The ultimate success of any domestic legislation addressing climate change rests on reaching an international agreement that limits greenhouse gas emissions from all major emitting nations. No matter how stringent or costly the requirements of the H.R. 2454 (commonly known as the Waxman-Markey energy bill), this legislation will have only a trivial effect on greenhouse gas concentrations and global temperatures out to the year 2100 and beyond unless there are significant corresponding national actions to limit greenhouse gases by all the major emitting nations—including China and India.
Over the next four months leading up to the December meeting in Copenhagen, the U.S. and the other major-emitting nations will work to fashion an international agreement limiting greenhouse gas emissions. These negotiations are going to be very difficult—the stakes for each of the nations involved are huge. An agreement unfavorable to any of the countries involved could have a profound effect on that country’s economic growth and development as well as the economic well-being of its citizens.
The discussions at the recent G-8 Summit reflect the tensions associated with this negotiation. Several members of the European Union, China, and India have expressed the view that the U.S. should commit to even larger reductions in greenhouse gases (GHGs) than required by the first phase of Waxman-Markey. In addition, the leaders of the world’s largest economies, including President Obama, recently agreed to an aspirational goal of reducing their carbon emissions by 80 percent by 2050. Finally, the U.S. position—and that of the other developed countries—is that China and other developing countries need to take significant national actions to limit their greenhouse gas emissions in the context of an international agreement. In a show of good faith, Chinese officials signed a memorandum of understanding with the U.S. this week, committing to cooperation on climate. Still, China and India are concerned that they will end up with an unfair share of the reductions burden.
This highlights the importance of carefully considering our international negotiating posture as we develop domestic legislation to address climate change. Given the difficulty of reaching an international, multilateral agreement, is it to the advantage of the United States to have adopted unilaterally domestic legislation requiring specific annual reductions in GHG emissions to reach a required 83 percent reduction by 2050? In my view, Congress should incorporate in any climate change legislation an amendment that would provide an off ramp from any more stringent requirements for GHG emissions beyond those required by 2020. This amendment would require the president to certify that all of the major emitting nations have reached an international agreement assuring significant corresponding national actions to limit their greenhouse gas emissions and submit the agreement for congressional action.
Any further reductions beyond the phase 1 reductions—like the 83 percent reduction by 2050 as required by phase 2 of Waxman-Markey—would be contingent on specific congressional action accepting the international agreement. This amendment would set up an incremental, iterative process in which the U.S. would make an initial cut upfront in its GHG emissions by 2020, but condition any further action to limit GHG emissions on an agreement by the other major emitting nations to make meaningful, long-term reductions in their GHG emissions.
Supporters of the current House bill argue that its provisions—additional allowances for energy intensive industries and tariffs on imports from countries that fail to address greenhouse gas emissions—provide sufficient protection to the U.S. economy. However, additional allowances only provide assistance to a select set of industries and do little to protect the economy as a whole. Moreover, President Obama has already expressed concerns with the tariff provision in the bill because of the protectionist signals it sends out and said he hopes that Congress will strike that language.
Finally, these provisions offer only a Band-Aid of protection to the U.S. economy. They fail to address the fundamental fact that the U.S. willonly realize any climate change benefits from the tens of billions in expenditures required by this legislation ifall of the major emitting nations take corresponding actions to limit their greenhouse gas emissions.
By establishing the principles and objectives for the U.S. negotiation of an international climate change agreement, this proposed amendment would assure a full public and transparent discussion of what the U.S. expects to get in such an agreement and a public understanding of what is at stake in undertaking the extraordinary measures required by the current legislation.
Any such action—taken either unilaterally through domestic legislation or through an international climate change agreement—will impose tens of billions of dollars in costs and involve a substantial wealth transfer from the U.S. to other nations. Only an international agreement will assure that the U.S. will realize any significant benefits from its effort to address climate change.
