environment

I've noticed recently two pieces on choices that are environmentally friendly that I thought were worth comment.  The first is from Jonah Goldberg's National Review Online post, "Oil: The Real Green Fuel."  The part that caught my attention was this:

Fossil fuels have been one of the great boons both to humanity and the environment, allowing forests to regrow (now that we don’t use wood for heating fuel or grow fuel for horses anymore) and liberating billions from backbreaking toil. The great and permanent shortage is usable surface land and fresh water. The more land we use to produce energy, the less we have for vulnerable species, watersheds, agriculture, recreation, etc.

“If you like wilderness, as I do,” [author Matt] Ridley writes, “the last thing you want is to go back to the medieval habit of using the landscape surrounding us to make power.”

From time to time, I have mentioned a "Green Tax Swap" as an appropriate policy to raise the price of carbon emissions while protecting lower-income workers from the higher costs of the carbon-intensive goods and services that they consume.  Gib Metcalf provides a good discussion of implementation and distributional consequences here.  Some new research by Don Fullerton and Holly Monti suggests that it would be more difficult than is presently believed to make the swap distributionally neutral.  Here's the abstract:

Writing in The American, Lee Lane points out some of the irony in the way the Republicans have been criticizing cap-and-trade proposals:

President Obama and his allies are promoting a tool for GHG control that is distinctly more costly than a simple carbon tax. Yet most Republican congressmen and conservative pundits, instead of pointing out that a tax would be a far better option, are hard at work trying wrongly to convince voters that the current plan is a tax.

He also points out some of the political issues surrounding climate legislation, particularly committee assignments and jurisdiction:

The organization of the Congress is the source of part of the explanation. The congressional committees with jurisdiction over pollution control are not the ones that write taxes. And these committees have little interest in transferring jurisdiction to the tax-writing committees.

I had three reactions to yesterday's cap-and-trade vote, two of which came from The New York Times article that I read this morning and one of which came from Stan's very smart post.  Here they are:

1. From the article, "Only eight Republicans voted for the bill, which runs to more than 1,300 pages."
2. From the article, "The bill would grant a majority of the permits free in the early years of the program, to keep costs low."
3. From Stan, "But the bigger story is that the White House once again has demonstrated an excellent ability to get Congress to go along with the things it wants."

And now let me take each one in turn.

I'll let Keith Hennessey count the ways, in this tour de force of blogging.  I've blogged about CAFE standards each time they've been the subject of policy discussion over the past few years.  Here is some essential reading:

1. Fuel Efficiency or Fuel Consumption?
2. New CAFE Standards
3. Fuel Economy and Safety
4. Cleaning Up the CAFE

Earlier this week, as my family was driving through town, we stopped to let an enormous SUV back out of its parking spot on Main Street.  I thought that the driver must be happy to have heard about the CAFE standards -- that behemoth she was driving just got more valuable, since the new, tighter standards only apply to new vehicles.

EPA Administrator Lisa Jackson, Energy Secretary Steven Chu, and Agriculture Secretary Tom Vilsack held a telephone press conference 10 a.m. Tuesday to announce their proposed rulemaking on the Renewable Fuel Standard under the Energy Independence and Security Act of 2007 (EISA).  That established a requirement that to qualify for subsidies, ethanol and other biofuels would have to reduce lifetime greenhouse gas emissions by 20% versus gasoline.

Yesterday, Washington Post columnist Robert J. Samuelson published a standout op-ed on the Selling of the Green Economy. Samuelson does an excellent job of puncturing the fantasy that we can costlessly shift to a green economy based in no small part on models which assume away many costs of adjustment.  I know its no fun for policymakers and taxpayers to keep their feet on the ground when collective imaginations are soaring, but we'll all be better off if we do.

Today is Earth Day 2009.  President Obama pushed green jobs and a new wind initiative in Iowa, and Congress held lots of hearings, but a sensible energy policy remains far away.

The question is how can we reduce greenhouse gas emissions, make ourselves less dependent on foreign oil, and promote a stronger economy.  The answer is obvious to most economists -- raise the relative price of carbon and return to the revenues to those most adversely affected.

One piece of "news" yesterday was the change in fuel efficiency standards on the horizon.  From the Associated Press:

Also, Obama directed federal transportation officials to get going on new fuel efficiency rules, which will affect cars produced and sold for the 2011 model year. That step was needed to enforce a 2007 energy law, which calls for cars and trucks to be more efficient every year, to at least 35 miles per gallon by 2020.

Obama also meant to set a tone with his promises: Science will trump ideology and special interests, attention will stay high even when gas prices fall.