TCS Daily

New Technology, Market Approach Are Answer To Climate Fears

By Lynn Scarlett - January 29, 2001 12:00 AM

There are two, or maybe three, major international environmental issues. One of them is climate change.

And last week, in one of its first environmental policy decisions, Bush officials asked for a delay of the United Nation's international meeting on climate change in Bonn originally scheduled for late May. They needed time, they said, to put their negotiation team together.

U.N. officials have yet to agree. But tougher than putting a team together for the administration will be to craft a coherent U.S. climate change policy -- and successfully negotiate it on the international scene. The international order, so far, is locked into a policy framework - called the Kyoto protocol -- developed four years ago at the U.N. climate change conclave in Japan. The framework is fundamentally flawed.

The protocol established greenhouse reduction goals for various nations or regions. The U.S. target was a 7 percent reduction of greenhouse gases below 1990 levels, to be achieved by 2012. But the devilish details were left to subsequent negotiations, and they were no minor matters.

Left undecided in the protocol was the role or obligations of developing countries --countries like China and India with big populations, high levels of greenhouse gas emissions, and big economic development expectations. Also undecided was how reductions could be achieved.

Steeped in old environmentalism and preoccupied with means rather than ends, negotiating parties are battling over the role emissions trading and so-called carbon sequestration (reforestation, for example) might play in reaching Kyoto Protocol goals.

If results alone mattered, this fuss over methods would be irrelevant. But negotiations over details of the framework are larded by politics in which hidden -- or not so hidden --agendas unrelated to environmental results dominate.

Developing countries see the protocol as another opportunity to make their case for financial assistance -- debt relief and technology handouts. These arguments for post-colonial era redistribution of wealth from rich to poor perennially surface. But now the developing countries have the very well being of the planet -- not merely rich country guilt -- to wield in their rhetorical arsenal.

At the same time, Europe ornaments its pressure for tough targets and a limited toolkit of greenhouse gas reduction options in high-minded language of planetary salvation. But behind all the high mindedness lies simple self-interest. Europe wangled a deal in the Kyoto Protocol whereby all of Europe would face a single reduction goal. And with Germany was already replacing old, outmoded, highly polluting factories and electricity generating facilities in the former communist East Germany, those investments would bring all of Europe within the Kyoto Protocol reduction targets. Restricting U.S. options for reducing its greenhouse gases would corner the United States into higher-cost compliance alternatives, finally allowing Europe a way to rein in the global economy's economic gazelle.

Enter Team Bush.

Former President Clinton signed the Kyoto Protocol, but the U.S. Senate has not ratified it. Bush himself flatly opposed the protocol as a bad deal during his campaign. And the Senate, in a near unanimous vote, indicated it would not ratify the protocol unless developing countries were involved and emissions trading, carbon sequestration, and other cost-lowering options were permitted. To their credit, Clinton's negotiators pressed hard for these options.

But all this haggling over the details of the protocol skirts a more fundamental question. Is the Kyoto Protocol, which creates a regulatory framework with specific reduction targets for some greenhouse gasses, good policy?

Extreme skeptics of climate-change theory denounce the protocol for taking aim at what they view as a nonexistent problem. Given growing scientific evidence that some warming may be underway (though disputes remain over whether this warming lies within naturally fluctuating ranges), the critique by extreme skeptics misses the mark.

But there are two other reasons for rejecting the protocol, and they center on environmental results.

First, even many of its champions view the protocol as ineffectual in terms of reversing possible climate change. Economist Robert Repetto, supporting the protocol, has, nonetheless said, "Nobody thought in their wildest dreams that Kyoto would solve the climate problem." Its main effect, opines Repetto, would be "to get nations off a business-as-usual trajectory." Symbolism is a poor excuse for urging potentially costly policies.

The second reason for rejecting the Kyoto Protocol framework is a more fundamental one. From the outset, discussions about climate change have swirled in uncertainties. Understanding how and why global climate patterns change involves multiple, complex variables.

Headlines proclaim consensus: "Scientists Say Warming Is Real." But this is not the whole story. Those same consenting scientists have also said they can't pinpoint causation; they don't know how changes in temperature will affect cloud formation, radiation, and the role of clouds on precipitation; they don't understand fully the role of oceans or, even, land processes, on climate.

The much-ballyhooed consensus, it turns out, is slim, and uncertainties dwarf what is known.

The real policy challenge, then, is what's a decision-maker to do in the face of uncertainty -- uncertainty about both effects and causes. Such uncertainty heightens the prospect that policy architects will target the wrong variable, or they will target the right variable with the wrong tools.

Early on in the climate change debate, this conundrum did shape debates. Arguments for "no regrets" policies -- policies that carried other pollution-reduction benefits but would also bring reductions in greenhouse gasses -- got some hearing. It's time for Team Bush to resurrect that discussion.

There are actions the United States might prudently take to reduce greenhouse gasses, but they do not center on rates, dates, targets, and treaties. Technology scholar Jesse Ausubel has shown that "the United States has averaged about 1 percent less energy to produce a good or service each year since about 1800." And, he says, there is lots of room for this trajectory to continue.

Ausubel has also shown that our energy production has shed its carbon content -- "decarbonized" as he calls it -- at a rate of 0.3 percent per year. "Plentiful natural gas, efficient turbines and thrifty end-use devises promise more energy delivered with less carbon during the next decades," he writes." He then concludes: "During the next 100 years, the human economy will clear most of the carbon from its system and move, via natural gas, to a hydrogen metabolism."

These observations point the way to a no-regrets policy. A good place to start is with policies that facilitate equipment turnover. This means changes in regulatory permitting that now tend to lock companies into technologies for a long time. It may mean changes in tax depreciation schedules. It may mean treating pollution-prevention investments the same as pollution-control investments. In a more aggressive mode, it may mean further stimulating R&D in energy efficiency. And it could mean promoting more emission trading for all kinds of pollutants.

The international haggling about the Kyoto Protocol is absorbing much time and a lot of political capital. But most of the haggling is really over who will be punished and who will garner financial goodies. A no-regrets framework turns the discussion back where it should be -- on environmental results.


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