When I first arrived at the White House in September 1996, I had no idea that one of the issues on which I would spend the most time during my period as a Member of President Clinton?s Council of Economic Advisers was global climate change. But Under Secretary of State Tim Wirth had the month before announced a major change in policy: that the United States would in multilateral negotiations now support "legally binding" quantitative targets for the emission of greenhouse gases. This left 15 months for the US Administration to decide what kind of specifics it wanted, at the Third Conference of Parties of the UN Framework Convention on Climate Change (UNFCCC), scheduled for November 1997 in Kyoto. Because other countries take their cue from the superpower (whether it is to support or oppose US positions), this countdown engendered a certain amount of suspense: What specifically would the U.S. propose at the Kyoto Conference, most notably regarding how the numerical targets should be determined? Outsiders demanded to know –with particular tenacity in the case of the U.S. Congress, who feared the worst. I was a member of a large inter–agency group that worked intensively on what was to become the Kyoto Protocol.
I never thought that the agreement had a large chance of being ratified by the U.S. Senate, or of coming into force in a serious way. There were too many unbridgeable political chasms, as I will explain. Furthermore I understand the reasons why almost all economists, at least in the United States, disapprove of the Kyoto Protocol. Nevertheless, I am prepared to defend the Clinton version of the treaty, and I believe it was a step in the right direction.
I will begin by noting that the weight of scientific opinion seems indeed to have concluded that the Earth is getting warmer, that increasing concentrations of carbon dioxide and other greenhouse gases are the major cause, and that anthropogenic emissions are in turn responsible. I am not a scientist. But the latest IPCC report concludes "The globally averaged surface temperature is projected to increase by 1.4 to 5.8 degrees Celsius" over the period 1990 to 2100, and "global mean sea level is projected to rise by 0.09 to 0.88 metres." The evidence has become clearer over the last ten or twenty years. President George Bush, the Second, made a big mistake when he initially allied himself with the minority of disbelievers. It was a political mistake if nothing else. Even granting that the incoming administration in 2001 did not want to pursue Kyoto, it was foolish and unnecessary for the White House to dismiss the climate change problem.
This paper will take as given that the problem of global climate change is genuine, and is sufficiently important to be worth addressing by steps that are more than cosmetic. Because the externality is purely global – a ton of carbon emitted into the air, no matter where in the world, has the same global warming potential – the approach must be multilateral. Individual countries will not get far on their own, due to the free rider problem. Specifically, multilateral negotiations have since the Rio Summit of 1992 proceeded under the UNFCCC.
The paper will summarize major decisions that the Clinton Administration had to make, and why it made them as it did. What were the quantitative limits on emissions to be? How would greenhouse gases other than carbon dioxide be treated? Would trading across time or across countries be permitted? And so on. In my time in the government, I was surprised to discover that policy makers often must make such technical–sounding decisions with relatively little help from the body of technical knowledge and opinion outside the government. It is not just that academic research is too abstract to be of much direct help with the minutia of specific policy decisions. The pronouncements of think tanks and op–ed writers also ignore practical complexities, because they seek to make big points for general audiences. We were largely on our own.