Climate Change: Renewing U.S. Leadership in Challenging Times

Speech delivered to the 2009 Camden Conference

Watch a video of the speech.

Camden, Maine
February 21, 2009

Thank you very much.  It is a pleasure to be here in Maine, and I am honored to be a part of the program for the 22nd annual Camden Conference. 

I usually like to begin my remarks with a bit of humor. But quite frankly, there’s nothing funny about today’s news. And this is certainly true when it comes to climate change. New scientific findings are coming out every day about the risks of global warming.  For example, just yesterday scientists confirmed that M&Ms now melt in your hand, not your mouth.

In all seriousness, I want to commend the organizers of this conference for putting together such a stimulating program.   My role this afternoon is to talk about climate change – and more specifically, I want to talk about the need for renewed leadership on the part of the United States in addressing this global problem. 

The fact is that the world has been waiting for the U.S. to lead on this issue.  Not only is our nation the largest economy in the world but we produce fully one-fourth of global emissions of carbon dioxide, the principal greenhouse gas that is causing climate change.  Without our active involvement, there is little chance of arriving at an effective international agreement to reduce emissions of these gases worldwide. 

So the real questions are: What can the U.S. do to exert the kind of leadership that is both wanted and needed on this issue?  What are the opportunities for U.S. leadership?  And what are the challenges we face as we try to step up to this leadership role? 

Let me begin by saying clearly, and up front, that I do not believe the United States can play a productive role in addressing this issue, and in influencing the international negotiations, unless we first do some important work here at home.  I will spend some time talking about that today.  But first, I want to provide a little history on the international negotiations; and reflect briefly on the science of climate change and why swift action is necessary.  Then I want to talk about the parameters and possibilities for U.S. domestic action; the challenges for the world in moving forward and the role the U.S. could play in catalyzing and supporting that movement; and end with some red herrings that I believe we must cast aside as we strive to reach agreement on a forward path.

INTERNATIONAL – A BRIEF HISTORY
So first a little history … because in order to understand where the world is right now in its response to climate change, it is important to look back briefly at where we’ve been. 

Back in 1992, the United States and other nations gathered in Rio to sign the United Nations Framework Convention on Climate Change.  This agreement, signed by President George H.W. Bush and ratified by the U.S. Senate, established a voluntary goal for developed countries, all of whom agreed to reduce their greenhouse gas emissions to 1990 levels by the year 2000.  An important principle of the agreement was that the developed world has a special responsibility for reducing its emissions first. 

But within a few years of the Rio meeting, it became clear that not all developed countries would meet their voluntary targets – and even if they could, it would not be sufficient to meet what the science demanded.  It was time to consider mandatory targets, while allowing countries some flexibility in how to meet them. 

And so the United States (under President Bill Clinton) joined other countries in Kyoto, Japan to negotiate the Kyoto Protocol in 1997.  But Kyoto was never submitted to the Senate for ratification.  And upon taking office, President George W. Bush officially rejected the Protocol citing concerns about its economic impact, and about the lack of commitments on the part of economic competitors like India and China.  

But even without the United States involved, other nations engaged in a great deal of additional work and negotiations that resulted in the Protocol going into effect in February 2005.  Kyoto requires the developed nations participating in the agreement to reduce their emissions of greenhouse gases by an average of 5 percent below 1990 levels by the year 2012. 

Today, we are fast approaching that 2012 deadline, and there will be decidedly mixed results.  Some developed countries will fall short of their targets.  Many developing countries, meanwhile, have seen their emissions grow much faster than predicted due to rapid industrialization.   And the United States, not a party to the Kyoto Protocol, has seen its emissions rise to approximately 15% above 1990 levels.  As the world works toward an international agreement to go beyond 2012, important priorities will be to ensure that the United States is fully engaged; that the commitments agreed can actually be met; and that developing countries with high levels of emissions take on commitments to curb their emissions. 
In anticipation of new U.S. leadership, governments in December agreed to enter into “full negotiating mode” on a new agreement.  Their aim: having a comprehensive climate pact ready to sign at the next climate talks late this year in Copenhagen.  Whether this is possible is a very open question, as I will discuss later in my remarks.  There are still many major issues to address, and many questions that need to be answered.  But there is no denying that we have reached a critical juncture in the international effort to address this issue – and that we need to take advantage of the current political moment to bring an effective global agreement within reach. 

A CRITICAL JUNCTURE
Which brings me to the question of why.  Why is it so important and so urgent that the nations of the world come together on this issue right now?    Briefly, the science has developed to a point where there is no longer any doubt that climate change is real, impacts are already being felt across the globe, and there is a strong sense in the scientific community that further delay risks catastrophe.    The Nobel Prize-winning Intergovernmental Panel on Climate Change has said that the warming of the climate system is – I quote – “unequivocal.” This group of hundreds of scientists from throughout the world represents the most comprehensive source of science-based information on climate change. Its 2007 report projected that global average temperature will increase between 2.0 and 11.5 degrees Fahrenheit by 2100.  Sea levels will rise by a foot to a foot-and-a-half or more.  Many species will be lost.  In addition, the IPCC said there is a 90-percent chance or greater that the world will see more hot extremes, heat waves and heavy precipitation events.  And it is likely we will see both more droughts and an increase in the intensity of tropical cyclones. 

And here’s the truly frightening part: in just the two years since the IPCC issued that report, it has become increasingly clear that the impacts of climate change are happening much sooner than scientists had projected.  There is growing concern among scientists that the 2007 IPCC estimates understate the potential level and pace of climate change. Last September, for instance, a team of American glaciologists estimated that sea level would rise by roughly three to six feet. 

Importantly, instead of experiencing gradual climate shifts, many of the changes are likely to happen in fits and starts that will give the world far less time to adapt. Three feet of sea level rise occurring over the span of a century may sound somewhat manageable, at least for a rich country like the United States. But what if the bulk of this rise occurs in one or two rapid pulses?  And what if we experience six feet rather than three?  In a recent interview, Robert Bindschadler, chief scientist at NASA’s Hydrospheric and Biospheric Sciences Laboratory, noted that the massive Pine Island Glacier in West Antarctica is sliding into the sea at the astonishing rate of more than two miles a year.   Should Pine Island and a neighboring glacier continue to flow rapidly into the Southern Ocean, Bindschadler said they will be a major contributor to a global sea-level rise of as much as six feet this century. 

And from the South Pole let’s go north to the Arctic, where summer sea ice reached its second lowest point ever observed last year.  The dramatic decline in ice coverage in the Arctic Ocean has stunned scientists, who had not expected to see this level of ice loss for decades.  But these sorts of changes are happening right now, they are happening faster than anyone predicted, and they are creating their own feedback loops that could make the problem even worse.  Consider, for example , what happens when we lose snow and ice cover in the Arctic.  That ice cover, which at one time reflected sunlight back into space, is replaced by open water and bare soil that absorb the sunlight and convert it to heat – amplifying global warming. And consider what happens when warming causes frozen Arctic soils, or permafrost, to thaw out. Those soils contain roughly twice as much carbon as currently exists in the atmosphere. As the soils thaw, they will release more greenhouse gases into the atmosphere, which will increase the rate and degree of warming.

These kinds of things are not fully accounted for in the climate models that scientists have used – not because anyone is trying to skirt the issue but because feedback mechanisms like these are hard to account for, hard to predict.  But more and more scientists are saying they are very real, and that we need to accept the fact that climate change could be much worse – and it could happen at a much faster rate -- than we were thinking just a couple of years ago. 

The bottom line is that we have no choice but to take action on this issue.  This is a global problem – and every country that is contributing to the problem needs to play a part in the solution.

U.S. ACTION ESSENTIAL
But the fact remains that U.S. leadership is essential.  However, the United States cannot lead effectively until we make it absolutely clear that we are willing to take on this issue and reduce our emissions right here at home.  Only then will we have the credibility, the respect and the influence we need to make this a global priority.  

Taking on this issue at home, in my view, means taking action on three priorities – we could call them three legs of the stool that represent effective U.S. action.  The first leg is investment in clean energy and other climate-friendly technologies.  The economic stimulus package signed by President Obama this week includes $70 billion for everything from smart-grid technologies to renewable energy development to energy efficiency improvements and mass transit.  This funding represented a relatively small share of the overall stimulus, but it is a start – a down payment on building the green energy infrastructure that we need to keep our economy strong for decades to come.

The second leg of the stool is energy policy.  Beyond what is in the stimulus, we need wide-ranging policies to drive private and public investment in new, cleaner energy technologies that can help us address climate change and limit our dependence on foreign energy supplies. We need to do more to promote conservation and efficiency.  And we need to do whatever we can to make use of existing cleaner, greener technologies, whether that’s  mounting a crash effort to demonstrate carbon capture and sequestration for coal-burning power plants, or expanding our supplies of wind energy.  All of this has to be a part of our energy policy looking forward – an energy policy that seeks to meet present and future energy needs while achieving real reductions in carbon emissions. 

And then there is the third leg of the stool: cap and trade.  We need to put a price on carbon in this country in a way that provides industry with the flexibility to reduce emissions as cost-effectively as possible, but that also provides certainty that we will achieve the level of economy-wide reductions that are needed.  This is what cap and trade does – it sets a cap on overall emissions and allows industry to trade emission allowances to meet the cap at the lowest cost.  In addition to providing both environmental certainty and flexibility for industry, cap and trade also can become a source of revenues for new investment in clean energy – through the auctioning of emission allowances. 

Investment in clean energy.  An energy policy that helps America build a 21st century energy economy.  And cap and trade.  These are the three legs of the stool that represent strong domestic action on climate change in the United States.  And I am pleased to say that many in Washington now appear to understand what needs to happen. 

In one of his first major policy statements after the election, President Obama reaffirmed his commitment to achieving substantial reductions in U.S. emissions of greenhouse gases.   The President also pledged to enact a cap-and-trade law as the primary means for reducing U.S. emissions.  And he has since that time appointed an environment and energy team with tremendous expertise and commitment to climate action – and fortunately for them, no unpaid tax liabilities.

And the fact is, President Obama is not waiting to act on this issue.  Within his first week in office, the President directed the EPA to reconsider a long-stalled waiver for California and 13 other states to begin regulating greenhouse gas emissions from cars and trucks.  And climate and energy issues are high on the agenda for Secretary of State Hillary Clinton’s visit to Asia this week.

The signs from Congress are equally encouraging.  The Democratic leadership is made up of some of Capitol Hill’s staunchest advocates of climate action, and key Republicans like Sen. John McCain are continuing to work on the climate issue as well.  Earlier this month, Senator Barbara Boxer issued guiding principles for climate legislation. In the House, Chairman Henry Waxman has pledged to report a bill out of the Energy and Commerce Committee by Memorial Day. 

An important reason why Washington is moving forward so quickly on these issues, I believe, is because of support in the business community.  Even in the middle of a severe economic downturn, 25 of America’s top business leaders are standing firm in their support for climate solutions.  And they have come together with 5 key NGOs including the Pew Center under the auspices of an organization called the U.S. Climate Action Partnership (or USCAP). 

Just days before President Obama’s inauguration, this unique coalition released a detailed plan to achieve steep reductions in U.S. emissions in an economically sustainable manner.  I encourage you to visit the website, www.us-cap.org for more information on USCAP’s Blueprint for Legislative Action. 

The bottom line is that the combination of business leadership and strong support for action in the White House and Congress means the chances of real action on climate and energy issues in the months ahead are very good.  And that bodes well for active U.S. engagement and leadership in the international climate talks.

CHALLENGES TO REACHING A POST-2012 AGREEMENT
But, of course, simply showing up at the table as the world tries to hash out an international agreement, even with a strong commitment and perhaps even a legislative mandate, is not enough.  We need to come to the table with a commitment to resolving the key challenges standing in the way of an effective global agreement.   And I want to use this portion of my remarks to very briefly address four of those challenges:

The first is how we decide on comparability of emission targets for developed countries. In the United States, President Obama has called for a domestic cap-and-trade system with the mid-term goal of reducing U.S. emissions to 1990 levels by 2020. The EU, by contrast, has set a goal of reducing emissions to 20 percent below 1990 levels over the same period.

Now, at first glance, the EU target and the one proposed by President Obama appear very much at odds.  Circumstances, however, have changed considerably since 1990. U.S. population has grown 19 percent, for instance, while Europe’s has held steady. And U.S. emissions have grown, while those of the EU have declined.  For the United States, a target of 20 percent below 1990 levels would translate into a reduction of almost 35 percent from current levels. 

Measured against a more recent baseline, the EU target and the one proposed by President Obama appear considerably more comparable – each would reduce emissions roughly 15 percent below 2005 levels.

Negotiating comparable targets isn’t simply a matter of setting one country’s number beside another’s.  Rather, it requires a clear-headed assessment by all parties of factors like population trends, emissions in relation to GDP, marginal costs of abatement, and more.  Agreement on a quantified formula to determine respective targets for developed countries seems unlikely. Rather, targets will likely be determined through a political negotiation in which parties take factors such as these into account.  It is important that this issue be approached pragmatically, and with an eye toward settling on targets that, with significant effort, can actually be achieved.  

The second challenge to a new, post-2012 agreement is the type and level of commitments made by developing countries.  There are many, particularly in the United States, who argue that the major emitters in the developing world must agree to absolute reduction targets.   But this is impractical, unrealistic and unfair given the rapid industrialization and increasing energy demand in much of the developing world. This is not to suggest that we do not need more ambitious action than we have seen to date from this group of countries, nor is it to suggest that we do not need commitments of some sort.  Rather, we believe that any new international agreement should include not targets but policy-based commitments for developing countries.  These would be commitments to implement nationally defined policies – such as energy efficiency standards, renewable energy targets, sustainable forestry plans, and other sectoral policies.  Whatever form these commitments take, what’s essential is that they be measurable, reportable, and verifiable.  And they must – they must -- put us on the path to stopping and reversing the growth in global emissions.

A third challenge to a new agreement?  Managing expectations.  With President Obama in office, sending all these positive signals about his commitment to climate solutions, and with other countries literally champing at the bit to see progress in the global talks after so many years of dashed hopes and delay, there is an understandable optimism in the world that this might be the year when we accomplish something remarkable – and something big. 

It could well be, but I believe we need to be realistic in our expectations for the conference in Copenhagen in December.  Considering the range of issues that need to be resolved, the Pew Center believes the Copenhagen conference should be considered a major success if it produces a strong interim agreement that puts a full, final and ratifiable treaty within reach. Such an agreement would establish the basic architecture of a post-2012 framework; indicate the range of emission reductions and the level of support that developed countries are prepared to commit to; and initiate a process to determine the specific actions that developing countries will undertake.
 
Next, the fourth and final major challenge: show me the money.  This is, in fact, the most difficult of all of the challenges I have mentioned, and the one that poses the greatest risk to serious international action on climate change.  We can talk all we want about the need for technology and new investments in developing countries’ capacity to reduce emissions and adapt to climate change … but the money has to come from somewhere.  And, right now, given the state of the global economy, as well as the increasing portion of public monies dedicated to economic stimulus in the United States and many other countries, it is hard to see from whence these funds shall come.

Most people who have looked at the financing issues involved in responding to climate change agree that the majority of investment for mitigation will come from private flows – and a lot of these private flows will come from the creation of greenhouse gas markets. But we cannot deny that additional public monies will be needed to supplement private flows for mitigation and to address the adaptation question.  To date, the level of public funding for this work has been modest and unpredictable – the result of voluntary pledges by donor countries. 

Developing countries have been clear that their ability to be more ambitious and agree to verifiable commitments is dependent upon adequate and predictable funding.  Whether the developed world, in 2009, will be able or willing to agree to mechanisms for providing that funding, or for specific financial commitment levels is unclear at best.    And so money is “the” major challenge we will face as we move into serious negotiations on a post-2012 global agreement.  

RED HERRINGS
From challenges, I want to move briefly to red herrings.  Because as important as it is to address the key challenges I have mentioned, achieving an effective international agreement on climate change also requires us to navigate past the shoals that get us stuck in roundabout and unproductive conversations. 

The first of these is what I will call the competitiveness question.  How often have we heard that addressing climate change will threaten U.S. competitiveness, and cause our economy to crater?  But the fact of the matter, as I have said, is that responding to climate change in a serious way, coupled with an equally serious effort to transform how we produce and use energy, can, if we do it right, provide a significant and lasting boost to the U.S. economy.  I honestly believe that the nations that figure out how to do this will be leaders in the global economy of the 21st century. 

Will some industries be put at competitive risk?  Yes.  Most at risk will be those energy-intensive industries that manufacture globally traded commodities.    This makes it even more important that we work toward a new multilateral agreement that establishes verifiable commitments for all major economies, perhaps with some sectoral agreements that cover those sectors where competition is an issue. 

The good news is competitiveness impacts are likely to be both modest and manageable. Recent findings suggest that at a price of $15 per ton of carbon dioxide there is not likely to be a significant competitiveness impact on U.S. manufacturing as a whole. In fact, carbon-intensive industries that could be negatively impacted by a cost on emissions account for 3 percent of U.S. economic output and less than 2 percent of employment. While a limited number of energy-intensive and trade-exposed industries may face competitive pressures, these modest impacts can be alleviated with emissions allowance revenue generated from a cap-and-trade program instead of, or until, we are able to negotiate global sectoral agreements.   

Next up on the red herring list is the question of fairness as it relates to commitments for developed vs. developing countries.  As I have said, the Pew Center strongly supports efforts to secure real, verifiable policy commitments from developing countries like China and India.  It is important for all major emitting countries to contribute to the global effort to reduce emissions; without all the major emitting countries we cannot make a dent in this problem, let alone solve it.

However, U.S. opponents of serious climate action regularly argue that it’s just not fair to subject our industries and our economy to new regulations when our competitors in China and India get off either scot-free, or with lesser requirements.  But what is fair?  Is it fair that developed countries are, in fact, developed because we have been able to produce these greenhouse gases at will for decades – and now we are saying that developing countries should not be able to follow our lead and improve their standards of living?  Is it fair that we produce more than 4 times the per capita greenhouse gas emissions of China, and more than 10 times the per capita emissions of India?   

The question of fairness has in many respects become a delaying tactic in the debate on climate change.  And it is used on both sides – by developed and developing countries alike.  As the world looks ahead to the Copenhagen meeting and a new international agreement, it is going to be crucial to respond decisively to unsubstantiated claims of unfairness.  We need to remind people that fairness (or unfairness) is in the eye of the beholder, and that the fairest thing is to design a framework that secures verifiable commitments from all major emitting countries to do their part to address this global problem.

The third and final red herring I want to bring up touches on a question that you hear more and more these days from people who otherwise seem perfectly knowledgeable and reasonable.  They ask, “If climate change is already under way and we’re already locked into some of this, then why not just focus on adaptation?  Why go to all of this trouble trying to reduce the risk through reducing emissions?”

The answer is because if we act now to reduce emissions, we have the capacity to dramatically reduce the level of climate change that the world will see in the decades to come.   And we therefore can reduce the ultimate costs of adapting to climate change.  This isn’t just coming from me; this is the consensus of the world’s scientific community.  Adaptation is crucial, yes.  We have already bought a significant amount of climate change, and despite our best efforts to reduce and limit emissions, we will be buying even more.  But an adaptation-only approach runs the unacceptable risk of creating a situation where climate change becomes unmanageable, where the impacts are catastrophic, where the costs to adapt are enormous, and where the costs to then begin undertaking efforts to reduce emissions are more costly still.  In the same way, an approach that says we should concentrate our resources on mitigation ignores the fact that many developing nations already are dealing with adverse impacts from climate change – and they will only join in a global response to the extent that they see a commitment from all nations to support efforts to deal with the consequences of climate change.

There are also those who hold out hope for a geo-engineering solution to climate change.  Such a solution, they say, would allow us to continue to produce emissions on a business-as-usual basis – and these emissions would somehow magically disappear into the ether.  It sounds great, and while ultimately geo-engineering may indeed be part of the solution, it is by no means a substitute for strong action now. So while I favor continued funding for research into this area - we cannot wait to take serious action in hopes of a geo-miracle.

WE CAN, WE MUST
I have talked this afternoon about a number of red herrings we need to get past, and a number of challenges we need to meet, in order to achieve an international agreement that effectively addresses the climate problem.   Add to these the fact that we are facing a global recession the likes of which we haven’t seen in decades, and it would be easy to give up hope that the world can finally chart a productive path forward on this issue. 

But in challenge lies opportunity.  And we have an opportunity, right now, to begin building a stronger economy and a better, safer world.  All of you are familiar with Tom Friedman, the New York Times columnist.  Well, Tom has made the intersection where climate change, energy security and economic growth come together the focus of his latest book, Hot, Flat and Crowded.  And here is what he says in that book:

“The ability to develop clean power and energy-efficient technologies is going to become the defining measure of a country’s economic standing, environmental health, economic security and national security over the next 50 years.”  (end quote)

At the Pew Center, we could not agree more.  And, while some may try to use the current economic situation to obfuscate and delay on the climate issue, I do not believe they will succeed. 

Yes, it may be a challenge getting some people to pay attention to this issue in today’s economic climate. But the bottom line is we have to.  We don’t have any other choice.  And to the extent that we can make the connection between protecting the climate, decreasing our nation’s dependence on foreign energy supplies, and advancing the U.S. economy, I believe we will be successful.  And we can then rightfully assume our leadership role in the global effort to reduce the threat to all nations from climate change. 

Thank you very much.  I welcome your questions.