In 1998, Republican Senator John Chafee and Democratic Senator Joe Lieberman were blasted by skeptics for writing legislation that would give companies credit for early reductions of greenhouse gas emissions. Last year, we had Senators Hagel and Voinovich, offering credit for early reductions, and Senators John McCain and Joe Lieberman offering an economy-wide cap and trade bill.
The McCain-Lieberman proposal brings together several features that would be critical to the success of a national climate change strategy. It would establish binding targets for reducing U.S. emissions and provide companies with the flexibility to reduce emissions cost-effectively, thanks to the creation of a nationwide system allowing emissions trading, providing credit for carbon storage and providing additional flexibility to companies taking the lead on this issue.
There are still skeptics and those who prefer to do nothing. Some of these continue to argue that the science is uncertain and that action to deal with climate change will ruin the economy. These individuals are working very hard to see that we do not have a legitimate national policy on this issue.
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I do not believe they will prevail. There are many certainties in the science and many actions that can be taken with no negative economic impact. With careful planning, execution, and continued technological development we can address this problem and still have a growing global economy.
The first thing that must happen is for the United States to address how it will supply and use energy. The electric power and transport sectors create over 80 per cent of U.S. emissions, so the extent to which we weigh the climate impacts of our energy choices will determine whether we can and will reduce these emissions.
The current debate on U.S. energy policy is not close to the hard-nosed assessment we need. In this year's House-floor debate congressmen were not even allowed to bring up climate change amendments and the Senate ducked debate on energy and climate policy by simply passing last year's Senate energy bill.
That's not all bad - that Senate bill included the Byrd-Stevens provision as well as a provision establishing national reporting of greenhouse gas emissions. It was also agreed that the McCain-Lieberman proposal will come up for a vote this fall.
In an effort to develop a clearer future energy picture for the United States, the Pew Center recently teamed up with Peter Schwartz and the Global Business Network to convene experts from the business, academic and NGO sectors to envision future energy scenarios and the implications of these for U.S. policy on climate change to 2035.
The group settled on three future energy scenarios:
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The first was titled Awash in Oil and Gas. In this oil and gas remain cheap and abundant, production technology continues to improve, OPEC collapses, and a highly competitive global oil market emerges. U.S. oil import dependence is rarely mentioned, there is little incentive to improve energy efficiency, and carbon emissions rise rapidly. Seventy per cent of the coal plants operating in 2000 are still operational in 2035.
In the second scenario, Turbulent World, energy supply disruptions and threats to energy facilities lead to aggressive U.S. energy policy measures. The House of Saud falls, oil price spikes and federal focus is on energy security, including vehicle efficiency standards of 50 miles per gallon by 2020 and a crash program to develop and commercialize hydrogen and fuel cell technologies. Threats to nuclear facilities and transmission failures lead the public and policy makers to prefer alternative energy systems. Because of its domestic abundance, coal is favored, continues its dominant role in electricity generation and becomes an increasingly important source of hydrogen.
The third scenario, Technology Triumphs, envisions a future in which four forces - state policies, technological breakthroughs, private investment and consumer interest - project climate-friendly technologies into the marketplace. Significant advances in renewables, distributed generation, and efficiency result (especially combined heat and power, building-integrated photovoltaics, and fuel cells). Many states adopt greenhouse gas standards for vehicles, move forward with initiatives to control power plants, and implement renewable portfolio standards.
This is an edited version of a speech given to the Environmental Council of the States in Salt Lake City on 11 August 2003. Click here for the full text.
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