Energy & Technology
TECHNOLOGY, PUBLIC POLICY AND COAL: MAKING THE CONNECTION
SPEECH BY EILEEN CLAUSSEN
PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE
COAL21 ANNUAL CONFERENCE
APRIL 5, 2005
Thank you very much. I appreciate the opportunity to be here for your first Annual Conference. It is always a pleasure to come to Australia from the United States. For this trip, I decided to bone up a bit on Australian phrases. And I was interested to learn that someone who has “gone bush” in Australia is actually traveling in the outback.
In America, of course, someone who has “gone Bush” is someone who supports the President. And then there are all the others who merely want Bush gone.
Seriously, I am delighted to be here and to learn more about COAL21. As I looked through the program for the next two days, it occurred to me that we have a long way to go in terms of educating people about some of the things you will be talking about. There is IGCC, CCS, ultra-clean coal, oxy-fuel and more. To get an idea of the degree to which these issues have penetrated the mainstream consciousness, I decided turn to that all-important resource: Google. And so I typed in CCS, confident that I would immediately be referred to information about carbon capture and storage.
But, lo and behold, I was directed before anything else to a firm called Custom Computer Services in Brookfield, Wisconsin. Other listings on the opening pages of my CCS search were for the Canadian Cardiovascular Society, the Congress of California Seniors, the Community College of Spokane and, of course, the Captain Cook Society, which should be of great interest here in Australia. The Australian branch of the society, by the way, will be holding its annual meeting later this month right here in Sydney, in case you are interested.
In any case, I clicked through several pages of results and failed to find even one mention of carbon capture and storage. And when I typed in IGCC, I had to scroll through listings for the Insulating Glass Certification Council and the Indo-German Chamber of Commerce before I got to anything about coal.
The point of all this is that it appears we have some work to do in order to bring the technologies we are talking about into the mainstream of society. And that is what I want to talk about today: what we need to do so that we can get these technologies developed as quickly as possible, and begin to significantly reduce greenhouse gas emissions from coal generation.
But first I want to say how impressed I am to learn more about COAL21 and to see such a serious and sincere commitment to climate solutions on the part of industry. And I applaud the partnerships you have forged with government and the research community.
We may not have an initiative quite like COAL21 in the United States, but we do have industry leaders like you, who are acknowledging that climate change is a problem and who are committed to addressing it.
To date, 38 companies have joined the Pew Center’s Business Environmental Leadership Council. These companies include some of the most well-recognized brand names across the globe. They represent most industrial sectors and the largest emitters of greenhouse gases, including coal-burning utilities, mining companies, aluminum producers, automobile manufacturers, pulp and paper manufacturers, chemical companies, oil and gas businesses, and the cement industry. In joining the Council, these companies are united with the Pew Center in several beliefs, including this one – and I quote:
“We accept the views of most scientists that enough is known about the science and environmental impacts of climate change for us to take actions to address its consequences.”
It is a very simple statement – and it is a statement that all of you, through your participation in COAL21, could surely sign onto as well. But, of course, I didn’t come all this way simply to give you a pat on the back and say “G’day.” What I want to do this morning is challenge you to think even bigger and more broadly about coal’s future.
I want to start by laying out what I believe are two predictions for the future in which I have great confidence. The first is that we will soon be living in a carbon-constrained world. And the second is that coal will continue as a primary source of energy throughout the globe. How we reconcile these two predictions is, I believe, the crucial question facing this industry in the months and years ahead.
So let me talk briefly about prediction number one: the inevitability of carbon constraints. The scientific consensus on this issue seems to me to be quite clear. The earth is warming, this warming will accelerate in the years ahead, and it is largely the result of human activities. Yet another point of consensus – it is actually an indisputable fact – is that there is a great deal of inertia in the climate system. The greenhouse gases we have already placed in the atmosphere will continue to warm the planet for many decades, if not centuries with important consequences for sea-level rise, water availability, ecosystems and human health.
Right now, there is about 40 percent more carbon dioxide in the atmosphere than there was at the dawn of the Industrial Revolution. In fact, we haven’t experienced this level of carbon dioxide emissions for over 400,000 years.
In order to stabilize atmospheric CO2 concentrations at double their pre-industrial level (or 550 ppm)– a scenario that many scientific studies use to project the consequences of global warming but one that involves some adverse effects from climate change – the TOTAL amount of CO2 emissions we can release is roughly 1200 Gigatons (Gt).
Now think about this: Since the beginning of the industrial revolution – when the burning of fossil fuels began adding CO2 to the atmosphere -- we have consumed one-quarter of this budget.
At current growth projections, and I believe these are quite conservative, we will have consumed another quarter of the budget in a fraction of that time – in only another 25 years, or by 2030. So you can see where this is going – it took us over 100 years to use the first quarter – only 25 for the next – and in the absence of change from our current path, we reach – and surpass concentrations of 550 ppm (a doubling of pre-industrial levels) well before the end of this century, leading to greater impacts, such as the loss of coral reefs and barrier islands.
We have to get serious. I recognize that cost is the biggest driver in business decision making. But we also have to think about the environment when we make decisions, particularly for substantial capital investments that will last a long time. Because if we make the wrong decisions, we will not only be sacrificing the environment, but we will also end up by stranding significant amounts of capital.
So it is critical that we wake up and pay attention both to what the science is telling us and to where the economics of bad decision-making will lead. If we start now, I am convinced we can do this in an intelligent, measured way – a way that promotes investment in new technologies and allows time for capitol stock to turn over, so that we both protect our environment and sustain a growing global economy.
And the fact is, people already are waking up. The growing scientific consensus on this issue has prompted people and governments around the world to stand up and take notice, and to embrace the need for change. One sign of how far this issue has progressed came at this year’s World Economic Forum in Davos, Switzerland. When asked to identify key issues facing the world today, participants in the forum (50 percent of whom came from industry) listed climate change as one of the top three – ahead of terrorism and weapons of mass destruction. Here is a brief quote from the official review of the meeting:
“Increasingly, global businesses recognize that we are at a tipping point on climate change. There is growing recognition that mitigation decisions must be taken now.”
And right here in Australia a poll conducted by the Lowy Institute found that the two international issues that most concern your citizens are nuclear weapon development and global climate change.
70 percent of Australians polled expressed concern about global warming, while only 63 percent expressed concern about international terrorism and 44 percent spoke of illegal immigration and refugees.
But people are not just acknowledging this problem; they are also doing something about it. Kyoto, as all of you know, is now in force, meaning that more than 140 countries, including most of the world’s industrial powers, are implementing or considering steps to meet their treaty commitments and reduce their emissions.
We are also beginning to have serious discussions about what happens after 2012, when Kyoto’s current commitment period is over. And, as the world embarks on the next phase in all of this, what has happened until today will be a walk in the park. Because, whatever form it takes, the next international agreement is going to include much more action from many more countries, as we enter a seriously carbon constrained world.
Kyoto, of course, is not the only case of governments responding to this issue. We also have seen the launch in the EU of the broadest emissions trading system ever established. And, in Great Britain, the government has developed an energy blueprint for the next 50 years that makes climate change a key driver of that country’s energy policy, along with price and security of supply. Prime Minister Tony Blair, who is serving as president of the G-8 nations this year, has made climate change a priority for that group.
And it is not just national governments that are taking action. In the United States, 28 state governments have adopted climate action plans, and 15 have programs or policies in place to reduce, sequester or register greenhouse gases. Governors from 10 northeastern states are working on a strategy to reduce carbon dioxide emissions from power plants through a regional cap-and-trade initiative. And, 19 states have adopted renewable energy mandates that will result in real reductions in emissions.
Here in Australia, there is also a great deal of activity going on, at all levels of government. So the ball is rolling for real action on this issue at the international, the national and the subnational levels. And it is gaining speed. The trend is undeniable. Carbon constraints are on the way – indeed, in many instances they are already here.
“One day we will live in a carbon-constrained world.” That is a direct quote from Jim Rodgers, the CEO of Cinergy Corp. in the United States. And he is not the only U.S. electricity or energy executive saying this. John Rowe of Exelon has said in no uncertain terms that – quote – “there should be mandatory carbon constraints.” And here’s a quote from Wayne Brunetti of Xcel Energy: “Give us a date, tell us how much we need to cut, give us the flexibility to meet the goals, and we’ll get it done.” End quote.
I hope I have made a compelling case to you that carbon constraints are on the way – and industry needs to be prepared. So then we can move on to the second prediction, that the world will continue to rely on coal. I do not need to tell you about the vital role that coal plays, and will continue to play, in meeting the world’s energy needs. But I do want to offer a few statistics to put it in perspective.
In the United States today, coal provides 51 percent of all electricity, more than double the amount of any other fuel source and five times more than gas, oil, or hydroelectric power. Here in Australia, of course, coal is even more dominant in the energy mix, providing 85 percent of the nation’s electricity. And then there are the developing countries like China and India. China alone now accounts for 31 percent of worldwide coal consumption, and the developing world is going to be bringing huge amounts of new coal burning capacity online in the years ahead.
The bottom line: Coal is the most abundant energy source today, it is dispersed throughout the world, and it is available at a relatively low cost. There is no way that the world can continue to quench its growing thirst for energy without it.
So those are the facts: carbon constraints are coming, as they should be, and coal is here for the long haul. Now the question is how do we reconcile these future scenarios? How can the future include both carbon constraints and coal?
In the United States today, coal is responsible for 33 percent of carbon dioxide emissions. The comparable figure for Australia is 58 percent. Worldwide, the proportion of CO2 emissions from coal is 26 percent. As we say in America, something’s got to give.
To the extent that the coal industry fails to take seriously its obligation to substantially reduce emissions, then the controls imposed from outside are likely to be both more severe and less business-friendly. This is why the COAL21 National Action Plan is so important.
By laying out a pathway for developing new technologies to reduce coal-related emissions, you are planting your flag on the side of solutions. But the most important point I want to leave you with today is that a technology strategy alone is not enough. It is absolutely essential. But we also need broader climate policies that will draw the new technologies into the marketplace– policies that reflect the urgency of this issue and the need for real reductions in emissions.
Technology and policy. We need to do both. And we can do both. So let me go back to the 2005 World Economic Forum meeting at Davos, where there are two thoughts that are particularly relevant. First, “There is no single “magic bullet” or technology to address climate change. A diverse portfolio of low and zero carbon technologies will be required.” And second, “But it is essential that business be guided by clear price signals and a predictable regulatory path.” I’d like to spend a little time now talking about ways to move forward on each of these priorities.
First, technology. You are the experts on the technologies that can reduce greenhouse gas emissions from coal. And the agenda for this conference reflects that. Over the next two days, you will be talking about CO2 capture and storage, IGCC, oxy-fuel combustion, lignite dewatering and drying, ultra-clean coal and more. The potential for combining IGCC with carbon capture and storage is, of course, where a lot of the attention is right now – and for obvious reasons: whatever we do, we have to do it as efficiently as possible. But each of the technologies on your agenda holds great promise. And we need them now.
Worldwide, in developing and developed nations, the International Energy Agency anticipates that about 250 gigawatts of new coal capacity will be built in this decade. We will build almost double that (480 gigawatts) between 2011 and 2020. We have already missed our chance to influence the choice of technology for most of the capacity that will come online before 2010. But the longer we wait, the more likely it is that we will fail in the next decade as well. We simply cannot afford to do this.
So where are we today in developing the technologies we need? Well, let’s look at IGCC as an example. Right now, there are only two real IGCC plants in operation in the United States, but neither is operating fully on coal. Of 106 proposed new coal plants for the U.S., nine are IGCC. There is also the Bush administration’s $1 billion FutureGEN project, which you will hear about later. But no specific plans have yet been announced. So, in reality, we haven’t figured out if this is even viable yet.
With carbon capture and the other technologies, it is the same story. Lots of great ideas, some demonstrations here and there, but we are nowhere near where we need to be. And governments and industry are going to have to work together to jump-start these technologies and get them to a point where they can actually make a difference.
The COAL21 National Action Plan is absolutely correct in saying that international collaboration in this work is essential. We need to reduce duplication of effort—and that means planning, funding and deploying trial projects with publicly shared results. Any R&D we do on these technologies should be focused squarely on the remaining technical hurdles to their deployment, with special attention to reducing the costs involved. There is enormous potential here – but, as all of you know, we have a lot of work to do before these technologies can even begin to make a real contribution to protecting the climate. And the clock is ticking.
But again, an R&D focus alone is not enough. We need to combine technology and policy. A recent Pew Center study looked at three future energy scenarios for the United States – one where oil and gas are abundant and relatively inexpensive; one where energy supply disruptions and terrorism concerns lead to more interest in both alternative energy and coal; and one where government and industry partner to get climate-friendly technologies to the marketplace.
Even in this last scenario, where technology triumphs and where we presumably would get a fairly good handle on technologies such as carbon storage and coal gasification, the study projected no net reduction in U.S. carbon emissions by 2030 without a broader climate policy. I want to repeat that for emphasis – even if we get these technologies to a point where they can be deployed in cost-effective ways, we still need broader policies to enable change. Industry needs to know that government is serious about this issue, that there are clear and certain goals driving our policies, and that all sectors will be held accountable for reducing their emissions.
What types of policies am I talking about? At the international level, we need an agreement that engages all major emitters of greenhouse gases, from both the developed and the developing world. It is the only fair way to do this. It is the only way to bring the United States – and Australia too – back into the process. And it is the only way to fully engage the major emitters in the developing world.
But I am not saying that all countries—or all companies—need to play by the same rules. Flexibility is key. Different countries are at different stages in their development, and they have different resources to invest in climate solutions. And different countries are endowed with different kinds and quantities of natural resources. So we need a framework where everyone is involved in ways that they and their competitors view as fair. “Fair and effective” should be our mantra as we move forward. “Fair” because we need broad engagement in this effort, and “effective” because we need to create pathways that get us to a low-carbon global economy. .
Moving from the international stage to policies at the national level, we need to look at an assortment of policies that can contribute to reduced emissions. One of these is cap-and-trade. As you know, this is a policy that sets targets for greenhouse gas emissions and allows companies the flexibility to trade emission credits in order to achieve their targets. This is the policy in New South Wales, and, as I already mentioned, a number of U.S. states are considering a cap-and-trade initiative as well.
The United States Senate for the first time voted on a national cap-and-trade measure last year. It attracted the support of 43 senators, and its sponsors have vowed to bring it up for consideration again. Cap-and-trade policies can be important because they encourage economy-wide reductions in emissions. And the work we have done shows this is the least expensive way to do it – reductions happen where it is cheap and where it makes the most economic sense.
However, cap-and-trade is far from the only policy option at the national level. And for some countries, it may not be the preferred approach. Government standards and codes, public infrastructure investments, public-private partnerships and government procurement all have a role to play in reducing emissions and forcing change. We also may need to think sector by sector, either on a national or a global basis. Are there specific sectors where a particular approach makes the most sense, and if there are, how should we go about getting new technologies and new processes into the market for that sector.
In the electricity sector specifically, we need policies and incentives that will result in companies building the best, most efficient plants they can; retiring old, inefficient plants as expeditiously as possible; and capturing and storing the carbon stream.
We also need national energy policies like the British example – policies that balance our desire for security, growth and affordability with the need to build a diverse portfolio of climate-friendly technologies.
Last but not least, we need to pay attention to adaptation. Because, even with an ambitious strategy to reduce emissions, we’re already committed to future changes in the global climate that will pose serious challenges to our natural ecosystems and resources, our economies, and human health. The recent report from the Arctic Climate Impact Assessment made it crystal clear: climate change is happening now. And the nations of the world need to be ready to adapt.
This morning, I have made 2 predictions: carbon constraints are coming; and coal will remain a crucial source of energy throughout the world. And I have talked about how we can reconcile these facts in two ways: first, by making a much more vigorous commitment to technologies that will reduce the environmental impact of coal generation; and, second, by advancing broader public policies to mobilize real action on the climate issue both in our domestic economies and worldwide.
I believe the only way to address this problem successfully is to unleash a global technological revolution. And the goal of governments, acting multilaterally and within their own borders, must be to adopt policies and strategies that spur this revolution on.
In Australia, in America and throughout the world, businesses continue to receive mixed signals from their governments about whether or not we are serious about addressing this challenge. It is time to erase all the doubts and the uncertainty. It is time to act boldly, government and industry together, to embrace the importance of both technology and public policy in protecting the climate we share.
Thank you very much.
The 10-50 Solution: Options for a Low-Carbon Future
Prepared by the Pew Center on Global Climate Change
Download "The 10-50 Solution: Options for a Low-Carbon Future" In Brief (pdf)
View In Brief Figures:
- Figure 1: The Effect on the U.S. Wind Industry of the Expiration of the Production Tax Credit
- Figure 2: The Effect of Consistent Policy Support for Wind in Germany
- Figure 3: " Decision Analysis" of Hydrogen Energy as a Carbon Dioxide Mitigation Strategy for Transportation
For Immediate Release: January 19, 2005
Contact: Katie Mandes
CLIMATE SOLUTIONS AND FORESTS
New report examines the economic and climate impacts of storing carbon in trees
Washington, DC — Cost-effective climate change policies should include storage of carbon dioxide (CO2) in U.S. forests, according to a new report from the Pew Center on Global Climate Change.
“Climate change is the major global environmental challenge of our time and in order to deal with it in the most cost-effective way, we need to consider the full range of solutions – and that includes carbon storage in forests,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “If we ignore the potential for forest-based sequestration, any projection of the costs and feasibility of addressing climate change is going to be overly pessimistic and wrong.”
Most analyses of the climate issue have tended to focus on the implications of reducing emissions of carbon dioxide and other greenhouse gases from key industrial and transportation sources. Less attention is paid to the potential for storing (or “sequestering”) carbon in forests and other ecosystems. Both emissions reduction and carbon sequestration are important strategies for addressing climate change.
The Pew Center report, The Cost of U.S. Forest-based Carbon Sequestration, investigates the potential for incorporating land-use changes into climate policy. Authored by economists Robert Stavins of Harvard University and Kenneth Richards of Indiana University, the Pew Center report looks at the true “opportunity costs” of using land for sequestration, in contrast with other productive uses. The report also examines the many factors that drive the economics of storing carbon in forests over long periods of time.
Among the authors’ key conclusions: The estimated cost of sequestering up to 500 million tons of carbon per year—an amount that would offset up to one-third of current annual U.S. carbon emissions—ranges from $30 to $90 per ton. On a per-ton basis, this is comparable to the cost estimated for other options for addressing climate change, including fuel switching and energy efficiency.
A sequestration program on the scale envisioned by the authors would involve large expanses of land and significant up-front investment. As a result, implementation would require careful attention to program design and a phased approach over a number of years. Nevertheless, the report offers new evidence that sequestration can and should play an important role in the United States’ response to climate change.
“This report shows that large-scale forest-based sequestration can be a cost-effective tool which should be considered seriously by policymakers,” said the Pew Center's Claussen.
The full text of this and other Pew Center reports is available at http://www.c2es.org.
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.
CLIMATE CHANGE: BEYOND A SIDEWAYS APPROACH
SPEECH BY EILEEN CLAUSSEN
PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE
DONALD BREN SCHOOL OF ENVIRONMENTAL SCIENCE
AND MANAGEMENT- UNIVERSITY OF CALIFORNIA, SANTA BARBARA
JANUARY 14, 2005
Thank you. I am delighted to be here – and I have to say it was awfully nice of the weather to clear up for my arrival.
Of course, I am not here to talk about the weather. I am here to talk about the climate. And the difference, as we all know, is that climate is what you expect. Weather is what you get. And California has certainly gotten more than it expected or deserved these last few weeks.
I am sure some of you saw the movie, The Day After Tomorrow, and it is hard not to think about it given the recent weather you’ve been having. This is the film that dramatized the effects of climate change by releasing tornadoes in downtown Los Angeles and flooding all of Manhattan. People called it left-wing propaganda, but I remember watching the movie and wondering why only Blue states were getting hit.
And then of course we have the new Michael Crichton book that you have probably heard about. The book, which is climbing the bestseller lists as we speak, tells a fictional tale of how climate change itself is a fiction created by overzealous environmentalists so that they can enact draconian regulations on big business.
The book is called “State of Fear,” and my only fear is that people will take seriously its absolutely wrongheaded portrayal of the problem of climate change.
I hope all of you will join me in reminding people that Mr. Crichton’s specialty is fiction – even if he does include all sorts of graphs and charts in the current book to make it seem like a scientific tract. This is the man who wrote such fantastical books as Jurassic Park, and it seems to me he has been hanging out with too many dinosaurs – people who are mired in the past and who simply cannot and will not accept the broad scientific consensus that we have a significant problem on our hands, and that there are practical and economically sound ways to tackle it.
The point is– whether we are talking about the movie or the book: They are both fiction.
In contrast to the book’s sensationalistic tone and style, your school’s emphasis on rigorous, interdisciplinary approaches to environmental problem-solving is something that is desperately needed in today’s world. With so many complex and urgent environmental issues on the agenda at the local, national and international levels, your work here is essential. And I applaud your interest in these issues and your commitment to solutions.
At the Pew Center on Global Climate Change, we are committed to solutions, too. And today, I would like to talk for a little bit about some of the potential solutions to the problem of climate change. More specifically, I want to talk about the nexus of technology and public policy – in other words, what policies do we need in order to unleash the global technological revolution that is necessary to protect the climate?
I understand there is a hit movie in theaters right now that was filmed in the wine country around here. The movie is called Sideways – and, unfortunately, this is a title that could just as easily apply to current U.S. policy on climate change. But in saying we are moving sideways, even that may be giving us too much credit. Perhaps Backwards would be more appropriate.
Clearly, we can do better. And today I want to talk about how. More specifically, I want to talk about a plan that the Pew Center is developing for U.S. action on the climate issue. We call it our Agenda – and it is something we have been working on in concert with business and government leaders and others to lay out a responsible and practical policy course for the United States for the years to come.
But, before I talk about that, I want to talk briefly about what is at stake here. And I want to paint a clearer picture of the problem we are trying to solve, the problem we must solve—that is, of course, global climate change.
Just last month, the World Meteorological Organization reported that 2004 was the fourth hottest year on record – and that the last four years were among the top five. Of even greater concern was the news we learned in November about the arctic region. This is the canary in the coal mine of climate change, the place where researchers have always said that the effects of this global problem will hit early and hard.
And in November, we learned just how hard. The report of the Arctic Climate Impact Assessment showed that the Arctic region is indeed undergoing dramatic and alarming changes. The reason: It’s warming much more rapidly than previously known, at nearly twice the rate of the rest of the globe.
And it’s important to remember that this isn’t a random, out-of-left-field report. It is the result of an unprecedented, four-year scientific study of the region conducted by an international team of 300 scientists. And its conclusions should be a wake-up call for all nations.
According to the report, at least half the summer sea ice in the Arctic is projected to melt by the end of this century, along with a significant portion of the Greenland Ice Sheet. The Arctic region is projected to warm by an additional 7 to 13 degrees Fahrenheit by 2100. These changes will have major global impacts, contributing to sea-level rise and even intensifying global warming as the disappearance of Arctic ice masses means that more incoming solar radiation will be absorbed at the Earth’s surface instead of being reflected back.
This is scary stuff. And, the fact is, we don’t have to travel to the Arctic to see that climate change is already being observed, even if the impacts in that region may be more pronounced and are occurring at a faster rate. Also in November, the Pew Center released a report showing some of the closer-to-home effects of climate change – effects right here in the United States. Right now.
For example, we are seeing a long-term trend toward an earlier spring, with earlier flowering and reproduction of plant and bird species. Butterflies here on the U.S. west coast are moving north and to higher altitudes in search of tolerable climate conditions, with some populations disappearing altogether from the southern end of their ranges. And this is only the beginning. In addition to their potential to lead to future declines in the diversity of U.S. wildlife, these ecological changes are indicators that global warming is already upon us and that adverse effects to other systems, and ultimately our economy, are just around the corner.
With warming for the next century projected to be two to ten times greater than the last, we’re heading toward a fundamental and potentially irreversible disruption of our ecology and natural systems, both in this country and around the world.
So what can we do? Well, at this point, we have to accept that some climate change already is built into the system – indeed, it is already happening, as I have said. But we do have the power to limit the scope and severity of climate change. And what we need to do is stabilize greenhouse gases in our atmosphere at a level that will keep this problem from becoming a global crisis.
According to the Intergovernmental Panel on Climate Change, stabilization means shooting for the magic number of 550 parts per million – that would be roughly double the pre-industrial level of atmospheric greenhouse gases.
But to get to that level, we need to reduce global CO2 emissions by 55 to 85 percent below what is currently projected under a “business-as-usual” scenario. Fifty-five to 85 percent. Making this challenge even more daunting, energy demand around the world is growing at a breakneck pace. We need to act now to come up with ways to keep global economies growing while curbing the growth in greenhouse gas emissions around the world. And make no mistake: The United States, which is responsible for one-fourth of global emissions, needs to take the lead.
Over the past year, as I have said, the Pew Center has been working to develop a comprehensive plan for U.S. action on this issue. This Agenda is our attempt to develop and articulate a responsible course for addressing climate change.
It is built on six years of Pew Center analysis and experience with leading businesses, and through dialogue with international leaders and experts. And what we recommend in the Agenda is that the U.S. develop an Integrated National Climate Change Strategy. That means a strategy that combines technology development with wide-ranging policies on issues from mitigation and science to adaptation.
This last point, about adaptation, is a crucial part of what we have to do, because even if we push forward with an ambitious strategy to reduce greenhouse gas emissions, we’re already locked in to future changes in the global climate. There is no way around it. And these future changes will pose many challenges to ecosystems and natural resources, as well as human health and national economies. We need to plan now for these changes so that our society and others are able to adapt.
But adapting, of course, is not enough. We also need to take serious action to limit the extent of climate change by reducing our emissions. More than anything else, that will require a global technology revolution – and we need policies to make that revolution happen.
While it’s true that technology normally advances over time on its own, it does not always advance in the right direction. Also, we plainly do not have time to wait. The challenge before us requires a much more deliberate, enunciated effort to develop policies that will help push and pull climate-friendly technologies to the market. We need a guiding vision on the order of putting a person on the moon or developing a cure for cancer. And we need to look at the full range of policy approaches that will get us where we need to be – from market incentives and public-private partnerships to a range of R&D efforts focusing on everything from basic research to deployment.
Perhaps the best way to look at the technology and policy challenge we face is on a sector-by-sector basis. From manufacturing and electricity to buildings, agriculture, forestry and transportation, all sectors of the economy have important parts to play in reducing greenhouse gas emissions. Let me talk briefly about just two: transportation and electricity.
The transportation sector is responsible for more than a third of our greenhouse gas emissions, and a quarter of U.S. energy consumption. To reduce these emissions, the Pew Center's Agenda identifies a range of specific policies-all aimed at speeding the development and deployment of new technologies. And what we need to do is focus on both short-term technologies such as hybrid gas-electric vehicles, as well as longer-term technologies such as hydrogen.
Looking first at the short term, we can do a lot more on the issue of hybrids. This is, in fact, a classic case of how smart policy can make a difference. Yes, hybrid vehicles are selling. But, despite their popularity, there is no way they will represent more than a small fraction of U.S. vehicle sales without government stepping in and creating a bigger market. What can government do? Well, we can do a lot more to step up consumer incentives for buying these low greenhouse gas emitting vehicles - and it is not just hybrids I am talking about but clean-diesel vehicles as well.
We can also remove incentives in the law for purchasing inefficient vehicles such as SUVs - it is frankly hard to believe these incentives exist, given the energy and climate challenges we face. And, last but not least, government can and should take steps to boost public-sector procurement of climate-friendly vehicles. The goal is to create and expand the market - and government can help do that with its own purchases.
Among the longer-term transportation technologies we need to be looking at are hydrogen, biofuels, and all-electric cars and trucks. But every one of these technologies faces substantial barriers that the private sector is unlikely to be able to resolve on its own. We need to ramp up funding for research, design and deployment. Just as important, we need demonstration programs. Everybody talks about a hydrogen economy, but you need a hydrogen infrastructure to make it work. And the government needs to work with industry to come up with demonstrations that will show what's feasible and practical - and how to do it right. For example, it is absolutely essential that we find environmentally friendly ways of producing hydrogen - because if we merely use fossil fuels to do it, the climate problem does not improve; it actually gets worse.
I have talked a lot about cars, but we need to look at other forms of transportation, too. Air, rail, marine transportation, road freight - all of these are a part of the problem, and all of them must be a part of the solution. In the Pew Center Agenda, we talk about the need for government to work with the International Civil Aviation Organization to adopt policies aimed at boosting the fuel efficiency of aircraft. The bottom line is that there are countless ways to reduce emissions from this vital and growing sector. Our challenge is to adopt policies that will ensure that those reductions happen sooner rather than later - when the damage may already be done.
People in California know what needs to happen. Your state is on the verge of establishing tough but achievable standards for greenhouse gas emissions from cars. You would be the first state to do this – and, if it happens, you’ll be charting a productive path forward for the rest of the country. Because the fact is we need national standards like those proposed for California. And, in the Pew Center Agenda, we recommend converting the United States' current fuel economy standards to a set of tradable standards based on greenhouse gas emissions. If you are looking to protect the climate, focusing on emissions is the way to go.
Another sector where we can and must achieve significant progress is electricity, which is responsible for almost 40 percent of U.S. emissions. And here I want to start by talking about coal. In 2003, coal provided 51 percent of U.S. electricity. Worldwide, it is the most abundant and widely distributed fossil fuel. Given current rates of production and use, we have 200 years of reserve supply. Whether you like it or not, coal is going to remain a major part of the energy mix for decades to come.
And so our challenge is twofold: we need to come up with better, cleaner ways to burn coal; and we also need to do everything in our power to figure out how to capture and store the carbon that is produced when we do burn it. There are technologies being developed that hold promise on both of these counts. But, once again, these technologies will go nowhere fast if we don’t light a fire under them, so to speak, with government R&D and other policies. We need tests to find out the practicality of geologic storage of carbon. We need demonstrations so we can understand the ins and outs of CO2 injection underground. We also need to build demonstration plants so we can learn more about coal gasification, which holds the promise of allowing us to burn coal with dramatically reduced carbon emissions.
All of these are smart and necessary investments – not just for climate reasons but also because they can place the United States in a leadership position around the world so we can then export these technologies to other countries with significant coal resources, such as India and China.
So that’s the story with coal. But what about other energy technologies? What about combined heat and power? This is when you capture and use the waste heat generated along with electricity. Want to know the overall efficiency of the U.S. electricity system – what we put in vs. what we get out? It’s 30 to 33 percent of input energy; that level has remained constant since the 1970s. This is inexcusable when you consider that combined heat and power systems can boost efficiency to upwards of 80 percent. Right now, these systems account for just 8 percent of U.S. energy supply, compared to 40 percent in Europe. What policy steps can we take to promote combined heat and power? Well, we can start by regulating utilities based on total energy output. A lot of these are just common-sense solutions.
Another promising energy technology is distributed generation, or DG. This is when you generate electricity close to the point of use. With distributed generation, you can reduce CO2 emissions in a number of ways. In fact, a major benefit of this technology is that you avoid so-called transmission and distribution losses; when electricity is moved over long distances, 7 to 8 percent of it is lost along the way. With distributed generation, you can also use waste heat for combined heat and power in ways that you cannot in a large, centralized power station. So it can be more efficient in that way too. But we need policies to make distributed generation more feasible -- for example, by allowing people to sell excess power back to the grid at a fair price.
Now, what about renewables? If you are talking about climate-friendly sources of energy, you have to talk about renewables – wind, solar, hydropower, geothermal and more. In the past, these technologies have cost significantly more than fossil fuels for the same energy output. But over time we have adopted policies at the national, state and local levels that promote renewables – tax breaks, consumer incentives, portfolio standards that require utilities to generate a set share of their power from these sources. California’s aggressive deployment policies in the 1980s helped bring the cost of wind power down to where it is today – close to the cost of fossil fuel generation in some markets. Yet, the lack of policy leadership in the U.S. meant that we lost our leadership position in the wind field to Europe.
So it is policy that has made these technologies more competitive, but policy needs to do more. We need to do things like extending the wind production tax credit, creating renewable portfolio standards at the state, regional and/or national level, and investing more in research and development. Given the energy security challenges we face in this country, not to mention the climate challenges, developing and deploying renewables should be at the top of our national agenda.
Burning coal in clean ways. Safely storing carbon. Investing in combined heat and power and distributed generation. And making renewables an integral part of our national energy mix. These are critical energy challenges for the future – and they are not the only ones. At the Pew Center, we have always been careful to remain “technologically neutral” – we will throw out the welcome mat for any and all technologies that can be part of the climate solution. And, in our Agenda, we address the need for policies to encourage the development and deployment of everything from advanced nuclear power to new energy-efficiency technologies. This problem is too big for any one solution.
We need to look at an array of technologies, and at an array of policies as well. We need strong R&D policies, government standards and codes, public infrastructure investments, public education programs, public-private partnerships and more. And we also need to look at broader, technology-neutral policies as well – policies that can encourage action across all sectors of the economy. Here I am talking specifically about the policy known as “cap and trade.”
Cap-and-trade is the approach taken in the Climate Stewardship Act introduced last year by Senators Joseph Lieberman and John McCain. Their bill attracted the support of 43 U.S. senators and prompted the first serious debate in Congress about exactly what we need to be doing to respond to the problem of climate change.
The reason cap-and-trade works is that it enables companies to reduce emissions as cheaply as possible. We all know the example of how trading has worked to achieve cost-effective reductions in emissions of the pollutants that cause acid rain. In fact, it was because of the United States’ successful use of trading to reduce sulfur emissions that our country insisted that trading be a central element of the Kyoto Protocol. And now, inspired by Kyoto, the European Union is on the verge of launching the broadest emissions trading system ever established.
What’s more, right here in the United States, nine Northeastern governors, led by New York Governor George Pataki, are developing a multi-state regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants. This effort is proceeding well, and we expect them to complete their work by this spring, with agreement on a model rule.
Now, it will probably be some time before we establish a national, economy-wide cap-and-trade system in the United States—the political support for it is not there. But what might be possible is a series of interlinked trading systems – the east coast with Europe and perhaps with Canada and the west coast as well. Such a “bottom-up” system could be robust enough both to achieve some environmental benefit and to keep costs down. And it would be a valuable learning experience for both sides on this issue, hopefully one that would show that taking action to protect the climate is both practical and affordable.
Of course, cap-and-trade is not the only broad policy that we need to think about. We also need a climate-conscious energy policy for the United States. In Great Britain, the government has developed an energy blueprint for the next 50 years that makes climate change a key driver of that country’s energy policy, along with price and security of supply. The United States would be wise to follow suit.
I have tried in these remarks to talk about what we need to do here at home in order to approach the climate issue in a serious way. We need a robust, climate-friendly energy policy. Incentives and requirements for clean technologies. A cap-and-trade program to reduce emissions at the lowest cost. But it is important to remember that we need to engage on this issue at the international level too. Climate change is a global problem. Even if we were to get dead serious about reducing our emissions tomorrow, we won’t get where we need to be unless all countries become a part of the solution.
In December, as many of you know, delegates from the United States joined representatives of other nations at a climate meeting in Buenos Aires. The ostensible purpose of the meeting was to tie up any loose ends that remained before the Kyoto Protocol goes into force in February. The Protocol, of course, is the international agreement that commits all of its signatory countries to specific targets for reducing their greenhouse gas emissions before 2012. The Buenos Aires meeting also, it was assumed, would begin to lay the groundwork for the next steps in the international climate effort – in other words, what happens after 2012?
The only problem with the latter assumption is that the United States, which is not even a party to the Protocol, was opposed to any discussion of the future. In a truly Orwellian quote, the lead U.S. negotiator at the meeting was heard to say, “We need to absorb and analyze lessons learned before committing to new actions.” End quote. New actions? I didn’t know that we had committed to any old actions. And it is hard to learn any lessons when you’re doing next to nothing.
We might as well have had Michael Crichton as the head of our negotiating team. At least he would have made it more interesting.
In any case, the events in Buenos Aires underscore how far the U.S. has strayed since 1992, when President George H.W. Bush signed the United Nations Framework Convention on Climate Change. This is the treaty where the nations of the world acknowledged that climate change was a problem and pledged to act – voluntarily, I might add – to reduce their emissions. Even during the Clinton administration, despite signing the Kyoto Protocol, we clearly were not willing to own up to our global responsibility on this issue.
Climate change requires that we act at both the international and the national levels, and my goal today has been to give you some ideas and examples of the kinds of things we need to do. Now, at this point I could wrap up by remarks by comparing what we need to do with what is actually happening. And, I would start by talking about the relatively low level of investment in this issue on the part of the federal government. I would then have to mention the Administration’s goal of growing our emissions. And I would come back again to our reluctance to enter the debate on how we might move forward on this issue globally. But I don’t want to leave you depressed, particularly given the fact that you have had such frightening weather these last few weeks.
Instead, I will leave you with a look on the bright side of this issue. Because, despite everything else, we have seen a few signs of progress in the past year. One of these, of course, is the fact that the Kyoto Protocol is ready to enter into force in February – no matter what you want to say about it, this is an historic achievement. And, in a related development that I already mentioned, we have seen the launch of the EU trading system for carbon dioxide – it is another historic achievement and, hopefully, the first of many such trading systems around the world.
Next, I want to pay tribute to British Prime Minister Tony Blair, who has spent a good part of the past year touting climate change as one of two key issues he intends to work on as president of both the EU and G-8 group of industrialized nations.
Yet another thing to celebrate is the work of many U.S. states to get a handle on this issue, even despite the lack of action in Washington. I mentioned the work of the Northeastern governors on cap-and-trade. And I also talked about what’s happening here in California with regard to motor vehicle emissions. And there are many more stories from the states about people stepping up to their responsibility to act. U.S. states are a large source of greenhouse gas emissions – California’s exceed those of Brazil. And, while national policies are essential, we also need the states to do their part.
Last but not least, I want to celebrate what is happening in many corners of the business community to address this problem. Many of the companies we work with at the Pew Center are adopting voluntary targets for reducing their greenhouse gas emissions. And, not only that, they are taking action to meet their targets by investing in new technologies, increasing efficiency, and developing energy-saving products, clean fuels, biomass energy, and more.
In closing, let me say that the forecast for the future needn’t be gloomy. A lot is happening to address the climate change problem. But we need to do a lot more. And I encourage all of you to do what’s needed to make sure your state remains a leader in addressing this issue in the years ahead. We need to show that solutions are within our grasp, that smart, forward-thinking policies can drive the development and deployment of new, low-carbon technologies, and that progress is possible.
Climate change is the most important global environmental challenge we will face in the years ahead. Don’t let anyone tell you it’s fiction. You know better. And it is going to be people like you who come up with the solutions we need.
Thank you very much.
Comparison of Passenger Vehicle Fuel Economy and GHG Emission Standards Around the World
Prepared for the Pew Center on Global Climate Change
Feng An, Energy and Transportation Technologies LLC
Amanda Sauer, World Resources Institute
Download Entire Report (pdf)
POLICY FORUM: CLIMATE POLICY
An Effective Approach to Climate Change
By Eileen Claussen
Enhanced online at www.sciencemag.org/cgi/content/full/306/5697/816
Originally published October 29, 2004: VOL 306 SCIENCE
The Bush Administration’s “business as usual” climate change policy (1), with limited R&D investments, no mandates for action, and no plan for adapting to climate change, is inadequate. We must start now to reduce emissions and to spur the investments necessary to reduce future emissions. We also need a proactive approach to adaptation to limit the severity and costs of climate change impacts.
Science and Economics
Those who are opposed to national climate change policies make much of the uncertainties in climate models, specifically the rate and magnitude of global warming. The Climate Change Science Program’s plan, points out Secretary Abraham, would address these uncertainties, although he offers no assurances that the program will be adequately funded. However, the scientific community already agrees on three key points: global warming is occurring; the primary cause is fossil fuel consumption; and if we don’t act now to reduce greenhouse gas (GHG) emissions, it will get worse.
Yes, there are uncertainties in future trends of GHG emissions. However, even if we were able to stop emitting GHGs today, warming will continue due to the GHGs already in the atmosphere (2).
National climate change policy has not changed significantly for several years. The first President Bush pursued a strategy of scientific research and voluntary GHG emissions reductions. The new Climate Change Science Program has a budget comparable, in inflation-adjusted dollars, to its predecessor, the Global Climate Research Program, during the mid-1990s. The Administration’s current GHG intensity target will increase absolute emissions roughly 14% above 2000 levels and 30% above 1990 levels by 2010 (3). These increases will make future mitigation efforts much more difficult and costly.
While reducing uncertainty is important, we must also focus on achieving substantial emissions reductions and adapting to climate change.
Low-Carbon Technology Development
The Administration’s more substantive R&D initiatives, such as Hydrogen Fuels and FutureGen (clean coal) are relatively modest investments in technologies that are decades away from deployment. We need a far more vigorous effort to promote energy efficient technologies; to prepare for the hydrogen economy; to develop affordable carbon capture and sequestration technologies; and to spur the growth of renewable energy, biofuels, and coal-bed methane capture.
Equally important, we need to encourage public and private investment in a wide-ranging portfolio of low-carbon technologies. Despite the availability of such technologies for energy, transportation, and manufacturing, there is little motivation for industry to use them. Widespread use of new technology is most likely when there are clear and consistent policy signals from the government (4).
One-fifth of U.S. emissions comes from cars and trucks (5). The Administration’s targets to improve fuel economy for light trucks and “sports utility” vehicles (SUVs) by 1.5 miles per gallon over the next three model years fall far short of what is already possible. California is setting much more ambitious emission standards for cars and light trucks. Current efficiency standards can be improved by 12% for subcompacts to 27% for larger cars without compromising performance (5).Hybrid vehicles can already achieve twice the fuel efficiency of the average car.
About one-third of U.S. emissions results from generating energy for buildings (6). Policies that increase energy efficiency using building codes, appliance efficiency standards, tax incentives, product efficiency labeling, and Energy Star programs, can significantly reduce emissions and operating costs. Policies that promote renewable energy can reduce emissions and spur innovation.Sixteen states have renewable energy mandates (7).
The Power of the Marketplace
Policies that are market driven can help achieve environmental targets cost-effectively. A sustained price signal, through a cap-and-trade program, was identified as the most effective policy driver by a group of leaders from state and local governments, industry, and nongovernmental organizations (NGOs) (8).
Senators Lieberman (D–CT) and McCain’s (R–AZ) 2003 Climate Stewardship Act proposes a market-based approach to cap GHG emissions at 2000 levels by 2010. The bill, opposed by the Administration, garnered the support of 44 Senators. Nine Northeastern states are developing a regional “cap-and-trade” initiative to reduce power plant emissions. An important first step would be mandatory GHG emissions reporting.
Adapting to Climate Change
An important issue that Secretary Abraham failed to address is the need for anticipating and adapting to the climate change we are already facing. Economic sectors with long-lived investments, such as water resources, coastal resources, and energy may have difficulty adapting (9). A proactive approach to adaptation could limit the severity and costs of the impacts of climate change.
By limiting emissions and promoting technological change, the United States could put itself on a path to a low-carbon future by 2050, cost-effectively. Achieving this will require a much more explicit and comprehensive national commitment than we have seen to date. The rest of the developed world, including Japan and the European Union, is already setting emission-reduction targets and enacting carbon-trading schemes. Far from “leading the way” on climate change at home and around the world, as Secretary Abraham suggested, the United States has fallen behind.
References and Notes
1. S. Abraham, Science 305, 616 (2004). |
2. R. T. Wetherald, R. J. Stouffer, K. W. Dixon, Geophys. Res. Lett. 28, 1535 (2001).
3. “Analysis of President Bush’s climate change plan” (Pew Center on Global Climate Change,Arlington,VA, February 2002); available at www.c2es.org.
4. J. Alic, D. Mowery, E. Rubin, “U.S. technology and innovation policies: Lessons for climate change” (Pew Center on Global Climate Change,Arlington,VA, 2003).
5. National Research Council, “The effectiveness and impact of corporate average fuel economy (CAFÉ) standards” (National Academies Press, Washington, DC, 2002).
6. “U.S. greenhouse gas emissions and sinks: 1990–2002”(EPA/430-R-04-003, Environmental Protection Agency, Washington, DC, 2002), Table 3–6.2002.
7. Workshop proceedings, “The 10-50 solution: Technologies and policies for a low-carbon future,”Washington, DC, 25 and 26 March 2004 (The Pew Center on Global Climate Change and the National Commission on Energy Policy, Arlington,VA, in press).
8. J. Smith, “A synthesis of potential climate change impacts on the United States” (Pew Center on Global Climate Change, Arlington,VA, 2004). Published by AAAS
For Immediate Release:
October 13, 2004
Katie Mandes 703-516-4146
CLIMATE POLICY AND TECHNOLOGICAL CHANGE
New Report Examines How Cimate Policies Affect the Cost of Greenhouse Gas Mitigation
Washington, DC — With Russian ratification of the Kyoto Protocol now likely, the development and deployment of technologies to reduce global emissions is more critical than ever. While technological change occurs naturally as companies compete in the marketplace, climate policies can spur additional or “induced” technological change (ITC).
Induced Technological Change and Climate Policy, by Larry Goulder of Stanford University, explores the use of ITC in climate policy, using state-of-the-art economic modeling and analysis. Goulder finds that models that include ITC produce lower cost estimates for GHG reductions, and that costs are lowest when climate policies are announced in advance. Furthermore, he finds that to reduce greenhouse gas emissions most cost-effectively, both policies that boost technological innovation, such as R&D funding, and policies that limit emissions, such as a GHG cap-and-trade program, are required.
“This research shows us that the costs of meeting a long-term CO2 emissions target using both R&D subsidies and a carbon tax (or cap-and-trade) is roughly 10 times less than with R&D subsidies alone,” said Eileen Claussen, President of the Pew Center on Global Climate Change.
A crucial point is that although studies show different implications of ITC on the overall timing of climate policy, all find that some abatement must begin now in order to jumpstart the critical process of technological change. “Timing is crucial for dealing with this issue in a cost-effective manner; the longer we wait, the more expensive it will be,” said the Pew Center’s Claussen.
The full text of this and other Pew Center reports is available at http://www.c2es.org.
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.
U.S. CLIMATE POLICY:
WEBCASTS AND TRANSCRIPTS (in PDF)
THURSDAY JUNE 24, 2004 (full transcript)
Strobe Talbott, President, The Brookings Institution (webcast/transcript)
Eileen Claussen, President, Pew Center on Global Climate Change
Science, Security, and Economics
Moderator: David Sandalow, Environment Scholar, The Brookings
Donald Kennedy, Editor in Chief, Science (webcast/transcript)
R. James Woolsey, Vice President, Booz Allen Hamilton (webcast/transcript)
C. Fred Bergsten, Director, Institute for International Economics
Question and Answer Session (webcast/transcript)
Climate Change: The Policy Challenge
Joseph I. Lieberman, United States Senate (webcast/transcript)
Spencer Abraham, Secretary, Department of Energy (webcast/transcript)
Michael Morris, Chairman, President, and CEO, American Electric Power
Larry Schweiger, President and CEO, National Wildlife Federation
Roundtable: Action by States and Business (webcast/transcript)
Moderator: Sally Ericsson, Director of Outreach, Pew Center on Global Climate
Jo Cooper, Vice President for Government Relations, Toyota
Douglas Foy, Secretary of Commonwealth Development, Massachusetts
Chris Mottershead, Distinguished Advisor BP
Stephanie Timmermeyer, Secretary of Department of Environmental Protection,
Domestic Climate Policy
Eileen Claussen, President, Pew Center
John Rowe, Chairman and CEO, Exelon Corporation (webcast/transcript)
John McCain, United States Senate (webcast/transcript)
Question and Answer Session (webcast/transcript)
FRIDAY JUNE 25, 2004 (full transcript)
Domestic Climate Policy (Cont.)
James Connaughton, Chairman, White House Council on Environmental Quality
Wayne Gilchrest, U.S. House of Representatives (webcast/transcript)
International Climate Action
Stephen Timms, Energy Minister, United Kingdom (webcast/transcript)
Elliot Diringer, Director of International Strategies, Pew Center on Global Climate
Nigel Purvis, Brookings Scholar on Environment, Development and Global Issues,
The Brookings Institution (webcast/transcript)
James Wolfensohn, President, The World Bank Group (webcast/transcript)
Closing Remarks (webcast/transcript)
ENERGY EFFICIENCY, CLIMATE CHANGE AND OUR NATION’S ENERGY FUTURE
Remarks by Eileen Claussen
Energy Efficiency Forum, Washington D.C.
June 16, 2004
It is a pleasure to join you to talk about energy efficiency, climate change and our energy future. I understand that the organizers of the forum, in seeking someone to make the connection between energy efficiency and climate change, originally extended an invitation to Dennis Quaid. Mr. Quaid is the actor, of course, who plays a climatologist in the film The Day After Tomorrow, which in case you have not heard is a movie currently in theaters that turns climate change into a global Armageddon. I am sorry to report, however, that Mr. Quaid’s flight was delayed by tornadoes, tidal surges, flooding and hail. So you will have to settle for me.
That was a joke. And now I will move on to more serious things. I know you have heard from many experts today about many different topics, so I want to be brief and make seven quick points.
My first point is that any discussion of energy policy to deal with three issues. The first is energy supply (and therefore security) – Can we find enough energy to meet our needs from sources that are secure? The second issue is climate change – Can we provide the energy we need in ways that do not harm the climate? Last but not least is the issue of cost or price – Can we meet our energy needs in affordable ways that will allow us to continue to grow our economy?
Looking across these three issues, it is clear to me that what we need is a climate-friendly energy policy on the one hand and an economy-friendly climate policy on the other. Some elements of these policies will be the same, but the important point is that we need to think broadly about how best to achieve the related goals of protecting the climate and meeting America’s energy needs affordably in the decades ahead.
My second point is that, looking across these three issues I have mentioned – supply, climate and cost – energy efficiency is an obvious “win-win-win.” Supply and security become less of a problem to the extent that we can save energy through efficiency efforts. Every barrel of oil or ton of coal that we do not burn because we are more efficient means less carbon dioxide in the atmosphere. And, on the cost issue, of course, energy efficiency is relatively cheap and can, in many cases, actually save money.
At the Pew Center, we work with 38 leading businesses that are taking practical steps to reduce their contribution to climate change. Many of the members of our Business Environmental Leadership Council are embracing energy efficiency as a key strategy, and they are reaping remarkable rewards. For example:
· DuPont used 9 percent less total energy in 2002 than it did in 1990, despite an almost 30-percent increase in production. The resulting energy savings: nearly $2 billion.
· Another example is IBM. Between 1990 and 2002, IBM’s energy conservation measures resulted in savings of 12.8 billion kilowatt hours of electricity, avoiding nearly 8 million tons of CO2 emissions and saving the company $729 million in reduced energy costs.
I have often said that there is no silver bullet solution to the problem of climate change – in other words, it is a problem that will require multiple solutions. But when you hear these stories—and when you look at the need to address climate change alongside the need to keep America safe and economically strong—you start to see how energy efficiency is about as close as you can get to a silver bullet. It is not the only answer, but anyone who would suggest that it is not an essential part of the solution is not seeing clearly. We would be foolish not to make it a priority.
But, of course, energy efficiency alone will not solve our energy and climate problems. And that is my third point. U.S. energy intensity is already improving by 1.5 percent per year. If we could accelerate this rate to 2 percent per year, energy use in 2050 would be nearly 50 percent lower than it would otherwise be, but still up 60% from current levels—clearly not where we need to be if our energy sources are not carbon-friendly.
So what these figures do tell us is that energy efficiency is an essential component – but not the only component – of any long-range effort to protect the climate.
And this brings me to my fourth point. We need a wide-ranging portfolio of technologies and strategies. We need to create the conditions for a new industrial revolution that will reach across each of the major energy-producing and -consuming sectors of our economy. And every technology that could potentially play a part in this revolution comes with challenges – challenges that we can frame, once again, in terms of the three issues of supply, climate and cost.
With use of natural gas, for example, we can limit our emissions of greenhouse gases, but there are real challenges in terms of supply and cost. With coal, by contrast, it is the climate and not cost or supply that we need to worry about (unless we put real effort into carbon capture and sequestration and can make it work at an affordable price). Cost, of course, is an important challenge for nuclear power, as are considerations of waste and weapons proliferation. And cost is also a challenge with renewables--a challenge that clearly influences the supply and use of these technologies. When we look at oil, we see challenges in all three areas. The world may have ample supplies overall, but the security of those supplies is an obvious concern, as are the price and the climate. And finally, is there a silver bullet in the hydrogen economy? Here there are many challenges, from infrastructure changes to the very important question of where the hydrogen comes from. We cannot forget that if it comes from coal, and there is no carbon capture and sequestration, we are better off with conventional fuels.
In other words, there is no technology without a challenge, and no technology that can by itself be “the” energy solution to meet our needs. We need to consider the full range of solutions available to us, work on them all, and try to meet the challenges and opportunities each present.
This brings me to my fifth point. While it is clear that we need a portfolio of technologies, I believe it is also clear that we need a policy that will draw the technologies into the marketplace. In other words, the “if you build it, they will come” energy strategy is not a realistic one.
Just last year, the Pew Center brought together a group of businesses and experts to explore three very different future energy scenarios for the United States. And what they found was that even in the scenario where we modeled the most optimistic assumptions about the cost and performance of new energy technologies, carbon emissions were still rising in 2030. This result points to the need for a mandatory carbon policy -- raising the question of what that policy should be.
Which brings me to Point Number Six. In the same way that no single energy technology solution will solve all of our problems, no individual policy solution will be enough to do the job.
As I said at the start of my remarks, we need both a climate-friendly energy policy and an economy-friendly climate policy. There will be a lot of overlap, of course, but the problem of climate change demands targeted policies. More than anything else, that means adopting a cap-and-trade system for large sources of greenhouse gas emissions that begins to yield real reductions in those emissions—and that does so in a way that gives companies a high degree of flexibility and keeps overall costs under control. This is the approach at the heart of the legislation introduced last year by Senators Joseph Lieberman and John McCain. A companion measure was introduced in the House of Representatives this spring.
But at the same time that we are crafting targeted climate policies, we also need to craft an energy policy for this country that will keep us safe and our economy strong—while also providing climate benefits. Here, I think we need both carrots and sticks. Some carrots should be in the form of substantial (and I mean very substantial) funding and public-private partnerships for research, development and demonstration of new carbon-friendly technologies. Others should be in the form of incentives and rewards for bringing to the market new, carbon-friendly technologies. But we also need sticks. Examples of sticks include efficiency standards for everything from appliances to automobiles and trucks, as well as renewable energy mandates.
So there we have it: a portfolio of technologies and a portfolio of policies. And that brings me to my seventh and final point. It is going to take a great deal of political will to pull this off. One piece of legislation, one high-profile initiative or one high-profile technology is not going to be enough to create a new industrial revolution. In the years and decades to come, we are going to need a sustained commitment to this agenda from our national leaders.
Right now, we are beginning to see the stirrings of that political will. The McCain-Lieberman bill attracted the support of 44 U.S. senators, a respectable number and an indication of growing support for U.S. action on the climate issue. Even more encouraging is the action we are seeing at the state level on this issue:
· For example, New York and nine other mid-Atlantic and northeastern states are discussing a regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants.
· And, in California, the state’s Air Resources Board is working to set greenhouse gas emission standards for new passenger cars and light-duty trucks, starting in model year 2009.
That is what I call political will, and we need a lot more of it. If we want to go on a diet – and a “low-carb” diet is what we need – we are going to need all the will power we can muster. We need to build a low-carbon economy, and we need to have it in place by the middle of this century. And that means making a real commitment to a climate-friendly energy policy and an economy-friendly climate policy.
It is not every generation that has a chance to launch a new industrial revolution. History has presented us with an awesome responsibility to the generations to come. And we will forever be remembered for the manner in which we respond.
Thank you very much.
Global Climate Change and Coal's Future
Remarks by Eileen Claussen
President, Pew Center on Global Climate Change
Spring Coal Forum 2004 - American Coal Council
May 18, 2004
It is a pleasure to be here in Dallas. And I want to thank the American Coal Council for inviting me to address this forum.
I thought I would open my remarks today with some commentary on the upcoming FOX movie about climate change—it is entitled “The Day After Tomorrow.” It is not often, after all, that I get to talk about the movies in my speeches. And I suppose that’s because there are not a lot of movies on the topic of climate change—of course, I am not counting “Some Like It Hot.”
In case you haven’t already heard, “The Day After Tomorrow” comes out Memorial Day weekend. It is a movie that tries to show the consequences of climate change by letting loose tornadoes in Los Angeles, dropping grapefruit-sized hail on Tokyo, and subjecting New York City to a one-day shift from sweltering-to-freezing temperatures.
The only thing I can say is it’s a dream scenario for the people at The Weather Channel.
Actually, the reason I bring this up is because we are bound to be hearing a great deal about the issue of climate change over the next several weeks. This is a major motion picture with a major marketing push behind it.
And, while I know of no one in the scientific community who believes climate change will unfold in the way it is portrayed in the film, I also know this: If this movie sounds far-fetched, it is frankly less of a distortion—much less—than the argument that climate change is a bunch of nonsense. It is not. Climate change is a very real problem with very real consequences for our way of life, our economy and our ability to ensure that future generations inherit a world not appreciably different from our own.
I strongly believe it is time for some straight talk about the problem of climate change and what it means for you - the coal industry. So while my remarks here today are also relevant to the oil and gas industry, I believe coal to be in a more precarious position, and I believe that for 2 reasons: 1) I think coal is an easier target politically and 2) oil and gas are already involved in the policy process. So despite the current outlook for coal in the United States, I am here to say that a robust future for coal is not a sure thing, particularly if we do not find environmentally acceptable and cost-effective ways to use it.
So let’s look at some facts.
Here in this country, as all of you know very well, coal provides 52 percent of all electricity, more than double the amount of any other fuel source and five times more than gas, oil or hydro-electric power. Coal is the most abundant energy source today, it is dispersed throughout the world, and it is available at a relatively low cost. Worldwide coal consumption, according to the U.S. Energy Information Administration, is expected to grow by more than 40 percent between 2001 and 2025, with China and India accounting for three-fourths of that increase.
Given these facts, a scenario in which we meet the world’s various energy challenges without coal seems to me highly unlikely.
At the same time, however, I cannot imagine—or, rather, I fear to imagine—what will happen if over the next 50 years we do not get serious about reducing worldwide emissions of carbon dioxide and other greenhouse gases that we know contribute to climate change.
Coal alone is responsible for 37 percent of CO2 emissions in the United States. Thirty-seven percent. Worldwide, the EIA projects that coal will continue as the second largest source of carbon dioxide emissions after petroleum, accounting for 34 percent of the total in 2025.
Coal’s dominant role in the global energy mix, together with its responsibility for a large share of CO2 emissions, suggests it is high time to figure out how to continue using coal in a way that results in the least amount of harm to the global climate.
I am not going to tell you that we can address this problem with no costs. Our goal must be to ensure that the costs themselves do not become a barrier to action. I believe we can manage those costs in a way that enables continued economic growth and, equally important, in a way that causes the least amount of harm to the environment.
And finally, we must acknowledge the very real costs of not acting to address the problem of climate change. I will talk more about that later.
And so today I want to lay out for you how important it is for this industry—your industry—to become a part of the solution to climate change. I also want to talk about your role in helping to shape the policies and in developing the technologies that will allow us to reduce greenhouse gas emissions from coal generation and other sources.
But before that, I need to address the question of why I am here and why we are having this discussion in the first place. And the answer is because the threat of climate change, as I have already noted, is very real. If you still have any doubts about this, then I refer you to the findings of a special, well-balanced panel put together by the National Academy of Sciences at the request of President George W. Bush. The panel’s conclusion: the planet is warming and human activities are largely to blame. And, of course, the human activity that is most responsible is the burning of fossil fuels.
Let's get one other thing out of the way -- the Kyoto Protocol. I am not here to argue the merits of the Protocol. And I'm certainly not here to argue for ratification of Kyoto. Because I think it's pretty clear that, at least as far as the United States is concerned, the Kyoto Protocol is a dead issue. So, let's agree on that, and let's move beyond Kyoto, and talk about what really needs to happen.
This is what we know. The 1990s were the hottest decade of the last millennium. The last five years were among the seven hottest on record. Yes, the earth's temperature has always fluctuated, but ordinarily these shifts occur over the course of centuries or millennia, not decades.
Now I know there are skeptics on this issue - there might even be a few here today, so let me take a minute to talk about some of the more common misconceptions I hear.
A common one is to point to the satellites circling our planet overhead and to note that these precision instruments show no warming of our atmosphere. Global warming, some skeptics say, is therefore just an artifact of urbanization or some other miscalculation here on the ground.
All I can say about these claims is that they are dead wrong. As early as 2000, the National Academy of Sciences concluded that the warming observed on the ground was real, despite what the satellites might tell us. What’s more, since that time estimates of warming from satellites have progressively increased. Just this month, in fact, a new study in the journal Nature took a fresh look at the satellite data and found that the so-called “missing warming” had been found, bringing the satellite estimates more in line with temperatures observed on the ground.
Warming by itself, of course, is not proof of global warming. Climate conditions vary naturally, as we all know, and I am sure you have heard arguments that such natural variability, whether caused by volcanoes or the sun, can account for the climate change we’ve seen in recent decades. But, when scientists actually take a look at the relative importance of natural vs. human influences on the climate, they consistently come to the same conclusion. And that is this: observed climate change, particularly that of the past 30 years, is outside the bounds of natural variability. Atmospheric concentrations of carbon dioxide are more than 30 percent higher now than they were just a century ago. Despite what you may hear, this increase in carbon dioxide is undeniably human in origin, and it is the only way to explain the recent trends in the global climate.
Scientists project that over the next century, the average global temperature will rise between two and ten degrees Fahrenheit. A ten-degree increase would be the largest swing in global temperature since the end of the last ice age 12,000 years ago. And the potential consequences of even gradual warming are cause enough for great concern.
What will those consequences be? We can expect increased flooding and increased drought. Extended heat waves, more powerful storms, and other extreme weather events will become more common. Rising sea level will inundate portions of Florida and Louisiana, while increased storm surges will threaten communities all along our nation’s coastline, including the Texas coast.
Looking beyond our borders, we can see even broader, more catastrophic effects. Imagine, for example, what will happen in a nation such as Bangladesh, where a one-meter rise in sea level would inundate 17 percent of the country.
In addition to the obvious threat to human life and natural systems, climate change poses an enormous threat to the U.S. and world economies. Extreme weather, rising sea level and the other consequences of climate change will result in substantial economic losses.
We cannot allow the argument that it will cost too much to act against climate change to prevail in the face of the potentially devastating costs of allowing climate change to proceed unchecked.
Furthermore, the longer we wait to address this problem, the worse off we will be. The Pew Center in 2001 held a workshop with leading scientists, economists and other analysts to discuss the optimal timing of efforts to address climate change. They each came at it from a different perspective, but the overwhelming consensus was that to be most effective, action against climate change has to start right now.
Among the reasons these experts offered for acting sooner rather than later was that current atmospheric concentrations of greenhouse gases are the highest in more than 400,000 years. This is an unprecedented situation in human history, and there is a real potential that the resulting damages will not be incremental or linear, but sudden and potentially catastrophic. Acting now is the only rational choice.
But what can we do? The Pew Center on Global Climate Change was established in 1998 in an effort to help answer this very question. We are non-profit, non-partisan and independent. Our mission is to provide credible information, straight answers and innovative solutions in the effort to address global climate change. We consider ourselves a center of level-headed research, analysis and collaboration. We are also a center in another sense–a much-needed centrist presence on an issue where the discussion too often devolves into battling extremes where the first casualty is the truth.
The Pew Center also is the convenor of the Business Environmental Leadership Council. The group’s 38 members collectively employ 2.5 million employees and have combined revenues of $855 billion. These companies include mostly Fortune 500 firms that are committed to economically viable climate solutions. And I am pleased to say that they include firms that mine coal and firms that burn it—some of whom are represented here today. As members of the Business Environmental Leadership Council, all of these companies are working to reduce their emissions and to educate policy makers, other corporate leaders and the public about how to address climate change while sustaining economic growth.
And, if their work with the Pew Center proves anything, it is this: Objecting to the overwhelming scientific consensus about climate change is no longer an acceptable strategy for industry to pursue.
We need to think about what we can realistically achieve in this country and around the world and begin down a path to protecting the climate. And that means making a real commitment to the full basket of technologies that can help to reduce the adverse environmental effects of coal generation. The most promising of these technologies, of course, are: carbon capture and storage; and coal gasification, or IGCC.
Carbon capture and storage, or CCS, holds out the exciting prospect for all of us that we can continue using proven reserves of coal even in a carbon-constrained world. In only the last three decades, CCS has emerged as one of the most promising options we have for significantly reducing atmospheric emissions of greenhouse gases. Today, 1 million tons of CO2 are stored annually in the Sleipner Project in the North Sea, and several more commercial projects are in various stages of advanced planning around the world. Between off-shore, saltwater-filled sandstone formations, depleted oil and gas reservoirs, and other potential storage locations, scientists say we have the capacity to store decades worth of CO2 at today’s emission rates.
Of course, it will still take a great deal more effort before CCS is ready for prime time. In a paper prepared for a recent Pew Center workshop held in conjunction with the National Commission on Energy Policy, Sally Benson of the Lawrence Berkeley National Laboratory identified several barriers to the implementation of carbon capture and storage, or CCS. They include:
- The high costs and quote-unquote “energy penalties” of post-combustion CCS.
- The high capital costs of gasification, as well as a lack of experience with the technology in the utility sector.
- Limited experience with large-scale geologic storage.
- Uncertainty about public acceptance of CO2 storage in geologic formations.
- A lack of legal and regulatory frameworks to support widespread application of CCS.
- And, last but not least, a lack of financial resources to support projects of a sufficient scale to evaluate the viability of CCS.
Yet another technology that could potentially help to reduce the climate impact of coal generation is IGCC. Of course, IGCC’s principal benefit from a short-term environmental perspective is a significant reduction in criteria air pollutant emissions and in solid waste. But, over the long haul, IGCC has great potential to reduce CO2 emissions as well, both because, compared to pulverized coal combustion, it could result in significant improvements in efficiency, because it can be much more easily combined with CCS, and because it enables hydrogen production from coal.
But, as with CCS, IGCC still has a ways to go before it can deliver on its enormous promise. As of today, there are only two real IGCC plants in operation in the United States, but neither is operating fully on coal. Yes, the Bush administration has made a big splash with its announcement of the $1 billion FutureGEN project—which, as you know, would build the world’s first integrated sequestration and hydrogen production research power plant. But no specific plans have yet been announced.
The bottom line: these technologies—both CCS and IGCC—are nowhere near prime time. Right now, to stretch the analogy further, they are far enough from prime time to be on the air around 3 a.m. with a bunch of annoying infomercials. And they won’t get any closer to prime time without substantial investment in research and development, as well as a major policy commitment to these technologies.
The potential rewards are great. If we make the necessary commitment to CCS and IGCC, these technologies could make an important contribution to the United States’ efforts to control greenhouse gas emissions in the decades ahead. And the potential for coal to become a source of hydrogen for transportation could revolutionize the industry and our energy future.
But we need to make a commitment.
Investing in the development of these technologies, in fact, may be the only way for coal to have a long-term future in the U.S. energy mix. There will be a time in the not-too-distant future when the United States and the world begin to understand the very real threat posed to our economy and our way of life by climate change.
When that happens, those industries that are perceived as part of the problem and not part of the solution are going to have a difficult time. Allow me to put it another way: if current trends continue, there is a strong possibility that, at some point, policymakers and the public are going to see the need for drastic reductions in our emissions of carbon dioxide and other greenhouse gases. The coal industry—because of its responsibility for such a large share of those emissions—may find itself the focus of intense scrutiny and finger-pointing. And it will need to demonstrate that it is making steady and significant progress in reducing its emissions—or else face draconian policy measures.
The coal industry, of course, cannot tackle this challenge alone. Government, too, must become a part of the solution, and this is not just a matter of technology policy; there is a need for a broader climate policy. I mean a policy that sets a national goal for greenhouse gas emissions from ALL important sectors - including transportation, utilities and manufacturing - and then provides companies and industries with the flexibility to meet that goal as cost-effectively as possible. This is the approach taken in the Lieberman-McCain Climate Stewardship Act.
The need for a broader climate policy was the key conclusion of a recent Pew Center study that looked at three future energy scenarios for the United States. Even in the most optimistic scenario where we develop a range of climate-friendly technologies such as CCS and IGCC, the study projected that we will achieve no net reduction in U.S. carbon emissions without a broader policy aimed at capping and reducing those emissions.
So the challenge before us is clear: we need to craft a wide-ranging set of policies and strategies to reduce humanity’s impact on the global climate. And coal needs to be proactively and positively engaged—much more so than has been the case thus far.
I am pleased to report that there are elected leaders at the state level and in Congress who understand the importance of government action. In Congress, of course, last year we saw the Climate Stewardship Act introduced by Senators Joseph Lieberman and John McCain. This measure, which would establish modest but binding targets for reducing U.S. greenhouse gas emissions, attracted the support of 43 senators—a respectable number and an indication of growing support for U.S. action on this issue. A companion measure to the Senate bill was introduced in the House of Representatives earlier this year.
Policymakers, particularly at the state level are moving beyond debate to real action on this issue. Among the examples:
- Thirteen states, including Texas, now require utilities to generate a specified share of their power from renewable sources.
- New York and nine other mid-Atlantic and northeastern states are discussing a regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants.
- And, last September, the governors of three Pacific states—California, Oregon, and Washington—announced that they will be working together to develop policies to reduce emissions from all sources.
So the fact is, we have a lot of people in government at the state and federal levels who are beginning to look seriously at this issue and who are trying to figure out how best to respond. So the coal industry needs to be at the table now, because the policy discussion has begun.
But understand - getting to the table is not just a matter of showing up and saying, “Let’s talk.” To earn a seat at the table, coal is going to have to demonstrate that it is committed to real and serious action on this issue. And as you are probably aware, some of your competitors from a climate change perspective - the gas, oil and renewable industries are already there.
The benefits of active involvement by industry in environmental policy became clear to me during negotiations on the Montreal Protocol.
An important reason for the success of that agreement, I believe, is that the companies that produced and used ozone-depleting chemicals—and that were developing substitutes for them—were very much engaged in the process of finding solutions. As a result, there was a factual basis and an honesty about what we could achieve, how we could achieve it, and when. And there was an acceptance on the part of industry, particularly U.S. companies, that the depletion of the ozone layer was an important problem and that multilateral action was needed.
In the same way, industry involvement was an important part of the process that developed the Acid Rain Program created under the Clean Air Act Amendments of 1990. And, once again, those with a seat at the table, by and large, came out with a policy they could live with. Those who were not at the table were not as happy with the outcome.
It is a basic principle of democratic governance: the more you get involved in the process and in shaping solutions, the more likely it will be that those solutions are agreeable to you. Or, as the Chinese proverb puts it, “Tell me, I forget. Show me, I remember. Involve me, I understand.” For those of you who think there is no possible configuration that would allow the coal industry, government and environmental advocates to sit around one table—I am here to tell you that I for one am willing to make the seating arrangements work. Because we need them to work.
Whether the issue is public-private partnerships, incentives for technology development, or the level and timing of reductions in emissions, coal has a chance to shape the right solutions.
What are the right solutions? A lot of it has to do with technology—and, more specifically, with the policies needed to push and pull solutions such as CCS and IGCC to market. (Let me say here that I don’t want to leave the impression that these are the only technologies we need to look at because there are others, such as coalbed methane, that show enormous promise as well.)
I will say it one more time: coal’s place in the U.S. and global energy mix in the decades to come will depend largely on the industry’s ability, in concert with government, to develop the technologies that will allow us to achieve dramatic reductions in carbon emissions from coal generation. Without those technologies, coal loses out when the United States and the world finally appreciate the need for serious action to address this very serious problem.
In closing, I want to note that the promotional materials for the film, “The Day After Tomorrow,” ask the question: “Where will you be?” It is my sincere hope that, whether you go and see the movie or not, this industry will be on the side of solutions to this very urgent problem.
I honestly believe you don’t have much of a choice. After all, a mine is a terrible thing to waste.
Thank you very much.