Sins of EmissionWhy has Kyoto been so ineffective? Because of disputes over fairness, which caused the United States and the big developing countries to opt out. Because of a lack of enforceability. And, at the root of it all, because of its fathomless complexity. The agreement required country-by-country targets for emissions, which were difficult to negotiate. What factors, it was asked, should be considered in selecting each country’s targets? Current efficiency of energy use? Demographic projections? The pattern of industry? Different nations, as one might imagine, favored different approaches, based on self-interest. In the end, targets were all over the map, and in some cases difficult to defend objectively: Australia was allowed an 8 percent increase in emissions over 1990 levels, for instance, while Canada was required to reduce emissions by 6 percent. Needless to say, this process did not go smoothly. Then, after all that negotiation, circumstances changed (economies grew or shrank; energy-intensive industries waxed or waned), making it easy for some countries (like the former Soviet satellites) to meet or surpass their targets, while others (such as Canada) found it difficult or impossible. The result: some countries didn’t need to change their polluting practices at all; the rest had all manner of excuses for doing nothing. Carving all of Kyoto’s targets (as well as a raft of other provisions intended to give the protocol some flexibility) into the granite of a global treaty was a gigantic undertaking. The product of all this effort has been many wasted years. Tragically, the world looks poised to repeat this same cycle. The climate-change negotiations in Bali, Indonesia, at the end of last year pointed to a new treaty that preserves the defects of the old one. The aim, once more, is “binding” country-by-country targets for emissions, with rich nations doing the heavy lifting. This is precisely the failed Kyoto approach. Many of the officials at the negotiations booed and hissed at the U.S. representative until the Americans agreed to further talks about how this approach might be implemented. International action on global warming is called for. The best way forward is to switch from a tightly managed global regime based on quotas of carbon emissions to a more loosely coordinated system based on the price of carbon. To curb greenhouse-gas emissions, carbon-based energy has to get more expensive, whether you directly limit the amount emitted, or raise the price that emitters pay for the privilege. Steering the price and letting the market set quantities, rather than the other way around, has many economic advantages. But the best reason for doing it this way is geopolitical: it would make it easier for governments to act in concert and would give them less cover for shirking their responsibilities. Instead of having to agree at the outset on long-range quantity targets—and the myriad arrangements needed to implement them—governments would strive to converge over time on just one number: the price of carbon. No need to set a baseline for emissions, or fixed long-term targets. No need to punish or reward countries for their earlier policies. No need to rewrite the treaty as circumstances change, or as countries leave or join. And no need to delay action until a monstrous new international treaty has every disputed detail nailed down. The simplest way to raise the price of carbon is to tax it at so much per ton. (Yale’s Nordhaus, for example, has proposed a carbon tax starting at around $30 a ton and rising over time; that translates to a modest initial tax of 10 cents on a gallon of gasoline. Other economists recommend a tax many times larger.) Many U.S. politicians see a carbon tax as electoral poison, regardless of the new mood on climate change. Maybe they’re right—but political resistance to an explicit tax need not block this approach. One could simply link the carbon tax to an equivalent cut in some other tax. Alternatively, systems that disguise carbon taxes from the public are easy to devise, and the details could be left to individual countries. For instance, a modified cap-and-trade system (with additional permits for sale at a fixed price) could mimic the carbon-curbing effects of a tax. Aid from rich countries to poor to support the transfer of carbon-saving technology, a key sticking point in the Kyoto negotiations, would still be desirable. But that question could be disentangled from the basic agreement, and settled separately. The main multilateral push could focus on finding a common tax rate, and in the meantime, each country could move ahead on its own. The carbon tax would be a simple and transparent measure of each country’s effort to address global warming, and a focus for international persuasion. The United States can still lead on this issue. If it does, perhaps we can get on with doing something useful about global warming—and bury the Kyoto approach once and for all. Clive Crook is an Atlantic senior editor.
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