E3G

Clinton, McCain, Obama – Europe’s opportunity to shape a Presidency

By Jennifer Morgan

Technology Innovation and Cooperation

The Copenhagen Agreement in 2009 should include new mechanisms to develop, deploy and transfer technologies. This is an essential element of the Global Deal in order to bring large developing countries on board – and is linked to the issue of carbon markets and finance. Low carbon technologies are a global public good, and finding ways of deploying them rapidly in emerging economies will be crucial to solving the climate crisis.

While the current Lieberman/Warner bill does currently allow use of auction revenue to fund adaptation and deforestation reduction, it does not include any financing for technology cooperation with developing countries. Europe is also weak on this point, with only Germany using current auction revenue for international climate action and no countries championing this approach under the next phase of the European Emissions Trading System. It will not be possible to get a deal in Copenhagen if these issues are not sorted out early on.

Trade Protectionism

Recently, voices on both sides of the Atlantic have increasingly started to call for the use of trade sanctions as a tool to protect energy-intensive industries and/or workers. There is still however a distinct difference in approach.

While Europe is waiting to see the outcome of the Copenhagen negotiations before implementing any protective measures for energy-intensive industries, the Lieberman/Warner bill poses a more explicit threat to emerging economies (i.e. China). The bill sets out that these countries should take on a national cap by a certain date or accept an emissions permit levy on energy-intensive exports to the US.

This provision ignores the responsibility of the US and other developed countries to cut their emissions further and faster than developing countries. It would antagonise developing countries, make it harder to get a deal at Copenhagen and help only a handful of industries (energy intensive goods account for just 3% of US imports from China).

Far more effective would be for Europe to continue its more positive engagement with China to bring together the world’s largest single market with the world’s most dynamic economy in the pursuit of a combined transition to a low carbon economy. For example, next year the European Commission should decide to remove high tariffs on Chinese compact fluorescent lightbulbs so that European consumers can purchase cheap low carbon goods, and Chinese producers can see the benefit of producing them. Really making such low carbon markets function would create massive first-mover benefits for both economies, and would signal the way forward for a more positive and proactive engagement from US business interests.

The recent Chatham House / E3G paper, Changing Climates – Interdependencies on Energy and Climate Security for China and Europe develops the case for constructive engagement with China.

Conclusion

Stephen Boucher is right to note that whoever becomes President offers Europe, and the world, a new opportunity to tackle climate change in a serious manner. To capitalise on this, Europe has until the end of 2008 to gets its own house in order, and must also already be engaging now with the candidates to underline the importance of climate change as a core foreign policy issues. The opportunity exists to bring the US national legislative process together with the UNFCCC negotiations in a way that did not exist during the Kyoto negotiations. With a bit of strategic thinking, good analysis and strong diplomacy, Europe could make the most of this opportunity.

About the Author

Jennifer L Morgan is Director, Climate and Energy Security for E3G, Third Generation Environmentalism. An American citizen, Jennifer is based in Berlin for E3G, from where she previously led the climate change programme of WWF International. In 2007 Jennifer advised the German government on climate change issues during its G8 and EU Presidencies, and she is a prominent NGO spokesperson in the UN negotiations.