On Tuesday, March 31, the German Marshall Fund of the United States (GMF) hosted a discussion on clean industrial transformation and the prospects for reaching agreement on a new international climate treaty at the fifteenth Conference of the Parties (COP15) in Copenhagen in December 2009. The event featured Maud Olofsson, minister for enterprise & energy and deputy prime minister of Sweden, and Jonathan Lash, the president of the World Resources Institute. Cathleen Kelly, Director of GMF's Climate & Energy Program, moderated.

Maud Olofsson and Jonathan Lash discuss COP15
 

Ms. Olofsson discussed Sweden's ambitious plans to reduce carbon emissions and comply with the new EU climate and energy package. Sweden's goal is to become completely independent of fossil fuels by 2030. To achieve this, Sweden will increase financing for research and development, increase fuel economy and energy efficiency standards in the building and transport sectors, impose steep taxes on carbon emissions, provide tax incentives for renewables, and increase the use of biofuels for transport. Sweden hopes to set the example that reducing emissions causing climate change provides an opportunity for economic growth. Sweden will hold the EU Presidency for the second half of 2009 under the theme of a "transition to an eco-efficient economy". The COP15 climate negotiations will take place in Copenhagen in December during the Swedish presidency, and the country has high expectations for achieving a strong global climate agreement in Copenhagen. Europe views President Obama as a positive signal that the United States will actively and constructively participate in the negotiations.

Jonathan Lash provided insights on the climate policy debate from the U.S. perspective. He expressed concerned that the current short-term remedies for the economic crises were eclipsing the urgent measures needed to prevent the long term impacts of climate change. Like Ms. Olofsson, Mr. Lash hoped that leading economies will see climate change as an opportunity to spur economic growth, not stifle it. The United States will play a make-or-break role at the UNFCCC climate negotiations in Copenhagen this December and it will be critical for the U.S. to assert a leadership role during the negotiations in order for emerging economies like China and India to constructively engage. Mr. Lash was optimistic about the position the United States will take at COP15 as President Obama has been unequivocal in his commitment to addressing global warming. U.S. businesses are starting to take an active role in shaping climate legislation and several Members of Congress in the House are taking the lead in drafting climate legislation. However, Mr. Lash feared that cross-border competition and the prospect of border tax adjustments on countries like China, which is often characterized as having less robust climate commitments, would hinder progress in securing an international climate treaty.

Participants discussed the political and financial challenges of getting emerging economies, notably China, to take meaningful action in reducing carbon emissions. Mr. Lash suggested that a bilateral agreement between the United States and China was the best way to ensure success, so it will be critical for the United States to take the first step in this process. The discussion also focused on the Congressional hurdles for passing U.S. climate policy and ratifying an international climate treaty. It will be nearly impossible for climate legislation to pass under Obama's plan of 100% auctioning of allowances. Coal intensive states will demand assistance in transitioning to a lower carbon economy. Historically, the Senate rarely ratifies international treaties (even though the few treaties that have been signed in the past 40 years have been environmental) and getting to the 67 votes will be difficult.