Against Waxman-Markey

A few months ago when some scientists, notably Jim Hansen, and less notably myself, were expressing doubts about cap-and-trade, the more politically active of our acquaintance were urging us to STFU, since we are presumed totally unrealistic about how Washington works. Notably it was David Roberts (in combination with the impenetrability of the bill’s language) that convinced me to drop the matter.

Suddenly, David is running a convincing video that makes the exact case that people like Hansen were making in the first place, viz., that the whole cap-and-trade idea is too complicated and legalistic to work, and that the likelihood of market distortions and loopholes was much larger than for a simple tax-and-rebate scheme.

To David’s credit, (and not so much to Obama’s) this is a free-speech issue for him. The video’s authors are on the federal payroll and have been asked to take it down, even though they were explicit about not speaking for their employer.

But I think we ought to pay attention to the substance of what they say, as well.

I think we ought to be in a hurry to get things right, not in a hurry to “do something, anything”. It’s better to do something next year that works than something this year that backfires.

If the way the video describes things is right, which seems entirely plausible to me, this is classic politics, getting buy-in from enough constituencies by buying them off. Democrats seem to think buy-in through buy-off is the way to get things passed. It reminds me of how I see some real mistakes working in scientific funding, actually. If everybody gets a piece of the pie, there’s nobody left to object. Unfortunately we are left, it seems, with action that is only symbolically effective.

OK, the US congress can only do things in odd-numbered years. (They ought to take a leaf from the Texas State Legislature’s book, and not bother to show up in election years at all.) So maybe we wait two years. Maybe that will give us time to do something effective. It’s not the end of the world, with probability 0.97 or so…

The issue is which path probabilistically yields the best long range outcome. Yes, there are risks with each further delay, but a broken bill is likely as bad as a delay or worse. Now that Copenhagen is not a big deal anymore, there’s no real rush to produce a bill in the US. Let’s drop Waxman-Markey and its variants, and take our time to try to come up with something that works.

Waxman-Markey Counterproductive?

Gar Lipow argues, and convincingly so, in a current article on Grist, that Waxman-Markey’s cap and trade provisions are counterproductive.

I am still deferring to Mr. Gore and to Mr. Krugman, not to mention to David Roberts who seems to be wavering. So I am relectuant to argue against this bill. 
Lipow doesn’t address the issue of appearing in Copenhagen with nothing much to show. This still seems to me to at least weigh in favor of some large bill. But he does address the issue of putting bad metrics into practice to start with. 
In closing Lipow quotes Peter Dorman, so I’ll quote the same paragraph as something to think about:
Mainstream environmental groups are … soooooo happy that climate deniers are not in command of politics any more. They are fighting yesterday’s battle, to get general agreement on the principle that climate change is caused by people, and people need to do something about it. They like the nice feeling that comes from all of us raising our hands and pledging, scout’s honor, to achieve sustainability by 2050. But they are losing today’s battle to put into place a viable means to get from here to there, and judging from their public statements they don’t even know it.
Stacy Morford, on the SolveClimate site, is also on the fence.
In terms of public awareness, I lunched with a bunch of intelligent and astute American adults yesterday. None of them had heard of Waxman-Markey, though one person had heard of Rep. Waxman. 
Maybe this sort of opacity is necessary as a matter of realpolitik these days, but I don’t have to like it, do I? Shouldn’t this have escaped the energy blogs and made a tiny impact on the mainstream?

Waxy Markup

Adam Siegel is trying to plow through the details of Waxman-Markey so there is one more reason for me not to. 

I am trying to get a grip on the whole business and hope to have something to say after  the dust settles. For the present, I am in favor of anything other than going to Copenhagen empty-handed and am somewhat reassured by Krugman’s acquiescence
I’ve never really followed legislation through the negotiation phase before. I’ve heard it isn’t pretty. That assessment turns out to be correct. 
I’ll point to useful articles as I come across them. 

A bit more on cap and trade

People who have put more effort than I have into reading the Waxman-Markey bill are coming up with widely differing interpretations, not just of what its impacts will be, but of what it actually means.

One interesting case against is this analysis by Payal Parekh, who thinks the cap and trade components of the Waxman-Markey bill will do very little for American carbon emissions. Others do interpret the provisions differently; the real question is which interpretation will be advanced by the affected economic interests and how it will stand up in court.

I do gather from the comments to that article that a key flaw in trading emissions rights is double counting: a behavior that would likely have been done anyway can now be sold for credits that greatly exceed the expense of the action. This causes the cost of remediation to increase, not decrease.

On the other hand, I begin to see the urgency arguments as well; they do not stem from any physical process that can’t delay a year for an effort to design an elegant bill and . They stem from the need for the US not to show up in Copenhagen empty-handed. The whole world is desperate for a semblance of major action from the US. Even if the cap-and-trade provision of Waxman is completely toothless, it sounds big. In other words, it’s the semblance that seems to matter.

Of course, the atmosphere pays no attention to symbolic actions. So one question, especially presuming Parekh has it right, is whether a bad bill immediately makes a good bill in the next few years harder to achieve. I suspect so.

Waxman-Markey Bill

It’s interesting how none of the proponents of Waxman-Markey would point to the text, but it’s not hard to find. It’s linked here and is officially called the “American Clean Energy and Security Act”.

Although it is one of those things intimidatingly described as being over 600 pages long, it was very amusing to discover that the margins and font size match what you’d expect for a nine-year-old’s primer. There are about 200 words per page at most. So, though inhumanely formatted, the entire thing is only about 120,000 words. Not an easy thing to read but not overwhelming either.

Where did this come from? Waxman and Markey’s staffs? Lobbyists? Anyway it is proportionally less mysterious at 200 words per page than at the 1000 or so I imagined. (This is the first time I ever looked at draft legislation.)

The claim for the legislation is as follows:

The American Clean Energy and Security Act will create millions of new clean energy jobs, save consumers hundreds of billions of dollars in energy costs, enhance America’s energy independence, and cut global warming pollution. To meet these goals, the legislation has four titles:

  • * A clean energy title that promotes renewable sources of energy, carbon capture and sequestration technologies, low-carbon fuels, clean electric vehicles, and the smart grid and electricity transmission;
  • * An energy efficiency title that increases energy efficiency across all sectors of the economy, including buildings, appliances, transportation, and industry;
  • * A global warming title that places limits on emissions of heat-trapping pollutants; and
  • * A transitioning title that protects U.S. consumers and industry and promotes green jobs during the transition to a clean energy economy.

The process envisioned by the committee is as follows:

The Energy and Commerce Committee will complete consideration of the legislation by Memorial Day. The preliminary schedule follows:

  • Week of April 20: Energy and Environment Subcommittee Hearings
  • Week of April 27: Energy and Environment Subcommittee Markup Period Begins
  • Week of May 11: Full Energy and Commerce Committee Markup Period Begins

So this thing is well on its way. My biggest concern is that it is a bundle of good intentions with nonobvious flaws that the drafters of the bill will not have the time to see but that the impacted industries will have ample time and motivation to discover and exploit. This is the reason to always err on the side of simplicity.

First impression: This is not a cap and trade bill. This is a big pile of conventional wisdom bill. The trouble with conventional wisdom is that it may not be consistent. Inconsistent legislation leads to incoherent behavior, which makes things worse. I can’t understand why something of this importance needs to be rushed. Yes, the present congress needs to act, but they have another year to iron out the kinks and promote the product.

The argument for rushing, aside from the usual naive confusion about the time scales of the climate problem (and probably about the time scales of the “green economy” and surely about the economic tradeoffs of it) amounts to “a bird in the hand is worth two in the bush”, and the argument for cap and trade over a tax amounts to “it’s pretty much the same thing but the teabaggers won’t put up with it if we call it a tax”. On the latter point, sorry but nobody is being fooled, teabaggers included.

On the arguments from urgency, wouldn’t it be better to 1) take the time to think things through and 2) try to exert some leadership so that the public understands and supports the endeavor? These suggestions appear alien to the present governing class and lobbying classes, which means that not much has changed yet.

And, though it’s always a bit baffling to see Republicans attacking Wall Street, don’t they have a point here?

Barton and Walden are now pressing the EPA about why the case took so long to prosecute, the apparent leniency in sentencing, and the reported prosecution cost of $80 million. They’re also probing the accuracy of EPA comments indicating there may be a raft of other fraud cases that haven’t been investigated.

Legislators also point to alleged fraud in the European Union emissions trading market. Under the program, companies are allowed to offset their emissions by investing in projects like high-efficiency power plants that cut greenhouse gas emissions. These projects are often located overseas where verification is difficult, if not impossible.

Environmental groups alleged, and EU officials acknowledged, that much of the offsets weren’t legitimate. “Billions of dollars have been transferred from taxpayers to undeserving project developers and a growing army of carbon brokers and consultants,” said environmental organization Friends of the Earth.

Such examples are also raising fears about the next U.S. market, which will be far more complicated and much larger than both Reclaim and the EU emissions program.

“All of the evil things that Wall Street will do to an unregulated financial commodity market, they will try to do in spades to this carbon market,” said Mark Cooper, head of research at the Consumer Federation of America.

Yes, of course Barton will oppose a tax just as vehemently, but will he have as cogent an argument?

We already have the example of well-intentioned major legislation on corn ethanol backfiring spectacularly. Nobody said this was going to be easy.

Can we have the same level of intellectual rigor about legislation as we do about science or medicine or engineering? Where did the Waxman-Markey text come from, and what makes anybody think that three weeks of markup will be enough, given the corporate interests’ decades of followup looking for profitable loopholes, never mind weaknesses in enforcement.

I want some reassurance that years of critical thought went into this document. As far as I know it sprung into existence this year as a direct consequence of existing political constraints and not much else. Please tell me I am wrong.

I suppose I have to try to read it now. Groan.