New study regulates on free market alarmists, finds no downside to pricing carbon pollution

Cap-and-trade will have no impact on the US economy, a new report by the Energy Information Administration concluded yesterday. Chalk it up in the “yet another study shows no downside to reducing carbon pollution” column: it's yet another blow to the free market alarmists whose tarot card prophesies of economic doom continue to be proven so consistently wrong.

Ok, so the EIA didn’t say “zero” impact, but it might as well have. According to the brand new, authoritative analysis, the Senate climate bill would reduce US GDP by only a CUMULATIVE $452 billion between 2013 and 2035, or 0.2%.

Now $452 billion sounds like a big number, but it’s in fact infinitesimally small. How infinitesimal? Over 23 years, that’s roughly $19.7 billion per year. That’s less money than is currently possessed by 18 individuals. In fact, the richest 17 people in the world could pay off the whole $452 billion and still be billionaires.

Hardly the picture of economic doom painted by the free market alarmists.

Of course, as anyone familiar with climate policy knows, it’s not just the “most likely scenario” that matters: worst-case scenarios, though unlikely, can still happen, so it’s important to consider those as well. But again, the data here will leave the fossil fuel pharisees disappointed. In 5 of the 6 scenarios, economic costs ranged from 0.1% to 0.4% of GDP, and the worst case scenario predicts a puny 1% GDP loss. Over 23 years, that’s 0.04% per year. That’s what the free market alarmists are so worked up about?

In other words, while there may be economic costs associated with making polluters pay, those costs are a fraction of tiny, and more importantly they are predictable. In general, we know pretty well what happens when, for example, we tax a good. To the extent that some uncertainty remains, the range of possibilities is finite and manageable--a 0.04% decline in GDP may sting, but we can live with it. And that doesn’t even include the benefits of action, which are likely to be orders of magnitude higher than the cost.

On the other hand, the range of possible outcomes from human interference with the climate is unpredictable and varies widely, and the worst-case scenarios are the stuff of nightmares. The consequences of messing with markets are a lot more manageable than those of messing with Nature.

Moreover, historical evidence suggests that whenever we’ve been wrong in predicting the cost of environmental regulations, we’ve nearly always overestimated the downside. Why? Because markets work: if government policy increases the price of energy, smart businesses will invent new technologies that reduce the cost of compliance and spawn entire new industries. In other words, if you think cap-and-trade will hurt the economy, it can only be because you don’t believe in markets.

On the other hand, if we’re wrong about the consequences of climate change, we’re likely underestimating them. With each new positive feedback that’s discovered, it becomes more and more likely that catastrophic climate change is in the cards for continued fossil fuel burning. In fact, a study found that “New scientific findings are found to be more than twenty times as likely to indicate that global climate disruption is ‘worse than previously expected,’ rather than "not as bad as previously expected.” Now, you can either read this as evidence that the dangers of global warming are becoming more clear as we learn more, or that the majority of the world’s scientists are engaged in a massive conspiracy to cover up the truth and establish an eco-communist new world order. But you’re a reasonable person. And do reasonable people believe in conspiracy theories about Nazi scientists?

So there you have it. The risks of pricing carbon are tiny, likely overblown (even as small as they are), and no matter how big will always fall within the manageable realm of human experience. On the other hand, climate risks are huge, likely dangerously underestimated, and could destroy civilization as we know it if the worst-case comes true. The decision is SO EASY.

And that’s the most heart-stoppingly infuriating, rip-your-hair-out mind-numbing, part about the whole “climate debate”: that the skeptics are willing to risk so much for so little, to bet the future of civilization--OUR civilization--on something so infinitesimally unimportant and devoid of value. Even if the skeptics are right, even if the scientists are wrong and there is absolutely zero reason to reduce CO2 emissions, the costs of doing so are so low that there's no harm in trying. Following the advice of a climate skeptic is like playing Russian Roulette for a quarter, like making a $1 million investment for a $100 return, like giving Barry Zito a $126 million contract. The fact that people with such warped notions of risk-reward think of themselves as stewards of our nation’s businesses is almost as terrifying as their influence on our climate policy. We don't want to do anything about CO2, because we might lose 0.04% of annual GDP.

When the worst case scenario for cap-and-trade is 0.04% of GDP per year, you need to be 99.96% certain that 97% of the world’s climate scientists are 100% wrong in their study of the climate. You’re a reasonable person. Care to take that bet?

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Or for that matter, libertarian climate skeptics who can't be bothered about their CO2 emissions:

(Hey, the warming's not stopping!)

Relax and smell the gun smoke: Supreme Court rules that NRA was way too paranoid about Obama after all

The Supreme Court dealt a blow to the NRA today, striking down Chicago’s handgun ban while preserving the right of states and localities to enact “reasonable” gun control laws—and proving once and for all that the anti-gun boogeyman from which the organization derives its focus is a mirage.

Remember back in 2008 when gun sales spiked due to irrational fears that President Obama would soon ban guns? If the year-and-a-half of continuing gun-ownership and zero presidential rhetoric on the matter had not allayed such paranoia already, this decision should dispel any last fears of lurking liberals hell-bent on taking away people’s guns. For pragmatic liberals like the President, even if we’d like stricter gun laws, they’re simply not a priority; you can keep your guns as long as I can cap your carbon. And even if the President did have an agenda to ban guns, this decision is a reminder that he wouldn’t be able to.

Personally, I’m ambivalent on the whole matter. I’m inclined to agree with Justice Alito that the Second Amendment “limits (but by no means eliminates) [states and municipalities’] ability to devise solutions to social problems that suit local needs and values,” and that “[s]tate and local experimentation with reasonable firearms regulations will continue under the Second Amendment.” However, I’m skeptical that a ban on handguns is the best way to solve the social problem of urban violence. I’ve not seen any evidence that banning handguns actually keeps them out of the hands of the gangsters and thugs we worry about using them. In fact, it seems the ultimate example of going after the symptoms of the disease rather than causes. Better for liberals to focus our energy on alleviating the incentives to engage in violence (poverty, gangsta culture, and money to be earned from the drug trade) than the tools used to commit it.

So if you’ve been stocking up on guns and ammo since ’08, relax and save your money. We liberals aren’t trying to take your guns away, and even if we were, there are other branches of government to stop us.

UPDATE (6/29/10): A friend pointed out something I'd glossed over, which is that while the Court ultimately ruled against handgun restrictions, President Obama's nomination to the Court, Justice Sotomayor, ruled in favor of the ban, so it would be fair to assume that if the President had his way, handguns would be banned. Moreover, he argued, the President was for the handgun ban before he was against it, changing his mind after the Heller decision struck down D.C.'s handgun ban.

It's a fair point. While Obama himself would have a hard time restricting gun ownership, his Supreme Court nominations could certainly reduce the types of guns we're allowed to own (or at least they could have before this ruling).

That said, if it's true that the President changed his position on handgun bans, it indicates that pushing forward to tighten gun control isn't a policy priority for him. In other words, even if he believes in stricter gun control in an ideal world, it's not something he's willing to spend political capital pushing, given all the other priorities on his plate. Moreover, even if he were to push forward with a ban on handguns, that's a far cry from banning ALL guns. The rush to buy guns before they were "banned" is, and always was, based on unsubstantiated conspiracy theories.

And in any case, the Supreme Court has now largely settled the issue, so even if the President did want to push hard for a handgun ban, or replaces conservative with pro-gun control Justices, the precedent has already been set. And the Supreme Court rarely overturns precedent.

What happens when we delve too greedily and too deep - maybe Gandalf can stop the gusher

"Too deep we delved there, and woke the nameless fear."
- Gloin, The Fellowship of the Ring

The Dwarves of Khazad-Dum perished not because their analysts failed to plan for Balrog attack, but because their reckless lust to mine, control, and profit from the earth's natural wealth led them into places they should not have been, unleashing forces they could not control.

Maybe we do owe BP boss Tony Hayward an apology - not for getting BP to pay for the clean up (seriously Republicans, don't you remember the concept of personal responsibility?), but for the way he's been demonized by the media and liberal activists. As if BP isn't doing everything it can to stop the gusher.

We also owe the President and his officials an apology for the ridiculous assertions that the failure to stop the oil from flowing is somehow their fault. As if regulators and politicians can just invent technology to seal the leak.

Such misguided criticism spans the political spectrum. Climate blogger Joe Romm shrieks "Why oh why hasn’t Hayward been fired yet???" Sarah "half-term" Palin accuses the administration of not putting enough effort into stopping the oil leak - and gets called out by Bill O'Reilly. Frank Rich criticizes the President's "impotence," melodramatically portending, "What’s also being tarred daily by the gushing oil is the very notion that government can accomplish anything." The CEO of Anadarko Petroleum - BP's partner on the Deepwater Horizon well - stabs his onetime ally in the back to save his own skin, alleging that "this tragedy was preventable and the direct result of BP’s reckless decisions and actions." For an industry built on ash and flame, oil is a cold cold business.

The truth is, the President isn't Aquaman, and firing Tony Hayward will not seal the hole in the seafloor. If anything, a post-firing leadership vacuum would frustrate efforts to stop the gusher. As bad as we want a villain to blame and whose head to roll, there is no bad guy here. Accidents just happen: while any single accident may be preventable in hindsight, the laws of probability make eventual tragedy inevitable in any risky endeavor - especially 5,000 feet under the sea. If not BP, then Exxon or Shell; if not in 2010, then 2012 or 2020. The oil spill doesn't mean Tony Hayward is incompetent - it just means he is imperfect, because he is human, using imperfect technology invented by humans. "Blaming" BP makes about as much sense as "blaming" NASA engineers for the Challenger disaster.

Not that I'm shedding tears for BP. Hurt feelings are not the greatest harm in castigating CEOs and politicians for not staunching the oil, but rather the way in which such criticism paints the disaster as a technical slip-up rather than a philosophical quandary - a problem resulting from insufficient planning and engineering rather than the inevitable consequence of messing with forces we don't understand. Much of the natural world is still a mystery to us, and failing to respect that mystery, placing too much faith in our engineering expertise, will end in tears.

The doom of Icarus was not that his wings were poorly constructed but that his technology carried him too close to the sun. In The Lord of the Rings, the Dwarves of Khazad-Dum perished not because their analysts failed to plan for Balrog attack, but because their reckless lust to mine, control, and profit from the earth's natural wealth led them into places they should not have been, unleashing forces they could not control.

And that's the lesson in the Gulf: the reason we can't blame BP for the uncontrollable gusher is that the oil is not something humans can always control. BP's disaster was indeed caused by recklessness, but not that of an individual company ignoring technical warning signs - rather, like the Dwarves, it was the collective recklessness of the human race in our wild thirst for comfort and wealth subduing Man and Nature with vain rigor, not for truth or love or basic need but to fuel our production of all that is unnecessary for happiness. We pricked the earth and unleashed a fury we were powerless to undo.

The critics' creeping technocracy, which assumes any problem can be broken into its component parts and methodically solved, casts Nature as something that can be subdued and controlled if only we throw enough money and smart people at it. If the disaster was merely a problem of BP's "recklessness," of not properly anticipating and fixing technical risks, then there's nothing inherently dangerous with the activity of offshore drilling itself - and the great human project to conquer Nature and engineer her to our image of the mathematically perfect world marches on.

This is not to say that we should never take risks or venture into the unknown. But when we take such ventures, the prize must be a higher purpose than profit, and the harm of any inevitable disaster confined mostly to the venturers themselves.

The unknown unknown of what would happen if a deepwater rig failed is tragically being answered before our eyes: 15 times worse than we ever thought possible. This local spill, of course, offers a grim preview of the looming, great Unknown Unknown of the 21st Century which we've just begun to taste: global climate change. Skeptics claim that uncertainty in the science means we can continue recklessly pumping heat-trapping gases into the atmosphere, when in reality the uncertainty is exactly why we must stop. Just as early estimates of the oil spill turned out to be woefully low, we have no idea what the worst consequences of climate change could be - and I don't want to find out what they are. The longer we mess with Nature, the likelier we are to get burned - and not every fire that's started can be easily put out.

The story of the BP spill is not about an overlooked technical fix that could have prevented a disaster, but about what happens when we pry into forces of Nature we don't understand and certainly can't control. The tragedy of Moria was not that the Dwarves didn't predict the location of the Balrog which would have enabled them to continue digging safely, but that the greed of their digging itself made disaster inevitable. Eventually, they would have run out of safe places to dig.

In The Lord of the Rings, it took a wizard to defeat the menace awoken by delving too greedily and too deep. Unfortunately there's no such magic in the real world, and neither President Obama nor Tony Hayward are wizards. Not all that is done can be undone; not every problem can be prevented.

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Bill O'Reilly (!) mocks Sarah Palin

You know how far the GOP has moved to the right when Bill O'Reilly starts to sound reasonable - even rational. My first post in a while was going to recap a trip to Costa Rica from which I returned Tuesday, but this exchange between the Fox host and a half-term Alaska governor is too priceless:



This snippet about halfway through is especially hilarious (slightly edited):

O'Reilly: "So what is your solution here, Governor? What would you do tonight? Tell the nation tonight what you would have said your main point in that speech."

Palin: "Stop, stopping the gusher."

O'Reilly: "But nobody knows how to do it."

Palin: "We haven't had the assurance by the President that that has been his top priority..."

O'Reilly: "If that happens, there's going to be an outcry. But are you telling me that you don't think the President's top priority is stopping that leak? Is that what you're telling me?"

Palin: "What - what I'm - what... blah blah blah"

People often accuse the President of speaking in generalities and shirking the specifics, but a proposal for how to stop the oil spill doesn't get more general than "stopping the gusher."

Tellingly, Palin's proposal to stop the oil spill by stopping the oil spill is strikingly similar to the GOP's proposal to lower health care premiums by lowering health care premiums:

What everyone needs to get through their heads is that it's pointless to demand that somebody, whether President Obama or BP, "do more" to stop the oil spill - as if the President and BP have no incentive to do so and aren't doing everything they can to stop it. Short of the President or Tony Hayward "scuba diving to the bottom of the Gulf, placing large amounts of silly putty in the hole, then performing a miracle by bringing back all the dead wildlife to life and declaring, 'I am the Chocolate Jesus!'" (as one reader suggested), I'm not sure what more pundits could want. Sadly, even if President Obama did this, conservatives would still hate him (and liberals would still hate BP).

Palin, Boehner, et al aren't just the party of "no" - they're the party of "no clue."

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Why I'm not even mad at BP

The most absurd spectacle of the oil spill is the gusher of accusations over “who’s to blame.” Liberals accuse BP of recklessly ignoring safety measures that could have prevented the disaster. Conservatives are somehow blaming President Obama for “not doing enough” (although it’s beyond me how someone who subscribes to “small government” can in good faith accuse the president of not regulating oil companies enough).

But you know who’s really to blame? No one.

Accidents happen. We act in a world of incomplete information. Not every risk is foreseeable, those we foresee are not always preventable, and those we fail to prevent are not always solvable, even with the best brains and expertise working on them. Could BP have done more to prevent the disaster? Maybe. Could they do more to stop it now? Doubtful. In hindsight it’s easy to point out all the flaws BP “should” have spotted and prevented, but in practice it’s simply impossible to predict every possible risk in advance. That’s just the way life works.

This is especially true when pioneering into the unknown. BP’s deepwater platform was literally testing uncharted waters, drilling oil at depths rarely done before, using cutting edge technologies invented for that purpose. Many of the solutions BP has tried have never been attempted before, so there has been no way to tell in advance whether they’d work. To say the disaster is BP’s or President Obama’s “fault” is a little like blaming Lewis and Clark’s “recklessness” for the deaths in the wilderness of fellow explorers, or blaming NASA engineers for the Apollo 13 or Columbia disasters.

To wait until all risks are known and until there is zero chance of failure would destroy all progress and innovation. You can always do more for safety, but at some point doing more means not doing. If Lewis and Clark cared about safety, they never would have found Oregon. If astronauts weren’t willing to risk their lives, we’d have never landed men on the moon. Exploring hostile, unknown environments, whether uncharted forests, outer space, or 5,000 feet beneath the sea, is an inherently dangerous activity, and disasters are inevitable. That’s the nature of the beast.

So the proper question is not “how angry should we be at BP,” or “how should BP have prevented the disaster,” or even “how do we prevent future oil spills.” Rather, we should ask, “given the inevitability of disaster, are the benefits of an inherently dangerous endeavor great enough to justify the costs of a worst-case disaster when it eventually happens?” Is it worthwhile to put ourselves in a position where catastrophic accidents are bound to happen--and which we may not be able to get ourselves out of?

In this case, the answer is pretty obvious: the scale of the BP disaster shows that there really is no reason to pursue deepwater drilling. It’s already the largest oil spill in US history, and we haven’t even seen the worst possible impacts. Plumes of oil could cause a collapse of the Gulf of Mexico food chain. A hurricane storm surge would bring the oil miles inland, destroying even more habitat than anticipated. And for what? For slightly cheaper oil? So some people can make money? When we have alternatives readily available in the form of smaller cars and driving less?

It’s a similar lesson for climate change. Sure, we don’t know for certain how devastating the impacts of global warming will be, but they could be unthinkably huge—and the worst ones we probably haven’t even imagined yet. Do we really want to risk destroying the planet, all for the sake of saving a few dollars off our utility bills and buying cheap goods that don’t actually bring us happiness?

The bottom line: humans simply don’t have the capacity to understand all the risks before taking action. When those risks are potentially catastrophic, we need to take a long, hard look at the benefits of action before moving forward.

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Rudy Giuliani (sort of) advocates government takeover of BP

Last night, Fox News was on at the gym, and I heard Rudy Giuliani drop this whopper:

[The President’s leadership on the oil spill] couldn’t be worse… What we should have done is the president of the United States should have immediately taken control; should have gone there; should have been there a lot more than twice; should have been leading the charge from the front, not this "oh you know I'm not going to touch it."

And BP — for the longest time Gibbs was saying BP was in charge. The president announced a week ago that he was actually in charge….

So [it] wouldn't be just in the hands of BP. And he wouldn't put the entire responsibility just on them.

Wait, WHAAATTT??? For the past year and a half, the GOP has done nothing but accuse President Obama of “socialist” policies that increase government control over business. But now Giuliani says the President should have done more to “take control” of a private company’s handling of a problem it caused? Cognitive dissonance is a nasty thing, but this is ridiculous.

And whatever happened to “personal responsibility”? The core of conservative philosophy since the ‘60s has been the notion that each individual is solely responsible for his own welfare, and that therefore no one has any obligation to help anybody else. Conservatives have blasted welfare for compelling “responsible, hardworking” Americans to subsidize “lazy, irresponsible” Americans. Similarly, they decried bailouts as an abdication of personal responsibility on the part of companies who ran themselves into the ground (e.g. AIG and GM). "You cause the problem, you pay the consequences" has been the mantra.

But now Giuliani doesn’t think that a disaster caused by BP and Transocean’s drilling should be those companies’ “entire responsibility”? If a company causes an oil spill, it’s not just in their hands—the government is there to bail you out.

Quite simply, anyone who repeats the meme that President Obama should have done more to prevent/clean up the oil spill belies their own lack of conservative principles—at least as defined by the modern conservative movement. Once you criticize the President for not doing enough, you’re acknowledging that government has a legitimate role in regulating private industry. If on the other hand you truly believe that government should not interfere with the market, then you must also believe that the mess is BP’s to clean up.

Of course, that position doesn't allow a politician to score political points against the President.

So I can see how small government conservatives must be frustrated with the Republican Party establishment. When a party’s presidential candidates are this cognitively dissonant, you have to wonder, what does the GOP actually stand for these days? We’ve already seen GOP Senators filibuster a pay-as-you-go bill prohibiting the federal government from spending money it doesn't have, betraying their commitment to fiscal discipline. They’ve filibustered funding for the troops in Afghanistan, betraying their commitment to the troops. Now they’re saying that the federal government should “take control” of private oil companies, and that companies’ problems aren’t their “entire responsibility.” When Republicans oppose policies they support, and support policies they oppose, the party can no longer be considered “conservative”—it becomes purely a machine dedicated to winning elections.

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