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Centralized, Political Control No Way to Save the Planet

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The talks were described as glowing rhetoric (a.k.a. hot air) and cherry-picked fact. Defying traditional definitions of climate, experts and non-experts alike told of these or those places where temperatures had increased last year. At least a couple studies were referenced to show national targets to ebb climate change were not strong enough to, as it were, save the planet. A few leaders talked not so much of starvation and overheating as the psycho-sociological consequences of the scarcity that would follow.

Among the most notable speakers was Leonardo DiCaprio. DiCaprio has special standing in the climate change debate because he starred in a famous movie in which a boat collided with a severed portion of a huge ice mass. “After twenty-one years of debates and conferences,” he said, “it’s time to declare no more talks, no more ten-year studies, no more allowing the fossil fuel companies to manipulate and dictate the science and the policies that affect our future. This is the body that can do what is needed.”

Adjunct Cato Scholar Jason Scott Johnston was not present but disagreed, saying central planning for energy resources was as bad today as any centralized planning during the Soviet era. Johnston called attention to events the previous week, including the bankruptcy of Peabody Energy, the world’s largest privately-owned coal mining operation. Peabody followed Arch Coal, Alpha Natural Resources, Patriot Coal, and Walter Energy. Combined, the bankruptcies cost over 30,000 jobs.

The government is also ordering the shut-down of coal-fired electrical plants, retiring operations described as being capable of powering everything west of the Mississippi except Texas. Johnston recalled President Obama telling the San Francisco Chronicle in 2008, “So if somebody wants to build a coal fired plant they can. It’s just that it will bankrupt them.” Unelected, bureaucratic regulatory agencies have made the president’s vision reality with new rules limiting emissions of mercury, sulfur dioxide, nitrous oxide, carbon dioxide, and particulates.

The flip-side of Obama’s energy policy was to subsidize renewable sources of electricity. Subsidies of $13 billion in 2013 were nearly at the president’s stated goal of allocating $15 billion for wind and solar. The moral in Johnston’s story is, government can lead an industry to subsidy, but it can’t make it viable. Last week, in spite of an estimated $1.5 billion in corporate welfare, SunEdison, the world’s largest solar developer, entered into prebankruptcy negotiations.

Perhaps the largest federally-subsidized renewable producer in recent years to enter insolvency proceedings is Abengoa. The Spanish multinational received $2.5 billion in US subsidies for a power plant in Arizona. According to Johnston, “In any industry, some plants will not be as productive as expected, and some firms will fail. What the massive federal renewable subsidies have done is to accelerate the pace of and increase the cost of such failures in the renewable market.” US taxpayers financed failed, moonshot experiments for Google’s Ivanpah as well as Abengoa.

Johnston discussed a number of market distortions caused by energy subsidies. One could be the crowding out of superior technologies. Another might be the unsustainability of the subsidies, causing dependent green energy enterprises to go under when the plug is pulled. As for the triple bottom line, the environmental impact of renewable energy plants is not subject to the same level of scrutiny as traditional power plants public policy is attempting to phase out. Since in such matters political favoritism is outmuscling economic feasibility, Johnston foresees disruptions and cost increases from policy unchecked, “leading to a severe decline in US manufacturing.” Johnston’s warning is, “By aiming to replace the use of coal for power while mandating the use of renewables, Obama’s climate policy has surely destroyed coal, but it has impeded, rather than helped, investments to replace it.”

Also celebrating Earth Day by saying centralized, political control is no way to save the planet was fellow Cato Scholar Randal O’Toole. Born with an interest in good stewardship, he tells the story of progressives joining the environmental movement with the fall of the Soviet Union, when Americans had come to confess, “Government was a poor solution to most problems.”

Said O’Toole, “The Progressive goal was not environmental protection but government control. They believed they knew how every acre of land in the country should be managed, which forests should be cut, which crops should be planted on which farms, and how many urbanites should live in apartments instead of single-family homes.” But then, when economists in other sectors were reaching a consensus that incentives help solve problems, the climate change lobby went against the tide and, “demanded complete government control.”

Back to New York, Greenpeace’s director, Jennifer Morgan, warned, “The decisions in the Paris agreement now need to be incorporated into government and corporate decisions by breaking free from fossil fuels.” She agreed with UN Secretary-General Ban Ki-moon’s opening remark, “The world is in a race against time.”

One time element that had the eyes of the nations on the US was the standard withdrawal clause. Once a nation signed on, it would have to wait four years before it could opt out. While US Secretary of State John Kerry signed the treaty during the Earth Day ceremony, with his granddaughter in his arms to symbolize future generations; formal ratification by the world’s largest polluters is expected to occur later, but before Obama leaves office. Leaders of small island nations, like Fiji, Tuvalu, and Kiribati, expecting to be obliterated without corrective action, came to New York bearing fully ratified documents.

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