Kyoto Negotiations

U.S. Emissions Soar in 2000

A new report by the Department of Energys Energy Information Administration shows that U.S. emissions of greenhouse gases increased by 2.5 percent over 1999 levels in 2000. That is a significant increase from the average yearly increase of 1.3 percent from 1990 to 2000. EIA attributes the increase “to strong growth in carbon dioxide emissions [3.1 percent] due to more normal weather, decreased hydroelectric power generation that was replaced by fossil-fuel power generation, and strong economic growth (a 4.1-percent increase in gross domestic product).”

Overall, U.S. greenhouse gas emissions in 2000 were about 14 percent higher than in 1990, the baseline year used in the Kyoto Protocol. The U.S. emission reduction target under Kyoto is 7 percent below 1990 levels. According to the EIA study, “Since 1990, U.S. emissions have increased slightly faster than the average annual growth in population (1.2 percent) but more slowly than the growth in energy consumption (1.6 percent), electric power generation (2.3 percent), or gross domestic product (3.2 percent),” indicating continued improvements in energy efficiency.

The growth rate in carbon dioxide emissions in 2000 was the second highest of the last decade with 1996 seeing a 3.4 percent increase. The study notes, “Although short-term changes in carbon dioxide emissions can result from temporary variations in weather, power generation fuel mixes, and the economy, in the longer term their growth is driven by population, energy use, and income, as well as the carbon intensity of energy use (carbon dioxide emissions per unit of energy consumed).”

The study can be found at www.eia.doe.gov.

New Hampshire Special Interests Agree on Multi-pollutant Bill

New Hampshires utilities, conservation groups, and government leaders have reached a compromise on new legislation that will force its three fossil-fuel power plants to further cut the emissions of three pollutantssulfur dioxide, nitrogen oxides, and mercuryplus carbon dioxide.

“This amendment is a common-sense approach to the problem of pollution coming from older, fossil-fuel burning plants that have been grandfathered under federal law,” said New Hampshire Governor Jeanne Shaheen. “The revised Clean Power Act employs proven national market-based strategies for cost-effectively reducing pollution and sets aggressive targets for reducing that pollution.”

Shaheen also stated that New Hampshire will continue to work with other states to pressure the U.S. Environmental Protection Agency to force other power plants in the country, particularly those in the Midwest, to reduce emissions, which she claims affect her state. “Thats why Congress needs to pass a rigorous national law on this issue,” Shaheen said (Union Leader, November 7, 2001).

New episodes of the long-running soap opera known as the Kyoto Protocol are being shot this week and next on location in Marrakesh, Morocco, as the world’s major media reported with varying mixtures of anger and sadness that the series big star the United States was still refusing to appear in any new episodes. The new chairman of the seventh Conference of the Parties (COP-7), Moroccan environment minister Mohamed El Yazghi, warned that the Bush administrations decision to stay on the sidelines and merely observe the negotiations could lead to international isolation of the U.S.

Although outgoing COP chairman Jan Pronk and others claimed last July at COP-6.5 in Bonn that they had finally reached agreement on all unresolved issues, it turns out that agreement still must be reached on the “technical details,” that is, on the actual legal text of the agreement in several key areas. The most important of these are reporting, monitoring, and enforcement.

Negotiators in Bonn agreed in principle to enforce the Protocol by penalizing nations that failed to meet their emissions targets. The penalties would include being banned from international emissions trading and other flexibility mechanisms and reducing the emissions limit in the second compliance period (beginning in 2013) by 1.3 tons for every ton of emissions above a nations target in the first compliance period (2008-2012).

This latter penalty is problematic because no targets have been agreed to for the second compliance period. It seems likely that nations failing to meet their initial targets will simply demand easier targets in the second period. What is meant by “legally-binding commitments” therefore remains a major question.

“Im quite worried that the deeper we get into [the legal text], the more bureaucrats trying to re-engineer it will come to fore,” said Paul Vickers, director of TransAlta Corp.s Carbon Market Initiative. “I must admit, I think it’s going to be slower than everyone thinks on rules” (Greenwire, October 26, 2001).

For example, Russia has demanded greater flexibility. As noted in Greenwire (October 30, 2001), under the Bonn agreement “Russia would be allowed to sell the equivalent of 17 million metric tons of CO2 in greenhouse gas emission reduction credits to other countries each year. Russias credit is based on certain forestry sinks aimed at soaking up CO2, as well as the fact Russias emissions fell in the early 1990s when the economic shrank.” Russia is now requesting that its sink credit by doubled to 34 million metric tons of CO2.

COP-7 continues through Friday, November 9, 2001. For daily updates by Bonner Cohen, of the Lexington Institute, of the COP-7 negotiations see www.earthtimes.org.

Uncertainty Abounds Before Bonn

As negotiations resume in Bonn next week, it is not clear what will become of the Kyoto Protocol. Although the U.S. will send a delegation to the talks headed by Under Secretary of State for Global Affairs Paula Dobriansky, the State Department has confirmed that President Bush remains opposed to the treaty. According to State Department spokesman Richard Boucher, “The United States takes climate change very seriously and will work constructively within the U.N. Framework Convention on Climate Change.”

“The United States is working with our allies to develop an effective and science-based approach to addressing global climate change,” he said (Greenwire, June 11, 2001).

Japan has become the key player in the negotiations. For the Kyoto Protocol to become international law a sufficient number of Annex I countries those required to make cuts in greenhouse gas emissions representing 55 percent of Annex I 1990 emissions, must ratify it. That threshold cannot be met without either Japan or the U.S.

Japans Prime Minister Junichiro Koizumi has been pressured by the EU to ratify Kyoto without the U.S. He has made it clear, however, that he has no plans to do so, but in the meantime will work to persuade the U.S. to ratify Kyoto. He also urged the EU to take a more flexible stance on the issue (Asia Pulse, July 11, 2001).

A possible concession to placate Japan would be to postpone the Kyoto timetables, even though the protocol states that targets and timetables cannot be changed until after the protocol goes into effect. Currently, Kyoto requires that during the period of 2008 to 2012 a countrys average emissions should be at the target level. The Chairman of the Sixth Conference of the Parties to the U.N. Framework Convention on Climate Change, Jan Pronk said, “I can imagine that it would be possible to postpone the date of 2008 by two years, to 2010” (New York Times, July 6, 2001).

Canadas Environment Minister, David Anderson believes that efforts by the EU to proceed with Kyoto are a waste of time. “The EU may be right. It may be theoretically possible to proceed with Kyoto. But what is the victory worth?” he said. “Kyoto is only a means to an end. Effective climate change action cannot operate effectively without the United States” (Ottawa Citizen, July 11, 2001).

Meanwhile, a cryptic statement from the head of the U.N. Environment Program, Klaus Toepfer, suggests that the G-8 meeting in Genoa, Italy next week will play a role in forcing the issue. “Theres more than good reason to think there will be a signal coming from Genoa to Bonn to finalize it,” he said (Greenwire, July 11, 2001).

Australia attempts to salvage Kyoto

In an interview with Reuters (July 11, 2001), Australian Environment Minister Robert Hill outlined his plan to woo the U.S. back in to the Kyoto Protocol. Australia has been trying to get major developing countries, like China and India, to participate in a greenhouse gas reduction program. This would address one of the U.S.s primary concerns about the Kyoto pact. However, Hill has not found eager participants. “they cant see why they should accept legal constraints on burning carbon which could constrain their economic growth.”

Without a plan to include developing countries in Kyoto and with other concerns left unaddressed, the U.S. is unlikely to change its position at the upcoming talks in Bonn. Hill said that no deal should be reached at Bonn if it does not include the U.S. “We will continue to negotiate the Kyoto rulesbut we would argue it would be better if that process wasnt completed at this meeting in order that the door might be left open for the United States.”

Former Clinton Aides Now Admit Kyoto Would Be Costly

Amidst major criticism from both domestic environmental groups and European officials, President Bush is receiving aid and comfort from an unexpected source former Clinton Administration officials. Bush has stated that the U.S. will not comply with the Kyoto Protocol because it is “fatally flawed” and would impose undue economic hardships on the country.

Now, according to the June 12 issue of USA Today, “Economists from the Clinton White House now concede that complying with Kyotos mandatory reductions in greenhouse gases would be difficult and more expensive to American consumers than they thought when they were in charge.” This change in tune from the Clintonites is part of the reason that Bush decided to reject Kyoto.

The Clinton Administration was overly optimistic about the costs of Kyoto because its economic analysis was based on unrealistic assumptions. It assumed, for instance, that China and India would accept emissions reduction limits and that they would be able to fully participate in an unlimited international emissions trading system. China has made it clear, however, that it will not accept commitments, and the European Union has remained opposed to unlimited emissions trading.

The Clinton Administration also assumed that industry and consumers would rapidly adopt energy efficient technologies without subsidies. Without Chinas participation, for instance, costs would double under the Clinton analysis. According to Joseph Aldy, who assisted in developing the Clinton estimates, “We always thought the (emissions) targets were very ambitious. But the thing that made us really uneasy about our analysiswas that if our assumptions didnt come true, you could come out with costs that were much, much higher.”

While in office, however, the Clinton Administration never explicitly stated its assumptions, nor did it express any misgivings during several congressional hearings on the matter.

Kyoto = Millions of Lost Lives

Dr. Bjorn Lomborg is causing apoplectic fits across Europe with his recent book, The Skeptical Environmentalist. His views on the Kyoto Protocol are particularly heretical.

The Times of London (June 12, 2001) began its story on Lomborgs views as follows: “The cost of limiting carbon dioxide emissions far outweighs the damage that global warming will eventually do to the world and merely postpones the problem for six years, Bjorn Lomborg, an environmental statistician, has calculated. As a result, he argues, trillions of pounds that might otherwise be spent on fighting poverty and malnutrition and improving infrastructure in developing countries will be wasted.”

Lomborg is an associate professor of statistics at the University of Aarhus in Denmark. He is also an environmentalist and a former member of Greenpeace. His book was originally published in Danish, but has been translated into English and will be published by Cambridge University Press in August.

The Times story continues that Lomborg bases his conclusions on a “four-year audit of a massive set of environmental indicators.” If the Kyoto Protocol is implemented, “millions of lives will be lost that could otherwise be saved and the eventual impact of climate change on the Third World will be much worse as countries will be less equipped to adapt.”

EU Claims Kyoto Will Be Painless

The European Union can easily meet its Kyoto targets, according to a report by the European Climate Change Programme. The report says that, “There are sufficient potential cost-effective measures to cut emissions of greenhouse gases by twice the target set for the 15 nation EU under Kyoto” (Financial Times, June 12, 2001).

Reuters (June 12, 2001) reported that according to a European Commission official, the total cost to the EU to meet its Kyoto target of reducing greenhouse gas emissions to 8 percent below 1990 levels by 2012 would be 3.7 billion euros per year or about .06 percent of GDP.

It is unclear how the ECCP defines “cost effective.” Given that Kyoto would have almost no effect on predicted global temperatures and hence virtually no benefits, any cost would seem to outweigh the potential benefits.

“These results increase our credibility,” said Margot Wallstrom, the EU environment commissioner. “I hope they will encourage the European Council to restate its commitment to meeting the Kyoto target even if the US withdraws from the process.”

Just before this good news from the EU was released, UPI (NewsMax.com, June 6, 2001) reported that European Union leaders had failed to agree on a EU-wide energy tax. The proposed tax is the main tool to reduce energy consumption and thereby meet the Kyoto targets.

Insurers Not Worried About Global Warming

Proponents of government policies to fight global warming often cite concerns of the reinsurance industry companies that insure the insurers as evidence that catastrophic global warming is real. Indeed, some major reinsurance companies have expressed concern over global warming, but others have pointed out that the upward trend in insurance claims due to natural disasters is almost entirely due to greater economic development in disaster-prone regions, not to global warming.

An article in the May 31 issue of the Palm Beach Post reports that Floridas property insurers arent really concerned about global warming. “At State Farm we do not see global warming as an issue that drives anything,” said Tom Hagerty, the companys Florida spokesman. “We have not changed any of our plans or policies on the basis of global warming information or on the various hurricane activity forecasts.” Frank Nutter, president of the Reinsurance Association of American said, “The industry doesnt treat it as a serious issue. Its not factored into rating decisions.”

Pro-Kyoto Amendment Passes House

On May 16 the U.S. House of Representatives passed the State Department Budget Authorization (H.R. 1646) by a 352 to 73 vote. Included in the bill was an amendment to urge the Bush Administration to continue its participation in the Kyoto negotiations. Reportedly, the amendment was added to the bill in the International Relations Committee on May 2 when several Republican congressmen had momentarily left the room. The amendment passed in committee 23-20 on a nearly party line vote, with Rep. Chris Smith (R-N.J.) being the only Republican to vote for the amendment.

The amendment reads in part: “SENSE OF CONGRESS- It is the sense of the Congress that the United States should demonstrate international leadership and responsibility in mitigating the health, environmental, and economic threats posed by global warming by

  • “taking responsible action to ensure significant and meaningful reductions in emissions of carbon dioxide and other greenhouse gases from all sectors; and

  • “continuing to participate in international negotiations with the objective of completing the rules and guidelines for the Kyoto Protocol in a manner that is consistent with the interests of the

United States and that ensures the environmental integrity of the protocol.”

The amendment wasnt challenged on the floor of the House, because, according to a committee spokesman, the Bush Administration had indicated that it would continue to participate in future negotiations. However, since the amendment specifically urges the administration to negotiate “with the objective of completing the rules and guidelines for the Kyoto Protocol,” the House action clearly goes beyond stated administration policy (Greenwire, May 14, 2001).

Dueling Energy Plans

In an attempt to pre-empt the Bush Administrations forthcoming energy plan, congressional Democrats have released a plan of their own. If implemented, it would greatly exacerbate the energy crisis rather than solve it.

The first proposal is to put price controls on wholesale electricity prices by calling on Congress to pass either the Feinstein-Smith bill (S. 764) or the Inslee bill (H.R. 1468) “that will return the West to just and reasonable cost-of-service based rates until March 1, 2003.” This displays an appalling lack of basic economic understanding. Price controls invariably lead to shortages because they do nothing to depress demand or increase supply. They were the cause of gasoline shortages and gas lines in the 1970s.

Other proposals in the Democrats plan are similarly ill-conceived and counter-productive. It has been reported that the Bush Administrations energy proposals to be released on May 17 will focus on increasing energy production, removing supply bottlenecks created by government regulations, and rebuilding and enlarging Americas energy infrastructure.

Rep. Dick Gephardt (D-Mo.) arrived at the press conference, held at the Capitol Hill Exxon gas station, to unveil the Democratic energy plan in a large SUV. When asked about Gephardts apparent hypocrisy, his spokesman Eric Smith said with a straight face, “We dont say anything about changing peoples lifestyles” (New York Post, May 16, 2001). To the contrary, their plan is all about government forcing people to change their lifestyles.

Rio Tinto Goes Pew

The Pew Center on Global Climate Change announced on May 15 that Rio Tinto has joined its Business Environmental Leadership Council. London-based Rio Tinto is one of the worlds largest multi-national mining conglomerates. It is also a major coal producer.

Rio Tinto is the first mining company to join the Pew Centers Council. The Pew Center is a leading industry-front group, now comprised of 33 corporations that hope to profit from higher energy prices. The Pew Center was founded in 1998 and is largely funded by the Pew Charitable Trusts, which was based on the Pew familys Sun Oil Company fortune.

Other corporate members of the Pew Center are: ABB; Air Products and Chemicals, Alcoa; American Electric Power; Baxter International; Boeing; BP (Beyond Petroleum); California Portland Cement Co.; CH2MHILL; Cummins Inc.; DTE Energy; DuPont; Enron; Entergy; Georgia-Pacific; Holnam; IBM; Intel; Interface Inc.; Lockheed Martin; Maytag; Ontario Power Generation; PG&E Corporation; Rohm and Haas; Royal Dutch/Shell; Sunoco; Toyota; TransAlta Corp.; United Technologies; Weyerhaeuser; Whirlpool and Wisconsin Energy Corporation.

Further Fallout from Kyoto Decision

Criticism continues to fly at the United States from the European Union over President Bushs decision to withdraw U.S. support for the Kyoto Protocol.

The United Kingdoms Deputy Prime Minister, John Prescott, accused the U.S. of “free-riding” in “glorious isolation,” isolationist being an ugly epithet amongst internationalists. The U.S. “must know that it cannot pollute the world while free-riding on action by everyone else,” said Prescott.

Other leaders have not been so diplomatic. Several statements have contained outright threats. John Gummer, Tory MP and former environment secretary, called Bushs decision “an assault on European sovereignty,” wrote Mark Steyn in Londons Sunday Telegraph (April 1, 2001). “Globally warming to his theme,” wrote Steyn, Gummer “decided he wasnt going to have Yankee imperialism shoved down his throat. We are not going to allow our climate to be changed by somebody else, he roared, threatening an international trade war against the United States. You go, girl! Why not refuse to sell the Yanks your delightful British beef?” A blustering Margot Wallstrom, the EU environment commissioner, stated, “I dont think that we should let the United States simply pull out of the Kyoto Protocol” (Financial Times, March 29, 2001).

Perhaps the most strident statement came from Malcolm Bruce, president of the Scottish Liberal Democrats. He accused Bush of wanting to kill “thousands and millions” of people by pollution. “George Bush prides himself on having authorized the execution of more people than many dictators, but he is now tearing up the Kyoto Treaty on behalf of the polluting oil, gas and mining interests that back him and his family,” said Bruce. “Not content is he with killing Texan prisoners by lethal injection, he now wants to kill thousands and millions around the world by lethal pollution” (www.ananova.com, April 1, 2001).

These criticisms may be seen as slightly hypocritical, since none of the EU countries has ratified the Kyoto Protocol. More hypocritical are criticisms by Russia and China. Russia cut a deal under Kyoto where it would essentially have no commitments and be able to profit by selling empty emission credits to the United States (Russia Today, April 1, 2001).

China, which wont even consider taking on commitments, voluntary or otherwise, said that, “The U.S. announcement that it will not meet its emission reduction duties, citing the lack of obligations on developing countries, violates the principled rules of the Kyoto Protocol and is irresponsible” (Inside China, March 30, 2001).

Not all of the comments from abroad have been negative, however. Canadas environment minister, David Anderson, blamed Europe for Bushs decision. “The problem was the rigid position of the Europeans who thought they could force the Americans to do something they knew the Americans couldnt do.” The Times of India (April 1, 2001) reported that Anderson believes that Europes “rigid stance” left Bush “little option” but to withdraw from the treaty.

Australia to Follow U.S.

Australia, which has been less than enthusiastic about Kyoto from the beginning, may follow the U.S. According to The Age (April 2, 2001), “Federal cabinet is today poised to back the United States in an effective withdrawal from the Kyoto global warming reduction process, hastening the collapse of the international protocol.” The story notes that, “Key cabinet ministers backed by Prime Minister John Howard will argue that a new deal needs to be established, including controls on greenhouse gas emissions from developing countries such as China.”

This is important because the Kyoto Protocol does not enter into force unless Annex I countries those which are required to reduce emissions under the Kyoto Protocol accounting for at least 55 percent of 1990 emissions ratify it. If the U.S. and Australia fail to ratify the protocol, it may be nearly impossible for it to come into force.

Europes Secular Religion

We shouldnt be surprised by the European reaction to the United States withdrawal form the Kyoto Protocol, writes Philip Stott, a professor of biogeography at the University of London. In a Wall Street Journal (April 2, 2001) op-ed Stott says, “The reason is simple. In Europe, global warming has become a necessary myth, a new fundamentalist religion, with the Kyoto Protocol as it articles of faith. The adherents of this new faith want Mr. Bush on trial because he has blasphemed.”

“Global warming,” wrote Stott, “has absorbed more of the emotional energy of European green pressure groups than virtually any other topic.” Moreover, “the science of complex climate change has little to do with the myth. In the U.S., the science is rightly scrutinized; in Europe, not so.”

“Interestingly,” said Stott, “the tension between science and myth characterizes the Third Assessment Report of the Intergovernmental Panel on Climate Change, to which Europe always turns for legitimation. The whole feel of the report differs between its political summary (written by a group powerfully driven by the myth) and the scientific sections. It comes as a shock to read the following in the conclusions to the science (italics added): In sum, a strategy must recognize what is possible. In climate research and modeling, we should recognize that we are dealing with a coupled non-linear system, and therefore that the prediction of a specific future climate is not possible.

“Inevitably,” said Stott, “the media in Europe did not mention this vital scientific caveat, choosing to focus instead on the political summary, which Richard S. Lindzen, a professor of meteorology at the Massachusetts Institute of Technology, has described scathingly as very much a childrens exercise of what might possibly happen, prepared by a peculiar group with no technical competence. This is a damning statement from a scientist with impeccable credentials.”

“The science of global warming is thus deeply flawed,” said Stott. “The idea that we can control a chaotic climate governed by a billion factors through fiddling about with a couple of politically selected gases is carbon claptrap.”

Bush Officials Favor Kyoto Policies

The wrongheaded policies of the Clinton-Gore Administration have found new and perhaps more vigorous life within the Bush Administration. Recently, senior officials have made several comments on the need to fight global warming and about Bushs support for such policies.

Treasury Secretary Paul ONeill has long been a global warming zealot. In 1998 he gave a speech to the aluminum industrys trade association in which he named what he believed to be the worlds two most pressing problems. “One is nuclear holocaust,” he said. “The second is environmental: specifically, the issue of global climate change and the potential of global warming.”

According to Techcentralstation.com (March 8, 2001), ONeill “seems to be emerging as an aggressive advocate of action on global warming.” Indeed, ONeill distributed copies of his 1998 speech at Bushs first cabinet meeting.

Recently, ONeill has come under scrutiny for not divesting himself of $90 million in share and stock options in the aluminum manufacturer, Alcoa. When asked if this presents a conflict of interest he told Meet the Press (March 4, 2001) that, “The ethics department lawyers said they thought it was OK for me to maintain these shares. You know, I cant imagine that, as treasury secretary, Im going to have decisions come before me that have anything to do with this.”

Our imagination is a little livelier, however. Once carbon dioxide is defined as a pollutant when produced by electricity generation, the next step logically will be to regulate other carbon dioxide emitters, such as autos. The most feasible way to reduce CO2 emissions from autos is to make cars lighter by replacing steel with aluminum. If ONeill insists on keeping his millions in stock options then he should keep silent about global warming.

Christine Todd Whitman, Bushs administrator of the Environmental Protection Agency, has picked up where Carol Browner left off. She represented the US at the G-8 summit meeting held over the last weekend in Trieste, Italy. While there she told the delegates, “Let me just start with the clear and unequivocal statement that the global climate review thats being undertaken by this administration does not represent a backing away from Kyoto” (Reuters, March 3, 2000). She also said that President Bush views global warming as, “the greatest environmental challenge that we face” and wants to “take steps to move forward.”

In an exchange with Robert Novak on Crossfire (February 26, 2001) Ms. Whitman made it clear that the Bush Administration favors the regulation of CO2.

NOVAK: Governor, tonight as we sit here, the environmental conservatives are up in arms because they have heard that President Bush in his speech to Congress tomorrow night is going to call for a multi-pollutant strategy which would put — which implies a cap on carbon dioxide. The only theory under which carbon dioxide is alleged harmful is a catastrophic global warming theory, which was, as I remember, it was Al Gore’s, not George Bush. They are really upset. Have you gotten e-mails and phone calls on this today?

WHITMAN: I haven’t gotten any today that I know of, but I’ve been at a lot of meetings today and with the National Governors. George Bush was very clear during the course of the campaign that he believed in a multi-pollutant strategy, and that includes CO2, and I have spoken to that.

He has also been very clear that the science is good on global warming. It does exist. There is a real problem that we as a world face from global warming and to the extent that introducing CO2 to the discussion is going to have an impact on global warming, that’s an important step to take.

Kyoto Stays Alive in Trieste

With the Bush Administration still reviewing the specifics of its position on Kyoto and the United States and European Union positions still miles apart, the G-8 Environment Ministers meeting in Trieste, Italy “could have sounded the death knell for the climate negotiations and the Kyoto Protocol,” according to Europe Environment (March 6, 2001).

Although what the ministers did agree to was minimal it was enough to keep the Kyoto negotiations limping along for another few months. The EU demanded that the G-8 countries agree to ratify Kyoto before 2002. Instead, the ministers agreed to ratify Kyoto by the end of 2002. Negotiations have been rescheduled to resume on July 16-27 in Bonn, Germany.

Environmentalists were encouraged by the outcome. Jennifer Morgan of the World Wildlife Fund said that the G-8 meeting was “positive in that the other G-8 countries sent the US administration a clear signal that the talks would focus on Kyoto.” Europe Environment reported that, “The Italian [Environment] Minister Willer Bordon [acting President of the G8] said on leaving the talks with Ms. Whitman that he was very optimistic, since she had confirmed that the Bush Administration recognized that greenhouse gas emissions caused global warming and was no more intransigent than the Clinton Administration.”

IPCC: Kyoto would be Costly

Working Group III of the IPCC report predicts that compliance with the Kyoto Protocol would reduce economic growth by as much as 2 percent per year in the industrialized countries, according to the January 9 issue of Japan Times. This closely matches predictions by several other economic studies. Economic growth rates in industrial countries hover around 2 percent per year. That would be consumed by the Kyoto Protocol.

Who Profits from Kyoto?

Bruce Yandle, an economist at Clemson University, recently identified several “Baptist and Bootlegger” coalitions that are driving global warming policy in the January issue of Hoover Digest (www-hoover.stanford.edu).

The first group he identifies is the “alternative energy bootleggers.” Enron Corporation is a major provider of low-carbon natural gas. In 1997 it announced the creation of the Enron Renewable Energy Corporation “to take advantage of the growing interest in environmentally sound alternatives of power in the $250 billion U.S. energy market.” Enron endorsed President Clintons $6.3 billion plan to fight global warming, $3.6 billion of which would go to subsidize renewable energy technologies.

The National Corn Growers Association and Archer-Daniels-Midland, a producer of corn based ethanol fuel, have touted ethanol as a global-warming-friendly fuel. They succeeded in getting a 5.4 cents-per-gallon federal tax incentive for ethanol producers.

Several economic studies have shown that the Kyoto Protocol would be devastating to the coal industry, but would greatly benefit the natural gas industry and to a lesser degree the oil industry, both of which would step in to fill the vacuum left by coal. This explains why so many oil companies left the Global Climate Coalition and became crusaders for global warming policy, according to Yandle.

COP-6 Off to Shaky Start

The sixth Conference of the Parties to the UN Framework Convention on Climate Change got off to a shaky start this week. This is supposed to be the concluding conference to finalize the Kyoto Protocol, but there appears to be little movement on the major issues that have plagued the negotiations from the beginning.

According to a Reuters story (November 15, 2000), the disagreement between the European Union and the United States over the use of emissions trading is as sharp as ever. “So far, I havent seen anyone move their position by one centimeter,” said Raul Estrada, Argentinas special representative for the environment. The EU believes that the developed countries should reduce emissions through “tough domestic policies.”

Indeed, the EU probably wont budge from its negotiating stance. Its 15 nations agreed to form a “united front in demanding tough rules for compliance,” that would “ensure countries made most of their emissions cuts through domestic action rather than through emissions credits or other flexible mechanisms,” according to a November 8 Reuters story. The EU also agreed to demand firm sanctions against countries which miss their targets and strict limits on the use of so-called carbon sinks uses of forests, which absorb carbon to account for some of a countrys target.

The U.S. and its allies, Canada, Japan, Australia, and New Zealand, want full emissions trading that would allow them to purchase credits from developing countries and Russia as part of their compliance strategy. Adding to the standoff is a deal struck between the U.S. and fourteen Latin American countries “to push for full-scale trading in greenhouse gas emissions as a solution to global warming.” The emission credits would be created through U.S. funding of rainforest preservation in Latin America (Financial Times, November 6, 2000).

The “G-77 plus China” Group are also trying to present a united front in the negotiations. But their coalition is fracturing due to several disagreements. In general, the group wants the industrialized nations to commit to tough emissions reduction targets. But small island states worried about rising sea levels, for instance, have little in common with oil producing countries in the Middle East.

Saudi Arabia claims that it would lose $25 billion per year as a result of Kyoto and wants to be compensated. “There will be no outcome if our concerns are not adequately addressed,” warned Mohammed al-Sabban, head of the Saudi delegation.

IPCC Peer Review Process a Sham

Controversy continues to surround the leaked draft of the Summary for Policymakers of the UN Intergovernmental Panel on Climate Changes Third Assessment Report (TAR). New charges resemble the complaints made about the Second Assessment Reports (SAR) summary of 1996. In that report, the statement, “The balance of evidence suggests a discernible human influence on global climate,” was inserted into the summary after the report had gone through scientific peer review.

In the TARs Summary, a major conclusion of the report has once again been inserted after the peer review process was completed. According to Patrick Michaels, a University of Virginia climatologist, the Summary “dramatically increased the upper limit of its forecast [from the SAR] of the 21st centurys temperature increase, from 4.5 degrees C to 6.0 degrees C.”

“But,” said Michaels, “the document the IPCC sent out for scientific peer review contained no such number. Indeed, after the scientists reviewed it, the maximum value was 4.8 degrees C.” This alteration “inserted after the document had circulated among scientific reviewers,” said Michaels, changed the “reports most crucial conclusion at the 11th hour, after the scientific peer review process had concluded.”

The change was inserted during the “Government Review” in which nonscientist reviewers comment on the draft. According to Michaels, “The 6 degree C figure is based upon a socio-climatological model,” which “relies upon a number of illogical scenarios called storylines.” These storylines first appeared in a non-peer reviewed paper by Tom Wigley, a climatologist at the U.S. National Center for Atmospheric Research, published by the Pew Center on Global Climate Change, a Kyoto cheerleader group. Indeed, Pews press release announcing the study said that Wigleys scenarios would be incorporated into the IPCC report.

Finally, according to Michaels, the IPCCs peer review process “isnt really peer review in the classic sense, for the IPCC retains veto power.” Under real peer review, the reviewers comments must be incorporated into a study, but under the IPCCs system, “It is up to the original authors to review the scientific comments and decide which to keep and which to ignore.”

Political Slant is Clear in IPCC Summary

Cooler Heads has compared copies of the April and October drafts of the IPCCs Summary for Policymakers. The changes between the two drafts reveal the political motives behind the whole IPCC process. The overall tone of the Summary went from one of inquisitiveness to one of assertion.

Several headings were changed. Headings such as “Is the climate changing?” and “How well do we model climate and understand climate changes?” were changed to “An increasing body of observations gives a collective picture of a warming world and other changes in the climate system” and “Confidence in the ability of models to project future climates has increased.”

Some changes are blatant attempts to present a more alarmist tone. Statements that bolster catastrophic warming claims were accompanied by statements of uncertainty in the April draft, but were eliminated in the October draft. Statements that cast doubt on the manmade global warming hypothesis had statements of uncertainty added in the October draft. For example, the April draft states that there has been a 40 percent decrease in Arctic summer or early autumn sea-ice extent, but that “Limited sampling, however, leaves open the possibility that these changes may not reflect broad areas of the Arctic.” This caveat is dropped from the October draft.

The April draft also states, “The observed changes in the intensity and frequency of tropical and extratropical storms, such as hurricanes, are dominated by interdecadal-to-multidecadal variations, with no clear long-term trends. There is no evidence for systematic changes in severe local storms, such as tornadoes.” The October draft repeats the observation that there is no clear evidence of long-term trends in hurricane frequency, but adds that, “data are often sparse and inadequate.” This occurs repeatedly throughout the draft.

The section on climate modeling underwent significant alterations to bolster claims about accuracy. The statement from the April draft, “The complexity of the processes in the climate system prevents the use of extrapolation of past trends or statistical and other empirical techniques for projection of the future,” was dropped from the October draft. Also, the April draft claims that several models have been able to reproduce 20th century climate driven by natural as well as manmade forcings, but the October draft only mentions manmade forcings.

Two statements in the April draft, “Simulation of some extreme weather events, such as hurricanes, remains problematic,” and “Based on the record of past climate changes, we know that the possibility of rapid and irreversible changes in the climate system exists, such as altered ocean circulation patterns. However, there is a large degree of uncertainty about the likelihood of such transitions,” were dropped in the October draft. Added to the October draft, however, is the extremely controversial claim that, “Some aspects of model simulations of ENSO, monsoons and the North Atlantic Oscillation have improved.”

Forecasts of CO2 concentrations, as well as temperature changes, were different in the two drafts. In April the projected atmospheric CO2 concentrations were given as 550 to 800 parts per million by 2100. In October it became 540 to 970 ppm. The summary noted that the 1996 SAR forecast a temperature change of 1.5 to 4.5 degrees C over the next 100 years. The April draft put the range at 1 to 5 degrees C. In October, it became 1.5 to 6 degrees C.

Since nothing changed within the TAR itself from April to October, it is clear that the numbers have been fudged to bolster the pro-Kyoto, anti-energy agenda.

Clinton Seeks to Regulate CO2

In an effort to keep the Kyoto negotiations alive, President Clinton has called for federal regulations to limit CO2 emissions. The plan calls for a “cap and trade” system similar to U.S. emissions trading programs to control smog and acid rain.

According to the New York Times (November 10, 2000), “Any such expansion of pollution rules would probably require action by Congress, where there is significant opposition to the idea. But the administration contends that without this kind of step, a global treaty to reduce the risks of global warming will probably fail.” Currently there are no federal laws that would allow regulation of CO2 emissions.

Clintons announcement was timed to co-incide with release of the final version of the National Assessment on Climate Change, which otherwise attracted little media notice. The National Assessment has been mired in controversy and is currently the target of a lawsuit filed by the Competitive Enterprise Institute, Consumer Alert, 60 Plus Association, Heartland Institute, Rep. Joe Knollenberg, Rep. Jo Ann Emerson, and Sen. James Inhofe.

A new report by economists David Montgomery and Paul Bernstein of Charles River Associates makes it clear why the 180 countries involved in international negotiations to reduce greenhouse gases are having a tough time coming to an agreement. The problem is that there would be winners and losers under the Kyoto Protocol and the different compliance scenarios would produce different winners and losers.

According to the study, compliance with the Kyoto Protocol would result in a loss of economic welfare to the tune of $900 million to $1.4 trillion from 2010 to 2030. Flexibility mechanisms such as emissions trading and the Clean Development Mechanism could lower costs somewhat. “Only full participation of developing countries in a system of global permit trading can reduce costs significantly below $1 trillion, and the option is not a possibility under the Kyoto Protocol,” says the study.

These costs will not be limited to developed countries, however. Since all countries are linked through international trade, the costs of Kyoto will be partially shifted to developing countries. “Changes in patterns of international trade will shift costs of compliance with Kyoto onto some non-Annex B countries, who will be caught in a terms of trade squeeze, paying more for goods they purchase from Annex B countries and receiving less for the goods they sell.” Other developing countries will gain through increased competitive advantage over energy intensive industries in developed countries, whose costs will increase under Kyoto.

The Clean Development Mechanism, which allows developed countries to invest in low cost energy reductions in developing countries, could reduce costs of compliance. But, says the study, “The greatest issue with CDM is whether it will be so burdened with administrative costs and restrictions on the nature and location of projects, or taxed as a source of revenue for the Secretariat (the levy), that investment in CDM projects will not make good economic sense.”

Moreover, “Not all of the flows of funds into CDM represents a net gain to the host country. Projects that meet CDM guidelines will cost more than conventional projects, and the additional resources used to build CDM projects will not be available to produce goods sustaining the consumption needs of the population.”

The CDM, which was designed to transfer wealth from the developed to developing countries as an incentive for developing countries to participate, could produce division among developing countries. “Countries like China and India, that export energy-intensive goods and benefit from energy price increases in Annex B countries, can be made worse off by the success of CDM, because CDM reduces some of the global trade distortions that benefit those countries.”