Q: As we get closer to the United Nation’s conference on climate change in Copenhagen and nations begin setting their agendas, are their goals realistic? Last week, the U.S. and China each announced their emissions target goals. Are they big enough?
Throughout the global warming debate, there have always been those willing to put on an extra-thick pair of rose-colored glasses when it comes to China. China is going green, we are repeatedly told, and thus America needs to catch up in committing to reductions in carbon dioxide and other greenhouse gas emissions. The latest announcement, ahead of Copenhagen, that China may agree to first-ever emissions targets is the latest such instance.
It is time for a reality check on China before the American delegation puts its own proposal on the table in Denmark.
The reality is that China’s carbon dioxide emissions will continue heading sharply upward. China is building new coal-fired power plants at a furious pace as well as expanding its coal mining operations. It is buying up fossil fuel reserves at top dollar all around the world. If the Chinese are really going to reduce emissions, then why continue to spend billions every year on stuff they’ll soon have to stop using? The U.S. Energy Information Administration has looked beyond the rhetoric and assessed China’s actions, and it projects Chinese emissions rising nine times faster than America’s through 2030.
Nor is China denying this reality. As with past announcements from China, there is less here than some would like to believe. First, the targets are emissions intensity targets - emissions per unit of economic output. In other words, emissions can still go up as long as China’s economy grows. Given recent growth rates, China’s targets suggest little if any change from business as usual. China also made clear that its compliance is not subject to independent verification. To ask the question whether China would simply cheat if in their economic interest to do so is to answer the question. Further, despite holding $2.3 trillion in foreign exchange reserves, China insists on developed world aid for its troubles, and in amounts neither the U.S. nor the E.U. has shown any willingness to provide.
On the other hand, President Obama’s pledge ahead of Copenhagen — a 17 percent emissions cut within a decade — would not be a charade. If the U.S. were to ratify a treaty with this target, it would have the force of law, and the resultant energy price hikes would become a painful reality here for consumers and businesses. A Heritage Foundation analysis of similar energy rationing targets in the House Waxman-Markey bill (17 percent target for 2020 on its way to 83 percent by 2050) found higher energy costs for a household of four over $800 per year and an average of over 1 million net job losses. And all for emissions reductions that would be swamped by increases from China alone, not to mention other fast-developing nations.
Whether or not the pre-Copenhagen proposals from China and the U.S. create momentum for a major agreement, one thing is clear: they shouldn’t.
Originally appeared in The Washington Post.
Laurie Williams and Allan Zabel, two lawyers currently working at the Environmental Protection Agency (EPA), spoke out against cap and trade in their Washington Post column. Zabel has first hand experience with cap and trade, overseeing California’s cap and trade and offsets programs. The article is full of good reasons why a cap and trade program to reduce greenhouse gas emissions is a bad idea. They also highlight how it differs substantially from the acid rain cap and trade plan, which proponents tout as a reason to cap and trade CO2:
Cap-and-trade means a declining “cap” on total emissions, while allowing trading of pollution permits. Confidence in the certainty of declining caps is based on the mistaken assumption that cap-and trade was proven in the EPA’s acid rain program. In fact, addressing acid rain required relatively minor modifications to coal-fired power plants. Reductions were accomplished primarily by a fuel switch to readily available, affordable, low-sulfur coal, along with some additional scrubbing. In contrast, the issues presented by climate change cannot be solved by tweaks to facilities; it requires an energy revolution through investments in building clean-energy facilities.”
The authors explain, however, that these minor modifications and cheap alternatives aren’t available when it comes to America’s energy use:
The biggest obstacle to this revolution is that uncontrolled fossil fuel energy remains much cheaper than clean energy. Cap-and-trade alone will not create confidence that clean energy will become profitable within a known time frame and so will not ignite the huge shift in investment needed to begin the clean-energy revolution. In recent interviews, even the economists who thought up cap-and-trade have said they don’t believe it’s an appropriate tool for climate change.”
The brunt of the authors’ objection to a cap and trade system has to with the offset provision. If a coal plant believes it’s cheaper not to reduce its carbon footprint, it can pay someone else to do so. For instance, a company could pay a logger not to cut down trees, or they could pay someone to grow trees since trees absorb carbon. Or a developing country can build a cleaner coal plant saying they were going to build a dirtier one while cashing a check from a developed country for the alleged carbon offset. Williams and Zabel make the same case with the forest owner:
[I]f the landowner wasn’t planning to cut his forest, he just received a bonus for doing what he would have done anyway. Even if he was planning to cut his forest and doesn’t, demand for wood isn’t reduced. A different forest will be cut. Either way, there is no net reduction in production of greenhouse gases. The result of this carbon “offset” is not a decrease but an increase — coal burning above the cap at the power plant.”
And the offset program creates perverse incentives and unintended consequences:
[C]onsider the refrigerant HCFC-22, the manufacture of which creates an extremely powerful greenhouse gas as a byproduct. This byproduct is relatively easy and cheap to destroy, and governments could require refrigerant manufacturers to do just that. But offset investors have persuaded regulators to approve destruction of the byproduct as a carbon offset, making it twice as profitable to sell byproduct destruction as it was to sell the refrigerant.”
Designed to be a cost containment measure, experience with offsets have led to nothing but fraud with no reduction in carbon dioxide. The architects of cap and trade legislation claim that farmers and landowners with forestland to be the big winners from the offset program. But the economic pain they suffer, along with everyone else, will be much greater than any offset check they collect.