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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
 

Climate Change Solutions: A Science and Policy Agenda

CLIMATE CHANGE SOLUTIONS: A SCIENCE AND POLICY AGENDA

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

COUNCIL OF SCIENTIFIC SOCIETY PRESIDENTS

DECEMBER 6, 2004

It is a pleasure to be here, and I welcome the opportunity to address such a distinguished group of science leaders.  I know that a lot of you are here from out of town, and I have to say that I appreciate what you have done to raise this city’s collective IQ, if only for a couple of days. 

I also want to say that I applaud the theme of your meeting, Setting the Agenda for 21st Century Science.  If I accomplish nothing else in my remarks, I hope I can leave you with a stronger sense that one of the most important items on the science agenda for this century is climate change and how we respond. 

Science holds the key not just to advancing our understanding of this complex problem but also to advancing our ability to reduce the very real risks it poses to the world.  Science also will be critical as we try to figure out how best to adapt to climate change in the years and decades ahead.  This is one of the most important issues of our time.  And each of you, together with your organizations and the scientists and engineers you represent, can and must play a leading role in shaping solutions.

Today, I want to talk with you about what those solutions might entail – and about how you and your organizations can help make them happen.  But first, considering that we are here in the nation’s capital, I’d like to spend a few minutes talking about how Washington has responded to climate change so far. 

In providing this report card on our elected leaders’ efforts on this issue, I am reminded of the teacher who told the parents of a failing student that they could at least rest assured of one thing.  “With grades like these, he couldn’t possibly be cheating.”

Now I know you heard yesterday from a representative of the Bush administration about its approach to the issue of climate change.  And I am certain that you heard a lot about our government’s hard work in areas from advancing climate science to promoting technology development and working with industry on an array of programs and initiatives.  But the fact of the matter is that the Bush administration’s climate policies represent little more than a “business-as-usual” approach. 

With their limited R&D investments, their reliance on voluntary measures, and their lack of planning for how this nation and others can adapt to climate change, the policies advanced by the White House are simply inadequate.    They reveal a fundamental  misunderstanding of the nature and potential severity of the problem.

The science tells us in no uncertain terms that we need to be doing all we can to, number one, reduce our greenhouse gas emissions today, and, number two, spur the investments needed to achieve even greater reductions in the years and decades ahead.  We also need to get real about the fact that climate change is happening now—and that its impacts will accelerate in the years ahead.  We need a proactive approach to adapt to climate change so we can limit the damage, economic and otherwise, that this problem will cause.

The Administration, of course, makes much of the ongoing effort to address the “uncertainties” in today’s climate models – specifically concerning the rate and magnitude of global warming.  I cannot tell you how often my staff and I, in our meetings with members of Congress and other opinion leaders, hear the refrain that the science on this issue just isn’t there yet – and that the uncertainties in the science suggest that action is not necessary or desirable at this time.

Our response is that, yes, uncertainties certainly exist about future trends.   But the certainties and near certainties are equally important.  Today, the scientific community agrees on three key points: 1) the earth is warming; 2) the primary cause of this warming is fossil fuel consumption; and 3) if we don’t act now to reduce emissions, this problem will only get worse.

Despite this concensus among scientists,  our nation’s climate change policies have changed very little in the last several years.  The first President Bush, when presented with evidence that climate change was a problem, pursued a strategy of scientific research and voluntary reductions in greenhouse gas emissions.  The evidence is much stronger and much more conclusive today, and yet our basic strategy has not changed. 

The White House’s new Climate Change Science Program, for example, has a budget comparable, in inflation-adjusted dollars, to its predecessor during the 1990s, the Global Climate Research Program.  There are the more substantive R&D initiatives embraced by this administration – I am talking here about the Hydrogen Fuels Initiative and FutureGen, the much-touted public/private initiative to develop clean coal technologies. But these initiatives, while of value, represent only modest investments in technologies that are decades away from being deployed. 

The real proof of our nation’s climate policies, of course, should be in the results, and the bottom line is that the United States is not even close to doing what’s needed to reduce our emissions and put on us a path toward meeting the long term objective of the United Nations Framework Convention on Climate Change to which the United States is a party. 
In order to stabilize greenhouse gas concentrations at roughly double pre-industrial levels (that is the equivalent of 550 parts per million), developed countries such as the United States must undertake a concerted effort to deploy existing energy efficiency and renewable energy technologies, and aggressively promote more advanced technologies as old energy capital is retired.  Allowing our near-term emissions to grow will only make this task more daunting and expensive.  But this is precisely the path we are on, and this is because we continue to rely on a voluntary approach to mitigation. 

The current Administration’s plan to reduce the “greenhouse gas intensity” of the U.S. economy actually will result in an increase in absolute emissions.  These emissions will grow by roughly 14 percent above 2000 levels and 30 percent above 1990 levels by 2010.  Needless to say, this is not the direction in which we want to be headed.

Clearly, we can do better.  We must do better.  I have often said that climate change calls on us to create the conditions for an energy technology revolution.  But a revolution needs two things: an impetus, or spark; and a vision, a vision of the change we want and need to see. 

The impetus for the revolution I am talking about, I believe, will have to come from political will.  We have seen some important gains on this front in the last couple of years, as various members of Congress, together with state and local officials, have developed and proposed policies that reflect a real understanding of what’s at stake.  But an energy technology revolution will not happen without broader support from our political leaders.  It will not happen unless and until industry receives clear and consistent policy signals from government that climate change is a priority – and that reducing emissions and developing low-carbon technologies is not a choice but a condition for doing business in America.   This is going to take a level of political will that we have not yet seen, but that I hope, with your help, we can generate in the months and years ahead.

What about the vision of where we need to go?  At the Pew Center, we recently developed something we are calling the “10-50 Solution” to climate change.  By 10-50, we mean we should be looking ahead and thinking about where we want to be on this issue in 50 years.  However, at the same time that we are establishing a long-term goal, and making the necessary investments that will allow us to meet it, we also need to identify the strategies and policies we can start pursuing in the next 10 years and in each decade that follows.  


The bottom line is that we need a sense of urgency as well as a recognition of the long-term nature of both the climate change problem and its ultimate technological solution.   The United Kingdom for example has set 2 goals, a near term goal of a 12.5-percent greenhouse gas emission reduction by 2012 and a longer term one for a 60-percent reduction within 50 years.  The United States needs to adopt something similar, setting targets that will, in turn, drive the development of the policies and technologies we will need in order to reach our goals. 

After hearing all the hemming and hawing around this issue in Washington, you wouldn’t know that near-term reductions in our emissions are readily available – principally through investments in energy efficiency.  Over the decades to come, more advanced technologies such as carbon capture and storage, hydrogen, and possibly advanced nuclear energy can be tapped to provide for the steeper reductions that are ultimately needed.  These technologies will require policies to both push and pull them to the markets, and over time these technologies also must be made available to the developing world.  But we must start now.  Because of the long-lived nature of greenhouse gases, there will always be a substantial lag between the reductions we achieve and the effect of those reductions on atmospheric concentrations of greenhouse gases.   

As we consider how to reach our long-term climate objectives, I believe we need to consider three approaches at once. 

The first approach is based on the notion of targets and trading.  Government cannot mandate a revolution.  But it can create the conditions for one.  By establishing clear and definitive goals, or targets, and then summoning the powers of the marketplace to meet them. 

From its inception, the Pew Center has supported cost-effective, market-based approaches to climate change – chiefly, through an economy-wide cap-and-trade system.  This is a policy that sets targets for greenhouse gas emissions and then allows companies the flexibility to trade emission credits in order to achieve their targets in the most economic manner. 

This is the approach taken in the Climate Stewardship Act introduced last year by Senators Joseph Lieberman and John McCain.  Their bill garnered the support of 44 U.S. senators and prompted the first serious debate in Congress about exactly what we need to be doing to respond to the problem of climate change.

Cap-and-trade works because it enables companies to reduce emissions as cheaply as possible.  We all know the example of how trading has worked to achieve cost-effective reductions in emissions of the pollutants that cause acid rain.  In fact, it was because of the United States’ successful use of trading to reduce sulfur emissions that our country insisted that trading be a central element of the Kyoto Protocol.  And now, inspired by Kyoto, the European Union is on the verge of launching the broadest emissions trading system ever established.

What’s more, right here in the United States, nine Northeastern governors, led by New York Governor George Pataki, are developing a multi-state regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants.  This effort is proceeding well, and we expect them to complete their work, as planned, by April of next year, with agreement on a model rule.

Of course, it will likely be some time before we establish a national, economy-wide cap-and-trade system in the United States—the politics (or the spark) isn’t there yet.  But what might be possible is a series of interlinked trading systems – the east coast with Europe and perhaps with Canada and the west coast as well. Such a “bottom-up” system could be robust enough both to achieve some environmental benefit and keep costs down.  And it would be a valuable learning experience for both sides on this issue, hopefully one that would show that taking action on this issue is both practical and affordable.

The second pathway to the future that I want to focus on is the need for sectoral solutions to climate change.  Simply put, any effort to address climate change must include greenhouse gas reductions from all sectors.  The two biggest sectoral sources of these emissions are transportation and electric power.    Transportation alone accounts for more than a quarter of U.S. energy consumption, and more than a third of our greenhouse gas emissions.   And the electricity sector is responsible for almost 40 percent of emissions.

If we want to achieve progress in reducing emissions, we have to achieve major reductions from these two sectors – and that means serious (short-term) efficiency improvements followed by major technological changes. But not surprisingly within these sectors there is real resistance to this kind of approach. 

The advantage we have in addressing transportation emissions is that the auto industry is highly concentrated – and global as well.  The 10 largest manufacturers account for 74 percent of the global market.  The vast majority of cars are produced – and used – in a relatively small number of countries.  Major fuel producers are also relatively small in number.   What we really need here, and what should be achievable, is an effort to bring all the key players together and chart a path toward a zero emissions future in, say, 30-50 years. 

This is not a proposal to dictate specific technologies – each major manufacturer seems to be going down a different technology path, and they should be allowed to do so – but I believe we will be most successful and efficient and if we adopt a set of globally consistent performance standards. 

No, it wouldn’t be easy, and many will argue that it is simply too hard.  But is it easier, or smarter, to tackle the problem nation by nation, or state by state? At the moment, there are different auto efficiency or CO2 emission standards or goals in the United States, Canada, Europe, Australia, Japan, China, Korea, and Taiwan.  And now here in the US we have a proposal from California to establish greenhouse gas standards for vehicles – a proposal that, if it goes into effect, will doubtless be followed by other states.   I wonder if the time isn’t close for the private sector to decide that a rational, long-term effort, in which they are “at the table” and can help set the milestones, might not be better than the alternative.

The power sector, for its part, is very different.  Power supplies are much more distributed -- there are hundreds, if not thousands of players (far too many to put into a room, let alone around a table), and there are many different ways to generate power.  So here we might focus on selected energy sources, the most important of which, both politically and in terms of emissions contribution, is coal.  There is no denying that coal will figure heavily in our energy future.  It is globally available and it is cheap.  Virtually all of the new power plants being planned here in the United States will burn coal.  China is projected to add as much as 300 gigawatts of generating capacity over the next 10 years, nearly all of it coal.

How then do we continue to provide power but minimize the impact on the climate?  How do we shift investment away from traditional coal plants to newer technologies that will be compatible with the efforts underway to capture CO2 emissions and sequester them deep in the ground?  Here, too, I think we need a combination: a global R&D effort, and a clear set of mandates to pull new and better technologies into the market.  Many in the coal industry are beginning to see the need for a more proactive strategy, and if they can be assured a place in the future, they may  be willing to give up the technologies of the past. 

To put it simply, I think every sector that is a part of the problem has to be a part of the solution – including agriculture and forestry, as well as power and transportation.    


The third pathway to the future that I want to talk about is one that integrates both climate and development.

 We cannot expect developing countries to become full partners in the climate effort if it continues to be seen as a purely environmental issue, a constraint on economic growth and development.  Frankly, this is true in developed countries as well.  We need policies that speak both to climate and to core development priorities.  The place to start, I would suggest, is with national energy policies.  Each nation needs to accept that climate change must be one of the drivers of energy policy, as the UK has.  Along with security of supply and price, we need energy policies that will not only power the global economy and raise living standards, but that will also help us in our efforts to stabilize the climate. 

Similarly, for economies to grow, and for individuals to have the mobility they desire, we must find ways to make our transportation systems more sustainable and more climate friendly.  Charting these paths forward will be crucial if we are to succeed in meeting our long-term climate objective.     

And to meet that objective, we need your help. 

As scientists and engineers, you make decisions about how this nation’s vast technical resources – including human resources – are mobilized.  You decide what research problems to focus your attention on and what solutions look most promising. You are responsible for training and nurturing the next generation of scientists and engineers.  How grant monies are used, how scholarship funding is allocated, even how course curriculums are designed – all of these questions play a role in setting the stage for the technology revolution we need to address the climate challenge. In a sense, our future is in your hands.

Some of you may be aware that the U.S. Department of Energy has issued a “Grand Challenge” to the scientific community to work on the critical issue of hydrogen storage.  While the Pew Center prefers to be “technology neutral”, I would say that there are at least two other “grand challenges” that the scientific community needs to become more engaged in over the next 10 years.  These are:

· First, the development of low-cost and reliable technologies and processes for carbon dioxide capture and geologic sequestration; and
· Second, the development of low-cost renewables and the infrastructure and storage technologies that will enable them to become widespread.

All three of these challenges – hydrogen storage, carbon capture and storage, and low-cost renewables – are currently at different points on the RD&D spectrum.  But they can all benefit enormously from your brains and your help.
  
This is why I was so delighted to be invited to speak with this group today.  We need your engagement on this issue.  Obviously, some of you and your institutions have been working tirelessly on climate issues for a long time.  But the level of human, institutional and monetary resources that are currently dedicated to these challenges does not fit the magnitude of the problem. Within your universities, your research institutions, your organizations and the broader group of NSF (or “grant-making”) funding committees, there needs to be significantly greater attention to the challenge of a low-carbon energy future – and research resources need to be allocated accordingly.

And it is not just the challenge of reducing the potential severity of climate change that we need to focus on – as I stated at the top of my remarks, we also need to figure out how to adapt to climate change. Unfortunately, because of the momentum of the climate system and, perhaps more importantly, our own economy and technology, we are beyond the point of preventing climate change. 

For example, if we were to somehow cease all greenhouse gas emissions today, we would still be committed to additional global warming of about one degree Fahrenheit over the course of the 21st century.  If we set a more realistic, but still ambitious, target of limiting atmospheric CO2 to a doubling of its pre-industrial concentration, we’d likely experience at least an additional three degrees of warming on average globally, with some regions, including the United States and the poles, expected to warm more. 

This is not a doomsday scenario – quite the contrary, this is one of the most optimistic outcomes we can expect.  But even with such valiant efforts to reduce our emissions, climate change will pose many challenges to our natural ecosystems and resources, economy, and human health.  In fact, we’re already starting to see the effects.  Therefore, we must find a way to adjust or adapt to these challenges – in other words, we need to prepare ourselves for that level of climate change that we can no longer prevent.
 
Here, too, scientists and engineers have important roles to play.  To adapt to climate change, we must first understand how our environment will respond to the changes in temperature, precipitation, and sea level that are currently projected. 

How will our water resources be affected?  Which coastal communities lie in harm’s way?  Which species are at greatest risk?  Then, we must devise methods for preparing these systems for a changing climate – new water management strategies, new coastal development plans, new wildlife conservation efforts.  And, we must do all of this against the backdrop of an ever-growing U.S. and global population, using more resources, more land, and further altering the global environment. 

Although we shouldn’t fool ourselves into thinking we can engineer ourselves out of this problem, prudence dictates that we seek ways to improve our resilience to climate.  The loss of life in Europe during the summer heat wave of 2003, or the death and destruction we witnessed in the Caribbean and the United States from this year’s hurricane season, are the harbingers of what we can expect in a world of continued warming.   

I’m sure many of you currently collaborate with colleagues from all over the world.   But how many of those colleagues are from developing countries?  Building bridges with scientists in the developing world is invaluable for enhancing the capacity of other nations to assess and respond to the challenge of climate change. 

I have talked about a number of priorities today.  I have talked about the need for an energy technology revolution.  I have talked about establishing a long-term goal of achieving a low-carbon economy.  I have talked about three pathways for achieving that goal – through targets and trading, sectoral approaches, and integrating climate and development.  And I have talked about adaptation. 

This is complex stuff, Albert Einstein famously stated that people do not truly understand something unless they can explain it to their grandmother.  Well, the unfortunate fact is that people don’t truly understand the problem of climate change.  All of us need to do a better job explaining this issue in a way that resonates with people – grandmothers and grandchildren alike. 

In a recent paper for the journal Global Environmental Change, scholars Maxwell and Jules Boykoff reported on their analysis of 14 years of climate change coverage in four major daily newspapers: The Washington Post, The New York Times, The Wall Street Journal and the Los Angeles Times.  During the period they covered, 1988 to 2002, a clear consensus emerged among climate scientists that climate change was real—and that human activities were a principal cause.  And yet, in the newspapers, the majority of articles (nearly 53 percent) gave roughly equal space to this consensus view and to the view of climate-change skeptics that any warming we have seen is the result of natural fluctuations.

This is the challenge we are up against.  Science has produced a clear case for action on this issue, but people, including some important government leaders, are still are not getting the message.  And I encourage all of you, in your communications with the media and the general public, to make every effort to convey to people what is truly at stake here.  At the same time, I encourage you, as scientists, to help us debunk all the junk science that’s out there and help people focus on what we know to be true. 

The junk science on this issue comes from all over, but there appears to be a cottage industry of industry-funded think tanks that trumpet every objection they can find to the consensus view that climate change is happening and will only get worse.   

So I am asking for your help:

  • If you or someone in your organization is talking to the media about this issue, please emphasize the clear and overwhelming consensus among scientists that this is a very real problem we need to begin addressing right now.
     
  • If you see or hear policymakers stressing the uncertainties in the climate science, please also set them straight about the certainties and what they tell us about the need for real and serious action.
     
  • The same goes for media reports on climate change that give equal weight to the scientific consensus on this issue and to the claims of the skeptics.  It is important that scientists become engaged, with letters to the editor, op-ed articles, radio call-ins, whatever it takes. 

It will take some time and persistence, but as the compelling, robust and irrefutable evidence of the human impact on the earth’s climate continues to accumulate, it will become impossible to ignore. 

As scientists, you have the credibility to challenge this nation to step up to the problem of climate change in a manner that reflects the seriousness of this issue.  And, together with your peers throughout the country, you have the capability to come up with the new ideas and the solutions that will create a safer world in the decades to come.  This is your mission, and it is our mission at the Pew Center as well.  And I hope we can work together so that future generations aren’t left wondering why we did so little – when we knew so much.

Thank you very much.

Press Release: Observed Impacts of Climate Change in the U.S.

Press Release
November 9, 2004     

Contact:  Katie Mandes
703.516-0606 

OBSERVED IMPACTS OF GLOBAL CLIMATE CHANGE
New Report Shows Disturbing Ecological Changes in the U.S.

Washington, DC — Over the past century, Earth’s average temperature has increased by approximately 1oF.  There is now strong evidence that this global warming is largely due to human emissions of greenhouse gases from a growing fossil fuel economy.  Unless these emissions are checked, additional warming of 2-10 degrees is projected by the end of the 21st century.  There are abundant signs, however, that the warming has already been sufficient to induce significant changes in the ecosystems and wildlife of the United States. 

A new report by the Pew Center on Global Climate Change, Observed Impacts of Global Climate Change in the U.S., by Camille Parmesan of The University of Texas at Austin and Hector Galbraith of Galbraith Environmental Sciences and the University of Colorado-Boulder, reviews the broad range of ecological changes that have occurred in response to human induced changes in the global and U.S. climate. 

“U.S. ecosystems and wildlife are already responding to the warming climate,” said Eileen Claussen, President of the Pew Center on Global Climate Change.  “And this is only the beginning.  With warming for the next century projected to be two to ten times greater than the last, we’re heading toward a fundamental and potentially irreversible disruption of the U.S. landscape and wildlife.”

Numerous changes have already been observed and these changes have a range of implications for the United States, its ecosystems, and biodiversity.  The responses of plants and animals to a changing climate are indicative of their natural ability to adapt, yet future global warming is likely to exceed the ability of many species to migrate or adjust. Furthermore, one species’ success in coping with climate change may be another species’ failure.  The red fox, for example, is expanding into the range of the arctic fox, forcing the arctic fox into an ever-contracting area. 

Other observed changes include a long-term trend toward an earlier spring, with earlier flowering and reproduction of plant and bird species. Butterflies on the U.S. west coast are moving north and to higher altitudes in search of tolerable climate conditions, with some populations disappearing altogether from the southern end of their ranges.  And perhaps most alarming  -- the frozen Arctic tundra is thawing, releasing carbon dioxide to the atmosphere in a feedback loop that could ultimately accelerate global warming. 

In addition, wildlife attempting to cope with current global warming must also contend with myriad other challenges such as habitat fragmentation, invasive species, water diversion, environmental contamination, and over-exploitation, all of which collectively undermine their ability to adapt.  

“What’s happening to our environment is not natural – it’s a problem of our own making.  The longer we delay in reducing greenhouse gas emissions the greater the problem will become,” said the Pew Center’s Claussen.

The report also highlights actions that can be taken to better manage U.S. natural resources to minimize the effects of climate change.

The full text of these and other Pew Center reports is available at http://www.c2es.org.  

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The Pew Center was established in May 1998 by The Pew Charitable Trusts, one of the United States’ largest philanthropies and an influential voice in efforts to improve the quality of the environment.  The Pew Center is an independent, nonprofit, and non-partisan organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change.  The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

Climate Data: Insights and Observations

Climate Data Report Cover

Climate Data: Insights and Observations

Prepared for the Pew Center on Global Climate Change
November 2004

By:
Kevin Baumert, Jonathan Pershing, with contributions from Timothy Herzog, Matthew Markoff, World Resources Institute

Press Release

Download entire report (pdf)

Descargar el reportaje en español (pdf)

Jonathan Pershing
Kevin Baumert
Matthew Markoff
Timothy Herzog
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Comments on General Guidelines for Voluntary GHG Reporting - Proposed Rule

Comments by The Pew Center on Global Climate Change Regarding
General Guidelines for Voluntary Greenhouse Gas Reporting – Proposed Rule

February 11, 2004

These comments by the Pew Center on Global Climate Change are written in response to the notice of inquiry by the U.S. Department of Energy (DOE) regarding the “General Guidelines for Voluntary Greenhouse Gas Reporting; Proposed Rule” (68 Fed. Reg. 68204 (December 5, 2003)). The Center appreciates the opportunity to comment on this important issue.

The Center previously submitted comments in response to the notice of inquiry by the U.S. DOE regarding “Voluntary Reporting of Greenhouse Gas Emissions, Reductions, and Carbon Sequestration” (67 Fed. Reg. 30370 (May 6, 2002)). In those comments, the Centerstated that a mandatory greenhouse gas (GHG) reporting and disclosure program is an essential first step in any effort to reduce U.S. GHG emissions, and provided recommendations for the design of such a program. We do not repeat all of our previous recommendations here; rather, we respond specifically to key elements of the proposed revised General Guidelines.

While we appreciate the complexity of the task before DOE and efforts made to address some concerns about the previous 1605(b) program, the Center does not feel these revisions provide the clarity and scope necessary to avoid a future revision. We are particularly concerned with the unequal treatment of real, quantifiable reductions made previously by leading firms, as we discuss below.

Defining Reporting Entities/Boundaries

We appreciate the desire to expand reporting by entities. However, limitations in the way this is done in the proposed Guidelines will impair the effectiveness of the provisions. Certain key terms are not well defined and/or are used inconsistently within the proposed revised General Guidelines.

In particular, the definition of “entity” is too vague. The proposed Guidelines state, “A reporting entity must be composed of one or more legally distinct businesses, institutions, organizations, or households, although reporters are strongly encouraged to define themselves at the highest meaningful level of aggregation appropriate” (68 Fed. Reg. 68216). A reporting entity would be required to provide an “entity statement” that meaningfully defines the operations and facilities covered by its reports, including the names of parent or holding companies not covered, and the names of large subsidiaries or organizational units that will be covered by the entity’s reports, among other details. However, relying on such entity statements would make it impossible for third parties to understand the true U.S. emissions of any firm. Indeed, relatively small components of a corporation may be the only reporters under this definition, which would provide a skewed view of the true entity-wide emissions and make comparison with other firms impossible.

In addition, terms such as “ownership” and “operational control” are not defined adequately in the proposed guidelines. One existing tool that has established clear definitions regarding ownership, control, and other key terms is the Greenhouse Gas Protocol Initiative, which was developed through an international multi-stakeholder process. With respect to choosing accounting and reporting boundaries, we support this GHG Protocol in its assertion that “boundaries should represent the substance and economic reality of the business, and not merely its legal form.”

While the Center believes understanding the true entity-wide emissions is important, availability of less aggregated data would also be helpful for analytical purposes and to inform policy-making. For example, firms providing entity-wide data could be requested to specify facility GHG emissions over 10,000 metric tons of CO2 equivalent (with appropriate exceptions for confidential business information).

Absolute Reductions in Emissions vs. Reductions in Emissions Intensity

While we think that the reporting of emissions intensity data would be interesting, the emissions reduction picture would be incomplete without absolute emissions reduction data presented as well.

Baseline Protection and Transferable Credits

On February 14, 2002, President Bush directed the DOE to recommend improvements to the Voluntary Reporting of Greenhouse Gases Program established under section 1605(b) of the Energy Policy Act of 1992 (“1605(b) program”). In particular, the president “directed the Secretary of Energy to recommend reforms to ensure that businesses and individuals that register reductions are not penalized under a future climate policy [i.e., “baseline protection”], and to give transferable credits to companies that can show real emissions reductions.”

It is not known when a mandatory program to limit emissions of GHGs will be established in the United States or what the design of such a program will ultimately be. Despite these uncertainties, it is important to move forward with GHG reductions, given the long atmospheric lifetimes of GHGs. To stimulate voluntary reductions of GHG emissions today, a GHG reporting program should provide “baseline protection” for companies that have already taken action or are planning to take action to reduce their emissions. These entities should be assured that — in the event of future controls on GHG emissions — they would receive credit for reductions achieved voluntarily. The extent and form of such credit would depend on the design of the ultimate GHG control program. All this is implicit in the President’s February 14, 2002 directive to the Secretary of Energy.

Baseline protection from the first year of reporting and onward should apply to all participating entities that are in compliance with program requirements, and that report emissions for the entire entity – not just for projects or individual facilities – with adjustments made to account for acquisitions, mergers, and other changes in the entity’s operation. An entity’s “baseline” would be emissions reported during its first year of reporting under this program, unless it chooses to select an earlier base year for which there is credible and verifiable information on GHG emissions.

The Center's review of existing statutory authorities indicates that the Executive Branch currently lacks authority to assure that current efforts to reduce GHG emissions will receive credit under a future law. If a baseline protection program is to have binding effect, it must be authorized by law to provide greater assurances to companies that the baseline protection would extend beyond the current Administration. DOE should seek this authorization not only to comply with the president’s directive, but also to strengthen the existing reporting program.

Moreover, DOE has determined that it lacks the statutory authority to create transferable credits for registered emissions reductions. As with baseline protection, DOE should seek the statutory authority to create transferable credits in the interest of complying with the president’s directive and strengthening the existing reporting program.

Registering of Activities Prior to 2003

Under the new two-tiered guidelines, entities may report (but not register) emission reductions achieved prior to 2003. Reductions that were reported to 1605(b) before 2003 could not earn registration status, even if the entities met the new guidelines. The DOE’s decision to distinguish between reductions achieved prior to 2003 and reductions achieved from 2003 is counterproductive and arbitrary. Not only would real, verifiable reductions that occurred before 2003 not be recognized under the proposed system, but entities would have no assurance that a future revision process would not similarly fail to recognize post-2003 registered reductions.

The Center urges that entities be able to register pre-2003 emissions reductions so long as they meet all other requirements of the revised, more stringent 1605(b) guidelines. Many companies have taken responsible actions to curb their GHG emissions and undertake GHG reduction projects over the last decade, due to concern about climate change impacts and in response to the United Nations Framework Convention on Climate Change and various U.S. voluntary programs. A number of these firms acted in good faith reliance on representations from previous government statements suggesting these actions would be rewarded—or at least not punished. These companies should receive credit for their early action. A GHG reporting program should make it possible for such entities to register (and receive baseline protection for) emission reductions and offsets implemented since 1990, so long as the information is certified by the reporting entity and is reported under the established reporting standards. Companies should be able to select any base year in this timeframe for which their emissions are well documented and verifiable.

International Emission Reductions

The proposed revised General Guidelines do not address either the reporting or registering of non-U.S. emissions or emissions reductions. However, the current 1605(b) program guidelines provide for reporting of international activities. The proposed revisions, therefore, take a step backward from the existing guidelines in this regard.

Because GHG emissions have the same warming effect regardless of where on the globe they are emitted, it is useful to encourage the most cost-effective GHG mitigation opportunities even if they are not in the United States. As with our comments above, many leading firms have invested in such beneficial projects at some expense and with careful attention to concerns regarding monitoring and verification. These efforts should be recognized. Therefore, The Center recommends that DOE allow and encourage reporting and registering international projects so long as they: (1) are certified as real, quantifiable, and not resulting in increased emissions elsewhere; (2) are verified by a third party qualified to provide such certification; and (3) pertain only to projects not reported elsewhere in the register.

Conclusion

The Center does not feel these proposed revisions provide the clarity and scope necessary to avoid a future revision. While moving to entity-wide reporting is desirable, the guidelines do not define entities clearly enough. The guidelines fail to provide baseline protection for pre-2003 reductions, and do not provide transferable credits. The guidelines also fail to address international reductions.

The Center believes that a mandatory GHG reporting and disclosure program is the logical next step in any effort to address climate change. Even a voluntary emission reduction program requires mandatory reporting in order to determine the overall efficacy of the voluntary effort. The Center urges DOE to work with Congress to enact mandatory reporting and disclosure.

 

Related materials: Greenhouse Gas Reporting and Disclosure: Key Elements of a Prospective U.S. Program

An Effective Approach to Climate Change

POLICY FORUM: CLIMATE POLICY

An Effective Approach to Climate Change

By Eileen Claussen

Enhanced online at www.sciencemag.org/cgi/content/full/306/5697/816
Originally published October 29, 2004: VOL 306 SCIENCE

The Bush Administration’s “business as usual” climate change policy (1), with limited R&D investments, no mandates for action, and no plan for adapting to climate change, is inadequate. We must start now to reduce emissions and to spur the investments necessary to reduce future emissions. We also need a proactive approach to adaptation to limit the severity and costs of climate change impacts.

Science and Economics

Those who are opposed to national climate change policies make much of the uncertainties in climate models, specifically the rate and magnitude of global warming. The Climate Change Science Program’s plan, points out Secretary Abraham, would address these uncertainties, although he offers no assurances that the program will be adequately funded. However, the scientific community already agrees on three key points: global warming is occurring; the primary cause is fossil fuel consumption; and if we don’t act now to reduce greenhouse gas (GHG) emissions, it will get worse.

Yes, there are uncertainties in future trends of GHG emissions. However, even if we were able to stop emitting GHGs today, warming will continue due to the GHGs already in the atmosphere (2).

National climate change policy has not changed significantly for several years. The first President Bush pursued a strategy of scientific research and voluntary GHG emissions reductions. The new Climate Change Science Program has a budget comparable, in inflation-adjusted dollars, to its predecessor, the Global Climate Research Program, during the mid-1990s. The Administration’s current GHG intensity target will increase absolute emissions roughly 14% above 2000 levels and 30% above 1990 levels by 2010 (3). These increases will make future mitigation efforts much more difficult and costly.

While reducing uncertainty is important, we must also focus on achieving substantial emissions reductions and adapting to climate change.

Low-Carbon Technology Development

The Administration’s more substantive R&D initiatives, such as Hydrogen Fuels and FutureGen (clean coal) are relatively modest investments in technologies that are decades away from deployment. We need a far more vigorous effort to promote energy efficient technologies; to prepare for the hydrogen economy; to develop affordable carbon capture and sequestration technologies; and to spur the growth of renewable energy, biofuels, and coal-bed methane capture.

Equally important, we need to encourage public and private investment in a wide-ranging portfolio of low-carbon technologies. Despite the availability of such technologies for energy, transportation, and manufacturing, there is little motivation for industry to use them. Widespread use of new technology is most likely when there are clear and consistent policy signals from the government (4).

One-fifth of U.S. emissions comes from cars and trucks (5). The Administration’s targets to improve fuel economy for light trucks and “sports utility” vehicles (SUVs) by 1.5 miles per gallon over the next three model years fall far short of what is already possible. California is setting much more ambitious emission standards for cars and light trucks. Current efficiency standards can be improved by 12% for subcompacts to 27% for larger cars without compromising performance (5).Hybrid vehicles can already achieve twice the fuel efficiency of the average car.

About one-third of U.S. emissions results from generating energy for buildings (6). Policies that increase energy efficiency using building codes, appliance efficiency standards, tax incentives, product efficiency labeling, and Energy Star programs, can significantly reduce emissions and operating costs. Policies that promote renewable energy can reduce emissions and spur innovation.Sixteen states have renewable energy mandates (7).

The Power of the Marketplace

Policies that are market driven can help achieve environmental targets cost-effectively. A sustained price signal, through a cap-and-trade program, was identified as the most effective policy driver by a group of leaders from state and local governments, industry, and nongovernmental organizations (NGOs) (8).

Senators Lieberman (D–CT) and McCain’s (R–AZ) 2003 Climate Stewardship Act proposes a market-based approach to cap GHG emissions at 2000 levels by 2010. The bill, opposed by the Administration, garnered the support of 44 Senators. Nine Northeastern states are developing a regional “cap-and-trade” initiative to reduce power plant emissions. An important first step would be mandatory GHG emissions reporting.

Adapting to Climate Change

An important issue that Secretary Abraham failed to address is the need for anticipating and adapting to the climate change we are already facing. Economic sectors with long-lived investments, such as water resources, coastal resources, and energy may have difficulty adapting (9). A proactive approach to adaptation could limit the severity and costs of the impacts of climate change.

By limiting emissions and promoting technological change, the United States could put itself on a path to a low-carbon future by 2050, cost-effectively. Achieving this will require a much more explicit and comprehensive national commitment than we have seen to date. The rest of the developed world, including Japan and the European Union, is already setting emission-reduction targets and enacting carbon-trading schemes. Far from “leading the way” on climate change at home and around the world, as Secretary Abraham suggested, the United States has fallen behind.

References and Notes

1. S. Abraham, Science 305, 616 (2004). |
2. R. T. Wetherald, R. J. Stouffer, K. W. Dixon, Geophys. Res. Lett. 28, 1535 (2001).
3. “Analysis of President Bush’s climate change plan” (Pew Center on Global Climate Change,Arlington,VA, February 2002); available at www.c2es.org.
4. J. Alic, D. Mowery, E. Rubin, “U.S. technology and innovation policies: Lessons for climate change” (Pew Center on Global Climate Change,Arlington,VA, 2003).
5. National Research Council, “The effectiveness and impact of corporate average fuel economy (CAFÉ) standards” (National Academies Press, Washington, DC, 2002).
6. “U.S. greenhouse gas emissions and sinks: 1990–2002”(EPA/430-R-04-003, Environmental Protection Agency, Washington, DC, 2002), Table 3–6.2002.
7. Workshop proceedings, “The 10-50 solution: Technologies and policies for a low-carbon future,”Washington, DC, 25 and 26 March 2004 (The Pew Center on Global Climate Change and the National Commission on Energy Policy, Arlington,VA, in press).
8. J. Smith, “A synthesis of potential climate change impacts on the United States” (Pew Center on Global Climate Change, Arlington,VA, 2004). Published by AAAS

by Eileen Claussen, President— Appeared in Science, October 29, 2004
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Climate Change: The Political Challenges

CLIMATE CHANGE: THE POLITICAL CHALLENGES

Remarks of Eileen Claussen
President, Pew Center on Global Climate Change

Stanford University Sustainability Days Conference

October 15, 2004

Thank you Jim for that very kind introduction.  Let me begin by thanking the organizers of this conference.  As most of you did, I watched the presidential debates, and I want to tell you how pleased I am that you did not install any blinking-light system on this podium that might force me to babble on and keep repeating myself to fill my allotted time.  

I am going to talk about the politics of climate change—and, more specifically, about the continuing political struggle over this issue.  But I also want to suggest a way to begin to resolve this struggle by taking a fresh look and by framing an agenda that can attract broad support.

But first the struggle itself.  At the core, I believe it is a struggle between the old and the new, between those who want to put off taking action for as long as possible and those who believe we need to act decisively - now.   It is, in essence, a struggle between the past and the future. 

But unlike others of this kind, I believe the climate struggle is unique because the stakes are enormously high.  Here we are talking about what kind of world we leave for future generations, and whether we can avoid environmental impacts that could potentially be catastrophic.  It is a struggle in which we must succeed, and to do so we face the political challenge of finding solutions that can receive the backing of many of the people who are currently on the side of the past. 

As I see it, the opponents of action on climate change fall into two camps.  In one camp are the ideologues.  These are people with a knee-jerk negative reaction to any kind of environmental regulation—or, for that matter, any kind of government regulation.  They are also people who never met an international treaty or institution that they felt was worthy of U.S. support – apart, perhaps, from the International House of Pancakes.  Getting this group to support U.S. action on climate change and/or U.S. participation in any kind of national or global response to this issue is, in short, a lost cause.

More promising are those in the other camp of climate holdouts – the people who perceive that their economic or political interests would be threatened if we were to address this issue in a substantive way.  This camp includes representatives of what I like to call “old industry”—companies and industry sectors whose profits are wrapped up in the status quo.  Both of these groups also include elected leaders—whether in the White House or in Congress—who receive support from them or who are them.   

In the political struggle over climate change, these two camps are up against a group that believes we need to take this issue seriously and move forward.  Many in this group are alarmed about the science and the implications of a warming world, but also perceive real opportunities—both for individual companies and for our nation as a whole—in developing, selling, and using the new technologies that will protect the global climate. 

Past vs. future.  Status quo vs. change.  Profits today vs. new opportunities and a safer world in the days and years to come. 

Where does this struggle stand today?  Well, in the United States at least, the do-nothing crowd have had several historic victories.   The first of these occurred in 1997, when a group of U.S. business interests determined that the international climate negotiations were a threat to their livelihoods and profits. 

It was a time when the nations of the world were entering a final phase in their negotiations over an agreement to limit worldwide greenhouse gas emissions.  And these businesses did not like it one bit. So what did they do?  They launched an enormous advertising campaign, as well as an intense lobbying effort on Capitol Hill.  And, in June 1997, their efforts bore fruit in the form of a Senate resolution known as Byrd-Hagel, a resolution that passed by 95 to 0.  This resolution stated that the United States should not agree to any binding commitments to reduce emissions unless developing countries also agreed to specific commitments, nor should it agree to anything that might harm the economy of the United States.

Obviously, this was a shot across the bow as the United States prepared to participate in the international negotiations that year in Kyoto, Japan.  And, even though the Clinton administration went ahead and negotiated and signed the Kyoto Protocol, the White House never submitted it to the Senate for ratification. In fact, they barely discussed it. Why not? 

Because the Protocol excluded developing nations from any new commitments, and because the Administration could not make a convincing case that there would be no serious economic harm to the United States.  But electoral politics also reinforced this view.  The Clinton Administration did not oppose Byrd-Hagel, and did not work with Congress to garner any support for what it had negotiated.  Negotiating and signing Kyoto was simply a gesture without meaning, a way to show that the difficulties the U.S. experienced in  Rio would not be repeated.  A way to say we did something without really doing anything.  And a way, perhaps, to get elected.

At the same time that the events I have just described were playing out at the national and international levels, a number of brave U.S. business leaders were coming together to acknowledge that, yes, climate change is a problem and that it is in the United States’ interest to do something about it. 

When the Pew Center on Global Climate Change initially announced the formation of our Business Environmental Leadership Council, the council had 13 members.  Today, we have 38.  This is a group that includes everyone from Alcoa, BP and DuPont to IBM, Pacific Gas & Electric and Toyota.  And it has served as an effective foil to the notion that business is universally opposed to forward progress on this issue. 

In the year 2000, the struggle between the forces of change and the forces of the status quo appeared to reach a turning point.  During his run for President that year, then-Governor George W. Bush actually pledged to impose the first-ever restrictions on carbon dioxide emissions in the United States. 

This commitment was not made, as you might expect, in response to the demands of environmentalists but in response to industry.  A group of major power companies had come up with the idea that they would agree to CO2 restrictions if the government would provide some certainty in its regulation of three air pollutants: sulfur dioxide, nitrogen oxides and mercury. 

However, as the President put it when discussing his opponent in the current election about another issue, he was in favor of this idea before he was against it. 

Not long after the inauguration in January 2001, the President reneged on his campaign pledge to regulate carbon dioxide emissions.  For good measure, the Administration also unceremoniously noted that the United States was withdrawing from the Kyoto process.  According to the White House statement, the treaty was dead. 

Why did the President do this?  Well, by now it’s obvious that he was choosing sides in the struggle between the past and the future.  And he was siding with the past.  He was listening to the ideologues and the representatives of old industry, many of whom had supported him in his campaign for the Presidency. 

Ask anyone in this administration for an honest opinion on the issue, and they will tell you that restrictions on carbon emissions in this country are inevitable.  But the goal of the White House and its allies is to put off that day for as long as it is politically possible to do so. 

And so the struggle continues.  But in the wake of the White House decisions on CO2 and Kyoto—and, in many instances, because of these decisions—the side of the struggle calling for change and substantive action has become stronger. 

At the international level, for example, where the Bush administration’s rejection of Kyoto was seen as a real slap in the face, countries rallied around the Protocol in an act of defiance.  And today you have 120 countries signed onto the agreement; its entry into force awaits Russia’s ratification, which is now likely before the end of the year. 

Kyoto may not amount to much in terms of achieving significant reductions in global emissions, but it sends the clearest signal yet that much of the world is on the side of doing something about this problem.  Much of the world, with the notable exception of the United States, is on the side of the future. 

So you have the European Union adopting a carbon dioxide emission trading program.  And you have British Prime Minister Tony Blair showing enormous political will both in putting forward a serious plan to substantially reduce emissions, and in his insistence that climate change will be one of two “big” issues that he hopes to address as the Chair of the G-8 process and the European Union in 2005.   

And it is not just internationally where the advocates of real action are achieving progress in this struggle.  In the United States Senate, we have a bipartisan core of elected leaders who are committed to climate solutions.    

The energy bill passed by the Senate in 2002 and again in 2003 would have established a national climate change strategy and required the largest greenhouse gas emitters to disclose their emissions.  The Senate’s 2002 farm bill, meanwhile, would have  compensated farmers for sequestering carbon.  And, perhaps most importantly, in October 2003, 44 Senators supported the Lieberman-McCain bill, legislation that would for the first time establish modest but binding targets for reducing U.S. greenhouse gas emissions.  This is bipartisan legislation, the first bill to be voted on that would actually reduce greenhouse gas emissions, and its support by a significant number of senators marks an important milestone in this nation’s awakening to the problem of climate change. 

Unfortunately, it takes both chambers of Congress to enact a law, and the House of Representatives is still stuck in the past.  However, even there we are beginning to see some activity: a House companion to Lieberman-McCain, was introduced recently and it currently has 81 cosponsors, 12 of whom are Republicans.

Looking outside of Washington, we see that the forces of change have found new allies in this struggle in state capitals around the country.  Particularly in coastal states, policymakers are justifiably concerned about the toll of climate change on their economies.  Western states are concerned about the prospects of worsening drought.  And, many states plainly see economic opportunities in efforts to address climate change: by producing and selling alternative fuels, becoming exporters of renewable energy, attracting high-tech businesses, or even selling carbon emission reduction credits.

What are states doing to address climate change?  Well, right here in California, your governor recently endorsed proposed regulations requiring a 30-percent reduction in carbon dioxide emissions from motor vehicles sold in the state by 2015.  If the California initiative moves forward—and, survives almost certain legal challenges, I see no reason to think it will not—it promises to pave the way for action by other states.  And, I was pleased to hear that your governor and the governors of Washington and Oregon are discussing additional measures to limit ghg emissions regionally and cost-effectively.

In the Northeast, 9 governors, led by New York Governor George Pataki, are developing a multi-state regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants.    This effort is proceeding well, and we expect them to complete their work, as planned by April of next year, with agreement on a model rule. 
 
These state initiatives are an important development not only because they can help pave the way for federal action but also because of the simple fact that U.S. states are large emitters of greenhouse gases.  California’s emissions, for example, exceed those of Brazil.  Ohio’s emissions exceed those of Turkey and Taiwan, and emissions in Illinois exceed those from The Netherlands. 

The struggle between the past and the present is being played out in the businesses community as well.   Many of the companies we work with at the Pew Center are adopting voluntary targets for reducing their greenhouse gas emissions. Consider Dupont, which set a target to reduce its emissions 65 percent below 1990 levels before 2010, and by 2002 had actually reduced their emissions by a stunning 67 percent. I could tell you (but I won’t) about how a lot of other companies are doing similar things.  But I will tell you this – all the companies cite one important motivation for taking on a target - to improve their competitive position in the marketplace.  The bottom line is that increasing numbers of business leaders understand that climate change is a problem, and they are committing their companies to real solutions—even in the absence of U.S. policies. 

What else motivates these companies?  Well, for one thing, many of them are multinational companies.  They have operations in countries that are party to the Kyoto Protocol and that are implementing new regulations and new policies to limit greenhouse gas emissions.  Some may be reluctant to come out in support of tougher policies and regulations in the United States, but these companies understand the science, they see that regulation is inevitable, and in many cases they view the drive for climate solutions as a business opportunity.   

But, of course, voluntary action by selected companies is not enough.  Nor will a state-by-state approach alone get us to where we need to be.  And while a lot of countries are indeed moving forward, the Kyoto Protocol is a baby step at best.  This is where we  stand today.  The past meets the future.  The forces for change are fighting a good fight and gaining ground, but it is clearly not enough.  

This suggests to me that we need to approach this issue in a new way.  We need to confront the political challenges we face head-on, with facts and figures, and, most importantly, with an agenda that can gain broader support. 

I would propose that, in both our global and our national efforts, we need four distinct and complementary approaches. 

The first is one with which we are already familiar: targets and trading.  This is one thing the framers of the Kyoto Protocol got right, ironically at the insistence of the U.S.  By harnessing the power of markets, we can reduce emissions more effectively and more affordably.  Inspired by Kyoto, the European Union is on the verge of launching the broadest emissions trading system ever established. 

It will likely be some time before we establish an economy-wide cap-and-trade system here in the United States—the politics simply aren’t yet ripe.  But what might be possible is a series of interlinked trading systems – the east coast with Europe and perhaps with Canada and the west coast as well. Such a “bottom-up” system could be robust enough both to achieve some environmental benefit and keep costs down.  And it would be a valuable learning experience for both sides on this issue, hopefully one that would show that taking action on this issue is both practical and affordable. 

Secondly, I think it is critical that we begin to think in terms of key sectors.  Both globally and nationally, two of the largest and fastest-growing sources of emissions are transportation and power.  And it is in these sectors that we have many of those who would like to put off action as long as possible.  Let’s look first at transportation.  The automobile industry is global, and it is highly concentrated.  The 10 largest manufacturers account for 74% percent of the global market.  The vast majority of cars are produced – and used – in a relatively small number of countries.  Major fuel producers are also relatively small in number. 

What if we could get all these key players in a room to agree on a pathway toward a goal of zero emissions from autos in 30-50 years, with some clear milestones along the way?  This is not a proposal to dictate specific technologies – each major manufacturer seems to be going down a different technology path – but a way to set globally consistent performance standards with an end-result that we need if we are to be successful in out effort to address climate change. And at the same time, we could launch an intensive public-private R&D program to help deliver the technologies that will make it possible. 

No, it wouldn’t be easy, and it will be opposed by many who would argue that it is simply too hard.  But is it easier, or smarter, to tackle the problem nation by nation, or state by state? At the moment, there are different auto efficiency or CO2 emission standards or goals in the United States, Canada, Europe, Australia, Japan, China, Korea, and Taiwan.  We also have the proposal from California that, if it goes into effect, will doubtless be followed by other states.  Added to that we have $52 per barrel of oil.  I wonder if the time isn’t close for the private sector to decide that a rational, long-term effort, in which they are “at the table” and can help set the milestones, might not be better than the alternative.  

The power sector, equally important, is very different.  Power supplies are much more distributed -- there are hundreds, if not thousands of players (far too many to put into a room, let alone around a table), and there are many different ways to generate power.  So here we might focus on selected energy sources, the most important of which, both politically and in terms of emissions contribution, is coal.  There is no denying that coal will figure heavily in our energy future.  It is globally available and it is cheap.  Virtually all the new power plants being planned here in the United States will burn coal.  China is projected to add as much as 300 gigawatts of generating capacity over the next 10 years, nearly all of it coal. 

How then do we continue to provide power but minimize the impact on the climate?  How do we shift investment away from traditional coal plants to newer technologies that will be compatible with the efforts underway to capture CO2 emissions and sequester them deep in the ground? Here, too, I think we need a combination: a global R&D effort, and a clear set of mandates to pull new and better technologies into the market.  Many in the coal industry are beginning to see the need for a more proactive strategy, and if they can be assured a place in the future, they may begin to give up the technologies of the past.  

A third kind of strategy we need is one that integrates climate and development.  We cannot expect developing countries to become full partners in the climate effort if it continues to be seen as a purely environmental issue, a constraint on economic growth and development.  Frankly, this is true in developed countries as well.  We need policies that speak both to climate and to core development priorities.  The place to start, I would suggest, is with national energy policies.  Each nation needs to accept that climate change must be one of the drivers of energy policy. 

Here, I think the British are way ahead of most of the rest of the world.  For them, energy policy has three drivers: security of supply, price and climate change, and they have developed an energy blueprint for a 50 year time period that attempts to accommodate all three.  There is no reason why other countries cannot also move forward in this way, and should they do so, I believe we will  begin to see a genuine effort to limit emissions while meeting the energy needs of a growing global economy. 

Finally, because some degree of climate change is now unavoidable, responsible climate policy must also help us to adapt. Climate change is happening, and it is going to accelerate in the years ahead, no matter what we do.  We can minimize its effects, but at the same time we will need to adapt.  Taking a proactive approach is necessary for minimizing future costs. That includes thinking about everything from development patterns and zoning to water systems in a new way.    It is not too soon for governments at all levels and the private sector to begin incorporating climate change risks into everyday investment decisions.   
   
The bottom line is that climate change is not simply an environmental issue; it is fundamentally an issue of economics and development.  And this is why I believe we must succeed in marrying the old and the new:  because we need both sides to succeed.  Those that now perceive that their economic or political interests are threatened are the ones that can ultimately drive this issue, once they see that their interests will also be served by shaping and implementing climate solutions.

But how do we manage this?  To build the coalitions we need, we will have to depend on  a variety of factors: public awareness, media attention, elections, and even the weather.  But we will also have to create approaches that can attract broad constituencies, that can invite people, businesses, governments – everybody – to play a part in this effort, and that can treat everyone fairly and with respect.  And, finally and most importantly, we will need strong political leadership to pull it off. 
 
Are we there yet?  No, but I believe we are making some headway.  Some political leaders are beginning to emerge on this issue, and there is great experimentation with different policy approaches.  We will get closer still as people begin to understand that this is about more than climatology and atmospheric levels of CO2.  This is about all of us, and the choices we make:  the cars we drive, the representatives we elect.  It is a about the future we choose, and the legacy we leave to our children and grandchildren.  Choose well. 

And thank you very much.

Press Release: New Report Examines How Cimate Policies Affect the Cost of Greenhouse Gas Mitigation

For Immediate Release: 
October 13, 2004     

Contact:
Katie Mandes 703-516-4146        

CLIMATE POLICY AND TECHNOLOGICAL CHANGE

New Report Examines How Cimate Policies Affect the Cost of Greenhouse Gas Mitigation

Washington, DC — With Russian ratification of the Kyoto Protocol now likely, the development and deployment of technologies to reduce global emissions is more critical than ever. While technological change occurs naturally as companies compete in the marketplace, climate policies can spur additional or “induced” technological change (ITC).

Induced Technological Change and Climate Policy, by Larry Goulder of Stanford University, explores the use of ITC in climate policy, using state-of-the-art economic modeling and analysis. Goulder finds that models that include ITC produce lower cost estimates for GHG reductions, and that costs are lowest when climate policies are announced in advance.  Furthermore, he finds that to reduce greenhouse gas emissions most cost-effectively, both policies that boost technological innovation, such as R&D funding, and policies that limit emissions, such as a GHG cap-and-trade program, are required.

“This research shows us that the costs of meeting a long-term CO2 emissions target using both R&D subsidies and a carbon tax (or cap-and-trade) is roughly 10 times less than with R&D subsidies alone,” said Eileen Claussen, President of the Pew Center on Global Climate Change.

A crucial point is that although studies show different implications of ITC on the overall timing of climate policy, all find that some abatement must begin now in order to jumpstart the critical process of technological change.  “Timing is crucial for dealing with this issue in a cost-effective manner; the longer we wait, the more expensive it will be,” said the Pew Center’s Claussen.

The full text of this and other Pew Center reports is available at http://www.c2es.org.  


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The Pew Center was established in May 1998 by The Pew Charitable Trusts, one of the United States’ largest philanthropies and an influential voice in efforts to improve the quality of the environment.  The Pew Center is an independent, nonprofit, and non-partisan organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change.  The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

U.S. Climate Policy: Toward a Sensible Center

Promoted in Energy Efficiency section: 
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The Brookings Institution and the Pew Center on Global Climate Change offer this archived webcast of U.S. Climate Policy: Toward A Sensible Center, a major conference that brought together senators, CEOs, top federal and state officials, and other prominent leaders to debate the future of U.S. policy on climate change
BrookingsLogoJpeg

U.S. CLIMATE POLICY:
TOWARD A SENSIBLE CENTER
June 24-25, 2004
Washington D.C.

Pew Center

WEBCASTS AND TRANSCRIPTS (in PDF)

THURSDAY JUNE 24, 2004 (full transcript)

Welcome
Strobe Talbott
, President, The Brookings Institution (webcast/transcript)

Introduction
Eileen Claussen
, President, Pew Center on Global Climate Change
(webcast/transcript)

Science, Security, and Economics
Moderator: David Sandalow, Environment Scholar, The Brookings
Institution
Donald Kennedy, Editor in Chief, Science (webcast/transcript)
R. James Woolsey, Vice President, Booz Allen Hamilton (webcast/transcript)
C. Fred Bergsten, Director, Institute for International Economics
(webcast/transcript)
Question and Answer Session (webcast/transcript)

Climate Change: The Policy Challenge
Joseph I. Lieberman, United States Senate (webcast/transcript)

Technology Solutions
Spencer Abraham, Secretary, Department of Energy (webcast/transcript)
Michael Morris, Chairman, President, and CEO, American Electric Power
(webcast/transcript)
Larry Schweiger, President and CEO, National Wildlife Federation
(webcast/transcript)

Roundtable: Action by States and Business (webcast/transcript)
Moderator: Sally Ericsson, Director of Outreach, Pew Center on Global Climate
Change
Jo Cooper, Vice President for Government Relations, Toyota
Douglas Foy, Secretary of Commonwealth Development, Massachusetts
Chris Mottershead, Distinguished Advisor BP
Stephanie Timmermeyer, Secretary of Department of Environmental Protection,
West Virginia

Domestic Climate Policy
Eileen Claussen, President, Pew Center
John Rowe, Chairman and CEO, Exelon Corporation (webcast/transcript)
John McCain, United States Senate (webcast/transcript)
Question and Answer Session (webcast/transcript)


FRIDAY JUNE 25, 2004 (full transcript)

Domestic Climate Policy (Cont.)
James Connaughton, Chairman, White House Council on Environmental Quality
(webcast/transcript)
Wayne Gilchrest, U.S. House of Representatives (webcast/transcript)

International Climate Action
Stephen Timms, Energy Minister, United Kingdom (webcast/transcript)
Elliot Diringer, Director of International Strategies, Pew Center on Global Climate
Change (webcast/transcript)
Nigel Purvis, Brookings Scholar on Environment, Development and Global Issues,
The Brookings Institution (webcast/transcript)
James Wolfensohn, President, The World Bank Group (webcast/transcript)

Closing Remarks (webcast/transcript)

Press Release: Coping with Climate Change: The Role of Adaptation in the United States

For Immediate Release:
June 15, 2004
                                                             
Contact:  Katie Mandes
703.516.0606 

Adapting to Global Climate Change
New Report Discusses the Ability of the United States to Adapt

Washington, DC — The mainstream scientific community agrees that the earth is warming, the warming is caused primarily by the build-up of greenhouse gases in the atmosphere, and that the warming will continue if we don’t reduce emissions of greenhouse gases. But even if extreme measures could be taken immediately to curtail emissions, the momentum of the earth’s atmosphere is such that the earth will continue to warm for many years to come.

"Unfortunately, we’re already past the point where climate change can be prevented entirely," said Eileen Claussen, President of the Pew Center on Global Climate Change. “Now we need a two-pronged approach that combines reductions in greenhouse gas emissions with policies that will help us adapt to the climate change that is going to occur.”

A new Pew Center report, Coping with Global Climate Change: The Role of Adaptation in the United States, by William Easterling of Pennsylvania State University, Brian Hurd of New Mexico State University, and Joel Smith of Stratus Consulting Inc., discusses the importance of adapting to climate change, the options available for adaptation, and the challenges of implementing them in the United States.

Adaptation will not be an easy or cost-free process, according to the report. Despite the challenges, however, the capacity of the U.S. economy to adapt to climate change is high, because of the broad range of resources (including wealth, technology and information) that can be directed at the problem.

“But the longer we delay," cautioned Claussen,  "the greater the cost will be.”

Even if the country as a whole adapts well, individual regions and communities may still face damages and disruption, and the more quickly the climate changes, the more difficult and costly adaptation will be.  Other regions of the world, particularly developing countries that lack the tools and resources for adaptation are even more vulnerable to the adverse impacts of climate change.

Finally, natural ecosystems, such as coral reefs and coastal wetlands, are facing dire consequences if the climate changes at the rates and magnitude currently predicted. Existing stresses, including habitat loss and pollution, have already weakened the ability of species to adapt by reducing resilience and introducing barriers to migration.  

The report highlights the importance of anticipating the impacts of climate change rather than simply reacting to challenges as they occur.  Making climate-conscious decisions now while designing and investing in long-lived infrastructures, such as water management, transportation and health care systems, will help the United States adapt to climate change later. Government policies can promote the development and adoption of strategies and technologies for adaptation through research, information sharing and institutional reform.

“Reducing greenhouse gas emissions is critical, but that alone will not be enough to protect the United States from climate change,” said Claussen.  “There are actions we can take now that will reduce the severity of some of its worst effects.”

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The Pew Center was established in May 1998 by The Pew Charitable Trusts, one of the United States’ largest philanthropies and an influential voice in efforts to improve the quality of the environment.  The Pew Center is an independent, nonprofit, and non-partisan organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change.  The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

Assessment of new EIA Analysis of Amended Climate Stewardship Act

The Center's Assessment of EIA’s Analysis of the Amended (SA.2028) Lieberman-McCain Climate Stewardship Act (S.139)

On June 8, 2004, EIA released its economic analysis of SA.2028, the amended version of S.139: the Climate Stewardship Act introduced by Senators John McCain and Joseph Lieberman. (See evaluation of the original bill.) This amended version, which would hold U.S. greenhouse gas (GHG) emissions at year 2000 levels by 2010, was considered by the U.S. Senate in October 2003. For more information, see Summary of Act.

The original EIA analysis of S.139 was undertaken at the request of Sen. James M. Inhofe (R-OK), with additional analyses requested by the bill’s sponsors. This recent release – additional work analyzing the amended bill (SA.2028) – follows a request from Sen. Mary Landrieu (D-LA). A separate analysis of SA.2028 was previously released by researchers at the Massachusetts Institute of Technology. See our Summary of MIT’s Analysis.

The Center has examined EIA’s analysis of SA.2028 and finds it to be consistent with its earlier approach. However, it is still primarily driven by the underlying key assumptions that result in unrealistically high cost projections.

These key underlying assumptions are:

1. High growth of emissions in the baseline case: The high baseline case is the single most important element in explaining EIA’s high cost projections. EIA’s baseline case assumes high growth in:

  • petroleum use in transport: +46% by 2025;
  • coal-fired electricity generation: +35% by 2025; and
  • the non-CO2 greenhouse gases (GHG), including a 440% increase in emissions of industrial high-GWP gases (HFCs, PFCs, and SF6) by 2025 despite a production slow-down in recent years and considerable uncertainty over future industry-specific trends.

Furthermore, EIA assumes no relevant policies will be enacted over the next twenty years:

  • there will be no further federal or state requirements for criteria air pollutants, and therefore less incentive to rely on cleaner fuels and technologies – even though, for example, President Bush has proposed tougher standards for powerplants through the Clear Skies Act;
  • natural gas prices will remain very high despite proposed policies to increase supply;
  • individual states will do nothing to address GHG emissions – even though the northeastern states are actively developing a program to impose CO2 caps on their powerplants, California is about to impose CO2 tailpipe standards, additional states are developing renewable portfolio standards, and other states are considering similar initiatives; and
  • the federal government will do nothing to address climate change – it will not even implement President Bush’s voluntary GHG intensity reduction target or technology programs.

EIA’s assumptions result in an high baseline case which widens the apparent gap that must be closed to comply with SA 2028, and thereby increases EIA’s cost projection.

2. Limited opportunities to increase efficiency and reduce consumption: EIA still assumes that covered entities in the transportation, building and industrial sectors will do very little to increase their efficiency or reduce consumption under SA 2028. For example, EIA forecasts only a very modest increase in automobile efficiency, from 26.4 mpg to 27.2 mpg by 2025. These assumptions are made despite the fact that the GHG cap-and-trade program established by SA 2028 would create a sustained price signal, which should spur technology improvements, and the diffusion of these technologies into the marketplace.

3. Limited opportunities to reduce non-CO2 GHG emissions: EIA still assumes there are limited opportunities for covered entities to reduce their emissions of the non-CO2 GHGs (methane [CH4], nitrous oxide [N2O], and the industrial high GWP gases [HFCs, PFCs, SF6]). Under this assumption, EIA projects that overall emissions of non-CO2 GHGs from covered sectors would actually increase by around 70% under SA 2028 (note that EIA projects an increase of 230% in the baseline case). In contrast, the MIT analysis (see below) finds that overall non-CO2 GHG emissions would be reduced by around 45%. Particular examples that the MIT model finds for cost-effective reduction opportunities in the non-CO2 GHGs include the industrial high-GWP GHGs (HFCs, PFCs, and SF6) in the semiconductor, magnesium and aluminum sectors, and reducing methane emissions from coal and oil production facilities, landfills and natural gas pipelines.

4. Limited available offsets: EIA assumes that there is only a limited amount of cost-effective offsets available. For example, on domestic sequestration, EIA projects only 112 MTC at under $100/TC will be available; however, a forthcoming report from the Center by Robert Stavins of Harvard University indicates an availability of 300 MTC at under $50/TC. EIA also takes a restrictive view of available international offsets, assuming that trading will only take place with the EU-15 through 2025. This ignores the fact that access to mitigation opportunities in other developed countries and, particularly, in developing countries would greatly increase the supply of inexpensive international credits.

5. Tight natural gas supply: EIA still assumes a very tight supply of natural gas. This assumption would limit one key option for a smooth transition away from highly carbon intensive energy use. However, as shown by EIA’s own evaluation of past reference cases, natural gas has been the fuel with the least accurate forecasts of production, consumption and prices.

 

Pathway towards emissions reductions

Because EIA assumes limited availability of cost-effective efficiency improvements and limited reduction opportunities for non-CO2 gases, the great majority (88%) of required emissions reductions would come from fuel switching in the electricity sector. As any sizeable transition to natural gas would be limited according to EIA’s predicted tight supply, the EIA model predicts the electricity sector would comply by using expensive renewable and nuclear technologies together with premature retirement of some existing coal plants. Such a large-scale and unplanned shift of capital assets would be expensive. This overall story is the same for the amended SA.2028 as for the original S.139 bill, with the only real change from the relaxed cap being a lower requirement for new nuclear units and some greater retention of existing coal plants (in 2010 coal use is up 7% from 2001 levels, falling to 79% of current levels by 2020).

In addition, EIA's analysis is very conservative in its assumptions regarding the diffusion of those high efficiency technologies that already exist. Among other things, EIA assumes there will be less use of combined heat and power and distributed generation technologies under SA 2028 than in the baseline case. EIA is also pessimistic on the market penetration of new technologies – assuming, for example, that by 2025 no hydrogen and no coal-fired IGCC with sequestration plants would be operational despite these being principal objectives of federal energy R&D.

The actual experience of companies on the Center’s Business Environmental Leadership Council that have elected to take on a GHG reduction target is that low-cost, or cost-saving opportunities are often available – even for much more ambitious targets than proposed in the bill. For example, BP set a target of reducing GHG emissions by 10% from 1990 levels by 2010. By instituting an emissions trading program, BP met its target 8 years ahead of time and achieved $650 million of savings over three years for an estimated outlay of $20 million. DuPont has met its target to reduce GHG emissions by 65% between 1990 and 2010 and managed to use 9% less total energy in 2002 than it did in 1990, despite an almost 30% increase in production. Compared to a linear increase in energy with production, this achievement resulted in $2 billion in cumulative energy savings. EIA’s model shares the weakness of many computable general equilibrium (CGE) or “top-down” economic models – it tends not to recognize these opportunities and, as a result, overstates projected costs.

 

Comparison with MIT Analysis

MIT developed two cases that focused on Phase 1 reductions as entailed in SA 2028. However, the first case is actually a CO2-only case. This is much less flexible than SA 2028, but the model still projects the same allowance prices as EIA. (Both studies estimate an allowance price of $125/TC [$34/TCO2] in 2020.) The second MIT case assumes unlimited non-CO2 credits in 2020. (Here MIT projects allowance costs much lower than EIA’s, at $52/TC [$14/TCO2] in 2020.) The MIT analysis allows use of all available cost-effective non-CO2 GHG emission reductions.

In contrast to EIA’s emissions reduction pathway through fuel switching, in the MIT analysis, greater efficiency and reductions in non-CO2 GHGs lead to far less pressure on the electricity sector. With these assumptions, MIT predicts a reduction in natural gas prices compared to the baseline case, and coal use remaining stable at current levels.

Translating these emission reduction pathways to the wider U.S. economy, a fundamental point is that for a similar allowance price, EIA projects macro-economic impacts of 0.22% of GDP, while MIT finds a consumer welfare loss of only 0.02% by 2020. Consumer welfare in this case measures lost consumption (or income) by consumers (as leisure effects are not included), and consumption is the major component of GDP (the other components being investment, government expenditures and imports/exports balance). Consumer welfare is a good measure of the actual impact on the population.

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