Climate Change

Ooops ... The Financial Times reports today that China and India once again have rejected a cap on CO2 emissions -- and without these countries and the other large developing nations that will follow their lead, the world cannot seriously address the threat of climate change. China and India's response should be no surprise: as fast growing developing economies, their appetite for the energy that produces most of the CO2 increases sharply every year. Moreover, their modernization programs are concentrated in the most energy-intensive industries around - basic manufacturing and energy-intensive agriculture - while most of their own domestic energy supplies lie in coal, the most climate-damaging fuel. One way to move forward is to give them an alternative to a CO2 cap. Carbon-based taxes should be more appealing, since China and other fast-growing developing countries need more revenues to support the basic public goods of modernization -- infrastructure programs and greater access to education and health care. But that won't be enough: we will have to make it worth their while economically to join us, Europe and Japan in a global campaign to address climate change. That will mean offering them better and cheaper alternatives to the hundreds of coal-burning electricity plants they plan to build every year into the indefinite future. Better alternatives for the climate are widely available, for example, in hydropower or natural gas-fueled generating system, and perhaps soon, in solar and wind as well.

In the end, however, the United States, along with Europe and Japan, probably also will have to make those alternatives cheaper by providing large technology transfers at cut rates. And the United States is the only country that can make any of this happen, at least regarding China. As the largest foreign direct investor in China, its largest export market, and the guarantor of the sea and air lanes across which all of China's trade and oil supplies travel, China's leaders recognize America as the indispensable economic and military power for China's own progress. All we need is a president and administration prepared to use that position to advance the global agenda on climate change.

This morning, Sen. Jeff Bingaman, Chairman of the Senate Energy and Natural Resources Committee, delivered an address on climate change at an NDN Green Project event. The speech laid out his vision for how to address climate change through uniform, workable, flexible and realistic cap and trade legislation that focuses on reducing greenhouse gasses and encouraging investment in the technology necessary to reform our energy system.

In introducing Chairman Bingaman, NDN Green Project Director Michael Moynihan pointed to the critical need to transition to a post-carbon economy, a challenge driven home to Americans every day by soaring gasoline prices.

Entitled, "Finding the Path Forward on Climate Legislation," the speech was a truly important step in enunciating a view of how to responsibly tackle climate change. As the Senate recovers from the aftermath of the Lieberman-Warner debate and looks forward to the next Congress, full statements of principles from key leaders on climate and energy, such as the one today by Senator Bingaman, will be crucial to stimulating the necessary debate to pass effective legislation.

From Senator Bingaman’s introduction to his remarks:

A little over a month ago, on June 6, the Senate failed to invoke cloture on the Lieberman-Warner Climate Security Act. That vote ended any realistic prospect we had of dealing with the problems of climate change in any comprehensive way in this Congress.

From one perspective, the relatively short debate that we had in the Senate on the measure was a disappointment. No substantive amendments were considered or had action taken on them. Despite the tremendous amount of effort put into developing the bill by the sponsors -- Senators Lieberman, Warner, and Boxer – much of the debate was on the generalities of dealing with climate change and not on the specific merits of any particular part of their proposal.

Looked at another way, though, last month’s debate demonstrated an important transition that is underway in Congress. Congress has moved beyond a debate on the science of global climate change. We are now starting a much more difficult debate – one on how best to construct a mandatory regulatory regime to mitigate global climate change.

No one expected that last month’s legislative process would produce a law that would be enacted this year. For one thing, the President issued a statement declaring that he would veto such a law. More importantly, many of us are still trying to master the complexities of this issue, in terms of its multiple effects on the global ecosystem and the global economy, as well as its multiple effects on both the environment and the economy here in the United States.

One thing is clear at this point. Any proposal to seriously address the challenges of responding to climate change will require sustained action -- and a sustained commitment to keep taking increasingly more stringent actions -- over the course of many years.

To approach this issue responsibly, it is important for us to understand two things about the scale of the global challenge of climate change. First, we need to understand the scale of the problem. Second, we need to understand the scale of the system we have -- for producing and using energy -- to change in order to deal with the problem.

We have to keep our eye on both these issues of scale. On the one hand, if we fail to recognize how enormous and urgent the problem of climate change is, we will fail in our responsibility to act sensibly and soon. On the other hand, if we fail to recognize how enormous and difficult a task it is to change our energy system, we may embark on a course of action without making clear from the start the potential sacrifices involved.

As Senator Bingaman notes, the transition to the post-carbon economy will not be simple; the scale of this transformation is vast. By embracing the changes necessary in our energy system as an opportunity to develop a truly competitive and innovative 21st century economy, and by understanding that energy reform is part of any sound economic policy going forward, America can put itself on a path toward sound energy, climate, and economic future.

To view Senator Bingaman’s full remarks, click here.

It's official, energy is now at the very heart of the 2008 Presidential election. While it is unfortunate that it took $4 gas prices, America, all the way to oilman T. Boone Pickens (except, of course, for President Bush), has woken up to a new energy reality. The RNC has responded with "balance," a $3 million ad buy coming on the heels of an ad series from the McCain campaign touting his energy security credentials.

Balance: 

McCain has chosen to make energy security his central issue in this year's campaign. And, while his policies do not match his rhetoric - drilling offshore and suspending the gas tax would do nothing "now" to lower energy prices and would ultimately exacerbate climate change - he has seized what is now the number one issue of the campaign and one of the only issues he has a shot on, running ads in battleground states and forcing Obama to respond. The ad is especially ironic as it features the Republican Party criticizing the Democratic candidate for President for being "just the party line" in a year in which Democrats have a 10 to 15 point party ID advantage.

Obama's response, "New Energy," debunks the RNC/McCain promise of action "now," announces the Obama plan, and actually has some particulars that would make a difference in both energy prices and climate change:

Tomorrow morning at 8a.m. in room 325 of the Russell Senate Office Building, NDN will host Senate Energy and Natural Resources Chairman Jeff Bingaman for an address on climate change. This is the first in a series of events this month from the NDN Green Project's effort to understand this new energy and economic era. For more information on this event and to RSVP, click here.

In a Newsweek Op-Ed yesterday, Fareed Zakaria rails against current American climate and energy policy (or lack thereof) in the context of this week’s G-8 in Hokkaido, Japan.

Whether it's Barack Obama or John McCain who enters the White House in January, the new president could well find his approval ratings sliding fast. The increasingly grim economic news is likely to overshadow all else. Britain's prime minister, Gordon Brown, is already experiencing this reality. While most of the British media would argue (vigorously) that Brown's low poll ratings relate to his charisma, or lack thereof, he is also clearly suffering the political effects of economic malaise.

Like the United States, Britain is going through a credit crunch, a financial crisis and a housing collapse all at the same time. Brown, however, argues that the central problem is skyrocketing food and fuel prices—"that's what hurts the average family most," he said in a conversation last Tuesday. Brown said he hoped that the Group of Eight countries would take them on at its summit in Hokkaido, Japan, this week. "The great challenge for the G-8 is, can we coordinate policies to prevent crises. In the 1980s, we had currency coordination. But with finance globalized, that's not the challenge of the present," he said. "The new problem, worldwide, is energy. We need to coordinate our energy policies."

Brown argues that even in the short- and medium-term, the G-8 countries could do something. "The market assumes that demand will always increase, and in a circumstance of constrained supply, that means prices rise. But we can send a signal that demand is going to moderate, that we are serious about efficiency and alternative energy sources. But it would have to be a clear signal sent by all the major consuming countries."

Last month, Britain laid out plans to generate 35 percent of its electricity needs from renewables by 2020—up from 5 percent now. The country is already the world's largest generator of wind power (with mostly off-shore turbines) and plans to generate 60 times current levels in 12 years. It has also cleared regulations to increase nuclear energy. "You cannot get to a new energy mix without a substantial rise in nuclear power," Brown said.

The contrast with Washington is blinding. George Bush still has not made a serious speech, announced a serious plan or presented Congress with a serious set of laws to move the country toward new energy sources. With oil prices at their highest levels since the discovery of oil (even in inflation-adjusted dollars), and with their rise threatening to push the country and the world toward 1970s-style stagflation—he hasn't brought himself do it. And while we stand pat, the rest of the world is moving. In a recent ranking of countries for environmental performance, jointly produced by Yale and Columbia universities, the United States came in 39th, well behind every other advanced industrial country. (Germany ranked 13, Britain 14 and Japan 21.)

Washington's inaction also stands in contrast to intense activity in the private sector, fascinatingly described in Fred Krupp and Miriam Horn's new book, "Earth: The Sequel." Krupp heads the Environmental Defense Fund, but this is not a gloomy global warming tirade. It's an optimistic account of the progress being made by American industry in renewable energy. The authors explore every new technology, from solar to wind to geothermal, and introduce the men and women who are inventing the future.

But they would be the first to point out that, even though American research labs are rising to the challenge, government action remains vital. The idea that government should "stay out" is meaningless. It is in knee-deep already; energy is a highly regulated industry. In fact, it's notable that we have low productivity and runaway inflation in two crucial areas these days—food and fuel. Both have been nationalized, protected or subsidized by governments around the world for decades. A host of regulatory and legal barriers make renewable and small-scale energy production less attractive, profitable and manageable than it could be. But Krupp and Horn focus on the central policy change that the United States needs to make—enacting a cap on carbon. America is the only developed country that does not put a price on carbon.

Imagine if President Bush were to announce at the G-8 summit that the United States would institute a cap on emissions. We would instantly have the world's largest carbon market and it would, instantly, change the price of clean energy. It would unleash a tsunami of economic activity in renewables that could, over time, give American productivity the next big boost it needs. It would, of course, also quickly send a signal to the market about future demand for oil, which would in turn affect the price.

But somehow I don't think that's what Bush is going to say in Hokkaido this week.

Zakaria is right to suggest that America do what much of the rest of the world seems to know we must: restore American leadership globally by comprehensively tackling climate change and reforming energy policy. He also knows that by doing so, we will address demand for fossil fuels, and fundamentally alter the current energy and economic paradigms. Solutions to the energy and climate dilemmas are not, as some argue, mutually exclusive. Rather, creating a prosperous 21st century depends on understanding that they can be one in the same. The private sector has figured this out, and is making a lot of money while doing so. Let’s see if the government can’t get the picture too.

As climate change, energy prices, and the impact of the “Third Oil Shock” on the American and global economies continue to make front page news every day and change the way we live, NDN’s Green Project is excited to announce a series of events and thought-provoking papers examining these critical issues over the next month.

Building on previous work in the green space, including a forum in New York City entitled, Understanding the Cleantech Investment Opportunity, and talks by energy expert Amory Lovins and electric car innovator Shai Agassi, NDN’s upcoming Green Project will be offering some thoughts on intellectual underpinnings for building the post-carbon economy.

We kick off this important and timely series on Wednesday, July 9, on Capitol Hill with U.S. Sen. Jeff Bingaman (NM), Chairman of the U.S. Senate Committee on Energy and Natural Resources and one of our nation's foremost leaders on energy, who has chosen NDN to host his next address on climate change. This event will start at 8 a.m. in 325 Russell Senate Office Building. Click here to RSVP.

NDN will also be releasing an important new paper by NDN Green Project Director Michael Moynihan entitled, Solar Power: The Case for Action. In this paper, Moynihan places solar energy in the context of major changes needed to our energy policies, including how to reinvent our national economy to cope with high energy prices and increase our technological competitiveness in a post-carbon future.

On Wednesday, July 16, Dr. Robert J. Shapiro, Chairman of the NDN Globalization Initiative, will host a lunch for the NDN community on his new paper, Addressing Climate Change without Impairing the U.S. Economy: The Economics and Environmental Science of Combining a Carbon-Based Tax and Tax Relief, which details a strategy for implementing a carbon tax and using 90 percent of the revenue to cut the payroll tax. The lunch will be held at 12:30 p.m. at NDN: 729 15th St. NW, 1st floor. For more information or to RSVP, contact Kevin VanderMolen at kvandermolen@ndn.org or 202-384-1216.

On Saturday, July 19, in Austin, Texas, Michael Moynihan will join NDN President Simon Rosenberg and Andrei Cherny at Netroots Nation in speaking on A New Era of Possibility—Looking at America's Role in the World after the Bush Presidency.

Finally, NDN has an event in the works to examine the impact of high energy prices on such important elements of the economy as the auto industry, transportation, aviation, the exurbs and, indeed, the American Way of Life. Please stay posted for more details.

Do not miss these events that together will help develop our understanding of the impact of climate change and energy policy on our nation. To read NDN’s latest thinking on these issues, check out the Green Project blog.

On Thursday, the Washington Post published a very thoughtful op-ed, Global Action to Save Global Growth, by Secretary of the United Nations Ban Ki-moon. For those trying to define the narrative, the agenda, the language and better understand the challenges of the era after Bush, this well-crafted piece offers a glimpse into what will be a very different era of global politics and economics:

HOKKAIDO, Japan -- Global growth is the leitmotif of our era. The great economic expansion, now in its fifth decade, has raised living standards worldwide and lifted billions out of poverty.

Yet today, many wonder how long it can last. The reason: Plenty comes at an increasingly high price. We see it daily in the rising cost of fuel, food and commodities. Consumers in developed countries fear the return of "stagflation" -- inflation coupled with slowing growth or outright recession -- while the world's poorest no longer can afford to eat.

Meanwhile, climate change and environmental degradation threaten the future of our planet. Growing populations and rising wealth place unprecedented stress on the earth's resources. Malthus is back in vogue. Everything seems suddenly in short supply: energy, clean air and fresh water, all that nourishes us and supports our modern ways of life.

As the leaders of the Group of Eight gather here, we know that these issues affect us all: north and south, large nations and small, rich and poor. And we know we must find ways to extend the benefits of the global boom to those who have been left behind, the so-called "bottom billion." In dealing with problems of such dimension and complexity, there is only one possible approach: to see them for what they are -- as parts of a whole requiring a comprehensive solution.

A big part of that solution should be a "global supply-side response," as some economists put it, grounded in sustainable development -- nations, international financial organizations, the United Nations and its various agencies working together as one.

Begin with the global food crisis. It has many causes, among them a failure to give agricultural development the importance it deserves. What's needed, in effect, is a "green revolution" of the sort that once transformed Southeast Asia, this time with a focus on small farmers in Africa. With the right mix of programs, there is no reason productivity cannot be doubled within a relatively short span, easing scarcity worldwide. We've seen it happen in Malawi, which with international assistance has shifted within a few years from being a country plagued by famine to one that exports food.

In Hokkaido, I will call on G-8 nations to triple official assistance for agricultural research and development over the next three to five years. We must act immediately to get seeds, fertilizers and other agricultural "inputs" to farmers in vulnerable countries in time for the coming harvests. We must encourage nations to eliminate the export restrictions that many placed on foodstuffs this spring, as well as the more long-standing subsidies that many developed nations provide their farmers. Such artificial barriers distort trade patterns and drive up prices, deepening the immediate crisis and jeopardizing global growth.

With climate change, as well, sustainable development figures large in the solution. Most experts agree that we are nearing the end of cheap energy. Alternative technologies are among our best hopes for cleaner, affordable power. Here, too, a new "green revolution" is underway. The United Nations Environment Program has found that $148 billion in new funding went into sustainable energy last year, up 60 percent from 2006 and accounting for 23 percent of new power-generating capacity.

Our job, as national and international leaders, is to help guide and accelerate this nascent economic transformation. We need to change social behavior and consumption patterns throughout the developed world. And we must help developing countries "green" their economies by spreading climate-friendly technologies as broadly as possible.

We can take a big step forward in Hokkaido. Mindful of our responsibilities to the poorest nations most vulnerable to climate change, we must fully fund the global Adaptation Fund and make it operational. Looking forward to the December climate change summit in Poznan -- and to Copenhagen in 2009 -- we must push ahead with negotiations for a comprehensive agreement limiting greenhouse gases. Above all, we need to inject a sense of urgency and real leadership into this quest. It is not enough to set goals for 2050, far down the road. We need a middle-term timeline to 2020 if we are serious about promoting change now.

Lastly, Hokkaido will test our commitment to the Millennium Development Goals. For Africa alone, donors have pledged $62 billion a year by 2010. Those in need have faces: mothers who die needlessly in childbirth, infants stunted through life because they do not receive adequate nutrition during their first two years. We promised to help. Now is the time to do so.

Never in recent memory has the global economy been under such stress. More than ever, this is the moment to prove that we can cooperate globally to deliver results: in meeting the needs of the hungry and the poor, in promoting sustainable energy technologies for all, in saving the world from climate change -- and in keeping the global economy growing.

These are the ties that bind us. We must act, in Hokkaido and beyond -- not merely because it is the right thing to do but also because it is in the enlightened self-interest of all of us.

In the coming month, NDN will be attempting to address some of the themes raised in this piece. This week we will host a major new speech by U.S. Sen. Jeff Bingaman on the future of the climate change debate in the United States; our new Green Project will release a new paper on the Solar Tax Credit and the need to invest in renewable energy sources; NDN Globalization Initiative Chairman Rob Shapiro will host a lunch looking at a new paper he's released that makes a compelling argument for how and why we can enact a carbon tax; we will host a discussion with Hon. Carolina Barco, Colombian Ambassador to the United States, who will discuss the state of our hemispheric relations and how we can best meet our common challenges; we will release a new paper that looks at the centrality of mobile devices in helping struggling nations grow; we will release a video interview with U.S. Rep. Adam Smith, author of the Global Poverty Act, a far-sighted piece of legislation that will position America to lead the world in meeting the Millennium Development Goals cited above; we will conduct an event on how high energy prices will affect America, a nation built on the assumption of low-cost energy; and of course, we will be banging away each day here on our blog and with the media.

To us at NDN, these are hard times, struggling times for our nation. But also a time of possibility, a time in which we can imagine once again doing big and important things, and leading America and the world with grace, confidence and success into the very different global political terrain of the 21st century.

New York.  Signs that the Third Oil Shock is beginning to do real damage to the economy were evident in GM's close below $10 yesterday, its lowest level since 1954, that drove stocks in to solid bear territory.  Jobs also declined sharply.  The impact of high fuel prices is sure to be a major topic around grills this Fourth of July as people drive or fly to be with friends.  Here is the latest on GM and the economy.

The Financial Times has an interesting story showcasing the shadow boxing now taking place between various actors around a potential Israeli raid on Iran's nuclear reactors that some expect this fall. The US Chairman of the Joint Chiefs of Staff worried publicy about opening up a third front in the region in addition to Iraq and Afghanistan while Iran made it known it would retaliate by blocking off oil routes.  Israel recently conducted maneuvers that some viewed as a trial run for a raid. 

Yesterday, the FT ran another interesting story on Shell Oil.  In the US debate over what to do about high oil prices--drill in the Arctic, force the oil companies to explore the federal land they already lease and so forth--conspiciously absent are the views of the oil companies.  They are the Black Box of the question, keeping a low profile with the public while funding immense lobbying and advertising campaigns behind the scenes.  Their views are presumably known to Dick Cheney and the Bush Administration but whether they are dictating policy to the Republicans or the Republicans are just messaging on their issue is an open question.  The FT article gives an interesting glimpse into one company, Shell and the challenges it is facing as Nigerian rebels step up their attacks on facilities in the oil-rich Forcados River delta and now Nigeria's offshore platforms.  Shell's overall production is declining as Nigerian oil which had been rising until the violence fails to compensate for declining North Sea oil.  Shell's story, if representative, suggests that oil is slowly running out around the world and growing harder to find.  Paradoxical, then, that profits have never been higher.  And, there is something odd about the way that oil is inevitably interwined with voilence--what in the 19th Century was called the Great Game when the players were Russia and England vying for oil around the Caspian Sea.  It is past time to move onto fuels that do not provoke constant wars.

The last couple weeks have seen copious coverage of John McCain's inconsistency on energy policy. These discrepancies have been noted with some curiousity, but with a series of ads on energy security, McCain is clearly attempting to assume the energy security mantle in this campaign, and perhaps it is worth taking greater notice of them. After all, climate change is his signature "maverick" issue - the main issue that he claims not to follow President Bush on.

The problem is that his biggest maverick endorsers - those that he can use to paint himself as bipartisan (or as putting "Country First," his new slogan) - don't really agree with him on his maverick issue. Arnold Schwarzenegger, one of the most progressive executives in the country on energy issues and a McCain endorser, criticized McCain's offshore drilling plan as "blowing smoke." From the Los Angeles Times:

Gov. Arnold Schwarzenegger made a veiled swipe at Republican presidential hopeful John McCain on Thursday when he said at a climate conference here that anyone suggesting offshore oil drilling could bring down gas prices was "blowing smoke."

The remark was also a dig at his host, Florida Gov. Charlie Crist, who riled environmentalists, tourism promoters and the state's political leaders on both sides of the aisle last week when he voiced support for McCain's proposal to lift bans on exploring for oil off the coasts of California, Florida and the Eastern Seaboard.
...

From his podium at the conference, Schwarzenegger said, "Politicians have been throwing around all kinds of ideas in response to the skyrocketing energy prices, from the rethinking of nuclear power to pushing biofuels and more renewables and ending the ban on offshore drilling," Schwarzenegger said. "But anyone who tells you this would bring down gas prices any time soon is blowing smoke."

Another issue McCain faces is that Joe Lieberman, sponsor of the leading climate change legislation in the Senate this year, supports McCain, but John McCain's climate change goals are far more modest than Lieberman's legislation. In fact, McCain skipped the Senate vote on the issue, and indicated that he did not support the legislation.

So, if McCain is a maverick on energy, why don't his two signature maverick endorsers - both leaders on his signature maverick issue - agree with him on fundamental aspects of that very issue?

NDN’s Green Project is pleased to announce that one of the U.S. Senate’s most well-regarded leaders, U.S. Sen. Jeff Bingaman (NM), Chairman of the Energy and Natural Resources Committee, is scheduled on Wednesday, July 9, to deliver a major policy address on climate change to the NDN community.

As Chairman of the Energy and Natural Resources Committee, Sen. Bingaman has been a strong voice for addressing our nation's energy challenges through reducing America’s reliance on fossil fuels, cutting greenhouse gas emissions and increasing investment in innovation and technology necessary to build a clean energy future.

Chairman Bingaman's speech is scheduled for 8 a.m. in Room 325 of the Russell Senate Office Building, in Washington, DC.

Sen. Bingaman has been a long-time friend of NDN and has supported the missions and goals of NDN throughout the years.

NDN’s Green Project is a program of the Globalization Initiative that seeks to develop the legislative and regulatory framework to address climate change, enhance energy security, and accelerate the development of green technologies to promote economic growth.

NDN’s Green Project Hosts Senate Energy and Natural Resources Chairman Jeff Bingaman for Major Policy Address
325 Russell Senate Office Building
Wednesday, July 9
8 a.m.
Click here to RSVP