Wednesday, December 23, 2015

Your Complete Guide to the Climate Debate

At the Paris conference, expect an agreement that is sufficiently vague and noncommittal for all countries to claim victory.

http://www.wsj.com/articles/your-complete-guide-to-the-climate-debate-1448656890
Wind turbines in Texas and shanties in Port-au-Prince, Haiti.ENLARGE
Wind turbines in Texas and shanties in Port-au-Prince, Haiti. PHOTO: JEFFREY MILLER/UNIVERSAL IMAGES GROUP/GETTY IMAGES
In February President Obama said, a little carelessly, that climate change is a greater threat than terrorism. Next week he will be in Paris, a city terrorized yet again by mass murderers, for a summit with other world leaders on climate change, not terrorism. What precisely makes these world leaders so convinced that climate change is a more urgent and massive threat than the incessant rampages of Islamist violence?
It cannot be what is happening to world temperatures, because they have gone up only very slowly, less than half as fast as the scientific consensus predicted in 1990 when the global-warming scare began in earnest. Even with this year’s El NiƱo-boosted warmth threatening to break records, the world is barely half a degree Celsius (0.9 degrees Fahrenheit) warmer than it was about 35 years ago. Also, it is increasingly clear that the planet was significantly warmer than today several times during the past 10,000 years.
Nor can it be the consequences of this recent slight temperature increase that worries world leaders. On a global scale, as scientists keep confirming, there has been no increase in frequency or intensity of storms, floods or droughts, while deaths attributed to such natural disasters have never been fewer, thanks to modern technology and infrastructure. Arctic sea ice has recently melted more in summer than it used to in the 1980s, but Antarctic sea ice has increased, and Antarctica is gaining land-based ice, according to a new study by NASA scientists published in the Journal of Glaciology. Sea level continues its centuries-long slow rise—about a foot a century—with no sign of recent acceleration.
Perhaps it is the predictions that worry the world leaders. Here, we are often told by journalists that the science is “settled” and there is no debate. But scientists disagree: They say there is great uncertainty, and they reflected this uncertainty in their fifth and latest assessment for the United Nations Intergovernmental Panel on Climate Change (IPCC). It projects that temperatures are likely to be anything from 1.5 to 4.5 degrees Celsius (2.7 to 8.1 degrees Fahrenheit) warmer by the latter part of the century—that is, anything from mildly beneficial to significantly harmful.
As for the impact of that future warming, a new study by a leading climate economist,Richard Tol of the University of Sussex, concludes that warming may well bring gains, because carbon dioxide causes crops and wild ecosystems to grow greener and more drought-resistant. In the long run, the negatives may outweigh these benefits, says Mr. Tol, but “the impact of climate change does not significantly deviate from zero until 3.5°C warming.”
Mr. Tol’s study summarizes the effect we are to expect during this century: “The welfare change caused by climate change is equivalent to the welfare change caused by an income change of a few percent. That is, a century of climate change is about as good/bad for welfare as a year of economic growth. Statements that climate change is the biggest problem of humankind are unfounded: We can readily think of bigger problems.” No justification for prioritizing climate change over terrorism there.
The latest science on the “sensitivity” of the world’s temperature to a doubling of carbon-dioxide levels (from 0.03% of the air to 0.06%) is also reassuring. Several recent peer-reviewed studies of climate sensitivity based on actual observations, including one published in 2013 in Nature Geoscience with 14 mainstream IPCC authors, conclude that this key measure is much lower—about 30%-50% lower—than the climate models are generally assuming.
A key study published in the Journal of Climate this year by Bjorn Stevens of the Max Planck Institute for Meteorology in Hamburg, Germany, found that the cooling impact of sulfate emissions has held back global warming less than thought till now, again implying less sensitivity. So the high end of the IPCC range is looking even more implausible in theory and practice. When politicians intone that, despite the slow warming so far, “two degrees” of warming is inevitable and imminent, remember they are using high estimates of climate sensitivity.
Yes, but if there is even a tiny chance of catastrophe, should the world not strain every sinew to head it off? Better to decarbonize the world economy and find it was unnecessary than to continue using fossil fuels and regret it. If decarbonization were easy, then sure, this would make sense. But the experience of the last three decades is that there is no energy technology remotely ready to take over from fossil fuels on the scale needed and at a price the public is willing to pay.
Solar power is cheaper than it was, but even if solar panels were free, the land, infrastructure, maintenance and backup power (for nighttime and cloudy days) would still make it more expensive than gas-fired electricity. Solar provides about 0.5% of the energy generated world-wide. Wind has expanded hugely, but at massive cost, yet still supplies a little more than 1% of all energy generated globally. Nuclear is in slow retreat, and its cost stubbornly refuses to fall. Technological breakthroughs in the production of gas and oil from shale have outpaced the development of low-carbon energy and made it even less competitive.
Meanwhile, there are a billion people with no grid electricity whose lives could be radically improved—and whose ability to cope with the effects of weather and climate change could be greatly enhanced—with the access to the concentrated power of coal, gas or oil that the rich world enjoys. Aid for such projects has already been constrained by Western institutions in the interest of not putting the climate at risk. So climate policy is hurting the poor.
To put it bluntly, climate change and its likely impact are proving slower and less harmful than we feared, while decarbonization of the economy is proving more painful and costly than we hoped. The mood in Paris will be one of furious pessimism among the well-funded NGOs that will attend the summit in large numbers: Decarbonization, on which they have set their hearts, is not happening, and they dare not mention the reassuring news from science lest it threaten their budgets.
Casting around for somebody to blame, they have fastened on foot-dragging fossil-fuel companies and those who make skeptical observations, however well-founded, about the likelihood of dangerous climate change. Scientific skeptics are now routinely censored, or threatened with prosecution. One recent survey by Rasmussen Reports shows that 27% of Democrats in the U.S. are in favor of prosecuting climate skeptics. This is the mentality of religious fanaticism, not scientific debate.
So what will emerge from Paris, when thousands of government officials gather from Nov. 30 to Dec. 11 to agree on a new U.N. climate deal to replace the Kyoto Protocol, which expires in 2020? Expect an agreement that is sufficiently vague and noncommittal for all countries to sign and claim victory. Such an agreement will also have to camouflage deep and unbridgeable divisions while ensuring that all countries are liberated from legally binding targets a la Kyoto.
The political climate is conducive to such an ineffectual agreement. Concerns about the economy, terrorism and international security have been overshadowing the climate agenda for years. The fact that global warming has slowed significantly over the past two decades has reduced public concern and political pressure in most countries. It has also given governments valuable time to kick painful decisions down the road.
The next 10-15 years will show whether the global-warming slowdown continues or whether a strong warming trend terminates the current pause for good. The Paris summit is likely to agree to a review process that reassesses global temperatures and carbon-dioxide emissions every five years. If the climate is less sensitive to carbon-dioxide emissions than climate models assume, the new accord should allow for the possibility of carbon-dioxide pledges to be relaxed in line with empirical observations and better scientific understanding.
Concerned about the loss of industrial competitiveness, the Obama administration is demanding an international transparency-and-review mechanism that can verify whether voluntary pledges are met by all countries. Developing countries, however, oppose any outside body reviewing their energy and industrial activities and carbon-dioxide emissions on the grounds that such efforts would violate their sovereignty.
They are also resisting attempts by the U.S. and the European Union to end the legal distinction (the so-called firewall) between developing and developed nations. China, India and the “Like-Minded Developing Countries” group are countering Western pressure by demanding a legally binding compensation package of $100 billion a year of dedicated climate funds, as promised by President Obama at the U.N. climate conference in Copenhagen in 2009.
However, developing nations are only too aware that the $100 billion per annum funding pledge is never going to materialize, not least because the U.S. Congress would never agree to such an astronomical wealth transfer. This failure to deliver is inevitable, but it will give developing nations the perfect excuse not to comply with their own national pledges.
Both India and China continue to build new coal-fired power stations. China’s coal consumption is growing at 2.6% a year, India’s at 5%, which is why coal was the fastest-growing fossil fuel last year. China has pledged to reduce energy and carbon intensity, but that is another way of saying it will increase energy efficiency—it doesn’t mean reducing use.
For the EU, on the other hand, a voluntary climate agreement would finally allow member states to abandon unilateral decarbonization policies that have seriously undermined Europe’s competitiveness. The EU has offered to cut carbon-dioxide emissions by 40% below the 1990 level by 2030. However, this pledge is conditional on all nations represented at the Paris summit adopting legally binding carbon-emissions targets similar to and as a carry-over of the Kyoto Protocol.
According to the EU’s key demand, the Paris Protocol must deliver “legally binding mitigation commitments that put the world on track toward achieving the below 2°C objective. . . . Mitigation commitments under the Protocol should be equally legally binding on all Parties.” The chances of such an agreement are close to zero. If there are no legally binding carbon targets agreed to in Paris, the EU will be unlikely to make its own conditional pledges legally binding.
Any climate agreement should be flexible enough so that voluntary pledges can be adjusted over the next couple of decades depending on what global temperatures do. The best we can hope for is a toothless agreement that will satisfy most governments yet allow them to pay lip-service to action. In all likelihood, that’s exactly what we can expect to get in Paris.
Mr. Ridley is a columnist for the Times (U.K.) and a member of the House of Lords; he has an interest in coal mining on his family’s land. Mr. Peiser is the director of the Global Warming Policy Forum.

Saturday, October 3, 2015

An Education in Sloganeering

An Education in Sloganeering

The school where I teach is a study in institutional puffery.

E. Gordon Gee, former Ohio State University president.ENLARGE
E. Gordon Gee, former Ohio State University president. PHOTO: ASSOCIATED PRESS
Universities have always engaged in relentless self-promotion. But the relationship between rhetoric and reality has become ever more tenuous, and the line separating honest aspiration from fabrication fainter.
The Ohio State University, where I teach, is a particularly dramatic example of this devolution. Not that it is alone—since its claims to uniqueness are based on imitating others.
In the late 1990s and early 2000s, the university’s slogan, “Do Something Big,” morphed into “Do Something Great.” The urging of the former was deemed too ambiguous.
“Vision 2020: Access, affordability and excellence” is the tagline of the new president, Michael Drake. (He is an ophthalmologist.) This translates into freezing in-state tuition, increasing efforts to privatize major assets, offering small grants to undergraduates, and creating “economies and efficiencies.” Those most often mentioned are purchasing toilet paper from one vendor and doing color-copying double-sided. Not mentioned are substantial staffing reductions, nor the overabundant and overpaid administrators whose reduction is promised but not realized. Staff and faculty salary increases continue at lower than national and peer-institution averages.
The Medical Center’s cancer hospital seeks “a cancer-free world”—a biological impossibility, as cellular mutations are a regular part of the natural world. The university’s chief wellness officer, aka the dean of College of Nursing, wants Ohio State to become the “healthiest university”—whatever that means. The Department of Human Resources changed its name to Talent, Culture, and Human Resources. Nothing else changed. Student Life is a host of slogans, from Financial Wellness to Creating the Extraordinary Student Experience.
Especially egregious is the linked promotion of “One University” and “From Excellence to Eminence.” These slogans are associated with two-time former university president E. Gordon Gee, whose retirement was mandated by the Board of Trustees in 2013.
The main goal was to create “One Ohio State University”—a single-minded institution with all departments, offices, faculty and staff focused on mutual success. Mr. Gee wanted to “create the environment and the culture which allows all of these folks who have this massive amount of intellectual acumen to connect together to create new ideas, new opportunities, new ways for thinking about the world.”
None of that happened. Mr. Gee left office having initiated little and the rhetoric evaporated, surviving occasionally in empty phrases on the Student Life and Senn-Delaney ad-agency websites.
Ohio State remains one of the most fragmented and divided large universities in the U.S. Its many fine resources and talents are rarely brought together. If anything, these problems have worsened in recent years. Administrative numbers grow, with salaries to match. Bureaucracy worsens. The resources necessary to support teaching and research, and advance the university, diminish.
The real bottom line: There must be substantial truth in advertising. Few other institutions carry this responsibility so clearly. Without it, the contradictions to the mission of the university—however defined—are just too great.
Oh, yes, the beleaguered Arts and Sciences College truthfully promotes “Donuts with the Dean,” in limited quantities, of course.
Mr. Graff is professor of English and history at Ohio State University.

Sunday, September 20, 2015

Insurers Win Big Health-Rate Increases

  wrote in the August 27 WSJ:


Some state regulators say new costs justify hefty increases under the  Affordable Care Act 

Insurers demonstrated to several state insurance commissions that hefty increases for 2016 are needed to cover huge costs of sick people who signed up for individual policies in the first two years of the Affordable Care Act.ENLARGE
Insurers demonstrated to several state insurance commissions that hefty increases for 2016 are needed to cover huge costs of sick people who signed up for individual policies in the first two years of the Affordable Care Act. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
At a July town hall in Nashville, Tenn., President Barack Obamaplayed down fears of a spike in health insurance premiums in his signature health law’s third year.
“My expectation is that they’ll come in significantly lower than what’s being requested,” he said, saying Tennesseans had to work to ensure the state’s insurance commissioner “does their job in not just passively reviewing the rates, but really asking, ‘OK, what is it that you are looking for here? Why would you need very high premiums?’”
That commissioner, Julie Mix McPeak, answered on Friday by greenlighting the full 36.3% increase sought by the biggest health plan in the state, BlueCross BlueShield of Tennessee. She said the insurer demonstrated the hefty increase for 2016 was needed to cover higher-than-expected claims from sick people who signed up for individual policies in the first two years of the Affordable Care Act.
Several regulators around the country agree with her, and have approved all or most of the big premium increases sought by the largest health plans in their states for the new sign-up season that begins Nov. 1.
Not all states have made their rate decisions, and some have approved relatively modest increases. A number of the states with lower average increases this year had higher rates to begin with. Some also fared better with enrollment under the law. Insurance premiums vary from state to state, for a number of reasons including regional disparities in the costs of care.
Still, the upsurge is likely to be a big talking point not only during the three-month enrollment season, but through the 2016 campaigns, where GOP opponents of the law are expected to use it as a defining issue against their Democratic rivals.
The law provides for government subsidies in the form of tax credits for some consumers who buy insurance on their own because they don’t have coverage through a job or government program such as Medicare. Those subsidies will blunt the impact of price increases for individuals who get them, but the tab is picked up by the federal government.
White House spokeswoman Katie Hillsaid rate review processes, which were beefed up under the law, had helped lower proposed premiums “in a number of states.” She also said that under the health law, it was easier for customers to switch to a new insurer.
“Last year, more than half of re-enrolling customers on HealthCare.gov actively shopped and selected a new plan, something that wasn’t possible for many consumers prior to the ACA due to the risk of being charged a higher premium or denied coverage entirely due to a pre-existing condition,” she said.
Tennessee’s Ms. McPeak said she’s required to protect state residents by blocking unjustified increases but also guaranteeing that health plans stay financially sound. “Politics, and any opposition to the ACA, doesn’t have anything to do with it,” she said. “Do I wish they were lower? Absolutely, because I know what it means to consumers.”
Kentucky Insurance Commissioner Sharon Clark approved the 25.1% increase requested by the Kentucky Health Cooperative, the largest insurer on the state’s insurance exchange. Kentucky has taken a more supportive stance toward the health law, including operating its own insurance exchange rather than using the federal government’s HealthCare.gov.
“We’re lucky” by comparison to Tennessee, Ms. Clark said.
Oregon’s Laura Cali allowed an average 25.6% increase for Moda Health Plan Inc., the biggest plan on that state’s exchange. In Ohio, Lt. Gov. Mary Taylor approved a 14.5% increase from Medical Mutual. In Michigan, BlueCross BlueShield won approval for the average 11.4% increase from insurance director Patrick McPharlin.
In Idaho, insurance director Dean Cameron said that an average 23% increase by Blue Cross of Idaho Health Service Inc., was disappointing but “not unreasonable” and that he didn’t have the power to stop it.
The 2010 federal health law overhauled the way insurance is priced and sold, requiring companies to allow anyone to buy policies, regardless of their medical history and with only limited variation in premiums based on their age.
ENLARGE
Many of the most popular plans in the country offered low rates for the first and second year of the law’s rollout, unsure what to expect but eager to snap up the new business. That was especially true in Tennessee, which had some of the lowest premiums in the U.S. initially.
Now, insurers have found that business has been more costly than expected. Some have said they’ve incurred steep losses. The American Academy of Actuaries also said in a recent paper that some programs designed to cushion insurers against high-risk enrollees are ending.
Some people will be able to switch plans and pay a modest increase from 2015, according to an analysis of proposed rates earlier this year by the consulting firm Avalere Health LLC.
For the Obama administration, that means a stepped-up campaign this fall to persuade people to return to HealthCare.gov and shop around in the coming open enrollment season.
The administration said late Tuesday it would automatically renew the coverage of people who signed up through the site last year and don’t come back to it by Dec. 15 this year.
The administration said that for the current year, about half of the site’s users returned. Of those, about half switched insurance providers and half opted to stay with the one they had.
States that were able to keep rate increases down breathed a sigh of relief this week. In Indiana, Anthem Inc. had asked for, and was granted, a 3.8% average increase. In Virginia, Anthem reduced an initial request of 13.2% to 8.6%. In Arkansas, BlueCross and BlueShield was approved for an average increase of 7.15%.
Corrections & Amplifications
Some insurers say they have incurred steep losses from sicker than expected enrollees. An earlier version of this story incorrectly said an American Academy of Actuaries paper made that conclusion.
Write to Louise Radnofsky at louise.radnofsky@wsj.com and Stephanie Armour at stephanie.armour@wsj.com

Highmark Is Latest to Trim Offerings Under Health Law

ANNA WILDE MATHEW wrote in the September 3rd WSJ:


Insurer retrenches amid losses, focusing on plans that have more limited choices of providers  

Highmark Health said it would reduce its range of offerings on the Affordable Care Act marketplaces.ENLARGE
Highmark Health said it would reduce its range of offerings on the Affordable Care Act marketplaces. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
Highmark Health said it would reduce its range of offerings on the Affordable Care Act marketplaces, becoming the latest insurer to retrench amid steep financial losses.
The big Pittsburgh-based nonprofit company said it would continue to sell plans related to the federal health overhaul in all of the areas it currently serves, which span Pennsylvania, Delaware and West Virginia. But “we will have less products in the market overall,” said David L. Holmberg, the company’s chief executive, who said Highmark had lost $318 million on its individual health-law plans in the first six months of 2015, after rolling out a very broad array of options that had attracted many consumers with chronic conditions who required costly care.
He said the company was still working on the details of its offerings, but it expects a “mix shift” toward plans that offer more limited choices of health-care providers. Such plans typically have lower premiums than versions with broader networks. About Highmark’s offerings for next year, he said, “Is there going to be a trend toward more narrow networks? Yes.”
Highmark’s announcement follows similar moves by some other insurers grappling with the financial fallout of their exchange business, which has also prompted some, including Highmark, to seek double-digit rate increases. Highmark is a substantial player in the individual insurance market related to the health law, with around 380,000 enrollees.
Blue Cross and Blue Shield of Texas, a unit of Health Care Service Corp., said it would no longer sell preferred-provider-organization plans to individual consumers next year. In a notice sent in July to insurance brokers, the company said that about 367,000 people were enrolled in the plans that were being withdrawn. The insurer also said it had paid out more than $400 million more in claims than it collected in premiums on its individual business in 2014. “Losses that high are unsustainable,” the note said.
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Analysts said it is likely that the array of insurers offering products on the exchanges will remain robust next year, though the full picture isn’t yet clear. A Kaiser Family Foundation analysis of 10 states and the District of Columbia found that the number of insurers participating was flat or up in nine of them. “In general, the number of insurers available to consumers is as large if not larger” for next year, said Larry Levitt, senior vice president of the foundation. But some insurers are “narrowing the number of options they offer,” he said.
A spokesman for the Department of Health and Human Services said “consumers will find a range of quality, affordable coverage options on the Marketplace in 2016.”
Analysts said that the changes are the latest sign that the health-law insurance markets aren’t yet stable, with insurers still shifting their strategy and pricing. One way for insurers to manage costs is to offer plans with tighter controls over the health services members use—particularly designs that can limit consumers’ access to higher-cost health-care providers, or to hospitals and doctors outside an insurer’s network.
“The managed-care plan has more control over where the member goes,” said Deep Banerjee, an analyst with Standard & Poor’s Ratings Services. A majority of the insurers that Standard & Poor’s rates lost money on their health-law exchange business, he said. For large insurers, the plans are only a relatively small share of overall business.
In North Carolina, where Blue Cross and Blue Shield of North Carolina said the operating loss on its health-law business in its first year was $123 million, the insurer has said it would no longer offer its broadest-network plans in three of the state’s most populous cities, Charlotte, Raleigh and Durham.
Going further, Blue Cross and Blue Shield of New Mexico, also a unit of Health Care Service Corp., recently said it wouldn’t offer health plans through the state’s health-law exchange next year, after a New Mexico regulator rejected its request for a rate increase that averaged 51.6%. The company said in a statement on its website that it had lost $19.2 million last year on the 35,000 people enrolled in its individual plans. It will continue to sell certain plans to individuals in the state, though off the exchange.
Lisa Reid, an official at the New Mexico regulator, said the company hadn’t shown evidence that justified its requested increase. New Mexico’s exchange will still have four insurers, with “a lot of good choices for people,” she said.
The cost pressures on insurers tied to the ACA may fall hardest on smaller insurers. The Iowa insurance regulator said in January that it would shut down CoOportunity Health, one of the 23 nonprofit cooperative insurers launched by the Affordable Care Act. At least two other co-ops, in Nevada and Louisiana, have said they won’t offer plans next year.
Write to Anna Wilde Mathews at anna.mathews@wsj.com