Saturday, December 20, 2008
CARB Takes Criticism Well
Here is my Townhall column explaining how the California Air Resources Board (CARB) ignored scathing peer reviews of its economic analysis, and voted unanimously to go forward with the statewide cap-and-trade program (and other goodies) contained in AB 32, aka "The Global Warming Solutions Act of 2006." (So now we can stop worrying about global warming.) Excerpt:
Although readers know my views about cap-and-trade programs, that's not why I wrote about this episode. It is truly shocking how crazy CARB's economic analysis was. If you want to take the IPCC science and make a case for a carbon tax or cap-and-trade, you can certainly do so; William Nordhaus makes a strong case [pdf], for example.
But that's not what CARB did; instead they claimed that setting an aggressive emissions target would boost the California economy. I'm just speculating, but I bet higher-ups told the economists something like, "With the recession and huge budget deficit, there's no way this is going through if we report that it will kill jobs and tax revenue. So you come up with a way that AB 32 boosts the economy."
The fallacy in CARB’s reasoning is easy to spot. Right now there is nothing preventing businesses from lowering their emissions, and consumers right now are able to adopt the “efficiency” measures that would allegedly save them so much money. And yet, CARB would have us believe that the private sector is so incredibly shortsighted (or just hates the planet that much), that the California politicians have no choice but to force their constituents to become richer.
Outside experts—some of whom were explicitly invited by CARB itself to provide comments—have agreed with my harsh assessment....[For example, consider] the remarks of Harvard’s Director of Environmental Economics Program, Robert Stavins. Now let’s be clear, this guy is no Rush Limbaugh ditto-head. He has been a lead author for the Intergovernmental Panel on Climate Change (IPCC), and was Chairman of the EPA’s Economic Environmental Advisory Committee—a post to which he was initially appointed during the Clinton years. So this professor is no “denier.” Yet here’s what he had to say about CARB’s rosy predictions:
I have come to the inescapable conclusion that the economic analysis is terribly deficient in critical ways and should not be used by the State government or the public for the purpose of assessing the likely costs of CARB’s plans. I say this with some sadness, because I was hopeful that CARB would produce sensible policy proposals analyzed with sound scientific and economic analysis.
Although readers know my views about cap-and-trade programs, that's not why I wrote about this episode. It is truly shocking how crazy CARB's economic analysis was. If you want to take the IPCC science and make a case for a carbon tax or cap-and-trade, you can certainly do so; William Nordhaus makes a strong case [pdf], for example.
But that's not what CARB did; instead they claimed that setting an aggressive emissions target would boost the California economy. I'm just speculating, but I bet higher-ups told the economists something like, "With the recession and huge budget deficit, there's no way this is going through if we report that it will kill jobs and tax revenue. So you come up with a way that AB 32 boosts the economy."
Comments:
Not sure what you mean. They passed it unanimously after they went through the official process of asking for outside peer review, and then you saw the feedback they got. They gave some diversionary responses and then passed it unanimously.
So no, to answer your question. Not unless enough California voters get mad.
So no, to answer your question. Not unless enough California voters get mad.
Although readers know my views about cap-and-trade programs,
Not really. The people who only read your June article on C&T don't know about how you took back the part about how emission permit prices couldn't possibly reflect any kind of economic scarcity whatsoever.
I know, pointing out holes in your arguments makes me a stalker, blah blah blah, but seriously, you did not handle the issue well, and you went miles beyond "politicians will screw this up" and into the territory of "I have the inalienable right to **** over coastal dwellers."
Btw, I am having trouble understanding your position. You claim that
a) politicians will *over*issue permits, and
b) a zero price for emissions is closer to reflecting the social cost of emissions than the one resulting from the number of permits politicians will issue.
Those positions contradict each other. Can you see why?
Not really. The people who only read your June article on C&T don't know about how you took back the part about how emission permit prices couldn't possibly reflect any kind of economic scarcity whatsoever.
I know, pointing out holes in your arguments makes me a stalker, blah blah blah, but seriously, you did not handle the issue well, and you went miles beyond "politicians will screw this up" and into the territory of "I have the inalienable right to **** over coastal dwellers."
Btw, I am having trouble understanding your position. You claim that
a) politicians will *over*issue permits, and
b) a zero price for emissions is closer to reflecting the social cost of emissions than the one resulting from the number of permits politicians will issue.
Those positions contradict each other. Can you see why?
Those positions contradict each other. Can you see why?
They will overissue permits relative to what global warming activists (and the alarmed economists) think the right number is. I'm not claiming they will issue more than infinity.
They will overissue permits relative to what global warming activists (and the alarmed economists) think the right number is. I'm not claiming they will issue more than infinity.
Imagine there had been an environmental movement when agriculture was invented. Considering the dramatic environmental and health effects of agriculture (the effects were largely negative - except for that little detail 'stable food supply in greater amounts than ever before) - I'm sure the technology would have been ordered destroyed on the spot.
Human activity has always impacted the environment - how could it otherwise - but does this mean it's a bad thing?
Who can say with certainty that the overall long-range effect of global warming - if caused by humans - is negative? I don't see any reason to believe that.
And I doubt that anybody can claim to say with certainty climate change is bad. Unless we postulate that the current climate is the best possible climate, and any other climate can only be bad.
Yeah, that's likely.
Embrace climate change. New opportunities. And if you are REALLY concerned about the welfare of those negatively affected by it in the short-run - there's a simple solution: let them migrate freely. Share the wealth.
Human activity has always impacted the environment - how could it otherwise - but does this mean it's a bad thing?
Who can say with certainty that the overall long-range effect of global warming - if caused by humans - is negative? I don't see any reason to believe that.
And I doubt that anybody can claim to say with certainty climate change is bad. Unless we postulate that the current climate is the best possible climate, and any other climate can only be bad.
Yeah, that's likely.
Embrace climate change. New opportunities. And if you are REALLY concerned about the welfare of those negatively affected by it in the short-run - there's a simple solution: let them migrate freely. Share the wealth.
James_Rothfield: Is it really so hard for you to agree that those displaced by a new activity should be compensated by those displacing them?
I have never been against use of fossil fuels. I have merely held (what I thought was) the uncontroversial position that you can't just say, "I get to violate your rights in your land because of a cost-benefit analysis I did."
Yes, we may benefit, on net, from greater CO2 use. In that case, it shouldn't be any problem to compensate those expropriated by its use, right?
I have never been against use of fossil fuels. I have merely held (what I thought was) the uncontroversial position that you can't just say, "I get to violate your rights in your land because of a cost-benefit analysis I did."
Yes, we may benefit, on net, from greater CO2 use. In that case, it shouldn't be any problem to compensate those expropriated by its use, right?
I have merely held (what I thought was) the uncontroversial position that you can't just say, "I get to violate your rights in your land because of a cost-benefit analysis I did."
I suppose it's worthwhile to state it once, officially, every now and again for the benefit of new readers: Of course I have never ever said I was in favor of rights-violations. Silas and I disagree on the boundaries of rights. I even wrote a journal article currently in submission to the JLS on why I don't think in a truly free market, people would have to buy the extra right to emit CO2.
Silas disagrees with me academically on this point, and has thus spent the last 6 months saying I want to drown poor foreigners so I can have cheap gas.
I believe I've brought everyone up to speed.
I suppose it's worthwhile to state it once, officially, every now and again for the benefit of new readers: Of course I have never ever said I was in favor of rights-violations. Silas and I disagree on the boundaries of rights. I even wrote a journal article currently in submission to the JLS on why I don't think in a truly free market, people would have to buy the extra right to emit CO2.
Silas disagrees with me academically on this point, and has thus spent the last 6 months saying I want to drown poor foreigners so I can have cheap gas.
I believe I've brought everyone up to speed.
Bob_Murphy: When your delineation of rights boundaries becomes so ... arbitrary, it calls into question whether your description of our dispute -- about the boundaries of rights -- is accurate.
To fill in some history you didn't mention in your summary:
Bob_Murphy believes that if the government kicks someone off their land, that is an atrocity, and calls into question the moral legitimacy of any later use of this land; and furthermore, he does not modify his position based on the utility of the land to any party, or any compensation paid. (Read his book Minerva and skip to the part about the story of how the land for Minerva was "vacated", if you don't believe me.)
But then, if individuals accomplish the exact same thing -- dispossessing others of their land -- via CO2 emissions, Bob_Murphy considers that perfectly acceptable. If you are to go through his academic paper about how he thinks a truly free market would handle AGW, you find out that all of his "market solutions" amount to
a) the dispossessed paying people to stop evicting them, or
b) the dispossessed getting a lucky coincidence from gamblers betting on the value of their land.
Neither amounts to giving property rights the same level of respect that Bob_Murphy advocates when the topic happens to be eminent domain.
Hence, my dropped jaw at him, and pretty much the entire libertarian movement at this point.
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To fill in some history you didn't mention in your summary:
Bob_Murphy believes that if the government kicks someone off their land, that is an atrocity, and calls into question the moral legitimacy of any later use of this land; and furthermore, he does not modify his position based on the utility of the land to any party, or any compensation paid. (Read his book Minerva and skip to the part about the story of how the land for Minerva was "vacated", if you don't believe me.)
But then, if individuals accomplish the exact same thing -- dispossessing others of their land -- via CO2 emissions, Bob_Murphy considers that perfectly acceptable. If you are to go through his academic paper about how he thinks a truly free market would handle AGW, you find out that all of his "market solutions" amount to
a) the dispossessed paying people to stop evicting them, or
b) the dispossessed getting a lucky coincidence from gamblers betting on the value of their land.
Neither amounts to giving property rights the same level of respect that Bob_Murphy advocates when the topic happens to be eminent domain.
Hence, my dropped jaw at him, and pretty much the entire libertarian movement at this point.
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