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Increased Efficiency - Caveat Emptor

Conventional wisdom holds that increasing home energy efficiency is the cheapest, fastest and cleanest way to fight climate change by reducing carbon dioxide emssions. Moreover, it saves the homeowners money. A classic win-win.

Not so fast… My local newspaper reported on a recent University of Chicago study “which used data from a random sample of 30,000 low-income Michigan households that were eligible for an Energy Department home weatherization program.” The study “found that the projected energy savings were 2.5 times greater than actual savings. As a result energy bills didn’t decline nearly enough to eventually pay for the initial cost of the upgrades.” A second study of middle-class homes in Wisconsin produced a similar result.

But at least the homes used somewhat less energy, which is a good thing - right? However, the researchers concluded that this program cost $329 for each ton of carbon dioxide saved, while the government estimates the social cost of a ton of CO2 is only $38.

I shouldn’t have been surprised by this. Why should programs which purport to aid the environment by increasing efficiency be exempt from the advertising shinangins that pervade our economic system? In fact, regardless of whether these two studies can be replicated elsewhere, shouldn’t we expect exaggerated claims from promoters who will profit from their implementation?

In this instance, the government is using tax-payer money to pay contractors to put in new windows, furnaces, appliances, etc. at reduced cost to the homeowner, but at almost ten times the expense of the actual carbon cost savings to our society. I’m sure those selling and installing the products in question aren’t complaining.

Those of us who watch television see inflated claims for an wide variety of products in commercials every day. The United States Supreme Court ruled in the 19th century that such advertising wasn’t lying, but “mere puffery,” and it is settled law that there is nothing illegal about it.

This is the busniss plan of those touting the green capitalist solution to global warming produced climate change. They will attempt to sell schemes to stimulate economic activity that they say will be environmentally beneficial. I’m not saying there are no honest contractors or non-profit organizations that are doing their best to make a positive difference. But within the context of our system, whenever there is money to be made, any field will tend to be dominated by those businesses that most aggressively find ways to increase profits and advertizing to gain market share. Green capitalism still means profit first, green second.

The green-conscious amongst may let down our guard because we want these programs to work. But it is advisable to follow the latin catch-phrase, in this instance, as in all others.

Caveat emptor, let the buyer beware.  Read More 
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Know Your Frienemies

I recently read Climate Shock: The Economic Consequences of a Hotter Planet by Gernot Wagner and Martin Weitzman. Although I disagree with the author’s conclusions, people who are strategizing about how to organize a mass movement to counter global warming and its resulting climate change will benefit from reading it.

Readers will understand my quarrel once they read the authors’ response to Naomi Klein’s This Changes Everything: “Far from posing a fundamental problem to capitalism, it’s capitalism with all its innovative and entrepreneurial powers that is our hope of steering clear of the looming climate shock.”

You read that right. Capitalism is the only solution to approaching climate crises. According to the authors the solution to global warming is to tax carbon emissions to cover their environmental costs. Their biggest fear, aside from the consequences of not imposing such a tax, is that if we continue with business as usual, as things heat up some nation will resort to dangerous geo-engineering, such as seeding the atmosphere with sulfur dioxide particles, which is fraught with peril.

So why read this book?

First, they are smart and well-connected. Wagner is the lead economist at the Environmental Defense Fund, and Weitzman is a Harvard economics professor. Their writing is engaging and clear. They make a good case for why global warming induced climate change is real and risks rendering our planet incompatible with civilization. Organizers will find these arguments helpful.

Second, these men will be the green experts the mainstream media finds most palatable and quotable. As the climate change policy battle intensifies, people like Wagner and Weitzman will be given air time on PBS, NPR and the major news networks (other than Fox). They will be featured in influential liberal journals. For example, The New York Review of Books just reviewed this book favorably. The reviewer was someone whose work the authors praise and thank in their acknowledgements. (Which may be an ethically questionable choice, perhaps reflecting the old boy network.) These authors and their colleagues are capable of mounting a robust public relations effort to promote their positions. Last week, a professor at Duke University’s Sanford school of Public Policy, who co-founded the Partnership for Responsible Growth, published a guest column in my local paper entitled “Capitalism can stop climate change” (Daily Hampshire Gazette, 6/24), which advocated the same concept to “[h]arness the power of the market and create a global, uniform price on carbon.”

Finally, the climate change movement must beware of friends like these. These authors take climate change seriously and as we build a broad-based campaign they might be included as allies. They are not climate change deniers, but they deny the necessity of changing our system and its underlying grow or die imperative.

They are frienemies; in the guise of saving us they will make things worse.  Read More 
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