Kyoto's Long Goodbye

Wall Street Journal
Friday, July 11, 2008

One of the mysteries of the universe is why President Bush bothers to charge the fixed bayonets of the global warming theocracy. On the other hand, his Administration's supposed "cowboy diplomacy" is succeeding in changing the way the world addresses climate change. Which is to say, he has forced the world to pay at least some attention to reality.

That was the larger meaning of the Group of Eight summit in Japan this week, even if it didn't make the papers. The headline was that the nations pledged to cut global greenhouse emissions by half by 2050. Yet for the first time, the G-8 also agreed that any meaningful climate program would have to involve industrializing nations like China and India. For the first time, too, the G-8 agreed that real progress will depend on technological advancements. And it agreed that the putative benefits had to justify any brakes on economic growth.

In other words, the G-8 signed on to what has been the White House approach since 2002. The U.S. has relied on the arc of domestic energy programs now in place, like fuel-economy standards and efficiency regulations, along with billions in subsidies for low-carbon technology. Europe threw in with the central planning of the Kyoto Protocol -- and the contrast is instructive. Between 2000 and 2006, U.S. net greenhouse gas emissions fell 3%. Of the 17 largest world-wide emitters, only France reduced by more.

So despite environmentalist sanctimony about the urgent need for President Bush and the U.S. to "take the lead" on global warming, his program has done better than most everybody else's. That won't make the evening news. But the fact is that the new G-8 document is best understood as a second look at the "leadership" of . . . you know who.

The G-8 also tends to make grand promises that evaporate as soon as everyone goes home. This year, picking up the "accountability" theme pressed by the U.S., envoys grudgingly accepted a plan that will track -- and publicize -- how well countries are living up to their word. So when the G-8 endorsed greenhouse reduction "aspirations" that are "ambitious, realistic and achievable," the emphasis fell on the last two attributes.

Put another way, global warming is an economic, not a theological, question. It is not at all clear that huge expenditures today on slowing emissions will yield long-run benefits or even slow emissions. Research and development into sources of low-carbon energy is almost certainly more useful, and the G-8 pledged more funding for "clean tech" programs. This is vastly preferable to whatever reorganization of the American economy that Barack Obama and John McCain currently favor in the name of solving this speculative problem.

The G-8 also conceded that global-warming masochism is futile and painfully expensive. If every rich country drastically cut CO2, those cuts would be wiped out by emissions from China and India. "Carbon leakage" is a major problem too, where cutbacks in some countries lead to increases in others with less strict policies, as manufacturing and the like are outsourced. This whack-a-mole won't stop without including all 17 major economies, which together produce roughly 80% of global emissions.

Much to the ire of Kyotophiles, Mr. Bush started this rethinking last year when he created a parallel track for talks on a post-2012 U.N. program, luring China and India to the table with more practical options. But developing countries, led by that duo, still refused to sign on to the G-8's 2050 goal. They aren't eager to endanger their growth -- and lifting people out of poverty -- by acquiring the West's climate neuroses.

The irony is that Kyoto has handed them every reason not to participate. Europe knew all along that it couldn't meet its quotas, so it created an out in "offsets." A British factory, say, buys a credit to pay for basic efficiency improvements in a Chinese coal plant, like installing smokestack scrubbers. This is a tax on the Brits to make Chinese industries more competitive. Sweet deal if you can get it.

It gets worse. The offsets are routed through a U.N. bureaucracy that makes them far more valuable in Europe than the cost of the actual efficiency improvements. So far, Kyoto-world has paid more than €4.7 billion to eliminate an obscure greenhouse gas called HFC-23; the necessary incinerators cost less than €100 million. Most of the difference in such schemes goes to the foreign government, such as China's communist regime.

Given these perverse incentives, the magical realism of Kyoto has backfired in a big way. The global warming elite will never admit this, because that would mean giving up their political whip against George Bush. But Kyoto II is already collapsing under its own contradictions. By sticking to a more realistic alternative, this reviled President has handed his green opponents a way to save face.