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Kyoto works

It seems like it should be bigger news that the Kyoto Protocol is working:

> According to new data from the European Environment Agency (EEA), all of the EU-15 members except Austria are now on track to exceed their Kyoto obligations. In fact, the group as a whole will likely slash emissions more than 13 percent below 1990 levels by 2012.

The report from the EEA is careful to distinguish between reductions caused by the economic collapse and reductions that can be attributed to carbon policy, including the Emissions Trading System that underlies the European cap-and-trade program.

The Times attempts to throw cold water on this achievement, chalking some of the reductions up to “creative accounting.” This is partially fair — there are a number of ugly compromises embedded in Kyoto, including the “hot air” allowances given to former Eastern Bloc nations.

But the criticism partly misunderstands the nature of cap and trade. Some countries have done poorly in their efforts to reduce emissions (cough, Spain, cough, Italy) and some have overachieved. As a result, the Spains of the world have met a portion of their obligation by purchasing excess credits from countries like England, France, and Germany that have made deeper reductions than required. This is hardly creative accounting; rather, it’s exactly how the system is designed to work.

Kyoto is far from perfect. But its flaws have generally been exaggerated both by critics who would prefer that the U.S. do nothing to curtail emissions and (unfortunately) by environmentalists who prefer other policies. It was fairly clear all along that the biggest problems with Kyoto were also easily fixed, and indeed the system now appears to be performing reasonably well.

And note what hasn’t happened: the economies of the Kyoto signatory countries haven’t been hobbled by soaring energy prices. The trading mechanism hasn’t been fatally compromised by market manipulators. Industry hasn’t fled en masse to countries like China that lack binding emissions limits.

We can do better than Kyoto, and ultimately any effort to combat climate change will only be successful if it encompasses all the major emitting countries, including China, India, and Brazil. But the message from Europe’s experience couldn’t be simpler: cap-and-trade works.

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