U.S. States & Regions
States and regions across the country are adopting climate policies, including the development of regional greenhouse gas reduction markets, the creation of state and local climate action and adaptation plans, and increasing renewable energy generation. Read More
General Motors, DaimlerChrysler, and Isuzu announced August 12, 2003, that they had reached a settlement with the California Air Resources Board (ARB) regarding California's 1990 zero emission vehicle legislation. The companies agreed to drop their lawsuit in exchange for modifications made to the rule. The adapted rule gives companies two choices for meeting their ZEV requirements. The first option is to sell a mix of zero emission vehicles, hybrid-electric vehicles, and extremely clean gasoline-powered vehicles, adding up to ten percent of total vehicles sales. Instead of fulfilling the zero-emission portion of that mix, automakers may choose to produce a certain number of fuel cell vehicles, beginning with a sales-weighted market share of 250 fuel cell vehicles in 2008 and rising gradually to reach 50,000 vehicles in 2015.
Governors from ten Northeast states announced July 24, 2003, that they would join together in a regional strategy to reduce carbon dioxide emissions from power plants. New York's Governor Pataki sent out letters in April to the governors from ten other Northeast states requesting their participation in the development of a regional cap-and-trade program. The governors from Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, Pennsylvania, Delaware, and New Jersey responded with interest in working with New York. Maryland declined to participate now, but may join discussions later.
On June 26, 2003, Connecticut Governor John Rowland signed legislation amending the state's Renewable Portfolio Standard (RPS). Connecticut's RPS defines two categories of renewable energy, Class I and Class II, and sets separate requirements for both classes. Under the amended law, Class I includes wind, solar PV, fuel cells, methane gas from landfills, ocean thermal power, wave or tidal power, and some hydropower and biomass. Hydropower facilities that began operation before July 1, 2003 or have a capacity of 5 MW or more are no longer eligible for Class I requirements, which are set at 1 percent in 2004, rising to 7 percent by 2010. Class II includes municipal solid waste facilities, along with certain hydropower and biomass facilities that do not qualify under Class I. Class II requirements are set at 3 percent from 2004 through 2010. Under the previous RPS, renewable requirements applied only to competitive electric suppliers; the new RPS extends the requirements to utilities, which serve the majority of Connecticut's customers.
North Carolina's Division of Air Quality (DAQ) within the Department of Environment and Natural Resources has released the first of a series of three reports assessing the impact of North Carolina's Clean Smokestack's Act (CSA) on carbon dioxide emissions. The report is in fulfillment of requirements of the Clean Smokestacks Act, passed and signed by Governor Mike Easley in June of 2002. The Act is focused primarily on putting stringent controls for SO2 and NOx on the state's 14 major coal-fired power plants. However, Sections 12 and 13 of this Act require the DAQ to study the effects of these controls on CO2 and mercury and what the added costs and benefits would be to further reduce these pollutants from additional controls on coal-fired power plants and other stationary sources. The reports are required each September for 2003, 2004 and 2005, for each pollutant. The current report, primarily pulled from existing references and reports, makes substantial observations and conclusions, but no recommendations at this time. The report presents a policy background on the issue, details emissions from North Carolina sources, and lists some options for reducing carbon emissions and increasing carbon sequestration.
Back to Main FAQs Page
What can the average individual do to help combat climate change? Can it be an individual effort, or is this really the responsibility of corporations and governments to resolve?
- Participation by individuals is key to ultimately curbing global climate change.
- The following are examples of effective, yet simple activities: reducing energy use at home by purchasing energy efficient home appliances; planting trees to absorb carbon from the atmosphere; walking or taking public transportation instead of driving; making smart consumer choices by purchasing environmentally sound products and energy-efficient vehicles; and practicing waste minimization, product reuse, and recycling.
How are we going to reduce carbon dioxide emissions with an increased consumer demand for power?
- First, not all GHG emissions are CO2 emissions, and not all CO2 emissions are from power use. So you can reduce GHG emissions in other sectors like agriculture, forestry, and waste management without even addressing power. In addition, expanding the production of renewable energy and improving energy efficiency are ways to meet consumer demands for power without increasing CO2 emissions.
What are states doing to address climate change?
- States have shown a great deal of interest in mitigating climate change. They have found that activities that reduce GHG emissions also have other benefits such as curbing pollution, reducing traffic, and generally improving the local quality of life.
- States have conducted GHG inventories and initiated state action plans that identify and implement policies to reduce GHG emissions.
- Other state initiative include providing loans and tax incentives to encourage energy efficiency, investing in carbon sequestration research and public transportation, establishing registries for businesses to report their GHG emissions reductions, and providing venues for trading emissions credits.
- For more information on state action, visit our database of state case studies or read our report.
Over the past several years, how much has the development of clean coal technology reduced greenhouse gas emissions in the US? Do you see a real potential for its use?
- Clean coal technology is a generic term for a set of technologies that reduce harmful emissions from coal burning. Some of these technologies reduce greenhouse gas emissions, but some only address other air pollutants, such as sulfur dioxide. Thus far clean coal technology has made a greater impact on these other pollutants, but there are promising technologies that would reduce GHG emissions from coal burning, or would capture and sequester CO2 emissions from coal burning. To the extent we continue to use coal, it is important to take advantage of these technologies.
What role, if any, can renewable energy play in CO2 reduction?
- Renewable energy plays a small role now, but it is expected to play an increasingly important role over time. Wind and biomass energy are already cost-competitive with other forms of electric generation in some instances. Great technological strides have been made recently in hydrogen-powered fuel cells. There is enormous potential for solar energy and hydrogen to power our homes and cars in the future.
- Several states have adopted renewable portfolio standards that require an increasing role for renewables as sources of electric power.
Because transportation accounts for a significant of greenhouse gas emissions internationally, how do you propose we reduce emissions in this sector? What do you think the technologies of the future may be?
- Some technologies that will reduce emissions are already here, such as hybrid-electric vehicles like the Toyota Prius.
- There have been exciting breakthroughs in hydrogen-powered fuel cells. Both fuel cells and biofuels are potential options for the future.
- In the United States, it is likely that alternative and replacement fuels along with vehicle efficiency improvements will be the focus of a transportation emission mitigation strategy, rather than reducing driving. However, policies such as better traffic management, better urban design, and promotion of telecommuting might achieve multiple benefits, including GHG emission reductions.
Report: Reducing Greenhouse Gas Emissions from U.S. Transportation
In Brief: Taking Climate Change into Account in U.S. Transportation
Can we really live without fossil fuels, and what are the alternatives?
- Yes, we can move away from fossil fuels, but not overnight. Our economy is currently dependent on fossil fuels, but it is not necessary that it remain dependent on them. Over time, with innovation, market incentives, and the right policies, we can transition to different fuels, different infrastructure, higher efficiency, and different technologies.
- We need to concentrate on the development of alternative energy sources such as wind energy and solar power. Technological innovation in energy efficiency is also important.
How will workers be affected as climate change policies are implemented? And how can the adverse impacts be reduced?
- While it is important to recognize that the costs of addressing climate change are likely to fall disproportionately on certain industries, communities, and workers, the design and implementation of effective government programs can greatly assist workers adversely affected by climate change policies.
- Programs may include substantial retraining and education for laid-off workers, advance notice of layoffs when possible, substantial income support for program participants, and maintenance of laid-off workers' health and pension benefits until they find suitable employment.
Report: Community Adjustment to Climate Change Policy
Report: Worker Transition: Global Climate Change
Greenhouse & Statehouse: The Evolving State Government Role in Climate Change
Prepared for the Pew Center on Global Climate Change
Barry G. Rabe, University of Michigan
The current level of state activity surrounding the issue of climate change is striking. Measures that have proven controversial at the federal level, such as renewable portfolio standards and mandatory reporting of greenhouse gas emissions, have been implemented at the state level, often with little dissent.
In this report, author Barry Rabe of the University of Michigan describes a diverse array of state initiatives to reduce greenhouse gas emissions. Based on case studies of nine states - Georgia, Massachusetts, Minnesota, Nebraska, New Jersey, North Carolina, Oregon, Texas, and Wisconsin - the report identifies the strengths as well as the limitations of these state-level initiatives, some of which could serve as prototypes for federal programs.
A number of themes emerged from the case studies. Foremost among these is that there are multiple drivers that influence states to reduce their greenhouse gas emissions, and states derive multiple benefits from doing so. New Jersey, for example, views climate change explicitly and comprehensively, and has integrated all sectors of the economy into programs to reduce greenhouse gas emissions. Conversely, Texas passed an ambitious renewable portfolio standard primarily out of a desire to ensure long-term energy security for its residents, to secure its position as an "energy state," and to take advantage of increasing opportunities in renewable energy.
Indeed, state climate change efforts illustrate that climate change can be a bipartisan issue, an economic development opportunity, and an opportunity for policy entrepreneurship. But state action is not a substitute for a comprehensive national or international approach. A number of factors limit the ability of states to address climate change, including the reluctance of some states to deal with the issue, constitutional limits to their engagement in international relations, limited funding, and potential inefficiencies if states address climate change in different, incompatible ways. Rather, state leadership is getting the United States started down the path of reducing greenhouse gas emissions and providing learning opportunities for policy-makers. We would do well to be mindful of their successes as we work toward federal and international programs, and actively involve states in their design and implementation.
The Center and the author wish to thank Tom Arrandale, Bill Becker of STAPPA-ALAPCO, John Dernbach of Widener Law School, David Terry of NASEO, Michael Winka, Athena Sarafides, Philip Mundo, Caroline Garber, Eric Mosher, Joanne Morin, Dana Runestad, Alex Belinky, Matthew Weinbaum, and John Shea for their comments on a previous draft of this report.
Most analysis of policy options to address global climate change has focused on national and international levels of governance. Even within the United States, most scholars and journalists have concentrated on federal government capacity to engage in international negotiations and formulate nation-wide policies. This emphasis has tended to overshadow a remarkably - and increasingly - active process of policy formulation evident in the American states. This report is intended to provide an overview of this aspect of American climate change policy, considering recent trends and highlighting a range of case studies that cut across traditional policy sectors.
States have been formulating climate change policy for more than a decade, although their efforts have expanded and intensified in the past several years. In some cases, states have considered climate change mitigation explicitly while in others it has been an incidental benefit. Reflective of the vast scope of activity that generates greenhouse gases, state policies have been enacted that reduce these emissions in such areas as promotion of renewable energy, air pollution control, agriculture and forestry, waste management, transportation, and energy development, among others. In almost all cases, there have been multiple drivers behind and multiple benefits from these state policies. In Texas, for example, the desire for energy independence, economic development, and air pollution control drove the state to promote renewable energy. Not all states have demonstrated interest in these initiatives and some legislatures have taken steps to prevent state agencies from pursuing any efforts that are designed to reduce greenhouse gases. Nonetheless, there has been a remarkable increase and diversification of state policies since the late 1990s, reflected in their current operation in every region of the country. Collectively, they constitute a diverse set of policy innovations rich with lessons for the next generation of American climate change policy.
Much of this report is devoted to an examination of leading examples of innovation in various sectors, from renewable energy efforts in Texas to a cross-cutting approach in New Jersey. Nine case studies are presented in particular depth, followed by supplemental cases where appropriate. These cases tend to vary markedly from one another in detail and yet are linked by common design characteristics. First, they tend to have been supported through broad, bipartisan coalitions that received significant support from diverse stakeholders. State climate change policies have been signed into law by Governors who are Democrats, Republicans, and Independents. Second, they regularly have viewed climate change mitigation as an economic development opportunity. State policies have been crafted to foster long-term economic well-being, which has contributed to their broad base of support. Third, they reflect abundant state-level opportunities for innovation and policy entrepreneurship, often involving state officials who build coalitions around a particular idea for new policy. Many of the most effective entrepreneurs are not particularly well known outside their respective states but have helped redefine climate change policy with their efforts.
When viewed as a collection of efforts, these initiatives outline possible elements of a long-term climate change strategy for the United States. Diffusion of innovation from one state to others is already occurring and clusters of contiguous states are beginning to consider cooperative efforts. Some of these policies may also serve as models that warrant emulation by the federal government in developing a more comprehensive strategy for the nation. This is entirely consistent with the long-standing tradition in American governance whereby states serve as laboratories for subsequent federal policy. In turn, the vigorous and creative nature of state innovation in this area suggests that any future federal policy initiatives on global climate change consider carefully the significant roles that state governments may be able to play in achieving long-term reduction of greenhouse gases.
For Immediate Release:
January 29, 2002
Contact: Katie Mandes
Climate Change Threatens Health of America's Lakes, Streams, Rivers and Wetlands
Washington, DC - Global climate change poses a serious threat to lakes, streams, rivers, and wetlands throughout the United States, according to a new report from the Pew Center on Global Climate Change. The temperature increases and variations in weather patterns projected for the next 100 years will result in changes in the geographic distribution of freshwater fish, interfere with the reproduction of many aquatic species, reduce water quality, and impose added stresses on wetlands and other sensitive aquatic ecosystems.
"The United States' freshwater and wetland ecosystems face multiple threats to their health and stability, including changes in land use, environmental pollution, and the diversion of water for drinking, irrigation, and other uses," said Eileen Claussen, President of the Pew Center on Global Climate Change. "To these threats we must now add the very real and very serious effects of global climate change and its potential to transform the essential character of our lakes, rivers, streams, and wetlands."
The Pew Center report, Aquatic Ecosystems and Climate Change: Potential Impacts on Inland Freshwater and Coastal Wetland Ecosystems in the United States, draws on a variety of sources to summarize researchers' current understanding of the potential impacts of climate change on U.S. aquatic ecosystems. Among the report's key conclusions:
- Increases in water temperatures as a result of climate change will alter the geographic distribution of aquatic plant and animal species. The severity of these impacts may be limited if species can migrate to new areas as climate changes. However, the ability of species to migrate may be compromised by human activities that block migration corridors, potentially causing reductions in biodiversity.
- Changes in precipitation will alter river and streamflows affecting ecosystem productivity and reducing water quality. Populations of aquatic organisms are sensitive to the effects of floods, droughts and other extreme weather events, which are likely to increase as a result of climate change.
- Climate change is likely to further stress sensitive freshwater and coastal wetlands. Wetlands throughout the United States already are adversely affected by a variety of human impacts. Climate change will add to the existing stresses on these fragile ecosystems in a variety of ways-most notably by causing global sea levels to rise and inundate coastal wetlands. Rising global temperatures also will cause the wetland areas of Alaska and Canada to release additional carbon dioxide and other greenhouse gases into the atmosphere.
- Aquatic ecosystems have a limited ability to adapt to climate change. Governments, communities, businesses, and individual citizens can take a number of steps to reduce the likelihood of significant impacts to these systems while improving their ability to adapt to climate change. These include: maintaining riparian forests; reducing pollution from a variety of sources; restoring damaged ecosystems; minimizing groundwater withdrawal; and strategically placing new reservoirs to minimize their ecological impacts.
"Our rivers, lakes, streams, and wetlands support economically important fisheries and provide Americans with clean drinking water, water for irrigation, recreational opportunities, and more," said Claussen. "This report shows that climate change puts all of these services at risk, but it also shows there are things we can do to reduce that risk."
Part of "Environmental Impacts" Series
Aquatic Ecosystems and Global Climate Change was prepared for the Pew Center by N. LeRoy Poff, Mark M Brinson, and John W. Day, Jr. It is the seventh in a series of Pew Center reports examining the potential impacts of climate change on the U.S. environment. Other Pew Center series focus on domestic and international policy issues, climate change solutions, and the economics of climate change. A complete copy of this report -- and previous Pew Center reports -- is available on the Pew Center's web site, www.c2es.org.
The Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the United States' largest philanthropies and an influential voice in efforts to improve the quality of the environment. The Pew Center is conducting studies, launching public education efforts and working with businesses to develop market-oriented 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 Pew Center includes the Business Environmental Leadership Council, which is composed of 36 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.
Community Adjustment to Climate Change Policy
Prepared for the Pew Center on Global Climate Change
Judith M. Greenwald, Pew Center on Global Climate Change
Brandon Roberts, Brandon Roberts & Associates
Andrew D. Reamer, Andrew Reamer & Associates
Eileen Claussen, President, Pew Center on Global Climate Change
A Pew Center report series on the economics of climate change has identified many ways in which economic modeling can be improved to more reliably project the costs of greenhouse gas reduction policies. These studies show that better model design – for instance, more realistically portraying technological progress and flexibility in the economy – can yield substantially lower projections for the costs of addressing climate change. They provide strong evidence that a rational climate policy that sets realistic short-, medium-, and long-term goals can achieve significant environmental gains while minimizing economic costs.
At the same time, it is important to recognize that the costs of addressing climate change are likely to fall disproportionately on certain industries, communities, and workers, and to explore ways to minimize these adverse impacts. This report is one of three focusing of these critical transition issues. It draws from past community assistance efforts to recommend ways the government can best assist communities that may suffer economic disruption as a result of climate change policies. A report released simultaneously looks at potential impacts on American workers and a future Pew Center report will evaluate competitiveness issues.
In the case of community assistance, the government has considerable experience assisting communities adversely affected by policies such as trade agreements, defense downsizing, and forest protection. For this report, authors Judith Greenwald, Brandon Roberts, and Andrew Reamer apply lessons learned from previous adjustment programs to the challenges posed by addressing climate change. Specifically, the report examines the risks faced by communities whose economies rely heavily on energy production and energy-intensive industries. The authors conclude that a new federal adjustment program for at-risk communities should be part of U.S. climate change policy. The report recommends that the U.S. government take the following actions:
- Designate and fund the Economic Development Administration (E.D.A.) of the U.S. Department of Commerce to design and implement an economic adjustment program for communities;
- Identify and assist communities that are particularly dependent on energy-producing and energy-intensive sectors before dislocations occur;
- Leverage and integrate additional resources by involving multiple federal agencies and state and local governments through federal and regional task forces; and
- Be flexible in addressing community needs by supporting locally determined, comprehensive strategies for five to seven years after the implementation of new climate policies.
C learly, some steps recommended in these reports will require funding. As policies to address climate change are developed, revenue streams from related fees (e.g., from permit fees or auction revenues) could be used to assist with these programs. Addressing climate change through sound policy will make it possible to achieve our environmental objectives while shielding workers and communities from potential economic harm. The authors and the Pew Center are indebted to Robert Atkinson, Ev Ehrlich, and Phil Singerman for their comments on previous drafts of this report.
The world is becoming increasingly concerned about the risks of global warming from the buildup of greenhouse gases in the atmosphere, but many American decision-makers are worried about the economic impacts of policies that may be needed to reduce U.S. greenhouse gas emissions. The overall size and distribution of the impacts of such policies are uncertain, and depend greatly upon how governments, businesses, consumers, and workers respond to the challenge. Efforts to avert global warming would put some American businesses, workers, and communities at risk of economic dislocation. This paper focuses on how the federal government can best assist at-risk communities. Since the burning of fossil fuels such as coal, oil, and natural gas to produce energy is a major source of greenhouse gas emissions, such communities include those with high reliance on jobs in energy production — say, coal mining in Wyoming, or oil and gas production in Louisiana — and in energy-intensive industries such as steel manufacturing in Pennsylvania.
This is not the first time that important national policies have forced economic change on particular communities. The same story has been told for trade agreements, defense downsizing, and forest protection, for example. In each case, the U.S. government helped affected communities through various forms of economic adjustment assistance. In addition, in the last 20 years, numerous U.S. communities have sought to adapt to wrenching economic change brought about by global competition and recession, both with and without federal assistance.
The United States has substantial infrastructure and experience at the federal, state, and local levels in community economic adjustment. Thus, a foundation is in place for creating a new government program to help communities adversely affected by global climate change policy. Experience in the United States and elsewhere suggests that, although economic adjustment programs do not usually remove the pain of economic disruption, appropriately designed programs can lessen that pain considerably. At the same time, there is substantial room for improvement in existing adjustment efforts.
This paper recommends a new federal adjustment program for communities as part of global climate change policy. Specifically, the United States should do the following: (1) commit to address the problem by designating a single agency, the Economic Development Administration (EDA) of the U.S. Department of Commerce, and authorizing about $550 million dedicated dollars, to design and implement an economic adjustment program; (2) be proactive by identifying communities that are particularly dependent on energy-producing and energy-intensive sectors, and by helping communities to take action before dislocations occur; (3) leverage and integrate additional resources by involving multiple federal agencies and state and local governments through federal and regional task forces; and (4) be flexible in addressing community needs by supporting locally determined, comprehensive strategies for five to seven years.
Such a program would take advantage of available experience and expertise at all levels of government, and would take into account the wide variability in local circumstances and opportunities. By doing so, it would minimize economic dislocation and maximize opportunities to create jobs and protect the environment.
About the Authors
Judith M. Greenwald
Pew Center on Global Climate Change
Brandon Roberts & Associates
Brandon Roberts, president of Brandon Roberts & Associates since 1990, is a public policy consultant specializing in economic and workforce development matters. He works primarily with state- and local-level organizations to develop and implement effective policies and program activities, and to evaluate the benefits of past efforts. He has worked in California, Delaware, Florida, Massachusetts, Michigan, Minnesota, Iowa, Ohio, Oregon, and Washington; in large cities such as Baltimore, Cincinnati, Cleveland, Miami, and Portland; and on a number of projects involving community-based organizations.
Before starting his own consulting firm, Mr. Roberts served as Deputy Director of the Council of State Community Development Agencies in Washington, D.C., where he worked extensively with state economic and community development agencies and helped develop policies and strategies to address the employment needs of low-income individuals. He also has held positions in the U.S. Economic Development Administration and the Executive Office of the President. Mr. Roberts has a BS in government (1975) and a MSP in urban and regional planning (1977) from Florida State University.
Andrew D. Reamer
Andrew Reamer & Associates
Andrew Reamer, Ph.D., is Principal of Andrew Reamer & Associates, a Boston-based consulting firm specializing in economic development and public policy. Dr. Reamer received a Ph.D. in Economic Development and Public Policy (1987) and a Masters in City Planning (1981) from the Department of Urban Studies and Planning, Massachusetts Institute of Technology.
Remarks of Eileen Claussen
President, Pew Center On Global Climate Change
City Club of Portland
December 14, 2001
Greetings and thank you very much. It is wonderful to be here in Portland, and I want to thank the people at the City Club for inviting me to be a part of your Friday Forum. I noticed on the club's schedule that next week's Friday Forum presenters will be the Oregon Repertory singers. I sincerely hope that none of you got the dates mixed up. I always try to be somewhat entertaining in my speeches, but singing a few holiday favorites definitely crosses the line.
Seriously, I'm glad to have the chance to be here today to talk to you about one of the most profound challenges of the 21st century. That, of course, is the challenge of global climate change. I'd like to tell you where we stand right now in the effort to deal with climate change, both here in the United States and internationally. And I'd like to tell you where we are headed - the kind of world we will leave our children and grandchildren if we stick to business as usual. But most importantly, I'd like to tell you where we need to be headed - the path that instead will allow us to pass to future generations a safer, healthier, more prosperous planet. It is not a simple path. For what is needed, I believe, is a second industrial revolution - one that takes us beyond oil and beyond coal to cleaner, more secure ways to power our global economy. Government must have a hand, a strong hand, in launching this revolution. But it can succeed only if our corporate leaders rise to the challenge as well. For while government can set the goals, only the marketplace can spur the innovation and mobilize the resources needed to achieve them. Fortunately, a growing number of forward-thinking companies already are leading the way.
First, though, I'd like to tell you why the state of Oregon holds such a special place in my heart. Some of you, I'm sure, remember back in the 70' s when Oregon became the first state in the nation to require a deposit on bottles and cans. At the time, I was a young staffer in EPA's office of solid waste. And I thought: Hey, they've got a great idea out there in Oregon. We should let other people know about it. So I put together a nifty little pamphlet describing Oregon's groundbreaking program and EPA started distributing it. Well, not everyone agreed that bottle bills were such a grand idea. The beverage industry was, shall I say, unhappy. And they let my bosses know it. I'm told, in fact, that the chairman of Pepsi raised the matter directly with the president. Soon thereafter EPA decided to "loan" me to an obscure office in Congress where I couldn't cause any more trouble. And when I was finally allowed to return, I was assigned a new area of responsibility: sewage sludge.
I'm pleased to say I was eventually able to rise above sewage sludge. I'm also pleased to note that, all these years later, Oregon is still leading the way on the environment. In fact, I know of no state that is doing more to meet the challenge of global warming. Oregon was the first state to enact mandatory controls on carbon dioxide - requiring that all new power plants meet a tough new emissions standard. The city of Portland and Multnomah County were the first local governments in the United States to adopt a plan for reducing greenhouse gas emissions. And through your commitment to light rail and other smart growth strategies, you are demonstrating that protecting the climate goes hand in hand with preserving Oregon's enviable quality of life. These efforts really do reflect the spirit behind the Oregon state motto, "She flies with her own wings." May you soar higher and higher.
But are others joining you in flight? Climate change is by definition a global challenge. And the best efforts of any one city, state or nation will come to naught unless, ultimately, we all act together. We're by no means there yet - not even close. But it might surprise you to learn that we are in fact making headway. The reason this might surprise you is that the one thing most people heard about climate change over the past year was that President Bush rejected the Kyoto Protocol. His decision indeed was a setback. But let's look at what's happened since.
First, let's look at the international picture. For those of you new to this topic, the Kyoto Protocol is an agreement negotiated in 1997 that does two things: it sets targets for reducing greenhouse gas emissions from industrialized countries; and it allows them to meet those targets through market-based strategies like emissions trading. Don't worry. I'm not going to get too far into this. But it's worth taking a minute to understand why these market-based strategies are so important. Basically, they put the market to work to cut emissions as cost-effectively as possible. In other words, they deliver the greatest environmental benefit at the lowest possible cost. And they create market incentives that drive companies to keep coming up with better and cheaper ways to cut emissions. This is how we've tackled acid rain faster and cheaper than anyone ever imagined. Emissions trading is a concept born here in America, and it was the United States that insisted it be part of the Kyoto Protocol.
While Kyoto established a broad framework, the nitty-gritty rules still had to be negotiated before countries could ratify it. A year ago, those negotiations were at a standstill. Then President Bush rejected the Protocol. Suddenly, the rest of the world was rallying to its defense. In negotiations last July in Bonn, and then last month in Marrakech, nations made the tough compromises and worked out the rules. They're not perfect, but they do establish a workable international system for beginning to tackle this problem. The agreements in Bonn and Marrakech have been rightly declared a triumph of multilateralism. They represent a triumph as well for the principle of harnessing the global market to protect our global environment. It's true, Kyoto's targets take us only a decade into the future, and provide only a small fraction of the emissions reductions we must ultimately achieve. But the bottom line is that we have to start somewhere, and much of the world has now established that starting point. The priority now is to ensure the Protocol's swift ratification and entry into force so we can, at long last, begin to deliver on Kyoto's promise and achieve real progress.
What, then, of the United States? With just 4 percent of the world's population, we generate 25 percent of the world's greenhouse gas emissions. Each year, our emissions grow higher. We've rejected Kyoto, yet we have no real strategy of our own. I'm afraid I have little expectation that the Bush administration is prepared to put forward the kind of proposals needed to launch a serious effort, at least not at the moment. Nor, for that matter, was the previous administration. But just as President Bush's rejection of Kyoto helped rally international support for the Protocol, it has stimulated a very interesting and encouraging bipartisan response on Capitol Hill. Suddenly, both Democrats and Republicans seem eager to demonstrate their commitment to tackling climate change.
For instance, Senator Robert Byrd, a leading Democrat from coal-producing West Virginia, and Senator Ted Stevens, a leading Republican from oil-producing Alaska, are teaming up on a bill that would devote billions to researching and developing climate-friendly technology. It also would establish a climate change office in the White House and give the President one year to develop a comprehensive strategy aimed at stabilizing greenhouse gas concentrations in the atmosphere. A first step, but an important one.
Other bills would require companies to track and disclose their emissions of greenhouse gases, an essential step toward building a comprehensive emissions reduction strategy. This is an idea that the White House seems at least open to considering. In the Senate, there's a serious debate brewing over new pollution standards for power plants - in fact, the first real debate at the federal level over the kind of mandatory controls on carbon dioxide that Oregon already has in place. Finally, another bipartisan duo, Senators John McCain and Joe Lieberman, have said they plan to introduce legislation establishing an emissions trading system covering major sources of greenhouse gases throughout the economy. It's hard to imagine a bill like that moving through Congress anytime soon. But the very idea that two such prominent lawmakers would be advocating such a far-reaching strategy was virtually unthinkable just a year ago.
To be certain, there are many in Congress and elsewhere who remain adamantly opposed to concrete action against climate change. Perhaps they assume, in the greatest tradition of laissez-faire economics, that a rising sea level lifts all boats. There are even those who continue to question whether global warming is real. President Bush expressed his own doubts about the science when he first took office. He asked the National Academy of Sciences to undertake a special review. The NAS came back and said, yes, there are some uncertainties in the science. There always will be, I'm sure. But the NAS went on to say that, despite those uncertainties, the evidence for global warming is strong and growing stronger.
Here's what the science tells us. First, the earth is indeed getting warmer. The 1990s were the hottest decade of the entire millennium, and 1997, '98, and '99 were three of the hottest years ever. Second, this warming trend is almost certain to continue. Projections of future warming suggest an average global increase of two to ten degrees Fahrenheit over the next century. Third, and perhaps most importantly, the evidence strongly suggests that human activities, in particular the burning of fossil fuels, are largely to blame.
What will the impacts of this warming be? How will all this affect our children and grandchildren? Some people like to see the bright side of global warming. Lower heating bills in winter, for instance, and longer growing seasons in the Midwest. But there's good reason to believe that any potential benefits will be far outweighed by the costs.
Rising sea levels will flood coastal areas - a very real worry along portions of the U.S. coastline but a much greater worry for low-lying countries like the Netherlands and Bangladesh. Higher temperatures mean an increase in extreme weather-more flooding, more drought, and more severe storms. Historic patterns of rain and snowfall will be disrupted, putting water supplies at risk. Here in the Pacific Northwest, for instance, warmer winters will mean less snow pack in the mountains and an earlier springtime melt. Water shortages are likely to grow worse. Many of our most threatened species and ecosystems will face even greater risk. Declines in river flow, for instance, could destroy any chance of saving this region's precious salmon runs. And hotter, drier summers will stress the forests and pose an ever greater threat of wildfire.
One of the tremendous inequities of climate change is that the people facing the greatest risks are those least able to bear them. Wealthy nations like the United States can find ways to lessen the impact. We can build sea walls to protect our coasts. Our farmers can switch to other crops better suited to a warmer climate. We can strengthen our public health system to guard against diseases like malaria and dengue fever. But poorer nations struggling to feed and house their people cannot so easily adapt. And, scientists predict, they will be the ones hardest hit. For them, prolonged drought doesn't mean parched lawns and water rationing. It means starvation. Rising sea levels won't just be an inconvenience for those with beachfront property. They'll mean mass migrations and increased competition for scarce land. Lest you think this is all conjecture, it's worth noting that the people of Tuvalu, a small island nation in the Pacific, recently decided to abandon their homeland before it's swallowed by rising seas. All 11,000 residents will be relocating to New Zealand beginning next year.
So this is the kind of world that awaits us if we continue on our present course. What is the alternative? What will it take to keep our planet from overheating? Well, quite obviously, it requires dramatically reducing emissions of carbon dioxide and other greenhouse gases that trap heat in our atmosphere. What is the primary source of these gases? The combustion of fossil fuels. So our goal, over time, must be to end our reliance on coal and oil and to develop new sources of energy that can power our growing economy without endangering our climate. Yes, it is a tall order. As I said earlier, it will take nothing short of a second industrial revolution.
Let me be clear: This revolution cannot take place overnight. It will, in fact, take decades. But there are important steps we should take right now to begin the transition. First, we need to be more energy efficient, so we use less energy to achieve the same results. The United States has made significant improvements in energy efficiency over the last decade. But countries such as the United Kingdom, Germany, Japan and Brazil are all far less energy intensive than we are, and we have clearly have much further to go. Some of this could be as simple as turning off the lights, buying a compact fluorescent next time you need a new light bulb, or carefully checking the energy efficiency ratings the next time you buy a new washer or dryer. We also should be insisting on more energy-efficient cars. The technology exists. The new Toyota Prius, a hybrid car that uses both an electric motor and an internal combustion engine, can go more than 50 miles on a gallon of gas. It's proven so popular you have to wait months to get one. If everyone in America drove a hybrid, we would save about 1.6 billion gallons of oil a year - far more than we import from the Middle East.
Improving efficiency is not enough, though. To address climate change, we will also have to emit much less carbon, and this means switching to less carbon intensive fuels. Some fuel switching can be done now, but we need a serious effort to begin laying the groundwork for the fuels of the future. We've been through energy transitions before. In the 18th century, we still relied largely on wood. In the 19th century, the steam engine took over. In the 20th century, we turned to oil. Now we must develop new fuels to meet the needs of the 21st century.
I can't tell you what the fuel of choice should be a hundred years from now. That will depend on the ingenuity of our scientists and engineers; investment decisions made in boardrooms; the unpredictable course of technological development; and the whims of the marketplace. Solar, wind and geothermal power all hold tremendous promise. But one technology that is generating real interest right now is the hydrogen fuel cell.
Fuel cells are what NASA puts on board rockets to generate power in space. They can run on different kinds of fuels. But whatever the fuel source, the only byproduct is heat and water - pure water. In other words, no smog-forming pollutants and no carbon dioxide. Fuel cells could be used to power cars, and many automakers are now engaged in efforts to make fuel cell cars a reality. They could be used to power businesses or homes. Instead of buying electricity from a coal-burning utility, a fuel cell in your basement no bigger than a central air conditioner could generate all the clean power you need. The use of hydrogen to power fuel cells is appealing because there are so many different ways to produce it. Hydrogen can be extracted from coal, oil or natural gas - or, preferably, produced from renewable energy sources. And it can take different forms. Some energy experts envision the day when, instead of filling your car at the gas pump, you'll pick up "fuel in a box" from the convenience store or a vending machine. You could go about 250 miles on a six-pack.
That's just one possibility, and there are many, many more. The point is that if we are to realize them - if we are to discover and pursue the most promising options - we must get started. This second industrial revolution requires technological and economic transformation on an unprecedented scale. And we must begin making investments now to ensure its success.
There are those who say we can't afford to address climate change, particularly when our economy is slowing. I believe they are wrong, for a host of reasons. I could tell you how the economic models they rely on exaggerate the costs of cutting emissions and fail to take into account the full range of benefits. But instead, let me tell you about the concrete experiences of the companies we work with at the Pew Center on Global Climate Change. Thirty-seven major companies are now members of our Business Environmental Leadership Council. These are primarily Fortune 500 companies - names you'd recognize, like Weyerhauser, Intel, Boeing, DuPont, Shell and Alcoa. Together these companies employ more than 2 million people and generate revenues of nearly $900 billion. And through their investments in emissions-cutting and climate-friendly technologies, they are demonstrating that what is good for the climate can be good, too, for the bottom line.
Many of these companies have adopted voluntary targets for reducing their greenhouse gas emissions. We recently released a report that took a close look at six of them. It looked at the reasons why they took on targets, and what the results have been. The companies said one of the motivations for taking on a target was to improve their competitive positioning in the marketplace. And that, in fact, has been the result. Each of the companies is on track to meeting or exceeding its greenhouse gas goal. Together, they've delivered reductions equal to the annual emissions of three million cars. And all the companies are finding that their efforts are helping to reduce production costs and enhance product sales today.
So, yes, I am confident that with smart strategies that tap the power of the marketplace instead of squelching it, that do not expect more than can be delivered, and that take into account capital stock turnover cycles, we can afford to address climate change. In fact, we can strengthen the long-term health of our economy. Whatever the economic indicators for the latest quarter, over the long haul, increased efficiencies can only improve the bottom line. There are real economic opportunities that come with taking action on climate change. It would be a mistake not to seize them.
Before closing, I'd like to say a word about the new concerns now dominating our national agenda. I refer, of course, to the horrible, haunting events of September 11. The security of our nation is now, and will for some time remain, the overriding concern in Washington, and with good reason. As a result, a host of other vital issues - climate change among them - will for now take a lower profile. But I believe those of us working on climate change can still make an important contribution. We can help show how, with the right strategies, we can both protect our nation and advance the fight against global warming. This is most obvious in the case of "energy security." We all know that continuing to rely so heavily on imported oil is a costly mistake. To some the answer is drilling in the Arctic refuge. But whatever your views on the Arctic, it is clear that no amount of domestic drilling will significantly reduce our reliance on foreign oil. If we are serious about energy security - whether or not we're serious about addressing climate change - we must move beyond oil.
So, where are we in the effort against climate change? Internationally, after a decade of difficult negotiations, we are for the first time on the verge of enacting binding emissions limits for all industrialized countries but one. In the United States, despite our refusal to join the rest of the world in the Kyoto Protocol, there is a growing bipartisan recognition that we cannot continue to blithely ignore our responsibilities as the world's largest greenhouse gas polluter. In a growing number of boardrooms, corporate leaders are seeing climate change not only as a challenge but as an opportunity. And in communities like Portland, ordinary citizens are acting locally to meet what is truly a global challenge. We have a long, long way to go. But we have begun. And that is good. Thank you very much.
July 2001 | Download the PDF
- Tracking and Reporting Greenhouse Gas Emissions
- Promoting Clean Technologies and Practices
- Securing Emissions Reductions
The United States is the world’s largest emitter of greenhouse gases (GHGs), accounting for roughly 25 percent of global emissions. No strategy to address global climate change can ultimately succeed without substantial and permanent reductions in U.S. emissions. Voluntary efforts in a number of sectors over the past several years have failed to curb the overall growth in U.S. GHG emissions. A number of policy options are available to secure additional emissions reductions. However, to be effective and affordable, a long-term emissions reduction program must couple mandatory GHG reductions with technology development and market mechanisms.
To date, efforts to reduce U.S. GHG emissions have been limited almost exclusively to voluntary activities at the federal, state, local, and corporate level. Many of these efforts were spurred by the United Nations Framework Convention on Climate Change, which set a non-binding target of reducing emissions from industrialized countries to 1990 levels by 2000. Though some voluntary efforts have resulted in significant emissions reductions – some companies, for instance, have cut emissions 10 percent or more – in the aggregate, they have not succeeded in curbing the overall growth in U.S. emissions.1 While technology has improved the energy intensity of products and processes over the last 50 years, this greater efficiency has been outpaced by increased demand driven by economic expansion, population growth, and changing consumer preferences. U.S. emissions rose roughly 12 percent over the past decade, and are projected to continue rising for the foreseeable future.2
Source: U.S. EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-1999. 2010 projections for CO2 are from: U.S. DOE. Annual Energy Outlook 2000. 2010 projections for non-COs gases are from: U.S. EPA. Annual Energy Review (2000).
(See Figure 1.) Voluntary programs can make an important contribution to a domestic climate change program, and can provide valuable experience for designing future efforts, but they cannot stimulate the broad engagement that will be necessary to achieve the level of emissions reductions that will ultimately be required.
Climate change is a long-term challenge that will require sustained global action and investment over many decades. Ideally, a national strategy would be guided by a specific long-term emissions goal. It would also couple short- and long-term measures – and both supply and demand elements – to signal markets to begin the transition toward that ultimate objective. More specifically, short-term measures are needed to improve energy efficiency and encourage the use of lower-carbon fuels; long-term measures are needed to encourage sustained investment in development of the technology and infrastructure needed to facilitate the transition to a low-carbon economy. Further, because energy consumption is an important component of GHG emissions, any domestic energy policy program must be geared toward long-term GHG emissions reductions. (See Figure 2 for chart of emissions by sector in carbon dioxide equivalents [CO2E].)
A domestic strategy ultimately must reflect any international commitments by the United States. However, its design and implementation should proceed now even if the United States is not yet prepared to enter into an international agreement. As domestic and international programs evolve, close coordination between them is critical. This is especially important for companies that operate and compete both domestically and abroad, and for U.S.-based companies that sell products abroad, as they will be subject to rules dealing with climate change in other countries. In addition, coordination is necessary to maximize the effectiveness of emissions trading and other flexibility mechanisms now being developed at the international level.
The cost of meeting a given emissions target can vary by orders of magnitude depending on the approach taken. In general, the most cost-effective approaches allow emitters flexibility in deciding how to meet a target or performance level; provide early direction so targets can be anticipated and factored into major capital and investment decisions; and employ market-based mechanisms such as emissions trading to achieve reductions where they cost the least. To ease the transition and enlist the broadest possible participation, early targets should be realistic and achievable without stranding major capital investments or imposing undue economic hardships. These could be followed over time by more stringent constraints that allow for the turnover of existing capital stock and the development of new breakthrough technologies and innovative measures for reducing GHG emissions. This paper outlines possible elements of a comprehensive domestic strategy that couples short- and long-term measures. The proposed elements – some voluntary, others mandatory – aim to:
- improve the tracking and reporting of greenhouse gas emissions;
- promote new technologies and practices; and,
- provide a foundation upon which to secure long-term emissions reductions.
Source: U.S. EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-1999.
Note: Emissions from electricity produced by industries but sold to the grid is included in the "Industrial" category. Emissions due to other industrial activities as well as residential and commercial use of electricity are included under "Electric Utilities." Excludes emissions from U.S. territories.
While each of these objectives can be pursued in a number of different ways (several options for securing emissions reductions are proposed), an effective strategy must address all three.
No effort to reduce greenhouse gas emissions can succeed without the accurate measuring and tracking of emissions. Improved tracking and reporting of emissions reductions could provide the basis for government assurances that companies will not be penalized for their early reductions under a future climate policy. Public disclosure of emissions data can also serve as a powerful incentive for reductions.
A first step is establishment of a registration program to more accurately and reliably measure, report, and track GHG emissions. This could be done through legislation that builds on current efforts such as the Department of Energy’s 1605(b) program. The current program has limited value because its reporting standards lack rigor, there are no verification requirements, and many companies choose not to report. In an improved registry program, a company would establish a baseline consisting of current aggregate emissions from all major GHG sources under its control in the United States. Gross emissions on an annual basis could be compared to this established baseline. In addition to accounting for emissions from a company’s core operations, an improved registry should over time develop the means to measure, report, and track GHG emissions resulting from: the use of products manufactured by that company; offsets achieved through sequestration projects designed to store carbon in forests, soils, oceans, or underground; and offsets achieved through increased energy efficiency.
A reliable registry would make it possible to provide “baseline protection” for companies taking action now to reduce their emissions. These entities could be assured that – in the event of future controls involving the allocation of emissions allowances or requiring emissions reductions – they would not be penalized for reductions already achieved voluntarily. The improved registry program could also provide a mechanism to recognize the emissions reductions resulting from companies manufacturing more efficient or carbon-saving products. Finally, it could ensure that GHG reductions and sequestration offsets are of sufficient integrity that they can be traded and sustain their value in future years. This registry would include reductions and offsets achieved outside of the United States, in both developed and developing countries. In this manner, both gross and net (reductions and offsets) emissions would be recorded.
An additional step would be to require public disclosure of GHG emissions data for all facilities or companies whose emissions exceed a given threshold. At present, only electric generating sources must report their CO2 emissions and, although publicly available, emissions data are not tabulated and disclosed in a manner that encourages companies to reduce their emissions voluntarily. To address these shortcomings, a mandatory GHG reporting program should apply to all major source categories of GHG emissions and require public disclosure as is now required under the federal Toxics Release Inventory (TRI) program. Disclosure reports would be subject to verification and reporting entities would face enforcement action if emissions were misrepresented. As with the TRI program, reported data would be aggregated and made available on facility-specific, company-wide, and source-category bases. Under the TRI program, such disclosures have encouraged companies to assess potential mitigation opportunities and reduce emissions voluntarily, and the same is likely with a GHG reporting program. Gross emissions from an entity’s U.S. sources as well as net emissions (after considering sequestration activities and trading) would be reported to encourage comprehensive mitigation strategies.
A mandatory GHG reporting obligation (and an improved registry) could be linked to a voluntary program for mitigating GHG emissions. Such linkage would likely increase the effectiveness of each initiative, judging by the success of the voluntary pollution prevention programs that were coordinated with mandatory TRI reporting.3 Following the model used in EPA’s 33/50 (Industrial Toxics) Project, the voluntary program could establish clear performance targets to be achieved by each sector within specified time frames. Although voluntary, participation in the program could be limited to only those companies willing to make corporate-wide commitments to achieve minimum reduction levels from their core business operations or prescribed performance levels for products sold in the United States. Setting minimum standards would likely increase the pressure for companies to step forward with voluntary commitments achieving substantial emissions reductions. The minimum standard approach could also be combined with a graduated scale of incentives for those who make voluntary commitments, rewarding those who exceed their emissions goals with greater financial or other incentives like tax credits.
Finally, improved registries coupled with reporting requirements would also serve as an important foundation for mandatory approaches to reducing GHGs.
The ultimate success of a climate change strategy will hinge on the timely development and deployment of technologies that over time can substantially reduce the carbon intensity of the overall U.S. economy – including industry, the transportation sector, and residential/commercial activity. (See Figure 3 for historic energy use of these sectors.) In the short term, improved technologies can significantly enhance energy efficiency, provide opportunities to store – or sequester – carbon, and expand use of lower-carbon fuels (such as natural gas). In the long term, new technologies will be needed to develop non-fossil energy sources such as biofuels, wind, hydrogen, and solar, and provide opportunities for more permanent forms of sequestration.
Source: U.S. DOE. Energy in the United States: A Brief History and Current Trends (1999).
A successful technology strategy demands sustained, coordinated investments at a very high level from all stakeholders. A variety of incentives and direct investment tools can be used to promote technological innovation, from basic research to deployment:
- Targeted tax credits or low-interest loans can encourage the development and adoption of energy-efficient technologies (such as combined heat and power, and state-of-the-art lighting); clean fuel technologies (including advanced fossil fuel technology, hydrogen, fuel cells, and biofuels); and carbon storage in forests and agricultural soils, using innovative management techniques.
- Investment in basic research may be especially critical in inventing breakthrough technologies that will facilitate the transition to a low-carbon economy.
- Public-private partnerships, such as Industries for the Future and the Partnership for a New Generation of Vehicles, can team government and corporate researchers to accelerate technology gains.
- Basic research and tax credits could accelerate the development and diffusion of climate-friendly alternatives to non-CO2 greenhouse gases or technologies and practices that reduce their emissions.
- Investment in training to improve agricultural practices can decrease the release of methane (CH4) and nitrous oxide (N2O).
- Public education through the use of required labeling and other means can help consumers reduce their contribution to climate change.
- Incentives to builders and landlords can encourage the use of energy-efficient materials and appliances in new construction and rental units.
Finally, improved product efficiency standards – coupled with incentives to exceed minimum requirements – can achieve significant emissions reductions. Under the traditional command-and-control approach, the incentive is to meet, but not exceed, a government-set standard. A combined hybrid standard/incentive approach (e.g., one that combines a minimum efficiency standard with a sliding tax or emissions credit for those who go beyond the standard) would provide incentive to exceed minimum regulatory requirements. This approach should be added to existing product standards as they come up for review and employed for new products for which standards have not yet been set.
An especially critical element of a domestic climate change program will be the design of a market-based GHG emissions management framework to ensure significant long-term reductions in emissions. Also, an effective program ultimately will entail some form of mandatory requirements. The approaches that follow include voluntary activities that could be implemented in advance of, or alongside, mandatory emissions reductions:
Enter into agreements with companies willing to make significant, enforceable commitments to achieve net GHG emissions reductions in lieu of future GHG control requirements.
Securing regulatory certainty may be a powerful incentive for those willing to undertake substantial GHG reduction commitments. By committing to take action yielding specified reductions over an established period of time, a firm could receive a commitment from the government that (as long as its contractual obligations are met) it would not be bound by subsequently developed GHG controls over the same time period. For example, if a company were to commit to significant reductions over a 20-year period (e.g., a 20 percent reduction achieved either through steady declines of 1 percent per year or through a major capital investment at some point during this timeframe), the company could avoid additional mandatory GHG control obligations during the same 20-year period.4 This approach would allow companies to move forward with substantial capital investments that will secure significant emissions reductions.
Under this approach, reductions below company baseline levels (e.g., 1990 GHG emissions) could be achieved through meeting either rate-based or specified net targets. These commitments would provide baseline protection, and shelter firms from additional requirements developed during the term, in exchange for legally binding agreements containing measurement, verification, and reporting requirements. Such an approach would require enabling legislation authorizing the Executive Branch to enter into these agreements. This legislation should include provisions for public notice and comment. Companies also could be allowed to enter into similar agreements with respect to their services or products manufactured and sold in the United States.5
|Ultimately, the ability of the United States to achieve significant long-term GHG reductions depends on our success in the design and implementation of a mandatory program to reduce emissions.|
Additional features could include allowing program participants to trade emissions credits and allowing credit for reductions achieved through sequestration and offsets. In other words, companies that reduce their emissions beyond the levels specified in the agreement would be able to trade these additional emissions reductions with firms that were unable to meet their reduction targets under a future regulatory program. Similarly, credit for real, quantifiable, and verifiable sequestration activities could be granted towards the obligations and, when in excess of specified targets, could be sold in an emissions trading market.
Set voluntary emissions reduction targets for major industry sectors with a trigger mechanism for imposing mandatory requirements if a sector falls short of its targets.
A second approach would establish initial rate-based or specified reduction targets for major industry sectors, but impose stricter controls for sectors that do not meet their initial targets. The program, for example, could call for a sector to stabilize its emissions at year 2000 levels over the 2005-to-2010 period, while providing federal authority to impose stricter mandatory control requirements by a later date if the sector as a whole fails to achieve its reduction target. Similar performance targets could be set for products, such as automobiles and appliances. Companies would receive shelter from the stricter requirements so long as they achieve their proportionate share of the reduction target.
One advantage of this approach is that it would promote immediate action towards the reduction target, even while the details of the mandatory control program are being developed. Another advantage is that it would enable companies to coordinate their emissions control strategies for conventional air pollutants with their carbon dioxide reductions. This would be especially important for those sectors whose near-term control obligations for conventional air pollutants (involving major capital investments) may conflict with a long-term GHG control strategy for that sector.
New legislation would be required to either establish general criteria that apply economy wide or set out design elements specific to individual sectors. In the latter case, for example, the legislation could specify for the power generation sector: (a) the initial and “backstop” reduction levels, (b) the reduction timeframes, (c) allocation of emissions allowances through a generation performance standard, (d) the ability of participants to trade emissions credits, and (e) the flexibility to “bank” allowances for future use.
In addition, if a sector that makes products fails to meet its target, those companies not doing a proportionate share could have tighter efficiency standards imposed.
Allow an opt-in for coverage of carbon dioxide emissions in conjunction with air regulatory programs.
Many companies – particularly utilities – are interested in addressing their CO2 emissions in conjunction with new reduction obligations likely to be enacted for other pollutants. Many studies have documented substantial environmental and economic benefits of harmonizing the timing and reduction levels of multiple air pollutants.6 An “opt-in” approach would permit these companies to consider reduction obligations and goals comprehensively, thereby minimizing the chance of stranding pollution control investments aimed at conventional pollutants without regard for CO2. By providing an opt-in strategy, overall emissions (including GHGs) could be considered simultaneously – avoiding the now-common scenario that control strategies devised for reductions in traditional pollutants have little or no beneficial impact on GHG emissions. (Post-combustion controls aimed at reducing conventional pollutants, in fact, often increase GHG emissions. In contrast, all GHG reduction strategies that reduce fuel consumption – the largest GHG emissions source – also reduce conventional air pollutants.) Harmonizing time frames for achieving reductions could avoid piecemeal and uncoordinated implementation of conventional and GHG emissions.
At the same time, streamlining the existing New Source Review (NSR) program for changes in facilities could enable power plants, refineries, and other major stationary sources to improve their production efficiencies more easily. Such efficiency improvements directly translate into lower CO2 emissions. Companies participating in this “opt-in” could be allowed to implement environmentally beneficial projects without triggering the NSR requirements.
Design and implement an economy-wide domestic emissions program to meet a mandated cap.
Ultimately, the ability of the United States to achieve significant long-term GHG reductions depends on our success in the design and implementation of a mandatory program to reduce emissions. Since such a program will take time to design and administer, the near-term approaches discussed above should be developed in such a way that they are consistent with important design elements of a future mandatory program. The most cost-effective method of obtaining such reductions is likely to come in the form of a domestic emissions trading program that could be integrated with an international trading regime.
Elements of an effective domestic trading program could include:
- allocation of permits to existing and new sources based on historic emissions, output levels, auction, or – preferably – some combination thereof;
- creation of an independent authority to oversee the GHG registry and trading activity;
- providing for a declining cap in permitted GHG levels over time;
- including credit for other GHG emissions on a CO2-equivalent basis;
- establishing a multi-year compliance period for meeting any GHG emissions reduction obligation; and,
- recycling revenues from auctioned permits to reduce other tax burdens, increase R&D, and provide transition assistance to affected workers and communities.
Ideally, a domestic program should be compatible with trading programs in other countries to allow credit for reductions undertaken abroad. Also, with improved confidence in measuring and monitoring sequestration-related activities (both domestically and abroad), credit for carbon storage should be included.
To address global climate change effectively, the United States must actively pursue real reductions in GHG emissions at home and abroad. The steps outlined here chart a course for a sound, credible, and cost-effective domestic program. Starting now on a path to reduce these emissions is necessary both to meet the environmental objective of moderating human interference with the climate system and to avoid the need for more costly measures in the future.
1 A significant investment has been made in a variety of federal programs to encourage voluntary reductions. Such programs include: the U.S. DOE’s Climate Challenge Program for electric utilities; and U.S. EPA programs such as Climate Wise, the Landfill Methane Outreach Program, the Coalbed Methane Outreach Program, Energy Star, and the Green Lights Program, as well as the U.S. Initiative on Joint Implementation. In addition, DOE’s Voluntary Reporting of Greenhouse Gas Program required by Section 1605(b) of the Energy Policy Act of 1992 records the results of voluntary measures to reduce, avoid, or sequester carbon. During 1999, a total of 201 U.S. companies and other organizations reported on 1,715 projects that achieved reductions and sequestration equivalent to 226 million metric tons of carbon dioxide, or about 3.4 percent of total 1999 greenhouse gas emissions. (Voluntary Reporting of Greenhouse Gases, 1999, DOE/EIA – 0608(99), February 2001.)
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2 In the United States, the transportation, industry, and combined residential/commercial sectors are each responsible for roughly one third of overall emissions.
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3 EPA enjoyed considerable success in encouraging substantial voluntary reductions of 17 toxic chemicals by linking the TRI reporting program with a voluntary pollution prevention program. Entitled the 33/50 (Industrial Toxics) Project, this entirely voluntary program established an interim goal of a 33 percent reduction by 1992 and an ultimate goal of a 50 percent reduction by 1995 in aggregate emissions of 17 high-priority toxic chemicals. Individual companies entered into voluntary, non-binding commitments to achieve specific reductions on a company or facility basis. In addition to achieving the ultimate goal in 1994 (one year ahead of schedule), the 33/50 Program enhanced the effectiveness of the TRI reporting program. Most importantly, participating facilities reported substantially more reductions of the 33/50 targeted chemicals than of other TRI chemicals.
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4 Similar relief has been provided for voluntary early reductions in other regulatory contexts. For example, section 112(i)(5) of the Clean Air Act provides a 6-year compliance extension from air toxic control standards set under section 112(d) for achieving early reductions of hazardous air pollutants (HAPs). The 6-year extension applies to those facilities achieving a 90 percent reduction in listed HAPs (95 percent reduction in the case of HAP particulates) before the proposal of the applicable HAP emissions standard(s). The reduction obligation must be federally enforceable and incorporated into the facility’s permit issued under Title V of the Clean Air Act.
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5 In such cases, companies would make binding commitments to improve the performance of their products sold by specified amounts over the term of the agreement. Auto manufacturers, for example, could agree to meet declining GHG emissions budgets reflecting improvements in fuel efficiency of vehicle fleets sold for each model year during the agreement. Appliance manufacturers could commit to improving efficiency of their products by set amounts over a fixed period of time.
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6 See, for example, STAPPA/ALAPCO, Reducing Greenhouse Gases and Air Pollution: A Menu of Harmonized Options (October 1999); and EIA, Analysis of Strategies for Reducing Multiple Emissions from Power Plants: Sulfur Dioxide, Nitrogen Oxides, and Carbon Dioxide (December 2000).
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