Emission Cuts No Curb to Economic Growth

June 9, 2014


New York Times:

The cries of protest have been fierce, warning that President Obama’s plan to cut greenhouse gases from power plants will bring soaring electricity bills and even plunge the nation into blackouts. By the time the administration is finished, one prominent critic said, “millions of Americans will be freezing in the dark.”

Yet cuts on the scale Mr. Obama is calling for — a 30 percent reduction in emissions from the nation’s electricity industry by 2030 — have already been accomplished in parts of the country.

At least 10 states cut their emissions by that amount or more between 2005 and 2012, and several other states were well on their way, almost two decades before Mr. Obama’s clock for the nation runs out.

That does not mean these states are off the hook under the Obama plan unveiled this week — they will probably be expected to cut more to help achieve the overall national goal — but their strides so far have not brought economic ruin. In New England, a region that has made some of the biggest cuts in emissions, residential electricity bills fell 7 percent from 2005 to 2012, adjusted for inflation. And economic growth in the region ran slightly ahead of the national average.

“This is not going to be the Armageddon that some people think,” said Teresa Marks, director of the Arkansas Department of Environmental Quality.

In fact, with years left to reach Mr. Obama’s goal, and many states already heading in that direction, some of the loudest attacks on the plan are coming from those who contend it is not ambitious enough.

“I think it’s properly ambitious — for the first term of the Bill Clinton administration,” said Bill McKibben, the president and co-founder of 350.org, a group pushing for climate action. “Given the melting Antarctic, we obviously should be doing far, far more, but at least we’re finally started, and that’s to Obama’s credit.”

Europe, by contrast, is considering a 43 percent cut in emissions from power plants and other energy-intensive industries by 2030.

Maine, Massachusetts, New Hampshire and New York cut their power-sector emissions more than 40 percent from 2005 to 2012, according to theGeorgetown Climate Center, with Maryland close behind at 39 percent. The states are part of a nine-state project called the Regional Greenhouse Gas Initiative and, like much of the country, have benefited from the recent abundance of cheap natural gas.

That has allowed them to dial down coal-burning power plants and dial up gas-fired plants, which emit roughly half as much carbon dioxide as coal plants, per unit of electricity produced.

Through a program called cap and trade, the Northeastern states also impose a small price on emissions of carbon dioxide from power generation, and plow the proceeds back into energy-efficiency programs, such as retrofitting homes and businesses, lowering electricity bills. And the states have encouraged the growth of emissions-free renewable power and more judicious use of energy.

David W. Cash, the Massachusetts commissioner of environmental protection, said he saw a direct link between the state’s above-average economic performance in recent years and lower energy bills for businesses and consumers.

“Every dollar they’re not spending on coal that comes from Colombia or natural gas that comes from Pennsylvania is a dollar that stays here in Massachusetts,” Mr. Cash said.

Germany is, of course, a prime example of growing economy, declining emissions. I’ve pointed out before that with the world’s most aggressive renewables program, Germany maintains low unemployment and a budget surplus.

Bloomberg/Business Week:

FRANKFURT, Germany (AP) — While politicians in the United States argue about spending cuts, deficits and the debt ceiling, Germany faces a different discussion: What to do with a looming budget surplus.

The country’s strong economy means it will take in more in tax revenue than it will spend next year for a third straight year, a group of top economic institutes said in a twice-annual report Thursday.

The report urged the government to put the surplus to good use and suggested investing in education and scientific research. The government could also give taxpayers a break by eliminating so-called bracket creep, the institutes said. Bracket creep is when inflation pushes taxpayers into higher tax brackets.

The German government will run a surplus of 0.1 percent of economic output this year and 0.3 percent next year — or 7.7 billion euros ($10.5 billion) after taking in 1.257 trillion euros and spending 1.249 trillion euros. Germany also had a small surplus in 2012.

Germany will continue to run surpluses to 2018, if tax and spending practices remain the same, the report said, reaching 1.5 percent of GDP. Provisions of Germany’s constitution will require, however, that some of that money be used to start paying down debt.

Froma Harrop in the Nashville Tennessean:

Barack Obama need not ask how well he’s doing in coal country, because the answer is always the same: not well.

A cerebral black man never had much of a chance in poor, rural white Appalachia; let’s be honest (though we don’t have to like it). In 2012, Obama lost to Mitt Romney in West Virginia by a 27-point margin. So Obama had little to lose politically in proposing new rules to cut carbon emissions from coal-fired power plants.

Some Democrats worry that coal country could deliver some vulnerable seats to Republicans, perhaps handing them the Senate majority. That could happen, but the fate of the planet should be more important than the 2014 midterms.

People in the Appalachian coal region don’t have much to lose, because they’ve already lost. The coal jobs started vanishing in the ’50s through mechanization. In just the past three years, Kentucky’s already-shrunken coal employment has fallen by half.

And even the coal is disappearing. Because the thicker seams are already mined out, Appalachia can’t compete with cheaper coal from the West and the Illinois Basin.


Anyhow, electric power plants were already replacing coal with cleaner, relatively cheap and abundant natural gas. The new rules would only speed the process.

“When policies and other factors cause serious economic problems for a region or group of Americans,” Jason Bailey writes in the blog “KY Policy,” “there is precedent for federal investments to help workers and communities adjust and transition.”

The operative words here are “adjust and transition.” That’s something the region’s politicians have largely failed to do, preferring time and again to rail against the “evil” Environmental Protection Agency and decry a “war on coal.”

That served the resource-extraction industries but not the people, Ted Boettner of the West Virginia Center on Budget and Policy told me. The people lost opportunities to parlay environmental legislation into federal help for getting out from under coal.

Back in 2009, there was talk of a cap-and-trade bill to reduce emissions of greenhouse gases. “A lot of money from the cap-and-trade system could have flowed back into West Virginia as investment in clean energy,” Boettner said.

There were proposals to help workers hurt by climate change legislation. The American Worker Transition and Community Assistance Act would have provided communities with grants to encourage entrepreneurs. It didn’t go anywhere.

Boettner remembers asking an energy staffer for Sen. Jay Rockefeller, D-W.Va., about it. The response, Boettner recalls, was, “Coal miners don’t want handouts.”

Boettner came back: “This isn’t a handout. West Virginia has been a sacrifice from its very beginning. We powered America, but we got very little in return.”

He goes on: “The coal thing is entirely frustrating. The bad part is that the political leaders in West Virginia are telling people that if you get the EPA off our backs, the era of milk and honey will return.”

As we speak, Democrats in coal country are running in circles, denouncing the proposed rules. Rep. Nick J. Rahall of West Virginia called it “devastating” at best, a “death blow” at worst.

Boettner does see some rays of light, however, on the political side. For example, Kentucky Gov. Steve Beshear, a Democrat, and Rep. Hal Rogers, a Republican, talk openly about helping coal-producing counties diversify their economy — and propose directing severance tax funds paid by the coal industry to coal-producing counties for economic development.

Rogers went as far as to say, “Our best resources” are not coal. “It’s our people.”

There’s no soft economic landing for this region anymore — but it can be made less hard. Fortunately, the people are tough.


17 Responses to “Emission Cuts No Curb to Economic Growth”

  1. petersjazz Says:

    Emissions per capita: USA 10, China 5. So USA is the country that needs to do the most.

    • dumboldguy Says:

      Using those numbers (which are not correct), since there are over four times as many Chinese as there are Americans, total emissions are 1 X 10 =10 for the USA, and 4+ X 5 = 20+ for China. China needs to “do the most” to ensure that their per capita emissions do not rise to the level of the USA or the other developed countries as they attempt to achieve our living standard. If they don’t, the battle will be over no matter what we do in the USA.

      • rayduray Says:


        Too funny. Nice way to shirk responsibility there. 🙂

        • dumboldguy Says:

          WHAT? We and the rest of the developed world are responsible for most of the past emissions but a decreasing share of the future load. We are also responsible for the runaway capitalism/free market model that is the real source of the looming disaster. If the Chinese say “F*** You, you got yours and now we want ours” and DON’T fight the emissions battle hard enough, it won’t matter who’s “responsible”.

      • petersjazz Says:

        Sorry, I looked at co2 emission per capita and now I saw sligtly different values. USA 17.2, China 7.2, so I wasnt totally correct. But you seems to think China needs to do more since its a bigger country? So if China were to be split into 4 countries with the CO2 emissions 7.2 per capita it would be OK? Less than half that of USA. If there was some kind of justice every person should have a co2 emission cap regarding of where from.

        • dumboldguy Says:

          I’m glad you looked it up, because the more correct numbers make both our cases stronger. You miss the point again, though. The point is first that there are over four times as many Chinese, and you can split them into 4 or 10 countries and the problem remains the same. Second, they are industrializing rapidly and adopting our economic model, so their emissions are increasing both per capita and in total. Stop moralizing about our “responsibility” and “justice” and look forward at the simple math involved. China needs to “do more” because they (and India) will have the greatest future impact. And we will likely soon have worldwide CO2 emissions caps once the SHTF and we have to go on a worldwide “War against CO2” footing. Read The Great Disruption by Gilding.

  2. And (drum roll) the “prominent critic” is Joe Blast.

    “President Obama and the Democrats are once again unleashing the Environmental Protection Agency on the American people. This is Obamacare for the environment: guaranteed to raise costs, reduce choices, and destroy an existing industry. By the time EPA is finished, millions of Americans will be freezing in the dark.”

  3. This New York Times article is such nonsense. They are trying to sell the idea that it’s easy to cut CO2 emissions by 30% and not hurt economic growth. And they’ve got statistics to prove it. But once again details matter. The “big success” in California and elsewhere in cutting CO2 emissions was accomplished by substituting natural gas for coal. I know that some of you want to believe it was because of windmills and changing lightbulbs, but in the real world it was natural gas. FRACKED natural gas. The article even admits that, but glosses over this fact as though it wasn’t important.

    I probably don’t have to tell you all that fracking comes with some big costs to the environment. There’s the already well-known issue of groundwater pollution. But the bigger issue – for me, at least – is that methane is known to be leaking from fracked regions. It’s almost impossible to measure how much is leaking. Some of it’s leaking from the well heads, but most is probably leaking out of the ground all over the region. Once liberated from shale, the methane will inevitable migrate upwards through porous rock and soil, until it reaches the atmosphere. That won’t show up on those official glowing statistics on what a great job we’re doing reducing CO2 pollution. But the fact that we can hide it with statistics doesn’t make it disappear.

    Since we’ve been talking about China here, I”m curious: is the big plan is to lower China’s CO2 emissions by stopping coal burning and substituting fracked natural gas? That might make the air in Beijing more breathable, but what’s it going to do to AGW?

    • andrewfez Says:

      I read an article last year that said 2 coal plants in the TN shut down due to less demand for electricity…….right after they spent millions retrofitting them to produce less waste.

      I noticed Iowa is in the -10 to -20 category. Wind or gas do you reckon?

      • andrewfez Says:

        I just realized i was looking at Idaho when thinking about Iowa; yeah they went the other way…

    • So the fact that California, a state with a greater population than Texas, but with less energy demand has nothing to do with it? I am not a fan of gas either, but you seem to be stretched a little thin there. Renewables have barely started to play, its a little premature to declare the game over.
      “one of the country’s top climatologists, Michael Mann, who criticized this story in a tweet to comment. He wrote:
      Defeatist framing is not helpful and threatens serving as self-fulfilling prophecy. We all grew up reading the “The Little Engine that Could,” not “The Little Engine that Couldn’t.” The only real obstacle to averting dangerous climate change is lack of willpower and imagination.”
      There is no comprehensive China plan as yet. Chinas recent growth is so fast that it shot past the US in carbon in only a few years. Now the US carbon emissions are dropping, but China still rising.

      • petersjazz Says:

        Still USA emission per capital is more than double the once of China (17.2 vs 7.2). Thats why USA has a special responability.

  4. adelady Says:

    And might we all point out yet another of our lost opportunities in decarbonising the world’s economy. Thirty plus years ago Carter put those panels on the White House roof and that should have been the green light for at least solar, if not other renewables, to go ahead.

    But we bypassed that. If we’d got started then and developed the technology and its associated manufacturing industries, China and India would have had a head start on using developed renewable technologies. They might, or if we’re honest they would most certainly, have eventually outclassed us on manufacturing panels, but we would have had the economic benefits of that industry for decades instead of being bit players only. More importantly, the great brown cloud from Asia would have been a lot smaller, much paler and lasted nowhere near as long if those countries had had the benefit of us doing the industrial groundwork.

    • andrewfez Says:

      We just put up a 30% tariff on Chinese solar panels, hoping it would help our domestic solar out. Investors in domestic solar were happy about this…..for exactly one day until an analyst from – if i recall correctly – Citi professed the tariff would actually hurt the domestic industry (probably gave material suppliers more leverage or the like). So just as i doubled down on my First Solar position, I watched it spring up 5 to 7% at the tariff announcement the next day, then ride that value back down in reaction to the Citi analyst the days following.

      1981 was the inflection point regarding making good investments in society via government money. That was when Regan’s free market ideology started to leak into the system. College tuition, which was rising slower than inflation in the 1970’s started its ungovernable price spiral at that point, as we converted from seeing it as an investment in innovation for the benefit of society, to seeing it as a business opportunity for an individual to invest in, in order to keep themselves out of the poor class…..with a pretty inelastic price: whatever they charge, we’ll pay to keep from hitting the poor house. Another systemic risk related bubble compliments of free market ideology.

      One of my neighbors i grew up with lives in Myrtle Beach and is presently building homes in the area, which he posts on his Facebook feed. I’ve got a sneaky suspicion these homes going up presently are not any more energy efficient than those of homes built 20 years ago, even though RMI, et alia has shown a home can be super efficient without anymore upfront cost than a ‘regular’ home. Our own complacency is slowing the inventory turnover from energy hog buildings to the more low footprint kind.

  5. […] 2014/06/09: PSinclair: Emission Cuts No Curb to Economic Growth […]

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