James Connaughton, Chairman of the White House Council on Environmental Quality gave a press conference in Brussels on 18 May. EurActiv has reproduced excerpts of this briefing. (Video and sound available here from the US EU Missions's web site)
- On EU-US cooperation on climate change
We're discussing a wide range of measures. I think it is accurate to say that the range, intensity, and diversity of policy measures currently being discussed between the EU and the US on climate change actually have 80-90% more in common than they do in difference.
- UN climate conference in Bonn
I got a strong read-out from that meeting from my delegation as well as from other delegations [that the conference was positive]. The issue of climate change continues to attract outside interest in differences around process steps and [does] not focus nearly enough on the massive common ground in terms of measures and opportunities for substantial greenhouse gas (GHG) reductions in the near, medium and long term.
- US stance on the Post-2012 debate (post Kyoto)
The future is happening before our very eyes. Regardless of the Kyoto Protocol or the commitment that we have undertaken under the UNFCCC, the actual implementation of those collective obligations is unfolding through […] an unprecedented range of multilateral and bilateral technology development and deployment partnerships.
All of this activity is focused on identifying the most effective opportunities with existing technology and the most promising opportunities with future technologies to accelerate our efforts to reduce the growth of greenhouse gases (GHG).
I can give you some examples: One of the most innovative examples was the methane to market initiative that was forged last year [includes UK, China, India, Russia, Australia, US, Ukraine and others]. This partnership has a specific target of a 15 million metric ton reduction of carbon equivalent by 2015 through the profitable capture and conversion into energy of methane from coal mining, the construction and operation of modern sanitary landfills and from stopping leaks in badly managed natural gas production and distribution systems.
We then have longer term partnerships with respect to hydrogen; building and sharing technology for zero emission coal-fired power plants; clean diesel; new and more advanced renewable bio-energy systems.
All of this is unfolding in implementation measures. And they all involve quite formal agreements among countries and also quite specific sharing of resources and budget planning. So when you ask me what the future looks like, the future is that shape.
- US stance on the Post-2012 debate (continued)
I could not predict right now the exact form of an arrangement beyond Kyoto because many countries have many different views on that. What I can say with confidence though is the formal take shape around this set of multi-lateral and bi-lateral arrangements because that is where the action is.
- Concrete measures
It is technology development and deployment; it is practices in the developed world being shared with the developing world; it is removing barriers to investments that can accelerate a rapid improvement in efficiency and productivity in both developed and developing countries; and then it is shared experience with different policy instruments.
Let me give you an example there: In Europe you have very high gasoline taxes that helps incentivise choices in vehicles that are more fuel efficient. In America, we have a regulation that does that - and we are going to make further progress on making the standards stricter - as well as a several billion dollars package in tax credits to incentivise those choices. So we have a different portfolio of instruments but they are aimed at the same objectives. In Europe, you have chosen a regulatory approach, we might choose an incentive-based approach.
- US view on the EU emissions trading scheme
As a broad policy concept, we think market instruments applied in the appropriate circumstances are one of the best tools for efficient performance. Several weeks ago, we have launched an expanded pollution trading programme that will control not just sulphur dioxide (SO2) but also nitrogen oxide (NOx) and for the first time, will reduce and cap the pollution of mercury from power plants. By controlling air pollutants for human health protection, that is also going to drive significant efficiency investments in our fossil fuel sector that will also produce CO2 reduction benefits. But it will do it in a way that keeps the investment in coal. It will produce a more than 50 billion dollar market for the purchase of clean coal technology and services to operate and maintain that technology.
- CO2 trading
We're not in favour of that in the US market at this time. President Bush has made it clear: we have set a national goal of improving the GHG intensity of our economy by 18% through a combination of regulatory, incentive-based and voluntary programmes. The president also made it clear that if we are not meeting that goal, he will consider additional measures and place particular emphasis on market-based instruments.
- GHG intensity decoupling from GDP growth
We found that this is a measure that most accurately reflects progress in reducing GHG through investments and the application of technologies. Let me give you an example: The US population has increased by 9.5 million people since 2000 (that is about the size of Sweden) and we have added about the size of the economy of China and our GHG have remained stable.
The kinds of reductions we do not want are the ones that occur by putting people out of work. Intensity is a measure of reduced GHG with economic growth and creation of jobs. Those are the kinds of reductions we want to value here in Europe and in the developing world.
But because of growing population, because the biggest challenges are in the transport, housing and commercial office building sectors, we will experience in the near future a continued rise in GHG. But they will rise at a much slower rate than the rise in GDP and population. The objective then is to stop the growth of GHG. But the first step has to be the decouple. Now, absolute numbers matter too. We are just talking about measuring the most successful outcomes by using that method.
- GHG emissions in the US
In the US, [emissions] have stopped, they have stabilised. But we do expect with the rates of growth that we are seeing, that we will begin to see a slight rise again in our GHG emissions. But as we apply the next generation of technology (gasification of coal for example), if we could add a substantial new base of diesel and hybrid powered vehicles, if we can get a much larger turnover of our office buildings the efficiency upgrades, that's when we can begin to see things level off. But those are hundreds of billions if not trillions of dollars of investment that occur over a 20 to 30 year time horizon. And so we could not stop the growth and reverse [of GHG emissions] and still keep economic growth in our country. And that's one of the reasons that we could not sign up to the Kyoto Protocol: It established a target that was impossible for us to achieve. And so we further set a target that is aggressive but within rationality.
- US initiatives at state level
The efforts of states are critical to the overall success of the president's objective of reducing GHG intensity by 18% [by 2012]. City actions are constructed as a series of voluntary programmes as attempts to apply the Kyoto target to their city. It all depends on how much commercial expansion they are expecting. If it is a city that is not growing, they may have a prospect of meeting a Kyoto type target. But if the city is adding a lot of service-based jobs and adding more highway infrastructure, adding more population - that is where our growth is in the US. Our industrial emissions are actually below 1990 levels. The growth is increasingly in services. For example the state of Virginia gives HOV (High Occupancy Vehicles) access to hybrid vehicles. So those kinds of measures at the city, local or state level are very important to the overall objective. And then I think you've seen some mistakes in implementing programmes as well. We welcome all of that activity, but we're hopeful that they will not make choices that are economically damaging.
- US problems with Kyoto
The Kyoto Protocol was very well intentioned. As to some countries, it did not require very much, as to some others, it required more than they could achieve. Some of its mechanisms were theoretically of key interest but in practice are proving to present great challenges.
- US technological programmes and Kyoto targets
I am talking about very large sector-based or very large bilateral or multilateral initiatives that have real management programmes behind them, have real research commitments and have a specific objective to be achieved. And the reason I have confidence in that is because that is what needs to be done in any event - if you're trying to comply with Kyoto or you're trying to live up to your commitments under the UNFCCC - those are the measures that deliver success. Kyoto was the only game in town eight years ago. We now we have a much broader array of opportunities and mechanisms for achieving those outcomes.
- Joint EU-US research initiatives
We've identified some key areas of joint research on technology. Where the dialogue needs to move and will move is into deployment strategies - existing advanced technologies that developed countries now use - and bringing them to developing countries (combined heat and power for example). On mechanisms, the EU's experience with carbon trading is going to be very important to learn from as is our experience with multi-emissions trading. Because ultimately as we go forward in China, Europe or the US, we are going to be in multi-emissions type scenarios. So we have much to share with each other on that.
There is also a whole new set of discussions on measurement and verification of actual [GHG] reductions. All systems which are doing that have been OK but we have substantially upgraded those accounting mechanisms. We just launched a new accounting protocol six week ago. In the EU, each country has its own system, but ultimately that has to come together into a more stabilised system.
- Why would a CO2 cap be impossible in the US?
More than 50% of our electricity generation is in coal. It is fundamental to our energy security, it is fundamental to our affordability and reliability of our electricity system. If we capped CO2 at this time, because there is no current technology for reducing CO2 from coal, a CO2 cap would drive investment out of coal-fired energy and into much more expensive and volatile energy sources such as natural gas. It would also reduce the investment in real terms in the technologies that hold the greatest promise for capturing CO2.
Let me explain: right now conventional coal technology actually sacrifices some efficiency (catalytic converters for example). But the next generation of coal technology is enormously expensive but also much more efficient. It is called gasification of coal. If coal is 30% efficient today, it can become up to 60% efficient with gasification technology. So by creating a market-based incentive for investment in this advanced coal technology, we can then reduce the CO2 as well as create the construction of this technology and experiment with how to capture CO2. A cap would drive away the incentive for this investment. A cap would drive us toward energy systems that are currently low carbon rather than give us the investment in energy systems that can become low carbon.
We have two plants that the government has largely funded, of commercial scale, one in Florida, one in Indiana. Not only do these plants produce 90% less ore pollution but they are getting efficiencies of I think 45%. The plant in Indiana is also producing Hydrogen, it is an integrated plant. So we know on a commercial scale that this is a near-term prospect. It is just exceedingly expensive, so we need to drive the cost down.
- Fuel economy standards for cars
Affordable gasoline is an important component of the stability of our economy. Because we have a large geography, because we travel great distances, it is very important to keep it affordable. That is why our system has favoured a regulatory approach to fuel economy standards and has favoured tax credits and incentives for the purchase of highly fuel-efficient vehicles. President Bush has asked the US Congress to give us the authority to tighten our fuel economy standards for our heaviest passenger vehicles (SUVs and light trucks). And we've already put stricter standards for the years 2005-2007, including for the largest SUVs and hummers [very large American four-wheel drive vehicles]. We are now working on a new proposal for the next round which would happen in 2008 and beyond. So we look forward to further regulations in this area coupled with these tax incentives.
- Tax on kerosene for aviation
We are still very early in the discussions on aviation. Although I have seen a quite promising existing technology which is electric motors for aircraft on the ground. We are looking for those kinds of options.
- GHG emissions in emerging countries
It is easy to predict a dramatic rise in GHGs in countries like China and India and the developing world which will very soon in absolute terms exceed the emissions of the entire developed world. Their emissions already exceed the developed world's emissions in net terms (if you include sequestration). The developed world's emissions are going to flatten and then my work is going to be to reduce them. Our biggest challenge is coming up with a constructive strategy consistent with economic growth and aspirations for human well-being in these countries to put them on a technology path similar to what we enjoy. And that is where we need to find constructive avenues of conversation.