Sunday, June 15, 2014
The Stockpile Solution for curbing fossil fuel use:
Bryan Caplan is being a bit silly below. Stockpiling a commodity would raise its price and draw out more supply. And eventually the government would run out of money to build their ever-bigger stockpiles
If I were convinced that the fate of mankind hinged on massive reductions in carbon emissions, I would still be pessimistic about unilateral taxes or cap-and-trade. As I told Yoram:
National emissions regulations can have perverse global effects. If relatively clean countries switch to clean energy (via command-and-control regulations, cap-and-trade, pollution taxes, or green norms), fossil fuels don't vanish. Instead, their world price falls - encouraging further consumption in relatively dirty countries. The net effect? I was hoping Bauman would tell us, but he didn't even raise the issue.
International tax or cap-and-trade treaties seem almost equally flawed. Some countries will sign; others won't. In a world market, won't the fossil fuels the participants stop using just find their way into the hands of the non-participants? On a homework problem, admittedly, you can solve this problem with punitive carbon tariffs on non-signatories. In the real world, though, won't this lead recalcitrant countries to sign the treaty, then fail to domestically enforce it?
Yesterday, I hit upon an alternative policy that avoids all these problems: Stockpiling. Instead of taxing or capping pollution, a government could unilaterally buy lots of fossil fuels and sit on them forever. This would raise the world price of fuel, spurring reduced consumption around the globe. And since the government only pays for fossil fuels it actually receives, energy producers around the globe have no incentive to thwart the policy. Indeed, industry has a strong incentive to participate and support the re-imagined war on carbon.
After I proposed this idea, GMU prodigy Nathan Bechhofer quickly showed me that I was reinventing the wheel. Stockpiling is the heart of Bard Harstad's "Buy Coal! A Case for Supply-Side Environmental Policy" (Journal of Political Economy, 2012). The original piece is math-heavy, but here's a readable write-up.
A fundamental problem with adopting a "demand-side mindset" that implements policy to reduce fossil fuel consumption is that not everyone takes part, Harstad argues. An international agreement between coalition countries to curb oil consumption will initially have the desired effect of reducing overall demand, but this will lower the price of oil, giving a strong incentive to countries outside of the agreement to buy and use more.
On the other hand, Harstad argues, if an international agreement decides to limit oil extraction and supply, the price will go up, and countries outside of the agreement are likely to churn out more for export.
"Both on the demand-side and the supply-side the result is carbon leakage, which is an increase in pollution abroad relative to the emission-reduction at home," says Harstad, who is associate professor of managerial economics & decision sciences at Northwestern University's Kellogg School of Management. Carbon leakage describes the process by which carbon-cutting measures in one location cause knock-on emissions elsewhere.
The Harstad solution:
Harstad's solution is for coalition countries to buy up extraction rights in countries outside of such agreements--"third countries," in his terminology. And though this has the obvious benefit of preventing emissions from those fossil fuels, there are rather more far-reaching implications.
Coalition countries will naturally focus on marginal deposits least profitable for host countries, because these can be had the most cheaply. After a third country has sold off the rights to its marginal deposits, Harstad argues that its supply is less sensitive to fluctuations in global fuel price. Coalition countries are then able to limit their own supplies without the undesirable effect that third countries will increase theirs. The price of fuel is equalized universally. Harstad goes so far as to assert that the equalized price is high enough that even third countries would be compelled to pursue alternative energy technology, and sign up to coalition agreements.
Notice that in Harstad's version of the proposal, the government stockpiles fossil fuel extraction rights rather than fossil fuels themselves. Given monitoring and commitment costs, though, buying extraction rights is a recipe for corruption. It's easy to inflate a geological report if the everyone knows the customer will never extract the resources he imagines he's buying. And after the U.S. acquires and closes a Chinese coal mine, who keeps out the wildcatters - and why won't the watchmen just take bribes to look the other way? Physical stockpiling preempts all of these problems.
To repeat, I don't actually favor this policy. But if a government wants to curb carbon emissions, stockpiling seems like the smart way to do it. Am I wrong?
Cavuto: When I first became a global warming 'doubter'
I don't know how you feel about this global warming issue. But I first became a doubter when they re-branded the issue and started calling it climate change. It was brilliant on environmentalists' part because it covered any contingency. Warming, cooling, raining, misting, everything. After all, climate's always changing, so try arguing that one.
But let's remember how all this started. With dire predictions of warmer winters and soon, no winters, and if we didn't do anything about it, no us either.
So forget about whether they were calling it global warming then or climate change now, we, mankind had to do something about it, and fast.
But wait a minute. I think I've heard this dire talk before. Not about the earth warming, about the earth cooling.
Thirty-something years ago it was all the rage. And I should know, thirty-something years ago today I graduated high school. (do you really think I'm going to tell you the exact number) Did any of us look like the world was about to end? I didn't know it. And look at my mom and dad? Do they look like they knew it?
Thank god Leonard Nimoy knew it, and in this super scary TV special back in May 1978, Spock wasn't afraid to say it.
"The next Ice Age is on its way and could come sooner than anyone had expected. At weather stations in the far north temperatures have been dropping for 30 years. According to some climatologists, within a lifetime we might be living in the next Ice Age"
Is it over? But it wasn't over, and it didn't stop with Spock. I'm telling you this was the whole 1970s. I lived through it! And all this time you thought all I had to worry about was leisure suits.
Try this not so leisurely warning on May 21,1975, from the New York Times warning about "a major cooling ahead."
Or this time magazine cover from December. 3, 1973 warning about "The Big Freeze."
And in case anyone missed it, this other Time Magazine cover. Different picture. Same warning, January 31, 1977.
And just in case anyone missed those, a cozy Christmas cover, heralding, "The Cooling of America."
Not to be out-done, rival Newsweek on April 28, 1975 detailed ominous signs of "The Cooling World," including this uplifting nugget, "If the climatic change is as profound as some of the pessimists fear, the resulting famines could be catastrophic."
So now I'm freezing and starving! No Yodels. No Ring Dings. No anything! Food gone. Freeze on.
Everyone reported it. Nobody questioned it. The entire scientific community in lockstep with it. And doubters were idiots if they denied it.
Governments had better get cracking, or humans would be all but frozen in their evolutionary tracks. Well? Not quite.
So maybe that's why me and my parents didn't look so panicked back then. Maybe that's why you didn't see one strand of my Lego hair out of place back then.
We weren't oblivious. We were onto this. But that was then. We wouldn't be so stupid now. Or would we?
Evidence Trumps the Phony Consensus
by Viv Forbes. Viv has many academic qualifications and has worked in many occupations but he is at present probably Australia's skinniest farmer
We are lectured monotonously about the “consensus” that carbon dioxide produced by human activities is “highly likely to cause dangerous global warming”. The alarmist computer models are all based on this assumption, with predicted warming multiplied by also assuming strong positive feedbacks.
A consensus of opinion never determines a scientific question – real proof depends on evidence and logic. Consensus is a tool of politics and a guidepost for lemmings.
The so-called “Greenhouse Effect” depends entirely on the known property of carbon dioxide gas to intercept radiant heat in certain wavelengths. This process starts operating as soon as the extra gas enters the atmosphere.
If this influence is strong enough to drive “dangerous global warming”, its effect should be noticeable even in the short term, with Earth’s surface temperature increasing in step with increasing carbon dioxide.
Carbon dioxide in the atmosphere has been steadily increasing for over a century, but global temperatures have fluctuated in broad cycles decades long, and there has been no warming for the last 17 years.
This evidence suggests that increasing carbon dioxide is not a major driver for dangerous global warming, no matter what the consensus says – even if a million people say a foolish thing, it is still a foolish thing.
We may still get natural global warming, as the vast restless oceans roll over or the solar cycles change, but man-made carbon dioxide is not driving these processes. Moreover, a bit of warming is not our greatest risk – history shows that ice ages extinguish more species and habitats than warm eras.
The consensus of alarmists is trying to lynch an innocent party.
U.S. Gov’t Spends $50K on Green Cooking Alternatives
The National Science Foundation has awarded a $50,000 grant to the University of Illinois at Urbana-Champaign to develop stored solar stoves as a solution to the “global cooking problem.”
“The World Health Organization asserts around 3 billion people still cook and heat their homes using solid fuels in open fires and leaky stoves. Such cooking and heating produces high levels of indoor air pollution with a range of health-damaging pollutants, including small soot particles that penetrate deep into the lungs,” the grant said.
“In poorly ventilated dwellings, indoor smoke can be 100 times higher than acceptable levels for small particles. Exposure is particularly high among women and young children, who spend the most time near the domestic hearth,” said the grant. “Nearly 2 million people a year die prematurely from illness attributable to indoor air pollution due to solid fuel use.
The grant noted that “considerable time” is wasted for women and children on fuel gathering, taking away time from other productive activities like school. It also noted that, “in less secure environments, women and children are at risk of injury and violence during fuel gathering.”
The grant cited “non-renewable harvesting of biomass” as a contribution to climate change. It also warned that “methane and black carbon” climate change pollutants can result from the emission of from inefficient stove combustion.
“Non-renewable harvesting of biomass contributes to deforestation and thus climate change. Methane and black carbon (sooty particles) emitted by inefficient stove combustion are powerful climate change pollutants,” the grant said.
“The proposed technology addresses this large market and a corresponding domestic market that seeks green cooking alternatives with a no-fuel and no-flame device that stores energy to cook when the user needs it,” the grant said.
“In this proposal, the team proposes a strategy of concurrent (a) research, (b) development, and (c) field testing, with each of the three efforts informing the others. This three-pronged approach uses the lean start-up model which advocates interaction with end users and avoids prolonged R&D around solutions that may not be adopted in the field,” the grant added.
The grant recipient plans to work with state and national parks to develop a prototype as well as with local parks and campgrounds for input.
“The team intends to work with state and national parks to develop prototype grills/stoves for testing, and will also work with local parks, campgrounds, and university/campus facilities to gain input for development of prototypes,” the grant said.
“Preliminary feedback from park facility managers indicates a very high level of enthusiasm for a green, clean, fuel-free cooking alternative that reduces fire risk, and there are 215,000 state park campsites alone,” it added.
Calls to Bruce Elliot-Litchfield, principal investigator for the grant, were not returned by press time.
Obama national monument designations destroy communities, extinguish mining claims
President Obama is in trouble with his usual allies, not to mention his ever-ready opponents, over two recent acts of excessive executive power: the Bergdahl prisoner swap and the new CO2 regulations announced on Monday, June 2.
Senator Diane Feinstein (D-CA), Senate Intelligence Committee chairman, has been publicly critical of the administration’s decision not to adhere to a law requiring 30 days’ notice to Congress before releasing detainees from the Guantanamo Bay facility in Cuba. Bloomberg reports: “she’s not convinced there was a ‘credible threat’ against the life of freed Army Sergeant Bowe Bergdahl that motivated the White House to keep its plans secret.”
Regarding the CO2 regulations, Senator Mary Landrieu (D-LA), Senate Energy and Natural Resources Committee chairman, has come out against the president’s approach, saying: “This should not be achieved by EPA regulations. Congress should set the terms, goals and timeframe.” Representative Nick Rahall (D-WV), who, like Landrieu is in a tough reelection fight, has come out with even stronger opposition to the president’s plan calling it: “Overreaching, overzealous, beyond the legal limit.” Rahall says the actions of the EPA “have truly run amok.”
Both stories have dominated the news cycle for the past week. Yet, just a couple of weeks earlier, another story of executive overreach got little coverage and the affected allies stood by the President’s side as he signed an order creating, what the Washington Post called: “the largest national monument of the Obama presidency so far.”
After years of heated local debate and despite polling that shows the people are not behind the president, on May 21, Obama declared the Organ Mountains-Desert Peaks region of New Mexico, nearly 500,000 acres, a national monument—his eleventh such designation “so far.” Senators Tom Udall and Martin Heinrich, and Representative Ben Ray Lujan, (all D-NM) were present at the signing ceremony. The official Department of the Interior photo shows each of them with big smiles as they look on.
They should be happy. Udall and Heinrich had previously proposed similar federal legislation. Praising the president’s effort, Udall said: “The president’s decision finally puts into motion a plan that began with the people of southern New Mexico, who wanted to ensure these special places would continue to be available for local families and visitors to hike, hunt and learn from the hundreds of significant historic sites throughout the area for generations to come.”
But not everyone is smiling. The Las Cruces Sun-News (LCSN) reports: “Republican Rep. Steve Pearce, whose congressional district covers the region, issued a statement taking issue with Obama’s use of the 1906 U.S. Antiquities Act, saying monuments created under it are supposed to cover only the ‘smallest area compatible’ with the designation. He contended the approval ‘flies in the face of the democratic process.’” Pearce’s statement says: “This single action has erased six years of work undertaken by Doña Ana County ranchers, business owners, conservationists, sportsmen officials and myself to develop a collaborative plan for the Organ Mountains that would have preserved the natural resource and still provided future economic opportunities.”
Ranchers and off-road vehicle users have opposed the large-scale monument. The LCSN states: “In particular, ranchers have been concerned about impacts to their grazing allotments on public lands in the wake of the new monument.”
Steve Wilmeth, a vocal ranching advocate, whose family has been ranching in New Mexico since 1880 says his ranch, and many others with whom he’s worked side-by-side, will be impacted by the designation. “The Organ Mountains-Desert Peaks National Monument designation puts America’s ranchers on a glide path to destruction. The full implications won’t be known until the management plan is complete, but, due to the private lands that are embedded within the designation and based on historic evidence, with a single stroke of his pen, President Obama’s actions has likely put the livelihood of nearly 100 families fully in jeopardy, and, based on all other such designations will likely destroy what many, myself included, have spent a lifetime creating.”
Wilmeth’s view is based on experience. Another New Mexico rancher Randell Major, lost his ranch due to the El Malpais National Monument designation. In a letter detailing his story, Major explained: “On December 31, 1987, our area was designated as the El Malpais NCA [National Conservation Area] and National Monument. This made a third of our allotment wilderness, a third NCA, and a third non-NCA. At this time, the El Malpais NCA was to be managed by the BLM [Bureau of Land Management] and required the BLM to develop a general management plan for the management of the NCA.”
Major was told the plan didn’t affect his grazing allotment. However, he states: “after getting and reading the plan, I found out they wanted big changes on our allotment; such as the closing of most of our roads that we travel on to conduct our business—putting out salt, supplements, and repairing and maintaining our waters. They had plans to keep our livestock out of our springs for riparian area purposes. There is a long list of things that I could go on and on.”
Major says that the landowners were not included in the planning process. He quotes the BLM as saying: “It is our priority for acquisition of lands containing natural and or cultural resources requiring management or protection, and or lands needed for visitor access and facility development. For those areas where private uses are incompatible with NCA goals and purposes or where important resources are on private land.”
Major concludes: “It is my opinion that the radical environmental groups have teamed up with our federal agencies. Their goal is to take control of all the land and put ranchers out of business. It is a sad day in this country when this is allowed to happen. … My hat is off to ranchers who continue to fight for the property that belongs to them.”
On a recent radio interview featuring Congressman Pearce, Wilmeth, and Colin Woodall, Vice President, Government Affairs for the National Cattlemen’s Beef Association, discussing the new national monument, Woodhall pointed out that DC is not worried about ranchers and Pearce said: “The law allows the agencies to destroy you and there’s nothing you can do.” Agency personnel are appointed and hired by the federal government. They have great authority but little accountability—holding positions of power that can’t be voted out.
The law Pearce is referencing is known as the Antiquities Act, signed into law by President Roosevelt in 1906. The Act for the Preservation of Antiquities limited Presidential authority for National Monument designations to Federal Government-owned lands and to, as Pearce referenced, “the smallest area compatible with the proper care and management of the objects protected.” The Antiquities Act also authorized “relinquishment” of lands owned privately, authorizing the Federal Government to take land. The Constitution’s Fifth Amendment requires owners be compensated by the rest of us taxpayers. But fair market value can change dramatically when a policy change triggered by laws such as the Antiquities Act modifies the broad multiple use category for large segments of the federal estate to limited and recreational use.”
Addressing his Techado Allotment 50 miles south of Grants, New Mexico, originally purchased in 1968, Major says: “In the year 2003, we tried to be willing sellers. … They would not offer us value of the land based on neighboring comparable sales. They would not compensate us for our improvements on the allotment, such as, fences, waters, corrals, buildings, etc.”
While the Federal Government owns much of National Monument land, private, tribal and state lands are often enclosed inside new designations. Essentially, an Antiquities Act presidential proclamation transfers valuable “multiple use” land into a restricted use category as management plans can disallow historical use.
History shows that in cases where the Antiquities Act has been used—whether for a National Conservation Area, a National Park, or a National Monument—mining claims were extinguished, homes have been torn down, communities have been obliterated, and working landscapes been destroyed. The National Park Service Association’s website states: “ultimately, the Park Service is expected to own and manage virtually all privately owned lands within park boundaries. … private inholdings can disrupt or destroy park views, undermine the experience of visitors, and often diminish air and water quality while simultaneously increasing light and noise pollution. Park Service managers have stated … that privately owned land within park boundaries creates gaps that shatter the integrity of individual parks and the system as a whole, and make it more difficult and expensive for the Park Service to protect key resources.”
Proof of my claims can be found in the sad tales of federal land grabs, including what happened to the town of McCarthy, Alaska, when President Carter used the Antiquities Act to create the Wrangell-St. Elias National Monument in 1978; Ohio’s Cuyahoga River Valley’s conversion from “a patchwork of lovely scenery and structures: row crops and orchards, pastures and woodlots, barns and farmhouses, and tractors working the fields” as Dan O’Neill called it in A Land Gone Lonesome, to the Cuyahoga River Valley National Recreation Area that razed more than 450 homes; and what happened in Utah when President Clinton declared 1.7 million acres to be the Grand Staircase-Escalante National Monument that locked out a lot of ranchers and potential coal mining.
At an April 2013 Congressional hearing, Commissioner John Jones of Carbon County, Utah, told the Committee: “Please don’t insult rural communities with the notion that the mere designation of National Monuments and the restrictions on the land which follow are in any way a substitute for long-term wise use of the resources and the solid high wage jobs and economic certainty which those resources provide.”
Supporters of National Monuments often tout the economic benefits tourism will bring. Former Secretary of the Interior, Ken Salazar has said: “There’s no doubt that these monuments will serve as economic engines for the local communities through tourism and outdoor recreation—supporting economic growth and creating jobs.” The LCSN reported: “Many supporters of the Organ Mountains Desert-Peaks National Monument have argued it will boost the local economy by attracting tourists to the area.” Yet, Commissioner Jones, in his testimony, asked: “If recreation and tourism, which are supposed to accompany the designation of national monuments, are such an economic benefit to local communities, why is the school system in Escalante, Utah, in the heart of the Grand Staircase, about to close due to a continual decline in local population since the monument was created?”
Bill Childress is the Regional BLM director who will oversee the management plan for the new Organ Mountains Desert-Peaks National Monument—expected to take five years (complete and painful long after Obama is out of office). He says that “at least for now” changes will not be noticed by many people. However, according to the LCNS, “some roads or trails could be closed after that document takes effect.” The LCNS report, What’s next for the Organ Mountains Desert-Peaks National Monument?, continues: “Asked if ranchers should be concerned about curtailment of their grazing rights after the record of decision has been made, Childress said: ‘I can’t prejudge the decision. All I can say is most monument lands that the bureau manages permit grazing. We do have a few examples where that’s not the case in small areas. But, (the proclamation) acknowledges that we need to manage those and make decisions on grazing based on the existing rules, and that’s what we plan on doing.”
New Mexico ranchers know the history and they are worried. According to the LCSN: “Jerry Schickendanz, chairman of the Western Heritage Alliance, which opposed the Organ Mountains-Desert Peaks designation, said a key concern of the group is that ranching wasn’t listed prominently among the list of resources in Obama’s monument declaration.”
The impact goes beyond ranching. The LCNS reporting says: “the proclamation prevents the BLM from selling or getting rid of any of the land, allowing new mining claims or permitting oil and natural gas exploration.”
Federal land management policy has shifted from managing working landscapes populated by productive resource-based communities of ranchers, farmers, loggers, and miners, to a recreational landscape intended to delight visitors. This is especially troubling in the West where the vast majority of many states is owned by the federal government.
At the signing of the Organ Mountains-Desert Peaks National Monument Declaration, Obama repeated his State of the Union Address pledge: “I’m searching for more opportunities to preserve federal lands.” It is New Mexico today, but your community could be impacted next.
In Nevada, according to the Las Vegas Review-Journal, Senator Dean Heller (R) has just warned Obama “against designating a national monument in the Gold Butte region of Clark County.” Unlike Udall and Heinrich, who happily supported the New Mexico designation, Heller is quoted as saying: “I am extremely concerned about the impact a unilateral designation will have on my state.”
The Review-Journal states: “There has been heightened sensitivity among Western conservatives since Obama on May 21 designated 500,000 acres in the Organ Mountain-Desert Peaks region of southern New Mexico as a national monument that would allow it to be managed more like a national park. They have bristled at what they regard as federal ‘land grabs’ exercised by the president without approval by Congress, and seek to head off further designations.”
While there are some cases where Congress has abolished National Monuments and transferred the lands to other agencies, and Alaska and Wyoming have enacted legislation prohibiting the president’s power to 5,000 acres, New Mexico’s ranchers live in raw fear of the unlimited power the Antiquities Act allows the executive branch.
Hundreds of millions of acres have been set aside with the stroke of a pen. Each designation provides a photo op featuring a smiling President and his allies (Udall, Heinrich, and Lujan) with stunning pictures of the latest protected place. All while somewhere within the borders of a state or territory someone’s access is taken, someone’s hunting and fishing grounds are gone, someone’s land has been grabbed, someone’s life’s work is wiped out, and opportunities for the American dream of a future rancher, farmer, miner are dashed.
Australian PM lauds coal during Texas speech, says climate change shouldn’t limit use of fossil fuels
TONY Abbott has visited the energy capital of the USA to insist he does not want the battle against climate change to limit the use of any type of fuel.
Promoting his plan to scrap the carbon tax in front of an audience of energy executives in Houston, Texas, Mr Abbott said he wanted Australia to become a centre of cheap energy.
While he said Australia should look towards new energy sources, he said we should also focus on cheap and reliable energy.
“Affordable, reliable energy fuels enterprise and drives employment,” Mr Abbott said.
“It is the engine of economic development and wealth creation.”
“Australia should be an affordable energy superpower, using nature’s gifts to the benefit of our own people and the wider world.”
The PM defended Australia’s existing energy exports and said we have a long term future exporting black coal, LNG and uranium.
“It is prudent to do what we reasonably can to reduce carbon emissions,” he said.
“But we don’t believe in ostracising any particular fuel and we don’t believe in harming “economic growth.”
“For many decades at least coal will continue to fuel human progress as an affordable, dependable energy source for wealthy and developing countries alike.”
The speech came after Mr Abbott met US President Barack Obama and agreed to disagree on the best way to tackle climate change.
Mr Obama wants a global carbon price while Mr Abbott wants to replace Australia’s carbon tax with a $2.5 billion “direct action” plan that includes paying companies to cut emissions.
Declaring he wanted closer ties with the largest city in Texas, Mr Abbott announced he would appoint an Australian consulate-general to the boom town.
After receiving a gift of Stetson cowboy hat, Mr Abbott let the audience know he felt like an honorary Texan, saying “yee ha”.
Houston is home to more than 100 Australian companies, including BHP Billiton, Woodside, Santos, WorleyParsons, Macquarie Group, Pryme Oil and Gas, Lend Lease and Brambles.
Houston is the largest city in Texas, which has an economy the size of the 13th largest country in the world.
Mr Abbott said the consulate-general Houston would allow Australia to “maximise the two-way trade and investment opportunities of the US energy revolution”.
Mr Abbott will today meet with a business delegations before visiting the Texas Medical Centre — the largest of its kind in the world — to promote his plan for a $20 billion Medical Research Future Fund.
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Posted by JR at 12:36 AM