October 2007

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

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

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

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

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

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

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

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

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

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

Demand for renewable energy is outstripping supply, pushing up prices and raising the specter that some states may not meet clean-energy mandates.

In the UK, Conservative Party spokesmen are claiming that their demands for rapid, drastic action to cut carbon emissions are congrent with Mrs`Thatcher's views. This is a shaky claim at best.

In her latest book, Statecraft (2002, 449-58), Thatcher devotes ten pages to the subject of "Hot Air and Global Warming." Thatcher is quite clear that she feels things have gone in the wrong direction since she warned, "it is possible . . . we have unwittingly begun a massive experiment with the system of this planet itself." She notes that global warming alarmism today "provides a marvelous excuse for worldwide, supra-national socialism" (Statecraft, p.449).

In other words, Mrs T concedes there might be a problem, but rejects the economy-destroying solutions of emissions taxes and targets that have entranced so many. She recognized this back in 1990, when she said, "Whatever international action we agree upon to deal with environmental problems, we must enable our economies to grow and develop, because without growth you cannot generate the wealth required to pay for the protection of the environment". In fact, Thatcher makes it clear that she regards global warming less as an "environmental" threat and more as a challenge to human ingenuity that should be grouped with challenges such as AIDS, animal health, and genetically modified foods. In her estimation, "All require first-rate research, mature evaluation and then the appropriate response. But no more than these does climate change mean the end of the world; and it must not either mean the end of free-enterprise capitalism." (Statecraft, p.457).

I wrote more on Mrs Thatcher's environmental record for the free-market environmental group PERC a couple of years ago.

The Cooler Heads Coalition invites you to a congressional staff and media briefing on "European Progress on Reducing Global Warming Emissions: A View from Italy of the Kyoto Protocol," with Benedetto Della Vedova, member of the Italian Parliament and president of the Liberal Reform Party.

Tuesday, October 9th

Noon-1:30 PM

Room 406, Senate Dirksen Office Building

Please RSVP by e-mail to Julie Walsh at jwalsh@cei.org

For more information, please call Myron Ebell at (202) 331-2256

[youtube:http://www.youtube.com/watch?v=XDI2NVTYRXU 285 234]

In response to the global warming consensus, political momentum is building to cap greenhouse-gas emissions (GHGs), subdivide the cap into smaller parts (or emissions allowances similar to rationing coupons), and distribute the emissions allowances, either by auction or on a no-cost basis to businesses that emit greenhouse gases.

Schools will have to issue a warning before they show pupils Al Gore's controversial film about global warming, a judge indicated yesterday.

It is well-understood that EU bureaucrats and politicians worship rhetoric over substance, but nowhere in “Yo, Kyoto – Bush shifts his stance on global warming” (Fiona Harvey, Financial Times, 1 October , 2007) did the FT actually note comparative U.S. and EU greenhouse gas emissions performance. The piece dwells on U.S. “rhetoric”, its “position”, “attitude” and “motivation”, which apparently are of more use to FT readers than actual U.S. performance for which it is so excoriated by the embarrassingly under-performing European Union. Further, as regards the White House claim that “Last year America grew our economy while also reducing greenhouse gases,” FT felt compelled not to quantify (or debunk), but only to wistfully mischaracterize it as a claim that “going green can lead to economic growth.” Despite Bush having apparently already "gone green", FT then notes that “the EU and other governments that have been frustrated at the lack of progress on tackling greenhouse gas emissions left last week’s meetings unconvinced.”

Disappointed though Europe may be in the U.S. rhetoric, imagine their despair over actual comparative performance, figures for which are publicly available. Under any relevant modern baseline, e.g., the year the Kyoto promise was made (1997) or thereafter, U.S. emissions have risen far more slowly than those of its noisiest antagonists. For example, over the past 7 years for which we have data (2000-2006), the annual rate of increase for U.S. CO2 emissions is 0.38%, compared to the EU’s 1.07%. Indeed, over the same period even the smaller EU-15 economy has increased its CO2 emissions in real terms greater than the U.S. by more than 20%. FT readers, and this debate, deserve better.

In his National Review Online piece yesterday, Dow Chemical’s Andrew Liveris paints a near-tipping-point picture of the U.S. manufacturing sector to support his call for Carteresque restraints on energy consumption. But there are two problems with Mr. Liveris’s argument: the predicate and the proposition.