Cap and Trade = Iraq War?

From Michael Goldfarb, a friend from my days at The Weekly Standard:

Basically, cap and trade strikes me as the Iraq war of the Democratic domestic policy agenda. It's the overreach moment. It's a massive program that, unlike health care reform, no one is demanding, no one understands, and no one can explain. Cap and trade may be the only thing that can save the Republican party from eight years in the wilderness.

A slightly off-kilter source for this insight, but it might actually be right if people start to see price increases on electricity, gas, etc. fairly quickly.

Comments

[Alex]

Well, if all the GOP caucus votes against, and prices skyrocket, the GOP at the legislative level will be looking good. I'd much prefer stronger GOP minorities or slight majorities than what we have in there now. Coupled with Obama, I think we'd have a pretty inoffensive, incompetent government. With is better than the offensive, incompetent government we have now.

[Kevin]

We Americans tend to get irate over energy prices. Up till now it's been easy to blame "big oil" or some boogeyman whenever gas prices spike. After this, it won't be so easy.

Although, the fact that Barney Frank still has a job shows just how good these people are at redirection.

[R C Dean]

Although, the fact that Barney Frank still has a job shows just how good these people are at redirection.

Well, mostly it shows what soft-headed idiots Massachusetts voters are.

[Kevin]

Well, mostly it shows what soft-headed idiots Massachusetts voters are.

You mean like...
My grandfather voted for Barney Frank, my dad voted for Barney Frank, and dammit I'm voting for Barney Frank! (Or in Ted Kennedy's case, great-great grandfather, etc.)

[Chad]

Really? I want cap-and-trade, I understand it, and I can explain it, warts and all.

What's so hard to understand? The relevant scientists almost universally agree that we need to reduce emissions of carbon dioxide. The method being proposed to do this, similar to how we handle SOx emissions, is for the government to set a limit on how much can be emitted nationally, and then issue permits to emit adding up to that ever-declining total. The permits may be issued at auction or simply granted, depending on various political issues, and may be traded.

Now, I will admit this is rather complicated and a tax would be simpler. But economically, they are identical. A key point is that regardless of whether the permits are auctioned or granted, the same emission reductions still happen. The granted permits are simply a government handout, no different than cash...which is, of course, why all permits should be auctioned.

Indeed, anyone who believes in free markets should support cap-and-trade or a carbon tax. It always surprises me that so many libertarians are so anti-government that they would prefer to allow market failures to go unchecked than to ever have the government do anything.

[Tony]

Yeah saving the planet via fixing the market to account for environmental destruction = an imperialistic war of choice on a sovereign state that never threatened the U.S. I can totally see the comparison.

You guys realize the only reason you're ranting about Barney Frank is because he, a gay Mass. liberal, was an easy scapegoat for panicked conservatives when their fiscal policies nearly collapsed our economy?

Why would libertarians be such tools of FOX news? Frank is one of the more socially libertarian congresspeople we have.

[crfeech]

How does one audit compliance to the limit of CO2 permitted by the certificate one purchased?Doesn't anyone fear those greedy CEOs of huge multinational companies will cheat?

[R C Dean]

I would say that saving the planet via fixing the market to account for environmental destruction has a number of parallels to the Iraq war.

The end of the world via Iraqi WMDs = the end of the world via CO2.

Saving the Middle East via installing a democratic regime = saving the planet via cap and trade.

Enormous fiscal damage to the US via a foreign war = enormous fiscal damage to the US via new energy taxes.

Works for me. Just think of them both as hopelessly misguided solutions to an imaginary problems.

[Joe_D]

If they're trying to discourage carbon dioxide emissions, why use cap and trade instead of a carbon tax? What advantage does it have?... well, aside from employing a lot of bureaucrats.

And Chad, Libertarians generally oppose this cap-n-trade mess for two reasons: 1) They don't believe there's any market failure involved, and/or 2) They see cap-n-trade as a terrible way to lessen carbon emmissions.

[hammeredHead]

The relevant scientists almost universally agree Sorry to inform you but climatology is not a real science ie. one with testable nullifiable hypothesis'. Therefore I consider their consensus to be no more valuable than a consensus of astrologers.

BTW I view economists the same way.

[pk]

@Chad: Who are the irrelevant scientists? If this is such a good idea, why don't we take our time and analyze the data? Could it be that it's a way of rationing favors in a partisan way? A government? And what are "market failures"? Is the demise of VCRs a "market failure" or a "market success"?

@Tony: Being gay does not give Mr. Frank a "those who criticize me are gay-bashers" get-out-of jail free card. Ditto for Obama's half-minority status.

The fact that we dislike Mr. Frank is over his toxic policies. Mr. Frank's fingerprints are all over the housing market bubble.

I will gladly vote for a Gay Black spanish-surname libertarian woman in a wheel chair.

[MikeP]

The relevant scientists almost universally agree that we need to reduce emissions of carbon dioxide.

The relevant economists do not almost universally agree. And I'd think their input is at least as important.

[Alan Vanneman]

"Basically, cap and trade strikes me as the Iraq war of the Democratic domestic policy agenda."

As a liberal Democrat I would agree with this one. Fortunately, the "war on CO2 won't lead to thousands of American deaths, the torture and murder of innocent Iraqis, etc., etc., not to mention shots of John McCain walking around in a flak jacket shadowed by attack helicopters and talking about how safe he feels.

[ClubMedSux]

Cap and trade may be the only thing that can save the Republican party from eight years in the wilderness.

I was kind of hoping the Republicans would be spared eight years in the wilderness by embracing some sort of worthwhile policy (like, say, fiscal responsibility). If the Republicans' salvation is going to come in the form of the Democrats matching their stupidity, I'd just as soon have the Republicans stay in the wilderness.

Oh, and hammeredHead, how many climatology classes have you taken? I'm curious to hear your basis for concluding that climatology isn't testable...

[Bruce Bartlett]

Nice to see that even a neocon jerk like Goldfarb now recognizes that the Iraq War was an "overreach."

[Peter]

Fortunately, the "war on CO2 won't lead to thousands of American deaths

Does dying in the cold because you can't afford heat count? If so I would attribute every homeless person's death to Obama because he chose to "save or create" someone else's job instead.

[Josh]

Allen Vanneman:

"Fortunately, the "war on CO2 won't lead to thousands of American deaths..."

Unfortunately, paying more for gas and energy will be a lot more noticeable and angrifying to the electorate than anything in your list.

[Tulpa]

I don't get this analysis. The Iraq war became a huge issue because, though it was exceedingly complex, you had the constant flow of numbers of dead Iraqis and dead American names on all the news programs. The issue had an effect that was viscerally understood...something that's absolutely not true for cap and trade schemes.

Obama can blame the eeeeevil corporations if they raise prices a lot more plausibly (in the average American's mind) than Bush could blame the media for "slanting" the Iraq war reporting.

[Rich]

Will *menthol*-flavored CO2 still be allowed?

[R C Dean]

The issue had an effect that was viscerally understood...something that's absolutely not true for cap and trade schemes.

Americans viscerally understand high gas prices and utility bills.

Obama can blame the eeeeevil corporations if they raise prices a lot more plausibly (in the average American's mind)

We'll find out, won't we? However, being able to misdirect the anger of the American public isn't exactly what I would call "Hope and Change."

[Enough About Palin]

"Really? I want cap-and-trade, I understand it, and I can explain it, warts and all."

Really? Because I work for a multi-billion utility that is heavily favored in all of this and if this passes, we are gonna get so rich off of your ass, Chad.

Thanks, sucker!

[ellipsis]

I'm assuming global warming is a known and valid phenomenon, but the financial impact seems like a very big unknown. Instituting a tax on that unknown is very non-market freedom - and cap and trade is very much a tax.

Cap and trade, in the aggregate, is a tax on living and breathing. Taxing something so quintessential calls into question the very idea of "certain unalienable Rights" established in the Declaration of Independence.

[Enough About Palin]

"But economically, they are identical. A key point is that regardless of whether the permits are auctioned or granted, the same emission reductions still happen."

Ha, ha, ha, ha, ha, ha!!!!!

[ellipsis]

Oh, and my hope is, if the Democrats push this, they will get trounced in the next election.

[Enough About Palin]

""Fortunately, the "war on CO2 won't lead to thousands of American deaths...""

If old folks in Detroit can't afford the electricity for their air conditioners, they're gonna die.

I'll think of them with every bonus.

[Enough About Palin]

Obama Lied
Old Folks Fried.

[ellipsis]

It's interesting to note that Bush had an approval rating of about 51% in 2004. By 2008, it was down to around 30% give or take. It's largely assumed this is because he kept pushing policies no one wanted, but kept doing it anyway because he had a mandate from the people.

If the Democrats read more into their election victories than is actually there, they too will discover how much can change in two to four years.

[Yes We Kanye]

Obama doesn't care about hot or cold people.

[ellipsis]

I just saw that Obama gave a speech in the Rose Garden saying the cap and trade legislation would create jobs. %|

Good lord, that's an interesting way to spin it.

[Chad]

crfeech | June 25, 2009, 3:58pm | #
How does one audit compliance to the limit of CO2 permitted by the certificate one purchased?Doesn't anyone fear those greedy CEOs of huge multinational companies will cheat?

The vast majority of carbon passes through just a handful of mines and refineries. The penalties for cheating are high and you can't hide your plant. So no, compliance isn't really a big issue.

[ellipsis]

An Associated Press article just posted seems to indicated there's not enough votes in Congress for it to pass. So that's a relief.

[Chad]

MikeP | June 25, 2009, 4:05pm | #
The relevant scientists almost universally agree that we need to reduce emissions of carbon dioxide.

The relevant economists do not almost universally agree. And I'd think their input is at least as important.

What part of "97% of climatologist" confuses you?

The economists really can't help much, as the variation in their models' assumptions dwarfs any variation caused by the data. It will cost about 2% of GDP to fix this problem. Is giving up 10 months of economic growth a fair price to pay for a stable climate and a cleaner environment? Anyone who says no baffles me.

[Chad]

Joe_D | June 25, 2009, 4:00pm | #
If they're trying to discourage carbon dioxide emissions, why use cap and trade instead of a carbon tax? What advantage does it have?... well, aside from employing a lot of bureaucrats.

I prefer the tax as well. So please go out an support it strongly.

And Chad, Libertarians generally oppose this cap-n-trade mess for two reasons: 1) They don't believe there's any market failure involved

Some idiots believe in unicorns, Bush caused 9/11, the earth is flat, or that Neda was killed by the CIA. It doesn't mean we should give them a drop of respect. Environmental externalities are Econ 101-level stuff. Anyone who can't understand them is an embarrassment to the human race and should remove themselves from public discourse. And anyone who denies the science that climate change is almost certainly man-made and a serious problem is even worse.

and/or 2) They see cap-n-trade as a terrible way to lessen carbon emmissions.

It is worse than the tax, for sure, but it is almost impossible for it to be worse than doing nothing. The only way it could would be if the government massively overshot and set the cap far too low...and there is no chance in cold hell of that happening.

[Michael Ejercito]

Is giving up 10 months of economic growth a fair price to pay for a stable climate and a cleaner environment?

Is there any more reason that this would be more effective at stabilizing the climate than say, detonating 300 megatons of hydrogen bombs at the Nellis test site?

[ellipsis]

Is giving up 10 months of economic growth a fair price to pay for a stable climate and a cleaner environment? Anyone who says no baffles me.

Good God, man, are you serious? If you believe that, you're not going to find a lot in common with me.

[hammeredHead]

Oh, and hammeredHead, how many climatology classes have you taken? I'm curious to hear your basis for concluding that climatology isn't testable

Sorry I was away for awhile.

Let me clarify. I believe that single variable tests are possible in climatology. Unfortunately, the climate is comprised of thousands of variables with many inversely related. The system itself cannot be tested.

Eventually, valid theories will be developed through by slowly increasing the complexity of tests. However, the field is far too new to have any valid forecasts.

I have never taken a climatology class, but have taken plenty of physics. I don't mean to belittle the field, just those who think it has any predictive powers.

[nj]

Never thought I would see that day when an asshole like Goldfarb admit the Iraq war was a mistake.

[C3H Editor]

Well, versus the IRAQ War, the Waxman-Markey global warming tax is going to do some really serious damage to an already weak economy. Here are some charts showing the impact:

http://www.c3headlines.com/2009/06/like-your-.html

http://www.c3headlines.com/2009/06/waxmanmarkey-climate-economic-impacts-in-color-and-its-ugly-political-suicide-by-choice.html

http://www.c3headlines.com/2009/06/the-waxmanmarkey-giant-sucking-sound-you-hear-has-been-located-coastal-elites-at-the-teats.html

C3H Editor, http://www.c3headlines.com ("global warming" updates)

[PK]

@chad:

"And anyone who denies the science that climate change is almost certainly man-made and a serious problem is even worse."

Really? Here is some data from The Heartland Institute:

An international survey of climate scientists found that fewer than half believed climate science was sufficiently established to give policymakers a sound basis for passing laws.

Bray, Dennis and von Storch, Hans, Survey of Climate Scientists 1996, 2003, http://www.heartland.org/policybot/results/21312/. For a summary of the survey findings, see Joseph Bast and James M. Taylor, Scientific Consensus on Global Warming: Results of an International Survey of Climate Scientists. April 2007. Heartland Institute. http://www.heartland.org/policybot/results/20861/Scientific_Consensus
_on_Global_Warming.html

[PK]

Here is some more, Chad:

More than 31,000 American scientists have signed the a petition saying "there is no convincing scientific evidence" that humans are causing or ever will cause catastrophic heating of the Earth's atmosphere.

The full text of the petition, a description of how it was circulated, and a directory of all 31,478 scientists who signed it appears as Appendix 4 of Climate Change Reconsidered: The 2990 Report of the Intergovernmental International Panel on Climate Change (NIPCC), June 2009, The Heartland Institute. The appendix is available online at http://www.climatechangereconsidered.org/.

[B]

"Cap and trade may be the only thing that can save the Republican party from eight years in the wilderness."

He is wrong on that point. Unemployment is going to hit 10%, Obama is spending more recklessly than anyone in history, and the stimulus bill is obviously a total sham. This administration is doing a damn good job of guiding the GOP out of the wilderness already, even without this cap and trade nonsense.

[B]

"Why would libertarians be such tools of FOX news?"

Christ, is shrike posting under a different name now?

Why is it that whenever someone calls out Frank for the role he played in the financial crisis, we get some dumbass mentioning Fox News, as if Frank's critics are incapable of thinking for themselves? Take your condescending bullshit elsewhere dickhead.

[Tulpa]

Americans viscerally understand high gas prices and utility bills.

My point is that the link between those and cap and trade is a difficult one to grasp. Whereas the connection between a war being fought and planes full of star-spangled coffins, and multiple TV screens full of the names of dead Americans every week, is NOT difficult to grasp.

I don't support cap and trade by any stretch of the imagination, but I don't think it's the powder keg issue this guy thinks it is.

[B]

"Fortunately, the "war on CO2 won't lead to thousands of American deaths, the torture and murder of innocent Iraqis, etc."

Yeah, and the war on CO2 won't result in the removal of brutal tyrannies and fledgling democracies in the Middle East either.

[B]

"My point is that the link between those and cap and trade is a difficult one to grasp."

It won't much matter if Americans can see the link or not. All that will matter is the increase in gas prices and utility bills. Or do you forget the shit storm that came down on Bush and the Republicans when gas eclipsed $4.00 a gallon. The why won't really matter, although when you have a major political party saying "I told you so" loudly and repeatedly, I think a good segment of the population will probably be able to connect the dots.

[mark]

Chad, I know I have denied global warming before, but let's break down the theory and talk about what we're really denying:

1. CO2 in the atmosphere contributes to the "greenhouse effect" - True

2. Greater CO2 levels in the atmosphere will cause greater warming. - Since I have conceded point 1, I must concede this point. However, the amount of "first-order" (without feedback) warming is in dispute, and it is generally agreed that warming from CO2 is logarithmic (that is, a doubling of CO2 concentrations will result in 1/2 as much warming and so on).

In fact, that second point may be untenable if it turns out that greater CO2 levels cause greater absorption of long-wave radiation, which is released at night anyway. This brings me to the third part of the theory:

3. There is a positive feedback from warming due to CO2. - This is untested. The computer models all assume this, and are made to conform to historical temperatures. This is called data mining and is not a valid test of a hypothesis. So more work needs to be done on this front.

4. Higher temperatures are a "negative externality". - Nobody knows whether this is the case. It still can't be proven that recent warming trends are even historically extreme. There have been times with hotter and colder weather and you can try to draw comparisons but you have no idea what the future will hold.

I have a feeling polar bears will be fine, on account of their being so badass, but in the final analysis, people are more important than polar bears. There is a chance that higher temperatures will lead to better crop yields and lower food prices. Even if the seas rise and Bangladesh is submerged (as if the seas don't rise and fall on their own), you have no idea if people in general are better off.

5. CO2 in the atmosphere is a "negative externality" by itself. - This is likely false, as the atmosphere has contained 1000ppm of CO2 in the past and life went on just fine. I have heard about "ocean acidification", though the ocean is still basic, and life has a funny way of adapting to small changes. So you could put a price on CO2 emissions but it would be a very small one, and again you have no idea if warming temperatures will help or hurt Americans (or are we supposed to be world citizens here?)

6. The cost of implementing "cap and trade" is worth it. - We will never be rid of this infernal system. Lobbyists will fornicate and multiply, as companies redirect carbon trading profits into Congressional campaigns. When it comes time to limit the number of permits, everyone will argue the merits of their own industry and everyone will be disappointed, except lobbyists. Congress will debate for days on the merits of keeping production cheap in this industry or that, which as you can imagine will suck for investors, who will be happy to take their money elsewhere. And the direct costs of this legislation will be more than 2% of GDP, you can bank on it. Oh, and it will cause manufacturing to shift to China, who we will be forced to retaliate against with tariffs! 1930's here we come!

[Chad]

PK | June 25, 2009, 7:41pm | #
Here is some more, Chad:

More than 31,000 American scientists have signed the a petition saying "there is no convincing scientific evidence" that humans are causing or ever will cause catastrophic heating of the Earth's atmosphere.

The full text of the petition, a description of how it was circulated, and a directory of all 31,478 scientists who signed it appears as Appendix 4 of Climate Change Reconsidered: The 2990 Report of the Intergovernmental International Panel on Climate Change (NIPCC), June 2009, The Heartland Institute. The appendix is available online at http://www.climatechangereconsidered.org/.

Wow! Do you believe in the tooth fairy as well? You too can be a scientist. Just sign up! Why didn't one of the libertarians around here smack down this garbage and save me the bother? Is it because you give a free pass to any "data" that confirms your opinion, even if it is pure BS? That makes you a liar.

Btw, I once received an offer to sign the petition. So did everyone in my department (it was spam mail). None of us were doing anything related to climate change. Given the very very very low, and mostly unvetted, standards for this petition, there are probably tens of millions of people who qualify to sign it. And you got 31000? Wow! How totally not impressive.

Worse yet, if you actually READ the petition, you find that the first statement is literally true but misleading, and the second not scientific but rather economic. The petition is right...there is no convincing evidence that climate change WILL cause catastrophic damage, but rather there is convincing evidence that it MIGHT cause such damage. Such a distinction is irrelevant, as we act on probabilities all the time. The second half of the petition is an economic question and outside of the expertise of the signers.

So your petition is both meaningless and signed by an unvetted ultra-minority. Do you actually believe such crap?

[Chad]

mark | June 25, 2009, 8:39pm | #

3. There is a positive feedback from warming due to CO2. - This is untested.

Really? Nobody in the history of mankind has heated up a pot of water and measured the change in vapor pressure? I think perhaps you don't understand the feedback loops.

4. Higher temperatures are a "negative externality". - Nobody knows whether this is the case.

For certain? No. But in all probability, yes. And we act based on probability all the time. There are very few positives and a whole host of negatives. It is very unlikely the balance would be on the positive side under any reasonable valuation.

It still can't be proven that recent warming trends are even historically extreme.

Irrelevant.

I have a feeling polar bears will be fine

Your "feeling" vs the opinions of experts...which should we base policy on, hmm?

There is a chance that higher temperatures will lead to better crop yields and lower food prices.

The expected effects on crop yields are expected to be small due to offsetting factors. CO2 will boost yields, increased droughts diminish them, and temperature changes have both positive and negative effects depending on the location (good for Siberia and Alberta, bad for anything near the equator).

Even if the seas rise and Bangladesh is submerged (as if the seas don't rise and fall on their own), you have no idea if people in general are better off.

Yes, if someone's home gets flooded, it is surely impossible to tell if they are better or worse off....wtf?

5. CO2 in the atmosphere is a "negative externality" by itself. - This is likely false, as the atmosphere has contained 1000ppm of CO2 in the past and life went on just fine. I have heard about "ocean acidification", though the ocean is still basic, and life has a funny way of adapting to small changes.

Yes, but if you had every looked at the data, you would know that when conditions change rapidly, massive extinctions results. Sure, life does "just fine" after it has a few million years to adapt. I don't think any rational person thinks that sounds like a good plan.

6. The cost of implementing "cap and trade" is worth it.

About 2% of GDP, which implies about a 30% increase in energy prices.

We will never be rid of this infernal system.

Of course not.

Lobbyists will fornicate and multiply, as companies redirect carbon trading profits into Congressional campaigns. When it comes time to limit the number of permits, everyone will argue the merits of their own industry and everyone will be disappointed, except lobbyists. Congress will debate for days on the merits of keeping production cheap in this industry or that, which as you can imagine will suck for investors, who will be happy to take their money elsewhere.

By your logic, the government should do nothing, because there will always be lobbyist. Oh wait, your a libertarian. That's probably what you want.

And the direct costs of this legislation will be more than 2% of GDP, you can bank on it.

Actually it will probably be less, as the price gap between renewables and fossils will shrink more quickly that most of the estimates.

[mark]

Nobody in the history of mankind has heated up a pot of water and measured the change in vapor pressure? I think perhaps you don't understand the feedback loops.

My understanding is that all of the IPCC models assume feedback to be positive; that is, cloud cover goes down as temperature goes up. This is an assumption and I don't think it's based on actual observations of how the Earth's climate works. Higher heating due to the greenhouse effect may be negated by faster cooling of the atmosphere. Shouldn't this aspect of the debate be studied further?

Yes, if someone's home gets flooded, it is surely impossible to tell if they are better or worse off....wtf?

Well if you have two scenarios:
A) 1 million homes flooded, 2 million additional homes built
B) No homes flooded, no additional homes built, higher poverty rates around the world

Which would you choose?

By your logic, the government should do nothing, because there will always be lobbyist. Oh wait, your a libertarian. That's probably what you want.

OK come on. If the cost of government action, not only economically, fiscally, but in terms of individual liberty, is greater than the benefits, then you shouldn't do it. A carbon tax would take up a couple pages and at least with exemptions, the process is a lot more transparent.

Actually it will probably be less, as the price gap between renewables and fossils will shrink more quickly that most of the estimates.

Or, is it possible that won't happen, and we'll have brownouts? Or lower economic growth? Much lower? Some people have this idea that GDP is actually closely tied to CO2 emissions and that relationship can't be changed by intervention. Instead, cap-and-trade will make sure that the economy suffers. Or it won't and it will just be a way for industries to lobby Congress for protection from competition.

[B]

"Wow! Do you believe in the tooth fairy as well? You too can be a scientist. Just sign up! Why didn't one of the libertarians around here smack down this garbage and save me the bother? Is it because you give a free pass to any "data" that confirms your opinion, even if it is pure BS? That makes you a liar."

And your definition of science involves ignoring compelling evidence that contradicts your data? That isn't science, it's dogma. And calling Americans who disagree with you idiots and comparing their skepticism to a belief in the tooth fairy will pretty much guarantee that those who vote for this who don't live in a district that automatically votes for a Democrat will suffer serious consequences.

When it comes to electoral calculus, it doesn't really matter what the scientific concensus is. A slim majority of Americans either reject the notion of man-made climate change or have no opinion. If (a huge fucking if, given the Senate) cap and trade is passed and when energy bills increase(an inevitable outcome, as conceded by even the president and Nancy Pelosi)there will be a huge fucking fallout, for the very reason that there is so much skepticism concerning global warming. When told they are paying more at the pump for gas because hypocrites like Al Gore want to fight global warming, there will be hell to pay for the Democratic Party.

Moreover, would you please quit acting like there is no legitimate skepticism concerning MAN-MADE global warming. Most people agree the planet is warming somewhat, but there a whole hell of a lot of respectable climatologists who reject the notion that is due to the activities of man. Furthermore, even if this bill does pass and we do reduce our emissions, it is sheer folly, and unbelievable arrogance that the temperature of the earth will cool because of this. Anyone who claims this is going to have some sort of game-changing impact is a dumbass, pure and simple.