Natural Gas Damage Larger Than Its Value Added For Even Low CO2 Prices

Coal does more harm than good.

Okay, public health experts have known this for a while — see Life-cycle study [Epstein et al]: Accounting for total harm from coal would add “close to 17.8¢/kWh of electricity generated.”

But now we have some of the leading (center-right) economists in the country — Nicholas Z. Muller, Robert Mendelsohn, and William Nordhaus — making this case in a top economic journal, the American Economic Review.  Their article, “Environmental Accounting for Pollution in the United States Economy” [aka MMN11], models the impact of emissions of six major pollutants (sulfur dioxide, nitrogen oxides, volatile organic compounds, ammonia, fine particulate matter, and coarse particulate matter) from the country’s 10,000 pollution sources.

Nobel Prize-winning economist Paul Krugman summarizes the core conclusions in his post, “Markets Can Be Very, Very Wrong.”

Consumers are paying much too low a price for coal-generated electricity, because the price they pay does not take account of the very large external costs associated with generation. If consumers did have to pay the full cost, they would use much less electricity from coal — maybe none, but that would depend on the alternatives.

At one level, this is all textbook economics. Externalities like pollution are one of the classic forms of market failure, and Econ 101 says that this failure should be remedied through pollution taxes or tradable emissions permits that get the price right.

What is all the more remarkable about this conclusion is that the authors use an uber-low, uber-lame, uber-outdated “price” for CO2:

We use the social cost of carbon for the year 2000. This cost will rise over time as greenhouse gases accumulate and marginal damages increase. We assume that the central estimate of the social cost of carbon is $27 per ton of carbon (Nordhaus 2008b).

Seriously.

Nordhaus 2008b is Nordhaus’s 2008 book, A Question of Balance: Weighing the Options on global Warming Policies.  It was total bunk back in 2008.  I read it but I never got around to debunking it.  Didn’t think it was relevant given that it was instantly out of date.  Alas.

The actual social cost of carbon today is at least 5 times that price and more than 10 times that in the near future (or now, see here).  As but one example, the relatively Conservative International Energy Agency (IEA) noted back in 2008 that just to stabilize at 550 ppm, which would likely still be catastrophic for humanity, you’d need a price of “$90/tonne of CO2 in 2030,” which is to say $330 a metric ton of carbon.  You need a 2030 CO2 price of “$180/tonne in the 450 Policy Scenario” — $660 a metric ton of carbon.

And let’s not forget the work of Martin Weitzman on the impact of even a small chance of catastrophic impacts — see Harvard economist: Climate cost-benefit analyses [like Nordhaus's] are “unusually misleading,” warns colleagues “we may be deluding ourselves and others.”

The fact is that on our business as usual emissions path, we have a very high chance of catastrophic impacts, not the 3% or so chance Weitzman estimates (see “An Illustrated Guide to the Science of Global Warming Impacts“).

And yet Nordhaus and company still find that the total damages from natural gas exceed its value-added at a low-ball carbon price of $27 per ton! At a price of $65 a ton of carbon, the total damages from natural gas are more than double its value-added!

And so once again the literature makes clear that a massive ramp up of natural gas ain’t the solution to global warming –  as many 2011 analyses have found, including the IEA’s.  Needless to say, if natural gas does more harm than good, you can imagine how bad coal is.

Skeptical Science has a longer discussion of this important paper, which I repost below.

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by Daniel J. Weiss

Governor Rick Perry (R-TX) plans to unveil his energy plan at a speech in Pittsburgh tomorrow.  Based on his description in Manchester Union Leader and other comments, the Perry proposal bill is a Big Oil wish list masquerading as an energy plan.  It would allow so much more oil drilling on federal lands and in waters that it is “drill, baby, drill” gone wild.

By gutting health safeguards from air pollution, it is a recipe for more premature deaths and hospitalizations, with few additional jobs, and no investment in the fast growing clean tech sector. The Perry Petroleum Plan looks backwards by reviving the Bush – Cheney plan developed in secret with big oil companies rather than providing a path to cleaner, more efficient energy production and consumption — the road our economic competitors are racing on.

Perry implored during Tuesday’s presidential debate that we must “get America independent on the domestic energy side.”  He must not know the Obama Administration has already made significant progress to reduce dependence on foreign oil.  The Energy Information Administration reports that domestic oil production is up ten percent while imports are six percent lower from 2008 to 2011.  Meanwhile, domestic oil use is down two percent, with additional oil savings due to new, improved fuel efficiency standards for vehicles.  Over the next decade, the growth in U.S. domestic oil production will outpace the progression in oil demand.

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by Joceyln Fong and Jill Fitzsimmons, in a Media Matters cross-post

Harmonizing with the Republican agenda, Fox News and Fox Business have launched a full-scale attack on the Environmental Protection Agency (EPA), labeling the agency “job terrorists” who are “strangling America.” What follows is a list of Fox’s top 10 lies about the EPA this year.

Fox’s Attacks On EPA Coincide With Republican Agenda

Fox’s Regulation Nation Series Aired After GOP Launched “Regulation Nation” Website. In mid-September, Fox News and Fox Business began a series of segments critical of government regulations under the banner Regulation Nation. The series title echoes the House Republican Conference, which has had its own “Regulation Nation” website since at least June. [GOP.gov, accessed 10/4/11]

Fox’s Regulation Nation Coincided With Start Of Republican Anti-Regulatory Push. In an August 29 memo, House Majority Leader Eric Cantor (R-VA) identified ten “job-destroying regulations” that will be the targets of the Republican legislative agenda in the coming months. Seven of the ten are EPA rules. The memo indicated that September 12 would be the start date for Republicans’ anti-regulatory push – the same day Fox launched its Regulation Nation series. [Majorityleader.gov, 8/29/11] [Media Matters, 9/12/11]

Push For Fox Regulation Series Reportedly Came From The Top. In a story for Newsweek, Howard Kurtz quoted Fox News president Roger Ailes — who worked as a Republican consultant for decades before transitioning to television — stating that he was behind the network’s Regulation Nation series:

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The U.S. populace agreed the price drop signaled the beginning of a new era of American prosperity.

From America’s Finest News Service:

With gasoline prices dropping a full 26 cents from where they were a month ago, a new era of confidence and hope washed over Americans this week, confirming the United States is once again the greatest nation in the world.

Arriving amidst an intractable 10-year military occupation of Afghanistan, the decreasing likelihood that workers will be able to retire at 65, and a wildly fluctuating stock market, today’s announcement that the national average price of self-serve regular has fallen to $3.39 verified that the worries of the past are now officially behind us, and that the U.S. stands alone as the world’s preeminent superpower.

“Finally, we have indisputable proof that America is back and absolutely better than ever,” Treasury Secretary Timothy Geithner told members of the press while pointing to a large board displaying the nation’s average prices for regular, plus, and premium petroleum. “This dip in gas prices marks the triumphant return not only of our economy and financial system, but of the supremacy of the American way of life itself. Though there were some dark times when we paid a few cents more per gallon, we’re now paying less, and that means everything is great again once more.”

“And to think any of us ever doubted the United States was the very best nation in existence,” Geithner added.

As news of the 26-cent gas price decline spread across the nation, Americans everywhere expressed deep relief that the difficulties of the past few years—from global climate change, to the debt ceiling debate, to an unemployment rate hovering near 10 percent—had all been utterly negated thanks to the fact that one can now pump fuel into one’s car at a somewhat lower price.

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Now that it’s politically convenient, Darrell Issa, Chairman of the House Government Reform Committee, calls government loan guarantees “picking winners and losers.” He apparently didn’t feel that way when advocating for nuclear loan guarantees.

Issa is also one of 62 Republicans in Congress who requested government assistance for cleantech projects for “domestic job creation” before he started calling clean energy jobs “unproven.”

In an effort to tarnish the White House as much as possible this election season, many members of the Republican House leadership have reversed their previous support for government help in the clean energy sector and are now using the Solyndra investigation to stand against any federal involvement in the energy sector.

As more journalists question the strategy, Issa is finally responding. Speaking to Politico, Issa danced around hypocrisy of his request letter and started blaming the administration for an unproven “violation of the law,” never addressing the actual problem: That he favored government assistance in his district before it was convenient to be against it.

“Letters don’t mean very much. But the people able to make that decision or able to force somebody to make that decision, that’s where I think we look at whether it’s right or wrong,” he said. “Letters saying ‘please look’ are very different, and the administration knows that. And they were very disingenuous in trying to say that somehow there was any equivalency between being able to run in violation of the law, subordinate a loan and give some additional money to a failing company and a company who wasn’t getting an answer at all and a number of members sent letters.”

In deflecting the issue, Issa sounds a lot like Vanilla Ice when he defended the uncredited sampling of Queen and David Bowie’s song “Under Pressure” for his famous song, “Ice, Ice, Baby.”

By Tom Kenworthy, Senior Fellow, Center for American Progress Action Fund.

While many congressional Republicans from the West have spent much of 2011 working to undermine land conservation efforts, gut environmental protections, and promote reckless energy and mining developments, western governors have quietly launched a positive agenda to bolster their region’s economy by supporting recreation and tourism.

Led by Chairwoman Gov. Christine Gregoire (D-WA), the Western Governors’ Association is pushing a “Get Out West!” initiative that builds on the region’s most sustainable source of economic vitality: its wide open spaces, protected lands and waters, and endless recreational opportunities. “We in the West have a God-given asset to show the rest of the country and the world,” Gregoire said in an address earlier this month to the Outdoor Industry Association. She continued:

The Western Governors’ Association is working with a wide range of outdoor recreation businesses and organizations to measure the many ways that western states benefit from all types of outdoor recreation – especially in rural communities. I can’t overstate how much rural communities could use the jobs that would come with more people seeking recreation.

Gregoire understands the importance of economic sectors that are sustainable over time, that only grow if we take care of western natural resources and steer boom and bust extractive industries like oil and gas to those areas where it is appropriate and can be done responsibly.

The huge economic and job creation potential from recreation, land conservation, and restoration of degraded lands was highlighted in a recent Center for American Progress report, “The Jobs Case for Conservation.” The report identified 15 government policies that could spur job creation through conservation and restoration.

And the economic value of sound conservation policies is well understood by the huge industry that underpins outdoor recreation and contributes $730 billion a year to the U.S. economy and supports 6.5 million jobs, according to the Outdoor Industry Association. Recreation and tourism at the Department of the Interior alone supported 388,000 jobs in 2010.

Recreation industry leaders are serving as advisers to the western governors’ Get Out West! initiative, and battling efforts by congressional Republicans to undermine sensible conservation policies.

In an August letter to Utah’s governor and congressional delegation, for example, leaders of that state’s $4 billion a year outdoor recreation industry strongly protested efforts to cut federal funding for land conservation, block the president’s authority to create new national monuments, and strip protections against development from some 43 million acres of western land.

Those bills, the industry representatives wrote, are:

[A] significant threat to the values shared by many Utahans, including clean air, clean water, wildlife, and love for our spectacular outdoors and our outdoor recreation opportunities…[and] could also have negative impacts on the long-term viability of our industry and local economies across Utah.

In a pointed reminder, the outdoor industry leaders said it was “ironic” that congressional debate on those measures was taking place shortly after the industry wrapped up its summer trade show in Salt Lake City, a $23 million windfall for the state’s largest city. “We would like to emphasize that it is Utah’s spectacular wild lands and outdoor recreation opportunities that keep our industry coming back to Salt Lake City twice a year for its massive trade shows,” the letter said.

Eight years ago, the OIA threatened to move its trade show after then-Gov. Michael Leavitt cut a back-door deal with the Bush administration to remove interim wilderness protections for 2.6 million acres of federal land in Utah.

The OIA eventually backed off that threat. Maybe reviving it will knock some sense into Utah politicians and help them follow the lead of Gregoire and the Western Governors’ Association.

Stanford public opinion expert Jon Krosnick and his colleagues analyzed the 2008 presidential election and the 2010 congressional election.  They found:

“Democrats who took ‘green’ positions on climate change won much more often than did Democrats who remained silent,” Krosnick said. “Republicans who took ‘not-green’ positions won less often than Republicans who remained silent.”

I asked Krosnick by email about the implications of his research for the President who has all but dropped “climate change” from his vocabulary.  Krosnick answered:

Our research suggests that it would be wise for the President and for all other elected officials who believe that climate change is a problem and merits government attention to say this publicly and vigorously, because most Americans share these views.  Expressing and pursuing green goals on climate change will gain votes on election day and seem likely to increase the President’s and the Congress’s approval ratings.

I’ve talked to senior officials from the Administration as well as journalists who cover them — and both groups report that team Obama has bought into the nonsensical and ultimately self-destructive view that climate change is not a winning issue politically (see “Can you solve global warming without talking about global warming?).

And it is nonsense.  Prof. Edward Maibach, Director of George Mason University’s Center for Climate Change Communication, made the exact same point in a Climate Progress guest post last month: “Polling Expert: Is Obama’s Reluctance to Mention Climate Change Motivated by a False Assumption About Public Opinion?”

At the end, I repost yet again the umpteen polls that support this painfully obvious conclusion.  This new election analysis supports earlier polling analysis by Krosnick, which found:

“Political candidates get more votes by taking a “green” position on climate change – acknowledging that global warming is occurring, recognizing that human activities are at least partially to blame and advocating the need for action – according to a June 2011 study by researchers at Stanford University.”

Krosnick’s new study, “The Impact of Candidates’ Statements about Climate Change on Electoral Success in 2008 and 2010: Evidence Using Three Methodologies” here.  Let’s look at some more of its findings,  particularly at the presidential level:

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Anyone who follows the clean energy industry knows it isn’t a fad. The macro environmental and economic drivers like climate change, limited fossil energies, and the growing global demand for reliable, clean energy sources are simply too strong.

No one should pretend the transition is easy. But it’s inevitable.

That’s why it makes me shudder when I read words like “green energy isn’t going to be the solution” from Congressional political leaders like Cliff Stearns, who recently criticized the industry as “not viable.”

Well, guess what Mr. Stearns? The private-sector executives who actually know something about this industry don’t agree with you. A new survey of 128 cleantech executives released yesterday by the law firm Cooley LLP finds that 74% see strong growth in this industry over the next five years — even with federal heel-dragging under a business as usual scenario.

“Our survey confirms there is an overwhelming belief by clean tech investors and entrepreneurs that private sector investment in clean tech will continue to rise. I believe that this studied enthusiasm is based on the fact that we are still just at the beginning of a multi-decade energy transformation,” said Tom Amis, co-chair of Cooley’s Clean Energy & Technologies practice and based in the firm’s Washington, D.C. office. “Yet, the near term certainly presents some challenges for both investors and entrepreneurs.”

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by Cole Mellino (with JR’s commentary at the end)

Walmart’s million-dollar donation to Growing Power, an urban farm that employs teens in a low-income neighborhood in Milwaukee, has created a lot of controversy.

This is nothing new for the world’s largest retailer, grocer, and private employer. Walmart has been criticized for unfair labor practices, gender discrimination, creating wasteful products, and even destroying entire communities.

Many charitable campaigns or sustainability initiatives Walmart undertakes tend to be met with suspicion from the company’s critics, who contend that the company is merely trying to improve its public image. But on the sustainability front, Walmart says it does care — primarily for financial reasons. Saving energy saves money. And meeting the demand for organic foods makes money.

Over the past few years, Walmart has rolled out a number of sustainability initiatives like improving the efficiency of its truck fleet, installing solar at 30 locations, launching initiatives to support small farmers, and reducing greenhouse gas emissions by 20 million metric tons by 2015, among many others.

Walmart’s critics are skeptical. But as Fred Krupp, president of the Environmental Defense Fund (EDF), an organization that works closely with Walmart to green its operations, points out: “The whole idea is to change the world. If you want to change the world, it’s important to work with some of the big forces in the world.”

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The Justice Department filed a lawsuit against Transocean on Wednesday to force the company to comply with subpoenas from the U.S. Chemical Safety and Hazard Investigation Board (CSB), an independent agency investigating the April 2010 explosion of the Deepwater Horizon drilling rig and the Gulf of Mexico oil spill that followed. The lawsuit says Transocean has failed to comply with five subpoenas between Nov. 24, 2010 and April 7. A separate federal investigation found in September that Transocean’s rig crew made mistakes that led to the rig’s blowout and millions of barrels of oil flowing into the Gulf.

And U.S. offshore drilling officials issued citations to Transocean and Haliburton, which were contractors on the rig, as well as BP, which operated the drilling rig. The citations mostly likely will lead to fines, which could be $35,000 per day of the leak under the Outer Continental Shelf Lands Act. The deepwater oil well leaked for 87 days in 2010. In a statement, the Interior Department said penalizing the contractors along with BP “reflects the severity of the incident.”

The Nobel-Prize winning former Vice President writes on his blog:

From the economy to the climate crisis our leaders have pursued solutions that are not solving our problems, instead they propose policies that accomplish little. With democracy in crisis a true grassroots movement pointing out the flaws in our system is the first step in the right direction. Count me among those supporting and cheering on the Occupy Wall Street movement.

You can support the protests by clicking here.

Here’s more from his post:

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Other stories below:  U.S. to impose sanctions on BP, Gulf spill contractors; NASA Launches New Climate & Weather Satellite; Clean Energy Investment Rises 16%.

Natacha Pisarenko/AP

New Zealand Closes Beaches as Containers Wash Up

Several beaches on the east coast of New Zealand’s North Island were closed to the public from Thursday and operations at the Port of Tauranga will be suspended overnight, after oil and containers from a damaged cargo vessel washed ashore, with concerns that things might get worse as salvage efforts remain fraught with danger.

“It is really horrible. I really didn’t think it would affect us. It’s awful,” said Cathy Lake, 40, a resident of Tauranga. “I just don’t know how it could have happened.”

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