Clearing the air about the US

The most interesting development in the transatlantic dialogue on climate change is the extent to which both continents now see energy security and climate change as virtually interchangeable imperatives to be addressed over the next few years.

This is most welcome because as a technical matter, both issues require roughly the same measures of efficiency gains, technological advance and application of market incentives. And seeing the two issues as flip sides of the same coin permits a merging of the best efforts of both continents - resulting in a healthy mixture of both co-operation and competition and a reduction in unproductive finger-pointing.

That the United States is the biggest emitter of greenhouse gases is undisputed, but so is the fact that we are the biggest component of the world economy. I believe that we have made significant progress since 1990. We have de-linked economic growth from energy consumption, greatly reducing the carbon intensity of our economy. And in the last few years, we have actually achieved a greater reduction in carbon dioxide (CO2) increase than the EU, even though our economy has grown considerably faster.

With respect to technological advance, we have committed nearly $30 billion over the last few years to research, some $6 billion in 2006 alone. We are sharing the results with Europe as well as with the far East in the hope that our contributions can help China and India to reduce their growth in CO2 emissions.

We believe that we lead the world in the quest for breakthroughs in cellulosic technology for the next generation of biofuels and in carbon capture and storage for power plants. But if Europe or the far East gets there first as a result of our competition, so much the better - the funds would not have been spent in vain.

With respect to efficiency, America and Europe have a great deal to learn from each other. Europe is ahead in building design and automobile mileage. In part, this is a result of higher taxes and shorter driving distances - advantages that are eroding a bit as the EU internal market expands and people are freer to move about. Some of this advantage stems from a significant shift to diesel cars, which has occasioned the trade-off of higher pollution of particulate matter, sometimes also known as fine particle pollution. This serious pollutant causes the premature deaths of many more Europeans than Americans and points to an area where Europe can learn from America.

The US recognised the danger of small particulates years ago and has imposed strict limits on their emissions. The EU is now considering such limits and we recently brought over our experts to consult with EU officials on how we have achieved these reductions.

Europe can also learn from the US with respect to the efficiency of electricity production and distribution. The EU CO2 cap-and-trade system, known as the ETS, is in fact modelled after the US acid rain market incentives approach, which was enacted in 1990 and which created incentives for new efficiencies in the drive to reduce sulphur dioxide- emissions. It is likely that these same efficiencies have improved the CO2 outlook and account for some of the recent levelling off in CO2 increases, along with the recent rapid increase in ethanol blending.

Crafting the right approach to incentives is absolutely critical to the efficient deployment of the new technologies and to the promotion of conservation. The EU’s ETS has some problems that are generally recognised as in need of correction, particularly in the over-allocation of permits and the exclusion of important sectors of the economy, such as transport. We hope that this correction will occur soon, because the development of price signals is imperative if investment is to be directed into the most effective strategies. At some point the research has to end and the development begin; both sides of the Atlantic are getting closer to that point.

One thing I believe is beyond question - that we can collectively solve the twin problems of climate change and energy security without sacrificing jobs and economic advance. Indeed, if the past record on the environment illustrates anything, it is that the most prosperous economies have the best environments - because a healthy environment is not totally free. It might seem counter-intuitive, for example, to assert that the world’s wealthiest economy - the United States - also has the best and healthiest air quality. But this proposition is true, and the general point will hold as well for what may be the greatest environmental challenge of all.

• C. Boyden Gray is ambassador of the US to the EU.

The most interesting development in the transatlantic dialogue on climate change is the extent to which both continents now see energy security and climate change as virtually interchangeable imperatives to be addressed over the next few years.