Croker Sack

"Democracy is the theory that the common people know what they want, and deserve to get it good and hard." — Henry Louis Mencken (1880-1956)

Friday, November 05, 2004

Printing Money via the Kyoto Protocol

Russia has considered the probable economic impact and decided that complying with the Kyoto Protocol's limits on emissions of carbon dioxide and other gases will be a snap. The collapse of their inefficient heavy industry after the fall of the Soviet empire already reduced their emissions below what would be required by the Kyoto Protocol.

Here's an excerpt of the report by ABC News:

"The pact's approval followed fierce debates among Russian officials. Russia's foes of Kyoto, led by Putin's economic adviser Andrei Illarionov, warned that the pact would stymie the nation's economic growth. Kyoto backers rejected that claim, saying even after a five-year recovery, the post-Soviet economic meltdown has left emissions some 30 percent below the baseline.

"Russian officials have voiced hope that the treaty will enable Moscow to attract foreign investment for its crumbling industries through provisions allowing countries to trade greenhouse gas emission allowances.

"Under the treaty, Russia can sell unused emissions credits to countries that have exceeded their limits.
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"Once the deal takes effect, industrialized countries will have until 2012 to cut their collective emissions of six key greenhouse gases to 5.2 percent below the 1990 level."

An interesting part of the Kyoto Protocol to the United Nations Framework Convention on Climate Change is the idea of letting countries "sell unused emissions credits."

Several developed countries that adopted the Kyoto Protocol gave away their right to develop their own economies further, at least when carbon dioxide emissions are involved.

Having given away their right to produce energy through the burning of hydrocarbon fuels, those countries must now buy back what they gave away--or find some way to allow their economies to grow while simultaneously reducing emissions.

Happily, the U.S. is not a party to this international agreement, so we can continue developing our economy as best we can without Kyoto's limits--just as our competitors in the global marketplace like China and India can.

Kyoto places no limits on emissions by "developing countries," and instead gives them "a new source of export earnings"--through sales of the newly created emissions credits to the developed countries which gave their rights away when they adopted the Kyoto Protocol.

If the trading of emissions credits actually occurs, it will be almost like printing money. How strange that anyone would consider the result of this trade to be "export earnings," since the sellers will have sold neither goods nor services.


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