But New Zealand gets hammered.
We get no credit for forests planted before 1990, but have agreed to maintain our plantation forests - as if they were the Amazon jungle. For every tree chopped down and not replanted, we'll have to buy carbon credits.
The Marsden Point refinery, which puts about a million tonnes of carbon dioxide into the air every year, will probably have to close under Kyoto, meaning New Zealand will have to import more oil.
Singapore, which is richer than us, is exempt from the treaty.
Yet our media keep printing that it's a great deal.
There's a more fundamental issue. While climate change is undeniable, not all scientists agree that human activity is contributing to global warming through greenhouse gas.
There is compelling evidence to support the view that climate change is a natural phenomenon that has occurred throughout the earth's history.
The influential Economist magazine, which doesn't deny that the earth's temperature is getting warmer, has damned the Kyoto treaty. It says that even if all countries implement the treaty, it won't reverse climate change - just slow it by about six years (August 4, 2001). It estimates the cost to the world economy of implementing Kyoto at about $1 trillion.
A report by the New Zealand Institute of Economic Research predicts a 1 per cent reduction annually in New Zealand's GDP as a result of Kyoto. The cumulative effect will be an 18 per cent drop in GDP after 15 years. This will have a significant impact on New Zealanders' living standards.
Initially it was thought New Zealand stood to benefit from windfall gains under the convention, through carbon credits for our extensive areas of pine forests. These early hopes have been dashed. Seventy-five percent of our commercial forests were planted before 1990 and thus get no carbon credits.
The protocol is bad news for our wood processing industry. Carbon taxes and other compliance costs will destroy any incentive to invest in new wood processing plants here.
Rather, investment will occur in countries such as Malaysia, Indonesia, Thailand, China, India, Chile, Brazil and Argentina, which are exempt from cutting greenhouse gas emissions.
The situation for aluminium, cement, steel and methanol production is even worse. New Zealand's ratification of the Kyoto Protocol will bring the closure of cement works in Whangarei and Westport, with the loss of many jobs. Then we'll import cement from countries that haven't signed and global emissions of carbon dioxide will be unchanged.
But the biggest impact on the New Zealand economy will be in pastoral farming and its associated processing industries.
Under the Kyoto Protocol, one tonne of methane, the main greenhouse gas produced by farming, has the global warming potential of 23 tonnes of carbon dioxide.
A single dairy cow produces about 75kg of methane a year, equivalent to more than 1.5 tonnes of carbon dioxide.
Analysis shows the New Zealand economy will adjust to climate change policies primarily through shutting down or reducing production in the emitting sectors.
Since New Zealand and the world will continue to demand the outputs, the overall global emissions are unlikely to be reduced. Developing countries will be able to step up production to substitute for the output lost in New Zealand.
The Kyoto Protocol is fundamentally flawed. Why would New Zealand want to ratify it?
* Ken Shirley is Act spokesman on global warming.
nzherald.co.nz/climate
Intergovernmental Panel on Climate Change (IPCC)
United Nations Environment Program
World Meteorological Organisation
Framework Convention on Climate Change
Executive summary: Climate change impacts on NZ
IPCC Summary: Climate Change 2001
