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Vol. VI, No. 8

Cooler Heads Digest


Vol. VI, No. 8



Cool Winds Blowing In Canada 

Canadian ratification of the Kyoto Protocol continues to recede into the future, as provincial opposition led by Alberta increases.  The Chretien government had pledged to ratify before the World Summit on Sustainable Development in Johannesburg in late August, but it appears unlikely that it will meet that target.  Prime Minister Jean Chretien said in Parliament this week that, “I think it’s important for Canada to position itself so as to sign Kyoto one day” (The Globe and Mail, April 16, 2002).


Environment Minister David Anderson admitted in an interview for the first time that meeting its Kyoto target to reduce greenhouse gas emissions by to 6 percent below 1990 levels could cost about $10 billion (US$6.35 billion) per year.  But, said Anderson, that is a worthwhile cost in a $1.1 trillion (US$ 700 billion) economy.  He also pointed out that Canada spends $12.5 billion (US$ 7.94 billion) per year on national defense (The Globe and Mail, April 5, 2002).


In a last-ditch effort to make a deal that would assuage internal opposition, Anderson tried to secure concessions from the European Union at the recent meeting of the G-8 environmental ministers that would allow Canada to receive emissions credits for exporting natural gas and oil to the U.S., arguing that by selling these “cleaner” fuels to the U.S. Canada is actually contributing to greenhouse gas reductions.


The European Union rejected the proposal out of hand.  Margo Wallstrom, the EU’s environment commissioner, responded that, “To count credits from trading with the United States, (which) has chosen to stand outside the protocol, would undermine the fundamentals and principles of Kyoto” (The Toronto Star, April 13, 2002).


Unlike Japan and Russia, Canada’s ratification is not essential to meet the legal threshold to bring the protocol into force.  Thus, while Japan and Russia have succeeded in extracting huge concessions from the EU, Canada is negotiating from a position of weakness.


“Canada does not want to sign up to Kyoto but it also wants to avoid the image prob

lems which that would cause,” said one senior EU delegate at the G-8 meeting (Reuters, April 15, 2002).


Under Canada’s federal system its national government has authority to ratify treaties.  However, implementing domestic measures to satisfy international commitments, such as the Kyoto Protocol, requires provincial co-operation.  Alberta Prime Minister Ralph Klein now appears determined that his province’s vast oil, gas and oil sands reserves will not be locked up or devalued by the Kyoto Protocol.



EPA: Clear Skies Initiative Would Increase Coal Use 

An analysis by the Environmental Protection Agency claims that under President Bush’s Clear Skies Initiative the amount of coal burned for electric power will increase by 7.3 percent over 2000 levels by 2020, or by about 79 million tons per year.


“Fuel diversity is maintained under the Clear Skies Initiative,” according to the EPA document.  “Without legislation, generation from coal would likely be a smaller portion of the total fuel mix in 2020.” 


Even with Clear Skies, however, the proportion of coal use in the production of electricity will fall from over 50 percent to under 45 percent.  Moreover, “Enactment of Clear Skies will result in a slight increase in the number of coal mining jobs projected in 2020 relative to not enacting Clear Skies,” said the document.


Frank O’Donnell, executive director of the Clean Air Trust, claims that the real motive behind the administration’s Clear Skies Initiative is “to protect the coal industry.”  Environmental activists are also concerned that the initiative would wipe away many existing Clean Air Act provisions and actually lower the emissions reduction required under law.  They favor the Jeffords bill that has tougher emissions cuts under shorter timetables and would force more switching from coal to natural gas.


The National Mining Association disagrees with the EPA’s assessment, however.  According to their own analysis, based on Department of Energy numbers, coal use will increase by 300 million tons by 2020 under the existing Clean Air Act.  Clear Skies, on the other hand, would lead to much smaller increases in coal use (BNA Daily Environment Report, April 17, 2002).





EU Wants An Air Tax 

A European Union plan to reduce the amount of greenhouse gas emissions from commercial flights would force air passengers to pay up to $72 per ticket.  As noted by London’s Times (April 4, 2002), “The charge could be imposed on all airlines within two years, adding £50 [$72] to the cost of flying from London to California, £35 [$50] to flights to New York and between £5 and £10 [$7 and $14] to flights within Europe.”


Previous attempts to tax airlines were frustrated because airlines simply threatened to change their routes to “fill up” in countries where there is no tax.  But the new plan would be implemented throughout the EU to encourage airlines to purchase more fuel efficient airplanes and to discourage people from flying.


Tim Johnson, of the Aviation Environment Federation coalition of environmental groups, said the levy would simply discourage nonessential flights.  “Offering flights to Dublin for £8 [$11.50] return is creating demand that wouldn’t be there if the price was more realistic.”


But Greener by Design, a lobby group that opposes the tax, said, “This is nothing other than a holiday tax on poor people and those who pay fares out of pocket would suffer the most.”



British Emission Scheme Flawed 

Serious questions are being raised about the validity of greenhouse gas reductions under Great Britain’s new emissions trading scheme. The program got underway with an auction in which the government offered a price for each ton of carbon dioxide equivalent (CO2e) reduced. Participating companies then bid by offering greenhouse gas reductions at the offered price.


According to a report by UK-based Environmental Data Services, however, “There are strong grounds for suspecting that at least half - and possibly much more - of the claimed emission reductions are either not real, or would have been delivered anyway.” What this means is that some of the companies involved in the program may be the beneficiaries of huge financial windfalls without doing a thing.


Under the program, a company’s baseline from which it must reduce emissions to get credits is calculated from its average yearly emissions from 1998, 1999, and 2000. The program also attempts to eliminate credit for “hot air” reductions by only taking into account actual emissions that exceeded existing regulatory caps.


But according to the report, “DEFRA’s [Department of Environment, Food and Rural Affairs] rules are poorly thought through - and, when combined with the shortcomings in the Environment Agency’s regulatory controls, have failed to prevent a huge injection of ‘hot air’ into the scheme.”


An egregious reported example is that of Ineos Fluor, a company that makes refrigerants that are also greenhouse gases. The global warming potential of HFC-23, for instance, is 11,700 times that of CO2. In 1999, Ineos installed a £6 million incinerator to reduce its HFC-23 emissions, which fell from 864 tons in 1998 to 304 tons in 1999 and 45 tons in 2000.


HFC-23 emissions were already regulated, but only as part of an overall rule that limited the collective release of all volatile organic compounds. This was the figure applied by DEFRA when it calculated Ineos’s baseline.


According to the report, “The baseline would be 148 tons of HFC-23. But if emissions continue at the 2000 level of 45 tons, Ineos is already more than 100 tons - or 1.2mtCO2e [metric tons of carbon dioxide equivalent] - below its baseline.


On this basis, the company could easily meet its final emission reduction target of 0.8mtCO2e - and have a massive surplus of credits to sell in the scheme’s early years when its targets are less tight.” Ineos’s incentive payment was worth £43 million, a pretty good return on its £6 million investment.


Other participants that appear also to be in line for such windfalls under differing circumstances are the chemical companies Dupont and Rhodia, oil companies Shell and BP (Beyond Petroleum), and British Airways.


Multi-Pollutant Bills Are "Cutting Edge" of Kyoto Agenda


A new study published by the American Legislative Exchange Council takes a look at the various multi-pollutant bills being considered by the U.S. Congress and finds that they are wasteful and largely devoid of benefits.


The study notes that, “Senator James Jeffords’s (I-VT) “Clean Power Act” (S. 556) and Representative Henry Waxman’s (D-CA) “Clean Smokestack Act” (H.R. 1256) are the Kyoto agenda’s cutting edge in the 107th Congress.  These bills would require substantial reductions in power plant emissions of nitrogen oxides (NOx), sulfur dioxide (SO2), mercury, and carbon dioxide (CO2), the principle ‘greenhouse’ gas targeted by the Kyoto Protocol.


The author, Dr. Marlo Lewis, Jr., a former staff director for Representative David McIntosh’s House Government Reform Subcommittee on Regulatory Affairs and currently a senior fellow at the Competitive Enterprise Institute, presents several reasons why pursuit of these policies would be folly:


·      The Jeffords-Waxman bills are based on the false premise that reducing fossil fuel use is a prerequisite to reducing air pollution.  History shows dramatic air quality improvements paralleling large increases in energy consumption, population and GDP.


·      The bills include CO2 reductions as a component of air quality management even though the presence of carbon dioxide in the atmosphere has no effect on air quality.


·      Including CO2 in an air quality management bill is “horrendously wasteful.”  As noted by the Energy Information Administration, “Reducing NOx and SO2 emissions 75 percent below 1997 levels by 2005 would cost $6 billion.  Reducing CO2 emissions 7 percent below 1990 levels by 2005 would cost $77 billion.”  Integrating the two reduction strategies would also cost $77 billion, which would get the same “air quality” results that could be obtained for $6 billion.


·      These bills would be completely useless in averting global warming.  If fully implemented, the Kyoto Protocol would prevent a mere 0.07 degrees Celsius of global warming by 2050 - too little to detect.  A domestic program would do even less.


To obtain a copy of the study, contact Bob Adams at (202) 466-3800.





Changes In European Growing Season Due To Natural Factors 

A study in the February 2002 issue of the Journal of Climate looks for possible explanations for the advent of earlier growing seasons in Europe other than global warming, noting that there is “a strong variability in the timing of seasons in Europe, which is perceived as a signal of a global climate change.” According to the researchers, led by Paulo D’Odorico with the Department of Environmental Sciences at the University of Virginia, “The study of the interannual variability of timing and length of the growing season is gaining importance because plant phenology [biological response to climatic conditions] is a sensitive indicator of climate change and has broad impacts on terrestrial ecosystems through changes in productivity and in the annual carbon and water cycles.”


The study looks at the relationship between the North Atlantic Oscillation (NAO), “a large-scale displacement of air mass between the subarctic and the subtropical regions of the North Atlantic,” and the early onset of the spring season.  What they found is that “spring phenology in Europe is found to be significantly affected by the North Atlantic Oscillation.”  In fact, the researchers characterize the dependence of the early spring on the phases of the NAO as “remarkable.”



Amazon In Carbon Balance 

A new study in Nature (April 11, 2002) has found that the rivers and wetlands of the Amazon rainforest may emit as much carbon dioxide as the dry regions of the forest absorb.  This suggests that the Amazon may be in carbon equilibrium.


The researchers, led by Jeffrey E. Richey with the School of Oceanography at the University of Washington, conclude that, “Estimates that the tropics are a net carbon sink are not consistent with recent calculations from global inverse modeling, which imply that the tropics are at least in balance with the atmosphere if not a net source.”


In other words, the Amazon may not be a net carbon sink.  If true, scientists will have to search for other carbon sinks to account for large amounts of carbon dioxide emissions, both natural and anthropogenic, that do not end up in the atmosphere and are not accounted for by known carbon sinks.  These findings, however, will help scientists get a better handle on man’s contribution to climate change, if any.





The National Post (April 13, 2002) has reported that, “The world's most powerful environment ministers will ride in buses powered by natural gas and greenhouse gas credits have been exchanged to negate their environmental impact on Banff, a World Heritage Site, during meetings here this weekend.”


As a result of air and car travel and hotel accommodations the ministers attending the G8 environmental summit meeting last weekend would be responsible for tons of carbon dioxide emissions.


“However, under the scrutiny of environmental organizations gathered here,” reported the National Post, “the ministers have attempted to avoid embarrassment by purchasing carbon-dioxide credits from a solar-powered housing project in South Africa that will make the gathering ‘an emission-neutral meeting,’ said David Anderson, Canada's Minister of the Environment.”  The ministers also dined on organically grown food.




Alexis de Tocqueville Institution

Americans for Tax Reform

American Legislative Exchange Council

American Policy Center

Association of Concerned Taxpayers

Center for Security Policy

Citizens for a Sound Economy

Committee for a Constructive Tomorrow

Competitive Enterprise Institute

Consumer Alert

Defenders of Property Rights

Frontiers of Freedom

George C. Marshall Institute

Heartland Institute

Independent Institute

National Center for Policy Analysis

National Center for Public Policy Research

Pacific Research Institute

Seniors Coalition

60 Plus AssociationSmall Business Survival Committee