Wednesday, October 11, 2023
Wrong, CNBC and U.S. Treasury Department, Climate Change Is Unlikely to Impose New Costs on Households
An article published by CNBC cites a recent report by the U.S. Treasury Department to claim that climate change is likely to impose “substantial financial costs” on U.S. households in the coming years and decades. This is misinformation. The costs estimates are based on computer models and emission scenarios that are known to be flawed and data on extreme weather trends do not show they are worsening. As a result, there is no evidence climate change has at the present or will in the future resulting in higher household costs.
Annie Nova’s CNBC article, “Climate change could impose ‘substantial financial costs’ on U.S. household finances, Treasury warns,” reports on a new report from the U.S. Treasury Department which claims that climate change will likely result in rising prices, and supply chain and job disruptions due to “climate disasters” resulting from a warming planet. Nova writes:
Climate change is expected to impose “substantial financial costs” on U.S. households in the coming years, according to a new report by the U.S. Department of the Treasury.
Between 2018 and 2022, weather and climate disasters cost more than $617 billion, it found — a record. Within the last year, 13% of Americans reported economic hardship due to severe weather events and disasters.
“Severe flooding, wildfires and extreme heat are imposing significant financial burdens on households across the country,” Graham Steele, assistant secretary for financial institutions at the Treasury Department, said in a statement.
The first thing to note about the Treasury Department’s report is that, although the data set it used did adjust for inflation, it did not adjust for Gross Domestic Product (GDP). As Climate Realism has discussed previously, here and here, for example, data shows that when GDP growth is accounted for, losses to extreme weather events have declined during the recent period of modest warming.
In addition, the data set it used was truncated, only extending back to 1980. This is important because data shows that hurricanes, wildfires, heatwaves, and droughts, for example, were more numerous, powerful, and impacted larger areas of land in the middle and early part of the 20th century than at present. Yet Treasury’s report fails to compare the economic impact on households of events occurring in these earlier time periods, when weather was more severe, with the present time period. Of course, there were fewer people and less development then, but that would likely make the gap between the GDP adjusted economic impacts even larger than they are now.
In addition, as discussed at Climate at a Glance: Hurricane’s, from 2005 through 2017, the year before the cost data cited by the Treasury Department and CNBC spiked, the United States went through the longest period in history without a major hurricane—a hurricane measuring Category 3 or higher—making landfall. The United States also experienced the fewest number of hurricane strikes in any eight year period in recorded history (2009 through 2017). So the Treasury Department staked its claims of huge increases in losses on a comparison between a period of relatively high hurricane activity with the period of the lowest hurricane activity in history. As a result, it is no wonder Treasury’s cost data seems to have risen dramatically. With that cheery picking of time periods for comparison, how could it not do so?
Then there is the use of computer models to project future rising consumer costs and wage losses. As Climate Realism has discussed repeatedly, here, here, and here for, for example, computer models grossly overstate the amount of warming experienced and the weather impacts of that warming, so damage cost estimate based on such models can’t be relied upon—it’s garbage in, garbage out. In addition, impact projections rely on extremely unlikely or even impossible emission scenarios.
What the data clearly shows as discussed in dozens of previous Climate Realism posts, none of the trends for extreme weather events, droughts, floods, heat waves, hurricanes, or wildfires, are rising. Indeed, most have declined over the period of recent modest warming, so climate change can’t be causing the recent increase in disaster related impacts.
The recent rise in costs is due to a few years of bad weather—by the way, its not unusual historically for years of bad weather to run in short streaks due to the effect that large scale cycles like El Nino and La Nina events have on atmospheric trends—and increasing numbers of people moving to places historically prone to natural disasters and building more, and more expensive, properties there. As explored in Climate Realism previously, here, for instance, rising nominal costs from hurricane damage, and the damage from other natural disasters, are due to what Bjorn Lomborg, Ph.D., calls the “expanding bulls-eye effect.”
The Biden administration is deeply committed to combatting climate change, which Biden has asserted, without real evidence by the way, “is a real and present danger.” The Treasury Department is a federal agency in the Biden administration. So it is hardly surprising the Treasury Department would issues an alarming climate report that is short on facts, but long on scary scenarios and supposition. By contrast, the Federal Reserve, an agency independent of the administration has issued repeated reports and statements making it clear that climate change is not increasing banks costs nor does it threaten their continued ability to operate.
Sadly, in its reporting, CNBC ignored the facts, instead choosing to unquestioningly parrot the U.S. Treasury Department’s flawed claims. So much for investigative, independent, journalism.
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Germany brings back mothballed coal plants to keep the lights on
A country on the forefront of the green transition will put several mothballed coal-fired power plants back online ahead of the upcoming winter, Bloomberg News reported Wednesday.
Germany, which has spent hundreds of billions of dollars to enact the green energy transition, will reactivate several coal-fired units in order to meet peak demand and keep the lights on this winter, Bloomberg reported. The country has experienced elevated and inconsistent energy prices since Russia invaded Ukraine, impacting both German customers and companies.
The German government opted to go ahead with its plans to phase out its last nuclear reactors in April, and the war in Ukraine has resulted in diminished flow of relatively inexpensive natural gas from Russia, according to Bloomberg. German officials have cited safety concerns and a desire to focus on developing green energy as their rationale for shuttering the remaining reactors.
The country needed to rely on coal last winter once the flow of Russian gas had slowed, and supply is likely to be even tighter this winter now that the nuclear reactors are out of the picture, Bloomberg reported.
The energy crisis and inconsistencies in the power market have contributed to the decisions of many companies to scale down their operations in Germany and look for more stable, affordable business environments in North America and Asia, according to Politico.
The decision for this winter affects two coal blocks from RWE’s Niederaußem plant — blocks E and F — as well as the Neurath plant’s block C. In the east of the country, LEAG is expected to bring blocks E and F of its Jaenschwalde lignite plant back online. The facilities were operational last winter, put on stand-by in July, and can now be fully reactivated until March 2024 the latest.
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Climate scientists admit they have a 90% chance of being wrong about Arctic sea ice
Arctic sea ice is lowest during the month of September, and its average extent during this month is a useful metric for measuring Arctic sea ice decline during the current period of global warming. During the 1980s and 1990s, September Arctic sea-ice extent (SIE) showed a moderate decline (Figure 1). After the 1997 climate shift, which involved a rather abrupt global atmospheric reorganization, the Arctic entered a period of rapid change that I call the Arctic Shift.
During this period, Arctic SIE declined more rapidly. Scientists noticed this change in trend about a decade later and became increasingly concerned about the prospect of an ice-free Arctic.[2]
The concern about the rapid decline of Arctic SIE in the early years of this century was due to the possibility of a runaway ice-albedo feedback. Loss of sea ice would reduce albedo, and additional solar energy would cause further sea ice loss. Models that reproduced the rapid loss predicted a tipping point that would lead to an ice-free Arctic by 2040, sparking public fears. [3]
However, recent work suggests that up to 60% of the decline in September SIE since 1979 may be due to changes in atmospheric circulation. [4] In addition, the persistence of Arctic summer cloud cover significantly reduces the ice-albedo feedback.[5] The realization that internal variability is a more important factor than expected explains why the rate of decline of Arctic summer SIE has slowed so much since 2007, contrary to all expectations.
The Arctic Shift, a period of adjustment of Arctic climate variables to the new atmospheric regime induced by the 1997 climate shift, ended for Arctic SIE in 2007. Since then, the September Arctic SIE shows no significant trend. However, climate researchers are still unaware of the effects of climate shifts and regimes on climate change, and they were surprised by the recovery of sea ice in 2013 when it became clear that there had been no net loss since 2007. Using models, they calculated a 34% chance of a 7-year pause (Figure 2).[6]
However, the hiatus has now extended to 17 years and the probability has dropped to 10%. In other words, there is a 90% chance that climate scientists’ predictions about Arctic sea ice were wrong. If the hiatus continues until 2027, it will become statistically significant (p<0.05, or less than 5%) and no longer explainable by chance.
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Right, Fox News, Renewable Energy Subsidies Dominate Federal Energy Handouts
Fox News posted an article that analyzes a recent Energy Information Administration (EIA) report which shows that renewable energy subsidies dominate federal energy handouts. This is contrary to claims commonly made by activists and mainstream media sources that green energy is cheaper than traditional sources, and that fossil fuels receive massive federal subsidies.
The Fox News article, “Biden admin quietly released study showing green energy receives far more subsidies than fossil fuels,” performs a basic review of the 59-page report from the Department of Energy’s EIA, and concludes that fossil fuels and nuclear energy receive a pittance of federal backing compared to green energy and energy efficiency programs.
Breaking down the Fox analysis:
From 2016 to 2022, the federal government awarded $183.3 billion in direct and indirect subsidies. More than half was spent in the last three years.
Although renewables like wind and solar account for only 21% of domestic electricity production, they received the largest share of subsidies at $83.8 billion, approximately 46 percent of all subsidies.
Fox reports the next largest category are “[e]nergy end use subsidies, like energy efficiency- and conservation-related tax provisions,” receiving $64.8 billion, meaning consumers, homeowners, and commercial and retail businesses get approximately 35 percent of the subsidies, in the form of write downs on their tax bills.
Fossil fuel sources, which make up more than 60% of electricity production and most transportation energy, got only $24.5 billion, approximately 13 percent of the subsidies, all most all in the form of tax credits for routine business expenses, the kind of credits every other business and industry in America receives.
Nuclear power, alone producing 18% of our electricity, only got $2.9 billion.
Fox writer Thomas Catenacci also discussed what these values mean in terms of how much taxpayer money is being spent per unit of energy produced by renewables versus traditional energy sources, and predictably found that “green” sources are far more costly.
Catenacci writes:
For example, natural gas power generated 44.9 quadrillion British thermal units in 2022, 45% of total energy generated economywide, but received $2.3 billion in taxpayer subsidies that year. That means for every million British thermal units (MMBtu) produced by natural gas, the industry received about $0.05.
By comparison, in 2022, the solar industry generated about 0.6 quadrillion British thermal units, less than 1% of total energy produced economywide in the U.S., but received $7.5 billion in subsidies. That means the solar power industry received $11.9 per MMBtu generated last year.
To those who follow energy issues closely, this should be no surprise.
While the Biden administration and likeminded mainstream media outlets and activists champion ideas like eliminating tax advantages for traditional sources, especially fossil fuels, the reality has always been that these sources already receive very little government help compared to wind and solar, in particular. The reality also is that these supposed “tax advantages” are tax credits common to every industry and business for capital expenditures, equipment, employee benefits, etc. They are not unique, “give aways,” to the fossil fuel industry.
It should be noted that the EIA report emphasizes the fact that its scope is “limited to direct federal financial interventions and subsidies,” This is notable, because individual state renewable portfolio standards and interstate programs like the northeast’s Regional Greenhouse Gas Initiative also add to these subsidies, in part by mandating the increased use of “green” energy. One study found that the Regional Greenhouse Gas Initiative cost electricity ratepayers $3.8 billion extra between 2008 to 2020, and more than half of those funds went to energy efficiency programs. In addition, it does not include tax abatements and support given directly to green energy developments by state and local governments.
Solar receives by far the largest share of the federal subsidies in the form of tax expenditures, according to the EIA report and the chart they generated. (See figure below)
Solar alone receives more subsidies in the form of tax expenditures than all energy specific subsidies and support for any given traditional energy source. The EIA report explains this by saying that the industry has grown rapidly, and because the investment tax credit is claimed in full the year an asset enters commercial operation.
Solar power is proving itself to be much less reliable than proponents claim, as discussed in a Climate Realism post, “Two New Reports Detail the Unreliability of Solar Power.” One report found that solar assets were degrading at roughly double the rate the industry claims. The same is true for other renewables, even in states that supply large amounts of support for their development.
Despite the subsidies, states with renewable portfolio standards have seen increases in retail electricity prices.
As amusing as it is that renewables receive so much more “subsidies” in the form of tax expenditures, tax breaks are probably not what most Americans think of when they imagine companies receiving subsidies. That simply means that money is not taken away from the companies by government. But the EIA report also discusses direct expenditures – or money from taxpayers given to companies directly in the form of grants and programs. Examining this data shows that renewables receive the bulk of this funding as well. (See figure below)
Direct expenditures make up only 10 percent of all the subsidies and support natural gas and petroleum liquids receive, and come out negative for coal due to “de-obligation of funds” related to carbon capture and storage and the Clean Coal Power Initiative (two green projects).
The EIA report says the two billion-dollar years for renewables’ direct expenditures came primarily from two sources; Congress created direct-payment programs at the Treasury that renewables companies could opt for instead of tax credits from the Production Tax Credit for renewable electricity generation, as well as the Clean Renewable Energy Bonds and Qualified Energy Conservation Bond programs.
It is also important to note that the direct expenditures for “natural gas and petroleum liquids” does not merely include funding for oilfield operations. The vast majority of the direct expenditures go to U.S. Department of Transportation related projects, like pipeline safety programs, mandated by the government, and U.S. EPA programs like the clean diesel emissions reduction program, and state clean diesel grant program. Because those programs have little to do with the kind of “big oil payouts” the media claims exist, we did not include them in our numbers. What little direct upstream payments do exist are dominated by the Department of the Interior’s “Oil and Gas Royalty Management State and Tribal Coordination” – which covers the federal disbursements given to tribes every year for energy production on their land.
The EIA also separately breaks down where Research and Development (R&D) grants go. Renewables have received a total of $2.364 billion in R&D since 2016, coal got $2.383 billion (the vast majority going towards carbon capture and storage and other “net zero” projects), gas and petroleum liquids saw just $739 million, and nuclear got $1.684 billion.
In fact, among the direct payments, whether by direct expenditure or R&D grants, most money for any given energy source is going towards some form of “green” or net-zero application of the energy source.
The jury is still out on whether or not the mainstream media and Biden administration will stop falsely claiming that fossil fuels receive “significant tax preferences and subsidies,” as stated in the tax plan released in 2021. The EIA report was released in August, and since then, there has not been a peep from the administration.
Fox News did a great job publicizing the facts contained in this EIA report, about the relative amounts of subsidies going to different energy sources compared relative to the amount of power they provide to the American economy and people. It’s a shame other mainstream media outlets ignored the EIA’s findings. Had they discussed it, average Americans would have been more energy literate and able to make better informed choices at the ballot box. The media often claims that part of its job is to produce a well-informed citizenry, not one making personal and political decisions based on misinformation. On energy, it is failing grossly in that job.
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Soil carbon and its magic credits another offset industry fantasy
Australia’s carbon credit system has a new and rapidly growing source of flawed Australian carbon credit units (ACCUs). The “soil carbon” industry is small in scale, but it features the same problems as the increasingly discredited human-induced regeneration (HIR) industry which has produced tens of millions of carbon credits for carbon sequestration that there’s no evidence has taken place.
Soil carbon refers to increasing the storage of carbon in the soil, usually via increasing crop or pasture yields, and keeping the amount of carbon released from soil via decomposition to a minimum. Almost 480 soil carbon projects have been accredited under the government’s ACCU scheme, nearly two-thirds of which have commenced in the past two years, so the industry is in relative infancy, with only a few hundred thousand ACCUs issued.
But from later this decade, it will begin producing millions of ACCUs to be used as offset by heavy CO2 polluters continuing business-as-usual emissions.
A who’s who of Australian primary industries scientists recently outlined four critical failings of the current soil carbon methodology used by the Clean Energy Regulator.
Like HIR projects, changes in soil carbon levels are more likely to reflect external factors such as rainfall or drought than human interventions, which are the basis of crediting ACCUs. And when soil carbon levels fall due to drought or fire, for example, as with HIR projects, there is no requirement to hand back the generated ACCUs — unlike the emissions the ACCUs “offset”, which will remain in the atmosphere for thousands of years. The only recognition of soil carbon variability is a temporary 25% buffer that initially — but not permanently — reduces the number of ACCUs issued.
But in some ways, soil carbon is even riskier as a form of sequestration than HIR.
Independent measurement of soil carbon levels is far harder than assessing HIR, with project proponents able to pick the best samples from within projects to maximise results without detection, compared with satellite imagery that can identify tree regeneration for HIR projects. And assessment of soil carbon levels isn’t merely dependent on place but on time — projects commenced during drought will naturally record a significant increase in soil carbon levels after the end of drought and subsequent increases in rainfall.
As a long roster of scientists pointed out recently, some soil carbon projects have recorded increases in soil carbon far beyond those suggested as credible in scientific literature, including at unlikely soil depths. As the scientists note, the key problem is transparency, or its lack — just as with HIR.
“Scientists should be granted access to project data. Data could be used to improve models in order to distinguish between climate and management effects. This would ensure the method is fit for purpose,” they conclude.
As with HIR, however, there is minimal access to project data (the “voluntary” additional data provided by HIR proponents in response to criticism of those projects is nearly worthless) and efforts to provide rigorous independent verification meet with hostility from the Clean Energy Regulator and the industry.
The dismissal of strong evidence of the lack of integrity of HIR projects, and the lack of interest in identified and significant flaws in the soil carbon methodology suggests that the goal of the Clean Energy Regulator — acting under direction from successive governments — is less about the quality of ACCUs than the quantity, that the priority is producing a high volume of credits with a pretence of rigour that will be available to heavy emitters to continue polluting.
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My other blogs. Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM )
http://edwatch.blogspot.com (EDUCATION WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
http://jonjayray.com/blogall.html More blogs
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Jim Hansen and his twin
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