Ninety-five U.S. senators rejected a Kyoto type of treaty in July 1997, five months before 150 nations completed the text of the Kyoto Protocol—the actual rules for curbing emissions. The senators said they would not sign a treaty based on the protocol unless it imposed commitments on developing countries. They took a reasonable position, but one that closed the lid on a box the United States had built around the Kyoto process. No one conspired to build this box; it was just the result of unintended consequences.
Ironically, a great environmental victory in the early 1990s was the first step in constructing the box. As I discuss in Chapter 15, environmentalists and then-President George Bush ended a multiyear stalemate over acid rain by getting coal-fired power plants to accept emission caps imposed under a cap-and-trade policy. That success earned cap and trade the title of most successful market-oriented approach to emissions control. So when the U.S. team went to Kyoto, that was its proposal—to cap and trade greenhouse gas emissions. In the abstract, it made a lot of sense. But the countries of the world proved to be more complicated than coal-fired power plants.
Countries vary enormously in their levels of greenhouse gas emissions, so it’s impossible to cap them all at the same level, and no one suggested that. Instead, the treaty gave every country its own cap. That caused a lot of squabbling and naturally enough led to no caps for countries with low levels of per capita emissions—the poor countries. In effect, China, India, Brazil, and others argued that just because the rich countries started polluting first, they should not get to emit ten times more than poor countries, which have done less damage.
They have a point. But this leaves the Kyoto Protocol with an impossible contradiction. It’s unfair to give poor countries caps that are five, ten, or even twenty times lower, on a per-person basis, than those of rich countries. But without such caps, poor countries have no obligation at all, and unfortunately, developing countries have the fastest-growing levels of emissions. China by itself emits more carbon dioxide than any other country, although its per-person emissions are low. Cap and trade sets up a clash between fairness and effectiveness. What is fair doesn’t work, and what works is not fair. This is the box that the United States has built around the Kyoto Protocol.
This part of the book explains how to break out of the cap-and-trade box safely and effectively. In this chapter, I explain why we must abandon cap and trade as a global system before the world can solve the problems of climate change and energy security.
