Obama Issues Climate Change Policies at U.N. Summit - What Will be the Response?

“An effective [Climate Change] policy must be global in scope. Earlier treaties
(such as the Kyoto Protocol) were ineffective because they provided no incentives
to encourage participation. Countries have strong incentives to free ride on the efforts of others because emissions reductions are local and costly while the benefits are diffuse
and distant over space and time.”

The Climate Casino, William D. Nordhaus

Sept. 23, 2014, marked the opening day of the United Nations Climate Summit 2014. Leading into the Climate Summit, hundreds of thousands marched worldwide in 2,700 simultaneous events, including the participation of an estimated 300,000+ in Manhattan. The Climate Summit opened to this three-minute video, which is narrated by Morgan Freeman and scored by Oscar-winning composer, Hans Zimmer.

Climate scientists find that the effects of climate change are worldwide, yet the responses, thus far, have been localized. I have documented some of the Obama Administration’s efforts on behalf of the United States (here, here and here), but as Nordhaus notes, the costs of responding to climate change would likely fall on the U.S. and other developed nations’ enterprises and individuals, but the benefits, such as they are, are spread out. But, I guess, as the Earth’s largest producer of greenhouse gases (GHGs) per capita, the rest of the world expects us to do more.

The success of worldwide responses to climate change has been spotty, at best. The Kyoto Protocol was an attempt to develop an international response. Developed in 1997, the Kyoto Protocol proposed reduction of GHG emissions by five percent below 1990 levels by 2012.

What it tried to do was to monitor GHG emissions by country and to establish annual emission limits. Developed countries would need to reduce their GHG emissions by greater amounts than developing countries, as the developing countries argued that the developed countries created the problem in the first instance. The U.S. failed to ratify it. Although it remains in existence, worldwide GHG emissions continue to increase virtually unabated. At the same time, U.S. emissions are down ten percent from 2007.

So, why bother attempting to get international cooperation at all? One reason is that there is some precedence for successful response to a potential global catastrophe. In 1987, the world’s governments were able to negotiate the Montreal Protocol that responded to the reduction of the Earth’s cover of ozone by certain chemicals that were commonly used. The Montreal Protocol required the reduction of the manufacture and use of certain ozone-depleting chemicals by participating countries. As a result, the ozone hole that was forming in the atmosphere has shrunk and scientists estimate that by the middle of this century, the ozone layer will be what it was prior to 1980.

The 2014 UN Climate Summit comes on the heels of recent Intergovernmental Panel on Climate Change (IPCC) reports that express the authors’ alarm at the prospect of climate change. The Summit’s purpose is not to develop a new agreement, but instead to lay the groundwork for December’s Lima, Peru United Nation’s climate conference and a Paris conference in 2015 that will be used to negotiate an agreement.

Finally, President Obama spoke at the UN Conference on Sept. 23. During his speech, he introduced new administration policies that, along with several others, attempt to demonstrate to the rest of the world that the U.S. is serious about responding to climate change. He spoke of cooperative efforts by the two largest emitters of GHGs, the U.S. and China, to reduce GHG emission, but indicated that “nobody gets a pass.” Of course, his concerns about climate change are not shared by everyone.

The President’s latest Executive Order requires the following steps:

  • All federal agencies involved with international development and investments must assess and evaluate climate change risks and develop plans based on those assessments, collaborate with other entities, agencies and stakeholders on climate resilience strategies, and monitor the effects of these programs.
  • Establishes the Working Group on Climate-Resilient International Development, which establishes a working group to develop practices and guidelines for international development and investments and report on its progress
  • Directs the National Security Council to convene relevant agencies and explore international development opportunities that incorporate climate change mitigation practices

As I have mentioned before, for our purposes the reality and/or causes of climate change are not the issue so much as the policies, legislation and regulations that will come from responding to it. Most U.S. trading partners and economic competitors acknowledge its existence and are developing policies and technology to deal with the perceived threat and now our international investment policies will require consideration of it, per the executive order. Countries, companies and businesses that can take advantage of these responses will be better positioned than ones who are not.

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