Zugzwang …

June 5th, 2007

… is a term from chess meaning compulsion to move. Most of the time, it’s an advantage to have the next move, but there are situations, particularly in the endgame when you’d much rather it was the other player’s turn.

So it has been with climate change, at least for some players in the game. The big divide in the negotiations for the Kyoto protocol was between the more developed countries, which had created the problem and continued to produce most emissions of greenhouse gases, and the less developed, which were the main source of likely future growth. The agreement reached was that the developed countries would make the first round of cuts, reducing emissions below 1990 levels* by 2012, after which a more comprehensive agreement would require contributions from everyone.

As soon as the Bush Administration was elected though, it denounced this as unfair and said the US would do nothing unless China and India moved first. The Howard government, until then a fairly enthusiastic proponent of Kyoto, immediately echoed the Bush line. Meanwhile, not surprisingly, China and India stuck to the agreement they’d signed and ratified.

The resulting standoff suited lots of people. Most obviously, while the Bushies were denouncing the unfair advantages given to China and India, they were also pushing as hard as they could to ensure that they and other developing countries did nothing that would facilitate a post-Kyoto agreement. And of course plenty of people in China and India were happy enough not to have to take any hard decisions on the topic.

In the last month or so, this has all started to fall apart. The Australian policy debate has shifted to the point where Howard has had to announce support both for emissions trading and for the logical corollary, binding targets for emissions reductions, though he still refuses to give any actual numbers. China and India have agreed to negotiate a post-Kyoto agreement by 2009, though they are still resisting targets.

That has left Bush isolated. Only a week or so ago, the Administration contemptuously rejected a draft G8 meeting statement on climate change prepared by the Germans, who are hosting the meeting. But as Bush’s lame-duck status has become increasingly apparent, his capacity to throw his weight around has diminished. The reaction from the Germans, and the rest of the Europeans was ferocious. It became clear that the G8 meeting would be a disaster, possibly even ending with an overt statement of disagreement, although (as far as I can tell) such an outcome is viewed by those who run these events as unthinkable.

So Bush came out with a plan. As with his response to the recent Supreme Court decision requiring the EPA to control CO2 emissions, Bush came up with a plan that would have no effect until late 2008, by which time his term would be nearly finished. As Dan Froomkin observed, the US reaction showed that Bush still knows how to play the American press like a harp, but the European reaction ranged from tepid (those who interpreted Bush as offering largely meaningless rhetoric) to hostile (those who viewed him as attempting to derail the post-Kyoto process). And this gradually fed back into US coverage.

So, the pieces are moving again, and the system o mutually supportive intransigence is breaking down. It remains to be seen if anything positive can be achieved, but the untenability of Bush’s position is now clear for all to see.

* Australia held out for a special deal, allowing an 8 per cent increase, then decided not to ratify anyway.

Categories: Economics - General, Environment Tags:
  1. observa
    June 5th, 2007 at 11:06 | #1

    As Harry Clarke points out this is pretty good summary of what’s gone on http://www.economist.com/surveys/displaystory.cfm?story_id=9217982
    In particular-
    “But in accepting the idea of federal regulation, companies are not just bowing to the inevitable. There is money in it, too. If the American government adopts a cap-and-trade system (see article), it will hand out permits to pollute. They are, in effect, cash. According to Paul Bledsoe of the National Commission on Energy Policy, those allowances are likely to be worth in the region of $40 billion. Companies therefore want to be involved in designing those regulations. As Mr Rogers explains: “There’s a saying in Washington: if you’re not at the table, you’re on the menu.â€?

    The process has become self-reinforcing. In order to be seen to be green, companies have to lobby for emissions controls. That increases the pressure for emissions controls, which in turn increases the need to be seen to be green.

    The more that American businessmen examine the European system, the less alarming the prospect of carbon constraints begins to look. Not only has it resulted in a lot of cash being handed over, but it has also created a whole new business: the carbon market.”

    Big biz just needed time to recognise it was really snouts and trough time, to drive the politicians. Perhaps US business is not as used to the EU, big govt way of doing things and took longer to recognise a bloody great trough when they saw one. No stopping them now of course.

  2. observa
    June 5th, 2007 at 11:29 | #2

    And when big govt, big biz and big unions start singing the same orthodoxy, some primordial instinct tells me I should be wary of economists bearing the vaseline.

  3. June 5th, 2007 at 11:55 | #3

    that’s not instinct, observa, that’s experience.

    diogenes is reputed to have made a good living by looking for an honest man, publicly. there is no living in searching for an honest politician, or vegetarian hyena, but could there be a crust in searching for an ozzian smart enough to release his forelock and demand democracy?

    it’s a good ‘contrarian’ position, perhaps andrew bolt will take it when his masters tell him climate change is real, and there’s profit in it.

  4. June 5th, 2007 at 15:20 | #4

    John

    Lets be a little more balanced on interpreting history. The Clinton Adminstration who was in power during and after the Kyoto Negotations in 1997 refused to submit the ratification legislation to Congress when it could have. That was because there was bipartisan agreement at that time that the US should not enter the Kyoto Protocol because it’s costs were unknown. And lets be clear why 2008 is the first commitment period in the Kyoto Protocol – this would have been after Al Gore had completed his two terms as President.

    Warwick

  5. jquiggin
    June 5th, 2007 at 15:43 | #5

    Warwick, I think it’s clear that had Gore been declared the winner in 2000, he could and would have pushed Kyoto through – even with a full court press from Bush, the McCain-Lieberman bill got 43 votes.

    More generally, I think the post understates the duplicity of Bush and the Republicans on this issue (as on almost every issue). I didn’t even mention Bush’s doubletalk on the science, officially endorsing science while doing everything possible to undermine it.

  6. rs
    June 6th, 2007 at 06:16 | #6

    The Supreme Court did not make any such ruling. They told the EPA to relook its decision and explain why they didn’t consider the substances named in the suit by MA as pollutants. That’s something the EPA had previously made clear they believed, and it’s in the full SCOTUS decision. They don’t really have to do anything — no timetables, right?

    Well, the US Senate unanimously rejected the plan during Clinton, and they have to validate all treaties. And my opinion is that until such time as the costs (or money to be made) became clearer, as they seem to be now finally and thankfully, Gore wouldn’t have pushed for anything even if he had won in 2000 (nor Kerry if he had worn in 2004). When everyone in the Senate in both parties agrees, what the president thinks matters not. Heck, neither party has the 2/3 needed to block filibusters. My opinion is that in actuality, it has little or nothing to do with money. It has to do with being in control or not. Money’s just an excuse.

    In 2003 however, which was about 6 years later anyway, the bill was an internally controlled matter, not an international one, which is one of the reasons it got so many votes. But look at this gem tucked inside The Lieberman-McCain Climate Stewardship Act:

    “The bill’s emissions limits would not apply to the agricultural and the residential sectors. Certain subsectors would be exempt if the Administrator determined that it was not feasible to measure their GHG emissions.”

    http://www.pewclimate.org/policy_center/analyses/s_139_summary.cfm

    Q: How can you tell a politician is lying?
    A: Their mouth is moving.

    It’s all posturing.

    Speaking of the Supreme Court, as to being “declared” the winner, there was no such thing. The Supreme Court found that the deadline was absolute, constitutionally, and the counting stopped. Bush won it, based upon a Supreme Court decision that upheld the law, although mostly what I’d call a procedural issue. Regardless, the fact is that every meaningful recount of Florida after the debacle found Bush still would have won the electoral votes in Florida, so the point is moot. That the media started it all by calling the state while the polls were still open in other time zones was the disgrace. (And I sometimes halfway think it was all an act to keep the masses arguing about the subject and not paying attention to the sad lack of either party really doing anything meaningful.)

    But how is deciding overall policy direction and letting agencies do their job undermining science? Yes, while I wouldn’t say anyone in the US is rushing to get a whole lot done, a few things are being done. This will increase as a matter of policy in time. I think we can all see it coming.

    The question is for 2008, is it Obama, Clinton or Gore? Or do the Republicans pull a rabbit out of their hat?

  7. rs
    June 6th, 2007 at 08:34 | #7

    I meant, the EPA’s position is that the substances in the suit (carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons) were not regulatable by it.

    Two small bits of a very long petion of denial.

    [Federal Register: September 8, 2003 (Volume 68, Number 173)]
    [Notices]
    [Page 52922-52933]

    http://frwebgate6.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=080990124340+0+0+0&WAISaction=retrieve

    In a memorandum to the Acting Administrator dated August 29, 2003, the General Counsel concluded that the CAA does not authorize EPA
    to regulate for global climate change purposes, and accordingly that CO2 and other GHGs cannot be considered “air pollutants” subject to the CAA’s regulatory provisions for any contribution they may make to global climate change.

    —–

    As summarized above, commenters supporting the petition claim that section 202 of the CAA provides EPA with broad authority to set
    standards for motor vehicle emissions of CO2 and other GHGs to the extent those emissions cause or contribute to global climate change. At the same time, other commenters correctly note that (1) no CAA provision specifically authorizes global climate change regulation,
    (2) the only CAA provision specifically mentioning CO2 authorizes only “nonregulatory” measures, (3) the codified CAA provisions related to global climate change expressly
    preclude the use of those provisions to authorize regulation, (4) a Senate committee proposal to include motor vehicle CO2 standards in the 1990 CAA amendments failed, (5) Federal statutes expressly addressing global climate change do not authorize regulation, and (6) numerous congressional actions suggest that Congress has yet to decide that such regulation is warranted. These indicia of congressional intent raise the issue of whether the CAA is properly interpreted to authorize regulation to address global climate change.

    ….

    Or as Scalia says:

    As mentioned above, the Court gives EPA the option of determining that the science is too uncertain to allow it to form a “judgmentâ€? as to whether greenhouse gases endanger public welfare. Attached to this option (on what basis is unclear) is an essay requirement: “If,â€? the Court says, “the scientific uncertainty is soprofound that it precludes EPA from making a reasoned judgment as to whether greenhouse gases contribute to global warming, EPA must say so.â€? Ante, at 31. But EPA has said precisely that – and at great length, based on information contained in a 2001 report by the National Research Council (NRC) entitled Climate Change Science:An Analysis of Some Key Questions…

    quote follows

    http://www.supremecourtus.gov/opinions/06pdf/05-1120.pdf

  8. jquiggin
    June 6th, 2007 at 09:08 | #8

    Just for those who haven’t been following closely, the quote is from Scalia’s *dissenting* opinion.

  9. derrida derider
    June 6th, 2007 at 10:02 | #9

    I’m very, very pessimistic. I tell my kids to go skiing while they can – there’s gonna be a lot less opportunity in the future.

    I think we’ll only get effective limits on greenhouse gases until far, far too late and that consequently they’ll have to hurt far, far more than they should. Apart from the obvious chance pollies of all stripes have to play domestic policy games with well-heeled lobbies, the payoff for a free-riding country (and hence the temptation to do so) is likely to become huge once international quotas or taxes start to really bite.

    I dunno if Warwick’s scheme is really a goer (not my area of expertise), but I reckon it’s right to emphasise long-run political economy.

    As for the denialists and obstructionists (which includes our current government), it’s time to start treating them as actively evil rather than merely deluded or short-sighted. They are sabotaging my kids’ future in a big way.

  10. June 6th, 2007 at 10:58 | #10

    DD — you shouldn’t take it personally. Given that GDP is correlated with life expectancy & infant mortality and many people prefer policies that decrease GDP then it is possible to get personally offended that people are actively and evily trying to kill people and undermine our children’s future… but I’m not that negative about human nature.

    Never attribute to evilness what can just as easily be explained through stupidity. :)

    Not that I think skepticism is stupid either… but that’s a different issue.

  11. June 6th, 2007 at 12:25 | #11

    Lets be a little more balanced on interpreting history.

    Oooh I love it when economists clash :)

    Its pure conjecture whether Gore could have got Kyoto through Congress if he’d been “declared the winner” (nice) in 2000. Frankly, I think its unlikely even if Gore had the courage to push it. I think it will still be unlikely even if the greenest of the Presidental candidates (Richardson? Edwards?) were to win a thumping victory in 2008.

    OTOH, Warwick would surely have to admit that with Bush as President there has been zero progress on U.S. climate change policy.

    ProfQ, I think Warwick is a very important figure in the climate change debate in Australia. Much like Greg Hunt, he’s convinced the conservatives from within to take climate change seriously. I don’t think we would be where we are today without Warwick’s contribution.

  12. jquiggin
    June 6th, 2007 at 14:02 | #12

    JH #10 A nice example for discussions of correlation and causation. It’s true that GDP is positively correlated with LE. It was also true, until recently, that expenditure on tobacco (a component of GDP) was positively correlated with LE.

    So, despite the +ve correlation, there are plenty of potential policies that reduce GDP and increase LE. Reductions in pollution are an obvious example.

  13. Ken
    June 6th, 2007 at 16:58 | #13

    I have to agree pretty much with DD. All talk of how harmful getting serious about AGW will be for our economy appears based on not including negative effects of AGW in projections. In some ways that remains beyond our predictive powers, however when there are coastal inundations, droughts and famines it’s reasonable to predict refugee migrations and conflict, when water is scarce and the upstream users leave none for downstream we can predict famine, conflict and refugee migrations. When the wealthiest nations decline to act and the impact is most felt in poorer nations we can predict resentment, hatred and breeding grounds for terrorism and war. None of that is amenable to economic modelling but it’s easy to predict it will be very costly.

    These things don’t appear in neat GDP versus LE graphs. It’s all very well to feel that the negative impact is overstated and it’ll be business as usual, but that isn’t what the best attempts at prediction are saying.

    Meanwhile an idealogical dislike of regulation and imposed limits on emissions combined with a belief the problem is overstated (or a wicked conspiracy to expropriate individual right and impose regulation) leaves the problem unaddressed.

    Think of it as a matter of National and International Security, because I do believe that’s what it is.

  14. Brian Bahnisch
    June 6th, 2007 at 18:15 | #14

    I think a penalty-free future of uninterrupted economic growth is an illusion under the ‘business-as-usual’ scenario. Hence what Ken envisages is only too possible.

    Getting back to the G8, Merkel has made it clear that she intends to hold firm on the 2C limit to avoid dangerous climate change and the 50% emissions reduction target by 2050. She also insists that the international effort should proceed under the auspices of the UN.

    Both are seen as under threat by Bush’s initiative.

    She also believes that India and China will not come on board until the developed countries commit unequivocally to meaningful reductions. She’s probably right about this. The developing countries have been dudded multiple times by fine words and promises in the field of trade.

    The American and the German positions (remembering that the German position is the EU position) are clearly incompatible and Merkel is preparing the German public for failure.

    Blair is playing his usual game in his last big outing as PM – agreeing with Europe (which nevertheless still seems ‘other’ from where he stands), praising Bush, and trying to broker agreement. I suspect Merkel would prefer it if he just stayed out of the way.

  15. rs
    June 7th, 2007 at 02:51 | #15

    Right, in #7, the quote was from one of the two dissenting opinions the other 4 signed. Sorry, I thought it was clear in context (he uses “The Court” to refer to the majority). Also, that’s why I included the link to the full opinion. But I should have clarified it…

    My point was The Court told the EPA to explain “whether green-house gases contribute to global warming” when that’s not even really the issue. The EPA has already said that they DO contribute! If you read the entire opinion and the EPA’s denial of petition and then balance them against each other, there’s nothing of substance here. Nothing will change; no timetime or requirements to do anything have been issued. 68 Fed. Reg. Section C (No Mandatory Duty) is pretty clear about it.

    The Supreme Court told them to relook the issue and the Clean Air Act does indeed authorize the EPA to regulate GHG under the CAA. I’ve read the petition denial, and how anyone came to that conclusion is quite beyond me, but there you go. So what does it mean?

    The EPA’s already answered it in 68 Fed. Reg. “An administrative agency properly awaits congressional direction before addressing a fundamental policy issue…” They also made it clear in that policy decision they take direction ONLY from Congress on this issue. And specifically that they would not regulate motor vehicle GHG emissions even if they had the authority! We’ll see how that plays out.

    My opinion is they’ll just drag their feet on this. Take some time to read that “C. No Mandatory Duty” for a discussion of that. “B. Interference With Fuel Economy Standards” and “D. Different Policy Approach” are interesting also. That all starts on page Page 52929 in
    [Federal Register: September 8, 2003 (Volume 68, Number 173)] [Notices] [Page 52922-52933]
    From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr08se03-66]

    Lastly, if you read what the EPA says in part VI of that document, this is pretty clear what the plan is “…near-term voluntary actions and
    incentives along with programs aimed at reducing scientific uncertainties and encouraging technological development so that the government may effectively and efficiently address the global climate change issue over the long term.”

    Of course, all this information is around 4 years old. We’ll see what happens…

  16. jquiggin
    June 7th, 2007 at 08:39 | #16

    “My opinion is they’ll just drag their feet on this.”

    Yes, that was what I said in the post.

  17. rs
    June 13th, 2007 at 08:29 | #17

    And I agree!! I just like taking the long road……

    And no, I don’t know why I find the subject so interesting. :)

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