Merrill Lynch is bullish on global warming. The rest of the world, however, appears to be heading in the other direction.

Last week, Merrill and the environmental activist World Resources Institute issued a joint report on global warming-related “investment opportunities” entitled, “Energy Security and Climate Change: Investing in the Clean Car Revolution.”

Heralded as the “first such collaboration between a mainstream U.S. investment bank and an environmentalist non-profit,” the report purports to describe the international regulatory environment concerning global warming and automobile emissions, and makes stock recommendations.

The report’s baseline assumption is, “clearly, there is a discernable trend towards regulating emissions of carbon dioxide and other tailpipe emissions from the burning of fossil fuels.” It predicts that, “as the causes of human-induced climate change become more generally accepted, policies to reduce greenhouse gas emissions will continue to proliferate.”

No doubt report collaborator and climate alarmist WRI wishes the world were piling aboard the global warming bandwagon, but recent developments indicate this isn’t the case.

The U.S. Senate rejected last week the global warming amendment to the energy bill introduced by Sens. John McCain, R-Ariz., and Joseph Lieberman, D-Conn. Like the Kyoto Protocol, its provisions included mandatory limits on greenhouse gas emissions.

McLieberman (as critics call it) was defeated by a vote of 60-38. Given the bill’s prior 55-43 defeat in 2003, last week’s vote indicates the Senate is getting less susceptible to climate alarmism. A Senate staffer told me McLieberman is probably dead for good — which means Kyoto-like emissions limits are too.

After dispensing with McLieberman and putting off another global warming amendment introduced by Sen. Jeff Bingaman, D-N.M., the Senate passed by a vote of 55-43 a non-binding resolution entitled, “Sense of the Senate on Climate Change.” Though the resolution calls for future limits on greenhouse gas emissions that won’t hurt the U.S. economy, a Senate staffer told me that the resolution only passed because some senators wanted to be on the record for taking some sort of action on global warming without really doing anything at all.

The global warming lobby is pointing to the resolution as a victory, but it’s not; at most, it’s a political bone thrown their way.

Global warming is also being reconsidered internationally.

European Union nations now operating under the Kyoto Protocol will not likely meet the treaty’s emissions limits, according to data from the International Energy Agency.

As recounted by Robert J. Samuelson in his Washington Post column this week, EU nations will exceed their 1990 greenhouse emission levels as follows: France, 6.9 percent; Italy, 8.3 percent; Greece, 28.2 percent; Ireland, 40.3 percent; the Netherlands, 13.2 percent; Portugal, 59 percent; Spain, 46.9 percent.

But under the Kyoto Protocol, emissions are supposed to be 8 percent below 1990 levels.

Britain and Italy reportedly are already clamoring for a Kyoto exit strategy. Nervous EU officials are considering “adaptation to climate change” — a euphemism for doing nothing on emissions reductions — as a Kyoto alternative.

So the trend concerning the adoption of emissions limits appears to be the opposite of what the Merrill-WRI report concludes.

The report also claims consumer demand for more “environmentally friendly” cars is driving the auto sector.

While consumer demand for gas-guzzling sport utility vehicles is off, this is most likely attributable to the recent spike in fuel costs and subsequent consumer demand for more fuel-efficient cars — not consumer concern for global warming. Higher gas prices also explain the slight increase in demand for hybrid vehicles, which run on both gas and electricity.

The zero-emission electric cars that were mandated by the state of California proved to be such a bust with consumers that manufacturers like Toyota and General Motors stopped making them.

Punctuating the lack of evidence for consumer enthusiasm for “environmentally friendly” cars is the Merrill-WRI report’s “neutral” recommendation for Detroit-based BorgWarner Automotive, which the report describes as “perhaps the company in our global universe most leveraged to the trends outlined in this report.”

But what does a “neutral” rating say about the company with respect to its growth prospects?

WRI seemed to go out of its way in an interview with to say that it didn’t pressure Merrill to issue the report. Yet close observers can’t help but notice that Merrill has recently been targeted by the Rainforest Action Network (RAN) as engaging in “investments of mass destruction” and that RAN works closely with WRI.

Merrill Lynch paid a high price when it turned out that brokers were pressured to push dubious stocks during the Internet bubble. It might now think twice about pushing dubious science in the global warming bubble.