The Volokh Conspiracy

Andrew Morriss and Donald Boudreaux have an op-ed in today’s WSJ explaining why gasoline prices have become more volatile. The short version: Boutique fuel requirements have balkanized the gasoline market, magnifying the effects of local supply disruptions.

For most of the 20th century, the United States was a single market for gasoline. Today we have a series of fragmentary, regional markets thanks to dozens of regulatory requirements imposed by the federal Environmental Protection Agency (EPA) and state regulators. That’s a problem because each separate market is much more vulnerable than a national market to refinery outages, pipeline problems and other disruptions. . . .

The role of regulators in fuel formulation has become increasingly complex. The American Petroleum Institute today counts 17 different kinds of gasoline mandated across the country. This mandated fragmentation means that if a pipeline break cuts supplies in Phoenix, fuel from Tucson cannot be used to relieve the supply disruption because the two adjacent cities must use different blends under EPA rules.

To shift fuel supplies between these neighboring cities requires the EPA to waive all the obstructing regulatory requirements. Gaining permission takes precious time and money. Not surprisingly, one result is increased price volatility.

Another result: Since competition is a key source of falling gas prices, restricting competition by fragmenting markets reduces the market’s ability to lower prices.

While most of the fuel standards were adopted in the name of the environmental protection, many are actually the result of special interest pleading. Producers of various products, ethanol in particular, sought fuel content mandates or performance requirements that would benefit their particular product. (I detailed part of this history in “Clean Fuels, Dirty Air,” in Environmental Politics: Public Costs, Private Rewards (Greve & Smith eds. 1992).) Worse, some of the content requirements are irrelevant for new cars due to modern pollution control equipment. Federally imposed boutique fuel requirements have outlived whatever usefulness they ever had.

In yesterday’s NYT, Yoram Bauman and Shi-Ling Hsu explained why the U.S. would be wise to follow British Columbia’s example and impose a carbon tax and use the revenues to reduce other tax rates.

On Sunday, the best climate policy in the world got even better: British Columbia’s carbon tax — a tax on the carbon content of all fossil fuels burned in the province — increased from $25 to $30 per metric ton of carbon dioxide, making it more expensive to pollute.

This was good news not only for the environment but for nearly everyone who pays taxes in British Columbia, because the carbon tax is used to reduce taxes for individuals and businesses. Thanks to this tax swap, British Columbia has lowered its corporate income tax rate to 10 percent from 12 percent, a rate that is among the lowest in the Group of 8 wealthy nations. Personal income taxes for people earning less than $119,000 per year are now the lowest in Canada, and there are targeted rebates for low-income and rural households.

According to Bauman and Hsu, adopting a similar tax in the U.S. could allow for substantial reductions in corporate and income tax rates.

What would a British Columbia-style carbon tax look like in the United States? According to our calculations, a British Columbia-style $30 carbon tax would generate about $145 billion a year in the United States. That could be used to reduce individual and corporate income taxes by 10 percent, and afterward there would still be $35 billion left over. If recent budget deals are any guide, Congress might choose to set aside half of that remainder to reduce estate taxes (to please Republicans) and the other half to offset the impacts of higher fuel and electricity prices resulting from the carbon tax on low-income households through refundable tax credits or a targeted reduction in payroll taxes (to please Democrats).

The threat of climate change is one reason to support a revenue-neutral carbon tax proposal like this. But even those skeptical that warming poses much of a threat could come on board simply because broad-based consumption taxes of this sort are more efficient than taxes on labor and wealth creation. Furthermore, as Bauman and Hsu note, a carbon tax, as a consumption tax, would “give Americans more control over how much they pay in taxes.” Households and businesses could alter what they pay the government by altering their behavior. This is but another reason to favor shifting the tax burden away from income and on to consumption of carbon.

Today’s decision by the U.S. Court of Appeals for the D.C. Circuit in Coalition for Responsible Regulation v. EPA is quite significant for environmental law. As John Elwood notes below, the court turned away the state and industry challenges to the EPA’s decision to begin regulating greenhouse gases under the Clean Air Act. The only element of the decision that is at all surprising is the court’s dismissal of the challenges to the EPA’s “tailoring rule” due to a lack of standing.

On the merits, the court rejected challenges to the EPA’s determination that the emission of greenhouse gases causes or contributes to air pollution that which may be reasonably anticipated to endanger public health or welfare (the “endangerment finding”) and rejected claims that the EPA’s new standards for GHG emissions from mobile sources were arbitrary and capricious. This was to be expected. As I’ve noted before, judicial review of these sorts of decisions is highly deferential, and the EPA did not have to do much to support its decision. Even if the industry challengers had been able to convince the court that climate change is not that big of a deal, this would not have been enough to overturn the endangerment finding, provided the EPA gave a sufficient explanation of its conclusions — which it did.

The more interesting parts of the opinion concern whether the petitioners could challenge the EPA’s decision to regulate stationary source GHG emissions generally, and the EPA’s adoption of the tailoring rule in particular. On the former question, the court concluded that industry petitioners could challenge a decades-old EPA determination that the regulation of a pollutant from mobile sources under Section 202 of the Act triggers stationary source regulations. This was because there were some plaintiffs who had never-before been subject to stationary source regulation under the Clean Air Act because it was not until carbon dioxide was treated as a pollutant that these plantiffs emitted enough of a regulated substance to fall within the Act’s controls.

This small victory on ripeness was but a prelude to a loss on a larger question: Whether large emitters of greenhouse gases could challenge the EPA’s decision to forego regulation of smaller sources. No, the court concluded, because the industry petitioners did not satisfy the requirements for Article III standing to challenge the EPA’s failure to regulate someone else. However great the injury some industry groups may suffer from GHG regulation, the court reasoned, forcing the EPA to regulate additional sources would provide no meaningful redress. It does not matter that the EPA’s tailoring rule flatly contradicts the plain text of the Clean Air Act and represents a dramatic assertion of agency discretion over a detailed, legislatively crafted scheme. If there’s no standing, the suit cannot proceed.

This decision will be the last stop for most, if not all, of the industry challenges to the GHG rules. En banc and cert petitions may get filed, but I can’t see either the full D.C. Circuit or the Supreme Court having much interest in the endangerment finding or the EPA’s mobile source rules. If any claim has a chance to go on, it would be the standing argument. If there’s an issue in this case that could catch the Supreme Court’s attention, this would be it. Among other things, it could giver the Supreme Court the opportunity to address how recent standing decisions affect standing claims based upon alleged competitive harm (i.e. the harm suffered by company A due to the government’s favorable treatment of company B). Still, I would not bet on it. In all likelihood those who oppose GHG regulation under the Clean Air Act will have to direct their attention to Congress. They’re done in the courts.

UPDATE: More on the decision at Legal Planet from Ann Carlson here and here.

The summary of the holding from the court’s opinion:

[W]e conclude: 1) the Endangerment Finding and Tailpipe Rule are neither arbitrary nor capricious; 2) EPA’s interpretation of the governing CAA provisions is unambiguously correct; and 3) no petitioner has standing to challenge the Timing and Tailoring Rules. We thus dismiss for lack of jurisdiction all petitions for review of the Timing and Tailoring Rules, and deny the remainder of the petitions.

The opinion is available here.  The court simultaneously ordered the Clerk, consistent with D.C. Circuit Rule 41(b), to “withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc.”

What happens when the eminent domain power is used to obtain title to lands or other properties in which there are public trust responsibilities?  The U.S. Court of Appeals for the Ninth Circuit confronted this question in U.S. v. California State Lands Commission (aka U.S. v. 32.42 Acres of Land. In particular, the court considered whether the federal government’s use of eminent domain authority to acquire land for military operations necessarily extinguished California public trust rights, such that any subsequent owner would not take possession subject to the public trust burden. In a unanimous opinion issued last week, the Ninth Circuit concluded eminent domain creates a new title, completely unencumbered by any prior public trust rights. As the opinion concludes:

In the well-chosen words of Justice Holmes, “if there is such a thing as a new title known to the law, one founded upon the taking by the right of eminent domain is as clear an example as can be found.” Emery v. Boston Terminal Co., 178 Mass. 172, 184 (1901). The United States seeks to establish such a new title here, and has paid the $2,910,000 a jurydetermined was just compensation to extinguish the property rights of California and the San Diego Port District. Having paid just compensation, the United States is entitled to the interest it sought in its complaint in condemnation: full fee simple, free of California’s public trust. We have concluded that neither the equal-footing doctrine nor the public trust doctrine prevents the federal government from taking that interest in the land unencumbered.

This is but another example of how the expansive use of eminent domain can threaten environmental conservation.

Court-watchers are wondering if Thursday, June 21, will see the release of Supreme Court rulings on Obamacare or Arizona’s laws against illegal aliens. There’s another important decision that the Court almost certainly make on Thursday: whether to grant certiorari in Georgia-Pacific West v. Northwest Environment Defense Center.  (All the relevant documents are here, on Scotusblog.) Jonathan Adler blogged about it earlier today.

The Georgia-Pacific case involves a complex question of environmental law and regulatory deference, but its economic impact is enormous. In short: the federal Clean Water Act requires that most types of “point source” discharges of pollutants into waters can be allowed if the point source has discharge permit. A classic point source is a sewage discharge pipe from a factory or a municipality, that discharges into a river.

Federal law has separate controls for “non-point source” discharges of pollutants into waters. For example, if pesticides that are sprayed on a golf course run off into a river, that would be a non-point source of water pollution. In practice, most non-point sources involve farming, ranching, forestry and so on. The EPA has particular regulations for run off from such sites.

Now suppose that someone builds a logging road. There road itself is not a “pollution.” in any normal sense of the word. It’s just made of natural dirt and travel. Rainwater falls on the road, and runs off the road. For many roads, some of the rainwater run-off might eventually end up in a ditch or culvert, and the ditch or culvert might lead to a stream or lake. (The ditch or culvert helps reduce erosion.) Is the the ditch or culvert therefore a “point source” that requires a Clean Water Act discharge permit?

The EPA’s answer has always been “no.”  EPA regulations in 1976 said so explicitly. In 1987, the Clean Water Act was amended to require point source permits for stormwater runoff “associated with industrial activity”. CWA section 402(p). In writing regulations to implement the 1987 amendments, the CWA correctly decided the runoff of natural, unpolluted water from logging roads is not covered by section 402(p). One of the reasons that this is correct is that CWA definition of “point source” expressly excludes “agricultural stormwater discharges.”

However, the 9th Circuit’s decision in Georgia-Pacific held the EPA regulations invalid. 640 F.3d 1063. This creates a direct circuit split with the 8th Circuit’s Newton County Wildlife Association v. Rogers, 141 F.3d 803. If the 9th Circuit decision stands, it will essentially shut down logging within the enormous territory of the Circuit. If the 9th Circuit is right, then discharge permits are necessary not only for new roads, but for existing roads–and on private land as well as public land. Obtaining a permit can take years, and the permitting process offers many opportunities for anti-logging activists to monkey wrench and delay. If you wanted to destroy the American timber business, the 9th Circuit’s Georgia-Pacific decision is the perfect tool.

Last December, the Supreme Court asked the Solicitor General for a brief regarding Georgia-Pacific’s cert. petition. The brief agrees with petitioners (and their amici, including the majority of states Attorneys General) that the Ninth Circuit was wrong. However, the SG urged the Court not to take the case, because the EPA says it is writing new regulations which will supposedly fix the problem.

In my view, the Court should grant the petition. First, the Court should determine whether or not the Clean Water Act itself can even plausibly be read to give EPA power over rainwater runoff from logging roads.  This a very important issue for which the nation needs a definite answer.

Second, in order to give the Court time to act, Congress enacted an appropriations rider forbidding enforcement of the new permitting requirement under the Georgia-Pacific theory. (And since EPA can’t issue permits, private plaintiffs cannot sue to compel road owners to either obtain permits or shut down the road.) But the ban expires on September 30. (That the Solicitor General took have a year to file a cert. amicus brief prevented the case from possibly being heard on the merits this spring.) Because of the time necessary for Notice and Comment for EPA rulemaking, the new EPA regulation cannot possibly be operative before the litigation freeze expires.

Besides that, if the 9th Circuit is correct, then EPA “cannot” make the regulatory choice not to require discharge permits for logging roads. Thus, EPA’s new rule will itself the subject of further litigation. As long as the 9th Circuit’s panel decision in Georgia-Pacific remains valid, EPA will have to write a regulation complying with it, and so it seems inevitable that a huge number of logging roads will be requires to get point source discharge permits.

If cert. were granted, then the 9th Circuit (or failing that, the Supreme Court) should issue a stay for enforcement of Georgia-Pacific.

Even without a stay, if the Court granted cert., the grant itself would deter many private lawsuits brought under the Georgia-Pacific theory. If suits were brought, most lower courts would probably decide not to issue preliminary injunctions, and not to let the suits move forward, until the Supreme Court decided the case.

As the amicus briefs for the cert. petition explicate, the damage caused by Georgia-Pacific would be enormous. Although Georgia-Pacific involves issue of Chevron/Auer deference (including the question of whether EPA’s regulation is ambiguous), the more fundamental question is whether Congress, when enacting the Clean Water Act in 1972 (and then amending it in 1987), and setting up an intensive and strict system of permitting for waste pipes from factories, sewage pipes, and other point sources, meant for that very same system to apply to hundreds of thousands of miles of logging roads.  It is implausible to believe that Congress intended to wipe out the timber business, and to destroy the network of hundreds of thousands of logging roads which are used every day by hunters, other outdoor recreationists, farmers, and ranchers. Certainly any proposal in Congress to impose such far-reaching, harmful legislation would have engendered extensive debate.

Congress did not enact such a foolish law, nor did it give EPA the discretion to do so (in whole or in part) by regulation. It is time for the Supreme Court to say so, with finality.

Will 2012 provide a repeat of 2008? Specifically, will the Supreme Court’s October 2012 term find the Supreme Court repeatedly reversing the U.S. Court of Appeals for the Ninth Circuit in environmental cases as it did in the October 2008 term? In 2008, the Supreme Court heard an unusually high number of environmental cases, six: Winter v. Natural Res. Def. Council, Summers v. Earth Island Inst., Entergy Corp. v. Riverkeeper Inc., Coeur Alaska, Inc. v. Se. Alaska Conservation Council,Burlington N. & Santa Fe Ry. Co. v. United States and Shell Oil Co. v. United States (the latter two of which were consolidated). In all of these cases, the side favored by environmental groups had prevailed below, and in all of these cases the Supreme Court reversed. Equally notable, however, was that all but one of these cases (Entergy) came from the Ninth Circuit. To some the Supreme Court’s October 2008 term showed the Roberts Court lacked sympathy for environmentalist positions. To others, it was further evidence the Ninth Circuit was out of step on environmental issues.

2012 could provide a repeat of 2008 because the Supreme Court is being asked to grant cert in several cases from the Ninth Circuit that are potential outliers in environmental law.  As Richard Frank notes at Legal Planet, the Court will consider the such cases in tomorrow’s conference – Pacific Merchant Shipping Assn. v. Goldstene, Georgia-Pacific West, Inc. v. Northwest Environmental Defense Center (along with Decker v. Northwest Environmental Defense Center, another petition from the same case), and Los Angeles County Flood Control Dist. v. Natural Resources Defense Council –  all three of which have been identified among SCOTUSBlog’s “Petitions to Watch.”   Of note, the Solicitor General has recommended against cert in all three cases even though the Department of Justice believes the Ninth Circuit was wrong all three times.  According to the SG, each decision was wrong, but not cert-worthy.

In the normal course of affairs, an SG brief recommending against cert is a likely indicator that the Supreme Court will deny certiorari.  Yet that has not been the practice of late in environmental cases.  The Supreme Court has taken quite a few environmental cases in which the federal government lost below but nonetheless urged the Court to take pass, including Entergy, Coeur Alaska, Monstanto v. Geerston Farms, and Environmental Defense v. Duke Energy.  It’s almost as if the Roberts Court does not trust the judgment of the SG’s office as to whether environmental cases are cert worthy.

Among the cases on the docket for tomorrow, Georgia-Pacific West v. Northwest Environmental Defense Center is worth some attention. In this case, the Ninth Circuit rejected the EPA’s judgment that stormwater runoff from timber roads do not need NPDES permits under the Clean Water Act.  This decision overturned years of settled practice, and industry’s cert petitions have been joined by numerous state and local government amici.  The petition has even gotten a boost from a somewhat unlikely source: Judge Milan Smith of the Ninth Circuit.  In a flowery en banc dissent in another case, Karuk Tribe of California v. USFS, Judge Smith identified the Ninth Circuit’s decision on logging roads as one of several wrong-headed opinions from his court.  Given the timing of his dissent (excerpted below the fold), it’s hard not to read it as a cert petition from the bench.  Monday we should learn if the Supreme Court heeded Judge Smith’s call — and perhaps whether the Ninth Circuit is due for another environmental correction.

[Note: Embarrassing typo in opening sentence corrected.]

Continue reading ‘Is the Ninth Circuit Due for Environmental Correction?’ »

After an investigation commissioned by the Pacific Institute, Peter Gleick has been reinstated as its President.  The Institute released a carefully worded statement saying that the investigation supported what Gleick had said “regarding his interaction with the Heartland Institute.”  Gleick had eventually admitted that he had pretended to be a board member of Heartland to obtain non-public materials from them.  Once Gleick confessed to this, that much was not in dispute.

But the part that was still open to dispute involved the fake document that was not obtained through Gleick’s “interaction with the Heartland Institute.”  Gleick claimed that someone anonymously sent it to him “in the mail.”  Thus, he was not claiming that it came through “his interaction with the Heartland Institute.”

Remember: based on the language, content, and document properties, Gleick was identified by some commentators as the likeliest author of that fake document even before Gleick came forward to admit his role in feeding both the real and the disputed (i.e., fake) Heartland documents to bloggers.  What a coincidence that the author of the fake document used some phrases that Gleick favors, that the document inflated Gleick’s importance, and that Gleick admitted passing the document to others, but yet he didn’t write it (or so he claims)!

So what does the Pacific Institute have to say about the fake document that everyone agrees did not come from Gleick’s interaction with the Heartland Institute?  Absolutely NOTHING!

 PACIFIC INSTITUTE BOARD OF DIRECTORS STATEMENT

The Pacific Institute is pleased to welcome Dr. Peter Gleick back to his position as president of the Institute. An independent review conducted by outside counsel on behalf of the Institute has supported what Dr. Gleick has stated publicly regarding his interaction with the Heartland Institute. This independent investigation has further confirmed and the Pacific Institute is satisfied that none of its staff knew of or was involved in any way.

Dr. Gleick has apologized publicly for his actions, which are not condoned by the Pacific Institute and run counter to the Institute’s policies and standard of ethics over its 25-year history. The Board of Directors accepts Dr. Gleick’s apology for his lapse in judgment.

You’ve heard of non-denial denials. This is a non-confirmation confirmation.  Any lawyer worth his salt would read the Pacific Institute’s statement and assume that, while the investigation supported Gleick on the issue that no one disputed (“regarding his interaction with the Heartland Institute”), it probably did not support (or was silent) on the issue on which the Heartland Institute seemed to have the more likely explanation.

So there are two possibilities: EITHER (1) the report did not support Gleick on the origin of the fake document and the Board of the Pacific Institute is now trying to mislead the public with an evasive press release, OR (2) the Board of the Pacific Institute is extremely incompetent at writing press releases.

If the Pacific Institute were to release the report, not only would we be able to determine which alternative is true, but we would be able to assess the report’s plausibility—in particular, what the supposed original document and envelope to Gleick looked like and where they came from, and whether Gleick’s computers could have produced the document.

It is instructive to compare the gullibility of Felicity Barringer at the New York Times Green blog to the proper skepticism of her Times colleague Andrew Revkin at his Dot Earth blog.

 Barringer:

Nancy Ross, a spokeswoman for the Pacific Institute, declined to release specific details on the findings of the investigation, saying it was an internal personnel matter.

By saying that its investigation . . . confirmed Dr. Gleick’s account, the institute was implicitly backing the scientist’s claim that he was not responsible for cobbling together a document labeled a fake by Heartland, which he disseminated along with other genuine ones.

The bogus document spoke of effective ways for “dissuading science teachers from teaching science” and of “cultivating” respected writers on climate issues. Dr. Gleick said he had received it “in the mail.”

Revkin:

Here’s the troubling part: The Pacific Institute described its investigation as “a confidential personnel matter” and said for that reason no details on the process or findings would be released. Most notably, the group and its board declined to elaborate on the finding that the investigation, conducted by Independent Employment Counsel, “supported what Dr. Gleick has stated publicly regarding his interaction with the Heartland Institute.”

Does that mean the group expressly confirmed that a particularly provocative, and disputed, document was in fact produced by the Heartland Institute and not by Gleick himself or someone else?

No answer.

It’s fine to have an internal personnel investigation, but if you’re going to then release the finding publicly, but not any other details, it’s hard to see that carrying much weight in discourse outside the organization itself.

That’s why I see little merit in descriptions of the reinstatement as an exoneration — a word used by Michael E. Mann, a University of Pennsylvania climate scientist who, like Gleick, has become a prominent campaigner for action on curbing greenhouse gases. Here’s how Mann was quoted on the Gleick affair in Politico:

“I’m very pleased to learn that Peter has been exonerated,” Michael Mann of Penn State told ME. “He’s been a tireless champion for an informed discussion about how we deal with the challenges of climate change and diminishing access to clean water. I, for one, welcome him back to that discussion.”

Revkin concludes that “the big questions about the Heartland incident [are] still unresolved.”

Kudos to Andrew Revkin of the Times for knowing how to read a press release.

There is substantial theoretical and empirical evidence that property-based management schemes, such as catch-shares, prevent fishery collapse and ensure sustainability. The creation of property rights in ecological resources is also a principled conservative alternative to centralized regulation. Yet somehow a majority of House Republicans were bamboozled into voting to bar funding for further implementation of catch share funding along the Atlantic Coast and in the Gulf of Mexico. By supporting this amendment, offered by Reps. Steve Southerland (R-FL) and Ryan Grimm (R-NY), and endorsed by Rep. Barney Frank (D-MA), a majority of House Republicans managed to oppose property rights, market-based reforms, and environmental protection all at once. Actions like this give credence to the notion that some Republicans are more anti-environment than they are pro-market or anti-regulation.

Ronald Bailey has more here.

For the past ten days I’ve been one of the guest bloggers on Megan McArdle’s blog on The Atlantic‘s website. During this time I’ve written five posts on environmental policy. Here they are:

- Property Rights and the Tragedy of the Commons

- Property Rights and Fishery Conservation

- How Property Rights Could Help Save the Environment

- Is Washington, D.C., Really the Environment’s Savior?

- A Conservative’s Approach to Combating Climate Change

I didn’t get to choose all the titles, but the content’s all mine — for better or worse.

NASA’s James Hansen can be a bit unhinged when he talks about climate change. Although one of the world’s more prominent climate scientists, he has a penchant for selectively presenting only the most apocalyptic global warming scenarios and adopting unduly inflammatory rhetoric, as when he compared coal-laden trains, aka “death trains,” to the railcars carrying Jews to Nazi concentration camps or suggested that energy company CEOs are guilty of “crimes against humanity.”

Yet whatever his faults, James Hansen’s central climate policy recommendation is a sound one. For years he has called for a simple and straightforward approach: A revenue-neutral carbon tax and an end to fossil energy subsidies. As he writes in today’s NT:

We need to start reducing emissions significantly, not create new ways to increase them. We should impose a gradually rising carbon fee, collected from fossil fuel companies, then distribute 100 percent of the collections to all Americans on a per-capita basis every month. The government would not get a penny. This market-based approach would stimulate innovation, jobs and economic growth, avoid enlarging government or having it pick winners or losers. Most Americans, except the heaviest energy users, would get more back than they paid in increased prices. Not only that, the reduction in oil use resulting from the carbon price would be nearly six times as great as the oil supply from the proposed pipeline from Canada, rendering the pipeline superfluous, according to economic models driven by a slowly rising carbon price.

But instead of placing a rising fee on carbon emissions to make fossil fuels pay their true costs, leveling the energy playing field, the world’s governments are forcing the public to subsidize fossil fuels with hundreds of billions of dollars per year. This encourages a frantic stampede to extract every fossil fuel through mountaintop removal, longwall mining, hydraulic fracturing, tar sands and tar shale extraction, and deep ocean and Arctic drilling.

This is the sort of policy that could reduce greenhouse gas emissions and provide incentives for innovation (particularly if combined with things like prizes) without requiring the erection of a vast new bureaucracy or imposing substantial new burdens on the economy.

Conservatives have called for shifting the tax burden from labor and wealth creation to consumption, and that is precisely what Hansen’s proposal would do. Further, as shown by the experience of other jurisdictions, implementing a carbon tax of this sort is far less complicated than trying to erect a Waxman-Markey-type cap-and-trade scheme. A basic carbon tax would also be less susceptible (on the margin) to special interest rent-seeking than a cap-and-trade scheme, particularly if emissions allowances are to be doled out to reduce the economic impact of the regime. For a variety of reasons, excise taxes tend not to be carved up by interest groups the way income tax schemes are.

I’ve also argued that a revenue-neutral carbon tax would be easier — or at least no less difficult — to enact than a cap-and-trade scheme. Both involve increasing the cost of energy, but the revenue-neutral carbon tax would do so in a simpler, less-regressive, more transparent, and less economically burdensome way, and could not be characterized (a la Waxman-Markey) as implementing expansive government control over the energy sector for the benefit of special interests. Of course, we won’t know whether this is true until political leaders have the guts to push for this sort of policy.

I wish that environmental activists would follow Hansen’s lead (rather than, say, Krugman’s) and embrace this approach as a superior alternative to increased regulation or Waxman-Markey-style cap-and-trade. Alas, many Greens seem more interested in expanding government power than reducing greenhouse gas emissions. I also wish more forward-looking Republican leaders would embrace this sort of policy and recognize how it’s consistent with limited government principles. Alas, few on the right take environmental policy seriously enough to do more than bash bureaucrats. So I guess I’ll be wishing for awhile.

The New York Times has an article describing how the TransCanada corporation is using eminent domain to forcibly acquire property to build the Keystone oil pipeline:

When the TransCanada men first came, Julia Trigg Crawford said, they were polite. They offered money. Seven thousand dollars to let the Keystone XL pipeline cross her family’s 600-acre farm on its way from the Alberta tar sands to the refineries on the Gulf Coast....

Ms. Crawford, 52, who serves as the farm’s manager, called the rest of the family. They agreed to sign. “We thought that at least if we signed we’d have some say in what happened,” she said.

They called the TransCanada representative. “He told us that if we could come up with a contract that worked for both parties, they wouldn’t condemn the land,” Ms. Crawford said.....

“I fully expected them to counter,” she said. “There were about five or six things we wanted, and we would have been happy to take one or two.”

Then, she said, TransCanada “went full radio silence.” The Crawfords never heard back from them — until October, when they got a letter saying their land had been condemned and a lease awarded to TransCanada.

But as the Crawfords discovered, when voluntary compensation agreements are not reached, Texas law allows certain private pipeline companies to use the right of eminent domain to force landowners to let pipelines through. This was true even for TransCanada, which has yet to get State Department permission to bring the Keystone XL across the Alberta border.

The article notes TransCanada’s claim that it has acquired the overwhelming majority of the property they needed for the pipeline through voluntary land sales. This may be true, but it is misleading. Like the Crawfords, these owners agreed to sell their land under the threat of eminent domain if they refused. Some might well have refused to sell for the price offered by the firm if eminent domain were off the table. The voluntariness of land sales undertaken in the shadow of threats of condemnation is dubious at best.

Back in 2006, co-blogger Jonathan Adler and I published an article explaining the environmental dangers of allowing the use of eminent domain for private economic development projects, as the Supreme Court ruled in the Kelo case. At the time, some environmentalists pooh-pooed the article, and one group even declared our article the environmental “outrage of the month” (it must have been a slow month for actual pollution). Ironically, as Jonathan explained here, several environmental groups are now trying to use post-Kelo reform laws restricting economic development takings to block the Keystone takings.

Such efforts are unlikely to succeed in Texas. As I described in this article, Texas is one of many states that have passed post-Kelo reform laws that pretend to constrain economic development takings without actually doing so. They might have a better chance in one of the other states through which the pipeline must pass.

Even if Kelo had been decided the other way, some pipeline takings might still be constitutional. The Constitution permits takings for “public use,” and even under the traditional definition of public use advocated by Kelo’s critics, condemnations for public utilities or common carriers that the general population has a legal right of access to are often permissible. However, pipeline takings would be subject to tougher constitutional constraints than under Kelo, and the government would at least have to prove that the pipelines in question really are public utilities or common carriers open to the general public.

Regardless, as Jonathan points out, the controversy over Keystone has led “some environmentalists... to recognize that allowing the government to seize private property for the purpose of encouraging private economic development can facilitate environmentally undesirable projects.”

UPDATE: In a response to this post, Mark Kleiman claims that Jonathan Adler and I “don’t seem interested in the fact that none of their friends on the side of inalienable property rights seems to have any problem with the use of eminent domain to build Keystone (any more than they objected to George W. Bush’s use of it to enrich himself and his business partners in the Texas Rangers by seizing private property to build, not merely a stadium, but a shopping mall).” Actually, people who are genuinely “on the side of inalienable property rights” are likely to be opposed to the use of eminent domain for this project. But if Kleiman means to refer to the GOP, I thought the fact that most Republicans support the pipeline is too well-known to require dwelling on. By contrast, (some) environmentalists’ change of heart on eminent domain is a development that is much less widely appreciated.

I have, however, criticized eminent domain abuses advocated by Republicans in many previous posts, such as here and here. In this 2006 post, I noted the inadequacy of the Bush administration’s response to Kelo. Few if any opponents of Kelo approve of the use of eminent domain to build sports stadiums. George W. Bush’s exploitation of it, of course, occurred many years before Kelo thrust the issue of eminent domain into the limelight, and few nonexperts remember it today.

The folks at the Heartland Institute are mad, and that seems to have driven them a little mad. For years environmental activists have compared climate skeptics and those who raise questions about the likelihood of a warming-induced apocalypse to Holocaust deniers and worse. In 1989, then-Senator Al Gore famously compared those who downplayed the climate threat to those who ignored Hitler’s rise and NASA’s James Hansen compared coal-bearing trains to the rail cars headed to Nazi crematoria, drawing a moral equivalence between the use of coal and the Holocaust. Think Progress also trumpeted the “climate denial” views of Norwegian terrorist Andrew Breivik and claimed he was “inspired” by mainstream climate skeptics.

Then, earlier this year, Heartland was the target of directed smear campaign after the Pacific Institute’s Peter Gleick surreptitiously obtained internal Heartland documents by impersonating a board member. Gleick anonymously distributed the purloined documents together with a forged memorandum purporting to provide further evidence of Heartland’s internal dealings. Progressive bloggers trumpeted the materials, and the forged memo in particular, as evidence of Heartland’s sinister machinations. While it seems likely that Gleick himself forged the memo (or knows who did) Heartland may have difficulty seeking legal redress for his actions. I posted on what some call “Fakegate” here and here.

Instead of trying to retain the moral high ground by defending the substance of its views, Heartland adopted the tactics of its most unhinged critics, purchasing a billboard comparing those who believe in global warming to the Unabomber. According to Heartland, this was to be the first in a series featuring famous “global warming alarmists,” including Osama Bin Laden, Fidel Castro and other “rogues and villians.” Heartland explained the campaign this way:

what these murderers and madmen have said differs very little from what spokespersons for the United Nations, journalists for the “mainstream” media, and liberal politicians say about global warming. They are so similar, in fact, that a Web site has a quiz that asks if you can tell the difference between what Ted Kaczynski, the Unabomber, wrote in his “Manifesto” and what Al Gore wrote in his book, Earth in the Balance.

The point is that believing in global warming is not “mainstream,” smart, or sophisticated. In fact, it is just the opposite of those things. Still believing in man-made global warming – after all the scientific discoveries and revelations that point against this theory – is more than a little nutty. In fact, some really crazy people use it to justify immoral and frightening behavior.

The response to this ad was quite negative from friend and foe alike, prompting Heartland to pull the ad within 24 hours. Heartland now claims the billboard was an “experiment.”

“This provocative billboard was always intended to be an experiment. And after just 24 hours the results are in: It got people’s attention.

“This billboard was deliberately provocative, an attempt to turn the tables on the climate alarmists by using their own tactics but with the opposite message. We found it interesting that the ad seemed to evoke reactions more passionate than when leading alarmists compare climate realists to Nazis or declare they are imposing on our children a mass death sentence. We leave it to others to determine why that is so.

Well lots of folks didn’t get the joke, including many of Heartlands friends and funders. Several speakers have withdrawn from Heartland’s annual climate conference, including Rep. James Sensenbrenner and IPCC critic Donna Laframboise. (More reactions here and here.) E&E News also reports the publicity stunt is costing Heartland financial support, and could prompt staff departures too.

Even if the billboard was initially designed as an “experiment,” it was a stupid idea. The implicit argument of the billboards is completely unjustifiable. So what if some tyrants and whackjobs believe in global warming. This is like arguing someone should eat meat because Hitler was a vegetarian. Lots of evil, crazy, and stupid people believe plenty of sensible things (and lots of brilliant people have embraced nutty ideas). Heartland’s justifiable anger at the vitriol spewed by its most extreme or unhinged opponents does not justify sinking to their level. If the folks at Heartland believe there is a double-standard — and I believe there is, even though I also believe anthropogenic global warming is a real problem — then they should explain why. There’s no need to provoke and offend countless commuters and others by suggesting that a believing in global warming makes one like the Unabomber. It was a know-nothing message, and not just because most so-called “skeptics” actually believe in global warming too, and only reject apocalyptic climate projections. I expect this sort of stunt from extreme animal rights groups, not those who purport to want an open and honest scientific debate. However angry the Heartland folks may be with some of those on the other side, this stunt was unjustified and unwise — and by all accounts it looks like it will cost Heartland dearly.

The New Orleans Times Picayune reports the White House denied the Department of Interior’s Office of Inspector General access to e-mails and communications about White House revisions to a report Interior Secretary Ken Salazar relied upon to justify a moratorium in oil drilling in the Gulf of Mexico. The story begins:

A senior federal investigator says he was denied access to a White House official and full email records as he tried to determine whether a BP oil spill report was intentionally edited to erroneously suggest outside experts supported the Obama administration’s deepwater drilling moratorium. The experts, in fact, did not endorse the moratorium the administration ordered after the 2010 spill. The White House and Department of Interior later said the mistake was inadvertent, a result of an early-morning edit that moved some material from the body of the report to the executive summary.

Although some e-mails were provided eventually, the IG’s office was never able to validate their authenticity or completeness, the investigator claims. He also alleges the White House did not allow the IG to interview a White House official involved in editing the report. An official in the IG’s office told the Times Picayune that his office “does not have authority to compel” White House cooperation with its investigation.

The Washington Post editorializes that the case for approving the Keystone XL pipeline was “always strong” and “has grown stronger.”

A key environmentalist argument against Keystone XL has been that the project would encourage the extraction of bitumen, a particularly dirty oil-like substance, from the “oil sands” in Alberta. If activists could “shut in” Canadian bitumen, limiting the ability of oil companies to sell the product, they argued, perhaps petroleum firms wouldn’t be able to fully develop the oil sands.

That hope always was unrealistic, and a recent announcement from Kinder Morgan, another pipeline company, illustrates why. The firm wants to nearly triple the capacity of its existing Trans Mountain pipeline between Alberta and Vancouver — a route from the oil sands to the world market — enabling it to carry even more product than the Keystone XL would. From there, much of it would probably head to Asia. Because the pipeline exists, expanding it may not face the same regulatory hurdles — particularly opposition from native groups — that other proposals to run new pipelines to Canada’s west coast have encountered.

There is already enough spare pipeline capacity running out of the oil sands to accommodate increasing production for much of this decade, a government report concluded in 2010. While Kinder Morgan’s expansion certainly wouldn’t sate all the future demand for pipeline capacity, it would add more time before the environmentalists’ strategy could seriously impact production. And it demonstrates a critical point: Even if environmentalists manage to stop one pipeline or another, given high world oil prices, the enthusiastic support of the Canadian government, the many transport options and the years available to develop infrastructure, it’s beyond quixotic to believe that enough of the affordable paths out will be blocked. Environmentalists might succeed, however, in relocating some construction jobs outside the United States.

The editorial also criticizes Republicans for trying to force the President’s hand. I think a better question is why this pipeline is subject to executive approval in the first place. The White House only has a say about Keystone XL because it crosses the U.S.-Canada border. Yet the stated reasons for not approving the pipeline — such as concerns about the potential environmental effect of a spill in Nebraska — have absolutely nothing to do with the pipeline’s transnational character and can be addressed through traditional regulatory controls and siting processes. Further, the legislation forcing an executive decision on the pipeline project expressly ensured state officials could alter the route to protect local environmental concerns. If there are no particular problems arising from the cross-border nature of this project, there’s no reason for the State Department to have any concerns — and it’s only the State Department’s review that is at issue. So before attacking the GOP for trying to force the President’s hand, the Post should ask how the President is able to hold up this project in the first place.