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
Statement by Elliot Diringer, Director of International Strategies, Pew Center on Global Climate Change
June 7, 2007
Today's G-8 agreement represents modest but genuine progress toward an effective multilateral response to global climate change. Chancellor Merkel deserves enormous credit for forging a new consensus among G8 leaders that hopefully will be a foundation for concerted action.
In accepting the U.S. offer to host a meeting of major economies, the other G-8 leaders rightly insisted that this new dialogue go further than proposed by President Bush and consider international policies, not just a long-term goal. With their call for a global agreement under the UN Framework Convention by 2009, G-8 leaders have set a very ambitious timeline for establishing the post-2012 framework but offer no clear vision of what it should look like. Wide differences remain on fundamental issues such as the need for binding international commitments. And without such commitments, emissions will continue to grow.
If the United States and other G-8 governments are serious about this ambitious timeline, the next critical step will be launching formal negotiations under the Framework Convention at the upcoming talks in Bali. The goal in Bali should be a clear road-map toward a comprehensive post-2012 agreement with binding commitments by all the major economies.
Statement by Eileen Claussen, President, Pew Center on Global Climate Change
June 4, 2007
With its new national climate change strategy, and the establishment of a new National Leading Group headed by Premier Wen Jiabao, the Chinese leadership is signaling that it recognizes the critical importance of this issue to China and to other nations. The new strategy underscores the severe environmental and economic risks China faces in a warming world and outlines a broad array of government policies that are helping to moderate the growth of China's greenhouse gas emissions. These include ambitious energy efficiency and renewable energy goals and programs that reduce emissions from industry, agriculture, and forestry. Without these policies, China's emissions would be far higher than they are today.
However, much stronger action is needed to slow, stop, and reverse China's rapid emissions growth. When the United States caps its own greenhouse gas emissions, it will have begun to fulfill the commitment it made with other developed countries to lead the climate effort. It will then be reasonable to expect that China and other major emerging economies fulfill their responsibilities as well.
Our aim must be a new set of multilateral commitments ensuring that each of the major economies contributes its fair share to the global climate effort. The post-2012 framework should be flexible so that countries can take on different types of commitments. For developing countries, rather than economy-wide emissions targets, these could be "policy commitments" - China, for instance, could initially commit to strengthen its existing efficiency and renewables policies. But all commitments must be credible, binding, and closely monitored. Only through a balanced set of commitments and incentives can we hope to mobilize the efforts needed to dramatically reduce emissions in China and around the world.
President Bush Announces New Climate Proposal
Statement by Eileen Claussen, President of Pew Center on Global Climate Change
May 31, 2007
Six years after rejecting the Kyoto Protocol, President Bush has finally offered an alternative proposal, but it falls well short of what's needed. Agreement among the major emitting countries on a long-term global goal would be helpful. But far more critical is getting binding commitments on near- and mid-term action to reduce emissions. From all appearances, what the president is proposing is a strictly voluntary approach that won't deliver real results. We've tried the voluntary approach, both in the United States and internationally, and it doesn't work. The bottom line is we need binding commitments from all the major economies. The president isn't offering commitments and isn't asking for commitments, and without them we won't get the job done.
China’s Climate and Energy Policies
GHG Emissions – China has been the world’s largest greenhouse gas (GHG) emitter since 2006. Under the 2009 Copenhagen Accord, China pledged to reduce its emissions intensity by 40-45 percent from 2005 levels by 2020. In a joint announcement with the United States in Beijing in November 2014, China announced two new goals: peaking greenhouse gas emissions by around 2030, and increasing non-fossil sources to 20 percent of total energy by 2030. China later included these two goals in its intended nationally determined contribution (INDC) to the new international climate agreement to be concluded in Paris in December 2015, along with a goal of reducing carbon intensity 60-65 percent below 2005 levels by 2030.
Guiding Policy Framework – China’s twelfth five-year plan (FYP), covering 2011-15, spelled out a number of reforms to domestic energy and climate policies. The headline targets were to reduce energy intensity by an additional 16 percent, and carbon intensity by 17 percent, by 2015. It has been widely reported that China is currently on track to meet these 2015 targets. The thirteenth FYP is expected to be announced in early 2016.
Cap-and-Trade Programs – In October 2011, China announced its intention to establish seven pilot carbon trading systems in five municipalities and two provinces across the country. On June 19, 2014, the seventh of these pilots was launched in the city of Chongqing. The pilots cover between 35 to 60 percent of emissions within their respective jurisdictions. Each operates under its own rules tailored to regional or local circumstances.
The sub-national pilots reflect China’s growing interest in the use of market-based instruments – and emissions trading in particular – to reduce greenhouse gas emissions. The experience gained through these pilot programs is developing familiarity with emissions trading among companies and regulators in large portions of China.
On September 25, 2015, Chinese president Xi Jinping announced a plan to launch a nationwide cap-and-trade program in 2017, covering the power generation, iron and steel, chemicals, building materials including cement, paper-making and nonferrous metals sectors.
Renewable Energy – The twelfth FYP set a target of increasing non-fossil energy to 11.4 percent of total energy use by 2015. Hydroelectric power is the main non-fossil energy source in China, generating 14.7 percent of electricity in 2011. Indeed, China is the largest hydroelectric producer in the world. The government wishes to increase installed hydroelectric capacity from 230 GW in 2011, to 330 GW in 2017. Solar and wind energy deployment has increased at rapid pace – for instance, China installed 12.9 GW of solar photovoltaic (PV) in 2013 to reach a total capacity to 20 GW.[i] The Chinese government announced targets to increase solar and wind capacity to 70 and 150 GW, respectively, by 2017.
Coal – After many years of rapid increases, the government is now taking steps to reduce China’s coal consumption. In 2013, 67.5 percent of energy consumption was from coal.[ii] In September that year, following rising concerned about air pollution, the government issued the Air Pollution Prevention and Control Action plan with the headline target of reducing coal consumption to 65 percent of total primary energy by 2017. Bans on new coal power plants are now in place in three industrial regions: Beijing-Tianjin-Hebei, Yangtze River Delta and the Pearl River Delta.[iii]
More recently, the Ministry of Industry and Information Technology announced plans to reduce coal consumption by 80 million tons by 2017, and 160 million tons by 2020 – China’s total coal consumption in 2014 was approximately 2.8 billion tons.[iv][v] Furthermore, the State Council has announced plans to cap national coal consumption at 4.2 billion tons from 2020 onwards.[vi]
Nuclear – Nuclear power will play an increasing role in China’s energy mix in coming years. Capacity will increase from 14 GW in 2013 to 48 GW by 2017. In total, there are 26 reactors currently in operation, and 28 under construction.[vii] The government has set a target of 58 GW of nuclear capacity by 2020.
Energy Efficiency – Improving energy efficiency is critical to achieving China’s carbon intensity targets. In 2008, China passed the Energy Conservation Law to boost energy efficiency throughout the Chinese economy. In 2010, the NDRC implemented demand-side management regulations that require utilities to achieve electricity savings of 0.3 percent per year, and reduce peak demand by the same percentage.[viii] China also has sector-specific energy efficiency standards – for instance, new commercial buildings must comply with building codes on energy use.[ix] There are also energy efficiency standards for household appliances that become more stringent over time.[x]
Transportation – In 2012 the China State Council approved a development plan for energy saving from the automobile industry up to 2020. The objective is to speed the development and roll out of more fuel-efficient cars and new energy sources. For manufacturers, China set target fuel economy standards for new cars of 5L/100km, approximately 47 miles per gallon (mpg), by 2020. Consumers were offered a reduction in the vehicle tax paid on energy saving vehicles by half, and eliminating vehicle tax altogether on electric cars.[xi]
Energy and Climate Goals of China's 12th Five-Year Plan
The 12th Five-Year Plan (FYP) adopted by the Chinese government in March 2011 devotes considerable attention to energy and climate change and establishes a new set of targets and policies for 2011-2015. While some of the targets are largely in line with the status quo, other aspects of the plan represent more dramatic moves to reduce fossil energy consumption, promote low-carbon energy sources, and restructure China’s economy. Among the goals is to "gradually establish a carbon trade market." Key targets include:
- A 16 percent reduction in energy intensity (energy consumption per unit of GDP);
- Increasing non-fossil energy to 11.4 percent of total energy use; and
- A 17 percent reduction in carbon intensity (carbon emissions per unit of GDP).
C2ES Report: Market-Based Climate Mitigation Policies in Emerging Economies
Used by governments for decades, market-based policies are mechanisms to control environmental pollution at various leverage points. This brief provides an overview of market-based policies aimed at reducing GHG emissions in several major emerging economies: Brazil, China, India, South Africa and South Korea. By implementing regulatory and market-based policy instruments across their economies, these countries are seeking to promote cleaner technologies and behavior change while also promoting economic development and growth.
U.S.-China Workshop: Domestic MRV of Climate Efforts
This workshop focused on domestic monitoring and evaluation of mitigation-related efforts, and on the role of measurement, reporting and verification (MRV) in effective emissions markets, drawing in both areas on domestic experiences in the United States and China.
Beijing Workshop on Reporting Practices Related to Climate Change and Other International Challenges
The workshop focused on four topics: domestic MRV of mitigation efforts in China and the United States; MRV of support; reporting and review processes in other multilateral regimes such as the WTO, the IMF, and the Montreal Protocol; and lessons for international MRV of climate action.
Coal in China: Resources, Uses, and Advanced Coal Technologies
China’s energy-development pathway has increasingly become a topic of international attention, particularly as China has become the largest national source of annual greenhouse gas emissions. At the forefront of this pathway is a reliance on coal that has spanned many decades. In a world faced with increasing environmental pressures, China must develop ways to utilize coal more efficiently and more cleanly. Its ability to do so will be crucial for its domestic energy security, for its local environment and the well-being of its population, and for the future of the global climate.
Common Challenge, Collaborative Response: A Roadmap for U.S.-China Cooperation on Energy and Climate Change
A new report released by the Center and the Asia Society outlines a roadmap for a more comprehensive program of U.S.-China collaboration on energy and climate change. The report was produced in partnership between the Center for Climate and Energy Solutions 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.
A related article by Eileen Claussen discusses the importance of a U.S.-China partnership on climate change.
Climate Change Mitigation Measures in China
Read the China Fact Sheet.
China is now the world’s largest greenhouse gas (GHG) emitter, and its emissions are increasing rapidly with economic growth and rising energy demand. The United States remains the largest historic GHG emitter. China's emissions have grown by about 80% since 1990, driven heavily by increased consumption of electricity generated from coal.
As total emissions have grown, China has significantly reduced its emissions intensity (emissions per unit of GDP). China’s per capita emissions are below the world average and about one-fifth those of the United States.
China Releases Climate Change Plan
Read China's National Climate Change Program
On June 4, 2007, China released its first national climate change plan. Prepared by China’s National Development and Reform Commission, the plan outlines China’s strategy for addressing climate change through national programs aimed at mitigation, adaptation, science and technology research, and increasing public awareness.
Read Eileen Claussen's Statement
[i] Renewable Energy Policy Network for the 21st Century, “Renewables 2014 Global Status Report” 2014. P.56
[ii] BP Statistical Review of World Energy 2014
[iii] Barbara Finamore, “China pledges to Tackle Pollution with New Plan,” National Resources Defense Council. September 13, 2013. Available at: http://switchboard.nrdc.org/blogs/bfinamore/china_pledges_to_tackle_air_po.html
[iv] Reuters, “China to cut coal consumption to reduce pollution: Ministry” March 6, 2015. Available at: http://www.reuters.com/article/2015/03/06/us-china-coal-cut-idUSKBN0M20V820150306
[v] China Bureau of National Statistics. http://www.stats.gov.cn/english/PressRelease/201502/t20150228_687439.html
[vi] Barbara Finamore, “Another Major Climate Breakthrough: China Will Cap its Coal Consumption by 2020”, National Resources Defense Council, November 21, 2014. Available at: http://switchboard.nrdc.org/blogs/bfinamore/another_major_climate_breakthr.html
[vii] World Nuclear Association, “Nuclear Power in China” April 2015. Available at: http://www.world-nuclear.org/info/Country-Profiles/Countries-A-F/China--...
[viii] IEA Policies and Measures. April 2015. Available at: http://www.iea.org/policiesandmeasures/energyefficiency/?country=China
[ix] Pacific Northwest National Laboratory, “Analysis of the Chinese Market for Building Energy Efficiency”, March 2014. Available at: http://www.pnnl.gov/main/publications/external/technical_reports/PNNL-22761.pdf
[x] China FAQs, “Appliance Energy Efficiency Standards”, May 2010. Available at: http://www.chinafaqs.org/library/chinafaqs-appliance-energy-efficiency-standards
[xi] IEA Policies and Measures. April 2015. Available at: http://www.iea.org/policiesandmeasures/energyefficiency/?country=China
Congressional Testimony of Eileen Claussen: Regarding U.S. Re-Engagement in the Global Effort to Fight Climate Change
HON. EILEEN CLAUSSEN, PRESIDENT
PEW CENTER ON GLOBAL CLIMATE CHANGE
At the House of Representatives,
Committee on Foreign Affairs
May 15, 2007
Regarding U.S. Re-Engagement in the Global Effort to Fight Climate Change
Mr. Chairman and members of the committee, thank you for the opportunity to testify on U.S. Re-Engagement in the Global Effort to Fight Climate Change. 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 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. Forty-three major companies in the Pew Center’s Business Environmental Leadership Council (BELC), most included in the Fortune 500, work with the Center to educate the public on the risks, challenges and solutions to climate change.
Mr. Chairman, I would like to commend you and the members of this committee for convening this hearing today on U.S. re-engagement in the global effort to fight climate change. As one who has worked for many years to advance efforts on this and other critical environmental challenges, it is very gratifying to me that the U.S. Congress is at long last engaged in a genuine debate on how – not if, but how – the United States should address global climate change. So far, this debate has focused primarily on questions of domestic climate policy. This is a critical first step. But truly meeting the challenge of climate change will require global solutions as well, and these will be possible, I believe, only with strong leadership from the United States. By broadening the scope of debate here in Washington, and by focusing attention on the international dimension of climate change, this hearing will help set the stage for constructive U.S. engagement and for an effective multilateral response to global climate change.
In my testimony today, I would like to outline the following: the key objectives that a post-2012 climate framework must meet; the form that a post-2012 framework should take; the steps the United States must take at home and internationally to ensure that such a framework is established; and how the United States can best address the questions of competitiveness and developing country participation. In the course of my testimony, I will address each of the questions the Committee has posed.
The Pew Center’s perspective on the future international framework reflects not only our own detailed analysis but also the collective views of an impressive group of policymakers and stakeholders from around the world. As part of our effort to help build consensus on these issues, we convened the Climate Dialogue at Pocantico, a group of 25 from government, business, and civil society in 15 key countries, all participating in their personal capacities. The group included senior policymakers from Britain, Germany, China, India, Japan, Australia, Canada, Mexico, Brazil and the United States. It also included senior executives from companies in several key sectors, including Alcoa, BP, DuPont, Exelon, Eskom (the largest electric utility in Africa), Rio Tinto, and Toyota. The group’s report was released in late 2005 at an event here in Congress hosted by Senators Biden and Lugar.
Despite a very diverse range of interests and perspectives, the Pocantico group succeeded in reaching consensus on a broad vision of a post-2012 climate framework. This vision begins with a set of key objectives that a post-2012 framework must meet. I would like to emphasize the two most critical objectives, which speak directly to the Committee’s question about the need for and nature of developing country participation.
First, the post-2012 framework must engage all of the world’s major economies. Twenty-five countries account for about 85 percent of global greenhouse gas emissions. These same countries also account for about 70 percent of global population and 85 percent of global GDP. The participation of all the major economies is critical, first and foremost, from an environmental perspective, because all must take sustained action if we are to achieve the steep reductions in emissions needed in the coming decades to avert dangerous climate change. But the participation of all major economies is critical from a political perspective as well. For reasons of competitiveness, none of these countries will be willing to undertake a sustained and ambitious effort against climate change without confidence that the others are contributing their fair share. We must agree to proceed together.
At the same time, we must recognize the tremendous diversity among the major economies. This group includes industrialized countries, developing countries, and economies in transition. Their per capita emissions range by a factor of 14 and their per capita incomes by a factor of 18. This leads directly to the second objective identified in our Pocantico dialogue: The post-2012 framework must provide flexibility for different national strategies and circumstances. The kinds of policies that effectively address climate change in ways consistent with other national priorities will vary from country to country. We must allow different pathways for different countries. An economy-wide emissions target may work for some but it will not work for others. If it is to achieve broad participation, the future framework must allow for variation both in the nature of commitments taken by countries and in the timeframes within which these commitments must be fulfilled.
With these key objectives in mind, the Pocantico group thenconsidered one of the other questions the Committee has asked: What could be the key elements of a post-2012 framework? The group recommended several policy approaches.
The first of these is targets and trading. This is the approach employed in the Kyoto Protocol, as well as in the European Union’s Emissions Trading Scheme and the Regional Greenhouse Gas Initiative being undertaken by ten states in the northeastern United States. There are very sound reasons why U.S. negotiators insisted so strongly on a market-based architecture for the Kyoto Protocol – and why many of the major climate bills now before Congress adopt the same approach. Emission targets provide a reasonable degree of environmental certainty, while emissions trading harnesses market forces to deliver those reductions at the lowest possible cost.
While targets and trading should remain a core element of the international effort, we must recognize that China, India, and other developing countries are highly unlikely to accept binding economy-wide emission limits any time in the foreseeable future. In their view, binding targets, by holding them to specific emission levels regardless of the economic consequences, would amount to a cap on economic growth. Economy-wide targets also may be technically impractical for them: to accept a binding target, a country must be able to reliably quantify its current emissions and project its future emissions, a capacity that at present few if any developing countries have.
A future framework, therefore, must allow for other approaches as well. A second potential element identified in the Pocantico dialogue is policy-based commitments. Under this approach, countries would commit to undertake national policies that will moderate or reduce their emissions without being bound to an economy-wide emissions limit. This is a more bottom-up approach, allowing countries to put forward commitments tailored to their specific circumstances and consistent with their core economic or development objectives. A country like China, for instance, could commit to strengthen its existing energy efficiency targets, renewable energy goals, and auto fuel economy standards. Tropical forest countries could commit to reduce deforestation. For this to work, the commitments would need to be credible and binding, with mechanisms to ensure close monitoring and compliance. Developed countries also may need to provide incentives for developing countries to adopt and implement stronger policies. One option is policy-based emissions crediting, similar to the Kyoto Protocol’s Clean Development Mechanism, granting countries tradable emission credits for meeting or exceeding their policy commitments.
A third potential element is sectoral agreements, in which governments commit to a set of targets, standards, or other measures to reduce emissions from a given sector, rather than economy-wide. In energy-intensive industries whose goods trade globally, which are the sectors most vulnerable to potential competitiveness impacts from carbon constraints, sectoral agreements can help resolve such concerns by ensuring a more level playing field. Such approaches are being explored by global industry groups in both the aluminum and cement sectors. We believe it is also worth exploring sectoral approaches in other sectors such as power and transportation where competitiveness is less of an issue but where large-scale emission reduction efforts are most urgent.
A fourth potential element is technology cooperation. This could include two types of agreements. The first would provide for joint research and development of “breakthrough” technologies with long investment horizons. Such agreements could build on the Asia Pacific Partnership and other technology initiatives but commit governments to the higher levels of funding needed to accelerate and better coordinate critical research and development. The second type of agreement could help to provide equitable access to both existing and new technologies by addressing finance, international property rights, and other issues that presently impede the flow of low-carbon technologies to developing countries.
The four elements I have outlined thus far fall under the heading of mitigation. A fifth critical element is adaptation. We need stronger adaptation efforts within the international climate framework but extending well beyond it as well. The top priority within the framework should be addressing the urgent needs of those countries most vulnerable to climate change. But the broader goal must be to spur comprehensive efforts to reduce climate vulnerability generally by integrating adaptation across the full range of development activities.
The Pocantico group also considered another question raised by the Committee: whether a new climate framework must establish a specific goal for stabilizing greenhouse gas concentrations in the atmosphere. The UN Framework Convention on Climate Change (UNFCCC) set a long-term objective for the international climate effort: stabilizing atmospheric greenhouse gas concentrations at levels that would prevent dangerous human interference with the climate system. Thus far, there has been no effort under the Convention to define that goal in quantitative terms. The Pocantico group clearly recognized the value of a quantified long-term goal in driving climate action, signaling markets, and establishing a metric to guide and assess near- and medium-term efforts. However, the group cautioned against trying to negotiate a specific quantified long-term target, particularly one intended as a basis for commitments. The scientific issues are so complex, and the inherent political stakes so great, that such a negotiation would likely be futile if not counterproductive. In my view, global consensus on a quantified long-term climate goal will be feasible only if the issue is taken up in an international venue other than that where climate commitments are to be negotiated. The U.S. Climate Action Partnership, of which the Pew Center is a founding partner, recommends stabilizing global greenhouse concentrations at a carbon dioxide equivalent level of 450-550 ppm.
Having outlined the potential elements of a post-2012 climate effort, I now turn to the question of how these approaches can be integrated in a common framework. While different countries should be allowed different pathways, they cannot simply each go their own way. An ad hoc series of parallel initiatives will not produce an aggregate effort nearly adequate to the need. By linking actions, and negotiating them as a package, nations are likely to undertake a higher level of effort than they would acting on their own. Such a negotiation could take the form of sequential bargaining, with countries proposing what they are prepared to do under one or more of the different tracks I’ve described, and then adjusting their proposals until agreement is reached on an overall package. To help ensure a balanced and therefore stronger outcome, it may be necessary to agree at the outset that certain countries will negotiate toward particular types of commitments most appropriate to their circumstances. The objective would be an integrated agreement is flexible enough to accommodate different types of commitments, and reciprocal enough to achieve a strong, sustained level of effort.
The Committee has asked whether the UNFCCC provides a viable foundation for a global climate framework. I believe the answer is yes. The Pocantico group recognized that one precondition for a successful negotiation is broad political consensus among the key players and, accordingly, urged an informal high-level dialogue among the major economies on the broad scope and terms of a post-2012 framework. However, the group agreed that once this informal consensus is reached, it should be carried back to the Framework Convention for the negotiation of formal agreements. The Convention enshrines key principles, such as “common but differentiated responsibilities,” and has been ratified by virtually every nation on earth, including the United States. It is regarded worldwide as the legitimate forum for negotiating and mobilizing the international climate effort. Further, the Convention is flexible enough to accommodate any of the approaches I have described here. The U.N. and Convention processes are often cited as obstacles to agreement on climate change. While these processes are far from perfect, I believe the largest obstacle to date has been a lack of political will, and if that obstacle were to be removed, process issues would not stand in the way of agreement.
The Committee has also asked what steps the United States can take to most effectively reengage in the global climate effort. An effective multilateral response to climate change will be possible only with U.S. engagement and leadership. Lack of action by the United States stands today as the major impediment to stronger efforts by other countries. Of the steps the United States can take to encourage global action, the most critical is to establish unilaterally a mandatory program to limit and reduce U.S. emissions. Demonstrating the will – and establishing the means – to reduce U.S. emissions will greatly alter the international political dynamic and improve prospects for international cooperation.
As it strengthens its domestic response to climate change, the United States should also help lead a renewed multilateral effort both within and outside the Framework Convention process. Within the Convention process, the United States should support the launch of a new round of negotiations, either in parallel with or subsuming those already underway under the Kyoto Protocol, seeking a balanced package of commitments among the major-emitting countries. The Conference of the Parties later this year in Bali presents an opportunity to launch such negotiations. Such negotiations will be fruitful, however, only if other efforts are taken in parallel to build confidence and seek political consensus among the major economies. The Gleneagles Dialogue launched by the G8+5 in 2005 has brought together the 20 largest energy-consuming countries to discuss issues of climate, energy, and development. If given a stronger mandate when it reports back to the G8+5 in 2008, this Dialogue could be a serve as the venue for developing the political consensus needed for the formal negotiations to succeed. If not, an alternative venue for this critical political dialogue will be needed.
Finally, I would like to address directly the questions of competitiveness and developing country participation. These issues are closely related. Ultimately, I believe, both are most effectively addressed through binding multilateral commitments. But it is important to distinguish these two issues because, in advance of a stronger global framework, each will require a different set of interim policy responses.
Competitiveness is a potential concern not for the U.S. economy as a whole, but rather for specific sectors – primarily energy-intensive industries, such as steel and aluminum, whose goods trade globally. In establishing a mandatory domestic climate program, steps can be taken to minimize or mitigate competitiveness impacts. For instance, in the design of a mandatory cap-and-trade program, potentially vulnerable sectors could be allowed special consideration in the emission allowance process. Another option is to provide technology and transition assistance to affected industries and communities, possibly funded by auctioning a portion of allowances. As a longer-term option, legislation also could stipulate that if the major developing countries have not taken stronger action to reduce emissions within a specified timeframe, the United States, in concert with other industrialized countries, will consider tariffs on their energy-intensive exports or other mechanisms to correct the resulting competitive imbalances. I would note that on their own, however, these latter approaches are not likely to induce strong developing country action, and could lead to more confrontation than cooperation.
Engaging developing countries will require a firm but balanced approach. To begin with, we must be absolutely clear in our expectation that the major developing countries assume binding commitments in a post-2012 framework. It is true that the United States, the world’s largest economy, is also by far the largest historic contributor to climate change. In establishing mandatory limits on domestic emissions, the United States will have begun to fulfill the commitment it made with other industrialized countries to lead the climate change effort. And having done so, it will then be reasonable to expect that countries like China fulfill their responsibilities as well. China’s emissions have grown 80 percent since 1990 and could rise another 80 percent by 2020. It is essential that these trends be reversed. Realistically, given the greater capacity and historic responsibility of industrialized countries, China, India and other developing countries will require incentives to undertake strong climate efforts. The United States should provide market-based incentives through a domestic cap-and-trade program by recognizing credits for emission reductions achieved in developing countries. In addition, targeted bilateral and multilateral assistance should be provided for the deployment of critical high-cost technologies such as carbon-capture-and storage. However, in return for these incentives, China and the other major developing countries must assume appropriate commitments that will slow and ultimately reverse the growth of their greenhouse gas emissions.
To summarize, I believe it is incumbent upon the United States to lead both by strong action at home and by actively and constructively reengaging in the international climate effort. Only with strong U.S. participation and leadership can we achieve a fair and effective global response to the critical challenge of climate change. I thank the Committee for the opportunity to present these views and would be happy to answer your questions.
Building on Pocantico: Sectoral Agreements and Policy-Based Commitments in a Post-2012 Framework
May 14, 2007
View a webcast of this side event.
Event participants included:
- Elliot Diringer, Pew Center
- Daniel Bodansky, University of Georgia School of Law
- Joanna Lewis, Pew Center
- Artur Runge-Metzger, European Commission
- Harald Winkler, Energy Research Centre, South Africa
Press Release: Pew Reports Examine Sectoral Agreements and Policy Commitments in a Post-2012 Framework
May 14, 2007
Pew Center Contact: Katie Mandes, (703) 516-4146
PEW CENTER EXAMINES SECTORAL AGREEMENTS AND POLICY COMMITMENTS AS ELEMENTS OF A POST-2012 CLIMATE FRAMEWORK
New Reports Build on Recommendations of Climate Dialogue at Pocantico
New reports released today by the Pew Center on Global Climate Change explore two approaches to reducing greenhouse gas emissions that could be part of a new multilateral climate agreement – policy- based commitments and international sectoral agreements.
The new reports elaborate on two of the options recommended by the Climate Dialogue at Pocantico, a group of senior policymakers and stakeholders from 15 countries convened by the Pew Center. The group’s report, International Climate Efforts Beyond 2012, calls for engaging all major economies in the post-2012 climate effort through a flexible framework allowing countries to take on different types of commitments.
International Sectoral Agreements in a Post-2012 Climate Framework,by Daniel Bodansky of the University of Georgia School of Law, examines the option of negotiating one or more intergovernmental agreements to reduce emissions from specific sectors, such as electricity, transportation, or energy-intensive industries. Policy-Based Commitments in a Post-2012 Framework, by Joanna Lewis and Elliot Diringer of the Pew Center, looks at the option of policy-based commitments, in which developing countries commit to emission reduction policies other than binding economy-wide emission targets.
“We need an international framework that commits all the major economies to strong, effective action but lets them pursue the strategies that work best for them. That’s the core message from our Pocantico dialogue,” said Pew Center President Eileen Claussen. “Sectoral agreements and policy commitments could be key elements in a flexible but integrated framework ensuring that all the major economies contribute their fair share.”
The new reports envision sectoral agreements and policy commitments as potential elements in a balanced package of post-2012 commitments that likely would include economy-wide emission targets for some countries. Other potential elements identified in the Pocantico dialogue are agreements to facilitate technology development and access and to support adaptation efforts in countries highly vulnerable to climate change.
The paper on sectoral approaches discusses the benefits and challenges of structuring climate agreements around discrete sectors and the different forms they could take, such as emission targets, technology standards, or performance standards. It concludes that sectoral agreements can contribute to the post-2012 effort by helping to defuse competitiveness issues, particularly in energy-intensive manufacturing industries; by targeting technology and financial assistance in sectors such as electricity where it may be most critical; and, in sectors such as the automotive industry, by catalyzing broad technology transformations through agreements among a small number of key countries
The second paper describes an approach in which developing countries commit to implement national policies that reduce greenhouse gas emissions but are not bound by economy-wide emission limits. Such policy commitments could include energy efficiency goals or standards, renewable energy targets, or measures promoting sequestration in agriculture or forestry. This approach would allow countries to tailor commitments to their domestic needs and circumstances and could be coupled with policy-based emissions crediting or other incentives. The paper emphasizes the need for reliable quantification of emission results and concludes that a policy-based approach is viable only if other parties see the commitments as credible, concrete contributions to the global effort.
To link to these reports, please visit our International Policy page.
Policy-Based Commitments in a Post-2012 Climate Framework
Prepared for the Pew Center on Global Climate Change
Joanna Lewis and Elliot Diringer, Pew Center on Global Climate Change
This paper elaborates on the concept of policy-based commitments as one component of a post-2012 climate framework. As conceived here, the policy-based approach would be an avenue for developing countries in particular to put forward national policies of their choosing as contributions to the global climate effort. These policies could vary widely in scope and form, from economy-wide energy efficiency goals to sector-specific standards or reforms.
Download entire report (pdf)
International Sectoral Agreements in a Post-2012 Climate Framework
Prepared for the Pew Center on Global Climate Change
University of Georgia, School of Law
In recent years, sectoral approaches have received renewed attention and are among the options proposed for the post-2012 period. In its report, International Climate Efforts Beyond 2012, the Climate Dialogue at Pocantico identified sectoral approaches as one of the potential elements of the future international climate change effort. This paper examines the broader policy and structural questions relating to the development of sectoral approaches at the international level—in particular, sectoral approaches taking the form of inter-governmental agreements.
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This background paper helps clarify different types of sectoral approaches under discussion and how they might fit into a post-2012 international climate framework.
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China's emissions are increasing rapidly with strong economic growth and rising energy demand. Emissions have grown by about 80% since 1990, driven heavily by increased consumption of electricity generated from coal. Much of China's projected emissions growth will come from coal-fired electricity; in 2006 China installed over 90 gigawatts (GW) of new coal power capacity— the equivalent of about 2 large coal power plants per week.