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
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
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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
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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.
POLICY FORUM: CLIMATE POLICY
An Effective Approach to Climate Change
By Eileen Claussen
Enhanced online at www.sciencemag.org/cgi/content/full/306/5697/816
Originally published October 29, 2004: VOL 306 SCIENCE
The Bush Administration’s “business as usual” climate change policy (1), with limited R&D investments, no mandates for action, and no plan for adapting to climate change, is inadequate. We must start now to reduce emissions and to spur the investments necessary to reduce future emissions. We also need a proactive approach to adaptation to limit the severity and costs of climate change impacts.
Science and Economics
Those who are opposed to national climate change policies make much of the uncertainties in climate models, specifically the rate and magnitude of global warming. The Climate Change Science Program’s plan, points out Secretary Abraham, would address these uncertainties, although he offers no assurances that the program will be adequately funded. However, the scientific community already agrees on three key points: global warming is occurring; the primary cause is fossil fuel consumption; and if we don’t act now to reduce greenhouse gas (GHG) emissions, it will get worse.
Yes, there are uncertainties in future trends of GHG emissions. However, even if we were able to stop emitting GHGs today, warming will continue due to the GHGs already in the atmosphere (2).
National climate change policy has not changed significantly for several years. The first President Bush pursued a strategy of scientific research and voluntary GHG emissions reductions. The new Climate Change Science Program has a budget comparable, in inflation-adjusted dollars, to its predecessor, the Global Climate Research Program, during the mid-1990s. The Administration’s current GHG intensity target will increase absolute emissions roughly 14% above 2000 levels and 30% above 1990 levels by 2010 (3). These increases will make future mitigation efforts much more difficult and costly.
While reducing uncertainty is important, we must also focus on achieving substantial emissions reductions and adapting to climate change.
Low-Carbon Technology Development
The Administration’s more substantive R&D initiatives, such as Hydrogen Fuels and FutureGen (clean coal) are relatively modest investments in technologies that are decades away from deployment. We need a far more vigorous effort to promote energy efficient technologies; to prepare for the hydrogen economy; to develop affordable carbon capture and sequestration technologies; and to spur the growth of renewable energy, biofuels, and coal-bed methane capture.
Equally important, we need to encourage public and private investment in a wide-ranging portfolio of low-carbon technologies. Despite the availability of such technologies for energy, transportation, and manufacturing, there is little motivation for industry to use them. Widespread use of new technology is most likely when there are clear and consistent policy signals from the government (4).
One-fifth of U.S. emissions comes from cars and trucks (5). The Administration’s targets to improve fuel economy for light trucks and “sports utility” vehicles (SUVs) by 1.5 miles per gallon over the next three model years fall far short of what is already possible. California is setting much more ambitious emission standards for cars and light trucks. Current efficiency standards can be improved by 12% for subcompacts to 27% for larger cars without compromising performance (5).Hybrid vehicles can already achieve twice the fuel efficiency of the average car.
About one-third of U.S. emissions results from generating energy for buildings (6). Policies that increase energy efficiency using building codes, appliance efficiency standards, tax incentives, product efficiency labeling, and Energy Star programs, can significantly reduce emissions and operating costs. Policies that promote renewable energy can reduce emissions and spur innovation.Sixteen states have renewable energy mandates (7).
The Power of the Marketplace
Policies that are market driven can help achieve environmental targets cost-effectively. A sustained price signal, through a cap-and-trade program, was identified as the most effective policy driver by a group of leaders from state and local governments, industry, and nongovernmental organizations (NGOs) (8).
Senators Lieberman (D–CT) and McCain’s (R–AZ) 2003 Climate Stewardship Act proposes a market-based approach to cap GHG emissions at 2000 levels by 2010. The bill, opposed by the Administration, garnered the support of 44 Senators. Nine Northeastern states are developing a regional “cap-and-trade” initiative to reduce power plant emissions. An important first step would be mandatory GHG emissions reporting.
Adapting to Climate Change
An important issue that Secretary Abraham failed to address is the need for anticipating and adapting to the climate change we are already facing. Economic sectors with long-lived investments, such as water resources, coastal resources, and energy may have difficulty adapting (9). A proactive approach to adaptation could limit the severity and costs of the impacts of climate change.
By limiting emissions and promoting technological change, the United States could put itself on a path to a low-carbon future by 2050, cost-effectively. Achieving this will require a much more explicit and comprehensive national commitment than we have seen to date. The rest of the developed world, including Japan and the European Union, is already setting emission-reduction targets and enacting carbon-trading schemes. Far from “leading the way” on climate change at home and around the world, as Secretary Abraham suggested, the United States has fallen behind.
References and Notes
1. S. Abraham, Science 305, 616 (2004). |
2. R. T. Wetherald, R. J. Stouffer, K. W. Dixon, Geophys. Res. Lett. 28, 1535 (2001).
3. “Analysis of President Bush’s climate change plan” (Pew Center on Global Climate Change,Arlington,VA, February 2002); available at www.c2es.org.
4. J. Alic, D. Mowery, E. Rubin, “U.S. technology and innovation policies: Lessons for climate change” (Pew Center on Global Climate Change,Arlington,VA, 2003).
5. National Research Council, “The effectiveness and impact of corporate average fuel economy (CAFÉ) standards” (National Academies Press, Washington, DC, 2002).
6. “U.S. greenhouse gas emissions and sinks: 1990–2002”(EPA/430-R-04-003, Environmental Protection Agency, Washington, DC, 2002), Table 3–6.2002.
7. Workshop proceedings, “The 10-50 solution: Technologies and policies for a low-carbon future,”Washington, DC, 25 and 26 March 2004 (The Pew Center on Global Climate Change and the National Commission on Energy Policy, Arlington,VA, in press).
8. J. Smith, “A synthesis of potential climate change impacts on the United States” (Pew Center on Global Climate Change, Arlington,VA, 2004). Published by AAAS
Russia's ratification of the Kyoto Protocol is a welcome and important step. Most of the world's industrialized countries are now committed to a binding multilateral effort to address climate change. These countries are clearly showing their resolve to take action to address climate change. And as they move to fulfill their commitments, they will demonstrate that it is a challenge that can be affordably met.
Most importantly, Kyoto's entry into force also sets the stage for a new round of negotiations that can produce a broader, more durable agreement. There is much about Kyoto's design that is worth keeping, especially its use of market mechanisms to reduce emissions as cost-effectively as possible. But new approaches will be needed to better engage the United States and major developing countries in the international climate effort. Next year's negotiations will be an important opportunity for all countries to think openly and creatively about a workable path beyond Kyoto.
Assigned Amount: In the Kyoto Protocol, the permitted emissions, in CO2 equivalents, during a commitment period. It is calculated using the Quantified Emission Limitation and Reduction Commitment (QELRC), together with rules specifying how and what emissions are to be counted.
Anthropogenic Emissions: Emissions of greenhouse gasses resulting from human activities.
Annex I Parties: The 40 countries plus the European Economic Community listed in Annex I of the UNFCCC that agreed to try to limit their GHG emissions: Australia, Austria, Belarus, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, The Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, United States.
Annex A: A list in the Kyoto Protocol of the six greenhouse gases and the sources of emissions covered under the Kyoto Protocol. See also "Basket of Gases."
Annex B: A list in the Kyoto Protocol of 38 countries plus the European Community that agreed to QELRCs (emission targets), along with the QELRCs they accepted. The list is nearly identical to the Annex I Parties listed in the Convention except that it does not include Belarus or Turkey.
Baselines: The baseline estimates of population, GDP, energy use and hence resultant greenhouse gas emissions without climate policies, determine how big a reduction is required, and also what the impacts of climate change without policy will be. Base Year: Targets for reducing GHG emissions are often defined in relation to a base year. In the Kyoto Protocol, 1990 is the base year for most countries for the major GHGs; 1995 can be used as the base year for some of the minor GHGs.
Basket of Gases: This refers to the group six of greenhouse gases regulated under the Kyoto Protocol. They are listed in Annex A of the Kyoto Protocol and include: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6).
Byrd-Hagel Resolution: In June 1997, anticipating the December 1997 meeting in Kyoto, Senator Robert C. Byrd (D-WV) introduced, with Sen. Chuck Hagel (R-NE) and 44 other cosponsors, a resolution stating that the impending Kyoto Protocol (or any subsequent international climate change agreement) should not -
"(A) mandate new commitments to limit or reduce GHG emissions for the Annex I Parties [i.e. industrialized countries], unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce GHG emissions for Developing Country Parties within the same compliance period, or
(B) would result in serious harm to the economy of the United States..."
Bubble: An option in the Kyoto Protocol that allows a group of countries to meet their targets jointly by aggregating their total emissions. The member states of the European Union are utilizing this option. Certified Emissions Reduction (CER): Reductions of greenhouse gases achieved by a Clean Development Mechanism (CDM) project. A CER can be sold or counted toward Annex I countries' emissions commitments. Reductions must be additional to any that would otherwise occur.
Clean Development Mechanism (CDM): One of the three market mechanisms established by the Kyoto Protocol. The CDM is designed to promote sustainable development in developing countries and assist Annex I Parties in meeting their greenhouse gas emmissions reduction commitments. It enables industrialized countries to invest in emission reduction projects in developing countries and to receive credits for reductions achieved, called Certified Emission Reductions (CERs).
Commitment Period: The period under the Kyoto Protocol during which Annex I Parties' GHG emissions, averaged over the period, must be within their emission targets. The first commitment period runs from January 1, 2008 to December 31, 2012.
Conference of the Parties (COP): The supreme decision-making body comprised of the parties that have ratified the UN Framework Convention on Climate Change. It meets on an annual basis. As of February 2003, it is comprised of 188 countries.
Emissions Trading: A market mechanism that allows emitters (countries, companies or facilities) to buy emissions from or sell emissions to other emitters. Emissions trading is expected to bring down the costs of meeting emission targets by allowing those who can achieve reductions less expensively to sell excess reductions (e.g. reductions in excess of those required under some regulation) to those for whom achieving reductions is more costly.
Entry Into Force: The point at which international agreements become binding. The United Nations Framework Convention on Climate Change (UNFCCC) has entered into force. In order for the Kyoto Protocol to do so as well, 55 Parties to the Convention must ratify (approve, accept, or accede to) the Protocol, including Annex I Parties accounting for 55 percent of that group's carbon dioxide emissions in 1990. In November 2004, the Russian Federation deposited its instument of ratification to the UN Secretary General which will trigger the Protocol's entry into force on February 16, 2005. As of December 16, 2004, 132 states and regional economic integration organizations have ratified the Protocol.
European Community: As a regional economic integration organization, the European Community can be and is a Party to the UNFCCC; however, it does not have a separate vote from its members (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom).
Group of 77 and China, or G77/China: An international organization established in 1964 by 77 developing countries; membership has now increased to 133 countries. The group acts as a major negotiating bloc on some issues including climate change.
Intergenerational Equity: The fairness of the distribution of the costs and benefits of a policy when costs and benefits are borne by different generations. In the case of a climate change policy the impacts of inaction in the present will be felt in future generations.
Intergovernmental Panel on Climate Change (IPCC): The IPCC was established in 1988 by the World Meteorological Organization and the UN Environment Programme. The IPCC is responsible for providing the scientific and technical foundation for the United Nations Framework Convention on Climate Change (UNFCCC), primarily through the publication of periodic assessment reports (see "Second Assessment Report" and "Third Assessment Report").
Joint Implementation (JI): One of the three market mechanisms established by the Kyoto Protocol. Joint Implementation occurs when an Annex B country invests in an emissions reduction or sink enhancement project in another Annex B country to earn emission reduction units (ERUs).
Kyoto Mechanisms: The Kyoto Protocol creates three market-based mechanisms that have the potential to help countries reduce the cost of meeting their emissions reduction targets. These mechanisms are Joint Implementation (Article 6), the Clean Development Mechanisms (Article 12), and Emissions Trading (Article 17).
Kyoto Protocol: An international agreement adopted in December 1997 in Kyoto, Japan. The Protocol sets binding emission targets for developed countries that would reduce their emissions on average 5.2 percent below 1990 levels.
Land Use, Land-Use Change and Forestry (LULUCF): Land uses and land-use changes can act either as sinks or as emission sources. It is estimated that approximately one-fifth of global emissions result from LULUCF activities. The Kyoto Protocol allows Parties to receive emissions credit for certain LULUCF activities that reduce net emissions.
Methane (CH4): CH4 is among the six greenhouse gases to be curbed under the Kyoto Protocol. Atmospheric CH4 is produced by natural processes, but there are also substantial emissions from human activities such as landfills, livestock and livestock wastes, natural gas and petroleum systems, coalmines, rice fields, and wastewater treatment. CH4 has a relatively short atmospheric lifetime of approximately 10 years, but its 100-year GWP is currently estimated to be approximately 23 times that of CO2.
National Action Plans: Plans submitted to the Conference of the Parties (COP) by all Parties outlining the steps that they have adopted to limit their anthropogenic GHG emissions. Countries must submit these plans as a condition of participating in the UN Framework Convention on Climate Change and, subsequently, must communicate their progress to the COP regularly.
Non-Annex I Parties: Countries that have ratified or acceded to the UNFCCC that are listed in Annex I of the UNFCCC.
Non-Annex B Parties: Countries that are not listed in Annex B of the Kyoto Protocol.
Non-Party: A state that has not ratified the UNFCCC. Non-parties may attend talks as observers. QELRC (Quantified Emission Limitation and Reduction Commitment): Also known as QELRO (Quantified Emission Limitation and Reduction Objective): The quantified commitments for GHG emissions listed in Annex B of the Kyoto Protocol. QELRCs are specified in percentages relative to 1990 emissions.
Regional Groups: The five regional groups meet privately to discuss issues and nominate bureau members and other officials. They are Africa, Asia, Central and Eastern Europe (CEE), Latin America and the Caribbean (GRULAC), and the Western Europe and Others Group (WEOG). Secretariat of the UN Framework Convention on Climate Change: The United Nations staff assigned the responsibility of conducting the affairs of the UNFCCC. In 1996 the Secretariat moved from Geneva, Switzerland, to Bonn, Germany.
Subsidiary Body for Implementation (SBI): A permanent body established by the UNFCCC that makes recommendations to the COP on policy and implementation issues. It is open to participation by all Parties and is composed of government representatives.
Subsidiary Body for Scientific and Technological Advice (SBSTA): A permanent body established by the UNFCCC that serves as a link between expert information sources such as the IPCC and the COP.
Supplementarity: The Protocol does not allow Annex I parties to meet their emission targets entirely through use of emissions trading and the other Kyoto Mechanisms; use of the mechanisms must be supplemental to domestic actions to limit or reduce their emissions.
Targets and Timetables: Targets refer to the emission levels or emission rates set as goals for countries, sectors, companies, or facilities. When these goals are to be reached by specified years, the years at which goals are to be met are referred to as the timetables. In the Kyoto Protocol, a target is the percent reduction from the 1990 emissions baseline that the country has agreed to. On average, developed countries agreed to reduce emissions by 5.2% below 1990 emissions during the period 2008-2012, the first commitment period.
Umbrella Group: Negotiating group within the UNFCCC process comprising the United States, Canada, Japan, Australia, New Zealand, Norway, Iceland, Russia, and Ukraine.
United Nations Framework Convention on Climate Change (UNFCCC): A treaty signed at the 1992 Earth Summit in Rio de Janeiro that calls for the "stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system." The treaty includes a non-binding call for developed countries to return their emissions to 1990 levels by the year 2000. The treaty took effect in March 1994 upon ratification by more than 50 countries. The United States was the first industrialized nation to ratify the Convention.
A decade after its launch, the international effort against global climate change enters a critical new phase. With the ratification of the Kyoto Protocol by Russia, this landmark agreement will now enter into force. Kyoto's coming of age is a major diplomatic accomplishment: a strong declaration of multilateral will to confront a quintessentially global challenge. But against that challenge, Kyoto is but a first step.
For a quick reference and comparison, we compiled international, national, and state emissions targets.
United Nations Framework Convention on Climate Change
The Climate Dialogue at Pocantico
We convened the Climate Dialogue at Pocantico to provide an opportunity for informal discussion among senior policymakers and stakeholders from 15 countries on options for advancing the international climate change effort. Four sessions were held from July 2004 through September 2005.
The group of 25 included policymakers from Argentina, Australia, Brazil, Canada, China, Germany, Japan, Malta, Mexico, Tuvalu, the United Kingdom, and the United States; senior executives from Alcoa, BP, DuPont, Eskom (South Africa), Exelon, Rio Tinto, and Toyota; and experts from the Center, The Energy and Resources Institute (India), and the World Economic Forum. Dialogue members participated in their personal capacities.
The final dialogue report presents approaches and ideas recommended by the group for consideration by the broader policy community.
Participants and Bios
Session I – July 14-16, 2004
Report of the Co-Chairs
Climate Crossroads Paper / Presentation
Climate Data: Insights and Observations Paper / Presentation
International Climate Efforts Beyond 2012: A Survey of Approaches Paper / Presentation
Session II - October 6-9, 2004
Report of the Co-Chairs
Strawman Elements: Possible Approaches to Advancing International Climate Change Efforts Paper
Session III - February 23-25, 2005
Report of the Co-Chairs
Stawman Elements: An Assessment Paper
Climate Data: A Sectoral Perspective Paper
Session IV - September 26-28, 2005
Final dialogue report now available in English, Chinese, French, and Spanish.
See press release.
On November 15, 2005, we released a new report from the Climate Dialogue at Pocantico.
The Pocantico dialogue built on a series of papers and international workshops undertaken in 2003 by us. Beyond Kyoto: Advancing the International Effort Against Climate Change
The Climate Dialogue at Pocantico was convened with the generous support of the Pew Charitable Trusts, the United Nations Foundation, the Wallace Global Fund, and the Rockefeller Brothers Fund.
U.S. CLIMATE POLICY:
WEBCASTS AND TRANSCRIPTS (in PDF)
THURSDAY JUNE 24, 2004 (full transcript)
Strobe Talbott, President, The Brookings Institution (webcast/transcript)
Eileen Claussen, President, Pew Center on Global Climate Change
Science, Security, and Economics
Moderator: David Sandalow, Environment Scholar, The Brookings
Donald Kennedy, Editor in Chief, Science (webcast/transcript)
R. James Woolsey, Vice President, Booz Allen Hamilton (webcast/transcript)
C. Fred Bergsten, Director, Institute for International Economics
Question and Answer Session (webcast/transcript)
Climate Change: The Policy Challenge
Joseph I. Lieberman, United States Senate (webcast/transcript)
Spencer Abraham, Secretary, Department of Energy (webcast/transcript)
Michael Morris, Chairman, President, and CEO, American Electric Power
Larry Schweiger, President and CEO, National Wildlife Federation
Roundtable: Action by States and Business (webcast/transcript)
Moderator: Sally Ericsson, Director of Outreach, Pew Center on Global Climate
Jo Cooper, Vice President for Government Relations, Toyota
Douglas Foy, Secretary of Commonwealth Development, Massachusetts
Chris Mottershead, Distinguished Advisor BP
Stephanie Timmermeyer, Secretary of Department of Environmental Protection,
Domestic Climate Policy
Eileen Claussen, President, Pew Center
John Rowe, Chairman and CEO, Exelon Corporation (webcast/transcript)
John McCain, United States Senate (webcast/transcript)
Question and Answer Session (webcast/transcript)
FRIDAY JUNE 25, 2004 (full transcript)
Domestic Climate Policy (Cont.)
James Connaughton, Chairman, White House Council on Environmental Quality
Wayne Gilchrest, U.S. House of Representatives (webcast/transcript)
International Climate Action
Stephen Timms, Energy Minister, United Kingdom (webcast/transcript)
Elliot Diringer, Director of International Strategies, Pew Center on Global Climate
Nigel Purvis, Brookings Scholar on Environment, Development and Global Issues,
The Brookings Institution (webcast/transcript)
James Wolfensohn, President, The World Bank Group (webcast/transcript)
Closing Remarks (webcast/transcript)
“Looking Beyond Kyoto: A U.S. Perspective”
Remarks of Elliot Diringer, Pew Center on Global Climate Change
at the Green Week 2004 Conference of the European Commission
Brussels, 2 June 2004
I’d like to begin by offering my congratulations to Commissioner Wallström and to her esteemed colleagues at the Commission for two very welcome and very significant accomplishments.
First, I would like to congratulate you on the establishment of the EU emissions trading scheme. It was not so long ago that the very idea of emissions trading was viewed quite skeptically here in Brussels. Today Europe has not only embraced this alien notion from across the Atlantic, but is leading the world in its practice.
Second, I’d like to offer my congratulations, and my thanks, for the vigorous efforts that led to the recent reaffirmation of Russia’s intent to ratify the Kyoto Protocol. I don’t imagine the EU has received any official message of thanks or congratulations from my side of the Atlantic. But as one representing an organization seeking to advance the effort against climate change, I believe President Putin’s declaration is indeed welcome news, and for several reasons.
One reason is that the Protocol’s entry into force will help ensure that Europe and the other ratifying countries deliver on the commitments made in Kyoto. And in so doing, they will demonstrate to those who are not yet acting that this is a challenge that can be met.
Second, even if Washington is right now distracted by other concerns, Kyoto’s entry into force will send a strong message to the United States. It will remind us of the urgent need for action against climate change, and of the importance of acting multilaterally.
Finally, Kyoto’s entry into force will set in motion the diplomatic machinery that could advance us to the next stage in the international effort against climate change. For we all know that while Kyoto is a start, it is hardly the final answer to global warming. And while I have just congratulated the EU for pushing ahead with the protocol, it is critical, I believe, that we now start looking beyond Kyoto.
If the protocol does indeed enter into force, negotiations could begin as early next year toward a new round of commitments. We should use this opportunity to work toward a new approach – one both broader and deeper, one with the hope of engaging all the world’s major emitters in a long-term effort that fairly and effectively mobilizes the technology and resources we need to protect our global climate.
In a moment I’d like to share some preliminary thinking from the Pew Center on the possible path beyond 2012. But because no path forward can in the long run succeed without the United States, let me first offer a brief assessment of the situation back home.
Most of you I am sure heard about the big climate change news in the States last week. Indeed, it was the most widely heard pronouncement on this issue ever in the United States. I am referring of course to the release of the new movie called “The Day After Tomorrow.” I have not yet seen it but my son has given me his review. And it sounds to me as if one could leave the theatre believing either that climate change is pure science fiction – or that it’s real, and that at any moment it could thrust New York City into an instant ice age.
But while the movie itself might do little to educate people on the real causes and consequences of climate change, or its potential cures, it has drawn enormous media attention to those very issues. The media are so interested, I think, not simply because Hollywood has produced a new disaster movie, but because there is at long last a genuine debate on climate change underway in the United States. And this debate, I am pleased to say, is beginning to produce some genuine action.
Before the “Day After Tomorrow,” the event that may have done the most to raise public awareness of climate change in the United States was, oddly enough, President Bush’s rejection of the Kyoto Protocol. In the three years since, this issue has received growing attention in the media, in boardrooms, in the offices of state governors, and in the U.S. Congress.
The most promising developments have been at the state level. Several of our largest states, led both by Republican and by Democratic governors, are preparing to cap emissions from power plants, cars and SUVs. The nine Northeast states – including New York, New Jersey, and Massachusetts – are working toward creating a regional greenhouse gas market. And California, which traditionally has led the country in demanding cleaner cars, has enacted legislation to limit carbon dioxide from cars and SUVs. The law is being challenged in the courts by the carmakers, and Governor Schwarzenegger has promised to defend it. If the new law survives, other states are expected to follow California’s lead.
These state efforts are important and encouraging, but they must be a prelude only to stronger action at the national level. Here the most promising development is the introduction of legislation to establish a nationwide greenhouse gas cap-and-trade system. This legislation, introduced by Senators John McCain and Joe Lieberman, a Republican and a Democrat, is the first proposal ever put before Congress for a mandatory cap on U.S. greenhouse gas emissions. Recently it won 43 votes in the Senate, several votes short of a majority but a very respectable showing for a first vote. Senators McCain and Lieberman promise to keep bringing the legislation back, and a companion bill has now been introduced in the House of Representatives.
I must be frank and say that it will be some time still, perhaps years, before such legislation is enacted, regardless of the outcome of our November election. And that is important to bear in mind as we think about steps beyond 2012. Because the United States will be in a position to join other countries in a binding international agreement, I believe, only once we have achieved a broad national consensus on just how we are prepared to address this issue at home.
Still, we must begin now to envision such an agreement – one that can work not only for the United States, Europe, and the other industrialized nations, but for developing countries as well. Last year, the Pew Center organized a series of papers and international workshops on the key challenges in forging a workable approach that can take us beyond Kyoto. We are not yet at the point of suggesting specific approaches or architectures. But some important themes emerged from our work last year, and I’d very briefly like to share some of those with you today.
First, a point that emerged over and over again: The basic challenge we face is building political will. In material terms, of course, the challenge is technological – nothing less, actually, than a global technological revolution. This revolution must be carried out in the marketplace, because only markets can mobilize the resources and ingenuity that are needed. But the markets won’t do this on their own. The direction – the imperative – must come from government. And that requires political will.
When and how it materializes depends on a host of factors: public awareness, media attention, elections, even the weather. But it depends as well on our resourcefulness in fashioning common approaches. We must ask ourselves: What types of international arrangements can best capture and motivate political will to achieve the broadest possible participation in an effective, long-term effort?
A second, and related, point is that there is no getting around national interest. We all know that climate change is a common challenge that must be met through collective action. But the political reality is that nations will engage in collective action only if they perceive it to be in their national interest. All parties must try to better understand their respective domestic concerns, and to build a collective framework that assists each in generating greater political will.
This is, in part, a matter of recognizing that climate is not simply an environmental issue but fundamentally one of economics and development. And it is in part a matter of reocgnizing that a multilateral approach cannot succeed by attempting solely to remold countries’ behavior from the top down. It must at the same time recognize and reflect national circumstances from the bottom up.
This leads to a third point: We need a more flexible architecture, one that can accommodate a broader range of national strategies. We must construct a more “variable geometry,” as one of our papers puts it. The Kyoto Protocol provides a degree of flexibility. But it employs only one form of mitigation commitment: fixed targets and timetables. Other approaches are needed. We need different strategies for developed and for developing countries, and possibly within those groupings as well.
A fourth point is that, in considering alternative approaches, we should think about targeting action, not only emissions. The climate effort so far has sought to drive mitigation through measures mandating specific environmental outcomes. An alternative or complementary approach might instead frame commitments in terms of the kinds of actions that are required. For instance, having a long-term greenhouse gas concentration target – say 550 parts per million – would be extraordinarily helpful. But negotiating one would likely be fruitless, and potentially even counterproductive. Why not instead agree on the types of actions needed to move economies toward the goal of climate stabilization. For instance: achieving zero net emissions from the power sector, or replacing gasoline with hydrogen, by 2050.
My fifth and final point is that we must consider the right forum, and the right quorum, for future international efforts. There are strong rationales for a global approach – from an environmental perspective, from an economic perspective, and from an equity perspective. But the reality at the moment is one of fragmentation. A variable geometry could mean for now parallel regimes undertaken within any number of regional or multilateral forums. It is also possible to envision a different grouping within the existing global framework, something perhaps transcending the present division between developed and developing countries. If we count the EU as one party – just 12 parties account for nearly 80 percent of global CO2 emissions. In the long run, some type of global approach is not only preferred but necessary. The question is whether at this stage something less than fully global might better deliver the political will that is needed.
I offer these thoughts not as hard principles or prescriptions, but rather as broad points worth considering as we chart a course forward, a course that will take us beyond 2012, and beyond Kyoto. That there is today an international effort against climate change is thanks in large measure to the political will shown here in Brussels, and across Europe. As we across the Atlantic begin coming to terms with the climate issue, we must all think anew about the best ways to move the international effort forward. We will need to be open, and we will need to be creative, if we are to forge a common approach equal to the challenge.