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BACKGROUNDER Key Points Winning Without Fighting: The Chinese PWarfare Challenge Dean Cheng No. 2821 | JULY 11, 2013 Over the past decade, the Peo- ple’s Republic of China has exhib- ited growing interest in waging asymmetrical warfare. To this end, the PRC released “political work regulations” for the People’s Liberation Army addressing the importance of waging “the three warfares”: pub- lic opinion warfare, psychological warfare, and legal warfare. The “three warfares” repre- sent the PRC’s commitment to expanding potential areas of conflict from the purely military (i.e., involving the direct or indi- rect use of military forces) to the more political. Such expansion will be supported by manipulation of an enemy’s leadership, including through intimidation and coercion, alien- ation, and deception. To avoid being psychologically outmaneuvered by a PRC intent on winning without firing a shot, the U.S. must strengthen its own psychological warfare capabili- ties, including strategic commu- nications, public diplomacy, and media outreach capabilities, as well as dedicated psychological operations units. Abstract Beijing hopes to win future conflicts without firing a shot. How? By us- ing psychological warfare to manipulate both a nation’s leaders and its populace—affecting the thought processes and cognitive frame- works of allies and opponents alike. Indeed, the PRC’s psychological warfare operations are already underway despite the fact that there is no active conflict. It is therefore essential that the United States coun- ter such psychological operations now while preparing to use its own arsenal of political warfare weapons should a conflict ever arise. O ne of the elements distinguishing the Chinese People’s Libera- tion Army (PLA) from many of its counterparts is its contin- ued role as a Party army. The PLA is, first and foremost, the armed wing of the Chinese Communist Party (CCP). This distinction both obligates the PLA to help maintain the CCP’s grip on power and gives it an additional set of tools with which to defend the CCP and the Chinese state. At the moment, the PLA is not only planning for operations on the physical battlefield; it is also preparing to conduct “political warfare,” including what is termed the “three warfares”: public opinion warfare, legal warfare, and psychological warfare. Psychological warfare is in some ways the most far-reaching of the “three warfares.” It involves the application of specialized information and media in accordance with a strategic goal and in support of political and military objectives. 1 Such efforts are aimed at a variety of potential audiences and usually involve operational missions against an opponent’s psychology and cognitive capacities. This paper, in its entirety, can be found at http://report.heritage.org/bg2821 Produced by the Asian Studies Center The Heritage Foundation 214 Massachusetts Avenue, NE Washington, DC 20002 (202) 546-4400 | heritage.org Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

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  • BACKGROUNDER

    Key Points

    Winning Without Fighting: The Chinese PWarfare ChallengeDean Cheng

    No. 2821 | July 11, 2013

    Over the past decade, the Peo-ples Republic of China has exhib-ited growing interest in waging asymmetrical warfare.

    To this end, the PRC released political work regulations for the Peoples Liberation Army addressing the importance of waging the three warfares: pub-lic opinion warfare, psychological warfare, and legal warfare.

    The three warfares repre-sent the PRCs commitment to expanding potential areas of conflict from the purely military (i.e., involving the direct or indi-rect use of military forces) to the more political.

    Such expansion will be supported by manipulation of an enemys leadership, including through intimidation and coercion, alien-ation, and deception.

    To avoid being psychologically outmaneuvered by a PRC intent on winning without firing a shot, the U.S. must strengthen its own psychological warfare capabili-ties, including strategic commu-nications, public diplomacy, and media outreach capabilities, as well as dedicated psychological operations units.

    AbstractBeijing hopes to win future conflicts without firing a shot. How? By us-ing psychological warfare to manipulate both a nations leaders and its populaceaffecting the thought processes and cognitive frame-works of allies and opponents alike. Indeed, the PRCs psychological warfare operations are already underway despite the fact that there is no active conflict. It is therefore essential that the United States coun-ter such psychological operations now while preparing to use its own arsenal of political warfare weapons should a conflict ever arise.

    One of the elements distinguishing the Chinese Peoples libera-tion Army (PlA) from many of its counterparts is its contin-ued role as a Party army. The PlA is, first and foremost, the armed wing of the Chinese Communist Party (CCP). This distinction both obligates the PlA to help maintain the CCPs grip on power and gives it an additional set of tools with which to defend the CCP and the Chinese state. At the moment, the PlA is not only planning for operations on the physical battlefield; it is also preparing to conduct

    political warfare, including what is termed the three warfares: public opinion warfare, legal warfare, and psychological warfare.

    Psychological warfare is in some ways the most far-reaching of the three warfares. It involves the application of specialized information and media in accordance with a strategic goal and in support of political and military objectives.1 Such efforts are aimed at a variety of potential audiences and usually involve operational missions against an opponents psychology and cognitive capacities.

    This paper, in its entirety, can be found at http://report.heritage.org/bg2821Produced by the Asian Studies CenterThe Heritage Foundation214 Massachusetts Avenue, NEWashington, DC 20002(202) 546-4400 | heritage.org

    Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

  • BACKGROUNDER

    Key Points

    Egypt: A Way Forward After a Step BackJames Jay Carafano, PhD, and James Phillips

    No. 2824 | July 11, 2013

    Egypts army was justified in ousting President Mohamed Morsi, whose increasingly authoritarian rule was leading Egypt into a civil war.

    The army, however, is sitting on a volcano and knows it.

    The U.S. must recognize that Egypt is much closer to becom-ing a failed state or economic basket case than it is to becom-ing a genuine democracy.

    To salvage the increasingly diffi-cult situation in Egypt, the United States should press the Egyptian military to lay the groundwork for a return to civilian rule as soon as possible.

    Washington should attach tighter strings to U.S. aid and recalibrate the aid program to focus on fighting terrorism and preventing food shortagesthe chief threats to Egypts future.

    No amount of aid from Wash-ington can resolve Egypts deep economic problems, but the U.S. can encourage Cairo to undertake free-market eco-nomic reforms to rejuvenate its economy.

    Egypts army recently ousted President Mohamed Morsi, just as it removed Hosni Mubarak in 2011, to prevent growing civil disor-der from undermining the power of the state and its own privileges within the state. The intervention was widely applauded by opposi-tion political parties and the overwhelming majority of the millions of protesters who demanded that Morsi step down.

    By taking steps to preserve public order, the military could help to salvage Egypts chances of making the difficult transition to a sta-ble democracy. Clearly, Egypt was headed for a civil war as a result of a surging rebellion against Morsis increasingly authoritarian rule.

    To salvage the increasingly difficult situation in Egypt, the united States should press the Egyptian military to lay the ground-work for a return to civilian rule as soon as possible, attach tighter strings to u.S. aid, and recalibrate the u.S. aid program to focus on fighting terrorism and preventing food shortagesthe chief threats to Egypts future.

    Morsis Threat to DemocracyPresident Mohamed Morsi was his own worst enemy. He

    ruled in a secretive, authoritarian, and exclusionary manner that derailed Egypts democratic experiment and alienated far too many Egyptians, even some of his former supporters. During his year in office, he focused more on maximizing his own power and that of the Muslim Brotherhood than on addressing Egypts worsening economic, social, and political problems. When chal-lenged, he arrogantly ignored, marginalized, and demonized

    This paper, in its entirety, can be found at http://report.heritage.org/bg2824Produced by the Douglas and Sarah Allison Center for Foreign Policy StudiesThe Heritage Foundation214 Massachusetts Avenue, NEWashington, DC 20002(202) 546-4400 | heritage.org

    Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

  • 2BACKGROUNDER | NO. 2824July 11, 2013

    opposition political parties, which he linked to for-eign conspiracies.

    under these conditions, Egypts army justifiably intervened to restore order in support of the majority of Egyptians who were rebelling against an Islamist authoritarian regime. On July 3, Egyptian Defense Minister General Abdel-Fattah el-Sissi announced that Morsi, who had failed to meet the demands of the people, was relieved of his duties and that the Islamist-written constitution was suspended.

    unlike Gamal Abdel Nassers coup in 1952 or the 2011 coup that brought down Hosni Mubarak, this time the military sought the endorsement of reli-gious leaders, political leaders, and youth activists, many of whom shared the stage when General el-Sis-si announced Morsis ouster in a televised statement.

    During his year in office, Mohamed Morsi focused more on maximizing his own power and that of the Muslim Brotherhood than on addressing Egypts worsening economic, social, and political problems.

    The next day, the military authorities announced that Adly Mansour, chief justice of the Supreme Constitutional Court, had been sworn in as interim president. Mansour is a little-known but respect-ed low-key technocrat. As a judge, he could be well suited to steering the writing of a new constitu-tion to replace the Islamist document that Morsi had rammed through in December. mr. Mansour pledged to continue the democratic reforms of the 2011 revolution so that we stop producing tyrants and said that new elections were the only way for-ward, although he gave no indication of when they would be held.

    President Mansour initially chose former oppo-sition leader Mohamed el-Baradei as prime min-ister of the interim government on July 6, but this appointment was later rescinded under pressure from the Nour Party, one of the few Islamist groups that supported the coup. Baradei, a secular liberal who led the National Salvation Front, a coalition of

    leftist and liberal parties, frequently clashed with the united States over the Iran nuclear issue when he led the International Atomic Energy Agency. It is expected that President Mansour will soon announce the formation of a new government with a cabinet composed of technocrats and caretakers.

    Morsi has been detained at an undisclosed loca-tion. The authorities have sought to arrest more than 200 top leaders of the Muslim Brotherhood and other Islamist organizations on charges of inciting their followers to kill anti-Morsi demonstrators, but Islamist leaders have vowed not to give up without a fight.

    Mohammed Badie, the supreme leader of the Muslim Brotherhood, has called for continued pro-tests until Morsi is reinstated as president. Speaking at Cairos Rabaa Mosque during a demonstration on

    Rejection Friday, Badie warned, We are all will-ing to sacrifice our necks and our souls for him.1 Tens of thousands of Morsi supporters poured out of mosques on Friday to protest Morsis ouster. Pro-Morsi demonstrations were quickly countered by anti-Morsi protests in a highly charged atmosphere that degenerated into widespread clashes, leav-ing at least 36 dead and more than 1,000 injured. On Monday, at least 51 of Morsis supporters were killed when troops responded to an attack on the Republican Guard headquarters where Morsi was last seen before his ouster.

    Egypts mushrooming political violence will be hard to control. Even in the unlikely event that the Muslim Brotherhood reins in its members as part of some deal to allow it to compete in future elec-tions, more radical Islamists are sure to push back violently.

    Islamist militants in the northern Sinai, a hot-bed of Islamist extremism, launched coordinated attacks against police facilities and an airport at El Arish, the provincial capital. Ansar al-Sharia in Egypt (Supporters of Islamic law), a new Islamist group, announced its formation on an online forum for militants in the Sinai region and proclaimed that it will gather arms and train recruits for a jihad against Egypts new government. Similar organiza-tions in libya, yemen, and Tunisia have served as front groups for attracting recruits to al-Qaedalike terrorist organizations.

    1. Matt Bradley, Tamer El-Ghobashy, and Reem Abdellatif, Post-Coup Violence Spreads in Egypt, The Wall Street Journal, July 6, 2013, http://online.wsj.com/article/SB10001424127887323899704578587131736732940.html (accessed July 8, 2013).

  • 3BACKGROUNDER | NO. 2824July 11, 2013

    Islamist militants will likely soon expand their attacks beyond the Sinai region to include army, police, and government facilities; anti-Morsi political groups; symbols of the anti-Morsi revolution such as Tahrir Square; and symbols of foreign conspiracies such as the u.S. embassy, American companies, and other Western companies. Egypts Coptic Christian minority, about 10 percent of Egypts more than 80 million people, will likely become even more of a lightning rod for terrorist attacks. Islamists charge that Egypts ancient Christian community was com-plicit in inciting protests to bring down Morsi. There will likely be a surge in anti-Christian attacks, par-ticularly in southern Egypt, a focal point for sectar-ian violence.

    The splintered Islamist movement is by no means unified in support of Morsi. The Nour Party, a Salafist movement that favors the immediate imposition of Sharia law and resented Morsis high-handed efforts to monopolize political power, joined non-Islamist opposition parties in pushing for early elections. Other Islamists will likely increasingly criticize and ostracize the Nour leaders, who supported the mili-tary intervention.

    An outburst of violence by Islamist extrem-ists could open a dangerous new chapter in Egypts unfinished revolution. left unchecked, it could devolve into an even bloodier version of Algerias civil war, which has consumed more than 100,000 lives since the Algerian Army stepped in to avert an Islamist election victory in 1991.

    Sitting on a VolcanoEgypts army is sitting on a volcano and knows

    it. Egypt has fallen into dire economic straits, and political stability will likely be elusive until the countrys worsening economic situation is reversed. Nearly one-quarter of Egypts workers are unem-ployed, and the figure is much higher for young men, who form the shock troops for street protests. Egypts economic woes have created a huge reser-voir of unemployed youth who are vulnerable to the siren call of radical ideologies, particularly Islamist extremism.

    The political turmoil and rising crime rates of the past two years have severely hurt tourism, which formerly generated the bulk of Egypts foreign cur-rency earnings and provided jobs to about one of every seven workers. Morsi further sabotaged the tourism industry by appointing as governor of luxor

    Province a member of the Islamist terrorist group that massacred 62 tourists in luxor in 1997not exactly a reassuring signal for nervous tourists. Islamist extremists will likely target tourists once again to undermine the new government.

    The army cannot stabilize Egypt without resolving Egypts worsening economic problems, which will require considerable American and international support.

    Egypt is imploding in a bitter political struggle fought amid economic collapse, social turmoil, surg-ing crime rates, widespread unemployment, falling standards of living, and rising sectarian tensions. The imminent bankruptcy of Egypts state-domi-nated economy could quickly lead to catastrophic food shortages, bread riots, labor strikes, and grow-ing political polarization. Foreign currency reserves are nearly exhausted, which will make it difficult to pay for wheat imports, which provide nearly half of Egypts food consumption.

    The army needs to put Egypts house in order quickly and then get out of the way. It inevitably will lose popular support the longer it rules, as it did between Mubaraks fall in February 2011 and Morsis purge of top army leaders in August 2012. The army can only do so much to repair Egypts dys-functional political system. Moreover, it cannot sta-bilize Egypt without resolving Egypts worsening economic problems, which will require considerable American and international support.

    U.S. Help Needed in the Struggle for Freedom

    Egypt, the largest Arab country, is a bellwether for the Arab Middle East. The united States has a national interest in stabilizing Egypt, preventing the rise of an Islamist totalitarian state, and pre-venting the eruption of a full-blown civil war on the scale of Algerias in the heart of the Arab world. Washington also has a humanitarian interest in pre-venting food shortages if Egypts social fabric con-tinues to unravel.

    The Obama Administration has been asleep at the switch for much of the past two years. It eagerly

  • ISSUE BRIEFCost of a Climate Policy: The Economic Impact of Obamas Climate Action PlanDavid W. Kreutzer, PhD, Nicolas D. Loris, and Kevin D. Dayaratna

    No. 3978 | JuNe 27, 2013

    President Obama recently released his Climate Action Plan, which is a continuation of the costly, ineffective policies from his first four years in office: Solyndra-style loan guarantees, nice-sounding but too expensive efficiency mandates, and his war on coal. It is this war on coal that would prove the most costly, with hundreds of thousands of lost jobs and $1.47 trillion of lost national income by 2030.

    Bankrupting Coal Hurts American Families. When Senator and presidential candidate Barack Obama pushed his cap-and-trade plan in 2008, he said that if someone wants to build a coal-powered plant, they can. Its just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas thats being emitted.1

    Congress rejected his and other cap-and-trade plans, but in his recent speech on climate change, President Obama vowed to go around Congress to reduce greenhouse gas emissions. In case anyone thinks the Administration has since backed off from the anti-coal agenda, Obama climate advisor Daniel Schrag just this week said that a war on coal is exactly whats needed.2

    In a speech on June 25, President Obama called on the environmental Protection Agency (ePA) to

    reduce carbon dioxide emissions from new and exist-ing power plants, which would adversely affect coal-fired plants the most. These regulations are part of a broader effort from the President to significantly reduce coal as an affordable, reliable energy sourcethe effect of which is to drive up prices for American families and businesses. The Heritage Foundation modeled the effects of significantly reducing coal-fired plants in America and found devastating eco-nomic effects.

    Regulations Pile On. With 497 billion tons of recoverable coal in the united Statesenough to provide electricity for 500 years at current con-sumption rates3coal has the potential to be an important resource long into the future. The ePAs constant attacks on coal threaten to close off access to this dependable energy source.

    In March 2012, the ePA proposed a rule that would prohibit new power plants from emitting more than 1,000 pounds of carbon dioxide per mega-watt of electricity generated. Without the addition of carbon capture and sequestration, a prohibitive-ly costly and technologically challenging require-ment,4 the regulation would effectively ban the con-struction of new coal-fired plants.5 Whether the final rule reflects the proposed rule remains to be seen.

    The Presidents recent announcement also threatens existing plants and would adversely affect the more than 1,100 coal-fired generators at near-ly 600 plant locations that generate 40 percent of Americas affordable, reliable energy.6

    Last year, the ePA finalized new mercury and air toxics standards that will force utilities to use maxi-mum achievable control technology standards to reduce mercury emissions and other hazardous air

    This paper, in its entirety, can be found at http://report.heritage.org/ib3978Produced by the Center for Data AnalysisThe Heritage Foundation214 Massachusetts Avenue, NEWashington, DC 20002(202) 546-4400 | heritage.org

    Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

  • BACKGROUNDER

    Key Points

    Egypt: A Way Forward After a Step BackJames Jay Carafano, PhD, and James Phillips

    No. 2824 | July 11, 2013

    Egypts army was justified in ousting President Mohamed Morsi, whose increasingly authoritarian rule was leading Egypt into a civil war.

    The army, however, is sitting on a volcano and knows it.

    The U.S. must recognize that Egypt is much closer to becom-ing a failed state or economic basket case than it is to becom-ing a genuine democracy.

    To salvage the increasingly diffi-cult situation in Egypt, the United States should press the Egyptian military to lay the groundwork for a return to civilian rule as soon as possible.

    Washington should attach tighter strings to U.S. aid and recalibrate the aid program to focus on fighting terrorism and preventing food shortagesthe chief threats to Egypts future.

    No amount of aid from Wash-ington can resolve Egypts deep economic problems, but the U.S. can encourage Cairo to undertake free-market eco-nomic reforms to rejuvenate its economy.

    Egypts army recently ousted President Mohamed Morsi, just as it removed Hosni Mubarak in 2011, to prevent growing civil disor-der from undermining the power of the state and its own privileges within the state. The intervention was widely applauded by opposi-tion political parties and the overwhelming majority of the millions of protesters who demanded that Morsi step down.

    By taking steps to preserve public order, the military could help to salvage Egypts chances of making the difficult transition to a sta-ble democracy. Clearly, Egypt was headed for a civil war as a result of a surging rebellion against Morsis increasingly authoritarian rule.

    To salvage the increasingly difficult situation in Egypt, the united States should press the Egyptian military to lay the ground-work for a return to civilian rule as soon as possible, attach tighter strings to u.S. aid, and recalibrate the u.S. aid program to focus on fighting terrorism and preventing food shortagesthe chief threats to Egypts future.

    Morsis Threat to DemocracyPresident Mohamed Morsi was his own worst enemy. He

    ruled in a secretive, authoritarian, and exclusionary manner that derailed Egypts democratic experiment and alienated far too many Egyptians, even some of his former supporters. During his year in office, he focused more on maximizing his own power and that of the Muslim Brotherhood than on addressing Egypts worsening economic, social, and political problems. When chal-lenged, he arrogantly ignored, marginalized, and demonized

    This paper, in its entirety, can be found at http://report.heritage.org/bg2824Produced by the Douglas and Sarah Allison Center for Foreign Policy StudiesThe Heritage Foundation214 Massachusetts Avenue, NEWashington, DC 20002(202) 546-4400 | heritage.org

    Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

  • BACKGROUNDER

    Key Points

    Winning Without Fighting: The Chinese Psychological Warfare ChallengeDean Cheng

    No. 2821 | July 11, 2013

    Over the past decade, the Peo-ples Republic of China has exhib-ited growing interest in waging asymmetrical warfare.

    To this end, the PRC released political work regulations for the Peoples Liberation Army addressing the importance of waging the three warfares: pub-lic opinion warfare, psychological warfare, and legal warfare.

    The three warfares repre-sent the PRCs commitment to expanding potential areas of conflict from the purely military (i.e., involving the direct or indi-rect use of military forces) to the more political.

    Such expansion will be supported by manipulation of an enemys leadership, including through intimidation and coercion, alien-ation, and deception.

    To avoid being psychologically outmaneuvered by a PRC intent on winning without firing a shot, the U.S. must strengthen its own psychological warfare capabili-ties, including strategic commu-nications, public diplomacy, and media outreach capabilities, as well as dedicated psychological operations units.

    AbstractBeijing hopes to win future conflicts without firing a shot. How? By us-ing psychological warfare to manipulate both a nations leaders and its populaceaffecting the thought processes and cognitive frame-works of allies and opponents alike. Indeed, the PRCs psychological warfare operations are already underway despite the fact that there is no active conflict. It is therefore essential that the United States coun-ter such psychological operations now while preparing to use its own arsenal of political warfare weapons should a conflict ever arise.

    One of the elements distinguishing the Chinese Peoples libera-tion Army (PlA) from many of its counterparts is its contin-ued role as a Party army. The PlA is, first and foremost, the armed wing of the Chinese Communist Party (CCP). This distinction both obligates the PlA to help maintain the CCPs grip on power and gives it an additional set of tools with which to defend the CCP and the Chinese state. At the moment, the PlA is not only planning for operations on the physical battlefield; it is also preparing to conduct

    political warfare, including what is termed the three warfares: public opinion warfare, legal warfare, and psychological warfare.

    Psychological warfare is in some ways the most far-reaching of the three warfares. It involves the application of specialized information and media in accordance with a strategic goal and in support of political and military objectives.1 Such efforts are aimed at a variety of potential audiences and usually involve operational missions against an opponents psychology and cognitive capacities.

    This paper, in its entirety, can be found at http://report.heritage.org/bg2821Produced by the Asian Studies CenterThe Heritage Foundation214 Massachusetts Avenue, NEWashington, DC 20002(202) 546-4400 | heritage.org

    Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

  • 3BACKGROUNDER | NO. 2824July 11, 2013

    Islamist militants will likely soon expand their attacks beyond the Sinai region to include army, police, and government facilities; anti-Morsi political groups; symbols of the anti-Morsi revolution such as Tahrir Square; and symbols of foreign conspiracies such as the u.S. embassy, American companies, and other Western companies. Egypts Coptic Christian minority, about 10 percent of Egypts more than 80 million people, will likely become even more of a lightning rod for terrorist attacks. Islamists charge that Egypts ancient Christian community was com-plicit in inciting protests to bring down Morsi. There will likely be a surge in anti-Christian attacks, par-ticularly in southern Egypt, a focal point for sectar-ian violence.

    The splintered Islamist movement is by no means unified in support of Morsi. The Nour Party, a Salafist movement that favors the immediate imposition of Sharia law and resented Morsis high-handed efforts to monopolize political power, joined non-Islamist opposition parties in pushing for early elections. Other Islamists will likely increasingly criticize and ostracize the Nour leaders, who supported the mili-tary intervention.

    An outburst of violence by Islamist extrem-ists could open a dangerous new chapter in Egypts unfinished revolution. left unchecked, it could devolve into an even bloodier version of Algerias civil war, which has consumed more than 100,000 lives since the Algerian Army stepped in to avert an Islamist election victory in 1991.

    Sitting on a VolcanoEgypts army is sitting on a volcano and knows

    it. Egypt has fallen into dire economic straits, and political stability will likely be elusive until the countrys worsening economic situation is reversed. Nearly one-quarter of Egypts workers are unem-ployed, and the figure is much higher for young men, who form the shock troops for street protests. Egypts economic woes have created a huge reser-voir of unemployed youth who are vulnerable to the siren call of radical ideologies, particularly Islamist extremism.

    The political turmoil and rising crime rates of the past two years have severely hurt tourism, which formerly generated the bulk of Egypts foreign cur-rency earnings and provided jobs to about one of every seven workers. Morsi further sabotaged the tourism industry by appointing as governor of luxor

    Province a member of the Islamist terrorist group that massacred 62 tourists in luxor in 1997not exactly a reassuring signal for nervous tourists. Islamist extremists will likely target tourists once again to undermine the new government.

    The army cannot stabilize Egypt without resolving Egypts worsening economic problems, which will require considerable American and international support.

    Egypt is imploding in a bitter political struggle fought amid economic collapse, social turmoil, surg-ing crime rates, widespread unemployment, falling standards of living, and rising sectarian tensions. The imminent bankruptcy of Egypts state-domi-nated economy could quickly lead to catastrophic food shortages, bread riots, labor strikes, and grow-ing political polarization. Foreign currency reserves are nearly exhausted, which will make it difficult to pay for wheat imports, which provide nearly half of Egypts food consumption.

    The army needs to put Egypts house in order quickly and then get out of the way. It inevitably will lose popular support the longer it rules, as it did between Mubaraks fall in February 2011 and Morsis purge of top army leaders in August 2012. The army can only do so much to repair Egypts dys-functional political system. Moreover, it cannot sta-bilize Egypt without resolving Egypts worsening economic problems, which will require considerable American and international support.

    U.S. Help Needed in the Struggle for Freedom

    Egypt, the largest Arab country, is a bellwether for the Arab Middle East. The united States has a national interest in stabilizing Egypt, preventing the rise of an Islamist totalitarian state, and pre-venting the eruption of a full-blown civil war on the scale of Algerias in the heart of the Arab world. Washington also has a humanitarian interest in pre-venting food shortages if Egypts social fabric con-tinues to unravel.

    The Obama Administration has been asleep at the switch for much of the past two years. It eagerly

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent bet-ter and to lay the groundwork for effective wartime operations.

    PLA writings emphasize that modern information technology blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.

    Peacetime applications of psychological war-fare techniques involve influencing and altering an opponents unconscious, implicit views in order to make that opponent more susceptible to coercion. By employing various forms of strategic communi-cations, including diplomatic efforts, one can foster a positive national image and increase foreign sym-pathy and support for ones own policies and goals. At the same time, such techniques attempt to iso-late opponents, undermining their positions, por-traying them as fostering ill intentions, and forcing them to react to a variety of charges so that their energy is dispersed.

    In addition, employing all the tools of communi-cations, including various forms of media, empha-sizes ones own strengths as well as a willingness to employ that strength to deter and coerce opponents more effectively. All the while, one must be work-ing to counter opponents efforts to foster their own image of strength and unity. It is also likely that an opponent will attempt to demoralize ones populace and that appropriate defensive measures will have to be taken.

    In wartime, psychological operations shift emphasis towards more specifically military tar-gets and goals. The primary objective of such efforts is to generate confusion, doubt, anxiety, fear, terror,

    regret, and exhaustion in an opponent, especially among senior military and civilian leaders. Ideally, such a campaign will induce neglect and maxi-mize the chances of an opponent making mistakes. Wartime psychological warfare operations also aim to generate a sense of uncertainty and indecisive-ness at all levels, thereby degrading opposition deci-sion-making processes. The ability to interfere with an opponents information systems, coupled with efforts to influence decision makers, can create a strong psychological impact.

    Another facet of wartime psychological opera-tions is the sowing of discord and a sense of hopeless-ness in the enemy. Not only will this help generate war-weariness among enemy forces and populations and discourage resistance, but once the conflict is concluded, such operations may facilitate peace negotiations and induce more concessions. When one defeats the enemy, it is not solely by killing the enemy, or winning a piece of ground, but is mainly in terms of cowing the enemys heart.6 In order to undermine the opponents morale, one must empha-size information favorable to oneself through vari-ous forms of media as well as through third parties, friendly elements in the opponents society, and sim-ilar outlets.

    Finally, offensive psychological warfare opera-tions must be complemented by defensive measures, since an opponent will also be trying to undermine ones own forces, population, and leaders. One must therefore attempt to solidify popular support for the conflict, highlight ones successes and the enemys failures, and instill confidence and support for the Party and the state. Such defensive measures require tight control of information flows in ones own soci-ety and the insulation of ones decision-makers and decision-making processes from enemy informa-tion warfare efforts. This need for control explains Beijings efforts to limit cyber access to the larger population, including the Great Firewall of China.

    Chinese Concept of Psychological Warfare Tasks

    For the PlA, psychological warfare is the res-posibility of the General Political Department (GPD), working in coordination with the rest of the PlA. The GPD not only ensures political orthodoxy

    6. Guo, Psychological Warfare Knowledge, p. 14.

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent bet-ter and to lay the groundwork for effective wartime operations.

    PLA writings emphasize that modern information technology blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.

    Peacetime applications of psychological war-fare techniques involve influencing and altering an opponents unconscious, implicit views in order to make that opponent more susceptible to coercion. By employing various forms of strategic communi-cations, including diplomatic efforts, one can foster a positive national image and increase foreign sym-pathy and support for ones own policies and goals. At the same time, such techniques attempt to iso-late opponents, undermining their positions, por-traying them as fostering ill intentions, and forcing them to react to a variety of charges so that their energy is dispersed.

    In addition, employing all the tools of communi-cations, including various forms of media, empha-sizes ones own strengths as well as a willingness to employ that strength to deter and coerce opponents more effectively. All the while, one must be work-ing to counter opponents efforts to foster their own image of strength and unity. It is also likely that an opponent will attempt to demoralize ones populace and that appropriate defensive measures will have to be taken.

    In wartime, psychological operations shift emphasis towards more specifically military tar-gets and goals. The primary objective of such efforts is to generate confusion, doubt, anxiety, fear, terror,

    regret, and exhaustion in an opponent, especially among senior military and civilian leaders. Ideally, such a campaign will induce neglect and maxi-mize the chances of an opponent making mistakes. Wartime psychological warfare operations also aim to generate a sense of uncertainty and indecisive-ness at all levels, thereby degrading opposition deci-sion-making processes. The ability to interfere with an opponents information systems, coupled with efforts to influence decision makers, can create a strong psychological impact.

    Another facet of wartime psychological opera-tions is the sowing of discord and a sense of hopeless-ness in the enemy. Not only will this help generate war-weariness among enemy forces and populations and discourage resistance, but once the conflict is concluded, such operations may facilitate peace negotiations and induce more concessions. When one defeats the enemy, it is not solely by killing the enemy, or winning a piece of ground, but is mainly in terms of cowing the enemys heart.6 In order to undermine the opponents morale, one must empha-size information favorable to oneself through vari-ous forms of media as well as through third parties, friendly elements in the opponents society, and sim-ilar outlets.

    Finally, offensive psychological warfare opera-tions must be complemented by defensive measures, since an opponent will also be trying to undermine ones own forces, population, and leaders. One must therefore attempt to solidify popular support for the conflict, highlight ones successes and the enemys failures, and instill confidence and support for the Party and the state. Such defensive measures require tight control of information flows in ones own soci-ety and the insulation of ones decision-makers and decision-making processes from enemy informa-tion warfare efforts. This need for control explains Beijings efforts to limit cyber access to the larger population, including the Great Firewall of China.

    Chinese Concept of Psychological Warfare Tasks

    For the PlA, psychological warfare is the res-posibility of the General Political Department (GPD), working in coordination with the rest of the PlA. The GPD not only ensures political orthodoxy

    6. Guo, Psychological Warfare Knowledge, p. 14.

  • 2BACKGROUNDER | NO. 2821July 11, 2013

    Specifically:

    There are myriad targets and objects of psycho-logical warfare; it is applied against the enemy, but also against friends; it targets externally, but also internally; it must deal with allied countries, but also the entire globe, and one must rely on the media acting in multiple directions jointly, with effective coverage of many areas, in order to com-prehensively realize the various goals.2

    The goal of psychological warfare is to influence, constrain, and/or alter an opponents thoughts, emo-tions, and habits while at the same time strengthen-ing friendly psychology.3

    Psychological Warfare and Information Warfare

    Psychological warfare operations are integral to the broad concept of information warfare (xinxi zhanzheng). A product of the Information Age, infor-mation warfare is the struggle to dominate the gen-eration and flow of information in order to enhance and support ones own strategic goals while degrad-ing and constraining those of an opponent. The ability to triumph in future local Wars under Informationized Conditionsthe most likely form of wars in the Information Agerests upon the abil-ity to secure information dominance (zhi xinxi quan). This in turn requires the ability to collect, manage, and exploit accurate information more quickly than an opponent.

    Information dominance rests on two primary factors: modern information technology, which is integral to information collection and transmission, and the ability to degrade the quality of information, whether by slowing down transmission or by intro-ducing false or inaccurate data. But in the Chinese conception of psychological warfare, the users of informationboth high-level decision-makers and lower-level policy implementers (individual soldiers,

    clerks, etc.)are as important as the computers and networks and the software that runs them. Efforts to secure information dominance, therefore, will target not only the physical information infrastruc-ture and the data that pass through it, but also the human agents that interact with those data, espe-cially those who are making decisions.

    Given the nature of modern technology and informationized societies, operations designed to influence a rival nation can no longer be aimed solely at military leaders or reserved for wartime. The interconnected nature of information, as well as information systems, makes clear-cut classifica-tions of military and civilian almost impossible. Similarly, information collection, and even exploita-tion, is not necessarily restricted by wartime ver-sus peacetime categorizations. As one Chinese vol-ume observes, information warfare is constant and ongoing, whether in wartime or peacetime. Because of the complex, intertwined nature of modern inter-national politics and economics:

    [I]t is necessary in peacetime to undertake infor-mation warfare in the political, economic, tech-nical, and military realms, as only then can one scientifically establish operational plans, appro-priately calculate gains and losses in a conflict, appropriately control the level of attack, precise-ly strike predetermined targets, and seek the best strategic interest and long-term benefit.4

    This philosophy is echoed in other PlA writings, which emphasize that modern information technol-ogy blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.5 Rather than trying to draw artificial boundaries among these categories, the implication is that information should be treated as an integrated whole.

    In this context, psychological operations are seen as an essential part of future conflicts, affecting the

    1. Guo Yanhua, Psychological Warfare Knowledge (Beijing, PRC: National Defense University Press, 2005), p. 1.

    2. Nanjing Political Academy, Military News Department Study Group, Study of the Journalistic Media Warfare in the Iraq War, China Military Science, No. 4 (2003), p. 30.

    3. Academy of Military Science, Operations Theory and Regulations Research Department and Informationalized Operations Theory Research Office, Informationalized Operations Theory Study Guide (Beijing, PRC: Academy of Military Science Press, November 2005), p. 404.

    4. Li Naiguo, New Theories of Information War (Beijing, PRC: Academy of Military Science Press, 2004), p. 154.

    5. Yuan Wenxian, The Science of Military Information (Beijing, PRC: National Defense University Press, 2008), pp. 7779.

  • 2BACKGROUNDER | NO. 2824July 11, 2013

    opposition political parties, which he linked to for-eign conspiracies.

    under these conditions, Egypts army justifiably intervened to restore order in support of the majority of Egyptians who were rebelling against an Islamist authoritarian regime. On July 3, Egyptian Defense Minister General Abdel-Fattah el-Sissi announced that Morsi, who had failed to meet the demands of the people, was relieved of his duties and that the Islamist-written constitution was suspended.

    unlike Gamal Abdel Nassers coup in 1952 or the 2011 coup that brought down Hosni Mubarak, this time the military sought the endorsement of reli-gious leaders, political leaders, and youth activists, many of whom shared the stage when General el-Sis-si announced Morsis ouster in a televised statement.

    During his year in office, Mohamed Morsi focused more on maximizing his own power and that of the Muslim Brotherhood than on addressing Egypts worsening economic, social, and political problems.

    The next day, the military authorities announced that Adly Mansour, chief justice of the Supreme Constitutional Court, had been sworn in as interim president. Mansour is a little-known but respect-ed low-key technocrat. As a judge, he could be well suited to steering the writing of a new constitu-tion to replace the Islamist document that Morsi had rammed through in December. mr. Mansour pledged to continue the democratic reforms of the 2011 revolution so that we stop producing tyrants and said that new elections were the only way for-ward, although he gave no indication of when they would be held.

    President Mansour initially chose former oppo-sition leader Mohamed el-Baradei as prime min-ister of the interim government on July 6, but this appointment was later rescinded under pressure from the Nour Party, one of the few Islamist groups that supported the coup. Baradei, a secular liberal who led the National Salvation Front, a coalition of

    leftist and liberal parties, frequently clashed with the united States over the Iran nuclear issue when he led the International Atomic Energy Agency. It is expected that President Mansour will soon announce the formation of a new government with a cabinet composed of technocrats and caretakers.

    Morsi has been detained at an undisclosed loca-tion. The authorities have sought to arrest more than 200 top leaders of the Muslim Brotherhood and other Islamist organizations on charges of inciting their followers to kill anti-Morsi demonstrators, but Islamist leaders have vowed not to give up without a fight.

    Mohammed Badie, the supreme leader of the Muslim Brotherhood, has called for continued pro-tests until Morsi is reinstated as president. Speaking at Cairos Rabaa Mosque during a demonstration on

    Rejection Friday, Badie warned, We are all will-ing to sacrifice our necks and our souls for him.1 Tens of thousands of Morsi supporters poured out of mosques on Friday to protest Morsis ouster. Pro-Morsi demonstrations were quickly countered by anti-Morsi protests in a highly charged atmosphere that degenerated into widespread clashes, leav-ing at least 36 dead and more than 1,000 injured. On Monday, at least 51 of Morsis supporters were killed when troops responded to an attack on the Republican Guard headquarters where Morsi was last seen before his ouster.

    Egypts mushrooming political violence will be hard to control. Even in the unlikely event that the Muslim Brotherhood reins in its members as part of some deal to allow it to compete in future elec-tions, more radical Islamists are sure to push back violently.

    Islamist militants in the northern Sinai, a hot-bed of Islamist extremism, launched coordinated attacks against police facilities and an airport at El Arish, the provincial capital. Ansar al-Sharia in Egypt (Supporters of Islamic law), a new Islamist group, announced its formation on an online forum for militants in the Sinai region and proclaimed that it will gather arms and train recruits for a jihad against Egypts new government. Similar organiza-tions in libya, yemen, and Tunisia have served as front groups for attracting recruits to al-Qaedalike terrorist organizations.

    1. Matt Bradley, Tamer El-Ghobashy, and Reem Abdellatif, Post-Coup Violence Spreads in Egypt, The Wall Street Journal, July 6, 2013, http://online.wsj.com/article/SB10001424127887323899704578587131736732940.html (accessed July 8, 2013).

  • 4BACKGROUNDER | NO. 2824July 11, 2013

    embraced Morsis Muslim Brotherhooddominated government and was surprised that Egypts people so quickly became violently opposed to Islamist rule. The Administration gambled that the practical responsibilities of governing would dilute the hostile anti-Western ideology of the Muslim Brotherhood. yet once in office, Morsi relentlessly expanded his own power in a winner-take-all manner while neglecting Egypts festering economic problems.

    The Obama Administrations enthusiasm for the Muslim Brotherhood led it to turn a blind eye to Morsis power grabs, the rising persecution of Egypts Coptic Christian minority, the crackdown on pro-democracy nongovernmental organizations (NGOs) that the Mubarak regime formerly tolerat-ed, and the restrictions that the Morsi government placed on freedom of the press, freedom of speech, and freedom of religion.

    The Obama Administration failed to publicly crit-icize Morsis excesses, power grabs, and abuses. This led Egypts secular and liberal opposition to turn to Egypts army in despair, angry that the Obama Administration uncritically supported the Morsi regime. Many protesters demonstrating against Morsi before the coup also carried signs protesting President Obamas support for the Morsi regime. Morsi, for his part, felt no need to compromise with the opposition or temper his Islamist ambitions because the Administration was reluctant to use the leverage afforded by $1.5 billion in annual u.S. aid to Egypt.

    Secular, democratic, and liberal Egyptians opposed to an Islamist takeover should be natu-ral allies of the u.S., not leading a backlash against American policy. The fact that Egyptians resent the Obama Administrations courting of the Muslim Brotherhood should be a wake-up call for the White House. It is a sad sign that u.S. policy toward Egypt has gone off the rails. Egyptian advocates of freedom should know that Americans support their efforts and do not side with an Islamist authoritarian leader who is hostile to American values and policies.

    The united States should support freedom in Egypt to advance its own interests as well as those of the Egyptian people. The interim government established by the army has a better chance of laying the groundwork for a democratic transition than did Morsis regime, which was headed for dictatorship.

    Military coups have advanced the prospects for democracy at least two times in the past: Portugal in 1974, and Egypt in 2011. It remains to be seen whether Egypts latest coup will succeed in salvag-ing Egypts dim democratic prospects. However, General el-Sissi reportedly was a student at the u.S. Army War College in 2006, in which case he may have absorbed the professional standards and non-partisan apolitical tradition of the u.S. Army. In any event, Egypts military leaders are much more likely than Morsis cronies to advance freedom in Egypt, support economic reforms to revive the economy, and play a stabilizing role in the volatile Middle East.

    What the U.S. Should DoIn addressing Egypts deepening crisis, the

    united States should:

    Press Egypts army to hold elections and step aside as soon as possible. General el-Sissis

    road map for a democratic transition included no dates. President Mansour has laid out a vague timetable for a constitutional referendum in four and a half months and parliamentary elections in six months. Washington should urge the interim government to adhere to this timetable. It should also find an inclusive way of writing a new consti-tution to establish the rules of the political com-petition before elections. The lack of a shared understanding of the rules of the game enabled Morsi to stage a power grab. The Administration has called for a transparent and inclusive political transition process, but the Muslim Brotherhood and other Islamist parties should be allowed to participate only if they publicly choose a path of nonviolence.

    Attach tight strings to any U.S. aid. The Obama Administration has stopped short of calling the armys intervention a coup to avoid triggering an aid cutoff. Section 7008 of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2012, as contained in the Consolidated Appropriations Act, 2012, bars

    any assistance to the government of any country whose duly elected head of government is deposed by military coup dtat or decree or, after the date of enactment of this Act, a coup dtat or decree

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent bet-ter and to lay the groundwork for effective wartime operations.

    PLA writings emphasize that modern information technology blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.

    Peacetime applications of psychological war-fare techniques involve influencing and altering an opponents unconscious, implicit views in order to make that opponent more susceptible to coercion. By employing various forms of strategic communi-cations, including diplomatic efforts, one can foster a positive national image and increase foreign sym-pathy and support for ones own policies and goals. At the same time, such techniques attempt to iso-late opponents, undermining their positions, por-traying them as fostering ill intentions, and forcing them to react to a variety of charges so that their energy is dispersed.

    In addition, employing all the tools of communi-cations, including various forms of media, empha-sizes ones own strengths as well as a willingness to employ that strength to deter and coerce opponents more effectively. All the while, one must be work-ing to counter opponents efforts to foster their own image of strength and unity. It is also likely that an opponent will attempt to demoralize ones populace and that appropriate defensive measures will have to be taken.

    In wartime, psychological operations shift emphasis towards more specifically military tar-gets and goals. The primary objective of such efforts is to generate confusion, doubt, anxiety, fear, terror,

    regret, and exhaustion in an opponent, especially among senior military and civilian leaders. Ideally, such a campaign will induce neglect and maxi-mize the chances of an opponent making mistakes. Wartime psychological warfare operations also aim to generate a sense of uncertainty and indecisive-ness at all levels, thereby degrading opposition deci-sion-making processes. The ability to interfere with an opponents information systems, coupled with efforts to influence decision makers, can create a strong psychological impact.

    Another facet of wartime psychological opera-tions is the sowing of discord and a sense of hopeless-ness in the enemy. Not only will this help generate war-weariness among enemy forces and populations and discourage resistance, but once the conflict is concluded, such operations may facilitate peace negotiations and induce more concessions. When one defeats the enemy, it is not solely by killing the enemy, or winning a piece of ground, but is mainly in terms of cowing the enemys heart.6 In order to undermine the opponents morale, one must empha-size information favorable to oneself through vari-ous forms of media as well as through third parties, friendly elements in the opponents society, and sim-ilar outlets.

    Finally, offensive psychological warfare opera-tions must be complemented by defensive measures, since an opponent will also be trying to undermine ones own forces, population, and leaders. One must therefore attempt to solidify popular support for the conflict, highlight ones successes and the enemys failures, and instill confidence and support for the Party and the state. Such defensive measures require tight control of information flows in ones own soci-ety and the insulation of ones decision-makers and decision-making processes from enemy informa-tion warfare efforts. This need for control explains Beijings efforts to limit cyber access to the larger population, including the Great Firewall of China.

    Chinese Concept of Psychological Warfare Tasks

    For the PlA, psychological warfare is the res-posibility of the General Political Department (GPD), working in coordination with the rest of the PlA. The GPD not only ensures political orthodoxy

    6. Guo, Psychological Warfare Knowledge, p. 14.

  • 2ISSUE BRIEF | NO. 3978JuNe 27, 2013

    pollutants. By the agencys own admission, the rule will cost $10 billion by 2015 but have only $6 million in purported benefits from mercury reductions.7 In addition, the ePA is also regulating coal combustion residues and cooling water intake structures and is considering more stringent smog standards, all of which make the use of coal power more expensive.

    Most recently, the Supreme Court granted the ePAs request to review its cross-state air pollution rule, which would compel companies to retire three to seven gigawatts of electricity generation and retrofit up to 576 plants.8 In the absence of these new regula-tions, u.S. air quality has improved significantly over the past several decades. emission of toxic pollutants has dropped as much as 96 percent since 1980.9

    The attack on coal reaches well beyond power plant construction and operation. Although not a new problem, regulations from the Office of Surface Mining Reclamation and enforcement and the Mine Safety and Health Administration make building new coal mining operations or expanding exist-ing operations increasingly difficult.10 Coal mining operations are subject to 10 federal environmental laws as well as state requirements and regulations.

    Climate Policy and Coal. While it may not be clear exactly which policies will be used, it seems clear that zeroing-out coal-fired electric power plants is a goal of this Administrations environmental team.

    This paper will analyze the economic impact of set-ting such a target. We look at the first 16 years of a 20-year phase-out of coal power: 20152030.

    The analysis shows significant economic loss-es extend beyond the obvious areas of coal mining and power generation. In particular, we find that by 2030:

    employment falls by more than 500,000 jobs;

    Manufacturing loses over 280,000 jobs;

    A family of fours annual income drops more than $1,000 per year, and its total income drops by $16,500 over the period of analysis;

    Aggregate gross domestic product (GDP) decreas-es by $1.47 trillion;

    electricity prices rise by 20 percent;

    Coal-mining jobs drop 43 percent; and

    Natural gas prices rise 42 percent.

    The Energy Markets Respond. The analysis was carried out using the Heritage energy Model (HeM).11 As coal-fired power generation is ratcheted

    1. Senator Barack Obama (DIL), interview with the San Francisco Chronicle editorial board, January 17, 2008, http://www.youtube.com/watch?v=DpTIhyMa-Nw (accessed June 26, 2013).

    2. Aaron Blake, Obama Science Adviser Calls for War on Coal, The Washington Post, June 25, 2013, http://www.washingtonpost.com/blogs/post-politics/wp/2013/06/25/obama-science-adviser-calls-for-war-on-coal/ (accessed June 26, 2013).

    3. Institute for Energy Research, North American Energy Inventory, December 2011, http://www.energyforamerica.org/wp-content/uploads/2012/06/Energy-InventoryFINAL.pdf (accessed June 24, 2013).

    4. To date, no one has successfully operated a utility-scale carbon-capture power plant. Perhaps even more problematic is how to dispose of the 1520 super tankers worth of liquid carbon dioxide that widespread carbon capture would create.

    5. Under the proposed rule, those plants already in the permitting process would not be included.

    6. U.S. Department of Energy, Energy Information Administration, What Is the Role of Coal in the United States? July 18, 2012, http://www.eia.gov/energy_in_brief/article/role_coal_us.cfm (accessed June 24, 2013).

    7. Anne E. Smith, Technical Comments on the Regulatory Impact Analysis Supporting EPAs Proposed Rule for Utility MACT and Revised NSPS (76 FR 24976), NERA Economic Consulting, August 3, 2011, http://www.nera.com/nera-files/PUB_Smith_EPA_report_0811.pdf (accessed June 24, 2013).

    8. North American Electric Reliability Corporation, 2010 Special Reliability Scenario Assessment: Resource Adequacy Impact of Potential U.S. Environmental Regulations, October 2010, http://www.nerc.com/files/EPA_Scenario_Final_v2.pdf (accessed June 24, 2013).

    9. Steven F. Hayward, 2011 Almanac of Environmental Trends, American Enterprise Institute, April 2011, p. 34, http://www.aei.org/files/2011/04/20/Hayward-almanac2011.pdf (accessed June 25, 2013).

    10. Nicolas D. Loris, The Assault on Coal and the American Consumer, Heritage Foundation Backgrounder No. 2709, July 23, 2012, http://www.heritage.org/research/reports/2012/07/the-assault-on-coal-and-american-consumers.

    11. See the appendix for a description of the HEM and the methodology used in this paper.

  • 4ISSUE BRIEF | NO. 3978JuNe 27, 2013

    Appendix: MethodologyOverview of Heritage Energy Model. This

    analysis uses the Heritage energy Model (HeM), a derivative of the National energy Model System (NeMS).15 NeMS is used by the energy Information Administration of the Department of energy as well as various nongovernmental organizations for a variety of purposes, including forecasting the effects of energy policy changes on a plethora of leading economic indicators. The methodologies, assumptions, conclusions, and opinions in this report are entirely the work of statisticians and economists at The Heritage Foundations Center for Data Analysis and have not been endorsed by and do not necessarily reflect the views of the developers of NeMS.

    HeM is based on well-established economic the-ory as well as historical data and contains a variety of modules that interact with each other for long-term forecasting. In particular, HeM focuses on the interactions among (1) the supply, conversion, and demand of energy in its various forms; (2) American energy and the overall American economy; (3) the American energy market and the world petroleum market; and (4) current production and consump-tion decisions as well as expectations about the future.16 These modules include:

    A Macroeconomic Activity Module,17

    A Transportation Demand Module,

    A Residential Demand Module,

    An Industrial Demand Module,

    A Commercial Demand Module,

    A Coal Market Module,

    An electricity Market Module,

    A Petroleum Market Module,

    An Oil and Gas Supply Module,

    A Renewable Fuels Module,

    An International energy Activity Module, and

    A Natural Gas Transmission and Distribution Module.

    HeM is identical to NeMS with the exception of the Commercial Demand Module. unlike NeMS, HeMs module does not make projections regarding commercial floor-space data of pertinent commer-cial buildings.

    Overarching the above modules is an Integrating Module that consistently cycles, iteratively execut-ing and allowing the various modules to interact with each other. unknown variables that are related (such as if they are a component of a particular mod-ule) are grouped together, and a pertinent subsys-tem of equations and inequalities corresponding to each group is solved via a variety of commonly used numerical analytic techniques, using approximate values for the other unknowns. Once these groups values are computed, the next group is solved simi-larly, and the process iterates. Convergence checks are performed for each price and quantity statistic to determine whether subsequent changes in that par-ticular statistic fall within a given tolerance. After all group values for the current cycle are determined, the next cycle begins. For example, at cycle j, a vari-ety of n pertinent statistics represented by the vector (xj1, x

    j2, ..., x

    jn)R

    n is obtained.18 HeM provides a num-ber of diagnostic measures, based on differences

    15. U.S. Department of Energy, Energy Information Administration, The National Energy Modeling System: An Overview, http://www.eia.gov/oiaf/aeo/overview/pdf/0581(2009).pdf (accessed April 3, 2013).

    16. Ibid., pp. 34.

    17. HEMs Macroeconomic Activity Module makes use of the IHS Global Insight model, which is used by government agencies and Fortune 500 organizations to forecast the manifestations of economic events and policy changes on notable economic indicators. As with NEMS, the methodologies, assumptions, conclusions, and opinions in this report are entirely the work of CDA statisticians and economists and have not been endorsed by and do not necessarily reflect the views of the owners of the IHS Global Insight model.

    18. S. A. Gabriel, A. S. Kydes, and P. Whitman, The National Energy Modeling System: A Large-Scale Energy-Economic Equilibrium Model, Operations Research, Vol. 49 (2001), pp. 1425.

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent bet-ter and to lay the groundwork for effective wartime operations.

    PLA writings emphasize that modern information technology blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.

    Peacetime applications of psychological war-fare techniques involve influencing and altering an opponents unconscious, implicit views in order to make that opponent more susceptible to coercion. By employing various forms of strategic communi-cations, including diplomatic efforts, one can foster a positive national image and increase foreign sym-pathy and support for ones own policies and goals. At the same time, such techniques attempt to iso-late opponents, undermining their positions, por-traying them as fostering ill intentions, and forcing them to react to a variety of charges so that their energy is dispersed.

    In addition, employing all the tools of communi-cations, including various forms of media, empha-sizes ones own strengths as well as a willingness to employ that strength to deter and coerce opponents more effectively. All the while, one must be work-ing to counter opponents efforts to foster their own image of strength and unity. It is also likely that an opponent will attempt to demoralize ones populace and that appropriate defensive measures will have to be taken.

    In wartime, psychological operations shift emphasis towards more specifically military tar-gets and goals. The primary objective of such efforts is to generate confusion, doubt, anxiety, fear, terror,

    regret, and exhaustion in an opponent, especially among senior military and civilian leaders. Ideally, such a campaign will induce neglect and maxi-mize the chances of an opponent making mistakes. Wartime psychological warfare operations also aim to generate a sense of uncertainty and indecisive-ness at all levels, thereby degrading opposition deci-sion-making processes. The ability to interfere with an opponents information systems, coupled with efforts to influence decision makers, can create a strong psychological impact.

    Another facet of wartime psychological opera-tions is the sowing of discord and a sense of hopeless-ness in the enemy. Not only will this help generate war-weariness among enemy forces and populations and discourage resistance, but once the conflict is concluded, such operations may facilitate peace negotiations and induce more concessions. When one defeats the enemy, it is not solely by killing the enemy, or winning a piece of ground, but is mainly in terms of cowing the enemys heart.6 In order to undermine the opponents morale, one must empha-size information favorable to oneself through vari-ous forms of media as well as through third parties, friendly elements in the opponents society, and sim-ilar outlets.

    Finally, offensive psychological warfare opera-tions must be complemented by defensive measures, since an opponent will also be trying to undermine ones own forces, population, and leaders. One must therefore attempt to solidify popular support for the conflict, highlight ones successes and the enemys failures, and instill confidence and support for the Party and the state. Such defensive measures require tight control of information flows in ones own soci-ety and the insulation of ones decision-makers and decision-making processes from enemy informa-tion warfare efforts. This need for control explains Beijings efforts to limit cyber access to the larger population, including the Great Firewall of China.

    Chinese Concept of Psychological Warfare Tasks

    For the PlA, psychological warfare is the res-posibility of the General Political Department (GPD), working in coordination with the rest of the PlA. The GPD not only ensures political orthodoxy

    6. Guo, Psychological Warfare Knowledge, p. 14.

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent bet-ter and to lay the groundwork for effective wartime operations.

    PLA writings emphasize that modern information technology blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.

    Peacetime applications of psychological war-fare techniques involve influencing and altering an opponents unconscious, implicit views in order to make that opponent more susceptible to coercion. By employing various forms of strategic communi-cations, including diplomatic efforts, one can foster a positive national image and increase foreign sym-pathy and support for ones own policies and goals. At the same time, such techniques attempt to iso-late opponents, undermining their positions, por-traying them as fostering ill intentions, and forcing them to react to a variety of charges so that their energy is dispersed.

    In addition, employing all the tools of communi-cations, including various forms of media, empha-sizes ones own strengths as well as a willingness to employ that strength to deter and coerce opponents more effectively. All the while, one must be work-ing to counter opponents efforts to foster their own image of strength and unity. It is also likely that an opponent will attempt to demoralize ones populace and that appropriate defensive measures will have to be taken.

    In wartime, psychological operations shift emphasis towards more specifically military tar-gets and goals. The primary objective of such efforts is to generate confusion, doubt, anxiety, fear, terror,

    regret, and exhaustion in an opponent, especially among senior military and civilian leaders. Ideally, such a campaign will induce neglect and maxi-mize the chances of an opponent making mistakes. Wartime psychological warfare operations also aim to generate a sense of uncertainty and indecisive-ness at all levels, thereby degrading opposition deci-sion-making processes. The ability to interfere with an opponents information systems, coupled with efforts to influence decision makers, can create a strong psychological impact.

    Another facet of wartime psychological opera-tions is the sowing of discord and a sense of hopeless-ness in the enemy. Not only will this help generate war-weariness among enemy forces and populations and discourage resistance, but once the conflict is concluded, such operations may facilitate peace negotiations and induce more concessions. When one defeats the enemy, it is not solely by killing the enemy, or winning a piece of ground, but is mainly in terms of cowing the enemys heart.6 In order to undermine the opponents morale, one must empha-size information favorable to oneself through vari-ous forms of media as well as through third parties, friendly elements in the opponents society, and sim-ilar outlets.

    Finally, offensive psychological warfare opera-tions must be complemented by defensive measures, since an opponent will also be trying to undermine ones own forces, population, and leaders. One must therefore attempt to solidify popular support for the conflict, highlight ones successes and the enemys failures, and instill confidence and support for the Party and the state. Such defensive measures require tight control of information flows in ones own soci-ety and the insulation of ones decision-makers and decision-making processes from enemy informa-tion warfare efforts. This need for control explains Beijings efforts to limit cyber access to the larger population, including the Great Firewall of China.

    Chinese Concept of Psychological Warfare Tasks

    For the PlA, psychological warfare is the res-posibility of the General Political Department (GPD), working in coordination with the rest of the PlA. The GPD not only ensures political orthodoxy

    6. Guo, Psychological Warfare Knowledge, p. 14.

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent bet-ter and to lay the groundwork for effective wartime operations.

    PLA writings emphasize that modern information technology blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.

    Peacetime applications of psychological war-fare techniques involve influencing and altering an opponents unconscious, implicit views in order to make that opponent more susceptible to coercion. By employing various forms of strategic communi-cations, including diplomatic efforts, one can foster a positive national image and increase foreign sym-pathy and support for ones own policies and goals. At the same time, such techniques attempt to iso-late opponents, undermining their positions, por-traying them as fostering ill intentions, and forcing them to react to a variety of charges so that their energy is dispersed.

    In addition, employing all the tools of communi-cations, including various forms of media, empha-sizes ones own strengths as well as a willingness to employ that strength to deter and coerce opponents more effectively. All the while, one must be work-ing to counter opponents efforts to foster their own image of strength and unity. It is also likely that an opponent will attempt to demoralize ones populace and that appropriate defensive measures will have to be taken.

    In wartime, psychological operations shift emphasis towards more specifically military tar-gets and goals. The primary objective of such efforts is to generate confusion, doubt, anxiety, fear, terror,

    regret, and exhaustion in an opponent, especially among senior military and civilian leaders. Ideally, such a campaign will induce neglect and maxi-mize the chances of an opponent making mistakes. Wartime psychological warfare operations also aim to generate a sense of uncertainty and indecisive-ness at all levels, thereby degrading opposition deci-sion-making processes. The ability to interfere with an opponents information systems, coupled with efforts to influence decision makers, can create a strong psychological impact.

    Another facet of wartime psychological opera-tions is the sowing of discord and a sense of hopeless-ness in the enemy. Not only will this help generate war-weariness among enemy forces and populations and discourage resistance, but once the conflict is concluded, such operations may facilitate peace negotiations and induce more concessions. When one defeats the enemy, it is not solely by killing the enemy, or winning a piece of ground, but is mainly in terms of cowing the enemys heart.6 In order to undermine the opponents morale, one must empha-size information favorable to oneself through vari-ous forms of media as well as through third parties, friendly elements in the opponents society, and sim-ilar outlets.

    Finally, offensive psychological warfare opera-tions must be complemented by defensive measures, since an opponent will also be trying to undermine ones own forces, population, and leaders. One must therefore attempt to solidify popular support for the conflict, highlight ones successes and the enemys failures, and instill confidence and support for the Party and the state. Such defensive measures require tight control of information flows in ones own soci-ety and the insulation of ones decision-makers and decision-making processes from enemy informa-tion warfare efforts. This need for control explains Beijings efforts to limit cyber access to the larger population, including the Great Firewall of China.

    Chinese Concept of Psychological Warfare Tasks

    For the PlA, psychological warfare is the res-posibility of the General Political Department (GPD), working in coordination with the rest of the PlA. The GPD not only ensures political orthodoxy

    6. Guo, Psychological Warfare Knowledge, p. 14.

  • 2BACKGROUNDER | NO. 2821July 11, 2013

    Specifically:

    There are myriad targets and objects of psycho-logical warfare; it is applied against the enemy, but also against friends; it targets externally, but also internally; it must deal with allied countries, but also the entire globe, and one must rely on the media acting in multiple directions jointly, with effective coverage of many areas, in order to com-prehensively realize the various goals.2

    The goal of psychological warfare is to influence, constrain, and/or alter an opponents thoughts, emo-tions, and habits while at the same time strengthen-ing friendly psychology.3

    Psychological Warfare and Information Warfare

    Psychological warfare operations are integral to the broad concept of information warfare (xinxi zhanzheng). A product of the Information Age, infor-mation warfare is the struggle to dominate the gen-eration and flow of information in order to enhance and support ones own strategic goals while degrad-ing and constraining those of an opponent. The ability to triumph in future local Wars under Informationized Conditionsthe most likely form of wars in the Information Agerests upon the abil-ity to secure information dominance (zhi xinxi quan). This in turn requires the ability to collect, manage, and exploit accurate information more quickly than an opponent.

    Information dominance rests on two primary factors: modern information technology, which is integral to information collection and transmission, and the ability to degrade the quality of information, whether by slowing down transmission or by intro-ducing false or inaccurate data. But in the Chinese conception of psychological warfare, the users of informationboth high-level decision-makers and lower-level policy implementers (individual soldiers,

    clerks, etc.)are as important as the computers and networks and the software that runs them. Efforts to secure information dominance, therefore, will target not only the physical information infrastruc-ture and the data that pass through it, but also the human agents that interact with those data, espe-cially those who are making decisions.

    Given the nature of modern technology and informationized societies, operations designed to influence a rival nation can no longer be aimed solely at military leaders or reserved for wartime. The interconnected nature of information, as well as information systems, makes clear-cut classifica-tions of military and civilian almost impossible. Similarly, information collection, and even exploita-tion, is not necessarily restricted by wartime ver-sus peacetime categorizations. As one Chinese vol-ume observes, information warfare is constant and ongoing, whether in wartime or peacetime. Because of the complex, intertwined nature of modern inter-national politics and economics:

    [I]t is necessary in peacetime to undertake infor-mation warfare in the political, economic, tech-nical, and military realms, as only then can one scientifically establish operational plans, appro-priately calculate gains and losses in a conflict, appropriately control the level of attack, precise-ly strike predetermined targets, and seek the best strategic interest and long-term benefit.4

    This philosophy is echoed in other PlA writings, which emphasize that modern information technol-ogy blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.5 Rather than trying to draw artificial boundaries among these categories, the implication is that information should be treated as an integrated whole.

    In this context, psychological operations are seen as an essential part of future conflicts, affecting the

    1. Guo Yanhua, Psychological Warfare Knowledge (Beijing, PRC: National Defense University Press, 2005), p. 1.

    2. Nanjing Political Academy, Military News Department Study Group, Study of the Journalistic Media Warfare in the Iraq War, China Military Science, No. 4 (2003), p. 30.

    3. Academy of Military Science, Operations Theory and Regulations Research Department and Informationalized Operations Theory Research Office, Informationalized Operations Theory Study Guide (Beijing, PRC: Academy of Military Science Press, November 2005), p. 404.

    4. Li Naiguo, New Theories of Information War (Beijing, PRC: Academy of Military Science Press, 2004), p. 154.

    5. Yuan Wenxian, The Science of Military Information (Beijing, PRC: National Defense University Press, 2008), pp. 7779.

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent bet-ter and to lay the groundwork for effective wartime operations.

    PLA writings emphasize that modern information technology blurs the lines between peacetime and wartime, between military and civilian, and among strategy, operations, and tactics.

    Peacetime applications of psychological war-fare techniques involve influencing and altering an opponents unconscious, implicit views in order to make that opponent more susceptible to coercion. By employing various forms of strategic communi-cations, including diplomatic efforts, one can foster a positive national image and increase foreign sym-pathy and support for ones own policies and goals. At the same time, such techniques attempt to iso-late opponents, undermining their positions, por-traying them as fostering ill intentions, and forcing them to react to a variety of charges so that their energy is dispersed.

    In addition, employing all the tools of communi-cations, including various forms of media, empha-sizes ones own strengths as well as a willingness to employ that strength to deter and coerce opponents more effectively. All the while, one must be work-ing to counter opponents efforts to foster their own image of strength and unity. It is also likely that an opponent will attempt to demoralize ones populace and that appropriate defensive measures will have to be taken.

    In wartime, psychological operations shift emphasis towards more specifically military tar-gets and goals. The primary objective of such efforts is to generate confusion, doubt, anxiety, fear, terror,

    regret, and exhaustion in an opponent, especially among senior military and civilian leaders. Ideally, such a campaign will induce neglect and maxi-mize the chances of an opponent making mistakes. Wartime psychological warfare operations also aim to generate a sense of uncertainty and indecisive-ness at all levels, thereby degrading opposition deci-sion-making processes. The ability to interfere with an opponents information systems, coupled with efforts to influence decision makers, can create a strong psychological impact.

    Another facet of wartime psychological opera-tions is the sowing of discord and a sense of hopeless-ness in the enemy. Not only will this help generate war-weariness among enemy forces and populations and discourage resistance, but once the conflict is concluded, such operations may facilitate peace negotiations and induce more concessions. When one defeats the enemy, it is not solely by killing the enemy, or winning a piece of ground, but is mainly in terms of cowing the enemys heart.6 In order to undermine the opponents morale, one must empha-size information favorable to oneself through vari-ous forms of media as well as through third parties, friendly elements in the opponents society, and sim-ilar outlets.

    Finally, offensive psychological warfare opera-tions must be complemented by defensive measures, since an opponent will also be trying to undermine ones own forces, population, and leaders. One must therefore attempt to solidify popular support for the conflict, highlight ones successes and the enemys failures, and instill confidence and support for the Party and the state. Such defensive measures require tight control of information flows in ones own soci-ety and the insulation of ones decision-makers and decision-making processes from enemy informa-tion warfare efforts. This need for control explains Beijings efforts to limit cyber access to the larger population, including the Great Firewall of China.

    Chinese Concept of Psychological Warfare Tasks

    For the PlA, psychological warfare is the res-posibility of the General Political Department (GPD), working in coordination with the rest of the PlA. The GPD not only ensures political orthodoxy

    6. Guo, Psychological Warfare Knowledge, p. 14.

  • 2ISSUE BRIEF | NO. 3980JuNe 27, 2013

    insolvency is largely the result of the 20072008 recession. While some of the sources of reduced solvencysuch as lower economic growth, lower wages, increased disability incidence, and lower birth ratesare hopefully temporary, other conse-quences of the recession are unlikely to be reversed. For example, the Social Security trustees now proj-ect lower average hours of work and higher rates of

    disability incidence well into the future, and the lifetime earnings of the long-term unemployed are likely to be permanently lower.

    Aside from a short period in the late 1990s and early 2000s, when the exceptionally strong econo-my pushed Social Securitys projected solvency date forward, Social Securitys financial trajectory has been decidedly negative. If the historical pattern of

    1. U.S. Social Security Administration, The 2013 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, May 31, 2013, http://www.socialsecurity.gov/OACT/TR/2013/index.html (accessed June 6, 2013).

    2. Geoffrey Kollmann, Social Security: Summary of Major Changes in the Cash Benefits Program, Social Security Administration, May 18, 2000, http://www.ssa.gov/history/reports/crsleghist2.html (accessed June 6, 2013).

    3. Ibid.

    4. Social Security Administration, Summary of the Social Security Trustees Report: Old-Age, Survivors, and Disability Insurance Program, Social Security Board of Trustees, June 27, 1983, http://www.ssa.gov/history/pdf/1983.pdf (accessed June 6, 2013).

    CHART 1

    Source: Heritage Foundation calcluations based on data from Social Security Administration, The 2013 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, May 31, 2013, http://www.socialsecurity.gov/OACT/TR/2013/index.html (accessed May 31, 2013).

    In 1983, Social Securitys trustees projected that the recently enacted Social Security reforms would keep the program solvent for at least the next 75 years through 2058. However, over successive annual reports, that approach date has accelerated. If the trend since 1983 continues, the program will become insolvent in 2024 34 years earlier than originally projected.PROJECTED NUMBER OF YEARS AWAY BEFORE SOCIAL SECURITY BECOMES INSOLVENT

    YEAR PROJECTION MADE

    Social Securitys Life Expectancy Keeps Getting Shorter

    heritage.orgIB 3980

    0

    10

    20

    30

    40

    50

    60

    70

    80

    1983 1990 2000 2010 2020 2030 2040 2050 2060

    Trend since 1983: Social Security insolvent in

    2024

    1983 projection: Social Security solvent untilat least2058

  • 3BACKGROUNDER | NO. 2821July 11, 2013

    very perceptions that inform decision making, from the context to the biases. Successful psychologi-cal operations will therefore have repercussions at every level of operations, influencing the course of the conflict. To be effective, however, psychologi-cal warfare operations cannot be limited to war-time. Instead, peacetime psychological operations are necessary, both to understand an opponent be