Delighted and Depressed

I’m pleased to announce that my blog website – An Economic View of the Environment – has been thoroughly cleaned and purged of the malware that had plagued it since the website was attacked in January.  That’s the source of my being delighted.

It’s probably not necessary to state that the source of my “depression” is the ongoing attack by President Trump and his administration on sensible public policy – in the environmental and energy realm, as well as so many others.  In nearly every case, the administration’s combination of incompetence and malevolence has been breathtaking.

Goodbye to the Malware Attack

As for the malware attack on my blog website, which occurred shortly after I had written and posted two blog essays that were harshly critical of Presidential candidate and then President-Elect Trump, quite a few of you wrote to me suggesting that the timing was not a coincidence and that the attack was probably from supporters of the administration (if not from people in the administration).  I do not believe that was the case, although I honestly don’t know.  Rather, I believe it was simply an attack intended to drive traffic to particular websites.  I’m hoping that the outside firm we hired to clean the site may be able to give us the answer.  Stay tuned for that.

Back to Business

Much has transpired since I announced the hiatus in my blog posts (An Explanation and Apology, February 5, 2017) and even more has transpired since I last wrote a regular essay here before the presidential inauguration (Trying to Remain Positive, January 3, 2017).  It would take more time than you or I have — for you to read and for me to write – about all that’s transpired in this policy realm since Inauguration Day, including:

Saving Us Time

Happily, I can save you time for reading – and myself for writing – by referring you to two new audio recordings:

Speaking of saving time, if you have time for only one of these, I suggest the second one, which is both briefer (about 17 minutes) and more comprehensive.

The Path Ahead

With my blog website having been purged of its contamination and with my feeling that I’ve more or less caught up, I will return to my usual approach with a brief essay in my next posting at this blog.  In the meantime, thanks for your tolerance of the recent hiatus and your interest in what transpires here.

An Explanation and Apology

I have been writing essays at this blog for more than seven years, and until recently, through 100 essays, I tried very hard to keep politics at bay, and to view each and every issue I discussed from a politically neutral, yet analytical economic perspective.

But in October, 2016, as the U.S. presidential election approached, I found it difficult – for the first time – to remain neutral, and in a blog essay, “This is Not a Time for Political Neutrality,” I carefully explained why I feared what the consequences would be for the United States and the world if Donald Trump were elected president.  I followed that up with a post-election essay in November, “What Does the Trump Victory Mean for Climate Change Policy?”  (I am not providing hyperlinks to those essays at my blog’s website for reasons that will be clear as you read on.)

For anyone who harbored hopes that Mr. Trump would change as an individual after his inauguration and/or that a Trump administration would not be as problematic (in so many dimensions) as many of us feared, the first two weeks have shown that the concerns were fully justified.

So, I have been eager to post a new essay, because the early days of the new administration have been very disturbing, along at least three dimensions:

First, the introduction and the announcement of plans to introduce public policies that are not simply conservative (which would be acceptable, given that the Republican candidate did win the election – no matter how problematic the methods of the campaign may have been).  Rather, these policies come from the extreme “Alt-Right,” including its base of xenophobia, veiled racism, and unapologetic sexism.  One, but only one set of these misguided policies has been in the area of my interest and expertise – environmental and natural resource policy, including climate change policy.  The combined intentions of the Administration and the Congress to turn back so many environmental and natural resource policies, ranging from climate change to water pollution, deserve a full assessment (at my blog and elsewhere).

Second, there is the glaring presence in the most important office in the land of an individual who – given that the nature of that office – should be serving as a positive and inspiring role model for others, including our young people, but instead repeatedly displays the basest of human traits.

Third, and of greatest concern to me, this President and his Administration – with the tacit support (for the time being) of majorities in both houses of Congress – increasingly represent the greatest threat to American democracy I have witnessed in the past half-century.  Gratuitous and unapologetic lies and distortions, total disregard – indeed, expressed contempt – for the separation of powers that is so key to the endurance of the U.S. constitution, demonization of the essential role played by the news media, and much more – all of this combines to represent a threat to the republic unlike anything we have experienced in our lifetimes.

For all of these reasons, I have been eager to write yet another essay – focused on my area of expertise and experience – but shortly after posting my essays on Mr. Trump, my blog website was attacked and digitally contaminated with “malware,” as some of you know.  I believe this is nothing more than a coincidence of timing, but it is a challenge nonetheless.

I’m pleased to say that emails directly from me and emails from my blog will present no problems whatsoever, but links to my blog website can produce automated warnings of the presence of malware.  Our information technology people have been working very hard to clean the website thoroughly; and we are cautiously optimistic that this has now been accomplished.  However, until Google, Firefox, and any other services have removed all warnings, I will cease from sending messages that would direct readers to the website.

So, I apologize for the recent hiatus in communications from “An Economic View of the Environment.”  I would not want you to think that the reason for my silence is satisfaction with recent developments in environmental policy (and the larger body politic).  Far from it!  I hope to be back with essays – blog posts – in the very near future.

Trying to Remain Positive

With inauguration day in the United States just two weeks away, it is difficult to harbor optimism about what the Trump presidency will mean for this country and for the world in realms ranging from economic progress to national security to personal liberty (as I wrote in this space one month before the November election – This is Not a Time for Political Neutrality, October 9, 2016).  In the wake of the election, expectations are no better, including in the environmental realm (as I wrote shortly after the election – What Does the Trump Victory Mean for Climate Change Policy?, November 10, 2016).  And since then, the President-elect’s announced nominations for key positions in the administration have probably eliminated whatever optimism some progressives may have been harboring.

Remarkably, the least worrisome development in regard to anticipated climate change policy may be the nomination of Rex Tillerson to become U.S. Secretary of State.  Two months ago it would have been inconceivable to me that I would write this about the CEO of Exxon-Mobil taking over the State Department (and hence the international dimensions of U.S. climate change policy).  But, think about the other likely candidates.  And unlike many of the other top nominees, Mr. Tillerson is at least an adult, and – in the past (before the election) – he had led his company to reverse course and recognize the scientific reality of human-induced climate change (unlike the President-elect), support the use of a carbon tax when and if the U.S. puts in place a meaningful national climate policy, and characterize the Paris Climate Agreement as “an important step forward by world governments in addressing the serious risks of climate change.”

It’s fair to say that it is little more than damning with faint praise to characterize this pending appointment as “the least worrisome development in regard to climate change policy,” but the reality remains.  Everything is relative.  Of course, whether Mr. Tillerson will maintain and persevere with his previously stated views on climate change is open to question.  And if he does, can he succeed in influencing Oval Office policy when competing with Scott Pruitt, Trump’s pick to run EPA, not to mention Rick Perry, Trump’s bizarre choice to become Secretary of Energy?

In the face of all this (and much else), is it possible to offer any statement of optimism or at least hope?  The answer may be found in the reality that U.S. policy – in many issue areas – consists of much more than the policies of the Federal government.  In a variety of policy realms, the states play an exceptionally important role.  One might not normally think about this in the context of addressing a global commons problem, such as climate change, but these are not normal times.

And so I will try to rescue myself from my current mental state – at least temporarily – by focusing today on policy developments in the State of California.  To do this, I offer an op-ed I recently wrote with Professor Lawrence Goulder of Stanford University, which was published in the Sacramento Bee a week before the November election.  Good policy developments at the state level are, of course, even more important now than they were then.

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Sacramento Bee

October 30, 2016

New emissions targets make cap and trade the best low-cost, market-based approach

By Lawrence H. Goulder and Robert N. Stavins

This is a critical time for California’s climate policies. Recently, Gov. Jerry Brown achieved his hope of extending California’s action beyond 2020, the termination date of Assembly Bill 32. Whereas AB 32 called for reducing the state’s greenhouse gas emissions to 1990 levels by 2020, the newly signed Senate Bill 32 and AB 197 mandate an additional 40 percent reduction by 2030.

Unless these ambitious goals are pursued with the most cost-effective policy instruments, the costs could be unacceptably high. The governor’s targets make it especially important to use a low-cost, market-based approach: cap and trade.

Unfortunately, rather than increasing cap and trade’s role, recent proposals emphasize the use of less efficient, conventional policies. The environmental justice lobby supports this change, contending that emissions trading hurts low-income and minority communities by causing pollution to increase.

In fact, abandoning cap and trade would harm these communities by raising costs to businesses and thereby prices to consumers. With cap and trade, the sources able to reduce emissions least expensively take on more of the pollution-reduction effort. This lowers costs and prices.

When the environmental justice community worries about cap and trade, their concern is not about the greenhouse gas emissions that cause climate change: These gases spread evenly worldwide and have no discernible local impact. Rather, it’s about “co-pollutants,” such as nitrogen oxides, carbon monoxide and particulates, which often are emitted alongside greenhouse gases.

By reducing California’s greenhouse gas footprint, cap and trade lowers concentrations of these co-pollutants. Still, it’s possible – in theory – for co-pollutant emissions to increase in particular localities. The best defense against this possibility is to tighten existing laws that limit local air pollution. This would prohibit any trades that would violate such limits.

The environmental justice lobby’s concerns about local air pollution are justified: A new report by the U.S. Commission on Civil Rights acknowledges that low-income and minority communities face disproportionately high air pollution. The best response to this situation is to strengthen existing local pollution laws rather than abandon cap and trade.

Moreover, it is not clear that cap and trade shifts local air pollution toward low-income communities. One recent report from the University of Southern California identified emission increases and blamed them on cap and trade. But increased emissions have been due mainly to economic and population growth. And although emissions from some sources did increase, they decreased at 70 percent of facilities, according to mandatory reporting to the Air Resources Board.

The key question, however, is not how emission levels changed, but rather how cap and trade contributed to the change. Without cap and trade, it is likely that any increases in emissions would have been even greater.

Beyond the environmental impacts, it’s important to consider economic impacts on these communities. Reducing greenhouse gas emissions tends to raise costs of energy and transportation. Because low-income households devote greater shares of their income to energy and transportation than high-income households, virtually any climate policy places greater burdens on those households. Cap and trade minimizes these costs.

Further, cap and trade offers the government a powerful tool for compensating low-income communities for such economic burdens. Most emission allowances are auctioned and pursuant to SB 535, 25 percent of the proceeds go to projects that provide benefits to disadvantaged communities. This has already amounted to over $158 million.

Cap and trade serves the goal of environmental justice better than the alternatives, and it deserves a central place in the arsenal of weapons California uses to address climate change. Rather than step away from this progressive policy, the state should increase its reliance on this progressive, market-based approach.

Lawrence H. Goulder is a professor in environmental and resource economics at Stanford University and former chair of the AB 32 Economic and Allocation Advisory Committee to the California Air Resources Board. Contact him at goulder@stanford.edu.

Robert N. Stavins is a professor of business and government at the Harvard Kennedy School of Government, and contributed to assessment reports to the Intergovernmental Panel on Climate Change. Contact him at robert_stavins@harvard.edu.