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

Press Release: Pew Center Report Urges Reliance on Strong National Programs

For Immediate Release:
November 15, 2000, 10:00 a.m.

Contact: Katie Mandes, 703-516-4146
             Dale Curtis, 202-777-3530

"Meaningful" Compliance System: A Key Test for Global Climate Negotiators
Pew Center Report Urges Reliance on Strong National Programs

Washington, DC - The success and credibility of any global climate agreement will depend in large measure on whether it has provisions to ensure "meaningful compliance," according to a paper issued today by the Pew Center on Global Climate Change.

As Parties to the Kyoto Protocol gather in The Hague, November 13-24, in an effort to finalize rules for implementing the treaty, a central issue is how to guarantee that nations comply with their commitments to reduce greenhouse gas emissions. This presents a complex challenge because the economic and social behaviors that drive anthropogenic greenhouse gas emissions are linked to so many facets of modern life. Another concern is the nature of multilateral agreements, where compliance is more often a matter of will than of compulsion.

"Traditionally, international agreements have had weak or ineffective compliance systems because of sovereignty concerns," said Eileen Claussen, President of the Pew Center on Global Climate Change. "There are ways, however, to encourage meaningful compliance so that reduction targets are actually met by the broadest number of Parties."

"The importance of countries actually complying with their emissions targets cannot be overstated," added Claussen. Furthermore, "the damages from non-compliance-even if later remedied-can be a loss of the trust and good faith that underpins international agreements. The approach to compliance described in this report is preferable to ensuring compliance by making the rules weaker."

National Programs at the Core of Meeting International Commitments

The new Pew Center report was authored by two experts, one in the field of international compliance and enforcement-Eric Dannenmaier, Director of the North-South Center Environmental Law Program-and the other in economics-Isaac Cohen, President of INVERWAY, LLC and former Director of the Washington Office of the UN Economic Commission on Latin America and the Caribbean. The report examines some of the principles and strategies that can help ensure compliance with the international climate change treaty. The report concludes that:

  • National compliance systems should be promoted as a principal means to ensure compliance with the Kyoto Protocol or any future climate change agreement and should seek to balance market-based instruments with strong enforcement;
  • National compliance with international climate change agreements must be verifiable to ensure credibility, and monitoring and verifying compliance with the Kyoto Protocol can benefit significantly from integrating existing national compliance systems into the international system; and
  • Broad participation in any climate change regime is as important as meeting the commitments of the agreements themselves; the Kyoto Mechanisms-International Emissions Trading, Joint Implementation, and the Clean Development Mechanism-can play an important role in boosting both participation and compliance.

A complete copy of these and other Pew Center reports can be accessed from the Pew Center's web site, www.c2es.org.

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

Op-Ed: Getting It Right: Climate Change Problem Demands Thoughtful Solutions

OPINION EDITORIAL
"Getting It Right: Climate Change Problem Demands Thoughtful Solutions"

By Eileen Claussen, Executive Director for the Pew Center on Global Climate Change

Appeared in the Washington Post

November 14, 2000

Many of the government officials gathering this month for the climate change negotiations in The Hague are hoping to put the finishing touches on rules to implement the Kyoto Protocol. But getting those rules right is more important than getting them all completed.

Still unresolved on the eve of the meeting are a range of very complicated political and technical issues that will play a decisive role in determining whether we achieve our goal of stabilizing the earth's climate system. It is not a stretch to say that how we decide these issues will determine how we are judged by future generations.

Decision-makers in The Hague should remember that the Kyoto Protocol was designed as both a first step in reducing atmospheric concentrations of greenhouse gases and as a framework for long-term, cost-effective action. In other words, this is a treaty that will have to stand the test of time. Short-term political considerations-including the desire to resolve all remaining issues this year-should therefore take a backseat to the goal of creating a global system that is transparent, fair, environmentally effective, economically efficient, and as simple as possible.

The Remaining Issues

Four key sets of issues remain in play as the negotiators come together:

  1. The Kyoto Mechanisms. The Kyoto mechanisms were designed to allow countries to pursue the most cost-effective means of reducing their emissions-for example, by engaging in international emissions trading. But there are provisions being negotiated that would make the Kyoto mechanisms totally inoperable, and others that would seriously limit their use. If the negotiators are careless in defining the rules, or determined to constrain when and how the mechanisms can be used, this will simply increase the costs of complying with the Protocol. And the result might be a higher level of noncompliance, an outcome that no one should want.
  2. Carbon Sequestration. The question here is whether and how countries should receive credit toward their emissions reduction targets for using agricultural lands and forests to store carbon. A related question is whether credit should be given for investments in sequestration projects in developing countries. The important role of soil and forest sequestration in stabilizing the global climate system cannot be denied. However, we have not yet defined what types of sequestration activities ought to count-or even how to count them.
  3. Compliance. Yet another unanswered question is whether the Kyoto Protocol will include binding consequences for noncompliance. In other words, how will we penalize those countries that miss their targets? This is a crucial issue to the Protocol's success. Only by establishing and enforcing significant noncompliance penalties can we create a fair and efficient global system, and one that yields results.
  4. Assistance to Developing Countries. Developing countries properly argue that the industrialized world is not doing enough to implement provisions of the United Nations Framework Convention on Climate Change. In that precursor agreement to the Kyoto Protocol, the United States and other nations pledged to support developing countries in their efforts to reduce emissions through capacity building, technology transfer, and funding for "adaptation" initiatives. Decision makers in The Hague will have to respond seriously to these concerns at the same time as they are working on the more fractious issues of the Kyoto framework.

Looking Ahead

As if resolving these immediate questions were not enough of a challenge, everyone concerned with this issue must also give serious thought to the future. After all, the 2008-2012 deadline for achieving the first round of emissions reductions under the Kyoto Protocol is fast approaching. And, even if these initial targets are met (an unlikely prospect), they represent only a first step toward the sustained and significant reductions in emissions that will be necessary to reduce the threat of climate change throughout the 21st century.

A crucial issue for the future, then, is to think about what kind of targets we will have to establish in the years after 2012. At the same time, we need to think about how to involve developing countries in these future global efforts in a more active way. Developing countries are struggling to lift their people to a higher standard of living, and doing so will mean absolute increases in energy use and emissions.

We will accomplish very little, if anything, by requiring developing countries to achieve short-term emissions reductions. The better approach is to craft an equitable and effective framework for future targets for all countries, bearing in mind that we face a common challenge: maximizing the environmental benefits we are able to achieve while minimizing the costs of reducing and limiting our emissions.

Meeting the challenge of global climate change calls for no less than a second industrial revolution. We need to promote new technologies and new investments that will put the entire world on a path to clean economic development. And, in creating the global legal framework to make this happen, we need to make absolutely certain that we get it right.

Appeared in the Washington Post, Tuesday, November 14, 2000— by Eileen Claussen

Promoting Meaningful Compliance with Climate Change Commitments

Download Full Report

Promoting Meaningful Compliance with Climate Change Commitments

Prepared for the Pew Center on Global Climate Change
November 2000

By:
Eric Dannenmaier, North-South Center, Environmental Law Program
Isaac Cohen, INVERWAY, LLC

Press Release

Download Entire Report (pdf)

Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

The ultimate success and credibility of the Kyoto Protocol to the United Nations Framework Convention on Climate Change, or any future climate agreement, will depend on whether most, if not all, Parties meet their greenhouse gas emission reduction commitments. A critical factor in achieving this goal is having a system that is able to identify, sanction, and also deter non-compliance. Traditionally, international agreements have had weak or ineffective compliance systems because of sovereignty concerns. There are, however, means outside the compliance regime of the Protocol to work toward similar outcomes.

The Pew Center has commissioned this report to provide insights on several factors that are often overlooked in the debate on compliance: the role of national compliance systems; national and international monitoring and verification; and the willingness of Parties to participate in the climate change regime. These three factors can significantly contribute to achieving a meaningful and effective compliance system. The report concludes that:

  • National compliance systems should be promoted as a means to ensure compliance with the Kyoto Protocol or any future climate change agreement and should seek to balance market-based instruments with strong enforcement;
  • National compliance with international climate change agreements must be verifiable to ensure credibility, and monitoring and verifying compliance with the Kyoto Protocol can benefit significantly from integrating existing national compliance systems into the international system; and
  • Broad participation in any climate change regime is as important as meeting the commitments of the agreements themselves; the Kyoto Mechanisms can play an important role in boosting both participation and compliance.
     

The importance of Parties actually complying with their targets cannot be overstated. While this report outlines benefits from having flexibility and balance in compliance regimes, the damage from non-compliance — even if later remedied — can be a loss of the trust and good faith that underpins international agreements. We prefer the approach to compliance described in this report rather than ensuring compliance by making the rules weaker.

The Pew Center and the authors appreciate the valuable input and thoughtful comments of Robert Nordhaus, Kyle Danish, Glenn Wiser, Alistair Lucas, and Thomas Husted. The authors would also like to thank Gabriela Donini, Adriana Faria, Maria Junco, and Tricia Choe for their research assistance.

Executive Summary

As Parties to the UN Framework Convention on Climate Change hammer out the details of Kyoto Protocol implementation, a central issue has been how to guarantee compliance with the commitments being made to reduce greenhouse gas (GHG) emissions. Clearly, the promises of the Framework Convention and the Protocol cannot produce desired results unless the pledges are met.

Yet meeting those pledges is a complex task because the economic and social behaviors that drive anthropogenic GHG emissions occur across a broad array of sectors and reach almost every facet of modern life. The ability to assure compliance with GHG emission reduction commitments is constrained by the inherent nature of the commitments — focused on environmental results rather than observable behaviors — and by the nature of multilateral environmental accords, where compliance is more often a matter of will than compulsion.

Despite these constraints, progress under multilateral climate change regimes requires that emission reduction commitments be fully met, at a domestic level, by the broadest number of Parties. In short, the success and credibility of the Kyoto Protocol, or any future climate accord, will depend upon meaningful compliance. This report explores the importance of meaningful compliance in the context of climate change and examines some of the principles and strategies that can help reach that goal.

Recognizing that the compliance regime under the Kyoto Protocol is still the subject of debate and that rules and institutions are still being designed internationally and domestically, the report does not speak expressly to this debate, nor offer guidance on underlying policies and measures to implement the Protocol. It focuses instead on three compliance concerns that the authors believe are fundamental to any meaningful regime and may have special priority for climate change. The report explores how meaningful compliance can be advanced where:

  • National compliance systems are promoted, consistent with domestic priorities and legal tradition, as a core strategy to meet international commitments;
     
  • Monitoring and verification are made routine and credible through cooperative effort and integration with national systems; and
     
  • Participation in the Kyoto Protocol, and in efforts to meet broader climate change policy goals, is encouraged among the broadest possible range of states.
     

T hese factors may not be sufficient to guarantee the ultimate success of an international compliance climate change framework but, the authors suggest, they are necessary to make any real progress.

Examining the first of these concerns, the report looks to compliance regimes that begin at home — on the domestic policy front — albeit with cooperation and multilateral support where needed. The authors reason that the role of states as regulators — translating their international climate change commitments to domestic action — is critical. States are more capable than multilateral institutions of adapting policy choices to their national needs and priorities, and better able to claim jurisdiction over relevant entities where necessary to compel attention to those choices. Concerns about sovereignty that complicate international compliance and limit international institutions can be minimized when compliance efforts are undertaken in a national context under the rules of the prevailing legal system.

Examining relevant national models, the authors find that legal frameworks that balance supportive and adaptive tools with corrective measures can promote compliance domestically. The report highlights successful frameworks that have achieved this balance while establishing a regulatory baseline of minimum standards and giving compliance institutions the flexibility to obtain environmentally sound results. The report also examines how the choice of consequences other than penalties can be used to promote compliance, and how the allocation of penalties, when collected, can be shaped to serve the objectives of GHG emissions reductions more directly.

The authors review the role of voluntary compliance programs and conclude that they may be important supplements to, but not substitutes for, enforceable targets and government oversight. They also conclude that self-assessment and reporting can significantly increase cost-efficiency, and that incentives, including steps to minimize liability for self-reported problems, might be useful in promoting a greater use of self-auditing programs.

The authors also review the fundamental role that civil society can play in promoting effective compliance at a national level, and explore how expanding this role through access to information, policy formulation, and compliance proceedings can help achieve GHG emissions reduction goals.

Taking their analysis of national strategies back into the context of the Framework Convention and the Kyoto Protocol, the authors argue that monitoring and verifying compliance with climate change commitments are critical to assuring the integration of climate commitments into national systems. Yet they note that such oversight will be uniquely challenging because emissions will be estimated, not directly measured, and because implementation strategies will vary greatly.

In light of these challenges, the report outlines principles and strategies for effective monitoring and verification and discusses their relevance in the climate change context. The report examines how direct inspections and monitoring, transparency and openness, independent study and verification, redundancy, and false-reporting deterrence can serve as oversight tools, adding certainty and credibility to compliance assurance.

The authors also highlight reliance on international and regional cooperation — already at the heart of the Framework Convention and the Kyoto Protocol — as a basis for collecting and verifying credible data. Research, information exchange, data gathering, and scientific exchanges envisioned by the Parties to promote the general goals of the accords can also be used to support performance monitoring and verification by building trust and allowing access to compliance data and performance issues on a real-time basis. This cooperative approach may also help uncover concerns before they lead to systemic failures, and thus promote corrective action even as performance is monitored.

The report explores the importance of using national compliance systems as data sources for multilateral monitoring, and integrating the work of national agencies with international compliance and verification institutions. The authors suggest that the international emissions reporting process will gain credibility where estimations are drawn as directly as possible from domestic systems rather than a separate process designed solely for the purposes of the Kyoto Protocol. Efficiencies and accuracy can also be realized where domestic compliance institutions play a direct role as national focal points for GHG emissions reporting and verification.

Finally, the authors examine an issue not always tied to the compliance debate — the question of how to promote participation of Parties in the climate change regime. If meaningful compliance is to achieve real environmental results, some attention must be paid to the number of countries actually willing to pursue those results. This is particularly true of the Kyoto Protocol Annex B commitments, where success is defined as an aggregate average of emissions reductions. The Protocol, almost by definition, cannot be effective if only a handful of states accept and observe its conditions. In essence, a regime that promotes national participation as well as national performance can help assure the Protocol's long-term success.

Thus, the authors examine how a climate change compliance regime might be designed to be compelling to participants even as it compels performance. They suggest that nationally distinct compliance systems, tied to an integrated and cooperative international monitoring effort, can promote greater participation of Parties in the climate change regime — through the Framework Convention, the Kyoto Protocol and beyond.

In sum, the authors' analysis of these three separate but related themes of national compliance systems, monitoring and verification, and participation lead to the following principal findings:
 

  1. Meaningful compliance with climate change commitments can best be achieved where promises made internationally are embraced domestically (promoting behavioral change within communities whose actions are most likely to achieve results), and where participation is maximized across the broadest possible range of states.
     
  2. National compliance systems should be promoted as a core strategy for assuring compliance with the international climate change regime because states are more capable of making policy choices suited to their national needs and priorities, and better able to claim jurisdiction over relevant entities where necessary to compel attention to those choices.
     
  3. Effective national compliance systems tend to balance and combine market-based mechanisms and incentives with regulatory models suited to domestic priorities — emphasizing supportive and adaptive measures, but leading to corrective and punitive responses where necessary.
     
  4. Monitoring and verifying compliance will be substantially aided by using the cooperative mechanisms of the Framework Convention and the Kyoto Protocol in part to oversee and complement national data gathering and emissions estimation, and by integrating existing national compliance mechanisms and institutions into the international system.
     
  5. Broad state participation in climate change regimes may be as important as national performance, and any meaningful compliance system should seek to encourage participation even as it discourages non-compliance.
Eric Dannenmaier
Isaac Cohen
0

Press Release: New Report Explores Ways to Encourage Consumers To Buy Energy-Efficient Home Appliances

For Immediate Release:
October 31, 2000

Contact: Katie Mandes, 703-516-4146
             Dale Curtis, 202-777-3530

New Report Explores Ways to Encourage Consumers To Buy Energy-Efficient Home Appliances

Washington, DC - Public policies to encourage turnover of aging home appliances and purchases of more efficient models could help reduce the emissions linked to global warming, according to a new report released by the Pew Center on Global Climate Change.

"The economics are generally attractive for consumers to upgrade to energy-efficient models when they replace old or broken appliances," said Eileen Claussen, President of the Pew Center on Global Climate Change. "But without targeted public policies, consumers may be unaware of the potential cost savings and environmental benefits of doing so."

"This important Pew Center report illustrates how the use of energy-efficient appliances can help combat climate change," said Jeff Fettig, President and CEO, Whirlpool Corporation. "At Whirlpool, we believe that sound policy can stimulate companies to produce more energy-efficient products and encourage consumers to buy them."

"At Maytag, the extraordinary consumer acceptance of our Neptune washer provides clear evidence that consumers will purchase environmentally friendly appliances if those products also provide superior performance," said Lawrence J. Blanford, President, Major Appliance Division, Maytag Corporation. "Consumer education programs, such as the recent Boston washer study conducted by the Department of Energy and Maytag, bring the message to consumers that they and the nation benefit when they replace their older, less efficient appliance with a newer, high efficiency model."

Lessons On What Works, What Doesn't

The report, entitled "Global Warming and Appliances: Increasing Consumer Participation in Reducing Greenhouse Gases," was written by two leading experts in the field: Everett Shorey of Shorey Consulting, Inc. and Tom Eckman of the Northwest Power Planning Council.

The paper frames the policy issues by identifying the major home appliances that require the most electricity, such as refrigerators, clothes washers, and room air conditioners. Then it analyzes the economic ramifications for consumers of various appliance purchase options. Next it identifies important consumer characteristics to be considered at different stages in the appliance purchase process. Finally, it reviews past attempts to influence consumer choice through public policy initiatives and suggests how new initiatives could be targeted more effectively.

Experience from these past programs has demonstrated that:
  • Well crafted programs including rebates, publicity, and assistance in disposing of old appliances appear to motivate consumers to replace refrigerators before the end of the expected life of the appliance. It is likely that the refrigerator experience can be generalized to other appliances.
  • There is little or no evidence that consumer tax credits are effective in influencing a significant number of consumers to change their purchasing behavior.
  • Energy labels and the US EPA's Energy Star logo are good indicators of cost-effective and energy-efficient appliances, but the labels in themselves are insufficient to cause substantial change in consumer purchasing practices.


The more successful programs offer insights that should drive the development of any future programs:

  • It is much easier to influence consumers who are actively engaged in appliance purchases than to influence the general public.
  • Retail appliance salespeople have significant influence on consumer choice. Incentives aimed at the salesperson, coupled with simple sales tools, can steer consumers in the direction of energy-efficient appliances.
  • Direct financial incentives for consumers may not be necessary.
Continuation of Solutions Series

The appliance report is the second in a new series of reports aimed at identifying solutions to the challenges presented by climate change. Other Pew Center series focus on domestic and international policy issues, environmental impacts, and the economics of climate change.

A complete copy of these and other Pew Center reports can be accessed from the Pew Center's web site, www.c2es.org.

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

The Kyoto Mechanisms and Global Climate Change

The Kyoto Mechanisms and Global Climate Change: Coordination Issues and Domestic Policies

Prepared for the Pew Center on Global Climate Change
September 2000

By:
Erik Haites, Margaree Consultants Inc.
Malik Amin Aslam, ENVORK Research And Development Organisation

Press Release

Download Entire Report (pdf)

Executive Summary

The Kyoto Protocol sets greenhouse gas emissions limits for 2008-2012 for 38 developed coun-tries. Developing countries have no emissions limits. The Protocol also creates three "mechanisms" that enable countries to reduce the cost of meeting their emissions limits. The nations of the world are now negotiating the detailed rules for implementing the Protocol, including the three Kyoto Mechanisms.

A number of countries have made specific proposals to restrict the use of the Mechanisms to achieve environmental or equity objectives. Other countries are arguing for an unrestrictive approach to improve economic efficiency. In addition, the lack of integration among the three Mechanisms may inadvertently restrict or bias their use. Finally, the extent to which countries may avail themselves of the Mechanisms depends both on the rules for the Mechanisms and on the domestic policies adopted by the developed countries to meet their commitments.

This report evaluates proposed rules for implementing the Kyoto Mechanisms in terms of their implications for equity, environmental integrity, and economic efficiency, and discusses coordination of domestic policies with the Kyoto Mechanisms. The authors conclude that:

The Kyoto Mechanisms have the potential to dramatically reduce the costs of meeting the Kyoto commitments. The Kyoto Protocol allows nations to fulfill part of their emissions reduction obligations by purchasing emissions reductions from other nations. Because greenhouse gases (GHG) lead to global effects, it does not matter, from an environmental perspective, where GHG reductions occur. However, because countries and businesses face widely differing control costs, it matters greatly from an economic perspective where GHG reductions occur. Hundreds of analyses using a wide array of economic models agree that the costs of controlling GHG emissions are significantly lower if emissions trading is permitted than if each nation has to meet its emission reduction responsibilities domestically. The broader the trade possibilities, the lower the costs of control.

The rules should allow substitution among the different Mechanisms. Some countries have proposed limiting substitution (fungibility) among the three Mechanisms. Others argue that the Protocol does not allow full fungibility. To limit such substitution, the rules governing use of the Mechanisms would have to be very restrictive. Even then countries could develop means to circumvent the restrictions. It would be better to simply allow substitution among the Mechanisms.

The rules for International Emissions Trading should allow "legal entities" (emitters, emissions brokers, etc.) to participate. Legal entities should be allowed to participate in emissions trading, just as they are allowed to participate in Joint Implementation, the Clean Development Mechanism, and international trading of other goods and services. If governments rather than legal entities trade, the potential efficiency gains of trading cannot be realized because governments do not know the compliance costs faced by the emitters. If the international rules don't allow legal entities to participate, individual governments could circumvent those rules, if they wish, by establishing internationally tradable "obligations to transfer." Rather than encourage the development of complex legal devices, countries should simply agree to allow legal entities to participate in emissions trading.

Lack of harmonization among the three Mechanisms may inadvertently restrict their use. There will be differences in design among the Mechanisms because their purposes vary. For example, only one of the three Mechanisms is designed to promote sustainable development in developing countries. However, an important objective of each of the Mechanisms is to allow legal entities and nations to use the most cost-effective means available to comply with their domestic and international obligations. Differences in rules among Mechanisms that are unrelated to differences in their purposes reduce economic efficiency and should be minimized to the extent possible.

Significant penalties for non-compliance and effective enforcement of those penalties are crucial to the environmental integrity of emissions trading. If the penalties for non-compliance with national emissions limitation commitments are relatively weak, emissions trading enables a country to benefit financially through non-compliance. Such behavior reduces the value of the allowances held by governments and legal entities. Liability proposals seek to limit the extent of such non-compliance by limiting sales to allowances expected to be surplus to the seller's compliance needs. Liability proposals differ in their environmental effectiveness, their economic efficiency, and their impact on the timing of transactions. Negotiators should adopt rules that are maximally effective in encouraging compliance with minimal increase in cost or environmental risk.

The Mechanisms are most amenable to use by countries that adopt domestic cap and trade systems. Countries will need to implement domestic policies to control emissions by different sources if they are to meet their emissions limitation obligations. The cost of compliance with domestic policies can be minimized by giving sources access to the Kyoto Mechanisms to the extent allowed by the international rules. Use of the Mechanisms is easiest to structure for participants in a domestic cap and trade system. However, the Mechanisms could be used, albeit with some difficulty, by countries that adopt emissions taxes or that specify the means of compliance through some types of regulations or negotiated agreements.

Erik Haites
Malik Amin Aslam
0

Land Use & Global Climate Change: Forests, Land Management, and the Kyoto Protocol

Land Use & Global Climate Change: Forests, Land Management, and the Kyoto Protocol

Prepared for the Pew Center on Global Climate Change
June 2000

By:
Bernhard Schlamadinger, Joanneum Research, Austria
Gregg Marland, Environmental Sciences Division, Oak Ridge National Laboratory, USA

Press Release

Download Entire Report (pdf)

Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

Allowing nations to receive credit under the Kyoto Protocol for using lands and forests to store carbon has been, and will continue to be, controversial until key issues are settled. The Protocol sets forth a partial system for including land-use change and forestry, and negotiators are left with the difficult task of closing potentially important gaps in the rules. Without specific crediting rules, countries can posture for interpretations that could allow them to weaken commitments made under the Protocol. With this situation in mind, the Pew Center commissioned this report to identify key issues in the debate regarding terrestrial carbon.

Report authors Bernhard Schlamadinger and Gregg Marland examine how forests and other lands can be managed to slow the rate of increase in atmospheric carbon dioxide levels, review how the Kyoto Protocol deals with forests and other land uses, and identify outstanding issues that must be resolved if the Protocol is to be implemented.

The report finds the following:

  • Forests and the way we manage them provide significant opportunities to assist in climate control efforts.
  • The Kyoto Protocol includes land use, land-use change, and forestry, but it does so selectively: sometimes awarding credits for increasing carbon stored through forest and land management, and sometimes not; sometimes charging decreases in carbon stocks (e.g., as a result of deforestation) against national commitments, and sometimes not. As currently crafted, the system is only a partial one and requires further clarification and practical, effective implementation methodologies if potential benefits from land management are to be realized.
  • A climate control effort that includes forests needs to account for carbon dioxide both released and absorbed, and it needs to do so in a balanced manner that only rewards activities that contribute to slowing the rate of increase of atmospheric carbon dioxide.

While not a panacea, storing carbon could be an important part of a menu of options aimed at slowing the build-up of atmospheric carbon dioxide levels.

The authors have been part of the writing team for the Intergovernmental Panel on Climate Change’s Special Report on Land Use, Land-Use Change, and Forestry, and acknowledge the importance of discussions and interactions with other experts during that process in helping shape this report. Discussions within IEA (International Energy Agency) Bioenergy, Task 25 (Greenhouse Gas Balances of Bioenergy Systems) were also an important source of ideas and feedback. The Pew Center and authors are grateful to Don Goldberg, Mark Trexler, Kristiina Vogt, and Murray Ward, who reviewed the manuscript in draft form, and to Sandra Brown for her guidance as an expert consultant on this report. 

Executive Summary

There is increasing concern that the Earth's climate is changing because of the rising concentration of greenhouse gases in the atmosphere. The United Nations Framework Convention on Climate Change (UNFCCC), drafted in 1992, expresses this concern, and the Kyoto Protocol, negotiated in 1997, sets forth binding targets for emissions of greenhouse gases from developed countries. The Kyoto Protocol represents considerable progress in building a global consensus on how to confront the growth of greenhouse gas concentrations in the atmosphere, but it also contains many ambiguities and leaves many issues that need to be resolved before it can be implemented.

The Kyoto Protocol sets quantitative targets for countries to reduce their emissions of greenhouse gases to the atmosphere, but it recognizes that the same goal can be achieved by removing greenhouse gases from the atmosphere. There are opportunities to reduce the rate of build-up of atmospheric carbon dioxide (CO2 ) through land management activities, referred to as Land Use, Land-Use Change, and Forestry (LULUCF) activities. These opportunities include slowing the loss of carbon from plants and soils — e.g., through reduced rates of deforestation — and encouraging the return of carbon from the atmosphere to plants and soils — e.g., by planting trees (afforestation and reforestation) or improving management of forests or agricultural soils.

This paper explores whether LULUCF activities provide the same long-term benefit for the climate system as does reducing emissions from fossil-fuel combustion; sketches the development of international negotiations on LULUCF issues; looks at the consensus negotiated so far on this issue; and examines the ambiguities of the Kyoto Protocol, the issues yet to be resolved, and the decisions yet to be made before the Protocol can serve as an effective international instrument. An effective instrument would encourage countries to manage the terrestrial biosphere in a way that minimizes net emissions of greenhouse gases while serving other goals such as sustainable development.

Important issues when designing incentives for land-based climate-change mitigation are whether net carbon sequestration can be considered permanent; whether there will be excessive leakage — a phenomenon where, for example, efforts to protect or increase forests in one place hastens their loss elsewhere; whether the potential for LULUCF activities is sufficiently large to offer real opportunity for reductions in atmospheric CO2; and whether analytical techniques permit an accurate measure of carbon gained or retained (or lost) in terrestrial ecosystems.

LULUCF activities differ from emission reductions from fossil fuels because their overall potential is limited by the lands available and the amount of carbon that can be stored per unit of land (“saturation”); and because carbon offsets in the biosphere are at risk of being lost at a later time, whereas emission reductions from fossil fuels not burned in one year do not generally trigger greater emissions in a subsequent year (“permanence”). Saturation is relevant especially in the long term (several decades). Options for addressing the lack of permanence of terrestrial carbon stocks exist and are discussed in this paper.

Several articles of the Kyoto Protocol address land management issues. Article 3.3 provides that some LULUCF activities — afforestation, reforestation, and deforestation (ARD) — will be accounted for in determining compliance with national commitments to reduce greenhouse gas emissions. Many negotiators did not want to sanction credits without actions. Consequently, credits in the LULUCF sector are restricted not just to ARD, but to those ARD activities that are directly human-induced, and then only to activities that are initiated after January 1, 1990. Article 3.4 outlines the procedure for including additional LULUCF activities in commitment periods after the first (i.e., after 2012), and in the first commitment period provided that activities have taken place since 1990.

Implementation of these articles is confounded by a lack of definitions for words like “reforestation” and “forest,” and the implications of choosing among commonly used definitions are very large. The precise definitions of terms and the rules for taking account of carbon emissions and removals due to LULUCF activities will have different impacts on different countries depending on: 1) the nature of their forests, 2) whether or not the LULUCF sector is currently a source (net emitter) or sink (net remover) for atmospheric CO2, and 3) the expected emissions balance of the LULUCF sector over the coming decades. The LULUCF provisions in the Kyoto Protocol can only be implemented once the accounting rules have been determined. Inevitably there is a problem when the commitments have already been agreed to, but agreement on the opportunities and rules for meeting those commitments has not yet been fully reached.

Implementation of the LULUCF provisions of the Protocol raises at least six principal issues for domestic LULUCF activities:

  • What is meant by a “direct human-induced” activity?
  • What is a forest and what is reforestation?
  • How will uncertainty and verifiability be dealt with?
  • How will accounts deal with the issues of (non)permanence (sequestration reversed by emissions at a later date, e.g. if a new forest is destroyed by a catastrophic event) and leakage?
  • Which activities beyond ARD, if any, will be included, and what accounting rules should apply?
  • Which carbon pools and which greenhouse gases should be considered?

The last point includes the issue of whether and how to consider that harvested materials from forests can result in an increasing stock of carbon in long-lived wood products and landfills. The Kyoto Protocol does recognize that greenhouse gas emissions will be reduced when sustainably-produced biomass products are used in place of fossil fuels or energy-intensive materials. Biomass fuels, for example, can be used in place of fossil fuels, and construction wood can be used in place of other, often more energy-intensive, materials such as steel or concrete.
In addition to encouraging certain domestic LULUCF activities, the Protocol, through Articles 6 and 12, provides for mitigation projects in other countries and trading of emission credits. When projects involve only developed countries (Article 6), emission reductions or enhancement of sinks that are credited to one country are subtracted from the assigned amount of the other, and there is no change in the global total of assigned amounts. Projects involving both developed and developing countries (Article 12), referred to as clean development mechanism (CDM) projects, result in an increase in the global total of assigned amounts because credits are added to the assigned amounts of developed countries whereas, in the absence of emission limits in developing countries, no subtraction takes place elsewhere. It is therefore critical that the credits result from real emission reductions, or sink enhancements, that go beyond what would have happened without the project. Herein arises the concept of “additionality.”

Article 12 of the Kyoto Protocol does not specifically include or exclude LULUCF projects. At least two important, project-level issues for LULUCF remain to be addressed:

  • Will LULUCF activities in developing countries be accepted in the CDM and, if so, which activities?
  • What accounting mechanisms are appropriate if LULUCF projects in developing countries can generate emission credits but there is no responsibility for debits if the carbon is subsequently lost?

The potential for increasing carbon stocks in the terrestrial biosphere might be limited compared to total greenhouse gas emissions, but their impact could be considerable in relation to the reductions necessary for compliance in the first commitment period (2008-2012). However, not all changes in carbon stocks in the biosphere are treated equally in the Protocol, some yield credits or debits and some do not. It is inevitable that a system cannot be optimized by treating only a portion of that system, and the definitions and rules for LULUCF will have to be carefully crafted to provide incentives for increasing carbon stocks while recognizing the other important roles played by the terrestrial biosphere and its products. It is, however, important that the transaction costs associated with these rules are not so high that they discourage participation toward the ultimate objective of stabilizing atmospheric CO2. If all of this can be achieved, improved management of the terrestrial biosphere can provide an important contribution toward meeting climate-change objectives, and the Kyoto Protocol can provide incentives for improved management of the terrestrial biosphere.

Bernhard Schlamadinger
Gregg Marland
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Press Release: New Studies Highlight Opportunities for Reducing Emissions While Maintaining Economic Growth

For Immediate Release:
May 23, 2000

Contact: Juan Cortinas (202-777-3519)
             Katie Mandes (703-516-4146)

New Studies Highlight Opportunities for China, Brazil and Argentina to Reduce Emissions While Maintaining Economic Growth

WASHINGTON, D.C. — The Pew Center on Global Climate Change released today three new studies that outline realistic opportunities for China, Brazil and Argentina to address the challenge of climate change. The reports are part of a six report series that examines ways to reduce emissions in developing countries without compromising economic growth.

China, Brazil and Argentina are becoming leaders among developing nations in the international climate change debate and the case studies demonstrate the effectiveness of different policy approaches to emission reductions. In the latest reports, the authors use a linear programming model to conduct an assessment of the technological options available to each country for supplying new electric power generation through 2015.

"These reports are particularly noteworthy because of the geographical and economic importance of each nation examined. They highlight the different challenges and circumstances that developing nations face in addressing environmental problems," said Eileen Claussen, President of the Pew Center on Global Climate Change.

The three previous reports released in the series included an overview piece entitled Developing Countries and Global Climate Change: Electric Power Options for Growth and an examination of the electric power sectors of India and Korea.

Following is a brief overview of each report's findings, recommendations and conclusions:

China

The Developing Countries and Global Climate Change: Electric Power Options in China report was completed by the Beijing Energy Efficiency Center and the Battelle Advanced International Studies Unit. With annual releases of over 918 million metric tons of carbon dioxide into the atmosphere, Chinese decisions affecting energy development and emissions mitigation will significantly impact world climate. The report assesses the current and future state of the power sector to meet projected demand through 2015 under several scenarios

The Chinese analysis yielded several insights:

  • Due to the heavy reliance on coal-fired power generation, baseline carbon dioxide and sulfur dioxide emissions from thermal plants will more than double by 2015.
  • Increasing demand-side energy efficiency by 10 percent could reduce carbon dioxide and sulfur dioxide emissions by 19 and 13 percent, respectively, in 2015, while lowering costs.
  • Expanding the availability of low-cost natural gas through market reforms could reduce emissions of carbon dioxide and sulfur dioxide in the power sector by 14 and 35 percent, respectively, by 2015, and increase costs by only 4 percent compared to the baseline.
  • Accelerating the penetration of cleaner coal technologies could help China reduce sulfur dioxide and particulate emissions, but the associated impact on carbon emissions would be minimal and the cost would increase by 6 percent.

Brazil

Developing Countries and Global Climate Change: Electric Power Options in Brazil, was developed by the Federal University of Rio de Janeiro, Energy Planning Program, Center for Technology, and the Battelle Advanced International Studies Unit. The study points out that Brazil produces relatively few greenhouse gas emissions relative to its size and population. This is mainly due to the dominant role of hydropower in electricity generation. Yet its greenhouse gas emissions could be expected to quadruple, as it changes its fuel mix over the next 20 years.

The Brazilian case study also revealed that:

  • Many new investors may favor natural gas-fired combined-cycle plants that would increase carbon dioxide emissions from 3.4 million tons in 1995 to 14.5 million tons in 2015.
  • Further tightening of local environmental regulations and adoption of renewable energy policies could reduce carbon dioxide and sulfur dioxide emissions by 82 percent and 75 percent, respectively, by 2015.
  • Creating a carbon-free power sector would require an additional $25 billion in cumulative costs by 2015.

Argentina

The last report in the series is entitled Developing Countries and Global Climate Change: Electric Power Options in Argentina and was developed by the Bariloche Foundation also working with Battelle. The report finds that the market reforms the country has been implementing since the early 1990's provided mixed, but on balance, positive environmental results. The country's electric power demand is expected to more than triple over the next 15 years, yet its emissions of greenhouse gases, do not have to increase at the same rate. It finds that investments in natural gas combined-cycle plants and renewable energy sources could provide a prudent path for energy development and environmental protection.

The report also found several key opportunities, including:

  • Adopting policies that favor renewable energy sources and nuclear power would cost $32 billion by 2015 and would decrease carbon dioxide emissions from 14 million tons in the baseline to 11 million tons in 2015.
  • Increasing energy efficiency would reduce total costs by $6.3 billion and carbon dioxide, sulfur dioxide and nitrogen oxide emissions would all decline 20 percent compared to the baseline.

A complete copy of each report is available on the Pew Center's web site, 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 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 President 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.  

Press Release: Climate Change Conference Reveals Innovation and Progress

For Immediate Release :
April 25, 2000

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

Climate Change Conference Reveals Innovation and Progress Across The Private Sector Worldwide and In Many Governments

WASHINGTON, D.C. — The opening of a two-day international conference today, sponsored by the Pew Center on Global Climate Change and the Chatham House/Royal Institute of International Affairs, served as a showcase for many of the most far-reaching innovations that businesses and governments are undertaking to address the challenge of global climate change.

"In the United States, climate change policies have been hotly debated but little action has been taken," said Eileen Claussen, President of the Pew Center on Global Climate Change. "Fortunately, there is substantial progress being made — by governments abroad, businesses here and around the world and by state and local governments here at home."

To complement the conference, the Pew Center on Global Climate Change also is publishing a special supplement on climate change in tomorrow's Washington Post. Significantly, the piece includes statements by 13 Chief Executive Officers (CEOs) of some of the world's leading companies, all members of the Pew Center on Global Climate Change's Business Environmental Leadership Council (BELC), acknowledging that climate change is a real problem that demands action by the public and private sector.

Among these statements are:

"Enron supports market-based initiatives that create efficient, cost-effective and environmentally sound energy systems," says Dr. Kenneth L. Lay, Chairman and CEO, ENRON. "As a company, we are taking steps to provide the world with clean energy solutions and implementing systems to manage greenhouse gas emissions. Our belief in the synergies between state of the art energy management practices and sound environmental policies have translated into effective pre-construction measures for our new headquarters building, which we expect will save $10 million and reduce greenhouse gas emissions by 34,000,000 lbs (or 17,000 tons) per year."

"Technology and innovation move us forward as people on earth," says George David, Chairman and CEO, United Technologies Corporation. "Environmentally benign fuel cells, built by United Technologies for every American space mission ever, may be the next great innovation to power our cars and our homes. A concerted public and private effort will make huge reductions in global climate change impacts for our nation and our world. All we need is the will."

Additional statements by the following CEOs are included in the supplement:

Göran Lindahl, President and CEO ABB Group, Dr. E. Linn Draper, Jr. Chairman of the Board, President and Chief Executive Officer American Electric Power, Harry M. Jansen Kraemer, Jr. Chairman and Chief Executive Officer Baxter International Inc., Ralph Peterson President and Chief Executive Officer CH2M Hill, Charles O. Holliday Chief Executive Officer DuPont, J. Wayne Leonard Chief Executive Officer, Entergy, Paul A. Yhouse President and CEO Holnam Inc., Robert D. Glynn, Jr. Chairman, CEO and President PG&E Corporation, Tag Taguchi, President, Toyota Motor North America, David R. Whitwam Chairman and CEO Whirlpool Corporation, Steven R. Rogel Chairman, President and CEO Weyerhaeuser Company Profiles.

Also included in the supplement are examples from these corporations highlighting their actions to mitigate climate change. Some examples include:

BP Amoco
BP Amoco believes in adopting a precautionary approach to climate change. BP Amoco intends to reduce its greenhouse gas emissions by 10 percent of 1990 levels by 2010 and has implemented a greenhouse gas emissions trading system across all its businesses to achieve this target cost effectively. Its portfolio of activities includes collaboration in research and policy development, growing its solar business and promoting flexible market instruments.

DuPont
By 2010 DuPont intends to reduce global carbon equivalent greenhouse gas emissions by 65 percent and hold energy use flat - in both instances using 1990 as a base year. The company also plans to be using renewable resources for ten percent of global energy use by 2010.

Featured speakers at the conference include:

  • 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

T he 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.

More information on climate change and the Pew Center on Global Climate Change, can be found at www.c2es.org.

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.

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