Kyoto costs depend on where you stand

A waste of more than US$1300 ($1838) a year for every American, undermining economic growth and jobs? Or a lifeline for the planet costing just an annual US$20 for each European?

The UN's Kyoto protocol on curbing global warming looks utterly different when viewed from Washington, which opposes the 150-nation pact, or from its main backers in the European Union, Japan or Canada.

So who is right?

Experts say there is no sign that investors are shifting to favour the US out of worry that Kyoto's supporters are shackling their economies with vast costs to curb emissions of heat-trapping gases from power plants, factories and cars.

"I think the US was wrong" to say that Kyoto was too expensive, said Artur Runge-Metzger, head of the European Commission's climate, ozone and energy unit. "This is a huge opportunity to get on a path towards clean energy."

US President George W. Bush will meet the main backers of Kyoto at a July 6-8 Group of Eight summit in Scotland, where British Prime Minister Tony Blair hopes radical action will be agreed to combat global warming.

But given Washington's reaction to Kyoto, hopes that more concrete measures can be agreed look slim.

The US says the EU got off lightly in its targets for cutting use of fossil fuels and shifting to cleaner energies such as solar and wind power under Kyoto.

"The reductions [in greenhouse gases] the EU have to make were modest compared with what might be required by the US," American climate negotiator Harlan Watson said.

Supporters of Kyoto, which came into force in February, see it as a tiny first step to avert what could be far higher costs of more storms, droughts, heatwaves and rising sea levels that could drive thousands of species to extinction by 2100.

The EU Commission says Kyoto will cut the EU's annual GDP by 0.06 per cent by 2010 when it has full effect. That will work out roughly at US$20 for each EU citizen in 2010 alone. "We think this is affordable," Runge-Metzger said.

Japan and Canada also see costs as manageable.

In the past, US officials have estimated Kyoto could mean a brake in American economic output of up to US$400 billion by 2010 in the worst case, or 4.2 per cent of GDP. That would mean more than US$1300 for each American that year.

Bush pulled the US, the world's biggest polluter, out of Kyoto in 2001, branding it too costly and unfair because it omits developing nations from a first round of cuts until 2012.

Kyoto obliges participants to cut emissions of carbon dioxide - the main greenhouse gas - by 5.2 per cent below 1990 levels by 2008-12.

Watson said the US would have faced a bigger burden under Kyoto, partly because of its heavy reliance on domestic coal for power generation.

- REUTERS