Kyoto Protocol Doubts

Dec. 21, 2004
U.S. firms question key provisions.

Although industry is moving toward a consensus that action on the global climate change is warranted, it is far from persuaded the Kyoto Protocol is part of the answer. In the U.S., in particular, companies are leery of the 1997 international agreement -- yet to be ratified by any industrial nation -- that is foundering on disputes over implementation details. U.S. firms are concerned that the protocol:

  • Would require industrial nations to reduce greenhouse-gas emissions an average of 5% below 1990 levels by 2012, but doesn't apply to developing countries -- where the sharpest growth in emissions is expected. Notably exempt is China, which soon will overtake the U.S. as the world's largest CO2 emitter.
  • Doesn't spell out how individual nations can use alternative mechanisms -- mainly emissions trading and "carbon sinks" (forests and farms that absorb CO2 from the air) -- to help meet their reduction targets.
  • Gives European countries an economic advantage by using 1990 as the baseline year and by treating the continent as a single entity. Thus, all European nations get credit for the massive 25% reduction in CO2 emissions created between 1990 and 1995 when Germany shut down inefficient coal plants and central-heating facilities inherited from East Germany.
These shortcomings are why the U.S. Senate voted unanimously not to ratify the protocol, why the Bush Administration says it has "no interest" in implementing it, and why few U.S. firms endorse the protocol outright. "But if we can get the rules right, many companies will be supportive," predicts Eileen Claussen, president of the Pew Center on Global Climate Change. The next international negotiating session is scheduled to begin July 16 in Bonn, Germany.

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