More on Kyoto

Scott Wickstein raises a bunch of issues about the economists’ statement in support of Kyoto. First, is the question of cost-benefit ratios. There are a lot of measures (e.g. withdrawing subsidies from the aluminium industry) that would both reduce emissions and reduce national income. A full implementation of Kyoto based on tradeable emissions quotas would cost less than 0.5 per cent of GDP ($3 billion per year) on most estimates.
Admittedly, this is, essentially a first installment. A serious response to global warming will require much deeper cuts in emissions and the involvement of developing countries. But the alternative of doing nothing is too awful to contemplate, which is why opponents of Kyoto try to divert attention away from this point. At a minimum, the costs would include the loss of most or all of the world’s coral reefs the complete disappearance of many Pacific nations and large-scale flooding in low-lying countries. Vast numbers of species with limited range would become extinct.

In this context, the fact that the current government of the United States (2.5 years left in office) is opposed to any form of international treaty, is an unfortunate obstacle, but scarcely decisive. The US, is after all, a debtor nation with a massive trade deficit. When Kyoto is ratified, it will be possible to impose tariffs on exports of non-complying countries if those exports embody substantial untaxed use of carbon. And. among the many treaties the US is currently repudiating, Kyoto is the one with the strongest domestic political support.

Of course, the complying countries would not be in a hurry to pick a fight with the US. It would be much easier to start by making an example of a US lapdog with big dependence on energy-intensive exports and no real capacity for retaliation – any guesses as to who will be the first target?

Update: Scott also endorses the rantings of the ironically self-styled Anti-Idiotarian Rottweiler. If you want to see why the US is overstretching its capacities in all respects, you only have to observe that stuff like this is taken seriously there.