|
Remarks by Eileen Claussen, President, Pew Center on Global Climate Change
Thank you very much. It is an honor to be here and to share the speaking duties with so
many distinguished individuals. I want to thank the Alliance to Save Energy for convening this timely and important dialogue on the connection between energy efficiency and climate change.
As we gather here on Capital Hill, I would just like to note that the Congress is saving energy by working short weeks and accomplishing very little. Of course, I know the Alliance would like to accomplish a lot today, and they have a very efficient schedule, so let me move quickly to the meat of my remarks.
Energy efficiency is indeed the first solution for addressing climate change, as the title of this conference claims. Efficiency cannot do it all—we will also need to carve out an expanded role for existing low-carbon energy sources and develop new ones too. But we have to get started now, and energy efficiency is the immediate path forward. Becoming more energy-efficient is not that hard. Growing numbers of states and businesses are showing it’s possible, but we need a strong policy push at the national and international levels to achieve real progress.
At the Pew Center, as many of you know, we work with 41 mostly Fortune 500 companies. All of the members of our Business Environmental Leadership Council are taking practical steps to reduce their contributions to climate change – and one of the first things they do is to become more efficient. GE, for example, has set a target to improve the company’s energy efficiency by 30 percent by 2012, and virtually all of more than 30 companies with emission reduction targets intend to meet those targets at least in part with energy efficiency.
And then there is Wal-Mart. Wal-Mart has launched an effort to reduce its overall environmental footprint, and key parts of their strategy include eliminating 30% of the energy used in their stores, and doubling the fuel efficiency of their trucks in the next 10 years. They also have begun working with their suppliers, since the gains that can be achieved by working with their suppliers and customers can dwarf what they alone can do within the company.
And business leaders aren’t alone in recognizing that addressing climate change presents new economic opportunities. Many states are looking at this issue in the same way: as an opportunity to reduce energy use, promote greater efficiency, carve out new markets and support emerging businesses. California received a lot of attention (and deservedly so) a couple of weeks ago when lawmakers agreed on ambitious targets for reducing the state’s emissions. But as we all know, there are numerous other examples of states taking the lead on this issue in other ways. At the Pew Center, we track state activity on climate, and note that there are as many as 25 states with public benefit funds that support energy efficiency projects.
What these examples show is that it is possible to address the issue of climate change while keeping the bottom line strong – and the first step in virtually every case involves becoming more efficient.
The real question is how we build on what is happening in these companies and these states—because what is happening now, good as it is, is clearly not enough. We need to figure out how to mobilize broader action to reduce greenhouse gas emissions through improved energy efficiency and other solutions.
The current Administration is very fond of talking about voluntary programs. And voluntary programs are important—the companies I have mentioned all are acting on a voluntary basis. But voluntary efforts, by themselves, are not enough to deliver the economy-wide reductions we need. In fact, even as the White House promotes voluntary action, U.S. emissions continue to rise. Last year, DOE reported a 2-percent jump in greenhouse gas emissions between 2003 and 2004. Since 1990, our emissions have increased by more than 16 percent. We need to reverse this trend, and the sooner the better.
How can this be done? If efficiency is the key to turning the tide on climate change then policy is the key to turning the tide on efficiency. This means that lawmakers around the world need to embrace their role in making our communities and our societies more energy-efficient.
Let’s look at domestic policies first. As we all know, there has been a real reluctance in this town even to talk about how to begin reducing the U.S. contribution to climate change. But that, I believe, is changing. Last year, during debate on the Energy Policy Act, a majority of senators for the first time expressed support for a mandatory, market-based program to slow, stop and ultimately reverse the growth in this nation’s greenhouse gas emissions. Senator Pete Domenici, the Republican chairman of the Senate Energy Committee, said: “I am convinced we must proactively address climate change.”
So, although I believe the debate has shifted from the problem to the solution—and that is a very important step—we still have a long walk in front of us. To get the emissions reductions we need from energy efficiency and new technologies, we will need a mandatory cap-and-trade program like that envisioned in legislation from Senators John McCain and Joe Lieberman. And we will also need an array of other policies that promote energy efficiency and that provide both the push and the pull to bring new energy technologies to the market.
We will also need to engage more forcefully and more substantively in the international negotiations on this issue—and that is what I really want to talk about. The United States has essentially left it to other countries to develop the policies and the strategies that could potentially lead to worldwide progress on this issue. And that is a shame for two reasons. First, because international action is essential – and that means engaging all the major greenhouse gas emitting countries. And second because quite simply, the world can’t do this without us.
A cursory look at the International Energy Agency’s 2005 World Energy Outlook will drive home the first point on the international nature of this issue.
With no change in global policies, the world’s demand for energy is expected to rise by more than 50 percent in the next 25 years. Likewise, energy-related carbon dioxide emissions will grow by an estimated 52 percent. And more than two-thirds of the growth in world energy use will come from developing countries. So even if we were to get smarter about our own energy efficiency and carbon profile here in the United States, global energy use will continue to surge and climate change will remain a significant threat. This is truly a global issue that demands a global solution.
The second reason the US must be part of the international game is this: for as long as I have been involved with global environmental issues, the United States has had the ability to play a constructive and essential role in developing global frameworks and in conducting international negotiations. We haven’t always played that role, but there is no question that in the area of climate change, we hold many of the cards needed to solve this issue.
We produce and consume more of the world’s energy than any other country. And we are the world’s largest economy, have the largest industrial output, and are the largest emitter of greenhouse gases. And – here is the important part: we believe in market-based solutions that allow industry to do what it does best—innovate and bring to market the best new products and processes. Truly, there can be no effective global solution without us.
So what kind of global framework will be required to tackle this problem effectively? Two years ago we launched a Pew Center initiative that hints at some of the answers. We called it the Climate Dialogue at Pocantico and it was a series of discussions with 25 senior leaders from governments and business’ around the world. Participants came from the United States, the UK, Germany, Japan, Australia, China, India, Mexico, Brazil, and other countries. And they also came from the oil, power, coal, aluminum, chemical and auto sectors. The goal: to trace out a post-2012 framework for international action on this issue.
Among the U.S. policymakers who participated were senior staff from the offices of Senators Richard Lugar and Joseph Biden, the chairman and ranking minority member of the Senate Foreign Relations Committee. Shortly after our Pocantico recommendations were announced and in the lead up to the Montreal Negotiations, these two Senators introduced the Lugar-Biden Resolution. The Resolution calls for stronger U.S. engagement in the international climate effort – and although it is non-binding – it passed in committee by voice vote, thereby becoming the new benchmark for US involvement in the international climate arena.
Today, I would like to give you a thumbnail sketch of the Pocantico recommendations. The group strongly endorsed market-based approaches as the core element of the international climate effort, and participants said we shouldn’t limit ourselves exclusively to Kyoto-style targets setting binding caps on emissions. We agreed that we need to engage the 25 countries that account for 83 percent of global emissions; that we need flexible approaches since these 25 countries are exceedingly diverse (per capita emissions range by a factor of 14 and per capita incomes by a factor of 18). We agreed that we need near-term action with a long-term focus; that we must integrate climate and development, since developing countries will be assuming an increasing share of global emissions; that we must address adaptation; and finally, that we need an approach that is viewed as fair and equitable.
We also endorsed a variety of different strategies, suggesting that different countries could go about reducing their emissions by using different policies is different ways, and by assuming different kinds of obligations. For example, one of the key strategies to emerge from the group was a sector-by-sector approach, an important element if we are to deal with the competitiveness impacts that might emerge among heavily traded commodities. Here is how it might work: you could have the major companies in a sector—say, steel or cement—agree to a set of objectives for increasing efficiency and reducing emissions. Those objectives would then be endorsed and codified by the governments where the facilities are located. This, in turn, could lead to performance standards, or “best practice” agreements among the participating countries.
A second approach endorsed by the dialogue was targets and trading. However, while the Kyoto Protocol and other existing trading systems focus on absolute targets for emissions, a future framework could look at different types of targets for different countries. For example, developing countries could consider no-lose targets, where beating the target would result in extra credits, but missing a target would not have a
penalty.
Yet another approach that the group put forward as a potential solution included policy commitments. Again, rather than specific targets, governments could commit to specific policies to reduce their emissions. An example would be raising fuel economy standards; or increasing efficiency standards for other products; or adopting cost-based pricing—all of which would bring new gains in efficiency, and reductions in emissions.
Flexibility, of course, is going to be a crucial element of any approach. The participants in our climate dialogue suggested that countries should be able to contribute to the international effort in ways that best serve their development goals, while at the same time delivering real benefits for the climate. And in the short run at least, the bulk of those benefits are going to come from gains in efficiency.
Yes, energy efficiency is the first solution. But it is not the only solution, as I have said. And it also is not something that will just happen. Like all of the other solutions to climate change, energy efficiency needs a strong push and pull from policy. The lawmakers here on Capitol Hill need to start getting serious about both the challenges and the opportunities that climate change presents. And they need to understand that energy efficiency is more than a “personal virtue.” It can deliver an array of benefits—for our security, for our economy, and for our climate.
Thank you very much. I welcome your questions.
|
