Politics

Bush Offers Lukewarm Plan

President George W. Bush outlined his Global Climate Change and Clear Skies Initiatives in a speech on February 14 at the NOAA Science Center in Silver Spring, Maryland. The bulk of the climate plan is warmed-over policies from the Clinton Administration, but with a few significant new twists and considerably more federal funding, while the Clear Skies plan would require cuts in three major air pollutants of approximately 70% by 2018.

Bush set a goal of reducing greenhouse gas intensity by 18% by 2012. This translates into producing one million dollars of economic output per 151 metric tons of carbon dioxide emissions (or equivalent) compared to 183 metric tons today.

This voluntary goal appears to be achievable on current trends. Reducing carbon intensity by 18% over the next decade would be one-fifth more than the 15% reduction in the 1990s.

Bush called for a major review of progress in 2012, that is, several years after he leaves office, and said that at that time mandatory emissions reductions may be appropriate. The promise, or implied threat, of future mandatory limits makes workable a major feature of the presidents planawarding tradeable credits for emissions reductions made voluntarily now.

According to the White Houses Fact Sheet, “The President will direct the Secretary of Energy to recommend reforms to: (1) ensure that businesses that register voluntary reductions will not be penalized under a future climate policy; and (2) give credit to companies that can show real emissions reductions.”

It appears that the motive for creating and buying these “early action credits” is the prospect that they will have value once the scheme is made mandatory. As part of this effort, the president also directed Secretary Abraham to improve the Greenhouse Gas Reduction and Sequestration Registry in unspecified ways. The Global Climate Change Initiative calls for higher federal funding for the whole range of climate programs, domestic and international. Most notable, perhaps, is $4.6 billion over five years for tax incentives for renewable energy, cogeneration, and purchasing hybrid and fuel cell vehicles. Possible higher CAFE standards are also mentioned.

Much of the reduction in carbon dioxide emissions may come from the Clear Skies Initiative. The large cuts proposed for sulfur dioxide, nitrogen oxides, and mercury may force utilities to close some of their coal-fired power plants. A cap-and-trade program is proposed for the three pollutants.

Reaction is Two Thumbs Down

Initial reaction to President Bushs new global warming package was almost uniformly negative from environmental groups, conservative groups, major newspapers and networks, and world leaders. Several industry trade associations and the Australian and Japanese governments reacted at least mildly favorably.

From abroad, German Environment Minister Juergen Trittin called the plan “disappointing,” according to Reuters (February 18, 2002). “The goal has to remain to re-integrate the worlds biggest polluter into this system. The door should not be closed to an eventual U.S. return to the Kyoto framework,” Trittin said. British Environment Minister Michael Meacher judged that the European Union would not be “satisfied” by Bushs plan (Reuters, February 18).

At a United Nations environmental conference in Cartagena, Colombia, officials from many nations demanded more action from the U.S. Among these was Canadian Environment Minister David Anderson (Reuters, February 18), who noted the serious effects that global warming was already having on Canadas northern regions.

In Japan, the official reaction from the new Environment Minister, Hiroshi Oki, was initially critical, but that changed as soon as President Bush landed in Tokyo. At a joint press conference with Bush, Prime Minister Junichiro Koizumi said that, “The United States has come up with a very positive proposal (Reuters, February 19).

Australian Prime Minister John Howard clearly views Bushs program as offering a way out of Kyoto for Australia. He said, “Our positionis much closer to that of the United States than the attitude of the European countries. I do think that what the president indicates in his speech will lead to an alternative to simply saying no to the Kyoto Protocol, and I welcome that” (Reuters, February 18).

At home, Sierra Club executive director Carl Pope said, “Unfortunately, the Bush Administration is using Valentines Day to give a sweetheart deal to the corporate polluters that funded his campaign.” Jennifer Morgan, director of the World Wildlife Funds Climate Change Campaign, accused the President of delivering “a Valentines day present for the coal and oil industry.”

Conservative groups were a little more original in their comments, but no less critical. For example, Consumer Alert wrote that, “The President’s plan would undermine the very economic growth which, as he has pointed out, facilitates the advances that lead to cleaner air and more efficient technologies. Starving the US economy of energy, whether it’s called Kyoto or something else, will only harm consumers.”

Among many editorials criticizing the plan, the Washington Post wrote that, “There was more air than substance in the global warming policy President Bush outlined last week, a disappointing program that aims too low, asks too little and waits too long to assess the need for tougher action.”

On the other side of the political spectrum, James Glassman in the Wall Street Journal (February 14, 2002), wrote that Bushs “new position on global warming is clearly a disingenuous attempt to appear concerned about the environment for the sake of empty plaudits from domestic and foreign audiences. It hurts his credibility, and, frankly it wont work because the opposition wont buy it.”

On February 14, ABC News provided plenty of air time to environmental critics of the plan, quoting extensively an e-mail from former Vice President Al Gore.

The Houston Chronicle (February 15, 2002) pulled out the heavy guns, quoting several scientists who claim that Bushs plan falls well short of what is needed to stop global warming. “I think this thing (global warming) is very serious and government must get serious about doing something about it,” said Gerald North, head of the department of meteorology at Texas A&M. “We need to be more serious than a voluntary program.”

Canada Still Hesitant to Ratify Kyoto

The Canadian government insists that it still wishes to ratify the Kyoto Protocol, but must consult with the provinces first (Reuters, February 20, 2002).

“Thats what we have to do before we make a decision to ratify,” said Environment Minister David Anderson. Nine of the ten provincial premiers signed a letter to the Canadian Prime Minister Jean Chretien, expressing reservations about the wisdom of ratifying the treaty.

“We are concerned that ratification of the Kyoto Protocol and Canadas response to climate change could impact competitiveness and, in turn, employment, economic growth and investment opportunities across Canada,” said the letter.

Although the provinces do not have veto power over whether to ratify Kyoto, it would present a dilemma if they were opposed to it. “Thats a decision well have to come to,” said Natural Resources Minister, Herb Dhaliwal.

Anderson made it clear, however, that Canada would not consider complying with the treaty without ratifying it.

Bush Administration Tip-Toeing Toward New Policies

The New York Times and Washington Post reported this week (February 6, 2002) that the Bush Administration is getting close to deciding on a new set of global warming policies, which President Bush may announce before he visits Asian leaders next week. The only public indication of what those policies may be is contained in the Economic Report of the President, released by the Council of Economic Advisers on February 5.

The Report states that, “The current uncertainty surrounding climate change implies that a realistic policy should involve a gradual, measured response, not a risky, precipitous one.” Andrew Revkin in the Times notes that the Report contains a generally favorable review of the pros and cons of emissions trading schemes.

The Post story reports that, “One idea winning favor would replace the notion of setting fixed targets for power plant emissions of carbon dioxide with emission intensity targets measures that would expand or contract with economic growth.”

“Another proposal,” says the Post, “dealing with pollutants such as nitrogen oxide, sulfur dioxide and mercury, calls for an emissions trading program that would allow big polluters that exceed mandatory emission targets to buy credits from cleaner companies whose emissions come in lower than the targets.”

EPA Administrator Christine Todd Whitman “argued persuasively in favor of a trading approach with mandatory targets during Mondays meeting,” according to the Post, a plan that the Department of Energy opposes.

A February 1 article by David Wojick in Electricity Daily details more specific possible proposals. “According to one administration source,” Wojick writes, “a 20 percent reduction in emission by 2012, below a 2000 baseline, is being discussed,” a target similar to the U.S. reduction required under Kyoto.

His story goes on to explain that, “The CO2 restriction is part of a complex package that includes New Source Review regulatory reform and a three-pollutant nitrogen oxides, sulfur dioxide, and mercury control proposal.”

James Connaughton, chairman of the White House Council on Environmental Quality, told Electricity Daily that the administrations climate plans will go far beyond a No Regrets strategy. “No regrets implies that you are doing nothing,” he said, “and our policy will be very proactive, and we will commit major resources toward it.”

This quote implies that Chairman Connaughton doesnt know what No Regrets means, which could prove a serious problem in trying to devise sensible policies.

Looking For New Things to Regulate, States Focus on CO2

A bill approved last week in the California Assembly instructs the California Air Resources Board to formulate regulations that would limit carbon dioxide emissions from automobiles.

According to the Environmental News Service (February 1, 2002), “If the measure becomes law, state regulators will draft rules aimed at achieving the maximum feasible reduction of carbon dioxide emitted by California’s passenger vehicles and light duty trucks, including sport utility vehicles. The regulations would need to be in place by January 2004, but auto manufacturers would be given flexibility in deciding how to achieve the new standards.”

Assemblymember Fran Pavley (D) stated, “This bill will give us the opportunity to protect Californias economy, public health and the environment from the potentially devastating effects of global warming. The bill will also allow California to greatly affect the outcome of the worlds global warming crisis.”

Other states may well follow Californias lead. Plans are in the works for some type of global warming regulation in New Hampshire, New York, North Carolina, Washington, New Jersey, Illinois, Wisconsin, and Pennsylvania.

Sandy Liddy Bourne, Director of the American Legislative Exchange Councils Energy Task Force, has been monitoring state carbon dioxide regulation proposals, which ALEC opposes. “Now is not the time to voluntarily impose CO2 emission standards as a knee jerk response to environmental hysteria,” she said. “At a time of recession, the best way to fuel our economy is to use the best energy technology the free market has to offer.”

NSR Settlement Includes CO2 Cuts

A New Jersey utility has settled a Clean Air Act enforcement action by signing a consent agreement that “for the first time will require the company to participate in a voluntary scheme to reduce carbon dioxide emission,” according to a story in Inside EPA (February 1, 2002). The settlement between PSEG Fossil, the U. S. Environmental Protection Agency, and the State of New Jersey, which was announced by the Department of Justice on January 23, concludes one of many New Source Review actions begun by former EPA Administrator Carol Browner in the Clinton Administration.

The Bush Administration has been reviewing the Clinton-era interpretation of New Source Review regulations since last summer and is expected to announce reforms soon. In the meantime, the Justice Department has decided that the NSR enforcement efforts that they inherited from the Clinton Administration are reasonable and will be continued.

The latest settlement requires large cuts in sulfur dioxide and nitrogen oxides emissions at PSEG Fossils two coal-fired power plants in addition to a 15% reduction in carbon dioxide emissions below 1990 levels to be achieved by 2005.

In 2000, David McIntosh then Indiana Representative and Chairman of the House National Economic Growth, Natural Resources, and Regulatory Affairs subcommittee, wrote a letter to EPA regarding their NSR enforcement, accusing it of using “intimidation” to secure “voluntary” agreements from electric utilities to cap CO2 emissions. “In short,” said McIntosh, “if I were attempting to implement, or prepare to implement, the Kyoto Protocol and build a pro-Kyoto business clientele, I would proceed exactly as EPA has done and apparently plans to do.”

PSEG Fossil is the first to agree to a settlement with the EPA that includes a voluntary CO2 emissions cap. Inside EPA, argues that “The appearance of at least tacit approval for carbon controls could provide the administration which has historically resisted the idea with political headaches when the issue is taken up by the Senate later this year.”

The Bush Administration is actively seeking an alternative strategy to the rejected Kyoto Protocol to reduce greenhouse gases, according to the Financial Times (December 14, 2001). A leading proposal is an emissions trading program that would involve the Canada, the United States, and Mexico. In a December 4 article, FT reported that President Bush “in July called for joint action on greenhouse gases in North America.”

John Graham, head of the Office of Information and Regulatory Affairs, has also endorsed “market-based” programs. The December 19 issue of FT reports, “He is also considering an expanded program of pollution trading which might include the swap of emissions permits for the release of nitrogen oxides, sulfur dioxide mercury and the greenhouse gas carbon dioxide.”

On November 30, the Commission for Environmental Co-operation under the North American Free Trade Agreement held the first of two meetings to discuss the establishment of such a system. There are several obstacles to overcome, including the fact that Canada is still committed to the Kyoto Protocol and that Mexico is exempt from Kyoto commitments (FT, December 14).

The Pew Center on Global Climate Change, an industry front group that has heavily lobbied the administration to regulate greenhouse gases, argues that, “Most companies think something is going to come down” (from the regulators), says Pew spokeswoman, Katie Mandes. “Some think legislation is inevitable and want to get out in front.” The 37 companies that make up Pews membership hope to profit from government regulation of greenhouse gases.

Annie Petsonk of Environmental Defense, which has set up its own corporate lobby for greenhouse regulation “predicts that the Bush Administration will balk at setting up a cap for emission trading. The most she expects is a voluntary Nafta-based program, under which companies would trade credits,” reports FT. A voluntary scheme would increase industry support for a cap since emission permits would be worthless otherwise.

Michael Marvin, president of the Business Council for Sustainable Energy, says his group “only wants three things from government. To tell us where to go (by establishing caps), when to get there and to get the hell out of the way.”

The WTO and Kyoto

While Kyoto watchers have been focused on the proceedings in Marrakesh, Morocco, trade negotiators meeting in Doha, Qatar agreed on several Kyoto-relevant issues. The members of the World Trade Organization re-iterated their commitment to sustainable development in the draft Ministerial Declaration.

In the Trade and Environment section, WTO members agree to negotiations on “the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs).” The negotiations will be limited to the “applicability of such existing WTO rules as among parties to the MEA in question.”

Developing countries remain adamantly opposed to linking environmental or labor standards to trade, but agreed to include the environmental linkage issue in the new round of trade talks as the price for getting the European Union to agree to include reducing agricultural subsidies on the agenda. A CBS News story (November 14, 2001) immediately picked up on the connection with Kyoto: “In return [for putting agricultural subsidies on the table], other countries were willing to accept EU demands that the new talks should take consideration of some environmental issues, negotiators said. For example, the EU wants to clarify how agreements like the Kyoto accord on global warming relate to the WTO, and whose rules would take precedence in case of conflict.”

Triumph at Marrakesh?

Once again, the seventh Conference of the Parties to the UN Framework Convention on Climate Change finished the Kyoto Protocol at the conclusion of its meeting in Marrakesh on October 10. The agreement included agreeing that all remaining unresolved issues will be resolved at the next COP after the protocol is ratified and goes into force. COP-8 is scheduled for late October 2002, possibly in India.

The talks dragged on twelve hours beyond their scheduled close as Umbrella Group members (including Japan, Australia, Canada, and Russia) demanded and won more and more concessions from the European Union. Russia was granted 33 million metric tons of credits a year for carbon sequestration in its vast forests, which doubled the figure agreed at Bonn last July, plus significant relaxation of several rules. This includes not having to submit carbon sink inventories or verification in order to claim these credits.

Japan also won key concessions, including postponement of adopting the precise terms of compliance and enforcement until after the protocol goes into force. Final language on the use of several of the mechanisms, such as the Clean Development Mechanism, was also put off until next year.

The enforcement provisions agreed last July in Bonn at the continuation of COP-6 have been described as legally binding, but it remains unclear what this means. It was agreed that parties to the protocol that failed to reach their emissions targets in the first compliance period (2008-12) would have to make up the shortfall in the second compliance period plus a 30 percent penalty. However, no second compliance period or emissions targets for that period have been negotiated, so the agreed enforcement provision would seem to have little effect. The agreement in Marrakesh to postpone spelling out what constitutes compliance and how it will be enforced adds to the uncertainty.

Reaction from environmental pressure groups was mildly negative. A November 12 Reuters story quoted Bill Hare of Greenpeace: “Government may be congratulating themselves now, but what have they really achieved?” Eileen Claussen, president of the Pew Center on Global Climate Change, a well-funded industry-front group of corporations that hope to make money from limiting hydrocarbon use, told the Washington Post (November 11), “Without U. S. participation and with credits being granted for business as usual, I think the reductions you get off the baseline are very small.”

The United States delegation, true to its word, largely remained on the sidelines as an observer to the COP-7 negotiations. The Marrakesh talks and their triumphant conclusion attracted little media attention.

Kyotos main backers now hope that the protocol will be ratified in time to be celebrated at the World Summit on Sustainable Development in Johannesburg in September 2002. If the protocol is ratified before COP-8 in October 2002, then that conference will become the first Meeting of the Parties (or MOP-1). Once the protocol goes into force, any further changes to the protocol, such as those noted above, must then be agreed to formally as amendments.

Whither Japan, Australia, Canada?

With the conclusion of COP-7, attention now turns to ratification of the Kyoto Protocol. Ratification requires 55 nations and in addition these must include nations that comprised at least 55 percent of Annex I greenhouse gas emissions in 1990. Over forty nations have already ratified the protocol, but only Romania among Annex I nations has officially submitted its ratification. So reaching 55 percent of Annex I emissions is the only challenge. The major question marks are Japan, Australia, and Canada.

Japanese Prime Minister Junichiro Koizumi signaled his governments intention to proceed with ratification at a meeting with his governments Global Warming Prevention Headquarters staff on November 12, according to a Kyodo News Service story. The Prevention Headquarters released a statement laying out the steps it will take to prepare for ratification. Included in the statement was this exhortation: “[I]t is vital that each and every person in Japan changes his or her lifestyle in order to prevent global warming….”

Kyodo also reported on November 13 that Environment Minister Yoriko Kawaguchi had asked to meet with Keidanrenthe Federation of Economic Organizationsto seek support from business and industry. Yomiuri Shimbun reported the same day that industry remained opposed to ratification because higher energy costs would damage Japans international competitiveness. Industry leaders are not proposing, however, that Japan withdraw from the protocol. Instead, “We need to step up our efforts to urge Washington to return to the Protocol,” Yotaro Kobayishi, chairman of Japans Association of Corporation Executives, told the newspaper.

Although the Japanese economy appears headed for depression after a decade of recessions, it is hard to see how Japan can meet its Kyoto target of cutting greenhouse gas emissions to 6 percent below 1990 levels by 2008-12 without severe economic pain. Japan reacted to the OPEC oil boycott in the 1970s by forcing energy efficiency and conservation measures. Thus there is little “low-hanging fruit” to be picked. Emissions increases since 1990 have come almost entirely from transportation and households. Manufacturing emissions have gone up only one percent since 1990.

In Australia, the Liberal-National coalitions narrow election victory on November 10 returns Prime Minister John Howards government to office for a third term. Although Australia was given major concessions in Marrakesh, first indications are that Howard remains unlikely to move forward with ratification as long as the United States stays on the sidelines.

The Canadian government of Prime Minister Jean Chretien has been a major booster of the protocol throughout the negotiations, but this enthusiasm conceals two obstacles to ratification. First, as the head of a major economic forecasting institute told Cooler Heads, “It will be economic suicide if Canada ratifies Kyoto without the U. S. And there must be some people in the government who understand that.” Second, although the national government can ratify, under Canadas highly devolved federal system implementation will be impossible without the co-operation and support of the provincial governments. The government of Alberta has so far been most unco-operative and indeed hostile to regulating carbon dioxide emissions. Not co-incidentally, Alberta holds vast hydrocarbon reserves, far larger than the other provinces combined.

Richard Paton, president of the Canadian Chemical Producers Association told the Financial Post (November 12) that the Canadian government was engaged in “wishful thinking” if it believed that Canada can meet its emissions target. Paton spoke on behalf of a broad coalition of Canadian businesses. The coalition estimates that Canada will be 25 percent over its Kyoto target by 2010.

Bush Team Developing Kyoto Alternatives

The Bush Administration is in the process of developing domestic alternatives to the Kyoto Protocol to present to UN climate negotiators at their November meeting in Marrakech, according to the Wall Street Journal (August 20, 2001).

The article by Jeanne Cummings reports that President Bushs proposals will involve a number of domestic initiatives, including additional funding for research on the causes of global climate change, for technologies to sequester carbon dioxide, and to study the regional impact of global warming.

Bushs adoption of a domestic plan is viewed by many as a response to criticism he has received from Senate Majority Leader Tom Daschle (D, SD) and House Democratic leader Richard Gephart (D, MO). In a recent speech at the Woodrow Wilson International Center for Scholars, Daschle addressed Bushs refusal to negotiate at the UNs recent climate talks in Bonn: “Instead of asserting our leadership, we are abdicating it. Instead of shaping international agreements to serve our interests, we have removed ourselves from a position to shape them at all.”

White House Chief of Staff Andrew Card said recently on NBC’s Meet the Press: “I’m optimistic that we’ll have initiatives that we can go to Marrakesh and talk about with the world leaders that will show that we’re serious about solving the problem [and] that the Kyoto solution is really not a solution at all.”

President Bush has a cabinet-level task force working on the global warming issue. The task force, which met the week before Congress went on recess and included Sen. Chuck Hagel (R, Neb.) and Rep. Billy Tauzin (R, La.), gave the President positive feedback on his domestic alternatives, Card said.

Japan and U. S. will Talk

The governments of Japan and the United States have agreed to hold ministerial talks on the Kyoto Protocol in late September. According to Yomiuri Shimbun (August 6, 2001), the Japanese delegation will try to persuade the U. S. either to rejoin the protocol or to present an alternative international agreement at COP-7 in Marrakesh beginning on October 28.

CNN reported on August 9 that Japanese officials are now leaning toward ratifying Kyoto with or without U. S. participation. The Japanese government has wavered over what to do ever since the Bush administration walked away from Kyoto in March.

According to CNN, a Japanese Foreign Ministry official said that, “It isnt the United States we are concerned about. [The problem] is the details of the treaty, which have not been decided.” Another official added, “We have to know what we will be ratifying, and we were unable to draw out such details at Bonn.”