While yesterday's Presidential/EPA announcement of 30% reductions in CO2 emission by 2030 sounds like a drastic reduction, the Columbus Dispatch notes that the baseline matters. And the baseline is almost 10 years ago (2005). For Ohio, that means they are already over halfway to the 30% goal.
States will have a variety of options to meet the goal, the source said.
Variety is the spice of life.
Some Republicans aren't happy, saying the requirement will kill jobs in the coal industry.
"Some Republicans aren't happy"? That's an understatement. But let's work through the logic. Some Republicans aren't happy. Therefore, not all Republicans aren't not happy. So some Republicans are the opposite of not happy.
But the White House says it's not just good for the environment, it will also be healthier.
"The Administration has set out to kill coal and its 800,000 jobs," Sen. Mike Enzi said in the GOP weekly address Saturday. "If it succeeds in death by regulation, we'll all be paying a lot more money for electricity - if we can get it."
But, maybe, just maybe, we all are paying too little for electricity now?
European Union efforts to fight climate change favored diesel fuel over gasoline because it emits less carbon dioxide, or CO2. However, diesel’s contaminants have swamped benefits from measures that include a toll drivers pay to enter central London, a thriving bike-hire program and growing public-transport network.
“Successive governments knew more than 10 years ago that diesel was producing all these harmful pollutants, but they myopically plowed on with their CO2 agenda,” said Simon Birkett, founder of Clean Air in London, a nonprofit group. “It’s been a catastrophe for air pollution, and that’s not too strong a word. It’s a public-health catastrophe.”
How bad is it? Here's a comparison:
The EU limits NO2 to a maximum of 40 micrograms per cubic meter of air. The concentration on Marylebone Road, a stone’s throw from Regent’s Park, was almost 94 micrograms in 2012, according to the most recent data from the EEA.
The level for the site last year was 81 micrograms, and it’s averaging 83 micrograms this year, according to King’s College London. In 1998, when the King’s College data begins, it was 92. That’s about the time the switch to diesel started.
In contrast, Beijing had a concentration of 56 micrograms last year, according to China’s Ministry of Environmental Protection. The Chinese capital has a worse problem with other pollutants, registering almost triple the level of PM10 particles (bigger than PM2.5s) as on Marylebone Road.
In a major victory for the Obama administration, the Supreme Court on Tuesday upheld the authority of the Environmental Protection Agency to regulate the smog from coal plants that drifts across state lines from 28 Midwestern and Appalachian states to the East Coast.
The 6-to-2 ruling bolsters the centerpiece of President Obama’s environmental agenda: a series of new regulations aimed at cutting pollution from coal-fired power plants. Republicans and the coal industry have criticized the regulations, which use the Clean Air Act as their legal authority, as a “war on coal.” The industry has waged an aggressive legal battle to undo the rules. ...
The interstate air pollution regulation, also known as the “good neighbor” rule, has pitted Rust Belt and Appalachian states like Ohio, Michigan and Kentucky against East Coast states like New York and Connecticut.
In its arguments before the court, the E.P.A. said the rules were necessary to protect the health and the environment of downwind states. East Coast states in particular are vulnerable to pollution blown by the prevailing west-to-east winds of the United States. The soot and smog produced by coal plants are linked to asthma, lung disease and premature death.
In her decision, Justice Ginsburg noted that in reining in interstate pollution, regulators must account for the vagaries of the wind. ...
In a dissent, Justice Antonin Scalia, joined by Justice Clarence Thomas, said the regulation was unwieldy and suggested it was Marxist. As written, the regulation will require upwind polluting states to cut pollution in relation to the amounts of pollution each state produces, but also as a proportion of how affordably a state can make the cuts. In other words, states that are able to more cost-effectively reduce pollution will be required to cut more of it.
“I fully acknowledge that the proportional-reduction approach will demand some complicated computations where one upwind state is linked to multiple downwind states and vice versa,” Justice Scalia wrote.
“I am confident, however, that E.P.A.’s skilled number-crunchers can adhere to the statute’s quantitative (rather than efficiency) mandate by crafting quantitative solutions. Indeed, those calculations can be performed at the desk, whereas the ‘from each according to its ability’ approach requires the unwieldy field examination of many pollution-producing sources with many sorts of equipment,” he said, paraphrasing Karl Marx.
Economic incentive based policy, such as a carbon tax, can be used to cut pollution in proportion to how much is produced and is cost-effective (here is some background). With a carbon tax lower cost polluters end up cutting more pollution and the overall cost falls. Equating the efficiency properties of incentive-based policy with Marx is odd.
Today’s Supreme Court ruling reinstating limits on sulfur dioxide (SO2) and nitrogen oxides (NOx) from coal-fired power plants, as required by the Cross State Air Pollution Rule (CSAPR), is a significant victory for our public health. The 6-2 decision makes clear that CSAPR’s provisions fully conform with the Clean Air Act and should be implemented as directed. ...
In 2011 EPA estimated that, by 2014, the rule would prevent an estimated 13,000 to 34,000 premature deaths and 400,000 cases of aggravated asthma, providing $120 to $280 billion in annual health and environmental benefits. These benefits would be achieved at annual costs of $800 million due to the rule.
From the inbox (courtesy of my mother-in-law): This is an excerpt from a Sierra Club email. I do take the source into consideration. But it does sound like your kind of thing.
”The cost of climate change is rising and we all pay the price. Communities rebuild after superstorms and wildfires. Businesses see their fortunes fall as droughts sweep the heartland. Families face rising health care costs for asthma attacks and heart problems caused by runaway pollution.
Fossil fuel billionaires like the Koch brothers will keep hiding the consequences of their pollution unless there's a firm, scientific, and official cost for their carbon pollution -- and that's exactly what the White House's Office of Management and Budget is working on. It's called the social cost of carbon, and it's a measure of how much economic damage is being done to our society by each and every ton of carbon pollution that's pumped into our air. ”
Senator Vitter (R-LA) has read Hausman (2012) and the news is not good:
Today, U.S. Sen. David Vitter (R-La.), top Republican on the Environment and Public Works Committee, sent a letter to Jonathan B. Jarvis, Director of the National Park Service (NPS), regarding the NPS's intention to use a controversial survey method in order to assign a monetary value to increased "visibility" at national parks and wilderness areas. Instead of actual scientific data, the results from the public opinion survey would be used in cost-benefit analyses by the U.S. Environmental Protection Agency (EPA) in future rulemaking under the Clean Air Act (CAA), including the regional haze rule.
"This survey is just a ploy that won't benefit park goers - it only benefits the EPA's ability to make more rules," said Vitter. "The survey could ask if people want the sky to be more blue when they go to a park, and how much they would be willing to pay for that. The surveyed person can answer $100, or some arbitrary amount they'd hypothetically be willing to pay, but could not even have any intention of visiting the park. This method doesn't make sense and obviously lacks credibility and scientific value, and it could lead to significantly more control over air rules for the EPA."
The willingness-to-pay survey is based on what people would say they would do in a hypothetical situation, as opposed to what they actually do in practice. According to economists cited in the letter, these types of surveys frequently yield inflated and inaccurate values.
Hausman (2012) is cited in footnote 2 of the letter. Here is what I said in a letter to Sen. Vitter:
I have read your letter to the NPS director about the use of the contingent valuation method and would like to try to make you aware of some other research on the issue. Hausman (2012) was written as part of a three article symposium in the Journal of Economic Perspectives. The other two papers are much more supportive of the ability of the contingent valuation method to accurately measure economic values that the public may hold. In response to Hausman, Tim Haab, Matt Interis, Dan Petrolia and myself wrote a response that pointed out that Hausman (2012) ignores much of the scientific literature concerning the method.
This is our summary: Hausman “selectively” reviewed the contingent valuation method (CVM) literature in 2012 and failed to find progress in the method during the 18 years since Diamond and Hausman argued that unquantified benefits and costs are preferred to those quantified by CVM. In this manuscript, we provide counter-arguments to Hausman's claims, not with the intent to convince the reader that the debate over CVM is settled in favor of the method, but rather to argue that the intellectual debate over CVM is ongoing, that dismissing CVM is unwarranted, and that plenty of work remains to be done for the truly curious researcher."
The paper was published in Applied Economic Perspectives and Policy. I would be happy to send you a copy of this paper if you think it might be helpful.
John C. Whitehead Department of Economics Appalachian State University
My vote is to overturn the appeals court, based on what the founders meant when they signed the constitution:
The Supreme Court heard arguments on Tuesday in a knotty environmental case over how to hold states responsible for air pollution that drifts across their borders and causes harm in downwind states.
If there was consensus among the justices, it concerned only the complexity and difficulty of the issues before them. ...
Still, the questioning suggested that there may well be five votes to sustain the Environmental Protection Agency regulations at issue. “It’s certainly hard,” Chief Justice John G. Roberts Jr. said of the task of allocating responsibility, “but it is what the statute says, and it seems to me that if E.P.A. had taken a different view, it would have been contrary to the statute.” ...
The agency’s approach, which involves a trading system for pollution credits, was struck down last year in a 2-to-1 ruling from the United States Court of Appeals for the District of Columbia Circuit. The appeals court said the agency had exceeded its authority under the Clean Air Act in the way it apportioned the cleanup work among 28 upwind states.
The air in those states, mostly in the Midwest and the South, may meet regulatory standards within their borders even as pollutants from their power plants and refineries drift across state lines, preventing neighboring states from meeting their legal obligations. The affected states are largely in the Northeast and the mid-Atlantic.
The regulation at issue, the Cross-State Air Pollution Rule, sometimes called the transport rule, did not apportion reductions by the amount of pollution contributed by each upwind state. Instead, the agency sought to encourage remedial action where it was cheapest.
The appeals court said that this approach violated the Clean Air Act’s “good neighbor” provision by requiring upwind states “to reduce their emissions by more than their own significant contribution” to downwind pollution.
Much of Tuesday’s arguments concerned whether the agency could take cost into account or whether, as Justice Kagan put it, “Congress has demanded that the regulation occur in a fundamentally silly way.”
Justice Antonin Scalia said that cost-based regulations might be wise policy, “but it’s certainly not the statute that Congress wrote.”
The Bet is Yale University historian Paul Sabin's (no relation to Nick) telling of the story and political culture surrounding Paul Ehrlich and Julian Simon's 1980-1990 $1,000 bet over the Hotelling rule. OK, it wasn't really over the Hotelling rule, but it was about Hotelling-like predictions of changes in depletable resource prices. In particular, the bet focused on the change in prices of five metals (Copper, tin, chromium, nickel and tungsten--I think they made that last one up) over a 10 year period. Whack-job dooms-day ecologist Paul Ehrlich--OK, that's unfair to Ehrlich, he is a butterfly biologist, not an ecologist (is that biased?)--famously predicted throughout the late 1960's and 1970's the coming cataclysmic collapse of the Earth's environmental/ecological systems due to natural limits and exponential population growth.
In short, Ehrlich believed that humans are but one part of the broad ecosystem, and subject to all of the natural laws and limits that come with being part of that system--including species collapse due to exceeding the system's natural carrying capacity. Ehrlich was the loudest voice of the early zero-economic growth movement (and a contemporary of the Club of Rome and Limits to Growth). One observable indicator of Ehrlich's and his colleagues' dire predictions would be the Hotelling-like rise in depletable resource prices over time. As resources become more scarce (reach their natural limits), prices would have to rise. This is a somewhat ironic prediction from Ehrlich given the lack of price rationing in the Limits to Growth-type models of world collapse, but I digress.
Julian Simon, a mild-manned Chicago-trained University of Illinois professor of marketing (who eventually ended up in the University of Maryland School of Business), disagreed with Ehrlich's basic premise that population growth necessarily strained the natural limits of the ecosystem and instead argued that scarcity creates increasing opportunity costs and opportunities for investment, exploration, discovery, innovation and development of subsitute forms of capital. In short, Simon the economist argued that the simple form of Hotelling (prices rise in response to increasing scarcity) was correct, but the extension needs to be accounted for--increasing prices create incentives for the generation/investment/invention of alternative resources. Simon believes that increased in population actually increased general well being, increased the stock of human capital and would ultimately result in the creation of substitute pools of resources (whether natural or man-made). Simon believed that man-made capital would remain substitutable for depleted natural capital and resource prices would fall.
In the end, Simon won the bet and Ehrlich paid off without much fanfare. But in Sabin's view, the bet highlighted a growing set of divides: The academic divide between ecoologists and economists on matters of the environment, the philosophical divide between growthers and zero-growthers, and the political divide between the left and the right over matters of economic management. Sabin does an intriguing job of couching the bet within the heated political environment of the 1970's and 80's tracing the environmental movement through the national political scene from the environmental conservatism of Nixon, to the limited growth/strict conservation advocacy of Carter (not much mention of Ford), to the deregulated free-marketism of Reagan. In the end Sabin draws lessons from both Ehrlich and Simon to make a strong and lucid case for a middle ground between the coercive population reduction arguments of Ehrlich and the free-market environmentalism of Simon.
On a personal note, I found the book particularly useful at providing a different perspective on my own training in environmental economics. Beginning my graduate training in 1991, the year after the bet ended, the foundations of market-based environmental interventions had already been accepted by most economists and much of the mainstream public (to varying degrees of course). "The Bet" provides an interesting, easy-to-read introduction to the muddy politics and social setting that served as a backdrop for the development and relevance of the field of environmental economics. The political and public context provided by "The Bet" has helped to provide me with a much better understanding of how I ended up thinking like I do about environmental issues.
The Benefits of Clean Air: How EPA Values Reductions in Air Pollution
Dr. Bryan Hubbell, U. S. Environmental Protection Agency
Friday, November 8, 2:30 p.m.
Belk Library and Information Commons Lecture Hall 114
The U.S. EPA has been regulating air pollution for over four decades, and uses cost-benefit analysis to evaluate major regulations, those expected to result in more than $100 million in costs and benefits. EPA analysts conduct detailed benefits analyses which include estimating avoided health effects such as hospitalizations and reductions in risk of premature death, as well as environmental effects such as improved visibility in national parks and increased commercial timber yields. In recent years, EPA has moved towards an ecosystem services framework for estimating the benefits of improvements in ecological effects such as reduced acid deposition and decreased ozone impacts on forest ecosystems. This talk provides an overview of the ways in which EPA conducts benefits analyses for air pollution regulations, including how scientific evidence is incorporated in estimating health and environmental impacts, how we use sophisticated air quality and risk models, and how economic values are assigned to reductions in air pollution related health and environmental impacts.
"This blog aims to look at more of the microeconomic ideas that can be used toward environmental ends. Bringing to bear a large quantity of external sources and articles, this blog presents a clear vision of what economic environmentalism can be."
Don't believe what they're saying
And allow me a quick moment to gush: ... The env-econ.net blog was more or less a lifeline in that period of my life, as it was one of the few ways I stayed plugged into the env. econ scene. -- Anonymous
... the Environmental Economics blog ... is now the default homepage on my browser (but then again, I guess I am a wonk -- a word I learned on the E.E. blog). That is a very nice service to the profession. -- Anonymous
"... I try and read the blog everyday and have pointed it out to other faculty who have their students read it for class. It is truly one of the best things in the blogosphere." -- Anonymous