Post-Hegemonic Climate Politics?

Introduction

The election of a successor to Bush comes at a critical time in international climate change politics. The central features of the current agreement in place, the Kyoto Protocol on Climate Change, which elaborate the obligations of states to reduce greenhouse gas emissions and a series of mechanisms to help states meet those obligations, expire in 2012. Negotiations started in 2006 at the Conference of the Parties (COP) in Nairobi for a successor agreement to Kyoto, and negotiators hope to finalise an agreement in December 2009 at the COP scheduled then in Copenhagen. But with a new US president only in place in January 2009, this leaves very little time to adapt to the preferences of the new administration. There are significant hopes that the new president will ease the way back to multilateralism in climate change politics, as in other areas of world politics, but given the negotiating timetable and the internal dynamics of US politics, it is not clear that it will be possible to realise this potential. It also begs the question, the subject of this article, of how much change can actually be expected in the US approach to global climate politics with the election of a new president.

Climate change has certainly been a key sticking point in EU–US relations during the Bush years. Two authors go so far as to claim that ‘excluding the US intervention in Iraq in 2003, climate policy is the most prominent example of a transatlantic rift … since WWII’ (Ochs and Sprinz 2008, 144). In March 2001 Bush announced that he would neither be submitting the Kyoto Protocol to Congress, nor developing strategies to meet the US’ obligations under Kyoto. It was one of his several famous ‘fatally flawed’ treaties. The administration expressed its scepticism regarding the state of scientific knowledge about climate change, emphasised the costs to the US economy of limiting emissions and made much of the alleged inequities of their having to act while fast-growing developing countries like China and India did not. While the claims about the science of climate change have abated since around 2005, the other arguments remain dominant in US discourse.

Meanwhile, the EU has moved unquestionably into a position of leadership on climate change (Christiansen and Wettestad 2003; Schreurs and Tiberghien 2007). It has done so in part simply by filling the void created by the US withdrawal and in part by actively deciding to go ahead in spite of US defection (see also Brunnée and Levin 2008, 59). This leadership has a number of elements. First, as a result of EU diplomatic activity—in particular persuading Russia to join, holding out World Trade Organisation (WTO) membership as both carrot and stick—Kyoto came into force in the first place. Second, the countries with obligations to reduce their emissions under Kyoto look likely overall to meet their emissions reduction obligations under the treaty. Admittedly, at the international level, this is at least in part due to quirks of the Kyoto accounting system, in particular the ‘hot air’ available since ex-Soviet bloc countries were given more allowances than they needed. Nevertheless, this has enabled the EU to maintain some sort of credibility for the multilateral process. Third, the EU has worked hard to make the Kyoto ‘mechanisms’—emissions trading and particularly the Clean Development Mechanism (CDM)—work. It made the running in the details of the development of operational rules of the Kyoto mechanisms. It has also created, through the way it has linked its own Emissions Trading Scheme to the CDM, the demand in the market that has made these mechanisms such a success of the Kyoto Protocol, at least in institutional terms. In particular, the CDM has gone from ‘Kyoto's surprise’ (Werksman 1998) to an extraordinary success story in terms of institution building, trading already by late 2007 over three times as much carbon than predicted for the end of the Kyoto commitment period (2012). Significantly, this has produced a wave of investment in projects in developing countries; investment in clean energy through the CDM now dwarfs that going through the World Bank, for example.

EU leadership has helped keep up momentum to build further multilateral action on climate change. As negotiations for a post-Kyoto regime have started, the EU has announced a unilateral intention to cut its own emissions by 20 per cent by 2020, as well as a series of ancillary targets to meet this goal. It has also announced that this 20 per cent will automatically become 30 per cent should other industrialised countries join in creating a multilateral agreement to succeed the Kyoto Protocol. Furthermore, it has announced its intention to keep linking its internal target to international mechanisms for offsetting emissions and creating international investment in greenhouse gas mitigation in other countries (in particular developing countries). So the EU is at the forefront of driving forward a multilateral process within the UN system. EU members have also ensured the move of climate change into other multilateral fora, most prominently perhaps with its place in G-8 summits at Gleneagles and Heiligendamm under UK and then German leadership.

By contrast, the US under Bush formed the Asia Pacific Partnership on Clean Development and Climate in July 2005, with Australia, Japan, China, Korea and India (joined in October 2007 by Canada under its new Conservative government). While many members of this have ratified Kyoto, and they claim not to undermine the Kyoto process, it has been widely seen as an attempt to weaken collective action on climate change. Its express focus is on technology co-operation rather than creating obligations to limit emissions (BBC 2005; Oliver 2005).

Domestically, the Bush administration has done remarkably little to address climate change. Its most prominent announcement was for an ‘intensity-based target’—that is one to reduce the emissions intensity per unit of gross domestic product (GDP), by 18 per cent between 1990 and 2012. This proved in fact to be simply the business-as-usual rate of reductions of intensity in the US economy; no policy actions were needed to achieve this, and absolute emissions would still go up considerably. There have then been a series of policies which involve increased R&D spending on particular technologies—fuel cells and bio-fuels, carbon capture and storage, in particular. With existing available bio-fuels, notably corn-based ethanol, the administration increased subsidies considerably in its second administration. ¹

In the Bush era, then, transatlantic climate relations can be regarded largely as a stalemate. The two sides adopted different, conflicting strategies, and occasionally made pot shots at each other over them. But this conflict remained at the rhetorical level, and in terms of practice they broadly let each other go their own way. The Bush administration did not act as an obstructive force in UN climate negotiations, unlike for example Saudi Arabia. It continued to attend Kyoto meetings as an observer, as well as UN Framework Convention on Climate Change ones as a party, and to play a role in discussions about a range of aspects of the regime. The most acute conflict within the regime, over the precise rules for operationalising Kyoto, in fact occurred while Clinton was still in office, at the 6th Conference of the Parties in The Hague in December 2000. At The Hague, the talks broke down completely, but as they resumed after Bush had taken office, agreement was reached. At the other end of the Bush regime, at the COP in Bali in December 2007, Bush's negotiators threatened to block a deal on a ‘Bali road map’, but in the end relented, allowing negotiations to go forward on emissions reductions after 2012. But at the same time, the Bush administration played no active role in helping the multilateral climate regime develop in a constructive fashion.

The EU–US Relationship over Climate Change: Continuity, Change and Power Politics

So as in other areas of transatlantic relations, the EU and US have experienced significant conflict over climate change, and their strategies for dealing with it, even their identification of it as a thing to be dealt with, have differed significantly. Like in other issues (see for example Peterson and Steffenson 2009, this issue), the US has suffered a significant loss of credibility. But compared to other issues, such as terrorism, the global economy and so on, in EU–US relations over climate in the Bush era, two things stand out as rather different.

First is that the Bush era in the US is much more of a continuity than a clean break (see also Busby and Ochs 2005; Falkner 2005). At the rhetorical level, there was manifestly a distinct shift from Clinton to Bush. The Clinton administration, especially his vice-president, Al Gore, made much noise about climate change. It bargained hard in the two-and-a-half years of negotiations before Kyoto, ensuring that what have become known as the ‘Kyoto mechanisms’ were in the treaty. These were designed to give industrialised countries flexibility in being able to meet their commitments through trading allowances among themselves, engaging in joint projects to limit emissions or offsetting their emissions with investments in developing countries. Gore went personally to Kyoto and authorised US negotiators to soften their stance on various issues and approve a 7 per cent cut in US emissions in the treaty. In EU–US relations, there was significant conflict in particular over the ‘flexibility mechanisms’, with the EU opposed to emissions trading and what became the CDM. But this was very definitely conflict within a shared sense of the overall goal—a multilateral treaty focused on legal obligations for countries to reduce their greenhouse gas emissions. By contrast, Bush declared himself hostile to Kyoto and sceptical about the science of climate change.

But behind this rhetorical shift, the transition from Clinton to Bush was much smoother. Despite Clinton's rhetoric, the commitment of the US to a multilateral process was in practice only skin deep. ² The US Senate had, in the Byrd-Hagel resolution, already passed a resolution 95 to 0 that stated that the US ‘should not be a signatory to any protocol’ that would:

Behind Byrd-Hagel was a powerful industrial lobby that had campaigned hard against Kyoto in particular and action on climate change more generally. Organised principally through the Global Climate Coalition, US industry engaged in a deliberate strategy of scientific misinformation to undermine popular belief that climate change was occurring and a threat, making claims about the costs of reducing emissions (both at the overall level of the economy and to individual consumers) which made them look astronomical, and creating front groups (such as the Coalition for Vehicle Choice) to suggest a broad hostility to action on climate change. ³ Owing to the open character of the US political system in relation to lobbying, the Global Climate Coalition had good access to people in Congress, both Republicans and Democrats.

As a consequence of this pressure, Clinton had a number of initiatives, notably a proposed tax on energy, destroyed in Congress, and had scaled back his ambition in other emissions reduction activities (hence in part his insistence on flexibility at the international level), in favour of a series of long-term technology development programmes (like the Partnership for a New Generation of Vehicles) which look very similar to the programmes later developed by Bush. Negotiators at Kyoto knew in practice that the US would not be able to ratify it, at least under current political conditions, and that Gore was playing a ‘two-level game’, permitting other countries to go forward with the structure of a regime which the US might be able to join later on, and reasonably ambitious emissions reduction goals, without risking severe political backlash in the US. So the US, despite having been the principal architect of Kyoto, was never really ‘in’ it, and the shift to Bush thus contained few surprises about the substance of the US’ approach.

As a consequence, the post-Bush era is likely to be characterised by ongoing conflict between the EU and the US. This might be surprising since there appear to be very significant moves in the US towards developing a more active climate change policy. ⁴ Both presidential candidates distanced themselves from Bush's approach, stated they were in favour of binding targets to reduce US emissions and proposed emissions trading systems (referred to in the US as ‘cap-and-trade’ systems) to deal with US emissions. The congressional elections in 2008 look likely also to have produced a new cohort of members more favourable to environmental concerns. Congress has also had a series of bills to introduce a cap-and-trade system (McCain was the proposer of one of the prominent early ones), which have now crystallised to one proposition, the Lieberman-Warner Bill. This failed to get to final consideration on 6 June 2008, but the voting—48 to 36 in favour of the bill, was significantly higher than support for previous climate change legislation. There is now sufficient legislative momentum behind such a proposal to suggest that legislation is highly likely to be passed, perhaps by 2010, and in force by some time in 2012. Behind the legislative moves are a series of regional initiatives for cap-and-trade systems (notably in California, and in the north-east with the Regional Greenhouse Gas Initiative (RGGI)—pronounced ‘Reggie’—which became operational in September 2008), increasing pressure from corporate actors, notably through the US Climate Action Partnership as well as from institutional investors. In part as a result of this pressure, even Bush softened his stance, for example shifting positions significantly at the G-8 summits in both Heiligendamm in 2007 (Hunter 2008, 83) and Hokkaido in 2008 (Wintour and Elliott 2008). At the latter, he accepted a statement which said that G-8 members would ‘consider and adopt’ a 50 per cent cut in carbon emissions by 2050. While there is much ambiguity here—especially the question of what level of emissions is being cut in half—this is nevertheless a big shift from what Bush had previously agreed to.

Again, behind this rhetorical shift, now backed by legislative action, significant continuity from Bush to his successor can be expected. The argument that developing countries need to take on emissions reduction commitments is still strong in the US, which will remain a stumbling block in multilateral negotiations. ⁵ In addition, the timing of post-Kyoto talks in relation to the US election and the legislative time frame will create problems for negotiators aiming to have a post-Kyoto agreement negotiated by the Conference of the Parties to be held in Copenhagen in December 2009. There looks to be very little chance of having the legislation to establish a cap-and-trade system in place by that date (commentators are suggesting early 2010 at the very earliest). ⁶ More significantly, it is clear that US legislators take very little account of developments in the multilateral regime in designing their own system, which will produce difficulties when the negotiations get serious, in part because of the second difference between climate change and other issues.

The second difference from other aspects of world politics, perhaps more important than the continuities of the situation in the US between Bush and his successor, is precisely that in the multilateral negotiations the EU is currently the unquestioned leader in the climate regime. The problem as the US comes back to the multilateral table more seriously, as all other actors want it to, is precisely that the US faces a diplomatic context where there is another acknowledged leader already in place, and where there is already substantial momentum behind a regime structure which the US no longer feels it owns. There is thus an interest in bashing Kyoto in the US, something which EU officials are conscious of having to counter. ⁷ Indeed, certain commentators have started to talk about Kyoto as a ‘Eurocentric’ regime, a bizarre turnaround since its basic institutional features all exist at the insistence of the US.

In the US, there is a broad-based attack on Kyoto and in particular its ‘flexibility mechanisms’. This is not confined to the right-wing think tanks, ⁸ where such attacks might be expected, but includes a good number of prominent academic writers on the climate regime who cannot be regarded as Bush stooges or climate deniers (Haas 2008; Wara and Victor 2008). Such attacks frequently contain significant factual errors, reinforcing the impression of a politically driven agenda. ⁹ They tend to focus on the CDM, arguing for example that it has ‘the potential to flood the market with cheap credits’, and thus undermine the credibility of the commitments made by industrialised countries (Pizer 2007, 282)—whereas it was precisely the promise of significant cost reductions which made the US argue for such mechanisms in the first place. ¹⁰ They also argue that Kyoto has failed simply because the US is not a party (Ormstead 2007, 173; Victor 2007)—hardly the fault of a regime which the US designed but refused to join. It has the quality of the retrospective arguments about the League of Nations—a US-designed agreement that the US decided not to join, and which then was deemed to have ‘failed’ without the key political actor that might have made it work being involved.

Realists would have an easy explanation for these attacks on Kyoto: that an important dimension of EU–US relations over climate change is a rather simple one of hegemonic rivalry. The perception in the US is still that, on climate change as in other cases, it does not need to take account of multilateral developments in its absence, and can decide unilaterally its preferred approach and impose it externally. At the outset, the Bush regime thought it could simply kill Kyoto by not ratifying it—Condoleezza Rice stating bluntly in a meeting with EU officials in early 2001 after the US pull-out, ‘Kyoto is dead’ (quoted in Ochs and Sprinz 2008, 151). One effect of dominance is that US foreign environmental policy has not been conditioned by international circumstances but rather by domestic sources (Falkner 2005); this is unlikely to change rapidly. But while the US might be able to impose its will in relation to other regimes, their ability to do this is far from clear in relation to climate change—Rice's claim proved to be simply hubris. In part this is because the ‘carbon market’ has developed a quasi-autonomous dynamic, and certainly its participants (including many US finance houses) find it impossible to imagine a post-Kyoto regime without carbon trading, and something like the CDM in particular, at its core. So there is significant institutional momentum behind a regime with which the US is by now rather ill at ease, despite being its original driver. But it is also because the EU has become accustomed to its leadership role and is far less likely to accede to US demands than it did in 1995–97 during the Kyoto negotiations. It is also more genuinely ‘hegemonic’ in this area—its leadership on climate change is regarded broadly as legitimate—whereas the US has a lot of work to do in this area to have anything like the legitimacy necessary to qualify as a hegemon; at present it has only crude, negative veto power that it can rely on. So the character of EU–US diplomatic manoeuvrings is rather particular to climate change: it is not a simple case of the EU resisting or adapting to US pressure, but rather both having to adapt to the leadership claims of the other.

Some of this complexity can be understood through examining the pressures within the US for action to reduce emissions. In part (it would be an exaggeration to say more than this), such pressures come from the competitive pressures US firms experience because they are not getting the sort of policy support for the development of renewables, energy efficiency measures and perhaps specifically financial markets (in the form of carbon market development) that firms in the EU receive. Some of the moves within the US, for example the development of Renewable Portfolio Standards, which require utilities to have a certain proportion of their energy supply from renewable sources, can be understood in this context. ¹¹ But it is not only diffuse competitiveness pressures which create this ‘spillover’ effect in the US; the EU and many individual EU member states have specifically worked with political forces in the US that work to undermine the Bush position. Officials have been brazen about the strategy of explicitly ignoring the federal level ¹² and going directly to friendly states in the US and working to build technology co-operation between them, to help develop cap-and-trade systems and to design those systems in such a way that they maximise the possibility of linkages between the various emissions markets once the US comes back to the table. They have done so directly but also through ‘paradiplomacy’, using groups like the Climate Group and the International Emissions Trading Association or individuals from prominent carbon market firms. Such an approach is also designed to minimise the risk of resistance to policy measures in Europe itself—by showing the utility of those policies in persuading others to act. The UK–California partnership is the best known of these. ¹³ In October 2007, the EU announced the establishment of an International Carbon Action Partnership, which included a number of US states, which is designed to ensure that the emerging emissions trading systems are commensurate with each other, as well as to share best practice (Brunnée and Levin 2008, 65–66). ¹⁴ Non-state actors have also worked hard to keep a transatlantic dialogue going; again, not only working with the Bush administration but with states as well as US business groups and non-governmental organisations (NGOs). Particularly important here has been the German Marshall Fund of the United States, which has fostered a series of such initiatives (e.g. Tänzler and Carius 2002; Goldmark and von Weizsäcker 2007).

The Political Economy of EU–US Climate Relations

As suggested above, the simplest reading of these competing leadership claims is a realist one, which would suggest that we are in a situation of hegemonic rivalry, and can expect prolonged conflict. Josef Joffe, for example, interprets Kyoto, and especially the continuation of the regime after the US pulled out, precisely as a sort of diplomatic balancing to contain US power (Joffe 2002, 176). If this is the case, then a lot depends on our assessments: (i) of the general state of US relative power; and (ii) the fungibility of that power across issue areas. Robert Falkner (2005) gives the fullest account of the implications of US power for global environmental politics, and while he does argue that power is not particularly fungible into environmental negotiations, his account proceeds on the basis that the US is still hegemonic overall. We would therefore expect at the least that US threats of veto power would be reasonably effective. However, if one is more inclined to believe that US power has been declining, despite the ‘unipolar’ moment of the post-cold war world (and the appearance of hyper-power in the Iraq invasion), then the situation becomes more complex, as I will try to show later on.

Furthermore, apart from the standard theoretical objections to this approach (that it reifies the state as having ‘an interest’, that it neglects or underestimates the constraining role of international institutions and that it ignores or misunderstands the relationship between states and the global economy, to name just three of the most significant ones), realism provides only a rather thin account of the character of the diplomatic conflicts which ensue, and is unable to explain various specific aspects of this politics. Underneath this diplomatic level are complex political-economic phenomena. I provide here three different readings of what is going on and thus how this relationship may evolve: the relative lack of importance of transatlantic relations to the EU in relation to climate change; the political economy underpinning diplomatic conflicts between the two regions; and the ever-growing complexity of global climate governance which renders moot the importance of strictly diplomatic bargains.

A first point to make, still broadly consistent with realist accounts of international politics, is that in the domain of climate politics, from an EU perspective, the US is not in fact that important. Transatlantic relations are nowhere near as central to the EU's pursuit of its goals as they are in the security, trade or other domains. To be sure, at one level the EU knows that the US needs to be ‘brought back into the fold’ for the simple reason that it accounts for around 18 per cent of global greenhouse gas emissions ¹⁵ and is thus crucial to global greenhouse gas abatement. The EU has got used to playing multilateral climate politics with the US as a flea in the ear rather than a school bully. The EU has not really found its dealings with other countries over the implementation of Kyoto undermined by the US presence in negotiations. The EU has also been able to use climate politics to build important diplomatic, investment and trading relationships, in particular with China and India, the two largest recipients of CDM investments. Those countries have now got used to a sort of regime that generates noticeable investments in new technologies. In fact, it might be more important to the EU's goals to continue to build relations through the climate regime with the large developing countries, particularly China, India and Brazil, than to obsess continually about adapting to the US’ desires to reorganise the regime (Christoff 2006, 850–854).

Here it is thus a question of the EU having elaborated a strategy, integrated the rest of the world in this strategy and currently trying to work out how to make it so that the US does not undermine that strategy, either by not containing its own emissions and/or by accentuating the competitiveness worries which continue to limit the EU's approach. The transatlantic relationship is largely a secondary question, however—the EU's strategy has been elaborated without worrying about the US reaction. On the US side, US actors are now in a game of playing catch-up, a game they are not used to.

But beyond the diplomatic indifference to US preferences, there are underlying competitive struggles between the two regions that are a large part of the terrain on which climate politics is being fought. For this, a useful way to go beyond the realist account is to read it through the lens of Kees van der Pijl's notion of competing forms of capitalist organisation (Van der Pijl 1998). Van der Pijl argues that capitalist history can be characterised as a series of rivalries between ‘Lockean heartland’ and ‘Hobbesian contender’ states, with the former being typically laissez-faire, open liberal economies, and the latter more protectionist. In the current period this entails a rivalry between Anglo-American liberal and European social-democratic/corporatist forms of capitalism. These forms are simultaneously in competitive rivalry with each other and co-ordinated through a series of multilateral institutions (Bretton Woods, etc.) and transnational class organisations (currently dominant is the World Economic Forum).

In the climate change context, this can be reinterpreted to signal an emerging distinction between what might be called ‘carboniferous capitalism’ vs. ‘ecological modernisation’ (Dalby and Paterson 2008). The former is the legacy of a form of development based on cheap fossil-fuel energy resources and extensive land development. Its power is concentrated in the US, Canada and Australia, and (with the exception of the UK) corresponds closely to van der Pijl's Anglo-American liberal heartland. The latter (again with the exception of the UK) corresponds reasonably closely to the corporatist/social-democratic states in continental Europe. ¹⁶ Indeed, writers on ecological modernisation suggest that the corporatist policy styles prevailing in Europe are more conducive to the development of policies favouring ecological transformation of capitalist economies (Mol 1996; Dryzek et al. 2003). Frederick Buttel suggests persuasively that the inability of the US to generate processes of ecological modernisation has led US academics involved in such debates in environmental sociology to be sceptical of claims of ecological modernisation per se, reflecting the depth of the structuring effect of the two divergent forms of capitalism; the academics involved (like Allan Schnaiberg) are at the opposite end of the political spectrum of those attacking Kyoto, yet their positions are to an extent informed by similarly parochial visions centred on the US (Buttel 2006, 175–177).

In this context, climate change politics is becoming a key terrain within which economic competition between these two models is being played out. In one, the political-economic logic is to promote a set of aggressive constraints on carbon emissions while promoting alternative energy resources and significant increases in energy conservation and efficiency. While there is still significant debate within this bloc of the competitiveness problems posed by emissions reduction efforts, either through the increased costs imposed on certain industries highly exposed to international competition (aluminium is the classic case), or through the problem of ‘carbon leakage’—emission constraints in Europe having the effect of industries, and thus emissions, migrating outside the zone—in general, the pursuit of ecological modernisation is precisely understood as a strategy to promote European competitiveness, making industries more efficient in their use of energy and generating innovation in energy and transport systems. The UK is a classic case here, with UK policy-makers making it explicit that the pursuit of emissions reduction and the promotion of mechanisms like emissions trading were designed to favour the competitiveness of the UK economy (Barry and Paterson 2004). The German government has also articulated climate change clearly as a question of a ‘third industrial revolution’ transforming the economy towards a low-carbon future (Brunnée and Levin 2008, 62). In this sense, from the EU point of view, Kyoto-like actions are precisely designed as competitiveness strategies, thus explaining in part the indifference to US preferences. ¹⁷

In the carboniferous capitalism bloc, dominated by the US, while aggressive development of new energy technologies is still pursued, this takes a rather different form in terms of the sorts of policies. More importantly, the element of binding constraints on carbon use, and the use of prices and markets to affect behaviour and stimulate innovation and investment, are more or less completely absent. Rather, in Bush's climate policy in particular, a series of policies have been developed to promote wind and solar energy, as well as fuel cells and ethanol production to replace petroleum. New energy sources are subsidised either through production subsidies (as in bio-fuels) or through technology development without any constraints on fossil-fuel use being envisaged. This in effect is a continuation of a growth strategy premised on cheap and abundant energy sources—the state is simply switching (or more precisely just adding) new subsidies to new energy sources to supplement the old. This growth model is premised on the availability of cheap inputs for all industries as a means to out-compete other economies.

From this interpretation, the conflict between these growth models is likely to persist. Despite recent electoral changes in Australia and the likely change in approach in the US after the presidential election (although no change in Canada is likely in the short term, except in so far as the present Canadian government simply slavishly follows the US government position as it has to date), ¹⁸ the policy premise in the US will be unlikely to generate the sorts of constraints on carbon emissions which will turn it into something resembling the ‘ecological modernisation’ approach prevailing in Europe. But if one makes the connections to other pertinent areas of world politics, then the continuities between Bush and his successor become stronger. In particular, US geopolitical projects to control oil supply and production are unlikely to be relinquished (despite Obama's professed opposition to the Iraq War), reflecting the continued ‘carboniferous’ character of US capitalism, as well as, more crudely, US military capacity to engage in such interventions. Europeans are likely to continue to be wary of such adventurism (see Webber 2009, this issue), in part because they are not in a position to participate in it, in part because their own interests are directly threatened (including in effect being appropriated by US interests—as the switch in oil concessions in Iraq shows), but also in part because their growth strategy and dominant business interests are focused on a post-petroleum future to a much greater extent.

The other consequence of thinking in this way is that it suggests that the key conflicts will be over those areas of the respective regulatory systems, and the attempts to internationalise them in the post-Kyoto regime, where competitiveness concerns and competing models of growth are most acute. Two such conflicts can already be discerned. The first is over EU proposals to include aviation in the EU Emissions Trading Scheme (ETS) from 2011 onwards for flights within the EU and 2012 for any flights (whether of EU airlines or not) from or to EU airports (Parker 2007). Aviation is perhaps the classic case of carboniferous capitalism becoming embedded at global levels, with the Chicago Convention of 1944, which established the International Civil Aviation Organisation (ICAO) and the main rules still guiding international aviation, expressly banning the imposition of customs duty on aviation fuel, as well as insisting that any regulations or charges on aviation be ‘non-discriminatory’ between national and international firms. ¹⁹ Fuel for international aviation remains the only fuel that is more or less untaxed. The ICAO Assembly in October 2007 issued a resolution (on which the EU put a reservation) opposing the imposition of emissions trading schemes on third-party airlines without the consent of the third-party state (ICAO 2007). States that are members of ICAO but not the EU have already signalled that they intend to challenge it in the ICAO regime (ICAO 2007). But the proposal may also be raised in the WTO context, on the basis that the inclusion of aviation will give an unfair advantage to EU airlines over international competitors that operate in the EU, given that the former will have both cost and informational advantage in operating within the constraints of the ETS.

The second key competitiveness conflict, from this perspective, will be over how different regions attempt to prevent carbon leakage. The EU has started to discuss the possibility of border tax adjustments to prevent such leakage from the ETS. As the ETS puts a price on carbon for industries within the EU, a border tax adjustment would put a similar price on imports into the EU zone within those industries. Cement, aluminium and steel, for example, would be key industries where such leakage effects have been anticipated, and this has been one of the reasons they (apart from steel) have not been included in the ETS up to 2012. But some of the proposals in the US for cap and trade also include proposals for border tax adjustments for the same reasons. The Lieberman-Warner Bill has such proposals, for example (US Senate 2008, s. 6006). ²⁰ But a trade war over these is highly possible, as countries outside the regulated zones contest the border tax adjustments in the WTO. ²¹

But even this way of thinking, focused on the political economy of the diplomatic conflicts between the two regions, neglects an important feature of climate politics. Specifically, as the US emerges again in multilateral climate politics post-Bush, the whole field of climate governance has transformed radically since the US was last closely involved. This complexity is driven by precisely the sort of regime created at US insistence in 1997, which focuses precisely on creating a particular pattern of capital accumulation around carbon markets, which could (if properly designed and governed) favour ecological modernisation processes.

The multilateral regime has itself become immeasurably more complex, in particular with the institutional innovations in the Kyoto Protocol, notably the CDM. But it has been added to by a set of multi-level effects (interactions between national governments and the Kyoto system, and the EU level as well), and more importantly perhaps by a huge range of public–private partnerships and private, market-led governance. ²² What has now come to be known as the ‘carbon market’ was by 2007 a $64 billion industry according to the World Bank (Capoor and Ambrosi 2008); trading emissions allowances in the UN system, the EU system and between the two, with national and sub-national systems developing, but also with the whole panoply of derivative instruments supporting those markets.

The markets have also expanded beyond the formal regulatory markets by creating a whole series of financial instruments which are not guided by state regulation but by firms’ needs for good PR, individuals’ desires to offset their emissions, and so on. This voluntary market has expanded extremely rapidly and now has its own sets of governance mechanisms, standards governing how to calculate the emission reductions from the various projects that are created by the money generated.

Beyond the carbon market itself, investors have also generated a series of attempts to govern the practices of firms they invest in. The largest of these is the Carbon Disclosure Project, a consortium of institutional investors with $47 trillion of assets in 2008, which operates by asking the world's largest firms to disclose their greenhouse gas emissions, their exposure to climate effects or to regulation of greenhouse gases and their strategies to reduce their emissions. The intent is to enable investors to use that information to withdraw from investments in CO₂-intensive activities, and/or become activist in firms from which they cannot withdraw, to affect their investment strategies to reduce emissions.

In other words, climate politics is no longer solely about a diplomatic bargain between states. It is unclear if it is even principally about such a bargain. Many of the governance projects mentioned above have a quasi-autonomous dynamic, depending little on the resolution of the multilateral negotiations. The EU has in particular said that even if post-Kyoto negotiations ‘fail’, it will continue to prop up some sort of linkage between its own internal policies to limit emissions and a global carbon market focused on investment in emissions reduction in developing countries, a role currently filled by the CDM.

But at the same time, to the extent that continued climate governance is market led, something to which the EU and US are likely to agree, at least rhetorically, the markets that have developed rapidly do depend both on continued decisions in multilateral fora and on particular rules that create a ‘single’ global carbon market. The EU linking directive that links the ETS and the CDM is the paradigm here perhaps. A key worry from this point of view (not least for US financiers who have sunk considerable effort into the carbon market) is that US legislators pay virtually no attention to international trends and the question of linking to global markets in designing their own systems.

Nevertheless, the overall effect of the complexity of global climate governance is that less depends on a diplomatic bargain between the EU and the US than would otherwise be the case. This complexity also in effect operates as a sort of structural change that limits the capacity of the US to impose its will on others. The most it is likely to be able to do is to act unilaterally to create its own regulatory systems that only have weak connection to the global carbon market.

Conclusions

In the short-to-medium term, the likely outcomes of this set of features of EU–US climate politics could be a continued stalemate, where the EU and the rest of the world continue to build a post-Kyoto regime around increasing levels of cuts in emissions and, despite occasional protests to the contrary, the US continues to do little of substance to reduce its emissions. The likelihood of this is at the moment small in my view—the signs from the build-up of pressure from states, Congress and significant sectors of business, plus the political capital spent by McCain and Obama while in Congress (less on the campaign trail although McCain did get his erstwhile climate-denying running mate Sarah Palin to acknowledge the human causes of climate change) suggest they will not be likely to backtrack to a hard-line position. Early signs after Obama's election support the interpretation that he wants to build the US reputation and leadership on climate change.

The more complex scenario is that the US comes back to the table, but how can it negotiate around emissions paths that have now become significantly different? EU emissions are likely to meet the Union's Kyoto target of −6 per cent while US emissions are up around 16 per cent, compared to 1990 levels. The EU's proposals for post-Kyoto are −20 per cent for 2020 (and −30 per cent if other states join in), which is probably impossible for the US to agree to, even with expanded flexibility mechanisms (which would encounter other political obstacles probably, notably from within the US itself). ²³ It is possible to imagine some fudges—for example using different baseline years for different countries, so that it can appear that each country is undertaking a similar burden, but these negotiations will nevertheless be complex—a deal where it looks like the EU is reducing emissions from 1990 levels by 20 per cent while the US only agrees to stabilise its emissions at 2008 levels is unlikely to be widely regarded as legitimate. The risk for climate governance as a whole is to do with the fact that the strategy of building a global carbon market to manage emissions reduction is highly dependent on governments setting reasonably aggressive targets—markets will not develop without the scarcity induced by strict targets.

More broadly, the implications of the realpolitik dynamic and the competing forms of capitalism is that, the US will be tempted to continue to put pressure on to change the overall architecture of the climate regime, precisely because it is one which is now associated with European leadership, and one which EU countries have built an economic strategy around. The current broad debate on the ‘architecture’ of climate governance is good evidence here: it consists for the most part of US academics starting from the presumption that Kyoto has ‘failed’ (in part because the US has not joined) and thus a new architecture (implicitly, more conducive to US interests) is required (e.g. Aldy and Stavins 2007).

Whether such attempts succeed depends a good deal on our general assessment of the state of US power here. If the US is still hegemonic, or perhaps more precisely hyper-powerful, it is possible to imagine that this could ease the way for future negotiations, as the US would have the means to cajole and bully other states, in particular the EU, into accepting its position, and into absorbing the costs of abandoning various elements of the regime currently in place which would probably ensue (given that its preferences are likely to be for abandoning features like the CDM). But there are good reasons for believing that the power of the US evident in military affairs masks, or even attempts to compensate for, a broader structural decline. Giovanni Arrighi's arguments about this are to my mind particularly useful (Arrighi and Silver 1999; Arrighi 2005). Integrating realist accounts of hegemonic rises and falls with Marxist accounts of the dynamics of capital accumulation, Arrighi shows that the crisis of US power is intimately linked to the over-accumulation of capital in the US, and the efforts to find sources of new trajectories of accumulation both within the US (the new economy, etc.) and outside (investment in East Asia, most recently ‘accumulation by dispossession’ in Iraq). In this context, the Bush regime can be interpreted as representing the carboniferous bloc based around coal, oil and automobiles (a bloc central to Fordism but much less central to neo-liberalism), attempting to regain its position lost since the 1970s (Dalby and Paterson 2008). ²⁴ In this case, the potential for a transformation of the US position is much greater, since it has distinct limits both in its potential to find new sources of accumulation (as it largely involves simply dispossession of others rather than cycles of investment and growth) and in terms of its capacity to be regarded widely (even in the US) as legitimate.

But if, as suggested above, following writers like Arrighi, its military adventurism and unilateralist tendencies are attempts to compensate for a relative decline, then the diplomacy could be expected to be much more complex and protracted. On the one hand, the US has less ability to impose its preferences on others. On the other, those other states, led by the EU, have at the same time in this area got used to a regime without US involvement. Finally, there are significant elements of global climate governance which by now exceed the parameters of the narrowly inter-state bargains, and the pressures on all negotiators to work within the constraints created by the development of carbon markets will be strong in determining the scope of possible post-Kyoto agreements.

What are the implications of these conflicts for EU–US relations, and international politics more generally? Many analysts still operate with at least an implicit distinction between ‘high’ and ‘low’ politics, where environmental ‘issues’ (the dismissive term ‘issues’ denotes precisely their unimportant character) are strictly secondary to the ‘real’ matter of international politics. John Mearsheimer is explicit in this, in discussing ‘new’ security threats and placing climate change strictly as a ‘second-order problem’ (Mearsheimer 2001; Lacy 2005). Other realists recognise the importance of climate politics, but only in the sense that the US needs to engage in certain multilateral projects in order to maintain the legitimacy of its dominance (Walt 2002, 143, 51). But there is a clear set of interlinkages which climate change is starting to produce which render this assumption problematic. The most obvious is with oil politics. Many commentators, even in the US (notably Thomas Friedman, see Friedman 2007), now routinely make the connections between the dramatic rise in oil prices, adventurism in Iraq and climate change policy. High oil prices now make it possible to frame carbon emissions reduction as sensible economically, environmentally and in security terms (Dalby and Paterson 2008). Should they continue to be high, this might in fact make the pursuit of EU–US co-operation on climate change easier. In terms of EU–US relations, these intertwine with the two different economic strategies outlined above, and pursuing climate policy can reasonably be expected to affect the way that oil politics is pursued—to the extent that an ‘ecological modernisation’ strategy is adopted more aggressively, securing control over oil resources by military means makes progressively less sense. A common climate change policy, if sufficiently aggressive in pursuing emissions reduction, could thus in the longer term help to reduce EU–US conflict over the US’ military adventurism.

The other obvious linkages are with trade politics and the global economy more generally. Some have already been mentioned—the potential for significant trade conflict over aviation emissions and/or over border tax adjustments to deal with the costs of carbon taxes or emissions trading systems. The impact of even the modest support for bio-fuels (and more precisely, bio-fuels based on corn-based ethanol) on food prices with potentially catastrophic effects, especially in the developing world, is another such interlinkage, where particular responses to climate change (albeit ones mediated heavily by the traditions of agricultural subsidy, especially in the US) have already started to have an effect on discourse about the important issues in the global economy, if not yet on how that economy is actually managed. Given that this is essentially a conflict produced by agricultural subsidies, it will in all likelihood be mediated in part through debates in the WTO.

So the development of global climate politics more generally, and the EU–US relationship as a major part of that whole, will have significant effects not just in its own domain, but also way beyond. While the end of the Bush era certainly opens up possibilities for more constructive relations between the two parties, it also opens up new possibilities for conflict over the means by which climate change mitigation is pursued, and the question of leadership itself in the climate regime.