With today’s roll-out of Environmental Protection Agency (EPA) guidance for reducing coal-fired electricity plants carbon emissions, industry interests have been pressuring hard with efforts to undermine public support for EPA action.
Before heading further and in line with the Debunking Handbook, let us start with some basic truths about investing in climate mitigation.
- Climate mitigation investments will have huge economic returns on that investment ranging from energy efficiency reducing total energy bills to new economic activity surrounding the new technologies and businesses seeking to reduce our climate impact.
- Climate mitigation investments will have huge corollary benefits — such as improved human health (from reduced allergy risks to reduced emergency room visits with asthma attacks to reduced deaths due to fossil fuel pollution), improved visibility at national parks, reduced climate impacts on business operations (such as reduced railroad kink risks), increased worker productivity, …
- Climate mitigation will reduce the huge risks associated with climate change and will provide an insurance against the potential that climate change implications could be far worse than standard projections suggest (e.g., the risk that the modeling is erring on the too optimistic side).
- Climate mitigation is an investment that will provide huge returns — across a spectrum of economic, social, and environmental fronts.
Another simple truth, even proponents of action on environmental issues typically overstate costs and understate benefits for a number of understandable reasons.
With that in mind, putting aside accusations of skewing the situation to protect incumbents from innovative technologies threatening their business models and to protect polluters from having to take responsibility for the damages their businesses cause, does the past historical record provide us a window on whether we can trust institutions like the U.S. Chamber of Commerce to provide reliable information as to the costs of environmental compliance?
Ramez Naam’s the Infinite Resource: the power of ideas on a finite planet is a powerful discussion of how innovation can enable us, even at this stage, to address climate change successfully. Naam presents a strong version of what I describe as ‘pessimistic optimism’ — he is quite clear as to the extent of our challenges and problems while also providing cogent arguments as to why and how unleashing innovation can enable a transformation of American (and global) society toward a prosperous, climate-friendly future.
Naam has, among other things, an excellent discussion of how opponents and proponents have gotten the cost-benefit equation wrong on past policy discussions of addressing environmental issues (pages 201-204).
- Addressing Acid Rain
- Industry groups predicted annual costs of $25 billion per year, EPA projected $6 billion per year, over the past 20 years the costs habe been “only $3 billion per year, just one-eight of the industry estimates, and half of what the EPA estimated.”
- Benefits: “regulations saved an estimated $118 billion per year in reduced health expenses”.
- And … Americans still have electricity for their big-screen TVs.
- Ozone layer
- “Don Hodel … [Reagan] secretary of the interior after James Watt argued that any near-term risk of thinning ozone layer could be handled by telling people to wear hats and put on more sunscreen. … [DuPont] warned that phasing out CFCs could cost the United States more than $130 billion and “that entire industries could fold.” … the Competitive Enterprise Institute … phasing out CFCs would cost the countgry between $45 billion and $99 billion. … The EPA expected the phase-out to cost a total of $28 billion. …. the actual cost across the entire US economy turned out to be less than $10 billion … less than a tenth of what DuPont had estimated, less than a quarter of the lowest cost estimates from the Competitive Enterprise Institute, and only slightly more than a third of what the EPA itself had estimated.”
- While opponents of action had warned that refrigerators would become a thing only multi-millionaires could afford, “the country’s air conditioning and refrigeration kep on working without disruption.”
- And …
- Benzene: When putting limits on benzene emissions at industrial sites, chemical companies forecast costs of $350,000 per plant. Within a few years, changed processes that eliminated benzene entirely (beating the regulations) reduced this cost to … zero. Health benefits > $billions.
- Asbestos: OSHA estimated costs of $150 million to end asbestos use in insulation and the costs turned out to be $75 million. Health benefits > $billions.
- Reduced coke oven pollution: EPA estimated costs of $4 billion in 1987 learning by 1991 led to revised cost estimates of $400 million. Health benefits > $billions.
“Everywhere we look, the cost of reducing either resource use or pollution drops through innovation. Even the cost estimates of regulators turn out to be too high.” (205)
Much will (and should be said) about the EPA rules released this morning. (Questions such as … Whether the 2005 starting point is gamesmanship to make the targets look bigger? (Well, yes …) Whether the rules go far enough? (Well, no …) Whether the coal industry is bearing enough of the financial burdens for the damages burning coal causes? (Hmm, absolutely not.) Etc …) But most simply … That the EPA is moving forward with guidance on coal fired plants is — seriously — good. That President Obama and the Administration are demonstrating a willingness to take — in wide public view and in the face of serious political interest pushback — Administration action in the face of a do-nothing Congress is good. That this is a step in the right direction is — without question — good.
What is not good is that, inevitably, the entire discussion will exaggerate the costs of action and understate the benefits of action.
And, well, as to the question above:
Does the past historical record provide us a window on whether we can trust institutions like the U.S. Chamber of Commerce to provide reliable information as to the costs of environmental compliance?
Yes. And, that window says that their predictions should not be trusted.
- EPA Administrator Gina McCarthy’s speech introducing the rules (well worth reading — which has significant sections along the lines of this post):
- Krugman on the Chamber of Congress report attacking the proposed rules (before they were released). (Romm on Krugman.)
- EPA reaction to the Chamber’s report.
- Senator Sheldon Whitehouse, Get ready for more false claims by big polluters.
- Lowell Feld, Who’s afraid of the carbon rules?
- Brad Plummer, Obama is planning his biggest climate policy yet — and he doesn’t need Congress
- Jonathan Chait, Business lobby tries to frighten America about clean energy, fails utterly.
- Peter Gleick, Will new climate regulations destroy the economy? (Hint: no.)
Figure. Claims that environmental laws will destroy the economy have been regularly made and are consistently false. This graph shows U.S. GDP from 1929 to 2013 in real 2009 dollars (corrected for inflation) along with the years major environmental laws were passed. (Prepared by Peter Gleick, Pacific Institute. GDP data from the US Bureau of Economic Analysis.)
NOTE: Sadly, the word “skeptic” has gotten a rather black eye in recent years as people engaged in outright science denial wrap themselves within the term “skeptic” as they are too often JAQing off (“Just Asking Questions”). Skepticism, however, is a very valuable intellectual trait as long as it is done honestly: prepared to look at and consider evidence and answers with a willingness and ability to adapt one’s thinking in line with reality rather than seeking to have reality conform to your preconceptions and ideologies. While we all (or, well, at least most — I hope) seek to have such internal honesty, this is difficult and many are unable to get past their preset framework to achieve learning from responses.
Knowing that the coal’s damaging impacts on human health, especially on children, isn’t a PR success, the industry has decried that President Obama had the audacity to