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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
 

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.

View the Bill

Statement: United States Climate Action Partnership (USCAP)

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

January 15, 2009

USCAP has spent the last 2 years and literally thousands of hours crafting the Blueprint for Legislative Action and I believe the stars are aligned as never before for swift action.  We must not squander this opportunity.  We can create an environmentally effective and economically viable climate policy for this country – in fact, we must.  

American College and University Presidents Climate Commitment Summit

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

AMERICAN COLLEGE AND UNIVERSITY PRESIDENTS CLIMATE COMMITMENT SUMMIT 

WASHINGTON, DC 

June 12, 2007

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Well, how quickly some of us forget. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Statement: President Bush's Climate Proposal

President Bush Announces New Climate Proposal
Statement by Eileen Claussen, President of Pew Center on Global Climate Change

May 31, 2007

Six years after rejecting the Kyoto Protocol, President Bush has finally offered an alternative proposal, but it falls well short of what's needed. Agreement among the major emitting countries on a long-term global goal would be helpful. But far more critical is getting binding commitments on near- and mid-term action to reduce emissions. From all appearances, what the president is proposing is a strictly voluntary approach that won't deliver real results. We've tried the voluntary approach, both in the United States and internationally, and it doesn't work. The bottom line is we need binding commitments from all the major economies. The president isn't offering commitments and isn't asking for commitments, and without them we won't get the job done.

Legislation in the 110th Congress Related to Global Climate Change

Members of the 110th Congress (2007-2008) are introducing legislation related to global climate change at a faster pace than any previous Congress. As of July 2008, lawmakers had introduced more than 235 bills, resolutions, and amendments specifically addressing global climate change and greenhouse gas (GHG) emissions—compared with the 106 pieces of relevant legislation the previous Congress submitted during its entire two-year (2005-2006) term.

Summaries of significant climate activity related to the 110th Congress are available here.  


The following list of bills, resolutions, and amendments is updated on a regular basis, and divided into the following categories:

This unprecedented Congressional attention to climate change reflects a profound shift in the long debate over global warming.

Overview of Bills

The year 2007 began with a change in leadership in both chambers of Congress, with Senate Majority Leader Harry Reid (D-NV), House Speaker Nancy Pelosi (D-CA), and key committee chairs Sen. Barbara Boxer (D-CA), and Rep. John Dingell (D-MI) declaring their intent to place climate change at the top of the Congressional agenda.

In March, the House of Representatives voted 269-150 to form a new Select Committee on Energy Independence and Global Warming, chaired by Rep. Edward Markey (D-MA), with Rep. James Sensenbrenner (R-WI) as the ranking member.

On December 5th, the Senate Environment and Public Work Committee voted 11-8 to favorably report S.2191, the Lieberman-Warner Climate Security Act. This is the first GHG cap-and-trade bill that has ever been voted out of a Congressional committee, and S.2191 is slated to be taken up on the Senate floor some time in 2008. Click here for a summary of the full committee markup proceedings and vote.

The 110th Congress is prolific not only in the quantity of climate change-related bills introduced, but in the breadth and variety of subjects those bills address. The bills of the 110th Congress include a record number of proposed cap-and-trade systems, resolutions calling for vigorous U.S. participation in international climate change negotiations, and funding for climate science and climate-friendly technologies research such as carbon capture and sequestration. Additionally, mutual benefits can be found in scores of bills that address energy efficiency, energy security, new technology research, agriculture, resource management, national security, and wildlife preservation.

Legislation in the 109th Congress Related to Global Climate Change

As the scientific evidence of climate change has mounted, so has congressional activity. The number of climate change-related legislative proposals increased from seven introduced in the 105th Congress (1997-1998) to 25 in the 106th Congress (1999-2000), to over 80 in the 107th Congress (2001-2002) to 96 in the 108th Congress (2003-2004). During the 109th Congress (2005-2006), 106 bills, resolutions, and amendments specifically addressing global climate change and greenhouse gas (GHG) emissions were introduced. In addition, provisions of the enacted Energy Policy Act of 2005, though they do not refer to climate change or GHG emissions specifically, were relevant to climate change.

The 106 bills, resolutions, and amendments specifically addressing global climate change and GHG emissions introduced in the 109th Congress are listed here in the following categories:

Climate change measures are increasingly being offered by members of both the Democratic and Republican Parties (to which nearly all members of Congress belong). During debate over the Energy Policy Act of 2005, in particular, the Senate voted on four climate change amendments, two of which passed – including a nonbinding resolution expressing the sense of the Senate that human-caused GHGs are causing temperatures to rise, and that Congress should enact a national mandatory, market-based program to slow, stop, and reverse the growth of these emissions – and one of which was enacted into law. The growing interest suggests that a bipartisan consensus is developing around the need to address climate change. Addressing climate change will ultimately require a comprehensive set of approaches, including a mandatory program to reduce GHG emissions (such as a program to cap GHG emissions and allow trading of emission credits), and efficiency standards to promote the use of efficient products and technologies (See The Agenda for Climate Action).

Congressional Testimony of Eileen Claussen: Regarding U.S. Re-Engagement in the Global Effort to Fight Climate Change

HON. EILEEN CLAUSSEN, PRESIDENT

PEW CENTER ON GLOBAL CLIMATE CHANGE

At the House of Representatives,
Committee on Foreign Affairs

May 15, 2007

Regarding U.S. Re-Engagement in the Global Effort to Fight Climate Change

Mr. Chairman and members of the committee, thank you for the opportunity to testify on U.S. Re-Engagement in the Global Effort to Fight Climate Change. My name is Eileen Claussen, and I am the President of 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 providing credible information, straight answers and innovative solutions in the effort 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 the public on the risks, challenges and solutions to climate change.

Mr. Chairman, I would like to commend you and the members of this committee for convening this hearing today on U.S. re-engagement in the global effort to fight climate change. As one who has worked for many years to advance efforts on this and other critical environmental challenges, it is very gratifying to me that 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 climate change. 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, and 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 to global climate change.

In my testimony today, I would like to outline the following: the key objectives that a post-2012 climate framework must meet; the form that a post-2012 framework should take; the steps the United States must take at home and internationally to ensure that such a framework is established; and how the United States can best address the questions of competitiveness and developing country participation. In the course of my testimony, I will address each of the questions the Committee has posed.

The Pew Center’s perspective on the future international framework 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.[2]

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, which speak directly to the Committee’s question about the need for and nature of developing country participation.

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 thenconsidered one of the other questions the Committee has asked: What could be the key elements of a post-2012 framework? The group recommended several policy approaches.

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 amount to a cap on economic growth. 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 well 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.

The Pocantico group also considered another question raised by the Committee: whether a new climate framework must establish a specific goal for stabilizing greenhouse gas concentrations in the atmosphere. The UN Framework Convention on Climate Change (UNFCCC) set a long-term objective for the international climate effort: stabilizing atmospheric greenhouse gas concentrations at levels that would prevent dangerous human interference with the climate system. Thus far, there has been no effort under the Convention to define that goal in quantitative terms. The Pocantico group clearly recognized the value of a quantified long-term goal in driving climate action, signaling markets, and establishing a metric to guide and assess near- and medium-term efforts. However, the group cautioned against trying to negotiate a specific quantified long-term target, particularly one intended as a basis for commitments. The scientific issues are so complex, and the inherent political stakes so great, that such a negotiation would likely be futile if not counterproductive. In my view, global consensus on a quantified long-term climate goal will be feasible only if the issue is taken up in an international venue other than that where climate commitments are to be negotiated. The U.S. Climate Action Partnership, of which the Pew Center is a founding partner, recommends stabilizing global greenhouse concentrations at a carbon dioxide equivalent level of 450-550 ppm.

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’ve 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 is flexible enough to accommodate different types of commitments, and reciprocal enough to achieve a strong, sustained level of effort.

The Committee has asked whether the UNFCCC provides a viable foundation for a global climate framework. I believe the answer is yes. The Pocantico group recognized that one precondition for a successful negotiation is broad political consensus among the key players and, accordingly, urged an informal high-level dialogue among the major economies on the broad scope and terms of a post-2012 framework. However, the group agreed that once this informal consensus is reached, it should be carried back to the Framework Convention for the negotiation of formal agreements. The Convention enshrines key principles, such as “common but differentiated responsibilities,” and has been ratified by virtually every nation on earth, including the United States. It is regarded worldwide as the legitimate forum for negotiating and mobilizing the international climate effort. Further, the Convention is flexible enough to accommodate any of the approaches I have described here. The U.N. and Convention processes are often cited as obstacles to agreement on climate change. While these processes are far from perfect, I believe the largest obstacle to date has been a lack of political will, and if that obstacle were to be removed, process issues would not stand in the way of agreement.

The Committee has also asked what steps the United States can take to most effectively reengage in the global climate effort. An effective multilateral 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 most critical is to establish unilaterally a mandatory program to limit and reduce U.S. 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.

As it strengthens its domestic response to climate change, the United States should also help lead a renewed multilateral effort both within and outside the Framework Convention process. Within the Convention process, the United States should support the launch of a new round of negotiations, either in parallel with or subsuming those already underway under the Kyoto Protocol, seeking a balanced package of commitments among the major-emitting countries. The Conference of the Parties later this year in Bali presents an opportunity to launch such negotiations. Such negotiations will be fruitful, however, only if other efforts are taken in parallel to build confidence and seek political consensus among the major economies. The Gleneagles Dialogue launched by the G8+5 in 2005 has brought together the 20 largest energy-consuming countries to discuss issues of climate, energy, and development. If given a stronger mandate when it reports back to the G8+5 in 2008, this Dialogue could be a serve as the venue for developing the political consensus needed for the formal negotiations to succeed. If not, an alternative venue for this critical political dialogue will be needed.

Finally, I would like to address directly the questions of competitiveness and developing country participation. 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 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 that on their own, however, 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, the world’s largest economy, is also 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 Committee for the opportunity to present these views and would be happy to answer your questions.



[1] For more on the Pew Center, see http://www.c2es.org.

[2] International Climate Efforts Beyond 202 – the Report of the Climate Dialogue at Pocantico, is available at /pocantico.cfm.

Summary of the GAO's Report on Climate Change and Insurance Risk

C2ES's Summary of GAO Report, Climate Change: Financial Risks to Federal and Private Insurers in Coming Decades are Potentially Significant.

The Government Accountability Office (GAO), Congress’ investigative arm, is warning of billions of dollars in possible damage claims that two federal insurance programs may face as a result of climate change related storms and floods. The report—Climate Change: Financial Risks to Federal and Private Insurers in Coming Decades are Potentially Significant—was developed at the request of Senators Lieberman and Collins, Chairman and Ranking member of the Senate’s Homeland Security and Government Affairs Committee. The Senators released the report at a hearing they held on the same topic on April 19, 2007. GAO was asked by the Senators to (1) describe how climate change may affect future weather-related losses, (2) determine past insured weather related losses, and (3) determine what major private insurers and federal insurers are doing to prepare for potential increases in such losses. The report found that large private insurers are incorporating climate change into their annual risk management practices, and some are addressing it strategically by assessing its potential long-term industry-wide impacts. The two major federal insurance programs, however, have done little to develop comparable information. GAO is recommending that the Secretaries of Agriculture and Homeland Security analyze the potential long-term fiscal implications of climate change for the FCIC and the NFIP, respectively, and report their findings to the Congress.

Senator Lieberman stated that this report “presents another strong argument—this one fiscal—for adopting an economy-wide, cap and trade, anti-global-warming law."[1]

Read the Full Report (pdf).



[1]Fialka, John. “Warming Taxes U.S. Agencies: Flood, Crop Programs Haven’t Limited Risks; Panel is Tougher on CO2.Wall Street Journal, 19 April 2007
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