Bush Rebuffs EU, Again

The big question facing international climate negotiators is what will replace or follow the Kyoto Protocol when its emission reduction targets expire at the end of 2012. It can take years to negotiate a climate treaty and additional years for the requisite number of countries to ratify it. Realistically, negotiators have until late 2009 to resolve all substantive disagreements if there is to be no gap between the 2008-2012 Kyoto compliance period and the start of a new treaty.

To help shape the successor treaty to Kyoto, President Bush last week hosted a meeting of the world’s 16 largest greenhouse gas emitters. Bush said the major emitters’ “guiding principle is clear: We must lead the world to produce fewer greenhouse gas emissions, and we must do it in a way that does not undermine economic growth or prevent nations from delivering greater prosperity for their people.”

Well, yes and no. Few countries are willing to undermine their own economic growth to reduce emissions, but some relish the prospect of using climate treaties to undermine U.S. economic growth. Kyoto, for example, was set up to impose greater relative burdens on U.S. firms than on their European Union (EU) counterparts.

Several factors give European firms a competitive advantage under Kyoto, which measures emission reductions against a 1990 baseline. First, the UK and Germany each achieved huge one-time emission reductions in the 1990s through actions largely unrelated to environmental concern. The UK electric sector switched from subsidized coal to lower-carbon free-market natural gas. Germany shut down obsolete, inefficient Stalin-era power plants and factories in the former East Germany. Kyoto allows these one-time reductions to count against Europe’s total. Other factors operating in Europe’s favor include low-to-negative population growth and lackluster economic performance during the late 1990s and early 2000s. 

Thus, it is not surprising that Yale University economist William Nordhaus calculated that Kyoto would impose higher compliance costs on the United States than on all other industrialized countries—Europe, Canada, Japan, and Russia—combined. Given Kyoto’s impotence as climate policy—it would avert a hypothetical and unverifiable 0.07C of warming by 2050—Kyoto is largely an EU trade strategy masquerading as an environmental treaty.

At last week’s major emitters conference, Bush once again declined to Europeanize U.S. climate policy. The Europeans want a treaty that toughens Kyoto’s emission reduction targets and extends Kyoto’s cap-and-traded system to more countries. Bush, in contrast, called for an agreement that defines a long-term emission reduction “goal” and then lets each country “design its own separate strategies” for moving “towards” the goal based on “each country's different energy resources, different stages of development, and different economic needs.”

Predictably, Bush’s stance drew fire from EU officials and green groups. John Ashton, the UK special representative on climate change, commented: “There was very strong support [from other countries] that the effort needs to be led by a system of mandatory targets by all industrialized countries, including the US. Their proposition that you can have national targets is like saying that we will make promises to ourselves but not to anyone else.”

This is silly. Nations make promises to themselves all the time without making promises to anybody else. It’s called lawmaking! The history of U.S. environmental legislation proves that we do not need to make promises to Europe to make binding promises to ourselves.

The problem with a treaty like Kyoto is that if you later discover the promises you made are foolish, unrealistic, or harmful, you cannot undo them without renegotiating the treaty with 160 other countries. Since some of those countries hope to profit from our self-inflicted wounds, they would have little reason to let us off the hook no matter how detrimental the treaty proves to be to our national interest.

Bush’s approach would not lock America into mistakes that cannot be undone. That’s a smarter way to go.