The Kyoto Protocol is about everything except the climate, says Maria Kielmas

Governments between the Atlantic and the Urals were happy on 21 May. After ten years of wrangling on matters ranging from European Union (EU) expansion, human rights in Chechnya, the Kyoto Protocol, natural gas deliveries and access rights to the Russian Baltic enclave of Kaliningrad, the EU and Russia reached an agreement on their future co-operation. The EU agreed to back Russia's application to join the World Trade Organisation (WTO) in return for a pledge by Russia to raise domestic gas prices and speed up its ratification of the Kyoto Protocol on Climate Change. Russian government officials lauded the agreement as a negotiating success and Brussels was very happy. Russia's eventual ratification of the Kyoto Protocol means that the treaty will come into force and fulfil a major ambition in the EU's environmental and international policies. It also seemed to signal a slap in the face for Washington. The Bush administration's withdrawal from the Kyoto treaty in 2001 triggered outrage in the EU.

But these things are not quite what they seem. Russia is no nearer to an official ratification of Kyoto than the US is to an official withdrawal from it. When US President George W Bush announced in March 2001 that he had always opposed the Kyoto Protocol because it did not include 80% of the world and would harm the US economy, he was upholding a 1997 pre-emptive vote by the Senate, the only US body competent to ratify international treaties, opposing Kyoto ratification by 95 votes to zero. But Washington has not sent a formal letter of withdrawal from the treaty to the United Nations which oversees it, so matters remain in limbo.

Canny tactics

In Russia's case, its economic weakness in the case of protracted EU pressure leaves Moscow with little option but to play off each issue as a bargaining chip. President Vladimir Putin is being canny by telling the EU what it wants to hear, notes Alexander Rahr, director of the Korber Centre Russia/CIS at the Berlin-based German Council on Foreign Relations.

President Putin told German Chancellor Gerhard Schroder that perhaps Russia could price oil and gas exports in euros, that maybe Russia could join NATO or even be governed from Brussels. But these were not statements of intent. "Putin is being very, very clever. He's at the edge of being irresponsible and appropriate. He says nothing clearly," said Mr Rahr.

This obfuscation has evolved because the Kyoto treaty has become the ultimate political and commercial football. It offers governments huge centralising regulatory powers over industry, social welfare and population; institutionalises environmental advocacy groups into business and government service; provides energy corporations and financial institutions with potentially massive speculative earnings; secures a pension for a growing international bureaucracy; and provides re/insurers, brokers, accountants, lawyers and sundry intermediaries with significant new business opportunities. But it will not save the planet.

Emissions

The EU signed the 1997 Kyoto Protocol, now known as a treaty, in 2002. Under its provisions, member states must reduce their emission of greenhouse gases (GHGs) by 8% of their 1990 levels between the years 2008 and 2012.

The policy is predicated on the concept that the earth cannot compensate for increasing greenhouse gases caused by the burning of fossil fuels such as oil, gas and coal. Global warming and a climatic imbalance is underway which is causing extreme weather events, and catastrophic human and economic losses. Under Kyoto, governments are enabled to curb fossil fuel use through imposing a mandatory cap on industrial and commercial GHG emissions, initially carbon dioxide (CO2). Under the treaty's flexibility mechanisms any installation may earn or buy in extra 'carbon credits' through investment and trade. Such trading has been hailed by Kyoto parties as a cost-effective, market-friendly system to cut GHGs.

Last year, as EU member governments began their allocation process for emission permits in time for the launch of the EU's GHG trading scheme in 2005, industry organisations EU-wide began to question the extra costs they would have to pay for this policy. Concern was also voiced by government ministers and European commissioners, conveniently just ahead of elections.

High oil, gas and utility prices, the strong euro, increasing fuel and environmental taxes are increasing costs for EU industry barely out of recession. The European Commission claims that implementing Kyoto would cost about 0.06% of the EU GDP of about EUR10.2trn. But dissenters such as Hans Labohm, senior fellow at the Netherlands Institute for International Affairs, Clingendael, says when verification and other bureaucratic costs are included this figure could be 2% to 3% of EU GDP. And if successful, assuming the science behind Kyoto was correct, it would only lower global temperatures by 0.2 deg C, an amount too small to measure.

Serious scientists are appalled at the popularised concepts behind Kyoto.

"To say that if you spend trillions of euros to cut carbon dioxide by so many percent, and that will tackle climate change, is just bad science," said Carl Wunsch, professor of physical oceanography at the Massachusetts Institute of Technology (MIT) and associate fellow of the Royal Society in London. But he says that as a scientist he feels stuck in the middle of a politicised media circus and is hit from two extremes of an angry debate: those who believe there is no such thing as climate change and those who predict an apocalypse tomorrow.

Climate change is the earth's norm. Over the 4.9 billion years of recognisable geological record, the earth has been both much hotter and much colder than at present. Some 95% of life disappeared in the Permian extinction 300 million years, a similar event happened about 590 million years ago, but life revived, possibly related to the break-up of continental masses.

The earth has experienced an overall cooling trend since the end of the Cretaceous period some 65 million years ago as the Atlantic opened, albeit punctuated by shorter warming periods. Fossil records from over 10,000 years ago show that temperature changes of between five and ten degrees Celsius can occur over a period of decades. Humanity itself has experienced, adapted to and survived at least four major ice ages. In medieval times, Greenland was green and inhabited, the northwest passage was ice-free, vineyards grew in England as far north as Northumbria. But by the late 17th century, winters were so severe that the Thames froze over and hosted fairs, chariot races and brothels. The 1964 eruption of Krakatoa changed climates worldwide for five years. The 1992 eruption of Mount Pinatubo in the Philippines temporarily affected regional climates so that in 1994-95 Jordan, Israel and Palestine experienced a catastrophic winter where hundreds died of hypothermia.

Is CO2 so crucial

Such are the complexities of the climate system that it is a nonsense to claim that one parameter such as carbon dioxide concentration is crucial.

CO2 makes up just 3% of the earth's atmosphere and nearly 80% of that is due to poor populations in rainforest burning wood for fuel. The fundamental driver of climate is the sun, said Carl Wunsch, but warned that it is pointless to adopt an extreme attitude stating that the sun is either insignificant or responsible for all climatic variability. Internal processes of the earth and its surrounding oceans and gases are crucial. Ocean-atmosphere interactions which produce the North Atlantic Oscillation (NAO), the El Nino Southern Oscillation (ENSO) and Pacific Decadal Oscillation (PDO) have a significant effect on climate, as does the thermohaline circulation in the oceans, the actions of clouds and the reflectivity of the earth to the sun's rays, to name a few variables. These are dynamic, random, non-linear processes which require mathematical sophistication to begin to comprehend. "The complexity of the system is so great that we don't understand it," said Mr Wunsch. Many indications of climate change, such as sea level rises, are regional and happen over many decades. "But people take records from one place and proclaim them to be global," he added.

But CO2 as a climate changer has always been a political matter. First suggested in 1898 by Swedish chemist Svante Arrhenius, it was used during the Cold War to underpin research for weapons programmes, and later to justify investment in nuclear power by European governments to counter the influence of the Organisation of Oil Producing Countries (OPEC) in the 1970s, and the coal unions in the 1980s. Former British Prime Minister Margaret Thatcher launched the idea onto the world stage in 1989 speeches to the Royal Society in London and then at the UN. She followed the CO2 global warming hypothesis introduced in the US by NASA scientist James Hansen. Hansen has since backed down from this thesis and claims that particulate matter, such as soot, is a more important driver for global temperature change. But the CO2 bandwagon rolled on.

Brazilian beginning

The 1992 Earth Summit in Rio de Janeiro provided the impetus for environmental groups and governments to formulate and promote policies to tackle the effects of perceived man-made global warming. This led to a series of reports by the UN Intergovernmental Panel on Climate Change (IPCC), the latest of which in 2001 provided a special "Summary for Policymakers", stating that the earth's mean temperature could rise by between one and five degrees Celsius over the next century after "unprecedented" warming in the 20th century. Supporters of this view claimed a "consensus" among scientists but this is not and has never been the case. The only agreement among scientists is that there has been a 0.5 deg C warming in the northern hemisphere since temperature records began in the 1860s and that CO2 levels have risen by 30% in the 20th century. Human activity in some form may have contributed to this but there is no agreement on its significance or otherwise. The world's increased vulnerability to weather extremes because of uncontrolled urban development or deforestation in natural disaster-prone regions is not part of this debate.

The IPCC technical reports, rather than the policymakers' summary, which is a political construct by government appointees, make these uncertainties very clear in an exemplary manner, said Richard Lindzen, professor of meteorology at MIT, a participant in the IPCC process, and a leading critic of the "CO2 equals global warming" hypothesis. But he says that most supposed climate experts in the media, government or business are either too ignorant or too lazy to read them.

Throughout the 1990s the debate divided into two camps - the global warmers and the climate sceptics - because of the corruption of science through state money. The IPCC projections were based on large computer models of climate which critics said were based on limited variables, inadequate data and flawed assumptions. But modeling costs are so high that only governments can fund them. The US plans to spend $5.8bn in climate research in 2005, according to a June 2004 White House report, a sum comparable to the capital investment budget of a major multinational energy company.

Hans Labohm said that when supplementary experimental factors and satellite access are taken into account this sum rises to tens of billions of dollars in the US alone. When other industrialised country governments and multilateral institutions are included, there is a huge and growing "green elite" which has a vested interest in keeping the issue at the forefront of politics, said Sonja Boehmer-Christiansen, reader in geography at Hull University, England. Furthermore, such an unelected bureaucracy uses the environment as an excuse to meddle in all aspects of economic and social policy of a country. The power of such global governance erodes the democratic accountability of elected governments and poses a serious political danger for the future, she said.

Climate science, like space science, is 'Big Science'. If a research institution does not follow the prevailing government ideology, it will lose its funding. So everyone keeps quiet. "Even if you are a history professor, and you don't want to hurt your friend in the physics department, you keep quiet," said Jay Lehr, an environment scientist and scientific director of the Washington-based Heartland Institute, a conservative-libertarian think tank funded by small, private donations. Nils-Axel Morner, associate professor at Stockholm University's Department of Paleogeophysics and Geodynamics, said his research - which claims that there has been no rise in sea level in the Indian Ocean around the Maldives over the past 30 years - has been suppressed by political intervention.

Energy sector for Kyoto

In contrast to popular perceptions, the international energy industries are pro-Kyoto, said Marlo Lewis, senior fellow at the Competitive Enterprise Institute (CEI) in Washington DC. In February 2002, President Bush re-introduced a dormant scheme for voluntary GHG emissions caps and credits.

Companies could earn theoretical credits for any abatement measures they took. The electricity industry, which almost bankrupted itself in the power trading scandals of the 1990s, has become a major part of the new scheme. At the moment, the credits these companies earn are worthless.

But should a future Washington administration introduce a cap and trade scheme like the EU, "to look green and win the soccer mom vote," Mr Lewis said, these companies stand to make huge speculative gains. Such schemes are already underway in ten US states. Emissions trading is based on instruments devised, first by Enron, for energy trading, but there is no real agreement for accounting procedures, or even for the definition of assets and liabilities. The potential for fraud is enormous.

Russia's state-controlled energy companies, Gazprom and United Energy Systems, stand to make equally huge speculative gains in emissions trading if Russia joins Kyoto, in Gazprom's case just by mending its leaking pipelines.

In a controversial process, President Putin has been shifting the control of the energy industry from the oligarchs to the government and promises to use this to develop the economy and double Russia's GDP within a decade.

The costs of joining Kyoto may cripple Russia's weak industry. But the potential speculative gains from it could balance the pain and provide Russia with a reputation for environmental rectitude on the world stage.

For Jay Lehr, the result of the emission reductions exercise is a racket of "distortion and lies" by which governments, corporations and special interest groups are cheating the general public and taxpayer, and for which the poorest populations will pay. If access to affordable conventional energy is restricted on the flawed basis of its environmental impact, or on the fiction that the world is running out of oil and gas, the developing world will remain poor, he said.

Fudging it

An international diplomatic fudge on Kyoto could be worked out by next year, unless matters become seriously worse in Iraq, said David Michel, senior fellow at the Institute of Transatlantic Relations of Johns Hopkins University in Washington DC. A new administration in Washington, whether Bush or Kerry, will restart talks on 'climate co-operation' with a new European Commission in Brussels. But the US will never sign up to an international entity overseeing its economy or emissions targets over time, Michel says.

This issue will also be tackled at next year's G8 summit in Scotland.

All sides could agree that the current Kyoto emission caps may hurt their industries too much, that these could be reduced, and that possibly the first budget period of Kyoto, 2008 to 2012, could be extended. This would allow everyone to maintain their environmental credentials while protecting their economies. Hans Labohm compares this to the gradual erosion of the EU's Growth and Stability Pact where every government may pretend to be fiscally prudent while at the same time increasing its deficits.

But the Kyoto treaty will not disappear as it is too important to the EU. "The EU uses the environment to expand its competence. It's part of the political integration process but no-one is admitting to it," said Sonja Boehmer-Christiansen. Iain Murray, senior fellow at the CEI, thinks that energy companies, industries and financial institutions participating in the GHG emissions market will develop it into a "carbon cartel", until someone breaks ranks to say that it is all based on an illusion.