Growth Helps Clean the Air

Friday, June 24, 2005

The June 11 editorial "Cli-

mate Action" presented a myopic view of the global climate policy debate.

First, the E.U. 15 will be 7 percent above their 2010 target, not 8 percent below as required by the Kyoto Protocol. British Prime Minister Tony Blair is suing European Union officials for more carbon emissions allowances for British industry.

Second, disenchantment with E.U. climate-change policies is growing. For example, Corrado Clini, the Italian environment minister, has said that Italy will not take on fixed-emission targets in the post-2012 period but instead favors a target based on reducing emissions intensity (the amount of energy used to produce a dollar of output). Further, E.U. environmental officials are discussing the use of emissions-intensity targets, energy efficiency and adaptation to climate change in the post-2012 period.

Third, the United States has done a better job of reducing the amount of energy used to produce a dollar of output than the European Union has. In the past decade, the United States, with its voluntary incentives approach, has reduced energy intensity by almost 17 percent, nearly double the 9 percent in the European Union, which has mandatory controls. The difference lies in the fact that the U.S. economy is growing at an average of about 3 percent annually while Western Europe's expands by only 1 percent. Faster economic growth allows a country to invest in more energy-efficient equipment and production processes.

If economic freedom and economic growth could be accel-

erated in developing countries, emissions intensity would decline as countries get richer and are able to adopt cleaner energy technologies.


Senior Vice President and Chief Economist

American Council for Capital Formation


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