WATCHING GOVERNMENT

The U.S. Senate is expected to approve a resolution soon setting conditions under which the U.S. could sign an international agreement on greenhouse gas emissions. Passage isn't much in question, since the resolution has 64 cosponsors, a majority. The Clinton administration plans to sign a new treaty in Kyoto, Japan, this winter that would strengthen the 1992 Rio de Janeiro convention on climate change (OGJ, July 7, 1997, p. 31).

July 28, 1997

3 min read

Patrick Crow
Washington, D.C.
[email protected]

The U.S. Senate is expected to approve a resolution soon setting conditions under which the U.S. could sign an international agreement on greenhouse gas emissions.

Passage isn't much in question, since the resolution has 64 cosponsors, a majority.

The Clinton administration plans to sign a new treaty in Kyoto, Japan, this winter that would strengthen the 1992 Rio de Janeiro convention on climate change (OGJ, July 7, 1997, p. 31).

This fall, the administration has pledged to propose legally binding emissions caps for the U.S. and other industrialized nations and a worldwide emissions trading program. Developing countries would be exempted.

Undersecretary of State Tim Wirth recently testified, "If the developed countries, with our current economic capacity, technical capability, and energy-intensive lifestyle, don't go first-setting the example and reducing emissions-then the developing countries will not act, either."

Cost estimates

The administration released an interagency study on the economic effects of cutting U.S. emissions of greenhouse gases, primarily carbon dioxide from the burning of fossil fuels.

It said stabilizing CO2 emissions by 2010 at 1990 levels through a permit trading program could increase the costs of gasoline by 26?/gal and natural gas by $1.49/Mcf.

About 57% of the total emissions reduction would come from reduced coal demand, 30% from lower oil demand, and 13% from lessened natural gas demand. But it said those increased energy prices would not have a major impact on the economy.

A separate study, by the Argonne National Laboratory, said energy tax increases would force "significant reductions" in the U.S. refining and petrochemical sectors, forcing the latter to shift as much as 30% of its capacity overseas to developing nations.

Janet Yellen, chairman of the White House Council of Economic Advisers, dismissed the studies, saying costs of greenhouse gas reduction are "very difficult to predict with any certainty at all."

She said, "It just boils down to this. If we do it dumb, it could cost a lot. But if we do it smart, it will cost much less and, indeed, could produce net benefits in the long run."

Reactions

Gail McDonald, president of the Global Climate Coalition (GCC), said the administration "has concluded after stonewalling Congress for months that it does not need any economic analysis to guide its efforts. Negotiating this way is like driving down a mountain road with a blindfold on."

William O'Keefe, GCC chairman and American Petroleum Institute executive vice-president, said cutting CO2 emissions to 1990 levels in 2010 would require more than a 25% reduction in projected fossil use.

"There is no economically viable technology that can replace that amount of energy. By implication, the administration plans to commit the U.S. to a severe form of energy rationing." He added the administration's concept of an international trading scheme is "unproved and unworkable."

O'Keefe said the U.S. should first improve its knowledge about global warming: "By proceeding at the pace that scientific understanding allows, we can greatly reduce the costs of dealing with potential climate change."