Vol. VII, No. 3

Vol. VII, No. 3

February 05, 2003

Politics

 

Attorneys General Threaten Lawsuit

 

Attorneys general from three States-Connecticut, Massachusetts and Maine-have notified the Bush administration of their plan to sue the U.S. Environmental Protection Agency unless it classifies carbon dioxide as a pollutant under the Clean Air Act, which would allow the agency to begin regulating emissions of the gas.

 

In a letter to EPA administrator Christie Whitman, the attorneys general, all Democrats, warned the EPA that if the agency does not act within 60 days they will bring the suit.  “We have not seen any appreciable progress on the development of a national program to address carbon dioxide emissions,” says the letter.  “In seeking to protect the health and welfare of our citizens from the impacts of climate change, we are left to fall back on our available remedies available under existing law.”

 

The attorneys general claim that the EPA is violating federal law by not regulating CO2.  “The Clean Air Act requires the EPA to take certain actions when it determines that a pollutant may ‘cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare’.”

 

The attorneys general base their argument on the administration’s Climate Action Report 2002 (CAR) which was submitted to the United Nations Framework Convention on Climate Change   in   May  2002.    They   claim  that  the admission that climate changes “are likely due mostly to human activities,” obligates the EPA to regulate CO2.  But the CAR should have never been released because it was based on the thoroughly discredited National Assessment, a report prepared by a federal advisory committee appointed by the Clinton Administration.

 

Marlo Lewis, a senior fellow at the Competitive Enterprise Institute in Washington, D.C., argues that the attorneys general ignore the plain language, structure, and legislative history of the law.    The AGs   build   their   case   on   Section 103(g), which refers to CO2 as a “pollutant.” However, the context of that sole reference to CO2 in the Act is a discussion of “nonregulatory strategies,” and the passage concludes with the admonition that, “Nothing in this subsection shall be construed to authorize the imposition on any person of air pollution control requirements.”   According to Lewis, “If nothing in that subsection gives EPA authority to impose new control requirements, then the passing reference therein to CO2 as a ‘pollutant’ cannot provide such authority.”

 

Lewis also accused the attorneys general of trying to end run the legislative process. “They want to legislate energy taxes or their regulatory equivalent through the courts rather than allow Congress to make the law.”

 

The threatened lawsuit follows a letter that 11 attorneys general sent to the administration last July urging it to regulate CO2.  It also follows a lawsuit against the EPA filed by three environmental groups to force the agency to regulate automotive emissions of CO2 using the same legal argument as the state attorneys general.

 

An industry source told Greenwire (January 31, 2003) that there is little to worry about. “If I’m an EPA attorney, I’m not losing any sleep over defending this lawsuit,” he said.  “Of course, the issues would have to be briefed properly.  But the risk of EPA losing this case, if it’s even litigated, is very, very low.  I just think arguing that CO2 is a pollutant is too big a legal hurdle to get over.”

 

NC Approves Renewable Energy Plan

 

The North Carolina Utilities Commission approved a plan on Jan. 28 that will allow the residents of that state to purchase electricity produced from renewable sources.  It is the first statewide program of its kind in the nation, according to the Charlotte Observer (January 29, 2003).

 

The NC Green Power program, to be launched in six months, will initially allow residential customers to buy power generated mostly from landfill gases.  Wind and solar power are slated to make up 15 percent of the state’s electricity supply by the third year of the plan.  Customers who choose to purchase electricity from renewable sources will buy it in blocks of 100 kilowatt-hours for an additional $4 per month.

 

Large commercial and industrial customers will pay an additional $2.50 per block of electricity and will have access to a greater variety of energy sources, including animal wastes and small hydroelectric plants.  The rate premiums are meant to cover the higher costs of producing renewable electricity, but similar rate premiums in other states have proved insufficient.

 

Nearly every proposed source of renewable energy has its detractors, since every source of energy carries some environmental costs.  The environmental group, Appalachian Voices, objected to the burning of biomass, for example, on the grounds that it produces air emissions. 

 

“The problem is that everybody wants solar or wind power, but we don’t have any,” said Karen King of Advanced Energy.  Currently, North Carolina has only a couple of solar power plants and no wind power connected to the grid.

 

Dan Lieberman of the Center for Resource Solutions, a San Francisco-based nonprofit that certifies renewable energy programs, warns that the program will require massive marketing to be successful.  “The product isn’t going to sell itself,” he said.

 

Economics

 

Mortality Effects of Regulating Coal

 

A new study finds that regulations that would reduce the use of low-cost coal-fired power would lead to significant increases in mortality rates, particularly among the poor.  The study, Mortality Reductions From Use of Low-Cost Coal-Fired Power: An Analytical Framework, by Daniel E. Klein, president and founder of Twenty-First Strategies, and Ralph L. Keeney, a research professor with the Fuqua School of Business at Duke University, notes that “It is now widely recognized that wealthier individuals are more likely to live safer, healthier, and longer lives.” 

 

Low cost coal has been a major part of the U.S. energy supply and has brought tremendous benefits to Americans.  “Indeed,” says the study, “the availability of low-cost electricity has accelerated the electrification of our energy systems, with an ever-growing share of our energy use comprised of electricity.”  Any curtailment on the use of coal would force Americans to use other more expensive alternatives, most likely natural gas.

 

The study proposes an analytical framework for determining the effects of reducing coal use, but does not “presume any level of coal displacement of any particular policy initiative.”  What it does is extrapolate the costs of reducing coal use from a series of economic studies to determine the income and employment effects of a hypothetical 100 percent displacement of coal, which are then related to health effects.  These findings may then be “scaled on a linear basis to estimate the premature mortality implications of various policy initiatives….”

 

The study finds that fully replacing coal-fired power in the U.S. would reduce total household income by 125-225 billion dollars in 2010, the peak year impact.  It would also lower employment by 2.2 to 4.5 million jobs.  These impacts would persist for 5 to 10 years as the economy adjusts to higher energy costs.

 

The relationship between loss of disposable income and mortality rates suggests that regulatory costs of $6.8-18.5 million lead to one additional adult death.  For regulatory costs related to electricity, $8.9 million induces one additional adult death.  Thus a loss of disposable income of $125-225 billion in 2010 could lead to 14-25 thousand additional deaths.  The study also notes that these costs disproportionately affect the poor, because they spend a larger percentage of their income on electricity than wealthier individuals.  Those earning less than $15,000 per year (about 16.5 percent of all households) would suffer 43 percent of the total additional deaths, while those earning over $50,000 would only incur 9 percent of the additional deaths.

 

The study did not estimate income-related deaths in children or unemployment-induced deaths, partly because of the possibility of double counting.  “However, our extrapolations from other studies suggest substantial mortality impacts, possibly in excess of 100,000 lives,” says the study.

 

The study was funded by the Association of American Railroads, the Center for Energy and Economic Development, the Edison Electric Institute, the National Black Chamber of Commerce, the National Mining Association, and the National Rural Electric Cooperative Association.

 

Wind Powered by Tax Credits

 

The American Wind Energy Association (AWEA) has announced that the amount of generation capacity added in 2002 fell off significantly from 2001, due to uncertainty over the availability of a federal 1.7-cent-per-kilowatt-hour tax credit for wind farm owners and operators.  The tax credit expired in December 2001 and was not renewed again until March 2002.  The tax credit lapsed again in December 2002.  Only 410 MW of wind power generation were installed in 2002, compared to 1700 MW in 2001.

 

This came as no surprise to AWEA, however, which predicted that there would be a decline in new generation unless the tax credit was kept up to date.  This is not the first time that a lapse in the tax credit has had a significant impact on new installation.  In 1999, installation of new generation fell to 50 MW when the tax credit was no longer available.  Because wind power is not cost-competitive without the tax credit, the lapses lead to a boom-and-bust cycle for the industry.

 

Now, Sen. Gordon Smith (R-Ore.) has introduced a bill in Congress to extend the tax credit through Jan. 1, 2014 to allow for growth in the market.  “We love it,” said Jaime Steve, AWEA’s legislative director.  “It gives business some stability so they can plan and gets rid of the ‘boom-and-bust’ cycle in the industry.”  One energy company, FPL Energy, has plans to install significant wind generating capacity this year, anywhere from 700 MW to 1200 MW.  But, according to company spokesman Steven Stengel, the fate of the production tax credit will have an impact on the company’s future plans.

 

What is not clear is why taxpayers should be funding an industry that cannot survive without their help, or why wind power should receive special treatment over its competitors.  Wind power subsidies are so extensive that their value sometimes exceeds the wind farm’s revenues from selling electricity.

 

It is unlikely that the bill will succeed, however.  A bill introduced last year by Rep. Mark Foley (R-Fla.) to extend the tax credit for five years went nowhere.

 

Science

 

Greenhouse Effect Weakening?

 

A new study appearing in the January 10 issue of Geophysical Research Letters has found that the greenhouse effect may be weakening due to changes in cloud cover that do not correspond with climate model predictions.

 

The study, conducted by Robert Cess, with the State University of New York at Stony Brook, and his late colleague Petra Udelhofen, looked at the role of clouds on climate in the tropics and subtropics by comparing the results of a climate model to observations.  The model shows temperature rising since 1970 along with the strength of the greenhouse effect.

 

As more greenhouse gas concentrations increase, less heat or outgoing longwave radiation (OLR), should be able to escape the atmosphere.  If this is the case, then observations from space should measure a long-term decline in OLR.  The model also indicates, however, that there should be a decline in incoming sunlight, or absorbed shortwave radiation (ASW).  This would come about through increases in cloud cover.

 

Cess and Udelhofen use satellite data from 1985 to the present to test this model result.  What they found was that even though there has been a general warming since 1985, both OLR and ASW are increasing, not decreasing.  In other words, the greenhouse effect is weakening.  With the exception of a few years after the eruption of Mt. Pinatubo, the increase in OLR has been fairly steady.  Moreover, increases in the ASW correspond with an observed decline in cloudiness.  With fewer clouds, it is easier to raise the temperature at the surface and there is no need to invoke greenhouse gases to explain the change.

 

There are several possible explanations for the decline in tropical and subtropical cloudiness.  Cloudiness may be responding to climate change, as suggested by Richard S. Lindzen at MIT.  His research has found that high altitude clouds that block OLR decrease as temperature increases.  Cess and Udelhofen argue, on the other hand, that the change in cloud cover is due to natural variation.  “If the change in cloud cover is the result of natural variability acting over decadal time scales, this could considerably hamper efforts at detecting the radiative signature of future global warming.”  Regardless of the reason, this is yet another instance where the models do not match reality.

 

Announcements

 

·    David Wojick, founder and president of ClimateChangeDebate.org, has published a blockbuster study on climate change uncertainties.  The study, The New View of Natural Climate Variation: Fundamental Climate Science Issues Raised in Six Major National Academy of Science Studies, shows that there are still major uncertainties in the climate science.  According to Wojick, scientists “have discovered or confirmed about ten natural mechanisms of climate variation, each of which can in theory explain all of the changes in 20th Century climate. Human GHG emissions are therefore just one of many alternative theories.  The study is available at www.nam.org.

 

·    Jesse Ausubel of the Rockefeller University will give a Cooler Heads Coalition congressional and media briefing on “Climate Change: the Known, the Unknown, the Unknowable” on Friday, February 7, from noon to 1:30 in Room 628 of the Senate Dirksen Office Building.  Lunch will be provided, and reservations are required.  To attend, please contact Paul Georgia at pgeorgia@cei.org or (202) 331-2257.  Include your name, telephone number, e-mail address, and institutional affiliation.

 

THE COOLER HEADS COALITION

 

Alexis de Tocqueville Institution

Americans for Tax Reform

American Legislative Exchange Council

American Policy Center

Association of Concerned Taxpayers

Center for Security Policy

Citizens for a Sound Economy

Committee for a Constructive Tomorrow

Competitive Enterprise Institute

Consumer Alert

Defenders of Property Rights

Frontiers of Freedom

George C. Marshall Institute

Heartland Institute

Independent Institute

JunkScience.com

National Center for Policy Analysis

National Center for Public Policy Research

Pacific Research Institute

Seniors Coalition

60 Plus AssociationSmall Business Survival Committee