Argument

What Missile Defense?

Missile defense will be strategically useless against the nuclear threats from Iran -- or anywhere else.

Barack Obama's administration has characterized its new missile defense plan as a more judicious alternative to George W. Bush's expensive (but untested) Eastern European-based interceptor system. Writing in the Financial Times last month, Secretary of State Hillary Clinton called it "a stronger and smarter approach than the previous program," noting it will be deployed faster and less expensively, so as "not [to] waste time or taxpayer money." That may sound like a winning combination, but in reality, the main difference between the old and new plans is that the latter doesn't step on Russia's toes. Otherwise, it will be just as strategically ineffective as the original.

Speaking broadly, missile defense comes in two different flavors. The first is tactical missile defense, such as the U.S. Patriot system, which protects a theater of battle against short-range conventional rockets. The second category is strategic, or national, missile defense: systems meant to guard against adversaries' nuclear-tipped missiles. While the first of these types is conceptually sensible, the second is not and may even make the world a more dangerous place.

The reason for this is quite simple. A 70 percent effective tactical missile defense (to pick an optimistic number) makes a lot of sense. If 10 conventional missiles are headed your way, stopping seven is undeniably a good thing. Stopping seven of 10 nuclear warheads, however, is less decisive since even one will visit unacceptable devastation upon the United States. Just one nuclear-tipped missile penetrating your missile shield is about the equivalent of a million conventional missiles making it through.

So even after the United States has set up and activated a national missile-defense system, it still will not have neutralized the perceived threat from Iran. Not only that, but Washington's strategic calculations toward Tehran will remain unaffected:  The United States will still need to be just as worried about Iran's missiles, since the destruction of even one U.S. city or region is simply too high a cost to bear. For that security equation to change, national missile defense would need to intercept 100 percent of incoming nuclear warheads -- an unattainable goal for any piece of machinery.

Fielding a missile shield may even encourage adversarial countries to build up missile and warhead stockpiles to ensure that some make it through unstopped. A good way to encourage the North Koreans to build more missiles would be to surround them with missile-defense interceptors.

Lastly, a national missile-defense system may also embolden future U.S. political leaders to stake out policies that they otherwise wouldn't have risked, in the mistaken belief that they would be protected from any possible attack. In this scenario, missile defense could provoke its own test run, triggering a nuclear war. If you believe this to be a vague academic possibility, think about hurricane insurance: People endanger their lives and property on a regular basis by building on unsafe ground in the knowledge that they are "covered" for catastrophic events.

The Obama team says that its new plan will provide better protection more quickly from the threat of Iranian missiles. Unfortunately, better is not good enough; Washington would need a perfect missile defense. Anything less is strategically useless, and downright dangerous.

SHAIEGAN/AFP/Getty Images

Argument

In Green Company

If Kyoto is so dangerous, why is corporate America already playing by its rules?

To hear President George W. Bush tell it, the United States backed out of the Kyoto Protocol because the pact would do irreparable harm to U.S. businesses. At $400 billion, the costs were too high, he said. By excluding the developing world, the agreement would put U.S. companies at a disadvantage. If the agreement were enacted, Bush warned, nearly 5 million workers would watch their jobs slip away. But, if all of this is true, why are many in corporate America already starting to comply with Kyoto, which now binds 141 nations in reducing their greenhouse gas emissions?

Many U.S. multinationals are already complying with Kyoto's emission targets because they are subject to the agreement in key markets where they operate. Although their affiliates in developing countries, such as China and India, are not bound by emission caps, American firms operating in the European Union (EU), Canada, Japan, and other Kyoto-compliant countries are. Europe's emissions caps apply to more than 12,000 industrial facilities, many of them owned by American companies. Even if U.S. companies do comply with such foreign regulations, many still face the unpalatable choice of either pursuing different policies in different places, which is inefficient and expensive, or swallowing the costs of improvements in the United States. Meanwhile, the incentives for being Kyoto-friendly are already enormous. To put it in perspective, consider that, despite the strategic importance of China, American companies invested twice as much capital in 2003 in tiny Ireland as in all of China. U.S. corporations have nearly $1 trillion in direct investments in the EU. And Canada, which will soon mandate improvements in carbon efficiency for all large emitters of greenhouse gases, is still the largest single U.S. trading partner. At $200 billion, the American industrial presence in Canada dwarfs U.S. investments in any non-Kyoto country.

Corporate America's incentives are changing closer to home, too. The world's major automakers -- including the United States' "Big Three" (General Motors, Ford Motor Company, and DaimlerChrysler AG) -- agreed to reduce the greenhouse gas emissions of their fleet in Canada by 5.3 million metric tons by the end of 2010. If automakers plan to produce cars for the Canadian market that meet these ambitious goals, it does not make much economic sense to produce cars with different emissions standards for the U.S. market. Even Chinese fuel efficiency standards were recently tightened and are now actually more stringent than those of the United States. And as the Bush administration ignores concerns over climate change, about 30 U.S. states have already adopted some form of restrictive climate policy.

California now has legislation to limit greenhouse gas emissions and other states are following its lead. Eight states' attorneys general, including New York's Eliot Spitzer, are suing five large utilities for their greenhouse gas emissions. A number of northeastern and mid-Atlantic states have formed a Regional Greenhouse Gas Initiative that will impose emission caps on major utilities. And in June, the United States Senate adopted a resolution calling for "mandatory, market-based limits" on greenhouse gas emissions, modifying the 1997 Byrd-Hagel Resolution opposing a climate change agreement that excludes the developing world.

Global business leaders are not waiting for environmental mandates to be handed down from Washington. Jeffrey Immelt, the chairman of GE, recently committed his company to reducing its greenhouse emissions by 1 percent by 2012. To do that, GE will need to reduce its emissions per average unit of product by nearly a third -- a major accomplishment. The company will also invest as much as $1.5 billion annually in the research and development of green technologies and, as a result, expects to double its annual revenues from clean technology products and services to about $20 billion. U.S. companies such as DuPont and Alcoa have already put in place their own Kyoto-like emission reduction programs, with internal emissions trading and incentives for managers who meet the desired targets. Several years ago, BP pioneered the idea and has pocketed remarkable savings.

Awareness of the effects of climate change is rippling through other industries as well. Swiss Re, the world's second-largest reinsurer, estimates that the annual economic impact of natural disasters may double in the next 10 years because of climate change, costing insurers $30 to $40 billion a year. Allianz Global Investors, one of the world's largest financial services companies, recently announced it would take climate change risks into account in making insurance and underwriting decisions. Institutional investors are also assessing the risks associated with greenhouse gases. The Carbon Disclosure Project, a coalition of 143 institutional investors with $20 trillion in assets, is collecting information on emissions and climate-related policies from the world's top 500 companies. Eventually, Wall Street will factor the costs of complying with emissions targets into the price of corporate debt and equities. The United States also stands to lose leadership in the creation of profitable emissions trading markets as they gravitate to foreign financial centers.

American businesses that refuse to accept that we live in a carbon-constrained world are living on borrowed time. Soon it will no longer be economical for the holdouts to view the United States as a regulatory safe haven. Compliance with the Kyoto Protocol will likely spur countries such as Japan and Britain to subsidize renewable energy and other emission technologies, forcing U.S. companies that might have been market leaders to become consumers of new technology developed by others. There is little chance the Bush administration will suddenly reverse course and endorse Kyoto. Fortunately, a growing number of U.S. businesses are not waiting to take their cues from Washington.