heritage.org/library/categories/enviro/
ECONOMIC WINNERS AND LOSERS AROUND THE WORLD
A global climate change treaty with enforceable restrictions on emissions would impose massive economic hardship on the global economy. For example, the Australian Bureau of Agricultural and Resource Economics (ABARE) has estimated that adopting such a treaty would curb global GDP growth and result in a 0.8 percent to 1.1 percent reduction in total world output in 2020 below the baseline. The World Bank estimates that the global economy will grow at an average of 2.9 percent from 1992 to 2020.66 Based on ABARE estimates, including legally binding emissions restrictions in the UNFCCC would cause a reduction in economic growth in 2020 by one-third. In dollar terms, this would be a loss of between $463.3 billion and $637.1 billion.67
The actual costs of the treaty's implementation, however, will be much greater. The treaty will retard economic production every year after it is implemented. Assuming that reduction in production remains constant at 1.1 percent of global GDP growth from 1998 to 2020, the cumulative effects could exceed $10 trillion.68 ABARE's economic analysis shows that the economic effects on the industrialized countries will be particularly severe. Annex I (industrialized) countries would suffer a 1 percent to 1.5 percent decrease in GDP growth, while the developing countries of Annex II would experience only a 0.2 percent to 0.5 percent reduction in output in 2020 from the baseline.
Different economic configurations and reliance on trade, however, will make the effects deviate from country to county within the two country categories. Decreases in production result from several sources. As the Annex I countries reduce fossil fuel consumption, costs of production and consumer prices will increase and trade in fossil fuels and fossil-fuel-intensive products, such as steel, will decrease. The resulting reduction in economic activity decreases consumption, wages, and demand for labor and capital. In addition, fossil-fuel-intensive industries will relocate to Annex II countries. Annex I countries that export fossil fuel (particularly coal) and have significant fossil-fuel-intensive manufacturing sectors will need to modify their power generation facilities to reduce emissions. Large exporters of products that emit high levels of greenhouse gases would be affected more detrimentally than those that export less or not at all.
The United States is only one of the countries that would endure sharp economic penalties from implementation of this treaty. Other major losers include Australia, New Zealand, and Japan. The ABARE analysis indicates that Australia would experience the worst economic damage from the treaty. Australia exports large quantities of fossil-fuel-intensive products, such as steel and aluminum, and relies heavily on coal for electricity. As a result, its projected growth in greenhouse gas emissions would exceed the Annex I country average, generating greater costs for treaty compliance than for all other countries. The Australian economy would be hurt by the decreasing demand for fossil fuels?especially coal, one of Australia's largest exports.69
New Zealand and Japan also would be affected adversely. New Zealand's coal-intensive electricity sector would be hit hard by the increasing prices for fossil-fuel-intensive imports.70 Japan already has invested large amounts of capital in renovating its industrial sector to reduce its dependence on fossil fuels. The treaty would require additional investment and render new facilities obsolete.71
The Annex I countries least affected would be the former Soviet Union and countries in the European Community. For example, ABARE estimates that the welfare loss for a European is one-sixth that of an American and 1/22 that of an Australian.72 Furthermore, although wages in the European Community would be required to fall by 4 percent to absorb unemployment generated as a result of the treaty, wages in Australia would have to fall 19 percent below the baseline. These comparatively lower economic costs for the European Community and the former Soviet Union may explain their support for the treaty. Annex II countries also would suffer from the higher costs of production in industrialized countries, which would increase the prices of Annex I exports. And interest rates would likely increase, thereby raising the debt burden of Annex II countries.
The detrimental effects of the treaty, however, will be mitigated by industrial relocation from the Annex I countries. Under the terms of the treaty, the developing countries will have a competitive advantage over industrialized countries because of the exemption from greenhouse gas emissions restrictions. This exemption will lead Annex I greenhouse gas emissions-intensive industries, such as steel, chemical, and mineral refining, to relocate to Annex II countries. This shift will increase both their domestic production and exports of fossil-fuel-intensive products.73
As with Annex I countries, there will be winners and losers among the Annex II countries. An independent study conducted by WEFA74 demonstrates that the treaty will benefit the Asian Tigers and other relatively wealthy developing countries and cripple the economies of fossil fuel exporters in the developing world. Specifically, if the treaty were implemented in its current form, South Korea, Taiwan, and Mexico could be expected to experience an increase of 5 percent in annual GDP growth. Argentina, Brazil, China, India, Indonesia, Hong Kong, the Philippines, Singapore, and Thailand would experience increases of as much as 2 percent in annual GDP growth. Meanwhile, the WEFA model also indicates that Algeria, Chile, Colombia, Egypt, and Venezuela would suffer 2 percent to 5 percent reductions in annual GDP growth, and Ecuador, Nigeria, Peru, and Saudi Arabia would suffer a decrease of more than 5 percent.75
Economic predictions show that the overall impact of the treaty will be a net decline in global economic growth, resulting in massive loss of wealth and a decline in general welfare. However, these damaging effects will not be distributed equitably. Specifically, the European Community, the former Soviet Union, and most of the wealthier developing countries would suffer minor effects relative to other countries. These other countries, which stand to be hurt the most by the global climate treaty, should recognize the support accorded the treaty by the EC, the former Soviet Union, and wealthy developing countries for what it is: pure self-interest.
busmaster, there is still doubt that human activity has anything to do with global warming. The earth's climate has not been stable in it's history. Why does anyone expect that it will be stable now. It would perhaps be better to learn how to deal with a changing climate then to try and change something which perhaps has no effect at all.
vision.net.au/
stanford.edu/
Measurements of greenhouse gases are new and fairly limited, beginning only in the late 1950's in the South Pole and at Mauna Loa. However, most scientists today agree on some general statistics of sources for individual gases.
Only 3.5 to 5.4 percent of total carbon dioxide emissions are generated by humans, while the bulk that enters the atmosphere comes from the planet's natural "carbon cycle" from animal metabolisms.
About seventy percent of the methane in the atmosphere, however, comes from human sources, while the rest is from natural emissions form wetlands, termites, and aquatic life. Thirty percent of the atmospheric nitrous oxides, which have 200 times the warming potential of carbon dioxide, are due to human activity, and CFCs are entirely man-made. Some of these CFCs, however, have a cooling effect, rather than a warming one.
To further complicate the issue, the warming effect of a particular greenhouse gas is difficult to measure. For example, though carbon dioxide is a less powerful warming agent than methane, there is more carbon dioxide in the atmosphere than there is methane, which is only a trace gas. Nitrous oxides, similarly, are greater warming agents than carbon dioxide, yet make up only .0000001 to .00000000001 percent of the atmosphere by volume, compared to carbon dioxide's .034 percent. Thus the cumulative effects of the methane versus the carbon dioxide are difficult to determine.
Since the human contribution percentage-wise of methane is larger than that of carbon dioxide, but the carbon dioxide makes up a larger portion of the atmosphere, it is even more difficult to determine the potential for human activity to effect the greenhouse effect.
Another complicating factor in the science of climate change is the lack of convincing data relating any ties between anthropogenic activity and actual changes in the climate, such as heating or rising water levels.
The report issued by the IPCC, or the Intergovernmental Panel on Climate Change, in 1995 relates a warming trend of .3 to .6 degrees Celsius since 1850, with .2 to .3 degrees of this warming occurring in the last 40 years. However, the warming recorded is not uniform in chronology or distribution. For example, more of the warming occurs over land than over water, at night than in the day, and during the winter than during the summer. In other words, the daytime temperatures are not hotter, but the evenings are warmer, and the summers are not hotter, but the winters are milder. Other more recent measures, taken by balloons and satellites, give more accurate readings, but over a shorter time span. Some of these measurements actually indicate a cooling trend in some areas.
Rainfall is another measurement used to discuss climate change, for increased rainfall could signal the greenhouse effect, as more of the atmospheric water is released in the form of precipitation, and more is absorbed into the atmosphere by evaporation. Numbers on this trend indicate a slight global increase of one percent during the 20th century. However, this increase is not uniform, translating into rainfall increase in areas such as the high latitudes of the Northern Hemisphere, but decrease in the subtropics and tropics from Africa to Indonesia.
Due to the lack of data for any length of time, it is difficult to fit these numbers into any sort of large scale framework. It is quite possible that similar climate trends have been present throughout the centuries, even millennia. The data we possess on climate change in fact covers only .000004 percent of the Earth's history of over four billion years.
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