As expectations of forthcoming carbon constraints, whether global or domestic, rose over the last few years, American businesses began to plan and even preempt a low-carbon competitive environment.  For utilities, that meant learning about carbon offsets and investing in clean coal, nuclear and natural gas technology. Oil companies have diversified into in advanced biofuels. Large banks have set up carbon trading desks and experimenting with the regional existing carbon markets in America’s northeast and in Europe.

Yet this tiptoeing into a low-carbon space is both very limited in scale and represents corporate losses so long as the federal government does not create certainty around the future of carbon regulation. Businesses both in the clean-tech sector and in the energy-intensive sector are united in one sense: they want a credible commitment from government about what it will do, whether that be nothing, moderate carbon regulation, or stringent abatement requirements.

If the playing field is level, companies are mostly willing to jump into whatever cap-and-trade, tax, or other scheme policy-makers come up with. ExxonMobil’s Chairman and CEO Rex Tillerson said in February, 2009, that “Pricing carbon through a direct and transparent tax could incentivize the search for lower-emissions energy solutions while also providing the stability and predictability industrial companies need to make long-term, capital-intensive investments in equipment and research.”

Many current activities will continue to expand as energy costs rise, federal clean-energy subsidies continue, and states support shifts towards low-carbon fuels. A large portion of American clean-technology companies were not depending on a deal at Copenhagen. Yet Europe has gone ahead with emissions reductions commitments, requiring its companies to pursue state-of-the-art technology and encouraging transport electrification. China, while unwilling to enter a transparent global carbon abatement scheme, is massively subsidizing its clean energy industry at home. Chinese companies are now both market and technology leaders in wind turbines, solar power, and lithium-ion batteries, which are vital to electric vehicles. China is capitalizing on its relatively cheap batteries to fund the world’s largest electric vehicle deployment scheme in 13 cities.

So the failure to reach a meaningful accord at Copenhagen leaves U.S. businesses wondering how to ensure that they are globally competitive in this century. The inability to factor into their development plans an American policy is a handicap compared to their peers abroad.

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