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Joseph Romm

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NASA's James Hansen Recycles Myths in His Pointless Attack on U.S. Climate Action

Posted: 07/10/09 12:31 PM ET

Much as I am happy to publicize Hansen's leading edge climate science (see links below), I am unhappy to have to waste any time debunking his bleeding edge climate policy analysis (see "Memo to Hansen: Your opposition to Waxman-Markey is ill-conceived and unhelpful. There isn't going to be a carbon tax nor should there be." and "Memo to Hansen 2: Why is the country's top anti-science blog reprinting your stuff?").

Still, his arguments need debunking because he is mostly recycling myths that others are pushing -- and with the country's top climate scientist putting his name on this collection of false and misleading statements, they will no doubt be parroted by yet more people. Hansen has just written, "G-8 Failure Reflects U.S. Failure on Climate Change" for The Huffington Post.

UPDATE: Predictably, Swift Boat smearer Marc Morano has made Hansen's post his top story at ClimateDepotted, again revealing that Hansen is mostly providing aid-and-comfort to the deniers and delayers.

Let me go straight to his needlessly (and pointlessly) provocative attacks on the "counterfeit climate bill known as Waxman-Markey," which is filled with right-wing and left-wing myths -- and very little understanding of the basics of either this bill or cap-and-trade systems.

Hansen claims "For all its 'green' aura, Waxman-Markey locks in fossil fuel business-as-usual and garlands it with a Ponzi-like 'cap-and-trade' scheme." Not so. I have previously explained why W-M takes us sharply off of the BAU emissions path over the next decade, probably reducing coal use more than 25% by 2020 (see "Game changer, Part 2: Why unconventional natural gas makes the 2020 Waxman-Markey target so damn easy and cheap to meet"). And then it requires a 42% emissions reduction by 2030 and an 83% reduction by 2050, which will drive a massive energy transition over the next few decades.

The global economy is indeed a Ponzi scheme, but this is the first piece of legislation by any major country that makes a serious effort to end that Ponzi scheme.

Hansen then lists "a few of the bill's egregious flaws":


  • It guts the Clean Air Act, removing EPA's ability to regulate CO2 emissions from power plants.


No. The EPA doesn't have the "ability to regulate CO2 emissions from power plants." EPA might well use its recent endangerment finding to get that ability (partially and eventually), but it hasn't asserted that regulatory capability yet.


More importantly, the CAA authority is most readily translated into regulating emissions from new power plants. Regulating CO2 emissions from existing power plants would take a long time, engendering a great deal of litigation. As John Podesta, former Clinton Administration Chief of Staff and now CEO of CAP, recently said, "it would be difficult for the EPA to enact a CO2 cap and trade without congressional cooperation."

Moreover, for a man who wants to "phase out coal emissions over the next two decades," as Hansen does, this is a pretty pointless complaint. The Obama EPA was certainly never going to use the endangerment finding to do anything like that.

This "EPA can solve the problem on its own" myth is so commonplace that I will do separate post next week addressing it. I certainly agree with NRDC that the bill should be changed to allow EPA to retain its CAA authority, but I wouldn't list this among the bill's top 4 flaws, let alone put it first.

Hansen's next "egregious" flaw in W-M:



  • It sets meager targets -- 2020 emissions are to be a paltry 13% less than this year's level -- and sabotages even these by permitting fictitious "offsets," by which other nations are paid to preserve forests -- while logging and food production will simply move elsewhere to meet market demand.


Not quite -- though the first part of this statement is the bill's biggest flaw (and the only truly serious objection Hansen raises here). The 2020 target is inarguably too weak from a scientific perspective (although using this deep-recession/near-depression year as the baseline and not the bill's 2005 base year is a critique that should be beneath Hansen). That unfortunate outcome came about principally because the Bush administration did nothing for eight years, which meant that any U.S. climate bill passed now that starts in 2012 was never going to have a 2020 target like Hansen (and developing countries) wanted, which would have required the equivalent of a 40% cut in 8 years. I guess Hansen and others can trash the Obama administration and leading environmental legislators like Waxman and Markey for that, but I see that as worse than pointless.


[Note to Hansen: Congress was never going to pass a carbon tax that would "phase out coal emissions over the next two decades." You can pretend it was -- and vent your misplaced wrath at cap-and-trade proponents -- but even if a carbon tax could pass Congress, it would ultimately be little different from W-M in its outcomes, and would lack the targets needed to move the international negotiations process forward.]

And it is really quite out of character for Hansen to make such a factually untrue assertion as

...sabotages even these by permitting fictitious "offsets," by which other nations are paid to preserve forests -- while logging and food production will simply move elsewhere to meet market demand.

Of the more than 1000 Clean Development Mechanism projects funded and sold to date as international offsets (CERs) under the Kyoto process, 3 have been forestry. Hansen has repeated an absurd and rather destructive myth, which will no doubt resonate around the blogosphere.

Why destructive? Because one of the single best things in the entire W-M bill is that utterly separate from the offset provisions, it sets aside allowances to create a huge pool of money for the United States to contribute to a new international effort to stop deforestation using national-accounting based methods -- a strategy explicitly designed to stop the very problem Hansen (falsely) claims the bill will accelerate. Indeed, the funding in W-M is so great that the United States contribution alone is aimed at stopping deforestation equal to some 720 million metric tons of carbon dioxide -- equal to 10% of U.S. emissions in 2005 -- which is on top of the emissions reductions mandated by the bill.

Finally, the offsets complaint is a bit odd in a piece whose basic thesis is that the first-ever attempt by the United States to take climate action -- which includes a requirement that this country cut greenhouse gas emissions 42% in two decades and 83% in four decades -- is the entire reason for the failure of rich and poor countries to agree on an emissions pathway this week. Hansen writes:

With a workable climate bill in his pocket, President Obama might have been able to begin building that global consensus in Italy. Instead, it looks as if the delegates from other nations may have done what 219 U.S. House members who voted up Waxman-Markey last month did not: critically read the 1,400-page American Clean Energy and Security Act of 2009 and deduce that it's no more fit to rescue our climate than a V-2 rocket was to land a man on the moon.

That, of course, is poppycock. The delegates haven't read the bill, and they certainly only care about the targets. They could care less about the other 1300 pages of the bill that so bother Hansen (which he hasn't bothered to read, or even read a summary of, as we'll see). Yes, the 2020 target is too weak, but that is true of Japan's new 2020 target -- and frankly even Europe's proposed target wouldn't satisfy what many developing countries have asked for.

More to the point here, the Kyoto process created international offsets, and the Europeans are committed to keeping them (and improving quality and oversight). Whatever complaints the developing countries have about Waxman-Markey, the fact that it makes use of international offsets is not high on their list. In fact, they want a mechanism by which rich polluters help them develop with clean energy.

I am not a big fan of offsets, but after much research and discussion with leading experts, I've come to the conclusion that they do not vitiate the targets (see "Do the 2 billion offsets allowed in Waxman-Markey gut the emissions targets?"). The bill is written in a manner that should allow the United States to strengthen oversight of international offsets, but in any case, it is difficult to blame the United States for the current state of the CDM. And again, what the bill does on global forest preservation is not an "egregious flaw" but a central contribution to stopping global warming.

Hansen's third "egregious" flaw:

Its cap-and-trade system, reports former U.S. Undersecretary of Commerce for Economic Affairs Robert Shapiro, "has no provisions to prevent insider trading by utilities and energy companies or a financial meltdown from speculators trading frantically in the permits and their derivatives."

This is an utter falsehood. Indeed, it is a repackaged version of a falsehood that anti-scientific anti-clean-energy Mississippi Gov. Haley Barbour put forward (see "Barbour utterly tries to scare public with wildly implausible Chinese scheme to manipulate the emissions market"). So let me repeat for the record:

There are many provisions (and realities) that would stop "insider trading" (whatever the heck that is in this case) and "a financial meltdown from speculators trading frantically in the permits and their derivatives."

First off, the permit market is huge. Even purchasing 2% of the permits in, say, 2015, would probably cost $1 billion. And speculators would have to purchase several times that to significantly run up the price.

(As an aside, Hansen should really like speculators because they increase the price of the permit.)

Second, it will be so easy to meet the targets for at least the first decade (see here) that the "real" price of a permit will probably be slightly below the auction price (which has a floor). So it will be highly unprofitable to buy lots of permits, which would run up the price, in an effort to make money selling those permits sometime in the future. I can't imagine a plausible scenario in which this would make economic sense for any entity even if they could get away with it, which they cannot.

Third, the bill requires EPA to promulgate regulations to cover the auction. As CQ's summary of the bill explains:


  • Bidders must disclose all parties sponsoring their bids;

  • Individual bidders would be limited to purchasing up to 5% of allowances sold at any quarterly auction;

  • EPA would have to publish information about winning bidders


So it would be very difficult to do any major purchasing in secret, any major "insider trading," and virtually impossible to acquire a large fraction of the permits. Indeed, in this context, "insider trading" looks to be just a collection of meaningless scare-words. Hansen can do better.


Fourth, the bill has a whole section devoted to "Carbon Market Assurance." As the WRI summary describes it:

The Federal Energy Regulatory Commission is given regulatory authority over allowance and offset markets and allowance derivative markets (Sec. 761, pg. 449). The president is also delegated authority to instruct agencies to take on pieces of market regulation based on existing authority as long as regulations are consistent with this section. The draft makes it a federal crime to commit fraud or manipulate any carbon market. In addition, the regulations facilitate and maintain market oversight and transparency and require market monitoring to prevent fraud, manipulation and excessive speculation.

That section explicitly includes derivatives, with further oversight by the Commodity Futures Trading Commission.

Fifth, the bill has a Strategic Reserve (with tons originally skimmed off from each year's total target) that an entity can purchase permits from if the price sees a short-term run up of about 60%. So again the bill will is designed to prevent someone from cornering the market.

So this charge by Shapiro and Hansen is utterly false. Now Hansen apparently hasn't bothered to look at the bill or any of the many summaries. I would note that essentially all of these oversight provisions were in the original March draft -- so they should not be a surprise to anybody.

Since Hansen really doesn't follow this sort of policy issue closely -- even though he opines on it -- I can understand why he might just parrot Shapiro. But Shapiro is, as Hansen notes, former U.S. Undersecretary of Commerce for Economic Affairs and co-chair of the U.S. Climate Task Force. So he should know better. Then again, one of the two (!) advisors listed for the U.S. Climate Task Force is "Kevin Hassett, Director of Economic Studies for the American Enterprise Institute."

Now AEI remains a leading anti-climate-action, anti-clean energy right wing think tank. For instance, AEI continues to assert (without any supporting evidence), "No matter what you've been told, the technology to significantly reduce emissions is decades away and extremely costly," and it continues to parrot utterly false denier talking points like "For the last decade, warming peaked, and has recently declined: we're back to the average temperatures that prevailed in 1978" (see "AEI: Still crazy with denial and delay after all these years"). I simply can't imagine any group that wants to be taken seriously on climate policy having a senior AEI staffer as an advisor. So for now, the analysis of "The U.S. Climate Task Force" and its leadership should be ignored by anyone who wants to be taken seriously on climate policy.

But Hansen isn't content to quote Shapiro's falsehoods once. No, his fourth and last egregious flaw is:

It fails to set predictable prices for carbon, without which, Shapiro notes, "businesses and households won't be able to calculate whether developing and using less carbon-intensive energy and technologies makes economic sense," thus ensuring that millions of carbon-critical decisions fall short.

Uhh, no. In fact, the bill does set a very predictable (and rising) floor on the auction price. And again, since the 2020 target is so easy to meet with abundant, low-cost domestic clean energy -- like efficiency, conservation, renewables, and fuel switching from coal to gas -- I think the carbon price is likely to hug the floor price through 2020. But that's what I think -- not what the industry believes.

Hansen has this argument exactly backwards. One of the biggest pluses of a cap-and-trade over a tax is that participants tend to think that the cost of meeting the targets -- and hence the cost of the permits -- will be much higher than they actually turn out to be. So they do more than is necessary, especially once they find out how easy it is to cut emissions. That is why in previous cap-and-trade programs, like sulfur dioxide, the targets were achieve faster and cheaper than anybody expected.

Remember the industry-funded economic models show very high permit prices. That's why the industry ends up acting as if the permit price is going to be high. I already know medium-sized energy-intensive companies that have done bupkes on energy for decades who are now scrambling to figure out what this bill means for them. They will inevitably put in place basic energy efficiency and carbon mitigation strategies of the kind that I detail in my book Cool Companies (see "Cool Companies, Part 1: How the best businesses boost profits and productivity by reducing greenhouse gas emissions" and "The United States of Waste"). That will be repeated by hundreds of different companies, ultimately leading to far more emissions reductions at a far lower cost than all the economic models project.

So it is sheer nonsense -- and the exact opposite of the truth -- for Hansen and Shapiro to claim this bill will ensure "that millions of carbon-critical decisions fall short."

Yes, those who like carbon taxes think that predictable prices are preferable. But I'm with Nobelist Krugman, who writes, "The claim that carbon taxes are better than cap and trade is, in my view, just wrong." In particular:

One objection -- the claim that carbon taxes are better than cap and trade -- is, in my view, just wrong. In principle, emission taxes and tradable emission permits are equally effective at limiting pollution. In practice, cap and trade has some major advantages, especially for achieving effective international cooperation.


Not to put too fine a point on it, think about how hard it would be to verify whether China was really implementing a promise to tax carbon emissions, as opposed to letting factory owners with the right connections off the hook. By contrast, it would be fairly easy to determine whether China was holding its total emissions below agreed-upon levels.

Now Hansen can keep pointlessly pushing his carbon tax if he wants to. Heck, he can argue the merits of Betamax and John McCain and Adam Lambert, if he wants. But trashing Waxman-Markey and its supporters based on recycled myths touted by others remains ill-conceived and unhelpful.

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Memo to Hansen 2: Why is the country's top anti-science blog reprinting your stuff?