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US Leads EU in CO2 Reductions

Is cap and trade a crock?

Maverick environmentalists Michael Shellenberger and Ted Nordhaus make that claim in a piece that appears at the invaluable NewGeography.com. They point out that CO2 emissions in the US have been in decline since 2005, and that while the recession has ‘helped’, emissions are now projected to decline through the rest of the decade.

That is without a carbon tax, without a cap and trade system, and without mandatory, Kyoto style limits and a global carbon treaty. In Europe, they note, emissions are not falling — and Germany is even moving back to coal.

What made the difference?

The revolution in natural gas. Natural gas is a cleaner burning fuel than, for example, coal and the natural gas bonanza in the US is making cleaner energy sources cheaper than their rivals.

That progress, the environmentalists remind us, came in part as the payoff for years of government supported research in oil and gas technology. They argue that the best way to move to cleaner energy is to support scientific research in promising fields. That works much better than artificially raising carbon prices or subsidizing inefficient green energy production.

They conclude with an observation that I wish more greens understood:

For one thing should now be clear: The key to decarbonizing our economy will be developing cheap alternatives that can cost-effectively replace fossil fuels. There simply is no substitute for making clean energy cheap.

While the purest of libertarians disagree, it seems to me that government support for basic research is a legitimate use of public funds. True, there will be a certain amount of inefficiency and friction that flow from the nature of the political process. But it is also true that governments, with a different time horizon and a different cost-benefit calculation, can usefully supplement the research that the private sector undertakes on its own.

Government funded research aiming to make energy cheap, clean and abundant is surely a better approach to our energy issues than government regulation aimed at making energy more expensive.

 

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  • Kenny

    It is even better than that, Mr. Mead.

    Although I have not seen the data from the past five years, up to then, the U.S. absorbed more CO2 than it produced. That’s right, and our forests and re-forestation are the reason why.

    Now, Europe can’t claim that distinction and certainly not China.

    But it’s funny, the Greenies never talked about our carbon capture — I guess it did not fit their left wing narrative & agenda.

  • thepi

    I used to think that basic research was an area where government could do some good. Unfortunately, I do not think government spending in this area helps anymore. What changed my mind was the recent articles showing just how much research/”science” is non-repeatable and thus not really science. The poorly discriminated funding of “science” by the government, and the resulting structure of scientific research, has resulted in vast amounts of “discoveries” that just aren’t true.
    Theoretically, this problem could be solved by improving the grant process, however I have no faith that the government is capable of aligning the incentives to fix the problems. The incentives of politicians push them to leave things be, or simply increase funding, and inertia is a mighty force in politics. This was one area I ignored my mantra that “If you want something done poorly and expensively, leave it to the government.” But reality has pushed me into acknowledging it’s validity once again.

  • Mrs. Davis

    The romance of Blue myths can be irresistible. Best would be if the government stayed out of research and regulation.

  • Jim.

    Solyndra made solar panels cheap… by flooding the market. Some business models can survive that way– the Model-T comes to mind — but beware people who insist throwing money at the problem will help. Subsidies more often than not disincentivize cost-cutting.

    The key questions to as libertarians about government funded research… while it’s in a company’s best interests to do research that will keep its products competitive in the long term, are companies, in the current corporate climate, actually doing so? If not, shouldn’t government take up the slack?

    Although the response could be, current law favoring stockholders and small corporations makes it more efficent for small, independent companies to do govenment-supported research, which large companies will buy and bring to scale if it’s successful. Allowing small independent companies to fail if their research doesn’t pan out also insulates large tech-buyers from those sorts of risks. As a bonus, researchers with stock options might actually see something like just compensation for their contributions, instead of just a steady paycheck.

    Hm. America seems to be pretty well structured to make the best of things.

  • Mark Michael

    Re: Government-funded research

    I agree with Comments 2 (thepi) and 3(Mrs. Davis) that government-funded research, including basic research, is highly inefficient and very little should be done (where government has a direct interest: military, homeland security!). I realize that even many conservatives take it as self-evident truth that basic research needs to be funded by government.

    I’d claim that an in-depth look at the results of that kind of research since it got rolling in a big way after Sputnik in 1958 would disabuse you of that notion! Today, if you were to hire a panel of experts to truly evaluate the output of all of our government R&D labs and compare them with private research labs, they’d be appalled at the lack of really good, productive research. Lots of mediocre papers written that few fellow researchers bother to read, but not much in the way of blockbuster results, or even pedestrian results. (They can do statistical analyses, evaluation of other researchers’ output in a professional way, but discovering new theories, technologies, great scientific breakthroughs etc. forget about it!)

    Even university R&D is often poor-quality stuff. Universities really are best at educating students, not doing state-of-the-art research. Yes, professors need to do research – keep their minds sharp & stay up on their fields – but don’t make it super high priority – so that teaching gets the short end of the stick! Teaching students is priority one, two, and then maybe research is priority three! (The practical problem is that grad students finish their degrees and leave! You have to keep training new students to carry on the research. Well, you can have separate organizations with permanent, full-time researchers, and some of that makes sense, but lots of professors simply can’t handle doing both teaching well and doing R&D well IMO.)

    Profit-making industry is really the best focus for doing research, including basic research IMO. That may seem counterintuitive, but in practice it’s not really. Our most productive areas today are driven by private-industry dominated research: solid-state technology, computer technology, telecommunications, optics, health-care-related: biotech (DNA research, etc.), new drugs, etc.

    That provides a general focus that the basic researcher can keep in the back of his mind: “If I make a breakthrough, some company may find it useful – and I’ll help mankind in some small way!” A general “search for knowledge, uncover insights in science” does motivate a handful of people, but tie in a little monetary rewards & lots more get interested!

  • Jacksonian Libertarian

    Everything the Government touches turns to crap (technical term). This is why the Government should be limited to only those things that only the Government can do, such as Defense, Foreign relations, and Treasury. It will still be crappy but without the feedback of competition that drives continuous improvements in Quality, Service, and Price in the private sector, it’s the best we can do. The Government is a monopoly after all, and we can’t expect it to perform any better than crappy.

  • SC Mike

    Was the government’s “investment” in Solyndra and some of the other failed clean energy companies really intended to foster basic research as you imply? On the contrary, all had potential products that apparently needed just a “little” boost to get them to market, primarily capital to build a production facility. It was a VC play in which a VC or two had put some money in, but a US government loan, loan guarantee, or grant was needed to get the products to an infant — now proved expensive — alternative energy market. That’s why the political connections were critical to getting the financing that the VCs would not provide: the government had to play the key role of mandating the products’ use. No wonder libertarians and some conservatives are angry at such blatant crony capitalism.

    Apart from the politics, cronyism, and general waste of taxpayer funds, there’s another, perhaps more important, reason to end these expenditures: they not only do no good, they now sometimes do evil.

    I call your attention to today’s opinion piecein the UK’s Telegraph about the richest of the NGOs, the World Wildlife Foundation (WWF), and its role in the forced relocation of thousands of villagers in Tanzania. Note that the WWF derives much of its income from governments and multinational corporations.

    If that’s not bad enough, a recent report from The Guardian, of all sources, that UK taxpayers funded forced sterilization in India, and a poorly run program it was:

    Court documents filed in India earlier this month claim that many victims have been left in pain, with little or no aftercare. Across the country, there have been numerous reports of deaths and of pregnant women suffering miscarriages after being selected for sterilisation without being warned that they would lose their unborn babies.

    Yet a working paper published by the UK’s Department for International Development in 2010 cited the need to fight climate change as one of the key reasons for pressing ahead with such programmes. The document argued that reducing population numbers would cut greenhouse gases, although it warned that there were “complex human rights and ethical issues” involved in forced population control.

    So there’s more to be concerned about, especially in the motivation of those who push these programs. Given the current budgetary situation, let’s just stop all this for now and see what happens.

  • SC Mike

    The NewGeography.com article may overlook two points:

    1. The EU CO2 emissions scheme allows the emitters to purchase credits worldwide. That the EU itself has not reduced emissions as much as the US has is immaterial because they have purchased offsets that should be credited to their accounts. Hey, I did not make the rules, I’m just reporting reality.

    2. Natural gas is winning over coal not because it’s cleaner in the CO2 sense, but because it’s cheaper. It’s so cheap, in fact, that exploration and extraction are slowing down to the extent that prices should rise a bit real soon.

    Let us all get real. With Germany turning to coal and Japan switching off its last nuclear plant (meaning that they will turn to coal), does it make any sense for any country to impose massive costs to reduce CO2 emissions? Any coal-rich country that might ban the consumption of coal would have to ban its mining and export, foregoing significant potential foreign trade gains given the world price of coal of $100 per ton and domestic mining costs of $5 to $35 per ton. Given the budget situation of many coal-rich countries, how likely is that?

  • http://westernenergyalliance.org Kathleen Sgamma

    Mr. Schellenberger and Mr. Nordhaus are incorrect – the American revolution in natural gas is not the result of thirty years of government-funded research. The revolution is the result of private-sector research and development in horizontal drilling and improvements to hydraulic fracturing. There has been some government-funded research, particularly during the 1990s mainly centered on methane hydrates and coalbed methane, but that has not been fundamental to the real revolution in shale and tight sand which has been driven by private sector R&D and innovation. Any government R&D in natural gas has been inconsequential for the last decade or so, and completely dwarfed by the private sector.

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