Kyoto Protocol - US missing the boat?

[Buffy]

[Warning: this is another Economics thread! The "is global warming happening" and "is global warming bad" discussions can stay over in Earth Sciences!]

A lot has been made about the US refusing to sign up for the Kyoto protocol, with the neo-cons and some stuck in the mud big businesses whining that it would be a drag on the US economy. I think the conservatives aren't being creative enough. Its been proposed that under some of the provisions of the Kyoto treaty that rich nations could trade CO2 and other emissions quotas and there could be *significant* money to be made off of selling and arbitraging these quotas.

Given how greedy our fearless leader's friends are, how come they aren't rushing into this? Will the US give up the next really big commodity trading market to Europe and Asia?

Cheers,
Buffy

[nemo]

I must admit a significant level of ignorance on this topic... I've heard that Kyoto is all about reducing the greenhouse gasses in the atmosphere, but never really dove into the specifics.

After reading the initial post in this thread, I surfed over to the U.S. Department of Energy's page on the matter (http://www.eia.doe.gov/oiaf/kyoto/execsum.html). I didn't even make it through the executive summary. From what I caught while I wasn't distracted by things like dust settling on my desk, everyone has decided that the greenhouse effect is probably bad, but nobody has set many rules for the long term.
My initial take on the U.S. reaction (or lack thereof) is that while we are moving toward clean energy, a definitive plan for the implementation of Kyoto-like standards has not even been started. If the U.S. were to announce tomorrow that it was going to implement this Protocol, without this plan (ala "No Child Left Behind") we would see significant economic impacts.
The coal industry, and the power generated by it (presently 50% of total U.S. energy [http://www.eia.doe.gov/neic/quickfacts/quickcoal.htm]) would die on the vine.
Driving a car would mean using an alternative fuel solution that would not be widely supported, or facing exponentially higher gas prices (kind of like the rest of the world).
Higher fuel costs mean that it costs more to get things to market - due to shipping costs a gallon of milk that used to cost $2 now costs $3.50 (I'm making that number up for the purposes of this discussion - I have no scientific data on the price of milk relative to the price of gas).
Applying the fuel / food cost relativity paradigm to every other consumable item that needs to be shipped from the producer to the consumer gets to be a bit disconcerting; of course, the idea of beachfront timeshares in Antarctia is a bit disconcerting as well.
I suppose my thoughts on the Kyoto Protocol at the moment can be paraphrased into: we need a plan, not an ideology.

[alxian]

china needs to be focibly made to conform to the kyoto protocol.

they produce more pollution than can be tolerated if other nations have to clean up and stay clean.

[Buffy]

Originally Posted by nemo

After reading the initial post in this thread, I surfed over to the U.S. Department of Energy's page on the matter... From what I caught while I wasn't distracted by things like dust settling on my desk, everyone has decided that the greenhouse effect is probably bad, but nobody has set many rules for the long term.

Unfortunately of course, in line with the current administrations views on the topic the DOE is charged with downplaying and dismissing Kyoto, so their site is probably not the best one to check.

Originally Posted by nemo

My initial take on the U.S. reaction (or lack thereof) is that while we are moving toward clean energy, a definitive plan for the implementation of Kyoto-like standards has not even been started. If the U.S. were to announce tomorrow that it was going to implement this Protocol, without this plan (ala "No Child Left Behind") we would see significant economic impacts.

Both sides of this point are argued by the detractors, because Kyoto takes into account both the existing situation and the existing technologies that could be brought to bear. Although detractors would like to make you think so, this thing was not written by a bunch of tree-huggers (in fact the true tree-huggers are all yelling "sell out!"). The main elements are first, greenhouse gas quotas that are based on existing output and "targets" to be achieved over time that recognize that no one can turn on a dime: Kyoto actually allows more gases next year than this year, its a reduction over time. Second, the reductions not only are based on projections of what could be done with existing technology, but they recognize that it will be easier for some to implement than others and therefore it proposes a trading mechanism to allow countries to buy and sell their quotas to others. This provides a critical economic incentive to participate and is what econmists point to as the only way to get the thing to work at all. Economists would also tell you that there'd be winners and losers among industries, but my main argument is if you looked at FOW (friends-o-Dubya), there'd be just as many winners as losers. Its interesting that you bring up No Child Left Behind, because that's a perfect example of how the adminstration could handle this and come out smelling like a rose: put together a huge overblown and toothless plan with great fanfare and forget to fund it.

Originally Posted by nemo

The coal industry, and the power generated by it would die on the vine. Driving a car would mean using an alternative fuel solution that would not be widely supported, or facing exponentially higher gas prices (kind of like the rest of the world). Higher fuel costs mean that it costs more to get things to market...

These are relevant questions to the "plan," and obviously if it worked out this way, it would be way sucky. Kyoto, being a plan by diplomats to provide a full-employment act for diplomats, have put lots of holes in the treaty to allow for modification, and because of the fact that major countries like China may not sign up, not even Al Gore would have shut down the coal industry. In fact, the coal industry makes the assertion (which is backed up by environmentalists), that coal will do less damage to the environment in producing electrical power for electrical vehicles than any other mechanism. We might however see a few more taxes on gasoline which would put the pinch on Hummer owners.

On the trading of gases as a commodity, there's a *huge* opportunity: America sends lots of money to poor nations in return for nothing. On the other hand, these poor nations are starting out with excess quota that they can sell--something they demanded in the treaty because only by polluting a lot now can they catch up economically. Now if the US switched to passing this money out by buying excess quota, it would cost consumers no more, and there'd be more time and resources to invest in new technologies that Kyoto does not really take into account, which could be used to meet *everyone's* quotas, with the US selling the technology to everyone. Its a greedhead-capitalists dream. My question keeps coming back to: Why isn't the administration going for this when they're having to take so much flak on it?

Originally Posted by nemo

of course, the idea of beachfront timeshares in Antarctia is a bit disconcerting as well.

It's prolly risky now, but it may not be to far in the future that we need to start investing in those timeshares!

Cheers,
Buffy

[bumab]

Originally Posted by Buffy

Why isn't the administration going for this when they're having to take so much flak on it?

Good question. It might be long term thinking on the FOW's (nice!) part. If they plan on building factories and infrastructure in those under-developed countries in the near future, they are going to need to pollute (as it were). So, the idea of buying back pollution tickets is a short lived prospect.

Also, as those countries get devloped, the pollution waiver market would dry up, forcing the US to get it's act togther eventually. Maybe that's got something to do with it- although this would show incredible foresight from the Bush administration, not known for it's long term planning abilities

[Buffy]

Originally Posted by bumab

If they plan on building factories and infrastructure in those under-developed countries in the near future, they are going to need to pollute (as it were). So, the idea of buying back pollution tickets is a short lived prospect....Also, as those countries get devloped, the pollution waiver market would dry up, forcing the US to get it's act togther eventually.

That's kinda my point: short term get em to pay us back for the cash we give em, then hit them up to have to pay for our new low-emissions technology when they've hit their quota. Where's Dr. Evil, Mojo Jojo or Auric Goldfinger when you need them? Muhuhahahaha!

Cheers,
Buffy

[bumab]

oh I get it. Wow, that is evil. And fiendishly clever. why HAVEN'T they started that?

[kaelcarp]

I think the main concern that the administration and its supporters have about Kyoto is the strictness of it. I'm basically going off of third-hand readings here, but the basica idea I get is that they are concerned about the short-term costs of cleaning up the environment. A lot of big businesses support the administration, so it might be unwise (politically) to adopt a plan that would hurt them economically.

It's really all about politics. If the US was really concerned about fixing up the environment to the exclusion of all other interests, it would sign the treaty in a flash. But there are always other forces influencing things.

[Buffy]

Originally Posted by kaelcarp

It's really all about politics.

Yup. BUT its moving: Reuters (this picked up from yesterday's salon.com) reported James Baker, Bush XLI's Secy o State said this the other day:

Baker...told the members of the Houston Forum Club last Thursday that an "orderly" change to alternative energy is needed: "It may surprise you a little bit, but maybe it's because I'm a hunter and a fisherman, but I think we need to a pay a little more attention to what we need to do to protect our environment. When you have energy companies like Shell and British Petroleum, both of which are perhaps represented in this room, saying there is a problem with excess carbon dioxide emission, I think we ought to listen," Baker said.

But before anyone starts celebrating Baker as a closet greenie, he also noted that he "agreed with the decision not to join Kyoto, calling it 'a lousy treaty' because it did not include China and India."

Although its likely that India and China would go along if they didn't have the US as an excuse to point to. Its notable that big industry is starting to see though that they have to move, although the mentioned companies are *European* and are from Kyoto signing countries. If the US companies don't hurry up, they're going to fall way behind (and it won't be something they can blame the teacher's unions for!).

Cough,
Buffy

[C1ay]

As long as any nations are exempt it is an ineffective effort. Dirty processes will be exported to countries like China and India that are exempt since this would be cheaper than cleaning up the processes to reduce the emissions the protocol is designed to reduce. This would effectively just export the jobs associated with those processes to China and India without reducing the emissions. At this point I'd say China and India are missing the boat.