[Congressional Record Volume 145, Number 84 (Tuesday, June 15, 1999)]
[Extensions of Remarks]
[Pages E1260-E1261]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION OF THE SMALL BUSINESS, FAMILY FARMS, AND CONSTITUTIONAL 
                             PROTECTION ACT

                                 ______
                                 

                         HON. DAVID M. McINTOSH

                               of indiana

                    in the house of representatives

                         Tuesday, June 15, 1999

  Mr. McINTOSH. Mr. Speaker, today, I rise to introduce the Small 
Business, Family Farms, and Constitutional Protection Act, a bill to 
prevent Federal agencies from implementing the UN global warming 
treaty, the Kyoto Protocol, prior to its ratification by the Senate.
  Ever since October 1997, the Clinton Administration has called for 
enactment of a program commonly known as ``credit for early action'' or 
``early action crediting'' as part of its global warming policy. Early 
action crediting is fundamentally a strategy to jump-start 
implementation of the non-ratified Kyoto Protocol and build a pro-Kyoto 
business constituency.
  Enactment of an early action credit program would effectively 
repudiate the July 1997 Byrd-Hagel resolution (which passed the Senate 
by a vote of 95-0), fuel pro-Kyoto business lobbying, and penalize 
companies--including most small businesses and family farms--that do 
not jump on the global warming bandwagon.
  Today, therefore, I am introducing legislation to block further 
Administration efforts to advocate, develop, or implement an early 
action credit program.
  What is wrong with early action crediting? First, early action 
crediting would reward companies for doing today what they would later 
be compelled to do under a ratified Kyoto Protocol. It is a form of 
implementation without ratification.
  Second, and more mischievously, early action crediting would turn 
scores of major companies into a pro-Kyoto business lobby. The program 
would create credits potentially worth millions of dollars but which 
would have no actual cash value unless the Kyoto Protocol, or a 
comparable domestic regulatory program, were ratified or adopted. Thus, 
participating companies would acquire financial motives to support 
ratification.
  Third, although touted as ``voluntary'' and ``win-win,'' early action 
crediting is subtly coercive and would create a zero-sum game in which 
small business can only lose. Every credit awarded to early reducers 
would draw down the pool of emission credits available to all other 
U.S. companies in the Kyoto Protocol compliance period. Thus, if the 
Kyoto Protocol were ratified, companies that did not ``volunteer'' for 
early action would not merely forego benefits, they would be 
penalized--hit with extra compliance burdens. They would be forced 
either to make deeper emission reductions than the Protocol itself 
would require, or to purchase emission credits at prices higher than 
would otherwise prevail.
  Since early action crediting programs penalize those who do not 
``volunteer,'' it is worth asking who the non-participants are likely 
to be. The answer should be obvious. Most small businesses and family 
farms lack the discretionary capital, technical expertise, and legal 
sophistication required to play in the early credit game. Most do not 
have the wherewithal to hire special accountants and engineers to 
monitor and reduce carbon emissions. Most do not have environmental 
compliance departments ready and able to negotiate early action 
agreements with Federal agencies. However, under the Kyoto Protocol, 
small businesses would have to pay higher energy costs and many would 
have to reduce their use of fossil fuels. So, while making the Kyoto 
Protocol more likely to be ratified, early action crediting would also 
make the treaty more costly to small business.
  Unfortunately, the mischief doesn't stop there. Since early reducers 
would be rewarded at the expense of those who do not participate, many 
businesses that would otherwise never dream of ``volunteering'' may be 
constrained to do so for purely defensive reasons. Companies that see 
no particular benefit in early reductions may ``volunteer'' just so 
they do not get stuck in the shallow end of the credit pool in the 
Kyoto Protocol compliance period. This dynamic is exactly what pro-
Kyoto partisans desire, as it would build up a large mass of companies 
holding costly paper assets that are completely valueless unless the 
Protocol is ratified.
  Proponents claim that early action crediting is not linked to the 
Kyoto Protocol because the credits could be used to offset emission 
reduction obligations under a domestic program to regulate greenhouse 
gases. But, recall that the Senate, in the July 1997 Byrd-Hagel 
Resolution, voted to reject any agreement that, like the Kyoto 
Protocol, exempts three-quarters of the world's nations from binding 
commitments. If the Senate preemptively rejected the treaty because it 
is not ``truly global,'' what is the likelihood Congress would some day 
enact a unilateral greenhouse gas reduction program that applies to 
U.S. companies alone? There is no change of that happening. The word 
``early'' in ``early action crediting'' means just one thing--earlier 
than the Kyoto Protocol compliance period.
  Proponents also claim that early action crediting is an ``insurance 
policy'' needed to protect companies that have already invested in 
emissions reductions from paying twice under the Kyoto Protocol or a 
domestic regulatory program. Now, let's leave aside the question of 
whether Congress should ``insure'' companies that decide, for their own 
reasons, to implement a treaty the Senate has not ratified. The 
relevant question is whether, absent a crediting program, companies 
that act early to reduce emissions would be penalized under a future 
climate treaty.

[[Page E1261]]

  Again, the answer should be obvious. If the Kyoto Protocol is ever 
ratified, it will be because the policy makers and companies now 
promoting early action crediting lead the charge. The pro-Kyoto 
coalition will ensure that any implementing legislation associated with 
the Protocol recognizes the emissions reductions companies have already 
made, certified, and duly reported. To contend otherwise is to suppose 
that the pro-Kyoto lobby would implement the Protocol in a way that 
inflicts maximum pain on its corporate base. Unless early action 
proponents sincerely believe that ``we have met the enemy, and it is 
us,'' the ``insurance'' argument makes no sense.
  Let's also be clear about one thing. Early action crediting is not 
needed to enable companies to undertake, or the Federal Government to 
record, voluntary reductions of greenhouse gas emissions. Current law 
already provides a voluntary program for reporting such reductions. 
Established by section 1605(b) of the 1992 Energy Policy Act, the 
existing program is highly efficient, flexible, and accessible to 
everybody, from large utilities supplying electric power to families 
planting trees. Unlike early action crediting, the 1605(b) program is 
in no way linked to the Kyoto Protocol, does not create cash incentives 
in support of ratification, and does not promote the interests of large 
corporations at the expense of small business or consumers.
  Mr. Speaker, the bill I am introducing today would protect small 
business, family farms, and the U.S. Constitution in the following 
ways. First, it prohibits Federal agencies form advocating, developing, 
or implementing an early action credit program until and unless the 
Senate ratifies the Kyoto Protocol. Second, it makes permanent the 1999 
VA-HUD Appropriations Act restriction against backdoor regulatory 
implementation of Kyoto Protocol. Third, it prohibits Federal agencies 
from regulating carbon dioxide--the principal gas covered by the Kyoto 
Protocol--without new and specific legislation by Congress.
  Who should support the Small Business, Family Farms, and 
Constitutional Protection Act? Every Member of Congress who believes 
the small businesses and family farms should not be forced to incur 
additional burdens under a future global warming treaty. Every Member 
who believes that Federal agencies should not implement a treaty that 
has not been ratified. And every Member who believes that Congress 
should not artificially boost the fortunes of the pro-Kyoto lobby.
  The Constitution established a clear process for enacting 
international treaties into law. The President signs the treaty and 
submits it to the Senate for its advice and consent. The treaty becomes 
law only if two-thirds of the Senators vote in favor of ratification. 
My bill will help safeguard the integrity of this constitutional 
process.

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