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A ‘Carbon Tax’ Is a Utopian Fix that Can’t Survive Contact with Political Reality by Diana Furchtgott-Roth

Paul Krugman, writing in the New York Times, suggests that Americans should pick a president who favors a carbon tax. But not even Democratic candidates Hillary Clinton and Bernie Sanders have proposed a carbon tax as part of their tax plans. All candidates have put forward detailed tax plans, and a carbon tax is not included in any of these plans.

What is a carbon tax? Why do so many academics and columnists love it? And why will Congress be unable to enact such a tax effectively?

No matter that only 16 percent of global greenhouse gas emissions are caused by America, and that by many measures global temperatures have not increased over the past decade. No matter than unless China and India reduce their carbon emissions, U.S. unilateral efforts will have no practical effect on global temperature. China has stated that it will reduce emissions in 2030, but has not made any definite commitment.

The carbon tax is a favorite of many academic economists for restructuring the tax system. Proponents include a bipartisan group of professors such as Tuft University’s Gilbert Metcalf, now Deputy Assistant Secretary for Environment and Energy at the Department of the Treasury; Harvard University’s Martin Feldstein, Edward Glaeser, and Gregory Mankiw; and Columbia University’s Joseph Stiglitz.

However, as tax practitioners know, a carbon tax is complex to set up. It requires adjustments to make sure that the tax is not unduly regressive and does not encourage consumption of imports relative to domestic production.

But, as we saw from the passage of many tax and budget bills over the years, Congress does not think deeply before it passes major tax bills.

Rather, political expediency always triumphs over academic elegance. Congress is incapable of thoughtful tax solutions, no matter how many are offered by well-intentioned professors. Despite years of notice that the Bush tax rates were due to expire, Congress passed permanent tax laws at the last moment, without reading the bill.

Many academics see a carbon tax as an alternative to an individual income tax, a corporate income tax, or a European-style cap-and-trade system. But a quickly-passed carbon tax in the hands of Congress would be just another add-on levy, with exemptions for friends and punishments for enemies.

A carbon tax raises the price of energy and so discourages consumption without regulation. Carbon tax rates could be calibrated to be revenue neutral or to yield a net rise in federal tax receipts, with the increment possibly dedicated to reducing deficits.

What are the problems with a carbon tax?

Everyone would want to spend the revenue. Some people would want to use it to reduce the deficit. Others would want to use carbon tax revenues to lower other taxes, such as income taxes. And since high income tax rates reduce incentives to work, this could conceivably add to economic efficiency.

Carbon taxes are regressive. Since low-income people use more energy as a percent of their income than high-income people, a switch to a carbon tax would have to be accompanied by transfers to low-income groups.

Some academics suggest that offsets be returned to taxpayers through lower income taxes, perhaps with the proceeds going chiefly to low-income households (individuals and families), which are disproportionately hurt by what is in essence an energy consumption tax.

This could theoretically be done by adjustments to the income tax. However, low-income earners are not required to file returns, and they would have to do so in order to be identified and compensated. That means extra work for them, and for the Internal Revenue Service — which will already be overworked calculating and collecting penalties from Obamacare violators.

Energy-intensive sectors lose under a carbon tax. The prices of energy-intensive goods in America would increase relative to imports from countries without carbon taxes. So Americans will prefer to buy imports, and American firms will lose business. Proponents of the tax suggest putting tariffs on imports in proportion to their carbon content so that American companies will not be at a disadvantage. But the precise quantities are complex to calculate, and tariffs might be illegal under World Trade Organization regulations.

The shale oil and gas that are attracting energy-intensive manufacturing back to America would be taxed, to the detriment of these new industries — and their employees. Some industries, such as coal, would be big losers. Politicians from coal-producing regions are influential in Congress, and they would demand a share of revenues.

So for a carbon tax to make our tax system more efficient, its revenues would have to be used to offset other taxes in the economy. Its negative effects on low-income Americans and on energy-intensive regions would have to be ameliorated. Some border adjustments would have to be made so that domestic goods were not disfavored.

But our disfunctional Congress is incapable of crafting a carbon tax with these attributes. Any tax on carbon would be an additional tax, without the offsets that make it so attractive to university professors. It would hurt the poor and raise domestic prices relative to prices of imports.

None of the front-running presidential candidates have proposed a carbon tax as part of their tax plans, because they know it is unpopular and will not pass Congress. To lower global emissions, the large emitters of carbon such as China and India need to move to nuclear power or natural gas. That would indeed make a difference.

This post first appeared at Economics21.org.

Diana Furchtgott-RothDiana Furchtgott-Roth

Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, is director of Economics 21 and senior fellow at the Manhattan Institute.

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A Scientific Consensus on What Now? by Robert P. Murphy

Authority versus Science in the Climate Change Debate.

When it comes to the climate change debate, many of the loudest voices are confidently making assertions that are not backed up by the actual evidence — and in this respect, they are behaving very unscientifically.

One obvious sign that many people in the climate change debate are appealing to emotions rather than facts is their reliance on pejorative terminology. For example, rather than make an informative statement that they support subsidies for wind and solar, and taxes on coal and oil, they may instead say they support “clean energy” while their opponents favor “dirty energy.”

The coup de grâce, of course, occurs when partisans in the debate refer to their opponents as “climate deniers.” This is a nonsensical slur that would have impressed Orwell. Obviously, nobody denies climate. Furthermore, nobody denies that the climate is changing. And, when it comes to the serious debate among published climate scientists, people on both sides agree that human activities are contributing to warmer temperatures; the dispute is simply overhow much. (Those who think the change is mild have embraced the label “lukewarmers.”)

To label critics of a carbon tax or EPA regulations on power plants as “climate deniers” is utterly destructive of rational inquiry and tries to link legitimate skepticism to Holocaust denial. Those who use this term without irony demonstrate that they have no interest in scientific discovery.

Related to this lack of nuance, and the appeal to an exaggerated consensus, is the oft-repeated claim that “97 percent of climate scientists agree” on the state of human-generated climate change. Physicist-turned-economist David Friedman (among others) has investigated the methods used to generate such claims, and finds that they are seriously lacking.

Using the very data (on abstracts from published papers) that forms the basis of these headline announcements, Friedman reckons that more like 1.6 percent of the surveyed papers explicitly endorse humans as the main cause of global warming since the 1800s. Friedman further argues that this confusion — where the actual findings of the paper ended up being misinterpreted by the media — appears to have been deliberately produced by the survey’s authors.

“Hottest Year on Record” and “the Pause”

A January 2016 New York Times article epitomizes the advocacy disguised as reporting in the climate change debate. The very title lets you know that a serious case of scientism is coming, for it announces, “2015 Was Hottest Year in Historical Record, Scientists Say.”

Now, we must inquire, what is the purpose of adding “Scientists Say” at the end? Does any reader think that the Times would be quoting plumbers or accountants on whether 2015 was the hottest year on record? The obvious purpose is to contrast what scientists say about global warming with what thosenonscientist deniers are saying. The article goes on to let us know exactly what “the scientists” think about global warming and manmade activities:

Scientists started predicting a global temperature record months ago, in part because an El Niño weather pattern, one of the largest in a century, is releasing an immense amount of heat from the Pacific Ocean into the atmosphere. But the bulk of the record-setting heat, they say, is a consequence of the long-term planetary warming caused by human emissions of greenhouse gases.

“The whole system is warming up, relentlessly,” said Gerald A. Meehl, a scientist at the National Center for Atmospheric Research in Boulder, Colo.

It will take a few more years to know for certain, but the back-to-back records of 2014 and 2015 may have put the world back onto a trajectory of rapid global warming, after a period of relatively slow warming dating to the last powerful El Niño, in 1998.

Politicians attempting to claim that greenhouse gases are not a problem seized on that slow period to argue that “global warming stopped in 1998,” with these claims and similar statements reappearing recently on the Republican presidential campaign trail.

Statistical analysis suggested all along that the claims were false, and that the slowdown was, at most, a minor blip in an inexorable trend, perhaps caused by a temporary increase in the absorption of heat by the Pacific Ocean.

This excerpt is quite fascinating. We have something reported as undeniable fact when it actually relies on assumptions of what might happen in the future (“may have put the world back onto a trajectory of rapid global warming”) and offers conjectures to explain why the measured warming suddenly slowed down (“perhaps caused by a temporary increase in the absorption of heat”).

The “statistical analysis” did not establish that the critics’ claims were false. It is undeniably true that the official NASA GISS records showed, for example, that the average annual global temperature in 2008 was lower than the annual temperature in 1998, and that’s why people at the time were saying, “There has been no global warming in the last ten years.”

Here is a NASA-affiliated scientist arguing that such claims are misleading, and perhaps they were, but it is similarly misleading to turn around and claim that the pause didn’t exist.

If you asked a bunch of Americans whether they gained weight over the last 10 years, their natural interpretation of that question would be, “Do I weigh morenow than I weighed 10 years ago?” They wouldn’t think it involved construction of moving averages since birth. In that sense, the people referring to the pause were not acting dishonestly; they were pointing out to the public a fact about the temperature record that would definitely be news to them, in light of the rhetoric of runaway climate change.

However, the more substantive point here is that the popular climate models predicted much more warming than has in fact occurred. In other words, the question isn’t whether the 2000s were warmer than the 1990s. Rather, the issue is given how much concentrations of greenhouse gases have risen, is the actualtemperature trend consistent with the predicted temperature trend?

To answer this, consider a December 2015 Cato Institute working paper from two climate scientists, Pat Michaels and Paul Knappenberger: “Climate Models and Climate Reality: A Closer Look at a Luke warming World.” They avoid the accusation of cherry-picking by running through trend lengths of varying durations, and they compare 108 model runs with the various data sets on observed temperatures. They conclude, “During all periods from 10 years (2006–2015) to 65 (1951–2015) years in length, the observed temperature trend lies in the lower half of the collection of climate model simulations, and for several periods it lies very close (or even below) the 2.5th percentile of all the model runs.”

Thus we see that the critics arguing about the model projections aren’t simply picking the very warm 1998 as a starting point in order to game the results. The standard models produced warming projections well above what has happened in reality, and for some periods the observed warming was so low (relative to the prediction) that there is less than a 2.5 percent chance that this could be explained by natural volatility. This is the sense in which the current suite of climate models is on the verge of being “rejected” in the statistician’s sense.

To be sure, I am not a climate scientist, and others would no doubt dispute the interpretation of the data that Michaels and Knappenberger give. My point is to show how utterly misleading the New York Times piece is when it leads readers to believe that “scientists” were never troubled by lackluster warming and that only politicians were trying to confuse the public on the matter.

Climate Economists Don’t Believe Their Models?

Finally, consider a December 2015 Vox piece with the title, “Economists Agree: Economic Models Underestimate Climate Change.” Furthermore, the URL for this piece contains the phrase “economists-climate-consensus.” We see the same appeal to authority here as in the natural sciences when it comes to climate policy.

The Vox article refers to a survey of 365 economists who had published in the field of climate economics. Here is the takeaway: “Like scientists, economists agree that climate change is a serious threat and that immediate action is needed to address it” (emphasis added).

Yet, in several respects, the survey reveals facts at odds with the alarmist rhetoric the public hears on the issue. For example, one question asked, “During what time period do you believe the net effects of climate change will first have a negative impact on the global economy?” With President Obama and other important officials discussing the ravages of climate change (allegedly) before our very eyes, one might have expected the vast majority of the survey respondents to say that climate change is having a negative impact right now.

In fact, only 41 percent said that. Twenty-two percent thought the negative impact would be felt by 2025, while an additional 26 percent would only say climate change would have net negative economic effects by 2050. Would anyone have expected that result when reading Vox’s summary that immediate action is needed to address climate change?

To be clear, the Vox statement is not a lie; it can be justified by the responses on two of the other questions. Yet the actual views of these economists are much more nuanced than the pithy summary statements suggest.

Authority versus Science

On this particular survey, I personally encountered the height of absurdity in the context of scientism and appeal to authority. For years, in my capacity as an economist for the Institute for Energy Research, I have pointed out that the published results in the United Nations’ official “consensus” documents do not justify even a standard goal of limiting global warming to 2 degrees Celsius, let alone the over-the-top rhetoric of people like Paul Krugman.

In order to push back against my claim, economist Noah Smith pointed to the survey discussed earlier, proudly declaring, “Apparently most climate economists don’t believe their own models.” Thus we have reached the point where partisans on one side of a policy debate rely on surveys of what “the experts say,” in order to knock down the other side who rely on the published results of those very experts.

This is the epitome of elevating appeals to scientific authority over the underlying science itself.

In the climate change debate, legitimate disputes are transformed into a battle between Noble Seekers of Truth versus Unscientific Liars Who Hate Humanity. Time and again, references to “the consensus” are greatly exaggerated, while people pointing out enormous problems with the case for policy action are dismissed as “deniers.”

Robert P. MurphyRobert P. Murphy

Robert P. Murphy is research assistant professor with the Free Market Institute at Texas Tech University.

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Climate Station Data Shows U.S. In A 10-Year Cooling Trend

The Daily Caller reports:

Data from America’s most advanced climate monitoring system shows the U.S. has undergone a cooling trend over the last decade, despite recent claims by government scientists that warming has accelerated worldwide during that time.

The U.S. Climate Reference Network was developed by the National Oceanic and Atmospheric Administration (NOAA) to provide “high-quality” climate data. The network consists of 114 stations across the U.S. in areas NOAA expects no development for the next 50 to 100 years.

us climate data

Read more. 

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America’s Best Climate Prediction Expert Finally Gets Noticed

In Orlando, Florida is a lone climate researcher who, for almost eight years, has been putting the U.S. government’s best scientists and science agencies to shame, when it comes to accurately making major climate predictions. This is especially true when compared to Al Gore-style global warming politicians, government funded university Ph.D. climate scientists and the United Nations Intergovernmental Panel on Climate Change (UN-IPCC).

The UN-IPCC is the UN’s climate research arm that historians may someday remember best for unreliable climate models and associated wildly exaggerated, and erroneous temperature and sea level rise predictions. The “climategate’ scandal at the UN will likewise be prominent for the disclosure that its supposed ‘best climate scientists” falsified or manipulated climate data to fit the politically motivated manmade global warming storyline.

In March 2013, while I was the Florida Editor for the online conservative journal Watchdogwire.com, I had the chance to review the track record of this maverick in the field of climatology. When I was done I put my name on a column naming him “America’s best climate prediction expert.” I added to it in April 2014 updating his list of predictions he had made. He is Mr. John L. Casey, a former White House and NASA space program consultant, Space Shuttle engineer, and high tech start-up company executive.

His first important climate research findings were issued in a press release in spring 2007. Later his only, yet seminal, peer reviewed paper with its associated theory on climate change driven by the Sun, was published on line for all to review. It is called the “Relational Cycle Theory.” Despite a sterling background in the space program at the highest levels of the U.S. government, in 2007 and 2008 he was nonetheless without a Ph.D. or any climate research papers. Thus, when he issued his first climate predictions he was immediately labeled by left wing media global warming zealots and even some publicity seeking conservatives as a “scam artist,” “hoaxer,” and a “fraud.” His pronouncements of the end of global warming within a few years and the start of a new cold climate, was a message no one wanted to hear including both Republican and Democrat presidential candidates (McCain and Obama) and Nobel Peace Prize winner Al Gore, who were all saying manmade global warming was a real threat. The timing on John’s first predictions could not have been worse.

Many would have given up on this financially ruinous and personally punishing quest to tell the truth about the climate. Fortunately for all Americans, John did not. Over the years, John started the Space and Science Research Corporation (SSRC), wrote a leading climate book, and in 2013, began to publish the bi-annual Global Climate Status Report (GCSR). He has made well over one hundred radio and TV interviews and public presentations across the United States. He is now the most referenced climatologist on the internet regarding the next potentially dangerous cold climate.

In September 2013, the CEO of influential Newsmax Media, Chris Ruddy, was captivated by John’s first book “Cold Sun.” He decided to throw all of his rapidly growing media company’s resources behind John’s research. John’s first climate book “Cold Sun” was updated and recast as “Dark Winter.” Under “The Cold Truth Initiative” as Newsmax calls it, “Dark Winter” is now being promoted nationwide.

Three months after publication, and “Dark Winter” has reached number four on Amazon’s 100 “Best Sellers” list of climate books! See the list at by clicking here.

The books ahead of him are the typical manmade global warming books one of which is fictional. That makes John’s “Dark Winter” the number 1 best selling global cooling, and I dare say best selling ‘truthful,’ climate book in the USA. Of the top four, his is the only book written by a proven climatologist.

America’s best climate prediction expert is at last receiving the credit he is due. When will the rest of the media, the scientific establishment, and our leaders in Washington recognize this one man’s courage, skills, and his selfless mission to help our people prepare for the new long cold climate?

Congratulations to John L. Casey, a man who understands climate and climate policy better than anyone, period.