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Aug 31, 2017

“In theory, theory and practice are the same. In practice, they are not.”

This quote is attributed to Yogi Berra. I don’t know if Yogi said it or not, but there is a lot wisdom in it. Really big plans or theories rarely turn out as planned. Practice is almost always different from theory.

This is especially true when it comes to big government or political plans. They are designed to do one thing, which they may or may not do, but actually do many other things, usually bad things that were not at all anticipated. The effect occurs often enough it has been given a name: the Law of Unintended Consequences.  Usually, the grander the plan the worse the unintended consequences.

The Kyoto Protocol and its dictated regulations are prime examples of the difference between theory and practice. In 1997, a number of developed countries (not the U.S.) agreed to reduce their carbon dioxide (CO2) emissions by an average of 8% over 15 years to limit the effects of global warming.

The ultimate impact on the earth’s warming resulting from the European Union’s (EU) automotive emission reductions plan was estimated by the United Nations Intergovernmental Panel on Climate Change (IPCC) – the expert on all things relating to climate change – to be less than 4/1000’s of a degree Celsius over the next century (try to measure that).

To comply with Kyoto, the EU developed stringent limits on CO2 emissions for passenger vehicles. The standards, driven by the Kyoto standards, were much more heavily weighted toward greenhouse emissions than other emissions. For example, the EU’s CO2 emission levels are 15% lower than the U.S, but Nitrogen Oxides (NO2) levels are four times higher than the U.S., and Particulate Matter (PM) levels are 22 times higher than the U.S.

Following the dictates of the EU’s political plan, automakers developed a compliance strategy. Daimler and Volkswagen introduced a new design of Turbocharged Diesel Injection (TDI) automobiles that had much quicker acceleration and efficiency. The design was focused on CO2 emissions but not so much on NO2 and PM emissions. To promote the plan to move passenger vehicles from gasoline to diesel, EU politicians increased taxes on gasoline and lowered taxes on diesel.

The plan has worked very well – at least to that measure. The percentage of diesel vehicles in Europe has increased from less than 20% in 1997 to more than 50% today. More than 70% of BMW, Daimler and Volkswagen vehicles produced for the EU market last year were diesel. Since diesel vehicles are slightly more efficient than gasoline vehicles, they emit slightly less CO2. The plan is working.

However, increased NO2 and PM emissions from the obviously dirtier diesel vehicles have significantly polluted Europe’s air. Smog is now a major problem in European cities, much like it was in U.S. cities before we lowered NO2 and PM emission limits on vehicles. Some days Paris looks like Beijing with its smog and haze. Scientists (you cannot deny science) now estimate that thousands of urban dwelling Europeans die annually from lung disease directly resulting from the increased NO2 and PM emissions.

The results have become so disturbing that EU politicians have switched strategies in favor of reducing diesel usage. They have raised taxes on diesel fuels and, in areas, banned diesel vehicles from populated urban areas. Great Britain is currently considering a “Cash for Polluters” plan to pay people to scrap their diesels in favor of gasoline vehicles. I can hardly wait to see how that theory works out.

The plan worked well for diesel car manufacturers for a while. The EU emission regulations effectively functioned as an import tariff favoring the diesel fuel efficiency of the European TDI vehicles. EU automobile manufacturers dominate the European market.

However, it is not working so well in other ways. One of the findings of the Volkswagen emission-cheating scandal is that the TDI vehicles miss the emission limitations on NO2 and PM by about 400%.

It is now obvious to anyone paying attention that the EU’s quest for diesel was beautiful in theory but a disaster in practice. The politicians now find it popular to vilify and punish the automobile manufacturers who were just following the politicians’ plans. The politicians’ new plan is to impose large fines on the automobile manufacturers (the unintended consequence of which will be that retail purchasers of automobiles will bear the bulk of the financial burden) and to bribe and pressure consumers to buy electric vehicles.

The real irony is that neither the devotion to a green agenda nor political competence have been questioned. Why are so many actions being taken in the name of climate change at such a tremendous cost with so little prospect of benefit and the large risks of unintended consequences? The political answer is that the theory was perfect — the problem is with the idiots running the practice. Apparently the wisdom of Yogi-isms don’t apply to climate change.

I hope you have a good month.

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