KYOTO AGREEMENT

EDMONTON JOURNAL - March 1, 2002
No Liberal tricks will save this: We'll suffer real damage if we push ahead with Kyoto
Lorne Gunter

There is one absolutely essential fact to keep in mind about the Kyoto accord, which allegedly will stop disastrous climate change: It doesn't apply to the whole world, just the developed nations. It's not so much that that's unfair, although it is. And preposterous, too, like commanding smoke to stay on one side of a room. Nor is my main purpose in pointing this out to draw attention to how anti-capitalist and anti-Western the accord is, although it is both those things. Constraining only industrialized nations amounts to arguing that the United States, Canada, Britain or Germany are more morally culpable for their emissions.

Of course, a ton is a ton is a ton to the environment. Emissions do not respect national boundaries, the advocates of Kyoto tell us that when discussing the deal's science, rather than the economics. So a treaty that seeks not a universal reduction in pollution outputs, but rather one that targets specific countries, must also be seeking some objectives beyond the purely environmental.

China and India produce seven to 10 times as much pollution per dollar of output as Western nations. If China produces $1,000 in shoes, and Oregon produces the same amount, China will have produced seven to 10 times as much pollution manufacturing that amount of footwear. China and India are growing so quickly economically that their total emissions may well surpass those of the U.S. in the next decade. So any treaty that exempts them from pollution controls is clearly making environmental objectives secondary to some other objective, but what objective?

The most plausible answer is the UN's desire to punish the West, while simultaneously pandering to the often brutal and Marxist regimes of the Third World. But that's still not what I want you to keep in mind when I say the Kyoto accord is dangerous because it does not apply to the whole world.

Because it applies only to high-wage, Western nations, and not to low-wage Asian or Southern nations, Kyoto is prone to what is known as the "leakage effect." During the free trade debate in the late 1980s, this was often referred to as capital flight. How low can we go? The opponents of the FTA between Canada and the U.S. warned us ad nauseam that once it was signed, Canadian manufacturers would move their operations to southern states where wages and taxes were lower.

Ottawa was able to staunch some of this flight by devaluing the dollar and driving down Canadian wages relative to American ones. Now the per capita income in Ontario is the same as it is in Mississippi. As a result, there was less capital flight than there might otherwise have been. But there probably isn't enough room left in Canada's national wealth to force a second such devaluation to accommodate the Kyoto accord. Our incomes are already just 60% as large as those of the Americans. Are we now prepared to cut our incomes to 50% of American levels or 40%, or less, just to keep our automobile plants from moving to Mexico or Indonesia, countries not covered by Kyoto? Of course, the U.S. has already announced it will not adopt Kyoto, either. The plants could move to Dayton and Biloxi, no need for them to go as far afield as Guadalajara or Jakarta.

"Leakage" is probably the most significant reason to worry about the Liberals' bull-headed rush to ratify Kyoto. Canada's manufacturing sector is already hanging by a thread in many places. It has been able to stay competitive because the federal government forced on us a sizable lowering of our standard of living. But that trick has been used up. If we raise the cost of fossil fuels or the electricity produced by them (big input costs in manufacturing), in the name of environmental protection, yet the Americans, Indians and Chinese do not, where do you think Canadian jobs are going to end up? What rabbit will the Liberals pull out of our hats (or more likely our pockets) to stem the flow this time?

The prime minister may scoff all he wants at the Canadian Manufacturers and Exporters' claim that implementing Kyoto will cost $40 billion in lost growth and nearly half a million lost and potential jobs. But what, pray tell, does he propose to do to keep such a scenario from occurring? The Liberals routinely view the Canadian economy as entirely insulated and completely stable. No action of theirs to tax the rich or save the fishery or preserve the environment could possibly have any detrimental effects on jobs or GDP. But the economic escape hatch in Kyoto is wide open and surrounded by flashing lights. And any government that plows ahead without seeing it is being wilfully blind to the real damage of Kyoto.

More on the EPA's "U.S. Climate Action Report 2002":

Astrophysicist Sallie Baliunas, Ph.D. at the Harvard-Smithsonian Center for Astrophysics and Deputy Director of Mount Wilson Observatory, considers the agency's report ludicrous, writing,

"Here are the scientific facts: The key layers of air, from one to five miles high, show no human made global warming trend. Global warming at the surface is largely, if not entirely, natural.

Therefore Kyoto-like greenhouse gas emission cuts will not affect surface warming."