The U.S. 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.
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.
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.
Originally published in the World and I, December 1999, pages 331-341. Reprinted with permission.