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A carrot not a stick. Bush unveils his strategy on climate change.

Bush Speaks on Climate Change

President George W. Bush has outlined a go-slow, entirely voluntary alternative to the reduction of greenhouse gas emissions required by the Kyoto Protocol. He spelled out his plan yesterday in an address at the headquarters of the National Oceanic and Atmospheric Administration in Silver Spring, Maryland. However, whether the approach will net any significant emission reductions will depend in large part on whether businesses play along.

Unlike the Kyoto Protocol, which would directly regulate the amount of greenhouse gas emissions, the president's new strategy would cut "greenhouse gas intensity." Greenhouse gas intensity is the amount of emissions per unit of gross domestic product. Bush wants an 18% cut by 2012. The more efficiently Americans use fossil fuels and the more they use renewable energy, the more greenhouse gas intensity will decline. Bush would entice businesses to lower their greenhouse gas intensity mainly by providing $4.6 billion dollars over 5 years in tax credits for the use of renewable energy sources.

Whether the government will impose mandatory regulations will depend on how close the country comes to the 2012 goal and whether new climate science justifies it, Bush said. To help stimulate relevant research, Bush launched two new initiatives in his fiscal year 2003 budget request to Congress. One, the $40 million Climate Change Research Initiative, would focus research that could yield early results of use to policy-makers. For example, the initiative will include funding for research on the global carbon cycle--which controls how much carbon dioxide remains in the atmosphere--and will provide for enhanced global climate observations, especially in developing countries. Another $40 million initiative will fund research on technologies designed to cut greenhouse gas emissions.

The prospects for attaining Bush's goal will "depend a lot on what investors think," says economist Raymond Kopp of the think tank Resources for the Future in Washington, D.C. If businesses fear they will face regulations if the voluntary approach fails, they may respond, Kopp says; if not, they won't.

But Bush's goal, even if attained, is not as ambitious as it might sound, Kopp says. Greenhouse gas intensity has been declining for many decades, hitting 17% per decade most recently. The U.S. Energy Information Administration forecasts a decline of 14% in the next decade in any case, leaving incentives to achieve the remaining 4% reduction. That would be equivalent to less than 20% of what would be required of the United States under the Kyoto Protocol.

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Text of Bush's address at NOAA