RL30024: Global Climate Change Policy:
From "No Regrets" to S.Res. 98

Larry B. Parker and John E. Blodgett
Specialists
Environment and Natural Resources Policy Division

January 12, 1999

CONTENTS

• Summary
• From Study to Commitment: The FCCC
• Developing Programs: EPACT
• Comparing EPACT and the FCCC
• Results: Action Plans
• The Bush Administration's National Action Plan: "No Regrets"
• The Clinton Administration's National Action Plans: Industrial Strength "No Regrets"
• Kyoto and S.Res. 98
• Stalemate: Conflicting Cost Perspectives
• Questions about the Low-cost Perspective
• Impact on "No Regrets" Programs
• Conclusion: Battle of Policy Perspectives
• Footnotes

List of Tables

Table 1: U.N. Framework Convention on Climate Change and the Energy Policy Act of 1992: Correspondences of Selected Provisions
Table 2: Selected Major Reduction Strategies Listed by the Bush Action Plan
Table 3: Selected Major Reduction Strategies Under the 1993 Clinton Action Plan

Summary

U.S. policy toward global climate change evolved from a "study only" to a more "study and action" orientation in 1992 with ratification of the U.N. Framework Convention on Climate Change (FCCC). The Convention committed developed countries to aim at returning their greenhouse gas emissions to their 1990 levels by the year 2000. The U.S. decision to ratify the FCCC reflected both the nonbinding nature of the accord and analyses that suggested that the United States could achieve the necessary reduction at little or no cost. Under the FCCC, developed countries were to adopt national plans and policies to reduce greenhouse gas emissions. The United States submitted such plans in 1992, 1994, and 1997.

The Energy Policy Act of 1992 (EPACT) has been the principal U.S. statutory response to the FCCC. Primarily an energy policy response to the Iraqi takeover of Kuwait and the U.S.-led reaction, EPACT's energy conservation, renewable energy, and other titles were also seen as having a beneficial effect on global climate change concerns. In addition to EPACT, the Bush and Clinton Administrations encouraged voluntary reductions by industry through administrative initiatives, such as EPA's various "green" programs. This largely voluntary approach to complying with FCCC allowed the two Administrations to implement a climate change policy without having to ask Congress for new authorities. With no penalty for failing to achieve the reduction goal, and reduction costs assumed to be minimal, Congress had little incentive to challenge Administration policy.

However, the subsequent inability of the United States to achieve its goal under the FCCC and the binding nature of the Kyoto Protocol have raised questions about this approach to climate change policy. In particular, recent analyses suggesting substantial costs from any emissions reduction program have renewed interests in costs as an overarching policy issue. In the 105^th Congress, the Senate signaled its concern by unanimously approving S.Res. 98, which stated that the United States should not approve any Kyoto agreement that did not impose binding reduction requirements on all nations and requested the Administration to analyze the costs implied by any treaty submitted for its approval. The Administration has said it will not submit the Kyoto agreement for Senate consideration until developing nations make at least some commitments. The House responded primarily by vigorous oversight of greenhouse gas reduction programs, questioning whether the EPA in particular had authority to fund various energy efficiency programs.

This focus on costs represents an attempt to determine whether action on climate change is prudent, given the uncertainty of the risk. Besides the scientific uncertainty involved in climate change, the Kyoto Protocol adds an additional risk because of its exclusion of developing countries. If ones believes that the costs of greenhouse gas reductions are modest, action to reduce emissions is not as risky as it first appears. However, if one perceives substantial costs from reducing carbon emissions, the uncertainty about any benefits raises serious questions as to the prudence of such action. This clash of perspectives is likely to ensure that costs remain a pivotal issue, along with scientific uncertainty, as the climate change policy debate continues.

From Study to Commitment: The FCCC

U.S. policy toward global climate change evolved from a "study only" to a more "study and action" orientation in 1992 with ratification of the U.N. Framework Convention on Climate Change (FCCC) in Rio de Janeiro.⁽¹⁾ During the protracted deliberations on the FCCC, the National Academy of Sciences (NAS) released an influential report on global warming. In the report entitled, Policy Implications of Greenhouse Warming, the NAS stated "The United States could reduce or offset its greenhouse gas emissions by between 10 and 40 percent of 1990 levels at low cost, or at some net savings, if proper policies are implemented."⁽²⁾ The NAS's energy policy recommendations focused on increasing energy conservation and efficiency, incorporating greenhouse warming as a factor in future energy planning, and studying and eventually implementing "full social cost pricing" of energy.

Although widely publicized and promoted, this premise was not sufficient for the U.S. to commit to firm targets and time frames for carbon dioxide (CO₂) reductions, as witnessed by the U.S. negotiation and ratification of the FCCC.⁽³⁾ Driven by concerns about scientific uncertainty with respect to global climate, the Bush Administration -- against the wishes of most environmentalists and some vocal Members of Congress -- refused to commit to a binding agreement to reduce the nation's CO₂ emissions by a specific date. The FCCC reflects this negotiating position of the United States and some other countries in that it calls for voluntary control measures. Senate floor debate on ratification of the treaty brought out concerns by some Senators about the cost of compliance, its impact on the country's competitiveness, and the comprehensiveness with respect to the developing countries -- concerns that were overcome because of the non-binding nature of the reduction goals.⁽⁴⁾ Those arguing for more binding commitments argued that emissions controls could create jobs and enhance economic health, and that emissions were an indicator of inefficiency.

As finally negotiated, the objective of the Convention is to:

... achieve ... stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved with a time frame sufficient to allow ecosystems to adapt naturally to climate change to ensure that food production is not threatened, and to enable economic development to proceed in a sustainable manner.⁽⁵⁾

Arguing that "the developed country Parties should take the lead" in reducing emissions, the Convention states that developed countries shall aim toward returning their greenhouse gas emissions to their 1990 levels by the year 2000. In line with this goal, developed countries were to adopt national plans and policy options to mitigate climate change by reducing anthropogenic emissions and enhancing sinks. As discussed later, the United States submitted such plans in 1992, 1994, and 1997.

Developing Programs: EPACT

The Energy Policy Act of 1992 (EPACT)⁽⁶⁾ has been the principal statutory basis for programs making up the U.S. response to the FCCC. Primarily crafted as an energy policy response to the Iraqi takeover of Kuwait and the U.S.-led response, its energy conservation, renewable energy, and other titles were also seen as having a beneficial effect on global climate change concerns being debated at this time in international circles. In its 1992 submission to the FCCC, the Bush Administration listed 11 different titles of EPACT as "extremely important" to its overall strategy of reducing greenhouse gases.⁽⁷⁾

The aforementioned recommendations of the NAS were embodied in several sections of EPACT. These sections included provisions to establish energy-efficiency standards, promote dissemination of energy-saving information, establish several national research and development programs related to deployment of energy-efficiency technologies, and authorize the Department of Energy (DOE) to evaluate cost-effective energy efficiency technologies. In addition to these activities to improve energy efficiency, EPACT includes a separate title to include global warming concerns in energy policy planning. Title XVI was designed to assist the government in making informed decisions on global warming by collecting analyzing and reporting information on climate change through DOE. Activities included a report on the various economic, energy, social, environmental and competitive implications of reducing greenhouse gas emissions, developing a least-cost energy strategy designed to achieve "the stabilization and eventual reduction in the generation of greenhouse gases," creating a Director of Climate Change, and developing an inventory of greenhouse gases and early reductions in such gases.

Indeed, the passage of EPACT was anticipated by its authors to stabilize or even reduce emissions of greenhouse gases at little cost, in line with the 1991 NAS report. As stated by the House Report:

The committee expects that, if fully implemented, H.R. 776 will result in a substantial reduction in U.S. greenhouse gas emissions relative to forecasted levels. The bulk of these reductions result from the programs that will demonstrate and transfer advanced clean coal and renewable technologies abroad, and from the domestic energy efficiency and renewable energy initiatives. The provisions on electric utilities, alternatives fuels and coalbed methane are also significant.⁽⁸⁾

Comparing EPACT and the FCCC

EPACT and the FCCC were debated during the same time period. Table 1 compares EPACT, title XVI, as enacted, and FCCC, as signed and ratified by the United States. Essentially, the FCCC establishes policies, and EPACT establishes program responses. Thus EPACT is silent on the nature of the problem, on the need for an immediate response, or whether the United States should take the lead in any such response. But, as table 1 shows, EPACT's portfolio of domestic strategies and program options -- technology development/transfer, financial assistance to developing countries, and least-cost solutions -- closely track the provisions of the FCCC. With the authorization of these programs and activities, EPACT effectively constitutes implementing legislation for the U.S. commitment made in signing and ratifying the FCCC. It should be noted, however, that typically the programs are relatively specified, not broad authorizations; that for many the benefit of reducing greenhouse gases is a "bonus"in achieving other goals (e.g., "substantially reduce environmental pollutants, including greenhouse gases..." [sec. 1608]) ; and that in at least one case the Act explicitly denies new authority (i.e., "This subsection does not provide any new data collection authority" [sec. 1605(a)]). Such an approach reflects the voluntary nature of the Rio commitments, and the "no regrets" policy position of the Bush Administration, as discussed in the next section.

Table 1: U.N. Framework Convention on Climate Change
and the Energy Policy Act of 1992: Correspondences of Selected Provisions

Results: Action Plans

The notion that the U.S. could meet modest CO₂ emission reduction goals at little or no cost underlies many of the global climate change initiatives during the Bush and Clinton Administrations, including the Bush Administration's "No Regrets" policy and 1992 Climate Action Plan, and the Clinton Administration's 1994 and 1997 Climate Action Plans.⁽⁹⁾ This approach to climate change policy allowed the two Administrations to avoid requesting regulatory authority from Congress to implement a climate change policy. This left them with the option of undertaking governmental implementing actions that could be done administratively, unless Congress legislated otherwise, and creating incentives for private industry to voluntarily undertake emissions reduction initiatives.

The Bush Administration's National Action Plan: "No Regrets". To meet the obligation of the FCCC, the Bush Administration issued in December, 1992, the first U.S. plan, National Action Plan for Global Climate Change.⁽¹⁰⁾ This plan consisted primarily of (1) estimating U.S. emissions of greenhouse gases and (2) describing then-existing activities affecting them. These activities were dominated by research initiatives supplemented by programs proposed in the National Energy Strategy⁽¹¹⁾ or anticipated as resulting from the recent passage of EPACT, along with the Environmental Protection Agency's (EPA) various pollution prevention, "green" initiatives begun in 1991.⁽¹²⁾ These mostly voluntary initiatives, led by EPA's "Green Lights" program, formed the core of the Bush Administration's "No Regrets" policy and followed the recommendations of the 1991 Intergovernmental Panel on Climate Change (IPCC) report for countries to consider taking actions on global climate change that were:

• Beneficial for reasons other than climate change and justifiable in their own right -- for example, increased energy efficiency....
• Economically efficient and cost-effective, in particular those that use market-based mechanisms.
• Able to serve multiple social, economic and environmental purposes.
• Flexible and phased, so that they can be easily modified to respond to increased understanding of ... climate change.
• Compatible with economic growth and the concept of sustainable development.
• Administratively practical and effective in terms of application, monitoring, and enforcement.
• Mindful of the obligations of both industrialized and developing countries in addressing this issue, while aware of the special needs of developing countries, in particular in the areas of financing and technology.

As codified by the national action plan, the combination of EPA and DOE programs were forecasted to hold U.S. greenhouse gas emissions at near their 1990 levels in the year 2000. Emissions were projected to rise by only 1.4%-6% over that time period, compared to a projected rise of 13% under a "business as usual" scenario. Table 2 summarizes the principle actions the Bush Administration envisioned and the anticipated reductions in greenhouse gases in millions of metric tons of carbon-equivalent (MMTCE).⁽¹³⁾

Table 2: Selected Major Reduction Strategies Listed by the Bush Action Plan

^aBased on a projected reduction of 150-200 MMTCE as presented in Table 12 of Bush National Action Plan (adjusted for CH₄ at GWP of 22).

Basically, the Bush plan was a "compendium" of what was then known about greenhouse gas emissions and of existing or planned domestic actions that affected those gases. The primary reason for these actions were to conserve energy and to reduce air pollution -- any global climate change benefits would be a bonus. (Thus exemplifying "no regrets" -- the action is one that is undertaken for other reasons.) The goal of the Bush plan was to present a baseline that "should assist in measuring and evaluating existing policies and measures and in establishing a basis for future actions." The plan expressly "does not seek to identify or recommend additional policies and measures that might be taken." Underlying this approach, it appeared, was the presumption that uncertainties about global climate change were too great to justify actions beyond research except for so-called "no-regrets" initiatives justifiable on other grounds, such as selected energy conservation measures. Reflecting this attitude, the Bush plan was explicit about a number of uncertainties, for example, in using two estimates of the global warming potential (GWP) for methane; additionally, the Bush plan discussed adaptive measures before discussing mitigation measures.

The Clinton Administration's National Action Plans: Industrial Strength "No Regrets". Following a June 1993 White House Conference on Global Climate Change, the Clinton Administration in October 1993 issued a new plan, The Climate Change Action Plan.⁽¹⁴⁾ This plan explicitly set a goal of reducing U.S. greenhouse gas emissions to 1990 levels in the year 2000; and laid out of series of nearly 50 program activities to achieve the goal, including both enhancement of earlier programs and new, mostly voluntary, initiatives. It was not submitted to the FCCC, but was described as the core of a forthcoming submission to meet the obligations of the convention. In March 1994, the Administration issued a technical supplement that documented the assumptions and parameters used in developing the supporting analysis for the plan.⁽¹⁵⁾ Also in 1994 the Administration submitted its Climate Action Report to the convention, and a revised version was submitted in 1997.

Philosophically, the Clinton Action Plans were similar to that developed under the Bush Administration. Both were designed to foster market choices that would conserve energy, increase energy efficiency, and encourage natural gas use. Both were also designed to strengthen selected regulatory standards that concomitantly also reduced greenhouse gas emissions -- such as landfill regulations that curtail methane releases. As indicated in table 3, several actions in the 1993 Clinton plan expanded programs listed in the Bush plan by augmenting funding or technical support to increase anticipated reductions. Other Clinton proposals were new; examples included a "Golden Carrot" program to induce efficiency improvements of industrial equipment, a renewable energy consortium, a program to encourage employers to replace parking subsidies with cash incentives for solo commuting, and a program to promote more efficient nitrogen fertilizer use.

Table 3: Selected Major Reduction Strategies Under the 1993 Clinton Action Plan

Under the 1993 Clinton plan, total greenhouse gas emissions were projected to return to their 1990 levels by the year 2000, although CO₂ emissions alone would rise about 2 percent. By 1997, the projected greenhouse gas emission reductions of the Clinton plan was revised downward to 76 MMTCE, from 109 MMTCE in the 1993 plan. In addition, the baseline for greenhouse gas emissions in the year 2000 was increased by 157 MMTCE from that projected in 1993. Thus, rather than returning emissions to their 1990 levels in the year 2000, the 1997 plan projected a 188 MMTCE increase in emissions, or 13% above 1990 levels.⁽¹⁶⁾

The Administration blamed this failure to reduce emissions in 2000 to the 1990 level primarily on unanticipated economic growth and on Congress not fully funding the programs.⁽¹⁷⁾ Despite this, the basic rationale of the Clinton plan remained: the plan "combines an array of public-private partnerships to stimulate the deployment of existing energy-efficient technologies and accelerate the introduction of innovative technologies. The goal of these programs is to cut CO₂ emissions, while enhancing productivity domestically and U.S. competitiveness aboard."⁽¹⁸⁾ The echo of the 1991 NAS report was clear: the cost to control greenhouse gas emissions would net out to zero, or even save money, depending on how the benefits from increased efficiency were estimated.

Kyoto and S.Res. 98

A central component of the FCCC was its establishment of a conference of parties (COP) to negotiate further agreements to counter global climate change.⁽¹⁹⁾ The first two COPs were held in Berlin in 1995 and 1996.⁽²⁰⁾ At COP-1, several industrialized countries, including the United States, expressed concern that newly industrializing countries, such as Brazil and China, would continue to be classified as non-annex 1 countries -- i.e., developing countries, exempt from possible future legally binding reduction requirements -- despite their projected large increases in greenhouse gas emissions in the future. This issue of exempting such countries from future binding reduction requirements took on heightened importance when ministerial participants at COP-2 signed a declaration calling for "legally binding mid-term targets." Such targets were the subject of COP-3, held in Kyoto in December 1997.⁽²¹⁾

In anticipation of the Kyoto negotiations, the U.S. Senate debated the appropriate U.S. position vis a vis any legally binding agreement to reduce greenhouse gas emissions. On July 25, 1997, the Senate voted 95-0 to approve Senate Resolution 98 (S.Res. 98), expressing the sense of the Senate regarding the conditions under which the United States should become a signatory to any international agreement on greenhouse gases under the FCCC.⁽²²⁾ Specifically, the resolution states that the U.S. should not sign any agreement limiting developed countries' greenhouse gas emission (e.g., the U.S.) unless that agreement also includes specific schedules to limit developing countries' greenhouse gas emissions over the same period. In addition, no agreement should be signed that would "result in serious harm to the economy of the United States."

S.Res. 98 also states that any agreement sent to the Senate for advice and consent should include a detailed discussion of required legislative and regulatory actions to implement the treaty and a cost analysis of an implementation strategy. These conditions for Senate consideration of a treaty illustrate the Senate's concern about the cost of any agreement to the U.S. economy and consumers, the competitive effects on U.S. trade, and the environmental effectiveness of a treaty that exempts increasingly important greenhouse emitting developing countries. By requiring re-analysis of the costs of implementing binding reduction requirements, the Senate was in effect calling for a reexamination of the NAS report's argument that greenhouse gas emissions could be reduced at modest cost.

That the Kyoto Protocol does not meet the conditions of Senate Resolution 98 is not in dispute: it does not bind developing countries to any schedule of reductions.⁽²³⁾ The Clinton Administration has stated on several occasions that it will not send the Kyoto Protocol to the Senate until at least some developing countries commit to binding goals. Argentina was the first developing country to voluntarily make such a commitment. The Administration has not indicated how many developing countries will have to follow Argentina's lead before it would submit the Kyoto Protocol for Senate consideration. For many critics, no commitment may be comprehensive until the developing world's largest emitters, China and India, sign on.

Stalemate: Conflicting Cost Perspectives

In the face of scientific uncertainty, congressional debate with respect to beginning a mandatory CO₂ reduction program can be categorized by the three-Cs: Cost, Competitiveness, and Comprehensiveness.

Questions about the Low-cost Perspective. The fundamental assumption that has changed between the U.S. ratification of the FCCC and the current delay in the Administration submitting the Kyoto Protocol to the Senate concerns costs. As noted above, the ratification of the FCCC was based at least partially on the premise that significant reductions could be achieved at little or no cost. This assumption helped to reduce concern some had (including those of the Bush Administration) that the treaty could have deleterious effects on U.S. competitiveness -- a significant consideration because developing countries are treated differently from developed countries under the FCCC. Further ameliorating this concern, compliance with the treaty was voluntary. While the United States could "aim" to reduce its emissions in line with the FCCC's goal, if the effort indeed involved substantial costs, the United States could fail to reach the goal without incurring any penalty under the treaty. Indeed, the United States, along with most of the world, will fail to meet the goal set at Rio.

The Kyoto Protocol, if ratified by the Senate, would change the commitment from a voluntary one (that the United States could choose to fall short of without penalty) to a binding commitment (for which the consequences of a shortfall are currently unspecified). This possibility of failing to comply with a binding commitment intensifies one's perspective on potential costs of the U.S. global climate change policy: How confident can one be in the claim that carbon reductions can be achieved at little or no cost? If one has little confidence in this conclusion, the potential for substantial costs lead to concerns about competitiveness and the inclusion or exclusion of developing countries (comprehensiveness). As noted earlier, the competitiveness issue arises because the Kyoto Protocol only places binding reductions on industrialized countries; the newly industrialized and other third world countries face few or no costs under the Protocol. As Congressman John Dingell testified before the Senate Committee on Foreign Relations on S.Res. 98:

[W]ho is representing America's interests? The question I think underneath that is the one that you expressed, Mr. Chairman, and that my good friend Senator Byrd expressed. Are we setting the United States up for an economic fiasco? Are we going to assume burdens that no one else in the world is assuming?...The developing countries are scot-free. We do not have a single binding commitment from them.⁽²⁴⁾

A number of economic analyses have intensified this concern about costs. It is estimated that to meet the U.S. commitment in the Kyoto Agreement, "business as usual" emissions in 2010 will need to be reduced by 390 to 660 million metric tons of carbon equivalent per year⁽²⁵⁾; a number of economic analyses⁽²⁶⁾peg the cost at between $50 and$300 a ton, depending on the degree of emissions trading that is achievable. Costs of this magnitude give an annual price tag of roughly $20 billion to $200 billion. Even accepting the Administration's cost estimate of between $14 and $23 a ton (roughly, $5.5 billion to $15 billion per year), the potential cost of meeting the binding reduction commitment of Kyoto causes some to pause to question the NAS conclusion.⁽²⁷⁾

This pause is magnified by concerns about the comprehensiveness of the Protocol. Not only could the costs be high, any environmental benefits from reductions in greenhouse gas emissions by developed countries (including the United States) may be negated by emissions growth in developing countries. Noting that China is projected to surpass the U.S. in carbon emissions by the year 2015, but would have no binding commitments under Kyoto, Senator Byrd asked the Senate Committee on Foreign Relations, during hearings on S.Res. 98:

What good does it do for the United States and other developed nations to work feverishly to plug the holes that we have drilled in the bottom of the boat over the past decades while at the same time the developing nations will be drilling holes, larger holes, at the other end just as fast as we plug them on our end? Be assured that the global boat will sink just as rapidly and we are all going to be in for a long, long swim.⁽²⁸⁾

It is often easy for a country to lead when little or no costs are involved. However, with some questioning the costs assumptions that previously guided U.S. policy, the willingness, or the wisdom, of leading the world with greenhouse gas reductions is also questioned.

Impact on "No Regrets" Programs. The emergence of the perspective that carbon reductions can only be achieved at great cost results in two contending camps -- one believing that carbon reductions can be achieved at little or no cost and the other believing that costs will disrupt the U.S. economy with little environmental benefit. Starting from different presumptions, each tends to be suspicious of the motivations and policy conclusions of the other. Besides the obvious dispute over whether the United States ought to ratify the Kyoto Protocol, the differing perspectives have intensified congressional review of existing programs designed to meet U.S. obligations under the FCCC, which the United States has ratified. Thus those who presume reductions can be achieved at little cost see such programs as justified by conserving energy or reducing pollution and have "no regrets" about supporting them. But those who fear great costs are worried that such programs are actually a "backdoor" effort to implement Kyoto, which has not been ratified by the United States or entered into force, and represent a first step along a path of escalating costs.⁽²⁹⁾

As noted earlier, some of the energy conservation and pollution reduction programs that also reduce greenhouse gas emissions have explicit statutory basis, particularly EPACT. However, other programs represent Bush and Clinton Administration initiatives taken as part of either the National Energy Strategy (Bush), or one of the National Action Plans under the FCCC (both Bush and Clinton). Although these programs are consistent with the U.S. commitment to a voluntary reduction of emissions under the FCCC, they have not been explicitly authorized by Congress. This situation has led to the appropriations process as the primary review mechanism for such programs, and several contentious debates over proposed riders to prevent the Administration from somehow implementing Kyoto without seeking Senate approval of the Protocol.⁽³⁰⁾

Conclusion: Battle of Policy Perspectives⁽³¹⁾

Up to the Kyoto Protocol, the thrust of U.S. policy, as represented by its national action plans, focused on technological and efficiency improvements⁽³²⁾ -- improvements that promised to reduce carbon emissions at little or no costs, and with "no regrets." As noted earlier, the 1997 Climate Change Action Plan continues to base the Administration's climate change policy on technology development and efficiency improvement as a means of reducing emissions at little or no costs. This position was reiterated in the President's 1998 $6 billion Climate Change Technology Initiative. As summarized by National Economic Council Chairman Gene Sperling with the introduction of the President's initiative:

We think that this package is a very good example of what we spoke about when we said that there were win-win opportunities for positive incentives that would clearly show how we can address the issue of climate change and strengthen our economy at the same time.⁽³³⁾

For those who hold to this technological perspective, the ratification of Kyoto Protocol would improve the possibilities for improved efficiency and technology by creating a stronger market for such innovations. They see concerns that increased costs would destroy U.S. competitiveness as unfounded; indeed, they see increased efficiency and innovation as improving U.S. competitiveness. They contend that United States not only can afford to take the lead in carbon reductions (negating the comprehensiveness concern), but should do so in order to increase its technological leadership as well as to provide an example to the third world.

To those who are skeptical of the low-cost assumption but who may have been willing to accept such a scenario when it was voluntary, the above scenarios appear overly optimistic. Looking at economic analyses from various sources, they do not see the potential economic costs of Kyoto resulting in commensurate environmental benefits, particularly with the developing world excluded from controls. From their perspective, the reward does not appear to be worth the risk, and until it does, the country would be better off keeping its options open rather than moving down an unsure and potentially very expensive track.

Where does this leave the debate at this time? The focus on costs represents an attempt to determine whether action is prudent, given the uncertainty of the risk. Besides the scientific uncertainty involved in global climate change, the Kyoto Protocol adds an additional risk because of its exclusion of developing countries. Will developing countries follow the developed countries in reducing or retarding the growth in their emissions? How much might the United States pay before finding out? If one believes that the costs of greenhouse gas emissions reductions is modest, these questions are not as risky as they first appear. In particular, if one is following a "no regrets" policy, then actions on global climate changes are justified on other grounds, so there is no risk at all with what the developing world may or may not do.

However, if one perceives substantial costs from reducing carbon emissions, the uncertainty about any benefits raises serious questions as to the prudence of such action. From such a policy perspective, the Kyoto Protocol as it stands appears fatally flawed, and the United States should avoid any effort to implement it.

This clash of perspectives is likely to ensure that costs remain a pivotal issue, along with scientific uncertainty, as the global climate change policy debate continues.

Footnotes

1. ^(back) For further information on global climate change, see the CRS Electronic Briefing Book at
http://www.cnie.org/nle/clim-7/ebgcctop.html  

2. ^(back) National Academy of Sciences, Policy Implications of Greenhouse Warming, (Washington, D.C.: National Academy Press, 1991), p. 73.

3. ^(back) For a review of the negotiations, see Susan R. Fletcher, Earth Summit Summary: United Nations Conference on Environment and Development (UNCED), Brazil, 1992, CRS Report 92-374. For previous activities, see Wayne A. Morrissey, Global Climate Change: A Concise History of Negotiations and Chronology of Major Activities Preceding The 1992 U.N. Framework Convention, CRS Report 98-43.

4. ^(back) Congressional Record, Vol. 138 (October 7, 1992), 33520-33527

5. ^(back) United Nations Framework Convention on Climate Change (FCCC), Article 2.

6. ^(back) For a summary of provisions, see Environment and Natural Resources Policy Division, Science Policy Research Division, and Economics Division, Energy Policy Act of 1992: Summary and Implications, CRS Report 93-134.

7. ^(back) Department of State, National Action Plan for Global Climate Change (Washington, D.C.: Department of State, 1992), p. 73.

8. ^(back) Committee on Energy and Commerce, Comprehensive National Energy Policy Act, House Rept. 102-474, Part 1, March 30, 1992, p. 152.

9. ^(back) On the "no regrets" policy of the Bush Administration, see: C. Boyden Gray and David B. Rivkin, Jr., "A "No Regrets" Environmental Policy," Foreign Policy, summer 1991, pp. 47-65; for the various action plans, see: U.S. Department of State, National Action Plan for Global Climate Change, Department of State Publication 10026, December 1992; U.S. Department of State, Climate Action Report, Department of State Publication, 1994; and U.S. Department of State, Climate Action Report, Department of State Publication 10496, July 1997.

10. ^(back) For a further discussion of this plan, see: Larry B. Parker and John E. Blodgett, Climate Change Action Plans, CRS Report 94-404.

11. ^(back) Department of Energy, National Energy Strategy, Washington, D.C.: U.S. Govt Print. Off., February 1991.

12. ^(back) For a summary of these and other voluntary pollution control programs, see James E. McCarthy, Voluntary Programs to Reduce Pollution, CRS Report 95-817. When challenged on the explicit statutory basis for these voluntary programs, EPA cites several authorities, including the Clean Air Act (section 103), the Pollution Prevention Act of 1990 (sections 6602 and 6606), and the Global Climate Protection Act of 1987 (section 1103). House, Subcommittee on VA, HUD, and Independent Agencies, Committee on Appropriations, Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations for 1999, part 7, Environmental Protection Agency (105^th Congress, 2^nd session), pp. 55-59, 196-206, 1056-1063.

13. ^(back)  MMTCE converts the global warming potential of different greenhouse gases into a common unit.

14. ^(back) This plan became the basis for the 1994 submission to the FCCC. For a further discussion of the plan, see Larry B. Parker and John E. Blodgett, Climate Change Action Plans, CRS Report 94-404.

15. ^(back) U.S. Department of Energy, The Climate Change Action Plan: Technical Supplement, Washington, D.C.: DOE/PO-0011. March 1994.

16. ^(back) Climate Action Report (1997), p. 125.

17. ^(back) Climate Action Report (1997), p. 10.

18. ^(back) Climate Action Report (1997), p. 90.

19. ^(back) For a summary of these meetings, see Wayne A. Morrissey and John R. Justus, Global Climate Change, CRS Issue Brief 89005, updated regularly.

20. ^(back) For further information, see: Wayne A. Morrissey, Global Climate Change: Adequacy of Commitments Under the U.N. Framework Convention and the Berlin Mandate, CRS Report 96-699.

21. ^(back) For further discussion, see: Susan R. Fletcher, Global Climate Change Treaty: Negotiations and Related Issues, CRS Report 97-1000.

22. ^(back) Senate Committee on Foreign Relations, Conditions Regarding U.N. Framework Convention on Climate Change, S.Rept. 105-54, July 21, 1997.

23. ^(back) For a summary of provisions, see: Susan R. Fletcher, Global Climate Change Treaty: The Kyoto Protocol, CRS Report 98-2.

24. ^(back) Senate Report 105-54, p. 27.

25. ^(back) Larry Parker and John Blodgett, Global Climate Change: Reducing Greenhouse Gases: How Much from What Baseline, CRS Report 98-235.

26. ^(back) For a review of several cost analyses, see: Energy Information Administration, Impacts of the Kyoto Protocol on U.S. Energy Markets and Economic Activity, DOE Report SR/OIAF/98-03, October 1998, pp. 137-151.

27. ^(back) White House, The Kyoto Protocol and the President's Policies to Address Climate Change: Administration Economic Analysis, July 1998.

28. ^(back) Senate Report 105-54, p. 16.

29. ^(back) For further discussion of "back door" concerns, see Wayne A. Morrissey, Global Climate Change: Congressional Concern About "Back Door" Implementation of the 1997 U.N. Kyoto Protocol, CRS Report 98-664.

30. ^(back) For a review of proposed legislative vehicles to restrict Administration's actions with respect to Kyoto, see Wayne A. Morrissey, Global Climate Change: Congressional Concern About "Back Door" Implementation of the 1997 U.N. Kyoto Protocol, CRS Report 98-664; for a specific example of this suspicion, see: House Committee on Appropriations, Subcommittee on VA, HUD, and Independent Agencies. Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations for 1999, Hearings, part 7: Environmental Protection Agency, pp. 54-59.

31. ^(back) For an analysis of the impacts of policy perspectives on costs, see: Larry Parker and John Blodgett, Global Climate Change: Three Policy Perspectives, CRS Report 98-738.

32. ^(back) Larry Parker and John E. Blodgett, Global Climate Change: Three Policy Perspectives, CRS Report 98-738.

33. ^(back) As reported in Daily Environment Report, "Administration Announces $6.3 Billion Plan of Spending, Tax Credits to Curb Emissions," February 2, 1998, p. AA-1.