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Intergovernmental Panel on Climate Change, 2/5/90 [OA 4391] [3]
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25
6
7
4
PRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
FFICE
OF TNE
COUNCIL ON ENVIRONMENTAL QUALITY
QUALITY
UNITED
WASHINGTON, D.C. 20500
STATES
February 1, 1990
Michael R. Deland
(202) 395-5080
Chairman
MEMORANDUM TO: CHRISS WINSTON
FROM:
MICHAEL Mir DELAND
SUBJECT:
IPCC SPEECH -- MONDAY, FEBRUARY 5, 1990
As we discussed, I have some policy-oriented concerns with the
speech as currently drafted.
First, given that it is an IPCC meeting which the President is
addressing, I think it essential that he reiterate the offer he
announced in Malta with Gorbachev, namely to host the first
negotiation session of the Framework Convention. Failure to make
such mention would be read as a retreat by the President before
the very group whose credibility we have a stake in bolstering.
Secondly, there is substantial confusion in the international
community as to the purpose of the spring "White House Conference
on Science and Economic Research on the Environment" which the
President also announced at Malta. I think this would be an
ideal opportunity to articulate the intended results of the
conference.
Further, by not mentioning the "stabilization of greenhouse
gases" goal as set forth at Noordwijk, we could be criticized as
backing away from that position.
Finally, given the sophistication of the audience and that many
have been devoting much of their professional lives to these
issues, we need to be careful not to appear either arrogant or
condescending.
I have attached hurried margin comments on particular wording.
One phrase that leaps out is the characterization "environmental
cold war" on page one. That strikes me as sending precisely the
wrong signal since the U.S. and U.S.S.R., as well as many other
nations, have been cooperating on environmental issues for a
number of years.
I'll be in the office on Friday should you wish to discuss this
further.
cc: Dr. Allan Bromley
Dr. Michael Boskin
Recycled Paper
9.
PRESS
EPARTMENT OF STATE
PR NO. 11
January 30, 1989
REMARKS BY
THE HONORABLE JAMES A. BAKER III
SECRETARY OF STATE
BEFORE THE
RESPONSE STRATEGIES WORKING GROUP
INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE
DEPARTMENT OF STATE
JANUARY 30, 1989
Thank you Fred Bernthal, Professor Bolin, ladies and
gentlemen. I am very pleased to have the opportunity to join
you this morning, however briefly, and to welcome you to the
Department of State. You are the first official group that
I've had the pleasure of welcoming to the Department.
I would also like to welcome Bill Reilly, who is here with us
this morning -- President of the World Wildlife Fund and the
Conservation Foundation. Bill has let President Bush talk him
into becoming the nominee for the post of Administrator of the
United States Environmental Protection Agency, and it's my
fervent hope, Bill, that nothing you hear at this conference
this morning will cause you to change your mind.
The truth is, though, as I don't need to tell those of you who
are here, we face some very difficult problems. It is also
true, though, that we now recognize them to be problems, and in
my experience in government that is at least half of the battle.
Some months ago President Bush said, "We face the prospect of
being trapped on a boat that we have irreparably damaged -- not
by the cataclysm of war, but by the slow neglect of a vessel we
believed to be impervious to our abuse. "
The establishment of the Intergovernment Panel on Climate
Change and this meeting of the Panel's Response Strategies
Working Group, I think, shows beyond a doubt that this is a
transnational issue. We are all in the same boat. And as I
put it in my destimony to the Senate recently, "The tides and
the winds can spread environmental damages to continents and
hemispheres far removed from the immediate disasters."
or further Information contact:
PR NO. 11
-2-
So, if I may borrow a phrase from the environmentalists, the
political ecology is now ripe for action. We know that we need
to act, and we also know that we need to act together. That is
what this meeting is all about.
But I would take it even a step further. One of the big
advantages of being Secretary of State is that because I am not
a scientist, I am, therefore, not called upon to assess the
evidence, especially on global climate change. Yet it is also
clear, I think, that we face more than simply a scientific
problem. It is also a diplomatic problem of when and how we
take action. And here, if I might, I would like to make four
points.
Not
The first is that we can probably not afford to wait until all
of the uncertainties have been resolved before we do act. Time
the
will not make the problem go away.
The second is that while scientists refine the state of our
almost
knowledge, we should focus immediately on prudent steps that
are already justified on grounds other than climate change.
oh
These include reducing CFC emissions, greater energy efficiency
and reforestation.
The third is that whatever global solutions to global climate
change are considered, they should be as specific and
cost-effective as they can possibly be.
The fourth is that those solutions will be most effective if
they transcend the great fault line of our times, the need to
reconcile the transcendent requirements for both economic
development and a safe environment.
Without in any way downgrading the difficulty of the task, I
would conclude, ladies and gentlemen, by noting that progress
generally results when common interests are joined to a common
understanding. This meeting and others like it will play a
crucial role in moving us all toward that common understanding
of what we must do to protect and to preserve our environment.
Thank you very much for having me this morning, and Godspeed.
*
30-50grs webse the sci we should do tript
(Lange/Cawley)
February 2, 1989
1990 FEB - FM 5: 50
2:00 P.M.
[IPCC.DOC]
PRESIDENTIAL ADDRESS: INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE
GEORGETOWN UNIVERSITY
MONDAY, FEBRUARY 5, 1990
10:15 A.M.
Thank you, Dr. Bolin [Bo-leen]. Professor Obasi. Dr.
Tolba. Delegates of the World Meteorological Organization, and
the United Nations Environment Program. Let me commend all of
you, for taking on an issue of such great importance. The
recommendations this distinguished organization makes will have a
profound effect on the world's environmental and economic policy.
By being here today, I hope to underscore concern -- my
country's, and my own -- about environmental stewardship; and to
reaffirm our commitment to finding solutions. It is both an
honor and a pleasure to be the first American President to speak
to this organization, as its work takes shape.
You are called upon to strike an unprecedented international
bargain: a convergence between global environmental policy, and
global economic policy, where both sides benefit -- and neither
is compromised.
You understand that economic growth and environmental
integrity are not contradictory priorities. One reinforces and
complements the other.
A sound environment is the basis for the continuity and
quality of human life and enterprise. And strong economies allow
nations to fulfill the obligations of environmental stewardship.
2
Where there is economic strength, such stewardship is considered
a necessity. But where there is poverty, it is too often a
luxury.
For that reason, I believe we must do everything in our
power to promote global cooperation: for environmental
protection and economic growth. For intelligent management of
industrial and natural resources. Above all, for sustainable
and environmentally
sensitive
development -- around the world.
The United States is strongly committed to the I.P.C.C.
process of international cooperation on global climate change.
We consider it vital, that the community of nations be drawn
together -- in an ordered, rational way -- to assess the
potential for climate change, and develop appropriate, reasoned
responses.
The state of the science; the social and economic impacts;
and the right response strategies: all are crucial components to
a global resolution. The stakes here are very high.
With every word, with every decision made, we're also making
a commitment that is profoundly personal. I think all of us
understand, deep inside, how the actions we take now speak to the
future.
Last week, in my State of the Union address, I talked of
stewardship: because I believe it's something we owe our
children and grandchildren. Because the earth we stand upon is
only borrowed, never owned.
3
So the United States remains committed to aggressive and
thoughtful action on environmental issues. In our domestic
programs. Our work to forge international agreements. Our
assistance to developing and East Bloc nations. And here, by
leading chairing the Response Strategies Working Group.
I just proposed a budget to our Congress for fiscal 1991,
with $2 billion in new spending to protect the environment.
Funding for the U.S. Global Change Research Program will increase
by nearly 60 percent, to over $1 billion.
That will allow NASA to move forward with its "Mission to
Planet Earth," together with our international partners. And we
will initiate the U.S. Earth Observing System, in cooperation
with Europe and Japan, to advance the state of knowledge about
the planet we share.
We've already taken many steps in our country that bring
major benefits in their own right. Steps that make sense on
their own merits, and that will also help reduce emissions of
carbon dioxide and other gases now building up in the atmosphere.
Let me outline them very briefly:
We want to increase the efficiency of our energy use, and
thus reduce total emissions. So we're pursuing new technology
development. We're creating a revised Clean Air Act with
incentives for industry to find creative, market-driven
solutions. We've launched a major reforestation initiative to
plant a billion trees a year on private land across America. And
we're working out a comprehensive review and revision of our
4
National Energy Strategy, with initiatives to increase energy
efficiency and the use of renewable sources.
These initiatives, already underway, will cost our
Department of Energy $336 million over the next six years, but
will produce energy savings through the year 2000 of over $32
billion -- while achieving significant pollution reduction.
Quite a return on investment.
We're also working through diplomatic channels with our
colleagues in other countries, and through innovative measures
like debt-for-nature swaps, to do more than simply reduce global
deforestation. We hope to reverse it -- not unilaterally, but by
working with our international neighbors.
The economics of our response strategies to climate change
are getting intensive study in America. We are developing real
data on the costs of various response strategies, assessing new
measures, and encouraging other nations to follow suit. And we
look forward to sharing technical support with our international
colleagues.
As we work to create policy on CFC's, CO2 and other
emissions, we want to encourage the most innovative responses.
Wherever possible, we believe that market mechanisms should be
applied -- and that policy must be consistent with economic
growth and free market principles in all countries. Dialogue can
help us reach effective and acceptable solutions.
That is why, in my meeting with President Gorbachev, I
proposed that the United States offer a venue for the first
5
negotiating session for a framework convention, once the I.P.C.C.
completes its work.
Much remains to be done. Many questions remain to be
answered. We all know that human activities are changing the
atmosphere in unexpected and unprecedented ways. But we are not
yet prepared -- academically, or otherwise -- to draw
conclusions.
Those who question the likelihood of climate change if the
are at one end of the spectrum.
world continues on its current path represent one distinct
minority. Those who see it as an imminent and irreversible
are at the other.
threat to mankind represent another. And many scientists are
uncomfortable claiming [with absolute certainty that global
climate change can now be detected -- or predicted In some
quarters, politics or emotion may be outstripping science and driving policy.
So the United States continues to work to improve our
understanding of climate change -- to seek hard data and new ways
to improve the science. Because what science now knows with
confidence, policy And makers can't use. And what policy makers need
to make decisions, science doesn't yet conclusively know.
We feel it is crucial to bridge that gap. So this spring,
the United States will host a White House Seminar conference on Science and
&
Economic Research on the Environment -- convening top officials
from a representative group of nations, to bring together the
three essential disciplines: science, economics, and ecology.
They will share their knowledge, assumptions, and state-of-the-
art research models, to outline the gaps in our understanding and
the things policy makers need to make sound decisions.
6
chart a course toward a common understanding. I look forward to
participating in this seminar, and to learning from its
deliberations.
While some suggest we should make significant policy now, on
the chance that real climate change becomes certain, others point
to the opposite edge of that sword: that any meaningful
preemptive policies would bring only the certainty of prohibitive
expense; conflict with Third World development; and declining
standards of living, worldwide.
I believe we can do better. We must seek a reasoned middle
ground, that matches policy to emerging scientific knowledge --
and reconciles environmental protection to economic development.
And as Secretary Baker observed a year ago, whatever global
solutions to climate change are considered, they should be as
specific and as cost-effective as they can possibly be.
If we hope to promote environmental protection and economic
growth around the world, it will be important to work with, not
against industry. That will mean moving beyond the tradition of
command, control, and compliance -- toward a new kind of
environmental cooperation -- and toward an emphasis on pollution
prevention, rather than mere mitigation and litigation.
Many industries, in fact, are already providing crucial
research and solutions. And a few are already ahead of us.
One corporation, for example, started an in-house program
called Pollution Prevention Pays, that has saved the company well
over half a billion dollars since 1975 -- and prevented 112,000
7
tons of air pollutants, 15,000 tons of water pollutants, and
almost 400,000 tons of sludge and solid waste from being released
into the environment. And they've done it by rewarding employees
for coming up with the ideas.
Where developing nations are concerned, some suggest we'll
have to abandon the laissez-faire, free-market principles that
allowed the industrial world to prosper. In fact, we think it's
all the more crucial, in the developing countries, to harness the
free enterprise system in the service of the environment.
To the extent we can accelerate the advancement of these
nations, it will take less energy for them to produce wealth: in
modern industrial countries, energy use per unit of G.N.P. has
declined over time -- steadily, and dramatically.
So we look forward to working with the developing nations:
Applying the power of the marketplace, considering technology
transfer, and encouraging industry to work with them. That will
allow developing nations to grow more quickly and easily -- and
may help them avoid making the environmental mistakes we older
nations have made.
I believe we should make use of what we know. We know that
the future of the earth cannot be compromised. We bear a sacred
trust in our tenancy here -- and a covenant with those most
precious to us: our children, and theirs. We also know of the
efficiency of economic incentive -- and that free markets yield
the most creative solutions. We must now apply the wisdom of the
market, in defense of the environment we share.
8
[
You know, I recently heard from a national champion bass
fisherman in America, that just downstream on the Potomac river
here in Washington -- right across from Mount Vernon -- the bass.
fishing is as good as it is anywhere in the country. I take that
as reason for optimism. Not too long ago, that river was
considered a serious environmental problem. Now the story it
tells, is that we are capable, not merely of halting damage done,
but reversing it. ]
Working together, with good faith and earnest dialogue, I ---
believe we can reconcile economic growth with environmental
protection. Let me commend you on your outstanding work -- and
wish you all deliberate speed in your efforts to address a very
difficult, but very important, human concern.
Thank you -- and God bless you.
# # #
P.04
TAB A
3
FRI@11:30
DPC Waking Group
Proposal for Presidential Speech
before the
Intergovernmental Panel on Climate Control (IPCC)
1.
General statement of commitment to and concern for the
global environment and economic development.
where compraised natherside
Reiterate determination that the President will take
active role in addressing concern about global climate
is
mettective
Avery
pm
change.
econpol
Reiterate Secretary Baker S approach (spelled out in
January 1989).
--
Reiterate Noordwijk commitment to greenhouse gas
stabilization as soon as possible, consistent with the
requirement for global economic growth that can enhance
the quality of life for people everywhere.
--
Stress strong U.S. commitment to environment; e.g.,
domestic programs, leadership in forging international
agreements on environment, assistance to and
cooperative efforts with developing countries and
current or former centrally planned economies.
2.
U.S. Supports the IPCC Process
--
Stress need for international cooperation.
:
Congratulations to IPCC sponsors, the United Nations
Environment Program (UNEP), the World Meteorological
Organization (WMO) and to Dr. Bolin of Sweden, IPCC
Chairman.
--
Establishment of the IPCC has filled the need for an
orderly, intergovernmental process to assess scientific
understanding, evaluate potential impacts and develop
Welcome appropriate IPCC response reports due options. in August. to day charge
U.S. is committed to playing a leadership role through
our chairmanship of the Response Strategies Working
Group (RWSG) and supporting IPCC as best forum for
global climate change policy development.
--
Support for UK proposal at UN to continue IPCC.
0
01/23/90 10:06
4
3.
Past and Ongoing U.S. Contributions and Views on Key Issues
of Convention and EmissionsqLimiting Agreements
i
Science
o
U.S. budget is the largest in the world and is
rising, nearly $500 million in FY 1990 and to
increase to almost $1 billion in FY 1991.
Importance of all countries, no matter what their
level of development or economic system,
contributing to understanding of the science.
This cooperation needs to take several forms:
-
cooperation in assessment of state of the
science; and
-
cooperation in monitoring and analysis of
climate change.
Periodic international reassessment of the science
at fixed intervals to aid in our decision making.
Technology Development
o
U.S. has active technology development programs to
improve the efficiency of both supply and demand
side technologies, and reduce greenhouse gas
emissions.
-
More efficient fossil fuel generation
technologies.
1
Renewable and energy efficiency technology
initiative.
-
Conservation technology: end-use efficiency
-
Nuclear: new generation with enhanced safety
features under development.
O
Any framework convention should provide for
regular assessments of the state of technology
development to determine the availability and
doss
of technologies.
2
01/23/90 10:06
P.06
3RPWORLD 3RP WORLD
COMMERCE? 5
1
--
U.S. is sensitive to the need for technology transfer
to other countries.
Clean coal, renewable, conservation, end-use
services for technology transfer, and nuclear.
A.I.D. appropriation bill.
wall
100 GRASS- ROOTS?
EPA/Peace Corps agreement.
Change in World Bank policy.
EURO'S DON'T LIKE.
EPA's IETTAB and DOE's CORECT program to examine
technology transfer. NOT MUCH MAS HAPPENED.
Policy aid package.
Economics
Follow-up on Administration commitment to develop
Bosking
real data on costs of various response strategies
and assess new response measures.
Challenge others to do the same.
Offer technical support to those who need it.
Policy - 40 REGLETS Do MARS
sour of unkty
President should encourage consideration of truly
innovative responses including:
leap
frog
3 world
-
esp
comprehensive approach:
all major greenhouse
gases are included; and
cf. a Justice paper
trading of emission permits. fappropriate
President should define general criteria for
future agreements to limit greenhouse gas
emissions:
market mechanisms such as "integrated
resource" planning and consistency with
economic growth in all countries; and
3
01/23/90 10:07
DB
P.07
6
need to work with industry to ensure that
response actions do not adversely affect
economic growth around the world.
U.S. Clean Air Act Legislation or
Encourages emissions trading.
O
Use of efficiency energy supplies; e.g., new clean
coal technology and conservation technologies.
National Energy Strategy
Comprehensive blueprint for addressing future
energy needs with consideration to climate change
and other environmental issues.
As first step, take those steps which contribute
to other goals, but also reduce greenhouse gas
emissions; e.g., clean coal technology, DOE
conservation programs.
My
Energy efficiency programs: lighting, appliance
efficiency standards, model building codes, industrial
process improvement, encouraging utilities to provide
the service of electricity demand reduction,
transportation research and development, etc.
Alternative energy sources are being developed.
Renewables: hydro, solar, biomass, geothermal.
Nuclear: new reactor design.
Reforestation: Trees for U.S. cf. budyt
Phase-out available. of CFCs by 2000 providing safe substitutes
are
o
U.S. contribution to: development of safe
substitutes, assessments of needs by other
countries.
4.
Reiterate Malta Offer to Host Convention Negotiations when
IPCC is Ready
:
Express commitment to finding global solutions.
@ Malta Supmit, provide I propored to Prosident Corbacter that
U.S. is prepared to lost "a contence next all to
fraty on global climate charge, afterth working grapa of IPCC submit
New tiral report.
possible elements ofa a framersh conventininth Itcc.
Ar substantive exclange on
01/23/90 10:07
DI
P.08
7
Demonstrate U.S. williagness to facilitate the process.
To further the debate, U.S. will host international
environmental meeting composed of senior science,
Happen
adidas
economics and environmental officials from all nations.
on
5
01/23/90 10:08
P.09
8
TAB B
1
Issue: How to carry forward and expand in the IPCC the cost and
economic impact analysis of measures to limit greenhouse gas
emissions?
Discussion: The IPCC's Response Strategies Working Group (RSWG)
must conclude its work in the next couple of months for its
report to be written on schedule. Consequently much of the cost
and economic analysis that is beginning to emerge will not be
included in the report. Without an ongoing analytical effort,
the international discussion of emission targets and timetables
will be dominated by the countries who are prepared to make
substantial political commitments without much information on how
they will fulfill those commitments.
To move the debate over commitments to limit greenhouse gas
emissions away from bold rhetoric to a realistic assessment of
what is possible over different timeframes, the IPCC's work on
cost and economic impact analysis must be continued and expanded.
Furthermore, because targets and timetables, especially for co₂
are likely to be a major focus of attention at the fourth IPCC
plenary next August and at the Second World Climate Conference
(SWCC) next October-November, a means must be found for an
ongoing effort over the next 5-7 months.
There are three major options for proceeding. The first is
to request individual countries such as the U.S., Japan and the
FRG to conduct studies and continue to provide results to the
IPCC even after the conclusion of the RSWG's report. A second is
to instruct the RSWG's Energy and Industry Subgroup (EIS) led by
Japan to continue its analyses beyond the Spring and prepare a
supplemental report. The third is for the U.S. to offer to lead,
under the auspices of the RSWG and perhaps in collaboration with
EIS, a special effort and produce a supplemental report in time
for the fourth IPCC plenary. The latter option might entail a
significant commitment of resources but may be most likely to
result in substantive output. The latter option also offers the
possibility of bringing a number of developing countries more
fully into the process, because of a cooperative project already
underway in ten developing countries.
Position: The U.S. should promote an ongoing effort to analyze
the costs and economic impacts of a variety of targets and
timetables for limiting greenhouse gas emissions. This should
include the production of a supplemental report for consideration
by the fourth IPCC plenary. The U.S. should favor a leadership
role for EIS but be prepared to offer to lead the effort if
discussions at the February IPCC meeting suggest it would be
necessary to ensure meaningful output.
01/23/90 10:03
a
P.01
United States Department of State
Washington, D.C. 20520
POLICY PLANNING STAFF
FACSIMILE COVER SHEET
Date Sent: 1/23/90
Number of Pages:
10
(Excluding Cover Sheet)
Time Sent: 9:35am
S/P FAX #: 202-647-0753
Verification #: 202-647-1965
TO:
NAME
AGENCY
PHONE #
FAX. #
CarolyN Cawley
WH
456-7750
456-6218
FROM: Chris Dawson
PHONE #: 647-3638
SUBJECT: President's Speech Before IPCC
COMMENTS:
01/23/90 10:84
"
P.02
United States Department of State
Policy Planning Staff
Carolyn,
EPA has included all the comments I
gave them. I know Secretary Baker believes
it is particularly important to reiterate
explicitly the points he made in his
January, 1989, speech (I've attached a
copy for your use).
J. look forward to working with you
on this.
Chais Dawson
647 - 3638
01/23/90 19:95
P.03
Poorevelt
Frisaid d outhine gray.
Tues 2PM
Ar. Maynord
to good the speach
395-3719
Barkin
(FAX)
roml
Daily
President
Reland
Grody
D. Watkins D. wark.
ergy
Jo Spely Environmental Protection Agency
SUBJECT: Presidential Speech to the IPCC
The meeting of the Intergovernmental Panel on Climate Change during the first
week of February offers the President an important opportunity to reaffirm his
leadership on international environmental issues. Attached is the outline of a speech
that he might give (Tab A).
We believe that it is a positive statement of: (1) his concern for the
environment in general and about global warming in particular, (2) his commitment to
lead international efforts in these areas, (3) the significant U.S. efforts to fulfill this
commitment and (4) U.S. support for the IPCC as the proper forum for addressing the
climate change issue. We also believe that the statement is fully consistent with
existing Administration policy.
Also attached is an issue paper outlining options for carrying forward and
expanding in the IPCC the cost and economic impact analysis of measures to limit
greenhouse gas emissions (TAB B). Although not linked to the speech, the issue needs
to be carefully considered. Such work must be continued in the IPCC or the
international debate will continue to be based more on bold rhetoric than solid
information.
We have shared this outline with the State Department and believe it is, in
essence, supported by them. We would like to explore these ideas with you and our
colleagues in the rest of the Administration. To this end, we would appreciate your
circulating these documents in preparation for a discussion which you might lead. We
would welcome your advice on how to move the inter-agency review process forward
expeditiously given that the date of the speech is fast approaching.
Attachments
cc: Frederick M. Bernthal, Assistant Secretary,
Oceans & International Environmental & Scientific Affairs Bureau,
Department of State
01/23/90 10:05
&
P.04
TAB A
3
FRI@11:30
DPC Working Group
Proposal for Presidential Speech
before the
Intergovernmental Panel on Climate Control (IPCC)
1.
General statement of commitment to and concern for the
global environment and economic development.
A BALANCE
where nathr side
Reiterate determination that the President will take
Meffective is forg use
compromised
active role in addressing concern about global climate
change.
atl econpol
Reiterate Secretary Baker's approach (spelled out
in
January 1989).
--
Reiterate Noordwijk commitment to greenhouse gas
stabilization as soon as possible, consistent with the
requirement for global economic growth that can enhance
the quality of life for people everywhere.
--
Stress strong U.S. commitment to environment; e.g.,
domestic programs, leadership in forging international
agreements on environment, assistance to and
cooperative efforts with developing countries and
current or former centrally planned economies.
2.
U.S. Supports the IPCC Process
--
Stress need for international cooperation.
:
Congratulations to IPCC sponsors, the United Nations
Environment Program (UNEP), the World Meteorological
Organization (WMO) and to Dr. Bolin of Sweden, IPCC
Chairman.
Establishment of the IPCC has filled the need for an
orderly, intergovernmental process to assess scientific
understanding, evaluate potential impacts and develop
appropriate response options. to day potential Chinte change
Welcome IPCC reports due in August.
U.S. is committed to playing a leadership role through
our chairmanship of the Response Strategies Working
Group (RWSG) and supporting IPCC as best forum for
global climate change policy development.
--
Support for UK proposal at UN to continue IPCC.
0
01/23/90 10:06
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4
3.
Past and Ongoing U.S. Contributions and Views on Key Issues
of Convention and Emissions-Limiting Agreements
-- Science
o
U.S. budget is the largest in the world and is
rising, nearly $500 million in FY 1990 and to
increase to almost $1 billion in FY 1991.
Importance of all countries, no matter what their
level of development or economic system,
contributing to understanding of the science.
This cooperation needs to take several forms:
-
cooperation in assessment of state of the
science; and
-
cooperation in monitoring and analysis of
climate change.
Periodic international reassessment of the science
at fixed intervals to aid in our decision making.
Technology Development
o
U.S. has active technology development programs to
improve the efficiency of both supply and demand
side technologies, and reduce greenhouse gas
emissions.
-
More efficient fossil fuel generation
technologies.
1
Renewable and energy efficiency technology
initiative.
-
Conservation technology: end-use efficiency
-
Nuclear: new generation with enhanced safety
features under development.
o
Any framework convention should provide for
regular assessments of the state of technology
development to determine the availability and
COST
of technologies.
2
01/23/90 10:06
&
P.06
3APWORLD 3RP WORLD
COMMERCE? 5
U.S. is sensitive to the need for technology transfer
to other countries.
Clean coal, renewable, conservation, end-use
services for technology transfer, and nuclear.
o
A.I.D. appropriation bill.
walt
too GRASS-ROODS?
EPA/Peace Corps agreement.
Change in World Bank policy.
X DON'T LIKE.
EPA's IETTAB and DOE's CORECT program to examine
technology transfer. NOT MUCH MAS HAPPENED.
Policy aid package.
Economics
Follow-up on Administration commitment to develop
real data on costs of various response strategies
and assess new response measures.
Challenge others to do the same.
Offer technical support to those who need it.
Policy No REGRETS to WMICH MAKES SFONSE
President should encourage consideration of truly
innovative responses including:
power leap frog
world
-
esp
comprehensive approach: all major greenhouse
gases are included; and
cf. a Justice paper
trading of emission permits fappropriate
President should define general criteria for
future agreements to limit greenhouse gas
emissions:
market mechanisms such as "integrated
resource" planning and consistency with
economic growth in all countries; and
3
01/23/90 10:07
3
P.07
6
need to work with industry to ensure that
response actions do not adversely affect
economic growth around the world.
U.S. Clean Air Act Legislation our
Encourages emissions trading.
O
Use of efficiency energy supplies; e.g., new clean
coal technology and conservation technologies.
National Energy Strategy
Comprehensive blueprint for addressing future
energy needs with consideration to climate change
and other environmental issues.
As first step, take those steps which contribute
to other goals, but also reduce greenhouse gas
emissions; e.g., clean coal technology, DOE
conservation programs.
my
Energy efficiency programs: lighting, appliance
efficiency standards, model building codes, industrial
process improvement, encouraging utilities to provide
the service of electricity demand reduction,
transportation research and development, etc.
Alternative energy sources are being developed.
o
Renewables: hydro, solar, biomass, geothermal.
Nuclear: new reactor design.
Reforestation: Trees for U.S. cf.'91 budyet
Phase-out of CFCs by 2000 providing safe substitutes
are available.
o
U.S. contribution to: development of safe
substitutes, assessments of needs by other
countries.
4.
Reiterate Malta Offer to Host Convention Negotiations when
IPCC is Ready
--
Express commitment to finding global solutions.
@ malta Summit, I propored 4 to President forbacter that
U.S. is prepared provide a contenence nextfall to negobated frauewsh
fraty on global climate change, ofter the asking grapa of IPCC submit
New tiral report.
possible elements ofa framewab compenting In the 1Arr
substantive exchange on
01/23/90 10:07
DI
P.08
7
Demonstrate U.S. williagness to facilitate the process.
--
To further the debate, U.S. will host international
environmental meeting composed of senior science,
Happens
economics and environmental officials from all nations.
on
5
01/23/90 10:08
2
P.09
8
TAB B
Issue: How to carry forward and expand in the IPCC the cost and
economic impact analysis of measures to limit greenhouse gas
emissions?
Discussion: The IPCC's Response Strategies Working Group (RSWG)
must conclude its work in the next couple of months for its
report to be written on schedule. Consequently much of the cost
and aconomic analysis that is beginning to emerge will not be
included in the report. Without an ongoing analytical effort,
the international discussion of emission targets and timetables
will be dominated by the countries who are prepared to make
substantial political commitments without much information on how
they will fulfill those commitments.
To move the debate over commitments to limit greenhouse gas
emissions away from bold rhetoric to a realistic assessment of
what is possible over different timeframes, the IPCC's work on
cost and economic impact analysis must be continued and expanded.
Furthermore, because targets and timetables, especially for co₂
are likely to be a major focus of attention at the fourth IPCC
plenary next August and at the Second World Climate Conference
(SWCC) next October-November, a means must be found for an
ongoing effort over the next 5-7 months.
There are three major options for proceeding. The first is
to request individual countries such as the U.S., Japan and the
FRG to conduct studies and continue to provide results to the
IPCC even after the conclusion of the RSWG's report. A second is
to instruct the RSWG's Energy and Industry Subgroup (EIS) led by
Japan to continue its analyses beyond the Spring and prepare a
supplemental report. The third is for the U.S. to offer to lead,
under the auspices of the RSWG and perhaps in collaboration with
EIS, a special effort and produce a supplemental report in time
for the fourth IPCC plenary. The latter option might entail a
significant commitment of resources but may be most likely to
result in substantive output. The latter option also offers the
possibility of bringing a number of developing countries more
fully into the process, because of a cooperative project already
underway in ten developing countries.
Position: The U.S. should promote an ongoing effort to analyze
the costs and economic impacts of a variety of targets and
timetables for limiting greenhouse gas emissions. This should
include the production of a supplemental report for consideration
by the fourth IPCC plenary. The U.S. should favor a leadership
role for EIS but be prepared to offer to lead the effort if
discussions at the February IPCC meeting suggest it would be
necessary to ensure meaningful output.
01/23/90 10:03
R
P.01
United States Department of State
Washington, D.C. 20520
POLICY PLANNING STAFF
FACSIMILE COVER SHEET
Date Sent: 1/23/90
Number of Pages:
10
(Excluding Cover Sheet)
Time Sent: 9:35am
S/P FAX #: 202-647-0753
Verification #: 202-647-1965
TO:
NAME
AGENCY
PHONE #
FAX.#
Carolyn Cawley
WH
456-7750
456-6218
FROM: Chris Dawson
PHONE #: 647-3638
SUBJECT: President's Speech Before IPCC
COMMENTS:
01/23/90 10:04
E
P.02
United States Department of State
Policy Planning Staff
Carolyn,
EPA has included all the comments I
gave them. I know Secretary Baker believes
it is particularly important to reiterate
explicitly the points he made in his
January, 1989, speech (I've attached a
copy for your use).
J. look forward to working with you
on this.
Chais Dawson
647 + 3638
CLOSE HOLD
THE WHITE HOUSE
WASHINGTON
January 29, 1990
MEMORANDUM FOR THE GLOBAL CHANGE WORKING GROUP
FROM:
D. ALLAN BROMLEY
Chairman
Duan
SUBJECT:
Meeting of the Global Change Working Group
There will be a meeting of the Global Change Working Group on
Tuesday, January 30, 1990 from 2:00 to 3:00 p.m. in the Roosevelt
Room for principals only. Please call Dean Schultheiss at 456-
6722 if you are able to attend.
The issues to be discussed include (1) the guidelines for the
U.S. delegation to the plenary meeting of the IPCC, (2) the
President's speech to the IPCC and suggestions for the text of
his remarks, and (3) the dates for the White House Conference on
Science and Economics Research on the Environment.
Enclosed is a copy of the guidelines to the U.S. IPCC delegation.
The guidelines were prepared by an interagency working group
headed by OES at the State Department and reflect consensus
working level recommendations for U.S. policy. Two points
warrant specific consideration as you review the document:
(1) The first is the structure of negotiations of a climate
convention (see "Preparations for Negotiation of a Climate
Convention" on pages 8-11). The U.S. position has consistently
been that any climate convention, and the negotiation process
leading thereto, would follow the model used in dealing with the
stratospheric ozone problem -- a broad framework convention
calling for research and the exchange of data (the Vienna
Convention), followed by targeted protocols (such as the Montreal
Protocol on CFCs). Alternatives to this approach are (a) the
negotiation of a comprehensive framework convention that itself
contains specific provisions spelling out emissions reductions or
(b) the negotiation of a general framework convention accompanied
by concurrent negotiation of specific protocols.
(2) The second is the future of the IPCC (see "Future of IPCC"
on pages 13 and 14) and whether it should be the forum for
climate convention negotiations or whether those negotiations
will be conducted in another forum (e.g., the U.N. General
Assembly.
Please review the guidelines carefully and be prepared to make
any specific comments at Tuesday's meeting, as it is essential
that the Working Group act at that time. Also please be advised
that both documents are close hold. Please refrain from making
additional copies.
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Guidelines for U.S. Delegation to IPCC Plenary
Background:
The Third Plenary Meeting of the Intergovernmental Panel on
Climate Change (IPCC) will take place in Washington from
February 5-7, 1990. While the meeting will focus on the status
of efforts to complete the IPCC's First Assessment Report
(Annotated Provisional Agenda Item 3), a number of additional
issues will also form the basis for plenary discussions. These
include:
O
Possible additional tasks that should be
undertaken by the IPCC based on recent
international meetings (e.g., Noordwijk)
(Annotated Provisional Agenda Item 2.1)
Resolution (s) of the 44th (1989) session of the
United Nations General Assembly related to IPCC
activities (Annotated Provisional Agenda Item 2.2)
Preparations for the Second World Climate
Conference (Annotated Provisional Agenda Item 2.3)
o
Preparations for Negotiation of a Framework
Climate Convention (Note: This item has been
deleted from the Annotated Provisional Agenda,
but we understand that Dr. Bolin will raise it in
his opening remarks at the IPCC Plenary and at
the RSWG Officers' Meeting on February 2)
o
Report of the IPCC Special Committee on the
Participation of the Developing Countries
(Annotated Provisional Agenda Item 4)
o
The IPCC's 1990 Budget, specifically the
shortfall between anticipated expenses and
funding pledged to date (Annotated Provisional
Agenda Item 5)
o
IPCC activities after completion of the IPCC
First Assessment Report (Annotated Provisional
Agenda Item 6)
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In addition, the President or another high-level
Administration official may address the opening plenary session
and restate the President's proposal to Chairman Gorbachev at
the Malta Summit (that the United States is prepared to host "a
conference next fall to negotiate a framework treaty on global
climate change, after the working groups of the UN-sponsored
Intergovernmental Panel on Climate Change submit their final
report.
The following provides guidance to the U.S. delegation on
each of the items identified.
Additional IPCC Tasks
The United States successfully steered the Noordwijk
Ministerial Conference on Atmospheric Pollution and Climate
Change (November 6-7, 1989) to the IPCC as the appropriate
forum for international consideration of issues related to
global climate change. In so doing, the Noordwijk Declaration
mentions a number of issues for further consideration by the
IPCC. These "remands" to the IPCC are likely first to be
discussed at the RSWG officers' meeting on February 2 that will
precede the plenary. At that meeting and in the plenary
itself, the United States should:
1) Agree that the IPCC should examine estimates of
reductions in global anthropogenic greenhouse gas
(GHG) emissions, based on the best scientific
knowledge as to the options for containing
climate change within tolerable limits (see
Noordwikj Declaration, para. 8) ; the United
States should propose that such examination take
place first by Working Groups I and II (in view
of the references to "best scientific knowledge"
on the one hand and "tolerable limits" on the
other) and subsequently by the RSWG (all
subgroups, i.e., EIS, AFOS, CZMS and RUMS) ;
2) Agree that the IPCC should consider the necessity
and efficiency of the introduction of the concept
of CO2 equivalence (see Noordwijk Declaration,
para. 10) and stress that this is a high-priority
task; stress also that CO2 equivalence must be
based on full equivalence, i.e., on the entire
life-cycle of each gas; and propose that this
task be taken up by Working Group I;
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3)
Agree that the IPCC should investigate the
feasibility of achieving targets to limit or
reduce CO2 emissions including for example a 20
percent reduction of CO2 emission levels by the
year 2005 (see Noordwijk Declaration, para. 16)
but propose that CO2 emissions be taken to mean
"net" CO2 emissions and that this investigation
be extended to the feasibility of achieving such
targets with respect to all GHGs; propose that
"feasibility" be taken to include "technological
New torteds
and socio-economic feasibility and the trade-offs
involved among these;" could agree that the IPCC
investigate the feasibility of stabilizing net
GHG emissions in various timeframes, including
the year 2000; could also agree that the IPCC
investigate several options for short, medium and
long-term targets for limiting or controlling GHG
emissions and the trade-offs involved among such
targets; should propose that these investigations
be undertaken by the RSWG, specifically by the
EIS and the AFOS, in consultation with the CZMS
and the RUMS;
sizuale
4)
Agree that the IPCC should consider the
feasibility of achieving a world net forest
growth of 12 million hectares a year in the
beginning of the next century as a provisional
aim (see Noordwijk Declaration, para. 21) ; should
propose that such consideration be undertaken by
the RSWG, specifically by the AFOS and the RUMS;
5)
Request that the RSWG develop a workplan for
analysis of target options resulting from further
investigation of quantitative emission targets to
limit or reduce CO2 emissions (and, as will be
proposed by the United States, emissions of all
GHGs); the workplan should indicate what analysis
can be included in the IPCC's First Assessment
Report due in 1990 (see Noordwijk Declaration,
para. 15), what analysis can be presented to the
Second World Climate Conference in November 1990
(see Noordwijk Declaration, para. 18), and what
analysis can be presented after the Second World
Climate Conference.
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Resolution(s) of the 44th UNGA Session
Among the resolutions adopted by the U.N. General Assembly
at its 44th Session, the resolution concerning "Protection of
the Global Climate for Present and Future Generations of
Mankind" (adopted December 17, 1989) will be directly relevant
to IPCC Plenary discussion. In addition, the resolution
concerning "International Cooperation in the Field of the
Environment" will also be relevant to this discussion. While
both resolutions express support for the IPCC, both also
contain a specific recommendation that the U.N. General
Assembly should take a decision early in its 45th session
"recommending ways and means and modalities for further
pursuing these negotiations (negotiations on a framework
convention on climate), taking into account the work of the
preparatory committee for the conference on environment and
development to be held in 1992
The
U.S.
UNEP
Mission
in
Nairobi has indicated (see Nairobi 01051, 11 JAN 90) that "This
is clearly intended to assert General Assembly (and G-77)
control over the process after the IPCC presents its report in
October.
In addition, the resolution (also adopted at the 44th
Session) concerning the 1992 Conference on Environment and
Development will also be relevant. In that resolution, the
General Assembly, inter alia:
O Decides to convene a United Nations Conference on
Environment and Development of two weeks' duration to
coincide with World Environment Day, 5 June 1992;
o accepts Brazil's offer to host the Conference;
O affirms that protection of the atmosphere by
combating climate change, depletion of the ozone layer
and transboundary air polution is among the
environmental issues of major concern in maintainiing
the quality of the Earth's environment and especially
in achieving environmentally sound and sustainable
development in all countries;
o decides to establish a Preparatory Committee of the
General Assembly open to all States Members of the
United Nations or members of the specialized agencies;
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-5-
O
decides that the Preparatory Committee shall hold
an organizational session of two weeks' duration in
March 1990 and a final session, both at United Nations
Headquarters, in New York, and three additional
substantive sessions, the first in Nairobi and the
following two in Geneva, the timing and duration of
which shall be determined by the Preparatory Committee
at its organizational session;
o decides that the Preparatory Committee shall: (a)
draft the provisional agenda of the Conference; b)
adopt guidelines to enable States to take a harmonized
approach in their preparations and reporting; c)
prepare draft decisions for the Conference and submit
them the the Conference for consideration and adoption.
While the United States joined in the consensus with
respect to the resolution concerning "Protection of Global
Climate for Present and Future Generations of Mankind,' U.S.
Special Adviser to the 44th Session of the U.N. General
Assembly Edward Marks made a statement following its adoption,
which reads in pertinent part:
"We support the proposal in operative paragraph
10 that negotiations on a framework convention on
climate begin as soon as possible after adoption of
the interim report of the Intergovernmental Panel on
Climate Change. In order to ensure that these
negotiations be conducted in a focused, efficient
manner. We believe that they should take place
independently from the important work to be done by
the Preparatory Committee for the 1992 Conference on
Environment and Development."
As noted by the U.S. UNEP Mission in Nairobi, these
resolutions demonstrate that an effort is underway to shift
control over the process of negotiating a framework climate
convention to the U.N. General Assembly.
Consequently, in IPCC plenary discussions of the U.N.
resolutions adopted at its 44th Session, the United States
should:
1) Reiterate the view expressed by U.S. Special
Adviser Marks that "We believe that negotiations
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-6-
toward a framework convention on climate should take
place independently from the important work to be done
by the Preparatory Committee for the 1992 Conference
on Environment and Development;"
2) Alternatively, propose that work currently taking
place within the IPCC and preparations being
undertaken by UNEP Executive Director Tolba and WMO
Secretary General Obasi in accordance with UNEP
Governing Council Resolution 15/36 and WMO EC-XLI
Resolution 4 (requesting them to "begin preparations
for negotiations" for a framework climate convention
should constitute the arm of the Preparatory Committee
responsible for initiating and conducting negotiations
toward a framework convention on climate (see also
item 3 on page 10 of these Guidelines).
Preparations for Second World Climate Conference
Under this item, the Annotated Provisional Agenda notes
that, "The Chairman of the International Organizing Committee
and/or the Co-ordinator for SWCC will be invited to inform the
Panel of the preparations for, and the activities planned
during, the Conference." (Note: The Second World Climate
Conference will take place from October 29 to November 9, 1990,
in Geneva.)
WMO EC-XLI Resolution 4 and U.N. Resolution 43/53 provide
that the IPCC's First Assessment Report should be provided "to
the governing bodies of WMO and UNEP, through the Secretary-
General and the Executive Director, not later than September
1990, be ready for its first presentation at the Second World
Climate Conference in November 1990" and that the "Secretary-
General and the Organizing Committee for the Second World
Climate Conference, in consultation with the Chairman of the
IPCC, (should) ensure that this conference provides the first
international forum for discussion of the September 1990 report
of the IPCC." The U.N. Secretary-General is requested "to
report to the General Assembly at its 44th session on the
implementation of the present resolution" (43/53).
Assuming that the IPCC's Fourth Plenary in Sweden in August
1990 adopts the IPCC's First Assessment Report by the close of
the session, the final version of the First Assessment Report
should be ready and printed by the end of September. The
Report can be given to the WMO Secretary-General and the UNEP
Executive Director by the Chairman of the IPCC at the end of
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-7-
September 1990. The WMO Secretary-General and the UNEP
Executive Director can then present it to the WMO President,
acting on behalf of the WMO Executive Council, and the Chairman
of the UNEP Governing Council for the UNEP Governing Council.
The WMO President and the Chairman of the Governing Council can
distribute the First Assessment Report to Members of WMO and
UNEP about two to four weeks before the Second World Climate
Conference begins.
The IPCC's First Assessment Report does not have to be
presented by the U.N. Secretary-General to the General
Assembly. The U.N. Secretary-General can report that the First
Assessement Report has been distributed to WMO and UNEP
Members, but he may wish to submit the report of the results of
the Second World Climate Conference to the General Assembly.
There has been some discussion internationally concerning
the procedures that will be followed in submitting the IPCC's
First Assessment Report to the Second World Climate
Conference. Since the IPCC's First Assessment Report has been
requested by the WMO Executive Council and the UNEP Governing
Council, it should go to these bodies through the
Secretary-General of WMO and the Executive Director of UNEP.
These governing bodies do not meet, however, during the period
between finalization of the First Assessment Report and the
Second World Climate Conference. Therefore, the WMO President
and the Chairman of the UNEP Governing Council should act on
behalf of their governing bodies to receive it and distribute
it before the Second World Climate Conference.
In some international discussions, there have been
suggestions that the IPCC's First Assessment Report should be
made confidential or embargoed against release until the Second
World Climate Conference. Both ideas are impractical since the
final drafts as well as the text agreed at the IPCC's Fourth
Plenary will have had wide prior distribution. In addition,
media interest in the recommendations or conclusions of the
First Assessment Report will be intense, and any effort to
withhold distribution will be very difficult.
However, in keeping with the spirit of WMO EC-XLI
Resolution 4, the IPCC could agree to have no press conferences
or lengthy interviews or intervening meetings with respect to
the First Assessment Report before the Second World Climate
Conference.
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-8-
It is highly desirable that the IPCC's First Assessment
Report be circulated to all U.N. Members for review and
internal discussion prior to the Second World ClimateConference
so that scientists and ministers can discuss it knowledgeably
at the Conference.
At the IPCC Plenary the United State should:
1) Support presentation of the First Assessment
Report by the IPCC Chairman to the WMO
Secretary-General and the UNEP Executive Director as
soon as possible following the Fourth IPCC Plenary in
August 1990;
2) Support presentation of the First Assessment
Report by the WMO Secretary-General and the UNEP
Executive Secretary to the WMO President, acting on
behalf of the WMO Executive Council, and the Chairman
of the UNEP Governing Council, acting on behalf of the
Governing Council, respectively, for distribution to
WMO and UNEP Members as soon as possible thereafter
and prior to the Second World Climate Conference;
3) If proposed at the IPCC Plenary, discourage press
conferences, lengthy interviews or intervening
meetings after submission of the First Assessment
Report and prior to the Second World Climate
Conference; but
4) Oppose any effort to embargo the IPCC's First
Assessment Report or classify it between its
submission and the Second World Climate Conference.
Preparations for Negotiation of a Climate Convention
On November 17, 1989, UNEP Executive Director Tolba and WMO
Secretary General Obasi sent a letter to foreign ministers
outlining their own thoughts on possible elements of a future
convention on climate change and asking for national views on
this issue by January 15. The U.S. response indicated that
substantive exchanges on possible elements of a framework
convention should take place in the IPCC and noted that the
RSWG has already begun an extensive review of this issue and is
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-9-
seeking to develop an international consensus on possible
elements of a convention. The U.S. response further indicated
that U.S. views on this question were delivered to the RSWG
last October and that additional comments were provided in
December 1989.
The U.S. response to the Tolba/Obasi letter also welcomed
the input that will be provided to the RSWG from the UNEP/WMO
Task Group by the RSWG observers Mr. Beetham (of the U.K.) and
Mr. Cordeiro (of Brazil).
At the IPCC plenary, the United States should:
1) Support the effort of IPCC Chairman Dr. Bolin to
have representatives of WMO and UNEP inform the IPCC
of the activities to date of the UNEP/WMO Task Group,
and of their plans for further activity;
2) Encourage that the work of this Task Group be
provided to the RSWG as soon as possible so that the
RSWG, specifically the Topic Coordinators on Legal
Measures, may take it into account in finalizing their
report.
It is our understanding that the Legal Measures Topic
Coordinators (the U.K., Canada and Malta) are preparing another
attempt at a consensus elements paper, drawing on the October
RSWG meeting. They are planning to get comments on the paper
from key countries before the upcoming IPCC Plenary. Given the
lack of consensus with respect to legal measures at the RSWG
October Workshop in Geneva, the United States has informally
encouraged efforts on the part of the Topic Coordinators to
move forward on this issue.
At the RSWG Officers' Meeting, and in the IPCC Plenary, the
United States should:
1) Support the efforts of the RSWG Legal Measures
Topic Coordinators to refine further the Legal
Measures Paper, making sure that the recent U.S.
comments are included;
2) Oppose any effort to take final action on any of
the RSWG October Papers at the IPCC Plenary,
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especially any paper dealing with the issue of a
framework convention, urging instead that final action
be taken at the June RSWG meeting;
3) Seek IPCC agreement to recommend that negotiations
on a framework convention take place under UNEP/WMO
auspices, the first session to be held as soon as
possible after submission of the IPCC's First
Assessment Report;
4) Remain within the bounds of the U.S. legal
measures paper prepared for the Geneva Workshop,
including the U.S. position that it is currently
premature to consider the subject of possible
protocols and other agreed response measures, the
order in which they might be taken up, and whether
there will be linkage between various agreed measures.
In this latter connection, questions may arise with respect
to the additional U.S. comments submitted to the IPCC
Secretariat and the Topic Coordinators of the RSWG October
Legal Measures Paper. In the comments, the United States
proposed to add additional ticks in section 3 (General
Obligations). Specifically, the United States proposed to add
the following:
Development as soon as possible of a protocol method for
addressing all adequately scientifically understood
greenhouse gases, their sources and sinks (with
appropriate treatment of substances subject to control
under the Montreal Protocol), in a comprehensive
approach to controlling net emissions of greenhouse
gases through national performance targets, leaving to
each country the choice of domestic policy responses
to achieve its net greenhouse gas emissions target;
keep under continuing review the set of greenhouse
gases, their sources and sinks, and revise the set,
according to evolving understanding of the science,
economics, and technological advancement. (This
approach is further elaborated in Appendix _.)"
Should the question arise in the RSWG Officers' Meeting or
in the IPCC Plenary as to whether, in light of the additional
U.S. comments, the United States is now prepared to consider
possible protocols, the United States should:
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1) Make clear that the call for development as soon
as possible of a protocol in the U.S. additional
comments must be read in the context of the Legal
fromeuk coned.
Measures Paper that grew out of the RSWG October
Workshop;
2) Indicate that, by including its proposed
additional language as an additional tick in the
interest'm
General Obligations Section of the Legal Measures
Paper, the United States sought to preserve the
comprehensive approach to GHGs as an option for
further consideration by the RSWG and the IPCC; and
3) Reiterate that the United States continues to
believe that it is currently premature to consider the
subject of possible protocols and other agreed
response measures, the order in which they might be
taken up, and whether there will be linkage between
various agreed measures.
LDC Participation
At the IPCC Plenary, the Chairman of the Special Committee
on the Participation of Developing Countries, Mr. Ripert (of
France), will be asked to present the report of the Committee
for consideration by the Panel.
The United States should:
1) Support the broadest possible participation of
developing countries in the work of the IPCC, so as to
make the IPCC truly representative of the world
community of nations and thereby strengthen its First
Assessment Report;
2) Reaffirm U.S. commitment to the two-track (phase)
approach developed in Geneva and endorsed at Noordwijk
on financial measures, i.e., a first stage involving
assessing needs in the developing countries and the
availability and potential of existing assistance
mechanisms on an industry-by-industry basis, followed
by consideration of a new funding mechanism as a
second stage, if warranted;
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-12-
3) Reaffirm U.S. belief that, before a new mechanism
is created, existing institutions and mechanisms,
reoriented if necessary to take account of climate
change, should be utilized as fully as possible, and
that use of existing institutions would make resources
available more rapidly with better integration with
ongoing development programs in each country;
4) Note that, if significant action is required to
prevent or slow potential climate change, developed
countries alone will not be able to accomplish it;
5) Emphasize the need for global action to deal with
potential climate change, particularly in view of
projections of likely increases in GHG emissions on
the part of developing countries in the near future;
and
6) Note, that the United States is committed under
the Montreal Protocol to providing technical
assistance, and indicate that, if significant action
is ultimately required to deal with the potential for
climate change, the United States will likewise
undertake to provide appropriate assistance.
IPCC's 1990 Budget
The IPCC Secretariat projects 1990 expenses totaling SFR
1,363,000 (approximately $909,880 converting SFR to U.S.
dollars at a rate of 1.4980 SFR to the dollar -- New York Times
January 16, 1990, conversion rate). The IPCC Secretariat
further projects receipts in 1990 to total SFR 864,000
(approximately $576,769). Of the receipts anticipated, SFR
538,000 (approximately $359,146) constitute pledges from
members, including $150,000 from the United States.
(FYI: The United States has not yet transferred its
pledged amount, but should be able to do so later this spring,
both from the $100,000 that the Department of State has sought
to collect from U.S. agencies to support the IPCC Trust Fund
and from additional amounts contained in the International
Organizations and Programs (IO and P) portion of the Foreign
Assistance Appropriation. End FYI.)
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-13-
The IPCC Secretariat thus anticipates a shortfall of SFR
499,000 (approximately $333,111) in 1990.
Under Revised Provisional Agenda Item 6, the Secretary of
the IPCC will summarize the expenditures for 1989 and present
the budget request for 1990 for the consideration of the
Panel. To date, it would appear that only the United States
and the following countries have made pledges to the IPCC for
1990: Japan, Italy, Finland, FRG and France.
In the plenary discussion under this item, the United
States should:
1) Await indications from other members of the IPCC
who may be willing to pledge amounts to help meet the
1990 budget;
2) If appropriate, point to the rather significant
pledge made by the United States for 1990;
3) Make no further U.S. commitment to help meet the
IPCC's 1990 budget at the plenary, although it is
possible that, the United States may ultimately exceed
its pledge if (for information of U.S. delegation
only): (1) all U.S. agencies who have been asked to
contribute to the IPCC Trust Fund by the Department of
State ultimately do so; (2) the Department of State's
authorization and appropriation for FY 1990 ultimately
include the amount requested for the IPCC; and (3) the
United States receives credit toward its pledge from
providing interpretation for the IPCC plenary and
subsequent meeting of the IPCC Bureau.
Future of IPCC
Under this agenda item (Annotated Provisional Agenda item
6), it is noted that "The delegations may wish to take the
opportunity to express their views on the role and possible
activities of the Panel after it completes its first assessment
report.
In the IPCC Plenary discussion the United States should:
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-14-
1) Support continuation of the work of the IPCC after
submission of its First Assessment Report in the fall
of 1990;
2) Provide, by way of example, a number of specific
tasks that should be taken up or continued by the
IPCC's Working Groups; and
3) Support efforts within the IPCC to develop a
specific list of tasks and schedules (workplan) that
the IPCC views as necessary to undertake or continue
after October 1990.
Finally, with regard to the specific mandate of the IPCC
after submission of the First Assessment Report, the United
States should:
1) Note that, eventually, we anticipate that the IPCC
will become the Conference of the Parties; and
2) Urge that the governing bodies of UNEP and WMO be
asked to adopt resolutions at their meetings this
summer specifying the IPCC's mandate after submission
of its First Assessment Report.
IPCC Endorsement of President's Proposal
If appropriate in the view of the U.S. delegation, it may
be useful to seek endorsement by the IPCC of the President's
proposal to host "a conference next fall to negotiate a
framework treaty on global climate change, after the working
groups of the UN-sponsored Intergovernmental Panel on Climate
Change submit their final report."
Informal reactions solicited to date from foreign
governments indicate, however, that there may be some confusion
with respect to the President's offer. Specifically, some
countries have expressed confusion at whether the United States
plans to host its own conference or simply provide a venue for
the first international negotiating session. They have also
indicated that it is not clear whether New York, and thus the
UNGA, falls within the scope of the proposal.
In addition, at least one country (the FRG) has informally
urged that the United States not seek IPCC endorsement for the
President's proposal at the forthcoming plenary, since to do so
would risk "politicizing" the IPCC.
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-15-
At the plenary, the U.S. delegation should make clear in
informal discussions with other delegations that:
1) The President has proposed simply to provide a
venue (and thus support) for the first international
negotiating session; and
2) That while the President's proposal did not
specifically mention a site, we understand that it
contemplated a location in the United States other
than New York, and definitely not the UNGA.
If the President or another high-level Administration
official should make opening remarks on behalf of the United
States at the plenary which reiterate the President's proposal
at the Malta Summit, the U.S. delegation may choose to:
Seek IPCC endorsement of the President's proposal,
which endorsement should be communicated by the IPCC
Chairman to the UNEP and the WMO.
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DRAFT
DRAFT
COVER to PAMPHLET FOR INFORMAL SEMINAR 2/3/90
DRAFT COVER LETTER
February 2, 1990
Dear Participant:
Tomorrow morning, Saturday, February 3, 1990, an
"Informal Seminar" will be held to discuss approaches that might
be taken to address potential global climate change. In
:
particular, the Seminar will focus on the two approaches recently
suggested by the United States for consideration by the
IPCC/RSWG:
- a "comprehensive" approach in which all greenhouse
gases, their sources and sinks would be treated
together, leaving to each nation the choice of its
internal policies to achieve its net emissions target
through a mix of policies covering the various gases,
sources and sinks; and
- an "emissions trading" approach in which the total
amount of pollution emitted would be limited or reduced
(just as in traditional regulation), in which emitters
are required to hold allowances for their pollution,
and in which allowances may be transferred among
emitters.
Each of these approaches deserves serious consideration. Each
holds the promise of important advantages in any effort to
address potential global climate change. Each also raises
scientific, technological, economic and environmental questions
which must be explored. We hope that discussion at tomorrow's
Informal Seminar and in meetings to come will advance the
understanding and analysis of these approaches. Although
consideration of specific protocols implementing any such
approaches would be premature before the negotiation of a
framework convention, informed discussion of relevant concepts
DRAFT
2
and ideas can improve our shared understanding and can help
ensure that any eventual negotiations toward an international
agreement incorporate the best thinking on the subject.
Tomorrow's Informal Seminar will be chaired by
, and will beg : with short presentations by
and
Audience
discussion will follow. Attached please find:
- Agenda for the Informal Seminar, February 3, 1990
- Introductory Discussion Paper, with References Suggested
for Further Reading
In addition, photocopies of papers on related topics will be
available to you at the Informal Seminar.
These materials are provided to suggest fruitful areas
of discussion; they do not necessarily represent the official
views of the United States nor of the participants in the
Informal Seminar. Our hope is that through these materials, and
more importantly, through our conversations at the Seminar, we
will be more informed about possible approaches to possible
international agreement on global climate change issues, and more
understanding of each others' experiences and views on these
subjects.
DRAFT
AGENDA for INFORMAL SEMINAR, 2/3/90
DRAFT AGENDA for INFORMAL SEMINAR
February 3, 1990
U.S. Department of State, Room XXXX
10:00 a.m. - 12:00 noon
SCHEDULE
10:00 a.m.
Coffee
10:10 a.m.
Welcome
State Dept.
10:20 a.m.
Brief Presentations
Moderator: State Dept.
Remarks:
(one or two speakers; some combination of
representatives from:)
Office of the White House Counsel
CEA
EPA
DOJ
11:00 a.m.
Break
11:10 a.m.
Audience Discussion
Moderator: State Dept.
(Additional U.S. Agencies interested in
participating)
(Other nations)
(NGOs?)
(Congress?)
12:00 noon
Conclusion
DRAFT
DRAFT
PAMPHLET for INFORMAL SEMINAR, 2/3/90
INTRODUCTORY DISCUSSION PAPER:
"COMPREHENSIVE" AND "EMISSIONS TRADING" APPROACHES
TO GLOBAL CLIMATE CHANGE
SUMMARY
In its submission of a "Concept Paper" to the IPCC/RSWG
on December 29, 1989, the United States proposed consideration of
two approaches to any international agreement on potential global
climate change: 1 a "comprehensive" approach and an "emissions
trading" approach. This paper briefly surveys each approach.
Under a comprehensive, performance-based approach, all
greenhouses gases, sources and sinks would be addressed together.
Each international legal instrument produced -- whether
convention or protocol -- would deal, to the maximum extent
:
possible, with the entire array of gases, their sources and
sinks. This approach employs the concept of a parameter, such as
an "index," to enable comparison of the contributions of
different gases, their sources and sinks, to total global climate
change. It also employs the concept of "net emissions" to
fashion performance targets that would not be limited to any one
gas or source or sink, but would permit attainment of the target
through policies aimed at reducing sources or expanding sinks or
both. Such net emissions performance targets would be set, at
least initially, for each nation, 2 and would leave to each nation
the choice of internal policies desired to attain the target.
Thus, employing the parameter or "index," each nation could
devise a set of policies that would focus on one or more gases of
its choice and thereby reduce its "net emissions," through
restriction of sources or expansion of sinks or both, to meet the
target. Such an approach would provide maximum flexibility for
developing diverse, innovative, cost-effective measures.
¹The term "potential global climate change" is used in this
paper to refer to possible changes in global and regional climate
that may result from increased concentrations of substances in
the atmosphere that alter the atmosphere's thermal radiation
budget.
²In appropriate circumstances, targets might be set for
groups of nations, such as regional affiliations.
DRAFT
2
The "emissions trading" approach is conceptually
separate from, but compatible with, the "comprehensive" approach.
Emissions trading, which is one form of transferable allowances,
is simply a tool to implement regulations on pollution or other
uses of scarce resources. In a traditional regulatory scheme,
the government sets the proper total amount of emissions (and its
growth or decline over time), and then requires every emitter to
meet the same standard, or to apply the same control technology.
In emissions trading, the government sets the same total limits
on emissions, but then permits emitters to allocate among
themselves who will emit how much. This allocation is
accomplished through issuing allowances to emitters, which they
may trade among each other. The total amount of allowances is
set equal to the total amount of emissions the government has
chosen. The government supervises trades to ensure accurate
reporting, and may take steps to facilitate trades as well. An
emissions trading system can be designed to meet diverse
circumstances: for example, allowances could be tradeable at
specified ratios, or auctioned, or depositable in a bank for
future withdrawal, or other variations.
The United States has used emissions trading to
implement a variety of environmental protection programs, and has
developed practical experience in the design and functioning of
trading systems. This experience indicates that emissions
trading is a pragmatic tool for protecting the environment at
substantially lower costs to society than traditional regulatory
approaches. An emissions trading approach could be highly
advantageous to nations seeking to regulate their greenhouse gas
emissions: limits on such emissions will be economically and
socially costly, and choosing cost-effective methods that both
achieve environmental goals and encourage diversity and
innovation will be of great importance. Emissions trading
programs could be used domestically by nations under the
"comprehensive" approach just described, or under a system in
which only one greenhouse gas is regulated; and, if desired, a
trading system could be adapted for use among nations.
3
3 The RSWG Economic and Market Measures Paper has discussed
allowing international trades (on a bilateral, regional or
multilateral basis, and possibly conducted by governmental or
private sector actors) as a method for attaining national net
emissions targets, in order to achieve further environmental and
economic benefits from the use of the trading principle.
DRAFT
3
DISCUSSION
A.
"Comprehensive" Approach.
1. Description.
A comprehensive performance-based approach stands in
contrast to a piecemeal pollutant-by-pollutant approach, such as
those that focus on adopting targets for one greenhouse gas,
carbon dioxide (C02), alone. 4 The comprehensive approach would
treat all greenhouse gases collectively: each nation would be
obligated to meet a target for its total combined contribution to
greenhouse gas emissions. The total contribution would be the
sum of the emissions of each greenhouse gas, weighted by the
incremental contribution each different gas makes to total
climate change. The weights assigned to the various gases would
be measured by a parameter, such as an "index," expressing the
comparative contribution of each gas (and, in turn, useful for
estimating the comparative role played by any given source or
sink) 6 Further, the "comprehensive" approach would set a target
for each nation's "net emissions" of greenhouse gases, allowing.
4
For example, the November 1989 Noordwijk Declaration
appeared to urge pollutant-by-pollutant control rules, starting
with CO2. On the other hand, it did suggest (in paragraph 10)
possible development of a method for comparing the effects of
other gases to the effects of CO2, similar to the parameter for
comparing gases discussed here.
⁵The term "greenhouse gases" is used in this paper to refer
to substances that, when present in the atmosphere, act to trap
thermal radiation.
6 For example, analysts have discussed a "global warming
potential index,' and the Noordwijk Declaration referred to "the
concept of CO2 equivalence" in paragraph 10. Such a parameter is
a system for computing the contribution to total atmospheric
warming of any alteration in the emissions of any particular
greenhouse gas. It assigns a value to each greenhouse gas
describing the contribution of each additional molecule of that
gas to the total warming of the atmosphere. The value depends on
variables such as the molecular composition of the gas and its
attendant capacity for radiative forcing, the lifetime of such
molecules in the atmosphere, the existing atmospheric
concentration of the gas and related gases at the time the
additional molecule reaches the atmosphere, and the discount rate
at which future warming is compared to present warming.
DRAFT
4
compliance to be achieved by reductions in sources⁷ of greenhouse
gases, or expansion of sinks, 8 or both. The targets would be
"performance-based," in the sense that they would obligate
nations to achieve certain net emissions levels by whatever
means, rather than "design standards" that obligate parties to
adopt specified technological applications or undertake specified
response activities. The targets could, for example, consist of
a cap or a phased-in cap, possibly followed by subsequent
reductions.
2. United States Experience: the Environmental Advantages
of a Comprehensive Approach
In the United States we have followed a medium-by-
medium and pollutant-by-pollutant approach for the last several
decades. Our environmental laws, such as the Clean Air Act, the
Clean Water Act, the hazardous waste statutes, were each written
to address one kind of pollution. Often, these statutes required
separate regulations for each different type of source of that
kind of pollution: thus, for example, there are separate
regulatory programs for air pollutants from large utility plants,
from smaller industrial plants, and from mobile sources.
Breaking pollution control down into these piecemeal categories
may initially seem logical, but we have learned through
frustrating experience that it has a serious drawback: pollution
or other undesirable residual effects of economic activity
regulated in one category may simply shift to another,
unregulated or less regulated, category. Shifts from one
environmental medium -- air, water, land -- to another have
thwarted attempts to reduce pollution, and these "cross-media"
shifts have played a part in the evolution of new (though still
piecemeal) laws aimed at the new manifestations of pollution.
For example, stringent regulations on water pollution have
induced industry to convert liquid pollutants into sludge, in
turn creating toxic waste disposal problems. Statutes regulating
solid waste pollution were not enacted until several years after
the initial air and water laws were put in place. 9
7 "Sources" of greenhouse gases include anthropogenic,
biogenic and other sources of greenhouse gases emitted into the
atmosphere.
⁸"Sinks" of greenhouse gases include anthropogenic, biogenic
and other activities, processes, and phenomena that remove
greenhouse gases from the atmosphere. Examples of sinks are
forests and oceanic plankton.
⁹other examples include [ EPA please suggest items ].-
DRAFT
5
Moreover, restrictions on emissions from one kind of
source of a pollutant can result in compliance strategies that,
while adhering to the law, fail to reduce environmental
degradation, and may even make it worse. For example, laws
regulating smokestack air pollution were written to require that
the ambient air quality in the locality of the smokestack not
fall below certain levels. One industry response to this
approach was to build taller smokestacks, so that the pollutant
plumes were fed into higher wind currents and were dispersed more
rapidly from the local area. Pollutants continued to degrade the
environment farther downwind. Later, the laws were amended to
try to prevent such circumvention.
Recognizing the inherent and recurring problems in the
piecemeal approach, the U.S. Environmental Protection Agency is
now devising a more integrated strategy to address the "cross-
media" and "cross-source" difficulties of our system of
environmental control. Preliminary versions of a unified
environmental statute have been drafted. Dealing with all
environmental impacts in a comprehensive fashion will, we hope,
lead to better reduction in deleterious pollution while avoiding
environmentally troublesome and economically wasteful compliance
strategies that merely shift pollution around.
This experience is particularly apt for the problems of
potential global climate change. Such change is thought to be
the result of numerous pollutants: several different greenhouse
gases, such as carbon dioxide (C02), methane (CH4), nitrous oxide
(N20), chlorofluorocarbons (CFCs) and tropospheric ozone (03) ;
gases like carbon monoxide (CO) that chemically generate
greenhouse gases in the atmosphere; and other substances (e.g.
soot and aerosol pollutants like sulfur dioxide (S02) ) that may
alter the atmospheric thermal budget in other ways. In turn,
each of these gases is produced by a variety of sources on the
earth's surface. Imposing narrow controls on one greenhouse gas
alone, or on one source of such gases, is likely to be
ineffective and possibly even counterproductive. Limits on CO2
alone, for example, could encourage industry to shift to
production and combustion processes, alternative fuel sources,
and other activities that emit other greenhouse gases, possibly
including CO and CH4. Narrow limits on one source of CO2, such
as coal combustion in utility power plants, could encourage
development of alternative combustion methods (e.g., coal
gasification). The end results of these kinds of shifts might
even be greater contributions to total greenhouse gas emissions
per unit of economic output or per capita. A comprehensive
approach to all greenhouse gases, their sources and sinks would
DRAFT
6
limit total impacts on global climate change, while avoiding
undesirable cross-pollutant and cross-source shifts. 10
3. Additional Considerations in Applying the
"Comprehensive" Approach
There are several additional advantages to applying the
"comprehensive" approach to an international agreement on
potential global climate change.
First, the comprehensive approach would allow each
nation to use that combination of source and sink controls and
other measures that is best adapted to its economic and other
circumstances, achieving greenhouse environmental protection at
significantly lower cost than a pollutant-by-pollutant strategy.
This approach maximizes the opportunity for and encourages the
adoption of diverse, flexible, innovative, and cost-effective
solutions to global climate change. For example, an approach
that mandated specific percentage reductions in each gas -- such
as a 20% reduction in CO2 and a 30% reduction in methane -- would
be more costly than an approach that required a reduction in each
nation's contribution to total warming (as measured by the gas-:
comparison parameter) and permitted each nation to adopt its
least-cost mix of choices achieving the target overall. Some
nations might be able to reduce CO2 emissions much more than 20%
through substitution of non-fossil fuels, but be unable to reduce
methane output (e.g., a nation importing oil and dependent on
rice crops, but endowed with untapped solar power opportunities)
Those nations would meet their net targets by reducing CO2 more
rapidly than methane; reducing each the same amount would prove
much more costly (perhaps in terms of higher taxes, or reduced
10 Although a "comprehensive" approach to greenhouse gases
would avoid shifts within the realm of greenhouse factors, it
still might be said to be focused on the "single medium" of
atmospheric temperature change. The problem of the environmental
"second-best" could then persist even in our "comprehensive"
approach: the adoption of a comprehensive greenhouse gas
agreement might lead to previously undiscovered non-greenhouse
environmental impacts. An extreme analog is the history of
chlorofluorocarbons (CFCs) : enthusiastically introduced to
replace chemicals that were highly toxic to humans, CFCs later
proved to have serious effects on the stratospheric ozone layer.
Nevertheless, a "comprehensive" approach to greenhouse
gases, sources and sinks is a vast improvement over pollutant-by-
pollutant or source-by-source control of greenhouse factors.
Meanwhile, the IPCC or other appropriate body could be directed
to monitor possible non-greenhouse environmental impacts of any
agreement and to report to the international community at regular
intervals.
DRAFT
7
rice production) and would leave available CO2 reductions
unexploited. Other nations might find themselves in the opposite
situation, able to reduce methane more than CO2 (e.g., a nation
dependent on coal reserves but able to reduce its ruminant animal
husbandry) 11 The economic and social costs of policy responses
to global climate change are likely to be great. It is thus
particularly important in this context to use institutional
strategies that will maximize the incentives and opportunities
for development of new technologies and other innovative
responses that will reduce these costs. A comprehensive approach
employing performance-based standards will contribute
substantially to achieving this goal.
Second, this approach reserves to each nation the
freedom to employ whatever institutional mechanisms it wishes to
use to achieve its target objective. This flexibility takes
account of the widely varying legal and cultural systems present
in different nations, and avoids the obstacles to international
agreement among sovereign states that would be raised by
dictating to each nation how it must institutionally manage its
climate-related policies and industries. A free market economy
would not be required to employ strict command and control
regulations; by the same token, a centrally planned economy would
not be required to employ market measures.
Third, a comprehensive approach would be more
equitable. An approach that set targets first for one gas, or
for certain sources or sinks, and progressed to others only later
would unfairly put the onus of compliance disproportionately upon
those nations whose economies are comparatively more burdened by
the initial measure. For example, an approach that first
mandated 20% reductions in CO2 emissions would place much greater
burdens on those heavily committed to using fossil fuels, and on
those whose economies depend on exports of fossil fuels;
alternatively, an approach that first mandated 20% reductions in
methane emissions would place much greater burdens on those
heavily dependent on rice crops and ruminant animal husbandry.
A comprehensive approach gives nations a more equal obligation to
shoulder the costs of compliance. The comprehensive approach is
consequently likely to avoid some of the obstacles to
international agreement that would be faced by a pollutant-by-
pollutant approach. The latter approach could engender
¹¹A similar analysis applies to approaches mandating
specific changes in sources alone or sinks alone, rather than
combining them in a "net emissions" requirement that leaves the
domestic policy mix to each nation.
DRAFT
8
opposition from nations who feared that the initial burden would
fall on them; the comprehensive approach would ease such fears. 12
There are, however, important caveats to a comprehen-
sive approach that should be reviewed. First, the calculation of
proper gas-comparison parameter or "index" values will require
effort. Scientific study of this calculation has made progress,
but more needs to be done before consensus values are obtained.
As mentioned above, the parameter values depend on a variety of
complex and sometimes interrelated variables. 13 So far, efforts
to define a parameter have reached somewhat different results.
In addition, if the parameter values are to be useful in
assessing the comparative contributions of different sources and
sinks, there remains the practical problem of assigning values
sensitive enough to yield efficient environmental policy. 14
12 Moreover, a comprehensive approach reduces the ability of
nations to manipulate the design of international regulatory
measures to their own competitive or other economic advantage. A
pollutant-by-pollutant command and control approach is vulnerable
to attempts by nations to "game" the standard-setting agenda in
their favor. For example, a nation reliant on non-fossil fuel
energy sources, and whose chief rival earns its income from
fossil fuel exports, could press for reductions in CO2 emissions
not for their environmental value but to improve its competitive
standing relative to its rival. Or a wheat-growing nation could
press for methane emission reductions at the expense of its rice-
growing neighbor. Such attempts would hinder international
agreement on reductions of any particular pollutant. Such
attempts to "game" the design of international regulatory
controls are also likely to distort trade and reduce global
welfare, as well as impede environmental improvement. By leaving
the mix of compliance policies to each nation's discretion so
long as the overall target is achieved, the comprehensive
approach greatly reduces the potential for such gaming.
13 For example, the atmospheric lifetimes of some important
gases are not yet completely understood. In addition, parameter
values for each gas are usually expressed as constants, whereas
their dependence on such variables as the changing ambient
concentrations of related gases suggests that mapping a
continuous function could be helpful for policy analysis.
14 As sources and sinks are assigned performance values for
their contributions to emissions of gases and thus to total
climate change, those values must be sensitive and flexible
enough to take account of numerous variables, such as diverse and
improving combustion techniques and scrubbing methods, and the
varying regional characteristics of forests. Otherwise, the
(continued
)
DRAFT
9
Finally, the policy ramifications of assigning different
parameter values to different gases -- effectively altering the
costs to different nations of achieving their performance targets
-- mean that the parameter values obtained must be carefully
derived and highly accurate. The committee conducting this work
should be composed of the best experts, and must produce methods
and conclusions that are legitimate in the eyes of the world.
Second, pursuit of the "comprehensive" approach might
appear to some critics to delay the process of reaching
international agreement on global climate change issues. Some
may believe that the fastest approach is to adopt protocols
quickly for substances we can agree on now, and then proceed to
thornier issues as we go. on the other hand, the comprehensive
approach could in fact proceed more quickly, because (as
discussed above) it raises the probability of broad consensus by
eliminating the divisive inequitable effects of single-pollutant
protocols. In addition, the comprehensive approach may achieve
better overall environmental protection than a single-pollutant
protocol, even if it does take slightly longer to achieve than
the first single-pollutant protocol would take, because it will
prevent cross-pollutant shifts. 15
14 ( continued)
values set will entrench existing practices and discourage
investment in advances that could further reduce net greenhouse
gas emissions. For example, if "coal combustion" were assigned a
constant parameter value regardless of combustion technique,
industry would have no incentive to adopt innovative combustion
techniques that reduce the quantity of greenhouse gases emitted
per BTU (indeed, the incentive could operate in the opposite
direction). A similar analysis would apply to assigning a
parameter value to, say, "trees" generally, whereas different
types of trees, and trees in different settings, remove
greenhouse gases from the atmosphere at different rates.
The source and sink values should also be able to take
account of long-term investments in emissions-affecting policies,
such as sink development, which may have inherently long lead times.
15
Efforts might also be directed to accelerating work on the
scientific issues raised by the comprehensive approach, in order
not to waste time. A different tack would be to consider
including in a framework convention, depending on the status of
development of the first protocol, a requirement that within a
specified period after the convention enters into force the
parties will agree on the scope and timetable for the first
protocol. It may, however, be infeasible to ask parties to bind
themselves to future agreement; and specifying too early a date
might hinder efforts to achieve an intelligent resolution of
difficult issues.
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10
Third, the comprehensive approach requires a decision
on which greenhouse gases to include. (Although the same
question could be faced at several junctures in a pollutant-by-
pollutant approach, the comprehensive approach depends upon an
overall decision earlier in the process. 16, For example, it may
be difficult to decide how to treat chlorofluorocarbons (CFCs)
and other greenhouse gases already regulated under the Montreal
Protocol on Substances Depleting the Ozone Layer. Options for
addressing CFCs in a greenhouse gas agreement include:
(a) giving credit for reductions in CFCs that go beyond
the reductions required under the Montreal Protocol;
(b) giving credit for all reductions in CFCs; and
(c) not giving credit for reductions in CFCs.
Each of these options would have different effects on CFC
consumption. 17 Other options might also be suggested. A related
question is the treatment of the existing reservoir of CFCs
trapped in such containers as abandoned refrigerators. Venting
such CFCs could be counted as greenhouse gas emissions, thus
giving incentives to store or recycle such gases safely.
Fourth, the comprehensive approach will also require
decision on what treatment to give past practices, such as
investments in fossil and non-fossil fuel energy sources; energy
conservation; efforts at controlling pollutants that reduce
greenhouse gas emissions; and deforestation. This question must
be faced, of course, under a single-pollutant approach as well.
Fifth, a multi-pollutant agreement may complicate the
task of monitoring compliance, because it covers many more gases
and sinks which must be watched. This concern points to the need
to ensure scientifically credible methods of monitoring emissions
16 Limitations in data and scientific understanding may
preclude inclusion, at least at the outset, of "all" greenhouse
gases, sources and sinks, even in a comprehensive approach. An
ideal comprehensive approach would include all factors
influencing global climate change. If that is infeasible, a
comprehensive approach could begin with the set of major,
scientifically understood gases, their sources and sinks, and
proceed to add other gases as they become understood.
17
For example, option (c), no credit, would provide no
additional incentive to nations producing CFCs to achieve further
reductions. Option (a) would provide such an incentive. Option
(b) would provide such an incentive and recognize the value to
potential global climate change of reductions made in CFCs under
the Montreal Protocol.
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11
of various sources, changes in sinks, and their effects on global
climate.
18 In this respect, a comprehensive approach reinforces
the need to base response agreements on sound science and data.
(It is also possible that the effects of certain gases, sources
and sinks may not be sufficiently well understood to include them
in an initial agreement limiting net emissions. The ideal of
total comprehensiveness may thus be limited by gaps in knowledge.
As scientific knowledge advances, however, additional gases,
sources and sinks could be included in the basic agreement.)
B.
"Emissions Trading" Approach.
The second approach suggested for consideration is
"emissions trading" in greenhouse gas emissions. This paper
discusses emissions trading systems that nations could choose to
employ in their domestic implementation of environmental
protection goals, such as for curtailing greenhouse gas
emissions. The paper surveys how emissions trading works in
principle, and what experience the United States has had in
employing trading systems for environmental protection.
1. Description.
Emissions trading is one system for employing
transferable allowances to ration the use of scarce resources,
such as land, air, or water. These systems are not methods for
increasing the amount of resource exploitation permitted. They
are simply methods for implementing the same limit on total
resource use that would be imposed under a traditional regulatory
scheme. Under a traditional scheme, every resource user must
reduce its use by the same percentage or to the same uniform
level. For some users, that will be very expensive; for others,
even further reductions would be feasible, but there is no
incentive to achieve further reductions. Under a trading system,
the total target limit (or reduction) is the same, but the
resource users are able to reallocate who uses more and who uses
less -- that is, to trade allowances among the users. They will
do so according to how valuable it is to each user to continue
using the resource. Those users for whom reducing resource use
is very expensive can purchase allowances from those users for
whom reductions are less expensive. Allowance sellers then must
reduce their use of the regulated resource even further, but they
gain the sale price of their allowances. The result is that
those best able to reduce resource use do so the most. Overall,
18
For example, in many nations data on methane emissions
from diverse non-point sources, such as rice fields, landfills
and animal herds, are not well developed.
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12
the aggregate resource use target is achieved at lower total cost
than if all users were required to meet the same target
regardless of differences in their costs.
To put the point more concretely: say that the
government determines to reduce total emissions of a pollutant to
Level X, which works out to an average reduction from present
levels of 20 units per polluter. 19 Initially, the government
instructs each polluter to reduce its emissions to a target level
of 20 units less than current emissions; or, stated in other
words, each polluter is allowed to pollute up to the target
level, 20 units less than its current emissions. Allowances are
distributed to polluters which, in total, add up to Level X. No
pollution may be emitted by each polluter above its target, or,
in other words, unless it is accompanied by an allowance. So
far, this system is identical to the traditional scheme. Some
polluters will find it inexpensive to meet the 20 unit reduction,
and could even reduce further, while others will find it very
costly -- possibly ruinous. Now, we add the simple change that
polluters are permitted to trade the allowances they hold. Then
emitters would find mutual advantages to trading. For example,
one emitter of the pollutant might find it more costly to reduce
its own emissions 20 units than to reduce its own emissions only
10 units and to purchase allowances worth the remaining 10 units
(those it will still be producing above its target level) from
another emitter -- so that the second emitter must reduce its
emissions 30 units (the initial 20 units plus an additional 10
units to account for the allowances it is selling). This
decision is a good choice for the second emitter if it is able to
reduce the extra 10 units at less cost than the price the first
emitter is paying it for the accompanying allowances. The net
result is the same average 20 unit reduction sought by the
government, achieving Level X overall, but at less total cost to
society, because the sum of the price paid for the allowance
trade and the second emitter's reduction expenses is less than
the sum of expenses if each emitter had to reduce 20 units. The
"cost" society saves is resources that can be put to good use on
other activities.
The payment for the allowances could be in cash. For
example, a large emitter might meet its allowance limit by paying
a landowner to plant trees. or the payment could be in-kind;
thus, the second emitter might receive some service from the
first emitter. For example, the first emitter might be a large
farming company which could give the second emitter, a town's
public utility plant, harvested grain in return for the extra 10
units of allowances. Whatever the mode of payment, both sides
19 The analysis is similar for a certain percentage reduction
per polluter, or for a rule limiting each polluter's emissions to
a certain maximum.
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13
would gain, at no loss to society in pollution prevention.
Indeed, the gains from trade in allowances are similar to the
gains from trade when two parties voluntarily exchange other
things of value, such as when two neighbors have different jobs
(e.g., farmer and doctor) and rely on each other's services, or
when nations with different economic strengths trade different
goods with each other. It is less costly to everyone for the
parties to produce goods according to their own strengths and to
trade, than for each party to be self-sufficient in every needed
item.
Trading in emissions allowances has several advantages
over nontransferable emissions limits. As just described, it
enables society to achieve pollution reductions at lower total
cost. Given the likely high cost of reducing greenhouse gas
emissions in most societies, a trading system could be a critical
tool in implementing greenhouse gas emissions limits. In
addition, emissions trading gives incentives for energy
conservation and other forms of fuel efficiency and pollution
prevention, whereas regulations that direct firms to employ a
certain pollution control technology do not. Moreover, emissions
trading encourages innovation in technologies, processes and
social systems that reduce emissions at least cost over the long
term, whereas regulations that direct firms to employ a certain
pollution control technology do not.
There would be no requirement that every regulated
emitter "take part" in the trading system; those who saw no
economic need to engage in trades, or who were philosophically
opposed, could refrain. At the same time, other organizations
who wanted to reduce total pollution further -- such as a
philanthropic foundation or the government -- could purchase
allowances and hold them without emitting pollutants. (The
government could also announce in advance that the value of
allowances would be reduced over time, or that tiers of
allowances would expire in time, or that allowances must be
repurchased periodically.)
Implementation of such a system would require a role
for government, as discussed further below. The government could
monitor emissions, as it would under a traditional regulatory
scheme, and it could monitor the trades themselves, to ensure
accurate accounting. The government could facilitate trading, by
acting as an auctioneer or broker, and by establishing "banks" to
trade in allowances. To avoid unregulated increases in
pollution, the government would not permit pollution without
accompanying allowances. Allowances could expire and be issued
or auctioned annually, in revised total amounts that reflect the
government's desired rate of decline or growth in total
pollution. To avoid forcing new entrants to the market to
purchase their allowances directly from their competitors, the
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14
government could retain some of the allowances for issuance or
auction to new businesses.
2. U.S. Experience with "Emissions Trading" Approaches
Emissions trading is not just a concept; it is a
practical method now operating in the United States in several
different areas of environmental policy. A growing literature
has analyzed these efforts. 20 Trading has been used, for
example, to implement controls on air pollution, water pollution,
use of fuels and hazardous substances, and land development. For
the most part, these efforts have been highly successful, but we
have learned as well from the few trading systems that have not
functioned well. Experience with trading systems has been
sufficiently impressive to encourage the Administration to employ
an emissions trading approach in its ambitious proposal to reduce
acid rain; this proposal is now being debated in Congress.
Examples of U.S. experience with emissions trading and
related systems include:
(a) Emissions trading under the Clean Air Act. Under
the Clean Air Act, each region of the country must attain ambient
air quality standards. Existing, modified, and new sources of
pollution are all regulated to achieve the ambient standards and
to prevent deterioration once standards are attained. Depending
on the type of source and whether the area is "in attainment" or
not, sources must employ a range of pollution controls. The U.S.
Environmental Protection Agency (EPA) has implemented the ambient
air quality requirements and the pollution control requirements
through several different emissions trading systems. "Offsets"
allow new or modified sources to be created in nonattainment
areas so long as they obtain corresponding decreases in emissions
from existing sources in the same area. The new source must
still employ the most stringent pollution control technologies.
"Netting" allows a source modification to occur without employing
the most stringent pollution control technology if it obtains a
corresponding decrease in emissions from other parts of the same
plant. "Bubbles" allow existing plants with multiple sources to
reallocate emissions within the plant, so long as total emissions
20 See the articles cited in the "References" section at the
end of this paper. Experience with several specific trading
systems is surveyed by Dudek & Palmisano, "Emissions Trading: Why
is this Thoroughbred Hobbled?" 13 Colum. J. Envtl. L. 217 (1988) ;
and Hahn & Hester, "Marketable Permits: Lessons for Theory and
Practice, 16 Ecol. L. Q. 361 (1989). The discussion of trading
system examples in this section draws from these articles and
other sources.
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15
do not increase. In addition, a banking program lets existing
sources store extra reductions in emissions for future use.
Experience has been different under each of these
programs, but in general, there have been significant cost
savings to industry from the netting and bubble programs. There
have been numerous netting trades, yet fairly few bubble program
trades. There have been a number of offset trades, but it is
difficult to assess the cost savings obtained. No overall
environmental effects have been observed; that is consistent with
the design of the trading programs to permit reallocation of
emissions among and within plants but to maintain the same
aggregate emissions level.
Yet observers believe that these trading programs could
be more successful. First, trading is limited but some non-
transferable emissions reduction duties; for example, new sources
are not permitted to avoid employing the most stringent pollution
control technologies, even if they can find an existing source
willing to reduce its emissions commensurately. This situation
prevents trading that could reduce costs while maintaining
constant total emissions. Second, the combination of technology-
based emissions control rules and emissions trading often adds
costs. Firms that have installed control technology are in
compliance, but they must separately measure actual past and
:
present emissions if they want to trade. Trading would be
relatively less costly if the law regulated emissions directly,
not technology. Similarly, standards for ambient air quality do
not mesh well with emissions trading, because allowances traded
may subject to confiscation if the region as a whole fails to
meet its ambient quality standard. Third, the variety of trading
systems, and the variety of attendant regulatory oversight, favor
some kinds of trades (chiefly trades internal to a firm, such as
netting) over others.
Moreover, some specific trading programs have not
worked well. For example, the agency operating the Los Angeles
program has authorized additional pollution from new sources
without requiring the sources to obtain emissions allowances.
That kind of waiver or loophole effectively expands the limit on
total pollution; it is as though the overall emissions target set
by the government had been relaxed. The agency's action permits
pollution to rise and simultaneously undercuts the allowance
market (and lowers allowance prices) by making allowances
effectively unnecessary.
(b) Acid rain reduction proposal. The Administration
has proposed, and Congress is now considering, new Clean Air Act
legislation to reduce emissions of pollutants which contribute to
acid precipitation. A key feature of the Administration proposal
is a system of transferable emission allowances. The proposal
sets a permanent cap of 10 million tons per year on emissions of
sulfur dioxide (one of the main precursors of acid precipitation)
from certain fossil fuel-burning electric utilities (the primary
source of SO2 emissions in the U.S.) The proposal requires each
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16
utility to hold an allowance for each ton of SO2 it emits.
Allowances for 10 million tons of emissions per year would be
allocated among the utilities by multiplying each utility's
historic power output levels by an average SO2 emissions rate.
Under this formula, most utilities would not be allocated enough
allowances to cover their emissions at historic levels. To make
up this allowance shortfall, utilities could reduce their
emissions by installing additional pollution control equipment or
taking conservation measures, or could purchase additional
allowances. Utilities that could afford to reduce their
emissions below the average emission rate (i.e. below the number
of allowances they had been allocated) would be able to sell
those "extra" allowances to other utilities.
This system provides flexibility for each utility to choose
the compliance strategy that is most cost-effective for it. Each
utility can adopt the mix of emission reductions and allowance
sales or purchases that best minimizes its own costs. It also
creates a strong financial incentive for all utilities to
minimize their emissions; thus, it encourages energy conservation
and technological innovation, either of which would be
encouraged by a rule requiring utilities to adopt specific
pollutant control mechanisms such as scrubbers. And by
permitting trading, it ensures that the overall environmental
:
objective -- limiting utility SO2 emissions to 10 million tons
per year -- is achieved at the lowest possible cost to the
economy as a whole.
(c) Lead phasedown. Also under the Clean Air Act,
the EPA issued regulations reducing the allowable lead content of
gasoline. In 1982 EPA instituted limits on lead content and
permitted trading within and among refiners: leaded gasoline
producers and importers could transfer (i.e., buy and sell) lead
content credits freely among themselves through 1986, or could
apply such credits to their own gasoline. But such credits
expired quarterly if unused. In 1985, EPA substantially reduced
the lead content limit further; the content was required to
decline, in phases, from 1.10 grams of lead per gallon (gpg) to
no more than 0.10 gpg by the end of 1985. To provide leaded
gasoline producers and importers with some flexibility in
complying with the new limits, EPA also issued regulations in
1985 permitting producers and importers whose gasoline in 1985
contained less lead per gallon than the applicable standard, to
"bank" lead content credits (i.e., to avoid the expiration of
credits). The "banking" regulations then permitted gasoline
producers and importers to "withdraw" those lead content credits
through the end of 1987 and to apply them to help meet the new,
more stringent lead content standards that took effect in 1985.
The banking and trading system helped the industry as a
whole to comply with the new lead limits, while ensuring that the
total amount of lead content did not exceed the maximum that
otherwise would have been allowed under the lead content
standards in the absence of the banking provisions. Data
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17
indicate that banking and trading were active, and that they
resulted in substantial cost savings (on the order of hundreds of
millions of dollars).
The design of the lead phasedown system facilitated
widespread trading. Firms were not required to apply to the EPA
for permission to enter into trades; they simply reported their
trades to the government, as part of their regularly required
reports of the lead content in their gasoline. Each firm was
simply required to have a net balance of lead content credits
greater than or equal to zero in each quarter. In addition,
because gasoline refiners and importers were accustomed to
trading feedstocks and other commodities with each other, trades
in lead content credits did not require new information networks.
In sum, the lead phasedown was highly successful.
(d) CFCs reduction. In order to implement national
and international requirements that production and use of CFCs be
reduced in the 1990s, the EPA has issued regulations limiting
total U.S. CFC production and requiring a 50% reduction in
production by the end of the decade. The EPA regulations
implement these phased reductions by issuing allowances to each
producer of CFCs. These allowances may be traded among
producers. Analysts expect this system to work well. EPA is :
able to monitor emissions of CFCs, and to keep track of allowance
trades. Producers are aware of potential buyers and sellers and
can trade allowances freely. One important question is whether
EPA will issue initial allowances free of charge, or sell them at
fixed prices or at an auction. Free issuance is administratively
simpler, but selling the allowances -- especially at an auction -
- would provide a natural method for allocating the allowances to
start the program, and would give producers an incentive to
develop CFC substitutes even sooner.
(e) Pinelands development. A somewhat different kind
of allowance system has been used successfully by the State of
New Jersey to regulate development of the Pinelands, a forest
zone the State wishes to protect from excessive development.
Here the allowances are not for emissions of a pollutant, but for
rights to develop certain property. Property in parts of the
Pinelands is slated for preservation, and the owners of that
property may agree to be prohibited from developing their land.
In return, they are issued "transferable development rights"
(TDRs) which they may sell to others wishing to develop land in
the other areas of the Pinelands. Different amounts of TDRs are
issued to each owner, depending on the value to society of
preserving that owner's property. In areas in which development
is permitted, landowners must hold TDRs to develop their
property. Thus, the total amount of development in the Pinelands
is capped, and the regional distribution is partly restricted;
but the precise allocation of development on permissible
properties is left to the market for TDRs. In addition, no
current landowner is entirely deprived of the former market value
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18
of his or her land, because those who are barred from developing
their own land receive TDRs to sell to others. Because anyone
may purchase the TDRs, landowners in high-growth areas who wish
to block further development may buy TDRs to retire them. The
government has established a TDR exchange to facilitate trades:
the exchange buys TDRs from willing sellers and sells them to
interested buyers.
(f) Fox River water pollution. Under the Clean Water
Act, sources of water pollution must meet water quality
standards. The State of Wisconsin adopted a pollution discharge
limit system for the Fox River that set the limit for each
source, but also permitted sources to devise new discharge
limits, by mutual agreement, so long as the total discharge did
not rise. In principle, the system implements a market in
transferable emissions allowances. In practice, however, the
system has proved cumbersome. Sources hold five-year permits
from the state, and trades may expire at the close of a permit
cycle, impairing their use for reallocations that involve long-
term investments in capital equipment. No allowances or credits
are actually issued to sources; instead, each agreement between
sources must be submitted for approval to the state agency.
Parties must demonstrate to the state that they "need" to make :
changes in their permits. Review by the agency can be complex
and time-consuming. And there is no broker to help arrange
trades. Thus, transaction costs are high and the market is
sluggish. Agency review of proposed trades is necessitated,
moreover, by the fact that agreements between sources can yield
very low discharges of toxic substances in one local area and
very high discharges of toxics in another, placing too great an
ecological burden on the latter area. Hence the spectrum of
possible trades is limited.
(g) Dillon Reservoir water pollution. In the state of
Colorado, economic growth was adding pollutants to the Dillon
Reservoir, endangering drinking water supplies. Pollutants came
from both point sources (e.g. factory discharge pipes) and
nonpoint sources (e.g. runoff). The government issued annual
discharge allowances to all sources. It then requires that
sources may increase their discharges only if they acquire
allowances from nonpoint sources, at a ratio of 2:1. That is,
for each pound of discharges a source wishes to add, it must
reduce discharges by two pounds from nonpoint sources. Because
control of point sources is about seven times as expensive as
control of nonpoint sources, the 2:1 trading ratio leaves
dischargers considerable room for cost-saving trades. Thus,
trading will both save costs and reduce pollution. Although the
program is just getting under way, observers expect active
trading and significant cost savings.
(h) Other related programs. Transferable allowances
and related systems are also being used in other environmental
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19
protection programs. Some truck and automobile manufacturers are
being permitted to trade internally in different types of
emissions. That is, a manufacturer is instructed to achieve
total or average emissions for its fleet, but permitted
flexibility to allocate those emissions among its vehicles. A
similar program is being developed for trading between different
pollutant gases (nitrogen oxides and particulates) emitted from
truck engines. A trading program for reducing asbestos emissions
has also been discussed.
3. The Fruits of Experience.
U.S. experience with these and other trading systems
has yielded several insights. They are summarized here.
Creating a market. Trading systems work when a
resource -- such as stock in a corporation, or available land for
development, or the ability to emit a substance while keeping the
environment healthy -- is in demand, and when the supply of the
resource is finite. Thus, it is essential for a trading system
to work that there be a limit, or "cap," on the total amount of.
allowances. In an emissions trading system, this cap will be the
total amount of pollution the government wants to allow, and it
may change over time (say, as the government reduces the total
amount of allowed pollution). In addition, it is essential that
the market include participants with diverse interests in holding
the allowances -- that is, some who will want to buy and some who
will want to sell. Thus, emissions allowances should not be
distributed only to the worst polluters; they should also be
distributed to firms that historically have been "clean," and to
firms for whom pollution reduction is inexpensive as well as
firms for whom it is expensive. In the Administration acid rain
bill described above, the system will include a large number of
utility plants, with a wide spectrum of pollution reduction
costs, SO that a robust trading market develops.
Preventing evasion. At the same time, trading systems
will fail to achieve their overall environmental protection goals
if pollution is permitted in the absence of allowances, or if the
total amount of pollution is permitted to rise through the
issuance of unrestricted allowances (as in the Los Angeles
bubble). The agency supervising the trading system must maintain
the integrity of the market for allowances, monitor to prevent
cheating, and issue allowances according to the desired overall
limit on pollution.
Facilitating trades. In some systems, such as the lead
phasedown described above, trading occurs easily. In others, the
allowance holders are not sufficiently able to trade with each
other. This may occur because each holder lacks information
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20
about other holders and cannot find or communicate with them.
Government can facilitate trades by furnishing such information;
by acting as a broker, arranging buyers and sellers; by acting as
an auctioneer; or by creating a "bank" which buys and sells (or
borrows and lends) allowances. The New Jersey TDR exchange for
Pinelands development is a good example of such a bank.
Monitoring trades. Some monitoring must occur lest
participants in the market overstate their trades or the
allowances they hold. Monitoring trades could be accomplished
through reporting requirements, spot checks, or designated
periods in which trading is conducted. Other markets, such as
securities ("stock") markets, function well in the presence of
careful government monitoring. But requiring trades to be
submitted to regulators for prior approval, or requiring them to
meet special criteria, may tend to discourage effective trading.
Monitoring emissions. In addition, the government
must monitor the emissions of pollutants to be sure that emitters
do not understate their emissions. This task would be necessary
whether or not a trading approach is employed. If monitoring
emissions is infeasible, effective regulation -- whether
implemented through a trading system or not -- is difficult.
More than local significance. A trading system is most
effective when the problem it is applied to has significance
beyond local areas. That is, the resource being preserved (such
as clean air or water) should be of at least regional
significance. For example, trading works well in reducing air
pollution dispersed over a wide area from numerous source points.
The potential greenhouse effect is just such a regional issue.
One problem encountered in some trading programs is
that too many pollution allowances (and hence too much pollution)
could be concentrated in one locality, or "hot spot"; if the
pollution has direct toxic effects, this concentration could
excessively endanger the local population. This type of danger,
and attendant agency review, inhibited trading in the Fox River
program. Even if such concentrations did occur in a trading
system for greenhouse gases (and given the wide variety of gases,
sources and sinks and their wide geographic distributions, such
concentrations seem unlikely), "hot spots" are not generally a
problem for the important greenhouse gases, because those gases
may have global thermal effects but do not usually have local
toxic effects.
Moral issues. Some observers have criticized trading
systems as "immoral licenses to pollute," because trading allows
emitters to pay others for permits to allow their own emissions
to grow. A system without trading, however, involves the same
"license" to pollute within the same total target; trading only
allows emissions to be reallocated within the overall limit.
That is, nontransferable regulatory limits on pollution give
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polluters the very same "license" to pollute up to the regulated
limit; trading does not change the overall limit. Moreover, if
trading is effective at reducing pollution at less cost, then it
is unclear what moral concern is applicable to the difference
between a trading system and a non-trading system. The central
concern should be which system better achieves desirable
environmental protection at least cost. 21
Some critics have also argued that if a firm is able to
achieve additional pollution reductions beyond regulated
standards, those extra reductions should "benefit society" and
should not be sold to another firm to raise the second firm's
pollution level. First, such criticism is really directed at the
government's initial standard: if less total pollution is
desired, the standard may be tightened, but once the standard is
set, further reductions are not legally obligated. Second, such
criticism fails to note that firms only reduce pollution when
given an incentive to do so (such as threat of punishment or
promise of financial benefit). Trading, appropriately designed
and monitored, provides the incentive -- the market for extra
allowances -- to firms to reduce their emissions beyond the
standard; simply setting a standard does not. It is only in a
trading system (or a similar system of emissions charges) that
the "extra" reduction is induced among firms who find it in their
interest to do so.
4. Potential Elective Use of Trading Among Nations.
Just as trading is a useful tool for implementing
domestic environmental policies, one or more nations could elect
to participate in trading internationally, to meet global
environmental protection goals. As with domestic trading, such a
system would not be mandatory; only those wishing to participate
need do so. Such a trading system could provide the mechanism
for international financial and technological assistance to
nations who seek to grow economically, to preserve their forests,
and to avoid the use of technologies that imply greenhouse gas
emissions. An international agency and/or national governments
would monitor the trades and perhaps facilitate them. Indeed,
using trading systems to implement environmental protection is
already a feature of the world economy. "Debt-for-nature" swaps
are perhaps the best-known example. The Montreal Protocol on
Substances Depleting the Ozone Layer contains "industrial
rationalization" provisions allowing limited substance trading
among the parties. And the concept of "trading" in the global
21 It is worth noting in this regard that, in comparison with
a comprehensive approach, a single-pollutant approach is an even
larger "license" because it begins by permitting unrestricted
emissions of the as-yet-unregulated gases, which might increase
even faster as industry shifts to systems producing them.
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climate context has been discussed in the RSWG as part of the
topic discussion of "Economic (Market) Measures. "
CONCLUSION
Addressing the potential problems of global climate
change will require creative policy thinking. Attacking the
causal factors of global climate change one at a time, pollutant-
by-pollutant and source-by-source, could jeopardize sound
environmental protection, squander scarce resources, and impose
inequitable burdens and unreasonably uniform requirements on
nations with diverse needs and capabilities. A "comprehensive"
approach would avoid these problems while addressing the
potentially serious environmental goals of global climate policy.
In addition, nations may choose to implement
environmental policy through various means. Some may choose to
adopt uniform standards, or even dictate which technologies
businesses must employ. Others may choose more flexible systems,
such as transferable allowances. United States experience with:
"emissions trading" and other transferable allowance systems
suggests that they could be quite useful means of implementing
global climate change policy.
DRAFT
23
References
and
Suggestions for Further Reading
Ackerman & Stewart, "Reforming Environmental Law, 37 Stan.
L. Rev. 1333 (1985).
Ackerman & Stewart, "Reforming Environmental Law: The
Democratic Case for Market Incentives," 13 Colum. J. Envtl. L.
171 (1988).
Assarsson [ or Levander ?], "The Importance of Greenhouse
Gases other than Carbon Dioxide and Other Possible Differences
Between Various Fuels," Swedish National Energy Administration
(Heat & Electricity Production Div.) memorandum dated Sept. 14,
1989 presented to delegates of the OECD Group on Energy and
Environment, Oct. 13, 1989.
Dudek, "Marketable Instruments for Managing Global
Atmospheric Problems," paper presented to the Annual Meeting of
the Western Economics Assn., Vancouver, BC, July 7-11, 1987.
Dudek, "Offsetting New CO2 Emissions: A First Rational
Greenhouse Policy Step," paper presented at the Annual Meeting of
the Western Economics Assn., Lake Tahoe, CA, June 18-22, 1989.
Dudek & Palmisano, "Emissions Trading: Why is this
Thoroughbred Hobbled?" 13 Colum. J. Envtl. L. 217 (1988).
Grubb, "Alternative Approaches to International Agreements,"
in The Greenhouse Effect: Negotiating Targets, chapter 5 (Energy
& Envtl. Programme, Royal Institute of Int'l Affairs, London,
1989)
Hahn, "An Evaluation of Options for Reducing Hazardous
Waste," 12 Harv. Envtl. L. Rev. 201 (1988).
Hahn, "Economic Prescription for Environmental Problems: How
the Patient Followed the Doctor's Orders," 3 J. Econ. Persp. 95
(1989)
Hahn, "Marketable Permits: What's All the Fuss About?" 2 J.
Pub. Policy 395 (1982).
Hahn & Hester, "Marketable Permits: Lessons for Theory and
Practice, 16 Ecol. L. Q. 361 (1989).
DRAFT
24
Hahn & Hester, "Where Did All the Markets Go? An Analysis of
EPA's Emissions Trading Program," 6 Yale J. Regulation 109
(1989)
Hahn & Noll, "Barriers to Implementing Tradable Air
Pollution Permits: Problems of Regulatory Interactions," 1 Yale
J. Regulation 63 (1983).
Hahn & Noll, "Designing a Market for Tradeable Emissions
Permits," in Reform of Environmental Regulation (Magat ed. 1982).
Hahn & Noll, "Implementing Tradeable Emission Permits,' in
Reforming Social Regulation: Alternative Public Policy Strategies
(1982)
Heffernan & Lave, "Adjusting to Greenhouse Effects: Exploring
the Economic Costs to Rich and Poor Countries," paper presented
at the Workshop on Energy and Environmental Modeling and Policy
Analysis, MIT Center for Energy Policy Research (July-Aug. 1989).
Jorgenson & Wilcoxen, "Environmental Regulation and U.S.
Economic Growth," paper presented at the Workshop on Energy and
Environmental Modeling and Policy Analysis, MIT Center for Energy
Policy Research (July-Aug. 1989).
Kaya, "Impact of Carbon Dioxide Emission Control on GNP
Growth: Interpretation of Proposed Scenarios," paper submitted to
IPCC/RSWG, May 8, 1989.
Lashof & Ahuja, "Relative Global Warming Potentials of
Greenhouse Gas Emissions," paper submitted to Nature, as revised
Dec. 6, 1989.
Manne & Richels, "CO2 Emission Limits: An Economic Analysis
for the USA," paper presented at the Workshop on Energy and
Environmental Modeling and Policy Analysis, MIT Center for Energy
Policy Research (July-Aug. 1989).
Nordhaus, "The Economics of the Greenhouse Effect," paper
presented at the Workshop on Energy and Environmental Modeling
and Policy Analysis, MIT Center for Energy Policy Research (July-
Aug. 1989).
Roberts, "Some Problems of Implementing Marketable Pollution
Rights Schemes: The Case of the Clean Air Act," in Reform of
Environmental Regulation (Magat ed. 1982).
Stavins, "Harnessing Market Forces to Protect the
Environment," 31 Environment 5 (1989).
Stewart, "Controlling Environmental Risks Through Economic
Incentives," 13 Colum. J. Envtl. L. 153 (1988).
DRAFT
25
Stewart, "Economics, Environment, and the Limits of Legal
Control, " 9 Harv. Envtl. L. Rev. 1 (1985).
Swisher & Masters, "International Carbon Emission Offsets: A
Tradeable Currency for Climate Protection Services," TEchnical
Report No. 309, Civil Engineering Dept., Stanford Univ., Feb. 28,
1989.
Tripp & Dudek, "Institutional Guidelines for Designing
Successful Transferable Rights Programs," 6 Yale J. Regulation
369 (1989).
U.S. Environmental Protection Agency, "Emission Trading
Policy Statement, " 51 Fed. Reg. 43,814 (1986).
U.S. Environmental Protection Agency, "Protection of
Stratospheric Ozone," 53 Fed. Reg. 30,566 (1988) (to be codified
at 40 C.F.R. pt. 82) (Final Rule) (capping CFC production with
marketable permits) ; 53 Fed. Reg. 30,604 (1988) (Advance Notice
of Proposed Rulemaking) (proposing allocation of permits).
DRAFT
26
Likely candidates for handouts at seminar:
Dudek & Palmisano, Colum. J. Envtl. L.
Hahn & Hester, Ecol. L. Q.
Stavins, Environment
Stewart, Colum. J. Envtl. L.
:
FILE
INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE
GEORGETOWN UNIVERSITY
MONDAY, FEBRUARY 5, 1990
10:15 A.M.
THANK YOU, DR. BOLIN [BO-LEEN]. PROFESSOR OBASI.
DR. TOLBA. DELEGATES OF THE WORLD METEOROLOGICAL
ORGANIZATION, AND THE UNITED NATIONS ENVIRONMENT
PROGRAM. LET ME COMMEND ALL OF YOU, FOR COMING
TOGETHER TO EXAMINE AN ISSUE OF SUCH GREAT IMPORTANCE.
THE RECOMMENDATIONS THIS DISTINGUISHED ORGANIZATION
MAKES CAN HAVE A PROFOUND EFFECT ON THE WORLD'S
ENVIRONMENTAL AND ECONOMIC POLICY.
BY BEING HERE TODAY, I HOPE TO UNDERSCORE CONCERN
-- MY COUNTRY'S, AND MY OWN -- ABOUT ENVIRONMENTAL
STEWARDSHIP; AND TO REAFFIRM OUR COMMITMENT TO FINDING
RESPONSIBLE SOLUTIONS. IT IS BOTH AN HONOR AND A
PLEASURE TO BE THE FIRST AMERICAN PRESIDENT TO SPEAK TO
THIS ORGANIZATION, AS ITS WORK TAKES SHAPE.
YOU ARE CALLED UPON TO DEVELOP RECOMMENDATIONS
WHICH STRIKE A DIFFICULT YET CRITICAL INTERNATIONAL
BARGAIN: A CONVERGENCE BETWEEN GLOBAL ENVIRONMENTAL
POLICY, AND GLOBAL ECONOMIC POLICY. A BARGAIN WHERE
BOTH PERSPECTIVES BENEFIT -- AND NEITHER IS
COMPROMISED.
- 2 -
AS EXPERTS, YOU UNDERSTAND THAT ECONOMIC GROWTH
AND ENVIRONMENTAL INTEGRITY NEED NOT BE CONTRADICTORY
PRIORITIES. ONE REINFORCES AND COMPLEMENTS THE OTHER.
EACH, A PARTNER. BOTH ARE CRUCIAL.
A SOUND ENVIRONMENT IS THE BASIS FOR THE
CONTINUITY AND QUALITY OF HUMAN LIFE AND ENTERPRISE.
CLEARLY, STRONG ECONOMIES ALLOW NATIONS TO FULFILL THE
OBLIGATIONS OF ENVIRONMENTAL STEWARDSHIP. WHERE THERE
IS ECONOMIC STRENGTH, SUCH PROTECTION IS POSSIBLE. BUT
WHERE THERE IS POVERTY, THE COMPETITION FOR RESOURCES
GETS TOUGHER. STEWARDSHIP SUFFERS.
FOR ALL OF THESE REASONS, I SINCERELY BELIEVE WE
MUST DO EVERYTHING IN OUR POWER TO PROMOTE GLOBAL
COOPERATION: FOR ENVIRONMENTAL PROTECTION AND ECONOMIC
GROWTH. FOR INTELLIGENT MANAGEMENT OF OUR NATURAL
RESOURCES AND EFFICIENT USE OF OUR INDUSTRIAL CAPACITY.
AND FOR SUSTAINABLE AND ENVIRONMENTALLY SENSITIVE
DEVELOPMENT -- AROUND THE WORLD.
- 3 -
THE UNITED STATES IS STRONGLY COMMITTED TO THE
I.P.C.C. PROCESS OF INTERNATIONAL COOPERATION ON GLOBAL
CLIMATE CHANGE. WE CONSIDER IT VITAL, THAT THE
COMMUNITY OF NATIONS BE DRAWN TOGETHER -- IN AN
ORDERLY, DISCIPLINED, RATIONAL WAY -- TO REVIEW THE
HISTORY OF OUR GLOBAL ENVIRONMENT, TO ASSESS THE
POTENTIAL FOR FUTURE CLIMATE CHANGE, AND TO DEVELOP
EFFECTIVE PROGRAMS.
THE STATE OF THE SCIENCE; THE SOCIAL AND ECONOMIC
IMPACTS; AND THE APPROPRIATE STRATEGIES -- ALL ARE
CRUCIAL COMPONENTS TO A GLOBAL RESOLUTION. THE STAKES
HERE ARE VERY HIGH; THE CONSEQUENCES, VERY SIGNIFICANT.
THE UNITED STATES REMAINS COMMITTED TO AGGRESSIVE
AND THOUGHTFUL ACTION ON ENVIRONMENTAL ISSUES. LAST
WEEK, IN MY STATE OF THE UNION ADDRESS, I SPOKE OF
STEWARDSHIP: BECAUSE I BELIEVE IT'S SOMETHING WE OWE
OURSELVES, OUR CHILDREN AND THEIR CHILDREN.
- 4 -
SO WE ARE RENEWING THE ETHIC OF STEWARDSHIP IN
OUR DOMESTIC PROGRAMS. IN OUR WORK TO FORGE
INTERNATIONAL AGREEMENTS. IN OUR ASSISTANCE TO
DEVELOPING AND EAST BLOC NATIONS. AND HERE, BY
CHAIRING THE RESPONSE STRATEGIES WORKING GROUP.
I HAVE JUST SUBMITTED A BUDGET TO OUR CONGRESS FOR
FISCAL 1991. IT INCLUDES OVER $2 BILLION IN NEW
SPENDING TO PROTECT THE ENVIRONMENT. AND, UNDERSCORING
OUR COMMITMENT TO YOUR EFFORTS, I AM PLEASED TO NOTE
THAT FUNDING FOR THE U.S. GLOBAL CHANGE RESEARCH
PROGRAM WILL INCREASE BY NEARLY 60 PERCENT, TO OVER ONE
BILLION DOLLARS.
THAT COMMITMENT, BY FAR THE LARGEST EVER MADE BY
ANY NATION, REFLECTS OUR DETERMINATION TO IMPROVE OUR
UNDERSTANDING OF THE SCIENCE OF CLIMATE CHANGE.
WE ARE WORKING WITH OUR NEIGHBORS AROUND THE WORLD
TO ENHANCE GLOBAL MONITORING AND DATA MANAGEMENT,
IMPROVE ANALYSIS, REDUCE THE UNCERTAINTY OF PREDICTIVE
MODELS, AND CONDUCT REGULAR REASSESSMENTS OF THE STATE
OF THE SCIENCE.
- 5 -
OUR PROGRAM ALLOWS NASA, HER SISTER AGENCIES, AND
ALL OUR INTERNATIONAL PARTNERS, TO MOVE FORWARD WITH
THE "MISSION TO PLANET EARTH." THAT WILL INITIATE THE
U.S. EARTH OBSERVING SYSTEM, IN COOPERATION WITH EUROPE
AND JAPAN, TO ADVANCE THE STATE OF KNOWLEDGE ABOUT THE
PLANET WE SHARE.
FURTHERMORE, EVEN AS WE WAIT FOR THE BENEFITS OF
THIS RESEARCH, THE UNITED STATES HAS ALREADY TAKEN MANY
STEPS IN OUR COUNTRY THAT BRING BOTH ECONOMIC AND
ENVIRONMENTAL BENEFITS. STEPS THAT MAKE SENSE ON THEIR
OWN MERITS IN TERMS OF RESPONSIBILITY AND EFFICIENCY,
WHICH HELP REDUCE EMISSIONS OF CFC'S, CARBON DIOXIDE,
AND OTHER POLLUTANTS NOW ENTERING THE ATMOSPHERE. LET
ME OUTLINE THEM VERY BRIEFLY:
WE ARE PURSUING NEW TECHNOLOGY DEVELOPMENT THAT
WILL INCREASE THE EFFICIENCY OF OUR ENERGY USE, AND
THUS REDUCE TOTAL EMISSIONS.
WE'RE CRAFTING A REVISED CLEAN AIR ACT WITH
INCENTIVES FOR OUR PRIVATE SECTOR TO FIND CREATIVE,
MARKET-DRIVEN SOLUTIONS TO ENHANCE AIR QUALITY.
- 6 -
WE'VE LAUNCHED A MAJOR REFORESTATION INITIATIVE TO
PLANT A BILLION TREES A YEAR ON PRIVATE LAND ACROSS
AMERICA.
AND WE'RE WORKING OUT A COMPREHENSIVE REVIEW AND
REVISION OF OUR NATIONAL ENERGY STRATEGY, WITH
INITIATIVES TO INCREASE ENERGY EFFICIENCY AND THE USE
OF RENEWABLE SOURCES. THESE EFFORTS, ALREADY UNDERWAY,
ARE THE HEART OF A $336 MILLION DEPARTMENT OF ENERGY
PROGRAM, AND ARE EXPECTED TO PRODUCE ENERGY SAVINGS
THROUGH THE YEAR 2000 OF OVER $30 BILLION -- WHILE
ACHIEVING SIGNIFICANT POLLUTION REDUCTION. QUITE A
RETURN ON INVESTMENT.
WE'RE ALSO WORKING THROUGH DIPLOMATIC CHANNELS
WITH OUR COLLEAGUES IN OTHER COUNTRIES, AND THROUGH
INNOVATIVE MEASURES LIKE DEBT-FOR-NATURE SWAPS, TO DO
MORE THAN SIMPLY REDUCE GLOBAL DEFORESTATION. WE HOPE
TO REVERSE IT -- NOT UNILATERALLY, BUT BY WORKING WITH
OUR INTERNATIONAL NEIGHBORS.
- 7 -
THE ECONOMICS OF OUR RESPONSE STRATEGIES TO
CLIMATE CHANGE ARE GETTING INTENSIVE STUDY IN AMERICA.
WE ARE DEVELOPING REAL DATA ON THE COSTS OF VARIOUS
STRATEGIES, ASSESSING NEW MEASURES, AND ENCOURAGING
OTHER NATIONS TO FOLLOW SUIT. AND WE LOOK FORWARD TO
SHARING THIS KNOWLEDGE AND TECHNICAL SUPPORT WITH OUR
INTERNATIONAL COLLEAGUES.
AS WE WORK TO CREATE POLICY AND AGREEMENTS ON
ACTION, WE WANT TO ENCOURAGE THE MOST CREATIVE,
EFFECTIVE APPROACHES. WHEREVER POSSIBLE, WE BELIEVE
THAT MARKET MECHANISMS SHOULD BE APPLIED -- AND THAT
OUR POLICIES MUST BE CONSISTENT WITH ECONOMIC GROWTH
AND FREE MARKET PRINCIPLES IN ALL COUNTRIES. OUR
DEVELOPMENT EFFORTS AND OUR DIALOGUE CAN HELP US REACH
EFFECTIVE AND ACCEPTABLE SOLUTIONS.
LAST DECEMBER AT MALTA, IN MY MEETING WITH
PRESIDENT GORBACHEV, I PROPOSED THAT THE UNITED STATES
OFFER A VENUE FOR THE FIRST NEGOTIATING SESSION FOR A
FRAMEWORK CONVENTION, ONCE THE I.P.C.C. COMPLETES ITS
WORK. I REITERATE THAT INVITATION HERE, AND LOOK
FORWARD TO YOUR COOPERATION IN THAT AGENDA.
- 8 -
WE ALL KNOW THAT HUMAN ACTIVITIES ARE CHANGING THE
ATMOSPHERE IN UNEXPECTED AND UNPRECEDENTED WAYS. MUCH
REMAINS TO BE DONE. MANY QUESTIONS REMAIN TO BE
ANSWERED. TOGETHER, WE HAVE A RESPONSIBILITY TO
OURSELVES AND THE GENERATIONS TO COME, TO FULFILL OUR
STEWARDSHIP OBLIGATIONS. BUT THAT RESPONSIBILITY
DEMANDS THAT WE DO IT RIGHT.
- 9 -
WE ACKNOWLEDGE A BROAD SPECTRUM OF VIEWS ON THESE
ISSUES, BUT OUR RESPECT FOR A DIVERSITY OF PERSPECTIVE
DOES NOT DIMINISH OUR RECOGNITION OF OUR OBLIGATION --
OR SOFTEN OUR WILL TO PRODUCE POLICIES THAT WORK. SOME
MAY BE TEMPTED TO EXPLOIT LEGITIMATE CONCERNS FOR
POLITICAL POSITIONING. OUR RESPONSIBILITY IS TO
MAINTAIN THE QUALITY OF OUR APPROACH, OUR COMMITMENT TO
SOUND SCIENCE, AND AN OPEN MIND TO POLICY OPTIONS.
so THE UNITED STATES WILL CONTINUE ITS EFFORTS TO
IMPROVE OUR UNDERSTANDING OF CLIMATE CHANGE -- TO SEEK
HARD DATA, ACCURATE MODELS, AND NEW WAYS TO IMPROVE THE
SCIENCE -- AND DETERMINE HOW BEST TO MEET THESE
CHALLENGES. WHERE POLITICS AND OPINION HAVE OUTPACED
THE SCIENCE, WE ARE ACCELERATING OUR SUPPORT OF THE
TECHNOLOGY TO BRIDGE THAT GAP. AND WE ARE COMMITTED TO
COMING TOGETHER PERIODICALLY, FOR INTERNATIONAL
ASSESSMENTS OF WHERE WE STAND.
- 10 -
THEREFORE, THIS SPRING, THE UNITED STATES WILL
HOST A WHITE HOUSE CONFERENCE ON SCIENCE AND ECONOMIC
RESEARCH ON THE ENVIRONMENT -- CONVENING TOP OFFICIALS
FROM A REPRESENTATIVE GROUP OF NATIONS, TO BRING
TOGETHER THE THREE ESSENTIAL DISCIPLINES: SCIENCE,
ECONOMICS, AND ECOLOGY. THEY WILL SHARE THEIR
KNOWLEDGE, ASSUMPTIONS, AND STATE-OF-THE-ART RESEARCH
MODELS, TO OUTLINE OUR UNDERSTANDING AND HELP FOCUS OUR
EFFORTS.
I LOOK FORWARD TO PARTICIPATING IN THIS SEMINAR,
AND TO LEARNING FROM ITS DELIBERATIONS.
OUR GOAL CONTINUES TO BE MATCHING POLICY
COMMITMENTS TO EMERGING SCIENTIFIC KNOWLEDGE -- AND A
RECONCILING OF ENVIRONMENTAL PROTECTION TO THE
CONTINUED BENEFITS OF ECONOMIC DEVELOPMENT. AND AS
SECRETARY BAKER OBSERVED A YEAR AGO, WHATEVER GLOBAL
SOLUTIONS TO CLIMATE CHANGE ARE CONSIDERED, THEY SHOULD
BE AS SPECIFIC AND AS COST-EFFECTIVE AS THEY CAN
POSSIBLY BE.
- 11 -
IF WE HOPE TO PROMOTE ENVIRONMENTAL PROTECTION AND
ECONOMIC GROWTH AROUND THE WORLD, IT WILL BE IMPORTANT
NOT TO WORK IN CONFLICT, BUT WITH OUR INDUSTRIAL
SECTORS. THAT WILL MEAN MOVING BEYOND THE PRACTICE OF
COMMAND, CONTROL, AND COMPLIANCE -- TOWARD A NEW KIND
OF ENVIRONMENTAL COOPERATION -- AND TOWARD AN EMPHASIS
ON POLLUTION PREVENTION, RATHER THAN MERE MITIGATION
AND LITIGATION. MANY OF OUR INDUSTRIES, IN FACT, ARE
ALREADY PROVIDING CRUCIAL RESEARCH AND SOLUTIONS.
ONE CORPORATION, FOR EXAMPLE, STARTED AN IN-HOUSE
PROGRAM CALLED POLLUTION PREVENTION PAYS, THAT HAS
SAVED THE COMPANY WELL OVER HALF A BILLION DOLLARS
SINCE 1975 -- AND PREVENTED 112,000 TONS OF AIR
POLLUTANTS, 15,000 TONS OF WATER POLLUTANTS, AND ALMOST
400,000 TONS OF SLUDGE AND SOLID WASTE FROM BEING
RELEASED INTO THE ENVIRONMENT. THEY'VE DONE IT BY
REWARDING EMPLOYEES FOR COMING UP WITH THE IDEAS. AND
THEY HAVE CLEARLY DEMONSTRATED THE BENEFITS OF DOING IT
RIGHT.
- 12 -
WHERE DEVELOPING NATIONS ARE CONCERNED, SOME ARGUE
WE'LL HAVE TO ABANDON THE FREE-MARKET PRINCIPLES OF
PROSPEROUS ECONOMIES. IN FACT, WE THINK IT'S ALL THE
MORE CRUCIAL IN THE DEVELOPING COUNTRIES, TO HARNESS
INCENTIVES OF THE FREE ENTERPRISE SYSTEM, IN THE
SERVICE OF THE ENVIRONMENT. 11
I BELIEVE WE SHOULD MAKE USE OF WHAT WE KNOW. WE
KNOW THAT THE FUTURE OF THE EARTH MUST NOT BE
COMPROMISED. WE BEAR A SACRED TRUST IN OUR TENANCY
HERE -- AND A COVENANT WITH THOSE MOST PRECIOUS TO US:
OUR CHILDREN, AND THEIRS. WE ALSO UNDERSTAND THE
EFFICIENCY OF INCENTIVES -- AND THAT WELL-INFORMED FREE
MARKETS YIELD THE MOST CREATIVE SOLUTIONS. WE MUST NOW
APPLY THE WISDOM OF THAT SYSTEM, THE POWER OF THOSE
FORCES, IN DEFENSE OF THE ENVIRONMENT WE CHERISH.
WORKING TOGETHER, WITH GOOD FAITH AND EARNEST
DIALOGUE, I BELIEVE WE CAN RECONCILE VITALITY WITH
ENVIRONMENTAL PROTECTION. LET ME COMMEND YOU ON YOUR
OUTSTANDING WORK -- AND WISH YOU ALL DELIBERATE SPEED
IN YOUR EFFORTS TO ADDRESS A VERY DIFFICULT, BUT VERY
IMPORTANT, HUMAN CONCERN.
- 13 -
THANK YOU -- AND GOD BLESS YOU.
###
###
THE WHITE HOUSE
Office of the Press Secretary
February 5, 1990
For Immediate Release
REMARKS BY THE PRESIDENT
AT THE INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE
Georgetown University
Washington, D.C.
10:20 A.M. EST
THE PRESIDENT: Thank you, Dr. Bolin, and thank you for
all you're doing in leading this very important effort here. To
Professor Obasi and Dr. Tolba, and all the delegates of the World
Meteorological Organization, and the UNEP -- the United Nations
Environment Program. Let me command all of you for coming together
to examine an issue of such great importance.
I also want to salute Bill Reilly, our able EPA
Administrator. He will become the next Cabinet official in the U.S.
government. I want to thank Assistant Secretary Bernthao for his
leadership from the U.S. side of things. And also salute my able
Science Advisor who is with us today, Dr. Bromley, who many of you
know.
The recommendations that this distinguished organization
makes can have a profound effect on the world's environmental and
economic policy.
By being here today, I hope to underscore concern -- my
country's and my own personal concern about your work, about
environmental stewardship, and to reaffirm our commitment to finding
responsible solutions. It's both an honor and a pleasure to be the
first American President to speak to this organization, as its work
takes shape.
You're called upon to deliver recommendations which strike
a difficult and yet critical international bargain: a convergence
between global environmental policy and global economic policy. A
bargain where both perspectives benefit and neither is compromised.
As experts, you understand that economic growth and
environmental integrity need not be contradictory priorities. One
reinforces and complements the other. Each, a partner. Both are
crucial.
A sound environment is the basis for the continuity and
quality of human life and enterprise. Clearly, strong economies
allow nations to fulfill the obligations of environmental
stewardship. Where there is economic strength, such protection is
possible. But where there is poverty, the competition for resources
gets much tougher. Stewardship suffers.
For all of these reasons, I sincerely believe we must do
everything in our power to promote global cooperation: for
environmental protection and economic growth; for intelligent
management of our natural resources and efficient use of our
industrial capacity. And for sustainable and environmentally
sensitive development -- around the world.
The United States is strongly committed to the I.P.C.C.
process of international cooperation on global climate change. We
consider it vital that the community of nations be drawn together in
MORE
- 2 -
an orderly, disciplined, rational way to review the history of our
global environment, to assess the potential for future climate change
and to develop effective programs.
The state of the science, the social and economic impacts,
and the appropriate strategies all are crucial components to a global
resolution. The stakes here are very high; the consequences, very
significant.
The United States remains committed to aggressive and
thoughtful action on environmental issues. Last week, in my State of
the Union address, I spoke of stewardship, because I believe it's
something we owe ourselves, our children and their children. So we
are renewing the ethic of stewardship in our domestic programs; in
our work to forge international agreements; in our assistance to
developing and East bloc nations; and here, by chairing the Response
Strategies Working Group.
I have just submitted a budget to our Congress for Fiscal
1991. It includes over $2 billion in new spending to protect the
environment. And underscoring our commitment to you efforts, I am
pleased to note that funding for the U.S. Global Change Research
Program will increase by nearly 60 percent, to over $1 billion.
That commitment, by far the largest ever made by any
nation, reflects our determination to improve our understanding of
the science of climate change. We are working with our neighbors
around the world to enhance global monitoring and data management,
improve analysis, reduce the uncertainty of predictive models, and
conduct regular reassessments of the state of science.
Our program allows NASA and her sister agencies and all
our international partners to move forward with the "Mission to
Planet Earth.' That will initiate the U.S. Earth Observing System,
in cooperation with Europe and Japan, to advance the state of
knowledge about the planet we share.
Furthermore, even as we wait for the benefits of this
research, the United States has already taken many steps in our
country that bring both economic and environmental benefits. Steps
that make sense on their own merits in terms of responsibility and
efficiency, which help reduce emissions of CFC's and carbon dioxide
and other pollutants now entering the atmosphere. Let me outline
them very briefly:
We are pursuing new technology development that will
increase the efficiency of our energy use and thus reduce total
emissions.
We're crafting a revised Clean Air Act with incentives
for our private sector to find creative, market-driven solutions to
enhance air quality.
We've launched a major reforestation initiative to plant
a billion trees a year on the private land across America.
And we're working out a comprehensive review and revision
of our National Energy Strategy, with initiatives to increase energy
efficiency and the use of renewable sources. These efforts, already
underway, are the heart of a $336 million Department of Energy
program and are expected to produce energy savings through the year
2000 of over $30 billion -- while achieving significant pollution
reduction. Quite a return on investment.
We're also working, through diplomatic channels with our
colleagues in other countries and through innovative measures like
debt-for-nature swaps, to do more than simply reduce global
deforestation. We hope to reverse it, turn it around -- not
unilaterally, but by working with our international neighbors.
The economics of our response strategies to climate
change are getting intensive study here in our country, in the United
MORE
- 3 -
States. We're developing real data on the costs of various
strategies, assessing new measures, and encouraging other nations to
follow suit. And we look forward to sharing this knowledge and
technical support with our international colleagues.
As we work to create policy and agreements on action, we
want to encourage the most creative, effective approaches. Wherever
possible, we believe that market mechanisms should be applied -- and
that our policies must be consistent with economic growth and free
market principles in all countries. Our development efforts and our
dialogue can help us reach effective and acceptable solutions.
Last December at Malta, in my meeting with President
Gorbachev, I proposed that the United States offer a venue for the
first negotiating session for a framework convention, once the
I.P.C.C. completes its work. I reiterate that invitation here and
look forward to your cooperation in that agenda.
We all know that human activities are changing the
atmosphere in unexpected and in unprecedented ways. Much remains to
be done. Many questions remain to be answered. Together, we have a
responsibility to ourselves and the generations to come to fulfill
our stewardship obligations. But that responsibility demands that we
do it right.
We acknowledge a broad spectrum of views on these issues,
but our respect for a diversity of perspective does not diminish our
recognition of our obligation -- or soften our will to produce
policies that work. Some may be tempted to exploit legitimate
concerns for political positioning. Our resposibility is to maintain
the quality of our approach, our commitment to sound science, and an
open mind to policy options.
So the United States will continue its efforts to improve
our understanding of climate change -- to seek hard data, accurate
models, and new ways to improve the science -- and determine how best
to meet these tremendous challenges. Where politics and opinion have
outpaced the science, we are accelerating our support of the
technology to bridge that gap. And we are committed to coming
together periodically, for international assessments of where we
stand.
Therefore, this spring, the United States will host a
White House conference on science and economic research on the
environment -- convening top officials from a representative group of
nations, to bring together the three essential disciplines: science,
economics, and ecology. They will share their knowledge,
assumptions, and state-of-the-art research models to outline our
understanding and help focus our efforts. I look forward personally
to participating in this seminar and to learning from its
deliberations.
Our goal continues to be matching policy commitments to
emerging scientific knowledge -- and a reconciling of environmental
protection to the continued benefits of economic development. And as
Secretary Baker observed a year ago, whatever global solutions to
climate change are considered, they should be as specific and as
cost-effective as they can possibly be.
If we hope to promote environmental protection and
economic growth around the world, it will be important not to work in
conflict, but with our industrial sectors. That will mean moving
beyond the practice of command, control, and compliance -- toward a
new kind of environmental cooperation -- and toward an emphasis on
pollution prevention, rather than mere mitigation and litigation.
Many of our industries, in fact, are already providing crucial
research and solutions.
One corporation, for example -- and there are others, but
I'll single out one of them -- 3M started an in-house program called
Pollution Prevention Pays -- one company. And that has saved the
company well over a half a billion dollars since 1975 -- prevented
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- 4 -
112,000 tons of air pollutants, 15,000 tons of water pollutants, and
almost 400,000 tons of sludge and solid waste from being released
into the environment. They've done it by rewarding employees for
coming up with ideas. And they have clearly demonstrated the
benefits of doing it right.
Where developing nations are concerned, I know some argue
that we'll have to abandon the free-market principles of prosperous
economies. In fact, we think it's all the more crucial in the
developing countries to harness incentives of the free enterprise
system in the service of the environment.
I believe we should make use of what we know. We know
that the future of the Earth must not be compromised. We bear a
sacred trust in our tenancy here -- and a covenant with those most
precious to us: our children and theirs. We also understand the
efficiency of incentives -- and that well-informed free markets yield
the most creative solutions. We must now apply the wisdom of that
system, the power of those forces, in defense of the environment we
cherish.
Working together, with good faith and earnest dialogue, I
believe we can reconcile vitality with environmental protection. And
so let me commend you on your outstanding work -- and wish you all
deliberate speed in your efforts to address a very difficult, but
very important, human concern.
Thank you all very much. It is a great pleasure to be
the first President to address this distinguished group. Thank you
very much. (Applause.)
END
10:36 A.M. EST