Business

Business

 

To inform its research and advance action on climate change, the Center for Climate and Energy Solutions collaborates extensively with the business community. The primary vehicles for business engagement is the Center’s Business Environmental Leadership Council (BELC). Read More

 

A Look at Emissions Targets

United States:

State & Regional
Proposed Federal Legislation
Bush Administration

International

Business

United States - State & Regional

Entity

Target

Notes and Source

Arizona: State-wide2000 levels by 2020
50% below 2000 by 2040
Executive Order 2006-13
California: State-wide

2000 levels by 2010
1990 levels by 2020
80% below 1990 by 2050

Executive Order S-3-05
California: Major industries state-wide1990 levels by 2020AB 32
Connecticut: State-wide1990 levels by 2010
10% below 1990 by 2020
75-85% below 2001 levels in the long term
Connecticut Climate Change Action Plan
Florida: State-wide

2000 levels by 2017
1990 levels by 2025
80% below 1990 levels by 2050

EO 07-127
Florida: Electric Utilities

2000 levels by 2017
1990 levels by 2025
80% below 1990 levels by 2050

EO 07-127
Hawaii: State-wide1990 levels by 2020Act 234
Illinois: State-wide1990 levels by 2020
60% below 1990 levels by 2050
Press Release
Maine: State-wide1990 levels by 2010
10% below 1990 by 2020
75-80% below 2003 long-term
LD 845 (HP 622)
Massachusetts: State-wide1990 levels by 2010
10% below 1990 by 2020
75-85% below 1990 long-term
Massachusetts Climate Protection Plan of 2004
Massachusetts: Electric Utilities10% below 1997-1999CO2 target only.
310 CMR 7.29
Minnesota: State-wide

15% below 2005 levels by 2015
30% below 2005 levels by 2025
80% below 2005 levels by 2050

Next Generation Energy Act
New Hampshire: State-wide1990 levels by 2010
10% below 1990 by 2020
75-85% below 2001 long-term
The Climate Change Challenge
New Hampshire: Electric Utilities1990 levels by 2006CO2 target only.
HB 284
New Jersey: State-wide1990 levels by 2020
80% below 2006 levels by 2050
Press release and executive order
New Mexico: State-wide2000 levels by 2012
10% below 2000 by 2020
75% below 2000 by 2050
Executive Order 05-033
New York: State-wide5% below 1990 by 2010
10% below 1990 by 2020
State Energy Plan of 2002
Oregon: State-wideStabilize by 2010
10% below 1990 by 2020
75% below 1990 by 2050
Oregon Strategy for Greenhouse Gas Reductions
Rhode Island: State-wide1990 levels by 2010
10% below 1990 by 2020
Rhode Island Greenhouse Gas Action Plan
Vermont: State-wide1990 levels by 2010
10% below 1990 by 2020
75-85% below 2001 long-term
 
Washington: State-wide1990 levels by 2020
25% below 1990 levels by 2035
50% below 1990 levels by 2050
Executive Order 07-02

Western Climate Initiative

15% below 2005 levels by 2020Western Climate Initiative Statement of Regional Goal
Regional Greenhouse Gas Initiative: CO2 emissions from power plants

Cap emissions at current levels in 2009
Reduce emissions 10% by 2019.

our summary
New England Governors and Eastern Canadian Premiers:
Regional economy-wide
1990 levels by 2010
10% below 1990 by 2020
75-85% below 2001 long-term
Climate Change Action Plan of 2001

United States - Proposed Federal Legislation

Entity

Target

Notes & Source

Lieberman-Warner Climate Security Act
S.3036

4% below 2005 level by 2012
19% below 2005 level by 2020
71% below 2005 level by 2050 
As introduced 5/2008

Low Carbon Economy Act (Bingaman-Specter)

S.1766

2012 level in 2012
2006 level in 2020
1990 level in 2030
President may set long-term target greater than or equal to 60% below 2006 level by 2050 contingent upon international effort

As introduced 7/2007
Climate Stewardship and Innovation Act (McCain-Lieberman)

S.280
2004 level in 2012
1990 level in 2020
20% below 1990 level in 2030
60% below 1990 level in 2050
As introduced 1/2007
Global Warming Pollution Reduction Act (Sanders-Boxer)

S.309
2010 level in 2010
2%/year reduction from 2010-2020
1990 level in 2020
27% below 1990 level in 2030
53% below 1990 level in 2040
80% below 1990 level in 2050
As introduced 1/2007
Climate Stewardship Act (Olver-Gilchrest)

H.R.620
2006 level in 2012
1990 level in 2020
22% below 1990 level in 2030
70% below 1990 level in 2050
As introduced 1/2007
Global Warming Reduction Act (Kerry-Snowe)

S.485
2010 level in 2010
1990 level in 2020
2.5%/year reduction from 2020-2029
3.5%/year reduction from 2030-2050
62% below 1990 level in 2050
As introduced 2/2007
Safe Climate Act of 2007 (Waxman)

H.R.1590
2009 level in 2010
2%/year reduction from 2011-2020
1990 levels in 2020
5%/year reduction from 2020-2029
5%/year reduction from 2030-2050
80% below 1990 levels in 2050
As introduced 3/2007
Electric Utility Cap and Trade Act (Feinstein-Carper)

S.317
2006 level in 2011
2001 level in 2015
1%/year reduction from 2016-2019
1.5%/year reduction starting in 2020 (may be adjusted by Administrator)

Electricity sector; all GHGs

As introduced 1/2007

Clean Air Climate Change Act of 2007 (Alexander-Lieberman)

S.1168
2300 MMT CO2 (approx. 2006 level) from 2011-2014
2100 MMT CO2 (approx. 1997 level) from 2015-2019
1800 MMT CO2 (approx.1990 level) from 2020-2024
1500 MMT CO2 (approx.17% below 1990 level) from 2025 forward
Electricity sector; 4 pollutants

As introduced 4/2007
Clean Air Planning Act of 2007 (Carper)

S. 1177
2006 CO2 level in 2012-2014
2001 CO2 level in 2015
1%/year reduction CO2 level from 2016-2019
1.5%/year reduction CO2 levels starting in 2020
1.5%/year reduction CO2 levels starting in 2020 (may be adjusted by Administrator to 3% in 2030 & beyond)
25% below 1990 CO2 level in 2050
Electricity sector; 4 pollutants

As introduced 4/2007
Clean Power Act of 2007 (Sanders)

S. 1201

Goal is to facilitate the worldwide stabilization of atmospheric concentrations of global warming pollutants at 450ppm CO2e by 2050*

2300 MMT CO2 (approx. 2006 level) by 2011
2100 MMT CO2 (approx. 1997 level) by 2015*
1803 MMT CO2 (approx. 1990 level) by 2020*
1500 MMT CO2 (approx. 17% below 1990 level) by 2025*

* If Congress has not passed, and the President has not signed, legislation to address 85% of GHG emissions economy-wide by 2012, further 3%/year reduction in CO2 limits until global GHG emissions reach 450ppm.

Electricity sector; 4 pollutants

As introduced 4/2007

United States - Bush Administration

Entity

Target

Notes & Source

Voluntary "greenhouse gas intensity" target for the U.S.18% below 2002 intensity levels by 2012Announced 2/14/2002
Our Analysis

International

Entity

Target

Notes & Source

Australia

8% above 1990 by 2008-2012

Kyoto Target

Canada

6% below 1990 by 2008-2012

Kyoto Target

European Community

8% below 1990 by 2008-2012

Kyoto Target

Japan

6% below 1990 by 2008-2012

Kyoto Target

New Zealand

1990 levels by 2008-2012

Kyoto Target

United Kingdom

20% below 1990 by 2020
60% below 1990 by 2050

CO2 target only.
Energy White Paper of 2003

European Community
Kyoto Bubble Targets
[i]

Target for 2008-2012

European Community Council Decision of April 2002

Austria

13% below 1990

 

Belgium

7.5% below 1990

 

Denmark

21% below 1990

 

Finland

1990 levels

 

France

1990 levels

 

Germany

21% below 1990

 

Greece

25% above 1990

 

Ireland

13% above 1990

 

Italy

6.5% below 1990

 

Luxembourg

28% below 1990

 

Netherlands

6% below 1990

 

Portugal

27% above 1990

 

Spain

15% above 1990

 

Sweden

4% above 1990

 

United Kingdom

12.5% below 1990

 

[i] The EU-15 nations have joined a "bubble" which allows the joint fulfillment of emissions commitments and preserves the collective emissions reduction goal of 8% below 1990 levels by 2008/2012

Business

Our Business Environmental Leadership Council (BELC) is a group of leading companies worldwide that are responding to the challenges posed by climate change. This section provides a sampling of GHG reduction targets set by these companies. Through their efforts, they are demonstrating that GHG emissions can be reduced significantly and cost-effectively.

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Press Release: The Travelers Companies, Inc. Joins Pew Center’s Business Environmental Leadership Council

Press Release
October 30, 2007

Pew Center Contact: Katie Mandes (703) 516-4146
Travelers Contact: Jennifer Wislocki (860) 277-7458

THE TRAVELERS COMPANIES, INC. JOINS PEW CENTER'S
BUSINESS ENVIRONMENTAL LEADERSHIP COUNCIL

Insurance Industry Leader Commits to Advancing Climate Change Solutions

WASHINGTON, D.C. - The Pew Center on Global Climate Change announced today that The Travelers Companies, Inc. has joined the Pew Center's Business Environmental Leadership Council (BELC) and its efforts to address global climate change.

As one of the largest property casualty insurance companies in the world, Travelers is sensitive to the changing climate and the risks and opportunities it poses to both the company and the economy as a whole. The potential for more frequent and severe weather events arising from climate change affects a wide range of the company’s business activities, including catastrophe modeling, coastal underwriting, claim services, risk control, and other operations. Travelers has become a leading voice calling for proactive collaborative private and public sector strategies to adapt to the physical impacts of climate change and increased resilience to future weather-related catastrophes.

Travelers recently formed a multi-disciplinary team to investigate ways to integrate its core business strategies with initiatives to address the impacts of climate change, including strategies that respond to customer needs arising from the effects of climate change. The company is also in the process of calculating its own carbon footprint and has taken several steps to reduce greenhouse gas emissions, including reducing energy consumption through workplace design and operation, as well as utilizing more energy efficient heating and cooling methods.

“Travelers is committed to supporting initiatives and actions for our company and customers that mitigate the negative impacts of climate change and encourage environmentally responsible behavior,” said Jay Fishman, Chairman and Chief Executive Officer of Travelers. “We are proud to join the Pew Center’s efforts to develop a thoughtful approach to adapt to the inevitable physical effects of climate change.”

“Perhaps no other industry is more exposed to the financial risks of climate change than the insurance industry,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “But the unique risks faced by the industry also present it with an opportunity to take a leadership role in responding to the climate challenge. I am delighted to have Travelers and their considerable expertise join us as we work to advance practical solutions to climate change in this country and globally.”

Headquartered in St. Paul, Minn., Travelers provides a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. It is the second-largest writer of commercial U.S. property casualty insurance, and second-largest writer of U.S. personal insurance through independent agents. Travelers has total assets of approximately $114 billion, total revenue of $25 billion, and employs approximately 33,000 people. The company’s stock (ticker symbol: TRV) is traded primarily on the New York Stock Exchange. For more information on Travelers visit its web site at http://www.travelers.com/.

The BELC was established by the Pew Center in 1998, and the Center is a leader in helping these and other major corporations integrate climate change into their business strategies. The BELC is comprised of mainly Fortune 500 companies representing a diverse group of industries including energy, automobiles, manufacturing, chemicals, pharmaceuticals, metals, mining, paper and forest products, consumer goods and appliances, telecommunications, and high technology. Individually and collectively, these companies are demonstrating that it is possible to take action to address climate change while maintaining competitive excellence, growth, and profitability. The BELC is the largest U.S.-based association of corporations focused on addressing the challenges of climate change, with 45 companies representing over 3.8 million employees and a combined market value of over $2.8 trillion.

The other members of the BELC are: ABB; Air Products; Alcan; Alcoa Inc.; American Electric Power; Bank of America; Baxter International Inc.; The Boeing Company; BP; California Portland Cement; CH2M HILL; Citi; Cummins Inc.; Deutsche Telekom; DTE Energy; Duke Energy; DuPont; Entergy; Exelon; GE; Georgia-Pacific; Hewlett-Packard Company; Holcim (US) Inc.; IBM; Intel; Interface Inc.; John Hancock Financial Services; Lockheed Martin; Marsh, Inc.; Novartis; Ontario Power Generation; PG&E Corporation; PNM Resources; Rio Tinto; Rohm and Haas; Royal Dutch/Shell; SC Johnson; Sunoco; Toyota; TransAlta; United Technologies; Weyerhaeuser; Whirlpool Corporation; and Wisconsin Energy Corporation.

For more information about global climate change and the activities of the Pew Center and the BELC, visit www.c2es.org.

A Cap's in Hand

Full article (PDF)

by Truman Semans, Director for Markets and Business Strategy--Appeared in the World Energy Book which is available from http://www.petroleum-economist.com/
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White House Major Economies Meeting

REMARKS DELIVERED BY EILEEN CLAUSSEN, PRESIDENT, Pew Center on Global Climate Change 

whITE HOUSE Major Economies Meeting
WASHINGTON, d.C. 
 

September 27, 2007  

  • There are a number of reasons why it is critical that our strategies to address energy and climate change take full account of the land use sector.  
    • First, from an environmental perspective, agriculture, deforestation and other land use activities account for nearly a third of greenhouse gas emissions globally.  For some countries, they are by far the largest source of emissions.  Indeed, some countries [Indonesia, Malaysia] rank among the world’s largest emitters only by virtue of their emissions from deforestation.  For those countries, and globally, a comprehensive approach to climate change must reduce emissions from this sector.
       
    • Second, from an economic perspective, some of the lowest-cost opportunities for emission reduction are to be found in this sector.  A number of analyses, including the Stern Review and work done by McKinsey and Company, show significant mitigation potential in the forestry sector for well under $20 per ton of CO2.  The Stern Review concluded that in some regions emissions from deforestation could be reduced for less than $5 a ton.   
       
    • Third, from a development perspective, addressing emissions from this sector can deliver some very significant co-benefits.  Protecting forests protects biodiversity and soils and creates new opportunities to reduce poverty.  Healthy ecosystems support healthy economies.  Putting a value of the climate benefits provided by forests is one of the keys to sustainable development.  
  • So for all of these reasons, this is a sector we can not afford to ignore.     
     
  •  That said, there are number of caveats and complications. 
    •  First, land use is an area where it’s been notoriously difficult to measure emissions and monitor trends.  We’ve made significant headway, with new methodologies technologies, in particular remote sensing by satellite.  But greater progress is needed.  We need enough precision so that we are confident that a ton is a ton.  
       
    • Second, there is no resource more fundamental than land, and we must be mindful of the many competing demands on it.  This is especially true in the case of biofuels, which potentially are a very important part of the answer to climate change and energy security.  But the move toward biofuels will be beneficial only if we ensure that these truly are low-carbon fuels, calculated on a life-cycle basis.  Our land use and biofuels policies need to be closely coordinated to make sure that we are not simply substituting one form of emissions for another. So, what can be done internationally to fit land use into our climate change strategies? 
       
  • I would first emphasize how encouraging it is that this question is being put on the table by those countries that have the most to contribute.  A coalition led by Papau New Guinea and Costa Rica, and separately Brazil, are calling for new measures under the Framework Convention on Climate Change to reduce tropical deforestation.  At the moment, this appears to be among the most promising avenues for deeper developing country engagement in the global climate effort.
     
  • Let me offer a few observations on how forestry and land use can be addressed in a post-2012 climate framework.  
    • First, there appears to be a growing consensus among the experts and policymakers that we should approach this not project by project, but sector-wide.  In other words, a country’s progress is best ascertained by measuring emissions and changes in those emissions across its entire forestry or land use sector.   
       
    • Second, the overriding message from the tropical forest countries is that incentives are needed if they are to undertake stronger efforts.  There are differences among them on just what form these incentives should take.  Realistically, I think we are far more likely to see significant flows under a market-based approach than through an international fund supported by donor countries.  Either way, it is perfectly reasonable for these countries to ask for incentives.  By the same token, though, I think it’s reasonable for those countries providing the incentives to ask in exchange that the countries receiving them be prepared to deliver action on the basis of commitments, not just voluntary pledges. 
       
    • And this leads to my third, and final, point: I do not believe we will be able to mobilize the efforts needed globally in this sector or in any other without a comprehensive set of binding international commitments.  An aspirational long-term goal is not enough.  To sustain ambitious efforts nationally, and to generate the strong incentives tropical forest countries are asking for, countries must have confidence that their counterparts are contributing their fair share to the global effort.  That’s best done through fair, credible, and verifiable commitments.  We should be open to different types of commitments – for some countries, a commitment to reduce deforestation might be the best approach.  But we are fooling ourselves if we think that we can do what’s needed without binding international commitments.  I look forward to our discussion.  Thank you. 

7th IETA Forum on the State of the Greenhouse Gas Market

REMARKS BY EILEEN CLAUSSEN, PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE 

7th IETA FORUM ON THE STATE OF THE GREENHOUSE GAS MARKET
WASHINGTON, DC 

September 27, 2007  

Thank you very much.  I am honored to be a part of IETA’s very impressive program.  I was looking over the schedule for your three days here in Washington, and it’s really quite remarkable.  The program here, and the success of this event, is just one more tribute to Andrei’s leadership of this great organization—he has steered IETA to a leadership role on the climate issue, and I wish him all the best in his new position.   

Not only is the program very substantive and strong, but IETA seems to have a superior sense of timing, too.  This forum is taking place at a truly amazing moment— a blizzard of climate activity and meetings, a flood of proposals for domestic and international action, the melting away of industry resistance. Scientists say to expect more extreme weather as a result of climate change, and it appears it’s already here.   

And even though the China Olympics don’t start until next summer, we already have an Olympics competition going on as countries lay out their climate plans.    

  • Most countries, it appears, plan to compete in the biathlon – growing their economies while limiting emissions growth.
     
  • Then there is the synchronized swimming event, where the countries of the EU will try to align their climate activities without the whole thing turning into a freestyle contest. 
     
  • And the United States, under the current Administration, is favored in the stationary target-shooting event.  This, of course, is an event where you don’t really have to move from where you are now, but you make an awful lot of noise.  And, of course, participation is entirely voluntary.  We’ve actually become quite good at this here in America.   

Seriously, this is a remarkable moment.  Consider all of the other climate change-related events going on.  Of course, we had the Secretary General’s sessions at the United Nations in New York at the start of the week, and right now, also here in Washington, there is President Bush’s meeting of major economies.  In addition to these, there are all kinds of conferences and meetings: the Pew Center did two, the U.N. Foundation is doing one; the Brookings Institution did one.  And there is also the annual meeting in New York on the Clinton Global Initiative, which includes a very substantive track on energy and climate change.   

And, of course, these events follow fast on the heels of the Vienna climate change talks in August, and it is not long before the very important U.N. Climate Change Conference in Bali, where I hope we will see real progress toward an effective, post-2012 framework for international action.   

I mention all of these other events because things are heating up on this issue in more ways than one.  And progress, I believe, will depend on finding a way to bring people together and forge practical and effective climate solutions that can draw broad support.  This is what I call the “sensible center.” 

Now, I am sure all of you are familiar with Google maps.  This is where you go online and you get detailed directions by typing in a starting and an ending address.  Well, today, I’d like to borrow the Google maps approach and see if it can help us find our way to the sensible center, if it can provide some insights on how to get to the place where all of us (or at least most of us) want to go.  

So first we need a starting address—and that’s easy enough.  Let’s look at where things stand right now on this issue.  And that means starting where every conversation about climate change must begin: with the science.  All of us are familiar with the latest findings from the IPCC.  “Warming of the climate system is unequivocal,” they tell us.  They also talk about a 90-percent-or-greater chance that we (humanity) are the cause of this—and a 90-percent-or-greater chance that the world will see more hot extremes, heat waves and heavy precipitation events. 

Just last week, we learned that Arctic sea ice is now at its smallest recorded extent.  There is simply no denying any more that our climate is changing, and that human activities are largely to blame. 

But, despite the science, despite knowing we have a very serious problem on our hands, we continue to burn coal at an alarming rate—China alone is building a new coal-fired power plant every week to 10 days.  The world continues to consume 83 million barrels of oil per day.  Here in the United States, we continue to debate back-and-forth about how to address this issue as a nation—Should we do cap-and-trade?  Carbon tax?  Voluntary approaches only?  And, at the global level, we continue to wander about in this no-man’s land we’ve created between Kyoto’s short-term targets and what comes next.   

All of this is part of our starting address—where we are now as we consider how to get to the place where we ultimately want to go.  However, there are also signs of hope, signs of progress.  Here in the United States, for example, we see an increasing number of states taking independent action to establish targets, experiment with trading, and otherwise reduce their contribution to the climate problem.

  • California, as you all know, has an ambitious set of enforceable emission targets, and the state also is a part of the Western Climate Initiative, together with five other western states and the provinces of British Columbia and Manitoba, all are committed to agreeing on the design of a cap-and-trade program by next August.
     
  • The Regional Greenhouse Gas Initiative, including 10 Northeastern and Mid-Atlantic states, aims to get going in 2009.  Right now, the states are working on adopting the model rule and setting up auctioning and allocation.
     
  • And think of Florida’s ambitious program and the 25 states with renewable portfolio mandates.

At the same time that we see these states taking the initiative, we see members of Congress putting forward very serious proposals (with bipartisan support) aimed at limiting emissions at the national level.  We have had more than 120 hearings on climate change since January, and we have numerous bipartisan bills on the table and emerging.   We are clearly on our way here in the United States—and our journey is aided, in large part, by corporate leaders embracing climate policies that in the past would have been universally condemned by U.S. industry.   

So this is our starting address.  And it is honestly a mixed-bag kind of a place.  A place where we are not doing nearly enough to address this looming crisis, but where there are these signs of hope.  Which brings us to the next question: Where do we want to go from here?  What is our ending address? And our ending address, I believe, is a destination we all can agree on.  That place may not have an exact zip code or street number, but we can describe it in enough detail, I believe, to get a solid set of directions.   

It is a place where the United States and other major emitting countries are--each and every one of them--doing their part to protect the climate.  It is a place where the world is united in pursuing the goal of the U.N. Framework Convention on Climate Change, which was signed by the United States and 190 other nations—nearly every nation on this earth.  And that goal is to “avoid dangerous anthropogenic (or human-cased) interference with the climate system.” 

As I said, the interesting thing about this place we want to get to is that there is no real dispute about it.  It’s how to get there that’s in dispute.  The only thing I can compare it to is going on a trip with your family and agreeing that you want to get to, say, Florida but disagreeing on the best route to take to get there.  And so you have to go to that all-purpose, neutral resource, Google, to find out.  At the Pew Center, we like to think of ourselves as providing the Google map toward practical climate solutions (and this will be my only sponsored link!). 

So what would this Google map tell us about how to get to this place where we want to go, now that we have plugged in our starting and ending addresses?  Well, finding the best route is not an easy task because there are a lot of people throwing out different directions to a climate solution.  And, if we were to follow many of these directions, we would either veer way off course or, more likely, never reach our destination at all. 

These directions tend to fall into opposite extremes.  For example, some call for a mandatory, worldwide cap on greenhouse gas emissions with trading, where every major economy accepts a binding emissions target.  Sounds great but it’s a political non-starter. At the other extreme, many people want the world to join hands and unite around an “aspirational goal” – such as an X percent reduction in global emissions by 2050.  Don’t get me wrong: having an aspirational goal is not a bad thing.  But if aspiration is all you’ve got, well, all you’ve got is aspiration.  Under these proposals, no one is required to do much of anything.  We might all feel good for having this goal but the lack of clear commitments would result in more of the same: a little movement that barely brings us closer to where we need to go.     

The same opposing directions appear when the talk turns to emissions trading.  Some say let’s give away all the allowances; others say auction all of them.  Some say allow offsets for all projects that could conceivably reduce emissions.  Others say don’t give credit for any offsets.  

We know, based on Europe’s experience this past year, that we need a price on carbon that is high enough to give firms a reason to invest in new climate-friendly technologies.  Yet we see proposals that talk about limiting that price to something that will motivate very little innovation.  

Well, there’s another direction we can go—there is a route we can take that avoids all of these detours, and that takes us to our destination.  It involves taking what is useful from all of these highways and by-ways, making the necessary compromises, and following a route that lets us go as fast as we can, and as directly as we can.  For example, we can embrace an aspirational goal but we must back it up with international commitments that are binding but flexible.  And, we can design a cap-and-trade program based on a hard-nosed look at what will be both economically viable and environmentally effective.    

It’s not about aiming low, but rather about abandoning the impossible.     

FOR EXAMPLE: It’s great to talk about the potential of voluntary approaches to reduce emissions, but history has shown that while they do deliver something, they don’t deliver the level of reductions we need.  In the same way, it is pure fancy right now to expect developing countries to agree to binding limits on their emissions.  It actually makes things harder when we lay out these expectations, because when developing countries refuse to join in the global effort because of a perception that they are being asked to do too much, then we lose the United States and others as well. 

And so we need to look for the best route—both domestically and at the global level.  Here in the United States, this means pushing ahead with plans for a cap-and-trade system.  I know there has been some commentary recently about the relative merits of cap-and-trade vs. a carbon tax.  But, once again, the thing we need to look at is what’s actually do-able, what gets us to the place we want to go, and what will actually pass?   

Anyone who thinks this Congress or the next will come close to passing a substantial new tax (even if it is offset by other tax reductions and even if it is designed to achieve the very important goal of reducing U.S. emissions) … well, I have some 20-year-old carbon offsets to sell you.  What’s more, the notion that designing a carbon tax is somehow simpler than designing a cap-and-trade program is simply not true.  It’s just as complex.  Plus, to top it all off, there is no environmental certainty in a tax – you enact it, and you have to wait and see what the effect will be, and you need to adjust it and keep adjusting it to get the effect you want. 

With cap-and-trade, there’s certainty in what the cap will be—and, as a result, you know how much of a reduction in emissions you can expect.   

What are the chances of cap-and-trade legislation passing the Congress?  Well, I will tell you one thing.  The chances improved in a big way when companies such as GE, Caterpillar, Chrysler, Duke, and DuPont all became part of the U.S. Climate Action Partnership.  The USCAP plan would reduce U.S. emissions by 10 to 30 percent within 15 years, and by 60 to 80 percent before 2050.  And, with a whole host of America’s leading companies behind it, I believe USCAP has been, and will continue to be, a significant game-changer.  In fact, I feel confident that I can predict here today that enactment of a cap-and-trade measure is still plausible in 2008, and almost inevitable by the end of 2010.  

Looking internationally, we see the same need for cool-headed, practical answers to the climate problem.  The same need to find the sensible center.   Looking at things in this way, we can see that the post-Kyoto framework must have two essential features.  First, it must be based on binding international commitments; and second, it must be flexible in the sense that countries should be able to take on different types of commitments. 

Why commitments?  Because it’s the best and maybe the only way to deliver the level of effort needed to significantly reduce global emissions.  Without commitments, countries can’t be confident that others are contributing their fair share to the global effort.  And without that confidence, it’s hard for any one country to sustain an ambitious climate effort.  

Why different kinds of commitments?  Because countries are different – very different.  Among the major economies, you have developed countries, developing countries, and economies in transition.  Their per capita emissions range by a factor of 14; their per capita incomes by a factor of 18.  The kinds of policies that work for some won’t work for others.  It’s not one-size-fits-all.   

So the post-2012 framework has to integrate different approaches.  Binding emissions targets make sense for developed countries.  But, as I said, it’s naïve to think that China, India, and the other emerging economies are going to agree to them anytime soon.  Still, we need some form of commitment from those countries, so we have to be open to other possibilities.  One possibility is policy-based commitments.  A country like China, for instance, already has some ambitious national policies: an energy intensity goal, renewable energy targets, and fuel economy standards for cars that are stronger than those here in the U.S.  What if China were to commit to fully implementing those policies in a binding international treaty?  What’s key, I think, is that the commitment be credible, quantifiable, and verifiable.   

This, again, is the sensible center … we need a new set of multilateral commitments.  New kinds of commitments.  Which brings us to the other major climate meeting here in Washington this week – the major economies meeting.  What are we to make of it?   

Well, one thing to be said for it is that it brings together the right group of countries.  But what’s the real objective here?  The administration has said its goal is to get a consensus among the major economies by the end of 2008 – just as the president’s about to leave office – contributing to a global deal under the U.N. convention in 2009.  What kind of deal are they hoping to set up? 

From all appearances, a very weak one.  Just about the only thing the Administration thinks countries need to agree on is an aspirational long-term goal.  And, as I have said, that’s not enough.   

The best way to judge the value of the major economies meeting this week is whether it moves us toward or away from a new set of multilateral commitments.  In other words, does it move us toward the sensible center, or not?  That should, in fact, be the test of everything we do on the climate issue in the months ahead.  

I know that some of us are better at following directions than others, but this is one time when we cannot afford to get lost.  By staying on course to the sensible center, we can begin the long-overdue work of figuring out how to reduce domestic and international emissions as cost-effectively as possible — and in ways that deliver real results for the climate.   

We’re just pulling out of the driveway right now, so fasten your seatbelts.  It’s going to be a long and interesting ride.  Thank you very much.    

A Climate of Change: Manufacturing Must Rise to the Risks and Opportunities of Climate Change

By Truman Semans, Director for Markets and Business Strategy, Tim Juliani and Andre de Fontaine, Markets and Business Strategy Fellows

This article originally appeared in US Industry Today, September/October 2007

 

Recent months have seen an explosion of activity on climate change, to the point where it is now almost impossible to pick up a newspaper without reading about a major new climate-related initiative from the business or policymaking community. This is not surprising, as it is clear that climate change will have economy-wide impacts, and create regulatory, physical, and reputational risks for a wide range of companies.

Manufacturing is not immune from these effects, for as a sector it represents nearly one-fifth (19 percent) of domestic direct emissions, and it is indirectly responsible for an additional 11 percent of emissions through electricity use. Furthermore, for powered manufactured goods such as appliances, electronics and autos, up to 90+ percent of emissions are created from product use, not their manufacture. Considering this greenhouse gas footprint, it is clear that manufacturing will be significantly impacted by any future climate change regulatory regime, and must now, as a sector, begin to confront the risks and opportunities that climate change presents. This includes awareness of and engagement in the national policy debate, as well as examining how climate can be factored into core business strategies.

Although a handful of scientists on the fringe continue to garner press attention with their contrarian views, the overwhelming majority of the scientific community believes that the warming in the atmosphere is unequivocal, and that the warming is human-induced. The latest report of the Intergovernmental Panel on Climate Change (IPCC) – a group of 2,500 climate scientists from across the globe that evaluate the peer-reviewed research on this issue – asserts that there is a greater than 90 percent certainty that most of the warming over the past century is human induced, and that a range of impacts are already being observed.

As the science has strengthened over the last decade, momentum has grown at the local, state and federal level to enact policies that reduce GHG emissions. Today, nearly all 50 states have enacted some form of climate-related standard, while the past several years have seen a steady increase in the level of Congressional attention to climate change.

A carbon-constrained future is imminent, a fact that many businesses now realize. In a survey of large corporations conducted during the development of the Pew Center’s 2006 report, Getting Ahead of the Curve: Corporate Strategies That Address Climate Change, 67 percent of businesses said they expect greenhouse gas regulations to take effect between 2010 and 2015.

A further 17 percent expect this before 2010. This implies climate legislation will pass Congress even sooner. The question now is not whether legislation will pass, but about its timing and the form it will take. Companies that prepare for this future will be the winners, while the rest will be left playing catch up.

Action on emissions
Manufacturing operations that are most likely to be affected by climate change regulations are those that result in significant direct greenhouse gas emissions (GHG), such as cement, iron and steel production, as well as those that are highly energy intensive, such as paper and chemicals operations. Climate change rules are likely to result in upward pressure on energy prices, which means that operational efficiency improvements will have greater benefit than in the past as a basis for advantage. Companies such as DuPont, which figures it has saved over $3 billion from efficiency since 1990, demonstrate the financial benefits embedded in these efforts. Manufacturers that produce highly efficient consumer products will also gain a competitive advantage over producers of similar, but more energy intensive goods and services.

Driven at least partly from a desire to influence the policy debate, a growing number of leading companies across many industries are now openly calling for national GHG limits. One of the most significant recent developments was the formation earlier this year of the U.S. Climate Action Partnership (USCAP). This coalition is an unprecedented collaboration of 23 major corporations and six leading nongovernmental organizations that is calling on Congress to enact mandatory, economy-wide climate protection legislation at the earliest date possible. Specifically, the group recommends Congress establish an emissions reduction pathway with short and mid-term targets equivalent to: between 100-105 percent of today’s levels within five years of rapid enactment; between 90-100 percent of today’s levels within 10 years; and between 70-90 percent of today’s levels within 15 years. Additionally, USCAP recommends a long-term reduction target of 60-80 percent below current levels by 2050.

USCAP believes a cap-and-trade system should be the cornerstone policy to meet these targets, but that additional policies should also be pursued in sectors such as transportation and buildings, in which the initial price signal from cap-and-trade will not be sufficient to reduce emissions and advance new technologies. The coalition also recommends that a federal technology research program be established that provides stable, long-term financing for low-GHG technologies. Additionally, Congress should urge the administration to engage in international negotiations with the aim of establishing emission reduction commitments by all major emitting countries.

The companies involved in USCAP, which include major manufacturers such as Alcoa, Caterpillar, Dow, DuPont, GE, John Deere, Johnson and Johnson – and the big three U.S. automakers – have chosen to become closely involved in the policymaking process because they realize, as the popular saying goes, “If you’re not at the table, you’re on the menu.” Yet, to earn a credible seat at the policymaking table, many companies have found they need to demonstrate their own commitment through meeting their own voluntary emission reduction goals. According to the Pew Center’s research, companies that have taken these steps report financial benefits from a range of climate-related programs, including energy efficiency improvements, process changes, fuel switching, and customer relations (see chart).

The Pew Center’s research found that the ultimate achievement related to climate is a game-changing strategy that allows a company to jump ahead of competitors by creating new markets or reshaping the rules of existing markets in their favor – for climate this means reshaping policy. And such strategies are beginning to emerge. GE and BP are working together to develop up to 15 clean-burning fossil-fuel based power plants that will separate and burn hydrogen while capturing and piping the resulting carbon dioxide into either deep geologic formations or existing oil wells to boost petroleum production. At the same time, BP is also partnering with DuPont to produce biobutanol, a biologically-derived, lower carbon transportation fuel that could replace ethanol for a wide-range of applications in the economy for significant market segments.

The consequences of climate change policy will be most severe for those who do nothing to prepare for it today. By engaging in the policy debate now, firms will help shape the carbon-constrained future in which they will operate. And while there is undoubtedly risk from climate regulation, there is also a great opportunity for the U.S. manufacturing sector to lead the world in producing new climate-friendly products and technologies, thereby helping not only the climate, but also the top and bottom lines.


Truman Semans is the Director for Markets and Business Strategy at the Pew Center on Global Climate Change. He manages the Center's Business Environmental Leadership Council (BELC), a group of 43 largely Fortune 500 corporations working with the Pew Center to address issues related to climate change, and directs Pew research on business and climate. He has consulted with McKinsey & Co. and served as the U.S. Treasury Department’s International Economist on global environment and natural resources.

Timothy Juliani and Andre de Fontaine are Markets and Business Strategy Fellows at the Pew Center on Global Climate Change. They work with the Center's BELC and engage in Pew Center analytic work on climate-related markets and investment issues.

by Truman Semans, Director for Markets and Business Strategy, Tim Juliani and Andre de Fontaine, Markets and Business Strategy Fellows— Appeared in US Industry Today, September/October 2007
Andre de Fontaine
Timothy Juliani
Truman Semans
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Press Release: PNM Resources Joins Pew Center's Business Environmental Leadership Council

Press Release
July 18, 2007

Pew Center Contact: Katie Mandes, (703) 516-4146
PNM Contact: Don Brown, (505) 241-2849

PNM RESOURCES JOINS PEW CENTER'S BUSINESS ENVIRONMENTAL LEADERSHIP COUNCIL

New Mexico-Based Energy Company Supports Action on Climate Policy

 


WASHINGTON, D.C. - The Pew Center on Global Climate Change announced today that PNM Resources has joined the Pew Center's Business Environmental Leadership Council (BELC) and its efforts to address global climate change.

PNM Resources, an energy company with significant operations in New Mexico and Texas and a supplier of energy throughout the Southwest, has set environmental sustainability goals that include reducing carbon dioxide emissions by 7 percent below 2002 levels by 2009. The company also aims to cut nitrogen oxide, sulfur dioxide, and particulate matter emissions as well as reduce its use of fresh water for power production during the same time period. In addition, PNM Resources is a national leader in providing and promoting renewable energy. The PNM Sky BlueTM wind energy program ranks eighth in the nation in customer participation among investor-owned utilities.

As a founding member of the U.S. Climate Action Partnership (USCAP) along with the Pew Center, PNM Resources is playing an active role in formulating comprehensive policy solutions to address climate change. USCAP is an unprecedented collaboration of 25 major corporations and 6 leading nongovernmental organizations that is calling on Congress to enact legislation including a cap-and-trade system at the earliest date possible that slows, stops, and reverses the growth of greenhouse gases.

"Because climate change is a problem of such immense scale, successfully addressing it will require an extraordinary degree of collaboration and cooperation across industries, political parties, and international borders," said Jeff Sterba, Chairman, President, and CEO of PNM Resources and current chairman of the Edison Electric Institute. "This effort by the Pew Center puts that concept into action, and we are proud to be counted as a member."

"Leadership from major energy companies is critical to effectively deal with climate change," said Eileen Claussen, President of the Pew Center on Global Climate Change. "PNM Resources has a clear understanding of the growing risks from climate change, as well as the economic opportunities that new, clean technologies present. I welcome their expertise as we work to develop and enact sound climate policy in this country and globally."

Based in Albuquerque, N.M., PNM Resources serves 835,000 electricity consumers in New Mexico and Texas and 492,000 natural gas customers in New Mexico. Its subsidiaries are PNM, Texas-New Mexico Power, First Choice Power and Avistar. PNM Resources' stock (ticker symbol: PNM) is traded primarily on the New York Stock Exchange. For more information on PNM Resources visit its web site at www.pnmresources.com.

The BELC was established by the Pew Center in 1998, and the Center is a leader in helping these and other major corporations integrate climate change into their business strategies. The BELC is comprised of mainly Fortune 500 companies representing a diverse group of industries including energy, automobiles, manufacturing, chemicals, pharmaceuticals, metals, mining, paper and forest products, consumer goods and appliances, telecommunications, and high technology. Individually and collectively, these companies are demonstrating that it is possible to take action to address climate change while maintaining competitive excellence, growth, and profitability. The BELC is the largest U.S.-based association of corporations focused on addressing the challenges of climate change, with 44 companies representing over 3.8 million employees and a combined market value of $2.8 trillion.

The other members of the BELC are: ABB; Air Products; Alcan; Alcoa Inc.; American Electric Power; Bank of America; Baxter International Inc.; The Boeing Company; BP; California Portland Cement; CH2M HILL; Citi; Cummins Inc.; Deutsche Telekom; DTE Energy; Duke Energy; DuPont; Entergy; Exelon; GE; Georgia-Pacific; Hewlett-Packard Company; Holcim (US) Inc.; IBM; Intel; Interface Inc.; John Hancock Financial Services; Lockheed Martin; Marsh, Inc.; Novartis; Ontario Power Generation; PG&E Corporation; Rio Tinto; Rohm and Haas; Royal Dutch/Shell; SC Johnson; Sunoco; Toyota; TransAlta; United Technologies; Weyerhaeuser; Whirlpool Corporation; and Wisconsin Energy Corporation.

For more information about global climate change and the activities of the Pew Center and the BELC, visit www.c2es.org.

American College and University Presidents Climate Commitment Summit

SPEECH BY EILEEN CLAUSSEN, PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE 

AMERICAN COLLEGE AND UNIVERSITY PRESIDENTS CLIMATE COMMITMENT SUMMIT 

WASHINGTON, DC 

June 12, 2007

Thank you.  I am very happy to be here and to welcome many of you to Washington.  I don’t know if you saw it, but there was a recent report stating that Washington and other eastern U.S. cities will reach summer temperatures of 110 degrees over the next 50 years.  In a related story, Washington is considering a new license plate slogan: Perspiration Without Representation.  

And the interesting thing is we’re already seeing evidence of a changing climate in this part of the country.  More and more species from the deeper South are making their presence known here in Washington, like crape myrtles and camellias, and a telegenic former Republican Senator from Tennessee.  Think it’s a coincidence that our last two presidents are from Arkansas and Texas? They’re moving north, I tell you.    

It’s gotten so bad that many people actually welcome a new Cold War with Russia.  They think it will keep a lid on global warming.  And now a congressman has been caught with money in his freezer.  What better way to keep cool during a hot Washington summer than to slip an ice-cold hundred-dollar-bill into your pocket?   

All joking aside, it is an honor to be here at your first Leadership Summit.  I am delighted to see so many of the nation’s leading colleges and universities make the commitment that your institutions are making—you have set out to be a part of the solution to climate change, not a part of the problem.  And I am certain that your leadership on this issue will inspire others to do their part as well. 

Today, I want to use my remarks to talk about leadership and climate change.  In my view, leaders are those who help us understand, in the words of the English biologist Thomas Huxley, that “the great end of life is not knowledge but action.”  They help us see when the time has come to do something based on what we know about a challenge or about an opportunity that lies before us.  Yes, aspiring to a fuller understanding of our world is to be admired.  It helps to focus our attention, and to pinpoint our actions.  But waiting for perfect knowledge is cowardice, not leadership. 

Moving from knowledge to action.  From what we know to what we must do.  This is what I want to talk with you about today. And I want to start with a brief summary of what we know about the scope of the climate crisis and how to solve it.

Let’s start with the science.  Most of you are familiar with the facts by now. The most recent report from the Intergovernmental Panel on Climate Change projected that global temperatures will increase between 3.2 and 7.2 degrees Fahrenheit by 2100.  Sea levels will rise by as much as a foot to a foot-and-a-half.  Many species will be lost.  In addition, there is a 90-percent or greater chance that the world will see more hot extremes, heat waves and heavy precipitation events.  And it is likely we will see more droughts as well.The science, in other words, is clear: if left unabated, climate change will have tremendous negative consequences for our country and our world. 

The science also tells us there is no longer any doubt about what is causing this problem: greenhouse gas emissions from human sources—and, more specifically, from three key sectors: electricity; transportation, primarily automobiles; and buildings.  Consider this: China is building a new coal-fired power plant every week to 10 days.  And it’s not just China and other developing countries.  Emissions have been growing in the U.S. as well—as of 2006, they were up nearly 18 percent compared to 1990.   

This is what we know about the science, and it seems we are learning more every day. And we also know something else.  We know there are solutions—real technologies that can deliver real reductions in greenhouse gas emissions.  We know, for example, that we can reduce carbon dioxide emissions from cars.  We know there are clean energy sources.  We know there are ways to burn coal more efficiently, and ways to potentially store coal-related carbon emissions underground.  And we know we can increase efficiency in the building sector. 

But still there’s the same problem: we haven’t yet put all this knowledge we have to good enough use.  And that, I believe, is where policy comes in.  We need strong policies at the national and international levels, policies that make it absolutely clear that continuing with the status quo will have both an environmental and an economic cost. 

In weighing what types of policies we need, I believe it’s important to look back at where we’ve been.  Because in the same way that we know from the science that we need to take strong action to protect the climate, we know from history what policies will and won’t work. 

The global effort to try and address this problem kicked off in 1992, you will recall, when another President Bush was in the White House, and when the nations of the world gathered in Rio de Janeiro for what was billed as the Earth Summit.  This was the event where more than 150 countries signed an agreement called the United Nations Framework Convention on Climate Change. 

The UNFCCC, as it is known, sets an ambitious long-term objective: to stabilize greenhouse gas concentrations in the atmosphere at a level that would – and I quote – “prevent dangerous anthropogenic interference with the climate system.”  This is a goal that the United States, and virtually every other nation, has embraced.  

As a first step to achieving this goal, industrialized countries agreed to a voluntary emissions target: they aimed to reduce their greenhouse gas emissions to 1990 levels by the year 2000.  But before long, it became clear that the targets would not be met and that voluntary commitments could not deliver what was needed.  So the United States and other countries began to negotiate a new agreement, one with binding targets, and they agreed at the outset that these new commitments would extend only to the industrialized countries, which so far have contributed the most to the problem. 

Remember: this was more than 10 years ago, and already the world, including the United States, had recognized some very important things about responding to climate change.  First, we recognized that voluntary action was not sufficient.  Second, we recognized that we needed a global framework with binding commitments.  And third, we recognized that, consistent with the Framework Convention, the developed world would have to take the lead.

Well, how quickly some of us forget. 

Five years after the Rio summit, there was another international gathering on this topic in Kyoto, Japan.  This was where the United States and other countries signed the new agreement known as the Kyoto Protocol.  And what the Protocol did was to require developed countries to reduce or limit their emissions of greenhouse gases in relation to 1990 levels, with different countries agreeing to different targets.  The agreement also included a number of features advocated by the United States to ensure countries a high degree of flexibility as they worked to achieve their targets.  They could make actual emission reductions at home, buy emission credits from others, and use “sinks” such as farms and forests to remove carbon from the atmosphere. 

This was another important principle that  would serve us well to remember today: the need to combine binding commitments with flexible ways of achieving them. 

During the negotiations in Kyoto, Vice President Al Gore flew to the ancient Japanese capital to help hammer out the deal.  And the American negotiators ultimately agreed to a binding 7-percent reduction in U.S. emissions below 1990 levels by 2012. 

But there was a problem: It was 1997, and U.S. emissions had already risen over 1990 levels by more than 8 percent.  In other words, we had pledged to reduce our emissions by nearly 15 percent and we didn’t have any kind of program in place to do this, nor did we have the political will to put such a program into place. 

Another problem was that the United States Senate, under the Byrd-Hagel resolution, had already voted unanimously—unanimously—that the United States should not sign any climate treaty that–quote–“would result in serious harm to the economy of the United States.” The resolution also put the Senate on record against requiring the United States and other developed countries to reduce emissions without also mandating—quote—“specific scheduled commitments … for Developing Country Parties within the same compliance period.”

So the fact of the matter is that the Kyoto Protocol had virtually no proponents on Capitol Hill.  And the Clinton administration did next to nothing to try to bring about the ratification of this treaty that its people had made such a big deal of signing.  We clearly were not prepared to deliver at home what we were promising abroad. Not a sterling example of leadership, I must say.

And then, in 2000, American voters elected another President Bush, and within months of entering office, his administration made a unilateral decision to reject the Kyoto Protocol—not to modify it, not to explain the changed circumstances, not to suggest an alternative, but to reject it out of hand.  And in taking this step, the White House raised the ire of other nations that had persevered through years of difficult negotiations and that had acceded to U.S. demands early on that the treaty include emissions trading and other business-friendly mechanisms.

It took the Bush administration fully six years to put forward any kind of alternative to Kyoto, as it did in the run-up to the G8 meeting last week.  And, adding insult to injury, the President’s proposal completely disregarded much of what we thought we had learned about how to spur effective global action on this issue—most importantly, the need for binding commitments that will truly change the world’s emissions growth path.

That, my friends, is not leadership.  For a glimmer of real leadership, you have to look to the other end of Pennsylvania Avenue, where Congress is devoting an unprecedented amount of energy to developing legislation that would (finally) put the United States on  track to addressing this issue in a serious way.

Already this year, there have been more than 70 hearings on the climate issue on Capitol Hill—serious, substantive hearings convened to help members of Congress draft mandatory climate legislation.  In the U.S. Senate alone, there are five bills proposing some form of cap-and-trade program for greenhouse gas emissions, and a total of 80 bills that deal in some way with the climate change issue.   And the leadership of the House has made it clear that they want to pass legislation as soon as possible.

I have given entire speeches this year on what’s happening on this issue on Capitol Hill, and I don’t want to do that here.  But suffice it to say that Congress is taking this issue very seriously, and we may, in fact, see real climate legislation by 2008, and if not by then, almost certainly by 2010.

But, for real action on this issue, real effort to reduce emissions, you need to travel outside of Washington.  

You can find leadership in Bentonville, Arkansas, for example, where executives at Wal-Mart have launched a program to reduce their company’s greenhouse gas emissions. And what is extraordinary about Wal-Mart’s entree to the climate arena is the magnitude of the company’s reach.  Wal-Mart has pledged to work to reduce its emissions, both internally and externally, and the company’s external reach encompasses more than 40,000 suppliers.  The ability of Wal-Mart to transform the debate and reduce energy use and emissions cannot be matched by most countries.  

Among the company’s goals: reducing energy use in Wal-Mart stores by 30 percent, with a corporate goal of eventually being fueled 100 percent by renewable energy.  Wal-Mart also is working to reduce the carbon footprint of its vehicle fleets. Wal-Mart operates 3,300 trucks.  In 2005, these vehicles drove 455 million miles to make 900,000 deliveries to 6,500 stores. Wal-Mart has set a goal of doubling the fuel efficiency of its new heavy-duty trucks from 6.5 to 13 miles per gallon by 2015, thereby keeping some 26 billion pounds of carbon dioxide out of the air between now and 2020. 

You can also find leadership on climate change in Fairfield, Connecticut, home to a little company called GE.  As part of its Ecomagination initiative, GE has committed to doubling its investment in environmental technologies to $1.5 billion by 2010. This is the equivalent of starting a new Fortune 250 company focused exclusively on clean technology. 

And you can find leadership in Sacramento, California. Not content with establishing an ambitious set of greenhouse gas emission targets—such as reaching 1990 levels by 2020—California lawmakers have gone the next step and passed legislation, with real enforcement, to give the targets the force of law.  

Of course, California is not the only state to be exercising a leadership role on this issue. For example, 24 states, including large emitters like Texas, have required that electric utilities generate a specified amount of electricity from renewable sources.  Twenty-eight states have climate action plans. And many states are working across their borders to reduce emissions in a cooperative way.  

California and five other western states, for example, have agreed on a regional target for greenhouse gas emissions.  By August 2008, the states will establish a market-based system to enable companies and industries to meet the target as cost-effectively as possible.  A similar effort including 10 Northeastern and Mid-Atlantic states is aimed at reducing carbon dioxide emissions from power plants in the region.   

And then there are 522 mayors representing 65 million Americans who are aiming to reach the U.S. Kyoto target of a 7 percent reduction below 1990 levels by 2012.   

That is leadership.  And we can also find leadership on the campuses of the colleges and universities that all of you represent. There are wonderful stories on the Presidents Climate Commitment website about colleges and universities reducing their emissions in real, tangible ways.   

However, despite all the great things you are doing on your campuses, and despite the leadership of the states, cities and businesses I have mentioned, U.S. emissions still are trending up not down.  Voluntary action is great, but it is not enough.

We need mandatory policies that will light a fire under what’s happening now to address this issue, policies that will take us to another level of action and commitment.  In the view of the Pew Center, what we need more than anything else is an economy-wide cap-and-trade system. This is when you place a cap on emissions and allow companies to achieve their targets either by reducing emissions outright or by purchasing emission credits from others who may be able to do it more cheaply. 

Cap-and-trade, in fact, is the focal point of an effort involving the Pew Center and other NGOs, along with a number of leading companies.  The group, which now numbers 27, is known as the U.S. Climate Action Partnership (USCAP for short), and we have issued a cap-and-trade proposal with specific targets and timetables—a real plan of action to slow, stop and reverse U.S. emissions. In addition to cap and trade, the USCAP group embraced an array of other policies aimed at building a low-carbon energy economy.Another example of leadership. 

Another example of people and organizations making the shift from knowledge to action on this issue.   

But whether we are talking about USCAP, or about what is happening in the states—or, indeed, about the things you are doing on your college and university campuses—the leadership ranks on this issue remain far too thin.  And this is where you come into the picture in your role as educators.   

Responding to global climate change will be a decades-long challenge.  We know a great deal about how to get started solving this problem right now, as I have said.  But we still need to learn more.  We need to learn more about how to develop and deploy new, low-carbon technologies around the world.  We need to learn more about what types of policies will drive technology development.  And yes, we need to learn more about the science of climate change so we can refine our understanding of exactly what’s happening, and what it will take to avert and adapt to this crisis. 

Your institutions will be the places where much of this learning takes place.  America’s colleges and universities are the incubators for the next generation to lead the climate fight.  It is crucial that you lead by example through efforts to limit your own emissions.  And it is crucial that you educate your students about what you are doing—if only to show them that progress is possible.  But even more crucial is that you make sure this next generation is able to gain the knowledge it needs to act on an issue that will have a profound impact on their lives and on the world they inherit from us.

Climate change is an issue that touches on science, policy, technology, ethics, international relations and other fields of study.  That means encouraging a multidisciplinary approach to the study of climate change.  It means enabling students and professors to work across the disciplines so they can see how all the pieces fit together.  It means creating new majors, new academic programs that enable students and professors alike to give this topic the attention it deserves. It means following the words of the Presidents Climate Commitment that all of you have signed by—I quote—“integrating sustainability into the curriculum.”

And it also means looking at what you can do outside the classroom to educate your students and others—by facilitating and encouraging dialogues on this issue on your campuses. 

“Education is not the filling of a pail, but the lighting of a fire,” said the poet William Butler Yeats.  We need to light a fire in this next generation so they can see the urgency of this issue, explore solutions, speak out for action, and act.    

Today, I am pleased that the climate debate has moved from focusing on what we know to what we must do.  Now, the challenge is to build a common understanding among the young and not-so-young alike …. a common knowledge of what it is going to take to address this enormous problem … and a shared sense of responsibility on the part of today’s—and tomorrow’s—leaders.   

Meeting this challenge will take perseverance, and yes, a certain amount of perspiration as well. But I believe we are up to the task. Thank you very much.   

Business Environmental Leadership Council (BELC)

C2ES's Business Environmental Leadership Council (BELC) was created in 1998 with the belief that business engagement is critical for developing efficient, effective solutions to the climate problem. We also believe that companies taking early action on climate strategies and policy will gain sustained competitive advantage over their peers.

Starting with 13 companies, the BELC is now the largest U.S.-based group of corporations focused on addressing the challenges of climate change and supporting mandatory climate policy. The BELC is comprised of industry leading, mostly Fortune 500 companies across a range of sectors with combined revenues of $2 trillion and 3.5 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 C2ES in the belief that voluntary action alone will not be enough to address the climate challenge. In 2011, the BELC members accepted the following guiding principles:

  1. We accept the scientific consensus that climate change is occurring and that the impacts are already being felt. Delaying action will increase both the risks and the costs.
  2. Businesses can and should incorporate responses to climate change into their core corporate strategies by taking concrete steps in the U.S. and abroad to establish and meet greenhouse gas (GHG) emission reduction targets, and/or invest in low and zero GHG products, practices and technologies.
  3. The United States should significantly reduce its GHG emissions through economy-wide, mandatory approaches, which may vary by economic sector and include a flexible, market-based program. Complementary policies may also be necessary for sectors such as buildings, electricity generation, forestry, agriculture, and transportation that will help drive innovation and ease the transition to a low-carbon economy.
  4. Climate change is a global challenge that ultimately requires a global solution. An international climate framework must establish fair, effective, and binding commitments for all developed and major developing economies.

 

Visit our low-carbon innovation project to learn about the most effective methods used by companies today to bring low-carbon technologies to market

 

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