A good friend of mine asked me what's wrong with the Kyoto Protocol (KP) and the forthcoming Copenhagen meeting (to start next week) projected to produce a sort of KP Part II in binding environmental commitments. He does not see such international environmental regulations restrict economic freedom and individual liberty.
For me, the main problem with KP and soon, the planned Copenhagen agreement, is the extent of new environmental regulations, energy rationing, carbon taxation, carbon cap and trade, carbon tariff and eco-protectionism. In short, an expanded ecological central planning.
The science behind anthropogenic global warming (AGW) is highly questionable, if not discredited. The current "climategate" scandal is one proof that the AGW claim is not even a theory because of the presence of so many contrary data and facts that do not conform with the predictive capacity of the "theory". Thus, imposing those carbon emission restrictions and regulations based on suspicious, heavily debated, if not wrong science, is wrong.
About clean development mechanisms (CDMs), certified emission reduction (CERs) and related schemes for carbon mitigation, these are among the offshoot of carbon rent-seeking. Consider the following examples.
Philippine Airlines (PAL), Cebu Pacific airline, Superferry shipping line, Victory bus line, San Miguel Corp., for instance, will be assigned a carbon cap by the DENR or a new climate bureaucracy by the Philippine government, say at X tons per year starting 2010. Then such climate or carbon control agency will declare,
"You PAL (or Cebu Pacific or Superferry, etc.), your carbon emission cap by 2015 will be reduced to (X - 10%); by 2020, it will further be reduced to (X-20%); by 2030, it will be further reduced to (X - 30%), and so on."
So as the number of airplanes of an airline company, or the number of boats of a shipping company, the number of buses of a bus company, etc. are increasing because the population and passengers are rising and people are driving less too, the emission from these corporations will be rising.
So you have a situation of rising emission from these companies but the cap given by government is reducing. What will these airline, shipping line, bus line and other companies do? One is invest in emission-reduction technologies to be put in the engines of their airplanes, boats, vehicles, and other machineries. If this is not technologically possible, or very expensive to do, another option is to buy carbon credits from some companies, whether in the Philippines or abroad, that sell extra carbon offsets (say from a solar power plant or wind power farm).
As carbon caps across the world are declining, the number of companies seeking to buy carbon credits expanding, the price of carbon credits naturally will rise. The price of carbon per ton will rise. So those airlines, shipping lines, hotel and restaurant chains, bus lines, vehicle manufacturers, etc. will be passing on the extra cost of higher carbon credits to their consumers, to their passengers, to the public.
CDM sounds "clean" in theory if the AGW science is absolutely correct. But in reality, such mechanisms contribute to higher prices, both of energy and consumer items. Lots of reports that such cap and trade system as CDM has resulted in job losses and company closure, in Europe. The value of carbon trading was $128 billion in 2008 alone, and those do not include companies in the US as the US government is not a signatory to the KP.
At home, some political families were said to have made big money with the mandatory Ethanol 10% (E10) and biodisel 5% (B5) provisions. They capitalized on the carbon restrictions, that all petroleum companies in the country, big and small, will be forced to buy from them. Of course there is a related issue of agricultural lands previously planted to food crops have now been converted to fuel crops, contributing to the recent and continuing food price inflation.
A poor household will soon face higher electricity bill as "non-clean" but cheap energy sources like coal will be slapped with high carbon taxes. A poor and middle class family will soon face higher bus fares, higher airfares and boat fares, because of those carbon caps and trade and related CDMs.
So those supposedly "market-based" instruments to drastically cut carbon emission in the atmosphere like CDM and CER, are actually very distortionary of the market economy. Banks, carbon traders and other private and government bodies that live off implementing and monitoring those schemes become the new carbon rent-seekers. They produce not a single kilo of food, transport not a single passenger, or produce not a single kwh of electricity, but they make big money, hundreds of billions of dollars of carbon traded money every year.
My friend suggested that Kyoto Protocol (KP) is an application of the polluter-pay principle. He also suggested that most developing countries, or Annex II countries, are not obliged by KP to make drastic carbon emission cuts.
I think he is right that for now, developing countries like the Philippines are not obliged to make deep emission cuts. But it's just a matter of time. When KP was sealed in 2005 I think, China, India, Brazil, Indonesia, S. Africa, Mexico, etc. were just innocent countries. Now in the Copenhagen meeting, there are direct cap being expected, if not imposed, on them, especially China. In addition, some rich countries are threatening that developing but very big economies like China and INdia, should make their own deep emission cut, otherwise they will impose high carbon tariffs ("eco-protectionism") on their exports. And this makes implementation of the emission cut less transparent. Any rich country can slap different carbon tariffs for different countries, like +10% on top of existing tariff duties for Mexican exports, +15% for Chinese exports, etc.
So for the Philippines having 92 million people, the 12th biggest population in the world, it should be a matter of time and we will be given carbon cap by some international climate bureaucrats.
But even if there will be no carbon emission cap to be imposed on the Philippines and other poorer countries say, in the next 30 years, such economies will also suffer from low and anemic growth that will happen in rich countries. Why? Because the rich countries are the main buyers of our exports, the main employers of our outbound workers (the OFWs), among the main sources of in-bound foreign tourists and foreign investors.
Losing jobs as a result of restricting environmental and energy regulations in rich countries. Last month I read about the biggest aluminum plant in the US closing, going bankrupt. Why -- energy prices in the US becoming more and more expensive. Some states are more strict than the federal government in practically killing coal power plants (which supplies about 60 percent of all US energy needs).
I mentioned that coal is cheap energy source because I read that the per kwh cost of generating electricity from solar and wind power is 10x that from coal. At least in the US energy situation.
I also doubt that the Philippines will be able to sell substantial carbon credits to companies from rich countries because growing domestic demand for more power are often not enough. Whatever new power plants to be put up, from renewables like hydro and geothermal, will be snapped up by domestic industries and households, no credit to be left to foreign companies from abroad wanting to buy carbon credits.
Finally, we should visit and review some scientific literature on anthropogenic global warming (AGW) science, that it is highly debatable if not discredited, because all those carbon regulations are based from that "theory".
Here's one online search even for fun:
Google "global warming", you get 9.8 million entries (as of this writing)
Then google "climategate", you get 13.4 million entries!
The former is 3 decades old, the latter is only 2 weeks old.
The latter is about the hacked emails, thousands of emails and documents at the Climate Research Unit (CRU) of the Univ. of East Anglia in Britain, where a number of warming scientists were emailing each other how they cheated on climate data to "hide the decline" in global temperature, how to hide or destroy climate data to escape UK's Freedom of Information law, how to kill and not publish scientific papers that question man-made warming in some scientific journals, and so on.
These warming scientists and politicians that give them millions of dollars of climate research funds have one major goal: to scare the world of "impending environmental catastrophies" so that the world will accept their planned ecological central planning agenda.
The big problem of the UN, Al Gore and other warmers now, is that millions of people around the world have already known and read the climate data manipulation and bastardization of climate science. And these people are angry.
A number of NGOs and institutes in the Philippines are pushing now the Freedom of Information (FOI) bill. It was passed in the House of Representatives, awaiting action at the Senate. MG Thinkers is among the 70+ institutes and NGOs that signed the FOI statement.
The UK has a Freedom of Information (FOI) law. In the "climategate" or climate scandal still on-going, a number of the hacked emails showed that the head of the Climate Research Unit (CRU), Dr. Phil Jones, was emailing other warming scientists, "don't let them know that UK has a FOI law" as a number of skeptical scientists were demanding certain climate data. In succeeding emails, Phil Jones later exhorted other scientists to "destroy" climate data before the skeptics would find and see them under the FOI law.
I myself have difficulty getting RP temperature data from PAGASA. I was emailing one official of the meteorology department, cc'd Nathaniel Cruz -- yes, the known and affable Tani Cruz -- and they won't reply to my email. They know my stand that I question man-made warming. Is this the reason?
So, go ahead with FOI bill in the Philippines. Time is very short for the Senate to act as the election campaign period is fast approaching.
Liars and robbers in government hide from transparency and accountability because they are not obliged by the law to open up certain information to the public.