Clinton, who plans to take part in the meeting, supports legally binding international action to cut emissions, but not at the price of harming the U.S. economy. The president is under intensifying pressure to come up with a specific proposal for reducing emissions. The U.S. proposal is generally seen as critical to efforts by the nations of the world to negotiate cuts at a meeting in Kyoto, Japan, in December. It is widely expected that Clinton's proposal will be announced later this month, either just before or at a pre-Kyoto negotiating session that begins Oct. 20 in Bonn, Germany. But as the moment of truth approaches, even some leading members of the Clinton administration have all but thrown up their hands over the difficulty of obtaining clear answers to some crucial economic questions.
Computerized models are the main analytical tool employed by economists.
There is general agreement that reductions of emissions would come at some cost to the economy and that the size of the cost depends largely on the size of the cuts and how rapidly they are carried out. Energy costs would very likely rise, at least for a time, and some industry sectors, it is generally agreed, could be hit hard if they were not able to adapt quickly enough. But many economists also say there are a number of ways to cut the costs substantially, through policy measures. One is by imposing a tax on fuels in proportion to their carbon content. The revenues from the tax would be used to reduce other federal taxes, thus pumping money back into the economy.