10 COOL GLOBAL WARMING POLICIES1
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
N AT I O N A L C E N T E R F O R P O L I C Y A N A LY S I S
10 Cool Global Warming Policies1
Policy Report No. 321 by Iain Murray and H. Sterling Burnett June 2009
with contributions from Eli Lehrer and Greg Conko
Global warming is a reality. But whether it is a serious problem — and whether emis-
sions of carbon dioxide (CO2) and other greenhouse gases from human fossil fuel use
are the principal cause — are uncertain. The current debate over the U. S. response
to climate change centers on greenhouse gas emissions reduction policies, which are
likely to impose substantially higher costs to society than global warming might.
Executive Summary
What should be done about the threat of global warming? Unfortu-
nately, many proposals — including mandatory limits on carbon dioxide
(CO2) emissions — would be much more costly to society than the danger
it seeks to avert. Fortunately, there are policies that could be adopted that
are desirable in their own right and are commendable, even if there were
no threat of global warming. These policies would reduce greenhouse
gas emissions, increase energy efficiency, reduce harms associated with
global warming or increase the world’s capabilities to deal with climate-
change-associated problems. Here are 10 of them:
No. 1: Eliminate All Subsidies for Fuel Use. Subsidies for energy
Dallas Headquarters: research and development, as well as the production, transportation, mar-
12770 Coit Rd., Suite 800
Dallas, TX 75251
keting and consumption of energy, encourage greater energy use and raise
972.386.6272 ▪ Fax: 972.386.0924 emissions levels.
Washington Office: No. 2: Reduce Regulatory Barriers to New Nuclear Power Plants.
601 Pennsylvania Avenue NW, Regulatory delays add substantially to the cost of nuclear power, which is
Suite 900, South Building
Washington, DC 20004 the only proven technology that can provide enough reliable emissions-
202.220.3082 ▪ Fax: 202.220.3096 free energy to significantly reduce greenhouse gas emissions.
www.ncpa.org
No. 3: Reduce Wildfires through Alternative Forest Management
ISBN #1-56808-198-7 Institutions. Local and private forest management would reduce over-
www.ncpa.org/pub/st/st321/st321.pdf crowding and disease in poorly managed national forests, increasing the
ability of the trees to absorb carbon and reducing wildfires, which release
huge amounts of CO2.
No. 4: Liberalize Approval of Biotechnology. Through biotechnol-
ogy we are developing faster growing varieties of trees that can absorb
and store large amounts of CO2 as well as drought-resistant crops that can
thrive despite climate change.
10 Cool Global Warming Policies
No. 5: Repeal the National Flood Insurance Pro- No. 8: Reform Air Traffic Control Systems. Al-
gram. Subsidized flood insurance is responsible for lowing pilots to fly more direct routes and avoid lengthy
much of the development in coastal areas and in flood holding patterns and runway delays would save fuel and
plains. Eliminating this subsidy would make us less reduce aircraft emissions.
vulnerable to higher sea levels and increased rainfall.
No. 9: Remove Regulatory Barriers to Innovation.
No. 6: Increase Use of Toll Roads with Conges- Environmental regulations often increase the costs of
tion Pricing. Toll lanes with rates that vary according replacing older, dirtier facilities with newer, cleaner
to time of day can reduce traffic delays that increase ones.
energy use and emissions.
No. 10: Encourage Breakthroughs in New Tech-
No. 7: Remove Older Cars from the Road. Sub- nology. An “X” prize-type competition would encour-
sidizing the replacement of older vehicles with newer age the development of new transportation and electric
ones would increase fuel efficiency and reduce emis- power technologies that reduce CO2 emissions while
sions. meeting future energy demands.
About the Authors
Iain Murray is a director of projects and analysis and senior fellow in energy, science and
technology at the Competitive Enterprise Institute (CEI). He writes regularly for print and
online sources, his CEI articles having appeared in The New York Post, Investors Business
Daily, the Financial Times, the Wall Street Journal, the Washington Examiner and many other
newspapers. He has appeared on Fox News, CNN Headline News, the BBC and Al-Jazeera
among other broadcast appearences. Mr. Murray holds a BA and MA from the University of
Oxford, an MBA from the University of London and the Diploma of Imperial College of Sci-
ence, Technology and Medicine.
H. Sterling Burnett is a senior fellow with the National Center for Policy Analysis. While
he works on a number of issues, he specializes in issues involving environmental and energy
policy. He also serves as an adviser to the American Legislative Exchange Council Energy,
Environment, Natural Resources and Agriculture Task Force (1996 - Present); a senior fellow
with the Texas Public Policy Foundation (2005 - Present); and a contributing editor to Envi-
ronment & Climate News (2005 – Present). Dr. Burnett has been published in Ethics, Envi-
ronmental Ethics, Environmental Values, The Review of Metaphysics, International Studies
in Philosophy, The World and I, USA Today and the Washington Post. Dr. Burnett received a
Ph.D. in Applied Philosophy from Bowling Green State University in 2001.
2
Introduction to global warming, or both. These Each of these policies would
steps would expand energy choices, make it easier to meet emission-
Global warming is a reality. But improve energy efficiency and reduction goals without sacrific-
whether it is a serious problem — increase societal resiliency and ing living standards. On the other
and whether emissions of carbon adaptability. hand, if further research reveals that
dioxide (CO2) and other green- the threat from climate change is
house gases from human fossil fuel minimal and there is little need for
use are the principal cause — are emissions reductions, these policies
uncertain. The current debate over would still be beneficial.
the U.S. response to climate change
centers on greenhouse gas emis-
“‘No-regrets’ policies
sions reduction policies, which are are beneficial,
Insert calloutregardless
here. Costly Measures to
likely to impose substantially higher of global warming.” Combat Climate Change
costs to society than global warm-
ing might. The world will surely Conventional approaches to com-
regret it if billions of people are bat climate change could impose
mired in poverty because resources considerable costs, with little cor-
are diverted to solve a nonexistent Some policies are likely to responding benefits. Specifically,
or trivial problem.2 On the other reduce greenhouse gas emissions the Obama administration plans to
hand, the world would regret do- absolutely and spur technological implement a cap-and-trade system
ing nothing if human-made global innovation. Other policies would to reduce greenhouse gas emissions.
warming is a serious problem. reduce energy intensity and/or Under a cap-and-trade system, the
Fortunately, there are “no- emissions intensity. That is, they government sets a ceiling on total
regrets” policies that would prove would reduce energy use per unit emissions and auctions, or gives
beneficial whether or not human ac- of output, or dollar of gross domes- away, allowances to the affected
tivities are creating a global warm- tic product (GDP), and/or reduce industries permitting them to emit
ing problem. No-regrets policies: emissions of greenhouse gases per CO2. Companies that continue to
unit of energy used. In fact, the exceed their cap can purchase un-
■■ Reduce the amount of green- trend in all developed countries has used allowances from others.
house gases emitted into the at- been toward more efficient energy
mosphere, or use. And greenhouse gas emis- The goal of a cap-and-trade
■■ Mitigate, prevent or reduce harms sions reductions usually accompany system is to gradually reduce the
associated with global warming, reductions in emissions of regulated number of allowances until emis-
or pollutants that are known at some sions are cut to the desired level.
level of atmospheric concentration Europe instituted such a system to
■■ Increase society’s capability to
to adversely affect human health meet its goals under the Kyoto Pro-
deal with problems associated
and/or impose external costs on tocol, the international agreement
with global warming, or
society. These include gaseous to limit greenhouse gases.4 Yet, ex-
■■ Reduce the amount of emissions compounds of nitrogen and sulfur, perience in Europe and elsewhere,
per unit of output or per unit of carbon particulates, ozone (O3) and and theoretical modeling, suggests
energy used, and carbon monoxide (CO). Although that the price required to achieve
■■ Don’t impose significant eco- CO2 is often called a pollutant, it is the emissions reductions through a
nomic costs. not: It is an atmospheric trace gas cap-and-trade system vastly exceed
essential to plant life. The con- the likely cost of those emissions to
The policies discussed in this sumption of CO2 allows plants to society. In fact, Europe has not yet
paper should, to some degree, release oxygen, which is essential to met its goals for emissions reduc-
mitigate and/or allow us to adapt animal life.3 tions. The reason: The number of
3
10 Cool Global Warming Policies
Change, an influential
Table I British government re-
Effect of Carbon Taxes on Energy Costs port, calculated the so-
cial cost of carbon emis-
sions at $85 a ton, much
Additional Increased Increased
Estimated Additional higher than almost any
Cost per Household Household other estimate. But this
Social Cost per Cost per
Kilowatt Hour Expenditure Expenditure report found such high
Ton of Carbon Gallon of Gas social costs because
of Electricity on Electricity* on Gasoline*
the author, economist
$85 8¢ 74 ¢ $853 $626 Nicholas Stern, set the
discount rate for harm
$24 2.5 ¢ 20 ¢ $266 $229 from global climate
change at almost zero
$5 .5 ¢ 4¢ $53 $46 (0.1 percent). Most
economic analyses use
*Note: Assumes average household use of 10,600 kWh of electricity and 1,143 gallons of gasoline annually. a much higher discount
Source: Authors’ calculations. rate.
In contrast to the
market, at a discount
allowances has not been cut because many scientists believe is nec-
rate of exactly 0 percent, $1 billion
of public resistance to energy price essary to prevent the most dire
today is worth only $1 billion 100
increases from interim emissions harms from global warming)
years from now. This would be
limits. would cost trillions of dollars.6
appropriate if people were indif-
The Cost of Cutting Green- The Cost of Global Warming.
ferent about when they receive and
house Gas Emissions. Various enjoy the benefits of the dollars. It
Published economic studies agree is precisely because people are not
studies have calculated the poten- that the costs CO2 emissions impose
tial costs of actions to prevent or indifferent that the market rate of
on society are quite small — includ- interest is positive — rewarding
reduce future global warming. For ing current and future costs, and
instance: people who delay consumption.
both private and external harms.
In the most comprehensive review Stern argued that present genera-
■■ A study by economist Stephen of research on the costs of climate tions have a moral obligation to
Brown of the Federal Reserve change to date, economist Richard protect the interests of future gen-
Bank of Dallas estimates that if Tol analyzed 103 estimates of the erations, because people who are
the United States attempted to cut marginal damage of CO2 emissions not yet born cannot express their
emissions by the amount required from 28 published studies. He con- own future preferences. However,
by the Kyoto Protocol, GDP in cluded that with reasonable assump- the choice of which discount rate to
2010 would be $275.2 billion to tions about future harms, emission use is not about the weight to give
$467.8 billion lower than oth- scenarios and technological change, the well-being of future genera-
erwise — representing a loss of it was very unlikely the social costs tions but about opportunity costs.
$921 to $1,565 per person.5 would top $14 per ton and would Investments people make today are
probably be closer to $2 per ton.7 likely to increase the wealth of their
■■ The United Nations has calcu- descendants, giving future genera-
lated that stabilizing CO2 levels On the other hand, the Stern tions greater resources to exercise
at 550 parts per million (which Review of the Economics of Climate their preferences regarding environ-
4
mental protection. The higher the
rate of return earned on a dollar in- Figure I
vested today, the more wealth future Fossil Fuel Subsidies in Developing Countries
generations are deprived of if the
money is spent now. Thus, Kevin
Murphy of the University of Chi-
cago argues that the market interest
rate should be used as the discount
rate because that is the opportunity
cost of spending money on climate
mitigation.8
Interestingly, Stern’s own model
assumes that people 200 years from
now will have real incomes that are
more than 10 times incomes today.
This means that if the government
taxes people today — either explic-
itly or through regulations — to
reduce climate change in 200 years,
the government will be taxing the
poor to help the rich.
Source: World Energy Outlook 2006, International Energy Agency, p. 280.
Environmental interest groups
have seized upon Stern’s extreme
estimates to lobby for substantial,
immediate action to cut greenhouse posed to limit emissions to the level sibly under $100. These figures, if
gas emissions. These actions could required to minimize the social cost, applied globally, would still impose
include a cap-and-trade system or a how would it affect electricity and high energy costs on developing
tax on the carbon content of fos- gasoline prices? countries, severely retarding devel-
sil fuels, including oil, natural gas opment in these poor regions.
and coal.9 A carbon tax would raise Assuming the average U.S.
the cost of a gallon of gasoline or a household uses 10,600 kWh of elec-
tricity and 1,143 gallons of gaso- In contrast to the economic costs
kilowatt-hour (kWh) of electricity
line annually, increasing the cost that limits on greenhouse gas emis-
generated by coal or natural gas.
of energy derived from fossil fuels sions will impose, this study recom-
The rate of the tax could be in-
by $85 per ton of emissions would mends policies that would bring
creased until the estimated costs of
result in additional annual energy substantial economic gains to soci-
climate change are recouped by so-
expenditures per household of just ety. Thus, regardless of the threat
ciety or (at what may be a different
under $1,500. This would surely posed by global warming, these
tax rate) greenhouse gas emissions
discourage some energy use. [See policies should be adopted on their
are reduced to the desired level.
Table I.] own merits. They will substantially
improve energy efficiency, reduce
If Stern’s estimated $85 per ton Using more realistic discount emissions or expand the capabil-
social cost for CO2 emissions were rates, the likely cost of those emis- ity of society to deal with climate
used to set a carbon tax rate, or a sions is at most just under $500 per change, which are important ancil-
cap-and-trade scheme were im- household annually and quite pos- lary benefits.
5
10 Cool Global Warming Policies
Table II
Energy Subsidies, Fiscal Years 2007 and 2008
(millions of 2007 dollars)
$ $ $ $ $
$ $ $ $ $
Source: “Federal Financial Interventions and Subsidies in Energy Markets 2007,” Energy Information Administration, Executive
Summary, Table ES1.
No. 1: Eliminate All The International Energy Agency subsidies include grants to produc-
Subsidies for Fuel Use (IEA) estimates that developing ers and consumers, government
countries spend around $220 billion investment in research or infra-
While many governments of de- annually on subsidies for energy structure and preferential loans or
veloped nations argue for a world- production and consumption, of tax treatment. Indirect subsidies
wide reduction in fossil fuel use in which $170 billion subsidizes fossil include trade restrictions, price caps
order to combat climate change, fuels [see Figure I].11 Including and market regulations that guaran-
those same governments also subsi- developed countries, subsidies for tee sales volume and restrict com-
dize energy use and production. energy production and consumption petition.
worldwide amount to around $300
Subsidies Worldwide. In 2001, billion, the majority of which are Many signatories to Kyoto sub-
the countries of the EU-15 (the “old for fossil fuels.12 sidize carbon-based fuel use and
Europe” nations in the European production. Such subsidies “tilt
Union) spent $16.77 billion (in Such subsidies reduce energy the playing field,” discouraging
2009 dollars) subsidizing coal and prices below what the market would research expenditures by private
$11.23 billion subsidizing oil and set, encouraging greater use and energy companies in developing
gas.10 raising emissions levels. Direct alternative energy sources. Produc-
6
ers and consumers of other energy ■■ It spent an additional $5 billion schedule for investment in new
sources then demand subsidies to for renewable energy production capital stock with immediate ex-
“level the playing field.” Thus, and use, mostly in the form of tax pensing.17 New equipment almost
government intervention causes breaks. always produces fewer emissions
significant distortions in energy per unit of output than older equip-
markets. ment. Changing the depreciation
schedule so that new investments
British Petroleum estimates that “Governments could be written off immediately
countries that subsidize transporta- would make it profitable to replace
tion fuel use accounted for 96 per- Insert callout
subsidize energyhere.
use old equipment at a much quicker
cent of the increase in oil demand and production.” pace. This simple change could do
in 2007.13 Many of them are less- more to increase energy efficiency
developed nations that subsidize throughout the economy than the
both production and consumption current complicated expensing
of fuels. The IEA estimates that ■■ Finally, $1.2 billion went to the regime.
removing domestic price subsidies nuclear industry.
in China, India, Indonesia, Iran, Why Is This a No-Regrets
Russia, Kazakhstan, South Africa The EIA found that subsidies Policy? Subsidies for energy
and Venezuela would reduce global doubled from 1999 to 2007, due research and development (R &D)
energy use 3.5 percent and reduce mainly to expanded subsidies for cost taxpayers millions of dollars
global CO2 emissions 4.6 percent.14 renewable energy and clean-coal but produce minimal benefits.18
technology. The Congressional Budget Office
U.S. Energy Subsidies. The and other analysts note that federal
Policy Recommendations.
U.S. Energy Information Adminis- R&D money rarely produces com-
There are a number of neutral
tration (EIA) calculates that federal mercially viable technologies. In
energy policies that could be imple-
energy subsidies amount to $16 bil- response to consumer demand or in
mented at the national or interna-
lion annually [see Table II]: 15 search of efficiencies, the private
tional level to reduce subsidized
sector invests in technologies with
production and use:
the potential for marketable innova-
■■ In 2007, the federal government
■■ International trade talks should tions. On the other hand, govern-
spent approximately $5.5 billion ment R&D funding has often been
include eliminating subsidies for
on subsidies for the coal, oil and allocated on the basis of political
fossil fuel production and con-
natural gas industries— princi- favoritism. For example, taxpayers
sumption.
pally tax breaks for investment invested about $1.5 billion in the
— including $3 billion for coal ■■ National budgets should be re- Big Three automakers in an effort
and natural gas, and more than $2 viewed with the goal of elimi- to develop hybrid engine technol-
billion for research and develop- nating programs that encourage ogy, but privately financed Japanese
ment of clean-coal technology to energy use. research rendered the technology
reduce greenhouse gas emissions obsolete.19
from coal. ■■ Subsidies and tax breaks, or tax
penalties, for specific energy
technologies should be elimi- An international agreement
■■ The government spent an addi- with binding targets to end energy
nated to remove price distortions
tional $1.2 billion for electricity subsidies would arguably reduce
in energy markets.16
production and use (not fuel spe- emissions to a greater extent and at
cific), and $2.8 billion to increase A neutral energy tax policy, for a lower cost than Kyoto-type agree-
the energy efficiency of homes example, would include replac- ments. It would combat energy
and businesses. ing the federal tax-depreciation obesity worldwide rather than force
7
10 Cool Global Warming Policies
tons of CO2 emissions annually are
Figure II avoided due to nuclear-generated
Comparison of Life-Cycle Emissions electricity. Worldwide, nuclear gen-
(Tons of CO2 Equivalent per GWh) eration reduces emissions by almost
1,041 2 billion metric tons below what
they otherwise would be.
However, due to environmental
antinuclear activism, which began
in the 1970s, building a nuclear
622 plant takes a very long time. This
raises development and construction
costs to the level that nuclear power
is not economically competitive
with forms of electricity generation
that emit greenhouse gases, such as
coal and natural gas. According to
the Nuclear Energy Institute, build-
46 39 ing a new nuclear power plant takes
18 17 15 14 10 years from concept to operation,
Coal
only four years of which is needed
Natural Biomass Solar PV Hydro Nuclear Geo- Wind
Gas thermal for actual construction. The ad-
Note: GWh denotes one billion watt-hours.
ditional time is consumed by per-
mit application development (two
Source: “Life-Cycle Assessment of Electricity Generation Systems and Applications for Climate years) and decision making by the
Change Policy Analysis,” Paul J. Meier, University of Wisconsin-Madison, August 2002.
Nuclear Regulatory Commission
(four years).
an energy starvation diet on devel- developed countries to radically
The application and approval
oped countries that have the highest alter their energy and transporta-
process has been streamlined over
costs of avoidance and account for a tion infrastructure. Although no
the past decade, but more needs to
shrinking share of emissions. such agreement has been proposed,
be done. A potential nuclear power
it would make sense as part of the
plant builder who has not yet de-
Kyoto and more recent propos- Obama administration’s new ap-
cided to begin construction can file
als would have almost no effect on proach to international energy
an Early Site Permit application, but
overall emissions since they do not policy.
it takes an average of 33 months for
include fast-growing developing the Nuclear Regulatory Commis-
countries, such as China (now the sion to review it. By contrast, the
No. 1 CO2 emitter). The United
No. 2: Reduce Regulatory
United Kingdom is introducing a
Nations projects that these countries Barriers to New Nuclear new licensing process under which
will produce the vast majority of Power Plants planning, application and licensing
future CO2 emissions. By contrast, together will take no longer than 18
an agreement to end energy subsi- Currently, nuclear power is the months.20 This shows there is con-
dies that includes developing coun- only technology capable of provid- siderable scope for reducing regula-
tries would be less costly because ing emissions-free energy on the tory delays.
preventing and/or reducing future scale required to significantly re-
emissions in developing coun- duce carbon emissions. In the Unit- Policy Recommendations.
tries is less expensive than forcing ed States, almost 700 million metric There are policy changes that can
8
significantly cut the costs of nuclear making this a wide-reaching no- power plants. Power plants fueled
power-plant construction and make regrets policy. by coal, natural gas or nuclear fuel
nuclear power more competitive are the only reliable sources for
Ease immigration requirements
with other generation technologies. baseload power (required to keep
for skilled workers. The aging U.S.
nuclear industry is losing skilled electric power flowing) and peak-
Put the industry in charge of ing power (required to meet daily
workers to other careers or retire-
fuel cycle management. Under spikes in demand). Natural gas and
ment. Unfortunately, the employ-
the Energy Policy Act of 1982, coal both emit CO2 as a byproduct
ment of highly skilled immigrant
the federal government was sup- of combustion. [See Figure II.]
workers is severely limited by the
posed to collect and manage spent Absent a significant breakthrough
highly restrictive H1-B visa pro-
nuclear fuel. Despite failing to do in the capture of carbon, nuclear
cess. Reforming this process would
so, it continues to collect fees for fuel, which emits no CO2, is clearly
greatly increase the labor pool
that purpose. The industry should preferable for electric power. In-
available and lower costs.
have the responsibility and ability creasing nuclear power generation
to decide how to dispose of the fuel Remove regulatory barriers to can supply the energy needed for
safely. Without an effective and uranium mining. The industry will continued growth while reducing
agreed-upon approach to the man- need fuel supplies, and various reg- future carbon emissions.
agement of nuclear waste, nuclear ulatory barriers restrict exploration
power is likely to remain too risky
an investment.
and mining of domestic uranium No. 3: Reduce Wildfires
on both public and private lands.
These barriers must be removed. through Alternative Forest
Remove commodity tariffs. Management Institutions
Prices for vital construction mate-
Forests are carbon sinks: As trees
rials such as steel and cement are
grow they remove carbon dioxide
artificially inflated by tariffs. Re-
from the atmosphere and store it in
moving import tariffs would reduce
their trunks, limbs and roots. In ad-
construction costs. For example, “Nuclear power is dition, forest soils, made up of dead
large amounts of concrete are used Insert callout here.
emissions-free.” organic matter built up over time,
in the construction of nuclear power
store a large amount of carbon. The
stations, but thanks to high tariffs,
canopy provided by densely packed
the United States is experiencing a
tropical and temperate forests slow
cement shortage. Cement produc-
the decay of fallen leaves and other
ers such as Mexico have found that
organic matter, slowing the release
it is more profitable to send ship- Why Is This a No-Regrets
of carbon and facilitating its incor-
ments to China than to the United Policy? Over the next 20 years,
poration into the soil.
States because of a 40 percent U.S. U.S. electricity demand is expected
import tariff. In 2004, the Portland to increase more than 45 percent. A 40-year study of African, Asian
Cement Association, a trade group Even the most comprehensive and South American tropical forests
representing American and Cana- conservation and efficiency efforts found that each year tropical forests
dian companies, found that 29 states would offset less than one-fourth of absorb as much as 18 percent of all
were experiencing shortages despite this increase in demand. Not count- the CO2 emitted by burning fossil
the fact that virtually all U.S. ce- ing hydropower, the rated capacity fuels.21 Temperate forests in the
ment plants were working around of all renewable energy combined is United States also absorb and store
the clock, seven days a week. Lift- less than 2 percent of total generat- carbon. In 2004, the Environmental
ing or reducing the tariffs would ing capacity. Furthermore, intermit- Protection Agency (EPA) estimated
obviously benefit other areas of the tent sources of electric power, such that forests sequestered 10.6 percent
economy, such as home building, as solar and wind, require redundant of the CO2 released by the combus-
910 Cool Global Warming Policies
its energy, agriculture and waste
Figure III sectors combined.27
National Fire Statistics, 1998 and 2007 How Government Owner-
ship Contributes to Forest Fires.
9,328,045 Large-scale forest fires are primar-
acres ily the result of poor management
of publicly owned forests. Federal
mismanagement of U.S. forests has
increased the number, size and cost
of wildfires over the past decade.
[See Figure III.] Historically, the
national forests have been logged
to provide lumber for commercial
1,329,704 activities, to prevent wildfires and
acres to promote forest recreation, species
81,043 85,705
fires fires protection and land management.
In recent decades, political pressure
and lawsuits from environmental
lobbyists prevented or delayed both
1998 2007
commercial and salvage logging,
Source: National Interagency Fire Service. turning much of our national forests
into tinderboxes.
tion of fossil fuels, with urban trees ■■ Pine beetle infestations have Policy Recommendations.
absorbing another 1.5 percent.22 killed so many trees in Western Changing the management structure
Other research indicates that U.S. Canada that they have contrib- of national forests could enhance
forests may sequester as much as 40 uted to a rise in large wildfires, the quality and value of these lands.
percent of U.S. human greenhouse turning Canadian forests from a
gas emissions.23 net carbon sink that absorbs 55 Privatizing the forests. The
million tons of CO2 per year into private sector currently preserves,
Forest Fires Are a Growing a net emitter of up to 245 million protects and promotes many his-
Climate Concern. Unfortunately, tons annually.25 torically important properties and
poor forest management in the Unit- manages the majority of the coun-
ed States and other countries con- ■■ The Australian government cal- try’s forests and rangelands in ways
tributes to wildfires, which directly culated that wildfires in 2003 re- that promote environmental qual-
add carbon to the atmosphere and leased more than 190 million tons ity and benefit the owners and the
reduce the amount of CO2 absorbed of CO2, accounting for one-third public. The United States can safely
by forests. For instance: of the country’s total emissions, and perhaps profitably sell some of
and it found that fires in 2006 and the hundreds of millions of acres of
2007 released an additional 360 national forests for market value,
■■ Wildfires in the United States million tons of CO2.26 giving the owners of adjacent prop-
release about 290 million metric erties priority for ownership.
tons of CO2 into the atmosphere ■■ In terms of total CO2 emissions,
every year — equaling as much Indonesia is the third-largest Possible buyers include forest
as 6 percent of the nation’s an- emitter worldwide due largely product companies, sportsmen’s
nual emissions from burning fos- to its annual wildfires — which clubs and environmental groups.
sil fuels.24 emit nearly five times as much as While these lands will no longer be
10public forests, many and perhaps ■■ Spent millions of dollars to re- national forests, but there are vari-
most will be managed sustainably, forest the burned land, planting ous mechanisms or institutional ar-
in ways that protect their natural nearly one million seedlings of rangements that would confer many
character and enhance their en- seven different tree species. of the benefits of ownership without
vironmental and economic value removing land entirely from public
By contrast:
because of the incentives of private control.
ownership. Private companies do ■■ The Forest Service removed
not have the general treasury to dead trees and other fuels from For instance, following a sugges-
bail out money-losing operations only 1,206 acres and replanted tion by economists Richard Stroup
and therefore seek to maintain the 230 acres in the Lassen National and John Baden, Congress could
value of their lands. Furthermore, Forest. establish Wilderness Endowment
privatizing public lands would Boards to own and manage national
■■ In the Plumas National Forest, forests lands.29 These government-
increase the tax base in rural areas the Forest Service was prevented
and reduce the strain on the federal chartered, nonprofit entities, whose
from removing dead trees and re- board members would be approved
budget. forested only 181 acres. by Congress, would have a narrow-
Public versus Private Manage- ly defined fiduciary duty to protect
ment. Private property owners and enhance the natural values of
have flexibility in managing their the land under their charge. Ac-
lands, whereas federal forest man- “Forest fires tivities such as oil and gas produc-
tion, commercial hunting and other
agement is too often hampered Insert callout
release CO here.
.” resource production could enhance
by rigidity. For instance, when a 2
wildfire struck near Storrie, Calif., forests without hurting the environ-
in August 2000, more than 55,000 ment; such is the case with proper-
acres burned, mostly in the Plumas ties managed by the Audubon Soci-
National Forest (28,000 acres) and ety and the Nature Conservancy.
Lassen National Forest (27,000 Private forest owners are not Each individual board would
acres). About 3,200 acres of private hindered by bureaucratic federal decide how to balance use, recre-
forestland managed by W.M. Beaty rules requiring multiple studies, ational access and strict “off-limits”
and Associates also burned. How- public hearings, comment periods preservation, bound only by their
ever, the Forest Service and Beaty’s and court challenges. Thus, they understanding of what is necessary
responses couldn’t have been more are better able to prevent infesta- to preserve and enhance the land
different. By 2001, Beaty foresters tions and respond quickly to disease while generating the revenues nec-
had:28 outbreaks. Promptly removing essary to manage it.
dead and dying timber can prevent
■■ Reduced the chance of a future infestations from spreading to other Reintroducing Competition.
catastrophic wildfire by remov- areas and prevent potentially cata- Public lands retained by the federal
ing smaller dead trees and woody strophic fires. Private companies government could still receive some
material — generating enough keep the number of trees per acre at of the environmental benefits of
clean biomass to fuel 3,600 an optimal level. This reduces fire private ownership if federal, state
homes for a year. hazards and lets sunlight reach the and local governments competed
forest floor, which helps regrowth for control of these lands within
■■ Harvested larger dead trees and biodiversity. the public system.30 For example,
suitable for lumber processing teams of experts from federal and
— amounting to 64.5 million Alternatives to Outright Priva- state agencies, environmental orga-
board feet, enough to build 4,300 tization. For political reasons, it nizations and the timber industry in
homes. may be impossible to sell certain Montana and Minnesota compared
1110 Cool Global Warming Policies
the environmental effects of state to improve performance or risk los- a higher rate than existing varieties.
and federal forest management ing control over the lands. Such trees can be planted in forests
practices.31 They all concluded where commercial timber produc-
that state foresters better protected Why Is This a No-Regrets ers are operating and in tropical
watersheds and waterways from the Policy? Any of the management forests previously lost to slash-and-
impacts of logging and other activi- regimes suggested above should burn agriculture. In addition, the
ties: decrease the size, intensity and adoption of new biotech crops that
frequency of wildfires, meaning increase yields, improve nutrition
■■ In Minnesota, 90 percent of less CO2 will be pumped into the and/or reduce the need for such in-
county lands had the highest atmosphere each year and more car- puts as fertilizers should also reduce
compliance rate with “best man- bon stored. Also, where there are stress on tropical forests by reduc-
agement practices” for protecting currently more dead or dying trees ing the need of farmers to move
water quality; federal forests had or in burnt-over areas, trees will from one forest plot to the next to
a slightly lower compliance rate be replanted at a more rapid rate, maintain annual production.
at 87 percent. increasing the carbon uptake of the
■■ In Montana, 99 percent of the nation’s forests.
No. 4: Liberalize Approval
watersheds in state forests were
protected from all impacts from of Biotechnology
logging, compared to 92 percent The 1995 introduction of ge-
in federal forests. netically engineered, or biotech,
Congress could allow any state “Well-managed forests crops in the United States and other
or county that demonstrates supe- Insert callout
absorb here.
CO .” countries provided farmers with a
rior economic and environmental 2 valuable tool to increase farm yields
performance to take over the man- while protecting the environment.
agement of the national forests However, a maze of scientifically
within their state or area. Congress indefensible rules governing the
could give fixed but declining block testing, development and sale of
grants during a transition period to When pest infestations and fires biotech seeds, plants and the foods
the forestry agencies that apply and do occur, the incentives for the new derived from them has greatly hin-
allow them to retain any revenues “owners” will be to help the forest dered the use of biotechnology to
generated. The program should recover as soon as possible in order benefit the environment.
be allowed to run for several years to help wildlife recover, reduce soil
erosion and stream destruction, Environmental Benefits of Bio-
so state and county foresters could
restart natural ecological cycle and/ tech Crops. Crops have been ge-
counteract the effects of federal
mismanagement. or make a profit. netically engineered to grow more
robustly with less pesticides and
At the end of the trial, states and What about international for- herbicides and to resist several plant
counties that have improved a for- ests? Despite the various legal diseases that reduce yields. In 2001
est’s economic and environmental systems and property rights regimes alone, biotechnology-derived plants
performance could be granted the around the world, all forests should increased U.S. food production by
forests outright and federal pay- benefit from a no-regrets solution approximately 4 billion pounds,
ments ended. If forests have not suggested in the next section: the saved $1.2 billion in production
improved, they could be returned widespread adoption of agricultural costs and decreased pesticide use
to federal control and new manage- biotechnological innovations. As by about 46 million pounds.32 They
ment experiments implemented. mentioned below, scientists are have improved air, soil and water
This program would provide Forest genetically engineering trees that quality as a consequence of reduced
Service managers with an incentive grow faster and can store carbon at tillage, less chemical spraying and
12fuel savings, and they have en-
hanced biodiversity as a conse- Figure IV
quence of lower insecticide use.33 Annual Flood Damage Averaged Over 10-Year Periods
Scientists from Louisiana State (billions of 2002 dollars)
$6.4
University and Auburn University
found that fewer natural resources
are consumed to manufacture and Total: $32.8 Billion
transport pesticides when farmers
plant bioengineered pest-resistant $4.2
cotton. They estimate that biotech $3.8 $4.0
cotton saved 3.4 million pounds $3.5
of raw materials and 1.4 million $3.2
pounds of fuel oil in 2000 that
would otherwise have been con- $2.2
$2.0 $1.9
sumed in the manufacture and dis- $1.8
tribution of synthetic insecticides.
Additionally, 2.16 million pounds
of industrial waste were eliminated.
Farmers used 2.4 million gallons
less fuel, 93 million gallons less 1903– 1913– 1923– 1933– 1943– 1953– 1963– 1973– 1983– 1993–
water and saved 410,000 hours of 1912 1922 1932 1942 1952 1962 1972 1982 1992 2002
labor.
Source: National Weather Service estimates.
Genetically engineered herbicide-
tolerant crops have encouraged
farmers to adopt practices that
reduce tillage or eliminate it alto- end-use losses are estimated to be veloped. Such trees can also be
gether.34 Low-tillage practices can as high as 47 percent worldwide.37 logged, thereby saving existing old-
decrease soil erosion up to 90 per- All of these changes would further growth forest and also, by virtue of
cent, compared with conventional reduce energy use and consequent their fast growth, take up far less
cultivation. This saves valuable emissions in both food production land area than traditional lumber
topsoil, improves soil fertility and and transport. sources.
dramatically reduces sedimentation Potential Carbon Sequestra-
in lakes, ponds and waterways.35 tion. Plants by their very nature ab- Adaptation to Climate Change.
sorb carbon when growing, thereby Biotechnology can also be used to
Crop varieties — such as corn, sequestering it in their bodies and develop crops that are more resis-
wheat and other crops — are be- remains. In fact, most fossil fuels tant to climate extremes and thus
ing developed that are drought and today are a result of carbon seques- to problems that global warming
heat tolerant, have increased soil- tration by plants during the Car- might exacerbate. Some research-
nutrient uptake and can grow in boniferous era. Biotechnology also ers have argued that global warming
salty and acidic soils. They could increases the carbon-sequestration will increase drought, making some
increase agricultural productiv- potential of agriculture.38 currently arable land unsuitable
ity dramatically.36 Even delaying for agriculture and making current
ripening of fruits and vegetables For example, faster growing drought-prone or arid lands even
could substantially enhance food varieties of trees that absorb large drier. Thus, developing crops that
supplies because post-harvest and amounts of CO2 are being de- could be grown on arid lands would
1310 Cool Global Warming Policies
be a positive adaptation in the face found that biotech plants and foods Policy Recommendations.
of rising population. pose no new or unique risks and Changing current policies regarding
require no different standards or biotechnology can have many posi-
Indeed, scientists are using safety regulations than conventional tive effects, whether or not global
biotechnology to create varieties crops.43 However, these regulations warming imposes significant harms
of corn, wheat and other crops that impose vastly higher burdens on on society.
can thrive with little water. As the biotech varieties, and the expense
world’s population expands and of complying with these regula- Eliminate or reduce barriers.
global warming alters weather pat- tions makes it uneconomical to use Eliminating or reducing the amount
terns, water shortages are expected biotechnology for all but the largest of time needed for biotech crops to
to hinder efforts to grow more commodity crops.44 be approved would substantially
food.39 Although people consume increase food production around the
only a quart or two of water every world. It would also allow develop-
day, the plants and meat they eat in ing countries to adopt these crops,
a typical day require 2,000 to 3,000 contributing to the incomes of
quarts to produce. these agricultural nations. Thus, the
increased yield from the adoption of
Although genetically enhanced “Biotech crops can feed these crops would benefit farmers,
varieties of major commodity crops
Insert callout
a warming here.
world.” consumers and the environment.
have been introduced in the United
States and nearly two dozen other Why Is This a No-Regrets
countries, their broader adoption Policy? Biotechnology can lower
has been hampered by burdensome emissions by reducing the amount
and scientifically unjustifiable regu- of energy used to produce food and
latory hurdles and, in many cases, Many countries have effectively by providing greater sequestration
outright bans. In the United States, banned biotech crops altogether. potential. It also makes it easier
all new biotech crop varieties are Despite the favorable recommenda- to feed vulnerable populations if
regulated by the U.S. Department of tion of the relevant scientific com- global warming results in increased
Agriculture (USDA), which treats mittees, members of the European drought or threatens the failure of
them as posing a threat of invasive- Union and others use a highly po- traditional crops.
ness or “weediness” until several liticized regulatory system to reject
years’ worth of tightly controlled approval of most biotech varieties.45
field testing demonstrates that they Consequently, many of the poor- No. 5: Repeal the
will not be “injurious to agricul- est nations in Africa and Asia have National Flood Insurance
ture.”40 The EPA also regulates been reluctant to approve biotech Program
biotech varieties that are engineered crop varieties for fear of jeopar-
to resist insects and other pests or dizing important export markets. Sea levels are predicted to rise
plant diseases under rules similar For example, even though several as a result of thermal expansion
to those governing chemical pes- insect-resistant, pathogen-resistant and melting glaciers, principally in
ticides.41 Furthermore, the safety and herbicide-tolerant rice variet- Greenland and Antarctica.47 Much
of biotech foods is regulated by ies have been developed by Asian, of the concern over the potential
the Food and Drug Administration North American and European harm of global warming to the Unit-
(FDA).42 Countless scientific bod- scientists using biotech methods, ed States relates to coastal flood-
ies — including the U.S. National none are commercially available in ing as a result of higher sea levels.
Academy of Sciences, the American Asia because European commodity However, much of the investment in
Medical Association and the Insti- shippers have threatened to boycott potentially vulnerable areas is a re-
tute of Food Technologists — have nations that adopt biotech rice.46 sult of the National Flood Insurance
14Program (NFIP). This 41-year-old The NFIP subsidizes premiums convert them to more flood-resistant
program has arguably outgrown its for roughly 20 percent of the cov- uses — such as golf courses and
original purpose, which was to pro- ered properties, most of which were parks. Buyouts would be an impor-
vide temporary flood insurance to developed prior to the program’s tant component of any “exit strat-
property owners who were unaware beginning in 1968. The other 80 egy” for the NFIP and some parcels
they were in flood-prone areas.48 percent of properties pay premi- of land are particularly suitable for
Because of full-disclosure mortgage ums that actuaries believe will be conversion to other uses. However,
and insurance requirements, nearly adequate, over time, for the NFIP buyouts alone cannot solve the pro-
all current owners were aware of to break even. But these premiums gram’s problems.
their area’s flood problems when are inadequate for two reasons.
they purchased or developed their First, the maps used to determine Sell the program’s assets. Many
properties. Today, federally subsi- the risk of flooding and thereby set NFIP policies have some value on
dized flood insurance encourages NFIP premiums are inaccurate and the private market. Estimating their
people to build homes where they out of date. Second, the premiums value would be almost impossible
otherwise would not. It encourages don’t reflect the risks associated today, because there is no market
lenders to finance mortgages they with some contingencies — such as price for the insurance. One way
otherwise would not. Today, NFIP major catastrophes — that private to create a market for the policies
covers almost 5 million homes in insurers consider. would be to divide them into portfo-
more than 20,000 communities. lios and sell them at auction. Such
This program offers insurance at sales would greatly reduce the gov-
subsidized rates for properties that ernment’s role in flood insurance
are prone to flooding. Thus, it en- “Subsidized flood
and would deprive the government
courages high-risk development and of revenues to subsidize the worst
harms environmentally sensitive ar- insurance promotes flooding risks. Without internal
eas, including wetlands, floodplains
Insert callout
dangerous here.
coastal subsidies, some properties would be
and coastal marshes. The program uninsurable, resulting in significant
development.” losses to the owners. However, the
creates a moral hazard — meaning
it encourages people to take greater question of what to do about these
risks because the government helps uninsurable risks should not slow
bear those risks. Frequently, the re- reform.
The NFIP guarantees payments
sult is lost lives, destroyed property, of damage claims on insured prop-
livelihoods and environmental de- Phase out the program. After
erties. If the program runs out of selling the bulk of the NFIP’s poli-
struction. Thus, ending the program money to pay claims, it has the
would be a valuable adaptation to a cies, the program could be phased
authority to borrow from the U.S. out with a tax credit or grant pro-
world with rising sea levels, as well Treasury. Thus, payouts are de
as discouraging development that gram. Insured owners could be
facto guaranteed by the federal given either a one-time grant pro-
creates problems today. government. The program has been portional to the decline in the value
bailed out by taxpayers twice. of their property resulting from the
Flood Insurance Subsidies.
Historically, the NFIP retarded the Policy Recommendations. The NFIP’s termination or more mod-
development of private flood insur- following reforms would eliminate est ongoing subsidies for a limited
ance in the United States, because NFIP subsidies and reduce the po- time.50
it was created when the private tential cost of coastal flooding.
sector was just beginning to offer Buy some properties. In some Why Is This a No-Regrets
flood protection. Thus, the NFIP cases, government, private industry Policy? Reform of the NFIP would
displaced the emerging private or a combination of the two might reduce the moral hazard involved in
market.49 buy NFIP-insured properties and building on vulnerable land, trans-
1510 Cool Global Warming Policies
ferring the risk from taxpayers to year in the past 10 years.54 [See No. 6: Increase Use
the private sector. Figure IV.] of Toll Roads with
■■ In 2004 alone, FEMA received Congestion Pricing, and
Reduce costs to taxpayers. The
NFIP continues to pay claims for 1.3 million applications for fed- No. 7: Remove Older Cars
homes damaged or destroyed by eral disaster assistance due to from the Road
hurricanes and tropical storms —
floods, mudslides and other natural Worldwide, road transportation
far exceeding the number for any
disasters without requiring hom- vehicles account for approximately
comparable past period.55
eowners to relocate. Homeowners 10 percent of net greenhouse gas
can use the money to rebuild in the emissions.59 For developed coun-
same location, and the new home tries, the percentage is even higher:
is also eligible for NFIP coverage.
According to the Federal Emergen- “Developers rebuild ■■ Transportation accounts for 27
cy Management Agency (FEMA), on flood-prone
Insert callout here. percent of the European Union’s
repetitive claims are the most CO2 emissions.
significant factor in increasing flood properties.”
insurance costs. ■■ Road transportation comprises
about 80 percent, with automo-
biles accounting for more than
■■ NFIP pays claims averaging $200
half.60
million per year for about 40,000 Reduce the at-risk population.
repetitively flooded properties.51 The National Climatic Data Cen- ■■ In the United States, the trans-
ter says that increased population portation sector accounts for 33
■■ Since its creation in 1968, the and development of coastal areas percent of CO2 emissions, and 60
NFIP has paid out nearly $1 bil- are responsible for the increase in percent of the transportation total
lion for at least 10,000 proper- losses due to hurricanes.56 Accord- comes from personal vehicles.61
ties that have experienced two ing to the 2000 U.S. Census, more
or more losses, with cumulative than half of Americans live within Transportation represents a
claims often exceeding the value 50 miles of a coast, and by 2025, growing portion of CO2 emissions
of the property.52 75 percent will.57 Indeed, the Heinz in developing countries. Growing
Center, an environmental research automobile ownership is one reason
institute, determined that in the ab- why China has surpassed the United
Reduce subsidies for development
sence of insurance and flood control States in CO2 emissions. In March
in at-risk areas. The Government 2009, China’s auto sales exceeded
programs, development density in
Accountability Office reports that
areas at high risk of flooding would those in the United States for the
90 percent of all natural disasters third straight month.62
be about 25 percent lower than in
involve flooding.53 Although they
areas at low risk of flooding.58
are called “natural” disasters, many In addition to increasing the fuel
would not be nearly as destructive economy of passenger vehicles,
The private sector will respond
had people and property not been CO2 emissions per mile of travel
more quickly than government if
placed in harm’s way. could be reduced by relieving traf-
threats from global warming in-
crease, thereby reducing the likely fic congestion and removing older
■■ Flood damage costs increased damage. If global warming turns vehicles from the road.
from an average of $2.6 billion out not to be a problem, the reforms
per year (in 2002 dollars) dur- would still produce significant Increasing Traffic Congestion.
ing the first half of the 20th cen- benefits by eliminating the market In the United States, a significant
tury to more than $6 billion per distortion created by the NFIP. amount of automobile CO2 emis-
16sions result from growing conges- ■■ New cars emit 90 percent less personal and environmental costs of
tion on the nation’s roads. Conges- air pollution than cars from the driving.
tion increases travel time, worsens 1960s.65
air pollution, increases CO2 emis- Expand the use of congestion
■■ Although driving is increasing by
sions and wastes fuel. According to pricing. Traditional toll roads are
1 to 3 percent per year, vehicle
the Texas Transportation Institute, established to fund the construction
emissions are dropping 10 per-
based on wasted time and fuel, con- and maintenance of the roadway.
cent annually on average.66
gestion in 437 urban areas cost the Congestion pricing is a market
nation about $78.2 billion in 2005.63 How bad is this problem? In mechanism seeking to reduce the
In these congested areas: a study of emissions in Chicago, personal, economic and environ-
University of Denver research mental costs associated with traffic
■■ The average cost per traveler was congestion. Congestion pricing
scientist Donald Stedman found that
$707 in 2005, up from $680 in charges varying fees for the use of
8 percent of the cars emitted more
2004 (using constant dollars). toll lanes or entrance ramps, with
than half of all of Chicago’s carbon
monoxide, with vehicles 5 years or higher fees during peak hours and
■■ Approximately 2.9 billion gallons
older accounting for 88 percent of lower fees during off-peak times.
of fuel were wasted, with 1.7 bil-
lion of that total wasted in areas the worst polluters.67 In addition:
It is estimated that as many as 25
with populations greater than 3
■■ According to the Brookings percent of drivers during rush hour
million. are on discretionary trips. Conges-
Institution, a California study es-
■■ The amount of wasted fuel per timates that although cars that are tion pricing should encourage driv-
traveler ranged from 38 gallons 13 years or older account for only ers to shift their discretionary trips
per year in the largest urban ar- 25 percent of the miles driven, to off-peak periods. Congestion
eas to 6 gallons per year in the they will produce 75 percent of pricing could also encourage people
smaller towns. all pollution from automobiles by to carpool, use public transit, com-
2010.68 bine multiple trips, find alternative
■■ Travel time during peak periods routes or change their work/living
increased by 38 hours a year, on ■■ Up to 60 percent of the pollutants locations to avoid the toll. These
average. that form smog are emitted by behavioral changes should decrease
fewer than 5 percent of the ve- traffic on all roads.
Another source of emissions hicles — almost all of them older
is older cars, or clunkers. Newer vehicles.69 To encourage widespread adop-
vehicles burn fuel more efficiently; tion of congestion pricing and road
since 1974, domestic new car fuel construction, the federal govern-
economy has increased 114 per- ment could restrict federal funding
cent ― 56 percent for light trucks.64 “Tollways reduce traffic or devote a share of the gas tax
Newer vehicles also have multiple, to new roads implementing such
improved pollution control monitors Insert callout
congestion here.
and vehicle systems. Alternatively, states could
and mechanisms that reduce emis- emissions.” sell the right to build new roads
sions. And because the vehicles are — with congestion pricing — to
newer, these controls work and the private toll companies and collect
engines are tuned. As a result, since taxes on generated revenue. Allow-
the 1970s: ing private companies to compete
Policy Recommendations. Re- for value-added toll road construc-
■■ Air quality has improved dra- ducing congestion and the num- tion and ownership should speed
matically across the board despite ber of older vehicles on the roads the pace of construction and reduce
increased travel. should diminish the economic, the need to increase gasoline taxes.
17You can also read
