Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
The chairman of the US Senate's environment committee, Senator James Inhofe, warned the EU against pursuing its climate change agenda—stalled to date in the international negotiating process—through backdoor means such as the World Trade Organization.
<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Specifically, Inhofe (Republican, Oklahoma) took to the floor of the Senate on the opening day of the 109th Congress to address recent scientific evidence debunking alarmist claims of catastrophic man-made global warming, and warn of various attempts that may be in the works—given that even Italy has now sworn off a second round of cuts in the floundering Kyoto Protocol treaty.
Inhofe said: "As [‘COP-10’] talks in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Buenos Aires revealed, if alarmists can't get what they want at the negotiating table, they will try other means. I was told by reliable sources that some delegation members of the European Union subtly hinted that America's rejection of Kyoto could be grounds for a challenge under the WTO [World Trade Organization]. I surely hope this was just a hypothetical suggestion and not something our European friends are actively and seriously considering. Such a move, I predict, would be devastating to US-EU relations, not to mention the WTO itself."
The possible WTO challenge, long hinted at by EU policymakers past and present, would amount to one of two claims. First, by refusing to adopt Europe's steep (and soon be increase further) energy taxes, the US is impermissibly subsidizing its energy-intensive industries by failing to fully incorporate the full ‘societal cost’ of minimizing governmental interference in the availability and affordability of energy.
Alternately, the challenge would be on the grounds that the US is ‘eco-dumping’, again by its refusal to adopt the EU's energy tax schemes.
Similar logic is thought to be behind comments made the following day by the head of the Confederation of British Industry (CBI), Sir Digby Jones, that a global sense of unity of purpose displayed in the wake of the tsunami disaster in Asia should be used to address issues such as environmental protection, for which India and China should take the initiative by ratifying the Kyoto Protocol.
The CBI chief was guilty of an error, as China and India have already ratified Kyoto but, like most of the world, they are exempt (although the two have now joined with Italy in saying they will not continue with Kyoto post 2012). Jones—widely seen as being reasonably sound on resisting extra burdens on British firms—is thought to be annoyed with the freedom of Chinese and Indian firms, competing with British industry, from dealing with the associated environmental taxes that Kyoto will bring to an already heavily taxed European industrial base.
Inhofe's comments were directed at discouraging the EU from acting before the WTO on such frustration that can in fact be viewed as to some extent self-inflicted. This issue will face challenges almost immediately, beginning with a Tony Blair-led climate change conference in February and carrying through the induction of a new head of the WTO—possibly the former European trade commissioner Pascal Lamy—towards the end of the year.