The Climate-Industrial Complex

[Skull Pilot]

The Climate-Industrial Complex - WSJ.com

Some business leaders are cozying up with politicians and scientists to demand swift, drastic action on global warming. This is a new twist on a very old practice: companies using public policy to line their own pockets.

The tight relationship between the groups echoes the relationship among weapons makers, researchers and the U.S. military during the Cold War. President Dwight Eisenhower famously warned about the might of the "military-industrial complex," cautioning that "the potential for the disastrous rise of misplaced power exists and will persist." He worried that "there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties."

This is certainly true of climate change. We are told that very expensive carbon regulations are the only way to respond to global warming, despite ample evidence that this approach does not pass a basic cost-benefit test. We must ask whether a "climate-industrial complex" is emerging, pressing taxpayers to fork over money to please those who stand to gain.

This phenomenon will be on display at the World Business Summit on Climate Change in Copenhagen this weekend. The organizers -- the Copenhagen Climate Council -- hope to push political leaders into more drastic promises when they negotiate the Kyoto Protocol's replacement in December.

The opening keynote address is to be delivered by Al Gore, who actually represents all three groups: He is a politician, a campaigner and the chair of a green private-equity firm invested in products that a climate-scared world would buy.

Naturally, many CEOs are genuinely concerned about global warming. But many of the most vocal stand to profit from carbon regulations. The term used by economists for their behavior is "rent-seeking."

The world's largest wind-turbine manufacturer, Copenhagen Climate Council member Vestas, urges governments to invest heavily in the wind market. It sponsors CNN's "Climate in Peril" segment, increasing support for policies that would increase Vestas's earnings. A fellow council member, Mr. Gore's green investment firm Generation Investment Management, warns of a significant risk to the U.S. economy unless a price is quickly placed on carbon.

Even companies that are not heavily engaged in green business stand to gain. European energy companies made tens of billions of euros in the first years of the European Trading System when they received free carbon emission allocations.

American electricity utility Duke Energy, a member of the Copenhagen Climate Council, has long promoted a U.S. cap-and-trade scheme. Yet the company bitterly opposed the Warner-Lieberman bill in the U.S. Senate that would have created such a scheme because it did not include European-style handouts to coal companies. The Waxman-Markey bill in the House of Representatives promises to bring back the free lunch.

U.S. companies and interest groups involved with climate change hired 2,430 lobbyists just last year, up 300% from five years ago. Fifty of the biggest U.S. electric utilities -- including Duke -- spent $51 million on lobbyists in just six months.

The massive transfer of wealth that many businesses seek is not necessarily good for the rest of the economy. Spain has been proclaimed a global example in providing financial aid to renewable energy companies to create green jobs. But research shows that each new job cost Spain 571,138 euros, with subsidies of more than one million euros required to create each new job in the uncompetitive wind industry. Moreover, the programs resulted in the destruction of nearly 110,000 jobs elsewhere in the economy, or 2.2 jobs for every job created.

The cozy corporate-climate relationship was pioneered by Enron, which bought up renewable energy companies and credit-trading outfits while boasting of its relationship with green interest groups. When the Kyoto Protocol was signed, an internal memo was sent within Enron that stated, "If implemented, [the Kyoto Protocol] will do more to promote Enron's business than almost any other regulatory business."

The World Business Summit will hear from "science and public policy leaders" seemingly selected for their scary views of global warming. They include James Lovelock, who believes that much of Europe will be Saharan and London will be underwater within 30 years; Sir Crispin Tickell, who believes that the United Kingdom's population needs to be cut by two-thirds so the country can cope with global warming; and Timothy Flannery, who warns of sea level rises as high as "an eight-story building."

Free speech is important. But these visions of catastrophe are a long way outside of mainstream scientific opinion, and they go much further than the careful findings of the United Nations panel of climate change scientists. When it comes to sea-level rise, for example, the United Nations expects a rise of between seven and 23 inches by 2100 -- considerably less than a one-story building.

There would be an outcry -- and rightfully so -- if big oil organized a climate change conference and invited only climate-change deniers.

The partnership among self-interested businesses, grandstanding politicians and alarmist campaigners truly is an unholy alliance. The climate-industrial complex does not promote discussion on how to overcome this challenge in a way that will be best for everybody. We should not be surprised or impressed that those who stand to make a profit are among the loudest calling for politicians to act. Spending a fortune on global carbon regulations will benefit a few, but dearly cost everybody else.

Mr. Lomborg is director of the Copenhagen Consensus, a think tank, and author of "Cool It: The Skeptical Environmentalist's Guide to Global Warming" (Knopf, 2007).

Cap and trade is the worst idea.

Why is it that politicians seems to believe that raising the price of everything will be good for people?

And why is it that a tax break for going green is never discussed?

 

[editec]

Cap and trade is an attempt to finally put the cost of pollution on the cost of products.

While I completely understand that the net effect will be to make things more costly, and that it is highly probable that they're get it wrong anyway, in principle, forcing the consumers to pay for the environmental degradation that the products they use actually does make sense.

Pollution and the environmental damage it is causing is just Gods way of reminding us that there really is NO FREE LUNCH.

We all live downwind, folks.

 

[neurosport]

Cap and trade is the worst idea.

Why is it that politicians seems to believe that raising the price of everything will be good for people?

And why is it that a tax break for going green is never discussed?

the article was great. your comment not so good.

there is no difference between cap and trade and tax breaks. both would result in redistribution of resources in the economy from optimal to non optimal. the cost, in either scenario, is borne by EVERYBODY except the green companies themselves.

either you have free market or you have fascism. how you accomplish the latter is irrelevant.

man-made global warming is a massive scam.

we drink water poisoned with chlorine and fluoride. we eat genetically modified food poisoned with non-biodegradable pesticides. we do ABSOLUTELY NOTHING to end THAT yet we worry about the sea level rising one foot over the next 100 years DUE TO INCREASED SUN SPOT ACTIVITY.

 

[editec]

Neuro, what part of the TRUE cost of products was never actually computed is so hard for you to understand, exactly?

Costs not only include the enpense of making something, but the environmental damage that the product causes, too.

Now computing those damages is frught with potential mistakes, on that we can probably agree.

But adding the REAL costs of a product (from creation to elimination) does make sense, I think.

 

[Oddball]

Neuro, what part of the TRUE cost of products was never actually computed is so hard for you to understand, exactly?

Costs not only include the enpense of making something, but the environmental damage that the product causes, too.

Now computing those damages is frught with potential mistakes, on that we can probably agree.

But adding the REAL costs of a product (from creation to elimination) does make sense, I think.

....and would more than likely would be done by politicians, whose track record of guesstimating the costs of anything and everything is laughable.

FWIW, most of the nebulous costs of "environmental damage" are figured in by way of efficiency of production.....Waste = inefficiency, therefore affects the profit end of the balance sheet.

 

[editec]

Neuro, what part of the TRUE cost of products was never actually computed is so hard for you to understand, exactly?

Costs not only include the enpense of making something, but the environmental damage that the product causes, too.

Now computing those damages is frught with potential mistakes, on that we can probably agree.

But adding the REAL costs of a product (from creation to elimination) does make sense, I think.

....and would more than likely would be done by politicians, whose track record of guesstimating the costs of anything and everything is laughable.

Well nobody can argue with the complaint that something done badly is not a good thing, can they?

Its the principle of the concept which I accept as making sense.

FWIW, most of the nebulous costs of "environmental damage" are figured in by way of efficiency of production.....Waste = inefficiency, therefore affects the profit end of the balance sheet.

Not germane to the debate, I think

What was the cost to the corporation of dumping pollutants into the land and water before there were laws to prevent it?

Not a thing.

It saved them the cost of disposing of these waste properly.

It was, therefore, more "efficient" to pollute than it was to not pollute

But the cost of that pollution was an unpaid bill born by the environment that was being ruined.

Now cap and trade is seeking to add in the cost of pollution to the atmosphere to the accounting.

And yes, that means that we as consumers WILL be paying the bill for cap and trade, and it's going to be high, too

And YES, it very well may be damaging the economy, because, let's face it, not paying bills that are due IS cheaper than paying them.

And that's what mankind has been doing all along.

Not taking the cost of the pollution (and its effects on our environment) into account when it does it's accounting system.

There's nothing easy about getting this process right, and not much to like about it even if they do, either.

But its a market-driven way of accounting for the environemtnal damages which at least ATTEMPTS to motivate industries to create less environmentally damaging products in less environmentally damaging ways.

In the long run it's something that we have to do for the generations which follow ours.

And they'll have to do the same thing for the generations that follow them, too.



And it's GONNA SUCK that we have to foot the bill.

We aren't USED to paying that bill.

We've been getting a free ride but the party's over.