When Smart People Say Dumb Things

by Dave Schuler on June 6, 2014

I am trying hard to resist fisking Eric Poole’s article in the Harvard Business Review on the EPA’s new anti-coal initiative. In the interest of my own mental health and brevity I’ll limit my observations to a few choice examples.

Something reassuring happened Monday after EPA Administrator Gina McCarthy unveiled the Obama administration’s proposed Clean Power Plan, arguably the most important step the U.S. has taken in the fight against global climate change: The S&P 500 and Dow Jones stock indexes rose to record highs. I’ll take that as a sign investors aren’t buying the old scare tactic that federal climate action is bad for the economy.

or the market may already have discounted the Obama Administration’s anti-coal policy or other events that happened at the same time overshadowed the policy announcement or the market has a life and momentum of its own that’s disconnected from the larger economy or any number of other possibilities. Are short term market moves really a gauge of long term investor sentiment? That would make an interesting study.

Renewables are growing faster than any other kind of of power generation, with more solar panels installed in the U.S. over the last 18 months than the previous 30 years combined.

Alternative energy is heavily subsidized. In total biomass, geothermal, solar, and wind account for about 5% U. S. energy production, most of which is wind, the most heavily subsidized.

The cost of solar and wind are falling rapidly…

The Chinese are dumping solar panels on the United States.

California is also delivering some big results. The Golden State’s energy efficiency programs have saved its residents $74 billion over the last few decades and avoided the construction of more than 30 power plants.

California is a net importer of energy. California’s programs have resulted in their importing more energy from elsewhere rather than generating it locally. Californians are in essence taking the same attitude that American do to China: if it’s not happening here, it’s not happening at all and has no consequences.

Illinois, a state heavily dependent on coal for electricity, has aggressive energy efficiency mandates that require utilities to cut energy use by 2% annually by 2015, as well as a 25%-by-2025 renewables standard has been a boon for the state’s wind industry.

Over the period of the last thirty years Chicago has derived more than 85% of its energy from nuclear power. The state’s energy mandates are driving businesses out of the state (businesses have left Illinois faster than any other state) and Illinois’s aggressive subsidies for wind power are actually higher than the value of the power being generated.

I could go on. You can prove practically anything if you cherry-pick the data with sufficient ferocity. If you torture the data long enough, they will submit.

{ 24 comments… read them below or add one }

... June 6, 2014 at 7:48 am

I’ll take that as a sign investors aren’t buying the old scare tactic that federal climate action is bad for the economy. I’ll take that as a sign investors aren’t buying the old scare tactic that federal climate action is bad for the economy.

Yeah, investors totally react at a moments notice to events that will happen sixteen YEARS hence.

And $74 billion over DECADES? For the world’s eighth or ninth largest economy? That’s a bit more than a rounding error for numbers that large, but just barely.

... June 6, 2014 at 8:01 am

Good news! And it has nothing to do with the Dacia Sandero! If I understand the numbers correctly, we have finally hit a higher number of totally employed people than we had at the previous peek. It only took almost six and a half years, and the population has grown in the meantime, and the replacement jobs have, on net, been much crappier than the old jobs, but hey, winning!

I’ve got a friend that got one of the new jobs last month. So … Yay! The only problem is that he lost his old job back in December. I’m not sure how much he was making back then, but it had to be around $70,000/yr in the (very) high tech industry. The new job is $8.50 an hour in food services and is part-time. But he really REALLY hopes to make it into a full-time job some time soon.

Recovery, bitches, good and haaaaard.

PD Shaw June 6, 2014 at 8:14 am

I was listening to CNBC on the day of the rule announcement, and the talking heads thought Obama had waited this long to propose rules so that it would only become an issue after he had left office. Sixteen years? I was thinking more like ten years.

Also, not the first carbon regulations proposed. Carbon restrictions on new plants were proposed last year. My favorite part was the assertion of no significant cost from their implementation because no new coal-fired plants are going to be constructed in the foreseeable future anyway.

Guarneri June 6, 2014 at 9:16 am

I feel no need to go into detail as Dave has shredded this guy already. Obviously it was a puff piece. A shame to see such obvious nonsense published.

Remember too that it was Harvards rag. So it’s suspect by definition.

... June 6, 2014 at 9:42 am

Drew, it’s the best and the brightest at work.

... June 6, 2014 at 9:44 am

PD, I left a response to your Godzilla question yesterday. I had missed your comment when posted, sorry.

Guarneri June 6, 2014 at 10:52 am

Tsk tsk ice. Remember, Michael would no doubt cite this article as proof positive. Hence, : the brainwashed and bamboozled, not best and brightest. Please be more accurate in the future……

... June 6, 2014 at 11:03 am

I was using irony, but that was probably racist, sexist, homophobic and transphobic, as only sincere statements of love are allowed when discussing the ruling class these days. So I’ll take that under advisement.

steve June 6, 2014 at 11:45 am

Never trust or elect a Harvard Business grad. I agree.

Steve

Andy June 6, 2014 at 12:59 pm

So I guess torture works, given the right context….

michael reynolds June 6, 2014 at 1:11 pm

Thank God we don’t subsidize oil the way we wacky Californians subsidize windmills. Why, can you imagine? Why, we’d be doing things like handing out big tax breaks for exploration, or building massive systems of roads on which oil would be burned, or granting low-cost drilling rights on federal lands, or deploying the world’s largest navy to ensure the free movement of oil.

Hah hah hah. Gosh, that would be some crazy stuff. If we did that.

Dave Schuler June 6, 2014 at 1:14 pm

If you expect me to support oil subsidies, you’re wrong. I’ve opposed them for decades. And, as I’ve said any number of times, since I lived in Germany I’ve supported gas/carbon taxes for geopolitical reasons.

michael reynolds June 6, 2014 at 1:38 pm

Right, so we subsidize ALL energy. All of it. Because society needs energy. So in some places we’re trying to subsidize the kinds of energy that don’t result in millions of deaths downstream from respiratory diseases that society also pays for, and we’re laughed at.

Hah hah hah, windmills!

If we put a tiny fraction of the money we’ve put into oil into safer nukes and wind and solar we could decommission half the Navy and tell the entire Middle East to f-ck off.

By the way, the only reason we aren’t even deeper into big oil’s grip is because those wacky California environmentalists did silly hippie stuff like demand more efficient cars and more efficient machines and better-insulated homes. All to much hooting and derision from right wing geniuses who predicted we’d be reduced to peddling tricycles and living in holes in the ground.

Dave Schuler June 6, 2014 at 2:00 pm

It’s taken more than 30 years but I notice that the environmentalists who opposed nuclear energy back then are beginning to come around.

Honestly, I think it’s reasonable and rational to oppose building nuclear power plants in the Ring of Fire. However, the relatively much more stable Upper Midwest is a completely different kettle of fish. That’s the thing with power generation: one size does not fit all.

PD Shaw June 6, 2014 at 4:18 pm

When people complain about oil subsidies, they usually mean by fighting wars in the Middle East, as if the world is that simple

How do we subsidize wind power? We force people or governments or corporations to buy it. But because the wind power is concentrated in places like North Dakota, which cannot be efficiently transferred to where the population is centered, they end up buying power options, not actual power.

So, my city, while laying off employees, was forced to buy so much power, which it didn’t need. The city bought so many units per year, and if the market price goes up, the city makes a profit, if it goes down, I guess we cover the difference. I probably don’t want to know if the price goes to zero. Its not buying wind power, its being forced to speculate in the energy markets, and the more people are forced to do it, the more ludicrous it becomes.

PD Shaw June 6, 2014 at 4:28 pm

I probably made a mess of the description of the market, but basically laws require purchase of alternate energy without actually acquiring any alternative energy, just financial instruments that cause the price of alternative energy to fall.

... June 6, 2014 at 4:43 pm

So, PD, you’re saying that your city is basically running the ENRON model. What could possibly go wrong?!

PD Shaw June 6, 2014 at 4:47 pm

@Elipses, its not even the first time. The city used to buy and sell power options as a source of income, and then got caught when prices went through the roof. We were sued, and our defense was that we were acting illegally.

Guarneri June 6, 2014 at 6:21 pm

“It’s taken more than 30 years but I notice that the environmentalists who opposed nuclear energy back then are beginning to come around.”

This would be good. I’ll keep watch. Good head’s up.

“Honestly, I think it’s reasonable and rational to oppose building nuclear power plants in the Ring of Fire. However, the relatively much more stable Upper Midwest is a completely different kettle of fish. That’s the thing with power generation: one size does not fit all.”

And this of course is the real point, and why its always been so disheartening to observe the monolithic view on AGW. We may buy in AZ as well as FL. We investigated it. Solar might (might) make sense there. Wind can work in places. Hydro works in places. On balance electric cars really just create an alternative set of issues. Nat gas is a generally good option to coal. Nuclear here, nuclear there, but not nuclear everywhere. And on it goes. We plain and simply are in a fossil fuel world for oh, a hundred years at least.

As much as I’d like, neither me nor my daughter are going to see that. Let’s take a deep breath and come at this in sensible fashion, not the hysterical and obviously tax source / and anti-growth agenda being dishonestly peddled.

... June 7, 2014 at 7:53 am

@PD

!!

TastyBits June 7, 2014 at 8:23 am

Seismic activity is one of the safety criteria in the design of a nuclear power plant. With few exceptions, all places experience seismic activity, and like floods, there are hundred and thousand year earthquake events that need to be considered.

Everything designated as safety needs to be able to not only withstand seismic activity (specific design level), but it must also function as designed during the event. This includes mechanical, electrical, and structural.

One reason that nuclear power is expensive is that the parts considered safety related must have a pedigree to ensure that they are reliable. The same valve that a refinery uses must undergo an expensive certification process to be used as a safety related component in a nuclear plant.

The Japanese plants were never designed for anything close to what the sustained. They performed well beyond their design specifications. Most people do not understand this, but it should have been far, far worse.

jan June 7, 2014 at 3:33 pm

“The Japanese plants were never designed for anything close to what the sustained. They performed well beyond their design specifications. Most people do not understand this, but it should have been far, far worse.”

That’s an interesting detail, Tasty — one of the first positive one’s I’ve heard about the nuclear plants in Japan recently. BTW, it’s good to see you again.

TastyBits June 8, 2014 at 9:53 am

@jan

I am still around, and I still comment. I just do not hit the Submit button very often.

jan June 8, 2014 at 8:31 pm

Tasty,

I totally understand that inaction!

Leave a Comment

Previous post:

Next post: