Eileen Claussen

Energy Exchange Series Keynote: Responding to the Major Forces Shaping Energy Today

SPEECH BY EILEEN CLAUSSEN

PRESIDENT, CENTER FOR CLIMATE AND ENERGY SOLUTIONS

ENERGY EXCHANGE SERIES BREAKFAST

BRISBANE, AUSTRALIA

OCTOBER 25, 2012

Thank you very much.  It is wonderful to be here in Brisbane.  I want to thank the Energy Policy Institute of Australia and Rio Tinto for bringing us together today for this timely discussion.  This is the fourth breakfast in this series and all of them have been quite well attended, which suggests to me one of two things: Either the event sponsors have done an excellent job putting together some provocative discussions, or all of you really enjoy eating breakfast.

I also want to thank the conference sponsors for allowing me to escape the United States at an opportune moment.  Although Australian politics has its share of vitriol, it is nice to be missing the onslaught of negative presidential campaign ads back home.  A couple of weeks ago, the candidates argued about the fate of public television and the children’s TV character, Big Bird. 

All I can say is this is a perfect example of politics at its most … fowl.

In all seriousness, I know you have spent these breakfasts talking about the future of energy, and I will do that as well.  But I would not do justice to the mission of my organization if I did not focus on the intersection between our energy future and the future of the global climate.

Many of you may have known my organization as the Pew Center on Global Climate Change.  About a year ago, we became the Center for Climate and Energy Solutions – C2ES.  Our focus remains the same: working in and outside the United States to advance policy and action to address the twin challenges of energy and climate change.  We are engaged in this work because we believe real challenges require real solutions.

The real challenge I want to talk about today is, I believe, one of the most important of the 21st century: that is providing safe, affordable and reliable energy for all, while at the same time protecting the global climate.

And the real solution to this challenge?  Simply put, we must transition to a low-carbon economy.  It may sound simple, but it is a very tall order. 

To help put it in perspective, I’d like to do three things this morning.  First, I will highlight the primary forces shaping the energy picture today.  Then I’ll look at what key countries are – or are not – doing to move us toward a low-carbon economy.  And finally I will make some suggestions about what we must do to make this transition real.  

I’d like to begin by restating the challenge we face.  Remember, it’s a two-part challenge – and the trick is dealing with both parts together.  The first part we all get.  We need affordable, reliable and safe energy because millions around the world still lack it, and because we cannot continue to grow our economies without it.  The connection between energy, improved living standards, and economic growth is quite clear.

But what about the second part of the challenge?  Why do we need to protect the global climate?  In short, because the world is getting warmer.  And the reason it is getting warmer is because we continue to produce enormous amounts of greenhouse gases, mostly by burning fossil fuels.

According to most scenarios, global emissions of greenhouse gases would have to peak by 2015 for us to have a reasonable chance of limiting global warming to no more than 2 degrees Celsius.  That is the goal embraced by the world’s governments, first in Copenhagen in 2009, and again in Cancun in 2010.  

At this stage, I think it would take heroic efforts around the globe to meet that goal.  But if we exceed it, we will be entering very dicey territory. 

Indeed, we are already experiencing the impacts of warming.  Climate change is no longer a theory.  It is here and now. 

The global temperature has been above the 20th century average for 331 months in a row.  That means the last time the global temperature was below average was February 1985.

In the United States, we had the hottest July in 118 years of recordkeeping.  We also experienced some of the worst wildfires in our history and the worst drought in half a century.  

We are not alone.  Here in Australia, you have seen your own heat waves, flooding, wildfires and drought.  And ocean warming and acidification, both caused by growing carbon dioxide emissions, threaten the future of the Great Barrier Reef ecosystem.

It is bound to get worse if we cannot once and for all get a handle on greenhouse gas emissions.  Yet they keep rising.

Between 2009 and 2010, worldwide carbon dioxide emissions jumped 6 percent; it was the largest year-to-year increase on record.  Of course, this global increase masks important national differences.  While in most developed countries emissions are stabilizing or on the decline, emissions from China, India, Indonesia and other developing countries are growing rapidly.  By 2035, if current trends continue, China alone will be responsible for one-third of global emissions.

So, with global emissions growing, and with the world already experiencing the weather extremes that scientists have always said would accompany global warming, it is time to face facts.  It is time to jumpstart the transition to a low-carbon economy because it is only through this transition that we can meet both challenges: providing safe, reliable energy and addressing climate change.

So let’s look at the major forces shaping the production and use of energy today, and then drill down (no pun intended) to what governments are doing in key parts of the world to redirect our energy future.  I’ll focus in particular on China, the United States, Europe and Australia.  I also want to touch briefly on what we can hope to see from the new round of international climate talks launched last year in Durban.

We see five forces shaping our global energy future.

The first is rising demand.  Even with the global economy still in recovery, developing countries are growing quite fast (China, in a year of “slowing growth,” still grew by 7.8 percent in the first half of this year.) And with that economic growth comes a rising middle class that wants cars and air conditioners and other essentials of modern life that require energy.  Global energy demand is projected to rise 50 percent over the next 20 years, with more than 80 percent of this growth in developing countries. 

A second major force shaping the world’s energy future is a growing desire for energy security.  Countries are anxious.  They don’t want to be tethered to just one or two sources of energy, especially if it comes from beyond their borders.  So they are enhancing their energy security in three ways: by developing domestic energy sources; by diversifying their energy supplies; and by improving energy efficiency.

A third major force is new technology.  Only recently did hydraulic fracturing advance to a point where it was economical to extract natural gas from the shale formations under large swaths of the continental United States  Now the U.S. is in the midst of a fracking revolution.  Our Energy Information Administration projects that shale gas production in the U.S. will jump 170 percent by 2035, and over the coming decade, the U.S. might become a net exporter of liquefied natural gas.  A dramatic example of how technological breakthroughs can rewrite our energy future. 

A fourth force shaping the energy picture is what I will call the unforeseen.  Think of the Fukushima disaster, which could dramatically reshape the trajectory of nuclear power worldwide.  Similarly, the Arctic is melting faster than we’d anticipated, prompting new competition for its vast energy resources. Not long ago, few analysts would have predicted the sustained high price for oil that has made it worthwhile to unlock the potential of oil sands, making Canada the world’s No. 3 oil producer and changing the geopolitics of the oil market.  It’s impossible, of course, to predict what other unforeseen circumstances we might soon face.  

The fifth important force is policy.  While market forces may predominate, governments around the world are adopting a range of policies to try to meet their current and future energy needs.  I’ll note that, as countries craft these new energy policies, climate change is, more often than not, an afterthought.

I want to focus on this last force – policy – in four parts of the world because, in the end, only through policy can we harness or manage these other forces to deliver the low-carbon transition we need.

First, China.  At your February breakfast, you heard directly from influential Chinese energy policy maker Zhang Guobao (pronounced: Jong Gwoh-Baugh). Mr. Zhang explained how China has surpassed the United States to become the world’s largest energy producer and consumer.

Because of its rising demand, China increasingly is concerned about the security of its energy supplies.  China is the second largest net importer of oil in the world, and this accounts for many of its actions on the international stage.  For example, China is nowhere near the Arctic, but with recent melting opening new possibilities for oil exploration, China is now lobbying for permanent observer status at the Arctic Council. 

China also is looking to diversify its energy supplies beyond oil and coal.  It has set a goal of 15 percent of total energy output from renewable sources by 2020, and invested heavily to lead the clean tech market.  China is now the world’s number-one solar manufacturer and home to four of the world’s top 10 wind turbine manufacturers. 

China is mindful not only of commercial and energy security concerns, but also of the climate.  China, after all, has not been immune to extreme weather.  Since the summer of 2007, it has experienced major flooding and hurricanes.  Heavy snowstorms last winter disrupted travel during the Lunar New Year celebration.  

Increasingly, climate is an explicit focus of Chinese policymaking.  Having pledged in Copenhagen to reduce its carbon intensity 40 to 45 percent from 2005 levels by 2020, the government effectively legislated this goal through targets and actions in its 12th five-year plan.  Among other things, China is setting up seven local or regional greenhouse gas trading systems, with the goal of moving toward nationwide trading. 

These are impressive steps, but they are hardly enough.  China’s greenhouse gas emissions already exceed those of Europe and the United States combined, and they are projected to rise 45 percent between 2009 and 2020.  The country has doubled its electric generation capacity since 2005, but just 0.2 percent of it is solar.  Meanwhile, coal generating capacity has tripled since 2000, and is projected to grow another 50 percent by 2030.

The next country I want to talk about is the United States.  As I mentioned, we are on the brink of an election, and the outcome could influence the direction of U.S. energy and climate policy.  As Washington’s partisan gridlock has only grown worse, we’ve had no coherent national approach to energy or climate.  Our approach has been essentially ad hoc.

On the bright side, the Obama administration recently issued new fuel economy and greenhouse gas standards for vehicles that represent the single largest step ever aimed at reducing U.S. carbon emissions.  As a result, by 2025, we will see 90 percent increased fuel economy and 40 percent decreased greenhouse gas emissions for the average new vehicle.  This is a big deal.

Meanwhile, the state of California, the ninth largest economy in the world, is on the verge of launching a cap-and-trade program.  On November 14th, it will auction off more than 21 million greenhouse gas allowances, each representing one ton of carbon dioxide.  Once it reaches its full scope, California will have the second largest cap-and-trade program, in terms of emissions covered, in the world – behind only the European Union. California intends to link its program with Quebec’s, and is discussing linking with others, including Australia.

So there is some progress on the policy front in the U.S.  Yet, Congress is debating for the umpteenth time whether to pull the plug on a production tax credit that has helped advance wind power, at the very moment that lower natural gas prices threaten to undermine renewables.  And, although the Environmental Protection Agency has moved forward on vehicle emissions, it’s unclear how the agency will regulate greenhouse gases from power plants and other stationary sources.  If re-elected, President Obama would likely ramp up that effort.  Governor Romney, on the other hand, favors stripping the agency’s authority to regulate greenhouse gases. 

One wild card is the possibility – and at this stage, I’d say the remote possibility – of a carbon tax as part of a broader fiscal package.  You may have heard of our looming “fiscal cliff.”  In fact, there is a slew of looming tax- and deficit-related issues, the resolution of which might be eased by the revenue generated by a carbon tax.  There’s no big public push for this, but a lot of quiet discussion among people from across the political spectrum and from different stakeholder groups, including some from business.  It’s an intriguing possibility, especially since we’ve always assumed a carbon tax was out of the question, but I’m not holding my breath.

I’m afraid that no matter who’s in the White House, the U.S. approach will likely remain ad hoc for the foreseeable future, with partisan politics standing in the way of broader solutions. 

Still, natural gas is now the fuel of choice for new power plants, and older coal plants are being retired, although coal exports are up.  U.S. oil consumption is projected to remain virtually flat for years to come.  Greenhouse gas emissions are down somewhat, although certainly not enough.  And looking as far out as 2035, the U.S. Energy Information Administration doesn’t see them returning to pre-recession levels. 

The third place I want to talk about, Europe, has done the best job so far of integrating energy and climate policy.  Europe 2020, the EU’s overarching growth strategy, spells out specific targets for reducing carbon emissions, increasing energy efficiency and increasing the use of renewable energy.

Europe is a leading producer and consumer of renewable energy.  2011 was the biggest year yet for renewable installations in the EU, with Germany, Italy and Spain taking the lead.  Across Europe, 71 percent of new generating capacity in 2011 was renewable, with solar PV accounting for nearly half.  In all, renewables accounted for almost a third of Europe’s electricity generation last year, a larger share than either coal or natural gas. And the EU will likely over-deliver on its commitment to cut greenhouse gas emissions 20 percent below 1990 levels by 2020.

The EU’s groundbreaking Emissions Trading System has had its ups and downs, and a lot has been learned along the way.  But the ETS continues to demonstrate the practicality and value of the cap-and-trade approach, and remains the bulwark of the emerging global carbon market.

But Europe is facing stiff economic challenges.  Cash-strapped governments are reducing their support for renewable energy.  The retrenchment in nuclear power following the Fukushima disaster will likely mean increased reliance on fossil fuels.  We’ve counted on Europe to lead the global climate effort for many years now.  It’s not clear at the moment just how strong a leader Europe can remain going forward.

The fourth and final part of the world I want to talk about today is Australia.  As all of you know very well, this nation is blessed with an abundance of natural resources, including large amounts of coal and natural gas.  Australia’s electricity mix reflects these home-grown resources … with 78 percent of electricity coming from coal and about 14 percent coming from natural gas (with the natural gas share rising fast).  What’s more, exports of coal are growing as Asian demand soars.  For the next five years at least, exports are projected to grow an average of 10 percent a year.

Even as Australia remains heavily dependent on coal, though, it has put in place a comprehensive framework to begin the transition to a low-carbon economy.  The goal of the Clean Energy Future plan is to reduce greenhouse gas emissions to 80 percent below 2000 levels by 2050.  It aims to achieve this in large part through an innovative market-based approach that begins with a fixed carbon price and transitions over time to full-fledged emissions trading.  To those of us in Washington now thinking about a carbon tax, it’s very interesting to see how the pricing system was coupled with tax reforms to benefit not only affected sectors but also households broadly.  There are lessons to be learned here – about both policy design and politics.   And you can be certain that many are watching Australia closely as another important laboratory for carbon trading. 

What happens here, in Europe, in the United States and in China is vitally important to achieving progress in the low-carbon transition … domestic policies are where the rubber meets the road.  But what about the international climate effort?  Twenty years after the first Rio summit, where does it stand? 

From the start, there has been tension between two competing approaches – top-down and bottom-up.  And the UN process has produced examples of both – top-down in the form of the Kyoto Protocol, and bottom-up in the parallel voluntary framework that’s emerged under the Copenhagen and Cancun agreements.  One brings greater rigor – legal and otherwise.  But it encompasses a relatively small and shrinking share of global emissions.  The other is strictly voluntary.  But it has now mustered explicit mitigation pledges from more than 90 countries – including all of the major economies.

Neither approach, of course, is delivering the effort we need.  The new round of talks launched last year in Durban is a chance to see if there might be a mid-way approach that draws on the best of both.  Countries said in Durban that by 2015, they’ll negotiate a “legal agreement…applicable to all” covering the period starting in 2020.  Beyond those basic terms, the Durban Platform is pretty much a blank slate.  Filling it in will require new thinking, and real compromise on issues that have bedeviled these negotiations from the start.  Issues like the balance of responsibility across developed and developing countries, and how to capture that in a quote-unquote legal agreement.

What we should aim for, I think, is an agreement that’s flexible – one that encourages broad participation by allowing a diversity of approaches.  But at the same time, an agreement more rigorous than a strictly voluntary approach, particularly for those who want to play in the global carbon market.

Whatever emerges in 2015, we cannot count on the UN process to drive the global climate effort.  With the right kind of agreement, it can be the place to weave together emerging national efforts, and hopefully encourage a stronger collective effort.  But we need to tackle this challenge on multiple fronts.  And I believe the real drivers for action come not through multilateral talks, but at home.

So far, I’ve talked about some of the forces shaping the global energy future, and the role of policy in facilitating the low-carbon transition, both at the national level and globally.  I want to wrap up by highlighting some key priorities if we are to succeed.

The first priority is increased energy efficiency. This one is a no-brainer.  It saves money, it reduces emissions, and it improves our energy security.  And this is one area where we don’t need to wait for government.  There are huge opportunities here, and smart companies are seizing them.  The bottom line: We need to push efficiency whenever and wherever we can. 

Next, we must take full advantage of natural gas on the way to a low-carbon economy. But in doing so, we must be proactive in understanding and addressing any health and environmental issues associated with fracking.  We must minimize leakage of methane. And we must ensure that increased reliance on natural gas does not come at the expense of the renewable and nuclear sources we also need to get us to a low-carbon economy. 

Third, and in my view, most important, we must finally get serious about carbon capture and storage.  Under any realistic scenario – even if we become masters at energy efficiency – global energy demand is going to rise.  Coal and natural gas might not be inexhaustible, but they are certainly plentiful – increasingly so, in the case of natural gas.  Under any realistic scenario, we are going to continue burning coal and natural gas for a long time.  The bottom line is this: We cannot avoid climate change unless we put in place the technology needed to capture and sequester these emissions.  We must ramp up investment in CCS technologies, and enact strong policies to ensure that they are deployed.

As I said at the beginning of my talk, we face two challenges: providing safe, affordable and reliable energy for all, while at the same time protecting the global climate.

The solution to both is a low-carbon economy.  And to make that transition, we need a mix of policies to move us in the right direction.

These policies include carbon pricing, mandates where necessary, and targeted incentives for critical technologies.

And these policies are vital because climate change is real; we are already suffering its costs in the form of extreme weather; and the costs will just keep rising unless we act. We need to help the public understand this, so that their elected leaders can acknowledge and address the challenges before us.  We need, in other words, to detoxify the issue of climate change.  We all have a role to play here.  And I’m hoping I can count on each of you to play yours

Thank you very much.

Eileen Claussen’s Opening Remarks at SIEW Discussion on Energy Efficiency

Singapore International Energy Week

Discussion: Can we keep the door to 2C open?

October 22, 2012

Good afternoon.  My name is Eileen Claussen and I'm delighted to be here at Singapore International Energy Week.

Many of you may have known my organization as the Pew Center on Global Climate Change.  About a year ago, we became the Center for Climate and Energy Solutions – C2ES.  Our focus remains the same: finding practical solutions to address two closely related challenges -- meeting the world’s growing demand for energy while averting the worst potential consequences of climate change.

You don't need me to tell you that the impacts of global warming are already here and now.

The global temperature has been above the 20th century average for 331 months in a row.  That means the last time the global temperature was below average was February 1985.  That's what they mean by the "new normal."

In my country, the United States, we had the hottest July ever.  We've had one of the worst wildfire seasons in history.  And two-thirds of the country is still experiencing the worst drought in more than half a century.

Here in Asia, damaging droughts, floods and storms have hurt the production of rice and taken lives.

These are the kinds of weather extremes that will become more frequent and more intense with climate change, unless we act.

We know that we need to change the way we produce energy.  We need more low-carbon and zero-carbon energy, such as solar and wind.  And we need to use our fossil fuels more wisely, by capturing and storing the carbon they emit.

But we also need to change the way we consume energy.  We can no longer afford to waste it.   Energy efficiency saves money, it reduces carbon emissions, and it improves our energy security. 

How do we do it?  Let me draw on a recent success story in the United States – the adoption of new vehicle fuel efficiency standards.  These new standards will nearly double the fuel efficiency of the average new car by 2025.  This represents the single largest step ever by the U.S. government to reduce carbon emissions.

Three critical factors made it possible:  consumer commitment, technological progress, and smart public policy.

First, with gasoline prices going up and up, consumers were definitely on board for greater fuel economy.

Thanks to technological advances, including hybrid-electric drivetrains and high-strength steel, the auto industry certainly is capable of producing more efficient vehicles.

As for public policy, if you combine the government’s desire for more energy security with industry's desire for regulatory certainty, you can get to common ground.

Transportation is not the only sector where we can achieve greater energy efficiency.  There are huge opportunities across our economies – in buildings, manufacturing, anywhere we use energy.  And in many cases, we don’t need to wait on government to achieve huge gains.  The opportunities are there, and smart companies are seizing them. 

We undertook a two-year study of corporate energy efficiency to identify the most effective methods to reduce energy consumption and lower greenhouse gas emissions.  For our report, From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency, we surveyed nearly 100 companies and conducted some very detailed case studies. 

And we identified a number of keys to success.  These include designating full-time staff to be accountable for energy performance; communicating about the company’s successes in reducing energy costs and emissions; and – perhaps most importantly – integrating sustainability as a core part of corporate strategic planning.

We also found that the benefits of energy efficiency go beyond dollars saved and emissions reduced.  A focus on energy efficiency can drive broader innovation and a re-evaluation of business practices. The results are often improved productivity and quality.

So to conclude:  Energy efficiency sits atop the list of low-carbon choices that can help transition us to a clean energy economy.  But efficiency alone is hardly enough.  As efficient as we become, global energy demand will continue to rise.  And we will continue to meet much of that demand by burning fossil fuels.

So if we’re serious about a low-carbon transition, we need to be pushing on other fronts too.  One of the most urgent priorities is putting in place the technologies needed to capture and store the carbon emissions generated by burning coal and natural gas.  And that’s one area where strong policy, including carbon pricing, will be absolutely critical.  But that’s a topic perhaps for another discussion.

Thank you.

 

Eileen Claussen's remarks at Electric Vehicles: Plugging into the U.S. Grid Event

Good afternoon. Thank you for joining us. I’m Eileen Claussen, President of C2ES, the Center for Climate and Energy Solutions. Some of you may have known us until recently as the Pew Center on Global Climate Change.

Judging from recent headlines, and from what you hear on the campaign trail, the biggest energy challenge facing America today is the rising price of a gallon of gas. And indeed, for many Americans, this is a genuine concern. But the reality – as I suspect you all know – is that there is virtually nothing that anyone at either end of Pennsylvania Avenue can do in the near term to bring prices down. Oil moves in a global market, and as long as oil remains a mainstay of our economy, we will be subject to its gyrations. 

So the only real answer is to end our dependence on oil -- which of course is easier said than done. Even with our best possible efforts, weaning ourselves from oil will take not years, but decades -- which is all the more reason to get started on it right now.

We’re here today to talk about one part of the solution: plug-in electric vehicles. With PEVs, we now have a mass-produced alternative to the internal combustion engine. Depending on the model, PEVs either use no oil at all, or use it very sparingly. And, as they insulate their owners from rising gas prices, PEVs can deliver a whole range of other benefits as well. 

By reducing our reliance on imported oil, they enhance our energy security. When they’re running on their batteries – which is all or most of the time -- they produce no tailpipe emissions, and that reduce local air pollution. If we can make real headway in decarbonizing our electricity supplies, PEVs can play a very significant role in reducing greenhouse gas emissions. And they present a genuine opportunity to put American industries and workers out front on a truly transformative technology.

So there are lots of reasons to like PEVs. And thanks in part to some help from Washington – including tax incentives enacted under the Bush administration, and investments under President Obama’s stimulus package – these cars are now in the showrooms and on the road. In their first year on the market, PEVs sold 50 percent better than hybrids did when they were first introduced. Nearly 10 companies already have models on the road, and over the next year or two, all of the major automakers will be offering them. 

As GM can tell you, the PEV pathway is not without its bumps. But the same was certainly true for the internal combustion engine – and for so many other game-changing technologies that we now take for granted. For PEVs to take off – for them to truly deliver on their promise – we need to ramp up the effort. From the federal government, we need more support on the R&D side, in particular. But the real nuts-and-bolts challenges faced by PEVs are well outside Washington – and for the most part, so are the solutions. So that is where we at C2ES have chosen to focus our efforts.

It’s fairly obvious, I suppose, that if plug-in electric vehicles are to succeed, they need someplace to plug in. And creating that infrastructure – connecting plug-ins to the grid – involves a lot of different parties. It’s not just the consumers and carmakers. You need the electric utilities, which means you also need the state public utility commissions. You need the companies that make batteries and charging stations. You need people thinking about this from an environmental perspective. And you need them all working together.

That’s where we thought we could help. One year ago we convened the PEV Dialogue Group to bring together all of these interests. We said, let’s come up with a plan we can all agree on. And today, we are thrilled to be sharing with you the product of those efforts – An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid. A little later in the program, Judi Greenwald will give you a more detailed overview of the plan. In a nutshell, the plan provides a roadmap for coordinated action by the public and private sectors at the state and local level to ensure that PEV owners have a place to plug in – that they can conveniently charge their cars at home and on the road, without in any way compromising the reliability of the grid. It recommends ways to harmonize regulatory approaches across the country; balance public and private investments in charging infrastructure; and help consumers understand the benefits and choices offered by PEVs. 

As I said earlier, we see this as just one part of the solution. On the transportation front, we need to keep pushing ahead with stronger fuel economy standards, and we need to be advancing other alternative fuels and technologies. At C2ES, for instance, we’re also looking at the options presented by natural gas. 

But at a time of economic struggle, fiscal crisis and political gridlock, I believe this effort is an encouraging example of how we can and must make progress. Much as I would like to see comprehensive solutions to our climate and energy challenges, those don’t appear to be on the immediate horizon. But if we come at these issues one by one, look for opportunities where interests converge, and are open to compromise, we can arrive at practical solutions benefiting our economy and our environment. 

This same approach delivered another success two weeks ago, when we announced recommendations from a coalition of industry, state, labor and environmental leaders to boost domestic oil production while reducing CO2 emissions. Another win-win. The opportunities are there, if only we seize them.

I want to thank all the members of PEV Dialogue Group for the hard work and dedication that brought us to this moment. 

 

Q&A with Eileen Claussen for Singapore International Energy Week

This Q&A orginally appeared on Singapore International Energy Week's website.

September 2011

Q1. The Kyoto Protocol expires in 2012. Do you see an agreement on its successor during negotiations at Durban later this year? Or is an extension of the Kyoto Protocol or a move to a transitional framework a more likely outcome?

Eileen Claussen: The Kyoto Protocol has played an important role in advancing climate change efforts in some parts of the world. Most notably, the European Union established its successful Emissions Trading System and other policies in order to fulfil its obligations under the Kyoto Protocol. However, because developing countries are exempt from Kyoto's emission targets and because the United States has chosen not to join, the Protocol covers just one-third of global greenhouse gas emissions. Japan, Canada and Russia have made clear that they will not take on new binding targets post-2012 without commensurate obligations by the United States and the major developing countries, which are not prepared for binding commitments. Hence, there appears very little prospect of new Kyoto commitments being adopted in Durban.

While our ultimate aim should be a comprehensive and binding international climate framework, we must accept that getting to binding commitments will take time. The Cancún Agreements made important progress in strengthening the existing frameworks in the areas of finance, transparency, adaptation and technology. Further incremental progress in these areas will promote near-term action and will strengthen parties' confidence in one another and in the regime, thereby building a stronger foundation for a later binding agreement. At the same time, countries must continue strengthening political will and policies domestically. In Durban, parties should make concrete progress in implementing the Cancún Agreements--for instance, by establishing the Green Climate Fund and agreeing on stronger transparency measures--while affirming their intent to work toward binding outcomes.

Q2. Global GHG emissions increased by a record amount last year. Is the goal of preventing a temperature rise of more than 2 degree Celsius just a "nice Utopia" as IEA's Dr Fatih Birol put it?

EC: Long-term goals are tricky. On the one hand, they provide a rallying point to help focus attention and orient action, and a yardstick for measuring progress. On the other hand, they are meaningful only if they can be operationalized, and if interim efforts don't appear to be on track, people may be discouraged as a result and the will to act may actually weaken. In the case of climate, a temperature goal is appealing because it is easily related in the public mind to the core issue--global warming. But as a metric, it is several steps removed from the action that is needed: Reducing emissions. From a practical standpoint, a global emissions goal might be more helpful.

Countries' pledges to date clearly do not put us on the path to meeting the 2 degree goal. While achieving the goal is not yet out of the question, it would require a dramatic acceleration of efforts around the globe. The bottom line is that we know what direction we must go. Whatever our long-term goal--indeed, whether or not we have a long-term goal--the immediate challenge is the same: Ramping up our efforts as quickly as possible.

Q3. How much of an impact will the recent nuclear power crisis in Japan have on GHG emissions reduction?

EC: It is still too early to know what impact the Fukushima disaster will have on energy choices and greenhouse gas emissions around the world. The most dramatic example is the recent decision by Germany to completely phase out nuclear power. While many in Germany believe that the gap can be filled by renewable energy and improved energy efficiency, others are deeply concerned that the country will deepen its reliance on coal, making it impossible to achieve its ambitious greenhouse gas reduction goals.

Other countries must assess for themselves the implications of Fukushima for their energy futures. For those countries choosing to continue or deepen their reliance on nuclear power, the tragedy clearly offers lessons for improving safety. Given the continued growth in energy demand projected in the future, particularly in developing countries, it is difficult to imagine that we will be able to meet the world's energies needs and simultaneously meet the climate challenge without continued reliance on nuclear power. It is therefore imperative that we continue striving to enhance safety and solve the issue of long-term waste disposal.

Q4. Technology is seen as a key enabler to achieve low emissions growth. In your opinion, what are the top three technologies available today that can make the biggest impact?

EC: There are thousands of technologies available today that could make a huge impact with the right policy support, such as a price on carbon. But the problem, at least in the US today, is that it is unclear when such policy support will be forthcoming. So I will pick my top three based on the ones that need the least additional policy support to make a contribution, either because they yield multiple economic benefits beyond climate, or because they benefit from existing policy drivers. 

a. Batteries in cars. Batteries can be used in vehicles in a variety of ways. While a battery-only vehicle may only be able to fill a niche market, hybrid vehicles that run on either gasoline or electricity will likely have broader appeal, and start-stop batteries, which turn off the gasoline engine while a vehicle idles, can be applied to just about any vehicle, achieving modest per-vehicle reductions that add up to significant reductions fleet wide. The combination of new US standards for fuel economy and GHG emissions and electric utility interest in selling electricity can drive battery costs down. The potential emission reductions are enormous, but they depend on cleaning up the electricity grid.

b. Information technology. IT can enable dramatic GHG reductions, for example through energy efficiency (e.g. smart buildings that turn on lights and HVAC when they're needed and turn them off when they're not), substituting videoconferencing for travel, and using wireless communication to optimize transportation routing for people and goods. Convenience and time savings are such powerful drivers of IT that it needs little incremental policy support.

c. Carbon capture and storage (CCS) for enhanced oil recovery (EOR) using CO2. CCS is technically available, and potentially a game changer, enabling us to continue to use fossil fuels but with very low CO2 emissions. CO2-EOR is already economic using naturally occurring CO2, and is close to economic using captured CO2.  With very little policy support, EOR using captured CO2 could yield some near-term emission reductions while driving CCS costs down, thereby enabling enormous emission reductions in the future.

Q5. Energy efficiency has long been touted as the lowest hanging fruit to address the energy and climate change challenges. Many Asian countries have announced ambitious targets to cut their energy and carbon intensities. For example, as part of its 12th Five-Year Plan, China has indicated that it aims to cut energy intensity by 16 percent and carbon intensity by 17 percent in the next five years. Do you think Asian countries are doing enough? What more can they undertake to help combat climate change?

EC: Efficiency improvements that generate more economic output with less energy input are important for a variety of reasons, including energy supply security, pollution and greenhouse gas (GHG) emission reduction, and improvement of livelihoods. Countries such as Korea, China and India have taken significant measures to improve efficiency, with the result that the energy intensity of their economies has been lowering over the past decade.

Many energy efficiency measures are classified as "low hanging fruit," meaning the energy savings and other benefits they produce far outweigh the cost of investing in them. Asian countries are currently focusing on exploiting these low hanging fruit, notably in the industrial and power sectors, as well as in appliances and equipment, and large commercial and public buildings. Eventually, achieving additional energy savings will require more expensive investments, and targeting more difficult sectors, such as small and medium enterprises and households.

Asian governments will need to adjust policy tools to meet these new challenges. Policy certainty and appropriate price signals are important to ensure the efficiency improvement potentials of current investments are maximised. One way of providing these is through cap-and-trade type systems, such as those being considered or developed in China, India and Korea. This will also require the phase-out of subsidies that artificially decrease energy prices and encourage consumption rather than conservation. Though progress is slow, several Asian countries have taken or are taking steps in this direction as well.

Limiting the growth of or reducing energy consumption is, of course, essential. However, shifting to less carbon-intensive sources of energy is equally important in the medium to long term. As such, many Asian countries should also be commended for investing in developing less GHG-intensive energy sources.

Published by Singapore International Energy Week
Eileen Claussen
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Innovating Energy Despite Political Uncertainty

This article originally appeared in GE's 2010 ecomagination Annual Report.

by Eileen Claussen, President of the Pew Center on Global Climate Change
June 2011

Energy is essential to human progress. Societies depend on it to maintain and improve quality of life, keep industries competitive and create jobs. But despite energy’s importance, we are not moving fast enough to make sure we can meet our future energy needs in ways that are affordable, sustainable and secure.

The status quo is not the answer. We need to move past the policy disputes of today and take bold action to build a clean-energy economy for tomorrow.

Fortunately, a handful of leading companies like GE have committed themselves to doing their part to achieve this goal. But these businesses need more certainty from government. They need to know that their investments are aligned with public policies that infl uence and shape domestic and world energy markets over time.

I am proud to see GE taking action on these issues despite today’s uncertainty and the mixed signals business is receiving from governments around the world. GE knows that transforming how we generate and consume energy is essential to protecting both the environment and our economic competitiveness. It’s time for others to follow GE’s lead so we can see dramatic growth in new clean-energy technologies in the years to come.

To view the full report, visit GE's website

by Eileen Claussen --Appeared in GE's ecomagination Annual Report

From Dark to Light: Navigating the U.S. Energy-Climate Terrain

Keynote Address By Eileen Claussen, President, Pew Center on Global Climate Change
Institute of International and European Affairs
Dublin, Ireland
June 14, 2011

Watch the full speech

Thank you very much.  It is a pleasure to be here. I am especially pleased to be in Ireland just a couple of weeks after President Barack Obama paid a visit to his ancestral home of Moneygall.  I thought you would be interested to know that some of the President’s opponents, following the recent controversy about whether or not he was truly born in America, demanded proof of Mr. Obama’s Irish ancestry … and I understand he responded by finishing his Guinness and reminding his opponents that he is the only president to host a Beer Summit at the White House.

In all seriousness, I want to thank the Institute of International and European Affairs for inviting me to this beautiful city to talk with all of you about what’s happening in the United States to address the issue of climate change.

(Pause.)

Well, that about sums it up.  It has been a pleasure speaking with you and, if you will pardon me, I will now get along with my sightseeing.

I am kidding, of course. Well, let me clarify that. I am kidding about being through with my remarks, but the notion that not a lot is happening on this issue in the United States is no joke.  The renowned Irish blessing calls for the winds to be always at your back; the sun to shine warm upon your face; and rains to fall soft upon your fields. Well, for those of us who care about this issue and who want to see the United States take its rightful role in protecting the climate, it seems like the wind has not actually been at our back – but rather hitting us squarely in the face for quite some time now.

Any time you have someone winning an election to the United States Senate, as we did in November, thanks in part to a campaign ad where he uses a rifle to shoot a hole through a piece of paper representing climate change legislation, I guess you could be forgiven for feeling, well, not sufficiently blessed.

For perspective, let’s look back for a moment at what was happening on this issue in the United States just two years ago.  President Obama was just months into office after an election campaign during which he had pledged to reduce U.S. emissions of greenhouse gases by 80 percent before mid-century, and during which he promised to invest tens of billions of dollars in new climate-friendly energy technologies. 

As his secretary of energy, the President appointed a Nobel Prize winner who supported strong action to address climate change. And he built an all-star team of advisers on environment and energy issues who felt the same way.

Meanwhile, the U.S. House of Representatives, just two years ago this month, passed comprehensive climate change legislation that established national limits on U.S. emissions and that authorized a new trading program to help industries meet their targets as efficiently as possible.

It was indeed a heady time for those of us who have labored on this issue over the past two decades and more.  We definitely felt as though we had the wind at our back.  But now it all seems like a distant dream … there is no getting around the fact that 2010 was a dark time for those of us who believed that the United States was on the precipice of taking serious action. 

So today, I will spend my time talking with you about why I believe things have changed so dramatically in so short a time.  But I also want to point to some signs of hope. William Butler Yeats once wrote, “When one looks into the darkness there is always something there.” And I believe this is an insight we should remember, no matter how dark things may appear to be at the present time.

John McCain joked once in a different context that it’s always darkest before the light goes completely out. (Pause.) Which is very funny – but also somewhat depressing.  In my remarks today, I intend to look into the present darkness and reflect on some of the reasons why things are so dark right now.  But I also will point out that indeed, there is “something there.”

Let us start with a closer look at why it has grown so gloomy (for some) in Washington.  In the two years since the House of Representatives voted on the so-called “cap-and-trade” legislation in June 2009, the opposition to climate action has gained the upper hand in the debate.  The 2010 U.S. elections last November brought an astonishing number of new members to Congress who publicly disavowed the science of climate change. In fact, shortly after the election, a U.S. think tank conducted a comprehensive review of the policy positions and statements of more than 100 incoming Republican members of Congress. It found that more than half of them — I repeat: more than half —are skeptics of climate change. They say they are not sure it’s really happening.  Remember: This is in the majority party that controls the legislative agenda in the U.S. House of Representatives.

So if anyone tells you that serious congressional action on this issue is possible in the next two years, I hope you will politely tell them they’re crazy.  It’s not going to happen. 

And it is not just the presence of a large number of climate skeptics that make it improbable that the current U.S. Congress will do anything.  As always in Washington, there are a range of other issues and other interests at play.  In the wake of President Obama’s effort to overhaul the U.S. health care system, for example, there is a pronounced distaste in our nation’s capital and throughout the United States for policies that could be branded as quote-unquote “big government” solutions.

We can do our level best to try and help people understand how a cap-and-trade approach leaves it to the market (and not government) to find the most efficient ways to reduce emissions, but opponents inevitably will turn this into an issue of government overreach.  And in the current political climate in the United States, attacking things in this manner is a strategy that seems to work.

There is also of course the economy – a seemingly unending challenge with which I know all of you are familiar. You understand how unemployment rates can color every political decision.  In the U.S., unemployment hovers at or near the 9 percent mark, causing members of Congress to feel their own jobs are at risk to the extent that they embrace policies that could be construed as being anti-business or, worse, “anti-jobs.”  The President’s health care law regularly is referred to as a quote-unquote “job killing,” “job destroying” or “job crushing” initiative. This is how you attack your opponents in Washington today. You accuse them of wanting to take away people’s jobs. And, once again, this is a strategy that seems to work, even if it can be argued that addressing climate change in a serious way will actually create new jobs in clean energy and related industries. 

Unfortunately, it gets even worse.  Not content merely to block legislation that could strengthen or expand U.S. efforts to address climate change, many in the House of Representatives are pursuing a strategy of trying to eliminate or curtail existing policies and programs related to this issue, however modest they may be. 

Earlier this year, the House passed a spending bill to avoid a government shutdown. Ironically, this measure could have been nicknamed the “Kill Government” bill for its drastic cutbacks. While fiscal realities demand cuts to a wide range of vital federal programs, the House plan disproportionately cut funding for the climate science and clean energy programs needed to transition to the robust clean-energy economy that many businesses and the public support.

Thankfully, the U.S. Senate had its say, and the spending bill the President eventually signed into law avoided total annihilation of federal climate initiatives. While the most aggressive efforts by Congress to strip the U.S. Environmental Protection Agency of its funding and authority to act on climate and clean energy may not have passed, many politically-contentious issues lie ahead that may present more hurdles for EPA. For instance, debates this summer over the U.S. debt ceiling and battles over the 2012 budget could again put EPA in the crosshairs. Many Republicans, especially in the House, are likely to stay vigilant in their anti-climate efforts.

But under our bicameral legislative system, the House does not have the last word in these matters.  The Senate, however, presents its own challenges, starting with an arcane set of rules that allows a minority of senators to block major legislation. The Democrats are in the majority in the Senate, but they don’t have the 60 votes they need to pass anything major on climate change or other big issues.  What’s more, the Democrats themselves remain divided on the climate issue, with senators from oil- and coal-producing states often siding with Republicans to block proposals that could be portrayed as trying to change the prevailing, high-carbon energy mix in the United States. 

Looking ahead, things could get worse before they get better.  The period after the November 2012 elections could be the next best chance for the United States to do something serious on the climate issue. But if the House remains majority Republican, or the Senate falls into Republican hands, the chance will probably be lost for another two years or more.

So, it’s a little dark in Washington at the moment and it is hard to see how anything substantive or serious can happen on the climate issue under the current Congress. Indeed, the challenge right now is to prevent Congress from endangering the mostly modest initiatives and programs that are in place right now to address this issue, and on which we can potentially build a more robust response in the future under friendlier leadership.

Which brings me to the shadows of hope we can see if we follow the advice of Mr. Yeats and look into the darkness. The first of these appears when we look at what’s happening at the U.S. Environmental Protection Agency, the federal agency that is responsible for carrying out many U.S. laws related to climate change and the environment. 

With Congress unable to pass comprehensive climate legislation in 2010, attention turned to what the EPA might be able to do under the agency’s existing authority. And it turns out the EPA can do a great deal.  One of the reasons why it can do a great deal is because the U.S. Supreme Court in 2007 decided that greenhouse gases meet the definition of pollutants under the Clean Air Act.  This is the omnibus federal clean air law that was originally passed in the 1970s and has been amended and expanded several times since.

In its 2007 ruling, the Supreme Court left it to the EPA to decide if emissions of greenhouse gases present a risk to public health and welfare. EPA decided they did, based on the overwhelming scientific evidence about the enormous risks that climate change poses to America and the world. Interestingly, we recently learned that the previous EPA Administrator under President George W. Bush came to exactly the same conclusion … and other senior Bush administration officials agreed.  So when opponents of the EPA decision on greenhouse gases inevitably painted it as a partisan attempt to expand government, well, let’s just say that their arguments seemed a tad partisan themselves.

What is the EPA doing to try and limit U.S. emissions of greenhouse gases? National standards for passenger cars and light-duty trucks that won approval from industry and environmentalists will increase fuel efficiency to 35.5 miles per gallon by 2016 and save consumers $3,000 over a vehicle’s lifetime. A new EPA proposal to be finalized next year aims to increase fuel efficiency by another 3 to 6 percent per year through 2025. In late October, the agency announced a sensible proposal to reduce emissions by 20 percent and improve fuel efficiency for medium and heavy-duty vehicles.  This was followed by a November announcement that will go a long way to making sure that new industrial facilities in the United States use state-of-the-art technologies to boost efficiency and reduce their greenhouse gas emissions. And later this year, EPA is expected to propose the first-ever greenhouse gas standards for new and existing power plants and oil refineries.

Of course, opponents of these and other reasonable EPA actions will continue to raise a ruckus, and there have already been loud cries in Congress to take away the agency’s regulatory authority and cut its funding, as I already discussed. But the fact remains that, even though its efforts are relatively mild and will not come close to achieving the broader reductions in greenhouse gas emissions that President Obama promised during his election campaign, EPA is still in the fight and is still putting forward reasonable rules and regulations for reducing the U.S. contribution to climate change.  And that is an encouraging thing to see as we take in an otherwise dark scene. 

It is also important to take notice of action actually taking place on the ground that has climate benefits. Most notably, we expect many old coal plants to shut down. While some new coal plants will come online soon, we are far more likely to see new natural gas power plants built in the future. While not “The Answer” to our climate and energy challenges, natural gas emits half the amount of carbon dioxide as coal. So this shift to natural gas, largely driven by regulations of conventional pollutants and by discoveries of shale gas that make natural gas more cost-competitive, will certainly help keep the U.S. on the downward emissions pathway that we’ve experienced in recent years. Of course, achieving bigger, brighter changes in how we produce and consume energy will ultimately require new policies, technological innovation, and broad public support.

Another shadow of hope that we can see if we look hard into the current darkness is that President Obama continues to talk about energy issues in a way that is helpful for the climate.  Yes, he recently proposed to expand drilling for oil in the United States, but he continues to frame the nation’s energy challenge (and, indeed, the world’s) as a challenge that we can meet only through an all-of-the-above energy policy that reserves a vital role for low-carbon, clean-energy sources in meeting our energy needs in the decades to come. Obama’s rhetorical commitment to climate action was again heard in his speech before the British Parliament last month, when he grouped climate change as one of the world’s principle threats to confront along with terrorism, nuclear proliferation, famine and disease.

Looking ahead to the 2012 U.S. presidential election, we can even see a faint shadow of hope (I emphasize it’s a faint one) in the histories of the leading Republican candidates for President.  A number of the leading Republican candidates (including former state governors Tim Pawlenty, Jon Huntsman and Mitt Romney and former House Speaker Newt Gingrich) have in the past supported cap-and-trade policies.  Of course, they wouldn’t admit it now even under enhanced interrogation techniques.

But these men who are running for President on the Republican side are not your classic climate change deniers.  In fact, some of them still agree that the science of climate change is real, although they are not supporting any real action to deal with it.  I know this does not sound like much … but the fact is that these candidates will find it hard to make climate change a polarizing issue in the 2012 election given their records and past statements on the issue – and that is a good thing. 

Of course, if former Governor Sarah Palin of Alaska or another out-and-out climate change skeptic runs for President on the Republican side, then this might change.  And I expect the well-funded, highly-influential Tea Party movement to continue to mislead the public about the science and hold up climate action as a prime example of government run amuck. But in all honesty, I am not sure that running on a climate-change-denial platform is smart politics in America today.  I am convinced from a review of the polls that the majority of the American people actually support reasonable action to develop clean energy sources and take other steps to create a low-carbon economy. 

According to various credible surveys, a majority of Americans (about 60 percent) believe global warming or climate change is happening. It is important to note, however, that these numbers have trended down in recent years in sync with the recession and with the increasing political battles over climate change policy and well-funded attacks on climate science. 

One of the more interesting public opinion surveys on this topic is the so-called “Six Americas” study by Yale and George Mason universities. The project’s researchers identified six distinct subsets of the U.S. population based on their beliefs about climate change.  The six categories are: Alarmed; Concerned; Cautious; Disengaged; Doubtful; and Dismissive.  (Add the name Grumpy and you could have the climate change version of Snow White and the Seven Dwarfs.)

Interestingly, majorities in all six of these groups said they believe the United States should make it a priority to develop clean sources of energy.  Regulating carbon dioxide emissions was supported by a majority of each group except the Dismissive.  (Nobody asked Grumpy what he thought.)  So it’s obvious that a significant portion of the U.S. population supports policies that directly or indirectly would result in reduced emissions of greenhouse gases. 

Where support for these policies begins to decline is where researchers ask Americans what they are willing to pay to achieve these goals.  But still, public support for clean energy (and, to a lesser extent, regulating greenhouse gas emissions) is certainly a hopeful thing we can see as we look into the darkness in the United States on this issue today. And the reason why it is so hopeful is because it suggests to me that the current stalemate on this issue cannot last, especially in the face of continuing extreme weather events such as the recent flooding of the Mississippi River and Texas wildfires that have ravaged nearly 3 million acres.

These are exactly the kinds of events that climate scientists keep warning us will become more frequent in a warming world, and these types of extreme weather events inevitably raise serious questions in people’s minds about whether warming global temperatures are already wreaking havoc with the climate.  

So far, I have talked mostly about national politics in the United States, but it is important to remember that in the U.S. political system, states have an enormous degree of authority and flexibility to advance climate solutions and other policies on their own.  And the good and hopeful news is that many U.S. states have banded together in recent years to launch regional initiatives aimed at reducing emissions and developing clean energy.  This is in addition to individual states acting on their own on these issues. 

The not-so-good news is that state actions on the climate issue suffered a bit of a setback last November.  As was the case with the U.S. congressional elections, the 2010 gubernatorial elections brought to the nation’s statehouses a group of new leaders who adopted strong stands against climate action in their campaigns. This is already setting back some of the progress we were seeing at the state level on this issue in recent years.  For example, New Jersey’s new governor, Chris Christie, who is a rising star in the Republican Party, announced last month that he would withdraw his state from a very promising regional climate initiative that includes 10 northeastern U.S. states. While Gov. Christie said he accepts the scientific consensus that climate change is happening and humans play a role, he follows the standard Republican position of opposing policy action, specifically cap and trade.

But there is still hope among the states.  During the November election, for example, voters in California overwhelmingly rejected a measure aimed at curtailing the state’s nascent efforts to reduce its greenhouse gas emissions. Shortly after that vote, the California Air Resources Board formally approved the state’s cap-and-trade program, which is designed to reduce California emissions to 1990 levels by 2020. A lawsuit by environmental activists opposed to cap and trade challenged the regulations on procedural grounds and may prevent the state from implementing its program on time. But the good news is California is still in the fight. And there is strong public support for what the state wants to do. California Gov. Jerry Brown also has signed into law one of the nation’s most aggressive renewable electricity standards. It requires 33 percent of the state’s electricity be produced by renewable sources by 2020.

Of course, California, as a relatively progressive state,will always provide a more hospitable climate for action on this issue. But the fact that the most highly populated U.S. state will soon be implementing a cap-and-trade system and other measures to reduce emissions has to be a positive sign.

Internationally, the Cancún climate talks showed that there are opportunities for incremental, evolutionary progress in the global negotiations on key operational issues of finance; measurement, reporting and verification; adaptation; technology; and forestry. It is important to understand that progress on these issues does not require a new legal agreement. Each of them can be advanced in tangible ways by decisions of the Parties. That is exactly what was achieved in Cancún. The Cancún Agreements are a package of decisions by the Parties. And what that package does, in large measure, is to import the essential elements of the Copenhagen Accord into the UN climate system and take initial steps to implement them.

What this represents is incremental progress – evolutionary progress – the kind of progress that had eluded us for years because we were so preoccupied with legally-binding outcomes. So we were able to move forward in Cancún on operational issues. But we were able to do so – and this is an important point – only because Parties were willing to put aside their differences on the legal issues.

I encourage the talks this year in Durban, South Africa to build on the effective, incremental approach taken in Cancún. Because the reality is that the U.S. cannot make global commitments until there is stronger consensus for action at home. And even apart from the situation in the U.S., the reality is that few if any developed countries will take on new binding commitments unless China and other emerging economies do as well. For now, we must look to coalitions of the willing to make progress in key areas, such as renewable energy and forest protection. While maintaining the international process is key to working toward the ultimate, longer-term goal of a global climate agreement with legally-binding commitments, actions taking place on the ground in individual countries right now are the most important signs of progress.

The last shadow of hope – and perhaps the most important one – that I want to talk about is the fact that there remains a strong core of business support for reasonable action on the climate issue in the United States.  The Pew Center’s Business Environmental Leadership Council includes 46 major corporations that support mandatory, market-based approaches to tackle climate change.

Starting with 13 companies in 1998, our Business Council is now the largest U.S.-based association of corporations focused on addressing the challenges of climate change and supporting mandatory climate policy. It includes mostly Fortune 500 companies with combined revenues of over $2.5 trillion and over 4.5 million employees. Many different sectors are represented, from high technology to diversified manufacturing; from oil and gas to transportation; from utilities to chemicals.

While individual companies hold their own views on policy specifics, they are united with the Pew Center in the belief that voluntary action alone will not be enough to address the climate challenge.  The bottom line: Business support for climate solutions is surely a hopeful sign amid the present darkness … and it is yet another factor that suggests to me that the current situation can’t last for long.

I would like to end my remarks by drawing your attention to something that will happen today in the United States that, at least on the surface, appears to have very little to do with the subject of my remarks.  On 42nd Street in New York City, at the Foxwoods Theater, a new rock musical based on the Spiderman comics with music and lyrics by U2’s Bono and The Edge has its official opening after several months of delays and various catastrophes along the way. 

Just months ago, many people wondered if it would ever open, given that it was way over budget and that it had gone through a number of cast changes, script rewrites and more.  The low point came when a stunt performer fell more than 20 feet to the stage after a cable snapped on the harness that held him aloft.  Fortunately, he was released from the hospital and is OK, and despite mixed reviews, ticket sales for the production have been, well, phenomenal.

I bring up the opening of the Spiderman musical because it’s a reminder that even when things are at their darkest, there can still be hope for success.  I also bring it up because of the title of the production.  It is called Spiderman: Turn Off the Dark

Yeats told us, “When one looks into the darkness there is always something there.”  And right now, as I have said, we can indeed see shadows of hope in the darkness that has descended on the climate change debate in the United States. When we will be able to turn off the dark, I cannot say.  But I believe it can happen in due time. 

Now perhaps we can turn up the lights for some questions … Thank you very much.

Eileen Claussen addresses the Institute of International and European Affairs in Dublin, Ireland.

Letter to the Editor: EPA Is Following the Supreme Court

This Letter to the Editor appeared in the Wall Street Journal.

 

March 18, 2011
by Eileen Claussen

Your March 15 editorial "Carbon and Democracy" accuses the Environmental Protection Agency of ignoring democratic principles and the rule of law in its efforts to protect the public from the harm caused by changes in our climate. Let's review the facts.

It was the Supreme Court, not the EPA, that decided in 2007 that carbon dioxide meets the definition of pollutant under the Clean Air Act—a law enacted by a democratically elected Congress and signed by a democratically elected President, George H.W. Bush. Responding to the court's decision, and after a thoroughly open process with more than 380,000 public comments, the EPA determined that greenhouse gas emissions do indeed pose a risk to public health and welfare, and are therefore subject to regulation under the act.

The EPA's initial step to reduce greenhouse gases was an agreement with auto makers to improve auto efficiency, reducing oil reliance and saving a car's owner $3,000 over its lifetime. Now the EPA is beginning to require the use of proven cost-effective energy-efficiency technologies in new factories and power plants.

One can argue whether the EPA has been too aggressive or too lenient in its approach. If Congress believes there is a better response to the court's ruling, it should amend the act or enact a new law. That's how democracy works.

The EPA's actions are not the work of an "unaccountable bureaucracy," but of an agency complying with a Supreme Court decision in carrying out a democratically enacted law.

by Eileen Claussen --Published by the Wall Street Journal

Women Leadership in Climate Change Action

Q&A with Eileen Claussen

Originally published by Australian Centre for Leadership for Women as part of an expert panel on climate change, Empowering Women to Lead the Way in Climate Change Action

 

What are the main drivers for you in believing in climate change and taking action?

The issue of climate change is not about belief but science. The scientific community has reached a strong consensus regarding the science of global climate change.  The overwhelming majority of climate scientists believe the warming of the earth is unequivocal. This warming is largely the result of emissions of carbon dioxide and other greenhouse gases from human activities, including industrial processes, fossil fuel combustion, and changes in land use, such as deforestation. Enough is known about the science and environmental impacts of climate change for us to take actions now to address its consequences. In the words of the U.S. National Academy of Sciences 2010 report to Congress: “It is unequivocal that the climate is changing, and it is very likely that this is predominantly caused by the increasing human interference with the atmosphere. These changes will transform the environmental conditions on Earth unless counter-measures are taken.”

 

Can you explain how the cap and trade emissions trading program operates and why do you advocate this program over the emissions tax option?

A cap-and-trade system is one of a variety of policy tools that exists to reduce the greenhouse gas emissions responsible for climate change. I believe it is the best tool because it offers environmental certainty (a cap) and economic flexibility (ability to reduce emissions in places where it’s most cost-effective). Once established, a well-designed cap-and-trade market is relatively easy to implement, can achieve emissions reductions goals in a cost-effective manner, and drives low-greenhouse gas innovation.

The key difference between a tax and the cap-and-trade approach comes down to the issue of certainty and environmental benefit. A tax provides cost certainty; the cost is fixed because of the tax. Cap and trade, on the other hand, provides environmental certainty because of the cap. With a carbon tax, many emitters will reduce their emissions rather than pay the tax.

In more detail … In a cap-and-trade program, the government determines which facilities or emissions are covered by the program and sets an overall emission target, or “cap,” for covered entities (firms held responsible for emissions). This cap is the sum of all allowed emissions from all included facilities. Once the cap has been set and covered entities specified, tradable emissions allowances (rights to emit) are distributed (either auctioned or freely allocated, or some combination of these). Each allowance authorizes the release of a specified amount of greenhouse gas emissions, generally one ton of carbon dioxide equivalent (CO2e). The total number of allowances is equivalent to the overall emissions cap (e.g., if a cap of one million tons of emissions is set, one million one-ton allowances will be issued). Allowance trading occurs because firms face different costs for reducing emissions. For some emitters, implementing new, low-emitting technologies may be relatively inexpensive. Those firms will either buy fewer allowances or sell their surplus allowances to firms that face higher emission control costs.

 

I understand that the Pew Center has produced 85 peer-reviewed reports on climate change in an effort to demystify the subject for members of Congress and interested companies. Can you point out what has been the focus of this effort in relation to what exactly the Center has aimed to demystify and how do you regard the outcomes of this effort in leading the Pew Center on Climate Change?

As a non-profit, non-partisan and independent organization, the PewCenteron Global Change does its best to provide credible information, straight answers, and innovative solutions to addressing climate change. One of the Center’s goals is to demystify a wide range of topics that are critical to the issue of climate change, from the science and impacts, to the economics, to policies, and solutions. Our goal is to provide the best information - in an understandable way - so that policy makers and stakeholders can make informed decisions.

More than any other area, I believe our greatest impact has and continues to be engaging the business community on climate and clean energy policy and solutions. When the PewCenterbegan in 1998, only a handful of brave firms were willing to address the issue. Now our Business Environmental Leadership Council (BELC), which started with 13 companies in 1998, includes 46 mostly Fortune 500 corporations committed to advancing effective and mandatory climate action. In stark contrast to 13 years ago, all of these firms have a good understanding of the issue and have been active in the policy debate.

While a great deal of work remains to be done, I firmly believe the U.S. climate debate is much further along because of the vocal leadership of many progressive businesses. These business leaders understand the significant opportunity for economic growth in a clean energy future. But unleashing the investments necessary to capitalize on these opportunities requires the certainty that can only come with government policy. And that is an effort we continue to work toward with forward-thinking members of the business community. 

 

What do you see as some of the best practice solutions which US businesses have put in place to tackle climate change problems?

Energy efficiency is one key area where businesses are taking action that delivers tangible environmental benefits and saves substantial amounts of money in the process. A comprehensive PewCenterstudy released in April 2010 found that leading companies that give greater attention to energy efficiency have realized billions of dollars in savings and millions of tons of avoided greenhouse gas emissions. The report, From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency, documents leading-edge energy efficiency strategies, describes best practices, and provides guidance and resources for other businesses seeking to reduce energy use in their internal operations, supply chains, and products and services. We are now involved in an assessment of how companies do clean energy innovation, and hope that this analysis and the report we will issue will also be of great value to those in the business sector.

Through our employee-engagement program – Make An Impact– we also know there is a large appetite among employees to learn about constructive solutions to reduce energy use that saves money and helps the climate. By arming their employees with tools to address our climate-energy challenges, companies find great benefits in employee morale and performance.

 

With recent studies showing that the media in the U.S. continues to indicate that climate change science is contentious or does not have any consensus, how do you in your role deal with this environmental skepticism?

The attacks on climate science – mostly dishonest claims driven by ideology and profit – have proven highly effective at misleading the public and souring its support for climate action. Other factors like the down economy make advancing climate policy an uphill battle, but the well-orchestrated, well-funded campaign to discredit climate science is an influential barrier to progress.

To help overcome this obstacle, the PewCentereducates diverse audiences, including business leaders, policy makers, and the public about the strong, clear science behind climate change. Scientists may disagree on some details, like individual weather events, but they have an astonishing level of consensus on the basics:  The planet is warming and human activities are primarily responsible for the warming that has occurred since the mid-20th century.

While we believe the science is indisputable, we know that others do not. So it’s critical to frame the issue in different ways for different audiences while advancing the ultimate goal of reducing greenhouse gas emissions. Talking in terms of energy security or economic opportunities in clean energy are two examples that resonate with people who are not swayed by the science. As President Obama has said: There’s more than one way to skin a cat.

Discussing climate action in terms managing risk is another way to reach audiences that question climate science. This approach is often used by national security experts, and it forces people to consider the level of risk they are willing to live with and steps they can take to minimize that risk. Risk management is a formal version of choices that families regularly make when buying insurance, deciding where to live, or investing in retirement accounts. It’s an approach that offers a way forward on the complicated and highly politicized issue of climate change. And our knowledge of climate impacts, while not perfect, is much stronger than evidence security experts rely on to make decisions regarding highly sensitive topics such as nuclear proliferation or the actions of rogue states.    

 

How can communication about the risks and opportunities of climate change be improved to effect change and action?

To generate greater support for action, the public needs a clearer understanding of the impacts likely to become more common in a warming world. The reality is that talk of global average temperatures does not reach people; we need to make the impacts more tangible. I believe this starts with telling compelling stories about impacts occurring in people’s own backyards. From garden club members to city planners, people are being forced to address climate impacts. Their stories, and the connection to changes in our climate, need to be more clearly communicated to broader audiences.

The PewCenteralso uses extreme weather events as a teaching tool to educate the public about our vulnerabilities to climate change. The fact is that we need to take action now, or we are simply loading the dice for more extreme weather events in the future. We will see more events such as the unprecedented seasonal flooding in Australia, the 2010 Russian heat wave and flooding in Pakistan. We will see more extreme winter snow storms that blanketed the U.S. Midwest and Northeast this year. It is imperative that we start to take action now to reduce emissions and adapt to unavoidable climate change.

These impacts translate into the costs of inaction. While opponents of climate policy attack the costs of regulation as a reason for inaction – and surely there are costs – the overwhelming analysis shows that the benefits of action far outweigh the costs. This message needs to be more clearly communicated so the public better understands the benefits of climate action, or conversely, the costs we face by not reducing greenhouse gas emissions.

 

There have been many reasons put forward as to the failure of the Obama Administration's Climate Change legislation being passed in the Senate in 2010. To what do you attribute this failure?

Passing comprehensive climate and energy legislation through the U.S. Congress was a huge lift under the best of conditions. It required the White House to lay out a legislative roadmap and push its agenda through Congress. The President also needed to use the bully pulpit to help make the case for climate action to voters. Unfortunately, this did not happen.

The poor economy was a major reason that impacted the climate and energy debate in Congress last year. Unemployment was at an all-time high, and Americans were more concerned about creating jobs than anything else. Another issue was the health care debate. Passing that legislation used up a great deal of political capital, and it took time away from addressing other issues, including climate and energy. Climate change also became too politically contentious and there was not the bipartisan support necessary to pass the legislation. 

 

What do you see as being significant about the Cancun climate change achievements?

The agreement reached in Cancún in December fills in many key missing elements of the 2009 Copenhagen Accord, including a stronger system of support for developing countries and a stronger transparency regime to better assess whether countries are keeping their promises. The Cancún Agreements also mark the first time that all of the world’s major economies have made explicit mitigation pledges under the U.N. Framework Convention on Climate Change.

Of course, the ultimate goal of the continuing international talks must be a comprehensive binding climate treaty. That’s the goal of the journey we started on this issue way back in 1992 at the Earth Summit in Rio. But in Cancún we saw countries agreeing on incremental steps that will deliver stronger action in the near term and, we hope, will keep the world on course toward someday agreeing to binding commitments.

Q&A with Eileen Claussen -- Published by Australian Centre for Leadership for Women

Solutions in Steps, Not Leaps: The Year in Review and a Look Ahead

By Eileen Claussen
December 20, 2010

2010 was a year of highs and lows.

On the high side were global temperatures; 2010 will mark the hottest year in recorded history. At the start of the year, there was also the short-lived high of thinking we might be on the precipice of meaningful action in the U.S. Congress to protect the climate. Finally, at year’s end the climate talks in Cancún delivered (surprise!) tangible results in the form of agreement on key elements of a global climate framework.

But alas, the lows won out for most of 2010 as a trumped-up email controversy, continuing economic unease, and growing anti-government sentiment in the United States undermined the effort to forge lasting climate solutions at all levels. 

Congress. Until quite recently, the Pew Center and many others were actively supporting cap and trade as the number-one climate policy solution. After the House passed a fairly comprehensive energy and climate bill in June 2009 that had a cap-and-trade system at its core, we actually thought that it might become the law of the land.

Before long, however, it became eminently clear that the Senate would not be able to pass a similar bill. The 2010 U.S. elections, which brought more doubters of climate change into the halls of Congress, only made it clearer that comprehensive climate action is off the table for now.

EPA. With Congress unable to pass comprehensive climate legislation in 2010, attention turned to what EPA might be able to do under existing authorities. And it turns out that EPA can do quite a lot by taking reasonable steps that have garnered critical support from the business and environmental communities. In late October, for example, the agency announced a sensible proposal to reduce greenhouse gas emissions and improve fuel efficiency for medium and heavy-duty vehicles. This was followed by a November announcement that will go a long way to making sure that new industrial facilities use state-of-the-art technologies to boost efficiency and reduce emissions.

Of course, opponents of these and other EPA regulations will surely raise a ruckus, and there will be loud cries in Congress to delay the regulations and even cut funding for the EPA. But the possibility remains that the agency could conceivably begin to chip away at U.S. emissions in the months and years ahead.

State Actions. Looking beyond Washington, state capitals were the focus of creative thinking and leadership on the issue of clean energy in 2010. Massachusetts, for example, set a statewide energy efficiency standard in 2010 supported by $1.6 billion in incentives. Meanwhile, California voters upheld the state’s greenhouse gas reduction law by defeating Proposition 23. This marked the first direct vote on addressing climate change in the United States, and it won in an overwhelming fashion.

But the overall story regarding climate action in the states was more mixed. While several regional climate initiatives continued to push forward, the November elections brought to the nation’s statehouses a group of new leaders who adopted strong stands against climate action in their campaigns. We will stay tuned to see how their campaign rhetoric translates into governing.

International. The agreement reached by international negotiators in Cancún in December closed out 2010 on a positive note. The Cancún Agreements import the essential elements of the 2009 Copenhagen Accord into the U.N. Framework Convention on Climate Change, including a stronger system of support for developing countries and a stronger transparency regime to better assess whether countries are keeping their promises. The Cancún Agreements also mark the first time that all of the world’s major economies have made explicit mitigation pledges under the Convention.

Of course, the ultimate goal of the continuing international talks should be a legally-binding climate treaty, but in Cancún we saw countries agreeing on incremental steps that will deliver stronger action in the near term and lay the foundation for binding commitments down the road.

Looking Ahead. Looking ahead, I believe 2011 holds promise only if those of us who support climate action can learn from what happened in 2010. In recent years, domestic and international efforts largely centered on a “big bang” theory of trying to achieve everything at once. Instead, it’s instructive now to take a cue from Cancún and accept that a step-by-step approach to building support for climate solutions offers our best shot at progress. 

Calling on the new Congress to pass cap and trade or similarly comprehensive solutions will be a nonstarter, for example.  But there may be an opportunity on Capitol Hill for less sweeping steps to reduce U.S. emissions.  

Supporters would do well to spend the next several months laying the groundwork for incremental solutions by strengthening communications with the public. We need to do a better job of helping people understand both the risks and the opportunities presented by climate change. In the same way we buy fire insurance to protect against an event that has a statistically small chance of happening but would result in severe damage, acting now to cut emissions reduces our vulnerability to severe events that are likely to become more common in a warming world. And the success of the “No on Prop 23” campaign in California suggests that there remains a healthy appetite among the general public and in the business community (which provided substantial support for the effort) to back well-framed climate solutions. 

After a year of highs and lows, we still must aim high in our efforts to address one of the greatest challenges of our time. But we should also heed the lessons of the past year and work for more modest victories now that can keep us on the path to longer-term solutions. 

by Eileen Claussen, President, Pew Center on Global Climate Change-- December 2010
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Steps to Meaningful Action

Click here to download the article (PDF).

November 2010

By Eileen Claussen

This article originally appeared in Environmental Finance.

 

The US failure to pass comprehensive climate legislation obscures real efforts towards reducing emissions – and should not be an obstacle to meaningful progress in Cancún, says Eileen Claussen.

The shift in expectations between the Copenhagen and Cancun negotiations is stark. Unlike the unrealistic hope of striking a new climate treaty held by many last year, no major deal is expected at this year’s global climate change conference in Mexico. But calmer conditions heading into Cancun this December offer a greater chance of meaningful progress on the long voyage to a new international agreement.

Last year’s summit produced the Copenhagen Accord, a political agreement including (for the first time ever) explicit emissions reduction pledges from all major economies. While most agree that a legally binding agreement is still the ultimate goal of these ongoing negotiations, the best plausible outcome in Cancun would be a set of concrete decisions that strengthen the international climate framework.

Core among these decisions: steps to scale up finance to developing countries; and steps to promote transparency so that all nations can be confident that others are fulfilling their pledges. These agreements would open the door to decisions on support for adaptation, climate-friendly technology diffusion, and forest protection. A balanced package like this would mark real progress in Cancun. None of this will be easy. When we consider the domestic challenges many countries face in advancing climate action, especially during difficult economic times, an already complex picture gets extraordinarily muddled.

The United States and China, the world’s two largest greenhouse gas emitters, stand out as chief obstacles. There cannot be a binding international treaty without them, and right now, neither is able or willing to negotiate one.  As China solidifies itself as a global clean energy leader, outspending the United States nearly two-to-one in clean energy investments last year, its emissions continue to soar. And when it comes to addressing climate change globally, China is not distinguishing itself as a leader. China seems reluctant to be transparent about its actions, is unwilling to accept any kind of binding commitment, and opposes a global emissions goal since that would have implications for Chinese emissions.

Meanwhile, the United States has attracted a great deal of attention for its failure to enact national climate legislation, but it is not alone among developed countries. Australia, Canada, and Japan also lack comprehensive national greenhouse gas (GHG) reduction laws. Still, the world looks to America to act.

The United States’ inability to move decisively makes it a big target for those looking to blame someone for the slow pace of the international climate talks.  The Obama administration has repeatedly reaffirmed its commitment to the United States’ Copenhagen pledge – reducing emissions 17 percent below 2005 levels by 2020. But it must show the international community that it has a genuine strategy for achieving that goal. 

Such a roadmap should lay out step by step the various regulatory actions that will start to deliver real reductions in U.S. emissions, while establishing a timetable for enacting domestic climate legislation. Without that, America runs the risk of looking like it is backing away from its pledge, thereby opening the door for other countries to follow suit. U.S. leadership in the form of an emissions reduction strategy would go a long way toward keeping other countries honest and engaged.

Indeed, even in the absence of comprehensive U.S. legislation, federal regulations and the marketplace can combine to deliver positive results for the climate. The U.S. Environmental Protection Agency (EPA) already is taking reasonable steps under the Clean Air Act that will reduce emissions from transportation and utilities sectors, which account for about two-thirds of U.S. GHG output. Tougher auto efficiency standards requiring 35.5 miles per gallon on average by 2016, with a proposed increase to 62 MPH by 2025, offer clear climate benefits.  New standards for hazardous air pollutants will force the retirement of as many as one-third of existing U.S. coal-fired power plants over the next decade. Their likely replacements: natural gas-fired plants that produce fewer GHGs.

Meantime, new shale gas discoveries are driving down market prices, making natural gas an attractive alternative that will reduce emissions in the near term. And although still a small portion of total U.S. electricity generation, wind power has increased by 40 percent annually in recent years. This all suggests that U.S. emissions will hold steady or even decline over the next decade. 

Despite key obstacles to a binding deal – including the lack of U.S. legislation and China’s hard-line positions – I believe that the Cancun meeting in December can deliver on many of the nuts-and-bolts decisions critical to advancing the international framework. Whether or not we can forge comprehensive solutions at the international or domestic levels is not the test of progress at this juncture. Rather, in Washington, Beijing, and Cancun, it is time to put one foot in front of the other and take the steps that will keep us on track to our ultimate destination: real reductions in emissions at all levels and an effective, ratifiable global climate agreement.

Eileen Claussen is President of the Pew Center on Global Climate Change.

by Eileen Claussen, President— Published in Environmental Finance, November 2010
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