Kyoto through the backdoor

Published August 1, 2002

In an effort to circumvent President George W. Bush’s principled rejection of the high-cost, negligible-benefit Kyoto Protocol, the Senate majority is trying to use the pending energy bill to force Kyoto-like mandatory reporting of greenhouse gases (GHGs) and other climate change provisions on U.S. industry through the backdoor.

The House energy bill—passed promptly last August—contains no such climate provisions. Instead, it respects an existing program at the Department of Energy (DOE) that invites utilities and other industrial entities to voluntarily register their GHG reduction successes. (The President ordered this program strengthened just this past spring as part of his climate policy initiatives.)

But Senate Majority Leader Tom Daschle (D-South Dakota) and many of his colleagues will have none of this “voluntary” talk. They’re bent on forcing ill-conceived GHG reporting mandates now, in order to set the table for energy rationing in the future. Ironically, they have put these mandates into legislation that instead should deal with increasing energy supplies and improving infrastructure at a time when both our national security and economic security are at risk.

The Senate’s version of an energy bill, driven by mid-term election politics and cobbled together in a backroom after Daschle snatched it from relevant committees, contains provisions never debated publicly before its passage in May. Among such inadequately addressed provisions is a requirement for industry to report emissions of GHGs, including carbon dioxide that results from the burning of fossil fuels.

Costly mandates bring few benefits

These Senate bill provisions would force industry, transportation entities, state and local governments, schools, and other fossil energy users to submit to the Environmental Protection Agency and DOE annual reports documenting their GHG emissions (just what we need, more costly paperwork) … or face fines of up to $25,000 per day.

Not only would these mandates require the reporting of questionably measurable “direct” emissions from industrial processes, but they also would require estimated emissions from products manufactured by that entity, as well as all “indirect” emissions from electricity use, transportation, and other sources that future bureaucrats may decide to write into sweeping regulations.

Considering that the slim Senate majority is willing to saddle American businesses with additional millions of dollars’ worth of compliance costs at a time when increases in regulatory burdens are tipping the balance from profitability toward red ink, it’s fair to ask what all this mandated reporting will provide by way of public benefit.

Good answers to this question are difficult to come by. The United States already meets its Rio Convention (1992) obligations to report annual GHG emissions with an EPA report that calculates emissions by using national data for overall fossil fuel consumption.

Dangerous Pandora’s box

As one might guess, industry is virtually united in its desire to see DOE’s voluntary GHG emissions reduction reporting program work. Industry rightly fears the energy-rationing Pandora’s box presaged by the Senate energy bill’s onerous climate change reporting provisions. They fear the potential for economic ruin if that box is opened.

If the lid is to remain tightly shut, the administration and House conferees must remain steadfast as they work to remove the Senate’s mandatory reporting provisions in conference.

The House-passed energy bill is well balanced between incentive-based efficiency measures, increased energy production, and improved energy infrastructure. House conferees must insist that a final energy bill retain the proper focus, especially with respect to the Senate climate provisions. If they fail, as in a cheap monster flick, Kyoto will rise from the depths of a constitutionally sound executive branch rejection to stalk and wreak havoc upon our American economy.

Mark Whitenton is vice president of Resources and Environmental Policy at the National Association of Manufacturers.