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
Congressional Testimony of Eileen Claussen: Copenhagen and Beyond: Is There a Successor to the Kyoto Protocol?
Copenhagen and Beyond: Is There a Successor to the Kyoto Protocol?
Statement of Eileen Claussen, President
Pew Center on Global Climate Change
Committee on Foreign Affairs
United States House of Representatives
November 4, 2009
Mr. Chairman, Ms. Ros-Lehtinen, and members of the Committee, thank you for the opportunity to testify on the critical issues confronting the United States and other nations in the negotiations toward an international climate change agreement. My name is Eileen Claussen, and I am the President of the Pew Center on Global Climate Change.
The Pew Center on Global Climate Change is an independent non-profit, non-partisan organization dedicated to advancing practical and effective solutions and policies to address global climate change.1 Our work is informed by our Business Environmental Leadership Council (BELC), a group of 45 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, I would like to focus my testimony on three questions: the type of climate agreement we ultimately need; the type of agreement we might hope to see in Copenhagen; the central issues in the climate negotiations. In the course of addressing these topics, I also will speak to the role of the United States in helping to deliver a strong and effective climate
An Effective Post-2012 Climate Agreement
The 2007 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) adopted the Bali Action Plan, launching a two-year process with the aim of reaching a comprehensive “agreed outcome” at the UNFCCC Conference of the Parties to be held in December in Copenhagen.
The Pew Center believes that, to be effective, a post-2012 climate framework must establish binding, verifiable international commitments for all of the world’s major economies. Mobilizing to effectively address climate change is a serious long-term challenge for all nations. Each nation is likely to deliver its strongest possible effort only when it is confident that its counterparts and competitors are as well; this confidence is best instilled and maintained through mutual and verifiable commitments.
An agreement on commitments for all major economies will be feasible, however, only if it allows some flexibility in the types of commitments taken by different countries. We believe all developed countries should commit to absolute 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 allow fora broader range of 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 – that will yield reductions in greenhouse gas emissions. These commitments must be quantified, and verifiable.
In addition, a post-2012 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.
I will elaborate on many of these core elements of a post-2012 framework later in my testimony.
A Copenhagen Agreement
We have believed for some time that it would not be feasible to achieve a full, final, ratifiable agreement in Copenhagen. While parties have made significant progress since Bali in clarifying issues and tabling concrete proposals, major differences remain on many of the core issues. For some parties, including the United States, domestic political processes have not advanced far enough for them to be able to bind themselves to specific and binding commitments of the type needed to form a final agreement.
We believe that, despite those constraints, the Copenhagen conference might still present an opportunity to significantly advance the international climate effort. It could do so by producing an agreement on the fundamental architecture of a post-2012 framework, which would provide a basis for then negotiating towards specific commitments in a final legal agreement. Ideally, this interim agreement would:
Set ambitious goals. It should recognize the imperative of limiting warming to 2 degrees Celsius and set an aspirational goal of reducing global emissions at least 50 percent by 2050. As mid-term markers, developed countries could collectively declare the range of reductions they intend to achieve by 2020, and developing countries could agree on a peaking year for their aggregate emissions.
Establish a legal framework for mitigation commitments. The agreement should clearly define the nature of mitigation commitments and how they are to be reflected in a final agreement. Consistent with the principle of “common but differentiated responsibilities,” it should allow varying forms and levels of commitments appropriate to national circumstance, as I outlined earlier.
Create a new architecture for climate finance. The agreement must broadly establish the mechanisms, sources, and levels of support to be provided in a final agreement for adaptation, capacity building and technology deployment in developing countries. It also should provide immediate support for developing mitigation actions and for high-priority adaptation needs in highly vulnerable countries.
Establish a sound system of verification. The interim agreement must establish basic terms for the measurement, reporting and verification of countries’ mitigation actions, and of support for developing country efforts, as called for in the Bali Action Plan. This verification system should lead to a clear determination of whether countries are in compliance with their obligations.
In addition, an interim agreement should set a clear mandate for concluding a final legal agreement by a date certain. We believe 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.
I would now like to focus more closely on five core issues that must be considered in the context of both an interim and a final agreement: the adequacy and comparability of developed country emission targets; the nature of developing country commitments; the appropriate means of supporting developing country actions; how an agreement should address verification and compliance; and the legal form a new agreement.
Developed Country Targets – All developed countries except the United States have adopted or proposed emission reduction targets for 2020. Some targets, like the one recently adopted by the new Japanese government, are contingent on a satisfactory international agreement being reached. The European Union and others have adopted emission ranges indicating the reduction levels they will achieve either unilaterally or with an international agreement. As they negotiate the emission targets in a new agreement, countries will assess proposed numbers in terms of both their adequacy and their comparability.
Within the negotiations, the generally accepted frame of reference for the adequacy of developed country targets are figures from the most recent assessment of the Intergovernmental Panel on Climate Change indicating that developed country emissions must decline to 25 to 40 percent below 1990 levels in 2020 in order to stabilize global greenhouse concentrations to 450 parts per million (ppm).2 According to figures compiled by the UNFCCC Secretariat, the targets now proposed by other developed countries would reduce their collective emissions to 16 to 23 percent below 1990 levels. If the target levels now under consideration in the United States are factored in, the collective range falls to 11 to 18 percent below 1990.3 Negotiations may produce stronger targets for some parties. However, if, as appears likely, the aggregate reduction falls short of the range cited by the IPCC, any shortfalls would have to be made up in later years in order to stabilize concentrations at 450 ppm.
Under the Bali Action Plan, a new agreement is to ensure the “comparability of efforts” among developed countries. Comparability can be assessed on the basis of quantified metrics such as relative emissions, population, and gross domestic product, but also depends on specific national circumstances such as resource base, climate, geography, and patterns of trade. Given the multiplicity of factors, countries are unlikely to agree on an explicit formula to assess the comparability of targets, but rather will make their own assessments employing the criteria they deem most relevant.
One critical variable is the choice of base year against which reductions are measured. For instance, viewed against a 1990 baseline (the base year employed in the UNFCCC and the Kyoto Protocol), the European Union’s present target for 2020 (a 20 percent reduction) appears very much at odds with the 2020 cap-and-trade target contained in the American Clean Energy and Security Act (H.R. 2454), passed earlier this year by the House (a 4 percent reduction). Measured, however, against a 2005 baseline, the two targets appear considerably more comparable: a 14 percent reduction for the EU, and a 17 percent reduction under the House bill.
A related issue is whether targets should be measured according to internationally agreed accounting rules or individual countries should be allowed to set their own. (Such rules would relate, for instance, to the use of international offsets and the accounting of land use-related emissions and removals). National accounting would give countries far greater flexibility in designing their domestic policies, but would compromise the integrity of the international agreement, making it more difficult to compare and to verify countries’ targets, and to link domestic emissions trading programs.
Developing Country Commitments – A major step forward in Bali was the agreement by developing countries to negotiate “nationally appropriate mitigation actions” (NAMAs). A central challenge in the negotiations 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 establishing genuine commitments.
Most of the major developing countries have now adopted national climate strategies outlining steps they are taking that help reduce their emissions and, in some cases, additional steps they could take with international support. China’s National Climate Change Program describes a range of efforts, including ambitious energy efficiency and renewable energy targets, and President Hu Jintao recently announced that the government plans to set carbon intensity goals. India has adopted a National Action Plan on Climate Change outlining existing and planned actions in eight areas, and recently adopted detailed programs to promote energy efficiency and large-scale solar power. Brazil’s National Plan on Climate Change includes policies to increase renewable energy and cut electricity consumption 10 percent by 2030. It also calls for reducing deforestation rates about 70 percent by 2017, with support from the international community.
Mexico has set 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.
The fundamental question is how to “internationalize” the actions of, in particular, the larger developing countries with greater responsibility and capacity to reduce emissions. Critical issues within the negotiations include: the process, if any, for developing NAMAs and matching them with support; whether NAMAs include only actions receiving international support, or also actions that countries will undertake on their own; how actions are inscribed in an agreement; how ambitious they must be; and whether and how to differentiate expectations for different categories of developing countries.
Some developing countries have proposed, in various forms, the establishment of a “registry” where countries could list their actions. The listing could be for the purpose of international recognition, or as a step toward lining up support for specific actions, either through public finance or through emissions crediting. Other proposals from the United States and Australia would establish common formats for inscribing the actions of developed and major developing countries (called an “appendix” by the U.S., and a “schedule” by Australia), indicating a legal symmetry in their respective commitments.
These proposals could be usefully combined: an interim agreement could launch a registry process whereby countries propose and seek support for their actions; and the final actions, both unilateral and supported, could be reflected in a common schedule or appendix in a final agreement. What is critical is that these actions be quantifiable and be described with sufficient specificity to allow for their verification and review.
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. 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.
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. Donor countries have been reticent to propose funding levels without greater consensus on the nature of any new funding mechanisms. Issues include: whether any new fund or funds should be administered by the U.N. or an existing multilateral financial institution such as the World Bank; the roles of donor and recipient countries in governing new funds; whether public finance should be generated through an international mechanism such as a carbon levy, whether countries should generate their contributions internally, or both; whether contributions should come from both developed and major developing countries; and whether contributions should take the form of commitments or pledges.
H.R. 2454 would set aside some of the emission allowances under a domestic cap-and-trade system to generate support for reduced deforestation, adaptation, and clean technology deployment in developing countries.4 These provisions would use allowance value to provide ongoing support from the United States for these critical international purposes, on the order or tens of billions of dollars through 2050. Similar provisions and allocations are contained in the Clean Energy Jobs and American Power Act (S. 1733), introduced by Senators Kerry and Boxer. A comprehensive and effective international climate agreement will be most feasible with predictable financial support from developed countries. We believe it is essential that U.S. climate legislation retain these provisions, and that on that basis, the United States should be prepared to commit substantial support for an initial period under a new climate agreement.
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.
Established mechanisms under the UNFCCC and the Kyoto Protocol – in particular, the rigorous reporting and review requirements for developed country emission inventories – provide a valuable starting point for the verification of mitigation efforts under a new climate agreement. However, existing practices would need to be strengthened and adapted, and new ones established, to provide credible verification within a framework that is likely to incorporate
diverse mitigation actions and commitments.
We recommend the following approaches: annual emission inventories from all majoremitting countries, required immediately for developed countries, and phased in, with support, for major developing countries; national verification of mitigation commitments and actions, in accordance with international guidelines; regular implementation reports providing detailed information on a party’s implementation, and verification, of its mitigation commitments or actions; and expert review of parties’ GHG inventories and implementation reports.
We believe that, in addition, an agreement should provide for a clear determination of whether parties are fulfilling their obligations. We recommend the establishment of an Implementation Committee appointed by parties and empowered to make determinations of
parties’ compliance or non-compliance on the basis of expert review reports and other input from parties. This compliance procedure should be largely facilitative, rather than punitive, geared toward helping to identify and overcome obstacles to implementation. 5
Legal Form of a New Agreement. One overarching question is the very form of a new agreement. The present negotiations are proceeding under two parallel tracks, one under the UNFCCC and a second under the Kyoto Protocol (the United States is a party to the former, but not the latter). Some parties, in particular many developing countries, strongly favor retaining the Kyoto Protocol and adopting any additional provisions in some form of parallel agreement under the UNFCCC. If this parallel agreement took the form of an amendment or protocol, it would be legally binding. It would not be binding, however, if it took the form of a decision or decisions by the Conference of Parties, as some parties favor.
Alternatively, most developed countries now favor merging the two tracks in a single comprehensive agreement. Such an agreement could take the form of a new binding protocol, and could incorporate elements of the Kyoto Protocol. Developed countries differ, however, on what features of Kyoto should be retained. For instance, the European Union and others favor maintaining an international system of accounting for emission targets, while the United States supports allowing the option of national accounting.
The United States has proposed an “implementing agreement” with many of the same legal characteristics as a protocol. The proposal differs significantly from the Kyoto Protocol in that it would establish mitigation commitments for major developing countries, which, as I noted earlier, would be reflected in a common “appendix” alongside the targets (and any other commitments) of developed countries. An implementing agreement could be structured to succeed or to stand alongside the Kyoto Protocol.
We believe the best outcome would be a single, comprehensive, binding instrument, such as a protocol or an implementing agreement. We further believe that in the interest of comparability, verifiability and a smooth-functioning international greenhouse gas market, this agreement should set common accounting standards for emission targets.
We have seen recent progress, in the United States and in many other countries, toward stronger action to address climate change. Copenhagen presents an opportunity to build on that momentum by beginning to erect a post-climate framework that can give countries confidence that all are contributing their fair share to the global effort. In Copenhagen, governments must get as far as possible in hammering out the basic architecture of this post-2012 framework.
What can be achieved in Copenhagen will depend in part on what the United States is able to bring to the table, in terms of both emission reduction figures and financing. But it is important to point out that many issues will require resolution in order to reach a comprehensive agreement on a post-2012 framework. Developing countries must agree to make commitments that can be internationally verified; the legal form of a final agreement must be agreed; a financing mechanism must be accepted and at least initial financing must be brought to the table; and an approach to verification and compliance must also be accepted and agreed. If the world can make progress on these issues, and a broad framework successfully negotiated, we believe this would be substantial progress. If this is not possible, a political declaration, with a long-term objective of 2 degrees Celsius and perhaps resolution of some of the outstanding issues, may be all that is possible. In all cases, it would be important to establish a new end date for the negotiations in 2010.
Mr. Chairman, I thank the Committee for the opportunity to present our views on these critical issues. I would be happy to answer your questions.
1. For more on the Pew Center, see www.c2es.org.
2. See Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Chapter 13, page 776.
3. The U.S. range is based on the targets proposed by President Obama (14 percent below 2005, the equivalent of 1990 levels) and in the Kerry-Boxer bill (20 percent below 2005, or 6 percent below 1990).
4. For reduced deforestation, the bill sets aside 5 percent of allowances in 2012, declining to 2 percent in 2040. The set-asides for adaptation and clean technology are each 1 percent of allowances in 2012, rising to 4 percent in 2030.
5. For additional details, see Verifying Mitigation Efforts in a New Climate Agreement at http://www.c2es.org/docUploads/brief-verifying-mitigation-efforts-in-new.... pdf
Experts from the Pew Center on Global Climate Change offer insights into the latest Congressional and regulatory efforts to reduce U.S. emissions, and outline recommendations for a comprehensive framework agreement in Copenhagen as a foundation for negotiating a ratifiable treaty.
Tuesday November 3
Fira Gran Via Convention Centre, Barcelona
Vice President, Federal Government Outreach
Presentation: U.S. Domestic Climate Legislation - State of Play (pdf)
Vice President, Policy Analysis
Recent U.S. Federal Actions to Address Climate Change (pdf)
Vice President, International Strategies
Presentation: A Copenhagen Agreement (pdf)
- Brief: A Copenhagen Climate Agreement
- Post-2012 Climate Policy Briefs
- U.S. Senate Legislation (under debate)
- U.S. House Legislation (passed House in June)
- Paper: Legal Form of a New Global Climate Agreement
- Report: MRV in Post-2012 Agreement
- U.S. Climate Action Partnership (USCAP)
Post-2012 Climate Policy Brief: Verifying Mitigation Efforts in a New Climate Agreement
A new global climate agreement will be most effective if parties are confident that it enables them to assess how well others are fulfilling their obligations. This can be achieved through a rigorous system of measurement, reporting, and verification. Key elements should include: annual emission inventories for all major greenhouse gas-emitting countries; national verification of mitigation commitments and actions in accordance with international guidelines; regular reports from parties detailing their implementation and verification of their commitments and actions; and expert review of parties’ inventories and implementation reports. Beyond verification, a new agreement should provide for a clear determination of whether a party is in compliance with its commitments. The compliance approach should be largely facilitative, rather than punitive, geared toward helping to identify and overcome obstacles to implementation.
Post-2012 Climate Policy Brief: Comparability of Developed Country Mitigation Efforts
The “comparability” of climate mitigation efforts undertaken by developed countries can be assessed in many different ways. Some relevant factors such as emissions, population, and GDP are readily quantified and compared; others, such as a country’s geography, economic structure, or trade profile, are not. Given the multiplicity of factors at play, parties are unlikely to agree on an explicit formula to determine, or to assess the comparability of, their respective efforts. Rather, efforts are likely to be agreed through political bargaining in which countries emphasize the metrics and national circumstances that most favor their positions. The outcome will likely rest on parties’ mutual assessments of one another’s efforts, employing the criteria they deem most relevant.
LOS ANGELES -- Sub-national leaders from over 50 countries gathered last week in Los Angeles, California as part of Governor Schwarzenegger’s 2nd annual Global Governor’s Climate Summit. Topics ranged from public health impacts of climate change to technological solutions to the role of youth leadership and education. The summit kicked off with a surprise appearance by Harrison Ford, announcing the establishment of a new collaboration convened by Conservation International called Team Earth, which will focus its first effort on global deforestation. Forests emerged as a recurring theme of the discussions here. Motivated by concern that deforestation must not be excluded from the negotiations of a climate treaty this time around, 11 governors from the U.S., Brazil, and Indonesia signed a memo addressed to their nations’ presidents, pressing for a robust deforestation policy mechanism to come out of Copenhagen.
Leaders from across the globe also expressed growing concern about preparing their citizens to adapt to climate change. It is clear that leaders on the local level are worried about the impacts that are already being felt by their citizens and are anticipating their growing role in implementing policies to address adaptation, in addition to greenhouse gas reductions. Some have even begun to classify jobs in climate adaptation as “green jobs” and are working to expand the number of these jobs in their jurisdictions.
Another overarching takeaway is the sense that local and regional governments embrace their important role in combating climate change, repeatedly referring to policies implemented at sub-national levels across the globe as examples for national action.
BANGKOK -- It’s no surprise, in the pre-Copenhagen posturing, that the United States is once again seen by many as the single greatest obstacle to an effective global climate effort. The truth, though, is that the U.S. is hardly alone. On all the key issues – emission targets, developing country commitments, and finance – other key players aren’t ready to strike a final deal either.
In his address last week to a high-level UN climate summit, President Obama offered an impressive list of early accomplishments. Yet as was painfully evident, absent comprehensive legislation from Congress, the administration comes to the negotiating table with loads of good intention, but not yet prepared to take on binding international commitments.
Other countries, meanwhile, appear to be showing some movement.
Both China and India, long viewed as the other principal barriers to agreement, are signaling a new willingness to act - at least domestically. President Hu Jintao told the UN summit that China will set a goal to reduce its carbon intensity by a “notable margin.” India’s government is talking about setting domestic goals to limit its greenhouse gas emissions. These steps are encouraging, and may help inoculate the two countries against blame in the event Copenhagen is a failure. But in neither case has the government offered specific numbers or said it is prepared to translate its actions into international commitments.
Yukio Hatoyama of Japan did come to the summit with a number. Two weeks earlier, fresh from his landmark election victory, the new prime minister had set aside the previous government’s goal of reducing emissions 15 percent below 2005 levels by 2020, a target roughly in line with the numbers being debated in Washington. In its place, he declared a far more ambitious goal of 25 percent below 1990 levels – provided other major economies pony up their fair share.
Speech by Eileen Claussen, President, Pew Center on Global Climate Change
New York, NY
September 29, 2009
Thank you very much. It is a pleasure to be here in New York, and I am honored to be your keynote speaker today. The organizers of this seminar have asked me to provide an overview of what's been happening in Washington, DC on the climate issue in recent months. And I want to preface my remarks with a request. If you happen to disagree with anything I say, please refrain from shouting "You lie."
In all seriousness, I want to commend the organizers of the seminar for their excellent sense of timing. Over the past two weeks, we have seen a whirlwind of activity on the climate issue. As we speak, talks are under way in Bangkok in one of many, many such meetings in preparation for the U.N. climate meeting in Copenhagen at the end of the year. Two weeks ago, there was a meeting in Washington of representatives of the nations that are part of the Major Economies Forum. This was followed by the September 22nd U.N. summit on climate change here in New York that included President Obama, Prime Minister Hatoyama and many other heads of state.
It is a wonder we don't all have climate meeting fatigue. And whether all of this meeting and all of this talking will lead to definitive action is really the question of the hour when it comes to climate change.
In his remarks at the UN last week, President Obama captured the urgency and challenges facing global climate action. He said: "Difficulty is no excuse for complacency. Unease is no excuse for inaction. And we must not allow the perfect to become the enemy of progress."
Later in my remarks, I will talk in more detail about the progress taking shape on the international scene on the climate issue. I also will address the significance of the steps already taken by the Obama administration to tackle our climate and clean energy challenge. Finally, any discussion of U.S. policy by definition means a discussion of U.S. politics. So we may be here for awhile.
The Science and the Polls
But before talking about the prospects for climate action in the United States, I want to open with a look at the science. And I do this because I believe very strongly that it is important to preface any assessment of where we stand in addressing the climate issue - either domestically or internationally - with a clear illustration of why we are having this discussion.
We have gathered here at the Japan Society not because of the delicious breakfast buffet or because they're offering free coffee (well, maybe one or two of us are here for these reasons). But the main reason why we are here is because climate change is real, and we need to do something about it.
It is so easy for many of us, including myself, to get caught up in the politics and policy discussions around this issue. And, in the process, we can forget about the magnitude of the problem we are trying to solve. In every debate about this issue, in every panel discussion, in every engagement with those who might disagree with us on the details of how to respond, we must always put the science first.
And the science is clear: Climate change is happening now, it is happening in our own backyards and across the globe, and it is happening much faster than predicted.
In recent years, we've observed significant melting in the Arctic and Antarctic, more intense storms wreaking havoc on small island nations and on global powers like the United States and China, and greater occurrences of severe drought in certain regions and floods in others that devastate crops and infrastructure. These problems will only worsen without significant action to cut back global emissions of greenhouse gases.
But while the science is one clear reason to act, there is another imperative, one that is particularly important in a time of economic recession. If we are to build ourselves out of this economic downturn, we must do it by creating a new economy, and the economy that is ripe for rebuilding is the energy economy.
This is a point on which you can find broad agreement among Republicans, Democrats, and Independents. The American people understand that our energy status quo is unsustainable. Among the biggest problems: we rely too much on foreign sources of energy when doing so threatens our security and our economy. And, at the same time, other countries are working hard to develop viable alternatives. We must be a part of this competition. Business leaders, policymakers, entrepreneurs, teachers, students, parents - all of us must capitalize on the opportunity to put American ingenuity to work and make the United States a global leader in advancing a clean energy transformation.
And so we really have no choice but to move forward. Because of the science and the need to grow our economy, we cannot continue doing what we are doing. And guess what? The American people for the most part understand this. Despite all the noise emanating from town hall forums and rallies aimed at painting the climate issue as a political loser, most Americans want action from their government that starts us down the path to a new energy future.
Two ABC News/Washington Post polls in April and June found that 75 percent of Americans support federal action to regulate emissions to address global warming ... 75 percent. And just last month, a 52-percent majority of Americans said they support a cap-and-trade policy to reduce U.S. emissions.
Voters in the U.S. also have a positive view of the potential for job creation under new climate and clean energy policies. For instance, two surveys this summer by Zogby and the Pew Charitable Trusts found that 68 percent and 65 percent of voters, respectively, said climate and clean energy legislation will drive job creation or have no adverse impact on jobs.
Please do not get me wrong: I am not saying that the politics of this issue are a slam-dunk or that it will be easy to pass legislation. What I am saying is that a solid majority of the American people understand the need to act on this issue. And they will support new policies that are cost-effective, that generate new jobs through investments in clean energy, and that start America on a path toward a higher level of energy security.
And the truth is, American policymakers have begun to respond. Despite Washington's deep immersion in the details of health care reform, there has, in fact, been a fair amount of discussion (and action) related to the climate issue this year in Washington.
Will the Administration and Congress reach agreement in 2009 on a comprehensive plan to begin to slow the growth of U.S. greenhouse emissions? Using the language of the health care debate, I would say the prognosis is very doubtful. But at the same time, we know that this is a problem we cannot ignore if we want to see less damage to our environment and future economic growth. Our priority must be to keep building on this effort and to keep moving forward.
For months, everyone involved in the climate issue has been talking about whether the U.S. needs to pass comprehensive legislation before the climate talks in Copenhagen in December - many have suggested that without a completed U.S. plan in place, the international talks will fail.
I don't share this view. I believe what's important right now is that the U.S. be able to show progress in Copenhagen. We need to show: 1) that we are serious about this issue; and 2) that we are indeed taking action to begin to reduce emissions.
Whether the negotiations in Copenhagen will produce anything close to a final agreement is a question I intend to explore later in my remarks. But I do not believe that the talks are destined to fail solely on the basis of whether the U.S. has a cap-and-trade plan in place or not.
The Domestic Picture
With that, I want to address where we stand right now on the climate issue in this country. In the middle of the current health care debate, we often forget that the U.S. House of Representatives did something quite remarkable back in June. It passed by a vote of 219 to 212 a bill that would establish an economy-wide, greenhouse gas cap-and-trade system. And this week a cap-and-trade bill will likely be introduced in the Senate. I'll address the Senate debate in a moment, but the significance of the House's action this summer deserves more than a passing mention.
The House bill, formally known as the American Clean Energy and Security Act, would reduce aggregate emissions for all covered U.S. sources to 83 percent below 2005 levels in the year 2050. Interim reductions would be as follows: 3 percent below 2005 levels in 2012, 17 percent below those levels in 2020, and 42 percent below those levels in 2030.
The House legislation also included a wide range of critical complementary measures to help address climate change and build a clean energy economy. Yes, it was a narrow win ... and yes, it was a difficult vote for many in the House ... and yes, we still have a steep hill to climb in the Senate because there remains a great deal of opposition. But the House effort led by Congressmen Henry Waxman and Edward Markey sent a clear signal to families, workers, and businesses that a clean energy future is possible.
Think back a few years to the early part of this decade - no one in their right mind would have predicted back then that American lawmakers would do this, that they would approve a measure this far-reaching, designed to achieve this level of reductions in U.S. emissions. But they did. And the vote in the House on the American Clean Energy and Security Act is just one in a string of actions taken in Washington in recent months that show a real commitment on the part of our elected leaders.
As we approach the one-year anniversary of the election of President Obama, it is easy to forget how, in his first months in office, he made some crucial decisions that will result in real reductions in U.S. emissions of greenhouse gases, and real changes in how we produce and use energy in the decades ahead.
Going back to February, the economic stimulus package signed by the President that month included more than $80 billion for everything from smart-grid technologies to renewable energy development to energy efficiency improvements and mass transit. This funding represented a relatively small share of the overall stimulus, but it is a start - a down payment on building the clean energy infrastructure that we need to keep our economy strong for decades to come.
Then there was the U.S. Environmental Protection Agency's decision in April, in response to a 2007 Supreme Court decision, to open the door to regulation of greenhouse gases. The EPA's proposed finding is that these gases contribute to air pollution that may endanger public health or welfare. If finalized, as is expected, this would mean that greenhouse gases could be regulated under the federal Clean Air Act. Of course, the Obama administration still prefers a legislative solution to reducing U.S. emissions - but the EPA action is a clear sign to Congress and others that the White House will move forward on this issue in the event that Congress canít agree on a plan. And, in fact, there was an attempt last week to see if the Senate could agree to a rider on an Appropriations bill that would delay EPA action under the Clean Air Act. It never came to a vote because there were not enough votes to pass it, which means that EPA action to deal with greenhouse gases can be expected.
The Administration has, in fact, been quite busy on the climate issue over just the past few weeks. For example, earlier this month the EPA proposed the first regulation under the so-called "endangerment" finding - it's a joint proposal with the Department of Transportation to require cars to achieve 35 miles per gallon by 2016. By acting to reduce vehicle emissions, the Obama administration is acknowledging that we need to work on many fronts on this issue simultaneously if we want to achieve the broad-based reductions that are needed to protect the climate.
Just last week, the EPA finalized a new reporting system that, for the first time, will provide accurate data on all significant greenhouse gas emitters in this country. The new program will cover approximately 85 percent of the nationís GHG emissions and apply to roughly 10,000 facilities. A greenhouse gas registry is the foundation for building a successful and transparent federal program and marks a significant step in the process to U.S. reduce emissions and protect the climate.
Also in September, the White House floated a draft proposal that would set a goal for federal agencies to reduce their emissions by 20 percent by 2020. The federal government is the nation's largest energy consumer. This action, if approved, could help spur the development of clean-energy technologies and make it easier for the private sector to follow suit. It is another clear sign of the White House's commitment to action on this issue, and a sign that we can begin making progress right now.
So let me sum up where we stand: In his statements, his appointments, his stimulus plan, and his early executive actions, President Obama has given every indication that he understands the urgency of the climate challenge and is determined to meet it. And, with the House having passed comprehensive cap-and-trade legislation, the United States is in a very different place on this issue than we were even one year ago.
Adding to the sense that times have changed is the involvement of leading U.S. businesses in the search for solutions. There is a group that many of you may know about called the U.S. Climate Action Partnership. And what's unique about this group is that its leadership includes a range of Fortune 500 companies, in partnership with the Pew Center and leading environmental organizations. And, over the past couple of years, USCAP has become a powerful advocate for strong and swift action on climate change.
A decade ago, it would have been unimaginable for leading businesses to sign on to an agenda advocating cap-and-trade and other measures to achieve dramatic reductions in U.S. emissions. But the USCAP Blueprint for Legislative Action is part and parcel of a campaign that has engaged leading business executives from companies such as Alcoa, GE, Shell and many others to become active and very visible supporters of climate solutions. Their call for strong action and regulatory certainty on this issue has found a receptive audience in Washington and has provided a vital push for Congress.
Of course, now that the House has passed legislation, the focus has shifted to the United States Senate. Getting climate legislation through the Senate would be challenging in any circumstance - but it is especially challenging right now because the Senate is embroiled in a highly contentious debate on another topic: health care. The idea that senators will pick up the mantle of transforming the nationís energy economy while still working on plans to reform the one-sixth of the U.S. economy connected to health care is frankly wishful thinking.
The bottom line is that until health care is resolved it will be hard to get traction for anything else. Indeed, the manner in which health care is resolved could make it harder or easier to achieve progress in the Senate on climate and energy legislation. I donít want to dig too deep into the details of Senate procedures except to note that winning health care through the reconciliation process - in other words, with a simple majority of senators, all of them (or almost all of them) Democrats, would not help the prospects for enactment of a cap-and-trade bill. It might get health care through, but it will be decidedly unhelpful for the climate debate.
And here's why ... Health care reform could potentially draw the support of the entire Democratic caucus in the Senate - or almost the entire caucus. Climate change legislation is different. We can't expect every Democratic senator to vote for cap-and-trade - for example, several Democrats from heavy manufacturing states and states that rely heavily on coal for electricity and jobs are not yet sold on this approach. So cap-and-trade will need at least some solid Republican support - and right now even Republicans with years of leadership on climate change have been reluctant to step into the fray. To the extent that the health care debate widens the partisan divide even further, then getting these Republicans on board for climate legislation will be that much harder.
Adding to the challenge in the Senate are a number of other important items on the legislative calendar - namely financial regulatory reform and the annual spending bills, all of which could further push back the full Senate's consideration of climate legislation.
So where does this leave us?
Well, right now, Senators John Kerry of Massachusetts and Barbara Boxer of California are putting the finishing touches on a cap-and-trade bill to present to the Senate. The bill may include one Republican supporter as well. Along with the majority leader, Harry Reid of Nevada, Senators Kerry and Boxer continue to say they want to see action in this Congress - perhaps by December, perhaps spring of next year - but the bottom line is that the leadership remains committed. And optimistic.
However, getting the 60 votes required in the Senate for a cap-and-trade bill will be very hard. Not only will the Senate need to overcome partisan divisions that will likely harden in the course of the health care debate, but senators also will need to resolve a number of very difficult issues standing in the way of agreement on climate legislation. These include an array of very technical questions, such as the allocation of emission allowances, how we should reduce costs for consumers and businesses, how we should deal with carbon offsets, how much oversight of the carbon market we should insist on, and how we should treat nuclear power.
So given all of these things, it's my belief that Senate passage of an energy and climate bill is unlikely to happen this year. A better bet would be early 2010 - and I say early 2010 because, as we all know, next year is an election year, and the later we get into the year the harder it will be to draw sufficient support from politicians of both parties.
But even in 2010, getting climate legislation through the Senate will still be a heavy lift. Among the keys to success: the White House will have to become much more deeply engaged in the details of the legislation.
We have all seen how the Obama Administration was criticized for its tendency to push onto Congress the responsibility for forging a plan to reform health care. And the opinion among the commentariat is that the President's re-engagement on the health care issue through his address to Congress earlier this month has helped to create new momentum for action. At the appropriate time, there's no doubt that we'll need strong engagement from the White House on climate change as well.
The Obama Administration will need to advance a fairly detailed vision for a climate bill and become more involved in the legislative process. That vision would have to include solid answers to questions like: How will this program help (and not harm) the economy? How will energy intensive manufacturing industries not be disadvantaged? How will this bill advance key low-carbon energy technologies, such as carbon capture and storage, nuclear power, wind, and solar energy?
To beat back the small but vocal anti-climate sentiment and to create enough cover for Republicans and moderate Democrats who are on the fence about supporting climate action in the current political environment, the White House needs to get out there and aggressively make the case for action - and, yes, flesh out the details of exactly what that action should entail.
People want to know how climate and energy legislation can ultimately benefit the economy in their hometowns and in their states. The White House and its allies need to talk about that - and they also need to talk about the costs of not acting on this issue.
This is something we often forget to emphasize in this debate. In the same way that we need to base every discussion of this issue on the science and what it tells us, we also need to remind people that climate change will create very substantial costs for our businesses and our economy if left unaddressed. Consider the costs of having less water available for farming, or of increased wildfires in the West, or of cleaning up and rebuilding after a greater number of floods and more violent storms. All of these are real and substantial costs - and they need to be part of the discussion.
Businesses and families will experience these costs of inaction. For instance, reductions in California's water availability could cost farmers upwards of $3 billion per year by 2050, and increased wildfires in the West could cost homeowners an additional $2 billion annually.
To underscore these financial risks, I want to share with you a short quote from an article about the costs of addressing climate change. The article is by Jeff Sterba, chairman and CEO of PNM Resources, a leading electrical utility company in the southwestern United States.
"Make no mistake," he wrote. "There is a cost to addressing climate change that we will all bear. But the highest cost would come from ignoring climate change, and the lowest cost will come from sound federal legislation."
I repeat: the highest cost will come from ignoring climate change. We need to keep drilling that into people's heads. And, in fact, the costs of ignoring this issue are not limited to the costs of dealing with the impacts of climate change. There are also costs to business associated with not knowing how government is going to act.
Businesses are poised to invest billions in advancing a clean energy economy, but right now, with the regulatory picture so uncertain, businesses will continue to delay making the necessary investments in new energy sources and new low-carbon technologies. The longer they wait to do this, the more expensive it will be. And the more we will cede to others the opportunity to lead the world toward a new energy future.
You can look at this issue from either an environmental or an economic standpoint - or both. And no matter how you look at it, we need to act. President Obama recognized this last year when speaking about climate change. He said: "Now is the time to confront this challenge once and for all. Delay is no longer an option. Denial is no longer an acceptable response. The stakes are too high. The consequences too serious."
And the truth is, we are beginning to act. As I have said, the Obama Administration already has taken important steps that ultimately will bring real reductions in emissions from cars and trucks, buildings, and other sources. Combined with the House legislation and the EPA's proposed greenhouse gas endangerment finding, the U.S. is sending a clear sign that that we are finally starting to give this issue the attention it deserves.
Is all of this activity enough to convince the rest of the world that the United States is intent on doing its part to reduce emissions? Only time will tell. All I can say right now about the international discussions is this: In the same way that we need to be realistic about the prospects for a breakthrough on cap-and-trade in the United States in 2009, we also need to be realistic about what can be achieved this year at the global level.
Last week's U.N. climate summit in New York offered a welcome chance for the leaders of some of the key countries in this dialogue to clarify their positions and their intentions as we look ahead to the Copenhagen meeting in December.
President Hu Jintao of China used the forum to say that his country would set a target to reduce the carbon intensity of its economy. While he did not provide exact figures, or say the government is prepared to make this an international commitment, he said China would cut carbon emissions in relation to gross domestic product by a "notable margin" by the year 2020. He also talked about taking specific steps toward increasing forest coverage and increasing the share of non-fossil fuels in the nationís energy mix.
Japan's new Prime Minister, Yukio Hatoyama, reiterated his pledge that Japan would reduce its emissions 25 percent below 1990 levels by 2020 - a much more ambitious target than the one set by the previous government - provided that all major economies commit to do their fair share.
Both Mr. Hatoyama and Mr. Hu also spoke of the importance of international cooperation in areas from technology transfer to financing for developing country mitigation efforts.
President Obama, for his part, emphasized all the steps taken by his administration in just eight months to move this issue forward both domestically and internationally. There is still quite a way to go. But even as the administration is working toward an effective program at home, it is reaching out in a constructive way in search of diplomatic solutions. For instance, the United States is leading a revamped Major Economies Forum where 17 of the worldís largest-emitting nations meet to help narrow gaps in the broader global climate talks. The Pew Center, I would note, was among the very first to advocate a major economies dialogue of this type.
The administration also has launched a high-level energy and climate dialogue with China. The two countries recently announced plans for a joint Clean Energy Research Center, and I expect we'll hear about other new partnerships when President Obama visits China in November.
I mention these initiatives to underscore the value of maintaining momentum on the climate issue, and to highlight the fact that the United States and other nations are indeed engaged in serious work to begin to carve out a response. But I also believe in the value being realistic. So while there is indeed much work under way, achieving a full and final outcome in Copenhagen this year is unlikely. Instead, we believe the goal in Copenhagen should be a strong interim deal. Under this scenario, negotiations would continue next year toward the ultimate goal of agreeing to a climate treaty that includes all of the major economies.
The Pew Center has never believed it was likely that we would see a final, ratifiable treaty emerge from Copenhagen. Rather, we have suggested that it would be both important and ambitious for Copenhagen to produce an interim agreement. Such a deal would establish a new international legal structure - including the types of obligations to be taken, by whom, and how they will be verified - so that countries can move on to negotiating specific commitments in a final treaty.
A good Copenhagen agreement must do a number of things. First, it must outline a new legal framework for verifiable mitigation commitments by all major economies. In our view, these commitments should include economy-wide emission reduction targets for developed countries and a broader range of lower-carbon policy commitments for major developing countries. Second, a Copenhagen agreement must establish the nature and scale of support that will go to developing countries to reduce emissions and adapt to climate change. Third, it must include a clear mandate to conclude a final agreement by a date certain. And fourth, it must set an ambitious level of effort. This should include a global goal of cutting emissions at least 50 percent by 2050; an aggregate 2020 target for developed countries; and a collective peaking year for developing countries.
The United States doesnít need final legislation at home in order to negotiate an interim agreement of this type. And once the framework is agreed, the United States and other countries will then be in a much better position to fill in the details, including their specific national commitments.
There's no doubt that anything short of a full and final agreement in Copenhagen will still strike some as a woeful failure. But given how complex the issues are, and how far apart countries remain, achieving even a provisional agreement of this kind in the short time left is a huge challenge. I think we can meet that challenge, and use the Copenhagen meeting as an opportunity to put some of the toughest issues behind us and create positive momentum going forward. Rather than a grand culmination, Copenhagen could be a powerful springboard toward a final deal.
And the United States can and must play a leadership role in making this happen.
For those of us who are involved in this debate, the important thing right now is to keep our eyes on the prize. The United States and other nations may not get everything done this year that we believe is necessary, but as long as we can continue to move forward, and as long as we can continue to see policymakers at all levels embracing steps that can result in real progress on this issue in the months and years ahead, then we are indeed getting somewhere.
Does the dreamer in me hope we can do more this year? Of course. My dream is that health care moves forward in a bipartisan fashion and the economy shows clear signs of turning up ... and Congress then comes together across partisan lines to pass a robust cap-and-trade plan that then positions the United States to lead the way to a final agreement in Copenhagen. What a year that would be.
But I am also a realist, and the realist in me says stop dreaming. And perhaps all of us involved in this discussion need to adjust our expectations and work to ensure that the process continues moving forward in a substantive way. We have a great number of accomplishments to point to, and there has been a great deal of progress on this issue in the last year alone. This is something to celebrate, and to build on, in the weeks and months ahead.
Thank you very much.
Whenever the UN climate change negotiations convene these days, as they will again later this month in Bangkok, an oversized digital timer glares at delegates from the front of the hall, methodically counting down the days, hours, minutes, even seconds until the upcoming climate conference in Copenhagen. (The online version at the website of the UN climate secretariat reads at this writing 81:13:02:28.)
This staged countdown is a stark, if superfluous, reminder of the expectations looming for Copenhagen, arguably the most pivotal moment in climate diplomacy since Kyoto 12 years ago. With the dangers of global warming more clear and present today than any had foreseen then, countless are not only eager but desperate for Copenhagen to deliver what Kyoto did not – an effective global response.
But with the days quickly ticking away, it is becoming clearer to all that the time is too short. A blitz of high-level diplomacy might yet conjure a miracle, but less than three months out, the odds of a final, ratifiable deal by the time the clock hits zero appear virtually nil.
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The article originally appeared in the Council on Foreign Relations, August 2009
Interviewee: Eileen B. Claussen, President, Pew Center on Global Climate Change
Interviewer: Stephanie Hanson, Associate Director and Coordinating Editor, CFR.org
In June 2009, the House of Representatives approved legislation that would establish a cap-and-trade program to reduce U.S. greenhouse-gas emissions. The bill now awaits action by the Senate. Meanwhile, a controversial program (NYT) for trading in used vehicles for new cars with higher fuel efficiency standards has been extended by Congress. Eileen Claussen, president of the Pew Center on Global Climate Change, says Congress might pass U.S. climate legislation in 2010, after it finishes dealing with health care reform. In the interim, the Obama administration is "moving forward in a very deliberate way under the Clean Air Act because in fact they have to. They don't actually have much of a choice." She stresses the importance of U.S. domestic policy for making progress on global climate talks, set for December 2009 in Copenhagen. "Everything globally is dependent upon [U.S. domestic legislation] before all the other pieces can fall into place, which might take a considerable amount of time. But until you at least get this, it's not clear that you can get any of the other pieces."
The cash for clunkers program has been billed as partly an environmental plan and partly an economic stimulus. In your opinion how does this program rate as climate policy?
One of the important parts of the climate policy is to deal with transportation. The cash for clunkers program moves vehicles in the right direction. This particular legislation doesn't move them, I think, as far as they need to be moved or as far as they will be moved when the rulemaking is done [i.e. when new national fuel efficiency standards are set] and there are specific standards for automobiles. But you do have to trade in a vehicle with poor mileage for one with better mileage. The statistics on the first phase of this program, the one that would have just run out, had an average trade-in mileage of just under sixteen miles per gallon, and the cars that people then bought [had an average of] twenty-five miles per gallon, which is actually a 61 percent improvement. That will cut down on greenhouse-gas emissions from vehicles within the transportation sector. It's a big first step for the climate.
In any future kind of iteration of the program, are there specific recommendations that you would make for modifying it to be more beneficial in terms of climate policy?
The bigger the gap between the car you bring in and the car you go away with, the better it is in terms of climate. Here the requirement, I think, was four miles per gallon but it turns out that people actually traded in [for] cars that were considerably more efficient than that. The more you can move that up to make sure that you only get more efficient vehicles, the better it is for the climate. It isn't clear to me that they're actually going to do that. They're just going to put more money into the existing program, which still makes a significant difference.
The administration has been spending a lot of political capital on health care reform, something that a lot of Americans consider a priority. With climate change, there was a Pew poll late last year that found that nearly 40 percent of those polled didn't think that climate change should be a policy priority. What does this mean for the U.S. Congress and climate policy? Will Congress be able to pass legislation, or will the Obama administration need to resort to using the Environmental Protection Agency or the Clean Air Act to make progress on greenhouse-gas reduction?
Health care is much more difficult than the administration thought it would be. I don't think they thought it would be easy, but it looks like it's going to be very very difficult to pass something. Then the administration would be in the position of asking Congress to take on another difficult, controversial issue, which can also [be] relatively partisan in how Congress looks at it. There's no question that everyone in the administration would prefer a legislated solution to moving forward with the Clean Air Act, but they also don't have that much choice. They're going to have to move forward with the Clean Air Act in the absence of legislation. So, I don't think it's the first choice. They're going to try to push Congress pretty hard after health care is done to pass something. There's a fair chance that you might get something passed in 2010. But they're moving forward in a very deliberate way under the Clean Air Act because in fact they have to. They don't actually have much of a choice.
How does that timing of potentially moving climate legislation forward in 2010 mix with the UN climate meeting in Copenhagen in December 2009?
If I were the administration, I would want much more certainty than just having a bill through the House before I negotiated a target. And the odds of the Senate actually passing something and having a conference before Copenhagen are very small. I just don't think that's going to happen. But it's important to understand that there are a whole set of issues that have to be resolved in Copenhagen and it isn't entirely clear that any of them could be resolved. There is of course the issue of what the developed countries agree to in terms of an absolute reduction [in greenhouse-gas emissions]. But there is also the issue of what the major developing countries would agree to, which I think is not going to be targets. There would have to be some fairly robust policy, and I'm not sure that we're that close to figuring out what these kinds of policies might be. And then there's a third issue which has to be resolved in Copenhagen and that is what kind of money the developed countries are going to put on the table to help developing countries move to a less carbon-intensive economy. This is not an easy year for any of the developed countries to come forward with significant sums of money, certainly not in the range that the developing countries are now asking for.
So, yes, what the United States is willing to do is crucial to a deal, but so is the resolution of all of these other issues. I myself think that the best we can get from Copenhagen given the complexities and where countries are is a framework, and then try to spend 2010 filling in the details. Hopefully by then we will have a better idea in the United States of the kinds of details that we ourselves can fill in.
How important do you think the United States is in that Copenhagen process? If what you felt to be the best-case scenario for U.S. climate policy unfolded in the next year, how much effect will that have on global climate talks?
The United States is crucial. There cannot be and there will not be another global agreement without the United States. I mean there just won't. We are too big a contributor to the problem and we're a big economy. I don't think any other country would agree to anything unless the United States was a full participant. We have to work very hard to see if we can pass legislation in the United States, which means working very hard on the Senate to see if you can find a piece of legislation and sixty votes that are a good step for the climate. I don't think it's impossible to do that, but we have to work very hard on it, to figure out what the compromises are and whether you can do it. If health care is really difficult, there's a question of whether the Senate wants to take up something else that is really difficult after they do that, assuming that they actually come to a conclusion on that.
But [U.S. climate change legislation] would be the highest priority. Everything globally is dependent upon that step before all the other pieces can fall into place, which might take a considerable amount of time. But until you at least get this, it's not clear that you can get any of the other pieces. To me the most important thing is getting a domestic policy in place.
Can you outline three or four things that are critical components of any kind of U.S. legislation on climate policy?
Obviously we need to have targets that are ambitious but achievable. The House bill did have targets that are ambitious but achievable. Once you have that which is environmentally the most important thing you can have, you have to work very hard to find ways to make sure that the costs are manageable. That can be done through a variety of different means. One issue is how you allocate allowances, assuming it's a cap-and-trade [program] which it probably will be, how you allocate so that people do not experience sharp increases in electricity prices or in gasoline prices, so that companies do not have electricity increases that they can't deal with. You can do that through allocation; you can do it through a cost-containment mechanism; you can do it through the use of offsets. You probably need to do it through some kind of combination of all of those. And all of those, by the way, are controversial.
A final issue--you have to tie U.S. domestic action to the international picture, and there the House bill included some trade measures which the Obama administration has said they do not support, and actually we at the Pew Center do not either. There's now been a letter sent by a group of moderate Democrats in the Senate saying that they must have something like that [trade measures] because of the possible competitiveness impact from countries that don't have significant climate change programs. How you work that out and how you find a compromise there that can still get you sixty votes is extremely hard.
If something like that does go through in the Senate, what effect do you think that will have on global climate talks?
It depends on exactly what it looks like, but if for example it is somewhat automatic, which it is in the House bill, that's going to have a very negative effect internationally. If, on the other hand, the president has a fair amount of discretion, that would be helpful. If the trigger for the trade measures is [climate] programs that are similar to what we do, that's a huge problem because the developing countries, and this is [who] the measures would be directed toward, need to do something that is significant, but it's not going to be the same as what we do. So if the test is the same, or equivalent to, or something like that, that's a huge problem as well. Clearly those are the two things that are most important if you're going to have [trade measures]. We don't like them, but if you're going to have them, [it's important] to make sure that they're not automatic and that they're not triggered by something which developing countries would find impossible to meet.