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Academic Exchange April/May
2000 Contents Page
In 1997, delegates from
all over the world gathered in Kyoto, Japan, for a conference
on global warming. As we face another summer of smog here in
Atlanta, the Academic Exchange
invited Chakravorty, who specializes in international environmental
issues and served as a delegate to the Kyoto Negotiations, to
reflect on the status of attempts to decrease carbon emissions.
There is overwhelming consensus
among scientists that carbon emissions from the burning of fossil
fuels are heating up the earth with potentially serious consequences--sea
level rise, frequent and massive flooding, melting of polar ice
caps. In December 1997, the Kyoto protocol asked for a drastic
cut in carbon emissions, mainly from the advanced economies of
the West and the European Union. The protocol does not impose
any cuts on emissions from developing countries such as China,
India, and Brazil, whose domestic economies (and therefore fossil
fuel consumption) are expected to grow at relatively faster rates
in the coming years. The protocol will not be operational until
it is ratified by a majority of the countries emitting carbon,
and the way things are going, that is not likely to happen soon.
Though negotiations continue among representatives from all the
countries, politics over carbon permits--a system of chits designed
to limit the amount of carbon a country may release--has blocked
any real progress on this issue vital to the future of the global
environment. Simply put, the United States is expected to be
30 percent over the limits set in Kyoto for carbon emission by
the end of this decade. The U.S. plans to address this problem
by buying carbon permits from poorer countries that use less
carbon. Russia and the Ukraine alone may have as much as 600
million tons' worth of permits to sell due to their stagnant
economies and declining energy use. Even in a conservative estimate,
these two countries could earn up to 20 billion dollars a year,
while the global environment benefits not at all.
Environmental watchdogs dub such traded permits "hot air,"
since they do not result in any meaningful domestic reductions
in energy consumption. The White House projects that the U.S.
could meet 85 percent of its carbon reduction target through
the purchase of permits, with marginal impacts on the booming
Powerful forces, however, block the creation of an international
market for carbon. By all accounts, Europe will enjoy a carbon
permit surplus by 2010, and thus have no incentive to seriously
reduce energy use. In fact, the major industrial countries of
the E.U.--France, Germany, and the U.K.--are already in surplus.
And France is considering selling its nuclear technology to developing
countries once they enroll under the Kyoto umbrella. The E.U.
is thus a fierce opponent of carbon permit trading and has recently
put out proposals that would reduce the quantity of carbon permits
bought and sold in the world market by about 70 percent. Are
such actions motivated by visions of a greener future for all
or a desire to gain a competitive edge over the U.S.?
A smaller carbon market would force the U.S. and Japan to make
drastic cuts in energy use at home and raise permit prices. While
estimates vary, experts agree the effect on U.S. industry would
be severe. In a recent conference, a representative of the coal-fired
electric utilities in North America claimed that most of their
members would go out of business at carbon permit prices in excess
of twelve dollars per ton. These numbers, however, could be exaggerated.
Even if an international market in carbon is not feasible politically,
a domestic market could be developed. The U.S. has already experimented
with a very successful, albeit smaller, market in sulfur emissions
under the Clean Air Act, which led coal-fired utilities to reduce
sharply sulfur emissions through an elaborate trading and auctions
Another critical element in the negotiations is the participation
of developing countries. Environmen-tal activists argue that
developing countries should never sign the protocol because carbon
limits are a form of "enviro-colonialism"--a calculated
move to keep developing countries in perpetual poverty. It may
be more profitable, however, for a country like India or China
to sign the Protocol and be able to sell their carbon permits
now and benefit from the high prices, instead of holding out
for some future date.
Presidential politics also threaten this process. Vice President
Al Gore gave the Kyoto negotiations a crucial push. If he lands
in the White House next year, the chances of ratification will
A Republican presidency will likely delay the process. Even if
the protocol is ratified, key details remain unresolved: Who
will verify international carbon reductions, screen spurious
"hot air" projects, undertake baseline measurements,
and keep global carbon accounts?