by Ben Lieberman
November 17, 2009
The Heritage Foundation
What Are the Economic Concerns?Great article. I hope you read the entire article.
The goal of the Kyoto Protocol, the building block for Copenhagen, is similar to the purpose of the Waxman-Markey global warming bill, which narrowly passed the U.S. House of Representatives in June, and of the Kerry-Boxer bill being considered in the U.S. Senate. All three would set limits on emissions from fossil fuels -- the coal, oil, and natural gas that provide America with 85 percent of its energy. Such limits would act as a large energy tax, driving up the energy costs of individuals and consumers, forcing them to use less energy. More stringent emissions targets would require even larger increases in fossil energy prices to further discourage their use.
A Heritage Foundation analysis of Waxman-Markey found that this energy tax would have serious implications throughout the economy. For a household of four, energy costs (electric, natural gas, gasoline expenses) would rise by $436 in 2012 and by $1,241 by 2035, averaging $829 over that period. Higher energy costs would increase the cost of many other products and services. Overall, Waxman-Markey would reduce gross domestic product by $393 billion annually and by a total of $9.4 trillion by 2035. An initial analysis of the Senate bill finds comparable costs.
Would the Environmental Benefits Be Worth It?
No. First, there are growing doubts about whether global warming really is the crisis it was claimed to be heading into the 1997 Kyoto negotiations. For example, global temperatures have leveled off since then. However, putting the scientific doubts aside for a moment, the Kyoto approach seems unlikely to slow global warming effectively. One scientific study estimated that, even if the treaty reached its targeted emissions reductions, it would reduce the earth's future temperature by about 0.07 degree Celsius by 2050 -- an amount too small to make any difference and impossible to verify because natural variability is far greater. Obviously, more stringent targets at Copenhagen would reduce the temperature more, but not by much, especially if developing nations were still exempt from emissions reductions.
Is U.S. Sovereignty at Risk?
Yes. Kyoto has no international enforcement mechanism with any real teeth. To actually reduce emissions, any successor treaty coming out of Copenhagen would need an effective enforcement mechanism. Domestic U.S. enforcement of the treaty, if ratified, would be problematic enough, but any binding international enforcement provisions would create additional serious problems.
Compliance with such a treaty would require massive changes to the U.S. economy, and U.N. bodies would decide many of the details of those changes. For example, one way to comply with Kyoto or subsequent treaties is to purchase so-called offsets to carbon dioxide emissions. Offsets allow regulated entities to pay others to undertake projects that presumably reduce emissions globally, such as paying landowners to plant trees or bankrolling the installation of solar panels in poor countries. In many cases, companies find offsets cheaper than actually reducing their own emissions. However, these projects have been subject to fraud. For example, some offset projects have not actually reduced emissions, while others involved industrial facilities with unnecessarily high initial emissions for the purpose of profiting by lowering them later. Currently, the Clean Development Mechanism under the U.N. decides which offset projects are acceptable. Thus, unelected international bureaucracies would control this critical aspect of a climate treaty, which would have significant implications for the U.S. economy.