[lit-ideas] Re: If Not the US, Who?

  • From: Eric <eyost1132@xxxxxxxxxxxxx>
  • To: lit-ideas@xxxxxxxxxxxxx
  • Date: Fri, 24 Mar 2006 05:12:46 -0500

Here's an extract of a review of David G. Victor's _The Collapse of the Protocol_, which outlines the case that Carbon Trading was key to the US decision to walk from Kyoto.



...the Kyoto agreement was bound to fail because it wasn’t a serious agreement to start with: “More than anything, negotiators from the advanced industrialized countries wanted a deal — any deal — that would give the impression that their governments were taking global warming seriously… the Protocol’s strict short-term targets give the appearance of serious action but belie the reality that no major government has a viable plan for compliance.” (pp. 26, 109).

Victor argues that the whole idea of setting limits on greenhouse gases is wrong-headed because governments cannot plan to meet them. Emissions vary with economic growth and technological change, factors that are — according to Victor — beyond the control of governments. Therefore nations, such as the US, only agreed to strict limits because they would be allowed to rely on emissions trading.

The Hague talks collapsed when agreement could not be reached over the extent to which countries should be allowed to use emissions trading and forests as carbon sinks to offset their greenhouse gas emissions. Agreement could not be reached because some countries believed that the excessive use of trading and offsets would enable countries like Australia and the United States to continue increasing industry-based greenhouse emissions year after year.

<snip>

...the infrastructure of developing nations is still being developed, and emissions trading could allow the US to take advantage of the cheaper emissions reductions that could be achieved elsewhere by paying for emissions permits that have been issued to other countries. This would reduce the cost of achieving emissions reductions in the US by ten times, says Victor.

However whilst the developing countries are not part of the Kyoto Protocol they would not be part of any emission trading scheme, and this could well be why the US has been so insistent on the need for developing countries to participate.

<snip>

Victor’s book sets out to show that the Kyoto targets cannot be met even with emissions trading. This is because of difficulties associated with allocating permits, monitoring compliance, and enforcement. The problem of allocation of permits becomes particularly difficult if developing countries are included. The usual way of allocating permits for emissions trading within a country is by grandfathering. Grandfathering involves allocating permits to firms on the basis of their past emissions. Firms that polluted more in the past would have larger shares. If the permit that a company is allocated were less than their actual emissions, such a firm would have to either try to reduce their emissions or buy extra permits. Similarly they would be able to sell those they don’t need if they reduce their emissions below what they are permitted to emit.

Grandfathering favours existing firms and disadvantages new firms wanting to set up. In order to establish itself, a new firm must buy up enough pollution rights to cover its emissions. Alternatively the government can increase the amount of rights available and give the new firm an allocation. This latter option will increase the amount of pollution and defeat the purpose of trying to reduce overall emissions.

In the case of international emissions trading between nations, grandfathering would favour the most industrialised countries that already put out the highest per capita emissions, giving them the largest shares and not allowing developing countries enough to develop with. The question of how the allocation of permits is made is therefore a highly charged political question. The fairest way would be to allocate each country an equal per capita share, but this would be vehemently opposed by industrialised nations.

<snip>

This is where Victor’s second objection comes in. He argues that international law is notoriously weak, and there are no strong institutions that could compel nations to comply or remain within the Protocol. If a nation doesn’t like its allocation, or finds that it is too expensive to buy the permits it needs, then it can simply default or withdraw with little penalty. Currently the Protocol prevents countries from imposing “binding consequences” (p. 18).

An additional problem would be monitoring each country to ensure that it is only emitting the gases it is allowed. Governments have enough trouble monitoring individual plants, and usually resort to self-monitoring. In the case of emissions trading, Victor points out that it is the sellers of permits that would be liable for their own compliance: “This strange scheme would give sellers a strong incentive to flood the market with bogus permits.” (p. 18).

The current Protocol already has the potential to enable “phoney” or “phantom” emissions reductions without any need for cheating. This would occur, for example, if emissions credits were bought from Russia and other eastern European countries that are in economic decline. Russia’s economic decline has meant that its carbon dioxide emissions have decreased by some 30% below 1990 levels. Now countries such as the US and Japan are looking to buy the rights to those emissions which Russia is unable to use, so that they don’t have to reduce their own emissions. This will not benefit the environment or help to reduce the global emissions of greenhouse gases in the long-term.


full article at: http://www.australianreview.net/digest/2001/07/beder.html

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