Copenhagen - The long view beyond Copenhagen for North America

North America: Amid the renewable energy sector's broad disappointment following the Copenhagen climate talks, many observers note a handful of positive outcomes. And some say that the US wind industry will press forward in the absence of a binding deal, writes Diane Bailey.

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While December 2009's Copenhagen climate talks failed to give investors a clear signal of a long-term political commitment to decarbonise the energy sector, industry experts agree that US President Barack Obama's leading role in brokering the deal is a positive step forward.

"Clearly, climate change is an issue he understands and cares about tackling, and hopefully his actions send a message to other lawmakers that the US must be part of the solution," says Jan Blittersdorf, CEO of Vermont-based NRG Systems and one of the participants in a panel discussion examining the state of the global wind industry held during the second week of the negotiations.

"Whether we make any progress this year is up to Congress," he continues. "Their ability to pass meaningful climate and energy legislation will have a much greater effect on the growth of the wind industry in the near term."

The US House of Representatives has already passed legislation to set a cap on carbon and establish a national renewable electricity standard to spur green technology development, and Senate backers are hoping to ratify their own version in the coming months. While some observers think the lack of a solid deal at the Copenhagen talks in December could make it tougher to convince fence-sitting lawmakers to pass emissions-curbing legislation, others see the Copenhagen Accord - a draft document setting the course for future international cooperation on climate change - as a useful step towards mustering the 60 votes needed to move the bill through the Senate.

"Getting countries like China and Brazil and India to make the commitments that they've made, especially to allow verification that those commitments are actually working, is a very big step," says Colin Meehan, a renewable energy specialist for the Environmental Defense Fund. "That opening up of developing countries is going to have a significant impact going forward on how things work out."

Balancing act

Passing sweeping climate and energy legislation this year could prove to be a difficult balancing act, however. All of the 435 House seats and 36 of 100 Senate seats are up for grabs in the November midterm elections. That narrows the window of opportunity to get things done and raises questions about whether lawmakers will be keen to tackle what is bound to be yet another a difficult negotiation, coming as it does on top of equally controversial votes on industry bailouts, massive stimulus spending and health care reform and what could be a bruising upcoming debate on financial regulatory reform. In fact, some moderate Democrats have called for Obama to abandon mandatory emissions caps and aim for a stand-alone energy bill.

"My own sense is at this time that we have strong support in the Senate to do something significant, to move towards more use of renewable energy and more efficient use of energy. I don't know that we have the votes for any cap-and-trade proposals that I have seen floated here in the Senate," says Jeff Bingaman, chairman of the Senate Committee on Energy and Natural Resources.

US domestic action is likely the biggest variable as the international community looks to the next round of global climate talks in Mexico in December, says Steve Sawyer, secretary-general of the Global Wind Energy Council.

Robert Hornung, president of the Canadian Wind Energy Association agrees. "With the Obama administration, the US has played a much more constructive role in international negotiations than had been the case under the previous administration," he says. "That's clearly positive because without the US there cannot be an international agreement. However, what Copenhagen still showed is that at the end of the day the US cannot participate effectively in terms of reaching an international agreement until it's developed a domestic decision."

After you

That US domestic decision will be of particular importance to its neighbour to the north. Canada's federal government went into the Copenhagen summit with the clear message that any climate change strategy it adopts will have to harmonise with what the US, its largest trading partner, is doing. Nothing in the Copenhagen Accord changes that, says Hornung. "There is just a tremendous amount of uncertainty," he says. "It's in part driven by the uncertainty of timing around the US. It's in part driven by uncertainty around what moving with the US really means. And it's in part a product of the fact that the Canadian government, by talking about the need to harmonise with the US, has been able to essentially avoid making any significant commitments as to when things will happen."

"If I look into the crystal ball for 2010," he says, "I expect we will see continued discussion around climate change and continued thinking about what we should be doing, but I have a relatively low degree of confidence that we will see any action. It is exceptionally frustrating for industry, and not just the wind industry, who are looking for some certainty to help them with their investment planning."

Canada does have an opportunity to show the world it is serious about renewable energy and climate change before Mexico, says Tim Weis, director of renewable energy and efficiency policy for the Pembina Institute, a Canadian sustainable-energy think tank. In June, Canada is hosting the G8 summit, which has been expanded to include a second meeting with leaders of major developing economies who are part of the larger G20. "How Canada behaves leading up to the G8 and how we set the agenda for the G8 will show what sort of priority this is for the country," Weis says.

Longer view

Despite the uncertainty, though, few see Copenhagen's failure to produce an aggressive and legally binding agreement to reduce carbon emissions as a serious setback for North American wind energy growth, at least in short term. "In the big picture, the impact of the climate negotiations directly on the industry will be something that will play itself out over a much longer period of time," says Sawyer. "There won't be an immediate impact."

Meehan agrees. "Frankly, the wind developers that I talk to on a regular basis weren't really focussed on Copenhagen," he says. "A lot of the business folks were realistic going into this. Given the pace of negotiations, certainly here in the US, nothing was going to set their industry ablaze coming out of Copenhagen."

Michael Bernier, a tax advisor at Ernst & Young Climate Change and Sustainability Services, says that even without climate laws in place, US companies are starting to get focused on their carbon footprint.

"A lot companies are realising there is going to be some sort of legislation on the cap-and-trade front," he says, "or the Environmental Protection Agency is going to regulate carbon or something. It is not going to just sort of go along without any sort of curtailment." That, Bernier adds, would figure in the minds of companies planning corporate moves such as mergers and acquisitions, as well as how they procure their energy. "It's also going to have an impact on the desire of people to have renewable energy," he says.

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