NCPA - National Center for Policy Analysis


November 19, 2008

The United Nations says the 40 signatories to the Kyoto treaty have, on average, cut their CO2 emissions to 5 percent below their levels of 1990 -- just meeting the goals for 2008 to 2012.  So on the surface, things look very good.  But the data are deceiving, says Investor's Business Daily (IBD).  As the publication the New Scientist noted, "Much of the 17 percent drop is a consequence of the economic downturn of eastern and central European nations in the 1990s."

"Downturn" is almost too polite a term, says IDB.  Take the period right after the collapse of communism in 1990, when many countries in the area were struggling to rebuild their economies after decades of top-down stagnation.  This economic implosion led to a 37 percent drop in greenhouse gas emissions among the so-called "economies in transition" from 1990 to 2006.

In other words, it took a regional depression for Kyoto to meet its goals, as data from renowned economist Angus Maddison show:

  • For the seven main economies in Eastern Europe -- Albania, Bulgaria, Czechoslovakia, Hungary, Poland, Romania and the former Yugoslavia -- per-person output measured in 1990 dollars declined 17 percent in the first three years of the 1990s.
  • The fall was so steep, it took the region until 1998 just to get back to 1990's average per-person gross domestic product (GDP) of $5,440.
  • It was even worse for Russia and the former Soviet Republics; those economies contracted 43 percent from 1990 to 1998. It took them 17 years to regain the same level of output -- $6,890, on average -- as they had in 1990.

What has really happened is that major industrial economies aren't reducing their so-called greenhouse gas emissions at all.  Indeed, the industrial economies excluding the former communist ones have actually increased greenhouse gas output by 9.9 percent since 1990.  Supposed "progress" in meeting the Kyoto limits is an illusion, says IBD.

The Eastern European economies had to basically collapse in order to help the world meet its Kyoto goals.  That's what it would take in the United States, too.  The United Nations estimates that reducing global warming would require a permanent hit of at least 1.5 percent of world GDP -- or roughly $1 trillion a year for decades to come.

For the United States, the hit might be even more severe.  Under Kyoto's strict requirements, according to forecasts from the U.S. Energy Department, the costs could reach as high as 4.1 percent of GDP -- or about $570 billion a year.  It would kill nearly 5 million jobs.

Source: Editorial, "Greens Spell Progress R-e-c-e-s-s-i-o-n," Investor's Business Daily, November 18, 2008.


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