NCPA - National Center for Policy Analysis

The "Early Action" Kyoto Ploy

March 4, 1999

The U.S. has not ratified the United Nations Global Warming Treaty signed at Kyoto, Japan, because there is still considerable doubt as to the scientific validity of the global warming theory and because compliance with its mandates would be incredibly costly. Lack of ratification has the treaty's backers worried.

Political observers report that Kyoto supporters have found a way to divide and conquer the business community that opposes it. It is called "early action."

  • Although the mechanics of early action are complicated, the basic idea is to allow companies which reduce their energy-related emissions prior to 2008 -- the year a ratified treaty would go into effect -- to earn credits they could later use during the 2008-2012 compliance period.
  • Credits earned under the program -- although potentially worth millions or billions of dollars -- would actually be worthless unless the treaty is ratified or comparable regulatory programs are adopted.
  • Thus, companies which sign on early would have an incentive to support ratification.
  • Critics say that if officials of the Environmental Protection Agency -- which would likely be the administering agency -- broach the topic of early action with a company over which they have inspection, permitting, or enforcement authority, how could the discussion not involve and element of coercion?

Since the treaty assigns every country a fixed emissions budget, credits given to companies participating in early action may have to be offset by even more stringent requirement on non- participants. In other words, non-participants might be even more greatly penalized than simply having to comply with the protocol. However, no agreement has been reached among the Kyoto signatories regarding how or whether early credits will count against a country's total.

While utilities and major manufacturing companies have the expertise and capital to invest in voluntary emission reduction, most small businesses do not.

So Kyoto supporters would use the plan to divide the business community and its opposition to Kyoto. Large businesses might become supporters, while small companies would be isolated in their opposition to it.

Early action was developed by the Environmental Defense Fund, embraced by the Clinton-Gore administration and is being championed by Sen. John Chafee (R-R.I.)

Source: Marlo Lewis Jr. (Competitive Enterprise Institute), "Kyoto Lobby Kills Small Businesses," Washington Times, March 4, 1999.


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