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A Vision for a Climate-Friendly Future
Remarks by Eileen Claussen
President, Pew Center on Global Cliamte Change
Air & Waste Management Association Annual Conference and Exhibition
June 23, 2003
Thank you very much. It is a pleasure to be here in San Diego. And I thank the Air & Waste Management Association for inviting me here today.
While looking at the website for this conference, I was surprised to see that the plenary presentation this morning coincides with a recreational opportunity for attendees at the-- conference -- that is, a visit to several of San Diego’s historical sites that is billed as the “step back in time tour.” Let me say, first, that I appreciate the fact that so many of you opted out of that event, preferring to remain in the here and now.
In my speech today I intend to offer a tour of both the past and the future. I want to talk about the need for a vision of what the world might look like 50 years from now -- what the world must look like -- if we finally accept our responsibility to protect the global climate. And I want to talk about how the lessons from the past can help us get there.
Let me start with a brief “step back in time tour” of my own, and reflect for a minute on some advice that I was given when I was working on waste management issues back in the 1970’s. I can clearly remember being berated by a vice president of a major US corporation for my foolish ideas on reuse and recycling. After the critique was over, the VP went on to offer me some counseling. “Eileen,” he said, “be careful that you don’t try to become a monument. Monuments attract pigeons.” Well, I didn’t listen to that advice, and while the pigeons are sometimes a problem, I would be delighted if pigeons were all I had to worry about.
Unfortunately, what I do worry about is whether we have what it takes to create the vision of where we need to be, and then achieve it – whether we are all willing to take the risk of becoming monuments. Because the task at hand is not an easy one: we must wean ourselves away from our reliance on fossil fuels, and begin in earnest to develop the technologies and the alternative energy sources that will help us achieve real and steady reductions in worldwide emissions of the greenhouse gases that cause climate change.
There are a lot of good things happening right now. Individuals, companies and governments are taking important and worthwhile steps to address this problem, and I want to talk with you a little bit about what they are doing. But what is happening now is not nearly enough. And the priority looking ahead must be to marry a long-term vision of a climate-friendly future with the short-term strategies that will get us there.
In this, we must remember the words of Eleanor Roosevelt: “The future is literally in our hands to mold as we like. But we cannot wait until tomorrow. Tomorrow is now.”
Of course, the reason we are having this discussion -- and the reason I am laying out this vision -- is that we have a real problem. The earth’s climate is undergoing important and potentially hazardous changes, and human activities are largely to blame. Of this there is no doubt. Even our President (previously referred to as skeptic-in-chief), revised his prior assumptions after he assigned a committee of the National Academy of Sciences to look into the matter -- and they came back to him reporting that, and I quote "GHG's are accumulating in Earth's atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. Temperatures are, in fact rising. The changes observed over the last several decades are likely mostly due to human activities." The report goes on to say that we can't exclude the possibility that natural variability has contributed as well -- but the main point remains - the earth is warming, and humans must accept some responsibility for that warming.
How significant is this warming trend? The earth’s temperature has always fluctuated, but ordinarily these shifts have occurred over the course of centuries or millennia, not decades. Over the last century, we have seen a one-degree increase in global temperatures. And the increase appears to be accelerating. The 1990s were the hottest decade on record. The last five years were among the seven hottest on record. Scientists project that over the next century, average global temperature will rise between two and ten degrees Fahrenheit. The higher-end figure of ten degrees would be the largest swing in global temperature since the end of the last ice age 12,000 years ago.
What will be the effects of this warming? In the short term, there will be both winners and losers as farms and forests, for example, become more productive at some latitudes, but less productive at others. In the long term, though, any possible benefits from global warming will likely be far outweighed by the costs -- and the consequences may be irreversible. Consequences such as increased flooding and increased drought, as well as extended heat waves, more powerful storms, and other extreme weather events. And I have not even mentioned the problem of rising sea level, which has potentially far-reaching effects on coastal areas throughout the world.
Global warming, in other words, is not an idle concern. Unfortunately, however, it is a concern that has become overly politicized and polarized, and the main reason for this is that addressing this issue effectively requires us to change. There is no way around it. Responding to climate change will fundamentally alter the way we meet many of our most basic needs.
But a lot of people don't like change; change is hard, it requires effort, and it makes things, well…different. Many would rather keep the status quo. Those who are against the changes that are needed, argue that they would imperil our economy and our way of life. But let me tell you something: those who oppose practical steps to deal with the issue of climate change are misguided, because we can address this issue effectively while still growing our economy. In fact, if we fail to address it, the costs are likely to be greater. Our emissions will have grown; the amounts we will have to reduce will be greater; the time available to make these reductions will be shorter; and the costs for damage control and remediation will increase. In making this argument I am not suggesting that taking the necessary steps will be either free or easy. But I believe strongly that with a long-term vision of where we want to go, we can design reasonable, cost-effective strategies to get us there -- one step, one decade at a time.
Looking 50 years ahead, the questions then become: How will we power our economy? How will the nations of the world -- developing and industrialized countries alike -- achieve reductions in their greenhouse gas emissions while at the same time achieving their goals for growth? And, at a more every-day level, how will we get to work? What kind of office buildings will we work in? What kind of cars and trucks will we drive? And, if we plug in our hot tubs, our refrigerators, and our TVs and computers, where will the power come from?
This isn’t the Jetsons of cartoon fame that I am talking about -- with people rocketing around in space cars and taking ultra-sonic showers. Rather, it is real life. And there are real changes that need to happen -- and that can happen -- if we give this issue the attention it so desperately deserves.
And now, if you will permit me, I would like to give you a second little “step back in time tour.” The location isn’t San Diego in 2003 but Montreal in 1987. That was the place and the time, as all of you know, when the nations of the world stepped up to the challenge of ozone depletion and negotiated a treaty, The Montreal Protocol, to begin to phase out the production and use of ozone-depleting chemicals.
In the years leading up to 1987, there was a great deal of skepticism about whether the depletion of the ozone layer was indeed a problem -- and, more importantly, whether it was a problem we could solve. At first, many people denied that the problem existed, but then the argument shifted to one where many in industry said that replacing the CFCs that were causing the problem was impossible, particularly in the short term. These chemicals, it was said, are in such wide use in everything from refrigerators to aerosol antiperspirants that there is no way that society is going to be able to do without them. But then governments began to work seriously on a framework for action, and industry initiated a major effort to work on alternative chemicals and processes. Soon it became clear that we could develop less harmful substitutes. The Montreal Protocol was agreed and then strengthened over time as industry became more and more comfortable with alternatives. And the rest is history.
I tell this story because it is about reaching for a vision that might not seem immediately attainable but that can indeed become reality with a lot of hard work and imagination. Fast forward to today, and you see that getting rid of CFCs has not stood in the way of our ability to keep our yogurt cold or our ability (indeed, our need) to use antiperspirant -- and for that we can all be very thankful. We were able to change to protect the planet. And, today, we need to start thinking about the changes we have to make in order to protect the climate.
Do we have a climate-friendly vision for the future? I believe we have some of the pieces, but are far from having a complete vision. Let’s look at what the Bush Administration has offered. It seems to consist of three parts: a greenhouse gas intensity target for the next decade; a strategy of voluntary measures to achieve that target; and a set of research efforts to assist in bringing about long-term technological change.
There are a number of fundamental problems with this approach. First, rather than establishing an absolute target for emission reductions – as many of the companies we are working with at the Pew Center have done and as the international community has done with the Kyoto Protocol, the Bush administration’s climate strategy sets a voluntary “greenhouse gas intensity” target for the nation. The idea is to reduce the ratio of greenhouse gas emissions to U.S. economic output, or GDP. But the biggest problem with the White House target – an 18 percent reduction in greenhouse gas intensity by 2012 – is that it would allow actual emissions to grow by 12 percent over the same period.
What’s more, the Administration’s strategy relies entirely on voluntary measures. This despite the fact that U.S. climate policy has consisted primarily of voluntary measures for more than a decade. And what have these voluntary measures achieved? As of 2001, U.S. greenhouse gas emissions were up 12 percent over their 1991 levels.
And, finally, while the Administration is putting significant effort into long-term research and development, it is not tied to specific longer term emission reduction goals. It is absolutely clear that technological research and development must be a critical element in any vision of a climate-friendly future. It is also clear that without a specific, binding target that creates the demand for these new technologies, we are unlikely to succeed in our efforts to protect the global climate.
We can do better than that. We have to do better than that. In the months and years ahead, we as a nation need to think more seriously about the short- and long-term steps we should be taking to reduce our contribution to climate change.
And we can learn from many of the promising activities that are taking place all around us starting with the efforts of the members of the Pew Center’s Business Environmental Leadership Council. The council’s 38 members represent nearly 2.5 million employees and have combined revenues of $855 billion. They include mostly Fortune 500 firms, and they are committed to economically viable climate solutions. What are they doing?
- Alcoa, for example, is developing a new technology for smelting aluminum that, if successful, will allow the company to reduce its greenhouse gas emissions to half their 1990 levels over the next nine years.
- Similarly, Shell recently met its target to reduce greenhouse gas emissions by 10 percent from 1990 levels -- and it did this in part by revamping its disposal of the waste gases resulting from oil and gas production. Shell also is planning a long-term transition into the renewable energy market, having invested $1 billion in renewables to date.
- Shell is not the only company we are working with that is venturing into new markets or shifting its business focus. ABB is a $25 billion Swiss business-to-business supplier that has divested itself of traditional, large-scale power generation businesses. Instead, the company now supplies distributed energy solutions, such as combined heat and power technology, fuel cells, microturbines, and wind power plants.
- And then there is the case of Air Products and Chemicals, Inc., which entered into an agreement to provide the waste stream from one of its chemical plants for use as a fuel source for a neighboring company. Air Products and Chemicals also has numerous operations that recover hydrogen molecules and other waste gases from the industrial processes of other companies. Not only are these waste gases used as a fuel source for cogeneration plants, but the recovery of hydrogen reduces the need for natural gas to create hydrogen anew -- creating a double climate benefit.
All of these are important developments—and they show how increasing numbers of leading companies see a clear business interest both in reducing their emissions and in helping to shape a climate-friendly future.
Even more encouraging is the fact that elected leaders in the states are working to shape that future now -- and they are doing it, in part, by recognizing that climate change is an air and waste management issue.
- Massachusetts, for example, has established a multi-pollutant cap requiring six older power plants to reduce their CO2 emissions by 10 percent.
- In neighboring New Hampshire, lawmakers have adopted a similar, multi-pollutant approach in an effort to require the state’s three fossil fuel-fired power plants to stabilize their CO2 emissions at 1990 levels.
- Elsewhere, states have developed innovative waste management programs that will protect the climate. These include a mandatory statewide recycling program in New Jersey that helped the state avoid 8.7 million tons of greenhouse gas emissions from 1990 to 1995; and a program in Missouri that provides financing for a project to capture methane from a 70-acre sanitary landfill for use as fuel for the boilers of a local high school.
That is what I call vision. And it is a quality that is desperately needed as the United States sets out in the years ahead to reduce greenhouse gas emissions nationwide. Clearly, we have a ways to go. How far? Well, right now, we have a national climate strategy that says it is fine and good for our emissions to continue to grow. So obviously the road ahead is a rather long and probably a winding one. But first we must decide what the future should look like.
Let's take a look at a couple of specific sectors, the power sector and the transportation sector -- which together account for about 2/3 of our nation's energy use.
How do we envision the power sector? With no silver bullet on the horizon, we can expect a future with greater use of natural gas (if we can increase supply and meet our infrastructure needs); with a steadily increasing use of renewables (and the progress of wind energy over the last decade should give us a glimmer of hope); with an increased emphasis on distributed generation and combined heat and power; with nuclear at least maintaining its current level of electric generation; and finally with coal, if we are able to master carbon capture and sequestration and make it economically viable.
Meeting the challenge of the transportation sector will not be easy, but the rewards will yield energy security dividends as well as environmental ones. If we start now by investing and deploying existing technologies and investments, it is possible to reduce carbon emissions by about 20 to 25% by 2015 and 45 to 50% by 2030, compared to business as usual. The transportation sector is a perfect example of the need for both short and longer-term efforts. It typically takes 10-15 years to turnover a vehicle fleet, so if we start making new vehicles more efficient today, it will take more than a decade for these efficiency gains to be realized in all vehicles on the road. At the same time we should be working toward the low-carbon transportation future that we ultimately need, with advanced hybrids, advanced diesel, hydrogen fuel cells and the infrastructure that will be needed to support hydrogen.
But simply having a vision gets you nowhere. You have to be able to achieve it. Starting right now, we have to identify the steps necessary to transition to a new, climate-friendly economy. We know that there are short-term strategies that significantly reduce greenhouse gas emissions without radical changes in technologies or lifestyles. These are the low-hanging fruit in the effort to create a climate-friendly future: the efficiency and management improvements that will save money and reduce emissions. And we have a vision of our longer-term needs. But most important, we know that we cannot achieve our vision for the future, or even take advantage of the myriad of shorter-term improvements that are environmentally and economically advantageous without a strong national policy.
This policy must be focused on four specific areas:
- One: We need to create a system where reporting and disclosure of greenhouse gas emissions becomes the rule -- at the very least, for major sources -- and where companies that are acting now to reduce their emissions are assured of credit under future mandatory regimes.
- Two: We need to use a combination of standards, tax credits and other incentives to expand the use of energy-efficient motor vehicles, appliances and buildings; renewable energy; and alternative fuels and technologies. We need to send the market the right signals in order for change to happen.
- Three: We need to expand our natural gas supply and infrastructure and promote advanced coal technologies with carbon capture and disposal.
- And four: We need to adopt a comprehensive national strategy that couples mandatory reductions in emissions with flexible, market-based approaches such as emissions trading.
Just last month, the Pew Center released a report taking a detailed look at six diverse emissions trading programs. The aim was to draw general lessons for the development of trading programs for greenhouse gases. And the conclusion? A so-called “cap-and-trade” program -- which couples trading with a mandatory goal for reducing emissions -- would be an especially attractive way of reducing the U.S. contribution to climate change. Among the reasons: trading allows for greater efficiency than other approaches, given that the cost of reducing emissions varies widely by source.
Of course, we already know how a market-based strategy such as trading can contribute to environmental progress. We have seen it happen. The year in this case was 1990, and the place was Washington, D.C., where lawmakers, as part of the Clean Air Act Amendments passed that year, set out to mandate significant reductions in emissions of sulfur dioxide and nitrogen oxides from electric utilities. The results of this program are clear – the goals have been met, and the costs have been far less than anticipated.
The same kind of cap-and-trade system can achieve the same kind of progress in our effort to protect the climate. It is this kind of system, in fact, that is at the heart of national climate change legislation introduced earlier this year by Senators Joe Lieberman and John McCain. This landmark measure for the first time brings together several features that would be critical to the success of a national climate change strategy. The bill would establish ambitious and binding targets for reducing U.S. greenhouse gas emissions. Equally important, it would provide companies with the flexibility to reduce emissions as cost-effectively as possible – thanks to the creation of a rigorous nationwide system allowing emissions trading, the provision of credit for carbon storage, and the ability to use credits earned abroad Last but not least, the bill would recognize those reductions that are being made now by the companies that are taking the lead on this issue and provide additional flexibility for these early actors.
Of course, the Lieberman-McCain measure has no real chance of becoming law any time soon. But it does give us a starting place on the policy vision that we so desperately need.
As we begin building a workable strategy to reduce U.S. emissions, we can at the same time begin demonstrating leadership internationally. As the producer of fully one-fourth of worldwide greenhouse gas emissions, we have to show the world, first, that we are stepping up to this problem domestically, and, second, that we can contribute in important and substantive ways to the development of a global framework for action.
Despite the Bush administration’s rejection of the Kyoto Protocol, it is in the United States’ best interests to forge an effective, long-term international climate agreement – one ensuring that all major emitting countries do their fair share to meet this challenge. Whether you support it or not, the Kyoto Protocol is a reasonable first step and provides an important framework for the continuing evolution of the world’s energy mix.
But in the same way that the United States should be guided by a long-term vision as it works domestically to protect the climate, so too must the global community be looking beyond Kyoto. Because an agreement that’s going to work – an agreement that can bring in not only the United States, but developing countries as well – will in all likelihood be something other than Kyoto. And it’s going to take some time to get there.
The more immediate challenge, though, is here at home. And the longer U.S. policy makers wait to address the climate issue in a serious way, the greater the risk to the climate and to America’s standing in the world.
A “step back in time” is important for learning what works. But Eleanor Roosevelt was right: “Tomorrow is now.” And we need right now to be shaping a vision of a better tomorrow for our climate, for our economy, and for all of us. We need to get on with solutions.
Thank you very much.
Tackling Climate Change: 5 Keys to Success
Remarks by Eileen Claussen
President, Pew Center on Global Cliamte Change
4th Annual Dartmouth Student Science Congress
May 2, 2003
Thank you very much. It is a pleasure to be here at Dartmouth for the Fourth Annual Student Science Congress. I understand that as part of these proceedings, students will be voting on a series of ballot questions. I have not yet seen these questions, but tonight I am nevertheless going to try to influence your answers.
For example, if one of the questions is “How serious a problem is global warming?” I encourage you to answer that it is a very serious problem indeed. And, if one of the questions is “Who was your favorite speaker during the Congress?” . . . well, just keep in mind that Claussen sort of rhymes with awesome.
Seriously, I appreciate this opportunity to address your Student Science Congress, and I applaud the organizers of this event for taking on a topic of such pressing importance. Whether we like it or not, global warming is shaping up as one of the most important challenges of the 21st century. It is going to drive far-reaching changes in how we live and work, how we power our homes, schools, factories and office buildings, how we get from one place to another, how we manufacture and transport goods, and even how we farm and manage forests. It touches every aspect of our economy and our lives, and to ignore it is to live in a fantasy land where nothing ever has to change – and where we never have to accept what the science tells us about what is happening to our world.
My goal tonight is to give you a clear idea of where we stand today in the effort against global climate change. To do that, I’d first like to offer you an insider’s look at how the world and the United States have responded to this challenge over the last decade.
Then, after the history lesson – and don’t worry, there will not be a test – I want to look forward. And I’d like to suggest to you five keys to success – five things we need to do if were are to successfully meet the challenge of climate change.
So, to begin with, let’s travel back in time to 1992, when another George Bush was our President, and when the nations of the world gathered in sunny Rio de Janeiro for the United Nations Conference on Environment and Development, affectionately known as the Earth Summit. This was the event, you may recall, where more than 150 countries signed an agreement called the United Nations Framework Convention on Climate Change.
The UNFCCC, as it is known, set an ambitious long-term objective: to stabilize greenhouse gas concentrations in the atmosphere at a level that would – and I quote – “prevent dangerous anthropogenic (or human-caused) interference with the climate system.” This is a goal that the United States, and virtually every other nation, has embraced.
As a first step, industrialized countries agreed to a voluntary emissions target: they aimed to reduce their greenhouse gas emissions to 1990 levels by the year 2000. Before long, however, it became clear that the targets would not be met and that voluntary commitments could not deliver genuine action. So the United States and others countries began to negotiate a new agreement, one with binding targets, and they agreed at the outset that these new commitments would extend only to the industrialized countries, which so far have contributed the most to the problem.
The result, negotiated five years after the Rio summit in Kyoto, Japan, is the Kyoto Protocol. The Protocol requires countries to reduce or limit their emissions of greenhouse gases in relation to 1990 levels, with different countries agreeing to different targets. The agreement also includes a number of features advocated by the United States to ensure countries a high degree of flexibility as they work to achieve their targets. They can make actual emission reductions at home, trade emission credits with others who have made reductions, and use “sinks” such as farms and forests to remove carbon from the atmosphere.
During the negotiations in Kyoto, Vice President Al Gore flew to the ancient Japanese capital to help hammer out the deal. And what the U.S. negotiators ultimately agreed to was a binding 7-percent reduction in emissions below 1990 levels by 2012.
The problem was that it was already 1997, and U.S. emissions had already risen over 1990 levels by more than 8 percent. In other words, we had pledged to reduce our emissions by nearly 14 percent and we didn’t have any kind of program in place to do this, nor any will to put such a program into place.
Another problem was that the United States Senate, under the Byrd-Hagel resolution, had recently voted unanimously that the United States should not sign any climate treaty that – quote – "would result in serious harm to the economy of the United States" or that did not impose some type of commitment on developing countries as well.
Of course Kyoto did not include commitments for developing countries, because the parties, including the United States, agreed at the outset that it would not. And the target agreed to by the United States was portrayed by those who wished to kill the treaty as clearly harmful to our economy, a charge that was not effectively countered by the Administration. So the fact of the matter is that the Kyoto Protocol negotiated by the Clinton administration was about as welcome in the Senate as the proverbial skunk at a lawn party – and senators had no intention of holding their noses so they could tolerate this thing. They just plain didn’t want it anywhere near them.
The Clinton administration, for its part, did nothing to try to bring about the ratification of this treaty that its people had made such a big deal of signing. Granted, the President at the time was caught up in a scandal, and Vice President Gore was gearing up for a presidential run of his own and surely wanted to avoid being publicly associated with anything that could be said to pose a threat the economy. But still, the whole episode of U.S. participation in Kyoto -- and, before that, the UNFCCC -- was enough to recall the line from Shakespeare: “full of sound and fury, signifying nothing.” The bottom line: We clearly were not prepared to deliver at home what we were promising abroad.
But the story does not end there. To fast forward to 2000, American voters elected another President – another Bush – and within months of entering office his administration made a unilateral decision to reject the Kyoto Protocol out of hand, instead of working to change it and make it better. Needless to say, this decision was not received warmly by other nations that had persevered through years of difficult negotiations and that had acceded to U.S. demands early on that the treaty include trading and other business-friendly mechanisms.
As an aside, I think it is interesting to note that in the recent run-up to the war in Iraq, it was hard to find an article about other countries’ perceptions of the United States that did not mention the impolitic way in which this Administration rejected Kyoto. It was perceived as a real slap in the face – a confirmation of global fears that the United States, which is responsible for almost one-fourth of global greenhouse has emissions, had no intention of acting seriously on this issue.
As if to confirm these fears, the Bush administration last year announced a climate strategy that was big on rhetoric but not-so-big on results. Here is what this strategy does: It sets a voluntary “greenhouse gas intensity” target for the nation. The idea is to reduce the ratio of greenhouse gas emissions to U.S. economic output, or GDP. But the funny thing about the White House target – an 18 percent reduction in greenhouse gas intensity by 2012 – is that it would allow actual emissions to grow by 12 percent over the same period.
What’s more, the Administration’s strategy relies entirely on voluntary measures. This despite the fact that U.S. climate policy has consisted primarily of voluntary measures for more than a decade. And what have these voluntary measures achieved? As of 2001, U.S. greenhouse gas emissions were up 11.9 percent over their 1991 levels. And so now we are more than ten years removed from the Earth Summit, and we still – still – have no real plan in place to reduce the U.S. contribution to the problem that we and other countries identified back then as – quote – “a common concern of humankind.”
The reason I have presented this history lesson is to show that, as the world has set out in the last decade to respond to the problem of climate change, the United States has been both a driver and a drag on the process, a driver in terms of development of a framework for action, a drag because we have made no serious attempt to implement that framework. We are like the boyfriend or girlfriend who says sweet things all the time but will never truly commit. And lately we aren’t even saying sweet things any more.
The reality is that it is long past the time for playing these sorts of games. We should have committed long ago to serious action on this issue and, having failed, it is all the more urgent that we get serious now. What does that mean? What principles should guide these efforts? I’d like to offer five – five keys to success in meeting the challenge of climate change.
Key Number One: We must forge a global response to the problem of climate change. As I already said, the United States is responsible for one-fourth of global greenhouse gas emissions. The 15 countries of the European Union are responsible for another one-fourth. The remainder is divided among other developed nations and rapidly developing countries such as China and India. And, while developed countries clearly are responsible for a majority of these emissions, that will not be the case in the future as emissions continue to grow more rapidly in developing countries than anywhere else.
It is one of the most contentious issues in the debate over global climate change – that is, the perceived divide between the interests and obligations of developed and developing countries. Equity demands that the industrialized world—the source of most past and current emissions of greenhouse gases—act first to reduce emissions. This principle is embedded in both the UNFCCC and the Kyoto Protocol, which sets binding emission targets for developed countries only. However, with the Protocol expected to enter into force sometime this year or next, it is now time to turn our attention to what happens next. And as we do this, we need to think broadly of a framework that will include not only the countries that will be implementing the Kyoto protocol, but also the United States, Australia, and the major emitting countries in the developing world.
I do not claim to know what form this framework should take. But here’s what I do know: It must be effective; over the coming decades, it must significantly reduce global emissions of greenhouse gases. It also must be fair. We must recognize who bears responsibility for climate change, and who will bear the brunt of its impacts; and we must arrive at an equitable sharing of responsibility for addressing it. That probably means different kinds of measures for different countries at different times, but all the major emitting countries must do their part. Finally, this new framework must marry our environmental goals with our economic and development objectives. In the developing world in particular, commitments that are not consistent and compatible with raising standards of living and promoting sustainable economic growth have little chance of success. And even in the developed world, all countries will have to be convinced that the environmental goals they agree to, the carbon limits they accept, will not impede their efforts to sustain economic growth. This will mean not only ensuring that countries are given flexibility in how they meet their goals, but also that they can turn over the existing capital stock and acquire more climate friendly technology at prices that they can afford.
This brings us to the second Key to Success in our efforts to address the climate issue: We need to think in terms of both short-term and long-term actions. There is a great deal we can do now to reduce our emissions. At the same time, we need to be looking ahead to longer-term, and potentially more far-reaching, reductions in the years and decades to come.
At the Pew Center, we are developing a plan we call the 10/50 Solution. The idea is to think ahead to where we need to be 50 years from now if we are going to meet the challenge of climate change, and then to figure out decade by decade how to do it.
Why look 50 years out? Because achieving the necessary reductions in our greenhouse gas emissions will ultimately require innovation on a level never before seen. It will require a massive shift away from fossil fuels to climate-friendly sources of energy. And, as I said at the start of my remarks, it will require fundamental changes in how we live and work and grow our economies.
The 10-50 approach doesn’t just look long-term, though. It recognizes that in order to realize that 50-year vision, we have to start right now. We can start with the low-hanging fruit – the countless ways we can reduce greenhouse emissions at little or no cost by simply being more efficient: everything from more fuel-efficient cars and trucks, including hybrids, to energy-efficient appliances and computers, efficiency improvements in industry, and even better management of animal wastes.
In the medium to long term, the challenge is to begin what we have called a second industrial revolution. The Pew Center is just now completing a scenario analysis that identifies several technologies as essential to our ability to create a climate-friendly energy future for the United States. Among them:
· Number one: natural gas. Substituting natural gas for coal results in approximately half the carbon emissions per unit of energy supplied, but we need policies to encourage the expansion of natural gas supply and infrastructure.
· Number two: energy efficiency. We have the ability to dramatically improve the fuel economy of cars and light trucks right now and in the very near future through a combination of advances in the internal combustion engine or through hybrid electric vehicles.
· Number three: renewable energy and distributed generation. The potential here is enormous, but policy support will be essential in promoting investment and breaking barriers to market entry for these technologies.
· Number four: nuclear power. Despite its problems, the fact remains that our carbon emissions would be much higher without nuclear power.
· Number five: geological sequestration. Sequestration holds the potential of allowing for the continued production of energy from fossil fuels, including coal, even in the event of mandatory limits on carbon emissions.
· And number six: hydrogen and fuel cells. The President’s recent announcement of a new federal commitment to fuel cell research was a welcome one, but we must have policies that will help pull these vehicles into the market.
Looking down this list, it is hard not to see that most, if not all, of these technologies would be important even in a world where we did not have this pressing obligation to reduce the amount of greenhouse gases in the atmosphere. For energy security and economic growth reasons, and a wide range of environmental reasons as well, these are simply smart things to do. The second industrial revolution is not just about responding to the challenge of climate change; it’s about creating a common-sense energy future.
And, in order to create that energy future, we are going to have to keep in mind Key to Success Number Three: Industry must be a partner in shaping and implementing climate solutions. The Pew Center serves as a convenor of leading businesses that are taking practical steps to reduce their contribution to the climate problem. The 38 members of our Business Environmental Leadership Council represent nearly 2.5 million employees and have combined revenues of $855 billion. They include mostly Fortune 500 firms, and they are deeply committed to climate solutions:
· There is DuPont, for example, which made a voluntary pledge to reduce its global emissions of greenhouse gases by 65 percent by the year 2010. And guess what? Late last year, they announced they had achieved this target eight years ahead of schedule.
· Also ahead of schedule in meeting its target is BP, which in 2002 announced it had reduced global greenhouse emissions by 9 million metric tons in just four years. This marked a 10-percent reduction in the company’s emissions – and, like DuPont, BP had originally intended to achieve this goal in 2010.
Over the past several years, it has become clear that there are three types of companies when it comes to the issue of climate change: those that do not accept the science; those that accept the science and are working internally to reduce their contribution to the problem; and those that accept the science, are working internally and are advocating for strong government action to address this issue.
BP, DuPont and the other companies we are working with at the Pew Center clearly fall into this latter group. And I hope that our government – as well as other governments throughout the world – will take full advantage of their expertise and commitment.
The benefits of active involvement by industry in environmental policy making first became clear to me during negotiations on the Montreal Protocol – the agreement that set out to address the man-made threat to the Earth’s protective ozone layer. An important reason for the success of that agreement, I believe, is that the companies that produced and used ozone-depleting chemicals—and that were developing substitutes for them—were very much engaged in the process. As a result, there was a factual basis and an honesty about what we could achieve, how we could achieve it, and when. And there was an acceptance on the part of industry, particularly U.S. companies, that the depletion of the ozone layer was an important problem and that multilateral action was needed.
I am happy to report that we are seeing the same kind of acceptance and determination to act on the climate issue among the companies we work with at the Pew Center. Their involvement should serve as a reminder that it is industry that will develop the technologies and the strategies that will reduce global emissions of greenhouse gases. It is industry that will have to deliver on government requirements and goals. To ignore this as we try to structure a global response to this enormous challenge is to fail.
Speaking of government, let me introduce a fourth Key to Success in responding to climate change: We have to adopt real, mandatory goals. Voluntary approaches, as I have said, simply have not worked to address this problem. In order to engage the full spectrum of industry and society, we need to set clear, mandatory goals for emission cuts, and at the same time provide sensible, business-friendly rules that give companies the flexibility they need to help meet those goals as cost-effectively as possible.
This is the approach embodied in recent legislation introduced by the bipartisan duo of Senators John McCain and Joe Lieberman. This landmark measure for the first time brings together several features that would be critical to the success of a national climate change strategy. The bill would establish ambitious and binding targets for reducing U.S. greenhouse gas emissions. Equally important, it would provide companies with the flexibility to reduce emissions as cost-effectively as possible – thanks to the creation of a rigorous nationwide system allowing emissions trading and providing some credit for carbon storage. Last but not least, the bill would recognize those reductions that are being made now by the companies that are taking the lead on this issue and provide additional flexibility for these early actors.
Of course, the McCain-Lieberman measure has little chance of becoming law any time soon, but it is an encouraging development nonetheless to see our policymakers in Washington finally coming to grips with exactly what it is going to take to yield real progress toward a climate-friendly future. And what it is going to take is a set of real, enforceable commitments.
This leads us finally, and forgive me if this seems redundant, to Key to Success Number Five: The United States must be an integral part of the climate solution. Despite having 4 percent of the world’s population, we have contributed nearly a third of worldwide emissions of greenhouse gases in the last century, and we continue to be the largest source of these emissions worldwide. And still, we have decided to sit on the sidelines while the world moves forward with a plan to begin addressing this challenge. Even worse, we have yet to develop anything resembling a domestic program to reduce our own emissions and protect the climate.
This problem, quite simply, will not be solved without us. We owe it to ourselves, we owe it to other nations, and we owe it to future generations, to commit American ingenuity and American leadership to meeting this challenge. I think the job begins at home: We must achieve a national consensus on how best to reduce our greenhouse gas emissions. And from there, we must engage constructively with other nations in the searching for a lasting global solution.
So there you have it. Five keys to success: We need to address this issue globally. We need to think and act both short-term and long-term. We need to involve industry. We need mandatory goals. And we need the United States to do its part both at home and abroad.
Yet another key to success, as I have learned over the years, is to keep your remarks to a reasonable length. So I will stop there, and I welcome your questions.
Thank you very much.
Conference of the Parties 6 (COP 6)
Climate Talks in The Hague, The Netherlands
November 13-24, 2000
November 13-24 at the 6th Conference of the Parties (Cop-6) in The Hague. This section of the Web site provides pertinent background materials and coverage of the conference.
On the Table at COP 6
The 1997 Kyoto Protocol includes binding emission reduction targets for developed countries, and general provisions for how the Protocol will operate. But there are few specifics on what rules will govern Protocol operations, and these rules raise many policy and technical issues.
The 1998 Buenos Aires Plan of Action specifies in some detail the particulars that remain to be delineated. It also lists issues from the 1992 Framework Convention on Climate Change that require action. All of these issues are "on the table" at the 6th Conference of the Parties (COP6).
For background on the issues, check out the following:
- Getting It Right: Climate Change Problem Demands Thoughtful Solutions
Op-ed by Eileen Claussen to be published in The Washington Post on Nov 15 and The International Herald Tribune Nov 18
- "Getting Kyoto Right"
Speech delivered by Eileen Claussen at The Earth Technologies Forum October 30 Washington DC
- Atlantic Monthly Roundtable
Eileen Claussen, Gregg Easterbrook of The New Republic and The Atlantic Monthly; Mary A. Gade, an adviser to George W. Bush; and Bill McKibben, the author of The End of Nature participated in an Atlantic Monthly interactive roundtable discussion in September. View transcripts of the discussion, hosted by The Atlantic's Jack Beatty.
More coverage of the proceedings:
Conference of the Parties 6 (COP 6) Bis
July 16 - 27, 2001
To the surprise of most observers, international climate change negotiators meeting in Bonn, Germany, reached agreement on Monday on most of the key political issues relating to implementation of the Kyoto Protocol. The decision by the Sixth Session (part two) of the Conference of the Parties to the UN Framework Convention on Climate Change, known as COP-6, covers four principal areas: operating rules for emissions trading and other market-based mechanisms established under the Protocol; how the sequestration of carbon by forests and other "sinks" will be credited toward Kyoto emission targets; funding to help developing countries combat and cope with climate change; and mechanisms to encourage and enforce compliance with the Kyoto targets.
Although the agreement resolves most of the high-profile issues, it does not address many more technical issues that will play a significant role in determining the practicability and efficiency of the emissions trading system and Kyoto's other flexibility mechanisms. The negotiation of these more detailed, technical rules will continue during the remainder of the conference and is likely to spill over to COP-7 this fall in Marrakesh. The Protocol will take effect only when ratified by at least 55 countries accounting for at least 55 percent of developed country emissions in 1990.
All countries except the United States, which has announced that it does not intend to ratify the Protocol, hailed the agreement as a major breakthrough. Many countries in their concluding statements spoke of the need to leave the door open for U.S. participation at a later date.
The Protocol establishes three market-based mechanisms aimed at achieving emissions reductions as cost-effectively as possible. They are emissions trading (the buying and selling of emissions credits among Annex I countries, which are those with binding emission targets); joint implementation (allowing one country with a target to receive emissions credit for a specific project undertaken in another country with a target); and the Clean Development Mechanism, or CDM (allowing developed countries to receive emissions credit for financing projects that reduce emissions in developing countries). Key decisions reached this week include:
- · No quantitative limits on the use of the mechanisms. Instead, the agreement provides simply that domestic action shall constitute "a significant element" of the effort made by Annex I Parties to reach their targets.
- A 2% levy on CDM projects to support developing country efforts to cope with the impacts of climate change. (The agreement does not place a levy on emissions trading or joint implementation.)
- Nuclear projects under joint implementation and CDM not specifically excluded, but "Annex I parties are to refrain from using" credits generated from such projects.
- Sinks projects will be allowed under the CDM, but will be limited to afforestation and reforestation projects during the first target period (2008-2012). Sinks credits under CDM will be capped at 1% of a country's base-year emissions.
- Simplified modalities and procedures for small-scale CDM projects (including renewable energy and energy efficiency projects).
- A prompt start for CDM through nominations for the CDM Executive Board prior to COP-7, with a view to election of the Executive Board at COP-7.
- To address the risk of overselling emission credits, each Annex I party must hold back from the market 90% of its allowable emissions, or five times its most recently reviewed emissions inventory, whichever is lower. The former test allows countries whose emissions are higher than their target and who will be net buyers to sell up to 10% of their allowable emissions. The latter test allows countries whose emissions are projected to be below their target to sell their excess credits, but not to sell credits they are expected to need to cover their projected emissions.
- Key issues such as fungibility (allowing credits under all three mechanisms to be treated equally) and unilateral CDM (allowing developing countries to generate credits for projects undertaken on their own) are not addressed in the agreement, and will presumably be taken up in the "technical" negotiations that will resume this week.
The Protocol establishes the principle that countries potentially may receive credit toward their emissions targets for carbon absorbed by forests, soils and other so-called "sinks." However, the Protocol left unresolved precisely what sinks activities would be recognized and how the credits would be calculated. Key decisions this week include:
- Broad activities eligible for sinks credits, including forest management, cropland management and revegetation.
- No overall cap on sink credits. Instead, the compromise agreement establishes specific limits on the various categories of sink activities.
- For forest management, Appendix Z sets forth country-specific caps for each Annex I country. Japan's forest management cap is 13 million tons (about 4% of its base-year emissions) and Canada's is 12 million tons (about 10% of its base-year emissions). The Appendix Z caps include sinks credits generated through joint implementation.
- Credits for cropland management, grazing land management and revegetation are not capped, but countries may receive credit only for increased sequestration over 1990 levels.
Under both the Convention and the Protocol, developed countries agreed to provide financial resources to developing countries to help them meet their obligations under the treaties and adapt to the adverse effects of climate change. Key elements of this week's agreement include:
- Establishment of three new funds, two under the Convention and one under the Protocol. Contributions to the Convention funds are voluntary. The new funds are as follows:
- A special climate change fund, to provide assistance for the full gamut of climate change purposes.
- A least developed country fund to support National Adaptation Programmes of Action.
- A Kyoto Protocol adaptation fund to be funded by the CDM levy as well as voluntary contributions.
- An acknowledgment of the "need" for "new and additional" funding under the Convention, but no specific funding level identified and no new legal requirement on countries to provide funds.
- A political pledge by the European Union and several other developed countries to contribute $410 million per year. (This figure includes contributions toward replenishment of the Global Environment Facility). Canada joined this political pledge, but not Japan or Australia.
- Establishment of a new expert group on technology transfer.
The Protocol calls for establishment of procedures and mechanisms to address non-compliance with its provisions. This was one of the most contentious issues in Bonn. While final action on a compliance regime was deferred, major elements were defined:
- The legal character of the compliance regime deferred. At the earliest, a compliance agreement establishing a binding regime would be adopted at the first meeting of Kyoto Protocol parties following the treaty's entry into force.
- Consequences for failing to meet an emissions target include the following:
- Restoration of tons at a rate of 1.3 to 1 (a country must make up its shortfall, plus 30 percent, in the next target period).
- Suspension of eligibility to sell credits
- A compliance action plan (CAP).
- Developing countries to hold majority of seats on both the enforcement and facilitative branches of the Compliance Committee. In the absence of consensus, decisions must be approved by a majority of both of developed country and developing country representatives.
Conference of the Parties 7 (COP 7)
Climate Talks in Marrakech, Morocco
October 29 - Novomber 9, 2001
International climate change negotiators in Marrakech, Morocco, reached agreement today on a complex set of decisions spelling out rules for implementing the Kyoto Protocol. The decisions by the Seventh Session of the Conference of the Parties to the UN Framework Convention on Climate Change, known as COP-7, provide detailed "legal" text elaborating on the broad principles of the Bonn Agreement, reached in July at COP 6.5 in Bonn, Germany.
Major areas covered in the Marrakech Accords include:
- Operating rules for international emissions trading and the Protocol's two other flexibility mechanisms (the Clean Development Mechanism and Joint Implementation) and rules defining a party's eligibility to participate in the mechanisms.
- A compliance regime that sets consequences for failing to meet an emissions target but defers until a later Conference the question of whether the consequences are legally binding.
- Accounting procedures that provide for fungibility - meaning that emissions units under all three mechanisms can be transferred several times as equal units.
- Creation of a new type of emissions unit for sinks credits that cannot be banked for future commitment periods.
- A decision to consider at COP-8 how to proceed at COP-9 with a review of commitments that could frame discussion of future developing country efforts.
In addition, the Conference appointed 10 members and 10 alternates to the CDM Executive Board, nearly doubled Russia's allocation for forest management sinks credit, and approved a declaration to the World Summit on Sustainable Development next September in Johannesburg, South Africa.
The Marrakech Accords effectively complete the work under the Buenos Aires Plan of Action, adopted at COP-4, and set the stage for countries to ratify the Protocol and bring it into force. The Protocol will take effect only when ratified by at least 55 countries accounting for at least 55 percent of developed country emissions of carbon dioxide in 1990. Many countries expressed the hope that entry into force will be achieved by the time of the Johannesburg summit.
The United States participated in the Conference but reaffirmed that it does not intend to ratify the Protocol.
Key Decisions in Marrakech
Mechanisms and Accounting
The Protocol establishes three market-based mechanisms aimed at achieving emissions reductions as cost-effectively as possible. They are emissions trading (the buying and selling of emissions credits among Annex I countries, which are those with binding emission targets); Joint Implementation (allowing one country with a target to receive emissions credit for a specific project undertaken in another country with a target); and the Clean Development Mechanism, or CDM (allowing developed countries to receive emissions credit for financing projects that reduce emissions in developing countries).
Key decisions include:
- Fungibility, allowing emissions units under all three mechanisms to be treated equally. This allows for a more liquid market in emissions units, making the mechanisms more viable and enhancing opportunities for cost-effectiveness.
- Creation of a new Removal Unit (RMU) to represent sinks credits generated in Annex I countries (including through JI). RMUs can be used only to meet a party's emissions target in the commitment period in which they are generated. They cannot be banked for a future commitment period.
- Banking of any remaining emission allowances beyond those needed to meet a Party's target is permitted. Banking of credits generated under CDM or JI is limited to 2.5%, respectively, of a Party's initial assigned amount.
- Unilateral CDM is allowed, enabling a developing country to undertake a CDM project without an Annex I partner and market the resulting emissions credits.
- Annex I Parties that cannot meet the Protocol's inventory requirements can still host JI projects through a project design and approval process similar to the CDM.
- The CDM Executive Board is authorized to approve methodologies for baselines, monitoring plans and project boundaries; accredit operational entities; and develop and maintain the CDM registry. The COP/MOP (the Conference of the Parties meeting as the Parties to the Kyoto Protocol, following entry into force) will oversee rules of procedure for the Executive Board; accreditation standards for, and designation of, operational entities; and a review of regional/sub-regional distribution of CDM project activities.
- The requirement in the Bonn Agreement that each Annex I party hold back from the market 90% of its allowable emissions (or five times its most recently reviewed emissions inventory, whichever is lower) is deemed mandatory. The provision addresses the risk of overselling emission credits that a party might need to meet its target. In essence, oversold units become the buyer's liability.
The Protocol establishes the principle that countries may receive credit toward their emissions targets for carbon absorbed by forests, soils and other so-called "sinks." The Bonn Agreement defined the kinds of sinks activities that are eligible and, for forest management, set country-specific caps for each Annex I country. The Marrakech Accords:
- Russia, which had registered an objection at the time of the Bonn Agreement, sought and received an increase of its ceiling for forest management credits to 33 million tons of carbon annually. The Bonn Agreement had allocated Russia no more than 17.63 million tons.
- Require Annex I parties to report on their sinks activities in order to be eligible to participate in emissions trading and the other mechanisms. Parties that report can participate in the mechanisms but their inventories will be adjusted at the close of the commitment period if their reports are deemed inadequate.
- Require reporting by Annex I parties on efforts to protect biodiversity in the context of sinks activities.
The Bonn Agreement defined the broad outlines of a compliance regime overseen by a Compliance Committee with facilitative and enforcement branches. The agreement also set consequences for failing to meet an emissions target, including: restoration of tons at a rate of 1.3 to 1 (a country must make up its shortfall, plus 30 percent, in the next target period); suspension of eligibility to sell credits; and development of a compliance action plan. Parties took conflicting positions in Marrakech on the legal character of the compliance regime - specifically, whether the consequences for non-compliance should be legally binding. The Marrakech Accords:
- Defer a decision on the legal nature of the compliance regime until the first meeting of Kyoto Parties (the COP/MOP) following the treaty's entry into force.
Review of Adequacy of Commitments
The agenda for each of the last three COPs has called for a review of the adequacy of commitments under the Framework Convention, but each time the item has been deferred, in part because developing countries are not prepared to discuss the question of whether they should take on binding commitments. In Marrakech, the parties agreed to consider at COP-8 how to frame the issue for discussion at COP-9. A workshop is to be held next year to review the most recent report of the Intergovernmental Panel on Climate Change as guidance for future discussions.
Input to the World Summit on Sustainable Development
The Conference adopted a Marrakech Ministerial Declaration providing input to the summit, which will be held in September 2002 in Johannesburg. The declaration emphasizes linkage between sustainable development and climate change; reaffirm development and poverty eradication as the overriding priorities of developing countries; and calls on countries to explore synergies between the Framework Convention and conventions on biodiversity and desertification.
Conference of the Parties 8 (COP 8)
Climate Talks in New Delhi
October 23 - Novomber 1, 2002
The Eighth Session of the Conference of Parties (COP-8) to the UN Framework Convention on Climate Change met in New Delhi from October 23 to November 1, 2002, in conjunction with the seventeenth sessions of the Subsidiary Body on Scientific and Technological Advice (SBSTA) and the Subsidiary Body on Implementation (SBI).
With most of the issues relating to implementation rules for the Kyoto Protocol resolved at COP-7 in Marrakech - but the Protocol not yet in force - the formal agenda at COP-8 was comprised mostly of second-order and technical issues. Indeed, some dubbed the meeting "a COP between COPs." However, beyond the formal agenda - in political statements and in hallway discussions - COP-8 also saw the emergence of a vigorous debate over next steps in the development of the climate change regime. The wide differences among parties on that question was reflected in the difficult, at times bitter, negotiations over the Delhi Declaration, a broad political statement meant to reflect the consensus among parties at COP-8.
The United States, while reiterating its opposition to the Kyoto Protocol, was deeply engaged in the negotiations as a party to the Framework Convention and as a member of the Umbrella Group (developed countries outside the European Union and Eastern Europe). Having repeatedly cited the lack of developing country commitments as a primary basis for its rejection of Kyoto, the United States struck a far different tone in Delhi, declaring that it would be "unfair" to insist that developing countries adopt greenhouse gas targets. The United States also pressed hard on a number of issues that, while largely procedural in nature, appeared to take on broader significance as a test of other parties' willingness to accommodate U.S. concerns.
An overriding emphasis for many parties was the importance of bringing Kyoto into force as quickly as possible. Ninety-six countries - including the European Union nations, Japan, China, India and Mexico - have ratified the Protocol. Its entry into force now hinges on ratification by Russia, which would achieve the necessary threshold of ratification by 55 parties accounting for 55 percent of developed country carbon dioxide emissions in 1990. Although Russian representatives at COP-8 offered conflicting signals on the likely timing of a ratification decision, there remained optimism that Russia would ratify sometime in 2003.
Although most of the issues were relatively minor compared to those in the Bonn Agreement and Marrakech Accords reached at COP-6.5 and COP-7, respectively, parties often stuck to entrenched positions and, overall, made little significant progress. Many of the issues were deferred for further consideration at future meetings. Among the outcomes, COP-8:
- Adopted the Delhi Ministerial Declaration on Climate Change and Sustainable Development.
- Adopted rules of procedure for the executive board of the Clean Development Mechanism (CDM).
- Completed work on the reporting required of developed countries to assess their compliance under the Kyoto Protocol.
- Adopted guidance to the Global Environment Facility (GEF) for managing two new funds established at COP-7 to assist developing countries.
- Adopted new guidelines for national communications to be submitted by developing countries reporting on their emissions and steps they are taking to meet their commitments under the Framework Convention.
- Requested the Intergovernmental Panel on Climate Change (IPCC) and the Montreal Protocol's Technological and Economic Assessment Panel to conduct a special report on the question of HFCs/PFCs - compounds that have replaced ozone-depleting substances but contribute to climate change.
As the host of COP-8, the Indian government set as a principal objective the adoption of a Delhi Declaration, a broad political statement meant to signify the meeting's success. An initial draft circulated by the Indian chair of the conference reflected a strong developing country perspective, emphasizing the issues of sustainable development, adaptation, and implementation by developed countries of their commitments under the Framework Convention.
The draft was silent on the question of steps beyond Kyoto's first commitment period (2008-2012), prompting strong objections from the European Union and some other developed countries (see below). While the United States was largely content with the Indian draft, it concurred in comments by the Umbrella Group calling for acknowledgement of the need for "global participation" in addressing climate change. The G-77, representing developing countries, called for a stronger emphasis on financial assistance and on the adverse economic effects on developing countries of measures taken to reduce greenhouse gas emissions.
As adopted, the Delhi Ministerial Declaration on Climate Change on Sustainable Development makes no reference to future steps to further elaborate the climate regime. It largely underscores principles established in the Framework Convention and themes adopted at the World Summit on Sustainable Development earlier this year in Johannesburg. The Declaration states that:
- Parties that have ratified Kyoto strongly urge others to do so in a timely manner (as nations declared in Johannesburg).
- The IPCC's Third Assessment Report confirms that significant cuts in global emissions will be necessary to meet the Convention's ultimate objective.
- All parties should continue to advance the implementation of their Convention commitments, and developed countries should demonstrate that they are taking the lead in modifying long-term emission trends.
- Economic and social development and poverty eradication are the overriding priorities of developing countries.
- Urgent action is needed to enable countries, and in particular the least developed and small island countries, to adapt to the impacts of climate change.
- Actions are required to develop cleaner, more efficient and affordable energy technologies, including fossil fuel and renewable energy technologies.
- Actions are required, with a sense of urgency, to substantially increase the global share of renewable energy sources.
While the Declaration was adopted by consensus, in statements in the closing plenary the European Union, Japan and Canada expressed disappointment that it did not offer a clearer long-term vision. The EU said it would submit its own statement for the record. Developing countries and the United States expressed strong support for the Declaration. Nigeria expressly thanked the United States for serving as a "constructive force" in the negotiations.
See the Delhi Declaration here. (pdf format)
Although not squarely before the parties as a matter for negotiation, the looming issue of future commitments heavily shaped the political dynamic of COP-8 and dominated much of the political dialogue. Developing countries continued to publicly oppose any suggestion that they take on some form of emission target. Among developed countries, there was a striking reversal of roles by the European Union and the United States, with the former pressing the question of future steps and the latter declaring such discussion premature.
The EU, in its response to the draft Delhi Declaration, called for establishment of a "forward-looking process" following Kyoto's entry into force to consider what actions should be taken after 2012. It said the process should be conducted with a view to "a more inclusive and long-term global cooperation based on broader and balanced participation." In a statement to the plenary, Denmark, which holds the EU presidency, said the EU "is not talking about imposing emission reduction targets on developing countries," but reiterated the call for a new process to broaden participation. The EU's views were echoed by some other developed countries, in particular Australia and Canada.
In his address to the conference, Indian Prime Minister Shri Atal Bihari Vajpayee strongly rejected "misplaced" calls for a process leading to developing country commitments. He argued that per capita incomes and emissions are much lower in developing countries, and that the developing country contribution to atmospheric concentrations of greenhouse gases will remain small compared to that of industrialized nations "for several decades to come."
In the past, the United States has led calls for stronger action by developing countries. In Delhi, however, the United States declared that "it would be unfair - indeed, counterproductive - to condemn developing nations to slow growth or no growth by insisting that they take on impractical and unrealistic greenhouse gas targets."
CDM Executive Board
The CDM, one of the Kyoto Protocol's flexibility mechanisms, allows developed countries to meet their emission targets in part with certified emission reductions (CERs) generated through emission reduction and sinks projects in developing countries. At COP-7, the parties adopted general rules for the CDM and established an interim executive board to get the CDM under way pending Kyoto's entry into force. It is anticipated that COP/MOP-1 (the first meeting of Kyoto parties following the Protocol's entry into force) will ratify the decisions of the interim executive board and the COP and that the interim board will become permanent.
The executive board submitted a report to COP-8 outlining its activities during the past year (including the development of rules and modalities for small-scale CDM projects and accreditation procedures for operating entities) and proposing rules of procedure, which were adopted by the parties with a few modifications.
One of the most contentious issues, pressed by the United States, concerned attendance by observers at meetings of the executive board. Under the informal procedures used by the executive board, observers have not been allowed in the meeting room but instead must watch the proceedings on video. The executive board and Secretariat contend that these arrangements are more economical and allow for greater intimacy and informality. The United States, which having rejected Kyoto is considered an observer, insists that "attendance" means access to the meeting room. It was decided that, in its annual reports, the executive board would inform the COP how it is addressing the attendance issue.
Reporting Requirements Under the Kyoto Protocol
Parties completed a set of detailed guidelines on how developed country parties to the Kyoto Protocol must account for the several types of emission units established by the Protocol and their transfers of these units through Kyoto's flexibility mechanisms - emissions trading, joint implementation, and the CDM.
The guidelines require tracking and reporting of emission units and transfers in a uniform format to allow linkage of national emission registries. They also establish procedures for expert review of registries to assess compliance with the Protocol, including the requirement that parties keep a portion of their emission units off the market in a "commitment period reserve" to ensure they do not sell units needed to meet their targets. Parties found out of compliance with the reporting requirements can be deemed ineligible to participate in the trading mechanisms.
Funding to assist developing countries in meeting their Convention commitments and in coping with climate change impacts continued to be a divisive issue.
At COP-7, the parties established three new funds to assist developing countries, and a group of developed countries pledged a total of approximately $400 million. At COP-8, developing countries pressed for funding to implement adaptation projects, detailed guidance to the GEF for managing the new funds, and regular contributions to the funds. The COP adopted guidance to GEF on two of the funds established in Marrakech - the least developed countries fund, and the special climate change fund. In addition, the parties requested that the UNFCCC and GEF secretariats undertake a comprehensive assessment of developing needs and submit a report at SB-20 (in summer 2004); and requested the GEF to review its project cycle, with a view to making it simpler and more efficient.
The emission targets established under Kyoto apply to a "basket" of six greenhouse gases, including HFCs and PFCs, two classes of substitutes for ozone-depleting substances. The Protocol gives parties flexibility as to which of the six gases to control.
Since Kyoto, the EU has continued to focus special attention on HFCs and PFCs. As part of their domestic climate change policies, several EU states have imposed or are considering phaseout schedules for HFCs and PFCs, and the EU has argued that other countries should as well.
To address the issue, COP-8 invited the IPCC and the Montreal Protocol's Technology and Economic Assessment Panel (TEAP) to undertake a special report to develop balanced scientific, technical and policy-relevant information. The parties also decided to remove HFCs and PFCs as a separate issue on the SBSTA agenda. The outcome was acceptable to U.S. business interests, which argue that, with better information on the costs and benefits of different uses of HFCs and PFCs, countries will be less inclined to simply adopt a comprehensive phaseout.
Sinks in CDM
At COP-7, the parties decided that reforestation and afforestation projects would be eligible under the CDM, but not other land use activities such as avoided deforestation and forest management. The COP-7 decision also requested SBSTA to develop definitions and modalities for afforestation and reforestation projects, taking into account such issues as non-permanence, additionality and leakage.
At COP-8, SBSTA continued its consideration of this matter, focusing in particular on the issue of permanence. Two options were identified: insurance against the destruction or degradation of forest sinks; and creation of a different type of CER unit for sink projects that would be temporary in nature (so-called TCERs). Under the latter option, CERs generated by sink projects would expire at the end of each commitment period and would have to be made up by the country using them, either through substitute credits or reissued credits if the original project still exists.
SBSTA did not resolve the issues and adopted only procedural conclusions, calling for a workshop early next year and further consideration at its next session.
Non-Annex I Communications
The Framework Convention requires developing countries, with funding support from developed countries, to submit national communications detailing their emissions and steps they are taking to meet their Convention commitments. Many developing countries have yet to submit their initial reports.
Parties adopted stronger guidelines for second and subsequent national communications, including the methodologies to be used in developing emission inventories and the types of implementation and adaptation measures to be described. Although developed countries wanted the reports to include data showing emission trends over several years, the decision requires only single-year data, as favored by developing countries. The frequency of reporting is to be taken up at COP-9.
Clean Energy Exports
Following the U.S. withdrawal from the Kyoto Protocol, Canada has proposed that it be allowed emissions credit for selling natural gas and hydroelectricity to the United States, arguing that these clean energy exports reduce U.S. and global emissions. Canada's proposal has two dimensions: establishing the principle that Kyoto parties are entitled to credit for emission reductions resulting from their export of clean energy (defined as natural gas and hydroelectricity) to non-Kyoto parties; and granting Canada up to 70 million tons of credit a year in the first commitment period.
The latter proposal received little support, but the broader idea of credits for clean energy exports received support from a few countries, including New Zealand, Russia and Poland. The EU and, to the surprise of many delegates, the United States strongly opposed the proposal. As noted below, this issue became linked to the PAMs and adverse effects issues, and SBSTA simply decided to continue its consideration of the matter at its next session.
During the negotiation of the Kyoto Protocol, Brazil proposed a formula for establishing emission targets for developed countries based on their historical responsibility for climate change (as measured by their contribution to increased temperature). Since Kyoto, SBSTA's consideration of the issue has broadened to include: 1) all sources and sinks of all regions, not simply carbon emissions from industrialized countries; and 2) indicators of climate change other than increased temperature, such as radiative forcing and increased atmospheric concentrations. As a result of the broadening of the focus to all countries, some developing countries have become concerned about the possible implications for future developing country commitments.
An expert review of the issues coordinated by the Secretariat has concluded that the attribution of climate impacts to specific countries would require a more robust model, including better historical emissions data for each country. At COP-8, SBSTA agreed that work on the Brazilian proposal should continue in the scientific community. SBSTA encouraged research institutions that have been involved in the expert review to continue their work and report to SBSTA-20 (in summer 2004), and invited other research programs to join the effort.
Policies and measures (PAMs)
The Kyoto Protocol requires developed countries to pursue policies and measures (PAMs) to reduce greeenhouse gas emissions and enhance sinks, but allows each country flexibility to devise its own set of measures. Since Kyoto, the EU has pushed for development of methodologies to assess the effect of PAMs on greenhouse gas emissions and to elaborate "best practices."
At COP-8, the issue was derailed by Saudi Arabia's insistence that assessments of PAMs focus not only on their effectiveness in reducing emissions, but also their adverse economic effects on developing countries (and, in particular, oil-producing states). SBSTA was unable to adopt any substantive conclusions, and decided to continue its consideration of this topic at its next session.
Adverse effects of response measures
The Framework Convention requires parties to give "full consideration to what actions are necessary …. to meet the specific needs and concerns of developing country Parties arising from the … impact of the implementation of response measures." The Kyoto Protocol includes a similar provision.
Oil-producing states led by Saudi Arabia continued to press the issue of the adverse economic effects of mitigation measures, not only under the agenda items that explicitly address them, but also in the discussions of PAMs and the Canadian clean energy proposal. As a result, SBSTA and SBI were unable to reach substantive conclusions on any of these agenda items and instead decided to continue consideration of these issues at their next session.
Continuing a debate begun at SB-16 in June, the EU argued that the IPCC's Third Assessment Report (TAR) - reflecting a strong scientific consensus that human activity is a principal cause of climate change - provides the impetus for a new global process to decide on actions beyond 2012. Other countries strongly resisted, however, and SBSTA merely called for further consideration of the TAR at its next session.
The Secretariat and the IPCC organized a special event to discuss research needs in preparation for the Fourth Assessment Report to be completed in 2007. Parties agreed to increase collaboration with research programs independent of the Convention and IPCC processes to develop a better understanding of cross-cutting issues such as the relationship between climate change, sustainable development and equity; stabilization of atmospheric concentrations; and uncertainty.
At the insistence of the United States, the parties considered a new agenda item on effective participation in the Convention process. U.S. delegates - echoing complaints by some industry representatives that notification of and access to proceedings is often lacking - pushed for new procedures for participation in workshops and expert bodies, including notification of meetings on the UNFCCC web site and a default rule allowing participation by any NGO or party observer. The SBI called for notification on the web of workshops and meetings and requested the secretariat to tailor the number of observers to the nature of each workshop.
Arrangements for COP/MOP-1
The Kyoto Protocol provides that, following Kyoto's entry into force, the Conference of the Parties will serve also as the Meeting of the Parties to Kyoto. However, the Protocol does not say whether the meetings should be held sequentially or concurrently, or what the arrangements should be regarding agenda, officers and so forth.
With Kyoto's possible entry into force next year, SBI considered the arrangements for COP/MOP-1 and, in particular, its relationship to the COP. The Secretariat had proposed a concurrent meeting of the COP and the COP/MOP, but with separate agendas clearly identifying which items are COP items, which are COP/MOP items, and which are common issues to be considered in joint meetings of the COP and the COP/MOP. SBI had considerable discussion as to exactly how joint meetings would be organized and, in particular, how decisions would be adopted regarding issues of common concern to both the Convention and Protocol. The SBI considered a draft text but wanted more time to consider the mechanics and implications of joint meetings and referred the matter to its next session.
Venue for COP-9
Parties accepted an offer from Italy to host COP-9, set for early December 2003, with the location to be determined.
International: Developing Countries
GHG emissions from the developing world are increasing and may overtake those of the industrialized world in the next 15-30 years. Parties have thus far put off consideration of binding emission reduction targets for non-Annex I countries, recognizing their low historic contribution to the problem and their need to further develop their economies.
Numerous studies, however, show that actions already being implemented in many developing countries have lowered carbon emissions relative to what they otherwise would have been. Studies also have identified significant opportunities for investment that can contribute to economic growth while averting or lowering carbon emissions and easing local environmental concerns such as air pollution. A study by M. Bernstein et al., Developing Countries & Global Climate Change: Electric Power Options for Growth, June 1999, identifies policy options for meeting projected power needs that can reduce local and global environmental impacts while producing similar or even higher economic benefits than those projected under business-as-usual paths. A subsequent series of reports examined specific policy options for Argentina, Brazil, China, India, and the Republic of Korea.
1990 CO2 Emissions from Fossil-Fuel Combustion and Land-Use Change
This chart illustrates global carbon dioxide emissions in 1995 by region. For each bar, width represents population; height represents per capita emissions; and total area (population times per capita emissions) represents total emissions. Emissions from combustion of fossil fuels are broken out by the three major fuels - coal, oil and gas. The triangle at the top of each bar illustrates the uncertainty associated with emissions from land-use changes. Countries in the "Pacific Asia" group are shown in black. Source: UN Intergovernmental Panel on Climate Change.
Among the industrialized countries, the United States has been most vocal in seeking stronger commitments from developing nations. The Byrd-Hagel Resolution adopted by the Senate in July 1997 (Senate Resolution 98 of the 105th Congress) states in part that the United States should not sign an agreement committing industrialized countries to emission limits unless it also establishes "new specific scheduled commitments...for Developing Country Parties within the same compliance period." With that language in mind, the Clinton Administration said it would not submit the Kyoto Protocol to the Senate for ratification until there was "meaningful participation by key developing countries," but in bilateral talks failed to secure significant commitments from those countries.
Developing country negotiators, noting the Convention's emphasis on "common but differentiated responsibilities," have said they will not be prepared even to discuss the timing or form of potential developing country commitments until industrialized nations have demonstrated further progress in meeting their own emission targets. They also point to unfulfilled commitments by industrialized countries to assist developing nations on technology transfer, capacity building, and adaptation to the impacts of climate change.
Elliot Diringer, a veteran environmental journalist and a deputy press secretary in the Clinton White House, is now director of international strategies at the Center. This column is being written in cooperation with Grist Magazine.
Wednesday, 18 Jul 2001
BONN, Germany I can say from experience that anyone representing the U.S. at international climate negotiations has to be prepared to be cast as the villain -- sometimes unfairly, but not always without cause.
Being the world's largest climate polluter makes the U.S. an easy target. Over a decade of negotiations, it has also put the U.S. at the center of action, whether blocking binding emission targets when the first climate treaty was forged in 1992 in Rio, or contributing some of the best features of the Kyoto Protocol when it was negotiated five years later.
But as countries meet here in Bonn to try again at making Kyoto real, the dynamic is very different. The U.S. continues to cast a long shadow, and draw blame. But it's not nearly the presence it once was.
|Activists in Bonn poke fun at the Bush administration.|
The big difference, of course, is the Bush administration's renunciation of the Kyoto Protocol. As the self-declared pooper at this latest Kyoto party, the United States is wisely keeping a lower profile. It is fielding a much smaller delegation than in the past and has dispensed with daily press briefings. Still, as negotiators haggle behind closed doors, American diplomats are not simply sitting on the sidelines.
Despite rejecting Kyoto, the U.S. remains a party to the Framework Convention on Climate Change negotiated (and signed by George Bush the Elder) in Rio -- the foundation for all the bargaining that has taken place since. And the negotiating agenda here actually is a mix of "Convention" issues and others relating specifically to Kyoto. U.S. negotiators are engaging directly on the former, while approaching the latter a bit more gingerly.
The Convention issues relate largely to developing countries and how the developed countries will deliver the technology and financial assistance promised them in Rio. Negotiators have just started on the thorniest of those issues -- a proposal for industrialized countries to provide developing countries with $1 billion a year in new aid. The U.S. would pay roughly 40 percent (its contribution to greenhouse gas emissions in 1990), a sum it's not about to fork over.
On the Kyoto issues, the U.S. has promised it's not here to obstruct. But U.S. negotiators are speaking up, sometimes forcefully, when they feel it's necessary to "protect U.S. interests." They define these interests largely as guarding against legal precedents that could affect future treaties on other matters. For instance, the U.S. opposed a proposal that would give developing countries a majority of seats on the board overseeing Kyoto enforcement, fearing it could serve as a model for future bodies.
This highly selective approach to negotiating has left traditional U.S. allies frustrated. The U.S. customarily negotiates as a bloc with other "Umbrella Group" countries -- Japan, Canada, Australia and other industrialized nations outside the European Union. Without the full engagement of its biggest partner, the group is now less coordinated and, consequently, wields less clout.
"One of our biggest problems right now," complained a Canadian delegate, "is that the most important member of the Umbrella Group is only there part-time."
Many in industry also miss a stronger U.S. voice. Companies that may be affected by Kyoto whether or not the U.S. is a party -- for instance, those operating or competing abroad -- have in the past counted on the U.S. to ensure that the treaty's rules would be reasonable. Some industry representatives meeting with the U.S. delegation last night urged it to get more engaged on issues like emissions trading and carbon sequestration. "I don't understand why we're just sitting there quietly," one representative said testily.
"The president has made clear that the United States does not support the Kyoto Protocol," responded a lead U.S. negotiator, "and we are not going to be dragged back into it." Besides, he added, when it comes to shaping a treaty, an avowed non-party is not likely to have much credibility with other countries.
Environmentalists, meanwhile, worry that the U.S. may be all too engaged. Watching for bad precedents, they fear, will prove to be legalistic cover for a stealth attack on Kyoto. "It gives them carte-blanche to try to block anything they see fit," said Kailee Kreider of the National Environmental Trust, a Washington-based advocacy group.
Asked by the press today about the U.S. role, conference Chair Jan Pronk voiced no complaints. "The United States is not -- I repeat not -- obstructing," he said. "They are constructively participating in the negotiations." Still, the divisions among other countries remain deep and numerous. So little headway was made in the first two days that Pronk canceled an open plenary session Tuesday night in which negotiators were to report on their closed-door talks.
Ultimately, how the U.S. behaves here on nitty-gritty issues may have little bearing on whether the international community can mount an effective response to climate change. Kyoto's fate will likely remain an open question at least until the next round, this October in Marrakech. Hopefully by then, the U.S. will have told the rest of the world how it would like to proceed, and other nations can decide whether to join it, stick with Kyoto, or find another way forward.
U.S. negotiators may never be able to shake the role of villain. But maybe by the time of Marrakech, they'll at least be ready to play.
Elliot Diringer, a veteran environmental journalist and a deputy press secretary in the Clinton White House, is now director of international strategies at the Center. This column is being written in cooperation with Grist Magazine.
Tuesday, 17 Jul 2001
BONN, Germany It's a fair bet that many in the diplomatic horde converging on Bonn for the latest round of global warming talks would rather be somewhere else.
|Banner at a protest outside yesterday's talks.|
Photo: Independent Media Center.
In the past when they've gathered, the government negotiators charged with forging an international strategy against climate change could usually expect to produce enough forward movement, however incremental, to go home declaring success. Until, that is, the unsettling impasse last fall in The Hague, where tough decisions were due but longstanding differences proved too difficult to bridge.
This time around, the outlook is gloomier still. Indeed, "success" in Bonn might best be defined as averting an outright collapse.
Nearly a decade ago, at the Earth Summit in Rio de Janeiro, nations committed themselves ever so tentatively to the fight against global warming. I covered that heady affair as a reporter for the San Francisco Chronicle. Five years later, having just joined the environmental policy office in the Clinton White House, I was a U.S. delegate to the historic Kyoto conference, where industrialized nations went the next step, pledging to finally start taking real steps.
Now I come as an "observer" representing the Center, an independent nonprofit that is part think tank, part catalyst for corporate action against global warming. My first observation is not a cheery one: Nearly a decade after the search began, the formula for mobilizing a genuine global effort against our greatest environmental threat seems as elusive as ever. Apart from the raft of high-stakes issues still dividing countries, the world's largest emitter, the U.S., has now renounced the Kyoto Protocol, declaring it "fatally flawed."
The official conference agenda calls for picking up where The Hague left off. Negotiators will again spend long, tedious hours haggling over the issues that bedeviled them last time: Should nations be forced to achieve most of their emission reductions at home, or be free to purchase all the emission credits they want from countries with spare ones to sell? How much credit should be allowed for carbon sucked from the atmosphere by forests and farms? How much money will rich countries provide poor countries to help them cope with and combat global warming?
But the real questions looming over the resumed Sixth Conference of the Parties to the Framework Convention on Climate Change are more basic: With the United States now refusing to go along, is the rest of the industrialized world still prepared to continue down the path charted in Kyoto? And if not, what is the alternative?
|Dreary prognosis, colorful critical mass ride in Bonn.|
Photo: Independent Media Center.
Chances are that when weary negotiators head home 10 days from now, those questions will be left begging. Barring an unexpected turn of events -- say, a sudden breakthrough when G8 leaders gather later this week in Genoa -- there will be no decisive outcome to COP6. Europeans will be unable to persuade Japan to join them right now in an unequivocal embrace of Kyoto, providing the critical threshold to put the treaty into effect. Ministers will speechify and take stock, then jet back to their capitals to weigh options for the next round, this October in Marrakech.
This dreary prognosis, particularly when set against the growing scientific certainty that global warming is already upon us, might all too easily be cause for despair. I prefer the long view.
An effective global response to climate change would, if mounted, be the largest experiment in directed change ever undertaken. It would shape countless policies, investment decisions, and technology choices for decades to come, with the goal of gradually weaning industrialized nations from fossil fuels, and keeping the booming developing world from becoming ever more dependent. The challenge is unprecedented, and getting 180 nations to agree on the best way to meet it may well be the greatest diplomatic feat ever attempted.
For all the recent setbacks, there are in fact encouraging signs. Even without a global framework, many nations, both developed and developing, have begun taking concrete steps to curb their emissions. The public and press are more attuned than ever. And the corporate community, which at the time of the Kyoto in 1997 was still in deep denial, is coming around. Major companies like those we work with at Pew are taking, and demanding, real action.
But this momentum, however modest, will be lost unless nations commit themselves to mandatory action with legally binding targets. That was the premise going into Kyoto, and for all the negotiations since. But in rejecting the Kyoto, the U.S., for now at least, rejected that basic premise as well.
Japan still holds out hope of luring the Bush administration back to Kyoto; the European Union favors forging ahead with or without the U.S. The U.S., having offered no alternative or even saying when it might, has promised not to stand in the way. "If other countries want to shoot themselves in the foot," one American official told me, "they're welcome to."
Unless the U.S. offers up a credible alternative, and does it soon, the best course may well be for other countries to settle outstanding differences and make Kyoto real. These two weeks in the city by the Rhine will, hopefully, give us a clearer picture of whether that's possible -- or whether it's time to contemplate other paths forward.
Either way, our ultimate goal must remain the same: an international agreement that includes all the major emitters and delivers real reductions in greenhouse gases at a price the world can afford. It's a tall order. But it's why we're here.
Elliot Diringer, a veteran environmental journalist and a deputy press secretary in the Clinton White House, is now director of international strategies at the Center. This column is being written in cooperation with Grist Magazine.
Thursday, 19 Jul 2001
BONN, Germany About a year ago, Bob Page and his wife were hiking high in the Canadian Rockies in an area they had last visited 10 years before. Approaching a vast expanse of ice known as the Saskatchewan Glacier, they were stunned by what they saw.
"The glacier had retreated about a kilometer," he told me. "Suddenly, there was a new valley there we hadn't seen before. That sight was just so powerful." Page knew instinctively that he was viewing stark evidence of global warming.
Today, Page is hiking the corridors of a stuffy conference center half a world away. He is one of the thousands gathered here in hopes of resuscitating the global drive to keep the world's glaciers intact and avert the many other threats posed by our planet's warming.
|Chair Jan Pronk speaks in the conference center in Bonn.|
Page, however, is not part of the army of environmental NGOs whose representatives routinely buttonhole negotiators and issue press statements hounding governments to action. He is a company man, a vice president for the Canadian-based TransAlta Corp., one of North America's largest emitters of greenhouse gases.
His message, nonetheless, is much the same: Serious consequences await us unless governments and businesses alike get down to the job of protecting our climate. TransAlta, Page said, is fully committed to doing its part. The electric power provider, which generates much of its energy by burning coal, has set a goal of reducing net carbon emissions from its Canadian operations to zero by 2024.
Claims of corporate commitment to the environment are often greeted with skepticism by greens and the public, frequently with good reason. But one of the most profound shifts in the climate debate in recent years is the emergence of leading corporations that don't simply talk the talk -- they are also taking concrete steps to cut emissions and calling on governments to step up their efforts.
To be sure, there are powerful corporations that continue to dispute the scientific evidence of climate change and oppose real efforts to address it. Their views seem to hold sway at the highest levels in Washington. But a growing number of others, including TransAlta and 35 other major corporations we work with at the Center, are stepping up to the climate challenge.
Many of them are here pressing their case. They want a strong international agreement that sets binding targets for reducing emissions. They also want clear, sensible rules that allow for emissions trading, carbon sequestration, and other creative approaches that will enable countries and companies to meet those targets without sending economies or profits into a tailspin.
As ministers arrived here today, and the talks turned from "technical" to "political" issues, the odds still appeared low for such an agreement being struck here in Bonn. The goal is to agree on rules for implementing the Kyoto Protocol so countries can weigh ratifying the treaty, even though the U.S. has rejected it. While negotiators reported progress on some issues, big differences remain on the tougher ones and, in some cases, positions appear to be hardening.
Companies are addressing climate change for a host of reasons. Many are taking a long-term strategic view -- picturing how the world will look decades from now and how they can best position themselves in it. Some, like major insurers, see enormous risk from the potentially catastrophic impacts of a warming climate. Some companies see profit potential in marketing renewable energy and energy-saving technologies, or in becoming brokers in the emerging emissions-trading market. Some simply accept that mounting scientific evidence and public pressure will eventually lead to stiffer government controls. After three decades of environmental wrangling, these companies have learned that they're better off engaging early to help shape rules that are both effective and workable.
TransAlta is counting on good rules to help meet its zero-emissions target. Although the company is investing in renewable energy and new technologies to capture and bury carbon from the coal it burns, its strategy depends heavily on "offsets" -- essentially, paying for actions to reduce or avoid carbon emissions elsewhere as a way of compensating for its own releases.
In one of its more novel projects, TransAlta is supporting a company in Uganda that will market a feed supplement to help cattle digest their food better. Healthier cattle not only produce more and better meat and milk, but they also emit less methane, a powerful greenhouse gas. TransAlta is also one of the pioneers in emissions trading, forging the first trans-Atlantic carbon trade last year with a German electric firm.
But the company will not get emissions "credit" for such transactions unless governments agree on rules for trading and other offset mechanisms. "Unless the market mechanisms are in place," said Page, "it just won't happen."
Even as governments waver, however, financial markets are beginning to recognize the long-term risk of rising carbon emissions and reward companies taking steps to minimize them. Earlier this year, Page said, stock analysts quizzed TransAlta on its carbon outlook. "This was the first time in history we'd been questioned by analysts on our policies in this area," he said.
Failure here in Bonn will be disappointing, but it will not deter TransAlta from its carbon-cutting strategy, according to Page. "A global agreement of some kind is very important to us as a company," he said. "If Kyoto does not survive, we hope the son or daughter of Kyoto will emerge soon."