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Industries, Governments, and the Implementation of the Paris Climate Agreement

This post is part 3 of a 3 part series of articles originally written for the German Marshall Fund’s Young Professional’s Summit in Brussels, Belgium. It has been reprinted on the professional website of the author with permission from the German Marshall Fund. The original post can be found here, along with other interesting articles on foreign policy issues and the Young Professional’s Summit. Part 2 can be found here.

Recognition of the disastrous effects of manmade climate change has led to increased organized, global action to reduce carbon emissions in the 21st century. The United Nations Framework Convention on Climate Change (UNFCCC), the subsequent Kyoto Protocol, progress in the World Trade Organization’s Environmental Goods Agreement, and the recent 2015 COP21 Paris Agreement are among the many significant movements to engage some of the World’s largest greenhouse gas emitters in reducing their carbon footprint.

In 2015 195 economies from around the world approved the Paris Climate Agreement following weeks of negotiations at COP21. The largest climate agreement of its kind and the most comprehensive agreement to date, the Paris Climate Agreement is a seminal development in the global fight against climate change. Technological innovation, creative policy solutions and public-private partnerships are an important part of achieving the benchmarks set out in the Paris Agreement, in particular the ambitious goal of zero anthropomorphic greenhouse gas emissions by the end of 21st century. This goal, while timely and necessary, is quite difficult, requiring a level of global cooperation on climate change that has been difficult to imagine up until now.

The third day of the German Marshall Fund’s Young Professionals Summit saw participants join the ongoing Brussels Forum. One particular discussion on the Paris Agreement and the role of governments and industries in achieving these landmark goals was particularly insightful, and in some ways one of the largest, most daunting issues to be covered at the Brussels Forum.

Discussion about the Paris Agreement and the role of governments and industries in achieving these landmark goals was particularly insightful, and in some ways one of the largest, most daunting issues to be covered at the Brussels Forum.

The transatlantic communities’ own contribution to global greenhouse gas emissions and the impact of the environment on its economic success and public health have, in part, driven a surge in climate policy commitments, but also placed increased attention on international climate action, pledges and results. Global awareness of environmental challenges are, undoubtedly, having a profound impact on international climate agreements and sparking government interest in improving action and accountability in climate policy.

As climate agreements become further widespread, internationally recognized, and more comprehensive, the intersection of climate policy, economics, and industry interests becomes more apparent. Private investment and innovation, creative funding mechanisms, and ground breaking project proposals must increase in both scope and frequency in order for the Paris goals to be reached. Many of the innovative solutions needed for reaching the Paris goals require industry support and breakthroughs, both in terms of lowering global emissions but also in terms of realizing accomplishments that countries can point to as in line with their climate goals. Clarity of government regulatory policy is one way to assist industries, as is acknowledgment of their role in this global fight. A balance must be struck between lowering industry emissions and maintaining economic stability, as many of the largest industry emitters (transportation, agriculture, and energy) are also the backbones of economies throughout the transatlantic community and the developing world.

A balance must be struck between lowering industry emissions and maintaining economic stability.

Economic and policy solutions to reaching the Paris goals are coming from a variety of places: A number of the world’s largest companies, including financial services products, chemical companies, and beauty products and self care companies have long been making efforts towards reducing waste and emissions. Traditional, hydrocarbon energy producers are investing a lot of time, money, and expertise in finding energy solutions to climate challenges, including some of the largest, joint R&D programs in the world. National governments are investing in localized energy solutions, including physical energy storage and production, as well as public education programs, often with the support of national industries. The private sector is also working on addressing the economic challenges of climate change adaptation, including distinguishing the fiscal and logistical challenges of incorporating their companies into the global response.

The major takeaway of the Brussels Forum discussion is that continued and new coalitions of private sector leaders and forward thinking policy makers will be a key part of achieving the Paris Agreement goals. Such private-public partnerships are a necessary component of the transatlantic communities’ realistic and attainable fight against global climate change.

Ukrainia Mania

Recent news has much of the West looking toward Ukraine: One week ago riots broke out in Ukraine, the pinnacle of a multi year long struggle between pro EU and Pro Russian citizens in the former Soviet Union. Following the cease of the riots, Ukraine’s pro-Russian President, Viktor Yanukovych, was ousted. Since then, Ukraine’s parliament has put in place an interim government and scheduled elections for May, while ousted president Yanukovych fled to Russia. Following the implementation of a new government, Russian troops have entered Crimea, the southern peninsula of Ukraine with a decidedly pro Russian population (many of whom are ethnically Russian). The West has been startled by what many have called Russia’s clear violation of Ukraine’s sovereignty, and Ukrainian citizens have broken out in protest in favor of and against Russian forces around the country. Much like the 2008 South Ossetia War, Ukraine has the potential to quickly become a flashpoint of conflict.

Unlike most of the U.S. media, many analysts have been focused on the potential for conflict in the Ukraine for quite some time. The point of focus, however, has been from an energy perspective. Edward Chow, a Senior Fellow at the Center for Strategic & International Studies, and mentor to the author, has long focused some of his very limited time on Ukraine. Mr. Chow most recently wrote about Ukraine in December 2013, in the online CSIS Commentary, “Ukraine and Russian Gas–The Neverending Crisis”. Mr. Chow argues that Ukraine is at risk for becoming an energy appendage of Russia, with limited leverage over it’s more powerful neighbor and increasingly high debt. From the outside, it is easy for a lay person to see that this not only puts Ukraine in a vulnerable position economically, but strategically–the majority of Russia’s gas exports to Europe travel through Ukraine, making Russia’s need for Ukraine an important factor in its strong arming over the country.

Yes, other issues are creating a greater conflict between Russia and Ukraine (cultural and linguistic similarities, shared history, and EU vs Russian leaning foreign policies); however, the economic leverage Russia holds over Ukraine resulting from its poor energy policy has long been positioning the two countries for large scale conflict. As the crisis in Crimea escalates, Russia has every advantage, and has already started to send warning signals it may hold Russian Gas hostage as a result. Examining the conflict between Russia and Ukraine from an energy lens provides intriguing insights into the events currently unfolding, but also brings up an interesting question: Given the nature and history of disputes over energy resources, why are we unable to predict a conflict such as this? Are we looking in all the wrong places when making political predictions and charting future points of contention? Depending on the conflict, and the area of the world in question, perhaps tight energy markets and limited resources (or alternatives) do in fact precede conflict. Maybe analysts would be smart to take note of warning signs such as those in Ukraine.

Addendum:

New Russian Map: Posted to twitter via journalist Dave Keating on March 6, 2014, the following Map was used as an illustration of what would happen if Crimea’s parliament votes in favor of joining Russia on March 16:

Pipeline Trade: Pipelines from Russia & Belarus, traveling through Ukraine, carrying Russian gas to EU

A favorite map of Western news sources, via www.ria.ru

A favorite map of Western news sources, via http://www.ria.ru

The Sinophiles’ White Whale: PRC-ROC Relations

For the first time in 65 years Taiwan and China have renewed talks–not since the split between the two “parties” in 1949 have there been normalized relations between the two Chinas.

Taiwan’s Mainland Affairs Council (MAC) and China’s Taiwan Affairs Office met in Nanjing, China on Tuesday, February 11, 2014–at the same time I was visiting Taiwan for my first time in 25 years. As luck would have it my trip was business related, hosted by the Taipei Economic and Cultural Representative Office (TECRO) with an official delegation of former government representatives and business leaders from the U.S., allowing me insight into off-the-record conversations on a variety of issues that are of relevance to Taiwan’s other important relationship, the U.S.

The author with Taiwanese President Ma Ying-jeou

While the meetings were as amazing as the delegation members themselves, there were a few striking takeaways for this amateur sinophile. They are as follows:

1.) Taiwan…actually matters. I mean this in the best possible way–coming from an energy and trade background, Taiwan clearly matters to the mainland, and vice-versa. But I have always been under the impression that the status quo of cross-strait relations will forever remain the status quo–neither side will budge and the debate is a moot point.

So what is the point in even pretending change is on the horizon?  One day they will be signing a trade agreement, the next day they will be pointing missiles at each other. The relationship will forever be sticky, and messy, and undefinable.

Well, as it turns out, the status quo is still the status quo, but what many in Taiwan see as actual progress was happening right under our nose at the cross-strait talks in Nanjing. Sure, these talks didn’t include either player’s president (they couldn’t–Taiwan is not a recognized country, so Xi Jinping, President of Mainland China, could never meet with Ma Ying-jeou, President of Taiwan. Further, because Taiwan is so adamant about its status as an independent, democratic China, Ma Ying-jeou could never stoop to meeting with anyone less than the President of China. Talk about complicated), but they do represent warming relations between two nemesis.

2.) Security is Taiwan’s top priority. This may not come as a surprise to most cross-strait experts. However, to other policy analysts this is surprising when compared to the U.S. government’s priorities–defense matters (our government spending shows us that every year come appropriations time), but so do a lot of other issues that are constantly (hotly) debated among our leaders. Cross-strait relations, however, define the majority of Taiwanese politics–from the current President’s approval rating, to the opposition party’s platform for the coming elections, to the new interest from Taiwan in joining the Trans-Pacific Trade Partnership, Taiwan is obsessed with its neighbor. Rightfully so, of course (similar to other cross-border tensions in Asia that will remain unnamed), but seeing first hand via the Taiwanese Navy, Air Force, and multiple unnamed Ministries the way in which all conversations about Taiwan’s interests come back to China really hammers home the point that cross-strait relations are, literally, everything.

3.) Mainland China is in a really, really good position.

Today China has a monopoly on trade, and Taiwan is a significant part of that monopoly (China represents 21% of Taiwan’s total trade; almost 30% if you include Hong Kong). Take, for example, this great graphic posted by Ian Bremmer on February 27, 2014 on Twitter:

Posted on Twitter by Ian Bremmer, 27 Feb 2014.

Posted on Twitter by Ian Bremmer, 27 Feb 2014.

China, clearly, has the upper hand in the region, leaving smaller economies like Taiwan little choice but to do their best to walk on economic eggshells. Not only does China have the economic leverage, they have the time to wait out Taiwan’s battling political parties and indecisive constituents, and the regional relationships to continue “alienating” Taiwan (to borrow a common phrase used in Taiwan to describe the one-sided Cross-strait relationship).

4.) This potential patience on the PRC’s part brings me to my last point–and one remaining question: Why does a territorial dispute, between two immensely different (some would argue unfairly matched) political foes,  matter except for reasons of principle? Taiwan, it is clear based upon my experience there, is  a democratic China. The culture is the same (nearly), the language is the same (nearly), the history is the same (nearly), but the political system is so different…So, I guess my final conclusion is that Taiwan and China are as similar as… North Korea and South Korea.

Just kidding. My real conclusion is that I, as a person who has been educated in the politics of Mainland China, was unsure what to expect going to Taiwan but was confident I had a firm understanding of the cross-strait dynamics. And as a result my boat was seriously rocked. I may not have a stance on the cross-strait relationship now, but I certainly am more comfortable with the realization that cross-strait relations are much, much grayer than I originally thought.