President Puts Off Hard Decisions for 10 Years; Mandatory Market- Based Approach Needed to Combating Global Warming, Say RFF Scholars

2/14/2002

From: Ray Kopp, 202-328-5059, Richard Morgenstern, 202-328-5037, or Dallas Burtraw, 202-328-5087, all for Resources for the Future (RFF)

WASHINGTON, Feb. 14 -- President Bush has put off the tough decisions necessary to tackle global warming for another 10 years, say leading environmental economists and climate change experts Ray Kopp, Dick Morgenstern, and Dallas Burtraw. The RFF senior fellows say a mandatory -- not voluntary -- market based approach must be put in place if the U.S. is serious about reducing greenhouse gas emissions. The President's alternative to the Kyoto Protocol lacks the credible, strict incentives needed to reach the administration's stated goal of not just halting, but reducing, those emissions in the future.

"It's good the administration is now on the court, but the net is too low and the baseline might get washed out," says Morgenstern. "Now the debate can really start, but the administration is pushing off the hard decisions for another ten years," says Kopp.

"In time, we are going to have to act more decisively to further slow the growth in greenhouse gas emissions if we really want to protect the global climate. Voluntary trading programs and R&D incentives only take us so far. A mandatory market based greenhouse gas program like the cost effective one we used successfully to combat acid rain is what's needed, the sooner the better," adds Kopp.

Morgenstern says "the devil is the detail", adding that even to make a voluntary plan workable you have to write the rules for corporate participation more strictly. "If the rules are too soft, there's a potential for companies and individuals to take credit for actions that would have occurred anyway. A long line of bicyclists armed with paper credits in 2012 could limit the effectiveness of more stringent policies planned for that year," Morgenstern says.

Dallas Burtraw says the Bush plan is actually setting energy policy through environmental policy. "The conventional pollutant (So2, NOx, mercury) part of package will impose billions of dollars in costs on electricity industry, but what the industry gains may be more important: That is, another decade of prominence for coal as the fuel of choice for electricity generation."

Kopp, Morgenstern and Burtraw say any credible policy must balance environmental protection with economic growth. "That's why we propose a 'safety valve' be built into a mandatory carbon emissions targets as part of a 'cap and trade' program. If the cost of meeting those targets rises above a recommended trigger price of $25 a ton (equivalent to a 6 cent gas tax) emissions could then rise within an agreed period.

--- NOTE: Ray Kopp, Dick Morgenstern, and Dallas Burtraw are available for interviews and questions on the implications of the Bush Administration's plan to address global warming. The RFF senior fellows can offer detailed analysis of the proposals, how they will play out domestically and internationally, and what their impact will be on the environment, consumers, and industry.

Morgenstern, whose research focuses on the use of economic incentives to address global climate change, participated in negotiations for the Kyoto Protocol as a former senior economic counselor to the undersecretary for global affairs at the U.S. State Department. He was also administrator of the EPA's Office of Policy Analysis.

Kopp, an expert on global climate change policy and environmental regulation, is also executive editor of the RFF climate change website 'Weathervane' and a member of the U.S. State Department's Advisory Committee on International Economic Policy.

Burtraw, also an RFF senior fellow, is an expert on emissions and trading permits as well as the electric utility markets and the social costs of pollution.

------ Resources for the Future (http://www.rff.org/) is an independent, non-profit and non-partisan research institute focusing on improving environmental and natural resource policy.