By Peter Zeihan and Bart Mongoven European leaders have expressed dismay over U.S. President George W. Bush's June 1 call for the creation of a long-term dialogue among the 15 largest greenhouse gas-emitting countries. The plan, they say, is another stall tactic designed to allow the Bush administration to appear as though it is trying to work with the international community on climate issues, when in reality it is not. Such action, they say, would take time and attention away from the difficult work being done on the issue via the Kyoto Protocol process. In reality, however, the Bush plan signals the end of Kyoto — and the beginning of a new international consensus that relieves Kyoto's pressures on governments. The United States, China, India, Canada and Australia produce more than half of the world's greenhouse gas emissions — and those emissions are growing. To be effective, then, any climate regime that endeavors to make real cuts in emissions must include these countries. By bringing the Pacific Rim countries into alignment on the issue, Bush has brought the United States far more power over global greenhouse gas emissions policy than Europe ever has had. With this, Bush takes from Europe its one global foreign policy success story. The Regime Signed in 1997 by more than 75 countries, the Kyoto Protocol is the recognized international regime on climate change. The protocol is an addendum to the 1992 Framework Convention on Climate Change, in which parties agreed essentially to cut greenhouse gas emissions if it was convenient for them. Since cutting those emissions is highly inconvenient, very few followed through, making the protocol necessary. Under Kyoto, each party agreed to cut its emissions by a specific amount from 1990 levels by 2012. (The European Union signed up for an 8 percent cut, the United States for 7 percent and Japan for 6 percent.) But the agreement expires in 2012, at which point all participants are once again legally free from the deal. Moreover, the protocol imposed no emission restrictions on developing countries — including China and India — which explains why poorer countries so strongly support it. Though from a U.S. perspective Kyoto was flawed in many ways, it was this lack of restrictions on developing countries that rendered ratification a nonstarter in the United States. Despite the tone of the current political conversation in the United States, in a 1997 vote both Republicans and Democrats unanimously vowed to reject any climate treaty that did not include commitments from developing countries. Sens. John Kerry, Paul Wellstone, Barbara Boxer and many of the climate issue's current champions were among those who essentially declared Kyoto dead on arrival. Within four months of taking office, Bush did the same, saying the United States would take no part in talks regarding a treaty it had no interest in joining. Amazingly, the global reaction to Bush's announcement was shock. Bush became an environmental pariah at home and around the world, with Greenpeace dubbing him the "Toxic Texan" and European leaders pleading for the United States to reconsider. European Logic From the European standpoint, simply bringing the United States into the climate change conversation is far more important than forcing it to cut its emissions by 2012. Given that the United States is the world's single-largest source of carbon emissions, any deal that does not have explicit American buy-in simply cannot achieve the ultimate end goal: reducing global emissions to the point of heading off the worst-case scenario of global warming. To get the United States into the talks, then, G-8 leaders agreed in 2005 in Gleneagles, Scotland, to stop pressing for U.S. adherence to Kyoto if Washington agreed to take part in international discussions on the issue. European leaders hoped this would bring the United States into the fold for the more important negotiations on a broad and binding treaty that would address what happens after Kyoto expires in 2012. U.S. activists fit their tactics into this broad European strategy. Kyoto proponents in the United States considered it a foregone conclusion that, under Bush, the United States would not pass a greenhouse gas-emissions-reducing policy on environmental grounds. The trick, then, was to get Bush to budge for other reasons. Environmental groups thought that if industry were faced with a maze of climate-related regulations at the state and local levels, then business — normally hostile to greenhouse gas-related policies — would appeal to the administration for harmonization. This, the environmentalists believed, would sneak in a U.S. greenhouse gas policy via the back door. The environmentalists' key insights were simple: One of the few things businesses dislike more than patchwork regulation is uncertainty — and having dozens of constantly changing competing regimes is about as uncertain as one can get. Therefore, the environmentalists believed industry would be more successful than they had been in lobbying the administration for a unified national policy on greenhouse gases. The strategy was a sound one, and local/state directives have proliferated, with laws in 15 states now forcing some climate change-related action or accounting on industry — laws the Supreme Court already has ruled constitutional. In the end, however, both U.S. environmental groups and European governments miscalculated. The former mistakenly assumed industry's desire for a single standard would lead industry to Kyoto; it only led industry to Washington. The latter assumed that dropping discussion of Kyoto I would lead Washington to participate in Kyoto II; instead, it led Washington to the Pacific. American Counterpoint History will remember 2007 as the year the United States lost its infamous position as the world's leading emitter of greenhouse gases to China, an event that has been inevitable for years. From the U.S. point of view, therefore, any successful greenhouse gas-limiting agreement is not dependent upon Washington's participation, but on Beijing's. As such, Bush has engaged China, India, Australia, Canada and even a discontented Japan — birthplace of the Kyoto Protocol — in separate negotiations outside the Kyoto system. Called the Asia-Pacific Partnership on Clean Development and Climate, this strategy eschews firm caps on emissions — which the Americans, Chinese and Indians oppose and which have thus far proved impossible to align with Australian and Canadian resource policy. It instead focuses on sharing technology that would reduce greenhouse gas emissions, particularly in developing countries; it also offers companies that are developing efficiency-related technologies an expanded market for their products. Key among such technologies are clean coal, nuclear, carbon capture/sequestration and fuel cells. The Europeans at first saw this "Pacific direction" as a stall tactic, but deemed it acceptable as long as the goal remained intact — that the United States would eventually join Kyoto. That too was a miscalculation. Ultimately, U.S. industry and the Bush administration believe joining an international regime only brings more uncertainty, as both the ideological and practical design of such regulations not only originates in but also is designed explicitly for Europe. As the train of thought runs, the only way U.S. industry can rest assured that the regulatory environment is not going to change constantly — punishing U.S. investments and rewarding European companies at their expense — is not simply to take part in a climate regime, but to design one at home. That means abandoning Kyoto in every form imaginable, and launching a fundamentally new program. The U.S. business community needed Bush to present a climate policy that provides clarity and certainty. A week ago, the only "certainty" was that the United States eventually would accept some new version of Kyoto, and that the climate change issue was locked into European leadership. Bush's June 1 announcement flipped that conventional wisdom on its head. Bush has killed Kyoto and assured businesses regulatory clarity by launching an international system that the United States will heavily influence, if not control outright. For the Europeans, the key concern so far is that the expected laxness of the Pacific plan will enamor not just the Americans, but all of the major Pacific Rim economies. Compared to the strict expectations for any Kyoto successor — German Chancellor Angela Merkel has suggested a 50 percent reduction in greenhouse gases by 2050 — Chinese and Indian preference for the Pacific plan is a shoo-in. In fact, a Chinese environmental white paper released June 4 dovetails seamlessly with the Bush plan — and almost ignores Kyoto's existence. With Australia and Canada unwilling to divorce their climate plans from that of the United States, the likely membership in any Kyoto II would be limited to Europe alone. (Europe is the only significant signatory that actually has put the current Kyoto Protocol into practice.) But this time there will be a clear alternative, which will constantly raise the question: Why doesn't Europe get with the program? Life after Kyoto Bush's next job is simple: Wait until the Europeans declare Kyoto and Kyoto II dead (the protocol was mortally wounded at the G-8 summit in Gleneagles, Scotland) and then present U.S. industry with a policy based on the results of negotiations with the other 14 major emitters by the end of 2008. This policy will not reflect Kyoto and will not force action by other countries. Of course, there also is the little detail that if the Bush administration does hammer out a deal before 2009, then the next U.S. president — regardless of party affiliation — will take office with an internationally acceptable deal already in place. Even a Democratic president whose heart lies with Kyoto will be loathe to walk away from an agreement that puts the United States in the driver's seat and all of Asia riding shotgun. (Bush already has won support from Boxer, the Democratic senator from California, who is not exactly wed to the Bush party line.) Ultimately, the Europeans are looking not just at a policy defeat, but also at the union's strategic failure to have any joint foreign policy. Kyoto/environmental issues have long been the only significant program in which the union has managed to make its voice heard globally. Should Europe continue to champion Kyoto now, it not only will be left out in the cold, but it also will face sharp internal debate about the reasons for deeply cutting emissions when no one else is. Several European governments already are suing the European Commission over climate-related regulations they consider too restrictive, while a newfound Polish bellicosity has led Warsaw to threaten vetoes over this and a wide raft of issues. For those who believe that nothing but firm caps, as in the Kyoto Protocol, will forestall global warming, this is an unmitigated disaster. Those who feel that any successful global policy has to include the major non-European emitters, however, will see this is a successful first step in a way that Kyoto never was.