Kyoto and Beyond

The international agreement concluded in Kyoto, Japan, during the first two weeks of December 1997 to limit greenhouse gas emissions to forestall climate warming is variously portrayed as a success or a failure. It was both. The road to Kyoto was pitted with political, economic, and scientific potholes. It is now on to Buenos Aires in November 1998 for another Conference of the Parties to the Framework Convention on Climate Change. To what end?

The United States had proposed that by the period 2008-2012 the world’s nations reduce emissions of greenhouse gases, principally carbon dioxide, to 1990 levels. Binding commitments from the participating nations were sought. As if to confirm the need for binding agreements to reduce greenhouse gas emissions and the futility of voluntary efforts, the U.S. Department of Energy announced two months before the Kyoto meeting that for the six-year period 1990-1996, the United States exceeded by 8 percent its commitment to reduce emissions to the 1990 level by the year 2000.

The position of the United States was carefully crafted over the course of 1997. The administration walked a tightrope of compromise among the diverse domestic and international constituencies affected by and having an interest in the outcome. It was a position that lent itself to criticism by advocacy groups on all sides. An international agreement of sorts was indeed reached in Kyoto, but on terms hardly favorable to the United States. It required the last-minute, hurried intervention of Vice President Gore on a 19-hour mission to Kyoto. The vice president injected sufficient flexibility into the negotiations to bring the nations at the conference to consensus on some issues, but a price was paid.

The agreement at Kyoto was a success in that it preserved the international momentum to continue to address the projected climate warming. The follow-up meeting in Buenos Aires in November 1998 will address many unresolved issues. However, the substance of the agreement failed to meet U.S. objectives. The United States was forced to compromise on some of its most critical concerns. Although the United States achieved a vague agreement on the use of market mechanisms for achieving greenhouse gas emission reductions, it had to agree to reduce greenhouse gas emissions to 7 percent below the 1990 level, a deep reduction from its original proposal. It obtained agreement on binding commitments only from industrialized countries. The developing nations insisted on and were granted a free ride. Further, the agreed reductions varied from country to country, a concession necessary to bring the various nations into agreement. For example, Australia was able to negotiate an increase in its emissions of 8 percent above the 1990 level.

The U.S. debate

The U.S. position was the result of a contentious debate. President Clinton had set the stage on several occasions. In a speech to a special session of the United Nations (UN), he stated that “the science is clear and compelling.” The administration found the economics acceptable. After all, at a January 1997 meeting of the American Economics Association, the economists at the meeting, led by Nobel laureates Robert Solow and Kenneth Arrow, declared, “as economists, we believe that global climate change carries with it significant environmental, economic, social, and geopolitical risks and that preventive steps are justified. Economic studies have found that there are many potential policies to reduce greenhouse gas emissions in which total benefits outweigh total costs.” A U.S. government interagency committee later also concluded that the economic costs would be acceptable. After the Kyoto meeting, an official assessment by the White House was announced in March 1998 by Janet Yellen, chair of the Council of Economic Advisors, declaring that the economic costs would be modest.

The country was exposed to an intense public debate. It was bombarded by a barrage of television commercials, both pro and con; by an outpouring of editorials; by actions of the Congress; and by press reports of conflicting statements from scientists. Congress indicated that it would not ratify any Kyoto agreement that did not include all the nations of the world. In a 95-0 vote in July, the Senate approved a resolution urging the Clinton administration not to sign the Climate Change Pact if developing countries were exempted. The response of the administration was that the Kyoto Treaty would not be submitted for ratification until developing nations could be included in some form of agreement.

Earlier in June, 132 members of the Business Council issued a strong statement that urged the Clinton administration “not to rush to policy commitments until the environmental benefits and economic consequences of the treaty proposals have been thoroughly analyzed.” A month later, Chrysler chairman Robert Eaton expressed the view of the automotive industry in an editorial in the Washington Post: “In response to uncertain science and pressure from environmental activists and from countries eager for our jobs and living standards, the Clinton administration is poised to agree to a UN Global Warming Treaty that will compel us to curtail fossil fuel energy use by 20 percent, one certain consequence of which would be a decline in the country’s economic growth by a similar amount.” Ford CEO Alex Troutman joined in declaring that human effects on climate were very uncertain and that a mass exodus of U.S. factories would likely result from the nation’s commitment to deep emission reductions of the magnitude suggested by the European Community.

Labor organizations such as the United Brotherhood of Carpenters and the United Mine Workers joined business organizations in sponsoring critical newspaper advertisements. These powerful forces, concerned about the consequences of significant greenhouse gas reductions for the U.S. economy and jobs, joined in the strong cautionary warning.

Industry, however, was not monolithic in attitude. The president of the Reinsurance Association of America, in support of the administration, summed up the threat this way, “the insurance business is first in line to be affected by climate change; it would bankrupt the industry.” Breaking ranks with most of the fossil energy industries, John Brown, CEO of British Petroleum, the world’s third largest oil and gas company, in a speech at Stanford University, expressed the view that there was enough evidence that pollution was contributing to global warming to begin to take precautionary action. He was later joined by other petroleum industry leaders of such companies as Royal Dutch Shell and Sun Oil.

Many of the public interest groups with deep concerns about environmental issues, as well as the environmental organizations within the administration, weighed in. The vice president, whose book Earth in the Balance had become a national primer on the catastrophes facing the planet in the absence of action on climate warming, was convinced that action by the United States was essential. His views were buttressed by the report of the Intergovernmental Panel on Climate Change (IPCC). This international group of scientists, operating under the aegis of the World Meteorological Organization and the UN Environment Programmme, had been charged with periodic assessments of the status of our knowledge about climate change and its possible environmental and economic effects. Although this group recognized the uncertainties in their projections and assessments, it nevertheless concluded that the “balance of evidence” suggested that the effects of humanity on climate change had been detected. Its views and conclusions became the basis for governmental decisions throughout the world. The IPCC provided a powerful confirmation of the fears of the administration.

A cadre of scientists led by Fred Seitz, past president of the National Academy of Sciences, Richard Lindzen at MIT, and Fred Singer of the Science and Environmental Policy Project continued to question the warming projections of the climate models and claimed that there was little evidence in the data for such a warming. In fact, Singer repeatedly emphasized that the surface temperature records that indicated a global warming were contradicted by the satellite temperature measurements of the past two decades. Nevertheless, most of the world’s experts believe and worry that substantial anthropogenic global climate change will occur, although there is much uncertainty as to the timing, intensity, and regional effects.

A strong precautionary stance was urged by environmental groups and others. Jessica Matthews, then a sSenior fellow at the Council on Foreign Relations, expressed it best when, in an op-ed in the Washington Post she said, “It is time and past to move beyond the jokes, the sneers, the name calling, the know-nothingism, and the false controversies and on to the real choices. The solid body of scientific evidence obliges us to ask what we’re going to do about global warming and how much we are willing to pay.” The backlash to the industry views, as expected, came also from environmental advocacy groups such as the Natural Resources Defense Council and the Council for an Energy Efficient Economy. In response to the views of automotive executives, the officials of these organizations countered that “rather than relying on bad science and economics to deny responsibility, major companies like Chrysler should acknowledge that global warming poses a serious risk. Their products are contributing to the risk, and with the risk comes an opportunity-industry should seize this opportunity and support a strong agreement to protect the planet in Kyoto.”

The battle reflected the struggle within the administration. Joining the battle were the National Economic Council and the Treasury Department, urging caution because of the economic costs to the country. Deep emission reductions would necessitate reducing energy use by 25 to 35 percent below what was projected for the year 2010. On the other side were the agencies of the government charged with environmental quality. Katie McGinty of the Council of Environmental Quality voiced the vice president’s views. Undersecretary of State Stuart Eisenstadt, who ultimately replaced Undersecretary Tim Wirth as U.S. chief negotiator, played a strong role. Compromise was inevitable, and the U.S. position reflected that.

Another consideration was the reaction of other governments to the administration’s proposals at a preparatory meeting in Berlin in October. As reported in the Washington Post, Germany’s Environment Minister, Angela Merkel, called the U.S. proposal “disappointing and insufficient.” The Japanese Prime Minister, Yutaro Hashimoto, stated that “there might have been room for further efforts.” Peter Jorgenson, the spokesman for the 15-nation European Union’s executive committee, is reported to have summed it up by saying, “it is simply not good enough. There must be something better coming from the White House if the United States wants to face up to its global responsibilities.” As might be expected, China, leading the developing world, called on the rich countries to cut their emissions by 7.5 percent below the 1990 level by 2005, and by 35 percent by 2020-an impossible goal.

The controversy was played out before the general public through advocacy advertisements in the mass media, accompanied by public relations campaigns. The television spots were particularly graphic and focused on the unfairness and unworkability of any treaty that did not include all nations and on the economic impacts, illustrated by estimated job losses and higher gasoline prices. The spots in favor of a treaty appealed to the need for wise stewardship of Earth to forestall unacceptable consequences and the overwhelming scientific support for the reality of climate change. Newspaper ads conveyed the same general themes.

The administration, no stranger to the importance of public relations in achieving support for its ideas, mounted an unprecedented campaign to convince key constituencies that the threat of global warming is real. It marshaled a group of scientists led by Nobel laureates Mario Molina, Henry Kendall, and F. Sherwood Rowland, in what the White House called an East Room Roundtable, to support its position. The president indicated that failure to act could lead to widespread ecological disasters, including killer heat waves, severe floods and droughts, an increase in infectious diseases, and rising sea levels that could swamp thousand of miles of coastal Florida and Louisiana. White House forums were organized in many regions of the country. Some brought together the business, industrial, and labor leadership; others assembled experts on science, technology, economics, and the environment.

The White House even organized a TV weather forecasters’ conference. The president, vice president, and half a dozen leading climate scientists undertook to brief the forecasters on the climate issues and the overwhelming scientific opinion supporting action. The administration offered as an enticement the venue of the White House grounds as a backdrop for the TV weather forecasts. The president indicated that he was not seeking to influence them but was effective in doing just that. He said, “I want to try to get America to accept the fact that the majority of scientific opinion, the overwhelming majority of scientific opinion, is accurate. I want us to make a commitment, therefore, to go to Kyoto with binding agreements.”

The public was treated to an outpouring of news reports that could only have added to the confusion. Sensational headlines in the press, although in many cases based on legitimate scientific studies, were part of the cause. The great blizzard along the east coast of the United States in January 1996 was attributed to global warming. One report cited evidence that the spring season was one week shorter than in the previous decade across much of the northern hemisphere because of climate warming. Late in the 1996 hurricane season, Hurricane Fran hit North Carolina. The headline explained that this was just a harbinger of what could be expected from global warming. The hurricane season of 1997 seemed to contradict these views; it was noteworthy for the paucity of storms. The race to be the first to claim that the average temperature of a year was the warmest on record led to conflicting estimates for 1995. The silliness was emphasized by reports that butterflies were fleeing their normal haunts because of global warming.

The Kyoto effect

A fair question is whether the agreements reached in Kyoto will lead to actions necessary to arrest climate warming. For this we must turn to science, and the answer is clearly no. At most, they are a small step in the right direction. Most scientists agree that the emissions rollback contained in the Kyoto agreement will not do the trick. It will succeed only in delaying the projected climate warming by tens of years. Sweden’s Bert Bolin, the highly regarded chairman of the IPCC, in a post-Kyoto article in Science magazine declared, “If no further steps are taken during the next ten years, carbon dioxide will increase in the atmosphere in the first decade of the next century essentially how it has done during the past few decades.” In 1990, six billion tons of carbon were being emitted to the atmosphere, of which roughly 50 percent remained resident, thus continuing the increase in carbon dioxide concentrations. Rollbacks in carbon dioxide emissions of 60 to 80 percent would be necessary to stabilize the carbon dioxide concentrations, and presumably the climate, at present levels.

Another fair question is the acceptability of the economic costs of the greenhouse gas emission reductions agreed to at Kyoto. Here opinions differ widely. To make economic projections, it is necessary to specify not only the effects of a climate warming on all human activities but also to assume the size and distribution of the global population, the rates of economic growth of the various regions of the world, the rates and types of technological changes, and the effectiveness of economic policy measures such as taxes and emissions trading regimes. Economists deal with the unknowable. For instance, changes as dramatic as the collapse of the Berlin Wall and the present economic difficulties in East Asia were completely unforeseen. Economists can devise scenarios of the future economic and technological global systems only on the basis of present circumstances and long-term trends. Nevertheless, economic projections are valuable because they provide a context for policy action.

More than a dozen government and private groups have projected economic costs in various ways. Estimates vary depending on assumptions that are incorporated in the economic models. According to the World Resources Institute, there is “little apparent consensus.” A government Interagency Analytic Team considered a range of economic models, as has the World Resources Institute. Both concluded, on the basis of their own models, that the costs would be substantial but probably acceptable, and under the most favorable assumptions could have a positive effect on the economy. The models included assumptions about cross-border trading of emission rights to reduce economic losses; accelerated technological developments to reduce emissions; and the use of taxes on carbon or other sources of revenue such as the auctioning of emission permits for federal budget reduction, thus reducing the need for federal borrowing and indirectly releasing private investment capital.

According to some modeling studies, the price of carbon would increase by hundreds of dollars per ton. The resulting economic losses would range between 0.2 percent and 2.4 percent of gross domestic product. The Charles River Associates, a private group, indicated in an economic study for the automotive industry that the United States would suffer a 1 percent loss in total economic output. The conservative Heritage Foundation found that U.S. drivers could look forward to a 70-cent-per-gallon rise in gasoline prices and a loss of 100,000 jobs in the steel industry alone. The White House assessment is a 4- to 6-cent increase in the cost of a gallon of gasoline and a 3 to 5 percent increase in the cost of electricity. Whatever the economy-wide losses might be, energy-intensive industries would be severely hit. The vice president, in a press conference, said that he was convinced that the U.S. public would accept the needed measures. Because of the wide range of estimates of economic consequences, the United States and other countries would, in fact, be carrying out a massive experiment with the U.S. economy with unknown results.

Useful actions

Because the agreed-on reductions in carbon dioxide emissions cannot “stabilize” climate, even under the most favorable and economically viable scenarios, the nations need to rethink the course they are on. They need to face up to some well-understood facts about climate and society.

1. Global climate responds to the total concentration of greenhouse gases in the atmosphere. Warming is independent of the temporal path to these concentrations.
2. Adaptation by humanity has historically been the central means of coping with climate change. That will continue to be the case in the future if warming occurs.
3. When costs and benefits are disassociated, costs will be borne reluctantly and benefits will attract free riders. The global benefits of arresting climate warming are not seen as outweighing local economic and social penalties.
4. Energy consumption and greenhouse gas emissions are in large part a function of global population. Population stabilization can have an enormous impact on emissions reduction.
5. Greenhouse gas-induced climate change is principally an energy problem. Reducing the carbon dioxide released in the combustion of fossil fuels requires increased efficiency in energy use and “decarbonization” of energy sources.
6. Only through the development of new and improved energy technologies can reductions in greenhouse gas emissions of the necessary magnitude be achieved without significant economic pain.

These principles suggest a range of policies. The first principle suggests that it is preferable as a policy matter to invest in a more efficient and less carbon-dependent energy system now rather than incur near-term economic costs of greenhouse gas reduction with existing technologies.

The second principle suggests that even if climate change is inevitable, adaptation will in large part cope with the dislocations it causes. Rich nations with considerable resources will adapt more easily than poor nations. Modes of adaptation that require substantial investments will be supported by nations that can afford them, and means will need to be made available to less capable countries. Society has always adapted to climate change as part of a normal response. Dams are built to prevent floods and provide water in arid regions. Seawalls are erected to prevent coastal flooding. Breeding and genetic engineering of crops and animals enables biospheric responses to harsh environments. Actions are taken when climatic reality intervenes.

Population stabilization is essential to climate stabilization. Fortunately, there is good progress to report. The fertility of women in the developing world has been decreasing. Education of women and the application of reproductive technologies are the cause. The fertility of women in developing countries has dropped from six to four births per female in the past several decades. Studies of population demographics by the UN and the International Institute for Applied Systems Analysis in Laxenburg, Austria, now project the possibility that the world’s population will stabilize between 8 billion and 10 billion people.

Finally, there is a need for a global energy technology strategy and a program to implement it. Developments in energy technology show promise, and there has been a gradual awakening to this fact. In September 1997, President Clinton’s Committee of Advisors on Science and Technology, through a subcommittee on energy R&D for the 21st century chaired by John Holdren, laid out wise and far-reaching proposals for research and development and economic measures to facilitate and stimulate investments in energy technologies. In his 1998 State of the Union Message, President Clinton effectively endorsed these suggestions. Five national laboratories of the Department of Energy (DOE) have advanced a road map for U.S. carbon reduction. DOE’s Pacific Northwest National Laboratory is developing a global strategy in conjunction with several private corporations.

The multiplicity of technologies that are available, under development, or in the conceptual stage is impressive. For mobility applications, electric hybrid engines that combine gasoline or diesel engines with electric motors are coming into commercial use. Toyota is already marketing a commercial hybrid in Japan. Fuel cell technology is advancing rapidly. Propulsion systems are now proposed that use hydrogen derived from hydrocarbon feed stocks from which carbon is stripped and sequestered as carbon dioxide.

Efficient and low-carbon energy-generation technologies for power plants are in operation throughout the world. Combined cycle gas turbines that are far more efficient than conventional coal- or oil-fired plants are now widely used; they offer the opportunity for distributed generation, thus relaxing dependence on modern electric grid systems. The Electric Power Research Institute is presently developing an electricity R&D road map that looks decades into the future, seeking low-cost, highly efficient, and environmentally sustainable energy systems.

Nuclear power now generates 17 percent of the electric power in the United States and is moving to claim ever larger shares of the world generation market. Safety fears can largely be overcome by new designs, and even the disposal of radioactive wastes appears doable. Although it is a half century away by most estimates, fusion power is advancing and the International Thermonuclear Energy Reactor program reflects the international interest in fusion. If and when commercial fusion is successful, totally new possibilities for greenhouse gas reduction will present themselves.

Renewable energy sources-wind, photovoltaics, hydropower, and biomass-are now becoming cost competitive. Finally, the efficiency of end products has been and will continue to be increased. Refrigerators, lighting fixtures, and electrical appliances are on the proper trajectory.

If climate warming indeed poses a serious threat to society, the United States and other nations should adopt policies to restrain greenhouse gas emissions through technology and forego the economic costs of the present trajectory. Such measures make economic sense even in the absence of a global warming threat. The United States should use its vast political, economic, and technological power to stimulate and lead a truly international assault on the development of energy technologies. This course makes good planetary sense.