Technological provincialism

Alan Reynolds

10/12/2006 12:01:00 AM - Alan Reynolds

Many Americans believe President Bush pushed the price of gasoline down to help Republicans in the upcoming election. Congress believes it can ban Americans from gambling on the Internet. And the state of California believes it can change the temperature of the globe through government regulation.

What all such beliefs have in common is technological provincialism -- the naive notion that global commerce can easily be compelled to dance to the tune of national or local politicians.

A recent Washington Post-ABC News poll found that "three out of 10 Americans think the recent fall in gasoline prices is a result of ... White House and Republican Party efforts to influence the November elections."

To believe this, one would have to accuse the International Energy Agency in Paris of being part of this partisan conspiracy, since the IEA has been slashing its estimates of worldwide oil demand. Because natural gas prices have also been falling, one would also have to believe Republicans control that world market -- in which Russia is the biggest player.

These are global markets -- the whole world. Prices of crude oil, gasoline and natural gas did not fall in the United States alone and stay high everyplace else. To imagine the president or Congress could somehow push world prices down at will is to vastly underestimate the size and power of these markets.

Another excellent example of technological provincialism is the "Unlawful Internet Gambling Enforcement Act," which hopes to deter domestic banks and credit card companies from processing payments to and from Internet gamblers. That would apply only if some particular form of gambling is demonstrably illegal under state or federal law, which would be difficult in theory and impossible in practice.

Imagine some prosecutor trying to prove Miss Jones was playing poker on a particular laptop at some specific time and place. A gambler can easily disguise his location by using a foreign proxy, which then appears as the IP address on the Website's server. The location of a gambling Website can likewise be concealed or frequently moved. There are also numerous foreign and domestic financial intermediaries that can and do conceal the source and/or recipient of fund transfers. It is called the "Worldwide" Web for a reason.

Then there are California's quixotic efforts to affect the world's climate. Whatever you think about the causes, consequences or reality of global warming, it is the height of provincial arrogance to imagine the global climate could be perceptibly changed by a single state.

California Gov. Arnold Schwarzenegger nonetheless signed The Global Warming Solutions Act, which states that "on or before January 1, 2011, the Air Resources Board shall adopt greenhouse gas emission limits and measures to achieve the maximum feasible and cost-effective reductions in GHG emissions."

The press gullibly reported the bill's rhetorical hopes and dreams for 2020, rather than the reality that what turns out be "feasible and cost-effective" will not even be estimated for several years.

Business Week noted, revealingly, that "the bill might have died on the floor without the energetic support of L. John Doerr, a partner at Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers." It turns out, coincidentally, that this famed billionaire's firm and its venture capital clients stand to benefit financially from this otherwise inexplicable legislation.

In a truly amazing act of Spitzerian judicial caprice, California's Attorney General Bill Lockyer is suing GM, Ford, Daimler-Chrysler, Toyota, Honda and Nissan for having the audacity to sell vehicles that emit carbon dioxide. He might as well sue California motorists for breathing, since that too emits carbon dioxide.

Hollywood producer Stephen Bing also spent $40 million to push Proposition 87, which would sternly tax any companies still foolish enough to drill for oil in California. In addition to being a terrific gift to Iran and Venezuela, this scheme would also dole out political grants and subsidies for "alternative fuels" and "energy-efficient vehicles" (he happens to have invested in a company producing electric cars, which means they would usually run on coal).

When it comes to greenhouse gases, alternative fuels are usually more problem than solution. Fermentation to produce ethanol increases carbon dioxide emissions, and producing energy-intensive crops to convert into ethanol increases nitrous oxide emissions. The resulting fuel also makes vehicles 30 percent less energy-efficient.

Ethanol subsidies and California air regulations are openly hostile to energy-efficient vehicles. Unlike nearly all Americans, Californians will not even be allowed to buy the extremely clean new diesel cars and fuels -- such as the fast and luxurious E-class diesel Mercedes, which gets 37 miles per gallon on the highway and 27 in the city.

When it comes to locating the sources of global greenhouse gases, regardless of their overall source or impact, the total insignificance California's cars and light trucks is quite simple to calculate.

The International Energy Agency estimates that the United States accounts for 21.8 percent of all carbon dioxide resulting from fuel combustion (rather than from evaporation of the ocean, forest fires, volcanoes, fermentation and breathing). Since California accounts for 13.3 percent of national GDP, the state's share of global carbon dioxide emissions is therefore 2.9 percent.

According to the Environmental Protection Agency, transportation accounts for a third of carbon dioxide emissions, but personal vehicles account for just 60 percent of that -- or 20 percent of the total (half as much as electric power plants).

In other words, all the passenger cars and light trucks in California account for one-half of one percent of global carbon dioxide due to fuel combustion -- a trivial matter in comparison to coal-fired power plants and factories in China.

California's pretentious posturing about changing the world's climate through stern regulation for some and lavish grants for others provides a suspiciously preposterous example of technological provincialism. Perhaps the interests involved are not quite as cosmic and high-minded as some would like us to believe.