The coming Carbon wars

This week President Obama announced his plans for outflanking Congress with regard to global warming by implementing a series of executive orders that don’t need congressional approval. Foremost among these orders is one that would require the Environmental Protection Agency to require caps on the carbon emissions of power plants. Coal burning power plants produce roughly 40% of the global-warming CO2 produced by the United States (and possibly a larger proportion of the CO2 produced by China, a country outside the jurisdiction of the EPA).

The reaction by the coal industry? Shock if not awe. The immediate responses of that industry tended to be focused on the jillions of jobs that would be lost by coal miners, operators of the forecast-to-be-shut-down coal-fired power plants, small businesses that would be adversely affected by the higher costs of plants using alternative energy sources and so on down the impact-chain of dominoes. Free-market war is about to be declared: the carbon requirers versus the carbon eschewers.

First, let’s try to separate the hand waving from the facts—or at least the evidence to date. The evidence that global warming is due primarily to human activities is now only disputed by a small proportion of scientists and a large number of ill-informed people or those with economic interests in the status quo, particularly the coal and coal-fired power industries. Paul Krugman, in an oped piece in the New York Times on June 27th, claimed that Obama’s plan to regulate carbon emissions won’t negatively affect jobs and is more likely to increase job opportunities. Of course, the problem is that some jobs will go away, such as those of coal miners and some operators of coal-fired power plants. The new jobs created by the developing low-impact energy industry won’t necessarily be held by those who were laid off earlier. The economy as a whole may prove to be better off but some local economies, such as in West Virginia, will suffer in the early stages of the change.

Resistance to this potential economic impact began well before Obama’s statements, as evidenced in a new report on Koch Industries activities from the Investigative Reporting Workshop of the American University’s School of Communication:

For example, in 2011 and 2012, Koch Industries Public Sector LLC, the lobbying arm of Koch Industries, advocated for the Energy Tax Prevention Act, which would have rolled back the Supreme Court’s ruling that the Environmental Protection Agency (EPA) could regulate greenhouse gases. The bill was sponsored by Rep. Fred Upton, R-Mich., and co-signed by 92 Republicans (and three Democrats), 61 of whom signed an [Koch formulated] anti-climate tax “pledge.”

Certainly in the long run the whole world will be better to the extent that global warming is slowed or, better, halted.

So how will these improvements actually come about? Obama’s regulatory ploy may be a key move but design and implementation of the necessary regulations will take time—maybe years—and will certainly face court battles from the affected industries even without hindrance from Congress. Is there a faster way? After all, global warming doesn’t take long to grow but can take centuries to dissipate.

On June 28th National Public Radio had a story about the one-page solution to climate change. As follows:

Climate change seems like this complicated problem with a million pieces. But Henry Jacoby, an economist at MIT’s business school, says there’s really just one thing you need to do to solve the problem: Tax carbon emissions.

Jacoby claims that market forces will work much more effectively than rafts of regulation if a simple law is passed taxing every bit of carbon emitted by cars, trucks, aircraft, power plants and all other human artifacts. “If you do it right, he says, carbon tax can be nearly painless for the economy as a whole.” Note the “as a whole” part; here, too, while there will be many winners, the losers may well be the ones mentioned above. Then there is the problem that, in order to tax carbon as described by Jacoby and other economists, the law will have to be passed by Congress.

Oh my.

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