Chu argues roughly as follows. Global investment in wind turbines and solar panels could reach $3.6 trillion by 2030. China is investing heavily. If we don’t ramp up our investment in “clean tech” products, we’ll be left behind, become increasingly dependent on foreign producers, and China will eat our lunch. The key to growing the U.S. clean-tech sector is to “put a price on carbon” — establish a “cap on carbon emissions that ratchets down over time.”

This is poppycock, as I explain today on MasterResource.Org, the free-market energy blog. 

Yes, China is investing heavily in solar panel and wind turbine manufacture, but China does not cap carbon. Also, only a small fraction of China’s production of solar photovoltaic generators — 20 megawatts out of 820 megawatts produced in 2007 — is for China’s domestic market. So capping domestic carbon emissions is not a prerequisite to success in exporting clean-tech products, nor is having a large domestic market for such products. The experience of the very country Chu spotlights as model and threat rebuts rather than supports the case he wants to make.

A key point Chu completely ignores is that, apart from certain niche markets, “clean tech” products consume more wealth than they create. That’s why they cannot “compete” without benefit of market-rigging mandates, subsidies, and penalties levied against fossil energy.

A fresh example of this inconvenient fact comes to us today from the great state of Massachusetts, home of Sen. John Kerry, chief sponsor of S. 1733, and Rep. Ed Markey, co-sponsor of the House companion bill, H.R. 2454, a.k.a. Waxman-Markey.

The Boston Globe reports that, ”A little more than a year after cutting the ribbon of a new factory in Devens built with $58 million in state aid, Evergreen Solar has announced it will shift its assembly of solar panels from there to China.”

Evergreen received “$58.6 in grants, loans, land, tax incentives, and other support,” says the Globe. Yet, ”Through the first nine months of this year, Evergreen lost $167 million, compared with $33.6 million for the same period last year.”

What would Chu have to say about this? Evergreen is not losing money because there’s no cap on carbon. Massachusetts is one of several states participating in a cap-and-trade program known as the Regional Greenhouse Gas Initiative (RGGI).

Why is Evergreen expanding operations in China?  ”Lower costs.” Such lower costs include lower-cost energy. To repeat, China does not have cap-and-trade; it does not put a price on carbon.

Now, I’ll wager that Evergreen would be losing money even if Massachusetts were a Kyoto-free zone. But we may surmise that Evergreen would not shift its operations to China if China’s economy were carbon-constrained.

Chu should at least consider the possibility that pricing carbon would vitiate what little competitiveness the U.S. clean-tech sector has. Low-cost energy is a source of competitive advantage, as China powerfully demonstrates. By increasing energy costs, cap-and-trade would make all U.S.-based manufacture less competitive, including companies specializing in clean-tech products.

Reuters reports:

BARCELONA, Spain, Nov 5 (Reuters) - China should roughly halve its greenhouse gas emissions by 2050 to keep the world on a safe climate path, the head of the U.S. delegation at U.N. climate talks in Barcelona said on Thursday.

Leading industrialised countries say that the world must halve greenhouse gases by 2050 to avoid the worst effects of climate change, and have committed to lead by cutting their own emissions by 80 percent.

China should cut by about 50 percent, leaving space for poorer countries to grow their economies, Jonathan Pershing told Reuters.

“If you put China in there at a 50 percent reduction, if we’re a bit higher, that gives lesser developed countries a bit lower. If they are in that middle band, plus or minus some percentage, that seems about right.”

China would be on course to meet that goal if it repeated its present energy efficiency five-year plan into the future, he added. “They’re doing pretty well,” he said.

As discussed in previous posts, meeting the EU/UN/Al Gore CO2 “stabilization” goal — 450 parts per million by 2050 — would require heroic (suicidal?) sacrifices on the part of developing countries. Stabilization at 450 ppm would require, at a minimum, a 50% reduction in global emissions by 2050. Because most of all the increase in global emissions over the next four decades (indeed, the next 90 years) is projected to come from developing countries, meeting the stabilization target would require developing countries to lower their emissions more than 60% below baseline projections even if industrial countries magically achieve zero net emissions by 2050!

Barring technological breakthroughs (in their nature unpredictable) that dramatically lower the cost and improve the performance of non-emitting energy technologies, the only way developing countries could comply is by restricting their use of energy. Yet developing countries are poor in no small part because they lack access to abundant, affordable energy. The 450 ppm goal is a recipe for “stabilizing” global poverty.

Don’t be fooled by Pershing’s remark that all China needs to do is keep repeating its “five-year” plan. Supposedly, China is already “well on the way” to reducing its energy intensity 20% by 2010. Based on the only data available, Roger Pielke, Jr. finds that China has cut intensity only 7.4% from 2005 to 2008, “meaning that it has a long way to go to reach a 20% target by 2010.” Besides, even if the first five-year emission intensity reduction plan succeeds, it represents the low-hanging fruit. Replicating that achievement every five years would become increasingly costly and difficult.

That a 450 ppm CO2 stabilization target cannot be met unless China slams the brakes on its economy has been clear from basic emissions arithmetic for some time. What’s new is that a U.S. Government official is quantifying, in the context of climate treaty negotiations, what “meaningful participation” by China actually means.

So far, India and China have escaped Kyoto-style energy rationing. This makes their products more competitive in global markets, and pulls capital and jobs away from CO2-regulated economies.  But we’re only two years into the first (2008-2012) Kyoto compliance period. At some point, free riders have to pay up or get off the train.

The EU, Japan, and the United States (if it ratifies Kyoto II) will not accept a permanent arrangement under which they bear all the costs of energy rationing, fork over billions in technology transfers and climate assistance to developing countries, and export more jobs to India and China.

The longer the Kyoto project endures, the greater the pressure India and China will face — in the form of carbon tariffs, for example — to join the club of the carbon-constrained.

If India and China want to protect their right to grow and avert an economically-debilitating era of trade conflict, they should get off the global warming bandwagon as soon as possible. A balanced assessment of the science does not justify alarm. India and China already act on the premise that global warming policy is more dangerous than global warming itself. It’s time for their words to match their deeds.

Václav Klaus, Washington Briefing: Advancing the Global Debate over Climate Change Policy, November 4, 2009.

“Many thanks for the invitation and for the courage to organize such an important gathering in the moment when political correctness tells you not to do it.

We are meeting one month before the Climate Change Copenhagen Summit and several weeks before the U.S. Senate hearing regarding the cap-and-trade scheme. For these reasons, today’s meeting can’t be an academic conference, even though the topic still needs academic discussion. There is no consensus - neither in science, nor in economic analysis or politics.

I left Prague after signing of the Lisbon Treaty and came here only a few minutes ago, which means that I missed most of your conference. I’m sorry for that.

I have already been at a UN Summit in Copenhagen before. It was in 1995 at the so called Social Summit. At that time, the Summit was attended by then US Vice President Al Gore who - so it seems - will be there again this year. I did also attend, as Prime Minister of the Czech Republic, but I don’t plan to go there now. I don’t see any chance to influence the results or to be listened to.

In 1995, there were huge demonstrations there organized by all kinds of anti-establishment groupings - from socialists and greens to anarchists and anti-globalizationists. I have never seen such clashes between demonstrators and police and army forces before. The difference is that I don’t expect any demonstrations in Copenhagen now. The anti-establishment people have in the meantime become insiders and will be sitting in the main hall. This is a shift with far-reaching consequences.

My views on the doctrine of global warming and especially on the role of man in it are relatively known. My book with the title “Blue Planet in Green Shackles” has been already published in 12 languages and, two and a half years after its original publication, I don’t have any urgent need to rewrite it.

We should not forget how the doctrine of global warming came into being. In a normal case, everything starts with an empirical observation, with the discovery of evident trends or tendencies. Then follow scientific hypotheses and their testing. When they are not refuted, they begin to influence politicians. The whole process finally leads to some policy measures. None of this was the case with the global warming doctrine.

It started differently. The people who had never believed in human freedom, in impersonal forces of the market and other forms of human interaction and in the spontaneity of social development and who had always wanted to control, regulate and mastermind us have been searching for a persuasive argument that would justify these ambitions of theirs. After trying several alternative ideas - population bomb, rapid exhaustion of resources, global cooling, acid rains, ozone holes - that all very rapidly proved to be non-existent, they came up with the idea of global warming. Their doctrine was formulated before reliable data evidence, before the formulation of scientifically proven theories, before their comprehensive testing based on today’s level of statistical methods. [1] Politicians accepted that doctrine at the Rio Earth Summit in 1992 and - without waiting for its confirmation - started to prepare and introduce economically damaging and freedom endangering measures.

Why did they do that? They understood that playing the global warming game is an easy, politically correct and politically profitable card to play (especially when it is obvious that they themselves won’t carry the costs of the measures they implement and will not be responsible for their consequences).

I don’t see any problem with the climate now, or in the foreseeable future, and for that reason I am not sufficiently motivated to discuss the technicalities of the cap-and-trade scheme. I only protest against calling it a “market solution.” It reminds me of the communist planners who similarly talked about “using market instruments” when they finally came to the conclusion that “planning instruments” did not work. Markets can’t be used by anybody.

We should not deceive ourselves. Cap-and-trade scheme is a government intervention par excellence, not a “market solution.” How much “to cap” is the decision of the government (and the European failure several years ago - when too many carbon permits were issued - is I hope well known here). The size of the cap defines the price of carbon and this price is nothing else that a tax imposed upon citizens of the country. I agree with Lord Monckton that the cap-and-trade bill “is the largest tax increase ever to be inflicted on a population in the history of the world.” [2] How is it possible that such arguments are not used? Why does nobody argue that to tax energy means that the costs of anti-global warming policy will disproportionally fall onto the poor people? What bothers me is that to “trade” the artificial “good” - the permits - means that a new group of rent-seekers will arise who will make profits at our expense. Why doesn’t anybody say that the carbon permits have no intrinsic value other than by government decree? I could continue along these lines.

But we should return to the beginning. Despite huge scientific efforts and spending, it has not been proved that the human effect on the climate is statistically significant. Once again Lord Monckton: “the correct policy to address a non-problem is to have the courage to do nothing.”

This country, my country, as well as the rest of the world face many real issues. We do not need to solve non-existing problems. I don’t think the real issue is temperature and/or CO2, but a new utopian vision of the world. We have only two ways out: salvation through carbon capping or prosperity through freedom, unhampered human activity, productivity and hard work. I vote for the second option.”

[1] The IPCC doesn’t speak about testing. They prefer to use the term “verification” instead - they do not try to invalidate their models, they seek supporting evidence only.

[2] Interview with Lord Christopher Monkton, EIR, June 12, 2009, p. 47

The broken promises include his pledge to enact a “net spending cut,” his promise not to raise taxes on anyone making less than $250,000 a year, and his promise not to sign bills without first giving the public five days of notice.

The Congressional Budget Office says that Obama’s proposed budgets will explode the national debt through massive spending increases, increasing the already large deficits left behind by the Bush administration from $4.4 trillion to $9.3 trillion. His record-setting budgets flagrantly violate his promise to propose a “net spending cut.”

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing into law a regressive excise tax increase to expand the SCHIP program, and by proposing a cap-and-trade energy tax that could charge up to $2 trillion, a massive cost that Obama himself has said will be passed “on to consumers,” as well as homeowners and motorists. (In 2008, Obama privately admitted to the San Francisco Chronicle that if he was elected, electricity bills would “skyrocket” under his administration, but it didn’t report that.)

He also broke his promise not to raise taxes by backing health-care bills that would impose a laundry list of new taxes on the middle class, including a tax on uninsured people.  Americans for Tax Reform earlier summarized the tax increases in ObamaCare: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The costly cap-and-trade energy bill supported by Obama would lead to big tax increases, administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase.   It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”  (Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”)

Although cap-and-trade backers claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.   It would enrich politically-connected corporations, and result in massive destruction of the world’s forests.   By expanding ethanol subsidies and mandates, it would cause enormous “damage to water supplies, soil health and air quality.” Ethanol subsidies have already resulted in forests being destroyed in the Third World, and by diverting cropland to fuel production away from food production, they have already caused famines that have killed countless people in the world’s poorest countries.

Over and over again, Obama has broken his campaign promise to give the public five days of notice before signing bills into law, including his very first law, the trial-lawyer backed Lilly Ledbetter Fair Pay Act. Obama also repeatedly made false claims about the Supreme Court decision that the Ledbetter law overruled, misstating the facts of that case and how long it gives employees to sue over pay discrimination (the Court did NOT say that employees have to sue even before discovering discrimination).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package, much of whose contents were secret until shortly before Congress voted on it, and whose 1400 pages went unread by most Congressmen who voted on it.  (It repealed welfare reform and contained loads of welfare, pork, and waste, while wiping out jobs in the export sector.)

Obama’s broken promises are part of a larger pattern of dishonesty. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run. Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed.

2:34, Hearing begins:

Boxer thanks her Democratic colleagues for attending and for their strong voices in the morning.

Boxer sits before stacks and stacks of pages. She says they are the economic analysis and modeling that she says had been used by EPA’s staff. This is her rebuttal to GOP claims that they don’t have sufficient analysis on the economic impact of the bill.

Boxer brings up her days growing up “in an inner-city.” There, when someone wasn’t right, she had to “call them out.” Presumably, she is “calling out” the GOP by sitting in front of all that paper.

She again expresses her hope that members of the minority will arrive.

Boxer introduces David McIntosh, EPA’s associate administrator for congressional and governmental relations. McIntosh is a political appointee. He worked on Obama’s transition team, which means this is a hearing of partisan Democrats questioning a partisan Democrat.

McIntosh is there to talk about the EPA’s economic analysis of S. 1733. Boxer is having him testify to rebut GOP claims that EPW should not act on the legislation until the EPA has completed comprehensive economic analysis, which would take 5 weeks.

McIntosh claims that economic analysis of H.R. 2454, which EPA has already performed, won’t differ appreciably from analysis of S. 1733. This is based on three years worth of modeling climate legislation. It is “particularly unlikely” that running the “full suite” of S. 1733 would produce any significant difference. He also notes that the EPW committee had much less analysis available to it before it voted on Lieberman-Warner in the summer of 2008.

In light of all this, McIntosh claims that the agency can’t justify the cost (>$135k) and manpower to conduct another run of the economic model.

McIntosh claims that amount of EPA analysis is “unprecedented.”

Sen. Sheldon Whitehouse asks McIntosh to clarify what he said. He ends his questioning by saying that Mr. McIntosh’s testimony sinks the GOP’s arguments for more modeling.

Sen. Jeff Merkley’s line of questioning addresses McIntosh’s point that more modeling is superfluous until the other Senate committees with jurisdiction weigh-in with their input. They both agree that the EPW draft is similar to H.R. 2454, so it’s a waste of money to model the Senate legislation until it actually changes.

Merkley then questions McIntosh about apparent differences between H.R. 2454 and S. 1733 (17% emissions reductions vs. 20% emissions reductions; different percentages of carbon allowances earmarked for deficit reduction; difference offset plans). According to McIntosh, none of these differences would change the model’s output.

Sen. Lautenberg: “Madam Chairman, I think we’re mired down here, but not by serious interests…there has been very little from the other side in terms of what they’d even like to see…it’s hard to find a serious advantage to permitting this delay.”

Sen. Carper questions McIntosh on his personal history. McIntosh was Lieberman’s lead staffer on the Lieberman-Warner-Boxer bill that foundered in Senate in 2008. McIntosh gives a history of that bill’s evolution. McIntosh says that the EPW Committee reported on Lieberman-Warner 4 months before EPA provided comprehensive economic analysis. McIntosh blames this on President George W. Bush.

Boxer asks if there was any economic analysis on the energy bill passed by the Senate Energy and Natural Resources Committee. McIntosh says he is unaware of any such analysis. Boxer is miffed. She again questions the GOP’s motives.

Boxer asks McIntosh what parameters were used to model H.R. 2454. He does this. She then says that all these parameters are in S. 1733. She claims that the Senate bill was drafted to mirror the House bill because the EPA had already performed extensive analysis.

McIntosh again says that the amount of analysis on S. 1733 is “unprecedented.”

Boxer thanks McIntosh. She notes that the doors are open, and she wishes that her “Republican friends” would walk through the door. She complains that minority party calls EPA analysis unsatisfactory, but no members showed up to question McIntosh. She is miffed. “It isn’t fair to roundly criticize an analysis, and then not show up when there’s an in depth discussion of that analysis,” she says. This is indicative of “stall tactics,” and “playing politics.” She continued, “They are stalling over something very important…This is a crucial issue. This is about jobs. This is about spending a billion dollars a day on oil…Our kids’ future.”

She says they’re going to reconvene to continue the mark-up.

N.B. The GOP’s response, in the form of a letter from Sen. George Voinovich, is available here. Specifically, the minority party objects to the EPA’s not having modeled these scenarios:

• International action that lines up with the recent G8 agreement;

• A scenario that assumes that no international offsets will be available;

• A scenario that assumes: (1) through 2050, neither nuclear power nor biomass power deploys any more, or any faster, than in the reference case; and (2) no CCS gets built until after 2030;

• A scenario that assumes both that no international offsets are available and (1) through 2050, neither nuclear power or biomass power deploys any more, or any faster, than in the reference case; and (2) no CCS gets built until after 2030;

• A scenario that imposes the IPM electricity-sector reductions on ADAGE and the resulting impacts on the overall emissions-allowance market; and

• A scenario that shows the impact of US policy on global greenhouse gas emissions and concentration levels.

So the majority party says that the EPW Committe already has access to “unprecedented” economic analysis, and the minority party says that this “unprecedented” analysis is unsatisfactory. Given that we are dealing with a trillion-dollar policy, I don’t see the problem with erring on the side of caution. It strikes me that thorough analysis should be welcome by the Senate, which is supposed to be a deliberative body.

Boxer wants to have climate legislation out of the Environment and Public Works Committee, which she chairs, before the 15th Conference of Parties to the Framework Convention on Climate Change this December in Copenhagen, where the United Nations hopes to produce a successor climate treaty to the failed Kyoto Protocol.

To meet this December deadline, Senator Boxer has pushed an absurdly fast timetable for the usually-deliberative Senate. Ten days ago, she introduced a draft of S. 1733, the Clean Energy Jobs and American Power Act. Last week she conducted three days of marathon hearings on the bill. Today, Boxer began a “mark-up” of the legislation-the first step towards moving the bill out of the EPW Committee.

Of course, most of the deal-making will be made behind the scenes. Boxer’s strategy is to cobble together support for her bill by using the proceeds of the cap-and-trade scheme to buy off Senators otherwise inclined to vote against a massive energy tax. That’s how Democratic leadership in the House of Representatives passed energy rationing legislation.

Republicans on the EPW Committee are so dissatisfied with Boxer’s recklessness that they’ve threatened to boycott the mark-up, and thereby deprive Senator Boxer of a quorum. The Republicans are asking for a full economic analysis of the bill by the EPA, which would take at least five weeks.

But Boxer used an unusual interpretation of Senate rules to press forward with the mark-up without participation from the minority party. The proceedings began this morning. No Republicans attended, although Senator George Voinovich (R-OH) introduced a statement decrying Boxer’s blitzkrieg strategy.

Last night, Boxer seemed to hand the Republicans an olive branch, by extending the deadline for offering amendments from 9 am to 5 pm. She also arranged for an EPA official to brief the Committee on their economic analysis.

This morning, however, Boxer was far from conciliatory. She indicated that she would hold mark-up hearings tomorrow, with or without a presence from the minority party. At one point, she told the room “There’s no room for bipartisanship on this issue…This isn’t us. This is them.”

While it’s still unclear whether or not Boxer has the political courage to throw Senate decorum out the window in order to meet a deadline imposed by the United Nations, her comments today indicate that she intent on ramming this bill through the EPW Committee, with or without input from the Republicans.

Video of Dr. Lindzen’s presentation, “Deconstructing Global Warming”

Power point Presentation

According to Bjørn Lomborg, “For the money it takes to save one life with carbon cuts, smarter policies could save 78,000 lives. ”

Let’s pursue those smarter policies, then.

The Washington Examiner explains how the bill will lead to deforestation, and thus increase greenhouse gas emissions in the long run.

The bill, which is loaded with pork for special interests, is backed by Obama, who once admitted that under his cap-and-trade scheme, electricity and utility bills would “skyrocket” and coal-fed power plants would go “bankrupt.”  Treasury Department analysts estimated it could increase taxes on the average American household by $1,761 per year.

The bill also contains environmentally harmful provisions, such as massive ethanol subsidies, which will result in “damage to water supplies, soil health and air quality.” Ethanol subsidies have resulted in forests being destroyed in the Third World, and caused famines that have killed countless people in the world’s poorest countries.

In the month since, it doesn’t seem as though Kerry bothered to learn anything about the bill he supposedly wrote. Yesterday he told the Senate Environment and Public Works Committee that a cap-and-trade “is not a government-run program.” Huh?!?

Perhaps the truth is too damaging politically for the Senator to countenance, so I’ll go ahead and define a cap-and-trade for you: It’s an government-run program designed to raise the price of hydrocarbon fuels that account for 85% of America’s energy. That is, it’s an energy tax.