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Diplomacy in Action

Remarks As Prepared By Todd Stern, Special Envoy for Climate Change at the MIT Earth Week Colloquium in Boston


April 21, 2011

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Talk and Action: The Role of International Negotiations in Addressing the Climate Challenge

I am very pleased to be here and want to thank Ernie and MIT for the gracious invitation. Research at MIT is distinguished by a profound commitment to advance scientific knowledge and an equally profound commitment to tackle the great challenges of our day. When it comes to climate change, this is evident in the cutting edge work that professors, researchers, and students on this campus are engaged in – on topics ranging from atmospheric physics to policy analysis to transformative clean energy research.

Today, I am going to talk about three things: the scientific underpinning of the climate challenge; the different roles of national and international action in meeting this challenge; and, where we stand in the global negotiations.

The Science. First, a few words about the science. Pursuing a clean energy future would make sense for many reasons -- enhancing energy security; boosting economic growth; reducing conventional pollution – even if there were no such thing as climate change. But let’s not mince words: we would not be here today – not like this, not with this sense of urgency – if we didn’t know that a singular reliance on fossil fuels was full of peril.

The evidence of global warming is extraordinarily strong, the threat of dangerous climate impacts is high, and the risk of catastrophe is real. These are conclusions shared by the best and brightest of the global scientific community, including our own National Academy of Sciences. Whether we look at the rise in global temperature; the drumbeat of warmest-ever years and decades; the clear shift in precipitation patterns; the dramatic shrinking of both mountain glaciers and Arctic sea ice; the accelerating rise in sea level; the acidification of our oceans; or the rapid increase in forest fires, the tale told by the evidence is the same and it is compelling.

These things matter. They warn of droughts and floods and extreme storms. They warn of water shortages and food shortages. They warn of a world that 11 retired generals and admirals wrote about in 2007, in which climate change becomes a "force multiplier for instability in some of the most volatile regions of the world." Think of the killing heat wave, drought and fires in Russia last summer. Think of the monumental floods in Pakistan. Think of New Orleans. These are the kinds of devastation global warming is predicted to bring.

Yet, an odd phenomenon has taken hold in our culture. Questioning of the science of climate change is on the rise even as the scientific evidence grows stronger by the day. Public concern has decreased, per Gallup – from 67% of Americans who worried a great deal or fair amount about climate change in 2008 to 51% now. This decline is a concern, and we need to understand it better. But public officials, who ought to know better 2

before they speak, have also spurned the evidence in greater and greater numbers, and this needs to be challenged.

There is surely much to do to deepen our understanding of climate phenomena and sharpen our projections, but what we know already should impel us to act – not only for our own sake, but for the sake of our children and grandchildren. "Drill baby drill" is an inadequate response. As Senator Moynihan used to say, we are all entitled to our own opinions, but not to our own facts. In short, it is time – well past time – for all of us to inhabit the same factual universe. After that, we can debate solutions.

Taking action. So what should we be doing to address climate change? Some might say, "Negotiate a treaty!" But the primary answer is that we need to take action on the ground. We need consumers and businesses to use energy more efficiently in our cars, homes, offices and factories. We need windmills and solar panels to be installed and next-generation biofuels to be developed. We need natural gas to substitute for coal and coal emissions to be captured and buried. We need to deploy what we have and invent what we don’t.

This kind of action – action to transform economies, cut emissions and create jobs – happens only when innovators and engineers, producers and investors do what they do best, supported by the right kind of government policy and investment.

Over and over again through our history, targeted government engagement has paved the way for the technological breakthroughs that have driven American growth and prosperity. It happened with railroads and the interstate highway system, with aviation, computing, telecommunications and the Internet. We need to support clean technologies vigorously, so the day comes soon when they are competitive with fossil fuels on a truly level playing field.

That is why President Obama has focused so squarely on clean energy RD&D, starting with the 2009 Recovery Act and continuing through to the State of the Union two months ago and the robust energy speech he gave at Georgetown University on March 30.

Under the Recovery Act, the U.S. is investing more than $90 billion in clean energy.

That $90B includes $29 billion for energy efficiency, $21 billion for renewable energy generation, $10 billion for grid modernization, and $6 billion for advanced vehicles and fuels. When supplemented by private capital, the Recovery Act’s $90B is supporting more than $150B in thousands of clean-energy projects.

Those investments are making a difference. Some examples:

Two years ago, the U.S. had just two factories making advanced vehicle batteries, accounting for 2% of global manufacturing capacity. Thanks to an investment of $2.4B under the Recovery Act, the U.S. will have the capacity to produce 40% of

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the world’s advanced batteries by 2015. And Recovery Act investments will build out the electric charging infrastructure in the U.S. from fewer than 500 electric charging stations before the Act to over 20,000 by 2012.

DOE loan programs have had a major impact, supporting more than $28 billion in loans and loan guarantees for 26 clean energy projects, including: the world’s largest photovoltaic solar plant; two of the world’s largest solar thermal projects; the world’s largest wind farm, and a biodiesel project that will nearly triple the amount of renewable diesel produced in the United States.

Since 2008, some 16,000 MW of new electric generating capacity has come online from wind, solar and geothermal energy, increasing installed capacity nearly 60% in two years, on the way to the President’s goal of doubling renewable capacity by 2012.

In March, the Air Force flew an F-22 Raptor faster than the speed of sound using an advanced biofuel blend, and is aiming to get half of its domestic jet fuel from alternative sources by 2016.

The Recovery Act is expanding and modernizing our electric grid so that it can carry remote sources of wind and solar energy and operate more efficiently. It has helped fund new transmission lines. It has deployed $4.5B for Smart Grid investments, demonstration projects and capacity building. And by 2012, the number of homes with smart meters will have risen from 8 to 26 million.

The Administration is also pursuing a multi-track R&D approach under the leadership of our Nobel-Prize winning Secretary of Energy, Steve Chu.

The Recovery Act funded ARPA-E for the first time to support early-stage research aimed at delivering game-changing technologies. Some $400M in Recovery Act funding is supporting over 100 projects, including batteries to convert wind into a steady power source and micro-organisms that would produce liquid biofuels from sunlight and CO2.

DOE has established three Energy Innovation Hubs – large, mission-oriented research efforts that bring together top researchers from academia, industry and the government laboratories. The first three Hubs were for energy efficient buildings, modeling and simulation of nuclear reactors, and fuels from sunlight. Now the President is proposing three new Hubs for batteries and energy storage; smart grid technologies; and critical materials.

DOE has also established 46 Energy Frontier Research Centers, mostly university-led teams working on basic research to overcome technical impediments to clean energy development.

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The President’s FY 2012 budget proposal calls for doubling DOE’s energy efficiency investments and a 70% increase in renewable energy R&D.

At the same time, the President is focused on bolstering the market for new technologies. That’s the impetus behind his proposal for a new Clean Energy Standard, which will double the percentage of electricity we get from clean sources to 80% by 2035, and in the process create enormous demand for clean energy technologies.

He has also set goals – backed up by policy – to put a million electric cars on the road by 2015; and to increase the efficiency of commercial buildings – 20% of our total energy use – by 20% within a decade.

In addition, in 2009, the Administration broke a long-term stalemate on the fuel efficiency of cars and trucks, putting in place our most ambitious standards ever. And we are also taking common-sense steps to regulate greenhouse gases using our existing authority under the Clean Air Act.

Of course, these are tough fiscal times. But as the President said at Georgetown, it makes no sense to sacrifice the investments that will allow us to compete in the multi-trillion dollar clean energy market. This is high stakes stuff and it should not be ideological or partisan. No one should want the U.S. on the sidelines as our competitors race for global economic leadership. The transformation of the energy base of the global economy is the great game of the next several decades, if not the century. We need to be in with both feet.

International. Let me turn now to the international front. If the key to meeting the climate challenge is national action, what is international engagement for? This is not a trivial question, because I think some of the conventional wisdom on this subject has been wrong.

That wisdom for years, including through the overheated and over-hyped run-up to Copenhagen in 2009, was that we need a new treaty assigning countries legally binding international obligations to reduce emissions. But there are two problems with this conventional wisdom. First, we cannot, for now, reach this kind of agreement; and second, we can make strong, effective progress without it – by which I mean that while internationally legally binding mitigation commitments might be desirable, they are not an essential element at this stage of a global effort to contain climate change.

Starting with the first point, the truth is that it was never in the cards for Copenhagen to conclude an agreement in which all the major players – including developing countries like China, India and Brazil, among others – would agree to accept internationally binding legal obligations to limit their emissions.

What the developing countries have traditionally meant when they said they wanted a new treaty to reduce emissions was that they wanted developed countries only to be 5

bound by such a treaty. This accorded with the prevailing paradigm of climate negotiations – that there is a firewall between developed and developing countries as they were defined in the 1992 Framework Convention on Climate Change, with all specific obligations to cut emissions assigned to developed countries.

But there are multiple problems with this paradigm. First, though I’ll spare you the details here, it is wrong as a matter of textual analysis; the Framework Convention – the foundational treaty for climate – never created a firewall.

But beyond this legal point, the paradigm is unworkable as a matter of substance. You cannot address the climate challenge by focusing only on developed countries when developing countries already account for around 55% of global emissions and will account for 65% by 2030. You cannot build a system that treats China like Chad when China is the world’s second largest economy, largest emitter, second largest historic emitter, will be some 90% larger than the U.S. by 2020, and has even surpassed France in per capita emissions. Instead, you need to start with all the major emitters, both developed and developing, accounting for some 85% of global emissions and build out from there.

In short, to insist on mitigation commitments that are legally binding at an international level is to run into a dead end. They don’t make sense – and we would not support them – unless they apply at least to the major developing countries, but those countries have not been prepared to accept them.

Of course, we understand that the content of mitigation commitments are at this time appropriately differentiated – developed countries commit to absolute reductions below a baseline, while developing countries commit to reductions on a relative basis. But the character of the commitment must be the same. Not mandatory on one side, voluntary on the other. That is our conception. But, as noted, major developing countries have not accepted this symmetry in the context of a legally binding international agreement.

I do not, however, see this as a cause for despair. If you think about what elements of a global climate effort can be addressed at the national level and what can only be addressed internationally, mitigation commitments fall into the first category. Let me be clear about this. I am not suggesting that mitigation commitments are simply a country’s own business. It makes a great deal of difference that all countries can see what others are undertaking to do and that this mutual process of stepping forward serve as a prod, goading countries to do more than they would in isolation. And it makes a great deal of difference that all countries have confidence that others are following through on their undertakings. These things are important because climate change presents a classic problem of the global commons – no single country will want to take action if its competitors do not.

But insisting that mitigation undertakings be legally binding at the international level rather than at the national level is not worth the candle, at least in the short run, given the realities I’ve just reviewed. Moreover, the added benefit of international bindingness is 6

limited at best without a full system of compliance and enforcement, applying to all major players, and that is just not likely anytime soon. Further, even if you imagined an international system that did include a genuine compliance and enforcement regime, it is open to question whether such a system would be most effective in combating climate change.

At first blush, it might seem to be – putting teeth into a system always sounds good – and maybe it would work out that way. But it is also quite possible that the anxiety produced in countries by such a system would lead them to low-ball their mitigation commitments out of fear that they might end up facing international penalties if their mitigation efforts fell short. We have, in fact, heard exactly such concerns expressed in the private corridors of the negotiations.

Again, none of this needs to be a cause for distress. What you really need to make a global system work with respect to mitigation are two things: First, you need countries to put in place mandatory domestic laws and policies that will reduce their emissions; the domestic level is where any real enforcement takes place. Second, you need an element that is genuinely international – a system of transparency and accountability with respect to such plans both to provide the mutual confidence among countries that we talked of a moment ago, and so that the international community can see the level and the trajectory of global emissions.

This kind of approach – a bottom up agreement in which countries submit their national targets or actions, with the implementation of such measures subject to responsible international review – is, in essence, what we have been advocating since early 2009, and this approach is largely reflected in the 2010 Cancun agreements, as it also was in the 2009 Copenhagen Accord.

There are, of course, other elements of a global regime that are usefully international rather than national. These include providing various forms of financial and technology assistance to poor countries to help them develop on a low-carbon path, preserve forests and adapt to the impacts of climate change that are already inevitable. Such assistance does not require action at the level of the UN climate body, the UN Framework Convention on Climate Change; it could be provided through bilateral or plurilateral channels. And to the extent that negotiations over these issues become too acrimonious, too riven by antagonisms and resentments that have nothing to do with solving climate change, then the locus for action will shift away from the UNFCCC. But if we can work in a cooperative, mutually beneficial way, the UNFCCC still has much to offer in addressing these assistance issues.

Going forward. Where, then, do we stand in the negotiations and what is the outlook? The first priority for the work leading up to this year’s conference in Durban, S. Africa, should be to implement the key agreements reached in Cancun – to draft guidelines establishing a transparency and accountability system; to establish a new Green Fund; to set up a Climate Technology Center and Network; and to create a new Adaptation 7

Committee. If we did this, building the new institutions needed for a pragmatic international regime, this year could mark another notable step forward.

Whether we will manage this, however, is by no means clear. Two weeks ago, the year’s first negotiator-level meeting of the UNFCCC took place in Bangkok for all 192 countries, and the results were not encouraging – a three-day fight over the agenda for this year. Not as bad as bickering over the shape of the negotiating table, but not a lot better. The long-existing tensions running through these negotiations may have abated a bit, but they are still very much with us.

Most fundamentally, many developing countries, including large ones, continue to be fixated on preserving the absolute separation between developed and developing countries. For the reasons I have already outlined, we are not going to be part of a new agreement with a fixed, bright-line, 1992-vintage firewall.

Let me expand on this point a bit. The notion that the world should be indefinitely divided for climate change purposes into categories established in 1992 makes no sense. Look at some basic facts and figures.

Four countries classified as developing – "non-Annex 1" in the lingo of the Framework Convention – are now in the OECD. That is a good thing of course, but not consistent with permanent residence on the other side of a firewall.

More than 30 non-Annex 1 countries have higher per capita incomes today than 1/3 of Annex 1 countries did in 1992, and the richest 20 of these have incomes higher than a quarter of Annex I countries today. Indeed, four of the 10 richest countries in the world in per capita terms (and 17 of the top 50), are non- Annex I.

As of 2009, four of the top 10 and 9 of the top 20 emitters of CO2 from fossil fuels were non-Annex 1.

To give a sense of what has changed since the 1992 categories were published, China’s GDP is nearly 6 times larger than in 1992; its per capita GDP is more than 7 times larger; its CO2 emissions are nearly 4 times larger and its per capita CO2 emissions are 3 ½ times larger. What’s more, China and other emerging market countries are growing by leaps and bounds, so five and ten years from now these numbers will be all the more striking.

In short, there is no conceptual justification for freezing, circa 1992, our expectations for country action; to indefinitely shield all countries that fell below a 1992 threshold, irrespective of how much they have grown and developed over time.

What, then, would we propose to do? Broadly speaking, there are two reasonable options. The first is to acknowledge that countries should graduate from Non-Annex 1 to Annex 1 upon satisfying certain relevant criteria. Those criteria might, for example, pertain to a country’s economic development or emissions profile. The second option is 8

to leave the 1992 categories alone, but to abandon the claim that these categories determine responsibilities or expectations. Instead, rather than a bright line separating Annex 1 from Non-Annex 1 countries as of 1992, there would be a continuum, with countries of greater responsibility and capability expected to do more.

Either of these options would be consistent with the Framework Convention principle that nations have common but differentiated responsibilities and respective capabilities.

Now I realize that this topic – call it evolution – has not been considered suitable for polite conversation in the meeting rooms of the UNFCCC, but that’s no reason to ignore it. The United States included a proposal for evolution in our spring 2009 submission and language on it appears – in brackets of course – in the negotiating text prepared at the pre-Cancun meeting last October in Tianjin. We certainly would not consider a new legal agreement that failed to include evolution. And even in a non legally-binding world like the Cancun agreements, we will need to confront this issue squarely before long.

Beyond the firewall question, there are other difficult issues that could derail the international negotiations. The most obvious is the ongoing puzzle of the Kyoto Protocol, which still exists, though the United States is not a party. In a word, developing countries insist on a second Kyoto period, starting in 2013, in which developed country parties alone would make legally binding commitments to reduce their emissions. Many developed country parties oppose such a second Kyoto period since the U.S. isn’t in Kyoto and the emerging economies have no obligations. This issue, once again, goes back to that old firewall problem.

The question for the UN climate negotiations, at the end of the day, is what parties want. The UNFCCC has the potential to be a cooperative, mutually beneficial platform – though not the sole platform – for combating climate change. It also has the potential to be a platform focused mostly on rhetorical thrust and parry, with a thick overlay of accusation and blame. The one vision is useful. The other is not.

We will continue working to support that first vision, always bearing in mind that the central mission of our discussions must be to try to solve the climate problem, not to settle old scores. The ongoing challenge for the UNFCCC is to be the kind of body that remains relevant to that task.



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