Capital Commerce: A lot of hot air on climate
Prime Minister Tony Blair today said the G-8 countries would begin new talks on climate change in November. Leaders of the world's wealthiest nations could not yet reach consensus on what to do about climate change, although they were working toward adopting language affirming that human activity had contributed to global warming to an extent. President Bush, however, has stood firm against the mandatory cutbacks for developed countries contained in the Kyoto treaty, saying, "It would have wrecked our economy, if I can be blunt."
Instead of restricting carbon dioxide emissions from fossil fuel burning in industry and transportation, the Bush administration has pursued what it calls an "ambitious national goal" of slicing the nation's "carbon intensity" 18 percent from 2002 to 2012 through voluntary measures. This week, the bipartisan National Commission on Energy Policy crunched some numbers demonstrating that this policy yields some less-than-impressive results. It turns out that the nation's carbon intensity—that's tons of carbon dioxide emitted per dollar of GDP—has been declining with very little push from Washington, as businesses attempt to become more energy efficient to save money on oil and natural gas.
U.S. carbon intensity declined 18 percent in the past decade (and 25 percent in the past 15 years), so the Bush administration's 2012 goal essentially represents the status quo. Furthermore, U.S. carbon emissions in absolute terms have increased 13 percent in the past decade and 17 percent in the past 15 years; the nation's rank as the world's No. 1 contributor to greenhouse gases, in other words, remains secure.
Under a bipartisan agreement, the Senate will hold hearings later this month to assess whether mandatory limits can be devised that would not be a blow to the economy. The National Commission on Energy Policy, which includes leaders of some major utilities, has proposed a 4 percent emissions cut by 2015 and a 7 percent cut by 2025. The Energy Information Administration has concluded that this plan's cost to the economy would be about 0.15 percent of GDP. Translation: about $78 per household per year in higher energy costs.