Thomas Gale Moore
Senior Fellow
Hoover Institution
Stanford University
When all is said and spun, the truth about Kyoto is that the U.S. delegation agreed to something in theory that Congress would never put a pen to in practice: Namely, a treaty that severely restricts our own emissions while excusing outright the emissions of less efficient, more polluted developing nations.
So where do we go from here? The Clinton Administration knows the Senate will refuse any treaty that fails to include China, so it is not going to send the agreement up to Capitol Hill for ratification. The Administration's stated intention is to persuade Third World countries that it is in their interest to agree to restrict emissions at some time in the future. Administration officials cling to the unlikely possibility that the major developing countries will sign on at Buenos Aires in November. But don't bet on it. The likelihood of securing the approval of the "Group of 77 plus China" (a group that actually includes virtually all Third World countries, numbering many more than 77) is smaller than the chance Saddam Hussein will invite Bill and Hillary to dinner.
At Kyoto in December, the Chinese delegate emphasized his country's "no, no, no" policy: No to any restrictions, no to any agreement to future restrictions, and no to including in the treaty any reference to voluntary restrictions. Members of the Group of 77 echoed the Chinese position. The agreement finally signed in Kyoto reflected China's adamant stand, going so far as to drop a proposed paragraph that would have specified the right of nonsignatories to join the agreement at a later date.
Doing it anyway
At the Kyoto conference, Vice President Gore promised that,
even if no agreement were signed at all, the Administration still would act to
curb greenhouse gas emissions. Even though the treaty failed to achieve
"meaningful participation by major developing nations," several liberal members
of the Congressional delegation urged the Administration to take steps to
reduce energy use in the United States.
How will they do so? The White House has ruled out energy taxes, but a full-scale assault on the American way of life seems in the cards. The first step will probably be to apply Corporate Average Fuel Economy (CAFE) standards for passenger cars to minivans and sports utility vehicles (they are now treated as light trucks, which must meet less stringent mileage standards).
Already, news articles are appearing that suggest these "inefficient" vans lead to carnage on the highways. Because these multipurpose vehicles are bigger than contemporary passenger cars (already reduced in size to meet CAFE standards), an accidental meeting between the two is rarely pleasant for those in the smaller vehicle. But what these articles leave unsaid is that whatever a small car comes into violent contact with-a large truck, a bus, or even a tree or rock-means an uncertain and very short future for its passengers. By applying strict fuel standards to SUVs and minivans, the Administration will force manufacturers either to downsize them or to stop selling them entirely.
Government officials probably will claim that such a measure will save both lives and energy, but it's unlikely to do either. The reason is simple. Smaller vehicles make passengers more vulnerable. Even smaller SUVs will find the contest between themselves and a tractor-trailer unequal. What's more, fewer passengers per car leads to more cars on the road. Minivans and other larger vehicles have a distinct advantage: They can carry a large family or group of friends. Eliminating or downsizing such vehicles will simply mean that, for many outings, people will need to take two autos rather than one, boosting gas consumption. And since smaller, more fuel-efficient vehicles are cheaper to drive, more autos will crowd the highways, adding to fuel use.
Stricter CAFE standards
After changing the road rules for larger vehicles, the
second step will probably be to alter the policy for smaller cars, boosting
CAFE standards from the current 27.5 miles per gallon to something like 45 mpg
over an eight- to 10-year-period. But the bureaucrats must give the auto
companies time to meet the tightening standard, so the first step could not be
mandated before 2002. Thus the nearly two-thirds boost in mileage efficiency
probably cannot be totally in place before 2012, the final year for reducing
greenhouse gas emissions to 7 percent lower than 1990 levels.
Even with a new standard in place for new cars sold in 2012, it will take quite a number of additional years before such a standard could become the norm for the vehicle fleet. Some people may select a new car off the showroom floor every few years, but there are still many customers cruising the used car lots dotting the American landscape. Thus more stringent CAFE standards cannot contribute significantly to reducing U.S. greenhouse gas emissions over the next 20 years, but they can add to highway deaths.
What else can the White House do to reduce greenhouse gas emissions? Without energy taxes, it would probably find it impossible to cut significantly even the growth, much less the level, of emissions. New energy-efficient standards for appliances, homes, factories, and business establishments will be too slow, too inefficient, and save too little in fossil fuels to do the trick. In his Oct. 22 speech, the President called for spending a billion a year on research and development to promote energy efficiency and cleaner energy sources. If appropriated, this paltry sum will undoubtedly be frittered away on pork, just as Jimmy Carter's synfuel program wasted billions subsidizing such starving companies as Exxon.
Their trump card
The White House may be counting on two other steps to meet the
target: trading emissions reductions and collecting energy fees. The
Environmental Protection Agency has indicated it might impose such fees without
the approval of Congress. Now, I'm not a legal scholar, but I believe that the
Constitution confers the taxing power on Congress, not the EPA. Fees for
entering the national parks are one thing; "fees" that would boost gasoline
prices by 50 to 60 cents per gallon, double electricity costs, and sharply
increase heating oil charges are quite a different matter.
At Kyoto, U.S. diplomats insisted-over the objections of Third World nations and the Europeans-on the right to trade emissions. Since the states of the former Soviet Union have witnessed a meltdown of their major industries since 1990, they have a potentially huge amount of emission reductions certificates they could sell to American industry.
If Clinton and his EPA can specify that carbon dioxide is a pollutant under the Clean Air Act, they will be able to impose limits on power plants and other major industrial energy-users that will force them to purchase these certificates from others-particularly Russia. Buying emission reduction certificates from Eastern Europe and perhaps from some Third World countries would not reduce emissions significantly in either the industrialized world or elsewhere. As a scheme to halt global warming, it is a sham. It will, however, produce a huge and expensive international bureaucracy to monitor the transactions, impose an implicit tax on industry, especially energy-intensive industry, and will significantly raise gasoline taxes, electricity costs, and heating and cooling costs for all Americans. It will cost Americans income, jobs, and prosperity.
The only benefit, if you consider it a benefit, will be to extract some financial resources from American companies and transfer them to Russia, the Ukraine, Rumania, and the Czech Republic. Two Brookings Institution economists have estimated that the U.S. proposal of tradable certificates would require that U.S. companies spend around $27 billion or more annually to purchase from former Soviet bloc countries their rights to emit carbon. That sum is nearly four times the U.S. government's annual budget for foreign economic aid.
You heard it here first
Over the next few months, we can expect to see a series
of regulatory steps designed to reduce energy use; stricter CAFE standards and
new minimums for energy efficiency for a variety of products, processes, and
production; perhaps some new fees, but most likely an expansion of the existing
air pollution trading system (now applied to sulfur emissions but probably soon
to encompass carbon dioxide).
The effect will be to impose a heavy tax on American industry. Since major developing countries are exempt from this nonsense, barriers to their imports will be necessary to make the system work. Down that road lies slow or no growth, perhaps even a major recession or a depression. The current low-inflation, low-unemployment world will become a distant, pleasant memory of the good old times.
Reference:
McKibbin, W.J. and P.J. Wilcoxen, 1997, A better way to slow global climate
change, Brookings Policy Brief No. 17.