Suicide pacts are OK if the other guy goes first
Posted by aogTuesday, 12 October 2004 at 14:23 TrackBack Ping URL

No Illusions writes about how the EUlites plan to overtake the USA in ten years is failing. One of the key points is how the Kyoto Climate Change Treaty will begin to hurt in a couple of years, once Russia has ratified the agreement.

The official story from Russia is that Russia will sign the treaty in exchange for EU approval of Russia’s WTO bid. One rumour is that the economic minister is in favor of ratification because it provides a very convenient excuse for any failure to achieve economic goals.

But what if Russia is playing a deeper game? I think we can assume that if something can occur to some weblogger, then it is quite plausible that the same idea occurred to people who are paid to think about such things. In that case, could Russia have forseen the impact of Kyoto on the struggling EU economy? What will the EU do when it needs the economic growth but is hobbled by Kyoto? Abandon the treaty? Or simply ignore its provisions as France does with EU debt regulations? In such a case, Russia might well do the same, citing EU evasion as justification.

If the treaty is renegotiated, Russia can then either get it tweaked to Russia’s benefit or drop out of the revised treaty (or simply put it off for a long time). Meanwhile, they’re in the WTO and won’t get booted out for blowing off Kyoto.

It looks like Russia may well be planning to collect their side of the bargain (entry to the WTO) without having to actually pay out. That would make them cleverer than the EUlite, but that’s not very high praise these days.

Comments — Formatting by Textile
Dave Sheridan Wednesday, 13 October 2004 at 04:48

I think that’s exactly what they’re planning. In fact, they have a few years during which they stand to collect billions by selling pollution credits to the other signatories. The original Kyoto deal was rigged with a carrot for both Germany and Russia. Pollution benchmarks were set at 1990 levels, when both countries had lots more polluting industry than they do now.

Putin knows the bind Europe’s in, and that they’re already behind targets. I think he’s betting the whole treaty gets shelved or seriously modified before it has time to bite Russia. They’ll actually be the last of the major signatories to feel real growth-crushing pain.

End of Discussion