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By Rachel Massey, a consultant to Environmental Research.
During November, while Americans were preoccupied by questions of rigged elections, representatives of 170 countries met in The Hague, Netherlands, to tackle what is arguably the biggest environmental problem we face -- global warming. The meeting at The Hague was supposed to fill in the blanks of the Kyoto Protocol, a 1997 international treaty intended to combat global warming by ensuring that countries limit their emissions of carbon dioxide and other greenhouse gases, chiefly by reducing the combustion of coal, oil and gasoline (so-called "fossil fuels").
Many scientists consider global warming the biggest environmental problem of the 21st century because they expect it to change weather patterns, spread serious diseases like malaria and dengue fever, and cause droughts, floods, large storms, and major shifts in water supplies.
The goal at The Hague was to spell out how each country would curb greenhouse gas emissions to comply with limits established at Kyoto in 1997. Instead, negotiators left The Hague after two weeks with no agreement. The negotiations collapsed largely because of efforts by the U.S. negotiators to get emission reduction "credits" for existing vegetation, such as trees or crops growing within U.S. borders.[1]
Trees and other plants remove carbon dioxide from the air and store it in their tissues. Negotiators refer to them as "carbon sinks" -- places where carbon is stored in solid form after it is pulled from the atmosphere. The U.S. negotiators wanted credit for vegetation "sinks," as a way of minimizing the need to change how we use energy in the U.S. The U.S. is the world^s largest emitter of carbon dioxide from fossil fuels. And our energy use is notably inefficient; for example, we emit about twice as much carbon dioxide per person as Germany does.[2]
U.S. negotiators insist that curbing the use of fossil fuels will hurt the U.S. economy. But a new study challenges that premise, showing in detail how we could reduce U.S. carbon dioxide emissions by increasing the efficiency of our economy.
Fossil fuel companies have worked relentlessly to convince the American public that global warming is a Chicken Little fantasy. The insurance industry, on the other hand, knows that global warming is real because hurricanes, cyclones, and floods between 1990 and 1995 cost the industry about fifteen times as much as such events had cost in the 1980s.[3, pg. 10] Recently even a few oil companies have decided to come clean. British Petroleum and Shell Oil, for example, have now withdrawn from the Global Climate Coalition, an industry group that tries to dismiss the science on global warming.[4]
As opportunities to misrepresent the science diminish, opponents of precautionary action have stirred economic fears, arguing that curbing greenhouse gases will create economic disaster. But according to a new study funded by the U.S. Department of Energy and carried out by five U.S. national laboratories, the opposite is true. The study, SCENARIOS FOR A CLEAN ENERGY FUTURE (CEF), shows how energy use could be reduced in each of four broad economic sectors -- buildings, industry, transportation, and electricity -- and concludes that it would help, not hurt, our economy to make the needed changes.[5]
For each sector, the CEF study examines "market barriers" that limit our incentives, or our ability, to use energy efficiently. For example, in the "buildings" sector, which includes household appliances, they note that:
** Electricity bills do not give any details: we cannot see how much we are paying to run a refrigerator or a TV set. The authors liken this to a grocery store where customers receive a total bill at the checkout counter, but never see the prices of individual foods.[5, pg. 2.13]
** Switching to an energy-efficient appliance will produce only small savings for an individual family. For example, reducing the standby power of a TV set from 7 watts to less than one watt would save about $5 per year per TV. As a result, most people won^t put much effort into finding an energy-efficient TV. But if all TVs in the country used less than one watt of standby power, "the total savings would be hundreds of millions of dollars per year."[5, pg. 4.4]
** Another market barrier is called "split incentives": the person buying the equipment is not the person who will pay to run it. For example, a landlord might buy an inefficient furnace, letting the tenants pay the high heating bills that result.[5, pg. 4.5]
One of the important functions of government is to compensate for market barriers. For example, the U.S Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) jointly run the Energy Star program, which labels appliances according to their energy efficiency. This system helps consumers see at a glance how much money an energy-efficient refrigerator or furnace will save them during a year. And the government can help overcome the "split incentives" problem by setting minimum standards for efficiency in equipment such as water heaters.[5, pg. 4.7] According to the CEF study, there is enormous opportunity to achieve efficiencies by such means.
In the transportation sector, the government could promote investment in alternative fuels; improve air traffic control to reduce the time airplanes spend circling airports; and create "pay-at-the-pump" automobile insurance, giving car owners the opportunity to save on insurance by driving less.[5, pg. 1.10]
Some economists say opportunities to save both energy and money must be fiction: if they were real, people would already be doing them. Pointing out such opportunities, they say, is like claiming there is a $20 bill lying on the sidewalk. If it were there, someone would have picked it up long ago. But as one commentator points out, the appropriate metaphor is not a $20 bill lying on the sidewalk but $20 worth of pennies hidden in the sand. Nobody wants to sift through sand for a few pennies. But if you make it easy by giving people a metal detector, they will happily gather up the pennies. The "metal detector" represents the reforms we can make in energy markets to help people save both energy and money.[6]
The CEF study considers three main categories of economic reforms:
1. Increasing government research and development (R&D) for technologies to reduce energy consumption.
2. Government projects to correct economic barriers to efficient energy use -- like the Energy Star program to help consumers choose more cost-effective home appliances.
3. Taxing carbon dioxide emissions to motivate people to save energy. The authors propose such a tax in the form of emissions permits the government would sell at auction each year.
Using varying combinations of these policies, the authors explore 3 possible scenarios for future energy use: Business as Usual, Moderate, and Advanced. Under Business as Usual, current energy policies continue more or less unchanged, with a "modest pace of technological progress." In the Moderate scenario, some reforms occur; and in the Advanced scenario "a nationwide sense of urgency" motivates deeper reforms.[5, pg. 3.3]
By the year 2020, the Moderate scenario sees emissions reduced by 9% to 10% compared with Business as Usual, and the country^s energy bill is 14% lower. The Advanced scenario sees emissions 23% to 32% lower and the energy bill 18% to 22% lower than the Business as Usual forecast. In other words, even taking into account the administrative costs of programs like Energy Star, plus increased costs for research and development, the country still saves money. And the gains calculated in the CEF study are ONLY energy cost savings. They do not include other advantages of more rational energy use, such as improved health from cleaner air and reduced dependence on foreign oil.[5, pg. ES8]
To be cautious, the authors say some of the gains they describe might be offset by "indirect" losses in other parts of the economy, which they do not model in detail. Indirect losses could conceivably equal direct gains, so instead of making a profit, we might simply come out even.[5, pgs. 1.40-1.41] O n the other hand, a recent analysis of the CEF scenarios by the International Project for Sustainable Energy Paths (IPSEP) concludes that when we factor in broader economic patterns, the potential gains look substantially larger, not smaller.[6]
The CEF scenarios are not designed to get the U.S. all the way to its Kyoto target of reducing emissions to 7% below 1990 levels by the period 2008 to 2012. But they make it clear that for every day we delay taking steps toward that target, we are losing money.
One way to save a bundle would be to stop subsidizing the fossil fuel industry. A report by Friends of the Earth (FoE) points out that taxpayers currently provide billions of dollars worth of unnecessary support to polluting industries each year.[7] This money could be given back to taxpayers, or redirected to support clean energy projects and job training for workers leaving the coal industry.[8]
When U.S. negotiators try to delay U.S. actions to reduce emissions, they are not protecting the U.S. economy as a whole; they are protecting a small group of our dirtiest industries. Given the strong personal ties of both George W. Bush and Dick Cheney to the oil industry, the U.S. role in follow-up meetings, expected in May or June, could be even more obstructionist. We shouldn^t let our representatives get away with protecting oil and coal companies at the expense of the rest of the economy, not to mention the planet.
[1] Andrew C. Revkin, "Treaty Talks Fail to Find Consensus in Global Warming," NEW YORK TIMES November 26, 2000, pg. A1. Also see UNITED STATES SUBMISSION ON LAND-USE, LAND-USE CHANGE, AND FORESTRY , August 1, 2000, available at http://www.state.gov/- www/global/global_issues/climate/000801_unfccc1_subm.pdf.
[2] Gregg Marland and others, "Global, Regional and National Carbon Dioxide Emissions," and "Ranking of the World^s Countries by 1997 Carbon Dioxide Per Capita Emission Rates," provided through Carbon Dioxide Information Analysis Center, "Trends: A Compendium of Data on Global Change." Available at http://- cdiac.esd.ornl.gov/trends/emis/top97.cap and http://- cdiac.esd.ornl.gov/trends/emis/tre_usa.htm
[3] Ross Gelbspan, THE HEAT IS ON: THE HIGH STAKES BATTLE OVER EARTH^S THREATENED CLIMATE (Reading, Mass.: Addison-Wesley, 1997). ISBN 0-201-13295-8.
[4] Associated Press, "DaimlerChrysler Corp. Quits Global Climate Coalition," January 7, 2000, available at http://- www.enn.com/enn-subsciber-news-archive/2000/01/01072000/- daimler_8854.asp.
[5] Interlaboratory Working Group, SCENARIOS FOR A CLEAN ENERGY FUTURE (Oak Ridge, Tenn.: Oak Ridge National Laboratory and Berkeley, Calif.: Lawrence Berkeley National Laboratory, ORNL/- CON-476 and LBNL-44029, November 2000) Available at http://- www.ornl.gov/ORNL/Energy_Eff/CEF.htm.
[6] Florentin Krause, SOLVING THE KYOTO QUANDARY: FLEXIBILITY WITH NO REGRETS (El Cerrito, Calif.:International Project for Sustainable Energy Paths, November 2000). Available at http://www.ipsep.org. Click on "Latest Report."
[7] Friends of the Earth and others, PAYING FOR POLLUTION (Washington, D.C.: Friends of the Earth, 2000). ISBN 0-913-890-82-0. Available at http://www.foe.org/eco/- payingforpollution
[8] See Ross Gelbspan, "Opportunity in the Climate Crisis," BOSTON GLOBE November 19, 2000, pg. C8.
Thanks to Barbara Haya of the Energy and Resources Group, University of California at Berkeley, for help developing several ideas presented in this issue.
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RACHEL^S ENVIRONMENT & HEALTH NEWS #714 , December 21, 2000. --Peter Montague, Editor - Environmental Research Foundation
The Environmental Research Foundation (ERF) was founded in 1980 "to strengthen democracy by helping people find the information they need to fight for environmental justice in their own communities."
Uploaded: 2/21/2004
Uploaded: 2/21/2004