“There’s really no one country that the current administration is engaging more in 2009 than China.”
- Representative Rick Larsen (D-WA), Co-Chairman of the China Working Group

The above quote gets to the point. China has become the most important country for the United States. Not only are the economic fortunes of both countries linked, but China is the largest purchaser and holder of U.S. debt. There are obvious challenges and opportunities regarding the economy, military, and overall strategy as both countries increasingly battle for power and influence. Aside from these, however, is an area that may not seem as obvious but can have consequences just as great: climate change policy. Nothing substantial can be accomplished in terms of cap-and-trade or international agreements on reducing greenhouse gases without China and the U.S., the world’s two biggest emmitters. Neither country signed the Kyoto Protocol, the mostly toothless first attempt to curb global warming that is set to expire in 2012. The COP15 United Nations Climate Change Conference this December is billed as the time to create a new international framework to fight climate change. As the conference gets nearer, some are calling for provisions whereby countries that have advanced environmental technology will be forced to give it to countries that don’t. While the idea is to spread technology that will reduce emissions, there is no intellectual property protection for the companies that developed the technology. If a push for this “compulsory licensing” of green technology is a major part of the agenda, the negotiations will fail.

Representative Rick Larsen and China Working Group Co-chairman Mark Kirk (R-IL) brought up the topic in a bi-partisan dialogue about their recent trip to China at an event held at the Washington think tank CSIS. There is talk that China is pushing for a compulsory licensing clause in the Copenhagen treaty that would force the holder of a patent, copyright, or other exclusive right to grant use to others. While the patent holder may receive a small amount of original compensation, future sales of products that include the patented technology would be severely limited or non-existent. Other countries and/or companies could copy the product and sell it as their own, all without any further payment to the original inventor. This would destroy the incentive for companies in the U.S. and other nations to continue research and development for the future since they couldn’t reap the rewards (profit) of their inventions, ideas, and products. The loss of this incentive, in turn, would then stall overall progress on the technological breakthroughs that are needed for the second green revolution. Representative Mark Kirk summed it up. “If the treaty licenses the theft of U.S. intellectual property across an area that may encompass 15-20% of the U.S. economy, the effect of the legislation will be to increase energy prices in the United States and authorize the theft of U.S. intellectual property. At that point, large companies, probably led by GE, that have tried to reposition themselves, switch from a supporter of the legislation and the treaty to an opponent because you just licensed all their technology to be expropriated by others.”

Let’s hope there isn’t much to this talk. Negotiations will be extremely tough with a worldwide recession and China arguing, quite reasonably, for the right to develop without being subjugated to regulations that weren’t in place when the current group of developed nations were modernizing. As with other international negotiations comprised of so many parties each wanting something different, reaching consensus will be a challenge, to say the least. Compromises must be made. But the U.S. won’t ratify (nor should it) a treaty that has such blatant disregard for intellectual property. That would be a shame for everyone. If the U.S. balks at the Copenhagen talks in December because of the threat or inclusion of a compulsory licensing clause, the world will once again be stuck without a meaningful climate change agreement.

- Justin Manger

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