Regulating CO2 gas

As the nearby chart shows, CO2 emissions growth in the U.S. far outpaced that of the 15 "old" members of the European Union from 1990-95 and especially from 1995-2000, when Mr. Climate Change himself, Al Gore, was the second-most powerful man in America. But, lo, the U.S. has outperformed the EU-15 since 2000, according to the latest U.N. data. America's rate of growth in CO2 emissions from 2000-04 was eight percentage points lower than from 1995-2000.

By comparison, the EU-15 saw an increase of 2.3 points. Only two EU states, Britain and Sweden, are on track to meet their Kyoto emissions commitments by 2010. Six more might meet their targets if they approve and implement new, as yet unspecified, policies to restrict carbon output, while seven of the 15 will miss their goals.

Cynics play down America's improvement, noting that its economy cooled from the earlier years to 2000-04. True, but the EU-15 also had lower economic growth in the latest period and still saw its emissions growth rate double. What's more, the U.S. economy expanded 38% faster than the EU-15 in 2000-04, and its population twice as fast. So the trend lines, for now, are reversing. That may frustrate the green lobby because so much of its fund raising depends on vilifying the U.S. But facts are facts, no matter how underreported they are.

Europe's dismal record is explained by its approach to reducing emissions. The centerpiece of the Continent's plan is a carbon-trading scheme in which companies in CO2-heavy industries receive tradable permits for a certain amount of emissions. If they emit more CO2, they must buy credits from firms that are under quota. The idea is to force companies to emit less CO2 by making it prohibitively expensive to keep the status quo.

All this scheme has done so far is provide further proof that government cannot replicate the wisdom of markets. A red-faced European Commission recently admitted that it allowed more permits than there were emissions in 2005-07, keeping permit prices low and undermining the entire system. When Brussels tried to make amends by ordering several member states to cut carbon permits by 7% more than expected for 2008-2012, industry and national capitals squealed. The market hadn't priced in such a dramatic reduction. With carbon permits trading relatively cheaply, firms have been able to get by with minimal changes to the way they do business. That has minimized Kyoto's economic impact.

From the WSJ. There is the hype that by not being a signatory of the Kyoto Protocol the US is un-enlightened compared to our EU counterpart. I guess this is just another example of being practical is superior to "being enlightened" or reality over ideal.

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