The news from Gleneagles is being overshadowed by today’s events in London. Nevertheless the G8 Summit continues and a joint statement will be issued tomorrow. Let us hope that regarding global warming it will be an ambiguous document without any real meaning and consequences. It is important for Europe that US President Bush does not comply with the green policies of the Kyoto Protocol.

British Prime Minister Tony Blair is a strong supporter of the Kyoto Protocol, an agreement between the European Union and a few other countries to reduce their emissions of the so-called greenhouse gases, that according to some scientists contribute to increase our planet’s average temperature to unprecedented levels. However, from a purely scientific point of view it is reasonable not to be that alarmist: climate did always change, it still does, and it always will. It is possible that anthropogenic emissions contribute to the process, but the size of the effect of man-made emissions on the atmosphere is small to negligible. There is even evidence that the earth’s temperature in some periods in the past was higher than today.

The Kyoto Protocol is not the solution. In line of principle Kyoto applies only to a limited number of developed countries that are asked to reduce their emissions by 6.5% by 2008-2012. The impact of such reductions on global emissions is very small; and the extent of the reductions is going to decrease with time, as developing countries’ emissions are increasing. Consequently the environmental benefit of any action is virtually zero. The case against Kyoto is even more stringent because the biggest emitter among developed countries, namely the US, has made it clear that it will not engage in Kyoto-style actions.

Officially European countries and the European Union as a whole criticize President Bush for “not caring about climate” and the like. But national representatives in smoke-filled rooms do have some reasons to be happy: by staying out of the protocol, the American President provides an excuse for Europe not to comply with the Kyoto targets - that the EU will not be able to meet. European tax payers and consumers should be grateful too.

In a press release the European Environment Agency stated that the EU is not on track to comply with reduction goals. Even more important, most member States are not on track either. European criticism towards the US seems exaggerated, rhetorical, and hyprocrital. If the US ratifies hypocrisy would be conclusively exposed, although at a high price for Americans: the US may be able to reduce emissions more efficiently than the EU. As a matter of fact, American efforts towards a more efficient use of fossil fuels have resulted in bigger gains in terms of carbon intensity than European wishful thinking. So we would have the paradoxical situation where the “big polluter” pollutes less than the self-proclaimed environmentally concerned Old Continent.

Perhaps the most important reason why President Bush will not ratify the protocol - despite Mr. Blair’s and his European colleagues’ pressures - is that he is well aware that the climate treaty would have a deep economic impact. A mandate to reduce emissions is a mandate to increase the price of fossil fuels through direct taxation or indirect measures (such as the European Trading Scheme for emission quotas). That would adversely affect economic growth and development, including the ability of a society in general, and companies in particular, to invest in research & development of cleaner technologies.

There is also another way in which Kyoto would have a negative impact. The rationale of Kyoto is that politicians know the optimum amount of emissions and then can regulate economy in order to get there. In other words, Kyoto gives the politicians the power to allocate resources in such a key market as energy. Through Kyoto green policies might bring about a red consequence: we would have the central planning of energy resources. There is no need here to explain why socialism does not, and cannot, work - it is just important that people in favour of Kyoto are well aware of what Kyoto really is.
As a result, assuming human emissions are bad for climate, climate might be worse off because of an anti-growth climate treaty. Hence, President Bush plays a key role in the defense of European citizens’ interests. The less America gets involved in the Kyoto protocol, the more it is just a rhetorical stand in the European countries. If European leaders fail to convince President Bush, the G8 meeting would conclude with no more than an ambiguous joint statement about the urgency to do something to protect the climate. Everybody would agree on that, provided that the concept of “doing something” is large enough to include pro-growth policies, such as tax reforms, deregulation, and limiting the size of government. The best the G8 summit can do is thus to issue a statement that means basically nothing. The alternative is that they actually do something… bad.