Climate change is a global challenge and requires a global solution. Through analysis and dialogue, the Center for Climate and Energy Solutions is working with governments and stakeholders to identify practical and effective options for the post-2012 international climate framework. Read more
Cap and Trade in Australia: Lessons on the Path to a Low-Carbon Economy
March 30, 2009, 2 - 3 pm
Capitol Visitors Center, SVC 208-209
Senator Penny Wong, Australia's Minister for Climate Change and Water, discussed Australia's experience in designing a cap-and-trade system and the economic opportunities in working toward a low-carbon economy. She also gave Australia's perspective on the challenges of forging a new global climate agreement and the key role of the United States in that process.
The Australian government is in the process of establishing a cap-and-trade system to reduce greenhouse gas emissions 5-15% below 2000 levels by 2020 and 60% by 2050. Under the system, about 25% of emission allowances will be allocated to energy-intensive trade-exposed industries as transitional assistance pending an international agreement.
Penny Wong was appointed to the Federal Cabinet in the Rudd Labor Government as the Minister for Climate Change and Water in December 2007. Minister Wong is responsible for Australia's climate change and water policies, including the design and implementation of the Government's cap and trade scheme.
Hyatt Regency on Capitol Hill, Washington, D.C.
March 16-17, 2009
The U.S. government is considering a range of near-term actions to address the risks of climate change. The Obama administration and key members of Congress intend to make climate legislation a top priority this year. The earliest action, however, may come from federal agencies being pressured by the courts and states to consider limiting CO2 emissions under existing legislative authority. A key element of federal rulemaking is assessing the costs and benefits of proposed policies. While the costs of reducing greenhouse gas emissions have received much attention from analysts and policymakers, far less attention has been directed at quantifying the benefits of such reductions. In spite of remaining uncertainties, the analytical community should offer practical guidance for informing near-term decisions. Drawing from the environmental economics, impacts, vulnerability, and risk assessment communities, this workshop considers what useful insights can be gleaned now about quantifying the benefits of reducing greenhouse gas emissions. The workshop’s objectives are to develop a set of practical recommendations that decision makers can employ in the near-term and to outline a research path to improve decision making tools over time.
Symposium – Assessing the benefits of avoided climate change in government decision making
Eileen Claussen, President, Pew Center on Global Climate Change
Video: WMV PDF
Dina Kruger, Director, Climate Change Division, Office of Air and Radiation, U.S. EPA
Panel 1: Perspectives on Government Decision Making for Climate Change
Moderator: Steve Seidel, Vice President for Policy Analysis, Pew Center
- Martha Roberts, EDF: Incorporating the benefits of climate protection into federal rulemaking
Video: WMV Slides
- Christopher Pyke, CTG Energetics: A proposal to consider global warming under NEPA
Video: WMV Slides
- James Lester/Joel Smith, Stratus Consulting: Case studies on government decisions to limit greenhouse gas emissions – California, Australia, United Kingdom
Video: WMV Slides Paper
- Paul Watkiss, Paul Watkiss Associates: Social cost of carbon estimates and their use in UK policy
Video: WMV Slides
Panel 2: Challenges to Quantifying Damages from Climate Change
Moderator: Jeremy Richardson, Senior Fellow for Science Policy, Pew Center
- Mike MacCracken, Climate Institute: Overview of challenges to quantifying impacts
Video: WMV Slides Paper
- Kristie Ebi, ESS, LLC: Social vulnerability and risk
Video: WMV Slides Paper
- Tony Janetos, Joint Global Change Research Institute: Ecosystems and species
Video: WMV Slides
- Jon O’Riordan, University of British Columbia: Valuation of natural capital
Video: WMV Slides
Panel 3: The Role of Uncertainty in Assessing the Benefits of Climate Policy
Moderator: Jay Gulledge, Senior Scientist/Science & Impacts Program Manager, Pew Center
- Brian O’Neill, NCAR: Uncertainty and learning – implications for climate policy
Video: WMV Slides
- Joel Smith, Stratus Consulting: Dangerous climate change: an update of the IPCC reasons for concern
Video: WMV Slides
- Michael Mastrandrea, Stanford University: Assessing damages with integrated assessment models
Video: WMV Slides Paper
- Chris Hope, University of Cambridge: Social cost of carbon and optimal timing of emissions reductions under uncertainty
Video: WMV Slides Paper
Panel 4: Advances in the Economic Analysis of the Benefits of Climate Policy
Moderator: Liwayway Adkins, Senior Fellow, Economics, Pew Center
- Steve Rose, EPRI: Federal decision making on the uncertain impacts of climate change: Working with What You Have
Video: WMV Slides Paper
- Richard Howarth, E3 Network: The need for a fresh approach to climate change economics
Video: WMV Slides Paper
- David Anthoff, ESRI: National decision making on climate change and international equity weights
Video: WMV Slides
- Steve Newbold, U.S. EPA: Climate response uncertainty and the expected benefits of GHG emissions reductions
Video: WMV Slides Paper
Click here for more information about the workshop, including expert reports and proceedings.
Ministerial Briefing on European Climate Action
Senate Dirksen Building, Room 562
March 17, 2009, 12 - 1:30 pm
Watch a video of this event: Windows Media Player
As Washington debates new efforts to address climate change, many are looking to the experiences of the European Union for lessons to inform U.S. policymaking. In this high-level briefing, three EU Ministers outline the bloc's climate and energy policies, including recent revisions to the EU Emissions Trading Scheme, and offer insights on the EU's experiences to date.
The New EU Energy and Climate Package
Minister for the Environment, Czech Republic (holds current EU Presidency)
Emissions Trading at the Heart of Effective Climate Policy
EU Commissioner for the Environment
Climate Change as an Opportunity
Minister for the Environment, Sweden (to hold next EU Presidency)
President, Pew Center on Global Climate Change
Read the Pew Center's summary: Emissions Trading in the European Union: A Brief History
European Union and Climate Change
The European Union (EU) is the world’s third largest greenhouse gas (GHG) emitter after the United States and China, accounting for 13 percent of global emissions in 2005. The EU’s emissions intensity (GHG emissions per unit of GDP) is about a third lower than the United States’ and the second lowest among industrialized countries – only Japan’s is lower. Intensity has declined 31 percent since 1990 (in the United States intensity reduced by 25 percent over the same time period). Per capita emissions in the EU are about a third lower than the developed country average and about half those of the United States.
The European Community and the EU member states are parties to the UN Framework Convention and the Kyoto Protocol. The 15 EU member states at the time of Kyoto’s negotiation agreed individually and collectively to reduce emissions 8 percent below 1990 levels by 2008-2012.
The EU has established the world’s most ambitious and far-reaching example of a GHG emissions trading system (ETS). The EU-ETS currently limits CO2 emissions from approximately 12,000 facilities in the 27 EU Member States. An initial “learning phase” (Phase I) ran through 2007; a second phase coincides with the Kyoto Protocol compliance period (2008-2012); and a third phase is planned for 2013-2020.
The EU has also shown its commitment to reducing greenhouse gas emissions in the mid to longer-term by adopting a series of EU-wide policies to implement their “Energy and Climate Package”.
- A commitment to reduce the EU’s greenhouse gas emissions 20% below 1990 levels by 2020, and 30% below if other developed countries agree to comparable reductions and economically advanced developing countries contribute according to their respective capabilities and responsibilities.
- A mandatory target to increase renewable energy to 20% of the EU’s overall energy mix by 2020, including a minimum of 10% biofuels in overall fuel consumption.
- A binding target to improve energy consumption by 20 percent from projected 2020 levels.
- Climate Change Mitigation Measures in the European Union (December 2009)
- Emissions Trading in the European Union: Its Brief History (March 2009)
- Report: The European Union's Emissions Trading System in Perspective (May 2008)
- Summary of the European Commission's Proposed Climate Action and Renewable Energy Package, released on January 23, 2008
- Overview of the European Union Emissions Trading System (2005)
- Presentation: Allocation and Offsets: Experienced Gained by the EU ETS (February 25, 2008)
Presented by Damien Meadows, Deputy Head of Unit, DG Environment, European Commission
For the Center's State and Federal Workshop
- European Commission Climate Change Page
- EU's contribution to shaping the future global climate change regime
- Presentation: EU Emissions Trading (November 2008)
Presented by Jill Duggan
Carbon Markets Insights
Forum on International Climate Action
March 16, 2009, 10 a.m.
Watch a video of this event: Windows Media Player
As Washington policymakers debate new efforts to address global climate change, this forum is an opportunity to hear from officials of Japan, China, Mexico and the European Commission on their domestic climate programs and on key issues in the international negotiations later this year in Copenhagen.
Hon. Eileen Claussen
President, Pew Center on Global Climate Change
Ambassador Shinsuke Sugiyama
Director-General for Global Issues, Ministry of Foreign Affairs
Director, Department of Climate Change, National Development and Reform Commission
People's Republic of China
Director General for International Cooperation, Semarnat
Head of Unit, Climate Change Strategy and International Negotiation
Vice President, International Strategies
Pew Center on Global Climate Change
By Eileen Claussen
March 6, 2009
This article originally appeared in The Huffington Post.
The U.S. and Chinese governments must start right now to build a stronger partnership on energy and climate change. Secretary of State Hillary Clinton’s visit to China in February provided a welcome opportunity for the two nations to engage on a range of issues that are of strategic importance. Climate change and energy security were top agenda items for the Secretary’s discussions, and here’s a vote for keeping them there.
Both issues are of deep concern to the United States and China – climate change because of the grave economic and environmental risks it poses to the two nations and the world; and energy because of the consequences of our nations’ soaring use of fossil fuels both for the climate and for national and global security. As countries prepare for major climate talks in Copenhagen in December, it’s critical that the United States and China send clear signals of each country’s willingness to take significant climate actions suitable to their respective responsibilities.
A recently released report from the Pew Center on Global Climate Change and the Asia Society’s Center on U.S.-China Relations recommends immediate action to create a new, groundbreaking collaboration with China to address the urgent issue of climate change. While some might argue that a decisive response to climate change is impossible in the midst of the current global economic crisis, our report counters that economics favor action, not delay.
Smart investments in alternative energy and other technologies to reduce greenhouse gas emissions can provide immediate economic stimulus in both the United States and China, while also laying the foundation for a new low-carbon economy that will pay dividends for decades to come. Delaying these investments, on the other hand, will drive up the costs of getting emissions under control and will expose the world’s two largest economies to ever-greater risks from the impacts of climate change.
Of course, any partnership between the United States and China on these issues must be built on a shared understanding of the two nations’ respective responsibilities and capacities. As the world’s largest economy and its largest historic greenhouse gas emitter, the United States must move quickly to reduce its emissions through mandatory national legislation. China’s cumulative and per capita emissions are much lower than the United States’, and development remains an overriding national priority. But China, too, must deliver an ambitious and effective national effort.
The Pew Center-Asia Society report includes recommendations developed from input from 50 of the world’s leading scientists, China experts, and political and business leaders. The report recommends that the leaders of the United States and China convene a summit as soon as possible to launch a new U.S.-China Partnership on Energy and Climate Change. The partnership should focus on five priorities.
First, the United States and China need to work together to develop and deploy new technologies to reduce emissions from the combustion of coal. Continuing to rely heavily on coal for electricity, as both countries are likely to do, is going to require large-scale investment in the demonstration and deployment of new technologies to capture and sequester the resulting carbon emissions. The United States and China must coordinate efforts on a series of commercial-scale demonstration projects for these technologies, while also working with the private sector to increase the efficiency of existing coal-burning power plants.
A second priority for collaboration between the two nations is improving energy efficiency and conservation. Both the United States and China have significant potential to pursue low-cost – and in some cases, no-cost – actions to conserve energy and improve efficiency. Key recommendations here are to share best practices and policy experience at the national and state levels; to work with the private sector to encourage efficiency improvements throughout the supply chain; and to lead an effort to forge an agreement among major auto-producing countries promoting a new generation of high-efficiency vehicles.
Third, China and the United States need to work together to bring our electricity systems into the 21st century through smart-grid technologies. Both countries have huge untapped potential for wind and solar power. An advanced, efficient electric power grid is crucial to ensuring that these renewable energy sources are brought on line.
As a fourth priority, the two countries need to take other steps to promote renewable energy. Wind, solar and other renewables are the key to a clean, domestic, diversified energy supply for both the United States and China. Key recommendations here are joint research and development initiatives focused on solar, storage and biofuels technologies.
And fifth, the Pew Center-Asia Society report identifies two cross-cutting issues as especially ripe for U.S.-China collaboration. One is improving our ability to measure, monitor and verify emissions and emission reductions. The other is overcoming barriers to the freer flow of technology, including finance, tariffs, and intellectual property concerns.
Fear of competitive harm has for too long stood as an obstacle to strong climate action by the United States and China. If fashioned carefully, however, closer collaboration can enhance the economic prospects of both nations while giving neither an unfair competitive advantage.
A new partnership between the United States and China also can lay the groundwork for a strong multilateral climate agreement that engages all nations in the work of protecting the global climate. There is no good reason to delay, and every good reason to get started.
- Eileen Claussen is President of the Pew Center on Global Climate Change.
Press Release - February 5, 2009
Contact: Tom Steinfeldt, (703) 516-4146
PEW CENTER AND ASIA SOCIETY ISSUE ROADMAP FOR
ACCELERATED U.S.-CHINA COLLABORATION ON CLIMATE CHANGE
Washington, DC – A report released today by the Pew Center on Global Climate Change and the Asia Society’s Center on U.S.-China Relations provides the Obama administration with a new policy roadmap for immediate action with China on climate change and energy.
Common Challenge, Collaborative Response was produced by the Initiative for U.S.-China Cooperation on Energy and Climate Task Force, co-chaired by John L Thornton, Asia Society Board Member, Professor at Tsinghua University in Beijing, and former co-COO of Goldman Sachs, and by Dr. Steven Chu, prior to his nomination as Secretary of Energy. The report was prepared under the leadership of Orville Schell, Arthur Ross Director of the Center on U.S.-China Relations, and Eileen Claussen, President of the Pew Center on Global Climate Change. (See below for a list of participating organizations, senior advisors and contributors.)
“With a new Presidential administration in the U.S. and an increasing awareness of the dangers of global warming among Chinese leaders, our two countries are presented with an unparalleled opportunity to form a new strategic partnership aimed at averting catastrophic climate change,” says Schell. “Without the active participation of the two largest producers of greenhouse gases being aggressively committed to reducing emissions, efforts by other nations are bound to fall short of being able to halt climate change. This report presents both a vision and a concrete road-map for a new collaboration that could turn the U.S. and China into global leaders on the climate change challenge, while simultaneously helping to transform this most critical of all bilateral relationships in the world into one which is under-girded by cooperation on this crucial common interest."
Today’s world financial crisis should strengthen the need for immediate bilateral collaboration. U.S. and Chinese investments in clean energy, the report argues, could boost the flagging global economy and create new jobs. “If wisely allocated,” the report maintains, “funds invested by both governments in economic recovery can help address climate change while also advancing ‘green technologies’ and industries that will lead to a new wave of economic growth.”
“An effective global response to climate change is possible only with the full engagement and leadership of the United States and China,” according to Claussen. “Closer cooperation with China should be a high priority in a U.S. climate strategy. Working together, the United States and China can advance key technologies and provide a stronger foundation for an effective global climate effort.” The report maintains that a significant scaling-up of U.S.-China cooperation on efforts to avert climate change will enhance prospects for U.S. domestic legislation to reduce greenhouse gas emissions and for a strong and effective new international treaty on climate change under the United Nations Framework Convention on Climate Change.
The report maintains that U.S.-China collaboration can help catalyze a new strategic transformation to a global, low-carbon economy that will be more sustainable while reducing greenhouse gas emissions. At the same time, such close and sustained collaboration between the United States and China will build a stronger foundation for future Sino-American cooperation on other strategic challenges facing both nations in the 21st century.
The report recommends the leaders of the two countries convene a summit to launch a new U.S.-China Partnership on Energy and Climate Change. The presidential summit should outline a major plan of joint action and empower relevant officials in each country to take the necessary actions to ensure its implementation. Following this summit the two nations should scale-up collaboration in the following areas:
• Development and deployment of technologies for the continued use of coal for production of electricity. “Continuing to rely heavily on coal, as both countries are likely to do, will necessitate large-scale investments in research, pilot projects, and deployment of new technologies to capture and sequester the resulting carbon emissions.” The report recommends, “an ultimate goal in both countries must be the commercialization and widespread deployment of carbon capture-and-storage technology. As a critical first step, experts recommend that 10 to 15 large-scale demonstration projects be developed in a variety of settings around the world over the next decade.”
• Increased collaboration to enhance energy efficiency and to deploy renewable energy technologies. “The broader deployment of solar, wind, and other renewable sources, and expanded development of renewable energy technologies, would help both countries decarbonize their electricity systems and expand their low-carbon economies.” As an additional benefit, “the global position of both the United States and China as leading wind and solar power technology manufacturers means that scaling-up these technologies could also support major expansion of these domestic industries.”
• Developing innovative finance mechanisms. “Both governments must commit greater public resources and do so in ways that effectively leverage private investment in a clean energy future.” This will require innovative finance mechanisms and developing new models for licensing low-carbon technologies that can make them broadly available while protecting commercial interests.
Full version of the report and executive summary are available at www.c2es.org/US-China.
Common Challenge, Collaborative Response: A Roadmap for U.S.-China Cooperation on Energy and Climate Change
This report presents a vision and a concrete roadmap for U.S.-China collaboration focused on reducing greenhouse gas emissions to mitigate the effects of climate change. The report was produced in partnership between the Pew Center on Global Climate Change and the Asia Society’s Center on U.S.-China Relations, in collaboration with The Brookings Institution, Council on Foreign Relations, National Committee on U.S.-China Relations, and Environmental Defense Fund. Experts and key stakeholders from the worlds of science, business, civil society, policy, and politics in both China and the United States contributed to the report, or “Roadmap,” that explores the climate and energy challenges facing both nations and recommends a concrete program for sustained, high-level, bilateral engagement and on-the-ground action.
Download Chinese version (PDF)
Related Article by Eileen Claussen about a U.S.-China Partnership on Climate Change
Vice President, International Strategies
Pew Center on Global Climate Change
Submitted to the United States House of Representatives,
Select Committee on Energy Independence and Global Warming
February 4, 2009
The Roadmap from Poznan to Copenhagen – Preconditions for Success
Mr. Chairman, Mr. Sensenbrenner, and members of the Select Committee, thank you for the opportunity to testify on the international climate change negotiations and the path toward a post-2012 climate treaty. My name is Elliot Diringer, and I am the Vice President for International Strategies at the Pew Center on Global Climate Change.
The Pew Center on Global Climate Change is an independent non-profit, non-partisan organization dedicated to advancing practical and effective solutions and policies to address global climate change. Our work is informed by our Business Environmental Leadership Council (BELC), a group of 44 major companies, most in the Fortune 500, that work with the Center to educate opinion leaders on climate change risks, challenges, and solutions.
Mr. Chairman, in requesting my participation in this hearing, you asked me to address several important questions. Before responding to each in turn, I would like to highlight the following key points:
- Governments have made important progress since the 2007 Bali conference in strengthening their national efforts and in laying groundwork for a new multilateral agreement. In anticipation of new U.S. leadership, governments recently agreed to enter into “full negotiating mode” with the aim of achieving a comprehensive agreement later this year in Copenhagen.
- To be effective, a post-2012 climate framework must establish verifiable commitments by all major economies, including economy-wide emission targets for developed countries, and a range of policy commitments for developing countries. The major challenges for Copenhagen are agreeing on: a range of “comparable” emission targets for developed countries; the basic terms of developing country action and a process to further specify them; the appropriate means and level of support for developing country actions; and how countries’ efforts are to be measured and verified.
- The Copenhagen conference should be considered a major success if it produces a strong interim agreement that puts a full, final and ratifiable treaty within reach. This agreement should establish the basic architecture of a post-2012 framework; indicate the range of emission reductions and the level of support that developed countries are prepared to commit to; and initiate a process to determine the specific actions to be undertaken by developing countries.
- To ensure success in Copenhagen, the United States must lead at home, by quickly enacting comprehensive mandatory legislation to reduce U.S. emissions, and abroad, through vigorous multilateral and bilateral engagement. In fashioning domestic legislation, Congress can strengthen the hand of U.S. negotiators. Provisions authorizing a stronger U.S. effort and stronger support for developing countries upon ratification of a new climate treaty could provide important leverage to secure stronger commitments from other countries.
1. What progress has the international community made since the negotiations in Bali?
The UN Climate Change Conference in Bali marked a significant turning point in the international climate negotiations. The United States and other parties to the UN Framework Convention on Climate Change (UNFCCC) launched a two-year process with the aim of reaching a comprehensive agreement at the UNFCCC Conference of the Parties to be held later this year in Copenhagen. In the year since Bali, global emissions have continued to rise at an alarming rate. But there has been encouraging progress both at the national level, with many countries stepping up their climate efforts, and in multilateral discussions, with governments now weighing specific options for a new agreement.
Many developed countries have taken steps to strengthen or establish mandatory programs to reduce greenhouse gas emissions. Most notable is the decision in December by European heads of state enacting a suite of policies aimed at achieving the European Union’s ambitious goal to reduce greenhouse gas emissions 20 percent below 1990 levels by 2020. These include an expansion of the EU’s Emissions Trading Scheme, new measures in sectors not covered by the trading system, and individual member state targets to increase renewable energy to 20 percent of the EU’s overall energy mix. Separately, the United Kingdom set a mandatory target to reduce emissions 80 percent below 1990 levels by 2050. Elsewhere, the Australian government decided to develop a national cap-and-trade system and other measures to reduce emissions 5 to 15 percent below 2000 levels by 2020, and 60 percent by 2050. And the Japanese government launched a voluntary emissions trading system, and set a goal of reducing emissions 60 to 80 percent below 2005 levels by 2050. Japan plans to announce a mid-term emissions target later this year.
A number of major developing countries, meanwhile, have put in place national climate change strategies. China, which adopted a National Climate Change Program in 1997, issued a white paper last year elaborating its policies and actions. China also reported progress toward its ambitious energy intensity target, with energy consumption per GDP down nearly 3.5 percent in the first three quarters of 2008. India adopted a National Action Plan on Climate Change outlining existing and planned actions in eight areas, with a strong emphasis on energy efficiency and large-scale solar power. Brazil adopted a National Plan on Climate Change that includes policies to increase renewable energy and cut electricity consumption 10 percent by 2030. Brazil’s plan also calls for reducing deforestation rates about 70 percent by 2017 – avoiding nearly 5 billion tons of carbon dioxide emissions – with support from the international community.
Mexico recently announced an aspirational goal to reduce emissions 50 percent below 2002 levels by 2050, and is developing sectoral targets with the aim of launching an emissions trading system by 2012. Finally, South Africa, following a detailed analysis of its mitigation options, has set a goal of stopping greenhouse gas emissions growth by 2020 or 2025, with absolute reductions to begin ten years later. The government intends to achieve its goals in part with an escalating price on carbon through a tax, emissions trading, or a combination of market mechanisms.
Beyond these national efforts, governments also have made progress since Bali in building common ground for an effective long-term global response. At the G-8 summit in July in Hokkaido, Japan, President Bush and other leaders supported a global goal of reducing greenhouse gas emissions at least 50 percent by 2050. In a declaration by leaders of the world’s major economies, China, India and other major developing countries pledged to pursue “nationally appropriate mitigation actions…with a view to achieving a deviation from business as usual emissions.” A new Clean Technology Fund launched at the World Bank through the Bush administration’s initiative will help developing countries by supporting the deployment of commercially available clean energy technologies.
Within the UN climate negotiations, meanwhile, governments have begun debating the key issues and options for a post-2012 agreement. Parties have come forward with dozens of concrete proposals addressing key elements under the Bali Action Plan, including developed and developing country efforts; mechanisms for financial, technology and adaptation support; and a long-term vision to guide the international effort. These proposals and debates have highlighted significant differences among parties. But they also reflect a wealth of new and serious thinking within governments about the practical challenges of crafting a workable climate treaty. Perhaps most encouraging are the proposals from a number of developing countries suggesting ways their actions can be strengthened and embedded in a new climate agreement.
For years, governments have engaged in a prolonged pre-negotiation, even as the evidence of accelerated warming continued to mount. In anticipation of new U.S. leadership, parties resolved in Pozna? in December that they were now ready to enter “full negotiating mode.” Conditions are finally set for a genuine negotiation to begin.
2. What are the major challenges faced on the way to Copenhagen?
The Pew Center believes that, to be effective, the post-2012 framework must establish verifiable commitments by all the major economies, and that in order to do so, it must allow some flexibility in the types of commitments taken by different countries.
We believe all developed countries should commit to economy-wide emission reduction targets. They are effective and efficient, and are the foundation of a global greenhouse gas market. For reasons both political and practical, however, most developing countries cannot be expected at this stage to assume economy-wide targets. For these countries, the framework should also allow for policy-based commitments. These would be commitments to implement nationally defined policies – such as energy efficiency standards, renewable energy targets, sustainable forestry plans, or other sectoral policies – to produce verifiable reductions in greenhouse gas emissions.
In addition, the framework must provide incentives to developing countries to reduce their emissions, through market-based mechanisms and public finance, and it must help the poorest and most vulnerable countries adapt to the impacts of climate change.
The major challenges for Copenhagen are to reach agreement on: a range of “comparable” emission targets for developed countries; the basic terms of developing country action and a process to further specify them; the appropriate means and level of support by developed countries for developing country actions; and how countries’ efforts are to be measured and verified. Each presents its own set of challenges; pulling them all together in a comprehensive package will be more challenging still.
Comparability of Developed Country Targets – Under the Bali Action Plan, a new agreement is to ensure the “comparability of efforts” among developed countries, a question that is likely to revolve primarily around mid-term emission reduction targets.
Comparability could depend on host of factors such as a country’s: emissions intensity (emissions per GDP); relative wealth, or ability to pay; economic and population trends; past efforts to reduce emissions; marginal costs of abatement; and other national circumstances (resource base, climate, geography, patterns of trade, etc.). Agreement on a quantified formula to determine respective targets seems unlikely, however. Rather, targets will likely be determined through a political negotiation in which parties take factors such as these into account.
In the United States, President Obama has called for a domestic cap-and-trade system with the mid-term goal of reducing U.S. emissions to 1990 levels by 2020, the same target adopted by the state of California and by the six other states and four Canadian provinces in the Western Climate Initiative. The European Union, by contrast, has set a goal of reducing emissions 20 percent below 1990 levels, and says it is prepared to go further if other developed countries agree to comparable reductions.
Viewed against a 1990 baseline (the base year employed in the UNFCCC and the Kyoto Protocol), the EU target and the one proposed by President Obama appear very much at odds. Circumstances, however, have changed considerably since 1990. U.S. population has grown 19 percent, for instance, while Europe’s has held steady. For the United States, a return to 1990 levels by 2020 would require a very significant level of effort. Measured against a more recent baseline, the EU target and the one proposed by President Obama appear considerably more comparable – each would reduce emissions roughly 15 percent below 2005 levels. Numbers emerging elsewhere fall in a similar range. Australia is considering reductions up to 15 percent below 2000 levels. Canada has talked of reducing emissions 20 percent below 2006 levels. Japan has yet to formally propose a target, but a government analysis released last year suggested a maximum feasible reduction of 14 percent below 2005 levels.
Defining Developing Country Actions – A major step forward in Bali was the agreement by developing countries to negotiate “nationally appropriate mitigation actions.” One of the central challenges for Copenhagen is defining these actions in a way that is acceptable to developing countries and can be accepted by the United States and other developed countries as a genuine commitment.
The key issues are the form of developing country commitments, and the process for determining their specific content. As noted earlier, the Pew Center supports the use of policy-based commitments, in which countries agree to implement nationally defined policies producing verifiable emission reductions. Countries could tailor their policies to their natural circumstances, mitigation potentials, and development objectives. Policies could be sector-based or economy-wide, and could include standards, targets and fiscal or other measures. They should be defined in clear, verifiable metrics, such as energy intensity improvement, growth in renewable energy, reduced deforestation rates, or sectoral targets.
Beyond agreement on a general approach, a process is needed to define the specific actions of individual countries. This process could serve two purposes. The first would be to allow some assessment of the soundness and adequacy of the proposed actions. The second would be to determine the means and level of support to be made available to help implement the proposed actions; under the Bali Action Plan, developing country mitigation actions are to be “supported and enabled by technology, financing and capacity-building.” These two purposes are inherently related: the strength of a country’s commitment will depend in part on the support provided, and vice versa.
The expectations for any given country – and the nature and level of support it is likely to receive – will depend heavily on its particular circumstances. Developing countries strongly oppose any explicit differentiation among them beyond the categories already established in the Framework Convention, which gives special consideration to least developed countries and small island developing states. The bargaining process itself is likely to produce a de facto differentiation, however, with stronger commitments by the most advanced emerging economies, and perhaps none at all by many others.
Support for Developing Country Efforts – Agreement in Copenhagen will not be feasible without major progress on the question of incentives and support for developing country efforts. As noted, the Bali Action Plan makes developing countries’ mitigation actions at least partially contingent on support from developed countries. Developing countries need assistance in analyzing their mitigation potentials, developing and implementing effective policies, deploying climate-friendly technologies, and measuring and verifying their emission reductions. In addition, the Bali Action Plan calls for stronger support for adaptation in vulnerable countries. Although mobilizing support will be especially difficult under current economic conditions and budgetary constraints, early progress in this area will greatly enhance prospects for an agreement.
There is broad recognition that the majority of investment for mitigation will come from private flows, in part through greenhouse gas markets. But additional public finance is needed to supplement private flows for mitigation and to address adaptation. While the level of support to be provided will in the end be critical, other questions must be addressed first. These are the means by which any public finance is to be generated, the institutions through which it is to be disbursed, and their governance.
International climate funding has relied primarily to date on pledging by donor countries; resulting flows are modest and unpredictable. An effective agreement will require adequate, predictable funding. Countries could commit to certain funding levels or formulas, but actual flows would remain subject to national appropriations processes. International mechanisms proposed by some parties – such as levies on international emissions trading, or an auction of international emissions allowances – would not require national appropriations but would be subject to fluctuations in the greenhouse gas market.
Institutionally, the major issue is whether any new funds are managed directly under the Framework Convention, as developing countries have proposed, or at the Global Environment Facility or a multilateral bank, as many donor countries prefer. Governance is another issue, with developing countries insisting on a much stronger say than under traditional donor-weighted models. The new Clean Technology Fund points to a potential compromise – placing any new funds at an existing institution, avoiding the need to re-create institutional capacity, but with a more balanced governance structure.
Measurement, Reporting and Verification – The Bali Action Plan introduced a critical new construct into the climate negotiations with the requirement that the mitigation efforts of both developed and developing countries, as well as support for developing country actions, be “measurable, reportable and verifiable” (MRV). Credible approaches to MRV will be essential to establish and maintain parties’ confidence in their respective efforts and in the overall regime.
Existing practices under the Framework Convention and the Kyoto Protocol should prove adequate in the case of countries with economy-wide targets. New approaches will be needed for developing countries, which now have only minimal reporting requirements and are not subject to international review. If verification is done nationally, as proposed by developing countries, it should follow agreed international guidelines and be subject to international review. A review process could be strictly facilitative, providing expert advice where countries are falling short, or could entail consequences, such as a loss of financial support or access to the carbon market.
How support for developing countries is to be verified will depend on the way it is provided. As some support is likely to continue to flow through bilateral channels, common criteria are needed to distinguish “climate-related” assistance from other aid.
3. In what way should the US contribute to facilitating a success in Copenhagen?
The Copenhagen conference should be considered a major success if it produces a strong, balanced interim agreement that puts a full, final and ratifiable treaty within reach. Such an agreement could take the form of a decision of the UNFCCC Conference of the Parties and should:
- Outline the basic architecture of a post-2012 framework, including the types of mitigation commitments to be undertaken by different groups of countries, mechanisms of support for developing countries, and basic terms and mechanisms of measurement, reporting and verification;
- Set an emissions target range, or minimum target levels, for developed countries;
- Indicate the level of support to be provided for developing country actions, assuming a final agreement with appropriate developing country commitments; and
- Initiate a process to determine the specific actions to be undertaken by individual developing countries.
An agreement of this type would settle fundamental legal and design issues. Further, by specifying the level of effort they are prepared to undertake, and the level of support they are prepared to deliver, developed countries would in essence be placing a concrete and comprehensive offer on the table. This would create the necessary conditions to then negotiate the specific terms of developing country action, the major additional element needed to form a ratifiable agreement.
No country could do more than the United States to ensure success in Copenhagen. Inaction by the United States – the world’s largest economy, and largest historic greenhouse gas emitter – has been the single greatest obstacle to global action on climate change. Over the coming year, the United States has the responsibility and the opportunity to instead drive the global climate effort through renewed leadership both at home and abroad.
First and foremost, the United States must exercise leadership at home by moving swiftly to enact comprehensive mandatory legislation to cap and reduce U.S. emissions. The Pew Center, along with the other members of the U.S. Climate Action Partnership, urges Congress to enact legislation this year to establish an economy-wide cap-and-trade system to reduce emissions 14 to 20 percent below 2005 levels by 2020, 42 percent by 2030, and 80 percent by 2050. We recognize that this timeline and these targets are ambitious. We believe they are achievable and economically sustainable, and that now is to the time to act.
The United States also must exercise leadership abroad through a full-fledged diplomatic strategy to achieve a comprehensive agreement under the UNFCCC establishing fair, effective and verifiable commitments by all major economies. President Obama’s recent pledge of vigorous international engagement and his appointment of a Special Envoy on Climate Change are encouraging signs that the Administration intends to move quickly.
The Administration must immediately engage in the ongoing UNFCCC negotiations, making clear its commitment to achieving the strongest possible outcome, while at the same time helping to set realistic expectations for Copenhagen. Stepping into a negotiation midstream requires great delicacy. The new Administration will surely be welcomed, but it must be mindful of decisions already taken, and it may have to work hard to overcome a deficit of trust. It will be especially important to acknowledge recent movement by developing countries, and to make early progress on incentives for developing country action.
Success in the negotiations will require vigorous efforts on other fronts as well. The United States should work with other countries to quickly reconstitute the Major Economies process launched by the Bush administration. Despite their initial reluctance, many governments have come to recognize the enormous value of a small-group dialogue in laying the foundation for a comprehensive agreement under the UNFCCC. At the same time, the United States must step up bilateral engagement with key countries. With Europe and other developed countries, the Administration must work toward consensus on emission targets and common approaches to developing country engagement. With developing countries, it must signal a strong willingness to provide the support they need, while being clear about what the United States needs in return.
Of all the bilateral relationships, perhaps the most critical, and most delicate, is with China. While China has shown a greater willingness to engage in climate discussions, and is sensitive to its new standing as the world’s largest greenhouse gas emitter, it is reluctant to be cast in the spotlight. Still, closer collaboration on clean coal technology and other energy and climate challenges could produce practical benefits for both countries and help pave the way for a multilateral agreement. Next week, the Pew Center will release a report produced jointly with the Asia Society outlining a proposed roadmap for U.S.-China cooperation on energy and climate change.
4. What are the inter-linkages between the ongoing national and international climate negotiations and how can they enhance and influence one another?
One of the most critical lessons of the Kyoto experience is how important it is that our domestic and international climate policies proceed in tandem. The United States should not repeat the mistake of allowing its climate diplomacy to move out ahead of its domestic policy process. This requires close coordination not only within the executive branch, but more importantly, between the Administration and Congress.
The United States’ leverage in the international negotiations will depend heavily on the pace of domestic climate legislation. The ultimate timing and stringency of U.S. legislation will bear directly on the timing and strength of a U.S. commitment. For that reason, U.S. negotiators may not be in a position to conclude a final agreement intended for ratification until domestic legislation has been enacted or is close to enactment. Still, with the general direction of domestic climate policy now emerging, the United States can and should begin negotiating the overall structure of a new international agreement. At the same time, the Administration should work with Congress to incorporate into legislation provisions that will help at the negotiating table.
Many of the core issues in the design of a domestic cap-and-trade system have implications for international engagement. Some approaches can provide strong positive incentives for developing country action. Allowing U.S. emitters to meet their targets in part through the purchase of international offsets can mobilize private investment to reduce emissions in developing countries. Revenue from the auction of emission allowances can be used to support both mitigation and adaptation efforts. Border measures imposing costs on energy-intensive imports have been advocated as a way to encourage stronger developing country action. However, these could lead to trade and other conflicts, and other approaches can better address the competitiveness concerns of energy-intensive industries.
In fashioning domestic legislation, Congress can build in provisions to strengthen the hand of U.S. negotiators. The targets set under domestic legislation must fundamentally guide the U.S. negotiating position, but reaching an agreement will be easier if negotiators have additional room to bargain. Congress could, for instance, authorize immediate assistance for capacity-building in developing countries, with assistance for technology deployment to be made available upon U.S. ratification and entry into force of a climate agreement. Similarly, Congress could set aside allowance auction revenues to be made available on entry into force for emission reductions overseas above and beyond a U.S. domestic target. Being able to offer an international target somewhat stronger than the domestic target could provide the negotiating leverage needed to secure stronger commitments from others.
To summarize, I believe we now have an historic opportunity to mobilize an effective multilateral response to climate change, and it is incumbent upon the United States to lead both at home and abroad to ensure its success. I commend the Select Committee for bringing the attention of the Congress to bear on these critical issues, and thank you for the opportunity to present our views. I would be happy to answer your questions.
Press Release - February 4, 2009
Contact: Tom Steinfeldt, (703) 516-4146
PEW CENTER’S DIRINGER TESTIFIES BEFORE HOUSE GLOBAL WARMING COMMITTEE
U.S. Leadership At Home and Abroad Key to Success in Copenhagen
WASHINGTON, DC -- Elliot Diringer, Vice President for International Strategies at the Pew Center on Global Climate Change, testified today before the U.S. House Select Committee on Energy Independence and Global Warming. Diringer’s testimony focused on the major international climate change negotiations taking place later this year in Copenhagen, Denmark, and the path toward achieving a post-2012 climate treaty.
“The Copenhagen conference should be considered a major success if it produces a strong interim agreement that puts a full, final and ratifiable treaty within reach,” said Diringer. “We have before us an historic opportunity to mobilize an effective multilateral response to climate change. It is incumbent on the United States to lead both at home and abroad to ensure its success.”
Diringer was one of four panelists invited to address the first House Committee hearing of the 111th Congress focused on international climate negotiations. The hearing examined critical preconditions for achieving success in Copenhagen.
Diringer’s testimony highlighted the following key points. His full testimony is available online at www.c2es.org/testimony/diringer/02-04-09.
• Governments have made important progress since the 2007 Bali conference in strengthening their national efforts and in laying groundwork for a new multilateral agreement. In anticipation of new U.S. leadership, governments recently agreed to enter into “full negotiating mode” with the aim of achieving a comprehensive agreement later this year in Copenhagen.
• To be effective, a post-2012 climate framework must establish verifiable commitments by all major economies, including economy-wide emission targets for developed countries, and a range of policy commitments for developing countries. The major challenges for Copenhagen are agreeing on: a range of “comparable” emission targets for developed countries; the basic terms of developing country action and a process to further specify them; the appropriate means and level of support for developing country actions; and how countries’ efforts are to be measured and verified.
• The Copenhagen conference should be considered a major success if it produces a strong interim agreement that puts a full, final and ratifiable treaty within reach. This agreement should establish the basic architecture of a post-2012 framework; indicate the range of emission reductions and the level of support that developed countries are prepared to commit to; and initiate a process to determine the specific actions to be undertaken by developing countries.
• To ensure success in Copenhagen, the United States must lead at home, by quickly enacting comprehensive mandatory legislation to reduce U.S. emissions, and abroad, through vigorous multilateral and bilateral engagement. In fashioning domestic legislation, Congress can strengthen the hand of U.S. negotiators. Provisions authorizing a stronger U.S. effort and stronger support for developing countries upon ratification of a new climate treaty could provide important leverage to secure stronger commitments from other countries.
The hearing’s other speakers included John Bruton, delegation of the European Commission and ambassador to the U.S., Rob Bradley, director of the International Climate Policy Initiative at the World Resources Institute, and Karen Harbert, president and CEO of the U.S. Chamber of Commerce Institute for 21st Century Energy.
For more information about global climate change and the activities of the Pew Center, visit www.c2es.org.
The Pew Center was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.