Funds Cool, Earth Keeps Warming
Global warming is likely to reemerge soon as a hot political issue. It is, therefore, a bad time for Congress to cut funding for programs that study and respond to the threat posed by global warming - including one essential but largely overlooked program known as ''Joint Implementation.''
The effects of the 1992 eruption of Mt. Pinatubo in the Philippines have largely worn off. Pinatubo's powerful explosion shot huge amounts of particles into the stratosphere, contributing to a temporary global cooling. Scientists say those particles have now settled out, resulting in the reemergence of the global warming ''signal.'' Indeed, the last eight months of 1994 were the warmest on record, and the trend is likely to continue.
While global warming's political profile has dropped off markedly in recent years, its scientific profile has not. The international scientific community has been painstakingly refining its understanding of the climate system and is more confident today than ever before that concern about global warming is warranted. For example, a recent consensus report on climate change available from the US Global Change Research Program says it is ''very probable'' that ''global mean surface temperature warming'' will increase significantly by the mid-21st century.
A business-friendly approach
Tom Karl, senior scientist at the National Climatic Data Center and among the most pragmatic and respected of climate researchers, recently published a study indicating that since 1980, US weather has become more extreme (note the recent floods in the Midwest), a trend he is now 80 percent certain is attributable to human-induced greenhouse warming.
Insurance companies are among those most concerned. Senior officials from Munich Re, the world's largest reinsurance firm, and Lloyd's of London attended the Berlin Climate Summit last March as observers, in part because of their concern about the increasing costs of responding to natural disasters over the past decade. Richard Keeling, former deputy chairman of Lloyd's, observed that since 1987, ''every major economy where we have significant exposure has had a loss.''
When climate change becomes a political priority again, attention will turn to identifying the most cost-effective means of reducing greenhouse gas emissions. In the past, strict regulatory responses to environmental problems have tended to be economically counterproductive, inflexible, and highly unpopular within the private sector.
One innovative alternative approach to the global warming problem that is being developed and tested by the US government, in conjunction with the private sector, is a pilot program known as ''Joint Implementation.'' The JI program would enable a more-flexible, market-based approach to achieving mandated reductions in greenhouse gas emissions through the creation of an international market for carbon-emissions permits, modeled on the successful US pollution-permit trading program. If a company reduced greenhouse gases in a developing country, it would receive an emissions credit, which could be retained or sold to another firm at market value.
Less greenhouse gas, lower cost
The JI program is essential because it would expand the private sector's options for complying with future US government requirements to reduce greenhouse-gas emissions. Under JI, a private firm could choose to reduce emissions at its domestic facilities; it could obtain a JI emissions permit by investing in a greenhouse-gas reductions project in a developing country; or it could simply purchase an emissions permit from another firm that had completed a reductions project in a developing country.
This flexibility would enable firms and the US public to achieve the reductions in the most cost-effective manner. For example, a recent study by the Tennessee Valley Authority (TVA) - one of the largest electric generating enterprises in the US - indicated that TVA customers would suffer a 10 percent price increase for electricity if the authority were required to reduce its emissions to 1990 levels by 2000 solely by taking action domestically. With JI, the extra cost would be as low as 1 percent.
No wonder so many private firms are interested in laying the groundwork for JI. They view it as an important hedge against the possibility of an emissions mandate being imposed on their operations because of global warming. By participating in the pilot phase, they can help shape the program so that an option other than rigid regulation is available should the need arise.
Unfortunately, fiscal year 1996 funding for the JI program was recently eliminated in the House, perhaps because it was incorrectly associated with some of the Clinton administration's more activist ''climate change'' initiatives, and because its small size ($3 million in FY '95, and $9 million requested in FY '96) made it an easy target for budget-cutters on Capitol Hill. Unless the Senate takes steps quickly to restore JI, this precedent-setting program will fall into disarray at precisely the moment global warming returns as a national and international priority.
