Beneath this concern, the position of business varied from industry to industry and from country to country. Broadly, there are tensions between established industries and businesses in new emerging markets such as renewable energy and carbon trading. The latter are generally more cautious while new industries are more ambitious. For example, renewable energy associations who now represent some of the world’s biggest companies like GE, BP and Shell are bullish. In 2006, renewable energy accounted for 20 per cent of global investment in power generation. On the back of this, clean energy companies believe they can quickly deliver the technologies to make significant reductions in emissions. But they need the enabling policy frameworks to underpin investments.
On the surface, many elements in the Bali Roadmap will work towards this policy frameworks goal including the development of clear emission reduction obligations for developed and developing countries, incentives to create technology financing, the examination of buildings, and strengthening the global carbon market. However, a rather large elephant is sitting in the room and it has the Stars and Stripes tattooed on its shoulder.
While this is not the only factor, the posture of future US administrations will have a large bearing on whether Copenhagen delivers a stable, long-term investment framework for business. As the world’s second largest emitter, and the largest economy, the domestic emission reduction obligation the US accepts post-2012 will have significant impacts on the shape of global investments in emission reductions. While other large emitters such as the EU and China are reducing emissions regardless of the US position, the ultimate level of their domestic policy ambition will be tied to what the US commits to in 2009.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Uncertainty around the position of the US will remain until the outcome of the US Presidential election in November. Both leading Democratic candidates have reasonably strong climate change policies and support 80 per cent reductions in emissions from the USA by 2050. John McCain, on the Republican side, could also be expected to take a more progressive approach to climate policy than the current Administration and he has signalled 65 per cent reductions in the US by 2050. Other Republican candidates have said little on climate change and their positions may be very similar to the current Administration. The stance of the Congress and Senate on international talks remains unclear.