Federal

The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
 

Lawmakers Will Proceed On Climate Plan

Promoted in Energy Efficiency section: 
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The Washington Post, October 4, 2007
The first in a series of white papers outlining a cap-and-trade system to cut GHG emissions by 60 to 80 percent from current levels by 2050 was released by House Energy and Commerce Chairman John D. Dingell and Energy and Air Quality Subcommittee Chairman Rick Boucher. Under the system, the federal government would distribute GHG allowances that could be bought and sold, although the lawmakers left open the possibility of using taxes as well.
Click here to read the article.

A Cap's in Hand

Full article (PDF)

by Truman Semans, Director for Markets and Business Strategy--Appeared in the World Energy Book which is available from http://www.petroleum-economist.com/
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Statement on Major Climate Meetings in New York and Washington

The United Nations and the United States convened major climate meetings during the week of September 24, 2007, to discuss future international climate change efforts.

Statement by Eileen Claussen, President, the Pew Center on Global Climate Change

 

September 28, 2007

This week’s climate meetings in New York and Washington demonstrate that climate change is finally taking its rightful place at the top of the global agenda. The high-level UN meeting, in particular, underscored a strong and growing consensus among world leaders on the urgency of forging a new global agreement addressing climate change. Both meetings also reaffirmed the United Nations as the appropriate forum for negotiating this agreement.

The meetings also laid bare key differences between the approaches favored by the Bush administration and by most other governments. In convening its Meeting of Major Economies, the administration hoped to sway other governments to its vision of a voluntary international framework. Under this approach, as President Bush described it in his address this morning, countries would agree on a long-term global goal but each would decide independently what its contribution to meeting it would be. Thankfully, other countries rejected the idea that the climate challenge can be met through voluntary measures alone, and emphasized the need for new international commitments.

In describing their own domestic efforts, other developed nations also showed they are prepared to take much stronger action than the Bush administration. Europe reiterated its commitment to reduce emissions 20 percent below 1990 levels by 2020. Canada said it plans to reduce emissions 20 percent below current levels in that timeframe. Australia said it plans to establish a domestic cap-and-trade system by 2011. Meantime, the Bush administration clings to an emissions intensity goal that keeps emissions rising through 2012, and continues to oppose bills before Congress to establish a mandatory economy-wide cap-and-trade system.

Perhaps the clearest message to emerge from this week’s meetings is the importance of the UN climate negotiations later this year in Bali. An effective agreement can be reached only if formal negotiations are launched. Bali is a critical opportunity to do just that. If President Bush is sincere in his goal of an effective UN agreement, the United States must support the launch of formal negotiations in Bali.

White House Major Economies Meeting

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

whITE HOUSE Major Economies Meeting
WASHINGTON, d.C. 
 

September 27, 2007  

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

Climate Policy Should Focus on Reducing Emissions

Climate Policy Should Focus on Reducing Emissions

By Vicki Arroyo

Originally published in the September/October 2007 issue of The Environmental Forum

I wish there were an easy solution to climate change — one that didn’t require fundamental and difficult changes in our energy system, law, or behavior. I also wish I could lose weight without diet or exercise. But depending on “geoengineering” to solve global warming is a dangerous delusion. Like a fad diet or liposuction, it may not provide sustainable benefits and will undoubtedly be accompanied by unforeseen adverse consequences (think fen-phen).

Granted, tackling climate change requires a Herculean effort: emissions are on the rise, while the newest science reveals impacts occurring faster than we envisioned. We are running out of time. To avoid the most serious consequences of warming — loss of species, irreversible breakdown of ice sheets, and the human toll from more intense heat waves and hurricanes — scientists say we need to stabilize atmospheric greenhouse gases such as carbon dioxide at less than a doubling of preindustrial levels (in the range of 450–550 ppm of CO2). If we’re very lucky, that might hold us to a 3.6ºF (2ºC) global average temperature rise.

It’s tempting to dismiss projected impacts as hyperbole or to believe that we can engineer a “fix,” the way the Apollo 13 crew saved themselves by using duct tape to fashion a make-shift filter in their struggle against rising CO2 levels on board their malfunctioning space capsule. I applaud those working on grand fixes and wish them every success. But I place more stock in solutions that exist now. A Princeton University study shows that choosing just seven current technologies from a number of options, including renewables, energy efficiency, and nuclear power, can curb emissions growth sufficiently now, while buying time for technological breakthroughs. Each of these so-called “wedges” can cut emissions by 1 gigaton per year within 50 years.

But these technologies won’t be deployed on the necessary scale without the right policies. One key policy is emissions trading, which has worked for traditional air pollutants such as sulfur dioxide and is even better suited to curbing greenhouse gases. The European Union has already developed the world’s largest carbon market. Some U.S. states are following suit, and a number of cap-and-trade proposals are pending in Congress. By combining cap-and-trade with efficiency standards for cars and appliances, advanced technology research, and development of geological storage, we can reach our emissions reductions goals.

So the essential first step is simple: stimulate existing technologies through demonstrated, cost-effective policies. This takes political will, and there is no time to lose. Greenhouse gases differ from traditional air pollutants, which can be eliminated with more than 99 percent efficiency at the stack. Greenhouse gases remain in the atmosphere — and our oceans — for hundreds of years. Even if geoengineering manages to cool a warming planet, it won’t solve other problems, such as ocean acidification from conversion of CO2 to carbonic acid. And the risks of such “fixes” as seeding the oceans with iron and adding cooling particles to the atmosphere are too big to ignore.

Yes, we should research all options. But right now our focus should be on putting policies in place to reduce our emissions and on preparing to cope with a changing world.

(Ms. Arroyo offers a view on the direction for climate policy that differs from one advocated by Alan Carlin, a senior economist at the EPA. Carlin advocates a “geoengineering” approach called solar radiation management as an effective and economical climate policy. While such long-shot approaches may be necessary to consider in the future, Arroyo argues that the current focus should be on greenhouse gas mitigation.)
by Vicki Arroyo, Director of Policy Analysis--Appeared in The Environmental Forum, September/October 2007
Vicki Arroyo
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Statement: Lieberman-Warner Proposal for Comprehensive Climate Change Legislation

Sen. Joseph I. Lieberman (ID-CT) and Sen. John Warner (R-VA) are working together to move comprehensive climate change legislation through their subcommittee of the Senate Environment and Public Works Committee.

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

August 2, 2007

The Lieberman-Warner proposal represents a critical step toward a workable climate solution, combining many of the best elements of earlier cap-and-trade bills. It proposes ambitious greenhouse gas targets and innovative mechanisms to ensure that the costs of meeting them are reasonable. Importantly, this proposal avoids the use of price caps or other mechanisms that would undermine the program's environmental objectives and the economic efficiency of a market-based approach. With their bipartisan proposal, Senators Lieberman and Warner are leading the way toward strong Senate action to curb U.S. emissions and avoid the worst potential consequences of climate change. The Pew Center looks forward to working with them as Congress moves forward on this issue.


Proposal Outline (pdf)

Summary of Cap & Trade Legislation (pdf)

Sen. Lieberman Press Release

 

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

June 27, 2007

The announcement by Senators Lieberman and Warner is great news. This will be the first time that any committee or subcommittee of Congress has attempted to pass comprehensive climate change legislation. Even better, this is being done in a bipartisan way by two very thoughtful Senators, which gives us confidence they will draft policy worthy of the challenge.

Sen. Lieberman Press Release

U.S. Environmental Protection Agency Senior Executive Service Meeting

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

U.S. ENVIRONMENTAL PROTECTION AGENCY

SENIOR EXECUTIVE SERVICE MEETING

  

WASHINGTON, DC

July 13, 2007 

Thank you very much. I must say that it is great to be among a group of knowledgeable environmental professionals.  So often in my travels, I give speeches where I have to explain all the technical issues and the terminology surrounding the climate issue.  But not here.  You know a lot of things.    You know, for example, that a decreased albedo has nothing to do with aging.    You know that cogeneration isn’t about older and younger people living together.  You know that the Group of 77 is not a large rock band.  . .  that the Mauna Loa record has nothing to do with surfing … that a carbon sink is not a high-end kitchen item . . . . . . that joint implementation is not what people mean when they say, “roll another one.”  And, last but not least, you know that thermal expansion is not that look you acquire when you’re wearing layers of long underwear under your clothes.    In all seriousness, let me begin by saying that I was an EPA Senior Executive for a very long time.  And during that time, I did some things that worked, and that were truly important (such as addressing the depletion of the ozone layer, implementing the acid rain provisions of the Clean Air Act, and helping to create the Energy Star program).    But I also did some things that did not work.  There were times when we didn’t have the skills that were necessary to make a difference (like when we defined solid waste in such a complicated way that virtually no one, other than the authors of the rule, could understand it).  You live and learn.  And, as I think back, I am very proud of my service at EPA.   It’s where I grew up, where I learned to take risks, and where I learned what leadership is all about.    It was a different Agency back then.   It was less political, less partisan, more enthusiastic, more imbued with a sense of purpose.   And it’s time for that sense of purpose to return.  Because EPA, and the world, are now facing the biggest, most complex issue this Agency has ever had to deal with.  And leadership from EPA will be crucial if we are going to solve it.    Of course I am talking about global warming.  More specifically, I am talking about the need to control greenhouse gas emissions, which, if left unregulated, will continue to interfere with the climate system and pose a serious threat to human health and the environment.      Your response to this one issue will be your legacy for generations to come.  You can—and must—have an impact in limiting the risks that climate change presents for our country and the world.  And, in my view, you needn’t wait for our nation’s lawmakers to act on this issue in a more decisive way.  There are countless things that EPA can be doing right now.  You clearly have the authority to regulate greenhouse gas emissions (courtesy of the recent Supreme Court decision) and you also can act now to facilitate the reduction of greenhouse gas emissions by granting the California waiver.  And then, when we finally get serious about reducing our nation’s greenhouse gas emissions (and that time is fast approaching), it will be up to you to make certain we do it as effectively as possible.  The bottom line is that we won’t have many opportunities to get this right.    In my remarks today, I thought I would begin with a brief review of the “state of play” on the climate change issue—including the state of the science, as well as current action in Congress, at the state and local levels, and in the business community.    I want to do this not because I think you need a primer on exactly what is happening (or not) to address this issue, but because I believe the EPA needs to be more of a player as the United States gropes its way toward a serious response to climate change.   

This is no time for EPA to assume the characteristics of a shrinking violet, or to defer leadership on this issue to others.   

Later in my remarks, I want to talk more specifically about the role of the EPA in addressing climate change—and I want to outline four ways in which EPA can contribute to climate solutions.   But first a bit on the science. 

All of you are familiar with the facts by now. The most recent report from the Intergovernmental Panel on Climate Change projected that global temperatures will rise between 3.2 and 7.2 degrees Fahrenheit by 2100.  Sea levels will rise by as much as a foot to a foot-and-a-half or more.  Many species will be lost.  In addition, there is a 90-percent or greater chance that the world will see more hot extremes, heat waves and heavy precipitation events.  And it is likely we will see more droughts as well.

EPA’s own work shows that climate change already is affecting the environment—in this country and throughout the world.  Looking ahead, I believe it will be crucial for EPA to devote more resources and more energy to assessing and communicating the implications of climate change—for health and the environment, agriculture, and other sectors.  I say this because the science on this issue is clear—much clearer, in fact, than the way in which it is currently framed on the EPA’s website and in other communications.  As I was preparing my remarks, I have to say that I was disappointed by the degree to which the EPA website continues to emphasize scientific uncertainty at the expense of helping people understand that this is a real problem and that solutions are needed.  There is no longer any doubt about it: if left unabated, climate change will have tremendous negative consequences for our country and our world.  And this agency will provide a vital service by presenting Americans with the facts about the very real risks we face. 

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

More than 80 percent of U.S. emissions are carbon dioxide from the use of fossil fuels.  This simply cannot continue—and people across the political spectrum, in both the public and private sectors, increasingly understand this. From the boardrooms of leading U.S. companies, to America’s state capitals, to international capitals and, finally, to the halls of Congress, people have begun to understand that climate change is a real problem, and that regulation is inevitable.   

Seven in ten Americans now say they want more federal action on global warming.  That is according to some polling just completed by Dr. Jon Krosnick of Stanford.  And the fact is, the American people are starting (I emphasize starting) to get action.  We are much closer to acting in a serious way on this issue than many people think. 

Already this year, there have been 105 hearings on the climate issue on Capitol Hill—serious, substantive hearings convened to help members of Congress draft mandatory climate legislation. In the U.S. Senate alone, there are five bills proposing some form of cap-and-trade program for greenhouse gas emissions, and over 120 bills that deal in some way with the climate change issue. 

These aren’t just partisan measures either; there is real, bipartisan interest in acting on this issue.  At the end of June, Independent Senator Joseph Lieberman of Connecticut and Republican Senator John Warner of Virginia announced plans to move comprehensive climate change legislation through their subcommittee of the Senate Committee on Environment and Public Works.  This will be the first time that any committee or subcommittee of Congress has attempted to pass a comprehensive climate measure.  Even better, this is being done in a bipartisan way by two very thoughtful senators, which gives me confidence they will draft policy that is worthy of the challenge.  And then there is the bipartisan Bingaman bill introduced on July 11th, and referred to the Senate Environment and Public Works Committee. 

And it is not just the Senate.  The leadership of the House has made it clear that they want to pass climate legislation as soon as possible.  I have given entire speeches this year on what’s happening on this issue on Capitol Hill, and I don’t want to do that here. But suffice it to say that Congress is taking this issue very seriously, and we may, in fact, see real climate legislation by 2008, and if not by then, almost certainly by 2010.

The pressure for national legislation is coming not only from scientists and environmentalists but from state and local leaders and the business community as well. In fact, for real action on this issue, real effort to reduce emissions, real leadership, you need to travel outside of Washington.  

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

Among the company’s goals: reducing energy use in Wal-Mart stores by 30 percent, with a corporate goal of eventually being fueled 100 percent by renewable energy.  Wal-Mart also is working to reduce the carbon footprint of its vehicle fleets. Wal-Mart operates 3,300 trucks.  In 2005, these vehicles drove 455 million miles to make 900,000 deliveries to 6,500 stores. Wal-Mart has set a goal of doubling the fuel efficiency of its new heavy-duty trucks from 6.5 to 13 miles per gallon by 2015, thereby keeping some 26 billion pounds of carbon dioxide out of the air between now and 2020.   You can also find leadership on climate change in Fairfield, Connecticut, home to a little company called GE.  As part of its Ecomagination initiative, GE has committed to doubling its investment in environmental technologies to $1.5 billion by 2010. This is the equivalent of starting a new Fortune 250 company focused exclusively on clean technology. 

And you can find leadership in Sacramento, California. As all of you know, California has established an ambitious set of greenhouse gas emission targets—1990 levels by 2020.  California lawmakers also have gone the next step and passed legislation, with real enforcement, to give the targets the force of law.

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

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

And then there are 522 mayors representing 65 million Americans.  These local leaders are aiming to reach the U.S. Kyoto target of a 7-percent reduction in emissions in their cities by 2012, relative to 1990 levels.

All of this state and local action is important in and of itself.  States and localities are setting out to achieve real reductions in their emissions.  But what they are doing also is important because they are laying the groundwork for national action.  In fact, one of the main drivers for national legislation is concern within the business community that we will have a confusing patchwork of state and local regulations on this issue.  Business leaders are saying we need to establish clear and consistent expectations.  They want certainty.  They want to know what will be expected of them, and when – instead of having this cloud looming over them and not being able to prepare. 

The reason I know this is because at the Pew Center, we work with a group of leading companies that are committed to climate solutions.  Our Business Environmental Leadership Council is now the largest U.S.-based association of corporations focused on advancing solutions to climate change. It includes 43 companies with 3.8 million employees worldwide and a combined market value of over $2.8 trillion.  Members are a who’s who of U.S. corporate leadership, from Alcoa and IBM to Intel and GE.  

Ten years ago, corporate America was a reliable ally for those opposed to any kind of serious action to address climate change.  Well, that’s just not the case any more.  And, in fact, many of the companies we work with at the Pew Center are combining independent, voluntary action to reduce their emissions and develop climate-friendly technologies with high-profile public support for new policies to protect the climate.

Earlier this year, several of the businesses on our Council joined with the Pew Center and others in a high-profile appeal for U.S. government action to address climate change.  The group is known as the U.S. Climate Action Partnership, and this wasn’t just a blanket call for government to do something.  Rather, the USCAP group issued a specific cap-and-trade proposal with specific targets and timetables—a real plan of action to slow, stop and reverse U.S. emissions. In addition to cap and trade, the USCAP group embraced an array of other policies aimed at building a low-carbon energy economy.

When Fortune 500 CEOs take a stand for policies that in the past were tagged by private-sector leaders as extreme or unwarranted, and worse, it moves the politics on this issue to a new place.  And it’s not just the members of the USCAP group.  Other business leaders are calling for action as well. In March, a group of more than 50 institutional investors controlling over $4 trillion in assets, along with 12 major corporations, sent a letter to President Bush calling for a 60- to 90-percent reduction in greenhouse gas emissions from 1990 levels by 2050.

Between the advocacy and the actions of leading businesses, and the policies adopted at the local and state levels, there is a real groundswell of activity on this issue—a groundswell that is having an impact on Capitol Hill.  But, despite all of the work that is being done, and all of the attention to this issue among government and business leaders, our emissions still are trending up and not down.  And although mandatory national policies to reduce emissions are on the way, they’re not here yet.  

And so the question remains: What is an agency, whose charge is to protect health and the environment, to do about a problem that poses clear health and environmental risks, but that hasn’t yet generated a coordinated and comprehensive legislative response?

The answer, in my mind, is that EPA should be doing four things. 

First, EPA needs to look carefully at its existing statutes to see if regulation of   greenhouse gas emissions makes sense under those authorities.  Granting the California waiver is one case where I think positive action on the part of EPA is important and timely.  And I say this fully recognizing that national action would be preferable.  But we do not yet have a national law that would control greenhouse gas emissions from automobiles, and in the absence of such a law, standing in the way of those states that have chosen to act on their own seems undemocratic and unwise. 

Which brings me to the second thing EPA should be doing, which is to prepare for the day when we do have a national law by participating in the design of a rational regulatory program for greenhouse gases.

The Agency has implemented a remarkably successful cap-and-trade program for sulfur dioxide; you have experience with monitoring, inventories, with performance-based regulation, and more.  In short, you have the expertise that is needed to help Congress design effective solutions that will yield real reductions in national emissions of greenhouse gases. It is time to reflect back on the acid rain experience and to consider what worked in that case to make the trading regime successful.  This experience has already proven very useful to the State of California as that State considers how to design  its own cap and trade program.   It would prove similarly valuable to the Congress as it struggles to decide issues ranging from allocation policy to cost containment. 

I hope you will step up to your rightful role as the lead executive branch agency on environmental issues and insert yourselves into the congressional deliberations now—so we don’t get legislation later that proves unworkable or shortsighted or both.

You can also play an important part in assessing the impacts of all of the different technologies that are being discussed as potential solutions to this problem.  You can get ahead of the curve, and consider what rules will be required to make carbon capture and storage a reality.  You can help lawmakers understand what is possible and what is not; what can be done now and what must wait for further demonstration; what works and what does not.   

These types of assessments will lead to the best policies and, ultimately, to strong and practical laws that will put us on a path to addressing this problem in a serious way.  And, of course, once those laws are enacted, it will be your job to make sure they are implemented effectively.   

Third, EPA needs to step up its efforts to communicate with the American people about what consumers can and should be doing, not as a substitute for national regulatory action, but to supplement it and make it work.  Despite growing support for climate solutions, the American people still need a better understanding of exactly how we can, each and every one of us, help solve this problem.  People can feel a sharp powerlessness when presented with the facts about this issue – it is so global, so big, that it’s hard to imagine making a difference at an individual scale.  But you have the power in this Agency to help people understand their role. 

When we started the Energy Star program while I was at EPA, it was a simple idea—to create a government label that manufacturers could use for products that met certain energy efficiency standards. The manufacturers liked it, because it helped them market their more efficient devices. Businesses and consumers liked it, because it was a simple way to identify alternatives that would help the environment and lower their energy bills. Because only the most efficient products in each category could receive the label, it gave manufacturers a reason to continue improving efficiency.  Now this much-expanded program has seeped into the consciousness of ordinary Americans, and it clearly has made a difference.  And an important task for EPA now is to help the public understand why making the best choices is not only a money-saving, environmentally friendly decision, but a crucial component of addressing one of the biggest challenges of this century.  Increased awareness of the connection between consumer choices and climate change could help spur wider action and a better understanding of the role that every individual can play in addressing this problem.

Finally, I encourage you to start preparing this country to adapt to climate change. Even if we were to begin achieving substantial reductions in our emissions now, the climate is still going to change.  There will still be considerable impacts for the United States.  EPA can help Americans understand what those impacts will be—or, at least, help us understand the range of anticipated impacts.  

There is too little work being done on the adaptation issue, too little understanding of how various sectors will be impacted by even moderate levels of climate change, and how they can respond.  EPA can fill an important gap, I believe, by laying out the potential impacts, inventorying adaptation measures, and teeing up the national conversation about how we can prepare for a warmer world.

Not only will this help build support for adaptation at all levels of government and society, but it also will reinforce the case for climate solutions.  By communicating with state and local governments, ramping up communications with individual Americans and taking other steps, this agency can help make sure our nation is well prepared.  And it is not just a communications job.  EPA has real expertise in the infrastructure issues that are central to adaptation—from water systems to coastal development.  So you can, and must, play a real role in helping this nation prepare. 

Four steps the EPA can take: one, take action under existing statutes; two, help design rational legislation and the regulation to reduce emissions; three, help the American people understand their role in addressing this challenge; and four, help the nation prepare to adapt to climate change.  This train is coming down the tracks, and EPA will not have a lot of time to respond once it arrives.  It is time now to be prepared—not just for the reality of climate change, but also for the reality of national action to reduce emissions.   

Over the past 36 years, EPA has taken the lead in the nationwide effort to protect the environment and public health. Today, we face a larger, more wide-ranging environmental challenge than we have ever faced before.  And I believe EPA is up to shaping solutions.   

What’s more, I believe that this Agency does not have to wait for our legislators to act.  We—you—can start shaping solutions now.  This will be your legacy.  You, and this agency, will be remembered more than anything else in the decades to come for what you do today about this one issue.  I wish you all the best, and I hope you will look to the Pew Center as a resource and a partner in this vitally important work.   

Thank you very much.   

Op-Ed: Handling Climate Change

OPINION EDITORIAL
Handling Climate Change

By Eileen Claussen and Judith Greenwald

Miami Herald

July 12, 2007

The climate change debate has shifted. No longer is the argument about whether or not the world is warming, and whether or not this is a problem. It clearly is. Now, the debate is about how to address it.

As Congress moves closer to enacting a ''cap-and-trade'' program aimed at limiting U.S. greenhouse gas emissions, a number of commentators are touting a carbon tax as a preferable policy. Their key arguments in support of such a tax: 1) it would be simpler; and 2) the European Union has tried the cap-and-trade approach, and it has failed.

Both arguments are wrong.

Under a cap-and-trade program, the government sets an overall emissions cap and issues tradable allowances that grant businesses the right to emit a set amount. Those who can reduce their emissions more cheaply are able to sell extra allowances to others who would otherwise have to pay more to comply. Because of this market-based approach, a cap-and-trade system helps assure that you can achieve your overall cap at the lowest possible cost. Cap-and-trade is the basis of the U.S. effort to control acid rain pollution, which has achieved greater reductions at lower costs than anyone anticipated.

Under a carbon tax, emitters are required to pay a tax for every ton of pollution they emit. Neither system is inherently more complex than the other. Both require monitoring and enforcement -- to determine taxable emissions and to guarantee payment in the case of a tax, or to ensure that allowances match overall emissions in the case of cap-and-trade. Both approaches also must address the question of how to distribute costs and benefits. For cap-and-trade, that means figuring out how to distribute and/or auction emission allowances; under a tax, it means figuring out who pays and what to do with the revenue.

Yes, under a cap-and-trade program, exemptions and special treatment are possible, and even likely. But the same goes for a tax. Only someone who has never filled out a tax form or helped write a tax bill could expect a tax to be simpler than cap-and-trade.

As for the cap-and-trade system in Europe, it is actually a major success. The system covers more than 10,000 sources and has spawned a robust emissions trading market with millions of transactions per month.

So why the bum rap for cap-and-trade in Europe? It is a classic case of no good deed going unpunished. Cap-and-trade is the EU's primary means of complying with the Kyoto Protocol, which requires emissions reductions between 2008 and 2012. Looking ahead to the five-year ''compliance period,'' the EU wisely launched a ''learning phase'' for its emissions trading system. And, it has learned a lot.

For example, the European Union learned that its emissions data were flawed and that companies could reap windfall profits by reducing emissions much more cheaply than had been expected. The EU thus is rapidly improving its emission data, and in 2008 it will allocate a smaller percentage of emission allowances.

To commentators appalled that the EU's system thus far hasn't achieved significant emissions reductions or caused industry much pain, the response is clear: they weren't trying to reduce emissions yet. They were just getting their system up and running.

Both a carbon tax and a cap-and trade system would use economic incentives to drive emission reductions. Cap-and-trade, however, has some important advantages. It's more flexible for one, allowing you to link your system to other cap-and-trade systems around the world. In today's global economy, where companies operate in multiple countries at once, this kind of system has obvious advantages. Cap-and-trade also allows the ''banking'' of emission allowances - reducing emissions early and using the saved emission allowances for later.

But the key difference between a carbon tax and the cap-and-trade approach comes down to the issue of certainty. A tax provides for cost certainty; the cost is fixed because of the tax. Cap and trade, on the other hand, provides for environmental certainty. What's fixed is the cap itself -- and it is based on an assessment of the level of emissions you need to get to in order to protect the climate.

In response to a carbon tax, many emitters will reduce their emissions rather than pay the tax, but that result is not guaranteed. With Alaska and Greenland melting, and with droughts and other weather extremes on the rise, environmental certainty would seem to be the more compelling imperative.

Combine that with the fact that taxes are awfully hard to get through Congress, and the case for cap-and-trade is even stronger. Which just goes to show: We shouldn't let carbon-tax enthusiasts use false arguments to trash a politically feasible approach in favor of one with a snowball's chance in a warming world.

Eileen Claussen is president of the Pew Center on Global Climate Change. Judith Greenwald is director of innovative solutions at the Pew Center. 

© 2007 Miami Herald Media Company

Appeared in the Miami Herald, Thursday, July 12, 2007— by Eileen Claussen and Judith Greenwald

Congressional Testimony of Elliot Diringer - Regarding the Kyoto Protocol and U.S. Climate Action

 

ELLIOT DIRINGER, DIRECTOR OF INTERNATIONAL STRATEGIES

PEW CENTER ON GLOBAL CLIMATE CHANGE

At the House of Representatives,
Subcommittee on Asia, the Pacific and the Global Environment
Committee on Foreign Affairs

July 11, 2007

Regarding the Kyoto Protocol and U.S. Climate Action: An Update
View Webcast

Mr. Chairman and members of the subcommittee, thank you for the opportunity to testify on the Kyoto Protocol and U.S. Climate Action. My name is Elliot Diringer, and I am the Director of International Strategies for the Pew Center on Global Climate Change.

The Pew Center on Global Climate Change is a non-profit, non-partisan and independent organization dedicated to advancing practical and effective policies to address global climate change.[1] Forty-three major companies in the Pew Center’s Business Environmental Leadership Council (BELC), most included in the Fortune 500, work with the Center to educate opinion leaders on climate change risks, challenges and solutions.



 

Mr. Chairman, I would like to commend you and the members of this subcommittee for convening this hearing today on U.S. re-engagement in the global effort to fight climate change. The U.S. Congress is at long last engaged in a genuine debate on how – not if, but how – the United States should address global warming. So far, this debate has focused primarily on questions of domestic climate policy. This is a critical first step. But truly meeting the challenge of climate change will require global solutions as well. These will be possible, I believe, only with strong leadership from the United States. By broadening the scope of debate here in Washington, and by focusing attention on the international dimension of climate change, this hearing will help set the stage for constructive U.S. engagement and for an effective multilateral response.

In responding to Chairman Lantos’ questions, I would like to focus in particular on the post-2012 international climate framework – what it should look like, and the steps the United States must take at home and internationally to ensure its success. I will focus as well on how the United States can best address the questions of competitiveness and developing country participation.

1) Aside from the Asia Pacific Partnership for Clean Development and Climate, and given that the United States has neither ratified nor withdrawn from the Kyoto Protocol, what is the Administration doing to advance international cooperation on climate change?

An effective global response to climate change will be possible only with U.S. engagement and leadership. Lack of action by the United States stands today as the major impediment to stronger efforts by other countries. Of the steps the United States can take to encourage global action, the single most critical is to establish unilaterally a mandatory program to limit and reduce U.S. greenhouse gas emissions. Demonstrating the will – and establishing the means – to reduce U.S. emissions will greatly alter the international political dynamic and improve prospects for international cooperation.


Unfortunately, the Administration has strongly opposed efforts by Congress to establish mandatory policy to reduce U.S. greenhouse gas emissions.


In parallel with stronger domestic action, the United States also must help lead the way to an effective multilateral climate effort. In our view, this must be accomplished through a new treaty establishing binding commitments for all major emitting countries. The appropriate venue for negotiating this treaty is the U.N. Framework Convention on Climate Change, which was signed in 1992 by the first President Bush and unanimously ratified by the Senate. Unfortunately, while remaining a party to the Convention, the United States under the present Administration has consistently resisted any consideration of new commitments.

Last month, the G-8 endorsed President Bush’s proposal for a new set of discussions among the major emitting countries to be hosted by the United States. The stated goal is to achieve a consensus contributing to a new global agreement in 2009 under the Framework Convention. As proposed by the President, the primary focus of this major emitters process was to be the question of a long-term climate goal. While consensus on a long-term goal would be beneficial, it is not essential to advancing the climate effort, and should not be a precondition for moving forward with near- and medium-term commitments. In accepting the President’s offer, the other G-8 leaders rightly insisted on a broader agenda for the major emitters process, including “national, regional and international policies, targets and plans…(and) an ambitious work program within the UNFCCC.”

To be truly effective, any consensus achieved through the major emitters dialogue must ultimately be translated into binding commitments. Accordingly, as this dialogue is getting underway, parties to the Framework Convention should at the same time begin the process of negotiating a post-2012 climate agreement. The next opportunity to launch these negotiations will be at the Conference of the Parties later this year in Bali. A critical test of the Administration’s support for an effective multilateral response to climate challenge will be its willingness to support a decision in Bali initiating negotiations toward post-2012 commitments.


2) Given that the Protocol lapses in 2012, what measures should the United States as the largest emitter of carbon dioxide, take to slow growth in greenhouse emissions?

The Pew Center is a founding member of the U.S. Climate Action Partnership (USCAP),[2] a partnership of 29 major companies and nonprofit organizations. USCAP urges Congress to promptly enact an economy-wide, market-driven approach that includes, among other things, a cap-and-trade program that places specified limits on U.S. greenhouse gas emissions; sector-specific policies and measures to complement the cap-and-trade program; and a fully funded federal technology research, development, demonstration and deployment program for climate-friendly technologies.

 

3) What is preventing our U.S. industries from setting up markets for buying and selling emission credits?

The largest obstacle to the buying and selling of emission credits by U.S. industries is the absence of a mandatory cap on emissions and an economy-wide emissions trading system. Under a number of voluntary programs, there is a small amount of emissions trading occurring now among companies that want to demonstrate their environmental commitment and prepare for the eventuality of carbon constraints. However, a robust market requires both supply and demand, and in the case of a commodity like greenhouse gas credits, a cap or limit is the only way to create this demand. Without a mandatory cap on emissions, companies have no financial incentive to buy emission credits, since they can emit greenhouse gases for free.

It is important to remember, however, that creating a market is not the goal. Reducing emissions is the goal, and the establishment of a emissions market is a means of achieving that goal as cost-effectively as possible. Once a mandatory cap on GHG emissions is established in the United States, there will very likely be a robust market for emission credits and, more importantly, for climate-friendly technologies.
 

4) Given that more than 400 U.S. cities support and adhere to the Kyoto Protocol, what is being done at the federal level to accelerate the development of technology that can be used to reduce emissions?

Over the forty year history of federal environmental law, nearly all major federal environmental laws have been based on state and local precedents. As envisioned by the Founding Fathers, the states have served as laboratories of democracy when it comes to environmental policy, and have been joined in this role by many major municipalities. History appears to be repeating itself with climate policy, with climate friendly measures being embraced by most states and a large number of U.S. cities.

Unlike many previous environmental problems, however, climate change is a global problem. Minimizing the greenhouse gas emissions of any one city, state or country alone will not solve the problem even for that city, state or country.


Regarding federal efforts to deploy the use of climate-friendly technologies, the U.S. Department of Energy (DOE) has developed a strategic plan for its climate change technology programs, and has spent a large amount of money ostensibly to advance the technologies.

While DOE’s plan provides a fine overview of GHG-reducing technologies and the opportunities each could present over the long term, and the technology R&D has provided some useful advances, they do not constitute a program for deploying these technologies, nor for providing a path to stabilizing concentrations of GHGs. Merely developing and compiling information about climate-friendly technologies is not sufficient to ensure their widespread penetration into the marketplace.

A combination of technology “pushing” activities (such as those discussed in DOE’s plan) with technology “pulling” legislation that mandates reductions of U.S. GHG emissions would be the most effective and efficient way to deploy climate-friendly technology throughout the economy. Studies indicate that combining R&D incentives with carbon caps will cost the economy an order of magnitude less than relying on either R&D incentives or emissions reduction policies alone.[3]
 

5) Given that 70 percent of greenhouse gas emissions come from the production and consumption of energy, what should the United States be doing to encourage its energy sector to provide people with clean energy while reducing greenhouse emissions?
 




With the vast majority of U.S. greenhouse gas emissions coming from the production and consumption of energy, climate policy and energy policy are inextricably linked. The combination of technology-pushing activities and technology-pulling policies mentioned above in Questions 2 and 4 would help to encourage the U.S. energy sector to be more climate-friendly. In addition, a wide range of targeted policies could drive the energy system towards greater efficiency, lower-carbon energy sources, and carbon capture technologies. Energy consumption can be reduced through policies that increase energy efficiency, such as stronger appliance and vehicle fuel economy standards, improved building codes, and consumer education. Wider use of low-carbon energy sources can be promoted by extending and expanding the production tax credit for renewable energy sources, and through incentives and standards ensuring that transportation biofuels achieve net GHG reductions. Finally, increased and sustained funding to develop and demonstrate carbon capture and sequestration technologies is absolutely essential so that we can continue to rely on coal-fired electricity while reducing U.S. emissions.

6) What policy suggestions could the United States make at the 2007 Summit to make the Kyoto Protocol more effective in slowing the pace of global warming, and to make it more equitable among the United States and other developed nations?


The Kyoto Protocol is a major milestone. It established the first binding international commitments to address climate change and in many industrialized countries is driving action to reduce emissions. However, Kyoto represents just one stage in the evolution of the multilateral climate effort. Achieving broader participation and stronger commitments requires going beyond the Kyoto Protocol. A post-2012 agreement could well incorporate the Protocol or some of its features, such as the use of emissions trading and other market-based mechanisms. It is worth noting that these market mechanisms were built into Kyoto largely at the insistence of U.S. negotiators and business, recognizing their importance in minimizing the cost of emissions reduction. However, a comprehensive post-2012 agreement must include new approaches and elements and it may be more practical to fashion these under Kyoto’s parent agreement, the Framework Convention. Consequently, the most important step the United States can take at the Bali summit is to support the launch of negotiations under the Convention, which, subsuming or in parallel with the negotiations already underway under the Kyoto Protocol, lead toward a comprehensive post-2012 agreement with binding commitments by all the major economies.



What should a post-2012 climate framework look like? The Pew Center’s perspective on this question reflects not only our own detailed analysis but also the collective views of an impressive group of policymakers and stakeholders from around the world. As part of our effort to help build consensus on these issues, we convened the Climate Dialogue at Pocantico, a group of 25 from government, business, and civil society in 15 key countries, all participating in their personal capacities. The group included senior policymakers from Britain, Germany, China, India, Japan, Australia, Canada, Mexico, Brazil and the United States. It also included senior executives from companies in several key sectors, including Alcoa, BP, DuPont, Exelon, Eskom (the largest electric utility in Africa), Rio Tinto, and Toyota. The group’s report was released in late 2005 at an event here in Congress hosted by Senators Biden and Lugar.[4]

Despite a very diverse range of interests and perspectives, the Pocantico group succeeded in reaching consensus on a broad vision of a post-2012 climate framework. This vision begins with a set of key objectives that a post-2012 framework must meet. I would like to emphasize the two most critical objectives.

First, the post-2012 framework must engage all of the world’s major economies. Twenty-five countries account for about 85 percent of global greenhouse gas emissions. These same countries also account for about 70 percent of global population and 85 percent of global GDP. The participation of all the major economies is critical, first and foremost, from an environmental perspective, because all must take sustained action if we are to achieve the steep reductions in emissions needed in the coming decades to avert dangerous climate change. But the participation of all major economies is critical from a political perspective as well. For reasons of competitiveness, none of these countries will be willing to undertake a sustained and ambitious effort against climate change without confidence that the others are contributing their fair share. We must agree to proceed together.

At the same time, we must recognize the tremendous diversity among the major economies. This group includes industrialized countries, developing countries, and economies in transition. Their per capita emissions range by a factor of 14 and their per capita incomes by a factor of 18. This leads directly to the second objective identified in our Pocantico dialogue: The post-2012 framework must provide flexibility for different national strategies and circumstances. The kinds of policies that effectively address climate change in ways consistent with other national priorities will vary from country to country. We must allow different pathways for different countries. An economy-wide emissions target may work for some but it will not work for others. If it is to achieve broad participation, the future framework must allow for variation both in the nature of commitments taken by countries and in the timeframes within which these commitments must be fulfilled.

With these key objectives in mind, the Pocantico group then identified the potential building blocks of a post-2012 framework. The first of these is targets and trading. This is the approach employed in the Kyoto Protocol, as well as in the European Union’s Emissions Trading Scheme and the Regional Greenhouse Gas Initiative being undertaken by ten states in the northeastern United States. There are very sound reasons why U.S. negotiators insisted so strongly on a market-based architecture for the Kyoto Protocol – and why many of the major climate bills now before Congress adopt the same approach. Emission targets provide a reasonable degree of environmental certainty, while emissions trading harnesses market forces to deliver those reductions at the lowest possible cost.

While targets and trading should remain a core element of the international effort, we must recognize that China, India, and other developing countries are highly unlikely to accept binding economy-wide emission limits any time in the foreseeable future. In their view, binding targets, by holding them to specific emission levels regardless of the economic consequences, would be an undue constraint on their development. Economy-wide targets also may be technically impractical for them: to accept a binding target, a country must be able to reliably quantify its current emissions and project its future emissions, a capacity that at present few if any developing countries have.


A future framework, therefore, must allow for other approaches as well. A second potential element identified in the Pocantico dialogue is policy-based commitments. Under this approach, countries would commit to undertake national policies that will moderate or reduce their emissions without being bound to an economy-wide emissions limit. This is a more bottom-up approach, allowing countries to put forward commitments tailored to their specific circumstances and consistent with their core economic or development objectives. A country like China, for instance, could commit to strengthen its existing energy efficiency targets, renewable energy goals, and auto fuel economy standards. Tropical forest countries could commit to reduce deforestation. For this to work, the commitments would need to be credible and binding, with mechanisms to ensure close monitoring and compliance. Developed countries also may need to provide incentives for developing countries to adopt and implement stronger policies. One option is policy-based emissions crediting, similar to the Kyoto Protocol’s Clean Development Mechanism, granting countries tradable emission credits for meeting or exceeding their policy commitments.

A third potential element is sectoral agreements, in which governments commit to a set of targets, standards, or other measures to reduce emissions from a given sector, rather than economy-wide. In energy-intensive industries whose goods trade globally, which are the sectors most vulnerable to potential competitiveness impacts from carbon constraints, sectoral agreements can help resolve such concerns by ensuring a more level playing field. Such approaches are being explored by global industry groups in both the aluminum and cement sectors. We believe it is also worth exploring sectoral approaches in other sectors such as power and transportation where competitiveness is less of an issue but where large-scale emission reduction efforts are most urgent.


A fourth potential element is technology cooperation. This could include two types of agreements. The first would provide for joint research and development of “breakthrough” technologies with long investment horizons. Such agreements could build on the Asia Pacific Partnership and other technology initiatives but commit governments to the higher levels of funding needed to accelerate and better coordinate critical research and development. The second type of agreement could help to provide equitable access to both existing and new technologies by addressing finance, international property rights, and other issues that presently impede the flow of low-carbon technologies to developing countries.

The four elements I have outlined thus far fall under the heading of mitigation. A fifth critical element is adaptation. We need stronger adaptation efforts within the international climate framework but extending far beyond it as well. The top priority within the framework should be addressing the urgent needs of those countries most vulnerable to climate change. But the broader goal must be to spur comprehensive efforts to reduce climate vulnerability generally by integrating adaptation across the full range of development activities.

Having outlined the potential elements of a post-2012 climate effort, I now turn to the question of how these approaches can be integrated in a common framework. While different countries should be allowed different pathways, they cannot simply each go their own way. An ad hoc series of parallel initiatives will not produce an aggregate effort nearly adequate to the need. By linking actions, and negotiating them as a package, nations are likely to undertake a higher level of effort than they would acting on their own. Such a negotiation could take the form of sequential bargaining, with countries proposing what they are prepared to do under one or more of the different tracks I have described, and then adjusting their proposals until agreement is reached on an overall package. To help ensure a balanced and therefore stronger outcome, it may be necessary to agree at the outset that certain countries will negotiate toward particular types of commitments most appropriate to their circumstances. The objective would be an integrated agreement that is flexible enough to accommodate different types of commitments, and reciprocal enough to achieve a strong, sustained level of effort.

 

7) Given that the U.S. is not a signatory to the Kyoto Protocol, what influence does it have, if any, to promote global action?

Whether or not a party to the Kyoto Protocol, the United States has enormous power to shape – or to impede – global action against climate change. As the world’s largest economy and world’s largest emitter, the United States is arguably the single most influential force in determining the future of the international climate effort. As noted earlier, the two most critical steps the United States can take to strengthen global action are to unilaterally establish a mandatory program to limit and reduce U.S. emissions, and to lead in the development of an effective multilateral framework. Other countries eagerly await this leadership.

There are other steps the United States can take through domestic legislation to encourage developing country participation, and to address the issue of competitiveness. These issues are closely related. Ultimately, I believe, both are most effectively addressed through binding multilateral commitments. But it is important to distinguish these two issues because, in advance of a stronger global framework, each will require a different set of interim policy responses.

Competitiveness is a potential concern not for the U.S. economy as a whole, but rather for specific sectors – primarily energy-intensive industries, such as steel and aluminum, whose goods trade globally. In establishing a mandatory domestic climate program, steps can be taken to minimize or mitigate competitiveness impacts. For instance, in the design of a mandatory cap-and-trade program, potentially vulnerable sectors could be allowed special consideration in the emission allowance allocation process. Another option is to provide technology and transition assistance to affected industries and communities, possibly funded by auctioning a portion of allowances. As a longer-term option, legislation also could stipulate that if the major developing countries have not taken stronger action to reduce emissions within a specified timeframe, the United States, in concert with other industrialized countries, will consider tariffs on their energy-intensive exports or other mechanisms to correct the resulting competitive imbalances. I would note, however, that unless accompanied by positive incentives, these latter approaches are not likely to induce strong developing country action, and could lead to more confrontation than cooperation.


Engaging developing countries will require a firm but balanced approach. To begin with, we must be absolutely clear in our expectation that the major developing countries assume binding commitments in a post-2012 framework. It is true that the United States is by far the largest historic contributor to climate change. In establishing mandatory limits on domestic emissions, the United States will have begun to fulfill the commitment it made with other industrialized countries to lead the climate change effort. And having done so, it will then be reasonable to expect that countries like China fulfill their responsibilities as well. China’s emissions have grown 80 percent since 1990 and could rise another 80 percent by 2020. It is essential that these trends be reversed. Realistically, given the greater capacity and historic responsibility of industrialized countries, China, India and other developing countries will require incentives to undertake strong climate efforts. The United States should provide market-based incentives through a domestic cap-and-trade program by recognizing credits for emission reductions achieved in developing countries. In addition, targeted bilateral and multilateral assistance should be provided for the deployment of critical high-cost technologies such as carbon-capture-and storage. However, in return for these incentives, China and the other major developing countries must assume appropriate commitments that will slow and ultimately reverse the growth of their greenhouse gas emissions.
 

To summarize, I believe it is incumbent upon the United States to lead both by strong action at home and by actively and constructively reengaging in the international climate effort. Only with strong U.S. participation and leadership can we achieve a fair and effective global response to the critical challenge of climate change. I thank the subcommittee for the opportunity to present these views and would be happy to answer your questions.



[1] For more on the Pew Center, see www.c2es.org.
[2] For more on USCAP, see www.us-cap.org.
[3] See Induced Technological Change and Climate Policy, Lawrence H. Goulder, Pew Center on Global Climate Change, Arlington, Virginia, October 2004.
[4] International Climate Efforts Beyond 202 – the Report of the Climate Dialogue at Pocantico, is available at http://www.c2es.org/pocantico.cfm.

Statement: Low Carbon Economy Act of 2007

Statement by Eileen Claussen, President, Pew Center on Global Climate Change

Upon Senators Bingaman and Specter's announcement of the Low Carbon Economy Act of 2007


July 11, 2007


A sound climate policy will protect the environment by reducing greenhouse gas (GHG) emissions in a way that protects the U.S. economy. Sen. Bingaman has long been one of the leaders in the Senate's debate over how best to meet these objectives, and the Bingaman-Specter Low Carbon Economy Act of 2007, introduced today, is an important contribution to Congress' debate on this topic.

The Pew Center is encouraged to see that the bill is more protective of the environment than the most recent recommendations of the National Commission on Energy Policy from which the legislative proposal evolved, especially in establishing a tighter emissions cap (as long as the safety valve is not triggered) and in providing strong incentives for the deployment of climate-friendly technologies, most particularly geologic carbon storage.

We remain concerned, however, about the low “safety valve” or price cap contained in the bill. The allowance price is capped at $12 per ton of CO2 in 2012, rising to around $23 (in 2012 dollars) in 2025. Intervening in the market through a low price cap could both render the emission levels established in the bill meaningless and undermine investment in the next generation of climate-friendly technologies. We will be studying the proposal further to determine more specifically the effects of the price cap on both overall emission levels and investment in new technologies.

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