30
Oct
2007
Editorials Édito Énergie

Climate Change: On the Path of a Green America? The Energy Editorial, October 2007

Climate Change : On the Path of a Green America ?

Although there is now a broad consensus of opinions regarding the reality of climate change, strategies differ for reducing global greenhouse gas (GHG) emissions. While countries that have ratified the Kyoto protocol are working to find its replacement (the protocol"s commitment period will come to an end in 2012), other initiatives push for a voluntary approach rather than the imposition of binding targets.

Clichés oppose an apparently self-righteous Europe, champion of the Kyoto protocol to the biggest CO2 emitter that pulled out from Kyoto in 2001, and whose president asserted, “the American way of life is not negotiable”. But is the question relevant concerning which leader better tackles climate change when both approaches are needed?

True, the latest actions of the current US administration might be seen as attempts to undermine the two-week conference that will take place in Bali in December, under the auspices of the UNFCCC. During the last APEC summit, the US and Australia, supported by Canada with its fresh demand to join the Kyoto-skeptic group, tried to push for a non-UN agreement on climate change. The proposition was rejected by China and other developing countries that prefer to refer climate change issues to the UN. In late September, the first “Major Economies Meeting on Energy Security and Climate Change”, launched by President Bush during the last G8 summit, highlighted the US administration"s insistence on the so-called “voluntary approach” and did little to help the international community"s concern that this conference might not help advance decisive talks in Bali.

Yet, American citizens are gradually recognizing the risks associated with climate change and a critical mass support has emerged among key stakeholders. An unusual political consensus is building up as more and more Republicans are straying from the party line. Republican Senator John Mc Cain, associated with Democrat Joe Lieberman, promoted a bill to make large reductions in greenhouse gas emissions (unsuccessfully). Governor Arnold Schwarzenegger signed legislation to reduce California GHG emissions back to 1990 levels by 2020. Thirteen other states intend to implement stiff new rules aimed at reducing GHG from cars and light trucks. Initiatives such as the ones that Mayor Michael Bloomberg proposed in New York City, to create “the first environmentally sustainable 21st-century city", are just the tip of the many local-level environmental policies occurring across the nation. When looking for solutions to reduce dependence on oil from the Middle East, conservative think tanks find themselves aligning their position with environmental groups. Interestingly enough, the Evangelical community, a stronghold of the Republican Party, lent an unexpected support to raising awareness on climate change issues, because of their commitment to “creation care”. Last but not least, in April 2007, the Supreme Court rejected the Bush administration's policy of inaction on global warming and ruled that the Environmental Protection Agency had not only the authority, but the responsibility, to regulate greenhouse gases.

The private sector has also been very dynamic : Several US companies are increasing or even focusing effort on research and development in this field and are developing energy-saving technologies. GE invested $700 million in clean technologies in both 2004 and 2005, and intends to double its overall investments in clean technology and renewable energy to US$4bn by 2010. A group of businesses (including GE, BP America, Shell and automakers such as General Motors) have engaged in the US Climate Action Partnership (USCAP) along with environmental NGOs, to push for strong national legislation to reduce GHG emissions. Venture firms in the Silicon Valley have begun to consider clean-energy as the largest economic opportunity of the century.

But at some point, federal intervention commitment and investment will be needed to trigger, foster and sustain innovation. The old debate of “technology push” versus “market pull” may not be the decisive argument in this case. Private sector needs a strong and clear signal to decide long-term investments. The administration is responsible for setting up appropriate policies, standards and funding. It is now widely believed that putting a price on carbon is the best way to incite companies and countries to invest in low-carbon energy sources. Lobbying from banks (including Citigroup and Morgan Stanley) to engage the US in a cap & trade system, only anticipates a global warming bill that seems to be inevitable in the near future.