California Dreaming

California made the news by agreeing to a climate emissions treaty with Great Britain. This is being touted in Europe and among environmenatlists as a big step toward fighting global warming.

On the face, it appears that this treaty and Kyoto are allowing market forces to curtail greenhouse gases. However, the incentive side of this exchange is created artificially through caps or "goals". From a classical economics point of view, the econogineer dislikes caps but that's not the biggest problem with the emission exchange treaties.

California is indeed a large producer of greenhouse gases but they are also one of the largest producers of "green" technology and they are, for most parts, a highly efficient economy. The amount of production per pollution is much higher than most places in the world (Japan being one of the highest). By outsourcing or selling production to places where the treaties do not restrict greenhouse emissions, we could easily be making the problem worse. What of the pollution produced from the extra transportation? If Global Warming is a Global Problem, why not have a Global Treaty? A treaty that covers all countries and seeks to limit total emissions?

Having read the Kyoto Treaty, page by page, it seems the powers that be said to themselves, "let's do something, even if it makes no sense, and while we're at it, we'll get the US to send more money to the third world". Why does Russia get to have inordinately high emission level because we've chosen as a basis a period in time when the former(?) communist state was spewing inordinate amounts of pollution? Because Russia wouldn't agree to it any other way. This way they get paid off without having to actually help. They're not the only ones to get the pay off without helping the bottom line.

Even California is disingenuous in its participation. Their manufacturing sector has been heading south to Mexico for a long time. As we all know, California has been outsourcing its energy production to other states because they want to be greener. With losses due to transmission of electricity, it's pretty clear that the world will have more pollution but it just won't be in California. It will be dispersed to Texas, Utah, Nevada, etc.

It's all Smoke and Mirrors.