Redefining Environmentalism

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The “Breakthrough Institute,” was founded in 2003 by Ted Nordhaus and Michael Shellenberger, authors of “The Death of Environmentalism” and Break Through, and aspires to be “a paradigm-shifting think tank committed to modernizing liberal thought for the 21st Century.” Last week Nordhaus and Shellenberger delivered a lecture at Yale University that provided myth-shattering explanations for recent failures of the environmental movement. Equally significant, and very encouraging, is that in their lecture, Shellenberger and Nordhaus also set forth principles for redefining and revitalizing environmentalism that are realistic and thoughtful. The full text of their remarks, entitled “The Long Death of Environmentalism” are posted on their website.

Here is the problem with environmentalism according to Nordhaus and Shellenberger:

“Today, environmental efforts to address climate change and build a green economy lie in ruins. The United States Congress this summer once again rejected climate legislation that even had it succeeded would have had virtually no impact upon U.S. carbon emissions over the coming decade. The magnitude and consequence of this defeat are poorly understood outside of Washington. Greens had the best opportunity in a generation — a Democratic White House and large Democratic majorities in Congress. But they banked everything on a single bill and walked away with nothing — or rather worse than nothing, since today environmental credibility with lawmakers of both parties is today at an all-time low. Meanwhile, green stimulus investments ended up creating very few jobs. Those that it did create were low-wage and temporary custodial jobs — not the high-wage manufacturing jobs that created the black middle-class after World War II. And today, the clean tech sector– the darling of high tech VC’s at the height of the green bubble– is in a state of collapse as stimulus funds expire, large public deficits threaten clean energy subsidies both here and abroad, and Wall Street firms short clean tech stocks.”

Whether or not you agree with all of Nordhaus and Shellenberger’s premises – such as the big one, that anthropogenic CO2 is truly destined to cause catastrophic climate change, their take on what has happened to environmentalism is not only accurate, but a refreshing burst of candor and clarity coming from the heart of the environmentalist community. For example, they acknowledge that the overwhelming preponderance of media spending came from the climate change alarmists, and not from the climate change deniers:

“In the wake of the crash, environmentalists pointed their finger at the usual bogeymen. They claimed that the problem has been that fossil fuel interests have massively outspent underdog environmental groups, funding skeptics to mislead the public and duping the media into giving too much credence to skeptical views about climate change. In reality, the environmental lobby massively outspent its opponents. In just the last two years, by our rough estimate environmental organizations and philanthropies spent somewhere north of $1 billion dollars advocating for climate action. In contrast, the U.S. Chamber of Commerce, Exxon-Mobil, the Koch Brothers, Big Coal, and the various other well publicized opponents of environmental action might have spent, when all was said and done, a small fraction of that. Indeed, much of the U.S. energy industry, including the largest utilities, helped write and lobbied for U.S. climate legislation.”

Equally refreshing is the admission by Nordhaus and Shellenberger that “green jobs” and “clean technology” are typically drains on economic productivity, not engines of economic growth:

“Many greens concluded was that they needed to reframe global warming as an economic opportunity, not an ecological crisis. And so carbon caps and the soft energy path were repackaged as economic and jobs policy despite little evidence those policies would, on balance, create jobs. In fact, most credible economic models of proposed cap and trade policies, including those produced by government agencies, predicted the opposite.”

Nordhaus and Shellenberger go on to basically accuse environmentalists, climate alarmists in particular, of discrediting not only the broader environmental movement, but the entire clean technology movement, because they oversold clean technology as the panacea for both environmental and economic challenges – when in fact, certainly in the short run, it was neither:

“Efforts to reframe climate policy as economic policy ended up discrediting what had been a broadly popular agenda to invest in developing new energy technologies by rendering it indistinguishable from the profoundly polarizing climate debate. ”

What makes Nordhaus and Shellenberger’s perspective very interesting and potentially very important is the fact they are arguing these points as individuals with impeccable environmentalist and liberal credentials. The fact they recognize these sobering realities that constrain both environmentalism and clean technology make their conclusions worthy of a careful read. Here is a summary of the twelve points Nordhaus and Shellenberger believe should inform a revitalized, reinvented environmentalism:

Twelve Theses for a Post-Environmental Movement – by Ted Nordhaus and Michael Shellenberger
(the text here is abbreviated by the editor, and the reader is encouraged to read the complete version on the Breakthrough Institute’s website)

“(1) More, better or louder climate science will not drive the transformation of the global energy economy. The resources necessary to make such a transformation will not be forthcoming in pursuit of climate benefits that are uncertain and far off in the future… our understanding of how that warming impacts the climate system at regional and local scales will become harder to characterize, not easier.

(2) Stop trying to scare the American public.

(3) The most successful actions will not be justified for environmental reasons [they will be justified for reasons of national security or for economic reasons]. We should put shared solutions at the center of our politics, not our view of the science.

(4) We will not solve global warming through behavior changes… much of the world already lives in dense cities – more and more of us every day… and as they do they will use vastly more energy and resources, not less.

(5) Stop treating climate change as if it were a traditional pollution problem.

(6) We will not regulate or price our way to a clean energy economy. Regulatory and pricing solutions tend to succeed when we have good, low cost alternatives to the activities which we are attempting to discourage or eliminate.

(7) The so-called ‘soft energy path’ is a dead end. For centuries, the global economy has used ever more energy, even as it has used energy ever more efficiently and renewable energy. Renewables still cost vastly more than fossil based energy.

(8) We will not internalize the full costs of fossil fuels, even if we are able to agree upon what they actually are [the calculations are too subjective]. The degree that we do internalize the cost of carbon will be determined by the tolerance within specific political economies for policies that increase energy costs.

(9) We need to make clean energy technologies much cheaper in order to decarbonize the global energy economy.

(10) We have to get over our suspicion of technology, especially nuclear power.

(11) We need to embrace again the role of the state as a direct provider of public goods. Think of a transformative technologies developed over the past century is the result of government investing in those technologies at a scale that private firms simply cannot replicate.”

(12) Big is beautiful. The rising economies of the developing world will continue to develop whether we want them to or not. The solution to the ecological crises wrought by modernity, technology, and progress will be more modernity, technology, and progress. The solutions to the ecological challenges faced by a planet of 6 billion going on 9 billion will be large central station power technologies that can meet the energy needs of billions of people increasingly living in dense mega-cities, industrial scale agriculture, desalinization and other technologies for gardening planet Earth that might allow us not only to pull back from forests and other threatened ecosystems but also to create new ones.”

For a libertarian leaning fiscal conservative who is 99% convinced anthropogenic CO2 will not cause catastrophic climate change, yet embraces good government, energy security, and reasonable environmental policies, these twelve theses from Nordhaus and Shellenberger are most encouraging. They provide a basis for a genuine dialog between Republicans and Democrats, one that might yield genuine progress towards environmental sustainability combined with sustainable economics.

California’s Green Godfathers

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It is an article of faith among environmentalists, conventional wisdom in the media and academia, and a massive delusion afflicting California’s voters, that the climate skeptic community receives massive backing from oil companies and other corporate “polluters.” But when you start to look at who stands to gain from climate “mitigation” policies, and really examine the money trail behind legislative lobbying and political campaigns, the notion that the money is on the side of the deniers doesn’t hold up.

Where the money really is in the global warming debate, as well as reasons why anthropogenic CO2 may not be pollution after all, has been explored at length already here in previous posts including Investigating Climate Alarmism, Credible Climate Skeptics, The Hijacked Public Interest in California, Public Sector Deficits & Global Warming “Mitigation”, California’s Proposition 23, Who Are The Carbon Criminals?, Implementing California’s Global Warming Act, The Climate Money Trail, and The Climate Alarm Industry. In this post, the intent is to take a closer look at who was behind the annihilation of California’s Prop. 23 last November, a citizens initiative that would have suspended implementation of California’s “Global Warming Act,” tepidly backed by a handful of oil companies (most oil companies sat on the sidelines), that was outspent by three to one by members of what might be termed a green plutocracy. What killed Prop. 23 was money, in particular, individual donors who wrote checks for $1,000,000 or more. To view all of the major donors to the No on 23 campaign, ref. Ballotpedia. In this analysis, the photos and most of the biographical information is from Wikipedia. Who are these green plutocrats, what are their motives, and why are they well intentioned but misguided?

THE GREEN GODFATHERS

The Financier – Thomas Steyer, est. net worth $1.2 billion – is the founder and Co-Senior Managing Partner of Farallon Capital Management, LLC, managing $20 billion in capital for institutions and high net worth individuals. Since 1986, Steyer has been a partner and member of the Executive Committee at Hellman & Friedman, a San Francisco-based $8 billion private equity firm. Steyer is a leading Democratic activist and fundraiser. An early supporter of Hillary Clinton for President, Steyer became one of Barack Obama’s most prolific fundraisers.  In 2010, Steyer and his wife, along with Warren Buffett and Bill Gates, signed the Giving Pledge to donate half their fortune to charity.

Steyer’s contribution to defeat Prop. 23 – $5,000,000. To put this in perspective, Steyer’s estimated net worth is $1.2 billion. If someone who had paid off their home and managed to save several hundred thousand dollars in a 401K plan, i.e., if they had accumulated a net worth of $1.2 million, a donation of $5,000 would make the same minor dent in their fortune as the $5,000,000 made in Steyer’s. As for Steyer’s decision to donate half his fortune to charity – to digress – isn’t Steyer a Democrat? Doesn’t he want to support government spending? Don’t Democrats base much of their economic philosophy on higher taxes for the rich? When people like Tom Steyer, Bill Gates, Warren Buffett, and other unbelievably wealthy individuals transfer 50% of their assets to private non-profit charities of their choosing, the rest of us pay higher taxes (ref. The Billionaire Givers Club“). So what does Steyer hope to gain by spending Prop. 23’s proponents into the ground? First of all, he probably actually believes that anthropogenic CO2 causes catastrophic climate change, a misconception that is possibly forgivable. But Steyer also apparently labors under a less justifiable misconception, given his formal training and extensive experience in finance and economics, which is that by making energy cost more – along with water, land, and other basic resources; climate mitigation policies make everything cost more – this will somehow stimulate economic growth. One can only hope Mr. Steyer will reexamine both of these premises before he writes his next big check.

Before moving on, it is important to at least wonder how Steyer’s financial concerns will benefit from CO2 emissions trading schemes. If the capital investments funded through emissions trading schemes actually yielded positive economic and environmental benefits, such as massive nuclear powered desalination plants on the southern California coast, one might be tempted to embrace the noble lies that justify them. But cramming down anthropogenic CO2 emissions will do NOTHING to alleviate pollution. What they will do is fund costly alternative energy technologies that will be obsolete before they’re deployed. And the financial commissions on CO2 emissions trading will transfer billions into Wall Street. For nothing.

The Venture Capitalist – John Doerr, est. net worth $1.7 billion – is a partner at Kleiner Perkins Caufield & Byers in California’s Silicon Valley. Kleiner Perkins has made investing in “green” technology a major focus of their private equity funds, recently adding as partner the global warming crusader Al Gore. It has to be said that nothing is wrong with green technology – the idea of discovering methods to refine liquid fuel from biomass, either from a waste-stream or specialized crops is a terrific opportunity. That we may eventually harness electricity from the sun in a cost-effective manner is also a tantalizing possibility. Fascinating developments in water filtration for wastewater treatment or seawater desalination promise to eventually eliminate water scarcity. Advanced materials sciences promise to deliver building materials and manufactured goods that no longer require scarce resources or materials extracted in a ecologically disruptive manner. Research needs to continue along all of these vital fronts. But John Doerr, well-intentioned though he may be, has forgotten what made Silicon Valley great.

Doerr’s contribution to defeat Prop. 23 – $2,100,000. California’s Global Warming Act, which Prop. 23 would have derailed, would have done nothing to improve California’s environment. What it will do, however, is force consumers to consume products that cost far more than they should cost, in order to deliver billions of dollars of revenues to “green” technology companies whose products are not ready to compete against conventional solutions. There is no doubt that John Doerr actually believes that CO2 causes global warming – just watch his closing remarks at a recent TED Conference, where he has to fight off tears as he describes his commitment to deliver a better world to his children. Despite his sincerity, Mr. Doerr may wish to consider what happens when the entire world, starting with California, is impoverished because immature solar and impractical wind technologies are deployed in a futile and expensive attempt to satisfy global energy demand, instead of using abundant reserves of coal, gas and oil that can be developed and deployed at a fraction of the cost. Clean fossil fuel, emitting nothing but CO2, will create prosperity, which will enable the human population to stablize at 8.0 billion or less, instead of 10.0 billion or more. As the reserves of fossil fuel become somewhat more difficult to extract cost-effectively, the ability of ever-more-competitive alternatives to be voluntarily purchased by consumers is enhanced. There never has to be an energy shortage. Environmentalists, because they think CO2 is pollution, risk condemning the world to an unnecessary future of poverty, war, and overpopulation. Silicon Valley companies, and the venture capitalists who fund them, need to go back to earning money the old fashioned way, by building things that are better, faster, cheaper, and provide genuine solutions to genuine problems.

The Movie Mogul – James Cameron, est. net worth $650 million (ref. Celebrity Net Worth) – is one of the greatest filmmakers of all time, with mega-hits to his credit including The Terminator (1984), Aliens (1986), True Lies (1994), Titanic (1997), and Avatar (2009). In total, Cameron’s directorial efforts have grossed approximately $2 billion in North America and $6 billion worldwide.

Cameron’s contribution to defeat Prop. 23 – $1,000,000. Cameron’s most recent blockbuster, Avatar, depicted a planet inhabited by sentient beings who lived in harmony with their environment, threatened by humans who wanted to extract the valuable mineral resources on the planet. This movie, which, like all of Cameron’s movies, is terrific entertainment, belies a contradiction that Mr. Cameron may wish to ponder: The amount of land destructively disrupted by mines and wells is considerably less than the amount of land destructively disrupted by biofuel plantations, solar farms, wind farms, and the many roads and transmission lines necessary to connect them to markets. James Cameron is a complex, creative, inventive man, with not only a fascination, but an aptitude for science and technology. He has been a strong advocate for a robust program of space exploration and development. Cameron may want to read the work of Burt Rutan, an aerospace pioneer, who has published a comprehensive study on what he terms the “Global Warming Science Fraud.” Cameron is also, presumably, someone who cares deeply about human rights. One has to wonder if he would still support subsidizing the high tech industry’s enabling of total surveillance of citizens via “smart meters” and GPS-based mileage trackers, etc., and the denial of aspiring nations to develop cheap conventional energy in order to more rapidly lift their citizens out of poverty, if he didn’t truly believe in the alleged science of catastrophic climate change caused by anthropogenic CO2 emissions.

There is a version of environmentalism that is entirely legitimate – eliminating toxic discharges on land, or in the water or air, preserving wilderness and wildlife, and moving systematically towards sustainable consumption – that has been eclipsed completely by the goals of CO2 mitigation. There is also a school of economics, ignored by the goals of CO2 mitigation, that encourages policies to channel innovation and competition towards lowering the costs for energy, water and land in order to create prosperity. And there is a school of demographics that claims prosperity is the principle cause of negative population growth – perhaps the most compelling environmentalist goal of all. Do California’s Green Godfathers understand this? Do they care? At the least, they might stop attacking “deniers” as bad people, and reopen the debate as to whether or not CO2 mitigation yields any genuine benefit to the environment. Because on that answer hangs the fate of the world today.

What California’s Green Godfathers represent are interest groups – big finance, big technology, and the entertainment/media complex, who have the financial wherewithal to control the debate over climate change. These interest groups include individuals and coporations (from PG&E to GE) who can spend as much as they wish to advance the agenda of CO2 mitigation, and who in most cases stand to make billions, if not trillions, as a result of CO2 mitigation policies. The idea that the “deniers” hold a financial advantage, or have a hidden financial agenda that eclipses the agenda of the climate alarm interests is absolutely false. The defeat of California’s Prop. 23 is just one recent example of this reality.

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Investigating Climate Alarmism

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Prior to launching CIV FI, I edited EcoWorld, a website dedicated to “reporting on clean technology and the status of species and ecosystems.” My belief in the urgency of many environmental challenges; declining fisheries, deforestation, 3rd world development, depleting aquifers, endangered species, etc., is undiminished. But from 1995 until the spring of 2009, while writing or editing nearly 1,000 reports on these vast topics, I slowly changed from a person who believed in the urgency of reducing anthropogenic CO2 emissions, to someone who is a confirmed skeptic.

One reason I began to question the conventional wisdom on climate change was because whenever researching a particularly horrendous claim, I would inevitably discover the reality was far less significant than the headline. The alleged melting of the ice caps is a good example of this, because all you need is basic competence in high school algebra in order to realize the supposedly ominous quantities of ice-melt being parroted by alarmist journalists are utterly trivial. Here are some posts from several years ago where I ran the numbers and realized the amount of melting being reported in Antarctica and Greenland was actually so minute it was below the level of detectability:

The Real Facts on Increasing Antarctic Ice, 30 April 2009
Pessimistic Reporting, Optimistic Data, 26 December 2008
Antarctica’s Ice Mass, 17 April 2008
Greenland’s Ice Melting Slowly, 20 October 2006
Greenland’s Ice Cap, 04 September 2006
Antarctic Ice, 01 September 2006

In related posts, I realized mainstream journalists are completely ignoring the well-documented fact that the Pacific Decadal Oscillation, a pattern of cold and warm current oscillations that affect ocean temperatures throughout the northern hemisphere and especially in the northern polar regions, will not return to a cooling trend until 2018. Attempting to document this, I posted these entries:

Arctic Cooling on Schedule, 18 October 2007
Hottest Year? 1934, 10 October 2007

At the same time as I was noticing inconsistencies and exaggerations of data, I realized many of the steps being taken in the name of mitigating climate change, were actually causing new environmental problems whose consequences truly were beyond dispute. In particular, the European Community’s carbon offset trading had subsidized massive deforestation in the tropics to grow Palm Oil and Cane Ethanol. I published several warnings about this, including:

Land for Biofuel, 28 December 2007
Reforesting vs. Biofuel, 17 August 2007
Deforestation for Biofuels Causes Global Warming, 11 April 2007
Biofueled Deforestation, 01 April 2007
Biofuel is NOT “Carbon-Neutral”, 12 February 2007
Biofueled Global Warming, 23 January 2007
Biofuel Monocultures, 24 October 2006

At this point as well I realized it would make sense to begin reading the material of the so-called “deniers,” especially coming from the climate scientists who were qualified to criticize the overall theory that catastrophic climate change is caused by anthropogenic CO2 emissions. I focused on two individuals, Dr. Richard Lindzen of MIT, and Dr. Roger Pielke Sr., of the University of Colorado. Dr. Lindzen was not only one of the most qualified atmospheric scientists in the world, but had attracted a great deal of personal attacks on his character and motives – because not only did he question global warming theories, but fought back, exposing the conflicts of interest that have corrupted the mainstream academic community. I published several of his papers, and had the privilege of talking with him on several occasions. Here are some of them by Dr. Richard Lindzen:

Global Warming & Greentech, 20 April 2009
Climate Science, 30 October 2008
A Case Against Climate Alarmism, 07 February 2008
Global Warming Facts, Data & Statistics, 07 October 2006
Is there a Basis for Global Warming Alarm?, 05 September 2006

Dr. Roger Pielke Sr. has not incurred quite the same level of wrath from the alarmist community, because his approach to climate change issues is somewhat less confrontational than Dr. Lindzen’s. Both of them agree climate change is a reality – the notion that there isn’t any climate change is, after all, absurd. And both of them believe the role of anthropogenic CO2 in driving climate change is grossly overstated according to the alleged consensus. While both of them agree that changes in land-use by humans are indeed causing regional changes in climate, Dr. Pielke Sr. emphasizes this more than Lindzen. Here is material published that references Pielke’s work, including an interview with him:

Is the Earth Warming or Not?, 08 September 2008
Climate Trends: Debate vs. Demonization, 05 September 2008
Roger Pielke Sr. on Climate Change, 18 July 2008
Interview with Roger Pielke, Sr., 03 December 2007

In recent months on CIV FI I’ve continued to explore the science behind climate change theories. The more I dig into it, really studying the latest arguments as opposed to simply believing the tsunami of alarmist propaganda, the further convinced I become we are embracing a fraud. One new source of skeptical information I’ve recently uncovered is the website of Dr. Roy Spencer, a man who you would think is a demon if you read anything about him in the mainstream press. Spencer’s own reasoning, however, I find to be measured and compelling. His commentary, updated weekly, is online at the Science & Environment Policy Project.  Dr. Pielke Sr.’s commentary is on his blog Climate Science. Another good source of new information can be found at the website for a new book about to be released entitled “Slaying the Sky Dragon.” One may also review the material published on CIV FI in the Climate category, including Credible Climate Skeptics, The Hijacked Public Interest in California, Public Sector Deficits & Global Warming “Mitigation”, California’s Proposition 23, Who Are The Carbon Criminals?, Implementing California’s Global Warming Act, The Climate Money Trail, and The Climate Alarm Industry.

The emphasis on the topic of climate change in recent posts here on CIV FI is prompted by the failure of California’s Proposition 23 on November 2nd. That initiative would have delayed the implementation of California’s Global Warming Act, AB32, a 2006 piece of legislation, set to take effect in 2012, that will regulate virtually every aspect of California’s economy. California already has the strictest environmental laws in the U.S., if not the world, and AB32 ratchets them all up several notches, by applying the metric of CO2 emissions (or CO2 emissions equivalents and offsets) to laws affecting land use, transportation, energy, manufacturing, agriculture, timber – literally all economic activity. Ironically, climate change alarmists fail to realize that Prop. 23 was demolished because a handful of incredibly wealthy individuals who stand to make billions off of “clean energy” stepped up and donated over $30 million to fund a massive and thoroughly deceptive campaign against it.

One major problem with AB32, and CO2 mitigation laws in general, is they rest on the assumption that by making energy, water, transportation, and land use – all basic resources – cost more, we will stimulate economic growth. This is a ridiculously flawed premise. AB32 will redirect wealth into inefficient uses, redirecting discretionary wealth away from new innovations that would otherwise accelerate developments to raise our quality of life. It will make basic resources cost more, it will create artificial scarcity – this does not cause faster economic growth.

Climate alarmism based on flawed and distorted science. The alarm is promulgated because the policies being designed to supposedly mitigate climate change will result in a huge expansion of government power, corporate monopolies, and benefit other special interest groups such as big labor, big finance, academia, the legal profession, the accounting profession, the insurance industry, and all those once noble high-tech entrepreneurs who have been corrupted and seduced by the prospect of guaranteed profit, captive consumers, and trillions in subsidies. Any conscientious individual, whether they are liberal or conservative, should examine for themselves the premises that underlie the alleged science of climate change. Once they realize there is no environmental benefit that will accrue to climate change mitigation policies, they may start to see the economic and political trends attendant to climate change mitigation in an entirely different light.

Entrepreneurial vs. Casino Capitalism

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This week’s New Yorker editorial “Puppetry” by Hendrik Hertzberg properly takes Fox Commentator Glenn Beck to task for distorting the life-story of financier George Soros. There are plenty of reasons to criticize George Soros, but how he survived the Holocaust as a pre-teen in wartime Hungary is not one of them. What bears mention is the fact that Glenn Beck may have overplayed the “holocaust” card, but Glenn Beck is one man, a frothy, overwrought pundit who offers a lot of useful insights to his viewers, but isn’t always right. Beck may be condoned by his network, but he hardly represents a movement.

It is indeed appropriate for the New Yorker to condemn Glenn Beck for demonizing George Soros, but the New Yorker is being hypocritical. New Yorker writers routinely participate in character assassination when they criticize climate change skeptics, and they too devalue the holocaust, every time they taint anyone who may disagree with the theory that anthropogenic CO2 is going to destroy our planet as a “denier.”

In last week’s New Yorker editorial, for example, entitled “Uncomfortable Climate,” author Elizabeth Kolbert leads off by calling attention to the behavior of Congressman Darryl Issa, who as a teenager was accused of car theft. This, along with the fact that Issa is “one of the richest men in Congress,” precedes Kolbert’s discussion of Issa’s intention to reopen investigations regarding whether or not it is justifiable to regulate CO2 emissions. In her editorial, Kolbert also makes sure to cherry-pick the most easily mocked quotes attributable to Republican members of Congress, ridiculing their Christianity, reminding us how wealthy they all are, deploring that “the recent election represents a new low.”

Kolbert also uses New Yorker as a forum for her to play the holocaust card, as in a March 2009 post entitled “Donating to the Deniers,” a piece where, again, she references a handful of political donations, that altogether amounted to less than $50,000, made by energy companies to politicians who were known global warming skeptics. Is this the best she could do? This scope-insensitivity is typical of alarmist journalists, who apparently either fail to grasp that the money is overwhelmingly pouring into the coffers of the alarmist lobby, or cynically provide these anecdotes to the contrary because they know most readers won’t notice the differences in magnitude.

It is interesting to note that later in the November 29th issue of the New Yorker, after defending financier George Soros in their lead editorial, the New Yorker offers a feature entitled “What Good is Wall Street?“, by John Cassidy. In this lengthy examination of Wall Street, Cassidy makes clear what pretty much everyone in America already knows, which is, as he puts it, “for years, the most profitable industry in America has been one that doesn’t design, build, or sell a single tangible thing.” Does anyone at the New Yorker see the irony – George Soros may as well be the patron saint of Wall Street! Glenn Beck got inappropriately personal regarding George Soros – that isn’t behavior exclusive to Glenn Back, or the right wing – but Beck’s more valid criticisms of big finance, and the larger-than-life individuals who play at big finance, are pretty much in agreement with John Cassidy’s.

As it stands today, Wall Street has sucked the life out of the United States of America, and the worst is likely yet to come. Big finance, along with their puppets in big government and big labor, have dismantled American manufacturing, and suckered us into national bankruptcy. Another of Glenn Beck’s primary insights has been that the notion of right-wing vs. left-wing, Republican vs. Democrats, is nothing but a smokescreen for financial elites to manipulate our government and act contrary to the interests of the American people. The New Yorker would do well to embrace this complexity, because the latest and greatest scam perpetrated by Wall Street on the world is their scheme to CO2 into a trading commodity. This scheme will further enrich big government, big labor, compliant businesses, and, most important to the big finance crowd, it will keep the lights on in lower Manhattan. But it will result in slower overall economic growth, undermine more useful innovation, transfer wealth away from addressing more compelling environmental challenges, depress development of cost-effective energy solutions, stifle the emergence of competitive new companies, empower monopolies, and deny upward mobility to aspiring individuals and emerging nations. It will do NOTHING to change whatever climate destiny nature may have in store for us.

The New Yorker remains my favorite magazine despite having become, over the past six years or so, the intellectual big brother of every left-wing alternative weekly newspaper in America. They are capable of far more nuanced editorial positions. The New Yorker editorial writers should ponder this: Capitalism as practiced by manufacturers and innovators who compete to build things that work better, faster, and cheaper, is the finest engine to uplift humanity ever conceived. Capitalism, on the other hand, as practiced by financiers who create fictitious currencies to gamble with other people’s money – currencies as diverse and fraudulent as derivatives or carbon credits – are another beast entirely. If this 2nd, more pernicious version of capitalism is a casino, and it is, then Wall Street is the house.

Credible Climate Skeptics

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An article entitled “The Danger of Cosmic Genius” appearing in the December 2010 edition of The Atlantic, authored by Kenneth Brower, refers to the brilliant physicist Freeman Dyson, and his “dangerous” skepticism regarding climate change. As Brower puts it, “Among intelligent nonexperts who have weighed in on climate change, Freeman Dyson has become, now that Michael Crichton is dead, perhaps our most prominent global-warming skeptic.”

In an article that exceeds 6,000 words, Brower repeatedly launches scathing attacks on Dyson’s credibility, stating at one point “how could someone as smart as Freeman Dyson be so dumb,” or “many of Dyson’s facts on global warming are wrong… but more disconcerting is the selective way he gathers his information or the peculiar conceptual framework into which he inserts it,” or “how is it possible to misapprehend so profoundly how the real world works,” or “he is emotionally incapable of seeing the true colors of the rampant ingenuity of our species…”

Not content with merely attributing the dangerously delusional nature of Freeman Dyson’s climate skepticism to the apparent failings of his personal emotional and intellectual architecture, Brower then applies what quite likely is a template used to discredit any climate skeptic – especially since some of them, such as Dyson, are too widely respected to be simply demonized. Brower shares these theories, suggesting Dyson may be a “contrarian,” since “physicists, astronomers, scholars of every stripe, have always been charmed by the counterintuitive – and why not, as it so often turns out to be right.” Brower then ventures another theory, “he doesn’t really mean it,” suggesting “it is not always apparent when he is inhabiting some Dali-esque experimental landscape between his ears and when he has touched down on Earth.” Making sure he doesn’t miss anything, Brower continues with an “educated fool” theory, noting that even the brilliant Albert Einstein couldn’t make change, and explaining that “it seems only right that some leveling principle should deprive the geniuses among us of common sense, street smarts, mother wit. It is tempting to try to explaining Dyson this way.” Brower concludes his theories by considering, than dismissing, the possibility that the 86 year old Dyson is becoming senile.

Kenneth Brower is the son of David Brower, a man who actually cared about the environment, instead of our current generation of environmentalists, who have become tools of corporate monopolies bent on controlling global energy output by encouraging us to believe the earth is about to poison itself with CO2. Some of the original Brower comes through when Kenneth Brower admonishes Dyson for his optimism regarding our species, reminding us, among other things, that “many of the large cities of Africa, South America, and Asia are megalopolises of desperate poverty ringed by garbage. Vast tracts of tropical rainforest… disappear annually, burned or logged or mined. Illegal logging is also ravaging the slow-growing boreal forests of Siberia… African wildlife is in precipitous decline…” If only today’s environmentalists would return their focus to these obvious challenges. Instead Brower observes, correctly, that Dyson has compared alarm over climate change to a religion, and turns that around, claiming it is Dyson who is abandoning reason for faith, a faith whose “tenets go something like this: things are not really so bad on this planet. Man is capable of remaking the biosphere in a coherent and satisfactory way. Technology will save us.” As Brower sums it up, “Environmentalism worships the wisdom of nature. Dysonism worships the indomitable ingenuity of Man.” But Brower contradicts himself.

Throughout Brower’s article he provides – in between the slurs and the theories regarding Dyson’s climate heresy – abundant evidence that Freeman Dyson is one of the most capable scientists alive. It is abundantly clear to anyone reading this article – or independently familiar with Freeman Dyson and his body of work – that he is an intensely rational individual, whose conclusions are governed by logic, whose articles of faith are the product of his reason. Listen to these accolades:

“Freeman Dyson is one of those force-of-nature intellects whose brilliance can be fully grasped by only a tiny subset of humanity, that handful of thinkers capable of following his equations. His principal contribution has been to the theory of quantum electrodynamics, but he has done stellar work, too, in pure mathematics, particle physics, statistical mechanics, and matter in the solid state. He writes with a grace and clarity that is rare, even freakish, in a scientist…”

Another prominent climate skeptic, Richard Lindzen of MIT, has argued that climate science is a multi-disciplinary field where it is very unusual, if not impossible, for any single individual to acquire sufficient technical expertise in the diversity of fields necessary to intuitively apprehend what may be actually driving global climate trends. Lindzen claims that many scientists who feel peer pressure to embrace the theory of anthropogenic CO2 driving potentially catastrophic climate change preserve their integrity by limiting their contrarian observations and theories to their own narrow areas of expertise. The glaciologist will deny that glaciers are shrinking worldwide. The atmospheric scientist will point out that the troposphere is not exhibiting temperature trends that reflect what the computer models indicate they should. The oceanographer reminds us that the Pacific Decadal Oscillation will not drive the Arctic to begin to show significant cooling again until 2018. The paleontologist points out we are still emerging from the mini ice age. But none of them challenge the conventional wisdom. This fact – that most scientists are unwilling to risk being politically incorrect with respect to the big picture – nullifies Brower’s point that “he [Dyson] is such a scientific minority on climate change that his views are easy to dismiss.”

And if global climate theories are indeed best ventured by scientists with diverse qualifications, qualifications so diverse, in fact, that it is impossible for one individual can acquire them all, it is disingenuous to suggest Dyson is unqualified to have an opinion on global warming. Does this sound like someone who is not allowed to have a credible opinion on climate change? “Freeman’s gift…it’s cosmic. He is able to see more interconnections between more things than almost anybody. He sees the interrelationships, whether it’s in some microscopic physical process or in a big complicated machine… He has been, from the time he was in his teens, capable of understanding essentially anything that he’s interested in. He’s the most intelligent person I know.”

Brower is not sparing in his discussions of just how powerful and multi-faceted Dyson’s intellect is, saying “His career demonstrates how a Nobel-caliber mind, in avoiding the typical laureate’s dogged obsession with a single problem, can fertilize many fields, in his case particle physics and astrophysics, the history of science, religion, disarmament theory, literature, and even medicine, as Dyson was a co-inventor of the TRIGA reactor, which produces medical isotopes.” This sounds like just the man to take a good look at the current alleged consensus regarding anthropogenic CO2 and its supposed role in inducing catastrophic climate change. Brower – along with his fellows in the AGW alarmist community – simply didn’t get the answer from Dyson that they wanted to hear.

Michael Crichton, who Brower identified as the internationally recognized “non-expert” climate skeptic who Dyson has now replaced, in one of the last public appearances of his life, had this to say about how politicized and corrupted environmental organizations have become, stating “what more and more groups are doing is putting out lies, pure and simple, falsehoods that they know to be false.” Crichton also understood, like Dyson and Brower, that sometimes faith distorts what properly belongs in the realm of science, and had this warning:

“In the end, science offers us a way out of politics. And if we allow science to become politicized, then we are lost. We will enter the Internet version of the dark ages, an era of shifting fears and wild prejudices, transmitted to people who don’t know any better. That’s not a good future for the human race.”

The Hijacked Public Interest in California

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If you consider yourself an environmentalist, and someone who – unlike libertarians – believes in a strong role for government in our lives, it’s hard to watch what has been done to environmentalism and government in California. Environmentalists have been hijacked by the global warming lobby, and our state and local governments have been hijacked by labor unions. And if you don’t accept the premises of California’s environmentalists today – that reducing CO2 emissions is going to address an urgent environmental crisis at the same time as it helps the economy, or the premises of California’s public employee unions – that public employees are NOT over-compensated and therefore we must raise taxes so we can afford to pay them, you may logically conclude that California is akin to an occupied nation.

Notwithstanding the spectacular failure of the Meg Whitman campaign – more on that later – the problem in California politics is simple. The environmentalists get their backing from Wall Street plutocrats, who have correctly identified the opportunity to trade CO2 “emissions credits” and “offset credits” as the biggest opportunity for them to rob from the poor and give to the rich they’ve ever seen. Public sector unions get their backing directly from California’s taxpayers, since these unions pretty much compel California’s public employees to join and pay dues. Estimates of California’s public sector union total political spending reach a half-billion dollars on politics every two year election cycle (ref. Public Sector Unions & Political Spending). And these unions, just like the environmentalists, are best friends of Wall Street – those unsustainable pensions granted unionized public employees, retirement benefits that are anywhere between 3x and 10x more generous than social security – pour far more money into Wall Street pension funds than any other category of investment in America.

Because environmentalists have shifted their concern from the environment to becoming tools for Wall Street CO2 emissions brokers, and because public sector unions have succeeded in empowering public sector workers but have done nothing for the private sector workers whose taxes fund the public sector, these groups no longer operate in the public interest. While fiscal conservatives have been screaming about this for years, even liberals are beginning to see the light – particularly with respect to the antics of public sector unions, but recently, even the environmentalist agenda has begun to concern conscientious liberals who sincerely care about the public interest.

Which brings us to California’s recent election, where Democrats ran the table for higher state office. Republican Meg Whitman made several mistakes – explored adequately elsewhere – but her failure was illustrative of a fundamental reality in California politics: Democrats don’t have to raise money for their candidates from the grassroots, or from independent businesspeople, because they get their money from Wall Street plutocrats who masquerade as environmentalists (note the crushing defeat of Prop. 23 because it threatened their interests), and from public sector unions. And because election laws preclude a wealthy individual from making a substantial donation to a candidate they choose, the only way a Republican can afford to run for higher office in California is if they are themselves wealthy. That is a tough one – how many good candidates are wealthy? How many wealthy people make good candidates? And even if they would do a great job – and Meg Whitman probably would have done a great job – they are tainted by their access to money from the get-go. “Queen Meg.” The irony is almost too much to bear.

For these reasons, candidates in California can’t sit on the fence, nor can they adhere to an orthodox conservative ideology. A successful reform candidate in California will have to swing for the fences, identifying phony environmentalists and insatiable public sector unions as the villains in this drama, and courting liberals alongside conservatives down a path towards restoring a government that acts in the public interest. If California simply implemented a 20% headcount reduction and 20% pay-cut across the board to their public sector employees, put a ceiling of 3x the maximum social security benefit onto their pensions combined with a 50% employee contribution, built 3 nuclear power stations and two more reservoirs, most of California’s economic problems would disappear. People who care about the environment, the dignity of workers, and the public interest in general, should wonder why more politicians aren’t asking for these solutions.

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Fighting Bad Policy With Facts

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A couple of months ago in a post entitled “Inflation, Population & Government,” I criticized California Senator Denham for making the following assertion in a press release: “between 1970 and 2010, for every 1 percent increase in population, our [California’s state government] spending has increased 20 percent.” In reality, if you adjust for inflation, that statement should read as follows: “between 1970 and 2010, for every 1 percent increase in population, our [California’s state government] spending has increased 3.4 percent.”

This is still a shocking statistic. California’s state government grew over the past 30 years at 3.4x the rate of population growth. Why make an unbelievable comment – 20x – when the inflation-adjusted indisputable truth is so dramatic?

Here’s another one, just for the record. In today’s Wall Street Journal, one of my favorite writers, George Gilder, has a guest column entitled “California’s Destructive Green Jobs Lobby.” In this column he makes some fundamental points about California’s failure on Nov. 2nd to pass Prop. 23, which would have slowed down implementation of AB32, the “Global Warming Act” passed by their legislature in 2006, and set to take effect in 2012. To paraphrase Gilder:

  • CO2 is not pollution.
  • Fossil fuel is cheaper and in many respects far cleaner than “alternative energy,” and there is plenty of it available within the borders of the United States.
  • Economic growth depends on basic resources such as energy costing consumers and businesses LESS, not more.
  • “Green plutocrats” ponied up tens of millions and were prepared to spend Prop. 23’s backers into the ground to make sure it was defeated.
  • The reliance on government edict to grow venture-backed “green” companies is undermining and corrupting the most competitive, innovative sector in the U.S. economy, the venture capital industry, with potentially tragic consequences to our national security, technological leadership and economic future.

It is difficult to overstate how much I agree with Mr. Gilder on these points, as any reader of CIV FI knows. That the destroyers of Prop. 23 really believe CO2 is pollution is plausible, although they ought to do their homework because CO2 is not pollution, it is a benign trace gas that plants depend on in order to live and helps make our planet habitable. But how can they possibly think putting California through the hardship of AB32 will actually make a difference in atmospheric CO2 concentrations, or empower anything other than their own financial returns along with enhanced revenues to the public sector? These billionaires were able to persuade economists to release studies claiming that subsidized “green” jobs, producing inefficient, expensive energy solutions, and forcing consumers and businesses to buy these “solutions,” would actually create economic growth. The whole thing is ludicrous. It is laughable. The backers of Prop. 23 should have publicized the names of these plutocrats, challenged their motives, and ridiculed their premises.

Here’s where Gilder got careless, however:

“What is wrong with California’s plutocratic geniuses? They are simply out of their depth in a field they do not understand. Solar panels are not digital. They may be made of silicon but they benefit from no magic of miniaturization like the Moore’s Law multiplication of transistors on microchips. There is no reasonable way to change the wavelengths of sunlight to fit in drastically smaller photo receptors. Biofuels are even less promising. Even if all Americans stopped eating (saving about 100 thermal watts per capita on average) and devoted all of our current farmland to biofuels, the output could not fill much more than 2% of our energy needs.”

Biofuel is indeed inefficient, but it isn’t that inefficient. There are roughly 470 million acres of active farmland in the U.S. (ref. Carrying Capacity Network, “U.S. Food & Land Production“), and bioethanol from corn can yield roughly 500 gallons per acre per year (ref. EcoWorld, “Is Biofuel Water-Positive“). There are roughly 81,000 BTUs of energy within a gallon of bioethanol (ref. “Gasoline Gallon Equivalents“), which means that if you produced corn ethanol on every available acre of farmland in the U.S., you would produce about 19.2 quadrillion BTUs per year. Since we use about 100 quadrillion BTUs of energy per year in the U.S., growing ethanol on every acre of farmland would deliver us about 20% of our total energy needs, not 2%. Gilder dropped a decimal.

The reason to stop California’s global warming act isn’t that alternative energy shouldn’t be promoted. The point is alternative energy, in most cases, is still too expensive to replace conventional energy development. There are parts of the world, such as Brazil – where you can get over 1,000 gallons of ethanol per acre from sugar cane – where biofuel makes economic sense (although the environmental price paid for all that acreage of sugar cane for transportation fuel is another story). There are off-grid applications of solar electricity that also make economic sense. But these are the exceptions, not the rule, and will remain so for a few more decades. All of Gilder’s fundamental points are completely accurate. The idea that we are about to force California’s industry to trade “carbon emissions credits,” so “green” entrepreneurs can make billions, and Wall Street brokerages can rake commissions off of trillions – all on the backs of the people least able to afford this – is truly deplorable.

When the facts are on your side, there is no need to inadvertently exaggerate them. And those who want to impose bad policy onto the backs of honest working people should examine their own premises.

Public Sector Deficits & Global Warming “Mitigation”

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About the same time one might belatedly realize that reducing anthropogenic CO2 emissions will do absolutely nothing to alter or avert whatever climate “change” nature may have in store for us, might also be the time to realize the real reason we have chronic government deficits is because we not only have too many government employees, but we pay them too much. Connecting the dots, on July 2nd, 2008 in a post entitled “Breaking Down California’s AB32 Global Warming Act,” I wrote the following:

“Based on the potential of offset sales, carbon fees, and sales of emissions allowances, one may dismiss claims that AB32 will cost California’s government more than it will bring in revenues. AB32 will potentially cause tens of billions of dollars of net cash per year to flow into California’s public sector. Qualifying municipalities that enforce high density may earn carbon offset fees from polluters, based on how many vehicle miles they can calculate they eliminated through high density zoning. AB 2596 sets the stage for this. Redefining public sector jobs to address global warming mitigation may encompass a huge percentage of the public sector workforce, including construction, infrastructure, education, as well as explicitly environmentally focused agencies. Already California’s 400+ cities, 58 counties, and 32 air quality management districts are imposing new global warming related fees. Since global warming mitigation is a specific program – no vote is required to assess these fees. Auctions of emissions allowances to industry could pour additional hundreds of millions, if not billions, into the public sector each year.

…public sector agencies are salivating over cash flow potential associated with AB32. But why wouldn’t they? Nearly every public entity in California – and elsewhere in the USA – is at risk of bankruptcy, primarily because of grossly over-generous employee compensation, benefits and pensions. Other than carbon-related offset payments, fees and auctions – or massive tax increases – there is no new source of revenue even remotely capable of restoring solvency to public entities. Avoiding public sector reform in general, and avoiding public employee pension reform in particular, is the hidden issue that informs global warming alarm in the public sector.”

Now that California’s Proposition 23 – which would have suspended implementation of California’s Global Warming Act – has failed to pass at the same time as the looming insolvency of public sector employee pension funds is becoming common knowledge – the connection between public sector deficits and the potential revenues associated with global warming mitigation is coming more into focus. Here is more on how AB32 is going to try to rescue the finances of public entities, written in a post last week on CalWatchdog.com entitled “Expect More Population Flight,” by Wayne Lusvardi:

Utility user taxes provide a money lifeline for municipalities to raid water and power utility funds and shift them into their general operating and fiduciary retirement funds. When California’s Green Power law goes into effect in 2012 it is likely that municipal water and power funds will swell and the surplus siphoned into city and county general funds to meet pension obligations. Voters will not have a vote in determining whether existing pension obligations will be met or not. Instead lucrative union pension deals will be buried in increased water and power rates.

This may explain why expensive Green Power is being rolled out so aggressively and so fast over the voices of prominent scientists exposing global warming and C02 pollution as a fraud. Green Power may be a means to bail out broke municipalities before 2015 or 2020 rolls around whichever is the case. Green power could result in 40 percent to 60 percent higher electricity rates coupled with a 15 percent to 30 percent increase in water rates, not including the $44 billion water bond proposed for the 2012 ballot (including bond interest and matching funds).

Despite AB32 being nothing more than a mechanism to transfer wealth from lower and middle class private sector workers into the pockets of public sector workers and “green entrepreneurs” (they are neither), Prop. 23 which would have suspended its implementation was soundly defeated. The reason it was defeated was because its proponents were outspent 3 to 1. And who was it who opposed those evil oil companies? It was wealthy hedge fund oligarchs and “green tech” moguls, abetted by environmentalist “nonprofits” whose boards of directors are almost exclusively populated by trial lawyers, and, imagine this – other oil companies who have sold out. These special interests all know that implementing AB32 will pour more money into their own pockets. Take a look at how many of the super rich threw millions into defeating Prop. 23 in order to protect their financial turf: Ballotpedia Prop. 23

The failure of Prop. 23 is instructive, because it illustrates quite well the accusation by conservatives that the Democratic Party is actually the party of the “ruling class.” Because the incredibly wealthy individuals who stepped up to annihilate Prop. 23 – and they could have spent far more than the $20M+ that they donated without blinking – are nearly all Democrats. They are so wealthy that buying off the public sector workers, who in California make nearly twice as much on average as private sector workers, is more important to them than fostering an equitable society where hard work and merit can still allow people who aren’t spectacularly lucky or supremely intelligent to get ahead financially. As long as society’s administrators and enforcers – unionized public employees – can afford to pay 60% more for electricity and 30% more for water, who cares about all the other little people?

The failure of Prop. 23 is also instructive because it shows, yet again, nauseatingly, where the money really is in the debate regarding what causes climate change. Everything associated with climate change “mitigation” is regressive. It creates new – absolutely absurd, nonsensical “CO2 credits” – classes of assets for Wall Street brokerages to collect trading fees on, it creates new legal frontiers for attorneys, new carve-outs for insurance companies, new accounting rules for CPAs, heavily subsidized new “green” industries to attract entrepreneurs and investors who used to believe in competition, and it pours money into the public sector, alleviating the need for public sector union reform. Everyone wins except the ordinary Californian.

For more on AB32 and the real reason for public sector deficits, read “Implementing California’s Global Warming Act,” and “Public Employee Compensation.”

California’s Proposition 23

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Back in 2006 California’s Governor Schwarzenegger signed AB 32, the “Global Warming Act,” which set the goal of reducing California’s “greenhouse gas emissions” to 1990 levels by 2020. The bill was set to become implemented in 2012, and for the past few years, the bureaucrats at the California Air Resources Board have been working feverishly to come up with specific regulations. What they have produced is a monstrosity.

To start to come to grips with what AB 32 is going to do to California, read CARB’s own material, their “Climate Change Scoping Plan,” their “Updated Economic Analysis of California’s Climate Change Scoping Plan,” and their “ENERGY 2020 Model Inputs and Assumptions.” You can get an attempt at a summary if you read the post “Implementing California’s Global Warming Act.”

Since the most recent publicized polling results indicate that voters are split roughly 50/50 on Prop. 23 (ref. the Sept. 24th LA Times article “Proposition 23 poll shows a dead heat among California voters“), it is worthwhile to examine the arguments against Prop. 23 that are currently bombarding voters. A good place to review these arguments would be on the “fact sheet” put forward by the group “Californians to Stop the Dirty Energy Proposition.” Here are two principal arguments – with rebuttal:

1 – Prop. 23 would create more air pollution in California and threaten public health.

This argument is based on the proposition that CO2 is pollution, because the intent of AB32 is to regulate CO2 emissions, and little else. California’s regulatory agencies have done a reasonably good job at cleaning up genuine air pollution, and they need to finish the job there, instead of focusing on CO2 emissions. CO2 does not harm the respiratory system in the quantities it currently appears in the atmosphere, or in any conceivable quantities it ever may increase to in the atmosphere. On the other hand, plants cannot live without CO2. To suggest that suspending a measure that regulates CO2 emissions is going to increase pollution is grossly misleading.

2 – Prop. 23 would kill clean technology jobs, innovation and billions of dollars of investment in California.

This “fact” as well is almost completely false. California’s gubernatorial candidate Jerry Brown made a clever argument in favor of retaining AB32 last week in his final debate with candidate Meg Whitman, when he said we need AB32 to stay on the books to reduce “regulatory uncertainty.” This is a good argument applied to a bad law. AB32 – read the scoping report – doesn’t create regulatory certainty in any of the cleantech areas that matter. If you want to encourage development of low carbon fuel, then pass a law requiring a certain percentage of transportation fuel contain lower levels of carbon. This will stimulate innovation in 3rd generation biofuels, which is a good idea. If you want to encourage development of cost-competitive solar energy, the leave in place California’s renewable portfolio standard. If you want to encourage energy efficiency retrofits, then implement tax credits to stimulate activity in that area. You don’t need AB32 to stimulate green jobs.

Opponents of the Prop 23 actually claim that suspending California’s Global Warming Act will increase energy costs and harm California’s economy. This is precisely incorrect. Alternative energy still costs considerably more than conventional energy, and this disparity would be even greater if conventional energy technologies weren’t tied up in environmentalist lawsuits.

Instead of carpeting the landscape with wind generators – talk about pollution, what about the aesthetics of all these wind generators? – Californians should be developing a diverse assortment of conventional energy solutions – more hydroelectric power (which would also create more water supplies), nuclear power, a liquid natural gas terminal, and offshore drilling. Currently Californians pay, on average, about $0.15 per kilowatt-hour, while in states where conventional energy is not overregulated, consumers pay less than half that amount.

AB 32 will further reduce California’s ability to use conventional energy, and this will cause energy prices to go up, not down. And because AB 32 will regulate virtually everything we do, under the assumption that restricting road construction and land development – and adding new regulations to virtually all industries, from farming to manufacturing – will lower the “carbon footprint” of the state, everything will get more expensive. You don’t have to be an economist to grasp this simple economic truth – if you make all the basic resources more expensive, land, water, transportation and energy – then you will make it harder for businesses to compete. And if they can’t compete, they won’t grow. Many of them will leave.

The reason Prop. 23 has attracted so much opposition is because AB 32 appeals not only to the environmentalists – a lobby that has been entirely hijacked and discredited by the global warming alarmists – but the political left, who see another opportunity to expand government, the public sector unions, who never saw a government expansion they didn’t like, and, tragically, the Silicon Valley investors and entrepreneurs who have decided they don’t want to make money any more the old fashioned way, where they create superior innovations that people choose to purchase, but instead want government regulations to force people to buy their “smart meters” and other cleantech innovations.

It is easy to demonize “Big Oil” for standing up to this lobby, but nobody else has come forward, despite the fact that most members of the business community realize the harm AB 32 will wreak on California. A more relevant question is why California’s own big oil company, Chevron, is sitting on the sidelines. Chevron’s craven failure to stand up for its own interests as well as the interests of consumers is a bigger indictment of big oil than Valero and Tesoro’s courage in their decision to fight. There aren’t many companies left in California who will stand up for capitalism and for rational environmental management. This is the core problem, because with California’s voters deadlocked on Prop. 23 despite the avalanche of propaganda against it, Californians are clearly receptive to the truth, if someone will bother to provide it to them.

Who Are The Carbon Criminals?

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At first glance, one might think “Carbon Criminals” is meant to describe the people who extract carbon-based fuel, sell it to the public at a competitive price, and in the process, allegedly edge the planet towards a catastrophic environmental collapse. But perhaps one would be wrong.

There’s nothing wrong with questioning our inordinate dependence on fossil fuel, or taking measures to improve the process of extracting and burning fossil fuel in order to protect our environment. To fail to regularly and scrupulously upgrade safety procedures from top to bottom, throughout the fossil fuel industry, may indeed be considered criminal. And as our technology improves and our prosperity enables us to do more, it is arguably criminal to fail to make the burning of fossil fuel a cleaner proposition each and every decade. But the real criminals are not the industrialists who have made carbon based fossil fuel the engine of civilization – the real criminals are the faceless bureaucrats and cynical opportunists who have convinced us we have to auction and trade carbon emissions allowances and carbon offset credits.

Most people still haven’t thought about how this entire scheme is going to work. And even those who have given this considerable thought, such as the bureaucrats at the California Air Resources Board, are often still in the dark on the details. Read their “Scoping Plan,” and draw your own conclusions as to their readiness to dramatically transform our economy, our property rights, and our lifestyle. Here’s a few of the concepts that need to be mastered, then applied into law, in order for “carbon trading” to become a reality:

(1) Emission Allowances – this is a permit that will be sold by the government to any business that emits more than 25,000 tons of CO2 per year. This would be all power utilities, large manufacturers, and most large agribusinesses, to name a few. These permits would have an initial price, still to be determined, that the State would collect from these businesses in order for them to continue to emit CO2 “pollution.” How are these emissions calculated? Some variables are relatively straightforward, such as smokestack emissions. But it won’t end there. Dozens of “CO2 equivalents,” such as the methane emitted from dairy farms, other livestock operations, and even the flooded fields of rice growers, and on and on, will also have to be measured and calculated. This becomes a very subjective, and very expensive procedure. But don’t worry, State approved consultants will be available to perform this calculation.

(2) Carbon Trading – this is the procedure whereby businesses that have failed to reduce their CO2 emissions would buy permits from other businesses who have managed to reduce their CO2 emissions by more than necessary. This is supposed to “put the market to work,” and indeed, it will put a lot of brokers and IT professionals to work, along with armies of attorneys and accountants. As the value of an emission allowance drops each year – so we can supposedly ratchet down our collective CO2 emissions to prehistoric levels within a few decades – companies will have the opportunity to purchase emissions allowances and “offsets” from qualified sellers, in order for them to continue to emit CO2. Alternatively, they can invest money in non-CO2 emitting sources of power – wind power, methane digesters, etc.

(3) Carbon Offsets – these are projects designed to sequester carbon or reduce carbon. A new forest that sequesters carbon in the wood of the trees. A renewable energy project that emits zero carbon. A methane harvester that captures the methane that bubbles up from a waste water pond at a dairy farm, or out of a landfill. To the extent these projects reduce annual CO2 emissions, they are eligible to sell these “offsets” to people who need more permits to emit CO2.

(4) “Additionality” – oops, don’t try to sell a carbon “offset” if you were going to build that zero CO2 emitting hydroelectric dam anyway, or if you were going to reforest your timber property anyway. For that matter, if the price of electricity gets high enough to justify any non-CO2 emitting source of energy, solar, wind, on strictly financial grounds, meaning that you would have built it anyway, then it no longer qualifies as an “offset” project, because it no longer meets the essential criteria of “additionality.” No subjectivity there.

If you don’t accept the premises being used to justify all this – that CO2 is a deadly gas, that fossil fuel is nearly depleted – than it is easier to see what a magnet this whole scheme is for white collar criminals – and their deadly counterparts in the underworld. But even if you do believe carbon is something we need to wean ourselves of, if you ponder the level of corruption that implementation will breed, you may have second thoughts. And as food for 2nd thoughts, consider these articles – just the tip of the iceberg – that describe the ongoing exploitation of the carbon scare by criminal elements:

Deutsche Bank, RWE Raided In German Carbon Fraud Probe

Carbon Trading Complexity Putting Strains on Market Reputation

Anti-fraud investigators swoop on EU emissions traders

U.N. panel suspends two more carbon emissions auditors

Spain Police Arrest Nine In CO2 Tax Probe

Carbon market chaos strikes again

Scandal brewing in the Euro carbon credits market

CDM crackdown continues as board rejects fresh Chinese wind projects

Carbon Credit fraud causes more than 5 billion euros damage for European Taxpayer

That green energy scandal

British carbon traders charged with money laundering relating to alleged carousel fraud

It is difficult to read these stories, all recent, all from reputable sources, without feeling a tremendous apprehension for our future. There is a Citizen’s Initiative, the California Jobs Act, slated for the November 2010 ballot that will suspend implementation of California’s 2006 Global Warming Act, set to take effect in 2012. When the opponents of this measure pull out all the stops, accusing proponents of being shills for “big oil” (despite the fact that most oil companies have come around, and plainly see the dollar signs inherent in embracing the whole global warming scheme), remember who they are: high-tech moguls who want to build the surveillance devices that will manage every kilowatt we use and every mile we drive, public sector bureaucrats and white collar professionals who see the biggest new source of revenue since the enactment of the federal income tax nearly 100 years ago, and, of course, the Wizards of Wall Street, who will milk this for billions upon billions. For more, read “Implementing California’s Global Warming Act.”

Who are the real carbon criminals?