Leading On Climate Change
The climate change bill that senators are to begin debating next week is a hugely important signal of intent on behalf of U.S. legislators. Yes, negotiations could still alter the legislation. But the bill's core proposition is correct: Unless the United States radically reduces its greenhouse gas emissions, along with other major emitters, the damage to the climate will be irreversible.
Radical reduction is unlikely to happen through voluntary action alone. Measures in the bill, through a mandatory cap-and-trade scheme, would reduce emissions 70 percent from 2005 levels by 2050. These cuts would be based on a carbon market incentive system that moves with the grain of action around the globe.
Over the past few years, the debate on climate change has shifted profoundly. The scientific consensus that human activity is causing global warming has become overwhelming. The effect of unabated climate change is shocking and, as was shown by the report of Sir Nicholas Stern -- the first authoritative study of the economics of climate change, commissioned by the British government in 2006 -- it is far riskier economically to ignore climate change than to act to abate it.
New environmental technologies, in fact, already drive a multibillion-dollar industry. Last year, an estimated $148 billion was invested in clean-energy technologies, companies and projects, a 60 percent increase from 2006.
Round the planet, people are developing exciting technologies, changing their behavior and agitating for action so that responsibility on the environment will come in a way that is consistent with necessary economic growth.
Meanwhile, fears over energy security create a synergy with the climate debate. With oil above $130 a barrel, there are reasons to act irrespective of concern for the atmosphere. Reducing carbon dependency also goes to the heart of our basic security needs for the future. I have long thought that energy policy is only a small way behind defense in terms of strategic importance to our way of life.
Much is happening abroad. Europe has introduced the Emissions Trading System, with over half of emissions now tradable; despite the early teething troubles to be expected from any new policy framework, the system is delivering emissions reductions and sending a clear, market-based signal to companies across the continent. Japan has indicated that it is open to a binding national target. China has already set new energy intensity targets. India is to unveil its first national climate action plan in the next few weeks.
Israel recently announced support for a project that aims to add 100,000 electric cars to its roads by the end of 2010, providing tax incentives that will make those cars cheaper than gas-powered cars as a first step toward moving completely to electric.
The Group of Eight major industrialized nations will have climate change high on their agenda at their July meeting. At the same time, President Bush will hold the Major Economies Meeting.
The Clean Development Mechanism, while also by no means perfect, has established a basis for channeling resources efficiently to finance emissions reduction across the developing world.
Clearly, many countries and companies are realizing that, far from being a detriment to their economies, acting early to cut emissions can increase productivity and give them a competitive edge. And it's not just outside the United States: A majority of U.S. states have climate action plans, and many American cities are already working toward emissions reductions.
Hanging over all of this progress, however, is a political reality: There will be no consequential action on climate change unless there is a global deal. For that to happen, the United States has to lead to ensure that we have an effective agreement in which China and India take part.