Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
The global warming fad is waning. At the same time, a majority of the American people have realised that the policies proposed to address global warming would cause increases in energy prices ranging from substantial to immense. This shift in public opinion presents an equally immense opportunity to President Obama's Republican opponent in the November 2012 election. Whether the Republican nominee takes advantage of the opportunity depends on two factors.
First, it depends on whether the issue is needed at all. The apparent collapse of America's feeble recovery and the fact that Obama's economic policies are counterproductive across the board make it possible that the president will be overwhelmingly defeated and hence no particular policy difference will matter. Second, the numerous Republican candidates for the nomination are not equally capable of making the issue stick or even of grasping what is at stake for America's future. In my opinion, Texas Governor Rick Perry is capable of taking full advantage of the opportunity and former Massachusetts Governor Mitt Romney clearly is not.
Nonetheless this could be the first presidential campaign in which global warming policies or, more precisely, energy-rationing policies that were initially promoted to address global warming, play a prominent role. It could be argued that Al Gore lost to George W. Bush in 2000 because of it, but that is not because Gore ran on the issue. Although Gore had already set himself up as the political leader of the global warming movement before Bill Clinton chose him as his running mate in 1992, he barely mentioned the issue in the 2000 campaign: even then his political operatives understood that it was a loser with the American electorate. If Gore had won West Virginia, hitherto a solidly Democratic state, he would have secured a majority in the electoral college and been elected president. He lost it because voters figured out that the first casualty of Gore's global warming agenda would be West Virginia's major industry: coal.
Nor did global warming play any role in the 2004 or 2008 presidential elections. Senator John Kerry, a global warming true believer, barely mentioned it in his 2004 campaign against President Bush, who had staked out an incoherent middle position on the issue. Bush accepted that global warming was a problem, but argued that doing anything about it would be too costly, while at the same time pursuing a number of piecemeal measures to reduce greenhouse gas emissions.
In 2008, Republican candidate John McCain was the Senate's leading promoter of global warming alarmism and of cap-and-trade legislation, while junior Senator Barack Obama had never shown much interest in environmental issues. During the campaign, McCain kept quiet about his views in order to try to hold on to the Republicans' conservative base, while Obama adopted standard green positions in order to keep the Democrats' base happy. As a consequence, neither candidate was in a position to take advantage of public outrage over high gasoline prices, which was the hottest issue early in the campaign, before the Wall Street panic in August crashed the economy and caused oil prices to plummet.
Candidate Obama quietly made two candid comments about his energy agenda. He told a San Francisco newspaper in January 2008: "Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket." And when gasoline prices peaked at over $4 a gallon in June of that year, Obama said that the problem wasn't that prices were so high, but that they had gone up too quickly for people to get used to them. He said, "I think that I would have preferred a gradual adjustment."
Those two comments contain the seeds of everything that Obama has done since being elected president. With huge Democratic majorities in the House and Senate in 2009 and 2010, Obama first pushed for cap-and-trade legislation that would tighten greenhouse gas emissions by raising prices of conventional energy from coal, oil and natural gas. Higher prices force consumers to use less and make more expensive alternatives — such as wind, solar and biofuels — more competitive.
Cap-and-trade legislation, similar to the EU's Emissions Trading Scheme, was narrowly approved by the House of Representatives in June 2009. Americans across the country, but especially in the heartland states that depend on energy-intensive industries, reacted overwhelmingly against the House vote. When senators returned to Washington after a week back in their states meeting with constituents, they decided not to take up the House bill, but instead turned to healthcare reform legislation, which enjoyed broader public support.
Cap-and-trade has been dead ever since. For a while, proponents tried to push cap-and-trade by calling it something else, such as "pollution reduction and investment incentives", but people weren't fooled. They now understood that these were just polite names for imposing a big, new indirect tax on them.
The 2010 congressional elections confirmed the end of cap-and-trade putting Republicans back in control of the House. Several prominent Democratic incumbents who had voted for it lost in stunning fashion.
That, of course, is not the end of the story. President Obama and Democrats in Congress have become deeply committed to a wide range of policies designed to reduce conventional energy production and consumption, to mandate energy efficiency and increased use of alternative energy, and to force people to pay more for electricity and motor fuel, even as the reason for this agenda has disappeared from public debate. Polls show that most people have stopped believing in global warming as a crisis or even as a problem that needs to be addressed.
Partly, this is due to the economic crisis, but only partly. Despite the establishment media and America's bi-coastal elite (which are roughly equivalent to London's chattering classes) repeating over and over that there is an overwhelming scientific consensus that the scientific evidence for catastrophic global warming is overwhelming (and so on), many people who make stuff, dig up stuff and grow stuff for a living — and consequently have more practical knowledge of the material world than those who manipulate words or financial data — have refused to learn the lesson.
Instead, they have had several glimpses behind the curtain of scientific consensus — most notably the Climategate scandal — and have found that global mean temperatures have risen by only a small fraction of what the computer modellers confidently predicted beginning in the late 1980s and have continued to predict with ever more confidence. They have also found that recent temperatures are no higher than those in the Medieval Warm Period, an era of human flourishing. And they have found that the dire effects of warming, such as accelerated sea level rise, are not occurring or are not likely to occur or have been vastly exaggerated.
Complementing the weak scientific case for alarm, many people have realised that warmer climates are more pleasant and healthier. That's why Americans move to Phoenix or Florida when they retire. If global warming theory turns out to be correct and winters become milder, then they may not be so eager to move from Michigan or New York.
And that's why President Obama dropped global warming and started talking about transforming America's boring old fossil fuel economy into an exciting new clean energy economy and replacing all those dirty jobs digging coal and drilling for oil with green jobs that are almost as desirable as practising law (well, not really). As Obama put it in June 2010: "As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs — but only if we accelerate that transition. Only if we seize the moment." For those not captivated by this vision, Obama warns that if we are unwilling to grow wealthier by replacing cheap fossil fuels with expensive but unreliable alternatives such as windmills, then we will lose the race to build tomorrow's technologies to China. (Note that China gets 80 per cent of its electricity from coal, while the US gets just under half.)
Polls have shown that Americans are highly enthusiastic about clean energy, at least until they learn how much more expensive it is. But the new rationale has quickly worn thin as the claims of green jobs have been revealed as bogus. The end of the line was reached in September, when solar panel manufacturer Solyndra, which had received $527 million in government loans, collapsed. Risky loans are just one part of the massively expensive corporate welfare system that has been created for renewable energy. Wind and solar power and ethanol get billions of taxpayer dollars a year in subsidies. Solyndra's collapse was so embarrassing that when the president presented his new jobs package to a joint session of Congress a few days later, he didn't mention green jobs or clean energy. Instead, he focused on new highway projects.
The rhetoric has been abandoned, but not the policies. Immediately after the Democrats' stunning defeat in the 2010 congressional elections, Obama said: "Cap-and-trade was just one way of skinning the cat." Faced with a hostile Congress, the administration is pursuing a mind-boggling list of new regulations under existing pollution laws to skin the cat — that is, to put the squeeze on fossil fuel production and use.
The Environmental Protection Agency (EPA) has finalised Clean Air Act rules to regulate greenhouse gas emissions and is at various stages of implementing new regulations to further reduce conventional air pollutants from electricity utilities, industrial boilers and cement plants, and to impose tighter standards on regional haze and on air pollutants produced in one state that are blown into other states. Utilities have already started announcing coal plant closures. A novel interpretation of the Clean Water Act has been concocted to block permits for new surface coalmines in Appalachia, including West Virginia (which since Gore has become a reliably Republican state in presidential voting).
The administration is also working mightily to lower oil and natural gas production on federal lands and in federal offshore areas by delaying indefinitely the issue of the environmental permits required to begin drilling. These efforts are succeeding: the Department of Energy forecasts a decline in domestic oil production in the near future, despite increasing production on private lands.
The economic effects of declining energy production are obvious. On the other hand, the EPA has long disputed the cost of environmental regulations. Lisa Jackson, the head of Obama's EPA, even testified before Congress that all the new regulations would create lots of new green jobs. After all, Jackson said with a straight face, companies will have to hire new employees to build the pollution control devices required and EPA will have to hire new compliance officers to do the paperwork.
Obama went along with this outlandish bunkum until recently when he delayed another new air regulation until 2013. That's because complying with the proposed rule to set tighter standards for ozone (or smog) has credibly been estimated to cost $1 trillion a year (in a $15 trillion economy). Obama still wants to do it, just not until after he gets re-elected.
Standing in his way to re-election will be the Republican nominee. Do any of the Republican candidates have the understanding and rhetorical skill necessary to connect the dots and demonstrate that what has caused investors and companies to flee from investing in America is Obama's regulatory onslaught? Are any of them capable of convincing voters that he has the determination necessary to undo what Obama has done?
The Republican contenders are talking a pretty good game. But the fact is that every past attempt to achieve even minor regulatory reform has failed; the economy is in such dire condition and the new rules being implemented are so damaging, that much more than reform is now required. My guess is that voters are not going to buy a lot of big talk unless they feel that the candidate is up to taking on the regulatory bureaucracy, the environmental pressure groups and the establishment media.
It is not easy to find out whether a candidate has the toughness now needed to push government out of the way so that free people acting in free markets can put America back on a path of robust, long-term growth. It appears that many conservative voters are using how the candidates have responded to the global warming juggernaut as a litmus test. Take Newt Gingrich, former Speaker of the House, for example. He has proposed abolishing the EPA. That's bold and visionary. Yet it was less than four years ago that Gingrich sat on a loveseat with the Democrat Speaker Nancy Pelosi and made a television commercial for Al Gore advocating that everyone needed to work together to solve global warming. That's when it looked as if the global warming agenda was on the verge of being enacted. Sorry, Newt, you're not up to the job.
Then there's former Governor Mitt Romney. When he ran for the nomination in 2008, Romney was not as gung-ho to do something about global warming as McCain, but he criticised President Bush for not doing enough. Now that global warming is a losing issue, Romney has adopted Bush's position. Global warming is a problem, but doing anything about it is too expensive. Romney has even brought in former Bush officials to advise him on these issues. If President Bush wasn't up to the job (and he certainly wasn't), then neither is Romney.
If you're looking for a gutsy guy, what about former Utah governor Jon Huntsman? He is a global warming true believer and has gone after Rick Perry for not being sufficiently trustful of scientific authority. Huntsman said during a debate in mid-September: "When you make comments that fly in the face of what 98 out of 100 climate scientists have said...all I'm saying is, in order for the Republican Party to win, we can't run from the science." For Huntsman to win, he is going to have to convince more than one per cent of Republican voters that he's the right man for the job.
Some of the other long-shot candidates have consistently opposed the global warming juggernaut, but conservative voters seem to be settling on the two candidates who have most emphatically rejected it and thus might have what it takes to save the economy — Rick Perry and Representative Michele Bachmann. Both are tough as nails, fearless, and less-government-more-freedom conservatives. The principal difference between them is that Bachmann has no executive leadership experience, while Perry has been governor of the most economically successful state in the Union for ten years. Bachmann briefly overtook Romney as the frontrunner when she entered the race early in the summer. When Perry became a candidate in August, he quickly shot to the top of the polls.
Here is how Perry replied to Huntsman at the debate: "The idea that we'd put America's economy at jeopardy based on scientific theory that's not settled yet, to me is just nonsense. Just because you have a group of scientists that have stood up and said ‘here is the fact'...Galileo got outvoted for a spell."
Perry's response was inarticulate, but he was getting at the two key points in the debate. First, there is nothing sacrosanct about scientific authority. The fact is that there is no scientific consensus about global warming; there is a political consensus among the scientific establishment, most of whom have no expertise in climate science, but many of whom do have strong political commitment to bigger government.
Second, it is irresponsible and foolish to commit to policies that will cost people trillions of dollars on the basis that you can trust scientists. People in authority are of course often trustworthy, but the prudent course is to assume that they are not. President Reagan's motto for dealing with the Soviet leaders is more generally appropriate: "Trust, but verify." One of the most obvious characteristics of many of the leading scientists who are promoting global warming alarmism is their unwavering resistance to all attempts to verify their conclusions.