In both the EU and the US carbon policy correctness has run its course having been discredited by scandal, the persistence of scientific method, and public pressure to recognize market realities. The proponents of carbon policy changes are caught between panic and despair. They came so close to implementing their policy regimes, and cannot now accept that the world has said ‘No!’
The evidence of the death rattle of carbon policy has been presenting itself for a while but like a degenerative disease it was slow to develop but relentless in its progress. The EU adopted phase 1 of its Emissions Trading Scheme setting policy goals of reducing greenhouse gas emissions by 20% below 1990 levels. Europe went along but the grumbling was quieted by a big dose of emissions allowances to reduce the pain. Much of the economy was targeted indirectly by the focus on power stations and transport. Phase 2 was tougher and more allowances left the ETS awash in oversupply with resulting falling prices thus undermining the economic incentives to reduce emissions. Then an inconvenient truth began to appear—the policy has been sold on the looming prospects of rising temperatures and rising sea levels. The scandals that discredited the incontrovertible science were caused by the persistence of the scientific method which kept asking ‘why is it that temperatures are not rising as forecast?’ The answer was—-shut up, you idiot—you’ll make a mess of things!
The politically correct policy response was to double down on the carbon policy cram-down process before it was too late. That is when the death rattle presented itself for all to see. The extension of the carbon policy tax to airlines in the EU expanded the conflict beyond the continental boundaries. The nations that just said no in Copenhagen and Cancun and Durban said ‘hell no’ we will not have our flag carriers taxed by the EU. The EU carbon policy emperor was revealed as having no clothes since it lacks the ability to enforce its political correctness beyond the EU borders. And even the US said no.
A parallel fate is playing out on the American side of the pond for carbon policy. President Obama was elected with high public aspirations for hope and change and a better economic future. In phase 1, he pushed hard for Cap and Trade legislation but despite having majorities from his own party in both houses of the Congress the measure failed. The environmental advocates of American carbon policy change were incredulous. The President sought to cast his defeat as an ugly partisan battle against those Neanderthal republicans and tea partiers ignoring the inconvenient truth that his policy had been defeated by the no votes of members of his own caucus from fossil fuel producing states. In phase 2, the president used stimulus funding to create a de facto industrial policy of heavily investing in favoured green technologies and instructed the US EPA to turn the cap and trade legislative principles into federal regulations to achieve as much of the carbon policy goal in his first term as possible. The President then turned attention to health care reform and the economy while the regulators worked behind the scenes. The president achieved success with the passage of his health care reforms and it did suck up much of the oxygen in the nation’s capital by the strenuous debate. Meanwhile, one by one the US EPA rolled out new rules that targeted fossil fuel use in power generation and transport following the lead of the EU.
But the US effort to double down on carbon policy regulation was met with a market response wholly unexpected. Shale development had been growing rapidly from horizontal drilling and hydraulic fracturing success. The players were largely smaller firms unable to compete against the super majors in deep water drilling. But they were fast, nimble and efficient at exploiting unconventional shale plays and the market began to notice. By the 2008 recession the unconventional plays in Texas and North Dakota had grown to find new opportunities in the Marcellus and Utica shale in Pennsylvania, Ohio and New York. In the West the Niobrara shale in Colorado, Kansas and Nebraska and the Monterrey shale in California were reassessed to update their recoverable oil and gas potential. In the aftermath of the Gulf of Mexico oil spill the administration clamped down on issuing new drilling permits in the Gulf and on Federal lands. This forced deepwater producers to move offshore oil rigs to other global markets like Brazil or Angola and encouraged others to move onshore and go after the growing potential for oil and gas from shale on private lands as the only game left.
By 2010, the US had a full blown domestic energy production boom in the making creating jobs, producing tax revenue and lifting spirits in a sour economy. North Dakota unemployment rates are near 4% while California’s still are above 10%. By 2011 the US became a net exporter of natural gas for the first time in more than thirty years. Against that obvious market success, the Administration presented its drumbeat of ever more onerous anti-fossil fuel regulations capped by the newly proposed carbon pollution rule that virtually bans future coal fired generation in the US.
The death rattle grows louder. In the face of looming carbon policy changes from the Administration, the market offers the public low natural gas prices from growing domestic production. The government offers carbon taxes, Chevy Volt, and more Solyndra-like investments with money borrowed from China—in an election year!
Two continents but one story—a decade of political correctness confronts the reality of science and markets. The EU pursues its policies to the fullest and finds itself with high energy prices, oversupply of emissions allowances as market demand falls along with the EU economy. The US finds its carbon policy defeated in the Congress and pursued by administrative regulation only to be confronted with a domestic energy boom on private lands the president and his regulators cannot stop pointing a now carbon-sceptical public to the job creating, revenue producing advantages of shale.
Global markets find America’s prospects of low natural gas prices now decoupled from rising oil prices so attractive that there is real opportunity for a rebirth of America’s manufacturing base long ago forced offshore in search of cheaper fuels and labour. The only thing holding back the industrial investment is America’s uncompetitive corporate tax and repatriation of earnings policies, the uncertainty of looming health care costs, and the prospects that carbon policy advocates will kill the golden goose of domestic energy production of fossil fuels if the President is re-elected and has ‘more flexibility’ since he won’t have to face the voters again and can concentrate on implementing his policy goals—not ours!
How’s that ‘hopey changey’ thing working out for you?
By. Gary L. Hunt
Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a disruptive innovation software collaborative of high tech companies focused on the energy vertical. He served as VP-Global Analytics & Data at IHS/CERA; global Division President at Ventyx, now an ABB company; and Assistant City Manager-Austin Texas responsible for Austin Energy and Austin Water.
I find it very difficult to believe people care so little for the own country and their offspring that they are not following the scientific debate closely. And by that, I don't mean what the media says, but what the peer-reviewed science says. Let's face it, climate change has the potential to do a lot more harm than a whole army of terrorists could hope to achieve, even in their wildest dreams. Yet look at how much effort is put into fighting terrorism compared to climate change.
The above article seems to rest its case on the 'scandal' of the leaked emails. Is the author so ignorant of the truth that he still believes it? I doubt it. He suspect he is just another part of the problem, not the solution. The whole 'climategate' issue has been throughly investigated by a number of independent bodies and the scientists involved have been completely exonerated. If you need me to tell you that, you, too, are part of the problem and shame on you.
The main reason temperature rise has slowed is because we have had a long period of La Ninas, which direct the heat into the oceans in preference to the air, as the rising ocean temperatures show. If we get a similar series of El Ninos, the opposite will happen and we will have a period of increased temperature rise. Meanwhile the underlying temperature trend based on rolling averages (which is the only way to assess such a noisy signal as global temperature) shows a remorseless climb.
That this Mr Gary Hunt clearly has not done his homework, or if he has, neither cares about his children, his grandchildren nor country, is between him and his conscience. Even America, with all its military might will not put even a scratch on Old Mother Nature. If we continue to pump vast amounts of CO2 into the atmosphere, she will just apply HER laws and increase the temperature. Even the most ardent denier has to concede that. As for hoping the markets will come to our rescue, forget it. If anything, they will only exacerbate the problem as they have to date.
My only hope is that the fossil fuel industry executives get their just rewards when the public sees through their tactics and sees the danger, probably too late. And we must not forget their foot soldiers who have deceived the public in applying those tactics, especially the scientists among them. (It is interesting to see just who gets funded by the fossil fuel industry. The hacking of the Heartland Institute computers revealed a lot more than Climategate ever did, but did it get the media treatmet it deserved, not at all. I even doubt that many reading this even know of the issue, so 'competent' have the media been in putting the denial case for climate change.)
Even if climate change is not man-made, it is folly not to do what we can to combat its effects. At this time of remembering the Titanic, perhaps we should consider whether generally it would be better not to slow down if there is an iceberg dead ahead because icebergs are not man made. In effect that is what Mr Gary Hunt of the wonderously named Zap Crackle Pop company wants us to do. Or is it that this Mr Hunt is as serious as the name of his company implies?
For those wishing to get an honest account of the climate change issue I can recommend skepticalscience.com, which is pure science, and on YouTube 'Potholer54' a.k.a. Peter Hadfield, a scientist turned journalist whose videos are both informative and entertaining.
One closing thought. The GRACE satellites have recently shown that we are losing 150 billion tons of ice annually re:
http://grist.org/list/earth-is-losing-39-cubic-miles-of-ice-per-year/. Why would it do that if the temperature is not rising?