The Carbon Tax Scam

Anyone who questions the validity of Bruce Yandle’s Bootlegger and Baptist theory of Public Choice needs to look no further than the Climate Leadership Council and its carbon dividend proposal which is now be flacked by Americans for Carbon Dividends—AFCD—which is co-chaired by former Senators John Breaux and Trent Lott.

The carbon dividend proposal, designed by James Baker and George Shultz, would impose a carbon tax—they call it a fee– on all fossil fuels and then rebate the revenue on an equally to all Americans on a monthly basis. The program would be administered by the Social Security System. The implementation of the carbon tax would lead to the phasing out of regulations that are intended to reduce carbon dioxide emissions.

This proposal is supported by major corporations and distinguished Americans such as Ben Bernanke, Martin Feldstein, and of course, James Baker and George Shultz. On the surface the proposal appears quite reasonable. It is not. To quote, erroneously, Yogi Berra, “In theory, theory and practice are the same. In practice, they are not.”

The flaws in the proposal are many. To begin with the carbon tax is based on an assessment of the damages caused by using fossil fuels—the Social Cost of Carbon. Damages are derived from complex Integrated Assessment Models –IAM. MIT’s Robert Pindyck said “IAM-based analyses of climate policy create a perception of knowledge and precision that is illusory, and can fool policy-makers into thinking that the forecasts the models generate have some kind of scientific legitimacy.” He also said that “calling these models close to useless is being generous. “The reason for such harsh criticism is that many of the parameters and functional forms contained in models are arbitrary. The damage function tied to the relationship between temperature increases and GDP is based on climate sensitivity which we know very little about. The IPCC sensitivity estimated range varies by a factor of three.

So, why do economists and corporations support something derived by piling assumptions on top of assumptions? Economists rightly believe that a market based solution to climate change is preferable to command and control regulations, even if damages are uncertain and the size of a carbon tax is as well. CO2 emissions are seen as a bad, so taxing them is good and the tax will stimulate innovation. In the case of corporations, they realize that Congress will not enact a clean and simple tax and legislation to eliminate CO2 regulations. Politics will shape the size of the tax and its implementing legislation. Corporations want to “be at the table” as legislation is drafted and also get the PR benefits of supporting action to solve the climate change problem. Having two former senior senators leading the advocacy campaign will provide the “seat at the table”.

The carbon dividends scheme is a perfect example of the Bootlegger and Baptist theory. The whole thing is a scam!

Sea Level Rise: A Little Perspective

According to the recently released Climate Change Research Program report–CSSR—“ global average sea level has risen by about 7–8 inches since 1900. … Human-caused climate change has made a substantial contribution to this rise since 1900, contributing to a rate of rise that is greater than during any preceding century in at least 2,800 years. ….Global average sea levels are expected to continue to rise—by at least several inches in the next 15 years and by 1–4 feet by 2100. A rise of as much as 8 feet by 2100 cannot be ruled out. “

This assessment is consistent with the conclusion of the most recent IPCC report: “Over the period 1901 to 2010, global mean sea level rose by 0.19 [0.17 to 0.21] m. (7+inches) The rate of sea level rise since the mid-19th century has been larger than the mean rate during the previous two millennia.”

These conclusions are both definitive and scary. They bring to mind pictures that have been published of the Washington Monument and New York City being seriously flooded. But such certitude goes well beyond what we know.

Raising a cautionary warning often results in being labeled a skeptic who is a tool of the fossil fuel industry. While that is a diversionary tactic, that reality makes it important to support caution with sources who are not viewed as skeptics and who are above reproach.

One such source is Professor Carl Wunsch, recognized as one of the world’s leading oceanographers. He is on the MIT and Harvard faculties In a briefing to EPA, he made a number of points that undermine expressions of certitude. “Sea level has been rising for about 16,000 years. In the last interglacial (period) it appears to have been a few meters higher than today.” According to Wunsch, sea level measurements have to be divided into two periods—before and after 1992 when satellite altimeters became the measurement technique of choice. Before 1992, attempts to determine average sea level changes relied on tide gauges and changes in temperature and salinity. But these attempts have been controversial because of the distribution of measurements, calibration of the devices, and interpretation of density changes.

While altimetry is the most accurate way to measure sea level changes, it is not without its own challenges. These include atmospheric factors, orbits, tides, and rotation wobble among others. Correcting these requires a high degree of accuracy to avoid interpretive errors.

Given the array of measurement challenges mentioned by Wunsch, he cautioned, “Global mean sea level is almost surely rising. Historical data are not adequate to compute accurate global averages. No mathematical trick compensates for missing data. Present multidecadal estimates of global averages have an element of fantasy about them.”

Last year, NOAA published a paper on sea level rise–NOAA—that contained a range for sea level rise in 2100 that went from a low of less than .5 meters to 2.5 meters. The importance of the NOAA estimate is that it demonstrates how complicated understanding of the ocean is and the uncertainties involved in predicting future sea levels. A major uncertainty is ice sheet melts. Perhaps the best example of that uncertainty is the variability that the IPCC puts around ice sheet melt in Antarctica. The error bars show that the ice sheet could grow as well as lose mass. In addition to melt, climate conditions like El Nino can cause a rise in levels at shorelines for months at a time and subsidence can also cause a higher sea level where it occurs

There are two lessons to be drawn that apply to more than sea level rise. First, projections about the distant future should be made with a great deal of humility. Second, when someone make a specific projection with great certitude, you can be certain that they are trying to persuade; not educate.