This is an article on climate change and the President's recent proposals to reduce global warming.
The article does a good job of summarizing the President's positions, but does not take the issue a step further and consider whether these suggestions are reasonable, valid or useful.
So really we have a couple issues likely to come up in this discussion:
- There is or is not global warming.
- What to be done about it. (this is the President's list in the article)
- What effects the items in #2 will have (what I will discuss).
So firstly to question #1 about whether global warming exists I believe that it does. I'm not a scientist, and I'm not terribly well read on the topic so someone could well come along and dispute whether I'm correct in this belief and I'm happy to hear points on either side of the topic. Again I don't know an awful lot about it except my experiential impression that the places I've lived (Chicago & Kansas City) get a lot less snow now than I remember getting as a kid. Every time I say that someone inevitably tells me I was allot shorter then and maybe it only seemed like there was more snow.... still though I'm a believer even if I haven't examined this belief in very much detail yet.
So to point #2 President Obama is proposing:
- Reduced tariffs on goods his administration deems "environmentally friendly"
- Additional restrictions on coal fired power plants.
- Additional regulations added to new infrastructure projects.
- Hospitals to be "built better" although I don't see that this request has any specific government action behind it?
My opinions on Obama's points is merely reactionary, I haven't analyzed any of them yet. But my initial impression item by item is:
- I like this proposal, its a shame we have to apply it to only products the government deems "good." This will ultimately be reverse engineered by corporations who will find loop holes to get their product treated with a lower tariff under this policy. The better policy would be to reduce all tariffs and barriers to free trade universally across the board. Still though any removal of barriers against free trade is favorable for everybody.
- I view this suggestion as very harmful. In total the effect it will have is to cause some power plants to close. Any time you increase the cost you decrease the quantity. In turn that makes electricity more expensive across the board. So, in total, it has the effect of reducing the size of the US economy because the additional money spent per KW of higher priced electricity would otherwise have been spent to purchase some other good / service that now has a lower demand.... therefore fewer jobs and less growth in those areas... and so on. Those are the invisible second order & tertiary effects of raising costs through regulation. Also part of the cost increase will be passed on to the employee of those companies who will be punished through lower wage growth and fewer benefits. It will also be passed on to the companies who do business with the coal plant (the railroads, the miners, etc) who will be asked to renegotiate contracts and also cut prices. So when you consider all those areas you can start to see the harm of regulations and how much money they remove from the economy, which translates to fewer jobs, higher unemployment and higher prices across the board.
- The cost of adding additional regulations to infrastructure projects is unwise for the same reasons I go into above. Plus, as a former real estate developer, I can tell you federal road standards are already insane. When developers put in roadway they estimate the price by front foot. So you take a 12' wide road and estimate the cost by foot of frontage. The times that I've had to build acel / decel lanes into a development from a US highway we were estimating the cost by square foot of road! It is that much more expensive due to all the federal regulations... it is insane already to the point of far beyond excessive.
- Meh. Doubt anyone will listen to this one.
So that is my read of the matter. My curiousity about the topic comes in that I would like to know the marginal impact these improvements on coal plants are supposed to make against the cost. I suspect (again do not know), but suspect that the US likely already has the tightest emission standards of all the world's coal fired power plants. So how much impact globally will the slight increases we achieve make compared a coal plant in, say the former USSR, that is belching out massive pollution laden black smoke without inhibition. I don't ask that to make a case for doing nothing as a solution, but America doesn't have any plants that are releasing untreated emissions. So the logical question is how much cleaner will these standards make our emissions and is that difference one that has any impact at all on the global level? My suspicion is it does not, but I'd like to hear from people who are educated on the topic.