Credit for Early Implementation: Kyoto Through the Front Door

Last year, in an attempt to safeguard the Senate’s constitutional prerogatives in treaty-making, Congress barred the Environmental Protection Agency and the Council on Environmental Quality from "proposing" or "issuing" regulations to implement the non-ratified UN global warming treaty, the Kyoto Protocol. However, Kyoto partisans are clever. Finding the regulatory ‘backdoor’ partially closed, they are pushing for implementation through the legislative ‘front door.’ They seek to divide and conquer the anti-Kyoto business coalition by giving companies a financial stake in ratification.

Background. On October 10, 1998, Senators John Chafee (R-RI), Joseph Lieberman (D-CT), and Connie Mack (R-FL) introduced S. 2617, the "Credit for Voluntary Early Action Act." A better title for the bill would be the "Kyoto-Lite" or "Credit for Early Implementation" Act. Under its provisions, companies that reduce their energy emissions before 2008 would earn credits usable in any future mandatory regime. Since the credits could not be cashed in unless Kyoto (or a similar domestic program) is adopted, participating companies would acquire financial incentives to support ratification.

While advanced by proponents as a simple way to recognize on-going emission reductions, the bill is in fact front door implementation of the treaty, as it openly promotes the kinds of action Kyoto would mandate and is openly tied to ratification. In his floor statement, Senator Chafee makes the connection clear: "The credits [authorized by the Act] would be usable beginning in the first five-year budget period (2008-2012) under the Kyoto Protocol, if the Kyoto Protocol is ratified."2

There are several reasons why "early implementation" is a bad idea:

The plan would turn scores of major companies into a pro-Kyoto constituency. The program would create credits potentially worth billions of dollars, but those credits would have no actual cash value unless Kyoto (or a Kyoto-like domestic program) is adopted. Thus, participating companies would acquire motives to support ratification. Presumably, most senators do not want to artificially strengthen the Kyoto lobby. Indeed, when the Senate passed the Byrd-Hagel Resolution by 95-0 in July 1997, it overwhelmingly rejected the Kyoto Protocol in advance. Enacting Kyoto Lite would effectively repudiate Byrd-Hagel.

In practice, S. 2617 would not be voluntary. The bill authorizes the President or "any Federal department or agency" he so designates to negotiate "early action agreements" with companies. If EPA officials broach the topic of early action with a company over which they have inspection, permitting, or enforcement authority, how could the discussion not involve an element of coercion? Through behind-the-scenes intimidation, EPA could beef up the ranks of "volunteers" – and therewith the ranks of pro-Kyoto lobbyists.

The bill would advance EPA ambitions to control domestic energy supply. In April 1998, EPA’s general counsel asserted in a memorandum to agency head Carol Browner that EPA has authority under the Clean Air Act to regulate carbon dioxide as a pollutant. EPA’s argument is bogus – CO2 is plant food, not a pollutant, and the only CAA provisions dealing with carbon dioxide are non-regulatory. Nonetheless, EPA would like nothing better than power to regulate CO2, as this would give the agency effective control over domestic energy supply. S. 2167 would "amend the Clean Air Act" to expand the President’s (i.e. EPA’s) authority vis-à-vis CO2 – a dangerous precedent.

Current law already provides a voluntary program for reporting greenhouse gas emission reductions. Established by section 1605(b) of the 1992 Energy Policy Act, the program is working efficiently and as intended, according to the GAO.3 Significantly, the 1605(b) program is not linked to Kyoto, does not create cash incentives to support ratification, and is administered by the Energy Information Administration – an agency with no regulatory authority or agenda.

The bill is not an insurance policy. The strongest rationale for S. 2617 is Senator Mack’s ‘precautionary’ argument. Global warming might prove to be a real problem, and future Congresses might mandate emission controls. An early action credit program, claims Mack, would reduce both the likelihood of global warming and the costs of any future regulatory intervention. However, this rationale does not survive inspection.

Even if we accept the dubious computer model ‘experiments’ on which the global warming scare is based, a fully implemented Kyoto Protocol would cool the planet less than 0.2 degrees centigrade over the next century. "Voluntary" action would be even less consequential. Thus, Kyoto Lite offers no protection against the hypothetical risks of global warming. Neither, however, does it provide any insurance against the regulatory excesses of future Congresses. To the contrary, Kyoto Lite can only grease the skids for a bad treaty. By strengthening the Kyoto lobby, the bill would feed the very regulatory ambitions Senator Mack professes to oppose.

Conclusion. Kyoto Lite is bad policy because the Kyoto Protocol itself is bad policy. There is no scientific evidence (computer models are hypotheses, not evidence) that fossil energy emissions are likely to disrupt earth’s climate. In contrast, it is simply a fact that most businesses and economies use more energy – hence generate more energy-related emissions – as they grow. Kyoto would require the U.S. to reduce its energy emissions 30-40 percent below the levels projected for 2008-2012. Kyoto is first and foremost a radical anti-growth program. "Credit for early action" is a Trojan Horse for sneaking Kyoto inside corporate boardrooms and into U.S. domestic policy and law.

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1Marlo Lewis ([email protected]) is Vice President for Policy and Coalitions at CEI and Chairman of the Cooler Heads Coalition.2Congressional Record S-123103GAO/RCED-98-107R Reporting of Greenhouse Gas Emissions Reductions, March 24, 1998.