For supporters of renewable energy, the Kyoto Protocol presents an important opportunity to accelerate policy reforms and spur the development of new markets. It has generated great enthusiasm in both public and private sectors for expanding the use of renewable energy technologies. Indeed, the climate policy process has already contributed to the buildup of a sizable market for renewable energy in Europe and Japan, nurturing industries now poised to capture export opportunities in the "emerging markets" of the developing world. But many U.S. renewable energy promoters have failed to anticipate or exploit the growth of these markets. It is time for U.S. companies to participate in the climate policy process more actively, informing the administration, Congress, and the international community of the enormous economic opportunities that may result -- opportunities that will be grabbed by foreign competitors if the United States stays on the sidelines of the renewable energy revolution.

The Kyoto Protocol can be expected to hasten the globalization of renewable energy markets; any company that fails to understand this new dynamic may again lose out in the marketplace. In the years ahead, the renewables markets of various countries and continents will be increasingly integrated, driven not only by the broader dynamics of a global economy but also by the fact that most of these markets are now being shaped to some degree by the climate policy process. U.S. renewable energy advocates and industrialists are more preoccupied with domestic policy issues and markets than many of their counterparts elsewhere, and will have to broaden their horizons if the United States is again to be a leader in renewable energy. Much as climate change is expected to exacerbate existing environmental stresses, renewable energy supporters should view the climate policy process as a valuable new impetus -- supplementing concerns over energy security, air pollution, acid rain, and nuclear radiation -- in accelerating the use of renewables.

Although the Kyoto agreement is full of legal and political complexities and uncertainties -- and is likely to undergo a series of "refinements," if not major surgery, for years -- companies, policymakers, and advocates should not wait for full clarity or legal ratification to act. Rather, they would do well to focus on the immediate opportunities being opened at the international, national, and local levels by the "Kyoto spirit." It is particularly important to use the climate issue as a means of building grassroots public support for renewables -- which has been one of the keys to Europe's success since 1990. Renewable energy systems can serve as a powerful, even a populist, symbol of the worldwide effort to combat climate change -- something the Clinton administration is trying to build on through the Million Solar Roofs Program.

It is essential that those who see market opportunities in climate policy be actively engaged in its formation -- in part to counter the strong negative messages still emanating from many U.S. industry sectors. But it is impractical for most companies to follow such a complex process closely on their own; the best vehicle for involvement and action in the field is the Business Council for Sustainable Energy. (The senior author is a member of the Council's Board of Directors.) Based in Washington, the Business Council has been a regular presence at recent climate negotiations, including the Kyoto conference, and works closely with renewable energy trade associations, such as the U.S. Export Council for Renewable Energy and the European Business Council for Sustainable Energy.

The Business Council is also a good starting point for companies wishing to become more involved with specific institutions and processes. It works closely with the administration and Congress on pressing domestic issues such as R&D and electricity restructuring, and also with international bodies such as the Climate Change Secretariat, GEF, and the World Bank. It is crucial that companies and advocates that support these programs and institutions weigh in strongly and soon with key members of Congress, since many of their budgets are in jeopardy. Since Kyoto, the Business Council has arranged a series of seminars to help business leaders and policymakers think about such issues as the Clean Development Mechanism, joint implementation, and credits for early action.

Another group that is knee-deep in the climate policymaking process is the U.S. Climate Action Network (US CAN), a Washington-based network of more than 50 nongovernmental organizations, including the Environmental Defense Fund, the Sierra Club, and the Union of Concerned Scientists. As the U.S. "node" of the global Climate Action Network, US CAN serves as a clearinghouse for information about raising public awareness on climate change and as a focal point for tracking and clarifying the environmental community's positions on the domestic and international policy agenda. US CAN's members have launched a public education effort to mobilize a grassroots constituency for progressively stronger action by the administration and Congress.

There are many ways to get involved in the policy process directly. (See Appendix for a list of U.S. and international contacts.) Here, too, networks can be helpful: the Sustainable Energy Coalition, for example, has contact information on members of the House and Senate Renewable Energy Caucuses. Many climate decisionmakers are eager to hear directly from concerned citizens and the private sector -- particularly from those who take a constructive approach to the issue. Diplomacy is important, however. As the U.S. government's role in the climate process is viewed with skepticism in many countries, it is important to explain views clearly and carefully -- and to listen carefully to the views of those from other countries.

Regarding support for particular renewable energy projects, most of the international institutions described in this report are not able to consider proposals from private companies -- though this may begin to change in the future. In the meantime, it is important to learn the procedures used by the funding agencies and, where appropriate, to develop project proposals in conjunction with government agencies wherever the opportunities lie.

To capitalize on Kyoto, renewable energy promoters will need to "Think B-I-G":

Be actively involved in implementing and strengthening national climate programs aimed at accelerating decarbonization of the energy system; do not allow "sunset" industries, such as coal or oil, to set the terms of this debate.

• Support quantified limits on emissions trading to ensure adequate measures are taken to increase domestic renewables use.

• Support efforts to expand the domestic renewables market by pressing for full congressional funding of the administration's climate change initiative as well as the specific elements of its renewable energy budget.

• Work with state and federal policymakers to enact electricity restructuring legislation that includes strong support for renewables as well as energy source and emissions disclosure requirements.

• Encourage states that do not yet have net metering programs or Million Solar Roofs plans to get moving.

• Anticipate a state-led energy revolution. Take advantage of existing green pricing and marketing, net metering, Million Solar Roof programs, and other utility and state renewables policies.

Influence the design of new international policies and institutions under the Framework Convention on Climate Change so as to enhance their effectiveness in promoting renewable energy.

• Participate actively in the climate policy process, including monitoring the leadup to the Buenos Aires meeting and prepare to react as key provisions of the protocol are agreed to.

• Work with business and environmental umbrella groups following the negotiations, and offer sustained support for the protocol's ratification well before formal Senate debate begins.

• Provide input on how the Clean Development Mechanism should be structured to encourage the spread of renewable energy projects.

• Work with groups such as the U.S. Business Council for Sustainable Energy in shaping GEF and joint implementation programs and the development of the World Bank's Carbon Investment Fund. Encourage Congress to provide full funding for them.

Get ready for potentially explosive growth of renewable energy markets in several regions in the next few years, including southern Europe, China, and Latin America.

• Single-market strategies are risky. Monitor the development of national policies carefully so as to take advantage of those "emerging renewables markets" that may open suddenly in the future.

• Explore opportunities to expand the overseas market through U.S. bilateral assistance programs, such as the new AID Climate Change Initiative.

• Consider ways to team up with investment banks and with large oil and power companies that are looking for opportunities in renewable energy.

Few issues are as contentious or complex as climate change. And from the point of view of renewable energy supporters, none are as important. Aggressively engaging that process is not just a nice opportunity; it may turn out to be essential to the future of many renewable energy companies. Understanding and following the climate policy process will require significant investments -- but will yield far greater rewards in the decades ahead.

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