Climate Change: The Political Challenges

CLIMATE CHANGE: THE POLITICAL CHALLENGES

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

Stanford University Sustainability Days Conference

October 15, 2004

Thank you Jim for that very kind introduction.  Let me begin by thanking the organizers of this conference.  As most of you did, I watched the presidential debates, and I want to tell you how pleased I am that you did not install any blinking-light system on this podium that might force me to babble on and keep repeating myself to fill my allotted time.  

I am going to talk about the politics of climate change—and, more specifically, about the continuing political struggle over this issue.  But I also want to suggest a way to begin to resolve this struggle by taking a fresh look and by framing an agenda that can attract broad support.

But first the struggle itself.  At the core, I believe it is a struggle between the old and the new, between those who want to put off taking action for as long as possible and those who believe we need to act decisively - now.   It is, in essence, a struggle between the past and the future. 

But unlike others of this kind, I believe the climate struggle is unique because the stakes are enormously high.  Here we are talking about what kind of world we leave for future generations, and whether we can avoid environmental impacts that could potentially be catastrophic.  It is a struggle in which we must succeed, and to do so we face the political challenge of finding solutions that can receive the backing of many of the people who are currently on the side of the past. 

As I see it, the opponents of action on climate change fall into two camps.  In one camp are the ideologues.  These are people with a knee-jerk negative reaction to any kind of environmental regulation—or, for that matter, any kind of government regulation.  They are also people who never met an international treaty or institution that they felt was worthy of U.S. support – apart, perhaps, from the International House of Pancakes.  Getting this group to support U.S. action on climate change and/or U.S. participation in any kind of national or global response to this issue is, in short, a lost cause.

More promising are those in the other camp of climate holdouts – the people who perceive that their economic or political interests would be threatened if we were to address this issue in a substantive way.  This camp includes representatives of what I like to call “old industry”—companies and industry sectors whose profits are wrapped up in the status quo.  Both of these groups also include elected leaders—whether in the White House or in Congress—who receive support from them or who are them.   

In the political struggle over climate change, these two camps are up against a group that believes we need to take this issue seriously and move forward.  Many in this group are alarmed about the science and the implications of a warming world, but also perceive real opportunities—both for individual companies and for our nation as a whole—in developing, selling, and using the new technologies that will protect the global climate. 

Past vs. future.  Status quo vs. change.  Profits today vs. new opportunities and a safer world in the days and years to come. 

Where does this struggle stand today?  Well, in the United States at least, the do-nothing crowd have had several historic victories.   The first of these occurred in 1997, when a group of U.S. business interests determined that the international climate negotiations were a threat to their livelihoods and profits. 

It was a time when the nations of the world were entering a final phase in their negotiations over an agreement to limit worldwide greenhouse gas emissions.  And these businesses did not like it one bit. So what did they do?  They launched an enormous advertising campaign, as well as an intense lobbying effort on Capitol Hill.  And, in June 1997, their efforts bore fruit in the form of a Senate resolution known as Byrd-Hagel, a resolution that passed by 95 to 0.  This resolution stated that the United States should not agree to any binding commitments to reduce emissions unless developing countries also agreed to specific commitments, nor should it agree to anything that might harm the economy of the United States.

Obviously, this was a shot across the bow as the United States prepared to participate in the international negotiations that year in Kyoto, Japan.  And, even though the Clinton administration went ahead and negotiated and signed the Kyoto Protocol, the White House never submitted it to the Senate for ratification. In fact, they barely discussed it. Why not? 

Because the Protocol excluded developing nations from any new commitments, and because the Administration could not make a convincing case that there would be no serious economic harm to the United States.  But electoral politics also reinforced this view.  The Clinton Administration did not oppose Byrd-Hagel, and did not work with Congress to garner any support for what it had negotiated.  Negotiating and signing Kyoto was simply a gesture without meaning, a way to show that the difficulties the U.S. experienced in  Rio would not be repeated.  A way to say we did something without really doing anything.  And a way, perhaps, to get elected.

At the same time that the events I have just described were playing out at the national and international levels, a number of brave U.S. business leaders were coming together to acknowledge that, yes, climate change is a problem and that it is in the United States’ interest to do something about it. 

When the Pew Center on Global Climate Change initially announced the formation of our Business Environmental Leadership Council, the council had 13 members.  Today, we have 38.  This is a group that includes everyone from Alcoa, BP and DuPont to IBM, Pacific Gas & Electric and Toyota.  And it has served as an effective foil to the notion that business is universally opposed to forward progress on this issue. 

In the year 2000, the struggle between the forces of change and the forces of the status quo appeared to reach a turning point.  During his run for President that year, then-Governor George W. Bush actually pledged to impose the first-ever restrictions on carbon dioxide emissions in the United States. 

This commitment was not made, as you might expect, in response to the demands of environmentalists but in response to industry.  A group of major power companies had come up with the idea that they would agree to CO2 restrictions if the government would provide some certainty in its regulation of three air pollutants: sulfur dioxide, nitrogen oxides and mercury. 

However, as the President put it when discussing his opponent in the current election about another issue, he was in favor of this idea before he was against it. 

Not long after the inauguration in January 2001, the President reneged on his campaign pledge to regulate carbon dioxide emissions.  For good measure, the Administration also unceremoniously noted that the United States was withdrawing from the Kyoto process.  According to the White House statement, the treaty was dead. 

Why did the President do this?  Well, by now it’s obvious that he was choosing sides in the struggle between the past and the future.  And he was siding with the past.  He was listening to the ideologues and the representatives of old industry, many of whom had supported him in his campaign for the Presidency. 

Ask anyone in this administration for an honest opinion on the issue, and they will tell you that restrictions on carbon emissions in this country are inevitable.  But the goal of the White House and its allies is to put off that day for as long as it is politically possible to do so. 

And so the struggle continues.  But in the wake of the White House decisions on CO2 and Kyoto—and, in many instances, because of these decisions—the side of the struggle calling for change and substantive action has become stronger. 

At the international level, for example, where the Bush administration’s rejection of Kyoto was seen as a real slap in the face, countries rallied around the Protocol in an act of defiance.  And today you have 120 countries signed onto the agreement; its entry into force awaits Russia’s ratification, which is now likely before the end of the year. 

Kyoto may not amount to much in terms of achieving significant reductions in global emissions, but it sends the clearest signal yet that much of the world is on the side of doing something about this problem.  Much of the world, with the notable exception of the United States, is on the side of the future. 

So you have the European Union adopting a carbon dioxide emission trading program.  And you have British Prime Minister Tony Blair showing enormous political will both in putting forward a serious plan to substantially reduce emissions, and in his insistence that climate change will be one of two “big” issues that he hopes to address as the Chair of the G-8 process and the European Union in 2005.   

And it is not just internationally where the advocates of real action are achieving progress in this struggle.  In the United States Senate, we have a bipartisan core of elected leaders who are committed to climate solutions.    

The energy bill passed by the Senate in 2002 and again in 2003 would have established a national climate change strategy and required the largest greenhouse gas emitters to disclose their emissions.  The Senate’s 2002 farm bill, meanwhile, would have  compensated farmers for sequestering carbon.  And, perhaps most importantly, in October 2003, 44 Senators supported the Lieberman-McCain bill, legislation that would for the first time establish modest but binding targets for reducing U.S. greenhouse gas emissions.  This is bipartisan legislation, the first bill to be voted on that would actually reduce greenhouse gas emissions, and its support by a significant number of senators marks an important milestone in this nation’s awakening to the problem of climate change. 

Unfortunately, it takes both chambers of Congress to enact a law, and the House of Representatives is still stuck in the past.  However, even there we are beginning to see some activity: a House companion to Lieberman-McCain, was introduced recently and it currently has 81 cosponsors, 12 of whom are Republicans.

Looking outside of Washington, we see that the forces of change have found new allies in this struggle in state capitals around the country.  Particularly in coastal states, policymakers are justifiably concerned about the toll of climate change on their economies.  Western states are concerned about the prospects of worsening drought.  And, many states plainly see economic opportunities in efforts to address climate change: by producing and selling alternative fuels, becoming exporters of renewable energy, attracting high-tech businesses, or even selling carbon emission reduction credits.

What are states doing to address climate change?  Well, right here in California, your governor recently endorsed proposed regulations requiring a 30-percent reduction in carbon dioxide emissions from motor vehicles sold in the state by 2015.  If the California initiative moves forward—and, survives almost certain legal challenges, I see no reason to think it will not—it promises to pave the way for action by other states.  And, I was pleased to hear that your governor and the governors of Washington and Oregon are discussing additional measures to limit ghg emissions regionally and cost-effectively.

In the Northeast, 9 governors, led by New York Governor George Pataki, are developing a multi-state regional “cap-and-trade” initiative aimed at reducing carbon dioxide emissions from power plants.    This effort is proceeding well, and we expect them to complete their work, as planned by April of next year, with agreement on a model rule. 
 
These 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.  California’s emissions, for example, exceed those of Brazil.  Ohio’s emissions exceed those of Turkey and Taiwan, and emissions in Illinois exceed those from The Netherlands. 

The struggle between the past and the present is being played out in the businesses community as well.   Many of the companies we work with at the Pew Center are adopting voluntary targets for reducing their greenhouse gas emissions. Consider Dupont, which set a target to reduce its emissions 65 percent below 1990 levels before 2010, and by 2002 had actually reduced their emissions by a stunning 67 percent. I could tell you (but I won’t) about how a lot of other companies are doing similar things.  But I will tell you this – all the companies cite one important motivation for taking on a target - to improve their competitive position in the marketplace.  The bottom line is that increasing numbers of business leaders understand that climate change is a problem, and they are committing their companies to real solutions—even in the absence of U.S. policies. 

What else motivates these companies?  Well, for one thing, many of them are multinational companies.  They have operations in countries that are party to the Kyoto Protocol and that are implementing new regulations and new policies to limit greenhouse gas emissions.  Some may be reluctant to come out in support of tougher policies and regulations in the United States, but these companies understand the science, they see that regulation is inevitable, and in many cases they view the drive for climate solutions as a business opportunity.   

But, of course, voluntary action by selected companies is not enough.  Nor will a state-by-state approach alone get us to where we need to be.  And while a lot of countries are indeed moving forward, the Kyoto Protocol is a baby step at best.  This is where we  stand today.  The past meets the future.  The forces for change are fighting a good fight and gaining ground, but it is clearly not enough.  

This suggests to me that we need to approach this issue in a new way.  We need to confront the political challenges we face head-on, with facts and figures, and, most importantly, with an agenda that can gain broader support. 

I would propose that, in both our global and our national efforts, we need four distinct and complementary approaches. 

The first is one with which we are already familiar: targets and trading.  This is one thing the framers of the Kyoto Protocol got right, ironically at the insistence of the U.S.  By harnessing the power of markets, we can reduce emissions more effectively and more affordably.  Inspired by Kyoto, the European Union is on the verge of launching the broadest emissions trading system ever established. 

It will likely be some time before we establish an economy-wide cap-and-trade system here in the United States—the politics simply aren’t yet ripe.  But what might be possible is a series of interlinked trading systems – the east coast with Europe and perhaps with Canada and the west coast as well. Such a “bottom-up” system could be robust enough both to achieve some environmental benefit and keep costs down.  And it would be a valuable learning experience for both sides on this issue, hopefully one that would show that taking action on this issue is both practical and affordable. 

Secondly, I think it is critical that we begin to think in terms of key sectors.  Both globally and nationally, two of the largest and fastest-growing sources of emissions are transportation and power.  And it is in these sectors that we have many of those who would like to put off action as long as possible.  Let’s look first at transportation.  The automobile industry is global, and it is highly concentrated.  The 10 largest manufacturers account for 74% percent of the global market.  The vast majority of cars are produced – and used – in a relatively small number of countries.  Major fuel producers are also relatively small in number. 

What if we could get all these key players in a room to agree on a pathway toward a goal of zero emissions from autos in 30-50 years, with some clear milestones along the way?  This is not a proposal to dictate specific technologies – each major manufacturer seems to be going down a different technology path – but a way to set globally consistent performance standards with an end-result that we need if we are to be successful in out effort to address climate change. And at the same time, we could launch an intensive public-private R&D program to help deliver the technologies that will make it possible. 

No, it wouldn’t be easy, and it will be opposed by many who would argue that it is simply too hard.  But is it easier, or smarter, to tackle the problem nation by nation, or state by state? At the moment, there are different auto efficiency or CO2 emission standards or goals in the United States, Canada, Europe, Australia, Japan, China, Korea, and Taiwan.  We also have the proposal from California that, if it goes into effect, will doubtless be followed by other states.  Added to that we have $52 per barrel of oil.  I wonder if the time isn’t close for the private sector to decide that a rational, long-term effort, in which they are “at the table” and can help set the milestones, might not be better than the alternative.  

The power sector, equally important, is very different.  Power supplies are much more distributed -- there are hundreds, if not thousands of players (far too many to put into a room, let alone around a table), and there are many different ways to generate power.  So here we might focus on selected energy sources, the most important of which, both politically and in terms of emissions contribution, is coal.  There is no denying that coal will figure heavily in our energy future.  It is globally available and it is cheap.  Virtually all the new power plants being planned here in the United States will burn coal.  China is projected to add as much as 300 gigawatts of generating capacity over the next 10 years, nearly all of it coal. 

How then do we continue to provide power but minimize the impact on the climate?  How do we shift investment away from traditional coal plants to newer technologies that will be compatible with the efforts underway to capture CO2 emissions and sequester them deep in the ground? Here, too, I think we need a combination: a global R&D effort, and a clear set of mandates to pull new and better technologies into the market.  Many in the coal industry are beginning to see the need for a more proactive strategy, and if they can be assured a place in the future, they may begin to give up the technologies of the past.  

A third kind of strategy we need is one that integrates climate and development.  We cannot expect developing countries to become full partners in the climate effort if it continues to be seen as a purely environmental issue, a constraint on economic growth and development.  Frankly, this is true in developed countries as well.  We need policies that speak both to climate and to core development priorities.  The place to start, I would suggest, is with national energy policies.  Each nation needs to accept that climate change must be one of the drivers of energy policy. 

Here, I think the British are way ahead of most of the rest of the world.  For them, energy policy has three drivers: security of supply, price and climate change, and they have developed an energy blueprint for a 50 year time period that attempts to accommodate all three.  There is no reason why other countries cannot also move forward in this way, and should they do so, I believe we will  begin to see a genuine effort to limit emissions while meeting the energy needs of a growing global economy. 

Finally, because some degree of climate change is now unavoidable, responsible climate policy must also help us to adapt. Climate change is happening, and it is going to accelerate in the years ahead, no matter what we do.  We can minimize its effects, but at the same time we will need to adapt.  Taking a proactive approach is necessary for minimizing future costs. That includes thinking about everything from development patterns and zoning to water systems in a new way.    It is not too soon for governments at all levels and the private sector to begin incorporating climate change risks into everyday investment decisions.   
   
The bottom line is that climate change is not simply an environmental issue; it is fundamentally an issue of economics and development.  And this is why I believe we must succeed in marrying the old and the new:  because we need both sides to succeed.  Those that now perceive that their economic or political interests are threatened are the ones that can ultimately drive this issue, once they see that their interests will also be served by shaping and implementing climate solutions.

But how do we manage this?  To build the coalitions we need, we will have to depend on  a variety of factors: public awareness, media attention, elections, and even the weather.  But we will also have to create approaches that can attract broad constituencies, that can invite people, businesses, governments – everybody – to play a part in this effort, and that can treat everyone fairly and with respect.  And, finally and most importantly, we will need strong political leadership to pull it off. 
 
Are we there yet?  No, but I believe we are making some headway.  Some political leaders are beginning to emerge on this issue, and there is great experimentation with different policy approaches.  We will get closer still as people begin to understand that this is about more than climatology and atmospheric levels of CO2.  This is about all of us, and the choices we make:  the cars we drive, the representatives we elect.  It is a about the future we choose, and the legacy we leave to our children and grandchildren.  Choose well. 

And thank you very much.