The End is Nigh Ö for the Kyoto Protocol

The End is Nigh Ö for the Kyoto Protocol

Julian Morris

At last week's climate change meeting in Buenos Aires, European governments

appeared finally to have woken up to the fact that the Kyoto Protocol sums

don't add up. Meanwhile, Brazil, China, India and the US - together

representing the majority of global emissions of greenhouse gases - seem

opposed the imposition of binding restrictions on emissions of greenhouse

gases after 2012, when Kyoto comes to an end. As a result, the Kyoto

Protocol itself may unwind. This would be good news for everyone, especially

the poorest.

In a widely-reported statement during COP-10, Italy's Environment Minister,

Altero Matteolli said that his government was unwilling to impose

restrictions on greenhouse gas (GHG) emissions after 2012 unless the US,

China and India did likewise. In a break from the previously unanimous hair-

shirt wearing rhetoric of European officials, he is reported to have

said "we Europeans cannot be burdened with the emissions of the whole worldÖ

Either we decide here that everyone enters the protocol, the U.S., China,

India and others, otherwise we'll be stuck paying for all the others."

Matteoli's point is very simple: restrictions on emissions of GHGs will

raise the cost of doing business in Europe compared to the US and other

countries that haven't chosen to wear a Kyoto straight-jacket. Other high-

level European officials have made this point. In February, EU Energy

Commissioner, Loyola de Palacio, suggested that "We should look at other

ways of achieving our goal - to reduce emissions - while maintaining the

competitiveness of our industry." Though de Palacio's remarks were dismissed

by then Environment Commissioner Margo Wallstrom, Matteoli's remarks were

initially reinforced by her replacement, Stavros Dimas, who told Dow Jones

on Wednesday - 'There is no gap between the EU vision and the Italian vision

on what should happen to Kyoto after 2012.'

But what is that vision? EU officials say they plan to pay ëdeveloping

countries' Ä360 million per year to help them with climate change. That is a

fair-size bribe - for which there must, presumably, be some quid pro quo.

Yet it is far too small to induce any of Asia's big economies to commit to

reduce GHG emissions, since these reductions would cause billions of dollars

of economic damage every year. Most likely, India, China, and other aid

recipients will agree to a fuzzy commitment to increase energy efficiency -

but not a binding cap on emissions. Nevertheless, by Thursday the EU seemed

to have put its head back in the rich alluvial soil of the River Plate, with

Dimas telling Reuters, 'Voluntary reductions have not given results up to

now. So we need mandatory reduction targets.'

The EU also said that it wants to find ëcommon ground' with the US, and

British Prime Minister Tony Blair has said that he wants to use his

chairmanship of the G8 to bring the US into the fold on climate change. But

what might the ëcommon ground' be? Blair says he wants agreement on the

meaning of ëdangerous' in the context of climate change. The reason is that

the Framework Convention on Climate Change - the 1992 agreement that both

the EU and the US have ratified - is predicated on the need to take action

to prevent ëdangerous anthropogenic interference with the climate system.'

Without a clear meaning of ëdangerous', it is not clear what actions might

be justified. The Framework Convention also requires that actions to address

climate change must be ëcost effectiveÖ to ensure global benefits at the

lowest possible cost'.

According to a study by the UK Meteorological Office released last

week, ëdangerous climate change' would include the possibility that the

Greenland glacier might melt - in 3000 years. The study raises a more

plausible concern, that of an increase in heatwaves in Northern Europe.

However, it fails to mention that these would coincide with warmer winters;

since cold is deadlier than heat, the net result would be to save lives.

Bizarrely, it also hypothesised an increased possibility that Northern

Europe might be slightly colder at some point in the future - if

the ëthermohaline circulation' in the North Atlantic shuts down. In any

case, these are hardly grave concerns and certainly not problems that would

merit urgent action.

As regards the meaning of ëcost effective'; this is something for economists

to ponder. In May, eight world-renowned economists who met in Copenhagen

decided that limiting GHG emissions is not cost-effective at the moment.

Rather, the Copenhagen Consensus suggests that we ought to invest money now

to counter AIDS and malaria, improve access to clean water and sanitation,

and free up trade. Those are cost-effective strategies that will enable the

poorest people in the world to lead better, more productive, healthier,

happier and cleaner lives - and, as a result, they will be in a better

position to deal with any global warming that occurs.

So, how does this affect the current situation? For a start, we know that

the Kyoto Protocol by itself - even if fully implemented by all signatories -

would have no observable impact on the climate. Though the EU continues to

put a brave face on its plan to implement Kyoto, without a commitment for

emissions constraints after 2012, its local carbon control scheme will

achieve absolutely nothing at considerable cost. That cost will be borne by

all Europeans, but will be greater in those countries that have experienced

more rapid and more carbon-intensive economic growth over the past 15 years -

such as Italy and Spain.

It is possible that the cost of implementing Kyoto may be reduced if Russia

agrees to sell some of its hot air (sorry, ëcarbon credits') to the EU. And

this is more likely if there is no binding commitment post-2012, because

Russia will then not have to worry so much about banking credits for future

use. But the question remains: since Kyoto will achieve nothing but economic

harm, why implement it at all?

The EU has now made it clear that it is unwilling to sacrifice itself unless

others agree to sacrifice themselves too. But so far the EU has failed to

persuade others of the wisdom of such a mutual suicide pact. Some activists

have called for the imposition of restrictions on imports of industrial

goods from countries that have not ratified Kyoto - to try to force

compliance with the EU's wishes. Such restrictions would not so much level

the playing field as they would hobble a larger proportion of the players.

Product-specific import taxes or similar restrictions would probably not be

permissible under World Trade Organisation rules. Certainly they could not

legitimately be applied to goods imported from countries - such as China and

India - which are not bound by emissions restrictions under Kyoto. In any

case, such restrictions would raise the cost of goods for European consumers

and producers, ultimately harming everyone.

As Kyoto's noose begins to tighten, we can expect increasing calls from

unions and others across the EU to give up on the whole charade. But with

the EU's emission trading scheme set to begin in January, would it not be

safer - and more cost effective - to change tack now?

The author is Executive Director of International Policy Network and a

Visiting Professor at the University of Buckingham