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Energy

Happy Birthday, Global Warming: Climate Change at 33

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Monday, August 9, the IPCC (Intergovernmental Panel on Climate Change) will release its sixth assessment report to the public.   The IPCC says “the report will provide the latest assessment of scientific knowledge about the warming of the planet and projections for future warming, and assess its impacts on the climate system.”

In the lead up to this much anticipated report, analyst Rupert Darwall published an article outlining the history of global warming science and the associated political / environmental movement.   

From  Google Books: “Rupert Darwall is strategy consultant and policy analyst. He read economics and history at Cambridge University and subsequently worked in finance as an investment analyst and in corporate finance before becoming a special adviser to the Chancellor of the Exchequer. He has written extensively for publications on both sides of the Atlantic, including the Wall Street Journal, National Review, the Daily Telegraph and The Spectator and is the author of widely praised The Age of Global Warming: A History (2013).”

This article was originally published by RealClearEnergy.org

RealClearEnergy provides an extensive resource for those seeking to educate themselves on all aspects of energy policy and markets.  Click here for more information.

Please click here to read the original article

On June 23, 1988, NASA scientist James Hansen testified that the greenhouse effect had been detected. “Global Warming Has Begun,” The New York Times declared the next day. Indeed, it had. A year older than Alexander the Great when he died, climate change took less than one-third of a century to conquer the West.

Four days earlier, the Toronto G7 had agreed that global climate change required “priority attention.” Before the month was out, the Toronto climate conference declared that humanity was conducting an uncontrolled experiment “whose ultimate consequences could be second only to a global nuclear war.” In September, Margaret Thatcher gave her famous speech to the Royal Society, warning of a global heat trap. “We are told,” although she didn’t say by whom, “that a warming of one degree centigrade per decade would greatly exceed the capacity of our natural habitat to cope,” an estimate that turned out to be a wild exaggeration. Observed warming since then has been closer to one-tenth of one degree centigrade per decade. Two months later, the Intergovernmental Panel on Climate Change (IPCC) held its inaugural meeting in Geneva.

The tendency to catastrophism was present at the outset of global warming. The previous year, at a secretive meeting of scientists that included the IPCC’s first chair, it had been recognized that traditional cost-benefit analysis was inappropriate, on account of the “risk of major transformations of the world of future generations.” The logic of this argument requires that climate change be presented as potentially catastrophic—otherwise, the cure would appear worse than the putative disease.

Although catastrophism gave climate change emotive power, the most consistent feature of climate change is the failure of predictions of catastrophe to materialize. In 1990, Martin Parry, a future cochair of an IPCC working group, produced a report claiming that the world could suffer mass starvation and soaring food prices within 40 years. Yet the prevalence of undernourishment in developing countries has been on a downward trend since the 1970s and was nearly halved, from 23.3% in 1991 to 12.9% in 2015.

Although global warming conquered the West, it failed in the East. The model for international environmental cooperation was the 1987 Montreal Protocol on protecting the ozone layer. Its negotiation and ratification was led by the Reagan administration, which recognized that the U.S. would be the biggest beneficiary from having a strong treaty. Thanks to U.S. leadership, the negotiations were conducted quickly (in a matter of months) and the protocol has teeth, containing strong incentives for countries to join and the threat of trade sanctions for those that do not.

This path was quickly blocked for climate change. At the end of 1988, the Maltese government sponsored a resolution of the UN General Assembly on the conservation of the climate as mankind’s common heritage, the subtext being that rich countries shouldn’t negotiate a climate change treaty and then impose it on the rest of the world. The advantage of going down the UN route was that it led to the creation of a permanent and growing bureaucratic infrastructure with annual meetings to keep global warming’s place in public discourse. The downside is that negotiating texts must be agreed by consensus, foreclosing the possibility of a Montreal-like negotiating process and outcome. In 1990, the General Assembly adopted a resolution establishing the Intergovernmental Negotiating Committee for a Framework Convention on Climate Change, which produced a final text in time for the 1992 Rio Earth Summit.

The most important features of the 1992 climate convention are its ground plan, carving the world in two, with the developed North listed in Annex I, and the doctrine of “common but differentiated responsibilities” (the first principle listed in the convention and arguably its governing one). The bifurcation was made concrete in 1995 at the first conference of the parties in Berlin. Presided over by Angela Merkel as Germany’s environment minister, the Berlin Mandate stipulated that Annex I parties should strengthen their commitment to decarbonize on condition that non–Annex I parties did not, preparing the way for the Kyoto Protocol two years later.

The Clinton administration hadn’t given much thought to the implications of the Berlin Mandate. The Senate did. In July 1997, by 95 votes (including those of then-senators Biden and Kerry) to zero, it adopted the Byrd-Hagel resolution: America should not sign any protocol that imposed limits on Annex I parties unless it also imposed specific, time-tabled commitments on non–Annex I countries. Although the Clinton administration signed the Kyoto Protocol, the Senate had killed U.S. participation; it was left to the incoming president, George W. Bush, to garner the opprobrium for stating the obvious. Both he and Barack Obama pursued essentially the same post-Kyoto strategy of trying to get China and other major emerging economies to make treaty commitments to decarbonization, an attempt that failed at the 2009 Copenhagen climate conference, when China, India, South Africa, and Brazil vetoed a new climate treaty.

In picking up the pieces, Todd Stern, President Obama’s climate negotiator, had the twin objectives of crafting something that China would accept but that didn’t require the Senate’s advice and consent. The outcome was the Paris climate agreement. It embodies the climate equivalent of Mikhail Gorbachev’s Sinatra Doctrine of allowing individual parties to the agreement to “do it their way.” Hailed as a game changer in the fight to save the planet, the reality of Paris was rather different. Just as Gorbachev’s Sinatra Doctrine was an admission that the Soviet Union had lost the Cold War, the Paris agreement signaled that the West had given up on having a global decarbonization regime, with credible sanctions against free riding.

Although the Obama administration played an essential role in its gestation, the U.S. is the biggest loser from the Paris agreement. America is to forfeit its recently won position as the world’s largest producer of hydrocarbon energy. For what?

The story of carbon dioxide emissions is acceleration in the declining share of Western emissions. The year 1981 was the last one in which the West’s energy and cement manufacture carbon dioxide emissions were greater than the rest of the world’s (the latter includes Japan—culturally non-Western, ambivalent about climate change, and the only nation to have hosted a major climate conference presided over by a foreign national). By 1988, despite the economic expansion of the 1980s, the West’s emissions had grown by only 3.8%, while the rest of the world’s had grown by 27.0%.

After 2002, non-Western emissions grew even faster. In the 12 years before 2002, non-Western emissions grew by 21.2%; and in the subsequent 12 years, by 76.8%. By 2014, with Western emissions broadly flat over the 24-year period, Western emissions had shrunk to 26% of the total, and the share of non-Western emissions had risen to 74%. In less than a decade and a half, the increase in non-Western emissions outstripped the combined total of U.S. and E.U. emissions. In terms of affecting the physics of global warming, it doesn’t really matter what the West does any more.

William Nordhaus, the world’s preeminent climate economist, offers a brutal assessment of climate policy. “After 30 years, international policy is at a dead end,” he said in a little-noticed October 2020 presentation to the European Central Bank. “We have policies, but they have not been effective, and they’re getting us basically nowhere.” The culprit, in Nordhaus’s view? The free-rider problem. Nordhaus’s solution is to replace the current structure with a “club” whose members agree on a uniform price for carbon dioxide (he suggests $50 per ton of CO2) plus a straight 3% penalty tariff on imports from non-club members. What Nordhaus proposes, in essence, is the Montreal Protocol structure adapted for climate change.

Joe Biden campaigned to restore U.S. climate leadership and rejoin the Paris agreement. The two are contradictory. Following the Europeans down the dead end of a three-decade-old UN process hardly constitutes leadership. Heeding Nordhaus’s advice and abandoning the UN process is something that only an American president can do. But that would be to assume that the purpose of the UN is to moderate global warming.

Days before the Paris conference, Maurice Strong died. A committed environmentalist, no person did more to put environmentalism on the international agenda, leading the 1972 Stockholm UN conference on the environment and the Rio Earth summit 20 years later. A small gathering was held at the Paris conference to share reminiscences about Strong and his achievements. One of his aides at the Stockholm conference recalled asking him what the policy of the conference should be. “The process is the policy,” Strong replied.

Strong’s genius was to understand that a self-perpetuating UN process would continuously accrete money, influence, and, above all, power. Environmentalism would not have become the dominant ideology in the West without the deployment of the UN’s climate apparatus: the annual cycle of climate conferences spliced periodically with ones that are going to save the planet (Kyoto in 1997; Bali in 2007; Copenhagen in 2009; Paris in 2015; and Glasgow in 2021). Then there’s the IPCC, set up by the UN Environment Programme and the World Meteorological Organization, and its five—soon to be six—generations of assessment reports.

“Embedded in the goal of limiting warming to 1.5 degrees Celcius is the opportunity for intentional societal transformation,” the IPCC says in its scientific assessment of the 1.5°C target. All ideologies seek power. Seen in this light, global warming gave environmentalism the means for it to conquer the West and become the dominant ideology of our age. Environmentalism’s attitude toward nuclear power provides a test for this proposition. If the paramount concern of environmentalists had been to reduce emissions of carbon dioxide and slow down climate change, they would campaign to keep existing nuclear power stations and build new ones. Yet viable nuclear power stations are being prematurely closed in California, New York, Germany, and Belgium. Why?

Nuclear power is a Promethean crime of humanity stealing the deepest secrets of nature to release unlimited quantities of energy, in the eyes of environmentalists—a crime far worse than global warming. Instead, humanity must live within the rhythms and constraints decreed by nature; hence environmentalists’ belief that power stations should be replaced by inefficient, weather-dependent wind and solar farms.

The growth of wind and solar generation is not a market-driven phenomenon of a superior technology displacing an obsolete one. It’s what happens when governments heavily subsidize zero-marginal cost output, flooding wholesale markets with unwanted electricity when there’s too much sun and wind and risking power failures when there’s too little. The ubiquity of wind and solar symbolizes environmentalism reversing the logic of the Industrial Revolution in transforming predominantly agrarian societies at the mercy of climate to weather-resistant ones and helps explain the contrasting fortunes of environmentalism and Marxism. Environmentalism succeeded in the West and has become part of the political mainstream, to the extent that it defines politically acceptable opinion. Marxism lost in the West but thrived in preindustrial societies, because the political priority remains economic development. In practical terms, this is synonymous with industrialization and carbonizing their economies.

The outcome has been to shift the balance of climate power from the West to the rest of the world and the major emerging economies, in particular. Yet the lopsided arithmetic of the West versus the rest’s emissions has not softened the effectiveness of global warming as an ideological weapon because it is not based on any rational calculus but derives from its threat of planetary catastrophe. The future, as it had been in Marxism, again becomes “the great category of blackmail,” as the French philosopher Pascal Bruckner writes in “The Fanaticism of the Apocalypse.”

Climate change does represent an existential threat to Western civilization, although not in the way environmentalists say. Net-zero climate policies threaten to undermine the internal cohesiveness of Western societies and drain them of economic vitality. Externally, they will accelerate the redistribution of power away from the West to those nations that decide not to decarbonize, especially to China. Decarbonization will see the progressive elimination of high-paying, high-productivity blue-collar employment such as coal mining, oil and gas, steelmaking, and energy-intensive manufacturing. The aristocracy of labor will become an extinct social class; instead, as social mobility stagnates and class stratifications solidify, social geographer Joel Kotkin foresees the coming of neo-feudalism.

Accompanying these regressive social developments is the atrophying of democratic politics. Net-zero climate policies require reorganizing society around the principle of decarbonization—not through a couple of election cycles but over the next three decades. Net-zero must therefore be put beyond the reach of democratic politics so that voters cannot reverse a decision that was taken for them. This provides a better fit for a post-democratic polity such as the European Union. Britain has a statutory climate change committee to hold the government to account for meeting decarbonization targets.

Although the Biden administration has adopted a target of net-zero by 2050 and of halving greenhouse gas emissions by 2030, Congress has not passed—and is unlikely to pass—climate legislation mandating these targets. Nonetheless, American corporations in droves are pledging their own net-zero targets. Wall Street and ESG (environmental, social, and governance) investing and climate disclosures, which the SEC intends to mandate, have opened an alternative route on the basis of what gets measured gets managed.

Larry Fink, CEO of BlackRock, the world’s largest asset manager, candidly admits that forcing companies to disclose their emissions isn’t transparency for transparency’s sake: “disclosure should be a means to achieving a more sustainable and inclusive capitalism.” This collusion between the administrative state and climate activists to bypass Congress has been condemned by Republicans on the Senate Banking Committee. “Activists with no fiduciary duty to the company or its shareholders are trying to impose their progressive political views on publicly traded companies, and the country at large, having failed to enact change via the elected government,” Senator Toomey and his colleagues wrote in a letter to SEC chair Gary Gensler earlier this month.

In addition to this usurpation of the political prerogatives of democratic government, forcing business to take on governmental functions to address societal problems will see them, over time, acquire the modes and culture of government bureaucracies. This subtracts from the core economic function of the business corporation in a capitalist economy. “The capitalist economy,” in the words of the growth economist William Baumol, “can usefully be viewed as a machine whose primary product is economic growth.” What distinguishes it most sharply from all other economic systems are free-market pressures that force firms to engage in a continuous, competitive process of innovation. “This does not happen fortuitously,” writes Baumol, “but occurs when the structure of payoffs in an economy is such as to make unproductive activities such as rent-seeking (or worse) more profitable than activities that are productive.”

If CEO remuneration is aligned with ESG objectives and decarbonization targets and if directors risk being voted off boards for not having them, businesses will increasingly focus their efforts on meeting these non-business objectives. As this incurs costs and impairs business performance, businesses will turn to politicians to seek protection from their antisocial competitors that refrain from doing the government’s work. Capitalism’s legitimacy rests on its record of raising living standards through its prodigious capacity to generate productive wealth. Should that slow down to a trickle, capitalism becomes hard to justify, even though the explanation is that the system is no longer a capitalistic, free-market one.

Global warming flourished during a period when the world had taken a holiday from geopolitics. It had entered the world as geopolitical tensions were easing. Six months earlier, in December 1987, Ronald Reagan and Mikhail Gorbachev signed the INF treaty, eliminating intermediate nuclear missiles. By the time of the Rio Earth Summit, the Soviet Union was gone. Geopolitics is now back. There is a broad consensus in Washington that President Xi’s China is a strategic rival to the U.S. Yet the new strategic realism ceases when it comes to climate change.

According to the IPCC, net-zero requires “transformative systemic change” that involves “unprecedented policy and geopolitical challenges.” The International Energy Agency calls decarbonizing the energy sector “perhaps the greatest challenge humankind has faced.” The West embarking on this process when China does not is akin to signing a strategic arms-control treaty binding on only one side: it can only be to China’s strategic advantage. So far, the grip of environmentalism on Western policymakers lulls them into the belief that global warming operates in a strategic vacuum, insulated from the factors that constitute geopolitical weight and ambition. It is in that sense that climate change constitutes an existential threat to the West.

Rupert Darwall is a senior fellow of the RealClear Foundation and author of Capitalism, Socialism and ESG.

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After 15 years as a TV reporter with Global and CBC and as news director of RDTV in Red Deer, Duane set out on his own 2008 as a visual storyteller. During this period, he became fascinated with a burgeoning online world and how it could better serve local communities. This fascination led to Todayville, launched in 2016.

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Energy

What does a Trump presidency means for Canadian energy?

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From Resource Works

Heather-Exner Pirot of the Business Council of Canada and the Macdonald-Laurier Institute spoke with Resource Works about the transition to Donald Trump’s energy policy, hopes for Keystone XL’s revival, EVs, and more. 

Do you think it is accurate to say that Trump’s energy policy will be the complete opposite of Joe Biden’s? Or will it be more nuanced than that?

It’s more nuanced than that. US oil and gas production did grow under Biden, as it did under Obama. It’s actually at record levels right now. The US is producing the most oil and gas per day that any nation has ever produced in the history of the world.

That said, the federal government in the US has imposed relatively little control over production. In the absence of restrictive emissions and climate policies that we have in Canada, most of the oil production decisions have been made based on market forces. With prices where they’re at currently, there’s not a lot of shareholder appetite to grow that significantly.

The few areas you can expect change: leasing more federal lands and off shore areas for oil and gas development; rescinding the pause in LNG export permits; eliminating the new methane fee; and removing Biden’s ambitious vehicle fuel efficiency standards, which would subsequently maintain gas demand.

I would say on nuclear energy, there won’t be a reversal, as that file has earned bipartisan support. If anything, a Trump Admin would push regulators to approve SMRs models and projects faster. They want more of all kinds of energy.

Is Keystone XL a dead letter, or is there enough planning and infrastructure still in-place to restart that project?

I haven’t heard any appetite in the private sector to restart that in the short term. I know Alberta is pushing it. I do think it makes sense for North American energy security – energy dominance, as the Trump Admin calls – and I believe there is a market for more Canadian oil in the USA; it makes economic sense. But it’s still looked at as too politically risky for investors.

To have it move forward I think you would need some government support to derisk it. A TMX model, even. And clear evidence of social license and bipartisan support so it can survive the next election on both sides of the border.

Frankly, Northern Gateway is the better project for Canada to restart, under a Conservative government.

Keystone XL was cancelled by Biden prior to the invasion of Ukraine in 2022. Do you think that the reshoring/friendshoring of the energy supply is a far bigger priority now?

It absolutely is a bigger priority. But it’s also a smaller threat. You need to appreciate that North America has become much more energy independent and secure than it has ever been. Both US and Canada are producing at record levels. Combined, we now produce more than the Middle East (41 million boe/d vs 38 million boe/d). And Canada has taken a growing share of US imports (now 60%) even as their import levels have declined.

But there are two risks on the horizon: the first is that oil is a non renewable resource and the US is expected to reach a peak in shale oil production in the next few years. No one wants to go back to the days when OPEC + had dominant market power. I think there will be a lot of demand for Canadian oil to fill the gap left by any decline in US oil production. And Norway’s production is expected to peak imminently as well.

The second is the need from our allies for LNG. Europe is still dependent on Russia for natural gas, energy demand is growing in Asia, and high industrial energy costs are weighing on both. More and cheaper LNG from North America is highly important for the energy security of our allies, and thus the western alliance as it faces a challenge from Russia, China and Iran.

Canada has little choice but to follow the US lead on many issues such as EVs and tariffs on China. Regarding energy policy, does Canada’s relative strength in the oil and gas sector give it a stronger hand when it comes to having an independent energy policy?

I don’t think we want an independent energy policy. I would argue we both benefit from alignment and interdependence. And we’ve built up that interdependence on the infrastructure side over decades: pipelines, refineries, transmission, everything.

That interdependence gives us a stronger hand in other areas of the economy. Any tariffs on Canadian energy would absolutely not be in American’s interests in terms of their energy dominance agenda. Trump wants to drop energy costs, not hike them.

I think we can leverage tariff exemptions in energy to other sectors, such as manufacturing, which is more vulnerable. But you have to make the case for why that makes sense for US, not just Canada. And that’s because we need as much industrial capacity in the west as we can muster to counter China and Russia. America First is fine, but this is not the time for America Alone.

Do you see provinces like Alberta and Saskatchewan being more on-side with the US than the federal government when it comes to energy?

Of course. The North American capital that is threatening their economic interests is not Washington DC; it’s Ottawa.

I think you are seeing some recognition – much belated and fast on the heels of an emissions cap that could shut in over 2 million boe of production! – that what makes Canada important to the United States and in the world is our oil and gas and uranium and critical minerals and agricultural products.

We’ve spent almost a decade constraining those sectors. There is no doubt a Trump Admin will be complicated, but at the very least it’s clarified how important those sectors are to our soft and hard power.

It’s not too late for Canada to flex its muscles on the world stage and use its resources to advance our national interests, and our allies’ interests. In fact, it’s absolutely critical that we do so.

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Energy

What Will Be the Future of the Keystone XL Pipeline Under President Trump?

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From EnergyNow.ca

By Terry Winnitoy, EnergyNow

The Keystone XL Pipeline, proposed in 2008, was designed to transport Canadian crude oil from Alberta to refineries in the United States, specifically to Steele City, Nebraska, and onward to refineries in Illinois and Texas, as well as to an oil pipeline distribution center in Cushing, Oklahoma.

Spanning approximately 1,179 miles and designed to transport up to 830,000 barrels of oil per day, the pipeline promised significant economic and energy security benefits. However, it became a focal point of political and environmental controversy, leading to its eventual cancellation by Presidents Obama and Biden.

Here’s a brief look at its history, the reasons it should have been built, the political dynamics that led to its cancellation and will President-elect Trump revive it?

Why the Keystone XL Pipeline Should Have Been Built

Economic and Job Creation

The pipeline was projected to create thousands of construction jobs and several hundred permanent jobs, providing a significant boost to the economy. It was also expected to stimulate economic activity through the development of related infrastructure and services.

Energy Security

By facilitating the efficient transport of a large volume of oil from a stable and friendly neighboring country, the pipeline would have reduced American dependence on oil imports from more volatile regions, enhancing national energy security.

Environmental Safety

Pipelines are generally safer and more environmentally friendly for transporting oil compared to rail or truck, with lower risks of spills and accidents. The Keystone XL was designed with the latest technology to minimize leaks and environmental impact.

Regulatory Oversight

The project underwent extensive environmental reviews and was subject to strict regulatory standards to ensure it adhered to environmental protection and safety measures.

Political Reasons for Cancellation

Environmental Activism

The pipeline became a symbol for environmentalists who opposed further development of fossil fuel infrastructure. They argued it would contribute to climate change by enabling the extraction and consumption of oil sands, which are more carbon-intensive than other oil sources.

Obama’s Cancellation

President Obama rejected the pipeline in 2015, citing environmental concerns and its potential impact on global climate change. He argued that approving the pipeline would have undercut America’s leadership on climate change.

Trump’s Reversal and Biden’s Final Cancellation

President Trump revived the project in 2017, citing economic benefits and energy security. However, President Biden canceled it again on his first day in office in 2021, fulfilling a campaign promise to prioritize climate change issues and transition towards renewable energy.

Political Symbolism

For both Obama and Biden, the decision to cancel the Keystone XL Pipeline was also a symbolic gesture, demonstrating a commitment to environmental sustainability and a shift away from fossil fuel dependence in line with their administrations’ climate policies.

Will President-Elect Trump Reinstate It?

Currently, there is no definitive answer on whether President-elect Trump will reinstate the Keystone XL Pipeline. His previous administration showed support for the project, citing its potential economic and energy security benefits. However, reinstating the pipeline would require navigating significant political, legal, and environmental challenges that have developed over the years.

It would also depend on the current geopolitical, economic, and environmental priorities at the time of his taking office. The Keystone XL Pipeline’s history is a complex tapestry of economic aspirations, environmental concerns, and political maneuvers.

Its cancellation has been a contentious issue, reflecting the broader national and global debates over energy policy and climate change strategy. Whether it will be reinstated remains a significant question, contingent on a multitude of factors including political will, environmental policies, and market dynamics.

That all said, re-instating its approval might be the perfect “in your face” moment for Trump to Obama and Biden as he begins his second term of presidency. We’ll have to wait and see.

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