Under the Kyoto Protocol, both the newly industrialized and less developed economies would be allowed to increase their GHG emissions unconstrained by any binding

international agreement.

The principal contributors to GHG emission growth are the emerging

The Kyoto Protocol: Addressing the Growth in Global
Emissions Without Commitments from the Global
Community

The Kyoto Protocol does not call for a global response to address the potential risk of long-
term global warming. In 1992, the signatories to the Framework Convention on Climate
Change supported the principal that the developed countries would take the lead in reducing
their greenhouse gas emissions, with participation of newly developing economies such as
Mexico, Argentina and Brazil participating with a less onerous target during the same
period or soon thereafter. The less developed countries were expected to take on voluntary
goals, and become full participants within a reasonable timeframe.

The Kyoto Protocol does not include any provisions for either the newly industrialized
countries or the less developed economies. Under the Kyoto Protocol, both the newly
industrialized and less developed economies would be allowed to increase their GHG
emissions unconstrained by any binding international agreement. Arguing that they have the
right to grow their economies using energy as a building block of their development, they
are sanguine about the adverse economic impact of reducing carbon emissions from the
industrialized countries.

However, it is the developing countries that are the principal contributors to annual global
emission increases. Driven by their expanding economies and their rising populations, the
less developed economies of the world will emit more emissions than the industrialized
economies by 2015. The reduction in carbon emissions that would result from the developed
economies fully meeting their targets under the Kyoto Protocol would not significantly
affect the annual global emissions. This is a fundamental flaw in the treaty. It would do little
to address potential global warming, but the US economy would pay a large price.

Global Carbon Emissions from Energy Use
(Million Metric Tons)

1

emissions from Annex B

9,000

countries to 5% below

4,000

7,000

1990 levels would not

6,000

substantially impact global emissions.

5.000

4,000

3,000

2,000

1,000

Source: Energy Information Administration, International Energy Outlook 1997

The Kyoto Protocol: Requiring a Very Large
Reduction in U.S. Carbon Emissions

Despite the slow growth in projected US emissions relative to the projections of world
greenhouse gas emissions, reducing carbon emissions to 7% below the 1990 levels would
require a tremendous effort. Although energy efficiency is projected to improve at double

GLOBAL WARMING: THE HIGH COST OF THE KYOTO PROTOCOL
NATIONAL AND STATE PACTS

Carbon emissions are projected to be 37% above the Kyoto target by 2010 and 57% above by 2020.

the rate of the previous ten years over the next twenty years, and the fuel with the lowest carbon content (natural gas) is projected to gain a significant increase in market share, the WEFA baseline projects carbon emissions to be 37% above the target by the year 2010 and 57% above the target by the year 2020. This increase in carbon emissions is a result of continued economic and demographic growth as well as the retirement of nuclear plants.

37% and 57% above the Kyoto target

Although these numbers
are very large, they
understate the dramatic reduction in carbon required under the Protocol. Energy sector
carbon emissions in 1995 were 13% above the Kyoto target. Over the five years, carbon
emissions from the energy sector grew at an average annual rate less than 1% per annum.
The contribution of carbon emissions from the energy sector to total carbon emissions was
85% in 1995.

Under the business as usual projections, carbon emissions from the energy sector are projected to exceed 1700 million metric tons in 2010, approximately 37% above the target emission level. This estimate includes a significant change in the energy market, as steady improvements in energy efficiency per dollar of GDP nearly double due to electric market restructuring and increasing global requirements for more efficient technology. If these factors were not incorporated in the analysis, carbon emissions from the energy sector would be more than 50% above the target emission level by 2010.

GLOBAL WARMING: THE HIGH COST OF THE KYOTO PROTOCOL

NATIONAL AND STATE PACTS

Source: U.S. Department of State, Climate Action Report 1997

Note: The totals presented in the summary tables in this chapter may not equal the son of the individual source categories due to rounding

• The definition of forest sinks in the Climate Change Action Report 1997 is inconsistent with that in the Kyoto Protocol This estimate is no longer accurate.

GLOBAL WARMING: THE HIGH COST OF THE KYOTO PROTOCOL

NATIONAL AND STATE IMPACTS

In 2010, US carbon emissions in the WEFA baseline are 37% above the Kyoto.

Assuming that today's carbon intensity per dollar of output (GDP) was to remain constant, carbon emissions would be 51% above the Kyoto target.

On a per person basis, carbon emissions from the energy sector were 5.32 million metric tons (mmt) in 1995. In the baseline, carbon emissions per person are projected to be 5.70 mmt in 2010. If there were no energy efficiency gains, the carbon emissions per person in 2010 would be 6.39 mmt, 53% above the Kyoto target.

The Kyoto Protocol presents a daunting challenge: based upon today's experience, the required decline in carbon per dollar of GDP (925) and the required decline in carbon per person are extraordinary.

Assuming that today's

carbon intensity per capita

was to remain constant,

carbon emissions would

be 53% above the Kyoto

target in 2010.

0.00

1800

2010

2020

GLOBAL WARMING: THE HIGH COST OF THE KYOTO PROTOCOL
NATIONAL AND STATE IMPACTS

The Kyoto Protocol: Energy Impacts

Reducing carbon

emissions from the energy
sector to 93% of 1990
levels would require a
dramatic reduction in
fossil fuel use, and a
substantial investment in
more efficient energy
using capital.

As substitution of noncarbon based fuels and lower-carbon fuels is not expected to provide substantial relief from the target reductions under the Kyoto Protocol, to achieve this reduction, some form of intervention in the market (such as a tax, fee or tradable permit) would be required.

WEFA estimates that the cost expressed in constant 1996 dollars per metric ton of carbon would be $265 for the period 2008-2012, rising to $360 per metric ton by 2020.

To achieve these dramatic reductions in carbon emissions 37% on average over the period 2008 to 2012, and more than 50% by 2010- would require a dramatic reduction from currently projected levels of energy consumption. As there is no cost-effective technology currently available to capture CO2 once it is produced, actions to achieve a reduction in carbon emissions from the energy sector over the next few decades fall into three broad categories:

⚫ substituting non-carbon-emitting fuels for fossil fuel use: Some emission reductions could be achieved through the increased use of nuclear, hydro, and renewable energy in the generation of electricity. However, it is unlikely given economic and environmental considerations that nuclear or hydro could produce a major portion of the reductions necessary to reach a carbon emission target. Under a carbon emission limits policy, other renewable energy technologies would be steadily more economically attractive, but additional R&D is necessary to improve their general applicability. This limits the opportunity for substantial introduction of these technologies during the Kyoto budget period 2008-2012.

• substituting lower emitting fuels for higher emitting fuels: Switching from fossil fuels with higher carbon emission rates (ie., coal and petroleum) to those with lower emission rates (L.e., natural gas) can provide some of the reductions needed to reach a target. However, the potential is limited over the next ten to twenty years due to the increasing reliance on lower carbon fuels that is already included in the base case. In the base case, natural gas use is projected to expand to almost 30 quadrillion Btu by 2010, straining the exploration, production, and pipeline capacity of North America.

using less energy. Achieving a carbon emission target through reductions in energy use would require cutting energy use by nearly the same amount as the desired change in carbon emissions from the baseline. To the extent that some of the reductions would be obtained with the two previous options, the necessary reduction in energy use would be less. As these options are not expected to provide substantial relief from the target reductions under the Kyoto Protocol, to achieve this reduction, some form of intervention in the market (such as a tax, fee or tradable permit) would be required. Once in place, energy use would be curtailed through three mechanisms:

1. investment in energy efficient capital

2. investment in process change

3. reduction in purchases of energy and electricity by businesses and consumers.

The Price Consumers Pay to Achieve the Kyoto Protocol

As the opportunity for meeting the Kyoto Protocol target emission reductions through substitution of non-carbon energy sources or low-carbon energy sources is limited, reducing energy consumption would require large changes in energy prices. WEFA estimates that the cost expressed in constant 1996 dollars per metric ton of carbon would be $265 on average for the period 2008-2012, rising to $360 per metric ton by 2020. Consumers would see price increases of 45% to 75% over baseline projections

GLOBAL WARMING THE HIGH COST OF THE KYOTO PROTOCOL
NATIONAL AND STATE IMPACTS