Vol. II, No. 13


GAO Critiques Clinton Climate Policy

The Clinton Administration’s blueprint for implementing the Kyoto Protocol lacks quantitative goals, specific time frames, and cost benefit analyses, according to the General Accounting Office. GAO Director of Energy, Resources, and Science Victor Rezendes testified before the Senate Energy Committee on June 4 that the Administration lacked a sound analysis of stage 1 of its overall plan, a $6.3 billion tax and subsidy package. It also lacks a coordination plan for the 14 federal agencies managing the program.

Of the $6.3 billion to be spent on stage 1, $3.6 billion would come from tax incentives to stimulate spending on energy efficient transportation and housing. But, says the GAO, the Administration “has no estimate of the expected benefits [of these tax credits] and thus is not explicitly tied to the protocol’s target for emission reductions.” The GAO says that “it is uncertain how much” the $2.7 billion proposed for R&D will “help the United States meet the target specified by the protocol.”

According to the GAO, stage 1 “lacks a quantitative goal for reducing greenhouse gas emissions, does not have a specific performance plan, and contains incomplete information on expected outcomes and links to the protocol’s target.” Therefore, “stage 1 may not provide a firm foundation for stages 2 and 3.”

The GAO report confirms suspicions that the administration is less interested in the costs of reducing emissions controls than in acquiring the controls themselves.

Gore Hints at Government Shutdown

Vice President Al Gore threatened to shut down the federal government if Congress does not approve President Clinton’s environmental funding requests. “We are putting Congress on notice,” said Gore. “We will not tolerate stealth attacks that do unacceptable harm to our environment or threaten public health.”

Gore recalled that three years ago Bill Clinton vetoed bills that had environmental riders which “led to government shutdowns.” Gore is concerned about the administration’s $6.3 billion climate change program. He criticized the failure of Congress in prior years to “take early steps to confront climate change.” An unnamed White House source suggested that the veto threat was premature (Associated Press, June 16, 1998).


Kyoto’s Cost to California

A new report published by Consumer Alert and the Pacific Research Institute finds that Californians would pay dearly to comply with the Kyoto Protocol. California relies heavily on fossil fuels. Oil accounts for 43.4 percent and natural gas 25.8 percent of California’s energy use. It also relies on large amounts of electricity imported from other states, half of which is produced with coal.

Taxes on energy use or on carbon emissions could raise California’s electricity bill from $2.6 billion to $10.4 billion, an increase of 12.5 to 50 percent. A tax on motor fuels of $.50 per gallon would add at least $7.7 billion to California’s annual driving costs, a 40 percent increase; and a $1.00 tax would add $15.4 billion, an 80 percent increase. A BTU tax on natural gas, oil and coal of $.60 would add 6.1 percent to California’s energy costs and a $1.00 BTU tax would increase annual costs by 10.6 percent.

The study notes that “People in some groups are especially vulnerable to energy cost increases, such as older people living on fixed incomes.” Eleven percent of California’s population is made of people 65 or older, many of whom live on fixed incomes. “A larger share of their income would have to go for higher energy and energy tax costs.” For a copy of the study, contact Consumer Alert at (202) 467-5809.

WEFA Completes Fifty State Analysis

WEFA, Inc. has released its analysis of the cost of complying with Kyoto. U.S. citizens in the year 2010 would see job losses, lower incomes and price increases across the board. Food prices would increase 11 percent, medicine 14 percent, and housing 7 percent. Real income for a household of four would drop by $2,700 in 2010. And 2.4 million jobs would disappear. Gasoline would rise by $.65 per gallon and home heating oil would rise by 70 percent (Investor’s Business Daily, June 15, 1998).

CRA Attempts to Reconstruct Clinton Administration Cost Estimates

The Clinton administration, represented by Janet Yellen, chair of the President’s Council of Economic Advisors, has provided estimates of the costs of complying with the Kyoto Protocol in several congressional hearings. Though Yellen has not released the analysis she has laid

out her assumptions. Charles River Associates (CRA), an econometric modeling firm, has taken those assumptions and reproduced the Administration’s analysis. According to CRA:


  • Under the Administration’s assumptions of worldwide emission trading the U.S. would purchase between 82 and 88 percent of its permits from abroad. The European Union and others wish to restrict that number to 50 percent.



  • Removing the series of assumptions about cost savings from emission trading, the cost of complying with the protocol increases from $7 billion in 2010 to $53 billion and permit prices increase from $14 to $193 per ton of CO2.



  • The Administration only takes into account the costs to energy markets (direct costs). Other studies take into account the effects of higher energy costs on other markets (indirect costs) which lead to estimates two to four times greater than direct costs alone.



  • The Administration assumes “extremely rapid replacement of coal-fired power plants by new natural gas plants by 2008.” “There is some inconsistency,” according to CRA, “between a very low permit price and achievement of these assumed changes.”



  • Using more realistic assumptions CRA believes that permit costs of $170 are plausible “even if there is a restricted form of international emissions trading.” This could lead to GDP losses 10 times greater than Administration estimates, increased household energy bills of $850 per year, and a rise in gasoline prices of $.50 per gallon.



The study concludes, “Given her assumptions, Dr. Yellen’s analysis is internally consistent and compatible with mainstream economic analysis. However, her costs estimates include only direct costs . . . and very optimistic assumptions . . . about the economy’s ability to reduce emissions at low cost.” Furthermore, the study concludes that, “If these assumptions [about worldwide, unlimited emissions trading] fail to materialize, the Administration’s estimates of permit prices and GDP costs will need to be adjusted upwards by a factor of ten or more.” Download at: www.api.org/news/980603ChasRiver.pdf.

Don’t Bank Russia’s Credits Just Yet

The Clinton Administration’s economic analysis, which claims that the cost of reducing emissions 31 percent by 2008-2012 will be negligible, relies on the estimated availability of emission credits from Russia. Under the Kyoto Protocol Russia must reduce emissions to 1990 levels by the target date. As a result of its economic collapse, Russia is expected to have excess emission credits to sell in 2008. A new Russian government study, however, estimates that Russia will have between 273 million to 546 million metric tons of carbon equivalent in allowances for the years 2008-2012 which is much lower than previous estimates. Moreover, Russia may decide to bank credits to be applied to emissions reduction targets beyond 2012 that may emerge from the Kyoto Protocol, which could mean higher compliance costs in the U.S. (BNA Daily Environment Report, June 12, 1998).

Federal Oil Subsidies

Greenpeace has commissioned a study from Industrial Economics, Inc., looking at the level of federal subsidies to the oil industry. The study claims that in 1995 the federal government subsidized the oil industry to the tune of $11.9 billion per year (adding in the cost of defending the Persian Gulf oil supply raises the figure to $35.2 billion). Though it’s a bit of a stretch to classify tax credits (letting people keep their own money) as subsidies, the study does identify some true subsidies that are unwarranted.

The Strategic Petroleum Reserve, for example, which costs taxpayers between $1.6 and $5.4 billion in 1995, protects the oil industry from “disruptions in global oil markets and energy price shocks.” The study points out that private methods of avoiding the harsh effects of energy price shocks already exist. Futures markets and speculators have long filled the role of smoothing prices for all kinds of commodities. Oil companies themselves may find it useful to stockpile petroleum reserves.

Other subsidies include research and development programs, shipping subsidies, export assistance through the U.S. Export-Import Bank and the Overseas Private Investment Corporation, and liability protection. The study can be downloaded at Greenpeace’s web site: www.greenpeace.org/~climate/oil/fdsuboil.pdf.


Cooler Heads Science Briefing

The Cooler Heads Coalition sponsored a science briefing on June 19 for congressional staff and media. The event featured climatologists Dr. Roy Spencer of NASA’s Marshall Space Flight Center and Dr. John Christy of the University of Alabama, Huntsville.

Referring to the recent hand wringing over record high temperatures, Christy noted that record temperatures have to occur sometime and that the latest spike tells us very little about climate change. He argued that other selective statistics could just as easily be cited to argue against global warming. If one were to look at the last 100 years one would find that 37 states experienced their record temperatures before 1940 while only 13 experience their record temperature after 1940. Does this mean we are experiencing global cooling?

He also said that there is always a temperature spike with the dispersal of El Niño that releases an enormous amount of energy into the atmosphere. It happened in 1983 (though moderated by the eruption of El Chichon) and again in 1988. The 1988 temperatures and the comment by James Hansen of the Goddard Space Flight Center to Congress that “we can state with about 99 percent confidence that current temperatures represent a real warming trend rather than a chance fluctuation over the 30-year period” started the global warming scare.

Christy and Spencer are best known for their work with the satellite temperature record, which is a record of tropospheric temperatures. They discussed the importance of that data. The satellite data, according to Spencer, should be the most robust data if global warming occurs. The global warming signal should be 30 percent higher in the satellite data than in the surface temperature data. Yet the satellites record a slight cooling trend over the last 20 years.

Dr. Christy addressed recent challenges to the satellite data. One paper claimed to show that the satellite data actually show warming. The author, however, used only 9 percent on the satellite data – the data with the least coverage and the greatest error. Each attack of the satellite data has disregarded the fact that this record is independently validated by a 98 percent correspondence with the radiosonde balloon data. These same scientists seem to put a lot of credence in surface temperature data that only cover 10 percent of the globe, nearly all of which is in the Northern Hemisphere.

Another Modeling Error

One of the key assumptions in the general circulation models (which are the basis for the IPCC’s global warming predictions) relates to the sensitivity of climate to changes in the amount of energy reaching the earth. The models currently assume that every Watt per meter squared (W/m2) of energy added to the earth will cause the temperature to rise by .55°C. A doubling of atmospheric carbon dioxide, according to the model assumptions, will add 4.5 Watts per meter squared (W/m2) of energy to the earth causing the temperature to rise by 2.5°C. This is the basis for model projections.

A review article appearing in Climate Research (April 9, 1998) claims that this number is too high. Dr. Sherwood Idso, of the U.S. Water Conservation Laboratory, discusses some of the research he has conducted which downgrades considerably the amount of warming that may occur from an increase of anthropogenic CO2 emissions.

Idso first looked at changes in atmospheric water vapor that occurs in Phoenix, Arizona each year with the advent of the summer monsoon. By plotting daily minimum and maximum temperatures for the last 30 years as functions of atmospheric water content he was able to calculate a climate sensitivity factor of 0.17°C per W/m2, considerably less than the model assumption. He then obtained data for the annual range of solar radiation reception and compared that with the annual temperature range at 81 locations within the United States. He found a climate sensitivity of 0.17°C per W/m2 for the non-coastal stations and 0.087°C per W/m2 for coastal stations (coastal temperatures are moderated by the ocean).

By combining the two results and accounting for the relative global percentages of land and water, Idso was able to estimate a global sensitivity factor of 0.113°C per W/m2. Thus a doubling of atmospheric CO2 would increase temperatures by no more than 0.45°C. Idso then looked at different global data sets on various factors such as cloud cover, radiation, and temperatures over water and land and consistently found a sensitivity factor of about 0.10°C per W/m2 that would lead to a temperature change of 0.4°C.

Since about 1900, however, there has been a 0.6°C rise in temperature corresponding with a rise of only 2.45 W/m2 due to human greenhouse activity. Idso believes that other factors, such as energy output from the sun, random climatic fluctuation, or recovery from the Little Ice Age, can account for the additional warming.

The History of El Niño

Vice President Al Gore recently held a press conference in which he implied a connection between manmade global warming and more frequent and more intense El Niño events. The history of El Niño, however, shows no such correlation. An article in Nature (May 28, 1998) reviews El Niño’s past and finds that several El Niño events “that occurred before 1880 had effects at least as intense and wide-ranging as those associated with the current event.” This is true for the events that occurred in 1396, 1685-88, 1789-93 and 1877-79, all of which occurred before the buildup of manmade greenhouse gases and when temperatures were much cooler than they are now.

One of the most severe El Niño events occurred in 1789-93 and caused severe droughts in Southern India, Australia, Mexico, the Atlantic islands and southern Africa. In the Madras Presidency of India the droughts led to 600,000 deaths, about half the population. The droughts were periodically interrupted by “highly destructive rainfall.” One three-day period at Madras experienced 25.5 inches of rain. As with so many of the catastrophic scenarios trotted out by global warming gloomies, the purported link between El Niño and global warming cannot withstand historical scrutiny.

La Niña is On the Way

The strong but shorter than average (8 months compared to 2 years) El Niño event that we have experienced is quickly giving way to its opposite, La Niña. Whereas El Niño is characterized by an accumulation of hot water in the Pacific Ocean near Peru, La Niña is characterized by colder than average sea surface temperatures in the same area. Sea surface temperatures have dropped by 15 degrees Fahrenheit from early May to early June.

The result could be a reversal of the weather patterns experienced last year. The northwestern United States could experience an abnormally cold and wet winter, while the South, which was cold and wet last winter, will be hotter and drier. And although the Peruvian fishing industry will profit from the turnaround, the eastern coast of the United States can expect a resurgence in hurricane activity which was nonexistent last year (The Washington Post, June 19, 1998).

Don’t Expect Extreme Climate Swings

Scientists have found that violent temperature swings are uncommon during warm interglacial periods. Evidence from sea bed sediments going back 500,000 years show that temperatures only swing over a range of about one degree Celsius during interglacials like the one we are currently experiencing. In contrast, the latest Ice Age experienced violent temperature changes over a range of 10 degrees C from cold to warm and back again in relatively short periods of time (The Guardian [London], June 11, 1998).



  • In a speech at a Democratic National Committee fundraiser President Bill Clinton explained the continuing conflict between U.S. and Canadian commercial fisherman. He said, “I can tell you, one of my big problems with our best partner in the world, Canada, is that our salmon fisherman are fighting all the time . . . You know why? Because all the salmon are moving north, so there are more in Alaska and fewer in Canada, because of climate change.” Apparently the White House got this idea from a paper written by David Welch of the Pacific Biological Station. But Welch claims the paper said no such thing. “It’s not global warming that’s causing these fish to be intercepted. It’s fisherman who catch a whole bunch of Canadian fish at the same time they catch U.S. fish” (Anchorage Daily News, June 19, 1998).



  • President Bill Clinton has nominated UN Ambassador Bill Richardson as Secretary of Energy, where he will oversee the federal government’s alternative energy subsidy programs. Clinton said that a top Richardson priority will be global warming. “I believe that this challenge will require the greatest energy from our labs, from our scientists and technology, from an Energy Department that can work clearly with the private sector on what plainly will be one of America’s most important priorities for years and years to come,” Clinton said (Reuters, June 18, 1998).




The Fourth Session of the Conference of the Parties to the Convention (COP-4) is being held in Buenos Aires from November 2-13, 1998. Organizations interested in applying for accreditation to the conference as an NGO should write a letter stating their interest to:

Horacio Peluffo

External Relations Officer

Conference and Information Support

United Nations – Climate Change Secretariat

Haus Carstanjen, Martin-Luther-King-Strasse, 8

D-53175 Bonn, Germany

Tel: (49-228) 815-1506

E-mail: [email protected]

FCCC Tel.: (49-228) 815-1000

Fax: (49-228) 815-1999

E-mail: [email protected]

Web address: http://www.unfccc.de

The Competitive Enterprise Institute has produced a book and a highlights video based on The Costs of Kyoto conference held in July 1997. Both the book and the video are available for $15 or buy both for $25. To order call CEI at (202) 331-1010, or e-mail to [email protected].