The Clinton administration knows how to add insult to injury. Not only is it committed to an environmental program that will interfere with individual liberty and sap the American economy of its vitality, it also refuses to level with the American people about the costs.
At the global warming conference in Kyoto, Japan, the administration signed a treaty committing the United States to reduce emissions of so-called greenhouse gases to below the 1990 level by 2012. That’s a cut of more than one-third from the projected level. The gases, mainly carbon dioxide, are produced by burning fossil fuels: gasoline, coal, natural gas, and heating oil. Virtually all economic activity depends on those fuels. Yet Clinton and Gore say the cutback can be costless or even profitable.
Don’t buy a bridge from these guys.
The administration’s position can be faulted on many counts. Most basic is that carbon dioxide is a plant nutrient, not a pollutant. If you think back to high-school biology, you’ll recall that plants turn CO2, water, and sunlight into food and make oxygen as a byproduct. But some climatologists by no means all and most environmentalists believe that the buildup of CO2 threatens to overheat the earth’s atmosphere. That, we are told, will bring floods, droughts, diseases, insects, and other plagues of biblical proportions.
The problem with the theory is that the temperature record does not support it. Readings taken by satellite since 1979 show that the earth has actually cooled slightly in recent years. Fear of global warming is based on imperfect computer models, not observation. And as the models have improved, the amount of warming projected has decreased. Believers in global warming say that the earth has heated up over the last 100 years. The data show that most of that warming occurred before 1940, yet the big surge in CO2 output started after World War II. Something’s wrong with the theory. Maybe mankind has little power to influence the earth’s climate. After all, Mother Earth managed to have ice ages and warming spells without any help in the past.
Economist Thomas Gale Moore of the Hoover Institution says that global warming, if it happened, would be benign. Since CO2 is good for crops, agriculture would boom. Food would become more plentiful and cheaper. Moreover, people tend to live longer in warmer climates.
Climatologist Patrick Michaels supports Moore’s point. He says that if warming occurs, it would be in the arctic during the polar night, where a slight rise in temperature would do no harm. But it would have good consequences, says Michaels. Such warming would delay the first frost of winter and lengthen the growing season. Again, more food and lower prices would result. (That should please the environmentalists who are always predicting imminent world starvation.)
So why the attraction to the nightmare version of global warming? It could have something to do with its usefulness in the service of government regulation of the economy. Too many global-warming alarmists have been caught saying that it doesn’t matter whether the earth is really warming or not: if people believe it, they will support policies that should be adopted anyway.
What’s wrong with a little deception?
People with a visceral dislike of free markets and individual liberty have been adrift since the worldwide collapse of socialism. Socialism and its many variants used to be defended as the system that would outproduce wasteful, selfish capitalism as well as create social justice and equality. The record of socialist countries, which includes poverty for most citizens and special privileges for the ruling elite, made that defense incredible.
Those who want the state to run or even guide the economy can no longer oppose capitalism on economic or political grounds. They have turned instead to environmental grounds. Unsupervised free markets, they say, will destroy the earth and everyone on it. In their crazed quest for profits, rapacious capitalists will sacrifice nature’s treasures, not to mention future generations, for short-run gain. Nothing less than comprehensive government control can ensure “sustainable development,” that is, economic activity as prescribed by the enlightened forces with the proper ecological sensitivity. If the Western concept of property rights has to be revised, so be it.
The administration knows, however, that people will oppose policies that will make them poor. (Note that unions and business dislike the treaty.) It therefore promises that combating global warming can be done painlessly. Clinton and Gore talk about the profit opportunities that lie ahead for entrepreneurs who develop new ways to reduce the consumption of energy. They say they will not support a tax on carbon fuels, because tax credits and similar devices will be enough to encourage the use of new energy-saving technologies.
But that merely demonstrates their economic illiteracy. If entrepreneurs are sinking capital and resources into “green” technologies blessed by the regulators, other things will not be produced. In the market, capital flows to where consumers are expected to offer the highest return. But under the Clinton plan, that process would be distorted by political decision-making. Entrepreneurs and consumers would no longer be free to cooperatively decide what should be produced.
Another problem in the Clinton plan is that industry already has all the incentive it needs to develop and adopt worthwhile energy-saving technologies. No business wants to use more resources than necessary; that would be contrary to self-interest. Cutting costs increases profits. If capitalists are as “greedy” as their critics say, they can be counted on to be miserly with energy.
That is something that the environmentalists still don’t understand. Self-interested business people profit by reducing waste and maximizing the future value of their assets. It so happens that, by any reasonable definition, profit-seeking is also “environmentally responsible.” Yet capitalism is regarded as hazardous to the earth.
What upsets the preachers of apocalypse is the fact that fossil fuels are the most economical fuels around. No “green” form of energy can touch them for cost, abundance, and efficiency. All the so-called “renewable” alternatives hydro, wind, solar, biomass, geothermal need government subsidies or special tax treatment to stay in existence. But even with all the help over the years, they account for only 7 percent of energy used. Nuclear power was also subsidized from the beginning, but of course the environmentalists don’t like that anyway. So unless the government actually restricts their use, there will be no reduction in the use of fossil fuels beyond what would have occurred anyway. Sooner or later the administration will propose a carbon tax to reach the 30 percent reduction it promised at Kyoto.
That tax would be costly to everyone. Harvard University economist Robert N. Stavins estimates that it would push the price of coal up by 350 percent and oil and natural gas up by 100 percent. Consumers would see the price of gasoline, natural gas, and electricity rise by 40 percent. The overall price tag, Stavins says, would be $200 billion a year, or 3 percent of GDP. “That’s approximately the cost of complying with all other environmental regulations combined,” he adds.
As the price of energy rises dramatically, production will shrink and living standards will fall. The promise of green and rich will fade, and all of us will be poorer.
The good news is that the U.S. Senate is not likely to ratify the global warming treaty in its current form. But the majority Republicans can’t be trusted. They refuse to criticize the treaty on principle. Few of them dismiss the global-warming thesis. Instead they have taken the more “responsible” line that the treaty is unfair because it exempts developing nations. Clinton and Gore promise that in future negotiations, China and other newly industrializing nations will be brought under the agreement. If that happens, will the Republicans then cave in? Or will they discover that the treaty is built on bad premises and is dangerous to the well-being of every American? Let’s hope it’s the latter.