global warming of any inhabited region on earth today (see “Global Boiling: Australia’s Hellish Black Saturday Of Extreme Fire“).  Most scientists believe the continent’s extreme heat and water shortages mark only the beginning of what will be a rapid deterioration in conditions needed to sustain life (see “Australia today offers horrific glimpse of U.S. Southwest, much of planet, post-2040, if we don’t slash emissions soon“).

A group of climate scientists with intimate knowledge of these dire circumstances have written a refreshingly blunt letter to the heads of Australia’s coal industry:

Evidence is mounting that climate change is occurring faster than previously predicted and we are perilously close to a number of tipping points which, if passed, would amplify the effects of climate change and make it much more difficult to bring further warming under control. We cannot emphasize enough just how serious the situation has become.

Their bottom line:

Unfortunately, the development of carbon capture and storage technology is not sufficiently advanced and is unlikely to be deployable within the timeframe necessary to cut emissions in order to avoid unacceptable levels of greenhouse gas concentrations and associated warming.

It is our considered view that no new coal-fired power stations, except ones that have ZERO emissions, should be allowed to be commissioned in Australia. Furthermore, we need an urgent program to replace existing coal plants with zero-carbon energy sources and energy efficiency programs as soon as possible….

Genuine action on climate change will mean that coal-fired power stations cease to operate in the near future.”

Amen. How serious will the situation have to get before leaders in the big polluting nations, such as ours, come to the same conclusion.

Read more

Ponzi redux: Scientific American asks “Could Food Shortages Bring Down Civilization?”

We desperately need a new way of thinking, a new mind-set. The thinking that got us into this bind will not get us out. When Elizabeth Kolbert, a writer for the New Yorker, asked energy guru Amory Lovins about thinking outside the box, Lovins responded: “There is no box.”

There is no box. That is the mind-set we need if civilization is to survive.

It’s not news that Lester Brown is warning about our unsustainable approach to feeding the planet.  But it is news that Scientific American has run a major article by him on how “The biggest threat to global stability is the potential for food crises in poor countries to cause government collapse.”

Brown’s “Key Concepts”:

  • Food scarcity and the resulting higher food prices are pushing poor countries into chaos.
  • Such “failed states” can export disease, terrorism, illicit drugs, weapons and refugees.
  • Water shortages, soil losses and rising temperatures from global warming are placing severe limits on food production.
  • Without massive and rapid intervention to address these three environmental factors, the author argues, a series of government collapses could threaten the world order.

Brown’s warnings, ignored for too long, are now being repeated at the highest levels.  For instance, I previously blogged on the UK government’s chief scientist, Professor John Beddington, who laid out something very close to this collapse scenario in his speech yesterday to the government’s Sustainable Development UK conference in Westminster (see “When the global Ponzi scheme collapses (circa 2030), the only jobs left will be green“):

Read more

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