BUSINESSES WARN ABOUT KYOTO TREATY IMPLICATIONS

MALDEN -- Putting the Kyoto Global Climate Treaty conditions in place would mean higher food and utility prices and a significant loss of jobs -- perhaps industries -- in Southeast Missouri.

Those warnings were issued Thursday at a hearing held by the U.S. House of Representatives' Small Business Committee. U.S. Reps. Jim Talent, R-Chesterfield, chairman of the panel, and Jo Ann Emerson conducted the hearing. Eight representatives of business and agricultural organizations testified.

AmerenUE's Paul A. Agathen, senior vice president for energy supply services, said: "The actions necessary to achieve the reductions called for in the Kyoto protocol likely will include replacing coal with natural gas to produce electricity. Such will undoubtedly have severe economic implications." He cited one study that showed electricity prices increasing by more than 50 percent.

"The cost to reduce carbon dioxide emissions to meet the Kyoto target will be enormous and will have to be passed on to customers," Agathen said.

Named after the Japanese city where representatives from around the world gathered in December to deal with the greenhouse effect, the Kyoto treaty is aimed at curbing emissions thought to contribute to global warming.

Grocery operations would raise the price of their products to meet increased energy costs, said Steve Wallace of Wallace & Owens Country Mart.

Wallace, vice president of the company, said the grocery chain paid almost $1 million for utilities last year. With a profit margin of only 1.8 percent to 2 percent, Wallace said his company would not be able to absorb additional increases in utility costs. "Any significant change in utility cost will have to be paid by the consumers," he said.

The treaty would impose stiff requirements on business and industry in industrialized nations such as the United States while exempting many developing nations. It has not been submitted by President Clinton for ratification by the U.S. Senate.

Talent, an outspoken critic of the treaty, said he was persuaded by Emerson to convene a hearing in Southeast Missouri to take comments on the treaty from local people. Emerson, who attended the Kyoto conference, has voiced warnings about the treaty's effect on small business.

Talent joins other critics of the plan who question whether the problem of global warming is a real issue.

Missouri Farm Bureau President Charlie Kruse of Dexter said the proposed treaty would "literally be devastating and decimating to agriculture." Kruse said he thinks the Clinton administration's support of the Kyoto treaty amounts to speaking out of both sides of its mouth.

Said Kruse: "I find it ironic that this administration talks about the need to be more competitive in a global environment. On one hand, the president is seeking to expand international trade agreements and open new markets to U.S. agricultural products. But on the other hand, the president is party to a treaty that will put U.S. farmers and ranchers at a disadvantage against competitors such as Brazil and Argentina.

"The administration, by legislation or regulation, is acting without science or the consent of Congress to implement an international treaty that will do nothing but hurt Missouri farmers and ranchers."

For heavy electrical users such as Noranda Aluminum, the treaty's conditions could mean the end of business -- and the loss of hundreds or thousands of jobs, warned Steve Heddle, president of primary products at the New Madrid plant. He said steep increases in the cost of electricity likely would prompt company officials to consider moving its operations.