Air Date: Week of November 2, 2001

Host Steve Curwood talks with author Jeremy Leggett about the business implications that could come out of talks on climate change this week in Morocco's Marrakesh meetings.

Transcript

CURWOOD: Delegates to the United Nations Convention on Climate Change are gathered in Marrakech, Morocco. Their task this time around is to find ways to implement details of the Kyoto Accord to fight global warming. The general principles were settled in Bonn, Germany last summer. The U.S. government pulled out of the talks in Bonn and is not participating in the current round either.

The Bush administration says restrictions under Kyoto would hurt the nation's economy. But some analysts say that if the U.S. continues to sit on the sidelines, its businesses will lose a competitive edge. Jeremy Leggett joins me now. He's author of "The Carbon War: Global Warming and the End of the Oil Era". He also directs Solar Century, a solar power company in the United Kingdom, and says the treaty will change the global energy markets.

LEGGETT: An argument that I think is so germane in all this is the argument of DuPont. DuPont, you might think, is a company that, you know, might be tending to drag its feet over all this. That's not the case at all. And DuPont's argument to the Bush administration is "Guys, you know, it's inevitable that one day we're going to have to join this show. And if you leave us out of it at this point, European and Japanese companies are going to be developing all the new technologies, getting all the efficiencies and cost reductions that come from saving energy, saving greenhouse gas emissions, and we're going to have to play catch up. So you will place us in a situation of competitive disadvantage."

CURWOOD: What about American multi-national companies that operate not only in the United States but in other countries of the world? How will a multi-national company be able to maneuver when it's under carbon restrictions in one country but not in another?

LEGGETT: It's going to be incredibly difficult for American multi-nationals with different regimes at home and abroad. And there is going to be a whole new area of economic activity. There's going to be a whole new section in the capital markets to deal with the value of carbon and carbon trading. A colleague of mine works at the biggest law firm in the world, Baker and McKenzie. And after the success in Bonn, which many people didn't expect, he was jammed with calls the next day from corporate clients saying, "My goodness me, we didn't think this carbon economy, this carbon trading, was going to happen after all, when America pulled out of the climate negotiations. Now it is. Can you advise us?" And with all these things there is a sense in which opportunity opens up.

CURWOOD: There's a lot of talk about ratification here. I believe that 55 countries representing at least 55 percent of industrial emissions have to sign up for this.

LEGGETT: For it to come into force. That's correct.

CURWOOD: What's necessary to be done in Marrakech for that ratification process to go forward, if it's going to go forward?

LEGGETT: Well, the real political game in Marrakech will involve three countries who have been historically allies of the United States: Japan, Australia and Canada. These are the foot draggers now. I mean, they haven't gone so far as America and pulled out of the process. They've gone along with the rest of the world. But these countries need to ratify if we're to get that 55 percent of the emissions. And they're playing a game of brinkmanship, trying to squeeze as much latitude as they can. To, for example, be allowed to count sinks, that is, forests which can take carbon dioxide down out of the atmosphere and be offset against the cutting of emissions from the primary sources of fossil fuel burning, coal, oil, and gas. So, Australia and Japan and Canada will be arguing for "get out" clauses, essentially. And the more progressive countries, particularly the Europeans, will be trying to reign them back.

CURWOOD: At the end of the day, what do you predict will happen here?

LEGGETT: Well, you know, I thought the whole thing had come off the rails after President Bush announced that he was going to withdraw. I didn't think they would have the success they had in Bonn, and I think the fact that they did speaks volumes for the level of concern in all other industrialized countries and many developing countries over this issue.

CURWOOD: The public in the United States is very much focused on the horrific events of September 11th and the war in Afghanistan. What impact do those events have on this diplomatic process and this Environmental Summit on Climate Change?

LEGGETT: I think that it's lucky that the summit is going ahead at all. I think it's not just America that people are worried about these horrific events, of course. And if you look at how the geo-politics is playing out, I think that you can only see situations that are going to favor the renewable micro-power technologies at the expense of fossil fuel, particularly oil and gas. You can't imagine anything much more vulnerable to terrorism than oil and gas pipelines coming out of the new frontier area in the Caspian Sea. All of those are going to have to go through, shall we say, difficult countries.

And then, there's bigger geo-politics. There is a case that every bomb that falls on Afghanistan is throwing petrol on a fire that can lead to all sorts of reactions in the Muslim world, including the fall of the Saudi royal family. And that will introduce a whole new dimension in security threat, threat to the security of supply in oil.

And, you know, over here in Europe-- I don't know so much about the United States-- but here in Europe, many people in the Armed Forces, in politics, are saying, as though global warming wasn't a reason for speeding up the commercialization of these renewable micro-power technologies, we've got a whole new dimension of reason for doing that now. And I think if we can move fast away from over-dependence on oil in the Middle East, you can also make a case that we're less likely to get into conflict situations that will breed more terrorists, the way many people believe this bombing is doing currently in Afghanistan.

CURWOOD: Jeremy Leggett is author of "The Carbon War: Global Warming and the End of the Oil Era." Thank you so much, sir.

LEGGETT: Thank you.

 

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