Beyond Kyoto: An Agenda for the Next Decade

Beyond Kyoto: An Agenda for the Next Decade

Speech given by Eileen Claussen, Executive Director
The Pew Center on Global Climate Change

American Enterprise Institute

September 14, 1998

I am sometimes reminded, when I talk about global climate change, of a painting by Pieter Brueghel titled "The Fall of Icarus". In Greek mythology, Icarus is the son of Daedulus, an architect and inventor who developed the concept of, and actually designed the labyrinth. When Daedulus and Icarus were later imprisoned in the labyrinth, Daedulus creates wings of wax for both himself and his son so they can escape. They manage to flee the labyrinth and fly away, but Icarus flies too close to the sun, his wings melt, and he falls into the sea and drowns. In the Brueghel painting, as Icarus falls into the sea, no one pays any attention. The ploughman continues ploughing his field, the ship does not come to the rescue. If there is a disaster, it is clearly someone elses disaster, and does not warrant a change in course.

There are two ways to apply this myth and painting to global climate change. First, we could view ourselves as Icarus approaching the sun with wings of wax. Clearly, then, we would want to change course, and fly at a different altitude. But we could also view ourselves as the ship or the ploughman, knowing, but not responding to what is about to happen. In this case, we should want to pay attention, and put in place a system so that when Icarus falls from the sky, we could move quickly to rescue him.

I would like to argue today, that we should look at the climate change issue in both ways. We, in the United States, should begin changing course, and taking steps to reduce our emissions of greenhouse gasses. We are, after all, the largest emitter of greenhouse gasses, with the largest gross domestic product (GDP), and the largest GDP per capita (expressed as purchasing power parity). At the same time, we know that this is a long term, global issue that demands a global response. So we should also be building the national and international systems to deal with this issue over time and with the active participation of all nations.

As we begin to discuss an agenda for the next decade we should take stock of where we are on the climate change issue, both domestically and internationally. Beginning with the science, or the basis for dealing with this issue, I believe we can simply say that sufficient scientific knowledge exists that supports taking steps to address mans emissions of greenhouse gasses. If we then look domestically, it is fair to say that:

  • First, we are still on a course of increasing emissions of greenhouse gasses. The Energy Information Agency suggests that without policy interventions, we are likely to increase our emissions annually over the next decade.
  • And second, the domestic climate change debate is highly polarized and politicized. It is centered on the Kyoto Protocol, and whether or not it should be ratified now or in some amended form at a later time. There is little focus on what should be done constructively to address the problem.

Internationally, the picture is quite different.

  • First, in Kyoto, all of the countries in the world agreed that binding reduction targets should be established for developed countries. But the developing countries were and are unwilling to accept emission targets at the present time. Still, more than 50 countries have already signed the Kyoto Protocol.
  • Second, there is some understanding globally that all major emitting countries must participate if we are to achieve long term success in avoiding growth in emissions of greenhouse gasses. This is particularly true given that developing country emission growth rates are expected to increase by 2.9 percent annually over the next decade.
  • And third, there is broad support for flexible mechanisms to deal with established emission targets, although this support is greatest in the United States.

Finally, I would like to make one point that brings us back to where we began. And that is that irrespective of what happens to the Kyoto Protocol, the issue of climate change will not disappear and global pressure to reduce emissions of greenhouse gasses will not abate. Icarus, we shouldnt be; the ploughman we cannot be.

So what agenda would be most practical and effective in moving actions to deal with the climate change issue forward? Perhaps a modest beginning would be most appropriate.

A National Agenda

The first item on the United States agenda should be to depoliticize and depolarize this issue in Washington. If we can move beyond political agendas and focus on economically sound, stable, and serious actions to reduce greenhouse gas emissions, we will provide a platform for business planners to look to the future. And looking to the future will allow them to develop cost effective investment strategies that will permit the needed replacement of capital equipment with greenhouse friendly technologies. If we fail to do this, we risk losing the opportunity to gain competitive advantage in clean technologies. And, additionally, if we wish to be efficient, we must begin now to plan for the longer term.

Our view that we need to put politics aside and begin to develop environmentally sound and economically justified programs to reduce greenhouse gas emissions is rooted in the current state of the science. This is not to say that major areas of scientific uncertainty do not exist. They obviously do, and part of our agenda must be to continue the necessary research to address those uncertainties and to increase our knowledge of the likely effects resulting from emissions of greenhouse gasses. However, the scientific basis is too deep-rooted to disappear, and it is the combination of scientific knowledge, the international agreement among 170 countries that developed nations need to act within the next decade, and the need for developing and implementing environmentally and economically justified programs, that led us to the conclusion that we need to depolarize this issue domestically now so that we can move forward.

To facilitate moving forward to address the climate change issue, our second agenda item should be to design a straight forward system that will recognize and give credit to those corporations that want to take early action to reduce greenhouse gas emissions. We as a nation should not force progressive companies to make a choice, on the one hand, of investing in emission reducing technology now and risk being punished for it later, or, on the other hand, to forego investment to develop or install climate friendly technology for a decade or more. Failure to adopt a program to give credit for early action will essentially compel industry to defer action for the next decade to avoid the uncertainty of how their actions will be treated by the government when more comprehensive programs are put in place. We believe that the Congress should step up to this issue and provide a legislative framework that will allow industry to undertake the emission reductions that will change our current course of emissions growth and result in a downward emissions trend. If we fail to take this step, we risk falling behind other countries in the contest for the development and marketing of clean technologies. We should take a lesson from history, and compare the U.S. auto industry of two decades ago with the information technology industry of today. In the climate change case, we can anticipate that both domestic consumers and international trading partners will pay ever more attention to climate friendly technologies, and we will need policies that will more strongly encourage our domestic industry to be there first Moreover, if we fail to encourage early action we will shorten the time horizon during which those who emit greenhouse gasses will need to take action to fulfill our national commitment should the international obligations agreed in Kyoto become binding on the United States. Such a compression of the time horizon for taking action will certainly lead to higher costs than would a more orderly program initiated earlier.

Our agenda for the next decade should also include exploring the type of system that we should install over the longer term. The domestic system should be market based and should allow the economy to grow as it protects the environment. Development of such a system will require participation by all levels of government, Federal, state and local as well as the private and nongovernmental sectors. This is a problem of enormous scope that will affect every individual and business in this country and around the world. We need to work together in partnership, to achieve our objectives - protection of the environment and continued economic growth.

And as we develop our national programs, we must also assure that our system will be not only efficient, but also fair. Should every sector be treated equally? We know that the opportunities for reducing emissions are not uniform across all sectors, since some have already taken steps to reduce their energy intensity and others have not, and some have significant further possible advances and others have not. Should we consider not only responsibility for the problem, but also opportunity for dealing with it? And how should we deal with the obvious labor issues, where some sectors will clearly be impacted, and where whole regions may suffer significant consequences? Surely, equity and transition issues must become a part of our national agenda, and a key component of our deliberations as we move to design a national system for dealing with this issue over the longer term.

Thus our third agenda item must be to begin the dialogue on how to move forward over the long term and then begin taking action in accordance with the results of that dialogue. We know there are policies and programs that can lower the costs, and we should analyze and discuss all alternatives. We know there are likely to be sectors of the economy that will be more impacted than others, and we should have discussions about how to achieve our environmental and economic goals in ways that minimize the costs and impacts, and treat those who will be adversely affected in ways that are fair and equitable.

Some will say that this is a pipe dream. However, we should also learn from history here. When we were faced with the oil embargo, we became more energy efficient and economic growth was, of necessity, decoupled from energy consumption in the decade following the embargo. Today, we are more energy productive than we were 25 years ago. Thus, when we have a national will and appropriate policy support, we can achieve goals that seemed beforehand to be unachievable. Dealing with climate change provides us with a similar challenge. We should take it, and use it to strengthen our national economy.

An International Agenda

As we move to implement a national agenda, we also need to address this issue internationally. We need to consult thoughtfully with other nations so that our expectations for international programs are grounded in reality, a consultation that will be facilitated and made more effective if we are taking steps at home to address this issue. Whatever view you hold of the Kyoto Protocol, it does provide for transboundary market based programs to encourage climate friendly development. Our first international agenda item should therefore be to carefully study and understand the potential of these mechanisms and develop programs to maximize their effectiveness. Emissions trading, joint implementation, and the Clean Development Mechanism are still in their formative stages. Working out international systems that are effective, efficient and equitable, and then developing the international institutions to deal with them are not simple tasks. It will require many years of effort from governments around the world, with their private sectors actively involved. Those who would argue that the next meeting of the Parties in Buenos Aires is a failure if it does not come to conclusion on rules to implement any of these mechanisms should have their motivations examined. Decades, with many high points and low points, were spent building the World Trade Organization. Our expectations for what can be achieved and over what time frame must be realistic; we will be lucky indeed if any of the market-based mechanisms are operational by the turn of the century.

A final agenda item, and one where both the domestic and international dialogue is emotional, rather than analytical, and where the polarization is strongest, involves how best to move all nations on to a change of course. It is clear from both an environmental and an economic point of view that all nations must take steps to reduce their emissions. But fashioning a system -- and a timetable -- that deals with this issue has, despite the rhetoric, hardly begun.

The views of the developing world on the subject of what has come in this country to be called meaningful participation have barely changed since the Kyoto Conference, where any effort to define participation was met with total and complete opposition. Yes, there are several countries, particularly in Latin America, that continue to be positive about both their future role and also the need for global solutions to the climate change issue. And South Korea has indicated that it is willing to voluntarily reduce its emissions beginning in 2018. But the vast majority of developing nations have not indicated any interest in going beyond their current commitments to take policies and measures to reduce their emissions consistent with their goals of poverty alleviation and economic development.

Why not? Two answers immediately come to mind. First, the developing countries are clearly waiting to see whether the developed countries take the lead in combating climate change and the adverse effects thereof (Article 3.1 of the Framework Convention on Climate Change). The record of the developed countries, particularly the United States, in achieving the aims of the Convention has not been a strong one. And it is clear that the developing countries are waiting to see whether the Kyoto Protocol elicits a more effective response from the developed world.

And second, and equally important, we have yet to address the issue of what a framework for equitable obligations might be. The United States, which argued the most strongly for developing country action prior to Kyoto did not, in fact, put down more than a marker that would indicate future commitments from developing countries. And the only proposals that have been put forward suggest that a fair and equitable regime would require the convergence of per capita emissions among all nations. But there has been a complete absence of debate on this very important issue, a debate that will be necessary before an agreement on what should be required (and what is fair) can be reached. Clearly, this is a very important agenda item for the next decade.

It is a hefty agenda. At home, it includes depoliticizing the issue, providing a legislative framework for early, voluntary action, and designing an emissions reduction system for the long term. Abroad, it includes building the systems and institutions to deal with the market based mechanisms that are in the Kyoto Protocol, and developing an effective and equitable framework to guide the participation of all nations. But if we are thoughtful, and work both domestically and internationally to achieve consensus rather than division, we can move forward economically and begin the long process of curtailing and reducing emission of greenhouse gasses. If we set an agenda for the next decade that addresses the five issues I have discussed, we should be able to avoid the mistake of Icarus and not fly too close to the sun.