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June 6, 2014

Latest Posts from Economist's View

Latest Posts from Economist's View


Why are Conservatives Attacking its Market-Based Climate Options?

Posted: 06 Jun 2014 01:08 AM PDT

Following up on the post below this one, this is Robert Stavins:

EPA's Proposed Greenhouse Gas Regulation: Why are Conservatives Attacking its Market-Based Options?, by Robert Stavins: This week, the Obama Administration's Environmental Protection Agency (EPA) released its long-awaited proposed regulation to reduce carbon dioxide (CO2) emissions from existing sources in the electricity-generating sector. The regulatory (rule) proposal calls for cutting CO2 emissions from the power sector by 30 percent below 2005 levels by 2030. ...
Much of the response this week has not been surprising..., but what should be surprising is the fact that conservative attacks on EPA's proposed rule have focused, indeed fixated, on one of the options that is given to the states for implementation, namely the use of market-based instruments, that is, cap-and-trade systems. Given the demonization of cap-and-trade as "cap-and-tax" over the past few years by conservatives, why do I say that this fixation should be surprising?
The Irony of Conservatives Targeting Cap-and-Trade
Not so long ago, cap-and-trade mechanisms for environmental protection were popular in Congress. Now, such mechanisms are denigrated. What happened? Professor Richard Schmalensee (MIT) and I recently told the sordid tale of how conservatives in Congress who once supported cap and trade had come to lambast climate change legislation as "cap-and-tax." Ironically, in doing this, conservatives have chosen to demonize their own market-based creation. ...
It may be that some conservatives in Congress opposed climate policies because of disagreement about the threat of climate change or the costs of the policies, but instead of debating those risks and costs, they chose to launch an ultimately successful campaign to demonize and thereby tarnish cap-and-trade as an instrument of public policy, rendering it "collateral damage" in the wider climate policy battle.
Today that "scorched-earth" approach may have come back to haunt conservatives. Have they now boxed themselves into a corner, unable to support the power of the marketplace to reduce their own states' compliance costs under the new EPA CO2 regulation? I hope not, but only time will tell.

[The original post is much, much longer and detailed.]

Paul Krugman: The Climate Domino

Posted: 06 Jun 2014 12:24 AM PDT

On the administration's new climate rules:

The Climate Domino, by Paul Krugman, Commentary, NY Times: Maybe it's me, but the predictable right-wing cries of outrage over the Environmental Protection Agency's proposed rules on carbon seem oddly muted and unfocused. ... Where are the eye-catching fake horror stories?
For what it's worth, however, the attacks on the new rules mainly involve the three C's: conspiracy, cost and China. That is, right-wingers claim ... it's all a hoax promulgated by thousands of scientists around the world; that taking action to limit greenhouse gas emissions would devastate the economy; and that, anyway, U.S. policy can't accomplish anything because China will just go on spewing stuff into the atmosphere.
I don't want to say much about the conspiracy theorizing, except to point out that any attempt to make sense of current American politics must take into account this particular indicator of the Republican Party's descent into madness. There is, however, a lot to say about both the cost and China issues.
On cost: It's reasonable to argue that new rules aimed at limiting emissions would have some negative effect on G.D.P.... Claims that the effects will be devastating are, however,... just wrong ... as I explained last week...
But what about the international aspect? At this point, the United States accounts for only 17 percent of the world's carbon dioxide emissions, while China accounts for 27 percent — and China's share is rising fast. So ... America, acting alone, can't save the planet. We need international cooperation.
That, however, is precisely why we need the new policy. America can't expect other countries to take strong action against emissions while refusing to do anything itself... And it's fairly certain that action in the U.S. would lead to corresponding action in Europe and Japan.
That leaves China... China is enormously dependent on access to advanced-country markets ... and it knows that it would put this access at risk if it refused to play any role in protecting the planet.
More specifically, if and when wealthy countries take serious action to limit greenhouse gas emissions, they're very likely to start imposing "carbon tariffs"... So China would find itself with strong incentives to start limiting emissions.
The new carbon policy, then, is supposed to be the beginning, not the end, a domino that, once pushed over, should start a chain reaction that leads, finally, to global steps to limit climate change. Do we know that it will work? Of course not. But it's vital that we try.

Links for 6-06-14

Posted: 06 Jun 2014 12:06 AM PDT

Energy Choices

Posted: 05 Jun 2014 05:50 AM PDT

Paul Krugman:

Energy Choices, by Paul Krugman: Nate Silver got a lot of grief when he chose Roger Pielke Jr., of all people, to write about environment for the new 538. Pielke is regarded among climate scientists as a concern troll – someone who pretends to be open-minded, but is actually committed to undermining the case for emissions limits any way he can. But is this fair?
Well, I'm happy to report that Pielke has a letter in today's Financial Times about the economics of emissions caps – something I know a fair bit about – that abundantly confirms his bad reputation. Better still, the letter offers a teachable moment, a chance to explain why claims that we can't limit emissions without destroying economic growth are nonsense. ...

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