Transatlantic divide remains ahead of UN climate summit[de] 

US senior advisor for the environment to the White House, James L. Connaughton, put it in a nutshell: "The issue today is not whether we should take action [on climate change] but how."

United States strategy

Speaking on 21 November at the Centre for European Policy Studies (CEPS) in Brussels, Connaughton reiterated that energy supply security remains the top priority of President George W. Bush's climate change policy. The strategy places the onus on technology to reduce the greenhouse gas intensity (a reduction of emissions per unit of economic activity) of the US economy by 18% for the period 2002-2012. The strategy is aimed at 'pushing' the technologies onto US and international markets via: 

• an ambitious programme to improve climate change science (around $2 bn a year) and technologies (around $3 bn a year), including: 
• • clean coal through CO2 capture and storage deep underground
  • renewable energy tax incentives and tax credits for hybrid vehicles and clean diesel
  • hydrogen fuel initiative
  • nuclear power 2010 programme
• bilateral accords with other countries or regions to reduce greenhouse gas emissions, mainly through technology transfers. This includes: 
• • the Asia-Pacific Partnership on Clean Development signed in July between the US, China, India, Australia, Japan and South Korea (EurActiv, 28 July 2005)
  • the G8 action plan adopted at Gleneagles (EurActiv, 8 July 2005)
  • other international technology partnerships (Methane to Markets Partnership, Carbon Sequestration Leadership Forum, International Partnership for the Hydrogen Economy, and others.) 

Connaughton insisted the strategy is aimed at achieving reductions without hampering economic growth or by shifting emissions away from the US through delocalisation of industries to other countries. However, he admitted that reducing energy intensity will not prevent US emissions from rising, at least in the medium term.

European Union strategy

On the other side of the spectrum, the EU has embarked upon a strategy based on binding greenhouse gas reduction targets agreed under the Kyoto Protocol. It has put in place the world's first international CO2 emissions trading scheme which allows big industrial plants to trade CO2 pollution permits on an EU-wide market for carbon. The scheme is aimed at 'pulling' cleaner technologies by encouraging industry to turn green investments into a profit through a market mechanism.

The Commission argues emissions' trading is the cheapest way of encouraging companies to adopt new technologies. It recently estimated that cutting CO2 emissions annually by about 1.5% would reduce the EU economic output by 0.5% by the year 2025 compared to business as usual. 

The EU's 'market pull' approach should later be complemented by a 'technology push' one with the second phase of European Climate Change Programme (EurActiv, 24 Oct. 2005). According to the Commission, the new programme should provide "a strong push for innovation" in climate-friendly technologies and for "the inclusion of all emitting sectors, such as aviation, shipping and road transport". Emissions trading will continue to be the main instrument to achieve emissions reductions, it said. The programme will be finalised in the course of 2006.

On the international scene, the EU is also fostering bilateral cooperation to push technologies through agreements with other major economies:

• the EU-China clean energy partnership which aims to develop 'zero-emissions' coal technology" by 2020 through carbon sequestration and to step up cooperation in other key areas (EurActiv, 5 Sept. 2005) 
• The G8 action plan adopted at Gleneagles (EurActiv, 8 July 2005)

However, in this race to push new technologies, it remains to be seen whether the tiny EU budget and scattered national research programmes can compete with the massive, result-oriented R&D projects developed by US. A good illustration of this is the Commission's continued inability to tell accurately how much R&D spending (both at EU and member states level) is earmarked for climate-friendly technologies.

In a speech on 21 November, EU Environment Commissioner Stavros Dimas said new technologies will be "indispensable to master the shift to a low-carbon economy". But he pointed out that "there is a big difference between a government-funded demonstration project and a commercially viable mass-marketed product" that the EU-ETS provides. 

Speaking on 21 November, US senior advisor for the environment to the White House, James L. Connaughton, insisted on economic growth as vital to success in reducing emissions. "Only economic growth provides the resources for investment in the next generation of cleaner, more efficient technologies," Connaughton said. "We oppose any policy that would achieve reductions by putting Americans out of work, or simply by shifting emissions" away from the US to other countries. "Like us, developing countries are unlikely to join in approaches that foreclose their own economic growth and development," he said in reference to China.

The Paris-based International Energy Agency (IEA) said it believed emissions trading "will remain at the core of any future international agreement to combat climate change". In a study released on 24 November, the IEA recognises the EU-ETS "pioneering role" but highlights the scheme's shortcomings including short-term emission objectives and lack of strategy in case of plant closures. It says a future international emissions trading system could be based on:

• targets indexed to economic growth
• a cap on the price of traded carbon
• non-binding emissions targets 

In its recent 2005 World Energy Outlook, the IEA forecasted a 50% surge in global energy demand and a related 52% rise in energy-related CO2 emissions by 2030 (EurActiv, 8 Nov. 2005).

In a recent paper by the Centre for European Policy Studies (CEPS), Christian Egenhofer contrasts US and EU approaches to climate change mitigation in a post-Kyoto context. The paper says that he US 'technology push' versus the EU 'market pull' approaches can be explained by their respective energy supply situation. In the EU, signing up to binding emissions reduction targets was made achievable in the short-term by the availability of large gas supplies from Russia at an affordable cost. In the US, the share of CO2-intensive coal is expected to remain high because no other alternatives are readily available. 

Hence the US drive for pushing technologies before making any commitment. "The EU also needs a greater focus on technology," says Egenhofer. "In order to foster the convergence of views, additional conditions need to be fulfilled in both the EU and the US".