Climate Policy: A Sign of the Times?

Two contrasting news items yesterday gave an important snapshot of climate policy in the world’s two largest economies.  

The Times of India reported that China’s Five-Year Plan for 2011–2015 will include a domestic cap-and-trade program, as the country seeks to reduce the carbon intensity of its economy 40 percent by 2020 compared to 2005 levels.

At the same time, leaders in the U.S. Senate acknowledged that they will scrap plans, at least for now, to pass a comprehensive energy bill—a bill that mandates a cap on carbon—because they cannot find the 60 votes needed to pass such a bill.

The contrasting announcements can’t help but solidify the growing reputation of China as a bold advocate of  low-carbon technologies and policies, and of the United States as a laggard in adopting policies with strong potential to reduce greenhouse gases.

The U.S. failure is still more tragic if, as former Clinton White House Director of Communications Joe Lockhart argues, a settled U.S. climate policy would unleash investment from U.S. companies at a critical time: just as U.S. government stimulus spending comes to an end. (Hat tip to Chris Fox of CERES.) Companies concerned about how new legislation or regulations would affect them are reportedly sitting on capital—Lockhart says it’s $1.5 trillion—stalling job creation when they could be a critical and ongoing source of economic stimulus.

The opportunity for a win-win for the United States—a stimulus that helps stabilize the climate—is instead being lost to protect parochial interests, particularly of senators from coal-producing states.   Increasingly, and ironically, the U.S. may need to look across the Pacific for lessons in global leadership. Is this the global future?

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