Kyoto's Unfinished Business

Henry D. Jacoby, Ronald G. Prinn, and Richard Schmalensee

From Foreign Affairs, July/August 1998

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Summary:  The Kyoto pact on global warming is neither a battle won nor a costly burden -- more like a quick political fix for the vast problems of climate change. Above all, policymakers need to think more about the long term. Reducing greenhouse gas emissions requires including the developing countries who sat out Kyoto. Research into affordable energy sources that emit little carbon dioxide must intensify. And the world must develop international bodies to minimize the costs of cutting greenhouse gas emissions, including trading emission rights.

Henry D. Jacoby is the William F. Pounds Professor of Management and Codirector of the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology. Ronald G. Prinn is the TEPCO Professor of Atmospheric Chemistry, Codirector of the Joint Program on the Science and Policy of Global Change, and Director of the Center for Global Change Science at MIT. Richard Schmalensee is the Gordon Y. Billard Professor of Economics and Management and Director of the Center for Energy and Environmental Policy Research at MIT.

TAKING THE LONG VIEW ON GLOBAL WARMING

Even well-informed observers disagree about what the Kyoto Protocol on Climate Change will accomplish. Some gaze at its text and see a battle won. They cheer the fact that the generally richer nations participating in the protocol agreed to cut their collective emissions of the greenhouse gases that cause global warming to about five percent less than 1990 levels by early in the next century. These optimists also applaud features of the Kyoto accord designed to hold down the costs of achieving these reductions. In computing their emissions, nations can include changes in the six major greenhouse gases emitted because of human activity, not just carbon dioxide, the most important of the six. In addition, countries can factor in reduced carbon dioxide levels from changes in land use and new forestry techniques that take the gas out of the atmosphere. Groups of participating nations may comply jointly and reallocate commitments among themselves, as the European Union (EU) plans to do within a European "bubble," and there is agreement in principle to some form of emissions trading. Joint implementation, under which agents in one country can get credit for reductions they achieve in another, is to be permitted between participating nations, and a new Clean Development Mechanism will provide access to these opportunities in nonparticipating countries, mainly in the developing world. Finally, emissions targets are not rigidly tied to a single year, but to averages over a five-year "commitment period" from 2008 to 2012.

Pessimists, on the other hand, see Kyoto as a costly defeat. They note that there is no solid proof that human-induced climate change will occur or that its adverse effects would be serious were it to happen. At the same time, the expense of reducing greenhouse gas emissions to meet the Kyoto targets will be substantial, and pessimists believe that the effort will make participating countries less competitive. In the darkest interpretation, the Kyoto agreement is a pact among rich nations that will cripple their economies for decades to come, made simply because today's political leaders needed to burnish their environmental credentials.

Neither of these schools of thought is correct. Still a third group, whose views are much closer to the mark, believes that Kyoto mainly postpones much-needed work on what may prove a very serious long-term challenge. To them, Kyoto is a quick political fix for a problem created at the First Conference of Parties to the Climate Convention held in Berlin in 1995. The so-called Berlin mandate instructed negotiators to seek short-term, legally binding targets and timetables for emission control for participating countries only. In the run-up to Kyoto, many leaders publicly committed themselves to this idea. Not surprisingly, avoiding embarrassment on this score became the dominant focus of the negotiations. As a result, this group argues, the Kyoto agreement allows political leaders to declare success, but it does not address the larger climate issues at stake.

Even worse, these skeptics fear that by following the Berlin ...

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