Saturday, December 17, 2016

Trump’s Secret Weapon To Reverse Obama's Climate Policy








How Obama’s Climate Rules Might Unravel

In this newsletter:

1) Trump’s Secret Weapon To Reverse Obama's Climate Policy
Bloomberg Government, 12 December 2016 
 
2) How Obama’s Climate Rules Might Unravel
Bloomberg, 15 December 2016
 
3) Reminder: Experts Debunk Obama’s ‘Social Cost Of Carbon’ Estimate — It Might Be Negative
The Daily Caller, 6 July 2016
 
4) Mark Mills: U.S. Frackers Beat Putin's Hackers
RealClearWorld, 14 December 2016
 
5) Judith Curry: The Latest Climate ‘Conspiracy Theory’
Climate Etc. 15 December 2016
 
6) And Finally: ‘Mammon Is Coming Over To Our Side’: Green Mentality In The Age Of Trump
London Evening Standard, 15 December 2016

Full details:

1) Trump’s Secret Weapon To Reverse Obama's Climate Policy
Bloomberg Government, 12 December 2016   
Catherine Rolfe
 
If this all holds, the oil business is going to be well represented in the administration of President-elect Donald Trump. Exxon’s Rex Tillerson at State. Texas’ Rick Perry at Energy. Oklahoma’s Scott Pruitt at the EPA.
 
Each of these candidates has deep, long-lasting ties to the industry. Each can rattle off the benefits of the U.S. production boom without a moments delay. And each is going to bring that bone-deep understanding to their job. What exactly that will mean for policy, will not always be straightforward. We discuss one aspect below in a section about the always entertaining Social Cost of Carbon.
 
But here’s one other thing to think about:
 
Much is being made in the initial news stories about Tillerson’s ties to Russia. But, Tillerson is also an evangelist for fracking, horizontal drilling and U.S. production. And the U.S. fracking boom is not something beloved in Russia; Russian media has invested a lot of time investigating problems blamed on fracking. Low prices brought about by the U.S. shale gale is bad news for Moscow — and this talk at the Council on Foreign Relations in 2012 shows that Tillerson has a nuanced view of the foreign policy impacts of the U.S. production boom. [...]
 
TRUMP TEAM MEMO’S HIDDEN GEM
 
Catherine Traywick’s scoop that Trump’s transition team was seeking to identify staff members involved in promoting President Obama’s climate agenda deserves to be readand re-read. It’s a fascinating look inside the nuts and bolts of this very unique transition.
 
In a section about the Social Cost of Carbon, one set of questions stood out to us: “Did DOE pick the discount rates to be used with the IAMs? What was DOE’s opinion on the proper discount rates used with the IAMs? What was DOE’s opinion on the proper equilibrium climate sensitivity?”
 
OK, this is super wonky. But it deserves a bit of pondering. Many of the advocates close to the transition are saying the incoming administration should pull carbon regulation up by the roots, and overturn EPA’s endangerment finding that CO2 is a pollutant and needs to be regulated under the Clean Air Act. Doing so would seemingly lead to the reversal of many rules, including the Clean Power Plan. But, that’s also both a radical move and one that would be challenged in court.
 
Another possibility would be for Trump’s wonks to review the calculations for the Social Cost of Carbon, which is used by agencies across the government in determining whether measures to curb carbon emissions are worthwhile. The 2010 version from the Obama White House set a range of values for the price, which would increase over time. This is important because a greater climate benefit would justify regulations that cost more, e.g. tighter caps on emissions from power plants.
 
The Obama administration updated its calculations in 2013, but the analysis has come under continual criticism from business groups and Republicans in Congress. (In fact, it has also been criticized by environmental groups for being too weak.) Here’s the thing: Figuring out what the accurate current cost should be for a unique, long-term risk is not a straightforward task.
 
When Obama’s team did it “we tried to make decisions and assumption behind a veil of ignorance,” University of Chicago economist Michael Greenstone, who was in the administration then, told me. But one thing that couldn’t be hidden was the impact of the discount rate, which is basically establishing how much more to value immediate income compared to what is possible in the future. OMB used different discount rates — 5%, 3%, 2.5% — to get a range of values, and then did some kind of funky averaging.
 
For a sense of how big a deal this is: According to the 2013 report, in 2020 the SCC using a 5% discount rate is $12; using a 2.5% rate it’s $65.
 
If that all sounds convoluted and complicated, well, it is. And that’s how this relates to the Trump team. They could come, announce a reevaluation of the SCC, and then put the range at 5% — or 7%. That would turn a price that’s pushing broad changes in everything from microwave ovens to coal leasing decisions to one that would have practically little or no impact on policy. A 7% discount rate, which has been used by EPA for other regulatory analysis, could actually lead to a *negative* carbon cost.
 
Oh, and the discount rate is just one way the SCC could be reconfigured. (See the question above about climate sensitivity.)
 
This change to the SCC makes sense for another reason. Listen to Trump discussing climate change with the New York Times: “It also depends on how much it’s going to cost our companies.” Lowering the SCC means lowering the costs to companies, such as power producers and refineries.
 
Full post 
 
2) How Obama’s Climate Rules Might Unravel
Bloomberg, 15 December 2016
Matthew Philips, Mark Drajem and Jennifer A Dlouhy
 
Obama used an arcane number to craft his regulations. Trump could use it to undo them.
 
In February 2009, a month after Barack Obama took office, two academics sat across from each other in the White House mess hall. Over a club sandwich, Michael Greenstone, a White House economist, and Cass Sunstein, Obama’s top regulatory officer, decided that the executive branch needed to figure out how to estimate the economic damage from climate change. With the recession in full swing, they were rightly skeptical about the chances that Congress would pass a nationwide cap-and-trade bill. Greenstone and Sunstein knew they needed a Plan B: a way to regulate carbon emissions without going through Congress.
 
Over the next year, a team of economists, scientists, and lawyers from across the federal government convened to come up with a dollar amount for the economic cost of carbon emissions. Whatever value they hit upon would be used to determine the scope of regulations aimed at reducing the damage from climate change. The bigger the estimate, the more costly the rules meant to address it could be. After a year of modeling different scenarios, the team came up with a central estimate of $21 per metric ton, which is to say that by their calculations, every ton of carbon emitted into the atmosphere imposed $21 of economic cost. It has since been raised to around $40 a ton.
 
This calculation, known as the Social Cost of Carbon (SCC), serves as the linchpin for much of the climate-related rules imposed by the White House over the past eight years. From capping the carbon emissions of power plants to cutting down on the amount of electricity used by the digital clock on a microwave, the SCC has given the Obama administration the legal justification to argue that the benefits these rules provide to society outweigh the costs they impose on industry.
 
It turns out that the same calculation used to justify so much of Obama’s climate agenda could be used by President-elect Donald Trump to undo a significant portion of it. As Trump nominates people who favor fossil fuels and oppose climate regulation to top positions in his cabinet, including Oklahoma Attorney General Scott Pruitt to head the Environmental Protection Agency and former Texas Governor Rick Perry to lead the Department of Energy, it seems clear that one of his primary objectives will be to dismantle much of Obama’s climate and clean energy legacy. He already appears to be focusing on the SCC. […]

Still, by narrowing the calculation to the U.S., Trump could certainly produce a lower cost of carbon. Asked in an e-mail whether the new administration would raise the discount rate or narrow the scope of the SCC to the U.S., one person shaping Trump energy and environmental policy replied, “What prevents us from doing both?”
 
Full story
 
3) Reminder: Experts Debunk Obama’s ‘Social Cost Of Carbon’ Estimate — It Might Be Negative
The Daily Caller, 6 July 2016
Michael Bastasch
 
A soon-to-be-published paper challenges the Obama administration’s so-called “social cost of carbon” estimate, which puts a monetary value on the supposed future damages from global warming.
 
But the new study’s authors not only say the administration’s “social cost of carbon” (SCC) is overblown, they also argue it might actually be negative based on observed temperature increases, not just climate models. That means there’s actually benefits to emitting carbon dioxide.
 
“The resulting Social Cost of Carbon (SCC) estimates are much smaller than those from models based on simulated parameters,” wrote Ross McKitrick, an economist at the University of Guelph, along with David Kreutzer and Kevin Dayaratna, both economists at the conservative Heritage Foundation.
 
McKitrick’s study applied a recent study of climate sensitivity to two climate models used by federal agencies to estimate the SCC. In one model, the “SCC falls by 30-50% depending on the discount rate,” they noted, while in a second model “average SCC falls by over 80%.”
 
Most shockingly, when McKitrick and his coauthors analyzed the government’s so-called FUND model, they found it “yields a substantial (about 40 percent or more) probability of a negative SCC through the first half of the 21st century.”

The new study calls into question the science used by the Obama administration to come up with its SCC estimate, which is used by federal agencies to justify huge monetary benefits from reducing CO2 through regulations.
 
In 2013, the administration raised the SCC to $35 per metric ton.
 
That increased measurement of the supposed damages from emitting CO2 into the atmosphere was used to help justify Environmental Protection Agency regulations on emissions from power plants. EPA says its so-called Clean Power Plan would yield “climate and health benefits worth an estimated $55 billion to $93 billion per year in 2030.”
 
McKitrick and his coauthors argue the SCC doesn’t take into account empirically-based analyses of how sensitive the climate is to CO2. Their study incorporated a 2015 study by climate scientists Nic Lewis and Judith Curry, which found doubling atmospheric CO2 levels would only yield 1.64 degrees Celsius of warming — less than what most climate models assume.
 
Full story

4) Mark Mills: U.S. Frackers Beat Putin's Hackers
RealClearWorld, 14 December 2016
 
We are supposed to believe that Russian President Vladimir Putin and U.S. President-elect Donald Trump have a budding bromance, as it is called, because Trump made a few off-hand comments during the campaign. And so the trope now is that Putin so preferred Trump that he may have even helped hack a salutary election outcome? If you want to ask our intelligence agencies what’s going on, let’s try an intelligent question. What single thing matters the most to Russia? It is money, not rhetoric. To imagine that any Russian leader, never mind Putin, would be swayed more by the appearance of conversational bonhomie than by hard cash is, to put it kindly, silly. 
 
Four facts illuminate the realities of where Russia’s preferences reside. All of the salient information emerges from petroleum domains.
 
First, the price of oil matters to Russia. Half of Russia’s gross domestic product and more than 70 percent of its export revenues come from selling oil and natural gas. That money not only powers the Russian economy, it is key to that nation’s ability to finance expensive foreign adventurism from the Middle East to Ukraine. Today’s low prices are depriving Russia of more than $150 billion every year; even in Washington, that’s real money. But in equivalent terms, that would be like wiping $1.5 trillion from the U.S. economy.
 
Second, America’s private-sector shale industry was the direct and indisputable trigger for the global petroleum price collapse. Thousands of small and mid-sized companies — it was not “big oil” that created the shale revolution — added more oil (and natural gas) to global markets in a shorter period than at any time in the past half century, anywhere.
 
American frackers came out of nowhere — i.e., they emerged out of private-sector innovation on private land, not from government subsidies and preferences — to go from near-zero revenues to $150 billion per year in sales in just a half dozen years or so. To put that in perspective, the global smartphone industry, which emerged around the same time, went from zero to $70 billion per year of sales over the same period.
 
Third, candidate Hillary Clinton made clear, repeatedly, her plans to throttle the shale industry when she said: “So by the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place.” Clinton promoted the focus-group-created phrase of becoming a “clean energy super power.” Got it: message received. But Putin is not afraid of American windmills and (Chinese) solar panels robbing him of cold hard cash. Trump, on the other hand, not only boisterously supported shale, but a recent leaked transition-team memo makes clear that policy changes are likely to follow the bluster. 
 
Fourth, consider a relevant off-hand comment earlier this year from Harold Hamm, CEO of Continental Resources, who, most people know, was a vigorous Trump campaign supporter and advisor. Noting that frackers had single-handedly doubled America’s total oil production, Hamm said: “We can double it again.” This may be the single most frightening set of words Putin saw in 2016. There are no technical or resource constraints to doubling it again. Indeed, while little-noticed in the general media (you can bet Putin’s advisors know), progress in shale tech has doubled cost-efficiency and practically promises a shale 2.0 resurgence — provided regulators don’t stifle the industry. Imagine, quelle horreur, that our government might actually streamline procedures to accelerate a second boom.
 
In this context, consider that Scott Pruitt is Trump’s nominee for chief of the Environmental Protection Agency. This prospect has alarmed extreme environmentalists since Pruitt, the shale-friendly attorney general of the great state of Oklahoma, is a fierce opponent of EPA overreach and exactly the kind of person that Russia’s oil oligarchs would prefer not to see in control of the regulatory brakes.
 
The geopolitical implications (never mind the domestic economic benefits) of expanding U.S. shale capabilities should be obvious. Not only would increasing shale output keep downward pressure on prices, but as Sen. Lisa Murkowski (R-Alaska), chairman of the Senate’s Energy and Natural Resources Committee, earlier observed: “Many U.S. allies and trading partners are interested in purchasing American oil to diversify away from Russia, Iran, and other problematic sources.” 
 
As my lawyer friends say, I rest my case.
 
Mark P. Mills is a Manhattan Institute Senior Fellow and author of Expanding America's Petroleum Power: Geopolitics in the Third Oil Era. The views expressed here are the author'sown.
 
5) Judith Curry: The Latest Climate ‘Conspiracy Theory’
Climate Etc. 15 December 2016
 
Guess who the new climate ‘conspiracy theorists’ are?
 
When I first saw this published in the WaPo, I thought it was a joke: Why I’m trying to preserve federal climate data before Trump takes office.  Excerpts:
 
Trump is serious about overtly declaring war on science. This isn’t a presidential transition. It’s an Inquisition. It’s a 21st-century book burning. The incoming administration is likely to be willfully hostile toward the scientific process, with far-reaching implications.
 
One of the most tangible consequences of sharp cutbacks in federal funding for climate science is the potential loss of critical data — whether by neglect or malice — that underlie global efforts to understand our climate system. By all accounts, that’s exactly what Trump and his team want: Ignorance of how human actions are affecting our planet makes it easier to maintain the status quo.
 
‘Saving’ climate data
 
WaPo has another article on the topic: Scientists are frantically copying U.S. climate data, fearing it might vanish under Trump. Excerpts:
 
Alarmed that decades of crucial climate measurements could vanish under a hostile Trump administration, scientists have begun a feverish attempt to copy reams of government data onto independent servers in hopes of safeguarding it from any political interference.
The efforts include a “guerrilla archiving” event in Toronto, where experts will copy irreplaceable public data, meetings at the University of Pennsylvania focused on how to download as much federal data as possible in the coming weeks, and a collaboration of scientists and database experts who are compiling an online site to harbor scientific information.[…]
 
Michael Halpern, deputy director of the Center for Science and Democracy at the advocacy group Union of Concerned Scientists, argued that Trump has appointed a “band of climate conspiracy theorists” to run transition efforts at various agencies, along with nominees to lead them who share similar views.
 
“They have been salivating at the possibility of dismantling federal climate research programs for years. It’s not unreasonable to think they would want to take down the very data that they dispute,” Halpern said in an email. “There is a fine line between being paranoid and being prepared, and scientists are doing their best to be prepared. ... Scientists are right to preserve data and archive websites before those who want to dismantle federal climate change research programs storm the castle.
 
To be clear, neither Trump nor his transition team have said the new administration plans to manipulate or curtail publicly available data. But some scientists aren’t taking any chances. […]
 
JC message to the alarmed scientist/advocates:
 
Get over it, your side lost.  Changes of Presidential administrations occur every 4 or 8 years, often with changes in political parties.
 
Get busy and shore up your scientific arguments; I suspect that argument from consensus won’t sway many minds in the Trump administration.
 
Overt activism and climate policy advocacy by climate scientists will not help your ’cause’; leave such advocacy to the environmental groups.
 
Behave like a scientist, and don’t build elaborate conspiracy theories based on vague conflicting signals from the Trump administration.  Stop embarrassing yourselves; wait for the evidence.
 
Be flexible; if funding priorities change, and you desire federal research funding, work on different problems.  The days of needing to sell all research in terms of AGW are arguably over.
 
Open your minds to different perspectives and interpretations of scientific evidence.
 
If you are advocating for policies, do some serious homework about the policy process, economics, and unintended consequences of technologies and policies.
 
Understand that climate policies are not the only, or even primary, driver for energy policy.
 
Full post
 
6) And Finally: ‘Mammon Is Coming Over To Our Side’: Green Mentality In The Age Of Trump
London Evening Standard, 15 December 2016
Rosamund Urwin
 
[…] If we’re going to decarbonise the economy, I think we need a new coalition — one that is more suited than Swampy. It could involve religion: both the Pope and David Attenborough — as close as many secularists get to having a God — have called on us to do more to tackle climate change. 
 
Mammon is coming over to our side too, with businesses increasingly realising they have to adapt and mitigate risk. Shell has invested in a new form of wind energy that uses high-altitude kites. Google says it will run entirely on renewable energy by next year. Our side has money — Bill Gates is launching a $1 billion fund to invest in clean, sustainable energy — and it has glamour too: Leonardo DiCaprio went to Trump Tower to try to persuade the President-elect that man-made climate change is real. 
 
DiCaprio gave Trump a documentary on global warming. Unless it rubs off, this group will all share a common enemy: a White House as ecologically aware as a plastic-bag factory. If we do want to save the planet, Trump’s victory has to ignite a fire — one that isn’t burning with fossil fuels....

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.

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