By 2008, emissions had fallen from the 1980 level by almost 60 percent. As a bonus, the rapid reduction in emissions meant less lung disease and thus significant savings on health care. 17
The impact on thinking about how to solve environmental problems was enormous. “We are unaware of any other U.S. environmental program that has achieved this much,” concluded a group of MIT researchers, “and we find it impossible to believe that any feasible alternative command-and-control program could have done nearly as well.” Coase’s theorem worked; markets were vindicated. Within a decade, a market-based approach to pollution had gone from immorality and heresy to almost accepted wisdom. The experience would decisively shape the policy responses in the ensuing debate over how to deal with climate change. Overall, the evidence on SO2 was so powerful that it was invoked again and again in the struggles over climate change policy.
Allowance trading had also acquired a new name—cap and trade.
The fact that the SO2 program provided credibility for cap and trade for climate change was not exactly accidental. For the proponents saw the 1990 program as a “demonstration model” for what was coming to be their prime issue—climate change. And the success of the acid rain program became a touchstone for the growing number of environmental organizations that were working Capitol Hill to promote climate change policies. “We were going to wrap up clean air in a couple of years, we hoped, and then start gearing up to do climate in the 1990s,” recalled Joseph Goffman.
“We used that conviction to keep up our morale,” he added.18
“A DISCERNIBLE HUMAN INFLUENCE ON CLIMATE”
In the early 1990s, as the SO2 market was getting going, the IPCC was busy preparing its next every-half-decade “assessment” of where the science was on climate change. Once again the process was unfolding—pulling together research, examining it, challenging it, making sense of it, arguing about it, all across the world’s time zones. This time the “bulk reports” that constituted the Second Assessment Report would total two thousand pages and would reference ten thousand scientific papers.
Once again, the process was under the steady, cautious hand of the Swedish meteorologist Bert Bolin, and once again, he wanted to be very careful and make sure that the conclusions did not outrun what could be known. “It was still difficult,” he said, “to tell how trustworthy projections of future changes might be.” He worried about misunderstandings. For instance, the use of the word prediction—when talking about climate change issues to the public or politicians—could “transmit a false impression of a capability that in reality is quite limited.”
Bolin had to stand his ground. Some of the scientists wanted to declare that “appreciable human influence” on climate was now clear. It was not clear, however, to Bolin. On his motion, “appreciable” was replaced with the word “discernible.” And thus the second IPCC report, in 1995, declared, “The balance of evidence suggests that there is a discernible human influence on global climate.” As it was, that sentence became famous. So did the report’s “best estimated” judgment that, on current tracks, global temperatures would rise two degrees centigrade by 2100.
“It’s Official,” headlined Science magazine, reporting on the IPCC. “First Glimmer of Greenhouse Warming Seen.” It announced that the report had identified the “newly perceived fingerprint of human-induced climate change.”19
DEVELOPED VERSUS DEVELOPING COUNTRIES
The IPCC may have gone up several steps in confidence, as well as visibility; but that, in turn, also meant that it was becoming more controversial. The first point of contention was the renewal of the “North-South” face-off between developed and developing nations. Some 75 percent of total accumulated emissions of CO2 between 1860 and 1990 had come from the industrialized nations. But they had only 20 percent of world population. As carbon limits seemed to take on greater likelihood, the developing countries became more vociferous in opposing limits on their use of hydrocarbons and the constraints such limits could impose on their economic growth. Bolin received an angry letter from China about the impact of proposed restrictions on developing countries. “We feel sorry for such a scientific assessment lacking fairness and equity,” the Chinese declared. Some editing was made in the report to make them feel less sorry.
This clash between developed and developing nations was a dominant issue when national delegations convened in Berlin in 1995 to follow up on Rio and work out a “mandate” that would serve as the basis for the upcoming conference in Kyoto. The chairman of the Berlin meeting was Angela Merkel. Just