For many Americans, U.S. oil dependence has become a concern for reasons ranging from climate change and environmental protection to national security and the economic impact of higher gas prices. But there are other important impacts of our oil dependence, including how foreign oil contributes to the U.S. trade deficit and how rising oil prices decrease American jobs – both particularly salient issues on the current U.S. political agenda.
A recent article from Daily Finance shines light on the 2010 trade deficit, more than half of which is from petroleum-related products. In 2010, the U.S. petroleum-related trade deficit was $256.9B, which represents a 29.6 percent jump from the 2009 petroleum trade deficit. This rise is largely due to increased prices, as the consumption of petroleum-related products in the United States grew by only 1.9 percent from 2009 to 2010 while the price per barrel of oil grew 31.1 percent to $74.66. An issue currently receiving a lot of attention in Washington, the $61B worth of cuts to the national budget sought by the U.S. House of Representatives, is equal to only one fourth of the country’s 2010 petroleum-related trade deficit.
Numbers that large can be hard to put into perspective, so let’s look at how this affects the average American. The graph below shows the U.S. petroleum-related trade deficit per capita (left axis), which is closely related to oil prices (right axis). In 2010 the petroleum-related trade deficit per capita was $832 and has ranged from $600 to $1200 in the past several years. This translates into each American household sending roughly $2,155 out of the U.S. economy in 2010 to pay for oil.
Rising oil prices not only increase the trade deficit, they decrease the number of jobs in America. As energy prices rise, businesses and consumers must spend more on energy and thus have less to spend elsewhere. In his presentation at our recent conference on state and federal roles in climate policy, Mark Doms, Chief Economist at the Department of Commerce, explained that when the price of oil goes up by just $10 per barrel, it translates into a loss of tens of thousands of jobs per month, or up to a quarter of a million U.S. jobs per year. Instead of losing jobs in order to maintain our use of oil, we should focus on creating jobs by investing in domestically produced alternative fuels and vehicles.
In June 2008, oil prices spiked to $145 per barrel, and Americans paid for it at the pump as gas prices reached $4 per gallon. We could be headed into a similar situation, as oil prices rose above $105 per barrel earlier this month and are expected to continue to rise in 2011 and 2012. Because we rely on oil, a resource that is concentrated in the Organization of the Petroleum Exporting Countries or OPEC, we face oil prices that are much higher than a competitive market would yield. This makes U.S. gasoline susceptible to price shocks, and American consumers pay more at the pump than they would in a competitive market.
Here we have highlighted two other important reasons why Americans should care about rising oil prices: they increase the U.S. trade deficit and can decrease domestic jobs. As oil prices continue to rise, these negative economic trends will also worsen. In order to mitigate the impacts of rising oil prices, we need to work towards a clean energy economy and promote the use of domestic alternative fuels and energy efficiency. This would decrease our oil dependence, making the United States less susceptible to rising oil prices while also creating more jobs here at home.
Monica Ralston is is the Innovative Solutions intern
By: Michael Gillenwater and Stephen Seres
Download this paper (pdf)
The Minneapolis Regional Chamber of Commerce will host The 2011 Greening Your Business Conference on April 14, 2011. This conference provides the opportunity to reach business decision makers who are interested in learning more about sustainable and eco-friendly products and services that can be implemented in the workplace.
The Pew Center on Global Climate Change will moderate the Keynote presentation from 4 PM to 5PM. To register for the event, please visit Greening Your Business Conference website for more information.
Alcoa Foundation and the Pew Center on Global Climate Change Launch School-Based Carbon Footprint Challenge
March 14, 2011
Contact: Diana Burkett, 703-516-4146
Alcoa Foundation and the Pew Center on Global Climate Change Launch School-Based Carbon Footprint Challenge
More than 8,000 students to participate in the Make an Impact: Change Our 2morrow (CO2) challenge with chance to win $5,000 grant
Washington, D.C. – Alcoa Foundation and the Pew Center on Global Climate Change today announced an exciting new green education partnership to teach students how their daily actions can reduce harmful emissions and improve the environment.
Set to run from March 14 to April 11, Make an Impact: Change Our 2morrow (CO2) is an educational energy conservation challenge among 8,000 students at 15 schools near Alcoa locations in Cleveland, OH, Hampton, VA, Knoxville, TN, and LaPorte and Warrick, IN.
The challenge builds on the successful Make an Impact program that has engaged nearly 14,000 Alcoa employees at 18 Alcoa locations across the US, resulting in more than 4.6 million pounds of carbon savings and $3.7 million in energy savings. Alcoa isn’t the only corporation involved, both Bank of America and Entergy have realized an estimated 5 million pounds of carbon savings each from rolling out Make an Impact, proving the value of the program for a wide range of organizations.
“Even small changes in our daily lives can lead to significant improvements for the environment,” said Paula Davis, President, Alcoa Foundation. “Through Make an Impact: Change Our 2morrow, we want to educate young people about the potential they have to make a difference and inspire them to become green ambassadors in their communities - at school, at play and at home.”
The winning schools are determined based on the highest number of carbon calculator completions, and will receive a $5,000 grand prize grant or one of five $1,000 runner-up grants, earmarked for ‘green initiatives,’ from Alcoa Foundation. The winners will be announced on Earth Day, April 22.
“Knowing the impact of your energy choices is an important first step to change,” said Katie Mandes, Pew Center Vice President of Communications and Director of the Make an Impact program. “We hope this challenge will motivate young people and the entire community to learn how easy it can be to make a difference.”
The Make an Impact: CO2 challenge is part of a new $7 million Alcoa Foundation investment to address regional environmental challenges, improve energy efficiency and enhance global reforestation projects. The investment is aligned with Alcoa Foundation’s sustainability focus: ‘Reduce, Recycle, Replenish,’ and will engage employees and communities where Alcoa operates.
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ABOUT ALCOA FOUNDATION
Alcoa Foundation is one of the largest corporate foundations in the U.S., with assets of approximately US $420 million. In addition to addressing local needs in communities where Alcoa operates, Alcoa Foundation is focused on promoting environmental stewardship, enabling economic and social sustainability, and preparing tomorrow’s leaders through education and learning. Alcoa Foundation was founded more than 50 years ago and has invested more than US $515 million since 1952. More information can be found at www.alcoa.com/foundation.
ABOUT THE PEW CENTER ON GLOBAL CLIMATE CHANGE
The Pew Center on Global Climate Change was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs. More information can be found at www.c2es.org.
ABOUT MAKE AN IMPACT
The Make an Impact program, developed by the Pew Center on Global Climate Change in partnership with Alcoa Foundation, helps Alcoa employees, their families and surrounding communities reduce energy use, manage their carbon footprint and become an active part of the solution to climate change. The program features:
- A custom-built carbon calculator with individual carbon footprint analysis.
- A dynamic website with tips, tools and resources on how to reduce energy bills and live more sustainably.
- A comprehensive outreach program of educational workshops and hands-on activities to support local action.
The Make an Impact: Change Our 2morrow (CO2) program promotes energy efficiency through a fun and engaging online competition, which features educational resources about energy conservation and an interactive carbon calculator. To find out more about Make an Impact, how your company or organization can sign on or to measure your own carbon footprint, visit www.alcoa.com/makeanimpact.
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.
Kicking off the new year, we released an update of its Climate Change 101 series. Climate Change 101: Understanding and Responding to Global Climate Change is made up of brief reports on climate science and impacts; adaptation measures; technological and business solutions; and international, U.S Federal, State, and local action. Last released in January of 2009, the updated reports highlight the significance of the global negotiations, climate-related national security risks, local efforts to address climate change, the most recent predictions on global temperature changes, and more.
March 3, 2011
Contact: Rebecca Matulka, 703-516-4146
WEBSITE, SERIES DELIVER CREDIBLE INFORMATION TO ADVANCE CLIMATE ACTION
Pew Center Updates Website and Climate Change 101 Series
WASHINGTON, DC – Public opinion continues to be divided on climate change and its causes, and as a result, public access to credible, digestible information about climate change is more critical than ever. To help advance a constructive dialogue that leads to climate action, the Pew Center on Global Climate Change refreshed its website and updated its landmark Climate Change 101 report series.
“Now more than ever, the public needs straight answers about climate change,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “The Pew Center is continuing its work to demystify the issue, and our updated website and report series present straightforward and useful climate change information.”
With a fresh new design and easy-to-navigate organization, the Pew Center’s website provides access to the center’s first-rate analyses and publications of key climate issues. One new website feature is the publications library, which allows users to search for and order free copies of Pew Center reports. The website puts the Center’s Climate Compass blog front and center, and presents timely ideas and insights from science and policy experts on topics critical to the climate debate.
The fast-reading Climate Change 101: Understanding and Responding to Global Climate Change includes nine brief reports and helps inform the climate dialogue by providing a reliable and understandable introduction to global climate change. The updated reports highlight the significance of the global negotiations, climate-related national security risks, local efforts to address climate change, the most recent predictions on global temperature changes, and more.
For more information about global climate change and the activities of the Pew Center, visit www.c2es.org.
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The Pew Center on Global Climate Change was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
Congress is debating whether or not to limit EPA’s authority under the Clean Air Act (CAA), and many are wondering if these environmental regulations are creating a burden to our economy. EPA has released a report that answers that concern head-on, and the results are nothing short of astonishing.
This report takes a hard look at the actual costs and benefits of the regulations implemented under the Clean Air Act Amendments of 1990 (CAAA), from 1990 through 2020. The report finds that while CAAA regulations have indeed imposed costs on society, estimated to be $65 billion in 2020, the benefits from cleaner air in 2020 will total $2 trillion – 30 times higher than the estimated costs.
Last Wednesday’s House Energy and Power Subcommittee hearing on the Energy Tax Prevention Act lived up to its billing as being the first clash between the new majority and minority on the committee. For eight hours, the Members opposing regulation argued that EPA was overstepping its authority in regulating greenhouse gas (GHG) emissions. They asserted that such action would kill jobs and harm the economy. Members supporting regulations argued that EPA is required to act and is doing so in the interest of public health.
The Energy Tax Prevention Act, a draft proposal jointly released by Rep. Upton (R-MI), Rep. Whitfield (R-KY), and Sen. Inhofe (R-OK), would prevent EPA from regulating GHGs, remove GHGs from the Clean Air Act, and specifically repeal all actions related to climate change, including the scientific Endangerment Finding, the Tailoring Rule, New Source Review regulations, reporting requirements for GHG emissions, and proposed New Source Performance Standards. The lone exemption is the Clean Car rule, which would remain untouched.
February 15, 2011
By Eileen Claussen
This op-ed first appeared in Politico
A vocal contingent in the House is now attacking the current Environmental Protection Agency administrator for the very thing her predecessor in the Bush administration wanted to do.
EPA Administrator Stephen Johnson wrote a letter to President George W. Bush laying out the legal and scientific rationale for regulating greenhouse gases under the Clean Air Act. Johnson explained steps that the EPA would take to begin to do so.
Johnson’s letter surfaced last week at the House Energy and Power subcommittee hearing on proposed legislation to strip EPA’s authority to regulate greenhouse gas emissions.
Remarkably, it proved that Bush’s EPA administrator had reached the same conclusions and planned almost identical actions to what the current EPA administrator, Lisa Jackson, has begun implementing.
What exactly does Johnson tell Bush? He insists that the EPA must respond to the Supreme Court’s 2007 decision in Massachusetts v. EPA with a finding that greenhouse gases represent a risk to public health or welfare. This is EPA’s “endangerment finding,” which would be overturned by legislation now being proposed in the House.
Johnson also noted, “the latest climate change science does not permit a negative finding, nor does it permit a credible finding that we need to wait for more research.”
What is most telling is that Johnson states that a positive endangerment finding was “agreed to at the Cabinet-level meeting.” Apparently senior Bush administration officials agreed that climate change poses a risk to our nation’s public health and welfare.
Johnson describes his plan as “prudent and cautious yet forward thinking,” and says it “creates a framework for responsible, cost-effective and practical actions.” Sound familiar?
Jackson, in her statement at the hearing last week, called EPA’s actions a “reasonable approach,” one that “will reflect careful consideration of costs and will incorporate compliance flexibility.”
Indeed, the step-by-step plan of action spelled out by Johnson could be a checklist for the EPA’s recent actions — largely the same actions being aggressively attacked today by some in Congress.
These actions include the endangerment finding; a joint rule-making with the Transportation Department to require more fuel-efficient cars; rules to modify the agency’s requirements for new sources to reduce the number of facilities that would be covered (EPA’s tailoring rule), and proposals to respond to specific petitions (EPA has acted on ones for the utility and oil refinery sectors).
Given these striking similarities, attacks on current EPA actions — that the agency is “an instrument of job destruction” and would “put the American economy in a straitjacket” — now resonate as particularly empty political rhetoric.
How could the right thing to do in the Bush administration suddenly become the wrong thing to do in the Obama administration?
Eileen Claussen served as assistant secretary of state for Oceans and International Environmental and Scientific Affairs. She is now president of the Pew Center on Global Climate Change.