Paris, 12 September 2006 – According to the last IEM’s economic note published today , the Kyoto protocol is a very risky solution, considering its disastrous economic consequences on our quality of life and the likely insignificance of its impact on the climate.
According to the IEM, « we must at least avoid attributing every virtue to the Kyoto protocol and recognize that public debate on global warming is far from over. » This debate should move toward greater consideration of the various aspects and uncertainties concerning global warming and the measures intended to limit it.
The negative effects of Kyoto
In order to widen the debate, IEM’s document analyses the economic consequences of the protocol’s implementation. While warming will not be experienced everywhere on earth but could on the contrary provide with some benefits, the tax and regulatory measures of the protocol will penalize activities that emit greenhouse gases. But, as reminds us the IEM, those activities are everywhere : heating and cooling, energy production, the manufacture of plastic, steel, etc., the processing of products, or powering our many electrical devices (lighting, computers, household appliances, etc.). Kyoto, by increasing the prices of all these goods, will inevitably reduce our purchasing power and quality of life.
Is the protocol at least efficient ?
On that issue, the IEM emphasizes that the first doubt regarding Kyoto’s effectiveness comes from uncertainty as to the causes of global warming. There is actually no scientific consensus on the belief that a significant share of global warming is due to human emissions of greenhouse gases. Some researchers even say warming may result mainly from greater solar activity.
Besides, the protocol applies at present to a limited group of countries. With factors of production costing more, many firms that come under the protocol will simply move their production to countries that are not covered by it. It does not however legitimize a broadened Kyoto protocol that would condemn many countries to remain poor. The IEM reminds « that the more economies develop, the more their accumulated capital is substantial and of high quality. Countries with high-quality capital will be better able to resist the negative effects of future global warming than less developed countries. »
The Economic Note is available on the website of the IEM : http://www.institutmolinari.org/spi…
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