Global Warming An Opportunity for World Response.

During November 2000, while most U.S. citizens were preoccupied by questions of rigged elections, representatives of 170 countries met in the Hague, the Netherlands, to tackle what is arguably the biggest environmental problem society faces: global warming. The meeting at the Hague was supposed to fill in the blanks of the Kyoto Protocol, a 1997 international treaty intended to address 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 twenty-first 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, Japan, in 1997. Instead, negotiators left the Hague after two weeks with no agreement. The talks 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.

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 energy is used in the United States. The United States is the world's largest emitter of carbon dioxide from fossil fuels, and its energy use is notably inefficient. For example, the United States emits about twice as much carbon dioxide per person as does Germany. 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 U.S. carbon dioxide emissions could be reduced by increasing the efficiency of our economy.

Fossil fuel companies have worked relentlessly to convince the U.S. public that global warming is a Chicken Little fantasy. The insurance industry, on the other hand, knows that global warming is real. Ross Gelbspan writes in his 1997 book, The Heat Is On: The High Stakes Battle Over Earth's Threatened Climate, that hurricanes, cyclones, and floods between 1990 and 1995 cost the industry about fifteen times as much as such events had cost in the 1980s. Recently even a few oil companies have decided to come clean. For example, British Petroleum and Shell Oil have now withdrawn from the Global Climate Coalition, an industry group that tries to dismiss the science on global warming.

As opportunities to misrepresent the science diminish, opponents of precautionary action have switched to stirring 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 conducted 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, the U.S. economy to make the needed changes.

For each sector, the CEF examines "market barriers" that limit our incentives and our ability to use energy efficiently. For example, in the "buildings" sector, which includes household appliances, the study notes:

* Electricity bills don't give any details: consumers can't tell how much they are paying to run a refrigerator or a TV set. The study likens this to a grocery store bill listing a total tally but not the prices of individual foods.

* 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 seven watts to less than one watt would save about five dollars per year per TV. As a result, most people won't put much effort into finding an energy-efficient TV. But if all televisions in the country used less than one watt of standby power, "the total savings would be hundreds of millions of dollars per year."

* 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.

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. According to the CEF, there is enormous opportunity to achieve efficiencies by such means.

In the transportation sector, the U.S. 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.

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 twenty-dollar bill lying on the sidewalk. If it were there, someone would have picked it up long ago. But as an analysis by the International Project for Sustainable Energy Paths (IPSEP) points out, the appropriate metaphor is not a twenty-dollar bill lying on the sidewalk but twenty dollars' 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 be more inclined to gather up the pennies. The metal detector represents the reforms we can make in energy markets to help people save both energy and money.

The CEF considers three main categories of economic reforms:

* Increasing government research and development for technologies to reduce energy consumption.

* Government projects to correct economic barriers to efficient energy use--like the Energy Star program to help consumers choose more cost-effective home appliances.

* Taxing carbon dioxide emissions to motivate people to save energy. The CEF proposes such a tax in the form of emissions permits the government would auction each year.

Using varying combinations of these policies, the CEF explores three 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.

By the year 2020, the "Moderate" scenario sees emissions reduced by 9 percent to 10 percent, compared with "Business As Usual," and the country's energy bill is 14 percent lower. The "Advanced" scenario sees emissions 23 percent to 32 percent lower and the energy bill 18 percent to 22 percent lower than the "Business As Usual" forecast. In other words, taking into account the administrative costs of programs like Energy Star, plus increased costs for research and development, the United States would still save money. And the gains calculated in the CEF are only energy cost savings; they don't include other advantages of more rational energy use, such as improved health from cleaner air and reduced dependence on foreign oil.

To be cautious, the CEF says some of the gains described might be offset by "indirect" losses in other parts of the economy. Indirect losses could conceivably equal direct gains, so instead of making a profit we might simply come out even. On the other hand, a recent analysis of the CEF by IPSEP concludes that, when we factor in broader economic patterns, the potential gains look substantially larger, not smaller.

The CEF scenarios aren't designed to get the United States all the way to its Kyoto target of reducing emissions to 7 percent below 1990 levels by the period 2008 to 2012. But they make it clear that, for every day the country delays in taking steps toward that target, it is losing money.

One way to save a bundle would be to stop subsidizing the fossil fuel industry. In its 2000 report Paying for Pollution, Friends of the Earth shows that taxpayers currently provide billions of dollars' worth of unnecessary support to polluting industries each year. As Ross Gelbspan points out in a November 19, 2000, Boston Globe article, "Opportunity in the Climate Crisis," this money could be given back to taxpayers or redirected to support clean energy projects and job training for workers leaving the coal industry.

When U.S. negotiators try to delay U.S. actions to reduce emissions, they aren't 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 United States' role in follow-up meetings--expected later this year in May or June--could be even more obstructionist. U.S. citizens shouldn't let their representatives get away with protecting oil and coal companies at the expense of the rest of the economy, not to mention the planet.

Rachel Massey is a writer for the Environmental Research Foundation. This article is adapted from her article, "Global Warming Opportunity," which appeared December 21, 2000, online in Rachel's Environment and Health News #714.