“Alligator Shoes” in California (James Hansen is right on cap-and-trade)

“‘There are a lot of special interests in [Sacramento], and a lot of them came to play,’ said Brent Newell, general counsel with the Center on Race, Poverty and the Environment, which pushed for policies to help people who live near sources of pollution, like refineries. ‘Utilities, agriculture, oil and gas, they all influenced significantly the contours of this [cap-and-trade] bill.’”-

– Brent Newell, Center for Race, Poverty, and the Environment. Quoted in Anne C. Mulkern, “Businesses Spent Millions Lobbying Before Cap-and-Trade Vote,” Climatewire, July 26, 2017.

“Cap-and-trade is what governments and the people in alligator shoes (the lobbyists for special interests) are trying to foist on you.”

– James Hansen, Storms of My Grandchildren (2009),  p. 211.

An argument for the free market is that imperfect markets can be and often are better than government attempts to make things better. Imperfect markets are better than imperfect government, it might be said. (Or with some humor, imperfect markets are better than perfect regulation.)

In more technical terms, “market failure” must be balanced against “government failure” in the attempt to correct the former.

Imperfect government ranges from having the wrong plan to not being able to (politically) implement the ‘right’ plan. There is also the cost of government in terms of implementation and enforcement budgets.

Climate Debate

The upshot of the climate debate is that government intervention, whatever combination of regulation, subsidies, or taxation intended to penalize carbon-based energy relative to politically preferred alternatives has a cost in itself.

For the Church of Climate, no cost is too high in the service of checking fossil-fuel-enabled industrialization. But it is noteworthy when the leading scientist behind climate alarmism speaks out, warns, against politicized solutions. In this case, James Hansen is arguing against cap-and-trade.

In this way, he is speaking truth to power in a way that Al Gore did not intend (Gore’s sequel is subtitled Truth to Power.)

California’s Latest

I was reminded about Hansen’s strictures when reading a piece in Climatewire (July 26), “Businesses Spent Millions Lobbying Before Cap-and-Trade Vote.” (Gov. Jerry Brown signed California’s new bill into law last week over the objections of Tom Tanton.)

“Several businesses poised to benefit from California’s new cap-and-trade law are lobbying powerhouses that have poured millions of dollars into efforts to influence legislation,” Anne C. Mulkern wrote. She continued:

At least seven oil companies and the petroleum trade group Western States Petroleum Association (WSPA) together doled out more than $34 million to persuasion efforts from 2015 through the first quarter of this year. The parent companies of the three biggest investor-owned electric utilities spent a combined $9.1 million. Four agriculture groups bankrolled nearly $1.6 million. Each of those interests stands to benefit from A.B. 398, which extends cap and trade through 2030.

The lobby reports are not yet publically available to offer precise numbers of different parties working to, in effect, cancel each other out. But the point is that a lot of resources went to consultants and lobbyists that could have gone to stockholders, workers, or whatever else would have occurred in the absence of this political free-for-all.

Back to Hansen

California cap-and-trade was just what James Hansen warned against back in 2012–and ever since. The story was told in the San Francisco Chronicle back in late 2012, “James Hansen Blasts Cap and Trade.” Author David Baker wrote:

Arguably the best-known climate scientist in America, Hansen trashed cap and trade during a talk Tuesday night at the Commonwealth Club in San Francisco. The system, in which companies buy and sell permits to produce greenhouse gases, is a “half-baked” and “half-assed” way to deal with global warming, Hansen said.

With California Gov. Jerry Brown right in front of him, Hansen asked why the banks and the trading desks of banks should be the winners. Hansen stated (as quoted by Baker):

“Why do you want big banks in this problem?” Why should they be making money? Every cent they make is coming out of the public’s hide. And they add absolutely nothing.”

Elsewhere, Hansen has lambasted cap-and-trade as legalized bribery, … “a hidden, regressive tax” … “a breeding ground for special interests” … “an exceedingly inefficienct way to get a small reduction of emissions” … and the work of “people in alligator shoes.”

And never forget what he stated about the American Clean Energy and Security Act of 2009 (HR 2454: 111th Congress):

“After this Waxman/Markey [cap-and-trade] bill reached 3500 pages in length I stopped counting. Every lobbyist who could raise his arm to write a paragraph got it stapled into the bill. Legislators were paying off the people who paid them off. That’s the way our Washington politics seems to work.”

Cap-and-trade is the political expression of the war against fossil fuels. Carbon taxes are too apparent and painful, in contrast. That said, one wonders if and when James Hansen can throw in the flag on politicians and political “solutions.” He would do his fellow man a big favor by doing so.