Monday 16 July 2001

This is in direct opposition to the claims of US President George W Bush, who maintains that reducing the pollution that leads to climate change is economically harmful. In contrast, the two new reports, focusing on Europe and Japan, show that implementing the Kyoto Protocol could benefit economic performance and stimulate industrial innovation, even if the US does not participate in the treaty.

A head start for Europe
The European report - Kyoto Without the US: Costs and Benefits of Ratifying the Kyoto Protocol - concludes that unilateral implementation of the treaty by the EU could give its industries a head start in developing innovative technologies for reducing emissions. It also suggests that an 'early' start with climate change policies could lead to substantial cost reductions for Europe in the future.

The EU could achieve between 85 and 95 per cent of its Kyoto target without harming the competitiveness of its economies, with smart policies being able to offset the remaining competitive impacts. Achieving its Kyoto target could cost the EU as little as 0.06 per cent of its gross domestic product in 2010 - a trifling amount for the budgets of the 15 EU nations. Moreover, since climate protection policies also reduce other air pollutants, this would lead to financial savings on end-of-pipe technologies that reduce acid rain and local air pollution in Europe. Those savings could substantially cover the small cost to the EU of meeting the Kyoto targets.

Benefits for the Japanese economy
The Japanese report - Will Ratification of the Kyoto Protocol Result in Economic Loss? - finds that implementation of the treaty by business could result in a 0.9 per cent increase in gross domestic product - around US$47.3 billion. According to its authors: "Japan could greatly benefit its own economy by going ahead with ratification of the Kyoto Protocol. It is hard to understand why Japan's government and industry should hold back."

They also argue that ratification could serve as an excellent springboard to break Japan out of its long economic slump. In addition, most Asian countries and western Europe could benefit economically from spillover effects of Japan implementing Kyoto. The analysis projects GDP increasing by around US$11.5 billion in South-east Asia and India, and by US$13.9 billion in western Europe. In contrast, the GDP of the United States could decrease by around US$45.5 billion, or about 0.6 per cent, primarily as a result of its machinery industry not being driven to innovate.

"By ratifying the Kyoto Protocol, Europe and Japan will be onto an economic winner," said Ute Collier, head of WWF's climate change programme. "It will give Japan and the EU new opportunities in new markets. They can become world leaders in energy-efficient and clean, renewable energy technologies."

The conclusions of the reports underline the importance of Japan and the EU seizing the opportunity of the Bonn climate summit, which begins on 16 July, to galvanise international support for Kyoto and put an end to the prevarication that has characterised the years of talks.

"WWF wants to see political leadership in Bonn that answers public concern over climate change," said Dr Collier. "Spurious economic arguments are no excuse for further delay or for walking away from this treaty."