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Stories to Watch in 2012: U.S., China, Food, Renewable Energy, Rio+20

What are the top environmental and development issues that will shape 2012? This morning, I presented the World Resources Institute’s 9th annual “Stories to Watch” at the National Press Club. While we can’t predict the future, here’s a rundown of the key issues to keep an eye on:

1. Environmental Issues in an Election Year

U.S. Climate Policy

In 2008, the Obama Administration set a target that the U.S. would reduce greenhouse gas (GHG) emissions 17% by 2020 (compared to 2005 levels). According to WRI’s 2010 analysis, the 17% target is still within reach, but it will require a sustained effort in 2012 and beyond.

In 2012, the Obama Administration has significant opportunities to cut emissions – but it remains to be seen how far it will be willing to go. This year you cannot answer the question of whether the Administration will be aggressive without considering the political context even more than usual.

At the state level, California will be putting in place the foundation for their new cap-and-trade program; and the RGGI states will be doing a program review in 2012.

U.S. Presidential Election

It is amazing how quickly things can change in politics. Back in 2008, both Democratic and Republican candidates supported national action to address climate change.

Now, the obvious story to watch is how environmental issues play out in the 2012 campaign. This will, in part, set the stage for what happens in the next presidential administration.

Will President Obama leverage his environment and public health record and position himself in contrast to the more extreme strains of the GOP? Will he lean into these issues or distance himself from them?

On the Republican side, will the presumed candidate embrace anti-EPA rhetoric, using it as a prime example of government overreach? Or will he pivot back toward more moderate positions as the general election begins?

2. Transitions in China

Solar and Wind Trade Issues between the U.S. and China

Recent trade cases have upped the ante in the clean energy trade dispute between the U.S. and China. Solarworld has brought a case forward on behalf of a coalition of U.S. manufacturers of solar panels. A group of solar buyers and installers have banded together to oppose the complaint. China’s Ministry of Commerce began a formal investigation of U.S. government support for the clean energy sector. And, just last week, a new trade case was filed in the U.S. challenging Chinese subsidies for steel towers used for wind turbines.

We’ll be keeping a close eye on this story. Some are suggesting that this dispute could become as heated as the trade wars on automobiles between the U.S. and Japan in the 1980s.

National Energy Cap

For the first time, China is considering setting a national cap on energy use. Although we don’t know the details yet, it will likely be an annual limit on total energy consumption or coal consumption, probably through 2015 or through 2020. This would be a major step forward in helping China decouple energy consumption from GDP growth.

The ultimate impact of the cap will be to limit the use of coal in China, which currently makes up over 70 percent of consumption. We’ll be watching to see how this plays out on the national and provincial level.

Carbon Trading Systems

China will be setting up provincial carbon trading systems in 2012. Interestingly, the pilots in different places will be constructed differently. Just as U.S. states act as laboratories of change, the Chinese government uses pilots at the provincial level to test new ideas before scaling up across the country.

3. Rising Food Demand and Opportunities

Demand for food is accelerating at a remarkable rate. The global middle class is expected to triple within the next 20 years, changing the types of food people eat. There will be pressure to convert many of the remaining, pristine natural landscapes to food production. How we respond to this demand will have profound implications for biodiversity, forests and the global climate.

One solution to this problem is to restore degraded or significantly underproductive lands. Although estimates vary, a key study last year published in the Proceedings of the National Academy of Sciences found that somewhere between 600-700 million acres of degraded cropland has been abandoned over the past century, and a huge amount of that land (about 4 times the size of Texas) could be brought back into production.

4. Renewable Energy: Boom or Bust

Global investment in renewable energy is already approaching global investments in fossil fuels. Could 2012 be the year in which renewable energy investment surpasses fossil fuels?

This depends in part on two issues. First is the effect of the shale gas boom. Abundant, cheap shale gas may make it even more difficult for renewables to break into the market.

Second are government policy decisions, especially in the U.S., China, Germany and India. These will likely determine the scale of future investment in renewable energy. Will countries commit to steady and well-telegraphed renewable policies, as Germany has done successfully over the past few years, or will they cut renewable support under political and fiscal pressures?

5. Rio+20

In June 2012, over 40,000 people are expected to convene for the Rio+20 Conference in Brazil. This is the fourth historic global environmental summit, following Stockholm in 1972, Rio in 1992, and Johannesburg in 2002. But, with just six months to go, vision for the conference is only now beginning to emerge. I am therefore doubtful that major breakthroughs will emerge from the official process. That said, we may see exciting action emerge from the bottom up – via a subset of governments or from civil society or from the business sector or a combination of them.

For example, we expect to see governments make commitments to energy access, and around water security, food security, and governance. If so, we could see some significant developments in Rio.

When we look to 2012, we see that a movement toward sustainability is underway in many places around the globe. It is collapsing the boundaries between economics and environment, and is re-defining concepts of what constitutes quality of life and national security. We observe it is being driven not just by altruism, but by necessity – long-term business strategies, political calculations, re-valuing natural resources, and in many instances survival for many people.

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