European and American climate policies after Bali
On January 21, GMF, in cooperation with Deutsche BP, hosted a conference in Berlin to discuss "European and American climate policies after Bali." The keynote speakers were Dr. Harlan Watson, the senior climate negotiator for the United States at the Climate Change Conference in Bali, and Franzjosef Schafhausen, deputy director general for environment and energy at the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Other speakers included Bill Hare, a fellow at the Potsdam Institute for Climate Impact Research (PIK), Jennifer L. Morgan, director of the climate change program at World Wildlife Fund International (WWF), and Dr. Lutz von Meyerinck, director for environment and climate protection at Deutsche BP AG. The discussion was moderated by Thomas Kleine-Brockhoff, GMF's senior director for policy programs.
In his speech, Dr. Watson laid out the key pillars of the current U.S. administration's energy policy, including mandates, incentives, partnerships and technology. He mentioned important climate policy efforts at the regional and state level, such as the State Climate Action Plans and state-level greenhouse gas emission targets, and discussed current congressional climate policy proposals. He cautioned that even the most aggressive proposals would only get emissions levels in the United States back to 1990 levels by 2020, while Europe is committed to levels that are 20 percent below 1990 levels. Lastly, he mentioned a U.S. proposal that would cut tariff and non-tariff trade barriers for clean energy goods and services entirely.
In regard to international negotiations Dr. Watson warned that the United States could not make an international commitment that they could not deliver at home. Any commitment would have to be ratified through Congress, which would be challenging. Dr. Watson was critical as to whether an emissions trading system could drive technological innovation and argued that such a system could further increase energy prices in the United States.
When asked about the links between the trade rules and the climate change regimes, Dr. Watson argued that it was crucial to bring the WTO Doha Round to a successful conclusion and that this conclusion would have to include provisions on a preferential treatment of environmental goods and services (EGS). Dr. Watson also discussed potential future policy measures against carbon-embedded imports, an issue that was included in the recently proposed so-called Warner-Lieberman bill.
Franzjosef Schafhausen from the German Federal Ministry for the Environment emphasized that the Bali climate meetings were successful in defining goals and a global roadmap to counter climate change. Mr. Schafhausen argued that CO2 markets and an emissions trading system after 2013 were the most important issues at hand. He also mentioned adaptation and deforestation policies as the significant new policy areas that came out of the Bali meetings. He warned that the timeline to come to binding agreements by the end of 2009, when the Copenhagen COP will take place, will be very ambitious.
According to Mr. Schafhausen, German greenhouse gas emissions have already been reduced to 18 percent below 1990 levels. Germany is currently aiming at a 40 percent reduction compared to 1990 levels. He stated that the benefits of carbon emissions reductions can be higher than its costs and he cited a McKinsey study that supported this notion. He disagreed with Watson's assessment that emissions trading would not support increased technological innovation; Schafhausen said he was convinced that CO2 markets will be a technology driver. However, both agreed that a cap and trade system would only be one tool in the toolkit of combating climate change.
Lastly, Schafhausen emphasized that the United States and Canada would have to be part of any viable global climate regime. When asked how to bridge the gap between European and U.S. climate policies, Schafhausen suggested to emphasize energy security and energy prices, issues that are of vital importance to both the United States and the EU.
Bill Hare from the Potsdam Institute for Climate Impact Research mentioned how there was a tectonic shift of the climate policy scenario in Bali where developing countries were on board with ambitious climate policy goals and China emerged as a leader within the group of emerging and developing countries. This put pressure on the United States. Hare emphasized that it will be the developing countries, Africa first and foremost, that will suffer most from climate change while having the lowest adaptation capacity.
Jennifer Morgan from WWF agreed with Hare that the Bali meetings proved that China, Brazil, South Africa, and India were ready to negotiate. She emphasized how the U.S. room for maneuverability was small but she expressed her optimism that the next U.S. administration will take on climate change as a topic for a revived global U.S. leadership role. Morgan argued that two issues that were not sufficiently discussed so far were how to finance adaptation and how to integrate climate change policies and the global trading system under the WTO.
Following the presentations, the audience of government, think tank, and private sector representatives had the opportunity to ask questions and further discuss climate policies after Bali. The discussion centered on whether the United Nations system was the best home for climate policies, and how the European Union wanted to deal with the eleven EU member countries that still increased, not decreased their CO2 emissions.