A green call to arms

To jump-start the green economy, Obama should encourage co-operation between US and Chinese businesses

Joshua Wickerham
guardian.co.uk, Saturday 14 November 2009 17.00 GMT

Barack Obama can use his inaugural China visit to jump-start the transformation to a global low-carbon economy. The US and China must both cut carbon emissions as quickly as possible, but business-sector action remains overlooked in deepening the relationship between both countries and securing fast low-carbon growth. Obama should call on American and Chinese companies, with partners in Europe and elsewhere, to step up the development of market mechanisms and sound policies that reward low-carbon investments.
With outcomes at the UN Copenhagen climate change conference increasingly uncertain, setting bilateral, regional and sector strategies is crucial. Calls from Obama to increase technical co-operation could accelerate low-carbon preparedness and reduce fears that either side will be disadvantaged in coming low-carbon markets. Obama needs to reassure Chinese leaders hovering over 25% of US foreign debt that the US will make necessary domestic changes without retreating into protectionism.
Obama also needs to convince Americans that China is part of the solution and that only further partnership will ensure common prosperity. China has committed vast political, social and business resources to promoting the technology and "corporate social responsibility" agenda that will underpin low-carbon markets. It is scaling up company use of international sustainability standards and reporting techniques, increasing investments in green laboratories and issuing laws and guidelines that spur companies to "compete up" for recognition in setting and meeting common environmental goals. China now produces more electric vehicles, solar panels and renewable energy than any other country, but, like the US, still depends heavily on dirty coal. China and the US should pursue opportunities for joint research and sharing intellectual property.
Time is running out on a global climate deal. If Obama takes a "business as usual" approach in Beijing, it will seem out of step. His state visit comes just two weeks before the EU-China business summit, which is supported by the EU presidency and the Chinese state, and is the last major state-level summit before Copenhagen to focus entirely on the green business agenda. With landmark support from the Swedish ministry of foreign affairs and the Chinese ministry of commerce, global non-profit research organisation AccountAbility, with Chinese partner WTO Tribune, will present findings from a joint report on responsible competitiveness in China. This report suggests that China is becoming a major enforcer of intellectual property, that its companies are "doing more and saying less" on low-carbon – in short, that Chinese businesses are well on their way to a green transformation, but cannot do so alone.
Obama's key messages in Beijing should not ignore governments or citizens, but should target corporate leaders. He should encourage corporations to invest more in efforts like IBM's collaborative laboratories programme, GM's Shanghai partnerships, China's new $1.5bn Texas wind farm and Warrant Buffet's stake in automaker BYD. Companies should increase mutual learning and engagement with local stakeholders. They can improve the transparency and accountability of their environmental governance systems, critical while operating internationally under varying local legal settings, economic demands and social expectations. While universal action is unlikely, unilateral action is insufficient.
This is Obama's chance to gear up a low-carbon economy that ensures decades of common prosperity between emerging markets, established players and a stronger China. In addition to improving prospects of a global deal in Copenhagen, Obama's business call to arms should lead to concrete action. Obama can ensure that the next Sino-US strategic economic dialogue is more than a discussion about exchange rates and trade policy, but a true platform for companies and officials, including wider stakeholders, to set the collaborative rules for jump-starting the economy and saving the planet.