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Global Warming and Carbon Constraints: Conventional Wisdom versus Reality

Global Warming and Carbon Constraints: Conventional Wisdom versus Reality. Myron Ebell Director, Energy & Global Warming Policy Competitive Enterprise Institute Washington, D. C. mebell@cei.org www.cei.org

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Global Warming and Carbon Constraints: Conventional Wisdom versus Reality

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  1. Global Warming and Carbon Constraints:Conventional Wisdom versus Reality Myron Ebell Director, Energy & Global Warming Policy Competitive Enterprise Institute Washington, D. C. mebell@cei.org www.cei.org Oklahoma Independent Petroleum Association Las Colinas, Texas, 10th June 2007

  2. Where is CEI coming from? • Non-profit, non-partisan public policy institute specializing in regulatory issues from a free market perspective. • Liberty We support policies that fortify (or are at least consistent with) political and economic liberties. • Science We believe that scientific objectivity must be scrupulously respected, regardless of our political preferences. • Life is a risk We reject the one-sided precautionary approach and think that the costs and benefits of proposed policies must be compared.

  3. The conventional wisdom • Rapid warming (IPCC models) • Serious adverse impacts (Al Gore, James Hansen, etc.) • Costs of warming high (Stern Review) • Costs of mitigation comparatively low (Stern Review)

  4. The conventional wisdom continued • Momentum growing to do something (Public opinion polls, Democratic takeover of Congress, California, RGGI, Supreme Court decision, Major companies in USCAP support cap-n-trade) • Doing something means mandatory limits • Carbon constraints inevitable • We need to get started now, take a first step • Regulatory certainty needed • Better to pass a bill we can live with this Congress • Time to come to the table (or trough)

  5. The Associated Press 31st May 2007 “The head of NASA said he was not sure global warming was a problem and added that it would be ‘arrogant’ to assume the world’s climate should not change in the future.” New York Times 9th June 2007 Headline: “NASA Leader Regrets Global Warming Comments” Maintaining the conventional wisdom requires political correctness

  6. Reality • Modest warming (Historical data) • Mild impacts (IPCC) • Costs of warming low (Stern Review read correctly) • Costs of mitigation high (Stern Review ditto)

  7. Reality continued • Momentum changes • Carbon constraints are not inevitable—it is much easier to stop a bill than to pass one • Mandatory carbon constraints are failing in EU • First step in wrong direction harms not helps • Any bill enacted this Congress will be used as a stepping stone for a much worse bill next Congress • Holdouts usually get the most in negotiations • Regulatory certainty is not of this world • Time to oppose cap-n-trade legislation

  8. First, a little climate science: Is the climate changing? • Yes, the climate is always changing.

  9. For example, the last 400,000 years of Ice Ages and Inter-glacial periods

  10. Ice Age—approximately 15,000 years agoSource: NOAA OUR CHANGING CONTINENTBy John S. Schlee OUR CHANGING CONTINENT By John S. Schlee

  11. Natural climate variation in historic time—2,000 BC to present

  12. Weather Satellite Temperature Data 1979-2007(Source: John Christy, University of Alabama at Huntsville)

  13. But the Arctic is warming up, right?(Source: Polyakov et al., 2003)

  14. 1870-2006 Mean Annual Temperature Time SeriesStation: Weatherford, Texas(from the United States Historical Climatology Network dataset)

  15. 1892-2006 Mean Annual Temperature Time SeriesStation: Ada, Oklahoma(from the United States Historical Climatology Network dataset)

  16. The role of carbon dioxide • The radiative forcing (that is, warming) effect of CO2 and other greenhouse gases is not linear. • Each doubling of CO2 in the atmosphere results in approximately the same increase in radiative forcing (about 1.2 degrees C in the laboratory). • Thus an increase from 10 to 20 parts per million will have the same warming effect as from 280 to 560 ppm. • CO2 level in 1800 is estimated to have been 280 ppm. The current level is 390 ppm.

  17. There is no obvious correlation between temperature and CO2 levels over geologic time periods

  18. But don’t the computer models predict more warming? • The IPCC runs various scenarios through a number of general circulation models. The results of these storylines are often loosely described in the media as predictions or projections. • The IPCC does not refer to them as predictions or projections. That is because general circulation models do not have predictive capability. • To get scary numbers, the IPCC uses highly unrealistic assumptions.

  19. The one certain effect of increasing atmospheric CO2 levels: Increased plant growth and hardiness— confirmed in hundreds of USDA-funded studies Possible effects of global warming: Rising sea levels Greenland and Antarctica melting More intense and frequent severe weather events Spread of “tropical” diseases Gulf Stream shutdown Some potential impacts of global warming

  20. Al Gore: 20 feet of sea level rise Dr. James Hansen: 80 feet! IPCC’s Third Assessment Report: 4-35 inches, with a mean of 20 inches IPCC’s Fourth Assessment Report: 7-23 inches, with a mean of 14 inches in this century Example of Impacts: Sea Level Rise

  21. Examples of Impacts: Malaria in the United States 1882 1932 1912 1934-5

  22. Examples of Impacts: US Hurricane Strikes(Decades, 2001-05 through Rita) • Decade Average • Cat 1-5 12.2 • Cat 3-5 6.0

  23. 5-20% of global economic output “now and forever” Uses extreme scenarios Uses extreme cost estimates Assumes little or no adaptation Costs primarily occur in 22nd century when world economic output is many times that of today Costs of Global Warming: Stern Review

  24. No more than 1% of total world economic output in next two centuries Total costs of mitigation over two centuries must be paid by 2050 According to Sir Partha Dasgupta, Frank Ramsey Professor of Economics, Cambridge University, this will require a 97.5% savings rate now Costs of Mitigation: Stern Review

  25. The conventional wisdom: Carbon constraints are inevitable Thu Oct 5, 2006 9:01 PM ET By Scott Malone IRVING, Texas (Reuters) - The head of a large California natural gas and electric utility on Thursday called for national legislation to cap greenhouse gap emissions. In an interview on the sidelines of a Business Council meeting in this Dallas suburb, Peter Darbee, chairman, president, and CEO of PG&E, said "The probability of legislation at the national level approaches 100 percent within the next five years."

  26. Carbon constraints: How are they working in the EU?

  27. Economic collapse is the surest way to reduce emissions. Poland -30% Russia -24% Germany -17% United Kingdom -14% Sweden -4% Japan +14% The U. S. is about in the middle, even though our economic and population growth have been among the highest . United States +17% Ireland +23% Canada +27% Australia +33% Portugal +40% Spain +48% Greenhouse Gas emissions since 1990

  28. The fact is… • That greenhouse gas emissions have gone up in every nation that ratified the Kyoto Protocol and undertook to reduce greenhouse gas emissions since 1997, the year Kyoto was negotiated. • That emissions have been rising much faster in the major rapidly developing nations, such as China (+190% economic growth since 1990) and India (+120% economic growth since 1990). That’s why China is building one new coal-fired power plant a month.

  29. It isn’t easy or cheap to cut emissions • Major European countries have raised gasoline taxes dramatically since 1997 to try to reduce emissions. • As a result, gasoline prices average $6-7 dollars a gallon in major European countries. • Yet, according to the European Environment Agency, greenhouse gas emissions from transportation since 1990 have gone up 26%.

  30. EU Emissions Trading System: regulatory certainty?

  31. Effects of price uncertainty in the EU ETS • No scholarly studies yet, but anecdotal evidence suggests that European industry is moving to the new EU members in Eastern Europe. • No scholarly studies yet, but anecdotal evidence suggests that capital investment in the energy sector has plummeted.

  32. So if cap-n-trade doesn’t work, why do so many companies want it? • The Enron example • Goldman Sachs • U. S. Climate Action Partnership • BP, Shell, Chevron • And now even Exxon Mobil

  33. So if cap-n-trade doesn’t work, why do so many companies want it?

  34. What about California, RGGI, and other state efforts? Isn’t there strong public support? • California and other States that have enacted or are near enacting mandatory limits on greenhouse gas emissions already have much higher than average electricity prices. • Strong support for these programs is concentrated in the bi-coastal elite.

  35. Costs of energy-rationing policies will not be evenly distributed • States that already have high electricity costs will not be hit as hard as States that are more dependent on cheaper coal-fired power plants. • American industry has been concentrating in the heartland States where electricity costs are lower. • As the price of electricity rises in low-cost States to the level of the high-cost States, American industry will move to foreign countries that have not undertaken mandatory emissions reductions.

  36. The reality is... Global energy demand 2003-2030,+71%(from EIA’s 2006 International Energy Outlook)

  37. The reality is… emissions will rise substantially

  38. The train wreck • The Kyoto Protocol is just the first step in putting humanity on an ever tighter hydrocarbon energy rationing diet. Leading alarmists are now in general agreement that global greenhouse gas emissions must be reduced by at least 60% by 2050. Full compliance with the Kyoto Protocol would only reduce emissions by 5%.

  39. KYOTO PROTOCOL WOULD AVERT ONLY 0.06 C OF GLOBAL WARMING BY 2050 Without Kyoto With Kyoto

  40. The train wreck when reality meets fantasy:Global Energy Needs versus Global Warming Goals

  41. In “An Inconvenient Truth”, Al Gore suggests that stopping global warming will be easy. People should: buy compact fluorescent light bulbs, buy hybrid autos, and try to telecommute from home. In his 21st March testimony, Al Gore supported: Carbon taxes, Cap-and-trade, An immediate freeze on U. S. emissions, and An immediate ban on new coal-fired power plants. How to achieve the perfect climate?Gore v. Gore

  42. Important studies reveal that costs of mitigation outweigh costs of global warming • Bjorn Lomborg’s Copenhagen Consensus • Richard Tol’s analysis of the costs of global warming • Indur Goklany’s studies comparing the costs of mitigation versus directly addressing environmental problems • Ross McKitrick’s study on cap-and-trade • Moreover, opportunity costs matter

  43. Choosing between costs and targets • In creating a program to reduce emissions, a choice must be made between setting an emissions target or setting a cost of emissions. • If an emissions target is set, there is no way to know what the costs may be. • If an emissions cost is set, there is no way to know what reductions may result. • Putting a limit on costs, such as the Bingaman safety valve, would result in negligible emissions reductions.

  44. Vulnerability to climate change • Modern industrial societies are not very vulnerable to changing weather or bad weather. • Modern agriculture and silviculture are more vulnerable, but are highly adaptable. • Subsistence societies are very vulnerable to changing weather and bad weather because they lack modern technology and energy.

  45. The American people prefer warmer climates • Since air conditioning became practical and affordable, Americans have been moving south. • Every Census since 1960 confirms that more people prefer to live in warmer climates as long as they have air conditioning. • Air conditioning uses a lot of energy.

  46. However, Americans support action on global warming • Recent polls show that most Americans rate global warming as a serious problem: 52% very serious, 37% major but not high priority (NYT/CBS poll, April 20-24, 2007). • But only 15% rate it as the top environmental problem (NYT/CBS). • And recent polls also show that most Americans support federal government action to address global warming.

  47. But open debate changes minds • Intelligence Squared debate, 14th March 2007, held in the upper East Side of Manhattan • Motion: This house believes that global warming is not a crisis. • Before debate: 30% agreed, 57% disagreed • After debate: 46% agreed, 42% disagreed!

  48. But the public is less enthusiastic about energy price increases. • 58% oppose higher taxes on gasoline (NYT/CBS poll, April 20-24, 2007). • 76% oppose $2 a gallon tax on gasoline (NYT/CBS). • 70% oppose $1 a gallon tax on gasoline (NYT/CBS). • People do support government mandates on big business as long as the costs are not passed along to consumers.

  49. So what is Washington doing about it? President Bush: • 34 billion gallons of ethanol and miracle fuels by 2017 Reid-Bingaman anti-energy bill, S. 1419: • 36 billion gallons by 2025—15 billion ethanol, 21 billion miracle fuels Plus: • 4% per year higher CAFÉ standards, anti-price gouging on gasoline prices, higher efficiency standards, and 15% renewables for electric utilities

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