April 1998

Tax Shifting

by William Yeatman on April 25, 1998

in Small business

One of the policy options for reducing greenhouse gas emissions that is beginning to receive a lot of attention is tax shifting. The idea behind the proposal is that governments shift taxes away from “goods” (i.e., labor and investment) and begin taxing “bads” (i.e., pollution and energy use). The Clinton administration and others who wish to control energy use have seized upon this tax proposal as a nearly cost-free way to reduce energy use. States such as Vermont, New England, Massachusetts, Minnesota, and New York are considering policies of this type.

A study done in June 1997 by the Tellus Institute analyzes the economic affects of tax shifting on the state of New York. It is a good preview of how these types of policies may be sold to taxpayers. The study treats tax shifting optimistically stating that “There need not be a trade-off between environmental policies and economic well-being.” According to the study, “Ecological tax reform is a policy strategy in which this double goal is built by design.”

The authors concede, however, that some people will be hurt by the new tax policies. Those who depend on energy intensive industries may find themselves in economic straits. “Thus,” says the authors, “concrete tax reform policy would require provisions to ensure that businesses that would be hard hit by simple tax shifting, and the employees of these businesses, would be assisted in this transition, through measures such as targeted tax credits, subsidies for energy-efficiency investments, and retraining assistance for workers. Such measures could be focused on communities that depend on energy-intensive industries.”

But such adverse effects should not be cause for undue alarm. Structural change is natural in a capitalist economy. Unlike the messy, unpredictable changes that occur in a capitalist economy, however, “ecological tax reform could help give direction to this process,” say the authors. The study also touts the advantages of tax shifting for New Yorks industrial planners. State industrial policy has become a hodgepodge of tax credits, infrastructure services and other targeted policies designed to lure businesses to the respective states. The study recommends that states adopt ecological tax reform as a way to simplify existing tax systems and eliminating what many economists see as counterproductive competition between states.

The study analyzes three levels of carbon taxes: $10, $30, and $50 per ton of carbon dioxide (CO2). The taxes would be fully implemented by 1997, would be assessed on carbon content of fossil fuels and at first point of entry to the state. The study also analyzes two policy scenarios: Scenario I returns the entire carbon tax to taxpayers through reduced traditional taxes. Scenario II uses one-quarter of the carbon tax revenue to subsidize energy efficiency investments while the rest is returned taxpayers.

Coal would experience the largest price increase due to a carbon tax. A $10 carbon tax would increase the price of coal by $20.82/ton, $62.46/ton under a $30 tax and $104.09/ton under a $50 tax. Gasoline prices would increase by $0.10/gallon, $0.31/gallon and $0.52/gallon for the respective tax levels and natural gas prices would increase by $0.58/mcf, $1.74/mcf and $2.90/mcf respectively.

The authors claim that additional energy reductions can be achieved through the reinvestment plan under scenario II. Under the $10 tax a 25 percent reinvestment would triple energy reductions relative to no investment. Under the $30 tax energy reductions would be 90 percent higher while under a $50 tax energy reductions would be 55 percent higher.

Finally, the authors claim that ecological tax reform would lead to net job creation. They reason that taxing energy use would discourage capital-intensive production and would encourage labor-intensive production, increasing labor demand. Furthermore, non-energy, labor-intensive products (such as services) are generally produced within the state while energy-intensive products are more often imported into the state. Ecological tax reform would prevent money from leaving the state. The study, Ecological Tax Reform: Carbon Taxes with Tax Reductions in New York can be obtained through the internet at www.tellus.org for $25.

Environmental Ministers Meet

Environmental ministers from 29 member countries of the Organization for Economic Cooperation and Development and the G-8 Ministers (“The Group of Seven” most industrialized nations plus Russia) met in Paris on April 2 and 3 to discuss environmental issues.

The G-8 Ministers agreed that climate change is the greatest threat to the worlds sustainable development, public health, and future prosperity. They called for the rapid introduction of measures to implement the Kyoto Protocol claiming to be “aware of their responsibility to take the lead in combating climate change.” They also agreed not to use emission trading to avoid domestic reductions in greenhouse gases. The European Union insisted on a strict 50 percent limit on greenhouse gas reductions achieved through emissions trading. The U.S. and Japan demanded a 60 to 70 percent limit.

This is important because the Clinton administration has based its estimates of the Kyoto Protocols costs on the assumption that there will be a fully operating trading system. Any limits on the ability to trade emission credits will require an upward revision of the cost estimates.

One bright spot of the meeting was a declaration by the Environmental Ministers of the OECD countries endorsing the need to eliminate subsidies and fiscal incentives that damage the environment. Unfortunately, tax credits (allowing people to keep their own money) were included in the definition of subsidies and incentives (European Report, April 8, 1998).

Class Conflict

One of the provisions in the Clinton Administrations $6.3 billion tax and subsidy plan to reduce greenhouse gas emissions is a tax credit for car buyers who purchase high mileage vehicles. The tax credit ranges from $3,000 for cars getting twice the base mileage for their class and $4,000 for cars getting three times the base mileage. The Clinton Administration said that it would work with the carmakers to define vehicle classes.

The Big 3 automakers, however, are opposed to classes. They fear that companies will alter existing vehicles to make them eligible for tax credits rather than invest in expensive new technologies such as fuel cells and hybrids. The Corporate Average Fuel Economy produced similar changes in the auto fleet.

Dan Becker, climate change director for the Sierra Club, is confused by the automakers resistance. Carmakers, says Becker, have complained about technology mandates but now the are resisting the market-based programs that they have wanted saying that they will interfere with costly technology investments (Sebastian Sun, April 3, 1998).

Mea Culpa

The November 1997 issue of Environment ran a commentary by Phil Jones of the Climatic Research Unit that tried to marginalize Patrick Michaels, a well known global warming skeptic, by saying that he has only published one peer-reviewed article on the issue of climate change detection.

A response by Michaels in the April issue prompted a “clarification” by Jones. “I am writing now to clarify this statement because it can easily be misconstrued if it is taken out of context, ” Jones says. “My definition of this issue is very specific, referring only to exercises that use pattern-matching techniques to attempt to attribute what has happened over the last 30 to 50 years to . . . anthropogenic changes in trace gases. There are relatively few papers, approximately 10 to 15, published on this issue.”

Michaels says that he doubts he will publish another paper on this subject since that method of climate change detection has been shown to be flawed by Robert Davis and David Legates of the University of Virginia.

A Correction at NASA

A paper appearing in Science in 1989 by Zwally et al., used satellite radar altimeter data to show that the Greenland ice sheet had grown by 23 6 cm/year from 1978 to 1986. A new paper in Science (March 27, 1998) by Davis et al. casts doubt on that conclusion.

The Greenland ice sheet is important to climate change research because it is much warmer than the Antarctic ice sheet, and would experience more dramatic changes in the event of global warming. The 1989 paper suggested that a warmer polar climate would increase precipitation causing the Greenland ice sheet to expand. The large expansion purportedly discovered by Zwally et al. was cited as further evidence of global warming.

The altimeters used were designed primarily for measuring sea-surface height necessitating the “postprocessing” of data measuring ice sheet elevation to ensure accuracy. The new paper reexamines the satellite data by comparing the NASA algorithm used by Zwally et al. with three other algorithms and finds that the NASA algorithm deviates significantly (30 to 50 percent) from the other three which all produce nearly identical results.

Davis et al. have determined that the spatially averaged growth rate of the Greenland ice sheet from 1978 to 1987-88 is 1.5 0.5 cm/year. The researchers argue that due to various uncertainties “the small 1.5 cm/year growth rate estimate may not be significantly different form the null growth rate.” Davis et al. conclude, “Considering the large spatial and temporal variations, the 1.5 0.5 cm/year growth rate is too small to assess whether or not the Greenland ice sheet is undergoing a long-term change due to a warmer polar climate.”

Sunshine, Cosmic Rays, and Climate Change

Its obvious to most people that the sun plays an important role in the climate of the planet. Recently evidence has been accumulating that the sun may have more to do with temperature variations than manmade greenhouse gases. Researchers such as Knud Lassen and Eigil Friis-Christensen of the Danish Meteorological Institute (DMI) have found a correlation between sunspot activity and earths temperature. The Danish researchers, for example, found a loose correlation between temperature and the number of sunspots (increased sunspot activity brightens the sun leading to higher global temperatures) and a much stronger correlation between temperature and the length of the sunspot cycle.

The problem with this hypothesis is that the sun does not brighten enough to directly explain temperature changes. Researchers believe, however, that the solar wind, which becomes stronger during sunspot cycles, shields the earth from high-energy charged particles from outer space called cosmic rays. These incoming cosmic rays may contribute to cloud formation, cooling the earth. Henrik Svensmark, also of DMI, and Dr. Friis-Christensen have discovered that cloud cover does vary with the cosmic-ray flux, with global cloud cover varying between 65 percent when cosmic rays are weakest and 68 percent when they are at their peak.

Researchers are not sure how cosmic rays contribute to cloud cover, though there are a couple of theories. Jasper Kirby and Frank Close, who work at the European particle-physics centre in Geneva, have devised an experiment to strengthen the connection. The researchers plan to use a modified cloud chamber (a box containing air super-saturated with water vapor) that can be used to replicate conditions in the atmosphere. By firing particle beams similar to cosmic rays through the box they can see whether clouds are formed. It may turn out that much of the small amount of warming that we have experienced in the last century is due to solar inconstancy (The Economist, April 11, 1998).

Shooting Down Airplanes

A new study by the Intergovernmental Panel on Climate Change (IPCC) says that aircraft may be responsible for 5 to 6 percent of warming caused by greenhouse gas emissions. Some of the studys authors say that the figure could be as high as 10 percent or more since the study is based on outdated models of atmospheric chemistry. Air travel, according to the study, influences global warming in two ways. First, through carbon dioxide emissions and second, by emitting nitrogen oxides which are converted into ozone in the upper troposphere which can act as a powerful greenhouse gas at that elevation.

Aircraft emissions are not currently covered by the Kyoto Protocol since negotiators could not agree how to allocate responsibility for emissions the result from international flights (New Scientist, April 11, 1998).

Hurricane Predictions

Dr. William Gray, a hurricane forecaster at Colorado State University has predicted that there will be a rise in the frequency of hurricanes in 1998 due to the dissipation of El Nio, which suppressed hurricane activity in 1997. Dr. Gray predicts that there will 10 named tropical storms, six will become hurricanes and two of those will become intense hurricanes with wind speeds up to 111 mph or more. On average there are 9.3 named storms, 5.8 hurricanes and 2.1 intense hurricanes each year (The Jupiter Courier, April 8, 1998).


  • Vice President Al Gore and New York Times science writer William Stevens received the “Chicken Little Awards” on April 6 from the National Anxiety Center which gives the annual award to “individuals and groups who have scared the daylights out of millions of people.” The centers founder, Alan Caruba, stated that Al Gore has no “grip on reality.” William Stevens was cited for his 125 articles about global warming. “Thats not journalism,” said Caruba, “Its pure propaganda” (U.P.I., April 6, 1998).
  • Secretary of Energy, Frederico Pea began his speech, where he presented the Clinton administrations Comprehensive National Energy Strategy, with the following non sequitur: speaking of a meeting with the G-8 energy ministers he said, “Ten years ago, none of the eight of us in that room could have predicted exactly where our energy markets would be today, and none of us can predict exactly where our energy markets will be 10 years from today. But the energy ministerial drove home the point that although none of us can precisely predict the future, each of us needs to prepare our nation for the coming century” (Federal News Service, April 8, 1998).


The Competitive Enterprise Institute has produced a book and a highlights video based on The Costs of Kyoto conference held in July 1997. Both the book and the video are available for $15 or buy both for $25. To order call CEI at (202) 331-1010, or e-mail to info@cei.org.

Thomas Gale Moore, a member of the Competitive Enterprise Institutes board of directors, has written a book, Climate of Fear: Why We Shouldn’t Worry about Global Warming that will soon be published by Cato Institute. Ordering details will be forthcoming at Catos website at www.cato.org

The Institute of Economic Affairs in London has published a book, Climate Change: Challenging the Conventional Wisdom. The book can be ordered by contacting IEA by e-mail at books@iea.org.uk.

The European Science and Environment Forum (ESEF) has recently published Global Warming: The Continuing Debate. It can be ordered for $25 from CEI or by contacting ESEF at lorraine@esef.org.

The Clinton Administrations estimates of the costs of complying with the Kyoto Protocol are based on some implausible assumptions, write Raymond J. Kopp and J.W. Anderson of Resources for the Future (Weathervane, March 12, 1998, www.weathervane.rff.org).

Janet Yellen, chair of the Council of Economic Advisors, testified before the House Commerce Committee on March 4, 1998 that the costs of emissions reductions would range from $14 to $23 per ton of carbon equivalent. This would lead to a mere $70 to $110 increase in energy costs per household over the next ten years.

The Administrations estimates were based in part on the Second Generation Model (SGM) of Battelle Laboratories which, according to Yellen “is one of the best positioned [models] to analyze the role of international trade in permits.” This is important because the Administrations numbers rely heavily on the assumption that the U.S. will be able to trade emissions with developing countries.

As reported in our last issue, however, Raul Estrada-Oyuela, head of the United Nations commission that negotiated the Kyoto Protocol, stated that emission trading may be phased out after eight years which would significantly alter the Administrations estimates.

The SGM estimates that in the absence of trading it will cost the U.S. $108 per ton of carbon to meet the Kyoto commitments. Trading between developed countries alone would reduce the costs of compliance to $72 per ton and trading amongst all countries would lower the cost to $26 per ton. Under the last scenario (which is about the same as Yellens upper bound estimates) only 15 percent of U.S. emissions reductions would occur within the country. The remaining reductions would occur abroad.

Developing countries, according to Kopp and Anderson, “fear that the rich countries will use their financial power to buy their way out of emissions limits, while limits grow tighter on the poor.” They also argue that “It is also not clear that the U.S. Congress will support a system that envisions large outflows of investment capital to the poor countries for emissions permits. Some influential congressmen have already begun to refer to emissions trading as foreign aid.

Other assumptions made by the Administration include: enough “opportunities for cheap emissions reductions . . . in the developing world” to meet European, Japanese and American demand for emission permits and a perfectly efficient trading system.

Electricity Deregulation

On March 25 the Clinton Administration announced its Comprehensive Electricity Competition Plan. The plan, according to the Administration will save consumers $20 billion per year or $230 per household, while providing substantial environmental benefits.

The plan includes various environmental provisions that the Administration claims will produce cleaner air and reduce greenhouse gas emissions. Three billion dollars will be provided for the Public Benefits Fund to support conservation and energy efficiency measures, research and development for clean technologies, and deployment of renewable energy technologies. A Renewable Portfolio Standard will require that a minimum of 5.5 percent of electricity produced come from non-hydroelectric, renewable sources, subject to a cost cap. The plan also calls for emission trading authority for nitrous oxide emissions as well as consumer information requirements so that consumers can choose power from cleaner sources. The administration estimates that these measures will reduce greenhouse gas emissions by 25 to 40 million metric tons in 2010 (U.S. Newswire, March 25, 1998).

Strong opposition from Congress prompted the Administration to drop a proposal by the Environmental Protection Agency to include a provision to limit carbon dioxide emissions, angering environmentalists. But the Administration said the proposal may resurface before the environmental committees of Congress who may be more sympathetic to the Kyoto Protocol.

The EPA is claiming partial victory, however. The plan gives EPA “streamlined authority . . . to cap nitrous oxide emissions a minor greenhouse gas already regulated by the agency.” They hope that this “important precedent” will lead to additional, far-reaching authority, enabling them to put a carbon emissions cap in place by 2008 (The Washington Times, March 27, 1998).

A Free Market Response to Electricity Deregulation

Competitive Enterprise Institute fellow in regulatory studies, Wayne Crews criticized President Clintons electricity deregulation plan, saying, “If the Clinton Administrations Comprehensive Electricity Competition Plan is to deregulate electricity, government oversight of the power industry must decrease. That doesnt happen here.”

Crews also argues that proper deregulation would abolish franchise monopolies, which may actually help renewable energies to compete in a more naturally evolving marketplace. “Mandatory access offers no end to regulation. But abolishing [monopolistic] franchises instead will give energy entrepreneurs large, small, and renewable the freedom they need to thrive,” said Crews (www.cei.org).

Congressional Republicans Aim to Stop Kyoto

In a speech to utility executives at the Edison Electric Institute CEO meeting Rep. James F. Sensenbrenner, Jr. (R-Wisc.) said that the Kyoto Protocol is “fatally flawed.” Citing a study by Charles River Associates, Sensenbrenner pointed out that compliance with the treaty would cost the U.S. $230 million and 3 million jobs in 2030.

He also discussed the tradition of withholding international treaties from the Senate. Past presidents have withheld treaties from Senate ratification for long periods of time. The 1949 Genocide Treaty, for example, was not sent to the Senate for ratification until 1989. Sensenbrenner said that the Senate may hold up something that Clinton really wants, such as nuclear disarmament, to force submission of the Kyoto Protocol.

Another fear is that the Clinton Administration may try to implement the protocol using existing authorities under the Clean Air Act. Sensenbrenner foresees a constitutional confrontation in the event of such attempts by the administration.

Sen. Larry Craig (R-Idaho), chairman of the Senate Energy and Natural Resources Committees forest subcommittee, hopes to avoid such a confrontation by creating a “brick wall” which would remove all money earmarked for global warming research from the budgets of the Environmental Protection Agency, the Departments of Agriculture and Energy, and the Army Corps of Engineers (The Electricity Daily, March 30, 1998).

Sensenbrenner also told the executives that educating the American public about the costs of implementing the protocol was key to its defeat. “If we tell the people how much its going to cost . . . the American people will be outraged,” he said (BNA Daily Environment Report, March 27, 1998).

Also in a dear colleague letter Rep. Sensenbrenner and Rep. John Dingell (D-Mich.), ranking Democrat on the House Commerce Committee called on President Clinton to scrap the Kyoto Protocol in light of the “arrogance” displayed in remarks (reported in our last issue) made by Raul Estrada-Oyuela, chair of the Kyoto conference. Estrada criticized the U.S. Congress suggesting that “perhaps they should get in touch with the rest of the world” (Greenwire, March 23, 1998).

You Be the Judge

The Clinton administration cant seem to get its story straight with regards to implementation of the Kyoto Protocol. In February, Under Secretary of State Stuart Eizenstat told the U.S. Senate Committee on Foreign Relations that “We have no intention through the back door or anything else, without Senate confirmation, of trying to impose or take any steps to impose what would be binding restrictions on our companies, on our industry, on our business, on our agriculture, on our commerce, or on our country, until and unless, the Senate of the United States says so.”

In December 1997 Vice President Al Gore said, “Whether there is an agreement in Kyoto or not, the United States is prepared, under President Clintons leadership, to unilaterally take steps that we believe should be taken in order to deal with this problem.”

And on March 31, 1998 President Bill Clinton said at a roundtable in Botswana that the U.S. is “implementing an aggressive plan to reduce” greenhouse gas emissions (Agence France Press, March 31, 1998). Who is telling the truth? You be the judge.


Scientists at Japans Toyota Motor Corp. have reported that through genetic engineering they enhanced the ability of trees to absorb vehicle emissions. It takes 20 regular trees to absorb the annual emissions of one car, but Toyotas scientists say they can improve this performance by 30 percent. They have already created trees that absorb nitrous oxides by doubling the number of chromosomes in experimental trees widening air inlets on stems and leaves.

Some environmentalists, however, are not pleased. “If we want to reduce [nitrous oxide], we should reduce our automobile production and set lower emission standards,” says Yuichi Sato, deputy director of research at Japans Forestry Agency (Business Week, March 30, 1998).

CO2 Eating Algae

Yoshihisa Nakano, a professor of nutrition chemistry at Osaka Prefecture University says that manmade carbon dioxide could be used to breed a single-cell algae called euglena. Euglena, which is used to feed cultivated fish, increases survival ratios among stocks. Nakano also believes that the algae could be used to feed domestic livestock and maybe even humans.

Nakano discovered that the algae reproduces most rapidly in air containing 15-20 percent carbon dioxide and his studies indicate that one-hectare tank of the cultivated algae would absorb about 410 tons of carbon dioxide (The Daily Yomiuri, March 31, 1998).

United States Compliance Costs

A study by the non-partisan Wharton Econometrics Forecasting Associates (WEFA, Inc.) outlines the state-by-state costs of complying with the Kyoto Protocol for the United States. The U.S. agreed to reduce its emissions to 7 percent below 1990 levels by 2008-2012. This means that the U.S. will have to reduce its emissions by 40 percent below levels predicted by the year 2010.

The study shows, for example, that California would lose approximately 300,000 jobs and wages would fall by as much as 3.2 percent. Energy prices would rise significantly. Residential electricity rates would increase by 29 percent, home heating oil by 53 percent and natural gas by 52 percent.

Other states would be similarly damaged. New York and Texas, for example, would lose 110,000 and 123,000 jobs respectively. New Yorks residential electricity rates would increase by 37.7 percent while Texass increase by 58.7 percent. Higher energy prices, of course, would lead to higher grocery, housing and medical costs. The state-by-state breakdown of WEFAs estimates of the costs of Kyoto can be found at www.rnc.org/news/kyoto.

Canadas Compliance Costs

According to Carl Sonnen, an economist with the Ottawa-based Informetrica, compliance with the Kyoto Protocol will cost Canadians $100 billion over the next 15 years. But, says Sonnen, the costs of inaction would be even higher. In Kyoto Canada agreed to reduce greenhouse gases 6 percent below 1990 levels by 2008-2012.

Canadas Environment Minister Christine Stewart and Natural Resources Minister Ralph Goodale have refused to give any estimates as to the costs of compliance. But Stewarts spokesman, Mark Colpitts, conceded that the $100 billion figure is in agreement with various macro-economic studies on the issue. The study, however, does not take into account ingenuity and technological development, Colpitts added (Calgary Herald, March 10, 1998).

Natural Disaster Research

The Bermuda a Biological Station for Research, which has been carrying out research on the relationship between the ocean and the atmosphere since 1903, has teamed up with the insurance industry to create the Risk Prediction Initiative (RPI) to facilitate communication between scientists and the industry to better assess and manage climate-related risks.

A report released by the RPI came to the following conclusions:

  • “In the 1970s, 1980s, and early 1990s, tropical cyclone activity in the Atlantic Ocean was below average of the past 50-100 years, and large increases in coastal population and development occurred during this lull.”
  • “Increased coastal development in the primary cause of recent dramatic increases in the damage faced by society and insurers. Natural fluctuations in tropical cyclone frequency are another factor. The media and various advocacy groups often incorrectly attribute increased damages to global warming, but they are probably not so attributable” (Failsafe, March 1998).

Another report by Munich Re, the worlds top reinsurance company, shows that “Worldwide losses, economic and insured, from natural catastrophes last year were half those of 1996,” although “overall losses from catastrophes have generally increased over the last 10 years.” The report shows that even with inflation factored in “economic losses [of the last 10 years] are eight times as high and insured losses 14 times greater,” than the decade of the 1960s.

The report also warns, “The emerging phenomenon of climate change, which is expected to further compound the catastrophe risk in the future, continues to be a very serious danger.” The reports does not seem, however, to factor in increases in development in disaster prone areas (Journal of Commerce, March 13, 1998).

Backdoor Implementation

Some Senators fear that Undersecretary of State Stuart Eizenstat misled them when he told the Senate Foreign Relations Committee that “We have no intention, through the backdoor or anything else, without Senate confirmation, of trying to impose or take any steps to impose what would be binding restrictions on our companies, on our industry, on our business, or on our agriculture, or on our commerce, or on our country until and unless the Senate of the United States says so.”

The key verb in Eizenstats statement, however, is “binding.” The administration, The Weekly Standard (March 16, 1998) points out, will “threaten, cajole, plead with, urge, and cheerlead the states into abiding by Kyoto. And they will do it through the front doors, back doors, side doors, and trap doors, whether the Senate approves or not. Theyll just never do anything binding.”

Indeed, a confidential Environmental Protection Agency (EPA) document suggests that the Clinton Administration may be trying to implement the treaty without Senate ratification. The document argues that the EPA has the necessary authority under the existing Clean Air Act to restrict carbon dioxide emissions without Congressional approval. The document states that power plant “emissions must be reduced in order to fulfill the administrations commitment to clean air and to meet our greenhouse gas emissions budget under the Kyoto Protocol.” The EPA, however, would prefer to get clearer regulatory authority from Congress.

The document also reveals that the EPA wishes to implement a comprehensive regulatory scheme, which would include emission trading, in conjunction with electricity deregulation. But concedes, “these current authorities do not easily lend themselves to establishing market-based cap-and-trade programs.”

Moreover, in testimony before the House VA, HUD, and Independent Agencies Appropriations Committee, Carol Browner, Administrator of the Environmental Protection Agency, told committee members that “This budget reflects the Presidents determination that through the Research Fund for America the U.S. will lead the world in meeting the challenge of global warming by reducing greenhouse gases and doing so in a way that grows the economy.

The Climate Change Technology Initiative, a multi-Agency initiative including EPA, DOE, and HUD will enable us to meet that challenge. EPAs share . . . at $205 million, will help America meet its global new [sic] responsibility to reduce greenhouse gas emissions through market forces, new technology, and energy efficiency. EPA will work with industry to find sensible, cost-effective ways to meet the global warming challenge, all the while continuing on a path of economic growth.”

Seeking clarification on the Administrations position, Senators Trent Lott (R-MS), Jesse Helms (R-NC) and Chuck Hagel (R-NE) sent a letter to President Clinton on March 3 asking him to personally assure them that there are no plans to implement the treaty without Senate ratification. Rep. David McIntosh (R-IN) announced plans to monitor any such “implementation without raticification” in his House Subcommittee.”

The Greens Success at Kyoto

In a December 11, 1997 memo, Tom Wathen, Executive Vice President of the National Environmental Trust (NET), brags about their successes at the United Nations climate change conference in Kyoto, Japan. NET, formerly known has the Environmental Information Center, works to disseminate information to activists and the media on environmental issues to advance specific campaigns.

Wathen says that the campaigns “success did not come about from just two days or even two weeks of negotiations. The developments that ultimately made success at Kyoto possible were brought about as a result of two years of work by NETs campaign.” Over that two years NET “educated hundreds of reporters on the science and policy of climate change so that industry did not have a free hand in framing the debate.”

The result of this extended campaign, according to Wathen, is that “In a change from just six months ago, most media stories no longer presented global warming as just a theory over which reasonable scientists could differ. Most stories described predictions of global warming as the position of the overwhelming number of mainstream scientists.”

Other successes claimed by NET was assuring that “credible” scientists like Ben Santer and Ross Gelbspan [sic] were able to respond to “industry misinformation.” They also claimed credit for drawing attention to the “industry misinformation campaign by succeeding in getting CNN to suspend temporarily inaccurate industry advertising on the subject.” NET also takes credit for placing op-eds by Enron CEO Kenneth Lay, former UK environment minister John Gummer, and Michael Grubb of Londons Royal Institute of International Affairs,” among others.

Enrons spokesperson Carol Hensley confirmed NETs involvement in drafting Lays op-ed and said it was placed through Knight-Ridder and appeared in a number of newspapers, according to the Science & Environmental Policy Project (The Week That Was, January 19-25, 1998, www.sepp.org).

The memo stresses the importance of effective visuals. Wathen writes, “the principle problem with television coverage of climate change issues is that there are limited visuals to work with. Reporters can only run the stock footage of hurricanes and drought-parched fields so many times. So NET developed a series of computer animations showing progressive inundation of 15 U.S. cities as the climate warms. The animations spurred dozens of stories and ran on ABC, NBC, CBS, and CNN, and we fed them to local stations by satellite.”

Goodbye Emission Trading?

The Clinton Administration has made a lot out of its ability to negotiate a protocol that includes emission trading because they claim trading will significantly reduce compliance costs. Not so fast. The latest word from Raul Estrada-Oyuela, the head of the United Nations commission that negotiated the pact, is that emission trading may be phased out after eight years.

Emission trading, according to Estrada, may discourage developing countries from participating in the Kyoto Protocol. Developing countries worry that emission trading would allow developed countries to pollute. “We want to make sure were not creating a new crop for nations to sell,” Estrada said (Wall Street Journal, March 17, 1998).

While visiting the U.S. Estrada also discussed other issues related to global warming negotiations. As to the likelihood of developing country participation he does not see binding limits being imposed on developing nations in Buenos Aires. A framework for voluntary controls on developing country emissions is the most “optimistic” scenario. China, of course, has remained adamantly opposed to emission controls, voluntary or otherwise.

The private sector, said Estrada, is critical in achieving emissions reductions in the developing countries. He believes that the billions of dollars of foreign direct investment should be channeled into efficient technology through policy changes in both developed and developing countries.

The Kyoto Protocols enforcement mechanism will consist of progress reports produced by the participating country. Review teams will examine the reports and pass them along to the conference of parties, Estrada explained. This type of enforcement mechanism has worked well under the Montreal Protocol, according to Estrada. “Commitments either are fulfilled or non-compliance will be exposed,” Estrada said. Countries will not want to be exposed as not complying with international agreements.

Finally, Estrada estimated that it will be at least three years before the United States ratifies the Kyoto Protocol (BNA Daily Environment Report, March 17, 1998).

Satellite Data Under Attack

There is little doubt that the political debate surrounding global warming has turned science into a political tool that threatens the credibility of the scientific community. The most recent evidence of this is a scientific paper, submitted on February 23 to Nature by physicist Dr. Frank Wentz, a remote-sensing expert. Wentz claims to have found an error in the satellite data that, when corrected for, reveals a slight warming trend instead of a slight cooling trend the weather satellites have been tracking since 1979.

Drs. Roy Spencer of NASA and John Christy of the University of Alabama, Huntsville, who manage the satellite data, reject the papers conclusions. They have found two countervailing effects orbital procession and a calibration drift on radiometers that create a false warming. The false cooling and false warming effects cancel each other out leaving the cooling trend intact. Furthermore, the satellite temperature data closely tracks temperature readings from weather balloon radiosondes which do not experience any of the warming or cooling anomalies present in the satellite data.

The disturbing aspect of this story is how the paper was distributed prior to being peer-reviewed, to the Clinton Administration, Robert Watson, chairman of the Intergovernmental Panel on Climate Change, various government-funded global warming scientists and very likely the press. Moreover, the paper has been rushed through peer-review a process that normally takes between four and six months.

For more information on this story see www.vision.net.au/~daly/ and www.sepp.org.

Global Warming and Vector-Borne Disease

One of the scary scenarios repeated ad nauseum has been global warming induced spread of malaria, dengue, and yellow fever to higher latitudes in the temperate regions and higher altitudes in the tropics. As with so many warming claims (including the global warming hypothesis itself) a little historical perspective reveals the silliness of these concerns.

A letter published in the British medical journal The Lancet (March 14, 1998) by Dr. Paul Reiter with the Centers for Disease Control and Prevention, Dengue Branch, discusses the past of these diseases. “Until the 20th century,” writes Reiter, “malaria was a common disease throughout much of the USA, and it remained endemic until the 1950s.” Yellow and dengue fever were also common until the 1940s.

He also writes that “Even in the present century, devastating epidemics [of malaria] occurred as far north as Archangel on the Arctic Circle, and the disease remained endemic in such untropical countries as Holland, Poland, and Finland until after World War II.”

Recent malaria epidemics such as the one in Madagascar have been blamed on global warming. Rieter, however, points out that “they occurred well below the maximum altitude for transmission and were clearly a sequel to a breakdown of control infrastructure. Moreover, similar epidemics had taken place in the same areas in 1878 and 1895, and local records show no great change in temperature.”

Dr. Reiter concludes, “The distortion of science to make predictions of unlikely public-health disasters diverts attention from the true reasons for the recrudescence of vector-borne diseases. These include the large-scale resettlement of people (often associated with major ecological change), rampant urbanization without adequate infrastructure, high mobility through air travel, resistance to antimalarial drugs, insecticide resistance, and the deterioration of vector-control operations and other public-health practices.”

Trees on the March

Another environmentalist bugaboo is about to fall by the wayside. Environmentalists have been predicting that rapid global warming would lead to the mass extinction of trees because they would be unable to migrate fast enough to cope with changing temperatures. However, The New York Times (March 10, 1998) reports on research showing that “many of the most important and valued species of trees have in the past migrated fast enough to keep up with temperature changes as least as large and rapid as the global warming of 2 to 6 degrees Fahrenheit that is predicted, as an annual average, over the next 100 years.”

According to Louis F. Pitelka, an ecologist at the University of Marylands Appalachian Laboratory this “downgrade[s] the rate of migration as an issue” in climate change. Some have suggested that humans have fragmented the natural landscape to such an extent that it may hinder the tree migration in the case of global warming. But, says Dr. Dorothy M. Peteet, a paleoecologist with the NASA Goddard Institute for Space Studies in New York, if the climate were to warm quickly, “I would think the trees would do exactly what they did in the old days.”

El Nio Is No Child of Global Warming

According to research at Australias Commonwealth Scientific and Industrial Research Organization (CSIRO), El Nio events in the 1990s cannot be blamed on manmade global warming. The researchers, led by Dr. Rob Allan of CSIROs Division of Atmospheric Research, spent eight months analyzing global climatic records from the last 125 years. The data collected at 700 land locations and by ships showed no correlation between global warming and El Nio events.

The research did, however, discover other climatic factors that influence the frequency and nature of El Nio. “I have found,” said Dr. Allan, “two additional longer climatic fluctuations [fluctuations in atmospheric pressure and sea-surface temperature] linked with El Nio. One occurs every 11 to 13 years; the other, every 15 to 20 years.”

These fluctuations, says Allan, “are occurring at the same time as the El Nio that we tend to focus on with the two- to seven-year time frame,” and have “probably occurred for thousands of years.” They interact with El Nio in such a way that they sometimes reinforce it and dampen it at other times. “Its the interaction between the three climatic patterns that is giving us the variations that we see, like long El Nio sequences in the 1990s,” Dr. Allan said. “At the moment, we dont know what the physical mechanisms underlying them are” (The Canberra Times, March 10, 1998).