by Parag Khanna
Just because environmental solutions are needed globally doesn’t mean there is one global solution. International organizations have fared no better in promoting environmental sustainability than they have in ensuring universal human rights: It’s all talk and very little action. The United Nations deserves credit for convening the 1972 Stockholm Conference on the Human Environment, but since then there have been no less than five hundred multilateral environmental agreements, almost all nonbinding and implemented by only the wealthiest European nations and Japan, who kick the role of summit host back and forth from Kyoto to Copenhagen. Advocates of beefing up the United Nations’ ability to manage the commons have proposed a “Global Environment Mechanism”—to do what, exactly?
The Montreal Protocol is widely cited as a model of successful international environmental diplomacy because it reduced chlorofluorocarbon emissions that were damaging the earth’s ozone layer. Although the process of debating the science, proposing frameworks, and bringing governments and industries to an agreement on regulation required a dozen treaties over fourteen years, ozone damage was finally brought under control. Yet in the same amount of time, the Kyoto Protocol on greenhouse gas emissions has achieved virtually nothing. Kyoto took so long to negotiate that China and India, which were effectively given a pass in the treaty, have quickly risen to be among the world’s top emitters, and its Byzantine complexity involving buying and selling credits and emissions-trading mechanisms has come to look like the environmental equivalent of financial engineering. Offering countries the option to buy “pollution allowances” is hardly evidence of moral courage.2 Poor countries love the “polluter pays” principle, whose “you broke it, you fix it” logic requires rich countries to accept responsibility for climate change proportionate to the damage they’ve done over the course of history. African nations have demanded $40 billion in compensation from the wealthier countries causing climate change. But lawsuits are also not meaningful vehicles for reducing emissions.
The problem with all governmental negotiations is that they function according to countries rather than sectors. But such a substantial share of China’s massive greenhouse gas emissions stems from catering to the world’s largely non-Chinese-owned manufacturing industry that China itself can’t be fully blamed for not taking precautions its foreign investors won’t pay for. If climate change strategies are to work, they have to think as much in terms of supply chains as nation-states. Indeed, the common language for successful climate diplomacy will not be targets but technology. As Jorgen Berson of the Norwegian firm Point Carbon says about the Copenhagen process: “It was the same protracted, prolonged, and harsh negotiations. Blocks emerged and debates were repeated ad nauseam while forests burn. Emerging markets have a low appetite for global regulation and targets they can’t measure, but a far larger appetite for technology and innovation if it’s affordable.”
Since the 1992 “Earth Summit” in Rio de Janeiro, global civil society has been a constant feature at environmental negotiations, storming the gates and making noise while also watching its bold proposals be watered down by timid governments. Multi-stakeholder bodies such as the World Water Council grew out of Rio to corral NGOs, UN agencies, governments, and engineering companies to address the freshwater crisis. By the 2002 Johannesburg summit, two parallel conversations had emerged: a dynamic and productive dialogue between business and civil society, and a stagnant intergovernmental track. The summit’s final declaration named the guidelines produced by the nongovernmental Global Reporting Initiative as a leading benchmark for eco-compliance, and more than 330 multi-stakeholder partnerships were launched covering emissions reductions, biodiversity protection, energy provision, and water management. Rather than confrontational international negotiations, what we need are new facilitators, such as the Global Water Partnership, which links two thousand water experts, development agencies, and private companies to share best practices.
International organizations that want to make an impact on the environment need to put their money where their mouths are. They should stop trying to supervise the world and throw themselves into real programs. The UN Environment Program, for example, has launched efforts such as the “Billion Trees Campaign” and a Renewable Energy Enterprise Development project to help countries make and profit from green investments. The World Bank’s Clean Development Mechanism, which approves projects after third-party vetting, has given $200 million to Indian companies to upgrade their power plants, while the International Finance Corporation has boosted funding for gas refinery projects that are compliant with its eco-friendly Equator Principles. Progress in climate negotiations actually depends on emerging markets confidently adopting the technologies that will allow them to even bother showing up at summits. Until then, climate conference should be put on ice, and all the money put into clean-tech transfer funds.
Were it not for the scientific community housed at major universities, diplomats would be pushing their target dates back for centuries to come. The Intergovernmental Panel on Climate Change has global credibility most of all because it has among its members scientists and scholars, not diplomats defending national interests. And its strength lies in being able to recommend strategies and investments that can be made by nations and companies individually without the need for an overarching bureaucracy that wastes valuable funds.
This free-for-all approach to climate diplomacy—in which all are expected to do their part and none escape scrutiny—is an approach more likely to succeed than grand summits, even as it is amorphous and confusing. Vague and cowardly intergovernmental dialogue cannot substitute for active competition and collaboration among governments, NGOs, and businesses. Some NGOs train the media to be climate savvy, some water engineers bring their best practices to the developing world, and some stock exchanges give special listing to green companies. By late 2010, business groups swarmed the United Nations demanding a transparent climate treaty that will facilitate balanced competition. So far, governments have been reluctant to ratify it. All of these actions are as much a part of the climate remedy as summits in Kyoto, Bali, and Copenhagen.
A World of Experiments
As with reducing poverty, for real progress on the climate change issue, we need learning across borders more than we need global institutions. The European Union has been an environmental leader from the get-go. It pushed for inclusion of cap-and-trade schemes in the Kyoto Protocol and went ahead with them even after the United States rejected Kyoto. European governments have sustained high fuel surcharges, making their nations the most efficient energy consumers in the world: EU citizens have half the per capita emissions output as Americans but a better quality of life. Even in the absence of global standards, the European Union sets them through its regulatory mechanisms. It is forcing power generators to pay for all of their emissions by 2013 but funding the policy through revenues from the European carbon market. It has pledged to calculate similar costs for non-European countries as well, and tax their imports accordingly, forcing upward compliance toward EU standards.
The European Climate Exchange even creates a value for rain forest land preserved for “carbon ranching” in places such as Madagascar, pricing it higher than if the trees were chopped down and sold off. EU legislation now calls for massive investments in carbon capture and storage. European energy giants such as Vattenfall are testing everything from pumping coal emissions into the ground above oil fields to add pressure for oil extraction to burying it several miles below the earth’s surface, where it will harden into limestone. Most of the world’s most profitable solar and wind power companies are publicly traded in Europe; Spain’s Vestas provides 35 percent of the world’s wind turbines and installs a new one every four hours. German engineers have designed “passive homes” that are so well insulated that they use almost no energy for either heating or cooling; Norwegian start-ups have invented an electric car that is 95 percent recyclable, and Volkswagen has a sleek new coup that plugs into an electric socket.
Lufthansa and other European airlines now put carbon dioxide emissions data on e-tickets as matter-of-factly as calorie labels on a candy bar.
Just because Europeans aren’t fighting in the new “Great Game” doesn’t mean they haven’t already won. Europe has ramped up the transition toward natural gas, which is cleaner-burning than oil and in abundant supply. American companies are taking their business to Europe, where cities such as Lisbon, Birmingham, Hamburg, and Madrid welcome Cisco’s Connected Urban Development project to monitor and even eliminate traffic through smart traffic signals. In any case, European cities were designed before the car, so will outlive the end of oil through their electric trams and swarms of healthy cyclists. China and America don’t need global codes—they just need to become more European.
At present, however, the American government alone—from government offices to navy aircraft carriers—is by far the largest energy consumer in the world, and thirty of the world’s seventy-five largest emitters of greenhouse gasses are U.S. states. America’s voracious energy consumption habits are deeply ingrained in its national character, meaning green living will only work in America if it’s made easy. Google, for example, subsidizes employees to buy electric cars, and even provides them free of charge for running errands during the day. Its California cafeteria serves only organic food grown within 150 miles of headquarters. These are the steps companies across America can take to forge the transition toward community-based sustainability. Google is in the lead, and maybe the Pentagon will follow.
Because short-term financial considerations often trump long-term common sense, saving nature requires to some extent commoditizing it—pricing it according to its value to users. Both oil and water should cost more than they do. Once gas prices fall, many Americans suddenly think they don’t need fuel-efficient or hybrid cars. The United States could tax carbon consumption, penalize oil speculators, and eliminate subsidies for fossil fuels—putting those funds into alternative energy research and development instead. But implementing any of these schemes will require a new level of public-private collaboration. President Obama’s plan to reduce emissions in the United States was announced in partnership with car companies and labor unions, and coupled with $6 billion in subsidies to Nissan, Ford, and Tesla to develop hybrid cars. Nissan CEO Carlos Ghosn has put it most bluntly: “We must have zero-emissions vehicles—nothing else will keep the world from exploding.” If hybrid cars powered by biofuels, batteries, and hydrogen can flourish, oil will lose its captive transportation market.
In tackling both financial and energy crises simultaneously, the Obama administration is planning everything from a “green bank” to a clean energy development agency to provide more than $100 billion to fund clean-tech research and create jobs in solar cell installation (which takes more hands than running a power plant), to build commuter railways and smart grids, to expand the country’s natural gas infrastructure, and to reinsulate houses and buildings. The United States has at least 250,000 square miles of land in the Southwest alone that are suitable for solar plants. America’s high-tech and clean-tech communities are now coming together to design green infrastructures for the common man. Shai Agassi’s company Better Place has been designing an electric car infrastructure since well before Obama was elected, while local entrepreneurs and utilities are combining to make a thirty-foot-tall windmill with seven-foot blades the new must-have backyard accessory in as many as fifteen million homes.
Initially, however, America’s “green collar” revolution may really be a European and Japanese one. The United States can invest billions of dollars in high-speed rail, but Obama officials had to travel to Spain and Japan to learn how such systems actually work. In fact, America presently runs a “green trade deficit” of $8 billion, importing vastly more clean energy goods than it exports. Toyota’s hybrid Prius has been a bestseller in the United States, prompting its higher-end Lexus line to pitch Americans the “hybrid lifestyle” as it rolls out a fleet of new cars built largely from recycled or recyclable materials from its new green complex in California.
California’s experiments with energy efficiency—which make it more like Sweden than the rest of the United States—demonstrate that the real action on climate change, like so many other issues, is taking place at the periphery, not the center. Like Brazilian cities or European countries, American states can be laboratories for innovation. In Florida, a planned coal plant in the Everglades was rejected in favor of a solar cell farm, oil heavyweight Chevron is also the largest installer of solar cells in California, and in New Mexico, a symbiosis is forming among solar cell companies, conservation biologists dedicated to protecting wildlife, and universities training graduates in environmental science.
In a world where less than fifty cities cause most of the greenhouse gas output, curbing emissions is as much the job of mayors and governors as presidents. Stockholm and London began congestion pricing earlier this past decade, while Copenhagen has steadily removed parking places in the city center to encourage people to take buses, ride bicycles, or walk. Berlin has contracted companies to green fifteen hundred buildings, reducing the city’s carbon footprint by 25 percent. The greening of the Empire State Building presently under way in New York City is self-financing through savings in utility bills and will achieve the emissions reduction equivalent of taking nineteen thousand cars off the street. Even poor cities can change citizen and consumer behavior, leapfrogging to low-carbon, off-grid solutions such as distributed power networks that draw from multiple sources of energy. In Mexico City, the World Resources Institute ran a program mostly funded by the Shell Foundation to retrofit diesel metro buses with catalytic converters.
All the efforts under way to control Western emissions will be a quaint sideshow if they aren’t copied in China, where hundreds of state-owned companies shun environmental regulations and are impervious to external scrutiny and shame as each year they build enough coal-fired plants to power Italy. Yet precisely because these state-run companies are literally public-private ventures, the country is actually well-placed to orchestrate a transformative shift in its national energy policy—a “Green Leap Forward.” Indeed, the share of China’s 2009 stimulus package devoted to greening its economy is the largest in the world. Its new corporate tax policy takes direct aim at the country’s top one thousand companies to incentivize a switch to alternative energy, a consumption tax targets those disposing rather than recycling chopsticks, and the government has seeded at least five eco-investment funds. Thanks to a start-up loan given by the local party boss of Wuxi to Shi Zhengrong in 2001, China’s Suntech Power has become one of the world’s largest solar power firms and raises hundreds of millions of dollars on the New York Stock Exchange. China’s State Grid Corporation, the world’s largest public utility, has undertaken massive investments in wind and hydroelectric power, promising to generate 30 percent of its energy from renewable sources by 2030, and offered subsidies to cities to switch their taxi fleets to electric cars—of which Shenzhen-based BYD has already rolled out a fully Chinese-made line. The city of Baoding has declared itself a renewable city, sponsoring local firms to build wind and solar-cell farms.
The diplomacy of curbing Chinese emissions is all about mayors, factory owners, party officials, and American clean-tech companies—all brought together by a nonprofit called the Joint U.S.-China Collaboration on Clean Energy, which knows that the supposedly insurmountable problem of reducing China’s emissions comes down to convening these players to find win-win deals. Even at the factory level, where owners are often in bed with local politicians, old and inefficient plants are being replaced with new ones equipped with CO2 scrubbers.
Like China, India’s challenge is to generate enough power for its people, but to do so in a way that reflects the ecologically conscious spirit of the times. India has an Energy Conservation Act that mandates that states set aside funds for clean energy. New Delhi has enforced strong regulations requiring buses and scooters to run on natural gas, while
planting thousands of trees to make the city’s air breathable again—a rare success for a poor-country mega-city. Its accomplishments are the results of both a progressive high court and a persistent lobbying from India’s rambunctious civil society, particularly the Center for Science and the Environment, which sends representatives from village to village to teach people to harvest as much as 60 percent of the rainwater that falls on their properties using a system of rooftop gutters and ground trenches.
Most of India still lives in the villages, where the Small-Scale Sustainable Infrastructure Development Fund acts as a social merchant bank to provide locals with modern lights, pressure cookers, and water purifiers. Though it reaches a scale international organizations commonly neglect, it receives funding from a staggeringly diverse set of donors, such as the British Foreign Office, the Shell Foundation, the Blue Moon Fund, the Yahoo! Employee Foundation, and Électricité de France. Tulsi Tanti, once the owner of textile factories and frustrated by the intermittent local power supply, was inspired to set up two wind-power turbines. The result grew into Suzlon, a global wind-power giant that is buying entire energy grids across India and overseas to green their energy production.
Clearly there are two climate conversations going on. While Asian politicians act defensive at international gatherings, their businesses are angling to gain an edge in the global markets for solar power and micro-cars. China and India have also quickly become among the largest markets for clean tech. Vattenfall hopes to sell its CO2 capture and storage technology in China, without which China would never sign emissions reduction agreements. BASF has figured out how to recycle emitted heat from its European factories, cutting its emissions in half while saving $300 million per year, a technology it now exports to China. Commercial real estate firms planning billions of square feet of office space in China now put forward green building plans rather than offering to retrofit later. India’s burgeoning second-tier cities like Gwalior are buying energy-efficient fluorescent lighting as well as load-monitoring systems that distribute electricity where it’s most needed. And First Solar of Arizona is building a solar field larger than Manhattan—in Mongolia.
