Much to the chagrin of radical environmentalists and European elites, President Bush’s decision to reject the Kyoto protocol–and domestic policies seeking to implement it–is looking quite good these days.
The fatuous myth propagated by extremist groups–that Kyoto won’t be costly, that it won’t harm economic growth, and that it would actually do something to “solve” global warming–is being undermined by Russia, which doesn’t appear to like Kyoto’s economic implications, not to mention its scientific underpinnings, and Europe, where the euphoria of ratification is waning, as Kyoto’s costs, once so indignantly ignored, are coming painfully into view.
On October 8, the Times of London cast a hefty dose of realism on Kyoto’s emissions targets, which Europe has been struggling to meet. The Times reported that the “cost of compliance will send the price of power soaring,” and that “McKinsey, the consultancy, estimates that wholesale electricity prices will rise by 40 percent within 5 years. UBS Warburg, the investment bank, reckons that the increase could be as much as 63 percent.”
The paper noted that Europe’s foray into large-scale energy rationing initially was helped by “the collapse” of East German industry–in other words, economic decline brought lower emissions, a phenomenon experienced here in the U.S. Just ask the National Association of Manufacturers, which said recently: “Today’s emissions levels are depressed because the manufacturing economy is still recovering from the recession.”
With the nation now mired in a natural gas crisis–something environmentalists deny in the face of incontrovertible evidence–Kyoto and similar policies would inevitably mean sharp increases in demand for gas, as both the Energy Information Administration and the National Petroleum Council have found. That means drastically higher prices for energy, especially for the beleaguered manufacturing industry.
Why more demand for natural gas? As the Times rightly noted, “The Kyoto Protocol was nothing less than an international agreement to kill off the coal industry.” Coal, which supplies 52 percent of the nation’s electricity, must, for the good the economy, remain a viable fuel source, a notion President Bush correctly grasped when he rejected Kyoto.
Some European officials, however, are undaunted. Italy’s environment minister said Kyoto would reduce global emissions by only 2 percent; he favors a 50 percent reduction. Still others have suggested stabilizing CO2 concentrations at 550 ppm by 2100. Under such a scenario, according to the International Council on Capital Formation, “developed country emissions must fall to zero by 2050, to allow for developing countries to continue to grow.”
Russia too has looked through the veil and seen Kyoto’s manifold flaws. Yuri Izrael, Vladimir Putin’s science adviser, declared recently: “All the scientific evidence seems to support the same general conclusions, that the Kyoto Protocol is overly expensive, ineffective and based on bad science.”
Looking into the future, Andrei Illarionov, another Putin adviser, stopped to consider what Kyoto means for Russia: “If we are to double GDP within the next 10 years, this will require an average economic growth rate of 7.2 percent. . . No country in the world can double its GDP with a lower increase in carbon dioxide emissions or with no increase at all.”
All of this should be instructive for the upcoming debate on the Lieberman-McCain bill. The bill, as EIA has shown, will impose serious economic harm on the U.S. And that’s the case even if the bill’s second compliance period (1990 levels by 2016) is ultimately jettisoned (phase I is 2000 levels by 2010).
As Marlo Lewis of CEI pointed out yesterday on TechCentralStation.com, “To win new supporters, Sens. McCain and Lieberman have announced they will introduce an amendment to strike Phase II from the bill. But does anyone believe for a moment that enacting Phase I would appease rather than embolden the Kyoto lobby, or that enacting Phase I today would not make it easier to enact Phase II tomorrow?”
Beyond such troubling institutional pressures, the National Association of Manufacturers (NAM) explains that Phase I is no picnic either. Consider: “Mandating emissions to be lower in 2010–after seven years of additional population, and hopefully, economic growth –will require major economic disruptions and export of additional manufacturing jobs. EIA projects that projected emissions levels in 2010 would have to be reduced by 14 percent to achieve the 2000 emission levels quota set by this bill.”
Moreover, NAM writes, “Even if the sponsor’s second phase of additional emissions cuts do not become law, the economy will have to make additional cuts in fossil energy use every year following 2010, in order to stay at 2000 levels despite increasing demand for more energy from a growing population and economy.”