August 14, 2009 / 9:46 AM / 10 years ago

Climate pact means new business, not trade war: U.S. envoy

BONN, Germany (Reuters) - Trade wars after a planned U.N. climate deal are implausible, partly because of a surge of new business opportunities creating jobs in clean energy, the head of the U.S. delegation at U.N. climate talks said.

A process operator is seen on top of fermenters at the GreenField Ethanol plant in Chatham, Ontario, April 10, 2008. REUTERS/Mark Blinch

Jonathan Pershing also told Reuters that Washington would be able to agree a new U.N. pact to combat global warming, due to be approved in December in Copenhagen, even if the U.S. Congress has not approved new U.S. legislation by then.

He dismissed developing nations’ worries that there could be trade wars. Many poor nations fear that rich nations will set up import barriers to protect domestic industries facing higher energy bills under a U.N. deal restricting fossil fuel use.

“I think there will be questions about whether other countries are adequately acting,” Pershing told Reuters on the sidelines of the week-long 180-nation talks ending on Friday.

“And there’s going to be a question about competitiveness. But I wouldn’t think there will be a trade war. It doesn’t seem plausible,” he said. Pershing is deputy special envoy for climate change.

“One of the things I am struck by is that there is an increasingly large industrial sector that wins on these issues and frankly a somewhat decreasingly large sector that loses,” he said. “That’s actually not a bad trend to be on for optimism over the long term.”

“If you look at the Nasdaq indices and see which companies are doing well, it’s not the old 1990s high tech sector. It has been replaced by the new 2000s high tech sector which is the new energy high tech,” he said.

CARS, ETHANOL

He said there were big opportunities for companies ranging from cleaner vehicles to cellulosic ethanol. “The demand is huge,” he said.

But he added there were “real concerns” in sectors such as steel, where U.S. producers fear a flood of imports from countries such as China where energy costs could be lower if the U.S. restricts carbon emissions.

“My sense is that the concerns are about whether or not all countries will have a level field,” he said.

“The solution is to provide commitments and for China to take those on,” he said. China has recently overtaken the United States as the top greenhouse gas emitter and says that rich nations have to take the lead with big cuts in emissions.

President Barack Obama wants to cut U.S. emissions back to 1990 levels by 2020 and then by 80 percent below 1990 levels by 2050 as part of a global deal to limit climate changes such as floods, desertification, more powerful storms and rising ocean levels.

The House of Representatives passed a carbon cutting bill in June but the Senate has yet to act. If the Senate approves its own bill, the two differing texts would have to be reconciled to make them identical and be voted on again.

“It’s possible it could still happen (before Copenhagen). Most people I talk to think it’s more likely that these two pieces will be done but that the reconciliation will not be,” he said.

“It will affect (the U.S. position in Copenhagen). The further along we are, the more explicit we can be. But it would not preclude us from doing an agreement,” he said.

Editing by Tim Pearce

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