I have actually read the President's speech yesterday on climate change, and I wish I could figure out what his thought process is, or even if there is a thought process. This speech only makes sense if the whole idea is to grow the government while in the process making Americans poorer -- a lot poorer. That couldn't possibly be his game plan, could it? If somebody can offer me an alternative explanation, I'm willing to consider it. But yes, I think that that is his game plan; or, at least, his game plan is definitely to grow the government, and if that means that Americans must be made poorer, well, he doesn't know anything about that and anyway, too bad.
I start from the proposition that private actors, without any prompting from the government or any subsidies, will provide energy sufficient to satisfy all demand, and that the type of energy provided will be the cheapest for each intended use. And that process, again without government intervention, will maximize the income and wealth of the American people. Government, of course, can try to force the production of other types of energy for each use, which can be accomplished by rules or subsidies of various sorts. Sometimes there may be good reasons for doing this, such as serious health reasons; but by definition there will be a cost, which will come out of the income and wealth of the people. Given the huge size of the energy markets, the cost of government efforts to switch vast areas of the economy from cheaper to more expensive energy can be in the trillions of dollars over time, meaning that the people have been impoverished by that amount.
Now you may say, there absolutely is reason for mankind to control carbon emissions into the atmosphere, because carbon emissions are causing catastrophic global warming that is an existential threat to mankind. If you read this blog, you know I think that's nonsense, and that there is no evidence of any kind for it. But for these purposes it doesn't matter, and I won't address that subject in this post. It doesn't matter because Obama is not in this speech proposing to lead some global initiative to get world carbon emissions under control, or otherwise to engineer world temperatures. (Not that he could do that if he tried.) What he's proposing, short on specifics but clear enough in generalities, is immediately to hobble American use of coal, particularly for production of electricity, and gradually to hobble American use of other carbon-based energy such as oil and natural gas.
As of now, coal accounts for about 40% of electricity production in the U.S. This is not a small item. Clearly the utilities are using coal because it is the cheapest thing available to produce the electricity at this time and at these plants; so any change, even to natural gas, will by definition have a not small cost.
But the real question is, even assuming that you buy into the catastrophic global warming narrative, how does shutting down coal or carbon-based energy use in the U.S. accomplish anything? The U.S. is less than 5% of world population. Its carbon emissions have been dropping in recent years (largely because of the natural gas "fracking" boom). Meanwhile, third world carbon emissions have been booming. They will continue to boom, no matter what penalties Mr. Obama imposes on the American people for their sins of carbon usage.
Over at National Review Online on Monday, Robert Bryce of the Manhattan Institute compiles lots of useful data. Much of the data he relies on comes from the Statistical Review of World Energy 2013, compiled by BP. For example, consider this: just the increase in coal production and consumption in China from 2002 to 2012 is about twice total annual U.S. coal production and consumption. The increase in world production and consumption of coal from 2002 to 2012 is almost triple annual U.S. production or consumption. And this rapid increase of coal production and consumption, particularly outside the U.S. and Europe, is clearly going to continue. These people and not going to do without electricity and keep their coal in the ground. So suppose you could take U.S. production and consumption of coal to zero. You would accomplish nothing.
And it actually gets worse. While Obama talked in vagueness and platitudes, it is clear that the initiatives he spoke about involved primarily restrictions on power production and consumption within the U.S. But do you know that the U.S. is a huge exporter of coal -- mostly, of course, to China? Yes, it turns out that the resourceful U.S. coal mining industry, facing increasing restriction on coal use from the EPA (let along competition from fracked natural gas) has been shipping off rapidly increasing quantities of the stuff. According to Bryce:
In March, the U.S. set a record for coal exports in a month, 13.6 million tons. Indeed, on the same day that [White House energy advisor] Zichal was talking about Obama’s legacy on climate issues, the Energy Information Administration released a report showing that U.S. coal exports are likely to set another record this year, after setting a record of nearly 126 million tons in 2012. The EIA pointed to increased Asian demand as a major reason for the rise in U.S. coal exports.
Now there is nothing in Obama's speech about potential restrictions on coal exports, and I can't imagine he would go there, because he would be putting thousands of people out of jobs in critical swing states like West Virginia, Virginia and Pennsylvania. So therefore, Americans will be forced to buy more expensive energy while the American coal will be mined in increasing amounts, sent off to China, and burned there, leaving the exact same amount of carbon in the air as if we had burned it here.
So is there any possible logic by which this all makes sense? Why yes: the war on coal gives the government an enormous opportunity to grow and seize power. Lots of need for new regulations to make coal difficult or impossible to use. Lots of need for inspectors and enforcers to be sure the regulations are being followed. Lots of need for subsidies to expensive wind or solar power, providing endless opportunities for corrupt crony capitalists to make "political contributions" (pay-offs) to politicians to draw the subsidies their way. Lots of opportunities to buy the loyalty of the corrupt crony capitalists with government handouts subject to periodic review and renewal. Yes, if your primary goal was to grow the government, it makes perfect sense. And if at the same time it means that the American people are to be made poorer because they must pay double or triple for the same amount of usable energy, well, we don't know anything about that and anyway, too bad.