With a 95-0 vote, the Senate on July 25 passed a resolution setting parameters for climate negotiations. The Senate said American diplomats should not negotiate a global climate change treaty in which poor countries have fewer commitments than the United States and other developed countries.
Last week, U.S. negotiators took that mandate to a meeting of 100 nations in Bonn, Germany. Their goal was to hammer out an agreement before the December conference on climate change in Kyoto, Japan, where the US. is expected to sign a binding international treaty. Side-effects of any prescription must be thought about before use. As the December deadline draws near, American diplomats would do well to consider the unintended consequences of a climate change treaty, which will likely be severe, even criminal. The treaty will encourage more use of fossil fuels in many countries and may create a new black market for smuggled carbon-emitting goods.
Global climate change is all about energy. We emit carbon dioxide, methane, nitrous oxide and other "greenhouse gases" as a byproduct when we capture energy from coal, oil and wood. That energy produces electricity, combustion and heat, which literally drives the world economy.
When global authorities place restrictions on greenhouse gases, they assume people will, at worst, use less energy or, at best, invest in cleaner technologies in order to capture more energy per emitted gases. But the restrictions will certainly raise prices. And when people see higher prices on an item, they look around for substitutes. In poorer countries, those substitutes will not be the more expensive, clean-burning energy sources. Their best available energy source will probably be the local forest, according to a recent study.
A report in the Journal of Energy and Development concluded that a carbon emission tax in India would encourage the use of noncommercial energy among its population of 900 million, and thereby "create incentives for deforestation." Deforestation is damaging to the cause of emissions reduction because wood emits more carbon per unit of energy compared to other fossil fuels and losing forests draws down the planet's carbon absorption abilities.
Carbon taxes and other fossil fuel restrictions can only affect the commercial energy sector. In poor countries, the higher prices will force government operations and big business to spend more on energy, but the 1.3 billion people in the world who live on $1 a day will turn away from commercial energy to find other means of cooking their food and staying warm at night.
Raising the price of commercial energy, the study says, will force the poor to use their most convenient and cheapest resources: forests. Developed countries also will face some unintended consequences if the treaty passes. When the ozone layer treaty banned freon and other CFCs in 1996, an underground trade sprang up overnight. Now the illegal trade is worth $500 million a year. Should the global climate change treaty overly tax or restrict the $1 trillion a year fossil fuel industry, black markets will emerge to meet the demand for lower-priced energy. Organized crime would be giddy with joy.
These unintended consequences are frightening. With the direct cost of switching to a less carbon-intensive economy in the hundreds of billions, American negotiators should re-evaluate the medicine they are preparing to force on our nation and our world. Does the scientific evidence warrant these costs?
If the proposed treaty on global climate change passes, the public, especially in the developing world, will find other ways of meeting their needs, producing both environmental and societal costs that will surely swamp negotiators' best intentions.
Christopher Douglass is the John M. Olin Fellow in Public Policy at the Center for the Study of American Business at Washington University in St. Louis. He is the co-author (with Murray Weidenbaum) of "The Quiet Reversal of US. Global Climate Change Policy" (CSAB, November 1996).
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