Politico Op-Ed: Success depends on businesses
12/3/09
by Karen A. Harbert
The road to Copenhagen has been a long and winding one. As you read this, representatives from more than 190 nations are gathering to work on a new framework to reduce global greenhouse gas emissions. But the group that will have the most impact on achieving that goal isn’t sitting behind a dais at Copenhagen’s Bella Center. Instead, its members are on Main Street and Wall Street, from Boston to Beijing. The success or failure of any agreement will rely most heavily on whether businesses, small and large, are able to implement it.
The private sector has the capital, expertise and practical solutions necessary to address climate change. Business has been steadily working at expanding those solutions for many years, by investing in cutting-edge research to develop and use cleaner and more-efficient energy technologies.
As domestic and international negotiations continue, the U.S. Chamber of Commerce’s Institute for 21st Century Energy intends to be a constructive voice in support of a common-sense and achievable international climate agreement. In doing so, we will seek to put all the facts — and the fiction — on the table so that policymakers and the American people can make informed decisions.
Among the most important facts:
Fact: The U.S. Chamber of Commerce wants an international agreement.
As the largest representative of the U.S. business community in Copenhagen, the Chamber is an advocate for an international agreement and domestic legislation to reduce global emissions. In September, the Chamber’s energy institute hosted a summit of global business leaders and joined the group in declaring that “the business community stands ready to continue engagement with policymakers and continue investments that contribute to low-carbon and energy-efficient economies.” The involvement of the business community in United Nations climate negotiations can only lead to a more successful and realistic agreement.
Fact: The developing world will produce the vast majority of emissions in the next century.
Even if developed countries deliver steep cuts in emissions, absent meaningful commitments by developing countries, it will be nearly impossible to achieve significant reductions in global emissions. Around 80 percent to 90 percent of the expected growth in global carbon dioxide emissions is expected to occur in developing countries — especially China, India and parts of Southeast Asia — so they have to be an integral part of any agreement.
Fact: Free trade of energy goods and services will accelerate the transition to a lower-carbon future.
Some in the United States and elsewhere have been pushing for border tariffs that would increase the cost of goods from countries that have not adopted aggressive restrictions on emissions. The international climate negotiations should not be used as a vehicle to erect counterproductive barriers to free trade. Instead of flirting with a green trade war, we should be eliminating tariff and nontariff barriers for clean energy goods and services to accelerate use of the latest technology worldwide.
Fact: Without protection of intellectual property rights, companies won’t invest in clean energy.
Weakening intellectual property rights would have a devastating effect on the long-term development of clean energy technology. Without intellectual property rights, there is little incentive for companies to invest in advanced technologies. No company would commit to investing tens of millions of dollars to develop the next great clean energy technology if it feared that this technology would be copied and manufactured at a reduced cost in the developing world.
Fact: Addressing climate change will take time and be costly.
Too often, interested parties choose to manipulate numbers and ignore the economic realities of addressing climate change. For instance, during the debate over the Waxman-Markey cap-and-trade bill in the United States, proponents insisted that the bill would cost only “a postage stamp a day.” What they failed to mention is that their calculation covered only the initial years, when the government would make free allocations available, not the years after 2025, when costs are estimated to balloon. It is that kind of political gamesmanship that is counterproductive to a real climate solution.
Addressing climate change, both at home and abroad, is going to be expensive. That’s particularly true when one considers that the developing countries are counting on massive wealth transfers to support their efforts to lower emissions. They’ve demanded 0.5 percent to 2 percent of the developed-country gross domestic product to support climate change programs. In the United States in 2008, that would have represented as much as $290 billion — and that would be on top of the billions required to reduce our own emissions. Before global commitments are made, there must be an honest and thoughtful national discussion about timelines and the cost to the U.S. economy.
Of course, there is plenty of fiction surrounding Copenhagen, as well. Some examples:
Fiction: Reaching an agreement is as easy as agreeing on a target.
If we’ve learned anything from the Kyoto Protocol, it’s that a top-down approach doesn’t work. The focus on an unenforceable and unrealistic long-term target for reducing emissions has created expectations that all parties seem unprepared to fulfill. A new agreement should concentrate on implementing technology solutions. A long-term plan is needed — one that motivates and provides direction for national and regional cooperative activities and ensures the broadest participation, recognizes growing energy needs and does not undermine economic growth. That’s the kind of realistic agenda countries can embrace.
Fiction: We have the technology on hand today to meet emissions reduction goals.
How rapidly advanced energy technologies develop and are adopted commercially will be the most important factor in determining how quickly and at what cost greenhouse gas emissions can be reduced globally. Current technologies and energy efficiency can and will make a significant contribution, but to achieve the scale of the reductions being discussed in the United Nations, we’ll need to develop advanced technologies that can compete with the cost and reliability of current technologies. By reducing the costs associated with reducing emissions, new technologies can expand the range of politically and economically viable policy options.
Fiction: The U.N. Framework Convention is the only body through which countries can reduce emissions.
The action doesn’t begin and end at the United Nations. We believe that there are plenty of things that governments should be doing regardless of the outcomes in Washington and Copenhagen. In fact, the Chamber’s Institute for 21st Century Energy presented 88 policy recommendations to President Barack Obama and Congress shortly after last year’s elections. Among them were improving access to financing for clean energy technologies though a government-sponsored clean energy bank, moving quickly to build nuclear plants and improving America’s energy infrastructure to enable it to support new emissions-free power sources. These recommendations, and many others, can form the basis for shorter-term, consensus-based action on climate.
At the end of the day, to achieve measurable results, the U.N. negotiating process could benefit from giving the global business community a greater voice. Governments should recognize and embrace business engagement so that the international process can take better advantage of the range of technical expertise that business can provide. A realistic vision focused on technology deployment that encourages cooperation, not confrontation, would be a good place to start and would help make Copenhagen a success.
Karen A. Harbert is president and CEO of the U.S. Chamber of Commerce’s Institute for 21st Century Energy.
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