Kyoto At The WTO

Kyoto At The WTO

Horner Op-Ed in The National Post
October 11, 2002

The Kyoto Protocol was not formally on the agenda at the Johannesburg World Summit on Sustainable Development. Russia -- one of only two countries now able to dictate Kyoto's fate -- nonetheless made news by declaring, again, that it will soon ratify Kyoto. This announcement, combined with European Union threats, imperil the global trading system. The Bush administration has appeared to be paying little attention. Hopefully, a recent petition to the EU Trade Commissioner by Friends of the Earth-Europe (FOE) will change that.

If Russia ratifies, Kyoto will have attained the requisite numbers to go into effect against nations that have voted to accept it. The EU has made clear its intent, either through U.S. participation in Kyoto or otherwise, to extract Kyoto-style economic pain from the United States (which, Bush administration rhetoric notwithstanding, remains a non-ratifying signatory). The EU apparently intends to claim that all U.S. goods are impermissibly subsidized by the United States' refusal to adopt Kyoto-style energy taxes. Last week, FOE fired the first shot in this inevitable conflict, demanding the EU apply penalties against energy-intensive U.S. products in retaliation for the United States not going along with Kyoto.

Such a penalty, or alternatively an EU "eco-dumping" suit, would force the pro-growth World Trade Organization to address anti-growth multilateral environmental agreements (MEAs) such as Kyoto. It is not clear whether the WTO, confronted with this conflict, would remain true to its pro-growth mission. Such a suit would also trigger a landmark battle over the freedom of states to refuse to adopt the policies of others, without incurring penalty for unfair trade practice.

Further, this would raise sharp questions about the Bush administration's curious refusal to withdraw from Kyoto -- as it did from the Rome Treaty's International Criminal Court -- which as a matter of law hobbles the United States' ability to defend itself.

Independent of the FOE effort, EU rhetoric indicates it will approach the WTO with a complaint about U.S. economic policies. Doubtless accompanied by specious claims of scientific certainty, its plea would claim that the U.S. refusal to follow the EU's greenhouse gas (Kyoto) path constitutes impermissible protectionism and/or "eco-dumping." Incredibly, the WTO has indicated a willingness to accept such an argument, also advocated by some as a path to "harmonize" the otherwise incompatible pro-trade and anti-energy pacts.

The WTO claims its "overriding purpose is to help trade flow as freely as possible" by eliminating economic barriers to increased productivity, trade and global economy. Kyoto, on the other hand, restricts energy-use emissions and penalizes parties who refuse to abide by energy-use edicts. Energy use is a solid measure of economic activity. Despite being wrapped in "green," therefore, Kyoto is in reality an economic instrument. Kyoto's advocates expressly deny the connection between quality of life, or satisfaction, and increasing gross national product. This represents the antithesis of globalization.

Reconciling the WTO and Kyoto documents, as opposed to litigating the conflict, requires involving economic and trade ministers as well as their environmental counterparts. The former individuals tend to possess an awareness and acceptance of the role that economic wealth plays in improving the human and environmental condition; in contrast, most environment ministers often buy into the "people are pollution" ideology and objectives.

Further, at that ministerial level lesser developed countries overwhelmingly prefer the WTO's pro-growth goals to the Kyoto agenda, despite the latter's wealth transfers. They know that only a prosperous West can ensure their own escape from poverty and dependence. Now, their conviction is penetrating into the chambers of even some European governments long supportive of Kyoto. Germany's economic minister has spoken out against mindless carbon dioxide suppression.

Still, last year EU Environment Commissioner Margot Wallstrom revealed the mindset of the European policymakers. "[Kyoto] is not a simple environmental issue where you can say it is an issue where the scientists are not unanimous," she said. "This is about international relations, this is about economy, about trying to create a level playing field for big businesses throughout the world." To the EU, Kyoto is about the United States' "unfair tax competition," its government consistently refusing to match the Europeans' zeal for taxing energy use to modify behaviour, particularly repressing automobile use and population.

As a result, according to Yale University economist William D. Nordhaus, the United States not ratifying Kyoto "is likely to engender trade disputes because it widens the already large disparities in energy prices between Europe and the United States."

Any treaty threatening the economic health of nations will ultimately collapse of its own potential harm, though not without first wreaking havoc. As the Bush administration seeks to reshape U.S. foreign policy, one important step would be to abandon Kyoto once and for all, with its built-in appeasement of ideological extremists seeking to impede global prosperity. To date, however, the Bush administration's abandonment has been purely rhetorical.

This is problematic because there is no doubt that both "customary law" (international common law) and Article 18 of the Vienna Convention on the Law of Treaties require a non-ratifying treaty signatory to communicate its withdrawal or be held to "not violate the treaty's purpose or objective." This is why the United States withdrew from the ICC -- Americans could have their standing challenged, for example to object to the abduction of an ICC-indicted serviceman. Similarly, this means Americans would likely be denied standing to object to EU retaliation or enforcement of Kyoto's objectives. That merely adds to the reasons why President Bush should finally and actually withdraw from Kyoto. That act would, however, merely facilitate a fair fight in the looming battle over Kyoto et al. before the WTO.