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Climate Change: A Challenge to the Conventional Wisdom

Climate Change: A Challenge to the Conventional Wisdom

Eileen Claussen
Executive Director, Pew Center on Global Climate Change

World Aviation Conference
San Francisco, California

October 20, 1999

Good morning. I had a lovely flight to San Francisco yesterday. So let me begin by thanking you for making that possible. And we can wait until my presentation is over to see whether you think I deserve a smooth flight back. I must tell you that I accepted your very kind invitation to speak at the World Aviation Congress because I thought it would be a perfect place to challenge two pieces of what could be called "the conventional wisdom:" the first is that industry always opposes responding to environmental problems by initially doubting the scientific basis of the problem, then arguing that responding to the problem is too costly, and finally, arguing for a delayed timetable for the response; the second is that leadership on public policy issues must always come from government.

But before I challenge these views, it may be useful for me to provide a little background on the global climate change issue. I believe this issue represents one of the most significant challenges of the next century: it's a science issue and an environmental issue; a global issue and a national issue; a technology issue and a fairness issue; a business issue and an economics issue. It is not likely to go away in the short term no matter what we do. And, if we don't do anything, it won't go away in the long term either. So let me give you a brief sketch of what we know and where we stand, and then spend a little time talking about practical solutions, the Pew Center on Global Climate Change, and the aviation industry. In so doing, I hope that I can convince you that the best response to the conventional wisdom is real information, analysis, assessment, and action, and that some in industry, and in the aviation industry in particular, are clearly up to the task. My job, I think, is to inspire all of you to take on this challenge and help provide the leadership that we need and that is so sorely lacking.

But to begin at the beginning, let's look at the science. The earth's atmosphere is made up mainly of oxygen and nitrogen, but it also contains other naturally occurring gases, including water vapor, carbon dioxide, methane and nitrous oxide, that are responsible for a natural greenhouse effect. Without this natural greenhouse effect, the earth would be about 34 degrees colder than it now is. But atmospheric concentrations of these gases have been rising, particularly since the late 1800's, as has the average surface temperature of the globe, which has warmed by 0.6 degrees centigrade. In their analyses of these and other data, most of the world's best scientists are agreed on two things: that the earth will continue to warm (we estimate 1.3 to 4.0 degrees centigrade by 2100), and that human-induced greenhouse gases will be at least partly responsible for that warming. I don't want to over simplify the consensus that exists here. There remain significant uncertainties (like how the formation and dissipation of clouds affect the climate), and there remain skeptical scientists. But the greatest uncertainties surround not whether there is, or will be, a change in the climate, but rather what the impacts of that change will be, where they will be felt, and when.

What do we know about the impacts of climate change? If the amount of warming over the next century is as currently predicted, it is quite clear that there will be a rise in sea level, estimated to be between 17 and 99 centimeters. For the United States, the rate of warming is expected to be noticeably faster than the global mean rate, particularly across the northern Great Plains and the northeastern states. These temperature changes are expected to increase winter precipitation in northern latitudes, increase the frequency of extremely hot days, and decrease the frequency of frosts. Changes in the incidence of daily precipitation extremes are highly uncertain, although there is some evidence suggesting an increase in the frequency of wet extremes. The effects of these temperature and precipitation change on agriculture, water resources, coastal resources, health and ecosystems are expected to be regionally significant. For example, while climate change is not expected to threaten the ability of the United States as a whole to feed itself, regional patterns of agricultural production are likely to change, and many crops will have to be grown in more northerly latitudes. Similarly, we can expect climate change to have impacts on our nation's water supply because of increased flooding in northern latitudes and snow-melt driven basins. At the same time, the frequency and severity of dry spells and droughts is also predicted to increase, although at different times and in different regions. Sea-level rise, with concurrent increases in storm frequency and/or intensity, is likely to affect some of our coastal areas, particularly the Atlantic coast, the Louisiana delta and the San Francisco basin. But my objective here is not to give you a laundry list of possible or probable environmental effects, but simply to suggest that we know enough about the science and the environmental impacts of climate change to begin taking steps to address its consequences. We all live in worlds where we analyze risks, make decisions, and take appropriate actions based on our risk assessments. This issue is clearly at a stage where we must move beyond denial and debate, and focus ourselves on rational action.

Rational action. It is probably a concept that we can all find appealing. But it seems to me that it is easier to say it than to take it, particularly when we are dealing with an issue like this where polarization of views is the norm, and coherent discourse and problem solving are rare. As some of you may imagine, and others of you may know first hand, this is a highly political issue, and I mean "big P" political: Republicans v. Democrats; Europe v. the United States; developed countries v. developing countries. It is also a "small p" political issue: scientists associated with the Intergovernmental Panel on Climate Change v. skeptical scientists; industry winners v. industry losers; the Kyoto Protocol as the solution to the climate change issue v. Kyoto as an agreement that will never enter into force. So perhaps I can be most helpful by giving you a little context, and then moving into a discussion of some practical paths forward.

In thinking about the climate change issue, it is both obvious and easy to suggest that climate change is a global problem that demands a global solution. And, of course, it is true. Greenhouse gases emitted in Delhi can affect the climate in Dallas, just as emissions in Chicago can affect the climate in Calcutta. On the other hand, global solutions cannot be found unless individual nations, businesses, and even individuals search for, and implement their own solutions. We have a broad global framework negotiated in 1992 and now ratified by 179 countries, including the United States, that establishes an overall goal of preventing dangerous anthropogenic interference with the climate system, and requires all countries to take policies and measures to reduce their greenhouse gas emissions, consistent with their circumstances and abilities. We also have the Kyoto Protocol, negotiated in December of 1997, and now signed by 84 countries, including the United States, and ratified by 15. This protocol establishes legally binding emission reduction targets for developed countries (7% below 1990 emission levels for the United States by 2012). It also allows for emissions trading and joint implementation among countries with targets, as well as use of a Clean Development Mechanism for project-based emission reductions between developed and developing countries. But perhaps the best way to look at the Kyoto Protocol is to look at what it does not contain, and what remains to be done.

It does not, for example, include any emission reductions or limitations beyond a first step for developed countries only. This is an obvious problem, since successfully addressing the matter requires more than one-step as well as participation from countries beyond those in the developed world. Yet the Protocol does not come to grips with what future steps might look like, for either developed or developing countries, or even what the framework for making decisions on these steps might be. What are the factors that should be considered in determining appropriate obligations for different countries or groups of countries to reduce or limit their emissions? To what extent should responsibility for the problem, past, present and future be a factor? Should it be tempered by a country's ability to pay for mitigation activities? Should emission rights be granted to countries based on historic emission levels, or should they be distributed on a per capita emissions basis? And what kind of system is effective, practical and fair?

The protocol does contain a framework for achieving emission reductions where they will be most cost-effective by including provisions on emissions trading, joint implementation, and the establishment of a Clean Development Mechanism, but it provides no specifics on how these mechanisms might work. It includes the possibility of sequestering carbon in forests and soils, but contains no specifics on how carbon that is sequestered should be included in a nation's total emissions budget. And it does not contain any provisions related to compliance, another issue that requires a serious and thoughtful response.

But as a practical matter, it seems to me that a framework for international action to deal with the climate change issue will evolve over the next decade no matter what current national and global politics suggest about the Kyoto protocol. And if you take this view of the inevitability of global action, and couple it with the view that the science is compelling enough to begin taking serious steps to address it, then the emphasis shifts to action frameworks and actions closer to home: national actions, company actions, and individual actions.

So where do we stand domestically? Unfortunately, the complications at home are as daunting as the complications abroad. While there is concern, interest, and a willingness to act on the part of the general public, some in the business community, and some in government, particularly at the State and local levels, the issue is now enmeshed in difficult and frustrating partisan politics. While the science remains somewhat controversial (although far less than even one year ago), it is the Kyoto Protocol that has raised the tensions dramatically. It is rare, in Washington, to be able to get past the question of whether to support Kyoto or declare it dead. As a practical matter, this has translated into arguments on the size and scope of the climate change budget, debates over whether Federal employees should be allowed to talk about the Kyoto Protocol, and attempts to use economic analysis to prove either that Kyoto implementation would ruin the economy or that it would be virtually free. What it has not translated into is the further development and implementation of programs that would change the expected trajectory of greenhouse gas emissions, or the passage of legislation that would either protect the 1990 baseline for companies that have voluntarily reduced their emissions over the past decade or provide incentives for more companies to move forward with emission reduction efforts.

I feel compelled to add here that the situation in the United States is unique among the countries of the world. The United Kingdom is now in the process of planning a domestic emissions trading experiment. The Danish government has already secured legislative authority to implement a trading program, and other emissions trading programs are under development in Norway and Sweden. The Germans are implementing a modest tax program. The Netherlands has a more traditional program full of different policies and measures that has been approved by their parliament. Whether these programs will work, or how well they will work, remains uncertain. But they do reflect serious attempts to experiment and move forward, to take the risk necessary to determine what approaches will ultimately be successful. There is even movement in the less developed world: privatization of the electricity sector is moving forward in India, where competition is expected to increase the use of natural gas and lower greenhouse gas emissions; Korea is beginning to plan for opening up their power sector to competition, again with a projected increase in the use of natural gas; and China, which has dramatically lowered its energy consumption per unit of output over the past decade, is on a path to continue making significant energy intensity improvements over the next decade.

Can more be done to deal with this problem than is apparent from the current level of activity? Of course. But if the U.S. government, or global governments more broadly, are either not able to come to grips with the more challenging issues that must be addressed, or unwilling to exercise real leadership, who will? I believe the answer is obvious and already in evidence, and I hope you will forgive me for the following advertisement. When the Pew Center on Global Climate Change was formed in May of 1998, there was little that was pushing 13 companies (the Washington Post, in an editorial, called them "a few brave firms") to publicly declare that

1 - they accept the views of most scientists that enough is known about climate change for them to take actions to address its consequences;

2 - that businesses can and should take concrete steps now in the U.S. and abroad to assess their opportunities for emission reductions; establish and meet emission reduction objectives; and invest in new, more efficient products, practices and technologies; 

3 - that the Kyoto agreement represents a first step in the international process but that more must be done to implement the market-based mechanisms that were adopted in principle in Kyoto, and to more fully involve the rest of the world in the solution;

4 - and that we can make significant progress in addressing climate change and sustaining economic growth in the United States by adopting reasonable policies, programs and transition strategies.

Three of these companies are leaders in your industry as well: Boeing, Lockheed Martin and United Technologies. And there was little pushing the additional 8 companies that have since affiliated with the Pew Center. And there was little pushing those companies that have already set reduction targets and established programs to implement those targets, including DuPont, BP Amoco, Shell and United Technologies. And if this isn't leadership and a serious challenge to the conventional wisdom, I'd like to know what is.

But the job is not over yet. In fact, it is barely beginning. This is not a problem that can be solved in one day or one decade. It is a long-term issue that will require a sustained and serious effort over a long period of time. And there is room for virtually everyone to play a role in developing solutions. In fact, without participation from everyone -- countries, industry sectors, companies, and individuals -- it is not clear that we can mount a serious response to the problem. And this brings me to the aviation community.

I recognize up front that you have a problem that inspires jealousy in most other industries: you have had, and are projected to continue to have, a strong annual growth rate. And with this growth rate comes a problem, for while you have been successful in reducing emissions per unit of output, continued growth will increase your total greenhouse gas contributions. Even at current levels, the aviation industry accounts for roughly 2 percent of total global carbon dioxide emissions. I also realize that this sounds like a relatively small contribution. But unfortunately most sectors make small contributions, and aviation outpaces chemicals, iron and steel, cement and aluminum. You could even compare yourselves to many countries. The global aviation sector emitted more carbon dioxide than China, Germany, France or the United Kingdom.

But I didn't come here to depress you. It seems to me that all of the players on this issue are different from one another. Their contributions to the problem differ; their opportunities for emission reductions differ; and the costs that these reductions would entail differ. There is no "one size fits all" solution, and while special pleadings have never appealed to me as ways to do business, there is much to be said for flexible systems that allow for these key differences to be addressed and resolved. So let me be specific in suggesting that you focus on three topics: governance, technology and flexibility.

The aviation industry is already in a unique position with respect to governance. Article 2.2 of the Kyoto Protocol grants the industry special recognition, and establishes ICAO, the International Civil Aviation Organization, as the body responsible for regulating international aircraft emissions. As someone who has worked for many years with various Convention Secretariats and their Conferences of the Parties, I can only assure you that you are very lucky to be dealing with an organization that knows your possibilities and your constraints. But what is important is that you not squander your good fortune; your credibility on environmental issues is at stake here. It should be possible to develop timely and effective solutions that allow you to grow your business in sustainable ways. Find them, before others find paths that are less in your interest.

The second topic that demands some attention is that of innovation and technological change. Your industry has been a leader in the development and diffusion of new, more advanced technologies for decades. As you make investments in research and development, and as you consider priority areas upon which to focus your efforts, I would urge you not to forget that growth in the 21st century will almost certainly have to be environmentally sustainable growth. It is no accident that several of the largest global oil companies (and I am referring here to Shell and BP Amoco) have begun to think of themselves as energy companies, and have begun to significantly expand their investments in less traditional, more environmentally friendly energy sources. I didn't come here to tell you how to spend your R&D dollars. But I would like to suggest that you think carefully about what may be required over the next several decades to deal with the issue of global climate change, and that you factor this picture of the future into your longer term planning. You should be the industry that is first at the starting gate, and first at the finish line.

And finally, I urge you to think constructively about the market mechanisms that are contained in the Kyoto Protocol. These mechanisms essentially allow firms and nations to achieve the lowest cost emission reductions regardless of where they occur. And by doing this, the mechanisms provide economic incentives for innovation and lowered compliance costs. The best known example we have of how emissions trading works can be found in the acid rain trading program under Title IV of the Clean Air Act, a program which coincidentally I managed while at the Environmental Protection Agency. That program was designed to be scrupulous in its accounting system, and highly flexible and open in its trading system, a balance that has worked well to ensure that emissions are lowered and costs are as low as possible. It seems to me that the "Kyoto mechanisms," emissions trading, joint implementation and the Clean Development Mechanism have a significant potential for use by the aviation sector, and I know that ICAO is exploring their use along with other policy choices. You should carefully consider whether they would work for you, and, if you become convinced (as I am) that they could be of value, work with governments to ensure that the rules that are used to implement these provisions are simple, straightforward and result in real emission reductions.

In closing, I would like to briefly come back to the conventional wisdom. Yesterday's Wall Street Journal contained several articles on climate change. The lead story was titled "Inside the Race to Profit from Global Warming: Big Business Produces some Unexpected Converts." I call your attention to these articles not because I am quoted in them (alas, I am, and my quotes are not always diplomatic), but because I think they do point directly to the issue of leadership. If the marketplace has triumphed, at least temporarily, over government, as Daniel Yergin contends in his book "The Commanding Heights," then the marketplace will also have to stand ready to be judged by its commitment and contribution to environmentally sound solutions. The aviation industry is viewed as clean and green: technological giants in a world where technology is king. I urge you to live up to your reputation, exercise leadership, make a constructive contribution to the solution, and turn the conventional wisdom on its head.

Thank you.

Press Release: Study Finds Climate Change Will Impact U.S. Water Supply

For Immediate Release:
September 27, 1999

Contact: Kelly Sullivan/Heather Fass
             202-289-5900

Study Finds Climate Change Will Impact U.S. Water Supply: Both Quantity and Quality of Water Supply Could Be Affected

WASHINGTON, D.C. -- A new study released today by the Pew Center on Global Climate Change concludes that climate change is likely to impact both the availability and quality of the U.S. water supply.

The study, Water Resources and Global Climate Change, finds that as climate change alters precipitation, evapotranspiration and runoff in the United States, these changes are likely to affect the magnitude, frequency, and costs of extreme weather events, as well as our nation's water supply.

The report, one in a series by the Pew Center examining the impacts of climate change on the environment, was researched and written by Dr. Kenneth Frederick of Resources for the Future, and Dr. Peter Gleick of Pacific Institute for Studies in Development, Environment & Security.

"Recent floods and droughts have reminded everyone that the climate and our nation's water supply are inextricably linked," said Eileen Claussen, Executive Director, Pew Center on Global Climate Change. "This study shows that as the climate changes, so will its impact on our water supply."

While some specifics are difficult to predict, several consistent impacts can be identified. For example, in mountainous watersheds, higher temperatures will increase the ratio of rain to snow, accelerate the rate of spring snowmelt, and shorten the overall snowfall season, leading to more rapid, earlier, and greater spring runoff.

In already arid regions, there is likely to be greater flux in the water supply, while higher temperatures fuel an increased demand for water. In other areas, new instances of flooding and droughts also will impact the availability of water.

"An adequate - and safe - water supply is an essential component to our health, environment, communities and economy," said Claussen. "These new findings demonstrate that climate change will not only impact the quantity of our water supply, but the quality as well."

While higher water flows could improve water quality in some streams, the increased runoff of pollutants and saltwater intrusion could accompany climate change induced sea-level rise.

The study notes that there are steps that can be taken today to begin preparing for changes in our water supply. In addition to reviewing options for adapting and expanding the existing infrastructure, including reservoirs and dams, there are opportunities to develop water marketing and trading strategies and improve the management of water systems.

"The findings from this report show without question that there are steps we can - and should - be taking today to prepare our water supply for the consequences of climate change," said Claussen. "But the most important step of all is to reduce the greenhouse gas emissions that cause climate change."

In addition to being presented to Members of Congress and their staff at a briefing tomorrow on Capitol Hill, the findings from the study also are highlighted in a print advertisement sponsored by the Pew Center. The advertisement is scheduled to run on September 29th in The Washington Post, September 30th in Roll Call, and October 2nd in National Journal.

The Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the nation's largest philanthropies and an influential voice in efforts to improve the quality of America's environment. The Pew Center supports businesses in developing marketplace solutions to reduce greenhouse gases, produces analytical reports on the science, economics and policies related to climate change, launches public education efforts, and promotes better understanding of market mechanisms globally. Eileen Claussen, former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs, is the executive director of the Pew Center.

The Pew Center includes the Business Environmental Leadership Council, which is composed of 21 major, largely Fortune 500 corporations all working with the Pew Center to address issues related to climate change. The companies do not contribute financially to the Pew Center - it is solely supported by contributions from charitable foundations.

Press Release: New Study Details Effects of Climate Change On U.S. Agriculture

For Immediate Release:
February 10, 1999

Contact: Shannon Hunt / Kelly Sullivan
             (202) 289-5900

New Study Details Effects of Climate Change On U.S. Agriculture

Projected Regional Impacts on Agriculture Outlined: New Report is First in Series Examining Environmental Impacts of Climate Change

WASHINGTON, D.C. — Climate change has the potential to affect livestock and crops, local agricultural economies and crop production trends according to a new report by the Pew Center on Global Climate Change, which examines the effects of climate change on agriculture. The report finds that while climate change is not expected to threaten the ability of the U.S. to produce enough food to feed itself through the next century, some U.S. agricultural regions, particularly in the north, are expected to benefit, while others, primarily in the south, could face adverse impacts.

The report, released today at a press conference on Capitol Hill, notes that the resiliency and adaptability of the U.S. agricultural sector has made it one of the country's most productive industries and gives the sector the ability to adapt to the changes associated with climate change. However, the report also finds that there remains a potential for negative effects, and particular regions, especially those in the south, will face greater obstacles in adapting to the challenges posed by climate change.

"Anyone with a stake in agriculture should be interested in the findings of this report, which shows that the farming industry we know today will not be the same in the future under the effects of climate change," said Eileen Claussen, Pew Center Executive Director.

At Wednesday's press conference, Agriculture Committee Chairman Richard Lugar (R-IN) and Senator Bob Kerrey (D-NE) both issued statements supporting the Pew Center's efforts to inform American agricultural producers about the potential impacts of climate change.

According to the report, climate change could cause grain yields to fall significantly in southern states, while in the north, longer growing seasons could increase yields of grains such as wheat. Changes in grain production and foraging regions could also cause shifts in the locations of livestock production. Uncertainty in the models does not allow precision in identifying localized effects.

The study finds that in order to develop the most accurate and credible assessment of the possible impacts of climate change, it is important to consider adaptation and human response, as well as to continue to develop improved climate change forecasts. But, given the potential impacts, farmers and the agricultural community must consider new strategies in the face of uncertainty.

The report states that the emerging consensus from modeling studies is that the net effects on U.S. agriculture, with a doubling of carbon dioxide in the atmosphere, may be small. But, these models may understate long-range impacts if the rate or magnitude of greenhouse gas emissions exceed projected levels. For example, extreme events - such as storms, droughts and early and late frosts caused by climate change - also could play a role in determining the ultimate impact of climate change on agriculture.

Additionally, secondary impacts of climate change, such as the potential for higher ozone levels, impacts on water resources and pest populations, contribute to the uncertainty and pose additional challenges not only to individual producers, but also larger agricultural economies.

The value of U.S. agricultural commodities exceeds $165 billion at the farm level and over $500 billion after processing and marketing. "The role of the U.S. agricultural sector is too important for us to ignore these findings," said Claussen. "The agricultural community can adapt to climate change, but adaptation takes time and resources, and with uncertainties related to the timing and magnitude of temperature changes, not all opportunities for adaptation are likely to be realized."

This report is the first in a series of environmental impact reports slated to be released by the Pew Center this year. Other reports in this series will assess what is known about the impact of climate change on weather and includes analyses of its impact on water resources, coastal areas, human health, ecosystems, and forests.

A copy of the report, "A Review of Impacts to U.S. Agricultural Resources," is available on the Pew Center web site at www.c2es.org.

The Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the nation's largest philanthropies and an influential voice in efforts to improve the quality of America's environment. The Pew Center is conducting studies, launching public education efforts, promoting climate change solutions globally and working with businesses to develop marketplace solutions to reduce greenhouse gases. The Pew Center is led by Eileen Claussen the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

The Global and the Local: Blending Actions to Address Climate Change

The Global and the Local: Blending Actions to Address Climate Change

Speech by Eileen Claussen, Executive Director
The Pew Center on Global Climate Change

August 20, 1998

Responding to the challenge of climate change is, as we say at the Pew Center on Global Climate Change, serious business. Even talking about it in the current political environment raises sensitive and difficult issues. On the one hand, it is a global problem that demands a global solution. Emissions from Beijing can affect the climate in Boston, just as emissions from Chicago can affect the climate in Calcutta. On the other hand, global solutions cannot be found unless individual nations begin the search for their own solutions. These include working with the business community to make investments in more efficient products, practices and technologies, and taking steps to limit and reduce greenhouse gas emissions. Some argue that no single nation should embark on a directed course of action until there is a global framework with worldwide commitment. Others argue that a global response is, in effect, just a series of national responses, and that it is incumbent upon individual nations to begin taking steps to reduce their emissions now. The reality is that we will have to go down both paths simultaneously. We must take steps to control emissions at home at the same time as we design the systems that will be required for all nations to participate effectively in responding to this issue. If we fail to move forward on both paths -- the global and the local -- our response to climate change will almost certainly be a failure.

The International Situation

Let us look first at the international situation. Much has been said and written about what was accomplished, or not accomplished, at Kyoto. The treaty binds developed countries to emissions reductions that would have to be achieved between 2008 and 2012. The targets range from 8 percent below 1990 emission levels (the European Union) to 10 percent above 1990 levels (Iceland). The obligation agreed to by the United States was a reduction of 7 percent below 1990 levels. The parties also agreed to (1) a framework for emissions trading and joint implementation among developed countries; (2) language creating a Clean Development Mechanism, that would allow for joint sustainable development projects between industrialized and developing countries; and (3) a sprinkling of contradictory and incomplete language dealing with carbon sequestration. Binding commitments for developing countries; agreement on a compliance and enforcement regime; and specific definitions or guidelines for the operation of either the trading system or the Clean Development Mechanism were left for future meetings.

But to understand fully the global challenges that we face, we need to focus on the international politics leading up to the Kyoto agreement and how they manifested themselves during Kyoto, and again at the most recent international meeting in Bonn. Politics are also likely to be the drivers of the Conference of the Parties to the Framework Convention on Climate Change scheduled in Buenos Aires in November. If history is a guide, it will continue to play a significant role in subsequent negotiating sessions as well.

We should begin with the position of the United States. Beginning in 1996, the United States began designing a broad global framework for addressing the climate change issue. That framework, forwarded internationally in January of 1997, included a binding target for developed countries, emissions trading among developed countries, joint implementation possibilities between developed and developing countries, and three separate provisions related to the increased participation of developing countries. But the United States did not publicly propose a specific binding target until October 1997 (two months before Kyoto), when the President announced the U.S. position in a speech at the National Geographic Society. Because of the delay in defining a target, the U.S. proposal was coolly received, a reception that was exacerbated by both the European focus on ONLY the binding target, and the developing country view that the United States was not taking the issue seriously but was simply interested in limiting the energy use and development of other countries.

These views were reinforced by the Kyoto Conference itself. Most of the time in Kyoto was spent in prolonged and intense debate between the European Union, the United States and Japan. The subject? The magnitude of the binding reduction. Of course, it was obvious to all participants that the magnitude of the reduction would be directly related to agreement on trading and joint implementation. And that was, in fact, how the agreement was reached. The United States agreed to reductions that were greater than originally proposed by the President, and, in return, the language on what have been called the "flexibility mechanisms" was also included. Make no mistake as you think about how this bargain was struck: negotiations were held not only between Heads of Delegation in Kyoto, but also between Heads of State from their capitols. In fact, the discussions were so intense, that further development of language on the flexibility mechanisms could not be concluded by the time the Conference ended.

What about the role of the developing countries? A key part of the U.S. position was that developing countries be more active partners in reducing emissions. The provisions of the U.S. text related to developing countries were central to U.S. diplomatic efforts leading up to Kyoto. But, with the exception of Brazil, which turned the joint implementation concept into the Clean Development Mechanism, there was almost no exploration of ideas and language with key developing country greenhouse gas emitters like China and India. The result was that those countries, who were skeptical of U.S. intentions at the beginning of the Conference, and who had no interest in accepting obligations until it was clear that industrialized countries, particularly the United States, both show commitment to a reduction scheme and actually make significant emission reductions, became more adamantly opposed to increased involvement in the Kyoto Protocol. The public debates at Kyoto on the subject of developing country participation were therefore largely symbolic. And spokespersons for a number of developing countries even attempted to scuttle the emissions trading language at the end of the Conference, calling it immoral and unfair.

The reality is that the views of the developing world do not appear to have shifted since the Kyoto Conference. Yes, there are several countries, particularly in Latin America, that continue to be positive about both their future role and also about the need for global solutions to the climate change issue. And South Korea has indicated to Japan that is willing to voluntarily reduce its emissions beginning in 2018. But the vast majority have adopted a wait and see attitude with respect to their own obligations -- or perhaps we should phrase it "a wait and see if the developed countries begin taking steps to meet the obligations they agreed to in Kyoto." This posture is likely to dominate any discussions on particular commitments from the developing world, and is also likely to influence the negotiations on the Clean Development Mechanism, where key developing countries are interested in some degree of control over the projects that are accepted so that they can be assured that they are truly development projects, not just projects that can be used for credit by the developed world. Emissions trading and carbon sequestration, of course, still remain suspect, and it will take substantial discussion and negotiation to reach agreement on how to operationalize the Kyoto language.

At the core of the developing country view is the notion of fairness. Is it fair, many of them ask, for the developing countries to be asked to take on serious obligations while their total and per capita emissions are low compared to the developed world? Is it fair, some ask, for the developing countries with far lower GDP and per capita GDP to be asked to take on obligations to deal with a global problem caused thus far by the emissions from the developed world? Is it fair, others ask, for the United States, with the highest levels of both GDP AND emissions, to insist on developing country participation when the United States itself seems unwilling to make substantial emission reductions? Until these fundamental issues of fairness are addressed internationally, it is unlikely that we will see significant movement on the part of the developing countries.

The Domestic Situation

Unfortuantely, the complications here at home are equally daunting. While there is concern, interest and a willingness to act on the part of the general public, some in the business community, and some in government at the Federal, State and local levels, the issue is now enmeshed in difficult partisan politics. And while climate change itself remains controversial, it is Kyoto that has raised the tension levels dramatically. In fact, looking back at the last two years, it is clear that those in industry most opposed to dealing with the climate change issue (in other words, those who view themselves as losers under a climate change response regime) have thoroughly worked the political system to (1) cast doubt on the science; and (2) emphasize the possible negative economic impacts of the Kyoto Protocol, basing their analysis on unrealistic assumptions and unworkable policies. At the same time, many in the environmental community have unrealistically (1) advocated large reductions in more immediate time frames; and (2) concentrated on the availability of technologies that, they believe, could effect compliance with the Kyoto regime at virtually no cost. This clash of the polar positions between some of the industry and some of the environmental community has dominated the debate, catalyzing political grandstanding, and essentially removing the issue from the reasonable and pragmatic consensus-building center that we need if we are to move forward and successfully respond to climate change.

What has this meant for real emission reductions on the part of the United States? We need to begin with a look at our historic climate change obligations and how we have responded to them. First, the United States is a party to the Framework Convention on Climate Change, and, therefore, is obligated to take policies and measures to reduce emissions of greenhouse gases. It is also obligated to aim toward reducing emissions to 1990 levels by the year 2000. To meet these commitments, the United States has partnered with industry on a series of voluntary programs. Many of these programs were initiated during the Bush Administration, and were expanded upon by the Clinton Administration. These efforts, while significant, are not likely to result in the United States meeting 1990 levels by 2000. Indeed, the United States acknowledged in the 1998 Annual Energy Outlook that we would likely be 17 percent above 1990 levels by the year 2000.

Since Kyoto, most of the voluntary programs have continued, but they have neither been expanded nor intensified. Before the Kyoto Conference, the President outlined a program that the Administration would seek to implement post-Kyoto. This program included a $6.3 billion tax and budget package proposed in January of this year, that now appears dead on Capitol Hill; a modest effort that has as yet yielded no results to insure that electricity restructuring does not increase carbon dioxide emissions; and a somewhat more significant effort to consult with industry to develop voluntary early reduction objectives. This latter effort now also appears unlikely to come to fruition, in part because of the difficult political atmosphere, and in part because no one has come to grips with the complex but essential issue of how companies that make serious reductions will have those reductions credited toward future obligations.

Moving Forward

If we start with the premise that climate change is a serious issue that we must take seriously (and that is certainly the starting point for the Pew Center and the businesses that form its Environmental Leadership Council), we have an enormous task before us. Not only do we have to sort through the domestic and international politics that surround climate change, but we must also move forward to develop the technologies that will be necessary in the 21st century, see that those new technologies make their way through the global economy, and develop the governmental and non governmental systems that will provide the right combination of incentives to make these changes a reality. Obviously, this is no easy task.

Perhaps what we need is a modest beginning. First, we must do our best to de-politicize this issue in Washington, and work to agree on the basic agenda that will be necessary to achieve real results. There is no reason why we cannot work through a program to credit the voluntary early emission reductions of companies that want to get started now. Such an effort would be climate friendly and friendly to those forward looking companies that are committed to dealing positively with the climate change issue. It would be a way to energize U.S. industry, achieve and show progress, and reward those who make real contributions.

Second, there is no reason why we cannot sit down and design an incentive package so that individuals and individual companies begin to make investments that will result in reduced greenhouse gas emissions now and in the future. This is an issue that will be with us for a long time; the Kyoto targets alone will not allow us to stabilize greenhouse gas concentrations at less than dangerous levels. And what will count for the future is the technology that we develop over the coming decades. Quite simply, the earlier and faster we move, the greater our chances of being globally competitive with new, climate friendly technologies.

Third, there is no reason why we cannot sit down with the Federal government, State governments and local governments to begin assessing the roles for each in moving the United States to a lower emissions future. This is a problem of enormous scope, and it will take a concerted effort on the part of everyone to design a framework that is environmentally and economically responsive. We need to work together, in partnership, to achieve our objectives.

Fourth, there is no reason why we cannot begin to analyze and discuss how to design a domestic program that will achieve emission reductions over the longer term. We know there are policies and programs that can lower the costs; we know there are likely to be sectors of the economy that will be more impacted than others; and we know that there will be effects on American workers. Surely we can begin to have discussions about how to achieve our environmental goals in ways that minimize the costs and impacts, and treat those who will be affected in ways that are fair and equitable.

And fifth, there is no reason why we cannot agree on how to address this issue internationally, so that our expectations are grounded in reality, and our strategies are based not only on what is cost-effective, but also on what is fair. If we take steps at home, our ability to ask other nations to take steps will be more credible. If we are sensitive to the legitimate concerns of others, we are more likely to be able to lead in the design of an acceptable international system.

It may be hard, in August of 1998, to imagine a day when all sectors of society -- the public, the private and the nongovernmental -- are engaged in working on meaningful responses to the climate change issue. But I am not sure I could have imagined 6 months ago that the 17 corporate leaders represented in the Pew Center's Business Environment Leadership Council would step forward on this issue and agree to voluntarily begin responding to the challenges presented by global climate change. And I certainly didn't know 6 months ago of the efforts of so many of the States to inventory their emissions and develop action plans to reduce emissions. Maybe we can move beyond the rhetoric, take this issue seriously, and work together to develop solutions. Maybe we can face and address global climate change while sustaining a growing economy.

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