The path to cleaner, affordable energy is through international cooperation
By Peter M. Robinson
The next administration will face a number of important international challenges requiring prudent and effective action. Near the top on anyone’s list is energy and climate change.
Energy is the lifeblood of the global economy. American business is a vital player in the production and transport of energy all over the world, and of course our society consumes more energy than any other nation. We have made tremendous strides in developing cleaner technologies and energy sources, while improved efficiency has boosted our competitiveness as well as environmental protection. Nevertheless, as a trip to the gas station will attest, energy costs are a challenge for everyone, including global companies. Indeed, some say we may need to adapt to an era of permanently higher energy prices.
However, energy can never be seen as just a “business” issue. Indeed, it is a fundamental prerequisite for social and economic development across a broad range of areas. Pick almost any of the Millennium Development Goals – progress toward which is a key goal of this year’s UN General Assembly session – and you will find an energy-related component. Clean water, health care, poverty eradication: how can any of these be effectively addressed without greater access to energy?
Of course, much of the debate over energy has focused on climate change. What is the best path to a lower-carbon future? And how can we best use our energy resources to mitigate and adapt to the effects of global climate change, while still ensuring we meet the needs of a growing world? Global solutions are called for, and our next president will need to take the lead in crafting international rules to tackle both the energy and climate challenges.
For USCIB members and other global firms, the way forward is clear: the only way to provide dependable, affordable and cleaner energy is through international action and cooperation to deploy and upgrade energy systems worldwide.
We have worked hard to advance understanding of these issues at the highest levels, in global talks under the UN Framework Convention on Climate Change, where countries are seeking to forge agreement on broader and more inclusive post-2012 actions as the Kyoto Protocol reaches the end of its first round commitments, and in the G8 as well (see page 9). We have leveraged our unique affiliations with the International Chamber of Commerce and the Business and Industry Advisory Committee to the OECD to advance a coordinated and integrated approach to climate and energy around the world.
There can be no doubt that American companies are up to the challenge. The next administration must therefore frame a vision of U.S. leadership on energy and climate that places a high priority on our proven technological know-how and the business community’s ability to commercialize and disseminate the fruits of innovation. This vision should be optimistic, driven by an understanding of the power of markets and international trade to deliver results.
A new vision on energy and climate should encompass four essential goals:
- Broaden the energy mix. Diversifying energy portfolios is a proven strategy to manage tradeoffs and uncertainty in the near and long term. We should not foreclose any energy options in international discussions.
- Foster innovation. The transfer of new and cleaner energy technology to emerging markets such as China and India will be critical. But to make this happen, private-sector innovation needs to be fostered, and intellectual property rights protected.
- Embrace markets. The International Energy Agency puts the bill for meeting global energy needs over the next two decades at $20 trillion. The lion’s share must come from the private sector. To do this, we need open markets, protection for investments and trade liberalization.
- Regulate wisely. We need long-term international policies, often called “enabling frameworks,” that are consistent and predictable, encouraging investment, securing property rights and promoting public-private partnerships for energy innovation.
The next administration must work closely with other nations, not just in established settings such as the UN, but in new arrangements that enable countries best placed to move forward to do so with a minimum of impediments. It is a time for creative leadership, not dogma.
American business is ready to build our energy competitiveness in the global marketplace, to grow our economy and to move decisively towards a sustainable energy future. We hope the next president is up to that same challenge.
For more information or to get involved, please contact USCIB’s Norine Kennedy (212-703-5052, email@example.com).
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