Some Critical Points Often Overlooked in the Climate Policy Debate

It’s a big week for the Environmental Protection Agency. The agency held a listening session in San Francisco on its proposal to repeal the so-called Clean Power Plan (CPP), while Monday was the deadline to offer recommendations on how the agency might replace the CPP with new carbon dioxide emission guidelines for existing power plants.

Amid these developments, it’s a good time to reiterate the case against Obama-era energy policy and what the focus of the climate debate should be about.

Affordable and reliable energy is indispensable to public health and welfare.

When government raises the cost of electricity, it raises the cost of cooling and heating homes, manufacturing goods, and running businesses. In general, rising energy costs make the U.S. economy less competitive, chilling economic growth and job creation. It’s the vulnerable populations—the low-income, very young, and elderly—who are hit the hardest.

The Heritage Foundation estimates the Clean Power Plan would reduce annual employment by 479,000 jobs in 2027, reduce cumulative GDP by hundreds of billions of dollars between 2020 and 2030, and reduce cumulative household income by more than $10,000. And that’s just the first compliance period. The plan is designed to become increasingly punitive over time. It’s part of the larger “keep it in the ground” agenda to restrict and, ultimately, prohibit access to fossil fuels. The potential harm to public health and welfare is arguably greater—and certainly more immediate—than any debatable risk from carbon dioxide.

Climate policy is either a costly exercise in futility or a cure worse than the alleged disease.

Pick any climate policy on the books today, and you will find an abysmal benefit-cost ratio. Consider the Clean Power Plan. The Obama EPA’s climate model estimates the Clean Power Plan would avert less than two-hundredths of a degree Celsius of global warming by 2100. Yet achieving that miniscule result would cost untold billions of dollars in compliance burdens and other economic fallout. The stock rejoinder is that if the whole world implements such policies, we can take big bites out of global warming. Perhaps, but then the problem is that any truly ambitious global program of fossil-fuel suppression is potentially a humanitarian disaster.

For example, according to the science underpinning the Paris Climate Agreement, holding global warming below 2°C above pre-industrial levels—the pact’s central goal—will require reducing global carbon dioxide emissions 40-70 percent by 2050. There is no known way to do that without compelling developing countries to make substantial reductions in their current consumption of fossil fuels. Yet, more than 1 billion people in developing countries have no access to electricity and billions more have too little to eradicate poverty. Putting energy-starved countries on an energy diet would not improve human welfare—quite the reverse.

Climate policy expands government’s power to rig energy markets and plunder politically-disfavored industries.

This downside-risk of climate policy is seldom discussed in polite discourse, but it is obvious. Again, consider the Clean Power Plan. Defying the plain text of the Clean Air Act, the CPP establishes emission performance standards no existing coal or gas power plant can meet via technologies and practices that can be applied at the facility. To comply with unattainable standards, owners of fossil fuel power plants must purchase power from, invest in, buy emission credits from, or simply cede market share to lower- or zero-emission facilities elsewhere in the power sector.

Although the CPP would not wipe out coal- and gas-generation at one stroke, the Obama EPA looked forward to a series of increasingly onerous compliance periods. Moreover, major firms would likely go bankrupt sooner rather than later, because few investors are willing to park their capital in industries the U.S. government has targeted for extinction.

The Clean Power Plan is typical of “progressive” climate policies, whether carbon taxes, cap-and-trade, or renewable energy quotas. All ratchet up over time until the intended victims are financially depleted and politically marginalized. In short, climate policy is functionally a form of economic warfare waged by government against otherwise perfectly lawful enterprises. That is not how business is done in a free society.     

Climate change is less dangerous than “they” told us.

Climate change impact assessments are based on models that typically “hind-cast” two-to-three times as much global warming as has actually occurred in recent decades. Cato Institute scientist Patrick Michaels reports that there is one model, known as INM-CM4, which accurately tracks warming trends both at the surface and in the bulk atmosphere. When that model is run with a realistic emission scenario—one that assumes natural gas will continue to supplant coal as an electricity fuel—the predicted 21^st century warming is about 1.5°C. In other words, the world meets the most “ambitious” goal of the Paris treaty but without any of the economically damaging climate policies.

“Carbon pollution” rhetoric obscures important differences between carbon dioxide and all other substances regulated as “air pollutants” under the Clean Air Act.

First, unlike other regulated substances, carbon dioxide is to a large extent a proxy for energy use, and without abundant, affordable energy, life is nasty, brutal, and short. Second, carbon dioxide comes from carbon-based fuels, and the carbon in those fuels is not a contaminant or impurity but part of the chemistry that makes coal, gas, and oil economically valuable energy sources. Third, unlike other regulated emissions, carbon dioxide is nontoxic at many times current atmospheric levels; it is a natural constituent of clean air; it is an essential building block of the planetary food chain; and rising atmospheric concentrations have real benefits, such as protecting plant life from environmental stresses, greening the planet, and boosting agricultural productivity.

Carbon-based energy also has important ecological and social benefits.

As energy scholar Alex Epstein puts it, people using fossil fuels did not take a safe climate and make it dangerous, they took a dangerous climate and made it vastly more livable. For example, since the 1920s, global deaths and death rates related to extreme weather have declined by 93 percent and 98 percent, respectively. That specular improvement in public safety would have been impossible without mechanized agriculture, electrification, modern transportation systems, and other economic and technological developments requiring enormous quantities of affordable energy, the vast majority of which still comes from fossil fuels.

Climate economist Indur Goklany estimates that to maintain the current level of global food production without fossil fuels, “at least another 2.3 billion hectares of habitat would have to be converted to cropland”—an area equivalent to the territories of the United States, Canada, and India combined. “Not only have these fossil fuel–dependent technologies ensured that humanity’s progress and well-being are no longer hostage to nature’s whims, but they saved nature herself from being devastated by the demands of a rapidly expanding and increasingly voracious human population,” Goklany concludes. 

Only elected officials—not politically unaccountable bureaucrats—are qualified to make climate policy.

There are risks on both sides of the ledger—the relentlessly-hyped climate change risks and the studiously-ignored climate policy risks. That’s why the Clean Air Act is not a reasonable framework for making climate policy. The “endangerment findings” that trigger regulatory action apply only to the “pollutant” of concern, not to the constitutional, economic, health, or welfare risks arising from the regulatory agenda. Such a one-sided assessment may be okay when the pollutant at issue can directly damage health through inhalation or exposure and there are economical emission-control technologies. But it is a recipe for regulatory recklessness when the “pollutant” is carbon dioxide.  

Weighing and balancing climate change and climate policy risks is the job of politically accountable elected officials. Congress, working with the president through democratic process, should determine climate policy based on an assessment of all the competing costs and benefits.

To date, the political process has determined that the potential risks of carbon dioxide regulation outweigh the benefits. That’s why despite more than twenty years of global warming advocacy, Congress has never passed a cap-and-trade bill. Even when Democrats held the White House and majorities in both houses of Congress, any bill authorizing the Environmental Protection Agency to develop and adopt a regulation like the Clean Power Plan would have been dead on arrival.

Earlier this week, I submitted comments to EPA arguing that the agency should not replace the Clean Power Plan with any new regulation, because the agency has no authority under the Clean Air Act to regulate carbon dioxide emissions from existing power plants. Today’s post attempts to show that “just repeal, don’t replace” is not only the lawful policy, but also the best policy.  

>> Read the summary of the regulatory comments on CEI’s OpenMarket blog here.

>> Read the full comments here.