14 juli 2005

Trying to understand the U.S. position on global warming (The Flemish Beerdrinker)

Europeans in general have a difficult time understanding the view of the Bush-administration on global warming. However, more and more i’m starting to wonder if they really want to understand it. This American government is considered to be populated by a bunch of stupid extreme right-wing and conservative people, which many think is enough to prove the case that it’s position on global warming just can’t be right. If Bush is against Kyoto, is must be because he is stupid or because he is defending the malign interests of American businesss, or both. That Kyoto itself might be highly flawed, does not cross their minds. Not only Europeans, but also left-wing Americans take this position. If Bush says that Kyoto will cripple the U.S. economy, some cannot miss the chance to mock Bush’s foolishness:

Last week at the G8, President Bush restated his favorite global warming canard: that mandatory curbs on fossil fuel pollution will “cripple the U.S. economy.”


I wish there was an even bolder bold on this computer to emphasize how insane this logic is. Non-stop flooding, killer heat waves, energy and food shortages: what will these do to the economy?

It’s not sure who will have the last laugh however. Indeed, I contend that this view needs to be corrected a bit.

First, it’s rather easily forgotten that America’s negative view of Kyoto predates the current Administration and that it always has been a rather bipartisan affair. It was the American Senate that unanimously told president Clinton that it would never ratify the Kyoto-treaty.

Second, from the side of the U.S. economy it is indeed not sure that global warming on net will have a negative effect. Studies suggest that the consequences may well be positive. So it’s not clear that Bush is really the fool some think he his.

Third, it’s also not clear why Kyoto should be the treaty for the Americans - and the rest - to adhere to. As a recent report of the British House of Lords put it:

The Kyoto Protocol makes little difference to rates of global warming and has a naive compliance mechanism, which can only deter countries from signing up to subsequent tighter emissions targets

Even shorter: the Kyoto-protocol is rubbish.

Of course those lords are a bunch of fools too, for trying to understand the position of the Bush-administration. As they write:

There are several elements to the cost burden that the US would bear if it ratified Kyoto. First, it would have its own domestic emissions reduction programme and the costs of that would fall on industry, transport and households. The US judged early on that these costs would be unacceptable, but had always maintained that the prospect of acceptability would exist if there was widespread emissions trading. In the event, the Kyoto Protocol enabled various forms of trading: trades between rich nations based on allocated permits (cap and trade), project-based trades between (roughly) OECD countries and East Europe and Former Soviet Union (“joint implementation”), and project-based trades between OECD countries and developing countries (“Clean Development Mechanism”—CDM). Moreover, the US had already sponsored major efforts at joint implementation in order to learn how to operate such projects. Arguably, the limited prospects for extensive cap and trade systems (which is what the EU has developed), and the comparatively small role playable by joint implementation and the CDM, persuaded the US government that compliance costs to the US would be higher than they hoped.Second, the US has been insistent that developing countries must quickly assume targets of their own. We noted above that this is a rational position to take since rates of warming cannot be adequately affected without this happening. The developing countries have always maintained that warming was not their responsibility. If the rich countries want to bring the developing countries on board, they might therefore have to pay for developing country reductions as well as their own. The Kyoto Protocol does have “flexibility mechanisms” which permit reductions in developing countries to be credited to developed economies provided the latter pay for them. But what the US may have feared was the prospect that the developing countries would maintain their “you not us” stance and eventually the US would have to become a major contributor to the costs of reducing emissions in developing countries, without emission credits being secured.Third, “relative” cost matters, i.e. the burden on the US relative to the burden borne by others. Apart from any feelings about “unfairness” if others did not appear to bear as big a burden, there are concerns about competitiveness, and about impacts on specific sectors of the economy—not least oil and coal producers.A fourth factor relates to the Integrated Assessment Models (IAMs) that influenced the US government. These were primarily those that showed comparatively small global benefits from Kyoto (the work of Professors Nordhaus, Mendelsohn, Manne and Dr Richels). Thus the US was being asked to bear a “big” cost (as they saw it) for uncertain global benefit. The climate models themselves were showing little or no effect on rates of warming from Kyoto. However, a dominant feature of the minor impact of the Kyoto Protocol on warming is also the fact that developing country rates of growth of emissions are the fastest. President Bush clearly stated: “I oppose the Kyoto Protocol because it exempts 80% of the world, including major population centers such as China and India”. We offer this brief analysis of the position of the US not because we wish to defend that position, but in order to argue that there is an economic rationality to the stance taken. Failure to understand that rationality will misdirect efforts to bring the US into future negotiations in a more positive way. (...)Finally, the US has repeatedly stressed the role of technological change in securing greenhouse gas emission reductions. While the Kyoto Protocol should, in principle, encourage technological change, we are not convinced that it has sufficient focus on this central issue.

Maybe the American position will turn out to be wrong after all, but it’s definitely more sensible and less foolish or malign than most are likely to admit.

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