(Note: This column is adapted from a forthcoming article, co-authored with former Virgiania Governor George F. Allen, in the University of Richmond Law Review.)  

December 28, 2009 was the final day to submit comments on the Environmental Protection Agency’s (EPA’s) proposed Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule.  This is the rulemaking in which EPA proposes to “tailor” the Clean Air Act’s (CAA or Act’s) Prevention of Significant Deterioration (PSD) pre-construction permitting program and Title V operating permits program so that they can be applied to carbon dioxide (CO2) and other greenhouse gases (GHGs) without spawning an economically-chilling administrative morass.

The Tailoring Rule is an eye opener, because it reveals, or rather confirms in spades, that the Supreme Court’s decision in Massachusetts v. EPA has created an almost bottomless well of “absurd results” — disastrous consequences that EPA can avoid only by poaching legislative power and amending the Act.…

A recent NYT article discussed a proposal by economist Ross McKitrick to tie CO2 taxes to global temperature increases. McKitrick’s overall aim is to offer a compromise that, he argues, should satisfy those who think the government needs to take drastic action and those who think carbon emissions pose no serious long-term threat. Although McKitrick’s idea is clever, it has theoretical difficulties and (in my opinion) would certainly not work in practice.

McKitrick’s Proposal to Tie CO2 Taxes to Temperature

The NYT story does a good job summarizing the idea:

[McKitrick] suggests imposing financial penalties on carbon emissions that would be set according to the temperature in the earth’s atmosphere. The penalties could start off small enough to be politically palatable to skeptical voters.

If the skeptics are right and the earth isn’t warming, then the penalties for burning carbon would stay small or maybe even disappear.

[Editor note: A previous iteration of this post was published on January 14th. Given the inaction of the Obama Administration on offshore drilling in the last year, part of a pervasive strategy to discourage carbon-based energy production and usage, this post, this question needs to be raised anew.]

From time to time, John Holdren has acknowledged that plentiful, affordable, reliable energy is vital to human well being. Indeed, there is no going back to an energy-poor world. (Remember: caveman energy was 100% renewable.)

America–and the world–need more carbon-based energy, not less. Wind and solar are inferior energies compared to the real thing that consumers choose and want more of–oil, gas, and coal.

Holdren on the Importance of Energy

When Holdren or Obama advocates policies that risk making energy artificially scarce or less reliable, these words can be used to argue for nonregulatory approaches to energy policy:

“Virtually all of the benefits that now seem necessary to the ‘American way’ have required vast amounts of energy.

“The winds, turning more mills than ever before, pump water, grind grain, churn, and do a score of little tasks for a surviving domestic industry; but they list not to blow with enough regularity or violence to keep wheels spinning and mills going.”

– Walton Hamilton and Helen Wright, The Case of Bituminous Coal (New York: Institute of Economics/Macmillan, 1926), p. 3.

William Stanley Jevons’s The Coal Question (1865), the book that founded mineral economics, got it right on the limits of renewables for the machine age and the godsend of coal as a superabundant utilitarian energy source.

Previous posts at MasterResource have summarized Jevons’s 19th century wisdom on the primacy of coal (carbon-based energy); the limits of windpower; the limits of hydropower, biomass, and geothermal; and the paradox of energy efficiency.…