Thomas Gale Moore
Senior Fellow
Hoover Institution
Stanford University
Last month world leaders gathered in New York for what was dubbed "Rio plus Five" but soon became known as "Rio minus Five." At the conference, President Clinton was charged by some of our closest allies with failing to lead the world. Although the president gave a rousing speech, painting a fearsome picture of a world full of storms, rising seas, and spreading diseases in the wake of global warming, he feared more the wrath of the voters than the wrath of nature or his colleagues.
The new U.K. Prime Minister, Tony Blair, the German Chancellor Helmut Kohl, and President Jacques Chirac of France took the United States to task for failing to adopt stringent goals on greenhouse gas emissions. The Australian government, on the other hand, was pleased that the U.S. did not endorse the EU plan to cut greenhouse gas emissions over the next twelve years by more than 15 percent. The Japanese were motivated mainly by the desire to see some agreement, any agreement, signed at Kyoto in December. The Canadians and Scandinavians sat on the fence. What's going on?
Why should the British and the Germans be pushing for such drastic steps when, as pointed out in these pages, the result would be devastating to their energy-intensive industries? In part their politicians can pose as "Greens," knowing full well that the United States will never (one hopes) agree to such restrictions. Moreover, they may not face the same pressures. One reason may be that Germany, France, and Japan have grown much more slowly than has the United States over the last five years. Slow growth means less energy use, hence reduced CO2 emissions.
Since both Germany and the United Kingdom have cut their emissions of greenhouse gases in the 1990s, they feel morally superior, able to lecture the wasteful Americans. What gives them such standing? Germany took over the communist East, a landscape populated with inefficient, coal burning industries. Those plants could not compete with the modern facilities sported by the West. Even though the Bonn government attempted to maintain industry in the former Marxist East, primarily to protect jobs, much of the industry was eventually shut down. The resulting reduction in CO2 emissions allows the Federal Republic to argue that, since it has met the obligations of Rio, the United States should do so as well. German opposition parties, however, have pointed out that the area of the former West Germany has in fact increased its greenhouse gas emissions. Were it not for the halving of East German emissions, the EU has admitted that Europe's total CO2 would rise 9 percent by the year 2000.
The United Kingdom has also undergone considerable readjustment. The Conservative government instituted a privatization program for its inefficient, money losing, coal industry. As a consequence, many mines were forced to shut down and the burning of fossil fuels for power was reduced. The resulting substitution of natural gas for coal in the UK reduced greenhouse gas emissions sharply, allowing Prime Minister Blair to reproach President Clinton for the U.S. failure to curb its greenhouse gases.
Although the French might have to make significant reductions in carbon dioxide emissions to meet the European goal, they joined the other EU countries in attacking the United States. Anything that might slow the U.S. boom, reflected in a 5.0 percent unemployment rate less than half the level for France and Germany, is worth the cost to the anti-American Gaullists. Meeting the European proposal would reduce U.S. competitiveness compared to that of the Europeans. Moreover, as President Chirac remarked pointedly at the G-8 summit, "The average American is responsible for emitting three times the amount of greenhouse gas as the average Frenchman." The relatively low French emissions result from the country's reliance on nuclear energy for 80 percent of its power and the taxing of gasoline at rates that, if imposed in the U.S., would produce blood on the streets of American cities and towns.
On the other side of the issue are the Australians, who rely exclusively on fossil fuels for energy while exporting large quantities of coal. Prime Minister John Howard has asserted that a flat-rate reduction in emissions would devastate the Australian economy. He said recently, "We're a net exporter of energy and we're a highly developed country and if the current European and American proposals go through, it will damage Australia, cost Australian jobs, reduce our GDP ...." He would like any agreement to provide "differentiated" goals that take into account each country's special circumstances, particularly its reliance on fossil fuels.
Within the U.S., politicians, experts, and academics split on the issue. Pushing the Administration to agree to the European standards or at least to propose rigid limits, are environmentalists, a handful of politicians, and some well-meaning, if poorly-informed commentators. On the other side, are those concerned with the impact of an agreement on economic growth, employment, and trade; those skeptical about the significance of any climate change; and those who find evidence that a warmer world would not in general be harmful. More than 60 Senators have come out against any treaty that limits the U.S. while giving a free ride to much of the rest of the world. Congressman John Dingell, a senior Democrat member of the House Commerce Committee, has repeatedly requested that the Administration provide an economic analysis of the effects of any agreement. He is particularly concerned with the exemption from stringent controls of developing countries like China and India. This powerful Michigan representative fears, with some justice, that a Kyoto agreement would be costly, resulting in an "economic fiasco."
Agreement on a treaty that can pass muster in the United States while capping U.S. emissions at a level significantly below 1990 appears to be remote. Clinton and Gore, however, have been politically astute in past bargaining with the Congress and usually get their way in international meetings. Al Gore, who boasts a reputation as a dedicated environmentalist, must deliver or lose his credibility. Since the Europeans are unlikely to be serious about their proposal, which would put their industry through a ringer, some compromise, such as postponing any significant reductions well into the next century, might produce an agreement in Kyoto. Stricter CAFE standards and a tax on fuel used for international air travel seem likely to form part of the package. At that point the Congress would have to face rejecting a treaty and supposedly losing the U.S. leadership on the environment or going along with Clinton and the environmentalists, knowing that a distant future Congress would have to legislate the onerous energy taxes and stringent regulations necessary to meet the protocol's mandates. Let us hope that the public and the Congress will be able to see through this charade.
References:
Alexander Downer, "Australia and Climate Change," address given to the "Global Emissions Agreements and Australian Business" seminar, Malbourne, July 7, 1997.