Vol. VI, No. 6

Vol. VI, No. 6

March 19, 2002

Politics

Japan Decides to Ratify, but Compliance is Doubtful

 

Japanese government ministers agreed at a March 19 meeting on a ten-year plan to cut greenhouse gas emissions.  It is expected that the Japanese cabinet will formally send the Kyoto Protocol to the Diet for ratification soon, perhaps as early as March 22, with a vote planned before the Diet adjourns in June (Kyodo News Service and JIJI Press English News Service, March 19).

 

The three-stage plan calls for voluntary targets in the first stage through 2004 and possible mandatory targets beginning in 2008.  If and when to adopt mandatory targets depends on the progress made in each stage of the plan.  The Protocol requires Japan to cut emissions to 6% below 1990 levels in the compliance period 2008-12.  A business-as-usual scenario projects 2008 emissions at 8% above 1990 levels, so the total reduction will be 14% 

 

One major element of the plan is to resume building nuclear reactors.  The industrial sector’s target is to reduce emissions to 7% below 1990 levels.  Industry now accounts for approximately 40% of Japan’s total energy consumption.  Industrial energy use has been nearly flat since the Arab oil embargo in the early 1970s due to expensive energy efficiency measures.  For industry to make further deep cuts in energy use will therefore be very difficult.

 

The editor of Cooler Heads was in Japan earlier this month and learned that the government expects that the cuts in industrial emissions will be accomplished in large part through carbon leakage.  Heavy industries will close plants in Japan and open new plants on the Asian mainland.  The editor also learned that there is widespread doubt that Japan will be able to meet its Kyoto targets.  However, this seemed to be of little concern, since Japan succeeded in removing enforcement provisions from the Protocol at COP-7 in Marrakesh last November.

 

Residential and commercial energy use is targeted for only a 2% cut below 1990 levels, but this will be difficult to achieve since this sector has increased by 17.5% in the last decade and now accounts for 40% of Japanese energy consumption.  The government plans to encourage lifestyle changes, including using less energy for lighting and heating (Yomiuri Shimbun, March 18).  New efficiency standards for buildings and appliances are also included, as well as higher automobile mileage standards.

 

CAFE Increase Defeated in Senate

 

Several portions of the energy bill (S. 517) sponsored by Senate majority leader Tom Daschle (D-S.D.) and Jeff Bingaman (D-N.M) are meeting with resistance.  On March 13, the Senate stripped bill language that would have required U.S. motor vehicles to go from an average of 27.5 miles per gallon for passenger cars and 20.7 mpg for light trucks to a combined 35 mpg average for the entire fleet.

 

The Senate voted 62-38 to replace the mandate with a requirement that the National Highway Traffic Safety Administration come up with a new Corporate Average Fuel Economy (CAFE) standard within the next 15 months.  The new language was drafted by Sens. Carl Levin (D-Mich.) and Kit Bond (R-Mo.).  Following that action the Senate approved an amendment, offered by Zell Miller (D-Ga.), by a vote of 56-44 to exempt all pick-up trucks from CAFE standards (Greenwire, March 14, 2002).

 

A 2001 study by the National Academy of Sciences found that the reduction in vehicle size required under current CAFE standards has led to an additional 1,300 to 2,600 highway deaths per year and ten times that many serious injuries.  Accumulated over the program’s entire lifetime, federal fuel economy standards are responsible for tens of thousands of deaths.  Higher CAFE standards would increase the death toll. 

 

On March 14, the Senate voted on an amendment from Senator Jim Jeffords (I-Vt.) to raise the renewable portfolio standard - the amount of electricity required to be generated from renewable sources - from the 10 percent level in the bill to 20 percent by the year 2020.  The amendment was defeated by a vote of 70-29 (Greenwire, March 15, 2002).

 

 

Economics

 

Bidding for Money in the UK

 

Britain’s new emissions trading program got underway this week with an auction.  The auction was designed to provide incentives for companies to participate in the program.  The government offered to pay 53.37 pounds ($81.78) for each ton of carbon dioxide equivalent reduced and companies bid by offering the number of tons they would be willing to reduce for that price.  The permits would be tradeable. 

 

According to the Financial Times (March 12, 2002), the government budgeted about 200 million pounds for the auction.  It had originally set the starting price at 100 pounds per ton of carbon dioxide equivalent, but determined that it would bust the budget.

 

At the end of the day 34 companies joined the program, pledging to reduce emissions by a total of 4 million tons of carbon dioxide equivalent over a five-year period, which is five percent of Britain’s planned carbon dioxide reductions (Kyodo News, March 14, 2002).  The UK experience makes it clear that the only way to reduce carbon dioxide emissions is to fork over taxpayer dollars to industry.

 

Pew Touts Emissions Markets

 

A new report by the Pew Center on Global Climate Change argues that, “A market for greenhouse gas (GHG) emissions has begun to emerge over the past five years.”  It admits, however, that, “This market is driven in large part by ongoing negotiations of an international global climate change treaty, which will likely impose limitations on GHG emissions.”

 

The report is striking for what it reveals about these voluntary schemes and the built-in incentives for companies to support mandatory caps.  It explicitly states that these programs are “precursors to formal GHG regulation.”

 

Of course, these programs make little sense unless regulation is forthcoming in the future.  The report points out that, “Few trades of GHG emissions to date have involved an exchange of emissions permits such as ‘allowances’ or ‘credits,’ since these terms refer to government-issued commodities that only exist within the context of formal trading systems.  Most GHG trades have taken place under a voluntary ad hoc framework involving a commodity defined by the trade’s participants and known commonly as verified emissions reductions.  These only carry the possibility, but not a guarantee, that governments will allow them to be applied against future emissions reduction requirements.”

 

The companies participating in these programs are wagering that a mandatory cap-and-trade program is on the horizon and are attempting to position themselves to be recipients of a major financial windfall.  As noted by Ross McKitrick, an economist at the University of Guelph in Ontario, Canada, at a Cooler Heads Coalition briefing, “If emissions are controlled by tradeable quotas, this creates a new, artificial scarcity in something that hitherto had been free: the right to release carbon dioxide.” 

 

McKitrick explains that the value of this newly created asset, “represents the capitalized value to existing users of fossil fuels of the right to emit carbon dioxide at no charge.  This value is already counted into balance sheets, investment portfolios, collateral for loans, etc. all through the economy.”  Putting a price on carbon dioxide emissions extracts that money from its current use and hands if over to the beneficiaries of the policy” (www.cei.org/pdfs/McKitrick.pdf).

 

The Pew report is optimistic that, the “Prospects for a well-functioning international GHG market have greatly improved,” and warns that if the U.S. does not get with the program it could be harmed.  “A qualitative analysis of several scenarios related to the United States’ future climate policy response reveals that, while in the near  term the lack of an emissions constraint may provide an advantage to U.S. firms against foreign competitors confronting such constraints, continued policy uncertainty may be detrimental in the longer term.”

 

 

Science

 

Antarctic Ice Sheet Collapses, Media Hyperventilates

 

An ice shelf, known as the Larsen B ice shelf, in the Antarctic Peninsula has collapsed, leading many to raise once again the specter of global warming.  “The disintegration of the ice shelf - 1,260 square miles in area and 650 feet thick - was most alarming to some because of the extraordinary rapidity of the collapse,” according to the Washington Post (March 20, 2002).  “The shelf is believed to have existed for as long as 12,000 years before regional temperatures began to rise, yet it disintegrated literally before scientists’ eyes over a 35-day period that began Jan. 31.”

 

Although there is no evidence to link the event to global warming, the New York Times (March 20, 2002) could not help raising the issue.  “While it is too soon to say whether the changes there are related to a buildup of the ‘greenhouse’ gas emissions that scientists believe are warming the planet, many experts said it was getting harder to find any other explanation.”

 

Though some scientists quoted were hesitant to link global warming to the collapse, they certainly didn’t dispel the notion.  Ted Scambos, a glaciologist at the University of Colorado’s National Snow and Ice Center, told the San Francisco Chronicle (March 20, 2002), “We can’t say that CO2 or the other greenhouse gases have been dive bombing Antarctica, but we have our suspicions.”

 

Michael Oppenheimer, who recently joined the Princeton University faculty after serving at Environmental Defense where he was chief scientist and held the Barbra Streisand Chair in Environmental Studies, told the Washington Post, “Ascribing a temperature trend in a small region like that to the broader global trend is difficult.  Nevertheless, the collapse of the ice shelf in my opinion can be partially ascribed to human-induced climate change.”

 

To its credit, the Washington Post noted that Nature recently published a study that found that the Antarctic has actually been cooling since 1966.  Another study in Science recently found that the West Antarctic Ice Sheet has been thickening rather than thinning (Cooler Heads, January 23, 2002).  Although the Antarctic Peninsula has warmed over the last 50 years, it is a tiny part of the whole Antarctic continent.  Unless one is willing to believe that the peninsula is responding to global warming while ignoring regional cooling, it becomes very difficult to link the ice shelf collapse to global warming.

 

So what is the most likely explanation?  According to John Daly, who maintains the website Still Waiting for Greenhouse (www.john-daly.com), “The Larsen break-up has been coming for years, and its demise has long been expected.  An ‘ice shelf’ is simply a glacier which reaches down all the way to the coast and then spills out over the sea, pushing its way further and further from land, floating on the sea, until tidal forces, water erosion from beneath, and sunlight from above, finally weaken the floating mass and breaks it off.  It's dramatic, happens on a grand scale, but also very, very, natural.”

 

IPCC: Clueless About Sea Level Rise

 

Cooler Heads has reported many of the criticisms leveled at the U.N. Intergovernmental Panel on Climate Change’s (IPCC) Third Assessment Report.  Somehow we missed the following scathing attack by Swedish sea-level expert Nils-Axel Moerner, a professor at Stockholm University and president of the INQUA (International Union of Quaternary Research) Commission on Sea Level Changes and Coastal Evolution.  Here are some of his comments regarding the work of the IPCC on sea level change.

 

1999: “IPCC has its Third Assessment Report (from its WG-1) out for external reviewing. I have just begun my reviewing. It is absolutely remarkable how inferior and one-sided this report is. And where are all the real sea level specialists from our Commission and from IGCP [International Geological Correlation Program]? They have had little or nothing to say in this report. If science is treated in this way, it is bound to go wrong. This being my first impression, I will finish my review and come back on the issue.”

 

2000: “Chapter 11 on ‘Sea Level Changes’ of IPCC’s 1999 TAR paper was written by 33 persons; none of which represents actual sea level research. I have now finished a 7 pages review report. It is a most shocking reading; lots of modeler wishes but very little hard facts based on real observational data by true sea level specialists. I allow myself a few quotations.

 

“It seems that the authors involved in this chapter were chosen not because of their deep knowledge in the subject, but rather because they should say what the climate model had predicted.

“This chapter has a low and unacceptable standard. It should be completely rewritten by a totally new group of authors chosen among the group of true sea level specialists.  My concluding proposition is: (1) Dismiss the entire group of persons responsible for this chapter, (2) Form a new group based on real sea level specialists (e.g. INQUA), and (3) Let this group work independently of climate modeler.”

 

2000: “In my previous review of December 15, I gave numerous comments and deep criticism of the handling of the Sea Level problems and facts. It is extremely frustrating to note that there is very little recognition of these comments ­ and still, they come from the President of the INQUA Commission on Sea Level Changes and Coastal Evolution, i.e. the international body that hosts all the front scientists in Quaternary sea level research and from where most of the observational records emerge. Ignoring our group is to ignore observations ­ and put all trust in modeling. This is a serious mistake that deserves nothing but discredit….”

 

“The true sea level specialists are left outside, and the chapter is instead written by persons representing quite other disciplines. This is not acceptable. Only we, the representatives of the international sea level community (with our INQUA commission in clear leading position), are true producers of field observational facts. Why do we see no single one from this community among the contributors to this chapter? The situation is absurd. Modelers output data now appear in the text as input data. This is nothing but falsification of scientific observational facts.”

 

THE COOLER HEADS COALITION

 

Alexis de Tocqueville Institution

Americans for Tax Reform

American Legislative Exchange Council

American Policy Center

Association of Concerned Taxpayers

Center for Security Policy

Citizens for a Sound Economy

Committee for a Constructive Tomorrow

Competitive Enterprise Institute

Consumer Alert

Defenders of Property Rights

Frontiers of Freedom

George C. Marshall Institute

Heartland Institute

Independent Institute

JunkScience.com

National Center for Policy Analysis

National Center for Public Policy Research

Pacific Research Institute

Seniors Coalition

60 Plus AssociationSmall Business Survival Committee