Connecting the Dots: Elements of an International Approach to Climate Change




APRIL 20, 2006

Thank you very much. I am delighted to have the opportunity to be with all of you in this beautiful place. So many of the presentations I make are in poorly lit hotel ballrooms that I am practically beside myself having this chance to speak outside.  I think it is quite appropriate to give a talk on climate change and to have the whole thing conditioned on the two words: “weather permitting.” 

I also like your conference theme: “Connecting the Dots on Climate Change,” and it got me thinking..

Connecting the dots on climate change or any other issue that demands long-term, strategic thinking requires that people understand how to draw a straight line. And, in Washington, it is widely believed that a straight line is the shortest distance between two elections. 

But we are in California, and that made me wonder whether you should have called this conference “Connecting the Droughts." Of course, for opponents of action on this issue the preferred approach is “Connecting the Doubts.” But raising questions about the science of climate change is a strategy that doesn’t appear to be working any more, given the widespread consensus among scientists that we have a real problem on our hands. 

Particularly in California. From the California Climate Action Registry to greenhouse gas standards for vehicles to the governor’s emission targets for the state, California is leading the nation toward real action on the issue of climate change. Getting Washington to do the right thing on this issue remains a major challenge. But California, as it often does, is telling the country, “We can do this—and we must.”

But action at the state level, or even the national level, is just one part of the solution, as all of you know very well. While it is true that California’s emissions are equal to those of Brazil, and U.S. emissions as a whole constitute roughly one-fourth of the world total, climate change is a global problem that demands a global solution. And it is in America’s interests, and in California’s as well, to help frame a set of global solutions that bring all of the world’s major economies to the table, developed and developing countries alike.

And so today I want to talk with you briefly about what has been happening globally to address this issue. I also want to provide some new thinking on how we can move the international process forward, based on a recent set of discussions organized by the Pew Center.

Looking back over the past year or so, it is fair to say that we did make some important progress on the climate issue on the international front. The watershed event, of course, was the entry into force of the Kyoto Protocol. By now, we are all quite familiar with the strengths and weaknesses of the Protocol, and I don’t think I need to revisit those here. I will, however, say this: Kyoto establishes the first binding international commitments for limiting greenhouse gas emissions; and it sends a very important signal to the global market that the climate has a value, and that damaging the climate has a price.

That is no small achievement. Meeting Kyoto’s targets will be a major challenge for the countries that have accepted them. But whether they do or not, Kyoto is already a success: it has set them on the path toward serious action on this issue.

But, of course, we still must deal with the bigger challenge: What happens next? Kyoto, as we all know, only takes us to 2012. And, with the United States sitting on the sidelines, and China and India without specific commitments, the Kyoto process is a partial solution at best.

Many of the nations that gathered for talks on this issue in Montreal last November understand this. They understand the need for a process to engage the United States and developing nations in future efforts to reduce emissions; and they understand that the Kyoto agreement by itself is not sufficient.

And so countries agreed in Montreal on a two-track approach to consider next steps. The parties to the Kyoto Protocol began a process to consider a second round of targets for developed countries; and the parties to Kyoto’s parent agreement, the Framework Convention on Climate Change, agreed to initiate a two-year dialogue, which, while explicitly not a negotiation about new commitments, opens a conversation about ways to strengthen and broaden the international effort. The United States adamantly opposed this idea, but relented in the final hours of the negotiation after all the major developing countries signed on and the U.S. found itself isolated. If this dialogue is successful, it may well set the stage for a new round of negotiations down the line.

Of course, the formal negotiations under Kyoto and the Framework Convention are just one part of the international response to this issue. Last year, there was a great deal happening outside of the formal process. At Gleneagles, Scotland, for example. That’s where the G-8 summit was held in June.

Despite the best efforts of British Prime Minister Tony Blair to try and have the G-8 become a force for real action, there were no real breakthroughs. But the Summit did serve to elevate this issue on the international agenda, and catalyzed some very strong statements from the international scientific and business communities urging governments to get serious about climate change. Perhaps the most concrete outcome was the launch of a ministerial-level dialogue—yes, another dialogue—this one among the 20 largest energy-consuming nations. This is the group we need action from, and hopefully the dialogue will lead in that direction.

An additional effort launched last year outside the formal multilateral process was the Asia Pacific Partnership on Clean Development and Climate. This is an initiative spearheaded by the United States and including five other countries: Australia, China, India, South Korea and Japan. The focus is technology cooperation, with the aim of encouraging public-private partnerships. It made for a good press release at the time, but the proof will be in whether this effort receives any real funding, and whether it results in real accomplishments.

So, if you think about what is happening on this issue at the international level, it is hard to point to anything substantive beyond Kyoto (and, even there, the substance of what is happening is dwarfed by the magnitude and the urgency of the climate challenge).

Climate change is here; it is happening. And every day, it seems, we are learning more and more about how problems such as sea level rise will accelerate in the decades ahead. We need more than dialogue; we need action. And for that, we need real commitments. We need policies and frameworks that put countries on the path to real and long-term emission reduction. And we need to do it in ways that are fair and equitable for all involved.

To figure out just how this might be accomplished, we recently convened a dialogue of our own: the Climate Dialogue at Pocantico. We brought together 25 senior people from government, business, and civil society in 15 different countries for a series of discussions on options for strengthening the international climate effort beyond 2012. Our participants came from the United States, the UK, Germany, Japan, Australia, China, India, Mexico, Brazil, and other countries, and from seven companies, including BP, Toyota, Alcoa, and DuPont.

It was a very diverse group, yet in the end we reached consensus on a set of ideas and approaches for moving the international effort forward. Two of the participants in our dialogue were senior staff to Senators Richard Lugar and Joseph Biden, the chairman and ranking minority member of the Senate Foreign Relations Committee. The two senators, in fact, hosted the event last November where we released the group’s report. And in February, in an address to the U.N. Security Council, Senator Lugar cited the Pocantico report as a roadmap to a comprehensive international approach to climate change.

The report lays out key objectives and key elements of an effective post-2012 approach. I’d like to briefly share some of those with you today, and in so doing, draw some interesting parallels with the climate efforts now emerging here in California.

First, while we need a fully global approach to this issue, what is absolutely imperative at this stage is engaging the major economies. That is the first objective. Twenty-five countries account for 83 percent of global emissions of greenhouse gases. This is the core group that needs to act. And it includes the United States, China, India, the EU countries, Russia, Japan and others.

But it is important, at the same time, that we recognize the tremendous diversity within this group. Their per capita emissions range by a factor of 14; per capita incomes by a factor of 18. You cannot ignore these statistics in thinking about who is responsible for climate change and to what degree, as well as who must do what to address it.

This leads to a second principal objective: We need a more flexible framework, one that can accommodate different approaches by allowing for different kinds of commitments by different countries. Nations will work collectively to address climate change only if they can take approaches consistent with their national interests, and these will vary from country to country. So we need a framework that allows for different paths, but at the same time gets us all moving together, in the same direction.

So those are two of the objectives identified in the Pocantico report: we need to engage the major economies; and we need a flexible framework. In considering how we achieve these objectives, the dialogue participants identified six possible elements of a comprehensive, multilateral framework. This conference has adopted the theme of “connecting the dots,” and I believe the six elements recommended by our dialogue can be viewed as dots that have to be connected in order to create a fair and effective global approach.

The first of these is an aspirational, long-term goal. California’s goal of reducing emissions 80 percent by 2050 is an example of this. The EU has established a different type of goal: limiting global temperature rise to 2 degrees Celsius.

The Framework Convention establishes the ultimate objective: stabilizing greenhouse gas concentrations at a level that avoids dangerous human interference with the climate. But what does that mean? Many scientists favor limiting atmospheric concentrations of greenhouse gases to no more than 550 parts per million—roughly double the pre-industrial level. And that, in turn, means we need to reduce global emissions by 55 to 85 percent below what is currently projected. The Pocantico group cautions against trying to negotiate a quantified long-term goal at this stage; getting agreement on a specific number would just be too tough. But the report calls on governments and others to continue articulating their own visions of the long-term goal as a way to informally guide and propel the international effort.

The second element that emerged from our dialogue—our second dot to be connected—is adaptation. We know that no country will be immune from the effects of climate change, but it will clearly have a disproportionate impact on people living in poverty in the developing world. And, as we develop global strategies for adapting, we must target the unmet needs of the most vulnerable as a first priority.

An estimated 97 percent of all natural disaster-related deaths happen in developing countries. These countries need help doing two things: they need help recovering from climate-related disasters; and they need help integrating climate risk into their development planning so that over time they become more climate-resilient. This includes investments in safe drinking water supplies, better sanitation, sustainable farming, safer housing. That is what we mean by adaptation, and it has to be a priority for all nations, both individually and collectively.

Next on the list of six approaches laid out in the dialogue is the use of emissions targets and trading. This is the approach Kyoto takes—setting a target for reducing emissions and then allowing companies (and entire nations) to trade emission credits to achieve their targets as cost-effectively as possible. Trading is also an approach that would do wonders for California as your state weighs how best to meet the governor’s targets for reducing emissions. And I was pleased to see that the California Climate Action Team is considering trading as an important element of a statewide program.

Looking globally, the dialogue participants strongly endorsed market-based approaches as a core element of the international effort, but said we shouldn’t necessarily limit ourselves to Kyoto-style targets setting binding absolute caps. Other options could be intensity targets, or so-called “no lose” targets, which would allow developing countries. to sell credits if they do better than their targets but impose no penalty if they fall short.

The fourth element covered by the dialogue is what we call sectoral approaches. The idea here is to structure international commitments around specific sectors of the economy, such as transportation, power, land use, steel, cement—any sector that is responsible for a big chunk of emissions.

Again, California’s approach clearly includes what we would call a sectoral strategy. In the electricity sector, for example, your state has a target to produce 20 percent of electricity from renewables by 2010. In transportation, California has greenhouse gas standards for new vehicles. And for buildings, the state targets the building sector with the most stringent energy efficiency requirements in the nation.

That is a sectoral approach. At the international level, one advantage of this approach is that it may be possible to achieve significant reductions by engaging a relatively small number of countries. Think about cars, for example. An agreement among 15 countries and an even smaller number of companies would cover most of the global market.

Here is another example of a sectoral approach: you focus on an energy-intensive sector, like aluminum or steel or cement production, and you have the major companies involved agree to a set of objectives for reducing emissions, and those objectives, in turn, are endorsed by the governments where the facilities are located. Yet another example would be to establish a set of goals for increasing, maintaining or slowing reductions in carbon stocks in agriculture or forestry.

The fifth element we have called “policy-based approaches”—we are not talking about quantitative targets here but about having countries commit to specific policies to reduce their emissions. A couple of examples: increasing the use of renewable energy sources; raising fuel economy standards; or expanding the use of cleaner fuels.

The notion here is to encourage countries to integrate climate goals into their development planning and to allow policies to be tailored to specific national circumstances—in much the same way that California has tailored policies such as trading, greenhouse gas reporting, and support for biofuels to this state’s unique objectives and needs. Again, flexibility is key. And California’s embrace of a diverse portfolio of policies could, in fact, be a model for international action.

Last but not least on our list is technology cooperation. While it is clear that existing technologies can give us significant reductions on a global basis, it is also clear that we are going to need new, breakthrough technologies. And there are two ways to do this: first, you use policies and targets to pull climate-friendly technologies to the market; and second, you push the development of new technologies through R&D and related activities. I have talked a lot about the pulling part in my remarks. Technology cooperation starts to get at the need for a push. From fuel cells to biomass, carbon capture and storage, and next-generation nuclear reactors, governments need to work together to coordinate and increase their support for technology development—and to deploy both existing and new technologies in developing countries.

California, again in the lead on these issues, is initiating a coordinated investment strategy to help accelerate the development of climate-friendly technologies, using its public benefit and pension funds and first class universities. And that is exactly the attitude we need among governments—without picking winners, so to speak, we need policies and investments that are targeted and specific enough to give promising technologies a start down the road toward significant deployment.

Those are the six elements of an international approach—the six dots to be connected, as laid out by the participants in the Climate Dialogue at Pocantico.

They are: 1) an aspirational, long-term goal; 2) adaptation; 3) emission targets and trading; 4) sectoral approaches; 5) policy-based approaches; and 6) technology cooperation.

And it is my hope that, as the other dialogues on this issue move forward (I am talking here about the dialogue under the Framework Convention and the G-8 dialogue as well), they will take these ideas and these conclusions to heart.

In closing, I want to say that it occurred to me as I was putting these remarks together that I completely dispensed with my usual overview of the case for action on this issue. And I suppose that’s because, in the course of our Climate Dialogue at Pocantico, there was very little discussion about the need to do something about climate change. On that point, this diverse group of people from around the world, including senior government and business and civil society leaders, was entirely in agreement.

The major resistance to action on this issue, although much diminished, still resides in the same places where it has always been—places where people feel that their profits or their livelihood or their political support will somehow be threatened by the kinds of changes I have talked about today. But we need to make it absolutely clear to these people and others that the changes we are talking about are not only about protecting the climate; they are also about protecting our economies and our competitiveness in the decades to come. To the extent that we make this clear, we will indeed be connecting the dots on climate change and creating the conditions for real solutions to flourish.

So dots all. Thank you very much.