Approaches for Mitigating Greenhouse Gases: How the United States and Germany Could Learn from Each Other
By Simon Marr

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Approaches for mitigating greenhouse gases in the United States and Germany are particularly different. While the United States, the largest emitter of greenhouse gases (GHGs), still lacks a stringent federal climate change or energy policy, Germany has produced relatively ambitious political results so far.

The Bush administration appears to be in denial about the fact that human-induced climate change is happening already and that it is required of the administration to take over political responsibility for tackling climate change effectively. The United States' current federal climate change policy relies on voluntary programs, leading to a "business as usual" approach and a heavy reliance on research and development that is expected to produce a mainly technological solution. On the international plane, the Bush administration has pursued an obstructionist policy that aims to slow down the regulatory process of curbing greenhouse gases.

The U.S. federal climate change policy includes primarily voluntary programs for industry to reduce the greenhouse gas emissions of its products by 18 percent through 2012. Analyses show, however, that this incentive target means nothing more than business as usual and will not lead to any absolute emission reductions. It is not enough to just act responsibly in a political manner in order to successfully deal with the issue of climate change.

Despite these shortcomings, it is fair to say that the United States is right to invest significant sums of money into research and development for breakthrough technologies to tackle climate change. The only problem with this approach is that for climate change, there is no quick fix in sight. And if scientists' predictions are correct, we cannot afford to wait for a technological fix to be developed in the long run, before irreversible consequences for our planet are set off.

In Washington, several Senators seem to have realized that time for tackling climate change is running out and they have begun to address the issue. Most prominently, the issue of climate change has been addressed in the Energy Policy Act 2005 passed by the U.S. Senate on June 28, 2005. It is based on a Senate resolution offered by Senator Jeff Bingaman with the support of Senator Pete Domenici, which asks Congress to enact a national mandatory comprehensive greenhouse gases reduction program as long as the program does not significantly harm the United States economy. In addition, the Senate passed the Hagel-Pryor amendment to this Act, which focuses on the role of technology deployment, private-public partnerships, and developing countries in reducing GHG emissions.

Further far-reaching amendments, including the McCain-Lieberman Amendment aimed at reducing U.S. greenhouse gas emissions to 2000 levels by 2010, were rejected. The bill is now facing strong resistance in the House, which has produced its own version of an energy bill, and it remains an open question whether this legislation will become law.

At the state level, however, there is more activity in addressing climate change. Some examples include the Regional Greenhouse Gas Initiative (RGGI), a bipartisan effort of nine north-eastern U.S. states to establish a regional cap-and-trade system; the West Coast Governors' Global Warming Initiative; the voluntary Chicago Climate Exchange; as well as other voluntary programs in thirty-nine states and various bills introduced by individual states. Most noteworthy is the climate change plan of California, the largest U.S. state and the world's eighth-largest economy, unveiled in June 2005. It provides for a number of measures to curb greenhouse gases, such as ambitious emission standards for automobiles.

Some energy and climate change experts in the United States thus see a silver lining on the horizon and are hopeful that eventually the efforts at the state level might create enough momentum to effect change on the federal level. Private industry, driven by increasing shareholder pressure and consumer concerns in the global market, has also begun a slow move towards voluntarily reducing GHGs. However, it remains to be seen whether this apparent push for CO2 regulation is anything more than a public relations effort to "greenwash" the political or corporate image.

In contrast to the Bush administration, Germany's government has accepted human-driven climate change as a fact based on solid scientific evidence. The Red-Green governing coalition, which included the issue of climate change in its 2002 platform, has acted as the driving force behind the Kyoto Protocol by voluntarily accepting an ambitious emission reduction target of 21 percent reduction below 1990 emissions. Germany is now 2.1 percent away from reaching this, in large part due to the necessary and large-scale modernization process of East German industry in the early 1990s. In addition, despite significant initial opposition from private industry, Germany has successfully implemented the largest CO2 cap-and-trade system in Europe, and is one of the four countries within the EU providing absolute emission reductions for the period 2005 through 2007. Furthermore, the government has also put in place other environmental policy instruments to regulate GHG emissions, such as the eco-tax legislation - which was pushed through against fierce opposition, in part because the revenue is needed to fill the government's pension fund - renewable energy policies, and toll systems for highways. With these instruments, Germany has abandoned the voluntary self-commitment obligations of industry, which, in theory, might have had a higher reduction target but, in practice, simply did not deliver the necessary emission reductions. Thus, Germany offers a model for moving from voluntary to mandatory regulation and creating a coherent national and international policy strategy to address climate change. Even in the likely event that the Red-Green coalition government will be succeeded by a more conservative government, the overall approach to curb GHG emissions is quite likely to survive. Any new German chancellor would need to comply with the reduction obligations of the Kyoto Protocol, and simply could not afford to turn the clock back and abandon the eco-taxation revenues for the pension fund.

Given these apparent different approaches, maintaining trans-national policy exchange on climate change makes sense. German-American GHG policy exchange on more direct and practical levels, through the sharing of applied experiences in emissions trading in the two countries, is viable. Sharing success stories such as EU emissions trading, the German renewable program, and the U.S. SOX , NO2 system, along with insight from Germany's unique situation as the largest carbon dioxide market worldwide, would allow policymakers in both countries to better learn from each other, and could especially inject greater confidence into U.S. efforts at emissions reduction.

This exchange could be fostered on a high level between the administrations, as practiced in the German-U.S. policy declaration on energy efficiency of February 2005. However, this sort of effort is currently slowed by the diplomacy involved and does not allow for the direct exchange of practical, nitty-gritty experience. A parliamentary exchange between members of the environmental committees from both Congress and the German Bundestag along the lines of past programs on security might be more promising. In addition, keeping up an expert-level exchange and discussion among those in the field by creating networks of experts through programs and conferences is recommended; this approach requires sponsors to sustain the process.

In the meantime, as has happened in the past, the development of emissions regulation could continue on both sides of the Atlantic, eventually developing regional cap-and-trade systems or other regulatory instruments, and possibly gaining enough momentum over time to create a U.S. federal policy on tackling climate change. Therefore, the EU and also Germany, when finalizing their own comprehensive climate change policies, would be well advised to leave a door open for any U.S. federal climate change policy that might evolve in the near future.

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This essay is the result of Simon Marr's research stay in Washington, D.C., in April and May 2005 as an AICGS/Die Zeit Stiftung Fellow .

This commentary appeared in the July 28, 2005 AICGS Advisor.