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Vol. VII, No. 6

Cooler Heads Digest

Title

Vol. VII, No. 6

Politics

 

Japan Rethinking Kyoto

 

Japan’s industrial sector is beginning to grouse about its obligations under the Kyoto Protocol, which the government ratified last year.  According to Taishi Sugiyama, a senior researcher at Japan’s independent Central Research Institute of the Electric Power Industry, industry is putting considerable pressure on the government to rethink the Kyoto Protocol.  Apparently, the government is listening.

 

Japan was one of the last countries to ratify Kyoto, partly due to strong opposition by industry groups and the Japanese Conservative Party, which favored voluntary reductions.  But the government also felt obligated to ratify a treaty named for its ancient capitol.  Now, nearly a year later, industry has become increasingly resentful of the Kyoto Protocol, said Sugiyama, who spoke to the World Resources Institute in Washington, D.C. last week.

 

Now the government is looking ahead to the 2005 negotiations when Kyoto signatories will discuss actions to be taken beyond 2013.  Experts, such as Sugiyama, expect that the government will push for voluntary emissions reductions targets.  Others disagree, however, saying that it would be very difficult for Japan to back away from the treaty.

 

Part of the resentment of the treaty comes from the assumptions the government used to determine  its  ability  to  meet  the  targets.    For example, it assumed that cuts in industrial emissions would be accomplished in large part through carbon leakage.  In other words, heavy industry would close plants in Japan and open new plants on the Asian mainland, which the affected industries may have been surprised to learn.  There was also widespread doubt that Japan would be able to meet its Kyoto targets, a sentiment the government apparently ignored.

 

Industry leaders also feel that the treaty is unfair.  They argue that Japan is the only country that has enacted truly aggressive implementation policies, while the Kyoto Protocol allows European Union countries to buy emissions credits from less industrialized Eastern European countries, thereby avoiding the need for significant emissions reductions.  Moreover, the EU has replaced much of its coal-fired capacity with natural gas since 1990, which serves as the baseline year for Kyoto reductions, thereby making the EU’s target much less onerous.

 

Finally, industry argues that Japan made significant emissions reductions prior to 1990, when the government embarked on a tremendously costly twenty-year program to cope with the Arab oil embargo, making the 1990 baseline unfair to Japan.  “We have already done much,” said Sugiyama.  “Still, Kyoto requires [Japan] to reduce emissions 6 percent.  Given that situation, it’s going to be extremely difficult to reduce emissions further.”

 

Last October the government organized a committee to revisit the Kyoto agreement.  The committee, made up of 30 stakeholders, half of which are industry representatives, will present its findings to the government this month.  It is likely, said Sugiyama, that it will call for a new protocol or an amended agreement with a combination of voluntary and mandatory targets (Greenwire, March 6, 2003).

 

Economics

 

Carbon Trading Schemes Depend on the Force of Law

 

There are several hurdles that must be overcome before a worldwide carbon emission trading system can become viable, according to experts who spoke last week at the World Resources Institute’s Sustainable Enterprise Summit in Washington, D.C.

 

Ongoing attempts to create voluntary greenhouse gas emission trading markets are being undermined by a lack of consistency that would come from well-developed rules.  There are two primary types of emissions trade occurring so far: awarding of credits for baseline reduction projects and trading under a cap-and-trade scheme.

 

The baseline-and-credit system awards credits to companies that reduce emissions through the Kyoto Protocol’s Clean Development Mechanism and Joint Implementation provisions.  These allow companies to offset emissions through investment in non-emitting technologies.  Companies are awarded credits based on the amount of emissions reduced below business-as-usual levels. 

 

The cap-and-trade system, on the other hand, allows companies to trade emissions credits that are allotted based on a predetermined emission cap.  Companies that exceed their targets can sell credits to companies that may not be able to meet theirs.

 

Although there has been some increase in trading, the market will not be truly viable without market-wide trading rules, consistent pricing, and standardized verification methods, according to the summit participants.  “The success of the market really hinges on the ability to develop rules of the game,” said Janet Ranganathan, a senior associate with WRI’s Sustainable Enterprise Program.  Veronique Bishop, principal finance specialist with the World Bank’s Carbon Fund, agrees on the need for consistent pricing, but believes that, “We are light years away from that.”

 

What these experts are calling for is a worldwide regulatory regime to bring about the viability of emissions trading.  In the absence of a real asset, there can be no “voluntary” markets with both buyers as well as sellers.  Emissions trading markets only work when artificial scarcity is created through regulatory fiat and all emitters are required to participate.  Otherwise you have a lot of sellers, but few if any buyers.

 

Indeed, Ranganathan fingers the U.S.’s rejection of the Kyoto Protocol for the weak trading market.  “The U.S. would have been the major buyer in the Kyoto Protocol had it ratified [the treaty],” she said.  “The fact that it has withdrawn now casts doubt over carbon prices, and low carbon prices can create dysfunctions in the market, ultimately undermining the potential environmental gains.”

 

Robert Routliffe, manager of greenhouse gas emissions trading at DuPont, said that low participation is a “characteristic of any voluntary market.  It’s hard to get folks to spend money.”  Developing carbon trading schemes is a “big, capital-intensive” process, which presents a major obstacle for most companies.  Nor would the cost be lessened by mandatory controls (Greenwire, March 17, 2003).

 

Science

 

Troubling Lack of Science Behind Global Warming Claims

 

One February 27, Christopher Essex, a professor in the Department of  Applied Mathematics at the University of Western Ontario, and Ross McKitrick, an associate professor in the Department of Economics at the University of Guelph, gave a Cooler Heads Coalition congressional staff and media briefing on their new book, Taken By Storm: The Troubled Science, Policy and Politics of Global Warming.

 

Essex, who studies the underlying mathematics, physics and computation of complex dynamical processes, raised some very fundamental scientific issues with regard to the science of global warming.  Take, for instance, the “average global temperature,” which is a mainstay of the debate.  Such a thing doesn’t exist, according to Essex.  You can’t add up temperature and take its average like you can with physical quantities such as energy, length, and so on.

 

“Thermodynamic variables are categorized as extensive or intensive,” said Essex.  “Extensive variables occur in amounts….  Intensive variables [such as temperature] refer to conditions of a system, defined continuously throughout its extent.”  For example, one could add the temperature of a cup of ice water to the temperature of a cup of hot coffee, but what does that number mean?  It doesn’t mean anything because there is no such thing as total temperature.  Dividing that number by two to get the average doesn’t mean anything either.  Yet that is exactly what occurs when the average global temperature is computed. 

 

Essex also pointed out that the internal energy of a system can change without changing the temperature and the temperature can change while the internal energy of the system remains the same.  “This disconnect happens routinely in the natural world around us all the time,” said Essex.  “Ultimately this has to be so because temperature and energy belong to two fundamentally different classes of thermodynamic variables.” 

 

Global warming enthusiasts want us to believe that average temperature can tell us something about what is going on in the climate, but it is just a number with no physical content.  To add insult to injury, Essex explained that there are literally an infinite number of averaging rules that could be used, some of which will show “warming” and others that will show “cooling,” but the “physics doesn’t say which one to use.”

 

Essex also explained that the earth’s so-called greenhouse effect does not work like a greenhouse.  “Incoming solar radiation adds energy to the Earth’s surface,” he said.  To restore radiative balance the energy must be transported back to space in roughly the same amounts that it arrived in.  The energy is transported via two processes - infrared radiation (heat transfer) and fluid dynamics (turbulence). 

 

A real greenhouse works by preventing fluid motions, such as the wind, by enclosing an area with plastic or glass.  To restore balance, infrared radiation must increase, thereby causing the temperature to rise.  Predicting the resulting temperature increase is a relatively straightforward process. 

 

But the “greenhouse effect” works differently.  Greenhouse gases slow down outgoing infrared radiation, which causes the fluid dynamics to adjust.  But it cannot be predicted what will happen because the equations which govern fluid dynamics cannot be solved!  Scientists cannot even predict the flow of water through a pipe, let alone the vastly more complex fluid dynamics of the climate system.  “No one can compute from first principles what the climate will do,” said Essex.  “It may warm, or cool, or nothing at all!”  Saying that the greenhouse effect works the same way as a greenhouse, which is a solvable problem, creates certainty where none exists, said Essex.

 

Surely scientists are aware of the issues that Essex brings up (and several other equally devastating points that aren’t discussed here).  If so, then how have we come to a place where the media and politicians repeatedly state that there is a scientific consensus that the planet is warming up, it is caused by man, and the effects will be catastrophic?  McKitrick offered a very convincing explanation.   He discussed several relevant groups, but we’ll focus on politicians and what McKitrick calls “Official Science.”

 

Politicians need big issues around which they can form winning coalitions.  Global warming is a good issue because, “It is so complex and baffling the public still has little clue what it’s really about.  It’s global, so … you get to have your meetings in exotic locations.  Policy initiatives could sound like heroic measures to save the planet…, but on the other hand the solutions are potentially very costly.  So you need a high degree of scientific support if you are going to move on it.  There’s a premium on certainty.”

 

This is where Official Science comes in.  Official Science is made up of staffs of scientific bureaucracies, editors of prominent magazines, directors of international panels, and so on.  These members of Official Science aren’t appointed by scientists to speak on their behalf, but are appointed by governments.  They have the impossible job of striking “a compromise between the need for certainty in policymaking and the aversion to claims of certainty in regular science.”  What happens is that science ends up serving a political agenda rather than a scientific one.  “If things were as they should be, leaders would want a treaty because they observe that scientists are in agreement.  What happens instead is that Official Science ‘orchestrates’ agreement because leaders want to make a treaty.”  The presentation will soon be available at www.cei.org.  Taken By Storm may be ordered at www.amazon.ca.

 

Etc.

 

·    On March 13, Hans Blix, the U.N. weapons inspector in Iraq was interviewed on MTV about his thoughts regarding war with Iraq and weapons of mass destruction.  During the interview he stated that, “On big issues like war in Iraq, but in many other issues, they simply must be multilateral.  There’s no other way around.  You have the instances like the global warming convention, the Kyoto protocol, when the U.S. went its own way.  I regret it.  To me the question of the environment is more ominous than that of peace and war.  We will have regional conflicts and use of force, but world conflicts I do not believe will happen any longer.  But the environment, that is a creeping danger. I’m more worried about global warming than I am of any major military conflict.”  Presumably, the risks of war, weapons of mass destruction, and terrorist acts such as 9/11, pale in comparison to the threat of global warming.

 

Announcement

 

·    The George C. Marshall Institute is hosting a “Washington Roundtable on Science & Public Policy,” featuring astrophysicists Sallie Baliunas and Willie Soon, with the Harvard-Smithsonian Center for Astrophysics, who will speak about Extreme Weather Events: Examining Causes & Responses.  The event will take place at noon on March 25 in Room 1334 of the Longworth House Office Building.  Lunch will be provided.  To RSVP, call (202) 296-9655 or email info@marshall.org.

 

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 Association

Small Business Survival Committee