Prepared remarks by Bob Perciasepe
President, Center for Climate and Energy Solutions
Challenges for the New President
Harvard University Center for the Environment
Cambridge, MA
November 15, 2016
I want to thank Doctor (Daniel) Schrag and the Harvard University Center for the Environment for inviting me to speak. And my thanks to all of you for coming to listen. Dan and I have been talking for some time about my coming up from Washington to do a lecture. I’m not sure either one of us had quite this backdrop of current events in mind.
What a week. I know folks are still processing what happened seven nights ago and what happens next. The truth is: Elections have consequences. That’s why it’s so important to exercise our right to vote.
It’s too soon to tell exactly what steps the next administration will take on climate and energy policy. The rhetoric of campaigning doesn’t always exactly match the realities of governing. We hope President-elect Trump and his advisers take some time to study the issues and hear a broad range of perspectives.
They’ll find that a majority of Americans support stronger climate action.
They’ll find that many cities and states are promoting energy efficiency, deploying renewable energy, and supporting alternative fuel vehicles.
And they’ll find that business leaders recognize the rising costs of climate impacts, and also see opportunities in clean technologies. You could say they want to “win” in the growing global clean-energy economy.
This evening, I want to explore three questions:
To put my remarks in context, it helps to know a little bit about my organization C2ES – the Center for Climate and Energy Solutions. C2ES is a nonpartisan, nonprofit think tank. We work to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts.
We believe a sound climate strategy is essential to ensure a strong, sustainable economy. I want to underline that. It’s a conviction our think tank was founded on. And it’s a message I hope you’ll leave here with tonight: Environmental and economic progress go hand in hand.
I came to C2ES a little over two years ago because of its reputation:
The idea of bringing disparate groups together is part of our DNA. Here are four quick examples:
At the international level, C2ES brought together negotiators from two dozen countries for a series of private discussions that helped lay the groundwork for the landmark Paris Agreement.
Our Solutions Forum is fostering collaboration to reduce emissions, mobilize climate finance, and strengthen resilience to climate impacts. That last one — climate resilience — is relatively new. With communities experiencing climate impacts here and now, it’s something we can’t afford to ignore.
We recently partnered with The U.S. Conference of Mayors to create the Alliance for a Sustainable Future, whose goal is to strengthen public-private cooperation.
And our multi-sectoral Business Environmental Leadership Council is the largest U.S.-based group of companies devoted solely to addressing climate change.
That’s who we are and where I’m coming from. Now, let’s look at the some of the realities facing the next administration.
Depending on your point of view, this was either a “Change Election” or a “Fear of Change Election.” What I can tell you is that it wasn’t a “Climate Change Election” because nobody was talking about it.
Climate change didn’t come up once in any of the presidential debates. The only question about energy policy came from that guy in a red sweater, Ken Bone. Climate change was not top of mind in the voting booth. Asked before the election where climate change ranked among their concerns, voters put it No. 19 out of 23.
But when asked where they stand, the majority of Americans – of all political viewpoints — support climate action. A majority of Democrats, Independents, and Republicans support funding renewables research, providing tax rebates for energy-efficient vehicles or solar panels, and regulating carbon dioxide as a pollutant.
Americans support climate action because they understand that climate change is occurring, and that human actions are largely responsible.
Here are a few more facts:
Another reality is that our energy landscape has already changed. This isn’t your grandfather’s energy system. When I was born, the United States didn’t get any commercial power from natural gas or nuclear. Zero. Now those two sources together are responsible for more than half of our electricity.
Let’s talk a minute about those two. First, natural gas. Thirty years ago, before many of you were born, it was illegal to use natural gas in a power plant. Now it makes up more than a third of U.S. electricity supply. Coal makes up another third of our energy mix, down from about half 10 years ago. This change is due in large part to market forces. Natural gas is inexpensive, so utilities have switched to if from coal.
These same market forces are posing a challenge for nuclear energy. Nuclear is responsible for more than 60 percent of zero-carbon electricity in the United States – It’s the biggest source. A number of reactors have been closing prematurely, which could make it even harder to meet our climate goals.
Renewables have been surging as costs have plummeted. Wind and solar generation have grown nearly twelve-fold since 2005. That’s nearly eight times greater than expected.
Thanks to diversifying our energy mix, and improving energy efficiency, power sector emissions have fallen by more than 20 percent in the past 10 years. We’re moving in the right direction. The challenge will be to keep doing so.
What can we expect from the new administration? I’ve been getting two questions for the past week: What will happen to the Clean Power Plan? And what will happen with the Paris Agreement? So let’s talk about those.
Every new president usually halts regulations that are in the process of being formulated, so we can expect that. For a final regulation, like the Clean Power Plan, a simple stroke of the pen can’t undo it. It’s a process. First, they’d have to do a rule-making, which requires public comment. Then, they’d need to come back with an alternative plan. That’s because under previous Supreme Court rulings, EPA is still under a legal obligation to reduce greenhouse gas emissions. It’s mandatory. They’ll be sued if they don’t.
The Clean Power Plan is currently in the courts. So we could find ourselves replacing the current legal uncertainty with new and different legal uncertainty.
On a positive note, the Clean Power Plan prompted a lot of state environmental officials, public utility regulators and other stakeholders to sit down together for the first time to talk about electricity reliability, efficiency and affordability. We hope those conversations bear fruit.
There’s no doubt that the Clean Power Plan could reduce power plant emissions faster and further than no plan at all. But progress has already been made and I think there are ways it can continue.
Mr. Trump has also said he wants to “cancel” the Paris Agreement. The bottom line is that he could legally pull the U.S. out of it. Let’s think through, practically, how that would work out for us. Consider that virtually every country in the world has committed to taking climate action. The Paris Agreement is a bottom-up, flexible framework. It relies on peer pressure. If we want to hold other countries accountable, we have to hold up our end. If we walk away from our commitments, we also give up being a player in the innovative energy and transportation technologies that can create U.S. jobs. China, Brazil and the US led the world last year in employment in renewable energy.
The Paris Agreement has widespread support among the business community. Eleven major companies we work with, including Berkshire Hathaway Energy, Microsoft, National Grid, and Shell, signed onto a C2ES statement applauding governments for bringing the agreement into force so quickly this month. Businesses say the agreement provides long-term direction, promotes transparency, and addresses competitiveness.
Because the Paris Agreement is flexible, there are a lot of ways for an individual country to tailor its efforts. It was also designed to be durable – It can survive shifts in political currents. The nearly 100 other countries that have already ratified it are reducing emissions for a variety of reasons, including economic opportunities and health benefits to their people. I expect they will remain committed to moving forward.
As for what else we can expect – we’ll have to wait and see. From opening up public lands and offshore areas to more drilling to re-assessing pipelines to appointing agency leaders with very different priorities from the past eight years, we’re going to see changes.
So that brings me to my final question tonight: What can we do to promote environmentally responsible policies in the years ahead? Let’s look at four vantage points – federal, state, local, and business.
First: The executive branch has been the focus of climate action for a number of years. That’s going to change. I want to posit that it may be time to return our focus on the legislative branch. Three areas where bipartisan support already exists are: building infrastructure, incentivizing carbon capture technologies, and preserving the nuclear fleet.
Both presidential candidates talked about the need to modernize our aging infrastructure. That’s not just roads and bridges. We need to modernize our electric grid to move renewable power from where it’s generated to where it’s needed. We need to improve the natural gas pipeline system to reduce leaks. And we need to expand electric vehicle charging. The electric grid should be able to accommodate clean energy technologies like energy storage, time-of-day pricing, and grid-to-vehicle interfaces.
Millions of miles of pipes carrying drinking water and wastewater are nearing end of life. And it takes a lot of energy to move a gallon of water. The nation’s utilities lose about $2.6 billion dollars annually from trillions of gallons of leaked drinking water.
Infrastructure projects can also help communities be more resilient to extreme weather, make communities more livable, increase property values, and save energy and water. And, of course, infrastructure projects create jobs.
The second area where we could make progress is carbon capture, use and storage, or CCUS. Some of you might be skeptical about this as “clean coal.” The truth is, there’s no scenario for achieving the emission cuts we need globally without carbon capture. We need to keep emissions out of the air not only from coal and natural-gas power plants around the world, but also the industrial sector like steel, chemical, and cement plants. The industrial sector is responsible for more than 20 percent of U.S. greenhouse gases.
Right now, there are bipartisan bills in the House and Senate that would spur carbon capture technology. Imagine Senate Majority Leader Mitch McConnell and Hillary Clinton’s running mate, Senator Tim Kaine, on the same bill. It’s true.
A third area where we might get some bipartisan agreement is preserving our nuclear fleet. There’s a bill right now that both Senators Whitehouse and Inhofe support. From a climate perspective, it doesn’t make sense to prematurely close nuclear plants when, in the short- and medium-term, they cannot realistically be replaced by zero-emission power sources. Keeping these reactors operational also buys us time to address energy storage and transmission challenges to support more renewable generation.
Let me add one more area as a possibility where we might see some agreement at the federal level: helping the communities most affected by the transition to clean energy. Remember that market forces – not regulations — have mainly been driving the decline of coal. And natural gas will continue to displace coal in our power generation fleet at current prices. There are no plans for new coal-fired power plants in the United States. What coal communities need is opportunities for new jobs. The United States could be world leaders in manufacturing clean energy and transportation technologies. More Americans work now in the solar industry than work in either oil & gas extraction or coal mining. It will take a concerted effort involving education and training, but we have to help.
Moving to the states, which have always been the incubators of policy, we’ve seen a lot of progress on clean energy. Twenty-nine states require electric utilities to deliver a certain amount of electricity from renewable or alternative energy sources. Ten states that are home to a quarter of the US population already have a price on carbon and are successfully reducing emissions. Those states are California and the nine Northeast states, including Massachusetts, in the Regional Greenhouse Gas Initiative (RGGI). RGGI has added $243 million in value to Massachusetts’ economy. Massachusetts has also been named the most energy efficient state in the country for the last six years.
Every state has either an operational wind energy project, a wind-related manufacturing facility, or both. Some of the biggest wind energy producers are Texas and Iowa. They won’t want to reverse the economic prosperity they’ve seen as a result. America’s first offshore wind farm has just come online off Rhode Island, launching new industry with the potential to create jobs in manufacturing and the marine trades.
Time and again, we’ve seen leadership at the state level and I expect that will continue.
On environmental policies, so much often comes down to the local level. Many cities have already taken the ball and are running with it. They’re improving the energy efficiency of buildings, deploying cleaner energy, and encouraging cleaner transportation.
Cities see the real and rising risks of climate change. They’re dealing with the impacts now. They also see opportunities to for energy and transportation systems that are cleaner and more efficient than today. To keep their efforts moving forward, partnership and collaboration will be key, especially between cities and companies.
That’s why we at C2ES recently launched a partnership with The US Conference of Mayors called the Alliance for a Sustainable Future. The main goal is to spur public-private cooperation on climate action and sustainable development in cities. Santa Fe Mayor Javier Gonzales is leading the steering committee. Founding sponsors include JPMorgan & Chase Co., Duke Energy, and AECOM, and the mayors of Austin, Des Moines, New York City, and Salt Lake City.
Finally, business leadership has been and will continue to be crucial in transitioning to a clean energy and clean transportation future. A C2ES study found more than 90 percent of the companies in the S&P Global 100 Index see climate change as a business risk. They see rising sea level and more frequent and extreme heat waves, downpours and drought damaging and disrupting their facilities and operations, supply and distribution chains, and water and power supplies.
More than 150 companies — from Alcoa to Xerox — signed the White House American Business Act on Climate Pledge. They committed to cutting emissions, reducing water usage, and using more renewable energy. Business leaders see opportunities in clean energy and transportation.
Here’s another thing to think about, the power of the consumer. In the past year, three in 10 Americans say they’ve rewarded companies for taking steps to address climate change.
The reality is that we have strong momentum in the right direction. Our economy has begun decarbonizing. Power sector emissions are down, thanks largely to market forces and to incentives for renewable energy that have strong bipartisan support. Many cities, states and companies, along with a number of congressional Republicans, want to keep that momentum going. Smart investments and technological innovation have started America on a clean-energy transition. Building on that momentum will protect communities from rising climate damages and will contribute to strong and sustained economic growth.
The longer we wait to address climate change, the costlier it will be. I urge all of you to work at the local and state level to support common-sense policies that lead us toward a sustainable future.