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Press Relase: Corporate and Government Leaders Focus On Global Climate Change At Washington Conference

For Immediate Release:
April 12, 2000

Contact: Kelly Sullivan, 202-289-5900
             Katie Mandes, 703-516-4146

Corporate and Government Leaders Focus On Global Climate Change At Washington Conference

Developing Country Perspectives Roundtable To Conclude The Conference

WASHINGTON, D.C. — Senior decision-makers and leaders will gather on April 25th and 26th in Washington, D.C. to participate in the "Innovative Policy Solutions to Global Climate Change" Conference. The international conference will discuss the proactive initiatives governments and the private sector are implementing in industrialized countries and key questions related to program design and implementation.

The Pew Center on Global Climate Change and the Chatham House/Royal Institute of International Affairs will host the conference at the Willard Inter-Continental Washington Hotel. Featured speakers are:

  • John Prescott, Deputy Prime Minister, United Kingdom
  • Jan Pronk, Minister of Housing, Spatial Planning and the Environment, The Netherlands
  • Robert Hill, Minister for the Environment and Heritage, Australia
  • Theodore Roosevelt, IV, Managing Director, Lehman Brothers, Inc.
  • Rodney Chase, Deputy Group Chief Executive, BP Amoco


Governments and the private sector are beginning to address the climate change challenge because they recognize that the problem and its consequences cannot be ignored. The conference will highlight the measures that are being implemented to address global climate change," said Eileen Claussen, President of the Pew Center on Global Climate Change. She will deliver the opening and closing remarks at the conference.

The conference also includes various discussion panels on the climate change problems. State and local policies to help alleviate climate change, energy and transportation policies, and competitiveness and trade effects on climate change are among the topics the international gathering will address.

The conference will conclude with a Roundtable Discussion, co-sponsored by the Pew Center and the Shell Foundation Sustainable Energy Programme. The Developing Country Perspectives on climate change discussion will be chaired by Bakary Kante of the United Nations Environment Programme and will feature Luiz Gylvan Meira Filho, Espen Ronneberg and other distinguished individuals from various developing countries. There is no fee to register for the Roundtable.

The Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the nation's largest philanthropies and an influential voice in efforts to improve the quality of the U.S. environment. The Pew Center is conducting studies, launching public education efforts, promoting climate change solutions globally and working with businesses to develop marketplace solutions to reduce greenhouse gases. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

The Pew Center includes the Business Environmental Leadership Council, which is composed of 21 major, largely Fortune 500 corporations working with the Center to address issues related to climate change. The companies do not contribute financially to the Center, which is solely supported by charitable foundations.

For more information on the Innovative Policy Solutions conference, the Developing Country Perspectives Roundtable, or on the Pew Center on Global Climate Change, please visit the Center's web site at www.c2es.org.

Address by Eileen Claussen at Commonwealth Club

Address by Eileen Claussen President
Pew Center on Global Climate Change

Commonwealth Club
San Francisco, CA

February 23, 2000

Thank you very much. It is a pleasure to be here. While I know this is really a speech on global warming, you will find that I have drawn some of my inspiration from Alice in Wonderland. And so I would like to start with a quote that I believe really sets the stage for my remarks, where Alice asks the Cheshire Cat "Would you tell me, please, which way I ought to go from here?" "That depends a good deal on where you want to get to," said the Cat. "I don't much care where---" said Alice. "Then it doesn't matter which way you go," said the Cat. "---so long as I get somewhere," Alice added as an explanation. "Oh, you're sure to do that," said the Cat, "if only you walk long enough."

I bring up this quotation because I believe that, on the issue of global climate change, it is truly important to get somewhere, and walking long enough is clearly not the answer. What I want to do today is to reach through the looking glass and pull the issue of global climate change out of the wonderland where it too often resides. And I want to paint a picture for you of exactly where things stand in the global effort to meet what may be the most important challenge of the 21st century.

I want to talk to you first about the science of global climate change. I also want to talk about how the growing scientific consensus around this issue is forcing many countries around the world to pay attention and to do something—both unilaterally and by continuing their work on an international treaty designed to reduce global greenhouse gas emissions. In addition, I want to talk about the United States and what we as a nation are—or, more precisely, are not—doing to move this issue forward. And I want to leave you with an understanding that the one sector of our society where people seem to taking concrete steps to address this issue is in the American business community.

The Science of Global Climate Change
So let me begin by talking briefly about the science of global climate change. And let me quote something else from Alice in Wonderland that I think wonderfully illustrates some of the discussion we've seen in recent years on the question of whether or not climate change is real. This from Alice's encounter with Tweedledum and Tweedledee.


"I know what you're thinking about," said Tweedledum, "but it isn't so, no-how."
"Contrariwise," continued Tweedledee, "if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic."

Although there are still some who argue like Tweedledum and Tweedledee that "it isn't so, no-how," the truth is it's becoming harder and harder to brush aside the possibility—indeed, the reality—of global climate change. Over the last two to three years, we have seen a remarkable shift in the discussion of this issue. Even many former skeptics now acknowledge that it is happening in some way—or, at the very least, that it is something we should be concerned about.

While this attitude shift may be in part a consequence of the strange weather we've been having around the world, the main reason people are paying more attention to this issue of late, without a doubt, is the science. And, more specifically, the growing scientific consensus that global warming is so.

So, at the risk of sounding like your ninth grade science teacher, I want to take a minute to talk through some of the scientific issues involved in climate change. The earth's atmosphere, as we all know, is made up mainly of oxygen and nitrogen, but it also contains other naturally occurring gases, including water vapor, carbon dioxide, methane and nitrous oxide. It is these gases that are responsible for the natural greenhouse effect without which the earth would be about 34 degrees colder than it is now.

For years scientists have noted that atmospheric concentrations of greenhouse gases have been rising, particularly since the late 1800s. The primary reason: human activities such as the burning of oil, coal and natural gas. Since 1860, atmospheric concentrations of carbon dioxide alone have increased by 30 percent.

At the same time, the average surface temperature around the globe also has been rising—by anywhere from 0.72 to 1.44 degrees Fahrenheit over the last century. This finding was affirmed just last month by a panel of the National Academy of Sciences, which asserted that the warming trend has accelerated during the past 20 years.

In their analyses of these and other data, most of the world's best scientists agree on two things:


First, they agree that the earth will continue to warm. Last year, we at the Pew Center commissioned a report predicting that future changes in global-mean temperatures will be two to seven times more rapid than the changes we saw in the 20th century. We concluded that the earth will warm by 1.5 to 6 degrees Fahrenheit by the year 2100. That is in addition to the warming we have already seen.

The second thing that most of the world's best scientists agree on is that human-induced greenhouse gases will be at least partly responsible for the continuing warming trend.

I don't want to oversimplify the consensus that exists here. There remain significant uncertainties (such as how the formation and dissipation of clouds affect the climate). And there are still some skeptical scientists, although their numbers appear to be dwindling. The biggest question today, however, is not whether there is, or will be, a change in the global climate, but rather what the effects of that change will be, where they will be felt, and when.
What do we know about the effects of global climate change? If the predictions are right about the amount of warming we will experience over the next century—and I have seen nothing to suggest they are not—it is quite clear we will see a rise in sea level of anywhere from 6 to 37 inches. This will be caused by two things: the first is the fact that water expands when it is heated, and the second is that global warming will result in the melting of some glacial ice.

California, of course, will not be able to escape the effects of the rising sea levels brought on by global climate change. You could see flooding of low-lying property, loss of coastal wetlands, erosion of beaches, saltwater contamination of drinking water, and decreased longevity of low-lying roads, causeways, and bridges. Rising sea levels also could increase the vulnerability of coastal areas to storms and associated flooding.

OK, so what about the weather? What sorts of changes are we likely to see there? Based on projections by the Intergovernmental Panel on Climate Change and results from the United Kingdom Hadley Centre's climate model, by the year 2100, temperatures in California could increase by about 5 degrees Fahrenheit in the winter and summer and slightly less in the spring and fall. Researchers project increases in precipitation of anywhere from 10 to 50 percent in the spring and fall here in California, with somewhat larger increases in winter.

Another weather issue that has been in the news of late is extreme weather—or, more precisely, the potential role of global climate change in increasing the incidence of extreme weather events. Measuring changes in daily precipitation extremes around the world can be highly uncertain, but there is some evidence suggesting an increase in the frequency of wet extremes—not a happy prospect in a state that in recent years has added the mudslide to the list of natural disasters that keep Americans up at night.

Now please don't get me wrong. My objective here is not to scare you about the future or to give you a laundry list of possible or probable environmental effects, but simply to suggest this: we know enough about the science and the environmental impacts of climate change to begin taking steps to address its consequences now. We all live in worlds where we analyze risks, make decisions, and take appropriate actions based on our risk assessments. This issue is clearly at a stage where we must move beyond denial and debate, and focus ourselves on rational action, based on what we know from the science.

The World Responds
It was the strengthening scientific consensus about global climate change—a consensus that is even stronger today—that brought 150 nations together in Kyoto, Japan in 1997 to negotiate a framework for reducing greenhouse gas emissions around the world.

The Kyoto Protocol essentially requires developed countries to reduce or limit their emissions of greenhouse gases in relation to their emission levels in 1990. It also permits the use of various "flexible mechanisms" that can assist these countries in reaching their legally binding targets in a cost-effective manner. These mechanisms include: international emissions trading; joint implementation, which allows countries to receive credit for emission-reduction projects undertaken in other developed countries; and the Clean Development Mechanism-which allows trading in certified emission reductions between industrialized and developing nations. Fifty-five countries representing 55 percent of all developed country greenhouse gas emissions must ratify the Kyoto Protocol for it to enter into force.

The international negotiations that produced the Kyoto Protocol are still under way. Many terms in the original Protocol were left undefined, just as many of its provisions were not adequately explained. Issues that remain up in the air, so to speak, are: the structure and definition of the flexible mechanisms I mentioned; how to handle the issue of carbon sequestration, or the application of land use and forestry practices to help reduce atmospheric carbon dioxide; and how to establish a compliance regime—in other words, how does the world go about policing this enormously complex international agreement?

But despite the continuing negotiations, much work is under way to move forward with the emission reductions that are required under the Kyoto Protocol. I will give you a few examples:


The United Kingdom is now in the process of planning a domestic emission-trading experiment.

The Danish government already has secured legislative authority to implement a trading program of its own, and similar programs are under development in Norway and Sweden.

Looking elsewhere, the Germans are implementing a modest tax program, and a parliament in the Netherlands has approved a more traditional program that draws on a variety of policies and measures in an effort to curb emissions.

Last but not least, Japan, as a major player in the development of the Kyoto framework, is viewing this issue from a competitiveness standpoint and is developing strategies for its own emission reduction programs.

Whether any of these countries' efforts will work, or how well they will work, remains uncertain. But they do reflect serious attempts to experiment and move forward, to take necessary risks, and to determine what approaches ultimately will be successful.

The U.S. Government: AWOL on Warming
So what about the United States? What is our government doing to ensure that the necessary emission reductions are made? Before I answer this question, let me remind you that we are responsible for 25 percent of global emissions of these pollutants. This in a country that is home to less than 5 percent of the global population. If international leadership on this issue should come from anywhere, it should come from us.

But leadership is not coming from us. It is rare both in Washington and on the presidential campaign trail for the discussion of this issue to get past the question of whether to support the Kyoto Protocol or whether to declare it dead. What the discussion has not touched on—and should—is the further development and implementation of programs that would change the expected trajectory of our nation's greenhouse gas emissions. The U.S. Congress, in particular, appears determined to let absolutely nothing happen that would even remotely suggest that the United States is concerned about this issue. And while there have been several climate change bills introduced in the Congress, the prevailing wisdom is to view any effort to move forward on this issue as a quote-unquote "backdoor" attempt to implement the Kyoto Protocol and therefore to block it.

And what about the White House? President Clinton, in the budget he submitted in February, proposed spending $2.4 billion on various clean energy and energy conservation projects designed to -quote--"combat global climate change." This is important and politically safe, but it is clearly not enough. And how it will fare in the Congress remains to be seen.

The reality is that this White House has done very little since signing the Kyoto Protocol to make the treaty's goals and its mechanisms for reducing emissions a fundamental part of U.S. policy. Instead, the Administration regularly cites the leadership of U.S. businesses and local governments as evidence of our nation's commitment on this issue. As a former member of the Administration, it pains me to say this, but the White House is simply not doing what's needed to make this issue the national priority it should be. As Gertrude Stein put it, "There's no 'there' there."

U.S. Stumbling Blocks: Economics and Fairness
What, you may ask, is driving our elected leaders' reluctance to meet the challenge of global climate change in a serious way? I would like to suggest that there are two issues at the heart of the debate. And, while these issues are significant, my belief is that they have not been framed in ways that are honest or open to solution.

The first issue relates to the economic costs of action to reduce emissions. We all have heard the joke that economists have predicted nine of the last five U.S. recessions. And it is hard to argue with the premise of the joke when one looks at the varying predictions that have been made about the potential impacts of achieving the Kyoto targets on the U.S. economy. Interest groups across the ideological spectrum have produced markedly different results from economic models that are not that different in their structure but that use very different assumptions to achieve the results these groups want to achieve. And the only result that is truly achieved is confusion.

How do we get beyond this confusion? We get beyond it by admitting that the models we are using-even when stripped of assumptions that bear no resemblance to reality-are not infallible. For example, our ability to quantify the risks of not taking action to address global climate change is still in its infancy. In addition, we have yet to meet the challenge of modeling technological innovation--as far as I know, no economic model would have predicted the information technology or communications revolutions we are now witnessing.

I am not mentioning these things to suggest there will be no costs to the United States should we act decisively to reduce emissions. There is almost always a cost associated with major changes to the economy. What I would like to suggest is that a fixation with 10-year-out predictions of increases or decreases in the U.S. GDP really misses the mark. To argue, as some have done, that the costs will be catastrophic and that entire industrial sectors will immediately be wiped out is less than honest, as is the argument that major reductions can be achieved at no cost. What the United States should be concerned about are the impacts that are likely to occur in certain industries, certain labor categories, and certain regions of the country. The questions we should be asking have to do with: 1) how we can minimize these impacts; and 2) what we can do to deal with those impacts that we are not able to minimize—in other words, the impacts that remain.

The second issue that has become a roadblock to progress in the United States is the issue of developing country commitments. Is it fair, people ask, for the United States to have to abide by the Kyoto targets while competitors such as China, India and Mexico get a quote-unquote "free ride?" One fear is that American jobs will be lost to these and other countries because their production costs will be lower. But lost in the debate is the reality that fairness demands a decisive U.S. response for two reasons. First, because the United States is responsible, both historically and currently, for more emissions than anyone else. And second, because the United States, unlike many other countries, plainly has the ability to pay to reduce its emissions.

The reality, whether we like it or not, is that most developing countries are unlikely to agree to binding emission reduction targets that would take effect in this decade. The primary reason for the reluctance of these countries to "join in" is concern about their economic growth and its relationship to energy use, at least in the early stages of development. There is also a view in these countries that those who bear the historic responsibility for the problem of mounting atmospheric concentrations of greenhouse gases should act first.

But the developing world's opposition to targets cannot be allowed to hide the fact there is movement on this issue among these countries—movement that many of the opponents of the Kyoto Protocol prefer to ignore:


China, for example, which has dramatically lowered its energy consumption per unit of output over the last decade, is on a path to continue making significant energy-saving improvements over the decade to come.
Privatization of the electricity sector is moving forward in India, where competition is expected to increase the use of natural gas and lower greenhouse gas emissions.
And Korea is beginning to plan for opening up its power sector to competition, again with a projected increase in the use of natural gas.

In these and other developing nations, investment decisions made in the power and transportation sectors in the coming years will have a significant impact on global greenhouse emissions for decades to come. And the reality is that many opportunities exist for lowering these countries' emissions. In other words, binding commitments for these countries may not be possible, but significant action to lower emissions from their expected path may very well be. And that, in turn, would lay the groundwork for environmentally sustainable economic growth, something that is in everybody's interest.
To those in the U.S. Congress and elsewhere who continue to insist that China and other developing nations should have to live by the same requirements as the industrialized world as we work to reduce global greenhouse emissions, I say fairness demands we think differently. I believe that the 1992 Framework Convention on Climate Change, the agreement that led to the development of the Kyoto Protocol and was ratified by the U.S. Congress, took the right tack in asserting that industrialized countries should—quote—"take the lead" in reducing emissions. The Convention went on to state that developing countries have a right to development, even though their development will surely increase these countries' greenhouse gas emissions.

Does this mean we should expect nothing of the developing world as we work to reduce emissions in the years ahead? Of course not. I believe strongly that the world should take advantage of emission reduction opportunities where they exist—and whether they exist in industrialized or developing countries. The real issue, therefore, is not how to pressure developing countries into accepting binding emission reduction targets in this decade. Rather, the issue should be how to influence the character of the investments made in these countries so that they become more climate-friendly.

Moving Forward: American Businesses Take the Lead
If we want ideas for how to move forward on this issue in a proactive way, we should look to many of the American businesses that have accepted the need for strong action to reduce greenhouse gas emissions and are working to do so.

In late 1999, as many of you may know, the Ford Motor Company announced it was resigning from a coalition of oil companies, auto makers, electric utilities and others who stubbornly argue that we still don't have enough evidence to know whether or not global warming is real—and that we shouldn't do anything serious about it until more is known. Word of Ford's decision was followed closely by the news that Daimler Chrysler also would be leaving the group known as the Global Climate Coalition. The companies' moves were seen as an indication of the growing acceptance of the reality and the urgency of this issue—even in the nation's corporate boardrooms—and as yet another sign of a growing consensus for rational action to reduce U.S. greenhouse gas emissions.

But the fact is that many American businesses have long been way ahead of our government in their willingness to acknowledge and work on this issue. This progressive stance became obvious when a large group of mostly Fortune 500 companies became affiliated with my organization, the Pew Center on Global Climate Change, to help forge a consensus response to the problem. The Pew Center's Business Environmental Leadership Council now includes 21 companies with combined annual revenues of more than $550 billion. Working together, these companies developed a joint statement asserting that in the new millennium—quote—"one of our most important challenges at home and abroad will be addressing global climate change as we work to sustain a growing global economy."

"One of our most important challenges." That is an enormously powerful statement coming from these companies, which include such household names as American Electric Power, Boeing, BP Amoco, Lockheed Martin, Shell International, Sunoco, Toyota, United Technologies and Whirlpool. And, in making this statement, these companies announced publicly that they:

Accepted the science of global climate change;
Would establish their own emission reduction targets--and meet them;
Viewed the Kyoto Protocol as a first although incomplete step to addressing the issue internationally; and
Believed that addressing climate change can be compatible with sustained economic growth in the United States.

Some of the member companies of our Business Environmental Leadership Council have already announced their emission reduction targets, all of which are at least as stringent as those in the Kyoto Protocol. One large company affiliated with the Pew Center, DuPont, has established a goal of reducing emissions to 65-percent below 1990 levels by 2010, with an additional commitment of obtaining 10 percent of their energy needs from renewable sources. This is a stunning target, far in excess of the 7-percent reduction required for the United States as a whole in the Kyoto Protocol.
The commitment of DuPont and these other companies is an important reminder that there are many steps industry can and should be taking now to reduce greenhouse gas emissions. But it is important to realize that industry alone cannot solve this problem. The public, too, has an important role to play. And, while there is remarkable consensus among the public that global climate change is an important issue and an issue we should be doing something about as a nation, Americans have yet to translate this general concern into their behavior in the marketplace.

Here are a few polling numbers to illustrate my point. A 1998 survey conducted for the World Wildlife Fund revealed that nearly 60 percent of Americans believe global warming is happening now, and another 26 percent believe it will happen in the future. According to the survey, fully three-quarters of the public want the United States to take action to reduce emissions of carbon dioxide as a way to address the problem.

But when confronted with product choices, the climate-friendly road is often not the road taken. Why else would more than 50 percent of all new car choices be four-wheel drive SUVs?

I believe these numbers illustrate that there is a difference between caring about this issue and actually doing something about it. And in the same way that the American public expresses concern about our changing climate but stops short of taking actions that might help turn the situation around, many of our elected leaders—no doubt tapping into the public mood—get away with talking a good game about climate change but avoid taking serious action to address it. And the result is that the private sector is the only place right now where we see the combination of caring and commitment that is needed to move this issue forward.

Moving Forward: A U.S. Agenda
How can the United States government get back on track and assume its rightful leadership role in meeting the challenge of climate change? The answer is by forging a national policy designed to deal seriously and responsibly with this issue. Let me suggest four items to place at the top of the U.S. agenda.

The first item should be to depoliticize and depolarize this issue in Washington. American businesses need to know what will be expected of them in the future. If we can move beyond political agendas and focus on economically sound, stable, and serious actions to reduce greenhouse gas emissions, we will provide a platform for business planners to look ahead. And that will allow them to develop cost-effective investment strategies that will permit the needed replacement of capital equipment with greenhouse-friendly technologies.

Our second agenda item should be to design a straightforward system that will legally recognize the contributions of corporations that take early action to reduce greenhouse gas emissions. Put very simply, these companies need to know that reducing their emissions now won't put them at a competitive disadvantage down the line.

Our agenda for the next decade also should include some serious planning for how we as a nation will reduce our greenhouse gas emissions over the long haul. We know there are policies and programs that can lower the costs, and we should analyze and discuss all the alternatives. We know there are likely to be sectors of the economy that will be more affected than others. And we know we need to balance our environmental and economic goals in ways that minimize the costs and impacts, and that treat those who will be adversely affected in ways that are fair and equitable. But despite knowing all this, we haven't even begun to discuss a national plan of action. What we need is not a debate about Kyoto—a prospect that delights the opponents of serious U.S. action on this issue because they believe they will win it. Rather, we need to start discussing what has to happen to address the challenge of global climate change in ways that are smart and fair and that give us a competitive edge.

And finally, we need to continue to work abroad to make the Kyoto Protocol into an instrument that is worthy of U.S. ratification, and that is a step along the path toward a genuinely global solution to what is clearly a global problem.

At the World Economic Forum meeting in Davos, Switzerland last month, the business and government leaders in attendance were polled about the greatest challenge facing the world at the dawn of this new century. The winning answer was climate change—a clear indication that there is a real understanding among the world's movers and shakers that we need to do something. So what needs to happen now is for all of those movers and shakers to move from understanding to action and to shake up their governments so they meet this challenge head-on.

I began these remarks with a couple of quotes from Alice in Wonderland, so let me close with one, too. When Alice is playing on the Queen's croquet ground, she becomes very uneasy about the game and her fellow players. The story continues:

"I don't think they play at all fairly," Alice began, in a rather complaining tone, "and they all quarrel so dreadfully one can't hear oneself speak—and they don't seem to have any rules in particular; at least, if there are nobody attends to them."
Unfortunately, I think the current discussion of global climate change and what to do about it too often resembles the chaos and unruliness of the queen's croquet game. And I believe our priority in the months and years ahead—both in the United States and internationally—should be to provide some rules and direction to guide the players as we all work together to meet this global challenge.

Getting Real on Climate

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

Berlin, Germany

February 3, 2000
Thank you very much. I am delighted to be here, and to take part in these very important discussions about how we can move forward to address what may be the most important global issue of the 21st century.

Whenever I appear before an international group such as this, with people from different countries who speak different languages, I am reminded of a joke I first heard long ago. We all know that if you can speak three languages, you're trilingual. And if you can speak two languages, you're bilingual. But what are you if you can speak only one language? Why, you're American, of course.

Today, I would like to speak to you as an American, but as an American who has been in close contact with others around the world on the topic of global climate change. And I would like to base my remarks on an American expression. That expression is "reality check." It means taking a moment to reflect on what is really happening in the world. And it means being truthful with ourselves and others about what we are capable of achieving. A reality check is an affirmation of yet another American expression-an expression that our mothers repeated again and again while we were young. "Honesty is the best policy," they would tell us. And, of course, there was no doubt that they were right. They were our mothers, after all.

And the reality is that honesty is the best policy when we are addressing the issue of global climate change. It was honesty about the risks of a changing climate that brought 150 nations together to negotiate a framework for reducing greenhouse gas emissions around the world. In the same way, today we all need to be honest about what we can achieve and when-and about how best to move forward so that future generations don't look back and wonder why we couldn't work together to meet this global challenge.

In the time that I have with you tonight, I want to talk about some of the issues that the United States, Germany and other nations need to be more honest about in order to achieve real progress in addressing the challenge of climate change. I also would like to offer a realistic view of what is happening on this issue in the United States-in both the public and private sectors, as well as among the media and the general public. And I will close with some recommendations about how to move the global dialogue on this issue forward and achieve real progress.

Getting Real: What We Can Achieve

So let us begin with a few reality checks. From my perspective, there are three issues that our governments need to be more honest about as the world addresses the challenge of climate change in the months and years ahead. The first is the timeframe in which the world can achieve entry into force of the Kyoto Protocol. The German government-which, to its infinite credit, has been out front on this issue for years-is urging entry into force in 2002. Although this is surely an admirable goal, the honest truth is that it is unlikely to happen.

While it is certainly true that many European countries are anxious and willing to ratify the Protocol in the near term, some of them-such as the Netherlands-have said that the United States must ratify at the same time. Ratification by non-European countries such as Japan, Canada and Australia also is unlikely without U.S. action on this issue. And here is the reality check: Given the current mood and political situation in Washington, U.S. ratification of the Kyoto Protocol-in the near term at least-is about as likely as hell freezing over. And if hell did freeze over, I am certain that many in the U.S. Congress would make every effort to attribute it to nothing more than normal climatic variations.

Another reason why entry into force in 2002 is unlikely is the sheer volume of work that remains to be done. We should not diminish the complexity or the importance of establishing environmentally effective, private sector-friendly rules for the Kyoto mechanisms; or of determining how to handle the sequestration of carbon in trees or soils; or of establishing a compliance regime that is both meaningful and fair. It is absolutely essential that these issues be addressed in an honest and an effective way. The system we create is likely to be in place for many, many years. Completing all of these jobs this year to give countries the time that would be required for entry into force in 2002 is both unrealistic and unlikely.

The second thing that our governments need to be realistic and honest about is the ability to meet the targets in the Kyoto Protocol if entry into force comes later in this decade. Reality check number two, therefore, is this: For the United States at least, meeting the targets in the existing timeframe will be impossible.

Even if we saw a profound shift in Washington on this issue in the next one or two years, the United States will not be able to achieve the Kyoto targets as they are currently drawn for the simple reason that administrative process in our county can be enormously time-consuming. For the Kyoto Protocol to become U.S. law, the Senate would have to grant its advice and consent; both Houses of Congress would have to pass implementing legislation that would then have to be signed by the President; and a designated Agency would have to draft rules and regulations that would have to go through formal notice and comment procedures before they could be finalized and then implemented.

Given that such legislation and regulation would clearly result in regional and sectoral economic impacts, the odds of all this activity occurring by 2008 are very small indeed.

Lest you think that my doubts are reserved to my own country, I firmly believe that the United States will not be alone in its inability to move fast enough to meet the Kyoto targets. Surely, there is much effort on this issue in Europe and elsewhere, but even in the countries that have fully embraced the importance of reducing emissions, it is not a given that the targets can be met, particularly with current programs. And I would venture to say that the likelihood that these targets will be met will decrease as people and governments become convinced that the United States will not be able to meet its targets.

This brings up the third issue that we all must be realistic and honest about, which is the serious engagement of the developing world. The reality, whether we like it or not, is that most developing countries are unlikely to agree to binding emission reduction targets that would take effect in this decade. This is based in part on their fear that emission limitations would place unacceptable constraints on their economic development. It is also based on their view that, even among environmental issues, climate change is less of a priority than such things as reducing local air and water pollution.

But the developing world's opposition to targets cannot be allowed to hide the fact there is movement on this issue among these countries. For example:

Privatization of the electricity sector is moving forward in India, where competition is expected to increase the use of natural gas and lower greenhouse gas emissions.

Korea is beginning to plan for opening up its power sector to competition, again with a projected increase in the use of natural gas.

And China, which has dramatically lowered its energy consumption per unit of output over the last decade, is on a path to continue making significant energy-saving improvements over the decade to come.

In these and other developing nations, investment decisions made in the power and transportation sectors in the coming years will have a significant impact on global greenhouse emissions for decades to come. And the reality is that many opportunities exist for lowering these countries' emissions from a business-as-usual trajectory. In other words, binding commitments for these countries may not be possible, but significant action to lower emissions from their expected path may very well be. Indeed, this is already happening in some countries.

So there they are-three issues that the governments of the United States, Germany and other nations need to get real about in order to push this discussion forward. The timeframe for entry into force. Whether the existing Kyoto targets can be met. And the serious engagement of the developing world. If we follow our mothers' advice and are honest with one another about these issues, I believe we will go a long way to ushering in the next phase in the global effort to meet the challenge of climate change-a phase that will move us from rhetoric to reality and from discussion to action.

The View from the U.S.

Just as it is important to understand what is truly happening on this issue in developing countries, I believe it is also critical that everyone clearly understand the current situation in the United States. While there is still bickering within and outside the U.S. government about: 1) whether climate change is even real; and 2) what the United States should do about it and when, the reality is that the American news media is devoting more attention than ever before to the topic of climate change, the American people accept that it is something that demands our government's attention, and American businesses are moving ahead on their own in the absence of government action.

Let me talk briefly about the news media first, because I believe this is a very important development. Based in part on the growing consensus among scientists that global climate change is real-and in part as well on the fact that 1997, 1998 and 1999 were the three hottest years on record-the U.S. news media has devoted increasing attention to this issue over the last year or two.

In a television news report just last month, CBS correspondent Jim Axelrod reviewed some of the likely effects of global climate change-including rising sea levels and shifts in water resources. He also made note of a likely increase in global temperatures that he suggested, rightly or wrongly, was already evident in the early January hot spell that hit much of the country and had residents of Washington, DC, jogging in shorts and t-shirts. The correspondent concluded his report with this observation:

"Such thoughts used to be called "doom and gloom" by many. Now, however, a growing number of scientists are hearing the critics, looking at the data, and saying it's a forecast that can't be ignored."

The U.S. television networks are not alone in drawing fresh attention to the risks of global climate change. The Washington Post, in a January editorial entitled "Warming to Reality," issued its own warning that-quote-"reckless inaction in the face of global warming is the costliest of all options." And, in the American news media's turn-of-the-century rush to identify the critical issues of the new millennium, global climate change was always front and center.

No doubt in response to the news media's increasing attention to this issue, the American public is more willing than ever to accept that global climate change poses a real threat and that action is needed to avert a crisis.

A September 1998 survey conducted for the World Wildlife Fund revealed that nearly 60 percent of Americans believe global warming is happening now, and another 26 percent believe it will happen in the future. According to the survey, fully three-quarters of Americans want the United States to take action to reduce emissions of carbon dioxide as a way to address the problem.

In an effort to determine whether these opinions carry over into the realm of national decisionmakers and opinion leaders who influence U.S. policy, the Pew Center did its own survey in March 1999. We conducted nearly 450 interviews with staff members in Congress, industry association leaders, corporate decisionmakers in the affected industries, media representatives, economists, scientists and policy experts across the country-in short, a fairly comprehensive sample of the wide assortment of quote-unquote "elites" who are in a position to influence U.S. action-or inaction-on this topic.

What did we find? Well, to our surprise, we found that these elites are even more likely than the general public to believe that global warming is happening now. We also found broad support among elites for U.S. action to reduce carbon dioxide emissions. Even the Kyoto Protocol-the target of often-harsh criticism from many in Congress--attracted strong bipartisan support. More than one-third said the agreement actually would help our economy and create new jobs because we would develop new technologies that would help reduce our greenhouse emissions.

Business Accepts the Challenge

The belief that progress on this issue can be compatible with sustained economic growth in the United States-and may even contribute to that growth-is one reason there is increasing acceptance among U.S. businesses of the need for strong action to reduce emissions.

In late 1999, as many of you may know, the Ford Motor Company announced it was resigning from a coalition of oil companies, auto makers, electric utilities and others who stubbornly argue that we still don't have enough evidence to know whether or not global warming is real-and that we shouldn't do anything serious about it until more is known. Word of Ford's decision was followed closely by the news that Daimler Chrysler also would be leaving the group known as the Global Climate Coalition. The companies' moves were seen as an indication of the growing acceptance of the reality and the urgency of this issue-even in the nation's corporate boardrooms-and as yet another sign of a growing consensus for rational action to reduce U.S. greenhouse gas emissions.

But the fact is that many American businesses have long been way ahead of the U.S. government-and even ahead of the media and the general public-in their willingness to acknowledge and work on the issue of global climate change. This progressive stance became obvious when a large group of mostly Fortune 500 companies became affiliated with my organization, the Pew Center on Global Climate Change, to help forge a consensus response to the problem.

The Pew Center's Business Environmental Leadership Council now includes 21 companies with combined annual revenues of more than $550 billion. Working together, these companies developed a joint statement asserting that in the new millennium-quote-"one of our most important challenges at home and abroad will be addressing global climate change as we work to sustain a growing global economy."

"One of our most important challenges." That is an enormously powerful statement coming from these companies, which include such household names as American Electric Power, Boeing, BP Amoco, Lockheed Martin, Shell International, Toyota, Enron, United Technologies and Whirlpool. And, in making this statement, these companies announced publicly that they:

1) Accepted that there was enough known about the science of global climate change to warrant action;

2) Would establish their own emission reduction targets--and meet them;

3) Viewed the Kyoto Treaty as a first although incomplete step to addressing the issue internationally; and

4) Believed that addressing climate change can be compatible with sustained economic growth in the United States.

Some of the member companies of our Business Environmental Leadership Council already have announced their emission reduction targets, all of which are at least as stringent as those in the Kyoto Protocol. One large company affiliated with the Pew Center, DuPont, has established a goal of reducing emissions to 65-percent below 1990 levels by 2010, with an additional commitment of obtaining 10 percent of its energy needs from renewable sources. This is a stunning target, far in excess of the 7-percent reduction required for the United States as a whole in the Kyoto Protocol.

The commitment of DuPont and these other companies is an important reminder that there are many steps industry can and should be taking now to reduce greenhouse gas emissions. Unfortunately, however, the fact that these forward-thinking companies are acting of their own volition and without a clear sense that their actions will be rewarded in the marketplace is a reminder of something else. And that something else is the lack of leadership the U.S. government has taken on this issue, particularly at home, where a government framework for reducing U.S. emissions is sorely needed.

The U.S. Government: A Lack of Leadership

The U.S. government's lack of leadership is especially unfortunate because the United States is the largest emitter of greenhouse gases in the world--responsible for 25 percent of global emissions in a nation that comprises less than 5 percent of the global population. If leadership on this issue should come from anywhere, it should come from the United States.

But leadership is not coming from the United States. It is rare both in Washington and on the presidential campaign trail for the discussion of this issue to get past the question of whether to support the Kyoto Protocol or whether to declare it dead. What the discussion has not touched on-and should-is the further development and implementation of programs that would change the expected trajectory of our nation's greenhouse gas emissions. The U.S. Congress, in particular, appears determined to let absolutely nothing happen that would even remotely suggest that the United States is concerned about this issue. Virtually every budget item that deals with emission reductions is viewed by many in Congress as a quote-unquote "backdoor" attempt to implement the Kyoto Protocol and is therefore voted down or pushed aside.

What, you may ask, is driving the U.S. government's reluctance to deal with this issue in a serious way? I would like to suggest that there are two issues at the heart of the debate. And, while these issues are significant, my belief is that they have not been framed in ways that are honest or open to solution. The first issue relates to the economic costs of action to reduce emissions; the second centers on developing country participation. In my view, these are the chief stumbling blocks to serious action on this issue in the United States. Only by confronting them head-on will we be able to mount an effective response to the challenge of global climate change-both in the United States and throughout the world.

So let me begin with the economics. There is a popular joke in the United States that says economists have predicted nine of the last five U.S. recessions. And it is hard to argue with the premise of the joke when one looks at the varying predictions that have been made about the potential impacts of achieving the Kyoto targets on the U.S. economy. Interest groups across the ideological spectrum have produced markedly different results from economic models that are often not that different in their structure but that use very different assumptions to achieve the results these groups want to achieve. And the only result that is truly achieved is confusion.

How do we get beyond this confusion? We get beyond it by admitting that the models we are using-even when stripped of assumptions that bear no resemblance to reality-are not infallible. The complexity and time frame of the climate change problem stretches the capabilities of even the most sophisticated economic models on the benefits side. And the ability of models to quantify the value of reducing the risks of climate change is still in its infancy. On the cost side, models are still confronted with a series of challenges, the most important of which is anticipating the pace and direction of technological progress. As far as I know, no economic model would have predicted the information technology or communications revolutions that we are now witnessing. Nor have any models anticipated the decoupling of economic growth and carbon emissions that has occurred in the United States in recent years.

I am not mentioning these things to suggest there will be no costs to the United States should it act decisively to reduce emissions. There is almost always a cost associated with major changes to the economy. What I would like to suggest is that a fixation with 10 or 20-year-out predictions of increases or decreases in the U.S. GDP really misses the mark. To argue, as some have done, that the costs will be catastrophic and that entire industrial sectors will immediately be wiped out is as dishonest as the assertion that the economy can effortlessly achieve major emission reductions at no cost. What the United States should be concerned about are the impacts that are likely to occur in certain industries, certain labor categories, and certain regions of the country. The question is how these impacts can be minimized over time--and with careful transitional planning.

The second issue that has become a roadblock to progress in the United States is that of developing country commitments. I call this the "fairness issue." Is it fair, people ask, for the United States to have to abide by the Kyoto targets while competitors such as China, India and Mexico get a quote-unquote "free ride?" One fear is that American jobs will be lost to these and other countries because their production costs will be lower. But lost in the debate is the reality that fairness demands a decisive U.S. response for two reasons. First, because the United States is responsible, both historically and currently, for more emissions than anyone else. And second, because the United States has the ability to pay the costs of reducing our emissions.

Also lost in the debate about global climate change in the United States-and this may be even more important-is the question of what the problem actually is, and how it can most effectively be addressed. As I suggested earlier, emissions in developing countries will grow as these nations industrialize, and the infrastructure that will support this growth--for power generation and transportation, in particular--will set in place the global emissions trajectory for decades to come. So the real issue is not how to pressure these countries into accepting binding emission reduction targets in this decade. Rather, the issue should be how to influence the character of this infrastructure investment so that it becomes more climate friendly. We should look to our export credit agencies and to private investors for the tools to accomplish these objectives.

Moving Forward

So what is the world to do? We have all these difficult issues on the table, and yet we all understand-or at least most of us do-that we need to start acting to address this global challenge as soon as possible. I already have laid out some of the steps I believe need to be taken in order for this discussion to move forward and in order for Germany, the United States and other nations to move from discussion to action. These include being honest about the Kyoto targets and timetables even while working to complete the Kyoto framework; devoting more attention to encouraging progress on this issue in the developing world; and fostering discussion in the United States and elsewhere of some of the fairness and economic issues that must be resolved in order to build support for strong and decisive action.

But what about the Kyoto Protocol itself? I would not be honest if I didn't tell you there are many voices in the United States that have proclaimed that Kyoto is dead-some of them with the same satisfaction as the characters in the American movie "The Wizard of Oz" who dance and sing to celebrate the demise of the wicked old witch. But I believe it is important for all of us to remember that while some of those who have said Kyoto is dead come from industries that would be negatively affected by any regime to control greenhouse gases, others have much less, if anything, at stake. At issue for these critics are the complexity of the Kyoto framework, and the stringency of its targets and timetables.

Of course, the reality about the fate of the Kyoto Protocol is that it is unlikely to be cast aside even if it does not deliver on its first set of emission reduction targets. But at the same time, we all must accept that Kyoto remains a work in progress.

This leads me to one final reality check: Making the Kyoto Protocol into an agreement that can deliver on the promise of reducing the risk of global climate change will, in all likelihood, take longer than from now until the meeting this November in The Hague. The delegates should do what they can at that meeting, but they cannot and should not expect that all of these issues will be resolved. And, just because it takes longer than everyone hoped does not mean the Kyoto framework is not valuable and ultimately viable. In fact, I believe that structuring the framework more definitively into one that has realistic timetables and targets and is environmentally effective, economically sound, and-yes-fair will go a long way to improving its chances of success, whether we have agreement this year, next year or the year after that.

In the meantime, I am not suggesting that the governments of the world stand around and wait for a better document on which to base their work on this issue. The reality is that the United States and other governments should be implementing substantive programs now that seriously respond to the overall Convention goal of stabilizing atmospheric concentrations of greenhouse gases at levels that will prevent dangerous interference with the climate system. And it is heartening to see the initiatives that have been taken by Germany since the negotiation of the Kyoto Protocol.

A priority for the United States, I believe, should be to design a straightforward system that will recognize and give credit to corporations that want to take early action to reduce greenhouse gas emissions. Put very simply, these companies need to know that reducing their emissions now won't put them at a competitive disadvantage down the line.

In addition to addressing the early action issue, the United States must start planning seriously for how it will reduce greenhouse gas emissions over the long haul. I cannot state more emphatically that what is most important now is the trying. In the United States, in Germany, and throughout the world, we need to experiment with different approaches to reducing greenhouse gas emissions-for example, by testing both national and company-specific emissions-trading regimes, or by imposing carbon taxes. We need to establish clear procedures for inventorying and verifying emission reductions, something that many in the private sector are already working on. And we must begin to build the capabilities and the institutions we will need when a full-fledged international regime does come into effect.

These will not be easy or painless goals to achieve, but the reality is that we need to achieve them. There is no escaping our responsibility to address the challenge of global climate change in an effective and, of course, an honest way. We all have a higher authority to answer to on this issue. That's right, our mothers. And we all need to work together to make them proud.

Thank you very much.

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Op-Ed: Legislation Needed - Before It's Too Late

OPINION EDITORIAL
Legislation Needed - Before It's Too Late

By Vicki Arroyo Cochran
Director of Policy Analysis
Pew Center on Global Climate Change

Article written for the Washington Post Special Section on Climate Change

October 25, 1999

Two core principles of the companies that comprise the Pew Center's 21-member Business Environmental Leadership Council include: "We accept the views of most scientists that enough is known about the science and environmental impacts of climate change for us to take actions to address its consequences," and "Businesses can and should take concrete steps now in the U.S. and abroad to assess opportunities for emission reductions, establish and meet emission reduction objectives, and invest in new, more efficient products, practices and technologies."

However, in our current climate policy vacuum, responsible businesses are sent mixed messages. While the science demands immediate action, the lack of a clear policy framework makes it risky for firms to act.

Voluntary "early action" legislation would encourage businesses and other entities to reduce their contributions to climate change at the earliest possible time. Legislation is needed because while two international agreements related to climate change have been negotiated, neither has yet resulted in binding international or domestic restrictions on greenhouse gas emissions.

In 1992, the Framework Convention on Climate Change was negotiated in Rio in response to growing concern about the future of the earth's climate. As of September 1999, 180 countries have agreed to take action to mitigate climate change with the goal of stabilizing greenhouse gas concentrations at levels that would prevent dangerous human interference with our climate system. The U.S. and other developed countries agreed to reduce their emissions to 1990 levels by the year 2000. Most countries, including the U.S., will miss this target. In recognition of the Convention's limited effectiveness, the Kyoto Protocol to the Convention was negotiated in 1997. Emissions reduction targets ranging from 8% below- to 10% above- 1990 levels of six greenhouse gases were negotiated for 39 developed countries. The U.S. agreed to a target of 7% below 1990 levels.

The details of the Protocol's mechanisms and compliance regime have yet to be negotiated, and U.S. ratification is not moving forward. In the meantime, unprecedented amounts of long-lived greenhouse gases continue to build in our atmosphere. Every day lost creates an even greater hurdle in achieving the necessary reductions. And yet, in spite of increasing confidence in the science, those who identify opportunities to reduce their greenhouse gas emissions through changes in their production processes, energy consumption, or products (e.g., refrigerators, cars, or air conditioners) are currently unsure whether future government actions will recognize these reductions. Should their responsibility be triggered in the future - i.e., when a protocol is eventually ratified or a domestic program implemented - entities that act early could be left with fewer (and more costly) options to reduce. This creates the wrong incentive from an environmental standpoint. It also inhibits our ability to phase in potentially costly carbon reduction policy and to develop technologies needed to address the problem.

Early action legislation addresses this disincentive for action. The concept is simple: provide credit towards a future domestic regime to those entities acting now to reduce their emissions. Such legislation would stimulate action by rewarding those who act first and create incentives to curb emissions at the earliest opportunity.

Yet while the principle is sound, crafting sound and viable legislation has proven to be a challenge. Issues that need to be addressed in the design of such a program include: What should be the "baseline" year against which emission reductions are compared? Should reductions be measured by efficiency improvements (rate per unit of output) to allow flexibility for increases in production or market share or should only actual tons reduced be credited (because this is what the environment sees and is consistent with our Kyoto targets)? How to spur the greatest - and most permanent -- reductions rather than reward those most easily accessible? Given the long-lived nature of greenhouse gases, does it even matter which tons are reduced so long as we curb emissions now?

While some of these questions are addressed in the bipartisan early action bills pending in the Senate and House, others are not resolved. Congressional action on the issue appears stalled and crafting a sound compromise remains difficult.

While it would be preferable to create true incentives for early action, in its simplest form such legislation could state that actions taken after a certain baseline year - the date of legislative enactment, for example -- will not be penalized. Such a statute could help protect firms acting now from being punished for taking responsible action.

The more time passes, the less likely it will be for us to achieve the goal of climate stabilization. Some companies are announcing aggressive commitments to reduce their contributions to climate change. Some state and local governments are taking steps to register and promote these actions. But without U.S. government action, we will not have the broad participation and commitment -- either in this country or abroad -- needed to truly address this problem.

Appeared in the Washington Post, Monday, October 25, 1999— by By Vicki Arroyo Cochran

Climate Change: A Challenge to the Conventional Wisdom

Climate Change: A Challenge to the Conventional Wisdom

Eileen Claussen
Executive Director, Pew Center on Global Climate Change

World Aviation Conference
San Francisco, California

October 20, 1999

Good morning. I had a lovely flight to San Francisco yesterday. So let me begin by thanking you for making that possible. And we can wait until my presentation is over to see whether you think I deserve a smooth flight back. I must tell you that I accepted your very kind invitation to speak at the World Aviation Congress because I thought it would be a perfect place to challenge two pieces of what could be called "the conventional wisdom:" the first is that industry always opposes responding to environmental problems by initially doubting the scientific basis of the problem, then arguing that responding to the problem is too costly, and finally, arguing for a delayed timetable for the response; the second is that leadership on public policy issues must always come from government.

But before I challenge these views, it may be useful for me to provide a little background on the global climate change issue. I believe this issue represents one of the most significant challenges of the next century: it's a science issue and an environmental issue; a global issue and a national issue; a technology issue and a fairness issue; a business issue and an economics issue. It is not likely to go away in the short term no matter what we do. And, if we don't do anything, it won't go away in the long term either. So let me give you a brief sketch of what we know and where we stand, and then spend a little time talking about practical solutions, the Pew Center on Global Climate Change, and the aviation industry. In so doing, I hope that I can convince you that the best response to the conventional wisdom is real information, analysis, assessment, and action, and that some in industry, and in the aviation industry in particular, are clearly up to the task. My job, I think, is to inspire all of you to take on this challenge and help provide the leadership that we need and that is so sorely lacking.

But to begin at the beginning, let's look at the science. The earth's atmosphere is made up mainly of oxygen and nitrogen, but it also contains other naturally occurring gases, including water vapor, carbon dioxide, methane and nitrous oxide, that are responsible for a natural greenhouse effect. Without this natural greenhouse effect, the earth would be about 34 degrees colder than it now is. But atmospheric concentrations of these gases have been rising, particularly since the late 1800's, as has the average surface temperature of the globe, which has warmed by 0.6 degrees centigrade. In their analyses of these and other data, most of the world's best scientists are agreed on two things: that the earth will continue to warm (we estimate 1.3 to 4.0 degrees centigrade by 2100), and that human-induced greenhouse gases will be at least partly responsible for that warming. I don't want to over simplify the consensus that exists here. There remain significant uncertainties (like how the formation and dissipation of clouds affect the climate), and there remain skeptical scientists. But the greatest uncertainties surround not whether there is, or will be, a change in the climate, but rather what the impacts of that change will be, where they will be felt, and when.

What do we know about the impacts of climate change? If the amount of warming over the next century is as currently predicted, it is quite clear that there will be a rise in sea level, estimated to be between 17 and 99 centimeters. For the United States, the rate of warming is expected to be noticeably faster than the global mean rate, particularly across the northern Great Plains and the northeastern states. These temperature changes are expected to increase winter precipitation in northern latitudes, increase the frequency of extremely hot days, and decrease the frequency of frosts. Changes in the incidence of daily precipitation extremes are highly uncertain, although there is some evidence suggesting an increase in the frequency of wet extremes. The effects of these temperature and precipitation change on agriculture, water resources, coastal resources, health and ecosystems are expected to be regionally significant. For example, while climate change is not expected to threaten the ability of the United States as a whole to feed itself, regional patterns of agricultural production are likely to change, and many crops will have to be grown in more northerly latitudes. Similarly, we can expect climate change to have impacts on our nation's water supply because of increased flooding in northern latitudes and snow-melt driven basins. At the same time, the frequency and severity of dry spells and droughts is also predicted to increase, although at different times and in different regions. Sea-level rise, with concurrent increases in storm frequency and/or intensity, is likely to affect some of our coastal areas, particularly the Atlantic coast, the Louisiana delta and the San Francisco basin. But my objective here is not to give you a laundry list of possible or probable environmental effects, but simply to suggest that we know enough about the science and the environmental impacts of climate change to begin taking steps to address its consequences. We all live in worlds where we analyze risks, make decisions, and take appropriate actions based on our risk assessments. This issue is clearly at a stage where we must move beyond denial and debate, and focus ourselves on rational action.

Rational action. It is probably a concept that we can all find appealing. But it seems to me that it is easier to say it than to take it, particularly when we are dealing with an issue like this where polarization of views is the norm, and coherent discourse and problem solving are rare. As some of you may imagine, and others of you may know first hand, this is a highly political issue, and I mean "big P" political: Republicans v. Democrats; Europe v. the United States; developed countries v. developing countries. It is also a "small p" political issue: scientists associated with the Intergovernmental Panel on Climate Change v. skeptical scientists; industry winners v. industry losers; the Kyoto Protocol as the solution to the climate change issue v. Kyoto as an agreement that will never enter into force. So perhaps I can be most helpful by giving you a little context, and then moving into a discussion of some practical paths forward.

In thinking about the climate change issue, it is both obvious and easy to suggest that climate change is a global problem that demands a global solution. And, of course, it is true. Greenhouse gases emitted in Delhi can affect the climate in Dallas, just as emissions in Chicago can affect the climate in Calcutta. On the other hand, global solutions cannot be found unless individual nations, businesses, and even individuals search for, and implement their own solutions. We have a broad global framework negotiated in 1992 and now ratified by 179 countries, including the United States, that establishes an overall goal of preventing dangerous anthropogenic interference with the climate system, and requires all countries to take policies and measures to reduce their greenhouse gas emissions, consistent with their circumstances and abilities. We also have the Kyoto Protocol, negotiated in December of 1997, and now signed by 84 countries, including the United States, and ratified by 15. This protocol establishes legally binding emission reduction targets for developed countries (7% below 1990 emission levels for the United States by 2012). It also allows for emissions trading and joint implementation among countries with targets, as well as use of a Clean Development Mechanism for project-based emission reductions between developed and developing countries. But perhaps the best way to look at the Kyoto Protocol is to look at what it does not contain, and what remains to be done.

It does not, for example, include any emission reductions or limitations beyond a first step for developed countries only. This is an obvious problem, since successfully addressing the matter requires more than one-step as well as participation from countries beyond those in the developed world. Yet the Protocol does not come to grips with what future steps might look like, for either developed or developing countries, or even what the framework for making decisions on these steps might be. What are the factors that should be considered in determining appropriate obligations for different countries or groups of countries to reduce or limit their emissions? To what extent should responsibility for the problem, past, present and future be a factor? Should it be tempered by a country's ability to pay for mitigation activities? Should emission rights be granted to countries based on historic emission levels, or should they be distributed on a per capita emissions basis? And what kind of system is effective, practical and fair?

The protocol does contain a framework for achieving emission reductions where they will be most cost-effective by including provisions on emissions trading, joint implementation, and the establishment of a Clean Development Mechanism, but it provides no specifics on how these mechanisms might work. It includes the possibility of sequestering carbon in forests and soils, but contains no specifics on how carbon that is sequestered should be included in a nation's total emissions budget. And it does not contain any provisions related to compliance, another issue that requires a serious and thoughtful response.

But as a practical matter, it seems to me that a framework for international action to deal with the climate change issue will evolve over the next decade no matter what current national and global politics suggest about the Kyoto protocol. And if you take this view of the inevitability of global action, and couple it with the view that the science is compelling enough to begin taking serious steps to address it, then the emphasis shifts to action frameworks and actions closer to home: national actions, company actions, and individual actions.

So where do we stand domestically? Unfortunately, the complications at home are as daunting as the complications abroad. While there is concern, interest, and a willingness to act on the part of the general public, some in the business community, and some in government, particularly at the State and local levels, the issue is now enmeshed in difficult and frustrating partisan politics. While the science remains somewhat controversial (although far less than even one year ago), it is the Kyoto Protocol that has raised the tensions dramatically. It is rare, in Washington, to be able to get past the question of whether to support Kyoto or declare it dead. As a practical matter, this has translated into arguments on the size and scope of the climate change budget, debates over whether Federal employees should be allowed to talk about the Kyoto Protocol, and attempts to use economic analysis to prove either that Kyoto implementation would ruin the economy or that it would be virtually free. What it has not translated into is the further development and implementation of programs that would change the expected trajectory of greenhouse gas emissions, or the passage of legislation that would either protect the 1990 baseline for companies that have voluntarily reduced their emissions over the past decade or provide incentives for more companies to move forward with emission reduction efforts.

I feel compelled to add here that the situation in the United States is unique among the countries of the world. The United Kingdom is now in the process of planning a domestic emissions trading experiment. The Danish government has already secured legislative authority to implement a trading program, and other emissions trading programs are under development in Norway and Sweden. The Germans are implementing a modest tax program. The Netherlands has a more traditional program full of different policies and measures that has been approved by their parliament. Whether these programs will work, or how well they will work, remains uncertain. But they do reflect serious attempts to experiment and move forward, to take the risk necessary to determine what approaches will ultimately be successful. There is even movement in the less developed world: privatization of the electricity sector is moving forward in India, where competition is expected to increase the use of natural gas and lower greenhouse gas emissions; Korea is beginning to plan for opening up their power sector to competition, again with a projected increase in the use of natural gas; and China, which has dramatically lowered its energy consumption per unit of output over the past decade, is on a path to continue making significant energy intensity improvements over the next decade.

Can more be done to deal with this problem than is apparent from the current level of activity? Of course. But if the U.S. government, or global governments more broadly, are either not able to come to grips with the more challenging issues that must be addressed, or unwilling to exercise real leadership, who will? I believe the answer is obvious and already in evidence, and I hope you will forgive me for the following advertisement. When the Pew Center on Global Climate Change was formed in May of 1998, there was little that was pushing 13 companies (the Washington Post, in an editorial, called them "a few brave firms") to publicly declare that

1 - they accept the views of most scientists that enough is known about climate change for them to take actions to address its consequences;

2 - that businesses can and should take concrete steps now in the U.S. and abroad to assess their opportunities for emission reductions; establish and meet emission reduction objectives; and invest in new, more efficient products, practices and technologies; 

3 - that the Kyoto agreement represents a first step in the international process but that more must be done to implement the market-based mechanisms that were adopted in principle in Kyoto, and to more fully involve the rest of the world in the solution;

4 - and that we can make significant progress in addressing climate change and sustaining economic growth in the United States by adopting reasonable policies, programs and transition strategies.

Three of these companies are leaders in your industry as well: Boeing, Lockheed Martin and United Technologies. And there was little pushing the additional 8 companies that have since affiliated with the Pew Center. And there was little pushing those companies that have already set reduction targets and established programs to implement those targets, including DuPont, BP Amoco, Shell and United Technologies. And if this isn't leadership and a serious challenge to the conventional wisdom, I'd like to know what is.

But the job is not over yet. In fact, it is barely beginning. This is not a problem that can be solved in one day or one decade. It is a long-term issue that will require a sustained and serious effort over a long period of time. And there is room for virtually everyone to play a role in developing solutions. In fact, without participation from everyone -- countries, industry sectors, companies, and individuals -- it is not clear that we can mount a serious response to the problem. And this brings me to the aviation community.

I recognize up front that you have a problem that inspires jealousy in most other industries: you have had, and are projected to continue to have, a strong annual growth rate. And with this growth rate comes a problem, for while you have been successful in reducing emissions per unit of output, continued growth will increase your total greenhouse gas contributions. Even at current levels, the aviation industry accounts for roughly 2 percent of total global carbon dioxide emissions. I also realize that this sounds like a relatively small contribution. But unfortunately most sectors make small contributions, and aviation outpaces chemicals, iron and steel, cement and aluminum. You could even compare yourselves to many countries. The global aviation sector emitted more carbon dioxide than China, Germany, France or the United Kingdom.

But I didn't come here to depress you. It seems to me that all of the players on this issue are different from one another. Their contributions to the problem differ; their opportunities for emission reductions differ; and the costs that these reductions would entail differ. There is no "one size fits all" solution, and while special pleadings have never appealed to me as ways to do business, there is much to be said for flexible systems that allow for these key differences to be addressed and resolved. So let me be specific in suggesting that you focus on three topics: governance, technology and flexibility.

The aviation industry is already in a unique position with respect to governance. Article 2.2 of the Kyoto Protocol grants the industry special recognition, and establishes ICAO, the International Civil Aviation Organization, as the body responsible for regulating international aircraft emissions. As someone who has worked for many years with various Convention Secretariats and their Conferences of the Parties, I can only assure you that you are very lucky to be dealing with an organization that knows your possibilities and your constraints. But what is important is that you not squander your good fortune; your credibility on environmental issues is at stake here. It should be possible to develop timely and effective solutions that allow you to grow your business in sustainable ways. Find them, before others find paths that are less in your interest.

The second topic that demands some attention is that of innovation and technological change. Your industry has been a leader in the development and diffusion of new, more advanced technologies for decades. As you make investments in research and development, and as you consider priority areas upon which to focus your efforts, I would urge you not to forget that growth in the 21st century will almost certainly have to be environmentally sustainable growth. It is no accident that several of the largest global oil companies (and I am referring here to Shell and BP Amoco) have begun to think of themselves as energy companies, and have begun to significantly expand their investments in less traditional, more environmentally friendly energy sources. I didn't come here to tell you how to spend your R&D dollars. But I would like to suggest that you think carefully about what may be required over the next several decades to deal with the issue of global climate change, and that you factor this picture of the future into your longer term planning. You should be the industry that is first at the starting gate, and first at the finish line.

And finally, I urge you to think constructively about the market mechanisms that are contained in the Kyoto Protocol. These mechanisms essentially allow firms and nations to achieve the lowest cost emission reductions regardless of where they occur. And by doing this, the mechanisms provide economic incentives for innovation and lowered compliance costs. The best known example we have of how emissions trading works can be found in the acid rain trading program under Title IV of the Clean Air Act, a program which coincidentally I managed while at the Environmental Protection Agency. That program was designed to be scrupulous in its accounting system, and highly flexible and open in its trading system, a balance that has worked well to ensure that emissions are lowered and costs are as low as possible. It seems to me that the "Kyoto mechanisms," emissions trading, joint implementation and the Clean Development Mechanism have a significant potential for use by the aviation sector, and I know that ICAO is exploring their use along with other policy choices. You should carefully consider whether they would work for you, and, if you become convinced (as I am) that they could be of value, work with governments to ensure that the rules that are used to implement these provisions are simple, straightforward and result in real emission reductions.

In closing, I would like to briefly come back to the conventional wisdom. Yesterday's Wall Street Journal contained several articles on climate change. The lead story was titled "Inside the Race to Profit from Global Warming: Big Business Produces some Unexpected Converts." I call your attention to these articles not because I am quoted in them (alas, I am, and my quotes are not always diplomatic), but because I think they do point directly to the issue of leadership. If the marketplace has triumphed, at least temporarily, over government, as Daniel Yergin contends in his book "The Commanding Heights," then the marketplace will also have to stand ready to be judged by its commitment and contribution to environmentally sound solutions. The aviation industry is viewed as clean and green: technological giants in a world where technology is king. I urge you to live up to your reputation, exercise leadership, make a constructive contribution to the solution, and turn the conventional wisdom on its head.

Thank you.

Press Release: Study Finds Climate Change Will Impact U.S. Water Supply

For Immediate Release:
September 27, 1999

Contact: Kelly Sullivan/Heather Fass
             202-289-5900

Study Finds Climate Change Will Impact U.S. Water Supply: Both Quantity and Quality of Water Supply Could Be Affected

WASHINGTON, D.C. -- A new study released today by the Pew Center on Global Climate Change concludes that climate change is likely to impact both the availability and quality of the U.S. water supply.

The study, Water Resources and Global Climate Change, finds that as climate change alters precipitation, evapotranspiration and runoff in the United States, these changes are likely to affect the magnitude, frequency, and costs of extreme weather events, as well as our nation's water supply.

The report, one in a series by the Pew Center examining the impacts of climate change on the environment, was researched and written by Dr. Kenneth Frederick of Resources for the Future, and Dr. Peter Gleick of Pacific Institute for Studies in Development, Environment & Security.

"Recent floods and droughts have reminded everyone that the climate and our nation's water supply are inextricably linked," said Eileen Claussen, Executive Director, Pew Center on Global Climate Change. "This study shows that as the climate changes, so will its impact on our water supply."

While some specifics are difficult to predict, several consistent impacts can be identified. For example, in mountainous watersheds, higher temperatures will increase the ratio of rain to snow, accelerate the rate of spring snowmelt, and shorten the overall snowfall season, leading to more rapid, earlier, and greater spring runoff.

In already arid regions, there is likely to be greater flux in the water supply, while higher temperatures fuel an increased demand for water. In other areas, new instances of flooding and droughts also will impact the availability of water.

"An adequate - and safe - water supply is an essential component to our health, environment, communities and economy," said Claussen. "These new findings demonstrate that climate change will not only impact the quantity of our water supply, but the quality as well."

While higher water flows could improve water quality in some streams, the increased runoff of pollutants and saltwater intrusion could accompany climate change induced sea-level rise.

The study notes that there are steps that can be taken today to begin preparing for changes in our water supply. In addition to reviewing options for adapting and expanding the existing infrastructure, including reservoirs and dams, there are opportunities to develop water marketing and trading strategies and improve the management of water systems.

"The findings from this report show without question that there are steps we can - and should - be taking today to prepare our water supply for the consequences of climate change," said Claussen. "But the most important step of all is to reduce the greenhouse gas emissions that cause climate change."

In addition to being presented to Members of Congress and their staff at a briefing tomorrow on Capitol Hill, the findings from the study also are highlighted in a print advertisement sponsored by the Pew Center. The advertisement is scheduled to run on September 29th in The Washington Post, September 30th in Roll Call, and October 2nd in National Journal.

The Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the nation's largest philanthropies and an influential voice in efforts to improve the quality of America's environment. The Pew Center supports businesses in developing marketplace solutions to reduce greenhouse gases, produces analytical reports on the science, economics and policies related to climate change, launches public education efforts, and promotes better understanding of market mechanisms globally. Eileen Claussen, former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs, is the executive director of the Pew Center.

The Pew Center includes the Business Environmental Leadership Council, which is composed of 21 major, largely Fortune 500 corporations all working with the Pew Center to address issues related to climate change. The companies do not contribute financially to the Pew Center - it is solely supported by contributions from charitable foundations.

Turning Down the Heat: Finding Solutions for Global Warming

Turning Down the Heat: Finding Solutions for Global Warming

April 22, 1999

Good morning. Thank you for inviting me to speak here in this idyllic setting, with the White River and the mountains, truly a perfect backdrop for Earth Day 1999. The subject of the program Turning Down the Heat: Finding Solutions for Global Warming is also ideal. Addressing global warming will be one of the great challenges of the 21st century, a challenge that must be met by both my generation and your generation. It is clearly a multi-year and multi-generation task - and a topic where even the best minds may have difficulty charting a sustained and effective course. But for us to begin on the path toward solutions, we should start with a modest list of needs:

First, we need to begin with a realistic assessment of where we are in addressing this issue, both nationally and internationally;

Second, we need to begin now to seriously reduce our greenhouse gas emissions;

Third, we need to chart a course for a long term response, and begin laying the groundwork for that response; and

Finally, we need to muster the will to stay the course until we are successful in meeting the challenges of global warming.

My less than optimistic view is that we are far from coming to grips with this issue, both as a nation and as a world. And we certainly have not yet shown that we have the will to stay the course. In fact, I think the best way to illustrate our situation would be to think briefly of a painting by Pieter Brueghel titled "The Fall of Icarus." As many of you know, in Greek mythology, Icarus is the son of Daedulus, an architect and inventor who developed the labyrinth. When Daedulus and Icarus were later imprisoned in the labyrinth, Daedulus created wings of wax for both himself and his son so they could escape. They managed to flee the labyrinth and flew away. But Icarus, failing to heed his father's advice, flew too close to the sun, his wings melted, and he fell into the sea and drowned. In the Brueghel painting, as Icarus falls into the sea, no one pays any attention. The ploughman continues ploughing his field, the ship does not come to the rescue. If there is a disaster, it is someone else's disaster, and does not warrant a change in course. Well, Icarus we shouldn't be; the ploughman we cannot be.

So let us begin with a realistic assessment of where we are, and then perhaps we can chart a course for change.

Where We Are

Beginning with the science, which is the basis for dealing with this issue, I believe we can simply say that sufficient scientific knowledge exists that supports taking action. The world's best scientists agree that the earth will warm somewhere between 1.5 and 6.3 degrees Fahrenheit over the next century. They also agree that that warming will have significant impacts on the world in which we live: sea level is projected to rise between 6 and 37 inches, because water expands when heated, and because some glacial ice will melt. In addition, we can expect to lose some ecosystems, stress our already depleted water supplies, see our crop production and agricultural practices change with regional consequences, and see increases in the spread of infectious disease. Extreme weather events may also increase in frequency. Most scientists also agree that rising temperatures can be attributed, at least in part, to human activity, and, absent any effort to alter that human activity, will only result in greater temperature increases over time.

But this emerging consensus of concern has not resulted in a similar consensus for action. While it is true that opinion polls in the United States and globally suggest, by a strong margin, that the public believes that global warming is a serious issue, it is still not high on either national or global agendas. And this view is confirmed and strengthened in a survey of opinion leaders done recently for the Pew Center. In this research, completed in January of 1999, we found that 68 percent of opinion leaders (based on a sample drawn from the 1998 edition of Who's Who) believe that global warming represents a serious threat, and 61 percent are of the view that it is happening now. Seventy-six percent of these opinion leaders also believed that the United States should reduce emissions even in the absence of action by other countries, a conclusion that is supported across party lines. The strongest reasons for taking action include the desire to leave a legacy for future generations, and avoiding human suffering, and ecosystem loss.

In partial response to green public opinion, discussions of global climate change in Europe have been more constant and more politically charged than in the U.S.. And European governments have taken a more aggressive stand in the international negotiating process. But even in Europe, actions have not equaled words. Most EU governments continue to struggle with making significant reductions (beyond those garnered from loss of the industrial base in the former East Germany, or the phasing down of coal use in the United Kingdom), and some expect their emissions to grow substantially. In the United States, the debate is highly polarized, and the Administration and the Congress have been unable to agree on either a program to slow the growth in greenhouse gases, or on the funding needed for climate technology development.

But on neither continent (and certainly not in other parts of the world) has the public's concern been translated into public action. Consumer automobile purchases reflect low gasoline prices, and not the need to reduce carbon emissions. Green energy markets (where non-fossil energy is supplied) are beginning to grow, but consumer purchasing of green power still remains a choice of the few and not the many.

This lack of public will translates easily into a lack of political leadership. For while the Kyoto Protocol was agreed in December 1997, with an overall 5 percent reduction below 1990 levels to be achieved by 2012, government consultations on implementation of the agreement have been slow and contentious. The European Union, for example, has chosen to use these ongoing negotiations to redefine some of the basic parameters that were agreed in Kyoto, while the United States has indicated that it will not make any attempt to ratify the agreement until other agreements (that further define the Kyoto market mechanisms and that more deeply involve developing countries) are completed. The work plan agreed to in Buenos Aires in November 1998 contains over 152 separate items - an indication that not that much - or at least not enough -- was actually agreed the year before in Kyoto.

But if this picture looks bleak - with a concerned, but unmotivated public and a lack of leadership from governments - it is important to note that some shifts in behavior have actually occurred over the past year. In the United States, this shift can be seen in two ways. Most importantly, some in the private sector have begun to take significant actions to deal with their own emissions. BP Amoco, for example, has set a target to reduce its own emissions by 10% below 1990 levels by the year 2010. Shell International has a target of 10% below 1990 levels by 2002. United Technologies has committed to reduce its energy and water consumption per dollar of sales by 25% below 1997 levels by 2007. DuPont will reduce it global greenhouse gas emissions by 45% below 1991 levels by 2000. And Baxter International has reduced the global warming impact of its emissions by 81% since 1990. All 21 companies affiliated with the Pew Center on Global Climate Change are beginning to inventory their emissions and assess their opportunities for emission reductions. And while these companies are the exception rather than the norm, they do reflect a change - and a beginning.

I believe that we are also seeing a change up on Capitol Hill. At the beginning of this year, 12 Senators from across the political spectrum, including Senators Chaffee, Lieberman, Mack, Voinovich, Jeffords, Baucus, and Warner, introduced a climate change bill that would provide credit to companies that reduce their emissions when a regulatory program to control greenhouse gas emissions is enacted. Senators Murkowski, and Hagel are considering legislation that would provide incentives for technology research and development. It is also likely that we will see bills dealing with climate change introduced in the House over the next several months. So while these bills represent a wide range of views, they do indicate a change of tone and substance - the Congress recognizes that climate change is an issue that cannot be avoided and it is at the table thinking about possible solutions. And as I mentioned earlier, support for reducing greenhouse gas emissions even outside of an international agreement, is supported by opinion leaders without regard to political party.

A Short Term Plan

Addressing the climate change issue will require actions both in the short term and the long term - in the short term because without early and constant action we will not be able to address all of our long-term concerns. I would like to suggest that there are at least four items we can tackle now.

First and foremost, we should try to put in place a straightforward system to give credit to those corporations and entities that want to take early action to reduce their greenhouse gas emissions. We should not force progressive companies to make a choice, on the one hand, of investing in emission reducing technology now and risk being punished for it later, or, on the other hand, to forego investment to develop or install climate friendly technology for a decade or more. Failure to adopt a program to give credit for early action will essentially compel industry to defer action to avoid the uncertainty of how their actions will be treated by the government when more comprehensive programs are put in place.

Congress should step up to this issue and provide a legislative framework that will allow industry to undertake the emission reductions that will change our current course of emissions growth and result in a downward emissions trend. Of course I do not want to paper over some of the difficult questions that must be answered if we are to have an effective credit for early action program. How do we assure that the reductions that are credited are real and verified? How do we provide enough of an incentive for action, and yet do not over-mortgage the budget allocation for the United States in the Kyoto Protocol should it be ratified and enter into force? And how should we handle high-growth sectors, where emissions per unit of output may be significantly decreased, but where overall company-wide emissions may rise with vastly increased output? I would simply argue that these questions are all relevant for future carbon control activities, and we would do well to begin to work on the answers now.

It is also critical in the short term that we put in place programs and incentives for the development and diffusion of clean, green technologies. While it is important to take account of sectoral capital cycles, it is also important that we do not readily accept future investments in equipment that is not climate-friendly where alternatives are available. Such an effort should start now, but should not be geared to short term investments. Consider the 50 plus year lifetimes of power generation equipment, heating and cooling systems, and aircraft. Or consider the lifetime of simple refrigerators and freezers, where efficiencies have improved approximately 70 percent over the past 10 years, but where the old appliances still predominate in U.S. households.

As we move forward on a lower emissions path, and as we begin to invest in cleaner technologies, we must also focus our analytical efforts on developing sound methodologies and experimenting with new policy approaches. We should not fool ourselves into thinking that the requirements for addressing global climate change are simple, or even that we have a full understanding of those requirements. If we are to support carbon sequestration in trees and soils, obviously a sensible thing to do, we must develop accurate baselines and accounting systems. If we wish to control all greenhouse gases, we will need to significantly improve our ability to count those emissions in ways that can easily be monitored and verified. As we move toward establishing corporate baselines and conducting inventories, we need to deal with issues ranging from how to account for baseline changes as a result of mergers and acquisitions to whether to include employee travel as part of company-wide emissions reduction plans.

And the learning required does not stop with methodological issues. While we may have successfully implemented a sulfur dioxide emissions trading program in the United States, this does not mean that we have fully assessed what might be required for a greenhouse gas system with inter-gas, intra-company, inter-company and inter-country trading. In fact, one of the most interesting experiments now being conducted is the BP Amoco intra-company trading program, a multi-country, multi-facility effort that has already seen five trades completed at an average price of less than $20/ton. But more experimentation and learning is necessary if we are to launch a system for the global control of all greenhouse gases that will not only reduce emissions, but will do so in a manner that supports a growing global economy.

Long Term Needs

Of course no amount of short-term activity will be sufficient for dealing with what is clearly a long-term issue. We are, after all, dealing with greenhouse gases that accumulate over decades and stay in the atmosphere for thousands of years. So I would suggest that we also begin to focus on three longer term needs: the need to build stronger international capacity to deal with climate change; the need to build global institutions capable of handling topics ranging from Clean Development Mechanism projects to monitoring, verification and compliance activities; and the need to resolve global participation concerns in ways that balance effectiveness and equity.

Negotiating a regime for the control of greenhouse gas emissions and then implementing that regime on both international and national levels are highly complex tasks. Yet the capacity of most countries, particularly in the developing world, is limited. An international system is only as good as the national systems that support it. If enough nations do not implement policies to achieve their negotiated emission reductions, then globally we will not meet our targets. If there are doubts whether some nations' reductions and calculations are real, then trading markets will suffer and compliance on the part of other countries is at risk. Help with building this kind of national capacity is necessary if we are to lay the groundwork for international implementation, and we should begin now to engage this task.

And international implementation requires strong, credible and lean institutions. While some believe that most countries comply most of the time with most international treaties, reality requires that there are institutions that build trust among countries, that minimize free riders, and that maximize the incentives to comply. These institutions do so by developing methodologies, and providing assistance with implementation. They do so by developing clear, transparent processes rather than black boxes. And they do so by being both effective and efficient, a must in a climate control regime where we will likely see the creation of a competitive market for trade in emissions reductions.

But these national and international systems will only be useful if equitable participation in the international agreement is established. Global carbon dioxide emissions totaled about 28 billion metric tons in 1995. The United States is the largest emitter of these gases, both historically and currently. We are also very high on the scale of emissions per person. If we go back to 1950, our cumulative carbon emissions total 180 billion tons. Russia, the number 2 emitter, is 2/3 less, followed by China, Germany and Japan. To get more personal about it, our emissions amount to about 19 tons per person per year. But per capita emissions are 12 tons in Russia, 10 tons in Germany, 9 tons in Japan, 2 ½ tons in China, and less than ½ ton in Kenya.

For now, only 39 countries - albeit 39 of the higher emitting countries - are required to reduce their emissions of greenhouse gases. But just as there are wide disparities among countries in terms of responsibility for carbon emissions, so also are there wide disparities in the ability to pay for reductions, and the opportunities countries have for making reductions without reducing economic growth. Annual GDP per capita calculations using purchasing power parity vary from $460 to $26,000, the latter being more than $460 per week. In fact, the world's three richest individuals hold assets that are greater than the combined wealth of the 48 poorest countries. Developed countries are ½ as energy intense (measured in terms of energy used per unit of GDP) as developing countries, which are, in turn, ½ as energy intense as the Eastern European/Former Soviet Union countries.

Yet to find solutions to global warming, most countries will have to participate in a global regime. Finding an appropriate metric for the equitable distribution of the burden will be a most difficult task, one that has not been joined in the international negotiating process in a thoughtful and thorough manner. In fact, the United States has insisted on developing country participation - not an unreasonable position if solutions to the problem are to be found, and the developing world has insisted on the lead being taken by the developed world, also not an unreasonable position, and one that is consistent with the Framework Convention on Climate Change. What remains, and what is essential, is to come to some accommodation on what can be achieved both politically and practically to satisfy both equity and effectiveness concerns. It is not too early to begin this dialogue now.

Staying the Course

Of course, finding solutions to the climate change issue will require sustained effort over decades - on the part of governments, who must establish the rules and modify them as we learn more of the science, and as technological solutions begin to manifest themselves; on the part of industry, who must innovate, manufacture, and operate under a new paradigm where climate change will drive many decisions; and on the part of the public, who must also switch to a more climate-friendly path in their purchases and in their lifestyles. Can we muster the will to meet this challenge, and can we stay the course, knowing that it will be difficult and convoluted at times?

To stir your thinking, I would like to offer this quote from Alice in Wonderland, where Alice asks the Cheshire Cat: "Would you tell me, please, which way I ought to go from here?" "That depends a good deal on where you want to get to," said the Cat. "I don't much care where---" said Alice. "Then it doesn't matter which way you go," said the Cat. "---so long as I get somewhere," Alice added as an explanation. "Oh, you're sure to do that," said the Cat, "if only you walk long enough."

Well, we can't afford to walk long enough. We must know where we are going, and we must begin on the path to solutions. Today. 

Voluntary Efforts to Reduce Greenhouse Gas Emissions

TESTIMONY


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

Before the Senate Committee on the
Environment and Public works

Washington, DC
March 24, 1999


Mr. Chairman, Senator Baucus, and members of the Committee, thank you for your invitation to testify this morning on voluntary efforts to reduce greenhouse gas emissions. The Pew Center on Global Climate Change was founded in the belief that our generation's challenge will be to address global climate change while sustaining a growing global economy. To ensure that future generations enjoy a healthy environment and sound economy, it is imperative that we address the issue of climate change. And there is no better place for us to begin than with early action to reduce greenhouse gas emissions.

Mr. Chairman, throughout your career, you have been at the forefront of the movement to protect and enhance our nation's environment and natural resources. Your recent decision to retire from the Senate at the end of your current term represents a profound loss to the Senate and to our country. It will also be a profound loss in the field of climate change where leadership will be vitally needed, and where your vision and pragmatism will be sorely missed.

I am the Executive Director of the Pew Center on Global Climate Change, an organization founded by the Pew Charitable Trusts to work constructively on the climate change issue and to put forward meaningful and credible information and analyses to help us forge a consensus for action. The Pew Center and its Business Environmental Leadership Council were established in May 1998. While Council members serve as active participants and advisors to the Pew Center, we do not accept financial contributions from these or any other corporations. We formed the Business Environmental Leadership Council because we believe that the business community is ready and willing to provide the impetus to move forward on the issue of climate change. The Council consists of over twenty of the nation's and world's largest corporations. Together, the annual revenues of these companies total more than $550 billion dollars. Total employment for the companies is well over 1 1/2 million people.

The Pew Center and its Business Council accept the views of most scientists that enough is known about the science and environmental impacts of climate change for us to begin to take actions to address the problem. We recognize that the concentration of greenhouse gases is steadily increasing, and that these gases will remain in our atmosphere for many years -- in some cases, for thousands of years. The current scientific consensus indicates that greenhouse gases generated by human activities could increase the temperature of the earth's atmosphere by 1.8 to 6 degrees Fahrenheit over the next 100 years with potentially serious impacts on the global environment.

Concern over changes occurring to the earth's climate led to United States' ratification of the Rio Framework Convention on Climate Change in 1992. This Convention calls upon our nation to voluntarily reduce our emissions of greenhouse gases to 1990 levels by the year 2000. We will not come close to meeting our obligations under the Rio Convention, nor will many of the other industrialized nations who accepted the same voluntary target. And while we debate the reasons for our failure to meet our Rio obligations, our emissions continue to increase, and the global concentrations of greenhouse gases continue on their inexorable upward path.

For this reason, we do not believe that action on climate change should be delayed until we are satisfied with the progress that has been made on this issue internationally. Instead, we believe that companies can and should take concrete steps now in the U.S. and abroad to assess their opportunities for emission reductions and establish and meet emission reduction objectives.

The companies of the Pew Business Environmental Leadership Council support the view that they should act now, not later. Perhaps some examples of current company efforts would be instructive. BP Amoco, for example, has established a target to reduce its greenhouse gas emissions by 10 percent from a 1990 baseline by 2010. These reductions will be measured using established protocols and will be verified by external observers. BP Amoco has also created a pilot project for internal emissions trading. This allows individual business units to find the lowest cost way of meeting the company-wide target. At this stage, twelve business units are involved in this internal trading program, and five trades have occurred. The program will expand to include all the activities of BP Amoco over the next eighteen months.

Another of our companies, American Electric Power (AEP), has implemented Climate Challenge programs that fall into four main categories: improvements in the efficiency of generating and delivering electricity; increasing the use and output of its non-fossil fuel plants; establishing energy conservation programs at AEP facilities and for its customers; and sequestering carbon in forests. The total cumulative effect of these actions will be the avoidance of approximately 10 million tons of carbon dioxide that would otherwise have been emitted into the atmosphere. In one of the more innovative programs designed to reduce carbon emissions, AEP joined with BP Amoco, The Nature Conservancy, PacifiCorp and the Bolivian Friends of Nature Foundation to establish the Noel Kempff Mercado Climate Action Project in December 1996. The primary goal of this project is to preserve threatened tropical forests in the Province of Santa Cruz, Bolivia, thereby protecting its rich biological diversity and reducing releases of carbon dioxide into the atmosphere. The Noel Kempff Mercado Climate Action Project was approved by the US Initiative on Joint Implementation in December 1996.

Other ambitious examples from Business Council companies include the program of United Technologies which will, by 2007, reduce its energy and water consumption per dollar of sales by 25 percent below 1997 levels, with approximately the same reduction in emissions that cause climate change. This program is global in scope, covering 229 facilities in 36 countries, including 96 in the U.S. DuPont will, by 2000, cut its annual global greenhouse gas emissions by about 45 percent below 1991 levels. Shell International aims to reduce greenhouse gas emissions by 10 percent below 1990 levels by 2002. Since 1990 Baxter International has reduced the global warming impact of its emissions by 81 percent. Baxter also has a goal to improve their energy efficiency 10 percent per unit of production by the year 2005, based on 1996 levels of production. In 1995, Entergy committed to eliminating over four million tons of carbon dioxide emissions per year through 2000.

Regardless of the outcome of negotiations on an international climate change agreement, the members of the Business Council will continue to move forward, because they believe that this is a serious issue that demands a serious response. These programs will include internal audits of their emissions, the establishment of baselines, and the implementation of programs to reduce their greenhouse gas emissions.

The Pew Center recognizes that the nations of the world unanimously adopted the Kyoto Protocol and that this Protocol has already been signed by 84 countries. We believe that this Protocol represents a first step. But we also believe that more must be done to fully design and implement the market-based mechanisms that were adopted in principle in the Protocol. Further, the present Protocol does not ensure the participation of many important countries, and this omission must be remedied if we are to meet our environmental and economic objectives. However, we do not know when this will occur.

But we do expect that at some point in the future, the United States will ratify a climate change treaty that includes a binding commitment to reduce emissions of greenhouse gases. And while our companies are already taking voluntary actions to reduce their emissions, they also want to ensure that they will receive credit for these actions under any future climate change treaty, particularly when since many of these actions are and were undertaken at the request of the U.S. government to fulfill the goal of the Framework Convention on Climate Change.

But the issue is not primarily one of getting credit or providing incentives to act early. The key issue is one of eliminating disincentives: voluntary action, in the absence of credit, can work to the disadvantage of companies who act early to reduce their emissions. It is clearly not in our interest for companies that do the right thing by voluntarily attempting to slow the rate of greenhouse gases entering our atmosphere to be penalized and economically harmed for their efforts.

How could this happen? It is because companies typically delay the most expensive steps until the most cost effective options have been undertaken. Consider the following scenario. One company acts early, and begins by first making the most cost effective reductions. Its competitor does nothing, and continues to emit greenhouse gases. After a number of years, a binding treaty is ratified by the United States. Both companies are now asked to make the same level of reductions. However, if the company who acted early has not received credit for its reductions, its emissions baseline will be set at its new lower level, and it will be required to make additional and more costly expenditures. The competitor, who did nothing, can now meet its emissions target with lower cost reductions, resulting in a competitive advantage. The company who acted early is penalized. And for that reason, many companies may choose not to act early and voluntarily. Without credit for early action, there is a disincentive to act before rules are in place. Thus credit for early action is not just an issue of providing incentives for early emission reductions. It also removes the disincentives that penalize companies that recognize and work to ameliorate the threat that greenhouse gases pose to our atmosphere. Solving this problem requires leadership from Congress. An analysis undertaken by the Pew Center and published in October 1998 finds that federal agencies do not have sufficient legal authority to provide the certainty that firms need to make significant early investments. Congress must provide the legislative framework to remove the disincentives to early action. Such a legislative framework would also demonstrate that the United States takes its commitments under the Framework Convention seriously, and that we, as the nation with the world's highest emissions, are committed to addressing the problem of climate change.

While the Center does not take a position on the merits of any particular bill, we believe there are a number of issues that must be addressed in such a legislative framework. We would like to stress the following:

  • Credits should only be provided for actions that are real and verifiable. Verifiability means that reductions must be measured and monitored using standardized measurement techniques. Any system that is adopted should reward virtuous actors -- not those who engage in sham or paper reductions, or who "game" and manipulate the system. Paper reductions could occur if companies are allowed to count the same reduction twice, or to report a reduction at one facility, while transferring the production -- and the emissions -- to another facility. There can be no effective credit for early action program if we are not committed to establishing a robust and rigorous monitoring and verification effort.
  • The program should be simple and flexible. Participation in a system of credit for early action would be voluntary, but it is in our collective interest to be inclusive, so that many businesses are encouraged to mitigate and reduce their emissions. Companies in sectors that are experiencing high growth must be accommodated as must those who produce products, be they autos or appliances, that use significant quantities of energy. We must also keep transaction costs to a minimum, so that the costs of participation do not exceed the benefits to the participants.
  • The legislative framework should not prejudge the future national implementation scheme. We are not at a point now where we can predict the design of the program that will be implemented in the United States to meet a future international obligation. Any system for credit for early voluntary action should therefore be designed to operate within the framework of any likely domestic regulatory or tax program that might be fashioned to control domestic greenhouse gas emissions. It should also be accompanied by, and integrated into, a set of policies that stimulate early action, including fiscal policies and funding for research and development.
  • Domestic action should be the primary emphasis, but verifiable international projects should be included. The framework should focus primarily on domestic early action, but should also consider provisions related to international actions that comply with accepted international standards. International projects may earn credits for reductions achieved after the year 2000 under the Clean Development Mechanism. These should clearly be incorporated into any early action crediting framework. The small number of projects already accepted into the U.S. Initiative on Joint Implementation that achieved reductions prior to 2000, and meet rigorous standards for verification and monitoring, should also be recognized.
  • The legislative framework should not over-mortgage the U.S. greenhouse gas allocation. The Kyoto Protocol, in its current form, does not contain any incentives to act early. As long as this remains a feature of a future international control regime, credits allocated for early domestic reductions will have to come out of any U.S. allocation granted under a treaty. Therefore, careful consideration needs to be given to the impact of an early credit program on the availability of credits to those who choose not to participate in the early action initiative. Allocating too many credits too early could significantly increase the difficulty of complying with a regulatory regime. On the other hand, removing the disincentives for early action is the objective of an early action program. The design of the program should balance these two objectives, perhaps through the establishment of reasonable baselines.

The Pew Center and its Business Environmental Leadership Council believe climate change is serious business, and that early action is smart business. Our effort is founded on the belief that enough is known about the science and environmental impacts of climate change for us to take action now to address its consequences. Awarding credit for early action is an important first step in what we believe will be a long and intense effort.

Sen. Lugar Statement on Pew Study

Agriculture & Global Climate Change February 10, 1999

Senate Agriculture, Nutrition and Forestry Committee
Chairman Dick Lugar, U.S. Senator for Indiana

Statement by Senator Dick Lugar on Pew Global Climate Change Study

"There is still much uncertainty about global climate change and what impact it might have on agriculture. I welcome the Pew Center on Global Climate Change study, "Agriculture and Global Climate Change: A Review of Impacts to U.S. Agricultural Resources." This report will assist policy makers in the agricultural sector in the ongoing debate over the science and economics of climate change.

"Efforts to mitigate greenhouse gas concentrations can provide unique opportunities to agriculture. The sequestration of carbon, existing now with the increase in conservation tillage practices, the restoration of our wetlands and the Conservation Reserve Program provides our farmers and ranchers with practical mechanisms which can reduce greenhouse gas concentrations. The Pew Report mentions the need for additional research and evaluation of measurement techniques to allow these opportunities for enhanced carbon storage to be implemented.

"Another opportunity for the economy of agriculture would be the development of transportation fuels from cellulosic biomass. Ambassador James Woolsey and I have recently published an article on "The New Petroleum" in the January-February issue of Foreign Affairs. Our article points out that biofuels may have no impact or even a negative impact on emission of greenhouse gases. Because more carbon is stored in the soil when biofuels are produced than is emitted when they are burned.

"Biofuels not only provide economic opportunities for agriculture, they improve the long term productivity of our soils. And they address the world's growing dependence upon oil exports from unstable nations, which is a threat to our national security as well as to our environment. Sound energy and environmental policies go hand in hand."

Back to the Agriculture & Global Climate Change Report.

Press Release: New Study Details Effects of Climate Change On U.S. Agriculture

For Immediate Release:
February 10, 1999

Contact: Shannon Hunt / Kelly Sullivan
             (202) 289-5900

New Study Details Effects of Climate Change On U.S. Agriculture

Projected Regional Impacts on Agriculture Outlined: New Report is First in Series Examining Environmental Impacts of Climate Change

WASHINGTON, D.C. — Climate change has the potential to affect livestock and crops, local agricultural economies and crop production trends according to a new report by the Pew Center on Global Climate Change, which examines the effects of climate change on agriculture. The report finds that while climate change is not expected to threaten the ability of the U.S. to produce enough food to feed itself through the next century, some U.S. agricultural regions, particularly in the north, are expected to benefit, while others, primarily in the south, could face adverse impacts.

The report, released today at a press conference on Capitol Hill, notes that the resiliency and adaptability of the U.S. agricultural sector has made it one of the country's most productive industries and gives the sector the ability to adapt to the changes associated with climate change. However, the report also finds that there remains a potential for negative effects, and particular regions, especially those in the south, will face greater obstacles in adapting to the challenges posed by climate change.

"Anyone with a stake in agriculture should be interested in the findings of this report, which shows that the farming industry we know today will not be the same in the future under the effects of climate change," said Eileen Claussen, Pew Center Executive Director.

At Wednesday's press conference, Agriculture Committee Chairman Richard Lugar (R-IN) and Senator Bob Kerrey (D-NE) both issued statements supporting the Pew Center's efforts to inform American agricultural producers about the potential impacts of climate change.

According to the report, climate change could cause grain yields to fall significantly in southern states, while in the north, longer growing seasons could increase yields of grains such as wheat. Changes in grain production and foraging regions could also cause shifts in the locations of livestock production. Uncertainty in the models does not allow precision in identifying localized effects.

The study finds that in order to develop the most accurate and credible assessment of the possible impacts of climate change, it is important to consider adaptation and human response, as well as to continue to develop improved climate change forecasts. But, given the potential impacts, farmers and the agricultural community must consider new strategies in the face of uncertainty.

The report states that the emerging consensus from modeling studies is that the net effects on U.S. agriculture, with a doubling of carbon dioxide in the atmosphere, may be small. But, these models may understate long-range impacts if the rate or magnitude of greenhouse gas emissions exceed projected levels. For example, extreme events - such as storms, droughts and early and late frosts caused by climate change - also could play a role in determining the ultimate impact of climate change on agriculture.

Additionally, secondary impacts of climate change, such as the potential for higher ozone levels, impacts on water resources and pest populations, contribute to the uncertainty and pose additional challenges not only to individual producers, but also larger agricultural economies.

The value of U.S. agricultural commodities exceeds $165 billion at the farm level and over $500 billion after processing and marketing. "The role of the U.S. agricultural sector is too important for us to ignore these findings," said Claussen. "The agricultural community can adapt to climate change, but adaptation takes time and resources, and with uncertainties related to the timing and magnitude of temperature changes, not all opportunities for adaptation are likely to be realized."

This report is the first in a series of environmental impact reports slated to be released by the Pew Center this year. Other reports in this series will assess what is known about the impact of climate change on weather and includes analyses of its impact on water resources, coastal areas, human health, ecosystems, and forests.

A copy of the report, "A Review of Impacts to U.S. Agricultural Resources," is available on the Pew Center web site at www.c2es.org.

The Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the nation's largest philanthropies and an influential voice in efforts to improve the quality of America's environment. The Pew Center is conducting studies, launching public education efforts, promoting climate change solutions globally and working with businesses to develop marketplace solutions to reduce greenhouse gases. The Pew Center is led by Eileen Claussen the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

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