Joss Garman: Obama’s new fear is a cleaned-up China

The US is still in the grip of its oil giants. But as Cancun closes, it is the emerging economies who could dominate the green market

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Climate Secretary Chris Huhne rightly warned over the past few days that the climate talks in Cancun risked becoming a milestone on the way to the lingering death of the whole UN climate process. In his words, the replacement would be "a zombie conference where there won't be anybody at a senior enough level to take any serious decisions at all." As Ministers and officials fly home they will be grateful to have averted that scenario.

For many keen observers, the progress achieved over the past two weeks has been far from negligible. Agreements on forests and assistance to the poorest countries, and the establishment of a Climate Fund, could all start to have real impacts on the ground. Equally, the willingness to use the building blocks of Cancun to pursue a more comprehensive deal next year is a sign of renewed investment and goodwill. The proclaimed death of multilateralism in Copenhagen was premature.

Perhaps the most striking change from last year has been the confidence and relaxation of the major emerging economies. Blamed by many for the breakdown of last year's talks, India and China have used Cancun to rebuild their reputation as pragmatic negotiators.

It was India who offered to break the deadlock on emissions monitoring, leaving the US flat-footed as they failed to offer similar transparency around commitments to provide finance for poor countries.

Similarly, as the drama of Japanese opposition to a new commitment period under the Kyoto Protocol unfolded over the past few days, it was China who came forward to propose solutions, in language that would have seemed unthinkable a year ago.

China and India also confirmed their willingness to consider legally binding targets in a move that even took their domestic audiences by surprise.

This fresh approach reflects two recent and important changes in climate geo-politics. Firstly, the failure of US domestic climate legislation means that these countries are not under the same pressure to reduce their own emissions quickly. At the same time, they are increasingly confident that far from losing out by investing in a low-carbon economy, they stand to gain in terms of energy security and export potential. As the president of the threatened Maldives predicted on a recent visit to Britain: soon it will be China pressuring the rest of the world for a strong binding treaty on climate change – both to protect itself from the impacts of a warming world, but also to secure an international market for its vibrant clean technology businesses.

In a G2 world, of course, the US is unlikely to relish any arena in which China appears relaxed and confident. Cancun was no exception. The Obama administration, once hailed as the potential saviours of the global climate regime, spent most of the two weeks trying to block progress on almost every topic.

To a watching world, and to long-standing allies in Europe, the position of the US is both perplexing and infuriating. Has Obama abandoned all efforts at climate progress? Cancun could give that impression. In reality, however, the US position may reflect something more profound than reversion to a long-standing position of obstructive isolationism.

Earlier this year, as it became clear the Democrats' clean energy reforms would fail, one of the original advocates of climate legislation in Congress made what might prove to be a prophetic statement about the direction of global energy and climate policy. Republican Senator Lindsey Graham said: "Six months ago my biggest worry was that an emissions deal would make American business less competitive compared to China. Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy."

Since then, we have seen the US Government begin to act to oppose what they see as Chinese domination of the clean energy market: for example, backing a landmark complaint at the WTO against Chinese subsidies of their renewables sector. Arguably, America's position is a reflection of their deep anxiety, not that the Chinese will get away without making emissions cuts – but that the US will be left behind, as the world builds its new economy through investment in smart, low-carbon technologies. Meanwhile, the stranglehold over US politics held by coal and oil companies will have ensured America could not compete.

And this brings us to the last big player in Cancun – Big Carbon. While the international oil companies and their ilk may not sit behind a UN flag, their influence on the talks is greater than that of most nation states. It was pressure from polluting industries that lay behind the Japanese decision to oppose an extension of the Kyoto Protocol. This comes as no surprise as these are many of the same companies that have America's economy in a death grip – sacrificing its long-term prosperity to their own need to keep it permanently and fatally addicted to oil.

President Obama knows that to break that grip, he must allow US green industries to find their voice, as they did recently in opposing – and defeating – Big Oil's campaign to repeal California's climate laws. Whether he can succeed will determine the economic future of his country – and the US stance in future climate summits.

For Europe, the challenge is less daunting, but equally clear-cut. In Cancun, European leaders were often left on the sidelines, with little new to offer beyond their 20 per cent emission cut, agreed in 2008. This carbon target is now insufficient to make Europe a player in the clean-tech markets – a 30 per cent target is the minimum needed to drive private sector investment into the sector. A raised carbon target is also a pre-requisite for EU negotiators to play a powerful role in what might just be the new UN climate talks – where the winners get to write the rules for the new global energy economy – rather than those who come away with the smallest cuts.

European leaders will make this critical decision in the next 10 months – in the run-up to the next UN talks in South Africa. Standing in the way will be some familiar names and logos. So far, every major oil company has lined up to oppose the move to 30 per cent. We should learn some lessons from our cousins over the Atlantic – and push them out of our way before it's too late.

Joss Garman is a campaigner for Greenpeace UK. He blogs at www.jossgarman.com