From Michael Cembalest at JP Morgan
I'm not a denier. Yes, carbon is a problem, warming is a problem, and a uniform carbon tax, vast expansion of nuclear energy, more renewables, lots of R&D on them, GMO foods, and geoenginnering are solutions. (If indeed warmer weather is an existential crisis, and if indeed $2 billion of soot in the upper atmosphere solves it, that should at least be on the table.) Actual, quantitative, scientific solutions. They don't atone for our carbon sins.
A ban on fracking and nuclear are not solutions, and will raise carbon emissions. The US is doing better on carbon reduction than other countries, because of fracking and natural gas. Unlike Germany, who has followed these policies, we cannot rely on Eastern European coal and Russian gas.
I am delighted to see that despite my fears of how extensive discretionary regulation will silence dissent, Mr Cembalest can still write such a note, with the JP Morgan imprimatur. We'll see how long such heresy survives more intense financial regulation and "stakeholder" control of corporate boards. "Eco-authoriarianism" and a "coercive green new deal" are already openly advocated, here for example.
Your very last link to The Nation, says in the byline:
ReplyDelete"Only a massive, democratically elected administrative apparatus can stop climate change."
How do they know?
How do they know that massive amounts of bureaucrats will not pursue their own goals, like power, control, despotism, and perhaps, corruption?
Economics has a whole subfield about this, Public Choice.
I just read the article in The Nation - breathtaking. The author advocates dispensing with elections and imposing Stalinist totalitarianism (only way to implement the Green New Deal) while calling the (actually elected) "populists" neo-fascists! If this is the choice, I for one will take my chances with the neo-fascists, not least because nobody in the GND camp seems to have any scientific credentials.
DeleteI am not sure what article you have read in the Nation (John's link), but is says no such thing! So catch your breath. Just to quote, all I see is activism to put pressure on legislators coupled with a democratic process (where did Stalin come in here?). If you are from France, then I am sure you are used to state coercion (built out a whole nuclear energy industry despite heavy resistance), and so it can be done, more easily if activism SUPPORTS the plan:
Delete"Something as transformative as the Green New Deal—a democratically achieved Climate Leviathan—will not come about because the Democratic Party or Xi Jinping or the UN secretary general suddenly realizes that radical change is necessary, nor simply through ordinary parliamentary and congressional procedure. Major change of this sort could only come from a far more basic form of democracy: people in the streets engaged in actions like school strikes and coal mine blockades. This is the kind of pressure that progressive legislators could then use to push through a mutually agreed-upon Green New Deal capable of building a powerful administrative force that might convince or coerce everyone into preserving the global commons."
Your science is false and manipulated. The New Green Deal is precisely that: a deal, politically born and driven, with no proof.
DeleteThe lovely thing about a carbon tax is that it has some good consequences even if there is no global warming. It would substitute for some emission controls, and it would make parking easier. :-)
ReplyDelete[But we don't have such a relatively efficient instrument precisely because the environmental movement is no longer about the environment -- it's just another anti-capitalist religion.]
I agree with your first paragraph - even if one does not believe that climate change is sufficiently harmful to justify a carbon tax, there are other environmental benefits (erosion of the ozone layer). - In fact, most of us purchase insurance against floods and fire not because we are sure our houses will flood or catch fire, but because there is a sufficient probability that such a bad outcome happens. Is that in itself not enough of an argument (together with enough evidence that the probability of serious negative outcomes for humanity are high enough) to justify buying insurance. Having studied insurance, most insurance providers only insure, if the insured (the client) takes certain precautions such as installing a lightning rod, and building houses away from notorious flood zones. The carbon tax can be viewed as such a precaution, and would be most effective if imposed globally (tough w/o a global government). The Nation article is advocating how such an agreement can come about - to avoid the tragedy of the commons (i.e. free riding). -- To my knowledge most climate activists are embracing the carbon tax (as does Douglas North, our Nobel economist).I do not understand, when and where John and most commenters here have discovered the paper tiger of the an environmental movement which supposedly opposes a carbon tax ? The German Greens have always advocated for a carbon tax, and in fact passed one, when they were in the government with the Social Democrats. Thanks nonetheless for your contribution - pointing to additional benefits from introducing a carbon tax (rather than the heavy govt. subsidy the carbon industry still is enjoying in the US to this day).
DeleteSure, Mr. Schadt: Let them advocate a carbon tax and stop demonization and prohibition of nuclear; stop subsidizing and propagating wind; stop propagating and subsiding coal fueled so-called electrical vehicles.
DeleteLet them not send a Swedish child abroad on a veritable children's crusade. And, as we now know, we have 12 years to live!
I am very sorry about all this, for I once believed it was about externalities and their environmental impact, but its propaganda and it's bullshit.
What is not being discussed about the carbon tax. If you were to not partake in any goods or services that are manufactured, processed or, delivered by means of hydrocarbons. You will still be taxed, fined, or tried as a criminal because of the air you breathe. Whenever you exhale your body releases carbon dioxide. The carbon tax main objective is to turn all citizens into slaves of thier respective countries.
DeleteMost of us do not buy flood insurance. And in the places where floods occur in sufficient probability most people can't afford the rates charged for flood insurance.
DeleteMr. Unknown got it right.
DeleteA carbon tax is consumption of co2 resources by government. Anybody remember government? The job of government is to tax carbon from the private sector and subsidize carbon in the government sector. How do so many economists forget this basic fact?
I agree with your first paragraph - even if one does not believe that climate change is sufficiently harmful to justify a carbon tax, there are other environmental benefits (erosion of the ozone layer). - In fact, most of us purchase insurance against floods and fire not because we are sure our houses will flood or catch fire, but because there is a sufficient probability that such a bad outcome happens. Is that in itself not enough of an argument (together with enough evidence that the probability of serious negative outcomes for humanity are high enough) to justify buying insurance. Having studied insurance, most insurance providers only insure, if the insured (the client) takes certain precautions such as installing a lightning rod, and building houses away from notorious flood zones. The carbon tax can be viewed as such a precaution, and would be most effective if imposed globally (tough w/o a global government). The Nation article is advocating how such an agreement can come about - to avoid the tragedy of the commons (i.e. free riding). -- To my knowledge most climate activists are embracing the carbon tax (as does Douglas North, our Nobel economist).I do not understand, when and where John and most commenters here have discovered the paper tiger of the an environmental movement which supposedly opposes a carbon tax ? The German Greens have always advocated for a carbon tax, and in fact passed a first Eco-Tax (1998/99), when they were in the government with the Social Democrats (unfortunately the coalition government were not able to include coal due to heavy lobbying by the industry & unions, the worst polluter of the taxed oil & natural gas end-products). Thanks nonetheless for your contribution - pointing to additional benefits from introducing a carbon tax (rather than the heavy govt. subsidy the carbon industry still is enjoying in the US to this day).
DeleteAll good with the carbon tax. The only problem: most people don´t want it (and "most people" is a quite relevant constituency in a democracy). It has been voted down twice in Washington and people almost burn down Paris when the french government tried to introduce one.
DeleteAnd in most european countries a huge carbon tax (around $500 per ton) is already in place: more than half the price of gas in Spain are taxes. It is difficutl to understand why a $40 per ton is going to get what $500 per ton has not.
It is clear to anyone with open eyes that the noisiest part of the "enviromental movement" is not about the individual sacrifices required to curve CO2 emissions. It is, above all, about fighting capitalism. Paraphrasing Bastiat: "present days climate activism is that fiction whereby everybody believes that he can keep their leaving standars at the expense of everybody else's".
exactly, pro climate movement is a political business.
ReplyDeleteI agree with this post and also with that of the commenter who suggest the green business will become so politicized it will become permanent - - - much like the defense industry.
ReplyDeletewe are in the verge of a cataclysm of epic proportions, one that humanity has never seen before. There will be hundreds of millions of migrants pushing at the doors of "safe countries ". I think extreme times justifie extreme measures.
ReplyDeletecan you explain why rich profits are given to the very richest for each renewable project that is supposedly saving the world? Warren Buffet ""For example, on wind energy, we get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit."
DeleteSo you suggest that renewable projects are a scheme to make the rich richer.
DeleteI think the situation is different, the rich have the means to lobby law makers to bend rules in their favour. So once again the rich are taking advantage. But the first mover for renewables it that we need to move away from a linear economy and enter a circular economy. Every year we are using up one and half year worth of resources. If i was spending one and half time my yearly wage every year what happens in a few years...?
Fabio B.... in the case of hyrocarbon fossil fuels your ratio of 1.5 years supply used up every year is wrong. In actuality we are consuming, each year, the quantity that was laid down in about a million years.
DeleteNuclear fuels were created over a much longer time span by exploding stars so the ratio is worse.
Hopefully we will transition fast enough for civilisation to continue. I believe it is possible. Photovoltaic power source can be built out faster than nuclear which is excessively complex. Most of our uses of plastics can already be replaced by compostable substitutes. Recycling will be via the compost heap more than by industry. New materials coming from plants. But there are still many challenges to getting there.
Have faith. God willing we will succeed.
--E5
we are in the verge of a cataclysm of epic proportions, one that humanity has never seen before. There will be hundreds of millions of migrants pushing at the doors of "safe countries ". I think extreme times justifie extreme measures.
ReplyDeleteFabio - would you please complete your scenario? Hundreds of millions of migrants on their way to invade Western nations, then what do you think will happen?
DeleteSurely once was enough...
DeleteAnyway, we've heard this "the ends justify the means" bollocks many times before and it's always ended in disaster. There's no reason to believe it would be any different this time, even if there were more than an epsilon chance of your armageddon scenario coming true. One might as well say the tide might stop coming in twice a day.
Coker and John's introduction both show what is happening with this "issue." It is ceasing to be a normal political issue and is becoming a temperance crusade. The temperance here is to discourage coal, oil, nuclear, and anything "natural" except the sun and its wind effects. Make a proper noun out of "Climate Change" and you have the new name of God.
DeleteListen to PBS news and talk programs, and you will hear this appeal to faith loud and clear. They call the first Angel "Science" but without reference to anything about hypotheses being tested.
Yes it is ceasing to be a normal political issue. Because the situation has been grave for a while and we as a whole have not taken action when we were in good time.
DeleteRegarding my catastrophic forecast, look at the immigration situation, US is building a wall to prevent the people pressing at his border from entering. they come from Honduras, Nicaragua, Guatemala. is it normal that this people are fleeing ?
Europe has the whole of Sub Saharian Africa pressing at its borders. Plus middle east and some Asian countries.
Just open the TV and see the droughts or floods affecting those countries, they are happening more often and stronger every year. Droughts and floods are playing a part in those people leaving their fields.
Here in Italy we have had crazy cold winters and super drought summers, we are harvesting olives and grapes 40 days ahead of normal times.
I mean just look at the weather where you live, nothing changed...??
On the other side, I think we are each one looking at what we want to see.
I accept that you look at me as a religious extremist of climate change and I am sad you do so.
Then I think the only reasonable thing to say is time will tell.
Fabio - Europe has 3 millennia of written history. African and Asian invasions are nothing new. North Africans clung to southern Iberia for 4 centuries until Isabella of Spain finally threw them out. Ottomans occupied the Balkans for 4 centuries also until they were pushed back into Asia. At the eastern borders, Hungarians had to repeatedly fight off Mongols and assorted other Asiatic hordes. The problem with the 3rd world is an excess of births over deaths in the range of 90 to 100 million annually and has nothing to do with the climate. Please, more history, less hysteria.
DeleteJohn...you want to know what renewables are mostly about...add up the erased profits enjoyed by Goldman Sach, Amazon, Google, FB, Buffet etc...Al Gore's pay offs. Read up on the tax scheme after tax scheme from PTC to tax flips to erase profits. How many Fortune 500 companies pay income taxes...after erasing profits??
ReplyDeleteWarren Buffet "For example, on wind energy, we get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit."
"
"Eco-authoriarianism" and a "coercive green new deal" are already openly advocated, here for example. Yeah BUT!!! Many of us will NOT be coerced or bend to autocratic despots. Yes folks. I said it with no reservation.
ReplyDeleteA decade or likely more ago, a couple of papers were published calling for a 'No Regret Climate Change Policy'. In other words, target carbon (and other) climate emissions, but if climate change outcomes were not as bad as guestimated, then the resulting in correlated small particulate matter and other toxic emissions would greatly benefit health. Poster Frank hinted at this.
ReplyDeleteIt may be good populist politics to embrace the notion that if Yah can't see it, it won't hurt ya. But we know that it is precisely what we do not see that hurts the most big swathes of our North American society with its high obesity rates and high COPD rates.
High excise taxes on polluting fuels might encourage less growth in low-density suburbs and persuade more Americans to self-propel.
The USA in particular is very vulnerable to regional nuclear war because the health out comes are so bad. The USA would have trouble conscripting an army to fight a conventional war because the health outcomes are so bad.
Mind you a solution of sorts might lie in nuclear weapons. The USA oversees nuclear weapons proliferation like 12 year old males in a playground might allocate resources. The 'good guys' get nukes and the 'bad guys' don't get the nukes. As Israel is an interesting show case of how to use nuclear weapons for offensive purposes, expect many others to continue to be interested.
A regional nuclear war would impact the USA like a 3rd world country because of those poor health outcomes (millions would die) but at same time, the 'nuclear autumn' would resolve the current climate crisis and in its place create a new, lower temperature crisis.
Reminder #1: The USA boasts the lowest excise taxes on gasoline and diesel fuels among the rich OECD countries.
ReplyDeleteThe lowest.
In fact, the real value of the federal excise tax has been steadily eroding over the past few decades.
Reminder #2: The vast majority of the US recessions in the post-war have coincided with spikes in oil prices.
Higher excise taxes on these deadly, polluting fuels would have reduced the severity of the recession, in some cases there may not have been a recession.
In effect, America's cheap energy entitlement/wisdom has contributed to enhanced macroeconomic fluctuations.
Reminder #3: Many Americans try to convince themselves during the initial invasion and occupation of Iraq that regime change would lead to lower prices and more secure oil prices. (This is not the reason the USA invaded Iraq but let's ignore that for now.)
Think about the political marketing for a second or two here. Americans are so firmly wed to cheap energy that they are willing to kill innocent civilians.
Would the resulting reputation be good for American security and economic outcomes or would there be costly blowback at some point?
Or does 'American Exceptionalism' always point to a free lunch or windfall gains and superior socio-economic outcomes than other rich western countries?
If Japan cannot vouch for nuclear power (they've sigma 5 ratings for factories) then should we? https://www.asiatimes.com/2019/09/article/japans-new-environment-chief-scrap-n-power/
ReplyDelete"If indeed warmer weather is an existential crisis..."
ReplyDeleteThis is an attempt to minimize the problem. It is not just "warmer weather", but more atmospheric energy which translates to less predictable and more extreme weather, in addition to being warmer on average.
"If indeed warmer weather is an existential crisis..."
ReplyDeleteThis is a minimization of the problem. What we face is higher average atmospheric energy, which even in the most abstract sense means less predictable, more extreme weather in addition to being warmer on average.
Dr. Ross McKittrick of the University of Guelph, Canada, is a professor of economics and has done some really good work applying econometrics and robust trend analysis to climate models. He says there is a 40% chance the social cost of carbon is negative. Drill baby, drill!
ReplyDeleteLink to the podcast: https://www.heartland.org/multimedia/podcasts/taking-on-the-hockey-stick-guest-dr-ross-mckittrick
Would you please move along with your family and live at least for a month near a fracking site? Then could you report how you liked the smell and how your breathing was like?
ReplyDelete@rafal: So you have visited a fracking site and noticed strong smells? Where? Which company?
DeleteAs opposed to living for a month near... a coal mine? No one thinks fracking is ideal, it's just that the CURRENT alternatives (coal, crude oil, nuclear, or just letting the lights go out) all seem worse to most people.
DeleteThe center-left believes that the best approach is to use fracking as our "off-ramp" in the transition from dirty energy to renewables. The concept is that gas seems to not only be much cleaner than both coal and crude oil but, critically, pairs MUCH better with renewables than the alternatives (because it is easier to vary output, which is critical as we move to renewables). To me this all sounds logical enough, so I'm curious what the "ban fracking" crowd are offering as an alternative plan. I'm sure there is one, I just haven't heard it.
"A ban on fracking and nuclear are not solutions, and will raise carbon emissions."
ReplyDeleteNuclear: I agree.
Fracking: the jury is still out. We may be widely underestimating how much methane it releases. It potentially releases just as much green house gases as coal, per kWh.
For example:
https://www.biogeosciences.net/16/3033/2019/
Natural gas is far from perfect but it is a terrific 'transition fuel'.
DeleteHealth outcomes are far better now thanks to natural gas. The reduction in small particulate matter and other toxic emissions has been rather spectacular.
Natural gas is also ideal for complimenting unreliable 'green' energy sources such as solar and wind.
Pontifications while in opposition can hardly be described as policy. Everybody knows that campaign statements don't turn into reality. Just look at the wall thingy.
ReplyDeleteBesides, in the context of politics, when faced with stubborn opposition it is normal to take extreme positions in order to try and move the middle position.
What's this about a "religious cult"? Haven't Republican politicians been kow-towing to a religious cult for decades? (Extreme Evangelical Protestantism)
Didn't Ronald Reagan proclaim that armageddon was coming and that any oil left in the ground would then have been wasted? There has been no lack of religiosity on the denial side.
Of course actions must be based on evidence and science. But the current administration is agressively acting to suppress evidence and deny science. Some of those who resist, hoping to make a change, may make doubly extreme statements of opposition in order to assert their point. But this does not invalidate their point.
Everybody knows that there will not be any realistic ban on fracing (there's not supposed to be a k in it any more than there is a k in "hydraulic fracturing"). With luck, though, operators will be obligated to minimise methane leaks (methane having 20 times the atmospheric effect of carbon dioxide).
Dramatic increase of nuclear power generation is unlikely if only because of the great amount of effort needed to build the equipment. Banning it is quite unnecessary although good stewardship of existing equipment, including prudent extension of useful service life, is crucial. Building photovoltaic and wind power equipment is substantially simpler, and more scalable, than nuclear. That's an easy business decision. Only if you are a building a multi gigadollar boat does nuclear power make sense.
--E5
I agree with your general point: in politics some degree of translation is required, because aggressive rhetoric is commonplace on both sides of the aisle. So most likely "I will ban all fracking immediately" actually means "I might impose additional regulations on fracking sometime during my 1st term."
DeleteBut the trouble is that context matters, and the context for the "ban all fracking" call was a Democratic Presidential Primary event. In this case 4 of the leading contenders for the nomination promised to immediately ban fracking if elected. The rest didn't. So how do we decide who to nominate if we just normalize all the rhetoric?
I think the right answer is, at least within the vacuum of a one-party primary, that we take the candidates at their word. If some want to pretend they are going to ban fracking, then we should assume they will, analyze the consequences, and vote accordingly IN THE PRIMARY. When we get to the general election fine, we can start translating rhetoric again. But in the primary if nowhere else let's try to take policy proposals seriously.
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ReplyDeleteYou know, although moderates are a dying breed they do still exist in both parties. So poking fun at the far side of the opposing party in no way requires agreement with the more extreme positions of your own party; it might be true of most people now, but most is not all.
DeleteThere are 850+ posts on this website documenting Cochrane as firmly "center right" politically. So it's perfectly credible for him to claim he's not a "denier" (i.e., far right) within a post that's primarily dedicated to poking fun at the "climate religion" crowd (i.e., far left). The "center right" might be nearly gone, but judging from this blog Cochrane is one of its few remaining survivors.
Question for Anonymous: [re: 'center right'/'far right deniers']. How do you classify someone who understands climate change as happening, it's somewhat measureable, and it's able to be modeled using extrapolation techniques, with some assumed consequences on everything else. How do you classify such a person if they have complete scepticism about the policy proposals? The reasons can be manifold without being an Evil Conspiracy ("far right").
DeleteHow do you classify someone who seems to espouse the climate policies of North Korea or old East Germany? Remember Chernyoble? Government failure! The new label now, being good 'wolf in sheep's clothing' tactics, is "Green New Deal."
Give me spontaneous market failure any time, and call me libertarian.
Dear Anonymous - as the post you were replying to was removed by the author I can't comment on it, but on your own post I wish to object to this: "...he's not a "denier" (i.e., far right)..." There's a peculiar delusion in some quarters that the far right consists of "deniers"/creationists/anti-vaxxers/assorted Luddites/Nazis.
DeleteThis is not the case.
I understand that Cochrane is not a member of the lunatic fringe; he is a retired Distinguished Professor from a prestigious university, where cranks are not allowed.
DeleteIn my opinion, however, he is at the extreme right end of those public intellectuals with solid academic credentials who speak out.
Can you name anyone out there with Cochrane's credentials who is to the right of him?
In a Cochrane essay as much hinges on tone and atmosphere as on substance. He offers, "I am not a denier". But then moments later intones "If indeed warmer weather is an existential crisis".
ReplyDeleteSo he makes his way here with innuendo while avoiding an explicit stand against the facts and science--which is where his ideology clearly draws him (can't you tell?).
Ever the clever rhetorician.
JZ:
DeleteNuclear weapons proliferation poses an existential threat. The former Soviet Union posed an existential threat; the German National Socialists posed an existential threat.
Ecologically arrogant or naive folks who live in flood plains and coastal littoral zones or low-density suburbs in semi-arid suburbs will suffer, some will die but that still does not pose an existential threat.
As for the "Ever the clever rhetorician." remark, I guess you have not studied probability and statistical theory and modelling much, have you?
Yes, you can put your clothes back on now.
In a brief essay, every phrase counts. Whether dog whistle or Freudian slip, Cochrane's "If indeed warmer weather is an existential crisis" leaves behind a strong ideological odor.
DeleteDear John:
ReplyDeleteWould you recommend Chicago for a MBA?
Here is a lament that economists are paying insufficient attention to climate change: https://voxeu.org/article/why-are-economists-letting-down-world-climate-change
ReplyDeleteMy response is that economists are largely rational. :-)
Oh yeah, Stern is the zero discount rate guy!
DeleteThe article was written by economists.
Delete1. Economists wrote that article.
Delete2. Here's another article that may be of interest:
https://newrepublic.com/article/155205/tyranny-economists?utm_source=pocket-newtab
"but a reader still burns to know: How could economists be so wrong, so often, and so clearly at the expense of the working people in the United States, yet still ultimately triumph so totally? It’s likely because what economists’ ideas did do, quite effectively, was divert wealth from the bottom to the top. This entrenched their power among the winners they helped create."
It could be an interesting rant in The New Republic, reviewing Applebaum's book, "The Economists' Hour," but the reader should note (and not without cynicism) that the Kaldor-Hicks idea requires additive properties in Utility, which is famously not additive in humans. Making an aggregate ("social benefits") out of something that cannot be aggregated must rank with belief in unicorns and tinkerbell.
DeleteNo wonder these "redistributionists" want to debunk all models or analyses that contradict the pet theory of "equality" (whatever that is supposed to mean).
Applebaum and The New Republic have more of a "hidden agenda" than Milton Friedman, who simply said "let people do their creative work, and only restrain them when they use fraud or violence." His paean to labor unions would suggest some lingering faith in the mysticism of Marx.
Non-sequitur.
DeleteThe JPM link is broken> https://www.jpmorgan.com/errors/404
ReplyDeleteStill is...
DeleteThe problem with fracking is disturbance and pollution of ground water, the source of much of our clean drinkable water. Ground water is NOT a renewable resource, since the process of moving rainwater to underground reservoirs is painfully, excruciatingly slow. Sacrificing water to recover trappee natural gas is suicidal to the planet and assuredly to our country.
ReplyDeleteMr. Unknown. That is good to know. Could you please provide documented evidence of pollution of ground water.
DeleteThank you.
Frank: All comments attributed to 'larryandjoyce82' are mine, Larry L. English, with review and agreement by my wife, Joyce W. Chang.
ReplyDeleteCarbon tax is MOAR GOVERNMENT. It would be more realistic to put government in charge of increasing warming, thereby preventing the possibility that it will take place.
ReplyDeleteNuclear's good, but expensive. It amounts to an energy tax on the economy.
Unreliable renewables are worse. They're expensive and can only be allowed onto a national grid when there are plenty of other generators.
Geo-engineering? A, do the countries that would like a warmer climate get any say? B, you do of course realise that all the proposed methods are pie in the sky?
R&D: billions invested, not a hint of a return. This despite all the best aerospace physicists that NASA kicked out after the shuttle program ended, trying their luck at wind turbines. Result, fractionally marginal improvements.
Denier: when you have to resort to ad homs, it not only condemns your own arguments as empty, but says unpleasant things about you.