William Yeatman

Summary of Brookings Policy Brief No. 17 “A Better Way to Slow Global Climate Change”

by William Yeatman on October 24, 1997

in Kyoto Negotiations

The Brookings Policy Briefing, by Warwick J. McKibbin and Peter J. Wilcoxen, discusses the currently favored U.S. proposal, to be presented at the Kyoto Conference later this year, for the reduction of CO2 emissions. The proposal suggests an international system of tradable emissions permits with the total amount of emissions kept at the 1990 level. International negotiators would decide how the permits are initially distributed among the participating countries. Each country could then decide for itself how to allocate the permits internally. These permits could than be freely traded on an international basis. The system would in the beginning only involve developed countries with the intention that the developing countries would join at a later date.

The proposal was endorsed by some well-known economists – Kenneth Arrow, Dale Jorgenson, Robert Solow, Paul Krugman, and William Nordhaus. McKibbin and Wilcoxen suspect that some of the enthusiasm about international trading permits is more related to the theoretical concept than to the practical application, and note that not enough attention has been given to the practical problems of such a system. The authors then consider why an international system of tradable permits looks so favorable in theory.

The principal idea is that any company which produces CO2 emissions has to obtain enough permits to balance the amount of CO2 emissions it produces. The decision of how the permits are distributed among the participating countries, for example according to population, or actual CO2 emissions, would be subject to international negotiation and agreement. How they are allocated domestically is free for every country to decide. After that companies could trade their permits world-wide without any restrictions.

The advantages seen in this theoretical concept are:

The emissions could be kept to a pre-determined level.

This level of emissions would be achieved with a minimum of costs.

This would be possible because firms with the lowest abatement costs would undertake the abatement and then sell permits to companies which face higher costs and therefore would rather buy permits.

The government can control how the burden of the abatement costs are distributed among companies.

The government can influence the distribution of the costs through the way it allocates the permits in the beginning, for example through free distribution or auctions.

The authors then examined the problems that would arise in the practical application of the concept, which seems so intriguing in theory. McKibbin and Wilcoxen consider the sulfur emissions trading scheme in the U.S. as an example that the system can work for domestic problems, but they foresee many problems for a CO2 emission permits trading system on a world-wide basis.

One of the problems they see is that the emissions would be cut back to 1990 levels and kept there without any concern about the costs such a reduction would imply. Estimates of the economic impact of such a policy range from -0.5 percent increase in GDP per year for the U.S. to up to 2 percent of decline in GDP per year. Most of the studies lay between 1-2 percent decrease of GDP per year.

In contrast, the benefit would be the avoidance of potential costs from climate change. However very little is known about these possible costs and the impact of reduced CO2 emissions on the climate. Some studies have tried to estimate the potential costs of climate change in a scenario with an increase in temperatures of 2.5 – 3 C. The studies say the costs could be as much as 1.3 percent of GDP every year for the U.S. around the year 2050. The benefits would be much smaller for a mere restriction of emissions to the 1990 levels.

McKibbin and Wilcoxen contend that the evidence suggests that there is no real need to keep the emissions at the 1990 levels, because most of the studies estimate that the costs would be far greater than the potential benefits. In addition, the costs would arise now, whereas the benefits would occur far in the future.

The second problem mentioned in the Policy Briefing would be the enormous transfer of wealth from the U.S. to other countries, particularly to developing countries, as a result of the system. Some regard this as a positive part of the agreement, but the sheer amount of the transfer sum makes it unlikely that there would be enough political support given the usual problems of much smaller foreign aid budgets in obtaining approval. The enormous transfer sums would lead to large distortions in the international trade system; the result could be more volatility in exchange rates and the widening of the U.S. trade deficit. Developing countries would receive a huge amount of transfer money, however, most of the money would have to be invested in “environmental technology” to reduce emissions, even though most of these countries are in urgent need of money to improve infrastructure, education and health care systems. Developing countries are not expected to participate from the start, but without these countries’ participation, probably the most important factor of the concept would be lost (the difference in abatement costs), and the cost savings thus would be much smaller.

An additional problem would be that none of the participating governments would have any incentive to monitor the agreement. The costs would fall on domestic firms while the benefits would mostly go to other countries. As a result, there might be a tendency by national governments to “overlook” violations by domestic companies. A complex and expensive international monitoring system would be needed to enforce the treaty.

The authors then explore a possible alternative: a scheme of national permits and emissions fees. Each country would receive permits according to its 1990 level of emissions, and these could be distributed among companies however the country wished to do so. Besides these permits, every company would be able to buy additional permits from its national governments for a specific fee, for example, $10. Therefore, companies could buy permits from two sources – other companies and the government.

This system would not insure a specific emission level, but companies would always have an incentive for abatement if it could be done for less than the fixed fee. The result would not be a cap on emissions, but the abatement would be done with a minimum of costs.

The authors compare the scheme favorably to a carbon tax, because it could save companies a lot of money if the government decides to give away the permits up to the 1990 level for free. A tax would start with the first ton of emission, while the fee would only apply to companies that exceed their 1990 emissions level. McKibbin and Wilcoxen think such a scheme would provide a clearer picture of what the real costs of abatement are and providing this information might be important for future policy decisions if there is less uncertainties about cost and benefits in financial terms of climate change policy. It would also provide greater incentives for monitoring on a national level, because revenues through the fees could be added to governments’ budgets.

McKibbin and Wicoxen also suggest that the system would be flexible enough to adopt a possible change in policy in case scientific evidence would emerge that climate change is a bigger or smaller problem than expected; and if more information become available about the real costs of emission reduction. It would also allow non-participating countries to join by simply adopting the policy at home without the need for further international negotiations.

McKibbin and Wilcoxen conclude that their proposal would be much easier to implement and politically acceptable to more countries. It would probably slow the growth of CO2 emissions without a big distortion to the international system of trade.

They see, therefore, the choice as being not between an international trading system and their proposal, because they think the international trading system has no chance of agreement – but between their proposal and no policy at all.

Satellite Temperature Data: How Accurate?

by William Yeatman on October 19, 1997

in Kyoto Negotiations, Science, Small business

In a letter to Nature (March 13, 1997) James W. Hurrell and Kevin E. Trenberth questioned the reliability of the satellite temperature data which show a slight cooling trend over the last 20 years. They argue that the data contain significant discontinuities due to various factors, the most important being the replacement of worn out satellites. The main contention in the Hurrell/Trenberth paper is that there are two “spurious” downward jumps in the satellite record due to changes in satellites and that the real temperature trend is slightly positive.

There are some serious errors with the method used by Hurrell and Trenberth, however. Drs. John R. Christy, Roy W. Spencer, and William D. Braswell, who track and publish the satellite temperature data, point out those errors in correspondence to Nature (September 25, 1997).

There are two methods to directly measure the temperature of the lower troposphere (surface to 7 km). One is balloon-borne instruments known as radiosondes which rise through the atmosphere. The other are microwave sounding units (MSUs) mounted on satellites which measure the intensities of microwave emissions from atmospheric oxygen which are proportional to temperature.

There is strong agreement between the two records even over the periods where Hurrell and Trenberth claim that the spurious jumps take place. Another data set is also available from the NOAA-06 and NOAA-07 satellites which were measuring temperatures at the time of the breaks that Hurrell and Trenberth claim to have discovered. These also agree with the MSU data.

Hurrell and Trenberth ignore the balloon data and estimate atmospheric temperatures using sea-surface temperatures (SSTs). There are a couple of problems with this method, however. First, the regions where Hurrell and Trenberth find the greatest disagreement is in the Pacific and Indian Oceans where ship data are scattered. Buoy data have also been available since the early-1980s. But, as Christy points out in correspondence with The Cooler Heads Newsletter, “the SST dataset is not homogeneous for these critical regions. Ships and buoys do not measure the water temperature to the agreement necessary for the types of variations we look at for climate change over a decade or so.”

Second, Hurrell and Trenberth derive atmospheric temperatures from the SSTs using general circulation models (GCMs). Christy argues that “There is considerable evidence that SSTs and the atmospheric temperature do not behave in the rigid fashion believed by Hurrell and Trenberth and represented by their simple [linear] regression model. Several studies show that for long periods of (months to years) there are differences between SSTs and air temperatures due to the natural variability of the vertical structure of the atmosphere.”

Once again advocates of the global warming hypothesis use imperfect models to attack actual observed data, standing the scientific method on its head. In the past, when data contradicted the models, the models were rejected. With highly politicized global warming science, however, empirical evidence that contradicts the politically predetermined outcome is either ignored or explained away as anomalous.

What Do Scientists Say?

A survey of state climatologists by Citizens for a Sound Economy found that there is little support for the global warming hypothesis. When asked if they agreed with the statement by President Clinton, “The overwhelming balance of evidence and scientific opinion is that it is no longer a theory but now a fact, that global warming is for real. There is ample evidence that human activities are already disrupting the global climate.” 36 percent agreed, while 58 percent disagreed.

Asked whether “recent global warming is largely a natural phenomenon,” 44 percent said yes while 17 percent said no. Nine out of ten surveyed agreed that “scientific evidence indicates variations in global temperature are likely to be naturally-occurring and cyclical over very long periods of time.” Eighty-nine percent of the climatologists agreed that “current science is unable to isolate and measure variations in global temperatures caused only by man-made factors,” and 61 percent said that the historical data do not indicate “that fluctuations in global temperatures are attributable to human influences such as burning fossil fuels.”

Sixty percent of the respondents said that reducing man-made CO2 emissions by 15 percent below 1990 levels would not prevent global temperatures from rising, and 86 percent said that reducing emissions to 1990 levels would not prevent rising temperatures. Finally, by a 39 to 33 percent margin, more climatologists say that, “evidence exists to suggest that the earth is headed for another glacial period.” The survey can be found at www.cse.org/cse/ and www.globalwarming.org.

What Does the Science Say?

Dr. S. Fred Singer of the Science and Environmental Policy Project has just released a overview of the current state of climate change science and asks whether drastic reductions in greenhouse gases are justified.

The objective of a global climate treaty would be to prevent “dangerous interference with the climate system.” But, according to Singer, there is no scientific evidence that would suggest what level of interference would be dangerous. An article appearing in Science argued that 350-400 ppm is a dangerous level of CO2. However, they base this on an arbitrary “dangerous” temperature increase of 2 degrees C.

Singer also challenges the claim in the 1996 report of the Intergovernmental Panel on Climate Change (IPCC) that it is now possible to discern the human influence among the noise on climate change. First, the “natural” variations are derived from computer models rather than actual observations. Second, the computer models exclude the cooling effects of mineral dust and of smoke and soot from burning biomass and the cloud production effects of sulfate aerosols.

Singer also contends that warmer weather would be beneficial to mankind. Warmer global temperatures, the models predict, would reduce the temperature gap between the northern and southern hemispheres reducing storm intensity at the mid-latitudes. Northern hurricanes, for example, have fallen in both frequency and intensity over the last 50 years. Rainfall has fallen worldwide for the last 40 years. As for rising sea levels Singer argues that they are correlated with falling temperatures.

Singer concludes there is little evidence to justify drastic reductions of greenhouse gases. The best way to avoid the adverse effects of climate change is to adapt. He notes that societies that are economically advanced are the least affected by changes in climate and more readily adapt to changes. Economic development (which will require greater emissions) then is necessary if we are to avoid adverse effects which may arise from climate change. The report is available by contacting SEPP at (703) 352-7535 or by e-mail at singer@sepp.org.

Survey of State Climate Experts Casts Doubt on Link Between Human Activity and Global Warming

by William Yeatman on October 6, 1997

in Kyoto Negotiations, Science

(Washington, DC) — A majority of state climatologists say reducing man-made carbon dioxide emissions to1990 levels or lower would not prevent warmer temperatures on earth, according to a new survey commissioned by Citizens for a Sound Economy (CSE) Foundation. That’s because, according to those surveyed, most climatologists believe global warming “is a largely natural phenomenon.”

“In the debate over global warming, we’ve recently heard from a lot of so-called experts that global warming is for real and that we humans are to blame,” says Paul Beckner, president of CSE Foundation. “While President Clinton and others might think so, those who deal with climate issues day in and day out disagree, and we think it’s important that the American people know that there are in fact climate experts in this country who do disagree with the conventional wisdom on global warming.”

Fifty-eight percent of the state climatologists surveyed said they disagreed with President Clinton’s claim that “the overwhelming balance of evidence and scientific opinion is that it is no longer a theory, but now fact, that global warming is for real” and with the statement that “there is ample evidence that human activities are already disrupting the global climate*” Only 36 percent of the climatologists agreed with Clinton’s assertion.

By a 44 to 17 percent margin, climatologists say that “recent global warming is a largely natural phenomenon,” while nine out of 10 of the climatologists surveyed agreed that “scientific evidence indicates variations in global temperature are likely to be naturally-occurring and cyclical over very long periods of time.”

Six out of 10 of the climatologists disagreed that actions by developed nations to reduce man-made carbon dioxide emissions by 15 percent below 1990 levels will prevent global temperatures from rising. An even higher number, 86 percent, disagreed that reducing emissions to 1990 levels will prevent rising temperatures. Interestingly, by a 39 to 33 percent margin, more state climatologists say that “evidence exists to suggest that the earth is headed for another glacial period.”

Eighty-nine percent of the climatologists said that “current science is unable to isolate and measure variations in global temperatures caused only by man-made factors.” Sixty-one percent of the state climate experts said historical data does not indicate “that fluctuations in global temperatures are attributable to human influences such as burning fossil fuels,” and nearly all said the earth “experienced large global temperature fluctuations with both warming and cooling periods prior to the beginning of the industrial age” and the advent of burning fossil fuels.

Countering claims by theorists that weather patterns have been changing due to global warming, 72 percent of state climatologists say weather events in their states in the past 25 years have not been more severe or frequent. Among the19 percent who said they were, less than a third attributed the changed weather patterns to global warming.

Among other findings in the survey, 72 percent say carbon dioxide emissions will continue to rise, despite efforts to curb man-made sources. Eighty-six percent of the climatologists said that variations in solar output are a likely cause of long-term temperature fluctuations on earth, and an even higher 91percent said variations in the earth’s orbit are a likely cause of temperature fluctuations. The climatologists were unanimous in agreeing that “even if there were no human beings, the earth’s climate would constantly be changing.”

The survey was conducted by American Viewpoint of Alexandria, Virginia from September 23 to October 3, 1997. The results have a margin of error of plus or minus 4.7 percent. Forty-eight states have official climatologists. Of the 48, American Viewpoints was able to contact and survey 36 of them. Ninety-two percent of the climatologists said they did not receive direct funding from state or federal environmental protection agencies, and 86 percent said they did not receive direct funding from business or industry.

CSE Foundation is a 501(c)(3) non-profit, non-partisan research and education organization established in 1984. It accepts no government funding.

[For more information or a complete copy of the survey questions and results, please call Peter Cleary at (202) 942-7608.]

To receive more information on CSE or CSE Foundation, or to comment on our publications, call, write, or E-mail:

Citizens for a Sound Economy
Citizens for a Sound Economy Foundation
1250 H Street, NW, #700, Washington, D.C. 20005-3908
1-888-JOIN-CSE, (202) 783-3870, Fax (202) 783-4687

Gore Lore; IPCC, Developing Nations Must Cut Emissions; China and Others Support Australia

by William Yeatman on October 5, 1997

in Politics

Gore Lore

Al Gore recently visited Glacier National Park in Montana to heighten fears about global warming. He warned that global warming is causing the glaciers to retreat, threatening Montana’s tourism industry. There’s just one problem, according to the National Climatic Data Center of the U.S. Department of Commerce, there has been no warming trend in Montana over the past century.

A 1989 article published in Science showed that more that 70 percent of mountain glaciers in the U.S., Soviet Union, Iceland, Switzerland, Austria and Italy were retreating while 55 percent of the same glaciers were advancing. According to Keith Echelmeyer of the University of Alaska’s Geophysical Institute, “To make a case that glaciers are retreating, and that the problem is global warming, is very hard to do. The physics are very complex. There is much more involved than just the climate response” (The Electricity Daily, September 9, 1997).

IPCC, Developing Nations Must Cut Emissions

A draft of a final report of the Intergovernmental Panel on Climate Change (IPCC) states that if global climate change is to be averted, developing nations must reduce carbon dioxide emissions. Even a large reduction of CO2 emissions would not prevent global warming or the rising sea levels that would result. According to the report, “Even under the strictest emission cut proposal [a 2 percent yearly reduction of CO2 emissions beginning in the year 2000], however, the sea level is projected to rise by more than 40 centimeters by 2100 from the current level and the global-mean temperature is expected to increase by 1.5 C or more . . .” (Japan Economic Newswire, September 4, 1997).

The Financial Times of London (September 17, 1997) reported that the U.S. “issued a stern warning that developing countries must this year join the industrialized world in agreeing to reduce greenhouse gases associated with climate change.” U.S. Undersecretary of State Timothy Wirth is quoted as saying, “If you get brutally realistic about climate change, the countries that are richer are for the most part less vulnerable to climate change . . . . Many developing countries are fast realizing it [greenhouse gas emissions reductions] is in their own self-interest.”

China and Others Support Australia

The Australian federal government has reported that China, Italy and Spain have come out in support of Australia’s position of differentiated greenhouse gas emission targets. Acting Prime Minister Tim Fischer said, “I happily enough was able to persuade, in a few seconds flat, China to be very supportive of our position. [China’s chief economic minister] Zhu Rongji found himself much attracted to our realistic, achievable targets process. Interlocutors in Italy and Spain likewise – as long as they’re a safe distance from Brussels – were also very much in support of achievable, realistic, differentiated targets rather than the Brussels connotation” (AAP Newsfeed, September 17, 1997).

Other International News

Japan, according to the Ahashi News Service (September 5, 1997), will likely propose a greenhouse gas emission reduction target of approximately 5 percent lower than 1990 levels at the UN conference it is hosting in Kyoto. There will be at least three distinct negotiating positions for Kyoto: Japan’s; the European Union’s call for a 15 percent reduction from 1990 levels; and Australia’s support of differentiated targets based on each country’s marginal abatement costs. The U.S. has not yet made a formal proposal, but it will probably fall somewhere between Japan and the EU with a tradable emission scheme to implement the proposed reductions. With such wide disagreement the parties may have to postpone signing a binding treaty for the future.

Canada’s Natural Resources Minister, Ralph Goodale, has said that Canada will not promise big cuts in greenhouse gas emissions at the summit in Kyoto. Pointing to the world’s inability to reach the voluntary targets set in 1992, Goodale said, “That would be a very frustrating outcome for the world at large, to go through a process that doesn’t bring the results people want” (The Energy Daily, September 8, 1997).

Also in Canada, Environment Minister, Christine Stewart, is going to launch an education campaign to warn Canadians of the approaching danger of global warming. The campaign will be built upon six Environment Canada reports which purport to show the effects of climate change on each region of the country (Calgary Herald, September 6, 1997).

Australia’s Labor Party environment spokesman, Duncan Kerr, affirmed the government’s stance to not accept unfair emission reduction targets at the climate talks in Kyoto. While he did not endorse the government’s differentiation model, he did assert that Australia must seek accommodation for its dependence on mineral exports and fossil fuels. “We should work to ensure that any emerging global consensus is sensitive to the particular unique circumstances we possess,” he said (AAP Newsfeed, September 5, 1997).

Reassessment of the IPCC; Effects of Smoke Particles on Clouds and Climate; Clinton’s Waffled Speech

by William Yeatman on October 5, 1997

in Science

Reassessment of the IPCC

The report of the Intergovernmental Panel on Climate Change has become the bible for those advocating immediate and heavy reductions in greenhouse gas emissions. An article which originally appeared in the New Zealand Science Review by Dr. Vincent Gray and republished by the Heartland Institute reassesses the claims made in the IPCC report.

One of the problems with the report is its projections of future CO2 emissions. The latest figures from the Carbon Dioxide Information and Analysis Center at Oak Ridge show a 0.026 gigatons of carbon (GtC) per year increase in emissions from 1989 to 1994. Using the IPCC’s estimate of 6.25GtC for 1996 this would suggest that emissions will be about 6.35GtC in the year 2000, yet the IPCC predicts 7.0GtC for that year.

Although the IPCC report lists 69 sets of figures for monthly mean concentrations of atmospheric carbon dioxide from around the world it only uses data from the Mauna Loa and South Pole stations. It states, “Data from the Mauna Loa station are close to, but not the same as, the global mean.” Why then, asks Gray, do they not use the global mean figures. Moreover, the IPCC predicts that atmospheric concentrations of CO2 will rise by 1.8 parts per million (ppm) each year, supposedly based on figures from the 1980s. However, Gray shows that in reality the average annual increase during the 1980s was 1.1ppm per year. From 1990 to 1994 the increase was only 0.08ppm per year. Instead of a doubling of atmospheric CO2 concentrations by the middle of the next century, if the rate of the ’80s persists, it will take 226 years for CO2 concentrations to double.

Gray also points out that the IPCC “isolates the only features of the global temperature record that suggest a possible agreement with greenhouse theory, but ignores those features that cast doubt on the theory.” He lists several of those features. For example, from 1910 to 1945 atmospheric CO2 rose about 3 percent but the world experienced the highest temperature rise this century (about 0.65 degrees C). The years between 1945 to 1978 saw a temperature decrease of 0.2 degrees C while atmospheric CO2 rose by 9 percent.

The article makes it clear that the IPCC took every opportunity to bias the report in favor of a predetermined conclusion. It documents many instances of selective use of data and biased interpretation of the data. At one point Gray states: “According to the IPCC, any climate change, however short, that agrees with greenhouse theory is a long-term trend. Any climate change, however extensive, that does not agree with greenhouse theory is either ignored (like the global drop in temperature between 1940 and 1978); too short to be representative; or an anomaly that has to be explained.”

A Whale of a Study

One of the predicted effects of global warming is retreating ice in the Antarctic. A new study in Science (September 4, 1997) by William de la Mare looks at sea-ice extent in the Antarctica. Estimates from satellite observations, beginning in 1970 have shown no clear trends in sea-ice extent in the Antarctica. However, de la Mare has examined whaling records which were kept for nearly every whale caught along the sea ice edge since 1931. The study shows that there was a decline in the area covered by sea ice of 25 percent from the mid 1950s to the early 1970s. Prior to this, records show that the sea ice was stable from 1931-1954.

An editorial about the article, appearing in the same issue by Eugene Murphy and John King, said, “There is now increasing evidence globally supporting the view that such rapid changes in the Earth’s climate systems can occur naturally, and indeed such changes have probably taken place in the past in the Southern Ocean. This evidence indicates that the variability inferred by de la Mare may be natural and not connected to any human-induced changes. But as yet we do not know.”

The study excluded some of the available data which did not fit the selection criteria. “The data from land stations at South Georgia were excluded, as were catches after the 1956/57 season for species other than minke whales. This resulted in 42,258 records. No records satisfied the selection criteria from 1960 to 1971 inclusive, when sei whaling predominated.”

It is also interesting to note that there was a fall in global temperature of 0.2 degrees C from 1945 to 1978, covering the time period of purported sea ice retreat.

Effects of Smoke Particles on Clouds and Climate

An article in Science shows that smoke aerosol particles generated from burning biomass can increase the cloud reflectance of sunlight. Using satellite data over the Amazon Basin and Cerrado, researchers Yoram J. Kaufman and Robert S. Fraser found that smoke increased cloud reflectance from 0.35 to 0.45, while reducing droplet size form 14 to 9 micrometers. Thus smoke particles appear to have a small cooling effect on the climate (Science, September 12, 1997).

Waffled Speech

In a speech at American University, President Clinton stated that, “We could reduce them [greenhouse gas emissions] 20 percent tomorrow with technology that is already available at no cost if we just changed the way we do things.” Later the White house had to backtrack, admitting that they could not find a single academic source to support the statement.

Elsewhere in the speech Clinton stated that the U.S. should “. . . continue our efforts to expand trade to the rest of the world.” He pointed out that, “We have less than 5 percent of the world’s people in this country; we have about 20 percent of the world’s wealth. We cannot maintain our wealth unless we sell what we have to the other 95 percent of the people in the rest of the world.” That’s odd, as the administration also likes to point out, the U.S. produces 20 percent of the world’s CO2 emissions. Could there be a correlation between emissions, productivity and wealth? If Clinton is serious about expanding America’s wealth and trade he might want to rethink drastic cuts in U.S. CO2 emissions.

Texans Will Be Hard Hit by Climate Change Policies

by William Yeatman on October 5, 1997

in Blog

Texans Will Be Hard Hit by Climate Change Policies

A study by Glenn Schleede, sponsored by Consumer Alert, shows heavy economic losses for the people of Texas that may result from policies to limit greenhouse gas emissions. Coal, oil and natural gas supply 96.2 percent of the total energy needs of Texas. Furthermore, per capita energy use in Texas is 65.2 percent higher (in 1994) than the national average because of the state’s energy-intensive and agricultural activities. Some of the costs are the following:

Texans’ electric bills would increase 10.3 to 48.4 percent annually.

A $.50 per gallon tax on motor fuels would add $285 per year to each Texan’s tax payment to Washington.

A $100 per metric ton carbon tax would cost each household in Texas $491.

Small Steps Now, Big Steps Later

Writing in Nature (September 4, 1997), Biologist Stephen Schneider and Economist Lawrence Goulder, argue that although governments can wait to implement significant cuts in greenhouse gas emissions, they should begin to enact modest steps now to promote low cost carbon dioxide reductions. The authors propose a carbon tax as well as a subsidy to promote new energy technologies. “Introducing the carbon tax now could be a key factor in inducing the technological change that justifies deferring most abatement to the future.” They also argue that a carbon tax is the least-cost way to bring about reductions in CO2. Moreover, a carbon tax can be recycled or rebated by lowering other taxes, such as the income tax. A research subsidy, on the other hand, should be pursued only if it can be shown to be beneficial independent of climate change benefits.

We Have Time!

In response to a question posed by Sierra Magazine (Sept./Oct. 1997), “Are you concerned about global warming?” Robert Mendelsohn of the School of Forestry and Environmental Studies, Yale University, answered, “As long as the warming scenarios remain mild, as predicted by climate scientists, the magnitudes of the benefits to the U.S. economy would exceed the damages by $30 billion to $40 billion. Although we should monitor global warming carefully, it does not require rash and expensive mitigation strategies. We have time to further study its impacts and determine prudent responses.”

Climate Change Treaty – October, 1997

by William Yeatman on September 30, 1997

in Kyoto Negotiations, Politics, Science

Introduction

The UN Conference on Climate Change in Kyoto (Japan) is only a few weeks away and, most of the countries have announced what position they intend to bring into the negotiations. Even the U.S. has finally announced its proposal on the reduction of CO2 emissions, which was revealed in a speech by President Clinton on October 22, 1997 at the National Geographic Society in Washington.

The following discussion, Part I, will outline the positions of several countries on the issue and provide an outlook on the up-coming negotiations in Kyoto, while in Part II (“Tradable Emissions Permits – the Perfect Solution?”) emissions trading systems proposals shall be reviewed.

United States

President Clinton announced in his speech on October 23, 1997, at the National Geographic Society in Washington, that the U.S. will commit itself to reducing CO2 emissions to its 1990 emissions level by the years 2008-2012 and a further reduction in the following 5 years.

The Administration, in addition plans a $5 billion package of spending on R&D and tax incentives, energy-efficiency standards, Federal government energy initiatives and later on a national and an international emissions permit trading system.

The proposal also noted that the U.S. will insist that developing countries be involved in the reduction of greenhouse gases, otherwise, the U.S. threatened it would not sign-on to a treaty. In which form and what part developing countries would have to play in reducing greenhouse gases that would satisfy the Administration was left open.

The earlier prospect of a carbon tax brought so much criticism that the government has now distanced itself from the idea of an “open” carbon tax. The Administration now supports the politically more acceptable solution -a national and an international system of tradable emission permits. The advantages for the Administration are that in a trading system the economic burden is probably smaller and also less visible than in a tax regime. It can even earn some support from well-known economists,(1)  and be portrayed as an innovative, progressive, and market-oriented approach.

The government’s planned increase in spending on R&D will be less controversial since some industries and business will profit from it, while the costs are buried in the national budget and will fall on the taxpayer. The impact of the increased spending on R&D is still disputed, since not everyone agrees with the findings and projections of the Department of Energy Study about the “Potential Impact of Energy Technologies by 2010 and Beyond,”(2) which predicts rather dramatic technological improvements, with the expenses of increased government spending in principal covered by cost savings from less energy use.

The approval of the Senate to a treaty containing legally binding emissions targets depends strongly on the participation of developing countries in the agreement. In its vote (95-0) for the resolution co-sponsored by Senators Robert Byrd (D-W.VA) and Charles Hagel (R-NE) the Senate showed its unwillingness to sign on to restrictions for U.S. industry while developing countries such as South Korea, India, China, and Mexico are not required to participate, especially because these countries, in the near future, will be the biggest emitters of greenhouse gases. The timetable of bringing developing countries into a treaty and the form of their involvement will probably be deciding factor on whether the Senate will approve the treaty.

During the latest meeting in Bonn, Germany which was intended to prepare a draft for a treaty to be signed in Kyoto, the U.S. Administration presented its proposal and tried to win support among other countries. So far, however, there seemed to be disagreement about most key points of such a potential treaty, such as which emissions target, what timetable, who would have to participate, and how countries would be allowed to achieve the emissions target.

European Union

The EU is the biggest advocate for a drastic cut in greenhouse gas emissions and suggests a cut of CO2 emissions by 15% from the 1990 emissions level by 2010. The EU has criticized the U.S. proposal as insufficient and as not going far enough and has questioned the U.S. commitment to prevent global warming. The EU has a number of reasons for taking that position:

First, the political clout of the environmental movements in Europe (especially in Germany, but also in the Netherlands, Scandinavia and increasingly in France) puts European governments under pressure to call for a stringent reduction of emissions. European industry, fearing that Europe would go ahead with such a policy on its own, is concerned about its competitiveness in the global market, and therefore strongly argues for a “leveling of the playing field.” It is especially concerned about giving American and Asian competitors an additional advantage. Some in the industry are even hoping that new demand for “environmental technology” would benefit their advanced technology sector.

The EU is in a unique position because it has signed the treaty as a body (as well as the single member states), which allows it to arrange different targets for its members as long it meets the target for the EU as a whole. EU’s internal goals range from a 40% increase for Portugal to 30% cuts for Luxembourg and 25% for Germany, Austria, and Denmark. The huge reductions in some of the countries are achievable without a dramatic impact on industrial production because of the individual circumstances.

For example, the 1990 level for Germany includes the whole former East German industry, famous for its dependency on coal burning and, consequently, big CO2 emissions. The decision to close many of these unprofitable and inefficient plants makes it easier to achieve big cuts in emissions. Great Britain cut the subsidies for coal mines, which led to a switch from coal to natural gas, and less CO2 emissions. But these decisions were based on economic circumstances, not on concern for possible climate change. This could be seen when Germany’s government backed-off from a decision to cut more coal subsidies after angry mine workers “visited” the German government in Bonn.

The EU-members agreed to introduce a EU-wide carbon tax to reduce CO2 emissions, but despite this decision, the tax has never been implemented. The fear of a negative impact on the European economies loomed too large, especially if Europe would go ahead with such a policy despite the fact that others are not introducing similar measures.

The EU has always been pushing for higher standards but seems more reluctant than the U.S. to embrace market-oriented solutions. The idea of an international tradable permits system is more difficult to sell in Europe, where people are more willing to accept that their governments set standards and industry has to find a way to meet the standards. One has to keep in mind that industries are often closely consulted on the issues to find achievable goals. The cooperation and relations between companies and government are perhaps closer than in the U.S.

Some countries have reservations about emissions trading schemes, but few would go so far as the Dutch environmental minister, Magaretha de Boer: “That’s not something that belongs to our [European] culture.”(3)

Many find it easier to deal with a “simpler solution” – such as government regulations, than with setting up a world-wide trading scheme which needs more organizational preparation (and innovative thinking).The feeling in Europe is that the U.S. first has to do more to cut its emissions of greenhouse gases, since the U.S. is the biggest CO2 emitter in the world in absolute terms. The U.S. is still perceived as an economy which wastes energy in production and especially in its consumption patterns.

During the latest negotiations in Bonn, the EU-countries stuck to their proposal of a 15 percent reduction of greenhouse gases from the 1990 level by the year 2010, they also insist that industrial countries reduce their emissions immediately and under regulatory conditions.

Canada

Canada used to be one of the leading advocates for a treaty on the reduction of greenhouse gases. During the Rio summit in 1992, Canada was one of the mediators that brought the different positions together in a voluntary agreement; but now Canada’s position is not so forthright. The Canadian government is expected to propose an extension of the deadline from the year 2000 to the year 2012 to reduce greenhouse gas emissions to their 1990 levels, to the year 2012, but it will probably ask for a sharper reduction after the year 2012. The reluctance of the Canadian government to commit itself to sharp emissions reductions was heavily criticized by environmental groups as inadequate, while industries and opponents of an agreement think that drastic action could seriously damage the slowly recovering economy. The government has also not yet announced how it expects to achieve the emission targets; it is estimated that Canada’s emissions of CO2 have increased around 11 per cent between 1990 and 1996.(4)

Australia

Other countries argue that the model for differentiated targets should also apply to other countries, not just EU members. For example, Australia argues that there should be individual levels for every country considering its specific situation. The level should be determined by numbers like the projected population growth, GDP per capita, emission intensity of GDP, energy intensity of exports, etc.

Australia is resisting a big reduction in the emissions level, which would have a devastating effect on a country that is a big coal exporter and also relies on coal for domestic energy use. Australia supports the idea of a tradable permit system with some reservations, especially about the initial distribution of permits and the huge transfers of wealth.

Japan

Special focus is directed at Japan. As the host nation it is under pressure to do more than others to insure that there will be some agreement in Kyoto. The Japanese government announced its position a few weeks ago, proposing a 5 percent reduction of carbon dioxide, methane and nitrous oxide emissions below the 1990 emissions level in industrial countries on average in the years 2008-2012. The proposal also allows exemptions and different measurements including GDP, projected development of population number and emissions per capita, which could mean an actual reduction of only 2.5 percent for the US and Japan.

Japan was criticized by the EU and environmentalists for its position, but the government defends its proposal saying the EU’s goal is unrealistic and the government’s proposals would already mean Japan would need 20 new nuclear power plants added to the already existing 52, (increasingly in the news in recent month for scandals involving the non-disclosure of accidents to the public). Internally Japan is divided between the position of the powerful Ministry of Trade and Industry (MITI) which is lobbying for lower emissions cut backs, while the Environmental Agency supports higher reductions of emissions.

Japan depends heavily on oil imports, and to increase the share of other energy sources is extremely difficult, especially for nuclear power after the recent scandals involving serious accidents. And Japan has already achieved a high degree of energy efficiency; therefore, the amount of energy that could be saved through new measures is limited. Japan like most of the other industrial countries, will not be able to stabilize its emissions to its 1990 level until the year 2000; its emissions of CO2 will probably have increased by about 6 percent from the 1990 level by the year 2000.(5)

Developing Countries

Developing countries are a diverse group of countries, from countries like China and India, which might soon became the biggest CO2 emitters, to small African countries with little industrial basis. They therefore hold different opinions on the issue, but they all seem to reject the notion that developed countries dictate them to cut emissions. They rightly argue that most of the emissions in the past came from industrial countries during their industrial development, and developing countries just want to have the same right for economic development for their people. They also insist that the emissions per capita is only a fraction of the emissions by industrial countries.

On the other hand, some industrial countries, in particular the U.S., want developing countries to be included in any agreement they reach, because these countries will increase their emissions drastically in the next decades. Also, industrial countries fear that stricter environmental regulations and increasing costs at home will drive more industries to relocate production to developing countries. This is already happening, but additional costs for CO2 emissions could accelerate this process.

The developing countries strongly oppose the pressure from the industrial countries to accept any restrictions. They fear for their potential for future development, and the words “Ecological Imperialism” are often heard. To expect that countries such as China would be participating in an international permit trading system in the near future seems unrealistic. These countries might be willing to accept foreign investment for cleaner technology for their utility plants and other industry but they probably will not accept any cap on their energy use.

Participation in an international emissions trading system would pose more technical and organizational problems for developing countries than it would for developed countries, such as lack of modern communication, technology to monitor companies, the setting up of markets, and many more.

Another danger may be that if energy prices in these countries would rise, more and more people would be driven away from market products, for example, people who can no longer afford kerosene for cooking will turn to non-market sources such as collecting fire wood. This sometimes leads to even more damage to already fragile ecosystems.

In the latest negotiations the developing countries, represented by the G-77, suggested a reduction of emissions from the industrial countries to 35 percent below 1990 levels by the year 2020; in addition, the developing countries would receive financial compensation from industrial countries if exports from developing countries would be hurt by the climate change policy of the industrial world. In case the industrial countries would not meet the targets they would have to pay penalties to the less-developed countries. In contrast, the developing countries would be under no obligation to reduce their emissions.

Alliance of Small Island States

This association of smaller island states pushes for drastic reductions in CO2 emissions of 20 percent from the 1990 level by the year 2005. The governments of these islands fear that they would be particular hard hit in case global warming would occur, since their low luying countries would be especially vulnerable to possible rising sea-levels.

OPEC

The OPEC countries are not particularly keen on an agreement that would reduce the demand for their main export product -oil- if industrial countries use less oil for their production and consumption prices and thereby revenues for OPEC countries would fall. They therefore demand that in case an agreement is reached on the reduction of CO2 emissions, their countries should be financially compensated for the possible loss in revenues; otherwise they would not sign any agreement. The idea that countries like the U.S. or Western Europe would compensate countries like Saudi Arabia or Kuwait for their loss is politically unthinkable.

Outlook on the Negotiations

The success of the UN Conference on Climate Change in Kyoto will depend on the ability to find an agreement on an emission target for CO2 and for the other so-called greenhouse gases, since most of the countries now accept legally binding emissions caps.

There are still big gaps between some of the proposals especially between the EU proposal of 15% reduction by 2010 and the US proposal of reaching the 1990 level between 2008 and 2012. In the last preparation meeting in Bonn (Germany) before the conference, the delegates tried to find as much common ground as possible before going into the Kyoto conference, but it turned out that most of the difficult issues are still unresolved. The EU and the U.S. are still far apart in their positions and it is not clear if one of them will show any willingness to give on its position. The question of participation of developing countries is also still unresolved, since most of the industrial countries seem willing to exempt developing countries from the emissions reduction process -at least for a while. On the other side, the U.S. delegation wants some reassurance that developing countries will join the agreement at some point in the future. The U.S. delegation would probably like to see some sort of timetable that it could then present to the Senate, which sees the participation of developing countries as a precondition for approval of a treaty.

The developing countries do not seem willing to participate in the reduction process as long as their standards of living are much lower than in the industrial countries. Some countries which were exempt at the Rio summit, but are not developing countries, such as Argentina, seem prepared to join a treaty in some form. Less-developed countries might be persuaded to reduce future emissions if industrial countries would compensate them for the economic loss they would endure. The question is, are industrial countries prepared to commit themselves to transfer large sums of money when that aid budgets are already cut back, and if they already fear economic losses due to the reduction of their own emissions?

Developing countries might be given long time-lags before they have to join in, and perhaps the most dangerous development could be that especially smaller developing countries as well as small developed countries could be pressured into an agreement. There is the potential that the threat of trade sanctions would become a “means of persuasion” for countries to join such an agreement, perhaps supported by boycotts organized by influential environmental groups from big industrial countries. For example, Paul H. Nitze, former American chief negotiator at the Geneva arms negotiations and now a member of the Environmental Defense Fund, suggested in a recent newspaper article that in case of a tradable budget system, participating countries could be deterred from violating the agreement through inspections by an international agency (just as it is done by the International Atomic Energy Agency) and possible sanctions or embargoes could be imposed on these countries by the UN security council, such as is done under nuclear weapons treaties. This might be technically possible, but CO2 emissions are not weapons and to punish a country for producing too much CO2 (because companies want to provide products for their customers) as if it had produced atomic weapons seems unwise.

Such actions would be a threat to free trade with enormous damage to the world economy, and once started, the erosion of world trade could increase very quickly.

1. Many economists like the idea of a permits trading system because of its cost-saving advantage, especially in comparison to a command-and-control policy.

2. Department of Energy (1997), “Scenarios of U.S. Carbon Reductions -Potential Impacts of Energy Technologies by 2010,” released September 25, 1997.

3. Cited by The Economist, June 14, 1997, p. 89.

4. Scott Morrison, (1997), “Canada buckles on greenhouse targets,” in Financial Times November 5, 1997, p.4.

5. Source: International Energy Agency cited by The Economist, June 28th 1997, p. 41.

Study of the Impact of Global Climate Policies on the People of Texas

by William Yeatman on September 8, 1997

in Small business

Background

A study completed in August 1997 shows a severe economic impact on the people of Texas if the Clinton Administration commits to a global climate change treaty to restrict energy use in the United States.

The study, The Impact of Potential Greenhouse Gas Emission Limits on the People and Economy of Texas, was prepared by Glenn R. Schleede for the National Consumer Coalition under the auspices of Consumer Alert.*

The study focuses on one state, Texas, and identifies the potential costs that might be imposed on the people of Texas as a result of measures to force or encourage reductions in U.S. greenhouse gas emissions, particularly CO2.

The U.S. is expected to make commitments at the UN Climate Change meeting in Kyoto, Japan, this December to significantly reduce greenhouse gas emissions. The treaty negotiations have attracted little public attention because most people seem to think that the commitments will only affect big business.

In fact, the U.S. negotiators’ commitment to set binding targets and timetables to restrict emissions will affect every individual, family, organization and community in the U.S.: either because less energy will be available or the prices of energy will rise dramatically.

The effects across the country will vary in the level of severity, with a greater impact on those states that are heavily dependent on the use of fossil fuels for energy production.

The Impact on People in Texas

Texas would be particularly hard hit by emission reductions because coal, oil, and natural gas (the fossil fuels) supply 96.2 percent of the total energy needs in Texas. Average per capita energy consumption in Texas in 1994 was 65.2 percent higher than the national average, largely because of the state’s energy-intensive industrial and agricultural activities.

In this study of global climate policies’ impact on Texans, various taxes on energy resources are used as “proxies” to estimate a range of costs that might be borne by Texas consumers resulting from proposed emission reduction approaches.

Using taxes as proxies recognizes that the Administration may propose or accept other measures, such as an international emissions trading scheme. However, such measures will have similar impacts as they would require major changes or reductions in U.S. energy use, force large increases in energy costs, and have other adverse impacts on the U.S. economy.

Among the adverse effects that various alternative measures and tax proxies could have on Texas people are the following:

  • Texas would be forced to reduce its 85 percent dependence on coal and natural gas to generate electricity. Yet economical, alternative sources of energy are not available in Texas and are not likely to become available in the near future. Thus, the likely result would be a forcing up of electricity prices for all electricity customers, including residential customers.

  • Emission reduction measures — considered separately — would cause Texans’ electric bills to increase annually by 10.3 percent to 48.4 percent.

  • Tax increases of $.50 per gallon on motor fuels will cause an increase of 43.5 percent in motor fuel costs, adding $285 per year to each Texan’s tax payment flowing to Washington. A $1.00 per gallon tax would raise motor fuel costs 87 percent resulting in an outflow of $570 per person annually.

  • The added annual cost and dollar outflow to Washington for a Texas family of four would average $1,140 for a $.50 per gallon motor fuel tax and $2,280 for a $1 per gallon tax.

  • The annual cost per household would be $491 under a $100 per metric ton carbon tax (a tax on carbon associated with utilities= use of coal to generate electricity); that cost would double with a $200 per metric ton carbon tax.

  • Texans would see an added annual outflow of their dollars to Washington ranging from $1.7 billion to $11 billion as a result of the tax alternatives considered in this study.

  • Higher costs for electricity and motor fuels hit most individuals and households directly and take a larger portion of their after-tax income. Since per capita personal income and disposable income in Texas are lower than the national average, and, in particular, lower than states along the East and West coasts, people in Texas will be harder hit than residents in those regions.

  • Older people and others living on fixed incomes are especially vulnerable to energy cost increases; in Texas, 10.2 percent of the population in 1994 was 65 or older.

  • Higher costs for energy, through taxes or other mechanisms, mean that fewer dollars would be available for Texans’ other needs C food, clothing, shelter, medical needs, education, purchases of appliances and household goods, savings, and insurance.

* Glenn R. Schleede is president of Energy Market and Policy Analysis, Inc., a consulting practice on energy and related environmental and economic issues. Mr. Schleede previously was vice president of New England Electric System and president of New England Energy Incorporated. In Washington, Mr. Schleede served as executive associate director of the U.S. Office of Management and Budget, senior vice president of the National Coal Association and associate director (Energy and Science) of the White House Domestic Council. He has held career service positions with OMB and with the U.S. Atomic Energy Commission.

The National Consumer Coalition, organized by Consumer Alert, is an on-going educational coalition of 24 public policy groups that are committed to the consumer value of a market-economy in providing consumer choice, competition, and advances in technology that improve the health and safety of consumers. Consumer Alert is a non-profit, non-partisan consumer group, with individual members in all 50 states, which focuses on public policy issues and consumer education.

CO2 Effects on Ocean Currents; China May Benefit From Climate Change

by William Yeatman on September 7, 1997

in Science

CO2 Effects on Ocean Currents

Researchers Thomas F. Stocker and Andreas Schmitter, using a simplified, three-basin zonally averaged circulation model, coupled to a simple energy-balance model of the atmosphere, have shown that CO2 levels as well as the rate of increase may have an effect on the “thermohaline” circulation of the North Atlantic Ocean. Known as the “ocean conveyer belt,” this current is a “gigantic overturning motion” which pushes warm surface waters to the north giving off heat then sinking and returning to the south as cold water at a depth of 2 km.

The computer model showed that an increase of CO2 to 750 parts per million by volume (ppmv) in the next 100 years would permanently shut down the circulation. The model also showed that if the CO2 concentration of 750 ppmv were reached more slowly it would slow but not shut down the circulation. The current, caused by temperature and salinity, may respond adversely to large injections of freshwater that may occur from greater rainfall in the northern latitudes, as has been predicted by General Circulation Models. Deep ocean sediments suggest that when the thermohaline circulation has broken down in the past it caused cold spells in Europe which lasted for hundreds of years (“Influence of CO2 emission rates on the stability of the thermohaline circulation,” Nature, August 28, 1997).

The model used, however, has some problems. In an editorial comment on the research Stefan Rahmstorf pointed out that “. . . a simple model like this cannot be expected to make accurate quantitative predictions. The key result of their study lies not in exact numbers, it is in the principle that the rate at which greenhouse-gas concentrations increase is crucial for the stability of the ocean circulation.” Rahmstorf later concludes, “Climate models are still too coarse to accurately predict how vulnerable the ocean circulation is, but they suggest that crossing a critical limit is within the range of possibilities for the next century” (“Risk of sea-change in the Atlantic,” Nature, August 28, 1997).

China May Benefit From Climate Change

Environmentalists have long decried the possible detrimental effects of climate change on the developing countries. Some Chinese scientists, however, believe that climate change could hold many benefits for their country.

Ren Zhenqiu, research fellow of the Chinese Academy of Meteorological Science, for example, argues that a warmer climate would cause the prevailing westerly summer wind to move further inland bringing more rainfall, improving agriculture yields in previously drought plagued areas.

Zhang Piyuan, professor of the Institute of Geography under the Academy of Sciences, using archives from the Palace Museum, found that agriculture output was higher during the warm period between 1750 – 1790 than during the cold period between 1841 – 1890.

Ren noted that the world’s four major civilizations appeared one after the other during earth’s warm state 6,000 to 4,000 years ago. North China was warm and damp and covered with forests and the desert existed primarily in the remote west. Furthermore, natural disasters were less frequent during the warm periods. Ren concludes, “Warm periods are the economically and culturally prosperous periods of mankind. . . . Desertification is caused by global cold, a severe environment, along with man-created sabotage. The natural factor is essential.” According to a book by Cambridge University, the decline of China’s Ming Dynasty corresponds to the arrival of colder weather and frequent natural disasters.

Ren believes that “The influence from both artificial and natural factors should be equally stressed. . . . It has not been determined as to which is the main reason leading to the climate change – natural influence or greenhouse effect.” He concludes, “I only hope that scholars do not merely stress the disadvantage of warming climate like the convention.” The article, “The Benefits of Climate Change? China’s Take on Global Warming,” can be found at www.weathervane.rff.org/.

Etc.

Gore’s Hard Sell

A focus group study of homeowning, college graduates in Bethesda, Md. conducted by The Alliance to Save Energy, showed that the global warming scare may be a hard sell to the American public. The following is reported in the Wall Street Journal (August 26, 1997). “During a discussion the skeptics tended to convince others that climatic change wasn’t happening while an incredulous moderator looked on. Cynicism about government played a larger role.

Participant 1: “But of course it [global warming] gives them [scientists] more grant money to keep up their jobs, to keep doing that type of research.”

Moderator: “So it is a political agenda?

Participant 2: “Yes, it is.”

Participant 1: “I think some of it is.”

Participant 3: “If I’m watching TV, and I hear about [global warming], I laugh at it. Or I don’t worry about it.”

IPCC’s Political Summary

In a letter to Nature (January 11, 1996) Michael Grubb, Lead Author, Working Group III of the IPCC, wrote, “The ‘Policymakers’ Summary’ is not a technical summary. Although usually drafted by the experts to put all key findings ‘on the table’, the final text represents a painstakingly negotiated statement of what governments officially accept as a balanced account of the state of knowledge and reasoned judgement, based on the chapters. Governments cannot alter the chapters, and the authors cannot alter the Policmakers’ Summary.”

The Costs of Renewable Energy; Home or Cars?

by William Yeatman on September 7, 1997

in Blog

The Costs of Renewable Energy

For years environmentalists have touted renewable energy as a way to wean mankind from fossil fuels, clean the air, and avert global climate change. The federal government has spent billions of dollars subsidizing renewable energy, and the Clinton administration has suggested further development of renewable energy technology as a way to meet emission targets that may be negotiated at the Kyoto conference. It’s a nice theory, but a new study by Robert L. Bradley, Jr., president of the Institute for Energy Research, shows that renewable energy is very costly and environmentally suspect.

The study, “Renewable Energy: Not Cheap, Not ‘Green’,” published by the Cato Institute, shows that on average electricity produced at renewable energy plants is twice as expensive as electricity produced by the most economical fossil-fuel alternative and triple the cost of surplus electricity. Moreover, renewable energy has many hidden environmental costs. Wind and solar farms take 100 times more space than fossil-fuel plants to produce the same amount of energy. Wind farms are also noisy and kill birds. It has been estimated that wind farms in California are responsible for the deaths of hundreds of golden eagles and other raptors. Also, Bradly notes that the material-intensive manufacture of wind and solar facilities increase air pollutants and greenhouse gas emissions in the short run.

The report is available at www.cato.org/pubs/ pas/pa-280es.html or by calling Dave Quast at 202-789-5266.

Homes or Cars?

Japan’s Ministry of International Trade and Industry (MITI) has projected that in order to reduce carbon dioxide emissions to 1990 levels by 2010 Japan must reduce energy consumption by 50 million kiloliters of crude oil. This is roughly equivalent to the energy consumption of all Japanese households in 1995 or fuel consumption by Japanese motor vehicles that year (Asia Pulse, August 28, 1997).

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