The mantra coming from the Hill and the powerful industry lobby tells us that the Kyoto Protocol amounts to “unilateral economic disarmament” and that if the US acts first, jobs and industry will flee to developing countries. Not true. The idea that US businesses will shift production en masse to developing countries has no basis. Here at home, more than 80 percent of industrial output and 90 percent of employment is concentrated in industries where energy costs are less than 3% of the total output value. Even where energy costs are significant, they do not drive international investment decisions—the largest increases in foreign trade and investment are in industrialized and developing countries that have higher energy prices than the US.
The real vulnerability lies in developing countries, where coping with the effects of climate change—rising sea levels, severe droughts and storms, and changing patterns of disease—are profoundly more challenging because of financial and institutional resource limitations.
