Russia Could Sink Kyoto — and McCain-Lieberman

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The Climate Stewardship Act (S. 139), introduced by Sens. John McCain (R-Ariz.) and Joseph Lieberman (D-Conn.), and soon perhaps to be voted on in the Senate, is a nose-under-the-tent strategy to align U.S. domestic and foreign policy with the Kyoto protocol, the U.N. global-warming treaty that President Bush rejected in March 2001. The bill (also known as McCain-Lieberman) would impose Kyoto-like requirements on major <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />U.S. companies to reduce emissions of greenhouse gases, chiefly carbon dioxide from energy use. Once enacted, those companies would have an incentive to lobby the Bush administration and the Senate to ratify Kyoto in order to take advantage of its “flexibility mechanisms,” mainly emissions trading.


For years we have heard from Kyoto supporters that the science underpinning the treaty is settled and that Bush’s rejection of the agreement puts America out of step with the community of nations. However, at a recent five-day international climate conference in Moscow, Russian scientists questioned Kyoto’s scientific basis—and Russian President Vladimir Putin raised doubts about his government’s willingness to ratify the treaty.


Indeed, at an Oct. 3 press briefing, Putin economic adviser Andrei Illarionov challenged Kyoto’s scientific and economic premises so aggressively that Russian ratification of the treaty no longer seems likely.


The implications are breathtaking. If Russia does not ratify, then Kyoto, by its own terms, cannot enter into force. Entry into force requires ratification by countries representing 55 percent of the industrialized world’s emissions. Without Russia, the total remains stuck at 44 percent. A treaty many have portrayed as inevitable may soon tumble into the dustbin of history.


In his remarks, which fill 24 pages of closely printed type, Illarionov rightly points out that the greenhouse models underpinning the Kyoto protocol cannot explain:


• Why the near-earth atmosphere (as measured by satellites and weather balloons) has warmed less than the surface.


• Why in the 20th century Earth warmed during a 30-year period of economic stagnation and slow increase in carbon-dioxide emissions (1913-1945) but cooled during a 30-year period of high growth and rapid increase in emissions (1950-1975).


• Why temperatures in A.D. 800-900 in the Northern Hemisphere and possibly around the globe appear to have been as warm as or warmer than what we observe today.


Reminiscent of the July 1997 Byrd-Hagel Resolution, which the U.S. Senate passed by a vote of 95-0, Illarionov noted that Kyoto’s goals are unattainable even “in principle” because the treaty exempts developing countries, the very countries where emissions are growing most rapidly.


Turning to the economic side of the debate, Illarionov reported that 40 years’ worth of data show a significant correlation in 150 countries between high GDP growth and increasing CO2 emissions, on the one hand, and economic stagnation and zero growth in emissions on the other. Those correlations, he said, are “an inevitable product of civilization at the current stage of development. … The present economic civilization is based on hydrocarbons.”


Elaborating on this point, Illarionov agreed that a “switch to new technologies” at a “higher level of development” might stabilize greenhouse gas concentrations in the atmosphere. “But the big question is when and how can we move on to these new technologies?” By his reckoning, 6.8 percent of the world’s energy comes from nuclear power plants, 2.3 percent from hydropower, 0.5 percent from geothermal power and 90.4 percent from hydrocarbons. Since geothermal sites are few in number and most of the world’s hydropower resources are already exploited, the only remotely realistic option for stabilizing greenhouse gas concentrations is “to replace fossil fuel with nuclear power generation.” Yet, Illarionov noted, “those who call themselves environmentalists … who support the Kyoto protocol … object to the development of nuclear power engineering.” The world may some day go in that direction, but not likely by 2012 or even 2016.


Illarionov rejected as “illusory” the oft-repeated claim that Russia would reap a gigantic windfall under Kyoto’s emission trading system. That is most telling, because Kyoto was designed to be a wealth transfer from the United States and other developed countries to Russia. Kyoto’s emission reduction targets are measured against 1990 emissions baselines. When the Soviet regime fell and Russia’s economy collapsed, Russia’s emissions dropped to 30 percent below 1990 levels. It was generally assumed that Russia would earn billions by selling its surplus credits to the United States and other countries unable to meet their reduction targets via technological means.


But three circumstances now make that assumption obsolete. First, the United States rejected Kyoto, substantially reducing potential demand for Russian “hot air.”


Second, Europe and Japan — partly because they took their Kyoto obligations seriously and reduced emissions — have anemic rates of economic growth, which in turn reduce their demand for Russian credits.


Third, and most critical, the Putin administration is committed to doubling Russia’s GDP by 2010, requiring a 7.2 percent average rate of economic growth. Other countries have doubled their GDP within 10 years, but their carbon-dioxide emissions also increased by 7 percent or more per year. “No country in the world can double its GDP with a lower increase in carbon dioxide emissions or with no emissions [growth] at all,” said Illarionov.


Given its economic goals, Russia under Kyoto would find itself a buyer rather than a seller of carbon quotas in 2012 or shortly thereafter. Just keeping emissions within the original Kyoto target would become increasingly costly and difficult over time.

However, Kyoto negotiators have actively discussed a second commitment period in which Russia would have to reduce emissions to 58 percent below the 1998 level by 2050. Thus, Illarionov concluded, for Russia, Kyoto “means dooming the country to poverty, backwardness and weakness.”


At the conference, Illarionov reported, Intergovernmental Panel on Climate Change Co-chairman Bert Bolin acknowledged that Kyoto’s requirements would reduce the pace of economic growth by 1 percent per year. “One can argue whether it’s 1 or 2 percent; this is immaterial,” said Illarionov. “The important thing is that nobody, including the supporters of Kyoto protocol ratification, takes issue with the fact that the pursuit of the Kyoto protocol requirements and [that of] economic growth are opposed directions. They are incompatible.”


A Russian decision to reject Kyoto would sink the treaty and, with it, McCain and Lieberman’s scheme to revive Kyoto’s political fortunes in the United States. But even if Kyoto somehow survives, Illarionov has made clear why an agenda of climate alarmism and energy rationing is dubious science and bad economics and why the Climate Stewardship Act would move America in the wrong direction.