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The Climate Change Climate Keeps Changing, but the Carbon Tax Is Eternal

Tuesday, December 3, 2013

Confronted with more data that contradict climate change orthodoxy, climate change alarmists still advocate a carbon tax, but with new rationales.

As the old saying goes, you don’t need a weatherman to know which way the wind blows — or doesn’t blow nearly as much as in earlier years, as the data show for tornado activity in the United States, and for tornadoes and cyclone activity more generally. The global warming/climate change industrial complex, confronted with growing bodies of scientific analysis and data both inconsistent with climate change orthodoxy and difficult to dismiss, slowly is coming unglued, producing analyses that conflict and ancillary effects — in particular, the collapse of “carbon trading” programs — not helpful to the cause.

Consider a brief summary of the recent evidence on global climate patterns and attendant effects. There has been no temperature trend over the last 15 or so years despite increasing atmospheric concentrations of carbon dioxide and other greenhouse gases (GHG). This actual record has belied the predictions of the models, yielding some uneasiness among the proponents of the conventional view. More generally, the earth has been emerging from the Little Ice Age since roughly 1850. Accordingly, there has been an upward long-term temperature trend: temperatures increased roughly from the middle of the 19th century through the eruption of Krakatoa in 1883, and then from about 1910 through about 1940. They were roughly constant through about 1980, increased until 1998 (a year with a strong El Niño), and have exhibited no trend since then. How much of this long-term upward trend is anthropogenic? No one knows, and those who claim to know… don’t.

The past one to two years have set a record for the fewest tornadoes ever in a similar period — despite ever-increasing atmospheric concentrations of GHG — and, since 1950, there has been no trend in the frequency of strong (F3 to F5) tornadoes in the United States. The number of wildfires is in a long-term decline; it is our misguided refusal to thin underbrush in government forests that has exacerbated the large-scale fire problem. It has been about eight years since a Category 3 or higher hurricane landed on a U.S. coast; that long a period devoid of an intense hurricane landfall has not been observed since 1900. The 2013 Atlantic hurricane season was the least active in 40 years; there were zero major hurricanes, although few conclusions should be drawn from a single year of observations. With respect to the worldwide data on hurricane basins, there has been no trend in the frequency or intensity of tropical cyclones. A widely accepted and documented measure of tropical cyclone energy is near its lowest level since reliable measurements began by satellite in the 1970s. An increase in such hurricane activity in coming decades is far more likely to reflect a reversion toward the long-term mean rather than the effects of GHG concentrations. There is no long-term trend in sea-level increases despite rising atmospheric concentrations of GHG. The record of changes in the size of the Arctic ice cover is far more ambiguous than often asserted. The Palmer Drought Severity Index shows no trend over the record period beginning in 1895 in terms of drought; more areas in the United States have experienced an increase in soil moisture than a decline. Flooding in the United States over the last 85-127 years has not been correlated with increases in carbon dioxide concentrations.

There has been no temperature trend over the last 15 or so years despite increasing atmospheric concentrations of carbon dioxide and other greenhouse gases.

The Intergovernmental Panel on Climate Change (IPCC) is gradually releasing its fifth assessment report (AR5), and chapter 12 of the Working Group I section, “The Physical Science Basis,” makes for some interesting reading. Consider for example Table 12.4 (p. 12-78), titled “Components in the Earth system that have been proposed in the literature as potentially being susceptible to abrupt or irreversible change.” Here is what IPCC has to say about nine such potential apocalypses (all italics in the original, percentage definitions added):

•    Collapse of the Atlantic Meridional Overturning Circulation (a circulating current in the north Atlantic in which waters at high latitudes are cooled, sink and flow toward the equator, are warmed, rise to the surface, and then flow once more toward higher latitudes): Very unlikely (0-10 percent) that the AMOC will undergo a rapid transition (high confidence).
•    Ice sheet collapse: Exceptionally unlikely (0-1 percent) that either Greenland or West Antarctic Ice sheets will suffer near-complete disintegration (high confidence).
•    Permafrost carbon release: Possible that permafrost will become a net source of atmospheric greenhouse gases (low confidence).
•    Clathrate methane release: Very unlikely (0-10 percent) that methane from clathrates will undergo catastrophic release (high confidence).
•    Tropical forests dieback: Low confidence in projections of the collapse of large areas of tropical forest.
•    Boreal forests dieback: Low confidence in projections of the collapse of large areas of boreal forest.
•    Disappearance of summer Arctic sea ice: Likely (66-100 percent) that the Arctic Ocean becomes nearly ice-free in September before mid-century under high forcing scenarios such as RCP8.5 (medium confidence).
•    Long-term droughts: Low confidence in projections of changes in the frequency and duration of megadroughts.
•    Monsoonal circulation: Low confidence in projections of a collapse in monsoon circulations.

So the worst of the potential horror stories is the possible disappearance of the summer arctic ice, an outcome that IPCC now views only as “likely” with “medium confidence,” and only under an RCP (representative concentration pathway) of 8.5 watts per square meter in 2100, the highest of four World Meteorological Organization (WMO) radiative forcing assumptions about changes in the balance between incoming and outgoing radiation caused by increases in greenhouse gas concentrations, that is, the strongest assumption made by the WMO about the warming effect of GHG.

How wise is it to attempt to reduce the future effects of international price increases by imposing one upon ourselves in advance with a carbon tax?

There is the further matter that U.S. emissions of GHG are about 17 percent of global GHG emissions, a proportion that is declining steadily. Accordingly, if we apply the widely accepted MAGICC climate model developed at the National Center for Atmospheric Research, and if we assume the IPCC midrange emissions path, an immediate cut in U.S. emissions by half would yield a reduction in global temperatures of 0.1 degrees Celsius 100 years from now. Because annual temperature variability is greater than that figure, the predicted effect could not be measured reliably.

The futility of the decades-long multinational negotiations over GHG reductions is blatant; the 19th (!) Conference of the Parties of the UN Framework Convention on Climate Change has just ended, and the only real agreements reached were on the restaurants to be visited during the 20th and 21st COPs in Lima and Paris, respectively, in 2014 and 2015. China is building about 500 coal-fired plants over the next decade. India is not far behind. GermanyGermany! — is scheduled to begin operation of 10 new coal-fired plants (with a combined capacity of about 8,000 megawatts) over the next two years.

Let us assume that the entire industrialized world — not just the United States — was to reduce GHG emissions by 80 percent below 2005 levels by 2050, and let us assume the highest IPCC climate sensitivity parameter (4.5 degrees for a doubling of CO2 concentrations). If, as above, we use the NCAR MAGICC model, the result is: by 2050, temperatures would decline by 0.1 degrees Celsius, and by a bit less than 0.3 degrees by 2100. How much economic pain is that worth?

The Evolving Rationales for a Carbon Tax

That is why the futility of unilateral U.S. “carbon” policies is obvious. And so one might assume that proposals for U.S. GHG policies would exhibit some modesty about the supposed attendant environmental benefits.  

And one would be wrong. This is particularly the case for a carbon tax, the rationales for which are shifting even as they prove permanent: however weak the case, proposals for a carbon tax are eternal. The more-recent justifications are:

•    Tax revenue: a reduction in budget deficits and a simplification of the tax code.
•    Energy security.
•    An alignment of auto and truck demand with the requirements of the new fuel-economy standards.

The budget deficit argument is deeply problematic, in that it is virtually certain that the losers will have to be compensated in order to engender a bargaining equilibrium in Congress. Such compensation easily might yield an increase rather than a reduction in the complexity of the tax code, and the net effect of such a policy change on budget deficits — particularly over time — is far from clear. More generally, the deficit  is a huge problem — it is a symptom of massively wasteful resource use by the federal government — but, again, it is far from obvious that a carbon tax is an efficient tool with which to address it. Given the need for the losers to be compensated, and given the economic distortions that a carbon tax would engender, it is not difficult to envision a carbon tax that makes the economy worse off (smaller) on net, particularly given that the carbon tax would shift resources from the private sector to the government; it is reasonable to assume that the marginal value of resource use in government is lower than that of the private sector. In plainer English: more would be lost than gained, and it is far from clear that a carbon tax would create fewer distortions than the tax instruments that it might replace. More generally, deficit reduction means that Congress would impose pain on the current generation without shifting some substantial part of it onto the future generations that are the presumed beneficiaries of the policy. Why would a Congress driven by the election cycle do that?

There is no long-term trend in sea-level increases despite rising atmospheric concentrations of GHG.

In the context of fiscal discipline, a more serious argument might be that voters will not support less spending (or slower spending growth) unless they are confronted with an increase in the cost (price) of government. (To the extent that debt finance shifts those costs onto future generations, it shields current taxpayers from those true costs). The problem is that a carbon tax is very likely to be hidden in the cost of goods and services, thus adding to the “fiscal illusion” problem: the cost of government to a substantial degree is obscure, an effect resulting from a number of tax and other policies that hide rather than clarify that cost. An effort to increase the degree to which the true cost of government is perceived by voters is more likely to be served with an increase in the income tax, or perhaps other taxes that are more visible and that cannot be shifted easily.

The energy security argument simply is incorrect. Oil prices largely are independent of the amount of imports because there can be only one price in the world market, abstracting from such minor complexities as transport costs. That is why the 1973 Arab OPEC oil “embargo” against the United States and the Netherlands had no effect at all; both countries were able to buy oil in the international market on exactly the same terms as all others, because the international price mechanism had the effect of reallocating oil, thus neutralizing the intended effects of the embargo. (The gasoline lines and other adverse market effects were caused by the price and allocation controls — not the embargo — as was the case in 1979, when there was no embargo). A carbon tax, or any policy reducing imports, would not change this economic reality at all. Except in the case of a naval blockade or other such physical interdiction of supplies, the degree of energy “security” is independent of the level of imports, however counterintuitive that eternal truth may seem. And in any event, how wise is it to attempt to reduce the future effects of international price increases by imposing one upon ourselves in advance with a carbon tax?

With respect to the pursuit of a more “efficient” auto and truck fleet: Why not simply mandate a return to bicycles and oxen? More rigorously: What, precisely, is the argument that the fuel-consumption choices of the market are wrong in some sense? Haven't the pollution control regulations and standards internalized those externalities? The “energy efficiency” rationale for a carbon tax — and for any number of policies both in effect and proposed — is far weaker than commonly assumed.

As each of such rationales is debunked in turn, it is not difficult to predict that others will be promoted instead. Such is life inside the Beltway, in which efforts to redistribute wealth are defended on other grounds supposedly more high-minded. A carbon tax would be a system of redistribution par excellence. That is why proposals for such a tax will be with us for a very long time, despite the shifting science underlying the global warming/climate change debate. The more things change…

Benjamin Zycher is a visiting scholar at the American Enterprise Institute.

FURTHER READING: Zycher also writes “The Unbearable Lightness of the Climate Change Industrial Complex,” “‘Carbon Pollution’ and Wealth Redistribution,” “Would a Carbon Dioxide Tax Be ‘Efficient’?” and “The ‘Science’ of Global Warming, Part 2.”  Kenneth P. Green contributes “The ‘Science’ of Global Warming, Part 1” and “Dissecting the Carbon Tax.” Ronald Bailey asks “Carbon Taxes versus Carbon Markets: What’s the Best Way to Limit Emissions?” Mark J. Perry finds that “U.S. Carbon Emissions Fell Last Year to the Lowest Level since 1994.” James Pethokoukis adds “Using a Carbon Tax to Implement Energy Deregulation” and “Could a Carbon Tax Work in the Real World?

Image by Dianna Ingram / Bergman Group

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