Implementation Of Kyoto Protocol Would Curtail U.S. Trade With Developing Countries, Spark Protectionism, CEI Policy Analysts Sa

Implementation Of Kyoto Protocol Would Curtail U.S. Trade With Developing Countries, Spark Protectionism, CEI Policy Analysts Sa

Appearances at Pre-Summit Workshops in Buenos Aires Draw Huge, Standing-Room-Only Crowds, Inc. Argentine Govt Officials
October 19, 1998

Washington, D.C., October 19, 1998 – Implementation of mandatory curbs on greenhouse gas emissions in industrialized nations – under a Protocol agreed to at Kyoto in December 1997 and heavily promoted by international activist organizations – would seriously curtail U.S. trade with developing countries, according to policy analysts with the Competitive Enterprise Institute, a Washington, D.C.-based public policy research group. Speaking before standing-room-only audiences at a series of workshops in Buenos Aires October 8-9, Marlo Lewis, CEI's Vice President for Policy and Coalitions, and James Sheehan, director of International Environmental Policy, made a strong case for sound science and economic caution in addressing the global warming issue.

"The globalization of the world economy and the interdependence of nations are more than just cliches," said Marlo Lewis. "They are powerful realities that nations ignore at their peril." Lewis pointed out that the fall of Japan's economy has pulled down the economies of its neighbors, and predicted that a Kyoto-induced "Norte Americano Flu" would have a similar negative impact on Argentina and Latin American nations. Developing countries, especially those in Latin America, can expect problems in three areas:

1. REDUCED TRADE: The United States is the largest market for goods from developing countries, importing some $800 billion worth last year, up from just $300 billion in 1984. Some $100 billion of the current total now comes from Latin America, including 10 percent of Argentina's exports, 20 percent of Brazil's, and 90 percent of Mexico's. Clearly, the continued growth and strength of the U.S. economy is critical to economic growth in Latin America. Any downturn – and some economic analysts see Kyoto leading to a 4 percent drop in U.S. GNP – would decrease U.S. demand for Latin American imports.

2. RESURGENT PROTECTIONISM: In the United States, fossil fuels account for 85 percent of all energy use and generate 65 percent of the electric power. If, under Kyoto, carbon-intensive U.S. industries lose international market share and begin shifting production facilities (and jobs) overseas, look for the U.S. Congress to respond with carbon tariffs, carbon quotas, or other trade barriers in an effort to stem this "carbon leakage."

3. SUPPRESSED DEVELOPMENT: Mandatory emissions controls cannot reduce greenhouse gas concentrations in the atmosphere unless they are stringently and universally applied. If Kyoto is ratified and implemented, says Lewis, it is only a matter of time before the European Union, the United Nations, and the global Greens bully Latin American countries into accepting curbs on their own emissions. A Trojan Horse, says Lewis, is the so-called Clean Development Mechanism, a proposed scheme in which U.S. firms give Argentina some combined-cycle gas turbines in return for emissions credits. Eventually, suppressed economic development will be the price Latin America pays for "joining the club."

The driving force behind the Global Climate Treaty and other efforts to address the global warming issue through the United Nations and similar super-agencies has been political pressure from environmental activist organizations. According to CEI's James Sheehan, author of the just-published Global Greens: Inside the International Environmental Establishment, groups such as Greenpeace, Friends of the Earth, and World Wildlife Fund routinely favor more regulation, often administered by distant, global bureaucracies, as the answer to what are often overblown environmental problems. Funded by hundreds of millions of dollars from politically activist foundations, government agencies whose programs and power they promote, and even corporations whose executives calculate that a new regulatory scheme might benefit their bottom line, these unelected and unrepresentative groups have a disproportionate impact on international policy – one that must be curtailed.

Maria Julia Alsogaray, Argentina's Secretary of Natural Resources and the Environment, touched on this point in her remarks at one workshop, "Global Warming: Science and Myths." Alsogaray observed that since the fall of the Berlin Wall, most countries have turned their backs on socialism. In the environmental sector, however, this trend remains incomplete. "This is the one area," she said, "where you still find central planning." Her agency, she said, could benefit from a more property-rights, sound-science approach to environmental policy.

The workshops, organized by the Atlas Economic Research Foundation, Fundacion Republica, Fundacion Libertad, Fundacion Alberdi, and Fundacion M.E.L., brought together experts from the United States, Argentina, Chile, and Brazil. Designed to draw attention in Latin America to the serious trade, economic, and scientific issues surrounding the Global Climate Treaty, the workshops were heavily covered by the news media. Speakers were interviewed by El Clarin, Argentina's largest and most important newspaper, as well as by the Buenos Aires Herald, Bloomberg News Service, Channel 14, Channel 3, LTV, Radio Nihuil, and numerous other radio and cable television stations.

The fourth round of international negotiations on the Global Climate Treaty will be held in Buenos Aires, November 2 through the 13. High on the agenda will be working out the details of a proposed carbon trading scheme and getting commitments from developing nations to emissions limits, to be imposed on them at some future date. Attending the UN Summit from the Competitive Enterprise Institute will be vice president Marlo Lewis and Director of International Environmental Policy James Sheehan.

CEI, a non-profit, non-partisan public policy group founded in 1984, is dedicated to the principles of free enterprise and limited government. For more information, contact Emily McGee, director of public relations, at 202-331-1010.