Setting the Stage: Beyond Kyoto

Setting the Stage: Beyond Kyoto

Remarks of Elliot Diringer
Pew Center on Global Climate Change

The Fifth Mansfield Pacific Retreat, Melting Mountains: Climate Change in the Asia Pacific Region
Bigfork, Montana

June 27, 2002

Good morning. I'd like to thank our hosts at the Mansfield Center for the opportunity to be here today. I'm delighted, of course, to be able to spend a few days in such splendid surroundings. But even more, I appreciate the opportunity to meet and exchange ideas with such an esteemed group, people who bring with them not only extraordinary expertise, but also a willingness to grapple with what I believe is one of the most profound challenges of our time - the challenge of global climate change. I am very hopeful that over the next few days we can all arrive at a fuller understanding of this challenge and of the many perspectives that must be considered as we work toward meeting it.

One of the reasons I feel especially fortunate to be here is that I was able arrive a few days early. An old friend of mine met me here and we spent several days backpacking in Glacier Park. Before you go into the backcountry - really, before you go anywhere in the park - the rangers warn you in very serious tones to watch out for the grizzly bears. They tell you how to avoid the grizzlies, which is the preferred strategy. They tell you what to do if you do happen to see a grizzly, and they tell you what to do if it then happens to attack you. My friend and I fortunately did not need to avail ourselves of that last bit of advice. One thing the rangers don't warn you about, though, is the mosquitoes - and we saw lots and lots of those. Unlike the grizzlies, the mosquitoes are guaranteed to attack, and when they got really bad we found that the only real defense was to crawl inside our tent and hide. So allow me to be the first to warn you: When we head up into the park tomorrow, watch out for the mosquitoes.

One of the things I enjoy most about spending time in the backcountry is the way it reduces your realities to the very basics: feeding yourself, staying warm, staying dry, being prepared for whatever you might encounter. By stepping outside all the clutter and complications of everyday life, you can see much more starkly what it takes to meet your fundamental needs, and ultimately how dependent you are on the blessings and the whims of nature. I find it a very clarifying experience, and I think perhaps the same could be true of this retreat. By stepping outside our everyday routines, and coming to a place where our utter interdependence with our environment is so much easier to observe, perhaps we will be able see a little more clearly some of the challenges ahead. I hope so.

Gathering at this time in this place, I can't help but recall another meeting on climate change 10 years ago in another place of extraordinary natural beauty. The place was Rio de Janeiro. As I'm sure you all know, this month marks the 10th anniversary of the Earth Summit and the launch of the international effort against climate change. I was a reporter at the time, and when I look back now at some of the stories I filed from Rio, I detect a certain headiness - a sense that something truly profound was unfolding. That may simply have been a reflection of my own naiveté. Or history may show that Rio was indeed a turning point - a watershed moment when nations came together in the recognition that only by acting together can they ensure the well-being of this planet and its people. I think many more years must pass before such judgments can be made. But a decade after Rio seems a fitting time both to reflect back and to look ahead. So to help set the stage for our discussions, I'd like to pose some questions: Ten years after nations first committed themselves to the fight against climate change, how far have we come? And more importantly, how do we go the next step?

These questions of course lead to other, more complicated questions - sensitive questions, ones we might rather not confront because we know they have no easy answers. But I believe this is a group uniquely qualified to take these questions on. I say this because the four countries represented here - China, Japan, Korea and the United States - are a remarkable microcosm of the national interests and the global forces that will continue to shape, or might continue to undermine, the international effort against climate change. In fact, it is hard for me to imagine four other countries that could better reflect the challenges and opportunities before us. We have represented here the world's two largest economies, and its two largest emitters of greenhouse gases. We have key countries from both the developed world and the developing world, and one that straddles the two. Together, our countries account for nearly half of carbon dioxide emissions worldwide. But in their circumstances, their needs, their preoccupations - and in their preparedness to act - they are all quite different. In bringing us together here, the Mansfield Center has provided a very unusual opportunity to explore the ways in which these unique interests intersect, the ways in which they collide, and hopefully, the ways in which they might one day converge.

So, as I asked a moment ago, how far have we come? I think it's fair to say that we have spent the decade since Rio struggling to take the first step - struggling to create a common framework to start industrialized countries on the path to emissions reduction. In just the past 18 months, that effort has met both its greatest success - and its greatest setback. The success was the completion of negotiations over the rules for implementing the Kyoto Protocol, which has allowed countries to proceed with ratification and will soon, hopefully, lead to Kyoto's entry into force. The setback, of course, was President Bush's rejection of the Protocol. So we are now on the verge of making the framework real - of bringing into force a treaty establishing the first binding international limits on greenhouse gas emissions - but the largest emitter has made clear it will not join.

With or without the United States, Kyoto is a profound accomplishment. It forges both a vision, and a formula, for transcending national interests for the sake of a common, global, long-term good. It sets ambitious goals. And rather than fight the market, it tries to tap the market, and motivate the market, so those goals can be reached as affordably as possible. But I think it is important that we be honest about Kyoto - about what it is and what it is not, what it achieves and what it does not. In part by design and in part by default, Kyoto can at best capture less than 40 percent of global emissions. And for that subset of emissions, it is difficult to say just how much of a reduction Kyoto will actually deliver - perhaps not much at all. Whatever the real number, it is certain to be just a fraction of the long-term reduction needed to meet the objective set 10 years ago in Rio: stabilizing greenhouse gas concentrations at levels that are safe.

This is not a criticism of Kyoto. Rather, it is meant to underscore that Kyoto is only a first stage in a very long-term effort. Anyone struggling with this issue understands that, of course. But in the drive to bring Kyoto to life, that at times has come to appear an end in itself. Now that it is within reach, it might help to view Kyoto a little more critically. Kyoto is a tool - a critical tool to get us through a critical stage - but it may be a tool that can take us only so far. Other nations have now come to terms with the fact that President Bush is not returning to the Kyoto Protocol. I think there is the very real possibility that the United States is never returning to Kyoto. To get to the next stage, I believe - to reengage the United States in the international effort, and to draw in the other major emitters whose participation will be critical to its success - we must build on Kyoto. But we also must look beyond it. The Protocol requires that negotiations for a second round of commitments begin by 2005. It may be a mistake to limit those negotiations to the Kyoto framework. To actually secure a new set of commitments, and to create a durable international approach to climate change, we may need a new framework.

So 10 years after Rio, we stand at another critical juncture, one that requires that we be nimble. We must at the same time embrace Kyoto and look beyond it. We must start to think post-Kyoto.

In a moment, I'd like to share some thoughts on the challenges we face in moving beyond Kyoto to build an even stronger framework for international action. First, though, I'd like to focus a little more closely on the situation here in the United States - because until the United States is prepared to act, no international effort can succeed. And I'd like to suggest that while the United States clearly has a very long way to go, it may in fact be further along than many of you realize.

Even if most have accepted that President Bush is not returning to Kyoto, many, I am sure, still have trouble comprehending why he rejected it in the first place. Let me offer two explanations. In a narrow sense, it was a simple case of interest group politics. The new administration - without closely analyzing Kyoto and the history behind it, without putting any real thought to alternatives, and without anticipating the international furor it would invite - renounced Kyoto in part to reward certain of its favored constituencies. In a broader sense, though, the rejection of Kyoto might also be seen as a necessary readjustment. There had evolved a fundamental disconnect in U.S. climate policy. Internationally, the Clinton administration supported a binding treaty, and in Kyoto it agreed to an ambitious target. But at home, the Senate had laid down terms that made Kyoto's ratification a remote possibility at best, and the administration was barely contemplating let alone promoting the kinds of measures needed to meet the Kyoto target. In other words, the United States was in no way prepared to deliver at home what it had promised abroad. Some kind of readjustment was due. Working with other countries to address U.S. concerns within the Kyoto framework might have been an option. But it was not the one the new President chose.

The domestic climate strategy outlined by President Bush in February is not a credible answer to Kyoto. It may help spur some voluntary efforts by industry to reduce emissions, particularly if it can ensure that those taking action now will be credited in a future climate regime. But the President's strategy relies exclusively on voluntary actions. And its goal - an 18 percent reduction in greenhouse gas intensity by 2012 - translates into a 12 percent increase in actual emissions. It is more or less business as usual.

But when you look past this administration and its policies - to what is happening in the states, in the business community, and in Congress - the picture begins to look somewhat brighter. Recently, for instance, New Hampshire became the third state to enact some form of mandatory carbon controls on power plants. Other states, like Texas, are requiring electric utilities to generate a share of their power from renewable sources. Others are investing in energy efficiency, carbon sequestration, and transportation improvements. In many cases, these efforts are not driven exclusively nor even primarily by climate concerns. But they are delivering real emission reductions, along with other benefits, like cleaner air and lower tax bills.

A growing number of companies are also taking steps to address climate change. At last count, we'd identified more than 40 major companies, most with significant operations in the United States, that have taken on some kind of greenhouse gas reduction target. BP has cut its emissions 10 percent below 1990 levels - eight years ahead of target - and now has pledged to keep them there for at least the next 10 years. Alcoa is aiming to reduce its emissions 25 percent below 1990 levels by 2010. DuPont is aiming for a 65 percent reduction. We recently completed a report looking at several companies with voluntary greenhouse gas targets. The companies cited several motivations for taking on a target. They believe the science of climate change is compelling. They know in time the public will demand strong climate protections, and they can get ahead of the curve by reducing their emissions now. They want to encourage government policies that will work well for business. The companies cited one other important motivation: To improve their competitive position in the marketplace. And that, in fact, has been the result. The companies are finding that reducing emissions also helps to improve operational efficiencies, reduce energy and production costs, and increase market share - all things that contribute to a healthier bottom line.

Important political shifts are also beginning. Just as President Bush's rejection of Kyoto helped galvanize international support for the Protocol, it helped elevate the issue of climate change in the U.S. media and in Congress. The heightened media sensitivity was very clear three weeks ago when the United States submitted its latest national communication under the Rio treaty to the United Nations. The report contained no new information, it outlined no new policy initiative, and there was no announcement. Nevertheless it was page-one news. In Congress, meanwhile, members of both parties suddenly seem eager to demonstrate their interest in climate protection. Nearly twice as many climate change bills were introduced in Congress over the past year as in the previous four years combined. The energy bill passed in April by the Senate includes two bipartisan climate provisions - one establishing a new office in the White House charged with developing a long-term climate strategy, the other establishing a system for tracking and reporting greenhouse gas emissions that is voluntary at first but after five years could become mandatory.

These are only modest first steps, and they have not yet passed the House of Representatives or been signed into law. But some lawmakers are already looking much further down the road. Senators John McCain and Joe Lieberman, a Republican and a Democrat, plan to introduce legislation later this year to cap greenhouse gas emissions in the United States and establish an economy-wide emissions trading system. It is, frankly, hard to imagine such legislation being enacted for some time, probably years. But the fact that it is even being drafted suggests that in Congress at least the climate issue is taking on a new potency.

So let us assume for the moment that Kyoto enters into force, countries do their best to implement it, and on a parallel track, the United States begins building a credible climate strategy. That may be too hopeful or not hopeful enough, depending on one's point of view. But let's assume it. What, then, is the next step? Against a backdrop of increased globalization, soaring demand for energy, and the ever-present need for economic security, what are the core challenges nations must confront if they are to craft a truly effective international regime? And given the disparate interests of nations like those represented in this room, how likely is it that we can muster the collective will that it will require?

The core challenges, I would suggest, are not new ones. They are the same ones that have loomed before us from the start. First there is the question of a goal. The only way to meet the objective set in Rio - stabilizing greenhouse gas concentrations at levels that are safe - is to reduce emissions. So wouldn't it make sense to define this objective more concretely - in other words, to set a specific concentration target - so we know just how much emissions must be cut? Perhaps. But we also have to ask: Is it practical? The process of translating broad objective into concrete target would be one fraught with uncertainties, laden with value judgments, and subject to extraordinary political pressures. Even if our understanding of the climate system were far more precise, the level of risk we are willing to accept is in the end more a question of values than science. And precisely because such a determination would frame the entire climate effort, the political and economic stakes would be profound. It is critical that we understand the various emission pathways that could achieve stabilization at given concentrations, and the climate impacts that could result from each. But how much expertise and scarce political capital can we afford to invest in establishing a specific concentration target? Might we do better by aiming for consensus on the overall direction and pace of our effort, and periodically readjusting as we learn more?

A second challenge is fairness. Climate change confronts us with deep inequities of many different kinds. These are captured, at least in part, with the observation that those bearing the least historical responsibility for climate change - the developing countries - are also those facing the worst consequences, and those least able to do something about it.

Given these inequities, the understanding since Rio has been that developed countries should act first. There has been no clear understanding about what would happen next. Nor as yet have there been any real hints that developing countries are closer to contemplating commitments of their own. That is not to say that developing countries are not acting. Many, in fact, are making impressive gains in reducing or avoiding greenhouse gas emissions. As with the very substantial reductions achieved in China in recent years, climate protection usually is not the objective but rather an added benefit of efforts to reform markets or improve local environments. Still, these successes demonstrate the strong synergies between climate protection and the overriding development priorities of developing countries. They should be recognized, not least by those who have achieved them, and they should be nurtured.

But it may be time to start moving the equity debate beyond the developed-developing country divide. And interestingly enough, the U.S. withdrawal may present an opportunity to do that. On one hand, by undermining the basic bargain struck in Rio, the U.S. withdrawal could make it harder to deepen the engagement of developing countries. On the other hand, it might recast the terms of debate. The question is no longer: What kind of commitments will developing countries take on, and when? Rather, the question is: How do we ensure that all major emitters do their fair share? Because I believe one thing is certain: Nations will not commit to a serious, long-term global plan against climate change, let alone abide by it, unless each perceives it to be fair.

A third challenge is ensuring that our efforts are as cost-effective as possible. Quite obviously cost has been a central concern, particularly for the United States, from the very start. It is reflected in the very architecture of Kyoto, with its various forms of emissions trading. And the major sticking points in negotiating Kyoto's implementation rules - whether to allow unfettered access to trading, for instance, or how much sinks credit countries could claim - revolved largely around questions of cost.

As we look beyond Kyoto, it is even more critical that we achieve the maximum environmental gain for every won, yen, yuan or dollar invested. Better mechanisms may be part of the answer. Experience with the trading systems now emerging will lend insight into how market forces can be better harnessed for the cause of climate protection. But affordability may depend just as much or more on questions like timing. Can we minimize cost by aiming for steeper reductions later rather than sooner? If so, how do we send a strong, early signal to the marketplace so companies begin investing now in the technologies that will be needed to deliver deep reductions decades down the road?

A fourth challenge is, perhaps, a way of restating the first three. It has to do with the nature of commitments under a future climate regime. Kyoto takes one approach: targets and timetables. But there are many types of targets - greenhouse gas intensity, for instance. Beyond the type of commitment is the question of who must take it on. The precedent for differentiated commitments is well established. But what is the most effective grouping? Must it simply be developed or developing? If instead, for instance, we were to focus on the 20 largest emitters - a list that includes 12 developed and 8 developing countries - we would capture nearly 80 percent of global emissions. The top ten gets you nearly two-thirds.

I have described these challenges in very abstract terms. Whether we meet them, of course, will depend on very concrete calculations by individual nations of their own self-interests. And each nation's calculation will depend, in turn, on what others are willing to do. We can see that kind of interdependence among the countries represented here. Japan is moving ahead with Kyoto despite the U.S. withdrawal, but with its economy still struggling could it commit to steeper cuts in the future if the United States, its chief trading partner and competitor, is still out? How much further would Japan and the United States need to move, and how much assistance would they have to offer, before China would contemplate constraints on its own emissions? Might China's reluctance make it easier for Korea to capitalize on the emerging greenhouse gas market? In the long run, we all share a common interest in ensuring a safe and stable climate. The question is whether we can arrive at a set of reciprocal arrangements that aligns this common interest with the self-interests of nations that are so very different - and whether we can do it before it is too late.

I believe this is a fragile moment. It is clearer now than ever that we have put our climate at risk, and with it the well-being of future generations. I believe it is also clearer than ever that by addressing climate change we can help ensure a more sustainable future for all countries. Ten years after Rio, we can claim at least some measure of progress. We can justly celebrate Kyoto as a critical first step. But our efforts have begun to diverge, and we must find a way to draw them together, and to strengthen them. As we move forward, we should borrow all we can from Kyoto, because there is much of value there. But if we are to build a framework that is truly global in reach, and durable enough to guide our efforts in the decades to come, we must also look beyond Kyoto. It is best if we start now.

Again, I'd like to thank our hosts for the opportunity to contribute to this critical dialogue. And I'd like to thank you for listening.

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