It seems that the leading man-made cause of global warming is environmentalism; specifically, efforts to improve air quality by reducing pollution, New Scientist reports.

Since 1980, average air temperatures in Europe have risen 1 °C: much more than expected from greenhouse-gas warming alone. Christian Ruckstuhl of the Institute for Atmospheric and Climate Science in Switzerland and colleagues took aerosol concentrations from six locations in northern Europe, measured between 1986 and 2005, and compared them with solar-radiation measurements over the same period. Aerosol concentrations dropped by up to 60 per cent over the 29-year period, while solar radiation rose by around 1 watt per square metre (Geophysical Research Letters, DOI: 10.1029/2008GL034228). “The decrease in aerosols probably accounts for at least half of the warming over Europe in the last 30 years,” says Rolf Philipona, a co-author of the study at MeteoSwiss, Switzerland’s national weather service.

Say Anything’s Piligrim finds this terrifically amusing:  “Well now, there’s a moral dilemna for you. If we go back to eating roots and berries and living in pre-industrial all natural bliss, one with nature and all that, we might end up with a warmer planet than if we just went ahead and enjoyed ourselves.”

Of course, clean air is a good thing in and of itself.  I was, however, under the impression that the rationale for getting rid of aerosols (or, more accurately, the hydroflourocarbons that propelled them) was because we thought they were destroying the ozone layer and thereby increasing harmful ultraviolet rays from the sun.  It would be quite odd, indeed, if our solution to the problem yielded the same results in a different way.

UPDATE:  Commenters tell me that, in this case, aerosols have nothing to do with aerosol spray cans but simply particulates in the air.  Oddly, the report in New Scientist Environment is entitled “Cleaner skies explain surprise rate of warming” and the linked abstract is unhelpful. Is the Web headline misrepresenting the article itself?

I’ve updated the headline and illustration to eliminate confusion, although I remain somewhat confused as to what the study actually reports.

UPDATE II: A reader has sent me a PDF copy of the entire journal article which I’ve uploaded here.  I’ve made a quick scan and, frankly, still don’t understand it.

Illustration:  NASA Earth Observatory

Today’s Washington Post summarizes an impending Clean Air Act case regarding the EPA’s authority to regulate carbon dioxide emissions.

The Bush administration is defending its refusal to regulate carbon dioxide emissions from new motor vehicles in the first case about global warming to reach the Supreme Court. The Environmental Protection Agency lacks the power to regulate carbon dioxide as a pollutant under the Clean Air Act, the administration said in court papers. Even if it had such authority, the EPA still would not use it at this point because of uncertainty surrounding the issue of global warming, the administration said.

The states’ petition contends:

. . . EPA refused to regulate carbon dioxide, despite overwhelming research and scientific consensus that carbon dioxide contributes to global warming and thus harms “public health and welfare.” EPA’s claim that it does not have the authority to regulate carbon dioxide emissions is contrary to the plain language of the Clean Air Act.

I’m not an attorney, let alone a specialist in environmental law, but the statue seems clear here. While carbon dioxide is a covered pollutant under the Act, it is not specified in the paragraph which relates to new motor vehicles, § 7521. Emission standards for new motor vehicles or new motor vehicle engines subsection, subparagraph (a) (3) (A) (i):

Unless the standard is changed as provided in subparagraph (B), regulations under paragraph (1) of this subsection applicable to emissions of hydrocarbons, carbon monoxide, oxides of nitrogen, and particulate matter from classes or categories of heavy-duty vehicles or engines manufactured during or after model year 1983 shall contain standards which reflect the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will be available for the model year to which such standards apply, giving appropriate consideration to cost, energy, and safety factors associated with the application of such technology.

The Supreme Court should, therefore, uphold the D.C. Circuit’s ruling siding with the administration in this dispute.

The broader question, though, as to whether the administration should be looking for solutions to limit carbon dioxide emission, is not so straightforward. The petitioners assert that,

A growing body of evidence, including reports from the National Academy of Sciences, NASA and major universities, has found that increasing global temperatures will have dramatic effects in the United States, including rising sea levels, worsened air quality, water shortages and droughts, and increased intensity of hurricanes. Power plants are the largest source of carbon dioxide emissions responsible for increasing temperatures worldwide. According to current projections, dozens or even hundreds of new coal-fired plants will be built in the United States over the next 15 years. Under the current rule, these plants would face no requirement to control or reduce carbon dioxide emissions. Since the power plants have a life span of 40-60 years, the plants built in the near future will determine the level of our carbon emissions for generations.

This certainly seems right. While there is debate as to the exact interaction of these variables as well as the degree to which changing human behavior will solve the problems, we should be able to agree that the overwhelming consensus of scientific opinion is in one direction.

From both a public safety and practical political perspective, then, a Republican – conservative – libertarian right solution should be formulated that does not involve abject denial of that consensus. I propose some general principles.

1. Environmental regulation creates trade-offs. We mustn’t pretend, as some on the Left do, that actions taken to protect the environment are uniformly good. Changing mass economic behavior has consequences, many of which are not immediately foreseeable.

2. Man is the measure of all things. If it’s a contest between inconveniencing the snail darter and putting tens of thousands of Americans out of work, the snail darter loses. This has a corollary, however.

3. It’s our habitat, too. Those arguing from the Right sometimes forget that it’s not just snail darters, spotted owls, and other wildlife that benefit from a healthy environment. Clean air and clean water is something that Left and Right should be able to agree on; the question is how to best achieve that goal without side effects that are worse than the cure.

4. Market solutions are best but need help. Obviously, it would be silly to create regulations that would force tearing down perfectly good power plants or imposing new design standards on automobiles that are prohibitively expensive. We need to be able to produce electricity and transport ourselves, after all. And making it too costly for people to replace their existing cars with new ones means sacrificing the latest safety features, too.

On the other hand, new power plants are being built and it makes sense to build them using the cleanest economically feasible technology available. Tax credits and other governmental incentives toward that end are likely a worthwhile investment of public funds.

With auto emissions, it makes sense to couple clean emissions with fuel efficiency and, preferably, alternative forms of energy that reduce our dependence on Middle Eastern and Venezuelan oil. There will likely be trade-offs here. Government should encourage cooperation in finding this new technology, perhaps including limited waivers of applicable anti-trust regulations and assistance in putting in place a new refueling infrastructure to make conversion feasible.

Crossposted at Terra Rossa

Kevin Drum likes the California initiative to slow global warming. He likes it so much he is willing to put his money where his mouth is…sort of. And Jane Galt/Megan McArdle seems willing to take the bet. I wouldn’t take this bet.

Kevin tends to take a really narrow view of what economics costs are. For example, he completely ignores things like opportunity costs. That is, if jobs under this initiative are going to be X, and without the initiative they’d be Y, and Y > X he wont count that as a loss. He has insistend in the past that any and all claims of decreased economic activity due to environmental laws and regulations are bogus or exaggerated by businesses (which should raise the question of, if Kevin is right, why are businesses opposed to such laws and regulations?).

This isn’t something that I’m making up out of whole cloth. Here is one study that looks at the 1970 and the 1977 amendments to the Clean Air Act.

I find that in the first 15 years after the Amendments became law (1972- 1987), nonattainment counties (relative to attainment ones) lost approximately 590,000 jobs, $37 billion in capital stock, and $75 billion (1987$) of output in pollution intensive industries.

Now, there is the Porter Hypothesis which suggests that when there is a severe environmental regulation it could result in innovation which improves the firms performance with either partially or fully offsets the negative impact of the regulation. While this is possible, it is a hypothesis that strikes me as not being generally true. If it were true, then all we’d need to do is institute extremely draconian environmental regulations and live in an environment with little or no polution and no loss of economic well being. Sounds like a bit of a stretch to say the least.

Ian over at Truck and Barter also has a problem with the bet.

Here’s my question: what about all of the diverted activity from companies that choose, on the margin, to avoid Cali to begin with. Stores not opened, factories not built, workforces and facilities not expanded…and so on. And, if California experiences growth, what would be the counterfactual? Would there have been more or less growth absent the new bill?

Or more simply, how are we going to measure the “negative impact”. If a business doesn’t open that means 1,000 less jobs that is a loss for California. But you wont read about that in the paper nor will it show up in any official statistics.

Like Ian I wouldn’t take this bet. At least not without nowing how we are going to try and asses the costs/benefits of this legislation. This doesn’t mean that implementing policies to improve/protect the environment are bad, but that one shouldn’t have these have-your-cake-and-eat-it-too attitudes about it either.

$2.50 a gallon gasoline might be right around the corner:

Gasoline prices are falling fast and could keep dropping for months. “The only place they have to go is down,” says Fred Rozell, gasoline analyst at the Oil Price Information Service (OPIS). “We’ll be closer to $2 than $3 come Thanksgiving.”

And just in time for the fall elections, too!

I blame Bush. Or Rove. And Halliburton is mixed up in it somehow. Whomever–it’s a Republican conspiracy.

Either that, or just the market at work.

•The end of summer. Driving slows, reducing demand for gasoline. And federal requirements for clean air, summer-blend gasoline end next month, making gasoline cheaper to refine and import.

•Sluggish demand. Gasoline use in the first eight months of the year is up 1% vs. a year ago, less than the 1.5% to 2% growth that’s typical, says Michael Morris, analyst at the U.S. Energy Information Administration. “Wholesalers are trying to get rid of product. The growth in demand for gasoline has really tapered off,” he says.

Wholesale prices are falling faster than retail gasoline prices, meaning stations are making more money than when prices were $3. Wholesale prices Tuesday ranged from $1.77 to $1.79 a gallon, well below the $2-plus prices typical until recently.

•Petroleum traders, worried that prices are too high to last, are selling their holdings. That pushes prices down. They also believe hurricanes won’t disrupt Gulf of Mexico production, OPIS senior analyst Tom Kloza says.

Crude oil, which accounts for roughly half the price of gasoline, ended New York trading Tuesday down 90 cents, at $69.71 a barrel. That’s the first time it’s closed at less than $70 since May 4.

That’s pretty complicated, though. I’d go with Bush-Rove-Halliburton.

UPDATE: Steven Taylor reports that it’s down to $2.6something in Alabama. I paid $3.19 in Alexandria, Virginia yesterday for 93 octane; I believe regular was $2.89.

Yesterday I wrote on the successes of the European carbon market. Well, a new piece from The Economist ($) points to some flaws in the way the market was established.

Among the shortcomings, the pollution credits were not auctioned off so companies would be forced to look at the the amount they would need given the caps. To top that off, the governments didn’t really know how many credits would be needed and just gave them away based on a half-assed guess. The companies ended up with far too many.

On top of this, the credits program only lasts three years, and after that no one knows where the caps will be set or if the program will be extended. This is the exact opposite of what the U.S. did with the 1990 Amendments to the Clean Air Act. It was made clear when the SO2 caps would begin, drop and then reach a permanent aggregate amount. There was five years notice for the beginning and the decreases were scheduled out in detail. Knowing that the legislation was permanent, companies made the necessary trade-offs and investments to permanently drop the level of SO2 output. It went into the decision to build new plants (which is why so many natural gas plants were built in the 1990s) and the decision to close plants or use them as peakers.

Leave it to Europe to make such a mess of a market. It has had its successes, as noted in my earlier post, but not nearly to the level possible. Here’s a bit from The Economist:

Three problems have emerged. The first is the consequence of handing allowances free to existing polluters (a process known as “grandfathering”). The polluters pocketed them, passing on the extra cost of production to their consumers. Moreover, once trading took off, the price of allowances rocketed to €30 ($40) a tonne. Developing countries, meanwhile, were selling permits for about half that (because they cannot yet be traded, and are regarded as riskier). So polluters have been cashing in their allowances, buying cheap CDM permits—and keeping the difference. According to a report by IPA Energy Consulting, Britain’s power companies alone have profited to the tune of around £800m ($1.5 billion) a year.

The second problem was that when the scheme started there was little information about how much pollution the 13,000 factories were emitting. The original levels claimed by member governments were not much more than guesswork, and not surprisingly were generous. Now that levels are being monitored, it turns out that Europe is not emitting as much as it thought it was. When this emerged last month, the price of carbon allowances crashed.

Third, the current phase of the ETS lasts for only three years. Nobody knows what level of allowances will then be set. Since the payback period for cleaner power-generating technology is at least five years, there is no incentive for producers to invest in cleaner technologies.

Why couldn’t they simply follow the American example? Wait, that question answers itself.

While at work the other day I saw an interesting headline to an article.

State emissions cap would help economy while saving the air

My first thought was, “Hmmm…I wonder if they’ll talk about improved economic efficiency?” So I read the article. And nowhere in the article does it talk about economic efficiency. Instead in the third to last paragraph (which I’ve included below so that the full context is present) we find this nonsense (emphasis added by me):

Once in place, a mandatory cap on emissions would not only help California do its part to combat global warming but also would pump new vitality into the state’s burgeoning clean energy sector. It would be a signal to entrepreneurs and innovators that new energy technologies could truly pay off. As such, it could prove to be a shot in the arm of California’s economy.

So we went from “Would” in the title to the article to “could” way down at the end of the article. The editorial staff at the San Jose Mercury News are a bunch of blockheads (this is actually the charitable interpretation, IMO). I thought my grammar and english skills were bad, but sheesh how is it possible to go from would to could?

On top of this, the very idea that it will be good for the economy is suspect. A cap-and-trade emissions strategy is going to impose another layer of costs on the energy industry in California and when it comes to electricity California already pays pretty high prices. What will be the likely result? Some firms might very well shut down, cut back on employment, etc. In short, cut costs. This will likely diminish economic output and since the basic measures of economic performance tend to track just output it will likely show up in official statistics as a loss, not a gain.

Now, this is where the economic efficiency comes in. There is more to the economy than simple output of goods and services. There is also value in things like clean air, and other environmental issues as well. So it is possible that this move will improve economic efficiency, but title of this article is highly misleading at best and at worst and outright lie.