When compromise costs too much

Bringing the US back on side is an urgent priority for anyone who considers climate change to be a serious problem. But Jeff Fiedler warns against conceding too much ground – especially as the US domestic political debate evolves

If the White House spin doctors were be to believed, President Bush�s February visit to Europe was designed to mend transatlantic fences � and not least on climate change. The reality was a disappointing agreement with Germany to work on technology fixes, and no indication that the Bush administration is moving any closer to accepting mandatory caps on greenhouse gas (GHG) emissions, either at home or abroad.

President Bush and Chancellor Schroeder: all smiles, but little to cheer environmentalists in their climate change agreement

This administration�s opposition to such caps � as evidenced by its continued dismissal of the Kyoto Protocol � presents a profound strategic problem for those in other countries attempting to make progress on global warming. The US is still the world�s biggest emitter and, while emissions reduction leadership by other nations is extraordinarily important, global warming cannot be curbed unless the US ultimately pulls its weight. As such, serious efforts are under way, not least by UK prime minister Tony Blair, to encourage the US to take meaningful action on climate change.

Optimists see signs in Congress and at the state level that the US will, in time, make the political decisions to adopt effective domestic policies and re-engage internationally. These domestic policies will almost certainly be centred on a national emissions cap and emissions trading.

In dealing with the US �800-pound gorilla�, then, other countries should avoid fixating on short-term obstacles, and instead look realistically at where the US will go down the road. In this regard, it would be a strategic mistake to jettison the Kyoto architecture post-2012 in favour of much less effective agreements tailored to short-term US views.

Despite substantial obstacles to real action remaining, Congress is engaging in a lively and substantive debate, with a growing number of elected voices, from both political parties, realising that the US must act. And credible domestic policies can be passed in a timeframe compatible with the post-2012 agenda.

For example, the proposal from Senators John McCain and Joe Lieberman for a GHG �cap-and-trade� scheme continues to frame the policy debate in the US over mandatory policies. In re-introducing the bill on 10 February, McCain and Lieberman announced their intention to seek a second Senate vote this Congress, following the bill�s 55 to 43 vote defeat in October 2003. A companion bill in the House of Representatives has also been introduced this year, with 13 Republican cosponsors alongside 13 Democrat supporters.

Several elements of this bill are worth emphasising. It is, in many ways, more ambitious than the EU Emissions Trading Scheme (ETS), covering as it does roughly 80% of total US GHG emissions, including the entire transportation fuel sector � while the EU ETS scheme covers 40% of the bloc�s emissions of carbon dioxide (CO₂), and leaves out transport altogether. Debate over the targets and allocations makes it closer to the ongoing debate in EU countries about their �national allocation plans� for 2005�07 � which set the actual targets that companies face under the scheme � than to the initial political agreement on the ETS design. Congressional discussions are focused on detailed assessments of the bill�s effects on key political constituencies. The core of the bill is a cap-and-trade policy, but it also includes numerous technology-incentive provisions.

New voices continue to come forward from across the political spectrum, indicating that action on global warming is becoming politically important. Senator Chuck Hagel, a conservative Republican from Nebraska, recently introduced three bills focused on deploying climate technologies domestically and internationally, although he still rejects emission caps. Previously, Senator Hagel was most associated with the 1997 Byrd�Hagel resolution opposing the Kyoto Protocol. Hagel is thought to be planning a presidential bid in 2008, and his bills are part of an attempt to distance himself from President Bush, whose climate policy he has characterised as �irresponsible�. His rejection of mandatory caps also puts some clear water between his proposals and those of McCain, who is also tipped to run in 2008.

Further, an administration bill on power plant pollution � Bush�s Clear Skies legislation � is bottled up, in part, because at least half the Senate Environment Committee�s members don�t agree to its exclusion of controls on CO₂. Global warming policies will also surface in debate over proposed bills on energy and oil security. In December 2004, the National Commission on Energy Policy, a blue-ribbon bipartisan panel, proposed a mandatory cap-and-trade scheme � framed partly in terms of energy security � and this continues to attract attention in Congressional debates.

Trends outside the Beltway are also moving in the right direction. States on the east and west coasts are introducing mandatory caps on CO₂ from power plants and emission limits for vehicles. Lawsuits, shareholder action and statements by local elected officials are adding to pressure for a coherent federal response. More and more business leaders openly state the inevitability of carbon regulation.

New scientific findings, especially on local and regional impacts, are grabbing attention. Senators Ted Stevens and Lisa Murkowski, Republicans from Alaska, have both expressed concerns over the impacts of warming on the Arctic. Senator Stevens described global warming as a matter of �conscience� and said he would consider the McCain�Lieberman bill � a big shift in his previous position.

Last but not least, the entry into force of the Kyoto Protocol, the launch of the EU ETS in January and other Kyoto-driven domestic policies abroad are attracting considerable attention in the US. They offer examples of political will and practical policies. Many in Congress are concerned that US businesses may be missing out on opportunities for new markets or failing to prepare themselves for a carbon-constrained world.

Blanket opposition to mandatory caps or significant technology deployment policies places the Bush administration at one end of the spectrum of views on climate change within the US. But US domestic policy almost certainly will eventually include a cap-and-trade approach, most likely accompanied by complementary policies to speed the development and deployment of key technologies. These policies are also likely to include some international linkages.

At the same time, the road ahead will be difficult and long. Both the Senate and the House remain deeply divided. The House of Representatives, in particular, is more partisan and less advanced in its deliberations. Nevertheless, political will is growing and federal action on global warming is within sight.

This leaves the difficult strategic question of how other countries should engage the US, both for post-2012 policies and in terms of shorter-term co-operation.

For post-2012 negotiations, there are three basic options, two of which won�t work. First, countries could attempt to negotiate with the US based on the Bush administration�s current position. This would be futile or would lead to an agreement too weak to be effective. Consider whether, with a blank slate, one could reach agreement with this administration on language even as strong as the non-binding reduction commitments in the 1992 Framework Convention on Climate Change, to which the US remains a signatory. It would be foolish to enter into a negotiation where the outcome is likely to be weaker than the status quo.

A second approach is to wait until US domestic political will shifts, or perhaps until a new administration comes to power. Given the timing of negotiating the post-2012 agreement and the urgency of the issue, this delay is unacceptable. Simply waiting risks losing all momentum and would squander precious time in addressing the climate problem. A failure to start post-2012 discussions promptly would also create uncertainty among businesses just now adjusting to the binding limits of the Kyoto Protocol. And carbon markets could be disrupted, as without demand created by GHG controls after 2012, longer-term reductions could have little or no value.

The third option is to start negotiating a post-2012 agreement that builds on the core of the Kyoto architecture, even if the US declines to engage. The architecture of binding limits and emissions trading is both effective and compatible with where the US will be when it eventually re-engages. A clear statement of intent to implement existing Kyoto commitments and continue this approach beyond 2012 will set a strong political example for the US.

Granted, there are difficulties negotiating around a table where one of the biggest chairs is empty. Nevertheless, other approaches risk great setbacks. Paradoxically, the best way to draw the US back into an effective global agreement is to avoid engaging on the current administration's terms. This requires taking a longer-term view of where the US will be, rather than focusing on the short-term constraints of the current administration and Congress.

That being said, efforts to engage the US in the short term are going to occur, starting with the July summit of the G8 – chaired by the UK, which has put climate change at the top of the agenda. Here are some guidelines for that and other near-term efforts:

� Do no harm. Statements, agreed texts and new initiatives should avoid any retrenchment on the need for binding national limits. Other approaches (which are likely to be all that the US will agree to by July) must be framed as complementary to binding limits, not as alternatives. Lending credibility to a weak technology-based approach will delay progress towards effective policies in the US. Better to acknowledge policy differences diplomatically than to bend over backwards to accommodate the US.

� Establish clear criteria for technology approaches. Global warming is a large, urgent problem. Technology programmes have a valid role to play, but they must have clear goals and commitments that are of sufficient scale and will occur in the necessary timeframe.

� US involvement in efforts to tackle climate change is vital. But engaging with the current administration on its own terms would not lead to an effective global agreement. There may well be useful interim discussions and agreements with the US in the short term, but these should not distract from the long-term view. Only by demonstrating political will for a post-2012 agreement, building on the success of Kyoto, can we bring the US back into the global warming "coalition of the willing".

Jeff Fiedler is a climate policy specialist at the Natural Resources Defense Council, a Washington DC-based non-governmental organisation. E-mail: jfiedler@nrdc.org