Common Tragedies

Thoughts on Environmental Economics

Being for Energy Independence v. Being Against Progress

Posted by Andrew Stevenson on July 14, 2009

Plenty of criticism and analysis has already been directed at Alaska Governor Sarah Palin’s cap-and-trade editorial in the WaPo today (see here, here, and here). Instead of jumping on the bandwagon, I’d like to juxtapose it against an alternative analysis of the American Clean Energy and Security Act (ACES) by my former Congressman Mark Kirk (R-IL), who voted in favor of the bill. I’m not trying to pretend that Sarah Palin and Mark Kirk fall at the exact same point on the political spectrum (nor am I trying to set up some sort of artificial debate between the two of them). Indeed, Kirk represents a moderate suburban Chicago district (although one that would be hard hit by increased taxes on the wealthy), has always been fairly green, and had further political incentives for the “Yes” vote given his upcoming run for statewide office.

However, it’s worth illustrating that while both share the same overarching policy objective—“an ‘all of the above’ energy strategy”—Kirk’s reasoned, experienced, fact-based, forward-looking and still very much conservative analysis led him to a very different place than Palin. My overall message to the Republican Party: please, please listen to the Mark Kirks in Congress when designing your strategy on climate and energy legislation, and not the Sarah Palins.

The Starting Point

Kirk: “For 2009, our top goal should be energy independence. I support exploring for energy off our coasts, expanding nuclear power and building a natural gas pipeline across Canada to lower heating costs in the Midwest…”

Palin: “We must move in a new direction. We are ripe for economic growth and energy independence if we responsibly tap the resources that God created right underfoot on American soil…Our 3,000-mile natural gas pipeline will transport hundreds of trillions of cubic feet of our clean natural gas to hungry markets across America. We can safely drill for U.S. oil offshore…”

Kirk and Palin seem to be agreed to the standard Republican “all of the above” energy strategy, focused on promoting domestic sources of energy and reducing America’s dependence on foreign oil.

The Experience

Kirk: “…the underlying ACES bill would still lower our dependence on foreign oil by diversifying American energy production. It is time to break the boom and bust cycle of high gas prices and the need to deploy three separate armies to the Middle East (Desert Storm, Iraqi Freedom and Enduring Freedom). As you may know, I am a veteran of the Desert Storm and Enduring Freedom missions.”In 1998 and 1999, I served as part of the U.S. delegation to both the Kyoto and Buenos Aires UN Climate Change conferences. In those years, there was a significant debate about the amount and effect of atmospheric carbon dioxide. I was a skeptic and spent hundreds of hours on the subject of 1990s climate science. In the Congress, our job is to learn as much as possible from the latest peer-reviewed non-partisan scientists and then plot the best course for our nation.”

Palin: Governor of a large, oil producing state (surely there are no perverse incentives there). Well, until she resigned.

You can’t fault Palin for looking out for her constituents, and supporting increased domestic oil and gas production. However, Kirk has seen firsthand the impacts of U.S. dependence on foreign oil when fighting for his country, and extensively studied climate science. Whose experience is more valuable when judging U.S. climate and energy policy options?

The Analysis

Kirk: “The National Academy of Sciences reports that the earth’s average temperature already increased by 1.4°F, from 56.8°F in 1920 to 58.2°F in 2007. NOAA also reports that due to a 30% drop in winter ice covering the Great Lakes since 1972, evaporation may be the cause of Lake Michigan’s declining water level…I am a strong supporter of the non-partisan Congressional Budget Office. When they reported the Democratic health care bill cost $1.6 Trillion, we should take notice and rewrite that bill. That is why I have become one of the leading Republican authors of an alternative health care bill that will be the Congress’s least expensive bill, costing our Treasury very little. I read their report on ACES carefully too. CBO reports that peer-reviewed scientists expect the world’s average temperature to increase by 9 degrees by 2100, lowering U.S. economic output by 3% annually. In sum, they estimated the costs of the bill per household at $140 annually.”

Palin: “The Americans hit hardest will be those already struggling to make ends meet. As the president eloquently puts it, their electricity bills will ‘necessarily skyrocket.’ So much for not raising taxes on anyone making less than $250,000 a year. Even Warren Buffett, an ardent Obama supporter, admitted that under the cap-and-tax scheme, ‘poor people are going to pay a lot more for electricity.’ ”

It’s perfectly reasonable for two intelligent, reasonable people to look at the same study and draw two different conclusions, based on their judgment of the underlying assumptions or methodologies. However, this was not the case here. Here we have a careful review of available non-partisan scientific and economic data specific to this exact piece of legislation versus unsubstantiated statements and generalized quotes. Once again, whose argument is more compelling?

The Conclusion:

Kirk: “In sum, I would have preferred a bill that focused more on energy independence and less on some of the complications in this bill. Nevertheless, the 1990 Clean Air Act signed by President Bush established a cap and trade system to reduce acid rain that proved to be a great low-cost success…In the coming Senate debate, I hope we can repeat this environmental success and aggressively back a national program to defund Iran and Venezuela by reducing America’s need for foreign oil.

Palin: “Can America produce more of its own energy through strategic investments that protect the environment, revive our economy and secure our nation? Yes, we can. Just not with Barack Obama’s energy cap-and-tax plan.”

Hmmm…somehow there seems to still be a disagreement between Kirk and Palin about the merits of ACES and the direction of America’s climate and energy policy. Based on their experience, evidence and analysis, I wonder whom to believe?

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4 Responses to “Being for Energy Independence v. Being Against Progress”

  1. Tiff Clements said

    I’d like to start by waiving all claims to have any more insight into the mind and motivations of AK Gov. Sarah Palin. Despite spending a year in the state, your guess is as good as mine most the time about what Alaskans are thinking. I can really only say the governor is like Alaska itself, beautiful, rough around the edges, and endlessly baffling.

    That said, I think it bears pointing out that while her comments were a bit shy quantifiable facts, they were utterly Alaskan. Moreover, her concerns that cap-and-trade legislation will hurt Alaskans (a population notorious for only wanting the good that comes from a federal government and none of the bad see Ted Stevens refuses to cough up AK funds after Hurricane Katrina , Bridges to Nowhere, and essentially the entire career of Congressman Don Young) don’t seem unfounded.

    So while I agree that a woman with a narrow experience and allegiance to a small (and I mean small, more people live in Indianapolis than the entire state of Alaska) constituency has no business being the mouthpiece of a major party on this issue, she’s not wholly incorrect in her assessment. Rural populations, dependent upon expensive fuels to heat their homes (many of which are abundant in their own state) and faced with extreme poverty.

    Maybe she’s no longer the right person to speak up for the little guy, but I think someone should. Our nation does need a dramatic overhaul of its climate and energy policy, but it needn’t come at the expense of already marginalized populations.

    • I certainly respect her right to voice her opinion, and speak up for people who otherwise might not have a voice. She doesn’t present any real evidence, however, demonstrating how she came to the conclusion or to what extent this legislation will “disadvantage already marginalized populations”, just vague quotes from Obama and Buffett. I appreciate the complexities of Alaskan politics, but their two Senators are both fairly close to the political center on this issue (one R and one D), so I’m not sure I buy that excuse. I was mostly trying to make the point, which you evidently agree with, that the Republican party would benefit from looking to leaders who rely more on concrete experience and analysis when deciding their position on climate and energy legislation.

  2. Michael Davitian said

    Andy,

    I often hear “energy independence” coupled with environmental initiatives designed to reduce carbon output. However, it’s my understanding that the cheapest sources of oil are in the middle east (I have no source right now), not the domestic reserves we have available to us. If the price of energy increases, as it would with any system that’s designed to limit carbon output, and is coupled with a commensurate drop in demand, wouldn’t that result in energy suppliers reducing their more expensive, domestic fuel sources and thereby increasing the percentage (i.e. increasing our dependence) of foreign fuel sources?

    Perhaps my assertion that middle eastern sources are cheaper is off base, but that’s what I’ve read (albeit from conservative columnists), but it seems plausible, as the United States is increasingly sourcing its oil from offshore reserves.

    • Andrew Stevenson said

      I have to be honest that I wasn’t sure about this either, but a quick search reveals that U.S. oil sources are actually cheaper than those from the Middle East and the rest of OPEC. Granted these fluctuate a lot, but I would imagine those from oversease fluctuate a lot more. Perhaps greater domestic investment could drive those prices down even further.

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