The 10-50 Solution: A Decade-by-Decade Approach to Climate Change

The 10-50 Solution: A Decade-by-Decade Approach to Climate Change

Remarks by Eileen Claussen
President, Pew Center on Global Climate Change

EnvironDesign8 Conference

April 22, 2004


Thank you very much.  It is a pleasure to be in Minneapolis.  I know this may date me, but as I was on my way here to the home of the old Mary Tyler Moore show, I was reminded of an exchange between Mary and her boss, Lou Grant. 

Lou Grant says, “You know, Mary, you’ve got spunk.”
“Well, thank you, Mr. Grant,” says Mary.
“And you know what?” says Lou. “I HATE spunk.”

In all seriousness, I honestly believe that everyone at this conference has spunk.  And, unlike Lou Grant, I am a big fan of it.  The reason you have spunk is that you are the leaders of the sustainability movement in America.  And I am honored to be with such a distinguished group of environmental problem-solvers to celebrate Earth Day—or, as the Bush administration calls it, Thursday, April 22nd.

On the occasion of the 34th anniversary of Earth Day, I believe it is important to acknowledge how far we’ve come in that time.  In 1970, after all, we had a lot of people driving around in monster vehicles powered by gas-guzzling V-8 engines.  Today, by contrast, we have, well, a lot of people driving around in monster vehicles powered by gas-guzzling V-8 engines.   The more things change, the more they stay the same. 

Seriously, we have made significant progress on these issues since the 1970s—but, obviously, not nearly enough.  And today we have a choice.

We can fall over ourselves seeking short-term gains for our businesses and society—potentially at great expense to our future.  Or, we can think ahead—there’s a novel idea—and invest in strategies, processes and ideas that will help to ensure that our businesses—and, indeed, our life as we know it—are still around 10, 20, or 50 years down the line.

In attending this conference, I know that all of you have made the second choice.  And I congratulate you for your commitment to environmental problem-solving—which I hope will be the number-one growth industry of the 21st century.

Today, I would like to talk with you about the issue of climate change.  No surprise there.  And, understanding that this group is looking at a wide range of environmental and sustainability topics, I want to start with a brief overview of what we know about climate change and what we are (and are not) doing in response.  I will conclude my remarks by suggesting to you a new approach for addressing this enormous problem—an approach that couples a long-term vision of progress with a solid understanding of the interim steps that will help us achieve that vision. 

But first a description of the problem itself.  Global temperatures increased approximately 1ºF over the twentieth century, and additional warming of 2.5º to 10º F is projected over the century to come.  What is causing this warming?  The driving force, although not the only force, is human emissions of greenhouse gases, which grew globally by approximately 10 percent during the 1990s. 

In the same vein as the standard line, “It’s not just the heat, it’s the humidity,” climate change is about much more than rising temperatures.  It is also about increases in sea level, changes in precipitation, including more frequent floods and droughts, an increase in extreme weather events, as well as other effects.  As if that’s not enough, substantial increases in global mean temperature could set off large-scale changes to the earth’s systems such as a shutdown of the Gulf Stream or a melting of the West Antarctic ice sheet.  The thresholds are uncertain and it may take centuries for these things to happen, but it is possible that warming in the 21st century could trigger these types of events—events that, once started, will be extremely difficult, if not impossible, to reverse.

What are we doing to address this problem?   At the global level, 121 countries have now ratified an agreement that would for the first time establish binding limits on worldwide emissions of greenhouse gases. I am talking, of course, about the Kyoto Protocol.

Over the last several years, there has been a lot of discussion of this treaty in political circles—much of it of a harshly critical nature—and I think it is important to remember what Kyoto is and what it is not. Most importantly, we must remember that Kyoto was never intended as the be-all and end-all solution to the problem of climate change.  Rather, it was intended as a first step, a way to commit the nations of the world to real action to reduce their emissions of greenhouse gases.  Right now, Kyoto’s targets take us only to 2012—just eight years away—when, in fact, we are going to have to work at this issue for decades to come.

The other thing to remember about Kyoto is that it is not only Russia’s fault that the treaty is right now in diplomatic limbo.  As you may know, Kyoto cannot enter into force until it is ratified by countries responsible for 55 percent of global greenhouse gas emissions.  And, right now, Russia’s signature is needed to reach the 55-percent level.
 
In all the talk about whether or not Russia will ratify and all the outrage that will surely surface should they decide not to, it is useful to remember that, among other big emitters, the United States and Australia have already opted out.   So there is plenty of blame to go around.

Even though it remains in limbo, and even though it may never enter into force as it currently stands, the Kyoto Protocol was and remains an historic achievement—as well as a powerful instrument for bringing the countries of the world together around a common understanding of the problem and of our shared role in addressing it.  It is because of Kyoto, after all, that we are finally seeing some nations get serious about reducing their emissions.  The European Union, for example, has adopted a carbon dioxide emission trading program.  And Prime Minister Tony Blair has committed Great Britain to a 60-percent cut in greenhouse gas emissions by 2050--the first instance of a world leader taking a long-term view on how to address this problem.

So that’s the global story.  Here in the United States, we have a different story.  At the federal level, we have seen no real action on this issue from either the Bush or the Clinton administrations (although Congress did engage in a serious debate about the climate issue last year).  At the same time, state governments and large corporations in this country are, in many instances, taking it upon themselves to shape solutions.

Let’s start in Washington.  A lot has been made of the Bush administration’s ill-mannered rejection of the Kyoto Protocol way back in 2001.  But the rejection itself wasn’t really all that shocking.  This was a new administration with its own ideas about how to tackle the problems of the world.  Rather, what was truly shocking was that the White House offered nothing in the way of an alternative global solution—and, equally important, no real plan for reducing the United States’ contribution to the problem.

Indeed, the White House and its congressional allies were none too friendly toward a plan put forward last year by Senators John McCain and Joe Lieberman that would for the first time establish modest but binding targets for reducing U.S. greenhouse gas emissions.  However, despite the opposition of the Bush administration and congressional leaders, the McCain-Lieberman Climate Stewardship Act attracted a very respectable 43 votes in the Senate, showing strong and growing bipartisan support for mandatory action against climate change in the United States.  (A companion measure was introduced in the House of Representatives just last month.) 

Still, for real action on this issue in the United States, we need to look to the state capitals and corporate boardrooms.

First the states.  In 2002, the Pew Center released a report entitled Greenhouse and Statehouse: The Evolving State Government Role in Climate Change.  In it, we surveyed state activity on this topic and found that a variety of measures that have proven controversial at the federal level--such as renewable portfolio standards, emission targets, and mandatory reporting of emissions--have indeed been implemented at the state level, often with little dissent.

The state initiatives are an important development not only because they can help pave the way for federal action but also because of the simple fact that U.S. states are large emitters of greenhouse gases.  Texas, for example, emits more greenhouse gases than France, the United Kingdom, or Canada.  Ohio’s emissions exceed those of Turkey and Taiwan, and emissions in Illinois exceed those from The Netherlands.  Clearly, if we are intent on scrutinizing—and, hopefully, celebrating—what is happening in these and other nations to address the problem of climate change, we also must take account of the actions of individual U.S. states with comparable levels of emissions.

The Pew Center’s report makes clear that states across America have initiated programs that are achieving real reductions in their emissions.

· For example, 13 states, including Texas, now require utilities to generate a specified share of their power from renewable sources. 

· Two states, Wisconsin and New Jersey, have created mandatory reporting programs for large emitters of greenhouse gases.
 
· Massachusetts has established a multi-pollutant cap that requires six older power plants to reduce their CO2 emissions.

· And, in California, state lawmakers have gone beyond target-setting and reporting and are working to establish direct controls on carbon emissions from cars and SUVs.

What’s more, we now are seeing groups of states begin to discuss climate solutions on a regional basis. Thus you have the agreement among New York and nine other mid-Atlantic and northeastern states to discuss a regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants.  And, last September, the governors of three Pacific states—California, Oregon, and Washington—announced that they will be working together to develop policies to reduce emissions from all sources.

The second place in America, in addition to the state capitals, where real action is happening on the climate issue is in corporate boardrooms.  At the Pew Center, we work with a group of leading companies that are committed to economically viable climate solutions.  The 38 members of our Business Environmental Leadership Council together employ nearly 2.5 million people and have combined revenues of $855 billion.  And here’s just a sampling of some of the things they are doing to reduce their emissions:

· Alcoa, for example, is developing a new technology for smelting aluminum that, if successful, will allow the company to reduce its greenhouse gas emissions to half their 1990 levels over the next nine years.
 
· United Technologies, or UTC, has reduced overall greenhouse gas emissions by 15 percent since 1997. In addition, the company has exceeded its goal of reducing energy consumption as a percentage of sales by 25 percent from 1997 levels.

· And, of course, I want to mention DuPont, which made a voluntary pledge to reduce its global emissions of greenhouse gases by 65 percent by the year 2010.  In 2002, DuPont announced that it had achieved this target eight years ahead of schedule.

· Another company that has met its target ahead of schedule is BP, which in 2002 announced that it had reduced its global greenhouse emissions by 9 million metric tons in just four years.

All of these are important developments, and they show how increasing numbers of leading companies see a clear business interest both in reducing their emissions and in helping to shape a climate-friendly future.

But the truth of the matter is that these companies are basically freelancing—as are the states that I have mentioned.  In the absence of a broader national strategy to address this problem, corporate executives and state officials are taking it upon themselves to act.  We should all applaud that and encourage them to do even more.  However, the global nature of the climate issue demands much broader action and a much broader strategy to bring about revolutionary change in the way we power our economy. 

Consider this: in order to stabilize the global climate, global emissions must eventually fall to well below their 1990 levels.  Depending upon whom you talk to, the figure ranges from 50 to 95 percent!  And this would have to be achieved by the end of the century.  And as I mentioned earlier, the UK already has a plan in place to reduce its emissions by 60 percent below 1990 levels by 2050.   Where is the U.S.?  As of 2000, we were 13.6 percent above 1990 levels, and we have no plan to reduce our emissions at all.

Clearly, individual states and a handful of companies cannot do this alone. 

So how do we move forward?  How do we create the impetus for broad, across-the-board reductions in emissions of greenhouse gases?  At the Pew Center, we recently developed something we are calling the “10-50 Solution.”  And, in case you were wondering, it is not a miracle household cleaner.  Rather, it is a new way of thinking about the problem of climate change—and how to solve it. 

By 10-50, we mean that we should be thinking ahead about where we want to be on this issue in 50 years (that’s the “50” part), and then identify the policies and strategies we can start pursuing in the next ten years and the decades to come so we can achieve our long-range goal. (That’s the “10” part.).  In this, I am reminded of Antoine de Saint-Exupery’s advice that, “As for the future, your task is not to foresee, but to enable it.”

Here is what we know.  First, we know that we need a low-carbon economy by mid-century.   Second, we know that it will take a new industrial revolution to get there, and that low-carbon energy technologies will play a critical role in that revolution.  And, third, we know that all signs indicate that we cannot and will not achieve a low-carbon economy if we continue on a “business-as-usual” path. 

I am not here to say exactly what the alternative, low-carbon path will look like or exactly where it will take us.  No one can say that.  Rather, I want to point out some of the issues or guidelines we need to be thinking about as we begin to chart that path and get going. 

I believe we need to be thinking about four major issues as we map our path to a low-carbon future.  The first of these is technology development—in other words, how to spark an energy technology revolution.

The 1990s saw the peak of an unprecedented technology boom in computer, information, and telecommunication technologies.  But we did not see this unprecedented technological change spread into the energy sector.  Despite more than a few optimistic predictions to the contrary, the energy sector continues on a conventional-technology trajectory – without many signs of substantial change. 

One reason for this is that there are fundamental market and policy forces that keep an energy technology revolution from happening.  Developing the technology to replace the existing and entrenched energy system will require massive investment.  But businesses continue to receive mixed signals from policy-makers about whether or not we are serious about getting on with the challenge.  So there is not sufficient incentive to place big bets on the development and diffusion of low-carbon energy technologies.

What’s more, the federal government spends even less than the private sector on energy-related RD&D, which is particularly disappointing when you consider the importance of energy to our economy and our national security—not to mention the implications of our energy use for the environment.   While there is some support for some breakthrough technology, most of the investment remains attached to carbon-intensive energy technologies.

The second issue we need to be thinking about as we look ahead to a low-carbon future has to do with what happens after we develop the technologies we need.  In other words, how do we ensure that new, climate-friendly technologies can enter the marketplace and compete?

Many people who concede that government has a role in fostering energy R&D simply stop there.  Once the technology is developed, they say, consumers will simply go out and buy it.  In fact, experience tells us differently. 

The fact that R&D alone will not get technologies into the market became clear to us through some of our work over the last few years.  This past year, we finished a report that looked at historical U.S. technology and innovation policies to see what lessons could be learned for addressing climate change.  One of the key insights from this report is that past government policies that go beyond R&D -- to promote downstream adoption of technologies and learning by doing -- have greatly influenced technological change.   This was true in the past, and is likely to be true in the future.  The bottom line is that we must have specific policies both to push and to pull these technologies into the market. 

You’ll notice that I said these technologies, which brings me to the third issue we need to pay attention to: There is no technological silver bullet solution to climate change. 

This problem is just too big for any single solution.  At a workshop we sponsored with the National Commission on Energy Policy last month on the 10-50 solution, we convened a group of experts and business leaders to look specifically at five technologies that are sure to play a prominent role in reducing the carbon intensity of our economy.  These are: energy efficiency technologies; hydrogen; carbon sequestration/coal gasification; advanced nuclear technologies; and renewables.  These five technologies are obviously very important, but I want to be clear today, as I was during our March workshop, that any future portfolio of low-carbon fuels and energy technologies will surely be broader than them.  For example, important fuels and groups of technologies—from coalbed methane to biofuels, ocean wave power, geothermal energy, nanotechnology, and biotechnology—may all have important roles to play in a future low-carbon energy mix.

So we have all of these technologies, and the fact remains that not one of them is likely to be deployed in the marketplace on the scale and in the time frame needed to address climate change without an explicit and unprecedented set of policies from government.  Our shared challenge will be to develop policies that are broad enough and neutral enough to provide incentives for a high level of innovation across the relevant energy, materials, and information technology industries.  At the same time, we need these policies to be targeted and specific enough to give promising technologies a start down the road toward significant deployment--and to do so without dampening the competitive ingenuity that is a driver of the most innovative economy in the world: ours. 

This brings me to the fourth and final issue we need to be thinking about as we try to respond in a decisive and effective way to the challenge of climate change.  Just as there is no technology silver bullet, there is no policy silver bullet for transitioning to a low-carbon future.  According to some people, all we need is a strong technology R&D policy; in other words, forget about adopting a mitigation policy.  Still others say a mitigation policy is all we need – and that even a small price signal will do the trick now and forever, amen. 

At the Pew Center, we think we need both a strong R&D and a strong mitigation policy, as well as some policies that we may not even know about yet.

The Pew Center has always been a strong advocate of an economy-wide cap-and-trade policy—in other words, a policy that sets targets for greenhouse gas emissions and allows companies the flexibility to trade emission credits in order to achieve their targets.  We still believe that a cap-and-trade system is an essential step in the “10-50” strategy. 

But we also believe that cap-and-trade by itself will not bring about the technological revolution that is necessary.  An aggressive RD&D program, government standards and codes, public infrastructure investments, public/private partnerships and government procurement all probably have some role to play.   What we need to do is refine what this portfolio of options should look like, and what the timing of each of the components should be.

So those are the four things we need to be thinking about: how to develop climate-friendly technologies; how to market them; how to ensure that we are looking broadly at the many technologies that can help while paying close attention to the most promising technologies; and how to arrive at a broad set of policies that will put this country on a track to real reductions in emissions.

In closing, let me say that it is clear from all of the work that the Pew Center is doing on this issue that we need vision.  We need spunk.  We need people like those of you at this conference to help us move the discussion of climate change away from the divisive debate over environmental vs. economic tradeoffs.  Instead, we need to focus on the concrete steps we can take—both in this decade and in the decades to come—to get a handle on this enormous problem.  Each of us has a role we can play:

· If you are a manufacturer, do you have a goal and a plan for reducing your emissions and energy use and, ultimately, adopting low-carbon sources of energy?

· If you are a real estate developer or architect, what are you doing to develop the prototype homes and office buildings of 2015 or 2025—structures that achieve new levels of energy efficiency and embrace climate-friendly technologies?

· If you are an engineer, to what extent are you engineering new processes and products that will deliver significant energy savings in the decades to come?  Are you engineering the systems that will help us deliver on the promise of new low-carbon energy technologies?

· And, last but not least, if you are a government official, what policies can you put forward that will help your community or your state couple a long-term vision with short-term action to address this issue?

And don’t let me forget one other important category of people: citizens.  In this year of presidential and congressional elections, as well as elections at the state and local levels, all of us, as citizens, need to be engaged on this issue. 

Recent history shows us that our government, whether it is in Democratic or Republican hands, has a very hard time dealing with the issue of climate change in an effective way.  There are a lot of interests lined up on the side of doing nothing.  But the number of people at this conference, and all the great work that you are doing to solve environmental problems, suggests to me that our side can be just as strong—and stronger.

Thank you very much.