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Global Warming Heats Up

Author: James M. Lindsay, Senior Vice President, Director of Studies, and Maurice R. Greenberg Chair
Fall 2001
Brookings Review

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The global warming debate is heating up. President George W. Bush rejects the Kyoto Protocol as a "fatally flawed" agreement that would harm the American economy. The European Union, Japan, and other industrialized countries counter that Kyoto represents humanity's best chance for combating global warming and vow to make it work even if Washington sits on the sidelines. Both sides have dug in their heels, and grounds for a compromise are scarce.

How did this situation develop and what will happen next? The answers to these questions lie in the science of global warming, the politics of international cooperation, and the details of the Kyoto Protocol.

Is the Climate Changing?

No one disputes the basic theory that underlies concerns about global warming. If the atmospheric concentration of heat-trapping gases increases sufficiently, the earth's temperature will rise. Equally indisputable is that humanity is spewing heat-trapping gases into the atmosphere. The main culprit is carbon dioxide released by burning fossil fuels. Its atmospheric concentration has risen from 270 parts per million in 1750 to 368 today. Methane gas, which has more than doubled in concentration over the past three centuries as the result of cultivating rice, raising livestock, and exploring for oil, is a secondary factor, as is nitrous oxide, a byproduct of burning fossil fuels and producing nylon and fertilizer. And human innovation has injected synthetic gases, such as perfluorocarbons and sulfur hexafloride, into the atmosphere. Although these gases are found in trace amounts, they are thousands of times more efficient than carbon dioxide at absorbing heat.

Rather than focusing on whether the earth could warm, then, the debate in the 1990s focused largely on whether it has been warming. The answer is yes. Average surface temperatures increased roughly one degree Fahrenheit during the 20th century. This number sounds unimpressive, but small variations in global temperature can translate into dramatic climate changes. During the last Ice Age, when glaciers covered much of North America, average global surface temperatures were only seven degrees lower than today.

Other evidence also points to a warming globe. Ocean temperatures have risen, which is significant because water covers most of the earth's surface. Arctic sea ice is melting each year by an area equivalent to the combined size of Maryland and Delaware. Many lakes and rivers in the Northern Hemisphere freeze a week later— and melt 10 days earlier—than they did 150 years ago. Glaciers from the Rockies to the Alps to Mount Kilimanjaro are rapidly shrinking.

In a sign of the complexity of the global warming debate, agreement that the earth is hotter merely shifted discussion to a new question. Is human activity responsible? Mounting evidence says yes. The UN-sponsored Intergovernmental Panel on Climate Change (IPCC) concluded with 60–90 percent confidence early this year that the observed warming "has been due to the increase in greenhouse gas concentrations." A White House-commissioned study by the National Academy of Sciences essentially confirmed this conclusion. But skeptics insist that the observed warming falls within the earth's natural climatic variation and probably stems from solar, not human, activity. While scientists agree that the sun can influence climate, conclusive evidence that it is causing the earth's warming trend is missing.

Considerable uncertainty also surrounds future warming trends. The IPCC now projects that global temperatures could rise as little as 2.5 degrees or as much as 10.5 degrees by 2100, or double the range it predicted five years ago. Skeptics insist that the IPCC's computer-generated projections exaggerate possible temperature change because the underlying mathematical models do not capture the complex interaction of natural feedback loops, such as increased cloud formation, that could dampen temperature increases.

How much and how fast temperatures rise matters. Small, slow temperature increases make it easier for humans to adapt. (Whether plants andanimals could is another matter.) Large, rapid temperature changes, however, could swamp adaptation. Even these statements are guesses. No one knows how higher temperatures will affect the earth's climate. Small changes might disrupt weather patterns and devastate agricultural production. Conversely, higher temperatures might turn frozen wastelands into productive farmland.

Why Cooperation Is Hard

Uncertainty about the causes and consequences of global warming greatly shapes the debate over climate change. It is hard to motivate countries to act when no one knows whether the problem is big or small, imminent or distant. In this respect, global warming differs from ozone depletion. There scientists agreed the problem was real and immediate, and the result was the successful 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. Uncertainty also explains why global warming has not yet emerged as a burning issue in the United States, which with only 5 percent of the world's population emits roughly 25 percent of its heat-trapping gases. Few Americans list global warming as a top environmental concern—drinking water pollution and toxic waste rate far higher— and by a two-to-one margin they say it will not pose a serious threat during their lifetime.

Two other factors complicate efforts to combat global warming. One is cost. Protecting the ozone layer required replacing a few damaging products with existing substitutes. By contrast, combating global warming requires diminishing the world's appetite for fossil fuels. That is a difficult task. And the greater the emissions reductions needed, the greater the cost.

The second problem is that global warming poses a collective goods dilemma. Countries know that pursuing virtuous global warming policies makes little sense if no one else follows suit. Any individual reduction on their part will be swamped by emissions from others. Indeed,going first could be economically lethal, driving up a country's production costs and pushing jobs abroad. So everyone has an incentive to wait for someone else to take the lead.

Fairness issues exacerbate the collective goods problem. Developing countries insist that industrialized countries should bear the burden of cutting emissions. They grew wealthy spewing the gases that now endanger the planet. Making everyone curtail emissions would force developing countries to clean up a mess they didn't create and potentially keep them poor by denying them the right to pollute their way to wealth.

By the same token, though, emissions of heat-trapping gases from developing countries will soon exceed those from industrialized countries, largely negating the benefits of emission cuts in richer nations. Moreover, developing countries have the most to lose from global warming. They have fewer resources to adapt to climate change, and their economies rely more on agriculture; hence, they are potentially more vulnerable to changes in the weather.

The Kyoto Protocol

Concerns about cost and fairness dominated the negotiations over the Kyoto Protocol. Signed in December 1997, the treaty embodied two key decisions. First, the United States and 37 other countries pledged to cut their emissions of carbon dioxide and five other heat-trapping gases between 2008 and 2012 to an average of 5 percent below what they had been in 1990. Individual country targets varied. The United States pledged to cut its emissions to 7 percent below 1990 levels, Japan to 6 percent below, and the European Union to 8 percent below.

Second, Kyoto left it up to developing countries to decide whether to reduce their greenhouse gas emissions. The Clinton administration had wanted language requiring developing countries to curb emissions. That position reflected political reality as much as anything. In July 1997 the Senate voted 95–0 to oppose any agreement exempting developing countries from emission reductions. Despite this warning, developing countries successfully fought off even language that urged voluntary compliance. (China led this fight even though it apparently reduced its emissions in the late 1990s by overhauling its energy infrastructure to reduce urban air pollution. Beijing worried that any limits would constrain its future economic growth.)

The developing countries exemption was just one of the problems plaguing the Kyoto Protocol. At the broadest level, the treaty did not solve global warming. With developing nations unrestrained, worldwide emissions of heat-trapping gases will rise, albeit somewhat more slowly, even if the treaty's terms are fully implemented. Moreover, the negotiators reached agreement by postponing decisions about the most controversial issues. The protocol, for example, omitted the operational details of its proposed emissions trading program— which in theory would hold down the cost of compliance by letting firms and countries that can't meet their emissions targets buy credits from those that can. The treaty was similarly vague in its provisions allowing countries to claim credits for "carbon sinks"— the ability of trees and soil to absorb carbon dioxide. Such a provision could encourage countries to preserve and extend forests; it could also be used to let countries hit their emissions targets without changing their behavior.

Fleshing out these details proved difficult. Carbon sinks featured prominently when the parties convened in The Hague in November 2000. The European Union accused the United States, Japan, Canada, and Australia of seeking to use them to avoid taking painful steps to cut domestic emissions. Efforts to find an acceptable compromise failed and negotiations collapsed.

"Kyoto Is Dead"

The deadlock at The Hague dumped the global warming issue squarely into the lap of the incoming Bush administration. During the campaign Bush had criticized Kyoto for exempting the developing countries. But he had also pledged to curb carbon dioxide emissions from power plants, prompting speculation he would seek to mend, not end, Kyoto.

That speculation proved wrong. In March, Bush abandoned his pledge to cut carbon dioxide emissions. "Our economy has slowed down," he said. "We also have an energy crisis and the idea of placing caps on carbon dioxide does not make economic sense." When European officials asked what this meant for Kyoto, national security adviser Condoleezza Rice said bluntly: "We will have to find new ways to deal with the problem. Kyoto is dead."

Rice's comment produced howls of anger from European capitals, where global warming has greater political salience. Lost in the din of denunciations, however, was the fact that the Kyoto process would be troubled even if Bush had followed Bill Clinton's approach of trying to fix its flaws. U.S. greenhouse gas emissions rose substantially over the course of the 1990s and are continuing to increase. As a result, reaching the Kyoto target could require the United States to reduce its emissions 20 percent or more, a perhaps impossible task to accomplish at a reasonable cost in less than a decade.

Nor have most other countries distinguished themselves on global warming. With the exception of Germany and Great Britain, every member of the European Union saw its emissions rise during the 1990s. Germany's reduced greenhouse emissions largely reflect a geopolitical quirk— it shut down wildly inefficient plants it inherited from East Germany. Great Britain's reductions came about because reforms introduced in the early 1990s shifted energy usage from coal to natural gas and nuclear power. This spotty record led some White House officials to complain that the Europeans were secretly delighted that Bush had declared Kyoto dead. They could denounce American arrogance but skip the tough steps needed to combat global warming.

Now What?

Much to the Bush administration's surprise, its opposition did not kill Kyoto. The European Union fought to keep the treaty alive, and in Bonn in July it reached agreement with Japan, Australia, and Canada on the issues that had derailed the talks at The Hague. Ironically, the Bonn agreement incorporated many of the changes the Clinton administration had sought, including allowing credits for carbon sinks. These changes make it easier for countries to hit their emissions targets; initial assessments indicate that if Kyoto is fully enacted it will reduce emissions 2 percent below 1990 levels for the participating countries.

Whether the Bonn agreement will work remains to be seen. The pact must be ratified by the legislatures of at least 55 countries, responsible for producing more than 55 percent of the industrialized world's emissions, before it can go into effect. National legislatures may flinch when they see the bill for carrying out the pact.

But for the moment at least Bonn clearly leaves the United States isolated. Kyoto's supporters hope that this isolation will eventually force Washington to rejoin the treaty, which would substantially improve its chances for success. The White House is unlikely, however, to reverse course suddenly. Bush has attacked Kyoto so publicly that a reversal would be seen as a surrender, hardly an attractive option to a president who takes pride in standing his ground.

Instead, the Bush administration is far more likely to craft its own response to global warming. What might such an approach look like? That is hard to say. Although the White House has been vocal about Kyoto's shortcomings, it has been quiet about what should replace it. Bush has pledged to spend more to study climate change but not much else.

Bush's aides hint that any plan the administration devises will emphasize technological innovation and voluntary reductions. Both could certainly play a useful role. In recent years, some companies— either to gain favorable publicity, head off stringent emission regulations, or improve their balance sheets by using resources more efficiently— have adopted new technologies and otherwise moved to reduce their emissions. Such efforts help explain why the emission of heat-trapping gases from industrial sources fell 2 percent in the United States in 1999 even as they grew 1 percent for the country as a whole. At least 18 states have taken steps on their own to discourage greenhouse gas emissions. And some individual cities and towns have reduced emissions with low-tech policies such as establishing exclusive bus lanes, synchronizing traffic lights, and buying vehicles that emit less carbon dioxide.

But technological innovation and voluntary efforts alone will not be enough. The rate of technological innovation is a function of the demand for it, which will be low in the absence of government regulation. And most companies are declining to cut their greenhouse gas emissions voluntarily, either because it will raise their production costs or because they believe that cutting emissions now will only mean stiffer emissions targets in the future.

As a result, federal regulation is necessary for making substantial reductions in U.S. greenhouse gas emissions. This could entail steps such as raising fuel economy standards for cars and trucks— which produce roughly one-third of U.S. carbon dioxide emissions— and requiring firms to reduce emissions of methane and rare industrial gases. It could also entail setting up a domestic emissions trading program or even a regional one that involved Mexico and other Latin American countries.

Creating a two-track system in which the United States tackled global warming in its own fashion might not be ideal, but it would not necessarily deal Kyoto a fatal blow. Indeed, the two tracks could reinforce each other. Success in the Kyoto process could keep up pressure on Washington to act, and action in Washington could discourage Kyoto's signatories from balking at carrying out their commitments. And having separate tracks would not preclude joint efforts to persuade developing nations to control emissions or hammer out a successor to Kyoto that merges the two tracks.

The sticking point in all this is that a two-track process can succeed only if the United States is committed to reducing its emissions. It is doubtful we will see that commitment any time soon. Congress reacted to the Bonn agreement with a flurry of interest in global warming, and it may eventually enact some initiatives into law. But a comprehensive and far-reaching strategy capable of reducing emissions substantially is unlikely to pass without President Bush's leadership. And all signs are that he remains firmly opposed to any emissions reduction effort that imposes significant costs on the U.S. economy.

The Bush administration's resistance to moving more aggressively on global warming goes over poorly in foreign capitals, but it might fare better with the American people. While two out of three Americans say the White House should combat global warming, fewer than half say they would pay a quarter more for a gallon of gasoline to make it happen. The fallout from Bonn might persuade Americans to open their wallets, but that is by no means guaranteed. Unfortunately, by the time the uncertainty surrounding global warming disappears, it may be too late to do much about it.