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Vol. VI, No. 11

Cooler Heads Digest

Title

Vol. VI, No. 11

Politics

Japan, Denmark Parliaments OK Kyoto Protocol

Japan’s House of Representatives approved legislation on May 21 that clears the way for ratification of the Kyoto Protocol. The bill will now be sent to the House of Councilors, where it is also expected to pass. Following approval by the Diet, the Cabinet will ratify Kyoto on June 4, according to Environment Minister Hiroshi Oki. The government will then submit its ratification instrument to the UNFCCC secretariat on June 6.

On May 22, the lower house also passed a second bill with the necessary provisions to implement the Kyoto Protocol (Japan Times, May 25, 2002). Both of these actions have met with praise and criticism. The May 1 issue of the Japan Times editorialized that the bill under consideration is "toothless," noting that nearly 90 percent of the domestic greenhouse gas reductions, accounting for 4.4 percent of the 6 percent requirement, will come through carbons sequestration by planting trees. The remaining 1.6 percent reduction will be achieved through Joint Implementation projects that will cut emissions in developing countries. The plan is also devoid of economic instruments such as carbon taxes or emissions trading.

The response from Japanese industry has been mixed. Hiroshi Okuda, chairman of the Japan Federation of Employer’s Associations, praised the action. "Advanced nations must cooperate to tackle the problem of global warming. So Lower House approval of the plan to ratify the protocol should be welcome," he said. Okuda’s enthusiasm for the protocol is dampened, however, by lack of U.S. participation. "We would like to see the government make efforts to have the United States rejoin," he said.

Takashi Imai, chairman of the Japan Federation of Economic Organizations, criticized the House vote. "I regret the Lower House approved the government plan after only three house of debate in its committee on foreign affairs - and without even adopting a resolution to urge the government to further negotiate on the international scene," he said. Most of Imai’s members are steel and iron manufacturers and energy companies that oppose the Kyoto Protocol. The two federations merged under Okuda’s leadership on May 29 (Asahi Shimbun, May 24, 2002).

Denmark’s parliament also voted to ratify the Kyoto Protocol on May 16, making it the 55th country to do so. "This ambitious commitment strengthens Denmark’s position as frontrunner with regard to international environmental agreements," said Hans Christian Schmidt, Denmark’s environment minister. Denmark takes over the six-month rotating EU presidency on July 1 (Reuters, May 17, 2002).

Kyoto Faces Uphill Battle in Canada and Russia

The Canadian province of Alberta has made it clear that it opposes the Kyoto Protocol and will not abide by its requirements if ratified by the federal government in Ottawa. "We clearly will not implement the Kyoto agreement as it applies to Alberta," said Alberta’s environment minister Lorne Talyor. "Now, we recognize the federal government has every right to sign international agreements, but it’s very clear who owns the resources. The people of Alberta own the resources of Alberta" (www.eyeforenergy.com, May 24, 2002).

Alberta, which produces most of the country’s oil and gas, formally broke ranks with the rest of Canada after Ottawa rejected its attempt to have an alternative plan included in joint federal-provincial consultations on Kyoto in June. Among other provisions the Alberta plan calls for a 50 percent reduction in carbon intensity by 2020. "What [is Ottawa] afraid of? Are they afraid their case doesn’t stand up? Are they afraid Canadians will see their case as the emperor with no clothes?" said Taylor (Globe and Mail, May 23, 2002).

Taylor said that Alberta is ready to undertake a major effort to convince the other provinces to support inclusion of the alternative. Nova Scotia and Saskatchewan have already praised the plan, and Ontario, British Columbia and Newfoundland are also amenable to including he plan in the discussions, according to Taylor.

If Ottawa does ratify the Kyoto Protocol, Alberta may take the federal government to court, an action which has precedent in the 1980s, when Ottawa wanted to tax energy exports to the U.S. Alberta successfully argued that it had jurisdiction over its own resources. "I’m not sure if we’ll go forward to a Supreme Court challenge - I hope not," said Taylor. "I hope that we will be able to negotiate with the federal government as they go forward and develop a plan that is both acceptable to Alberta and acceptable to the federal government."

In Russia, Vladimir Grachev, head of the environment committee of the State Duma, told the Daily Yomiuri (May 25, 2002) that Russia is unlikely to ratify the Kyoto Protocol by the end of 2002. The earliest it would ratify is in the beginning of 2003. Russia is seeking further concessions as a precondition to ratification, according to Grachev. "We will not ratify for nothing. Reduction of foreign debt will be a precondition for ratification," he said. "Negotiations with the European Union and Japan (for debt reduction) will be necessary. It is all right for us to ratify the protocol next spring."

EU’s Actions Belie Rhetoric

Although the European Union is likely to ratify the Kyoto Protocol and has consistently warned of the dangers of global warming and the need to reduce energy emissions, its actions are quite different. According to a report by the European Environmental Agency, Environmental Signals 2002, several EU countries are not on track to meet their Kyoto obligations (Financial Times, May 24, 2002).

Several EU countries have implemented measures designed to reduce greenhouse gases, such as taxes and trading schemes, but efforts to implement EU-wide measures have met significant resistance. An EU-wide energy tax, for instance, has gotten nowhere. Spain, the current holder of the EU’s rotating presidency, is attempting to resurrect the measure that would set a minimum tax rate on coal, natural gas and electricity. The country originally opposed the tax, but softened its stance when Germany and France agreed in March to liberalize their energy markets.

Spain’s compromise would tax businesses at a lower rate than households and includes a long list of exemptions from the tax, which are designed to win the required unanimous agreement. Britain, for instance, wants exemptions for fuels used by households and other countries want exemptions for diesel fuels.

The European Commission is less than enthusiastic about the proposal. "The more exemptions there are, the more the directive will look like a Gruyere cheese, with too many holes and too little cheese," said EU Tax Commissioner Frits Bolkenstien. "It is the ambition of the European Commission that we should rather get an Edam cheese, which has a lot of cheese and not any holes" (Reuters, May 9, 2002).

Environmental activists are also rankled over a deal among EU members that will allow Germany to continue multi-billion euro annual subsidies to the coal mining industry, in exchange for allowing other countries to continue diesel fuel subsidies for their trucking industries.

Germany defended the deal, however, citing the importance of coal for its economy. "World oil and gas resources are expected to last for another 30-50 and 60-100 years respectively, while coal will be there for several hundred years," said Franzjosef Schafhausen, head of the German government’s Federal Climate Working Group. "If you mine less coal in favor of gas and oil, you will find prices for those fuels increasing on the world market. We need to ensure security of energy supply" (Reuters, May 7, 2002).

Economics

Another Side to "Solar Boom"

The solar industry seems to be booming. Several large businesses have invested in the industry and solar technology is being used for a variety of purposes and being installed at a fairly rapid pace. "We’re busier than we’ve ever been," said Steven Strong, founder of Solar Design Associates in Massachusetts.

But despite this good news, the actual number of solar-heated homes is declining. The Christian Science Monitor (May 23, 2002) notes that, "Fast-growing, progressive Oregon [has] fewer solar-heated homes today than in 1990….Next door, Washington State saw its total of solar-heated homes fall by half between 1990 and 2000, according to new census data. So did Kansas and New Hampshire, with Illinois (down 32 percent) and Nevada (down 42 percent) not far behind. Of the 22 states for which the Census Bureau has released data, only three saw an increase. Even there gains were minimal."

Two trends help explain this apparent contradiction. First, solar heating is only being used to complement other fuels and second, "Solar’s first boom, fueled by federal tax incentives in the late 1970s and early ‘80s, proved to be an unsustainable fad," according to the Monitor. "While builders are installing new systems at breakneck speed, they’re also ripping out old ones." Part of the problem is that the old solar systems need expensive maintenance and repairs and repairmen are in short supply.

The portion of the solar industry that does seem to be booming is solar pool-heating and electricity generation. About 1 million homes in the U.S. use solar pool-heating and hot-water systems and another 9,000 homes use solar panels to generate electricity. But sales of hot-water systems are significantly lagging pool-heating systems. But they are still much more economical than solar-electric panels.

Referring to the government-created boom of the ’70s and ’80s, Freeman Ford, founder of FAFCO, the nation’s largest manufacturer of solar pool-heating systems, "It’s kind of a sad commentary on public policy. In the early ’80s, the market got up to about $600 million in sales - that was several hundred thousand domestic hot-water heaters that turned out to be a tax-credit bubble." Before the market collapsed there were 250 companies, now there are only five.

The industry claims that the current boom is more broad based, with markets around the world, but those markets are also dependent on government support. Howard Hayden, author of the book, "The Solar Fraud: Why Solar Energy Won’t Run the World," said, "Solar energy is forever, but solar collectors are not."

Canada Lags Behind U.S. in Global Warming Mitigation Efforts

In an attempt to shame the Canadian government and the provinces into taking action on global warming, the Pembina Institute and the World Wildlife Fund have collaborated to publish a report arguing that Canada has fallen well behind the U.S. in efforts to counter climate change.

Because U.S. federal and state governments are ahead of Canada in implementing policies that reduce greenhouse gases, the report dismisses the claim that Canada cannot afford to ratify the Kyoto Protocol unless the U.S. does also. According to the report, "Canadians make a serious mistake if they look only at the current position of the Bush Administration to justify a decision not to ratify the Kyoto Protocol."

The report notes that several U.S. states have adopted measures to reduce greenhouse gases. New Jersey, for example, has a goal of reducing greenhouse gas emissions to 3.5 percent below 1990 levels by 2005 and the New England states have pledged to stabilize emissions at 1990 levels by 2010. Nevada, Connecticut, Massachusetts, Illinois, New Jersey, Texas and California have all implemented renewable portfolio standards, and five of those states, as well as Michigan, provide government funding for renewable energy.

Other U.S. efforts include energy efficiency measures at both the federal and state levels for both electricity and vehicle use, public transportation measures, and renewable fuel measures. Canada lags behind the U.S. in all of these areas.

The report concludes that U.S. efforts, though "far from sufficient," negate Canada’s fears that ratification would hurt Canada’s economy relative to the U.S., even though Canada’s Kyoto commitment to reduce greenhouse gas emissions to 6 percent below 1990 levels by the 2008-2012 compliance period is far beyond anything the U.S. is contemplating.

Nevertheless, says the report, "Canada must ratify the Protocol in order to assume its responsibility to participate in the global effort to curb climate change. Doing so will have the practical effect, for a number of years at least, of closing rather than widening the gap between the U.S. and Canada."

The report, A Comparison of Current Government Action on Climate Change in the U.S. and Canada, is available at www.pembina.org.

Science

Temperature Data Flawed

A study in the May 21 issue of the Geophysical Research Letters has found that adjustment to United States Historical Climatology Network (USHCN) temperature data may have introduced a warming bias. The unadjusted data shows a linear, statistically significant cooling of 0.05 degrees Celsius per decade from 1930 to 2000.

The temperature data, however, has been adjusted to deal with biases that were believed to be introduced by various factors, such as variations in observation times, changes in the temperature measurement systems, station history, and interpolations of missing data. The difference between the adjusted and unadjusted trends increases steadily by more than 0.05 degrees C per decade. In other words, the difference between the two trends grows over time.

The study also looks at the data from 1979 to 2000, which coincides with the available satellite temperature data. Even over this short period of time, there is still a statistically significant difference between the adjusted and unadjusted datasets. Moreover, notes the study, "the trends in the unadjusted temperature records are not different from the trends of the independent satellite-based lower-tropospheric temperature record or from the trend of the balloon-based near-surface measurements." The satellite data show virtually no warming since 1979.

According to the authors, Robert Balling at Arizona State University and Craig Idso with Peabody Coal, the adjustments to the USHCN temperature data "are producing a statistically significant, but spurious, warming trend in the USHCN temperature database." They also note that, "The adjustments to the record result in a significant warming signal in the record that approximates the widely-publicized 0.5 degree C increase in global temperatures over the past century."

Researchers Downplay Significance of Iceberg Activity

The recent breaking away of large ice shelves in the Antarctic is not due to global warming, but is part of a natural process that has been ongoing for thousands of years, according to researchers.

In February and March, the Larsen B ice shelf - 1,260 square miles in area and 650 feet thick - off the Antarctic Peninsula collapsed, and in May a 34.5 mile-long glacier broke away from Antarctica’s Lazarev Ice Shelf, leading many to raise once again the specter of global warming.

But according to Ted Scambos of the National Snow and Ice Data Center at the University of Colorado, "The icebergs that have calved in the last couple of months probably don’t have much to do with global warming. It is part of a pattern of growth and retreat that is more or less normal."

University of Chicago researcher Douglas MacAyeal concurs that what we are witnessing is part of a natural cycle. He states that ice shelves grow and retreat over geological time scales.

Scambos further explained that some ice shelves have become more extended than they were in the past and that they are now just returning to where they were in the 1950s to the 1970s. "It’s a grand event, it’s an astounding event," when the icebergs break loose. "But it probably should not cause alarm … the shelves that are calving don’t seem to be retreating past their minimum historical extent," he said.

Etc.

ExxonMobil’s shareholder meeting held on May 29 in Dallas, Texas, had a circus like quality, at least on the outside. Although much has been made about the efforts of leftwing activists to disrupt corporate annual meetings through protests and shareholder resolutions, a funny thing happened at the meeting. Supporters of ExxonMobil far outnumbered the protestors.

According to a series of news stories by Marc Morano on CNSNews.com, faced with the unexpected numbers of free market demonstrators the anti-corporate protestors finally left. "I think we rattled them. They’re packing up their bags and they’re leaving," said Niger Innis of the Congress on Racial Equality, one of the groups conducting a counter-demonstration. "Victory is sweet."

Many members of the Texas chapter of Citizens for a Sound Economy led by state director Peggy Venable, were also active in the counter demonstrations. The pro-Exxon demonstrators held signs that said, "Mother Nature Guilty of Climate Change," "Get Back in Your SUV & Drive Home," "Choose Capitalism Over Eco-Socialism," "Stop Global Whining," "Oil Employs, Anarchy Destroys," "No Poor Man Passes Out Jobs," "How Much Does Castro Pay You?" and "Greens are Red at Heart."

The protestors were jeered when they began to pack their stuff in a Ford Econoline van. ExxonMobil supporters began chanting "SUV Alert," pointing out the protestors’ hypocrisy.

At Campaign ExxonMobil’s mock trial, which convicted ExxonMobil of crimes against humanity, supporters of the corporation again outnumbered opponents. They included seven people in kangaroo costumes protesting the "kangaroo court."

THE COOLER HEADS COALITION

Alexis de Tocqueville InstitutionAmericans for Tax ReformAmerican Legislative Exchange CouncilAmerican Policy CenterAssociation of Concerned TaxpayersCenter for Security PolicyCitizens for a Sound EconomyCommittee for a Constructive TomorrowCompetitive Enterprise InstituteConsumer AlertDefenders of Property RightsFrontiers of FreedomGeorge C. Marshall InstituteHeartland InstituteIndependent InstituteJunkScience.comNational Center for Policy AnalysisNational Center for Public Policy ResearchPacific Research InstituteSeniors Coalition60 Plus AssociationSmall Business Survival Committee