McCain, Lieberman Like Kyoto

Liberty Matters News Service

10/30/03

Washington, D.C. - This week, the Senate is scheduled to debate S. 139, the Kyoto-like McCain/Lieberman bill named the Climate Stewardship Act that would require emissions of carbon dioxide and other so-called green-house gases to be reduced to 2000 levels by 2010.

Implementation of the measure would cost the United States over $1.3 trillion by 2025, according to analysis by the Energy Information Administration (EIA).

The Senate resoundingly rejected the Kyoto Protocol (95-0) in 1997 on the basis it would be harmful to the U.S. economy. Russia expressed similar concerns when it refused to sign on to Kyoto at the recent World Climate Change Conference in Moscow. Dr. Andrei Illarionov, President Putin's economic adviser, said, "Considering that the Kyoto Protocol is restricting economic growth…it means dooming the country to poverty, backwardness and weakness."

The Senate should end the debate and delegate the Climate Stewardship Act to the ash heap of history along with the Kyoto Protocol.

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FLAWED ENVIRONMENTAL POLICY

By Margo Thorning
From Liberty Matters News Service

10/30/03

Policy-makers in Congress, as well as several state legislatures, are considering legislation to reduce carbon dioxide (CO2) emissions. For example, the bill introduced by Sens. Joseph Lieberman, Connecticut Democrat, and John McCain, Arizona Republican, would require the United States to reduce greenhouse gas emissions to 2000 levels by 2010 (a 14 percent reduction compared to current emission trends). The same bill would require utilities to reduce CO2 emissions by nearly as much as required

by the Kyoto Protocol. In 1997, the last time it voted on a similar issue, the Senate voted 95-0 to oppose any constraints on emissions that could harm the economy. One state, California, has also mandated reductions in CO2 from cars and trucks. Legislators need to ask themselves whether these proposals are appropriate in light of recent international climate policy developments in key countries like Russia and Australia.

For example, at the recent World Climate Change Conference (WCCC) in Moscow, a marathon five-day gathering of climate scientists and policy experts from all over the world in which I participated, top Russian policy-makers questioned the benefits to Russia of signing the Kyoto Protocol. Dr. Andrei Illarionov, President Vladimir Putin's economic adviser, made it clear that Russia's priority is to double its Gross Domestic Product by 2010. Achieving that goal will, according to Mr. Illarionov, require a doubling of carbon emissions, due to the strong correlation between energy use and economic growth. Looking out past the first commitment period (post-2010), when the target for Russian carbon emissions could be 60 to 70 percent below 1990 levels by the

year 2050, Mr. Illarionov stated that Russia would have to buy emission credits and curtail its economic growth. At an Oct. 3 press conference in Moscow, Mr. Illarionov asked rhetorically, "The United States and Australia have calculated that they cannot

bear the economic consequences of ratifying the Kyoto Protocol. If they are not rich enough to deal with these consequences, my question is whether Russia is much richer than the U.S. and Australia." He concluded, "Considering that the Kyoto Protocol is restricting economic growth . . . it means dooming the country to poverty, backwardness and weakness."

Russia's apparent decision not to ratify the Kyoto Protocol will likely shift the terms of the debate at the upcoming meeting of the Conference of the Parties in Milan this December. Pro-Kyoto forces, who lobbied Mr. Putin aggressively to say "Da" during the opening session of the WCCC meeting in Moscow, had hoped to move forward on implementing the treaty and planning for the further greenhouse emission cuts in the post-2010 period. Targets of 60 to 70 percent below 1990 levels have been suggested

by European Union (EU) policy-makers. The recent developments in Russia, as well as in Australia, where Prime Minister John Howard again stated that his country would not ratify the protocol, suggest that few agreements on the nitty-gritty of reforming the EU emission-trading system will occur in Milan. In the end, this may be the best outcome, for it may encourage the EU to consider alternative approaches. These could include a long-term strategy for developing new technologies for energy production.

These approaches are likely to provide a surer way to gradually stabilize greenhouse gas emissions, while allowing for economic growth in both the developed world and countries like China, India and Mexico. Nuclear power expansion could also play a valuable role in reducing carbon emissions, while allowing for the increased energy consumption necessary for economic growth.

In light of the increasing probability that the Kyoto Protocol will not go into effect, defeated by the growing recognition of its impracticality, it seems especially unwise for U.S. policy-makers to try to pass "Kyoto-like" targets for the United States, such as those in the Lieberman-McCain bill. Shackling ourselves to meaningless targets (in the sense that U.S. emission reductions will have virtually no impact on the growth in global emissions) will only slow productive investment in the United States, reduce job growth and hinder U.S. competitiveness.

Dr. Margo Thorning is a senior vice president and chief economist of the American Council for Capital Formation.

Copyright (c) 2003 News World Communications, Inc. All rights reserved.

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Courage against the 'consensus'

THE WASHINGTON TIMES
Published October 29, 2003

Today and tomorrow, the Senate is expected to spend six hours of floor time debating the Climate Stewardship Act, co-sponsored by Sens. John McCain, Arizona Republican, and Joseph Lieberman, Connecticut Democrat. Considering its doubtful mitigation effects and certain economic costs, Congress would do well to spend nothing more than time on the legislation.

The bill is a light version of the Kyoto Protocol. While Kyoto would require emissions of carbon dioxide and other greenhouse gases to be cut to 1990 levels by 2012, McCain-Lieberman would require that such emissions be cut to 2000 levels by 2010. Earlier this month, Messrs. McCain and Lieberman agreed to eliminate the second phase of the cuts, which would reduce emissions to 1990 levels by 2015. (They promised to push for this phase later.)

Doing that could have a cumulative cost of over $1.3 trillion by 2025, according to an analysis of the legislation done by the Energy Information Administration (EIA). (The analysis included a few optimistic estimates on the economy's ability to compensate for the imposed costs.) The EIA report also predicted that by 2025, the price of gasoline would rise by about one-third and the price of electricity by about 50 percent.

Those are startling numbers, regardless of the considerable uncertainties involved. Similar economic likelihoods led Russian President Vladimir Putin to step back from ratification of Kyoto. Australia has also refused to go along.

In contrast to the near-consensus among economists about high costs of emissions caps on carbon dioxide, there is still no agreement among scientists on how those emissions may be contributing to climate change. The systems are too complex, and there are too many variables involved for a clear-cut answer.

However, it is widely acknowledged that Kyoto-style caps would have little effect on climate change. An article on technologies that might be useful in reaching such targets published in the journal Science about a year ago pointed out that "Kyoto is too weak . . . because much greater emission reductions will be needed and we lack the technology to make them."
Emissions reductions and economic growth will have to go hand-in-hand — as the Science piece noted, "Energy is critical to global prosperity and equity." In an op-ed opposite this page, Margo Thorning points out that encouraging the development of new energy production technologies with reduced greenhouse gas emissions is a wise goal for policy-makers.
The administration has already been doing so, with initiatives on clean coal and hydrogen fuel cells. Although critics have castigated the administration for faintheartedness in refusing to act on either McCain-Lieberman or Kyoto, it takes courage to go against the clamor of the chattering class.

The vote on McCain-Lieberman may give the administration's opponents a new set of talking points. However, it should not sway the administration in its determination to avoid costly, ineffective strictures like McCain-Lieberman or Kyoto. Time and technology may yet provide the best solutions to climate change.