TCS Daily


Kyoto Dragon Slain

By Willie Soon - January 2, 2001 12:00 AM

The Kyoto Protocol's chickens are coming home to roost all over the globe - and it's not a pretty sight. As government ministers begin to get a better understanding of the true economic impact of the carbon dioxide emission restrictions called for in the Protocol, political fissures are emerging that threaten to sink the treaty faster than carbon dioxide in a lush New Zealand forest.

Japan just joined the United States in rejecting Kyoto's mandated carbon dioxide cuts. The country where the Protocol was drafted ranks third worldwide in carbon dioxide emission and is mired by a slumped economy. The carbon dioxide cuts would be economically punishing to nearly all developed countries, and that economic disaster would cascade disastrously to developing economies of the world.

Japan will still focus on voluntary cuts as a hedge against fears of "consumer boycotting [in Europe and other areas that support the Kyoto treaty]," according to one Japanese government source.

Oh, Canada!

To our north, the Canadian Minister of Industry recently said "there is a very strong consensus around the Cabinet table and in caucus that Canada must do nothing in competitive terms that would handcuff our capacity to compete around the world and with United States."

Rick Hyndman, senior policy advisor of climate change for the Canadian Association of Petroleum Producers (CAPP), added "The position of CAPP, and most industry I think, is not opposition to the protocol, per se, but opposition to ratification before it`s evaluated. Most people in industry think it`s very difficult to do a serious analysis of policy options and a serious consultation with shareholders by mid-2002."

But David Anderson, the Minister of Environment, quickly stressed to the Canadian public that Prime Minister Jean Chretien will make the final decision on ratification by mid-2002 - less than the time Canadian businesses feel necessary to evaluate the consequences.

'EU'thanasia for the Treaty

Across the Atlantic, the European Union (EU) has an umbrella plan to cap carbon dioxide emission averaged over EU countries. The scheme punishes the worst polluters by imposing financial penalties. This EU move is unsurprising for the EU has been trumpeting itself as the "climate savior" of the Kyoto Protocol.

But then came stunning comments from the German Economic Minister, Werner Mueller. Discussing the Green Party`s ambitious goal of cutting carbon dioxide emissions 40% by 2020, Mueller said that such cuts would have "considerable costs for the economy, which would also hit private consumers." Mueller is naturally concerned about the long-term economic competitiveness of Germany.

A spokesman from the German Environmental Ministry hastily contradicted Mueller`s comment by asserting that "the 40 percent target is achievable, and will also create jobs." The Ministry provided no details on how Germany can both cut its emissions by 40% and create sustained economic growth and hence more jobs. Without a Green Party endorsement of new nuclear power plants - a political impossibility -- the energy demands of a vibrant economy such as Germany's cannot be met.

Common Sense Kiwis

And how about the green pastures of the South Pacific? New Zealand has about 50 million sheep and cattle whose combined effects from belching and flatulence produces about 44% of New Zealand`s inventory of total greenhouse gas emission. One proposal to limit greenhouse gas emissions from its sheep and cattle industries was to impose a flatulence tax of $6.40 per sheep and $25.60 per head of cattle. After farmers protested, the flatulence tax was abandoned.

New Zealand's prime minister has called incorporating carbon sinks into the total emissions calculus a political non-starter, despite the country's vast forests and green spaces. But without factoring those in, the economic impact of Kyoto will be devastating to the Kiwis. An economic assessment produced by the New Zealand`s Institute of Economic Research in December found that, in 15 years, New Zealand`s GDP would be 18% lower than it would have been without the Kyoto emission cuts. This new report also cautioned that "New Zealand should be extremely cautious about enforcing any emission abatement on its domestic economy in the absence of a global regime."

According to the latest global emissions report from the United Nation`s Environmental Programme, 21 out of 35 industrialized countries will not reach their Kyoto targets if no drastic measures to cut emissions are taken. To date, the average cut for the those 35 industrialized nations will have to be about 14% from current levels during the deadline of Kyoto Protocol, 2008-2012.

Moreover, the U.S. would have to cut its greenhouse gas emissions by about 25% from present-day values. Similarly, Canada would have to cut 20%, Australia by 16%, Japan and Norway both by 21%.

Under this new world order of international climate diplomacy, powerful emitters like China -- which will be out-emitting the United States in a few years -- and India are exempt from the current responsibility of emission cuts. Meanwhile, Russia is ramping up its petroleum recovery, possibly doubling it to 12 million barrels per day, while it ranks third in carbon dioxide emissions. Yet Kyoto requires that Russia need not cut below its 1990 emission levels. The impact of the protocol's sophisticated equation of country-by-country limitations and permissiveness in emissions means that the air's concentration of carbon dioxide will not meaningfully change. In other words, the claimed climate catastrophes - unfounded by the most reliable scientific evidence - remain unaddressed by the protocol's complexities.

It has taken several years of research and debate, but as a more complete picture of the costs of Kyoto emerges, government officials around the globe are wrestling with the consequences and are having second thoughts. That's understandable. And it's a welcome development for the new year.
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