New ammunition for industry opponents of U.S. ratification of the Kyoto global-warming treaty comes from a new study by Charles River Associates Inc., a Boston-based economic consulting firm. The analysis, authored by economist W. David Montgomery, shows that the treaty could be 10 times more costly to U.S. consumers than estimates provided by the Clinton Administration. Responsible for the Administration's claims, writes Montgomery, are overly optimistic predictions on the trading of credits from greenhouse gas emissions from abroad, and too-rosy forecasts on replacing U.S. coal-fired electric utilities with natural gas-powered units over the next decade.
Moreover, says Montgomery, the Administration failed to take into account the impact on the total economy when price increases in gasoline and other energy products reverberate through the economy.
The study was released by the American Petroleum Institute, a major foe of the Kyoto pact, which would require the U.S. to reduce its greenhouse-gas emissions by 7% from 1990 levels by 2010.