The high costs of Kyoto

Published May 1, 2001

New York Times columnist Bob Herbert opened a recent missive by claiming the “Earth has recently warmed so much, and the rate of warming is now so fast, that the effects have become increasingly obvious to the scientist and the layman alike.”

For those of his readers to whom the effects are not obvious, Herbert elaborated: the “oceans are rising, mountain glaciers are shrinking, low-lying coastal areas are eroding, and the very timing of the seasons is changing.” He noted the “decade of the 1990s was very likely the hottest of the last millennium.”

“If there were such a thing as a global alarm bell,” Herbert warned, “now would be an excellent time to ring it.”

It is, according to Herbert, time to “mount an international effort to cut the emissions of greenhouse gases to an extent that would ward off a global catastrophe. It’s possible. But there is not a lot of time left.”

Presumably, the “international effort” to which Herbert referred is the Kyoto Protocol, which aims at remedying global warming by requiring nations to reduce their output of greenhouse gases. Under this plan, the United States is required to reduce its carbon dioxide emissions to 7 percent below 1990 levels by the year 2012.

In stark contrast to their gloom-and-doom hysteria over global warming is the left’s unbridled everything’s-coming-up-roses optimism regarding the potential economic effects of implementing the Kyoto Protocol.

While President, Bill Clinton claimed a reduction in CO2 could be achieved “with existing technologies or those already on the horizon, in ways that will not weaken the economy but in fact will add to our strength in new businesses and new jobs.” A U.S. Department of Agriculture report concluded that implementing Kyoto would cause energy prices to rise between 3.2 and 7.7 percent, causing agricultural income to decrease by a mere 0.5 percent.

Environmental groups like the Sierra Club and Environmental Defense, from which the Times’ Herbert gets much of his information, don’t even mention the possible economic costs of combating global warming on their Web sites. Brett D. Schaefer of The Heritage Foundation says “other groups, like the National Environmental Trust, feel so confident that they dismiss warnings about the harmful economic threats of Kyoto as ’empty threats.'”

Confronting the costs

Yet several independent organizations, and even some government agencies, have warned that implementing the Kyoto Protocol would have severe negative effects on the U.S. economy.

In a 1997 study, the independent Wharton Econometric Forecasting Associates, Inc. (WEFA) found that if the Kyoto Protocol were implemented, the U.S. would lose $3.3 trillion in output between 2001-2020. Employment, WEFA projected, would fall about 0.7 percent in 2005, 1.3 percent in 2010, and 0.9 percent 2020. Clinton’s own Department of Energy has predicted Kyoto implementation would result in a $397 billion loss in gross domestic product in 2010.

For the individual American holding a manufacturing job and earning about $30,000 per year, those GDP losses represent an income loss of 2.9 percent ($879). For those employed in non-manufacturing jobs, the income loss would be 1.8 percent ($540).

Agriculture would suffer greatly under the Kyoto Protocol. Economist Terry Francl of the American Farm Bureau and Joseph Bast of The Heartland Institute predict energy prices could rise 25 to 50 percent, increasing farm production expenses between $10 and $20 billion per year. As a result, net farm income would fall by 24 to 48 percent.

Pocketbooks not all that would suffer

Public health, too, would suffer if the Kyoto Protocol were implemented. One way to decrease CO2 emissions is to increase the fuel efficiency of cars. To do that would require reducing the size and weight of automobiles–two key factors in vehicle safety.

A study by Frank B. Cross and Herbert D. Kelleher, published by the Competitive Enterprise Institute, estimates that increasing average fuel economy nationwide from 27.5 to 40 miles per gallon would result in an additional 1,650 fatalities and 8,000 injuries on the nation’s highways.

Few public policy decisions offer a “free lunch”–benefits without costs–and the Kyoto Protocol is no exception. It will impose immense burdens on the U.S. economy and its citizens. Longer unemployment lines, declining standards of living, decreased agricultural output, and increased public health problems are among the likely effects of implementing the Kyoto Protocol . . . all to address a global warming phenomenon that science is not at all certain exists.

David Hogberg is a research analyst with the Public Interest Institute at Iowa Wesleyan College. This article is adapted from an Institute Brief. The Public Interest Institute can be found on the Internet at