Most of the details of the Kyoto Protocol have been agreed on but the Bush Administration is still adamant that it is the wrong policy for the U.S. With the rest of the world moving forward with the treaty, what are the implications for U.S. business? Host Steve Curwood speaks with Kilaparti Ramakrishna, an expert in international environmental law.
CURWOOD: This is Living On Earth. It took four years of international conferences and at least one near death experience in The Hague, but the rules to implement the Kyoto Protocol to combat climate change have finally been worked out. Compromise was the watchword of the latest round of negotiations, which ended July 27th in Bonn, Germany. Europe, in particular, wanted tougher rules than were adopted in Bonn, but Margot Wallstrom, Environment Commissioner for the European Union, conceded it was necessary to start someplace.
WALLSTROM: We are also willing to pay a price for that, because we cannot negotiate with the environment.
CURWOOD: As dropouts from Kyoto, the U.S. delegation remained largely silent throughout the talks and kept its promise not to obstruct the process. But that didn't satisfy all. Some jeered U.S. Under-Secretary of State Paula Dobriansky when she addressed the final high level session.
DOBRIANSKY: The Bush administration takes the issue of climate change very seriously and we will not [audience jeering] abdicate our responsibilities. Mr. President, thank you again for your many contributions to this process.
CURWOOD: With me to talk about the agreement to implement Kyoto is Kilaparti Ramakrishna. He's an expert in international environmental law and Deputy Director of the Woods Hole Research Center in Massachusetts. Mr. Ramakrishna also advised the United Nations during drafting of the Framework Convention on Climate Change, upon which the Kyoto Protocol is built. Welcome.
RAMAKRISHNA: Oh thank you.
CURWOOD: Under the Treaty, European and Japanese companies -- any industrial nation companies -- get to invest in so-called clean technology in developing nations. And also companies in countries that reduce CO2 emissions below their targets will get to sell emissions credits. What kind of money is there to be made here?
RAMAKRISHNA: Depending on whose study you rely on, between 250 to 450 billion dollars per annum. A lot of that could go into, you know, into introducing new technologies, as well as doing things that reduce greenhouse gas emissions. So that is about the range.
CURWOOD: Let me make sure I understood you correctly. You're saying about a quarter of a trillion dollars a year involved in international trading of the technology and expertise and such for combating climate change under this regime?
RAMAKRISHNA: I'm saying it could potentially be as high a figure as that.
CURWOOD: Now, of course, President Bush has said that the Protocol would put undue economic strain on the U.S., and that was the principal reason for us not participating. What are the implications for American business, given that the U.S. won't be ratifying the Treaty, and won't be able to participate in the emissions trade?
RAMAKRISHNA: They are big. The first question, of course, is, is it really so damaging to the U.S. economic interests? Again, if you go by studies, they are all over the map. But a majority number of those studies say that U.S. actually stands to gain by emissions trading, a joint implementation, or even clean development mechanisms. The private sector is increasingly getting interested in participating very vigorously in this, and I think in the end, it is the private sector that is going to tell Bush that we need to move forward with this Treaty.
CURWOOD: What happens to U.S. companies that operate internationally -- multi-national companies -- when this emissions trading starts on the Kyoto Protocol?
RAMAKRISHNA: It's a very good question. Potentially, a lot of legal implications are associated with it. To give you just an example, a company that is situated in London, for example, has produced emissions in a significant way, but has its corporate headquarters in Washington, D.C. You know, where do those emissions reductions account from? And the country might maintain that if the emissions are released from the particular undertaking in England, the U.K.'s responsible. Therefore, if there are gains made, then U.K. should be credited with it.
CURWOOD: How will U.S. companies be able to participate in the buying and selling of these emissions credits?
RAMAKRISHNA: They will not be able to do that because if a country is not a party to the Convention and the Protocol, then it cannot benefit from the provisions of these conventions. What a company in the United States that is interested in benefiting from it might do is establish a subsidiary of sorts in one of the countries where the Protocol is honored, and benefit from it that way.
CURWOOD: Some have said that the agreement struck in Bonn is a major foreign policy defeat for the United States. How do you feel about that assessment?
RAMAKRISHNA: Without a question, it was very distressing to be going from the United States to this Conference and to see the official delegation being so silent. The international community did everything it possibly could do to give the kind of additional room and time for the new administration to respond to what needed to be done. As you remember, going back in time, it was at the request of the United States government that the current session was moved from May to now. And it was at the request of the United States that a number of delegations moved their position from what was not accomplished in The Hague last year. So the international community did everything that it possibly could do to accommodate the United States, but the United States did not come forward with anything. They had asked for time -- they got it. They said they were going to introduce a plan -- there was no plan. Even now they talk about an alternative plan. I mean, it is simply not on to take the international community and then try to lead it astray this way. And the countries outside are very much cognizant of this and are unhappy, to put it mildly, and decided to move forward without the United States. So there is no question in my mind that this is a major diplomatic defeat for the United States.
CURWOOD: What are some of the possible consequences?
RAMAKRISHNA: It loses credibility for the international community. In international negotiations everywhere, if you lose the confidence of your partners to be trusted to do what you say you're going to do, it is a major setback.
CURWOOD: The White House says it still plans to come up with alternatives for the Kyoto Protocol. At this point, how relevant would those alternatives be, do you think?
RAMAKRISHNA: If we had not arrived at the deal in Bonn, then it would probably make a difference. But currently, with every single of the 186 countries that ratified the Framework Convention on Climate Change, with the exception of the United States joining this new deal, there is no chance at all that any alternate plan from the United States would be taken seriously. And honestly, I don't think the United States is ever going to submit a plan like this, because it would be laughed out of hand.
CURWOOD: The White House says, "Well, you know, the rest of the world can do its own thing. But this is in the best interest of America to stay out of the Kyoto Protocol." And they sincerely believe this. Don't they have a case?
RAMAKRISHNA: They probably sincerely wish that the problem would go away. They probably think that they will continue to have the private sector support in their position that the Kyoto Protocol is a bad thing for the private sector. But I wouldn't be a bit surprised if come next year, they turn around and then say that, well, we now have a better appreciation of the rules developed under the Kyoto Protocol, and what is more, we have carried out more studies, and then say that now maybe we could actually take part in it.
CURWOOD: I want to thank you for taking this time with us today.
RAMAKRISHNA: Thank you, Steve.
CURWOOD: Kilaparti Ramakrishna is Deputy Director of the Woods Hole Research Center.
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