Soccer Dad

It's easy being green. Not.

We are at the edge of environmental catastrophe. But fortunately there's a way out. Not only is there a way out, but we will become a more prosperous society doing so. All we need to do is to follow the wise counsel of our president and we will emerge from the dangers presented by global warming, a healthier more prosperous society.

Thus spake Thomas Friedman.

In his column yesterday, Moore's Law and the Law of More the prophet of the Green Economy, Thomas Friedman tells us how we can save ourselves.

Have no doubt, the president is off to a terrific start: His stimulus package will provide an incredible boost for all forms of renewable energy. The energy bill being drafted by House Democrats Henry Waxman and Ed Markey contains unprecedented incentives for energy efficiency and clean-tech innovation. And the ruling from Mr. Obama's Environmental Protection Agency saying that carbon dioxide is a pollutant that threatens public health was courageous and historic.

But while all of that is hugely important, we must not fool ourselves, as we have done for so many years: Price matters. Without a fixed, long-term, durable price on carbon, none of the Obama clean-tech initiatives will achieve the scale needed to have an impact on climate change or make America the leader it must be in the next great industrial revolution: E.T., or energy technology. At this stage, I'd settle for any carbon price mechanism -- cap and trade, fee-bates, carbon tax and/or gasoline tax -- as long as it real and provides consumers and investors a long-term incentive to shift to clean cars, appliances and buildings.

There are, of course, dangers and, worse, naysayers.

Have no doubt: From right-wing tea parties to coal states to manufacturers, there is going to be a no-holds-barred campaign to kill any carbon price signal, including cap and trade. A vast army of lobbyists is already working against it. Only President Obama can blunt this. Only he has the platform for framing and elevating the issue properly and taking it to the American people with the passion and clarity needed to move the country. It will take more than one speech.

He presents this as if those promoting our green renewal have no stakes - other than the good of mankind - in the new, green economy. They may not be nearly so noble.

So what must our messianic President do to usher in this new era? Make a speech of course! It would start like this:

"Right now we're paying a huge price -- a tax -- for everyone trying to achieve more in an unsustainable way. But the 'More Tax' is not imposed by the U.S. government. It is a tax imposed by the market and will continue rising indefinitely as more and more people want more and more stuff. It will steadily drive up gasoline prices, home heating prices and factory electricity prices. But because this 'More Tax' is set by the market and not the government, many opponents contend that there's nothing to be done: 'Oh, $4.50 a gallon gasoline -- that's just the market at work. We can't do anything about that.' And then all that tax money out of your pocket goes to enrich oil companies and petro-dictators.

Now note, the only tax Friedman doesn't object to is one that goes to government. I really have no problem with enriching oil companies, though I'd obviously rather not support petro-dictators. But this is an amazing bit of Orwellian manipulation. By definition, a tax is a fee imposed by government, not by the market.

This gives away Friedman's game. The only way to achieve his goals is through massive government intervention. For Friedman the government's interest in this is benevolent and beneficent and presumably unerring in all that it does.

My brother in law pointed out a letter in response to the recent NYT Magazine profile of Freeman Dyson, who is described as a global warming heretic. The letter reads:

The problem is, only sensational exaggeration makes the kind of story that will get politicians' -- and readers' -- attention. So, yes, climate scientists might exaggerate, but in today's world, this is the only way to assure any political action and thus more federal financing to reduce the scientific uncertainty.

The frankness of the letter is bracing. We don't know the results of global warming, so we must scare people into doing something!

It's a point that Robert Samuelson makes today in Selling the green economy.

To comply with the House bill, CO2 emissions would have to be about 3.5 billion tons. The claims of the Environmental Defense Fund and other environmentalists that this reduction can occur cheaply rely on economic simulations by "general equilibrium" models. An Environmental Protection Agency study put the cost as low as $98 per household a year, because high energy prices are partly offset by government rebates. With 2.5 people in the average household, that's roughly 11 cents a day per person.

This is remarkably cheap. And given that the alternative is environmental apocalypse, everyone should rush to give the government the requisite authority to make these changes. Friedman presents the green economy as cheap and easy and absolutely necessary. Of course he uses the last of those qualities as a reason to promote the green economy and the first two as reasons that no one should object to them! It will be cheap and easy, because it's necessary. But the real world is not so accommodating.

The trouble is that these models embody wildly unrealistic assumptions: There are no business cycles; the economy is always at "full employment"; strong growth is assumed, based on past growth rates; the economy automatically accommodates major changes -- if fossil fuel prices rise (as they would under anti-global-warming laws), consumers quickly use less and new supplies of "clean energy" magically materialize.

There's no problem and costs are low, because the models say so. But the real world, of course, is different. Half the nation's electricity comes from coal. The costs of "carbon capture and sequestration" -- storing CO2 underground -- are uncertain, and if the technology can't be commercialized, coal plants will continue to emit or might need to be replaced by nuclear plants. Will Americans support a doubling or tripling of nuclear power? Could technical and construction obstacles be overcome in a timely way? Paralysis might lead to power brownouts or blackouts, which would penalize economic growth.

And of course if "green jobs" end up being unproductive or counterproductive Friedman's scheme won't work. Samuelson concludes:

The selling of the green economy involves much economic make-believe. Environmentalists not only maximize the dangers of global warming -- from rising sea levels to advancing tropical diseases -- they also minimize the costs of dealing with it. Actually, no one involved in this debate really knows what the consequences or costs might be. All are inferred from models of uncertain reliability. Great schemes of economic and social engineering are proposed on shaky foundations of knowledge. Candor and common sense are in scarce supply.

Fifteen years ago, Thomas Friedman was the prophet of Middle East peace. He predicted a new Middle East if those stubborn Israelis would just give the Palestinians everything they wanted. When Arafat rejected Barak's deal at Camp David in 2000, Friedman said Barak's offer was just an opening bid! Undaunted by his misreading of Arafat, now Friedman is prophesying again. He is the service of the messianic leader who will lead us to environmental paradise. If only we listen and submit to our great leader. If only reality doesn't intrude. Again.

Posted by SoccerDad at April 27, 2009 5:44 AM