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EU and US differ on climate change |
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Written by Dipankar Dey
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Friday, 27 November 2009 |
 The western business communities look for opportunity
With the United Nations Conference on Climate Change opening in a week
in Copenhagen, the business communities of the European Union and the
United States are taking two distinct approaches to tackling the
climate issue and seizing the new business opportunities it has
offered. While the EU has sought to address the causes of global
warming by promoting clean technology, as a late entrant to this
emerging market the US has put its thrust on 'adaptation strategy' to
reduce the adverse impact on food production.
The two may now
insist on putting the issue on a much larger multilateral framework
than the Kyoto Protocol. Initiatives to put it under the framework of
the World Trade Organization have been started. Considering the
complexity and business implications, the WTO could be a better
institution, with equal voting rights for all the member nations, to
tackle this issue.
The transatlantic think tanks have by and
large agreed that it is imperative to reduce the central place of
fossil fuels in meeting the food and energy needs of their citizens. In
addition to the general apprehension about the catastrophic impact of
global warming on human livelihood, the gradual loss of control on
crude oil enjoyed historically by the oil majors (the 'seven sisters')
of Europe and US has enormously influenced the policymakers of the
Northern countries.
The initial differences that existed
between business communities of the United States and Europe in
tackling climate change have largely been reduced by the formation of
the World Business Council for Sustainable Development in 1995. The
council, with more than 140 CEOs of major transnational corporations as
its members, has eventually evolved into a dominant voice on
sustainable development and environment.
Unlike in the initial
phase of the debate, when the passion for a better world was the
driving force behind initiatives to promote renewable energy sources as
a substitute to hydrocarbons, the primary driving force behind the
initiatives now is the attraction of huge profits in the emerging 'hot
air' market. Economics has overtaken the science of climate change and
new business opportunities are being explored. The signing of the Kyoto
Protocol in December 1997, which came into force on February 16, 2005,
was the first major initiative. As of December 2006, 169 countries and
other governmental entities have ratified the agreement. Thus a global
alliance against global warming has been formed.
Differences in approach
The EU:
Food:
On agricultural biotechnology, the thrust is on research and cautious
approach towards its application, especially in food production. The EU
has put more importance in promoting markets for quality food products
grown mostly through organic farming. It will emerge as one of the
largest importers of food grains after having offered to eliminate
export subsidies altogether by 2013. The EU is already the biggest
market for Third World foodstuffs.
Energy: To retain its
technological dominance in non-food production, Europe is trying to
remain focused on developing and capturing the fast-growing market of
green technology. The clean development mechanism and the Emission
Trading System under the Kyoto Protocol are being used as strategic
tools to achieve that objective. Moreover, large energy utilities have
reorganized themselves in recent past to capture the fast-growing water
utility services. European firms now dominate the world water market.
The US approach:
Food:
As the driver of the first green revolution, the US continues to remain
focused on the global food market, especially in the densely populated
Asian and African regions, where foode demand has been growing
steadily. The push is on mass production through diffusion of new
farming technologies including genetically modified seeds across the
globe. The possibility of drought due to climate change has given an
opportunity to introduce genetically modified seeds and launch a second
green revolution to feed the hungry mouths of Asia and Africa.
The
Obama administration sees chronic hunger as a key priority of its
foreign policy. According to the US administration, food security is
not only about food. It represents the convergence of complex issues:
drought and floods caused by climate change, swings in the global
economy that affect food prices and threaten the fate of vital
infrastructure projects, and spikes in the price of oil that increase
transportation cost.
Energy: In addition to promoting nuclear
power,, the US is trying to retain control by shifting the energy base
from carbon (fossil fuel) to carbohydrate (biofuel) sources. Industry
majors like Dow Chemical have already initiated few strategic moves.
For example, on August 30, 2007, Dow Agro-Sciences, a wholly owned
subsidiary, announced that it had further strengthened its global corn
seed platform with the acquisition of the Netherlands-based Duo Maize.
The deal followed two other acquisitions involving Brazil's Agromen
Tecnologia, and Austrian company Maize Technologies International
(MTI).
Chevron, the second largest US oil company, has
invested in one of the first large-scale bio-diesel plants in the US.
Chevron's bio-diesel production facility will be able to produce
annually up to 100 million gallons of fuel from soybeans and other
resources. And on June 20, 2006, BP and DuPont jointly launched
bio-butanol.
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