Obama’s International Gamble

Media and environmental NGOs around the world are calling COP 15 a failure. Even though the agreement fell short of the hopes and expectations of millions of people, the intense two week negotiation was a political triumph for some. Most notably, the United States.

Facing fierce opposition from the Senate to commit internationally to targets not approved domestically, President Obama managed to keep any specific numbers out of the Copenhagen Accord. More impressively, he managed to persuade China to consider accountability measures for its reductions (granted, not by an international body). This was the largest prerequisite from US legislators to agree to any reductions at home and the US adherence to an international Climate treaty. With an eye on domestic politics, the US skillfully used international negotiations to gain support domestically.

Although this delay might be seen initially as detrimental for climate, the potential advantages could far outweigh the costs. If President Obama had agreed to targets and China’s accountability had not been addressed, it is very likely that chances would have been slim for the climate bill to pass the senate in the spring. However, the strategy might just have averted higher opposition from legislators and even boosted support. With this the world will gain a higher probability for the second emitter in the world to render a meaningful contribution to avert Climate Change. Moreover, the world would have gained a leader to a low carbon global economy.

The Chinese riddle

During the negotiations many asked what China wanted in return for its emission reductions. A recent article in The New Yorker (December 21, 2009) by Evan Osnos about China’s green economy, hints at the answer. China has an impressive capacity to produce goods cheaply; it is world renowned for its explosive growth in wind farms and solar panels. This ability to mass produce comes from a strong centralized national growth planning followed faithfully by provinces combined with low wages and high productivity. However, China lacks the conditions for creativity to flourish, like individual freedoms and entrepreneurial incentives to come up with the next breakthrough technology. These elements appear to belong to a country that manages growth more democratically, like the United States.

The combination of the United States and China’s comparative advantages should lead to technological advancement and economic growth. The United States needs China to produce its big ideas and China needs the United States for creative input. One cannot attain the other without sacrificing the conditions that sustain their political systems. It is hard to imagine Chinese double digit growth under a US type democracy.

Therefore we are in a world where US outsources production and China does the same with creativity. If Obama was able to bring China to the table without giving in on ideas, the more power to him. However, it will be interesting to see the consequences of such an opportunistic partnership.

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