Think tanks wrap-up III

WASHINGTON, April 9 (UPI) -- The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events and position statements released by various think tanks. This is the third of three wrap-ups for April 9.

The Heritage Foundation

WASHINGTON -- It's the Science, Stupid

By Charli E. Coon

It's not gaining a lot of attention -- the Senate wants to pass it without so much as holding hearings -- but a part of the energy legislation now working its way through Congress would commit energy producers to attacking a problem that almost certainly doesn't exist.

The bill now in the Senate calls for the Department of Energy to award "transferable credits" to energy companies that voluntarily reduce emissions of carbon dioxide. In other words, companies that reduce carbon dioxide emissions now will earn "credits" they can "trade in" if Congress -- as many suspect -- later imposes mandatory caps on CO2 output.

Trouble is, carbon dioxide emissions don't hurt the environment. And government regulation -- once introduced into the industry through this initiative -- figures only to become more onerous as time goes on.

At the heart of the debate is whether CO2, a byproduct of the hydrocarbon fuels that supply 84 percent of all U.S. energy, causes "global warming." Many of those who claim the earth is warming and that the activities of man are to blame, say carbon dioxide emissions from energy plants set the chain of events into motion. They claim CO2 "traps" heat from the sun near the surface of the earth, which leads to a warmer planet and other consequences.

One problem: Science stubbornly refuses to validate these claims. For instance, decades have passed since use of fossil fuels expanded to the point where they should've been able to affect temperatures in the troposphere -- the area one to five miles above the earth's surface where greenhouse gases are allegedly trapped.

But those who have studied the troposphere, such as Sallie Baliunas, an astrophysicist who works with the Washington-based George C. Marshall Institute and other organizations, say the temperature in the one- to five-mile area above the earth's surface has not increased. Last year, because of these findings and others that cast doubt on the notion that man's use of fossil fuels causes the earth to warm dangerously, 17,000 scientists from around the nation signed a document expressing their doubts about this notion and the entire approach recommended in the Kyoto Accords.

Carbon dioxide is a staple of life. Humans exhale CO2 with every breath. Some scientists even suggest that the increases in carbon dioxide caused by fossil-fuel use have contributed as much as 10 percent to increases in farmland productivity.

In 1997, the Senate voted 95-0 against the Kyoto Accords or any other energy agreement that forces huge reductions in so-called greenhouse gases on Americans but requires nothing along those lines from developing countries, such as China, India and Brazil. Over the next 15 years, these nations will become the largest generators of such gases. Yet lawmakers now seem bent on saddling our nation with energy regulations that sap economic power but do nothing to help the environment. Safe, affordable, consistent energy supplies are the bedrock for America's economy.

We depend on coal for a third of this energy. Because coal is the most carbon-intensive fuel, this bill would decimate it as an energy source, cause price spikes in natural gas and other fuels that would have to replace coal, and throw America's energy situation into crisis, according to Marlo Lewis Jr., a senior fellow at the Competitive Enterprise Institute. All for a "solution" that solves nothing.

What's puzzling about this is that the Bush administration, which made such a public display of disassociating itself from Kyoto soon after assuming office, now appears ready to accept equally harmful provisions in domestic legislation. Worse yet, it stands ready, in effect, to endorse the claim that CO2 causes global warming, even though no proof exists that man-made activities, such as increased dissemination of CO2, have caused this.

Sign on to this, and the Bush administration can expect not praise for its concern for the environment but criticism for making its requirements "voluntary" -- which is true in name only -- and hounding to make even more economically devastating anti-energy concessions in the name of further reducing so-called greenhouse gases.

Senators do feel a certain amount of pressure to pass some sort of energy bill to provide a blueprint for America's future. But the pressure should be to get it right. Imposing Kyoto on ourselves—after rightfully refusing to do it on the world stage -- does not qualify as right.

(Charli Coon is an energy and environment analyst at The Heritage Foundation.)

The National Center for Policy Analysis

(NCPA is a nonprofit, nonpartisan public policy research organization whose goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector.)

DALLAS, Tex. --

Critics of War in Iraq Were Wrong

By Bruce Bartlett

Many of those who oppose military action in Iraq cite the cost as a principal reason. Before the war, they often exaggerated the monetary outlay, the loss of American lives, the danger of a long war, and other concerns in order to discourage U.S. engagement.

They were wrong. But now that the end is in sight, they are back again exaggerating the postwar cost. They cite the need for years of U.S. military occupation, massive humanitarian assistance, rebuilding infrastructure, and Iraq's huge foreign debt, among other things. Again, they are likely to be wrong.

In an earlier column, I noted that Iraq has the second largest proven reserves of petroleum of any nation on earth. Only Saudi Arabia has more. But years of war, government mismanagement, and trade sanctions have taken their toll. Iraq's oil industry will need significant investments in new technology and repair before its production will be a factor in world oil markets.

While it may be some months after the end of hostilities before Iraq's oil begins to flow again -- and years before its full production potential is realized -- this does not mean that it will take that long before the Iraqi people can benefit from their natural endowment.

First, there is already a system in place administered by the United Nations that can legally sell Iraqi oil and use the proceeds for relief. Known as the oil-for-food program, it has received some $64 billion from Iraqi oil sales that has been used to provide humanitarian assistance to the Iraqi people. There are still billions of dollars left in this fund and more could be added as soon as pipelines and other Iraqi oil infrastructure are repaired. This will be a high priority for Iraq's postwar regime and a key reason why coalition forces made such an effort to take Iraq's oil fields undamaged.

Second, a legitimate Iraqi government would not have to wait until oil is actually flowing in order to get revenue from it. Economist Morris Adelman of the Massachusetts Institute of Technology estimates that Iraq could get $100 billion almost immediately by selling production rights to its currently non-producing oil reserves. This will go a long way toward rebuilding Iraq without burdening the U.S. taxpayer -- a factor that the White House is counting on, according to comments by Office of Management and Budget Director Mitch Daniels.

Some analysts say that while oil could pay for much of Iraq's needs, it cannot do so until the issue of Iraq's foreign debt is resolved. Otherwise, much of the oil money will simply flow to Iraq's debtors without providing any benefit to the people.

According to a careful study by the Center for Strategic and International Studies, Iraq's foreign financial obligations amount to some $383 billion -- a staggering sum. Of this, about 15 percent represents pending contracts and 23 percent is due to borrowing from foreign banks. The balance, almost $200 billion, is reparations owed to those victimized by Iraq's invasion of Kuwait in 1991.

Clearly, not all of these debts are payable -- nor should they be. In the normal course of things, creditors often settle such debts for pennies on the dollar. Indeed, many of Iraq's Gulf War debts have already been paid off at about 30 percent of face value. Therefore, one should not assume that all of Iraq's debt represents a real burden on the Iraqi people. Debt negotiations should be able to resolve much of it fairly quickly once Saddam Hussein is gone. It will be in the interest of many to whom the money is owed to do as much as possible to help Iraq get back on its feet.

Even with large write-downs, there will still be a big Iraqi debt to deal with. However, some analysts are suggesting that part of it could be repudiated, as has been done in the past when tyrannical regimes were overthrown. For example, when the United States took control of Cuba after the Spanish-American War, it repudiated Cuba's foreign debt on the grounds that it had been imposed on the Cuban people without their consent or their benefit.

The concept of "odious debt" was further developed after the First World War by a French legal scholar named Alexander Sack. He argued that loans to despots were personal and not sovereign debts. Therefore, the people had no obligation to repay them once the despot is overthrown.

Now, two Harvard economists, Michael Kremer and Seema Jayachandran, have updated Sack's theory. They argue that a process for repudiating odious debt would discourage banks from bankrolling tyrants like Saddam Hussein in the first place. Under their scheme, once a regime had been declared despotic, no future regime would be responsible for any additional debt it incurs. Such a system would do far more to discipline despots than trade sanctions, because the market itself would enforce it.

Iraq will have many economic and financial problems to deal with once war ends. But they are not insurmountable and there are proven ways in which they can be managed without excessive reliance on U.S. foreign aid.

(Bruce Bartlett is a senior fellow with the National Center for Policy Analysis.)