As President Obama travels to Asia to attempt to expand US exports to that part of the world, we should not miss out on an idea of exporting our clean technology and the role carbon can play in the transaction. In prior posts, I discussed that Japan has started bilateral agreements with countries to set up carbon credit projects in developing countries. These projects would not necessarily require approval through the Clean Development Mechanism under the Kyoto Protocol administered through the United Nations. Japan appears to be using this bilateral approach not only to avoid the bureuacray and delay of the CDM, but also to promote domestice technologies, services, and companies. It sounds like a good export model.
Domestic Japanese companies that are seeking offsets partner with a Japanese carbon credit developer that uses Japanese technology, say renewable energy or energy efficiency products, and the government export/import bank finances the investment in the project.
The United States could engage in the same practice. Let's say a large US utility is looking to purchase offsets. It engages a US carbon credit project developer to develop projects in countries that the United States enters into a bilateral agreement allowing credits to be used in the United States. The project is financed through the Export/Import Bank (EX/IM Bank) or the Overseas Private Investment Corporation (OPIC). To gain the financing, the project developer must use US manufactured technology and products.
This model could be used in India and Indonesia or Brazil and Mexico. Using a little imagination, clean energy and clean technology made in the USA could serve to reduce greenhouse gas emissions in developing countries. At the same time, it could increase US manufacturing jobs. Creativity and market promotion can serve to reduce greenhouse gases and generate profits for domestic companies. It's worth consideration. Don't be surprised if China is engaged in the practice now or in the near future.