Russia’s decision to ratify the Kyoto Protocol has turned the climate treaty into a challenge that the European Union will have to face in the next, few years. It is not clear how, and if, the European Emission Trading Scheme, which is supposed to start on January 1st, 2005, will work. Anyway, if the European Union isn’t willing to lose its face, something will have to be done in order to reduce greenhouse gases emissions. On the other hand, US President George Bush has put it plain and clear that his country will not follow the European way towards reduced emissions. He would rather rely on tax incentives to cleaner energies and voluntary compliance on the part of American businesses.
European politicians understand that the implementation of the Kyoto Protocol would have a great, immediate cost compared to small, long-term benefits (if any). This is why some of them (including EU former Energy Commissioner Loyola de Palacio, German Chancellor Gerhard Schroeder, and Italy’s Minister of Environment Altero Matteoli) have suggested that EU should (seek to) promote a global effort to address global warming, instead of pursuing a unilateral, and costly policy, which is unlikely to be effective.
This paper will address the following questions : does it make sense to pursue any policy to address climate change ? Is the Kyoto Protocol a cost-effective way to do it ? The answer, in both cases, is no : European climate policies rely on uncertain science, bad economics, and a biased political approach.