Opening Remarks by Eileen Claussen, President, Pew Center on Global Climate Change
Innovative Approaches to Climate Change Policy: Workshop on State-Federal Interactions
June 24, 2009
I join with our cosponsors in welcoming all of you to our annual workshop on state-federal interactions. The Pew Center on Global Climate Change is delighted to be working with the Georgetown Climate Center, the Pew Center on the States, and the National Association of Clean Air Agencies to present what we hope will be a very engaging and informative program over the next two days.
It’s wonderful to be here at the Newseum. The Newseum, of course, is home to such exhibits as the News Corporation News History Gallery, the NBC News Interactive Newsroom and the Cox Enterprises First Amendment Gallery. I understand that the Newseum has plans for several new exhibits in the months ahead. These include:
The Fox News Gallery of Fairness and Balance … except you’re the one who has to keep your balance because everything is a little bit slanted to the right.
The Hall of Cheerleading Journalism … brought to you by CNBC and its friends on Wall Street. Led by the cheer: Two, four, six, eight … how much can we make stocks appreciate!
And then there is a great exhibit on the Future of Newspapering … it’s sponsored by the Boston Globe, although I understand that the New York Times is trying to shut the exhibit down.
In all seriousness, as we consider the innovative approaches to climate change policy that are the focus of this workshop, I want to set the stage with some observations about where we stand on this issue right now, how far we’ve come, and where things are headed in the months and years ahead. Given the focus of this workshop on state-federal interactions, I also want to talk about the varying yet complementary roles of the state and federal governments in addressing this issue, especially given the increased appetite for real action on climate change here in Washington.
Last year, I opened this workshop with the observation that states were beginning to act on the climate issue because of an absence of federal leadership. Well, it’s one year later and the tide is turning. Now we are entering a period when the federal government is finally moving to address this issue. And we need to think about what this means for the states.
Does it mean the states will have a smaller role now in addressing climate change, presuming that the federal government comes through with a serious program? Or does it mean something else? Well, count me as a vote for “something else.” Because I continue to believe the states have an essential role to play when it comes to addressing this issue.
I will be discussing the intersection of state and federal roles in more detail, but first I’d like to share a couple of observations about the science of climate change. Because every week, it seems there is new data or a new study that adds to our understanding of the seriousness of the problem we face. U.S. Energy Secretary Steven Chu recently gave a commencement address at Harvard and in that address, he said: “For the first time in human history, science is now making predictions of how our actions will affect the world fifty or a hundred years from now.”
And what science is predicting is something that should be of grave concern to each and every one of us. According to the Intergovernmental Panel on Climate Change, the earth is on track to warm by as much as 2 to 11.5 degrees Fahrenheit over the next century – that’s in addition to the 1.5-degree rise we already experienced in the century gone by. As Secretary Chu pointed out at Harvard, a few-degree rise in temperature may not sound like much on a given day, but the Earth was only 11 degrees colder during the last ice age than it is now – the same amount of warming projected at the upper range for the end of this century. Clearly, a few degrees can and will make an enormous difference.
Scientists also have reached a high level of consensus about what the temperature projections mean, and the federal report released last week, “Global Climate Change Impacts in the United States,” confirms this. Whether it is increases in the number and intensity of rainstorms (in the northeastern United States heavy storms have become 67% heavier over the last century); or sea levels, which are already rising and are projected to rise from two to three feet along the Eastern seaboard of the United States, the risks to our health, environment and economy are huge. And every region and sector of the country are vulnerable.
Without immediate and aggressive climate action, the West will experience reduced snowpack, less available water, and more wildfires. More intense heat waves will plague the Midwest while the water levels in the Great Lakes will decline. Extreme weather, including more flash floods and longer droughts, will hit the Great Plains. And in parts of the South, the average number of 90-plus-degree days could jump from 60 to 150 by 2100. And Washingtonians complain about our muggy summers now.
Clearly, the science tells us we have an enormous problem on our hands, and have no choice but to take action to reduce these very real risks. And it is largely because of the science that public opinion on this issue has shifted in recent years.
A national survey conducted earlier this spring found that 77 percent of voters now favor action to reduce greenhouse gas emissions. Further evidence of the shift in public opinion came in another spring poll showing that 59 percent of voters believe efforts to tackle global warming will create new American jobs.
Now, my intention is not to stand up here and paint a completely rosy scenario of public support for climate action. While public opinion has shifted, there is still some pretty significant polling that shows we have a ways to go.
For instance, earlier this year, in a widely touted poll, global warming ranked last in a survey of the nation’s top 20 policy priorities. Among Republican voters, only 16% considered it a priority. And while this polling has gotten a lot of mileage in particular policy circles – what is important to know is this: In the same survey, 60% identified energy as a top policy concern – a 20% increase from six years ago. And as we know, energy and climate change are inextricably linked – so I am OK with 60% of respondents listing energy among their top priorities – a win for energy could well be a win for climate. And the climate-energy connection is being made by more and more policymakers at the state level and in Washington.
We’re meeting in Washington at a crucial moment for this nation’s efforts to address climate change. We have a President and Cabinet that are fully committed to action on this issue – with cap and trade legislation being their preferred approach. We have an EPA that is poised to regulate greenhouse gas emissions – in response to the recent Supreme Court ruling in Massachusetts v. EPA. And we will be hearing more about the EPA’s approach to these issues later today from EPA Assistant Administrator Gina McCarthy, and tomorrow from EPA Administrator Lisa Jackson.
The White House’s commitment to action on this issue is matched at the other end of Pennsylvania Avenue. Most recently, on May 21st, the House Energy and Commerce Committee achieved something extraordinary – passage of a climate and energy bill out of committee that has the potential to set the United States on a path to tackle climate change in a serious way. This bill will be debated on the House floor beginning Friday, when it may reach a vote by the full House. (The bill passed the House on June 26, 2009 by a vote of 219-212).
Looking beyond Washington, we have teams of negotiators around the world preparing for a December meeting in Copenhagen. Their hope is to reach agreement this year on a new framework for global action on climate change. And, of course, in addition to all of these other developments, we have a number of state and regional initiatives moving forward around the United States – and we will be talking a lot about these in the course of the next two days.
I believe the states have an essential role to play in the nation’s effort to address climate change. As the federal government begins to assert itself as a force for change, I believe we are entering a new phase in the state-federal relationship where the two levels of government are working as partners to tackle our nation’s energy and climate challenges. It’s not about one level assuming control over the other, or about one level filling gaps that are there because the other level isn’t doing its job. No, it’s about the two levels working in tandem, working together … with each side playing to its strengths.
Which then begs the question: What are the strengths of the states as we enter this new phase in our nation’s effort to respond to climate change? What is the role of the states in addressing this issue when you have the federal government on the verge of making cap-and-trade the law of the land, and on the verge of adopting other national policies aimed at reducing emissions and spurring the development of cleaner sources of energy?
As I look at it, I believe there are three ways to think about the role of the states in this new environment.
First, states are laboratories for learning about what works (and what doesn’t) as we develop policies and programs aimed at reducing emissions and spurring the development of clean energy technologies. In fact, states have played this role quite well in influencing federal cap-and-trade legislation. For example, the Waxman-Markey bill draws heavily from the northeast Regional Greenhouse Gas Initiative’s auction design and standards-based approach to offsets, that under the federal bill will be administered by EPA. The federal bill also takes an economy-wide cap-and-trade approach, much like the design put forward by the Western Climate Initiative.
Now that we are poised to enact a national cap-and-trade program, the role states play as learning labs will change. This is not to say their role disappears. Rather, I see ample opportunity for states to continue to serve as centers of innovation and learning. But going forward, the most critical information-sharing will occur between states themselves – not between states and the federal government. Because it will be states that are responsible for setting building standards, reducing vehicle miles traveled, ensuring renewable electricity and efficiency goals are achieved, and adapting to climate change. And when the time comes to reauthorize federal climate legislation, states will again be in the best position to help shape an effective policy.
The national renewable electricity standards being debated in the House and Senate are also modeled on renewable portfolio standards enacted by 30 states and the District of Columbia. But until federal climate and energy policy is enacted, states continue to pursue a broad range of initiatives. For example, on June 8th Nevada Governor Jim Gibbons signed a comprehensive energy bill that increased the state’s renewable portfolio standard. Nevada is now set to generate 25 percent of its electricity from renewables by 2025.
And on the same date, June 8th, members of the Midwestern Greenhouse Gas Reduction Accord released their draft final recommendations for the design of a regional cap-and-trade program covering six states and the Canadian province of Manitoba. Tomorrow, Governor Jim Doyle of Wisconsin will share his thoughts on actions being taken in his state and across the Midwest to address our climate and energy challenges, and what the Midwest needs from national climate and energy policy.
The second way to think about the role of the states in addressing climate change is to think of them as offering a Plan B in case federal actions fall short. Regional cap-and-trade initiatives like RGGI aim to achieve real, verifiable reductions in greenhouse gas emissions. In the case of RGGI, the states involved are committed to reducing CO2 emissions from the power sector by 10 percent by 2018. These states are already working toward this goal, and they will continue doing so if we can’t get quick agreement on a national cap-and-trade program, and if the national program does not deliver the reductions it promises down the line.
The same goes for other state policies such as renewable portfolio standards. As federal lawmakers continue to haggle over the details of a national standard, many states already have ambitious RPS programs in place. For instance, Texas is expected to avoid 3.3 million tons of CO2 emissions annually with its RPS, which requires 5,000 megawatts of new renewable generation by 2015. This is going to happen whether or not we ultimately have a national standard. What’s more, if the national standard is not sufficiently strong or ambitious, Texas and many other states will have their own stronger standards to assure that, within their borders at least, folks are doing what’s needed to develop and deploy renewables. That’s an important fallback, a Plan B, as we try and calibrate the specific elements of a federal climate and energy program.
The third and final way to think about state roles is to remember that states have the authority to take action in some areas where the federal government cannot. And states also are better suited than the feds to do certain things. For example, states can promote clean electricity and energy efficiency with policy tools such as net metering, green pricing, and public benefit funds. States also have authority to adopt building efficiency codes, which can have a major impact when you consider that energy use in buildings produces about 38 percent of U.S. carbon dioxide emissions. States also have great control over smart growth policies and transportation policies aimed at reducing emissions from cars and trucks. These are examples of things that fall within a state’s authority and in many instances, outside the authority of the federal government.
States as a laboratory for innovative solutions and information-sharing, especially between each other. States as a Plan B in case federal actions fall short. And states as entities with unique authority to take action themselves on these issues. These are three ways to think about the role of the states as we enter a new phase in the state-federal effort to address climate change.
But, of course, a national role is important as well. It’s crucial. For example, certain actions, if they are taken nationally, can be more cost-effective. And we also have to keep in mind that there is no guarantee that all states would act individually. In order to reduce emissions of greenhouse gases, and to do so both cost-effectively and to the levels scientists say are necessary, I believe we need the federal government to step up to the plate at the same time that the states are doing their part.
Let’s look at cap-and-trade as an example. This is a solution that works best when it covers many emission sources. The more states, or the more countries, that are part of the system, the more you can achieve efficiencies of scale and the more you can lower the cost of reducing emissions. This is why many states are reaching across their borders to establish regional cap-and-trade programs. They understand that the economics of cap-and-trade get better when more states and more communities are involved. But if regional approaches are better than going state-by-state, it is also true that a national approach is better than doing this on a region-by-region basis.
Ultimately, we need a national cap-and-trade program. And this is why the developments in Washington over the last several weeks are so important. Last month’s vote of the House Energy and Commerce Committee on the American Clean Energy and Security Act marks the first time that a serious climate bill has made it this far in the House.
The Waxman-Markey bill combines ambitious but achievable greenhouse gas emission reduction targets with a market-based cap-and-trade program. It is a good bill that protects consumers and provides the certainty businesses need to make substantial investments in clean energy technologies.
Of course, the Senate is an entirely different matter. Majority Leader Harry Reid and Senator Barbara Boxer, who chairs the Environment and Public Works Committee, have made cap-and-trade legislation a priority for 2009. Last week, the Senate Energy and Natural Resources Committee approved a broad energy measure that among its many provisions includes a 15% national renewable electricity standard. But action in the Senate on a combined energy and cap-and-trade bill will be far more difficult than in the House, and while Senator Reid has said he hopes for a vote this year, it’s nowhere near certain this will happen. Although a bill can pass the House along partisan lines, this is not a possibility in the Senate. Sixty votes is a high hurdle, and bipartisan leadership will be needed. I also believe a bill can only move through the Senate if there is active engagement from the White House in mobilizing support from both Republican and Democratic senators.
But it’s hard to dispute the fact that serious climate legislation is on the move and that the United States will have a cap-and-trade policy in place before long – maybe not this year but perhaps in 2010. When this happens, Washington finally will be doing its part to begin to build a true partnership with the states on climate and energy issues.
As passed by the committee in the House, the American Clean Energy and Security Act enables states to reserve the right to take action to reduce emissions should federal efforts fall short. More specifically, states must suspend any cap-and-trade program until 2018 … but they are within their rights to act after that date if the federal program is not getting the results states had hoped for. States and businesses and others overwhelmingly prefer a federal program to a patchwork of state efforts, and the idea of suspending state efforts is to provide an incentive for the federal program to work. But if the federal effort is not working as promised, then the states can step in after 2017. States can be Plan B.
The legislation also includes many other provisions that highlight how both the federal government and the states have important roles to play in this work. For example, the bill supports state and local adoption of advanced building codes, it supports state building retrofit programs, and it instructs states to submit goals for transportation-related reductions in greenhouse emissions.
At the beginning of the cap-and-trade program, states will receive 9.5 percent of federal emission allowances for investments in renewable energy and energy efficiency – this figure would decline over time and hold at 4.5 percent after 2021. In addition, funds raised through the federal efficiency and renewable electricity standard in the bill would be given directly to states for use in renewable energy and energy efficiency programs.
Last but not least, the House bill allows for the exchange of state and regional emission allowances for federal allowances. This is limited to allowances issued by California, the Regional Greenhouse Gas Initiative, or the Western Climate Initiative.
In conclusion, I want to say that U.S. states are acting in the best traditions of federalism by advancing an array of solutions to climate change that showcase the states as laboratories of democracy, as a Plan B solution when federal efforts fall short, and as entities with unique authority to bring about real changes in energy use and emissions. Today, as we anticipate a more active federal role in addressing this issue, the challenge is to create a more balanced state and federal partnership. If we can do it right, such a partnership will bring much-needed certainty to the question of how we as a nation are going to address the most critical global issue of our time.
Thank you very much.