Climate change is a global challenge and requires a global solution. Through analysis and dialogue, the Center for Climate and Energy Solutions is working with governments and stakeholders to identify practical and effective options for the post-2012 international climate framework. Read more
Tenth Session of the Conference of the Parties (COP) to the U.N. Framework Convention on Climate Change
December 6-17, 2004
Buenos Aires, Argentina
At their tenth annual Conference, COP 10 in Buenos Aires, parties to the UN Framework Convention on Climate Change prepared for the imminent entry into force of the Kyoto Protocol, and skirmished again over the terms for possible consideration of next steps in the international climate effort. In two weeks of talks, negotiators tied up loose ends on technical aspects of the Protocol, produced a modest new “Buenos Aires Work Programme” on adaptation, and agreed to convene a “Seminar of Government Experts” in May that provides an opening for discussing possible future efforts but explicitly “does not open any negotiations leading to new commitments.”
The Tenth Session of the Conference of the Parties came against the backdrop of Kyoto’s impending entry into force. With Russia’s ratification in November, the Protocol is set to take effect on February 16, establishing the first binding international commitments to limit greenhouse gas emissions and an international emissions trading system to promote cost-effective reductions.
Following U.S. rejection of Kyoto in 2001, the annual COPs had been marked by deep uncertainty over the fate of the Protocol. While Kyoto’s resurrection by Russia provided some air of relief in Buenos Aires, at least for the Protocol’s supporters, that mood quickly gave way to a new anxiety: whether it will be possible to strengthen the international effort beyond 2012 (the end of the first commitment period under Kyoto).
A central issue in Buenos Aires was whether countries were prepared to create a space within the formal process to even begin considering the question of next steps. Technically at least, Kyoto’s entry into force requires negotiations starting in 2005 toward a new round of climate commitments. But in negotiations under Kyoto, the United States would be only an observer, not a party. In informal settings, delegates from both developed and developing countries show increasing interest in “post-Kyoto” approaches that could lead the international effort in new directions. The European Union has been the principal advocate of exploring possible next steps within the formal process. With European industry worried about the competitiveness impacts of Kyoto’s emission targets, EU governments want to show they are engaging other countries in discussions to broaden and extend commitments post-2012. Traditionally, developing countries have opposed any moves that could lead to new commitments for them. But at COP 10, the G-77 negotiating group split, with China, India and the OPEC countries maintaining a hard-line position, at least officially, but some members open to more forward-leaning language. The United States, meanwhile, came to Buenos Aires adamantly opposed to any discussion with a view to the future.
The compromise decision on the May seminar makes no direct reference to the post-2012 period, and makes clear the seminar is not a path to negotiating new commitments. But its language does provide an opening for parties to begin exploring alternative paths forward.
Among the key outcomes at COP 10:
Seminar of Governmental Experts
At COP 8 in New Delhi, the EU had proposed the launch of a new process to consider future commitments, only to be rebuffed by the United States and developing countries. In Buenos Aires, the host Argentine government advanced a more modest proposal: a Seminar of Governmental Experts to “analyze future actions by the international community to confront the challenges of climate change,” and to report to COP 11.
The EU sought to go further, proposing a report from the seminar “with a view to taking a decision on further steps at COP 11.” The United States, however, sought to contain the seminar “to an information exchange on practical implementation of existing national policies.” It proposed that “issues of future negotiations, frameworks, or mandates” be explicitly excluded, and that there be “no written or oral report.” The G77 and China offered a similar proposal.
Over the course of the second week, a compromise began to form around language borrowed from the Delhi Declaration adopted at COP 8, with the seminar now described as an exchange of views on “actions relating to mitigation and adaptation to assist Parties to continue to develop effective and appropriate responses to climate change.” However, differences remained as the final day of closed-door negotiations stretched through the night. The draft presented the following morning, when talks moved back into the open, was promptly opposed by India, which proposed an amendment stating explicitly that the seminar was not a path to negotiating future commitments for developing countries.
China, Saudi Arabia and other OPEC countries supported India’s proposal, but two other developing countries – South Africa and Tuvalu (representing small island states) – supported the text as presented. The EU, Canada, Japan, Russia, Australia, New Zealand, and Norway also supported the text as presented. Brazil said it could “live with” the text. The United States was silent.
With no compromise after 90 minutes of open debate, the issue went back to informal consultations among Argentina, India, Brazil, the United States and the EU. Their compromise text, accepted by the full COP, states: “Proceedings of the seminar will be made available by the secretariat to Parties for their consideration, bearing in mind that this seminar does not open any negotiations leading to new commitments.”
The final decision frames the seminar as “an informal exchange of information” on measures governments are undertaking to implement their existing commitments and on ways they can “continue to develop” their climate efforts. The seminar will be held either immediately before or after the annual meeting of the UNFCCC Subsidiary Bodies and will be co-chaired by a developed country and a developing country government expert.
The second major focus of the negotiations was a set of issues encompassing both adaptation to the adverse effects of climate change, a key concern for least developed countries and small island states, and adaptation to the impacts of mitigation efforts, the principal concern of OPEC countries. The result was a series of modest steps packaged as the Buenos Aires Programme of Work on Adaptation and Response Measures.
The agreement further specifies the means for implementing the decision on adaptation measures reached at COP 7 in Marrakesh. On adaptation to climate impacts, the Buenos Aires Programme spells out activities to improve data collection, strengthen training and in-country capacity, undertake pilot projects, and promote technology transfer; and calls for three regional workshops and an expert meeting over the next two years to help identify adaptation needs and concerns. On adaptation to response measures, the decision calls for expert meetings on ways to promote economic diversification in oil-producing countries.
The decision also requests the Subsidiary Body for Scientific and Technological Advice (SBSTA) to develop a five-year work program to further advance work on adaptation to climate impacts.
COP 10 also wrapped up the final loose ends relating to implementation of the Kyoto Protocol, including:
- Sinks in the CDM – The COP approved simplified procedures for qualifying small-scale afforestation and reforestation projects under the Clean Development Mechanism (CDM). The simplified rules apply to Kyoto’s first commitment period, and are intended to reduce transaction costs and facilitate approval and implementation of small-scale sinks projects (those removing less than 8 kilotonnes of carbon dioxide per year).
- Sinks activities in Annex I countries – The COP approved “good practice guidance” for forestry and other land use activities under articles 3.3 and 3.4 of the Kyoto Protocol. The guidance is to be used by parties in reporting on sequestration activities in their emissions inventories. It allows parties to use statistical sampling techniques to estimate their GHG removals by sinks activities, rather than examining each specific land area where sequestration is occurring.
- National accounting and reporting – The COP adopted two decisions relating to accounting and reporting procedures under the Kyoto Protocol. One relates to national registries, which will be used to track transfers of emission units among countries. The other decision establishes a standard electronic format for reporting by parties of their holdings of the various types of emissions allowances and credits.
Venue for COP 11/MOP 1
COP 11 will be the occasion of the first COP/MOP – the Conference of the Parties convening in parallel with a Meeting of the Parties to the Kyoto Protocol. With no countries formally offering to host the meeting, the COP decided it would be held in Bonn, where the UNFCCC secretariat is based, unless an alternative venue is offered and accepted by February 1. Canada and Egypt were reported to be considering offering to host the meeting.
The full text of COP 10 decisions is available on the website of the UNFCCC Secretariat.
Our Reports Released at COP 10
We released two new reports in Buenos Aires on December 13:
The papers were developed as input to our Climate Dialogue at Pocantico, an ongoing series of discussions among senior policymakers and stakeholders from 15 countries on options for next steps in the international climate effort.
Tenth Session of the Conference of the Parties
to the UN Framework Convention on Climate Change (COP 10)
Buenos Aires, Argentina
December 6-17, 2004
Climate negotiators gather in Buenos Aires, Argentina, on December 6-17 for COP 10 – the Tenth Session of the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC).
COP 10 convenes as the international climate change effort enters a critical transitional phase. In November, Russia ratified the Kyoto Protocol, the final step needed to bring the treaty into force. The protocol establishes binding greenhouse gas emission limits for the 30 industrialized countries that have ratified it and an international emissions trading system. Kyoto’s entry into force also sets the stage for negotiations beginning in 2005 toward future climate commitments.
With few major issues due for decision, COP 10 serves largely as an opportunity to assess progress and consider the challenges ahead. The broad theme of the high-level segment attended by Ministers is the 10th anniversary of the UNFCCC’s entry into force. Ministers will engage in panel discussions on: the Convention after 10 years – accomplishments and future challenges; impacts of climate change, adaptation measures and sustainable development; technology and climate change; and mitigation of climate change – policies and their impacts. Ministers are not expected to adopt a ministerial declaration.
One possible outcome is agreement to organize a seminar in 2005 to begin exploring possible next steps in the international effort. Other issues include efforts by developing countries to accelerate assistance for adaptation to climate change; the treatment of sinks in the Protocol’s Clean Development Mechanism; and the treatment of emissions from marine and aviation fuels.
We held a side event on Monday, December 13, to present two new papers: Climate Data: Insights and Observations; and International Climate Efforts Beyond 2012: A Survey of Approaches. The papers were developed as input to our Climate Dialogue at Pocantico, an ongoing series of discussions among senior policymakers and stakeholders from 15 countries on options for next steps in the international climate effort. Speakers at the side event included dialogue participants Gao Feng, Acting Director General of the Department of Treaty and Law in the Chinese Ministry of Foreign Affairs, and Michael Zammit Cutajar, Ambassador for International Environmental Affairs for Malta.
Other useful links:
Ninth Session of the Conference of the Parties
to the UN Framework Convention on
Climate Change (COP 9)
December 1-12, 2003
Negotiations at COP 9 in Milan, Italy, produced modest progress on a handful of largely technical issues but remained essentially deadlocked on issues touching on the broader question of next major steps in the international climate effort.
The talks, known formally as the Ninth Session of the Conference of the Parties to the UN Framework Convention on Climate Change, came against the backdrop of continued uncertainty over the fate of the Kyoto Protocol. During the first week of the COP, there emerged from Moscow another round of conflicting signals on the prospects for Russian ratification of the Protocol and, thus, its entry into force. In Milan, nevertheless, most parties reaffirmed their strong support for Kyoto and remained publicly hopeful that Russia will ratify.
With the Protocol not yet up and running, and most parties not prepared for formal discussions of steps beyond 2012 (the end of Protocol’s first commitment period), the formal agenda in Milan was perhaps the lightest ever for a COP. Among the few important outcomes were decisions on the technical rules for sinks projects in the Clean Development Mechanism and on guidelines for the operation of two funds to assist developing countries: the Special Climate Change Fund and the Least Developed Countries Fund.
Nearly 100 ministers attended the high-level segment of the conference and participated in three loosely framed roundtable discussions that served largely as an opportunity to restate familiar positions. Ministers spoke gingerly, if at all, to the looming questions of further action under the Framework Convention, seeking to avoid the kind of rancorous political debate that erupted last year at COP 8 when the European Union and some other industrialized countries called for a process to consider future steps, only to be rebuffed by developing countries, supported by the United States.
Still, strong differences over the question of next steps continued to shape the negotiating dynamic at the technical level. On issues such as consideration of the Third Assessment Report (TAR) of the Intergovernmental Panel on Climate Change (IPCC), attempts to frame decisions in ways that could lead to formal discussion of next steps, led largely by the EU, were consistently resisted by other parties, including to one degree or another the United States, Saudi Arabia, China, and other developing countries. The result in most cases was continued stalemate, with decisions only to discuss the issues further in future negotiations.
In both public statements and private remarks, delegates expressed a mix of deepening frustration with the negotiating process and new openness to alternative approaches both within and outside the UNFCCC framework. Some worried that prolonged uncertainty over Russian ratification could dissipate what momentum remains in the process. Postponing COP 10 until sometime in 2005, to allow more time for Russian ratification, was considered but rejected. At the same time, there was growing acknowledgment of efforts being undertaken outside the UNFCCC process – including action at the state level in the United States – and growing recognition that future efforts must be pursued both within and outside the climate regime. There were also tentative signs that some developing countries are closer to entertaining discussion of next steps. Many delegates took note of a comment by China, in a session on technology transfer, that the purpose of the discussion was to “double the chances for developing countries to be more able and then willing to participate in mitigation actions in the future.”
With the formal negotiations so uneventful, many felt that the greatest value at COP 9 was the very full slate of side events highlighting national efforts and presenting new research and thinking on future approaches. Many events drew standing-room-only crowds and delegates welcomed the infusion of fresh ideas. (A high-level forum of ministers and business and NGO leaders, cosponsored by the Center, can be viewed at http://cop9.str3.com/episode.aspx?id_episode=228&format=WM).
The United States, having rejected Kyoto, sought primarily to persuade other parties that its science and long-term technology initiatives represent a genuine effort to address climate change. While some parties welcomed the U.S. initiatives, most remained unconvinced. On negotiating issues, the United States was most active on sinks in the CDM (in order to ensure that the decision did not disadvantage genetically-modified organisms), the budget for the climate Secretariat, and the consideration of the IPCC TAR. As in New Delhi, the United States was frequently aligned with Saudi Arabia and other developing countries, and against the EU, in opposing proposals that could lead in the direction of future commitments.
Following are the outcomes on key issues:
Sinks in the CDM
In the Marrakech Accords at COP 7, the parties agreed to allow afforestation and reforestation projects under the CDM, but did not agree on the detailed rules for such projects. In Milan, the parties adopted a decision setting forth the modalities and procedures for sinks projects in the first commitment period (the treatment of sinks projects under the CDM for the second commitment period will be decided as part of the second commitment period negotiations). The decision completes the last remaining issue relating to the Kyoto Protocol under the Buenos Aires Plan of Action.
The main issue has been how to address the non-permanence of sinks projects. In particular, if a sinks project is destroyed – for example, a forest burns down – and the carbon that had been sequestered is re-released into the atmosphere, who should be liable: the project developer, the host country, or the holder of the CERs? The COP decision adopts the latter approach, by making CERs generated from sinks projects of limited duration. The decision defines two types of sinks CERs: tCERs (temporary CERs), which are valid for only one commitment period; and lCERs (long-term CERs), which are valid for the project’s full crediting period. (Sinks projects can have a crediting period of either 20 years, with the possibility of two renewals up to 60 years total, or 30 years with no renewals.)
Both types of CERs must be used for the commitment period for which they were issued (i.e., they cannot be banked) and both must be replaced by another credit (an AAU, ERU, or CER) prior to their expiration. Project participants can choose which of the two approaches to use. In practice, the two approaches are similar. On the one hand, tCERs will be reissued if a sinks project is still in existence; on the other hand, lCERs will need to be replaced before the end of the crediting period if monitoring indicates that the sequestration from a sinks project has been reversed.
The COP9 decision also addresses the issues of additionality, leakage, uncertainties and socio-economic and environmental impacts. The latter was the most controversial, in particular due to efforts of some European states to exclude sinks projects involving genetically-modified organisms (GMOs). Rather than ban projects involving GMOs, the decision requires that they be evaluated in accordance with the host country’s national laws, and that information on the species used be identified in the project design document (PDD). The United States, concerned about the precedent of singling out GMOs, indicated it would file a statement with the Secretariat expressing its views on the decision.
The agreement also defines small-scale projects, which are eligible for fast-track approval, as those that result in net anthropogenic sequestration of less than 8 kilotonnes of CO2 per year, and are developed or implemented by low-income communities or individuals. Modalities for small-scale projects, are to be considered at COP 10.
IPCC Third Assessment Report
Last June, the Subsidiary Body on Scientific and Technology Advice (SBSTA) agreed to complete its work on the TAR and initiate two new agenda items on scientific, technical and socio-economic aspects of (1) adaptation and (2) mitigation. For this session, parties submitted detailed views on the elements, scope and priorities of the work to be undertaken under these two new agenda items. However, due to fears by a number of countries (including the United States, China and Saudi Arabia) that some of the proposed elements were directed at negotiating new mitigation commitments, the SBSTA was unable to agree on any detailed elaboration of the new agenda items. Instead, it simply agreed to hold a workshop on each of the new agenda items at its next session to explore the themes of “sustainable development, opportunities and solutions and risk.”
Special Climate Change Fund
After contentious negotiations, the COP adopted a decision providing guidance to the Global Environment Facility (GEF) on its administration of the Special Climate Change Fund (SCCF) – one of the two new Convention funds created by the Marrakech Accords (along with the least developed countries fund, discussed below). The decision allows the GEF to make the SCCF operational. The main controversy concerned funding for economic diversification to countries adversely affected by mitigation measures. OPEC countries continued to press strongly for such funding, while the EU resisted. The COP decision provides guidance only with respect to funding of technology transfer and adaptation activities. The decision provides for the SCCF to also fund mitigation and economic diversification activities, but calls on countries to submit further views on these areas with a view to taking a decision at COP 10, effectively delaying actual funding of these activities for at least another year.
Least Developed Countries Fund
The COP also adopted a decision providing further guidance on the operation of the Least Developed Countries Fund. The decision provides for supporting national implementation of adaptation plans on a “full-cost” basis, taking account of the level of funds available.
Program budget for 2004-2005
The Parties approved nearly US$35 million for program activities for the 2004-2005 biennium, and an interim allocation of nearly $5.5 million for Kyoto Protocol-related activities to be added to the 2005 budget if the Protocol enters into force. The $35 million represents a 6 percent increase over the previous funding period, well below what the Secretariat had originally requested, and includes $3.3 million for Kyoto Protocol preparatory activities. Because of its objection to funding any Kyoto-related activities, the United States indicated that it would reduce its contribution by its proportionate share (21 percent) of the $3.3 million.
Non-Annex I Communications
Developed countries continued to press for specific requirements on the timing and frequency of reporting by developing countries on their emissions and ongoing climate efforts. The Framework Convention specifies the timing only of the first communication and leaves for a future decision the timing of subsequent communications. The parties were unable to resolve the issue and carried it over to the next SBI meeting.
Date and Venue of COP 10
The COP accepted Argentina’s offer to host COP 10 in Buenos Aries. Some parties advocated postponing the meeting until sometime in 2005 to allow additional time for Russian ratification, but the COP, adhering to the practice of annual conferences, scheduled it for late 2004.
Press Release: Moving the Debate Beyond Kyoto: Reports Offer Options, Insights on Advancing the International Climate Effort
For Immediate Release:
December 13, 2004
Contact: Katie Mandes: (703) 516 0606
Elliot Diringer: (011) 54 911 5413 6218
MOVING THE DEBATE BEYOND KYOTO
Report Offers Options, Insights on Advancing the International Climate Efforts
Washington, D.C. – With the Kyoto Protocol about to enter into force, two new reports by the Pew Center on Global Climate Change examine key issues facing governments and stakeholders as they begin weighing options for strengthening the international climate change effort beyond 2012.
The two reports – Climate Data: Insights and Observations; and International Climate Efforts Beyond 2012: A Survey of Approaches – were prepared as background material for the Climate Dialogue at Pocantico, an ongoing series of discussions among senior policymakers and stakeholders from 15 countries on options for next steps in the climate effort. The reports were released today at COP 10 in Buenos Aires.
“Kyoto is a start, but ahead lies a far greater challenge: engaging all the world’s major emitters in a long-term approach that fairly and effectively mobilizes the technology and resources needed to protect the global climate,” said Pew Center President Eileen Claussen. “These new reports lay out a broad array of options for moving the international effort forward, and offer keen insights on the very real challenges we face in the coming negotiations.”
Climate Data: Insights and Observations, by Kevin Baumert, Jonathan Pershing, Timothy Herzog and Matthew Markoff of the World Resources Institute (WRI), draws policy-relevant observations from a comprehensive database of emissions, energy, economic and other data assembled by WRI and called the Climate Analysis Indicators Tool.
The report focuses largely on the 25 countries with the largest greenhouse gas (GHG) emissions. Among its findings:
- A relatively small number of countries produce a large majority of global GHG emissions, and most also rank among the world’s most populous countries and those with the largest economies. The group includes almost an equal number of developed and developing countries, as well as economies in transition.
- Per capita emissions and per capita income vary widely among the major emitters, a group that includes some the world’s richest and poorest countries.
- The group of top emitters varies little whether counting only carbon dioxide (CO2) emissions from fossil fuel combustion, or CO2 from land use change as well, or other greenhouse gases; or whether looking at present, cumulative or projected emissions.
The report also looks at variations in carbon intensity, vulnerability to adverse climate impacts, and capacity to address climate change.
International Climate Efforts Beyond 2012: A Survey of Approaches, by Daniel Bodansky of the University of Georgia and Sophie Chou and Christie Jorge-Tresolini of the Pew Center, surveys and synthesizes more than 40 proposed approaches for strengthening international climate efforts beyond 2012.
In addition to brief summaries of each proposal, the report provides an overview of key issues in the design and negotiation of future international efforts, and describes how the various proposals seek to address them. The issues include: the form and forum of negotiations; the time frame of a future agreement; the type and stringency of climate commitments; burden-sharing; and adaptation. The report also outlines criteria for assessing different options from a policy and a political perspective.
“It’s clear from this report that lots of smart people are thinking creatively about the best ways to strengthen the international climate effort,” said Claussen. “Working with policymakers and stakeholders through our Climate Dialogue at Pocantico, the Pew Center is committed to advancing this critical debate and arriving at fair, practical solutions.”
The Climate Dialogue at Pocantico provides an off-line opportunity for 25 senior policymakers and stakeholders to consider specific options for next steps in the international effort. Members, who participate in their personal capacities, include policymakers from Australia, Brazil, Canada, China, Germany, Japan, Mexico, Tuvalu, the United Kingdom, and the United States; NGO representatives from India, Switzerland and the United States; and senior executives from Alcoa, BP, DuPont, Eskom, Exelon, Rio Tinto, and Toyota.
The first and second sessions of the dialogue were held in July and October 2004. A third session will be held in February 2005, and a final session in May. The objective is a set of post-2012 options to be recommended for consideration by the broader policy community.
The full text of these and other Pew Center reports is available at http://www.c2es.org.
The Pew Center was established in May 1998 by The Pew Charitable Trusts, one of the United States’ largest philanthropies and an influential voice in efforts to improve the quality of the environment. The Pew Center is an independent, nonprofit, and non-partisan organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
Comparison of Passenger Vehicle Fuel Economy and GHG Emission Standards Around the World
Prepared for the Pew Center on Global Climate Change
Feng An, Energy and Transportation Technologies LLC
Amanda Sauer, World Resources Institute
Download Entire Report (pdf)
CLIMATE CHANGE SOLUTIONS: A SCIENCE AND POLICY AGENDA
SPEECH BY EILEEN CLAUSSEN
PRESIDENT, PEW CENTER ON GLOBAL CLIMATE CHANGE
COUNCIL OF SCIENTIFIC SOCIETY PRESIDENTS
DECEMBER 6, 2004
It is a pleasure to be here, and I welcome the opportunity to address such a distinguished group of science leaders. I know that a lot of you are here from out of town, and I have to say that I appreciate what you have done to raise this city’s collective IQ, if only for a couple of days.
I also want to say that I applaud the theme of your meeting, Setting the Agenda for 21st Century Science. If I accomplish nothing else in my remarks, I hope I can leave you with a stronger sense that one of the most important items on the science agenda for this century is climate change and how we respond.
Science holds the key not just to advancing our understanding of this complex problem but also to advancing our ability to reduce the very real risks it poses to the world. Science also will be critical as we try to figure out how best to adapt to climate change in the years and decades ahead. This is one of the most important issues of our time. And each of you, together with your organizations and the scientists and engineers you represent, can and must play a leading role in shaping solutions.
Today, I want to talk with you about what those solutions might entail – and about how you and your organizations can help make them happen. But first, considering that we are here in the nation’s capital, I’d like to spend a few minutes talking about how Washington has responded to climate change so far.
In providing this report card on our elected leaders’ efforts on this issue, I am reminded of the teacher who told the parents of a failing student that they could at least rest assured of one thing. “With grades like these, he couldn’t possibly be cheating.”
Now I know you heard yesterday from a representative of the Bush administration about its approach to the issue of climate change. And I am certain that you heard a lot about our government’s hard work in areas from advancing climate science to promoting technology development and working with industry on an array of programs and initiatives. But the fact of the matter is that the Bush administration’s climate policies represent little more than a “business-as-usual” approach.
With their limited R&D investments, their reliance on voluntary measures, and their lack of planning for how this nation and others can adapt to climate change, the policies advanced by the White House are simply inadequate. They reveal a fundamental misunderstanding of the nature and potential severity of the problem.
The science tells us in no uncertain terms that we need to be doing all we can to, number one, reduce our greenhouse gas emissions today, and, number two, spur the investments needed to achieve even greater reductions in the years and decades ahead. We also need to get real about the fact that climate change is happening now—and that its impacts will accelerate in the years ahead. We need a proactive approach to adapt to climate change so we can limit the damage, economic and otherwise, that this problem will cause.
The Administration, of course, makes much of the ongoing effort to address the “uncertainties” in today’s climate models – specifically concerning the rate and magnitude of global warming. I cannot tell you how often my staff and I, in our meetings with members of Congress and other opinion leaders, hear the refrain that the science on this issue just isn’t there yet – and that the uncertainties in the science suggest that action is not necessary or desirable at this time.
Our response is that, yes, uncertainties certainly exist about future trends. But the certainties and near certainties are equally important. Today, the scientific community agrees on three key points: 1) the earth is warming; 2) the primary cause of this warming is fossil fuel consumption; and 3) if we don’t act now to reduce emissions, this problem will only get worse.
Despite this concensus among scientists, our nation’s climate change policies have changed very little in the last several years. The first President Bush, when presented with evidence that climate change was a problem, pursued a strategy of scientific research and voluntary reductions in greenhouse gas emissions. The evidence is much stronger and much more conclusive today, and yet our basic strategy has not changed.
The White House’s new Climate Change Science Program, for example, has a budget comparable, in inflation-adjusted dollars, to its predecessor during the 1990s, the Global Climate Research Program. There are the more substantive R&D initiatives embraced by this administration – I am talking here about the Hydrogen Fuels Initiative and FutureGen, the much-touted public/private initiative to develop clean coal technologies. But these initiatives, while of value, represent only modest investments in technologies that are decades away from being deployed.
The real proof of our nation’s climate policies, of course, should be in the results, and the bottom line is that the United States is not even close to doing what’s needed to reduce our emissions and put on us a path toward meeting the long term objective of the United Nations Framework Convention on Climate Change to which the United States is a party.
In order to stabilize greenhouse gas concentrations at roughly double pre-industrial levels (that is the equivalent of 550 parts per million), developed countries such as the United States must undertake a concerted effort to deploy existing energy efficiency and renewable energy technologies, and aggressively promote more advanced technologies as old energy capital is retired. Allowing our near-term emissions to grow will only make this task more daunting and expensive. But this is precisely the path we are on, and this is because we continue to rely on a voluntary approach to mitigation.
The current Administration’s plan to reduce the “greenhouse gas intensity” of the U.S. economy actually will result in an increase in absolute emissions. These emissions will grow by roughly 14 percent above 2000 levels and 30 percent above 1990 levels by 2010. Needless to say, this is not the direction in which we want to be headed.
Clearly, we can do better. We must do better. I have often said that climate change calls on us to create the conditions for an energy technology revolution. But a revolution needs two things: an impetus, or spark; and a vision, a vision of the change we want and need to see.
The impetus for the revolution I am talking about, I believe, will have to come from political will. We have seen some important gains on this front in the last couple of years, as various members of Congress, together with state and local officials, have developed and proposed policies that reflect a real understanding of what’s at stake. But an energy technology revolution will not happen without broader support from our political leaders. It will not happen unless and until industry receives clear and consistent policy signals from government that climate change is a priority – and that reducing emissions and developing low-carbon technologies is not a choice but a condition for doing business in America. This is going to take a level of political will that we have not yet seen, but that I hope, with your help, we can generate in the months and years ahead.
What about the vision of where we need to go? At the Pew Center, we recently developed something we are calling the “10-50 Solution” to climate change. By 10-50, we mean we should be looking ahead and thinking about where we want to be on this issue in 50 years. However, at the same time that we are establishing a long-term goal, and making the necessary investments that will allow us to meet it, we also need to identify the strategies and policies we can start pursuing in the next 10 years and in each decade that follows.
The bottom line is that we need a sense of urgency as well as a recognition of the long-term nature of both the climate change problem and its ultimate technological solution. The United Kingdom for example has set 2 goals, a near term goal of a 12.5-percent greenhouse gas emission reduction by 2012 and a longer term one for a 60-percent reduction within 50 years. The United States needs to adopt something similar, setting targets that will, in turn, drive the development of the policies and technologies we will need in order to reach our goals.
After hearing all the hemming and hawing around this issue in Washington, you wouldn’t know that near-term reductions in our emissions are readily available – principally through investments in energy efficiency. Over the decades to come, more advanced technologies such as carbon capture and storage, hydrogen, and possibly advanced nuclear energy can be tapped to provide for the steeper reductions that are ultimately needed. These technologies will require policies to both push and pull them to the markets, and over time these technologies also must be made available to the developing world. But we must start now. Because of the long-lived nature of greenhouse gases, there will always be a substantial lag between the reductions we achieve and the effect of those reductions on atmospheric concentrations of greenhouse gases.
As we consider how to reach our long-term climate objectives, I believe we need to consider three approaches at once.
The first approach is based on the notion of targets and trading. Government cannot mandate a revolution. But it can create the conditions for one. By establishing clear and definitive goals, or targets, and then summoning the powers of the marketplace to meet them.
From its inception, the Pew Center has supported cost-effective, market-based approaches to climate change – chiefly, through an economy-wide cap-and-trade system. This is a policy that sets targets for greenhouse gas emissions and then allows companies the flexibility to trade emission credits in order to achieve their targets in the most economic manner.
This is the approach taken in the Climate Stewardship Act introduced last year by Senators Joseph Lieberman and John McCain. Their bill garnered the support of 44 U.S. senators and prompted the first serious debate in Congress about exactly what we need to be doing to respond to the problem of climate change.
Cap-and-trade works because it enables companies to reduce emissions as cheaply as possible. We all know the example of how trading has worked to achieve cost-effective reductions in emissions of the pollutants that cause acid rain. In fact, it was because of the United States’ successful use of trading to reduce sulfur emissions that our country insisted that trading be a central element of the Kyoto Protocol. And now, inspired by Kyoto, the European Union is on the verge of launching the broadest emissions trading system ever established.
What’s more, right here in the United States, nine Northeastern governors, led by New York Governor George Pataki, are developing a multi-state regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants. This effort is proceeding well, and we expect them to complete their work, as planned, by April of next year, with agreement on a model rule.
Of course, it will likely be some time before we establish a national, economy-wide cap-and-trade system in the United States—the politics (or the spark) isn’t there yet. But what might be possible is a series of interlinked trading systems – the east coast with Europe and perhaps with Canada and the west coast as well. Such a “bottom-up” system could be robust enough both to achieve some environmental benefit and keep costs down. And it would be a valuable learning experience for both sides on this issue, hopefully one that would show that taking action on this issue is both practical and affordable.
The second pathway to the future that I want to focus on is the need for sectoral solutions to climate change. Simply put, any effort to address climate change must include greenhouse gas reductions from all sectors. The two biggest sectoral sources of these emissions are transportation and electric power. Transportation alone accounts for more than a quarter of U.S. energy consumption, and more than a third of our greenhouse gas emissions. And the electricity sector is responsible for almost 40 percent of emissions.
If we want to achieve progress in reducing emissions, we have to achieve major reductions from these two sectors – and that means serious (short-term) efficiency improvements followed by major technological changes. But not surprisingly within these sectors there is real resistance to this kind of approach.
The advantage we have in addressing transportation emissions is that the auto industry is highly concentrated – and global as well. The 10 largest manufacturers account for 74 percent of the global market. The vast majority of cars are produced – and used – in a relatively small number of countries. Major fuel producers are also relatively small in number. What we really need here, and what should be achievable, is an effort to bring all the key players together and chart a path toward a zero emissions future in, say, 30-50 years.
This is not a proposal to dictate specific technologies – each major manufacturer seems to be going down a different technology path, and they should be allowed to do so – but I believe we will be most successful and efficient and if we adopt a set of globally consistent performance standards.
No, it wouldn’t be easy, and many will argue that it is simply too hard. But is it easier, or smarter, to tackle the problem nation by nation, or state by state? At the moment, there are different auto efficiency or CO2 emission standards or goals in the United States, Canada, Europe, Australia, Japan, China, Korea, and Taiwan. And now here in the US we have a proposal from California to establish greenhouse gas standards for vehicles – a proposal that, if it goes into effect, will doubtless be followed by other states. I wonder if the time isn’t close for the private sector to decide that a rational, long-term effort, in which they are “at the table” and can help set the milestones, might not be better than the alternative.
The power sector, for its part, is very different. Power supplies are much more distributed -- there are hundreds, if not thousands of players (far too many to put into a room, let alone around a table), and there are many different ways to generate power. So here we might focus on selected energy sources, the most important of which, both politically and in terms of emissions contribution, is coal. There is no denying that coal will figure heavily in our energy future. It is globally available and it is cheap. Virtually all of the new power plants being planned here in the United States will burn coal. China is projected to add as much as 300 gigawatts of generating capacity over the next 10 years, nearly all of it coal.
How then do we continue to provide power but minimize the impact on the climate? How do we shift investment away from traditional coal plants to newer technologies that will be compatible with the efforts underway to capture CO2 emissions and sequester them deep in the ground? Here, too, I think we need a combination: a global R&D effort, and a clear set of mandates to pull new and better technologies into the market. Many in the coal industry are beginning to see the need for a more proactive strategy, and if they can be assured a place in the future, they may be willing to give up the technologies of the past.
To put it simply, I think every sector that is a part of the problem has to be a part of the solution – including agriculture and forestry, as well as power and transportation.
The third pathway to the future that I want to talk about is one that integrates both climate and development.
We cannot expect developing countries to become full partners in the climate effort if it continues to be seen as a purely environmental issue, a constraint on economic growth and development. Frankly, this is true in developed countries as well. We need policies that speak both to climate and to core development priorities. The place to start, I would suggest, is with national energy policies. Each nation needs to accept that climate change must be one of the drivers of energy policy, as the UK has. Along with security of supply and price, we need energy policies that will not only power the global economy and raise living standards, but that will also help us in our efforts to stabilize the climate.
Similarly, for economies to grow, and for individuals to have the mobility they desire, we must find ways to make our transportation systems more sustainable and more climate friendly. Charting these paths forward will be crucial if we are to succeed in meeting our long-term climate objective.
And to meet that objective, we need your help.
As scientists and engineers, you make decisions about how this nation’s vast technical resources – including human resources – are mobilized. You decide what research problems to focus your attention on and what solutions look most promising. You are responsible for training and nurturing the next generation of scientists and engineers. How grant monies are used, how scholarship funding is allocated, even how course curriculums are designed – all of these questions play a role in setting the stage for the technology revolution we need to address the climate challenge. In a sense, our future is in your hands.
Some of you may be aware that the U.S. Department of Energy has issued a “Grand Challenge” to the scientific community to work on the critical issue of hydrogen storage. While the Pew Center prefers to be “technology neutral”, I would say that there are at least two other “grand challenges” that the scientific community needs to become more engaged in over the next 10 years. These are:
· First, the development of low-cost and reliable technologies and processes for carbon dioxide capture and geologic sequestration; and
· Second, the development of low-cost renewables and the infrastructure and storage technologies that will enable them to become widespread.
All three of these challenges – hydrogen storage, carbon capture and storage, and low-cost renewables – are currently at different points on the RD&D spectrum. But they can all benefit enormously from your brains and your help.
This is why I was so delighted to be invited to speak with this group today. We need your engagement on this issue. Obviously, some of you and your institutions have been working tirelessly on climate issues for a long time. But the level of human, institutional and monetary resources that are currently dedicated to these challenges does not fit the magnitude of the problem. Within your universities, your research institutions, your organizations and the broader group of NSF (or “grant-making”) funding committees, there needs to be significantly greater attention to the challenge of a low-carbon energy future – and research resources need to be allocated accordingly.
And it is not just the challenge of reducing the potential severity of climate change that we need to focus on – as I stated at the top of my remarks, we also need to figure out how to adapt to climate change. Unfortunately, because of the momentum of the climate system and, perhaps more importantly, our own economy and technology, we are beyond the point of preventing climate change.
For example, if we were to somehow cease all greenhouse gas emissions today, we would still be committed to additional global warming of about one degree Fahrenheit over the course of the 21st century. If we set a more realistic, but still ambitious, target of limiting atmospheric CO2 to a doubling of its pre-industrial concentration, we’d likely experience at least an additional three degrees of warming on average globally, with some regions, including the United States and the poles, expected to warm more.
This is not a doomsday scenario – quite the contrary, this is one of the most optimistic outcomes we can expect. But even with such valiant efforts to reduce our emissions, climate change will pose many challenges to our natural ecosystems and resources, economy, and human health. In fact, we’re already starting to see the effects. Therefore, we must find a way to adjust or adapt to these challenges – in other words, we need to prepare ourselves for that level of climate change that we can no longer prevent.
Here, too, scientists and engineers have important roles to play. To adapt to climate change, we must first understand how our environment will respond to the changes in temperature, precipitation, and sea level that are currently projected.
How will our water resources be affected? Which coastal communities lie in harm’s way? Which species are at greatest risk? Then, we must devise methods for preparing these systems for a changing climate – new water management strategies, new coastal development plans, new wildlife conservation efforts. And, we must do all of this against the backdrop of an ever-growing U.S. and global population, using more resources, more land, and further altering the global environment.
Although we shouldn’t fool ourselves into thinking we can engineer ourselves out of this problem, prudence dictates that we seek ways to improve our resilience to climate. The loss of life in Europe during the summer heat wave of 2003, or the death and destruction we witnessed in the Caribbean and the United States from this year’s hurricane season, are the harbingers of what we can expect in a world of continued warming.
I’m sure many of you currently collaborate with colleagues from all over the world. But how many of those colleagues are from developing countries? Building bridges with scientists in the developing world is invaluable for enhancing the capacity of other nations to assess and respond to the challenge of climate change.
I have talked about a number of priorities today. I have talked about the need for an energy technology revolution. I have talked about establishing a long-term goal of achieving a low-carbon economy. I have talked about three pathways for achieving that goal – through targets and trading, sectoral approaches, and integrating climate and development. And I have talked about adaptation.
This is complex stuff, Albert Einstein famously stated that people do not truly understand something unless they can explain it to their grandmother. Well, the unfortunate fact is that people don’t truly understand the problem of climate change. All of us need to do a better job explaining this issue in a way that resonates with people – grandmothers and grandchildren alike.
In a recent paper for the journal Global Environmental Change, scholars Maxwell and Jules Boykoff reported on their analysis of 14 years of climate change coverage in four major daily newspapers: The Washington Post, The New York Times, The Wall Street Journal and the Los Angeles Times. During the period they covered, 1988 to 2002, a clear consensus emerged among climate scientists that climate change was real—and that human activities were a principal cause. And yet, in the newspapers, the majority of articles (nearly 53 percent) gave roughly equal space to this consensus view and to the view of climate-change skeptics that any warming we have seen is the result of natural fluctuations.
This is the challenge we are up against. Science has produced a clear case for action on this issue, but people, including some important government leaders, are still are not getting the message. And I encourage all of you, in your communications with the media and the general public, to make every effort to convey to people what is truly at stake here. At the same time, I encourage you, as scientists, to help us debunk all the junk science that’s out there and help people focus on what we know to be true.
The junk science on this issue comes from all over, but there appears to be a cottage industry of industry-funded think tanks that trumpet every objection they can find to the consensus view that climate change is happening and will only get worse.
So I am asking for your help:
- If you or someone in your organization is talking to the media about this issue, please emphasize the clear and overwhelming consensus among scientists that this is a very real problem we need to begin addressing right now.
- If you see or hear policymakers stressing the uncertainties in the climate science, please also set them straight about the certainties and what they tell us about the need for real and serious action.
- The same goes for media reports on climate change that give equal weight to the scientific consensus on this issue and to the claims of the skeptics. It is important that scientists become engaged, with letters to the editor, op-ed articles, radio call-ins, whatever it takes.
It will take some time and persistence, but as the compelling, robust and irrefutable evidence of the human impact on the earth’s climate continues to accumulate, it will become impossible to ignore.
As scientists, you have the credibility to challenge this nation to step up to the problem of climate change in a manner that reflects the seriousness of this issue. And, together with your peers throughout the country, you have the capability to come up with the new ideas and the solutions that will create a safer world in the decades to come. This is your mission, and it is our mission at the Pew Center as well. And I hope we can work together so that future generations aren’t left wondering why we did so little – when we knew so much.
Thank you very much.
Read the full article (pdf)
by Elliot Diringer
This article appeared in Environmental Finance, Dec/Jan 2004 Issue
International Climate Efforts Beyond 2012: A Survey of Approaches
Prepared for the Pew Center on Global Climate Change
Daniel Bodansky, University of Georgia School of Law, with contributions from Sophie Chou, Christie Jorge-Tresolini, Pew Center on Global Climate Change
Download entire report (pdf)
Climate Data: Insights and Observations
Prepared for the Pew Center on Global Climate Change
Kevin Baumert, Jonathan Pershing, with contributions from Timothy Herzog, Matthew Markoff, World Resources Institute
Download entire report (pdf)
Descargar el reportaje en español (pdf)
THE INTERNATIONAL POLICY FRAMEWORK FOR CLIMATE CHANGE AND BUSINESS
Remarks of Eileen Claussen
President, The Pew Center on Global Climate Change
Climate Change and Business: The Australia-New Zealand Conference and Trade Expo
November 4, 2004
It is a pleasure to be in Auckland for this inaugural conference. Of course I thought I would be in a country where people were not talking 100 percent of the time about the U.S. election. But as it turns out, that has been the major topic of conversation since I arrived.
Reflecting on the election, I think I can see with some confidence that Americans are of two minds about the Bush victory. Fifty-one percent are very excited. And forty-eight percent - well, they're moving to Canada. And they’re going to get flu shots while they’re there too!
Seriously, I am honored to be here, and I congratulate the organizers and the sponsors of this conference for bringing much-needed attention to the important role of business in shaping climate solutions.
The fact that you are holding this conference—and the fact that its sponsors include leading companies, as well as the governments of Australia and New Zealand—reflects how far we have come on this issue in recent years.
Instead of burying our heads in the sand and hoping it all goes away, the time has clearly come for business and government to begin serious planning for the risks and opportunities that this enormous problem presents.
I want to begin my remarks today with some comments on the central role of business in shaping climate solutions. Then I want to talk about four things that business needs from government in order to play this role effectively.
In October, Lord John Browne, the CEO of BP, which I am pleased to see is one of the sponsors of this conference, gave an eloquent speech in the United States about the role of business in addressing environmental and other problems.
He said that the role of business is to “offer new choices … to innovate, to apply knowledge and technology to problems and to turn them into opportunities.”
Turning problems into opportunities. I cannot think of a better way to frame the discussion of climate change today and the role of business in shaping solutions. This is what we are all here to talk about. And it is also the reason why some of the world’s leading businesses are stepping up to the problem of climate change.
Yes, they see and understand the risks of climate change, and they recognize the need to act to minimize those risks. But they also see enormous opportunities in the development of new, climate-friendly technologies that will help our economies advance and grow—without continuing to pose a threat to the global climate. And, finally, they recognize that government will act on this issue, and they would like a seat at the policy table.
At the Pew Center on Global Climate Change, we currently work with 38 leading companies that are committed to climate solutions. Our Business Environmental Leadership Council is a group that includes everyone from Alcoa, BP and DuPont to IBM, Toyota, Weyerhauser and many more.
As of today, 27 of these companies have established targets for reducing their greenhouse gas emissions and/or their energy use. And 11 of them already have met one or more of their targets. In total, we believe that about 40 U.S. companies have voluntarily established targets for reducing their contribution to the problem of climate change.
Why are these companies voluntarily taking action, even in the absence of broader U.S. policies that might force them to? The answer is that they want to improve their competitive position in the marketplace. They want to be seen as part of the solution, not part of the problem. And they want to get a head start developing the technologies and the strategies that will contribute to reduced emissions in the years ahead.
But, of course, voluntary action by selected companies is not enough. In order to preserve our option to stabilize concentrations at roughly a doubling of pre-industrial carbon dioxide levels (a frequently cited goal), developed country emissions would need to be 50% lower in 2050 than they are today and coordinated with substantial developing country efforts as well. And, as ambitious as this goal may be, it will not prevent all adverse impacts of climate change. We are already observing impacts to natural systems, as the soon-to-be-released Arctic Climate Impact Assessment will show.
But this objective is a tall order and impossible to envision without the participation of all businesses and all key industrial sectors. So how can we get to a point where business is broadly engaged in this unprecedented effort? I believe the answer lies with government. At the international and national levels, government needs to provide business with four things: certainty of direction, flexibility in execution, an ability to compete fairly, and a willingness to enter into long-term research and policy partnerships. I want to use the remainder of my remarks to talk about each of these.
First, certainty of direction. In the United States, it is said that nothing is certain except for death and taxes. But on the issue of climate change, businesses need some degree of certainty about something else. They need to know that climate change is a priority, they need to understand the direction and the ultimate goal of national and international climate policies, and they need to realize that this is a serious endeavor, one at which we must be successful.
Knowing and understanding these things allows business to invest with confidence in the technologies and the strategies that will get us where we need to be. And this kind of certainty can only be achieved when governments establish clear and measurable, long-term goals.
The most important feature of the Kyoto Protocol is that it sends a signal of government resolve—Kyoto is a strong declaration of multilateral will to confront a quintessentially global challenge. But Kyoto is only a first step. It was agreed at the outset that Kyoto’s emission targets would apply only to developed countries, and now, with the United States and Australia on the sidelines, the Protocol covers just one third of global greenhouse gas emissions—and only through the end of the current decade.
This is helpful, but I do not believe it is enough certainty for business. Both internationally and at the national levels, governments need to establish clearer, long-term goals that show business where we’re headed on this issue.
British Prime Minister Tony Blair has committed his nation to a 60-percent cut in greenhouse gas emissions by 2050. That is what I mean by directional certainty. It is also the first instance of a world leader taking a long-term view on how to address this problem. And it is backed up by a set of measurable shorter-term goals – for example, how much can be expected from efficiency improvements, and how that is to be achieved; how much can be expected from renewables, and in what time frame. We can only hope that the rest of the world follows Britain’s example, setting a goal and laying out a plan to achieve it, in the years to come.
Governments, of course, can establish different types of goals. Goals can be focused on specific environmental outcomes—such as greenhouse gas concentrations (for example, 550 parts per million) or levels of warming (for example, not to exceed a 2 degree increase over current global average temperatures) although I do not believe that these kinds of goals can be negotiated. Goals also can be focused on levels of emissions and desired reductions, as in the British example. Or, they can be focused on specific sectors. An example: we will all be driving zero carbon emission vehicles by 2050. Or, we will achieve a 75-percent reduction in power plant emissions by 2040.
Of course a goal by itself is not sufficient. Business also needs to know the system that will be used to guide us toward the goal. And this brings me to the second thing government can offer business: flexibility. This means including all greenhouse gases in whatever approach we take, and it means taking advantage of all solutions, even ones that are temporary, like carbon sequestration in trees and soils. Most importantly, it means taking advantage of the opportunities afforded by emissions trading. By making trading the centerpiece of its national effort to reduce emissions, the European Union is ending a powerful message to the world. And there is also the effort under way in the United States, where nine northeastern governors are developing a multi-state regional cap-and-trade initiative aimed at reducing carbon dioxide emissions from power plants.
By establishing clear goals and then granting businesses a high degree of flexibility in how to meet them, these initiatives reflect a sophisticated understanding of how business works.
The bottom line is that any government response to the climate issue must create ample room for business to do what it does best. The reason why emissions’ trading is a good idea is because it allows businesses to minimize their compliance costs through good management. They reduce what they can internally, they try to find ways to reduce more cost-effectively than their competitors, and they pay others who can reduce their emissions more cheaply. The smartest companies then go a step further—they invent new products and processes and set out to find new markets for helping others reduce their emissions.
Think for a moment about the amazing variety of activities that businesses can undertake to reduce their contribution to climate change. They can implement green power programs and cogeneration projects, they can develop energy-saving processes and products, clean fuels, biomass energy, clean-burning vehicle engines and much, much more. Let me offer a few examples from the companies we work with at the Pew Center:
- Air Products and Chemicals’ larger hydrogen plants now function as cogeneration facilities, producing steam and power as byproducts of the production process and exporting them to a nearby user.
- Boeing is on the verge of launching production of its new 7E7 aircraft. The 7E7 will be lighter due to the use of composite materials and will use 20 percent less fuel than comparable aircraft.
- Weyerhaeuser pulp and paper mills supply more than two-thirds of their own energy needs through biomass fuels. Weyerhaeuser is also involved in the commercialization of gasification technology that significantly increases the amount of heat and electrical energy obtainable from biomass.
- Alcoa has reduced the electricity required to produce a ton of aluminum by 7.5 percent over the last 20 years.
- Between 1999 and 2002, United Technologies reduced energy consumption by 27 percent and reduced water consumption by 34 percent, resulting in a 15 percent reduction of GHG emissions.
Again, here we have business doing what it does best—innovating and identifying opportunities for future growth, all while contributing to the larger effort to reduce emissions. And I believe this is something we can encourage at both the global and the national levels—by creating flexible policy frameworks that unleash the power of the market to help shape climate solutions.
In the United States, 16 states, including Texas, now require electric utilities to generate a specified share of their power from renewable sources. They don’t tell them how to do it; they established the goal. The proposed California vehicle GHG standards also take this approach, establishing performance standards but leaving it to companies to determine how best to meet those standards and allowing them the flexibility to average the standards over their entire fleets.
Even in the absence of a long-term goal, some auto companies are adopting differing takes on what the best near-term and long-term solutions are for both reducing vehicle GHG emissions, and coping with increasing oil prices and the increasing concentration of dwindling oil supplies in unstable regions in the world. Some see hydrogen fuel cells as the answer, others see the hydrogen internal combustion engine, others see a future for diesel or biodiesel, and still others see hybrid technology as a key enabler of any near-term or long-term answer.
Every company is different. Every company goes about its business in different ways. And every company needs to be engaged in climate solutions in a way that suits it best. This means government needs to steer clear of prescribing or dictating the specifics of what businesses need to do, or how they should or should not go about reducing their emissions. In the same way, government should not be in the business of picking technologies. Rather, it is government’s job to set goals, as I have said, and then to give companies the flexibility they need to achieve those goals.
But let’s not forget or underestimate the power and the need for goals, and I mean not just long-term goals, but also shorter-term milestones. Without these, and without a way to measure success, we could end up several decades from now with little to show for our efforts.
I have talked about certainty and the need for goals and objectives. And I have talked about flexibility.
The third thing business needs from government is the ability to compete fairly, or what we sometimes refer to as providing a level playing field. That phrase reminds me of a comment by John Rowe, the CEO of Excelon, a large generator of electricity in the United States, that was made at a conference held by the Pew Center. John gave an excellent speech, and was unequivocal in his statement that mandatory carbon controls were essential, but that they needed to be fair. A questioner got up and, as a point of clarification, asked if the CEO was advocating for a level-playing field, to which he responded that he “had never wanted a level playing field in my life.” But that said, at the very least, government needs to follow the Hippocratic oath and “do no harm” to the competitive position of individual companies that are playing by the rules. This means clear and consistent policies that promote superior environmental performance across the board, without treating some companies more or less gently than their competitors.
At the international level, fairness means developing a policy framework that engages all major emitters of greenhouse gases. Initially the biggest flaw of the Kyoto Protocol, in the eyes of its opponents was the fact that it forced industrialized countries to reduce their emissions without requiring any action, at least in the short term, on the part of China and India.
Now the Kyoto Protocol’s biggest flaw is that it does not include the United States, which is responsible for a quarter of global emissions and has a responsibility to lead on this issue. At the same time, emissions from China and India and other developing countries are rising fast and soon will overtake those from the United States. So we do need a global policy framework that asks something of everyone. It is the only fair way to do this. And it is the only way to bring the United States back into the process.
I am not saying that all countries—or all companies—need to have identical obligations. Flexibility is key. Different countries are at different stages in their development, and they have different resources to invest in climate solutions. But we need to create a framework where all major emitters are involved in ways that they and their competitors view as fair.
There are a number of options for achieving this goal. For example, countries could negotiate national emission targets that differ for different categories of countries. Countries could agree to targets for specific sectors. Developing countries might agree to a set of measures that promote both greenhouse gas reductions and economic development. Targets can be bottom-up or top-down, near term or long-term, sectoral or national, climate-based or energy-based. What matters is that we begin the process of figuring out a new kind of global framework, one in which healthy competition can help us move forward growing the global economy and protecting the climate at the same time.
The fourth and final thing that business needs from government in order to play its rightful role in the climate effort is partnerships. And I am talking here about both research partnerships and partnerships in the development of climate policy.
First let me talk about research. Public-private partnerships can play a vital role in developing new technologies and new ideas in the pre-competitive phase of research. At the Pew Center, we recently put out a report on technology policy that said that partnerships between business and government could achieve an array of benefits. An obvious benefit is that these partnerships leverage government funds so business isn’t bearing the costs of ambitious and sometimes open-ended research efforts on its own. Another benefit is the fact that partnerships foster inter-firm collaborations, especially vertical collaborations between suppliers and consumers of energy.
Let me offer an example of the kind of partnerships I am talking about. In the state of California, a groundbreaking coalition called the California Fuel Cell Partnership is working to help put up to 300 fuel cell vehicles on the road in a series of independent, fleet demonstration projects. This group includes most of the world’s major car companies and leading energy providers, as well as fuel cell technology companies and government agencies.
To date, California roads are home to 55 fuel cell cars and 3 fuel cell buses as a result of this voluntary partnership. It is certainly a start, and a testament to the power of business and government to get things done by working together.
Another partnership example is the one in which Shell Hydrogen is working with partners such as Norsk Hydro, Daimler Chrysler and an Icelandic consortium of government and business entities. Their goal: to figure out how to create the world’s first hydrogen economy in Iceland. And they want to do it by 2050. That’s what I call directional certainty – and it is going to take strong partnerships to get there.
Beyond research partnerships, business and government also need to work together to develop climate policies. The benefits of business involvement in environmental policy making first became clear to me during negotiations on the Montreal Protocol. This was the agreement, of course, that set out to address the man-made threat to the Earth’s protective ozone layer. And, an important reason for the success of the agreement 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 honesty about what we could achieve, how we could achieve it, and when. And there was an acceptance on the part of industry that the depletion of the ozone layer was an important problem and that multilateral action was needed.
On the issue of climate change, we can see the importance of business involvement in policy in a recent decision in the United Kingdom. After receiving input from affected companies, the U.K. government revised its so-called “renewables obligation”—a program that sets targets for the nation’s renewable energy generation. The revision did not water down the targets or extend the timetable in any way, but merely sought to provide the companies and their investors with more certainty about what was expected of them—and when.
And this raises an important issue. In bringing up policy partnerships, I am talking about business having a constructive input on policy rather than acting as an impediment to solutions. In the United States, you could say that some in the business community have been in partnership with government on the climate issue for several years now. And the result is that we’ve seen nothing happen – at least not in Washington. While many businesses in the United States support climate solutions, those businesses with the most influence in the White House and Congress have succeeded in blocking even modest efforts to address this problem.
Obviously, there is a better way. And it begins with governments taking the initiative on the climate problem. Whether at the global or the national level, governments have a responsibility to act on the overwhelming evidence that this problem is very serious and very real. And they have an obligation to stand up to the opposition from some corners of the business community and to say you’re wrong.
However, at the same time, government has a responsibility to acknowledge the central role of business in shaping climate solutions. That means giving business what it needs so it can be a positive force for change. And what business needs, as I have said, are certainty, flexibility, a level playing field, and partnerships.
In the speech I quoted at the start of my remarks, BP’s John Browne said, “Business is one of the most creative and progressive elements of society.” Today, our challenge—and it is a global challenge—is to create the frameworks and partnerships that will allow business to live up to these words and to play its rightful and essential role in protecting the climate.
He went on to say that climate change is a “manageable problem … but only if we start now.”
This is not business-as-usual. And it is not government-as-usual either. It is business and government working together toward a common goal: stabilizing the global climate so we can ensure a safe and prosperous future for our businesses, our communities, our nation and our world.
Thank you very much.