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Tuesday, July 10, 2001

Breaking the Kyoto impasse

At the Japan-U.S. summit held June 30, Prime Minister Junichiro Koizumi reportedly told President George W. Bush that to curb global warming it was important to respect the spirit of the Kyoto Protocol. Koizumi also said Japan and the United States should continue discussions on the issue.

Bush reportedly replied that while he respected the pact's purpose of reducing greenhouse-gas emissions, he believed the choice of measures to achieve the goal was important.

On March 28 Bush announced a U.S. decision to withdraw from the Kyoto Protocol because it imposes no obligations on developing countries and is incomplete, and because it would hurt the U.S. economy. On June 11, Bush restated firm U.S. opposition to the Kyoto Protocol, saying it is "fatally flawed."

What did he mean by saying that the pact is fatally flawed?

In my opinion, the two reasons mentioned above do not necessarily make the pact fatally flawed. Japan finds itself in a delicate position, in the middle of the opposing views of the European Union and the U.S. If Japan seeks to coordinate EU-U.S. differences, it must closely examine the meaning of what Bush calls "fatal flaws" and present a compromising proposal that would correct the problems.

I assume that in Washington's view, the Kyoto Protocol is defective because the pact, even if strictly observed, would make little contribution to reducing the atmospheric concentration of carbon dioxide, the increase of which is the main cause of global warming. Washington also likely believes that the pact could discourage technological innovation that could lead to a significant reduction of CO2 emissions. I base my opinion on a controversy among experts of global warming that appeared in professional journals and was a subject of discussion at academic conferences a few years before the Kyoto conference that adopted the protocol.

The controversy focused on the following three points:

First, should the target cover annual emissions or atmospheric concentrations of greenhouse gases? Second, should corrective measures be implemented as early as possible or a few decades later when technological progress make the cost of implementing the measures less expensive? Third, should the target be quantitatively specified with respect to emissions reduction or autonomously attained by effectively utilizing market-oriented measures such as emissions trading?

In all three choices, the Kyoto Protocol supports the former alternative. On the contrary, conservative U.S. economists are apt to choose the latter. In fact, however developed our scientific knowledge may be, there is no way of rationalizing either side, since the choice between the two sides depends on individuals' or nations' view of the world and ideology.

Until the Industrial Revolution in the late 18th century, the atmospheric carbon concentration remained stationary at around 280 ppm. The concentration has risen to 370 ppm nowadays due to the artificial combustion of fossil fuels. To prevent catastrophic global warming, it is imperative to limit carbon concentrations to less than 550 ppm, according to meteorologists.

To achieve this goal, the following questions must be answered: Is it really necessary and sufficient to obligate industrialized nations to reduce their greenhouse-gas emissions at least by 5 percent in the next 10 years? Is it necessary to start implementing measures to reduce emissions so early? Which is more cost-effective, setting numerical targets on emissions of individual countries or using market-oriented measures such as emissions trading? Another question is: Could the Kyoto Protocol unintentionally function as a disincentive in the development of large-scaled technological innovation that would make a significant contribution to reducing CO2 emissions but would require a lead time of a few decades? Hopeful technological innovation includes carbon sequestration, space solar-power systems and improvement of nuclear power generation systems.

Some experts support the Kyoto Protocol because they believe early action is indispensable to prevent global warming. They also oppose developing the above-mentioned large-scale technologies, which could lead to environmental disruption in spite of their potential effectiveness in curbing CO2 emissions. They rather prefer to develop small-scale, renewable power sources at scattered sites rather than concentrating large-scale sources at selected locations. To them, environmental protection should take precedence over economic growth. It is a matter of course that these people support the Kyoto Protocol.

Other experts pin their hopes on developing large-scale technologies and see early actions not only unnecessary but also insufficient. They prefer to push nuclear power plants rather than renewable energy sources. They firmly believe that economic growth takes precedence over environmental protection. In conclusion, they oppose the Kyoto Protocol.

In summary, support for or opposition to the Kyoto Protocol is a matter of philosophies, and this makes the issue all the more difficult. Koizumi told Bush that the spirit of the Kyoto Protocol was important. In making this comment, did Koizumi realize that the U.S. did not approve the spirit of the pact?

Takamitsu Sawa, a professor of economics at Kyoto University, is also the director of the university's Institute of Economic Research.

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