13 December 2003 10:06
EU/RUSSIA/UNITED STATES: AMERICANS AND RUSSIANS ON SAME WAVELENGTH IN CLIMATE TALKS
In order to become applicable, the Kyoto Protocol has to be ratified by at least two of the heavyweights, but this
prospect is apparently a long way off. US industry has sent out a clear message: the economic costs of cutting
greenhouse gas emissions are higher than the European Commission forecasts. The Americans are slamming the European
economic model chosen to assess how the Protocol will impact on the various economies. Margo Thorning, Managing Director
of the International Council for Capital Formation, reckons the PRIMES model (a partial equilibrium model) provides only
a partial view of the implications. When economic models covering other sectors apart from energy are used, the impact
is 1% of GDP, much more than the 0.12% by 2010, as the European Commission is suggesting. Macro-economic models are even
more revealing, as these show GDP losses on the order of 1.8 to 5% by 2010. ICCF research findings conflict sharply with
those of the European Commission, which recently published a survey, called Acropolis, offering a summarised version of
several economic models (see European Report 2826, Section IV, for further details). The US Government believes the
Protocol's cost will be about 4% of GDP, premised on a macro-economic model factoring in economic adjustments to
the new policies.
Consequently, the solutions ICCF recommends are quite obvious: technological development (including tax incentives to
promote investment), carbon sequestration (i.e. collecting or trapping carbon from the atmosphere, which can be done in
a number of ways, with the most popular being to use land and trees to suck it up - these areas are then called
"carbon sinks"), extended us of nuclear energy, cooperation with developing countries and considering a global
solution (which would not rule out certain potential or recognised major producers of CO2, such as China).
Russia.
One of the speakers deserves a special mention against the background of the present climate negotiations: Peter F.
Kaznacheev, economic advisor to the Russian President, Vladimir Putin. He believes Russia would suffer from ratifying
the Kyoto Protocol, which he describes as unfair for his country. Several countries could continue to produce CO2
without any restrictions. Examples are the United States and China. In terms of emissions per unit of GDP, Russia's
output is insignificant along with the Virgin Islands (United States), Qatar, Bahrain, Iraq and the Ukraine. And the
disparity is even more glaring in terms of per capita emissions. Mr Kaznacheev had various charts to show that countries
that ought to cut their emissions are not signatories of the Protocol. Why should Russia's hands be tied, when
others are not following suit? Another reason for Russia to spurn the Protocol was cited earlier by President Putin
himself: climate change can only be beneficial for Russia, which is after all generally a cold country. On the subject
of costs, Mr Kaznacheev said signing up to the pact during Russia's economic transition would put a brake on the
country's economic growth. This position was upheld on December 4 by Andrei Illarionov, Mr Putin's chief
economist, on the sidelines of the meeting of the Parties to the Climate Convention (see European Report 2626, same
Section).
[CEIW] |
RUSSIA IN FACTS
