All must play a part in fighting climate change

By James Baker
Published: May 7 2009 19:54

There is no question among serious thinkers that all major economies must participate in any solution to the threat of climate change. That is essential environmentally – because the challenge is a global one. It is also essential economically and politically – because no country wants to damage its economy or its citizens.
But only the US, as the world’s pre-eminent power, can spearhead the effort. For that reason, it was encouraging to hear Hillary Clinton, secretary of state, say recently that on this subject, “the United States is fully engaged and ready to lead”.
As we move forward, America must maintain a pragmatic stance. I propose a reasonable two-step approach that would make our own efforts to reduce carbon emissions part of a global plan.
First, the president and Congress should hammer out a comprehensive bill that can command a broad consensus in our body politic. It must be crafted to gain approval from both business and environmental groups as well as different regions in the country. It must also be able to withstand the test of time and inevitable shifts in the country’s political mood.
A law passed on the basis of a narrow partisan majority is not the answer. President Barack Obama should reach out to Republicans such as Senators John McCain and Dick Lugar, who appear interested in developing a bipartisan plan.
A cap-and-trade approach might work – but only if done properly. It cannot unduly burden the energy industry or electrical power consumers. For example, it should recognise the importance of coal in our energy mix and provide adequate time for the development of technology to sequester carbon from that fuel. Additionally, it should not be used to raise revenue for purposes unrelated to energy and the threat of climate change. The bill that the House is considering obviously does not meet these tests.
There remains, however, positive potential for a cap-and-trade solution based on proven market principles. In 1990, President George H.W. Bush reached across the aisle and crafted a bipartisan approach based on what then was a new idea. His proposal marked a turning point in US environmental policy. Instead of rigid regulation, he used a market-based system to reduce the pollution that causes acid rain, achieving results more quickly and cheaply than anyone predicted. It was – and remains – an innovative, centrist approach to cutting pollution.
However, any bill that Congress approves must be expressly conditioned upon successful execution by the president of the second step that I advocate: an agreement with the rest of the world. The major defect of Kyoto, and the reason the George H.W. Bush administration rightly refused to agree to it, was that big greenhouse gas emitters such as China, India, Brazil and Indonesia were excluded. They must be party to any eventual agreement.
To demonstrate to those countries the serious role the US is willing to play, it would make sense for the president and Congress to develop a domestic emissions programme but to defer implementation until a global treaty is enacted. The president’s position will be much stronger if the Congress has acted. However, it is crucial that the US does not irrevocably commit itself unless other countries respond in an acceptable and agreed way.
To increase his leverage in negotiating with other countries, the president could be given the ability to bar from our carbon market any major emitting nation that fails to join and implement a global accord. The negative trade aspects of doing that would have to be carefully thought through but the stakes are sufficiently high that it should be considered.
In addition, the president’s negotiators should work to ensure that provisions for forests, land and soil are included in any international agreement. This will not only allow American farmers to contribute (and profit from) a solution, but will also address the concerns of those who argue that deforestation accounts for as much as one-fifth of global climate change.
Last, as we address global climate change, we must continue to research it – and especially its causes – in an open-minded fashion.
The issues of energy, climate change and ultimately their effects on international stability are intertwined, and too important for Washington to either ignore or try to resolve unilaterally.
The writer, a former US secretary of state, is advisory chairman to the investment group that owns Energy Future Holdings, which controls the largest electricity producer in Texas
Copyright The Financial Times Limited 2009