Kyoto Treaty takes force

Yesterday, Wednesday 16 February, marked the entry into force of the Kyoto Treaty, designed to control and reduce the global emission of greenhouse gasses.

Of course, the most noteworthy part of the whole thing is that the US, producer of about a quarter of the world’s greenhouse gasses, is not a signatory. Nevertheless, it’s great to see the EU, most notably, committed to controlling emissions.

There’s lots that could be said, and perhaps I will if people are interested. But for now, I’ll comment on the three most commonly used criticisms of the treaty: developing country exceptions; effects on economic growth; and effectiveness in reducing emissions.

Firstly, the exemption granted to developing countries. The treaty requires a gradual control, and eventual reduction, of greenhouse gasses by signatory countries, measured relative to their 1990 emission levels. Obviously, if enforced rigidly, this would permanently entrench economic divisions, as the developing world would never be able to emit as much per person as the developed world. As a result, developing countries are not held to targets at the moment.

Where this really matters is the case of China, and to a degree India. China is now the world’s second largest emitter of carbon dioxide, thanks to its coal-intensive industry. The US has refused to sign a treaty that does not impose restrictions on China. However, in my opinion, the only truly moral standard for emissions is equal emissions per person — which would give China the right to about five times the US’s emissions.

However moral that is, however, it is clearly unsustainable. Global atmospheric carbon dioxide levels are about 60% above what they were before the start of the industrial revolution. There are reasons to believe, though, that even though Kyoto does not impose restrictions on China, emissions growth will slow. To start with, China just issued a statement saying they are starting to impose tighter restrictions. Further, the knowledge that Kyoto will apply to them relatively soon will tend to make development happen in a pre-emptively cleaner way. Lastly, carbon trading — discussed next — will induce the developed world to assist in providing cleaner technology.

The second argument is that Kyoto has too negative an effect on economic growth to justify its benefits. Various studies have purported to show a huge economic cost, perhaps a substantial fraction of a percent of global GDP growth over the next century. The obvious answer is that having a livable Earth is worth far more than this. But proponents on both sides seem to enjoy quoting huge figures over many decades. As I see it, the science of global warming is not concrete, but is frightening. Perhaps a decade will prove it all a false alarm, at which point Kyoto can be dismantled with little negative effect. On the other hand, if we do land up in hot water, as it were, a decade headstart might make solving the eventual problem far cheaper.

Centrally, however, it seems the Kyoto mechanism is about the best one can get for reducing emissions cheaply. Rather than enforce uniform reductions across the board, Kyoto provides for trading “carbon credits”. This allows industries where it is prohibitively expensive to buy carbon quotas from other companies or countries, or to plant forests to offset their emissions. This means that companies and countries have the incentive to be as clean as possible, as they can sell unused quota; and also means that emission reductions are made in the areas of the economy in which it is cheapest to move to cleaner technology.

The last critiscism of Kyoto is normally made by people on the other side of the fence: green organisations believe that Kyoto is doing far too little. Unfortunately, the long process that was attempted to bring the US onboard has left the treaty far, far weaker than it was originally. So it really doesn’t mean much for a number of years to come. However, I don’t think one should underestimate the value of having a framework finally in place, and the shift of public opinion that has resulted. The US’s position is looking increasingly isolated, which is exciting to see; and should global warming start accelerating noticeably, it is far easier and quicker to lower the carbon quotas in place, than to negotiate something like Kyoto from scratch.

Greenhouse gasses are a problem that will never be solved as easily as the removal of CFCs prevented the destruction of the ozone layer. The Kyoto treaty, however, weak as it is, seems to me to offer a good mix of smart economics, moral acceptability, and hope for the future.