Richard Tol on the political pre-requisites to a carbon neutral economy
05 Jun 2014 Leave a comment
in environmental economics, global warming Tags: global warming, Richard Tol
David Friedman “Global Warming, Population, and the Problem with Externality Arguments”
01 Jun 2014 Leave a comment
Why I am not an Environmentalist
29 May 2014 Leave a comment
in environmental economics, environmentalism Tags: expressive voting, Steven Landsburg
Picketing puppies
26 May 2014 Leave a comment
in environmental economics, environmentalism, health economics Tags: animal rights
Stirling University in the UK cancelled plans for a petting zoo after protests from PETA.
A petting zoo is set up outside the university library where stress-out students can have time out with puppies, kittens and other cute animals.
Warren Buffett: I Build Wind Turbines To Lower My Taxes
22 May 2014 Leave a comment
in entrepreneurship, environmental economics, taxation Tags: bootleggers and baptists, rentseeking, wind power
“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffett told an audience in Omaha, Nebraska this weekend. “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
Buffett has invested billions into wind power to get federal subsidies.
via Warren Buffett: I Build Wind Turbines To Lower My Taxes | The Daily Caller.
Basing policy on a scientific consensus is a new development for environmentalists
06 May 2014 Leave a comment
in economics of regulation, environmental economics, environmentalism, health economics, law and economics Tags: Cass Sunstein, GMOs, killer green technologies, Paul Nurse, precautionary principle
Previously the precautionary principle was used to introduce doubt when there was no doubt. But when climate science turned in their favour, environmentalists wanted public policy to be based on the latest science.
The precautionary principle is deeply incoherent. We should take precautions but there are always risks on both sides of a decision; inaction can bring danger, but so can action. Precautions themselves create risks so the precautionary principle bans what it simultaneously requires.
There is never perfect certainty about the nature and causes of health and environmental threats, so environmental and health regulations are almost always adopted despite some residual uncertainty.
We live in a Schumpeterian world where new risks replace old risks.
The obvious question is it safer or more precautionary to focus on the potential harms of new activities or technologies without reference to the activities or technologies they might displace? Jonathan Alder explains
In any policy decision, policy makers can make two potential errors regarding risk.
On the one hand, policy makers may err by failing to adopt measures to address a health or environmental risk that exists.
On the other hand, policy makers may adopt regulatory measures to control a health or environmental risk that does not exist.
Both types of error can increase risks to public health.
Consider the overwhelming consensus among researchers that biotech crops are safe for humans and the environment
This is a conclusion that is rejected by the very environmentalist organisations that loudly insist on the policy relevance of the scientific consensus on global warming.
In his 2012 Dimbleby lecture, Sir Paul Nurse calls for a re-opening the debate about GM crops based on scientific facts and analysis:
We need to consider what the science has to say about risks and benefits, uncoloured by commercial interests and ideological opinion. It is not acceptable if we deny the world’s poorest access to ways that could help their food security, if that denial is based on fashion and ill-informed opinion rather than good science.
Cass Sunstein wrote that in its strongest and most distinctive forms, the precautionary principle imposes a burden of proof on those who create potential risks, and requires regulation of activities even if it cannot be shown that those activities are likely to produce significant harms:
…apparently sensible questions have culminated in an influential doctrine, known as the precautionary principle.
The central idea is simple: Avoid steps that will create a risk of harm.
Until safety is established, be cautious; do not require unambiguous evidence.
Yet the precautionary principle, for all its rhetorical appeal, is deeply incoherent.
It is of course true that we should take precautions against some speculative dangers.
But there are always risks on both sides of a decision; inaction can bring danger, but so can action.
Precautions, in other words, themselves create risks – and hence the principle bans what it simultaneously requires.
Sunstein is a Democrat whose White House appointment to the head the White House Office of Information and Regulatory Affairs under Obama was opposed by the Left of the Democrat Party because of his views on the precautionary principle and his support of cost-benefit analysis as a primary tool for assessing regulations. Sunstein again:
The simplest problem with the precautionary principle is that regulation might well deprive society of significant benefits, and even produce a large number of deaths that would otherwise not occur.
Genetic modification holds out the promise of producing food that is both cheaper and healthier – resulting, for example, in products that might have large benefits in developing countries.
The point is not that genetic modification will definitely have those benefits, or that the benefits of genetic modification outweigh the risks.
The point is that the precautionary principle provides no guidance
The epitome of anti-science is support for the precautionary principle and opposition to cost-benefit analysis in assessing regulations. Which side of politics is guilty of this?
Environmentalists accept the views of scientists when its suits their anti-progress agenda. In other cases, the precautionary principle is used to delay judgment, reject science such as on GMOs and demand ever more evidence.
Environmentalists are all for the precautionary principle except when applied to natural medicines, organic food and marijuana.
Richard Tol: IPCC again
27 Apr 2014 Leave a comment
in economics, environmental economics, global warming, politics Tags: global warming, IPCC, Richard Tol
Richard Tol reports that landlocked countries vigorously protested at IPCC meetings that they too would suffer from sea level rise!
This was because the international climate negotiations of 2013 in Warsaw concluded that poor countries might be entitled to compensation for the impacts of climate change.
The assessment of the size of those impacts and hence any compensation led to an undignified bidding war among delegations – my country is more vulnerable than yours. Landlocked countries had no intention of missing out.
The IPCC is a typical multilateral meeting process from Tol’s description:
- Many countries send a single person delegation.
- Some countries can afford to send many delegates.
- They work in shifts, exhausting the other delegations with endless discussions about trivia, so that all important decisions are made in the final night with only a few delegations left standing.
Naturally, all inconvenient truths are vetoed, as Tol explains, listing the following omissions and redrafts of the Summary for Policy Makers:
- it omits to say that better cultivars and improved irrigation increase crop yields;
- it shows the impact of sea level rise on the most vulnerable country, but does not mention the average;
- it emphasizes the impacts of increased heat stress but downplays reduced cold stress; and
- it warns about poverty traps, violent conflict and mass migration without much support in the literature.
Tol then aptly states his position on it all:
Alarmism feeds polarization.
Climate zealots want to burn heretics of global warming on a stick.
Others only see incompetence and conspiracy in climate research, and nepotism in climate policy.
A polarized debate is not conducive to enlightened policy in an area as complex as climate change – although we only need a carbon tax, and a carbon tax only, that applies to all emissions and gradually and predictably rises over time.
HT: Catallaxyfiles
Is the IPCC Government Approval Process Broken? | Robert Stavins
27 Apr 2014 Leave a comment
in environmental economics, global warming, politics, Public Choice Tags: global warming, IPCC
Robert Stavins, the Co-Coordinating Lead Author of Chapter 13, “International Cooperation: Agreements and Instruments,” of Working Group III (Mitigation) of the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) has written a letter arguing the following:
- If the IPCC is to continue to survey scholarship on international cooperation in future assessment reports, it should not put country representatives in the uncomfortable and fundamentally untenable position of reviewing text in order to give it their unanimous approval.
- In my view, with the current structure and norms, it will be exceptionally difficult, if not impossible, to produce a scientifically sound and complete version of text for the SPM on international cooperation that can survive the country approval process.
- The general motivations for government revisions – from most (but not all) participating delegations – appeared to be quite clear in the plenary sessions.
- These motivations were made explicit in the “contact groups,” which met behind closed doors in small groups with the lead authors on particularly challenging sections of the SPM.
- In these contact groups, government representatives worked to suppress text that might jeopardize their negotiating stances in international negotiations under the United Nations Framework Convention on Climate Change (UNFCCC).
- Nearly all delegates in the meeting demonstrated the same perspective and approach, namely that any text that was considered inconsistent with their interests and positions in multilateral negotiations was treated as unacceptable.
HT: Catallaxyfiles
@NZGreens @GreenpeaceNZ The scrapping of the trolley buses is great news – killer green technology alert
27 Apr 2014 1 Comment
in environmental economics, politics - New Zealand, transport economics Tags: expressive voting, killer green technologies, Wellington buses
The extra costs associated with the wire network and the difficulty of changing the buses’ routes were the main factors in this great decision.
Trolley buses cause backlogs when they brake down because they cannot overtake a broken-down bus. The trolley buses just stake-up behind the broken-down bus because they cannot overtake.
I have been trapped on a diesel express bus this way commuting to work many times. Central Wellington grinds to halt when one trolley bus breaks-down.
The 50-year-old power system would need upgrading soon costing “tens of millions of dollars,” and maintaining the 160 kilometres of wires and 15 substations costs $6m a year. The one-off cost of dismantling this network is cheaper than this!
Trolley bases are a killer green technology: drivers have been killed while standing on the road behind the bus reconnected the arms on the top of the bus to the overhead wires. These arms disconnect frequently, and have even hit people on the side of the road.
Wellington is earthquake prone. Having public transport run off a single electric power source connected to overhead wires is fool hardy.
I grew up in a small country town. I have none of the obsessions that big-city folk and the inner-city green voters, in particular, have with buses.
Climate policy targets revisited | Richard Tol
26 Apr 2014 Leave a comment
in applied welfare economics, economics of climate change, environmental economics, environmentalism, politics Tags: global warming, Richard Tol
The IPCC’s Fifth Assessment Report estimates lower costs of climate change and higher costs of abatement than the Stern Review. However, current UN negotiations focus on stabilising atmospheric concentrations of greenhouse gases at even lower levels than recommended by Stern.
This column argues that, given realistic estimates of the rate at which people discount the future, the UN’s target is probably too stringent.
Moreover, since real-world climate policy is far from the ideal of a uniform carbon price, the costs of emission reduction are likely to be much higher than the IPCC’s estimates.
PRTP is the preferred rate of time preference used in net present value calculations.
Chart of the day: In 2013, America was more than twice as energy efficient compared to 1970 when Earth Day started | AEIdeas
23 Apr 2014 Leave a comment
in entrepreneurship, environmental economics, environmentalism, liberalism, technological progress Tags: Earth Day, energy conservation
EARTH DAY: SPIRITUALLY UPLIFTING, INTELLECTUALLY DEBASED by Julian L. Simon
23 Apr 2014 Leave a comment
in applied welfare economics, entrepreneurship, environmental economics, environmentalism, liberalism, market efficiency Tags: Earth Day, Julian Simon, Paul Ehrlich
During the first great Earth Week in 1970 there was panic.
The public’s outlook for the planet was unrelievedly gloomy.
The doom saying environmentalists – of whom the dominant figure was Paul Ehrlich – raised the alarm: The oceans and the Great Lakes were dying; impending great famines would be seen on television starting in 1975; the death rate would quickly increase due to pollution; and rising prices of increasingly-scarce raw materials would lead to a reversal in the past centuries’ progress in the standard of living.
… On average, people throughout the world have been living longer and eating better than ever before.
Fewer people die of famine nowadays than in earlier centuries.
The real prices of food and of every other raw material are lower now than in earlier decades and centuries, indicating a trend of increased natural-resource availability rather than increased scarcity.
The major air and water pollutions in the advanced countries have been lessening rather than worsening.
Via Julian Simon memorial site
Great Ed Glaeser quote at Café Hayek
23 Apr 2014 Leave a comment
in environmental economics, environmentalism, urban economics Tags: Edward Glaeser
Obama’s opportunistic record on fighting global warming
18 Apr 2014 Leave a comment
in environmentalism, global warming, politics - USA, Public Choice Tags: global warming, Matthew Kahn, McCain, obama, Yes Minister
Even in the US, where nothing can be done through legislation thanks to Republican delusionists.
The 2008 Republican Party presidential nominee supported cap-and-trade. McCain had a strong legislative record; he introduced a bill with Joe Lieberman to introduce carbon trading in 2003.
McCain has been one of the most outspoken members of Congress on the issue of climate change’ and he “managed to force the first real Senate vote on actually doing something about the largest environmental peril our species has yet faced.
McCain used a Senate parliamentary manoeuvre that forced a floor vote on the climate legislation. The McCain-Lieberman bill lost 43-55.
In 2007 he reintroduced his bill, with bipartisan co-sponsorship. Obama missed the June 2008 vote on McCain’s Climate Security Bill.
In a March 2008 speech, McCain called for a “successor to the Kyoto Treaty” and a cap-and-trade system “that delivers the necessary environmental impact in an economically responsible manner.”
McCain’s climate policy includes several target dates. By 2012, McCain said U.S. emissions should return to 2005 levels. By 2050, he says, the U.S. emissions should be 60 per cent below 1990 levels.
In January 2010, the Pew Research Center asked Americans to rank the importance of twenty-one issues. Climate change came in last.
After winning the fight over health care, another issue for which polling showed weak support, Obama moved on to the safer issue of financial regulatory reform.
There were 5 Republican senators who would have voted for cap and trade in April 2010: Lindsey Graham, Susan Collins, Olympia Snowe, Scott Brown, and George LeMieux. There were 57 Democrat Senators. It takes 60 votes to break a filibuster.
President Obama could have fought harder to get the Bill the House passed through the Senate but he did not.
Blame Obama, no one else. He is supposed to make change happen. He lacked the political skills to build coalitions even within his own party to deliver.
Many others, including McCain softened or reversed positions as voter support waned as the great recession deepened.
In Copenhagen’s final private negotiations, Obama, Brown, Sarko and Merkel sat down with He Yafei, the Chinese vice-minister of foreign affairs. There is a tape of this meeting at Der Spiegel. HT: The Guardian.
He Yafei was the smartest guy in the room – listen to the tape. Wen Jiabao refused to attend most of the negotiating sessions.
Given the choice of walking out and sitting down with a vice-minister, they chose humiliation. One response of Obama was:
It would be nice to negotiate with somebody who can make political decisions.
Rather than blaming vast right-wing conspiracies, using Google searches for “unemployment” and “global warming”, Kahn and Kotchen found that:
- Recessions increase concerns about unemployment at the expense of public interest in climate change;
- The decline in global-warming searches is larger in more Democratic leaning states; and
- An increase in a state’s unemployment rate decreases in the probability that Americans think global warming is happening, and reduces the certainty of those who think it is.
The middle-of-the-road voters changed their priorities and their political leaders followed them.
It’s the peoples’ will, I am their leader, I must follow them. – Jim Hacker, The Greasy Pole
As Geoff Brennan has argued, CO2 reduction actions will be limited to modest unilateral reductions of a largely token character. There are many expressive voting concerns that politicians must balance to stay in office and the environment is but one of these. Once climate change policies start to actually become costly, expressive voting support for these policies will fall away, and it has.
Utopia, you are standing in it! 
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