It is time to stop quivering in our boots in pointless fear of the future and just roll up our sleeves and build it.
- Ray Pierrehumbert

Saturday, November 7, 2009

Against Waxman-Markey

A few months ago when some scientists, notably Jim Hansen, and less notably myself, were expressing doubts about cap-and-trade, the more politically active of our acquaintance were urging us to STFU, since we are presumed totally unrealistic about how Washington works. Notably it was David Roberts (in combination with the impenetrability of the bill's language) that convinced me to drop the matter.

Suddenly, David is running a convincing video that makes the exact case that people like Hansen were making in the first place, viz., that the whole cap-and-trade idea is too complicated and legalistic to work, and that the likelihood of market distortions and loopholes was much larger than for a simple tax-and-rebate scheme.

To David's credit, (and not so much to Obama's) this is a free-speech issue for him. The video's authors are on the federal payroll and have been asked to take it down, even though they were explicit about not speaking for their employer.

But I think we ought to pay attention to the substance of what they say, as well.

I think we ought to be in a hurry to get things right, not in a hurry to "do something, anything". It's better to do something next year that works than something this year that backfires.

If the way the video describes things is right, which seems entirely plausible to me, this is classic politics, getting buy-in from enough constituencies by buying them off. Democrats seem to think buy-in through buy-off is the way to get things passed. It reminds me of how I see some real mistakes working in scientific funding, actually. If everybody gets a piece of the pie, there's nobody left to object. Unfortunately we are left, it seems, with action that is only symbolically effective.

OK, the US congress can only do things in odd-numbered years. (They ought to take a leaf from the Texas State Legislature's book, and not bother to show up in election years at all.) So maybe we wait two years. Maybe that will give us time to do something effective. It's not the end of the world, with probability 0.97 or so...

The issue is which path probabilistically yields the best long range outcome. Yes, there are risks with each further delay, but a broken bill is likely as bad as a delay or worse. Now that Copenhagen is not a big deal anymore, there's no real rush to produce a bill in the US. Let's drop Waxman-Markey and its variants, and take our time to try to come up with something that works.


King of the Road said...

It's hard to engage in tea leaf reading, but I think that Morano, et al, are correct in one thing (and Monbiot agrees): the battle for the hearts and minds of the populace is being lost.

I agree that doing something symbolic but ineffective is highly counterproductive and likely to result in severe disillusionment and increased cynicism (if such a thing is possible).

But it's hard for me to see how public sentiment will allow a good bill to be passed in two years if present trends continue. Solution? Don't have one.

Michael Tobis said...

Well, the good news is that the hearts and minds are not going to be lost forever. The bad news could well be how much evidence it will take to win them over.

Michael Tobis said...

Let me add that if it were merely symbolic I'd put up with it. The question is whether it is worse than symbolic, i.e., a giveaway to special interests that makes no progress.

I don't know for a fact that it's that bad but it seems plausible.

bi -- International Journal of Inactivism said...

Or is it the public that needs convincing? Maybe the public is in support of a certain broad direction. But I'm sure the details of whatever bill comes up next will not be decided by the public, but by a group of policy wonks in some office.

I mean, try imagining a street demonstration with people shouting slogans like "CAP-AND-TRADE BAD! CARBON TAX GOOD!" ... Nah, doesn't work. Really, this stuff is for wonks.

-- bi

Oale said...

Anna Haynes said...

> "it's hard for me to see how public sentiment will allow a good bill to be passed in two years if present trends continue."

...which is why we need to build political will, which we do by neutralizing the founts of public confusion, which we do by convincing editors that if they're going to print climate disinfo in letters and op-eds, they need to - at that moment, not later - pair it with a science-oriented rebuttal, which serves as a pre-emergent herbicide to keep the seeds of public confusion from sprouting. Confusion creates paralysis, as the PR folks well know.

marcus said...

I'm sorry, but the attached video has not impressed me (and not just because they spent the first minute trying to tie cap-and-trade to the Challenger disaster). "The Big Lie" basically ignores the fact that a price from cap-and-trade is not really different from a price from a tax. It ignores the 80% of Waxman-Markey that _isn't_ the cap, and includes incentives for CO2 sequestration, nuclear, energy efficiency, etc. It uses the EU ETS as an example of how cap-and-trade sucks, but Waxman-Markey doesn't have 100% free allowances, unlike the original ETS - and many of the free allowances that W-M does grant go to regulated entities, and free allowances will be phased out over time. The original ETS did have large fluctuations in the initial period, but that was a start-up problem. As a preemptive solution, Waxman-Markey has a price floor that rises at 5% per year plus inflation. Mainstream economists aren't at all as negative about the cap-and-trade as the video claims.

Offsets are a problem: they do depend on how "MRV" (measurable, reportable, verifiable) is run. But Waxman-Markey does have a 5:4 requirement for offset credits, the quantity of offsets are capped, there's still that price floor, and not all offsets are flawed - there _do_ exist cheap CO2 mitigation opportunities internationally, and we should be pressing to get those addressed somehow (I agree that project-based offsets is not my preferred mechanism). Carbon taxes don't always help either, if they push us from gasoline into biofuels because carbon emissions from land-use change isn't priced.

I do agree that my preferred policy would be a price combined with a rebate, but I think Waxman-Markey is a very reasonable alternative that addressed most of the problems that were seen in the ETS, and is much more than _just_ a cap-and-trade bill. And Waxman-Markey _has_ passed the House, unlike a hypothetical carbon tax-and-rebate. And let me reiteratre: price floor, $10, rising at 5% plus inflation.

Hank Roberts said...

Carbon offsets are supposed to be beyond what's being done.

Their examples are big and important ones. I hope this stays available and gets wide attention.

These people are doing the right thing with this video.

Dano said...

I, personally, think the lobbyists won and f-d up the bill so much that they ruined it. That is how DC works. So we have further delay and the FUD purveyors win. Is that what happens?

Nonetheless, a straight tax IMHO is the way to go. Much harder for the industry shills to get traction on this one.



Hank Roberts said...

That's a really good video by those attorneys. I hope it stays available.

More comment from me over there:

"... comment is awaiting moderation.
November 8th, 2009 at 12:00 pm

> Michael, what are you, a “delayer”?

Poor quality snark. Tobis is serious; I think he’s right. I’m sure he’s honest. And this kind of snarkiness is just offensive and pointless. It’s the people who don’t go along with business as usual and politics as usual who point out the failings of this kind of ‘compromise’ — Tobis asks the question, is this the best we can do? I’d word it differently — is “good enough” good enough here, or is it actively subverting what’s needed?...."
-------end excerpt----

And then, over there, I go on at tedious length in support of the attorneys' point in their video about fake offsets.

Hank Roberts said...

I do think Marcus's points are good and are good reasons to support what's there to support now.

But with continued attention to the details. Look for tactics like the ways that polluters have sleazed around the regulations on acid rain cap'n'trade; look very carefully for a long time, to be sure how the details work out.

Lobbyists load up "best they can manage" bills with stuff that's there for a friendlier administration to use to gut the intent down the line. "Loopholes."

thingsbreak said...

You know how the Superfreaks thought geoengineering was obviously preferable to mitigation, because they were looking at it in a superficial, idealized light that ignored all of its downsides whereas they looked at mitigation "warts and all"?

Michael Tobis said...

TB raises an interesting analogy.

But until now the answer was "we're the politics experts, all you other guys need to pass us the ball because we need to get something done by Copenhagen".

Now Copenhagen is a dud. So I'd like to see the politics experts explain to the rest of us why this thing is a net benefit

There's another another analogy: "You guys are not the economists; thanks for the inputs, now let us figure out the value proposition".

The fact is that climate science is a science in a sense that political science or economics is not. Specifically there are demonstrably false statements in climate science. Lots of them these days...

Let's see the arguments spelled out. If it's part of politics that arguments can't be spelled out, that we only get to see an output document in an approximation of a human language, then there's little reason to trust that the process will do better in the future than it has in the past.

Where is this Change we were expecting, then?

Where, more specifically, is the refutation of Williams & Zabel? And now that we are working on COP 16 at best, why don't we engage the conversation we have been avoiding?

keith said...


Your comment was approved promptly over at my site.

Here's an excerpt of response, which seems appropriate to reprint here:

You obviously miss the humor of my throwaway line. Perhaps I should have included a link to the “delayer” term to indicate the context of my “snarkiness.”

I believe that Michael will not take offense and that he will “get” my gentle barb, which is directed at someone else, not him.

For the record, I’m a big fan of Michael’s blog, precisely because he is so thoughtfully serious.


Lastly, I hope that the points Michael makes in this post--as opposed to EPA's action--are the subject of a vigorous debate.

Hank Roberts said...

Another plan -- correlated with some already discussed:

"... The attached paper is the result. It has taken over a year of development and research, including considerable feedback from colleagues and modelling by C-Roads, the climate simulator developed by MIT, the Sustainability Institute and Ventana Systems.

We were actually surprised by the outcome of our work, which showed that not only is One Degree and 350ppm possible, it is surprisingly achievable and practical. It certainly requires that we act very soon and that we act with a level of determination and commitment not seen since WWII, but it can be achieved. In recognition of this comparison, we called our paper The One Degree War Plan. It is a plan that shows what humanity can achieve – and we believe will achieve – when it develops a rational response to the climate threat.

We are releasing our paper for public reaction and comment...."

Hat tip for that to:

rustneversleeps said...

We are going to be pricing more externalities than just carbon. If the "Planetary Boundaries" paper is at all accurate, we'll need to price reactive nitrogen fairly soon. We are already "pricing" various bioaccumulative heavy metals and POPs, principally via regulation. And we cannot rule out some sort of giant "whoops! we missed that!" unknown arising that we'll quickly have to price. I am thinking about the near-miss catastrophe we had with what-were-supposed-to-be benign CFC's.

My point is that we are going to pay a heavy price in complexity to deal with all these "priced externalities". We need to take a long view and try to minimize that complexity and keep it as flexible as possible.

That to me argues that you want to favour various taxes at the "point of entry" to the economic system (i.e. at well/minehead, pipeline or import sites, a la Hansen's suggestions for carbon; at Haber-Bosch sites for nitrogen, etc.)

Having multiple carbon/nitrogen/X/Y/Z/t.b.a. cap&trading markets - or expanding on the 500+ regulated substances already on the books in the US - sounds like a potential economic/societal/governance nightmare to me... There is abundant literature on what a drag the complexity of the current tax code is on many economies... To think that W-M isn't going to impose terrific complexity costs seems to be in la-la land...

I think we should be thinking tax primarily because of "simplicity". Other arguments about relative efficacy, "win-ability", rent-seeking are subordinate, imo.

That said, I do have one residual concern about "taxes" versus cap&trade schemes. I think they probably would work "best" with externalities that "flush" through the global system fairly quickly. For these, I think a tax is ideal for fine-tuning the level of throughput to some acceptable limit. But the "trillionth tonne" concept for carbon - where we have a fixed "budget" of emissions basically forever. For that kind of a problem there seems to be some natural logic to using a "cap" and managing from the quantity side rather than the price side...

I guess that's why they call these "wicked problems"... But, on balance, my vote/intuition still favours "tax"...

One weird thing about the Williams-Zabel video... I kept thinking I was vaguely hearing the intro to Rod Stewart's "Do ya think I'm sexy?" in the background, starting about 8:45... just me, I'm sure...

gravityloss said...

"Now Copenhagen is a dud."
Can you elaborate?

Thank you Marcus, for the good writeup. Do you have a blog? Hmm, checking climatebytes, not updated recently... What should people read to get a grip?

Btw regarding the next more recent post:Wiener, not Weiner. In my mother tongue the diftongs are an important expression and we are hypersensitive...

Michael Tobis said...

Re Weiner vs Wiener, indeed I just noticed it myself. Apologies to all, especially whiners from Vienna.

Hank Roberts said...

As to politics as usual, here's a data point:

"... On Tuesday, Congressional Democrats, with the White House’s consent, voted to gut the Sarbanes-Oxley Act, the post Enron-WorldCom law passed in 2002 to prevent corporate accounting tricks and fraud. Arthur Levitt, the former Securities and Exchange Commission chairman, told me on Friday it was “surreal” that Democrats were now achieving the long-held Republican goal of smashing “the golden chalice” of reform. If investors cannot have transparency, Levitt said, “the whole system is worthless.”

The system is going back to the way it was with a vengeance, against a backdrop of despair...."

Corporations, being immortal, can afford to wait patiently while the people who oppose them grow old and are replaced, then ditch the controls; in their longer term view, being regulated for a decade or two is negligible.

Auditors? They just follow "generally accepted accounting practice" -- business as usual.

Hank Roberts said...

Mr. Kloor, what's the value of "debate" in scientific questions?

Earlier Michael Tobis said... "the hearts and minds are not going to be lost forever. The bad news could well be how much evidence it will take to win them over."

"Debate" doesn't work for that. A very slow exchange with time to check citations, as John Mashey has suggested, might actually permit addressing the real evidence. But that would be vigorous in depth of search, not vigorous in flash and spark.

gravityloss said...

Marcus, could you post that in your blog so it would be more readily linkable? Maybe together with the video? Or a transcript?

Steve Bloom said...

Sometimes a cigar isn't just a cigar.

As I've stated elsewhere, what the Obama admin is about is trying to get the strongest possible bill they can, recognizing that Congress won't produce anything very good, in order to provide political cover for stronger actions by the administration and to maintain forward progress internationally. Key to the stronger actions is preserving a full scope of action pursuant to the CO2 endangerment findings (both the atmospheric one and the forthcoming ocean acidifcation one), and of course those actions will have a lot to do with how things proceed internationally in the near future.

IMHO the official request to take down the video was just a way of making sure that it got seen widely. Carol Browner and Lisa Jacckson aren't political novices. They have to say nice things about the bill publically, but at the same time want it known that it's far too weak to contemplate removing the President's authority under the endangerment finding(s).

If they wanted someone to crack the whip on those lawyers (my neighbors!), this guy was the worst possible choice. It's very good news if his appointment is any reflection of the overall approach the administration is taking to the second-tier science and environment jobs. (Among other things Blumenfeld takes a considerable share of the credit for San Francisco's recently-passed best-in-the-nation mandatory recycling law.)

Dean said...

I think that one of the most important questions is whether the failure of one of the current bills makes something better more likely, when ever they get to it. Emphasis on "better". As much as I know about politics, I don't see it.

Maybe Copenhagen isn't the issue, but do we wait two years and hope there is more support, or is it like health care - we wait 15 years, and it still ain't very good.

There is a line beyond which the idea should just get dropped. But I'm not ready to draw that line at carbon tax vs trading. Taxes can also have plenty of exemptions.

Brian said...

I think it's better to reference the Williams/Zabel white paper rather than a video:

I find the paper unconvincing for reasons posted here:

The short version is that their proposal has not undergone the legislative sausage-making process yet, and there's no reason I can see that it would in the end be any better.

David B. Benson said...

A poll suggests that many Americans want some action regarding climate change: