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A Free-Market Fix for Global Warming?

Trying to recast global warming as a "golden opportunity" for the United States rather than a costly catastrophe, President Bill Clinton today unveiled his administration's new "flexible, market-based" plan for curbing the emission of heat-trapping gases into the atmosphere. Clinton predicted that reductions will be accomplished sooner and at lower cost than many critics have anticipated.

Speaking at the National Geographic Society in Washington, D.C., Clinton proposed an international "emissions trading system" that would allow companies in developing countries to buy the right to pollute from companies with cleaner technologies. He also said the United States should provide emissions credits and tax cuts to industries that reduce emissions early, make binding pledges to reduce its own greenhouse gas emissions early in the next century, and give a $5 billion boost over the next 5 years to research and development aimed at using energy more efficiently. These proposals will be the basis of the U.S. negotiating position in international talks leading to a binding treaty that is scheduled to be finalized at a meeting in Kyoto, Japan, in December.

The deadlines in Clinton's proposed timetable would be binding, but also blurry: a reduction to 1990 emissions levels should be achieved between 2008 and 2012, the President said. In a concession to industrial critics of the international treaty, Clinton said the United States will not agree to binding limits unless key developing nations do, too.

"Some will criticize our targets and timetables as overambitious, and some will say they do not go far enough," Clinton said. Indeed, lobby groups immediately began sending a blizzard of faxes to news organizations criticizing the proposals. The American Petroleum Institute, for example, called the plan "little more than a Trojan horse hiding a stealth tax and a rationing scheme," while the Sierra Club said it "fights a five-alarm blaze with a garden hose."

Clinton anticipated complaints that the Administration's proposed programs would crimp economic growth by pointing out that similar objections were raised against efforts to reduce acid rain. Yet acid rain controls are 40% ahead of schedule and 50% below projected costs. "The challenge of climate change can bring us together around what America does best: compete and innovate," Clinton said.