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Last Updated: 12/08/2004
Kyoto Bites
Joseph Schumacher

In the seven years since the Kyoto Conference the scientific debate over the reality of global warming has been largely settled. Yet the effectiveness of the treaty that has been rejected by the U.S, and which excludes the worlds fast growing developing economies remains widely questioned. Kyoto’s leading critic, the U.S Government, recently admitted that global warming is taking place and that this is a result of human activity.

While the Russian Duma's November 18th accession to the Kyoto Protocol garnered the headlines, it may not be the most significant indication as to the eventual regulatory dynamics of what some atmospheric scientists have tagged the carbon constrained world of the future. Perhaps just as important are the acknowledgements coming out of the Bloomberg wires that a number of major U.S companies - including General Motors, DuPont and Xerox - are voluntarily cutting carbon dioxide emissions to remain competitive in Europe.

The rationale amongst these companies is that unless they adhere to the emissions standards now legal throughout Europe, and due to become law throughout the 126 Kyoto Protocol signatory states on February 16th 2005, they jeopardize their ability to operate factories or sell products in countries that have ratified the treaty; this according to Richard Sandor, chairman of Chicago Climate Exchange, which certifies companies that reduce greenhouse gas emissions.

In the seven years since the Kyoto Conference the scientific debate over the reality of global warming has been largely settled. Yet the effectiveness of the treaty that has been rejected by the U.S, and which excludes the worlds fast growing developing economies remains widely questioned.  

Kyoto's leading critic, the U.S Government, recently admitted that global warming is taking place and that this is a result of human activity. Nonetheless, the Bush administration continues to oppose the environmental treaty due to what it maintains would be its negative effect on U.S. industry, and because it unfairly assigns varying levels of carbon dioxide reductions to wealthy and developing countries.

However a growing number of U.S. companies are now citing Kyoto as a major reason for revamping their environmental strategies. As well as being conscious of having to meet overseas environmental regulations that are more onerous than those in the U.S., some companies are trying to get a head start in preparing for, in the long-term, may be a changing environmental legal landscape in America.

As a case in point, since Kyoto the chemical giant DuPont has cut carbon emissions from its plants in the United States by 67%, something the company says has "positioned our businesses for the marketplace of 20 to 50 years from now."

Another American business behemoth, American Electric Power Co. recently announced plans to construct a $1.6 billion plant that will use a process called coal gasification. The process transforms coal into synthetic gas before burning it, significantly reducing emissions including carbon dioxide. AEP Chairman Michael Morris said that the challenge facing the company "is to build a power plant that takes into account environmental prospects over a 30-year life."

This sea change amongst some leading American energy companies
precipitated, at least in part, by such a highly contentious treaty begs the question as to how indicative Kyoto is of an initial forming of a transnational polluter pays regime.

The weaknesses of the Kyoto treaty have been well documented. The most criticized aspect is that rapidly growing developing economies, such as China and India, are exempt from emission reduction targets. Scientists for Global Responsibility, a British nonprofit organization that supports the Kyoto Protocol, has said the present diminished pact would have a small and insufficient impact on global warming. Further weakening the treaty is that penalties for failure to meet emissions goals were largely stripped out of the agreement in 2001.

In response, advocates for the Kyoto treaty maintain that the Protocol's effect will amount to more than the sum of its weaknesses. They say the current trend of companies citing the Kyoto standards when reforming their environmental behavior illustrates the treaty s potential in creating a new paradigm for global environmental law. Furthermore it generates compliance without heavy handed and difficult to enforce enforcement mechanisms. This interpretation of Kyoto's benefits reflects much of current international legal theory, which emphasizes international laws aspirational nature as an ongoing effort to construct regimes of international behavior. Such an interpretation relies heavily on the vagaries of international politics and globalization.  

Russia's acceptance of Kyoto is seen as being heavily influenced by its desire to integrate itself firmly in the west, and in May Russian President Putin struck a deal that linked Russian ratification of Kyoto with European support on joining the World Trade Organization.  Andrei Illarionov, Mr. Putin's economic adviser, said after the decision to join was announced that it was "motivated purely by politics - not by science or economics."

Whatever the maneuverings at the level of international diplomacy regarding the international effort to combat global warming, less tangible forces are now providing environmental advocates cause for optimism.

Typically, Globalization has been a whipping boy for environmentalists. A favorite analogy has been to compare globalization as a race to the bottom as multinationals seek the cheapest and least regulated place to do business. In line with this, are the views of the Washington, DC-based Competitive Enterprise Institute. The institute opposes the Kyoto Protocol asserting that costs involved in implementing the agreement make it unfeasible. Myron Bell, an environmental policy expert at the institute, has said that European industries that spew pollution would either move to countries where Kyoto does not apply or nations will decide not to comply .

In contrast, some environmental and consumer advocates and commentators, such as Otto Prohl, regard globalization - through the vehicle of international law - as a way to initiate a race to the top through exploiting Europe's far more precautionary philosophy to regulation as way to directly influence the behavior of U.S multinationals. "We feel that Europe is a real opportunity...We're pushing where the opportunity for innovation is greatest" says Ned Helme, executive director for the Center for Clean Air Policy in Washington. Helm's belief that Europe's regulations to curb the gases believed to cause global warming, will promote change in the United States has been vindicated by the recent efforts of DuPont, General Motors Xerox, and the General Electric Co.

At the heart of the process is a trans-Atlantic difference in legal philosophies - particularly Europe s utilization of the precautionary principle in economic regulation, which is a key tenet in international environmental law. The precautionary principle essentially means that officials should be cautious when information is uncertain, unreliable or inadequate. Thus European lawmakers tend to emphasize the cost of inaction as a cost-benefit analysis to society. This is in contrast to the American legislative culture, which focuses on the cost of action, as a cost-benefit analysis to business, which holds that the benefit of imposing regulation should outweigh its cost.


The ramifications have set off alarm bells amongst some U.S. industry groups. In response the chemical and electronics industries have lobbyists in Brussels in an attempt to temper the instincts of European officials to regulate their business, without the customary evidence of harm required under U.S regulatory law. James Lovegrove, managing director of the European division of the American Electronics Association, a United States industry lobby, sums up the fears facing many American firms in a world wide market place using a shrinking canon of law and regulation; "The EU is going where no man has gone before The moment the ink hits the paper in Europe it becomes a global piece of legislation.