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Vol. VII, No. 24

Cooler Heads Digest


Vol. VII, No. 24


Energy Department’s Proposal Omits Transferable Credits

On November 26, the Department of Energy unveiled its long-awaited proposals to “enhance” the Voluntary Reporting of Greenhouse Gases Program, established under Section 1605 (b) of the 1992 Energy Policy Act.  In a major surprise, the proposed enhancements do not include awarding transferable credits for voluntary reductions in greenhouse gas emissions.

President George W. Bush directed the Energy Department in his February 14, 2002 speech on climate policy to make the voluntary registry more “accurate, reliable, and verifiable.”  All signs suggested that DOE intended to include transferable credits in its package.  DOE does propose that company executives be required to attest to the accuracy of claimed emissions reductions.  Also, reductions cannot be claimed when caused by production declines.

“The lack of any crediting scheme in DOE’s proposal is a major victory for friends of affordable energy,” said Marlo Lewis, senior fellow at the Competitive Enterprise Institute.  Lewis assembled a coalition of non-profit groups, including many members of the Cooler Heads Coalition, in opposition to any crediting program.

Lewis and his coalition questioned whether DOE had legal authority to award credits for emissions reductions and argued that early-action credits would “create the institutional framework and lobbying incentives for Kyoto-style cap-and-trade policies.”

The proposals are available online.  There is a sixty-day public comment period and a “stakeholder workshop in January.  Comments may be sent to 1605bgeneralguidelines@hq.doe. gov.

Is COP-9 the Beginning of the End for Kyoto?

The ninth Conference of the Parties (COP-9) to the United Nations Framework Convention on Climate Change opened in Milan, Italy on December 1 amid increasing doubts that the Kyoto Protocol will ever go into force. 

While the usual array of hundreds of meetings, events, and sideshows will be offered, the private talks between government ministers and UNFCCC officials are likely to be largely about how to keep the process (of moving the world toward an energy-rationing regime) going without the protocol.

Both the United States and Russia threw cold water on the hopes of Kyoto’s supporters as COP-9 began.  From Moscow, Reuters reported on December 2 that President Vladimir Putin’s top economic adviser, Andrei Illarionov, said, “Of course, in its current form, this protocol cannot be ratified.  It's impossible to undertake responsibilities that place serious limits on the country's growth.”

In a Financial Times op-ed (Dec. 1), U. S. Under Secretary of State for Global Affairs, Paula Dobriansky, wrote, “(Kyoto is) an unrealistic and ever-tightening regulatory straitjacket, curtailing energy consumption.”

On the other hand, sources have told Cooler Heads that the European Union and Japan are putting strong pressure on Russian President Vladimir Putin to ratify the protocol and thereby bring it into force.

Several leading alarmist officials and NGOs have already made suggestions about what to do when and if Kyoto collapses (see the third story in Economics section for one example).  The ideas put forward so far cover a wide range, which suggests that it might take some time agree on future steps.  COP-9 continues until December 12, with government ministers scheduled to arrive on December 10.

U.S. Official Rejects Any New Kyoto-Style Treaty

Dr. Harlan Watson, senior climate negotiator at the State Department, told journalists in Paris on November 14 that the United States would not back any new proposal to curb greenhouse gas emissions if it resembled the Kyoto Protocol.

“It’s going to be very difficult for the United States to get back to a Kyoto-type (agreement) because it has a rigid target and timetable agreement (for emissions cuts),” Watson was reported as saying by Agence France Presse.  He continued, “For the foreseeable future, anyway, the United States would not be particularly pleased with the Kyoto framework.  We think that there are basic difficulties, [and] there are also some operational difficulties.”

The United States is on course to exceed 1990 emissions levels by 30 percent by 2012.  Under the Kyoto agreement, it would have had to reduce emissions to 7 percent below 1990 levels.

Russian Emissions Rising Rapidly

According to an article in Canada’s National Post (Nov. 13), Russian carbon dioxide emissions may be much higher than anticipated.

Part of the reason given by Russian officials for putting off ratification of the Kyoto Protocol was the projection that meeting President Putin’s target of doubling GDP by 2010 would entail exceeding the country’s Kyoto targets by that date.  According to the Post, Russian emissions may be greater even than those projections.

The paper quotes Alexander Nakhutin of the Institute of Global Climate and Ecology as finding that, since 1999, Russian greenhouse gas emissions have “ballooned by as much as 13 percent annually.” 

It goes on, “If Nakhutin's projections are correct-and he is one of only a very few researchers with access to the best Russian industrial data-by the time the Kyoto treaty is due to be implemented in 2008, Russian carbon emissions will be 6 percent greater than they were in 1990, or 30 percent higher than originally envisioned.”

Kyoto’s plans for Russia require Russian emissions in 2008 to be 20 percent below 1990 levels.  The entire edifice of carbon trading is based on this assumption.  “Can it work without Russia? That's the key question,” Stephane Willems, a Russian greenhouse gas inventory specialist with the International Energy Agency in Paris, told the Post.

The article also quoted Richard Baron, a carbon-trading specialist with the OECD in Paris, who said that, “If Russia's emissions are not well below 1990 levels in 2008, the all-important carbon market will at the very least suffer ‘a radical change in expectations.’”

The story also reveals how Nakhutin’s work may have contributed to Russia’s seeming about-face on the Kyoto issue:  “According to Nakhutin, when Kremlin officials reviewing the case for Russian ratification got wind of his findings, they expressed ‘worry,’ and demanded details. “We have a full-scale carbon emission inventory underway right now,” he says. “The government wants this information for a decision on whether or not to ratify Kyoto.” 

As a result, the article concludes, “Nakhutin's results won't be in for a while yet, but even so, enthusiasm for Kyoto in the Kremlin is fading fast.”



Japanese Carbon Tax Faces Stiff Opposition

Nippon Keidanren (the Japan Business Federation) told Japan’s Environment Ministry on November 18 that a carbon tax would harm the country’s economy.

Keidanren chairman Hiroshi Okuda expressed his concerns at a meeting with Environment Minister Yuriko Koike, claiming that the tax would “hollow out industry and put a damper on” the recovering economy (Japan Times, Nov. 19).

The Japanese government’s position had been that it would meet its Kyoto targets through voluntary measures only, but concern that not enough progress was being made led them to propose the tax on importers and processors of fossil fuels.  The Japan Times wrote that, “Since the proposal, the Ministry has been trying to gain acceptance from business, but opposition to the tax seems to have no end.”

The Environment Ministry reacted angrily, with Vice Environment Minister Shigeru Sumitami asking reporters, “If Keidanren officials say they cannot accept the proposed tax, what other steps would they come up with to achieve the goals set in the Kyoto Protocol?”  Sumitami also reacted incredulously to the group’s claim that Japan can significantly reduce its emissions through technology.  He asked, “Do they believe they can really make it only through such measures?”

European Auto Makers Set to Miss CO2 Reduction Targets

According to a report in Automotive News Europe (Nov. 17), European car makers are unlikely to meet their voluntary target of cutting CO2 emissions significantly by 2012.

ACEA, the European carmakers association, had pledged in 1998 to reduce the new car fleet emissions average in 2008 by 25 percent from 1995 levels, to 140 grams of CO2 per kilometer, with a further reduction to 120 g/km by 2012.

Monitoring figures to be released in December, however, are said to show that 2002 emissions averaged 165 g/km, up slightly from the 2001 figure of 164 g/km.  Carmakers blame their consumers for preferring SUVs.  They also claim that, “Cars have also become heavier and less fuel-efficient as more equipment is added to meet safety regulations.”

ACEA chairman Louis Schweizer, also the CEO of Renault, admitted that meeting the 2008 commitment would be “tough” and that the 2012 target was no longer practical.

Schweizer also admitted that the reductions made to date were largely a result of the unexpected surge in demand in the late 1990s for diesel cars, which use less fuel per kilometer.  As a result, PSA/Peugeot-Citroen, a major force in automotive diesel technology, will probably be the only European carmaker to meet the 2008 requirement.

Reacting to the news, European Union officials ruled out sanctions against the manufacturers and suggested instead that the EU may encourage member governments to offer tax incentives aimed at persuading consumers to buy “greener” cars.

Environmental Group Looks to Future without Kyoto

The World Resources Institute has suggested that the COP-9 meeting of the UN Framework Convention on Climate Change could reflect “ a growing number of regional groups committed to forging their own paths toward emissions control.”  The suggestion follows the realization that the Kyoto Protocol is unlikely to be ratified soon.

WRI expert Jonathan Pershing told reporters that a so-called “coalition of the willing” made up of members of the EU and a “growing number” of developing nations could go ahead with the Kyoto protocol regardless.  This group is likely to set a target of “ensuring that global temperatures average out to an increase of no more than 2 degrees Celsius.”

Pershing observed that this unilateralism would change the framework for future talks, creating a “funny institutional process,” with countries moving away from the UN negotiating system.

The WRI analyst also predicted that the New Partnership for Africa’s Development could look at creating its own guidelines on climate change, while Asian nations could also form a group “which has common cause about Asian problems meeting in an individual set area and not following the global” route.  He also suggested that NAFTA may operate as a bloc “instead of joining the UN system.”

Pershing said he expected the “coalition of the willing” to make a formal ministerial announcement during the opening days of the Milan meeting, but also expressed extreme uncertainty over whether the group could rescue Kyoto as a result.



Hockey Stick Critics Speak on Hill

Stephen McIntyre and Ross McKitrick, authors of the paper that raises questions about the quality of the data underlying the IPCC’s “hockey stick” graph of temperatures in the last 1000 years, briefed congressional staff on the issue at a meeting organized by the George C. Marshall Institute and the Cooler Heads Coalition on November 18.

McIntyre gave a compelling account of how he became interested in the hockey-stick controversy and then suspicious of the claim that the last decade was the hottest in the third millennium A. D.  His experience in the mineral explorations business taught him that all data must be checked, so that is what he and McKitrick did in their paper.

The authors gave a chronological account of the charges made by the inventor of the hockey stick, Michael Mann, since their critique was published in Energy and Environment in late October.  Mann first claimed that they had analyzed the wrong data sets, which had mistakenly been sent to McIntyre by one of Mann’s collaborators.  Instead they should have used the data sets that had long been publicly available on an ftp site. 

According to McIntyre and McKitrick, this criticism was irrelevant since they had rebuilt Mann’s 112 data sets from original sources.  They then discovered that the data sets that they had been sent were the same as those on the ftp site.  Mann has since deleted the data sets from his ftp site.

Mann then explained that McIntyre and McKitrick’s results showed a warm period in the fifteenth century because they had failed to include three key principal components.  McIntyre and McKitrick replied that they omitted one because it double counted readings included in another component and updated another with newer data from the original source.  This updated data changed the component’s effect considerably.  McIntyre pointed out that the hockey-stick graph, at least for the 1400s, appears to be driven by only three of 112 principal components, which is a slender database upon which to base any conclusion.

McIntyre and McKitrick stressed throughout the presentation that they were not saying that they had proved the 1400s were warmer than today.  What their statistical re-analysis had demonstrated was that it was not possible to conclude from the data Mann used that temperatures in the 20th century were unusual.  Access to all the documents in the ongoing controversy can be found online at

Satellite Wars Rage On

Modellers at the Remote Sensing Systems firm continue to raise objections to the University of Alabama at Huntsville satellite temperature readings of Roy Spencer and John Christy.  In a new article in the Journal of Climate (published by the American Meteorological Association), they claim that a re-analysis of the dataset “show[s] a global trend of 0.097 ± 0.020 K decade−1, generally agreeing with the work of Prabhakara et al. but in disagreement with the MSU analysis of Christy and Spencer, which shows significantly less (0.09 K decade−1) warming.”

The article re-asserts the claim already made by RSS that their imputations from climate models are more reliable than the actual data from weather balloon radiosonde readings, which corroborate the findings of Christy and Spencer.

Although the finding was widely reported as confirming human influence on global warming, Christy told the New York Times (Nov. 18) that the evidence was pointing more firmly toward a modest impact from rising greenhouse gases, “We've had enough years of this human-induced forcing to get some boundaries on it, and it's just not going in the dramatic and catastrophic direction.”

This view was confirmed in Newsweek’s coverage of the same story (Nov. 23).  In a remarkably candid paragraph, the magazine said, “Recently scientists’ predictions [of future temperature increases] have begun to converge on a narrower range, and the forecasts have gotten more modest. James Hansen of the NASA Goddard Institute for Space Studies in New York has pointed out that in recent years the actual rise of greenhouse gases hasn’t accelerated as fast as the IPCC predicted. Carbon-dioxide emissions increased 4.7 percent a year from 1945 to 1973, but since then, the average increase has been only 1.4 percent a year. The rate for methane, another powerful greenhouse gas produced in landfills and rice farming, is barely increasing at all. Hansen thinks that even if nothing is done, the planet would warm only 1.5 degrees by 2050.”

It is a shame, then, that Newsweek followed this anti-alarmist finding with the distinctly alarmist suggestion that, “If [developing nations] succeed in making the air cleaner, temperatures may soar-perhaps by as much as seven to 10 degrees Celsius.”

Methane Emissions Leveling Off

Australian scientists have determined that atmospheric concentrations of methane have leveled off.  “Over the past four years there has been no growth in atmospheric methane concentrations compared to a fifteen percent rise over the preceding twenty years and a 150 percent rise since pre-industrial times,” said Paul Fraser, a chief research scientist at the atmospheric research section of Australia’s Commonwealth Scientific and Industrial Research Organisation (The Australian, Nov. 25).

The findings come from CSIRO and the Australian Bureau of Meteorology’s gas monitoring station at Cape Grim in Tasmania.  Methane (the principal ingredient of natural gas) is a potent greenhouse gas, but persists in the atmosphere for a far shorter time than does carbon dioxide.

According to the Australian, Dr. Fraser thinks that methane levels “would start to fall if this global decline in methane emissions continued.”  He speculated that emissions are declining “due to better management of the exploration and use of fossil fuels (coal, oil and gas) and the increasing recovery of landfill methane.”



Cato Conference on Global Warming

The Cato Institute is holding a daylong conference on Global Warming: the State of the Debate, on December 12 at the institute’s Hayek Auditorium, 1000 Massachusetts Ave., N. W., Washington, D. C.

Speakers include: Patrick Michaels (University of Virginia and a Cato Senior Fellow), Robert Balling (Arizona State University), John Christy (University of Alabama at Huntsville), Michael Schlesinger (University of Illinois), Robert Mendelsohn (Yale University), and Indur Goklany (Department of Interior).

The complete program and registration information may be found on the internet at


Publishing Schedule

In order to work around the Thanksgiving and Christmas holidays and to report on COP-9 in a timely way, the November 26, December 10, and December 24 issues of Cooler Heads are being combined into two issues.  This is the first, and the second will be published on December 17.  The first issue in 2004 is scheduled for January 7.



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