TCS Daily


'A Deep Concern'

By James K. Glassman - August 7, 2003 12:00 AM

Just as the American approach to climate change is winning support around the world, a group of Northeast governors, including New York's George Pataki, is siding with European nations by embracing the Kyoto Protocol, which President Bush rejected two years ago as "fatally flawed."

 

In 2001, Bush acknowledged that climate change was a serious potential threat. But instead of plunging headlong into a regulatory regime that would drastically increase the cost of electricity and reduce economic growth by what the Clinton administration estimated would be 3 percent a year, Bush advocated more research and encouraged businesses to explore voluntary measures and to help developing nations.

 

In the past two years, the U.S. approach has been succeeding, especially in poorer countries, which stand to lose the most if global growth stagnates. The main backers of Kyoto, which has yet to be ratified six years after it was signed, are Europeans. That stands to reason. First, Europeans face lighter burdens under the agreement. Second, Europeans would dearly love to eliminate a competitive advantage of American firms -- our lower energy costs.

 

Now, as U.S. policy has won adherents at international meetings such as the Earth Summit last summer in Johannesburg and the COP-8 climate conference last fall in New Delhi, governors in New England and the Mid-Atlantic states are moving toward Kyoto-style limits on the emission carbon dioxide, a greenhouse gas that helps heat the atmosphere.

 

In April, Pataki asked governors of Connecticut, Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, Vermont, Delaware, New Jersey, Pennsylvania and Maryland to join in a pact that would treat CO2 as if it were a pollutant, like nitrogen oxide and sulfur dioxide. CO2 emissions from power plants would be capped, and power generators would trade emissions rights among them on an open market. Most of the governors, including Republicans, are lining up with Pataki.

 

In early June, state attorneys general from Connecticut, Maine and Massachusetts filed a suit in federal court to force the Environmental Protection Agency to regulate CO2 as an air pollutant under the Clean Air Act. CO2, of course, is not a pollutant. It doesn't make anyone sick; in fact, it is necessary for the growth of plants and the maintenance of a stable global ecology.

 

The Northeastern states, in their latest efforts, have stolen a page from the Europeans' playbook. Most of them rely very little on coal, which generates more CO2 than fuels like natural gas and nuclear power. If they can force emissions caps on the entire nation, they will benefit handsomely from their competitive energy position.

 

For example, coal generates more than half the electricity in states nationwide, but it generates only 8 percent of the electricity in Maine, 12 percent in Connecticut, 18 percent in New York and none at all in Vermont and Rhode Island. Partly as a result of the lack of low-cost coal, residential electricity rates in New York are 61 percent higher than the national average and industrial rates in New England are 56 percent higher.

 

Imagine the windfall for the Northeast from a cap-and-trade emissions policy that favors natural gas and nuclear. And imagine the costs to such states as Michigan, Ohio, Indiana and Missouri -- all of which use coal for at least two-thirds of their electricity needs (and all of which, by the way, are key battlegrounds in the 2004 presidential election).

 

Even if the cap-and-trade deal applied only to the Northeastern states, New York would be a winner against its two major competitors in the area, which aren't Vermont and Rhode Island, but Pennsylvania and Maryland. An analysis by the American Legislative Exchange Council found that if New York challenged other states simply to match its current average CO2 emission rate, "Pennsylvania and Maryland would need to reduce their coal use by 25 percent or more." This would mean, ALEC calculates, the loss of 50,000 jobs. No wonder Maryland Gov. Robert Ehrlich, a Republican, has been hostile to the New England-New York scheme. Pennsylvania Gov. Ed Rendell, a Democrat, hasn't accepted it yet either.

 

Let's assume, however, that the Pataki approach isn't cynical, but merely misguided. Let's assume that the effort to spread Kyoto-style reductions in CO2 emissions throughout the country fails. At the very least, the price of electricity in these states -- where it is already well above the national average -- will rise sharply.

 

And what are the benefits?

 

No one has the slightest idea, and that is the real problem. This uncertainty is the reason that President Bush wisely rejected the Kyoto Protocol.

 

Scientific research so far has failed to show whether the earth's warming (1 degree Fahrenheit during the 20th century) will continue, accelerate or decline; whether the warming, if it persists, is largely the result of human factors or natural circumstances beyond our control; and whether other "no-regrets" (that is, costless or low-cost) approaches to mitigation will work better than drastically cutting the use of fossil fuels and harming the economy.

 

But consider one simple fact: Between 1990 and 2010, "developing countries like China and India are projected to account for 84 percent of the increase in global emissions" of greenhouse gases, according to a report by the American Council for Capital Formation.

 

It would appear that the CO2-reducing efforts of New York and Vermont, while perhaps politically appealing to Europhile urbanites and organic farmers, will have no appreciable effect on climate. A better approach would be to help developing nations switch from burning dung and wood to improving their technologies to burn coal as cleanly as the U.S. and other industrial nations do now.

 

Precipitous action, moreover, is unnecessary. Economic forces alone are producing an evolution toward new fuels and the more efficient use of current fuels. Climate change, if it does indeed arrive, is not coming overnight.

 

Sadly, alarmism is spreading. An article on "The Future of Energy Policy" in the current issue of Foreign Affairs by Tim Wirth, president of the United Nations Foundation, C. Boyden Gray, former counsel to President George H. W. Bush, and John Podesta, former chief of staff to President Clinton, takes dire view of climate change -- including an inflammatory and distorted chart of temperature increases.

 

But the article does make this point: "The lack of access by the world's poor to modern energy services, agricultural opportunities, and other basics for economic advancement is a deep concern."

 

It is more than that. It should be the primary concern.

 

Wealth makes health. "Poverty," as Indira Gandhi said, "is the worst polluter." We know these things from history.

 

How can the governors of the Northeastern states truly help improve the world's environment? Not by devastating their economies, but by improving them. By keeping U.S. and European markets open to foreign goods -- including the agricultural products that New England and New York cartels work so hard to keep out. By encouraging the use of better technology in developing nations. By spreading free enterprise. By promoting the kind of smaller, targeted agreements -- projects that include governments, non-governmental organizations and businesses -- that were inaugurated in Johannesburg.

 

Instead of going Euro, the Northeast governors should understand that the best hope for both the economy and the environment, in their own states and worldwide, lies with the policies that President Bush has been advancing, with success, over the past two years.

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