Energy & Technology

A Cap's in Hand

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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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Contacts and Acknowledgements

Please contact C2ES staff (703-516-4146) for inquiries regarding Climate TechBook content.

C2ES would like to thank the following individuals for their assistance on technology factsheets:

  • Sanjana Ahmad
  • Grayson Badgley
  • Steve Caldwell
  • Amanda Chiu
  • Lauren Cooper
  • Chris Costello
  • Jack Eggleston
  • Bjorn Gangeness
  • Pat Hogan
  • Paulina Jaramillo
  • Matt Kocoloski
  • Kaveh Madani
  • Nick Nigro
  • Olivia Nix
  • Derek Przybylo
  • Logan Rhyne
  • Philip Sheehy
  • Brinda Thomas
  • Tara Ursell
  • Alex Zheng

C2ES also gratefully acknowledges the following individuals for their review of earlier drafts of the technology factsheets:

Name

Affiliation

Richard Bain

NREL

Roger Bedard

EPRI

R. Gordon Bloomquist

 

Joel Bluestein

ICF

Keith Chanon

EPA

Anna Chittum

ACEEE

Peter Ciborowski

MN Pollution Control Agency

Dean Current

University of Minnesota

John Cuttica

University of Illinois at Chicago

Dick  DeBlasio

NREL

Paul Denholm

NREL

Douglas Dixon

EPRI

Kimberly Duncan

American Physical Society

Charles  Forsberg

MIT

Patti  Garland

Oak Ridge National Laboratory

Paul Genoa

NEI

Jan Gilbreath

DOE

Kenny Gillingham

Stanford

Anand Gopal

 

Michael  Gravely

California Energy Commission

George Hagerman

Center for Energy and the Global Environment, Virginia Tech

Bruce  Hedman

ICF

Joe Kantner [Kantenbacher]

 

Carl Koch

EPA

Jonathan Koomey

LBNL

Lea-Rachel Kosnik

University of Missouri-St. Louis

Dana Levy

NYSERDA

James Miller

Argonne National Laboratory

Michal  Moore

Institute for Sustainable Energy, Environment and Economy, University of Calgary in Alberta

Gregory Morris

Green Power Institute

Robert Neilson

Idaho National Laboratory

Brad Nickell

Western Electricity Coordinating Council

Francis O'Sullivan

MIT

Katrina  Pielli

U.S. EPA

David Rapson

UC-Davis

Kenneth Richards

Indiana University

Harvey Sachs

ACEEE

Anna Shipley

Sentech, Inc.

Frank Southworth

Georgia Institute of Technology

Patrick Sullivan

NREL

Tom Tyler

EPA

Charles Visser

NREL

Ed  Wall

U.S. DOE

Susan Wickwire

EPA

Dora Yen-Nakafuji

LLNL

Alex Zheng

KSG/Horizon Energy

 

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Can Technology Transform the Climate Debate?

CAN TECHNOLOGY TRANSFORM THE CLIMATE DEBATE?

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

EXXONMOBIL LONGER RANGE RESEARCH MEETING, MAY 16, 2007

PAULSBORO, NEW JERSEY



Thank you very much.   It is a privilege to be here at your longer-range research meeting. I must admit that I generally steer clear of events whose titles include the words “longer” and “meeting.”  But in your case, I am happy to say I made an exception.

I know that all of you have been busy all week in these meetings—and I am sure you haven’t had much time to keep up with the news.   So I thought I would start my remarks today by telling you a few things that have been happening in the outside world: 

  • First, scientists have discovered still more new evidence of global warming: after an exhaustive study, they have confirmed that M&Ms now melt in your hand.
  • The President, when asked to comment about this finding, said he prefers Skittles.  

With that out of the way, let me say again how honored I am to be here.   When I was told that I would be one of two external plenary speakers for your internal technology advances meeting … well, let’s just say I am internally grateful.  And I hope that any internal technology advances you are working on with respect to climate change become external before very long. 

The reason I say this is because climate change is a problem in desperate need of innovative solutions—the kind of solutions you are working on every day.  

The title of my remarks is “Can Technology Transform the Climate Debate?”   But I could just as easily use the title, “Can the ClimateDebate (and Climate Policy) Transform Technology?” And my answer to both is a resounding “Yes.” We cannot change the debate without the technologies to address the problem. And without the right policies, we will not see technology development and deployment proceed with the urgency that is required.

So let me briefly deal with the first of these questions, where you really know more than I do, and then proceed to the second question, where I hope I can provide some insights.

What kinds of technologies do we need to make a real difference in our ability to address the challenge of climate change? Well, all of you know as well as I do that we need new and better technologies across the board. But I like to think about the world’s technology needs in terms of key sectors. And, with respect to climate change, there are three: the power sector, transportation, and buildings.

In the power sector, which accounts for the largest share of our (and the world’s) greenhouse gas emissions, we have a number of specific challenges. We need to show that carbon capture and storage can work and be affordable; and we need to get renewables to a point where they are competitive on cost. In transportation, we need to work hard on engines and fuels, while at the same time devoting more energy (pun intended) to potential breakthrough advances like hydrogen and fuel cells. And, in buildings, it’s about taking energy efficiency to the next level, and making it easier and more feasible for people to consider on-site power generation using renewables and other low-carbon sources.

We have seen a certain amount of progress in all of these areas, but it’s been largely hit-or-miss. So let’s consider just one example, carbon capture and storage, or CCS, which I understand you’re doing a fair amount of work on yourselves. Carbon Capture and Storage (CCS) is the key enabling technology for a future in which we can continue to use our vast coal resources and also protect the climate. CCS involves the separation of CO2 from other gases emitted when fuels are combusted or gasified and the injection of the CO2 deep underground into geological formations. CCS is still under development, but many experts are optimistic about its advancement. The United States has the geological capacity to store the emissions from its coal–fired plants in depleted oil and gas reservoirs for several decades. Capacity in other geological reservoirs is estimated to be in the hundreds of billions of tons (500 billion tonnes of capacity), enough to store current levels of domestic emissions for over 300 years.

However, at current rates of technology progress and deployment, CCS will not be utilized by power companies at a meaningful level for many decades. We at the Pew Center believe we must accelerate the development of this critical technology. We are exploring a number of options for making this happen. One option would entail demonstrating CCS at a number of commercial coal-based electric generation plants.

While one could pick any number, we have focused on two possible size: A smaller-scale program involving 10 commercial-scale demonstrations, or a program of 30 such demonstrations. The total cost of the demos would be $10 to $30 billion for 10 to 30 plants. This could be funded, for example, by a Trust Fund created by very modest (a hundredth of a cent or less per kwh) fee on electricity generation. The smaller program would build confidence and experience with the technologies and related regulations both within industry and among ordinary citizens; and would provide real-world cost and reliability information. The larger program would be more likely to actually bring down the costs of these technologies, which would have significant national economic advantages if these technologies are to be widely used, as will be necessary if we are going to both avoid serious negative impacts from climate change and to continue to use fossil fuels for a large part of our electricity.

So simply waiting around for these technologies to make their way from the laboratory into mainstream use is not an option. We don’t have the luxury to sit and watch this process evolve ever-so-slowly, like we’re watching American Idol week after week to see who the ultimate winner is. We need to speed the process along. Without picking winners ourselves, we need to enact policies that provide the incentives and that create the climate in which new technologies can succeed.

The climate change problem is simply too urgent, too consequential and too big to do this any other way. ExxonMobil Research and Engineering has been a part of the IPCC process, so all of you know the facts by now: 11 of the 12 warmest years on record have occurred since 1995. Ice sheets are melting. We’ve seen a fourfold increase in major wildfires. And this is just the start of it. Looking ahead, the recent IPCC report projected that global temperatures will rise by between 3.2 and 7.2 degrees Fahrenheit by 2100, and sea levels will rise as much as a foot to a foot-and-a-half. 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 that we will see more droughts as well.

The IPCC is now on record saying, and I quote, that “warming of the climate system is unequivocal.” The group also states that there is a 90-percent-or-greater chance that lion’s share of the increases in temperature we are seeing are a result of increasing concentrations of greenhouse gases from human sources.

All of the scientific evidence sends a clear message, and it is this: if left unabated, climate change will have tremendous negative consequences for our country and the world. And, to solve it, we need to spur a global technology revolution—and we need to do it quickly. For business and government leaders alike, that means acknowledging and understanding the risks, while also seizing the opportunities that climate change presents to think differently about the future of our businesses, our communities and our world.

Risks and opportunities. They are what drive business decision-making every day. And therefore, I don’t think it’s an accident that business leaders are in many cases leading the charge for climate solutions. Nine years ago, the Pew Center established the Business Environmental Leadership Council. The idea was to bring together a group of leading companies who agreed with us, very publicly, that enough was known about the science of climate change to justify taking action to address it.

Now remember: this was a time when most major businesses still looked at climate change as a fringe concern. The perception in business circles—and political circles too—was that serious action was decades away, if indeed it would happen at all. And yet a small group of business leaders were brave enough to join with us at the Pew Center to say the time was right to do something.

Our Council, which began with 13 companies, is now the largest U.S.-based association of corporations focused on advancing solutions to climate change. It includes 43 companies with 3.8 million employees worldwide and a combined market value of over $2.8 trillion. Members are a who’s who of U.S. corporate leadership, from Alcoa and GE to IBM and Intel, PG&E and many more.

Of course, the members of our Council are not the only business leaders who are embracing strong action on this issue. In all sectors of the economy, there are companies and CEOs who are reducing emissions and calling for broader action to reduce emissions. And the reason they’re doing this, as I said, is because they understand the risks and the opportunities that climate change presents.

Let’s start with the risks. These businesses that are out in front on this issue have seen the science, and they understand that our lives, our environment, and our national security – they are all at risk from climate change.

And these businesses also understand something else. They understand that climate change poses real risks to their operations. According to the global insurance giant, Allianz, climate change already is increasing the potential for property damage at a rate of between 2 and 4 percent each year.

Just last week, super-investor Warren Buffett said that climate change – and I quote – could “materially change” the probability of catastrophes, increasing both the frequency and the intensity of storms. Citing the risks to Berkshire Hathaway’s catastrophe reinsurance operations, he said the firm would be charging more for coverage. Because of global climate change, he said “it would be crazy” to keep the firm’s rates at the same level as before.

And that just covers the risk to the insurance industry. Tourism, agriculture, finance, real estate, offshore oil and gas exploration … all of these industries (and more) face serious and compelling risks. And consider the risks for electric utilities and other businesses that do nothing to address this issue now—and then are forced to play a costly game of catch-up down the road as governments finally (and inevitably) get serious about reducing emissions.

The Energy Information Administration says U.S. greenhouse gas emissions in 2005 were 17 percent higher than they were in 1990. Eighty-three percent of the total in 2005 consisted of carbon dioxide from the use of fossil fuels. This simply cannot continue—and business leaders increasingly understand this. They understand that climate change is a real problem, and that regulation is inevitable. They understand that they had better be ready to operate in a world of carbon constraints.

According to the group CERES, investors filed 42 shareholder resolutions on the climate issue as part of the 2007 proxy season. This was nearly double the amount of resolutions filed three years ago, and ExxonMobil was on the list of companies that were the targets. The filers of these resolutions included state and city pension funds, foundations, socially responsible investment firms, and religious pension funds. Altogether, they represented more than $200 billion in assets, so these aren’t your average board meeting gadflies. And an important focus of their resolutions was risk disclosure – in other words, the shareholders simply wanted to know what these companies were doing to prepare for looming constraints on their emissions.

Again, people see government regulation as inevitable. It’s going to happen – it is just a matter of when. Last October, the Pew Center released a report based on a survey of 31 members of our Business Environmental Leadership Council. In the survey, 90 percent of these companies said they believe that government regulation is coming. Seventeen percent, in fact, said regulation would take effect before 2010, and 67 percent said it would happen between 2010 and 2015. And remember: this survey was taken before the shift in congressional leadership in 2006.

So business leaders – and investors too -- understand that this train is rolling down the tracks. And, rather than trying to throw something in front of it, many leading businesses have made the strategic decision that they want to get on board and help shape the policies that are going to affect how they do business for years to come. Because not being ready is a serious risk.

There is also serious risk in not knowing what’s coming down the tracks at all. Consider this quote: “Uncertainty about regulations, both for 2008-2012 and beyond 2012, creates a higher level of risk for companies. In Europe and Canada, for example, concerns are growing regarding companies’ willingness to invest in energy-intensive activities … The uncertainty about future regulations raises questions about the longer-term viability of such investments.” End quote.

It sounds like part of a Pew Center report. But this is your company, ExxonMobil, talking about climate-related risks to its operations and the need for more certainty in government policies so that it can plan ahead. You can find that document on the ExxonMobil website. It’s called “Tomorrow’s Energy.”

Now, from the risks that climate change poses for business to the opportunities. There’s a little U.S.-based company you may have heard of called GE … and GE has done a remarkable thing. It 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. Is GE doing this for PR purposes? Not only. No, they’re really doing it because they see enormous opportunities in developing and marketing the clean-energy and energy-efficiency technologies of the future.

And GE is not alone. In the energy business, ExxonMobil and other quote-unquote “oil” companies are investing billions in alternative energies and other climate-friendly technologies—not out of the goodness of their corporate hearts but because they see real opportunities for profits and growth.

Climate concerns have initiated a wave of new investments in the technologies that will help to reduce emissions in the decades ahead. Consider this:

  • In the first quarter of this year, venture capital investing in so-called “cleantech” industries in North America and Europe totaled $903 million, a jump of 42 percent from the year before.
  • In 2005, Goldman Sachs bought one of the largest wind power developers in the United States and led financing for a $60 million fund for development of rooftop solar systems. Later that year, the firm committed up to $1 billion more for renewable energy and energy efficiency projects.
  • And the largest public pension fund in the United States, CalPERS, has teamed up with California’s teachers retirement system to dedicate more than $500 million to seed alternative energy businesses.

Clearly, a growing number of businesses and a growing number of investors see a growing number of opportunities in developing the energy technologies that are going to help us finally get a handle on the climate problem. But still, the current level of investment and the current level of activity is not enough. Emissions continue to grow by leaps and bounds—even as scientists are telling us with almost unanimous certainty that our current course will take us to a very dangerous place.

And so this is where the question I really wanted to answer comes in. 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. We need policies that will slow, stop and reverse our emissions, policies that send a clear signal that reducing greenhouse gas emissions will be rewarded in the marketplace. And we need policies that will speed up the process by which new low-carbon technologies are developed and deployed.

Now, I am sure that many of you are thinking this all sounds wonderful and good. But what are the chances of these kinds of policies actually making it into law? And, if you are skeptical, I understand. Under Democratic and Republican leaders alike, our nation has not exactly had a record of strong action on this issue.

But times have changed. I believe we have reached both a turning point and a tipping point in the policy debate on this issue. The turning point has come in large part from the science—people now accept that this is an open-and-shut case. They accept that we have a very serious problem on our hands, and they’re ready to consider solutions.

The turning point also has come from the actions of state leaders on this issue. Businesses are not the only ones who are stepping up to the climate problem and trying to shape solutions. At the state level, governors and other officials are taking action on their own, they’re starting to explore what works to reduce emissions, and they are showing that it’s politically possible to do this: you can adopt serious policies to reduce emissions without putting yourself at grave political risk, and without throwing down roadblocks to continued economic growth.

Consider just a few examples of what states are doing. In February, the governors of California and four other western states joined forces to set 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.

In addition to the western governors’ agreement, there is the agreement among 10 Northeastern and Mid-Atlantic states (including New Jersey) to create their own emissions trading system. Known as RGGI, it is aimed at reducing carbon dioxide emissions from power plants in the region.

In addition to joining together in these regional efforts, states are acting on their own to reduce emissions. To date, 14 U.S. states have adopted their own statewide targets for capping and, ultimately, reducing their greenhouse gas emissions. The District of Columbia and twenty-three states, including large emitters like Texas and California, have required that electric utilities generate a specified amount of electricity from renewable sources. And there are countless other things states are doing.

And then there is California. Not content with establishing an ambitious set of greenhouse gas emissions targets—such as 1990 levels by 2020—California has gone the next step and passed legislation, with real enforcement, to give the targets the force of law. California also has taken steps to begin regulating carbon dioxide emissions from cars and trucks.

So this is a major turning point: California and all of these other states actually are doing something to protect the climate. Under Republican and Democratic leaders alike, they are embracing real action to reduce emissions—not because it’s the politically fashionable thing to do but because, like the business leaders I have talked about, they understand the risks. And they also see the opportunities for their states. By embracing renewable fuels and other technologies, states are carving out a niche for themselves in the new-energy economy of the 21st century.

So if that’s the turning point, then what’s the tipping point? Well, the tipping point, I believe, happened earlier this year. That’s when several members of our Business Environmental Leadership Council joined with the Pew Center and others in a high-profile appeal for U.S. government action to address climate change. The group is known as the U.S. Climate Action Partnership (USCAP for short), and this wasn’t just a PR move. Rather, the USCAP group issued a specific 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.

As of last week, the USCAP group includes 26 members, including major businesses, from General Motors and Dow Chemical to Alcoa, GE and PG&E; and major NGOs, including not only the Pew Center but also the Natural Resources Defense Council, the National Wildlife Federation and others. The company partners have total revenues of $1.7 trillion and a collective workforce of more than 2 million in every U.S. state. And the reason I say this is a tipping point is because this unique, nonpartisan collaboration has sent a clear message to lawmakers—and that message is this: America needs national policies to address the climate problem, and we need them ASAP.

But don’t just take my word that this is a tipping point. Others are saying so as well. At a hearing in February, Senator John Warner of Virginia, who sits on the Environment and Public Works Committee, paid tribute to USCAP's role in helping to bring the issue of climate change into what he referred to as the “big leagues.” He added, "When I see such an extraordinary cross-section of America's free-enterprise system, together with the environmental groups, come and form a group like this, you've got my attention.”

What types of policies does USCAP recommend? First and foremost, we are urging our nation’s leaders to enact policies for mandatory reductions of greenhouse gas emissions from major emitting sectors. That includes large stationary sources such as power plants, as well as transportation and energy use in commercial and residential buildings. The cornerstone of this economy-wide approach would be a cap-and-trade program.

Cap-and-trade, as you know, is a policy that requires emissions reductions while allowing companies to trade emission credits. The most important benefit of this approach: it provides a price signal for greenhouse gases. This price signal, in turn, will stimulate investment and innovation in the new technologies we need.

The USCAP partners recommend that Congress adopt specific short- and mid-term emission reduction targets for our nation. Within five years after what we refer to as the “rapid enactment” of mandatory legislation, USCAP says emission levels should be at 100 to 105 percent of where they are today. After ten years, they should be at 90 to 100 percent. After 15 years, the target would be 70 to 90 percent of today’s emissions.

USCAP also recommends a “target zone,” or aspirational goal, that is 20 to 40 percent of today’s emission levels by 2050. In other words, by 2050, we believe greenhouse gas emissions levels should be cut by 60 to 80 percent from where they are today.

Now remember who is saying this—together with the Pew Center and the other NGO partners, these are some of the largest companies in the world, companies that are major sources of greenhouse gas emissions. And the report that this coalition produced together was just the start of it. All of the partners in this coalition are committed to working together to turn their recommendations into legislative reality.

Although there have been business-NGO coalitions on environmental issues before, none to date has had the impact on key audiences—policymakers, the public, and other business people—that USCAP appears to be having, based what's we’ve seen over the past few weeks. We have shown Congress that there is a consensus emerging in the business community that the time is right for federal climate legislation. While there are still voices opposed to reasonable action, it is increasingly clear that these opponents are out of step and out of touch.

So just in the last few months, we have seen both turning points and a major tipping point in the climate debate. And together with the change in power on Capitol Hill last year (which could be considered another tipping point), these developments have brought Congress much closer to real action to begin to rein in U.S. emissions.

Already this year, there have been more than 65 hearings on the climate issue on Capitol Hill—serious, substantive hearings convened to help members of Congress draft mandatory climate legislation. And 106 bills that either directly concern or mention climate change have been introduced. The leadership of the House has made it clear that they want to pass legislation as soon as possible. And the Speaker of the House and the Senate Majority Leader have both said that, after Iraq, climate change is their first priority.

And there is additional political pressure for solutions due to the 2008 Presidential contest. On the Democratic side, you have a number of candidates who have pledged to make climate change an important part of their platforms. Among the Republicans, there is U.S. Senator John McCain, who co-wrote the first cap-and-trade bill in the U.S. Congress way back in 2003.

Given the changing politics on this issue, it is plausible that the United States could have a mandatory climate policy in place by 2008, and it’s likely we will have such a policy by 2010.

But, again, a mandatory cap-and-trade policy, no matter how ambitious or how broad its scope, is not the only policy we need. In the same way that there is no single technology fix to the climate problem, there is no single policy fix either. We need technology and research incentives. We need policies to ensure that we can adapt to the level of climate change that is already built into the atmospheric system. We need specific policies aimed at specific sectors of the economy, from transportation and energy to agriculture. And we also need to join all these other policies with a commitment to re-engage in the international negotiations on this issue.

Climate change, as we all know, is a global problem—and, therefore, it requires global action. Even if we were to embrace the most aggressive program imaginable to reduce the United States’ contribution to climate change, global energy use will continue to surge and climate change will remain a significant threat. We cannot protect the climate without a global framework that enlists all countries to do their part to reduce emissions, and that provides poorer countries with the support they need to do so.

All of you know about the Kyoto Protocol. This is the international agreement that sets specific targets for developed countries to reduce their greenhouse emissions by the year 2012. President Bush rejected Kyoto early in his first Administration—and so the United States is not a part of it. Australia also opted out. And, without those two countries, the Protocol covers only about one-third of global emissions. What’s more, even if all the countries that are part of Kyoto meet their targets, which is unlikely, global emissions in 2012 will still be 30 percent higher than they were when the Kyoto Protocol was signed in 1997. Clearly, that’s not good enough.

International talks have begun on what to do after 2012, when Kyoto’s current targets expire. And there is only one way forward in my view: the United States is going to have to drop its go-it-alone attitude and be a part of these discussions. Because if the world’s largest emitter were to step up and say we are ready to make a deal, then China and other emerging economies might also be willing to enter the negotiations in a substantive way. And we could potentially see an agreement that committed all major economies to action.

At the Pew Center, we’ve done a great deal of work on how to structure an international climate agreement that is fair and effective and politically palatable for everyone. And we believe you can do this in a way where everyone has binding commitments. They’re not necessarily the same type of commitments, but they are commitments. And they ensure that everyone is a part of the solution, including developing and developed countries alike.

Again, this is not solely the view of the Pew Center. The members of the USCAP also agreed that the United States has to make international engagement on this issue a priority. And the companies that are part of the Pew Center’s Business Environmental Leadership Council have always said that the U.S. must lead the global climate fight.

I want to close today by asking my opening question again: Can technology transform the climate debate? I believe that it already has. As I said, we have seen some progress in developing some of the key technologies—enough progress, in fact, to convince policymakers and others that there are solutions out there, that this is do-able but only if we ramp things up in a big way. And I hope I have offered some clues about how the climate debate (and climate policy) have the potential to transform technology as well.

I hope that I have also left you with a better sense of the passion for solutions and the level of commitment I am seeing among business leaders today with respect to climate change. The companies we are working with at the Pew Center believe very strongly that, given the risks and the opportunities, it is in their interest—and in our nation’s interest as well—to act on this issue in serious and substantive ways. And these business leaders now have a seat at the table as Congress is shaping solutions.

A few years back, one of our nation’s top leaders said this when he was asked about U.S. action on climate change: he said that those who think they are vying for a seat at the table are mistaken – because there is no table. He was saying there was no place to discuss what we needed to do about this issue because, in his view, nothing needed to be discussed.

Well, there is certainly a table now. And not only does this table exist, but today we are bringing in many more chairs and making the table even bigger as more and more business leaders gather round. I will say it again: we have reached a tipping point—and we’ve seen some remarkable turning points as well. And what they’re all pointing to are real changes in both policy and technology.

Again, I thank all of you for the important work you are doing to find solutions to the climate problem. And I encourage all of you to pull up a chair as the debate continues. This is a table where there is always room for more.

Thank you very much.

U.S. Greenhouse Gas Emissions by Gas

In 2012, the United States emitted 6.5 billion metric tons of greenhouse gases (CO2e). Carbon dioxide accounted for the largest percentage of greenhouse gases (82%), followed by methane (9%), nitrous oxide (6%), and other greenhouse gases (3%). Total U.S. emissions for 2012 totaled 6,525 million metric tons of CO2e and net emissions, taking sinks into account, totaled 5,522 tons CO2e.


Source: Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2012 (EPA 2014)

For China, the Shift to Climate-Friendly Energy Depends on International Collaboration

For China, the Shift to Climate-Friendly Energy Depends on International Collaboration

By Jeffrey Logan, Joanna Lewis, and Michael B. Cummings

Originally published in the January/February 2007 issue of Boston Review

According to the latest International Energy Agency forecast, China may become the world’s largest emitter of greenhouse gases as early as 2009. While it will be many decades before China surpasses the United States in cumulative emissions, annual emissions from China are clearly rising rapidly, with potentially dangerous global implications.

Scientists in China have declared the urgency of the climate-change problem, and the highest levels of government now acknowledge that it is a serious issue. Zhang Guobao, the vice-chairman of the National Development and Reform Commission (which oversees economic and energy policy), recently remarked, “Because we’re a coal-dominant country, we have to take responsibility for lowering greenhouse emissions.” However, these sentiments have yet to be reflected in either domestic climate policy or international-level commitments. China has taken a wait-and-see approach in the international climate change negotiations, unwilling to discuss making a commitment to reduce emissions until the developed world demonstrates its own commitment to do so.

But while China waits and sees, it is also constructing hundreds of pulverized-coal-fired power plants that are likely to lock in a trajectory of high greenhouse-gas emissions for 50 years or more. Coal will likely remain the fuel of choice for many decades in China, despite the severe economic, social, and environmental dislocations it creates, making future efforts to stabilize atmospheric concentrations of carbon dioxide significantly more difficult.

In the absence of an explicit national-level climate-change mitigation strategy, China’s energy strategy—driven by its economic-development goals—by default becomes its climate policy. The 2003 comprehensive National Energy Strategy Policy calls for maintaining growth in energy use at half the rate of GDP growth—essentially a doubling of energy use between 2000 and 2020 while GDP quadruples. Yet even to maintain this relatively impressive intensity of GDP and energy growth through 2020, the Chinese energy sector is poised to continue its breathtaking expansion.

Although the National Energy Strategy Policy calls for reducing the overall contribution of coal to the energy mix (down to less than 60 percent), overall coal capacity is slated to increase rapidly. Also planned are dramatic expansions of nuclear power, small- and large-scale hydropower, and increased renewable energy utilization (including large growth targets for wind-power and solar-energy technologies). Nuclear capacity is to expand more than four times by 2020, large-scale hydro is to more than double (requiring the building of a dam the size of the Three Gorges Project every two years), and non-hydro renewables are to grow by more than 100 times. However, targets and predictions related to Chinese economic and energy growth are notoriously uncertain, and the feasibility of these projections have been questioned, including the implications of expanding the use of nuclear power and large dams. Also uncertain is China’s ability to reduce its reliance on coal, particularly since China’s increases in coal capacity in the last two years were the largest ever. In the event that nuclear or renewable energy goals are not met, coal may end up filling the void—leading to an even greater increase in China’s greenhouse-gas emissions than currently projected.

The decentralized nature of the institutions and actors of China’s energy sector poses additional challenges to effective greenhouse-gas mitigation. Development of China’s energy sector is carried out largely at the local and regional level, where central-government mandates are not always reflected in local decisions. Moreover, the central government has little control over the construction of new power plants: regional power shortages have spurred a wave of new plant construction, often completed without central-government approval.

All these factors combined call into question the Chinese central government’s ability to move down a different, more climate-friendly path without meaningful international engagement and assistance. It is therefore critically important for the international community to increase bilateral and multilateral collaboration with China to address shared energy and environmental concerns before it commits to half a century of carbon-intensive infrastructure. Five areas are particularly well-suited for further engagement and offer strong opportunities to expand global benefits:

Energy efficiency. Efforts to improve energy efficiency are the most effective and affordable measures China can take to meet development goals while reducing greenhouse-gas emissions. Continuing its tradition of relatively impressive energy-efficiency policies, China recently approved new fuel-economy standards for its rapidly growing passenger-vehicle fleet that are more stringent than those in Australia, Canada, and the United States. Moreover, the government has set an extraordinarily ambitious target of cutting energy intensity by one fifth by 2010.

International partners can help China to build on these important efforts, in particular by promoting the business, financial, and regulatory skills needed for energy-efficiency projects and standards, and to reform policies that impede market-driven projects. Developing incentives for accelerated technology transfer, particularly for the private sector, are also crucial. Many of these efforts are already underway, and Chinese government officials are open to proposals that can help them meet their targets. Foreign partners need to be open and flexible so that their efforts can have maximum impact.

Energy security with climate benefits. China’s booming economy has required a huge expansion in imported raw material, especially oil, since 2001. Chinese national oil companies have begun to purchase oil and gas assets around the globe as a way to increase energy security. Some nations view these actions with alarm, since there are potentially destabilizing military, political, and economic implications. From a climate perspective, China’s growing interest in coal liquefaction is also alarming because making transportation fuels from coal through chemical transformation sends approximately twice as much CO2 into the atmosphere as using standard crude oil.

Better integrating China into the processes of managing the global energy system would make it a more helpful partner in managing that system. Increased participation in the IEA, G-8 and other global bodies involved in high-level energy dialogues would provide opportunities for developing shared understandings on topics affecting global energy security. Such dialogues could lead to energy-security-enhancing initiatives with climate benefits, and could lead the way toward climate-focused dialogue between the major energy consumers of the world. But any such endeavours will need to be backed by meaningful actions. China and its international partners could also discuss deeper technical collaboration on vehicle technologies, alternative fuels, and associated policies. However, any partnerships first need to focus on a dramatically improved atmosphere of trust and sincerity.

Energy security with climate benefits. China’s booming economy has required a huge expansion in imported raw material, especially oil, since 2001. Chinese national oil companies have begun to purchase oil and gas assets around the globe as a way to increase energy security. Some nations view these actions with alarm, since there are potentially destabilizing military, political, and economic implications. From a climate perspective, China’s growing interest in coal liquefaction is also alarming because making transportation fuels from coal through chemical transformation sends approximately twice as much CO2 into the atmosphere as using standard crude oil.

Better integrating China into the processes of managing the global energy system would make it a more helpful partner in managing that system. Increased participation in the IEA, G-8 and other global bodies involved in high-level energy dialogues would provide opportunities for developing shared understandings on topics affecting global energy security. Such dialogues could lead to energy-security-enhancing initiatives with climate benefits, and could lead the way toward climate-focused dialogue between the major energy consumers of the world. But any such endeavours will need to be backed by meaningful actions. China and its international partners could also discuss deeper technical collaboration on vehicle technologies, alternative fuels, and associated policies. However, any partnerships first need to focus on a dramatically improved atmosphere of trust and sincerity.

Advanced coal technologies and carbon sequestration. For the past few years, China has built, on average, one new large power plant each week. Provided that it can overcome technical, financial, regulatory, and social barriers, carbon capture and storage (CCS) may become a critical option for reducing greenhouse-gas emissions from fossil-burning plants throughout the world, but especially in coal-intensive countries such as China. While China is unlikely to invest in CCS systems for coal plants in the next decade or two due to the cost, it is looking to collaborate on advanced coal technology research including coal gasification. China is also keenly interested in enhanced oil-recovery methodologies that could use carbon dioxide in the process. CO2-enhanced oil recovery can help anchor early investments in CCS infrastructure that might otherwise have to wait for a more comprehensive climate policy.

Once more, international partnerships can help. A new U.K.-led initiative, part of the China–EU partnership on climate change, aims to accelerate experience with CCS by building a demonstration plant in the next decade. And Huaneng, China’s largest coal-based power-generation company, is one of 12 energy companies participating in the U.S. FutureGen “clean coal” project, attempting to become the world’s first integrated sequestration and hydrogen production research power plant.

China is also collaborating with international partners on coal and CCS technologies through the Asia Pacific Partnership on Clean Development and Climate, known as the AP6. Officially launched in January 2006, the AP6 brings together China, the United States, Australia, India, Japan, and the Republicof Korea in an agreement based on clean energy technology cooperation. Some have criticized the AP6 as an attempt to further weaken the Kyoto Protocol, but limited funding raises doubts about whether there is enough glue to hold the membership together. The AP6 does bring together an important grouping of nations, and therefore has the potential to lay the groundwork for future action.

Finally, China is a member of the Carbon Sequestration Leadership Forum, an international initiative of 22 countries currently collaborating with the International Energy Agency to deliver recommendations to the G-8 in 2008 on how CCS can be enhanced in the near term. The Forum is opening its meetings to new participants but doesn’t yet seem to offer much interest for developing countries such as China.

Advanced coal technologies and carbon sequestration. For the past few years, China has built, on average, one new large power plant each week. Provided that it can overcome technical, financial, regulatory, and social barriers, carbon capture and storage (CCS) may become a critical option for reducing greenhouse-gas emissions from fossil-burning plants throughout the world, but especially in coal-intensive countries such as China. While China is unlikely to invest in CCS systems for coal plants in the next decade or two due to the cost, it is looking to collaborate on advanced coal technology research including coal gasification. China is also keenly interested in enhanced oil-recovery methodologies that could use carbon dioxide in the process. CO2-enhanced oil recovery can help anchor early investments in CCS infrastructure that might otherwise have to wait for a more comprehensive climate policy.

Once more, international partnerships can help. A new U.K.-led initiative, part of the China–EU partnership on climate change, aims to accelerate experience with CCS by building a demonstration plant in the next decade. And Huaneng, China’s largest coal-based power-generation company, is one of 12 energy companies participating in the U.S. FutureGen “clean coal” project, attempting to become the world’s first integrated sequestration and hydrogen production research power plant.

China is also collaborating with international partners on coal and CCS technologies through the Asia Pacific Partnership on Clean Development and Climate, known as the AP6. Officially launched in January 2006, the AP6 brings together China, the United States, Australia, India, Japan, and the Republicof Korea in an agreement based on clean energy technology cooperation. Some have criticized the AP6 as an attempt to further weaken the Kyoto Protocol, but limited funding raises doubts about whether there is enough glue to hold the membership together. The AP6 does bring together an important grouping of nations, and therefore has the potential to lay the groundwork for future action.

Finally, China is a member of the Carbon Sequestration Leadership Forum, an international initiative of 22 countries currently collaborating with the International Energy Agency to deliver recommendations to the G-8 in 2008 on how CCS can be enhanced in the near term. The Forum is opening its meetings to new participants but doesn’t yet seem to offer much interest for developing countries such as China.

Safe and Secure Nuclear Power. China’s leaders have called for a new growth era in nuclear power, motivated in part by a recognition of its over-reliance on coal. Despite almost certain difficulties in reaching its ambitious goals for nuclear power in the coming decades, China is still likely to significantly increase its nuclear fleet. The international community should engage China and other nuclear countries in developing and enforcing an enhanced regime of international waste and proliferation safeguards to ensure that growth is done responsibly. If successful, such an enhanced international regime could help to ensure an acceptable role for nuclear power to contribute to long-term global efforts to address climate change. Until this is addressed, in actions such as the recent agreement between the U.S. and India, proliferation concerns may outweigh potential climate benefits.

Research, development, and demonstration for renewables. Motivated by the economic and environmental benefits that these technology industries provide, China is committed to developing indigenous renewable-energy technology industries and has set aggressive targets. China’s national renewable-energy law went into effect in January 2006, offering financial incentives for renewable energy development. Targets that have been announced in conjunction with the renewable-energy law and subsequent government documents include 16 percent of primary energy from renewables by 2020 (includes large hydropower—which would place the current share at about seven percent today), and 20 percent of electricity capacity by 2020, which includes 30 gigawatts of wind power, 20 gigawatts of biomass power, 300 gigawatts of hydropower capacity. Policies to promote many renewable-energy technologies in China also aim to encourage local technology-industry development; China is already producing commercial wind turbines that sell for approximately 30 percent less than similar European and North American technology, and 35 million homes in China get their hot water from solar collectors—more than the rest of the world combined. China also has a burgeoning solar photovoltaic industry.

Nevertheless, non-hydro renewable technologies will make up a relatively small fraction of the energy mix in China over the next few decades. Yet given the challenges facing the widespread deployment of CCS and nuclear power in the near term, the commercialization of renewables by the major energy-consuming countries of the world offers an important opportunity for international collaboration with China. The entry of Chinese manufacturers into these rapidly expanding global markets may drive cost reductions and increase the viability of renewable energy technology utilization worldwide. Assistance with several embryonic Chinese technologies could push these technologies into the marketplace. Combining China’s growing manufacturing prowess with the innovation experience of other industrialized countries to enable widespread commercial deployment of solar photovoltaic and utility-scale wind turbines should be a high priority of the international community. Many existing international forums, such as the UNFCCC and the WTO, are being underutilized to discuss key issues surrounding renewable-energy technology transfer, including the role governments can play in facilitating the sharing and protection of intellectual-property rights.

Providing modern energy services for 1.3 billion people in a climate-friendly manner is a daunting challenge. Fortunately, the Chinese central government is demonstrating increasing awareness of the problems posed by climate change and interest in altering China’s current energy-development trajectory. However, the central government’s ability to significantly alter this trajectory without meaningful international engagement during the critical time period of the next ten or 20 years is questionable. In particular, U.S. leadership to address energy and climate issues at home and in international forums is essential to expand cooperation with China and other large developing countries. There are ample opportunities to address linked climate-protection, energy-security, and economic-development issues—more opportunities for collaboration available than political willpower currently supports. But change can come quickly, and those prepared to engage will benefit first.

---------
Adapted from “Understanding the Climate Challenge in China,” in
Climate Change Science and Policy, edited by Schneider, Rosencranz, and Mastandrea, forthcoming. Original version includes citations.

by Joanna Lewis, Jeffrey Logan, and Michael B. Cummings— Appeared in Boston Review, January/February 2007
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Building Solutions to Climate Change

Cover Buildings In Brief

November 2006

This In-Brief describes how the built environment can make an important contribution to climate change mitigation while providing more livable spaces.  It concludes that with current technologies and the expansion of a few key policies, significant reductions in greenhouse gases can be realized in the near term.  Furthermore, combining technology research and development with clear and sustained climate and energy policies would drive more dramatic reductions over time.

Press Advisory

Download the In-Brief (pdf)

This In-Brief draws heavily on the Pew Center report entitled Towards a Climate-Friendly Built Environment.

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Getting Ahead of the Curve: Corporate Strategies That Address Climate Change

Corporate Strategies Report Cover

Read what the
Harvard Business Review
has to say about the Report (pdf).

Getting Ahead of the Curve: Corporate Strategies That Address Climate Change

Prepared for the Pew Center on Global Climate Change
October 2006

By:
Andrew J. Hoffman, The University of Michigan

This report serves as a "how to" guide for corporate decision makers as they navigate rapidly-changing global markets. The report presents an in-depth look at the development and implementation of corporate strategies that take into account climate-related risks and opportunities.

Download the Entire Report (2MB pdf)
Download the Executive Summary (pdf)
View presentations from the October 18, 2006, Corporate Strategies Workshop

The report is comprised of two main sections:

1. The Synthesis Report lays out a step-by-step approach for incorporating climate change into corporate strategies and is based on results from a 100-question survey completed by 31 companies, six in-depth case studies, outside literature on corporate strategy, and input from the Pew Center's Business Environmental Leadership Council (BELC).

Synthesis Report (1.5MB pdf)

2. The Case Studies section features an in-depth look at the strategy-making process of these six companies:

Cinergy (now Duke Energy) (pdf)
Swiss Re (pdf)
DuPont (pdf)
Alcoa (pdf)
The Shell Group (pdf)
Whirlpool Corporation (pdf)

Foreword

Eileen Claussen, President, <?xml:namespace prefix = st1 />Pew Center on Global Climate Change

There is a growing consensus among corporate leaders that taking action on climate change is a responsible business decision. From market shifts to regulatory constraints, climate change poses real risks and opportunities that companies must begin planning for today, or risk losing ground to their more forward-thinking competitors. Prudent steps taken now to address climate change can improve a company’s competitive position relative to its peers and earn it a seat at the table to influence climate policy. With more and more action at the state level and increasing scientific clarity, it is time for businesses to craft corporate strategies that address climate change.

In this Pew Center report, author Andrew Hoffman of the University of Michigan has developed a “how to” manual for companies interested in developing effective climate strategies. One of the clearest conclusions is that businesses need to engage actively with government in the development of climate policy. After years of inaction, momentum is growing at the federal level to pass mandatory climate legislation. Nearly all the companies surveyed in this report believe that federal legislation is imminent, and 84 percent of those believe federal standards will take effect before 2015. With a number of new climate bills forthcoming, it is clear that Congress has entered the design phase for legislation. Now is the ideal time for the corporate sector to engage constructively with lawmakers to ensure that sensible policy is developed to reduce greenhouse gas emissions at the lowest possible cost.

And constructive engagement is tightly linked with another compelling theme of this report: the shift of companies’ focus to creating climate-related market opportunities. Companies with a strong history of reducing emissions are shifting their focus from risk management to exploring new business platforms. They understand better than their peers that new markets will be created and existing ones will change. There will be winners and losers. The shape of climate legislation will be the strongest factor in determining how the market rewards innovators of climate-friendly products and services, as well as how it punishes laggards. More than ever, integrating climate issues into corporate strategy is a necessary aspect of managing risk and seizing competitive advantage.

The Pew Center would like to thank Mike Lenox, Forest Reinhardt, and Paul Tebo for their comments on an earlier draft of the report; Alcoa, Cinergy (now Duke Energy), DuPont, the Shell Group, Swiss Re, and Whirlpool for agreeing to be profiled for the case studies in the report; all the companies that completed the Corporate Strategies Survey; and the many member companies of our Business Environmental Leadership Council that provided comments and guidance throughout the research process.

 

Exexutive Summary

This report compiles the experience and best practices of large corporations that have developed and implemented strategies to address climate change. Based on a 31-company survey, six in-depth case studies, a review of the literature, and experience gained by the Pew Center in working with companies in its Business Environmental Leadership Council (BELC), the report describes the development and implementation of climate-related strategies. It is primarily a “how to” manual for other companies interested in developing similar strategies. But the report will also be of value to investors and analysts in evaluating the effectiveness of company strategies for managing climate risk and capturing climate-related competitive advantage. Finally, it will offer policymakers insight into corporate views on greenhouse gas (GHG) regulation, government assistance for technology advancement, and other policy issues. Although the report focuses primarily on U.S.-based multinationals, it considers the global context of climate change and related market transformation.

The report describes eight specific steps clustered into three stages that describe the various components of a climate-related strategy. Table ES1 summarizes these steps, which include assessing emissions and exposure to climate-related risks, gauging risks and opportunities, evaluating action options, setting goals and targets, developing financial mechanisms, engaging the organization, formulating policy strategy, and managing external relationships. The report is organized along the framework presented in the table, though it must be emphasized that individual companies do not necessarily follow the steps shown in a linear fashion.

Lessons learned at each step of the strategy development process are presented throughout the report. Taken together, four overarching themes emerge from the survey results and case studies. The first is the importance of strategic timing. Some companies acknowledge the dangers of starting too early on climate action, while others highlight the risks of starting too late. Despite continuing uncertainty, there is general consensus among the companies in this report that recent changes in the level of external awareness about climate risks, state government action, momentum toward stronger federal policy, and consumer demand for cleaner and more efficient products make it imperative to act now. Well-timed strategies can prepare companies for eventual regulation and create flexibility for longer-range strategic options.

A second theme is the importance of establishing an appropriate level of commitment. While the companies in this report are leaders in their industries, some caution against getting too far ahead of the competition. For many companies, uncertain demands from government, the marketplace, and the financial community—coupled with limited hard data and models to guide aggressive action—make it challenging to support extensive expenditures on GHG reductions. Therefore, many companies justify early action on other grounds: the managerial imperative to undertake low-risk initiatives that produce immediate or near-term cost benefits; their fiduciary obligation to address risks from climate change and from related regulations, particularly to the extent these could affect future asset values and market positioning; and socially and ethically responsible business values—that is “doing the right thing.”

Corporate Strategies Table Strategies Development
Click Here to see a larger image (PDF)

A third theme for many companies is the need to influence policy development. Any policy that regulates GHG emissions will certainly constitute a major market shift, setting new “rules of the game” and changing the competitive landscape. Companies in this report feel they cannot leave the ultimate form of such regulations to chance. All policies are not equal; they will, by their nature, favor certain actions, companies, and industries. Early action is seen as a way for companies to gain credibility and leverage participation in the process of policy development, and thereby have a measure of control over their future business environment.

A fourth and final theme is the importance of creating business opportunities. Companies with a history of climate-related activity are trying to shift their strategies from a focus on risk management and bottom-line protection to instead emphasize business opportunities and top-line enhancements. Firms that incorporate climate change into their core business strategies will be in the best position to take advantage of emerging opportunities and gain competitive advantage in a changing market environment. Sustainable climate strategies cannot be an add-on to business as usual; they must be integrated with a company’s core business activities.

In the end, it is the consensus of the companies in this report that climate change is driving a major transition—one that will both alter existing markets and create new ones. As in any such transition, there are risks and opportunities, and there will be winners and losers. In this context, a growing number of companies believe that inaction is no longer a viable option. All companies will be affected to varying degrees, and all have a managerial and fiduciary obligation at least to assess their business exposure to decide whether action is prudent.

About the Author

Andrew J. Hoffman
Holcim Professor of Sustainable Enterprise
University of Michigan

Dr. Hoffman is the Holcim (US) Professor of Sustainable Enterprise at the University of Michigan; a position that holds joint appointments at the Stephen M. Ross School of Business and the School of Natural Resources & Environment. Within this role, Professor Hoffman also serves as Faculty Co-Director of Michigan’s dual-degree (MS/MBA) program of the Frederick A. and Barbara M. Erb Institute for Global Sustainable Enterprise. Professor Hoffman’s research deals with the nature and dynamics of change within institutional and cultural systems. He applies that research towards understanding the cultural and managerial implications of environmental protection and sustainability for industry. He has published over fifty articles/book chapters and four books.

Prior to joining the faculty at the University of Michigan, Professor Hoffman was an associate professor of organizational behavior at the Boston University School of Management, a visiting professor at the Kellogg School of Management and Reykjavik University and a senior fellow with the Meridian Institute. Prior to academics, he worked for the US Environmental Protection Agency (Region 1), Metcalf & Eddy Environmental Consultants, T&T Construction & Design and the Amoco Corporation.

 
 
 
 
Andrew J. Hoffman
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Climate Change: The State of the Question and the Search for the Answer

CLIMATE CHANGE: THE STATE OF THE QUESTION AND THE SEARCH FOR THE ANSWER

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

ST. JOHNS UNIVERSITY, October 5, 2006

 

Thank you very much. It is an honor to be here at St. John’s and to be a participant in your religion and science project.

I thought I would open today with a passage from Rachel Carson’s Silent Spring:

The history of life on earth has been a history of interaction between living things and their surroundings. To a large extent, the physical form and the habits of the earth’s vegetation and its animal life have been molded by the environment. Considering the whole span of earthly time, the opposite effect, in which life actually modifies its surroundings, has been relatively slight. Only within the moment of time represented by the present century has one species acquired significant power to alter the nature of his world.

That species, of course, is us. And alter it, we have. Which brings me to the somewhat cryptic title of my remarks, The State of the Question and the Search for the Answer.

You might well ask -- what is the State of the Question? It seemed fairly straightforward to me when I first sat down to prepare these remarks, but the more I thought about it – the more elusive the question became. After much pondering, I decided that perhaps this needed to be done somewhat in reverse – that in order to figure out the State of the Question, we actually needed to first ask and answer a series of preliminary questions that will lead us finally to the state of the question.

So let’s begin our search with questions about the science of climate change, the technologies that can be used to address the problem, and the policies that will help get those technologies into the marketplace. And let me provide some relatively easy answers. And then I can move on to what I view as the larger question and the search for that answer.

  • First, do we know enough about the science of climate change to justify taking action now?
  • Second, do we as a civilization possess the capacity, the tools and the technologies to address this issue in a meaningful way?
  • And, third, are there are public policies that will help us reach our goals in ways that will not cause undue hardship?

Is the Science Certain?

Starting with the science, the question is: do we know enough to act? And the answer is unequivocally yes. Every year (and even every month, it seems), the science on climate change becomes more certain and more disturbing.

Consider September. NASA released a study showing higher temperatures and a pronounced retreat of winter sea ice in the Arctic over the past two winters. This study has raised the level of concern because although for years, scientists have reported declines in summer sea ice, this is the first time a similar pattern has been shown happening in the dark of the Arctic winter, a new step in the progression toward an ice-free Arctic. September also produced a report in the journal Nature putting to rest any suggestion that long-term changes in solar output, or luminosity, might be influencing global temperatures and climate. This claim has long been put forward as a reason for inaction – it’s not human interference that is causing the earth to warm, it’s a natural phenomenon. Not so according to solar astronomer Peter Foukal, who together with his colleagues has found that the theory of sunspot-driven climate change has no veracity. The impact of sunspots on the climate are simply too small and too constant to account for the changes in temperature that we are seeing.

So the drumbeat continues. And what the drumbeat tells us in no uncertain terms is that climate change is happening. Scientists are increasingly concerned too that the impacts we are seeing are happening much sooner than expected. Global temperatures have risen by more than 1 degree Fahrenheit over the last century, with average warming of as much as 4 degrees in some regions.

And this warming trend has accelerated in recent years. The ten warmest years recorded have all occurred between 1995 and 2005. 2005 itself was the second hottest year on record, surpassed only by 1998, when El Niño conditions in the Pacific Ocean contributed to above-average temperatures worldwide. And the trend continues in 2006. For the United States at least, the first six months of this year were the warmest such period on record. No U.S. state was cooler than average for the six-month period; and five states experienced record warmth.

Scientists say these increases in global temperatures will continue and accelerate in the years ahead. The projection is that average global temperature will rise by two-and-a-half to 10 degrees Fahrenheit over the next century, with the level of warming in the United States projected to be higherthan the global average.

We are often asked if the role of human interference in this warming is equally unequivocal, and the answer is also yes. The level of warming we have seen cannot be explained by natural causes. Scientists have established a clear connection between rising temperatures and rising concentrations of greenhouse gases, primarily from the burning of coal and oil. In fact, looking back 400,000 years, we can see that global temperatures and atmospheric carbon dioxide levels go up and down together as if in a dance; they are intimately connected.

In 2004, a researcher named Naomi Oreskes conducted a review of over 900 peer-reviewed journal articles to see if there was indeed a consensus among the scientific community on the role of human actions on the climate, and what she found was this: not one of the authors disagreed with the evidence showing a human impact on the climate over the last several decades. Not one. Her findings titled, Beyond the Ivory Tower: The Scientific Consensus on Climate Change, were published in the Journal Science.

Last year the United States National Academy of Sciences joined a group of 10 other science academies from throughout the world in a statement calling for “prompt action” on global warming by world leaders. The statement could not have been more explicit about the connection between human activity and climate change. It stated: “Action taken now to reduce significantly the build-up of greenhouse gases in the atmosphere will lessen the magnitude and rate of climate change.”

Of course, it is not just rising temperatures that concern scientists but rather what those temperatures will mean to life on earth. We are confident that we will see an increase in weather extremes – more droughts, more storms, and more floods; the melting of glaciers and global sea-ice and the inevitable rise in sea-level; water shortages; and species loss, to name just a few. I will be talking later in my remarks about the impacts of climate change. For now, I will simply say that the impacts of climate change on the natural world will continue to intensify, and will become more and more substantial over time. And it is frankly remarkable to me that people, especially in Washington, still suggest that more research is needed before we should seriously deal with climate change.

Do We Have the Capacity to Respond?

And so the logical next question is— do we have the capacity and the technologies to do something about this? And the answer again is: Yes. We do. We may not have them all but we most certainly have more than enough to get started in a very serious way.

Each of us make choices every day that can make a difference. The cars we drive, the way we choose to get to work, the lighting and the appliances we have in our homes, the companies we invest in, the letters we do or do not write to our Congress people and our local and national newspapers. Each of us has a voice and a choice. There are countless things we can do in our daily lives to limit our impact on the climate.

And I know we have the capacity to solve this problem in large part because of the companies I work with on this issue. When we established the Pew Center in 1998, we knew that corporate involvement in shaping climate solutions was going to be essential. This was a real departure at the time—there was a real wall of opposition in corporate circles to even acknowledging that climate change was a concern. This was part of a deep-seated almost ideological divide that existed between ‘corporate America and ‘environmentalists’ – you were either pro-environment or pro-business – but you weren’t both. But climate change is different- it’s bigger and more complex than other environmental issues we have dealt with. So we persevered—and, since engaging our original 13 companies to launch our Business Environmental Leadership Council, we have grown the group to 41 companies today. These are mostly Fortune 500 firms representing most industrial sectors and many are among the largest emitters of greenhouse gases.

Thinking back to those original members of the council and why they joined, I have a deep respect for the way they took a stand on this issue and defied the prevailing sentiment in industry and business. I remember a conversation I had with a CEO of one of these very large companies and I asked him why he had agreed to join the Pew Center when it was clearly not going to win him friends amongst his contemporaries and he told me that it was time to think about his legacy, his children and his grandchildren. He believed the science of climate change and felt a responsibility to the next generation.

But these are business leaders and so they were thinking about something else too: they were thinking about the bottom line, and whether they had the ability in their own operations to reduce emissions. In other words, they didn’t buy the argument that responding to climate change in a serious way would somehow bankrupt our economy.

Is it a going to be a challenge? Of course. Protecting the climate will require a decades-long commitment to develop and deploy new, low-carbon technologies around the world. But the fact is that many technologies exist right now that will allow us to begin making substantial cuts in our emissions of greenhouse gases. And I want to talk briefly about some of the most promising technologies for reducing emissions in two key sectors of the economy: electricity and transportation.

Starting with electricity, this sector produces 38 percent of U.S. carbon dioxide emissions. Most of the electricity generated by the sector is used in buildings—homes, offices and industrial facilities. It powers everything from heating and cooling systems to computers, lighting and machinery. Reducing carbon dioxide emissions related to electricity use will require far-reaching changes in how we produce and consume energy. But “far-reaching” is not the same as “impossible.”

One of the members of the Pew Center’s Business Environmental Leadership Council is Alcoa. And, over the last 20 years, this company has reduced the electricity required to produce a ton of aluminum by 7.5 percent.

Another member, IBM, has instituted energy conservation measures that resulted in a savings of 12.8 billion kilowatt hours of electricity between 1990 and 2002. The resulting reduction in carbon dioxide emissions: 7.8 million tons. And the resulting savings to the company’s bottom line: $729 million in reduced energy costs.

And since 1990, customer energy efficiency programs at Pacific Gas and Electric Company (PG&E) have cumulatively saved more than 138 million megawatt hours of electricity. As a result, the company has avoided between 36 and 80 million tons of carbon dioxide emissions.

Do we have the capacity to reduce emissions? You bet we do and these companies are showing us how. They are also showing that they can do it in ways that do not compromise economic growth.

Now, all of these examples I have talked about are on the demand side of the electricity sector. They are all focused on reducing consumption at the level of the electricity consumer. What about the supply side? Do we have the capacity and the technologies to do something there as well? And, once again, the answer is a resounding yes.

Right now, we have the ability to produce electric power and heat much more efficiently using both fossil fuels and renewable energy. We can build power plants that use a process called Integrated Gasification and Combined Cycle (IGCC). IGCC delivers efficiency gains along with reductions in air pollution by converting coal into a cleaner-burning gas. But right now, there are only two true IGCC plants in operation in the United States.

We can also build combined heat-and-power (or cogeneration) plants. Rather than wasting excess heat generated in the course of producing electricity, these cogeneration plants capture it for use in heating homes and industrial sites. The ABB Group of Companies have built approximately 1,500 small cogeneration plants in Europe. These plants produce both electricity and steam to heat nearby buildings, reducing greenhouse gas emissions by 60 percent compared to coal-fired power plants. In the United States, however, cogeneration is nowhere near reaching its potential for delivering significant reductions in emissions.

And then there are renewable sources of energy. Large-scale renewable energy can be cost-competitive with other forms of conventional electricity in some cases. But renewables such as wind power, solar power and biomass still count for only a tiny share of overall electricity generation in the United States. The reason: today’s marketplace (and today’s public policy environment) favor traditional energy sources.

And then there are the technologies that show great potential in reducing emissions from power generation, but that require additional work. One example is underground storage (or sequestration) of carbon. In the IGCC power plants I mentioned, carbon can very easily be captured for long-term storage in underground geological formations. This is an enormously promising option for protecting the climate. In a nation that currently meets more that half of its electricity needs with coal, you would think we would be all over this, trying to figure out how to make sequestration work. But our efforts in this arena pale in comparison to the need. The Federal government is investing in one massive demonstration that will not be completed until 2018. What we need are multiple, smaller demonstrations that yield results more rapidly and that will affect investment decisions in the coal burning power plants that are being planned for construction over the next decade. All 130 of them.

Cars and trucks are responsible for 32 percent of U.S. carbon dioxide emissions – but again significant reductions in these emissions can be achieved through the use of “off-the-shelf” or already existing technologies. One recent study found that commercial (and cost-effective) technologies exist right now to increase fuel economy and/or reduce tailpipe greenhouse gas emissions by as much as 25 percent. Over the longer term, technologies like plug-in hybrid engines, biofuels made from agricultural products and hydrogen fuel cells promise even larger reductions.

This is not pie-in-the-sky stuff. We simply need to do our homework to develop and refine and test the full range of technologies—and, if they work, then provide the support they need to move from the laboratory to the marketplace.

Opponents of strong action to address climate change often focus on the economic costs of dealing with the issue. Yet if we look closely at the analyses they use to support their claims, we can see that the models are full of assumptions that defy reality, that the policies modeled are far more draconian than contemplated by any policymakers, and that the costs of not acting are not included. The bottom line is that, yes, significant investments are needed. And a technological revolution, which is what we need, will not be free. But addressing this issue in a reasonable and concerted way will not bankrupt our economy. Not addressing it just might.

U.S. insurance company AIG has warned of—and I quote—“far-reaching negative impacts on economies and societies worldwide” from climate change. According to the global insurance giant, Allianz, climate change already is increasing the potential for property damage at a rate of between 2 and 4 percent every year.

And it is not just about the benefits that will come with avoiding costs. Think for a moment about the economic opportunities tied to developing and deploying these new and emerging technologies I’ve talked about. GE has committed to doubling its investment in environmental technologies to $1.5 billion by 2010. That is the equivalent of starting a new Fortune 250 company focused exclusively on clean technology. This is what I call a win-win. GE sees the potential for real profits – green is green -- and I see the potential for real progress on the climate front.

If we do it right, protecting the climate could mean new industries, new markets and new jobs, as well as a new future for localities and states that successfully position themselves as centers of innovation and technology development for a low-carbon world. In many cases, however, the benefits and the opportunities tied to climate action simply are not a part of the conversation – and the result is added support for the myth that we can’t afford to do anything about this issue.

But the truth is that we can’t afford not to do this. We know what technologies will get us started on a path to reduced emissions, and we also know that there are promising technologies out there that can deliver substantial, long-term reductions as part of a global energy technology revolution.

Are There Policies That Can Help?

This brings us to the third question: do policy solutions exist that will prove effective without causing more harm than good. And the answer, again, is yes.

A revolution such as this simply will not happen without a push and a pull from government. And the fact is, we know what kind of policies will work to reduce emissions across the economy. Again, there is no question about this. And we also know what kind of policies won’t work. For example, while the White House and its allies continue to say that our current, voluntary climate policies are enough, U.S. emissions keep on rising. Last year, the Department of Energy reported a 2-percent jump in greenhouse gas emissions between 2003 and 2004. Since 1990, our emissions have increased by more than 16 percent.

Voluntary policies are not going to get the job done. Mandatory policies are clearly what we need. And so in 2005, the U.S. Senate passed a bipartisan measure calling for a national, mandatory, market-based program to slow, stop and, ultimately, reverse the growth in U.S. greenhouse gas emissions. Although the measure was nonbinding, it marked the first time the Senate has gone on record to support mandatory action on this issue.

Among the key climate policy solutions we know about is “cap-and-trade.” This is a policy that requires emissions reductions while allowing companies to trade emission credits so they can achieve their reductions as cost-effectively as possible. The most important benefit of this approach: it establishes a value for emissions reductions, as well as an economic advantage for the technologies that can achieve them.

The cap-and-trade model already has proven successful in this country in reducing emissions of the pollutants that cause acid rain. We know it can work. Cap-and-trade, in fact, is the cornerstone of climate legislation introduced by Senators John McCain and Joseph Lieberman, and others, in both the Senate and the House have also introduced cap and trade legislation. In the state of California, where Governor Schwarzenegger

recently signed the most ambitious state program to address climate change, there is authorization to move forward with a cap and trade program. Many of the businesses we work with at the Pew Center support the cap-and-trade approach because it is effective—and because it will grant them the flexibility they need to achieve the necessary reductions at the lowest possible cost.

Here in New York, your governor is supporting a cap-and-trade initiative together with seven other Northeastern and Mid-Atlantic states. It is called the Regional Greenhouse Gas Initiative (or “RGGI”). This innovative pact among the states is aimed at reducing carbon dioxide emissions from power plants in the region. It’s the first cap-and-trade program to control these emissions in the United States—and it reflects a sophisticated understanding among these governors that mandatory, market-based policies are essential. It also reflects an acknowledgment that, when it comes to government action on climate change, the more parties that work together, the greater the efficiencies and the lower the costs. This is why the ultimate goal has to be a national cap-and-trade system that covers the entire U.S. economy.

But cap-and-trade is not the only policy solution to climate change. We need a wider range of policies. Governments also need to invest in research to develop some of the most critical, long-term, climate-friendly technologies. And policies are needed to ensure that those technologies that reduce emissions can gain a solid foothold in the marketplace.

Many of these policies are sector specific. I already talked about the transportation sector and its emissions. And it’s worth noting here that many governments around the world have adopted more stringent policies than the United States to reduce tailpipe greenhouse gas emissions and/or increase the fuel economy of cars and trucks. Even China has higher standards than we do. So, of course, it is clearly possible. Despite the automobile companies’ resistance, technologies exist to reduce emissions from this sector. And by adopting tougher but reasonable standards, we can hasten the rollout of cost-effective, commercially available technology to reduce vehicle emissions.

Typically, the state of California has been a national leader on this issue. Lawmakers in that state have taken steps to begin regulating carbon dioxide emissions from cars and trucks. It is a policy that 10 other states are poised to follow if it survives a legal challenge from the automakers. California’s standard for vehicles could reduce annual greenhouse gas emissions in the state by 30 million tons of carbon dioxide by 2020. And the reductions will build from there as other states follow California’s lead. And, once again, the work of California, like the work of New York and its partners here in the East, will build momentum for national action to reduce emissions from cars and trucks.

So that’s an important policy solution in the transportation sector. In the electricity sector, a policy that shows real promise for reducing emissions is something called the “renewable portfolio standard” (or RPS). As of today, 22 states, including such large emitters as Texas and California, now require that electric utilities generate a specified amount of electricity from renewable sources. These states see an RPS not only as a way to protect the climate but also as a way to support new energy industries and new jobs. The state of Texas, for example, estimates that the amount of renewable energy that has entered the system because of the state’s RPS exceeds the amount of renewable energy produced in the state over the past 100 years. By reducing fossil fuel generation, the Texas program should cut carbon dioxide emissions by 3.3 million tons. And this is a policy that was signed into law by none other than former Governor George W. Bush.

The work that states like Texas and California are doing on the climate issue could produce enough material for an entire lecture—and I encourage you to visit the Pew Center’s website so you can see our database of state activities and related reports. My point today is that these states know what types of policies will be needed to reduce our nation’s emissions—and a growing number of our lawmakers in Washington know it too. It is going to take mandatory, market-based policies, as well as policies that support research, development and deployment of new low-carbon energy technologies.

And it is also going to take international policies. This, too, is not in question. Climate change is a global problem requiring global action. Even if we were to get smarter about reducing the United States’ contribution to climate change, global energy use will continue to surge, carbon dioxide emissions will continue to grow, and climate change will remain a significant threat. We cannot protect the climate without a global framework that enlists all countries to do their part to reduce emissions, and that provides poorer countries with the support they need to do so. Because climate change is truly an issue that knows no bounds.

The Kyoto Protocol has been the focus of a lot of attention and a lot of discussion (and a lot of controversy) over the past several years. Kyoto, of course, is the international agreement that commits participating countries to specific targets for reducing their emissions. However, Kyoto’s targets take us only to 2012, and without commitments from the United States, Australia, China and other major emitters, it’s not nearly enough. What’s needed looking forward is a new global framework for action, one that engages all the major emitting countries and that provides them with the flexibility they need to reduce emissions in ways that make the most sense for them.

The Pew Center recently held a series of discussions with a range of policy makers, companies and NGOs from 15 countries to consider the elements of a global framework that looks beyond 2012. The participants laid out a number of clear priorities. For example, they strongly endorsed market-based approaches as a core element of the international effort, but they said we shouldn’t necessarily limit ourselves to Kyoto-style targets setting binding absolute caps on emissions. Most importantly, they understood that not every nation is the same; not every nation has the same emissions profile; not every nation has the same capability; and not every nation is in the same state of development. So we have to be flexible and we have to recognize that developing countries, who are still trying to supply their populations with basic services, including electricity, may have to make their contribution to solving this problem in a different way.

From this effort, and from the work we are continuing to do that will further flesh out this framework, it is clear that there are policies at the global level that can lay the groundwork for effective action. But the global discussion on future frameworks is only beginning – and the United States is not even at the table.

The Search for the Answer

So if I could briefly recap: The scientific integrity of climate change is solid – the earth is warming. This warming will likely manifest itself in ways that are detrimental to life as we know it. And human actions are largely to blame for the warming.

We have the capacity to solve this problem. Many of the technologies to combat global warming already exist. And importantly, we know that there are policies we can put in place that will unleash the kind of technological revolution we are going to need.

So now, after searching through some of the answers we arrive at the State of the Question. And it is this:

Given everything we know, why are we doing so little to address climate change?

And I believe the answer to this question leads us directly into the provinces of values and ethics, because it forces us to confront a still more fundamental question: what is our responsibility to others? What is our responsibility to our children and our grandchildren, and to their children and grandchildren? Do we leave them a world that is better or worse than the one we inherited? Of course most people, when asked, would insist that we should leave a world that is better than the world that we inherited. But if we do not grapple with this problem, if we do not adjust our behavior in an intelligent, measured way—we will neither protect our environment nor sustain a growing global economy. And the world we leave will be in far worse condition that the one we were born into.

The first thing we have to understand is that it is not we but future generations who will likely bear the brunt of the effects of climate change. And the brunt will be borne not by the wealthy but by the poor.

Consider for a moment some of the expected impacts of a changing climate: more flooding and more droughts; a scarcity of fresh water resources; extended heat waves; more powerful storms and other extreme weather events; rising sea levels; damage to fragile ecosystems; diminished agricultural yields; and threats to human health as communicable diseases now known mainly in the tropics will worsen and spread to temperate climates.

Consider only the issue of sea level rise. By the end of the century, if nothing is done to rein in emissions of greenhouse gases, global sea level may be three feet higher than it is today, bringing unforgiving impacts to low-lying coastal communities throughout the world.

And we know that these impacts will be borne disproportionately by those least able to cope. So why are we paralyzed?

An estimated 97 percent of all natural disaster-related deaths happen in developing countries. These countries need help doing two things: they need help with planning so that disasters do not inflict such an enormous toll on their societies; and they need help with investments in safe drinking water supplies, better sanitation, sustainable farming, safer housing, anything that can help their residents make it through these disasters and resume their lives, and livelihoods, without having to start all over.

In addition to a responsibility to future generations, we also have a responsibility to the poor, both today and tomorrow. In developed and developing nations, poor people do not have the resources to respond and adapt to climate change in the same way in which the rest of us can respond and adapt.

Think about what we saw last year in the aftermath of Hurricane Katrina. We saw an American city, New Orleans, completely devastated, and we saw the city’s poorest residents suffering the most. I cannot categorically say that Katrina was caused by global warming, although scientists have observed that hurricanes are becoming more intense, and will continue to do so as ocean temperatures rise. What I can say, however, is that Katrina was a bitter taste of things to come. None other than the CEO of Wal-Mart, Lee Scott, has referred to climate change as “Katrina in slow motion.”

The disproportionate impact of Katrina on poor people should serve as a reminder to us all: people with resources can move and rebuild and start new lives in the event of hurricanes and other weather disasters brought about by climate change. Poor people, on the other hand, often have nowhere else to go, nowhere else to turn, no resources to make the kinds of changes in their lives that will protect them from this global problem.

What strikes you most when you look at the data on the impacts of climate change is that the most vulnerable countries are in the developing world. Africa, for example, is extremely susceptible to the impacts of climate change; in fact, the continent and its people already are showing signs of having trouble adapting to a warmer world.

Africa, of course, is not alone. Other parts of the developing world face similar threats. In Bangladesh, a one-meter rise in sea level would inundate 17 percent of the country. Even in areas that might be spared from flooding, the availability of freshwater will be threatened as saltwater intrudes into estuaries and groundwater.

Agriculture in developing countries will take a special hit. Wheat, for example, will virtually disappear as a crop in Africa; there will be substantial declines in Asia and South America as well. At a time when we are looking anew at debt forgiveness and other strategies for reducing disparities between rich and poor countries, it is essential that we consider the role of climate change in making those disparities even more pronounced.

And what of the developing countries whose very existence is threatened by climate change? I am talking here about small island states such as Tuvalu. This is a nine-island chain in the central Pacific that is home to 11,000 residents. On average, these islands are just one meter above sea level. As sea levels rise, these people will have to leave their homeland, becoming the world’s first climate refugees – but certainly not the last.

Now, if all of these countries I’ve talked about had in some way been largely responsible for climate change, that might be another matter. Maybe we would look at the issue a little differently, for example, if Africa had produced the lion’s share of the world’s greenhouse gas emissions over time and now was being asked to suffer the consequences.

But Africa produces just 2 to 3 percent of worldwide emissions of greenhouse gases. The United States, by contrast, with just 5 percent of the global population, is responsible for more than 20 percent of worldwide emissions. And there is also the issue of cumulative emissions. The fact is that climate change is a problem that has been decades in the making as carbon dioxide and other gases have accumulated in the atmosphere over time. These gases have a long life and can remain in the atmosphere for decades or even centuries. And, in the span of the last century or so, it was the United States and other already developed countries that were producing the lion’s share of these emissions.

Looking only at carbon dioxide, the United States was responsible for more than 30 percent of global emissions between 1850 and 2000. The comparable figure for China: just 7 or 8 percent. Even considering the high rates of projected growth in China’s and India’s emissions, the cumulative contributions of developed and developing countries to climate change will not reach parity until sometime between 2030 and 2065.

Clearly all of the major emitting countries need to be a part of the solution to climate change. But saying that all of today’s big emitters should be equally responsible for reducing their emissions is like going to a restaurant and having a nice dinner and then running into a friend who joins you for coffee. And, when the check comes, you make your friend who only had the coffee split the cost of the entire dinner. Yes, developing countries need to do their part, but there is no denying that the developed world, including the United States, has a moral and ethical responsibility to act first.

We also have a responsibility to help developing nations adapt to a warming world. No matter what we do, some amount of global warming already is built into the climate system. There will be impacts; there already are impacts. And it is people living in poverty in the developing world who will face the most serious consequences.

So it really comes down, again, to a question of responsibility. What is our responsibility? And it is not just our responsibility to our fellow man (or woman). There is also our responsibility to the natural world, to the earth. Beyond human societies, the natural world also will suffer from the effects of climate change. In fact, we are already seeing changes in the natural world due to climate change. Coral reefs are at risk because of warmer and more acidic ocean waters. Polar bears are threatened by declines in sea ice. Species already are disappearing because of new diseases connected to climate change. In short, climate change holds the potential of inflicting severe damage on the ecosystems that support all life on earth.

So why, then, have we failed to take responsibility? Why has there been such an absence of political will?

As I consider the politics of climate change, I am drawn to two answers.

First, this is a problem that demands solutions and sacrifice now, even though its most serious consequences will be felt in the future. Our democratic political institutions are based on time horizons that correspond to political terms of two, four or six years. But climate change is a problem that, although we are beginning to see impacts now, reserves its most severe consequences for future decades and centuries.

For a member of Congress or a President to ask today’s voters to sacrifice in some way when the benefits are not immediately apparent (and, frankly, hard to conceive) is asking a lot. This doesn’t mean we shouldn’t ask, but we need to understand the nature of our democratic political system. Any time a politician even suggests that there is a possibility that we should perhaps consider raising the gasoline tax, he or she is virtually guaranteed to be slammed by opponents in the next election. The pretext of the attack is that this politician is threatening our way of life.

It is now vs. the future. Today vs. tomorrow. And, more often than not, today is going to win. Our present generation enjoys the benefits of doing next to nothing to address climate change in the form of low energy costs, convenience and ample creature comforts. Even hinting that we may have to sacrifice some of those benefits for some elusive future gain does not win elections. Tomorrow does not win elections; today does.

The second answer revolves around money. In the same way that the voters of today benefit from the current system, so too do the influential interests that support today’s political campaigns and that have a strong lobbying presence in Washington and many state capitals. There is no National Association of Tomorrow’s People in Washington, but there are countless trade groups whose sole purpose is to make sure that our lawmakers’ decisions protect the ability of today’s industries and businesses to maximize current profits. Yes, many businesses have come around to recognizing the need for action to protect the climate, seeing it as assuring profits in the future. But the balance remains tilted in favor of the status quo. Today’s interests support political campaigns. Tomorrow’s interests do not.

And, in the same way that our national democratic systems are not well equipped to deal with a problem such as climate change, our international system is even more poorly equipped. We simply do not have mechanisms in place for mobilizing (and enforcing) international action on an issue such as this. And, given the potential for varying climate impacts in varying places around the world, some nations may erroneously think they will be better off as climate change continues, at least in relation to others. And, as a result, there are these varying levels of incentives, and varying levels of alarm, about the problem. And the result is an inability to reach consensus about a global approach.

And, it is because of the inadequacy of our political institutions (both domestic and international) to deal with an issue such as this that those with a vested interest in the status quo can prevail. All they have to do is raise questions about the science, the technology or the policies—and our institutions, which already are enormously challenged by this problem, simply back off.

James Freeman Clarke once said. “A politician thinks of the next election; a statesman thinks of the next generation.” Ladies and gentlemen – I believe it is time for statesmanship.

And while I am happy to discuss the shortcomings of many in leadership positions in this country – I don’t believe they bear the whole of the burden for their actions (or lack thereof). The public – you and I -- bear some of the responsibility. We have not clearly told our elected officials that we believe this is a vital issue – for today and tomorrow; that we are willing to change our energy habits and to make sacrifices if necessary. We have not made our voices heard.

And we must find a voice for those who do not have one – future generations, and people without means. For far too long, climate change has ranked near the bottom tier of environmental issues – but climate change at its core is not an environmental issue, it is a moral and ethical issue. I believe we will only see progress on this issue if and when our leaders finally see it that way.

While conducting some research to prepare for today, I reread the statement on climate change on the Catholic Bishop’s website and there was one part – attributed to Pope John Paul that I found beautiful in its’ simplicity – It says:

At its core, global climate change is not about economic theory or political platforms, nor about partisan advantage or interest group pressures. It is about the future of God's creation and the one human family. It is about protecting both "the human environment" and the natural environment.1 It is about our human stewardship of God's creation and our responsibility to those who come after us.

Ralph Waldo Emerson once said, “When we have arrived at the question, the answer is already near.”

So what is the question? I believe it is this: Why are we shirking our responsibility to address climate change? And Emerson was right: the answer is near. Because in arriving at this question, we are acknowledging that we should be doing more, much more, to protect our climate. We know what we need to do, and we know we can do it. We simply need to muster the courage and the political will to put the status quo behind us and shape a safer, better future for our planet and the generations to come.

Now, I will welcome your questions. Thank you very much.

Agriculture's Role in Greenhouse Gas Mitigation

Agricultures Role in Greenhouse Gas Mitigation

Agriculture's Role in Greenhouse Gas Mitigation

Prepared for the Pew Center on Global Climate Change
September 2006

By:
Keith Paustian, Colorado State University
John M. Antle, Montana State University
John Sheehan, National Renewable Energy Laboratory
Eldor A. Paul, Colorado State University

Press Release

Download Entire Report (pdf)

Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

This Pew Center report is the fourth in our series examining key sectors, technologies, and policy options to construct the “10-50 Solution” to climate change. The idea is that we need to tackle climate change over the next fifty years, one decade at a time. This report is also a companion paper to Agriculture and Forest Lands: U.S. Carbon Policy Strategies, being published simultaneously.

Our reports on electricity, buildings, and transportation described the options available now and in the future for reducing greenhouse gas emissions from those sectors. Agriculture may be less important than those other sectors in terms of its overall contribution to U.S. greenhouse gas emissions, but it has an important role to play within a strategy to address climate change. Agriculture is important not only because of the potential to reduce its own emissions, but because of its potential to reduce net emissions from other sectors. Agriculture can take carbon dioxide, the major greenhouse gas, out of the atmosphere and store it as carbon in plants and soils. Agriculture can also produce energy from biomass that can displace fossil fuels, the major contributor to greenhouse gas emissions.

Looking at options available now and in the future, this report yields the following insights for agriculture’s potential role in greenhouse gas mitigation:

• If farmers widely adopt the best management techniques to store carbon, and undertake cost-effective reductions in nitrous oxide and methane, aggregate U.S. greenhouse gas emissions could be reduced by 5 to 14 percent.

• With technological advances, biofuels could displace a significant fraction of fossil fuels and thereby reduce current U.S. GHG emissions by 9 to 24 percent. Using biomass to produce transportation fuels could also significantly reduce our reliance on imported petroleum.

• Further research is needed to bring down the costs of biofuels and, particularly if agriculture is to participate in a GHG cap-and-trade system, to better assess the impacts of practice changes.

• The level of reductions achieved will strongly depend on the policies adopted. Policies are needed to make it profitable for farmers to adopt climate-friendly practices, and to support needed research.

The authors and Pew Center would like to thank John Bennett, Henry Janzen, Marie Walsh, John Martin, and David Zilberman for their review of and advice on a previous draft of this report.

Executive Summary

The impact of human activities on the atmosphere and the accompanying risks of long-term global climate change are by now familiar topics to many people. Although most of the increase in greenhouse gas (GHG) concentrations is due to carbon dioxide (CO2) emissions from fossil fuels, globally about one-third of the total human-induced warming effect due to GHGs comes from agriculture and land-use change. U.S. agricultural emissions account for approximately 8 percent of total U.S. GHG emissions when weighted by their relative contribution to global warming. The agricultural sector has the potential not only to reduce these emissions but also to significantly reduce net U.S. GHG emissions from other sectors. The sector’s contribution to achieving GHG reduction goals will depend on economics as well as available technology and the biological and physical capacity of soils to sequester carbon. The level of reductions achieved will, consequently, strongly depend on the policies adopted. In particular, policies are needed to provide incentives that make it profitable for farmers to adopt GHG-mitigation practices and to support needed research.

The agricultural sector can reduce its own emissions, offset emissions from other sectors by removing CO2 from the atmosphere (via photosynthesis) and storing the carbon in soils, and reduce emissions in other sectors by displacing fossil fuels with biofuels. Through adoption of agricultural best management practices, U.S. farmers can reduce emissions of nitrous oxide from agricultural soils, methane from livestock production and manure, and CO2 from on-farm energy use. Improved management practices can also increase the uptake and storage of carbon in plants and soil. Every tonne of carbon added to, and stored in, plants or soils removes 3.6 tonnes of CO2 from the atmosphere. Furthermore, biomass from the agricultural sector can be used to produce biofuels, which can substitute for a portion of the fossil fuels currently used for energy.

Carbon stocks in agricultural soils are currently increasing by 12 million metric tonnes (MMT) of carbon annually. If farmers widely adopt the best management techniques now available, an estimated 70 to 220 MMT of carbon could be stored in U.S. agricultural soils annually. Together with attainable nitrous oxide and methane reductions, these mitigation options represent 5 to 14 percent of total U.S. GHG emissions. The relevant management technologies and practices can be deployed quickly and at costs that are low relative to many other GHG-reduction options. To achieve maximum results, however, policies must be put in place to promote, and make attractive to farmers, practices that increase soil carbon and efficiently use fertilizers, pesticides, irrigation, and animal feeds. It is also important to ensure funding to improve the measurement and assessment methods for agricultural GHG emissions and reductions, including expansion of the U.S. Department of Agriculture’s National Resource Inventory. In particular, this inventory needs to include a network of permanent sites where key management activities and soil attributes are monitored over time. Such sites would provide information vital to helping farmers select the most promising management practices in specific locations.

Profitability of management practices varies widely by region, as does the amount of carbon storage attainable. Initial national-level studies suggest that, with moderate incentives (up to $50/tonne of carbon, or $13 per tonne of CO2), up to 70 MMT of carbon per year might be stored on agricultural lands and up to 270 MMT of carbon per year might be stored through converting agricultural land to forests. Mitigation options based on storage of carbon in soils would predominate in the Midwest and Great Plains regions; whereas in the Southeast, agricultural land would tend to be converted to forestland. Information on the costs and supply of GHG reductions from reducing nitrous oxide and methane emissions are very limited, and more studies in these areas are needed.

Agriculture can also reduce GHG emissions by providing biofuels—fuels derived from biomass sources such as corn, soybeans, crop residues, trees, and grasses. Substitution of biofuels for fossil fuels has the potential to reduce U.S. GHG emissions significantly and to provide a major portion of transportation fuels. The contribution of biofuels to GHG reductions will be highly dependent on policies, fossil fuel prices, the specific fossil fuels replaced, the technologies used to convert biomass into energy, and per acre yields of energy crops. In a “best-case” scenario, where energy crops are produced on 15 percent of current U.S. agricultural land at four-times current yields, bioenergy could supply a total of 20 exajoules (EJ)—almost one-fifth of the total U.S. year-2004 demand for energy. This corresponds to a 14 to 24 percent reduction of year-2004 U.S. GHG emissions, depending on how the biomass is used. If advanced conversion technologies are not widely deployed, or if yield gains are more modest, GHG reductions would be on the order of 9 to 20 percent. For biofuels to reach their full potential in reducing GHG emissions, long-term, greatly enhanced support for fundamental research is needed.

Application of best management practices in agriculture and use of biofuels for GHG mitigation can have substantial ­co-benefits. Increasing the organic matter content of soils (which accompanies soil carbon storage) improves soil quality and fertility, increases water retention, and reduces erosion. More efficient use of nitrogen can reduce nutrient runoff and improve water quality in both surface and ground waters. Similarly, improving manure management to reduce methane and nitrous oxide emissions is beneficial to water and air quality and reduces odors. Biofuel use, particularly substituting energy crops for imported petroleum for transportation, has important energy security benefits. However, as biofuel use expands, it will be important to ensure that biomass is produced responsibly, taking both environmental and socio-economic impacts into consideration.

Although challenges remain, agriculture has much to offer in helping to reduce net GHG emissions to the atmosphere, while at the same time improving the environment and the sustainability of the agricultural sector. Further research and development will result in improved assessments of GHG contributions from agriculture, increases in agriculture’s contribution to renewable energy for the nation, better ways to manage lands, and design of more efficient policies. Government policy plays an important role in making best management practices and biofuel production economically attractive, and farmers will adopt best management practices for GHG reduction only if they seem profitable. Perceived risks and availability of information and capital play important roles in perceptions of profitability. Thus, risk reduction, availability of information, and access to capital are some of the key issues that must be addressed through policies. With the right policy framework, U.S. farmers will be important partners in efforts to reduce GHG emissions while reaping multiple co-benefits.

Conclusions

Farmers’ decisions about whether to adopt new management practices and whether to grow energy crops will ultimately determine the level of success of any agricultural sector GHG mitigation strategy. Farmers’ decisions are motivated first and foremost by what they perceive to be most profitable. Thus, mitigation practices must be economically attractive to farmers. If farmers can be persuaded to adopt desired practices, the impacts on GHG emissions could be significant. It is technically feasible that 70 to 220 million metric tons (MMT) of carbon could be added to U.S. agricultural soils annually over two to three decades. This would remove 260 to 810 MMT of carbon dioxide (CO2) from the atmosphere annually, offsetting 4 to 11 percent of current U.S. GHG emissions. Economic potential to store carbon varies substantially by region, and current studies suggest that at prices of $50 per tonne of carbon ($13 per tonne CO2), soil carbon increases would be limited to 70 MMT per year. If an aggressive research and development (R&D) program succeeds in substantially improving per-acre yields of energy crops and reducing costs of conversion technologies, biomass from agricultural sources could supply up to 19 percent of total current U.S. energy consumption. This would yield GHG savings on the order of 180 to 470 MMT of carbon, which is equivalent to reducing CO2 emissions by 670 to 1,710 MMT CO2 per year (by substituting for fossil fuels) or 9 to 24 percent of total U.S. year-2004 GHG emissions.

Overall, studies so far indicate that agriculture is likely to be a competitive supplier of emission reductions if and when farmers are offered suitable payments. Among agricultural mitigation options, soil carbon sequestration will likely be most significant for lower carbon prices (less than $50 per tonne of carbon or $13 per tonne CO2). At higher prices, afforestation and biofuel options become increasingly more competitive.

Agricultural activities have a broad and multi-faceted impact on all three of the main GHGs—carbon dioxide, methane, and nitrous oxide—and policies designed to mitigate GHGs must consider impacts on all three GHGs. Globally, land use (including agriculture) accounts for about one-third of all GHG emissions due to human activities. In the United States the proportional contribution is smaller, about 8 percent of net U.S. GHG emissions. A variety of agricultural sources contribute to these emissions, including fossil fuel consumption in agricultural production; oxidation of soil organic matter and attendant CO2 releases; nitrous oxide emissions from nitrogen fertilizer, manure, and plant residues; and methane emissions from ruminant animals, animal wastes, and flooded rice.

However, agriculture as a sector is unique in that it can function as a sink for both CO2 and methane, helping to reduce their concentrations in the atmosphere. In addition, agricultural production of biofuels can provide a substitute for some of the fossil fuel currently used for energy. Thus, agricultural mitigation of GHGs includes utilization of agriculture’s sink capacity, reduction of agricultural emissions, and bioenergy production. Utilization of agriculture’s sink capacity is primarily accomplished through increasing soil carbon stocks. Soil carbon increases, which are typically in the 0.1 to 1 tonnes per hectare per year range, could be achieved through adoption of practices such as:

• Reducing the frequency and intensity of soil tillage;
• Including more hay crops in annual rotations;
• Production of high-residue-yielding crops and reduced fallow periods;
• Improved pasture and rangeland management; and
• Conservation set-asides and restoration of degraded lands.

Although soil emissions of nitrous oxide constitute the largest GHG emissions from U.S. agriculture in terms of global warming potential, both measuring emissions and achieving large reductions will be challenging. On average, nitrous oxide emissions are roughly proportional to the amount of nitrogen added to soils, through nitrogen fertilizer, manure, and nitrogen-fixing legume crops. Since nitrogen fertilizer use is an important component of modern, high-yield agriculture, more efficient use of nitrogen inputs is the key to reduction of nitrous oxide emissions through:

• Use of soil testing to determine fertilizer requirements;
• Better timing and placement of fertilizer; and
• Use of nitrification inhibitors and controlled-release fertilizer.

Agricultural methane emissions in the United States occur largely from livestock production through enteric fermentation and during manure storage. Methane capture and use to produce energy is an almost ideal way to address emissions from manure, as it reduces methane emissions, reduces GHG emissions from fossil fuels by providing a substitute energy source, and also provides air and water quality benefits. Strategies to address emissions from enteric fermentation include: improving animal health and genetics, feed additives, and more productive grazing systems.

Storing carbon in soils, reducing nitrous oxide and methane emissions, and producing energy from animal wastes all are potential sources of income or cost reductions for farmers. Relatively few studies of the economic feasibility of agricultural soil carbon sequestration have been done to date, and studies of the economics of nitrous oxide and methane reductions are even more limited. Initial conclusions from studies of the profitability of practices that sequester carbon include:

• Geographic differences in the technical potential and cost of carbon sequestration are substantial;

• Cost considerations are likely to limit agricultural mitigation to levels well below those suggested by technical potential; and

• Strategies based on contracts that pay per tonne of carbon stored or that take into account geographic variation in environmental and economic conditions are more economically efficient (less costly) than contracts based on average conditions.

In addition to profitability strictly defined, several other factors are likely to affect farmers’ willingness to participate in mitigation programs:

• Risk, particularly given the likelihood of long-term contracts for carbon sequestration and the high likelihood of changes in economic and technological conditions that can result in unforeseen costs;

• Financial constraints and access to credit when adopting new practices;

• Uncertainty about the long-term effects on crop productivity of adopting carbon sequestering practices;

• Program implementation costs, including contract and transaction costs; and

• Sociological factors, such as age and education level of farmers, farm size, and access to information.

Production of biomass energy could provide a significant opportunity for agriculture to contribute to GHG mitigation. The overall impact of agricultural biomass on GHG mitigation depends on (1) how much energy can be produced from biomass, and (2) the net (life cycle) GHG impact of biomass use for energy. Biomass is particularly well-suited to providing liquid fuel substitutes for petroleum. However, further development of advanced technologies for conversion of biomass into transportation fuels is needed to make biomass more cost-competitive with petroleum.

Current U.S. agricultural bioenegy products for transportation fuels include ethanol made from corn grain, and biodiesel. Although the efficiency of grain-based ethanol production has improved over time, fossil energy use in its production is still high (three units of fossil energy required to produce four units of ethanol energy), limiting its value as a GHG offset. Moreover, there is likely to be an upper limit on the amount of corn-grain ethanol that can be produced economically, currently estimated at 10 billion gallons per year, less than one percent of current energy demand. Biodiesel, made from oil seed crops (e.g., soybean, sunflower) is more energy efficient—about 1 unit of fossil energy to produce 3 units of biodiesel energy, but biodiesel from oil seed crops is currently 50 to 90 percent more expensive than conventional diesel.

Responsible use of agricultural residues such as corn stover or wheat straw for biofuel production could supply 2 to 6 percent of current total U.S. energy demand or 7 to 24 percent of total U.S. petroleum energy demand in the on-road transportation sector. Addressing sustainability issues (soil conservation) is important in determining the amount of residues that could be utilized. Production of energy crops such as switchgrass at current yield rates could displace perhaps an additional 3 percent of current energy supply while utilizing about 10 percent of the total U.S. agricultural area. Improvements in grass genetics could potentially boost this amount to 6 to 12 percent of current energy supply, using up to 15 percent of prime cropland. Potential bioenergy supply from corn, animal manure, CRP lands, agricultural residues, and energy crops grown on prime agricultural land could represent almost one-fifth of total year-2004 U.S. energy demand and more than 80 percent of current U.S. petroleum energy demand in the on-road transportation sector.

Designing and implementing effective agricultural mitigation strategies depends on cost-effective and reliable methods to estimate GHG fluxes and carbon stock changes. Collecting information on management activities such as tillage practices, fertilizer use, and grazing practices at some or all of the NRI locations would improve GHG inventories and assessments. Establishment of a national soil-monitoring network along with additional long-term experiments that include measurements of nitrous oxide and methane fluxes are also needed to improve GHG estimation methods and reduce uncertainty.

A single “magic bullet” solution to the problem of reducing GHG emissions from fossil energy is unlikely, and biomass can play a useful role within a diverse portfolio of GHG reduction strategies. Practices that sequester carbon can maintain and increase soil organic matter, thereby improving soil quality and fertility, increasing water-holding capacity, and reducing erosion. More efficient use of nitrogen and other farm inputs is key to reducing GHG emissions and nutrient runoff, as well as to improving water quality in both surface and ground waters. Using digesters to capture methane from animal wastes can improve air quality and reduce undesirable odors. Consequently, policies should consider not only the GHG benefits but also associated co-benefits to arrive at the most effective solutions in a comprehensive framework. Further R&D is needed to improve the assessment of agriculture’s GHG contributions, to find better ways to manage lands to improve environmental quality, to design efficient policies to implement mitigation options, and to strengthen agriculture’s potential to contribute to producing renewable energy. Although challenges remain, agriculture has much to offer in helping to reduce GHGs in the atmosphere while at the same time improving the environment and the sustainability of agricultural resources.

About the Authors

Keith Paustian
Professor
Colorado State University

Keith Paustian is a Professor in the Department of Soil and Crop Sciences and a Senior Research Scientist at the Natural Resources Ecology Laboratory (NREL) at Colorado State University.  He also serves on the Scientific Steering Committee for the US Carbon Cycle Science Program.  Professor Paustian co-chaired the Council on Agricultural Science and Technology (CAST) taskforce on agriculture, climate change, and greenhouse gases; and served as Coordinating Lead Author for the Intergovernmental Panel on Climate Change’s (IPCC) volume on greenhouse gas inventory methods for agriculture, forestry and other land use.

Professor Paustian’s work includes assessment of greenhouse gas emissions and carbon sequestration for the annual US inventory, and development of accounting tools for farmers and ranchers to get credit under the US 1605B voluntary GHG reduction program.  He and his colleagues have developed models for estimating GHG inventories in developing countries, models now being applied in 11 countries in Latin America, Africa and Asia.  Professor Paustian’s areas of research include assessment of agricultural mitigation strategies, evaluation of environmental impacts of agricultural bioenergy production, soil organic matter dynamics, and agroecosystem ecology.  Professor Paustian has written more than 100 journal articles and book chapters. He is currently working to develop effective mitigation strategies and better methods to measure and predict greenhouse gas (GHG) emissions from agriculture.

John M. Antle
Professor
Montana State University

John M. Antle is a professor in the Department of Agricultural Economics and Economics at Montana State University. He holds a B.A. in economics and mathematics from Albion College, and a Ph.D. in economics from the University of Chicago.  Prior to joining Montana State, he served as assistant and associate professor at the University of California, Davis; and as Gilbert White Fellow at Resources for the Future; senior staff economist for the President's Council of Economic Advisers; and member of the National Resource Council's Board on Agriculture.   He was President of the American Agricultural Economics Association from 1999-2000.  His current research focuses on the sustainability of agricultural systems, greenhouse gas mitigation and impacts of climate change in agriculture, and payments for ecosystem services in agriculture.

John Sheehan
Senior Engineer
National Renewable Energy Laboratory

John Sheehan holds a B.S. and an M.S. degree in chemical and biochemical engineering from the University of Pennsylvania and Lehigh University, respectively.   He has served as an analyst and project manager at the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) since 1991.  During his tenure at NREL, Sheehan has led research on the production and use of biodiesel and ethanol.  In the past six years, Sheehan has authored groundbreaking life cycle assessments of biodiesel and ethanol technology, including a comprehensive life cycle evaluation of soybean-based biodiesel.  His most recent study is an evaluation of the sustainability of use of agricultural residues as a feedstock for fuel ethanol production. 

From 2002 to 2005, Mr. Sheehan led strategic planning activities for the Department of Energy’s Biomass Program.  In October 2005, he joined the newly formed Strategic Energy Analysis Center at NREL, where he supports the Office of Planning, Budget and Analysis within DOE’s Office of Energy Efficiency and Renewable Energy.

Eldor A. Paul
Professor
Colorado State University

Eldor Paul is currently a Senior Research Scholar at the Natural Recourses Ecology Laboratory and Professor of Soil and Crop Sciences Colorado State University.   Previously he held academic positions in Canada, and at the University of California, Berkeley, and Michigan State University.

Professor Paul has written over 260 articles and books, and his research interests include the ecology of soil biota, the role of nutrients such as nitrogen in plant growth, and the dynamics of carbon and nitrogen in sustainable agriculture and global change. His studies on the sequestration of carbon and nitrogen under afforestation and the sensitivity of different soil organic matter fractions to increased temperatures have led to a better understanding of the role of soils in climate change.

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Press Release: The Expanding Role of State Renewable Energy Policy

Press Release
June 14, 2006

Contact: Katie Mandes, 703-516-4146

THE EXPANDING ROLE OF STATE RENEWABLE ENERGY POLICY

Proliferation of State Activity Has National Significance

Washington, DC - A growing portion of U.S. states' electricity is being provided by renewable energy, according to a report released today by the Pew Center on Global Climate Change. States are using increasingly aggressive and ambitious Renewable Portfolio Standards (RPS) in order to spur economic development and create a reliable and diversified supply of electricity, as well as to reduce greenhouse gas emissions and conventional pollutants. As of mid 2006, 22 states and the District of Columbia have implemented an RPS; well over half of the American public now lives in a state in which an RPS is in operation.

The Pew Center report, Race to the Top: The Expanding Role of U.S. State Renewable Portfolio Standards, authored by Barry Rabe of the University of Michigan, builds on earlier Pew Center analyses of the state role in climate policy development. The proliferation of RPSs at the state level provides real-world models of whether a federal RPS may be a feasible option to increase the nation's use of renewable energy sources as part of a larger energy and climate change policy.

"If we are to successfully address climate change, we must increase our use of renewable energy. States are leading on renewables, as they are in so many aspects of climate policy," said Pew Center President Eileen Claussen, "Engagement between states and federal policymakers on this issue has been surprisingly limited, and is long overdue. We need to begin thinking both about how the federal government can be most effective in this arena, and also how to enhance interstate collaboration."

In addition to examining challenges and opportunities inherent in policy design and implementation, the report includes case studies of five states - Texas, Pennsylvania, Colorado, Massachusetts, and Nevada. The author explores the political and economic advantages and pitfalls in each state, and finds an unusually high degree of bipartisan support and rapid expansion of RPSs at the state level. Economic development and job creation also emerge as drivers in virtually every state.

Despite the many advantages of state-level RPS policies, the report finds that states also face challenges. States increasingly are grappling with electricity transmission capacity constraints, differential treatment of various renewable sources as well as facility siting concerns. The biggest challenge in the future will likely revolve around the need for interstate collaboration and dialogue as the questions of cooperation across state boundaries arise. Ultimately, federal and state regulators will need to work together in the event of adoption of a federal RPS.

States are already beginning to cooperate regionally and that pattern is likely to continue, but there is much the federal government could do to enable a significant expansion of renewable energy. The Pew Center's recent Agenda for Climate Action recommends that renewables be a key element of a climate-friendly energy path for the U.S. It describes the areas in which federal efforts are needed, including R&D funding and technology development, and notes that there are many ways in which the federal government can support and encourage ongoing state renewables initiatives. These may involve incentives for uniform grid interconnection standards at the state level, or the creation of a uniform system for tracking renewable energy credits across the country. In designing federal policies, Congress should recognize the regional differences in renewable resources and existing state-level policy actions.

"Although there is no single technological or policy solution to climate change and energy independence in the U.S., renewable energy is clearly destined to play an important role in the years to come - and now is the time to lay the foundation," said Eileen Claussen.

A complete copy of this report - and previous Pew Center reports - is available on the Pew Center's web site, www.c2es.org.


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The Pew Center was established in May 1998 by The Pew Charitable Trusts, one of the United States' largest philanthropies and an influential voice in efforts to improve the quality of the environment. The Pew Center is an independent, nonprofit, and non-partisan 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.

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