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The Honolulu Advertiser
Posted on: Monday, February 19, 2007

COMMENTARY
Emissions rules may cripple economies

 •  Emissions trading system is a good step

By Pete Sepp

With no consensus on warming, can we risk world's well-being?

Can we teach cows to mind their manners?

In the wake of a recent U.N. finding that flatulence and manure from the world's livestock are major contributors to global warming, that is one of the many perturbing questions facing those who seek a government clampdown on carbon emissions.

The answers to such questions are not encouraging. Take, for example, the "emissions trading" system the European Union imposed on its member nations to combat climate change. The byzantine system imposes limits on the carbon dioxide that companies can emit — thereby reducing one of the "greenhouse gases" that cause global warming. Firms that are below the emission levels can sell their "leftover" emission credits to ones who spew out higher levels.

Despite its capitalistic veneer, mandatory emissions trading works like a manipulative tax, by raising the overhead of fossil fuel-intensive industries while giving less carbon-heavy sectors economic and political clout.

This seemingly obtuse process should concern everyone. Affected companies are forced to curtail production — often by laying off workers. They must make changes to their business methods — the costs of which are passed onto consumers in higher prices. Or they must slash profits to purchase emissions credits elsewhere — thus depriving millions of middle-class shareholders of stock appreciations and dividends.

The EU's Phase 1 part of Kyoto Protocol compliance already has produced economic slowdowns, even though quotas on industrial carbon-dioxide emissions were set at relatively high levels. Phase 2, scheduled for 2008, will force member countries to restrict further greenhouse gases — forcing carbon-dioxide emissions down to the 1990 levels mandated by the 1997 treaty, which the United States never ratified because of bipartisan concern about its devastating economic impact.

While some see some economic suffering as a worthwhile trade-off for saving our planet, there is still no clear consensus on effective remedies for global warming. As far back as 1998, the National Center for Atmospheric Research estimated that implementing the Kyoto mandates would curtail global temperatures by as little as 7/100th of a degree by the year 2050.

That same year, Wharton Economic Forecasting Associates warned that ratifying Kyoto could lead to 2.4 million lost jobs in the United States and significant reductions in our gross domestic product.

Only two months ago, two respected scientists in the prestigious journal Environmental Geology concluded that because natural forces are so much more important in shaping world temperatures, "attempts to alter the occurring global climactic changes" should be abandoned as "meaningless and harmful."

Unfortunately, we seem headed in another direction. A prominent British Labor Party politician recently suggested that someday soon Britons might have to carry "bank cards" that store both pounds and government-allotted carbon points. This Orwellian nightmare would subject every person's electricity use, driving habits, and travel to monitoring and rationing by bureaucratic snoops. Those whose job-commuting distances increase or whose homes need more heat for health reasons, might not have enough carbon points — or the money to buy more.

Such a future may not be too distant. In December the European Commission unveiled legislation that would gradually force airlines into EU emissions-trading — prompting fears from discount operators that sizeable carbon-dioxide fees may be added to passenger tickets.

What we don't know about global warming can hurt us, but so can what we mistakenly think we know. For all the often-conflicting pronouncements and predictions from scientists and media about potential disasters, the looming regulations would soon cripple industrialized as well as emerging economies.

With nearly half of the world's population living on less than $2 a day, we can't afford to stake the cure for global warming on a roll of the dice. Policy-makers shouldn't be allowed to gamble away our well-being by empowering careless government bureaucracies to run our lives.

Pete Sepp is vice president for communications with the National Taxpayers Union. He wrote this commentary for the McClatchy-Tribune News Service.