CFR Presents

Energy, Security, and Climate

CFR experts examine the science and foreign policy surrounding climate change, energy, and nuclear security.

Confused Thinking on Keystone XL

by Michael Levi Monday, June 6, 2011

The endgame appears nigh for the seemingly endless battle over the Keystone XL pipeline, which would carry about 800,000 barrels of oil sands product from Alberta to the Gulf Coast. I still stand by what I wrote in a 2009 study – the potential climate damages and energy security advantages of oil sands development are both widely overblown – but given the amount of misinformation and confusion circulating, I thought I’d weigh in on one important detail in the debate. Read more »

Oil, Inflation, and Monetary Policy

by Michael Levi Thursday, June 2, 2011

Monetary policy is one of the basic mechanisms through which rising oil prices are believed to hurt the economy: oil prices rise, inflation results, central bankers raise rates, and the economy slows. Over the last decade or two, though, most economists – at least in the United States – have come to believe that policymakers should focus on core inflation, which ignores energy and food prices, rather than headline inflation, which includes them. To the extent that Fed officials focus on core inflation, oil prices rises don’t necessarily spur inflation; consequently, officials don’t raise rates, and the economy doesn’t suffer. Read more »

One Cheer for Chris Christie

by Michael Levi Wednesday, June 1, 2011

People who care about climate change are understandably upset with Chris Christie’s announcement that he’s pulling New Jersey out of the Regional Greeenhouse Gas Initiative (RGGI), the first-of-a-kind cap-and-trade program for carbon dioxide emissions in the northeast. Indeed Governor Christie’s justification for withdrawing is pretty much nonsense: he claims that RGGI was an unacceptable tax on electricity – yet the cost of RGGI permits was far too low to have any meaningful impact on ratepayers. Read more »