Many businesses view "global warming" or "global climate change" with a mixture of skepticism and trepidation. The potential for new laws and regulations is evident, particularly since the Kyoto Protocol of 1997. This essay will review the science and politics of global warming, with consideration of the kinds of laws and regulations that might result from a situation that has received wide attention yet is still laden with uncertainties and hesitation.
During the "industrial age," human activities have put some 6 billion tons of carbon into Earth's atmosphere. Much of the carbon dioxide emissions are produced by the burning of fossil fuels—such as oil, coal, and natural gas. The industrialized nations declared their intentions to cut back on carbon dioxide and other greenhouse-gas emissions in 1992, but since then emissions have increased at the same time that useful reductions of carbon dioxide in the atmosphere (naturally occurring through the respiration of trees) are now being lost due to increasing deforestation.
Carbon dioxide is a so-called greenhouse gas because it helps to trap heat in the atmosphere. C02, water vapor, and other minor gases in the atmosphere serve to trap solar heat in the atmosphere, much the way glass traps the sun's warmth in a greenhouse. In the United States, a third of greenhouse gases come from motor vehicle emissions, a third from industrial emissions, and a third from residential and agricultural activities (such as livestock operations that emit methane). There is no dispute that the greenhouse-gas effect exists. Without it, the temperature of Earth would be about 0 degrees Fahrenheit (—18 degrees Celsius) instead of its present 57 degrees Fahrenheit (14 degrees Celsius).
Nor is it disputed that the amount of CO2 has been rising steadily for more than a century as fossil fuel use has become more widespread. Greenhousegas (GHG) emissions include CO2, methane, nitrous oxide, hydroflurocarbons, perfluorocarbons, and sulfur hexachloride. The most important of the six is C02, since emissions of CO2 are so abundant and from so many sources. What is disputed is to what extent human-generated GHG emissions may be contributing to global warming, and to what extent current levels of GHG emissions may be maintained without causing serious climatic disruption.
During the United Nations Conference on Environment and Development (UNCED) in June of 1992 (the "Earth Summit"), more heads of state than had ever been gathered in one place came to talk about the weather and what we were doing about it. Specifically, ozone depletion and global warming (or global climate change) were among the principal concerns. During the 1990s the potential for global climate change has been a concern for a majority of scientists, a large number of nation-states, nongovernmental organizations, and the United Nations.
This concern was reinforced in the late 1990s by new findings on rising global temperatures. The year 1997 was the warmest on record, and according to scientists at the National Oceanic and Atmospheric Administration (NOAA), was part of a decade that witnessed nine of the 11 hottest years this century. The global average temperature in 1997 was 62.45 degrees Fahrenheit, three-quarters of a degree higher than the "normal average" for the past 30 years, and 0.15 degrees warmer than the previous record high set in 1990. The NOAA findings are similar to those of the British Meteorological Office.
Nineteen ninety-eight brought fresh claims of warmer weather. U.S. paleoclimatologists analyzed temperature variations in the Northern Hemisphere since 1400, examining chemical evidence in tiny marine fossils, corals, and ancient ice, along with fossilized pollen in lake sediments and annual growth rings in trees. Factoring in changes in solar radiation and volcanic haze, they concluded that GHGs have been the main influence in making the 20th century the warmest in 600 years. "Global warming," wrote Alan Murray in the Wall Street Journal in 1997, "isn't just a fear; it's a fact—or at least as close to a fact as science usually gets. Average global temperatures have risen about one degree Fahrenheit during the past century."
Yet there is still some uncertainty regarding the causes of this warming trend. While the Intergovernmental Panel on Climate Change (IPCC) and the Union of Concerned Scientists believe that at least some of the warming is accounted for by human-based GHG emissions, there are more than a few contrarians whose voices are being heard. Volcanic activity could at least partially account for rises in ocean temperatures, particularly in the Eastern Tropical Pacific where "El Nino" has disrupted recent weather patterns. Sunspots and magnetic flares from the sun could cause major disruption in Earth's weather. Some scientists contend that NOAA's satellite measurements have failed to note that while surface temperatures are increasing, atmospheric temperatures may not be. Still other critics pointed out that recent warming trends might be part of long-term natural warming and cooling cycles on the planet.
In a way, caution (and how much of it to take) is very much the issue. Climate change models suggesting the need to lower fossil-fuel-based economic activity are inconvenient, for they seem to require significant changes in habit. The chair of the IPCC has claimed that only radical action will suffice, and that the need for such action brooks no further delay. Some U.S. politicians have seized upon the work of certain skeptics to justify taking no measures to reduce GHG emissions; some have even proposed ending government funding of global change research. The most common caution is the claim that imposing carbon or energy taxes would cost the economy too dearly.
The basic legal agreement on climate change is the United Nations Framework Convention on Climate Change (FCCC), forged at the 1992 UNCED conference, in which 160 nations pledged to voluntarily reduce greenhouse gas emissions to 1990 levels by the year 2000. Its objective was to stabilize GHG concentrations in the atmosphere at a level that would prevent dangerous "anthropogenic" or human-made interference with climate systems. This would require time frames sufficient for ecosystems to adapt naturally to any climate change and "ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner."
The FCCC sets out some guiding principles, such as the precautionary principle—lack of scientific certainty should not be used as an excuse to postpone action when there is a threat of serious or irreversible damage—and "common but differentiated responsibilities" for states, such that industrialized nations should take the lead in combatting climate change, and that the "special circumstances" of developing countries be taken into account. Behind the distinction between industrialized nations' obligations and the "special circumstances" of developing nations is the fact that industrialized nations were by far the largest contributors of GHGs as of 1992. Global climate change was seen, in short, as a problem created by developed nations, who should therefore take primarily responsibility for reducing their contributions.
Both industrialized and developing countries agreed to accept a number of general commitments, including the development of a "national communication" with inventories of GHG emissions by source and GHG removals by "sinks." Each signatory nation must also adopt national programs for mitigating climate change, enhance available sinks, and promote the transfer of technologies that will ameliorate GHG emissions. Transfer of technologies in the transportation sector is specifically mentioned in Article 4. Industrialized countries—members of the Organisation for Economic Co-operation and Development (OECD), along with the states of Central and Eastern Europe—were designated as Annex I Parties, and committed to adopting policies that would return their GHG emissions to 1990 levels by 2000. OECD nations were to take the strongest measures, with Annex I Parties in transition to market economies being given some degree of flexibility. Annex II Parties—essentially, the OECD—agreed to provide "new and additional financial resources" to meet the full costs incurred by developing countries in preparing national inventories required under Article 12 and to assist in such technology transfer as will enable developing country Parties "to meet the agreed full incremental costs of implementing measures."
Pursuant to the FCCC, the supreme body of the convention is the Conference of the Parties (COP). COP comprises all the states that have ratified the convention (currently around 170, including the European Union), and its role is to review existing commitments in light of the FCCC's objectives, new scientific findings, and the progress of the states toward meeting GHG emission reductions. COP also oversees two subsidiary bodies established under the convention—the Subsidiary Body for Implementation, and the Subsidiary Body for Scientific and Technological Advice. COP can review reports from these bodies, direct them, and create additional subsidiary bodies to further the FCCC.
The first Conference of the Parties (COP-1) met in Berlin in March 1995, and concluded that the voluntary approach had been unsuccessful. The Berlin Mandate called upon the most industrialized nations to set mandatory reduction targets. In December 1995 the IPCC had adopted its Second Assessment Report, reviewed by some 2,000 scientists and experts worldwide. This report has served as the basis for further discussions; the IPCC's conclusion ("the balance of evidence suggests that there is a discernible human influence on global climate") has been widely quoted. In January 1996 a report by the British Meteorological Office and the University of East Anglia claimed that Earth's average surface temperature had reached a record high for the period 1865 to 1995.
By June 1997 leaders of the G-7 group of economic powers (plus Russia) met in Denver, Colorado, for their annual summit and committed to forging greenhouse-gas emissions targets by the end of the year, at a conference to be held in Kyoto, Japan. Britain's Prime Minister Tony Blair and Germany's Chancellor Helmut Kohl criticized U.S. President Bill Clinton for not having proposed a specific target for emissions reductions. By late June 1997, in addressing the Earth Summit II in New York, President Clinton stated that the scientific evidence on global warming was "clear and compelling." In July, President Clinton and Vice President Al Gore met with seven leading climate scientists, including Nobel laureates Henry Kendall (1926-), Mario Molina (1943-), and F. Sherwood Rowland (1927-), to discuss current scientific understandings about global climate change. The scientists claimed with a high degree of consensus that greenhouse gas emissions were a matter of serious concern that required immediate and decisive action by the United States.
The last set of formal talks preceding the Kyoto climate conference began in Bonn, Germany, in early August 1997. Officials, diplomats, and observers from more than 130 countries took part in discussions on targets and timetables for emissions reductions. On October 6, while the Bonn delegates were still meeting, Clinton and Gore hosted a full-day meeting to discuss U.S. options for reducing greenhouse-gas emissions without undue harm to the economy. On October 22, just before the Bonn discussions ended, President Clinton set forth a strategy for meeting U.S. obligations under the UNFCCC.
President Clinton's plan included a three-stage plan. Stage I would include tax incentives, spending on research and development and energy efficiency, and industry consultations to explore the best ideas and best practices on how to reduce emissions in a cost-effective manner. The second stage, to begin around 2004, would build upon the programs adopted in Stage I by reviewing and evaluating which were most cost-effective, and by perfecting the details of a market-based permit trading system for carbon emissions. During the third stage, beginning in 2008, actual emissions reductions would take place in accordance with the FCCC.
The president's plan did not directly address auto emissions or industrial plant emissions, did not propose new energy taxes, or suggest the need for more stringent fuel efficiency standards. Instead, the plan looked for market-based "win-win" measures that would help the environment and the economy at the same time. Moreover, President Clinton affirmed that the United States would not adopt binding obligations without developing country participation, and emphasized the importance of an international trading system and joint implementation in order to take advantage of low-cost reduction possibilities wherever they occur. Environmentalists attacked the plan as too little, while businesspeople were either lukewarm or hostile to the president's plan.
The Kyoto Protocol was the result of years of preparation and 11 days of grueling final negotiations. The accord would require industrialized nations to cut greenhouse-gas emissions to between 6 and 8 percent below 1990 levels. The reductions would be achieved between 2008 and 2012. The differing percentage levels reflect different targets for the European Union (EU), the United States, and Japan. The EU would reduce its emissions by 8 percent below 1990 levels, the United States by 7 percent, and Japan by 6 percent. Twenty-one other industrialized countries would meet similar binding targets within the same 2008 to 2012 time frame, and all industrialized nations committed to cutting even deeper after that. Together, these nations will be reducing their greenhouse-gas emissions by slightly more than 5 percent from 1990 levels.
All six greenhouse gases were included in the mix, a point that the U.S. delegation had pressed repeatedly. Two new mechanisms were created. One would facilitate international trading in emissions credits. This process is sometimes referred to as "joint implementation," since several nations would be joined in a single "bubble" or "umbrella" within which nations and companies can reduce their emissions beyond stated targets and sell permits to companies or nations that need them. The other mechanism, known as the Clean Development Fund, would allow developing countries to give emissions credits to industrialized nations that provide them with financial help in reducing greenhouse gas emissions on a voluntary basis. One professor of mathematics and economics predicted these two mechanisms would create a $120 billion a-year market in emissions permits. The process of emissions trading was set to be negotiated further at COP-4.
President Clinton called the agreement "historic" and "environmentally strong and economically sound." He was "particularly pleased the agreement strongly reflects the commitment of the United States to use the tools of the free market to tackle this difficult problem." Vice President Gore's statement emphasized the creation of "new opportunities for economic growth" and the need to "press for meaningful participation by key developing nations." That participation may or may not materialize. During negotiations, the "Group of 77" developing nations were adamantly opposed to any participation until industrialized nations began the process of reducing emissions.
The issue of developing nations' participation in the FCCC resurfaced at COP-4 in Buenos Aires in November 1998. The People's Republic of China and India made clear that developing nations should not be expected to undertake even voluntary commitments. Near the end of COP-4, Argentina dramatically broke ranks with other developing nations and announced that it would establish voluntary reductions in GHG emissions.
Shortly thereafter, the United States signed the Kyoto Protocol. But that step was undertaken without Congressional approval; in fact, two thirds of the Senate will be needed to formally ratify the Kyoto Protocol, and many Senate Republicans have said they would not approve the Protocol unless there was significant participation by developing nations. Yet COP-4 ended without further movement toward participation—voluntary or otherwise—among developing nations. The White House made known that it would probably not submit the treaty for ratification until 2001. Thus, the future of the Kyoto Protocol rests on the U.S. presidential and Congressional elections in 2000.
Some businesses, accordingly, have adopted a wait and see attitude, while others are working to anticipate changes in the market that may arise from further developments in the science and politics of global warming. For example, many automobile companies are forging ahead on alternative fueled vehicles, anticipating not only changes in consumer taste and the availability of gasoline, but in anticipation of further government regulation that would limit fossil-fuel emissions.
[ Donald O. Mayer ]
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——, and Peter Baker. "Clinton Details Global Warming Plan." Washington Post, 23 October 1997, Al.