by S. Fred Singer
Published in the World and I, December 1999, pages 331-341
The
Kyoto Protocol: The Costly Politics of Global Environmentalism
by
S. Fred Singer
Published in the World and I, December 1999, pages
331-341
The KYOTO PROTOCOL is being advertised as an international agreement to reduce the "threat" of greenhouse warming to the global climate. As its framers and supporters phrase it, global warming is the "greatest challenge to human existence on this planet;" this conveniently ignores the challenges from nuclear war, terrorist attacks with biological and chemical weapons by rogue nations, and the perennial problem of poverty and social unrest. The late Aaron Wildavsky more correctly characterized global warming as the "mother of all environmental scares." In reality, the Protocol it is a radical initiative in launching economic and social policies that threaten democratic values, economic growth, and national sovereignty.
The KYOTO PROTOCOL, adopted in December 1997 as a follow-on to the 1992 Rio de Janeiro Climate Treaty, would require the industrialized nations to reduce their emissions of greenhouse (GH) gases by an average of 5.2 percent -- below 1990 levels. The most important GH gas is carbon dioxide (CO2), stemming mainly from the burning of fossil fuels (coal, oil, and natural gas) for the generation of energy. Kyoto puts no requirements on the 130 or so developing nations, including such giants as Brazil, India, and China.
To place the KYOTO PROTOCOL in context, to understand its implications, and appreciate its many problems -- if it is ever adopted -- one must first stipulate a large number of items about the science of climate change and about the economic impact of global warming.
1. To begin with, one must assume that the atmospheric level of carbon dioxide will continue its increase and will more than double in the next century. Many experts doubt that this will ever happen, as the world proceeds on a path of ever-greater energy efficiency, and as low-cost fuels become depleted and therefore more costly.
2. Next, one must assume that global temperatures will really rise to the extent calculated by the conventional climate models used by the United Nations science advisory group, the Intergovernmental Panel on Climate Change (IPCC). The evidence from actual observations, however, suggests that any warming will be minute and therefore inconsequential.
3. The putative warming has been labeled as greater and more rapid than anything experienced in human history. But actual measurements contradict this apocalyptic statement. For example, data from ocean-bottom sediment cores and polar ice cores clearly show much warmer periods in the past. As recently as 1000 years ago, during the "Medieval Climate Optimum," Vikings were able to settle Greenland. Even higher temperatures were experienced about 6000 years ago during the much-studied "Climate Optimum."
4. One of the most feared consequences of a global warming is a rise in sea level that could flood low-lying areas and damage the economy of coastal nations. But actual evidence suggests just the opposite: a modest warming will reduce the steady rate of rise of sea level, which has been going on for many centuries. What happens is that increased evaporation from the ocean causes more precipitation, leading to more ice accumulation in the Polar Regions, and a drop in sea levels.
5. A detailed re-evaluation of the impact on agriculture and forests has just been completed by a prestigious group of specialists, led by a Yale University resource economist. The group concludes that agriculture and forests would benefit from global warming and would not be damaged as had previously been thought. Contrary to the general wisdom, higher CO2 levels and temperatures would increase the GNP of the United States and put more money in the pockets of the average family. In other words, global warming is good for you!
6. To further appreciate the problems with the Kyoto protocol, one needs to recognize that if it were to be put into effect and observed punctiliously, its impact on future temperatures would be negligible. Using the data of the UN scientific report, one can calculate that Kyoto would slightly slow the ongoing increase in the level of greenhouse (GH) gases and cause a virtually undetectable temperature reduction of only 0.05 degrees C by the year 2,050. Kyoto is costly -- and quite ineffective.
7. It is generally agreed that achieving a stable level of GH gases requires much more drastic emission reductions. To stabilize at the 1990 level, the IPCC report calls for a 60 to 80 percent reduction -- about 15 Kyotos!
8. Finally, there's the fundamental question of defining the goal of the UN Climate Treaty. Article 2 of the Treaty describes the ultimate goal as stabilization of greenhouse gases in the atmosphere at a level that would prevent "dangerous interference with the climate system." But what is this level? It has never been defined. We cannot tell whether it is greater or lower than the present level. Nonetheless, the KYOTO PROTOCOL calls for a drastic reduction by the industrialized nations. By 2010, it would require the United States to reduce CO2 emissions by approximately 35 percent, representing a cut in energy use of about one-third.
ENDLESS BUREAUCRACY
This brief introduction should make it quite clear that the KYOTO PROTOCOL is not needed, is not effective in mitigating climate change (even if developing nations were to cooperate), is economically destructive, and therefore politically unacceptable. Yet, it has already spawned a large international bureaucracy -- even before being implemented. Lawyers will certainly be needed: it is becoming quite clear that the Protocol will lead to endless negotiations as national interests collide, and will likely require renegotiation. At present, it is little more than a framework -- and an immensely complicated one. Even after agreement has been reached regarding proposed emission cutbacks by individual nations, little has been done so far to establish the terms for inspection, monitoring, and enforcement. At the moment, negotiations are proceeding on how to establish allowances for carbon sinks, such as tree planting, or for increases in efficiency. The problems here are detailed and endless.
To complicate matters further, the United States has been persistent in advocating a scheme of emission trading, which would lower the cost of complying with the Protocol. Entities, whether industries or countries, that find it easier to cut back emissions could sell their unused allowances to entities that would incur a high cost. The net result would be a reduction in emissions at an overall lower cost. There also provisions in the KYOTO PROTOCOL whereby industrialized nations, which are required to reduce emissions, can gain credits by helping developing nations that are not required to reduce emissions. One such scheme is called joint implementation; for example, a US electric utility can gain credit for planting trees in Central America to sequester CO2 from the atmosphere. Another scheme is the Clean Development Mechanism, which consists of transferring technology, equipment and/or capital to developing nations, to let them acquire more efficient power plants and other methods of reducing emissions.
We can see here the beginning of a policy to transfer resources to developing nations in order to persuade them to comply, if only voluntarily, with the kind of emission cutbacks called for in the KYOTO PROTOCOL. The principal problem of course is in deciding how to set emission quotas for the 130 nations that are not now required to cut emissions. Many problems arise. For example, if a national quota were set now for India, how would it be calculated? Would it be based on the present population or on some future population? And if it is to be a per-capita quota, will the per-capita allowance be close to its present value or closer to the per-capita consumption of the average U.S. citizen? One can already sense the possibility of mischief here. A dictator in a poor country could encourage population growth in order to receive more emission credits for sale to industrialized nations. In fact, there is the perverse possibility that a kleptocratic ruler may try to hold down economic development so as to discourage energy consumption by his population. The international emission-trading ideas are beginning to look a lot like the New International Economic Order, which has been high on the agenda of developing countries for decades. Cynics have described the NIEO rather unkindly as the transfer of resources from the poor in the rich countries to the rich in the poor countries.
On an international scale, many countries signed the KYOTO PROTOCOL before the deadline of March 15, 1999, but only two small nations have ratified it. One nation, Iceland, has announced that it will not sign, citing its economic need for more energy in order to develop industry and maintain its standard of living. In order for the Protocol to go into effect, 55 percent of the nations representing at least 55 percent of emissions will have to ratify. Since the United States is the largest emitter of carbon dioxide (36 percent), it holds the key to the implementation of the Kyoto Protocol.
But within the United States, a huge political battle has been shaping up.
In July 1997, the US Senate passed the anti-Kyoto Resolution 98, the so-called
Byrd-Hagel resolution, by a vote of 95 to zero. The Resolution demands that
the Administration should not enter into a treaty which would either damage
the United States economically or not include nations that emit greenhouse gases.
In response to the Resolution, the Administration, after signing the Protocol
in Nov 1998, has decided not to submit it for Senate ratification since it would
surely be turned down. Instead, the White House is engaged in a campaign to
circumvent the Congress in a variety of ways.
The Environmental Protection Agency may be attempting to classify CO2 as a pollutant that could be controlled by the EPA under the terms of the Clean Air Act. This ploy will be difficult to achieve since CO2 is not injurious to human health. Furthermore, Congress is likely to legislate against such a regulation and interpretation of the Clean Air Act. The White House is trying also to enlist public opinion behind the KYOTO PROTOCOL by organizing regional workshops, 18 of them, that stress the dangers of GH warming to different regions of the United States -- using funds that were appropriated for climate research. In addition, President Clinton has asked for four billion dollars to support a Climate Change Technology Initiative, a system of subsidies for industries interested in government support for developing alternative energy sources - a replay of the panicky efforts of Nixon's Project Independence and later programs under Jimmy Carter.
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BOX #1 "Early Action" on Kyoto
The most interesting scheme for getting industry behind the Kyoto Protocol is Senate Bill S-2617. It would give marketable credits to industries for taking "early action" to cut CO2 emissions. But these credits would only gain value if indeed the KYOTO PROTOCOL becomes the law of the land. It therefore turns these industries into promoters of the PROTOCOL by giving them financial incentives. Conversely, since this is zero-sum game, businesses and consumers that do not reduce emissions within the early period would pay more heavily when trying to meet the requirements for emission reduction.
If this bill should ever become law, it will cause tremendous problems within
the United States and give rise to conflicting interpretations. For example,
would a public utility gain credits for buying a nuclear power plant? Or would
it get credits for actions to reduce nitrogen-oxide pollution, as required by
law, while at the same time reducing CO2 output. Would suppliers of natural
gas incur heavy penalties as they increase gas supplies to power plants switching
from coal to gas? Could an industry gain credits for taking steps that it would
do anyway because they make economic sense or that are required because of pollution
regulations?
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BOX #2 The Montreal Protocol Analogy
The 1987 Montreal Protocol (for the protection of the ozone layer), which resulted in banning the production of CFCs, is often held to be the paradigm of the KYOTO PROTOCOL. The analogy is not very strong - except insofar as they are both based on rather shaky science and do not place stringent requirements on developing nations - a fatal flaw for any global environmental issue. (In fact, enforcement of the MP is so poor that smuggling of foreign production into the United States is second in importance only to the smuggling of drugs.)
Perhaps more important, halocarbons constitute only a minor percentage of the national economy; raising their cost saddles consumers with great expense but makes little impact on the GDP. Substitutes are mostly available, albeit at much higher cost. Not surprisingly, certain chemical companies holding patents for the manufacture of such substitutes are fully supportive of the MP.
Aside from gaining public support for the Kyoto agreement, the Administration
is also attempting to circumvent the Senate's objection that most of the world's
nations are not part of the KYOTO PROTOCOL. The ploy used here is to re-interpret
the language and insist that the Resolution would be satisfied if "key
nations" were to take "meaningful" steps towards reductions.
We are already witnessing diplomatic efforts by the White House to persuade
countries to undertake voluntarily cuts in emissions. So far, Argentina and
Kazakhstan seem to have made noises in that direction; we can only guess at
the quid pro quo offered to them.
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BOX #3 What is a "meaningful" reduction?
The White House drive to make the Kyoto Protocol the law of the land without Senate ratification is probably unconstitutional. The scheme to circumvent the Congress is multi-faceted, using executive orders, regulatory rulings, and money to buy off and split the opposition.
For example, the White House has made subtle attempts to redefine the Senate Resolution, by claiming that it could be satisfied if "key" developing countries were to take "meaningful" steps. But what is meant by "meaningful"? And who should define the term? Clearly, as the body responsible for approving treaties, only the US Senate can decide on the proper definition. Its members should not concede this task to other branches of government.
From a scientific point of view, "meaningful" emission reductions are those that can make a noticeable impact on the atmospheric concentration of greenhouse (GH) gases and on temperature. By this criterion, the Kyoto Protocol is not meaningful. Even if punctiliously observed by all industrial states, the 5.2% average reduction (with respect to 1990 emission rates) would lower the calculated temperature increase for 2050 by only 0.05 degrees C (from 1.40C to 1.35C). Even ten Kyotos would not stabilize atmospheric GH gas levels, but merely slow down the current rate of increase.
From an economic point of view, a meaningful reduction by developing nations
should be large enough so as not to induce US industry to move its energy-consuming
manufacturing activities offshore. From a political point of view, a meaningful
reduction by developing nations should be one that satisfies the above criteria
- without requiring offsetting foreign aid or other payments that constitute
a bribe paid by the US taxpayer.
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EMISSIONS TRADING
The Administration's strategy for meeting the other objection of the Senate is to rely on emission trading. In principle, trading should reduce the cost of complying with the Kyoto Protocol. It would result in the lowest-cost industries cutting their emissions and selling their unused permits to those whose control costs are higher. This procedure seems to work well with permits for sulfur dioxide within the United States. But there's no guarantee that it will work for CO2 on an international scale. There is first of all the matter of objections from those who feel that this is simply a method of "buying out" from emission cuts. Former UK environment minister John Gummer has lambasted the U.S. in vehement terms. European governments have been cool to emission trading and generally seem to feel that is essential that one suffers; it is considered a kind of moral imperative.
But the real problem, as already mentioned, is the initial assignment of emission quotas. A subtle point here was the decision to use 1990 as the base year. The choice of 1990 gives a major preference to Great Britain and Germany, as well as to the former Soviet Union. In the case of Great Britain, they have switched from coal to gas and thereby reduced their CO2 emissions while at the same time closing down economically unproductive coal mines. The unification of East and West Germany resulted in closing down of extremely inefficient and uneconomic power plants and industries; as a result, between 1990 and 1995 Germany actually reduced its emissions of CO2 by 25 percent! In the case of the former Soviet Union, the economic collapse has reduced their emissions greatly. France, on other hand, switched to nuclear power before 1990 and does not get credit for these large reductions in emissions. This matter is likely to cause problems when the final adjustments are made within the European Union. In the meantime, the former Soviet Union has a lot of "hot air" emission credits to sell to Western nations, particularly to the United States. And if international emission trading is approved, the developing countries will want to sell "tropical air" to United States in a giant income transfer.
CARBON TAX
There is a catch here, of course. If these countries have plentiful emission credits for sale, then their price will not be very high and perhaps quite low. This means that the United States would be able to buy permits cheaply, and proceed as if the Kyoto Protocol did not exist. In other words, the existence of large unused quotas of emission permits means that the emissions will continue as before Kyoto and the atmospheric concentration will be little changed.
But if the quotas are set tightly, then prices will be at the high end. The cost will be passed along to the consumer by power stations and industries, in addition to the direct expenditures for transportation and heating. The vaunted trading scheme then will become mostly a carbon tax. By making energy costly in the United States, it will cause industry and jobs to move overseas where there are no restrictions -- exactly what the Senate Resolution tries to oppose.
We have not even dealt in depth with the problem of accounting, measuring, monitoring, enforcement, and sanctions. The details of all of these are mind- boggling and likely to involve lengthy negotiations. They certainly represent an intrusion upon industries and consumers in the United States by a bureaucracy which is controlled by an international elite that is not responsive to voters since they are not elected. In many ways, this is one of the most objectionable and disagreeable aspects of any protocol that tries to limit emissions on an international basis.
Then with all these problems and with so little scientific and economic justification, why the support for Kyoto within the Administration and many other sectors of society? There are of course several different strands here; it is useful to disentangle them and discuss them separately. There is, first of all, a large group of people without any hidden agenda who simply believe that global warming is real, is here today, and is posing a threat to their welfare and to the welfare of their children and grandchildren. Let's refer to them as the upper-middle-class, over-anxious. (Perhaps they can be educated, but this will require a major effort.) Working-class men and women, and especially organized labor, are not likely to share these views, being more concerned about the immediate loss of jobs than about a future problematic warming.
We then have groups that gain directly from the KYOTO PROTOCOL in one way or another. Scientists of all stripes get more funds for research; not just climate experts, but also social scientists and even theologians who ponder the ethics of environmental change. Bureaucrats see their power increase as their budgets grow; they receive perks, recognition, and the ability to control the lives of others. Environmental activists, and especially their well-paid leaders, share some of the same objectives; perhaps that's why they work so well with government. The media find disasters of any kind irresistible - even if fictitious; they sell newspapers and air time on TV. Many consulting groups and industries receive direct financial benefits from the two-billion-dollar-a-year research budget of the federal government. And don't forget the finance ministers, who see this as a convenient way of raising additional revenue through a large-scale energy tax or carbon tax -- basically a consumption tax. Like a gasoline tax, it is regressive but it is easy to control -- and is touted to be kind to the environment. And it also permits more government spending - which gets us back to those who receive the funds.
But we also have groups with broader agenda, some of them open, some others hidden. The one-worlders see this as opportunity to strengthen world government. Global warming is of little concern to them except as a means of setting up UN bodies to supplant national sovereignty. A different agenda belongs to the anti-growth and anti-technology advocates who want to de-industrialize the United States and other developed countries. Ironically, most of them also oppose nuclear power, the major non-CO2-emitting energy source today. Some of them have a romantic view of returning to a pre-industrial rural existence; others are driven by less noble ideals. Here we have the core of all the environmental movements, including the neo-Malthusians who believe that we are running out of resources -- that the world is facing disaster unless we cut back on growth.
Finally, there are the neo-pagans, who put nature above mankind, worship plants and animals, and consider humans to be outside of nature. Examples of this kind of thinking abound: the Morelia Declaration signed by a group of scientists, or the remarkable testament of Al Gore's thinking The Earth in Balance.
CONCLUSION:
Can we predict the outcome of this struggle about the KP? If the basis were just science or economics, then Kyoto won't make it. But in a democracy, the battle will be political and that makes the outcome a little difficult to fathom.
The science is fairly straightforward. Even if one were to trust the model predictions of future temperature rise, Kyoto is not the way to go: too expensive and quite ineffective. If it is decided that the Climate Treaty calls for limits to CO2 in the atmosphere, sequestration may be the better alternative for mitigation - at least as an adjunct to the emission controls of the KP. Current research suggests that fertilizing the oceans with iron, a micronutrient, may be the most cost-effective method. But the main message from science is that we have seen it all in the historic climate record; and further, we can be fairly sure that a little warming will restrain sea level rise - not accelerate it - and that severe storms and even hurricanes will not increase.
Economics also paints a benign picture of global warming. If the latest analyses are borne out, then more warming is what we need -- to increase GNP and prosperity.
But both scientific and economic arguments are contentious and lead to debates that the media and decision-makers, not to mention the public, will find difficult to follow. Therefore, it will come down to a political decision. And because of the leading position of the United States in emissions, it will be a US political decision that determines the global fate of the global Kyoto Protocol.
In the Congress, the division is likely to have a partisan tinge. Even though the Senate voted unanimously for the Byrd-Hagel resolution, many Democrats may support President Clinton and Al Gore. The position of labor unions, blue-collar workers, and minorities will be crucial. If they become convinced that Kyoto spells job losses, they may well vote against the Democrats. In the coming presidential campaign, populists like Pat Buchanan and Ross Perot may have much to say about Kyoto and jobs.
But the key factor will be the election of the President of the United States. Here the Kyoto debate could play a significant role, since Gore is so strongly identified with support of Kyoto. The fate of the Protocol may well depend on whether Gore wins or loses the election in 2000.
