WRI Publications Feed: Climate, Energy & Transport, Testimony

Testimony: American Energy Security and Innovation: An Assessment of North America's Energy Resources

Sarah Parsons — Tue, 05 Feb 2013 15:21:07 -0500

Summary of Key Points

Our energy choices need to factor in both opportunities and risks. This testimony gives particular attention to why we must consider the risk of climate change, both on our resources being developed and utilized today and on our choices for development into the future. It concludes with the following recommendations:

Congress should request that the National Climate Assessment and Development Advisory Committee review the current authorities of federal agencies and national laboratories, and recommend how consideration of risks associated with climate change can be more directly incorporated into decision-making.
Congress should support efforts to better assess the impacts of climate change on America’s energy infrastructure and incorporate this into planning and investment decisions.
Congress should keep in mind four important criteria in considering policies to drive more effective clean energy growth and competitiveness: any energy policy should be comprehensive, long-term, targeted, and inclusive.
In capturing energy efficiency across the economy, Congress can play a constructive role in two key areas:
- Informed consumer choice: supporting and expanding programs to help ensure product labeling is accurate and publicly reported in a timely manner, to encourage energy-wise investment decisions throughout the U.S. economy.
- Efficiency standards: supporting and extending the ability of federal agencies to develop and update energy efficiency standards for vehicles, appliances, and other energy-consuming equipment that is sold into U.S. commerce.
Congress must work toward reaching bipartisan agreement on national energy policies that encourage more efficient energy consumption, increase the diversity of domestic energy production, maximize deployment of low-carbon energy technologies, and minimize environmental impacts throughout our energy systems. In the near-term, it is also critical for Congress to provide funding and incentives for low-carbon and clean energy technologies.

Testimony: China's Prospects for Shale Gas and Implications for the U.S.

Maggie Barron — Thu, 26 Jan 2012 09:51:49 -0500

Testimony Of Sarah M. Forbes
Senior Associate, Climate and Energy Program
World Resources Institute

HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION

CHINA’S GLOBAL QUEST FOR RESOURCES AND IMPLICATIONS FOR THE UNITED STATES; CHINA’S PROSPECTS FOR SHALE GAS AND IMPLICATIONS FOR THE U.S.

Introduction

Good morning and thank you for the opportunity to contribute to the deliberations of this Commission. My name is Sarah Forbes, and I am a Senior Associate for the Climate and Energy Program at the World Resources Institute. I am also manager of the World Resources Institute’s Shale Gas Initiative.

I am delighted to speak with you today about China’s prospects for shale gas and the implications for the United States. The United States and China share an interest in the domestic and international development of shale gas resources. In this testimony I will describe the state of China’s shale gas industry as well as the governmental policies that will drive its future development in China. I will discuss the implications of U.S.-China business-to-business partnerships as well as government-to-government cooperation―including the risks and opportunities such cooperation could yield. I will also describe how shale gas development in China and the United States changes the global dynamics of energy security. In conclusion, I will provide recommendations for future actions Congress and this Commission can take. In the interest of time, I have limited the scope of my testimony to a discussion of the implications of shale gas development in China on the U.S. and China.

Considering the speed with which shale gas has shifted the U.S. energy outlook1, this is an important moment to consider the implications of the development of China’s shale gas resources. Development of shale gas in China will shift future global energy dynamics. How it is done will affect the environment and global climate picture. As I describe in this testimony, shale gas can help improve international energy security by providing an abundant domestic energy resource and reducing the need for natural gas imports. What role it plays in addressing climate change will depend in large part on the degree to which shale gas displaces inefficient coal plants and supplements continued improvements in energy efficiency and renewable energy.

As I start, I would like to emphasize the following key points, which I will describe in detail in the sections that follow.

1. Current state and future direction of China’s shale gas industry: The shale gas industry in China is in early development, but the topic has already garnered significant interest from the national government. The Chinese government is implementing new policies that support the future development of China’s gas industry broadly, as well as supporting shale gas research. State-owned and provincial-owned enterprises are conducting exploration and pilot demonstrations on shale gas in China. Through its state-owned enterprises, China2 is also investing in shale gas development in the United States.

2. U.S.-China cooperation on shale gas: The global oil and gas industry operates joint ventures (JVs) to sustain growth and defuse financial risk. The emerging international shale gas industry will rely on the same tactics, particularly given the current state of the global economy. In recent years, major investments or partnerships between U.S. and Chinese companies in the shale gas sector have been used to the near-term economic benefit of both countries and provide potential for U.S. companies to benefit domestically and abroad.

3. Impacts on the energy situation in China: Shale gas development in China will reduce natural gas imports, thus improving China’s energy security. Because total natural gas demand will continue to far outstrip all domestic production for the foreseeable future, any natural gas from shale in China is expected to be consumed domestically. From an environmental perspective, the more China can develop energy alternatives to imported oil and domestic coal, the less pressure it exerts on global energy markets and the global environment. China’s domestic use of its own natural gas resources would be unlikely to have an effect on net U.S. energy imports, as the U.S. is projected to domestically produce sufficient quantities of natural gas to meet its own demand for at least the next 25 years.

Throughout my testimony, I will also emphasize a fourth point that cross-cuts these three themes.

4. Ensuring responsible operations and creating a “level playing field”: Shale gas development should proceed in China (or any country) with environmentally and socially responsible operations which are (1) enforced by appropriate laws, regulations, and standards, (2) realized through implementation of international best practices, and (3) based on an understanding of the real risks and benefits of responsible deployment (both to industry and the public). Such approaches drive demand for U.S. products and ensure a “level playing field” between companies operating in the United States and those in China. More importantly, they help ensure that any negative environmental impacts associated with shale gas development in the United States are not repeated elsewhere.

Read the full testimony here >>> (PDF, 454 Kb)

Testimony Before the Subcommittee on Energy and Power: The Transformation of China's Energy System

Deborah Seligsohn — Mon, 04 Apr 2011 14:50:47 -0400

Testimony Of Deborah Seligsohn
Senior Advisor, China Climate and Energy Program
World Resources Institute

Hearing Before the Subcommittee on Energy and Power, Committee on Energy and Commerce

The Transformation of China’s Energy System: Challenges and Opportunities

Summary

In my testimony today, I will start by discussing both where China is now and its plans for the upcoming five years, and then I will talk about some of the business opportunities this creates for other countries, including the United States, that want to compete in new energy technologies.

Energy, environment and climate policy has become increasingly important in China in the last decade. As with any policy focus, there are a number of interests and drivers involved. The confluence of concerns about energy security, environmental protection, climate change and economic restructuring has strengthened the Chinese government’s commitment to both energy efficiency and non-fossil fuel development. Under the 11th Five-Year Plan (2006-2010), China made considerable progress. It came quite close to its energy intensity target, reducing energy intensity over the five-year period by 19.1%, and it increased non-fossil fuel use by 3.1% per year, so that non-fossil energy now comprises 8.3% of China’s total energy use.

In March, China’s National People’s Congress adopted its 12th Five-Year Plan. The plan sets 2015 goals that continue to focus on energy efficiency and non-fossil energy development and set China well on the way to meeting its 2020 goals made at Copenhagen. The five‐year goals are to reduce carbon intensity by 17% and energy intensity by 16%, to increase the share of non‐fossil fuels in China’s total energy mix to 11.4%, and to increase forest cover by 12.5 million hectares and forest stock volume by 600 million cubic meters.

While decreasing as a percentage of total energy used, coal will continue to be an important energy source for many years. To address the greenhouse gas issue, China is actively pursuing a research and commercial scale pilot program looking at carbon capture and storage, a technology China has a strong interest in mastering.

International partnerships with Chinese clean technology companies are growing rapidly. What makes China attractive to U.S. and international investors is the clear policy framework which gives businesses the certainty they are looking for before investing. Companies including First Solar, GE, Duke Energy and American Electric Power have all announced new initiatives in the last year. Increasingly entrepreneurs with new ideas are looking to China to make those ideas become a reality. With a similarly supportive policy environment, the U.S., with its unsurpassed research resources and proven track record in new technologies, could be an unsurpassable winner.

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Testimony Before the Congressional-Executive Commission on China: Measuring, Monitoring, and Reporting Energy and Climate Data

Maggie Barron — Thu, 01 Apr 2010 17:03:21 -0400

Testimony Of Deborah Seligsohn
Senior Advisor, China Climate and Energy Program
World Resources Institute

Hearing Before The Congressional-Executive Commission on China

China’s System for Measuring, Monitoring, and Reporting Energy and Climate Data

Thank you for the opportunity to contribute to the deliberations of this Commission. My name is Deborah Seligsohn, and I am Senior Advisor to the China Climate and Energy Program at the World Resources Institute. The World Resources Institute is a non-profit, non-partisan environmental think tank that goes beyond research to provide practical solutions to the world’s most urgent environment and development challenges. We work in partnership with scientists, businesses, governments, and non-governmental organizations in more than seventy countries to provide information, tools and analysis to address problems like climate change, the degradation of ecosystems and their capacity to provide for human well-being.

I am delighted to speak with you today about China’s systems for measuring, monitoring, and reporting energy and climate data, how these systems have been implemented and the opportunities for continuing to build capacity and improve these systems.

Measurement and reporting systems provide information for a number of different purposes. It is important to distinguish the functions we expect the system to provide – both in the development of the system itself, and in the evaluation of the system’s effectiveness and utility. Energy and climate data can be collected or disseminated for three purposes:
Measuring overall progress through national-level data. This is the essential level for evaluating any country’s commitments to any international climate regime. It is the level at which we compare country commitments. It is also essential for the country’s own purposes in considering energy and climate policy in the context of overall macro-economic policy.
Measuring the impact of specific programs or players – in other words the data needed for energy and climate policymakers to track progress toward specific policy goals. This includes measuring at the sub-national level since China allocates provincial and local quotas. It would include sectoral or company-level reporting to enforcement bodies (to the extent that enforcement is at those levels). Finally, it includes programmatic data – metrics collected to assess the progress of specific energy or climate programs.

Providing data that civil society can access (public transparency). The transparency function can occur at all levels from national to the local.

It is important to distinguish these three functions and the types of data needed to meet each goal, as well as the separate history of each type of data collection and dissemination in the international sphere.

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Testimony Before the Senate Committee on Environment and Public Works: Getting to Yes on Climate Change

Maggie Barron — Thu, 29 Oct 2009 11:44:48 -0400

TESTIMONY OF JONATHAN LASH
PRESIDENT, WORLD RESOURCES INSTITUTE

HEARING BEFORE THE UNITED STATES SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
“LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS AND AMERICAN POWER ACT”

Good afternoon and thank you for inviting me to testify today regarding the pending legislation, action of other countries to address climate change, and the implications of their action for the United States.

I am Jonathan Lash, president of the World Resources Institute. WRI is a non-profit, non-partisan environmental think tank that goes beyond research to provide practical solutions to the world’s most urgent environment and development challenges. We work in partnership with scientists, businesses, governments, and non-governmental organizations in more than seventy countries to provide information, tools and analysis to address problems like climate change, and the degradation of ecosystems and their capacity to provide for human well-being.

I have a single message to deliver today: The time is ripe for Congress to enact climate legislation to reduce emissions, establish energy security, and create new jobs in clean energy. Other nations are moving; the outcome depends on us.

We need global action to solve this global problem. Those who have worried that the United States might act alone need worry no more. The worry should be that without us, the rising global effort will falter. The worry should be that if we hesitate, we will miss the opportunity to lead the coming clean energy revolution.

With other nations acting, U.S. action now can make the critical difference.

Other countries across the globe are moving to take action to confront global warming. This has transformed the debate over this issue. The time is ripe for the United States to act and it is in our own interest to act promptly. In a nutshell, there are three reasons for this:

Action by other countries increases opportunities for the United States if we are prepared to seize these opportunities.
Steps by other countries help ensure that the United States will not be disadvantaged by taking action itself.
Action by the United States is essential to cement an agreement under which all countries commit to continue and increase the steps they are taking.

In order to take action, we need a better understanding of what we are facing. We need to understand the opportunities. We need to put aside old myths. We need to focus on the real problems and recognize the solutions to those problems. And we need to get busy so we do not miss this opportunity.

A changed landscape

As illustrated by Figure 1, almost 80 percent of global emissions are produced by fifteen countries (counting the European Union as a single country). A majority of these are developing countries, which, until recently, said they would not take action on emissions without clear action by wealthy countries. At the same time, all countries have recognized that the poorest would need assistance in deploying clean energy and preserving forests and also in adapting to minimize the damage from changes in the climate that are no longer avoidable. What has changed is that in the last couple of years, and even in the last few months, without waiting for rich nations to act, countries such as China, India, Brazil, Mexico, and South Africa are stepping forward with significant proposals and actions.

As explained below, China provides an important example among developing nations, but China is not alone. Mexico has pledged to halve its greenhouse gas emissions by 2050, employing a “cap-and-trade” policy like the one under consideration in the U.S. Congress. South Africa has presented a detailed plan to peak its national emissions by 2020. India has defined eight national missions in efficiency, renewable energy, and sustainable agriculture and ecosystems and is developing strategies in these areas. Recently, the Indian government announced it will offer new legislative proposals to tighten fuel efficiency standards and pursue other clean energy targets, and there have been indications of increased willingness to subject its actions to review. Deforestation accounts for about two thirds of Brazil’s greenhouse gas emissions. Brazil has said it would reduce its deforestation rate 70 percent from recent levels by 2017.

Among developed countries, a new government recently came to power in Japan, transforming that country from a laggard to a leader with an ambitious proposal to reduce emissions 25 percent below 1990 levels by 2020 if other major countries take ambitious action. The European Union position is that it will reduce its emissions by 20 percent regardless and by 30 percent if other developed countries take sufficient action. And Australia, heavily dependent on coal for consumption and exports, has said that it will cut its emissions by 25 percent below year 2000 levels if others take on similar actions.

The ball is now in our court, and it is in our interest to act. In December, the nations of the world will meet in Copenhagen, Denmark to try to reach agreement on plans to confront climate change. In order to reap the benefits of an agreement, we need to bring something credible to the table. That something is what this committee and this Congress write into legislation.

Let me explain what is at stake by focusing on China. China is a country taking action and looking at China helps us understand the problems, solutions, and opportunities before us.

The case of China

Some people have worried that action by the United States on climate change could put us at a competitive disadvantage if countries like China do not also take action and produce at lower cost. In fact, China is taking action, which can help assure that there is a level playing field. As I will explain, they are doing this because it is in their own interest, which should give us confidence they will continue. Instead of more delay, we should get an agreement that helps further to ensure that Chinese action on climate will continue and increase. But there is more. Not only should we lock in a commitment; we should work with China to reap the benefits of the new economic future emerging in the worldwide shift to clean energy.

Here are the facts. In 2005, realizing its growth in energy consumption was unsustainable for energy and climate security reasons, China launched a plan to reduce energy intensity 20 percent from 2005 levels by 2010. This may be the largest greenhouse gas mitigation program of any country. China also plans an increase in renewable energy to 10 percent by 2010. In 2007, China was second in the world in funds invested in renewable energy.

China, like the United States, is a major user of coal. However, China is closing inefficient coal plants, deploying state-of-the-art or better technology, and exploring carbon capture and storage (CCS) technology. These efforts can help improve coal technology and bring down the costs. U.S. – China collaboration on development of CCS and other coal technologies is already underway and opens vast opportunities.

At the Major Economies Forum in July, China and India for the first time agreed at the international level to a declaration to take action to meaningfully reduce emissions below business as usual, peaking as soon as possible. Also, they recognized the scientific view that temperatures should not exceed 2 degrees Celsius above pre-industrial levels.

In the first-ever speech by a Chinese President to the UN General Assembly in September, 2009, President Hu Jintao said China will reduce its carbon intensity by “a notable margin” by 2020.

Why are they doing this? “All politics is local.”

China’s aggressive action to improve energy efficiency and reduce emissions is not an act of global charity. China’s leadership realizes they cannot maintain growth and reduce poverty without conservation of resources. Pollution is choking off growth and producing social unrest. Adverse impacts from climate change are projected to undermine agricultural productivity and cause flooding in south China and along the coasts.

Qi Ye, deputy director of the China Sustainable Energy Program in Beijing says you have to “address the global issue in terms of local need” because people act on what they care about. Similar sentiments can be heard in other developing countries. In describing India’s new initiatives on clean energy, the Indian environmental minister said recently, “I want to be aggressive, because, frankly, we are a country that is climate dependent” because of rising seas and monsoons. “We may not have caused the problem, but we have to be part of the solution.”

How do we know they’re doing what they say? “Trust but verify.”

Self interest in taking action to confront climate change affords us some confidence that countries like China will follow through. Still, challenges remain. Reliable data are not always available and standards of enforcement, governance and transparency are variable. This is one of the reasons it is in our own interest to establish an international climate agreement. A key element in the negotiations is creation of a system for measuring, reporting, and verifying actions to give confidence that promises are being kept and action taken.

Just as President Reagan suggested to Soviet leader Gorbachev in signing the nuclear arms reduction treaty and quoting the Russian proverb “trust but verify,” trust is fine, but real confidence depends on verification.

Verification of China’s action to reduce emissions will be feasible. China participates in peer review and verification already under international agreements like the WTO and the Montreal Protocol to address ozone. The U.S. Environmental Protection Agency has worked with China in successful efforts to improve its control of sulfur dioxide emissions. China has already begun collecting and verifying energy data. Moreover, the United States could invest in satellite tracking as an additional way to help check up on whether China is meeting its commitments.

China and the United States – solving problems, seizing opportunities.

Some people have worried that China would steal American jobs by competing using dirty production processes. The reality is China is pulling ahead of us by being innovative and clean. If doubts remain, a global climate agreement can allay them by ensuring action by all that will help level the playing field. As a fallback, the House-passed climate bill protects energy-intensive U.S. industry by providing free allowances to comply with cap-and-trade, in the form of output-based rebates. When the rebates phase out a decade from now, the president is authorized to impose border duties if action by China and other countries has not done enough to level the playing field.

In September 2009, The Wall Street Journal said that a group of Western firms published a report anticipating a $500 billion to $1 trillion market annually in China for clean technology. In August and September, America’s third largest coal fired electric utility, Duke Energy Corp., announced agreements to explore clean energy and carbon capture projects with Chinese companies. In July, the U.S. and Chinese governments signed an MOU for joint research collaboration.

The opportunities are there in the vast Chinese and global markets and in collaboration with the Chinese and others in the private and public sectors. But to take advantage of the opportunities, the United States will have to get its act together to promote clean energy. We risk falling behind if we don’t move forward. Climate legislation is key because, by putting a price on carbon, it shifts investment into clean energy. The pending legislation also contains important new financial support for clean energy development, clean technology exports, and carbon capture and storage technology. Additionally, it creates economic opportunities in international carbon trading.

Getting it in writing – U.S. legislation and a global agreement.

Now what we need is a global agreement, confirming and strengthening the new trajectory of China, India and others. To realize the benefits of a global agreement, the United States needs to take action – better yet, take action and take the lead – to make the global agreement possible.

Both warming and the emissions that cause it are global. The economy, trade, and competition are global. A global agreement provides a basis on which countries can act with some confidence that others will do so as well. It can address issues of verification, competitiveness, and fairness, and it can create new opportunities for collaboration on clean energy.

In order to get that global agreement, Congress needs to take action on climate legislation so our negotiators can go to the negotiating table with what the United States will do – what emissions reductions we will achieve and what assistance we will provide to help less developed countries shift to clean energy and adapt to climate change.

U.S. negotiators have made clear that they will not commit the United States to greenhouse gas reductions and other critical points without a clear expression of political will by Congress. At the same time, other countries have expressed understandable reluctance to complete an agreement without a commitment from the United States. Thus, until Congress acts on U.S. legislation, the world cannot reach final agreement.

Only if all nations come forward with what they propose to do is agreement possible. The question is no longer whether others will act. They are acting. The question is whether we will act. The point is no longer that global warming cannot be addressed without those other countries. The point is that it cannot be addressed without this country and that we cannot gain the benefits of leadership unless we enact climate legislation.

Then we can not only avert the threat of dangerous global warming; we can reap the benefits of new jobs, economic growth, and energy security in the age of clean energy.

The United States has led the world through great economic and social changes and has thrived by doing so. This is an occasion and an issue on which the world again needs that leadership.

Additional Resources

Comparative Analysis of National Climate Change Strategies in Developing Countries (PDF, 631 Kb). This matrix helps policymakers compare the National Climate Change plans of five developing countries: India, Brazil, China, Mexico and South Africa.

FutureGen And The Department of Energy's Advanced Coal Programs

Wed, 11 Mar 2009 00:00:00 -0400

TESTIMONY OF SARAH M. FORBES
SENIOR ASSOCIATE, WORLD RESOURCES INSTITUTE

HEARING BEFORE THE U.S. HOUSE OF REPRESENTATIVES SCEINCE AND TECHNOLOGY SUBCOMMITTEE ON ENERGY AND THE ENVIRONMENT: “FUTUREGEN AND THE DEPARTMENT OF ENERGY’S ADVANCED COAL PROGRAMS”

Good morning and thank you for inviting me to testify today. I am Sarah Forbes and I lead the CO2 Capture and Storage (CCS) work at the World Resources Institute. The World Resources Institute is a non-profit, non-partisan environmental think tank that goes beyond research to provide practical solutions to the world’s most urgent environment and development challenges. We work in partnership with scientists, businesses, governments, and non-governmental organizations in more than seventy countries to provide information, tools and analysis to address problems like climate change, and the degradation of ecosystems and their capacity to provide for human well-being.

The World Resources Institute (WRI) has taken a lead in exploring the challenges, opportunities and state of technical knowledge in the field of carbon capture and storage. We convened a two year stakeholder process which resulted in the Guidelines for Carbon Dioxide Capture, Transport, and Storage published in November 2008 which can serve as a benchmark for decision-makers to use in evaluating potential projects. In developing the Guidelines, WRI brought together a diverse group of more than 80 technical experts including government officials, NGOs, academics and businesses.

Coal use is responsible for over 40 percent of global carbon dioxide emissions. Without significant, deliberate action to reduce these emissions we cannot address climate change. Carbon capture and storage is one of a number of critical technologies coal-burning nations will need to consider and deploy in the coming decades. International collaboration will be essential to moving CCS technology to scale – reducing costs and securing a global response to the climate challenge. In the next five years, we must move from demonstration to deployment.

In this testimony, I will provide an update on some of the key international collaborations on CCS already underway, and offer some ideas for future direction. I would like to make three key points, each of which I will expand on below.

First, I will describe the urgent need for a global network of CCS demonstrations that includes joint technology development along with collaboration on resolving investment, regulatory, legal and social barriers to CCS deployment.

Second, I will talk specifically about collaboration on CCS with one country—China. I will describe the efforts many countries and businesses are taking to ensure that at least one of the global CCS demonstrations is in China.

Third, I will describe a few of the major international CCS collaborations that are underway and offer suggestions for how these efforts may best complement each other as the technology is demonstrated worldwide.

I will conclude by providing some concrete suggestions for near-term actions that can be taken to enhance collaborations with China and facilitate global deployment of CCS technology.

Develop a Global Network of CCS Demonstrations

In technology development there is a period known as the “valley of death” where a technology has been proven in the laboratory and at a small scale but has yet to move from a research effort to commercialization. CCS technology has progressed quickly from an idea to a key part in proposed climate change mitigation plans. This progression is partly thanks to the early successes seen in the pilot capture demonstrations and research and commercial projects where CO2 has been injected at rates up to a million tons per year. Moving the technology forward into commercialization will require integrated capture and storage demonstration at power-plant scale. A key finding of the Guidelines for Carbon Dioxide Capture, Transport, and Storage was that even though additional research is needed in some areas, there is adequate technical understanding to safely conduct large-scale demonstrations. In fact, many of the remaining questions about CCS technology can only be answered by additional experience with the technology or policy interventions.

Most experts agree that we need between 15 and 20 demonstrations of differing capture and storage configurations globally. Last July, the G8 set a goal of 20 demonstrations announced by 2010. The U.S Climate Action Partnership (US-CAP), of which WRI is a member, further recommends building at least five projects of CCS enabled coal fueled facilities in the United States by 2015.

Achieving these goals in the right time frame is critical to deal with the looming climate challenge but at the same time will require significant investment. There is a need for establishing a clear and robust international financing mechanism to fund these projects globally. It will also require substantial (but not insurmountable) progress on addressing lingering regulatory, investment, legal, and social issues. The global development of environmental regulatory frameworks for CCS, is testament to our readiness to demonstrate the technology. In 2008, regulatory frameworks for CCS were released at the state and federal level in the U.S., and Australia and a Directive for CCS, which included environmental regulations, was passed at the European Union level. Global progression towards a common understanding of how to safely implement the technology seems within reach.

This effort of building a global network of CCS demonstrations will require a significant investment and commitment of resources, along with coordination and support from senior government representatives. However, through strong international collaboration each country need not demonstrate the full suite of capture and storage options. For example, when the UK first announced their plans to move forward with a post-combustion CCS demonstration, it was described as being complimentary to the U.S. FutureGen project which was at that time planning to demonstrate at-scale capture with an Integrated Gasification Combined Cycle (IGCC) plant. The collective group of global demonstrations should include the full suite of different capture configurations and test storage in a variety of geologic settings.

To address this need, Congress can commit funding for public-private partnership demonstration projects in the U.S. and formally participate in international demonstration efforts. CCS demonstrations will require billions in research funding with estimates at about $1-1.5 billion per project. Funding allocated in the American Recovery and Reinvestment Act of 2009 is important, but still falls short of what will be needed to commercialize CCS technology. A robust funding mechanism and clear plan for collaboration among demonstration projects is critical. One example of such a plan was recently approved by the European Union with funding for demonstrations coming from the proceeds the European Trading Scheme (ETS) and coordination among projects required. The global CCS demonstration network should include collaborative work on not only technology development, but also information-sharing on legal, social and regulatory issues.

Enhance Capacity for CCS Demonstration in China

According to the Energy Information Administration, China’s coal-related carbon dioxide emissions may grow to 51 percent of the world’s total by 2030. With 20 percent of the world’s population, China has 14 percent of the world’s coal reserves, but less than one percent of the world’s oil and gas reserves. While China is actively developing its non-carbon power sources─hydropower, nuclear, and newer alternative energies─rapid growth will still not be enough to replace coal as a core part of its expanding electricity infrastructure. Deployment of CCS in China may be the only way to globally make the needed reductions in carbon dioxide emissions.

China is conducting research and quickly moving towards developing and demonstrating CCS technologies. In fact, the Chinese government was among the foreign governments who had pledged to commit funding for the original FutureGen project. Chinese companies and government institutions are undertaking a CCS research themselves and with a number of international partners. For example:

The Chinese power industry has several projects focusing on coal gasification. The largest, GreenGen, sponsored by China’s five largest power companies, will build a 200 MW integrated gasification combined cycle power plant in the city of Tianjin. Phases two and three of this project plan for CCS in nearby depleted oil fields, with injection planned before 2020. U.S. Peabody Energy is the one international equity partner in this effort.
China has two major efforts with European collaborators, the UK-China Near Zero Emissions Coal Project (NZEC) and the COoperation Action within CCS CHina-EU (COACH) Project. Both have done a great deal of preparatory and conceptual work on CCS.
China’s Huaneng group built a small carbon capture demonstration plant at Gaobeidian in Beijing with assistance from Australia’s Commonwealth Scientific and Industrial Research Organization (CSIRO.) Discussions about a second phase are in process.
Both PetroChina, China’s largest oil company, and Shenhua, its largest coal company, have pilot CCS programs.

There is also a realization in China that robust policies and regulations will be needed to ensure that CCS projects are done responsibly. Tsinghua University has partnered with WRI to draft a set of Guidelines for Safe and Effective CCS in China. The effort is modeled after the stakeholder process led by WRI in the U.S. where a diverse set of stakeholders together developed a comprehensive set of guidelines for CCS projects. Development of a Guidelines document that is available in Chinese for potential project operators, financers, insurers, and legal experts to as a tool in understanding how to conduct CCS projects responsibly will facilitate demonstration of the technology in China. To enable this effort, Tsinghua University and WRI have assembled a steering committee that includes leading CCS experts from China and the United States. The Chinese members of the steering committee recently traveled to the United States and toured some of the leading CCS research institutions (including the injection well being drilled in Illinois). This effort is being funded with support from the U.S. Department of State under the Asia Pacific Partnership.

It would be to the benefit of both the U.S. and China if there were more direct collaboration on CCS demonstrations. Not only would working together solve technical problems faster, but given the rate at which Chinese companies are moving, the learning would hardly be one way. Jointly-funded and operated demonstrations, that include Government funding combined with private-sector investment is an essential next step. This will require a serious funding commitment as well as programs that facilitate information sharing on regulatory and policy issues and support for U.S. businesses working internationally.

Examples of programs that would help build increased capacity for CCS in China or other emerging economies include research exchange programs to bring students and faculty from China to see projects operating in the U.S. and study with leading researchers. An effective near-term approach would be to establish a research exchange program for visits to ongoing demonstrations in the U.S. including the Department of Energy’s Regional Sequestration Partnership Phase III projects. Exchange programs for environmental regulators and policy experts may also prove useful in resolving the legal, regulatory, and social challenges of deploying CCS technology. The Department of State in collaboration with the Department of Energy has implemented successful exchange programs in the past which could be replicated with a focus on CCS technology and policy. 3. Key International CCS Collaborations Underway

There are several high-level international CCS efforts underway, along with numerous individual projects like the WRI-Tsinghua University effort I just described. Each of these efforts can play an important role in the development of the technology. Key to successful integration of these efforts will be clarifying the niche each effort is designed to fill, eliminating redundancies, and designing a path for collaboration.

I would like to highlight three key CCS-specific initiatives already underway:

The Carbon Sequestration Leadership Forum (CSLF) is a Ministerial-level effort initiated by the U.S. Department of Energy. It has been in place since 2003 and has been influential in collaborations among governments.
Australia has recently initiated a Global CCS Institute, for which the Prime Minister has allocated $100M per year for the next 10 years. This institute is designed to focus specifically on collaboration surrounding demonstration projects.
The International Energy Agency (IEA) coordinates international research through the IEA GHG Program. IEA Secretariat is also developing an international roadmap for CCS at the request of the G-8. This roadmap is designed to answer the question of whether and how we can achieve the goal of 20 CCS demonstrations announced globally by 2010 and will provide recommendations for better coordination among international collaborations.

As the technology progresses from R&D towards demonstration, these international efforts can provide an avenue for information-sharing at various levels: the CSLF at the ministerial-level, the IEA among government energy departments, and the Global Institute among those running demonstration projects. It is time to evaluate the existing programs in the context of an emerging suite of global demonstration projects and to form formal partnerships with others perusing demonstrations (UK, EU, China, Canada, Australia). Congress might consider commissioning a formal report on international CCS efforts and use the results of it along with the IEA’s International CCS Roadmap (expected publication date October 2009) to clarify and formalize the role of the various international CCS organizations that have emerged. Additionally, although the U.S. Department of Energy’s Regional Partnership Program has been acknowledged as the “world’s most ambitious program” the work is largely unknown in the international community, in part because it is difficult for researchers to receive approval to travel internationally on their government grants. A scholarship program for U.S. researchers working on government-funded projects to attend international CCS meetings and present the results of their research may be useful in better communicating the results of leading U.S. research in this area. Such a merit-based program could be managed through the Department of Energy. Formal arrangements to partner with other countries on demonstrations must be established soon.

Conclusions

Unless we act now to aggressively begin to implement a global CCS demonstration program, we will lock in untold additional quantities of CO2 emissions from non-CCS, coal-fired power plants around the world. Globally, CCS R&D has progressed to the point of demonstration-readiness and there is a race underway to see who will build the world’s first large-scale integrated demonstration of capture, transport, and storage along with power production. The global nature of climate change and the urgent need to act now to avoid locking in a high emissions trajectory for the future necessitates increased and coordinated international collaborations. We need to specifically partner with emerging economies on demonstrating CCS technology, through joint public-private partnerships. In these international collaborations we must seek ways to build capacity and support efforts to develop global policies and environmental regulations that protect human health and ecosystems. This will include coordination and collaboration on demonstrations that begins in the planning stages along with projects that build capacity on regulatory and policy issues (like the WRI-Tsinghua APP project).

In my testimony, I have mentioned five specific actions to consider that will help facilitate international collaboration on CCS, which are summarized here:

Commit funding for demonstration projects in the U.S. and in China that are geared towards joint technology development; such projects should be public-private partnerships. The global network of demonstrations should include the full suite of capture technology approaches and test storage in a variety of geologic settings.
Develop a framework and funding for research exchange programs to bring researchers from other countries to see projects operating in the U.S. and study with leading researchers. The Department of State in collaboration with the Department of Energy has implemented successful exchange programs in the past which could be replicated with a focus on CCS technology and policy.
Increase bi-lateral efforts to facilitate capacity building and information sharing on regulatory and policy issues.
Establish formal partnerships with other countries developing CCS demonstration projects (UK, EU, China, and Australia) to facilitate information-sharing and avoid duplication among demonstration efforts. Also, commission a formal report on international CCS efforts and use the results of it and the IEA CCS Roadmap to clarify and formalize the role of the various international CCS organizations that have emerged.
Develop a scholarship program for U.S. researchers working on government-funded projects to attend international CCS meetings and present the results of their research. Such a merit-based program could be managed through the Department of Energy.

Green and Mean: Can the U.S. Economy Be Both Climate Friendly and Competitive?

Tim Herzog — Tue, 10 Mar 2009 16:21:31 -0400

TESTIMONY OF MR. ROB BRADLEY DIRECTOR, INTERNATIONAL CLIMATE POLICY INITIATIVE WORLD RESOURCES INSTITUTE

HEARING BEFORE THE COMMISSION ON SECURITY AND COOPERATION IN EUROPE: “GREEN AND MEAN: CAN THE U.S. ECONOMY BE BOTH CLIMATE FRIENDLY AND COMPETITIVE?”

Thank you for the opportunity to contribute to the deliberations of this Commission. My name is Rob Bradley, and I am Director of the International Climate Policy Initiative at the World Resources Institute. The World Resources Institute is a non-profit, non-partisan environmental think tank that goes beyond research to provide practical solutions to the world’s most urgent environment and development challenges. We work in partnership with scientists, businesses, governments, and non-governmental organizations in more than fifty countries to provide information, tools and analysis to address problems like climate change, the degradation of ecosystems and their capacity to provide for human well-being.

I am very pleased to be here to speak to what I consider the most pressing environmental issues faced by the world – and to what I consider a major opportunity for the United States to assume a role of international leadership. In this testimony, I would like to make three points, each of which I will expand on below:

First, that the time is very ripe for the U.S. to reengage internationally on the issue of climate change and take up a leadership role. Further, that the engagement between the U.S. and major developing countries will be a critical factor for success.

Second, that the world has changed dramatically from the days of the Kyoto Protocol. Major developing countries are ready to take significant action on limiting emissions and the Bali Action Plan provides a solid foundation for a new international climate agreement that meets key U.S. interests.

Third, that the role of the green economy and of economic opportunities will play an important role in shaping international engagement.

There is no time to lose

Let me begin by commenting on the urgency of the challenge. The science is compelling. Engaging major developing countries is critical to success. Finally, conditions are right for a major re-engagement by the US.

The science is compelling

The Earth is warming, primarily due to human activities. The cheap, plentiful fossil fuels that have enabled huge increases in human productivity and great improvements in human well being over the past 200 years together with significant deforestation have been the most important causes of global warming. The buildup of carbon dioxide and other greenhouse gases (GHGs) is accelerating, and unless we act very soon to control emissions during our children’s lifetimes warming will rise to very dangerous levels.

In February 2007, the Intergovernmental Panel on Climate Change (IPCC - the official science process sanctioned by the world’s governments and participated in by the United States) released its latest report on climate change science. The report states that it is “unequivocal” that Earth’s climate is warming, and confirms that the current atmospheric concentration of carbon dioxide and methane, two important greenhouse gases (GHGs), “exceeds by far the natural range over the last 650,000 years.” Further, the IPCC concludes that it is now “very likely” (greater than 90% probability) that greenhouse gas emissions from human activities have caused “most of the observed increase in globally averaged temperatures since the mid-20th century.”

In the two years since this alarming conclusion, further compelling evidence of the impacts of warming have been seen. Indeed, the impacts of warming have become increasingly evident to non-scientific observers. Sea ice in the Arctic is shrinking, and Greenland’s massive ice sheet is melting – far faster than predicted. Glaciers are rapidly shrinking from the Rockies to the Alps. WRI annually reviews the latest in climate science. This review confirms that our climate system is changing. Jonathan Lash, WRI’s president, provided several examples in his January 15, 2009 written testimony before the U.S. House of Representatives Committee on Energy and Commerce Committee. These include:

According to the National Snow and Ice Data Center (NSIDC), levels of Arctic sea ice from June through September 2007 were at a record low of 4.13 million km2. In 2008, while there was some modest recovery, the world still saw the second lowest recorded ice extent since record-keeping began in 1979. Still more worrisome, the extensive losses during the past two summers have led scientists to speculate that the Arctic Ocean may be ice-free in the summertime much sooner than anticipated. Furthermore, in October 2008, scientists reported that the thickness of winter sea ice plummeted after the 2007 minimum, showing that the ice pack is not only shrinking but is decreasing in overall volume.

The British Columbia Ministry of Forests and Range, in their 2007 report on the mountain pine beetle outbreak, shows that in 2007, the impacted area had increased to 13 million hectares (from 4.2 million hectares in 2003). Mountain pine beetles prefer mature lodgepole pines and while they typically die off with cold snaps, warmer temperatures in the region have allowed them to persist. They cut off the nutrient and water supply of the trees by burrowing in trees’ bark. The Ministry finds that 40% of merchantable pine volume – 12% of total merchantable volume on the timber harvesting land base in British Columbia – has been impacted from 1999 to 2006. They project that if the pine beetle outbreak continues at the same pace, it will kill off 78% of the pine volume – 23% of total merchantable volume on the province’s timber harvesting land base – by 2015.

These and countless other observations make it clear that much of what we thought we knew a few years ago about the pace of climate change has been superseded. All of the trends are proceeding more quickly than we anticipated. Rising temperatures and the consequent impacts are all taking place faster than the models predicted. While of course we cannot yet know with complete certainty what will occur 20 (much less 50) years from now, according to our best current work, everything is trending to the high end. And the consequences we are observing today are the product of a mere 0.8 degrees centigrade of warming. Even very aggressive action will only barely forestall two degrees centigrade of warming. The science is telling us we have to act with extraordinary urgency – and that our action must be more than the modest marginal efforts made to date – it must fundamentally change the course of our energy infrastructure, it must address land use and forestry, and it must build a regime that can have global effect, not merely address U.S. emissions.

The importance of developing countries

The importance of such a global effort is illustrated by Figure 1. China is of particular importance in terms of emissions, having superseded the United States as the world’s largest emitter (though it remains at barely a quarter of US emissions per person). Almost 80% of current global emissions are produced by fifteen countries (counting the European Union as a single country). Of these, nine are developing economies and two (Russia and Ukraine) are postcommunist countries still wrestling with economic transition. Without a viable means of engaging these countries in the effort to cut emissions we cannot avoid catastrophic climate change.

The UNFCCC action on climate change to date

While the UNFCCC commands wide support as an articulation of the climate challenge and a global response, it did not set specific goals for individual countries to deliver emission cuts. For that reason the Kyoto Protocol was agreed in 1997, including binding emissions targets for industrialized and post-communist countries.

The Kyoto Protocol has had a significant impact, in particular in moving the European Union to adopt climate policies, including a cap-and-trade system. It has generated an international market for carbon offsets, and has given a major signal to business in many countries that a world of constrained emissions is coming.

However, Congress raised several concerns with the Kyoto Protocol structure, and the treaty was not ratified by the United States. The concerns included:

Concerns about economic impacts. At the time targets were set, few countries had a clear understanding of what meeting those targets would mean in economic terms. Congress feared that Kyoto would cause undue damage to the U.S. economy.
Lack of developing country commitments. Congress similarly insisted that major developing countries such as China and India should have commitments to limit emissions.

These objections were most famously expressed in the Byrd-Hagel resolution of 1997. Although this Resolution was adopted before the Kyoto Protocol was agreed, there has been a wide perception that the Protocol did not meet Byrd-Hagel’s provisions. The Protocol was never submitted to the Senate for ratification. In fact, diplomatic leadership by the Clinton Administration may have overreached Congressional support for legislative action domestically.

A new opportunity

The Kyoto Protocol sets targets until 2012. The United Nations, including the U.S., have agreed to a timetable (the so-called “Bali Action Plan”) for negotiating the post-2012 climate arrangements, with the deadline of a meeting to be held in Copenhagen, Denmark, in December 2009. This Fifteenth Conference of the Parties to the UNFCCC (COP15) aims to bring together the countries within and outside the Kyoto Protocol in a more inclusive agreement, although it is not yet clear exactly what form that agreement will take.

What is clear, however, is that the negotiating mandate provided by the Bali Action Plan provides for a radically different agreement from the Kyoto Protocol. In particular, it provides for mitigation actions from both developed and developing countries. This is a major departure from earlier models of climate action internationally, and it reflects real changes in the world outside the negotiations. In the next section I will discuss those changes and what they mean for an international climate agreement.

The transformation in developing country action

For many years, developing countries have been clear in their view that they expect a lead from rich countries before they take action on emissions. There are sound reasons for this stance. They are far poorer than developed countries; they have played a far smaller role in creating the climate problem; and their emissions per person remain in the main much lower than those of developed countries (see Figure 3). 1.4 billion people in the development world live on less than $1.25 a day. Some 2.5 billion people rely on fuelwood, charcoal and animal dung to cook. This is over 80 percent of the population of Sub-Saharan Africa and over half of the populations of India and China.

However, in the last 2-3 years there has been a flood of developing country plans for addressing climate change. Most major developing countries have now brought forward climate plans. I want to highlight some interesting examples:

Brazil announced it would reduce its deforestation rate over 50 percent from recent levels by 2017, avoiding an estimated 4.8 billion tons of CO2 emissions. Deforestation accounts for about two thirds of Brazilian GHG emissions.

China set a target of reducing national energy intensity (energy use per unit GDP) by 20% in the five years to 2010. It has already reduced in each of the past three years: by 1.6% in 2006, 3.7% in 2007, and 4.3% in 2008. Thus China looks likely to be approximately on target to meet its goal. Together, the industrial and building efficiency programs supporting this goal are expected to yield 550 million metric tons CO2 in GHG savings. Addition savings are expected from measures in the transport sector. China also has ambitious non-fossil plans, including wind, hydro, nuclear and biomass, all of which are expected to save 640 million metric tons CO2 by 2010.

Mexico pledged to halve its greenhouse gas emissions by 2050, employing a “cap-and-trade” policy like the one recently considered by the U.S. Congress.

South Africa has presented a detailed plan to peak its national emissions by 2020.

Motivations

Why are developing countries taking these actions? As in the United States, there are a number of drivers that interact.

First, they are increasingly aware of the risks that climate change presents to their development. China’s National Climate Change Programme goes into considerable detail on the risks to its coasts, fresh water supply, agricultural output and other critical concerns. There can be little doubt that even in the midst of pressing development concerns climate change is viewed as an important challenge. However, it is important to recognize the limits of this thinking. Although, to differing degrees, these countries are taking action, they all still look to the United States to lead, given its wealth and historical emissions.

Second, climate concerns align in many instances with broader worries about energy. With the greater energy intensity of their economies, high energy prices have been even more onerous of developing economies than on the U.S. energy security, costs, and pollution are top-level political concerns. Just as here, policy makers are looking for ways to intelligently tackle all these issues.

Third, many countries see opportunity in the new energy technology landscape that is emerging. Countries such as China and India do not see their future in old technologies and businesses. They are keen to position themselves as leaders in the clean energy revolution. Indian wind energy companies, Chinese solar manufacturers, and Brazilian biofuels companies are all among the world’s leaders.

It is important to keep these motivations in mind. Any international agreement depends on the signatories choosing to carry out the provisions of the agreement. An alignment of national and international interests provides at least some prospect of genuine participation, and the Bali Action Plan provides a new way to take advantage of this growing alignment. There is a broad interest in seeing the climate agreement succeed, suggesting that countries will take their international commitments seriously.

However, significant questions do remain. Many of these countries have a very mixed record of implementing the goals in their national plans. Reliable data are hard to obtain even on such broad indicators as energy use or economic growth. There are important initiatives in all these countries to implement GHG monitoring, but today very large uncertainties remain in a lot of the emissions data. Furthermore, standards of enforcement, governance and transparency are very variable. It will certainly not be enough for countries to take each others’ plans at face value.

How the Bali Action Plan includes developing country action

This is where the international negotiations are important. Creating robust reporting and verification structures can help build trust among countries that bold commitments are really being turned into action. The opportunity provided by the Bali Action Plan (BAP) structure is to align international commitments with national development goals and to create reporting programs that also align with the countries’ own abilities to collect and disseminate information. The BAP calls for

“enhanced national/international action on mitigation of climate change, including consideration of:

(i) “Measurable, reportable and verifiable nationally appropriate mitigation commitments or actions, including quantified emission limitation and reduction objectives, by all developed country Parties, while ensuring the comparability of efforts among them, taking into account differences in their national circumstances; (ii) “Nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, supported and enabled by technology, financing and capacity-building, in a measurable, reportable and verifiable manner.”

The phrase “measurable, reportable, and verifiable” (MRV) was critical to the agreement of the BAP, and how MRV is reflected in the post-2012 agreement will have significant implications for the effectiveness of that agreement for stakeholders in both developing as well as developed countries.

OCSE members – a particular challenge

The former communist members of the OCSE have received considerably less attention in the formation of international climate policy than major emerging economies such as China and India. Some have joined the European Union, and are part of the coordinated approach that the E.U. is taking to climate policy. Others, most notably Russia, have taken their own negotiating stances.

Engaging Russia in particular has been a challenging undertaking in the international negotiations. The Kyoto Protocol set a target for Russia that allocated far more emission rights than it was expected to need, and allowing the sale of these rights to industrialized countries through international emission trading. This amounted therefore to a financial inducement to Russia to join the Protocol, with the idea that once inside it would accept more binding emission limits in future. In practice, neither the finance nor the willingness to take more binding targets has emerged. At a time of tensions over Georgia, gas supplies and other issues, European countries have little appetite for financial transfers to Russia under the Protocol. And Russian policy makers have shown no interest in more substantive action on cutting emissions.

Unlike countries such as China and India, Russia has both a cold climate and a vast fossil fuel export industry. It is not clear that climate change is widely seen as an important challenge for Russia. Accordingly, Russia will be a tough negotiating partner in shaping a future climate agreement.

This is a particularly stark example of a general point: that the economic as well as the environmental case for climate action will need to be made.

The case for a positive trade agenda

To date, debates about climate and trade have tended to focus on potential conflicts, particularly on policy responses to leakage concerns. However, there are significant opportunities to harness complementarities between the climate and trade. A successful approach to the climate challenge will mean deploying new technologies at a global scale at an unprecedented rate, and it is unlikely that this can be achieved without harnessing global trade and capital flows.

However, harnessing this positive link will demand solutions that work for all countries. Future deals to limit greenhouse gas emissions, through the UNFCCC negotiations, and to open markets, under the Doha Round, will depend upon complex reciprocal bargains, the outcomes of which will have to be widely perceived as both fair and effective. This raises important questions. Could the removal of trade barriers affecting the flow of environmental goods and services significantly reduce the economic cost of emissions abatement, not just in the United States, but world-wide? Could prospects of growing “green collar” jobs resulting from climate, energy and fiscal policy ease the acceptance of stricter targets? What broader benefits accrue by more rapid uptake and dissemination of clean energy technology? Finally, where do these benefits from mitigation activity occur? Given that these will often be on different actors than those paying the cost of mitigation, how should distributional effects be handled? Carefully considered responses to these questions will maximize the potential synergies between the climate and trade arenas.

Stimulus – Demonstrating leadership through green growth

The U.S. response to the recent financial crisis exemplifies America’s opportunity to demonstrate economic growth through environmental investment. In the U.S.,both Congressional leaders and President Obama have directed government spending in a way that not only generates near term economic activity and employment but also addresses long-term policy goals. Energy and environmental objectives like reducing carbon-dioxide emissions and dependence on foreign oil are chief among these, lending considerable traction to the notion of a “green” stimulus package . As a result, more than 10 percent (over $100 billion) of the total cost of the “American Recovery and Reinvestment Act” passed in February was directed towards climatefriendly and environmental objectives.

While environmental objectives were a significant driver for these investments, their final passage was the result of widespread recognition of their unique economic benefits. Well-tailored green components of a recovery effort can create jobs and stimulate the economy while achieving significant energy cost savings for businesses, consumers, and the government. Recovery policies similar to those passed in the U.S. will reduce demand for fossil fuels. The resulting drop in cost and consumption of energy has the potential to save Americans an average of $450 million per year for every $1 billion invested. In addition, by returning money to households through lower energy bills, green components of a recovery package combine the employment benefits of tax cuts with the construction and manufacturing jobs created through infrastructure investment. On average, green recovery programs create 30,000 jobs for every $1 billion in government spending (Figure 4).

Internationally, more and more policymakers are hoping to direct government spending in a way that not only generates short-term economic growth and employment, but also addresses long-term policy goals that have been sidelined by the current crisis. Energy and environmental objectives are chief among these and the notion of “green” stimulus has gained considerable traction in capitals around the world. South Korea has shown considerable leadership by dedicating over 80 percent of their stimulus spending measures to energy conservation, low-carbon transit and green jobs initiatives. Although final spending levels are still uncertain, China has also indicated a desire to direct hundreds of billions of dollars of its $586 billion stimulus effort towards projects that would reduce GHG emissions. As more and more nations attempt to incorporate energy and environmental objectives into their responses to the financial crisis, there may also emerge an opportunity for global cooperation to maximize the environmental and economic impact of spending.

At the G-20 meeting last November, the world’s leading economies agreed to combat global recession with coordinated fiscal stimulus. Growing attention to the economic potential of environmental investments has lead to widespread calls for the G20’s April meeting to endorse a global “Green New Deal.” Given the scale of the challenges ahead—a green recovery provides an opportunity for the U.S. to demonstrate the economic case for immediate action to address climate change.

Relating stimulus action to international finance

Although both developed and developing countries are called on to take mitigation action under the Bali Action Plan, the Plan promises developing countries support for their actions. Furthermore, that support also needs to be “measurable, reportable and verifiable.”

Financial support is the most obviously measurable of these, and contributions from the U.S. and other developed countries will be essential to a successful deal. Perhaps the most important priority in this regard is adaptation. With climate impacts already being felt, and with the poorest countries and communities likely to be hit hardest, there is a real need for such support. But support will also be needed in developing countries to mitigate emissions, and to implement the measuring, reporting and verification systems needed to enshrine these actions in an agreement.

In this context the international economic crisis is a major challenge to the negotiations. Appetite in developed country capitals for providing international finance is drying up. On the other hand, it is hard to see how a climate deal can be reached without significant resources on the table. Creative thinking will be needed to leverage the sources of finance that still work in a recession, and stimulus spending is perhaps the most important of these.

There is a wide range of assessments about the scale of resources required for mitigation and adaptation globally. Within the context of the UNFCCC negotiations, there are high expectations on the part of the developing countries for support and finance for mitigation and adaptation from Annex I countries. This expectation is based on the principle of “common but differentiated responsibilities” from the 1992 Framework Convention. Non-Annex I countries feel that Annex I parties should be responsible for a greater portion of the solution to climate change, given that their historical contribution to the problem outweighs the contribution by Non-Annex I countries. Responsibility for the solution would take the form of financial support for developing country mitigation and adaptation.

Figure 5 shows the needs and expectations for global mitigation, based on the UNFCCC’s 2007 assessment of the level of funding required for global mitigation, and on the G77 and China’s proposal on finance submitted to the UNFCCC, which calls for Annex I countries to commit to funding equal to 0.5-1% of their GDP to cover mitigation and adaptation. The figure compares some of the existing and proposed sources of mitigation funding, including existing clean technology funds, the UNFCCC’s Clean Development Mechanism (CDM), Official Development Assistance (ODA), and global investment figures, against these expectations and needs. Clearly, the existing financial flows for climate change mitigation are inadequate relative to the scale of the challenge. However, ODA and foreign direct investment (FDI) are both adequate in terms of scale, which indicates that the necessary finance for mitigation is available but must be steered toward climate-friendly investments.

The figure also shows an indication of possible U.S. contribution to developing country mitigation, based on provisions in recent legislative proposals. The figure includes the 2030 values for allowances allocated to international mitigation and adaptation efforts from the 2008 Boxer-Lieberman-Warner Climate Security Act (S.3036) and from Representative Markey’s 2008 bill, Investing in Climate Action and Protection Act (H.R.6186). These bills reserved a portion of allowances to fund international forestry, international technology deployment, and international adaptation. This illustrates the size of the gap between the needs and expectations of the developing world for finance from Annex I countries versus what the U.S. has offered to date.

However, it is not clear at this stage what level of finance will be needed in the near term to ensure a successful climate deal.

Although finance is likely to be important, some countries, notably China, put as much or more emphasis on technology cooperation. In many cases this is not a question of funding, but of combined efforts in R&D (with a sharing of the resulting intellectual property) or joint support of demonstration projects. These efforts need not all be pursued within a multilateral agreement, but their presence will help create a more constructive deal.

While stimulus policies are aimed first and foremost at domestic economic activity, as noted earlier there are significant areas of common ground. Given the importance of finance in securing a deal, and the difficulty of finding resources in the present climate, the U.S. should actively explore options for coordinating technology development and deployment actions with developing countries through stimulus actions.

Conclusions

The U.S. is seeking a new leadership role on climate change, both through adopting national climate policy and by engaging internationally. These two aims are linked: domestic policy will give the U.S. credibility abroad, and participation by other major emitters will help the U.S. undertake ambitious action itself.

The moment is ripe for international engagement. Other major emitters, including all the largest developing economies, have presented national climate change plans, targets or policies. Some have gone much further than others in implementing these, but all have made a major leap from the era of Kyoto.

The international agreement to be negotiated under the Bali Action Plan offers scope to include actions by developing and developed countries that are measurable, reportable and verifiable. This, combined with the national plans being brought forward by developing countries, should answer Congress’ major criticism of Kyoto.

In response to the economic crisis both developed and developing countries are bringing forward significant stimulus spending, and in many cases this has a major climate and energy dimension. All these countries hope to create new industries and jobs in clean energy. By engaging internationally on a positive trade agenda the U.S. can help ensure the participation of major developing countries in climate action while creating jobs for American workers, as well as in other countries.

Testimony Before the Select Committee On Energy Independence and Global Warming

Payson Schwin — Wed, 04 Feb 2009 14:53:16 -0500

Testimony of
Rob Bradley
Director, International Climate Policy Initiative
World Resources Institute
To the U.S. House of Representatives
Select Committee On Energy Independence And Global Warming
February 4, 2009

Thank you for the opportunity to contribute to the deliberations of this Select Committee. My name is Rob Bradley, and I am Director of the International Climate Policy Initiative at the World Resources Institute. The World Resources Institute is a non-profit, non-partisan environmental think tank that goes beyond research to provide practical solutions to the world’s most urgent environment and development challenges. We work in partnership with scientists, businesses, governments, and non-governmental organizations in more than seventy countries to provide information, tools and analysis to address problems like climate change, the degradation of ecosystems and their capacity to provide for human well-being.

Second, the world has changed dramatically from the days of the Kyoto Protocol. Major developing countries are ready to take significant action on limiting emissions and the Bali Action Plan provides a solid foundation for a new international climate agreement that meets key U.S. interests.

Third, I want to discuss key features of the new agreement for engaging developing countries. These include how different countries will take on actions and commitments, and funding for international adaptation, forests and technology. In conclusion, I also want to flag some ways in which these considerations might affect features of U.S. climate legislation.

1. There is no time to lose

The science is compelling

In February 2007, the Intergovernmental Panel on Climate Change (IPCC - the official science process sanctioned by the world’s governments and participated in by the United States) released its report on climate change science. The report states that it is “unequivocal” that Earth’s climate is warming, and confirms that the current atmospheric concentration of carbon dioxide and methane, two important greenhouse gases (GHGs), “exceeds by far the natural range over the last 650,000 years.” Further, the IPCC concludes that it is now “very likely” (greater than 90% probability) that greenhouse gas emissions from human activities have caused “most of the observed increase in globally averaged temperatures since the mid-20th century.”

According to the National Snow and Ice Data Center (NSIDC), levels of Arctic sea ice from June through September 2007 were at a record low of 4.13 million km2.1 In 2008, while there was some modest recovery, the world still saw the second lowest recorded ice extent since record-keeping began in 1979. Still more worrisome, the extensive losses during the past two summers have led scientists to speculate that the Arctic Ocean may be ice-free in the summertime much sooner than anticipated. Furthermore, in October 2008, scientists reported that the thickness of winter sea ice plummeted after the 2007 minimum, showing that the ice pack is not only shrinking but is decreasing in overall volume.

The British Columbia Ministry of Forests and Range, in their 2007 report on the mountain pine beetle outbreak , shows that in 2007, the impacted area had increased to 13 million hectares (from 4.2 million hectares in 2003). Mountain pine beetles prefer mature lodgepole pines and while they typically die off with cold snaps, warmer temperatures in the region have allowed them to persist. They cut off the nutrient and water supply of the trees by burrowing in trees’ bark. The Ministry finds that 40% of merchantable pine volume – 12% of total merchantable volume on the timber harvesting land base in British Columbia – has been impacted from 1999 to 2006. They project that if the pine beetle outbreak continues at the same pace, it will kill off 78% of the pine volume – 23% of total merchantable volume on the province’s timber harvesting land base – by 2015.

These and countless other observations make it clear that everything we thought we knew a few years ago about climate change has been superseded. All of the trends are proceeding more quickly than we anticipated. Rising temperatures and the consequent impacts are all taking place faster than the models predicted. That means that our long-range projections of what might happen are off. While of course we cannot yet know with complete certainty what will occur 20 (much less 50) years from now, according to our best current work, everything is trending to the high end. And the consequences we are observing today are the product of a mere 0.8 degrees centigrade of warming. Even very aggressive action will only barely forestall two degrees centigrade of warming. The science is telling us we have to act with extraordinary urgency – and that our action must be more than the modest marginal efforts made to date – it must fundamentally change the course of our energy infrastructure, it must address land use and forestry, and it must build a regime that can have global effect, not merely address U.S. emissions.

The importance of developing countries

The importance of such a global effort is illustrated by Figure 1. (NOTE: All figures can be found in the PDF version.) China is of particular importance in terms of emissions, having superseded the United States as the world’s largest emitter (though it remains at barely a quarter of US emissions per person). Almost 80% of global emissions are produced by fifteen countries (counting the European Union as a single country). Of these, nine are developing economies and two (Russia and Ukraine) are post-communist countries still wrestling with economic transformation. Without a viable means of engaging these countries in the effort to cut emissions we cannot avoid catastrophic climate change.

The UNFCCC action on climate change to date

The need for global action has been recognized for at least two decades, and was the basis for the 1992 United Nations Framework Convention on Climate Change (UNFCCC), to which the U.S. is a Party. The UNFCCC commits all countries to the fight against climate change on the basis of “common but differentiated responsibilities.” This puts the responsibility of the richest and most polluting countries to lead, and to provide support to the less capable, but for all to participate. While the UNFCCC commands wide support as an articulation of the climate challenge and a global response, it did not set specific goals for individual countries to deliver emission cuts. For that reason the Kyoto Protocol was agreed in 1997, including binding emissions targets for industrialized and post-communist countries.

However, Congress raised several concerns with the Kyoto Protocol structure, and the treaty was not ratified by the United States. The concerns included:

Concerns about economic impacts. At the time targets were set, few countries had a clear understanding of what meeting those targets would mean in economic terms. Congress feared that Kyoto would cause undue damage to the U.S. economy.
Lack of developing country commitments. Congress similarly insisted that major developing countries such as China and India should have commitments to limit emissions.

A new opportunity

2. The transformation in developing country action

For many years, developing countries have been clear in their view that they expect a clear lead from rich countries before they take action on emissions. There are sound reasons for this stance. They are far poorer than developed countries; they have played a far smaller role in creating the climate problem; and their emissions per person remain in the main much lower than those of developed countries (see Figure 2).

Brazil announced it would reduce its deforestation rate over 50 percent from recent levels by 2017, avoiding an estimated 4.8 billion tons of CO2 emissions. Deforestation accounts for about two thirds of Brazilian GHG emissions.

China set a target of reducing national energy intensity (energy use per unit GDP) by 20% in the five years to 2010. It has already reduced in each of the past three years: by 1.6% in 2006, 3.7% in 2007, and 4.3% in 2008. Thus China looks likely to be approximately on target to meet its goal. Together, the industrial and building efficiency programs supporting this goal are expected to yield 550 million metric tons CO2 in GHG savings. Addition savings are expected from measures in the transport sector. China also has ambitious non-fossil plans, including wind, hydro, nuclear and biomass, all of which are expected to save 640 million metric tons CO2 by 2010.

Mexico pledged to halve its greenhouse gas emissions by 2050, employing a “cap-and-trade” policy like the one recently considered by the U.S. Congress.

South Africa has presented a detailed plan to peak its national emissions by 2020.

Motivations

Why are developing countries taking these actions? As in the United States, there are a number of drivers that interact.

Third, many countries see opportunity in the new energy technology landscape that is emerging. Countries such as China and India do not see their future in old technologies and businesses. They are keen to position themselves as leaders in the clean energy revolution. Indian wind companies, Chinese solar manufacturers, and Brazilian biofuels companies are all among the world’s leaders.

However, significant questions do remain. Many of these countries have a very mixed record of implementing the goals in their national plans. Reliable data are hard to obtain even on such broad indicators as energy use or economic growth. There are important initiatives in all these countries to implement GHG monitoring, but today very large uncertainties remain in a lot of the emissions data. Furthermore, standards of enforcement, governance and transparency are very viable. It will certainly not be enough for countries to take each others’ plans at face value.

How the Bali Action Plan includes developing country action

“enhanced national/international action on mitigation of climate change, including consideration of: (i) “Measurable, reportable and verifiable nationally appropriate mitigation commitments or actions, including quantified emission limitation and reduction objectives, by all developed country Parties, while ensuring the comparability of efforts among them, taking into account differences in their national circumstances; (ii) “Nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, supported and enabled by technology, financing and capacity-building, in a measurable, reportable and verifiable manner.”

At the heart of the new agreement therefore is the question of how to measure, report, and verify different actions in a way that gives real confidence that promises are being kept and that real action is being undertaken. In the next section I will discuss the key elements of a successful deal.

3. What is needed in the new agreement

Much like the United States, most countries are not going to design their domestic energy and climate policies in a United Nations negotiation. A new agreement will not – and cannot – force countries to take actions that they actively want to avoid. Rather, it can build trust by allowing countries to compare and assess their own progress in implementing agreed commitments, and those of their international partners. And it can provide structures for specific international needs, such as support for adaptation efforts or international registries for emissions trading.

For the engagement of developing countries, my particular focus here, I want to discuss two issues in particular.

What to expect in terms of the actions that countries bring to the table, and the ways in which they are measured, reported and verified.
Support, in particular financial support, that the U.S. will need to bring to the table.

What should we expect from developing countries?

There are three things to think about as we look at a country’s climate commitments:

How ambitious are they? What do they deliver in terms of lower carbon emissions?
What form do they take?
How credible are they? Do countries have confidence in each others’ capacity and intent to implement the actions, and is there a reliable and transparent way of measuring this? As I discussed above, many developing countries are indeed bringing forward such actions. The role of an international agreement is to turn these actions into a set of commitments that can be mutually verified, so that all countries can have confidence that what is being promised is also being delivered. **Ambition** How much effort should each country make? This is a complex and highly politically-charged question - I want to offer a caution on what can be expected. While all major emitters will be expected to bring actions to the table, it does not follow that all make the same effort. The average Indian still produces just over one twentieth of the emissions of the average American. Some 550 million Indians still lack any access to electricity. Vehicle ownership in developing countries remains a small fraction of levels in the United States or even Europe or Japan. It follows that developing country actions are mostly going to be about reducing rates of emissions growth, at least at first, rather than absolute emission cuts from today’s levels. **Form** The United States should seek commitments from our international partners that they will undertake ambitious actions to reduce emissions. We need to recognize that the solutions that we adopt here, such as cap-and-trade, are not necessarily going to be the most suitable right now in developing countries, and that their actions may therefore take a different form. The types of actions a country undertakes will be driven in significant part by the institutional capacity in that country, as well as by political traditions and priorities. Indeed, as I argued above, actions that are firmly rooted in national priorities will be more likely to be effectively implemented. In the longer term, we need to ensure that the world is moving on the right low-carbon path, and should help all countries to develop the capabilities to cap emissions. But in the post-2012 climate agreement it is important to recognize ambitious actions of all kinds. **Credibility** Making climate actions into credible and verifiable parts of a deal is at the center of the “measurable, reportable and verifiable” approach of the Bali Action Plan. Although the Kyoto Protocol includes targets that are legally binding, and is equipped with compliance mechanisms, the teeth of an international agreement are generally not sharp. Kyoto’s penalties for not meeting a target are not strongly dissuasive: they amount to a penalty against a later target, which itself has not yet been negotiated. It is striking therefore that most countries are on course to meet their Kyoto targets, and in some cases have made considerable efforts to do so. An international agreement does seem to bring a significant political incentive to comply. Enforcement of commitments within a climate agreement is likely to be based on two trade-offs:
Mitigation action based on recognized mitigation action by others. Countries will feel bound to their own emissions cuts to the extent that others are delivering theirs. Experience with the Montreal Protocol suggests that a progressive building of trust as countries see each other meeting their commitments can be a powerful means of encouraging international action.

Mitigation action linked to financial or technological support. Countries hoping for support in the form of finance or technology cooperation (see below) will need to demonstrate real action on emissions, or lose that support.
One vital role for the agreement is to a credible mechanism for sharing and monitoring national actions. This “registry” of actions will be needed that sets metrics by which implementation will be measured, reported and verified. Frequent reporting and robust verification should help build trust among participants. In addition, the registry would be used to measure, report and verify the support being given to developing countries in undertaking their mitigation actions. It is important to note that such support is a critical part of the BAP deal in the eyes of developing countries. Specific needs will vary considerably. Richer developing countries may need assistance primarily with the monitoring systems that will help them implement their policies. Poorer countries will look for more direct support in reducing emissions. The G77, a grouping of developing countries within the negotiations, has placed significant emphasis on access to cleaner technologies. Finding appropriate structures for this will require further negotiation, not least because countries have very different expectations. Some may seek mainly to acquire clean technologies on favorable terms. Others have a greater interest in building the capacity to manufacture and innovate in new sectors. **Financial and other support** Although both developed and developing countries are called on to take mitigation action under the Bali Action Plan, the Plan promises developing countries support for their actions. Furthermore, that support also needs to be “measurable, reportable and verifiable.” Financial support is the most obviously measurable of these, and contributions from the U.S. and other developed countries will be essential to a successful deal. Perhaps the most important priority in this regard is adaptation. With climate impacts already being felt, and with the poorest countries and communities likely to be hit hardest, there is a real need for such support. But support will also be needed in developing countries to mitigate emissions, and to implement the measuring, reporting and verification systems needed to enshrine these actions in an agreement. There is a wide range of assessments about the scale of resources required for mitigation and adaptation globally. Within the context of the UNFCCC negotiations, there are high expectations on the part of the developing countries for support and finance for mitigation and adaptation from Annex I countries. This expectation is based on the principle of “common but differentiated responsibilities” from the 1992 Framework Convention. Non-Annex I countries feel that Annex I parties should be responsible for a greater portion of the solution to climate change, given that their historical contribution to the problem outweighs the contribution by Non-Annex I countries. Responsibility for the solution would take the form of financial support for developing country mitigation and adaptation. Figure 3 (see PDF for all figures) shows the needs and expectations for global mitigation, based on the UNFCCC’s 2007 assessment of the level of funding required for global mitigation, and on the G77 and China’s proposal on finance submitted to the UNFCCC, which calls for Annex I countries to commit to funding equal to 0.5-1% of their GDP to cover mitigation and adaptation. The figure compares some of the existing and proposed sources of mitigation funding, including existing clean technology funds, the UNFCCC’s Clean Development Mechanism (CDM), Official Development Assistance (ODA), and global investment figures, against these expectations and needs. Clearly, the existing financial flows for climate change mitigation are inadequate relative to the scale of the challenge. However, ODA and foreign direct investment (FDI) are both adequate in terms of scale, which indicates that the necessary finance for mitigation is available but must be steered toward climate-friendly investments. The figure also shows an indication of possible U.S. contribution to developing country mitigation, based on provisions in recent legislative proposals. The figure includes the 2030 values for allowances allocated to international mitigation and adaptation efforts from the 2008 Boxer-Lieberman-Warner Climate Security Act (S.3036) and from Representative Markey’s 2008 bill, Investing in Climate Action and Protection Act (H.R.6186). These bills reserved a portion of allowances to fund international forestry, international technology deployment, and international adaptation. This illustrates the size of the gap between the needs and expectations of the developing world for finance from Annex I countries versus what the U.S. has offered to date. However, it is not clear at this stage what level of finance will be needed in the near term to ensure a successful climate deal. ## Conclusions The U.S. is seeking a new leadership role on climate change, both through adopting national climate policy and by engaging internationally. These two aims are linked: domestic policy will give the U.S. credibility abroad, and participation by other major emitters will help the U.S. undertake ambitious action itself. The moment is ripe for international engagement. Other major emitters, including all the largest developing economies, have presented national climate change plans, targets or policies. Some have gone much further than others in implementing these, but all have made a major leap from the era of Kyoto. The international agreement to be negotiated under the Bali Action Plan offers scope to include actions by developing and developed countries that are measurable, reportable and verifiable. This, combined with the national plans being brought forward by developing countries, should answer Congress’ major criticism of Kyoto. In national policy, Congress should seek to support constructive international engagement. Provisions that take a more confrontational approach, for instance through trade measures, should be considered with caution. A successful climate negotiation will also require financing. Use of allowance value, as has been considered in a number of recent climate bills, may provide one way to address this.

Statement To the U.S. House of Representatives Committee on Energy and Commerce

Tim Herzog — Thu, 15 Jan 2009 00:00:00 -0500

Statement of
Jonathan Lash
President, World Resources Institute
To the
U.S. House of Representatives
Committee on Energy and Commerce
January 15, 2009

Mr. Chairman, distinguished members of the Committee, good morning and thank you for inviting me to testify today as a member of the United States Climate Action Partnership (US CAP), I am Jonathan Lash, President of the World Resources Institute.

The World Resources Institute is a non-profit, non-partisan environmental think tank that goes beyond research to provide practical solutions to the world’s most urgent environment and development challenges. We work in partnership with scientists, businesses, governments, and non-governmental organizations in more than seventy countries to provide information, tools and analysis to address problems like climate change, and the degradation of ecosystems and their capacity to provide for human well-being.

As a proud founding member of USCAP let me start by saying that the US CAP partnership was designed to support your work. Since we launched our Call for Action (PDF, 901 Kb) in January of 2007, we have been reaching out to help Congress consider options for climate policy, we have convened workgroups designed to help ponder questions you will face, and today we are releasing our Blueprint for Legislative Action. I am delighted to be here today to continue our joint efforts to support rapid enactment of US domestic climate policy in 2009.

The need for U.S. climate legislation is urgent. The science is unequivocal, and the need for a new economy to provide jobs and investment is urgent. US CAP businesses and non-profits alike agree that this is the moment to redefine the United States and support the transition to a low carbon economy.

Let me first address the science: everything we thought we knew a few years ago about climate change has been superseded. All of the trends are proceeding more quickly than we anticipated. Rising temperatures and the consequent impacts are all taking place faster than the models predicted. That means that our long-range projections of what might happen are off. While of course we cannot yet know with complete certainty what will occur 20 (much less 50) years from now, according to our best current work, everything is trending to the high end. And the consequences we are observing today are the product of a mere 0.8 degrees centigrade of warming. Even very aggressive action will only barely forestall two degrees centigrade of warming. The science is telling us we have to act with extraordinary urgency – and that our action must be more than the modest marginal efforts made to date – it must fundamentally change the course of our energy infrastructure, it must address land use and forestry, and it must build a regime that can have global effect, not merely address US emissions.

WRI annually reviews the latest in climate science. This review confirms the case that our climate system is changing. For example:

According to the National Snow and Ice Data Center (NSIDC), levels of Arctic sea ice from June through September 2007 were at a record low of 4.13 million km2.¹ In 2008, while there was some modest recovery, the world still saw the second lowest recorded ice extent since record-keeping began in 1979. Still more worrisome, the extensive losses during the past two summers have led scientists to speculate that the Arctic Ocean may be ice-free in the summertime much sooner than anticipated. Furthermore, in October 2008, scientists reported that the thickness of winter sea ice plummeted after the 2007 minimum, showing that the ice pack is not only shrinking but is decreasing in overall volume.²

The British Columbia Ministry of Forests and Range, in their 2007 report on the mountain pine beetle outbreak,³ show that in 2007, the impacted area had increased to 13 million hectares (from 4.2 million hectares in 2003). Mountain pine beetles prefer mature lodgepole pines and while they typically die off with cold snaps, warmer temperatures in the region have allowed them to persist. They cut off the nutrient and water supply of the trees by burrowing in trees’ bark. The Ministry finds that 40% of merchantable pine volume – 12% of total merchantable volume on the timber harvesting land base in British Columbia – has been impacted from 1999 to 2006. They project that if the pine beetle outbreak continues at the same pace, it will kill off 78% of the pine volume – 23% of total merchantable volume on the province’s timber harvesting land base – by 2015.

These impacts, and dozens more of the same magnitude with impacts to our oceans and marine life, to our agriculture systems – and in particular with an impact on the world’s poorest and most needy, are harbingers of the future in a climate changed world that seems to be upon us much sooner than anticipated. And every year the list of damages and ecosystems in danger continues to grow. Nature and our economies are linked. But nature does not do bailouts.

If the science calls for urgency, our economy is equally in need of quick remedies.

USCAP recognizes that the United States faces an urgent need to reinvigorate our nation’s economy, make the country more energy secure, and take meaningful action to slow, stop and reverse GHG emissions to address climate change. Thoughtful and comprehensive national energy and climate policy will help secure our economic prosperity and provide American businesses and the nation’s workforce with the opportunity to innovate and succeed.

The U.S. needs legislation that is fast, fair and builds future value. We need legislation that jump-starts the economy and creates a signal to investors to put their money into the transition to a low carbon future. We must set the nation on a new course immediately to deliver economic and climate results, provide benefits to all, and prepare us for the next generation of technological competitiveness. I believe this includes action to:

promote energy efficiency in buildings and homes,
modernize the nation’s electric grid, making it “smarter” and allowing it to facilitate new, more efficient technologies and renewable energy,
stimulate a variety of low-carbon sources of electricity,
demonstrate and deploy carbon capture and storage for coal-fired power plants and other large stationary sources,
encourage greater use of less carbon-intensive forms of transportation and fuel, and
improve the efficiency of our transportation system.

US CAP supports enactment of an economy-wide, market-driven approach which includes a well-crafted cap-and-trade program that places specified limits on GHG emissions. The program should contain cost-containment measures, complementary policies and measures to supplement the cap-and-trade program, and a fully funded federal technology research, development, demonstration, and deployment program for climate-friendly technologies. Properly designed legislation will encourage innovation, enhance America’s energy security, foster economic growth, improve our balance of trade, and provide critically needed U.S. leadership on this vital global challenge. Business needs regulatory certainty to begin a fundamental transformation akin to a new industrial revolution.

I believe that if we do not create domestic markets for advanced technologies, other countries will be serving the global markets of tomorrow. The world wants the efficient, clean technologies that U.S. business can provide if a long term program is in place to drive innovation. The world is looking to the U.S. to resume its place on the global stage – and this includes engaging developed and developing countries alike on issues such as technology transformation and adaptation. The U.S. must act domestically and must fully engage in the international negotiations to support action by other countries through a global agreement. But U.S. action can not be contingent on action by other countries, since we are the largest historical contributor to the increases in temperatures and greenhouse gas concentrations we are experiencing today.

Recent debate surrounding the crafting of an economic stimulus package early in the 111th Congress has included discussion of such a package of clean energy investments. We agree that such efforts can and should be taken as early as possible. Additionally, a central tenet of our Call for Action (PDF, 901 Kb) is that in order to effect the change needed throughout the economy, an economy-wide cap-and-trade system is essential. When combined with complementary measures, the resulting new vision and policy direction will spur the innovation through which America has always excelled. When given the proper tools, incentives and market signals, the American entrepreneurial spirit will lead to sustainability solutions required to meet our many economic, energy, environmental and national security challenges.

We recognize the challenge facing this Committee in crafting comprehensive climate change legislation and we very much hope that the Committee will call upon our unique partnership to help sort through these complexities. The need to begin the transformation of our economy to a sustainable, secure, low-carbon future is compelling and timely; indeed, this will only become more difficult, and more costly, if Congress delays action.

Since 2007, US CAP has provided Congress with international principles and more detailed information on the topics of cost containment, energy efficiency, geologic carbon storage technologies and a greenhouse gas registry. Further, our diverse and broad-based coalition has and will continue to serve as a sounding board for policymakers as they contemplate legislative options.

USCAP is committed to helping Congress find environmentally sound, workable, cost-effective approaches to climate change. We believe that path forward exists and that we must embark on the journey with deliberate speed. Representing many sectors of the economy, we believe we are in the unique position to work with the President-elect, Congress and all other stakeholders to enact an environmentally effective, economically sustainable and fair climate change program. We look forward to working with the Committee in the 111th Congress to ensure prompt enactment of national climate protection legislation.

¹ NASA Record Arctic Sea Ice Loss in 2007
² Geophys. Res. Lett.35, L22502; 2008
³ B.C. Ministry of Forests and Range, Forest Analysis and Inventory Branch. 2007. Timber Supply and the Mountain Pine Beetle Infestation in British Columbia: 2007 Update (PDF, 2.3 Mb)

U.S. Contributions to a World Bank Administered Clean Technology Fund

Tim Herzog — Thu, 05 Jun 2008 00:00:00 -0400

Summary

The proposed Congressional appropriation of $400 million per year over five years to support the deployment of clean energy technologies in developing countries could demonstrate much awaited United States leadership in responding to the global crisis of climate change. If these resources are invested wisely, the benefits will reach under-served communities in developing countries in desperate need of more reliable energy and cleaner air. Successful investments would also demonstrate to United States policymakers, energy producers and investors, the feasibility of reducing energy sector emissions by adopting changes in our own technology mix. If combined with United States policies that cap and reduce domestic emissions, that support a global deal to combat climate change, and that help build the resilience of communities vulnerable to climate change, a significant investment in clean energy would represent an important contribution to avoiding the worst impacts of global warming.

$2 billion over five years would dedicate an unprecedented amount of United States funding to clean technology in developing countries. It must, however, be emphasized that this will represent a small contribution towards the trillions of dollars necessary to meet global energy demand. Congress must therefore ensure that these resources and the institutions entrusted with managing them are committed to leveraging the greatest impact possible on investment choices in the energy sector worldwide.

Climate change and clean energy are not new issues for the World Bank, and its record in helping developing countries integrate climate change into economic development is mixed. The Bank has played an important role in pioneering new approaches to financing clean energy including through the use of carbon markets. Nevertheless, a recent study carried out by WRI reveals that the Bank has systematically overlooked opportunities to support the deployment of clean energy technologies, to mitigate emissions and to reduce climate risks. As late as 2007, more than 50% of Bank energy sector financing did not include climate change considerations at all. We therefore believe that any US investment in the CTF to support transitions to sustainable energy in developing countries should leverage a transformation of the Bank itself, in accordance with the following guidelines:

1) A Clean Technology Fund should leverage transformative technologies and support progressive policies

Congress should act to ensure that any public resources invested in the CTF support the deployment of technologies and policies that promote a profound shift away from carbon-intensive fuel sources. The CTF should be guided by principles that support this shift without pre-determining choices that should rest with developing country stakeholders and respond to local needs. The CTF should therefore, as the World Bank has suggested, promote transformational change while remaining technology neutral. Its investments should prioritize “zero carbon” outcomes in the power sector, improvements in energy efficiency in existing power generation infrastructure, and it should favor investments that are shown to contribute to poverty alleviation. These principles would guide the CTF away from support for investments in technologies, such as supercritical coal plants, that are only marginally less GHG intensive and that are already more cost effective than conventional coal. These principles should guide the CTF towards renewable energy sources, and investments in public transportation and energy efficiency that benefit poor consumers by lowering costs and increasing access and security of supply. The CTF will, however, need to address the likely continued reliance of many developing countries on coal. For new coal-fired generation facilities, carbon capture and sequestration may be able to play an important role in reducing emissions, if the many risks and uncertainties associated with these technologies can be reduced. CTF resources should also be available to build research and development capacity within developing countries to develop new technologies that are appropriate to local needs. Finally, developing countries should also be able to seek financial and technical support for improvements in policy and regulatory frameworks that will promote investment in clean technologies.

2) Transformation should begin with the World Bank’s core energy portfolio

Any Congressional appropriation to the CTF should promote the transformation of the core energy portfolios of the Multilateral Development Banks, including the World Bank, the Inter-American Development Bank, the African Development Bank, and the Asian Development Bank. The CTF envisions a role for the World Bank as Trustee, and for all the major MDBs as implementing agencies. Through MDB negotiated Country Assistance Strategies and internal bank procedures, MDB management and staff will have a direct influence on the programming of CTF resources. This should be seen as an opportunity for the Banks to demonstrate a commitment to integrating climate change considerations into all aspects of their core operations. The Banks should rigorously measure and manage the GHG emissions associated with its investments in all relevant sectors. The Banks should consistently work with developing country clients to identify low carbon approaches to development. Congress should use this opportunity to benchmark and monitor a higher standard of portfolio performance for all the Multilateral Development Banks that will have access to CTF resources.

3) The CTF should operate in accordance with widely accepted principles reflected in the United Nations Framework Convention on Climate Change and other sustainable development instruments

It is essential that Congress plays a leadership role in a global response to climate change. Providing financial support for clean technology in developing countries will be a key part of that response. If these resources are to leverage change equal to the challenge of global warming they must be managed with credibility and legitimacy that catalyzes domestic policy reform, and inward private and public investment in developing countries. Ensuring that the CTF follows internationally agreed principles, reflected in the UNFCCC and other international instruments will be key to its legitimacy. These principles respect the right of each country to determine its own development path consistent with the Convention’s objective to stabilize greenhouse gas emissions at safe levels. Donor governments should be prepared to demonstrate how support for the CTF is new and additional to development assistance targeted at poverty alleviation and other developing country priorities. The source of the technology should not be “tied” to the nationality of the donor. The administration of the Fund should be guided by principles of transparency, inclusiveness and accountability, through the proactive disclosure of information upon which decisions are based, a balanced representation of developed and developing countries, and meaningful opportunities for civil society input and oversight. Its governance structures should be run by policymakers selected on the basis of their independence and expertise as well as their capacity to represent diverse interests. Overall, support from the US and other donors in the design and implementation of a CTF should be based on a partnership that incentivizes developing countries to take meaningful actions to reduce their emissions while promoting their own sustainable development priorities.

Background

Increased support for the deployment of clean technologies is needed

Worldwide, more than 60% of global greenhouse gas (GHG) emissions come from the energy sector, where most countries continue to depend on polluting fuels and inefficient technologies. In most developing countries the need to sustain economic growth and alleviate poverty is increasing demand for energy. The rising costs of conventional fossil fuels such as oil, and growing concerns about energy security, together with growing awareness of the realities of climate change are sparking new interest in alternative options for meeting energy needs in all countries. There are significant opportunities to improve the efficiency of systems, and to increase the deployment of clean and renewable energy technologies. The realities of climate change demand fundamental transformations in how all countries produce and use energy. Making funds available to support the deployment of clean technologies to meet and reduce demand for energy can be an important contribution to this goal.

The proposed US contribution to a CTF would be administered by the World Bank as one of a portfolio of “Climate Investment Funds” that will “provide concessional finance for policy reforms and investments that achieve development goals through a transition to a low carbon development path and a climate resilient economy.”2 More than 10 countries are expected to contribute to this significant multilateral effort, including the United Kingdom ($1.58 billion over 3 years) and Japan (which is expected to commit at least $995 milllion). While the proposed CTF would make an unprecedented amount of dedicated financing for clean technology available, these funds will not be adequate to meet the full costs of deploying clean technologies at the necessary scale. The International Energy Agency predicts that developing countries will need more than $15 trillion of investment in their energy sectors by 2030. The proposed US contribution of $2billion over the next 5 years is a relatively small sum of money by comparison, and will need to be used strategically to catalyze truly transformative changes to help developing countries transition to a sustainable energy future.

The Clean Technology Fund should leverage transformative technologies and support progressive policies

In designing the Clean Technology Fund, the World Bank intends to support large scale emission reductions, and catalyze momentous changes in how energy is used and produced. The Bank has proposed that the funds should be technology neutral so that the most appropriate technologies for local needs can be deployed at a large scale. A shortfall of investment in clean technologies is not the only barrier to transforming the energy sector. In most countries, policies and regulations tend to emphasize short term cost and supply considerations, rather than the long term benefits of cost savings, enhanced energy security and environmental performance offered by clean technologies. A combination of regulatory and market failure has led to energy prices that do not reflect the true costs of fossil fuels to public health, to the local environment and to the climate system. Decision-making in the energy sector tends to be both exclusive and non-transparent, dominated by interests with a stake in “business as usual” practices. Policy innovations that promote full cost analysis of technology options and more transparent, inclusive and accountable decision-making, are essential to leveling the playing field for renewable energy technologies.

Financial resources are needed to support reforms in policy and regulatory frameworks that promote the supply of and demand for renewable, low carbon and energy efficiency technologies and practices. These might include mechanisms such as demand side management systems such as incentives to encourage efficiency, feed-in tariffs for renewable energy, and renewable energy portfolio standards. In addition to supporting countries that decide to undertake these reforms, Congress should do more in the United States to demonstrate to the rest of the world how better energy policy can ensure clean energy innovation.

If policy reforms are to take hold, they must be developed and implemented through transparent, open and credible processes. Citizens and civil society have an important role to play in ensuring that such measures are well suited to local needs and realities. Support for policy reforms in developing countries should not lead to narrow prescriptions on technology choice, or strategies designed to force unrelated economic reforms. Such approaches are likely to undermine the legitimacy of reforms for domestic audiences in developing countries and could sour international negotiations on new commitments for developing country actions.

The CTF’s emphasis on energy efficiency and on opportunities to support sustainable mobility through improved access to effective public transportation systems, is welcome and needed. Increasing access to efficient and effective public transportation systems, particularly in cities, is an urgent priority in developing countries and can have significant environmental and social benefits. The proposed emphasis on opportunities to improve efficiency more broadly, including in buildings is also an important initiative. However, the Bank’s current proposal on the fund suggests that the CTF could also support the adoption of best available coal technologies, and switching from coal to natural gas, to achieve such reductions.

Best available coal technologies such as supercritical coal are already more cost effective than conventional sub-critical coal in most cases. The operating costs of such plants are significantly lower than subcritical coal because they require less fuel inputs. While natural gas fueled power may be less greenhouse gas intensive than conventional coal fired power, such technologies still produce significant volumes of greenhouse gas, particularly when emissions are calculated on a lifecycle analysis basis, and are already widely deployed on a commercial basis. It would be a poor use of scarce public resources to address climate change, to support investments in marginally less GHG intensive technologies that are already more cost effective than conventional coal, and will still emit large amounts of carbon for decades to come.

Distributed renewable energy technologies, and some energy efficiency programs are likely to have more direct benefits for poverty alleviation. As the Bank proposal on the CTF recognizes, transmission and distribution infrastructure already suffer from chronic under-investment and maintenance. An emphasis on the “distribution” component of distributed energy, will be necessary in order to begin to make smaller scale renewable energy technologies competitive with large centralized grid solutions.

New solutions to the climate impacts of coal are needed. Improving the efficiency of existing coal fired facilities can make a crucial contribution to this end. For new coal facilities, emerging carbon capture and sequestration technologies may be able to play an important role in reducing emissions from established centralized energy systems to power economic growth. This technology has attracted significant interest, particularly in the fast growing economies of Asia which are highly dependent on coal for their energy needs. However, the risks and uncertainties around these technologies remain high.

The CTF should also be used to build in-country capacity to do research and development for new technologies. Many middle-income countries already have very significant technical and scientific capacity, and there is a wide body of experience to suggest that such expertise can help tailor new technologies to be more appropriate to national needs. Given that in many countries energy service infrastructure remains –often for very good reasons—in public hands, building public research and development capacity could perhaps facilitate the deployment and commercialization of such technologies.

The priority of the Clean Technology Fund should be to support “zero carbon” technologies in the power sector such as renewable energy, and improvements in energy efficiency in existing power generation infrastructure. Creative use of the Clean Technology Fund resources could deliver significant results in reducing the costs of promising zero carbon technologies to facilitate their deployment at large scale. Congress should seek clear and ambitious principles to guide the choice of most the most appropriate “clean” technologies for national needs.

Transformation should begin with the World Bank’s core energy portfolio

The World Bank can play an important role in supporting the deployment of clean technologies in rapidly growing developing countries. The Bank has recognized that it can do more to mainstream climate change into its efforts to support economic development. WRI analysis presented in the brief, Correcting the World’s Greatest Market Failure: Climate Change and the Multilateral Development Banks, reveals that operationally, opportunities to support the deployment of clean energy technologies to mitigate emissions and reduce climate risks are still not systematically incorporated into policies and projects supported by the World Bank.

Climate change considerations need to be mainstreamed into decision-making at the World Bank. Overall, attention to climate change and opportunities to support the deployment of clean energy technologies in World Bank Country Assistance Strategies (CAS), the documents used by the Banks to plan support to borrowing countries, remains inconsistent. Of 54 CASs reviewed, only 32 mention opportunities for GHG mitigation in sector level interventions; and 18 identify concrete targets or outputs to this end. As late as 2007, nearly 50 percent of World Bank lending for the sector did not consider climate change issues at all, and over the last three years less than 30 percent of its financing has comprehensively integrated climate change considerations (See figure 1).

The use of the Clean Technology Fund to support renewable energy and energy efficiency in middle income countries such as China, India, Brazil and Indonesia can help the MDBs find new relevance in these countries. The World Bank, and other MDBs such as the Asian Development Bank, Inter-American Development Bank, who would be entrusted with programming the Clean Technology Fund remain heavily invested in “business as usual” projects. Commercial private sector capital is now widely available, particularly in middle income countries, for such projects. It is essential that the World Bank consistently help member countries assess the full suite of options for low carbon, climate resilient development. Private financing for renewable energy technologies and energy efficiency programs is much less readily accessible, and urgently needed.

Table 1. Climate Change Considerations in Energy Pipelines of the World Bank, IFC, ADB and IDB World Bank (see PDF)

GHG accounting is a critical tool to help identify opportunities for energy efficiency, and identify cleaner options for meeting energy needs. Although several MDBs have adopted GHG accounting practices for their direct operations as well as their investment portfolios, these efforts have yet to be operationalized. Current practice at the MDBs still does not yet consistently explore less carbon-intensive approaches to economic development. If MDBs can help build the capacity of actors and institutions in developing countries, such as electricity utilities and ministries, to measure and manage GHG emissions, they may have a substantial impact on helping reduce future emission trajectories.

MDBs can help developing countries assess alternative approaches that might help countries reduce carbon emissions while still meeting their development objectives. The decision as to which of these options will best meet needs for environmentally sustainable economic development will necessarily remain with developing countries. Money from the Clean Technology Fund could be made available to help meet the incremental costs of cleaner choices if MDBs conducted such analysis on a systematic basis.

World Bank Country Strategies need to identify how sectoral policies will affect emissions trajectories in client countries and how these strategies will be affected by predicted impacts of climate change. The goal of such integration should be to increase the quality of information and the range of choices available to decision makers, without locking client countries into prescribed policies or technologies.

In order for the Clean Technology Fund to have a transformative impact, climate change considerations and measures to support the deployment of clean technologies must be reflected in all aspects of World Bank interventions in relevant sectors. Representatives of the US government on the Board of Executive Directors of the World Bank Group can play an important role in monitoring progress to this end.

The CTF should operate in accordance with widely accepted principles reflected in the UNFCCC and other sustainable development instruments

It is essential for the US to play a constructive leadership role in a global cooperative effort to respond to climate change, and an important step to this end is to ensure that the administration of the Clean Technology Fund is consistent with the principles of the UNFCCC. Several observers have expressed concerns that activities and programs implemented through the Climate Investment Funds and the Clean Technology Fund in particular may undermine or predetermine the outcomes of global negotiations on technology transfer and financing through the UN Framework Convention on Climate Change (UNFCCC).

The CTF should help pave the way to a global agreement on climate change through the UNFCCC. The negotiations at the recent meetings of the parties to the UNFCCC and Kyoto Protocol in Bali at the end of 2007 kicked off a critical two year process, which will have to result in a more detailed vision of concrete actions that will result in a meaningful response to climate change. The road map that all countries including the US agreed upon in the Bali Action Plan has created an important strategic opportunity to help exploit synergies between the demands of development and poverty alleviation, and opportunities to mitigate climate change.

US support for the Clean Technology Fund should be additional to continued and increased support for poverty eradication and economic development across the world. The US can do much more to support the pervasive challenges of poverty that afflict millions of people around the world. While funds made available to support the deployment of clean technologies in developing countries must complement foreign assistance for poverty and development, and not detract from these programs. Indeed, a new challenge for the US going forward will be to ensure that initiatives supported by foreign assistance are consistent with the goals and objectives of the UNFCCC.

The US should make sure that funding is made available on a grant basis to support the incremental costs of using clean technologies instead of fossil fueled or inefficient technologies. Given that developed countries are responsible for the majority of the greenhouse gas emissions that have accumulated in the atmosphere to date, the UNFCCC recognizes that developed countries should support developing countries to respond to the challenges of climate change. By making these grant funds available the US can help developing countries make more sustainable choices, without unduly penalizing them for a problem they did not cause.

Balanced representation of developed and developing country governments in administration of the CTF is crucial. The World Bank in consultation with a range of stakeholders has proposed an equitable governance structure for the CTF that includes equal representation of donor and developing country governments on the Trust Fund Committee. This is important to ensure that developing country perspectives are adequately represented in decision-making on how to use the funds. It will be essential to maintain the highest standards of transparency and inclusiveness in the design of programs and projects that are supported by the clean technology funds. The successful deployment of clean energy technologies to catalyze low carbon development requires wide ranging public debate. Current proposals on governance of the fund propose an annual partnership forum on the Climate Investment Funds that would include civil society, but this provision seems inadequate to ensure a robust level of citizen input. A more formal role for representatives of civil society in the governance of the fund – perhaps as an independent technical expert –would be valuable.

The Fund must operate on the basis of maximum disclosure. Adequate information on the choices that the various governing committees of the Clean Technology Fund are making and on their decision-making processes must be easily accessible in the public domain with adequate time for interested parties (particularly stakeholders in developing countries implementing clean technology programs) to be informed and engaged. A very narrow range of legitimate exceptions (such as for truly business confidential information - proprietary information, trade secrets, etc.) should apply. Early disclosure of documentation on proposed “low country” programs to be supported by the fund, and of project proposals before they are approved by the Trust Fund Committee are essential. Timely public monitoring of the implementation and impacts of projects and programs funded by the CTF are also needed.

These provisions for transparency and inclusiveness take on even greater importance in light of the links between programs implemented with the Clean Technology Fund and international negotiations through the UNFCCC. Making such information easily available can play an important role in ensuring that stakeholders in the UNFCCC negotiations are fully informed of developments, and so that these programs implemented with the fund do not predetermine the outcomes of negotiations on a post 2012 climate regime through established international processes.

If administration of the Clean Technology Fund is consistent with the principles of the UNFCCC, programs implemented have the potential to demonstrate to developing countries that they can in fact take meaningful low carbon actions to promote their own sustainable development priorities, with real support from developed countries such as the US.