Secretary of the Interior Ken Salazar, speaking in Atlantic City in April, added more hot air to the discussion about offshore wind when he stated that windmills off the East Coast could generate enough electricity to replace most, if not all, of the coal-fired power plants in the U.S.

Yet such would require offshore wind turbines stacked almost a hundred miles deep from Maine to Florida. I’m disappointed Salazar didn’t take a few minutes for fact-checking and back-of-the-envelope ciphering before his speech or he would have discovered that his estimates are pure bluster.

I am reminded of all this as I read of Germany’s plan to get offshore wind in the mix, forcing power-grid operators to build sea cables at their expense and requiring buyers to pay $0.21/kWh for the power.…

Some environmental leaders have said that I am naïve to think that there is an alternative to cap-and-trade, and they suggest that I should stick to climate modeling. Their contention is that it is better to pass any bill now and improve it later. Their belief that they, as opposed to the fossil interests, have more effect on the bill’s eventual shape seems to be the pinnacle of naïveté.

– James Hansen, “Strategies to Address Global Warming,” July 2009.

Welcome to the science of politics, Dr. Hansen–and welcome to a tradition in political economy that is more than a century old. “I see no force in modern society which can cope with the power of capital handled by talent,” stated William Graham Summer in 1905, “and I cannot doubt that the greatest force will control the other forces.”…

In this month’s article at EconLib, I provide an introduction to the economics of climate change, and discuss some of its major controversies. Follow the above link for the full story, but in a nutshell here are the main issues:

(1) The Discount Rate. Economists give wildly different estimates of the “social cost of carbon” and hence the “optimal” tax on an additional unit of emissions.  These differences are not primarily due to the assumptions about climate systems or human vulnerabilities to warming. On the contrary, the main difference between, say, the policy recommendations of the Stern Review (very aggressive) and William Nordhaus’ DICE model (very moderate) is that Stern uses a very low discount rate, while Nordhaus plugs in an estimate of the market’s rate of return on capital.

Efforts to mitigate greenhouse gas emissions impose large, upfront costs on the economy (in terms of forfeited potential output of goods and services), while the benefits will not accrue until decades in the future (in the form of avoided climate change damage).…

A death announcement last week in the Houston Chronicle caught my eye. I never met the late Stephen Simon, but what I read made me realize that the quiet heroes and heroines of free-market capitalism need to be saluted now and then. For they are the wealth creators and real philanthropists versus the political system’s wealth redistributionists and wealth destroyers.

Here is the essence of this man. An engineer. More than 40 years with a major energy company in a variety of advancing positions at home and abroad. Successful. Private sector philanthropist with his time and money.

And through it all, a “heroic capitalist” in the Smith-Smiles-Rand tradition (see Part I of my Capitalism at Work). A practitioner of Principled Entrepreneurship ™.

Think of what Julian Simon would have said about Stephen Simon (no relation): He created more than he consumed to leave us resource richer.…