Frontlines

Moscow's ratification of the Kyoto protocol could pose problems for the United States.

It could mark the biggest bungle of the last two administrations-the decision to walk away from the Kyoto Protocol rather than stay and negotiate to U.S. advantage. No one thought Russia would sign and put the treaty in force. But now that Russia's ratification appears imminent, policy wonks in America are scrambling to assess the impact.

In our August issue, attorney Peter J. Fontaine laid out in stark detail what Russia's ratification could mean for energy prices, and how the World Trade Organization (WTO) could force the United States to comply (). And many other analysts now appear to agree, predicting that Kyoto's enactment could prove painful for the United States, owing largely to our discordant state and federal environmental rules.

Frustration with the current administration has caused some state regulators to go it alone on environmental policy. Some states in the last few years have cut their own deals with electric utilities on carbon emissions-deals that go out for years. Or they have developed mandatory portfolio standards for renewable energy, or have sponsored emissions trading regimes with neighboring states or countries, such as Canada.

However noble these efforts, they could undermine America's economic competitiveness. Utilities, for instance, may find themselves obliged to boost rates to pay for emissions reduction equipment forced upon them under the Kyoto plan. The affect of those increased energy costs, experts worry, could render U.S. businesses less competitive.