The Obama administration has shifted from its original, unconditional stand of technology transfer to one based on “innovation” and “investment” in clean energy to favour western companies.
Last week, United States President Barack Obama laid out his administration’s first blueprint on the domestic and international initiatives it will pursue to tackle climate change. As with most speeches of the Obama presidency, this too was based on the catchy rhetoric of humanism, but driven by the narrative of instrumentalism. This style-over-substance approach to climate change, intended primarily for a U.S.-based audience – and by initial reaction, well-received across the board – would have been palatable had it not been for the troubling implications it holds for both multilateral climate change negotiations and the economic policies of developing countries, India in particular. Mr. Obama’s speech effectively allows developed countries to abandon their end of the equity bargain – i.e. to provide technology transfer and financial support to developing and Least Developed Countries (LDCs) – in return for their promise of sustainable growth. The discourse has now turned to market-oriented approaches to foreign investment and de-regulation that emerging economies must welcome to “green” their development, if they want to be seen as responsible stakeholders.
Mr. Obama’s line has its genesis in the United States’s promise, made right before the 2009 Copenhagen climate conference, to reduce carbon emissions to 17 per cent below 2005 levels by 2020, 42 per cent by 2030 and 83 per cent by 2050. Despite talk of elevating climate change to a “legacy” issue for the President, the last two timelines have been conveniently omitted. His commitment to reaffirm the 2020 deadline is a hollow one — by most estimates, an emissions reduction of 17 per cent from 2005 levels is equivalent to a 4-6 per cent reduction from levels that persisted in 1990. On the other hand, the Kyoto Protocol, which the U.S. has not ratified, requires industrialised countries to reduce, by 2020, their greenhouse gas emissions by 18 per cent below 1990 levels. Here’s the catch: U.S. emissions had already neared 1990 levels last year, thanks to the country’s ongoing shale gas revolution. Put two and two together, what President Obama promised this week is merely a 6 per cent reduction in U.S. emissions from current levels.
The proposal to regulate carbon emissions from power plants (that run on conventional fossil fuel) has been billed as another crown jewel in Mr. Obama’s speech. First, these, if at all formulated, will be federal limits imposed by the U.S. Environmental Protection Agency. Each State in the U.S. is free to ‘opt out’ from their implementation; some no doubt will, given enormous pressure from their coal and steel lobbies. Second, as Jennifer Dlouhy observes at the FuelFix blog, regulations on power plants will not automatically extend to oil refineries. Apart from asking the U.S. Congress to reduce tax incentives for Big Oil — certain not to ruffle their account books — Mr. Obama is deafeningly silent on the industry’s responsibility towards the environment. Third, regulations imposed on coal-based power plants coincide with a greater reliance on shale gas in the U.S. Shale gas use would lead to lower carbon emissions, but only if it is regulated. This is currently not the case: the U.K. based Tyndall Centre for Climate Research, for instance, argues that “without a meaningful cap on global carbon emissions, the exploitation of shale gas reserves is likely to increase total emissions.” If President Obama has shut the gate on coal usage, he has in effect left the back door wide open for energy-intensive industries to operate without effecting systemic changes in their consumption.
While Mr. Obama has announced a number of tepid measures that will somehow kickstart green growth in the U.S., his administration has been engaged in an unprecedented proselytising mission in emerging markets, preaching the need to reduce emissions. To gather support for its current approach, Washington has gone on a diplomatic overdrive with China, Japan, India and other major emitters. Ahead of the recently concluded U.S.-India Strategic Dialogue in New Delhi, Secretary of State John Kerry warned India “to heed Mother Nature’s warnings”, in a pointed reference to the devastating floods in Uttarakhand. His thrust was simple: encourage “innovation” and “investment” in clean energy technology to reduce reliance on fossil fuels. These buzzwords have now been institutionalised through the setting up of a U.S.-India working group on climate change.
If the U.S. government has done little by itself to confront the imminent dangers of climate change, why is it aggressively pushing the case for non-conventional and renewable sources of energy in emerging markets? Shifting the spotlight away from immediate carbon cuts to long-term solutions like “clean energy” provides the West with a legal-moral basis to ask developing countries to further open up their economies, with sufficient latitude to make the transition itself. In fact, the success of the U.S. clean energy sector is contingent on how well American companies perform in lucrative markets like India.
The renewable energy sector in India alone is worth billions of dollars, if the forecasts of global consulting firms are to be believed. High financing costs, stringent government regulations and widespread public scepticism on the efficacy of solar and wind power have stunted the growth of the Indian domestic sector. For American ‘green companies’ armed with subsidies and tax breaks, dominating this market will be a walk in the park. All they need to do is to hope that the Indian government continues its foot-dragging renewable energy policy — one that currently permits 100 per cent FDI with little regulatory guidance — while pressing for tougher intellectual property laws bilaterally, in line with the ‘TRIPS-plus’ vision. New Delhi has thus far held out on restrictive IP laws, but faced with the threat of harsher immigration rules and limits on Indian exports, concessions on this front may be a matter of time. Moreover, the U.S. has a powerful carrot in the form of shale gas exports, which India has eyed keenly.
Death knell for equity
Above all, U.S. attempts to tackle climate change on a bilateral basis sounds the death knell for the principle of equity in international climate talks. In the run-up to the Paris conference in 2015, most developing countries have made it amply clear that any multilateral agreement must address the issue of technology transfer and funding. The U.S., opposed to such preferential treatment, has fired the first shot with President Obama calling for an “inclusive” climate deal. His administration has cleverly shifted the goalposts of technology transfer, from its original, unconditional premise to one based on “innovation” and “investment” in clean energy, which invariably skews the market in favour of western companies. This has now been packaged as part of a larger initiative by the Obama administration to warn India and others about the dangers of climate change. With powerful tools of negotiation at its disposal, the Obama administration would much rather talk to major emitters individually than confront the combined might of the BASIC (Brazil, South Africa, India and China) group. The U.S. can thus secure its end of the 2015 climate deal with regard to flexible emission cuts, while shedding its reputation of a ‘climate-rebel’ insensitive to the concerns of developing countries — the diplomatic equivalent of having its cake and eating it too.
From New Delhi’s perspective, President Obama’s new approach should be conclusive proof that India and the United States are on different pages with regard to climate change. Not only has the U.S. talked past the demands of developing countries on equitable measures, it is also willing to harvest the issue’s moral significance for its narrow economic interests. For advocates of a values-based “natural” alliance between both countries, few examples stand out so starkly as to how interests trump principles.