Is Kyoto a good idea?

This paper analyses the Kyoto Protocol, and questions whether it is ‘a good idea’, given reasonable expectations of future conditions based on the best available current knowledge. The author argues that the potential benefits of Kyoto are extremely uncertain, not least because its effects on climate will be negligible.

The article illustrates the multiple uncertainties in terms of the current state of knowledge of the environment, and its interactions with GHGs. The benefits of curbing emissions of GHGs are not just uncertain but actually unknown, since we do not know the extent to which GHGs influence climate. Without any clear benefits, Kyoto could actually be bad for human welfare, even if it had no costs. Unfortunately, however, the financial costs of Kyoto will be extremely high.

Given the uncertainties about the costs of both climate change and abatement strategies, the paper notes the need to balance the risk of doing too much with the risk of doing too little. An appropriate policy response to climate change would be one that encourages all low-cost efforts to slow GHG emissions. Policy should provide an incentive to reduce GHG emissions but should avoid imposing unknown or very large costs. A strong economy is important for dealing with any kind of change, and costly policies can create a drag on the economy. Moreover, a strong economy will provide the means for research into less carbon-intensive technologies.

The conclusion reinforces that the Kyoto Protocol is the wrong approach to addressing climate change. While it does provide an incentive for developing new decarbonising technologies, it is highly inefficient, because its rigid targets and timetables require GHG cuts at any cost. Furthermore, Kyoto actually maximises uncertainty with myriad unknown factors. This regime of uncertainty is not conducive to creating a long-term strategy for future energy technologies. [adapted from author]