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In the Tank for Kyoto, Inc.



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OK, folks, the push is now on to buck up the Kyoto talks and incoming Energy & Commerce chairman Henry Waxman as he prepares what will surely prove to be the 2009 equivalent of the 1993 BTU-tax overreach.

 

First up is the State of California, with a missive today from its “Flex Your Power” platform, insisting that “European Union Carbon Caps Not Causing Business Exodus.”

 

So, you don’t really see that growth in stainless steel production being exported from Spain to Kentucky (Acerinox; here called North American Stainless), and former CEO Victoriano Muñoz was just joshing when he attributed this move to the Emissions Trading Scheme. Also not really happening are the tens of thousands of construction jobs — and ongoing discussions about several thousand permanent steel-making jobs – shifting to Alabama (Thyssen-Krupp) courtesy of Germany. Pay no attention to the ceramic facilities in Spain shutting down because it was more profitable to go into the business of making nothing – and just selling their CO2 ration coupons. Nothing to see here; move along. Those EU politicians and executives pleading for a carbon-cap cessation — or, at a minimum, that Europe stop digging? You don’t hear that, either. And so on. Once again, we’re told “remain calm, all is well!”

 

California’s repetition of this claim derived from an official IEA report is hogwash, which — as I have exhaustively documented on Planet Gore – is what we have come to expect from our European friends, who are increasingly embarrassed by their failure, on the playing field of their own choosing, to craft their identity as world leaders in environmental policy. Even better, however, are the reasons that Europe claims it wasn’t really hurt economically, after all – by which they must mean that there are still some jobs left on the continent, not that their scheme hasn’t chased any off:

The report attributes the lack of significant change in trade flows and production patterns to the no-cost allocation of emissions allowances (as opposed to auctioning off allowances), long-term electricity contracts and an overall boom in prices for carbon-intensive products.

Ahem. We now know that an Obama administration will kick off amid something quite the opposite of a boom for energy-intensive products making price less of an object, but also a push to sell the ration coupons (hooray!) as opposed to give them away to rent-seekers — which, the EU report fails to emphasize, also ensures that no real emission reductions will actually occur. Prices go up and recipient entities are given a windfall, that’s all. It’s so bad that covered EU emissions actually went up while economy-wide emissions dipped. So at least two out of those three factors won’t be there, regardless of how seriously, or not, one takes the EU assessment of why some jobs still remain.

 

Next up is the The New Republic, striving to put a happy face on Europe’s Kyoto disaster. For a clue as to how important factual details, working knowledge, or original research are to the TNR piece, note that “the European Parliament [is] currently led by Nicholas Sarkozy.” I don’t have the time or inclination to bother explaining that one – so just know that, if true, it would surely be newsworthy. Also, “The [Kyoto] treaty calls for the [covered] states to be, on average, 5 percent below 1990 levels between 2008 and 2012.” Well, no, it doesn’t call for that anywhere – that’s an inaccurate truncation of the popular media treatment of Kyoto’s terms.

 

The point is for you to disbelieve certain people who might bad-mouth the glorious peoples’ treaty in the days ahead, and to believe instead that “First, it’s not at all clear that the wealthier EU countries are actually going to miss their targets. Some countries, especially Sweden and Britain, are doing quite well. And, as a recent European Environment Agency report laid out, the EU-15 is working to implement a new plan to ratchet down overall emissions in the next 48 months.”

 

The only way in which it isn’t clear that the wealthier EU countries are going to miss their targets is if one either doesn’t look, or looks but fails to notice that meeting these targets relies on two factors — neither of which actually reduce emissions. The first factor is that the EU is buying offsets for the privilege of claiming someone else’s reductions. These have proven to be derived from economic collapse, other “anyway tons,” or simply accounting shams.

The other path to compliance is the artifice upon which this entire EU enterprise is built, a 1990 baseline — bizarre in a 1997 treaty going into effect with 2008 emissions, until you recall the post-1990 economic collapse in much of Europe. This is key not just to the cited case of Eastern and Central Europe, but more specifically to German performance and, therefore, to the entire EU-15 performance thanks to the collective EU “bubble.”

 

Mentioning the UK performance without noting that it relies upon a one-off dash-for-gas – gas that is now a trickle, leading to the coal pits reopening – is like mentioning the results of the 2000 U.S. presidential election results without noting the electoral college (not a practice for which the The New Republic became famous).

 

Further, the EU can work on plans in the next 48 months all they want, but Kyoto requires the EU-15 to reduce emissions by an average of -8 percent (below 1990 levels) over five years, beginning this year — which, you may have noticed, is rapidly coming to a close. The fact is those policies don’t exist and wouldn’t come into effect until a Kyoto II period, if there is one. But as I have noted before you don’t have to dig too deep to see that for 2008-2012 the EU admits to relying upon the hope of some new, effective, and currently unknown policies emerging, and upon the unlikely overperformance in emissions reductions among some states, in order to fulfill their promise. That inconvenient fact likewise goes unnoticed by TNR.

 

The author notes the “often dubious” offsets in which the EU will also dabble as part of the new wünder-policies that will supposedly bring them (on paper) to their promise — without noting that an analysis of the EU’s numbers and claims make plain that nearly all of its -8 percent “reduction” will come from such offsets. Depending on the depth of the global recession, EU-15 emissions are on track to be at or around 1990 levels, not below them. So even with the accounting stunt of the 1990 baseline, Europe will miss its target.

 

The piece goes on to note that, despite Europe’s hidden success story, Japan’s emissions just hit a record high, “But Japan also doesn’t have a mandatory cap or tax on company emissions — steelmakers and manufacturers have resisted one. Instead, various sectors make entirely voluntary ‘pledges’ to cut emissions — an approach that’s likely not sustainable going forward.” Somehow, the U.S.’s superior record on slowing the rate of growth of emissions — in the absence of any self-imposed economic pain — goes unremarked. Which is, well, remarkable.

 

As the Kyoto Industry gets geared up for its battle to overcome U.S. public opposition to their emissions-reduction regime — and with the Poznan COP less than two weeks away – get used to seeing more such “journalism,” which is little more than outright cheerleading. Go team!



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