Friday, January 01, 2010

Don't expect too much down Mexico way

It has been said that Copenhagen was all about attitudes and aspirations and the meeting this year in Mexico City will be about results.  But without the leadership of the US -- which accounts for 20 per cent of all greenhouse gases -- the prospects of an enforceable, verifiable and legally binding new global treaty on emissions reductions are virtually zero.

All the evidence indicates that President Barack Obama won't be able to lead the world to a post-Kyoto deal.  This is because the politics of the environment have shifted dramatically in recent months.  There are many reasons for the changing climate in Washington.  Here are four of them:

First, both Congress and the White House remain pre-occupied with other policy priorities from overhauling the healthcare and immigration systems and increasing 30,000 troops to Afghanistan to implementing new Wall Street regulations and tackling double-digit unemployment and skyrocketing debt and deficit.

Second, polls and surveys Pew, Gallup, Zogby, Rasmussen show Americans are quickly losing faith in the science of man-made climate change.  A Harris Poll found that those who believe that carbon dioxide leads to global warming have dropped from 71 per cent two years ago to only 51 per cent today.  And this poll was conducted before Climategate erupted.

It may be the case that the thousands of leaked emails and documents from the University of East Anglia's Climate Research Unit do not disprove the science of man-made global warming.  But it is also true that the uproar over allegations that some IPCC scientists manipulated data, hid inconvenient evidence and tried to silence dissenting views has led to calls for government inquiries and congressional hearings into the scandal.  After all, US tax dollars fund many climate scientists.

Third, world leaders are recognising that reaching a global consensus on climate change is even more difficult than reaching a global consensus on multilateral trade.  China and India insist they won't be part of what they see as an economic suicide pact.  In Canada, a Kyoto signatory that has increased its emissions much faster than the US, the ETS bill is stalled in legislative limbo.  In Australia, the conservative opposition parties just defeated Prime Minister Kevin Rudd's Carbon Pollution Reduction Scheme.

In the EU, cap and trade has not only been the victim of fraudulent traders; emissions from the 27 member states have increased by nearly 2 per cent since the ETS was implemented in 2005.

Copenhagen itself failed to produce a climate deal of any substance.  In this environment, the argument goes, why should the US go out on a limb and disadvantage industry?

Fourth, this year is an American election year.  A huge new energy tax that threatens to cut wages and jobs unnerves politicians facing a mid-term vote.  And not just Senate Republicans either.  "Blue Dog" Democrats from the South as well as "Brown Dog" Democrats from the Midwest and Great Plains, whose states are dependent on coal and manufacturing, are uneasy about the administration's energy policies.

Secretary of State Hillary Clinton says the US will help raise $US100 billion ($111bn) a year to defray the cost of climate-change mitigation in the developing world.  But although the idea that rich nations should pay for poor nations to adapt to non-carbon technology may be accepted wisdom at Harvard University and The New York Times, it is hardly a vote winner in middle America during a recession.  Imagine a Democrat senator from a Rust Belt state telling his coal mining constituents that they should pay higher taxes to help China become more energy efficient and more economically competitive.

Not surprisingly, nine Democrat senators recently set out the terms of their support for an emissions trading scheme, including that every other nation, especially China and India, enact and enforce carbon laws of their own.  With the failure of Copenhagen, that won't happen.

Contrary to expectations, the ETS legislation that the House of Representatives narrowly approved last June failed to pass the Senate this year.  Only 41 senate votes are required to filibuster the vote.  And now some moderate Senate Democrats are urging the White House to ditch the ETS bill this year.  At this stage, most seasoned observers in Washington think cap and trade is dead.

The administration does have one card up its sleeve:  the Environmental Protection Agency.  It could override Congress and impose taxes and regulation across the entire economy under clean-air laws.  But such action would almost certainly be tied up in litigation for years.

Having struggled to get his landmark healthcare plan through Congress, Obama faces an uphill battle in trying to enact his energy and climate policy.  If he fails at home, then expect another debacle and more disappointment at this year's climate change conference in Mexico City.


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