Vol. II, No. 20

Vol. II, No. 20

September 30, 1998


U.S., EU Move Toward Consensus?

Following two days of informal ministerial meetings in Tokyo, Japan on September 16-17, negotiators from the United States and the European Union claimed to have reached a consensus on many key issues regarding implementation of the Kyoto Protocol.

Stuart Eizenstat, U.S. Undersecretary of State said that relations between the two had improved greatly and that "significant consensus" had been reached on reduction methodologies. He also said that the meeting was a "win-win" for both developed and developing countries.

Eizenstat said, however, that there are still disagreements about limitations on emissions trading between the U.S. and the EU. Unlimited trading is essential for the U.S., said Eizenstat.

Both the U.S. and Japan agree that developing countries must participate, said Eizenstat. The Clinton Administration has made it clear that "we must have meaningful participation by key developing countries" before the Kyoto Protocol will be submitted to the Senate for ratification.

Another prominent U.S. delegate is not so upbeat, however. Dirk Forrister, chairman of the White House Climate Change Task Force, said, "the likelihood of us coming out of Buenos Aires with substantial results isn’t great." He also said, "climate change is not the type of issue you resolve in a couple of meetings or a couple of years. We’re going to be working on this for many years" (Calgary Herald, September 23, 1998).

EU Commissioner for Environment Ritt Bjerregaard also said that cooperation "was very high." She said, however, "domestic efforts need to be the main activities to combat climate change." At the Tokyo meeting, she said, "we all agreed domestic action was the main part . . . The Americans agreed to that."

Bjerregaard scoffed at the U.S.’s demand that developing countries participate in emissions reductions. "It is clear that it is a problem the United States created for itself," she said. "I think one way or other they will have to deal with it" (BNA Daily Environment Report, September 21, 1998).

U.S., Japan May Form "Bubble"

Under the Kyoto Protocol, the 15 members of the European Union are allowed to form a "bubble" in which each member has its own emissions reduction targets. Five of the EU members are allowed to increase emissions and France will not have to make any cuts. The remaining members are required to reduce emissions.

Emissions trading among member countries will allow those who have to reduce emissions to purchase emissions credits from those who are allowed to increase emissions.

The EU may also insist on a limit "on the amount of trading that can be done through . . . flexible mechanisms such as emissions trading," said Undersecretary of State Stuart Eizenstat, in a speech at a press luncheon at the Foreign Correspondents Club of Japan. He says that if they do, the U.S. would join with eight other countries, including Japan, to form their own trading bubble without trading restrictions.

"Putting an artificial cap on emissions," Eizenstat said, "not only hugely increases the cost to Japanese industry and U.S. industry but … will hurt the developing world because it will not create the incentives [for them] to be able to sell emission rights by reducing their emissions."

Eizenstat also mentioned that the U.S. is still working hard to convince developing nations, including Argentina and Brazil, to sign the Kyoto Protocol. "We need to get a critical mass of countries in the developing [world] together to convince ourselves and the [U.S.] Congress," to ratify the protocol, Eizenstat said (BNA Daily Environment Report, September 17, 1998).

Some Developing Countries are Beginning to Waver

The issue of whether the developing nations will voluntarily accept binding emissions on greenhouse gas emissions has been hotly debated. It appears, however, that there is some movement towards realizing that goal. The secretariat for the United Nations Framework Convention on Climate Change made public the provisional agenda for the Buenos Aires conference on September 17. Appearing on the agenda was a provision for "informal consultations" on the issue of voluntary commitments. Argentina, which is hosting the November 2-13 conference, requested that the issue be included.

In December 1997, the developing countries unanimously rejected voluntary commitments. Now, however, a number of Latin American countries, including Argentina and Chile have expressed some interest, in part due to the potential for large cash flows from selling emissions allowances (BNA Daily Environment Report, September 18, 1998).

Council on Foreign Relations Fellow Urges Rejection of Kyoto

David Victor, a fellow in science and technology for the New York City-based Council on Foreign Relations, told an audience at Resources for the Future that the U.S. should reject the Kyoto Protocol for two reasons.

First, the ability to monitor and measure greenhouse gas emissions is still poor. While existing data on carbon dioxide emissions is good quality, there is still much uncertainty regarding how much carbon dioxide ends up in the atmosphere and how much is absorbed by other sinks. Moreover, data on the other five greenhouse gases covered by the Kyoto Protocol – methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons – is still very poor.

Victor also argued that an international emission trading system would transfer enormous amounts of wealth to Russia and Ukraine. As a result of several years of lackluster economic performance, a return to 1990 emission levels by 2008-2012, as required by the Kyoto Protocol, allows each country to increase emissions. The easy target was set as compensation to secure participation from the two nations. Victor argues that while useful, compensation in this case is "way out of line."

Finally, Victor opposes developing country participation. Without a compensation system, said Victor, "there’s no way" that the developing countries can limit their greenhouse gas emissions, nor should they be required to (BNA Daily Environment Report, September 17, 1998).


The Real Costs of Kyoto

It is well documented in the peer-reviewed risk literature that higher wealth means lower risk. Anything that reduces wealth, therefore, increases risk, leading to higher mortality rates. Two new studies take a look at the mortality costs of the Kyoto Protocol.

In a new study for the Competitive Enterprise Institute, Frank Cross, professor of business regulation at the University of Texas at Austin, looks at the mortality costs of several different global warming policies. Cross shows, for example, that increasing the average fuel economy of the U.S. vehicle fleet from 27.5 to 40 mpg would lead to an additional 1,650 traffic fatalities and 8,000 serious injuries per year.

Increasing home energy efficiency, according to Cross, would also increase mortality. Increased insulation reduces ventilation, causing indoor air pollution levels to rise. "A fifty percent reduction in ventilation will roughly double indoor air pollution concentrations," says Cross. "Because Americans spend more than 90 percent of their time indoors, the risk from indoor pollution exceed that from outdoor pollution."

Finally, Cross conservatively estimates that global warming policies would reduce per capita income by $1,000. Every $10 million reduction in national income leads to one death. This translates into 25,000 premature deaths per year. These mortality costs will fall most heavily on poor individuals. The study, Could Kyoto Kill? The Mortality Costs of Climate Policies can be obtained by contacting CEI at (202) 331-1010.

Kenneth Green, director of environmental studies at the Reason Public Policy Institute, has also released a study that takes a look at the costs of global warming policies. Green points out that over the last two decades many peer-reviewed studies have found that there is an inverse relationship between income and risk.

Green argues that this research shows that "People use their disposable income to weave a personal safety net around themselves and their loved ones. The more disposable income they have, the tighter the weave of their personal safety net. The less disposable income they have, the looser the weave."

One study which appeared in the Journal of Risk and Uncertainty (JRU), shows that "based on data from the National Longitudinal Mortality Study relating income to the risk of dying, approximately each $5 million of regulatory cost induces a fatality if costs are borne equally among the public. If costs are borne proportional to income, approximately $11.5 million in regulatory costs induces a fatality."

Green assumes that compliance with the Kyoto Protocol will reduce national income by about one percent or $100 billion annually. Using the JRU model, Green estimates that reducing greenhouse gas emissions to 7 percent below 1990 levels will lead to an additional 9,000 to 22,000 deaths per year.

Green also argues that environmental regulations are "more expensive than saving lives through other types of safety regulation." Spending the $100 billion on other, more cost-effective measures would save more lives. Green estimates that "at $23,000 per life-year saved, $100 billion dollars could save 3,571,428 lives each year through further improvements in flight safety (were there that many lives at risk!), while even with established environmental interventions, $100 billion dollars could save 13,108 lives each year."

Green’s study, Evaluating the Kyoto Approach to Climate Change, can be obtained at www.reason.org.

Is the Kyoto Protocol Compatible with the WTO?

One of the difficulties with negotiating an international treaty is avoiding conflicts with the trade rules set forth in the World Trade Organization (WTO). Gary Sampson, director of Trade and Environment Division of the WTO argues in The Daily Yomiuri (September 19, 1998) that coherence between the Kyoto Protocol and the WTO is "of primary importance."

Sampson argues that one of the potential problems is that differentiated targets as well as the developing country exemption from participation in the Kyoto Protocol would lead to calls of trade protection from "those adversely affected by cheaper imports not subject to the specific measures in the exporting countries." Sampson points to Europe where a variety of carbon and energy taxes have already been implemented. "These all include some form of compensatory measures," such as total exemptions, reduced rates for most energy-intensive processes, and others, says Sampson.

"The challenge from a trade policy perspective is to draw the line between legitimate measures to restore competitiveness and those designed to create an unfair advantage for local producers," Sampson said.


Does the Earth Act to Subdue Temperature Trends?

There’s been a lot of talk lately about the possible role of El Niño in climate change. Many of the global warming alarmists have claimed that recent, large El Niño events are due to man-made global warming. A new study in Geophysical Research Letters (August 1, 1998), however, suggests that the El Niño/La Niña cycle may serve to dampen global temperature changes.

The study finds that certain weather processes promote temperature trends while others reverse them. According to Tsonis et al., "processes of time scales less than 20 months tend to sustain a tendency toward an initial trend (whether positive or negative) and processes of time scales greater than 20 months tend to reverse a trend in the past." The authors ask, "Is then ENSO (El Niño Southern Oscillation) a self-adjusting mechanism countering the tendency of shorter time scale events to organize a positive or a negative temperature trend?" The evidence suggests that it does.

"ENSO related data," the authors say, "show a clear change in the El Niño/La Niña cycle in the mid 1970s. In the interval 1950-1975 (marked by cooler global temperatures) La Niña events are strong and lasting longer than El Niño events. Exactly the opposite is the case in the interval 1975-today where warmer global temperatures are observed. Thus, a hypothesis consistent with these data and our results would be that El Niño is activated to reverse positive trends and La Niña to reverse negative trends."

The authors conclude by asking "is the present long-term trend, for example, a result of processes that operate at much longer time scales and which tend to sustain a positive? If yes, what are the processes that reverse that trend?"

Outer Atmosphere May be Shrinking

British scientists reported in the September issue of Journal of Geophysical Research that the outer layer of the earth’s atmosphere, known as the thermosphere, has fallen about five miles and that man-made global warming may be the culprit.

It is well known that the sun causes the thermosphere to expand by many miles during the day, contracting at night. But Martin Jarvis, lead author of the study, believes that they have discovered a long-term retreat, indicating that the thermosphere is cooling, something that global warming theory predicts. Jarvis admits that the results are not "shattering" but feels that things are changing.

Earlier this month two Indian scientists failed to detect a trend and Arthur Thomas, an atmospheric physicist and senior scientist at the National Center for Atmospheric Research in Boulder Colorado commented that "People at different locations have found different kinds of effects. We’re still not 100 percent clear that we’ve pinned down the science" (The Washington Post, September 17, 1998).


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