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Vol. II, No. 26

Cooler Heads Digest


Vol. II, No. 26


GAO Report on Voluntary Emission Crediting

A new attempt to implement the Kyoto Protocol without Senate ratification is underway. A bill introduced by Senators John Chafee, Connie Mack and Joseph Lieberman, would give early credit to U.S. industries for reductions in carbon dioxide emissions. These credits, in theory, could be applied to reductions that would be required under the Kyoto Protocol. The Government Accounting Office has determined that there would be several difficulties to overcome:

  • "how to determine what qualifies as a creditable reduction of emissions;

  • determining who owns the emissions reductions;

  • whether emission reductions should be reported at the organization, project, or another level; and

  • how claims of emission reductions should be verified."

These issues, the GAO report said, "are complicated and will require difficult choices" (BNA Daily Environment Report, December 22, 1998).

The bill, S.2617 "Credit for Voluntary Early Action Act," is rapidly gaining support from the business community as a means to lessen the pain of emissions reductions in the event of ratification. What many have seemed to miss or ignore is that such a bill would give the Environmental Protection Agency (EPA) all the tools necessary to begin implementation of the Kyoto Protocol without ratification and would repudiate the Byrd/Hagel resolution. The bill would put into place all of the necessary monitoring, measuring and enforcement tools necessary to implement Kyoto.

The EPA, for example, has various permitting schemes and enforcement efforts that give it leverage. EPA gets to negotiate credits arrangements with companies. So a company seeking permit approval under Title V of the Clean Air Act, or a company seeking to negotiate a settlement in an enforcement case, may experience EPA pressure to pursue credits as a tacit condition for permit approval.

Another problem with the bill is that there is no provision for early credits under the Kyoto Protocol. Thus, all early credits granted by the federal government would be subtracted from the U.S. target. This means that any reduction in one firm's emission reduction requirement would increase another's reduction requirements, turning the program into a huge rent-seeking boondoggle. Furthermore, the bill assumes the existence of emissions trading under the Kyoto Protocol, even though negotiations on emissions trading are at a standstill. If no emissions trading system materializes then credits for early action will be worthless.


Kyoto: Costs Exceed Benefits

It's one thing when climate treaty opponents demonstrate that implementing the Kyoto Protocol will be expensive and harmful to the economic wellbeing of the American people. It's quite another when a Yale economist who advocates collective global action to prevent global warming comes to the same conclusion. On December 18, at a seminar sponsored by Resources for the Future, William Nordhaus argued that the Kyoto Protocol is "flawed, and maybe fatally flawed."

According to Nordhaus, the protocol has two serious shortcomings. First, it does not require the developing countries to restrict their rapidly growing emissions. Second, reliance on emission trading is a bad idea. When you have a fixed supply of a good, as would be the case with emission credits, it leads to a great deal of price volatility, Nordhaus said. This could lead to hundreds of billions of dollars in losses per year. Nordhaus favors a system of harmonized taxes on emissions.

Nordhaus also argued that the Kyoto Protocol is "much too ambitious" and will be too costly to implement. According to his economic model, the Kyoto Protocol would have modest benefits but substantial costs. He also argued that the economic effects of global warming will be modest. Nordhaus did several runs of the model under different policy scenarios. The optimal scenario (a perfect treaty, with perfect agreement on the perfect policies with perfect implementation) was virtually identical, in terms of the effects on the economy, to the scenario in which we wait ten years before acting. Both scenarios would lead to significant economic benefits. Regardless Nordhaus argued that we should act now, and that procrastinating now will make it easier to procrastinate in the future. The Kyoto scenario would lead to significant economic losses (

Low Gasoline Prices Assailed

Nineteen ninety-eight has seen the lowest gasoline prices in recent memory. For the U.S. prices for regular unleaded gasoline has fallen to 97.4 cents per gallon. While most people are thrilled with this development some "wet blankets" are arguing that prices are too low. The New Republic (December 21, 1998) exclaims, "We have long said that gas prices should be higher." These low prices, it argues, provide the perfect opportunity for the government to "raise prices in a way that will benefit the public as a whole, rather than either OPEC or the Exxon Mobil Corporation." It then proposes a 17 cents-per-gallon increase in the federal excise tax on gasoline. Increasing gas prices, says TNR, "would go a long way toward solving many of the negative side-effects of cheap gas."

If the government had the cash instead of the people, it could save Social Security, raise the Earned Income Tax Credit, or provide health care for the working poor, according to TNR. This, of course, ignores the benefits of cheap gas. Spending less on gasoline allows people to spend more on other things, such as food, clothing, housing, and even retirement and health care.


No Smoking Gun Yet

Climate modelers have been laboring diligently to find the statistical smoking gun that would show once and for all that humans are responsible for global warming. So far they have been unsuccessful even though billions of tax dollars have been dedicated to the task. The search continues, however.

In a recent issue of Science (November 27, 1998) Thomas Wigley with the National Center for Atmospheric Research, and colleagues claim to have found the human finger-print in the global temperature data. They arrived at this conclusion by running two model simulations without natural or anthropogenic external forcing in order to mimic natural variation. They then added anthropogenic forcings such as carbon dioxide and aerosols and a natural forcing, solar radiation. They wanted to determine if one type of forcing or the other or both combined best explain the difference between the control-run model and the observed temperature data. They also took into account lags that may occur between the actual forcing, a change in solar radiation, for example, and the climate response.

Wigley, et al, found the "best-fit" by adjusting the climate sensitivity of the different forcing effects to minimize the "modeled and observed global-mean temperatures." They then subtracted "best-fit and specific-sensitivity results" from the observed data. The result showed that a combination of anthropogenic forcing and changes in solar radiation most closely matches the climate model control-run.

The researchers made the critical assumption "that the . . . control-run data provide a reasonable representation of the unforced behavior of the real climate system." If this is true, say the authors, "then a marked difference between the observations and the control-run results would provide evidence of external forcing effects in the observed temperature record." They do indeed find a large difference. There are three possible explanations for the differences, however: "gross errors in observations, lack of realism of model control runs, or the existence of external forcing effects in the observations."

The authors discount the first two possibilities. The quality of the data is not in doubt, they claim. However, Fred Singer an atmospheric scientist with the Science and Environmental Policy Project, argues that the data prior to 1945 is of very poor quality, especially in the Southern Hemisphere (The Electricity Daily, December 21, 1998). Second they argue that "there is no evidence to suggest that they [climate models] underestimate the magnitude of internal variability on time scales of 20 to 100 years by the large amount required to explain the . . . differences." If this is true, however, climatologists should be able to forecast the annual temperature for the next 20 to 100 years. Few climatologists would make that claim.

The Dust Bowl Cometh

The dust bowl of the 1930s was not a one-time occurrence according to researchers with the National Oceanic and Atmospheric Administration. Using tree rings, submerged tree trunks, archaeological finds, lake sediments, and sand dunes, they were able to construct a history of drought events in the Midwest. According to Connie Woodhouse, one of the researchers at the University of Colorado, "There's this 20-year periodicity of drought, we're not sure what that is due to, but it seems to be fairly regular . . . . So if that's true, we should be expecting another drought, maybe a big drought in the next two years."

The researchers also found that in the last 700 years there have been two "mega-droughts" that lasted for two to four decades each. A sixteenth century mega-drought lasted 20 to thirty years and may have stretched from the West to the East Coast. Even in the face of overwhelming evidence that such droughts occur naturally, some scientists still can't resist linking manmade global warming. According to Kevin Trenberth, head of climate analysis for the National Center for Atmospheric Research, "With global warming there is an expectation that if conditions do set up right with droughts, that the droughts could be more severe and last longer than they have in natural conditions in the past" (Knight Ridder Newspapers, December 16, 1998).

Important Ocean Data Gathered Amid Controversy

One of the most important experiments to measure ocean temperatures has been very successful regardless of attempts by the greens to thwart research. The researchers used "loudspeakers submerged off the coast of Hawaii and California to generate low-frequency booming sounds." Listening devices were used to measure sound speed that indicates the ocean temperature since sound moves faster through warmer water. The method has allowed scientists to accumulate detailed information about ocean temperature. Carl Wunsch, a professor of physical oceanography at M.I.T. claims that when merged with satellite data and other instruments the new data is "far better than anything we've ever had before." Wunsch says that "I can tell you what's going on in the Pacific Ocean, day by day, in three dimensions."

The data also suggests that computer climate models may be excessively pessimistic in their predictions regarding such things as sea level rise. The researchers compared their findings with one such model and found that reality is far more complex than modeled. Factors other than thermal expansion, such as tides and changes in salinity also affect the elevation of the ocean. Walter Munk, a professor emeritus of geophysics at the Scripps Institution of Oceanography at the University of California at San Diego and a project leader, says that "My own feeling is that the models have not been adequately tested, and it is dangerous to make major economic decisions on the basis of model predictions."

Green activist groups such as Greenpeace, the Environmental Defense Fund, and the Natural Resources Defense Council tried to stop the project, claiming that the sounds could damage marine life, even though marine biologists had determined that it was harmless. The project spent large amounts of money and time trying to quell environmental concerns, severely hampering the project's effectiveness. The project is now on hold and may not be revived, even though it could provide valuable information on the oceans and their effect on climate (The Chronicle of Higher Education, December 11, 1998).

Atlantic Storms May Suppress Global Warming

According to oceanographers, storms in the Atlantic ocean, and in particular the North Atlantic, act like a "giant pump" that keeps carbon in circulation. Hurricanes, for example, "churn up water to a depth of as much as 500 metres. . . transferring carbon dioxide from the surface to deeper levels of the ocean." This allows the surface waters to absorb more carbon dioxide. Oceanographers believe that the North Atlantic alone has absorbed as much as one-quarter of manmade carbon dioxide emissions since the beginning of the industrial revolution. The findings were presented at a conference at the University of Bremen in Germany (Deutsche Presse-Agentur, December 14, 1998).


  • The Competitive Enterprise Institute has released a monograph, titled Doomsday Déjà vu: Ozone Depletion's Lessons for Global Warming. Author Ben Lieberman argues that rather than serving as a successful model for the Kyoto Protocol, the Montreal Protocol should serve as a cautionary tale. Its mistakes would be greatly amplified if repeated under the Kyoto Protocol. The study can be obtained from CEI's website at or by contacting CEI at (202) 331-1010.

  • The transcripts from the Cooler Heads science briefings for congressional staff and media and CEI's Costs of Kyoto lectures are becoming available on CEI's website at Transcripts currently available include, Climate Change: Insights from Oceanography, by Dr. Roger Pocklington; Global Warming: Evidence from the Satellite Record, by Dr. John R. Christy and Dr. Roy Spencer; Global Warming and Vector-Borne Disease: Is Warmer Sicker? by Dr. Paul Reiter; Kyoto & Our Collective Economic Future: Economic & Energy Underpinnings, by Mark P. Mills; and most recently available, Emissions Credits: The Supply and Demand Gap, by Robert Reinstein.