BUS604: Innovation and Sustainability

Even with the environmental decade of the 1970s and the initiatives of the Obama administration, many countries are well ahead of the United States with public policies to address global warming and other sustainability concerns.

The Kyoto Protocol adopted in 1997 in Kyoto, Japan, is an example of an international effort by world leaders to address global carbon dioxide emissions. It illustrates the complex economic, social, political, and technical challenges embedded in addressing GHG emissions globally. For instance, the Kyoto Protocol, among other items, set binding targets for thirty-seven industrialized countries and the European community for reducing GHG emissions over a five-year period from 2008 to 2012.

Although the United States is the second largest emitter of GHG, it is not a participant in the Kyoto Protocol. One hundred and ninety-one countries including China (as a developing country) have signed and ratified participation in the treaty. The Kyoto Protocols, however, are set to expire in 2012 and there is little optimism for a new treaty.

The United States has had varying support for participation in international agreements to address climate change. Vice President Al Gore was a main participant in putting the Kyoto Protocol together in 1997. President Bill Clinton signed the agreement in 1997, but the US Senate refused to ratify it, citing potential damage to the economy and job loss and that it excluded some developing countries from having to comply with the standards. George W. Bush made campaign promises in 2000 to regulate carbon dioxide as a pollutant. However, in 2001, he withdrew the United States from the Kyoto agreement as one of the first acts of his presidency. Bush believed that the Kyoto Protocol was too costly and would harm the US economy. Affecting the policy landscape was the general resistance among those who questioned the validity of the science behind global warming. And even among strong supporters of the need to take action on climate change, there is resistance to participate in global agreements. In the Cancun Climate Change meeting in November 2010, representatives from the Obama administration insisted that before signing off on a global agreement that fast-emerging economies, such as India and China, commit to reducing emissions and to an inspection process that will verify those actions.

European countries have been leaders in addressing global warming. Many of the European nations have very limited fossil fuel of their own and have high costs of energy so that measures to increase energy efficiency and to develop renewable energy make good environmental, and also very good economic sense. Germany and Spain are global leaders in wind power. Portugal in 2010 will get 45 percent of its energy from renewable sources. By 2025, Ireland, Denmark, and Britain will get 40 percent or more of their electricity from renewable sources. In contrast, the United States in 2009 generated less than 5 percent of its power from newer forms of renewable energy and has a current target for 2025 to reach 16 percent (or just over 20 percent, including hydroelectric power).

European nations' increased use of renewable sources has been supported by public policies. In the early 1990s, Scandinavian countries were the first nations to introduce a CO2 tax. More recently, in 2007, the Netherlands introduced a waste fund that is funded by a carbon-based packaging tax. This tax encourages producers to create packaging that is recyclable and was implemented to help reach the goals of recycling 65 percent of used packaging by 2012.

Sidebar

Extended Producer Responsibility

The European continent has also been the leader in extended producer responsibility (ERP). ERP is a policy to promote total life cycle environmental improvements of product systems by extending the responsibilities of the manufacturer products to various parts of the product's life cycle and especially to the take back and final disposal of the product. A principal reason for allocating responsibility to producers is their capacity to make changes at the source to reduce the environmental impacts of their product throughout its life cycle. It is essentially the producers that decide the features of the products they manufacture at the design phase of products. Rational manufacturers, when made responsible for end-of-life management of their products financially or physically, would presumably try to find a way to minimize the costs associated with end-of-life management by changing the design of their products. The establishment of such feedback loops from the downstream (end-of-life management) to the upstream (design of products) is the core of the EPR principle that distinguishes EPR from a mere take back system. Assigning responsibility primarily to one actor would also avoid the situation where everyone's responsibility becomes no one's responsibility.

While most of the European nations have been ahead of the United States in trying to address climate change with public policies, it was much more recently that some leading Asian nations have begun to take initiatives. With its rapidly growing economy and industrialization, China passed the United States as the world's largest emitter of greenhouse gases in 2006. That milestone came not only because of China's rapid growth and industrialization but also because of its heavy reliance on coal, an especially dirty fossil fuel in terms of emission of gases contributing to global climate change.

Under scrutiny globally, Chinese president Hu Jintao in 2009 called for China to reduce its carbon emissions per unit of economic output by 40 percent to 45 percent by 2020, compared with 2005 levels. China has started to move away from fossil fuels. In 2010, China along with other Asian nations that were initially slow to respond to climate change - Japan and South Korea - increased support of money into research and development of clean technologies. Because of these strategic investments, China is positioned to emerge as a global clean tech leader and perhaps diminish the United States' chances of capitalizing on clean tech manufacturing jobs and the fruits of technological innovation.

However, even with research and development investments and even if China meets its energy efficiency goal this year and its carbon goal by 2020, its total carbon emissions are still on track to rise steeply in the next decade; according to forecasts by the International Energy Agency, that is because of factors including rapid growth in the Chinese economy, growing car ownership, and rising ownership of household appliances.