The Great Divide The key lesson to be drawn from the recently concluded U.N. climate conference in Bali is that the central issue for climate change is no longer the science. It is how rich and poor countries will divide the burden of solving the problem. The Kyoto Protocol, concluded ten years ago, required significant emissions reductions from the developed world, but imposed no requirements on developing countries. The United States refused to ratify the agreement partly on the grounds that any agreement that exempted poor nations would do little to reduce the overall risks. In the last decade, emissions have been growing at explosive rates in India, Indonesia, Pakistan, Saudi Arabia, and South Korea. At the same time, many developing nations--above all China, whose emissions will soon dwarf, and likely already exceed, those of the United States--have taken a strong stand against emissions limitations, pointing to their relative poverty and their "right to development." In Bali, the United States argued that if developed nations were to commit to emissions reductions, developing nations should do so as well. The United States also opposed the idea that wealthy nations should be required to provide significant financial subsidies to poor ones. For its part, the developing world resisted binding emissions limits and insisted that wealthy nations should agree to provide economic support for any mitigation measures. The final agreement is a compromise, and a remarkably vague one at that. It includes two key provisions. The first, applicable only to the developed world, calls for verifiable "commitments" to reduce greenhouse gas emissions. The second, applicable only to developing countries, does not call for specific "commitments," but only for "appropriate mitigation actions" that are financed or otherwise supported by the developed countries. For those who seek a sensible climate change agreement, there is some good news here. For the first time, poor nations, most importantly China, appear to have accepted the idea that they should take measurable steps toward mitigation. Equally important, rich nations have agreed in principle to provide financial help to poor countries, which have consistently resisted reducing emissions on their own. (Climate change is simply not among their top priorities.) The bad news is that no nation has agreed to do anything but talk....
Hot Air and Wind The House of Representatives passed an energy-independence bill two weeks ago intended to make America more secure. Last week, the Senate rejected a provision in the bill establishing a "renewable portfolio standard" requiring all investor-owned utilities (but not municipal systems and rural cooperatives) to obtain 2.75 percent of their power from renewable sources by 2010 and 15 percent by 2020. A renewable portfolio standard is irrelevant to promises of energy independence and security. Over 95 percent of our power comes from domestic or nearby sources: coal (49 percent), gas (20 percent), uranium (20 percent), and water (7 percent). None of these resources is insecure or held hostage by foreign actors. Nor will the RPS advance "renewable energy" writ large. It will, in effect, be a wind-energy requirement. Wind's technology is advancing, and it offers investors accelerated depreciation and a 1.9-cent per kilowatt-hour federal tax credit (extended to some other renewables in 2005). By contrast, solar energy remains uneconomic in most applications. Geothermal resources are regionally restricted and large enough to attract complaints from environmentalists in the permitting process. Biomass burners look like fossil-fueled plants, emit the same pollutants, and are sited under the same stringent standards. Wind's aesthetics and economics have changed. Bucolic images of windmills are fading as noisy newer models top 400 feet, and public resistance keeps states like Massachusetts from meeting their own renewable energy quotas. According to the U.S. Energy Information Administration, wind's costs per kilowatt-hour hit bottom in 2002 and have since increased by 60 percent. In 2004, the levelized cost of a coal-fired kilowatt hour was 3.53 cents, compared to 4.31 cents for nuclear, 5.47 for gas and 5.7 for wind. According to a study by Gilbert Metcalf of Tufts University for the National Bureau of Economic Research, removing subsidies to nuclear and wind power takes the former to 5.94 cents and the latter to 6.64....