TGIF: Double-Rigging of the Auto Market

U.S. government interference with our lives often resembles a Russian matryoshka doll: regulation is nested in more regulation. Take the provision of Biden's pending Build Back Better bill that would create a big tax credit for people who buy U.S.-built electric vehicles (EV).

Not only would the government distort the domestic auto market by rigging it in favor of electric vehicles over conventional ones, but it also would rig the EV market, Trump-style, in favor of U.S.-made products. This implies that "foreign" EVs are so attractive to American buyers that the domestic offerings need help from the state to compete. That's an argument against the provision right there. If the vehicles that American companies and workers turn out aren't what American buyers would want to buy without subsidies, the manufacturers shouldn't be protected from that important information.

Why not? Because markets exist for consumers and not for producers. Makers of trade policy have no political incentive to operate on that principle because manufacturers of a given product can easily organize for government protection of their livelihoods and reward the politicians who do their bidding. Unfortunately, the same cannot be said for consumers, who have too many other things to worry about. Any kind of trade restrictions hurt them because prices will be higher and product variety will be constrained, especially if a trade war breaks out through tit-for-tat retaliation.

Trade wars end up hurting producers as well, of course. Even without a trade war, when Americans buy less from foreigners, foreigners, having less money, will buy less from Americans and other foreigners. The bad effects ripple globally.

Understandably, electric-vehicle makers in Canada and Mexico are especially upset. Who could blame them? The San Diego Union-Tribune reports, "Canada and Mexico worry the provision would lead to dramatic reductions in EVs purchased in their respective countries and violates the U.S.-Mexico-Canada Agreement, or USMCA, the trade pact the three countries passed last year to replace NAFTA."

So much for the alleged free-trade zone of North America.

But things are not quite so simple as the provision's backers make out, demonstrating that Donald Trump had no monopoly on willful ignorance about the reality of trade. The inhabitants of the United States, Canada, and Mexico do more than trade finished consumer goods with each other. For many years North America has been a single highly integrated market for producers' goods.

According to the Union-Tribune, Canada's consul general for Southern California, Nevada, and Arizona, Zaib Shaikh, points out that, in the newspaper's words, "Determining the country of origin of a given vehicle is complicated because the auto industry of the three North American countries has become so highly integrated."

In other words, It's not clear what an American, Canadian, or Mexican EV is exactly. “'When you think about vehicles assembled in Canada, they’re actually 50 percent U.S.-made,' Shaikh said, 'because the supply chain works so that things are crossed over six or seven times across the border' before a vehicle is finally assembled."

It's hardly the first time that the authors and backers of legislation were ignorant about the thing they sought to regulate.

As already noted, tilting the market toward American manufacturers, even if that were possible today, is not the only objectionable feature of the provision. The provision also aims at tilting the market toward EVs and against vehicles with internal combustion engines. EV purchasers would gain $12,500 in tax credits by 2027. This is in pursuit of the Biden administration's goal of cutting carbon-dioxide emissions 50-54 percent from the 2005 level by 2030 and reaching net-zero emissions across the economy by 2050.

Those targets are important for many people on the fallacious grounds that carbon dioxide is a pollutant that is ruinously warming the climate when in fact it is plant food that is greening the earth and bringing other palpable benefits to mankind. (Thanks to technology, the real pollutants in gasoline are already controlled in today's clean cars.)

To the extent that human-generated CO2 emissions through the use of fossil fuels have contributed to mild global warming since the Industrial Revolution began, they have helped to improve the lives of human beings everywhere by making the natural world more hospitable. During this time, population, life expectancy, and per-capita wealth have grown, while extreme poverty, infant mortality, and deaths from weather extremes have plummeted. Cold kills more people than heat, and the longer growing seasons made possible by warming help feed the world's nearly 8 billion people at a lower cost.

For the foreseeable future, nothing will be able to compete with fossil fuels in providing reliable, inexpensive, and abundant energy -- something billions of people in the developing world desperately need if they are to achieve the living standards that we in the West take for granted.

So rigging the market in favor of electric vehicles is a dumb idea.

Finally, we might welcome tax credits because they provide a chance to keep more of our money, but this principle is a snare and a delusion.  The power to tax (that is, steal) is bad enough without it also being a politician's tool to manipulate market outcomes. That only adds injury to injury.

CO2 and Global Cooling

If CO2 is implicated in global warming, not in its own right, but because it ​indirectly ​​leads to more water vapor, the dominant greenhouse gas, which amplifies what would otherwise be minor warming, then it could just as reasonably be implicated in global cooling, or at least reduced warming, because the resulting water vapor could condense into clouds, which reflect the sun's incoming radiation--preventing them from reaching the earth's surface​ and then being absorbed by the greenhouse gases​. (Scientists agree that clouding is highly complex and hasn't been captured by the climate computer models relied on by climate alarmists. See this from the American Chemical Society, which is in the climate alarmist camp.) 

This is an important point. According to alarmists, CO2 by itself is not the problem. The problem is the amplification by water vapor. But what if reduction is a possibility? Scientists don't know enough about clouding to regard it as unimportant. (Matt Ridley has a good discussion of this in this video.)

Similarly, the data from observations consistently show that the computer models overestimate the climate's sensitivity to changes in CO2. (See the Ridley video.)

So why the obsession with CO2? Renee Cho gives the answer at the Columbia (University) Climate School website: "while we have no way to control water vapor, we can control CO2." 

Controlling CO2 of course means controlling us.

TGIF: Bad Sign?

When I see four of those yard signs on my morning walk, I chuckle. If I'm in a mischievous mood I might someday suggest a couple of memes that the owners might add.

I could embrace all of those memes, but not without some qualification and in several cases, a good deal of qualification. But that's for another day.

Today I want to focus on numbers 5 and 6: "Science Is Real" and "Water Is Life." I wouldn't comment on these were it not for their ominous implications for government policy. Some people are ready to spend trillions of other people's money because of what they suppose those sayings mean.

They are true of course, but they are misleading because they are incomplete. (Would many people actually deny that science per se is unreal or that water is essential to life?)

My suggestion to the sign owners would be, first, to take a Sharpie and squeeze in these words after "Science Is Real": "But Scientists Are Human Beings Too." Not every passerby will get it, but some may interpret it correctly to mean that scientists, despite the white lab coats, are subject to the same imperfections as other people: among them, bias, vanity, greed, insecurity, what Herbert Spencer called "the pressing desire for careers," and a wish to protect the psychological investment that can result when one spends a good deal of time mastering a subject.

The climate row provides a good example here. If one comes to think of oneself as having mastered climatology, one hardly wants to hear other scientists with impeccable credentials say that "the climate" is too complex a subject to be mastered by anyone. In fact, complex doesn't even begin to describe it. As the scientists who are climate optimists point out to the alarmists, "the climate" is not a thing but a mind-blowing collection of many moving and interrelated parts, the behavior of which is inherently unpredictable and maybe beyond complete comprehension.

That such a complex phenomenon might boil down--sorry about that--to just the CO2 and (noisy) average-global-temperature records dating back, say, a century is something that even we lay people can balk at. As the climate scientist Patrick Frank of Stanford University--who has demonstrated the error-riddled nature of the IPCC's computer models, which cannot even predict the past--wrote in Skeptic magazine, "Earth's climate is warming and no one knows exactly why. But there is no falsifiable scientific basis whatever to assert this warming is caused by human-produced greenhouse gases because current physical theory is too grossly inadequate to establish any cause at all."

Want to hear it from a physicist who was in Barack Obama's energy department?  Here's Steven Koonin, author of the new book Unsettled? What Climate Science Tells Us, What It Doesn't, and Why It Matters: "[T]he science is insufficient to make useful projections about how the climate will change over the coming decades, much less what effect our actions will have on it."

Okay, then how about a leftist physicist? Canadian Denis Rancourt: "There are more unknown and unforeseeable CO2 evolution feedback mechanisms [than] there are climate research institutes on the planet."

This leads to my second proposed addition to the sign. After "Water Is Life" I would suggest adding, "And So Is Carbon Dioxide!" Just as all living things depend on water, so all living things depend on CO2. Plants devour it with gusto, so even we carnivores love CO2 because it feeds the plants that nourish our animal food sources.

To drive the point home: "At the current level of ~400 ppm [parts per million] we still live in a CO2-starved world. Atmospheric levels 15 times greater existed during the Cambrian Period (about 550 million years ago) without known adverse effects." (Emphasis added. Nongovernmental International Panel on Climate Change “Executive Summary,” Climate Change Reconsidered II: Physical Science, 2013. For details see this chart going back 600 million years for details.)

Moreover, "CO2 is a vital nutrient used by plants in photosynthesis. Increasing CO2 in the atmosphere 'greens' the planet and helps feed the growing human population." (See this world map illustrating the global greening that the increasing CO2 seems to be producing, much of it in the Amazon rainforest.) Everyone knows that operators of greenhouses pump in CO2 (not "carbon") to get bigger plants because it isn't a pollutant--it is plant food.

So which office does CO2 go to to get its reputation back?