As a result, US firms with access to cheap energy are given a big competitive advantage over firms in Europe and elsewhere. Some in Europe worry that stringent action on global warming may be counterproductive: energy-intensive industries may simply move to the US or other countries that pay little attention to emissions. And there is more than a grain of truth to these concerns.
The Kyoto Protocol represented the international community's attempt to begin to deal with global warming in a fair and efficient way. But it left out a majority of the sources of emissions, and unless something is done to include the US and the developing countries in a meaningful way, it will be little more than a symbolic gesture. There needs to be a new "coalition of the willing," this time directed at a real danger.
This "coalition of the willing" could agree to certain basic standards: to forego building coal-fired plants, increase automobiles' fuel efficiency, and provide targeted assistance to developing countries to enhance their energy efficiency and reduce emissions. Coalition members could also agree to provide stronger incentives to their own producers, through either more stringent caps on emissions or higher taxes on pollution. What is at stake is not protecting domestic producers, but protecting our planet.
The changing climate on climate change provides political leaders in Europe and other potential members of this "coalition of the willing" an opportunity to move beyond mere rhetoric. The time to act is now.
Joseph Stiglitz is a Nobel laureate in economics.
Copyright: Project Syndicate
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