[The below was submitted as a comment on an earlier post, and seems well worth highlighting. It is an insider's view on the Regional Greenhouse Gas Initiative (RGGI) of 10 northeastern states. The idea that speculators could enter the market to drive up the value of the permits is very intriguing. RP]

Overall I agree with Roger’s ultimate conclusion but I want to add some additional information. I was involved in the RGGI process since the beginning so I want to clear up a misconception about the current cap and I want to give my impression of the RGGI auction before the first one is held on September 25.

I do not think RGGI cap was set to reduce emissions because that wasn’t the primary purpose of RGGI. At the start of the RGGI process there was a tacit understanding amongst the participants that the real goal of RGGI was to develop the framework for a CO2 cap and trade program that could be used as a model for a national program. After all, the unstated reality is that it could never hope to actually have any impact on global warming. Anyone is welcome to debate that point but a 188 million ton cap and a 19 million ton reduction is certainly noise on the global level.

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I recently came across an interesting article by Jeffrey St.Clair published in February 2007. St.Clair is a progressive journalist/activist and is an outspoken critic of the effectiveness of environmental NGOs:

A kind of political narcolepsy has settled over the American environmental movement. Call it eco-ennui. You may know the feeling: restlessness, lack of direction, evaporating budgets, diminished expectations, a simmering discontent. The affliction appears acute, possibly systemic…

…this much is clear: the vigor of the environmental movement has been dissipated, drained by the enforced congeniality displayed in our disputes with Clinton and Bush, the Democrats in congress, and the grim, green-suited legions of the Forest Service and the Bureau of Land Management. Despite the rampages of the Bush administration, the big green groups can’t even rouse themselves into much more than the most reflexive kind of hysteria, fundraising letters printed in bold type…

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A lot of our work here focuses on the connections between expertise and decision making. Richard Posner of the University of Chicago suggests that the experts are at fault, by creating products and processes that decision makers failed to use correctly:

I do not think that the government does bear much responsibility for the crisis. I fear that the responsibility falls almost entirely on the private sector. The people running financial institutions, along with financial analysts, academics, and other knowledgeable insiders, believed incorrectly (or accepted the beliefs of others) that by means of highly complex financial instruments they could greatly reduce the risk of borrowing and by doing so increase leverage (the ratio of debt to equity). Leverage enables greatly increased profits in a rising market, especially when interest rates are low, as they were in the early 2000s as a result of a global surplus of capital. The mistake was to think that if the market for housing and other assets weakened (not that that was expected to happen), the lenders would be adequately protected against the downside of the risk that their heavy borrowing had created. The crisis erupted when, because of the complexity of the financial instruments that were supposed to limit risk, the financial industry could not determine how much risk it was facing and creditors panicked.

I disagree with Posner’s assertion that the government bears little responsibility. Accurate assessments of risk are central to the functioning of the financial system, and if expertise gets out ahead of ability to effectively use that expertise, then we can find our selves in a situation where risk turns into ignorance. This was the lesson of Long-Term Capital Management and appears to be the lesson in the current crisis. When all is said and done, I would expect that a hard look will need to be taken at the ratings agencies and their role in providing judgments of investment risk. It is governments job to ensure that these agencies are doing their job. Such regulatory oversight appears to have been lacking.

Europe has long been a leader on climate change, and recent actions suggest that Europe is now leading the world to a future where coal is at the center of energy supply. The UK Labor party has come out strongly in favor of coal, as reported in The Guardian today:

Britain needs to undergo a “renaissance in nuclear power”, and coal will continue to be a “critically important fuel” for the country, the business secretary, John Hutton, said today.

In an outspoken speech, designed to put pressure on the Tories as they outline restrictions on coal-fired power stations, Hutton said that the two controversial sources of energy are crucial to ensure Britain retains a secure supply of energy.

Hutton said the international battle for energy security poses a threat to Britain’s competitiveness and its “sovereignty as a nation”.

In his speech to the Labour conference in Manchester, he added: “It means a renaissance in nuclear power. Low carbon, reliable, secure… And because energy security is a first thought, not an afterthought, I will not turn my back on another critical source of energy security for the UK: coal.”

The business secretary said he understood that people felt passionate about coal. But he took a swipe at David Cameron, who has said he will ensure that a new generation of “unabated coal power plants” cannot be built by imposing a California-style emissions performance standard.

Hutton said: “I understand that people feel passionate about this issue. Others, like the Tories, see an opportunity for pandering. But coal is critically important for the UK. Flexible. Available. Reducing our reliance on imported gas.”

Meanwhile, McKinsey & Co. came out with a report today with an optimistic view on the economics of carbon capture and storage (full report here in PDF), which was favorably received by the European energy commissioner:

Speaking at the launch of the report, Andris Piebalgs, the European commissioner for energy, called CCS the single technology that could do most to meet climate-change goals while addressing Europe’s energy-security concerns. CCS is “essential to move rapidly to economically viable, near-free carbon electricity generation”, he said.

However for CCS to work will require considerable investments in prototypes, deployment, and innovation. With Europe gambling on carbon-free coal, technological advances in CCS are no longer optional for achieving aggressive goals for stabilizing carbon dioxide levels, they are a necessity.

In Saturday’s New York Times, Thomas Homer-Dixon and David Keith had an op-ed on geoengineering. which had this interesting passage:

Navigating the worst could involve what scientists call geo-engineering — the intentional modification of the earth’s climate. Unfortunately, although specialist circles and blogs are alive with heated conversations about geo-engineering, the idea is so taboo that governments have provided virtually no research money. Most of these conversations focus on the idea of injecting sulfate particles into the stratosphere to screen out the sun’s radiation, as happens when volcanoes erupt. Also, most of the limited scientific research on geo-engineering has aimed to show why sulfate injections won’t work — like why they might damage the ozone layer or produce too much cooling and drying in places where we don’t want these changes.

Yes, it’s vital to have this “red team” of skeptics questioning geo-engineering. But we need more emphasis on a “blue team” to figure out what geo-engineering approaches might work, because we might need to move fast.

Why, we might ask, is it necessary to have such “red” and “blue” teams? Why can’t we just call people names — “Strangelovian Earth Destroyers” or “Neo-Con Earth Controllers” — and put them into nice neat political camps, so we don’t have to listen to their arguments? It worked against the adaptation advocates, and also those folks suggesting we need new technological innovation. Why not here? After all such debates can only get in the way of the obvious, desirable outcome, can’t they?

Red team and blue team. How silly.

Wired Science followed up on the candidates’ responses to ScienceDebate 2008 by asking the campaigns for the names of their science advisers (I know it’s the Wired Science blog, but would it have killed them to ask for technology advisors as well?).  The McCain campaign hasn’t responded yet, but the Obama campaign has.  The names and affiliations of the five people the Obama campaign identified are:

Harold Varmus, a major player behind the Public Library of Science, former head of the National Institutes of Health, Nobel Prize winner, and currently President of the Memorial Sloan-Kettering Cancer Center.

Gilbert Omenn, professor at the University of Michigan (internal medicine/genetics/public health), on the Board of Directors of Amgen, former AAAS president.

Peter Agre, director of the Johns Hopkins Malaria Research Institute, major player in Scientists and Engineers for America, Nobel Prize winner, and lousy science policy communicator, as his 2006 appearance on The Colbert Report suggests.

Don Lamb, University of Chicago astrophysicist, involved with the Sloan Digital Sky Survey, and a Mission Scientist on a NASA satellite, the high-energy transient explorer.

Sharon Long, Stanford University agricultural researcher (and former dean of Stanford’s School of Humanities and Science), former member of the Monsanto Board of Directors.

There’s more information on each of these individuals in the Wired Science article.  It’s important – critical – to read no more into these names than is currently out there.  There is no reason to believe that these individuals will automatically be appointed to particular science and technology positions in a potential Obama Administration.  Let me give a few reasons why:

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Yesterday’s New York Times had an article on the upcoming carbon dioxide auction of the Regional Greenhouse Gas Initiative (RGGI) of 10 northeastern U.S. states participating in this new cap and trade program (h/t Adam Zemel at the BT blog). The evolving performance of RGGI should add weight to the argument that cap and trade is simply not up to the challenge of reducing greenhouse gas emissions. Here is an excerpt from the NYT article:

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The BBC reports today that the United Kingdom may be on the verge of a major mismatch between energy supply and demand:

The UK will experience prolonged power cuts in about five years unless urgent action is taken now, a report warns.

It said a third of generation capacity was due to be decommissioned by 2020, but was not being replaced fast enough.

The report, by nuclear supporting Fells Associates, said new reactors would not be ready in time, and questioned spending on renewable energy.

Energy Secretary John Hutton said the report overstated the risks and that the issue was a national priority.

The report being referenced can be found online here in PDF. Here is how the executive summary begins:

Security of energy supply must now be seen as taking priority over everything else, even climate change. UK imports of both gas and oil are accelerating, just as the fragility of supplies from Russia and the Middle East becomes more apparent and the UK heads towards the loss of one third of its generating capacity over the next 12 years. A new energy policy must be scheduled to meet the impending energy gap with an overarching long-term vision that will ensure security of supply, protect the environment, and at the same time, be deemed feasible by the engineers, financiers and utility managers who will have to implement it.

The choices facing the UK involve a host of trade offs — Continue to depend upon coal? Rely to a greater extent on continental gas? Or repeat the troubles of South Africa? The Fells Associates report lays out a few other options, not of which are particularly palatable to some vested interest.

How energy policy plays out in the UK is well worth watching, particularly for those of us in the US.

As mentioned in my last post on this subject, the McCain campaign did indeed answer the 14 questions from ScienceDebate 2008.  My views on the effort have been aired here before (and have not changed), so I will dispense with repeating those criticisms and focus on the answers the candidates have provided (though I will ask for what, exactly, are they shaking people down for donations – it’s not explained at all, which leaves a bad taste in my mouth and suggests the project is being hijacked by other, perhaps less successful, advocacy groups).  You can read the candidate responses responses side by side, see Senator McCain’s from the link above, or read only Senator Obama’s responses.

Your reaction to the answers from the candidates will no doubt be influenced by your particular political leanings, and whether or not you consider responses to questionnaires like this one (just one of many) to be substantive policy statements or small one-acts of political theater.  Those who have read the candidates’ websites or heard their campaign surrogates will see much from there repeated in their answers.

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The Energy and Climate Challenge: Have We Underestimated the Size of the Challenge?

September 16, 2008 7:00 PM – 9:00 PM
CU-Boulder, Humanities Rm 1B50
Location and Directions
Free and Open to the Public
View Flyer

ABSTRACT: In April of this year, panelists Roger Pielke, Jr. and Tom Wigley, along with Chris Green, published a paper in the journal Nature arguing that the Intergovernmental Panel on Climate Change (IPCC) underestimated the technical challenge of responding to climate change. This forum will present the arguments from this paper and discuss their potential implications for the energy and climate policies of the next president, regardless of who is elected.

PANELISTS INCLUDE:

* Roger Pielke, Jr., CIRES Center for Science and Technology Policy Research
* Tom Wigley, National Center for Atmospheric Research
* Frank Laird, Graduate School of International Studies, University of Denver

Moderator: Carl Koval, CU Renewable and Sustainable Energy Initiative

This event is part of a semester-long lecture and panel series focused on how to meet rising energy demand while simultaneously bringing GHG emissions under control. It is intended to foster discussion and debate about these issues to coincide with the 2008 presidential campaign.