By basing its negotiating stance in Kyoto on development of a sensible national energy strategy, the United States could simultaneously reduce its emissions of carbon dioxide and improve its economic and security prospects. A broad consensus among economists suggests that a carbon tax could be implemented without serious damage to the economy. Studies indicating the contrary generally fail to account for benefits accruing from reinvestment of related revenues, savings in terms of environmental damage averted, and opportunities for growth in other areas of the economy stimulated by higher prices for fossil fuel. A second industrial revolution is under way there today. In contrast to the first, which proceeded at a leisurely pace and involved at most a few tens of millions of people, this latter-day reenactment is running at breakneck speed carrying along more than a billion participants.
China has little room to maneuver.
I saw the problem firsthand and had a clear sense of the complex choices facing the Chinese government when I visited the city of Chongqing a few years ago. The plant was in clear violation of China's admirable laws for environmental protection. As my host explained, they had few options for action. Pollution emanating from the Asian landmass is detectable in Hawaii. Agreements reached at Kyoto should involve obligations not only for the industrialized world but also for large developing nations such as China.